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AFO
AFO
Aflease Gold - Unaudited interim financial results for the 6 months ended
31 December 2005
Aflease Gold Limited
(Formerly Sub Nigel Gold Mining Company Ltd)
(Incorporated in the Republic of South Africa)
Share Code: AFO (JSE)
(Registration number 1984/006179/08)
ISIN: ZAE000075867
("Aflease Gold" or "the Company")
AFLEASE GOLD LTD (PREVIOUSLY SUB NIGEL GOLD MININGCOMPANY LTD)
UNAUDITED INTERIM ABRIDGED FINANCIAL RESULTS FOR THE 6 MONTHS ENDED 31 DECEMBER
2005
INCOME STATEMENT
Group
Restated
Unaudited Unaudited Restated
6 months to 6 months to 12 months to
31 December 31 December 30 June
2005 2004 2005
R"000 R"000 R"000
Revenue 701 - -
Cost of sales (1,642) - -
Gross profit / (loss) (941) - -
Other income 15 221 -
Other expenditure (3,854) (1,630) (3,528)
Employee share options (988) - (639)
Operating Loss (5,768) (1,409) (4,167)
Investment income 145 18 30
Impairment of mining assets (2,506) - (24.229)
Finance costs (63) (7) (22)
Loss before taxation (8,192) (1,398) (28,388)
Taxation - - (54)
Loss after taxation (8,192) (1,398) (28,442)
Loss per share (cents) (10.25) (2.08) (40.58)
Headline loss per share (cents) (7.12) (2.08) (6.01)
Diluted loss per share (cents) (9.36) (2.08) (35.01)
Number of shares in issue 85,152,970 71,126,486 73,752,920
Weighted average number of shares 79,891,052 67,259,706 70,091,531
in issue
BALANCE SHEET
Group
Unaudited Unaudited Restated
6 months to 6 months to 12 months to
31 December 31 December 30 June
2005 2004 2005
R"000 R"000 R"000
ASSETS
Non-current assets 4,809 30,688 7,074
Mining assets 2,610 26,305 2,610
Mining rights 2,109 4,373 4,373
Property, plant and equipment 90 10 91
Current Assets 11,833 2,816 1,786
Inventory - - 53
Trade and other receivables 66 108 558
Cash and cash equivalents 11,767 2,708 1,175
Total assets 16,642 33,504 8,860
EQUITY AND LIABILITIES
Capital and reserves 14,681 32,827 8,233
Stated capital 50,427 33,524 35,787
Option Reserves 187 - 187
Accumulated profit / (loss) (35,933) (697) (27,741)
Non-current liability 181 181 181
Current liabilities 1,780 496 446
Provision for rehabilitation 213 150 150
Trade and other payables 1,567 346 296
Total equity and liabilities 16,642 33,504 8,860
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Unaudited Unaudited
Stated Option Accumulated
Capital Reserve (Loss) / Total
Profit
R"000 R"000 R"000 R"000
Group
Balance at 1 July 30,428 - 701 31,129
2004
Share issues 5,359 187 - 5,546
Net loss for the - - (28,442) (28,442)
period
Balance 30 June 2005 35,787 187 (27,741) 8,233
Share issues 14,640 - - 14,640
Net loss for the - - (8,192) (8,192)
period
Balance at 31 50,427 187 (35,933) 14,681
December 2005
Company
Balance at 1 July 30,618 - 692 31,310
2004
Share issues 5,359 187 - 5,546 0
Net loss for the - - (28,409) (28,409)
period
Balance at 30 June 35,977 187 (27,717) 8,447
2005
Share issues 14,640 - - 14,640
Net loss for the - - (8,171) (8,171)
period
Balance at 31 50,617 187 (35,888) 14,916
December 2005
CASHFLOW STATEMENT
Group
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31 December 31 December 30 June
2005 2004 2005
R"000 R"000 R"000
Cash (utilised by) operating (2,807) (1,338) (4,068)
activities
Cash utilised by operations (4,768) (1,404) (3,578)
Investment income 145 18 30
Utilised to increase / (decrease) 1,816 55 (498)
working capital
Net cash (utilised by) operating (2,807) (1,331) (4,046)
activities
Finance costs - (7) (22)
Cash (expended on) retained from (253) 1 (613)
investment activities
Additions to property, plant and (11) (2) (79)
equipment
Proceeds from sale of property, - 3 -
plant and equipment
Additions to mining assets (242) - (534)
Cash flow from finance activities 13,652 3,096 4,907
Proceeds from issue of share 13,652 3,096 4,720
capital
Increase / (decrease) in long - - 187
term liabilities
Movement of cash and cash 10,592 1,759 226
equivalents
Cash and cash equivalents at 1,175 949 949
beginning of year
Cash and cash equivalents at end 11,767 2,708 1,175
of period
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2005
1. BASIS OF PREPARATION:
These abridged consolidated interim financial statements are unaudited and have
not been reviewed by our auditors. These abridged consolidated interim
financial statements of Aflease Gold Limited (previously Sub Nigel Gold Mining
Company Ltd) and its subsidiaries are for the six months ended 31 December
2005. They have been prepared in accordance with IAS 34, Interim Financial
Reporting, and are covered by International Financial Reporting Standard
("IFRS") 1, First-time Adoption of IFRS, because they are part of the period
covered by the Group"s first IFRS financial statements for the year ended 31
December 2006 (this will be an 18 month reporting period).
These abridged consolidated interim financial statements were prepared in
accordance with South Africa"s Generally Accepted Accounting Principles ("SA
GAAP") until 30 June 2005. SA GAAP differs in some areas from IFRS.
The preparation of financial statements in accordance with IAS 34 requires the
use of certain critical accounting estimates. It also requires management to
exercise judgement in the process of applying the Group"s accounting policies.
There were no areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the abridged
consolidated interim financial statements.
1.1 Transition to IFRS
The Group"s financial statements for the 18 months ending 31 December 2006 will
be the first annual financial statements that comply with IFRS. The IFRS
transition date is 1 July 2004. The Group prepared its opening IFRS balance
sheet at that date.
There were no significant changes to the Group"s opening IFRS balance sheet.
There was no impact on the reported cash flows of the group. There was also no
impact on the previously reported results for the 6 months to 31 December 2004
or the previously reported financial position at 31 December 2004.
The reporting date of these abridged consolidated interim financial statements
is 31 December 2005. The Group"s IFRS adoption date is 1 July 2005. In
preparing these abridged consolidated interim financial statements in
accordance with IFRS1, the Group has applied the mandatory exceptions and
certain of the optional exemptions from full retrospective application of IFRS.
The Group has elected to apply the following optional exemptions from full
retrospective application.
- Business combinations exemption
The Group has applied the business combinations exemption in IFRS 1. It has not
restated business combinations that took place prior to the 1 July 2004
transition date.
- Exemption from restatement of comparatives for IAS 32 and IAS 39.
The Group elected to apply this exemption.
- Fair value or revaluation as deemed cost for property, plant and equipment
and intangible assets.
The Group elected to apply this exemption.
- Changes in existing, decommissioning, restoration and similar liabilities
included in the cost of property, plant and equipment.
The Group elected to apply this exemption.
2. DETAILS OF IFRS ADJUSTMENTS
Share options were granted to employees under an employee share incentive on 15
March 2005. Other than costs incurred in administering the schemes, which were
expensed as incurred, the schemes did not previously result in any expense in
the income statement, but only to a dilution in earnings per share when the
shares were issued. The group now recognises an expense in the income
statement, with a corresponding credit to equity, representing the value of
employee share options granted, recognised on a straight-line basis over the
vesting periods of the options in accordance with the requirements of IFRS 2
Share based payments.
Reconciliation of Loss for the year ended 30 June 2005
Unaudited Unaudited Unaudited
Previous Effect of
GAAP transition
to IFRS IFRSs
R"000 R"000 R"000
Revenue - - -
Expenditure (3,528) (639) (4,167)
Operating Loss (3,528) (639) (4,167)
Investment Income 30 - 30
Impairment of mining assets (24,229) - (24,229)
Finance costs (22) - (22)
Loss before taxation (27,749) (639) (28,388)
Taxation (54) - (54)
Loss after taxation (27,803) (639) (28,442)
Reconciliation of Assets, Liabilities And Equity for the year ended 30 June
2005
Assets Liabilities Equity
R"000 R"000 R"000
Previous GAAP 8,860 (446) (8,233)
Increase in stated capital (IFRS - - (639)
2 - share option scheme)
Increase in accummulated loss - - 639
(IFRS 2 - Share option scheme)
Balance reported under IFRS 8,860 (446) (8,233)
3. ADDITIONAL INFORMATION TO THE FINANCIAL RESULTS
Group
Restated
Unaudited Unaudited Restated
6 months to 6 months to 12 months
to
31 December 31 December 30 June
2005 2004 2005
R"000 R"000 R"000
Reconciliation of basic loss to
headline loss
Basic Loss (8,192) (1,398) (28,442)
Adjusted with:
- Impairment of mining assets 2,506 - 24,229
Headline earnings (5,686) (1,398) (4,213)
Reconciliation of weighted
average number of shares and
diluted average number of shares
Weighted average number of shares 79,891,052 67,259,706 70,091,531
Adjusted wiith:
- Share incentive scheme 7,600,000 - 11,150,000
Diluted average number of shares 87,491,052 67,259,706 81,241,531
4. DIRECTORS AND COMPANY SECRETARY
During the period under review and to the date of this report, the following
changes have occurred:
During the period under review the following changes have occurred:
Directors
The following directors resigned:
On 19 August 2005 - Mr ST Ward *
On 23 January 2006 - Mr AC Reynolds *, Mr PSG Glyn **, Mr HG Veldsman **
The following directors were appointed:
On 13 July 2005 - Mr S Swana **
On 23 January 2006 - Mr S Zungu **, Mr NJ Froneman *, Mr DJ Nortier *, Mr R van
Niekerk *, Mr KV Dicks **, Ms S Maziya **, Mr PB Kruger **
* Executive Director
** Non-Exectuive Director
Company secretary
Ms F van Wyk (resigned 11 November 2005), Statucor (Pty) Ltd (appointed 11
November 2005, resigned 10 January 2006),
Ms C Bannerman (appointed 23 January 2006).
5. EVENTS SUBSEQUENT TO BALANCE SHEET DATE
5.1 Merger with New Kleinfontein Gold Mining Company (Pty) Ltd
At a special meeting held on 10 January 2006 the shareholders voted in favour
of a merger of New Kleinfontein Gold Mining Company (Pty) Ltd, a wholly owned
subsidiary of sxr Uranium One Inc, and was renamed Aflease Gold Ltd. The issued
share capital increased from 85 152 970 to 426 644 600 as a result of this
transaction.
COMMENTARY
FINANCIAL RESULTS
The merger between Sub Nigel and New Kleinfontein Mining Company was completed
in January 2006, so the figures under review pre-date the transaction, refer
only to the activities of Sub Nigel, and do not incorporate activities around
our flagship Modder East project.
There was a small loss after taxation for the 6 months ended 31 December 2005
of R8,192m, a 486% increase on the loss of
R1,398m for the previous comparable period.
The major contributors to the increased loss were an increase in mining and
development costs (R1,642m), the expensing of share options in terms of IFRS 2
(R0,988m), merger costs incurred on the transaction with New Kleinfontein Gold
Mining Company (Pty) Ltd and the impairment of mineral rights (R2.506m).
During the period under review, sweeping and vamping operations at Sub Nigel
continued on a minor scale. These marginal activities were stopped following
the merger.
The Group has impaired the balance of the mining assets carried on the
Ventersburg project in the Free State (R2,506m), as these resources are not yet
SAMREC compliant.
The Group plans an exploration programme to assess the potential of this asset,
in the belief that this is a highly prospective exploration target.
Since the share options were only issued to employees on the 15th of March 2005
there was no comparable expense for the R0,998m in the 6 month reporting period
ended 31 December 2004. Other expenditure of R3,854m was 136% higher than the
R1,630m figure for the second half of 2004. This expenditure included the costs
of the merger between Sub Nigel and New Kleinfontein Mining Company.
CREATION OF AFLEASE GOLD
Shareholders of Sub Nigel voted on 10th January by 99.63% in favour of the
merger with NKMC. The transaction was completed at the end of January 2006.
Aflease Gold is 79% owned by sxr Uranium One.
BUSINESS PROSPECTS
As announced on 7 February 2006 the results of the drilling programme for the
feasibility study performed in the Modder East reserve base have provided
further confidence in the quality and quantity of the ore body and have
expanded the areas where gold can be mined profitably.
A feasibility study on Modder East is due in the second quarter, which will
enable the Group to embark on the raising of funds for the development of the
mine.
The Group has been successful in its applications for a prospecting license in
Namibia and prospecting rights in South Africa.
Shareholders are referred to the SENS announcement published on 13 March 2006
for full details in this regard.
The exploration programme at Sub Nigel is expected to be expanded aggressively
during March 2006 and the results of the bankable feasibility study are
expected during the second quarter.
Signed on behalf of the Board:
NJ Froneman DJ Nortier
(Chief Executive Officer) (Chief Financial Officer)
Johannesburg
24 March 2006
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Ltd.
70 Marshall Street
Marshalltown, 2107
Registered Office
Aflease Gold Ltd
No. 1 Shaft
Sub Nigel, 1490
Sponsor
Nedbank Capital
Disclaimer
Statements made in this announcement with respect to Aflease Gold"s current
plans, estimates, strategies and beliefs and other statements that are not
historical facts are forward-looking statements about the future performances
of Aflease Gold. These statements are based on management"s assumptions and
beliefs in light of the information currently available to it. Aflease Gold
cautions you that a number of risk and assumptions could cause actual results
to differ materially from those discussed in the forward-looking statements,
and therefore you should not place undue reliance on them. The potential risk
and assumptions include, amongst others, risks associated with fluctuations in
the rand-dollar exchange rate, dollar market price of gold, gold production at
operations, estimates of reserves and resources. Aflease Gold assumes no
obligation to update information of this release.
Date: 24/03/2006 02:50:11 PM Produced by the JSE SENS Department
