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GBG
GBG
GBG - Great Basin Gold - Unaudited interim consolidated financial statements for
the quarter and six months ended June 30, 2010
GREAT BASIN GOLD LIMITED
(Incorporated in Canada and registered as an External Company in South Africa)
(Registration No. 2006/021304/10)
Share Code: GBG ISIN Number: CA3901241057
("Great Basin" or "the Company")
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER AND SIX
MONTHS ENDED JUNE 30, 2010
CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian Dollars)
JUNE 30 December
31
2010 2009
$`000 $`000
Assets
Current assets
Cash and cash equivalents 39,556 89,464
Amounts receivable 18,829 5,053
Inventory 25,095 26,312
Available-for-sale financial instruments - 4,961
Held-for-trading financial instruments - 208
Prepaid expenses 1,424 864
84,904 126,862
Property, plant and equipment 317,659 191,474
Reclamation deposits 4,507 4,590
Restricted cash 11,118 2,439
Mineral property interests 244,998 222,919
TOTAL ASSETS 663,186 548,284
Liabilities and Shareholders` Equity
Current liabilities
Accounts payable and accrued liabilities 68,080 29,206
Current portion of long-term borrowings 21,387 43,768
89,467 72,974
Long-term borrowings 161,569 86,948
Future income taxes 18,939 10,659
Other liabilities 2,361 -
Site reclamation obligations 4,077 3,990
186,946 101,597
Shareholders` equity
Share capital 592,740 567,596
Warrants 13,104 13,104
Contributed surplus 86,568 83,267
Deficit (277,625) (265,713)
Accumulated other comprehensive loss (28,014) (24,541)
386,773 373,713
TOTAL LIABILITIES AND SHAREHOLDERS` EQUITY 663,186 548,284
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the three months ended June 30, 2010 and June 30, 2009
(Expressed in Canadian Dollars)
Three months ended June 30
2010 2009
$`000 $`000
Revenue 37,940 21,876
(Expenses) income
Production cost (24,826) (14,073)
Depletion charge (3,899) (1,337)
Exploration expenses (2,631) (4,429)
Pre-development expenses (3,813) (8,492)
Conference and travel (524) (536)
Environmental impact study (743) (204)
Foreign exchange (loss) gain 930
(2,889)
Legal, accounting, and audit (451) (61)
Mineral properties written off - -
Office and administration (630) (2,418)
Other income 51 26
Salaries and compensation
Salaries and wages (1,891) (1,542)
Stock-based compensation (1,818) (1,956)
Shareholder communications (144) (142)
Trust and filing (18) (152)
Loss before the undernoted and income (6,286) (12,510)
taxes
Interest expense (18) (50)
Interest income 401 1,469
Net realized profit on available-for- 489 -
sale financial instruments
Net realized loss on held-for trading (67) -
financial instruments
Net unrealized (loss)profit on held- (22) 19
for-trading financial instruments
Loss before income taxes (5,503) (11,072)
Taxes 103 (368)
Future income tax recovery - (2,176)
Loss for the period (5,400) (13,616)
Other comprehensive loss
Unrealized gain on available-for-sale 707 361
financial instruments
Realized gain on available-for-sale (1,530) -
financial instruments upon disposal
Unrealized gain on foreign exchange
translation of self-sustaining foreign
operations 8,513 9,699
Other comprehensive gain 7,690 10,060
2,290 (3,556)
Total comprehensive gain (loss) for
the period
Basic and diluted loss per share (0.04)
(0.02)
Weighted average number of common 340,609
shares outstanding (thousands) 333,215
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the six months ended June 30, 2010 and June 30, 2009
(Expressed in Canadian Dollars)
Six months ended June 30
2010 2009
$`000 $`000
Revenue 44,762 33,738
(Expenses) income
Production cost (30,493) (19,391)
Depletion (4,094) (3,194)
Exploration expenses (4,915) (8,367)
Pre-development expenses (6,685) (13,696)
Conference and travel (781) (861)
Environmental impact study (1,239) (360)
Foreign exchange (loss) gain (1,371) 361
Legal, accounting, and audit (654) (320)
Mineral properties written off - (154)
Office and administration (1,542) (3,498)
Other income 72 75
Salaries and compensation
Salaries and wages (3,187) (2,918)
Stock-based compensation (2,708) (6,900)
Shareholder communications (307) (289)
Trust and filing (158) (247)
Loss before the undernoted and (13,300) (26,021)
income taxes
Interest expense (38) (118)
Interest income 1,051 1,935
Net realized profit on available- 489 -
for-sale financial instruments
Net realized loss on held-for- (67) -
trading financial instruments
Net unrealized (loss) profit on (34) 162
held-for-trading financial
instruments
Loss before income taxes (11,899) (24,042)
Taxes (13) (368)
Future income tax recovery - 711
Loss for the period (11,912) (23,699)
Other comprehensive loss
Unrealized gain on available- for- 603 729
sale financial instruments
Realized gain on available-for-sale (1,530) -
financial instruments upon disposal
Unrealized (loss) gain on foreign (2,546) 11,191
exchange translation of self-
sustaining foreign operations
Other comprehensive (loss) income (3,473) 11,920
(15,385) (11,779)
Total comprehensive loss for the
period
Basic and diluted loss per share (0.04) (0.08)
Weighted average number of common 338,761 286,052
shares outstanding
CONSOLIDATED STATEMENTS OF SHAREHOLDERS`EQUITY AND DEFICIT
(Expressed in Canadian Dollars)
Six months ended Six months ended
June 30, 2010 June 30, 2009
$`000 $`000
Common shares Shares Shares
(thousands) (thousands)
Balance at beginning of 567,596 428,657
the period 334,158 215,167
Equity line: shares - 3,911
issued for cash, net of
share issue costs - 2,846
Public offering: shares - 132,700
issued for cash, net of
share issue costs - 115,000
Share Purchase options 1,990 774
exercised 1,038 389
Share purchase warrants 1 -
exercised 1 -
Shares issued for early 3,910 -
settlement of Senior
Secured Notes 2,234 -
Shares issued on 19,243 -
settlement of Rusaf
contingent payment
requirement 10,574 -
Shares issued for - 35
mineral properties - 20
Balance at end of the 592,740 566,077
period 348,005 333,422
Share purchase warrants Warrants
Warrants (thousands)
(thousands)
Balance at beginning of 13,104 24,006
the period 86,179 49,181
Warrants issued - -
pursuant to Senior - 8,248
Secured Notes
Warrants issued - 5,308
pursuant to public
offering, net of share - 57,500
issue costs
Exercised (1) - - -
Expired - - (28,750) (16,210)
Balance at end of the
period 86,178 13,104 86,179 13,104
Contributed surplus
Balance at beginning of 83,267 21,599
the period
Stock-based 3,862 8,544
compensation
Share purchase options (561) (256)
exercised, credited to
share capital
Fair value of share - 16,210
purchase warrant
expired
Balance at end of the 86,568 46,097
period
Deficit
Balance at beginning of (265,713) (217,267)
the period
Loss for the period (11,912) (23,699)
Balance at end of the (277,625) (240,966)
period
Accumulated other
comprehensive
(loss)income
Balance at beginning of (24,541) 213
the period
Unrealized gain on 603 729
available-for-
sale financial
instruments
Realized gain on (1,530) -
available-for -sale
financial instruments
upon disposal
Accumulated unrealized (2,546) 11,191
(loss)gain on foreign
exchange translation of
self-sustaining foreign
operations
Balance at end of the (28,014) 12,133
period
Total Accumulated (305,639) (228,833)
comprehensive loss and
deficit at end of the
period
TOTAL SHAREHOLDERS`
EQUITY
386,773 396,445
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended June 30, 2010 and June 30, 2009
(Expressed in Canadian Dollars)
Three months ended June 30
2010 2009
$`000 $`000
Operating activities
Loss for the period (5,400) (13,616)
Items not involving cash
Production non-cash charges 987 104
Pre-development non-cash charges 329 560
Exploration non-cash charges 62 81
Depreciation 49 51
Future income tax expense - 2,176
Net realized profit on available-for- (489) -
sale financial instruments
Net realized loss on held-for-trading
financial instruments 67 -
Unrealized loss(gain) on held-for- 22 (19)
trading financial instruments
Non-cash stock-based compensation 1,818 1,956
expense
Unrealized foreign exchange loss 1,185 870
Amortization - 15
Depletion 3,899 1,337
Interest expense accrual 164 132
Interest income accrual (73) (29)
Changes in non-cash operating working
capital
Amounts receivable (9,609) (815)
Prepaid expenses (135) (241)
Inventory 10,075 6,716
Accounts payable and accrued 6,821
liabilities 3,691
Cash generated from operating 6,642 6,099
activities
Investing activities
Net proceeds on sale of financial 3,527 -
instruments
Additions to property, plant and (46,104) (41,416)
equipment
Additions to restricted cash (5,882) -
Reclamation deposits (30) (77)
Cash used in investing activities (48,489) (41,493)
Financing activities
Common shares and warrants issued for 215 224
cash, net of issue costs
Net proceeds received from long-term 47,848 -
borrowings
Repayment of long term borrowings (376) (161)
Payment of interest on convertible (5,453)
debentures
Early settlement of 6,925 senior (4,569) -
secured notes
Advances to related parties - (54)
Cash generated from financing 37,665 9
activities
Decrease in cash and cash equivalents (4,182) (35,385)
Cash and cash equivalents, beginning of 41,448 144,205
period
Foreign exchange movement on cash and 2,290 1,356
cash equivalents
Cash and cash equivalents, end of 39,556 110,176
period
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2010 and June 30, 2009
(Expressed in Canadian Dollars)
Six months ended June 30
2010 2009
$`000 $`000
Operating activities
Loss for the period (11,912) (23,699)
Items not involving cash
Production non-cash charges 1,612 520
Pre-development non-cash charges 523 789
Exploration non-cash charges 136 160
Depreciation 101 98
Future income tax recovery - (711)
Net realized profit on available- (489) -
for-sale financial instruments
Net realized loss on held-for- 67 -
trading financial instruments
Unrealized loss (gain) on held- for- 34 (162)
trading on financial instruments
Mineral properties written off - 154
Non-cash stock-based compensation
expense 2,708 6,900
Unrealized foreign exchange (gain) (553) 1,485
loss
Amortization - 29
Depletion 4,094 3,194
Interest expense accrual 164 234
Interest income accrual (145) (57)
Changes in non-cash operating
working capital
Amounts receivable (14,185) (1,668)
Prepaid expenses (581) 2
Inventory 1,982 1,946
Accounts payable and accrued
liabilities 4,469 (1,019)
Cash used in operating activities (11,975) (11,805)
Investing activities
Mineral property acquisition costs (51) -
Net proceeds on sale of financial 3,527 -
instruments
Additions to property, plant and (76,010) (54,559)
equipment
Additions to restricted cash (5,882) -
Reclamation deposits 98 (1,597)
Cash used in investing activities (78,318) (56,156)
Financing activities
Common shares and warrants issued 1,354
for cash, net of issue costs 142,436
Net proceeds received from long- 47,848 -
term borrowings
Repayment of long term borrowings (662) (398)
Payment of interest on convertible (5,453) -
debentures
Early settlement of 6,925 senior (4,569) -
secured notes
Advances to related parties - (238)
Cash generated from financing 38,518 141,800
activities
(Decrease)increase in cash and cash 73,839
equivalents (51,775)
Cash and equivalents, beginning of 89,464 33,549
the period
Foreign exchange movement on cash 1,867 2,788
and cash equivalents
Cash and equivalents, end of the 39,556 110,176
period
CONSOLIDATED SCHEDULE OF EXPLORATION EXPENSES
(Expressed in Canadian Dollars)
Mineral Property Interests Six months Year ended
ended June 30 December 31
2010 2009
$`000 $`000
Burnstone - Exploration
Assays and analysis - 28
Drilling 3 202
Equipment rental - 3
Geological 38 64
Graphics - 1
Site activities 141 269
Exploration expenses incurred during 182 567
the period
Cumulative exploration expenditures, 31,610 31,043
beginning of period
Cumulative exploration expenditures, 31,792 31,610
end of period
Hollister - Exploration
Assays and analysis 89 209
Drilling 1,806 6,886
Engineering - 712
Environmental, socio-economic and 69 1,690
land
Freight 33 190
General office and administration 1,323 853
Geological 50 150
Property fees and exploration option 108 73
payments
Site activities 614 2,955
Exploration expenses incurred during 4,092 13,718
the period
Cumulative exploration expenditures, 58,913 45,195
beginning of period
Cumulative exploration expenditures, 63,005 58,913
end of period
Rusaf Gold - Exploration
Assays and analysis 12 331
Depreciation 136 299
Drilling - 11
Engineering 2 32
Freight 7 86
Geological 8 203
Property fees and exploration option 108 445
payments
Site activities 367 715
Exploration expenses incurred during 640 2,122
the period
Cumulative exploration expenditures, 9,661 7,539
beginning of period
Cumulative exploration expenditures, 10,301 9,661
end of period
Other - Exploration
Depreciation - 14
Equipment rental - 50
Freight - 3
Geological - 89
Property fees and exploration option - 2
payments
Site activities and closure 1 27
Exploration expenses incurred during 1 185
the period
Cumulative exploration expenditures, 4,354 4,169
beginning of the period
Cumulative exploration expenditures, 4,355 4,354
end of period
Total exploration expenses incurred 4,915 16,592
during the period
Cumulative exploration expenditures, 104,538 87,946
beginning of period
Cumulative exploration expenditures, 109,453 104,538
end of period
CONSOLIDATED SCHEDULE OF PRE-DEVELOPMENT EXPENSES
(Expressed in Canadian Dollars)
Mineral Property Interests Six months ended Year ended
June 30 December 31
2010 2009
$`000 $`000
Burnstone - Pre-development
Cumulative pre-development 39,174 39,174
expenditures, beginning of period
Cumulative pre-development 39,174 39,174
expenditures, end of period
Hollister - Pre-development
Depreciation 351 1,732
Property evaluation - 439
Underground access and 5,552 20,152
infrastructure development
Operational costs 610 2,487
Pre-development expenses before the 6,513 24,810
following
Office and administration 172 1,059
Pre-development expenses incurred 6,685 25,869
during the period
Cumulative pre-development 82,723 56,854
expenditures, beginning of period
Cumulative pre-development expenses, 89,408 82,723
end of period
Total pre-development before the 6,513 24,810
following
Office and administration 172 1,059
Total pre-development expenses 6,685 25,869
incurred during the period
Cumulative pre-development 121,897 96,028
expenditures, beginning of period
Cumulative pre-development 128,582 121,897
expenditures, end of period
1. NATURE OF OPERATIONS
These unaudited interim consolidated financial statements have been
prepared in accordance with Canadian Generally Accepted Accounting
Principles ("GAAP"). They do not include all the financial statement
disclosures required for annual financial statements under GAAP. These
unaudited interim consolidated financial statements should be read in
conjunction with the Company`s annual consolidated financial statements
which are available through the internet on SEDAR at www.sedar.com.
Operating results for the three and six month periods ended June 30, 2010
are not necessarily indicative of the results that may be expected for the
full fiscal year ending December 31, 2010. In the opinion of management,
these unaudited interim consolidated financial statements reflect all
adjustments that are necessary for a fair presentation of the results for
the interim periods presented.
2. SIGNIFICANT ACCOUNTING POLICIES
These unaudited interim consolidated financial statements follow the same
accounting policies and methods of application as the Company`s most recent
annual financial statements, except as described in note 3.
3. ADOPTION OF NEW ACCOUNTING POLICIES
Effective January 1, 2010, the Company adopted the following accounting
standards issued by the Canadian Institute of Chartered Accountants
("CICA"). These new standards have been adopted with no restatement of
prior period financial statements.
CICA 1506 - Accounting changes
This Section shall be applied in accounting for changes in accounting
policies, changes in accounting estimates and corrections of prior period
errors. CICA 1506 is amended to exclude from its scope changes in
accounting policies upon the complete replacement of an entity`s primary
basis of accounting. The amendments apply to interim and annual financial
statements for years beginning on/after July 1, 2009. The adoption of this
Section had no impact of the Company`s consolidated financial results.
4. SEGMENT DISCLOSURE
The Company operates in a single reportable operating segment, the
exploration and development of mineral properties. Geographic information
is as follows:
Assets June 30 December 31
2010 2009
$`000 $,000
Canada
Assets other than mineral property
interests 19,836 76,836
Tanzania
Assets other than mineral property
interests 814 729
Mineral property interests 64,066 36,467
United States
Assets other than mineral property
interests 38,139 28,344
Mine development and equipment 41,726 37,660
Mineral property interests 75,681 79,136
South Africa
Assets other than mineral property
interests 42,085 28,476
Mine development and equipment 275,587 153,320
Mineral property interests 105,252 107,316
Total assets 548,284
663,186
Three months Six months ended
ended
Revenue 2010 June 30 2010 June 30
2009 2009
$`000 $`000 $`000 $`000
United States
Ore sales 37,940 21,876 44,762 33,738
During the three and six months ended June 30, 2010 the Company generated
net revenue of $37.9 million and $44.8 million (2009: $21.9 million and
$33.7 million) respectively from its Hollister operation.
Refined gold and silver were sold to Red Kite Explorer Trust under the
terms of an off-take agreement, whilst unprocessed ore was sold under the
terms of an ore purchase agreement to Newmont Mining Corporation (2009:
Various toll milling and ore purchase agreements to Newmont Mining
Corporation and Echo Bay Minerals Company ("Kinross").
5. SUBSEQUENT EVENTS
Term facility agreement
During August 2010, the Company and Credit Suisse agreed on an additional
$27 million (US$25 million) to be advanced under the current facility. The
increase was granted under the same terms as the original facility, with
changes to the gold hedging program that includes a requirement to execute
the zero cost collar program for up to a maximum of 105,000 gold ounces
over the first four years of production from the Company`s Burnstone
Project.
The full set of financial statements and Management Discussion and Analysis are
available on Great Basin`s website: www.grtbasin.com
Approved by the Board of Directors
Ferdi Dippenaar Ronald W Thiessen
Director Director
Ground Floor, 138 West Street 1500 Royal Centre, 1055 West
Sandown, Johannesburg Georgia Street,
South Africa Vancouver, BC Canada V6E 4N7
Tel 011 301 1800 Toll Free 1 800 667?2114
Fax 011 301 1840
www.grtbasin.com
11 August 2010
Johannesburg
Sponsor
Nedbank Capital
Date: 11/08/2010 12:30:01 Produced by the JSE SENS Department.
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