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The following is an excerpt from a 6-K SEC Filing, filed by WMC RESOURCES LTD on 8/19/2004.
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WMC RESOURCES LTD - 6-K - 20040819 - FORM
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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 6-K

 


 

REPORT ON FOREIGN ISSUER

 

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Period: May 7, 2004 - August 13, 2004

 


 

WMC RESOURCES LTD

ACN 004 184 598

 


 

Level 16, IBM Centre

60 City Road

Southbank, Victoria 3006

Australia

 


 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F     x   

Form 40-F     ¨

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes     ¨   

No     x

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

 



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This report on Form 6-K includes press releases made during the period May 7, 2004 – Aug 13, 2004

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorised.

 

WMC RESOURCES LTD

By:

 

/s/ R.E. Mallett


Name:

  R.E. Mallett

Title:

  Assistant Company Secretary

Date:

  19 Aug 2004


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To: The Manager

       Announcements

       ASX Company Announcements Office

 

Public Announcement 2004-18

 

Please find attached media release from the South Australian Premier’s office relating to WMC Resources decision to invest a further $50 million over two years in a major study to determine whether there should be a multi-billion expansion of the Olympic Dam mine in South Australia’s mid-north.

 

A copy of this public announcement will be published on WMC’s web site at www.wmc.com later this morning.

 

Ross Mallett

Assistant Company Secretary

 

26 May 2004

 

For further information please contact:

 

Media contact:

Troy Hey

Group Manager - Public Affairs

Mbl: 0419 502 852

 

Investor/Analyst contact:

Adrian Fernando

Manager - Investor Relations

Mbl: 0438 068 049

 

        WMC Resources Ltd
       

ACN 004 184 598

       

GPO Box 860K

       

Melbourne Vic. 3001

       

Australia

       

Level 16 IBM Centre

       

60 City Road

       

Southbank Vic. 3006

       

Australia

       

Tel +61 (0)3 9685 6000

       

Fax +61 (0)3 9685 6115


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News Release  

Premier Mike Rann

Minister for Economic Development

Minister for Social Inclusion

Minister for the Arts

Minister for Volunteers

 

Wednesday 26 May 2004

 

$50 MILLION STUDY TO GAUGE FUTURE OF OLYMPIC DAM

 

WMC Resources Ltd today announced it will invest a further $50 million over two years in a major study to determine whether there should be a multi-billion expansion of the Olympic Dam mine in South Australia’s mid-north.

 

Premier Mike Rann says the SA Government is giving its full support to the study which will help WMC determine whether it should double the capacity of the mine at a cost of between $2 billion and $4 billion by the end of the decade.

 

“The potential for the Olympic Dam mine is huge.

 

“An expansion of this size could lead to the creation of hundreds of jobs and further growth in the population of the Roxby Downs township, which is already 4,000.

 

“This would also help the State achieve many of the targets laid out in the State Strategic Plan including increasing minerals production to $3 billion and increasing minerals processing by a further $1 billion by 2020 as well as increasing SA’s population to 2 million by 2050.

 

“It should also help us in our target of trebling the value of SA’s export income to $25 billion by 2013.

 

“At present, the Olympic Dam is the world’s eighth largest copper deposit and largest known uranium deposit. Last year, it generated $670 million in export income for Australia.

 

“This has the potential to double if the expansion goes ahead,” Mr Rann said.

 

WMC has already invested $4 billion in developing Olympic Dam, including $600 million in the past three years and another $80 million during this year in mine development.

 

Major activities for the next phase of the Study include:

 

  an additional 72 km of drilling to improve understanding of the undeveloped southern deposit


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  the assessment of mining and processing methods for the southern deposit and development of a ‘whole-of- deposit’ mine plan;

 

  environmental studies, including the scoping of a new Environmental Impact Statement;

 

  a detailed investigation of options for future water and energy supply to the operation

 

  preparation of a logistics plan for the operation, including the possibility of linking Olympic Dam to the rail network; and

 

  identification of future land requirements, support for the Roxby Downs township and associated infrastructure

 

WMC Resources CEO, Andrew Michelmore says Olympic Dam is already Australia’s largest underground mine and mineral processing operation.

 

“Olympic Dam currently has an annual production capacity of 235 000 tonnes of copper, 4 500 tonnes of uranium and 100 000 ounces of gold.

 

“Studies so far have shown that by extending underground mining, Olympic Dam could produce up to 350 000 tonnes of copper per year.

 

“Open pit mining, when added to continuing underground operations, could increase copper production to in excess of 500 000 tonnes per annum.

 

“By 2006, WMC will be in a position to identify a single preferred life of mine development plan for the total resource. That option would become the subject of a final feasibility study,” Mr Michelmore said

 

The development study work will be in addition to ongoing assessment of Olympic Dam’s future energy needs, including the option of connecting Olympic Dam to a natural gas network.

 

In its Study, WMC will work closely with the SA Economic Development Board and the State Government Task Force for further development of Olympic Dam, appointed by the Premier in 2002.

 

For further information contact Jill Bottrall on 8463 3362 or 0419 99 01 60.


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To: The Manager

       Announcements

       ASX Company Announcements Office

 

Public Announcement 2004-20

 

In accordance with Listing Rule 2.7 please find enclosed Appendix 3B, application for quotation of additional securities.

 

Ross Mallett

Assistant Company Secretary

 

7 July 2004

 

        WMC Resources Ltd
       

ABN 76 004 184 598

       

GPO Box 860K

       

Melbourne Vic. 3001

       

Australia

       

Level 16 IBM Centre

       

60 City Road

       

Southbank Vic. 3006

       

Australia

       

Tel +61 (0)3 9685 6000

       

Fax +61 (0)3 9686 3569


Table of Contents

Appendix 3B

New issue announcement


Rule 2.7, 3.10.3, 3.10.4, 3.10.5

 

Appendix 3B

 

New issue announcement,

application for quotation of additional securities

and agreement

 

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

 

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003.

 

Name of entity

WMC Resources Ltd

 

ABN

74 004 184 598

 

We (the entity) give ASX the following information.

 

Part 1 - All issues

 

You must complete the relevant sections (attach sheets if there is not enough space).

 

1    + Class of + securities issued or to be issued    Fully paid ordinary shares.
2    Number of + securities issued or to be issued (if known) or maximum number which may be issued    346,500
3    Principal terms of the + securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)   

The securities in (2) above comprise of 346,500 shares arising from options which were exercised during the period.

 

Option exercise prices and expiry dates are detailed in Attachment “A”.


+ See chapter 19 for defined terms.

 

1/1/2003

Appendix 3B Page 1


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Appendix 3B

New issue announcement


 

4   

Do the +securities rank equally in all respects from the date of allotment with an existing + class of quoted + securities?

 

If the additional securities do not rank equally, please state:

 

•      the date from which they do

 

•      the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

 

•      the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

   Securities rank equally from date of allotment.
5    Issue price or consideration    Refer to Attachment “A”.
6    Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)    Refer to Item 3 above.
7    Dates of entering + securities into uncertificated holdings or despatch of certificates    Following allotment of shares
         

Number


    

+ Class


8    Number and + class of all + securities quoted on ASX ( including the securities in clause 2 if applicable)    1,157,655,181      Fully paid ordinary shares.

+ See chapter 19 for defined terms.

 

Appendix 3B Page 2

   1/1/2003


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Appendix 3B

New issue announcement


 

         

Number


  

+ Class


9    Number and + class of all + securities not quoted on ASX ( including the securities in clause 2 if applicable)    Refer to Attachment “A”.     
10    Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)    N/A.     
Part 2 - Bonus issue or pro rata issue
11    Is security holder approval required?    _________________________________________________________________________________
12    Is the issue renounceable or non-renounceable?    _________________________________________________________________________________
13    Ratio in which the + securities will be offered    _________________________________________________________________________________
14    + Class of + securities to which the offer relates    _________________________________________________________________________________
15    + Record date to determine entitlements    _________________________________________________________________________________
16    Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?    _________________________________________________________________________________
17    Policy for deciding entitlements in relation to fractions    _________________________________________________________________________________
18   

Names of countries in which the entity has + security holders who will not be sent new issue documents

 

Note: Security holders must be told how their entitlements are to be dealt with.

 

Cross reference: rule 7.7.

  

_________________________________________________________________________________

19    Closing date for receipt of acceptances or renunciations    _________________________________________________________________________________

+ See chapter 19 for defined terms.

 

1/1/2003

  Appendix 3B Page 3


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Appendix 3B

New issue announcement


 

20    Names of any underwriters    _________________________________________________________________________________
21    Amount of any underwriting fee or commission    _________________________________________________________________________________
22    Names of any brokers to the issue    _________________________________________________________________________________
23    Fee or commission payable to the broker to the issue    _________________________________________________________________________________
24    Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of +security holders    _________________________________________________________________________________
25    If the issue is contingent on +security holders’ approval, the date of the meeting    _________________________________________________________________________________
26    Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled    _________________________________________________________________________________
27    If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders    _________________________________________________________________________________
28    Date rights trading will begin (if applicable)    _________________________________________________________________________________
29    Date rights trading will end (if applicable)    _________________________________________________________________________________
30    How do + security holders sell their entitlements in full through a broker?    _________________________________________________________________________________
31    How do + security holders sell part of their entitlements through a broker and accept for the balance?    _________________________________________________________________________________

+ See chapter 19 for defined terms.

 

Appendix 3B Page 4

  1/1/2003


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Appendix 3B

New issue announcement


 

32

   How do  + security holders dispose of their entitlements (except by sale through a broker)?  

______________________________________________________________________________________________

33

   + Despatch date   ______________________________________________________________________________________________

 

Part 3 - Quotation of securities

 

You need only complete this section if you are applying for quotation of securities

 

34

  Type of securities
(tick one)

(a)

  x   Securities described in Part 1

(b)

  ¨  

All other securities

 

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

 

Entities that have ticked box 34(a)

 

Additional securities forming a new class of securities

 

Tick to indicate you are providing the information or documents

 

35

 

¨

  If the + securities are + equity securities, the names of the 20 largest holders of the additional + securities, and the number and percentage of additional + securities held by those holders

36

 

¨

 

If the + securities are + equity securities, a distribution schedule of the additional + securities setting out the number of holders in the categories

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 and over

37

 

¨

  A copy of any trust deed for the additional + securities

 

 


+ See chapter 19 for defined terms.

 

1/1/2003

   Appendix 3B Page 5


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Appendix 3B

New issue announcement


 

Entities that have ticked box 34(b)

 

38

  Number of securities for which + quotation is sought    ____________________________________________________________________________________

39

  Class of + securities for which quotation is sought    ____________________________________________________________________________________

40

 

Do the + securities rank equally in all respects from the date of allotment with an existing + class of quoted + securities?

 

If the additional securities do not rank equally, please state:

 

•      the date from which they do

 

•      the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

 

•      the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

   ____________________________________________________________________________________

41

 

Reason for request for quotation now

 

Example: In the case of restricted securities, end of restriction period

 

(if issued upon conversion of another security, clearly identify that other security)

   ____________________________________________________________________________________
        

Number


  

+ Class


42

  Number and + class of all + securities quoted on ASX ( including the securities in clause 38)          

 


+ See chapter 19 for defined terms.

 

Appendix 3B Page 6

   1/1/2003


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Appendix 3B

New issue announcement


 

Quotation agreement

 

1 + Quotation of our additional + securities is in ASX’s absolute discretion. ASX may quote the + securities on any conditions it decides.

 

2 We warrant the following to ASX.

 

  The issue of the + securities to be quoted complies with the law and is not for an illegal purpose.

 

  There is no reason why those + securities should not be granted + quotation.

 

  An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

 

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

 

  Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any + securities to be quoted and that no-one has any right to return any + securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the + securities be quoted.

 

  We warrant that if confirmation is required under section 1017F of the Corporations Act in relation to the + securities to be quoted, it has been provided at the time that we request that the + securities be quoted.

 

  If we are a trust, we warrant that no person has the right to return the + securities to be quoted under section 1019B of the Corporations Act at the time that we request that the + securities be quoted.

+ See chapter 19 for defined terms.

 

1/1/2003

  Appendix 3B Page 7


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Appendix 3B

New issue announcement


 

3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

 

4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before + quotation of the + securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

 

Sign here:    Ross E. Mallett    Date: 7 July 2004
     (Assistant Company Secretary)     
Print name:    Ross E. Mallett     

 

== == == == ==


+ See chapter 19 for defined terms.

 

Appendix 3B Page 8

  1/1/2003


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30 June 2004

 

Attachment “A”

 

Details of Securities Issued

 

     Shares

   Issue Price

   Issue Date

   Expiry Date

  

Description


   Share Capital

     36,700    $ 3.90    20.12.1999    20.12.04    Employee Options Exercised      143,130
     41,000    $ 3.48    18.12.2000    18.12.05           142,680
     76,300    $ 4.33    30.11.2001    30.11.06           330,379
     192,500    $ 4.34    23.12.2002    23.12.07           835,450
    
                        

Total Shares Issued

   346,500                            1,451,639
    
                        

(Exercise of Employee Options)

                                 

Shares to be Quoted

   346,500                     Total Share Capital to be Quoted    $ 1,451,639
    
                        

 

Details of Securities Not Quoted on the ASX

 

Unquoted Securities

as at 31/03/04


  

Description


   Options
exercised


   Options
lapsed


   Options
issued


   Unquoted Securities
As at 30/06/04


1,258,475    (a) employee options expiring 20/12/2004 exerciseable at $3.90    36,700    0         1,221,775
1,571,200    (b) employee options expiring 18/12/2005 exerciseable at $3.48    41,000    0         1,530,200
3,911,700    (c) employee options expiring 30/11/2006 exerciseable at $4.33    76,300    0         3,835,400
7,119,962    (d) employee options expiring 23/12/2007 exercised at $4.34    192,500    0         6,927,462

       
  
  
  
13,861,337    TOTAL OPTIONS    346,500    0    —      13,514,837

       
  
  
  

 

Quoted Securities as at 31.03.04

   1,157,308,681

plus Securities subject to this application for quotation

   346,500
    

TOTAL SECURITIES TO BE QUOTED ON ASX

   1,157,655,181
    

 

Value


   Fee

1,451,639 Issued Capital

      

In excess of: 500,000

   $ 2,350.00

Excess 951,639 @ 0.12250006%

   $ 1,165.76
    

Total Fee

   $ 3,515.76
    


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To: The Manager

       Announcements

       ASX Company Announcements Office

 

Public Announcement 2004-21

 

Release of Quarterly Review

 

Please find attached for immediate release, Public Announcement 2004-21 covering WMC Resources Ltd’s June 2004 Quarterly Review.

 

A copy of this public announcement will be published on WMC’s web site at www.wmc.com later this morning.

 

WMC’s Chief Executive Officer, Mr Andrew Michelmore, will host an audio conference at 11.00am this morning which will be broadcast live from WMC’s web site. A recording of this conference will be available for playback on WMC’s web site this afternoon.

 

Ross Mallett

Assistant Company Secretary

 

15 July 2004

 

        WMC Resources Ltd
       

ACN 004 184 598

       

GPO Box 860K

       

Melbourne Vic. 3001

       

Australia

       

Level 16 IBM Centre

       

60 City Road

       

Southbank Vic. 3006

       

Australia

       

Tel +61 (0)3 9685 6000

       

Fax +61 (0)3 9685 6115


Table of Contents

HEALTH, SAFETY & ENVIRONMENT

 

LOGO

 

Safety and Environment

 

The lost time plus medically treated injury frequency rate (IFR) for the year to 30 June 2004 is slightly above rates achieved in 2003. While our total injury rate has not improved, the overall severity of injuries is significantly lower than experienced in previous years. Reflecting this, the lost time injury rate stands at 1.8 at the end of June compared with the full year 2003 result of 3.2.

 

During the quarter we commenced remediation works at the Yeelirrie uranium project site in Western Australia. The rehabilitation plan has been developed with the approval of the State Mining Engineer and Radiological Council of WA and is expected to be completed by year end.

 

Health, safety and environment performance data are also available at www.wmc.com/sustainability.

 

Note: Unless otherwise stated, comparisons contained in this production report are quarter on previous quarter. Statements, particularly those regarding the possible or assumed future performance, production levels, prices, reserves, divestments, growth or other trend projections are or may be forward looking statements. Actual results, actions and developments may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors including known and unknown risks and uncertainties.

 

WMC RESOURCES SHARE PRICE

 

LOGO

 

OVERVIEW

 

30 - June

 

Dear Shareholder,

 

Improved reliability and consistency at Olympic Dam and completion of major maintenance at our nickel operations position us well for a strong second half.

 

Record smelter throughput at Olympic Dam contributed to higher copper production for the quarter and cathode production is expected to increase further in the second half of the year. Mine production was down slightly on the previous quarter. A work program to address this is being implemented.

 

Nickel production was on plan for the quarter and we are on track to meet our full year targets.

 

Acid availability constrained fertilizer production during the quarter and full year production is now expected to be 900,000 tonnes.

 

A revised management structure, with an expanded focus on growth and business development opportunities, was introduced during the quarter. The next stage of the Olympic Dam Development study pre-feasibility work has begun and drilling commenced at the Yakabindie nickel project.

 

Our focus remains on safe, consistent and reliable performance. I am especially pleased with our nickel operations delivering to plan and the significant improvements in reliability at Olympic Dam in a continued period of strong commodity prices.

 

LOGO

 

A G MICHELMORE

Chief Executive Officer

15 July 2004

 


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QUARTERLY REVIEW

QUARTER ENDED 30 JUNE 2004

 

WMC RESOURCES LTD

(ABN 78 004 184 596)

 

PRODUCTION OVERVIEW

 

Copper & Uranium

 

A continued focus on reliability at Olympic Dam contributed to record smelter throughput for the quarter and higher cathode production. The higher utilisation rates achieved at the smelter are expected to contribute to higher cathode production in the second half of the year, with full year production expected to be in the 220-230kt range.

 

Mine production was down slightly on the previous quarter. A work program for the second half of 2004 has been designed to ramp-up mining rates. This will address the availability of production stopes, development rates, ventilation and backfill requirements. Surface stocks will continue to be processed to support production.

 

The newly commissioned copper solvent extraction plant ramped up to full capacity during the quarter and will contribute to improved second half production.

 

The uranium solvent extraction plant is performing consistently well with uranium recoveries for the half exceeding design capacity.

 

Nickel

 

Nickel production was on plan for the quarter and we are on track to meet our full year targets.

 

During the quarter we took the opportunity to advance some components of smelter maintenance previously planned for 2005. This provides us with the flexibility to maximise output in 2005 without affecting 2004 production.

 

The key maintenance task was replacement of the reaction shaft roof of the smelter furnace. An innovative prefabrication approach enabled the work to be completed in 13 days compared to the 28 days originally scheduled for 2005. The smelter was re-commissioned in late June, with production returning to normal in early July. Concentrate and ore stocks were built-up during the outage and the smelter is well positioned for a strong second half of the year.

 

Concentrate production at both Mount Keith and Leinster was lower than the prior quarter, in line with expectations. At Mount Keith, the first ore from Stage F was processed, and production was supplemented by the processing of lower grade stockpiled ores.

 

Continued strong metallurgical recoveries at Leinster partially offset a reduction in ore grades. Utilisation of smaller equipment has enabled the mining of remnant ore from the Harmony open pit. Mining of this ore is expected to continue during the September quarter, with processing continuing through to year end.

 

Overburden removal has commenced at the new 11 Mile Well satellite open pit near Leinster. The mine is expected to yield a total of 6,000 tonnes of nickel-in-concentrate in 2005.

 

The Perseverance 6–11 Level development project is continuing to plan with decline access to the 11 Level achieved during the quarter.

 

Concentrate production at Kambalda was 19 per cent higher, reflecting increased ore deliveries from nickel mines in the area. Output is expected to increase further in coming quarters.

 

Production of nickel metal at the Kwinana refinery has returned to full rates following completion of the three-yearly major maintenance shutdown. Debottlenecking work was also undertaken during the outage to enable the refinery to increase capacity to 70,000 tonnes per annum rates by year end.

 

Fertilizers

 

Fertilizer production was constrained by reduced sulphuric acid supplies following welding repairs on the converter at the Mount Isa acid plant. Consequently, fertilizer production for the full year is now expected to be about 900,000 tonnes.

 

We are addressing the cause of the premature failure of the welds on the converter with the equipment supplier. Acid production has since returned to full capacity.

 

MANAGEMENT RESTRUCTURE

 

The senior management team has been restructured to enhance our capacity to assess growth and business development opportunities while maintaining our focus on consistent and reliable production performance.

 

Under the new structure, Alan Dundas takes on the role of EGM Nickel and Seamus French has been appointed EGM Copper Uranium. A new Fertilizers and Industrial Minerals group has been created to incorporate Queensland Fertilizer Operations, Hi Fert and Corridor Sands. We are well advanced in an external search for an EGM Fertilizers and Industrial Minerals. In the interim, Mike Nossal, EGM Business Strategy and Development, has taken accountability for this business.

 

BUSINESS DEVELOPMENT

 

Olympic Dam

 

Work has commenced on the next phase of the Olympic Dam Development Study. The study will focus on leveraging the already significant investment at Olympic Dam and provide a life of mine plan to guide ongoing development. By 2006 WMC will be in a position to identify a single preferred development plan. That option will become the subject of a final feasibility study and could potentially increase copper production levels to 350ktpa through underground expansion or to 500ktpa through an open pit.

 

Nickel

 

On 18 June we entered into a conditional agreement to sell our Lanfranchi nickel mine and associated tenements at Kambalda for A$26M. This sale concludes our strategy of selling mature nickel mines at Kambalda and participating in the benefits that a third party can yield from the remaining resource.

 

Drilling for the pre-feasibility study at Yakabindie has commenced with eight drill holes completed during the quarter. Fresh core samples are currently undergoing metallurgical evaluation.

 

Exploration

 

Near mine exploration advanced at Cliffs and Collurabbie during the quarter. Exploration and assessment of opportunities continue globally for nickel sulphides (Africa, North America, China) and for copper-gold deposits (Africa, North and South America).

 

     WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents

QUARTERLY REVIEW

QUARTER ENDED 30 JUNE 2004

 

WMC RESOURCES LTD

(ABN 78 004 184 596)

 

TAXATION

 

As a result of strong taxable income generation in 2003 and continued strong profitability in 2004, we anticipate that substantially all of our known tax losses will be brought to account in the current year. This should result in an accounting tax credit of around 5 to 10 per cent during both halves of 2004 subject to profitability levels. We believe that we are unlikely to pay cash tax until 2006.

 

We are currently evaluating the benefits, if any, which may arise from entering the tax consolidations regime and will advise this once determined.

 

2004 CALENDAR

 

Half year financial results will be released on 11 August 2004. We will release our September Quarterly Review on 14 October 2004.

 

     WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents

QUARTERLY REVIEW

QUARTER ENDED 30 JUNE 2004

 

WMC RESOURCES LTD

(ABN 78 004 184 596)

 

PRODUCTION SUMMARY

 

    

Quarter

ended

30 June 2004


  

Quarter
ended

31 Mar 2004


  

Quarter
ended

30 June 2003


Olympic Dam Operations

              

Copper (tonnes of refined copper)

   54,785    47,974    49,644

Uranium Oxide concentrate (tonnes)

   1,020    1,205    764

Gold (ounces)

   22,266    12,110    23,371

Silver (ounces)

   232,194    127,190    173,340

Nickel (tonnes contained nickel)

              

Kambalda Nickel Operations

   7,058    5,938    7,100

Leinster Nickel Operations

   8,639    11,308    10,099

Mount Keith Operations

   9,577    11,526    11,590

Total nickel-in-concentrate

   25,274    28,772    28,789

Total nickel-in-matte

   18,774    27,074    21,923

Total nickel metal

   16,893    11,655    14,498

Phosphate Hill

              

Di-ammonium phosphate (tonnes)

   107,677    166,929    168,075

Mono-ammonium phosphate (tonnes)

   79,751    59,790    70,726

Total Fertilizer (tonnes)

   187,428    226,719    238,801

 

A statistical supplement providing a detailed breakdown of WMC production results is on our home page at http://www.wmc.com

 

     WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents

QUARTERLY REVIEW

QUARTER ENDED 30 JUNE 2004

 

WMC RESOURCES LTD

(ABN 78 004 184 596)

 

COMMODITY AND CURRENCY HEDGING

 

The table below shows both the rates at which the open hedge transactions are contracted with third parties to determine the cash flow impact for each hedge and the fair valued rates for determining the profit and loss impact.

 

Hedging as at 30 June 2004

 

Period


 

Forward Sale of US$


 

Non-limiting Cover


   
 

Amount

US$m


 

Cash Flow

Rate A$/US$


 

Amount

US$m


 

Cash Flow

Rate A$/US$


 

Profit & Loss

Rate A$/US$


2004

      114         0.6720         36         0.6402         0.5289

* The legacy hedges were fair valued at the date of demerger. Consequently, the profit and loss for each hedge will be determined by the difference between a particular hedge’s fair valued rate and the spot price at the date of the hedge’s maturity.

 

Deferred profits

 

Profits arising on the close out of the legacy hedge book during 2003 have been deferred and will be recognised during 2004 to 2010 as shown in the tables below.

 

     Currency

   Gold

     (A$m)

   (A$m)

     1H

   2H

   1H

   2H

2004

                  2.0

2005

   54.5    60.2    1.2    1.6

2006

   37.3    41.8    1.1    1.4

2007

   40.5    42.1    1.2    1.6

2008

   45.9    44.6    1.1    1.5

2009

             1.3    1.7

2010

             1.4    1.8

 

Deferred cashflows

 

In 2001 some foreign exchange and gold hedges were reversed as a result of the gold asset sales. The profit and loss on these transactions was realised in 2001 and the cash outflow was scheduled to occur as shown in the table below.

 

     (A$m)

2004

   17.2

2005

   37.3

2006

   28.5

2007

   23.4

2008

   21.2

 

During the quarter we took advantage of our strong cash inflows to arrange the early repayment of these amounts.

 

A total payment of A$107M was made to clear A$127M of these outstandings, with the A$20M reduction against the scheduled payment profile reflecting the time value of money at Australian dollar interest rates.

 

An amount of A$0.7M cash outflow remains deferred at 30 June 2004 and will mature in the second half of 2004.

 

     WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents
WMC Resources Ltd Quarterly Statistical Supplement - Total Production   Quarter Ended 30 June 2004

 

     Quarter ending
30/06/2004


  Quarter ending
31/03/2004


  Quarter ending
31/12/2003


  Quarter ending
30/09/2003


   Quarter ending
30/06/2003


COPPER & URANIUM - OLYMPIC DAM
OPERATIONS

                                              

COPPER

   tonnes   tonnes   tonnes   tonnes    tonnes

Ore hoisted

   1,932,556   2,260,224   2,575,092   2,281,673    2,089,739
     tonnes    grade %   tonnes    grade %   tonnes    grade %   tonnes    grade %    tonnes    grade %

Ore treated and head grade

   2,100,103    2.36   2,364,103    2.40   1,959,037    2.50   2,151,125    2.45    2,334,685    2.19

Concentrate smelted

   127,979    45.5   110,919    49.6   67,723    50.3   64,322    51.3    125,159    47.4
     tonnes   tonnes   tonnes   tonnes    tonnes

Copper cathode produced

   54,785   47,974   33,420   35,337    49,644
     tonnes    kg/tonne   tonnes    kg/tonne   tonnes    kg/tonne   tonnes    kg/tonne    tonnes    kg/tonne

Uranium oxide concentrate produced & head grade

   1,020    0.65   1,205    0.63   898    0.62   906    0.65    764    0.64
     ounces    g/tonne   ounces    g/tonne   ounces    g/tonne   ounces    g/tonne    ounces    g/tonne

Refined gold produced & head grade

   22,266    0.46   12,110    0.46   18,904    0.45   16,910    0.46    23,371    0.48
     ounces    g/tonne   ounces    g/tonne   ounces    g/tonne   ounces    g/tonne    ounces    g/tonne

Refined silver produced & head grade

   232,194    5.15   127,190    4.87   164,757    5.11   113,632    4.90    173,340    4.32

NICKEL

                                              

Ore treated and head grade

   tonnes    grade %   tonnes    grade %   tonnes    grade %   tonnes    grade %    tonnes    grade %

Kambalda Nickel Operations*

   251,592    3.08   170,282    3.83   204,016    3.56   178,990    3.62    218,327    3.57

Leinster Nickel Operations

   595,408    1.69   676,596    1.95   621,748    2.13   664,652    1.92    581,944    2.02

Mount Keith Nickel Operations

   2,850,550    0.52   2,673,931    0.61   2,974,189    0.66   2,838,202    0.66    2,698,898    0.59

Concentrate produced & concentrate grade

   tonnes    grade %   tonnes    grade %   tonnes    grade %   tonnes    grade %    tonnes    grade %

Kambalda Nickel Operations

   53,364    13.2   42,595    13.9   45,930    14.3   41,821    13.9    50,748    14.0

Leinster Nickel Operations

   79,741    10.8   95,425    11.9   93,661    12.1   89,509    11.9    84,963    11.9

Mount Keith Nickel Operations

   41,922    22.8   57,212    20.1   70,681    20.6   66,366    20.6    54,386    21.3

Nickel contained in concentrate

   tonnes   tonnes   tonnes   tonnes    tonnes

Kambalda Nickel Operations

   7,058   5,938   6,576   5,828    7,100

Leinster Nickel Operations

   8,639   11,308   11,340   10,667    10,099

Mount Keith Nickel Operations

   9,577   11,526   14,586   13,661    11,590

Total

   25,274   28,772   32,502   30,156    28,789
Smelter feed & matte produced (tonnes)    Feed    Matte   Feed    Matte   Feed    Matte   Feed    Matte    Feed    Matte

Kalgoorlie Nickel Smelter

   149,911    27,046   192,053    39,628   188,631    39,654   194,407    43,688    167,471    31,854
Nickel contained in matte    tonnes   tonnes   tonnes   tonnes    tonnes

Kalgoorlie Nickel Smelter

   18,774   27,074   27,346   27,799    21,923
Matte treated    tonnes   tonnes   tonnes   tonnes    tonnes

Kwinana Nickel Refinery

   24,866   17,989   26,354   20,867    21,706
Nickel packaged    tonnes   tonnes   tonnes   tonnes    tonnes

Kwinana Nickel Refinery

   16,893   11,655   17,780   13,969    14,498

FERTILIZER - PHOSPHATE HILL

                                              
     tonnes   tonnes   tonnes   tonnes    tonnes

DAP

   107,677   166,929   215,412   173,441    168,075

MAP

   79,751   59,790   32,839   27,484    70,726

Total Fertilizer

   187,428   226,719   248,251   200,925    238,801

* Purchased feed.


Table of Contents

Date: 29 July 2004

 

Public Announcement 2004-22

 

WMC and Jinchuan sign strategic alliance for joint exploration in China

 

WMC Resources Ltd (WMC) and China’s largest nickel producer, Jinchuan Group Limited (Jinchuan) this week signed an Exploration Co-operation Agreement that will see the two companies form a partnership to explore for nickel in China.

 

Under the agreement, the two companies will form a strategic alliance to explore for nickel sulphides and associated metals in Jinchuan’s home province of Gansu in central China and in other parts of China.

 

The partnership will be owned and funded on a 50-50 basis, with WMC and Jinchuan sharing the cost of any agreed exploration programs. Exploration tenements in the area of interest have already been secured under the agreement.

 

The board and management team for the joint venture company to be formed out of the partnership will be drawn from WMC and Jinchuan.

 

The agreement also carries provisions for advanced joint exploration, development and mining of any nickel sulphide ore bodies discovered within the area of interest, and Jinchuan will have a first right of purchase, linked to international commercial terms, for nickel produced.

 

The agreement was signed in Melbourne this week by WMC Resources’ Chief Executive Officer, Mr Andrew Michelmore and Jinchuan Group’s President and Chairman, Mr Li Yong-jun.

 

“This agreement is based on a set of shared principles. It has been forged out of a valued, long-term relationship between WMC and Jinchuan. It is underpinned by mutual understanding and a co-operative, positive approach,” Mr Michelmore and Mr Li said in a joint statement.

 

The agreement is the next step in a 16-year relationship between the Australian and Chinese companies, both of whom are their country’s biggest nickel producers.

 

The signing of this agreement was witnessed by Mr Zhang Chong, Director of the Department of Land and Resources of Gansu Province, as a representative of the Gansu Provincial Government.

 

Mr Zhang Chong commented: “The Government of Gansu Province strongly supports the cooperation between WMC and Jinchuan in this exploration venture, and more broadly we welcome the deepening of the relationship between these two companies.”

 

Mr Michelmore said: “This strategic alliance combines WMC’s nickel sulphide exploration expertise with Jinchuan’s local knowledge and vast experience in the nickel business. We are very pleased to have strengthened an already strong relationship with a respected nickel producer like Jinchuan, and we look forward to pursuing exploration programs in China alongside our new partner.”

 

WMC Resources Ltd

ABN 76 004 184 598

GPO Box 860K

Melbourne Vic. 3001

Australia

Level 16 IBM Centre

60 City Road

Southbank Vic. 3006

Australia

Tel +61 (0)3 9685 6000

Fax +61 (0)3 9686 3569

 

Page 1 of 2


Table of Contents

The close association between WMC and Jinchuan began in 1988 when WMC assisted Jinchuan in the construction of its nickel smelter in Gansu Province.

 

“Jinchuan welcomes the formalising of this alliance. WMC has a strong exploration skills base and a reputation for applying cutting edge technology for data interpretation,” Mr Li said.

 

In August last year, WMC agreed to a five-year nickel supply contract with Jinchuan, beginning in 2005. That contract calls for WMC to supply to Jinchuan 90,000 tonnes of nickel (in matte form), and it comes on top of an earlier agreement to provide 30,000 tonnes of nickel. When valued at current prices, that 120,000 tonnes of nickel is worth US$1.8 billion.

 

The Jinchuan Group is located in Jinchang, known as China’s nickel capital. Jinchuan is China’s largest integrated producer of nickel for the domestic market. Jinchuan’s nickel output accounts for more than 88 per cent of Chinese production.

 

WMC Resources is one of Australia’s largest minerals development companies, and ranks as the world’s third largest nickel producer. WMC’s current nickel production comes from Western Australia.

 

Note: A photo of Jinchuan’s Mr Li Yong-jun and WMC’s Mr Andrew Michelmore signing the agreement in Melbourne on 26 July 2004 is available by contacting Heather Lakin on telephone (03) 9685 6101 or via email heather.lakin@wmc.com

 

For further information contact:

 

Media contact:

Troy Hey

Group Manager – Public Affairs

Telephone: (03) 9685 6233

Mobile: 0419 502 852

 

Analyst contact:

Nerida Mossop

Manager – Investor Relations

Telephone: (03) 9685 6274

Mobile: 0418 378 809

 

Page 2 of 2


Table of Contents
To: The Manager

Announcements

ASX Company Announcements Office

 

Public Announcement 2004-23

 

WMC Resources Ltd 2004 Half-Year Results

 

Please find attached for immediate release Public Announcement 2004-23 covering the release of WMC Resources Ltd’s Financial Results for the half-year ended 30 June 2004.

 

The following documents are included as part of the release:

 

Public Announcement

 

Fact File for the Half-Year ending 30 June, 2004

 

Appendix 4D – Half-Yearly ASX Report

 

WMC’s Chief Executive Officer, Mr Andrew Michelmore, will host an audio conference and webcast presentation at 1.00pm this afternoon which will be broadcast live from WMC’s web site at www.wmc.com . A recording of this conference will be available for playback on WMC’s web site later this evening.

 

Ross Mallett

Assistant Company Secretary

 

11 August 2004

 

For further information, please call:

  WMC Resources Ltd
    ACN 004 184 598

Media Contact:

   

Troy Hey, Group Manager Public Affairs

  GPO Box 860K

(03) 9685-6233 or 0419 502 852

  Melbourne Vic. 3001
    Australia

Analyst/Shareholder Contact:

   

Nerida Mossop, Manager Investor Relations

  Level 16 IBM Centre

(03) 9685-6274 or 0418 378 809

  60 City Road
    Southbank Vic. 3006
    Australia
    Tel +61 (0)3 9685 6000
    Fax +61 (0)3 9685 6115


Table of Contents

WMC RESOURCES LTD

 

FACT FILE

 

FOR THE SIX MONTHS ENDED

 

30 JUNE 2004

 

FOR ADDITIONAL INFORMATIONS PLEASE CONTACT:

 

Media contact:

 

Troy Hey Group Manager – Public Affairs

Phone + 61 03 9685 6233 or +61 0419 502 852

troy.hey@wmc.com

 

Analyst and shareholder contact:

 

Nerida Mossop Manager – Investor Relations

Phone + 61 03 9685 6274 or + 61 0418 378 809

nerida.mossop@wmc.com


Table of Contents

 

LOGO


Table of Contents

DISCLAIMER

 

Statements contained in this material, particularly those regarding the possible or assumed future performance, costs, dividends, returns, production levels or rates, prices, reserves, divestments, potential growth of WMC, industry growth or other trend projections and any estimated company earnings are or may be forward looking statements. Such statements relate to future events and expectations and as such involve known and unknown risks and uncertainties. Actual results, actions and developments may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors, including: variations in the market price of the minerals and metals produced by WMC, the impact of foreign currency exchange rates on these market prices, WMC’s ability to profitably produce and transport minerals and metals extracted to applicable markets, WMC’s ability to achieve projected cost and scheduling targets for repair and construction activities and the activities of governmental authorities in certain countries where WMC has projects, facilities or mines that are being explored or developed, as well as the factors discussed under the caption “Risk Factors” at pages 13 to 16 of WMC’s Annual Report on Form 20-F for the fiscal year ended December 31, 2003.

 

The presentation of WMC’s statement of financial performance, statement of financial position, and statement of cashflows and the business segment financial statements is designed to provide information in relation to each of the business segments and is therefore not set out in accordance with Australian Generally Accepted Accounting Principles (GAAP). Financial statements prepared in accordance with Australian GAAP can be found in the Half Yearly ASX Report.

 

All amounts are in Australian dollars unless otherwise stated.

 

1    WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents
CONTENTS     

Public Announcement

   4

Business performance

   6

Nickel

   14

Copper

   18

Fertilizer

   22

Growth

   26

Definitions

   28

 

2    WMC RESOURCES LTD ABN 76 004 184 598


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3    WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents

PUBLIC ANNOUNCEMENT

 

EARNINGS, RETURNS AND CASH FLOW UP IN STRONG FIRST HALF

 

PERFORMANCE

 

Profit after tax of $515m for the half year ended 30 June 2004 increased $316m on the preceding half.

 

Return on equity increased from 10 per cent to 23 per cent.

 

EBIT from operations has doubled to $438m, reflecting increased production and sales from the copper and fertilizer operations and improved realised Australian dollar prices.

 

Cashflow before financing and demerger costs increased to $398m from $140m in the preceding half.

 

The company’s financial position strengthened during the period, with gearing reduced to 20 per cent and interest cover up to 35 times.

 

Capital expenditure for the half was $199m, down 44 per cent on the preceding half.

 

The company does not expect to pay tax in the current year. The half year result includes a net tax credit of $46m which includes the benefit of tax losses brought to account in the period .

 

Directors declared an interim dividend of 17 cents per share.

 

Key Financials

 

(A$ Million)


   Actual
2H03


   Actual
1H04


Revenue from operations (pre hedging) 1

   1,538    1,831

Profit after tax

   199    515

EBIT from operations (pre hedging) 1

   219    438
    
  

Cashflow from operations

   469    602

Capital expenditure

   357    199

Cashflow before financing and demerger costs 1

   140    398

Net debt 1

   1,253    1,091
    
  

Total assets

   7,560    7,601

Equity

   3,950    4,428
    
  

Return on equity (%)

   10.1    23.2

Cash flow from operations to net debt (%)

   74.8    110.4

Net debt / net debt + equity (%)

   24.1    19.8

Interest cover (times)

   14.6    34.6

Earnings per share - basic (cents)

   17.5    44.6

Dividend per share - unfranked (cents)

   6.0    17.0

1 Not prepared in accordance with Australian GAAP. Refer to disclaimer stated on page 1.

 

CEO COMMENTS

 

“Improving operational reliability and Australian dollar commodity prices increased earnings, returns and cashflows in the six months to June 2004,” said WMC Resources Ltd CEO, Andrew Michelmore.

 

“Our nickel operations produced first half performance to plan,with improved revenues and earnings growth.”

 

“A turnaround in reliability and profitability at Olympic Dam should continue throughout the year, with fertilizers also positioned for a stronger second half.”

 

“The gains from strong first half earnings have allowed us to reduce debt and gearing, building our capability for growth.”

 

“Balancing the dual demands of operational reliability and disciplined assessment of development opportunities will be the focus for us into 2005.”

 

     4    WMC RESOURCES LTD ABN 76 004 184 598


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THIS PAGE INTENTIONALLY LEFT BLANK

 

     5    WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents

BUSINESS PERFORMANCE

 

HEALTH, SAFETY & ENVIRONMENT

 

Safety performance

 

 

LOGO

 

The lost time plus medically treated injury frequency rate (IFR) for the period is slightly above rates achieved in 2003. While our total injury rate has not improved, the overall severity of injuries is significantly lower than experienced in previous years. Reflecting this, the lost time injury rate stands at 1.8 for the first half compared with the full year 2003 result of 3.2.

 

Remediation works at the Yeelirrie uranium project site in Western Australia commenced during the half. The rehabilitation plan has been developed with the approval of the State Mining Engineer and Radiological Council of WA, and is expected to be completed by year end.

 

Health, safety and environment performance data is also available at www.wmc.com/sustainability .

 

WMC SHARE PRICE (A$)

 

LOGO

 

     6    WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents

BUSINESS PERFORMANCE

 

MARKETING

 

Commodity markets were buoyant throughout the half with firm prices for all our commodities. Exchange stocks of both nickel and copper remain tight, and demand for our output has been strong. Fertilizer pricing has improved, boosting our realised prices. Uranium spot prices have increased significantly in view of expectations of more balanced supply/demand. As uranium is sold under long term contracts, these increased spot prices will be reflected as new contracts are put in place.

 

DIVIDENDS

 

In consideration of the strong earnings and cashflows, driven by the cyclical highs in commodity prices, Directors have declared an interim dividend of 17 cents per share to be paid on 22 September with the record date for entitlements being 6 September. WMC will continue the Dividend Reinvestment Plan, but the Directors have determined that a zero per cent discount will apply to the interim dividend and to future dividends until further notice.

 

TREASURY

 

The Group is in a strong financial position. As operators of large world-class assets, we seek to finance our assets and growth opportunities with a mix of equity and debt financing that best balances risk and reward to shareholders.

 

The Group has total assets of $7.6 billion, equity of $4.4 billion and net debt of just under $1.1 billion at 30 June 2004. The Group’s gearing (measured as debt to debt-plus-equity) was below 20 per cent.

 

During June 2004, we took advantage of strong operating cashflow to arrange early repayment of residual foreign exchange and gold hedge obligations relating to the gold operations previously conducted by the Group. First half 2004 cashflows reflect the settlement of $107 million together with the current period payments, totalling $116 million.

 

Finance and Other costs (as reported in the Statement of Financial Position) of $10 million largely relates to the amortisation of net gain arising on translation of foreign currency debt.

 

Funding arrangements

 

Our 2003 Global Bond (US$500 million 10 year and US$200 million 30 year tenor) remains in place as our core long term debt funding. Given our low gearing and strong cashflows, we have cancelled part of our existing syndicated debt facility and will refinance the balance this month, prior to the maturity in November of one tranche, with a dual currency revolver bank facility of US$250 million with a two year maturity.

 

Legacy currency hedge book

 

The legacy currency hedge book for 2005 to 2008 was closed out in the 2003 year. The resulting profit of $367 million was deferred and will be recognised over the years of 2005 to 2008 in line with the underlying production. The recognition profile of the deferred profits is set out on page 8. The amounts recognised in 2005 to 2008 will be largely non-assessable for income tax purposes. The portion of the hedge book relating to the 2004 financial year was not closed out. The hedged position in respect of the 2004 contracts is also set out on page 8.

 

INSURANCE

 

Olympic Dam heat exchanger insurance claim

 

Results for the first half of 2004 include the recognition of a net $22 million receivable in respect of an insured event at the Group’s copper operations. The event, the failure of the heat exchanger in the acid plant, occurred in late 2003 with the insurance claim recently agreed. The majority of the proceeds are expected to be received in the third quarter of 2004. The net impact of the $22 million reflects as $42 million in revenue in copper operations (the insured party) and a $20 million charge against revenue in ‘other operations’ (incorporating Westminer Insurance – the Group’s captive insurance company).

 

SX insurance claim

 

WMC has an outstanding claim in relation to the 2001 Olympic Dam fire. An amount of $120 million was recognised in relation to the claim in the 2002 financial statements. To date, we have received $82 million of cash in relation to the claim and carry a receivable of $38 million on the balance sheet. We are currently engaged in a mediation process with our insurers. The final amount of the claim will be in excess of the $120 million already brought to account. Recognition of further amounts will be subject to the outcome of these discussions and accounting convention.

 

     7    WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents

BUSINESS PERFORMANCE

TAXATION

 

Recognition of off-balance sheet tax losses

 

Strong taxable income in 2003 and the outlook for 2004 increased the certainty of recovery of off-balance sheet tax losses to the point that accounting convention requires the company to recognise substantially all of the known tax losses. Recognition over the full financial year will result in an effective tax credit on current year profit before tax of around 10 per cent. There remains a proportion of tax losses yet to be recognised. These may be brought to account during the current financial year, subject to levels of taxable income and accounting convention.

 

Tax consolidation regime

 

We are yet to make a final determination whether or not to enter the tax consolidation regime. Accordingly, the benefits (if any), which may arise from entering the new tax regime, have not yet been fully evaluated.

 

Depending on the election made, it is possible but not yet quantifiable, that the projected full year tax credit may be further increased in the 2004 year.

 

COMMODITY AND CURRENCY HEDGING

 

The table below shows both the rates at which the open hedge transactions are contracted with third parties to determine the cashflow impact for each hedge and the fair valued rates for determining the profit and loss impact.

 

The legacy hedges were fair valued at the date of demerger. Consequently, the profit and loss for each hedge will be determined by the difference between a particular hedge’s fair valued rate and the spot price at the date of the hedge’s maturity.

 

Hedging as at 30 June 2004

 

Period


 

Forward Sale of US$


 

Non-limiting Cover


 

Profit & Loss

Rate A$/US$


 

Amount

US$m


 

Cashflow

Rate A$/US$


 

Amount

US$m


 

Cashflow

Rate A$/US$


 

2004

      114         0.6720         36         0.6402         0.5289

 

Deferred profits

 

Profits arising on the close out of the legacy hedge book during 2003 have been deferred and will be recognised during 2004 to 2010 as shown in the table below.

 

     Currency

   Gold

     (A$m)

   (A$m)

     1H

   2H

   Total

   1H

   2H

   Total

2004

                       2.0    2.0

2005

   54.5    60.2    114.7    1.2    1.6    2.8

2006

   37.3    41.8    79.1    1.1    1.4    2.5

2007

   40.5    42.1    82.6    1.2    1.6    2.8

2008

   45.9    44.6    90.5    1.1    1.5    2.6

2009

                  1.3    1.7    3.0

2010

                  1.4    1.8    3.2
    
  
  
  
  
  
     178.2    188.7    366.9    7.3    11.6    18.9
    
  
  
  
  
  

 

    8   WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents

BUSINESS PERFORMANCE

 

PRODUCTION SUMMARY

 

     Actual
FY03


   Actual
1H03


   Actual
2H03


   Actual
1H04


Contained nickel (‘000 tonnes)

                   

- Concentrate

   118    55    63    54

- Matte

   99    44    55    46

- Metal

   62    30    32    29
    
  
  
  

Copper (‘000 tonnes)

   160    91    69    103

Uranium (tonnes)

   3,203    1,399    1,804    2,225

Gold (‘000 ounces)

   86    50    36    34
    
  
  
  

Fertilizer (‘000 tonnes)

                   

- Di-ammonium phosphate

   760    371    389    275

- Mono-ammonium phosphate

   162    102    60    139
    
  
  
  

Total Fertilizer

   922    473    449    414
    
  
  
  

 

For production commentary, refer to the nickel, copper and fertilizer sections of this document.

 

     9    WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents

BUSINESS PERFORMANCE

 

STATEMENT OF FINANCIAL PERFORMANCE

 

(A$ Million)


   Actual
FY03


    Actual
1H03


    Actual
2H03


    Actual
1H04


 

REVENUE

                        

Nickel 1

   1,818     776     1,042     1,049  

Copper-uranium

   696     363     333     476  

Fertilizer (QFO and Hi-Fert)

   423     260     163     291  

Elimination of intercompany sales

   (8 )   (4 )   (4 )   (7 )
    

 

 

 

Sales revenue (pre hedging)

   2,929     1,395     1,534     1,809  

Revenue received/receivable from insurance claim

   4     —       4     22  
    

 

 

 

REVENUE from operations (pre hedging)

   2,933     1,395     1,538     1,831  
    

 

 

 

COSTS

                        

Cash (includes commodity trading expenses)

   (1,880 )   (965 )   (915 )   (966 )

Non cash

   (583 )   (267 )   (316 )   (261 )

Third party purchases

   (328 )   (154 )   (174 )   (227 )

Change in stock

   80     29     51     36  
    

 

 

 

TOTAL COST OF SALES

   (2,711 )   (1,357 )   (1,354 )   (1,418 )
    

 

 

 

Total EBIT (pre hedging)

   222     38     184     413  
    

 

 

 

EBIT

                        

Nickel 1

   430     104     326     380  

Copper-uranium

   (120 )   (42 )   (78 )   77  

Fertilizer

   (31 )   4     (35 )   (3 )

Other EBIT from operations 1

   11     5     6     (16 )
    

 

 

 

EBIT from operations (pre hedging)

   290     71     219     438  

Net currency and commodity hedging gains

   72     22     50     72  
    

 

 

 

EBIT from operations (post hedging)

   362     93     269     510  

Corporate

   (21 )   (9 )   (12 )   (10 )

Corporate one-off items

   (8 )   —       (8 )   (1 )

Finance and other costs

   (3 )   (1 )   (2 )   10  

Exploration and new business

   (36 )   (23 )   (13 )   (24 )
    

 

 

 

Total EBIT

   294     60     234     485  
    

 

 

 

Net borrowing costs

   (46 )   (21 )   (25 )   (16 )
    

 

 

 

PROFIT before income tax credit/(expense)

   248     39     209     469  
    

 

 

 

Income tax credit/(expense)

   (2 )   8     (10 )   46  
    

 

 

 

PROFIT after tax

   246     47     199     515  
    

 

 

 

 

The revenue, costs, EBIT and EBIT from operations (post hedging) sections from the table above are not prepared under Australian GAAP. These items have been included as they are considered a useful measure of operational performance commonly used by investors to evaluate company results. Financial statements prepared in accordance with Australian GAAP can be found in the Half Yearly ASX Report.


1 Revenue and costs relating to power sales made by Nickel to third parties in Western Australia are now reported as part of Nickel’s revenue and costs. Comparatives have been restated accordingly.

 

     10    WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents

BUSINESS PERFORMANCE

 

STATEMENT OF FINANCIAL POSITION

 

(A$ Million)


   Actual
Jun-03


    Actual
Dec-03


    Actual
Jun-04


 

Property, plant & equipment (including acquired mineral rights)

                  

Nickel

   1,280     1,242     1,300  

Copper-uranium

   3,806     3,931     3,865  

Fertilizer

   561     566     547  

Other

   97     136     133  
    

 

 

     5,744     5,875     5,845  
    

 

 

Working capital

                  

Nickel 1

   214     301     240  

Copper-uranium

   214     215     315  

Fertilizer

   165     81     86  

Other 1

   (38 )   (64 )   (61 )
    

 

 

     555     533     580  
    

 

 

Corporate

                  

Net deferred gains and balances relating to hedging and debt revaluations

   (819 )   (916 )   (636 )

Tax balances

   (327 )   (337 )   (291 )

Exploration and evaluation expenditure capitalised

   84     69     76  

Provisions

   (186 )   (190 )   (202 )

Other

   167     169     147  
    

 

 

NET ASSETS FUNDED BY DEBT AND EQUITY

   5,218     5,203     5,519  
    

 

 

Net debt

   1,557     1,253     1,091  

Shareholders’ equity

   3,661     3,950     4,428  
    

 

 

NET DEBT AND EQUITY

   5,218     5,203     5,519  
    

 

 

 

The table above is not prepared under Australian GAAP. It has been included as it is considered a useful measure of operational performance, commonly used by investors to evaluate the company. Financial Statements prepared in accordance with Australian GAAP can be found in the Half Yearly ASX Report.


1 Working capital relating to power sales made by Nickel to third parties in Western Australia are now reported as part of Nickel’s working capital. Comparatives have been restated accordingly.

 

     11    WMC RESOURCES LTD ABN 76 004 184 598


Table of Contents

BUSINESS PERFORMANCE

 

STATEMENT OF CASH FLOWS

 

(A$ Million)


   Actual
FY03


    Actual
1H03


    Actual
2H03


    Actual
1H04


 

EBITDA (pre hedging)

                        

Nickel 1

   673     208     465     466  

Copper-uranium

   98     73     25     188  

Fertilizer

   12     25     (13 )   22  

Corporate/New Business/Exploration/Other 1

   (52 )   (24 )   (28 )   (41 )
    

 

 

 

     731     282     449     635  
    

 

 

 

Movements in working capital

                        

Nickel 2

   (62 )   24     (86 )   61  

Copper-uranium

   34     36     (2 )   (99 )

Fertilizer

   16     (68 )   84     (5 )

Corporate/New Business/Exploration/Other 2

   (15 )   (40 )   25     (2 )
    

 

 

 

     (27 )   (48 )   21     (45 )
    

 

 

 

Other balance sheet movements

   18     (1 )   19     16  

Hedging receipts/(payments) 3

   8     (18 )   26     20  

Net borrowing costs paid

   (51 )   (6 )   (45 )   (23 )

Income tax paid

   (3 )   (2 )   (1 )   —    
    

 

 

 

Cash flow from operations

   676     207     469     602  
    

 

 

 

Capital expenditure

                        

Nickel

   (219 )   (119 )   (100 )   (143 )

Copper-uranium

   (397 )   (171 )   (226 )   (49 )