| Mon 30 Aug 2010, 7:05 | | GDO - Gold One International Limited - Reviewed consolidated |
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GDO
GDO
GDO - Gold One International Limited - Reviewed consolidated
interim results for the six months ended 30 June 2010
Gold One International Limited
(Previously BMA Gold Limited)
Registered in Western Australia under the Corporations Act 2001
(Cth)
Registration number ACN: 094 265 756
Registered as an external company in the Republic of South Africa
Registration number: 2009/000032/10
Share code on the ASX/JSE: GDO
ISIN: AU000000GDO5
OTCQX International: GLDZY
("Gold One" or the "company")
REVIEWED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30
JUNE 2010
DIRECTORS REPORT
The directors present their report on the consolidated entity
consisting of Gold One International Limited ("Gold One") and the
entities it controlled for the six months ended 30 June 2009.
1. DIRECTORS
The directors of the company during the whole of the six months and
to the date of this report are as follows:
Mark Wheatley (Chairman)**
Neal Froneman (Chief Executive Officer) *
Christopher Chadwick (Chief Financial Officer) *
Barry Davison **
Kenneth Dicks **
William Harris **
Sandile Swana **
Kenneth Winters **
* - Executive director
** - Non-executive director
2. REVIEW OF OPERATIONS
The company is an Australian and African gold resource company
listed on financial markets operated by the Australian Securities
Exchange ("ASX") and the Stock Exchange in Johannesburg, JSE
Limited ("JSE") (issuer code "GDO"). In addition to Gold One`s
listings on the ASX and the JSE, its American Depositary Receipts
("ADR") are also traded in the United States under the ticker
"GLDZY", where each ADR represents 10 ordinary shares.
Its major asset is the new Modder East mine which went into
commercial production on 1 December 2009 on the East Rand, some 30
kilometres from Johannesburg. It also owns the nearby existing Sub
Nigel mine, which has recently been recommissioned. Its other
projects and targets include Ventersburg and Bothaville, both in
the Free State goldfields, the Tulo concession in Mozambique and
the Etendeka greenfields project in Namibia. Other than the
foregoing, there were no significant changes in the state of
affairs of the group that occurred during the financial half year
under review.
These interim financial statements report the results of the
enlarged entity for the six months ended 30 June 2010 and its
financial position at that date. The financial statements have been
prepared for both the JSE and the ASX.
The financial statements reflect the progress of Gold One since
declaring commercial production of the Modder East mine and its
pursuit of both internal growth, through existing exploration
projects, and external growth, through corporate activity. The
operating results and state of affairs of the group are fully set
out in the attached half-year report and are characterised by the
gold sales, its related production costs, interest paid on the
convertible bonds and the non-cash adjustment for the fair value
revaluation of the convertible bonds.
Operating and financial review
Operating results for the six months
The results for the six months ending 30 June 2010 are
characterised by the gold sold during the reporting period since
Modder East declared commercial production from 1 December 2009.
Revenue for the 6 months is A$32.903 million and reported gross
profit is A$17.147 million.
The non-cash fair value adjustment of A$5.183 million (2009:
A$23.474 million) on the convertible bonds had an impact on the net
loss after tax for the group. It should however be noted that the
principle value of the bonds is fixed at approximately US$62.000
million (A$71.984 million) as at 30 June 2010 and this would be the
value repaid to the bondholders should the bondholders redeem or
put the bonds under term and conditions of the bond agreements.
The net loss after tax of the group decreased to A$3.940 million in
2010 from A$39.477 million in 2009.
Cash balances at the end of the reporting period remain low and
reduced finance income earned to A$316 thousand (2009: A$1.408
million). A portion of the available cash was used to repay A$4.695
million on the convertible bonds during the period under review,
which resulted in a slight decrease in finance costs to A$3.184
million (2009: A$3.572 million).
Headline loss for the period is the loss per period adjusted for
profits and / or losses attributable to once-off expenses and
capital gains or losses. The disclosure of headline earnings or
loss per share is a requirement of the JSE.
CONSOLIDATED 2010 2009
Headline loss per share (0.01) (0.01)
Calculated based on: 805,405,020 684,669,076
Weighted average number of fully paid
ordinary shares (3,881) (38,298)
Headline loss for the period ( A$`000) (0.01) (0.01)
RECONCILIATION OF THE BASIC LOSS AND
HEADLINE LOSS FOR THE PERIOD (A$`000)
Loss for the period (3,940) (39,477)
Impairment of assets 74 -
Gain on sale of assets (15) 1,179
HEADLINE LOSS FOR THE PERIOD (3,881) (38,298)
Share issues during the period:
- Exercise of listed options (542 at A$0.50; 300,000 at A$ 0.22);
- Shares issued in respect of Tulo acquisition (220,357 shares at
ZAR2.269 - non-cash); and
- Exercise of options (258,536 at ZAR 1.35; 109,000 at ZAR 1.74 and
39,734 at ZAR 2.04).
3. AUTHORISED AND ISSUED SHARE CAPITAL
At 30 June 2010, Gold One International Limited had 805,894,985
fully paid ordinary shares in issue. The shares carry one vote per
share and the right to dividends.
4. DIVIDENDS
No dividends were declared or paid to shareholders during the 6
months.
5. HIGHLIGHTS AND EVENTS AFTER THE REPORTING PERIOD
In the opinion of the directors, no other matter or circumstance
has arisen since 30 June 2010, other than initiatives by Gold One
dealing with the possibility of the bondholders exercising their
right of put. Gold One recently announced that it had executed a
mandate and a term sheet for a US$65 million debt facility with two
leading international banks, ABSA Capital (a division of ABSA Bank
Limited) and BNP Paribas.
The term sheets will form the basis of the final agreements to be
executed in the coming quarter. The facility will ensure that Gold
One has the capacity to refinance its convertible bonds.
6. ADDITIONAL DISCLOSURES
The additional information can be found in the notes to the half-
year financial statements. These disclosures have been included to
give a true and fair view of the company`s financial performance
and position as required by the Corporations Act 2001.
7. AUDITORS
PricewaterhouseCoopers continues in office in accordance with
section 327 of the Corporations Act 2001.
8. AUDITOR`S INDEPENDENCE DECLARATION
A copy of the auditor`s independence declaration as required under
section 307C of the Corporations Act 2001 is set out on page 8.
9. ROUNDING OF AMOUNTS
The company is of a kind referred to in Class Order 98/100, issued
by the Australian Securities and Investments Commission, relating
to the "rounding off" of amounts in the directors` report and
financial report. Amounts in the directors` report and financial
report have been rounded off to the nearest thousand dollars in
accordance with the Class Order or in certain cases, the nearest
dollar.
The report is made in accordance with a resolution of directors.
The half-year report, which has been prepared on the going concern
basis, was approved by the board on 26 August 2010 and was signed
on its behalf by:
Neal Froneman (Chief Executive Officer)
Christopher Chadwick (Chief Financial Officer)
on 26 August 2010, at Johannesburg, South Africa.
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2010
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months ended 6 months
30 June 2010 ended 30 June
2009
Note A$`000 A$`000
Revenue from continuing
operations 32,903 1,408
Cost of sales (15,756) -
GROSS PROFIT 17,147 1,408
Other income 136 -
General and administrative
expenses (12,486) (10,161)
Fair value adjustment on
financial liability 4 (5,183) (23,474)
Impairment of assets (74) -
Share base payment expense (1,354) (837)
Exploration and pre-
feasibility expenses (1,477) (1,509)
Gain on foreign exchange
transactions 393 22
Gain/ (loss) on investments 15 (1,79)
OPERATING LOSS BEFORE
FINANCE COSTS (2,883) (35,730)
Finance costs (3,184) (3,572)
LOSS BEFORE INCOME TAX (6,067) (39,302)
Income tax expense 6 2,127 (175)
LOSS FOR THE PERIOD (3,940) (39,477)
OTHER COMPREHENSIVE INCOME,
NET OF TAX:
Currency translation
differences on foreign 771 844
operations
TOTAL COMPREHENSIVE LOSS (3,169) (38,633)
LOSS FOR THE 6 MONTHS
ATTRIBUTABLE TO:
Owners of the parent (3,940) (39,477)
Non-controlling interest - -
(3,940) (39,477)
TOTAL COMPREHENSIVE LOSS
ATTRIBUTABLE TO:
Owners of the parent (3,169) (38,633)
Non-controlling interest - -
(3,169) (38,633)
LOSS PER SHARE
Basic earnings per share (0.01) (0.05)
Diluted earnings per share (0.01) (0.05)
Number of shares in issue 805,894,985 684,699,076
RECONCILIATION OF WEIGHTED
AND DILUTED AVERAGE NUMBER
OF SHARES:
Average number of shares 805,504,020 684,669,076
Unexercised share options 84,924,174 51,612,357
890,329,194 736,281,433
The above consolidated statement of comprehensive income should be
read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 31 December
2010 2009
Note A$`000 A$`000
ASSETS
CURRENT ASSETS
Cash and cash equivalents 7 7,034 15,268
Trade and other receivables 8 6,075 6,753
Inventories 2,047 2,244
Taxation receivable 391 199
15,547 24,464
NON-CURRENT ASSETS
Receivables 18 18
Held-to-maturity investments 1,403 1,293
Property, plant and equipment 9 151,069 142,323
Deferred tax asset 2,324 -
154,814 143,634
TOTAL ASSETS 170,361 168,098
LIABILITIES
CURRENT LIABILITIES
Financial liabilities designated
at fair value 4 81,036 80,293
Trade and other payables 12,469 10,319
Provisions 10 2,270 1,597
95,775 92,209
NON-CURRENT LIABILITIES
Provisions 3,221 3,021
TOTAL LIABILITIES 98,996 95,230
NET ASSETS 71,365 72,868
EQUITY
Contributed equity 11 130,502 130,215
Reserves (1,578) (3,728)
Accumulated loss (57,559) (53,619)
Capital and reserves attributable
to owners of Gold One
International Limited 71,365 72,868
Non-controlling interest - -
TOTAL EQUITY 71,365 72,868
The above consolidated statement of financial position should be
read in conjunction with the accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Contributed Accumulated Total
equity Reserves loss equity
A$`000 A$`000 A$`000 A$`000
BALANCE AT 01 JANUARY 61,876 3,037 (26,471) 38,442
2009
Changes in equity
Total comprehensive - 844 (39,477) (38,633)
loss for the 6 months
Contributions of
equity net of 20,381 - - 20,381
transaction costs
Reverse acquisition
adjustment 7,512 - - 7,512
Employee share - 858 - 858
options
Total changes 27,893 1,702 (39,477) (9,882)
BALANCE AT 30 JUNE 89,769 4,739 (65,948) 28,560
2009
BALANCE AT 01 JANUARY 130,215 (3,728) (53,619) 72,868
2010
Changes in equity
Total comprehensive
loss for the 6 months - 771 (3,940) (3,169)
Contributions of
equity net of 73 - - 73
transaction costs
Employee share 214 1,379 - 1,593
options
Total changes 287 2,150 (3,940) (1,503)
BALANCE AT 30 JUNE 130,502 (1,578) (57,559) 71,365
2010
BALANCE AT 01 JANUARY 61,876 3,037 (26,471) 38,442
2009
Changes in equity
Total comprehensive
loss for the 6 months - 844 (39,477) (38,633)
Contributions of
equity net of 20,381 - - 20,381
transaction costs
Reverse acquisition
adjustment 7,512 - - 7,512
Employee share - 858 - 858
options
Total changes 27,893 1,702 (39,477) (9,882)
BALANCE AT 30 JUNE 89,769 4,739 (65,948) 28,560
2009
The above consolidated statement of changes in equity should be
read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
6 months 6 months
ended ended
30 June 2010 30 June 2009
Note A$ `000 A$ `000
Cash flows from operating
activities
Receipts from customers 29,925 -
Cash paid to suppliers and
employees (incl GST/VAT) (15,841) (13,141)
Cash used in operations 14,084 (13,141)
Finance costs (2,930) (3,689)
Income taxes paid (392) (151)
Net cash inflow / (outflow)
from operating activities 10,762 (16,981)
Cash flows from investing
activities
Payments for property, plant
and equipment (16,068) (28,838)
Proceeds from sale of property, 8
plant and equipment 1,240
Payment of security bonds - (18)
Purchase of investments - 6,060
Finance income 316 1,510
Net cash outflow from investing
activities (14,512) (21,278)
Cash flows from financing
activities
Proceeds from issue of shares 11 286 11,978
Repayment of borrowings (4,695) -
Net cash (outflow) / inflow
from financing activities (4,409) 11,978
Net decrease in cash and cash
equivalents (8,159) (26,281)
Cash and cash equivalents at
the beginning of the period 15,268 39,254
Effect of exchange rate changes
on cash and cash equivalents (75) 916
Cash and cash equivalents at
the end of the period 7 7,034 13,889
The above consolidated statement of cash flows should be read in
conjunction with the accompanying notes
ACCOUNTING POLICIES
1. CORPORATE INFORMATION
The financial report of Gold One International Limited ("Gold One")
for the half-year ended 30 June 2010 was authorised for issue in
accordance with a resolution of the directors on 26 August 2010.
Gold One is a company incorporated in Australia and limited by
shares, which are publicly traded on the Australian Stock Exchange
and the Johannesburg Stock Exchange.
The nature of the operations and principal activities of the group
are described in the Directors` Report.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
This general purpose interim financial report, for the half year
reporting period ending 30 June 2010, has been prepared in
accordance with Australian Accounting Standards, other
authoritative pronouncements of the Australian Accounting Standards
Board ("AASB"), Urgent Issues Group Interpretations and the
Corporations Act 2001. The half-year consolidated financial report
has been prepared in accordance with AASB 134 Interim Financial
Reporting.
The half-year financial report does not include all notes of the
type normally included within the annual financial report and
therefore cannot be expected to provide as full an understanding of
the financial position, financial performance and financing and
investing activities of the consolidated entity as the full
financial report. It is also recommended that the half-year
financial report be considered together with any public
announcements made by Gold One and its controlled entities during
the half-year ended 30 June 2010 in accordance with the continuous
disclosure obligations arising under the Corporations Act 2001.
For the purpose of preparing the half-year report, the half-year
has been treated as a discrete reporting period.
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting period.
Principles of consolidation
Functional and presentation currency
Items included in the financial statements of each entity in the
group are measured using the currency that best reflects the
economic substance of the underlying events and circumstances
relevant to that entity ("the functional currency"). The
consolidated financial statements are presented in Australian
Dollars (AUD), which is the group`s presentation currency. The
functional currency of the company and its subsidiaries is the
South African Rand (ZAR).
Impact of standards issued, but not yet applied
In December 2009, the AASB issued AASB 9 Financial Instruments,
which addresses the classification and measurement of financial
assets and is likely to affect the group`s accounting for its
financial assets. The standard is not applicable until 1 January
2013, but is available for early adoption. The group is yet to
assess its full impact. However, initial indications are that it
may affect the group`s accounting for its available-forsale
financial assets, since AASB 9 only permits the recognition of fair
value gains and losses in other comprehensive income if they relate
to equity investments that are not held for trading. Fair value
gains and losses on available-for-sale debt investments, for
example, will therefore have to be recognised directly in profit or
loss. In the current reporting period, the group has not recognised
any such gain in other comprehensive income. The group has not yet
decided when to adopt AASB 9.
3. SEGMENT INFORMATION
Description of segments
Management has determined the operating segments based on the
reports reviewed by the strategic steering committee that are used
to make strategic decisions.
The committee considers the business from both a functional and a
geographic perspective and has identified three reportable
segments: Gold One, which consists of corporate and administrative
activities; South African operations, which consists of the
extraction of and processing of gold ore into fine gold; and
Projects, which consists of the exploration and feasibility of the
group`s properties.
Segment information provided to the strategic committee:
30 June 2010
Corporate South Projects Consolidated
African
Operations
A$`000 A$`000 A$`000 A$`000
SEGMENT REVENUE
Sales to external - 32,587 - 32,587
customers
Other revenue 28 283 5 316
28 32,870 5 32,903
SEGMENT RESULTS
Loss for the half (12,342) 6,322 (47) (6,067)
year
Income taxes - 2,127 - 2,127
(12,342) 8,449 (47) (3,940)
Segment information provided to the strategic committee
(continued):
30 June 2009
Corporate South Projects Consolidated
African
Operations
A$`000 A$`000 A$`000 A$`000
SEGMENT REVENUE
Sales to external - - - -
customers
Other revenue 10 1,392 6 1,408
10 1,392 6 1,408
SEGMENT RESULTS
Loss for the half (30,181) (9,030) (91) (39,302)
year
Income taxes - (175) - (175)
(30,181) (9,205) (91) (39,477)
Segment information provided to the strategic committee:
30 June 2010
Corporate South Projects Consolidated
African
Operations
A$`000 A$`000 A$`000 A$`000
SEGMENT ASSETS AND
LIABILITIES
Segment assets 328 167,492 2,541 170,361
Segment (83,117) (15,674) (205) (98,996)
liabilities
(82,789) 151,818 2,336 71,365
Segment information provided to the strategic committee:
31 December 2009
Corporate South Projects Consolidated
African
Operations
A$`000 A$`000 A$`000 A$`000
SEGMENT ASSETS AND
LIABILITIES
Segment assets 7 508 156,902 3,688 168,098
Segment (81,946) (13,140) (144) (95,230)
liabilities
(74,438) 143,762 3,544 72,868
The reported measure of assets and liabilities excludes inter-
company assets and liabilities. Corporate assets consist mainly of
cash and cash equivalents managed centrally for the other operating
segments
4. FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE
Financial liabilities consist of convertible bonds classified as
financial liabilities at fair value through profit and loss.
2010 2009
A$`000 A$`000
AT FAIR VALUE
Convertible bond 81,036 80,293
At the end of the period 81,036 80,293
RECONCILIATION OF CONVERTIBLE BOND
Opening balance 80,293 93,846
Fair value adjustment - 7,818
CONVERTIBLE BOND VALUE BEFORE CANCELLATION 80,293 101,664
Convertible bond cancelled - (101,664)
Re-issued bond in US dollars - 101,664
Interest accrued on bond 255 339
Repurchase of bond (4,695) (13,481)
Fair value adjustments 5,183 (8,229)
81,036 80,293
In 2007, 600 8.5% convertible bonds were issued by Aflease Gold
Limited at a nominal value of R1 million per bond. As a result of
the reverse acquisition arrangement in 2009 whereby Aflease Gold
Limited was acquired by Gold One, the original bonds issued were
replaced on 25 May 2009 with 600 8.5% convertible bonds at a total
nominal value of US$ 71.598 million. The bonds mature in December
2012, 5 years from the original issue date at the redemption value
of 109.6% of the nominal value unless converted into the group`s
ordinary shares at the holder`s option, at any time during the
conversion period. All or some of the bonds can be converted at a
fixed rate of 314,026 shares per bond.
At any time on or after 12 December 2009 the group may redeem all,
but not some only, of the bonds for the time being outstanding at
their accreted principal amount, which represents on the relevant
date a gross yield to maturity identical to that applicable in the
case of redemption on the maturity date, together with interest
accrued to the date fixed for redemption. This option is
exercisable only if the market value of the ordinary shares has
accreted with more than 150% of the conversion price. 99 bonds have
been repurchased to date after the bondholders had approved a
partial buyback.
In addition, the group has the option to redeem all the bonds, and
not some only, at any time, at their accreted principal amount
together with interest accrued to the date fixed for redemption, if
85% or more of the originally issued bonds have been exercised and
/ or purchased and cancelled.
The holders have the option to put the bond to the group at the
accreted principal amount plus accrued interest on the third
anniversary of the closing date, being 12 December 2010.
The following debt covenants apply to the convertible bonds:
- Gold One may not create or allow any additional indebtedness in
relation to the Modder East project;
- Gold One may not create or allow any additional indebtedness in
relation to any other project unless such indebtedness complies
with the applicable earnings restriction and debt / equity ratio;
- Gold One is not permitted to sell or dispose of any key assets
without the consent of the bondholders; and
- Gold One is not permitted to sell any other assets other than on
arms length and commercially reasonable terms.
The best evidence of fair value at initial recognition is the
transaction price (i.e. the fair value of the consideration given
or received), unless the fair value of that instrument is evidenced
by comparison with other observable current market transactions in
the same instrument (i.e. without modification or repackaging) or
based on a valuation technique whose variables include only data
from observable markets.
The timing of recognition of deferred day one profit and loss is
determined individually. It is either amortised over the life of
the transaction, deferred until the instrument`s fair value can be
determined using market observable inputs, or realised through
settlement. The financial instrument is subsequently measured at
fair value, adjusted for the deferred day one profit and loss.
Subsequent changes in fair value are recognized immediately in the
statement of comprehensive income without reversal of deferred day
one profits and losses. The group has elected to amortise the
deferred day one profit and loss over the life of the transaction.
The day one loss is carried as part of the fair value of the
convertible bond and the amount released to profit and loss is
included in the fair value adjustment on the convertible bond. The
outstanding day one loss was expensed at the time the bonds were
cancelled and re-issued.
It should however be noted that the principle value of the bonds is
fixed at approximately US$62.000 million (A$71.984 million) as at
30 June 2010 and this would be the value repaid to the bondholders
should the bondholders redeem or put the bonds under term and
conditions of the bond agreements.
5. FINANCIAL RISK MANAGEMENT
The group`s principal financial instruments comprise short-term
deposits and the convertible bonds. The main purpose of these
financial instruments is to invest surplus funds for the group`s
operations, and provide funding for the development of the Modder
East operation. The group has various other financial assets and
liabilities such as trade receivables and trade payables, which
arise directly from its operations.
No derivative transactions have been entered into. It is, and has
been throughout the period under review, the group`s policy that no
trading in financial instruments shall be undertaken. The main
risks arising from the group`s financial instruments is the
liquidity risk. The board reviews and agrees policies for managing
the risk and it is summarised below.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and marketable securities, the availability of funding through
an adequate amount of committed credit facilities and the ability
to close out market positions.
The group manages liquidity risk by continuously monitoring
forecasts and actual cash flows and matching the maturity profiles
of financial assets and liabilities. Surplus funds are generally
only invested in instruments that are tradable in highly liquid
markets.
Financing arrangements
The group did not have access to undrawn borrowing facilities at
the end of the reporting period.
At 30 June 2010 Less than 6 - 12 Over
6 months months 5 Total
years
A$`000 A$`000 A$`000 A$`000
Financial liabilities (73,002) - - (73,002)
designated at fair value
Trade and other payables (12,469) - - (12,469)
(85,471) - - (85,471)
At 31 December 2009 Less 6 - 12 Over
than 6 months 5 Total
months years
A$`000 A$`000 A$`000 A$`000
Financial liabilities - (74,818) - (74,818)
designated at fair value
Trade and other payables (10,319) - (10,319)
(10,319) (74,818) - (85,137)
6. TAXATION
Major components of the tax expense
2010 2009
A$`000 A$`000
REPUBLIC OF SOUTH AFRICA LOCAL - CURRENT
South African income tax - current period (197) 175
DEFERRED INCOME TAX
Originating and reversing temporary 2,324 -
differences
2,127 175
7. CASH AND CASH EQUIVALENTS
2010 2009
A$`000 A$`000
Cash on hand 189 652
Restricted cash* 5,418 4,009
Short-term deposits 1,427 10,607
7,034 15,268
*An amount of A$4.023 million of the restricted cash refers to an-
ongoing dispute with Grinaker-LTA Mining. In the event of an
unfavourable outcome in the arbitration process, the cash balance
of the Group will be reduced by a settlement amount to be
determined by the arbitration process. Refer to note 13 for more
details on the Grinaker-LTA mining dispute.
8. TRADE AND OTHER RECEIVABLES
2010 2009
A$`000 A$`000
Trade receivables 3,974 6,714
Prepayments 147 25
VAT/GST 1,879 14
Due from related party (refer note 14) 75 -
6,075 6,753
Trade and other receivables are non-interest bearing and generally
settled on 30 days terms.
9. PROPERTY, PLANT AND EQUIPMENT
At 30 June 2010, the group`s additions to property, plant and
equipment amounted to A$16.000 million. The majority of the
additions are attributable to the Modder East mine to cater for the
current production levels. The proceeds of A$1.200 million relates
to the final two instalments of the Twin Hills Assets sold in 2009.
All the equipment was acquired for cash.
10. PROVISIONS
Reconciliation of provisions - 2010
Raised Utilised
Opening during during the Closing
balance the year year balance
A$`000 A$`000 A$`000 A$`000
Employee benefits 1,176 800 - 1,976
Other provisions 421 - (127) 294
1,597 800 (127) 2,270
Reconciliation of provisions - 2009
Opening balance Closing balance
A$`000 A$`000
Employee benefits 1,176 1,176
Other provisions 421 421
1,597 1,597
11. CONTRIBUTED EQUITY
2010 2009
A$`000 A$`000
Issued
805 894 985 Ordinary shares 130 502 130 215
Fully paid ordinary shares carry one vote per share and carry the
right to dividends.
The unissued ordinary shares are under the control of the directors
in terms of a resolution of members passed at the last annual
general meeting. This authority remains in force until the next
annual general meeting.
Movement in ordinary shares on issue
Consolidated
Consolidated number of
A$ shares
AT 31 DECEMBER 2008 66,178,767 556,151,869
Issued prior to the scheme of arrangement 21,032,068 101,565,915
Issued on exercise of options prior to the
scheme of arrangement 282,646 2,800,000
Transaction costs prior to the scheme of
arrangement (23,067) -
Elimination of existing legal acquiree
shares - (660,517 784)
Shares of legal acquirer at acquisition date - 24,151,232
Issue of shares on acquisition 7,355,387 660,517,784
Issued on 2 June 2009 for cash on exercise
of listed options 43 60
Issued on 9 July 2009 for cash under a share
placement 10,577,280 33,00,000
Transaction costs on share issue (541,163) -
Issued on 9 July 2009 in respect of the Tulo
acquisition 73,677 230,240
Issued on 24 August 2009 for cash on
exercise of unlisted options 13,797 67,500
Issued on 31 August 2009 for cash under a
share placement 25,401,209 80,689,990
Transaction costs on share issue (1,311,506) -
Issued on 4 September 2009 for cash under a
share placement 1,797,511 5,710,010
Transaction costs on share issue (126,046) -
Transaction costs incurred in RSA (495,189) -
AT 31 DECEMBER 2009 130,215,414 804,966,816
Issued on 11 January 2010 in respect of the
Tulo acquisition 73,300 220,357
Transaction costs on share issue (123) -
Issued on 25 January 2010 for cash on
exercise of share options 16,473 52,225
Issued on 27 January 2010 1 -
Transaction costs on share issue (126) -
Issued on 11 March 2010 for cash on exercise 277 542
of share options
Transaction costs on share issue (126) -
Issued on 6 May 2010 for cash on exercise of
share options 53,053 207,895
Transaction costs on share issue (126) -
Issued on 19 May 2010 for cash on exercise
of share options 102,275 300,000
Transaction costs on share issue (126) -
Issued on 17 May 2010 for cash on exercise
of share options 41,490 147,150
Transaction costs on share issue (126) -
AT 30 JUNE 2010 130,501,530 805,894,985
12. COMMITMENTS
2010 2009
A$`000 A$`000
Guarantees, capital and operating lease 1,199 1,174
commitments
Guarantees 11,024 1,506
Capital commitments 1,797 583
Operating lease commitments 14,020 3,263
1,199 1,174
Guarantees
Environmental rehabilitation of land
Performance bank guarantees with Department of 213 204
Mineral Resources
Performance guarantee - Eskom 986 970
1,199 1,174
The guarantees relate to performance bank and insurance guarantees
with the Department of Mineral Resources for the environmental
rehabilitation of land, as well as performance guarantees with
Eskom for energy.
Capital commitments
The capital commitments relate to capital expenditure commitments
contracted at balance sheet date.
Operating leases - as lessee (expense)
2010 2009
A$`000 A$`000
The future aggregate minimum lease payment
under non-cancellable operating leases are:
- within one year 667 102
- in second to fifth year inclusive 654 343
- later than five years 476 138
1,797 583
The operating lease commitments relate to the leases for the farm
Cloverfield, Parktown offices and Australia offices. No contingent
rent is payable.
13. Contingencies
Grinaker-LTA Mining
At the beginning of August 2009, a dispute was declared between New
Kleinfontein Goldmine (Proprietary) Limited ("NKGM"), a wholly-
owned subsidiary of Gold One, and Grinaker-LTA Mining Contracting,
a business unit of Aveng (Africa) Limited ("Grinaker"), regarding a
claim by Grinaker for payment of the sum of A$4.023 million under
the Contract Works Agreement for the sinking of the vertical shaft
at Modder East. This is part of the restricted cash balance
referred to in note 7.
The dispute was referred to arbitration in August 2009 on the basis
that Grinaker completes the sinking of the vertical shaft and NKGM
pays the sum of A$4.023 million into trust pending the arbitrator`s
ruling. NKGM duly paid the sum of A$4.023 million into trust and
Grinaker has in the interim completed the sinking of the vertical
shaft, the erection of the headgear and the commissioning of the
winder.
Furthermore, Grinaker is claiming an additional A$2.000 million
over and above the amount held in the trust bringing the total
claim to A$6.023 million. Gold One is refuting the full amount of
the claim. NKGM contends that:
- The contract was for a fixed price, plus escalation in accordance
with the contract price adjustment formula and agreed variations;
- Grinaker was unable to achieve the sinking rate as per the
construction program and as a consequence was not able to complete
the shaft within the prescribed period; and
- The additional costs incurred by Grinaker as a result of it not
completing the shaft within the prescribed period are for its own
account.
NKGM does not admit being indebted to Grinaker in the sum of
A$4.023 million. In addition, the A$4.023 million was not paid into
trust as a tender or admission of liability, but solely in terms of
the arbitrator`s directive.
The arbitration is ongoing and no date has been fixed for a
hearing. In the event of an unfavourable outcome in the arbitration
process, the cash balance of the Group will be reduced by a
settlement amount to be determined by the arbitration process.
14.RELATED PARTIES
RELATIONSHIPS
Directors Refer to directors` report note 1
Ultimate holding Gold One International Limited
company
Subsidiaries Gold One Africa Limited
Twin Hills Operations (Proprietary)
Limited
Australian Silicon Operations
(Proprietary) Limited
Gold One Mozambique Lda
Etendeka Prospecting and Mining Company
(Proprietary) Limited
New Kleinfontein Company Limited
New Kleinfontein Goldmine (Proprietary)
Limited
New Kleinfontein Gold Claims (Proprietary)
Limited
New Kleinfontein Rehabilitation Trust
Gold One International Limited Share
Incentive
Scheme
Travel costs of A$29,611 were reimbursed by Uranium One
Incorporated, of which MK Wheatley is a director. Rates were based
on arms length transactions and no amount was outstanding at 30
June 2010.
An amount of A$75,000 was due from Gold One Mozambique Lda, a
wholly owned subsidiary of Gold One Africa. The loan bears no
interest, is unsecured and there are no fixed terms of repayment.
Transactions between related parties are on normal commercial terms
and conditions no more favourable than those available to other
parties unless otherwise stated.
15. EVENTS AFTER THE REPORTING PERIOD
In the opinion of the directors, no other matter or circumstance
has arisen since 30 June 2010, other than initiatives by Gold One
dealing with the possibility of the bondholders exercising their
right of put.
All other matters or circumstances arising after 30 June 2010 are
discussed in detail in the Directors` Report.
16. GOING CONCERN
We draw attention to the fact that at 30 June 2010, the
consolidated entity had accumulated losses of A$57.559 million.
The holders of the convertible bonds have the option to put the
bonds to the group at the accreted principal amount plus accrued
interest on the third anniversary of the closing date, being 12
December 2010.
The ability of the group to continue as a going concern is
dependent on the company obtaining funding to finance the put
option either by way of debt, through the use of equity or a
combination of the two. The directors are of the considered opinion
that it is preferable at this stage of the company`s development to
put in place a pure debt facility as opposed to using cash reserves
and or equity.
Gold one has reported that it has identified two lenders who are in
the process of completing their final due diligence work and
agreeing on the legal agreements before the debt facility can be
implemented post final credit approvals.
The company and the lenders are far advanced in this process and
are looking to have the facility finalized within the third quarter
of 2010.
The directors are further of the opinion that no asset is likely to
be realised for an amount less than the amount at which it is
recorded in the financial report at 30 June 2010. Accordingly, no
adjustments have been made to the financial report relating to the
recoverability and classification of the asset carrying amounts or
the amounts and classification of liabilities that may be necessary
should the group not continue as a going concern.
Therefore, these financial statements have been prepared on a going
concern basis, which contemplates continuity of normal business
activities and realisation of assets and settlements of liabilities
in the ordinary course of business.
17. COMPARATIVE FIGURES
Taxation receivable and taxation payable was previously included in
the trade accounts receivable and trade accounts payable balances.
In the current year the taxation receivable amount was reclassified
and disclosed separately on the face of the balance sheet. The
comparative figures have also been reclassified.
The correction of the classification results in adjustments as
follows:
CONSOLIDATED STATEMENT OF FINANCIAL 2010 2009
POSITION
A$`000 A$`000
Trade and other receivables (594) (220)
Trade and other payables 203 21
Taxation receivable 391 199
DIRECTORS` DECLARATION
In accordance with a resolution of the directors of Gold One
International Limited, I state that:
In the opinion of directors:
(a) the financial statements and notes of the consolidated entity
are in accordance with the Corporations Act 2001, including :
(i)give a true and fair view of the financial position as at 30
June 2010 and the performance for the half-year ended on that date
of the consolidated entity; and
(ii)comply with Accounting Standard AASB 134 "Interim Financial
Reporting" and the Corporations Regulation 2001; and
(b) there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they become due and payable.
On behalf of the Board
Neal Froneman
Chief Executive Officer
Christopher Chadwick
Chief Financial Officer
Dated: 26 August 2010
Johannesburg, South Africa
BOARD OF DIRECTORS
Non-executive Directors
Mark Wheatley (Chairman), Barry Davison, Kenneth Dicks, William
Harris, Sandile Swana, Kenneth Winters
Executive Directors
Neal Froneman (Chief Executive Officer), Christopher Chadwick
(Chief Financial Officer)
Secretaries
Kellie Pickering (Australia), Pierre Kruger (South Africa)
CORPORATE DIRECTORY
REGISTERED OFFICE SOUTH AFRICAN CORPORATE OFFICE
Level 3 First Floor, 45 Empire Road
100 Mount Street Parktown, 2193
NORTH SYDNEY NSW 2060 Gauteng, South Africa
Telephone: +61 2 9963 6400 Telephone: +27 11 726 1047
Facsimile: +61 2 9963 6499 Facsimile: +27 11 726 1087
AUDITORS
PricewaterhouseCoopers
SHARE REGISTRY (Australia) TRANSFER SECRETARIES (South
Registries Limited Africa)
28 Margaret Street Computershare Investor Services
Sydney NSW 2000 (Proprietary) Limited
70 Marshall Street
Johannesburg 2001
SOLICITORS (Australia) SOLICITORS (South Africa)
Blake Dawson Edward Nathan Sonnenburg
2 The Esplanade 1 North Wharf Square
Perth WA 6000 Loop Street
Foreshore
Cape Town 8001
BANKERS (Australia) BANKERS (South Africa)
Commonwealth Bank of Australia First National Bank
Institutional Banking Corporate Banking
Level 22 6th floor, 4 First Place
Darling Park Tower 1 Corner Simmonds and Prichard
201 Sussex Street Street
Sydney NSW 2000 Johannesburg
STOCK EXCHANGE LISTINGS STOCK EXCHANGE LISTINGS (South
(Australia) Africa)
Primary listing Secondary listing
Australian Securities Exchange Johannesburg Stock Exchange
("ASX") ("JSE")
20 Bridge Street One Exchange Square
Sydney NSW 2000 Gwen Lane
Ticker: GDO Sandton 2196
Ticker: GDO
AMERICAN DEPOSITORY RECEIPTS
OTCQX International
Ticker: GLDZY
Level 1 ADR Sponsor
The Bank of New York Mellon
Depository Receipts Division
101 Barclay Street
22nd floor
New York 102386 USA
OTHER KEY MANAGEMENT PERSONNEL
The other key management personnel of the Group are those that
report directly to the officers of the company, being:
IJ Marais (Senior Vice President: South African Operations)
S Caddy (Senior Vice President: Projects)
PB Kruger (Vice President: Legal Counsel and Company Secretary)
Parktown, Johannesburg
30 August 2010
JSE SPONSOR
Macquarie First South Advisers (Propietary) Limited
Date: 30/08/2010 07:05:23 Produced by the JSE SENS Department.
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