TIDMVGM
RNS Number : 5638H
Vatukoula Gold Mines PLC
20 May 2014
20 May 2014
Vatukoula Gold Mines plc
("Vatukoula" or "the Company")
Interim Results to 28 February 2014
Vatukoula Gold Mines plc, the AIM listed (AIM: VGM) gold
producer focused on Fiji, is pleased to announce its Interim
Results for the half-year ended 28 February 2014.
-- Completed the US$ 20 million equity portion of the US$ 40
million investment agreement with Zhongrun International Mining Co.
Ltd ("Zhongrun") in November 2013. A total of S20m in loan stock
investment to be received by 30 June 2014
-- To date US$4.6 million of the outstanding US$20 million debt financing received
-- H1 production of 19.1 koz - on track to achieve full year production target of 40 koz
-- Order of 4 dump trucks and 2 loader completed and scheduled
for commissioning in early July 2014
-- 34% reduction in cost of sales from the six months ended 29
February 2012 to the six months ended 28 February 2014.
Financial Highlights: Half Year ended Half Year ended
28 February 2014 28 February 2013
---------------------------------------- ------------------ ------------------
Revenue (GBP'000) 15,046 20,822
EBITDA (GBP'000) (5,535) 981
Cash (used) / generated from operating
activities (GBP'000) (4,455) 343
Underlying operating loss (GBP'000) (9,150) (2,274)
Cash cost per ounce sold (US$ / ounce
of gold) 1,463 1,635
Average realised gold price (US$ /
ounce of gold) 1,264 1,681
Basic (loss) / earnings per share
(pence) (3.25) (2.72)
Capital investment (GBP'000) 6,134 7,304
---------------------------------------- ------------------ ------------------
Operational Highlights: Half Year ended Half Year ended
28 February 2014 28 February 2013
------------------------------------- ----------------------- -----------------------
Total underground tonnes mined (ore
and waste) 211,242 206,501
Strike drive development (metres) 828 882
Capital development (metres) 2,862 2,391
Ore processed (tonnes) 174,010 216,860
Average ore head grade (grams of
gold / tonne) 4.19 3.80
Total recovery (%) 79.95% 73.24%
Gold produced (ounces) 18,712 19,411
Gold shipped (ounces) 19,116 19,595
------------------------------------- ----------------------- -----------------------
Y.B. Ian He, Non-Executive Chairman of Vatukoula, commented:
"During the half year we completed the US$ 20 million equity
portion of the US$40 million investment agreement with our majority
shareholder Zhongrun. This has allowed us to continue with our
capital development programme and has delivered a 10% improvement
in ore grade and a 9% increase in the gold recovery rate. At the
same time we have continued to manage our cash costs per ounce
which has been reduced by 11% compared to the same period last
year.
In March this year the regulatory approval of the US$ 20 million
loan portion of the US$40 million was granted, and to date US$ 4.6
million has been advanced. With the current difficult gold and
capital market conditions, this funding will provide us with the
means to continue or capital investment programme in this fiscal
year and we look forward to working alongside Zhongrun as we
deliver growth in production to a sustainable and profitable
level.
Given the historical delays in financing and the change in the
delivery dates of the US$ 20 million loan notes, it has meant we
will been unable to progress as quickly as we would have liked to.
This is turn has meant that production guidance for the financial
year ending August 2014 will be approximately 40,000 ounces as
previously announced.
Enquiries
Vatukoula Gold Mines Bell Pottinger
plc
+ 44 (0)20 7440 Daniel Thöle + 44 (0)20 7861
Ian He 0643 Marianna Bowes 3232
W.H. Ireland Limited
+ 44 (0)20 7220
James Joyce 1666
Operating and Financial Performance
Vatukoula Sold 19,116 ounces of gold during the first half of
this year at an average cash cost of US$1,463 per ounce. This
represents an 11% reduction in cost per ounce, a large portion of
the decrease in costs has been driven by the increase in grade
which rose 10% from 3.80 grams of gold per tonne in the six months
ended 28 February 2013 to 4.19 of gold per tonne in the six months
ended 28 February 2014. The increase in grade delivered to the mill
also drove a 9% increase in recovery which stood at 79.95% for the
six months ended 28 February 2014 (73.24%, for the same period last
year).
We have continued to focus on cost reduction with cost of sales
reducing by 15% to GBP16.9 million compared to the same period last
year. Our continued cost control over the two years has yielded
some excellent results with costs of sales dropping 34% from
GBP25.5 million for the six months ended 29 February 2012 to
GBP16.9 million for the period under review.
Nonetheless, and despite the reduction in costs, we have been
effected by the lower gold price environment. Our average realised
gold price per ounce decreased from US$1,681 for the six months
ending 28 February 2014 to US$1,264 for the period under review.
This 25% drop in price has meant that we have lost approximately
GBP5.4 million from revenues and as result we had a gross loss of
GBP1.9 million during the period compared to a gross profit of
GBP0.9 million during the same period last year. After
administrative expenses, foreign exchange losses and depreciation
and amortisation expenses the operating loss was GBP9.1 million
compared to a loss of GBP2.5 million during the same period last
year.
As highlighted in January 2014, at the beginning of this
financial year the main objectives for this period were to continue
with our development schedules to allow access to high grade mining
sections. We have continued to invest heavily in our development
programme with some GBP5.6 million invested during the period under
review, compared to GBP5.2 million during the same period last
year.
Underground Production and Development
Gold production from underground mining was limited, as we
continued to advance the capital investment programme. We continue
to implement footwall drive development (below the ore body) as we
believe that this approach will deliver significant benefits and
allow for a reduced mining machinery fleet and increased extraction
ratio in the long-term. In the short-term however, it will slow
initial access to the ore and not produce any gold from
development. We do however, remain convinced that this programme is
required for the long-term sustainability at Vatukoula.
During the first half of the year we mined a total of 211,242
tonnes of ore and waste, a 2% increase on 206,501 tonnes mined in
the same period last year. The increase was driven by higher
capital development metres.
Ore delivered from underground was 116,100 tonnes at a grade of
5.18 grams of gold per tonne. Although the tonnage was 8% lower
compared to last year, there was 6% increase in underground grade
from 4.86 grams per tonne to 5.18 grams per tonne, which resulted
in a net marginal decrease in the underground gold delivered to the
mill. The lower tonnage was a result of lower strike drive
development, reduced stoping tonnes due to reduced face
availability during development, and narrower stope mining
widths.
Total development decreased to 9,388 metres, a 7% reduction
compared to the same period last year. The primary drivers for this
were as follows:
-- Operating development includes all mining to access stopes
within an ore body (e.g. rises, cross-cuts and gullies). This type
of development is expensed as it is normally within the ore body
and once the mining has ceased the development has no further use.
Operating development decreased by 16% to 5,698 metres compared to
the same period last year. This reduction is a result of increased
resources being assigned to the capital development programme. Once
new development has exposed new mining areas, we expect an increase
in operating development.
-- Capital development metres are primarily comprised of
inclines, declines and footwall drives. This type of development is
carried outside the orebodies and provides long term access to the
ore bodies, and is capitalised. Capital development increased by
20% to 2,861 metres compared to the same period last year. This is
the result of incline and decline access development and footwall
drive development as part of our change in mining methodology.
Capital Development is a major item of our new regime in
underground mining at Vatukoula.
Operating Results Half Year Half Year % Variance
ended 28 February ended 28 February
2014 2013
-------------------------------------- ----------------------- ----------------------- ------------------------
Underground Mining
Total underground tonnes mined
(ore and waste) 211,242 206,501 2%
Operating development (metres) 5,698 6,779 (16%)
Strike drive development (metres) 828 882 (6%)
Capital development (metres) 2,862 2,391 20%
Total development (metres) 9,388 10,052 (7%)
Sulphide Plant
Sulphide ore delivered (tonnes) 116,100 126,063 (8%)
Sulphide head grade (grams of gold
/ tonne) 5.18 4.86 6%
Oxide Plant
Ore delivered (tonnes) 58,586 91,547 (36%)
Oxide head grade (grams of gold
/ tonne) 2.06 2.32 (11%)
Total (Sulphide + Oxide)
Ore processed (tonnes) 174,010 216,860 (20%)
Average ore head grade (grams of
gold / tonne) 4.19 3.80 10%
Total recovery (%) 79.95% 73.24% 9%
Gold produced (ounces) 18,712 19,411 (4%)
Gold shipped (ounces) 19,116 19,595 (2%)
-------------------------------------- ----------------------- ----------------------- ------------------------
Cash Costs
-------------------------------------- ----------------------- ----------------------- ------------------------
Cash cost per ounce sold (US$ /
ounce of gold) 1,463 1,635 (11%)
Cash cost per tonne mined and milled
(US$ / tonne) 161 148 9%
Average realised gold price (US$
/ ounce of gold) 1,264 1,681 (25%)
-------------------------------------- ----------------------- ----------------------- ------------------------
Surface Production
During the six months, production from the surface oxides
delivered 58,586 tonnes at an average grade of 2.06 grams per
tonne. Surface mining produces both oxide material from open pit
mining and sulphide material from old waste dumps. During the six
months we terminated the surface oxide mining, to focus on the
higher grade sulphide waste dumps available in the mine area. The
termination of the oxide mining led to drop of 36% in ore delivered
from surface mining compared to the same period last year. The
surface oxide material is a supplemental source of gold production
and will be phased out once we have sufficient production from
underground sources.
Vatukoula Treatment Plant ("VTP")
Ore processed for the half year was 174,010 tonnes, a 20%
decrease compared to the half year ending 28 February 2013 (216,860
tonnes). The decrease was primarily driven by the decreased surface
mining activities, which decreased ore delivered to the mill by
36%.
The average grade processed increased from 3.80 grams of gold
per tonne in the half year ending February 2013, to 4.19 grams of
gold per tonne in the half year ending February 2014. This was
driven by higher grades delivered from underground mining
operations and a decrease in lower grade surface tonnes delivered
to the mill. Recoveries ran at 79.95% for the period compared to
73.24% in the same period last year. The increase in recovery rates
can be attributed to the increase in grade delivered to the
mill
The mine shipped and sold 19,116 ounces of gold during for the
six months ended 28 February 2014 compared to 19,595 ounces in the
same period last year.
Financial Review
Gold shipped for the period was 2% lower than the six months
ended February 2013, and the average gold price was significantly
lower by 25%. Even though the Company benefited from a reduction in
cost of sales, the impact of lower revenue reduced the gross profit
for the period into a loss of GBP1.9 million (HY 2013: profit
GBP0.9 million). The lower gross profit affected underlying
operating loss, and combined with a GBP2.6 million foreign exchange
loss (HY 2013: gain 1.5 million) resulted in a GBP9.1 million loss
compared to GBP2.3 million loss during the same period last year.
Net loss for the period was GBP9.2 million (HY 2013: GBP2.5
million) as a result of the lower gross profits and foreign
exchange losses.
Reconciliation between net profit for the period and EBITDA is
presented below:
Half Year ended Half Year ended
28 February 2014 28 February 2013
(GBP'000) (GBP'000)
-------------------------------------------- ------------------------------ ------------------------------
Loss for the period (9,206) (2,458)
Less income tax credit (160) (182)
Plus depreciation and amortisation expense (3,656) 3,486
Less finance income (5) (2)
Plus finance expense 180 137
-------------------------------------------- ------------------------------ ------------------------------
EBITDA (5,535) 981
-------------------------------------------- ------------------------------ ------------------------------
Revenue
Revenue for the half year was GBP15.0 million which is 28% lower
than the prior year period (GBP20.8 million). The Group's year on
year sales volume decreased slightly by 479 ounces. The average
realised gold price was US$1,264 per ounce in the half year ended
February 2014 compared to US$1,681 per ounce in the same period in
2013, which adversely affected revenue.
Cost of Sales and Operating Expenses
Excluding the impact of foreign exchange, cost of sales and
operating expenses showed a decrease of 12% compared the same
period in 2013. This was in line with a general decrease in total
tonnes mined during 2014.
The negative impact from the foreign exchange loss meant the
overall Cost of Sales and Operating Expenses increased to GBP24.2
million in the half year ended February 2014 from GBP23.1 million
during the same period last year.
Cost of Sales and Operating Half Year ended 28 Half Year ended 28
Expenses February 2014 February 2013
-------------------------------
(GBP'000) (GBP'000)
------------------------------- ------------------- -------------------
Mining (9,595) (11,620)
Processing (4,030) (4,561)
Overheads (2,939) (3,142)
Gold Duty (394) (583)
Administrative expenses (979) (1,236)
Foreign exchange (loss) /gain (2,603) 1,532
Depreciation and amortisation (3,656) (3,486)
------------------------------- ------------------- -------------------
Total (24,196) (23,096)
------------------------------- ------------------- -------------------
Depreciation and amortisation was GBP3.7 million for the half
year ended 28 February 2014, similar to the same period last year
(GBP3.5 million).
Cash Costs
Cash costs per ounce sold for the half year ending 28 February
2014 were US$1,463 per ounce sold (2013: US$1,634 per ounce). This
is mainly driven by the 10% increase in grade delivered to the mill
which decreased the cash cost per ounce by approximately US$131 per
ounce of gold shipped.
Cash Costs Half Year ended Half Year ended
28 February 2014 28 February 2013
------------------------------------------- ------------------ ------------------
Mining (GBP'000) (9,595) (11,620)
Processing (GBP'000) (4,030) (4,561)
Overheads (GBP'000) (2,939) (3,142)
Gold duty (GBP'000) (394) (583)
Mine administrative costs (GBP'000) (943) (209)
Total cash costs of production (GBP'000) (17,901) (20,115)
GBGBP / US$ foreign exchange rate 0.64 0.63
Gold sold (Oz) 19,116 19,595
Tonnes mined and milled 174,010 216,860
Cash cost per ounce sold (US$ / Oz) 1,463 1,635
Cash cost per tonne mined and milled (US$
/ tonne) 161 148
------------------------------------------- ------------------ ------------------
Administrative Expenses
Administrative expenses totalled GBP0.9 million for the half
year ended 28 February 2014, which was a 21% decrease in costs from
the same period in the prior year of GBP1.2 million. The
administrative expenses are those costs associated with maintaining
the London office and the administrative expenses in Fiji. Costs
include salaries, office rent, regulatory, audit, legal fees and
investor related expenses.
Exploration and Resource Definition Costs
As highlighted in the operations review we have curtailed our
capital expenditure and incurred GBP63,000 exploration and resource
definition costs compared to the GBP1.0 million in the same period
last year. All the exploration and resource definition costs were
capitalised as an Intangible Asset in accordance with the
requirements of IFRS 6 Exploration for and Evaluation of Mineral
Assets.
Taxation and Other Expenses
During the period the Company had a tax credit of GBP0.2 million
(HY 2013: GBP0.2 million). This tax credit arises as a result of
the release of the deferred tax liability. Other expenses amounted
to GBP40,000 in the half year ended 28 February 2014 (HY2013:
GBP231,000), mostly due to a significant doubtful debt provision in
2013.
Cash Flow
Net cash used in operating activities was GBP4.5 million for the
half year ended 28 February 2014, an increase of GBP4.8 million
compared to the same period last year (cash generated of GBP0.3
million). Prior to working capital movements the net operating loss
was GBP2.3 million compared to GBP0.004 million in the same period
last year. The net operating loss before changes in working capital
was increased by the changes in working capital which used GBP2.2
million (HY 2013: generated GBP0.3 million). These changes in
working capital were a result of an increase in inventories of
GBP0.8 million, an increase in receivables of GBP0.3 million and a
decrease in accounts payable of GBP1.1 million.
Cash flow used in investing activities equated to GBP6.1 million
for the year which represents a 16% decrease from the same period
last year of GBP7.3 million. Of the GBP6.1 million used in
investing activities GBP0.4 million (HY 2013: GBP1.1 million) was
used in the purchase of plant and equipment and GBP5.7 million (HY
2013: GBP6.2 million) was used in underground development and
resource / exploration drilling.
Cash provided by financing activities was GBP13.0 million (HY
2013: GBP6.7 million), mostly through the issuance of shares. As of
28 February 2014 the Group had cash and cash equivalents of GBP2.9
million (HY 2013: GBP2.2 million).
Change in Year End
In order to make further savings in both administrative and
regulatory costs, the Company has resolved to align its year end
with its majority shareholder, Zhongrun. Therefore, the financial
year end of the Company will be changing from 31 August to 31
December. The Company will release a further set of interims for
the six months from January 2014 to June 2014 which will be
published by 30 September 2014. In addition, the Company will
report for the 16 months from September 2013 to December 2014 as a
transitional financial period, and thereafter for the 12 month
period ending 31 December each year.
Post period events
As announced in March 2014 Zhongrun informed the Company that
Chinese regulatory approval had been granted for the advance of the
second tranche of US$20 million of secured loan notes ("Loan
Notes"). The Company and Zhongrun have agreed to vary the terms of
the US$20 million loan notes, to match the cashflow requirements of
the operations at the Vatukoula Gold Mine. In this regard the
schedule of payments from Zhongrun will occur in three tranches,
with the first received by no later than the end of April and the
last in June. Each tranche will be no less than US$ 4 million and
will total US$20 million.
As of 30 April 2014 and the publication of this document the
Company has received a total of $4.6m with US$2 million in cash, a
further US$1 in underwriting guarantees for the purchase of an
additional four underground haulage trucks and two underground
loaders and US$1.6 million deposit paid on its behalf for
additional resource development drilling.
Outlook
The long term future of profitable mining operations at
Vatukoula requires access to new sections of existing ore bodies.
Accessing these ore bodies is the key part of our capital
investment programme. In addition, to this we will need to carry
out an extensive drilling programme to better define the ore
bodies, an upgrade and expansion of our heavy vehicle fleet, the
construction of an additional tailings dam and other ancillary
capital projects.
However, the historical delays in financing and the change in
the delivery dates of the US$ 20 million loan notes, have meant
that we have been unable to progress as quickly as we would like
with the expenditure on plant property and equipment. This is turn
has meant that production guidance for the financial year ending
August 2014 will be approximately 40,000 ounces as previously
advised.
Y.B. Ian He
20 May 2014
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME (unaudited)
VATUKOULA GOLD MINES PLC 6 months 6 months
28 Feb 28 Feb
Notes 2014 2013
GBP'000 GBP'000
--------------------------------------------------- ------ ------------ ---------
Turnover 3 15,046 20,822
Cost of sales (16,958) (19,906)
Gross (loss) / profit for the period (1,912) 916
--------------------------------------------------- ------ ------------ ---------
Operating expenses
Administrative expenses (979) (1,236)
Foreign exchange (loss) / gain (2,603) 1,532
Depreciation and amortisation expense (3,656) (3,486)
Underlying operating loss (9,150) (2,274)
--------------------------------------------------- ------ ------------ ---------
Impairment charge - -
Inventory obsolescence provision - 8
Gain on disposal of assets - 29
Provision for doubtful debt expense - (172)
Share based payments expense (41) (96)
Operating loss (9,191) (2,505)
--------------------------------------------------- ------ ------------ ---------
Interest receivable and other income 5 2
Interest payable and similar charges (180) (137)
--------------------------------------------------- ------ ------------ ---------
Net loss before taxation (9,366) (2,640)
--------------------------------------------------- ------ ------------ ---------
Taxation 160 182
--------------------------------------------------- ------ ------------ ---------
Loss for the period (9,206) (2,458)
--------------------------------------------------- ------ ------------ ---------
Attributable to:
Owners of the Parent (9,206) (2,458)
Non-Controlling interest - -
--------------------------------------------------- ------ ------------ ---------
(9,206) (2,458)
Other comprehensive expenses
Currency translation differences (301) (509)
--------------------------------------------------- ------ ------------ ---------
Total comprehensive loss (9,507) (2,967)
--------------------------------------------------- ------ ------------ ---------
Attributable to:
Owners of the Parent (9,507) (2,967)
Non-Controlling interest - -
--------------------------------------------------- ------ ------------ ---------
Loss per share
--------------------------------------------------- ------ ------------ ---------
Pence Pence
Basic 5 (3.25) (2.72)
Diluted 5 (3.25) (2.72)
--------------------------------------------------- ------ ------------ ---------
All activities relate to continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL (audited)
POSITION (unaudited)
28 Feb 31 Aug
VATUKOULA GOLD MINES PLC Notes 2014 2013
GBP'000 GBP'000
----------------------------------------------- ------ ------------ ----------
Assets
Non-current assets
Intangible assets 6 31,703 32,758
Property, plant and equipment 7 20,663 23,604
Mine properties and development 8 23,361 19,913
----------------------------------------------- ------ ------------ ----------
Total non-current assets 75,727 76,275
----------------------------------------------- ------ ------------ ----------
Current assets
Inventories 6,498 6,558
Trade and other receivables 2,985 3,008
Cash and cash equivalents 2,927 617
----------------------------------------------- ------ ------------ ----------
Total current assets 12,410 10,183
----------------------------------------------- ------ ------------ ----------
Total Assets 88,137 86,458
----------------------------------------------- ------ ------------ ----------
Current liabilities
Trade and other payables 6,461 8,404
Provisions 1,087 1,261
Borrowings 125 62
Vatukoula Social Assistance Trust Fund 1,058 1,127
Convertible loan 333 347
----------------------------------------------- ------ ------------ ----------
`
Total current liabilities 9,064 11,201
----------------------------------------------- ------ ------------ ----------
Non-current Liabilities
Provisions 4,574 4,751
Convertible loan - -
Vatukoula Social Assistance Trust Fund 15 15
Deferred tax liability 5,409 5,569
----------------------------------------------- ------ ------------ ----------
Total non-current liabilities 9,998 10,335
----------------------------------------------- ------ ------------ ----------
Shareholders' Equity
Share capital 10 17,213 7,768
Share premium account 94,711 91,139
Merger reserve 2,167 2,167
Foreign exchange reserve 1,369 1,068
Other reserves 3,108 3,067
Accumulated losses (49,493) (40,287)
----------------------------------------------- ------ ------------ ----------
Total shareholders' equity 69,075 64,922
----------------------------------------------- ------ ------------ ----------
Total liabilities and shareholders' equity 88,137 86,458
----------------------------------------------- ------ ------------ ----------
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS (unaudited) (unaudited)
VATUKOULA GOLD MINES PLC 6 months 6 months
28 Feb 28 Feb
Notes 2014 2013
GBP'000 GBP'000
---------------------------------------------- ------ ------------ ------------
Cash flows from operating activities
Operating loss for the period: (9,191) (2,505)
Adjustments for:
Share based payments 41 96
Depreciation and amortisation 3,656 3,486
Impairment - -
Gain on disposal of assets - (29)
Inventory obsolescence provision - (8)
Foreign exchange losses / (gains) 3,354 (1,105)
Provision for doubtful debt expense - 172
Provision for mine rehabilitation - -
Movements in Employment Provisions (134) (111)
---------------------------------------------- ------ ------------ ------------
Net operating loss before changes in working
capital (2,274) (4)
---------------------------------------------- ------ ------------ ------------
Payment to Vatukoula Social Assistance - -
Trust Fund
(Increase) / decrease in inventories (792) 368
(Increase) / decrease in receivables (321) 1,825
Decrease in accounts payable (1,068) (1,846)
---------------------------------------------- ------ ------------ ------------
Net cash (used) / generated in operating
activities (4,455) 343
---------------------------------------------- ------ ------------ ------------
Cash flows from investing activities
Payments for intangible assets (63) (997)
Purchase of property plant and equipment (429) (1,096)
Payments for mine properties and development (5,647) (5,242)
Proceeds from disposals of property plant
and equipment - 29
Interest received 5 2
---------------------------------------------- ------ ------------ ------------
Net cash used in investing activities (6,134) (7,304)
---------------------------------------------- ------ ------------ ------------
Cash flows before financing (10,589) (6,961)
---------------------------------------------- ------ ------------ ------------
Cash flows from financing activities
Proceeds from issuance of shares 10 13,017 6,600
Interest paid (44) (126)
Proceeds from borrowings 63 174
---------------------------------------------- ------ ------------ ------------
Net cash provided by financing activities 13,036 6,648
---------------------------------------------- ------ ------------ ------------
Net increase / (decrease) in cash and cash
equivalents 2,447 (313)
---------------------------------------------- ------ ------------ ------------
Cash and cash equivalents at beginning
of the period 617 2,437
Effect of foreign exchange on cash and
cash equivalents (137) 43
---------------------------------------------- ------ ------------ ------------
Cash and cash equivalents at end of the
period 2,927 2,167
---------------------------------------------- ------ ------------ ------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
VATUKOULA GOLD
MINES
PLC (unaudited)
Share Equity
Ordinary Foreign based component
share Share Merger exchange payment of convertible Accumulated
capital premium reserve reserve reserve loan note losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- --------- --------- --------- ---------- --------- ---------------- ------------ ------------
Balance at 1
September
2013 7,768 91,139 2,167 1,068 3,022 45 (40,287) 64,922
Loss for the
period - - - - - - (9,206) (9,206)
Other
comprehensive
income
- Currency
translation
differences - - - 301 - - - 301
Total
comprehensive
income - - - 301 - - (9,206) (8,905)
---------------- --------- --------- --------- ---------- --------- ---------------- ------------ ------------
Issue of shares 9,445 3,572 - - - - - 13,017
Cost of share - - - - - - - -
issue
Share option - - - - - - - -
expired
Convertible - - - - - - - -
loan
Share based
payments - - - - 41 - - 41
Balance at 28
February
2014 17,213 94,711 2,167 1,369 3,063 45 (49,493) 69,075
---------------- --------- --------- --------- ---------- --------- ---------------- ------------ ------------
Share Equity
Ordinary Foreign based component
share Share Merger exchange payment of convertible Accumulated
capital premium reserve reserve reserve loan note losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------- --------- --------- ---------- --------- ---------------- ------------ ---------
Balance at 1
September
2012 4,828 81,659 2,167 1,022 2,837 45 (24,623) 67,935
Profit for the
year - - - - - - (2,458) (2,458)
Other
comprehensive
income
- Currency
translation
differences - - - 509 - - - 509
Total
comprehensive
income - - - 509 - - (2,458) (1,949)
------------------- --------- --------- --------- ---------- --------- ---------------- ------------ ---------
Issue of shares 1,000 5,600 - - - - - 6,600
Cost of share - - - - - - - -
issue
Share option - - - - - - - -
expired
Convertible loan - - - - - - - -
Share based
payments - - - - 96 - - 96
Balance at 28
February
2013 5,828 87,259 2,167 1,531 2,933 45 (27,081) 72,682
------------------- --------- --------- --------- ---------- --------- ---------------- ------------ ---------
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014
1. General information
Vatukoula Gold Mines Plc. is registered in England and Wales
under number 5059077. The Company is governed by its articles of
association and the principal statute governing the Company is the
Companies Act 2006. The Company's registered office is at 2 More
London Riverside, London, SE1 2AP. The company is listed on the AIM
market of the London Stock Exchange. The principal activity of the
Group is the mining of gold ore and the refining of the ore into
gold Dore bars which are sold to be smelted into gold.
2. Basis of preparation
The interim condensed consolidated financial statements have
been prepared in accordance with International Accounting Standard
34, Interim Financial Reporting.
These interim condensed consolidated financial statements are
unaudited and does not constitute statutory financial statements.
The interim condensed consolidated financial statements incorporate
the results of the Group for the period from 1 September 2013 to 28
February 2014. The results for the year ended 31 August 2013 have
been extracted from the statutory financial statements for
Vatukoula Gold Mines plc. for the year ended 31 August 2013 which
are prepared under International Financial Reporting Standards
("IFRS") as adopted by the European Union. The interim financial
information should be read in conjunction with the annual financial
statements for the year ended 31 August 2013.
The same accounting policies, presentations and methods of
computation have been followed in these condensed financial
statements as were applied in the preparation of the Group's
financial statements for the year ended August 2013.
These financial statements have been prepared on a going concern
basis, on the assumption that the Group and the Company will
generate adequate cash flows from operations and receive continuing
financial support from the majority shareholder of the Company in
accordance with its financing agreements.
3. Turnover and Segmental Analysis
All turnover in the Group in the current and prior period is
derived from the sales to one customer, which is included in the
Gold Mining Segment.
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014
3. Turnover and Segmental Analysis (continued)
SEGMENTAL ANALYSIS
VATUKOULA GOLD MINES PLC Unattributed
28 Feb 2014 Head Office Gold Other
(unaudited) Costs Mining Activity Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------------- --------- --------- ---------
Turnover - 15,046 - 15,046
------------------------------- ------------- --------- --------- ---------
Mining - (9,595) - (9,595)
Processing - (4,030) - (4,030)
Gold duty - (394) - (394)
Overheads - (2,939) - (2,939)
------------------------------- ------------- --------- --------- ---------
Cost of sales - (16,958) - (16,958)
------------------------------- ------------- --------- --------- ---------
Gross Profit - (1,912) - (1,912)
------------------------------- ------------- --------- --------- ---------
Administrative expenses (593) (336) (50) (979)
Foreign exchange losses - (2,603) - (2,603)
Depreciation and amortisation (799) (2,851) (6) (3,656)
------------------------------- ------------- --------- --------- ---------
Underlying operating loss (1,392) (7,702) (56) (9,150)
------------------------------- ------------- --------- --------- ---------
Inventory obsolescence - - - -
Gain on disposal of assets - - -
Impairment charge - - - -
Provision for doubtful - - -
debt -
Share based payments (3) (38) - (41)
------------------------------- ------------- --------- --------- ---------
Operating loss (1,395) (7,740) (56) (9,191)
------------------------------- ------------- --------- --------- ---------
Interest receivable and
other income 5 - - 5
Interest payable and similar
charges (24) (156) - (180)
------------------------------- ------------- --------- --------- ---------
Net loss before taxation (1,414) (7,896) (56) (9,366)
------------------------------- ------------- --------- --------- ---------
Taxation 160 - - 160
------------------------------- ------------- --------- --------- ---------
Loss for the period (1,254) (7,896) (56) (9,206)
------------------------------- ------------- --------- --------- ---------
Other Segment Items
Additions to intangible
assets - 63 - 63
Additions to property,
plant, and equipment - 429 - 429
Additions to mine properties
and development - 5,647 - 5,647
------------------------------- ------------- --------- --------- ---------
Current assets 2,093 10,270 47 12,410
Non currents assets 27,047 48,527 153 75,727
------------------------------- ------------- --------- --------- ---------
Current liabilities (539) (8,520) (5) (9,064)
Noncurrent liabilities (5,419) (4,579) - (9,998)
------------------------------- ------------- --------- --------- ---------
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014
3. Turnover and Segmental Analysis (continued)
Unattributed
28 Feb 2013 Head Office Gold Other
(Unaudited) Costs Mining Activity Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------------- --------- --------- ---------
Turnover - 20,822 - 20,822
------------------------------- ------------- --------- --------- ---------
Mining - (11,620) - (11,620)
Processing - (4,561) - (4,561)
Gold duty - (583) - (583)
Overheads - (3,142) - (3,142)
------------------------------- ------------- --------- --------- ---------
Cost of sales - (19,906) - (19,906)
------------------------------- ------------- --------- --------- ---------
Gross Profit - 916 - 916
------------------------------- ------------- --------- --------- ---------
Administrative expenses (943) (209) (84) (1,236)
Foreign exchange gains - 1,532 - 1,532
Depreciation and amortisation (793) (2,685) (8) (3,486)
------------------------------- ------------- --------- --------- ---------
Underlying operating loss (1,736) (446) (92) (2,274)
------------------------------- ------------- --------- --------- ---------
Inventory obsolescence - 8 - 8
Gain on disposal of assets - 29 29
Provision for doubtful
debt - (172) - (172)
Share based payments - (96) - (96)
------------------------------- ------------- --------- --------- ---------
Operating loss (1,736) (677) (92) (2,505)
------------------------------- ------------- --------- --------- ---------
Interest receivable and
other income 2 - - 2
Interest payable and similar
charges (23) (114) - (137)
------------------------------- ------------- --------- --------- ---------
Net loss before taxation (1,757) (791) (92) (2,640)
------------------------------- ------------- --------- --------- ---------
Taxation 182 - - 182
------------------------------- ------------- --------- --------- ---------
Loss for the period (1,575) (791) (92) (2,458)
------------------------------- ------------- --------- --------- ---------
Other Segment Items
Additions to intangible
assets - 997 - 997
Additions to property,
plant, and equipment - 1,096 - 1,096
Additions to mine properties
and development - 5,242 - 5,242
------------------------------- ------------- --------- --------- ---------
Current assets 684 13,486 173 14,343
Non currents assets 28,644 50,804 188 79,636
------------------------------- ------------- --------- --------- ---------
Current liabilities (807) (10,352) 8 (11,151)
Non current liabilities (6,575) (3,571) - (10,146)
------------------------------- ------------- --------- --------- ---------
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014
4. Results for the period
The Interim results are not affected by seasonality or
cyclicity.
5. Earnings per share
(a) Basic
Basic loss per share is calculated by dividing the loss for the year
from continuing operations of the Group by the weighted average number
of ordinary shares in issue during the year
The calculation of consolidated loss per share is based on the following
loss and number of shares:
2014 2013
GBP'000 GBP'000
------------------------------------------------- ------------- ------------
Loss after tax (9,206) (2,458)
------------------------------------------------- ------------- ------------
2014 2013
Number Number
------------------------------------------------- ------------- ------------
Basic weighted average ordinary shares in
issue during the period 282,834,334 90,509,159
------------------------------------------------- ------------- ------------
2014 2013
Pence Pence
------------------------------------------------- ------------- ------------
Basic loss per share (3.25) (2.72)
------------------------------------------------- ------------- ------------
(b) Diluted
All potential shares were anti-dilutive as the Group was in a loss
making position. As a result diluted loss per share for the periods
ended 28 February 2014 and 28 February 2013 is disclosed as the same
value as basic loss per share. The diluted weighted average ordinary
shares in issue during the period were 282,834,334 (2013: 90,509,159).
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014
6. Intangible assets
Mining Computer Exploration
Rights Software expenditure Total
Group GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- --------- ------------ --------
Cost
As at 1 September 2013 38,721 522 7,608 46,851
Additions - - 63 63
Disposals - - - -
Transferred from tangible assets - - - -
Exchange difference - (32) (467) (499)
---------------------------------- -------- --------- ------------ --------
As at 28 February 2014 38,721 490 7,204 46,415
---------------------------------- -------- --------- ------------ --------
Amortisation
As at 1 September 2013 10,874 104 3,115 14,093
Current charge 801 15 - 816
Impairment charge - - - -
Exchange difference - (7) (190) (197)
---------------------------------- -------- --------- ------------ --------
As at 28 February 2014 11,675 112 2,925 14,712
---------------------------------- -------- --------- ------------ --------
Carrying value as at 28 February
2014 27,046 378 4,279 31,703
---------------------------------- -------- --------- ------------ --------
Mining Computer Exploration
Rights Software expenditure Total
Group GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- --------- ------------ --------
Cost
As at 1 September 2012 38,721 551 6,933 46,205
Additions - - 1,085 1,085
Disposals - - - -
Transferred from tangible assets - - - -
Exchange difference - (29) (410) (439)
---------------------------------- -------- --------- ------------ --------
As at 31 August 2013 38,721 522 7,608 46,851
---------------------------------- -------- --------- ------------ --------
Amortisation
As at 1 September 2012 9,284 80 - 9,364
Current charge 1,590 30 - 1,620
- - 3,264 3,264
Exchange difference - (6) (149) (155)
---------------------------------- -------- --------- ------------ --------
As at 31 August 2013 10,874 104 3,115 14,093
---------------------------------- -------- --------- ------------ --------
Carrying value as at 31 August
2013 27,847 418 4,493 32,758
---------------------------------- -------- --------- ------------ --------
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014
6. Intangible assets (continued)
The Mining rights represent the mining rights acquired on the
acquisition of the Vatukoula Gold Mine in April 2008. The
amortisation of the Mining Rights is calculated on a unit of
production basis, based on forecast production and the total
Mineral Reserves. At the current production, reserves and gold
price, the useful economic life is expected to be 7 years. This
rate will vary from year to year and is dependent on the mineral
reserves which are reassessed every year. Amortisation is included
in depreciation and amortisation in the Statement of Comprehensive
Income.
For the year ended August 2013 the directors carried out an
impairment review. As in previous years, this was based on an
estimate of discounted future cash flows from the development and
operation of the Vatukoula Gold Mine. The directors have used past
experience and an assessment of future conditions, together with
external sources of information, to determine the assumptions which
were adopted in the preparation of a financial model to estimate
the cashflows.
The recoverable amount of the mine is determined by using a net
present value calculation based on the estimated
economically recoverable portion of the total Mineral Resource
and the life of mine plan. The life of mine plan is currently 7
years. This Mineral Resource is used rather than the Mineral
Reserve as the Mineral Reserve will not represent the total
recoverable amount from the mine. This is because it excludes ore
deposits that are above the economic cut off grade within the
Inferred Mineral Resource category.
The key assumptions therein are those regarding discount rates,
and expected changes to selling prices and direct costs during the
period. Management estimates discount rates using pre-tax rates
that reflect current market assessments of the time value of money
and the risks specific to the mine and the rate used was 10%.
The production is based on the directors' forecast of the mine's
maximum output and based on the mine achieving its operating
capacity. The directors believe this rate is justified based on the
current progress of the mine. A deferred tax liability of
GBP10,757,000 arose in 2008 in respect of the intangible assets
recognised on the acquisition in the prior periods. The deferred
tax liability is in respect of future taxable profits potentially
generated from the exploration of the mining rights.
The Exploration expenditure is an internally generated
intangible asset, and represents costs associated with the
exploration and evaluation of mineral deposits on our mining and
special prospecting licenses and are capitalised under IFRS 6. The
directors believe that there are no indicators of impairment.
The Computer Software expenditure represents the costs
associated with the purchase of specialised mining and inventory
software.
.
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014
7. Property, plant and equipment
Freehold Fixtures
and leasehold Work Plant Motor Mine fittings
land in progress and machinery vehicles assets and equipment Total
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
Cost
As at 1 September
2013 975 1,591 33,669 347 3,268 143 39,993
Additions - 429 - - - - 429
Transferred on
completion - (711) 711 - - - -
Disposals - - - - - - -
Exchange
difference (55) (81) (3,084) (8) (200) (1) (3,429)
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
As at 28 February
2014 920 1,228 31,296 339 3,068 142 36,993
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
Accumulated
depreciation
As at 1 September
2013 29 - 15,529 232 502 97 16,389
Charge for the
period 5 - 1,970 1 53 - 2,029
Disposals - - - - - - -
Exchange
difference (2) - (2,049) (4) (32) (1) (2,088)
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
As at 28 February
2014 32 - 15,450 229 523 96 16,330
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
Net book value
At 28 February
2014 888 1,228 15,846 110 2,545 46 20,663
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
At 31 August 2013 946 1,591 18,140 115 2,766 46 23,604
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
Freehold Fixtures
and leasehold Work Plant Motor Mine fittings
land in progress and machinery vehicles assets and equipment Total
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
Cost
As at 1 September
2012 1,024 2,572 33,466 341 1,998 145 39,546
Additions - 2,216 - 26 - - 2,242
Transferred on
completion - (3,109) 3,109 - - - -
Disposals - - (169) - - - (169)
Changes in
estimates - - - - 1,374 - 1,374
Exchange
difference (49) (88) (2,737) (20) (104) (2) (3,000)
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
As at 31 August
2013 975 1,591 33,669 347 3,268 143 39,993
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
Accumulated
depreciation
As at 1 September
2012 13 - 13,021 238 463 98 13,833
Charge for the
period 17 - 4,436 3 66 1 4,523
Disposals - - (169) - - - (169)
Exchange
difference (1) - (1,759) (9) (27) (2) (1,798)
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
As at 31 August
2013 29 - 15,529 232 502 97 16,389
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
Net book value
At 31 August 2013 946 1,591 18,140 115 2,766 46 23,604
------------------ --------------- ------------- --------------- ---------- --------- --------------- ---------
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014
8. Mine properties and development
2014 2013
GBP'000 GBP'000
----------------------------- -------- --------
Cost
Balance as at 1 September 23,272 13,865
Additions 5,647 10,624
Foreign exchange difference (1,622) (1,217)
----------------------------- -------- --------
Balance at end of period 27,297 23,272
----------------------------- -------- --------
Depreciation
Balance as at 1 September 3,359 2,350
Current charge 811 1,185
Foreign exchange difference (234) (176)
----------------------------- -------- --------
Balance at end of period 3,936 3,359
----------------------------- -------- --------
Carrying value
Balance at end of period 23,361 19,913
----------------------------- -------- --------
9. Provisions
Group
------------------------------------ ------------ -------------------- -------------------------
28-Feb-14 31-Aug-13
GBP'000 GBP'000
------------------------------------ ------------ -------------------- ------------- ----------
Current
Provision for annual leave 245 260
Provision for workers compensation 104 102
Other employee related provisions 738 899
------------------------------------ ------------ -------------------- ------------- ----------
1,087 1,261
------------------------------------ ------------ -------------------- ------------- ----------
Non current
Provision for mine rehabilitation 4,520 4,660
Provision for Long Service Leave 54 91
------------------------------------ ------------ -------------------- ------------- ----------
4,574 4,751
------------------------------------ ------------ -------------------- ------------- ----------
5,661 6,012
------------------------------------ ------------ -------------------- ------------- ----------
Employee
related Long Service
provisions Mine rehabilitation Leave Total
Group GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ ------------ -------------------- ------------- ----------
Balance at 1 September 2013 1,261 4,660 91 6,012
Additional provisions made during
the period (100) - (34) (134)
Reversed during the period - - - -
Unwinding of discount - 150 - 150
Changes in estimates - - - -
Exchange difference (73) (290) (4) (367)
------------------------------------ ------------ -------------------- ------------- ----------
Balance at 28 February 2014 1,088 4,520 53 5,661
------------------------------------ ------------ -------------------- ------------- ----------
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014
9. Provisions (continued)
Employee related provisions include a provision for unpaid
annual leave based on Fijian labour legislation, and a provision
for legally required workers compensation relating to work
injuries. Based on current estimates, these are expected to realise
in approximately 10 years.
The provision for mine rehabilitation represents the current
mine closure plan. The present value of the estimated cost is
capitalised as property, plant and equipment. Over time the
discounted liability will be increased for the change in the
present value based on the discount rates that reflect the current
market assessments and the risks specific to the liability. The
provision for Mine rehabilitation is expected to be expensed over 7
years. This is based on the current economic useful life of seven
years plus a further three years of rehabilitation. The economic
useful life is dependent on the economic viability of extracting
the contained Mineral Reserves and may vary on a year by year basis
dependant on the mining / processing costs and the price of gold.
In addition the quantum of the provision may vary on a year by year
basis dependant on the costs associated with executing the Mine
Rehabilitation Plan.
Long Service Leave is a contractual obligation for additional
leave days earned by employees with 10 years or more service. Based
on current estimates, these are expected to realise in
approximately 10 years.
10. Share capital
(a) Share capital
Group and Company
------------------------------------ ----------------------
28-Feb-14 31-Aug-13
GBP'000 GBP'000
------------------------------------ ---------- ----------
Allotted, issued and fully
paid
344,255,339 ordinary shares
of 5p each
(31 Aug 2013: 155,358,339 ordinary
shares of 5p each) 17,213 7,768
------------------------------------ ---------- ----------
(b) Share issues during the period
The following shares were issued during the period ended 28
February 2014:
Issue Par Value
value value Share of shares
per per premium Share Share issued
Share Share per Share Shares Capital premium for cash
Date GBP GBP GBP GBP GBP GBP
---------------- ------------ ------- ------- ----------- ------------ ---------- ---------- -----------
Shares issued
for cash
Issue for cash 21/10/2013 0.07 0.05 0.02 90,000,000 4,500,000 1,701,000 6,201,000
Issue for cash 05/11/2013 0.07 0.05 0.02 98,897,000 4,944,850 1,870,854 6,815,704
188,897,000 9,444,850 3,571,854 13,016,704
----------------------------- ------- ------- ----------- ------------ ---------- ---------- -----------
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014
10. Share capital (continued)
(c) Warrants and options
During the period ending 28 February 2014 the following
movements occurred on the warrants and options to purchase 5p
ordinary shares in Vatukoula Gold Mines Plc.
Average Number
exercise of
price Number Number Number Number Number Number warrants Number Number
per of of of of of of and of of
share options options options options options options options options options
Exercise
price GBP0.50 GBP0.70 GBP0.88 GBP0.90 GBP0.95 GBP0.97 GBP1.00 GBP1.39 GBP1.75 Total
----------- ------------------ --------- --------- --------- --------- --------- --------- ----------- --------- --------- -----------
Balance at
1
September
2013 1.1 863,000 360,000 235,000 400,000 365,000 700,000 4,200,000 484,112 800,000 8,407,112
Granted
during
the period - - - - - - - - - - -
Exercised
during
the period - - - - - - - - - - -
Expired
during
the period - - - - - - - - - - -
----------- ------------------ --------- --------- --------- --------- --------- --------- ----------- --------- --------- -----------
Balance at
28
February
2014 1.1 863,000 360,000 235,000 400,000 365,000 700,000 4,200,000 484,112 800,000 8,407,112
----------- ------------------ --------- --------- --------- --------- --------- --------- ----------- --------- --------- -----------
Average Number
exercise of
price Number Number Number Number Number Number warrants Number Number
per of of of of of of and of of
share options options options options options options options options options
Exercise
price GBP0.50 GBP0.70 GBP0.88 GBP0.90 GBP0.95 GBP0.97 GBP1.00 GBP1.39 GBP1.75 Total
----------- ------------------ --------- --------- --------- --------- --------- --------- ----------- --------- --------- -----------
Balance at
1
September
2012 1.1 863,000 360,000 235,000 400,000 365,000 700,000 4,200,000 484,112 800,000 8,407,112
Granted
during
the period - - - - - - - - - - -
Exercised
during
the period - - - - - - - - - - -
Expired
during
the period - - - - - - - - - - -
----------- ------------------ --------- --------- --------- --------- --------- --------- ----------- --------- --------- -----------
Balance at
31
August
2013 1.1 863,000 360,000 235,000 400,000 365,000 700,000 4,200,000 484,112 800,000 8,407,112
----------- ------------------ --------- --------- --------- --------- --------- --------- ----------- --------- --------- -----------
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014
11. Post balance sheet events
On 31 March 2014 the Company announced an update on the
investment agreement with Zhongrun International Mining Co. Ltd to
provide US$ 40 million of funding to implement the capital
investment plan at the Vatukoula Gold Mine previously announced on
12 August 2013. As announced on 5 November 2013, the US$ 20 million
equity component was completed. Zhongrun informed the Company the
second tranche of US$20 million of secured loan notes was delayed
until the approval of the State Administration of Foreign Exchange
(SAFE) of the People's Republic of China was granted.
The Company and Zhongrun have agreed to vary the terms of the
Loan Notes, to match the cashflow requirements of the operations at
the Vatukoula Gold Mine in Fiji. In this regard the schedule of
payments from Zhongrun will occur in three tranches.
As to date, a total of US$4.6 million of the debt funding has
been received.
12. Capital Commitments
Capital commitments as at 28 February 2014 amounted to
GBP1,022,076 (31 August 2013; GBP438,900). These commitments are in
relation to projected expenditure on mine properties and
development.
13. Related party transactions
No related party transactions occurred since the end of last
annual reporting period.
14. Contingent liabilities
No significant changes in contingent liabilities occurred since
the end of last annual reporting period.
15. Cautionary Statement
The interim results announcement contains forward looking
statements. These have been made by the Directors in good faith
based on the information available to them up to the time of their
approval of this report. The Directors can give no assurance that
these expectations will prove to have been correct. Due to the
inherent uncertainties, including both economic and business risk
factors underlying such forward looking information, actual results
may differ materially from those expressed or implied by these
forward looking statements. The Directors undertake no obligation
to update any forward looking statements whether as a result of new
information, future events or otherwise.
There are a number of potential risks and uncertainties which
could have a material impact on the Group's performance over the
remainder of the financial year and could cause actual results to
differ materially from expected and historical results. These
include but are not limited to, competitor activity and competition
risk, changes in foreign exchange and commodity price and the
political and economic risks of operating in Fiji.
16. Approval of interim financial statements
The interim financial statements for the six months ended 28
February 2014 were approved by the board of directors on 20 May
2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR VBLBLZEFFBBZ
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