Interim Results
Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration
10 March 2014
Goldplat plc ('Goldplat' or 'the Company')
Interim Results
Goldplat plc, the AIM listed gold producer, announces its interim results for the six months ended 31 December 2013 ('H1 2014').
Overview
Focussed on restructuring Goldplat's gold recovery and mining business in Africa to be profitable in the changed economic environment
Weak gold prices impacted revenues for the period, but cost control measures across operations expected to improve revenues for H2 FY 2014
First secondary gold producer in South Africa to obtain accreditation as a 'Responsible Gold' producer - opportunity for competitive advantage
Examining Joint Venture opportunities to redevelop Kilimapesa gold mine in Kenya subject to proposed Kenyan legislation
Chairman's Statement
Our portfolio of assets consist of our primary market leading gold recovery operations in South Africa and Ghana, and three gold exploration and development mining assets in Kenya, Ghana and Burkina Faso.
This has been a difficult period for the Company as we have adapted to the substantial reduction in the gold price experienced during the period under review. Goldplat's income is dominated by the sale of gold. The gold price for the six months ended 31 December 2012 averaged almost US$1,700/oz and for the whole of the year ended 30 June 2013 approximately US$1,600/oz. For the six months ended 31 December 2013 however the price averaged some US$1,300/oz. It follows that the same volume of gold sales would result in income of some US$300/oz less than for FY 2013.
Goldplat's exposure to the gold price is mitigated by the fact that it can, and does, adjust the price of gold bearing material it purchases, thus putting it at an advantage compared with a mine reliant on a finite orebody. However, this mitigation is not immediate in effect, as the Group tends to be processing stockpiles purchased some time previously. Furthermore the major part of Goldplat's costs are processing costs which do not vary with the gold price, rather tending to increase with inflation. In South Africa and Ghana the reduction in the local currencies has helped, but the main factors in the improving trading position are the cost control measures introduced by management.
Coupled with the recent strengthening in the gold price, these measures reinforce the statement contained in the last annual report, that, while the first half was a difficult trading period, we expect improvements to show in H2 2014.
We have implemented a number of initiatives to improve processing costs and efficiencies, and in turn profitability. We obtained certification as a 'Responsible Gold' producer at our South African recovery operation, a major achievement which gives us an advantage over our competitors and which, we believe, will lead to increased business. During the accreditation process, however, our ability to produce gold from by-products was impacted by deliveries from major suppliers awaiting the completion of the accreditation process, and this reduced production for the first half year.
In addition, in line with our longer-term growth strategy we continue to evaluate opportunities for expanding our gold recovery operations in Africa and more specifically in Burkina Faso; however in the near-term we remain focussed on the operational profitability and success of our South African and Ghanaian operation before making such expansion moves.
We are also reviewing different options to monetise our gold exploration and development mining assets in Kenya, Ghana and Burkina Faso, be it through sale, development or joint venture opportunities. These projects were de-prioritised last year in order to stem losses and allow us to focus on building our revenue generating recovery operations.
With the above developments in mind, our first half results are below those of the six months ended 31 December 2012, resulting in an operating loss of £694,000 (2012: profit £2,057,000) and a loss before tax of £912,000 (2012: loss after impairment charge £814,000.) However, as noted, the second half of the year is already performing more strongly and we expect, in line with market expectations, to return to profitability by the year end.
Gold Recovery Operations
Our market leading gold recovery operations in South Africa and Ghana recover gold from by-products of the mining process, such as woodchips, mill liners, fine carbon, slags, sludges and waste grease. In addition to generating revenues from gold sales from concentrates produced for the Company, our recovery services also provide an economic method for mines to dispose of waste materials while at the same time adhering to a mine's environmental obligations. Our operations boast a substantial blue-chip supplier base from which we purchase mining by-products from which to recover gold, and also includes a mix of local producers and artisanal (primarily) in Ghana, West Africa where there is an active presence.
Goldplat Recovery (Pty) Limited - South Africa ('GPL')
We were delighted to announce in December 2013 that we had been accredited as a Responsible Gold depositor in line with international guidelines. The accreditation was a major achievement for the Company and accounts for gold produced, which follows the 'Chain of Custody' requirements consistent with the Organisation of Economic Co-operation and also adheres to the London Bullion Market Association's 'Responsible Gold Guidance' and the World Gold Council certification of 'Conflict-Free' gold. Notably, we are the first secondary gold producer in South Africa to obtain this status, and we believe that with this accreditation in hand we offer a unique selling position that significantly differentiates us from competitors. We believe that as a 'responsible gold' depositor and gold recovery services business, our business offering is enhanced and has the potential to positively impact future contracts, profits and cash flows for GPL. During the due diligence period for gaining 'Responsible Gold' accreditation, Goldplat was limited in accepting by-products from suppliers nor could concentrates be sent for further processing until accreditation was achieved, which resulted in a reduction of gold sales during H1 2014. By-products and concentrates are now being delivered and revenues from by-product sources are expected to return to its usual levels in second half of FY 2014.
As previously highlighted, we have implemented a number of changes at GPL focussed on adapting to the current suppressed gold price environment. To help mitigate the decrease in the gold price and boost operating margins, we have focussed on revising our by-product procurement contracts and cancelling lower grade by-product contracts with existing suppliers.
Additionally, as previously announced, we have agreed to purchase cyanide direct from local suppliers in liquid form rather than importing in briquette form, and to automate the dosing system in order to reduce costs. Since October 2013, we have achieved major cost savings in cyanide consumption and will increase these savings further by converting the plant to liquid cyanide supply during H2 2014. These actions have improved margins and will result in an increased overall yield going forward.
We are also looking to increase our by-product processing throughput at GPL to help increase production. In line with this, small sections of the plant, previously run on a single shift system for security reasons, will be run on 24 hour shifts to increase production, and additional security measures will be taken. This will be effective from April 2014.
To provide a source of high grade material for processing at our main plant in Benoni, Johannesburg, we obtained the right to mine ore from Central Rand Gold's ('CRG') Crown East No 4 shaft. Mining is undertaken by a third party contractor. This small scale operation has been operating profitably for the reporting period under review and we intend to continue the development and opening up of this project.
This constant investment in our recovery operations underpins our commitment to ensuring we maintain a competitive service offering and stronghold on gold recovery in the area at GPL. The current depreciation in the South African Rand versus the US Dollar we believe will help to mitigate against the lower gold price environment in the H2 2014. Nonetheless, with more favourable exchange rates, renegotiated and more cost-effective contracts, and more streamlined operations, we are confident that the operational and trading outlook for the second half of FY 2014 looks much stronger.
Gold Recovery Ghana Limited - Ghana ('GRG')
GRG's gold recovery operation, which enjoys a tax free status until 2016, is located in the free port of Tema in Ghana. Our GRG recovery operation is similar to our mature South African recovery plant as it processes by-products from the primary mining process. However, it has additional upside potential through processing artisanal tailings that it processes due to West Africa's active artisanal mining presence. Whilst GRG benefitted from a reduction in the value of the Ghana Cedi, which has helped offset the recent lower gold price environment, it still sustained marginal pressures, which impacted profitability during H1 2014. However, in line with actions undertaken by the Board, during the latter part of H1 2014 and the second half of the year to date GRG has been performing well.
As we have previously defined, GRG has three main profit centres. The first of these is GRG's agreement with Endeavour Resources ('Endeavour') where tailings purchased by GRG from artisanal and small scale miners are processed by Endeavour. As highlighted in our operational and trading update on 17 January 2014, we had experienced difficulties in procuring tailings at a commercial rate from artisanal and small scale miners due to high material prices and an increase in transport costs. However we introduced measures to mitigate these factors by sourcing higher grade material closer to Endeavour's Nzema plant to reduce the transport costs, and by engaging with the Ghana Small Scale Mining Association to assist in our procurement programme and ensure that acceptable practices are adhered to. The Government has also acted to curtail unlawful trading activities that have been sustained during the period.
While challenges remain, procurement prices have substantially improved and tonnage production has increased, which should help to significantly enhance trading in the second half of the financial year ('H2 2014').
GRG's second profit centre is the carbon-in-leach section ('CIL') at Tema. After the initial decision to close the CIL section in FY 2013, due to margin pressures sustained from procurement of sustainable by-products, GRG has begun to re-treat the tailings dam on site through the CIL circuit and is currently running at a profit.
Goldplat's third profit centre at GRG is its incinerator section, which recovers high-grade gold from fine carbon and rubber mill liners from blue-chip mining clients. It is our intention to significantly grow this profit centre. During the first half of FY 2014 ('H1 2014), several new clients were successfully contracted to procure fine-carbon and rubber mill liner by-products, and existing contracts were renewed on more favourable terms. As a result we have managed to increase our fine carbon business at GRG, which we expect to maximise production and profitability with the commissioning of an additional incinerator plant in H2 2014.
We also remain confident that we can expand the benefits gained from GRG's tax free status by acquiring material from the rest of Africa and even outside Africa, and this process has already commenced.
Burkina Faso: Midas Gold SARL ('Midas')
The Company intends to extend its gold reprocessing operations into Burkina Faso under the name of Midas. The Environmental Study for the site in Dano was completed at the end of August 2013, and the operating licence, expected to be in place by the end of 2013, has not yet been granted by the Government.
Mining and Exploration
A strategic review was undertaken during 2013, which analysed Goldplat's main value drivers, growth potential and centres of profitability. As a result of this we have de-prioritised our exploration and development assets, in order to stem losses and focus in the near-term on our growing, cash generative, niche gold recovery business.
In regards to our two greenfield gold exploration projects, which include the 29 sq km Anumso Gold Exploration licence located in the Amansie East and Asante Akim South Districts of the Ashanti Region in Ghana, and the 246 sq km Nyieme project in the prospective Birimian Greenstone Belt in southern Burkina Faso, we are continuing to evaluate opportunities to realise value or monetise these projects either through joint ventures or trade sales. We will update the market on these developments in due course.
Kilimapesa Gold - Kenya
Goldplat's wholly owned Kilimapesa gold mine is located in the historically productive Migori Archaean Greenstone Belt in western Kenya. Kilimapesa has a mineral resource of 8,715,291 tonnes at 2.40 g/t Au for 671,446 oz Au at a cut-off of 1 g/t.
The Kilimapesa mine is still operating at reduced levels to defray costs. Kilimapesa continues to suffer losses, but, despite the lower gold price, the losses are at a much reduced rate.
The Board is currently evaluating its options for the future of Kilimapesa. New Kenyan legislation, which is expected to be published soon, will clarify rules for local participation. A recovery plan, which takes into account the expected local participation rules, has been submitted to the Government. The Company is talking to potential joint venture partners to carry the capital costs for expansion. The Government has been supportive and has been willing to assist in this process.
Board Changes
The half year to 31 December 2013 saw substantial changes to the constitution of the board of directors. On 16 September 2013 it was announced that Russell Lamming had stepped down from his position as CEO and that Ian Visagie take over with immediate effect.
In December 2013 the management in Johannesburg was strengthened by the appointment of Hansie van Vreden as an Executive Director. Hansie is a metallurgist who has already brought a new enthusiasm to the reprocessing business.
Also in September Nigel Wyatt joined the board as a non-executive director. Nigel is a mining engineer who has a wealth of experience in African mining. Finally, on 31 December Bob Pitts Smith reached his planned retirement date and stepped down from the Board, and Hansie van Vreden was appointed Chief Operating Officer.
Share Options
On 1 July 2013 there were 21,200,000 share options outstanding. Of those, 4,500,000 were held by Russell Lamming, part of a grant of 13,500,000 exercisable at 12.825p per share. The arrangements under which Mr Lamming stepped down as a director provided for him to retain the 4,500,000 options which had already vested, but cancelled the balance of 9,000,000 options.
The other 16,700,000 were exercisable up to 31 December 2013. Of those options 3,000,000 were held by key personnel at subsidiary level and, at the request of the holders, the date for exercise was extended to expire on 30 August 2018. The 13,700,000 options held by directors and former directors lapsed
Outlook
Our recovery operations in both South Africa and Ghana are currently trading profitably and at a rate which should more than eliminate the first half trading loss. We also expect to be in a position to continue paying dividends.
Brian Moritz
Chairman
10 March 2014
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHES ENDED 31 DECEMBER 2013
| Notes | 6 months 31-Dec-13 (unaudited) £'000 | 6 months 31-Dec-12 (unaudited) £'000 | 12 months 30-Jun-13 (audited) £'000 | ||||||||||||||||||
| Continuing operations | |||||||||||||||||||||
| Revenue | 9,645 | 15,481 | 28,904 | ||||||||||||||||||
| Cost of sales | (9,394) | (12,516) | (24,338) | ||||||||||||||||||
| Gross profit | 251 | 2,965 | 4,566 | ||||||||||||||||||
| Administrative expenses | (945) | (908) | (1,927) | ||||||||||||||||||
| Results from operating activities | (694) | 2,057 | 2,639 | ||||||||||||||||||
| Share based payments | - | (155) | - | ||||||||||||||||||
| Finance income | 217 | 61 | 300 | ||||||||||||||||||
| Finance costs | (435) | (404) | (359) | ||||||||||||||||||
| Net finance cost | (218) | (343) | (59) | ||||||||||||||||||
| Impairment of assets | - | (2,373) | (2,373) | ||||||||||||||||||
| (Loss)/Profit before tax | (912) | (814) | 207 | ||||||||||||||||||
| Taxation | 6 | - | (419) | (606) | |||||||||||||||||
| (Loss) for the period | (912) | (1,233) | (399) | ||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||
| Exchange translation | (2,040) | (394) | (792) | ||||||||||||||||||
| Other comprehensive (loss) for the period, net of tax | (2,040) | (394) | (792) | ||||||||||||||||||
| Total comprehensive (loss) for the period | (2,952) | (1,627) | (1,191) | ||||||||||||||||||
| (Loss)/Profit attributable to: | |||||||||||||||||||||
| Owners of the Company | (889) | (1,460) | (795) | ||||||||||||||||||
| Non-controlling interests | (23) | 227 | 396 | ||||||||||||||||||
| (Loss)/Profit for the period | (912) | (1,233) | (399) | ||||||||||||||||||
| Total comprehensive (loss) attributable to: | |||||||||||||||||||||
| Owners of the Company | (2,929) | (1,854) | (1,587) | ||||||||||||||||||
| Non-controlling interests | (23) | 227 | 396 | ||||||||||||||||||
| Total comprehensive (loss) for the period | (2,952) | (1,627) | (1,191) | ||||||||||||||||||
| Earnings per share - continuing operations | |||||||||||||||||||||
| Basic earnings per share (pence) | (0.54) | (0.73) | (0.24) | ||||||||||||||||||
| Diluted earnings per share (pence) | (0.54) | (0.73) | (0.21) | ||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2013
| Notes | 31-Dec-13 (unaudited) £'000 | 31-Dec-12 (unaudited) £'000 | 30-Jun-13 (audited) £'000 | |||||||||
| Assets | ||||||||||||
| Property, plant and equipment | 7 | 4,602 | 4,482 | 4,917 | ||||||||
| Intangible assets | 8 | 7,726 | 8,639 | 8,738 | ||||||||
| Pre-production expenditure | 9 | 2,266 | 1,407 | 1,613 | ||||||||
| Proceeds from sale of shares in subsidiary | 1,511 | 76 | 1,960 | |||||||||
| Non-current assets | 16,105 | 14,604 | 17,228 | |||||||||
| Inventories | 4,417 | 3,306 | 4,437 | |||||||||
| Trade and other receivables | 4,297 | 7,131 | 4,759 | |||||||||
| Taxation | 150 | - | 297 | |||||||||
| Cash and cash equivalents | 10 | 634 | 1,951 | 2,362 | ||||||||
| Current assets | 9,498 | 12,388 | 11,855 | |||||||||
| Total assets | 25,603 | 26,992 | 29,083 | |||||||||
| Equity | ||||||||||||
| Share capital | 11 | 1,684 | 1,684 | 1,684 | ||||||||
| Share premium | 11,494 | 11,494 | 11,494 | |||||||||
| Exchange reserve | (4,274) | (1,836) | (2,234) | |||||||||
| Retained earnings | 10,553 | 9,720 | 11,711 | |||||||||
| Equity attributable to owners of the Company | 19,457 | 21,062 | 22,655 | |||||||||
| Non-controlling interests | 1,445 | 837 | 1,525 | |||||||||
| Total equity | 20,902 | 21,899 | 24,180 | |||||||||
| Liabilities | ||||||||||||
| Obligations under finance leases | 12 | 197 | 16 | 140 | ||||||||
| Provisions | 13 | 134 | 172 | 134 | ||||||||
| Deferred tax liabilities | 397 | 460 | 459 | |||||||||
| Non-current liabilities | 728 | 648 | 733 | |||||||||
| Taxation | - | 34 | - | |||||||||
| Obligations under finance leases | 12 | 204 | 107 | 151 | ||||||||
| Trade and other payables | 3,769 | 4,304 | 4,019 | |||||||||
| Current liabilities | 3,973 | 4,445 | 4,170 | |||||||||
| Total liabilities | 4,701 | 5,093 | 4,903 | |||||||||
| Total equity and liabilities | 25,603 | 26,992 | 29,083 | |||||||||
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2012
| Attributable to owners of the Company | ||||||||||||||||||||
| Share capital £'000 | Share premium £'000 | Exchange reserve £'000 | Retained earnings £'000 | Total £ '000 | Non-controlling interests £'000 | Total equity £'000 | ||||||||||||||
| Balance at 1 July 2012, as previously reported | 1,679 | 11,449 | (1,442) | 12,035 | 23,721 | 742 | 24,463 | |||||||||||||
| Total comprehensive income for the period | ||||||||||||||||||||
| Loss for the period | - | - | - | (1,460) | (1,460) | 227 | (1,233) | |||||||||||||
| Total other comprehensive income | - | - | (394) | - | (394) | - | (394) | |||||||||||||
| Total comprehensive income for the period | - | - | (394) | (1,460) | (1,854) | 227 | (1,627) | |||||||||||||
| Transactions with owners of the Company, recognised directly in equity | ||||||||||||||||||||
| Dividends to owners of the Company | - | - | - | (1,010) | (1,010) | - | (1,010) | |||||||||||||
| Share based payments transactions | - | - | - | 155 | 155 | - | 155 | |||||||||||||
| Contributions by and distributions to owners of the Company | ||||||||||||||||||||
| Issue of ordinary shares | 5 | 45 | - | - | 50 | - | 50 | |||||||||||||
| Total contributions by and distributions to owners of the Company | 5 | 45 | - | - | 50 | - | 50 | |||||||||||||
| Changes in ownership interests in subsidiaries | ||||||||||||||||||||
| Non-controlling interests in subsidiary dividend | - | - | - | - | - | (132) | (132) | |||||||||||||
| Total changes in ownership interests in subsidiaries | - | - | - | - | - | (132) | (132) | |||||||||||||
| Total transactions with owners of the Company | 5 | 45 | - | - | 50 | (132) | (82) | |||||||||||||
| Balance at 31 December 2012 (unaudited) | 1,684 | 11,494 | (1,836) | 9,720 | 21,062 | 837 | 21,899 | |||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2013
| Attributable to owners of the Company | ||||||||||||||||||||
| Share capital £'000 | Share premium £'000 | Exchange reserve £'000 | Retained earnings £'000 | Total £ '000 | Non-controlling interests £'000 | Total equity £'000 | ||||||||||||||
| Balance at 1 January 2013 | 1,684 | 11,494 | (1,836) | 9,720 | 21,062 | 837 | 21,899 | |||||||||||||
| Total comprehensive income for the year | ||||||||||||||||||||
| Loss for the period | - | - | - | 665 | 665 | 169 | 834 | |||||||||||||
| Total other comprehensive income | - | - | (398) | - | (398) | - | (398) | |||||||||||||
| Total comprehensive income for the year | - | - | (398) | 665 | 267 | 169 | 436 | |||||||||||||
| Transactions with owners of the Company recognised directly in equity | ||||||||||||||||||||
| Contributions by and distributions to owners of the Company | ||||||||||||||||||||
| Issue of ordinary shares | - | - | - | - | - | - | - | |||||||||||||
| Investment by minorities | - | - | - | - | - | 627 | 627 | |||||||||||||
| Dividends | - | - | - | - | - | - | - | |||||||||||||
| Own shares acquired | - | - | - | (68) | (68) | - | (68) | |||||||||||||
| Share based payment transactions | - | - | - | (14) | (14) | - | (14) | |||||||||||||
| Total contributions by and distributions to owners of the Company | - | - | - | (82) | (82) | 627 | 545 | |||||||||||||
| Changes in ownership interests in subsidiaries | ||||||||||||||||||||
| Disposal of interest in subsidiary with no change in control | - | - | - | 1,408 | 1,408 | - | 1,408 | |||||||||||||
| Non-controlling interests in subsidiary dividend | - | - | - | - | - | (108) | (108) | |||||||||||||
| Total transactions with owners of the Company | - | - | - | 1,326 | 1,326 | 519 | 1,845 | |||||||||||||
| Balance at 30 June 2013 (audited) | 1,684 | 11,494 | (2,234) | 11,711 | 22,655 | 1,525 | 24,180 | |||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2013
| Attributable to owners of the Company | ||||||||||||||||||||
| Share capital £'000 | Share premium £'000 | Exchange reserve £'000 | Retained earnings £'000 | Total £ '000 | Non-controlling interests £'000 | Total equity £'000 | ||||||||||||||
| Balance at 1 July 2013 | 1,684 | 11,494 | (2,234) | 11,711 | 22,655 | 1,525 | 24,180 | |||||||||||||
| Total comprehensive income for the year | ||||||||||||||||||||
| Loss | - | - | - | (889) | (889) | (23) | (912) | |||||||||||||
| Total other comprehensive income | - | - | (2,040) | - | (2,040) | - | (2,040) | |||||||||||||
| Total comprehensive income for the year | - | - | (2,040) | (889) | (2,929) | (23) | (2,952) | |||||||||||||
| Transactions with owners of the Company recognised directly in equity | ||||||||||||||||||||
| Contributions by and distributions to owners of the Company | ||||||||||||||||||||
| Dividends | - | - | - | (201) | (201) | - | (201) | |||||||||||||
| Share based payment transactions | - | - | - | 14 | 14 | - | 14 | |||||||||||||
| Total contributions by and distributions to owners of the Company | - | - | - | (187) | (187) | - | (187) | |||||||||||||
| Changes in ownership interests in subsidiaries | ||||||||||||||||||||
| Disposal of interest in subsidiary with no change in control | - | - | - | (82) | (82) | - | (82) | |||||||||||||
| Non-controlling interests in subsidiary dividend | - | - | - | - | - | (57) | (57) | |||||||||||||
| Total transactions with owners of the Company | - | - | - | (269) | (269) | (57) | (326) | |||||||||||||
| Balance at 31 December 2013 (unaudited) | 1,684 | 11,494 | (4,274) | 10,553 | 19,457 | 1,445 | 20,902 | |||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2013
| Notes | 6 months 31-Dec-13 (unaudited) £'000 | 6 months 31-Dec-12 (unaudited) £'000 | 12 months 30-Jun-13 (audited) £'000 | |||||||||
| Cash flows from operating activities | ||||||||||||
| Results from operating activities | (694) | 2,057 | 2,639 | |||||||||
| Adjustments for: | ||||||||||||
| - Depreciation | 170 | 175 | 361 | |||||||||
| - Amortisation of intangible assets | 14 | (48) | 43 | |||||||||
| - Loss on sale of property, plant and equipment | - | - | 29 | |||||||||
| - Equity-settled share-based payment transactions | 14 | - | 141 | |||||||||
| - | 190 | - | |||||||||
| - Foreign exchange differences | (459) | (216) | (253) | |||||||||
| (955) | 2,158 | 2,960 | ||||||||||
| Changes in: | ||||||||||||
| - inventories | 20 | 1,218 | 87 | |||||||||
| - trade and other receivables | 462 | (1,268) | 1,104 | |||||||||
| - trade and other payables | (250) | (1,889) | (2,170) | |||||||||
| - provisions | - | (9) | (47) | |||||||||
| Cash generated from operating activities | (723) | 210 | 1,934 | |||||||||
| Interest received | 217 | 61 | 300 | |||||||||
| Interest paid | (435) | (390) | (349) | |||||||||
| Taxes paid | - | (359) | (878) | |||||||||
| Net cash from operating activities | (941) | (478) | 1,007 | |||||||||
| Cash flows from investing activities | ||||||||||||
| Proceeds from sale of property, plant and equipment | 13 | 12 | 83 | |||||||||
| Acquisition of mining rights | - | (366) | (247) | |||||||||
| Acquisition of property, plant and equipment | (318) | (673) | (1,329) | |||||||||
| Pre-production expenditure | (173) | (65) | (583) | |||||||||
| Net cash used in investing activities | (478) | (1,092) | (2,076) | |||||||||
| Cash flows from financing activities | ||||||||||||
| Proceeds from issue of share capital | - | 50 | 50 | |||||||||
| Own shares purchased | - | - | (68) | |||||||||
| Dividends paid | (201) | (1,010) | (1,010) | |||||||||
| Payment of finance lease liabilities | 12 | (108) | (92) | (114) | ||||||||
| Net cash flows (used in) financing activities | (309) | (1,052) | (1,142) | |||||||||
| Net (decrease) in cash and cash equivalents | (1,728) | (2,622) | (2,211) | |||||||||
| Cash and cash equivalents at beginning of period | 2,362 | 4,573 | 4,573 | |||||||||
| Cash and cash equivalents at end of period | 10 | 634 | 1,951 | 2,362 | ||||||||
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2013
1. General information
The information for the year ended 30 June 2013 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
2. Basis of preparation
(a) Statement of compliance
The annual financial statements of Goldplat plc (the 'Company') are prepared in accordance with IFRSs as adopted by the European Union. The condensed financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.
(b) Going concern
The directors are satisfied that the Company has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt a going concern basis in preparing the consolidated financial statements.
3. Significant accounting policies
The accounting policies applied by the Group in this condensed consolidated interim financial report are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 June 2013.
4. Operating segments
Information about reportable segments
For the six months ended 31 December 2013 (unaudited)
| Recovery operations £'000 | Mining and exploration £'000 | Adminis-tration £'000 | ||||||||||
| External revenues | 9,374 | 271 | - | |||||||||
| Inter-segment revenues | 76 | - | - | |||||||||
| Total revenues | 9,450 | 271 | - | |||||||||
| Reportable segment profit/(loss) before tax | 270 | (323) | (859) | |||||||||
| Segment assets | 12,085 | 3,437 | 10,079 | |||||||||
For the six months ended 31 December 2012 (unaudited)
| Recovery operations £'000 | Mining and exploration £'000 | Adminis-tration £'000 | ||||||||||
| External revenues | 15,153 | 328 | - | |||||||||
| Inter-segment revenues | 6 | - | - | |||||||||
| Total revenues | 15,159 | 328 | - | |||||||||
| Reportable segment profit/(loss) before tax | 2,826 | (415) | (852) | |||||||||
| Segment assets | 14,578 | 6,360 | 6,054 | |||||||||
For the twelve months ended 30 June 2013 (audited)
| Recovery operations £'000 | Mining and exploration £'000 | Adminis-tration £'000 | ||||||||||
| External revenues | 28,105 | 799 | - | |||||||||
| Inter-segment revenues | 462 | - | - | |||||||||
| Total revenues | 28,567 | 799 | - | |||||||||
| Reportable segment profit/(loss) before tax | 4,716 | (3,493) | (1,016) | |||||||||
| Segment assets | 14,179 | 6,906 | 7,998 | |||||||||
Reconciliation of reportable segment profit or loss
| 6 months 31-Dec-13 (unaudited) £'000 | 6 months 31-Dec-12 (unaudited) £'000 | 12 months 30-Jun-13 (audited) £'000 | ||||||||||
| Total profit/(loss) for reportable segments before tax | (912) | (814) | 207 | |||||||||
| Elimination of inter-segment profits | - | - | - | |||||||||
| Profit before tax | (912) | (814) | 207 | |||||||||
5. Seasonality of operations
The Group is not considered to be subject to seasonal fluctuations.
6. Income tax expense
Income tax expense is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period. The Group's consolidated effective tax rate in respect of continuing operations for the six months ended 31 December 2013 was 23% (six months ended 31 December 2012: 24%; twelve months ended 30 June 2013: 23.75%).
7. Property, plant and equipment
Acquisitions and disposals
During the six months ended 31 December 2013, the Group acquired assets with a cost, excluding capitalised borrowing costs of £536,000 (six months ended 31 December 2012: £740,000; twelve months ended 30 June 2013: £1,586,000).
Assets with a carrying amount of £13,000 were disposed of during the six months ended 31 December 2013 (six months ended 31 December 2012: £12,000; twelve months ended 30 June 2013: £112,000), resulting in a loss on disposal of £nil (six months ended 31 December 2012: £nil; twelve months ended 30 June 2013: £29,000), which is included in 'administrative expenses' in the condensed consolidated statement of comprehensive income.
8. Intangible assets and goodwill
| 6 months 31 Dec 13 (unaudited) £'000 | 6 months 31 Dec 12 (unaudited) £'000 | 12 months 30 Jun 13 (audited) £'000 | ||||||||||
| Cost | ||||||||||||
| Balance at beginning of period | 9,008 | 8,943 | 8,943 | |||||||||
| Additions | - | 366 | 247 | |||||||||
| Disposals | - | (202) | - | |||||||||
| Transfers from property , plant and equipment | - | - | 3 | |||||||||
| Transfers to pre-production expenditure | - | (360) | 5 | |||||||||
| Part disposal of subsidiary company | - | - | (149) | |||||||||
| Foreign exchange translation | (197) | (57) | (41) | |||||||||
| Balance at end of period | 8,811 | 8,690 | 9,008 | |||||||||
| Amortisation and impairment losses | ||||||
| Balance at beginning of period | 270 | 34 | 34 | |||
| Amortisation | 14 | 29 | 43 | |||
| Amortisation on disposals | - | (12) | (18) | |||
| Impairment for the year | - | - | 211 | |||
| Impairment transferred from pre-production expenditure | 806 | - | - | |||
| Foreign exchange translation | (5) | - | - | |||
| Balance at end of period | 1,085 | 51 | 270 | |||
| Carrying amounts | ||||||
| Balance at end of period | 7,726 | 8,639 | 8,738 | |||
| Balance at beginning of period | 8,738 | 8,909 | 8,909 | |||
9. Pre-production expenditure
| 6 months 31-Dec-13 (unaudited) £'000 | 6 months 31-Dec-12 (unaudited) £'000 | 12 months 30-Jun-13 (audited) £'000 | ||||||||||
| Cost | ||||||||||||
| Balance at beginning of period | 3,930 | 3,282 | 3,282 | |||||||||
| Expenditure incurred | 173 | 65 | 583 | |||||||||
| Transfers from intangible assets | - | 360 | (5) | |||||||||
| Effect of movements in exchange rates | (326) | 73 | 70 | |||||||||
| 3,777 | 3,780 | 3,930 | ||||||||||
| Amortisation and impairment losses | |||||||
| Balance at beginning of period | 2,317 | 77 | 77 | ||||
| Amortisation reversed | - | (77) | (77) | ||||
| Impairment | - | 2,373 | 2,257 | ||||
| Impairment transferred to exploration and development | (806) | - | - | ||||
| Effect of movement in exchange rates | - | - | 60 | ||||
| 1,511 | 2,373 | 2,317 | |||||
| Carrying amounts | |||||||
| Balance at end of period | 2,266 | 1,407 | 1,613 | ||||
| Balance at beginning of period | 1,613 | 3,205 | 3,205 | ||||
10. Cash and cash equivalents
| 6 months 31-Dec-13 (unaudited) £'000 | 6 months 31-Dec-12 (unaudited) £'000 | 12 months 30-Jun-12 (audited) £'000 | ||||||||||
| Bank balances | 598 | 1,908 | 2,322 | |||||||||
| Short term bank deposits | 36 | 43 | 40 | |||||||||
| 634 | 1,951 | 2,362 | ||||||||||
| Bank overdrafts used for cash management purposes | - | - | - | |||||||||
| Cash and cash equivalents in the statement of cash flows | 634 | 1,951 | 2,362 | |||||||||
11. Capital and reserves
| Issue of ordinary shares | Number of ordinary shares | |||||||||||
| 6 months 31-Dec-13 (unaudited) | 6 months 31-Dec-12 (unaudited) | 12 months 30-Jun-13 (audited) | ||||||||||
| On issue at beginning of period | 168,370,000 | 167,870,000 | 167,870,000 | |||||||||
| Issued for cash | - | 500,000 | 500,000 | |||||||||
| On issue at end of period | 168,370,000 | 168,370,000 | 168,370,000 | |||||||||
| Authorised - par value £0.01 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||||||||
| Issue of ordinary shares | Ordinary share capital | |||||||||||
| 6 months 31-Dec-13 (unaudited) | 6 months 31-Dec-12 (unaudited) | 12 months 30-Jun-13 (audited) £'000 | ||||||||||
| On issue at beginning of period | 1,684 | 1,679 | 1,679 | |||||||||
| Issued for cash | - | 5 | 5 | |||||||||
| On issue at end of period | 1,684 | 1,684 | 1,684 | |||||||||
Dividends
The following dividends were declared and paid by the Company:
| 6 months 31-Dec-13 (unaudited) £'000 | 6 months 31-Dec-12 (unaudited) £'000 | 12 months 30-Jun-13 (audited) £'000 | ||||||||||
| 0.12 pence per qualifying ordinary share (six months ended 31 December 2012: 0.60 pence; twelve months ended 30 June 2013: 0.60 pence) | 201 | 1,010 | 1,010 | |||||||||
12. Loans and borrowings
Six months ended 31 December 2013 (unaudited)
| Currency | Interest rate nominal | Face value £'000 | Carrying amount £'000 | Year of maturity | ||||||||||||
| Balance at 1 July 2013 | 291 | |||||||||||||||
| New issues | 218 | |||||||||||||||
| Repayments | ||||||||||||||||
| Finance lease liabilities | ZAR | 9% | (108) | (108) | - | |||||||||||
| Balance at 31 December 2013 | 401 | |||||||||||||||
Six months ended 31 December 2012 (unaudited)
| Currency | Interest rate nominal | Face value £'000 | Carrying amount £'000 | Year of maturity | ||||||||||||
| Balance at 1 July 2012 | 150 | |||||||||||||||
| New issues | - | |||||||||||||||
| Repayments | ||||||||||||||||
| Unsecured bank facility | ZAR | 9% | (2) | (2) | - | |||||||||||
| Finance lease liabilities | ZAR | 9% | (25) | (25) | - | |||||||||||
| Balance at 31 December 2012 | 123 | |||||||||||||||
| Currency | Interest rate nominal | Face value £'000 | Carrying amount £'000 | Year of maturity | ||||||||||||
| Balance at 1 July 2012 | 150 | |||||||||||||||
| New issues | 257 | |||||||||||||||
| Repayments | ||||||||||||||||
| Unsecured bank facility | ZAR | 9% | (2) | (2) | ||||||||||||
| Finance lease liabilities | ZAR | 9% | (114) | (114) | ||||||||||||
| Balance at 30 June 2013 | 291 | |||||||||||||||
Provisions
| 6 months 31 Dec 13 (unaudited) £'000 | 6 months 31 Dec 12 (unaudited) £'000 | 12 months 30 Jun 13 (audited) £'000 | ||||||||||
| Environmental obligation | ||||||||||||
| Balance at beginning of period | 134 | 181 | 181 | |||||||||
| Provisions made during the period | - | (5) | (32) | |||||||||
| Unwind of discount | - | 6 | 10 | |||||||||
| Foreign exchange translation | - | (10) | (25) | |||||||||
| 134 | 172 | 134 | ||||||||||
The provision relates to a requirement to rehabilitate the land owned in South Africa upon cessation of the mining lease.
Share options and warrants
As at 31 December 2013, the Group had the following share options and warrants in issue.
Share options (equity-settled)
Reconciliation of outstanding share options
| 6 months ended 31-Dec-13 (unaudited) | 6 months ended 31-Dec-12 (unaudited) | ||||||||||
| Number of options | Exercise price | Number of options | Exercise price | ||||||||
| Outstanding and exercisable at beginning of period | 21,200,000 | 10.00p | 17,200,000 | 10.00p | |||||||
| Exercised in period | - | 10.00p | (500,000) | 10.00p | |||||||
| Option grant to R Lamming 1 September 2012 | - | 12.825p | 13,500,000 | 12.825p | |||||||
| Lapsed in period | (13,700,000) | ||||||||||
| Outstanding and exercisable at end of period | 7,500,000 | 30,200,000 | |||||||||
| 12 months ended 30-Jun-13 (audited) | |||||||||||
| Number of options | Exercise price | ||||||||||
| Outstanding and exercisable at beginning of period | 17,200,000 | 10.00p | |||||||||
| Granted during the year | 13,500,000 | 12.825p | |||||||||
| Lapsed - will not vest | (9,000,000) | 12.825p | |||||||||
| Exercised during the year | (500,000) | 10.00p | |||||||||
| Outstanding and exercisable at end of period | 21,200,000 | ||||||||||
The weighted average remaining contractual life of the options outstanding as at 31 December 2013 is 4 years 244 days (31 December 2012: 1 year 55 days; 30 June 2013: 1 year 181 days).
Reconciliation of outstanding share warrants
| 6 months ended 31-Dec-13 (unaudited) | 6 months ended 31-Dec-12 (unaudited) | ||||||||||
| Number of warrants | Exercise price | Number of warrants | Exercise price | ||||||||
| Outstanding and exercisable at beginning of period | 1,671,200 | 10.00p | - | ||||||||
| Granted in period | 1,671,200 | 10.00p | |||||||||
| Lapsed in period | (1,671,200) | ||||||||||
| Outstanding and exercisable at end of period | - | 1,671,200 | |||||||||
| 12 months ended 30-Jun-13 (audited) | |||||||||||
| Number of warrants | Exercise price | ||||||||||
| Outstanding and exercisable at beginning of period | 1,671,200 | 10.00p | |||||||||
| Outstanding and exercisable at end of period | 1,671,200 | ||||||||||
The weighted average remaining contractual life of the warrants outstanding as at 31 December 2013 is 0 days (31 December 2012: 1 years 0 days; 30 June 2013: 184 days).
Fair values
The fair values of financial instruments such as interest-bearing loans and borrowings, finance lease liabilities, trade and other receivables/payables are substantially identical to carrying amounts reflected in the statement of financial position.
Subsequent events
On 7 January 2014 the Company issued 71,000 ordinary shares of 1p each at 7.04p per share as part of its arrangement with its joint broker VSA Capital Limited.
For further information visit www.goldplat.com or contact:
| Ian Visagie, CEO | Goldplat plc | Tel: +27 (82) 671 2078 |
| Ewan Leggat/Katy Birkin | SP Angel Corporate Finance LLP | Tel: +44 (0) 20 3463 2260 |
| Andrew Raca/Justin McKeegan | VSA Capital | Tel: + 44 (0)20 3005 5000 |
| Felicity Edwards/ Charlotte Heap | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
Notes:
Goldplat plc, is an AIM-listed cash generative, debt free gold recovery services company with two market leading operations in South Africa and Ghana. The Company's strategy is focussed on utilising its robust cash flow generated from flagship gold recovery operations in Africa to self-fund sustainable growth and expansion of niche gold recovery business model. The Company also has a small gold mining and exploration portfolio in Kenya, Burkina Faso and Ghana and is evaluating various opportunities to create value or monetise these assets.
**ENDS**
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Goldplat plc via Globenewswire
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