| Wed 31 Aug 2011, 7:28 | | GDO - Gold One International Limited - Half-year report for the six months |
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GDO
GDO
GDO - Gold One International Limited - Half-year report for the six months
ended 30 June 2011
Gold One International 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" or the "group")
HALF-YEAR REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2011
Shareholders are referred to the announcement released yesterday, 30 August
2011, on the Securities Exchange News Service regarding the half year report
for the six months ended 30 June 2011, and are advised of the following:
Directors` Report
The directors present their report on the consolidated entity consisting of
Gold One and the entities it controlled for the 6 months ended 30 June 2011.
1. Directors
The directors of the company during the 6 months and to the date of this
report are as follows:
Mark K Wheatley (Chairman)**
Barry E Davison**
Kenneth V Dicks**
William B Harris**
Sandile Swana**
Kenneth J Winters**
Neal J Froneman (Chief Executive Officer)*
Christopher D Chadwick (Chief Financial Officer)*
* - Executive director
** - Non-executive director
2. Review of operations
Principal activity and nature of operations
Gold One is an Australian registered and South African headquartered emerging
mid-tier gold producer and developer with a pipeline of Southern African mines
and projects. In addition to Gold One`s listings on the ASX and the JSE, its
ADS`s are also traded in the United States of America under the ticker
"GLDZY", where each ADS represents 10 ordinary shares.
Its flagship operation is the newly built shallow Modder East mine on the East
Rand, some 30 kilometres from Johannesburg. Modder East is the first new mine
to be built in the region in 28 years and distinguishes itself from most of
the other gold mines in South Africa owing to its shallow nature (300 metres
to 500 metres below surface). To date Modder East has provided direct
employment opportunities for over 1,500 people. The company is well on track
to produce 120,000 ounces of gold for the 2011 financial year. Gold One`s
business strategy is to develop precious mineral resources that are shallow,
low technical risk and high margin. Currently, the company is positioned not
only as the lowest cost gold producer in South Africa but also as within the
lowest quartile of global gold mine production costs.
Gold One also owns the nearby existing Sub Nigel mine, which is used primarily
as a training centre in the build-up of Modder East to full production. Gold
One`s other projects and targets include Ventersburg in the Free State
Goldfields, the Tulo concession in Mozambique and the Etendeka greenfield
project in Namibia.
These interim financial statements report the results of the enlarged entity
for the six months ended 30 June 2011 and its financial position at that date.
The financial statements have been prepared for both the ASX and the JSE.
The financial statements reflect the continued 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.
Operating and financial review
Operating results for the six months
Revenue for the 6 months is A$ 75.065 million (2010: A$ 32.587 million) and
reported gross profit is A$ 38.104 million (2010: A$ 16.831 million).
The profit was positively impacted by higher revenue from gold sales, reduced
general and administrative expenses, lower finance costs and a positive fair
value adjustment on the convertible bonds partially offset by higher
exploration and pre-feasibility expenses.
The group reported a profit of A$ 10.644 million compared to the loss reported
for the same period last year of A$ 3.940 million.
Cash balances at the end of the reporting period have more than doubled to A$
16.602 million.
Headline earnings or loss for the period is the earnings or loss for the
period adjusted for gains and / or losses attributable to once-off expenses as
well as capital gains or losses. The disclosure of headline earnings or loss
per share is a requirement of the JSE.
2011 2010
Consolidated
Headline earnings/(loss) per share 0.01 (0.01)
Calculated based on:
Weighted average number of fully paid 807 449 533 805 405
ordinary shares 020
Headline earnings / (loss) for the period 10 857 (3 881)
(A$`000)
Reconciliation of basic earnings / (loss) and
headline earnings / (loss) for the period
(A$`000)
Earnings / (loss) for the period 10 644 (3 940)
Impairment of assets 70 74
Loss / (profit) on sale of assets 143 (15)
Headline earnings / (loss) for the period 10 857 (3 881)
Share issues during the period
Shares issued in respect of the Tulo
acquisition (204 918 shares at ZAR2.44);
Exercise of unlisted options (201 306 at
ZAR1.35; 54 500 at ZAR1,74; 78 668 at
ZAR1.93; 59 600 at ZAR2.04; 112 846 at
ZAR2.12; 31 515 at ZAR2.44; 31 515 at
ZAR2.79; 150 000 at A$0.22; 600 000 at
A$0.27);
Shares issued to bond holder (314 026 at
USD0.38) and
Exercise of listed options (1 850 at A$0.50)
3. Issued share capital
At 30 June 2011, Gold One International Limited had 808 716 731 (2010: 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
During the last quarter of 2010, Gold One announced the proposed creation of
Goliath Gold Mining Limited ("Goliath Gold") through the disposal of Gold One
Africa Limited`s ("Gold One Africa") Megamine business to Goliath Gold
(previously White Water Resources Limited) for ZAR 262 million, to be paid in
Goliath Gold shares. The Goliath Gold transaction is progressing well with
Goliath Gold shareholders having approved the transaction on 22 March, 2011.
The remaining conditions precedent are in the process of being fulfilled
during the third quarter of 2011.
The second quarter of 2011 saw an announcement by Gold One that it had signed
a sale of shares agreement to acquire 100% of Rand Uranium (Proprietary)
Limited ("Rand Uranium"). Gold One has been granted an unconditional approval
for the transaction by the South African Competition Commission. The
transaction will only be completed once the remaining conditions precedent
have been fulfilled.
Gold One announced during May 2011 that it had entered into an agreement to
implement a transaction with a consortium of Chinese investors (the
"Consortium") whereby the Consortium is seeking to become the major
shareholder and long term strategic partner of Gold One through both a
takeover offer and subscriptions of shares for cash. The takeover offer and
subscriptions by the Consortium are progressing well. The notice of meeting
and explanatory memorandum regarding the subscriptions, which incorporates the
independent expert`s report, the bidder`s statement and the target`s statement
regarding the takeover offer was issued in August 2011; this issue triggered
the opening of the offer. Gold One has also been granted an unconditional
approval for the offer by the South African Competition Commission. A general
meeting of Gold One shareholders will be held on 7 September 2011 to approve
the subscriptions. Other conditions precedent are also underway.
Independent of the takeover and subscriptions transaction, the Consortium,
through a subsidiary of one of its members, acquired the 142 689 350 Gold One
shares previously held by Navada Trading Pty Ltd, a subsidiary of African
Global Capital (SA) (Proprietary) Limited.
6. Additional disclosures
The additional information can be found in the notes to the half-year
financial statements. These disclosures
have been included to provide 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 of the annual report
available on www.gold1.co.za
9. Other matters
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.
This report is made in accordance with a resolution of directors.
The half-year report set out on pages 5 to 23, which has been prepared on the
going concern basis, was approved by the Board on 30 August 2011 and was
signed on its behalf by:
Signed:
Neal J Froneman
(Chief Executive Officer)
Signed:
Christopher D Chadwick
(Chief Financial Officer)
Johannesburg, South Africa
30 August 2011
QUOTE
Auditor`s Independence Declaration
As lead auditor for the audit of Gold One for the half year ended 30 June
2011,I declare that to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the
Corporations Act 2011 in relation to the audit; and
b) no contraventions of any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Gold One during the half year.
PricewaterhouseCoopers
Signed
Marc Upcroft
Chartered Accountant
Registered Auditor
Partner
Sydney
30 August 2011
Darling Park Tower 2
201 Sussex Street
Sydney NSW 2000
UNQUOTE
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30
JUNE 2011
6 months 6 months
ended 30 ended 30
June June
2011 2010
Note A$`000 A$`000
Revenue from gold sales 75 065 32 587
Cost of sales (36 961) (15 756)
Gross profit 38 104 16 831
Other income 128 136
General and administrative expenses (8 059) (12 486)
Fair value adjustment on financial liability 4 2 515 (5 183)
Share based payment expense (1 664) (1 354)
Exploration and pre-feasibility expenditure (4 540) (1 477)
Impairment of assets (70) (74)
(Loss) / profit on sale of assets (143) 15
Gain on foreign exchange transactions - 393
Operating profit / (loss) before finance costs 26 271 (3 199)
Finance costs (2 479) (3 184)
Finance income 391 316
Profit/ (loss) before income tax 24 183 (6 067)
Income tax expense 6 (13 539) 2 127
Profit / (loss) for the period 10 644 (3 940)
Other comprehensive income, net of tax:
Currency translation differences on foreign (6 815) 771
operations
Total comprehensive income / (loss) 3 829 (3 169)
Profit/ (loss) for the six months attributable
to:
Owners of the parent 10 644 (3 940)
Total comprehensive income / (loss) for the six
months attributable to:
Owners of the parent 3 829 (3 169)
Earnings / (loss) per share:
Basic earnings / (loss) per share 0.01 (0.01)
Diluted earnings / (loss) per share 0.01 (0.01)
Number of shares in issue 808 716 731 805 894 985
Reconciliation of weighted and diluted
average number of shares:
Average number shares 807 449 833 805 405 020
Unexercised share options 78 378 126 45 913 077
Convertible bonds potentially convertible 157 013 158 157 327 184
1 042 841 117 1 008 645 281
The above consolidated statement of comprehensive income should be read in
conjunction with the accompanying notes set out in the annual report available
on www.gold1.co.za
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONS FOR THE SIX MONTHS ENDED 30 JUNE
2011
30 June 31
2011 December
2010
Note A$`000 A$`000
ASSETS
Current Assets
Cash and cash equivalents 7 16 602 4 501
Trade and other receivables 12 303 9 470
Inventories 4 044 2 313
Taxation receivable 269 286
33 218 16 570
Non-current Assets
Receivables 18 18
Held-to-maturity investments 1 455 1 518
Property, plant and equipment 8 157 886 160 173
Deferred tax assets 4 487 4 802
163 846 166 511
Total Assets 197 064 183 081
LIABILITIES
Current Liabilities
Trade and other payables 13 872 12 181
Employee related payable 2 604 2 031
16 476 14 212
Non-current Liabilities
Financial liabilities designated at fair value 4 59 708 66 593
Deferred tax liability 22 213 9 553
Provisions 3 155 3 268
85 076 79 414
Total Liabilities 101 552 93 626
NET ASSETS 95 512 89455
EQUITY
Contributed Equity 9 131 346 130 782
Reserves (7 452) (2 301)
Accumulated loss (28 (39 026)
382)
Capital and reserves attributable to owners of 95 512 89 455
Gold One
Total Equity 95 512 89 455
The above consolidated statement of financial position should be read in
conjunction with the accompanying notes set out in the annual report available
on www.gold1.co.za
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE
2011
Contributed Reserves Accumulated Total
Equity Loss Equity
A$`000 A$`000 A$`000 A$`000
Balance at 01 January 2010 130 215 (3 728) (53 619) 72 868
Total comprehensive loss for - 771 (3 940) (3
the six months 169)
Shares issued net of 73 - - 73
transaction costs
Employee share options 214 1 379 - 1 593
Total changes 287 2 150 (3 940) (1
503)
Balance at 30 June 2010 130 502 (1 578) (57 559) 71 365
Balance at 01 January 2011 130 782 (2 301) (39 026) 89 455
Total comprehensive income - (6 815) 10 644 3 829
for the six months
Shares issued net of 183 - - 183
transaction cost
Employee share options 381 1 664 - 2 045
Total changes 564 (5 151) 10 644 6 057
Balance as at 30 June 2011 131 346 (7 452) (28 382) 95 512
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes set out in the annual report available
on www.gold1.co.za
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2011
6 Months 6 Months
ended 30 ended 30
June June
2011 2010
Note A$`000 A$`000
Cash flows from operating activities
Receipts from customers 71 557 29 925
Cash paid to suppliers and employees (38 539) (15 841)
Cash generated from/ (used by) operations 33 018 14 084
Finance income 391 316
Finance costs (2 256) (2 930)
Income taxes paid (267) (392)
Net cash inflow/ outflow from operating 30 886 11 078
activities
Cash flows from investing activities
Payments for property, plant and equipment (17 661) (16 068)
Proceeds from sale of property, plant and - 1 240
equipment
Net cash outflow from investing activities (17 661) (14 828)
Cash flows from financing activities
Proceeds from issue of shares net of transaction 9 564 286
costs
Repayment of financial liabilities designated at - (4 695)
fair value
Net cash (outflow)/ inflow from financing 564 (4 409)
activities
Net increase / (decrease) in cash and cash 13 789 (8 159)
equivalents
Cash at beginning of the financial year 4 501 15 268
Effects of exchange rate changes on cash and cash (1 688) (75)
equivalents
Cash and cash equivalents at end of year 7 16 602 7 034
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes set out in the annual report available on
www.gold1.co.za
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2011
Accounting Policies
1. Corporate information
The financial report of Gold One International Limited ("Gold One") for the
half-year ended 30 June 2011 was authorised for issue in accordance with a
resolution of the directors on 30 August 2011. 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 2011, has been prepared in accordance with AASB 134
Interim Financial Reporting and the Corporations Act 2001.
The half-year financial report does not include all notes of the type normally
included within the annual financial report. Accordingly this report should be
read in conjunction with the consolidated financial statements for the year
ended 31 December 2010, as it provides an update of previously reported
information. 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 2011 in accordance with
the continuous disclosure obligations arising under the Corporations Act 2001.
For the purpose of preparing this 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
AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting
Standards arising from AASB 9 and AASB 2010-7 Amendments to Australian
Accounting Standards arising from AASB 9 (December 2010) (effective from 1
January 2013).
AASB 9 Financial Instruments addresses the classification, measurement and
derecognition of financial assets and financial liabilities. The standard is
not applicable until 1 January 2013 but is available for early adoption. When
adopted, the standard will affect in particular 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 investment that are not held for trading.
There will be an impact on the group`s accounting for financial liabilities,
as the new requirements affect the accounting for financial liabilities that
are designated at fair value through profit or loss. The
derecognition rules have been transferred from AASB 139 Financial Instruments:
Recognition and Measurement and have not been charged. 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 Executive 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: Corporate, 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 Executive Committee:
30 June 2011 30 June 2010
Corpora South Project Conso Corpora South Project Consol
te Africa s lidat te Africa s idated
n ed n
operat operat
ions ions
A$`000 A$`000 A$`000 A$`00 A$`000 A$`000 A$`000 A$`000
0
Segment
revenue
Sales - 75 065 - 75 - 32 587 - 32 587
to 065
externa
l
custome
rs
Segment
results
(Loss) (9 215) 37 258 (3 860) 24 (12 7 628 (1 353) (6
/ 183 342) 067)
profit
for the
half
year
Income - (13 - (13 - 2 127 - 2 127
taxes 539) 539)
Total 10 (3
644 940)
30 June 2011 30 June 2010
Corpora South Project Conso Corpora South Project Consol
te Africa s lidat te Africa s idated
n ed n
operat operat
ions ions
A$`000 A$`000 A$`000 A$`00 A$`000 A$`000 A$`000 A$`000
0
Segment
assets
and
liabili
ties
Segment 17 563 176 3 270 197 (3 031) 182 3 443 183
assets 231 064 669 081
Segment (62 (41 2 281 (101 (69 (23 (486) (93
liabili 312) 521) 552) 993) 147) 626)
ties
Net 95 89 455
assets 512
*Corporate refers to Gold One`s corporate offices in Australia and South
Africa, South African Operations refer to Gold One`s operating mines, Modder
East and Sub Nigel, in South Africa and Projects refer to the
various exploration entities.
The reported measure of assets and liabilities excludes inter-company assets
and liabilities. Corporate assets consist mainly of cash and cash equivalents
managed centrally for the other segments.
30 June 30 June
2011 2010
A$`000 A$`000
4. Financial liabilities designated at fair value
Fair value of convertible bonds 59 708 66 593
Financial liabilities consist of convertible bonds
classified as financial liabilities at fair value
through profit and loss
Non-current liabilities at the end of the period
Convertible bonds 59 708 66 592
Reconciliation of convertible bond
Opening balance 66 593 80 293
Interest accrued on bonds 223 254
Repurchase of bond - (4 695)
Conversion of bond to equity (112) -
Fair value adjustment (2 515) (9 259)
Effect of foreign currency translation (4 481) -
59 708 66 593
In 2007, 600 8.5% convertible bonds were issued by Aflease Gold Limited at a
nominal value of R1 million per bond. As a result of the reverse acquisition
arrangement in 2009 whereby Aflease Gold Limited was acquired by Gold One, the
original bonds issued were replaced on 25 May 2009 with 600 8.5% convertible
bonds at a total nominal value of US$ 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 by more than 150% of the conversion price. 99
bonds have been repurchased to date after the bondholders had approved a
partial buyback, and 1 bond was exercised and converted to equity during the
current period.
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 bondholders had the option to put the bonds to the group at the accreted
principal plus accrued interest on 12 December 2010, being the third
anniversary of the closing date. The bondholders elected not to
exercise their put option, and as a result the liability was reclassified as
non-current with a maturity date of 12 December 2012. The terms and conditions
of the bonds remain otherwise unchanged.
4. Financial liabilities designated at fair value (continued)
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 accreted principal value of the bonds is US$ 63.361 million (31 December
2010: US$ 62.877 million). The maximum undiscounted contractual amount for
which the bondholders could call the bonds at the maturity date is US$ 65.511
million and the fair value, as provided by the external valuators, of the
convertible bonds at 30 June 2011 is US$ 63.961 million (31 December 2010: US$
68.098 million).
5. Financial risk management
The group`s principal financial instruments comprise short-term deposits and
the convertible bonds. The main purpose of the convertible bonds was to
provide funding for the development of the Modder East Operations. Surplus
funds are currently invested in short term deposits to be utilised by the
operations and to fund the growth of the group. 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 risk arising from
the group`s financial instruments is the liquidity risk. The board reviews and
approves 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
At 30 June 2011 Gold One had a ZAR 9 665 000 unsecured, undrawn borrowing
facility.
Maturity of financial liabilities
At 30 June 2011 Less than 6 - 12 Between 1 Total
6 months months and 2
years
A$`000 A$`000 A$`000 A$`000
Financial liabilities - - 61 831 61 831
designated at fair value
Trade and other payables 16 476 - - 16 476
16 476 - 61 831 78 307
At 30 June 2010 Less than 6 - 12 Between 1 Total
6 months months and 2
years
A$`000 A$`000 A$`000 A$`000
Financial liabilities - - 63 864 63 864
designated at fair value
Trade and other payables 14 212 - - 14 212
14 212 - 63 864 78 076
30 June 30 June
2011 2010
A$`000 A$`000
6. Taxation
Major components of the tax expense
Republic of South Africa Local - Current
South African income tax - current period (267) (197)
Deferred income tax
Originating and reversing temporary differences (13 272) 2 324
(13 539) 2 127
30 June 30 June
2011 2010
A$`000 A$`000
7. Cash and cash equivalents
Cash on hand 305 397
Restricted cash* 1 216 1 316
Short-term deposits 15 081 2 788
16 602 4 501
* Restricted cash at 30 June 2011 refers to cash balances in lieu of
guarantees provided, as detailed in note 10, and funds in the New Kleinfontein
Rehabilitation Trust.
8. Property, plant and equipment
Additions to the group`s property, plant and equipment amounted to A$ 17.661
million (30 June 2010: A$ 16.068 million) and were primarily attributable to
the Modder East mine to cater for the increase in production levels.
All the equipment was acquired for cash.
30 June 30 June
2011 2010
A$`000 A$`000
9. Contributed equity
Issued
808 716 731 (31 December 2010: 806 875 987) Ordinary 131 346 130 782
Shares
Fully paid ordinary shares carry one vote per share
and carry the right to dividends.
Movement in ordinary shares on issue A$ Number of
shares
At 31 December 2009 130 215 804 966
414 816
Issued on 11 January 2010 in respect of the Tulo 73 300 220 357
acquisition
Transaction costs on share issue (123) -
Issued on 25 January 2010 for cash on exercise of 16 473 52 225
share options
Issued on 27 January 2010 1 -
Transaction costs on share issue (123) -
Issued on 11 March 2010 for cash on exercise of 277 542
share options
Transaction costs on share issue (126) -
Issued on 6 May 2010 for cash on exercise of share 46 585 207 895
options
Transaction costs on share issue (126) -
Issued on 10 May 2010 for cash on exercise of share 102 275 300 000
options
Transaction costs on share issue (126) -
Issued on 17 May 2010 for cash on exercise of share 29 659 147 150
options
Transaction costs on share issue (126) -
Issued on 6 July 2010 in respect of the Tulo 75 200 267 550
acquisition
Transaction costs on share issue (130) -
Issued on 14 July 2010 for cash on exercise of share 21 481 105 798
options
Transaction costs on share issue (127) -
Issued on 27 October 2010 for cash on exercise of 13 360 39 334
share options
Transaction costs on share issue (657) -
Issued on 25 November 2010 - share option exercise 189 601 568 320
Transaction costs on share issue (122) -
At 31 December 2010 130 781 806 875
840 987
Issued on 11 January 2011 in respect of the Tulo 73 808 204 918
acquisition
Transaction costs on share issue (133) -
Issued on 2 March 2011 - share option exercise 204 408
Transaction costs on share issue (127) -
Issued on 14 March 2011 - share option exercise 24 149 67 852
Transaction costs on share issue (130) -
Issued on 14 March 2011 - share option exercise 33 000 150 000
Transaction costs on share issue (130) -
Issued on 8 April 2011 - share option exercise 75 150
Transaction costs on share issue (129) -
Issued on 18 April - share option exercise 2 575 51 091
Transaction costs on share issue (126) -
Issued on 6 May 2011 - bond exercise 111 671 314 026
Transaction costs on share issue (664) -
Issued on 9 May 2011 - share option exercise 150 300
Transaction costs on share issue (126) -
Issued on 6 June 2011 - share option exercise 163 000 600 002
Transaction costs on share issue (126) -
Issued on 6 June 2011 - share option exercise 98 474 334 267
Transaction costs on share issue (126) -
Issued on 13 June 2011 - share option exercise 58 149 117 730
Transaction costs on share issue (126) -
At 30 June 2011 131 346 808 716
152 731
30 June 30 June
2011 2010
A$`000 A$`000
10. Commitments
Guarantees, capital and operating lease commitments
Guarantees 1 074 1 199
Capital commitments 7 197 11 024
Operating lease commitments 810 1 797
9 081 14 020
Guarantees
Environmental rehabilitation of land
Performance bank guarantees with Department of 181 213
Mineral Resources
Performance guarantee - Eskom 893 986
1 074 1 199
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. The capital commitments will be funded from
Gold One`s own cash resources.
Operating leases - as lessee (expense)
The future aggregate minimum lease payment under non-
cancellable operating leases are:
within one year 100 667
in second to fifth year inclusive 303 654
later than five years 407 476
810 1 797
The operating lease commitments relate to the leases for the farm Cloverfield,
Parktown offices and Australia offices. No contingent rent is payable.
11. 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$ 3.707 million under the Contract Works Agreement for
the sinking of the vertical shaft at Modder East.
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$ 3.707 million into trust pending the arbitrator`s ruling. NKGM duly paid
the sum of A$ 3.707 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$ 1.529 million over and
above the amount held in the trust bringing the total claim to A$ 5.236
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$ 3.707 million.
In addition, the A$ 3.707 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.
The funds have been deposited in the solicitor`s trust account until such time
the arbitration process is complete and the dispute is resolved. The funds are
included as part of trade and other receivables at
A$ 3.707 million.
12. Related parties
`
Relationships
Directors Refer to directors` report - note 1
Ultimate holding company Gold One International Limited
Subsidiaries Gold One Africa Limited
Twin Hills Operations (Pty) 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
Other Goliath Gold Mining Limited
13. Events after the reporting period
During the last quarter of 2010, Gold One announced the proposed creation of
Goliath Gold Mining Limited ("Goliath Gold") through the disposal of Gold One
Africa Limited`s ("Gold One Africa") Megamine business to Goliath Gold
(previously WWR) for ZAR 262 million, to be paid in Goliath Gold
shares. The Goliath Gold transaction is progressing well with Goliath Gold
shareholders having approved the transaction on 22 March 2011. The remaining
conditions precedent are in the process of being fulfilled during the third
quarter of 2011.
The second quarter of 2011 saw an announcement by Gold One, that it had signed
a sale of shares agreement to acquire 100% of Rand Uranium (Proprietary)
Limited ("Rand Uranium"). Gold One has been granted an unconditional approval
for the transaction by the South African Competition Commission. The
transaction will only be completed once the remaining conditions precedent
have been fulfilled.
Gold One announced during May 2011 that it had entered into an agreement to
implement a transaction with a consortium of Chinese investors (the
"Consortium") whereby the Consortium is seeking to become the major
shareholder and long term strategic partner of Gold One through both a
takeover offer and subscription of shares for cash. The takeover offer and
subscription by the Consortium are progressing well. The notice of meeting and
explanatory memorandum regarding the subscriptions, which incorporates
the independent expert`s report, the bidder`s statement and the target`s
statement regarding the takeover offer was issued in August 2011; this issue
triggered the opening of the offer. Gold One has also been granted an
unconditional approval for the offer by the South African Competition
Commission. A general meeting of Gold One shareholders will be held on 7
September 2011 to approve the subscription. Other conditions precedent are
also underway.
Independent of the takeover and subscription transaction, the Consortium,
through a subsidiary of one of its members, acquired the 142 689 350 Gold One
shares previously held by Navada Trading Pty Ltd, a subsidiary of African
Global Capital (SA) (Proprietary) Limited.
Directors Declaration
In accordance with a resolution of the directors of Gold One International
Limited, I state that:
(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 2011 and
the performance for the halfyear ended on that date of the consolidated
entity; and
(ii)comply with Accounting Standard AASB 134 Interim Financial Reporting and
the Corporations Regulations 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.
This declaration is in respect of Gold One International Limited and the
entities it controlled during the period.
On behalf of the Board
Signed
Neal Froneman (Chief Executive Officer)
Christopher Chadwick (Chief Financial Officer)
30 August 2011
Johannesburg, South Africa
The half year report for the six months ended 30 June 2011 has been reviewed
by PricewaterhouseCoopers Inc. whose unqualified independent review report is
available for inspection at the registered offices of Gold One.
A copy of the full half year report is available on the company`s website
hosted at www.gold1.co.za
On behalf of the Board
Neal Froneman Christopher Chadwick
Chief Executive Officer Chief Financial Officer
31 August 2011
Johannesburg, South Africa
JSE SPONSOR
Macquarie First South Capital (Pty) Limited
CORPORATE DIRECTORY
Australia South Africa
Registration ABN 35 094 265 746 2009/000032/10
Number
Registered Level 3 First Floor, 45 Empire Road
Office 100 Mount Street Parktown
North Sydney NSW 2060 Gauteng 2193
Telephone: +612 9963 6400 Telephone: + 27 11 726 1047
Facsimile: +612 9963 6499 Facsimile: + 27 11 726 1087
Board of Non-Executive Directors
Directors Mark K Wheatley (Chairman)
Barry E Davison
Kenneth V Dicks
William B Harris
Sandile Swana
Kenneth J Winters
Executive Directors
Neal J Froneman (Chief Executive Officer)
Christopher D Chadwick (Chief Financial Officer)
Secretaries Kellie M Pickering Pierre B Kruger
Auditors PricewaterhouseCoopers
Darling Park Tower 2
201 Sussex Street
Sydney NSW 2000
Share Boardroom (Proprietary) Computershare Investor Services
Registries Limited (Proprietary) Limited
28 Margaret Street 70 Marshall Street
Sydney NSW 2000 Johannesburg 2001
Telephone: +612 9290 9600 Telephone: +27 11 370 5000
Facsimile: +612 9279 0664 Facsimile: +27 11 370 5220
Solicitors Blake Dawson Edward Nathan Sonnenbergs
2 The Esplanade 1 North Wharf Square
Perth WA 6000 Loop Street
Foreshore
Cape Town 8001
Bankers Commonwealth Bank of ABSA Bank Limited
Australia Corporate Banking
Institutional Banking 15 Alice Lane
Level 22, Darling Park Tower Sandton
1 2196
201 Sussex Street
Sydney NSW 2000
Stock Exchange Primary Listing Secondary Listing
Listings Australian Securities JSE Limited ("JSE")
Exchange One Exchange Square
ASX Limited ("ASX") Gwen Lane, Sandton 2196
20 Bridge Street Ticker: GDO
Sydney NSW 2000
Ticker: GDO
American OTCQX International
Depository Ticker: GLDZY
Receipts Level 1 ADR Sponsor
("ADRs") The Bank of New York Mellon
Depository Receipts Division
101 Barclay Street, 22nd Floor
New York 102386 USA
Website Address www.gold1.co.za
Other key The other key management personnel of the Group are those that
management report directly to the executive directors of the company
personnel being:
Izak J Marais (Senior Vice President: Operations)
Sydney JM Caddy (Senior Vice President: Operations)
Richard A Steward (Senior Vice President: Business Development)
Pierre B Kruger (Senior Vice President: General Counsel and
Company Secretary)
Website address www.gold1.co.za
Date: 31/08/2011 07:28:26 Produced by the JSE SENS Department.
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