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Scotgold Resources (SGZ)

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Friday 17 March, 2017

Scotgold Resources

INTERIM FINANCIAL REPORT 31 DECEMBER 2016

RNS Number : 7536Z
Scotgold Resources Ltd
17 March 2017
 



 

SCOTGOLD RESOURCES LIMITED

 

INTERIM FINANCIAL REPORT 31 DECEMBER 2016

 

 

 

DIRECTORS' REPORT

 

Your Directors submit the financial report of Scotgold Resources Limited and Controlled Entities (the "Company" or the "Group") for the half-year ended 31 December 2016. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

 

DIRECTORS

 

The following persons were Directors of Scotgold Resources Limited during the half-year and up to the date of this report unless otherwise stated:

 

 

Nathaniel le Roux                                         Non-Executive Chairman

Richard Gray                                                 Managing Director

Gabriel Chiappini                                         Non-Executive Director and Company Secretary

Chris Sangster                                              Non-Executive Director

Phillip Jackson                                             Non-Executive Director

 

 

 

REVIEW OF OPERATIONS

 

Cononish Gold and Silver Project

 

 

First Production of Gold

 

The Board is delighted to advise that the first production of gold from the Cononish project has  been achieved during this half-year period from the Bulk Processing Trial. The first gold produced was minted into 9,999 parts per 10,000 pure gold "rounds". Twelve of these rounds were produced, with ten being sold by way of sealed bids auction.  The eleventh produced round was purchased and donated to the Hunterian museum in Glasgow by Mr & Mrs Graham Donaldson, major shareholders in the Company. The twelfth round has been reserved for corporate purposes.

 

The revenue received from these "round" sales totaled $80,814 and has been offset against the production costs associated with the Bulk Processing Trial as detailed in Note 2, Deferred Exploration and Evaluation Expenditure.

 

There have been no other sales of gold in the period and any further gold produced from the Bulk Processing Trial remains in inventory at the period end.


 

 

 

 

Bulk Processing Trial ("BPT")

 

 

During the period to 31 December 2016, the Company continued operating the Bulk Processing  Trial ("BPT") at the Cononish Gold and Silver Mine. The experience gained has in part been used to conduct the update of the Bankable Feasibility Study dated August 2015 and which has been completed in the period following the end of the half-year to 31 December 2016. The trial plant with its basic design has performed to specification however metallurgical recoveries on the coarse grind achieved have been lower than management's initial expectation. Analysis of the BPT tailings indicates that under the full-scale plant and processing facility, the ore and gold production will perform in accordance with the Bankable Feasibility Study. Opportunities demonstrated by the BPT to simplify the full scale circuit and revise the tailings storage system have now been incorporated

in the phased approach of the development of the mine as announced on 14 March 2017.

 

The grade of stockpiled material treated to date has been below the average estimated for the stockpile, and this combined with the lower metallurgical recovery has reduced the operating profit expected.

 

Subsequent to the period ended 31 December 2016, the application made to the Loch Lomond and the Trossachs National Park Planning Authority ("LLTNPPA") to extend BPT operations to the end of March 2018, as announced on 13 December 2016, was granted on 7th February 2017.

 

 

Grampian Project

 

While resources have been focused on the BPT, the Company has conducted limited field work during the 2016 season, and progress has been principally restricted to data analysis.  It is anticipated an appropriate field program will be undertaken in 2017 dependent upon the Company's funding position and licence commitments.

 

 

Portugal

 

The Company continues to develop its understanding of its Pomar licence in Portugal. The Pomar licence was granted to the Company in May 2016 and in addition to Pomar includes the abandoned mines of das Gatas, and Casalinho.

 

The licence area shows potential for a separate gold mineralizing event and therefore new gold discoveries outside known antimony related occurrences. Significant historic data is available for review and unassayed soil samples from previous operators will quickly provide a large new database. An initial stratigraphic and structural mapping program has been completed and historic soil samples collected by the previous operator have been sent for assay and results and interpretations are awaited.


 

 

 

 

France

 

The Company awaits the outcome of its three applications for exploration licences.

 

 

CORPORATE

 

ASX De-listing

 

During the six months ended 31 December 2016, the Company completed its de-listing from the Australian Stock Exchange ("ASX"). In the Company's announcement on 21 October 2016 shareholders were advised that shares in the Company will remain tradable as Depository Interests (DI's) on AIM under the code SGZ.

 

Convertible Loan Notes

 

During the half-year to 31 December 2016 all of the outstanding Convertible Loan Notes ("Convertible Notes") were either converted into shares in the Company or paid out. The total number of shares issued as a result of the conversion of these Convertible Notes was 92,766,667 fully paid ordinary shares.

 

Shares Issued

 

In addition to the conversion of conversion of its Convertible Notes into shares, an amount of

$881,400 (£500,750) was raised through the issue of 62,576,500 new shares in the Company, including the exercise of 76,500 share options, during the half-year.

 

Related Party Transaction

 

 

To facilitate the settlement of Convertible Notes of £300,000 ($508,200) which were settled in cash, the Company was granted a loan, on commercial terms, from its largest shareholder and director, Nat le Roux. This is a related party transaction and the terms of the loan were reviewed and sanctioned by the unaffected directors. The terms of the loan are fully disclosed in the notes to the financial statements.

 

Tenement details

 

The Company holds a Lease (100%) from the Crown Estate Commissioners over Cononish Farm, county of Perth, Scotland UK.

 

The Company holds a Lease (100%) from the landowner over Cononish Farm, county of Perth, Scotland UK.


 

The  Company  holds  five  Mines  Royal  Option  Agreements  (100%)  with  the  Crown  Estate Commissioners as detailed below:

 

•      Glen Orchy: Location - counties of Perth and Argyll, Scotland UK

•      Glen Lyon: Location - counties of Perth and Argyll, Scotland UK

•      lnverliever: Location - counties of Dunbarton, Argyll and Perth, Scotland UK

•      Knapdale: Location - county of Argyll, Scotland UK

•      Ochils: Location - county of Clackmannan, Perth, Kinross and Stirling, Scotland UK

 

The Company's 100% owned subsidiary, Scotgold Resources Portugal Ltda, holds the following exploration licence:

 

•      Pomar: Location - 5 Km north east of Sarzedas, Portugal

 

 

No tenements were acquired or disposed during the current half-year period. No other beneficial interests are held in any farm-in or farm-out agreements.

No other beneficial interests in farm-in or farm out agreements were acquired or disposed during the six month period.

 

 

AUDITOR'S INDEPENDENCE DECLARATION

 

Section 307C of the Corporations Act 2001 requires our Auditors, HLB Mann Judd, to provide the directors of the company with an Independence Declaration in relation to the review of the interim financial report. This Independence Declaration is set out on the next page and forms part of this directors' report for the half-year ended 31 December 2016.

 

This report is signed in accordance with a resolution of the Board of Directors made pursuant to section 306(3) of the Corporations Act 2001.

 

 

 

 

 

Dated 16 March 2017

 


 

 

 

HLB Mann Judd

 

 

AUDITOR'S INDEPENDENCE DECLARATION

 

 

 

As lead auditor for the review of the consolidated financial report of Scotgold Resources Limited for the half-year ended 31 December 2016, I declare that to the best of my knowledge and belief, there have been no contraventions of:

 

(a)   the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

 

(b)   any applicable code of professional conduct in relation to the review.

 

 

 


Perth, Western Australia                                                                                                            M R W Ohm 
   
16 March 2017                                                                                                                               Partner




 

 

 

 

CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

 

Consolidated

 


Note

31 December

2016

$


31 December

2015

$

Revenue - interest received


222


782

Other income


71,744


-

Administration costs


(240,118)


(267,557)

Interest expense


(23,783)


-

Unwinding of convertible note discount


(32,191)


(105,427)

Depreciation and loss on disposal of fixed assets


(55,380)


(8,087)

Exploration expensed as incurred


(122,787)


(114,596)

Employee and consultant costs


(168,034)


(138,375)

Listing and share registry costs


(118,079)


(127,538)

Legal fees


(30,992)


(49,789)

Office and communication costs

Currency revaluation of interest bearing loan Other expenses


(46,186)

- (23,331)


(36,090)

- (28,369)

Loss before income tax


(788,515)


(875,046)

Income tax benefit


-


-

Net loss for the period


(788,515)


(875,046)

Other comprehensive income





Exchange gain/(loss) on translation of foreign subsidiaries


(25,471)


(42,644)

Total comprehensive loss for the period


(813,986)


(917,690)

 

Basic (loss) per share (cents per share)


 

(0.05)


 

(0.07)

 

 

 

 

 

 

 

 

The accompanying notes form part of these financial statements.

 


 

CONDENSED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016

 

                                                                                                                                  Consolidated

 

 

 

 

CURRENT ASSETS

Note

31 December

2016

$


30 June

2016

$

Cash and cash equivalents


329,400


738,866

Trade and other receivables


28,032


63,004

Inventory


224,799


26,993

Other current assets


              14,170       


              21,109         

Total Current Assets


            596,401       


            849,972          

NON-CURRENT ASSETS





Trade and other receivables


85,616


89,977

Property, plant and equipment


326,417


348,626

Deferred exploration and evaluation expenditure

2

      15,896,479        


      15,730,586           

Total Non-Current Assets


      16,308,512        


      16,169,189           

TOTAL ASSETS


      16,904,913        


      17,019,161           

CURRENT LIABILITIES





Trade and other payables


168,779


157,835

Other current liabilities


42,286


121,439

Interest bearing liabilities

3

                          -    


        1,124,409           

Total Current Liabilities


            211,065       


        1,403,683           

NON CURRENT LIABILITIES





Interest bearing liabilities

4

            508,216       


                          -       

Total Non-Current Liabilities


            508,216       


                          -       

TOTAL LIABILITIES


            719,281       


        1,403,683           

NET ASSETS


16,185,632


15,615,478

EQUITY





Issued capital

5

27,213,817


25,829,677

Reserves


70,289


344,515

Accumulated losses


    (11,098,474)       


    (10,558,714)          

TOTAL EQUITY


16,185,632


15,615,478


 

 

CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2016

 

                                                            Issued        Accumulated        Options         Foreign         Convertible        Total 
                                                           Capital             Losses                Reserve          Currency       Note Reserve      Equity  
                                                                                                                                     Translation
                                                                                                                                       Reserve 
                                                                $                         $                       $                      $                       $                       $

 

Half year to 31 December 2015

 

Balance at 1 July 2015

22,711,529

(10,077,922)

1,141,769

(34,519)

356,555

14,097,412

Issue of shares

1,613,247

-

-

-

-

1,613,247

Share issue expenses

(56,178)

-

-

-

-

(56,178)

Options Expiry

-

792,000

(792,000)

-

-

-

Total comprehensive

-

(875,046)

-

(42,644)

-

(917,690)

loss for the period







As at 31 December 2015

24,268,598

(10,160,968)

349,769

(77,163)

356,555

14,736,791

 

Half year to 31 December 2016

 

Balance at 1 July 2016

25,829,677

(10,558,714)

224,769

(129,009)

248,755

15,615,478

Issue of shares

880,000

-

-

-

-

880,000

Share issue expenses

(53,860)

-

-

-

-

(53,860)

Options exercised

1,400


-

-


1,400

Equity portion of notes

556,600

248,755

-

-

(248,755)

556,600

converted







Total comprehensive

-

(788,515)

-

(25,471)

-

(813,986)

loss for the period







As at 31 December 2016

27,213,817

(11,098,474)

224,769

(154,480)

-

16,185,632


 

CONDENSED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

                                                                                                                                                                         Consolidated

 

 


31 December

2016

$


31 December

2015

$

CASH FLOWS FROM OPERATING ACTIVITIES




Payments to suppliers

(669,538)


(793,864)

Interest income received

                          -    


                    316        

Net cash used in operating activities

          (669,538)      


          (793,548)         

CASH FLOWS FROM INVESTING ACTIVITIES




Payments for exploration and BPT activities

(455,342)


(668,165)

Payment for property, plant and equipment

             (33,174)      


                          -       

Net cash used in investing activities

          (488,516)      


          (668,165)         

CASH FLOWS FROM FINANCING ACTIVITIES




Proceeds from issue of shares and options

881,400


1,613,246

Share issue costs

(97,861)


(56,176)

Borrowing costs and interest

             (23,783)     


               (1,500)        

Net cash provided by financing activities

            759,756       


        1,555,570           

Net increase/(decrease) in cash held

(398,298)


93,857

Cash and cash equivalents at the beginning of the period

738,866


802,649

Effect of exchange rate fluctuations on cash held

             (11,168)      


             (34,860)        

Cash and cash equivalents at the end of the period

329,400


861,646


 

 

NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

 

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

 

Statement of compliance

 

These interim consolidated financial statements are general purpose financial statements prepared in accordance with the requirements of the Corporations Act 2001, applicable accounting standards including AASB 134 'Interim Financial Reporting', Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board ('AASB'). Compliance with AASB 134 ensures compliance with IAS 34 'Interim Financial Reporting'.

 

This condensed half-year report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Group as in the full financial report.

 

It is recommended that the financial report be read in conjunction with the annual financial report for the year ended 30 June 2016 and any public announcements made by Scotgold Resources Limited and its subsidiaries during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.

 

The accounting  policies adopted are consistent with those of the previous financial year  and corresponding interim reporting period.

 

Basis of preparation

 

The interim report has been prepared on a historical cost basis. Cost is based on the fair value of the consideration given in exchange for assets. The company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted.

 

For the purposes of preparing the interim report, the half-year has been treated as a discrete reporting period.

 

Reporting Basis and Conventions

 

The financial report has been prepared on the basis of accounting principles applicable to a going concern, which assumes the commercial realisation of the future potential of the Group's assets and the discharge of their liabilities in the normal course of business.

 

The financial report has also been prepared on an accruals basis and is based on historical cost.

 

Going Concern

 

As at 31 December 2016, the Group had a cash balance of $329,400, a total comprehensive loss for the six-month period of $813,986 and had a net cash outflow from operating and investing activities of $1,158,054. There is a working capital surplus of $385,336 at balance date.


 

 

The Directors believe the Company will obtain sufficient funding to enable it and the Group to continue as going concerns and that it is appropriate to adopt that basis of accounting in the preparation of the financial report. The directors believe that this funding will be derived from a combination of one or more of the following sources:

 

*               proceeds from the sale of gold produced as a result of the continuing Bulk Processing Trial;

*               the issue by private placement of new shares; and

*               the obtaining of additional loan funds.

 

However, the existence of the above conditions represents a material uncertainty which may cast significant doubt in relation to the Company's ability to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business.

 

Significant accounting judgements and key estimates

 

The preparation of interim financial reports requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense.  Actual results may differ from these estimates.

 

In preparing this interim report, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report for the year ended 30 June 2016.

 

Accounting policies and methods of computation

 

The accounting policies and methods of computation adopted are consistent with those of the previous financial year and corresponding interim reporting period. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

 

Adoption of new and revised standards

 

The Group has adopted all of the new and revised standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and effective for the current half year.

 

The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective. As a result of this review, the Directors have determined that there is no material impact on the Group and no change is necessary to the Group accounting policies.


 

 

 

NOTE 2 - DEFERRED EXPLORATION AND EVALUATION EXPENDITURE

 

                                                                                                 
                                                                                                           Consolidated

                                                                                                 Six months          Twelve months 
                                                                                                         to                          to


31 December                    30 June
    
2016                                 2016
         $                                     $

 

Balance at beginning of period                                                                            15,730,586                   14,794,913 
Net loss from the BPT                                                                                                   27,175                          90,801

Additional expenditure deferred during the period                                                138,718                        844,872          

Total deferred exploration and evaluation expenditure                                   15,896,479                   15,730,586

                                                                                                               

 

The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is dependent upon the successful development and commercial exploitation or sale of the respective areas.

 

The above amount includes $80,814 of revenue from Dore sales and $107,989 of production costs associated with the bulk processing trial being undertaken by the Company. The criteria to reclassify exploration to development has not been met with respect to the trial.

 

NOTE 3 - INTEREST BEARING LIABILITIES

 

Convertible Notes

 

The Company entered into convertible loan note agreements (Convertible Notes) on the terms and conditions set out in the Company's Notice of Meeting dated 23 June 2014 (and approved by Shareholders at the General Meeting on 30 July 2014). The Convertible Notes were fully settled in the half year to 31 December 2016.

 

During the period on 2 September 2016 $220,000 Convertible Notes were converted into 36,666,667 ordinary shares of the Company at the conversion price of $0.006 per share.

 

Further, on 23 September 2016 $ 336,600 Convertible Notes were converted into 56,100,000 ordinary shares of the Company at the conversion price of $0.006 per share.

 

The remaining Convertible Note of £300,000 ($600,000) was repaid on the repayment date of 30 September 2016 by a loan from a shareholder for £300,000 ($508,200), refer Note 4.


 

 

 

The balance outstanding at 31 December 2016 is made up as follows:

 


First draw

Second draw

Total

$

$

$

Principal sum drawn

1,000,000

600,000

1,600,000

Equity component from reserves

243,121

113,434

356,555

Unwinding of discount

(243,121)

(113,434)

(356,555)

Conversion

(1,000,000)

-

(1,000,000)

Foreign exchange

-

(91,800)

(91,800)

Conversion to loan (£300,000)

                              -      

              (508,200)       

              (508,200)       

-                                         -                                         -

                                                                                                                                                                                                                                                              

 

 

 

NOTE 4 - LOAN AND RELATED PARTY TRANSACTION

 

On 30 September 2016 The Company entered into an interest bearing loan agreement with a director and shareholder for an amount of £300,000 ($508,200). The funds were used to repay a Convertible Note of £300,000 ($508,200) which expired on 30 September 2016.

 

The terms of the loan are such that it is unsecured, it bears interest at 6% per annum and the loan cannot be called before 30 September, 2018. The loan can be repaid with accrued interest at any time at the election of the Company.

 


31 December


30 June

2016


2016

Interest bearing liabilities

 

Shareholder loan

$

 

508,216


$

 

-

 

 

NOTE 5 - ISSUED CAPITAL                                                                                                Consolidated

 

31 December                       30 June
      2016                                2016

Ordinary Shares                                                                                                          $                                      $

 

Issued and fully paid                                                                                             27,213,817                      25,829,677

                                                                                                                       


 

 

 

Movements in ordinary share capital of the Company were as follows:

                                                                                                                                             Number                              $

 

Opening balance at 1 July 2016

1,437,697,715


Options conversion 5 July 2016

76,500


1,400

Placement 4 August 2016

62,500,000


880,000

Convertible note conversion 2 September 2016

36,666,667


220,000

Convertible note conversion 23 September 2016

56,100,000


336,600

Transaction costs

                               -   


         (53,860)     

Closing balance at 31 December 2016

1,593,040,882


27,213,817

 

Movements in options in ordinary shares of the Company are as follows:

 


Number



$

Opening balance at 1 July 2016

156,713,618



224,769

Options exercised

(76,500)



-

Closing balance at 31 December 2016

156,637,118



224,769

 

Details of options are as follows:

 

Expiry

Price

Number



$

31/3/22

$0.0800

3,000,000



134,769

22/9/17

£0.0069

30,000,000



90,000

30/9/17

£0.0100

123,637,118



-



156,637,118



224,769

 

 

 

NOTE 6 - CONTINGENT LIABILITIES

 

The Company has entered into a donations agreement with the Strathfillan Community Development Trust ("SCDT") pursuant to which the Company will work with SCDT to provide additional facilities and opportunities for the community served by SCDT and provide funding in respect of the same of up to £350,000.  This liability is contingent upon commencement of the development of the Cononish mine project as defined under the Planning conditions and Decision letter.

 

Scotgold Resources Limited and its controlled entities have no other known material contingent liabilities as at 31 December 2016.


 

 

NOTE 7 - DIRECTORS' REMUNERATION

 

During the six months ended 31 December 2016, the following amounts were paid to directors of the Company.

 


Fees

Consulting

Salary

Total

Notes

$

$

$

$

 

Nat le Roux

1

-

-

-

-

Richard Gray


-

-

88,650

88,650

Chris Sangster

2

8,665

61,819

-

70,484

Phillip Jackson


8,887

-

-

8,887

Gabriel Chiappini                              3                8,605                 26,323                             -               34,928     

 

26,157                  88,142                 88,650               202,949

 

 

1)     Nat le Roux has waived his fees for the half-year ended 31 December 2016.

 

2)     Chris Sangster provides technical services under a management contract.

 

3)     Gabriel Chiappini acts as company secretary under a separate service agreement.

 

 

 

NOTE 8 - EVENTS SUBSEQUENT TO REPORTING DATE

 

Subsequent to the end of the Half-Year, the Company has secured a loan of £1,000,000 (approximately $1,620,000). The secured loan has been provided by the Chairman of the board and major shareholder of the Company, and is therefore a related party transaction. The secured loan was approved by the independent directors on 14 March 2017. The details and terms of the loan ("the Secured Loan") were announced on 15 March 2017.

 

On the same date as the announcement of the Secured Loan, the Company also announced the decision to proceed to the phased approach of the development of the Cononish mine, subject to funding.

 

As announced on 8 February 2017 the application made to the Loch Lomond and Trossachs National Park Planning Authority ("LLTNPPA") to extend BPT operations to the end of March 2018, was granted on 7th February 2017.

 

 

No other matters or circumstances have arisen since the end of the half-year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs in future financial years.


 

 

DIRECTORS' DECLARATION FOR THE HALF YEAR ENDED 31 DECEMER 2016

 

 

In the opinion of the directors of Scotgold Resources Limited ("the Company"):

 

1)         The attached financial statements and notes thereto are in accordance with the Corporations Act 2001 including:

 

(a)        complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

 

(b)        giving a true and fair view of the Group's financial position as at 31 December 2016 and of its performance for the half-year then ended; and

 

2)         there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

 

 

This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to s.303(5) of the Corporations Act 2001 .

 

 

 

 

 

Dated 16 March, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 


 

 

 

HLB MANN JUDD

 

INDEPENDENT AUDITOR'S REVIEW REPORT

To the members of Scotgold Resources Limited

 

 

Report on the Half-Year Financial Report

 

We have reviewed the accompanying half-year financial report of Scotgold Resources Limited ("the company") which comprises the condensed statement of financial position as at 31 December 2016, the condensed statement of profit or loss and other comprehensive income, the condensed statement of changes in equity and the condensed statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory notes, and the directors' declaration, for the Group comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.

 

Directors' responsibility for the half-year financial report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

 

Auditor's responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group's financial position as at 31 December 2016 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of the company, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

 

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Independence

In  conducting  our  review,  we  have  complied  with  the  independence  requirements  of  the

Corporations Act 2001.

 

 

 

 

.


 

 

 

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Scotgold Resources Limited is not in accordance with the Corporations Act 2001 including:

 

(a)    giving a true and fair view of the Group's financial position as at 31 December 2016 and of its performance for the half-year ended on that date; and

 

(b)    complying  with  Accounting  Standard  AASB  134  Interim  Financial  Reporting  and  the

Corporations Regulations 2001.

 

Emphasis of matter

Without modifying our conclusion, we draw attention to Note 1 in the financial report, which indicates that as at 31 December 2016, the Group had a cash balance of $329,400, a total comprehensive loss for the six month period of $813,986 and had a net cash outflow from operating and investing activities of $1,158,054. These conditions, along with other matters set forth in Note 1, indicate the existence of a material uncertainty which may cast significant doubt in relation to the company's ability to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business.

 

 

 

 

                                    

                                                                                                                      


 

HLB Mann Judd                                                                                  M R W Ohm
Chartered Accountants                                                                        Partner


 


 

 

Perth, Western Australia 
16 March 2017

 

 

 

 

 

 

 

 

 

 

 

 

Scotgold Resources

Limited

Stockdale Securities

Limited

Capital Markets

Consultants

Smaller Company Capital

 Ltd

Richard Gray - CEO

 

 

Robert Finlay/

 Ed Thomas

Simon Rothschild

Rupert Williams

Tel: +44 (0)1838 400 306

Tel: +44 (0)20 7601 6100

Tel +44 (0)7703 167 065

Tel: +44 (0)20 3651 2911

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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