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Avocet Mining PLC (AVM)

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Friday 05 November, 2010

Avocet Mining PLC

Q3 Gold Production

RNS Number : 6705V
Avocet Mining PLC
05 November 2010
 



AVOCET MINING PLC

("Avocet" or the "Company")

 

RESULTS FOR THE QUARTER ENDED 30 SEPTEMBER 2010

& INATA UPDATE

 

·      Total gold production up 28% to 67,792 ounces, from 52,870 ounces in the previous quarter;

-    Inata production up 30% to 40,461 ounces, from 31,225 ounces in the previous quarter;

-    South East Asia production up 26% to 27,331 ounces, from 21,645 ounces;

-    On track to meet or exceed Group production guidance of 220,000 ounces in 2010;

·      Total cash cost reduced by 12% to US$619/oz compared with US$701/oz in the previous quarter;

·      EBITDA of US$27.9 million, up from the previous quarter of US$24.6 million;

·      Net debt reduced from US$44.7 million at 30 June to US$37.7 million at 30 September, after first US$6.0 million debt repayment and purchase of Inata's second phase mining fleet;

·      Inata Mineral Resources and Mineral Reserves increased by 16% and 25% respectively(1) ;

·      200,000 metre drill programme commenced in October;

·      Positive drill results at Souma - maiden Mineral Resource scheduled for November 2010;

·      Forecast annual gold production for Inata life of mine increased to 165,000 ounces from 120,000 ounces, based on increased reserves and plant enhancements; third phase mining fleet already ordered;

·      Russell Edey appointed Chairman on 15 September 2010;

 

Period

Quarter ended

30 September

2010

Unaudited

Quarter ended

 30 June

 2010

Unaudited

9 months ended

 30 September

2010

Unaudited

9 months ended

30 September

2009

Unaudited

Total gold production (ounces)

67,792

52,870

165,539(2)

83,671

Average realised gold price (US$/oz)

1,139(3)

1,203

1,157

936

Cash production costs (US$/oz)

619

701

671(2)

600

EBITDA(4) (US$000)

27,860

24,559

56,537

21,009

Profit before tax and exceptionals (US$000)

13,308

11,277

24,781

5,976

Exceptional items (US$000)

-

(377)

(377)

(8,201)

Profit/(loss) before tax (US$000)

13,308

10,900

24,404

(2,225)

 

(1)  After allowing for mining depletion

(2)  Inata costs and revenues in the quarter to 31 March 2010, prior to the commencement of commercial mining operations, have been capitalised. 19,838 ounces of gold poured in this period have however been included in total gold production.

(3)  Includes 26,135 ounces delivered into Inata's hedge at $970/oz

(4)  EBITDA represents earnings before exceptional items, interest, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation

 

Brett Richards, Chief Executive Officer, commented:

 

"The last quarter saw Avocet grow gold production and lower cash costs at each of our operations.  West Africa is the engine room of our growth and we remain very encouraged not only by the performance of the Inata plant, but also by the potential for our accelerated exploration campaign across West Africa."

 

Avocet Mining will host a conference call on Friday 5 November 2010 at 09:30am (London, UK time) to update investors and analysts on its results. Participants may join the call by dialling one of the following three numbers, approximately 10 minutes before the start of the call.

 

From UK:(toll free)           0808 238 7396

From Norway:(toll free)   800 187 79

From rest of world:        + 44 20 3364 5947

Participant pass code:   660653#

 

A live audio webcast of the call will be available on:

http://mediaserve.buchanan.uk.com/2010/avocet051110/registration.asp

 

For further information please contact:

Avocet Mining PLC
Buchanan Communications
Ambrian Partners Limited
J.P. Morgan Cazenove
Arctic Securities

 

 
Financial PR Consultants
NOMAD and Joint Broker
Lead Broker
Financial Adviser

 

Brett Richards, CEO
Mike Norris, FD

Hans-Arne L'orange, EVP Business Development & Investor Relations

Bobby Morse

Katharine Sutton

Richard Brown

 

Michael Wentworth-Stanley
Niklas Kloepfer

Arne Wenger

 

 

+44 20 7766 7676

+44 20 7466 5000

+44 7802 875227

+44 20 7634 4700

+44 20 7588 2828

+47 21013100

 

www.avocet.co.uk

www.buchanan.uk.com

www.ambrian.com

www.jpmorgancazenove.com

www.arcticsec.no

 

 

 

Notes to Editors

 

Avocet Mining PLC ("Avocet" or "the Company") is a gold mining company listed on the AIM market of the London Stock Exchange (Ticker: AVM.L) and the Oslo Børs (Ticker: AVM.OL). The Company's principal activities are gold mining and exploration in Burkina Faso (as 90 per cent owner of the Inata gold mine), Malaysia (as 100 per cent owner of the Penjom gold mine, the country's largest gold producer) and Indonesia (as 80 per cent owner of the North Lanut gold mine and Bakan project in North Sulawesi).

 

The Company announced in May 2010 that it had initiated exploration within the Inata Mining Licence area and in the surrounding Bélahouro district with the objective of significantly increasing Inata's Mineral Resource and Mineral Reserve base as well as investigating the highly prospective Souma Trend, located 20 km from the Inata mill. The Company has a number of other advanced exploration projects in West Africa and South East Asia.

 

Background to operations

 

The Inata deposit presently comprises a Mineral Resource of 1.84 million ounces and a Mineral Reserve of 1.08 million ounces.  Inata poured its first gold in December 2009 and has now reached a production rate in excess of 12,000 ounces per month. Other assets in West Africa include exploration licences in Burkina Faso, Guinea and Mali (the most advanced being the Tri-K gold exploration project in Guinea with a Mineral Resource of 666,500 ounces).

 

Penjom is Malaysia's largest gold mine and was developed by Avocet in an area of historic alluvial mining. The mine is located in Pahang State, approximately 120 km north of the country's capital, Kuala Lumpur.

 

North Lanut in North Sulawesi, Indonesia, was developed by Avocet from the exploration stage and has produced over 270,000 ounces since it was commissioned in 2004. North Lanut is located within a Contract of Work, which includes exploration and mining rights over approximately 50,000 hectares in an area highly prospective for gold. Avocet holds an 80 per cent interest and an Indonesian company, PT Lebong Tandai, owns the remaining 20 per cent.

 

CHIEF EXECUTIVE OFFICER'S STATEMENT AND OPERATIONAL REVIEW

 

Overview of Strategic Priorities and Corporate Activities

 

Avocet has progressed well on the strategic priorities I outlined to the market in July of this year.  In West Africa, our new flagship mine, Inata, continues to deliver on its production and cost milestones and is now operating at or above design capacity in terms of ore throughput and gold production.

 

The key priority of our strategy is delivering growth, and our plans in West Africa are making good progress. This is evidenced by positive results announced in relation to the Souma trend, an increase in Mineral Resources and Mineral Reserves at Inata, and the accelerated drilling programme in and around Inata being conducted by our exploration team in West Africa.  Over the coming months we will see the results of this programme, which is targeted to double Mineral Reserves at Inata, as previously announced, and which will allow us to grow our gold production within the Bélahouro district. 

 

Today we are announcing increased average forecast gold production for Inata of 165,000 ounces per year over a six year mine life ending 2016, compared with the previous life of mine average of 120,000 ounces per year over an eight year mine life ending 2018.  This change has been made possible by the successful ramp up of the plant and by the Mineral Reserve increase announced in September 2010, and will result in an increase in unhedged production at cash costs in the region of US$500/oz over the coming years. Capital expenditure of up to US$10 million will be required to debottleneck the plant and utilise the full capacity of the crushing and grinding circuit. In addition, a third phase mining fleet at a cost of approximately US$15 million has been ordered, and will be required to feed the plant to maintain average gold production at 165,000 ounces per annum at life of mine grades. These costs are to be financed from internal cash flow.  The third mining fleet has already been ordered and the plant enhancements are expected to be commissioned by the end of the second quarter of 2011.  Extending the mine life is one of the key targeted outcomes from the recently commenced drilling programme at Inata.

 

In South East Asia we continue our strategic review to identify the optimal means of delivering value to shareholders from our assets in the region, including the potential for a trade sale. This strategic review is ongoing and we expect to update the market on its status by the year end. Penjom and North Lanut improved production as both operations accessed higher grade mining areas and processed more ore in the third quarter than in the second. 

 

In July, we strengthened the Board with the appointment of Russell Edey and Barry Rourke.  Russell brings considerable experience in the gold industry, notably as a Director then Chairman of AngloGold Ashanti over a period totalling 12 years, while Barry, a Partner at PricewaterhouseCoopers for 17 years, also has significant finance and resource sector experience. 

 

In September, after more than 20 years at the head of the Company, Nigel McNair Scott stepped down from the Board.  Nigel has been involved with Avocet from its inception, and was at the helm as it grew into its current structure. We are grateful for his support and leadership, and wish him the very best in his future endeavours.  In succession, Russell Edey was appointed Chairman of the Board and Barry Rourke was appointed Chairman of the Audit Committee. I very much look forward to working with Russell, Barry and the rest of the Board over the coming years.

 

Gold production and cash costs

 


2010


2009(2)

 


Gold produced (oz)

Cash cost (US$/oz)


Gold produced (oz)

Cash cost (US$/oz)

 


Q1

Q2

Q3

Q11

Q2

Q3


Q1

Q2

Q3

Q1

Q2

Q3

Inata

19,838

31,225

40,461

n/a

569

526


-

-

-

-

-

-

Penjom

13,669

10,461

15,020

818

1,119

841


16,077

 15,664

 16,401

691

669

660

North Lanut

11,370

11,184

12,311

635

678

657


11,297

 11,899

12,333

488

501

507

Total

44,877

52,870

67,792

735

701

619


27,374

27,563

28,734

608

597

595

(1) Excludes Inata results prior to commencement of commercial operations on 1 April 2010


(2) 2009 comparatives are reported as a calendar year, not as the former 31  March financial reporting year end

 

Gold production for the quarter of 67,792 ounces represents an increase of 28 per cent on the previous quarter, and brings the total for the year to date to 165,539 ounces. Each mine achieved an increase, with Inata completing its ramp up to design capacity and Penjom benefiting from access to more ore after a period of extensive waste stripping in the first half of the year. We remain on track to meet our full year production guidance of 220,000 ounces.

 

The increase in production resulted in a further improvement in the Group's average cash cost to US$619/oz for the quarter, a 12 per cent reduction compared with the previous quarter.

 

As a result of higher production and lower cash costs, EBITDA increased 13 per cent to US$27.9 million while profit before tax and exceptionals rose 18 per cent to US$13.3 million.

 

WEST AFRICA REGION

 

Inata - Burkina Faso

 


Quarter ended

30 Sep 2010

Unaudited

9 months

 ended

30 Sep 2010

Unaudited1

9 months

 ended

30 Sep 2009

Unaudited

Production statistics(1)





Ore mined (tonnes)

481,000

418,000

1,241,000

-

Waste mined (tonnes)

2,619,000

2,437,000

7,061,000

-

Ore and waste mined (tonnes)

3,100,000

2,855,000

8,302,000

-

Ore processed (tonnes)

549,000

389,000

1,166,000

-

Average ore head grade (g/t Au)

2.43

2.87

2.65

-

Process recovery rate

94%

95%

94%

-

Gold produced (ounces)

40,461

31,225

91,524

-

Cash costs (US$/oz)1





- mining

114

147

128

-

- processing

211

211

211

-

- royalties and overheads

201

211

206

-

Total cash cost (US$/oz)

526

569

545

-

 

(1) Production statistics include figures for Q1 2010; however cash costs include Q2 & Q3 only, as Inata had not reached commercial production in Q1

 

During the third quarter, mining operations continued in the Inata North pit as well as the lnata Central pit, where stripping had commenced in July 2010, which will supplement mill feed in 2011 as the plant continues to increase its throughput. Commissioning began on a second phase mining fleet, which will increase total tonnes mined to over 1.5 million tonnes per month from both pits.

 

The Inata plant completed its ramp up to design capacity, and as a result, tonnes processed rose by 41 per cent compared with the second quarter of 2010.  By the end of the third quarter, the plant had demonstrated its ability to run for extended periods at mill throughput rates in excess of the design capacity of 287 tonnes per hour.  The plant modifications required to achieve this milestone included upgrades and enhancements to cyclone pumps, conveyers, and piping. Due to quarter on quarter stockpile inventory changes, Inata processed a greater percentage of lower grade stockpile material (at a higher mill throughput), which resulted in a decrease in the grade of processed ore as compared with the second quarter.  Recoveries remained high despite the increased throughput, which has the effect of reducing the processing, or residence, time.  Gold produced in the quarter totalled 40,461 ounces, an increase of 30 per cent compared with the second quarter. Full year production is now expected to exceed 125,000 ounces. 

 

In September, the Company also announced a new Mineral Reserve at Inata of 1.1 million ounces of gold.  The new Mineral Reserve represents an increase of 235,600 ounces or 25 per cent after allowing for mining depletion, and was the result of economic analysis and a revised pit design following the updated resource announced earlier in September.

 

Avocet has also recently completed a study at Inata aimed at increasing annual gold production. The study shows that the increase in Mineral Reserves announced in September and the successful plant ramp up justify raising the processing plant throughput to 340 tonnes per hour from the current design capacity of 287 tonnes per hour. This will exploit the full capacity of the crushing and milling circuits, and will result in an average gold production rate of 165,000 ounces per year over a six year mine life ending in 2016 at cash costs in the region of US$500/oz.

 

The increased Mineral Reserve means that the life of mine stripping ratio will increase from 7:1 to 9:1.  Avocet has signed contracts with Caterpillar and Komatsu for the third phase mining fleet required for the increased rate of mining and to support the increase in annual gold production. Design work for the plant increase to 340 tonnes per hour has commenced and long lead items will be ordered in Q4 2010. The plant enhancements and third mining fleet additions are expected to be complete and operational by the end of Q2 2011.

 

The capital expenditure forecast for the plant enhancements and third mining fleet is approximately US$25 million, which will be funded from internal cash flow. The increase in gold production will be unhedged and will increase Avocet's exposure to the spot price of gold.

 

Finally, it is important to recognise that Inata has developed a strong safety culture while achieving its construction and operational milestones, and to date has worked more than three million man-hours without a lost time injury.

 

Exploration

 

In Burkina Faso, third quarter exploration highlights included increases in Mineral Resources and Reserves at Inata, drilling and ongoing resource estimation at the Souma Trend east of Inata, and preparation for a 200,000 metre drill programme in and around Inata.

 

In early September the Company announced a new Inata Mineral Resource of 1.84 million ounces of gold, an increase of 250,200 ounces or 16 per cent after allowing for mining depletion, and reflecting a higher proportion of ounces in the Measured category. The Mineral Resource upgrade followed an extensive campaign of re-logging of historic drill holes, detailed geological modelling on site, and gold grade re-estimation in conjunction with an independent consultant.  The new Mineral Resource is constrained by several wireframes based on the geological controls on the deposit that have been generated from the results of the re-logging programme, grade control RC drilling and in-pit mapping.

 

During the quarter Avocet announced drilling results from the central and southern parts of the Souma Trend, a 16 kilometre long gold-in-soil anomaly located approximately 20 kilometres east-north-east of Inata. The Company is currently reviewing the drilling results and expects to announce an Inferred Mineral Resources compliant with NI43-101 and JORC Code (2004) later in November 2010.

 

Preliminary results were obtained in the third quarter from the processing of the VTEM airborne geophysical survey conducted in June and July over the Bélahouro district surrounding Inata.  Avocet has commenced a 200,000 metre drilling program to identify additional Mineral Resources in and around the Inata deposit. The results of this programme will form the basis of next year's Mineral Resource and Mineral Reserve upgrade, expected in the third quarter 2011.

 

Elsewhere, exploration in Guinea has focused on developing drilling targets at Tri-K, Balandougou and Kankan in the north east of the country.  Following the success of VTEM airborne geophysical survey at Bélahouro, the Company will conduct a similar survey over the 986 square kilometre Tri-K Block and Balandougou later this month.  Drilling has already commenced in this area and further drilling priorities will be identified by the VTEM survey results.  In Mali, Avocet received approval of its N'tjila permit adjacent to Randgold Resources' Morila mine, and fieldwork will commence in early 2011.

 

SOUTH EAST ASIA REGION

 

Penjom - Malaysia

 


Quarter ended

 30 Sep 2010

 

Unaudited

Nine months

ended

30 Sep 2010

Unaudited

Nine months

 ended

30 Sep 2009

Unaudited

Production statistics





Ore mined (tonnes)

127,000

51,000

283,000

886,000

Waste mined (tonnes)

3,871,000

4,115,000

11,721,000

13,118,000

Ore and waste mined (tonnes)

3,998,000

4,166,000

12,004,000

14,004,000

Ore processed (tonnes)

193,000

187,000

565,000

545,000

Average ore head grade (g/t Au)

2.86

2.21

2.62

3.33

Process recovery rate

85%

79%

82%

82%

Gold produced (ounces)

15,020

10,461

39,150

48,142

Cash costs (US$/oz)





- mining

517

682

549

398

- processing

201

293

231

171

- royalties and overheads

123

144

127

104

Total cash cost (US$/oz)

841

1,119

907

673

 

Gold production at Penjom increased significantly in the third quarter, after intensive waste stripping in the first six months of the year, and as higher grade ores were accessed, notably at the Jalis pit. Ore mined therefore improved in both tonnages and in grade, and mill feeds also improved as better quality material was able to be sourced directly from the pit, rather than drawing on the lower grade stockpiles as in previous periods. Higher production resulted in a drop of 25 per cent in the cash costs per ounce reported compared with the second quarter of the year.

 

North Lanut - Indonesia

 


Quarter ended

 30 Sep 2010

 

Unaudited

Nine months

ended

30 Sep 2010

Unaudited

Nine months

 ended

30 Sep 2009

Unaudited

Production statistics





Ore mined (tonnes)

305,000

295,000

1,015,000

1,034,000

Waste mined (tonnes)

380,000

428,000

1,200,000

1,710,000

Ore and waste mined (tonnes)

685,000

723,000

2,215,000

2,744,000

Ore processed (tonnes)

368,000

267,000

900,000

916,000

Average ore head grade (g/t Au)

1.92

1.70

1.86

1.81

Process recovery rate

54%

77%

65%

67%

Gold produced (ounces)

12,311

11,184

34,865

35,529

Cash costs (US$/oz)





- mining

329

343

334

270

- processing

177

172

168

120

- royalties and overheads

151

163

155

109

Total cash cost (US$/oz)

657

678

657

499

 

Gold production at North Lanut rose 10 per cent compared with the previous quarter, due to increased leach pad availability allowing for higher ore tonnages to be processed. Grades were also improved as mining accessed higher grade areas at depth in the Rasik pits.  The initial low process recovery rate of 54 per cent reflects the fact that high ore tonnes were placed on the leach pad towards the end of the quarter, from which only a small proportion of gold had leached out by the end of September. The gold from this ore will continue to be recovered in the fourth quarter.  Higher gold production meant that cash cost per ounce was slightly below the previous quarter.

 

North Lanut's excellent safety record continues, with the operation having worked over 15 million lost time injury free hours.

 

South East Asian Exploration

 

Exploration in South East Asia focused on advancing the Doup and Seruyung projects, with drilling commencing in August and September, respectively.  Diamond drilling at Doup is focussed on infill drilling on the Panang zone where the metallurgy is simpler. The aim of this programme is to evaluate the continuity of higher-grade gold zones and facilitate an estimate of Measured and Indicated Mineral Resources. This will enable the estimation of Mineral Reserves and the first economic evaluation of the project.

 

At Seruyung, the Company has mobilised two diamond drill rigs to commence the first phase infill drilling programme of the Main Silica Cap zone, which forms the core of the project. This will allow the estimation of Inferred Mineral Resources and facilitate an understanding of the scope and scale of the project.

 

Financial results

 

Revenues in the quarter were US$77.5 million, an increase of 19 per cent compared with the previous quarter, principally reflecting an increase in production of nearly 15,000 ounces or 28 per cent.  The Group's third quarter realised gold price was US$1,139/oz, compared with second quarter of US$1,203/oz, and included the effect of 26,135 ounces being delivered into Inata's hedge at US$970/oz, the first hedge delivery. By the end of October, the hedge book had been reduced by a further 11,846 ounces and stood at 362,019 ounces, down from the original total of 400,000 ounces.

 

The Group's cash costs increased broadly in line with production to US$42.0 million.  Profit before tax and exceptional items increased 18 per cent from US$11.3 million in the previous quarter to US$13.3 million.

 

There were no exceptional items in the third quarter.  On 7 October the Company announced the sale of a number of non-core exploration assets and investments, which will be accounted for in the fourth quarter and which are expected to result in cash proceeds of approximately US$10.1 million and a small exceptional pre-tax profit.

 

Total EBITDA in the quarter was US$27.9 million, of which West African operations contributed US$20.2 million.

 

Net cash generated by operations of US$28.6 million was sufficient to fund payments for Inata's second phase mining fleet and other capex totalling US$20.4 million, as well as exploration of US$1.7 million and Inata's first US$6.0 million debt repayment in September. The Company's net debt position at the end of the third quarter improved to US$37.7 million, reflecting gross debt of US$84.0 million and cash slightly up at US$46.3 million. Further debt repayments of US$6 million are scheduled prior to the end of the financial year.

 

People

 

Each of our mines made improvements in production and costs in the quarter, while our exploration teams have added significant value to our assets. This is a testament to the effort and expertise of our employees in West Africa and South East Asia, and I thank them all for a successful quarter.

 

Brett A. Richards

5 November 2010 

 

 


CONDENSED CONSOLIDATED INCOME STATEMENT

 

 


note

30 September

2010

(three months)

Unaudited

30 September

2009

(three months)

Unaudited

30 September

2010

(nine months)

Unaudited

30 September

2009

(nine months)

Unaudited

 



US$000

US$000

US$000

US$000

 







 

Revenue

5

77,489

28,043

169,543

80,009

 

Cost of sales

11

(60,593)

(22,934)

(133,776)

(69,985)

 

Gross profit


16,896

5,109

35,767

10,024

 

Administrative expenses


(2,363)

(1,594)

(5,184)

(3,800)

 

Share based payments


(312)

(263)

(3,460)

(734)

 

Exploration impairment


-)

-)

-)

(244)

 

Deferred stripping impairment


-)

(7,957)

-

(7,957)

 

Profit/(loss) from operations


14,221

(4,705)

27,123

(2,711)

 

Profit/(loss) on disposal of assets and investments

3

-

-

1,986

-

 

Finance items






 

Exchange gains/(losses)


613

(65)

495

(231)

 

Finance income


13

433

85

726

 

Finance expense


(1,539)

(1)

(2,922)

(9)

 

Expenses of listing on Oslo Børs

3

-

-

(2,363)

-

 

Profit/(loss) before taxation


13,308

(4,338)

24,404

(2,225)

 







 

Analysed as:






 

Profit before taxation and exceptional items

2

13,308

3,619

24,781

5,976

 

Exceptional items

3

-

(7,957)

(377)

(8,201)

 

Profit/(loss) before taxation


13,308

(4,338)

24,404

(2,225)

 







 

Taxation


(452)

1,504

(2,925)

272

 







 

Profit/(loss) for the period


12,856

(2,834)

21,479

(1,953)

 

Attributable to:






 

Equity shareholders of the parent company


11,279

(3,409)

17,792

(2,865)

 

Non-controlling interest


1,577

575

3,687

912

 



12,856

(2,834)

21,479

(1,953)

 







 

Earnings/(loss) per share






 

Basic (cents per share)

6

5.74

  (1.75)

9.10

(1.94)

 

Diluted (cents per share)

6

5.67

 (1.75)

 9.02

 (1.94)







EBITDA(1)


27,860

7,213

56,534

21,009

 

(1)  EBITDA represents earnings before exceptional items, interest, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation.

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME









30 September

2010

(three months)

Unaudited

30 September

2009

(three months)

Unaudited

30 September

2010

(nine months)

Unaudited

30 September

2009

(nine months)

Unaudited



US$000

US$000

US$000

US$000







Profit/(loss) for the financial period


12,856

(2,834)

21,479

(1,953)

Exchange differences on translation of foreign operations


-)

-

-

(1,003)

Disposal of other financial assets


-)

-

841

-

Revaluation of other financial assets


(1,568)

1,321

(4,631)

2,528

Total comprehensive income/(expense) for the period


11,288

(1,513)

17,689

(428)







Attributable to:






Equity holders of the parent


9,711

(2,088)

14,002

(1,340)

Non-controlling interest


1,577

575

3,687

912



11,288

(1,513)

17,689

(428)

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 


note

30 September

2010

Unaudited

31 December

 2009

Audited

30 September

2009

Unaudited



US$000

US$000

US$000

Non-current assets





Goodwill


11,071

10,331

9,899

Intangible assets

7

21,812

18,059

37,437

Property, plant and equipment

8

302,187

299,793

274,774

Other financial assets


-

9,428

9,269

Deferred tax assets


5,251

5,866

6,962



340,321

343,477

338,341

Current assets





Inventories


39,535

31,266

19,351

Non-current assets held for sale

4

7,212

-

-

Trade and other receivables


26,320

14,899

16,442

Cash and cash equivalents


46,305

47,056

38,858



119,372

93,221

74,651

Current liabilities





Trade and other payables


49,987

45,186

45,260

Current tax liabilities


3,488

2,507

1,057

Other financial liabilities

9

24,000

-

-



77,475

47,693

46,317

Non-current liabilities





Other financial liabilities

9

60,000

90,000

64,462

Deferred tax liabilities


4,152

4,625

2,598

Other liabilities


18,075

17,004

15,869



82,227

111,629

82,929

Net assets


299,991

277,376

283,746

Equity





Issued share capital


16,004

15,904

15,903

Share premium


144,271

142,778

142,778

Other reserves


12,014

11,321

8,157

Retained earnings


118,253

101,611

109,717

Total equity attributable to the parent


290,542

271,614

276,555

Non-controlling interest


9,449

5,762

7,191

TOTAL EQUITY


299,991

277,376

283,746






 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


Share

capital

Share

 premium

Other

reserves

Retained

earnings

Non-controlling

interest

Total

equity


US$000

US$000

US$000

US$000

US$000

US$000

At 31 December 2008 (Unaudited)

9,867

52,834

6,234

113,438

5,502

187,875

(Loss)/profit for the period

-

-

-

(2,865)

912

(1,953)

Exchange differences on translation of foreign operations

-

-

(1,003)

-

-

(1,003)

Revaluation of other financial assets

-

-

2,528

-

-

2,528

Total comprehensive income for the period

-

-

1,525

(2,865)

912

(428)

Share based payments

-

-

-

(856)

-

(856)

Issue of shares

6,036

89,944

-

-

-

95,980

Movement on investments in treasury & own shares

-

-

398

-

-

398

Non-controlling interest acquired as part of Wega Mining acquisition

-

-

-

-

777

777

At 30 September 2009 (Unaudited)

15,903

142,778

8,157

109,717

7,191

283,746








At 31 December 2009 (Audited)

15,904

142,778

11,321

101,611

5,762

277,376

Profit for the period

-)

-)

-)

17,792

3,687

21,479

Revaluation of other financial assets

-)

-)

(4,631)

-)

-)

(4,631)

Disposal of other financial assets

-)

-)

841

-)

-)

841

Total comprehensive income for the period

-)

-)

(3,790)

17,792

3,687

17,689

Share based payments

-)

-)

-)

761

-)

761

Transfer between reserves

-)

-)

1,569

(1,569)

-)

-)

Issue of shares

100

1,493

-)

-)

-)

1,593

Loss on issue from treasury shares

-)

-)

-)

(342)

-)

(342)

Movement on investments in treasury & own shares

-)

-)

2,914

-)

-)

2,914

At 30 September 2010 (Unaudited)

16,004

144,271

12,014

118,253

9,449

299,991

 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT


 

 

 

Note

30 September

2010

(three months)

Unaudited

30 September

2009

(three months)

Unaudited

30 September

2010

(nine months)

Unaudited

30 September

2009

(nine months)

Unaudited



US$000

US$000

US$000

US$000

Cash flows from operating activities






Profit/(loss) for the period


12,856

(2,834)

21,479

(1,953)

Adjusted for:






Depreciation of non-current assets


13,639

2,737

29,411

9,043

Exploration impairments


-

-

-

244

Deferred stripping adjustment


-

1,224

-

6,476

Deferred stripping impairment


-

7,957

-

7,957

Share based payments


312

263

3,460

734

Provisions


242

147

615

287

Taxation in the income statement


452

(1,504)

2,925

(272)

Non-operating items in the income statement

10

663

(367)

5,713

(486)



28,164

7,623

63,603

22,030

Movements in working capital






(Increase)/decrease in inventory


(105)

393

(8,268)

177

(Increase)/decrease in trade & other receivables

(5,843)

3,060

(15,776)

191

Increase/(decrease) in trade & other payables


6,335

2,731

4,188

1,710

Net cash generated by operations


28,551

13,807

43,747

24,108

Interest received


13

433

85

726

Interest paid


(1,029)

(1)

(3,430)

(9)

Income tax paid


1,458

-

2,248)

(350)

Net cash generated by operating activities


28,993

14,239

42,650

24,475

Cash flows from investing activities






Payments for property, plant and equipment


(20,391)

(22,981)

(36,705)

(26,487)

Inata pre-commercial revenues capitalised

8

-

-

21,495)

-

Inata pre-commercial costs

8

-

-

(14,296)

-

Deferred consideration


(572)

(455)

(1,555)

(879)

Exploration and evaluation expenses


(1,685)

(2,240)

(6,355)

(8,382)

Net cash movement on purchase of subsidiary


-

(6,877)

-

(21,393)

Net cash used in investing activities


(22,648)

(32,553)

(37,416)

(57,141)

Cash flows from financing activities






Expenses of listing on Oslo Børs


-

-

(2,363)

-

Proceeds from issue of equity shares


-

-

1,883

-

Loans


(6,000)

5,000

(6,000)

5,000

Net cash generated from financing activities


(6,000)

5,000

(6,480)

5,000

Net cash movement


345

(13,314)

(1,246)

(27,666)

Exchange (losses)/gains


613

(65)

495

(231)

Total increase/(decrease) in cash and cash equivalents


958

(13,379)

(751)

(27,897)

Cash & cash equivalents at start of  period

45,347

52,237

47,056

66,755

Cash & cash equivalents at end of period

46,305

38,858

46,305

38,858

 

NOTES TO THE FINANCIAL STATEMENTS

 

1.       Basis of preparation

 

The condensed consolidated quarterly financial statements, which are unaudited, have been prepared in accordance with the requirements of International Accounting Standard 34. This condensed quarterly report does not include all the notes of the type normally included in an annual financial report. Accordingly, this condensed report is to be read in conjunction with the Annual Report for the nine months ended 31 December 2009, which has been prepared in accordance with IFRS as adopted by the European Union, and any public announcements made by the Group during the interim reporting period.

 

The financial information set out in this quarterly report does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The unaudited condensed quarterly financial statements for the three months and nine months ended 30 September 2010 have been drawn up using accounting policies and presentation expected to be adopted in the Group's full financial statements for the year ending 31 December 2010, which are not expected to be significantly different to those set out in note 1 to the Group's audited financial statements for the nine months ended 31 December 2009.

 

The financial information for the nine months ended 31 December 2009 has been extracted from the statutory accounts for that period. The Company's statutory financial statements for the nine months ended 31 December 2009 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under sections 498(2) or (3) of the Companies Act 2006.

 

After review of the Group's operations, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the unaudited condensed interim financial statements.

 

2.   Profit before tax and exceptional items

 

Profit before tax and exceptional items is calculated as follows:

 

 

 

30 September

2010

(three months)

Unaudited

30 September

2009

(three months)

Unaudited

30 September

2010

(nine months)

Unaudited

30 September

2009

(nine months)

Unaudited


US$000

US$000

US$000

US$000






Profit/(loss) from operations

14,221

(4,705)

27,123

(2,711)

Add back deferred stripping impairment

-)

7,957

-)

7,957

Add back exploration impairment

-)

-

-)

244

Exchange (losses)/gains

613

(65)

495

(231)

Net finance (expense)/income

(1,526)

432

(2,837)

717

Profit before tax and exceptional items

13,308

3,619

24,781

5,976

 

3.   Exceptional items


30 September

2010

(three months)

Unaudited

30 September

2009

(three months)

Unaudited

30 September

2010

(nine months)

Unaudited

30 September

2009

(nine months)

Unaudited


US$000

US$000

US$000

US$000






Exploration impairment

-

-

-

(244)

Deferred stripping impairment

-

(7,957)

-

(7,957)

Profit on redemption of debenture

-

-

3,138

-

Loss on disposal of other financial assets

-

-

(1,152)

-

Expenses of listing on Oslo Børs

-

-

(2,363)

-

Exceptional (loss) before taxation

-

(7,957)

(377)

(8,201)

Taxation

-

2,069

-

2,069

Exceptional (loss) after taxation

-

(5,888)

(377)

(6,132)

Non-controlling interest

-

-

-

-

Attributable to equity shareholders of the parent

-

(5,888)

(377)

(6,132)

 

Profit on redemption of debenture

 

Profit on disposal arises from the redemption of a debenture held by Wega Mining AS, a wholly-owned subsidiary of Avocet Mining PLC, in Merit Mining Corp ("Merit"). This debenture, along with all remaining assets in Merit, had been fully written down as part of the fair value adjustments on the acquisition of Wega Mining. At the time of the acquisition it was not considered likely that Merit would have the resources to settle the debenture. Following the investment of approximately CA$16 million in Merit by Hong Kong Huakan Investment Co Ltd, the repayment was possible, and the gain has therefore been classified as exceptional.

 

Loss on disposal of other financial assets

 

In June 2010, Avocet disposed of the shares held in Dynasty Gold Corp. Shares in Dynasty were recorded in the balance sheet at fair value, with movements in fair value recognised in equity, in accordance with IAS39. On the disposal of the shares, accumulated losses previously recognised in equity are transferred to the income statement and recognised in the loss on disposal.

 

Oslo listing costs

 

On 16 June 2010 Avocet announced its successful listing on Oslo Børs. Costs of the listing, which were not directly attributable to new shares issued, are treated as exceptional costs in the period. These included US$1.8 million of Stamp Duty Reserve Tax costs following the transfer of existing Avocet shareholders from UK-based registration system to the Norwegian VPS share registration system.

 

Impairment of capitalised deferred stripping cost

 

In September 2009, an impairment of deferred stripping costs previously capitalised was made on the basis that the grades and recoveries of the ore that had been stripped in earlier years proved significantly lower than estimated at the time when the stripping costs were deferred. There are currently no deferred stripping costs recognised in the balance sheet.

 

4.   Non-current assets held for sale

 

Non-current assets held for sale comprise assets where the Group expects to realise value through sale as opposed to continued use. At the period end, this included the Group's holding of shares in Monument Mining at a value of US$4.6 million, and the Group's interest in the Houndé licences at a value of US$2.6 million.  Monument Mining shares were previously reported in other financial assets, with movements in fair value recognised in equity. The interest in the Houndé licences has been transferred from intangible assets. The lower of the cost and net realisable value is the $2.6 million fair value that was attributed to the licences on acquisition of the Wega group.

 

The disposal of both assets was completed in October, as announced by the Group on 7 October 2010.

 



 

5.         Quarterly Analysis

 

unaudited condensed quarterly consolidated income statement

 



Q1 2010

Unaudited

Q2 2010

Unaudited

Q3 2010

Unaudited

9 months to 30 September 2010

Unaudited

 



US$000

US$000

US$000

US$000

 







 

Revenue


27,170

64,884

77,489

169,543

 

Cost of sales


(23,933)

(49,250)

(60,593)

(133,776)

 

Gross profit


3,237

15,634

16,896

35,767

 

Administrative expenses


(1,664)

(1,157)

(2,363)

(5,184)

 

Share based payments


(1,576)

(1,572)

(312)

(3,460)

 

(Loss)/profit from operations


(3)

12,905

14,221)

27,123

 

Net profit on disposal of other financial assets


-)

1,986

-)

1,986

 

Finance items






 

Exchange gains/(losses)


130

(248)

613

495

 

Finance income


70

2

13

85

 

Finance expense


(1)

(1,382)

(1,539)

(2,922)

 

Expenses of listing on Oslo Børs


-

(2,363)

-

(2,363)

 

Profit before taxation


196

10,900

13,308

24,404

 







 

Analysed as:






 

Profit before taxation and exceptional items


196

11,277

13,308

24,781

 

Exceptional items


-)

(377)

-

(377)

 

(Loss)/profit before taxation


196

10,900

13,308

24,404

 







 

Taxation


1,108

(3,581)

(452)

(2,925)

 







 

Profit for the period


1,304

7,319

12,856

21,479

 

Attributable to:






 

Equity shareholders of the parent company


1,105

5,408

11,279

17,792

 

Non-controlling interest


199

1,911)

1,577

3,687

 



1,304)

7,319)

12,856

21,479

 

EBITDA(1)


4,115

24,559

27,860

56,534

 

 

(1)  EBITDA represents earnings before exceptional items, interest, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation.

 

6.   Earnings per Share

 

Earnings per share are analysed in the table below, which also shows earnings per share after adjusting for exceptional items.


30 September

2010

(three months)

Unaudited

30 September

2009

(three months)

Unaudited

30 September

2010

(nine months)

Unaudited

30 September

2009

(nine months)

Unaudited


Shares

Shares

Shares

Shares

Weighted average number of shares in issue for the period





- number of shares with voting rights

196,491,602

194,277,937

195,449,124

147,696,194

- effect of share options in issue

2,433,452

65,004

1,771,774

141,984

- total used in calculation of diluted earnings per share

198,925,054

194,342,941

197,220,898

147,838,178







US$000

US$000

US$000

US$000

Earnings/(loss) per share





Profit/(loss) for the period

12,856

(2,834)

21,479

(1,953)

Adjustments:





(Less) non-controlling interest

(1,577)

(575)

(3,687)

(912)

Profit/(loss) for period attributable to equity shareholders of the parent

11,279

(3,409)

17,792

(2,865)

Earnings/(loss) per share





- basic (cents per share)

5.74

(1.75)

9.10

(1.94) 

- diluted (cents per share)

5.67

(1.75)

9.02

(1.94)






Earnings per share before exceptional items





Profit/(loss) for period attributable to equity shareholders of the parent

11,279

(3,409)

17,792

(2,865)

Adjustments:





Add back exploration impairment

-

-

-

244

Add back deferred strip impairment

-

7,957

-

7,957

Less profit on debentures settled

-

-

(3,138)

-

Add back loss on disposal of other financial assets

-

-

1,152

-

Add back expenses of listing on Oslo Børs

-

-

2,363

-

Less tax on deferred strip impairment

-

(2,069))

-

(2,069)

Profit for the period attributable to equity shareholders of the parent before exceptionals

11,279

2,479

18,169

3,267

Earnings per share





- basic (cents per share)

 5.74

1.28

9.30

2.21)

- diluted (cents per share)

5.67              

1.28

9.21

2.21)

 

7.   Intangible assets

 

Intangible assets represent deferred exploration expenditure.

 

8.   Property,  plant and equipment

 


Mining property and plant

Office equipment


Nine months ended

30 September 2010

Malaysia

Indonesia

West Africa

UK

Total


US$000

US$000

US$000

US$000

US$000

Cost






At 1 January 2010

100,006

56,289

233,974

505

390,774

Additions

548

1,669

34,432

56

36,705

Addition to mine closure provision

-

2,299

-

-

2,299

Inata pre-commercial revenues

-)

-)

(21,495)

-)

(21,495)

Inata pre-commercial costs

-)

-)

14,296

-)

14,296

At 30 September 2010

100,554

60,257

261,207

561

422,579

Depreciation






As at 1 January 2010

60,720

30,061

-

200

90,981

Charge for the period

4,430

5,403

19,487

91

29,411

At 30 September 2010

65,150

35,464

19,487

291

120,392

Net Book Value at

30 September 2010

35,404

24,793

241,720

270

302,187

At 1 January 2010

39,286

26,228

233,974

305

299,793

 

All costs and revenues at Inata between 1 January and 31 March 2010 related to the testing and development phase, prior to the commencement of commercial operations. Therefore, these costs and revenues have been capitalised as part of mining property, plant and equipment. From 1 April 2010, all revenues and operating expenses in respect of mining operations at Inata have been recognised in the income statement.

 

9.   Other Financial liabilities

 

Other financial liabilities of US$84 million include US$59 million drawn under a project finance facility from Macquarie Bank Limited relating to the Inata gold project and US$25 million drawn under a corporate facility with Standard Chartered Bank. $24 million of the Macquarie Bank Limited project finance facility is due for repayment within one year.

 

During the quarter, the Group commenced delivery of gold to meet forward sale contracts. The contracts are considered to be outside the scope of IAS39,  on the basis that they are for own use and gold produced will continue to be delivered into these contracts in future periods, and therefore no value is reflected in the condensed consolidated financial statements. 26,135 ounces were delivered into the forward contracts during the quarter, at an average realised price of $970 per ounce. A further 11,846 ounces were delivered in October 2010, and at 29 October 2010, the hedge book had reduced to 362,019 ounces.

 

10. Non-operating items in the income statement 

 

In arriving at net cash flow from operating activities, the following non-operating items in the income statement have been adjusted for:

 


30 September 2010

(three months)

Unaudited

30 September 2009

(three months)

Unaudited

30 September 2010

(nine months)

Unaudited

30 September 2009

(nine months)

Unaudited


US$000

US$000

US$000

US$000)

Expenses of listing on Oslo Børs

-

-

2,363

-

Exchange losses/(gains)

(863)

65

(639)

231

Loss on disposal of other financial asset

-

-

1,152

-

Finance income

(13)

(433)

(85)

(726)

Finance expense

1,539

1

2,922

9

Non-operating items in the income statement

663

(367)

5,713

(486)

 

11. Segmental Reporting

 

For the three months ended

30 September 2010 (Unaudited)

UK

Malaysia

Indonesia

West Africa

TOTAL


US$000

US$000

US$000

US$000

US$000

INCOME STATEMENT












Revenue

-)

17,708

15,482

44,299

77,489

Cost of sales

435

(15,600)

(10,462)

(34,966)

(60,593)

Cash production costs:


(12,623)

(8,086)

(21,265)

(41,974)

- mining

-

(7,766)

(4,046)

(4,609)

(16,421)

- processing

-

(3,016)

(2,185)

(8,519)

(13,720)

- overheads

-

(595)

(1,767)

(4,807)

(7,169)

- royalties

-

(1,246)

(88)

(3,330)

(4,664)







Changes in inventory

-

(527)

(306)

(1,160)

(1,993)

Other cost of sales(1)

464

(751)

(1,055)

(1,645)

(2,987)

Depreciation and amortization(2)

(29)

(1,699)

(1,015)

(10,896)

(13,639)

Gross profit

435

2,108

5,020

9,333

16,896

Administrative expenses

(2,363)

-

-

-

(2,363)

Share based payments

(312)

-

-

-

(312)

(Loss)/profit from operations

(2,240)

2,108

5,020

9,333

14,221

Net finance items

(474)

17

292

(748)

(913)

(Loss)/profit before taxation

(2,714)

2,125

5,312

8,585

13,308

Analysed as:






Loss/(profit) before tax and exceptional items

(2,714)

2,125

5,312

8,585

13,308

Exceptional items

-

-

-

-

-

Taxation

-

853

(1,305)

-

(452)

(Loss)/profit for the period

(2,714)

2,978

4,007

8,585

12,856

Attributable to:






Equity shareholders of parent company

(2,714)

2,978

3,128

7,887

11,279

Non-controlling interest

-

-

879

698

1,577


(2,714)

2,978

4,007

8,585

12,856

EBITDA(3)

(2,211)

3,807

6,035

20,229

27,860

 

(1)  Other cost of sales represents costs not directly attributable to production

(2)  Includes amounts in respect of the amortisation of mine closure provisions

(3)  EBITDA represents earnings before exceptional items, interest, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation.

 

For the three months ended

30 September 2010

UK

Malaysia

Indonesia

West

Africa

TOTAL


US$000

US$000

US$000

US$000

US$000

CASH FLOW STATEMENT












(Loss)/profit for the period

(2,714)

2,978

4,007

8,585

12,856

Adjustments for non-cash/non operating items(1)

823

829

1,974

11,682

15,308

Movements in working capital

1,096

3,481

(2,261)

(1,929)

387

Net cash (used in)/generated by operations

(795)

7,288

3,720

18,338

28,551

Net interest (paid)/received

(46)

8

6

(984)

(1,016)

Tax (paid)/received

-

-

1,458

-

1,458

Purchase of property, plant and equipment

(35)

(363)

(534)

(19,459)

(20,391)

Deferred exploration expenditure

(73)

(445)

(751)

(416)

(1,685)

Other cash movements(2)

(2,691)

(314)

(1,924)

(1,030)

(5,959)

Total (decrease)/increase in cash

(3,640)

6,174

1,975

(3,551)

958

 

(1)  Adjustments for non-cash and non-operating items include depreciation, share based payments, movement in provisions, taxation in the income statement, and other non-operating items in the income statement.

(2)  Other cash movements include deferred consideration paid, cash flows from financing activities, and exchange gains or losses.

 

At 30 September 2010 (Unaudited)

UK

Malaysia

Indonesia

West

Africa

TOTAL


US$000

US$000

US$000

US$000

US$000

STATEMENT OF FINANCIAL POSITION












Non-current assets

5,750

36,577

52,908

245,086

340,321

Inventories

-

9,966

12,710

16,859

39,535

Trade and other receivables

842

350

6,560

18,568

26,320

Assets held for sale

4,612

-

-

2,600

7,212

Cash and cash equivalents

7,800

11,662

8,156

18,687

46,305

Total assets

19,004

58,555

80,334

301,800

459,693

Current liabilities

(2,119)

(8,742)

(8,622)

(57,992)

(77,475)

Non-current liabilities

(28,063)

(5,047)

(12,349)

(36,768)

(82,227)

Total liabilities

(30,182)

(13,789)

(20,971)

(94,760)

(159,702)

Net assets

(11,178)

44,766

59,363

207,040

299,991

 

For the three months ended

30 September 2009 (Unaudited)

UK

Malaysia

Indonesia

TOTAL


US$000

US$000

US$000

US$000

INCOME STATEMENT










Revenue

-

15,750

12,293

28,043

Cost of sales

(1,362)

(13,482)

(8,090)

(22,934)

Cash production costs:

-

(10,843)

(6,225)

(17,068)

- mining

-

(6,410)

(3,335)

(9,745)

- processing

-

(2,760)

(1,513)

(4,273)

- overheads

-

(578)

(1,290)

(1,868)

- royalties

-

(1,095)

(87)

(1,182)






Deferred stripping adjustment

-

(1,224)

-

(1,224)

Changes in inventory

-

(1,139)

449

(690)

Other cost of sales(1)

(1,357)

1,267

(1,125)

(1,215)

Depreciation and amortization(2)

(5)

(1,543)

(1,189)

(2,737)

Gross (loss)/profit

(1,362)

2,268

4,203

5,109






Administrative expenses

(1,594)

-

-

(1,594)

Share based payments

(263)

-

-

(263)

Deferred stripping impairment

-

(7,957)

-

(7,957)

(Loss)/profit from operations

(3,219)

(5,689)

4,203

(4,705)

Net finance items

661

1

(295)

367

(Loss)/profit before taxation

(2,558)

(5,688)

3,908

(4,338)

Analysed as:





Loss/(profit) before tax and exceptional items

(2,558)

2,269

3,908

3,619

Exceptional items

-

(7,957)

-

(7,957)

Taxation

678

1,843

(1,017)

1,504

(Loss)/profit for the period

(1,880)

(3,845)

2,891

(2,834)

Attributable to:





Equity shareholders of parent company

(1,880)

(3,845)

2,316

(3,409)

Non-controlling interest

-

-

575

575


(1,880)

(3,845)

2,891

(2,834)

EBITDA(3)

(3,214)

5,035

5,392

7,213

 

(1)  Other cost of sales represents costs not directly related to production

(2)  Includes amounts in respect of the amortisation of mine closures provisions

(3)  EBITDA represents earnings before exceptional items, interest, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation.

 

For the three months ended

30 September 2009

UK

Malaysia

Indonesia

West Africa

TOTAL


US$000

US$000

US$000

US$000

US$000

CASH FLOW STATEMENT












Profit for the period

(1,880)

(3,845)

2,891

-

(2,834)

Adjustments for non-cash/non operating items(1)

(1,071)

8,880

2,648

-

10,457

Movements in working capital

(541)

3,358

3,366

-

6,183

Net cash (used in)/generated by operations

(3,491)

8,393

8,905

-

13,807

Net interest received

428

2

2

-

432

Purchase of property, plant and equipment

(394)

(1,104)

(255)

(21,228)

(22,981)

Deferred exploration expenditure

(49)

(472)

(1,067)

(652)

(2,240)

Other cash movements(2)

(4,046)

(7,702)

827

8,524

(2,397)

Total (decrease)/increase in cash

(7,552)

(883)

8,412

(13,356)

(13,379)

 

(1)  Adjustments for non-cash items include depreciation, exploration impairment, share based payments, movement in provisions, taxation in the income statement, and non-operating items in the income statement

(2)  Other cash movements include deferred consideration paid, cash flows from financing activities, and exchange gains or losses.

 

30 September 2009 (Unaudited)

UK

Malaysia

Indonesia

West

Africa

TOTAL


US$000

US$000

US$000

US$000

US$000

STATEMENT OF FINANCIAL POSITION






Non-current assets

29,504

38,241

49,883

220,713

338,341

Inventories

-)

9,009

10,340

2

19,351

Trade and other receivables

1,667

1,466

9,727

3,582

16,442

Cash and cash equivalents

15,148

9,205

10,569

3,936

38,858

Total assets

46,319

57,921

80,519

228,233

412,992

Current liabilities

(5,722)

(8,157)

(6,003)

(26,435)

(46,317)

Non-current liabilities

(7,706)

(4,018)

(11,001)

(60,204)

(82,929)

Total liabilities

(13,428)

(12,175)

(17,004)

(86,639)

(129,246)

Net assets

32,891

45,746

63,515

141,594

283,746

 

For the nine months ended

30 September 2010 (Unaudited)

UK

Malaysia

Indonesia

West Africa

TOTAL


US$000

US$000

US$000

US$000

US$000

INCOME STATEMENT












Revenue

-)

47,184

41,455

80,904

169,543

Cost of sales

(605)

(43,365)

(30,745)

(59,061)

(133,776)

Cash production costs:

-)

(35,518)

(22,880)

(39,021)

(97,419)

- mining

-)

(21,498)

(11,628)

(9,194)

(42,320)

- processing

-)

(9,056)

(5,875)

(15,099)

(30,030)

- overheads

-)

(1,659)

(5,132)

(8,650)

(15,441)

- royalties

-)

(3,305)

(245)

(6,078)

(9,628)







Changes in inventory

-)

(2,077)

590

2,309

822

Other cost of sales(1)

(514)

(1,340)

(3,052)

(2,862)

(7,768)

Depreciation and amortization(2)

(91)

(4,430)

(5,403)

(19,487)

(29,411)

Gross (loss)/profit

(605)

3,819

10,710

21,843

35,767

Administrative expenses

(5,184)

-)

-)

-)

(5,184)

Share based payments

(3,460)

-)

-)

-)

(3,460)

(Loss)/profit from operations

(9,249)

3,819

10,710

21,843

27,123

Profit on disposal of investments

1,986

-)

-)

-)

1,986

Net finance items before exceptional

(939)

23

355

(1,781)

(2,342)

Exceptional finance items

(2,363)

-

-

-

(2,363)

(Loss)/profit before taxation

(10,565)

3,842

11,065

20,062

24,404

Analysed as:






(Loss)/profit before tax and exceptional items

(10,188)

3,842

11,065

20,062

24,781

Exceptional items

(377)

-)

-)

-)

(377)

Taxation

(873)

232

(2,284)

-)

(2,925)

Loss/(profit) for the period

(11,438)

4,074

8,781

20,062

21,479

Attributable to:






Equity shareholders of parent company

(11,438)

4,074

6,899

18,257

17,792

Non-controlling interest

-)

-)

1,882

1,805

3,687


(11,438)

4,074

8,781

20,062

21,479

EBITDA(3)

(9,158)

8,249

16,113

41,330

56,534

 

(1)     Other cost of sales represents costs not directly attributable to production

(2)     Includes amounts in respect of the amortisation of mine closure provisions

(3)     EBITDA represents earnings before exceptional items, interest, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation

 

For the nine months ended

30 September 2010

UK

Malaysia

Indonesia

West

Africa

TOTAL


US$000

US$000

US$000

US$000

US$000

CASH FLOW STATEMENT












(Loss)/profit for the period

(11,438)

4,074

8,781

20,062

21,479

Adjustments for non-cash/non operating items(1)

8,444

4,215

7,960

21,505

42,124

Movements in working capital

943

812

(3,616)

(17,995)

(19,856)

Net cash (used in)/generated by operations

(2,051)

9,101

13,125

23,572

43,747

Net interest (paid)/received

(602)

12

71

(2,826)

(3,345)

Tax received

-)

1,200

1,048

-

2,248

Purchase of property, plant and equipment

(56)

(548)

(119)

(27,233)

(27,956)

Deferred exploration expenditure

(122)

(1,531)

(3,531)

(2,721)

(7,905)

Other cash movements(1)

(6,815)

(7,145)

(9,457)

15,877

(7,540)

Total (decrease)/increase in cash

(9,646)

1,089

1,137

6,669

(751)

 

(1)     Adjustments for non-cash and non-operating items include depreciation, share based payments, movement in provisions, taxation in the income statement, and other non-operating items in the income statement

 

For the nine months ended

30 September 2009 (Unaudited)

UK

Malaysia

Indonesia

TOTAL


US$000

US$000

US$000

US$000

INCOME STATEMENT










Revenue

-)

45,342

34,667

80,009

Cost of sales

(1,859)

(43,862)

(24,264)

(69,985)

Cash production costs:

-)

(32,419)

(17,702)

(50,121)

- mining

-)

(19,174)

(9,580)

(28,754)

- processing

-)

(8,234)

(4,269)

(12,503)

- overheads

-)

(1,741)

(3,599)

(5,340)

- royalties

-)

(3,270)

(254)

(3,524)






Deferred stripping adjustment

-)

(6,476)

-)

(6,476)

Changes in inventory

-)

724

(360)

364

Other cost of sales(1)

(1,848)

(1,332)

(1,529)

(4,709)

Depreciation and amortization(2)

(11)

(4,359)

(4,673)

(9,043)

Gross (loss)/profit

(1,859)

1,480

10,403

10,024






Administrative expenses

(3,800)

-)

-)

(3,800)

Share based payments

(734)

-)

-)

(734)

Deferred stripping impairment

-

(7,957)

-

(7,957)

Exploration impairment

(261)

-

17

(244)

(Loss)/profit from operations

(6,654)

(6,477)

10,420

(2,711)

Net finance items

1,003

42

(559)

486

(Loss)/profit before taxation

(5,651)

(6,435)

9,861

(2,225)

Analysed as:





Loss/(profit) before tax and exceptional items

(5,390)

1,522

9,844

5,976

Exceptional items

(261)

(7,957)

17

(8,201)

Taxation

3,361

2,098

(5,187)

272

(Loss)/profit for the period

(2,290)

(4,337)

4,674

(1,953)

Attributable to:





Equity shareholders of parent company

(2,290)

(4,337)

3,762

(2,865)

Non-controlling interest

-)

-)

912

912


(2,290)

(4,337)

4,674

(1,953)

EBITDA(3)

(6,382)

12,315

15,076

21,009

 

(1)     Other cost of sales represents costs not directly related to production

(2)     Includes amounts in respect of the amortisation of mine closures provisions

(3)     EBITDA represents earnings before exceptional items, interest, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation.

 

For the nine months ended

30 September 2009

UK

Malaysia

Indonesia

West

Africa

TOTAL


US$000

US$000

US$000

US$000

US$000

CASH FLOW STATEMENT












Profit for the period

(2,290)

(4,337)

4,674

-

(1,953)

Adjustments for non-cash/non operating items(1)

(2,388)

16,708

9,663

-

23,983

Movements in working capital

2,431

1,408

(1,761)

-

2,078

Net cash (used in)/generated by operations

(2,247)

13,779

12,576

-

24,108

Net interest received

654

56

7

-

717

Income tax paid

-

-

(350)

-

(350)

Purchase of property, plant and equipment

(397)

(2,325)

(2,537)

(21,228)

(26,487)

Deferred exploration expenditure

(361)

(2,458)

(4,911)

(652)

(8,382)

Other cash movements(2)

(40,407)

(5,001)

2,089

25,816

(17,503)

Total (decrease)/increase in cash

(42,758)

4,051

6,874

3,936

(27,897)

 

(1)     Adjustments for non-cash items include depreciation, exploration impairment, share based payments, movement in provisions, taxation in the income statement, and non-operating items in the income statement

(2)     cash movements include deferred consideration paid, cash flows from financing activities, and exchange gains or losses

 

31 December 2009 (Audited)

UK

Malaysia

Indonesia

West

Africa

TOTAL


US$000

US$000

US$000

US$000

US$000

STATEMENT OF FINANCIAL POSITION






Non-current assets

15,873

38,762

51,621

237,221

343,477

Inventories

-

11,815

10,567

8,884

31,266

Trade and other receivables

1,086

2,415

9,532

1,866

14,899

Cash and cash equivalents

17,446

10,574

7,019

12,017

47,056

Total assets

34,405

63,566

78,739

259,988

436,698

Current liabilities

2,334

10,617

6,737

28,005

47,693

Non-current liabilities

28,230

5,112

11,519

66,768

111,629

Total liabilities

30,564

15,729

18,256

94,773

159,322

Net assets

3,841

47,837

60,483

165,215

277,376

 


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