| Tue 8 May 2007, 15:28 | | WGR - Wits Gold - Preliminary Report For The Year |
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WGR
WGR
WGR - Wits Gold - Preliminary Report For The Year Ended 28 February 2007
Witwatersrand Consolidated Gold Resources Limited
"Wits Gold" or "the Company"
Incorporated in the Republic of South Africa
Registration Number 2002/031365/06
Share Code: WGR & ISIN: ZAE000079703
Preliminary report for the year ended 28 February 2007
Preliminary condensed income statement
for the year ended 28 February 2007
2007 2006
Reviewed Audited restated
R R
Revenue - -
Operating loss (19 624 (5 017 253)
582)
Net finance income 2 660 051 1 880 101
Fair value gain on financial 14 226 173 -
asset
Loss for the year before (2 738 358) (3 137 152)
taxation
Taxation - -
Loss for the year (2 738 358) (3 137 152)
Loss per share and diluted loss
per share
Weighted average number of
shares in issue 24 931 013 24 653 106
Basic and headline loss per
share (cents) 10,98 12,73
Diluted weighted average number
of shares in issue 25 218 468 24 991 662
Diluted basic loss per share 16,47 23,99
(cents)
Preliminary condensed balance sheet
as at 28 February 2007
2007 2006
Reviewed Audited restated
R R
Assets
Non-current assets 42 020 577 18 521 734
Current assets 44 324 084 26 156 486
Total assets 86 344 661 44 678 220
Equity and liabilities
Capital and reserves 84 125 950 43 912 855
Current liabilities 2 218 711 765 365
Total equity and liabilities 86 344 661 44 678 220
Net asset value per share 328,48 178,12
(cents)
Number of shares in issue 25 610 988 24 653 106
Preliminary condensed cash flow statement
for the year ended 28 February 2007
2007 2006
Reviewed Audited
restated
R R
Cash flows from operating
activities
Cash utilised in operating (14 014 102) (1 617 693)
activities
Net finance income 2 660 051 1 880 101
Net cash (utilised
in)/generated by operating (11 354 051) 262 408
activities
Cash flows from investing
activities
Net cash utilised in investing
activities (9 389 635) (3 567 833)
Cash flows from financing
activities
Net cash generated by/(utilised
in) financing activities 38 304 313 (1 518 601)
Increase/(decrease) in cash and
cash equivalents 17 560 627 (4 824 026)
Cash and cash equivalents at
the beginning of the year 25 963 176 30 787 202
Cash and cash equivalents at
the end of the year 43 523 803 25 963 176
Statement of changes in equity
for the year ended 28 February 2007
Equity-
settled
share-
Ordinary based
share Share payment
capital premium reserve
R R R
Balance at 28 February 2005
- Audited 246 531 47 092 879 339 500
Loss for the year
Equity-settled share-based
payments 2 194 880
Balance at 28 February 2006
- Audited 246 531 47 092 879 2 534 380
Loss for the year
Equity-settled share-based
payments 4 603 921
Issue of shares 9 579 38 673 931
Qualifying costs of share (335 978)
issues
Balance at 28 February 2007
- Reviewed 256 110 85 430 832 7 138 301
Accu-
mulated
loss Total
R R
Balance at 28 February 2005
- Audited (2 823 783) 44 855 127
Loss for the year (3 137 152) (3 137 152)
Equity-settled share-based
payments 2 194 880
Balance at 28 February 2006
- Audited (5 960 935) 43 912 855
Loss for the year (2 738 358) (2 738 358)
Equity-settled share-based
payments 4 603 921
Issue of shares 38 683 510
Qualifying costs of share (335 978)
issues
Balance at 28 February 2007
- Reviewed (8 699 293) 84 125 950
Notes
Basis of preparation
The preliminary condensed financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) and its
interpretations adopted by the International Accounting Standards Board
(IASB) for interim financial statements. The accounting policies are
consistent with those of the prior year.
Independent review
The Company`s auditors, KPMG Inc., have reviewed the preliminary condensed
financial statements for the year ended 28 February 2007. Their unqualified
report is available for inspection at the registered office of the Company.
Dividend
No dividend has been declared for the year under review (2006 - Nil).
Exploration activities, progress during the year
Prospecting rights
During the year under review the Company was granted a further two
prospecting rights, in the Potchefstroom and southern Free State regions
under the Mineral and Petroleum Resources Development Act No. 28 of 2002.
Wits Gold now has a total of nine prospecting rights and it is estimated
that, in terms of the South African Code for Mineral Resources, they
contain a total inferred resource of 159,7 million ounces of gold and 136,3
million pounds of uranium oxide.
Intangible exploration and evaluation assets
Core drilling on the Company`s prospecting rights has commenced in the
southern Free State, where two drill rigs were mobilised during the latter
half of calendar 2006. In the area to the east of the De Bron Fault,
borehole DWN 21 was completed and four intersections of each reef produced
the following average results:
Depth Cor- Gold Gold Uranium Uranium
below rected grade value grade value
surface width (g/t) (cm.g/t) (kg/t) (cm.kg/t)
(m) (cm)
Beatrix Reef 666,1 178,0 6,30 1 121 0,203 36,09
Kalkoenkrans 667,9 109,4 0,59 65 0,018 2,00
Reef
B Reef 679,9 108,9 1,74 191 0,042 4,57
Leader Reef 703,8 105,8 4,51 477 0,442 46,73
Consistent with industry best practices, the analytical procedure adopted
for each of the reef intersections included the addition of at least one
blank and one standard reference sample. These samples were then submitted
to Anglo Research laboratory for gold and uranium oxide determination. As
at 28 February 2007, two additional boreholes, DWN 22 and DBH 18 were still
in progress.
Financial results
The Company is involved in the mineral exploration industry and it has not,
and does not in the near future, expect to generate any operating income.
Mineral exploration is highly speculative due to a number of significant
risks, including the possible failure to discover mineral deposits that are
sufficient in quantity and quality to justify the completion of pre-
feasibility or feasibility studies. Despite historical exploration work on
the Company`s prospecting rights, no known bodies of commercial ore or
economic deposits have been established. Substantial additional work will
be required in order to determine if any economic deposits occur on the
Company`s properties.
The Company has previously been able to raise sufficient capital from its
shareholders to fund its operating and exploration requirements. If the
Company`s current exploration programmes are successful, additional
financing will be required to complete pre-feasibility and feasibility
studies as well as developing any mineral properties identified in order to
bring them into commercial production. The exploration of the Company`s
prospecting rights is dependent upon the Company`s ability to obtain
additional financing through the joint venturing of projects, debt
financing, equity financing or other means. In future, such sources of
financing may not be available on acceptable terms, if at all.
At the annual general meeting of the Company held on 5 October 2006, the
directors were authorised to issue up to 15% of the Company`s issued
shares. Accordingly, Wits Gold now intends to raise the necessary capital
by way of a private placement, to fund the Company`s exploration activities
as well as to cover its estimated operating expenses for the next two
years. In view of previous successful capital raisings, the directors are
confident that the Company should be able to continue to raise sufficient
capital and therefore maintain its ability to represent a going concern.
Wits Gold also has the ability to downscale its operations at reasonably
short notice, should this be necessary. The Company is currently in the
process of preparing for a secondary listing on an international exchange.
Operating loss
The operating loss for the year under review increased by R14,6 million
compared to the prior year. The increased expenditure results mainly from
elevated employments costs (R2,3 million), the implementation of an
investor relations programme (R1,8 million) and expenditure relating to a
contemplated secondary listing of the Company on an international exchange
(R9,4 million).
Fair value gain on financial asset
This gain arises on recognising at fair value, the Company`s call option to
share in the excess proceeds which their advisors would realise on
exercising the options granted to them in payment for services rendered to
the Company. The advisors will settle the Company`s portion of any excess
in cash, during the period May 2008 to December 2009.
Non-current assets
During the year, the Company incurred exploration expenditure in the amount
of R6,3 million (2006 - R3,4 million) which has been capitalised to
intangible exploration and evaluation assets. The Company also acquired
land and buildings for R0,8 million (2006 - Nil) and has incurred a further
R2,1 million (2006 - Nil) on improvements. The non-current assets have also
increased by an amount of R14,2 million (2006 - Nil) as a result of the
recognition of the financial asset.
Current liabilities
The increase in current liabilities of R1,5 million (2006 - Nil) is mainly
due to drilling contractors.
Listing on the JSE Limited and capital raising
In April 2006, the Company listed on the JSE Limited and at the same time
raised R8,0 million. An amount of R2,3 million has been expensed in
relation to this listing. In October 2006, the Company raised a further
R30,7 million (2006 - Nil) by way of a private placement. Costs directly
related to both the listing and private placement issues of shares, in the
amount of R0,3 million, have been debited to the Company`s share premium
account.
Commitments
The Company has committed to spend an additional amount of approximately
R0,2 million on buildings and equipment, R0,5 million on a commercial
vehicle and R0,1 million on an operating lease during the next year.
Furthermore the Company has also committed to spend R47,5 million on
exploration activities during the next five years.
Directors
At the annual general meeting, Mr A Fleming and Dr M Watchorn who retired
by rotation, were re-elected to the board. Mrs G Wilson was appointed to
the board with effect from 1 September 2006.
For and on behalf of the board
Adam Fleming Marc Watchorn
Chairman CEO
Johannesburg
9 May 2007
Business and Registered Office
12th Floor, 70 Fox Street, Johannesburg, 2001
PO Box 61140, Marshalltown, 2107
Tel: (011) 832 1749
Fax: (011) 838 3208
Directors
Mr Adam Fleming Chairman*, Prof Taole Mokoena Deputy Chairman*, Dr Humphrey
Mathe Director*, Mrs Gayle Wilson Director*, Dr Marc Watchorn (Chief
Executive Officer) Mr Derek Urquhart (Chief Financial Officer) *Non-
executive
Company Secretary Sponsor
Mr Brian Dowden PricewaterhouseCoopers
7 Pam Road, Morningside Ext 5 Corporate Finance (Pty) Ltd
Sandton, Johannesburg, 2057 2 Eglin Rd, Sunninghill, 2157
PO Box 651129, Benmore, 2010 Private Bag X37, Sunninghill, 2157
South Africa South Africa
Transfer Secretary
Link Market Services SA (Pty) Limited
www.witsgold.com
Date: 08/05/2007 15:28:02 Produced by the JSE SENS Department.
