Directors Report
The directors of Morning Star Gold NL present the financial report of the Company for the year ended 30th June 2008.Directors
The names of the directors of the Company in office during the year and up to the date of this report, unless otherwise stated, are:
Chairman – Max M. Garling LLB
Max Garling is a Sydney based mining investor who has been involved with publicly listed mining companies for over 30 years. He is a substantial shareholder in MCO and was involved in its set-up and listing on the ASX. Mr. Garling is a lawyer by trade who specialises in merging mining properties & listed companies. He has been involved in various mining enterprises from vendor stage right through to production, including the A1 Gold Mine in Gaffney’s Creek Victoria (Broken Hill Holdings Ltd.) and the Daisy Milano Mine in W.A. (formerly Perilya Ltd.) and now of course the Morning Star and surrounding tenements in Eastern Victoria. Max was appointed as a director of the Company on 19th December, 2003.
Managing Director / Chief Executive – Nicholas M. Garling
Nicholas Garling (Max’s son) has worked for Investment Banks for 21 years in areas concerning equity capital raising, asset disposal, structured derivatives and listed markets trading. After studying Law at Sydney University and working in a Sydney legal practice for 4 years, he moved into the financial markets. Immediately before joining MCO, he worked for 10 years in Tokyo, Japan & Hong Kong, with UBS Warburg & Lehman Brothers where he was Managing Director of Equity Markets Group for UBS and before that, Managing Director of Lehman’s Asia-Pacific Equity business. Mr. Garling is a substantial shareholder in Morning Star Gold and works full-time in the Company’s Sydney office with regular visits to Woods Point. Nicholas was appointed as a director of the Company on 20th March, 2007.
Director – Jeffrey W. Williams BSc (Min Engineer) MBA MAusIMM AFAIM
Jeff Williams is a mining engineer with over 20 years experience in underground mining operations. He worked with CRA Limited (now RIO) for 12 years mining silver & zinc in their Broken Hill, NSW mine. He also worked with North Ltd for several years as their Senior Project Engineer. Jeff is currently Managing Director of the ASX listed Mineral Deposits Ltd (Director since 3rd January, 1997) with extensive gold and mineral sands interests in Senegal, East Africa. Jeff is based in Melbourne Victoria and was appointed as a director of the Company on 26th February, 2004.
Director – Malcolm H. Bird
Mal Bird has been a Director of MCO for 21 years and has 40 years experience in the stock broking industry with a specialist focus on Australian mining investments. He is also a Director of the ASX listed companies Central West Gold N.L. (ASX: CWG) (Director since 17th April, 1986) and Silver Mines Ltd. (ASX: SVL) (Director since 6th January, 2004). Malcolm is based in Sydney.
Director – Dr. Peter G. Jackson BSc PhD MAIG (appointed 10th March, 2008)
Dr. Jackson has been Chief Geologist of Morning Star for two years. He has over 22 years of extensive practical & technical experience in the Woods Point Dyke Swarm and extensive economic geological experience across Victoria. He has a particular interest in igneous hosted gold deposits and lectured at Melbourne’s La Trobe University for many years in Geology. Dr Jackson has authored and co-authored many geological publications and conducted hundreds of economic studies into Eastern Victorian gold deposits. Peter lived for many years at Australia’s Antarctic post in roles with the Bureau of Meteorology and is based in Melbourne, spending his working weeks in Woods Point at the Morning Star mine site and across MCO’s tenements. From a practical perspective, Dr Jackson is responsible for day to day running of the geology department at MCO and reporting to the board on geological findings and strategy. Morning Star Gold is Dr Jackson’s only current public company directorship.
Director - Timothy R. Allen (retired 28th November, 2007)
Tim Allen comes from a mining engineering background in Kalgoorlie W.A. He has been involved in all aspects of merchant banking and stock broking in Australia, UK and USA since 1962. Tim is Chairman and Director of Central West Gold N.L. (ASX: CWG) (Director since 11th August, 2005) and a Director of Hydromet Corporation Ltd (ASX: HMC) (Director since 30th October, 2001) and is based in Sydney. He retired as a Director of the Company on
28th November, 2007.
Directors’ Shareholdings
Particulars of shares and options over shares of Morning Star Gold N.L. in which directors have a relevant interest at the date of this report are as follows:
Directors’ Meetings
During the financial year 6 meetings of directors were held. Attendance at these meetings were as detailed below:
Company Secretary
The following person held the position of Company Secretary at the end of the financial year:
Maxwell James Davis FCA
Mr. Davis was appointed Secretary of the Company on 18th June, 1987. He is a qualified accountant and is a senior partner of Davis & Benson, a Sydney firm of Chartered Accountants which provide services to a wide variety of corporates including listed public companies. Max is also the Company Secretary of Central West Gold N.L., a listed public company.
Principal Activities
The principal activity of the Company in the course of the financial year was mineral exploration. There were no significant changes in the nature of the activities during the year.
Trading Results. The net loss of the Company for the year ended 30th June, 2008 was $3,611,331 (2007 $1,075,412).
Dividend
No dividend has been paid during the year nor have the directors recommended that dividends be paid.
Review of Operations
During the year the Company carried out exploration on its existing tenements with the object of identifying economic mineral deposits. A review of the operations during the year and the results of those operations appear in the foregoing “Annual Review of Operations”.
Remuneration Report
The remuneration of directors is established by the shareholders by way of a fixed annual fee.
There is no relationship between executive remuneration and the performance of the Company.
The Company is not of a size to justify a separate remuneration committee, all matters regarding directors’ emoluments are subject to scrutiny at full board meetings.
Directors or their associates were paid consulting fees in the normal course of business in respect to the Company’s exploration program as set out in Note 17.
The Company had 17 employees during the year ended 30th June, 2008.
There are no service contracts in place.
Interest in Contracts
Since the end of the previous financial year no director has had any interest in any contract or proposed contract with the Company.
Significant Changes
Significant changes in the state of affairs of the Company during the financial year were as follows:
During the year the Company placed 8,031,330 ordinary shares at the issue price of 30 cents per share and 8,031,330 free options expiring 31st December, 2008 exercisable at 25 cents.
As at 30th June, 2008 7,464,663 shares and 7,464,663 options had been issued raising $2,209,400 for working capital.
During the year the Company purchased from Dempsey Gold N.L. Mining Licence M.L. 5299 for a consideration of 600,000 ordinary fully paid shares at the issue price of 30 cents per share together with 600,000 options at the issue price of 14 cents each expiring 31st December, 2008 exercisable at 25 cents.
Financial Position
Due partly to an increased expenditure of $2,801,238 on its exploration program the Company’s net assets decreased by $1,146,954 to $2,180,259 notwithstanding the issue of shares and options raising $2,209,400.
Likely Future Developments
The directors intend the Company to continue to explore the Company’s mineral tenements and seek new exploration or development projects, otherwise there are no known likely developments.
Environmental Regulations
The Company is subject to environmental regulations in respect to its exploration activities and has fully complied with its obligations. No known rehabilitation commitments exist at the date of preparation of the accounts.
Since Balance Date
Since Balance Date the Company has issued 2,033,000 shares and 1,600,000 options.
Options
At the date of this report the unissued ordinary shares of the Company under option are as follows;
62,881,932 options exercisable at 25c and expiring on 31.12.08.
Non-Audit Services
There were no non-audit services provided to the Company during the year by the independent auditors.
Auditor’s Independence Declaration
The Company’s auditor has provided an independence declaration to the Company for the year ended 30th June 2008. The declaration forms part of this report.
Signed in Sydney on this 24th day of September 2008 in accordance with a resolution of directors.
N. M. Garling
Director
M. M. Garling
Director
