golden state resources limited - asx · golden state resources limited ... during the test gas...
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ABN 39 063 074 635 181 Roberts Road Subiaco West Perth Western Australia
Postal: PO Box 616 West Perth 6872 Australia Ph: +61 8 9381 9522 Fax: +61 8 9381 9525 Email: [email protected]
GOLDEN STATE RESOURCES LIMITED
AND CONTROLLED ENTITIES ACN : 063 074 635
INTERIM FINANCIAL REPORT
FOR THE HALF‐YEAR ENDED
31 DECEMBER 2009
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GOLDEN STATE RESOURCES LIMITED
AND CONTROLLED ENTITIES
ACN : 063 074 635
CONTENTS
Directors’ Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Performance
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Review Report
Auditor’s Independence Declaration
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
ACN : 063 074 635
DIRECTORS’ REPORT
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Your Directors submit their report for the half‐year ended 31 December 2009.
DIRECTORS
Directors were in office for the entire period unless otherwise stated. The names of the Company’s Directors in office during the half‐year and until the date of this report are as below:
Mr Lewis Cross Mr Richard Sciano Mr Richard de Boer
REVIEW AND RESULTS OF OPERATIONS
The net loss of the Company after income tax in $‘000 for the six months ended 31 December 2009 amounted to $895 (2008: $595).
GOLDEN EAGLE PROSPECT ‐ ONSHORE OIL & GAS, UTAH, USA
The Company is exploring 10,457 hectares (25,937 acres) of State and Federal Government oil and gas leases at the Golden Eagle Oil & Gas Field in Grand County, Utah, in the USA.
PARADOX BASIN #1
Paradox Basin #1 is currently suspended pending a work‐over or side track to recomplete the Ismay Formation. During August Paradox Basin #1 was tested at a maximum rate of 3.36 million cubic feet/day. The wellhead pressure (WHP) had built to 3450 psi since testing in December 2008.
During the test gas production rates were sustained generally above 2 million cubic feet/day for approximately 20 hours. Rates during the test period are 3.1 million cubic feet/day with 2800 psi WHP after 13 hours. A rate of 2.4 million cubic feet/day 2800 psi WHP was recorded after 19 ½ hours.
There was no evidence of the mechanical blockage which was seen in December 2008, which was likely to have been caused by gas hydrates. Twenty hours into the test the choke size was increased to 14/64” and back pressure on the separator was also increased after which the gas rate declined due to the entry of water into the production string. Tubing pressure and gas rate declined and minor water production commenced 30 minutes after the change in choke size. Rates stabilised at approximately 500,000 cubic feet/day with minor water production.
A planned recompletion of Paradox Basin #1 was suspended in light of the results of Paradox Basin #2 which are out lined below. The results and interpretation of the previous testing suggest that the gas production rates can be improved and water suppressed. The Ismay Formation gas zones have very low connate waters and hence the rapid onset of the water in concert with direct evidence from the production logging from the Paradox Basin #2 well, indicates the water occurs via cross flow through poor quality cement and or excessive vertical propagation of the fracture stimulation.
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
ACN : 063 074 635
DIRECTORS’ REPORT
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PARADOX BASIN #2
Paradox Basin #2 is currently suspended at a total depth of 14,261’ (4347m). The Barker Creek and Chimney Rock Formations were tested during July. Rig 234 was released on 29 July. The Ismay Formation was tested and produced at 1.6 million cubic feet per day following fracture stimulation.
The Ismay Formation was perforated over the interval 10344’ to 10,376’ (3152.8m to 3162.6m). An immediate increase in pressure was observed at surface, and gas was produced at an initial rate of 237,000 standard cubic feet/day. The Ismay Formation was then stimulated with a Gel‐based fracture comprising 85,700lbs proppant and 1252 barrels of carrier fluid. After the fracture stimulation the Ismay Formation produced gas at 1.6 million standard cubic feet/day. The gas production associated with unexpectedly high rates of water production which is almost certainly a result of channelling behind pipe. Evaluation of the gas zone indicates low connate water and both the cement bond logs and tracer log confirm the production zone has not been effectively isolated.
Fracture placement was determined using a series of staged isotopes added to different phases of the fracture. A SpectralogTM tracer survey tracks the isotope distribution revealing the placement of the fracture. The SpectralogTM in Paradox Basin #2 confirmed that the fracture travelled upwards nearly 300’ behind the casing to 10,050’ with the main placement occurring from 10,136’ to 10,212’ in a porous water bearing zone. The SpectralogTM shows negligible placement of the fracture in the Ismay Formation gas zone.
Two cement squeezes conducted to isolate the Ismay Formation gas from the overlying saline aquifer were not successful in providing isolation from the water and Paradox Basin #2 was suspended and is not capable of commercial production in its current state. Indications are that the Ismay Formation should sustain viable gas production provided the completions are isolated from adjacent aquifers.
The Ismay Formation in Paradox Basin #2 is 317’ (96.6m) structurally lower than Paradox Basin #1 considerably extending the thickness of the gas column in the Golden Eagle gas field. This confirms an appreciable increase in the known area within closure for the Ismay Formation. Current mapping indicates there is also several hundred feet of closure up dip from Paradox Basin #1.
The evaluation and testing of Paradox Basin #1 and Paradox Basin #2 conducted during the latter half of 2009 is a step forward in the appraisal of the Golden Eagle Field.
Paradox Basin #2 is being considered for re‐entry and deepening to the Leadville Limestone. Deepening to the Leadville Limestone will be considered in the event Paradox Basin #3 is not successful or at sometime in the future once the Ismay Formation gas has been produced.
Paradox Basin #2 was structurally located on the flanks of the Pennsylvanian structure over the crest of the underlying Mississippian structure. A vertical seismic profile (VSP) acquired and processed after reaching the total depth of 14,216’ places the current total depth closer to the Leadville Limestone than previously considered. The Leadville Limestone is one of the primary objectives in the Paradox Basin.
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
ACN : 063 074 635
DIRECTORS’ REPORT
‐ 3 ‐
PARADOX BASIN #3
Permitting, well design and site works for Paradox Basin #3 were completed during the quarter. F.J. Brown and associates completed well design and an application was lodged with the Department of Natural Resources of the State of Utah. The Permit was awarded on December 21. Site works were completed by mid January. Paradox Basin #3 spudded on January 27th on schedule. Paradox Basin #3 is a deviated Ismay Formation production well which incorporates key learning elements derived from our previous testing and drilling on the Golden Eagle Gas Field.
INDEPENDENT RESERVES EVALUATION
RPS Energy completed independent evaluation of the Golden Eagle gas field following the drilling and testing of the Paradox Basin #2 well.
Discovered gas‐initially‐in‐place (GIIP) for the Ismay Formation increased to 9.0 Billion standard cubic feet (Bscf) at the P90 (Low Estimate) following successful recovery of gas on test from the Ismay Formation in Paradox Basin #2. The gas was recovered along the southern flank of the structure 288’ feet down dip of the equivalent Ismay Formation gas production in Paradox Basin #1.
Estimates for Discovered and Undiscovered GIIP for the P50 and P10 (Best Estimate and High Estimate) are 85.6 Bscf and 243.1 Bscf respectively. The volumes reflect the results of Paradox Basin #2 in the Pennsylvanian section as the well was positioned to intersect the crest of the Leadville Formation and was not ideal for testing the shallower Pennsylvanian targets. Objectives in the deeper Pennsylvanian section such as the Barker Creek, Alkali Gulch and Akah formations were intersected in close proximity to the bounding fault and are potentially isolated from the main structure. Results of the Independent estimates for the GIIP in Golden Eagle gas field are shown below.
Table 1 Discovered Petroleum‐Initially‐In‐Place – Gas (Bscf), Golden Eagle Gas Field
Discovered PIIP (Gas Bscf)
Formation Low Estimate (P90) Best Estimate(P50) High Estimate(P10)
Ismay 9.0 31.5 101.0
Barker Creek 6.2 14.4 30.7
Table 2 Undiscovered Petroleum‐Initially‐In‐Place – Gas (Bscf), Golden Eagle Gas Field
Undiscovered PIIP (Gas Bscf)
Formation Low Estimate (P90) Best Estimate(P50) High Estimate(P10)
Alkali Gulch 9.3 29.7 90.0
Leadville Limestone 3.0 10.0 21.4*
* The high estimate by RPS limits the extent of the structural closure of the Leadville Limestone to the PB#1 well. Golden State Resources consider that PB#1 has not adequately tested the Leadville Limestone and that a higher realisation is possible.
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
ACN : 063 074 635
DIRECTORS’ REPORT
‐ 4 ‐
Initial 100% Ownership and Operator
Golden State holds an initial 100% interest in Paradox Basin #1 well, and operatorship through its 100%‐owned US subsidiary, Golden Eagle Exploration LLC. Denver‐based joint venture partner Eclipse Exploration Inc has the right to back in with a 16.67% working interest after the drilling of two wells by Golden State.
GOLDEN STATE RESOURCES WESTERN AUSTRALIA MINERAL ASSETS
Golden State retains several minerals interests in Western Australia. The interests comprise:
Johnston Range Project (Iron Ore)
Mt Korong (Gold and Nickel)
Leonora (Gold)
Laverton (Gold)
JOHNSTON RANGE PROJECT
The Johnston Range Project covers 12 tenements spanning approximately 210 km2 in the Central Yilgarn area north of Koolyanobbing. The tenements are owned by Golden State Resources Limited and Polaris Metals NL has the right to earn a 70% interest in the rights to explore for and mine iron ore by sole funding a pre‐feasibility study on a JORC compliant resource or spending $1M on exploration, whichever is greater. Following the completion of the 70% earn‐in, a joint venture will form between Polaris and Golden State and Golden State can opt to maintain its 30% interest or dilute further. If Golden State opts to dilute further, Polaris must sole fund all exploration activities until a bankable feasibility study is completed.
The tenements are near the Cliffs Deception Iron Ore Project and during the period two mineralised trends with assays of up to 68.4% Fe were identified. The mineralisation comprises haematite‐goethite mineralisation of high grade and will form an integral part of a planned 100Mt Yilgarn Iron ore project. Further information is available on the ASX or Polaris website.
http://www.polarismetals.com.au/upload/documents/investor/asx/20091030301009MineralisationIdentifiedatJohnstonRange.pdf
MT KORONG GOLD & NICKEL JOINT VENTURE
The Mt Korong licence, E39/1202 is located 50km east of Leonora. A joint venture between Jindalee Resources and Golden State Resources commenced on permit grant.
Initial field work comprised the collection of a total of 676 –2mm soil samples in early December 2008 from areas of mainly residual soils or shallow cover in the northeastern portion of the joint venture licence. The survey was designed as a low‐cost means of screening the ultramafic stratigraphy in the
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
ACN : 063 074 635
DIRECTORS’ REPORT
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area. Results of this survey did not reveal any areas that could be considered to be indicative of the presence of nickel sulphide mineralisation. However, the locally elevated nickel in soil values, in association with lateratised ultramafic, when combined with the evidence from limited historical drilling would indicate that this area could host several small pods of nickel laterite mineralisation beneath shallow cover. Golden State has elected to dilute our interests.
LAVERTON KELLY WELL GOLD PROJECT
Kelly Well Prospect, E38/1481, covers an area near Mt Weld, seventeen kilometres southeast of Laverton. Access to the project is by turning south along station tracks adjacent to the Ida pit bund wall, approximately 11.7km from Laverton along the Laverton‐Burtville road. The area has recognised potential to host small scale oxide deposits which can be rapidly commercialised as feed to the nearby Granny Smith Mine located approximately 7 kilometres to the south west.
Golden State have 100% of the interests and are reviewing the possibility to conduct infill drilling along existing mineral trends. A partial surrender was required by 10 January 2010.
LEONORA CRAWFORD GOLD PROJECT
The tenements are located 25 kilometres east of Leonora. In the reporting period Golden State completed further studies including resource estimates for the Crawford gold deposit. RC drilling has indicated a resource of 455,118 tonnes at 1.95g/t. Future work will be concentrated around the Crawford deposit, and will include mining studies.
AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 has been received and is included within the Financial Report.
Signed in accordance with a resolution of the Directors.
Mr Richard Sciano Director
Dated this 12th day of March 2010
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the half‐year ended 31 December 2009
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Consolidated
31 December 2009 31 December 2008 $’000 $’000 Revenue 20 93 Director and employee benefits expense Legal fees
(354) (50)
(213) (11)
Depreciation Rental expense
(11) (71)
(9) (63)
Share based compensation (14) (43) Share of loss from associates (237) (86) Corporate and administration expenses (178) (263)
Loss before income tax (895) (595)
Income tax expense ‐ ‐
Loss for the period (895) (595)
Other Comprehensive Income
Foreign currency translation Income tax relating to components of other comprehensive income for the period
(5,293)
‐
10,387
‐
Other comprehensive income for the period (5,293) 10,387
Total comprehensive (loss) / income for the period (6,188) 9,792
Basic and diluted loss per share (cents per share) (0.22) (0.24)
The accompanying notes form part of these financial statements.
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2009
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Consolidated
Note 31 December 2009 30 June 2009 $’000 $’000 CURRENT ASSETS Cash and cash equivalents 652 518 Trade and other receivables 42 4,429 Other current assets 39 47
TOTAL CURRENT ASSETS 733 4,994
NON CURRENT ASSETS Financial assets 4 ‐ 756 Property, plant and equipment 132 127 Deferred exploration and evaluation expenditure Other non current assets
43,132 174
43,058 112
TOTAL NON CURRENT ASSETS 43,438 44,053
TOTAL ASSETS 44,171 49,047
CURRENT LIABILITIES Trade and other payables 202 3,467
TOTAL CURRENT LIABILITIES 202 3,467
TOTAL LIABILITIES 202 3,467
NET ASSETS 43,969 45,580
EQUITY Issued capital 5 59,819 59,513 Reserves (575) 447 Accumulated losses (15,275) (14,380)
TOTAL EQUITY 43,969 45,580
The accompanying notes form part of these financial statements.
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the half‐ year ended 31 December 2009
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Issued Capital
Option Reserve
Foreign Exchange Reserve
Accumulated Losses
Total
$’000 $’000 $’000 $’000 $’000 At 1 July 2008 49,906 1,532 (5,822) (10,618) 34,998 Loss for the period ‐ ‐ ‐ (595) (595) Foreign currency translation ‐ ‐ 10,387 ‐ 10,387
Total comprehensive income for the period
‐ ‐ 10,387 (595) 9,792
Capital raising costs (33) ‐ ‐ ‐ (33) Share based payment ‐ 43 ‐ ‐ 43 Minority interest of shares issued by controlled entity
‐ 236 2,357 ‐ 2,593
At 31 December 2008 49,873 1,811 6,922 (11,213) 47,393
At 1 July 2009 59,513 1,816 (1,369) (14,380) 45,580 Loss for the period ‐ ‐ ‐ (895) (895) Foreign currency translation ‐ ‐ (5,293) ‐ (5,293) Total comprehensive income for the period
‐ ‐ (5,293) (895) (6,188)
Shares Issued (net) 306 ‐ ‐ ‐ 306 Share based payment ‐ 14 ‐ ‐ 14 Options issued (net) ‐ 3,612 ‐ ‐ 3,612 Share of associates reserves ‐ 203 442 ‐ 645
At 31 December 2009 59,819 5,645 (6,220) (15,275) 43,969
The accompanying notes form part of these financial statements.
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
ACN : 063 074 635
CONSOLIDATED STATEMENT OF CASH FLOWS
For the half‐ year ended 31 December 2009
‐ 9 ‐
31 December 2009 31 December 2008 $’000 $’000 Cash flows from operating activities Payments to suppliers and employees (741) (509) Payments for exploration expenditure (3,248) (2,119) Interest and dividends received 20 109
Net cash outflow from operating activities (3,969) (2,519)
Cash flows from investing activities Payments for plant and equipment (16) (12) Payments for purchase of other financial assets ‐ (574)
Net cash outflow from investing activities (16) (586)
Cash flows from financing activities Proceeds from issue of shares in parent entity 660 ‐ Proceeds from issue of options 3,814 ‐
Payments for capital raising activities (355) (33)
Net cash from financing activities 4,119 (33)
Net increase / (decrease) in cash and cash equivalents 134 (3,138)
Cash and cash equivalents at the beginning of the half year 518 4,656
Cash and cash equivalents at the end of the half year 652 1,518
The accompanying notes form part of these financial statements.
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
ACN : 063 074 635
NOTES TO THE FINANCIAL STATEMENTS For the half‐ year ended 31 December 2009
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1. BASIS OF PREPARATION OF THE INTERIM FINANCIAL REPORT
The Interim Financial Report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 “Interim Financial Reporting”. Compliance with AASB 134 ensures compliance with International Financial Reporting Standards IAS 34 “Interim Financial Reporting”. The financial report covers the consolidated entity of Golden State Resources Limited and controlled entities. Golden State Resources Limited is a listed public company domiciled in Australia. The Interim Financial Report should be read in conjunction with the Annual Financial Report of Golden State Resources Limited as at 30 June 2009. It is also recommended that the Interim Financial Report be considered together with any public announcements made by Golden State Resources Limited and controlled entities during the half‐year ended 31 December 2009 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001. The Interim Financial Report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the consolidated entity as the full financial report. The accounting policies and methods of computation adopted in the preparation of the Interim Financial Report are consistent with those adopted and disclosed in the Annual Financial Report for the year ended 30 June 2009, except for: (a) Change in accounting policies The consolidated entity has adopted the following new and revised Australian Accounting Standards issued by the AASB which are mandatory to apply to the current interim period. Disclosures required by these Standards that are deemed material have been included in this financial report on the basis that they represent a significant change in information from that previously made available. (i) Presentation of financial statements The consolidated entity has applied the revised AASB 101 Presentation of Financial Statements (2007) from 1 January 2009. The revision of this standard now requires the consolidated entity to present all non‐owner changes to equity (‘comprehensive income’) in the statement of comprehensive income. The consolidated entity has presented the income statement and non‐owner changes in equity in one statement of comprehensive income. All owner changes in equity are presented separately in the statement of changes in equity. The presentation requirements have been applied for the entire reporting period and comparative information has been re‐presented to also comply with the revised AASB 101.
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
ACN : 063 074 635
NOTES TO THE FINANCIAL STATEMENTS For the half‐ year ended 31 December 2009
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(ii) Segment reporting The consolidated entity has applied AASB 8 Operating Segments with effect from 1 July 2009. AASB 8 requires the entity to identify operating segments and disclose segment information on the basis of internal reports that are provided to, and reviewed by, the chief operating decision maker of the consolidated entity to allocate resources and assess performance. In the case of the consolidated entity the chief operating decision maker is the Board of Directors. Operating segments now represent the basis on which the company reports its segment information to the Board on a monthly basis. The change in policy has not resulted in a change to the disclosure presented. (b) Reporting Basis and Conventions For the purpose of preparing the half‐year report, the half‐year has been treated as a discrete reporting period. The half‐year report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non‐current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied
2. DIVIDENDS
There have been no dividends declared or recommended and no distributions made to shareholders or other persons during the period.
3. SEGMENT INFORMATION
Business
The consolidated entity operates in one business segment, being the exploration and mining of oil and gas.
Geographical
Australia USA Consolidated 31 Dec 09 30 Jun 09 31 Dec 09 30 Jun 09 31 Dec 09 30 Jun 09 $’000 $’000 $’000 $’000 $’000 $’000 Revenue 19 237 1 3 20 240 Result ‐ loss (836) (3,607) (59) (156) (895) (3,763) Assets 1,574 1,447 42,597 47,601 44,171 49,047 Liabilities 141 3,265 61 203 202 3,467
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
ACN : 063 074 635
NOTES TO THE FINANCIAL STATEMENTS For the half‐ year ended 31 December 2009
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4. FINANCIAL ASSETS
31 December 2009 30 June 2009 $ $ Investments accounted for using the equity method – Associated Companies
‐ 756
‐ 756 Investments accounted for using the equity method are for shares held in White Canyon Uranium Ltd, a company listed on the Australian Stock Exchange. The consolidated entity holds 45,670,000 shares in White Canyon Uranium Ltd, representing 24.3% of the issued capital. The market value of the investment as at 31 December 2009 is $11,653,500.
5. ISSUED CAPITAL
a) Ordinary Shares No. of shares $
At the beginning of reporting period 397,385,444 59,513,272
Shares issued during the year:
‐ 7 December 2009 20,000,000 660,000
Capital raising costs ‐ (354,744)
At reporting date 417,385,444 59,818,528
b) Unlisted Options
The balance of unlisted options at 31 December 2009 is 10,800,000.
c) Listed Options
On the 7 August 2009, 381,490,026 listed options at an issue price of 1 cent per share was issued to shareholders as part of a pro‐rata non renounceable rights issue to raise $3,814,900. These listed options have an exercise price of 12 cents each and expire on 30 November 2010. As at 31 December 2009, there were no other listed options. F
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
ACN : 063 074 635
NOTES TO THE FINANCIAL STATEMENTS For the half‐ year ended 31 December 2009
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6. CONTINGENT LIABILITIES
Since the last annual reporting date there has been no material change of any contingent liabilities or contingent assets.
7. EVENTS SUBSEQUENT TO REPORTING DATE
There have been no events subsequent to balance date other than:
‐ On 29 January 2010, Golden State Resources entered into a loan agreement with Social Investment Pty Ltd for AUD $2.5m. This will provide the Company with funds for the further development of the Paradox Basin.
‐ On the 25 February 2010, Golden State Resources raised $1.1m through the placement 22.5m shares at 4.5 cents per share.
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GOLDEN STATE RESOURCES LIMITED AND CONTROLLED ENTITIES
ACN : 063 074 635
DIRECTORS’ DECLARATION
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The Directors of the Company declare that:
1. The financial statements and notes are in accordance with the Corporations Act 2001; and
(a) comply with Accounting Standard AASB 134 “Interim Financial Reporting” and the Corporations Regulations 2001; and
(b) giving a true and fair view of the financial position of the consolidated entity as at 31 December 2009 and of its performance for the half‐year ended on that date.
2. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Mr Richard Sciano Director
Dated this 12th day of March 2010
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8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9101 www.rsmi.com.au
Liability limited by a scheme approved under Professional Standards Legislation
Major Offices in: Perth, Sydney, Melbourne, Adelaide and Canberra ABN 36 965 185 036
RSM Bird Cameron Partners is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms.
INDEPENDENT AUDITOR’S REVIEW REPORT
TO THE MEMBERS OF
GOLDEN STATE RESOURCES LIMITED
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of Golden State Resources Limited (“the
consolidated entity”) which comprises the statement of financial position as at 31 December 2009, and the
statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-
year ended on that date, accompanying notes to the financial statements and the directors’ declaration. The
consolidated entity comprises both Golden State Resources Limited as the parent entity and the entities it
controlled during the half-year.
Directors’ Responsibility for the Half-Year Financial Report
The directors of the consolidated entity are responsible for the preparation and fair presentation of the half-year
financial report in accordance with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining
internal controls relevant to the preparation and fair presentation of the half-year financial report that is free
from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We
conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an
Interim Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the
basis of the procedures described, we have become aware of any matter that makes us believe that the financial
report is not in accordance with the Corporations Act 2001 including:
− giving a true and fair view of the consolidated entity’s financial position as at 31 December 2009 and its
performance for the half-year ended on that date; and
− complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations
Regulations 2001.
As the auditor of Golden State Resources Limited, ASRE 2410 requires that we comply with the ethical
requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does
not enable us to obtain assurance that we would become aware of all significant matters that might be identified
in an audit. Accordingly, we do not express an audit opinion. For
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Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that
the half-year financial report of Golden State Resources Limited is not in accordance with the Corporations Act
2001 including:
(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2009 and
of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations
Regulations 2001.
RSM BIRD CAMERON PARTNERS
Chartered Accountants
Perth, WA TUTU PHONG
Dated: 12 March 2010 Partner
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Liability limited by a scheme approved under Professional Standards Legislation
Major Offices in: Perth, Sydney, Melbourne, Adelaide and Canberra ABN 36 965 185 036
RSM Bird Cameron Partners is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms.
8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9101 www.rsmi.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the review of the financial report of Golden State Resources Limited for the half-year ended
31 December 2009, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
(ii) any applicable code of professional conduct in relation to the review.
This declaration is in respect of Golden State Resources Limited and the entities it controlled during the period.
RSM BIRD CAMERON PARTNERS
Chartered Accountants
Perth, WA TUTU PHONG
Dated: 12 March 2010 Partner
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