| Thu 8 Nov 2001, 0:00 | | Western Areas Limited - Report For The Third Quart |
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Western Areas Limited
Registration Number 1959/003209/06
Incorporated in the Republic of South Africa
ISIN No: ZAE000016549 - Share Code: WAR
REPORT FOR THE THIRD quarter ENDED 30 SEPTEMBER 2001
* Improvement of 8% in profit after tax
* Gold revenue up 7%
* Gold production up 12%
* South Deep development progressed as planned
LETTER TO SHAREHOLDERS
The profit after tax for the September quarter improved by 8% to R17 million
on the back of another steady performance by the South Deep joint venture.
Gold revenue has increased by 7% to R102.3 million. The contributing
factors to the increase in revenue were the 12% increase in gold production
from 1 320kg to 1 472kg and the improvement in the gold price received to
R75 548 per kilogram.
Profits from gold decreased from R17.6 million to R11.7 million, due to an
increase in production costs to US$ 221 per ounce and a decline in recovered
grade to 7.16 grams per tonne. Production costs increased due to the
increased tonnage throughput, the wage increases and once-off costs incurred
in freehold purchases.
Barnato Exploration Limited, a subsidiary of Western Areas Limited, disposed
of its Ghanaian assets during the quarter to Golden Star Resources Ltd. - a
Canadian listed company. The consideration received consisted of 3.3
million Golden Star Resources Ltd. common shares, 1.3 million Golden Star
Resources Ltd. warrants and a net smelter gold royalty, in respect of the
first one million ounces of gold production from the Prestea and Bogoso
operations in Ghana.
Development at the South Deep project progressed as planned, with capital
expenditure rising to
R110.3 million in this quarter.
Shareholders are referred to the announcement which appeared in the press on
Monday 5 November 2001, in terms of which Western Areas negotiated a
facility which would raise up to US$125 million, which would enable it to
make a further distribution to shareholders in due course.
RB Kebble JF Brownrigg
Chief Executive Officer Managing Director
Johannesburg
8 November 2001
The following table represents the hedge book as at 30 September 2001:
Years to
31.12.01 31.12.02 31.12.03
Fixed forward contract
Amount hedged (oz 000) 105 35 38
Average price ($/oz) 266 260 260
Fixed forward contract
Amount hedged (oz 000) - 105 -
Average price (R/oz) - 1 822 -
Call options sold
Amount hedged (oz 000) - 35 40
Average price ($/oz) - 325 325
Call options bought
Amount hedged (oz 000) - 70 76
Average price ($/oz) - 420 420
Gold lease rate swaps
Amount hedged - - -
Years to
31.12.04 31.12.05 31.12.06
Fixed forward contract
Amount hedged (oz 000) 42 21 -
Average price ($/oz) 260 260 -
Fixed forward contract
Amount hedged (oz 000) - - -
Average price (R/oz) - - -
Call options sold
Amount hedged (oz 000) 42 42 42
Average price ($/oz) 325 325 325
Call options bought
Amount hedged (oz 000) 77 38 -
Average price ($/oz) 420 420 -
Gold lease rate swaps
Amount hedged - 214 -
Years to
31.12.07 31.12.08 31.12.09
Fixed forward contract
Amount hedged (oz 000) - 84 84
Average price ($/oz) - 280 280
Fixed forward contract
Amount hedged (oz 000) - - -
Average price (R/oz) - - -
Call options sold
Amount hedged (oz 000) 42 42 42
Average price ($/oz) 325 325 325
Call options bought
Amount hedged (oz 000) - - -
Average price ($/oz) - - -
Gold lease rate swaps
Amount hedged 157 - 126
Years to
Total
Fixed forward contract
Amount hedged (oz 000) 409
Average price ($/oz)
Fixed forward contract
Amount hedged (oz 000) 105
Average price (R/oz)
Call options sold
Amount hedged (oz 000) 327
Average price ($/oz)
Call options bought
Amount hedged (oz 000) 261
Average price ($/oz)
Gold lease rate swaps
Amount hedged 497
CONSOLIDATED income statement
US$ million Quarter Quarter Year
Ended ended ended
30.09.01 30.06.01 31.12.00
Unaudited Unaudited Audited
Revenue from gold 12.2 11.9 47.4
At spot 12.2 11.2 46.6
Hedging profits - 0.7 0.8
Costs and other expenses (10.8) (9.7) (36.8)
Production costs (9.6) (8.5) (30.9)
Non-cash items (1.2) (1.2) (5.9)
Profit from gold 1.4 2.2 10.6
Plus 3.4 2.9 23.4
Sundry revenue 0.7 0.1 2.8
Net interest received 2.7 2.8 20.6
Less (1.7) (1.7) (12.0)
Net premiums on put and
call options - - (2.8)
Administration costs and
amortisation of
corporate assets (1.5) (1.6) (6.9)
Exploration and new business - - (1.0)
Prestea operating loss, mine
closure and feasibility
study costs (0.2) (0.1) (1.3)
Operating profit 3.1 3.4 22.0
Restructuring costs - - (3.3)
Profit before taxation 3.1 3.4 18.7
Taxation (0.9) (1.5) (6.7)
Normal taxation (0.6) (0.8) (6.9)
Deferred taxation (0.3) (0.7) 0.2
Attributable to outside
shareholders - - 0.1
Profit after taxation 2.2 1.9 12.1
Headline earnings per share
- cents 2 2 13
Earnings per share - cents 2 2 12
Number of shares in
issue (million) 105.4 105.4 105.4
R million Quarter Quarter Year
Ended ended ended
30.09.01 30.06.01 31.12.00
Unaudited Unaudited Audited
Revenue from gold 102.3 95.9 329.1
At spot 102.3 90.1 323.4
Hedging profits - 5.8 5.7
Costs and other expenses (90.6) (78.3) (255.2)
Production costs (80.5) (68.7) (214.0)
Non-cash items (10.1) (9.6) (41.2)
Profit from gold 11.7 17.6 73.9
Plus 27.6 23.4 162.8
Sundry revenue 5.9 0.4 19.7
Net interest received 21.7 23.0 143.1
Less (14.1) (13.8) (83.1)
Net premiums on put and
call options - - (19.6)
Administration costs and
amortisation of
corporate assets (12.6) (13.0) (47.4)
Exploration and new business (0.1) (0.1) (6.8)
Prestea operating loss, mine
closure and feasibility
study costs (1.4) (0.7) (9.3)
Operating profit 25.2 27.2 153.6
Restructuring costs - - (22.7)
Profit before taxation 25.2 27.2 130.9
Taxation (8.0) (11.4) (46.7)
Normal taxation (5.3) (6.1) (48.2)
Deferred taxation (2.7) (5.3) 1.5
Attributable to outside
shareholders (0.2) - 0.4
Profit after taxation 17.0 15.8 84.6
Headline earnings per share
- cents 16 15 90
Earnings per share - cents 16 15 80
Number of shares in issue
(million) 105.4 105.4 105.4
CONSOLIDATED CASH FLOW STATEMENT
US$ million Quarter Quarter Year
Ended ended ended
30.09.01 30.06.01 31.12.00
Unaudited Unaudited Audited
Cash flow from operating
activities
Cash from/(utilised in)
operations 0.9 3.1 (5.4)
Interest paid - - (6.0)
Taxation paid - (6.5) (1.1)
Net cash generated by/
(utilised in)
operating activities 0.9 (3.4) (12.5)
Investing activities
Capital expenditure
on the South Deep
project (13.2) (10.5) (38.0)
Proceeds on sale
of assets - - 2.3
Increase in loan to JCI (7.8) - -
Decrease in advances - 3.0 3.1
Decrease in short-term
cash advances - - 36.1
Interest received 0.1 0.3 14.2
Dividends received - - 0.1
Net cash (utilised in)/
generated by
investing activities (20.9) (7.2) 17.8
Financing activities
Increase in short-term
loans 6.0 - -
Cash distribution - - (87.4)
Repayment of long-term
borrowings - - (4.3)
Net cash generated by/
(utilised in)
financing activities 6.0 - (91.7)
Net cash utilised (14.0) (10.6) (86.4)
Opening balance
of cash and
cash equivalents 18.7 29.3 143.5
Translation adjustment (1.0) - (19.5)
Closing balance of cash
and cash equivalents 3.7 18.7 37.6
R million Quarter Quarter Year
Ended ended ended
30.09.01 30.06.01 31.12.00
Unaudited Unaudited Audited
Cash flow from operating
activities
Cash from/(utilised in)
operations 7.4 24.9 (37.7)
Interest paid - - (41.9)
Taxation paid - (51.9) (7.4)
Net cash generated by/
(utilised in)
operating activities 7.4 (27.0) (87.0)
Investing activities
Capital expenditure
on the South Deep
project (110.3) (84.7) (263.7)
Proceeds on sale of assets - - 15.8
Increase in loan to JCI (65.5) - -
Decrease in advances - 24.0 21.8
Decrease in short-term
cash advances - - 250.6
Interest received 0.9 2.8 98.8
Dividends received - - 0.4
Net cash (utilised in)/
generated by
investing activities (174.9) (57.9) 123.7
Financing activities
Increase in short-term loans 50.3 - -
Cash distribution - - (606.0)
Repayment of long-term
borrowings - - (30.0)
Net cash generated by/
(utilised in)
financing activities 50.3 - (636.0)
Net cash utilised (117.2) (84.9) (599.3)
Opening balance of cash and
cash equivalents 150.5 235.4 883.6
Translation adjustment
Closing balance of cash and
cash equivalents 33.3 150.5 284.3
CONSOLIDATED BALANCE SHEET
US$ million Quarter Quarter Year
Ended ended ended
30.09.01 30.06.01 31.12.00
Notes Unaudited Unaudited Audited
Capital employed
Shareholders' equity 288.5 321.4 337.8
Outside shareholders'
interests 1.9 2.2 2.3
Deferred taxation 45.2 50.4 52.6
Long-term liabilities 2.0 2.3 2.4
337.6 376.3 395.1
Represented by
Mining assets 273.2 297.0 300.6
Listed investements 2.0 - -
Unlisted investments 0.1 0.2 0.3
Long-term advances 4.6 5.2 8.1
Net current assets 57.7 73.9 86.1
Current assets 74.1 86.1 105.3
Inventories 2.1 2.1 1.8
Receivables 4.4 4.5 10.8
Loan to JCI Gold Ltd 1 47.8 43.4 38.0
Short-term cash advances 2 16.1 17.4 17.1
Cash and short-term funds 3.7 18.7 37.6
Current liabilities 16.4 12.2 19.2
Payables and provisions 10.8 12.2 19.2
Short-term borrowings 5.6 - -
337.6 376.3 395.1
R million Quarter Quarter Year
Ended ended ended
30.09.01 30.06.01 31.12.00
Notes Unaudited Unaudited Audited
Capital employed
Shareholders' equity 2 604.2 2 585.2 2 553.9
Outside shareholders'
interests 17.4 17.4 17.4
Deferred taxation 408.3 405.6 397.7
Long-term liabilities 18.3 18.3 18.3
3 048.2 3 026.5 2 987.3
Represented by
Mining assets 2 466.3 2 389.2 2 272.9
Listed investments 18.1 - -
Unlisted investments 1.1 1.9 2.2
Long-term advances 41.7 41.7 61.6
Net current assets 521.0 593.7 650.6
Current assets 668.8 692.0 796.0
Inventories 19.3 16.7 13.6
Receivables 39.7 35.9 81.4
Loan to JCI Gold Ltd 1 431.4 349.1 287.2
Short-term cash advances 2 145.1 139.8 129.5
Cash and short-term funds 33.3 150.5 284.3
Current liabilities 147.8 98.3 145.4
Payables and provisions 97.5 98.3 145.4
Short-term borrowings 50.3 - -
3 048.2 3 026.5 2 987.3
Notes:
1 The loan to JCI Gold Limited is repayable on 31 December 2001, is
secured by a reversionary pledge of marketable securities and carries
interest at prime plus 1.5%.
2 Short-term cash advances consist of advances made to Durban Roodepoort
Deep, Limited amounting to R145.1 million. These advances carry interest at
prime plus 1.5%, are secured by a pledge of marketable securities with a
current market value of R131 million, and are guaranteed by Consolidated
African Mines Limited and JCI Gold Limited. These advances are repayable on
31 December 2001.
PRODUCTION RESULTS
Metric Quarter Quarter Year
ended ended ended
30.09.01 30.06.01 31.12.00
Ore milled, tonnes (000)
Western Areas section 135 113 345
South Deep section 54 51 204
Surface material - 1 60
Total ore milled 189 165 609
Yield, grams per tonne
Western Areas section 7.20 8.32 10.43
South Deep section 9.28 7.37 7.00
Surface material - 1.16 0.57
Average grade recovered 7.16 7.72 8.33
Gold production, kilograms
Western Areas section 971 942 3 599
South Deep section 501 377 1 426
Surface material - 1 34
Total gold production 1 472 1 320 5 059
Work-in-progress (118) (42) 4
Total gold declared 1 354 1 278 5 063
Imperial Quarter Quarter Year
ended ended ended
30.09.01 30.06.01 31.12.00
Ore milled, tons (000)
Western Areas section 149 125 380
South Deep section 60 56 224
Surface material - 1 66
Total ore milled 209 182 670
Yield, ounces per ton
Western Areas section 0.210 0.242 0.304
South Deep section 0.269 0.216 0.204
Surface material - 0.032 0.017
Average grade recovered 0.209 0.226 0.243
Gold production, ounces
Western Areas section 31 218 30 270 115 694
South Deep section 16 108 12 121 45 831
Surface material - 32 1 093
Total gold production 47 326 42 423 162 618
Work-in-progress (3 794) (1 334) 129
Total gold declared 43 532 41 089 162 747
COST AND REVENUE PER UNIT OF PRODUCTION
Metric Quarter Quarter Year
Ended ended ended
30.09.01 30.06.01 31.12.00
R R R
Per tonne milled
Production costs 426 416 352
Other expenses and
non-cash costs 53 58 68
Total costs 479 474 420
Per kilogram produced
Production costs 59 442 53 726 42 276
Other expenses and
non-cash costs 7 439 7 473 8 139
Total costs 66 881 61 199 50 415
Gold price received (spot)
Per tonne milled 541 546 532
Per kilogram declared 75 548 70 492 63 888
Capital commitment at end
of period (R million) 95.5 117 66
Conversion rates used: US$ 1 = Rands
Average rate for period 8.3728 8.0314 6.9362
Rate at end of period 9.0276 8.0436 7.5605
Imperial Quarter Quarter Year
Ended ended ended
30.09.01 30.06.01 31.12.00
US$ US$ US$
Per ton milled
Production costs 46 47 46
Other expenses and
non-cash costs 6 7 9
Total costs 52 54 55
Per ounce produced
Production costs 221 208 190
Other expenses and
non-cash costs 28 29 36
Total costs 249 237 226
Gold price received (spot)
Per ton milled 59 62 69
Per ounce declared 281 273 286
Capital commitment at end
of period ($ million) 11 15 9
Conversion rates used: US$ 1 = Rands
Average rate for period 8.3728 8.0314 6.9362
Rate at end of period 9.0276 8.0436 7.5605
South Deep Shaft Sinking
Main Shaft Quarter ended Quarter ended
30.09.01 30.06.01
Sinking (metres) 49 10
Metres per calendar day 0.53 0.11
Distance below
collar (metres) 2 948 2 899
Days on development 50 days - 85 days -
10, 110A lev devel. 110 lev station
Cubic metres broken
in dev. (Plan) 3 469 2 187
Cubic metres broken
in dev. (Actual) 4 591 2 904
Metres/Calendar
day sink (excl
dev. days) 1.17 1.11
Vent Shaft Quarter ended Quarter ended
30.09.01 30.06.01
Sinking (metres) 0 0
Metres per calendar day 0.00 0.00
Distance below
collar (metres) 2 759.5 2 759.5
Days on development 92 days - 91 days -
94, 100 lev devel. 100 lev devel.
Cubic metres broken
in dev. (Plan) 4 004 3 610
Cubic metres broken
in dev. (Actual) 1 683 4 548
Metres/Calendar
day sink (excl dev. days) 0.00 0.00
Summarised Development Results
Total Primary Reef Primary Reef
Development Development Sampled
Quarter Ending (m) (m) (m)
30.09.2001 1 139 20.2 0.0
30.06.2001 1 188 94.4 78.0
Year to 30.09.2001 4 096 217.1 203.0
Channel Channel Channel
Width Value
Quarter Ending (m) (m) (cm-g/t)
30.09.2001 0 0.0 0
30.06.2001 237 5.0 1 185
Year to 30.09.2001 282 5.2 1 466
Development
Metric Quarter Quarter Year
Ended ended to date
30.09.01 30.06.01 30.09.01
Advance on reef and
country rock (metres) (metres) (metres)
Ventersdorp Contact
Section 709 418 1 531
Upper Elsburg Section 430 770 2 565
Total metres 1 139 1 188 4 096
Imperial Quarter Quarter Year
Ended ended to date
30.09.01 30.06.01 30.09.01
Advance on reef and
country rock (feet) (feet) (feet)
Ventersdorp Contact
Section 2 327 1 371 5 023
Upper Elsburg Section 1 411 2 526 8 415
Total metres 3 738 3 897 13 438
WESTERN AREAS LIMITED
Registration Number 1959/003209/06
Incorporated in the Republic of South Africa
PO Box 61719, Marshalltown 2107
Telephone: +27(11) 688-5000, Fax: +27(11) 834-9195
Office of South African Transfer Secretaries :
Mercantile Registrars Limited
PO Box 1053, Johannesburg, 2001
Investor and media relations:
For further information contact Kathy du Plessis on:
Tel: +27(11) 728-4701, Fax: +27(11) 728-2547
e-mail: westernareas@dpapr.com
www.westernareas.co.za
For further details please contact
Brett Kebble on +27 11 688-5074 or +27 (0) 83-633-1803
Western Areas Profit After Tax Up
Western Areas Limited
Press Release
Johannesburg, 8 November - Western Areas posted an 8% improvement to
R17 million in profit after tax for the September quarter on the back of
another steady performance by the South Deep joint venture.
The company's gold revenue from South Deep rose by 7% to R102.3 million
during the quarter. It said this was due to a 12% increase in gold
production to 1 472 kg and the improvement in the rand gold price. Profits
from gold decreased from R17.6 million to R11.7 million due to an increase
in production costs and a decline in grade. Production costs increased due
to the increased tonnage throughput, the wage increases and once-off costs
incurred in freehold purchases.
Development of the South Deep project continued to make satisfactory
progress, with capital expenditure rising to R110.3 million in the quarter.
The R5 billion project, designed to exploit the world's single largest gold
reserve, is now less than two years away from full commissioning. Upon
completion it will make South Deep a major low-cost, long-life producer with
an annual gold output of some 700 000 ounces.
Western Areas announced last week that it had decided not to sell its 50%
interest in South Deep at this time and had instead negotiated a facility
which would raise up to US$125 million, which would enable it to make a
further distribution to shareholders in due course.
Today's announcement also said that Western Areas subsidiary Barnex had sold
its Ghanaian assets to Golden Star Resources of Canada during the quarter.
The consideration received consisted of 3.3 million Golden Star ordinary
shares, 1.3 million Golden Star warrants and a net smelter royalty in
respect of the first million ounces of gold production from the Prestea and
Bogoso operations in Ghana.
For further details please contact
Brett Kebble (CEO)
+27 11 688-5074 or +27 (0)83 653 4043
John Brownrigg (MD)
+27 11 688 5076 or +27 (0) 83-633-1803
Issued by du Plessis Associates on behalf of Western Areas Limited. dPA
contact Kathy du Plessis on
Tel : +27 11 728 4701, cell : +27 (0) 83 266 5847 or
e-mail: westernareas@dpapr.com
