| Fri 30 Mar 2007, 15:41 | | AFO - Aflease Gold - Group Financial Statements: Y |
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AFO
AFO
AFO - Aflease Gold - Group Financial Statements: Year Ended 31 December 2006
AFLEASE GOLD LIMITED
(Formerly Sub Nigel Gold Mining Company Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1984/006179/06)
Share Code: AFO & ISIN Code: ZAE000075867
("Aflease Gold")
AFLEASE GOLD LTD (PREVIOUSLY SUB NIGEL GOLD MINING COMPANY LTD) SUMMARIZED
GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2006
Group Balance Sheet Audited Audited
31 December 31 December
2006 2005
R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 166,971 3,844
Asset retirement fund 705 656
Amounts due from related parties 72 5,677
167,748 10,177
Current assets
Inventories 289 -
Accounts receivables and prepayments 5,973 670
Cash and cash equivalents 65,479 219
71,741 889
Total assets 239,489 11,066
SHAREHOLDERS` EQUITY
Share capital and share premium 220,046 16,270
Contributed surplus 1,762 -
Accumulated deficit (44,687) (21,465)
177,121 (5,195)
LIABILITIES
Non-current liabilities
Amounts owing to related parties 1,265 14,957
Asset retirement obligation 2,572 1,127
Deferred taxation 31,411 -
35,248 16,084
Current liabilities
Trade and other payables 25,235 176
Provisions 1,885 -
27,120 176
Total equity and liabilities 239,489 11,066
Group Income Statement for the year ended
Audited Audited
31 December 31 December
2006 2005
12 months 12 months
Notes R`000 R`000
- -
Revenue
Cost of Sales -
Gross loss - -
Sundry income 301 -
General and administrative
expenditure (13,165) (955)
Share options expensed (1,762) -
Exploration and pre-feasibility
expenditure (9,979) -
Operating loss (24,605) (955)
Finance income 1,804 77
Finance costs (88) (143)
Finance income - net 1,716 (66)
Loss on disposal of investments - (391)
Loss before income taxes (22,889) (1,412)
Income tax expense (333) -
Net loss (23,222) (1,412)
Loss per share (cents) 1
- Basic and headline (5.16) (0.42)
- Diluted (5.08) (0.42)
Group Statement of Changes in Equity
For the year ended 31 December 2006
Share capital
and share Contributed Accumulated
premium surplus deficit Total
R`000 R`000 R`000 R`000
Balance at 1
January 2005 16,270 - (20,053) (3,783)
Net loss for the
period - - (1,412) (1,412)
Balance at 31
December 2005 16,270 - (21,465) (5,195)
Share issues 207,690 - - 207,690
Share option
scheme - 1,762 - 1,762
Transaction cost (3,914) - - (3,914)
Net loss for the
period - - (23,222) (23,222)
Balance at 31
December 2006 220,046 1,762 (44,687) 177,121
Group Cash Flow Statement
Audited Audited
31 December 31 December
R`000 R`000
2,190 6,750
Cash utilised by operating activities
Cash utilised by operating activities 807 6,816
Finance income 1,804 77
Finance costs (88) (143)
Taxation paid (333) -
Cash (expended on) investment activities (51,136) (43)
Additions to property, plant and equipment (51,087) -
Increase in investments (49) (43)
Cash flow from financing activities 114,206 (6,680)
Proceeds from issue of shares 110,473 -
Business combination 11,820 -
Decrease in long-term liabilities - (921)
Decrease in amounts due to related parties (8,087) (5,759)
Movement in cash and cash equivalents 65,260 27
Cash and cash equivalents at beginning of
period 219 192
Cash and cash equivalents at end of period 65,479 219
NOTES TO THE SUMMARIZED GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 31
DECEMBER 2006
1. Basis of preparation
The summarized group financial statements of Aflease Gold Limited (previously
Sub Nigel Gold Mining Company Ltd) and its subsidiaries have been prepared in
accordance with IAS34: Interim financial reporting. The summarized group
financial statements cover the 12 months period ended 31 December 2006. These
summarized group financial statements are prepared on the historical cost basis
and are consistent with those of the previous year.
1. Loss per share
Basic, diluted and headline loss per share is reconciled as follows:
Audited Audited
31 December 31 December
2006 2005
Loss and headline loss (22,889) (1,412)
443,166,965 339,011,680
Weighted average number of shares in issue
Number of shares in issue 473,889,600 85,152,920
Reconciliation of weighted average number of shares
and diluted average
number of shares
Average number of shares 443,166,965 339,011,680
Adjusted for:
Unexercised share options 7,809,906 -
Diluted average number of shares 450,976,871 339,011,680
2. Contingent liabilities and commitments
Audited Audited
31 December 31 December
2006 2005
R`000 R`000
Guarantees 1,325 -
Capital commitments 144,487 1,027
Operating lease commitments 4,025 -
3. Business combinations
In the current financial year the merger between Sub Nigel Gold Mining Company
Ltd and the NKMC Group was accomplished through the issue of shares to Aflease
Gold and Uranium Ltd (now called Uranium One Africa Ltd) in payment for all the
issued and outstanding ordinary shares of NKMC Group and all amounts due by
NKMC Group to Aflease Gold and Uranium Ltd.
At a special meeting held on 10 January 2006 the shareholders voted in favour
of the merger of the New Kleinfontein Mining Company Ltd Group (NKMC Group) of
companies and Sub Nigel Gold Mining Company Ltd. The latter was renamed Aflease
Gold Ltd. 339 011 680 Sub Nigel Gold Mining Company Ltd shares were issued as
purchase consideration to Aflease Gold and Uranium Ltd. Following the issue of
these shares Sub Nigel gold Mining Company Ltd became an 80% subsidiary of
Aflease Gold and Uranium Ltd. In terms of IFRS 3, Business combinations, this
merger is accounted for as a reverse acquisition.
In line with the guidance provided by IFRS 3 the financial results reported
prior to the effective date of the transaction are those of the acquirer (NKMC
Group) and those subsequent to the effective date of the transaction are those
of the combined entity.
Due to the reasons listed above, the comparative information published in these
financial statements differ from those previously published.
Except for the cash taken over, this transaction has been excluded from the
cash flow statement, as it did not result in an exchange for cash.
The aggregate fair values of the assets acquired and liabilities
assumed were as follows:
2006
R`000
Property, plant and equipment 4,755
Undeveloped properties 108,313
Loan account 9,281
Receivables and prepayments 406
Cash and cash equivalents 11,820
Asset retirement obligation (213)
Accounts payable and accrued liabilities (6,533)
Future taxation liability (31,411)
Value of business combination 96,418
Fair value of NKMC Group 228,693
Cash taken over 11,820
Shares consideration (325,111)
Net cash flow 11,820
The consideration was determined by using the weighted average traded price of
Aflease Gold Ltd`s shares over the 30 trading days prior to releasing
information pertaining to this transaction on 23 August 2005.
4. Post balance sheet events
Subsequent to the financial year end New Kleinfontein Goldmine (Pty) Ltd
concluded an agreement whereby it has agreed to sell the remaining extent of
the farm "The Springs No. 129" IR measuring 82.5 hectares.
25,000,000 new shares were issued for cash on 1 March 2007 at an issue price of
R2.88 per share.
5. Audit opinion
These summarized Group financial statements are based on the audited Group
financial statements for the year ended 31 December 2006 as audited by the
Group`s auditors, PricewaterhouseCoopers Inc.
Their unqualified audit opinion is available for inspection at the company`s
registered office.
COMMENTARY FOR THE PERIOD ENDED 31 DECEMBER 2006
Modder East Project
On August 16, 2006, Aflease Gold announced the details of a feasibility study
for the Modder East Gold Project, which was independently audited by SRK
Consulting. The Modder East Feasibility Study used as a base case a gold price
of US$629/oz and an exchange rate of ZAR6.585 per US$1.00. At a real discount
rate of 8%, the Modder East Gold Project is estimated to yield a NPV of
ZAR843.9 million (US$74 million) and an internal rate of return of 31%. Aflease
Gold has been raising funds through the sale of shares, and is expected to
raise project debt financing to implement the Modder East Gold Project.
The mine surface infrastructure has been completed. The infrastructure includes
the run-of-mine water dams, access roads, office and workshop site areas,
control room building, lamp room, change house, explosives magazines and
engineering workshops. The mine site security fencing has been completed and
equipped with the necessary guard post buildings and lighting. The portal of
the decline was completed in Q3 2006 and by December 2006, trackless decline
development had advanced a total of 384 metres.
In December 2006, Aflease Gold announced increased resources and reserves at
Modder East. The reserve increased to 1.37 million contained ounces of gold in
the probable category (a 28% increase) and the resources increased to 2.40
million contained ounces of gold in the indicated category (a 19% increase) and
0.99 million contained ounces of gold in the inferred category (a 3% decrease).
In light of the increase in reserves the August 2006 feasibility study is
currently being updated, with a view to determining the new value of the
Project.
Sub Nigel Project
In December 2006, Aflease Gold announced a revised resource estimate for the
Nigel Reef at Sub Nigel of 1.539Kt grading 4.14 g/t for 205,000 contained
ounces of gold in the indicated category and 139Kt grading 2.99 g/t for 13,000
contained ounces of gold in the inferred category. Aflease Gold has commenced a
pre-feasibility study on the Sub Nigel project.
Signed on behalf of the Board:
NJ Froneman DJ Nortier
(Chief Executive Officer) (Chief Financial Officer)
Johannesburg
30 March 2007
Date: 30/03/2007 15:41:51 Produced by the JSE SENS Department.
