| Fri 30 May 2008, 17:00 | | WGR - Witwatersrand Consolidated Gold Resources Limited - Audited Abridged |
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WGR
WGR
WGR - Witwatersrand Consolidated Gold Resources Limited - Audited Abridged
Results For The Year Ended 29 February 2008
Witwatersrand Consolidated Gold Resources Limited
("Wits Gold" or "the Company")
(Registration Number 2002/031365/06)
Share Code: WGR
ISIN: ZAE000079703
Audited Abridged Results for the year ended 29 February 2008
Audited abridged balance sheet at 29 February 2008
Assets
Non-current assets 51 089 076 42 020 577
Property and equipment 9 101 988 3 246 941
Intangible exploration and evaluation 41 987 088 24 547 463
assets
Financial asset - 14 226 173
Current assets 151 446 737 44 324 084
Loan to shareholder - charitable trust - 43 219
Current portion of financial asset 14 053 848 -
Other receivables 1 324 819 577 062
Cash and cash equivalents 136 068 070 43 703 803
Total assets 202 535 813 86 344 661
Equity and liabilities
Capital and reserves 190 581 149 84 125 950
Ordinary share capital 272 909 256 110
Share premium 179 582 518 85 430 832
Equity-settled share-based payment 14 998 351 7 840 564
reserve
Revaluation reserve 4 392 300 -
Accumulated loss (8 664 929) (9 401 556)
Non-current liabilities
Deferred tax 2 503 894 -
Current liabilities 9 450 770 2 218 711
Trade and other payables 6 860 826 2 218 711
Taxation payable 2 083 944 -
Provisions 506 000 -
Total equity and liabilities 202 535 813 86 344 661
Net asset value per share (cents) 698.33 328.48
Net tangible asset value per share 544.48 232.63
(cents)
Number of shares in issue 27 290 916 25 610 988
Audited abridged income statementfor the year ended 29 February 2008
Revenue - -
Operating costs (18 541 040) (20 326 845)
Operating loss (18 541 040) (20 326 845)
Finance income 9 020 296 2 660 051
Sundry income 3 509 -
Fair value gain on financial 14 126 675 14 226 173
asset
Profit/(loss) for the year before 4 609 440 (3 440 621)
taxation
Taxation 3 872 813 -
-Profit/(loss) for the year 736 627 (3 440 621)
Basic and headline profit/(loss)
per share and diluted
profit/(loss) per share
Weighted average number of shares 26 089 194 24 931 013
in issue
Basic and headline profit/(loss) 2.82 (13.80)
per share (cents)
Diluted weighted average number 26 689 194 25 218 468
of shares in issue
Diluted profit/(loss) per share 2.76 (19.25)
(cents)
Audited abridged statement of changes in equity for the year ended 29 February
2008
Equity-
settled
share-
Ordinary based
share Share payment
capital premium reserve
R R R
Balance at 28 February 2006 246 531 47 092 879 2 534 380
Equity-settled share-based - - 5 306 184
payment
Issue of shares 9 579 38 673 931 -
Loss for the year - - -
Qualifying costs of share issue - (335 978) -
Balance at 28 February 2007 256 110 85 430 832 7 840 564
Profit for the year - - -
Equity-settled share-based - - 7 157 787
payment
Issue of shares 16 799 96 316 361 -
Qualifying costs of share issue - (2 164 675) -
Surplus on revaluation of land - - -
and buildings
Deferred taxation on - - -
revaluation
Balance at 29 February 2008 272 909 179 582 518 14 998 351
Revaluation Accumulated
reserve loss Total
R R R
Balance at 28 February 2006 (5 960 935) 43 912 855
Equity-settled share-based - - 5 306 184
payment
Issue of shares - - 38 683 510
Loss for the year - (3 440 621) (3 440 621)
Qualifying costs of share issue - - (335 978)
Balance at 28 February 2007 - (9 401 556) 84 125 950
Profit for the year - 736 627 736 627
Equity-settled share-based - - 7 157 787
payment
Issue of shares - - 96 333 160
Qualifying costs of share issue - - (2 164 675)
Surplus on revaluation of land 5 107 326 - 5 107 326
and buildings
Deferred taxation on (715 026) - (715 026)
revaluation
Balance at 29 February 2008 4 392 300 (8 664 929) 190 581 149
Audited Abridged Cash flow statement for the year ended 29 February 2008
Cash flows from operating activities
Cash utilised in operating activities (6 757 842) (13 964
101)
Finance income 9 020 296 2 660 051
Net cash generated by/(utilised in) operating 2 262 454 (11 304
activities 050)
Cash flows from investing activities
Expenditure to expand operating capacity
Additions to property and equipment (969 266) (3 067 187)
Additions to intangible exploration and (17 439 625) (6 322 449)
evaluation assets
Financial asset settled in cash 14 299 000 -
Net cash utilised in investing activities (4 109 891) (9 389 636)
Cash flows from financing activities
Proceeds on issue of shares 96 333 160 38 683 510
Share issue expenses (2 164 675) (335 978)
Decrease/(increase) in loan to shareholder 43 219 (43 219)
Net cash generated by financing activities 94 211 704 38 304 313
Increase in cash and cash equivalents 92 364 267 17 610 627
Cash and cash equivalents at beginning of the 43 703 803 26 093 176
year
Cash and cash equivalents at end of the year 136 068 070 43 703 803
Nature of business
Witwatersrand Consolidated Gold Resources Limited is a company domiciled in the
Republic of South Africa. The Company`s shares are publicly traded on the JSE
Limited and on the Toronto Stock Exchanges. The Company carries on the business
of acquiring, preserving, evaluating, trading and developing prospecting rights
for exploration and investment purposes.
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.
Additional work will be required in order to determine if any economic deposits
occur on any of the Company`s properties.
Operational review
The ongoing 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. The
Company has, however, always been successful in the past in raising the required
capital from its shareholders to fund its operating and exploration activities.
During the year under review the State granted the Company an additional four
(2007: three) prospecting rights covering a surface area of 115 (2007: 108)
square kilometres. No third parties have any rights to participate in any mine
which may be constructed in these areas.
The Company`s southern Free State projects now contain resources in the
indicated category of 100.7 Mt at 6.0 g/t (19.4 Moz) as calculated by Snowden
Mining Industry Consultants (Qualified Persons: Shaun Hackett and George
Gilchrist). Within this area, an independent scoping study was completed by
Turnberry Projects (Pty) Limited (Qualified Persons; Gordon Cuningham and Tim
Spindler) on one project containing 52.3 Mt at 6.7 g/t (11.3 Moz). The results
of this study recommend that the Company commence with a pre-feasibility study
to further investigate the viability of this project. It is expected that this
pre-feasibility study will be completed during the course of the 2009 financial
year.
The directors believe that the Company has sufficient capital to fund its
planned exploration activities as well as to cover its estimated operating
expenses for the next eighteen months. In view of the 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 carry
on its exploration activities. The Company also has the ability to downscale its
operations at reasonably short notice, should this be necessary.
Financial review
Operating loss
The operating loss for the year under review decreased by R1.8 million compared
to the prior year. The decreased expenditure results mainly from a reduction in
respect of stock exchange listing and related expenditure (R6.9 million), offset
by elevated employment costs (R4.3 million), security costs (R0.2 million),
costs relating to new projects (R0.2 million) and consulting costs (R0.2
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.
During December 2007, the advisors exercised certain options which resulted in
them settling R14.3 million of this financial asset. The remaining R14.1 million
was settled by the Company`s advisors prior to the issue of these financial
statements.
Non-current assets
During the year, the Company incurred exploration expenditure in the amount of
R17.4 million (2007: R6.3 million) which is directly attributable to intangible
exploration and evaluation assets. The Company also incurred a further R0.4
million (2007: R2.9 million) on improvements to its land and buildings. The land
and buildings, being complete at the balance sheet date, were revalued by R5.1
million (2007: Rnil) as a result of an independent valuation thereof, undertaken
in February 2008. The non-current assets have reduced by R14.2 million (2007:
increased R14.2 million) as a result of the fair value adjustment of the
financial asset, reduced by the partial cash settlement thereof and the transfer
of the balance to current assets.
Current liabilities
The Company continued to increase the rate of physical exploration drilling,
being the main contributor to the increase in current liabilities to R9.5
million (2007: R2.2 million).
Share capital
During the year under review, the Company raised a total of R110.6 million
(2007: R38.7 million) by way of private placements. This amount includes R14.3
million (2007: Rnil) relating to the excess proceeds from options granted to
advisors. Costs directly related to the share issues in the amount of R2.2
million (2007: R0.3 million) have been debited to the Company`s share premium
account.
With reference to the above, the Company issued a total of 1 679 928 (2007: 957
882) shares during the year to 29 February 2008, of which 1 610 928 (2007: 557
882) were to international investors. All of these shares were issued to public
shareholders of which 879 928 (2007: 957 882) were in terms of a general issue
of shares for cash and 800 000 (2007: Nil) were in terms of a specific issue of
shares for cash under option agreements with the Company`s advisors.
Commitments
The Company has committed to spend an additional amount of approximately R0.1
million (2007: R0.2 million) on buildings and equipment, R0.2 million (2007:
Rnil) on conferences and R0.2 million (2007: R0.1 million) on an operating lease
during the next year.
Furthermore the Company has also committed to spend R54.8 million (2007: R47.5
million) on exploration activities during the next five years.
Litigation
There are no legal or arbitration proceedings in which the Company is or has
been engaged, which may have or have had, a material effect on the Company`s
financial position.
Accounting policies
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and its interpretations adopted by the
International Accounting Standards Board (IASB) and in the manner required by
the South African Companies Act, 61 of 1973 (as amended).
Dividends
No dividends were declared or paid by the Company during the year under review
(2007: Rnil).
Going concern
Due to the inherent risk in the nature of exploration activities, there may be
uncertainty regarding the recoverability of the Company`s exploration
expenditure. To meet its ongoing obligations and maintain its operations the
Company will periodically seek to raise additional equity funding which will be
premised on the exploration results and the contingent further exploration
plans. This will be in the form of the issue of additional Company shares to
both local and international markets.
Auditor`s report
The unqualified audit report issued by KPMG Inc, on the abridged financial
statements contained in this report is available for inspection at the Company`s
registered office.
Annual general meeting
The annual general meeting of the Company`s shareholders will take place at
14:00 hours on 25 July 2008, at the Wanderers Club, 21 North Road, Illovo
Johannesburg.
For and on behalf of the Board
MB Watchorn DM Urquhart
Chief executive officer Chief financial officer
30 May 2008
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 30/05/2008 17:00:01 Produced by the JSE SENS Department.
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