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GBG
GBG
GBG - Great Basin Gold Limited - Unaudited interim consolidated financial
statements for the quarter and six months ended June 30, 2011
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, 2011
CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian Dollars)
JUNE 30 December
31
2011 2010
$`000 $`000
Assets
Current assets
Cash and cash equivalents 38,771 12,855
Trade and other receivable 9,489 9,340
Inventories 27,651 18,440
Other current assets 664 1,283
76,575 41,918
Non-current assets
Loan due from related party 14,571 13,372
Property, plant and equipment 730,530 695,374
Other assets 4,976 4,719
TOTAL ASSETS 826,652 755,383
Liabilities
Current liabilities
Trade payable and accrued liabilities 45,597 61,731
Current portion of long-term debt 41,529 53,516
Current portion of other liabilities 826 278
87,952 115,525
Non-current liabilities
Long-term debt 192,546 156,062
Other liabilities 18,742 12,419
Site reclamation obligations 5,460 5,660
Total liabilities 304,700 289,666
Equity
Share capital 817,434 709,449
Warrants 2,315 6,108
Contributed surplus 81,067 77,676
Deficit (375,303) (353,911)
Accumulated other comprehensive (loss)
income (3,561) 26,395
521,952 465,717
TOTAL LIABILITIES AND EQUITY 826,652 755,383
CONSOLIDATED STATEMENT OF LOSS
For the three months ended June 30, 2011 and June 30, 2010
(Expressed in Canadian Dollars)
Three months ended June 30
2011 2010
$`000 $`000
Revenue 56,738 37,940
Cost of operations
Production cost (30,034) (23,797)
Depletion charge (1,856) (3,401)
Depreciation charge (5,984) (1,033)
Expenses
Exploration expenses (3,443) (2,631)
Pre-development expenses (3,686) (3,813)
Environmental impact study (488) (743)
714 (2,889)
Foreign exchange gain (loss)- net
Corporate and administrative costs (1,938) (1,735)
Salaries and compensation
Salaries and wages (2,171) (1,891)
Share based payments expense (1,574) (1,818)
Profit (loss) from operating 6,278 (5,811)
activities
Net interest (expense) income (5,722) 383
Net realized gain on financial - 422
instruments
Loss on disposal of mineral property (232) -
investment
Net realized gain on financial 70 -
instruments recognized
Net unrealized marked-to-market (1,443) -
adjustments on financial instruments
Loss before income taxes (1,049) (5,006)
Income tax (2) 103
Loss for the period (1,051) (4,903)
Basic and diluted loss per share 0.00 (0.01)
Weighted average number of common 454,559
shares outstanding (thousands) 340,609
CONSOLIDATED STATEMENT OF LOSS
For the six months ended June 30, 2011 and June 30, 2010
(Expressed in Canadian Dollars)
Six months ended June 30
2011 2010
$`000 $`000
Revenue 83,081 44,762
Cost of operations
Production cost (44,180) (28,887)
Depletion charge (2,990) (3,541)
Depreciation charge (7,198) (1,236)
Expenses
Exploration expenses (6,344) (4,915)
Pre-development expenses (7,425) (6,685)
Environmental impact study (925) (1,239)
Foreign exchange gain (loss)- net 3,177 (1,371)
Corporate and administrative cost (4,220) (3,405)
Salaries and compensation
Salaries and wages (4,510) (3,187)
Share based payments expense (3,015) (2,708)
Profit (loss) from operating 5,451 (12,412)
activities
Net interest (expense) income (10,404) 1,013
Net realized gain on financial - 422
instruments
Loss on disposal of mineral (232) -
property investment
Loss on settlement of senior (8,817) -
secured notes
Net unrealized loss on financial (7,209) -
instruments recognized
Net unrealized marked-to market (179) -
adjustments on financial
instruments
Loss before income taxes (21,390) (10,977)
Income tax (2) (13)
Loss for the period (21,392) (10,990)
Basic and diluted loss per share (0.05) (0.03)
Weighted average number of common 443,155 338,761
shares outstanding
CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME
For the three months ended June 30, 2011 and June 30, 2010
(Expressed in Canadian Dollars)
Three months ended June 30
2011 2010
$`000 $`000
Loss for the period (1,051) (4,903)
Other comprehensive (loss) income
Changes in fair value of financial - 707
instruments
Realized gain on available-for-sale - (1,530)
financial instruments upon transfer
to net income
Cumulative translation adjustment (3,307) (7,703)
Other comprehensive (loss) income (3,307) 6,880
for the period
Comprehensive (loss) income for the (4,358) 1,977
period
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
For the six months ended June 30, 2011 and June 30, 2010
(Expressed in Canadian Dollars)
six months ended June 30
2011 2010
$`000 $`000
Loss for the period (21,392) (10,990)
Other comprehensive loss
Changes in fair value of financial - 603
instruments
Realized gain on available-for-sale - (1,530)
financial instruments upon transfer
to net income
Cumulative translation adjustment (29,956) (2,167)
Other comprehensive loss for the (29,956) (3,094)
period
Comprehensive loss for the period (51,348) (14,084)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS`EQUITY AND DEFICIT
(Expressed in Canadian Dollars)
Six months ended Six months ended
June 30, 2011 June 30, 2010
$`000 $`000
Common shares Shares Shares
(thousands) (thousands)
Balance - January 1 709,449 567,596
414,015 334,158
Shares issued upon 4,206 1,990
exercise of share 1,716 1,038
options
Proceeds on issuance of 81,190 -
shares for public
offering net of issue
costs 33,827 -
Shares issued for 22,426 1
warrants 15,473 1
Shares issued for early - 3,910
settlement of senior
secured notes - 2,234
Shares issued for - 19,243
mineral properties - 10,574
Other 100 163 - -
Balance - June 30 817,434 592,740
465,131 348,005
Share purchase warrants Warrants
Warrants (thousands)
(thousands)
Balance - January 1 6,108 13,104
24,918 86,179
Proceeds on issuing (3,793) -
shares (15,473) (1)
Balance - June 30
9,445 2,315 86,178 13,104
Contributed surplus
Balance - January 1, 77,676 74,403
2011
Share based 4,965 3,862
compensation
Share purchase options (1,574) (561)
exercised, credited to
share capital
Balance - June 30 81,067 77,704
Deficit
Balance - January 1 (353,911) (326,770)
Loss for the period (21,392) (10,990)
Balance - June 30 (375,303) (337,760)
Accumulated other
comprehensive loss
Balance - January 1 26,395 927
Other comprehensive (29,956) (3,094)
loss
Balance - June 30 (3,561) (2,167)
Total Accumulated (378,864) (339,927)
comprehensive loss and
deficit at end of the
period
TOTAL SHAREHOLDERS`
EQUITY
521,952 343,621
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three months ended June 30, 2011 and June 30, 2010
(Expressed in Canadian Dollars)
Three months ended June 30
2011 2010
$`000 $`000
Operating activities
Loss for the period (1,051) (4,903)
Items not involving cash
Production non-cash charges 797 1,183
Pre-development non-cash charges (13) 329
Exploration non-cash charges 32 62
Depreciation 6,160 (148)
Share donation 163 -
Net realized profit on financial - (422)
instruments
Unrealized loss on financial 46 22
instruments
Unrealized (gain) loss on financial (70) -
instruments recognized
Unrealized marked-to-market adjustments 1,443 -
on financial instruments
Share based payments expense 1,574 1,818
Unrealized foreign exchange (gain) loss (446) 1,186
Depletion 1,856 3,401
Interest expense 6,126 18
Interest income (404) (401)
Changes in non-cash operating working
capital
Trade and other receivables (2,362) (9,609)
Other current assets 398 (135)
Inventories 830 10,075
Trade payables and accrued liabilities 8,676 3,691
Cash generated from operating 23,755 6,167
activities
Investing activity
Advance to related party (1,468) -
Net proceeds on sale of financial - 3,527
instruments
Purchase of property, plant and (56,657) (46,104)
equipment
Additions to restricted cash - (5,882)
Interest income 152 426
Reclamation deposits (99) (30)
Cash used in investing activities (58,072) (48,063)
Financing activities
Common shares and warrants issued for 14,338 215
cash, net of issue costs
Proceeds on issuance of debt - 47,848
Repayment of debt (2,069) (4,945)
Interest expense (7,912) (5,404)
Cash generated from financing 4,357 37,714
activities
Decrease in cash and cash equivalents (29,960) (4,182)
Cash and cash equivalents, beginning of 68,018 41,448
period
Foreign exchange movement on cash and 713 2,290
cash equivalents
Cash and cash equivalents, end of 38,771 39,556
period
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended June 30, 2011 and June 30, 2010
(Expressed in Canadian Dollars)
Six months ended June 30
2011 2010
$`000 $`000
Operating activities
Loss for the period (21,392) (10,990)
Items not involving cash
Production non-cash charges 967 1,236
Pre-development non-cash charges 375 523
Exploration non-cash charges 91 136
Depreciation 7,554 107
Share donation 163 -
Net realized profit on financial - (422)
instruments
Unrealized loss on financial 16 34
instruments
Unrealized loss on financial 7,209 -
instruments recognized
Unrealized marked-to-market 179 -
adjustments on financial
instruments
Share based payments expense 3,015 2,708
Unrealized foreign exchange (gain) (3,258) (553)
loss
Depletion 2,990 3,541
Interest expense 11,197 67
Interest income (793) (1,080)
Loss on settlement of senior 8,817 -
secured notes
Changes in non-cash operating
working capital
Trade and other receivables (578) (14,185)
Other current expenses 581 (581)
Inventories (7,710) 1,982
Trade payable and accrued 4,850 4,469
liabilities
Cash generated (utilized) by 14,273 (13,008)
operating activities
Investing activities
Advance to related party (1,468) -
Net proceeds on sale of financial - 3,527
instruments
Purchase of property, plant and (93,191) (76,061)
equipment
Additions to restricted cash - (5,882)
Interest income 322 1,033
Reclamation deposits (460) 98
Cash used in investing activities (94,797) (77,285)
Financing activities
Common shares and warrants issued 1,354
for cash, net of issue costs 102,455
Proceeds on issuance of debt 68,810 47,848
Repayment of debt (55,755) (5,231)
Interest expense (9,040) (5,453)
Cash generated from financing 106,470 38,518
activities
Increase (decrease) in cash and 25,946
cash equivalents (51,775)
Cash and equivalents, beginning of 12,855 89,464
the period
Foreign exchange movement on cash (30) 1,867
and cash equivalents
Cash and equivalents, end of the 38,771 39,556
period
1. GENERAL INFORMATION
Great Basin Gold Ltd. ("Great Basin" or "the Company") is incorporated
under the laws of the Province of British Columbia and its registered
address is 1108-1030 West Georgia Street, Vancouver BC, Canada. The
Company is a mineral exploration and development company that is
currently focused on delivering two advanced stage projects: the
Hollister Project on the Carlin Trend in Nevada, USA and the Burnstone
Project in the Witwatersrand Goldfields in South Africa. The Company,
currently recognized as an emerging producer, will migrate to the rank
of a junior gold producer as production from these two projects
increases during 2011 and 2012.Over and above the exploration being
conducted at the above mentioned properties, greenfields exploration is
being undertaken in Tanzania and Mozambique.
Operating results for the three and six month periods ended June 30,
2011 are not necessarily indicative of the results that may be expected
for the full fiscal year ending December 31, 2011. 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 period presented.
2. BASIS OF PREPARATIONS AND ADOPTION OF IFRS
The Company prepares its financial statements in accordance with
Canadian Generally Accepted Accounting Principles ("GAAP") as set out
in the Handbook of the Canadian Institute of Chartered Accountants
("CICA Handbook"). In 2010, the CICA Handbook was revised to
incorporate International Financial Reporting Standards ("IFRS"), and
require publicly accountable enterprises to apply such standards
effective for years beginning on or after January 1, 2011. Accordingly,
the Company has commenced reporting on this basis in its 2011 interim
consolidated financial statements. In these financial statements, the
term "Canadian GAAP" refers to Canadian GAAP before the adoption of
IFRS.
These interim consolidated financial statements have been prepared in
accordance with IFRS applicable to the preparation of interim financial
statements, including IAS 34, Interim Financial Reporting and IFRS 1,
First-time adoption of International Financial Reporting Standards. The
accounting policies followed in these interim financial statements are
the same as those applied in the Company`s interim financial statements
for the period ended March 31, 2011. The Company has consistently
applied the same accounting policies throughout all periods
presented, as if these policies had always been in effect. The interim
financial statements discloses the impact of the transition to IFRS on
the Company`s reported equity as at June 30, 2010 and comprehensive
loss for the three and six months ended June 30, 2010.
The accounting policies applied in these interim consolidated financial
statements are based on IFRS effective for the year ended December 31,
2011, as issued and outstanding as of August 4, 2011, the date the
Board of directors approved the statements. Any subsequent changes to
IFRS that are given effect in the Company`s annual consolidated
financial statements for the year ending December 31, 2011 could result
in restatement of these interim consolidated financial statements,
including the transition adjustments recognized on change-over to IFRS.
The interim consolidated financial statements should be read in
conjunction with the Company`s Canadian GAAP annual financial
statements for the year ended December, 2010, and the Company`s interim
financial statements for the quarter ended March 31, 2011 prepared in
accordance with IFRS applicable to interim financial statements, which
are both available through the internet on SEDAR at www.sedar.com.
3. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS AND ESTIMATION UNCERTAINTY
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 for those changes
recognized on change-over to IFRS, as described in interim financial
statements for quarter ended March 31, 2011.
Critical accounting estimates and judgments
The Company makes estimates and assumptions concerning the future that
will, by definition, seldom equal actual results. These estimates and
judgments have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.
Significant areas requiring the use of management estimates relate to
impairment of mineral property interests, valuation of inventories,
allocation of purchase price consideration to the fair value of
identifiable assets and liabilities acquired, the determination of
amortization, depletion and accretion, determination of reclamation
obligations, the determination of the fair values of financial
instruments, assumptions used in determining the fair value of non-cash
share based payments, warrants and derivatives, determination of
valuation allowances for deferred income tax liabilities, estimated
market related interest rate used to calculate the equity component of
compound financial instruments and allocation of indirect mining and
overhead expenses to production and development costs.
4. SEGMENT DISCLOSURE
The Company operates in reportable operating segments to deliver on its
strategy to explore, develop and operate mineral properties. Management
has determined the operating segments based on the reports reviewed by
the Company`s Chief Operating Decision Maker ("CODM" that are used to
make strategic decisions. The company`s CODM is its Chief Executive
Officer. Geographic information is as follows:
Assets June 30 December 31
2011 2010
$`000 $,000
Corporate entities
Assets other than mineral property
interests 29,114 14,159
Tanzania
Assets other than mineral property
interests 413 618
Mineral property interests 45,127 45,127
United States
Assets other than mineral property
interests 31,245 21,640
Mine development and equipment 40,178 40,508
Mineral property interests 49,801 53,742
South Africa
Assets other than mineral property
interests 37,053 25,764
Mine development and equipment 514,502 469,702
Mineral property interests 79,219 84,123
Total assets 755,383
826,652
Three months Six months ended
ended
Revenue 2011 June 30 2011 June 30
2010 2010
$`000 $`000 $`000 $`000
Nevada operations
Sale of refined precious
metals 48,686 37,940 71,195 44,762
South African operations
Sale of refined precious
metals 8,052 - 11,886 -
56,738 37,940 83,081 44,762
Refined precious metals are sold to Red Kite Explorer Trust under the
terms of an off-take agreement.
5. SUBSEQUENT EVENTS
Option to acquire 80% of Shield Resources Limited
The Company entered into an agreement in June 2011 whereby it granted
Shanta Gold Limited ("Shanta") the option, following the fulfillment of
the conditions precedent, to acquire an 80% interest in the Company`s
wholly-owned subsidiary, Shield Resources Limited ("Shield"), who is
the holder of various prospecting licenses in the Lupa region on
Tanzania.
In consideration for providing Shanta with the exclusive right to
acquire the shares in Shield, Shanta is obliged to issue ordinary
shares to the value of US$7 million and Shanta warrants to the value of
US$7 million (at an implied value of 35p each) to the Company.
Furthermore Shanta has to fund a US$12 million exploration program,
spread over a period of 3 years ending December 31, 2013 and make
additional payments depending on the number of gold ounce resources
discovered. Shanta will acquire the 80% equity interest in Shield upon
the completion of the exploration program.
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
16 August 2011
Johannesburg
Sponsor
Nedbank Capital
Date: 16/08/2011 12:30:02 Produced by the JSE SENS Department.
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