Golden Cross Resources : 2015 Annual Report

Golden Cross Resources Ltd

For personal use only

Annual Report 2015

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CONTENTS
Interim Chairman's Letter to Shareholders-------------------------------------------------------------------------------------------	1
Review of Operations-----------------------------------------------------------------------------------------------------------------------	2
Royalties ---------------------------------------------------------------------------------------------------------------------------------------	25
Directors' Report ----------------------------------------------------------------------------------------------------------------------------	26
Corporate Governance Statement ------------------------------------------------------------------------------------------------------	32
Consolidated Statement of Financial Position-------------------------------------------------------------------------------------	34
Consolidated Cash Flow Statement-----------------------------------------------------------------------------------------------------	36
Consolidated Statement of Changes in Equity---------------------------------------------------------------------------------------	37
Notes to the Financial Statements------------------------------------------------------------------------------------------------------	38
Directors' Declaration ----------------------------------------------------------------------------------------------------------------------	60
Independent Audit Report to the Members -----------------------------------------------------------------------------------------	61
Interests in Mining Tenements ----------------------------------------------------------------------------------------------------------	63
Shareholder Information -----------------------------------------------------------------------------------------------------------------	64

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COMPANY PARTICULARS

DIRECTORS

Jingmin Qian, BEc, MBA, CFA, FAICD

Interim Chairman

Ian Buchhorn, BSc (Hons), Dip Geosci (Min Econ), MAusIMM

Non-Executive Director

Xiaoming Li, BA(Comm), MBA

Non-Executive Director

Yuanheng Wang

Non-Executive Director

Yan Li, MBA

Alternate Director for Xiaoming Li

Neil Fearis (appointed on 22 October 2015) Non-ExecutiveDirector

Rob Thompson (appointed on 22 October 2015) Non-ExecutiveDirector

Mark Sykes (appointed on 22 October 2015) Non-ExecutiveDirector

PRINCIPAL AND REGISTERED OFFICE

22 Edgeworth David Avenue

Hornsby NSW 2077

Australia

Ph	[phone]
Fax	[phone]
Email	[e-mail]
Web	www.goldencross.com.au
ABN	65 063 075 178

STOCK EXCHANGE LISTING

Golden Cross Resources Ltd securities are listed for quotation on the Australian Securities Exchange (Listing Code GCR)

AUDITORS

Ernst & Young

Chartered Accountants

680 George Street

Sydney NSW 2000

For

INTERIM CEO

Ken Hellsten, BSc (Hons), MAICD, FAusIMM

COMPANY SECRETARY

Mark Langan (until 10 August 2015)

Carl Hoyer (appointed on 10 August 2015)

SHARE REGISTER

Boardroom Limited

Grosvenor Place,

Level 12, 225 George Street

Sydney NSW 2000

Ph	[phone]
Fax	[phone]

EXPLORATION MANAGER

Bret Ferris BAppSc, GradDipCompSt, MAIG

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Dear Shareholders,

The past year has been one of transition for the Company. Golden Cross has moved from an exploration company to one with a strong project development focus.

In late 2014 management changes were instigated to bring on board the technical skills to move our key project Copper Hill forward. The new team has delivered a positive Scoping Study which provides the foundation for further project development activities during the current year. The Scoping Study explored a 2 - 3 million tonnes per annum (mtpa) mining and processing operation treating the higher grade resources through open pit mining, crushing, grinding and floatation to produce a copper-gold concentrate for sale.

Building on the excellent drilling results from the 2014 drilling program at central Copper Hill and increased emphasis on detailed structural and geochemical analysis, the team has development an updated geological model with a focus on the central higher grade mineralisation. This revised model demonstrates improved continuity of the higher grade, near surface material which also exhibits superior metallurgical performance to the remaining resources.

In addition, a revision of the planned process plant equipment using a "fit for purpose" approach, selected off-shore procurement and site costs which reflect the cooling of the resources market since the previous studies (2006 - 2011) has provided capital and operating cost savings for the project.

The study results were sufficiently encouraging for the Board to approve the commencement of a Pre- feasibility Study (PFS) subject to securing adequate funding.

The Board and management actively pursued funding resolutions for the PFS and our priority exploration projects with a combination of Rights Issue and placements to sophisticated investors. A fully funded proposal was put on hold due to the calling of an Extraordinary General Meeting (EGM), and independent director appointments were given a higher priority. Three new directors Neil Fearis, Robert Thomson, and Mark Sykes have been elected at the EGM. I welcome them to the Board. Post the EGM, the Company received an indicative takeover offer by HQ Mining. The Company will work with appropriate advisors to guide shareholders in this process.

The Board wishes to thank you for your understanding and on-going support during the year. In 2016 the Company aims to accelerate the pace of development at Copper Hill as well as undertake targeted programs on priority projects within our high quality exploration portfolio.

I welcome the opportunity to meet with you at the Annual General Meeting and share with you our 2015 results.

Yours sincerely,

Jingmin Qian

Interim Chairman

Golden Cross Resources Limited - Annual Report 2015

For personal use only

Review of Operations

Golden Cross projects are diversified across a range of commodities and regions (Figure 1). The core project at Copper Hill is located near Molong, 35 kilometres north of Orange in central western New South Wales.

Figure 1: Golden Cross Project Locations & Status

Molong Project - Copper Hill

(Copper-Gold 100% GCR)

Substantial progress has been made during the year towards confirming the Copper Hill porphyry copper-gold project has the potential to become a profitable mine. While further drilling and studies are required, the drilling program completed during the second half of 2014 and the subsequent Scoping Study have demonstrated the presence of a cohesive higher grade mineralised system which could support a 2 - 3 million tonnes per annum (mtpa) mining and processing operation.

The next step will be to undertake a Pre-feasibility Study to further define and extend the higher grade resources and complete focussed technical programs, principally in the metallurgical area, to confirm identified opportunities to improve the financial returns. This program is expected take some 9 months to complete and cost up to $2.9 million, including all corporate overhead and support costs.

Golden Cross Resources Limited - Annual Report 2015

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Geology and Mineralisation

Porphyry copper-gold mineralisation at Copper Hill is hosted by Ordovician aged rocks formed in an ancient island arc setting similar to porphyry copper-gold deposits of the western Pacific. The Copper Hill Intrusion Complex consists of diorite porphyry and multiphase tonalite porphyry intrusions within the associated Fairbridge Volcanics (Figure 2). Younger Silurian to Early Devonian sedimentary rocks (sandstone and limestone) occur west of Copper Hill, and to the east the prospective intrusives and volcanics are overlain by flat lying Tertiary Basalt.

The drilling program completed in late 2014 consisted of 6 drillholes (GCHD469 - 474). GCHD469 targeted a possible hidden mineralising porphyry under Buckleys Hill, and the remaining five tested the central portion of the mineralised system at Copper Hill on 100 metre spaced sections.

While GCHD469 did not encounter the interpreted mineralising porphyry it provided vectors for future drilling with a broad moderate grade zone of mineralisation intersected in altered wall rock host andesites below previous drilling.

The drilling at Copper Hill provided excellent headline results (refer Table 1) and a significant amount of detailed geological, geochemical and structural data. Detailed analysis of this information by 360 Geoscience and Golden Cross staff and consultants combined with historic data has enabled the development of a cohesive geological model for the mineralised system, including the high grade zones and assisted both the resource modelling and future exploration.

Table 1: Significant grade intersections from 2014 drilling program

Hole ID	From	To	Interval	%Cu	gpt Au
GCHD469	713	743	30	0.26	0.70
GCHD470	11	71	60	1.83	5.41
	76	100	24	0.64	0.74
	171	210	39	0.61	0.09
GCHD471	126	138	13	0.74	0.43
	144	209	65	0.58	0.44
	288	304	16	0.41	0.27
GCHD472	32	54	22	0.73	0.83
	60	88	28	0.57	0.39
	122	172	50	0.56	0.83
	178	190	12	0.78	0.60
	210	230	20	0.43	0.33
	250	280	30	0.44	0.29
	326	340	14	0.57	0.52
	426	436	12	0.48	0.36
GCHD473	60	68	8	0.71	0.95
	386	444	58	0.64	0.68
GCHD474	114	136	22	0.49	0.50
	142	182	40	0.81	2.04
	198	208	10	0.47	1.40
	218	246	28	0.77	1.45
	334	351.6	17.6	0.45	0.27

Intercepts calculated above a 0.4% copper cutoff, with a minimum 4m internal consecutive waste, and a 6m minimum length

Golden Cross Resources Limited - Annual Report 2015