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GGM
GGM
GGM - Goliath Gold Mining Limited - Reviewed condensed consolidated interim
financial results for the six months ended 30 September 2011
Goliath Gold Mining Limited
(Formerly White Water Resources Limited)
Incorporated in the Republic of South Africa
(Registration number: 1933/004523/06)
Share code: GGM ISIN: ZAE000154753
("Goliath Gold" or "the Company" or "the Group")
REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS
ENDED 30 SEPTEMBER 2011
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Reviewed six Unaudited Audited
months to six months 12 months
30 September to 30 to
Change % 2011 September 31 March
R`000 2010 2011
R`000 R`000
Other income 1 673 2 287 129 737
Operating expenses 159 (6 505) (2 510) (14 232)
Impairment of assets (120) - -
Fair value 9 164 - 8 144
adjustments
Profit on sale of - - 333
financial assets
Exploration and pre- 12 (939) (838) (1 776)
feasibility
expenditure
Operating 3 887 (3 219) (6 794)
profit/(loss)
Investment income 914 213 21 257
Finance costs (3) - -
Profit/(Loss) before 4 097 (3 198) (6 537)
taxation
Taxation (1 349) - 392
Total comprehensive 2 748 (3 198) (6 145)
income/(loss) for the
period
Attributable to:
Equity holders of the 186 2 748 (3 198) (6 145)
Group
Non-controlling - - -
interest
42 462 958 370 547 286 424 629 379
Total number of
ordinary shares in
issue
Weighted average 42 462 958 370 547 286 388 179 530
number of ordinary
shares in issue
6.47 (0.86) (1.58)
Earnings per share
(cents)
Headline earnings per 6.47 (0.86) (1.58)
share (cents)
RECONCILIATION OF HEADLINE EARNINGS
Reviewed six Unaudited Audited
months to six months to 12 months
30 September 30 September to 30
2011 2010 March
R`000 R`000 2011
R`000
Profit/(Loss) for the period 2 748 (3 198) (6 145)
Adjustments for:
(Profit)/Loss on sale of listed - 24 -
investments
Headline earnings/(loss) 2 748 (3 174) (6 145)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Reviewed at Unaudited Audited at
30 September at 31 March
2011 30 September 2011
R`000 2010 R`000
R`000
ASSETS
Non-current assets
Investment property 3 107 3 107 3 107
Exploration and evaluation - 1 -
assets
Property, plant and equipment 26 25 17
Loans to Group companies - 805 -
Intangible assets - 3 000 -
Other financial assets - 653 -
Current assets
Other financial assets 32 679 18 454 23 515
Trade and other receivables 88 6 -
Cash and cash equivalents 8 593 829 8 124
Total assets 44 493 26 880 34 763
EQUITY AND LIABILITIES
Share capital 303 942 292 489 305 504
Accumulated losses (272 102) (268 602) (274 850)
Equity attributable to equity 31 840 23 887 30 654
holders of the Group
Non-current liabilities
Loans from related parties 6 310 - -
Deferred tax 1 349 392 -
Current liabilities
Trade and other payables 4 872 1 226 2 734
Current tax payable 122 122 122
Other financial liabilities - 1 253 1 253
Total equity and liabilities 44 493 26 880 34 763
76.79 6.46 7.39
Net asset value per share
(cents)
Net tangible asset value per 76.79 5.65 7.39
share (cents)
CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed six Unaudited Audited
months to six months 12 months
30 September to to
2011 30 September 31 March
R`000 2010 2011
R`000 R`000
Cash utilised in operating (4 158) (3 291) (11 014)
activities
Cash effect of investing (121) 2 761 5 064
activities
Cash effect of financing 4 748 300 13 015
activities
Net cash change for the period 469 (230) 7 065
Cash at the beginning of the 8 124 1 059 1 059
period
Net cash at the end of the 8 593 829 8 124
period
CONSOLIDATED GROUP STATEMENT OF CHANGES IN EQUITY
Total
share Total
capital and Accumulated equity of
premium losses the Group
R`000 R`000 R`000
Balance at 01 April 2010 292 489 (268 705) 23 784
Loss for the period - (3 198) (3 198)
Disposal of treasury shares - - -
Balance at 30 September 2010 292 489 (271 903) 20 586
Loss for the period - (2 947) (2 947)
Issue of shares 13 015 - 13 015
Balance at 01 April 2011 305 504 (274 850) 30 654
Profit for the period - 2 748 2 748
Share consolidation expense (1 562) - (1 562)
Balance at 30 September 2011 303 942 (272 102) 31 840
COMMENTARY
1. BASIS OF PREPARATION
The financial statements of Goliath Gold for the six months ended 30
September 2011 ("interim period") have been prepared in accordance with
International Financial Reporting Standards, IAS 34, the Companies Act of
South Africa, 2008 (Act 71 of 2008) and the JSE Listings Requirements, and
are based on appropriate accounting policies, consistently applied with those
applied in the most recent audited financial statements, which are supported
by reasonable and prudent judgements and estimates.
These results have been prepared under the supervision of
Nico Nieuwenhuis (CA)SA, Vice President: Finance.
These results have been reviewed by the Group`s auditors,
PricewaterhouseCoopers Incorporated, whose unqualified review opinion is
available for inspection at the Company`s registered office.
2. NATURE OF THE BUSINESS
The Company`s main business is that of a mining exploration company. Its
subsidiaries are primarily engaged in the resource sector. The Company has a
primary listing on the JSE, issuer code: GGM.
3. FINANCIAL AND OPERATIONAL PERFORMANCE
Profit of the Group for the six months ended 30 September 2011, was ZAR 2.7
million, compared to a Group net loss for the six months ended 30 September
2010, of ZAR 3.2 million.
The earnings per share and headline earnings per share post consolidation are
6.47 cents, compared to the loss per share pre- consolidation of 0.86 cents
(8.63 cents loss per share post consolidation) and the headline loss per
share pre-consolidation of 0.86 cents (8.57 cents loss per share post
consolidation) for the six months ended 30 September 2010.
4. PROSPECTS AND FUTURE PERFORMANCE
On 12 November 2010, White Water Resources Limited ("WWR") entered into an
acquisition agreement with Gold One International Limited ("Gold One"). The
acquisition agreement stipulates that Goliath Gold will acquire the Megamine
Business, as defined in the Goliath Gold Acquisition Circular dated 25
February 2011, from Gold One Africa Limited ("Gold One Africa"), a wholly-
owned subsidiary of Gold One.
The acquisition consideration of ZAR 262,229,868 is to be settled by way of
the issue of 1,048,919,472 pre-consolidation WWR shares, valued at ZAR 0.25
each. The acquisition of the Megamine Business by WWR will effectively result
in a reverse takeover of WWR by Gold One Africa, with Gold One Africa
ultimately holding 71% of the share capital in WWR. The transaction also
includes a 10:1 share consolidation, which was completed on 13 May 2011.
The conclusion of the transaction is dependent on the fulfillment of certain
conditions precedent. The outstanding conditions precedent relate mainly to
regulatory approvals that are pending.
Subsequent to shareholders voting overwhelmingly in favour of the transaction
on 22 March 2011, a new management team was also appointed.
Goliath Gold`s new management team is focused on creating value by exploring
and ultimately developing the Company`s extensive future asset base. This has
already begun in earnest with the first few exploration drill holes at
Megamine having already been completed by Gold One. Although the majority of
the current resources have a medium depth profile, a number of shallower
targets also exist which are being explored with a view to providing initial
development opportunities as well as the necessary foundations to access the
deeper resources in future. An economic scoping study has already been
initiated at Megamine.
In late 2010, the Company, then still named WWR, also announced that it had
successfully raised approximately ZAR 13.5 million in new capital via the
placement of shares with institutional shareholders. The capital raised has,
and will be, used for exploration funding and general corporate purposes.
5. COMPETENT PERSON`S STATEMENT
There have not been any significant changes to the information relating to
the Goliath Gold exploration results, mineral resources or ore resources as
disclosed on page 8 of the annual report for the year ended 31 March 2011.
6. SEGMENTAL REPORTING
Management has determined the operating segments of the Group based on the
reports reviewed by the Board that are used to make strategic decisions. The
Board considers the business from a functional perspective and has identified
two reportable segments, namely Exploration and Other operations.
Exploration: Involved in potential mining, prospecting and exploration.
Other operations: Represents the interest received on investments.
Business Segment Information
Exploration Other operations
Six Six 12 Six Six 12
months months months months months months
to to to to to to
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2011 2010 2011 2011 2010 2011
R`000 R`000 R`000 R`000 R`000 R`000
Revenue - - - - - -
Segment result (939) (838) (1 776) (15 058) (2 507) (34 172)
Operating (939) (838) (1 776) (15 058) (2 507) (34 172)
(loss)/profit
Finance income - - - 17 207 21 31 439
Finance costs - - - (17) - (26)
(Loss)/Profit (939) (838) (1 776) 2 132 (2 486) (2 759)
before tax
Income tax - - - (1 349) - 392
(expenses)/
credits
(Loss)/Profit (939) (838) (1 776) 783 (2 486) (2 367)
for the period
Segment assets - - - 44 493 28 452 34 763
Segment - - - (12 653) (2 861) (4 109)
liabilities
Net assets - - - 31 840 25 591 30 654
Eliminations Group
Six Six 12 Six Six 12
months months months months months months
to to to to to to
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2011 2010 2011 2011 2010 2011
R`000 R`000 R`000 R`000 R`000 R`000
Revenue - - - - - -
Segment result 19 884 126 29 154 3 887 (3 219) (6 794)
Operating 19 884 126 29 154 3 887 (3 219) (6 794)
profit/(loss)
Finance income (16 - (31 182) 213 21 257
994)
Finance costs 14 - 26 (3) - -
Loss/(Profit) 2 904 126 (2 002) 4 097 (3 198) (6 537)
before tax
Income tax - - - (1 349) - 392
(expenses)/
credits
Loss/(Profit) 2 904 126 - (2 748) (3 198) (6 145)
for the period
Segment assets - (1 572) - 44 493 26 880 34 763
Segment - (132) - (12 653) (2 993) (4 109)
liabilities
Net assets - (1 704) - 31 840 23 887 30 654
7. CONTINGENCIES, LEGAL PROCEEDINGS AND GUARANTEES
During the interim period, there has been no significant change to the
contingencies, legal proceedings and guarantees as disclosed in the annual
report for the year ended 31 March 2011.
8. POST-BALANCE SHEET EVENTS
The Board is not aware of any material events that have occurred after the
interim period, up to and including the date of this report.
9. DIVIDENDS
No dividends were declared or paid to shareholders during the interim period.
10. DIRECTORATE
During the interim period David Hodgson and Phil Lambert resigned on 12
September 2011 and 26 August 2011, respectively while Jerry Vilakazi and Piet
Nel were appointed as non-executive directors on 21 June 2011 and 29 July
2011, respectively.
For and on behalf of the Board
Neal Froneman Christopher Chadwick
Chief Executive Officer Chief Financial Officer
Johannesburg
28 November 2011
Directors:
M Wheatley# (Chairman), N Froneman (Chief Executive Officer),
C Chadwick (Chief Financial Officer), K Rayner* (Deputy Chairman),
J Vilakazi*, P Nel*.
#Non-executive *Independent Non-executive
REGISTERED OFFICE
First Floor, Empire Office Park, 55 Empire Road, Parktown, Johannesburg, 2193
COMPANY SECRETARY
Pierre Kruger
First Floor, Empire Office Park, 55 Empire Road, Parktown, Johannesburg, 2193
SPONSOR
Merchantec Capital
AUDITORS
PricewaterhouseCoopers Inc.
Date: 28/11/2011 07:05:01 Produced by the JSE SENS Department.
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