| Thu 14 Jan 2010, 15:00 | | PLN - Platmin Limited - Condensed Consolidated Interim Financial Statements |
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PLN
PLN
PLN - Platmin Limited - Condensed Consolidated Interim Financial Statements
for the three and nine month periods ended November 30, 2009
Platmin Limited
(A development stage company)
Incorporated in the accordance with the laws of Canada
Registration number: 610178-0
Share code on TSX: PPN
Share code on AIM: PPN
Share code on JSE: PLN
ISIN: CA72765Y1097
Condensed Consolidated Interim Financial Statements for the three and nine
month periods ended November 30, 2009
(Unaudited, expressed in United States dollars, unless otherwise stated)
Condensed consolidated interim statements of financial position
Nov 30, Nov 30,
2009 2008
Notes $ 000 $ 000
ASSETS
Non-current assets
Exploration and evaluation assets 6 35,796 23,630
Mineral rights 2,861 2,088
Intangible assets 7 7,313 -
Mineral properties 3,950 2,884
Property, plant and equipment 8 382,754 141,837
Leased assets 9 12,602 -
Loans receivable 49 33
Cash investments and guarantees 10 6,988 1,417
Total non-current assets 452,313 171,889
Current assets
Inventories 12,371 -
Trade and other receivables 30,545 12,188
Cash and cash equivalents 10 42,160 10,617
Total current assets 85,076 22,805
TOTAL ASSETS 537,389 194,694
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 11 425,535 192,144
Accumulated deficit (33,622) (15,865)
Other components of equity 82,331 (33,037)
474,244 143,242
Non-controlling interests 12 (19,595) (15,622)
Total equity 454,649 127,620
Non-current liabilities
Long-term borrowings 13 3,789 1,481
Finance lease liability 14 12,594 -
Long-term provisions 15 35,066 3,413
Total non-current liabilities 51,449 4,894
Current liabilities
Trade payable and accrued liabilities 27,969 25,146
Revolving commodity facility 16 3,299 -
Current portion of finance lease liability 14 23 -
Current portion of long-term borrowings 17 - 37,034
Total current liabilities 31,291 62,180
Total liabilities 82,740 67,074
TOTAL EQUITY AND LIABILITIES 537,389 194,694
NATURE OF OPERATIONS AND GOING CONCERN 1
CONTINGENCIES AND COMMITMENTS 20
Feb 28, Mar 1,
2009 2008
$ 000 $ 000
ASSETS
Non-current assets
Exploration and evaluation assets 25,078 25,591
Mineral rights 2,108 2,808
Intangible assets 5,389 -
Mineral properties 2,911 3,880
Property, plant and equipment 188,084 23,054
Leased assets - -
Loans receivable 35 14,680
Cash investments and guarantees 2,497 2,683
Total non-current assets 226,102 72,696
Current assets
Inventories 6,943 -
Trade and other receivables 8,506 3,897
Cash and cash equivalents 127,950 90,457
Total current assets 143,399 94,354
TOTAL ASSETS 369,501 167,050
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 366,180 192,116
Accumulated deficit (27,360) (34,229)
Other components of equity (29,939) 3,068
308,881 160,955
Non-controlling interests (16,618) 82
Total equity 292,263 161,037
Non-current liabilities
Long-term borrowings 2,121 1,388
Finance lease liability - -
Long-term provisions 12,791 1,461
Total non-current liabilities 14,912 2,849
Current liabilities
Trade payable and accrued liabilities 23,574 3,164
Revolving commodity facility - -
Current portion of finance lease liability - -
Current portion of long-term borrowings 38,752 -
Total current liabilities 62,326 3,164
Total liabilities 77,238 6,013
TOTAL EQUITY AND LIABILITIES 369,501 167,050
NATURE OF OPERATIONS AND GOING CONCERN
CONTINGENCIES AND COMMITMENTS
The accompanying notes are an integral part of the condensed consolidated
interim financial statements
Condensed consolidated interim statements of income and comprehensive
income for the periods
For the three months
ended
Nov 30, Nov 30,
2009 2008
Notes $ 000 $ 000
General expenses 18 (3,881) (2,861)
Other income 18 2,254 11,123
Finance (costs) / income (641) (1,576)
Profit / (loss) before taxation 18 (2,268) 6,686
Income tax expense (8) -
PROFIT / (LOSS) FOR THE PERIOD (2,276) 6,686
Other comprehensive income:
Exchange differences on translating foreign
operations (24,698) 33,203
Income tax relating to components of other
comprehensive income - -
Other comprehensive (loss) / income for the
period,
net of tax (24,698) 33,203
TOTAL COMPREHENSIVE (LOSS) / INCOME FOR THE
PERIOD (26,974) 39,889
(Loss) / income attributable to:
Owners of the parent (1,023) 19,281
Non-controlling interest (1,253) (12,595)
(2,276) 6,686
Total comprehensive (loss) / income
attributable to:
Owners of the parent (25,721) 52,484
Non-controlling interest (1,253) (12,595)
(26,974) 39,889
(Loss) / earnings per share (in currency
units):
Basic and diluted 19 (0.01) 0.06
Headline 19 (0.01) 0.06
For the nine months
ended
Nov 30, Nov 30,
2009 2008
$ 000 $ 000
General expenses (11,746) (9,331)
Other income 3,035 13,564
Finance (costs) / income (517) (1,574)
Profit / (loss) before taxation (9,228) 2,659
Income tax expense (11) -
PROFIT / (LOSS) FOR THE PERIOD (9,239) 2,659
Other comprehensive income:
Exchange differences on translating foreign
operations (110,497) 39,131
Income tax relating to components of other
comprehensive income - -
Other comprehensive (loss) / income for the period,
net of tax (110,497) 39,131
TOTAL COMPREHENSIVE (LOSS) / INCOME FOR THE
PERIOD (119,736) 41,790
(Loss) / income attributable to:
Owners of the parent (6,262) 18,280
Non-controlling interest (2,977) (15,621)
(9,239) 2,659
Total comprehensive (loss) / income attributable to:
Owners of the parent (116,759) 57,411
Non-controlling interest (2,977) (15,621)
(119,736) 41,790
(Loss) / earnings per share (in currency units):
Basic and diluted (0.02) 0.02
Headline (0.02) 0.02
The accompanying notes are an integral part of the condensed consolidated
interim financial statements
Condensed consolidated interim statements of equity
Equity attributable to the shareholders
Share
Capital Deficit
$ 000 $ 000
Balance at February 29, 2008 192,116 (34,229)
Shares issued 174,037 -
Profit for the period - 6,869
Stock based compensation - -
Fair value of options exercised 27 -
Currency translation adjustment - -
Fair value of warrants issued - -
Non-controlling interest portion of loss - -
Balance at February 28, 2009 366,180 (27,360)
Shares issued 59,355 -
Loss for the period - (6,262)
Stock based compensation - -
Currency translation adjustment - -
Fair value of warrants issued - -
Non-controlling interest portion of loss - -
Balance at November 30, 2009 425,535 (33,622)
Share
Based
Payment
Reserve Warrants
$ 000 $ 000
Balance at February 29, 2008 3,068 -
Shares issued - -
Profit for the period - -
Stock based compensation 4,288 -
Fair value of options exercised (27) -
Currency translation adjustment - -
Fair value of warrants issued - 744
Non-controlling interest portion of loss - -
Balance at February 28, 2009 7,329 744
Shares issued - -
Loss for the period - -
Stock based compensation 1,773 -
Currency translation adjustment - -
Fair value of warrants issued - -
Non-controlling interest portion of loss - -
Balance at November 30, 2009 9,102 744
Foreign
Currency
Translation
Reserve Subtotal
$ 000 $ 000
Balance at February 29, 2008 - 160,955
Shares issued - 174,037
Profit for the period - 6,869
Stock based compensation - 4,288
Fair value of options exercised - -
Currency translation adjustment (38,012) (38,012)
Fair value of warrants issued - 744
Non-controlling interest portion of loss - -
Balance at February 28, 2009 (38,012) 308,881
Shares issued - 59,355
Loss for the period - (6,262)
Stock based compensation - 1,773
Currency translation adjustment 110,497 110,497
Fair value of warrants issued - -
Non-controlling interest portion of loss - -
Balance at November 30, 2009 72,485 474,244
Non-
controlling Total
interest Equity
$ 000 $ 000
Balance at February 29, 2008 82 161,037
Shares issued - 174,037
Profit for the period - 6,869
Stock based compensation - 4,288
Fair value of options exercised - -
Currency translation adjustment - (38,012)
Fair value of warrants issued - 744
Non-controlling interest portion of loss (16,700) (16,700)
Balance at February 28, 2009 (16,618) 292,263
Shares issued - 59,355
Loss for the period - (6,262)
Stock based compensation - 1,773
Currency translation adjustment - 110,497
Fair value of warrants issued - -
Non-controlling interest portion of loss (2,977) (2,977)
Balance at November 30, 2009 (19,595) 454,649
The accompanying notes are an integral part of the condensed consolidated
interim financial statements
Condensed consolidated interim statements of cashflows
For the three months
ended
Nov 30, Nov 30,
2009 2008
Notes $ 000 $ 000
Cash flows from operating activities
Cash receipts from customers 1,762 -
Cash paid to suppliers and employees (1,181) (668)
Cash (utilized in) / generated from
operations 581 (668)
Interest (paid) / received (235) (1,558)
Income taxes paid (8) -
Net cash generated from / (used in)
operating activities 338 (2,226)
Cash flows from investing activities
Purchase of property, plant and equipment (35,110) (61,673)
Proceeds from sale of property, plant
and equipment - 13
Decrease / (Increase) in rehabilitation
investment (4,084) (416)
(Increase) in deferred exploration
expenses (603) (1,183)
Net cash used in investing activities (39,797) (63,259)
Cash flows from financing activities
(Decrease) / Increase in loans payable - -
(Decrease) in finance lease liability (519) -
Increase in revolving commodity facility 3,299 -
Realised foreign exchange gains 4,697 (317)
Financing of shares in subsidiary - 4,549
Decrease in loans receivable - 14,647
Proceeds from issue of shares - -
Net cash used in financing activities 7,477 18,879
Net (decrease) in cash and cash equivalents (31,982) (46,606)
Net foreign exchange differences 13,271 (4,230)
Cash and cash equivalents at the beginning
of period 10 60,871 61,453
Cash and cash equivalents at the end of
period 10 42,160 10,617
For the nine months
ended
Nov 30, Nov 30,
2009 2008
$ 000 $ 000
Cash flows from operating activities
Cash receipts from customers 5,890 -
Cash paid to suppliers and employees (13,857) 6,684
Cash (utilized in) / generated from operations (7,967) 6,684
Interest (paid) / received (144) (1,531)
Income taxes paid (11) -
Net cash generated from / (used in) operating
activities (8,122) 5,153
Cash flows from investing activities
Purchase of property, plant and equipment (136,256) (122,154)
Proceeds from sale of property, plant and
equipment - 20
Decrease / (Increase) in rehabilitation
investment (4,485) (876)
(Increase) in deferred exploration expenses (1,687) (5,674)
Net cash used in investing activities (142,428) (128,684)
Cash flows from financing activities
(Decrease) / Increase in loans payable (51,987) 45,518
(Decrease) in finance lease liability (1,356) -
Increase in revolving commodity facility 3,299 -
Realised foreign exchange gains 19,391 (409)
Financing of shares in subsidiary - 4,549
Decrease in loans receivable - 14,647
Proceeds from issue of shares 59,356 -
Net cash used in financing activities 28,703 64,305
Net (decrease) in cash and cash equivalents (121,847) (59,226)
Net foreign exchange differences 75,124 (20,614)
Cash and cash equivalents at the beginning of period 88,883 90,457
Cash and cash equivalents at the end of period 42,160 10,617
The accompanying notes are an integral part of the condensed consolidated
interim financial statements
Notes to the condensed consolidated interim financial statements
1. Nature of operations and going concern
Platmin Limited (the "Company") and its subsidiaries (the "Group") is a
development stage Natural Resources Group engaged in the acquisition,
exploration and development of Platinum Group Elements ("PGE") properties in
South Africa. Platmin Limited, the holding company, was incorporated under the
Canada Business Corporation Act on May 23, 2003. The Company is continued
under
the laws of British Columbia, Canada and its Common Shares are listed on the
Toronto Stock Exchange ("TSX") and the Alternative Investment Market ("AIM")
of
the London Stock Exchange. The Company trades under the symbol "PPN" on both
exchanges. On July 22, 2009, the Company listed on the Johannesburg Securities
Exchange Limited ("JSE") with the symbol "PLN".
These condensed consolidated interim financial statements have been prepared
using International Financial Reporting Standards applicable to a going
concern, which contemplates the realization of assets and settlement of
liabilities in the normal course of business as they become due.
For the three months ended November 30, 2009 the Group incurred a loss of
approximately US$2.276 million and for the nine months ended November 30, 2009
the Group incurred a loss of approximately US$9.239 million and as at November
30, 2009 had an accumulated deficit of approximately US$33.622 million. There
are approximately US$18.171 million (ZAR133.704 million) in existing
development commitments for completion of the Pilanesberg project`s
Pilanesberg
Platinum Mines ("PPM") as at November 30, 2009. The Group is dependent on the
successful completion of PPM to generate cash flows in order to fund its
operations and pay debt as it becomes due. Such circumstances may lead to
substantial doubt as to the ability of the Group to meet its obligations as
they become due and accordingly the appropriateness of the use of the
accounting principles applicable to a going concern.
The Group raised US$59.355 million in capital by way of a private placement
during May and had approximately US$42.160 million in cash and cash
equivalents
at November 30, 2009 to fund development activities and meet its contractual
obligations.
The Company`s financing efforts to date, while substantial, may not be
sufficient in and of themselves to enable the Company to fund all aspects of
its operations when taking into consideration forecasted revenue streams based
upon planned production. Management expects that the Company will be able to
secure the necessary financing to meet the Company`s requirements on an
ongoing basis. Nevertheless, there is no assurance that these initiatives will
be successful or sufficient. If the going concern assumption were not
appropriate for these consolidated financial statements, then adjustments to
the carrying values of the assets and liabilities, the reported expenses and
the balance sheet classifications, which could be material, may be necessary.
2. Statement of compliance
The Group has adopted International Financial Reporting Standards ("IFRS") for
the 10 months ending December 31, 2009. These condensed consolidated interim
financial statements for the quarter ended November 30, 2009 have been
prepared
in accordance with IAS 34 - Interim Financial Reporting, and are covered by
IFRS 1 - First-time adoption of IFRS, because they are part of the period
covered by the Group`s first IFRS financial statements for the 10 months ended
December 31, 2009. These are the Group`s first IFRS condensed consolidated
interim financial statements.
These condensed consolidated interim financial statements, including
comparatives, have been prepared on the basis of IFRS. As a result of ongoing
review and possible amendments by interpretive guidance from the International
Accounting Standards Board ("IASB") and International Financial Reporting
Interpretations Committee ("IFRIC"), IFRS finally in effect at December 31,
2009 may differ from IFRS and interpretation statements applied in preparing
the condensed consolidated interim financial statements.
The Group`s consolidated financial statements were prepared in accordance with
Canadian Generally Accepted Accounting Principles ("Canadian GAAP") until 28
February 2009. Canadian GAAP differs in some areas from IFRS. In preparing the
Group`s condensed consolidated interim financial statements for the first
quarter of 2010, management have recorded transition adjustments on applying
IFRS as disclosed in note 21.
Reconciliations, descriptions and explanations of how the transition to IFRS
has affected the reported financial position, financial performance and cash
flows of the Group are provided in note 21. This note includes reconciliations
of equity and profit or loss for comparative periods reported under Canadian
GAAP to those reported for those periods under IFRS.
The preparation of financial statements in accordance with IAS 34 requires the
use of certain critical accounting estimates. It also requires management to
exercise judgement in the process of applying the Group`s accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the condensed consolidated
interim
financial statements are disclosed in note 5.
The financial statements are presented in US dollars, rounded to the nearest
thousand.
The policies set out below have been consistently applied to all the periods
presented.
3. Basis of presentation and recent accounting changes
The unaudited condensed consolidated interim financial statements have been
prepared by the Group in accordance with IFRS. The preparation of these
financial statements is based on accounting policies and practices in
accordance with IFRS and should not be compared to those used in the
preparation of the audited annual consolidated financial statements, as the
annual consolidated financial statements were prepared under accounting
policies and practices in accordance with Canadian GAAP. The accompanying
unaudited condensed consolidated interim financial statements should not be
read in conjunction with the notes to the Group`s audited consolidated
financial statements for the year ended February 29, 2009, since they do not
contain all disclosures required by IFRS for annual financial statements.
These
unaudited condensed interim consolidated financial statements reflect all
normal and recurring adjustments which are, in the opinion of management,
necessary for a fair presentation of the respective interim periods presented.
4. Explanation of transition to IFRS
As stated in note 2, these are the Group`s first condensed consolidated
interim
financial statements for part of the period covered by the first IFRS annual
consolidated financial statements prepared in accordance with IFRS.
The accounting policies adopted under IFRS have been applied in preparing the
condensed consolidated interim financial statements for the nine months ended
November 30, 2009, the comparative information for the three months ended
November 30, 2008, the financial statements for the year ended February 28,
2009 and the preparation of an opening IFRS balance sheet at March 1, 2008
(the Group`s transition date). The Group`s IFRS adoption date is March 1,
2009.
In preparing its opening IFRS balance sheet, the Group has applied the
mandatory exemptions and certain of the optional exemptions from full
retrospective application of IFRS. The Group has adjusted amounts previously
reported in financial statements and interim reports prepared in accordance
with its previous basis of accounting, Canadian GAAP.
A summary of significant changes to the Group`s accounting policies following
the adoption of IFRS and exemptions elected under IFRS 1 - First time adoption
of IFRS is contained in note 5.
An explanation of how the transition from Canadian GAAP to IFRS has affected
the Group`s financial position and performance is set out in the tables in
note
21 and the notes accompanying them.
5. Significant changes to the Group`s accounting policies following adoption
of IFRS 1 - First time adoption of IFRS
* Business combinations
The Group has made an election in terms of IFRS 1 to apply the requirements of
IFRS 3 Business Combinations to all business combinations with effective dates
on or after March 1, 2008. The classification and accounting treatment of
business combinations with effective dates prior to March 1, 2008 has not been
reconsidered.
* Basis of consolidation
Subsidiaries
Subsidiaries are all entities controlled by the Group. Control exists when the
Group has the power to, directly or indirectly, govern the financial and
operating policies of an entity so as to obtain benefits from its activities.
In assessing control, potential voting rights that are presently exercisable
or
convertible, are taken into account in the assessment of whether control
exists. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date on which
control ceases.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred
or assumed at the date of exchange, plus costs directly attributable to the
acquisition.
Identifiable assets acquired and liabilities and contingent liabilities
assumed
in a business combination are measured initially at their fair values at the
acquisition date, irrespective of the extent of any minority interest.
The excess of the cost of acquisition over the fair value of the Group`s share
of the identifiable net assets acquired is recorded as goodwill. If the cost
of
acquisition is less than the fair value of the net assets of the subsidiary
acquired, the difference is recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses are also eliminated.
Accounting policies of subsidiaries have been changed where necessary to
ensure
consistency with the policies adopted by the Group.
Transactions and non-controlling interest
The Group applies a policy of treating transactions with non-controlling
interest as transactions with parties external to the Group. Disposals to
minority interests result in gains and losses for the Group and are recorded
in the statement of comprehensive income. Purchases from minority interests
result in goodwill, being the difference between any consideration paid and
the
relevant share acquired of the carrying value of net assets of the subsidiary.
* Accounting estimates
The preparation of financial statements in accordance with IFRS requires
management to make estimates and assumptions that affect the amounts reported
in the consolidated financial statements and notes to the consolidated
financial statements. These estimates are based on management`s best knowledge
of current events and actions that the Group may undertake in the future.
Significant estimates include those related to the recoverability of the
carrying value of mineral exploration properties and deferred exploration
expenses, the fair value estimates of options issued, the fair value of asset
retirement obligations and contingent liabilities. Actual results may differ
from those estimates.
* Foreign operations
Functional and presentation currency
Items included in the financial statements of each of the Group`s entities are
measured using the currency of the primary economic environment in which the
entity operates ("the functional currency"). The Group`s functional currency
is
the South African Rand ("ZAR"). The consolidated financial statements are
presented in US Dollars ("USD") which is the Group`s presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using
the exchange rates prevailing at the dates of the transactions or valuation
where items are remeasured. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognized in the income statement.
Foreign exchange gains and losses that relate to borrowings and cash and cash
equivalents are presented in the income statement within `finance income or
cost`. All other foreign exchange gains and losses are presented on a net
basis
in the income statement within Other Income.
Group companies
The results and financial position of all the Group entities (none of which
has
the currency of a hyper- inflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
- assets and liabilities for each balance sheet presented are translated at
the
closing rate at the date of that balance sheet;
- income and expenses for each income statement are translated at average
exchange rates (unless this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the rate on the dates of the
transactions); and
- all resulting exchange differences are recognized as a separate component of
equity.
On consolidation, exchange differences arising from the translation of the net
investment in foreign operations, and of borrowings and other currency
instruments designated as hedges of such investments, are taken to
shareholders` equity. When a foreign operation is partially disposed of or
sold, exchange differences that were recorded in equity are recognized in the
income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
IAS 21, The effects of Changes in Foreign Exchange Rates differs from the
Canadian GAAP equivalent, applied by the Group until February 28, 2009. IAS 21
requires an entity to measure its assets, liabilities, revenue and expenses in
its functional currency. It has been determined that as at the transition date
of March 1, 2008, the South African Rand ("ZAR") was the functional currency
of all entities in the Group.
Under IAS 21, the assets and liabilities of the Group are translated from the
Group`s functional currency (ZAR), to the presentation currency at the
reporting date. The income and expenses are translated to the Group`s
presentation currency, which is US Dollar ("USD") at the dates of the
transactions. Foreign currency differences are recognized directly in other
comprehensive income within the foreign currency translation reserve.
In accordance with IFRS 1 optional exemptions, the Group has elected to deem
the foreign currency translation reserve to be zero on the date of transition.
* Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated
depreciation and accumulated impairment losses.
Subsequent costs are included in the asset`s carrying amount or recognized as
a
separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the
item can be measured reliably. The carrying amount of the replaced part is
derecognized. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
Gains and losses on disposals are determined by comparing the proceeds with
the
carrying amount and are recognized within `Other (expense) and income` in the
statement of income and comprehensive income.
Upon completion of mine construction, the assets are transferred into
property,
plant and equipment.
Depreciation and amortization are calculated on a straight-line method to
write
off the cost of the assets to their residual values over their estimated
useful
lives. The depreciation and amortization rates applicable to each category of
property, plant and equipment are as follows:
Useful life
(years)
Vehicles 5
Computer equipment 3
Computer software 2
Office equipment 6
Furniture and fittings 6
Other equipment 5
Leasehold improvements 5
Plant construction Life of mine / Unit of
production
Exploration and evaluation
assets (available for use) Unit of
production
Where parts (components) of an item of property, plant and equipment have
different useful lives or for which different depreciation rates are
appropriate, they are accounted for as separate items of property, plant and
equipment. Estimates of residual values and useful lives of all assets are
assessed annually.
The Group measures the estimated residual value of an item of property, plant
and equipment as the amount the Group estimates it would receive currently
from
the asset if the asset were already of the age and in the condition expected
at
the end of its useful live.
The Group has assessed the useful lives and residual values of all individual
components of property, plant and equipment and no adjustments were required
to
the carrying values of items at the date of transition.
The adjustments to the useful lives and residual values of certain items of
property, plant and equipment and the corresponding change in their carrying
values at March 1, 2008 has also impacted depreciation charges subsequent to
March 1, 2008.
* Deferred stripping costs
Stripping costs comprise the removal of overburden and other waste products
from a mine.
Stripping costs incurred in the development of a mine before production
commences are capitalised as part of the cost of constructing the mine and
subsequently amortised over the life of the mine on a units of production
basis.
Stripping costs incurred during the production stage of a mine are deferred
when this is considered the most appropriate basis for matching the costs
against the relevant economic benefits. The amount deferred is based on the
waste-to-ore ratio (`Stripping ratio`) which is calculated by dividing the
tonnage of waste mined by the quantity of ore mined. Stripping costs incurred
in a period are deferred to the extent that the current period ratio exceeds
the expected life-of-mine ratio. Such deferred costs are then charged to the
income statement to the extent that, in subsequent periods, the current ratio
falls below the life-of-mine ratio. The life-of-mine stripping ratio is
calculated based on proven and probable reserves. Any changes to the life-of-
mine ratio are accounted for prospectively.
Where a mine operates more than one open pit that are regarded as separate
operations for the purpose of mine planning, stripping costs are accounted for
separately by reference to the ore from each separate pit. If, however, the
pits are highly integrated for the purpose of the mine planning, the second
and
subsequent pits are regarded as extensions of the first pit in accounting for
stripping costs. In such cases, the initial stripping, (i.e., overburden and
other waste removal) of the second and subsequent pits is considered to be
production phase stripping relating to the combined operation.
Deferred stripping costs are included as part of "Mining properties". These
form part of the total investment in the relevant cash generating units, which
are reviewed for impairment if events or changes of circumstance indicate that
the carrying value may not be recoverable.
* Impairment of assets
The carrying amount of the Group`s assets (which include Property, plant and
equipment, exploration and evaluation assets, mineral rights and properties
and
intangible assets) is reviewed at each balance sheet date to determine whether
there is any indication of impairment. If such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss. An impairment loss is recognized whenever the carrying
amount of an asset or its cash generating unit exceeds its recoverable amount.
Impairment losses are recognized in the income statement.
The recoverable amount of assets is the greater of an asset`s fair value less
cost to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate
that reflects the current market assessments of the time value of money and
the
risks specific to the asset. For an asset that does not generate cash inflows
largely independent of those from other assets, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
An impairment loss is only reversed if there is an indication that the
impairment loss may no longer exist and there has been a change in the
estimates used to determine the recoverable amount, however, not to an amount
higher than the carrying amount that would have been determined had no
impairment loss been recognized in previous years.
Assets that have an indefinite useful life are not subject to amortisation and
are tested annually for impairment.
* Inventory
Inventories are measured at the lower of cost and net realisable value. The
cost of inventories includes expenditure incurred in acquiring the
inventories,
production or conversion costs and other costs incurred in bringing them to
their existing location and condition.
In the case of manufactured inventories and work in progress, cost includes an
appropriate share of production overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and selling expenses.
* Exploration and evaluation assets and development expenditure
Exploration and evaluation costs, including the cost of acquiring licenses,
are
capitalized as exploration and evaluation assets on a project-by-project basis
pending determination of the technical feasibility and the commercial
viability
of the project. The capitalized costs are presented as either tangible or
intangible exploration and evaluation assets according to the nature of the
assets acquired. Capitalised costs include costs directly related to
exploration and evaluation activities in the area of interest. General and
administrative costs are only allocated to the asset to the extent that those
costs can be directly related to operational activities in the relevant area
of
interest. W hen a license is relinquished or a project is abandoned, the
related costs are recognized in profit and loss immediately.
Exploration and evaluation assets are assessed for impairment if (i)
sufficient
data exists to determine technical feasibilit y and commercial viability, and
(ii) fact and circumstances suggest that the carrying amount exceeds the
recoverable amount (see impairment).
The technical feasibility and commercial viability of extracting a mineral
resource is considered to be determinable when proven reserves are determined
to exist, the rights of tenure are current and it is considered probable that
the costs will be recouped through successful development and exploitation of
the area, or alternatively by sale of the property. Upon determination of
proven reserves, intangible exploration and evaluation assets attributable to
those reserves are first tested for impairment and then reclassified from
exploration and evaluation assets to a separate category within tangible
assets.
Expenditure deemed to be unsuccessful is recognised in profit or loss
immediately.
Upon transfer of "Exploration and evaluation costs" into "Mine development",
all subsequent expenditure on the construction, installation or completion of
infrastructure facilities is capitalised within "Mine development".
After production starts, all assets included in "Mine development" are
transferred to "Producing Mines".
* Mining properties
When further development expenditure is incurred in respect of a mining
property after the commencement of production, such expenditure is carried
forward as part of the mining property when it is probable that additional
future economic benefits associated with the expenditure will flow to the
entity. Otherwise such expenditure is classified as a cost of production.
Depreciation is charged using the units-of-production method, with separate
calculations being made for each area of interest. The units of production
basis results in a depreciation charge proportional to the depletion of proven
and probable reserves.
Mining properties are tested for impairment in accordance with the policy for
impairment as set out above.
* Income taxes
Current taxation
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the reporting date, and
any
adjustment to tax payable in respect of previous years.
Income tax expense is recognised in profit or loss except to the extent that
it
relates to items recognised directly in equity, in which case it is recognised
in equity.
Taxes on income in interim periods are accrued using the tax rate that would
be applicable to expected total annual earnings.
Deferred taxation
Deferred tax is recognised using the balance sheet method, providing for
temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for the following temporary differences: the
initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or
loss, and differences relating to investments in subsidiaries and jointly
controlled entities to the extent that it is probable that they will not
reverse in the foreseeable future. In addition, deferred tax is not recognised
for taxable temporary differences arising on the initial recognition of
goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets, and they
relate
to income taxes levied by the same tax authority on the same taxable entity,
or on different tax entities, but they intend to settle current tax
liabilities
and assets on a net basis or their tax assets and liabilities will be realised
simultaneously.
A deferred tax asset is recognised to the extent that it is probable that
future taxable profits will be available against which the temporary
difference
can be utilised. Deferred tax assets are reviewed at each reporting date and
are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
Additional income taxes that arise from the distribution of dividends are
recognised at the same time that the liability to pay the related dividend is
recognised.
Deferred income tax is provided on temporary differences arising on
investments
in subsidiaries and associates, except where the timing of the reversal of the
temporary difference is controlled by the Group and it is probable that the
temporary difference will not reverse in the foreseeable future.
* Share based payment transactions
Equity settled
The fair value of share options under the employee share incentive schemes and
other equity instruments granted to Group employees is recognised as an
employee expense with a corresponding increase in equity.
The fair value is measured at grant date and expensed over the period during
which the employee becomes unconditionally entitled to the equity instruments.
The total amount to be expensed is determined by reference to the fair value
of
the options granted, excluding the impact of any non-market service and
performance vesting conditions. Non-market vesting conditions are included in
assumptions about the number of options that are expected to vest.
The fair value of the instruments granted is measured using generally accepted
valuation techniques, taking into account the terms and conditions upon which
the instruments are granted. At each balance sheet date, the entity revises
its
estimates of the number of options that are expected to vest based on the non-
marketing vesting conditions. It recognises the impact of the revision to
original estimates, if any, in the income statement, with a corresponding
adjustment to equity. The proceeds received, net of any directly attributable
transaction costs, are credited to share capital when the options are
exercised.
This accounting policy has been applied to all equity instruments granted
after
November 7, 2002 that has not yet vested at January 1, 2005. The increase in
equity arising from vested share options was credited to common shares when
options were exercised under the Group`s previous accounting policies. Refer
to
note 21(c) for the adjustment made to equity in order to comply with IFRS.
* Provisions
Provisions for environmental restoration, restructuring costs and legal claims
are recognized when: the Group has a present legal or constructive obligation
as a result of past events; it is probable that an outflow of resources will
be
required to settle the obligation; and the amount has been reliably estimated.
Provisions are not recognized for future operating losses.
Provisions are measured at the present value of the expenditures expected to
be
required to settle the obligation using a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the
obligation. The increase in the provision due to passage of time is recognized
as interest expense.
An obligation to incur decommissioning and rehabilitation costs occurs when an
environmental disturbance is caused by exploration, evaluation, development or
ongoing production. Costs are estimated on the basis of a formal closure plan
and are subject to regular review.
Decommissioning and site rehabilitation costs arising from the installation of
plant and other site preparation work, discounted to their present value, are
provided when the obligation to incur such costs arises and are capitalized
into the cost of the related asset. These costs are charged against profits
through depreciation of the asset and unwinding of the discount on the
provision. Depreciation is included in operating costs while the unwinding of
the discount is included as a financing cost. Changes in the measurement of a
liability relating to the decommissioning or site rehabilitation of plant and
other site preparation work are added to, or deducted from, the costs of the
related asset.
The costs for the restoration of site damage, which arises during production,
are provided at their net present values and charged against their operating
profit as extraction progresses. Changes in the measurement of a liability
which arises during production are charged against operating profit.
The discount rate used to measure the net present value of the obligations is
the pre-tax rate that reflects the current market assessments of the time
value
of money and the risks specific to the obligation.
In accordance with the Group`s policy and applicable legal requirements, a
provision for decommissioning liabilities is recognized when the asset is
installed and rehabilitation liabilities are recognized when the land is
disturbed.
Changes in estimated decommissioning and rehabilitation liabilities that
occurred before the transition to IFRS have been adjusted for at the
transition date on a net basis in accordance with the provisions of IFRIC 1
and the applicable exemptions under IFRS 1.
* Black economic empowerment transactions
The Group is extending the scope of IFRS 2 - Share based payments to include
the Group`s black economic ownership initiatives in accordance with
international interpretations in this regard. W here goods or services are
received from black economic partners as consideration for equity instruments
of the Group, these transactions are accounted for in terms of IFRS 2, even
when the entity cannot specifically identify the goods or services received.
This accounting policy is applicable to equity instruments granted after March
1, 2006 that has not yet vested at March 1, 2008.
* Revenue
Revenue comprises the fair value of the consideration received or receivable
for the sale of goods and services in the ordinary course of the Group`s
activities. Revenue is shown net of value-added tax, returns, rebates and
discounts and after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably
measured, it is probable that future economic benefits will flow to the entity
and when specific criteria have been met for each of the Group`s activities as
described below. The amount of revenue is not considered to be reliably
measurable until all contingencies relating to the sale have been resolved.
The
Group bases its estimates on historical results, taking into consideration the
type of customer, the type of transaction and the specifics of each
arrangement.
Revenue from the sale of goods is recognized when the significant risks and
rewards of ownership have been transferred to the buyer. Revenue is not
recognized if there are significant uncertainties regarding recovery of the
consideration due.
* Finance income
Finance income is recognized on the time proportion basis, taking account of
the principal debt outstanding and the effective rate over the period to
maturity.
* Borrowing costs
Borrowing costs are recognized as an expense in the period in which they are
incurred, except to the extent that they are directly attributable to the
acquisition or construction of assets that necessarily take a substantial
period to prepare for their intended use or sale ("qualifying assets").
Borrowing costs directly attributable to the acquisition, construction or
production of a qualifying asset is capitalized as part of the cost of that
asset in accordance with the transitional provisions of IAS 23 Borrowing costs
(revised) and IFRS 1 from January 1, 2009.
* Intangible assets
Intangible assets that are acquired by the Group are stated at cost less
accumulated amortization and impairment losses.
Amortization is charged to profit and loss on a straight line basis over the
estimated useful lives of the intangible assets. The estimated useful life for
the water rights is 16 years.
* Leased assets
Leases in terms of which the Group assumes substantially all the risks and
rewards of ownership are classified as finance leases. Upon initial
recognition
the leased asset is measured at an amount equal to the lower of its fair value
and the present value of the minimum lease payments. Subsequent to initial
recognition, the asset is accounted for in accordance with the accounting
policy applicable to that asset.
The Group has made in election in terms of IFRS 1 to apply the transitional
provisions in IFRIC 4 - Determining whether an Arrangement contains a Lease,
therefore determining if any arrangement existed at the transition date.
Other leases are operating leases and the leased assets are not recognized on
the Group`s balance sheet.
* Common control transactions - premium and discount arising on subsequent
purchase from or sales to non controlling interests in subsidiaries
Following the presentation of non-controlling interests in equity any
increases
and decreases in ownership interests in subsidiaries without a change in
control are recognized as equity transactions in the consolidated financial
statements. Accordingly, any premium or discount on subsequent purchases of
equity instruments from or sales of equity instruments to minority interests
are recognized directly in equity of the parent shareholder.
Previously a premium on subsequent purchases of equity instruments from
non-controlling interests were recognized as goodwill and premium or discount
on subsequent disposal of equity instruments to non- controlling interests
were
taken to profit or loss as a capital item in the income statement.
* Segment information
The executive committee reviews the Group`s internal reporting in order to
assess performance and allocate resources. Management has determined the
operating segments based on these reports.
The committee considers the business from a functional perspective,
distinguishing from an operating and exploration site.
The executive committee assesses the performance of the operating sites based
on profitability and for exploration sites on viability.
* Financial assets
The Group classifies its financial assets in the following categories: at fair
value through profit or loss, loans and receivables, and available for sale.
The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at
initial recognition.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets, except for maturities greater than 12 months after
the balance sheet date. These are classified as non-current assets.
The Group`s loans and receivables comprise `Trade and other receivables` and
`Cash and cash equivalents` in the balance sheet.
Financial assets are derecognized when the rights to receive cash flows from
the investments have expired or have been transferred and the Group has
transferred substantially all risks and rewards of ownership.
The Group assesses at each balance sheet date whether there is objective
evidence that a financial asset or a Group of financial assets is impaired.
Trade receivables
Trade receivables are recognized initially at fair value and subsequently
measured at amortized cost using the effective interest method, less provision
for impairment.
A provision for impairment of trade receivables is established when there is
objective evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivables.
Significant financial difficulties of the debtor, probability that the debtor
will enter bankruptcy or financial reorganization, and default or delinquency
in payments (more than 30 days overdue) are considered indicators that the
trade receivable is impaired. The amount of the provision is the difference
between the asset`s carrying amount and the present value of estimated future
cash flows, discounted at the original effective interest rate. The carrying
amount of the asset is reduced through the use of an allowance account, and
the
amount of the loss is recognized in the income statement within `selling and
marketing costs`. When a trade receivable is uncollectible, it is written off
against the allowance account for trade receivables.
Subsequent recoveries of amounts previously written off are credited against
`selling and marketing costs` in the income statement.
Cash and cash equivalents
Cash and cash equivalents include cash and term deposits with an original
maturity of three months or less.
The Group invests cash in interest-bearing instruments with high credit
quality
financial institutions.
Trade payables
Trade payables are recognized initially at fair value and subsequently
measured
at amortized cost using the effective interest method.
* Borrowings
Borrowings are recognized initially at fair value, net of transaction costs
incurred. Borrowings are subsequently stated at amortized cost; any difference
between the proceeds (net of transaction costs) and the redemption value is
recognized in the income statement over the period of the borrowings using the
effective interest method.
Fees paid on the establishment of loan facilities are recognized as
transaction
costs of the loan to the extent that it is probable that some or all of the
facility will be drawn down. In this case, the fee is deferred until the
draw-down occurs. To the extent there is no evidence that it is probable that
some or all of the facility will be drawn down, the fee is capitalized as a
pre-payment for liquidity services and amortized over the period of the
facility to which it relates.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12
months
after the balance sheet date.
* New and amended accounting standards
As this is the Group`s first set of financial statements under IFRS, the Group
has applied all new standards and interpretations with reference to IFRS 1 -
First time adopters of IFRS which were effective for the first time for IFRS
reporters for annual periods commencing on or after January 1, 2009.
* Accounting standards and interpretations issued but not yet effective
Standard and interpretations early adopted
Certain accounting standards and interpretations are in issue which are not
required to be adopted for the current reporting period. As at the date of
these financial statements the following standards and interpretations were in
issue but not yet effective and have been early applied by the Group to this
set of financial statements:
Effective for
annual
periods
commencing
Standard / Interpretation Details of amendment on or
after
IFRS 3 (Revised) - Amendments to accounting for July 1,
2009
Business combinations business combinations
IAS 27 - Consolidated and Consequential amendments from July 1,
2009
separate financial changes to IFRS 3
statements,
Measurement of subsidiary held July 1,
2009
for sale in separate financial
statements
IAS 28 - Investment in Consequential amendments from
changes to July 1,
2009
Effective for
annual
periods
commencing
Standard / Interpretation Details of amendment on or
after
associates IFRS 3
IAS 31 - Interest in Consequential amendments from
changes to July 1,
2009
joint ventures IFRS 3
The early adoption of these standards had the following impact on the Group`s
financial statements:
The standards previously required that the non-controlling interest be
calculated by only attributing the total comprehensive income to the
non-controlling interests only if this will not result in the non-controlling
interests having a deficit balance. IAS 27 now requires an attributing of the
total comprehensive income to the parent and the non-controlling interests
even
if this results in the non-controlling interest having a deficit balance.
The impact of this early application of IAS 27, resulted in accumulated losses
of US$18.342 million (Feb 29, 2008: US$nil; November 30, 2008: US$15.622
million) being attributed to the non-controlling interests.
No other impact was made to the Group`s financial statements.
Standard and interpretations issued and not yet adopted
Certain accounting standards and interpretations are in issue which are not
required to be adopted for the current reporting period. As at the date of
these financial statements the following standards and interpretations were in
issue but not yet effective:
Annual
periods
Standard / Interpretation Details of amendment commencing on or
after
IFRS 2 - Share based Clarification of the scope of July 1,
2009
payments IFRS 2 and IFRS 3 (Revised)
IFRS 5 - Non-current Plan to sell the controlling July 1,
2009
Assets Held for Sale and interest in a subsidiary
Discontinued Operations
Disclosures of non-current January 1,
2010
assets (or disposal groups)
classified as held for sale or
discontinued operations
IFRS 8 - Operating Disclosures of information January 1,
2010
segments about segment assets
IAS 1 - Presentation of Current/non-current classification January 1,
2010
financial statements of convertible instruments
IAS 7 - Statement of cash Classification of expenditures January 1,
2010
flows on unrecognised assets
IAS 10 - Events after the Amendments resulting from July 1,
2009
reporting period the issue of IFRIC 17
IAS 17 - Leases Classification of leases of January 1,
2010
land and buildings
IAS 36 - Impairment of Unit of accounting for goodwill July 1,
2009
assets impairment testing
IAS 38 - Intangible assets Consequential amendments from July 1,
2009
changes to IFRS 3
Measuring the fair value of an
intangible asset acquired in a
business combination
IAS 39 - Financial Clarification of 2 hedge July 1,
2009
accounting issues:
Annual
periods
Standard / Interpretation Details of amendment commencing on or
after
instruments: Recognition
and Measurement (1) Inflation in a financial hedge item
(2) A one-sided risk in a hedged item
Treating loan prepayment January 1,
2010
penalties as closely related
embedded derivatives
Scope exemption for business combination
contracts
Cash flow hedge accounting
IFRIC 9 (amended) - Scope of IFRIC 9 and IFRS 3
(Revised)July 1, 2009
Reassessment of
embedded derivatives
IFRIC 16 (amendment) - Amendment to the restriction on July 1,
2009
Hedges of a net an entity that can hold hedging instruments
investment in a foreign
operation
IFRIC 17 - Distributions of Distributions of non-cash assets July 1,
2009
to owners
non-cash assets to owners
IFRIC 18 - Transfers of Transfers of assets from customers July 1,
2009
assets from customers
Management is in the process of assessing the impact of these standards on the
Group`s financial statements and accounting policies.
* Exemptions from full retrospective application:
A number of optional exemptions from full retrospective application are
available to the Group upon adoption of IFRS. The impact of all these optional
exemptions on the Group is listed below.
The Group has applied the following exemptions:
Exemption Application of exemption
Share-based payment transaction The Group has elected to apply the
exemption share-based payment exemption. It
applied IFRS 2 from March 1, 2008
to
those options that were issued
after
7 November 2002 but that have not
vested by March 1, 2009.
Business Combinations exemption The Group has applied the business
combinations exemption in IFRS 1.
It has not restated business
combinations that took place prior
to the March 1, 2008 transition
date.
Decommissioning liabilities included in The Group recognizes a provision in
the cost of property, plant and equipment respect of environmental
liabilities
exemption relating to contamination caused to
land from the installation of
assets
application of IFRIC 1 has been
applied to determine the and from
its production processes. The
exemption provided in IFRS 1 from
the full retrospective adjustment
required to Property, Plant and
Equipment in respect of the
obligation to decommission existing
production facilities. The
application of this exemption is
detailed in note 21(d).
The Group has not applied the following exemptions:
Exemption Reason for not applying the exemption
Cumulative translation differences There was no cumulative translation
exemption differences previously recorded
under Canadian GAAP.
Employee benefits exemption The Group has no defined benefit
plans; this exemption is not
applicable.
Fair value as deemed cost exemption The Group has elected not to
measure
any items of property, plant and
equipment at fair value as at
March 1, 2008; this exemption is
not
applicable.
Assets and liabilities of subsidiaries, This exemption is not applicable,
as
associates and joint ventures exemption the use of the exemption is made at
the level of the subsidiary,
associate or joint venture that
adopts IFRS later than its parent
company.
Exemption from restatement of The Group has no hedging
comparatives for IAS 32 and IAS 39 relationships or derivatives; this
exemption is not applicable.
Fair value measurement of financial The Group has not applied the
assets or liabilities at initial exemption offered by the revision
of
recognition IAS 39 on the initial recognition
of
the financial instruments measured
at fair value through profit and
loss where there is no active
market. This exemption is therefore
not applicable.
Designation of financial assets and The Group has no securities
financial liabilities exemption classified as available-for-sale
investments or as financial assets
at fair value through profit and
loss; this exemption is not
applicable.
Compound financial instruments The Group has not issued any
compound instruments; this
exemption exemption is not applicable.
Insurance contracts exemption The Group does not issue insurance
contracts; this exemption
is not applicable.
The Group has applied the following mandatory exceptions from retrospective
application:
Applicability
to
Exemption Description of exception the
Group
Derecognition of financial Financial assets and liabilities The
application
assets and liabilities derecognized before March 1, 2008 of
this
exception are not re-recognized under IFRS. The
exemption
application of the exemption from has
no
restating comparatives for IAS 32 and impact
on
IAS 39 means that the Group recognized the
Group.
from March 1, 2009 any financial assets
and financial liabilities derecognized
since March 1, 2008 that does not meet
the IAS 39 derecognition criteria.
Management did not choose to apply the
IAS 39 derecognition criteria to an earlier
date.
Hedge accounting The Group has never applied hedge This
exemption
exception accounting. is
not
applicable.
Estimates exception Estimates under IFRS at March 1, 2008
No
should be consistent with estimates
adjustments
made for the same date under previous
for
GAAP, unless there is evidence that
estimates
those estimates were in error. have
been
made.
Assets held for sale and Management applies IFRS 5 No
discontinued operations adjustment was required. prospectively
exception from March 1, 2009. Any assets held
for sale or discontinued
operations are recognized in accordance
with IFRS 5 only from March 1, 2009.
The Group did not have any assets that
met the held-for-sale criteria during the
period presented.
6. Exploration and evaluation assets
As at Nov 30, As at Nov 30, As at Feb 28, As at Mar 1,
2009 2008 2009 2008
$ 000 $ 000 $ 000 $ 000
Opening
balance 25,078 25,591 25,591 27,132
Additions 1,687 5,674 6,897 -
26,765 31,265 32,488 27,132
Effect
of exchange
rate changes 9,031 (7,635) (7,410) (1,541)
Closing
balance 35,796 23, 630 25,078 25,591
7. Intangible assets
As at Nov 30, As at Nov 30, As at Feb 28, As at Mar 1,
2009 2008 2009 2008
$ 000 $ 000 $ 000 $ 000
Opening
balance 5,389 - - -
Additions - - 5,389 -
5,389 - - -
Effect
of exchange
rate changes 1,924 - - -
7,313 - 5,389 -
PPM entered into an agreement with The Board of Magalies Water and other
parties to build a water pipeline and related infrastructure from the Vaalkop
Water Treatment Works to the mine located at Tuschenkomst. Upon completion,
the
ownership of the water pipeline and related infrastructure will remain with
Magalies Water.
8. Property, plant and equipment
Plant
construction
and mine Land and
development buildings Vehicles
COST ($ 000)
Balance as at March 1, 2008 22,630 - 323
Additions 169,397 721 109
Disposals - - (44)
Foreign exchange movement (5,648) - (81)
Balance as at February 28, 2009 186,379 721 307
Additions 126,993 40 44
Disposals - - -
Foreign exchange movement 66,515 257 125
Balance as at November 30, 2009 379,887 1,018 476
ACCUMULATED DEPRECIATION ($ 000)
Balance as at March 1, 2008 - - 130
Depreciation for the period - - 19
Impairment loss - - -
Foreign exchange movement - - (59)
Balance as at February 28, 2009 - - 90
Depreciation for the period - - 24
Impairment loss - - -
Foreign exchange movement - - 35
Balance as at November 30, 2009 - - 149
Computer Computer Office
equipment software equipment
COST ($ 000)
Balance as at March 1, 2008 182 85 40
Additions 339 344 29
Disposals (1) - (2)
Foreign exchange movement (46) (21) (10)
Balance as at February 28, 2009 474 408 57
Additions 99 481 35
Disposals - - -
Foreign exchange movement 170 145 20
Balance as at November 30, 2009 743 1,034 112
ACCUMULATED DEPRECIATION ($ 000)
Balance as at March 1, 2008 135 63 20
Depreciation for the period 77 138 5
Impairment loss - - -
Foreign exchange movement (44) (34) (5)
Balance as at February 28, 2009 168 167 20
Depreciation for the period 108 81 9
Impairment loss - - -
Foreign exchange movement 73 (1) 8
Balance as at November 30, 2009 349 247 37
Lease-
Furniture hold
and Other improve-
fittings equipment ments
COST ($ 000)
Balance as at March 1, 2008 98 18 85
Additions 88 20 2
Disposals - - -
Foreign exchange movement (24) (4) (22)
Balance as at February 28, 2009 162 34 65
Additions 26 31 4
Disposals - - -
Foreign exchange movement 56 12 24
Balance as at November 30, 2009 244 77 93
ACCUMULATED DEPRECIATION ($ 000)
Balance as at March 1, 2008 29 15 15
Depreciation for the period 19 3 15
Impairment loss - - -
Foreign exchange movement (9) (3) (6)
Balance as at February 28, 2009 39 15 24
Depreciation for the period 22 7 12
Impairment loss - - -
Foreign exchange movement 15 4 10
Balance as at November 30, 2009 76 26 46
TOTAL
$ 000
COST ($ 000)
Balance as at March 1, 2008 23,461
Additions 171,049
Disposals (47)
Foreign exchange movement (5,856)
Balance as at February 28, 2009 188,607
Additions 127,753
Disposals -
Foreign exchange movement 67,324
Balance as at November 30, 2009 383,684
ACCUMULATED DEPRECIATION ($ 000)
Balance as at March 1, 2008 407
Depreciation for the period 276
Impairment loss -
Foreign exchange movement (160)
Balance as at February 28, 2009 523
Depreciation for the period 263
Impairment loss -
Foreign exchange movement 144
Balance as at November 30, 2009 930
Plant
construction
and mine Land and
development buildings Vehicles
CARRYING AMOUNTS ($ 000)
At March 1, 2008 22,630 - 193
At February 28, 2009 186,379 721 217
At November 30, 2009 379,887 1,018 327
Computer Computer Office
equipment software equipment
CARRYING AMOUNTS ($ 000)
At March 1, 2008 47 22 20
At February 28, 2009 306 241 37
At November 30, 2009 394 787 75
Lease-
Furniture hold
and Other improve-
fittings equipment ments
CARRYING AMOUNTS ($ 000)
At March 1, 2008 69 3 70
At February 28, 2009 123 19 41
At November 30, 2009 168 51 47
TOTAL
$ 000
CARRYING AMOUNTS ($ 000)
At March 1, 2008 23,054
At February 28, 2009 188,084
At November 30, 2009 382,754
Included in the plant construction and mine development is a total of
US$71.823
million (February 28, 2009: US$14.657 million) relating to stripping costs
which are capitalized as part of the mine development at the Pilanesberg
Platinum Mine.
9. Leased assets
PPM entered into an arrangement with ESKOM (the state utility supplier) to
supply a minimum quantity of electricity needed in its production process for
a
specified period of time. ESKOM designed and built an electrical installation
adjacent to PPM plant to produce the required electricity and maintains
ownership and control over all significant aspects of operating the facility.
Each month, PPM will pay a fixed capacity charge and a variable charge based
on
actual electricity consumed for the sole used of the facility for 16 years.
IFRIC 4 Arrangements containing a lease, requires an entity to consider
whether
an arrangement may contain a lease at inception of the arrangement if:
Fulfilment of the arrangement is dependent on the use of a specific asset(s);
and The arrangement conveys the right to use the asset(s).
The arrangement with ESKOM therefore constitutes a lease and therefore fall s
within the scope of IAS 17 Leases. An asset (the electrical installation) is
explicitly identified in the arrangement and fulfilment of the arrangement is
dependent on the electrical installation.
This arrangement is further classified as a finance lease due to the
sub-station being constructed exclusively for the use of the Pilanesberg Mine.
As at Nov 30, As at Nov 30, As at Feb 28, As at Mar 1,
2009 2008 2009 2008
$ 000 $ 000 $ 000 $ 000
Opening
balance - - - -
Additions 12,031 - - -
Amortization (358)
11,673 - - -
Effect
of exchange
rate changes 929 - - -
Closing
balance 12,602 - - -
10. Cash and cash equivalents
As at Nov 30, As at Nov 30, As at Feb 28, As at Mar 1,
2009 2008 2009 2008
$ 000 $ 000 $ 000 $ 000
Cash at
bank and
on hand 42,160 10,217 88,883 90,457
Restricted cash -
cash on
collateral - 400 39,067 -
Total
cash and
cash
equivalents 42,160 10,617 127,950 90,457
Cash at banks earns interest at a floating rates based on daily bank deposit
rates. Cash is deposited at highly reputable financial institutions of a high
quality credit standing within the Republic of South Africa and there foreign
affiliates in the United Kingdom. The fair value of cash and cash equivalents
equates the values as disclosed in this note.
Cash placed on deposit as collateral against the bridge loan at the Standard
Bank of South Africa was used to settle the bridge loan facility on August 31,
2009. Refer to note 17 for more disclosure on the bridge loan facility.
For the purpose of the consolidated statement of cash flows, cash and cash
equivalents comprise only the cash at bank and on hand line-item as disclosed
for each period end above.
Cash investments
Cash investments were made relating certain guarantees required by the
Department of Mineral Resources ("DMR"), formerly known as the Department of
Minerals and Energy ("DME") and ESKOM, of which the details are as follows:
Rehabilitation guarantees
The South African DMR require rehabilitation guarantees for all prospecting
and
mining rights. These rehabilitation guarantees primarily relates to the mining
rights for the Pilanesberg and Mphahlele Projects.
These guarantees have been provided to the DMR on an insurance basis with a
portion of the total guarantee being paid over in a separate bank account
controlled by the Group and ceded in favour of the Insurance company.
ESKOM guarantees
On June 17, 2008 a guarantee of US$8.431 million (ZAR84.987 million),
underwritten by an insurance backed guarantee issued by Lombard Insurance was
provided to ESKO M to order critical long lead time material for the
construction of the electrical substation at the Pilanesberg Project. Lombard
Insurance required a cash collateral on a portion of the total amount which
has
been paid over in a separate bank account controlled by the Group and ceded in
favour of Lombard Insurance Company.
The cash deposit has been placed on fixed investment accounts at reputable
financial institutions within the Republic of South Africa. Interest is earned
on a floating interest rate basis. The fair value of the cash investment
equates the values as disclosed in these financial statements.
11. Issued capital
a) Common Shares authorized
Unlimited number of common shares with no par value.
b) Common Shares issued
Number of Amount
Movement during fiscal 2009 shares $000
Balance, March 1, 2008 111,537,048 192,116
Common shares issued 258,416,038 174,037
Exercise of options 49,714 -
Fair value of options exercised - 27
Balance, February 28, 2009 370,002,800 366,180
Movement during fiscal 2010
Balance, March 1, 2009 370,002,800 366,180
Common shares issued 75,015,552 59,355
Balance, November 30, 2009 445,018,352 425,535
c) Share options
The Board of Directors adopted a resolution dated May 3, 2005, which
established a share option plan (the "2005 Stock Option Plan"), pursuant to
which options may be granted to the directors, officers, employees and persons
providing ongoing and contract services to the Group. The purpose of the Plan
is to attract persons by offering to such persons the opportunity to acquire
(or to increase) an equity interest in the Company through the purchase of
shares under the Plan. Subject to adjustment made in the case of a share split
of the issued common shares of the Group, the aggregate number of common
shares
that may be issuable pursuant to options granted under the Plan is fixed at a
maximum of 9% of the outstanding common shares of the Group from time to time
and shall be calculated on an as -needed basis. Prior to the establishment of
the Plan, options were issued to directors and employees, at the discretion of
management, to compensate for services provided. This 2005 Stock Option Plan
was re-approved in accordance with its terms at the Annual General Meeting
held on June 26, 2008.
The Board of Directors adopted a resolution dated June 24, 2007, which
established a stock option plan (the "2005 Stock Option Plan"), pursuant to
which options may be granted to the directors, officers, employees and persons
providing ongoing and contract services to the Group. The purpose of the Plan
is to attract persons by offering to such persons the opportunity to acquire
(or to increase) an equity interest in the Group through the purchase of
shares
under the Plan. The maximum number of common shares reserved for issuance
under
the 2007 Stock Option Plan is 2,500,000 common shares. No stock options have
been granted under the 2007 Stock Option Plan.
The changes in stock options during the six months ended November 30, 2009 and
year ended February 28, 2009 were as follows:
Weighted
Number of average
options exercise price
$
Movement during fiscal 2009
Options outstanding, March 1, 2008 4,461,900 5.29
Options granted 847,000 5.77
Options exercised (60,000) (0.54)
Options cancelled (617,167) (8.64)
Options outstanding, February 28, 2009 4,631,733 4.98
Options exercisable, February 28, 2009 2,745,466 3.50
Movement during fiscal 2010
Options outstanding, March 1, 2009 4,631,733 4.98
Options granted - -
Options exercised - -
Options cancelled - -
Options outstanding, November 30, 2009 4,631,733 4.98
Options exercisable, November 30, 2009 3,334,432 3.99
As at November 30, 2009 the following options were exercisable and
outstanding:
Exercisable
Exercise Number of
price options
Expiry date $
November 3, 2010 1.20 250 ,000
December 6, 2010 1.20 1,460 ,000
September 18, 2011 3.86 75,000
June 1, 2012 5.74 5 70,000
August 28, 2012 7.04 100 ,000
November 7, 2012 10.11 113,600
January 14, 2013 8.91 350,333
January 21, 2013 8.30 133,333
April 25, 2013 7.04 70,000
June 23, 2013 7.08 66,500
June 30, 2013 6.46 66,666
September 23, 2013 2.93 48,000
September 30, 2013 2.97 31,000
Weighted average 3.99 3,334,432
Outstanding
Exercise Number of
price options
Expiry date $
November 3, 2010 1.20 250,000
December 6, 2010 1.20 1,460,000
September 18, 2011 3.86 75,000
June 1, 2012 5.74 570,000
August 28, 2012 7.04 150,000
November 7, 2012 10.11 170,400
January 14, 2013 8.91 976,000
January 21, 2013 8.30 133,333
April 25, 2013 7.04 210,000
June 23, 2013 7.08 200,000
June 30, 2013 6.46 200,000
September 23, 2013 2.93 144,000
September 30, 2013 2.97 93,000
Weighted average 4.98 4,631,733
12. Non-controlling interest
The non-controlling interests are comprised of the following:
$ 000
Balance as at March 1, 2008 82
Non-controlling interest`s share of losses in Boynton (15,422)
Non-controlling interest`s share of losses in Mahube (244)
Non-controlling interest`s share of losses in Taung Platinum (34)
Non-controlling interest`s share of losses in Sengani ( 4)
Balance as at November 30, 2008 (15,622)
Balance as at March 1, 2008 82
Non-controlling interest`s share of losses in Boynton (16,318)
Non-controlling interest`s share of losses in Mahube (332)
Non-controlling interest`s share of losses in Taung Platinum (44)
Non-controlling interest`s share of losses in Sengani ( 6)
Balance as at February 28, 2009 (16,618)
Non-controlling interest`s share of losses in Boynton (2,643)
Non-controlling interest`s share of losses in Mahube (303)
Non-controlling interest`s share of losses in Taung Platinum (32)
Non-controlling interest`s share of losses in Sengani 1
Balance as at November 30, 2009 (19,595)
13. Long-term borrowings
As at Nov 30, As at Nov 30, As at Feb 28, As at Mar 1,
2009 2008 2009 2008
$ 000 $ 000 $ 000 $ 000
Opening
balance 2,121 1,388 1,388 1,388
Interest
and
capital 892 572 1,079 -
Effect
of exchange
rate changes 776 (479) (346) -
Balance
at the
end of
the period 3,789 1,481 2,121 1,388
The long-term loan from Corridor Mining Resources (a subsidiary of Limpopo
Economic Development Enterprise) bears interest at South African prime rate
until otherwise agreed by the shareholders, and has no fixed terms of
repayment. The loan is used by Mahube to fund exploration activities.
The loan is to be repaid from the proceeds generated by the Mphahlele project
in Tameng, a subsidiary of Mahube. The increase in the loan amount payable is
due to the increase in exploration activities and costs incurred in the
preparation of a bankable feasibility study for this project.
The long-term loan from Ranger Minerals bears interest at South African prime
overdraft rate plus 2% until otherwise agreed by the shareholders, and has no
fixed terms of repayment. The loan is used by Defacto Investments (a joint
venture, between Boynton and Ranger Minerals) to fund exploration activities.
14. Finance lease
ESKOM designed and built an electrical installation adjacent to the
Pilanesberg
Mine to produce the required electricity and ESKOM maintains ownership and
control over all significant aspects of operating the facility.
Each month, the Pilanesberg Mine will pay a fixed capacity charge and a
variable charge based on actual electricity consumed. These payments attract
interest at the South African prime overdraft rate plus 2%.
IFRIC 4 Arrangements containing a lease, requires an entity to consider
whether
an arrangement may contain a lease at inception of the arrangement if:
Fulfilment of the arrangement is dependent on the use of a specific asset(s);
and The arrangement conveys the right to use the asset(s).
The arrangement with ESKOM, entered into during the quarter under review,
therefore constitutes a lease and therefore falls within the scope of IAS 17
Leases. An asset (the electrical installation) is explicitly identified in the
arrangement and fulfilment of the arrangement is dependent on the electrical
installation.
This arrangement is further classified as a finance lease due to the sub
-station being constructed exclusively for the use of the Pilanesberg Project.
Reconciliation between the total minimum lease payments and their present
value:
Up to More than 5
1 year 1 to 5 years years Total
$ 000 $ 000 $ 000 $ 000
Minimum lease payments 154 7,393 20,751 28,298
Finance cost (131) (5,967) (9,583) (15,681)
Present value 23 1,426 11,168 12,617
15. Decommissioning and rehabilitation provision
As at As at As at As at
Nov 30, Nov30, Feb 28, Mar 1,
2009 2008 2009 2008
$ 000 $ 000 $ 000 $ 000
Balance at the beginning of
the period 12,791 1,461 1,461 1,461
Increase in liability for
the period 16,500 2,550 11,629 -
Unwinding of interest
(Accretion) 370 43 65 -
29,661 4,054 13,155 1,461
Effect of exchange rate
changes 5,405 (641) (364) -
Balance at the end of the
period 35,066 3,413 12,791 1,461
The Pilanesberg Mine is currently in the commissioning phase and the estimate
represents the current cost of environmental liabilities as at the respective
period end. An annual estimate of the quantum of closure costs is necessary in
order to fulfil the requirements of the DMR, as well as meeting specific
closure objectives outlined in the mine`s Environmental Management Programme.
Although the ultimate amount of the asset retirement obligation is uncertain,
the fair value of the obligation is based on information that is currently
available. The estimated undiscounted liability for the asset retirement
obligation at November 30, 2009 is US$45.612 million (February 28, 2009 is US$
17.527 million). This estimate includes costs for the removal of all current
mine infrastructure and the rehabilitation of all disturbed areas to a
condition as described in the mine`s Environmental Management Programme. The
asset retirement obligation has been determined using a risk free rate of 8.6%
and an inflation rate of 6% over a period of 13 years.
16. Revolving Commodity Facility
On October 9, 2009, the Company signed a definitive agreement with Investec to
provide a twelve month renewable revolving commodity finance facility of up to
ZAR400 million (US$54.420 million at an exchange rate of ZAR7.35: US$1.00) for
working capital purposes.
In terms of this facility Investec will finance up to 91% of PPM`s, platinum,
palladium, gold, copper and nikkel deliveries to Northam. This facility bears
interest at the Johannesburg Interbank Lending 3.0% and is repaid within 2 to
3
months.
As at Nov 30, As at Nov 30, As at Feb 28, As at Mar 1,
2009 2008 2009 2008
$ 000 $ 000 $ 000 $ 000
Balance
at the
beginning
of the
period - - - -
Increase in
liability
for the
period 3,299 - - -
Interest
accrued 9 - - -
3,308 - - -
Effect
of
exchange
rate changes (9) - - -
Balance
at the
end of
the period 3,299 - - -
17. Current portion of long-term borrowings
As at Nov 30, As at Nov 30, As at Feb 28, As at Mar 1,
2009 2008 2009 2008
$ 000 $ 000 $ 000 $ 000
Balance
at the
beginning
of the
period 38,752 - - -
Bridge
loan
facility - 45,518 45,518 -
Interest
on bridge
loan
facility 2,053 2,829 4,243 -
Settlement
of bridge
loan facility (51,987) - -
(11,182) 48,347 49,761 -
Effect
of
exchange rate
changes 11,182 (11,313) (11,009) -
Balance
at the
end of
the period - 37,034 38,752 -
On May 14, 2008, the Company signed a US$35 million (ZAR350 million) bridge
financing facility with Standard Bank of South Africa Limited. The term of the
bridge loan facility was initially for the period of four months to August
2008
and was subsequently extended to August 31, 2009. At the outset, the facility
incurred interest at the Johannesburg Interbank Lending Rate ("JIBAR") plus
3.0%. From March 1, 2009 to August 31, 2009, Platmin provided cash collateral
to Standard Bank of ZAR387.800 million (US$49.870 million) as security against
the loan. This resulted in a reduction in the interest rate to JIBAR plus
0.5%,
The Company earned interest at JIBAR plus 0.1% on cash collateral, bringing
the
net finance cost on the loan to 0.4%.
The bridge loan facility has been used to fund the development and
construction
of the Pilanesberg Mine.
The bridge loan facility was repaid in full on August 31, 2009.
In connection with this facility, the Company issued 300,000 warrants
exercisable at $6.95 per common share from September 15, 2008 until expiry of
the warrants on May 14, 2011.
The Company has classified this facility as held to maturity and the f air
value of the warrants of US$846,238 has been treated as a cost of the loan
transaction and has been amortized to net income using the effective interest
method over the facility term.
18. Loss before taxation
Included in the general expenses are the following:
Three months ended
Nov 30, Nov 30,
2009 2008
$ 000 $ 000
Loss on disposal of fixed assets - 7
Share based payments expense 451 788
Employee expenses 2,286 794
Audit fees 65 30
Consulting and professional fees 90 19
General and administration expenses 989 1,223
3,881 2,861
Nine months ended
Nov 30, Nov 30,
2009 2008
$ 000 $ 000
Loss on disposal of fixed assets - 5
Share based payments expense 1,816 2,314
Employee expenses 5,487 2,742
Audit fees 407 67
Consulting and professional fees 420 1,582
General and administration expenses 3,616 2,621
11,746 9,331
Included in other income are the following:
Three months ended
Nov 30, Nov 30,
2009 2008
$ 000 $ 000
Depreciation 93 88
Other income (30) (4)
Foreign exchange (gain) / loss (2,317) (11,207)
(2,254) (11,123)
Nine months ended
Nov 30, Nov30,
2009 2008
$ 000 $ 000
Depreciation 263 183
Other income (30) (4)
Foreign exchange (gain) / loss (3,268) (13,743)
(3,035) (13,564)
19. (Loss) / earnings per share
Basic loss per share is calculated by dividing the net loss attributable to
shareholders by the weighted average number of common shares outstanding
during
the year.
Three months ended
Nov 30, Nov 30,
2009 2008
$ 000 $ 000
(Loss) / profit attributable to shareholders ($`000) (2,276) 6,686
Weighted average number of common shares
outstanding (`000) 428,348 111,581
Basic and diluted (loss) / profit per common share in
US$ per share (0.01) 0.06
Headline (loss) / earnings per share in US$ per share (0.01) 0.06
Nine months ended
Nov 30, Nov 30,
2009 2008
$ 000 $ 000
(Loss) / profit attributable to shareholders ($`000) (9,239) 2,659
Weighted average number of common shares
outstanding (`000) 428,348 111,581
Basic and diluted (loss) / profit per common share in
US$ per share (0.02) 0.02
Headline (loss) / earnings per share in US$ per share (0.02) 0.02
There are no reconciling items between (loss) / earnings and headline (loss) /
earnings and therefore (loss) / earnings per share and headline (loss) /
earnings per share is the same.
Due to the Group reporting a loss for the period ending November 30, 2009 and
all potential common shares are anti-dilutive, the diluted loss per share is
equal to the basic loss per share.
Due to the Company`s share price being below all the exercise prices for the
options (refer to note 11) for the period ending November 30, 2008 and
February
28, 2009; the diluted loss per share is equal to the basic loss per share.
20. Contingencies and commitments
The Group has committed to capital expenditures on projects of approximately
US$18.171 million (ZAR133.704 million) as at November 30, 2009.
21. Segmented information
Operating segments
The Group comprises the following main operating segments:
* Mining operation: The Pilanesberg Mine is currently in an advanced
development and ramp-up stage. This mine is involved in the mining and
processing of platinum group elements.
* Exploration operations: The Group is engaged in a number of other
exploration
projects within the Republic of South Africa.
* Administrative operations: The Group administration is done at the local
head
office in Centurion, the Republic of South Africa.
Geographic segments
The Group operates in one geographic segment, the Republic of South Africa.
Reporting on profit or loss, assets and liabilities
Mining
2009 2008
Reportable items in the Statement of Comprehensive Income
External revenues - -
Intersegment revenue - -
Finance income 887 156
Finance (expenses) (4,895) -
Depreciation and
amortisation (80) -
Reportable segment
profit/(loss) (6,459) 44
Reportable items in the Statement of Financial Position
Reportable segment
assets 221,459 42,413
Additions to reportable
segment non-current
assets 170,118 23,472
Reportable segment
liabilities 71,554 3,315
Exploration
2009 2008
Reportable items in the Statement of Comprehensive Income
External revenues - -
Intersegment revenue - -
Finance income - -
Finance (expenses) (271) (143)
Depreciation and
amortisation (3) (3)
Reportable segment
profit/(loss) (306) 41
Reportable items in the Statement of Financial Position
Reportable segment
assets 11,241 8,030
Additions to reportable
segment non-current
assets 6,930 5,629
Reportable segment
liabilities 2,208 1,893
Administration
2009 2008
Reportable items in the Statement of Comprehensive Income
External revenues - -
Intersegment revenue - -
Finance income 2,872 2,987
Finance (expenses) (1,449) 14
Depreciation and
amortisation (193) (52)
Reportable segment
profit/(loss) (3,066) (11,737)
Reportable items in the Statement of Financial Position
Reportable segment
assets 136,801 116,575
Additions to reportable
segment non-current
assets 931 220
Reportable segment
liabilities 3,476 803
Consolidated
2009 2008
Reportable items in the Statement of Comprehensive Income
External revenues - -
Intersegment revenue - -
Finance income 3,759 3,143
Finance (expenses) (6,615) (129)
Depreciation and
amortisation (276) (55)
Reportable segment
profit/(loss) (9,831) (11,652)
Reportable items in the Statement of Financial Position
Reportable segment
assets 369,501 167,018
Additions to reportable
segment non-current
assets 177,979 29,321
Reportable segment
liabilities 77,238 6,011
Mining
November 2009 2008
Reportable items in the Statement of Comprehensive Income
External revenues - -
Intersegment revenue - -
Finance income 2,182 844
Finance (expenses) (4,402) (8,411)
Depreciation and
amortisation (131) (44)
Reportable segment
profit/(loss) (5,038) (9,709)
Reportable items in the Statement of Financial Position
Reportable segment
assets 444,096 148,268
Additions to reportable
segment non-current
assets 132,220 91,603
Reportable segment
liabilities 77,852 46,576
Exploration
November 2009 2008
Reportable items in the Statement of Comprehensive Income
External revenues - -
Intersegment revenue - -
Finance income - 796
Finance (expenses) (273) (1,723)
Depreciation and
amortisation (1) (3)
Reportable segment
profit/(loss) (296) (962)
Reportable items in the Statement of Financial Position
Reportable segment
assets 36,816 10,737
Additions to reportable
segment non-current
assets 1,687 5,674
Reportable segment
liabilities 3,863 1,493
Administration
November 2009 2008
Reportable items in the Statement of Comprehensive Income
External revenues - -
Intersegment revenue - -
Finance income 2,015 1,356
Finance (expenses) (39) 5,564
Depreciation and
amortisation (131) (137)
Reportable segment
profit/(loss) (3,905) 13,330
Reportable items in the Statement of Financial Position
Reportable segment
assets 56,477 35,689
Additions to reportable
segment non-current
assets 760 848
Reportable segment
liabilities 1,025 19,005
Consolidated
November 2009 2008
Reportable items in the Statement of Comprehensive Income
External revenues - -
Intersegment revenue - -
Finance income 4,197 2,996
Finance (expenses) (4,714) (4,570)
Depreciation and
amortisation (263) (183)
Reportable segment
profit/(loss) (9,239) 2,659
Reportable items in the Statement of Financial Position
Reportable segment
assets 537,389 194,694
Additions to reportable
segment non-current
assets 134,667 98,125
Reportable segment
liabilities 82,740 67,074
22. IFRS 1 reconciliation
Reconciliation of assets, liabilities and equity
As at March 1, 2008
Canadian Effect of
Note GAAP transition IFRS
ASSETS
Non-current assets
Property, plant and equipment 21(b) 24,425 (1,371) 23,054
Mineral rights 21(b) 3,132 (324) 2,808
Intangible assets 21(b) - - -
Exploration and evaluation
assets 21(b) 27,132 (1,541) 25,591
Mineral properties 21(b) 4,619 (739) 3,880
Loans due from related parties 14,680 - 14,680
Rehabilitation investments (i) 544 (544) -
Cash investments (i) - 2,683 2,683
Total non-current assets 74,532 (1,836) 72,696
Current assets
Inventories 21(b) - - -
Trade and other receivables 3,897 - 3,897
Restricted cash (i) 4,408 (4,408) -
Cash and cash equivalents (i) 88,188 2,269 90,457
Total current assets 96,493 (2,139) 94,354
TOTAL ASSETS 171,025 (3,975) 167,050
As at November 30, 2008
Canadian Effect of
Note GAAP transition IFRS
ASSETS
Non-current assets
Property, plant and equipment 21(b) 143,001 (1,164) 141,837
Mineral rights 21(b) 3,133 (1,045) 2,088
Intangible assets 21(b) - - -
Exploration and evaluation
assets 21(b) 33,136 (9,506) 23,630
Mineral properties 21(b) 4,619 (1,735) 2,884
Loans due from related parties 33 - 33
Rehabilitation investments (i) 884 (884) -
Cash investments (i) - 1,417 1,417
Total non-current assets 184,806 (12,917) 171,889
Current assets
Inventories 21(b) - - -
Trade and other receivables 12,188 - 12,188
Restricted cash (i) 932 (932) -
Cash and cash equivalents (i) 10,217 400 10,617
Total current assets 23,337 (532) 22,805
TOTAL ASSETS 208,143 (13,449) 194,694
As at February 28, 2009
Canadian Effect of
Note GAAP transition IFRS
ASSETS
Non-current assets
Property, plant and equipment 21(b) 214,705 (26,621) 188,084
Mineral rights 21(b) 3,132 (1,024) 2,108
Intangible assets 21(b) 6,162 (773) 5,389
Exploration and evaluation
assets 21(b) 34,062 (8,984) 25,078
Mineral properties 21(b) 4,619 (1,708) 2,911
Loans due from related parties 35 - 35
Rehabilitation investments (i) 879 (879) -
Cash investments (i) - 2,497 2,497
Total non-current assets 263,594 (37,492) 226,102
Current assets
Inventories 21(b) 7,962 (1,019) 6,943
Trade and other receivables 8,506 - 8,506
Restricted cash (i) 40,685 (40,685) -
Cash and cash equivalents (i) 88,883 39,067 127,950
Total current assets 146,036 (2,637) 143,399
TOTAL ASSETS 409,630 (40,129) 369,501
(i) Certain reclassifications have been made on the cash and cash
equivalents
on the statement of financial position. Previously cash was classified
as
cash and cash equivalents, restricted cash and rehabilitation
investments. The Gro up has now classified these as either cash and cash
equivalents or cash investments. The net effect of these
reclassifications is US$(nil).
As at March 1, 2008
Canadian Effect of
Note GAAP transition IFRS
Share capital (i) 192,116 - 192,116
Share-based payment reserve (i) 3,068 - 3,068
Foreign currency translation
reserve (i) - - -
Accumulated loss (i) (30,169) (4,060) (34,229)
Non-controlling interest (i) - 82 82
Total equity (i) 165,015 (3,978) 161,037
LIABILITIES
Non-current liabilities
Borrowings 1,388 - 1,388
Provision for closure cost 21(d) 1,461 - 1,461
Total non-current liabilities 2,849 - 2,849
Current liabilities
Trade and other payables 3,161 3 3,164
Borrowings 21(b) - - -
Total current liabilities 3,161 3 3,164
TOTAL EQUITY AND LIABILITIES 171,025 (3,975) 167,050
As at November 30, 2008
Canadian Effect of
Note GAAP transition IFRS
Share capital (i) 192,144 - 192,144
Share-based payment reserve (i) 6,197 (103) 6,094
Foreign currency translation
reserve (i) - (39,131) (39,131)
Accumulated loss (i) (57,913) 42,048 (15,865)
Non-controlling interest (i) - (15,622) (15,622)
Total equity (i) 140,428 (12,808) 127,620
LIABILITIES
Non-current liabilities
Borrowings 1,481 - 1,481
Provision for closure cost 21(d) 4,054 (641) 3,413
Total non-current liabilities 5,535 (641) 4,894
Current liabilities
Trade and other payables 25,146 - 25,146
Borrowings 21(b) 37,034 - 37,034
Total current liabilities 62,180 - 62,180
TOTAL EQUITY AND LIABILITIES 208,143 (13,449) 194,694
As at February 28, 2009
Canadian Effect of
Note GAAP transition IFRS
Share capital (i) 366,180 - 366,180
Share-based payment reserve (i) 8,175 (102) 8,073
Foreign currency translation
reserve (i) - (38,012) (38,012)
Accumulated loss (i) (41,187) 13,827 (27,360)
Non-controlling interest (i) - (16,618) (16,618)
Total equity (i) 333,168 (40,905) 292,263
LIABILITIES
Non-current liabilities
Borrowings 2,121 - 2,121
Provision for closure cost 21(d) 12,015 776 12,791
Total non-current liabilities 14,136 776 14,912
Current liabilities
Trade and other payables 23,574 - 23,574
Borrowings 21(b) 38,752 - 38,752
Total current liabilities 62,326 - 62,326
TOTAL EQUITY AND LIABILITIES 409,630 (40,129) 369,501
(i) Kindly refer to the Reconciliation of Equity presented on page 3 9.
Reconciliation of loss and comprehensive loss
9 months ended
November 30, 2008
Canadian Effect of
Note GAAP transition IFRS
Revenue - - -
Cost of Operations - - -
Mine operating earnings - - -
Expenses 10,232 (901) 9,331
Operating (loss) (10,232) 901 (9,331)
Other (expenses) / income (16,758) 30,322 13,564
Finance costs (754) (820) (1,574)
Loss before taxation (27,754) 30,413 2,659
Income tax expense - - -
LOSS FOR THE PERIOD (27,754) 30,413 2,659
Other comprehensive income:
Exchange differences on
translating
foreign operations 21(b) - 39,131 39,131
Income tax relating to
components of
other comprehensive income - - -
Other comprehensive income
for the
year, net of tax - 39,131 39,131
TOTAL COMPREHENSIVE (LOSS) /
INCOME FOR THE PERIOD (27,754) 69,544 41,790
Profit / (loss) attributable
to:
Owners of the parent 18,280
Non-controlling interest (15,621)
2,659
Total comprehensive income
attributable to:
Owners of the parent 57,411
Non-controlling interest (15,621)
41,790
Earnings per share (in
currency units):
Basic and diluted 0.02
12 months ended
February 28, 2009
Canadian Effect of
GAAP transition IFRS
Revenue - - -
Cost of Operations - - -
Mine operating earnings - - -
Expenses 21,030 924 21,954
Operating (loss) (21,030) (924) (21,954)
Other (expenses) / income 12,937 2,042 14,979
Finance costs (2,925) 69 (2,856)
Loss before taxation (11,018) 1,187 (9,831)
Income tax expense - - -
LOSS FOR THE PERIOD (11,018) 1,187 (9,831)
Other comprehensive income:
Exchange differences on translating
foreign operations - 38,012 38,012
Income tax relating to components of
other comprehensive income - - -
Other comprehensive income for the
year, net of tax - 38,012 38,012
TOTAL COMPREHENSIVE (LOSS) /
INCOME FOR THE PERIOD (11,018) 39,199 28,181
Profit / (loss) attributable to:
Owners of the parent 6,869
Non-controlling interest (16,700)
(9,831)
Total comprehensive income
attributable to:
Owners of the parent 44,881
Non-controlling interest (16,700)
28,181
Earnings per share (in currency units):
Basic and diluted 0.04
The following reconciliation provides a quantification of the effect, after
taxation, of the transition to IFRS:
As at
transition date
Mar 1,
2008
Reconciliation of equity Notes
Equity previously reported under Canadian GAAP 21(a) 165,015
- Non-controlling interest, previously
disclosed within
accumulated deficit 21(a) 82
- Foreign currency translation reserve deemed
zero on
translation date and subsequent transfers 21(b) -
- Adjustment to accumulated deficit: Foreign
currency
translation differences arising from the
translation of
transactions recorded in a different currency
than the
functional currency. 21(b)
- Differences in translation rules and the
impact thereof on
the share-based payment reserve for warrants 21(b) -
- Adjustment to accumulated deficit due to
separate
disclosure of above items (total of the above) 21(a) (82)
Subtotal after above 165,015
Adjustment upon adoption of IFRS
- Differences arising from applying the
closing rate for all
reporting periods to non-monetary assets 21(b) (3,975)
- Differences arising from applying the
closing rate for all
reporting periods to non-monetary liabilities 21(d) (3)
- Difference due to a different discount rate
being applied to
the decommissioning and rehabilitation provision 21(d) -
Equity reported under IFRS 161,037
For the nine For the year
months ended ended
November 30, Feb 28,
2008 2009
Reconciliation of equity
Equity previously reported under Canadian GAAP 140,428 333,168
- Non-controlling interest, previously
disclosed within
accumulated deficit (15,622) (16,618)
- Foreign currency translation reserve
deemed zero on
translation date and subsequent transfers (39,131) (38,012)
- Adjustment to accumulated deficit:
Foreign currency
translation differences arising from the
translation of
transactions recorded in a different currency
than the
functional currency. 42,048 (2,791)
- Differences in translation rules and the
impact thereof on
the share-based payment reserve for warrants (103) (102)
- Adjustment to accumulated deficit due to
separate
disclosure of above items (total of the above) 12,808 57,523
Subtotal after above 140,428 333,168
Adjustment upon adoption of IFRS
- Differences arising from applying the
closing rate for all
reporting periods to non-monetary assets (13,449) (40,129)
- Differences arising from applying the
closing rate for all
reporting periods to non-monetary liabilities 641 (294)
- Difference due to a different discount
rate being applied to
the decommissioning and rehabilitation
provision - (482)
Equity reported under IFRS 127,620 292,263
The following reconciliation provides a quantification of the effect, after
taxation, of the transition to IFRS:
Nine months ended Year ended
Nov 30, Feb 28,
2008 2009
Reconciliation of income and comprehensive
income for the period
Loss for the period attributable to equity
holders of parent previously reported
under Canadian GAAP (27,745) (11,018)
Retrospective application of previous
Canadian GAAP accounting policy changes
and
restatements
- Profit on dilution of shares included
in loss, now accounted for in equity (4,549) (4,549)
Adjustment upon adoption of IFRS
- Differences due to translation from
re-assessment of functional currency 34,953 5,736
Profit/(loss) for the period attributable
to equity holders of parent reported under
IFRS 2,659 (9,831)
Restatement of statement of cash flows from Canadian GAAP to IFRS
The restatement from Canadian GAAP to IFRS had no significant effect on the
reported cash flows generated by the Group. The reconciling items between
Canadian GAAP and IFRS presentation have no net effect on the cash flows
generated.
Notes to reconciliation
IFRS 1 First-time Adoption of International Financial Reporting Standards
("IFRS") sets forth guidance for the initial adoption of IFRS. Under IFRS 1
the
standards are applied retrospectively at the transitional statement of
financial position date with all adjustment to assets and liabilities taken to
retained earning unless certain exemptions are applied. The Group has applied
the following exemptions to its opening statement of financial positions dated
March 1, 2008:
a) Basis of Consolidation and Business Combinations
The Group has adopted IAS27 (Revised) - Consolidated and Separate Financial
Statements in accordance with the transitional provisions of IFRS 1.
As a result, for the financial year ended February 28, 2009, shareholders
equity will remain unchanged.
However; for the financial year ending February 28, 2009 US$16.618 million of
losses (February 28, 2008: US$0.082 million of profits; November 30, 2008:
US$15.622 million of losses) will be re-allocated from accumulated deficit to
non - controlling shareholder`s interest in order to comply with the
disclosure
requirements in IAS 27 (Revised).
b) Functional currency and foreign operations
IFRS requires that the functional currency of each entity in the consolidated
Group be determined separately in accordance with the indicators as per IAS 21
* - Foreign exchange and should be measured using the currency of the primary
economic environment in which the entity operates ("the functional currency").
The group`s functional currency is the South African rand ("ZAR"). The
consolidated financial statements are presented in United States dollars
("USD") which is the group`s presentation currency.
Under IFRS, the results and financial position of all the group entities (none
of which has the currency of a hyper-inflationary economy) that have a
functional currency different from the presentation currency are translated
into the presentation currency as follows:
** assets and liabilities for each balance sheet presented are translated
at
the closing rate at the date of that balance sheet;
** income and expenses for each income statement are translated at average
exchange rates (unless this average is not a reasonable approximation of
the cumulative effect of the rates prevailing on the transaction dates,
in
which case income and expenses are translated at the rate on the dates of
the transactions); and
** all resulting exchange differences are recognized as a separate
component
of equity.
As a result of the application of the translation rules contained in IAS 21,
for the year ending February 28, 2009, non-monetary assets, which includes
property, plant and equipment, mineral rights, intangible assets, exploration
and evaluation assets, mineral properties as well as inventory, will decrease
by US$40.129 million (February 28, 2008: US$3.975 million; November 30, 2008:
US$13.449 million) with a corresponding adjustment to the foreign currency
translation reserve.
c) Share-based payment transactions
The fair value of share options under the employee share incentive schemes and
other equity instruments granted to Group employees is recognised as an
employee expense with a corresponding increase in equity. The fair value is
measured at grant date and expensed over the period during which the employee
becomes unconditionally entitled to the equity instruments. The total amount
to
be expensed is determined by reference to the fair value of the options
granted, excluding the impact of any non-market service and performance
vesting
conditions. Non-market vesting conditions are included in assumptions about
the
number of options that are expected to vest.
The fair value of the instruments granted is measured using the Black-Scholes
option pricing formula, taking into account the terms and conditions upon
which
the instruments are granted. At each balance sheet date, the entity revises
its
estimates of the number of options that are expected to vest based on the
non-marketing vesting conditions. It recognises the impact of the revision to
original estimates, if any, in the income statement, with a corresponding
adjustment to equity. The proceeds received net of any directly attributable
transaction costs are credited to share capital (nominal value) and share
premium when the options are exercised.
This accounting policy has been applied to all equity instruments granted
after November 7, 2002 that has not yet vested at January 1, 2005.
As under IFRS 2, Canadian GAAP also requires the Company to measure stock-
based
compensation related to stock-options granted to employees at the fair value
of
the options on the date of grant and to recognize such expense over the
vesting
period of the option.
d) Decommissioning and rehabilitation provision
Under Canadian GAAP, asset retirement obligations are measured at fair value,
incorporating market assumptions and discount rates based on the entity`s
credit-adjusted risk-free rate. Adjustments are made to asset retirement
obligations for changes in the timing or amount of the cash flows and the
unwinding of the discount. However, changes in discount rates alone do not
result in a re-measurement of the provision.
Changes in estimates that decrease the liability are discounted using the
discount rate applied upon initial recognition of the liability while changes
that increase the liability are discounted using the current discount rate.
IFRS requires decommissioning provisions to be measured based on management`s
best estimate of the expenditures that will be made and adjustments to the
provision are made in each period for changes in the timing or amount of cash
flow, changes in the discount rate, and the accretion of the liability to fair
value (unwinding of the discount). Furthermore, the estimated future cash
flows
should be discounted using the current rates.
As a result, for the year ended February 28, 2009, the decommissioning
provision will increase by US$775,485 (US$293,686 in translating the provision
at the reporting period closing spot rate and US$481,799 due to the revision
of
the discount rate) with an increase of US$894,170 to the decommissioning asset
(US$418,277 in translating the asset at the reporting period closing spot rate
and US$475,893 due to the revision of the discount rate). The remaining
US$118,685 represents the accretion of the liability which decreases retained
earnings (US$124,591 in translating the asset at the reporting period closing
spot rate and US$(5,905) due to the revision of the discount rate).
Date: 14/01/2010 15:00:01 Produced by the JSE SENS Department.
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