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WGR
WGR
WGR - Wits Gold - Reviewed interim results for the six months ended 31 August
2007
Witwatersrand Consolidated Gold Resources Limited
(`Wits Gold` or `the Company`)
(Registration Number 2002/031365/06)
Share Code: WGR
ISIN: ZAE000079703
Financial results for the six months ended 31 August 2007
Condensed income statement
for the six months ended 31 August 2007
Six months ended Year ended
31 August 31 August 28 February
2007 2006 2007
(Reviewed) (Unaudited) (Audited)
R R R
Revenue - - -
Operating loss (9,253,702) (8,419,877) (20,326,845)
Net finance income 2,776,298 1,027,359 2,660,051
Fair value gain on financial asset 3,510,341 - 14,226,173
Sundry income 3,508 - -
Loss for the period/year before (7,392,518) (3,440,621)
taxation (2,963,555)
Taxation - - -
Loss for the period/year (2,963,555) (7,392,518) (3,440,621)
Basic and headline loss per share and
diluted basic and headline loss per
share.
Weighted average number of shares in 25,660,397 24,685,048 24,931,013
issue
Basic and headline loss per share 11.55 29.95 13.80
(cents)
Diluted weighted average number of 25,947,852 24,845,751 25,218,468
shares in issue
Diluted basic and headline loss per 15.58 40.12 19.25
share (cents)
Condensed balance sheet
As at 31 August 2007
As at As at
31 August 28 February
2007 2006 2007
(Reviewed) (Unaudited) (Audited)
R R R
Assets
Non-current assets 54,179,701 20,574,047 42,020,577
Current assets 116,910,614 28,921,357 44,324,084
Total assets 171,090,315 49,495,404 86,344,661
Equity and liabilities
Capital and reserves 167,280,431 46,686,337 84,125,950
Current liabilities 3,809,884 2,809,067 2,218,711
Total equity and liabilities 171,090,315 49,495,404 86,344,661
Condensed cash flow statements
for the six months ended 31 August 2007
Six months ended Year ended
31 August 28 February
2007 2006 2007
(Reviewed) (Unaudited) (Audited)
R R R
Cash flows from operating activities
Cash utilised in operating (3,850,220) (4,408,743) (13,964,101)
activities
Net finance income 2,776,298 1,027,359 2,660,051
Net cash utilised in operating (1,073,922) (3,381,384) (11,304,050)
activities
Cash flows from investing activities
Net cash utilised in investing (8,754,545) (2,104,141) (9,389,636)
activities
Cash flows from financing activities
Net cash generated by financing 81,449,492 7,700,000 38,304,313
activities
Increase in cash and cash 71,621,025 2,214,475 17,610,627
equivalents
Cash and cash equivalents at 43,703,803 26,093,176 26,093,176
beginning of the period/year
Cash and cash equivalents at end of 115,324,828 28,307,651 43,703,803
the period/year
Statement of changes in equity
for the six months ended 31 August 2007
Ordinary Share Equity- Accumulated Total
share premium settled loss
capital share-based
payment
reserve
R R R R R
Balance at 28 246,531 47,092,879 2,534,380 (5,960,935) 43,912,855
February 2006
(Audited)
Loss for the - - - (7,392,518) (7,392,518)
period
Equity-settled - - 2,466,000 - 2,466,000
share-based
payments
Issue of share 4,000 7,996,000 - - 8,000,000
capital
Qualifying (300,000) - - (300,000)
costs of share
issue
Balance at 31 250,531 54,788,879 5,000,380 (13,353,453) 46,686,337
August 2006
(Unaudited)
Balance at 28 256,110 85,430,832 7,840,564 (9,401,556) 84,125,950
February 2007
(Audited)
Loss for the - - - (2,963,555) (2,963,555)
period
Equity-settled - - 4,667,508 - 4,667,508
share-based
payments
Issue of share 8,799 83,584,361 - - 83,593,160
capital
Qualifying (2,142,632) - - (2,142,632)
costs of share
issue
Balance at 31 264,909 166,872,561 12,508,072 (12,365,111) 167,280,431
August 2007
(Reviewed)
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
Mr. Brian Dowden
7 Pam Road, Morningside Ext 5
Sandton, Johannesburg, 2057
PO Box 651129, Benmore, 2010
South Africa
Transfer Secretary
Link Market Services SA (Pty) Ltd
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
2 Eglin Rd, Sunninghill, 2157
Private Bag X37, Sunninghill, 2157
South Africa
Overview
During the six month period under review, Wits Gold has raised additional
capital by means of a private placement of 879 928 shares with North American,
European and South African investors. These shares were issued at R95, a
discount of 4.6% to the ruling price on 27th June 2007. The net proceeds of
R81.4 million will be used to fund the Company`s principal exploration projects
in the Southern Free State, Potchefstroom and Klerksdorp Goldfields over the
next 18 months. The main focus remains the De Bron-Bloemhoek area where a fourth
borehole is currently in progress since in-fill drilling was commenced during
August 2006. Recent drilling results have been encouraging and a revised
resource estimate for this area is likely to become available during the fourth
quarter of 2007.
Events subsequent to the review period
The Wits Gold Annual General Meeting was held at the JSE Limited ("JSE") in
Johannesburg on 12th October 2007. Two non-executive directors, Prof Taole
Mokoena and Dr Humphrey Mathe were re-appointed by the shareholders, following
their retirement by rotation. In addition, shareholders were requested to
approve the implementation of a share scheme designed to attract, incentivise
and retain Company personnel. This scheme was subsequently approved and will be
apply to all directors, officers and staff.
Future exploration
Wits Gold has identified five key exploration projects on the basis of their
potential to contain Witwatersrand reefs with elevated gold grades at less than
2 500 metres below surface. The selection of these priority targets was based on
a review of the Company`s geological database that now consists of 207 boreholes
with almost 3,000 reef intersections. Particular attention will be focussed on
the three projects in the Southern Free State Goldfield, where the Beatrix,
Kalkoenkrans and Leader Reefs are all preserved at depths of the order of 500-
2,000 metres below surface and contain gold grades comparable to those being
exploited by the surrounding mines. In the Potchefstroom Goldfield, drilling
will soon commence in the Kleinfontein area, where six discrete reef units are
being tested in the area immediately west of the Blyvooruitzicht Mine. In the
Klerksdorp region, an assessment of the available geological and seismic
information is being undertaken in order to select an appropriate drill site. It
is anticipated that in this area, the Vaal Reef is likely to be situated at
depths of the order of 3,500 metres below surface.
The Company is involved in the mineral exploration industry and does not
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 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.
Basis of preparation
The interim condensed financial statements for the six months ended 31 August
2007 were prepared in accordance with IAS 34 - Interim Financial Reporting and
in compliance with The Listing Requirements of the JSE.
The financial information has been prepared on the basis of the recognition and
measurement requirements of International Financial Reporting Standards (IFRS).
The accounting policies of the Company have been prepared in accordance with
those previously reported in the 2007 annual financial statements.
Independent review
The Company`s auditors, KPMG Inc., have reviewed the interim condensed financial
statements for the six months ended 31 August 2007. Their unqualified report is
available for inspection at the registered office of the Company.
In preparation for a proposed secondary listing of the Company`s shares on an
international stock exchange, the Company requested KPMG Inc. to review these
interim condensed financial statements.
Dividend
No dividend has been declared for the period under review (31 August 2006 -
Nil).
Interim operations
The operating loss for the six months under review increased by R0.8 million
when compared to the first six months of the prior year. The increase in
operating loss results mainly from the fact that most categories of expenditure
had increased due to an increase in the level of activities.
The loss before and after taxation reduced by R4.4 million due to an increase in
interest received (R1.7 million) and the revaluation of a financial asset by
R3.5 million.
The Company spent R7.9 million (2006 - R1.2 million) on intangible exploration
assets and R0.8 million (2006-R0.8 million) on property, plant and equipment due
to increased exploration activity. The non-current assets have also increased by
an amount of R3.5 million (2006 - Nil) as a result of the initial recognition of
a financial asset.
Commitments
The Company`s commitments amount to R42.8 million, of which R42.7 million is
respect of exploration activities.
Prospects
The Company`s main focus for the near term future will be on the drilling
programmes in the Southern Free State and Potchefstroom Goldfields. The
objective in the Southern Free State will be to build on the current 3.8 Moz of
indicated gold resources whilst in the Potchefstroom area exploration will
initially concentrate on multi reef targets to the immediate west of
Carltonville Goldfield.
For and on behalf of the board
Adam Fleming Marc Watchorn
Chairman CEO
Johannesburg
16 November 2007
Date: 20/11/2007 07:00:02 Produced by the JSE SENS Department.
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