Announcement PDF POTASH WEST NL ABN 62 147 346 334 Half‐Year Financial Report 31 December 2013 POTASH WEST NL ABN 62 147 346 334 DIRECTORS’ REPORT Directors Adrian Griffin Patrick McManus George Sakalidis Gary Johnson Company Secretary Amanda Wilton‐Heald Registered and Principal Office Suite 3, 23 Belgravia Street Belmont WA 6104 AUSTRALIA Telephone (+61 8) 9479 5386 Facsimile (+61 8) 9475 0847 Website www.potashwest.com.au Email info@potashwest.com.au Share Registry Advanced Share Registry 150 Stirling Highway Nedlands WA 6009 AUSTRALIA Telephone (+61 8) 9389 8033 Facsimile (+61 8) 9389 7871 Auditor Ernst & Young Ernst & Young Building 11 Mounts Bay Road Perth WA 6000 AUSTRALIA Telephone (+61 8) 9429 2222 Facsimile (+61 8) 9429 2436 Stock Exchange Listing Potash West NL shares are listed on the Australian Securities Exchange (ASX code: PWN) and OTC Pink (OTC Pink Code: PWNNY). 1 POTASH WEST NL ABN 62 147 346 334 DIRECTORS’ REPORT Your Directors submit their report for the half‐year ended 31 December 2013. Directors The names of the Company’s Directors in office during the half‐year and until the date of this report are set out below. Directors were in office for the entire period unless otherwise stated. Adrian Griffin Non‐Executive Chairman Adrian Griffin, an Australian‐trained mining professional, has had exposure to metal mining and processing worldwide during a career spanning more than three decades. A pioneer of the lateritic nickel processing industry, he has helped develop extraction technologies for a range of minerals over the years. Today, Adrian specialises in mine management and production. He is a former Chief Executive Officer of Dwyka Diamonds Limited, an AIM‐ and ASX‐listed diamond producer, was a founding director and executive of Washington Resources Limited and also a founding director of Empire Resources Limited, Ferrum Crescent Limited and Reedy Lagoon Corporation Limited. Moreover, Mr Griffin was a founding director of ASX‐listed Northern Uranium, of which he is currently a non‐executive director. He is also managing director of ASX‐listed Midwinter Resources NL, an African‐focused iron ore project developer. Adrian Griffin is also a member of the Audit Committee, Remuneration Committee (Chairman) and the Nomination Committee (Chairman). Patrick McManus Managing Director Patrick McManus has a degree in mineral processing from Leeds University and an MBA from Curtin University. A mining professional for more than 30 years, his work has taken him to many sites within Australia and overseas, including Eneabba and the Murray Basin in Australia, Madagascar, Indonesia and the United States. During that time, Patrick has worked in operational, technical and corporate roles for Rio Tinto, RGC Limited and Bemas Resources Limited. He was a founding director and, from January 2007 to March 2010, managing director of ASX‐listed Corvette Resources Limited. George Sakalidis Non‐Executive Director George Sakalidis is an exploration geophysicist of more than 20 years standing. His career has encompassed extensive exploration for gold, diamonds, base metals and mineral sands and with others, he compiled one of Australia’s largest aeromagnetic databases, now held by Image Resources NL. Using this database, George contributed to a number of discoveries, including such gold discoveries as the Three Rivers and the Rose deposits in Western Australia. Moreover, he was instrumental in the acquisition of the Image Resources NL exploration tenements, and the design and interpretation of the magnetic surveys that led to the discovery of the large mineral sands resources at the Dongara project of Magnetic Resources NL, of which he was a founding director. Also previously a director of North Star Resources NL, George is currently a director of Meteoric Resources NL, Magnetic Resources NL, Emu Nickel Pty Ltd, Image Resources NL and the unlisted Impreium Minerals Limited. 2 POTASH WEST NL ABN 62 147 346 334 DIRECTORS’ REPORT George Sakalidis is also a member of the Audit Committee (Chairman), Remuneration Committee and the Nomination Committee. Gary Johnson Non‐Executive Director Gary Johnson is a metallurgist with more than 30 years of broad experience in all aspects of the mining industry. In his early career, he gained operational and project expertise with a range of metals in operations in Africa and Australia. Later, he was a member of the team operating the metallurgical pilot plant at the giant Olympic Dam copper, gold and uranium project in South Australia. In 1998, after 10 years as chief metallurgist for a large gold producer, Mr Johnson formed his own specialised hydrometallurgical consulting company. During this period he worked closely with LionOre Mining International to develop the Activox® process for treating sulphide concentrates. When, in 2006, LionOre acquired Gary’s company, he joined LionOre as a senior executive. In 2007, LionOre was taken over by MMC Norilsk Nickel and in 2009 Mr Johnson became managing director of the latter’s Australian operations. Today, Mr Johnson runs his own consulting company, which specialises in high‐level metallurgical and strategic advice. He also holds several patents in the field of hydrometallurgy and is a director of the TSX‐ listed Hard Creek Nickel Corporation and ASX listed Antipa Minerals Ltd. Gary Johnson is also a member of the Audit Committee, Remuneration Committee and the Nomination Committee. Company Secretary Amanda Wilton‐Heald Amanda Wilton‐Heald is a Chartered Accountant with over 13 years of experience in Australia and UK. RESULTS OF OPERATIONS The net loss of the company for the six months to 31 December 2013 is $490,554 (2012: $2,354,572). The net loss was largely due to expenditure on mineral exploration and evaluation. REVIEW OF OPERATIONS The significant phosphate potential contained within the Dandaragan Trough Project in Western Australia was a major area of focus for Potash West NL during the six months ended 31 December 2013. Key highlights in this period include the announcement on 17 September of a Scoping Study targeting single superphosphate (SSP) production on the wholly owned Dandaragan Trough Project, located 150km to the north of the Western Australian capital of Perth. 3 POTASH WEST NL ABN 62 147 346 334 DIRECTORS’ REPORT REVIEW OF OPERATIONS (continued) This latest and very focused Scoping Study was undertaken after the significant phosphate potential of the Dinner Hill prospect within the Dandaragan Trough Potash Project area was recognised during development of the economics of the Company’s patent‐pending K‐Max process, which produces phosphate alongside potash, alum and iron oxide. The Scoping Study demonstrated the robust nature for a potential single superphosphate project, with a particular highlight being the estimated $144 million in capital costs. Major attributes identified in the study included the advantageous location, low mining and start‐up costs, simple processing route, acceptable recoveries and low cost acid supply. The positive outcomes of the study have now provided Potash West with the confidence to move forward towards a Definitive Feasibility Study (DFS) on a stand‐alone phosphate project. Highlights the Scoping Study include:  mining rate 3.8 Mtpa  Mine life, on known JORC resource, of over 20 years  Average revenues per year of $131 million  Average cash costs per year of $98 million  IRR 26.2%  NPV (8% discount rate) $218 million  Capital cost $144 million  Payback period 4 years The Scoping Study work programme also highlighted a number of potential processing breakthroughs that would bring benefits to a proposed project. These include:     Opportunities for metallurgical recovery improvements The potential to easily and significantly increase the scale of the project as operations are established and markets grow in the region thanks to the extensive nature of the phosphatic greensand in the Dandaragan Trough. A major increase in resource, by treating the phosphate‐rich chalk seam. An opportunity to build a combined phosphate plant and K‐max plant to produce potash and alum products from the same feed material. This could be expected to lead to an increase in phosphate production, coupled with lower capital and operating costs compared to two separate plants. On 23 September 2013, the Company highlighted the outstanding growth potential at Potash West’s Dandaragan Trough Project by announcing a revised JORC phosphate Indicated Mineral Resource of 90Mt at 2.65% P2O5 at a 1.85% P2O5 lower cutoff for the Dinner Hill Deposit. Importantly the mineralisation remains open to the north and the east in an area of postulated basin closure thought to present favourable conditions for the development of nodular phosphate within the Creatceous Coolyena Group. 4 POTASH WEST NL ABN 62 147 346 334 DIRECTORS’ REPORT REVIEW OF OPERATIONS (continued) In 12 November 2013 Potash West announced the completion of a placement of 2,000,000 shares, with 1,000,000 free attaching options at a price of $0.10 per share on the basis of one (1) $0.13 unlisted option expiring 25 October 2015 for every two (2) shares placed to raise $200,000 before costs. In addition to this the Company advised on 12 December 2013 it had received a $547,582 refund from the Australian Tax Office. The claim covers eligible test work for the 2013 financial year under the Federal Government’s R&D tax incentive scheme. The test work was instrumental in developing processes for the extraction of potash, phosphate and related products from glauconite, which is widespread throughout the greensands in the Dandaragan Trough. The improved cash position will allow the company to continue its work programmes at its world‐class single superphosphate project, north of Perth in Western Australia. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS No significant changes have occurred in the state of affairs of the company. 5 POTASH WEST NL ABN 62 147 346 334 DIRECTORS’ REPORT Events subsequent to balance date On the 15 January 2014, the directors of the Company have resolved that the Company will make a fully underwritten non‐renounceable, pro rata entitlement offer of shares to eligible shareholders at an issue price of $0.05 each on the basis of one (1) new share for every five (5) shares held on 28 January 2014 to raise approximately $940,210. As at the date of this report, the total funds raised is $857,381. On the 12 February 2014, the Company has announced the results of successful test work into the amenability of recovering phosphate from the Gingin Chalk at this Dinner Hill deposit through ASX Announcement. The testwork has produced positive results, demonstrating the potential to recover phosphate from the chalk by implementing a selective flotation regime. Other than these, there have not been any other matters that have arisen after balance date that have significantly affected, or may significantly affect, the operations and activities of the Company, the results of those operations, or the state of affairs of the Company in future financial years other than disclosed elsewhere in this half‐year report. A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act is set out on page 19. Signed in accordance with a resolution of the Directors ___________________________________ Patrick McManus Director Perth, 12 March 2014 6 POTASH WEST NL ABN 62 147 346 334 STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF‐YEAR ENDED 31 DECEMBER 2013 Half‐year ended 31 December 2013 $ Half‐year ended 31 December 2012 $ Geological services Administration services Interest Government grant TOTAL INCOME 660 17,078 5,566 558,721 582,024 18,480 ‐ 36,454 61,742 116,676 EXPENSES Administration Depreciation Equity based payments Exploration Legal Occupancy Remuneration (excluding share based payments) 325,728 11,038 ‐ 338,394 29,080 11,508 356,831 617,231 11,333 149,905 1,185,960 49,519 25,000 432,301 (490,554) (2,354,572) ‐ ‐ (490,554) (2,354,572) ‐ ‐ (490,554) (2,354,572) (0.59) (3.48) Note INCOME FROM CONTINUING ACTIVITIES 11 LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX INCOME TAX REFUND NET LOSS FOR THE PERIOD OTHER COMPREHENSIVE INCOME TOTAL COMPREHENSIVE LOSS FOR THE PERIOD Basic and diluted loss per share (cents per share) 4 The statement of comprehensive income should be read in conjunction with the accompanying condensed notes. 7 POTASH WEST NL ABN 62 147 346 334 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013 Note CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other assets Total Current Assets NON CURRENT ASSETS Exploration and evaluation Plant and equipment Total Non Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions Total Current Liabilities TOTAL LIABILITIES As at 31 December 2013 $ 2 9 10 NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY 7 8 As at 30 June 2013 $ 627,093 39,395 8,922 675,409 1,157,541 96,141 20,753 1,274,435 2,500,000 75,261 2,575,261 3,250,671 2,500,000 86,299 2,586,299 3,860,734 227,513 44,735 272,248 272,248 548,066 34,286 582,352 582,352 2,978,423 3,278,382 11,903,379 468,049 (9,393,005) 2,978,423 11,725,227 455,606 (8,902,451) 3,278,382 The statement of financial position should be read in conjunction with the accompanying condensed notes. 8 POTASH WEST NL ABN 62 147 346 334 STATEMENT OF CHANGES IN EQUITY FOR THE HALF‐YEAR ENDED 31 DECEMBER 2013 Share and Option Based Payment Reserve $ Issued Capital Accumulated Losses $ $ 9,965,087 (4,708,819) 305,701 5,561,969 ‐ ‐ (2,354,572) ‐ ‐ ‐ (2,354,572) ‐ ‐ (2,354,572) ‐ (2,354,572) ‐ ‐ 149,905 149,905 Balance at 31 December 2012 9,965,087 (7,063,391) 455,606 3,357,302 Balance at 1 July 2013 11,725,227 (8,902,451) 455,606 3,278,382 ‐ (490,554) ‐ ‐ (490,554) ‐ ‐ (490,554) ‐ (490,554) 200,000 (21,848) ‐ ‐ 12,443 ‐ 11,903,379 (9,393,005) 468,049 212,443 (21,848) ‐ 2,978,423 Total $ Balance at 1 July 2012 Opening Balance Loss for the period Other comprehensive income (net of tax) Total comprehensive loss for the period (net of tax) Transactions with owners in their capacity as owners: Share and option based payments Loss for the year Other comprehensive income (net of tax) Total comprehensive loss for the year (net of tax) Transactions with owners in their capacity as owners: Shares issued Share issued transaction costs Share and option based payments Balance as at 31 December 2013 The statement of changes in equity should be read in conjunction with the accompanying condensed notes. 9 POTASH WEST NL ABN 62 147 346 334 STATEMENT OF CASH FLOWS FOR THE HALF‐YEAR ENDED 31 DECEMBER 2013 Half‐year ended 31 December 2013 $ Half‐year ended 31 December 2012 $ (1,272,886) 11,139 547,582 5,565 (708,600) (2,274,869) ‐ 61,742 36,454 (2,176,673) ‐ ‐ (5,775) (5,775) FINANCING ACTIVITIES Proceeds from issue of shares Share issue costs NET CASH FLOWS FROM FINANCING ACTIVITIES 200,000 (21,848) 178,152 ‐ ‐ ‐ NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the period CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD/YEAR (530,448) 1,157,541 627,093 (2,182,448) 3,250,259 1,067,811 Note OPERATING ACTIVITIES Payments to suppliers and employees Government grant received R&D tax refund Interest received NET CASH FLOWS USED IN OPERATING ACTIVITIES INVESTING ACTIVITIES Purchase of plant and equipment NET CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES 2 The statement of cash flows should be read in conjunction with the accompanying condensed notes. 10 POTASH WEST NL ABN 62 147 346 334 CONDENSED NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF‐YEAR ENDED 31 DECEMBER 2013 Note 1: Basis of preparation of the half‐yearly financial report This interim condensed financial report for the half‐year ended 31 December 2013 was authorised for issue in accordance with a resolution of the directors on 11 March 2014. The financial report has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001. It is recommended that the half‐year financial statements be read in conjunction with the annual financial report for the year ended 30 June 2013 and considered with any public announcements made by Potash West NL during the half‐year ended 31 December 2013 in accordance with continuous disclosure obligations of the ASX Listing Rules. The half‐year financial statements do not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full and understanding of the financial performance, financial position and financing and investing activities of the Company as the full financial report. The half‐year financial statements have been prepared on the basis of accrual accounting and historical costs and the same accounting policies and methods of computation were followed as in the most recent annual financial statements Going concern basis This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business. The Company has incurred a net loss for the period ended 31 December 2013 of $ 490,554 (31 December 2012: $2,354,572) and experienced net cash outflows from operating activities of $ 708,600 (31 December 2012: $2,176,673). Additional funding is necessary to meet its committed expenditure requirements in the next 12 months. The Directors have reviewed the Company’s financial position and are of the opinion that the use of the going concern basis of accounting is appropriate as they believe the Company will be successful in securing additional funds through the right issue. Should the Company not achieve the matters set out above, there is significant uncertainty whether the Company will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The financial report does not contain any adjustments relating to the recoverability and classification of recorded assets or to the amounts or classification of recorded assets or liabilities that might be necessary should the Company not be able to continue as a going concern. 11 POTASH WEST NL ABN 62 147 346 334 CONDENSED NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF‐YEAR ENDED 31 DECEMBER 2013 Changes in accounting policies The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to their operations and effective for the current half year. The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Company’s accounting policies and has no effect on the amounts reported for the current or prior half‐years. The Company has not elected to early adopt any new accounting standards and interpretations. Revenue Recognition Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent that it is proable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recongised: Interest income Income is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset. Fee Income Revenue from geological services provided is recognised as the services are rendered, the revenue and the costs incurred or to be incurred in respect of the transations can be measured reliably and the ecnonomic benefits associated with the transaction will flow to the Company. Note 2: Cash and cash equivalents Cash at bank and on hand 31‐Dec‐13 $ 627,093 30‐Jun‐13 $ 1,157,541 627,093 1,157,541 Reconciliation of cash and cash equivalents Cash at the end of financial period is shown in the Statement of Cash Flows is reconciled to items in the Statement of Financial Position as follows: Cash and cash equivalents 627,093 12 1,157,541 POTASH WEST NL ABN 62 147 346 334 CONDENSED NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF‐YEAR ENDED 31 DECEMBER 2013 Note 3: Segment reporting For management purposes, the Company is organised into one main operating segment, which involves the evaluation of the Dandaragan Trough Glauconite deposit of its potassium content and the production of potash from the deposit. All of the Company’s activities are interrelated, and discrete financial information is reported to the Board (Chief Operating Decision Makers) as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment. The financial results from this segment are equivalent to the financial statements of the Company as a whole. Note 4: Earnings per share 2013 $ Basic loss per share (cents per share) Diluted loss per share (cents per share) Net loss Loss used in calculating basic and diluted loss per share Weighted average number of ordinary shares used in the calculation of basic and diluted (loss)/earnings per share 2012 $ 0.59 0.59 490,554 3.48 3.48 2,354,572 490,554 Number 2,354,572 Number 83,666,617 67,645,833 During the period there were no listed or key management personnel options exercised. These options are not considered dilutive for the purpose of the calculation of diluted earnings/loss per share as their conversion to ordinary shares would not decrease the net profit from continuing operations per share. Consequently, diluted earnings/loss per share is the same as basic earnings per share. There have been no transactions involving ordinary shares or potential shares that would significantly change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of these financial statements Note 5: Contingent liabilities and contingent assets The Company does not have any contingent assets or liabilities outstanding at 31 December 2013 (2012: Nil). Note 6: Dividends No dividend has been paid or declared during the half‐year and the directors do not recommend the payment of a dividend in respect of the financial period. 13 POTASH WEST NL ABN 62 147 346 334 CONDENSED NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF‐YEAR ENDED 31 DECEMBER 2013 Note 7: Issued capital Ordinary Shares Number $ At 1 July 2012 83,795,833 10,200,112 Issue of 8,223,344 shares to existing shareholders via renounceable entitlement issue Issue of 1,887 shares via exercising options Equity Raising Costs 8,223,344 1,887 1,809,672 ‐ (49,531) At 30 June 2013 92,021,064 11,960,253 Issue of 2,000,000 shares via share placement Equity Raising Costs * 2,000,000 200,000 (21,849) As at 31 December 2013 94,021,064 12,138,404 At 30 June 2013 (1,150,000) (235,025) At 31 December 2013 (1,150,000) (235,025) Reserved Shares * Attaching to the placement of 2,000,000 shares is the 1,000,000 $0.13 unlisted options expiring 25 October 2015 on the basis of 1 option for every 2 shares placed. Note 8: Reserves Share based payment reserve Number $ At 1 July 2012 3,100,000 305,701 Issue of 1,250,000 options for option based payment 1,350,000 149,905 At 30 June 2013 4,450,000 455,606 ‐ 12,443 4,450,000 468,049 Shares to be issued under the Director and Senior Management Fee and Remuneration Sacrifice Share Plan* As at 31 December 2013 *Shares have not yet been issued, with the number of shares to be determined at issue date, dependent on the market share price. 14 POTASH WEST NL ABN 62 147 346 334 CONDENSED NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF‐YEAR ENDED 31 DECEMBER 2013 Note 9: Plant and equipment Office Equipment $ Plant and Equipment $ Computer Software $ Total $ At 30 June 2013 Cost Accumulated depreciation Closing net carrying value 16,079 (6,289) 9,789 72,835 (25,254) 47,581 42,452 (13,523) 28,928 131,365 (45,066) 86,299 9,789 ‐ (1,922) 7,867 47,581 ‐ (4,778) 42,804 28,928 ‐ (4,338) 24,591 86,299 ‐ (11,038) 75,261 At 1 July 2013 Opening net carrying value Additions Depreciation charge for the period At 31 December 2013 Note 10: Trade and other payables 31‐Dec‐13 $ Current Unsecured liabilities Trade and other payables 227,513 227,513 30‐Jun‐13 $ 548,066 548,066 Due to short term nature of these payables, their carrying value is assumed to approximate their fair value. Note 11: Equity based payments Expenses arising from option‐based payment transactions Total expenses arising from option‐based payment transaction recognised during the half‐year is as follows: 31‐Dec‐2013 31‐Dec‐2012 $ $ Options issued to directors as approved by shareholders at 2012 AGM. ‐ 149,905 ‐ 149,905 15 POTASH WEST NL ABN 62 147 346 334 CONDENSED NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF‐YEAR ENDED 31 DECEMBER 2013 Note 11: Equity based payments (continued) Expenses arising from share‐based payment transactions During the 2013 half year, a share based payment relating to director and senior management fee and remuneration sacrifice share plan has been recorded in the accounts as follows: Management fee and remuneration sacrifice share plan 31‐Dec‐2013 $ 31‐Dec‐2012 $ 12,443 12,443 ‐ ‐ Under the Management fee and remuneration sacrifice share plan, the eligible directors and senior management of the Company may elect to sacrifice part of their directors’ fees or consulting fees to acquire Shares in the Company. Under the Plan, the relevant directors and senior management will receive the remainder of their directors’ fees or consulting fees in cash. As such, the Shares will be issued for nil cash consideration and will be valued at market fair value. The Plan has been approved by the shareholders during 2013 AGM, but the associated shares have not yet been issued to the directors who has elected to sacrifice part of their directors fees to acquire shares in the Company. During the 2012 half year, 1,350,000 options were issued to directors under the Employee Option Plan (EOP). The fair value of options granted under the EOP is estimated at the date of grant using a Black‐ Scholes option pricing methodology, taking into account the terms and services were valued at the market price at the date of issue as the value of the services received could not be reliably measured. Options issued during the period vested at grant date. Dividend yield (%) Nil Expected volatility*(%) 75 Risk‐free interest rate (%) 3 Expected life (years) 3 Share price ($) See below tables: Option‐based payment plans Outstanding at 1 July Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at 31 December Exercisable at 31 December 2013 Number 2,600,000 ‐ ‐ ‐ ‐ 2,600,000 ‐ 2013 WAEP $0.3189 ‐ ‐ ‐ ‐ $0.3189 ‐ 2012 Number 1,250,000 1,350,000 ‐ ‐ ‐ 2,600,000 ‐ * Volatility was determined using considered judgement as to the volatility of the share price over the vesting period. 16 2012 WAEP $0.28 $0.355 ‐ ‐ ‐ $0.3189 ‐ POTASH WEST NL ABN 62 147 346 334 CONDENSED NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF‐YEAR ENDED 31 DECEMBER 2013 Note 12: Related party transactions Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. During the period, the following transactions were undertaken between the Company, executive officers and director‐related entities. 31‐Dec‐13 Consulting fees were paid to Strategic Metallurgy Pty Ltd, a company of which Gary Johnson is a director and shareholder 205,704 31‐Dec‐12 364,600 In 2012 financial year, 1,150,000 shares were issued under the Employee Share Plan (ESP) accounted for as in‐substance options. The Company has provided each employee with a non‐recourse loan up to the amount payable in respect of the shares. The employee must repay the Loan in full prior to expiry of the Loan Term but may elect to repay the Loan Amount in respect of any or all of the Plan Shares at any time prior to expiry of the Loan Term. Note 13: Commitments The Company has certain obligations with respect to tenements and minimum expenditure requirements on areas, as follow: 2013 836,000 836,000 1,672,000 Within 1 year 1 to 2 years 2012 1,058,000 1,058,000 2,116,000 The commitments may vary depending upon additions or relinquishments of the tenements, as well as farm‐out agreements. The above figures are based on the mines department Emits reports as at 31 December 2013. The figures are adjusted at the anniversary date of each tenement and therefore that total can change on a monthly basis. Note 14: Events subsequent to balance date On the 15 January 2014, the directors of the Company resolved that the Company will make a fully underwritten non‐renounceable, pro rata entitlement offer of shares to eligible shareholders at an issue price of $0.05 each on the basis of one (1) new share for every five (5) shares held on 28 January 2014 to raise approximately $940,210. As at the date of this report, the total funds raised is $857,381. On the 12 February 2014, the Company announced the results of successful test work into the amenability of recovering phosphate from the Gingin Chalk at this Dinner Hill deposit through ASX Announcement. The testwork produced positive results, demonstrating the potential to recover phosphate from the chalk by implementing a selective flotation regime. Other than these, there have not been any other matters that have arisen after balance date that have sign