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Sub Nigel Gold Mining Company Limited - 2003 Annual Report
Release Date: 08/09/2003 17:20:43 Code(s): SBN
SUB NIGEL GOLD MINING COMPANY LIMITED - 2003 ANNUAL REPORT
SUB NIGEL GOLD MINING COMPANY LIMITED
(Reg No. 1984/006179/06)
("Sub Nigel" or "the company")
Share Code: SBN
ISIN: ZAE 000006391
2003 ANNUAL REPORT
Balance Sheet
At 30 June 2003
2003 2002
Notes R000"s R000"s
Assets
Mining assets 2 29 241 27 183
Property, plant and 3 11 6
equipment
Current Assets 485 488
Accounts receivable 325 25
Cash and cash 160 463
equivalents
29 737 27 677
Equity and
liabilities
Capital and reserves 28 192 27 525
Share capital 4 23 643 22 440
Non-distributable 4 743 4 743
reserve
Accumulated (loss) / (194) 342
reserve
Long term liability 5 1 330 -
Current liabilities 215 152
Accounts payable 107 152
Bank overdraft 108 -
29 737 27 677
Statement of changes
in equity
For the year ended 30 Non-
June 2003
Stated Distributable Distributable
Capital Reserve Reserve
R000"s R000"s R000"s
Balance at 1 July 22 440 4 793 666
2001
Net loss for the year - - (374)
Reversal of income
appropriated against
expenditure on mining - (50) 50
assets
Balance at 1 July 22 440 4 743 342
2002
Net loss for the year - - (536)
Share issues 1 203 - -
Balance at 30 June 23 643 4 743 (194)
2003
Income Statement
For the year ended 30
June 2003
2003 2002
Notes R000"s R000"s
Revenue - -
Expenditure 6 (560) (438)
Operating loss (560) (438)
Investment income 31 64
Finance costs (7) -
Loss before (536) (374)
taxationTaxation 7 - -
Loss after taxation (536) (374)
Loss per share and
headline loss per (1,06) (0,84)
share (cents)
Weighted average loss (1,12) (0,84)
per share (cents)
Number of shares in 50 631 492 44 631 492
issue
Weighted average 47 798 159 44 631 492
number of shares in
issue
Cash Flow Statement
For the year ended 30
June 2003
2003 2002
Notes R000"s R000"s
Cash utilised by 453 (313)
operating activities
Cash utilised by 8 (556) (435)
operations
Investment income 31 64
Utilised to increase 9 985 58
working capital
Cash generated 460 (313)
by/(utilised by)
operating activities
Finance costs (7) -
Cash (expended on)
/retained from (864) 41
investing activities
Net disposal of mining - 50
assets
Additions to property, (9) (9)
plant and equipment
Additions to mining 10 (855) -
assets
Movement of cash and (411) (272)
cash equivalents
Cash and cash
equivalents at 463 735
beginning of year
Cash and cash 52 463
equivalents at end of
year
NOTES TO THE FINANCIAL STATEMENTS
At 30 June 2003
1. Accounting policies
The annual financial statements incorporate the following principal
accounting policies, which have been applied on a basis consistent with the
previous year. These statements comply with the South African Statements of
Generally Accepted Accounting Practice.
1.1 Basis of presentation
The annual financial statements are prepared on the historical cost
basis of accounting.
1.2 Mining assets
In accordance with the accounting practice historically adopted by the
mining industry in South Africa, the following policies are applied:
The company"s mining assets are of a wasting nature. In order to
recognise this, the company appropriates from income, within the
lifetime of the operations, such amounts, which, together with the
stated capital and long-term liabilities of the company, at least
equate to the expenditure on these assets. Income so appropriated is
not, therefore, available for distribution to shareholders.
In pursuance of this policy, no account is taken of depreciation of
these assets or the exhaustion of ore reserves. Normal replacement of
assets is charged against revenue.
1.3 Property, plant and equipment
Property, plant and equipment are stated at cost and depreciated on
the straight-line basis at rates considered appropriate to reduce
carrying values to estimated residual value over their estimated
useful lives. Cost includes all costs directly attributable to
bringing the assets to working condition for its intended use.
The estimated useful life of computer equipment is 3 years.
2003 2002
R000"s R000"s
2. Mining assets
Buildings, mining title, shafts
and equipment and net expenditure
capitalised.
At cost less amounts recovered 29 241 27 183
3. Property, plant and equipment
Computer equipment
Opening net carrying value 6 -
- -
Gross carrying value 9 -
Accumulated depreciation (3) -
Additions 9 9
Depreciation (4) (3)
Closing net carrying value 11 6
Gross carrying value 18 9
Accumulated depreciation (7) (3)
4. Share capital
Authorised
- 200 000 000 (2002: 200 000 000)
ordinary shares of no par value
Issued
- 50 631 492 (2002: 44 631 492) ordinary
shares of no par value
- stated capital account 23 643 22 440
The unissued shares of the company are
under the control of the directors,
subject to sections 221 and 222 of the
Companies Act, 1973, as amended, and to
the rules and regulations of the JSE
Securities Exchange South Africa until
the next annual general meeting.
In terms of the rules of the Sub Nigel
Share Incentive Scheme, the directors have
the right to offer shares, or grant options
in respect of shares, to specified employees
for a maximum aggregate of 698 333 shares
in the company. 126 434 Shares are held by
the Trust and are currently unallocated.
5. Long term liability
Centracor Resources (SA) (Pty) Ltd 1 330 -
Conditions of the loan repayment are to
be decided by the directors by the
31 December 2003.
6. Expenditure
Included in net loss is the following:
Auditors" remuneration 13 13
Directors" remuneration
- Executive
Fees for services as directors
H G Veldsman 70 -
A C Reynolds 72 -
- Non-executive
Fees for services as directors
C A Jaffe - 4
P St G Glyn - 4
142 8
2003 2002
R000"s R000"s
7. Taxation
The estimated tax loss available for
set off against future taxable income
amounts to 1 205 1 023
In addition, unredeemed capital
expenditure available for set off
against future taxable income derived
from mining operations at Sub Nigel
amounts to 30 553 30 397
8. Cash utilised by operations
Net loss (536) (374)
Depreciation 4 3
Investment income (31) (64)
Financing costs 7 -
(556) (435)
9. Utilised to increase working capital
Increase in accounts receivable (300) (13)
Increase in accounts payable 1 285 71
985 58
10. Non-cash flow investing and
financing activities
Additions to mining assets 2 058 -
Financed by cash (855) -
Financed by share issues 1203 -
REPORT OF THE INDEPENDENT AUDITORS
To the members of Sub Nigel Gold Mining Company Limited
We have audited the annual financial statements of Sub Nigel Gold Mining Company
Limited set out on pages 2 to 7 for the year ended 30 June 2003. These financial
statements are the responsibility of the company"s directors. Our responsibility
is to express an opinion on these financial statements based on our audit.
SCOPE
We conducted our audit in accordance with statements of South African Auditing
Standards. These standards require that we plan and perform the audit to obtain
reasonable assurance that the financial statements are free of material
misstatement. An audit includes:
* examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements,
* assessing the accounting principles used and significant estimates made by
management, and
* evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
AUDIT OPINION
In our opinion, the financial statements fairly present, in all material
respects, the financial position of the company at 30 June 2003 and the results
of its operations and cash flows for the year then ended in accordance with
South African Statements of Generally Accepted Accounting Practice, and in the
manner required by the Companies Act in South Africa.
Moores Rowland
Registered Accountants and Auditors
Chartered Accountants (SA)
Cape Town, 25 August 2003
DIRECTORS REPORT
Nature of business
The company continued to operate on a care and maintenance basis.
An application has been submitted to the Department of Mineral and Energy for a
mining authorization in terms of the proposed Minerals and petroleum Resources
Development Bill.
Discussions are in progress regarding the future development of Sub Nigel.
Announcements will only be made in this regard should conclusive negotiations
take place.
Review of activities and developments during the year
The company successfully concluded negotiations for the acquisition of:
* mining claims from Zarara Energy Limited for the issue to Zarara Energy
Limited of 1 (one) million new ordinary shares of no par value in the company;
and
* mining claims and mining lease from GFL Mining Services Limited for the issue
to GFL Mining Services Limited of 5 (five) million new ordinary shares of no
par value in the company.
Mining License Number 8/2003 granted to Sub Nigel Gold Mining Company Limited on
26 February 2003, grants the company the right to mine within an area
incorporating both the Sub Nigel property and the recently acquired mining
claims and mining lease.
Surface bore hole drilling
Drilling operations carried out to investigate the economic potential of the
shallow UK9 A reef are inconclusive. Further drilling will be necessary.
Drilling operations to investigate additional gold resources on the Sub Nigel /
Spaarwater properties are planned.
Additional precious metal rights
Negotiations with third parties are in progress.
Black economic empowerment
Discussions with third parties are in progress.
Dividends
No dividend was declared in respect of the year ended 30 June 2003, nor is one
proposed (2002:R nil).
Share issues
6 000 000 Ordinary shares were issued during the year, which resulted in 50 631
492 (2002:44 631 492) ordinary shares of no par value in issue. (See note 4 of
the notes to the Annual Financial Statements)
Borrowing powers
In terms of the Articles of Association, the borrowing powers of Sub Nigel are
unlimited.
Directors
The following directors held office during the period under review:
Mr Leslie Gordon Holmes:
Non-executive chairman, executive chairman up to 19/07/2003; Age 60
Mr Patrick St George Glyn:
Non-executive director; B Com; B Compt (Hons); C.A. (SA); Age 47
Mr Hendrik Gideon Veldsman:
Executive director; BSc Hons (Geology); Age 54
Mr Adrian Carl Reynolds:
Executive director, appointed 1 January 2003; Age 55
In terms of the company"s articles of association, Mr HG Veldsman and Mr P St G
Glyn retire at the forthcoming annual general meeting. Both are eligible for re-
election.
Directors" interests
The direct and indirect beneficial interests of the directors of Sub Nigel
shares as at 30 June 2003 are set out below. These interests remain unchanged at
the date of this report.
Direct % Beneficial %
Indirect
L G Holmes - - 15,885,461 31.37%
A C Reynolds - - 1,500,000 3.0 %
H G Veldsman 359,200 0.7% 1,500,000 3.0 %
P St G Glyn 100 - -
359,300 0.7% 18,885,461 37.37%
The directors hold no options to acquire shares.
Corporate governance
The directors of Sub Nigel endorse the principles of openness, integrity and
accountability in the Code of Corporate Practices and Conduct as set out in the
King 2 Report on Corporate Governance for South Africa (The Code). The company
has a unitary board structure comprising 2 executive and 2 non-executive
directors. The executive directors are responsible for the day-to-day business
activities and risk management of the company and are also responsible for
ensuring that the decisions, strategies and views of the board are implemented.
The directors do not believe that it is practical to apply the full extent of
The Code to activities of the company because the company has no direct
employees. For this reason the requirements of The Code as to remuneration and
audit committees are not met as they are not considered relevant. Likewise the
company does not have formal written policies on ethical standards, stakeholder
philosophy, employees and environment and health and safety.
Major shareholders
Set out below are the shareholders holding 5% or more in the capital of the
company as at 30 June 2003:
Number of shares %
GFL Mining Services Ltd 5,000 000 9.88%
L G Holmes 15,885,461 31.37%
Shareholder spread
To the best knowledge of the directors and after reasonable enquiry, the spread
of shareholders as at 25 August 2003, as defined by the JSE Securities Exchange
South Africa, was as follows:
Number of Shareholders % Shareholding
Public shareholders 1226 62%
Non-public shareholders 4 38%
Post balance sheet event
A cautionary announcement was published in the press with regard to Sub Nigel
being involved in negotiations to raise capital in order to exploit its mineral
assets.
CERTIFICATE OF COMPLIANCE
In terms of Section 268(G)(d) of the Companies Act, 1973, as amended, I certify
that the company has lodged with the Companies and Intellectual Property
Registration Office (CIPRO) all such returns as required by the Companies Act
and that all such returns are true, correct and up to date.
CK Loydall (Mrs)
Company Secretary
Registered office Transfer Secretaries
302 Satbel Centre Computershare Limited
2 De Smidt Street 70 Marshall Street
Green Point, 8005 Marshalltown, 2107
Tel No. : (021) 419 9548
Fax No. : (021) 418 4798 Sponsors
Email : capetr@iafrica.com Sasfin Corporate Finance
A Division of Sasfin Bank Limited
Bankers P.O. Box 95104
Nedbank Limited Grant Park, 2051
A Division of Nedcor Bank Limited
The Southern Peninsula Attorneys
57 Heerengracht Webber Wentzel Bowens
Cape Town, 8000 P.O. Box 61771
Marshalltown, 2107
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