TIDMNGL
RNS Number : 3597Y
Norseman Gold PLC
29 February 2012
Norseman Gold plc / Epic: NGL / Index: AIM & ASX / Sector:
Mining & Exploration
29 February 2012
NORSEMAN GOLD PLC
('Norseman Gold' or 'the Company')
Interim Report for the half year ended 31 December 2011
NORSEMAN GOLD PLC
Appendix 4D ASX Listing Rule 4.2A.3
Results for Announcement to the Market
Unaudited Period Unaudited Change
ended 31 December Period ended
2011 AUD$'000 31 December
2010 AUD$'000
Group revenue from continuing operations 32,453 30,150 7.6%
Loss before tax from continuing
operations (34,944) (7,118) 390%
Loss after tax attributable to members
of Norseman Gold plc (41,804) (803) 5,106%
Note: The loss before tax from continuing operations includes a
charge of $18m relating to impairment of mine properties in
production.
Dividends
No Dividends have been declared or paid.
Net tangible assets per security
Unaudited As Unaudited
at 31 December As at
2011 31 December
2010
Cents / Share Cents / Share
Net tangible assets per security 14.6 37.2
1. Details of entities over which control has been gained or lost during the period.
None
2. Details of individual and total dividends or distributions
and dividend or distribution payments. The details must include the
date on which each dividend or distribution is payable, and (if
known) the amount per security of foreign sourced dividend or
distribution.
Not applicable - no dividends have been declared or paid
3. Details of any dividend or distribution reinvestment plans in
operation and the last date for the receipt of an election notice
for participation in any dividend or distribution reinvestment
plan.
Not applicable
4. Details of associates and joint venture entities including
the name of the associate or joint venture entity and details of
the reporting entity's percentage holding in each of these entities
and - where material to an understanding of the report - aggregate
share of profits (losses) of these entities, details of
contributions to net profit for each of these entities, and with
comparative figures for each of these disclosures for the previous
corresponding period.
Not applicable
5. The financial report has been prepared using the historical
cost convention and in accordance with International Financial
Reporting Standards ("IFRS").
NORSEMAN GOLD PLC
CHAIRMAN'S STATEMENT
The interim financial results of the Group represent the results
of the Norseman Operations for the period 1 July 2011 to 31
December 2011. Since the period end, Norseman Gold has undergone
significant structural changes to strengthen its balance sheet and
improve its future production profile and financial performance.
This restructuring process has seen Australian resource specialist
Tulla Resources Group Pty Ltd ('Tulla') assume management and
operational control of the Norseman Gold Project with a view to
lowering operating costs, producing a consistent 100,000 ounces per
annum within two years and increasing the project's current
resource inventory of 3.4 million ounces of gold at an average
grade of 4.7 g/t through mine and regional exploration. In
addition, with Tulla's assistance, the Group is focussed on
strengthening its Board and key management team to facilitate the
onward development of the Norseman Gold Project, with the Group
retaining ownership of the mine and equipment and overseeing
manager performance.
Tulla, through its associated company, L2 Project Management -
Norseman Pty Ltd ('L2 PM'), is currently developing a defined
strategy and mine plan for three years based on profitability,
which we hope to update shareholders on in the next quarter report
due by the end of April 2012. Its initial forward plan outlined in
the announcement dated 16 February 2012, indicated that it believed
a relatively early turnaround in operations was achievable. The
Norseman Gold Project's ability to generate significant revenues
has been demonstrated by its previous performance, when in 2009, at
a time when only two of the mines were operational, a total of c.
80,000 ounces of gold was produced. In order to rapidly increase
the financial performance of the project and husband cash reserves,
the decision was made to put the underperforming Bullen and OK
mines on care and maintenance until the review has been completed.
This does not mean the Group has abandoned these mines, but
provides it with the flexibility to fully re-assess the mine plan
and ensure it can be optimised while preventing the drain on cash
reserves created by under-performing mines.
As part of the restructuring agreement, and underlining its
commitment to the success of the Norseman Gold Project, Tulla
agreed to subscribe for A$10 million (approximately GBP6.8 million)
of convertible loan notes in Norseman Gold. The funds raised will
be utilised for working capital, completing the forward planning
and reviewing and implementing the strategy to lower costs and
improve the production profile. Further details relating to this
agreement can be found in the 'Funding' section of this report.
As anticipated, due to the underperformance of some of the
Group's assets, Norseman Gold is reporting production of 22,289
ounces of gold, which generated a loss after tax of AUD$41.8
million during the six month period to 31 December 2011. The
average gold price achieved during the six months period was
AUD$1,607 per ounce.
During the half year, the Group continued to invest in the
Norseman Gold Project, expending AUD$12.3m in capital investment,
including AUD$9.1m in mine development, AUD$2.0m in exploration
activities, and AUD$1.2m in plant, equipment and mine
infrastructure.
Cash balances at the end of the period ended 31 December 2011
totalled A$16.6 million (A$15.6 million excluding bullion).
Approximately A$6.1 million of this cash balance is committed to
cash-backed environmental bonds and the Group estimates that it had
approximately 3,800 ounces of gold sitting in stockpiles. It should
be noted that the Group's cash position will strengthen
substantially on receipt of the proceeds of the agreed Equity
Placing and Convertible Loan Note Subscription. Following receipt
of these proceeds, Norseman Gold will have cash resources of
approximately A$22.3 million (approximately GBP15.17 million).
Further details regarding the operational and corporate
restructuring process are below.
Production Outlook and Resource & Reserve Inventory
The Board and Tulla are confident that they can improve the
production profile at the Norseman Gold Project, which has been
underlined by their commitment of capital. Tulla and Norseman Gold
are focussed on implementing a comprehensive forward three year
mine plan and a growth strategy to generate value for shareholders.
This is currently being prepared although the main aims are to:
-- reduce costs across all areas of the mine in order to fit forward cashflows
-- focus on profitable production areas of the Norseman Gold
Project to target a quick turnaround
-- implement a mine plan based on profitability
-- increase the resources base through defined mine and regional
exploration programmes - current resource stands at 3.4 million
ounces of gold at an average grade of 4.7 g/t
-- re-structure the Board of Directors with highly experienced
technical professionals to ensure strategy implementation -
potentially with experience of operations at the Norseman Gold
Project
-- target 100,000 ounce consistent organic production within two
years and increase this thereafter while remaining focussed on
profitability
-- re-establish extensive regional exploration on the highly
prospective Norseman Gold Project field.
Quoted resources and reserves are as per the Group's market
release of 28 July 2011 and as tabulated below.
TABLE 1: March 2011 Open Pit & Underground Resource and
Reserve Summary
Summary for Open Pit - 31 March Underground - 31 Total
Norseman 2011 March 2011
---------------- ----------------------------- ------------------------------- -------------------------------
Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces
g/t gold g/t gold g/t gold
gold gold gold
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Reserve -
Proved 13,000 1.8 760 320,000 8.3 85,000 330,000 8.5 90,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Reserve -
Probable 1,000,000 3.1 99,000 990,000 7.2 230,000 2,000,000 5.1 330,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Total Reserve 1,000,000 3.1 100,000 1,300,000 7.7 320,000 2,300,000 5.7 420,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Resource
- Measured 5,000,000 0.7 110,000 580,000 12.3 230,000 5,600,000 1.9 340,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Resource
- Indicated 4,100,000 2.7 360,000 2,600,000 9.0 750,000 6,700,000 5.1 1,100,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Resource
- Inferred 3,200,000 2.8 290,000 6,900,000 7.7 1,700,000 10,000,000 6.2 2,000,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Total Resource 12,000,000 1.9 760,000 10,000,000 8.3 2,700,000 22,000,000 4.7 3,400,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Notes:
1. As is required the Resources and Reserves are calculated and
reported in accordance with the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves, The JORC
Code, 2004 Edition.
2. Resources are inclusive of reserves.
3. Resources and reserves are quoted to two significant figures
so inconsistencies may exist within the table.
Competent Persons - Consent for Release
The information in this report that relates to Exploration
Results, Mineral Resources and Ore Reserves is based on data
generated by employees of Central Norseman Gold Corporation Limited
who have the relevant experience and qualifications to qualify as
competent persons.
The parts of this report that relate to Exploration Results,
Mineral Resources and Ore Reserves were compiled by the Principal
Mining Engineer, Russell McBeath, using that data. He is a Member
of the Australasian Institute of Mining and Metallurgy and has
sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity which they are undertaking to qualify as a Competent
Person as defined in the 2004 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves". He has consented to the inclusion in the report of the
matters based on this information in the form and context in which
it appears.
Significant results for drill-hole intercepts contained in this
report are considered significant because the grade by width total
is equal to or greater than 5.0 gram metres per tonne. That is if
the intercept is 1.0 g/t gold over 5.0 m, 5.0 g/t gold over 1.0 m,
50 g/t gold over 0.1 m etc it is considered significant.
Corporate Update
The Group has initiated a corporate restructuring process aimed
at strengthening Norseman Gold's board and key management team. I
joined the Company on 25 October 2011 and took over as Chairman
following Mr. Pendal's departure. Mr. Pendal, who had been Chairman
since 2007, was up for re-election at the Annual General Meeting by
rotation but chose not to be re-nominated. Mr. Peter Bilbe also
resigned from the Board for personal reasons during the period.
Subsequent to the period end, Mr. Barry Cahill stepped down as
Managing Director and also resigned from the Board of the Company
and its subsidiaries. Mr. Kelvin May, Company Secretary, has been
appointed to the Board as an interim measure while technical
directors are sourced with the assistance of Tulla.
The Company appointed a new Nominated Adviser and Joint Broker,
Northland Capital Partners Limited, during the period.
Following the announcement of 16 February 2011, Norseman Gold
has entered into an agreement with Australian resource specialist
Tulla. Established in the early 1990s, Tulla is the Maloney
family's private investment group based in Sydney. The company has
had a long-standing involvement in the resources and related
services and transport industries including investments in: TSX
listed THEMAC Resources, which owns 100% of the Copper Flat
Project, a porphyry copper-molybdenum-gold-silver project in
south-central New Mexico, USA; ASX listed Altona Mining, a copper
miner in Finland and which is advancing a major copper development
project in Queensland, Australia; and ASX listed Queensland Mining
Corporation, a copper gold play, concentrating its exploration and
development activities in the Cloncurry region of north west
Queensland.
The Maloney family previously controlled ASX listed The MAC
Services Group Limited (MSL). MSL developed, owned and operated
high quality, large scale, integrated mining accommodation
facilities and ancillary services which serviced the needs of mine
owners, contracted mining service providers and other essential
contractors working in remote and regional areas on major energy
and resource projects. MSL was subsequently taken over by Oil
States International Inc (NYSE:OIS) in December 2010 for
approximately A$650 million. The Maloney family owned approximately
52% of MSL at the time of the takeover.
Funding
The Company has entered into an agreement whereby Tulla will
subscribe for A$10 million (approximately GBP6.8 million) of
secured convertible loan notes (the "Convertible Loan Notes")
("Convertible Loan Note Subscription"). Tranche 1 of A$3.5 million
(approximately GBP2.38 million) has been issued and Tranche 2 of
A$6.5 million (approximately GBP4.42 million) will be issued
following the completion of the security arrangements as detailed
below. The security arrangements were to have been completed within
5 business days or the agreement may be terminated by Tulla with
immediate effect. Although these arrangements have not been
completed within the stipulated 5 days, Tulla have not given any
indication that they intend terminating the agreement, and the
security arrangements are close to being finalised. An additional
A$3 million (approximately GBP2.04 million) ("the Equity Placing")
is being raised by way of a conditional placing of up to 50,000,000
new ordinary shares of GBP0.0125 each in the capital of the Company
(the "Placing Shares") at a price of A$0.06 (approximately 4p) per
ordinary share. The Company has entered into an agreement with an
Australian Broker to manage the Equity Placing. The Equity Placing
is conditional on the lodgement of a prospectus for the purposes of
section 708A(11) of the Australian Corporations Act to remove any
secondary trading restrictions on the sale of securities.
The combined proceeds of the Equity Placing and the Convertible
Loan Note Subscription will amount to approximately A$13 million
(approximately GBP8.84 million), before expenses, and will provide
additional working capital for the Company. Following receipt of
these proceeds, Norseman Gold will have cash resources of
approximately A$22.3 million (approximately GBP15.17 million).
The funds raised will be utilised for working capital, complete
the forward planning and review and to implement the strategy to
lower costs and improve the production profile.
The Convertible Loan Notes will bear interest at a rate of 10%
per annum payable quarterly in arrears (with the first payment due
on 31 March 2012), have a duration of 36 months from the date of
issue, be convertible by the holder into ordinary shares of
GBP0.0125 each in the capital of the Company ("Ordinary Shares")
("Conversion Shares") at a price of 6 pence per ordinary share, and
carry a share purchase warrant ("Warrant") entitling Tulla to
acquire a further Ordinary Share at a price of 12 pence per
ordinary share for every Conversion Share (calculated by reference
to the nominal amount of the Convertible Loan Notes) at any time
within 36 months from the date of issue of the Convertible Loan
Notes. It is anticipated that the Convertible Loan Notes will be
issued prior to 31 March 2012 and will not be admitted to trading
on any public market. The Convertible Loan Notes and Warrants are
fully transferable.
The conversion rights applicable to the Convertible Loan Notes
and the grant and potential exercise of Warrants are conditional on
receipt of shareholder approval at an Extraordinary General Meeting
which is expected to take place on or before 31 March 2012. If such
approvals and any necessary waivers from ASX (or failing such
waivers, further shareholder approvals) are not obtained, the
interest rate on the Convertible Loan Notes will increase to 20%
per annum from the advance date and each Convertible Loan Note
holder will be entitled to require redemption of his Convertible
Loan Notes at any time after 31 March 2012.
The Convertible Loan Notes will be secured by a first ranking
mortgage over certain exploration tenements, second ranking
mortgage over certain mining leases and a second ranking general
security agreement over all other assets relating to the Norseman
Gold Project, each granted by the Company's subsidiary, Central
Norseman Gold Corporation Limited ("CNGC"). The securities will
rank behind the security granted to (and subject to a priority deed
with) EXP T1 Ltd, a subsidiary of RK Mine Finance Trust 1, a member
of the Red Kite group of funds, as announced on 4 July 2011.
The existing convertible loan note holders have acknowledged the
new Convertible Loan Notes and inclusion of Tulla as part of the
security arrangements over the Norseman Gold Project. The second
ranking mortgage over certain mining leases and a second ranking
general security agreement over all other assets relating to the
Norseman Gold Project granted to the Convertible Loan Note holder
ranks equally with the existing convertible loan note holders.
EXP T1 Ltd has agreed to a standstill arrangement in relation to
facility agreement between CNGC and the Red Kite group dated 1 July
2011 ("Facility Agreement") and will not enforce any rights which
may arise under the Facility Agreement for a period of 3 months
from 14 February 2012 unless any other security holder or creditor
calls an event of default. In addition, EXP T1 Ltd will receive a
capital repayment of A$500,000 (approximately GBP340,136) on 30
June 2012, defer capital repayments for July and August 2012 with
these amounts to be amortised over the remaining 10 months of the
loan, will be issued 10,000,000 ordinary shares of GBP0.0125 each
in the capital of the Company issued without charge at a deemed
issue price of A$0.06 (approximately 4p) per ordinary share and
3,000,000 warrants on the same terms and conditions for the
Warrants to be issued to Tulla being at a price of 12 pence per
ordinary share at any time within 36 months from the date of issue
of the Convertible Loan Notes, subject to shareholder approval.
Subject to Shareholder approval, the Company will issue a total
of 35 million warrants: 5 million to David Steinepreis, Chairman of
the Company; 10 million to Ascent Capital Holdings Pty Ltd, a
company controlled by entities associated with Gary Steinepreis and
David Steinepreis; and 20 million to L2 PM, on the same terms and
conditions for the Warrants to be issued to Tulla being at a price
of 12 pence per ordinary share at any time within 36 months from
the date of issue of the Convertible Loan Notes.
It is also proposed that, subject to shareholder approval at the
Extraordinary General Meeting to be held on or before 31 March 2012
and in accordance with the ASX Listing Rules, that I (David
Steinepreis) and Ascent Capital Holdings Pty Ltd, or our nominees,
be provided the opportunity to subscribe for up to 10,000,000 new
ordinary shares of GBP0.0125 each in the capital of the Company at
a price of A$0.06 per share to raise A$600,000 on the same terms
and conditions as the Equity Placing.
David Steinepreis
Chairman
29 February 2012
Responsibility Statement
The Directors confirm that to the best of their knowledge the
interim financial information for the six months ended 31 December
2011, which has been prepared in accordance with the applicable set
of accounting standards, gives a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group as
required by DTR 4.2.4 R and the Chairman's Statement includes a
fair review of the information required by DTR 4.2.7 R and DTR
4.2.8R.
By order of the board
David Steinepreis
Chairman
29 February 2012
NORSEMAN GOLD PLC
INDEPENDENT REVIEW REPORT TO NORSEMAN GOLD PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 December 2011 which comprises group statement
of comprehensive income, group statement of changes in equity,
group balance sheet, group cash flow statement and the related
explanatory notes. We have read the other information contained in
the half-yearly financial report and considered whether it contains
any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM Rules For Companies.
As disclosed in note 1.1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, Interim
Financial Reporting, as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, Review of
Interim Financial Information Performed by the IndependentAuditor
of the Entity, issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
December 2011 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the AIM Rules For Companies.
Emphasis of matter - Going concern
In forming our conclusion on the financial statements, which is
not qualified, we have considered the adequacy of the disclosure
made in note 1.2 to the financial statements concerning the Group's
ability to continue as a going concern. The Group incurred a loss
of AUD$41,803,938 during the period ended 31 December 2011, had
lower than expected production levels throughout the period, and
following the closure of the OK and Bullen mines and engagement of
a management company has been unable to develop accurate medium to
long term production and cash flow forecasts. These conditions,
along with other matters explained in note 1.2 to the financial
statements, indicate the existence of a material uncertainty which
may cast significant doubt about the Group's ability to continue as
a going concern. The financial statements do not include the
adjustments that would result if the Group was unable to continue
as a going concern.
UHY Hacker Young LLP
29 February 2012
Interim Financial Information of Norseman Gold plc
The following interim financial information of Norseman Gold plc
is for the period from 1 July 2011 to 31 December 2011. The
financial information was approved by the Directors on 29 February
2012.
NORSEMAN GOLD PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2011
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
Continuing operations AUD$ AUD$ AUD$
Group revenue 32,452,823 30,150,409 65,933,643
Cost of sales (39,714,001) (29,653,503) (63,596,829)
Amortisation (2,049,098) (1,633,291) (3,577,223)
------------- ------------- -------------
Gross loss (9,310,276) (1,136,385) (1,240,409)
Other operating income 1,184,329 956,325 2,531,309
Administrative expenses before
depreciation and amortisation,
exploration write off and
provision for rehabilitation
and charge for share-based
payments (3,425,311) (3,377,489) (5,561,760)
Exploration write off and
provision for rehabilitation - - (93,189)
Depreciation and amortisation (4,041,146) (3,953,204) (8,053,316)
Share-based payments (722,477) - (475,612)
--------------------------------- ------------- ------------- -------------
Total administrative expenses (8,188,934) (7,330,693) (14,183,877)
------------- ------------- -------------
Group operating loss (16,314,881) (7,510,753) (12,892,977)
Impairment of mine properties
in production (18,142,722) - -
Impairment of goodwill - - (15,000,000)
Interest receivable 239,294 398,042 695,973
Interest payable (725,946) (5,086) (6,380)
------------- ------------- -------------
Loss before taxation (34,944,255) (7,117,797) (27,203,384)
Taxation (6,859,683) 6,314,998 5,402,459
Loss for the period (41,803,938) (802,799) (21,800,925)
============= ============= =============
Total comprehensive income
for the period attributable
to equity holders of the
Company (41,803,938) (802,799) (21,800,925)
============= ============= =============
Loss per share (cents)
Basic and diluted (18.3) (0.4) (10.9)
NORSEMAN GOLD PLC
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2011
Foreign
Share Share Currency Equity Retained Total
Capital Premium Reserve Reserve Losses Equity
AUD$ AUD$ AUD$ AUD$ AUD$ AUD$
================ =========== ========= ========= ================ ============== ======== ========
Unaudited Period ended 31 December 2011
========================================================= ========== ============== ==================
Balance at 1
July
2011 5,865,432 119,059,696 - 475,612 (42,290,029) 83,110,711
================ =========== ==================== ==== ========== ============== ==================
Net loss for
the
period - - - - (41,803,938) (41,803,938)
================ ----------- -------------------- ---- ---------- -------------- ------------------
Total
comprehensive
income for the
period - - - - (41,803,938) (41,803,938)
================ =========== ==================== ==== ========== ============== ==================
Share issues 2,664,585 7,432,550 - - - 10,097,135
================ =========== ==================== ==== ========== ============== ==================
Share based
expense - - - 722,477 - 722,477
================ =========== ==================== ==== ========== ============== ==================
Convertible
loan
note equity
element - - - 235,482 - 235,482
================ =========== ==================== ==== ========== ============== ==================
Balance at 31
December
2011 8,530,017 126,492,246 - 1,433,571 (84,093,967) 52,361,867
================ =========== ==================== ==== ========== ============== ==================
Unaudited Period ended 31 December 2010
=========================================================================================================
Balance at 1
July
2010 4,905,650 87,292,058 - - (20,489,104) 71,708,604
================ =========== ==================== ==== ========== ============== ==================
Net loss for
the
period - - - - (802,799) (802,799)
================ ----------- -------------------- ---- ---------- -------------- ------------------
Total
comprehensive
income for the
period - - - - (802,799) (802,799)
================ =========== ==================== ==== ========== ============== ==================
Share issues 513,982 17,139,057 - - - 17,653,039
================ =========== ==================== ==== ========== ============== ==================
Balance at 31
December
2010 5,419,632 104,431,115 - - (21,291,903) 88,558,844
================ =========== ==================== ==== ========== ============== ==================
Audited Year ended 30 June 2011
=========================================================================================================
Balance at 1
July
2010 4,905,650 87,292,058 - - (20,489,104) 71,708,604
================ =========== ==================== ==== ========== ============== ==================
Net loss for
the
period - - - - (21,800,925) (21,800,925)
================ =========== ==================== ==== ========== ============== ==================
Total
comprehensive
income for (21,800,925)
the period - - - - (21,800,925)
================ =========== ==================== ==== ========== ============== ==================
Share issues 959,782 31,767,638 - - - 32,727,420
================ =========== ==================== ==== ========== ============== ==================
Share based
expenses - - - 475,612 - 475,612
================ =========== ==================== ==== ========== ============== ==================
Balance at 30
June
2011 5,865,432 119,059,696 - 475,612 (42,290,029) 83,110,711
================ =========== ==================== ==== ========== ============== ==================
NORSEMAN GOLD PLC
GROUP BALANCE SHEET
AS AT 31 DECEMBER 2011
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
Notes AUD$ AUD$ AUD$
ASSETS
Non-Current Assets
Property, plant & equipment 4 26,555,955 30,280,478 29,387,665
Mine properties in production
phase 5 39,153,524 34,585,297 50,254,012
Exploration & evaluation
expenditure 6 18,403,453 17,694,180 16,422,085
Goodwill 7 - 15,000,000 -
Deferred tax asset - 7,772,222 6,859,683
------------- ------------- -------------
84,112,932 105,332,177 102,923,445
------------- ------------- -------------
Current Assets
Trade and other receivables 4,482,730 3,911,391 4,316,518
Inventories 8 6,921,762 6,570,060 7,068,762
Cash at bank and in hand 9 15,571,230 15,576,334 10,502,472
------------- ------------- -------------
26,975,722 26,057,785 21,887,752
------------- ------------- -------------
Total Assets 111,088,654 131,389,962 124,811,197
------------- ------------- -------------
LIABILITIES
Current Liabilities
Trade and other payables 10 18,059,005 19,386,046 17,846,833
Provisions 11 2,928,728 3,010,735 2,536,288
Interest-bearing loans
and borrowings 12 13,476,703 6,391,802 9,501,829
------------- ------------- -------------
34,464,436 28,788,583 29,884,950
------------- ------------- -------------
Non-Current Liabilities
Provisions 11 6,459,008 6,420,364 6,501,637
Interest-bearing loans
and borrowings 12 17,803,344 7,622,171 5,313,899
24,262,352 14,042,535 11,815,536
------------- ------------- -------------
Total Liabilities 58,726,788 42,831,118 41,700,486
------------- ------------- -------------
Net Assets 52,361,866 88,558,844 83,110,711
============= ============= =============
EQUITY
Capital and Reserves
Share capital 13 8,530,017 5,419,632 5,865,432
Share premium account 126,492,246 104,431,115 119,059,696
Equity reserve 14 1,433,571 - 475,612
Retained losses (84,093,968) (21,291,903) (42,290,029)
------------- ------------- -------------
Shareholders' Equity 52,361,866 88,558,844 83,110,711
============= ============= =============
NORSEMAN GOLD PLC
GROUP CASH FLOW STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2011
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
Notes AUD$ AUD$ AUD$
Net cash (outflow)/inflow
from operating activities 17 (8,959,390) 4,218,887 2,821,828
------------- ----------------- -------------
Investing activities
Funds used in mine properties (9,091,333) (8,586,738) (22,065,392)
Funds used in exploration
& production (1,981,368) (4,899,319) (7,874,311)
Payments to purchase plant
and equipment (1,209,435) (7,977,355) (11,292,098)
Interest received 239,294 479,228 695,972
Interest payable (725,946) (5,086) (6,380)
------------- ----------------- -------------
Net cash used in investing
activities (12,768,788) (20,989,270) (40,542,209)
------------- ----------------- -------------
Financing activities
Cash proceeds from issue of
shares 10,658,341 18,512,123 34,560,911
Equipment finance leases (2,516,905) 1,056,258 (1,641,987)
Share issue costs (561,206) (859,084) (1,833,491)
Cash proceeds from debt financing 19,216,706 - 3,500,000
Net cash from financing activities 26,796,936 18,709,297 34,585,433
------------- ----------------- -------------
Increase / (Decrease) in cash
and cash equivalents 5,068,758 1,938,914 (3,134,948)
Cash and cash equivalents
at beginning of period 10,502,472 13,637,420 13,637,420
Cash and cash equivalents
at end of period 15,571,230 15,576,334 10,502,472
============= ================= =============
NORSEMAN GOLD PLC
NOTES TO THE FINANCIAL INFORMATION
FOR THE PERIOD ENDED 31 DECEMBER 2011
1. Accounting policies
The principal accounting policies applied in the preparation of
financial information are set out below. These policies have been
consistently applied to all the periods presented, unless otherwise
stated below.
1.1 Basis of preparation
This interim report, which incorporates the financial
information of the Company and its subsidiary undertakings ("the
Group"), has been prepared using the historical cost convention and
in accordance with International Financial Reporting Standards
("IFRS"), including IAS 34 'Interim Financial Reporting' and IFRS 6
'Exploration for and Evaluation of Mineral Resources', as adopted
by the European Union ("EU").
These interim results for the six months ended 31 December 2011
are unaudited and do not constitute statutory accounts as defined
in section 434 of the Companies Act 2006. They have been prepared
using accounting bases and policies consistent with those used in
the preparation of the financial statements of the Company and the
Group for the year ended 30 June 2011 and those to be used for the
year ending 30 June 2012. The financial statements for the year
ended 30 June 2011 have been delivered to the Registrar of
Companies and the auditors' report on those financial statements
was unqualified and did not contain a statement made under Section
498(2) or Section 498(3) of the Companies Act 2006.
1.2 Going Concern
The Group incurred an operating loss of AUD$16,314,881 and a net
loss of AUD$41,803,938 (including a substantial provision for asset
impairment) for the six months, which follows an operating loss of
AUD$12,892,977 and net loss of AUD$21,800,925 for the full
financial year ended 30 June 2011. The operating loss in the
current year has been as a result of lower than anticipated gold
production from the three operating underground mines, Harlequin,
Bullen and the OK Decline, at the Company's Norseman Project. The
Reserves of these three mines have not altered materially.
The Group's operations continued to invest heavily with major
investments in mine development and infrastructure, particularly
the North Royal open pit. This ongoing investment in the Norseman
Project's future resulted in a total net cash invested in capital
assets of AUD$12,768,788, which was funded from capital raisings
and finance drawdown.
The Group is dependent on cash flow generated from its mining
operations to fund its ongoing activities. During the year, a
capital raising via a share placement was undertaken, plus funds
were raised from the issue of a Convertible Loan Note debt
facility. The Group also fully drew down the finance facility
provided to wholly owned subsidiary Central Norseman Gold
Corporation Limited by Red Kite in July 2011. These funds were used
to provide the capital required to enable the continued development
of the North Royal Open Pit.
Despite recent and continued investment, gold production from
the Project has continued to fall well short of expectations, to
the extent that the OK Decline was placed on care & maintenance
in December. Subsequent to the period end, the Bullen mine has also
been placed on care & maintenance. Both of these actions have
had a significant positive impact on the operating costs of the
Project overall.
The North Royal Open Pit, which has been in development since
December 2010, has proceeded largely in line with expectations, and
began blasting and extracting the first fresh, hard rock ore in
December 2011.
Also subsequent to the end of the period, the Group has secured
further funding via a further Convertible Loan Note facility and,
as part of the funding package, has appointed a management company
to take over management of the Project on the Group's behalf.
Importantly the Group retains ownership to all assets.
The Directors have reviewed the Group's performance and its
ability to continue as a going concern. Following the recent
closure of the OK Decline and Bullen, the Directors have not been
able to develop accurate, medium to long term production forecasts
which would enable an assessment of likely cash flows to be
generated from the reduced operations. The appointed management
company is currently undertaking a full review of all Project
operations with a view to preparing a cogent mine plan for the
Project going forward.
The Reserve position of all four mines has not altered
materially, and the Directors believe that a cogent and profitable
mine plan can be developed which will take the Company forward and
restore it to profitability and positive cashflow. There is
however, some risk that a suitable mine plan may not be
developed.
The Directors acknowledge this risk, however they believe that
the Group has sufficient funds, or access to funds, through capital
raising or alternative sources, and the ability to generate funds
from its operations to enable the Group to continue to trade for
the foreseeable future while these plans are developed and
implemented, and accordingly these accounts have been prepared on a
going concern basis.
1.3 Goodwill
Goodwill is the difference between the amount paid on the
acquisition of the subsidiary undertakings and the aggregate fair
value of their separable net assets. Goodwill is capitalised as an
intangible asset and in accordance with IAS 36 is not amortised but
tested for impairment annually and when there are any indications
that its carrying value is not recoverable. As such, goodwill is
stated at cost less any provision for impairment in value. If a
subsidiary undertaking is subsequently sold, goodwill arising on
acquisition is taken into account in determining the profit and
loss on sale.
1.4 Mine properties in production phase
Exploration and evaluation expenditure
Exploration, evaluation and development expenditure incurred is
accumulated in respect of each identifiable area of interest. These
costs are only carried forward to the extent that they are expected
to be recouped through the successful development of the area or
where activities in the area have not yet reached a stage which
permits reasonable assessment of the existence of economically
recoverable reserves. Accumulated costs in relation to an abandoned
area are written off in full against profit in the year in which
the decision to abandon the area is made. When production
commences, the accumulated costs for the relevant area of interest
are amortised over the life of the area according to the rate of
depletion of the economically recoverable reserves. Economically
recoverable reserves are determined by the following: for open pit
operations - proven and probable reserves; and for underground
operations - proven and probable reserves and reasonably assured
potential additional reserves. Accumulated costs associated with
underground operations include an estimate of the future costs
associated with the conversion of 'indicated' and 'inferred'
resources into the 'measured category'. This estimate is based on
the historical cost per ounce discovered. A regular review is
undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to
that area of interest.
Costs of site restoration are provided when an obligating event
occurs from when exploration commences and are included in the
costs of that stage. Site restoration costs include the dismantling
and removal of mining plant, equipment and building structures,
waste removal and rehabilitation of the site in accordance with
clauses of the mining permits. Such costs have been determined
using estimates of future costs, current legal requirements and
technology on a discounted basis. Any changes in the estimates for
the costs are accounted for on a prospective basis. In determining
the costs of site restoration, there is uncertainty regarding the
nature and extent of the restoration due to community expectations
and future legislation. Accordingly the costs have been determined
on the basis that the restoration will be completed within one year
of abandoning the site.
1.5 Inventories
(i) Raw Materials and Stores
Inventories of raw materials and stores expected to be used in
production are valued at average cost. Obsolete or damaged
inventories of such items are valued at net realisable value. There
is a regular and ongoing review of inventories for surplus items
and provision is made for any anticipated loss on their
disposal.
(ii) Work in Progress and Gold in Circuit
Inventories of broken ore, work in progress and gold in circuit
are valued at the lower of cost and net realisable value. Cost
comprises direct material, labour and transportation expenditure
incurred in getting inventories to their existing location and
condition, together with an appropriate portion of fixed and
variable overhead expenditure based on weighted average costs
incurred during the period in which such inventories were produced.
Net realisable value is the amount anticipated to be realised from
the sale of inventory in the normal course of business less any
anticipated costs to be incurred prior to its sale.
1.6 Revenue
Revenue from the sale of goods (precious metals) is recognised
upon production. Interest revenue is recognised on a proportional
basis taking into account the interest rates applicable to the
financial assets.
1.7 Share based payments
The Company incurred share-based expenses upon the issue of
share options to certain directors, contractors and employees by
way of issue of share options. The fair value of these payments is
calculated by the Company using the Black-Scholes option pricing
model. The expense is recognised on a straight line basis over the
period from the date of award to the date of vesting, based on the
Company's best estimate of shares that will eventually vest.
In addition, the Company has incurred share-based expenses upon
the issue of share warrants to holders of Convertible Loan Notes
and to financiers. The fair value of these payments is calculated
by the Company using the Black-Scholes option pricing model. The
expense has been fully recognised in the year of issue as the
warrants vested on issue and it is not within the Company's control
as to when the holders of the warrants will exercise the
warrants.
1.8 Foreign currency transactions and balances
(i) Functional and presentational currency
Items included in the Group's financial information and
statements are measured using Australian Dollars ("AUD$"), which is
the currency of the primary economic environment in which the Group
operates ("the functional currency"). The financial information and
statements are also presented in AUD$ which is the Group's
presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year
end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the income statement.
Transactions in the accounts of individual Group companies are
recorded at the rate of exchange ruling on the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the rates ruling at the balance sheet
date. All differences are taken to the income statement.
For the purpose of presenting consolidated financial information
and statements, the assets and liabilities of the Group's foreign
operations are translated at exchange rates prevailing on the
balance sheet date. Income and expense items are translated at the
average exchange rates for the period. Exchange differences arising
are classified as equity and transferred to the Group's translation
reserve. Such translation differences are recognised as income or
as expenses in the period in which the operation is disposed
of.
1.9 Capital management
The Group's objective when managing capital is to ensure that
adequate funding and resources are obtained to enable it to develop
its projects through to profitable production, while in the
meantime safeguarding the Group's ability to continue as a going
concern. This is aimed at enabling it, once the projects come to
fruition, to provide appropriate returns for shareholders and
benefits for other stakeholders. The Group manages the capital
structure in the light of changes in economic conditions and risk
characteristics of the underlying projects. Conditions attached to
borrowings are monitored regularly in the light of management
accounts. Capital will continue to be sourced from equity and from
borrowings as appropriate. During the period to 31 December 2011 no
debt covenants have been breached.
1.10 Leases
The determination of whether an arrangement is or contains a
lease is based on the substance of the arrangement and requires an
assessment of whether the fulfilment of the arrangement is
dependent on the use of a specific asset or assets and the
arrangement conveys a right to use the asset.
(i) Group as a lessee
Finance leases, which transfer to the Group substantially all
the risks and benefits incidental to ownership of the leased item,
are capitalised at the inception of the lease at the fair value of
the leased asset or, if lower, at the present value of the minimum
lease payments. Lease payments are apportioned between the finance
charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the
liability. Finance charges are recognised as an expense in profit
or loss.
Capitalised leased assets are depreciated over the shorter of
the estimated useful life of the asset and the lease term if there
is no reasonable certainty that the Group will obtain ownership by
the end of the lease term.
Operating lease payments are recognised as an expense in the
income statement on a straight-line basis over the lease term.
Operating lease incentives are recognised as a liability when
received and subsequently reduced by allocating lease payments
between rental expense and reduction of the liability.
(ii) Group as a lessor
Leases in which the Group retains substantially all the risks
and benefits of ownership of the leased asset are classified as
operating leases. Initial direct costs incurred in negotiating an
operating lease are added to the carrying amount of the leased
asset and recognised as an expense over the lease term on the same
basis as rental income.
1.11 Critical accounting judgements and estimates
The preparation of financial information and statements in
conformity with International Financial Reporting Standards
requires the use of accounting estimates and assumptions that
affect the reported amounts of assets and liabilities at the date
of the financial information and statements and the reported
amounts of income and expenses during the reporting period.
Although these estimates are based on management's best knowledge
of current events and actions, actual results ultimately may differ
from those estimates. IFRSs also require management to exercise its
judgement in the process of applying the Group's accounting
policies.
The areas involving a higher degree of judgement or complexity,
or areas where assumptions and estimates are significant to the
financial information and statements are as follows:
Impairment of tangible and intangible assets
Determining whether a tangible or intangible asset is impaired
requires an estimation of whether there are any indications that
its carrying value is not recoverable.
At each reporting date, the company reviews the carrying value
of its tangible and intangible assets to determine whether there is
any indication that those assets have been impaired. If such an
indication exists, the recoverable amount of the asset, being the
higher of the asset's fair value less costs to sell and value in
use, is compared to the asset's carrying value. Any excess of the
asset's carrying value over its recoverable amount is expensed to
the income statement.
Valuation of goodwill and investments
Management value goodwill and investments after taking into
account ore reserves, and cash-flow generated by estimated future
production, sales and costs. If the assumed factors vary from
actual occurrence, this will impact on the amount of the asset
which should be carried on the balance sheet.
Provision of restoration costs
Provisions for restoration are established in the consolidated
balance sheet when the obligating event occurs. Such costs have
been determined using estimates of future costs, current legal
requirements and technology on a discounted basis. In determining
the costs of site restoration, there is uncertainty regarding the
nature and extent of the restoration due to community expectations
and future legislation.
Exploration and Development
Exploration and development costs are amortised over the life of
the area according to the rate of depletion of the economically
recoverable reserves. If the amount of economically proven reserves
varies, this will impact on the amount of the asset which should be
carried on the balance sheet.
Share based payments
The Group records charges for share based payments.
For option based share based payments management estimate
certain factors used in the option pricing model, including
volatility, exercise date of options and number of options likely
to be exercised. If these estimates vary from actual occurrence,
this will impact on the value of the equity carried in the
reserves.
2. Profit / (Loss) per share
The basic (loss)/profit per ordinary share has been calculated
using the (loss)/profit for the period of AUD$(41,803,938) (31
December 2010: AUD$(802,799), 30 June 2011: AUD$(21,800,925)) and
the weighted average number of ordinary shares in issue of
228,275,701 (31 December 2010: 184,658,251, 30 June 2011:
199,199,851).
The diluted (loss)/profit per share has been calculated using a
weighted average number of shares in issue and to be issued of
228,275,701 (31 December 2010: 184,658,251, 30 June 2011:
199,199,851). The diluted loss per share has been kept the same as
the basic loss per share, as the options on issue are exercisable
at a price greater than the current market value, thus being
anti-dilutive.
3. Segmental reporting
For the purposes of segmental information, the Group has
determined that its operations are confined to a single operating
segment, located in a single geographical region, Australia. All
material revenue is derived from the development of mineral
resources from its Norseman Gold Project in Australia, which is the
Group's sole cash generating unit.
Revenues are generated from the production of precious metals,
principally gold, and to a lesser extent, silver. The precious
metals are sold to either the local, government controlled mint
directly, or through the trading desk of a large Australian based
trading bank.
4. Property, plant & equipment
Unaudited
31 December 2011
Mine
Infrastructure Capital
Land and Plant and and Mobile Works in
Buildings Equipment Equipment Progress Total
AUD$ AUD$ AUD$ AUD$ AUD$
Cost
At 1 July 2011 1,600,207 9,474,704 30,439,032 4,416,073 45,930,016
Additions 76,844 2,666,339 707,766 - 3,450,949
Disposals - - - (2,241,512) (2,241,512)
------------ ------------ ----------------- ------------ -------------
At 31 December
2011 1,677,051 12,141,043 31,146,798 2,174,561 47,139,453
------------ ------------ ----------------- ------------ -------------
Depreciation
At 1 July 2011 (423,666) (5,020,578) (11,098,107) - (16,542,351)
Charge for period (77,470) (865,797) (3,097,880) - (4,041,147)
Depreciation on
disposals - - - - -
------------ ------------ ----------------- ------------ -------------
At 31 December
2011 (501,136) (5,886,375) (14,195,987) - (20,583,498)
------------ ------------ ----------------- ------------ -------------
Net book value
31 December 2011 1,175,915 6,254,668 16,950,811 2,174,561 26,555,955
============ ============ ================= ============ =============
Unaudited
31 December 2010
Mine
Land Infrastructure Capital
and Plant and and Mobile Works in
Buildings Equipment Equipment Progress Total
AUD$ AUD$ AUD$ AUD$ AUD$
Cost
At 1 July 2010 613,834 7,480,374 28,442,125 2,463,350 38,999,683
Additions 865,225 2,197,076 2,555,903 2,711,957 8,330,161
Disposals - (3,074) (1,534,514) (352,455) (1,890,043)
------------ ------------ ----------------- ---------- -------------
At 31 December
2010 1,479,059 9,674,376 29,463,514 4,822,852 45,439,801
------------ ------------ ----------------- ---------- -------------
Depreciation
At 1 July 2010 (263,199) (3,402,726) (8,987,267) - (12,653,192)
Charge for period (76,881) (873,929) (3,092,909) - (4,043,719)
Depreciation on
disposals - 3, 074 1,534,514 - 1,537,588
------------ ------------ ----------------- ---------- -------------
At 31 December
2010 (340,080) (4,273,581) (10,545,662) - (15,159,323)
------------ ------------ ----------------- ---------- -------------
Net book value
31 December 2010 1,138,979 5,400,795 18,917,852 4,822,852 30,280,478
============ ============ ================= ========== =============
Audited
30 June 2011
Mine
Infrastructure Capital
Land and Plant and and Mobile Works
Buildings Equipment Equipment in Progress Total
AUD$ AUD$ AUD$ AUD$ AUD$
Cost
At 1 July 2010 613,834 7,480,374 28,442,125 2,463,350 38,999,683
Additions 986,373 2,034,345 6,253,657 2,017,723 11,292,098
Disposals - (40,015) (4,256,750) (65,000) (4,361,765)
------------ ------------ ----------------- ------------- -------------
At 30 June 2011 1,600,207 9,474,704 30,439,032 4,416,073 45,930,016
------------ ------------ ----------------- ------------- -------------
Depreciation
At 1 July 2010 (263,199) (3,402,726) (8,987,267) - (12,653,192)
Charge for year (160,467) (1,657,867) (6,340,669) - (8,159,003)
Depreciation on
disposals - 40,015 4,229,829 - 4,269,844
------------ ------------ ----------------- ------------- -------------
At 30 June 2011 (423,666) (5,020,578) (11,098,107) - (16,542,351)
------------ ------------ ----------------- ------------- -------------
Net book value
30 June 2011 1,176,541 4,454,126 19,340,925 4,416,073 29,387,665
============ ============ ================= ============= =============
Plant and equipment pledged as security for liabilities
Included in mine infrastructure & mobile equipment is
equipment with a written down value of $15,137,697 (December 2010:
$16,673,731 June 2011: $15,260,266) which has been pledged as
security for the related finance lease liabilities in current and
non-current liabilities as disclosed in Note 12.
5. Mine properties in production phase
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
AUD$ AUD$ AUD$
Opening balance 50,254,012 27,631,850 27,631,850
Mining expenditure incurred
during the period 9,091,333 8,586,738 22,065,392
Transferred from Exploration
& Evaluation - - 4,133,992
Amortisation during the period (2,049,099) (1,633,291) (3,577,222)
Impairment charge (18,142,722) - -
Closing balance 39,153,524 34,585,297 50,254,012
============= ============= ============
Expenditure on developing mine properties in production
represents costs incurred in relation to development of operating
mines at the Group's operations at Norseman. The Directors review
this carrying value periodically to ensure the carrying value will
be recovered by ongoing mining activities. In view of the fact that
two mines were placed (or were to be placed) on care and
maintenance during the period, the Directors have assessed the
carrying values of the capitalised mine development costs against
those two mines on decided to impair the value of those assets in
full. Should a decision be made in the future to reopen either or
both of these mines a further assessment of these values will be
made.
6. Exploration & evaluation expenditure
Costs carried forward in respect Unaudited Unaudited Audited
of areas of interest in: 31 December 31 December 30 June
Exploration and evaluation 2011 2010 2011
phases: AUD$ AUD$ AUD$
Opening balance 16,422,085 12,704,347 12,704,347
Exploration expenditure incurred
during the period 1,981,368 4,989,833 7,874,311
Transferred to Mine properties
in production phase - - (4,133,992)
Exploration expenditure written
off - - (22,581)
Closing balance 18,403,453 17,694,180 16,422,085
============= ============= =============
The amounts for intangible exploration and evaluation ("E &
E") assets represent costs incurred in relation to the Group's
operations at Norseman. These amounts will be written off to the
income statement as exploration expenses unless commercial reserves
are established or the determination process is not completed and
there are no indicators of impairment. The outcome of ongoing
exploration and evaluation, and therefore whether the carrying
value of E & E assets will ultimately be recovered, is
inherently uncertain. The Directors have assessed the value of the
exploration and evaluation expenditure carried as intangible assets
and in their opinion no provision for impairment is currently
necessary.
7. Goodwill
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
AUD$ AUD$ AUD$
Cost 44,983,622 44,983,622 44,983,622
Amortisation and Impairment
Brought forward (44,983,622) (29,983,622) (29,983,622)
Impairment charge - - (15,000,000)
Net Book Value - 15,000,000 -
============= ============= =============
Goodwill arose on the acquisition of the Company's subsidiary
undertakings. The Group tests goodwill for impairment at least
annually.
8. Inventories
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
AUD$ AUD$ AUD$
Gold Bullion - at net realisable
value (NRV) 1,021,587 1,736,281 841,347
Work in Progress - lower of
cost and NRV
- Ore Stockpiles 1,728,391 983,969 3,115,959
- Gold in circuit 1,697,978 873,044 462,864
Raw materials and stores -
at lower of cost and net realisable
value 2,473,806 2,976,766 2,648,592
6,921,762 6,570,060 7,068,762
============= ============= ==========
9. Cash at bank and in hand
The Group has total cash on hand of $15,571,230 of which
$6,141,793 is held as security against the obligations for
restoration and decommissioning expenditure under the mining
production and exploration licences.
10. Trade and other payables
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
AUD$ AUD$ AUD$
Trade accruals 13,987,715 16,172,739 11,589,091
Other payables 4,067,475 3,313,307 6,257,742
Corporation tax - (100,000) -
Bank Overdraft 3,815 - -
18,059,005 19,386,046 17,846,833
============= ============= ===========
11. Provisions
Restoration
Unaudited Employee and Total
Group - 31 December 2011 Benefits decommissioning
Current: AUD$ AUD$ AUD$
At 1 July 2011 2,536,288 - 2,536,288
Charge to income statement 392,440 - 392,440
At 31 December 2011 2,928,728 - 2,928,728
========== ================= ==========
Restoration
Employee and Total
Benefits decommissioning
Non-current: AUD$ AUD$ AUD$
At 1 July 2011 88,703 6,412,934 6,501,637
Charge to income statement (42,629) - (42,629)
At 31 December 2011 46,074 6,412,934 6,459,008
========== ================= ==========
Restoration
Unaudited Employee and Total
Group - 31 December 2010 Benefits decommissioning
Current: AUD$ AUD$ AUD$
At 1 July 2010 3,001,009 - 3,001,009
Charge to income statement 9,726 - 9,726
At 31 December 2010 3,010,735 - 3,010,735
========== ================= ==========
Restoration
Employee and Total
Benefits decommissioning
Non-current: AUD$ AUD$ AUD$
At 1 July 2010 107,789 6,342,325 6,450,114
Charge to income statement (29,750) - (29,750)
At 31 December 2010 78,039 6,342,325 6,420,364
========== ================= ==========
Restoration
Audited Employee and Total
Group - 30 June 2011 Benefits decommissioning
Current: AUD$ AUD$ AUD$
At 1 July 2010 3,001,009 - 3,001,009
Charge to income statement (464,721) - (464,721)
At 30 June 2011 2,536,288 - 2,536,288
========== ================= ==========
Restoration
Employee and Total
Benefits decommissioning
Non-current: AUD$ AUD$ AUD$
At 1 July 2010 107,789 6,342,325 6,450,114
Charge to income statement (19,086) 70,609 51,523
At 30 June 2011 88,703 6,412,934 6,501,637
========== ================= ==========
The Directors have considered environmental issues and the need
for any necessary provision for the cost of rectifying any
environmental damage, as might be required under local legislation
and the Group's license obligations, and have provided the above
provisions for any future costs of decommissioning or any
environmental damage.
12. Interest-bearing loans and borrowings
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
AUD$ AUD$ AUD$
Current:
Obligations under finance
lease (a) 5,976,703 6,391,802 6,001,829
Finance facility 7,500,000 - 3,500,000
------------- ------------- ----------
Total Current 13,476,703 6,391,802 9,501,829
============= ============= ==========
Non-current:
Obligations under finance
lease (a) 2,822,120 7,622,171 5,313,899
Finance Facility 7,496,263 - -
Convertible Loan Note 7,484,961 - -
17,803,344 7,622,171 5,313,899
============= ============= ==========
The Finance Facility is a secured facility provided to Central
Norseman Gold Corporation Limited by EXP T1 Ltd.
Terms of the Finance Facility
Key conditions of this secured facility are as follows:
-- Facility limit - AUD$15,000,000
-- Repayment - repayable in 24 months in monthly instalments of
principal and interest. Principal repayments are required to be
made in the first 12 months. Repayment is to commence on 1 July
2012. The facility may be paid out early with no penalty.
-- Interest - calculated at 600 basis points above the daily
mean of the 3 month LIBOR quoted for the month of calculation,
-- Security - secured against the assets and undertakings of
Central Norseman Gold Corporation Limited, as well as by a Deed of
Guarantee from the Company.
Terms of the Convertible Notes
(a) Introduction
The Convertible Loan Notes were issued in October 2012 to
provide working and capital and bring the North Royal open pit into
production. The total value of notes issued was GBP5,087,000.
(b) Conversion period
Each Convertible Loan Note may be converted at any time into
Ordinary shares within the conversion period. On conversion, the
newly converted Ordinary shares will rank pari passu with the
Ordinary shares in issue at the date of conversion. In respect of
each Convertible Loan Note, the conversion period commenced on the
date of issue of the Convertible Loan Note (which was in October
2011) and expires on the second anniversary of the Convertible Loan
Note.
The Company is discharged from its liabilities under the
Convertible Note Deed in respect of a Convertible Loan Note when
the Convertible Loan Note is either redeemed (see below) or is
converted in accordance with its conditions of issue.
(c) Value and conversion price
Each Convertible Loan Note bears interest at a rate of 10% and
has a conversion price of GBP0.06 per share.
The number of Ordinary Shares resulting from the conversion of a
Convertible Loan Note shall be calculated by dividing the
Conversion Amount by the conversion price (as detailed above).
The nominal value of the loan notes has been split between the
liability element and an equity component, representing the fair
value of the embedded option to convert the liability into equity
of the Company as follows:
Group
31 December 2011
AUD$
Nominal value of the convertible loan notes issued 7,720,443
Equity component (235,482)
__________
Liability component 7,484,961
Interest charged 139,602
Interest paid -
__________
Liability component at 31 December 2011 7,624,563
=========
The interest charged for the period is calculated by applying an
effective interest rate of 10% to the liability component.
The directors estimate the fair value of the liability component
of the convertible notes at 31 December to be approximately
AUD$7,484,961. This fair value has been calculated by discounting
the future cash flows at a rate of 11.8%.
(d) Restrictions on conversion
The conversion of a Convertible Loan Note into Ordinary Shares
was subject to approval by shareholders in general meeting. This
approval was obtained at the Company's Annual General Meeting held
on 9 December 2011.
(e) Security
The Convertible Loan Notes are secured against the assets and
undertakings of Central Norseman Gold Corporation Limited.
(a) Assets pledged as security
The carrying amounts of assets pledged as security for current
and non-current interest bearing liabilities are:
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
AUD$ AUD$ AUD$
Non-current:
Finance lease - Mobile equipment
& plant 15,137,697 16,673,731 15,746,984
------------- ------------- -----------
Total assets pledged as security 15,137,697 16,673,731 15,746,984
============= ============= ===========
(b) Finance lease commitments
The Group has finance leases for various items of mine
infrastructure and mobile equipment with a carrying amount of
$15,137,697 (31 December 2010: $16,673,731, 30 June 2011:
$15,179,085,). These lease contracts expire within 1 to 3 years
with no residual payable.
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
AUD$ AUD$ AUD$
Within not more than one year 6,537,182 7,542,241 6,777,193
After one year but not more
than five years 2,960,475 8,062,922 5,642,696
------------- ------------- -------------
Total minimum lease payments 9,497,657 15,605,163 12,419,889
Less amount representing finance
charges (699,650) (1,591,190) (1,104,161)
------------- ------------- -------------
Present value of minimum lease
payments 8,798,007 14,013,973 11,315,728
============= ============= =============
13. Share capital and options
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
GBP GBP GBP
Allotted, called up and fully
paid
Ordinary shares of 1.25p each 4,477,528 2,471,500 2,749,278
============= ============= ==========
AUD$ AUD$ AUD$
Allotted, called up and fully
paid
Ordinary shares of 1.25p each 8,530,017 5,419,632 5,865,432
============= ============= ==========
The Ordinary shares rank pari passu in all respects including
the right to receive all dividends and other distributions
declared, made or paid. At 31 December 2011, the number of Ordinary
shares of GBP0.0125 each on issue is 358,202,222 (30 June 2011:
219,942,222, 31 December 2010: 197,720,000).
On 9 December 2011, the number of Ordinary shares issued and
fully paid was increased from 219,942,222 Ordinary shares of
GBP0.0125 each to 358,202,222 Ordinary shares of GBP0.0125. This
related to the issue of 138,260,000 shares at an issue price of 6p
per share.
Share options and warrants
The details of share options and warrants outstanding are as
follows:
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
Number of share options and
warrants 96,383,327 - 9,550,000
================== ============= ==========
14. Reserves
Group
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
Equity reserves, movements: AUD$ AUD$ AUD$
Opening balance 475,612 - -
Share based expenses 722,477 - 475,612
Convertible Loan notes 235,482 - -
Closing balance 1,433,571 - 475,612
============= ============= =========
15. Share-based payments
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
AUD$ AUD$ AUD$
The Group and Company recognised
the
following charge in the income
statement in
respect of its share based
payment plans:
Share option charge 722,477 - 475,612
722,477 - 475,612
============= ============= =========
16. Exploration expenditure commitments
In order to maintain an interest in the mineral assets in which
the Group is involved, the Group is committed to meet the
conditions under which the licences were granted. The timing and
amount of exploration expenditure commitments and obligations of
the Group are subject to the work programme required as per the
licence commitments and may vary significantly from the forecast
based upon the results of the work performed. Exploration results
in any of the projects may also result in variation of the forecast
programmes and resultant expenditure. Such activity may lead to
accelerated or decreased expenditure.
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
AUD$ AUD$ AUD$
As at the balance sheet date
the
aggregate amount payable is:
Within not more than one year 6,306,720 6,475,680 6,990,720
============= ============= ==========
17. Reconciliation of operating cash flows to net cash inflow from operating activities
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
Group: AUD$ AUD$ AUD$
Group operating (loss)/profit (16,314,881) (7,510,753) (12,892,977)
Adjustments for items not
requiring an outlay of funds:
Foreign currency - realised - (4) -
Depreciation and amortisation 6,090,244 5,586,495 11,630,539
Exploration expenditure written
off - - 22,581
Profit on sale of financial
assets available for sale - (350) 197,607
Provision for obsolescence
and rehabilitation - - (413,198)
Share-based payments charge 722,477 - 475,612
Net cash (outflow)/inflow
before changes in working
capital (9,502,160) (1,924,612) (979,836)
Decrease/(Increase) in inventories 147,000 762,750 264,048
Decrease/(Increase) in receivables
and
prepayments (Note a) (166,212) (483,227) (807,168)
Increase/(Decrease) in provisions 349,810 (20,021) -
Increase in trade and other
payables 212,172 5,983,997 4,344,784
Taxation paid - (100,000) -
------------- ------------- -------------
Net cash (outflow)/inflow
from operating activities (8,959,390) 4,218,887 2,821,828
============= ============= =============
Note a: Inventories includes AUD$1,021,587 of Gold Bullion on
hand at 31 December 2011(31 December 2010: AUD$1,736,281, 30 June
2011: AUD$841,347).
18. Post balance sheet events
Subsequent to the period end, the Group has placed the Bullen
mine on "care and maintenance". As a result, although the Reserve
of the mine has not altered significantly, the directors have
recognised in these accounts a charge for impairment of the
carrying value of the mine development costs carried on the balance
sheet.
Also subsequent to the period end the Group has entered into an
agreement with Tulla Resource Projects Pty Ltd ("Tulla") whereby
Tulla will subscribe for up to AUD$10 million in convertible loan
notes with the Company. As part of the transaction, L2 Project
Management - Norseman Pty Ltd ("L2"), a company associated with
Tulla, will assume full responsibility for managing and operating
the Group's Norseman gold project. The Group via its subsidiary
Central Norseman Gold Corporation Limited retains full ownership of
the mine and equipment. Full details of this transaction were
announced to the market on 16 February 2012.
* * ENDS * *
For further information visit www.norsemangoldplc.com, email
investors@ngold.com.au or contact:
David Steinepreis Norseman Gold Plc. Tel: +44 (0) 7913402727
William Vandyk / Rod Venables Northland Capital Partners Ltd Tel: 020 7796 8800
Guy Wilkes Ocean Equities Ltd Tel: 020 7786 4370
Susie Geliher / Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7236 1177
Notes
Norseman Gold plc is an AIM and ASX listed Australian gold
production company, which operates the 2,360 sq km Norseman Gold
Project, Australia's longest continually running gold operation.
Located in the Eastern Goldfields of Western Australia in the
highly prospective Norseman-Wiluna greenstone belt, the project
currently has a total resource inventory of 3.4 million ounces of
gold at an average grade of 4.7 g/t.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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