| Fri 29 May 2009, 7:15 | | WGR - Wits Gold - Audited Provisional Results For The Year Ended 28 February |
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WGR
WGR
WGR - Wits Gold - Audited Provisional Results For The Year Ended 28 February
2009
Witwatersrand Consolidated Gold Resources Limited
("Wits Gold" or "the Company")
(Registration Number 2002/031365/06)
JSE Share Code: WGR & ISIN: ZAE000079703
TSX Share Code: WGR & CUSIP Number: S98297104
Audited provisional results
for the year ended 28 February 2009
All figures quoted in South African Rands unless otherwise stated
Audited provisional balance sheet
at 28 February 2009
2009 2008
R R
Assets
Non-current assets 86 751 487 51 089 076
Property and equipment 5 592 553 9 101 988
Intangible exploration and 81 042 530 41 987 088
evaluation assets
Deferred taxation 116 404 -
Current assets 118 571 960 151 446 737
Financial asset - 14 053 848
Other receivables 1 508 824 1 324 819
Cash and cash equivalents 117 063 136 136 068 070
Total assets 205 323 447 202 535 813
Equity and liabilities
Capital and reserves 192 999 070 190 581 149
Ordinary share capital 278 909 272 909
Share premium 185 971 589 179 582 518
Equity-settled share-based 17 849 857 14 998 351
payment reserve
Revaluation reserve 1 187 582 4 392 300
Accumulated loss (12 288 867) (8 664 929)
Non-current liabilities
Deferred taxation - 2 503 894
Current liabilities 12 324 377 9 450 770
Trade and other payables 6 740 930 6 860 826
Taxation payable 5 183 447 2 083 944
Provisions 400 000 506 000
Total equity and liabilities 205 323 447 202 535 813
Audited provisional income statement
for the year ended 28 February 2009
2009 2008
R R
Revenue - -
Operating costs (18 232 838) (18 541 040)
Operating loss (18 232 838) (18 541 040)
Profit on disposal of non- 14 585 -
current assets
Finance income 15 411 414 9 020 296
Other income 4 320 3 509
Fair value gain on financial 245 152 14 126 675
asset
Interest expense (34 592) -
(Loss)/profit for the year (2 591 959) 4 609 440
Taxation (1 031 979) (3 872 813)
(Loss)/profit for the year after (3 623 938) 736 627
taxation
Basic (loss)/earnings per share (13,14) 2,82
(cents)
Diluted (loss)/earnings per (20,26) 2,76
share (cents)
Supplementary information:
Reconciliation between
(loss)/earnings and headline
(loss)/earnings
(Loss)/profit for the year after (3 623 938) 736 627
taxation
Profit on disposal of non- (14 585) -
current assets
Headline (loss)/profit (3 638 523) 736 627
Number of shares in issue 27 890 916 27 290 916
Weighted average number of 27 581 457 26 089 194
shares in issue
Diluted weighted average number 27 706 457 26 689 194
of shares in issue
Performance per ordinary share
Basic headline (loss)/earnings (13,19) 2,82
per share (cents)
Diluted headline (loss)/earnings (20,32) 2,76
per share (cents)
Net asset value per share 691,98 698,33
(cents)
Net tangible asset value per 401,41 544,48
share (cents)
Audited provisional cash flow statement
for the year ended 28 February 2009
2009 2008
R R
Cash flows from operating
activities
Cash utilised in operating (15 345 709) (6 757 842)
activities
Finance income received 15 411 414 9 020 296
Interest paid (34 592) -
Taxation paid (4 322) -
Net cash generated by operating 26 791 2 262 454
activities
Cash flows from investing
activities
Additions to property and (853 622) (969 266)
equipment
Additions to intangible (39 055 442) (17 439 625)
exploration and evaluation
assets
Proceeds on disposal of non- 183 268 -
current asset
Proceeds from financial asset 14 299 000 14 299 000
realised
Net cash utilised in investing (25 426 796) (4 109 891)
activities
Cash flows from financing
activities
Proceeds from issue of shares 6 370 000 96 333 160
Net share issue cost 25 071 (2 164 675)
reversal/(expense)
Decrease in loan to shareholder - 43 219
Net cash generated by financing 6 395 071 94 211 704
activities
(Decrease)/increase in cash and (19 004 934) 92 364 267
cash equivalents
Cash and cash equivalents at 136 068 070 43 703 803
beginning of the year
Cash and cash equivalents at end 117 063 136 136 068 070
of the year
Audited provisional statement of changes in equity
for the year ended 28 February 2009
Equity-
settled
share-
Ordinary based
share Share payment
capital premium reserve
R R R
Balance at 28 256 110 85 430 832 7 840 564
February 2007
Profit for the year - - -
Equity-settled - - 7 157 787
share-based payment
Issue of shares 16 799 96 316 361 -
Qualifying costs of - (2 164 675) -
share issue
Surplus on - - -
revaluation of land
and buildings
Deferred taxation - - -
on revaluation
Balance at 29 272 909 179 582 518 14 998 351
February 2008
Loss for the year - - -
Equity-settled - - 2 851 506
share-based payment
Issue of shares 6 000 6 364 000 -
Net reversal of - 25 071 -
qualifying costs of
share issue
Reduction on - - -
revaluation of land
and buildings
Deferred taxation - - -
on revaluation
Balance at 28 278 909 185 971 589 17 849 857
February 2009
Total
Revalua- Accumu- capital
tion lated and
reserve loss reserves
R R R
Balance at 28 - (9 401 556) 84 125 950
February 2007
Profit for the year - 736 627 736 627
Equity-settled - - 7 157 787
share-based payment
Issue of shares - - 96 333 160
Qualifying costs of - - (2 164 675)
share issue
Surplus on 5 107 326 - 5 107 326
revaluation of land
and buildings
Deferred taxation (715 026) - (715 026)
on revaluation
Balance at 29 4 392 300 (8 664 929) 190 581 149
February 2008
Loss for the year - (3 623 938) (3 623 938)
Equity-settled - - 2 851 506
share-based payment
Issue of shares - - 6 370 000
Net reversal of - - 25 071
qualifying costs of
share issue
Reduction on (3 753 170) - (3 753 170)
revaluation of land
and buildings
Deferred taxation 548 452 - 548 452
on revaluation
Balance at 28 1 187 582 (12 288 867) 192 999 070
February 2009
Notes to the provisional financial results
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. Significant additional work will be required in order to
determine if any economic deposits occur on any of the Company`s properties.
Operational review (this section has not been audited by KPMG Inc.)
During the year under review, the Company completed 14 755 metres of diamond
core drilling in 11 boreholes on its prospecting rights within the Witwatersrand
Basin. Most of this drilling (eight boreholes) was undertaken in the Company`s
two most advanced projects, namely the De Bron and Bloemhoek Projects in the
Southern Free State Goldfield. The remaining holes were drilled within the
Potchefstroom (two boreholes) and the Klerksdorp Goldfields (one borehole).
There have been no material changes to the Company`s resources as disclosed in
its 2008 annual report.
Southern Free State Goldfield
Exploration in this goldfield is primarily focused on the contiguous Bloemhoek
and De Bron Projects. Substantial laterally continuous gold mineralisation has
been confirmed on the Beatrix, Kalkoenkrans, B and Leader Reefs at depths
between 500 metres and 2 500 metres below surface.
These exploration results were sufficiently encouraging to commission pre-
feasibility studies on both projects. These studies will consider the economics
of mining at the Bloemhoek and adjacent De Bron Projects, and are being
undertaken on behalf of the Company by Turnberry Projects together with Ukwazi
Mining Solutions. The results from a number of alternative mine designs which
consider mining the project jointly and separately should become available
during the third quarter of 2009.
The Company acquired historical exploration data for its Beisa North project
from AngloGold Ashanti Limited. This project is targeting the uraniferous Beisa
Reef historically mined on the adjoining Beisa Uranium Mine that is currently
part of the Beatrix West Gold Mine.
Wits Gold has used this information to re-interpret the structural and
sedimentological setting of the Beisa Reef. Based on this new geological model,
AMD Consulting CC has been commissioned to estimate a SAMREC compliant mineral
resource for the Beisa Reef by mid 2009. Depending on the results of this study,
management will develop an appropriate exploration strategy.
The Potchefstroom Goldfield
Two boreholes have been completed in the Kleinfontein Project situated in the
north of the Potchefstroom Goldfield, targeting the Middelvlei and Carbon Leader
Reefs at depths shallower than 2 000 metres below surface. The drilling was
positioned to expand this resource northwestwards to its subcrop position
against the Transvaal Supergroup cover rocks. However, the Carbon Leader and
Middelvlei Reefs were only intersected in one of the boreholes due to the
presence of faults. Consequently, any supplementary resources are likely to be
provided only by the Middelvlei Reef, which is well developed in this area.
The Klerksdorp Goldfield
A single deep borehole, targeting the Vaal Reef, is currently in progress in the
Kromdraai Project, situated to the northeast of the Klerksdorp Goldfield.
Results are expected during mid 2009.
Qualified person
The technical and scientific information contained in this news release was
reviewed by qualified person, Dirk Jacobus Muntingh, who is a full time employee
of the Company. For further information concerning the Company`s projects,
please see the Company`s filed N143-101 compliant Independent Technical Report
dated November 2007, which can be viewed at www.sedar.com.
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 foreseeable future. The Company also has the ability to
downscale its operations at reasonably short notice, if required. However, in
the longer term, the ongoing exploration of the Company`s prospecting rights
will be dependent upon the Company`s ability to obtain additional financing
through the joint venturing of projects, debt financing, equity financing or
other means.
Financial review
Operating loss
The operating loss for the year under review reduced slightly by R0,3 million
compared to the prior year. This reduction results mainly from reductions in
respect of stock exchange listing and related expenditure (R4,7 million) and
employment related expenditure (R0,4 million). These decreases were offset by
elevated consulting fees (R1,5 million), depreciation charge (R0,2 million) and
investor relations expenditure (R2,2 million).
Non-current assets
During the year, the Company incurred direct exploration expenditure in the
amount of R39,1 million (2008: R17,4 million) which has been capitalised to
intangible exploration and evaluation assets. The Company also incurred a
further R0,2 million (2008: R0,4 million) on improvements to its land and
buildings. The land and buildings were re-valued downwards by R3,8 million
(2008: re-valued upwards by R5,1 million) as a result of independent market
valuations thereof, undertaken in February 2009 and 2008.
Current assets
The financial asset amounting to R14,1 million at 29 February 2008 was settled
in full in April 2008. The Company`s cash and cash equivalents reduced by R19
million during the fiscal year which reflects the normal operational and
exploration outflows offset by interest received and capital raised.
Current liabilities
The Company`s rate of physical exploration drilling remained fairly static over
the year and the main contributor to the increase in current liabilities to
R12,3 million was an increase in the taxation liability of R3,1 million. This
increase results from the provision for capital gains tax as well as normal
company tax, the latter is due to non tax deductible expenditure being added
back to the loss for the year.
Capital and reserves
During the year under review, the Company raised a total of R20,7 million (2008:
R110,6 million) by way of private placements. This amount includes R14,3 million
(2008: R14,3 million) relating to the excess proceeds from options granted to
advisors. The equity settled share based payment reserve increased by R2,8
million (2008: R7,2 million) resulting from the accounting for employee and
advisors share based payments. Based on an independent valuation on the land and
buildings, the revaluation reserve was adjusted downwards by R3,8 million (2008:
upwards by R5,1 million).
Commitments
The Company has committed to spend R33,5 million on exploration activities and
professional fees during the next five years. All of these commitments will be
funded out of existing cash resources.
Basis of presentation
The financial results for the year ended 28 February 2009 comply with the
listing requirements of the JSE Limited, International Financial Reporting
Standards, the disclosure requirements of IAS 34 Interim Financial Reporting and
the South African Companies Act, 61 of 1973, as amended. The accounting policies
are consistent with those applied in the previous financial year. They do not
include all the information required for full annual financial statements and
should be read with the financial statements for the year ended 29 February
2008.
The Company consists of only one segment and there have been no changes to the
composition of the entity. There has been no reclassification or correction of
errors and no changes in accounting estimates. The Company does not have any
contingent assets or liabilities and no material subsequent events have occurred
since the balance sheet date. No material related party transactions have been
identified.
Dividends
No dividends were declared or paid by the Company during the year under review
(2008: 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.
After making enquiries the directors have reasonable expectation that the
Company has adequate resources to continue in operational existence for the
foreseeable future and that there are no material uncertainties that lead to
significant doubt upon the Company`s ability to continue as a going concern.
Accordingly, the directors continue to adopt the going concern basis in
preparing the financial statements.
Auditor`s report
The auditors, KPMG Inc. have audited the annual financial statements for the
year ended 28 February 2009. A copy of the auditor`s unmodified 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
12:00 hours on 24 July 2009, at the Wanderers Club, 21 North Road, Illovo,
Johannesburg.
Forward-looking information
Certain statements in this news release may constitute forward-looking
information within the meaning of securities laws. In some cases, forward
looking information can be identified by use of terms such as "may", "will",
"should", "expect", "believe", "plan", "scheduled", "intend", "estimate",
"forecast", "predict", "potential", "continue", "anticipate" or other similar
expressions concerning matters that are not historical facts. Forward-looking
information may relate to management`s future outlook and anticipated events or
results, and may include statements or information regarding the future plans or
prospects of the Company. Without limitation, statements about the timing of a
pre-feasibility study are forward-looking information.
Forward-looking information involves known and unknown risks, uncertainties and
other important factors that could cause the actual results, performance or
achievements of the Company to be materially different from the future results,
performance or achievements expressed or implied by such forward-looking
information. Such risks, uncertainties and other important factors include among
others: economic, business and political conditions in South Africa; decreases
in the market price of gold; hazards associated with underground and surface
gold mining; the ability to attract and retain qualified personnel; labour
disruptions; changes in laws and government regulations, particularly
environmental regulations and mineral rights legislation including risks
relating to the acquisition of the necessary licences and permits; changes in
exchange rates; currency devaluations and inflation and other macro-economic
factors; risk of changes in capital and operating costs, financing,
capitalisation and liquidity risks, including the risk that the financing
required to fund all currently planned exploration and related activities may
not be available on satisfactory terms, or at all; the ability to maximise the
value of any economic resources. These forward-looking statements speak only as
of the date of this document.
You should not place undue importance on forward-looking information and should
not rely upon this information as of any other date. The Company undertakes no
obligation to update publicly or release any revisions to these forward-looking
statements to reflect events or circumstances after the date of this document or
to reflect the occurrence of unanticipated events except where required by
applicable laws.
For and on behalf of the Board
MB Watchorn
Chief executive officer
DM Urquhart
Chief financial officer
28 May 2009
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: 29/05/2009 07:15:02 Produced by the JSE SENS Department.
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