| Mon 13 Oct 2008, 17:00 | | WGR - Wits Gold - Unaudited financial results for the six months ended 31 August |
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WGR
WGR
WGR - Wits Gold - Unaudited financial results for the six months ended 31 August
2008
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
TSX Code: WGR
CUSIP Number: S98297104
Unaudited financial results for the six months ended 31 August 2008
Condensed income statement
for the six months ended 31 August 2008
Six months ended Year ended
31 August 31 August 29 February
2008 2007 2008
(Unaudited) (Reviewed) (Audited)
R R R
Revenue - - -
Operating loss (8 765 124) (9 253 702) (18 541 040)
Net finance income 8 073 436 2 776 298 9 020 296
Sundry income 4 320 3 508 3 509
Fair value gain on 245 152 3 510 341 14 126 675
financial asset
(Loss)/profit for the (442 216) (2 963 555) 4 609 440
period before taxation
Taxation 733 016 - 3 872 813
(Loss)/profit for the (1 175 232) (2 963 555) 736 627
period
(Loss)/profit per share
and diluted
(loss)/profit per share
and headline
(loss)/profit per share
Weighted average number of 27 478 559 25 660 397 26 089 194
shares in issue
Basic and headline (4,28) (11,55) 2,82
(loss)/profit per share
(cents)
Diluted weighted average 27 478 559 25 947 852 26 689 194
number of shares in issue
Diluted basic and headline (4,28) (15,58) 2,76
(loss)/profit per share
(cents)
Condensed balance sheet
as at 31 August 2008
As at As at
31 August 31 August 29 February
2008 2007 2008
(Unaudited) (Reviewed) (Audited)
R R R
Assets
Non-current assets 65 048 992 54 179 701 51 089 076
Current assets 142 770 145 116 910 614 151 446 737
Total assets 207 819 137 171 090 315 202 535 813
Equity and liabilities
Capital and reserves 197 125 992 167 280 431 190 581 149
Non-current liabilities 659 508 - 2 503 894
Current liabilities 10 033 637 3 809 884 9 450 770
Total equity and 207 819 137 171 090 315 202 535 813
liabilities
Condensed cash flow statement
for the six months ended 31 August 2008
Six months ended Year ended
31 August 31 August 29 February
2008 2007 2008
(Unaudited) (Reviewed) (Audited)
R R R
Cash flows from operating
activities
Cash utilised in operating (9 608 100) (3 850 220) (6 757 842)
activities
Taxation paid (4 322) - -
Net finance income 8 073 436 2 776 298 9 020 296
Net cash (utilised in)/ (1 538 986) (1 073 922) 2 262 454
generated by operating
activities
Cash flows from investing
activities
Net cash generated 220 474 (8 754 545) (4 109 891)
by/(utilised in) investing
activities
Cash flows from financing
activities
Net cash generated by 6 346 848 81 449 492 94 211 704
financing activities
Increase in cash and cash 5 028 336 71 621 025 92 364 267
equivalents
Cash and cash equivalents 136 068 070 43 703 803 43 703 803
at beginning of period
Cash and cash equivalents 141 096 406 115 324 828 136 068 070
at end of period
Statement of changes in equity
for the six months ended 31 August 2008
Equity-
settled
share-
Ordinary based
share Share payment
capital premium reserve
R R R
Balance at 28 February 256 110 85 430 832 7 840 564
2007 (Audited)
Loss for the period - - -
Equity-settled share-based - - 4 667 508
payments
Issue of share capital 8 799 83 584 361 -
Qualifying costs of share - (2 142 632) -
issue
Balance at 31 August 2007 264 909 166 872 561 12 508 072
(Reviewed)
Balance at 29 February 272 909 179 582 518 14 998 351
2008 (Audited)
Loss for the period - - -
Equity-settled share-based - - 1 373 226
payments
Issue of share capital 6 000 6 364 000 -
Qualifying costs of share - (23 151) -
issue
Balance at 31 August 2008 278 909 185 923 367 16 371 577
(Unaudited)
Revalua-
tion
reserve
Accu- land
mulated and
loss buildings Total
R R R
Balance at 28 February (9 401 556) - 84 125 950
2007 (Audited)
Loss for the period (2 963 555) - (2 963 555)
Equity-settled share-based - - 4 667 508
payments
Issue of share capital - - 83 593 160
Qualifying costs of share - - (2 142 632)
issue
Balance at 31 August 2007 (12 365 - 167 280 431
(Reviewed) 111)
Balance at 29 February (8 664 929) 4 392 300 190 581 149
2008 (Audited)
Loss for the period (1 175 232) - (1 175 232)
Equity-settled share-based - - 1 373 226
payments
Issue of share capital - - 6 370 000
Qualifying costs of share - - (23 151)
issue
Balance at 31 August 2008 (9 840 161) 4 392 300 197 125 992
(Unaudited)
Overview
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 feasibility studies. Currently Wits Gold has initiated a pre-
feasibility study over its Bloemhoek project. 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 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 and studies are successful, additional
financing will be required to complete further feasibility studies as well as
developing any mineral properties identified in order to bring them into
commercial production. The longer-term 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.
During the six month period under review, Wits Gold issued 600 000 new shares,
in terms of an option agreement with one of its advisors. In terms of this
transaction the Company received R6,4 million in share capital and share
premium, and R14,3 million in the settlement of a financial asset. These funds
will supplement the Company`s existing cash resources which will be used to
advance its exploration projects in South Africa.
The Company has acquired the historic exploration data for one of its new
prospecting rights in the southern Free State from AngloGold Ashanti for R0,7
million. These data include geological and assay data from 27 boreholes and
diamond drill core from seven of these holes. An initial geological review of
these areas has commenced in order to prioritise future exploration efforts.
The Wits Gold Annual General Meeting was held in Johannesburg on 25 July 2008.
Two directors, Mrs Gayle Wilson and Mr Derek Urquhart, were re-appointed by the
shareholders, following their retirement by rotation.
Basis of preparation
The interim condensed financial statements for the six months ended 31 August
2008 are unaudited and have not been reviewed by our auditors. They have been
prepared in accordance with IAS 34 - Interim Financial Reporting and in
compliance with the Listing Requirements of the JSE Limited.
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 consistently applied and these
financial statements should be read in conjunction with the annual report for
the year ended 29 February 2008.
Interim operations
The operating loss for the six months under review decreased by R0,5 million
when compared to the first six months of the prior year. The decrease in
operating loss results mainly from a decrease in listing fees (R2,8 million)
partially offset by an increase in consulting fees (R0,8 million) and investor
relations expenditure (R1,5 million).
The loss before taxation reduced by R2,5 million due to an increase in interest
received (R5,3 million) which was partially offset by a reduction in the fair
value gain of a financial asset by R3,3 million.
The Company spent R13,4 million (2007 - R7,9 million) on intangible exploration
assets and R0,6 million (2007 - R0,8 million) on property and equipment.
Dividend
No dividend has been declared for the period under review (31 August 2007 -
Nil).
Commitments
The Company`s commitments amount to R44,7 million (2007 - R42,8 million), of
which R44,1 million (2007 - R42,7 million) is in respect of exploration
activities. The net increase results from additional commitments made relating
to the new prospecting rights awarded to the Company, offset by actual
expenditure incurred.
Events subsequent to the review period
No material events have occurred since the accounting date and the date of this
report.
Mineral resources
There have been no material changes to the Company`s mineral resources as
disclosed in its 2008 annual report.
Future exploration
Wits Gold continues to focus its exploration on five priority projects, the most
advanced of which occur in the southern Free State. The key Bloemhoek project
contains an Indicated Resource of 52,3Mt at an average gold grade of 6,7g/t
(11,3Moz). Following the completion of a preliminary financial assessment of
this area, the Company has commissioned a pre-feasibility study to further
evaluate its potential to host an underground operation, immediately adjacent to
the Beatrix Gold Mine. The results of this exercise are expected during the
first calendar quarter of 2009 and will include a number of alternative mine
designs with related cash flow models. Further drilling is being undertaken at
Bloemhoek in order to upgrade the current Inferred Resource of 16,0Mt at 6,6g/t
(3,4Moz) into the Indicated category. The adjacent De Bron project contains a
shallower, but smaller Indicated Resource of 16,1Mt at 5,3g/t gold (2,7Moz) with
a similar 12,0Mt at 5,6g/t (2,2Moz) as an Inferred Resource. Two drill rigs are
presently being employed with the intention of defining a larger Indicated
Resource, prior to carrying out a scoping study to assess the viability of
mining this area.
During early 2008, Wits Gold was granted prospecting rights in the areas
immediately north and south of the defunct Beisa Uranium Mine in the southern
Free State. Since acquiring these rights, the Company has also purchased
historic exploration data, including borehole core for Beisa North, from
AngloGold Ashanti. This data package includes a non-compliant resource estimate
of 14,2Mt at 2,3g/t gold (1,0Moz) and 1,01kg/t U3O8 (31Mlbs). Future work will
involve a review of the gold-uranium potential of this region in order to
formulate an appropriate exploration strategy leading to formal resource
estimates.
Immediately west of the Carletonville goldfield, the Company continues to
prospect for extensions of the Carbon Leader and Middelvlei Reefs. Previous
geological models for this area indicated that these reefs had been widely
eliminated by low angle faults. However, a revised structural interpretation,
combined with recent drilling results, has indicated that the reefs are likely
to be preserved over significant parts of this Kleinfontein project. Drilling is
scheduled to continue in this area which currently contains an Inferred Resource
of 47,2Mt at 6,1g/t gold (9,2Moz).
In the Klerksdorp goldfield, the Company holds prospecting rights over the
Kromdraai area, containing down-dip extensions of the Vaal Reef. An independent
assessment of this project has estimated that an Inferred Resource of 57,6Mt at
16,2g/t (30,0Moz) occurs at depths in the order of 3 500 - 5 000 metres below
surface. Kromdraai is currently the Company`s only deep exploration project, but
in view of the potential optionality represented by the significant tonnage and
high grades, the drilling of a borehole to 3 600 metres is planned to commence
during October 2008.
Prospects
The Company`s main focus for the near term future continues to be on the
drilling programmes in the southern Free State, Potchefstroom and Klerksdorp
goldfields. The objectives in the southern Free State will be to complete the
pre-feasibility study on the Bloemhoek project, upgrade the De Bron resource and
appraise the gold-uranium potential of the Beisa region. In the Potchefstroom
area, exploration will concentrate on multi reef targets adjacent to the
Carletonville goldfield, whilst in the Klerksdorp region, drilling will test
down-dip extensions of the Vaal Reef.
Wits Gold`s board of directors is of the opinion that the Company currently has
sufficient funds to finance its operations for approximately the next two and a
half years.
For and on behalf of the board
Adam Fleming Marc Watchorn
Chairman CEO
Johannesburg
10 October 2008
Business and Registered Office
12th Floor, 70 Fox Street, Johannesburg, 2001
PO Box 61147, 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
JSE: Link Market Services SA (Pty) Ltd
TSX: CIBC Mellon Trust Company
www.witsgold.com
Date: 13/10/2008 17:00:01 Produced by the JSE SENS Department.
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