COMPLETION OF THE ACQUISITION OF AUSTRALIAN EXPLORATION PROJECTS FROM LIONORE
As summarised in the 2006 Annual Report, Breakaway Resources Ltd (“Breakaway”) completed the acquisition of a portfolio of advanced nickel sulphide exploration projects from LionOre Mining International Ltd (“LionOre”) in August 2006 for a total consideration of $10.55 million, which was satisfied by the issue of 4.8 million Breakaway shares valued at $1.55 million and converting notes valued at $9.0 million. LionOre was subsequently acquired by Norilsk Nickel (“Norilsk Nickel”) (see below).
This transaction resulted in the acquisition of large portfolio of nickel projects covering a total area of 1,271km2
in the Eastern Goldfields and 1,492km2
in the East Kimberley regions of Western Australia, as well as the addition to the Company of an experienced nickel exploration team comprising former LionOre exploration management and support staff.
The Eastern Goldfelds projects are strategically located along the axis of the world-class Kambalda – Mt Keith nickel mine corridor and comprise both brownfields projects hosting former mines, deposits or occurrences of nickel and greenfields projects that are located along strike from known producing centres but have not undergone significant modern exploration.
The LionOre transaction significantly expanded Breakaway’s asset base and technical team, repositioning the Company as a leading Australian exploration company.
CAPITAL RAISING
During the 2007 financial year, Breakaway successfully completed a 1-for-5 share consolidation and an oversubscribed capital raising of $13.5 million which, together with earnings of $1.7 million received from the net profit royalty in the Eloise copper mine, resulted in total cash inflows of $15.2 million for the financial year.
BOARD APPOINTMENTS
During the year, the Company made two key Board appointments, Mr John Atkins as Chairman and Mr Jeffrey Gresham as a Non-Executive Director.
Mr John Atkins is an experienced corporate lawyer who is a senior partner and Head of Freehill’s Perth office. In addition, Mr Atkins is currently a Director of PearlStreet Ltd, Lions Eye Institute Ltd, Committee for Perth Ltd and the Chamber of Commerce and Industry of Western Australia.
Mr Jeffrey Gresham is an experienced Australian mining executive who has held senior technical and corporate positions with WMC, Wiluna Mines Ltd, Homestake Gold of Australia Ltd and Titan Resources Ltd. Mr Gresham is currently Chairman of Rox Resources Ltd and a Non-Executive Director of View Resources Ltd.
NORILSK TAKEOVER OF LIONORE MINING LTD
Soon after the end of the financial year, Norilsk Nickel successfully completed a takeover of LionOre. As a result of this transaction, Norilsk Nickel acquired LionOre’s 19.75% interest and converting notes in Breakaway.
