Full Year Statutory Accounts
OPERATING AND FINANCIAL REVIEW
The Company was incorporated on 15 August, 2005 for the primary purpose of acquiring prospective mineral exploration licences in the Northern Territory. TUC Resources has successfully acquired a diverse portfolio of tenements which it believes are prospective for rare earth, uranium, gold and base metals.
Operating Results for the Year
The net loss for the year ended 30 June, 2012 was $1,677,976 (2011: loss $1,419,179). The major items of expenditure were employee expenses totalling $1,079,787 (2011: $858,207) and travel and accommodation expenses of $116,583 (2011: $45,283). A further $1,998,326 (2011: $3,003,859) was capitalised as exploration and evaluation expenditure in accordance with the relevant accounting standards.
During the year 1,000,000 shares were issued on exercise of options.
Cash and assets utilised by the Consolidated Entity for the year ended 30 June, 2012 are consistent with the Consolidated Entity's business objectives since listing on the ASX on 26 April, 2007. Cash in bank at the end of the year was $2,485,313.
A detailed review of the Company's activities is contained in the Review of Operations section of this Annual Report. The following is a summary of exploration strategy, projects and activities during the year.
TUC Resources currently holds approximately 18,000km2 of prospective land package across 44 tenements (33 under application). The business holds consolidated project areas across several key geological terrains (Figure 1, see link below).
Pine Creek and Daly Regions - Rare Earth Exploration
Since October 2010 the company has continued to build on the heavy rare earth regional potential with a focus on its Stromberg prospect and the more recent discovery of the Scaramanga prospect with excellent results.
In July and August 2011, the Company continued with RC and diamond drilling activities at its Quantum Light rare earth prospect. Despite positive results, the Company then switched focus to its Heavy Rare Earth Stromberg prospect.
In August, 2011 the Company announced a new Dysprosium-rich heavy rare earth discovery at its Stromberg prospect (see TUC ASX Announcement dated 25 August, 2011). The prospect is rich in the critical rare earths Dysprosium (averaging 7.2% of Total Rare Earth Oxides (TREO) and Yttrium (averaging 68% of TREO).
This discovery prompted the Company to undertake a 54 hole drill program in the September 2011 quarter to extend the strike length to 2.3km. The results were exciting as they confirmed the high Heavy Rare Earth Element (HREE) distributions with multiple near surface intersections averaging 82% HREE/TREO.
Additional mineralogical test work confirmed the presence of the important rare earth mineral Xenotime. Xenotime mineralogy theoretically offers simple processing/development routes (see TUC ASX Announcement dated 12 November 2011).
Mineralisation at the Stromberg Prospect is situated at, or very near surface, in flat lying tabular bodies. This gives the prospect two advantages: firstly, providing for a quicker drilling time towards resource, and secondly, with continued successful drilling, improving the likelihood of a lower cost mining scenario.
In addition, very low quantities of deleterious elements, including 3.5ppm Thorium and 195ppm Uranium are reported in the mineralised material. Mineralised material averages TREO of 0.45% from all significant intersections (>0.2% TREO).
Further RC drilling in August 2012 (16 holes) confirmed both the presence of significant near surface HREE mineralisation, and extended TUC's exploration models. Importantly, mineralisation is now clearly defined over the prospect strike length.
As part of the Company's strategy to prove the district potential for HREEs, TUC completed a reconnaissance geochemical program in September 2011 quarter. A total of four soil lines were run with 40 sample locations. The positive Yttrium results from this XRF based soil survey work along with further geological mapping increased the confidence of the district's potential and assisted with confirming drill targets.
First pass, broad spaced drilling in August 2012 successfully defined mineralisation in the same geological setting to Stromberg. Six out of the seven holes drilled intersected anomalous HREE mineralisation at shallow levels. Drilling was broadly spaced and infill drilling is planned to target higher grade mineralisation.
Cornerstone Investor Strategy
Discussions were held, and continue to be held with a number of rare earth value chain parties with respect to cornerstone equity investment in TUC. TUC considers early alignment with a major industry player as a valuable advantage, due to the downstream processing and marketing requirements associated with these metals.
The Company has continued to undertake partial relinquishment of some tenements within its portfolio, in line with current NT mining legislation. TUC believes that turnover of ground represents efficient assessment of potential and an increase in the quality of tenure remaining.
The applications for five new tenements during the year bolstered TUC's land position around the Stromberg HREE district and at the Hodgsons Downs HREE target area.
Land Access Progress
TUC continues to build stakeholder relationships by undertaking Annual Information visits to the Stromberg HREE Prospect for Native Title Claimants. These meetings are held to update Traditional Aboriginal Land Owners of the status of the project and give them a review of operations.
These and further on-country consultations are an integral part of building relationships with all stakeholders. As a result of these consultations, TUC recently announced that Traditional Aboriginal Land Owners have given verbal consent to begin exploration on the highly HREE prospective ELA27151 Skyfall tenement adjacent to Stromberg and Scaramanga HREE prospects (see TUC ASX Announcement dated 25 September, 2012).
Through the constant and quality application of the exploration process and corporate arrangements, TUC Resources continues to be ideally placed to gain leverage from its work to date and its large prospective land position. The Consolidated Entity continues its efforts towards the ultimate goal of finding and developing an operating mine.
View the complete TUC Resources Annual Report at the following link below:
About Spectrum Metals Ltd
Spectrum Metals Limited (ASX:SPX) is a domestic West Australian focused gold exploration and development company, concentrating on high-grade, brown fields assets, that can leverage off existing infrastructure and add value through exploration and development. Spectrum has recently discovered Penny North, one of the highest grade gold discoveries in Australia in recent times. The discovery has grown rapidly and Spectrum has yet to explore approximately 4.5km of prospective strike to find similar high grade lodes.
Spectrum Metals Ltd