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AFO
AFO
Aflease Gold Ltd - Interim Results For The 12 Months Ended 30 June 2006
Aflease Gold Ltd
Share code: AFO (JSE)
Registration number: 1984/006179/08)
ISIN: ZAE000075867
AFLEASE GOLD LTD (PREVIOUSLY SUB NIGEL GOLD MINING COMPANY LTD)
UNAUDITED INTERIM RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2006
Unaudited Unaudited Audited
Summarised Group 30 June 30 June 31 December
Balance Sheet
2006 2005 2005
Notes R"000 R"000 R"000
ASSETS
Non-current assets
Property, plant and
equipment
Mine development 10,003 - -
costs and mine plant
facilities
Undeveloped 114,015 4,096 3,844
properties
Other 136 - -
Asset retirement 681 635 656
fund
Other investments 68 - -
Amounts due from 46 5,110 5,677
related parties
124,949 9,841 10,177
Current assets
Cash and cash 31,048 209 219
equivalents
Receivables and 3,091 631 670
prepayments
Inventories - -
Short term - -
investments
34,139 840 889
Total assets 159,088 10,681 11,066
SHAREHOLDERS" EQUITY
Share capital and 148,853 16,270 16,270
share premium
Contributed surplus - -
Option reserve - -
Accumulated deficit (30,069) (20,798) (21,465)
118,784 (4,528) (5,195)
LIABILITIES
Non-current
liabilities
Amounts owing to 3,422 13,728 14,958
related parties
Asset retirement 1,345 1,086 1,127
obligation
Long term debt - -
4,767 14,814 16,085
Current liabilities
Accounts payable and 4,126 118 176
accrued liabilities
Current portion of - 277 -
long term debt
Short term loan 18 - -
Future taxation 31,411 - -
liability
35,537 395 176
Total equity and 159,088 10,681 11,066
liabilities
- -
Unaudited Unaudited Audited
Summarised Group 30 June 30 June 31 December
Income Statement
2006 2005 2005
Notes R"000 R"000 R"000
Revenue - - -
Cost of Sales - -
Gross loss - - -
Sundry income 1 - -
General and (4,238) (694) (955)
administrative
expenditure
Share options
expensed
Exploration and pre- (5,090) (13) -
feasibility
expenditure
Bankable feasibility
Impairment of
property, plant and
equipment
Write down of heap
leach and other
inventory items
Other net
income/(costs)
Operating loss (9,327) (707) (955)
Interest received 274 147 77
Interest paid (111) (261) (143)
Impairment of
goodwill
Impairment of
investments
Loss on disposal of - (391) (391)
investments
Mark to market of
derivative financial
instrument
Fair value
adjustment of short-
term investments
Loss before income (9,164) (1,212) (1,412)
taxes
Taxation (107) - -
Net loss (9,271) (1,212) (1,412)
Accumulated deficit (20,798) (19,586)
at the beginning of
the period
Accumulated deficit (30,069) (20,798)
at the end of the
period
Loss per share (2.41) (0.36) (0.42)
(cents)
Headline loss per (2.41) (0.36) (0.42)
share (cents)
Diluted loss per (2.36) (0.36) (0.42)
share (cents)
Number of shares in 440,014,600 339,011,680 339,011,680
issue
Weighted average 380,818,233
number of shares in
issue 339,011,680 339,011,680
Reconciliation of
weighted average
number of shares and
diluted average
number of shares
Average number of 380,818,233 339,011,680 339,011,680
shares
Adjusted for:
Unexercised share 6,950,000 - -
options
Diluted average 387,768,233 339,011,680 339,011,680
number of shares
Unaudited Unaudited Audited
Group Contingent 30 June 30 June 31 December
Liabilities and
Commitments
2006 2005 2005
Notes R"000 R"000 R"000
Guarantees 913 550 550
Capital commitments 6,866 - -
Operating lease 4,073 - -
commitments
Summarised Group
Statement of Changes
in Equity
Unaudited Unaudited Unaudited
Share
capital
and share Accumulated
premium deficit Total
Notes R"000 R"000 R"000
Balance at 1 January 16,270 (17,358) (1,088)
2004
Share issues - - -
Net loss for the - (2,228) (2,228)
period
Balance at 1 July 16,270 (19,586) (3,316)
2004
Share issues - - -
Net loss for the - (1,212) (1,212)
period
Balance at 30 June 16,270 (20,798) (4,528)
2005
Share issues - - -
Net loss for the - (667) (667)
period
Balance 31 December 16,270 (21,465) (5,195)
2005
Share issues 132,583 - 132,583
Net loss for the - (8,604) (8,604)
period
Balance at 30 June 148,853 (30,069) 118,784
2006
Unaudited Unaudited Audited
Summarised Group 30 June 30 June 31
Cash Flow Statement December
2006 2005 2005
Notes R"000 R"000 R"000
Cash (utilised (13,282) (516) 991
by)/generated from
operating activities
Cash utilised by (8,759) (145) (352)
operations
Investment income 274 147 77
Utilised to increase (4,572) (257) 1,409
/ (decrease) working
capital
Net cash utilised by (13,057) (255) 1,134
operating activities
Finance costs (111) (261) (143)
Taxation paid (114) - -
Cash (expended on) / 4,248 (436) (43)
retained from
investment
activities
Additions to (7,458) - -
property, plant and
equipment
Proceeds - - -
from sale
of
property,
plant and
equipment
Increase in 11,706 (436) (43)
investments
Cash flow from 39,873 377 (921)
financing activities
Proceeds from issue 36,111 - -
of shares
Decrease in long- (277) (1,464) (921)
term liabilities
(Decrease) / 4,039 1,841 -
increase in amounts
(due to) / due from
related parties
Movement in cash and 30,839 (575) 27
cash equivalents
Cash and cash 209 784 192
equivalents at
beginning of period
Cash and cash 31,048 209 219
equivalents at end
of period
- -
NOTES TO THE SUMMARISED FINANCIAL STATEMENTS FOR THE 12 MONTHS ENDED 30
JUNE 2006
1. BASIS OF PREPARATION
These summarised consolidated interim financial statements are
unaudited and have not been reviewed by our auditors. These interim
summarised consolidated financial statements of Aflease Gold
Limited (previously Sub Nigel Gold Mining Company Ltd) and its
subsidiaries are for the 12 months ended 30 June 2006. 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). 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 MERGER WITH NEW KLEINFONTEIN MINING COMPANY LTD AND CREATION
OF AFLEASE GOLD LTD
At a special meeting held on 10 January 2006 the shareholders
voted in favour of the merger of the New Kleinfontein Mining
Company Ltd group (NKMC Group) of companies and Sub Nigel Gold
Mining Company Ltd. The latter was renamed Aflease Gold Ltd.
339 011 680 shares were issued as purchase consideration and
in terms of IFRS 3, Business combinations, this merger is
accounted for as a reverse acquisition.
In line with the guidance provided by IFRS 3 the financial
results reported prior to the effective date of the
transaction are those of the acquirer (NKMC Group) and those
subsequent to the effective date of the transaction are those
of the combined entity.
Due to the reasons listed above, the comparative information
published in these abridged interim financial statements
differ from those previously published.
1.2 TRANSITION TO IFRS
Aflease Gold Ltd"s and the NKMC Group"s IFRS transition dates
were 1 July 2004 and 1 January 2004 respectively. Opening
IFRS balance sheets were prepared at those respective dates.
There were no significant changes to the consolidated opening
balance sheets at the IFRS transition dates. There was no
impact on the previously reported Group results and Group cash
flows for the 12 months ended 30 June 2005 nor on the reported
Group financial position at 30 June 2005.
The reporting date of these abridged consolidated interim
financial statements is 30 June 2006. The Group has applied
the mandatory exceptions and certain of the optional
excemptions from full retrospective application of IFRS.
Exemptions from full retrospective application of IFRS elected
by the Group
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 January 2004 transition date.
- Exemption from restatement of comparatives for IAS 32 and IAS 39.
The Group elected to apply this exemption.
Exceptions from full retrospective application followed by the
Group
The Group has applied the following mandatory exceptions from
retrospective application.
- Derecognition of financial assets and liabilities exception
Financial assets and liabilities derecognised before 1 January 2004
are not re-recognised under IFRS. The application of the exemption
from restating comparatives for IAS 32 and IAS 39 means that the
Group recognised from 1 January 2005 any financial assets and
financial liabilities derecognised since
1 January 2004 that do not meet the IAS 39 derecognition criteria.
Management did not choose to apply the IAS 39 derecognition
criteria to an earlier date.
- Estimates exception
Estimates under IFRS at 1 January 2004 should be consistent with
estimates made for the same date under previous GAAP, unless there
is evidence that those estimates were in error.
- Assets held for sale and discontinued operations exception
Management applies IFRS 5 prospectively from 1 January 2005. Any
assets held for sale or discontinued operations are recognised in
accordance with IFRS 5 only from 1 January 2005. Aflease did not
have any assets that met the held-for-sale criteria during the
period presented. No adjustment was required.
- Changes in existing decommisioning, restoration ands similar
liabilities included in the cost of property, plant and equipment
The Group has elected to apply this exemption.
COMMENTARY
FINANCIAL RESULTS
Reverse acquisition NKMC Group
In the current financial year the merger between Sub Nigel Gold Mining
Company Ltd and the NKMC Group was accomplished through the issue of
shares to Aflease Gold and Uranium Resources Ltd.
Except for the cash taken over, this transaction has been excluded from
the cash flow statement, as it did not result in an exchange for cash.
The aggregate fair values of the assets acquired and liabilities assumed
were as follows:
R"000
Property, plant and equipment 4,809
Undeveloped properties 108,313
Loan account 9,281
Receivables and prepayments 406
Cash and cash equivalents 11,820
Asset retirement obligation (213)
Accounts payable and accrued liabilities (6,533)
Future taxation liability (31,411)
Value of business combination 96,472
Fair value of NKMC Group 228,639
Cash taken over 11,820
Shares consideration (325,111)
Net cash flow 11,820
Except for the cash taken over, this transaction has been excluded from
the cash flow statement as it did not result in an exchange for cash.
Trinity share swap agreement and acquisition of Randgold shares
Aflease Gold has concluded a share exchange agreement (the "Share Swap
Agreement") with Trinity Asset Management (Proprietary) Limited and
Trinity Holdings (Proprietary) Limited (collectively, "Trinity").
Under the Share Swap Agreement, subject to certain conditions, Aflease
Gold will acquire from Trinity not less than 7 500 000 and not more than
13 000 000 ordinary shares of Randgold and Exploration Limited
("Randgold"), the exact number of such Randgold shares within such range
(the "Trinity Swap Shares") to be determined by Aflease Gold at its
discretion, in exchange for the issuance of a number of Aflease Gold
ordinary shares (the "Aflease Gold Swap Shares"), equal to not less than
7 and not more than 10 times the number of Trinity Swap Shares (the
"Share Swap Transaction").
Shareholders are referred to the cautionary announcement released on
SENS on 30 May 2006.
Construction of Modder East Gold Mine
In May 2006 the Aflease Gold Board approved the commencement of the
initial phase of the construction of the Modder East Gold Mine located
near the Town of Springs on the East Rand. Activities under the 20
million Rand program approved by the Aflease Gold Board include site
clearing and box cut excavation. The program also includes the
selection and training of workers, the provision of basic services and
surface infrastructure and the purchase of trackless development
equipment for the decline.
Shareholders are referred to the cautionary announcement released on
SENS on 18 May 2006.
Additional prospecting rights granted
The following three additional prospecting rights for properties in the
East Rand were granted in terms of Section 17
of the Minerals and Petroleum Resources Development Act, Act 28 of 2002:
- The Holfontein prospecting right;
- The Turnbridge prospecting right;
- The Sub Nigel area 6 prospecting right.
In total all 4 prospecting rights secure Aflease Gold an area of 10 000
hectares in the East Rand to undertake prospecting activities over the
next 5 years. In addition to the prospecting rights in South Africa,
Aflease Gold also has an exclusive prospecting licence for 65 000
hectares in Namibia.
Shareholders are referred to the cautionary announcement released on
SENS on 9 May 2006.
Signed on behalf of the Board:
NJ Froneman DJ Nortier
(Chief Executive Officer) (Chief Financial Officer)
Johannesburg
14 August 2006
Date: 14/08/2006 11:10:39 AM Produced by the JSE SENS Department
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