RNS Number:0219Z
Ballarat Goldfields N.L.
27 February 2006
Ballarat Goldfields NL
A.C.N. 006 245 441
HALF-YEAR REPORT
31 DECEMBER 2005
Contents Page
Directors' Report 2
Auditors' Independence Declaration 5
Consolidated Income Statement 6
Consolidated Balance Sheet 7
Consolidated Statement of Changes in Equity 8
Consolidated Cash Flow Statement 9
Notes to the Financial Statements 10
Directors' Declaration 18
Independent Review Report to the Members 19
Corporate Directory 21
This Half-year report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the year ended 30 June 2005 and any
public announcements made by Ballarat Goldfields NL during the interim reporting
period in accordance with the continuous disclosure requirements of the
Corporations Act 2001.
Directors' Report
The Directors present their report on the consolidated entity consisting of
Ballarat Goldfields NL (BGF) and the entities it controlled at the end of, or
during, the half-year ended 31 December 2005.
The half-year to 31 December 2005 is the first consolidated entity report under
the 'Australian Equivalents of International Financial Reporting Standards'
(AIFRS). Changes to the accounting policies following the adoption of AIFRS are
shown in Note 1 to the Financial Statements. The comparative 2004 half-year
results, previously reported under 'Australian Generally Accepted Accounting
Principles' (AGAAP), have been restated to comply with AIFRS.
Directors
The Directors of the Company at any time during the half-year and up to the date
of this report:
Name Period of Directorship & Responsibilities
Colin Smith Non Executive Chairman since October 2002, Member of Audit and
Remuneration Committees
Mike Non Executive Director since August 2004 and member of Remuneration
Etheridge Committee
Alister Non Executive Director since July 2005, Chair of the Audit Committee
Maitland and member of Remuneration Committee
Richard Managing Director since October 2002
Laufmann
Review of operations
Corporate
During the half-year to 31 December 2005, the company's financing activities
included:
1. Cash of $12 million was drawn from the loan facility held with Investec Bank
(Australia) Limited. Fifty per cent of the monies drawn were repaid on 15
October 2005. The balance outstanding is convertible into BGF securities.
2. On 30 September 2005, trading in the company's listed options (BGFO) ceased
following the expiry of the options. Funds of $33.7 million were received
upon exercise of the 224,897,776 options at $0.15. Approximately 99.6% of
the 224,897,776 options were exercised prior to expiry with a shortfall of
830,368 options (0.4%) exercised by the underwriter.
3. In November 2005, an international placement of 150 million shares at A$0.30
raised A$45 million, before costs. The placement went to institutional
clients of RBC Capital Markets, Numis Securities Limited and Haywood
Securities Inc.
Funding from the loan facility and option exercise enabled the company to commit
to the continued development of the Ballarat East underground project, and
commence construction of the processing facilities.
The funds raised by the placement are for the exploration and feasibility of the
Ballarat South, Berringa and Ballarat West projects, in addition to the Ballarat
East development.
Ballarat East Project Development
Underground decline development and mining
The primary mine development objective remained the Sulieman decline to the
north and the Woah Hawp decline to the south.
The Sulieman decline, at a vertical depth of 223 metres below surface, is being
developed to the north to initially provide drill platforms for resource
definition before ultimately providing a return airway for the mine.
The Woah Hawp decline, at a vertical depth of 230 metres below surface,
continued to the south providing access to the first stopes from the 189 Woah
Hawp Ore Drives, North and South.
Breakthrough into the North Prince Extended ventilation shaft occurred on 11
January, some 4 months later than originally planned. The primary vent fans were
installed during the December quarter.
Completion of the ventilation circuit and the installation of the fans will
allow the introduction of additional development and mining equipment in order
to ramp-up development rates.
Approximately 6,000 tonnes were mined from the 189 Woah Hawp North access, and
stockpiled on the surface. The first lift in the strike drive was completed and
the void successfully filled prior to commencing the second lift.
Process plant construction
Construction of the crushing and gravity recovery circuits of the processing
plant was completed in December 2005, as planned, at a cost of approximately
A$18 million.
This "gravity" circuit allows the largely coarse free gold to be liberated and
collected in concentrate for further separation and smelting.
This first stage of the process plant is planned to be completed in the June
2006 half year with the addition of a leaching circuit.
Commissioning of the processing plant commenced in December 2005 and will
continue into the current quarter. During this time the plant will be run on a
batch basis as grade reconciliation, process tuning and mechanical performance
are monitored.
Prior to construction of the leaching circuit the gold bearing sulphide
concentrate will be stockpiled.
Tailings storage facility
The tailings (fine grain sand) will be deposited in a tailings storage facility
("TSF"). Construction began early in October following review and signoff of the
final engineering design. The new design, approved under a work plan variation,
incorporates current industry best practice and complies with international and
Australian guidelines and principles for world class environmental management
and sustainable development.
Ballarat Goldfields is a member of the Mineral Council of Australia, and is
committed to the implementation of the principles of "Enduring Value", the
industries benchmark for stewardship.
Mine geology and exploration
Diamond drilling continued during the half year at Ballarat East. Drilling was
focused on regional (600 metre strike length) resource definition and stope
delineation.
The drilling continues to intersect gold mineralisation in the targeted zones
identified by the BGF geological model. Visible gold is also repeatedly observed
in these zones giving further confidence in the model. Importantly, the drilling
results published to date are showing a clear indication of higher grades at
depth. BGF is currently undertaking a review of its resource base.
Work began on the exploration programs for Ballarat South, Berringa and Ballarat
West. This included the employment of staff and purchase of drilling equipment.
The company has consolidated its exploration and mining licences from 16 to 4
with the total area under licence remaining the same as it was previously. Two
new applications were made which will add to the portfolio when granted.
Auditor's independence declaration
PricewaterhouseCoopers in Australia are the auditors of Ballarat Goldfields NL.
Their Auditor's independence declaration is set out on page 5 and forms part of
the directors' report for the half year ended 31 December 2005.
The Directors' report is made in accordance with a resolution of the board.
Colin Smith
Chairman
Richard Laufmann
Managing Director
Ballarat
27 February 2006
PricewaterhouseCoopers
Auditors' independence declaration
As lead auditor for the review of Ballarat Goldfields NL for the half-year ended
31 December 2005, I declare that, to the best of my knowledge and belief, there
have been:
a) No contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the review; and
b) No contraventions of any applicable code of professional conduct in
relation to the review.
This declaration is in respect of Ballarat Goldfields NL and the entities it
controlled during the period.
Chris Dodd Melbourne
Partner 27 February 2006
PricewaterhouseCoopers
Consolidated Income Statement
For the half-year ended 31 December 2005
CONSOLIDATED
HALF-YEAR
2005 2004
$ $
-------------------------- -------- --------
Other income 378,866 526,677
Other expenses
Marketing (213,394) (104,282)
Administration (1,126,043) (1,305,405)
Finance costs expense (314,462) (4,281)
Exploration (15,713,965) (5,281,337)
Loss before income tax expense (16,988,998) (6,168,628)
-------------------------- -------- --------
Income tax expense - -
-------------------------- -------- --------
Net loss attributable to members
of Ballarat Goldfields NL (16,988,998) (6,168,628)
-------------------------- -------- --------
Cents Cents
Basic loss per share (1.7) (1.0)
Diluted loss per share (1.7) (1.0)
The above consolidated income statement should be read in conjunction with the
accompanying notes.
Consolidated Balance Sheet
As at 31 December 2005
CONSOLIDATED
31 December 30 June
2005 2005
$ $
---------------------- --------- ---------
CURRENT ASSETS
Cash and cash equivalents 53,906,546 8,937,340
Receivables 1,500,141 520,225
Other 61,040 -
---------------------- --------- ---------
TOTAL CURRENT ASSETS 55,467,727 9,457,565
---------------------- --------- ---------
NON CURRENT ASSETS
Property, plant and equipment 21,444,863 4,911,052
Exploration 1,060,005 874,145
---------------------- --------- ---------
TOTAL NON CURRENT ASSETS 22,504,868 5,785,197
---------------------- --------- ---------
TOTAL ASSETS 77,972,595 15,242,762
---------------------- --------- ---------
CURRENT LIABILITIES
Accounts payable 6,775,232 6,783,589
Interest bearing liabilities 51,431 50,868
Provisions 297,761 215,445
Other 45,140 45,182
---------------------- --------- ---------
TOTAL CURRENT LIABILITIES 7,169,564 7,095,084
---------------------- --------- ---------
NON CURRENT LIABILITIES
Interest bearing liabilities 6,242,178 139,780
Provisions 526,959 379,500
---------------------- --------- ---------
TOTAL NON CURRENT LIABILITIES 6,769,137 519,280
---------------------- --------- ---------
TOTAL LIABILITIES 13,938,701 7,614,364
---------------------- --------- ---------
NET ASSETS 64,033,894 7,628,398
---------------------- --------- ---------
EQUITY
Contributed equity 182,000,217 108,750,280
Reserves 1,313,780 1,169,224
Accumulated losses (119,280,103) (102,291,106)
---------------------- --------- ---------
TOTAL EQUITY 64,033,894 7,628,398
---------------------- ---------- ----------
The above consolidated balance sheet should be read in conjunction with the
accompanying notes.
Consolidated Statement of Changes in Equity
For the half-year ended 31 December 2005
CONSOLIDATED
HALF-YEAR
2005 2004
Note $ $
------------------------------- --------- --------
Total equity at the beginning of the half year 7,628,398 1,580,529
Loss for the half-year (16,988,998) (6,168,628)
------------------------------- ----- --------- --------
Total recognised income and expense for the
year (16,988,998) (6,168,628)
------------------------------- ----- --------- --------
Transactions with equity holders in their capacity as equity holders:
Employee share options 144,556 552,242
Contributions of equity, net of transaction
costs 4 73,249,938 25,474,951
------------------------------- ----- --------- --------
Total equity at the end of the half year 64,033,894 21,439,094
------------------------------- ----- --------- ---------
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes.
Consolidated Cash Flow Statement
For the half-year ended 31 December 2005
CONSOLIDATED
HALF-YEAR
2005 2004
$ $
---------------------------- --------- --------
Cash flows from operating activities
Exploration expenditure (15,216,893) (4,132,114)
Payments to suppliers and employees (inclusive of
goods and services tax) (1,678,492) (982,665)
---------------------------- --------- --------
(16,895,385) (5,114,779)
Interest paid (754,831) -
Interest received 135,487 526,677
---------------------------- --------- --------
Net cash (outflow) from operating activities (17,514,729) (4,588,102)
---------------------------- --------- --------
Cash flows from investing activities
Exploration expenditure - (405,000)
Payments for property, plant and equipment (16,766,004) (642,607)
---------------------------- --------- --------
Net cash (outflow) from investing activities (16,766,004) (1,047,607)
---------------------------- --------- --------
Cash flows from financing activities
Proceeds from issues of shares 77,769,945 27,235,080
Issue costs (4,520,007) (1,752,051)
Proceeds from borrowings 12,000,000 -
Repayment of borrowings (6,000,000) -
---------------------------- --------- ---------
Net cash inflow from financing activities 79,249,938 25,483,029
---------------------------- --------- ---------
Net increase (decrease) in cash held 44,969,206 19,847,321
Cash at the beginning of the half year 8,937,340 1,343,055
---------------------------- --------- ---------
Net cash at the end of the half year 53,906,546 21,190,376
---------------------------- --------- ---------
The above consolidated cash flow statement should be read in conjunction with
the accompanying notes.
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This general purpose financial report for the interim half-year reporting period
ended 31 December 2005 has been prepared in accordance with Accounting Standard
AASB 134 Interim Financial Reporting and the Corporation Act 2001.
This interim financial report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this report is to
be read in conjunction with the annual report for the year ended 30 June 2005
and any public announcements made by Ballarat Goldfields NL during the interim
reporting period in accordance with the continuous disclosure requirements of
the Corporations Act 2001.
(a) Basis of preparation of half-year financial report
The principal accounting policies adopted in the preparation of the financial
report are set out below. The policies have been consistently applied to all the
periods presented, unless otherwise stated.
Application of AASB 1 First-time Adoption of Australian Equivalents to
International Financial Reporting Standards
This interim financial report is the first Ballarat Goldfields NL interim
financial report to be prepared in accordance with AIFRSs. AASB 1 First time
Adoption of Australian Equivalents to International Financial Reporting
Standards has been applied in preparing these financial statements.
Financial statements of Ballarat Goldfields NL until 30 June 2005 have been
prepared in accordance with previous Australian Generally Accepted Accounting
Principles (AGAAP). AGAAP differs in certain respects from AIFRS. When preparing
the Ballarat Goldfields NL interim financial report for the half-year ended 31
December 2005, management has amended certain accounting, valuation and
consolidation methods applied in the previous AGAAP financial statements to
comply with AIFRS. With the exception of financial instruments, the comparative
figures were restated to reflect these adjustments. The Group has taken the
exemption available under AASB 1 to only apply AASB 132 Financial Instruments:
Disclosure and Presentation and AASB 139 Financial Instruments: Recognition and
Measurement from 1 July 2005.
Reconciliations and descriptions of the effect of transition from previous AGAAP
to AIFRSs on the Group's equity and its net income are given in Note 7.
Early adoption of standard
The Group has elected to apply AASB119 Employee Benefits (issued in December
2004) to the reporting periods beginning 1 July 2005. This includes applying
AASB 119 to the comparatives in accordance with AASB 108 Accounting Policies,
Changes in Accounting Estimates and Errors. There was no impact from the
application of AASB 119.
Historical cost convention
These financial statements have been prepared under the historical cost
convention, as modified by the revaluation of available-for-sale financial
assets, financial assets and liabilities including (derivative instruments) at
fair value through profit or loss.
(b) Segment reporting
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different to
those of other business segments. A geographical segment is engaged in providing
products within a particular economic environment and is subject to risks and
returns that are different from those of segments operating in other economic
environments.
(c) Impairment of assets
Assets that have an indefinite useful life are not subject to amortisation and
tested annually for impairment. Depreciable assets that are subject to
amortisation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying value may not be recoverable. An
impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of
an asset's fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash generating units). Prior to the
establishment of a cash generating unit assets are assessed for impairment
against the total project value.
(d) Restoration, rehabilitation and environmental expenditure
Environmental obligations associated with the retirement or disposal of long
lived assets will be recognised when the disturbance occurs and is based on the
extent of damage incurred. The provision is measured as the present value of the
future expenditure and a corresponding rehabilitation asset is also recognised.
On an ongoing basis, the rehabilitation liability will be re-measured in line
with the changes in the time value of money (recognised as an expense in the
statement of financial performance and an increase in the provision), and
additional disturbances will be recognised as additions to a corresponding asset
and rehabilitation liability. The rehabilitation asset will be accounted for in
accordance with the accounting policy applicable to the asset to which it
relates (i.e. Exploration and Evaluation).
(e) Equity-based compensation benefits
Equity-based compensation will be recognised as an expense in respect of the
services received.
Share options granted before 7 November 2002 and/or vested before 1 January 2005
No expense is recognised in respect of these options. The shares are recognised
when the options are exercised and the proceeds received allocated to share
capital.
Share options granted after 7 November 2002 and vested after 1 January 2005
The fair value of options granted is recognised as an employee benefit expense
with a corresponding increase in equity. The fair value is measured at grant
date and recognised over the period during which the employees become
unconditionally entitled to the options.
The fair value at grant date is independently determined using a Black-Scholes
option pricing model that takes into account the exercise price, the term of the
options, the vesting and performance criteria, the impact of dilution, the
non-tradeable nature of the option, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the
risk-free interest rate for the term of the option.
(f) Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of
all entities controlled by Ballarat Goldfields NL as at 31 December 2005 and the
results of all controlled entities for the year then ended. Ballarat Goldfields
NL and its controlled entities together are referred to in this financial report
as the consolidated entity. The effects of all transactions between entities in
the consolidated entity are eliminated in full.
Subsidiaries are all those entities (including special purpose entities) over
which the Group has the power to govern the financial and operating policies,
generally accompanying a shareholding of more than one-half of the voting
rights. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the Group
controls another entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control
ceases.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group (refer to note 1 (h)).
The company has elected to utilise the exemption available under AASB 1 First
Time Adoption of AIFRS AASB 3 Business Combinations to grandfather pre-AIFRS
business combinations.
(g) Exploration and evaluation expenditure
For each area of interest, expenditure incurred in the exploration for and
evaluation of mineral resources shall be expensed as incurred unless the
following conditions are met:
*the company has a right to tenure;
*the company is able to make a reasonable assessment of the existence of
economically recoverable reserves or indicated resources; and
*active and significant operations in the area of interest are continuing.
Expenditure on the acquisition of mining tenements and other such rights are
capitalised when incurred and carried as assets while they remain current.
Each area of interest is reviewed for impairment at each reporting date and
accumulated costs are written off to the income statement to the extent that
they will not be recoverable in the future or are impaired. If it is established
subsequently that economically recoverable reserves or indicated resources exist
in a particular area of interest, resulting in the decision to develop a
commercial mining operation, then in that year the accumulated expenditure
attributable to that area, to the extent that it does not exceed the recoverable
amount of the area concerned, will be transferred to mine development. As such
it will be subsequently amortised against production from that area.
(h) Acquisitions of assets
The purchase method of accounting is used for all acquisitions of assets
regardless of whether equity instruments or other assets are acquired. Cost is
measured as the fair value of the assets given up, shares issued or liabilities
undertaken at the date of acquisition plus incidental costs directly
attributable to the acquisition.
(i) Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the
acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the
item can be measure reliably. All other repairs and maintenance are charged to
the income statement during the financial period in which they are incurred.
Depreciation is applied in respect of all fixed assets excluding freehold land
and is calculated using the straight line method. Capitalised exploration
expenditure is not amortised until production commences. Leased assets are
depreciated over the period of the lease or estimated useful life, whichever is
shorter, using the straight line method. The expected useful lives are as
follows:
Buildings 40 years
Plant and equipment 5 - 15 years
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date.
An asset's carrying amount is written down immediately to its recoverable amount
if the asset's carrying amount is greater than its estimated recoverable amount.
(note 1(c))
Gains and losses on disposals are determined by comparing proceeds with carrying
amounts. These are included in the income statement.
(j) Inventories
Raw materials and stores, work in progress and finished goods are valued at the
lower of cost and net realisable value. Costs comprise direct materials, direct
labour and an appropriate proportion of variable and fixed overhead expenditure
which are assigned to inventory on hand by the method most appropriate to each
particular class of inventory. The majority of costs are assigned to individual
items of stock on the basis of weighted average costs.
During the exploration and development phase, where the cost of extracting the
ore exceeds the likely recoverable amount, inventory is written down to a nil
value.
(k) Hire purchase and finance of non current assets
Where non current assets are acquired by means of hire purchase agreements or
chattel mortgage the cost price of that equipment is established as an asset and
amortised on a straight line basis over its useful life. A corresponding
liability is also established and each hire purchase repayment is allocated
between such liability and interest expense.
(l) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes
in value, and bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities on the balance sheet.
(m) Employee benefits
Wages, salaries and annual leave
Liabilities for wages and salaries and annual leave are recognised, and are
measured at the amounts expected to be paid when the liabilities are settled. No
provision is made for sick leave.
Long Service Leave
A liability for long service leave is recognised, and is measured as the present
value of expected future payments to be made in respect of services provided by
employees up to the reporting date. Consideration is given to expected future
wage and salary levels, experience of employee departures and periods of service
and appropriate discounting of future payments.
(n) Earnings per share
Basic earnings per share
Basic earnings per share is determined by dividing net loss after income tax
attributable to members by the weighted average number of ordinary shares
outstanding during the financial year.
Diluted Earnings per Share
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share by taking into account the after tax effect of interest
and other financing costs associated with dilutive potential ordinary shares and
the weighted average number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary shares.
(o) Trade and other creditors
These amounts represent liabilities for goods and services provided to the
consolidated entity prior to the end of the financial year and which are unpaid.
(p) Receivables
Receivables are recognised as amounts outstanding on various contracts as at
balance date. Settlement of such amounts occurs within the terms of the
contracts and in the case of trade debtors occurs within 30 days of recognition.
Collectibility of receivables is reviewed on an ongoing basis. Debts which are
known to be uncollectible are written off. A provision for doubtful receivable
is established when there is objective evidence that the Group will not be able
to collect all amounts due according to the original terms of receivables. The
amount of the provision is recognised in the income statement.
(q) Interest income recognition
Interest revenue is recognised on an effective interest basis.
(r) Finance costs
Finance costs are recognised as expenses in the period in which they are
incurred. Finance costs include interest on bank overdrafts and short term and
long term borrowings, finance lease charges and certain exchange rate
differences arising from foreign currency borrowings.
(s) Interest bearing liabilities
Convertible instruments that are convertible to ordinary shares at the
discretion of the lender are classified as interest bearing liabilities.
Borrowings are classified as current liabilities unless the group has an
unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
(t) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction from the proceeds. Incremental costs directly
attributable to the issue of new shares or options, are included in the cost of
the acquisition as part of purchase consideration.
NOTE 2. SEGMENT INFORMATION
The consolidated entity operates predominantly in the mineral exploration
industry. Details of the mineral exploration activities are set out in the
Review of Operations. Each company within the consolidated entity operates
within the one geographic area, being Australia.
NOTE 3. DIVIDENDS
The directors do not recommend that a dividend be paid (2004: nil). Since the
end of the previous financial year, no dividend has been declared or paid.
NOTE 4. EQUITY SECURITIES ISSUED
Half-year Half-year
2005 2004 2005 2004
Shares Shares $ $
Issues of ordinary shares
during the half-year
Exercise of options
issued 218,466,302 265,570 31,101,143 22,703
Issue of ordinary
shares, net of costs 150,000,000 298,197,776 42,148,795 25,452,249
--------- --------- --------- --------
368,466,302 298,463,346 73,249,938 25,474,952
--------- --------- --------- ---------
NOTE 5. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The economic entity's bankers have guaranteed $1,082,000 (2004: $379,500) in the
event that the Company is called upon to rehabilitate any of the entity's
exploration sites. Other than as described above, there have been no changes in
the Contingent Liabilities or Contingent Assets during the half-year ended 31
December 2005 from those disclosed in the 2005 Annual Report.
NOTE 6. EVENTS OCCURRING AFTER REPORTING DATE
On 21 February 2006, BGF issued 1,855,999 shares (at 25 cents each) to Investec
Bank (Australia) Limited being a conversion of part of its loan under the terms
of the loan facility agreement.
The financial impacts of these transactions have not been reflected within the
financial statements.
NOTE 7. EXPLANATION OF TRANSISITION TO AUSTRALIAN EQUIVALENTS TO IFRSs
1. Reconciliation of equity reported under previous Australian Generally
Accepted Accounting Principles (AGAAP) to equity under Australian equivalents to
IFRSs (AIFRS)
1 July 2004
Effect of
Previous transition
Notes AGAAP to AIFRS AIFRS
$ $ $
CURRENT ASSETS
Cash and cash equivalents 1,343,055 1,343,055
Receivables 10,734 10,734
Inventory 458 458
TOTAL CURRENT ASSETS 1,354,247 - 1,354,247
NON CURRENT ASSETS
Property, plant and
equipment 392,858 392,858
Exploration 4(b) 10,348,596 (9,443,802) 904,794
TOTAL NON CURRENT ASSETS 10,741,454 (9,443,802) 1,297,652
TOTAL ASSETS 12,095,701 (9,443,802) 2,651,899
CURRENT LIABILITIES
Accounts payable 614,962 614,962
Interest bearing liabilities 29,192 29,192
Provisions 117,336 117,336
Other 45,182 45,182
TOTAL CURRENT LIABILITIES 806,672 - 806,672
NON CURRENT LIABILITIES
Interest bearing liabilities 90,198 90,198
Provisions 174,500 174,500
TOTAL NON CURRENT LIABILITIES 264,698 - 264,698
TOTAL LIABILITIES 1,071,370 - 1,071,370
NET ASSETS 11,024,331 (9,443,802) 1,580,529
EQUITY
Contributed equity 82,317,576 82,317,576
Reserves 4(a) - 520,983 520,983
Accumulated losses 4(a)(b) (71,293,245) (9,964,785) (81,258,030)
TOTAL EQUITY 11,024,331 (9,443,802) 1,580,529
31 December 2004
Effect of
Previous transition to
AGAAP AIFRS AIFRS
Notes $ $ $
CURRENT ASSETS
Cash and cash equivalents 21,190,376 21,190,376
Receivables 362,886 362,886
Inventory - -
TOTAL CURRENT ASSETS 21,553,262 - 21,553,262
NON CURRENT ASSETS
Property, plant and
equipment 1,100,032 1,100,032
Exploration 4(b) 10,753,597 (9,443,802) 1,309,795
TOTAL NON CURRENT ASSETS 11,853,629 (9,443,802) 2,409,827
TOTAL ASSETS 33,406,891 (9,443,802) 23,963,089
CURRENT LIABILITIES
Accounts payable 1,734,156 1,734,156
Interest bearing liabilities 50,868 50,868
Provisions 156,259 156,259
Other 45,182 45,182
TOTAL CURRENT LIABILITIES 1,986,465 - 1,986,465
NON CURRENT LIABILITIES
Interest bearing liabilities 158,030 158,030
Provisions 379,500 379,500
TOTAL NON CURRENT LIABILITIES 537,530 - 537,530
TOTAL LIABILITIES 2,523,995 - 2,523,995
NET ASSETS 30,882,896 (9,443,802) 21,439,094
EQUITY
Contributed equity 107,792,527 107,792,527
Reserves 4(a) - 1,073,225 1,073,225
Accumulated losses 4(a)(b) (76,909,631) (10,517,027) (87,426,658)
TOTAL EQUITY 30,882,896 (9,443,802) 21,439,094
30 June 2005
Effect of
Previous transition to
AGAAP AIFRS AIFRS
Notes $ $ $
CURRENT ASSETS
Cash and cash equivalents 8,937,340 8,937,340
Receivables 520,225 520,225
Inventory - -
TOTAL CURRENT ASSETS 9,457,565 - 9,457,565
NON CURRENT ASSETS
Property, plant
and equipment 4,911,052 4,911,052
Exploration 4(b) 10,317,947 (9,443,802) 874,145
TOTAL NON CURRENT
ASSETS 15,228,999 (9,443,802) 5,785,197
TOTAL ASSETS 24,686,564 (9,443,802) 15,242,762
CURRENT LIABILITIES
Accounts payable 6,783,589 6,783,589
Interest bearing
liabilities 50,868 50,868
Provisions 215,445 215,445
Other 45,182 45,182
TOTAL CURRENT LIABILITIES 7,095,084 - 7,095,084
NON CURRENT LIABILITIES
Interest bearing
liabilities 139,780 139,780
Provisions 379,500 379,500
TOTAL NON CURRENT
LIABILITIES 519,280 - 519,280
TOTAL LIABILITIES 7,614,364 - 7,614,364
NET ASSETS 17,072,200 (9,443,802) 7,628,398
EQUITY
Contributed equity 108,750,280 108,750,280
Reserves 4(a) - 1,169,224 1,169,224
Accumulated losses 4(a)(b) (91,678,080) (10,613,026) (102,291,106)
TOTAL EQUITY 17,072,200 (9,443,802) 7,628,398
2. Reconciliation of profit under previous AGAAP to profit under
Australian equivalents to IFRSs (AIFRS)
31 December 2004
Effect of
Previous transition to
AGAAP AIFRS AIFRS
Note $ $ $
Other income 526,677 526,677
Other expenses
Marketing (104,282) (104,282)
Administration 4(a) (753,163) (552,242) (1,305,405)
Finance costs expense (4,281) (4,281)
Exploration (5,281,337) (5,281,337)
Loss before income
tax expense (5,616,386) (552,242) (6,168,628)
Income tax expense - - -
Net loss attributable
to members
of Ballarat
Goldfields NL (5,616,386) (552,242) (6,168,628)
Total changes in equity
other than those resulting
from transactions
with owners as owners (5,616,386) (552,242) (6,168,628)
30 June 2005
Effect of
Previous transition to
AGAAP AIFRS AIFRS
Note $ $ $
Other income 915,313 915,313
Other expenses
Marketing (199,585) (199,585)
Administration 4(a) (2,629,099) (648,241) (3,277,340)
Finance costs expense (595,000) (595,000)
Exploration (17,876,464) (17,876,464)
Loss before income
tax expense (20,384,835) (648,241) (21,033,076)
Income tax expense - - -
Net loss attributable
to members
of Ballarat
Goldfields NL (20,384,835) (648,241) (21,033,076)
Total changes in
equity other than
those resulting
from transactions
with owners as owners (20,384,835) (648,241) (21,033,076)
3. Reconciliation of cash flow statement for the year ended 30 June 2005
The adoption of AIFRSs has not resulted in any material adjustments to the cash
flow statement.
4. Notes to the reconciliations
(a) Share-based Payment
Under AASB 2 Share-based Payment from 1 July 2004 the Group is required to
recognise an expense for those options that were issued to employees after 7
November 2002. The effect of this is:
i. At 1 July 2004
For the Group there has been a decrease in retained earnings of $520,983 and a
corresponding increase in reserves.
ii. At 31 December 2004
For the Group there has been a decrease in retained earnings of $1,073,225 and a
corresponding increase in reserves.
iii. At 30 June 2005
For the Group there has been a decrease in retained earnings of $1,169,224 and a
corresponding increase in reserves.
iv. For the half-year ended 31 December 2004
For the Group there has been an increase in employee benefits expense of
$552,242.
v. For the year ended 30 June 2005
For the Group there has been an increase in employee benefits expense of
$648,241.
(b) Exploration and evaluation expenditure
The transition to AIFRS resulted in a change to the Group's Exploration and
evaluation expenditure accounting policy (refer note 1(g)) so as to be in
accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, from
1 July 2004.
Given the parameters set in AASB 6, the company now capitalises exploration and
evaluation expenditure only when they have reserves or indicated resources.
Under the previous AGAAP policy, exploration and evaluation expenditure was
capitalised at an earlier stage in some instances. As at transition date and at
31 December 2005 there are no reserves or indicated resources reported by the
company.
As a consequence of this change, previously capitalised exploration expenditure
totaling $9,443,802 relating primarily to the Ballarat East area was written
off, at 1 July 2004. This has resulted in a corresponding increase in
accumulated losses of $9,443,802.
Directors' Declaration
In the directors' opinion:
(a) the financial statements and notes set out on pages 6 to 17 are in
accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001
and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of the consolidated entity's financial
position as at 31 December 2005 and of its performance, as represented
by the results of its operations, changes in equity and its cash flows,
for the half-year ended on that date; and
(b) there are reasonable grounds to believe that Ballarat Goldfields NL will be
able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the directors.
Richard Laufmann
Managing Director
Ballarat
27 February 2006
--------------------------------------------------------------------------------
PricewaterhouseCoopers
Independent review report to the members of
Ballarat Goldfields NL
Matters relating to the electronic presentation of the reviewed financial report
This review report relates to the financial report of Ballarat Goldfields NL
(the Company) for the half-year ended 31 December 2005 included on Ballarat
Goldfields NL 's web site. The Company's directors are responsible for the
integrity of the Ballarat Goldfields NL web site. We have not been engaged to
report on the integrity of this web site. The review report refers only to the
financial report identified below. It does not provide an opinion on any other
information which may have been hyperlinked to/from the financial report. If
users of this report are concerned with the inherent risks arising from
electronic data communications they are advised to refer to the hard copy of the
reviewed financial report to confirm the information included in the reviewed
financial report presented on this web site.
Statement
Based on our review, which is not an audit, we have not become aware of any
matter that makes us believe that the financial report of Ballarat Goldfields
NL:
* does not give a true and fair view, as required by the
Corporations Act 2001 in Australia, of the financial position of the Ballarat
Goldfields NL Group (defined below) as at 31 December 2005 and of its
performance for the half-year ended on that date, and
* is not presented in accordance with the Corporations Act 2001,
Accounting Standard AASB 134: Interim Financial Reporting and other mandatory
financial reporting requirements in Australia, and the Corporations Regulations
2001.
This statement must be read in conjunction with the rest of our review report.
Scope
The financial report and directors' responsibility
The financial report comprises the balance sheet, income statement, statement of
changes in equity, cash flow statement, accompanying notes to the financial
statements, and the directors' declaration for the Ballarat Goldfields NL Group
(the consolidated entity), for the half-year ended 31 December 2005. The
consolidated entity comprises both Ballarat Goldfields NL (the company) and the
entities it controlled during that half-year.
The directors of the company are responsible for the preparation and true and
fair presentation of the financial report in accordance with the Corporations
Act 2001. This includes responsibility for the maintenance of adequate
accounting records and internal controls that are designed to prevent and detect
fraud and error, and for the accounting policies and accounting estimates
inherent in the financial report.
Review approach
We conducted an independent review in order for the company to lodge the
financial report with the Australian Securities and Investments Commission. Our
review was conducted in accordance with Australian Auditing Standards applicable
to review engagements. For further explanation of a review, visit our website
http://www.pwc.com/au/financialstatementaudit.
We performed procedures in order to state whether, on the basis of the
procedures described, anything has come to our attention that would indicate
that the financial report does not present fairly, in accordance with the
Corporations Act 2001, Accounting Standard AASB 134: Interim Financial Reporting
and other mandatory financial reporting requirements in Australia, a view which
is consistent with our understanding of the consolidated entity's financial
position, and its performance as represented by the results of its operations
and cash flows.
We formed our statement on the basis of the review procedures performed, which
included:
* inquiries of company personnel/the responsible entity's
personnel, and
* analytical procedures applied to financial data.
Our procedures include reading the other information included with the financial
report to determine whether it contains any material inconsistencies with the
financial report.
These procedures do not provide all the evidence that would be required in an
audit, thus the level of assurance provided is less than that given in an audit.
We have not performed an audit, and accordingly, we do not express an audit
opinion.
While we considered the effectiveness of management's internal controls over
financial reporting when determining the nature and extent of our procedures,
our review was not designed to provide assurance on internal controls.
Our review did not involve an analysis of the prudence of business decisions
made by directors or management.
Independence
In conducting our review, we followed applicable independence
requirements of Australian professional ethical pronouncements and the
Corporations Act 2001.
PricewaterhouseCoopers
Chris Dodd Melbourne
Partner 27 February 2006
Directors
* Colin Smith (Chairman)
* Richard Laufmann (Managing Director)
* Mike Etheridge
* Alister Maitland
Secretary
* Amber Rivamonte
Registered Office
10 Woolshed Gully Drive
Mt Clear Victoria 3350 Australia
Tel: 03 5327 1111 Fax: 03 5331 7927
www.ballarat-goldfields.com.au
Share Registry
Computershare Investor Services Pty Limited
GPO Box 2975 Melbourne Victoria 3000 Australia
Investor Enquires Tel: 1300 850 505
Tel: 03 9415 5000 Fax: 03 9473 2500
www.computershare.com
Auditor
PricewaterhouseCoopers Chartered Accountants
GPO Box 1331L Melbourne Victoria 3001 Australia
Bankers
Investec Bank (Australia) Limited
Level 31 The Chifley Tower 2 Chifley Square
Sydney New South Wales 2000 Australia
Australian and New Zealand Banking Group Limited
927 Sturt Street Ballarat Victoria 3350 Australia
Lawyers
Baker & McKenzie Solicitors
Rialto Level 39 525 Collins Street
Melbourne Victoria 3000 Australia
Nomad
RFC Corporate Finance Ltd
Level 14 19-31 Pitt Street Sydney New South Wales 2000 Australia
UK Broker
Numis Securities Ltd
Cheapside House 138 Cheapside
London EX2V 6LH United Kingdom
UK Share Registry
Computershare Investor Services PLC
PO Box 82 The Pavilions Bridgewater Road
Bristol BS99 7NH United Kingdom
Stock Exchange Listing
Ballarat Goldfields NL is listed on the Australian Stock Exchange and
the Alternative Investment Market (AIM) of the London Stock Exchange
Stock Exchange Codes
ASX and AIM Code for Shares: BGF
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR IFFELFVIDFIR
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