Wrap Text
Annual report
Gold One International Limited
Registered in Western Australia under the Corporations Act, 2001 (Cth) with registration number ACN: 094 265 746
(Registered in South Africa as an external company with registration number 2009/000032/10)
ISIN: AU000000GDO5
Share Code on the ASX/JSE: GDO
OTCQX International: GLDZY
("Gold One" or the “company”)
2012 ANNUAL REPORT
Shareholders are advised that the 2012 annual report was published today, 28 February 2013 and is available for download from the
company`s website hosted at www.gold1.co.za
CHIEF EXECUTIVE OFFICER'S REVIEW
Dear Shareholder
The 2012 year was one of significant transformation for Gold One International Limited and its subsidiaries (“Gold One” or “the
company”) and was characterised by considered and strategic transactions. Following the conclusion of the Jintu Transaction on
30 December 2011, described in the Corporate Governance Statement section of this report, and the introduction of the BCX
Consortium, described in the Company Review section of this report, as Gold One’s new majority shareholder, Gold One concluded
the acquisitions of Rand Uranium (Pty) Limited (“Rand Uranium”) and Ezulwini Mining Company (Pty) Limited (“Ezulwini”) during
the first half of 2012 for US$250 million and US$70 million respectively. These strategic acquisitions enabled the company to
not only bolster its production profile, but also to pursue an uranium co-product strategy by realising the uranium potential that
exists across the Cooke Underground Complex (Cooke 1, 2, 3 and Ezulwini). The Randfontein Surface Operations, created through
Gold One’s splitting of Rand Uranium’s underground and surface assets into two distinct business units, has also allowed Gold
One to begin consolidating surface retreatment opportunities within Johannesburg’s West Rand. This opportunity is being further
explored via a joint venture with Gold Fields Limited (“Gold Fields”) and now Sibanye Gold Limited (“Sibanye Gold”).
Before the close of the March 2012 quarter Gold One successfully spun out its medium-depth Megamine assets into Goliath Gold
Mining Limited (“Goliath Gold”), a gold explorer and developer in which Gold One holds a 72% controlling interest. The vending
of the Megamine assets into Goliath Gold enabled Gold One to unlock value from these assets while still maintaining operational
focus on the ramping up of the Modder East Operations, the integration of Ezulwini into the Cooke Underground complex as
Cooke 4, the turnaround of the Cooke Underground Operations, and the growth of Gold One’s surface business. The synergetic
potential present within the Gold One and Goliath Gold relationship was also highlighted during the year under review when the
companies jointly announced their planned acquisitions of selected assets belonging to Pamodzi Gold East Rand (Pty) Limited
(“Pamodzi Gold East Rand“) and its subsidiaries, which are in provisional liquidation.
The 2012 year was not without difficulties as the company experienced illegal industrial action at the Modder East Operations
during June as well as at Cooke 4 (Ezulwini) during October.
Despite these difficulties the Gold One Team proved its resilience. At Modder East a two year wage agreement was signed on 31
October 2012 with the National Union of Mineworkers (“NUM”). At Cooke 4 a memorandum of understanding was entered into
with both NUM and the Congress of South African Trade Unions (COSATU) on 12 November 2012, which saw the lifting of Cooke
4’s operational suspension.
At the Cooke Underground Operations a restructuring process during the December 2012 quarter reduced the labour complement
by approximately 1,400 people and facilitated the continuation of the operation’s turnaround strategy as well as its return to
profitability. With an appropriate cost structure now in place for all four shafts, the integration of Cooke 4 into the Cooke
Underground complex is set to continue and will further enhance the operation’s cost profile while also allowing for the uranium
co-product strategy to be actively progressed. At the Randfontein Surface Operations the Cooke Gold Plant Optimisation Project,
described in the Company Review section of this report, is anticipated to further expand what has already proven to be a highly
successful surface retreatment operation.
On 29 November 2012 Gold One announced the resignation of CEO Neal Froneman and the appointment of myself, Christopher
Chadwick, as acting CEO. I will also continue to act as CFO. Neal, who was instrumental in the creation of Gold One in 2009, has
been appointed as CEO of Sibanye Gold, which will hold the South African assets (excluding South Deep) previously belonging to
Gold Fields. Neal leaves a legacy of delivery, empowerment and entrepreneurship within Gold One, and the strong platform and
management team that Neal created will continue to stand Gold One in good stead as we work towards achieving our strategic
goals.
The reconstitution of the Gold One Board was announced on 30 December 2012 following the expiry of the one year transition
period prescribed in the transaction implementation agreement with the BCX Consortium. The Gold One Board has been
streamlined to include seven directors, four of whom will be independent, and will continue to be chaired by Yalei Sun.
Despite the challenges of 2012 the operations ended the year positively and I have every confidence that they are well positioned
for strong performance in 2013.
Christopher Chadwick (CFO and acting CEO)
27 February 2013
Johannesburg, South Africa
COMPANY REVIEW
Gold One is an ASX and JSE listed mid-tier mining group with gold operations and gold and uranium prospects across
Southern Africa, and is focused on developing and mining low technical risk, high margin precious metal resources
in diversified mining friendly jurisdictions. The company is majority-owned by BCX Gold Investment Holdings Limited
(“the BCX Consortium”) comprising Baiyin Non-Ferrous Group Co. Limited (“Baiyin Non-Ferrous Group”), the
China-Africa Development Fund (“CAD Fund”), and Long March Capital Limited (“Long March Capital”). Gold One was
created on 18 May 2009 via the inward listing of the company formerly known as BMA Gold on the JSE and the subsequent
acquisition by Gold One of all the issued ordinary shares in Aflease Gold by way of a scheme of arrangement.
Gold One’s flagship asset, the Modder East gold mine, was brought into production in 2009 and is located in
Johannesburg’s East Rand.
At the beginning of 2012 the Gold One Group expanded with the acquisition of Rand Uranium, consisting of the Cooke
1-3 Underground Operations and the Randfontein Surface Operations located in the West Rand, 30 kilometres from
Johannesburg. During mid-2012 Gold One also completed a transaction with First Uranium Corporation (“First Uranium”)
and acquired 100% of Ezulwini, giving the company access to gold and uranium metallurgical processing plants with
nameplate capacities of 200,000 and 100,000 tonnes per month, respectively. Ezulwini is contiguous to the company’s
Cooke Underground and Randfontein Surface Operations and was historically known as the Cooke 4 Shaft. Access to
Ezulwini’s uranium production facility will allow for near term production of uranium from underground ore mined from the
Cooke Shafts. In addition, the sharing of services between Ezulwini and the Cooke Underground Operations will
facilitate a reduction in operating costs. An integrated plan Incorporating Ezulwini into the greater Cooke Underground
Operations is underway, and Ezulwini is now once again known as Cooke 4.
The Cooke assets, together with Modder East, produced 241,755 ounces for the 2012 year. This is compared to
123,179 ounces produced during 2011 and was achieved amid disruptive illegal industrial action that took place at the
Modder East Operations during June 2012 and at Cooke 4 during October 2012.
Gold One’s operations are supported by a significant project pipeline comprising both gold and uranium resources
in various stages of development, from feasibility and pre-feasibility studies to greenfield exploration projects
across Southern Africa.
Gold One is the 72% majority shareholder of Goliath Gold, a South African JSE-listed gold explorer and developer. Goliath
Gold purchased the Megamine assets from Gold One on 28 March 2012.
Health, safety, the enviroment, sustainable development and social upliftment
Gold One achieved a group 2012 lost time injury frequency rate (“LTIFR”) of 1.42 for every 200,000 hours worked compared to
0.54 in 2011. Regrettably five separate fatalities occurred across two of the company’s operations. Gold One remains committed
to achieving injury-free operations and best practices are continually entrenched across the Gold One Group through the
company’s safety motto that ‘nothing is so important that it cannot be done safely’. All safety endeavours and thorough and
sustainable safety practises remain key managerial focuses throughout Gold One.
Following the acquisitions of the Cooke 1-3 Underground, Randfontein Surface and Cooke 4 Underground assets during the 2012
year, extensive culture induction programmes were undertaken across the newly acquired operations to familiarise employees
with Gold One’s seven golden values of respect, participation, honesty, integrity, accountability, delivery and fun. Gold One’s
employee philosophy that ‘you are the One in Gold One’ has also been firmly entrenched at the newly acquired operations.
Gold One remains committed to sustainably empowering its workforces by promoting and facilitating life skills training for
employees. Adult Basic Education Training, which provides conceptual foundation skills for illiterate adults and ultimately
provides access to national diplomas, and study assistance programmes are provided across all of the company’s operations.
Gold One has also continued to show its commitment towards the economic upliftment of women by maintaining at least 10%
of women in mining. On-site clinics and continuous wellness campaigns ensure that all Gold One employees have access to free
and effective healthcare and health knowledge.
To aid in the development of Gold One’s mining communities, an agricultural co-operative was initiated during the year under
review for the communities associated with the Cooke 1-4 Underground Operations and the Randfontein Surface Operations.
This co-operative currently supports 20 beneficiaries. The Modder East Operations’ Slovo Park agricultural co-operative is
continuing strongly and currently supports 15 beneficiaries, of whom most are women.
KEY COMPANY DATA AS AT 31 DECEMBER 2012
Issuer Code GDO
Shares in Issue 1.42 billion
Share Price A$0.35
Market Cap (Diluted) A$495.79 million
Options in Issue 41.17 million
2012 PERFORMANCE
2012 2011
Gold Production 241 755 ounces 123 179 ounces
Lost-Time Injury Frequency Rate (Per 200 000 Hours Worked) 1.42 LTIFR 0.54 LTIFR
Net Profit After Tax A$30.152 million A$49.893 million
Earnings Per Share A$0.02 A$0.06
Cash Generated From Operations A$(7.706 million) A$107.305 million
Group Free Cash Flow1
A$(65.769 million) A$72.453 million
Average Realised Gold Price Per Ounce Sold US$1 460/oz US$1 572/oz
Group Cash Cost2 S$1 192/oz US$491/oz
Group Total Cost3
US$1 388/oz US$719/oz
1Group free cash flow refers to cash available from group operations before interest charges and taxation.
2Cash cost refers to costs directly associated with mining activities, mine administration, processing and refining.
3Total cost refers to the sum of cash costs, depreciation and royalties. Capital expenditure, finance costs and corporate costs are
excluded from total cost.
2012 HIGHLIGHTS
5 January Gold One announces it has exceeded its 2011 production target of 120 000 ounces, resulting in the
Jintu Transaction ‘claw-back’, or adjustment subscription, not being triggered
6 January Rand Uranium acquisition is closed
24 January Gold One and Gold Fields announce plans to investigate a joint venture for the retreatment of the
companies’ combined West Rand surface tailings deposits
29 February Record profit of US$70.96 million announced for 2011 financial year and Gold One Board reconstituted
with effect from 1 March 2012 following the completion of the Jintu Transaction
2 March Binding letter of agreement entered into with First Uranium to acquire 100% of the gold and uranium
producing Ezulwini Mine for US$70 million
20 March All conditions precedent regarding the acquisition of Gold One’s Megamine assets by Goliath Gold are
fulfilled or waived, resulting in Gold One becoming the majority, 72%, shareholder in Goliath Gold
30 March Binding sale of shares and claims agreement is signed for the acquisition of Ezulwini
3 April Financing is secured through the Investec Bank facility (announced on 29 August 2011) and a US$75
million unsecured shareholder loan facility
17 April Gold One and Goliath Gold enter into an acquisition agreement with the joint provisional liquidators
representing Pamodzi Gold East Rand and its subsidiaries to acquire underground data and selected
assets for ZAR70 million
26 April Wayne Robinson is appointed as executive vice president of Gold One’s South African operations
1 August Acquisition of Ezulwini is completed
31 October New two year wage deal for Modder East is signed with NUM following illegal industrial action at the
operation during June
12 November Operations resume at Cooke 4 following operational suspension imposed on 16 October due to illegal
industrial action at the operation during the same month
29 November Gold One CFO Christopher Chadwick assumes role of CFO and acting CEO with effect from 31
December 2012 following the resignation of Neal Froneman
30 December Board is reconstituted following the closure of the one year transition period stipulated by the
transaction implementation agreement entered into with the BCX Consortium
LOCATION OF ASSETS
Cooke undergound Operations and Randfontein Surface Operation
The full annual report including schematics is available for download from the company's website hosted at www.gold1.co.za
GOLD ONE’s MINERAL (ORE) RESERVES AND MINERAL RESOURCES
Gold One has updated the mineral resource and mineral (ore) reserve estimations for Modder East, the Cooke 1-3 Underground
Operations and the Randfontein Surface Operations. Updated mineral resource estimations for Goliath Gold, Ventersburg and
the Modder North projects are currently being undertaken and will be completed during the March 2013 quarter. The mineral
resources for the Turnbridge and New Kleinfontein projects have been reviewed but remain unchanged from those reported in
the company’s 2011 annual report. The mineral resources and mineral (ore) reserves for the Cooke 4 Operation are undergoing
a full review and updated estimations will be completed during the June 2013 quarter.
The company’s total gold resource base now totals 32.3 million ounces comprising a total of 19.44 million ounces in the measured
and indicated category (440.8 million tonnes at 1.37 grams per tonne) and 12.88 million ounces in the inferred category (114.7
million tonnes at 3.49 grams per tonne). Total proved and probable reserves now total 3.64 million ounces (122.7 million tonnes
at 0.92 grams per tonne).
In addition the company has declared uranium “(U3O8)” mineral resources and mineral (ore) reserves at the Cooke 1-3 Underground
Operations and the Randfontein Surface Operations. Total uranium resources include 85.9 million pounds comprising 82.8
million pounds in the measured and indicated category (315.0 million tonnes at 0.12 kilograms per tonne) and 3.1 million pounds
in the inferred category (2.6 million tonnes at 0.54 kilograms per tonne). Proved and probable uranium reserves total 36.6 million
pounds (88.5 million tonnes at 0.19 kilograms per tonne).
As at the release date of this annual report Gold One’s estimated gold and uranium mineral (ore) reserves and mineral resources
are as stated in the table below.
GOLD ONE CONSOLIDATED MINERAL RESOURCE STATEMENT1
GOLD URANIUM
GOLD URANIUM
TONNES GRADE CONTENT TONNES GRADE CONTENT
(Mt) (G/t) (MOz) (Mt) (kG/t) (MlbS)
Measured
Modder East 2 0.49 9.34 0.15
Cooke 1-3 Underground 3 0.70 5.24 5.17 14.72 0.47 15.39
Randfontein Surface 3 256.28 0.26 2.15 235.82 0.09 44.84
total Measured 287.47 0.81 7.47 250.54 0.11 60.23
Indicated
Modder East 2 27.89 2.71 2.44
Cooke 1-3 Underground 3 28.81 4.06 3.76 12.14 0.47 12.64
Randfontein Surface 3 56.31 0.32 0.57 52.29 0.09 9.94
Ventersburg 4 2.83 3.90 2.86
Turnbridge 5 1.92 2.70 0.17
Goliath Gold 7 15.52 4.36 2.17
total Indicated 153.28 2.43 11.97 64.43 0.16 22.58
total Measured and Indicated 440.75 1.37 19.44 314.97 0.12 82.80
Inferred
Modder East 2 35.08 1.38 1.56
Cooke 1-3 Underground 3 15.26 4.50 2.21 2.63 0.54 3.12
Ventersburg 4 11.44 3.50 1.29
Turnbridge 5 3.88 2.73 0.34
New Kleinfontein 6 2.47 6.90 0.55
Goliath Gold 7 46.52 4.64 6.94
total Inferred 114.66 3.49 12.88 2.63 0.54 3.12
total Measured, Indicated and Inferred 555.41 1.81 32.32 317.59 0.12 85.93
1Mineral resources are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC standards). Mineral resources
are reported inclusive of ore reserves.
2Cut-off values have been reported using a gold price of ZAR450,000/kg (US$1750/oz and ZAR8:US$1).
3Cut-off values have been reported using a gold price of ZAR450,000/kg (US$1750/oz and ZAR8:US$1) and a uranium price of $65/lb, and an exchange rate of ZAR8:US$1.
The uranium tonnes are a subset of the gold tonnes.
4Cut-off values have been calculated using a gold price of US$1550/oz and an exchange rate of ZAR8:US$1. Signed-off by Dr I.C. Lemmer, independent resource consultant
to Gold One, audited by SRK Consulting.
5Signed-off by S. Meadon, SRK Consulting. Reported at a cut-off of 200 cmg/t, calculated using a gold price of US$1,250/oz and an exchange rate of ZAR8:US$1.
6Signed-off by Camden Geoserve, independent resource consultants to Gold One, audited by SRK Consulting. Reported at a cut-off of 200 cmg/t, calculated using a gold
price of US$750/oz and an exchange rate of ZAR7:US$1.
7Reported as 72% attributable to Gold One based on Gold Ones equity portion of Goliath Gold. Cut-off values have been calculated using a gold price of US$1130/oz and
an exchange rate of ZAR7.70:US$1.
GOLD ONE CONSOLIDATED MINERAL (ORE) RESERVE STATEMENT 1
GOLD URANIUM
GOLD URANIUM
TONNES GRADE CONTENT TONNES GRADE CONTENT
(Mt) (G/t) (MOz) (Mt) (kG/t) (MlbS)
Proved
Modder East 0.23 5.78 0.04
Cooke 1-3 Underground 2 5.25 4.48 0.76 1.17 0.43 1.10
Randfontein Surface 3 94.45 0.28 0.85 79.30 0.19 32.49
total Proved 99.93 0.51 1.65 80.47 0.19 33.59
Probable
Modder East 8.33 4.29 1.15
Cooke 1-3 Underground 2 4.26 5.23 0.72 1.06 0.50 1.16
Randfontein Surface 3 10.13 0.37 0.12 7.00 0.12 1.84
total Probable 22.73 2.72 1.99 8.06 0.17 3.00
Probable and Proved Reserves 122.65 0.92 3.64 88.53 0.19 36.59
1Mineral (ore) reserves are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC
standards). Mineral reserves are planned for extraction using a gold price of ZAR450,000/kg (US$1750/oz and ZAR8:US$1).
2Mineral reserves are planned for extraction using an uranium price of US$45/lb and ZAR8:US$1 up to end 2015 and an uranium price of US$65/lb
and ZAR8:US$1 from 2016.
3Mineral reserves are planned for extraction using an uranium price of US$65/lb and ZAR8:US$1.
OPERATIONS
MODDER EAST OPERATIONS
Modder East is Gold One’s flagship mine and is the only new mine to be built in South Africa’s historically rich East Rand Goldfield
in 30 years. Situated 30 kilometres east of Johannesburg, the operation comprises a shallow gold mine where the primary targets
are Black Reef and UK9A Kimberley Reef, which are situated between 300 and 500 metres below surface. Gold One advanced
Modder East from a greenfield exploration project through to production and the project currently has a 10 year life of mine.
Development at Modder East began in 2006 and the mine’s first gold was produced in July 2009.
Mining at Modder East employs a combination of conventional and mechanised mining techniques and access to the orebody is
via a trackless decline from surface to the footwall of the reef horizons. The decline serves as a roadway for vehicles to transport
material into and out of the mine while a vertical shaft provides transport for personnel as well as ventilation. Modder East also
has a dedicated gold treatment facility with a capacity of 100,000 tonnes per month.
The Modder East Operations have continued to ramp up in production and produced 97,958 ounces of gold at an average cash
cost of US$686/oz during 2012. This was derived from 474,754 Black Reef milled tonnes at an average recovered grade of 6.00
grams per tonne as well as the milling of 139,887 tonnes of low grade development ore and waste with an average recovered
grade of 1.43 grams per tonne. The Modder East Metallurgical Plant maintained recoveries of 95% for 2012.
As part of the transaction with the joint provisional liquidators representing Pamodzi Gold East Rand and its subsidiaries (see
‘Pamodzi East Rand Operations’ in the projects pipeline section of this Company Review) Gold One has applied for a prospecting
right covering the area that is immediately down dip and contiguous to Modder East. This application has been accepted by
the Department of Mineral Resources and is currently being processed. This largely unmined area is highly prospective with
surrounding mining data suggesting continuity of the UK9A orebody. The UK9A Reef currently comprises some 28% of Modder
East’s existing ore reserve and the down dip extension has the potential to substantially increase Modder East’s current mine
life of 10 years. Gold One intends confirming this down dip extension through a surface exploration drilling programme. The
contiguous down dip extension could be accessed through Modder East’s planned infrastructure, thus reducing the requirement
for substantial additional project capital and ensuring mining remains disconnected from historical flooded underground
workings.
Updated mineral resource and ore reserve estimations at Modder East have considered the depletion of mined mineral resources
during the year as well as an increased cut-off grade associated with anticipated increased costs. Minor changes to the UK9A
Reef mineral resource were considered where underground development has successfully exposed this orebody. The updated
resource estimates have been used to update the Modder East Operations’ life of mine and associated ore reserves. Mining
depletion and increased cut-off grades resulted in the total measured and indicted mineral resources decreasing year on year by
7% to 2.58 million ounces (including 28.38 million tonnes grading at 2.83 grams per tonne). Inferred mineral resources increased
by 19% to 1.56 million ounces (including 35.08 million tonnes grading at 1.38 grams per tonne). The increase in inferred mineral
resources was largely the result of enhanced geological modelling on the Black Reef Basal Unit (previously referred to as the
‘channel facies’), facilitated by underground exposure associated with on-reef Black Reef development.
Total ore reserves decreased by 11% to 1.19 million ounces (including 8.57 million tonnes at 4.33 grams per tonne) largely as a
result of mining depletion and, to a lesser extent, increased cut-off grades associated with increased costs.
MODDER EASt MINERAl RESOuRCE StAtEMENt 1
TONNES GRADE GOLD CONTENT
(Mt) (G/t) (MOz)
Measured
Buckshot Pyrite Leader Zone + Basal Unit 2 0.49 9.34 0.15
total Measured 0.49 9.34 0.15
Indicated
Buckshot Pyrite Leader Zone + Basal Unit 2 7.39 5.29 1.26
Black Reef Basal Unit 3 16.62 1.26 0.67
UK9A 4 3.53 4.10 0.47
Buckshot Pyrite Leader Zone 2 6 0.35 3.41 0.04
total Indicated 27.89 2.71 2.44
total Indicated and Measured 28.38 2.83 2.58
Inferred
Buckshot Pyrite Leader Zone + Basal Unit 2 1.42 2.11 0.10
Black Reef Basal Unit 3 19.30 0.69 0.43
UK9A 4 3.88 3.06 0.38
UK5 5 9.41 1.82 0.55
Buckshot Pyrite Leader Zone 6 1.06 2.99 0.10
total Inferred 35.08 1.38 1.56
total Resource 63.45 2.03 4.14
1 Mineral resources are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC standards).
Cut-off values have been reported using a gold price of ZAR450,000/kg (US$1750/oz and ZAR8:US$1). Mineral resources are reported inclusive of
ore reserves.
2 Signed-off by J. Glanville of Glanville Consulting, independent resource consultant to Gold One, audited by SRK. Reported at a cut-off of 171 cmg/t.
3 Signed-off by J. Glanville of Glanville Consulting, independent resource consultant to Gold One, audited by SRK, reported at a cut-off of 233 cmg/t.
4 Signed-off by Minxcon, independent resource consultants to Gold One, audited by SRK, restated at revised cut-off off at 166 cmg/t.
5 Signed-off by Minxcon, independent resource consultants to Gold One, audited by SRK, reported at a cut-off of 496 cmg/t.
6 Signed-off by Shango Solutions, independent resource consultants to Gold One, audited by SRK, reported at a cut-off of 141 cmg/t.
MODDER EAST MINERAL (ORE) RESERVE STATEMENT 1
TONNES GRADE GOLD CONTENT
(MT) (G/T) (MOZ)
Proved
Buckshot Pyrite Leader Zone + Basal Unit 2 0.23 5.78 0.04
total Proved 0.23 5.78 0.04
Probable
Buckshot Pyrite Leader Zone + Basal Unit 2 5.29 4.81 0.82
UK9A 3 3.04 3.38 0.33
total Probable 8.33 4.29 1.15
total Reserve 8.57 4.33 1.19
1 Mineral (ore) reserves are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC
standards). Mineral reserves are planned for extraction using a pay limit based on a gold price of ZAR450,000/kg (US$1750/oz and ZAR8:US$1).
2 Reported at a pay limit of 192 cmg/t .
3 Reported at a pay limit of 183 cmg/t .
COOKE 1-3 UNDERGROUND OPERATIONS
The Cooke Underground Operations are situated near Randfontein on the outskirts of western Johannesburg and comprise three
vertical shafts, namely, Cooke 1, 2 and 3, which are serviced by a developed network of mining and civil infrastructure with
adequate electricity and water supplies. Mining is shallow (less than 1,000 meters) with limited seismicity or heat challenges and
the underground orebodies are mined by means of conventional hard rock mining methods involving drilling, blasting, scraping,
tramming and hoisting. Ore mined at Cooke 1-3 is currently treated at the Cooke Gold Plant as well as at the nearby Doornkop
Plant where a toll-treatment agreement is in place with Harmony Gold Mining Company Limited.
The operations’ current shaft infrastructure is under-utilised, allowing for expansion as additional economic ore reserves are
defined. The primary mining horizons are the Elsburg, Kimberly and Ventersdorp Contact Reefs. In addition to gold deposits,
certain of these reefs, specifically at Cooke 2 and 3, host significant uranium deposits. Ongoing exploration and resource
development work has highlighted numerous potential resource extension opportunities and these areas have been prioritised as
the focus of further exploration activities. Successful exploration results in these areas have the potential to increase operational
flexibility as well as extend the operations’ life.
One of the key objectives associated with the acquisition of Rand Uranium was to re-establish the Cooke Underground
Operations as gold mines and subsequently develop uranium co-product potential. During 2012 the operational turnaround
strategy therefore focused on enhancing gold operational flexibility and efficiency.
For the 2012 year, the Cooke 1-3 Underground Operations produced 98,451 ounces at an average cash cost of US$1,558/oz. This
production was derived from the treatment of 961,802 milled tonnes at an average recovered grade of 3.17 grams per tonne as
well as the treatment of 39,650 milled tonnes of low grade development and waste material at an average recovered grade of
0.34 grams per tonne. Plant recoveries for the operation were 95% for 2012.
A feasibility study was completed during the year under review on a high uranium yielding area at Cooke 3, which consists of both
unmined ground and a number of higher grade pillars. The area (referred to as the Priority Area 2 and water pillar) is associated
with existing underground development. The feasibility considers uranium extraction through the Cooke 4 Uranium Plant. Phase
1 of the uranium plant upgrade will see the 50,000 tonne per month module operating at full capacity at an estimated capital
cost of ZAR13 million (US$1.55 million). The company envisages commencing the uranium co-product strategy during 2013.
The previous resource estimation completed at the Cooke 1-3 Underground Operations was undertaken in June 2010. Gold
One’s complete review of the Cooke 1-3 Underground Operations’ mineral resources and mineral (ore) reserves has included
revised geological modelling (where appropriate), additional information obtained from underground operations since June
2010, increased cut-off grades associated with increased mining costs and revised commodity prices, and depletion of the
mineral resource due to mining activities since 2010. Mineral resource classification criteria were also reviewed considering
geostatistical parameters utilised for resource estimation.
Total measured and indicated mineral resources increased by 4% to 8.93 million ounces grading at 4.67 grams per tonne, while
inferred mineral resources increased by 26% to 2.21 million ounces grading at 4.50 grams per tonne. The overall increase in gold
mineral resources is largely due to increased resources associated with the Kimberley and Elsburg Reef Horizons at the Cooke
1 Shaft, where enhanced geological modelling facilitated the definition of additional mineral resources not previously defined.
Mineral resources at the Cooke 2 and 3 Shafts decreased by 28% and 5% respectively due to increased cut-off grades associated
with increasing costs and mining depletion.
Uranium resources at the Cooke 1-3 Underground Operations include a total of 31.15 million pounds (including 29.49 million
tonnes grading at 0.48 kilograms per tonne); a 31% decrease in total uranium resources relative to the June 2010 mineral resource
estimation. This decrease is largely due to revised mineral resource classifications and increased cut-off grades associated with
increased costs and decreased commodity prices. Measured and indicated uranium mineral resources comprise 28.03 million
pounds grading at 0.47 kilograms per tonne, a 19% decrease relative to previous estimations, and inferred mineral resources
include 3.12 million pounds grading at 0.54 kilograms per tonne, a 71% decrease relative to previous resource estimations.
Total gold (ore) reserves at the Cooke 1-3 Underground Operations have decreased from 1.96 million ounces (including 16.47
million tonnes at 3.70 grams per tonne) in 2010 to 1.47 million ounces (including 9.51 million tonnes at 4.82 grams per tonne).
The updated gold (ore) reserves have considered mining depletion since June 2010 as well as increased cut-off grades associated
with higher mining costs. Although the increased cut-off grades have negatively impacted the total gold content, (ore) reserve
grades have increased by 30%. Uranium ore reserves have decreased from 6.16 million pounds (including 9.71 million tonnes
grading at 0.29 kilograms per tonne) in 2010 to 2.26 million pounds (including 2.23 million tonnes grading at 0.46 kilograms per
tonne). The substantial reduction in underground uranium ore reserves is largely as a result of increased cut-off grades associated
with reduced commodity prices and increased costs. This is reflected in the substantial increase in uranium ore reserve grade of
59%. On-going uranium modelling is continuing to optimise the potential co-product nature of the Cooke mineral resources.
COOKE 1-3 UNDERGROUND MINERAL RESOURCE STATEMENT 1
GOLD URANIUM
GOlD URANIUM
TONNES GRADE CONTENT TONNES4 GRADE CONTENT
(MT) (G/T) (MOZ) (MT) (KG/T) (MLBS)
Measured
Cooke 1 9.41 4.73 1.43 0.69 0.26 0.40
Cooke 2 8.76 4.92 1.38 3.50 0.38 2.95
Cooke 3 12.53 5.84 2.35 10.53 0.52 12.04
total Measured 30.70 5.24 5.17 14.72 0.47 15.39
Indicated
Cooke 1 13.68 3.74 1.64 0.29 0.27 0.17
Cooke 2 3.07 4.55 0.45 1.81 0.34 1.36
Cooke 3 12.06 4.31 1.67 10.04 0.50 11.11
total Indicated 28.81 4.06 3.76 12.14 0.47 12.64
total Indicated and Measured 59.51 4.67 8.93 26.86 0.47 28.03
Inferred
Cooke 1 6.36 3.71 0.76 0.16 0.36 0.13
Cooke 2 1.06 5.50 0.19 0.37 0.30 0.24
Cooke 3 7.84 5.01 1.26 2.09 0.60 2.75
total Inferred 15.26 4.50 2.21 2.63 0.54 3.12
total Resource 74.77 4.63 11.14 29.49 0.48 31.15
1 Mineral resources are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC standards).
Mineral resources are reported inclusive of ore reserves. Where ore is to go through the uranium recovery plant, the gold mineral resources must have
a gold equivalent cut-off of 2.9 g/t, or a combined gold cut-off grade of 2.5 g/t with an uranium fraction cut-off at 0.184kg/t. The gold equivalent
grade is calculated as 1g/t Au = 0.466 kg/t U3O8. The U3O8 mineral resource is declared at a cut-off grade of 0.184 Kg/t within the gold resource,
or as a co-product with gold at the gold equivalent cut-off of 2.9 g/t. The gold equivalence ratio is calculated at a gold price of $1750/oz and at a
uranium price of $65/lb, and an exchange rate of ZAR8:US$1. The U3O8 tonnes are a subset of the Au tonnes. The balance of the Au tonnes contain
gold above the gold cut-off grade but uranium below the uranium cut-off grade, and will therefore bypass the uranium recovery plant. Signed-off by
Dr I.C. Lemmer, independent resource consultant to Gold One, audited by SRK Consulting.
COOKE 1-3 UNDERGROUND MINERAL (ORE) RESERVE STATEMENT 1
GOLD URANIuM
GOLD URANIUM
TONNES GRADE CONTENT TONNES GRADE CONTENT
(MT) (G/T) (MOZ) (MT) (KG/T) (MLBS)
Proved
Cooke 1 0.29 4.84 0.05
Cooke 2 1.36 4.98 0.22
Cooke 3 3.59 4.26 0.49 1.17 0.43 1.10
total Proved 5.25 4.48 0.76 1.17 0.43 1.10
Probable
Cooke 1 0.69 9.63 0.21
Cooke 2 0.30 6.97 0.07
Cooke 3 3.27 4.14 0.44 1.06 0.50 1.16
Total Probable 4.26 5.23 0.72 1.06 0.50 1.16
Total Reserve 9.51 4.82 1.47 2.23 0.46 2.26
1 Mineral (ore) resreves are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC
standards). The mineral reserves are planned for extraction using a pay limit that is based on a gold price of ZAR450,000/kg (US$1750/oz and
ZAR8:US$1) and an uranium price of US$45/lb and ZAR8:US$1 up to end 2015 and an uranium price of US$65/lb and ZAR8:US$1 from 2016. Pay
limit values are 4.55 g/t, 4.63 g/t and 4.15 g/t for Cooke 1, Cooke 2 and Cooke 3 respectively. Audited by SRK Consulting.
COOKE 4 UNDERGROUND OPERATIONS
Cooke 4 is contiguous to Gold One’s Cooke 1-3 Operations and is an underground mine that has two primary tabular orebodies
approximately 400 metres vertically apart. The Upper Elsburg orebody, where the majority of mining has been done to date, is
primarily gold bearing. The Middle Elsburg orebody is a gold and uranium bearing deposit that has been less extensively mined.
The establishment of Cooke 4 was substantially completed during the last quarter of 2009 while the operation was still under
the ownership of First Uranium. This included the rehabilitation and re-engineering of the main shaft through the installation of
a floating steel tower and the construction of a gold plant with nameplate capacity of up to 200,000 tonnes per month and a
uranium plant with nameplate capacity of up to 100,000 tonnes per month.
As Cooke 4 was historically part of the larger Cooke 1-3 Underground complex, Gold One’s immediate focus has been right-sizing
the operation, which was completed during December 2012, and integrating Cooke 4 into the existing Cooke 1-3 Underground
Operations. The planned turnaround programme and shared synergies between the four shafts will reduce operating costs and
increase operational efficiencies. With access to Cooke 4’s uranium processing facility, Gold One can unlock the value of the joint
underground resources and begin capitalising on a gold and uranium co-product strategy.
Since Gold One assumed managerial control, Cooke 4 produced gold in the months of August, September and December only
due to illegal industrial action that temporarily halted the operation during October and November. For the three months 8,493
ounces were produced. Total production for 2012 comprised 82,951 milled tonnes at an average recovered grade of 3.18 grams per
tonne. Due to the fact that the metallurgical plant was stopped for two months during the illegal industrial action, plant recoveries
averaged 82% over the reporting period.
RANDFONTEIN SURFACE OPERATIONS
The Randfontein Surface Operations host gold and uranium surface resources on its mining property, including the Cooke
Tailings Dam, Millsite, Lindum, Dump 20 Slime and the Old 4 Dam. These resources present a pipeline of economically attractive
opportunities that could significantly expand the existing surface treatment operations.
The Cooke Gold Plant, which is located on the Randfontein Surface Operations’ property, has been processing the mechanically
reclaimed Dump 20 sand for the past five years at a rate of approximately 300,000 tonnes per month. Tailings residues have
been deposited onto the Cooke Tailings Dam. The plant is a conventional gold recovery circuit with milling of the coarse sand
feed in a closed circuit and is able to mill both reef from the Cooke Underground Operations and sand material from Dump 20.
The historical gold head grade for the reclaimed Dump 20 material has averaged 0.46 grams per tonne with recoveries averaging
72%. This has resulted in a residue grade of 0.123 grams per tonne which is among the lowest in the South African industry
for these types of surface treatment operations. During 2012 the Cooke Gold Plant Optimisation Project was initiated, and is
discussed in further detail under the projects section on this Company Review.
For the 2012 year the Randfontein Surface Operations produced 36,853 ounces from 3,286,633 milled tonnes at an average
cash cost of US$1,137/oz. Recovered grades during the year averaged 0.349 grams per tonne, with a gold recovery rate of 72%.
An extensive exploration drilling programme was undertaken at the Randfontein Surface Operations during 2012 and included
the drilling of Dump 20, Dump 4, the Millsite Complex and the Cooke 2 Slimes. These drilling results, combined with additional
drilling undertaken by Rand Uranium of the Cooke Dam in 2010, were utilised to update the mineral resources and mineral (ore)
reserves of the surface resources.
Total surface resources include 2.72 million ounces of gold grading at 0.271 grams per tonne, all of which are in the measured
and indicated resource categories. This represents a 12% decrease relative to previous resource estimations. This reduction
in resources is due to depletions associated with the mining of Dump 20 as well as enhanced exploration drilling information.
Due to the extensive exploration drilling programme at the Millsite Complex, the uranium mineral resources increased by 23%
to 54.78 million pounds (grading at 86 grams per tonne). Despite continued mining of Dump 20 the definition of additional
surface resources at Dump 20 and Cooke 2 have facilitated only a marginal reduction in total gold (ore) reserves from 0.99
million ounces (grading at 0.32 grams per tonne) in 2010, to 0.97 million ounces (grading at 0.29 grams per tonne). Uranium
(ore) reserves associated with the Cooke Dam have remained largely unchanged at 34.33 million pounds, including 86.3 million
tonnes grading at 181 grams per tonne.
RANDFONTEIN SURFACE MINERAL RESOURCE STATEMENT 1,2
GOLD UANIUM
GOLD URANIUM
TONNES GRADE CONTENT TONNES GRADE CONTENT
(MT) (G/T) (MOz) (Mt) (KG/T) (MLB)
Measured
Cooke Dam 2 79.30 0.264 0.68 79.30 0.186 32.49
Lindum 1 and 2 3 5.32 0.261 0.04
Millsite Complex Dump 38 4 18.14 0.267 0.16 18.14 0.063 2.53
Millsite Complex Dump 39 4 65.83 0.244 0.52 65.83 0.026 3.71
Millsite Complex Dump 40/41 4 61.36 0.253 0.50 61.36 0.040 5.46
Millsite Complex Dump 39 Buttress 4 3.49 0.263 0.03 3.49 0.016 0.12
Valley Dam 4 7.70 0.214 0.05 7.70 0.031 0.52
Dump 20 Sand 3 4.04 0.460 0.06
Dump 20 Slime Main 5 7.99 0.350 0.09
Dump 20 Slime NW 5 2.85 0.260 0.02
Cooke 2 Slimes 0.27 0.530 0.05
total Measured 256.28 0.261 2.15 235.82 0.086 44.84
Indicated
Cooke Dam 2 7.00 0.400 0.09 7.00 0.119 1.84
Lindum 1A and 3 3 0.89 0.480 0.01
Dump 20 Slime Main 5 3.05 0.320 0.03
Dump 20 Slime NW 5 0.08 0.240 0.00
Old No.4 Dump 4 45.29 0.299 0.43 45.29 0.081 8.10
total Indicated 56.31 0.315 0.57 52.29 0.086 9.94
total Indicated and Measured 312.59 0.271 2.72 288.11 0.086 54.78
Inferred
Total Inferred 0.00 0.00 0.00 0.00 0.00 0.00
Total Resource 312.59 0.271 2.72 288.11 0.086 54.78
1 Mineral resources are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC standards)
considering a gold price of ZAR450,000/kg (US$1750/oz and ZAR8:US$1) and an uranium price of US$65/lb and ZAR8:US$1. Total in-situ mineral
resources are estimated. Mineral resources are reported inclusive of ore reserves.
2 Signed-off by SRK Consulting, independent resource consultants to Gold One.
3 Mineral Resources as declared by Rand Uranium (2010) prior to Gold One acquisition and currently under review by Gold One.
4 Signed off by Mr C Muller of Minxcon, independent resource consultant to Gold One.
5 Signed-off by Mr F de Bruin of Deswik Mining Consultants, independent resource consultants to Gold One.
RANDFONTEIN SURFACE MINERAL (ORE) RESERVE STATEMENT 1,2
GOLD URANIUM
GOLD uRANIuM
TONNES GRADE CONTENT TONNES GRADE CONtENt
(MT) (G/T) (MOZ) (MT) (KG/t) (Mlb)
Proved
Cooke Dam 79.30 0.264 0.68 79.30 0.186 32.49
Dump 20 Sand 4.04 0.460 0.06
Dump 20 Slime Main 7.99 0.350 0.09
Dump 20 Slime NW 2.85 0.260 0.02
Cooke 2 Slimes 0.27 0.530 0.05
total Proved 94.45 0.280 0.85 79.30 0.186 32.49
Probable
Cooke Dam 7.00 0.400 0.09 7.00 0.119 1.84
Dump 20 Slime Main 3.05 0.320 0.03
Dump 20 Slime NW 0.08 0.240 0.00
total Probable 10.13 0.375 0.12 7.00 0.119 1.84
total Reserve 104.58 0.289 0.97 86.30 0.181 34.33
1 Mineral (ore) reserevs are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC
standards) considering a gold price of ZAR450,000/kg (US$1750/oz and ZAR8:US$1) and an uranium price of US$65/lb and ZAR8:US$1.
2 Mineral reserves considers the total extraction of in-situ mineral resources.
PROJECTS PIPELINE
COOKE GOLD PLANT OPTIMISATION PROJECT
The Cooke Gold Plant Optimisation Project is intended to increase the Cooke Gold Plant’s nameplate capacity from
300,000 tonnes per month to 400,000 tonnes per month to achieve improved economies of scale, reduce plant
operating costs, and secure an alternative deposition site to the Cooke Dump. The principal opportunity that has been
identified is to change the surface reclamation strategy from a sand-only mechanically reclaimed source to a combination
of hydraulically reclaimed slimes and mechanically reclaimed sand, thereby reducing reclamation costs and plant milling
costs. The tailings residue will be deposited into abandoned open pits, which will provide deposition capacity until
approximately 2018.
During 2012 significant progress was made with the project’s engineering design and costing. The pipeline route and
specialist environmental studies were concluded. Submissions to obtain authorisation to proceed with construction in early
2013 were also made, and orders for long lead time items were placed.
Construction of the project is planned to commence during early 2013.
COOKE PILLAR EXTRACTION PROJECT
Significant opportunities have been identified at the Cooke Underground Operations to mine historical gold bearing
pillar areas. These areas could be selectively extracted at high margins that would impact positively on total mine
profitability and mining flexibility. The feasibility study considering the implementation of backfill at the Cooke 2 and
Cooke 3 Shafts is well advanced. At Cooke 2 the reserve scheduling of the initial Venterdorp
Contact Reef and the UE7 footwall targets has been completed, indicating an initial target in excess of 80,000
ounces of recoverable gold. Further detailed investigations into adjacent Venterdorp Contact Reef and UE7 areas at
Cooke 2 are currently being conducted. At Cooke 3 A1 pillar re-mining and A2 Reef horizon potential are also being
investigated.
Preliminary backfill plant designs have been completed and detailed design will commence during the March 2013
quarter. Indicative construction periods are between eight and 12 months after the receipt of environmental authorisation.
WEST RAND TAILINGS JOINT VENTURE
At the beginning of 2011 Gold One announced that it had entered into a memorandum of understanding with Gold
Fields to investigate the feasibility of establishing a joint venture in which both parties will contribute surface tailings
deposits in the West Rand of Johannesburg for retreatment. These joint tailing are expected to comprise in excess of 700
million tonnes and represent over 60% of the total tailings material in the region.
A detailed joint scoping study was completed during 2012 and a decision was taken to fast-track to a joint pre-feasibility
assessment given the significant amount of technical and economic work that has already been undertaken by the
two companies. During the pre-feasibility assessment a comprehensive metallurgical test work programme will be
carried out on Gold One’s Millsite and Old 4 Dam tailings facilities and further strategic phasing of capital and scheduling
of available feed material will also be optimised. The outcome of the pre-feasibility study is expected during the September
2013 quarter. Following Gold Fields’s unbundling of its South African assets (excluding South Deep) into Sibanye Gold
during November 2012, the joint venture is continuing with Sibanye Gold.
VENTERSBURG
The Ventersburg exploration project represents Gold One’s most advanced exploration project and is located in the South
African Free State Goldfield. A feasibility study is currently being undertaken and is primarily aimed at validating and
refining the mine design criteria and associated costing considered during the pre-feasibility study.
Drilling of the eastern payshoot at Ventersburg was undertaken during 2011 and this was completed during 2012, confirming
the open ended nature of the eastern most payshoot area. Infill drilling was also completed with the objective of
enhancing confidence in the initial five years of mine planning. In addition, a light detecting area ranging survey was carried
out to facilitate the completion of the surface infrastructure design. Mine design criteria have been validated and refined
and metallurgical test work, infrastructure designs and specialist studies are all underway.
The Ventersburg feasibility study is expected to be completed during the September 2013 quarter.
MODDER NORTH
Modder North is located approximately six kilometres north of Modder East and falls within Modder East’s current mining
licence area. Exploration commenced at the project during the June 2011 quarter with a view to test both the shallow (less
than 500 metres) unmined areas of the Main Reef as well as potential Black Reef occurrences north of the current Modder
East Operations. This exploration has continued during 2012. Assay results received during the year have defined potential
higher grade channelised areas (payshoots) of Main Reef and isolated intersections of well mineralised Black Reef that
appear to be more channelised than the Black Reef currently mined at Modder East.
A preliminary structural geological model for the Main Reef has been completed and an initial target area been defined.
Broader isolated Black Reef targets have also been defined. The exploration drilling will be used to estimate a mineral
resource during the March 2013 quarter. This resource in turn will underpin a pre-feasibility study at the Modder North Project.
TULO
The Tulo exploration target comprises a shear hosted gold mineralisation target situated 20 kilometres south of Tanzania
in the north-western part of Mozambique. A high resolution helicopter-borne geophysical survey of Tulo was completed
during 2012 and identified a 20.5 kilometre magnetic lineament. Mapping, trenching and sampling of a prominent
two kilometre quartz vein outcrop that forms the southern portion of the 20.5 kilometre magnetic lineament has been
carried out and 47 trenches had been excavated by the end of December 2012. Of these trenches, 40 exposed quartz
veining which was subsequently sampled. Assay results from the sampling are anticipated to be received and reviewed
during the March 2013 quarter and will be used to define an exploration drill programme planned for 2013.
NEW KLEINFONTEIN AND TURNBRIDGE
Exploration for New Kleinfontein and Turnbridge focuses on the shallow portions (less than 500 metres below surface)
of the properties where the Main Reef has previously been selectively mined. The primary exploration target at
New Kleinfontein and Turnbridge is the shallow remnant (unmined) portions of the Main Reef. A mineral resource
estimate was completed at the project during 2011. On the basis of the updated resources, a detailed scoping study has
been completed at the project targeting only the indicated portions of the updated resource. Although the scoping
study suggested positive results for the project, Gold One is currently evaluating both strategic and technical alternatives
regarding the further development of this asset, particularly in light of the potential transaction with the joint provisional
liquidators representing Pamodzi Gold East Rand and its subsidiaries.
PAMODZI EAST RAND OPERATIONS
On 17 April 2012 Gold One announced that the company had entered into an acquisition agreement through its subsidiaries
New Kleinfontein Mining Company Limited and Goliath Gold to acquire prospecting rights over the areas covered by
the mining rights held by The Grootvlei Proprietary Mines Limited, Consolidated Modderfontein Mines 1979 Limited
and Nigel Gold Mining Company (Pty) Limited for a total of ZAR70 million. The prospecting applications have been
formally accepted by the Department of Mineral Resources and it is expected that the approval process will be completed by
31 July 2013.
DIRECTORS' REPORT
The directors present their report on the consolidated entity consisting of Gold One and the entities it controlled for the year
ended 31 December 2012.
1. DIRECTORS
The directors of Gold One at the date of this report are as follows:
DIRECTOR DATE OF APPOINTMENT NATIONALITY INDEPENDENCE
Christopher Chadwick 25 May 2009 South African Executive
Yalei Sun 1 March 2012 Chinese Not independent
Mike Solomon 1 March 2012 South African Independent
Allan Liu 1 March 2012 Chinese Independent
Robert Chan 1 March 2012 Chinese Independent
Chao Zhou 1 March 2012 Chinese Not independent
Neal Froneman was an executive director from the beginning of the year until his resignation on 31 December 2012.
Mark Wheatley, Kenneth Winters, Barry Davison and Ming Liao were non-executive directors from the beginning of the year until
their resignations on 30 December 2012.
Kenneth Dicks, William Harris and Sandile Swana were non-executive directors from the beginning of the year until their
resignations on 29 February 2012.
Ya lei Sun
Non-Executive Chairman
Yalei is a director of the CITIC Group, assistant to the CEO of the CITIC Group and the vice-chairman and CEO of the CITIC
Guoan Group. Yalei is also vice-chairman of Baiyin Nonferrous Group and is a graduate of the People’s University of Industry
and Economic Management. Yalei previously served as CEO and as vice-chairman of CITIC Guoan Information Industry
Company.
Christopher Chadwick
CFO and Acting CEO - B.Compt (Hons), CTA, CA(SA)
Christopher completed his articles at Deloitte and qualified as a chartered accountant in 1991. Christopher has held
executive positions in a wide range of industries including the information technology and fast moving consumer
goods industries, and has worked with both South African companies and multinationals. Christopher was appointed
CFO of Aflease Gold in July 2008.
Michael Solomon
Non-Executive Director - BSc, MDP
Michael has 31 years professional experience as a mining engineer in gold, platinum, diamonds and base metals and
some 17 years’ experience as a consulting engineer with SRK Consulting, EL Bateman and The Mineral Corporation.
From 1992 to 1994 Michael was a member of the African National Congress Minerals and Energy Group and after the
1994 elections he served as senior policy analyst and head of minerals policy with the Minerals and Energy Policy Centre.
Michael was appointed CEO of Wesizwe Platinum in 2004 and retired in 2010.
Allan Liu
Non-Executive Director - MbA
Allan is a managing partner of PAG Capital and has over 25 years’ experience in advising and executing investments in
China, particularly in the consumer and retail sectors. Prior to working at PAG Capital, Allan worked with American
International Group (“AIG”) from 1995 and was the president and co-founder of the China Retail Fund (co-sponsored by
AIG). From 1981 Allan advised on entry strategies into China to many of the world’s leading multinational companies such as
Procter & Gamble, American Standard, Revlon and ProLogis, and has been instrumental in executing over US$2 billion in
foreign direct investments. Allan’s private equity investment experience started in 1991 where he was an adviser to the
Blackstone Group for its China expansion strategy. In addition to sitting on the boards of several portfolio companies, Allan
is also a founding board member and vice chairman of Beijing Private Equity Association.
Robert Chan
Non-Executive Director - MBA
Robert is an experienced banker with over 37 years of experience in both commercial and investment banking having
worked in London, Malaysia, and Singapore. Robert has served as independent non-executive director of Noble Group since
1996 and holds a bachelor of science (economics) honours degree and a master’s degree in business administration.
Robert is also a fellow of the Hong Kong Institute of Directors.
Chao Zhou
Non-Executive Director - MBA
Robert is an experienced banker with over 39 years of experience in both commercial and investment banking
having worked in London, Malaysia, and Singapore. Robert retired from the United Overseas Bank on 31 December 2011
after 35 years of service, 25 years of which he was CEO. Robert has served as independent non-executive director of Noble
Group since 1996. He is also an independent non-executive director of Hutchison Port Holdings Trustees, the Trustee-
Manager of Hutchison Port Holdings Trust, a business trust listed in Singapore, as well as Quam Limited which is listed in
Hong Kong. He is currently chairman (non-executive director) of The Hour Glass (HK). Robert holds a bachelor of science
(economics) honours degree and a master’s degree in business administration. Robert is also a fellow of the Hong Kong
Institute of Directors.
2. DIRECTORS’ MEETINGS
The number of meetings of directors (including committee meetings) held during the year and the number of meetings attended
by each director while they were directors are as follows:
BOARD MEETINGS AUDIT REMUNERATION SAFETY GOVRNANCE
C Chadwick 5/5 - - - -
Y Sun 1/4 - - - -
L Sun* 3/4 - - - -
M Solomon 4/4 2/2 - 4/4 2/2
A Liu 2/4 - 2/3 - -
R Chan 4/4 2/2 - - 2/2
C Zhou 3/4 - - - -
M Wheatley 5/5 - 3/3 - 2/2
K Winters 5/5 3/3 - - -
N Froneman 5/5 - - 4/4 -
B Davison 5/5 - 3/3 - 2/2
K Dicks 1/1 - - - -
W Harris 1/1 1/1 - - -
S Swana 1/1 1/1 - - -
M Liao 3/4 - - - -
P Lee** 1/4 - - - -
* L Sun serves as alternate director for Y Sun.
** P Lee served as alternate director for M Liao.
The constitution requires that any five directors be present at a board of directors meeting to form a quorum.
3. COMPANY SECRETARIES
Pierre Kruger
BCom, LLB, H Dip Company Law
Pierre was appointed the company secretary of Aflease Gold in January 2007 and company secretary of Gold One, based
in South Africa, on 25 May 2009. Prior to his appointment as company secretary he served as a non-executive director
on the Aflease Gold board. Pierre practised as an attorney, conveyancer and notary public for a period of 26 years prior
to joining the group fulltime in January 2007.
Kim Hogg
BCom
Kim was appointed as a company secretary of Gold One, based in Australia, on 15 Janaury 2013 and holds a bachelor of
commerce degree from the University of Western Australia. Kim is a partner at Anthony Ho and Associates.
4. Principal Activities and Nature of Operations
Gold One is an ASX and JSE listed mid-tier mining group with gold operations and gold and uranium prospects across
Southern Africa, and is focused on developing and mining low technical risk, high margin precious metal resources in
diversified mining friendly jurisdictions. At the beginning of 2012 the Gold One group expanded with
the acquisition of Rand Uranium, consisting of the Cooke 1-3 Underground Operations and the Randfontein Surface
Operations located in the West Rand, 30 kilometres from Johannesburg. During mid-2012 Gold One also completed a
transaction with First Uranium and acquired the Ezulwini Mine, giving the company access to gold and uranium metallurgical
processing plants with nameplate capacities of 200,000 and 100,000 tonnes per month, respectively. Ezulwini is
contiguous to the company’s Cooke 1-3 Underground and Randfontein Surface Operations and was historically known
as the Cooke 4 Shaft. Access to Ezulwini’s uranium production facility will allow for near term production of uranium from
underground ore mined from the Cooke Shafts and the sharing of services between Ezulwini and the Cooke Underground
Operations will facilitate a reduction in operating costs. An integrated plan incorporating Ezulwini into the greater Cooke
Underground Operations is underway.
These assets, together with Gold One’s flagship Modder East gold mine located in Johannesburg’s East Rand, produced
241,755 ounces for the 2012 year. This is compared to 123,179 ounces produced during 2011 and was achieved
amid disruptive illegal industrial action that took place at the Modder East Operation during June 2012 and at Cooke
4 during October 2012. Gold One’s operations are supported by a significant project pipeline comprising both gold and
uranium resources in various stages of development, from feasibility and pre-feasibility studies to greenfield exploration
projects across Southern Africa.
5. OPERATING AND FINANCIAL REVIEW
The Company Review commencing on pages 6 to 17 of this annual report provides the operating review of the group during the
year and subsequent to the reporting date.
OPERATING RESULTS FOR THE PERIOD
The results for the year ended 31 December have been characterised by impressive performance under challenging operating
conditions in the South African mining environment. Modder East’s gold production amounted to 97,958 ounces. Rand Uranium
and Ezulwini, acquired during 2012, contributed a further 143,797 ounces of gold production. As a result of the increased gold
production and higher achieved gold prices, revenue from gold sales increased from A$188,260 million in 2011 to A$381,633
million in 2012. The resulting gross profits have declined, however, to A$46.198 million (2011 - A$105.847 million) as a result of
the industry wide strike action and certain operational challenges at the Cooke Underground Operations.
Noteworthy during the period was the broad-based black economic empowerment arrangements that were entered into, which
resulted in a once-off non-cash charge of A$28.685 million for the life of mine. These agreements were entered into in order to
comply with the requirements set out in the South African Mining Charter. Further details are provided in note 31 to the financial
statements.
Included in profit for the year was a gain on bargain purchase amounting to A$107.206 million, which the Gold One Group
recorded as a result of the bargain purchase of Rand Uranium and Ezulwini. Of this gain A$5 million relates to the purchase
of Ezulwini and is a provisional amount which will be finalised in 2013. Further details are provided in note 11 to the financial
statements.
Cash balances at the end of the year decreased to A$37.008 million (2011 – A$209.492 million) primarily as a result of the
funding of the acquisition of Rand Uranium on 1 January 2012. The higher shareholder and external debt funding used to acquire
Ezulwini and Goliath Gold resulted in an increase in the finance costs to A$14.318 million (2011 – A$3.632 million).
Headline earnings/loss for the period is the profit and/or loss per period adjusted for profits and/or losses attributable to once-off
expenses and capital gains or losses. The disclosure of headline earnings/loss per share is a requirement of the JSE.
CONSOlIDAtED
2012 2011
Headline (Loss)/Earnings per Share (A$) (0.03) 0.06
Calculated based on:
Weighted average number of fully paid ordinary shares 1 416 121 311 8 403 671
headline (loss)/Earnings for the Period (A$ ’000) (43 835) 50 106
Reconciliation of basic and headline (loss)/Earnings for the Period (A$ ’000)
Profit/(loss) for the year 30 152 49 893
Impairment of assets 4 385 134
Gain on sale of assets 149 79
Black economic empowerment transactions 28 685 -
Gain on bargain purchase (107 206) -
headline (loss)/Earnings for the year (43 835) 50 106
SHARES ISSUED DURING THE PERIOD
- Exercise of listed options(13,674 at A$0.50)
- Shares issued in respect of the Tulo acquisition (113,618 shares at ZAR4.40; 132,354 shares at ZAR3.78 – non-cash)
- Exercise of unlisted options (2,899 shares at ZAR1.35; 47,101 shares at ZAR2.12; 29,000 shares at ZAR1.77; 1,067,000 sharesat ZAR3.13)
- Issued in respect of a mandatory offer to Goliath Gold shareholders (1,012,750 shares at ZAR4.05).
6. DiviDENDs
No dividends were declared or paid to shareholders during the financial year (2011 - A$ nil).
7. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than the foregoing and as referred to in the Company Review on pages 6 to 17, there were no significant changes in the
group’s activities during the financial year.
8. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
In the opinion of the directors, no matter or circumstance has arisen since 31 December 2012.
9. LIKELY DEVELOPMENTS, FUTURE BUSINESS STRATEGIES AND PROSPECTS
Comments on expected results of certain operations of the group are included in this annual report under the Company Review
on pages 6 to 17. Further information about the likely developments in the operations of the group in future years and the
expected results of those operations has been omitted from this Directors’ Report because disclosure of the information is, in the
directors’ opinion, likely to result in unreasonable prejudice to the group.
10. ENVIRONMENTAL REGULATION AND PERFORMANCE
The group’s operations are not subject to any significant environmental regulations under either Commonwealth or state
legislation, but are subject to numerous environmental regulations in South Africa, including the National Water Act (No. 36 of
1998), National Environment Management Act (No. 107 of 1998), National Nuclear Regulator Act (No. 47 of 1999), Waste Act
(No. 59 of 2008) and Air Quality Act (No. 39 of 2004). The board believes that the group has adequate systems in place for the
management of environmental regulations and is not aware of any breach of those environmental requirements as they apply
to the group.
11. DiRECTORS’ INTERESTS
To date, the interests of the directors in the shares of the company and related bodies corporate are:
NUMBER INDIRECTLY
DIRECTOR NUMBER DIRECTLY HELD HELD
Christopher Chadwick Unlisted options (Gold One)* 2 770 322 -
Unlisted options (Goliath Gold)** 1 000 000 -
*All options in Gold One have vested and are exercisable as at the date of this report.
**No options in Goliath Gold have vested as at the date of this report.
12. SHARE OPTIONS GRANTED TO DIRECTORS AND EXECUTIVES
No options over unissued ordinary shares of Gold One were granted during or since the end of the financial year to directors and
executives of the group.
The following options over ordinary shares in Goliath Gold were granted during the year:
NAME GRANT DATE EXPIRY DATE STRIKE PRICE NUMBER
Mark Wheatley 13/12/2012 13/12/2017 ZAR3.41 1 000 000
Christopher Chadwick 13/12/2012 13/12/2017 ZAR3.41 1 000 000
Pierre Kruger 13/12/2012 13/12/2017 ZAR3.41 1 000 000
Richard Stewart 13/12/2012 13/12/2017 ZAR3.41 1 000 000
UNISSUED SHARES
As at 31 December 2012, there were 41,169,326 unlisted share options outstanding, that, if exercised, would result in the
issue of 41,169,326 new shares in Gold One. Refer to note 39 of the financial statements for further details of the options
outstanding.
Option holders do not have any right by virtue of the option to participate in any share issue of the company, unless the
option holder exercises that option and becomes the holder of Gold One shares prior to the record date for the issue of
the shares.
Shares Issued as a Result of the Exercise of Options
The following ordinary shares in Gold One were issued during the year 31 December 2012 on the exercise of options. No
further shares have been issued since that date. No amounts are unpaid on any of the shares.
Grant
Date Currency Ex Price Total
12/10/2007 A$ 0.50 12 174
12/11/2007 ZAR 3.13 1 067 000
11/12/2008 ZAR 1.35 2 899
12/12/2009 ZAR 2.12 47 101
12/07/2010 ZAR 1.77 29 000
Grand total 1 158 174
13. INSURANCE AND INDEMNITIES OF
DIRECTORs AND OFFICERS
During the financial year the group paid a premium of A$81,112 (2011: A$65,278) to insure the directors and secretaries of the
company and its controlled entities and the general managers of each of its divisions.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of entities in the group, and any other payments arising from liabilities incurred
by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a
wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage
for them, or someone else, or to cause detriment to the company. It is not possible to apportion the premium between
amounts relating to the insurance against legal costs and those relating to other liabilities. Directors may obtain independent
professional advice at the expense of the company.
Under the Gold One Constitution the company, to the extent permitted by the Corporations Act 2001 (Cth), Trade Practices
Act 1974 (Cth) and any other applicable law, indemnifies every officer of the company and its wholly owned subsidiaries and
may indemnify its auditor against a liability incurred as such an officer or auditor, unless the liability arises out of conduct
involving a lack of good faith. The company may make a payment in respect of legal costs incurred by an officer or
employee or auditor in defending an action for a liability incurred as such an officer, employee or auditor, or in resisting
or responding to actions taken by a government agency or a liquidator.
14. Proceedings on Behalf of the Company
No person has applied to the court under section 237 of the Corporations Act 2001 (Cth) for leave to bring proceedings
on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
15. Remuneration Report
This remuneration report sets out the remuneration arrangements in place for directors and executives of the group
in accordance with the requirements of the Corporations Act 2001 (Cth) and its regulations.
Directors and key management personnel disclosed in this
report:
Name Position
Non-Executive and Executive Directors – see pages 18 to 20 above
W Robinson Executive Vice President: South African Operations
I Marais Executive Vice President: Modder East Operations
R Stewart Executive Vice President: Technical Services
P Kruger Group Company Secretary
R Plaistowe Senior Vice President: Surface Operations
During the year Wayne Robinson was appointed to the position of executive vice president: South African operations,
Neal Froneman resigned as CEO and Sydney Caddy resigned as senior vice president: operations.
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporation Act
2001 (Cth).
Principles Used to Determine the Amount and Nature of Remuneration
The performance of the company depends upon the calibre of its directors and executives. The following principles are
included in its remuneration framework to ensure maximum stakeholder benefits.
- Provide competitive remuneration packages to attract and retain high calibre executives
- Have a portion of executive remuneration ‘at risk’, dependent upon meeting pre-determined service periods
and performance benchmarks
- Periodically reassess the appropriateness of the nature and amount of executive emoluments by reference to
relevant employment market conditions
- Transparency
- Capital management.
In consultation with external remuneration consultants the group has structured an executive remuneration framework
that is market competitive, complementary to the reward strategy of the organisation, and aligned to shareholder’s and
executive’s interests.
Principles of alignment to shareholders’ interests:
- Has economic profit as a core component of plan design
- Focuses on sustained growth in shareholder wealth, consisting of dividends and growth in share price and
delivering constant return on assets as well as focusing the executive on key non-financial drivers of value
- Attracts and retains high calibre executives.
Principles of alignment to executive’s interests:
- Rewards capability and experience
- Reflects competitive reward for contribution to growth in shareholder wealth
- Provides a clear structure for earning rewards
- Provides recognition for contribution.
The framework provides a mix of fixed and variable pay and a blend of short and long term incentives. As executives gain
seniority within the group, the balance of this mix shifts to a higher proportion of ‘at risk’ rewards.
Non-Executive Directors’ Fees
The following fee structures applied during the financial year:
From 1 January to 29 February 2012 directors were entitled to a maximum annual fee, outlined below, which included a
meeting fee of A$7,500 for each quarterly board meeting. The meeting fee was deducted for each meeting not attended.
Title From 1 Jan
to 29 Feb 2012
(A$)
Non-Executive Chairman of the Board 140 400
Audit Committee Chairman 86 400
Non-Executive Directors 64 800
From 1 March 2012, following the reconstitution of the Gold One board, the annual fee structure was changed to
reflect the expanded size of the board and business and to take into account the additional demands on directors.
Title From 1 Mar 2012
(A$)
Non-Executive Chairman of the Board 70 000
Lead Independent Director 60 000
Non-executive Directors 40 000
Additional Fees
Audit Committee – Chair 10 000
Other Committee – Chair 5 000
Meeting Fee – Board 5 000
Meeting Fee – Operational Review* 5 000
Meeting Fee – Ad Hoc 1 000
Meeting Fee – Committee 1 000
Travel Fee (for travel in excess of six hours) 1 000
* Applicable to independent non-executive directors only.
Role of the Remuneration Committee
The Remuneration Committee is a committee of the board. It is primarily responsible for making recommendations to the
board on:
- Non-executive director fees
- Remuneration levels of executive directors and other key management personnel
- The over-arching executive remuneration framework and the operation of the incentive plan
- Key performance indicators and performance hurdles for the executive team.
The committee’s objective is to ensure that remuneration policies and structures are fair and competitive and are aligned
with the long-term interests of the company. In doing this, the Remuneration Committee seeks advice from independent
remuneration consultants.
The Corporate Governance Statement provides further information on the role of this committee.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive directors and executive
remuneration is separate and distinct.
Non-Executive Director Remuneration
Structure
Fees and payments to non-executive directors reflect the demands that are made on and the responsibilities of the
directors.
The constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be
determined from time to time by Gold One’s shareholders in general meetings. An amount, not exceeding the amount
determined, is then divided between the directors as agreed. The latest determination was at a general meeting
of shareholders held on 23 May 2012, where shareholders approved an aggregate remuneration of A$1,000,000 per
year to reflect the expanded size of the Gold One Board and the need to remunerate a greater number of directors.
The board seeks to set aggregate remuneration at a level that provides the company with the ability to attract and
retain directors of high calibre while incurring a cost that is acceptable to shareholders.
The amount of aggregate remuneration approved by shareholders and the manner in which it is apportioned
among directors is reviewed annually. The board considers advice from external consultants as well as the fees paid to
non-executive directors of comparable companies when undertaking the annual review process.
Executive Remuneration
Objective
The group aims to reward executives with a level and mix of remuneration commensurate with their position and
responsibilities within the group, so as to:
- Reward executives for group and individual performance against targets set by reference to appropriate benchmarks
- Align the interest of executives with those of shareholders
- Ensure that total remuneration is competitive by market standards.
Structure
Remuneration for executives is structured at a level that is market competitive and consistent with best industry practice
as well as supportive of the interests of shareholders, and has the following components:
- Base pay and benefits
- Short term performance incentives
Long term performance incentives through participation in employee option plans.
Base pay is structured as a total employment cost package that may be delivered as a combination of cash and prescribed
non-financial benefits at the executive’s discretion. Base pay for executives is reviewed annually to ensure that executives’
pay is competitive with the market. An executive’s pay is also reviewed on promotion. There is no guaranteed base pay
increase included in any executive’s contract.
Each executive has a short-term incentive opportunity depending on the accountabilities of their role and impact on
group performance. The maximum target bonus opportunity is 60% of base pay for the CEO and 50% of base pay for the
CFO and executive and senior vice presidents. For the year under review the key performance indicators were based on
financial, mining, safety and corporate development areas and were set individually across the executive team.
The performance objectives were set having regard to the current development of the company and have changed as
the company has moved from being a single operation to a multi mine production company. The board currently attaches
significant weight to the safety of operations, the attainment of development and production targets at the mining
operations and the profitability of the group and performance objectives are weighted accordingly.
The Remuneration Committee is responsible for determining whether performance objectives have been met. The
committee receives detailed information from management and external consultants to assist in making this assessment.
Short term incentive payments may be adjusted in line with under or over achievement against the target performance
levels. This is at the discretion of the committee.
Long term incentives have in the past been provided to the executives via the Gold One International Limited Share
Incentive Scheme, approved by the shareholders on 26 August 2009. The Scheme sets the maximum number of options that
may be granted to any one executive as well as the terms and conditions upon which options may be granted. The Scheme
further provides that, upon termination of employment, all unvested options immediately lapse. Vested options must
be exercised within 180 days of termination of employment, failing which they lapse. Options granted to executive
directors are only done so with the consent of shareholders obtained in general meeting and on such terms as may be
approved by the shareholders.
The number of options to be granted to any one employee is determined by the board on recommendation from the
Remuneration Committee. Details of the nature and amount of each element of the emolument of each director of the
company and each key management person of the company for the financial year follow below.
Share trading policy
The trading of shares issued to participants under any of the company’s employee equity plans is subject to, and
conditional upon, compliance with the company’s employee share trading policy.
Use of remuneration consultants
In February 2012, Gold One’s Remuneration Committee employed the services of McDonald & Company (Australasia)
Pty Limited (“McDonald”) to review its existing remuneration policies and provide recommendations in respect of both
executive and non-executive short term and long term incentive plan design. These recommendations also covered
the group’s key management personnel. Under the terms of the engagement, McDonald provided remuneration
recommendations as defined in section 9B of the Corporations Act 2001 (Cth) and was paid A$16,250 for these services.
McDonald has confirmed that the above recommendations have been made free from undue influence from members of
the group’s key management personnel.
The following arrangements were made to ensure that the remuneration recommendations were free from undue
influence:
- McDonald was engaged by, and reported directly to, the lead independent director. The agreement for the provision
of remuneration consulting services was executed by the lead independent director under delegated authority on
behalf of the board.
- The report containing the remuneration recommendations was provided by McDonald directly to the lead
independent director
- McDonald was permitted to speak to management throughout the engagement to understand company processes, practices
and other business issues and to obtain management perspectives
- McDonald was not permitted to provide any member of management with a copy of its draft or final report that contained
remuneration recommendations.
As a consequence, the board is satisfied that the recommendations were made free from undue influence from any of the key
management personnel.
VOtING AND COMMENTS MADE AT THE COMPANY’S 2012 ANNUAL GENERAL MEETING
Gold One received more than 99% of ‘yes’ votes on its remuneration report for the 2011 financial year. The company did not
receive any specific feedback on its remuneration process at the annual general meeting or throughout the year.
table 1: Directors and Executives’ Remuneration for the year Ended 31 December 2012
SHARE
POST BASED
SHORT TERM EMPLOY- PAYMENTS:
SALARY AND/ PERFORMANCE RETENTION MENT SUPER- EQUITY
OR FEES BONUS* BONUS ANNUATION OPTIONS^ TOTAL
NAME A$ A$ A$ A$ A$ A$
Executive Directors
N Froneman: CEO 2012 677 224 - 519 594 - - 1 196 818
(resigned 31 December 2011 622 240 622 819* 513 637 - 467 867 2 226 563
2012)
2012 275 876 - 130 329 - 239 406 444
C Chadwick: CFO 2011 251 833 227 536* 137 883 - 169 432 786 684
Subtotal Executive 2012 953 100 - 649 923 - 239 1 603 262
Directors 2011 874 073 850 355 651 520 - 637 299 3 013 247
Non-Executive Directors
M Wheatley** 2012 221 193 - - 40 423 239 261 855
(resigned 30 December 2011 220 474 - - 11 593 169 127 401 194
2012)
B Davison 2012 77 331 - - - - 77 331
(resigned 30 December 2011 64 800 - - - 168 953 233 753
2012)
K Dicks 2012 13 300 - - - - 13 300
(resigned 29 February 2011 64 800 - - - 168 722 233 522
2012)
W Harris 2012 13 300 - - - - 13 300
(resigned 29 February 2011 64 800 - - - 168 953 233 753
2012)
S Swana 2012 13 300 - - - - 13 300
(resigned 29 February 2011 49 800 - - - 168 722 218 522
2012)
K Winters 2012 97 069 - - - - 97 069
(resigned 30 December 2011 86 400 - - - 169 214 255 614
2012)
M Solomon 2012 86 500 - - - - 86 500
(appointed 1 March 2011 - - - - - -
2012)
A Liu 2012 61 500 - - - - 61 500
(appointed 1 March 2011 - - - - - -
2012)
R Chan 2012 69 331 - - - - 69 331
(appointed 1 March 2011 - - - - - -
2012)
SHARE
POST BASED
SHORT TERM EMPLOY- PAYMENTS:
SALARY AND/ PERFORMANCE RETENTION MENT SUPER- EQUITY
OR FEES BONUS* BONUS ANNUATION OPTIONS^ TOTAL
NAME A$ A$ A$ A$ A$ A$
Y Sun 2012 69 331 - - - - 69 331
(appointed 1 March 2011 - - - - - -
2012)*** #
M Liao 2012 44 331 - - - - 44 331
(appointed 1 March 2011 - - - - - -
2012, resigned 30
December 2012)*** #
C Zhou 2012 49 331 - - - - 49 331
(appointed 1 March 2011 - - - - - -
2012) #
Subtotal 2012 815 817 - - 40 423 239 856 479
Non-Executive 2011 551 074 - - 11 593 1 013 691 1 576 358
Directors
Other key Management Personnel
W Robinson: EVP: South 2012 220 345 - - - - 220 345
African Operations 2011 - - - - - -
(commenced 1 May
2012)
I Marais: EVP: Modder 2012 297 968 - 143 191 - - 441 159
East Operations 2011 289 699 167 099* 162 896 - 139 608 759 302
R Stewart: EVP: 2012 255 913 - 119 326 - 239 375 478
Technical Services 2011 209 230 158 781* 135 746 - 243 862 747 619
P Kruger: Group 2012 234 874 - 119 326 - 239 354 439
Company Secretary 2011 238 116 163 737* 135 746 - 45 590 583 189
R Plaistowe: SVP: 2012 235 410 - - - - 235 410
Surface Operations 2011 78 104 - - - - 78 104
S Caddy 2012 237 423 - 105 632 - - 343 055
(resigned 5 October 2011 269 654 206 552* 162 896 - 93 803 732 905
2012)
Subtotal Other 2012 1 481 933 - 487 475 - 478 1 969 886
key Management 2011 1 084 803 696 169 597 284 - 522 863 2 901 119
Personnel
Total Directors 2012 3 250 850 - 1 137 398 40 423 956 4 429 627
and Executives’ 2011 2 509 950 1 546 524 1 248 804 11 593 2 173 853 7 490 724
Remuneration
* The amount listed for 2011 includes a cash bonus amount paid in 2011 in respect of the 2010 financial year and an accrual for bonuses in respect of
the 2011 year, but which were only paid in 2012. The company has not been able to determine with certainty that performance bonuses will be paid for
the 2012 year and as a consequence it is not able to accrue for same in 2012.
** The short term salary and fees amount for Mark Wheatley includes an amount of A$20,624, which relates to his directorship of Goliath Gold; a
controlled subsidiary of Gold One.
*** In cases where a director has appointed an alternate director, under the company’s constitution alternate directors are entitled to be reimbursed
for reasonable expenses only and do not attract any fees for their services.
# Fees earned in respect of directors appointed by BCX Gold are paid to BCX Gold on the directors’ behalf.
^ The 2012 share based payments amount reflects the amount expensed as share options issued by Goliath Gold. No other remuneration was paid by
Goliath Gold to key management personnel other than to Mark Wheatley as listed above.
The relative proportions of remuneration that are linked to performance and those that are fixed for the group are as follows:
AT RISK
FIXED REMUNERATION SHORT TERM INCENTIVE LONG TERM INCENTIVE
2012 2011 2012 2011 2012 2011
NAME % % % % % %
Executive Directors
N Froneman 57% 28% 43% 51% - 21%
C Chadwick 68% 32% 32% 46% - 22%
Non-Executive Directors
M Wheatley 100% 58% - - - 42%
B Davison 100% 28% - - - 72%
K Winters 100% 34% - - - 66%
M Solomon 100% - - - - -
A Liu 100% - - - - -
R Chan 100% - - - - -
Y Sun 100% - - - - -
M Liao 100% - - - - -
C Zhou 100% - - - - -
key Management Personnel
W Robinson 100% - - - - -
I Marais 68% 38% 32% 43% - 19%
R Stewart 68% 28% 32% 39% - 33%
P Kruger 66% 41% 34% 51% - 8%
R Plaistowe 100% - - - - -
S Caddy 69% 37% 31% 50% - 13%
SERVICE AGREEMENTS
Remuneration and other terms of employment for the CEO, CFO and other key management personnel are also formalised in
service agreements. Each of these agreements provides for the provision of performance related cash bonuses and, when eligible,
participation in the Gold One Employee Incentive Scheme. Other major provisions of the agreements relating to remuneration
are set out below.
All contracts with current directors and key management personnel may be terminated early by either party with three months’
notice subject to a benefit on termination by the company, which entitles the terminated party to 20% of base salary for the
period worked during the fiscal year and one-and-a-half year’s annual salary.
BASE SALARY RETENTION BONUS*
NAME TERM OF AGREEMENT ZAR/A$ ZAR/A$
C Chadwick** Open ended commencing 25 May 2009 2 700 000/318 201 1 147 500/135 236
W Robinson Open ended commencing 1 May 2012 2 800 000/329 987 -
I Marais** Open ended commencing 25 May 2009 2 700 000/318 201 1 125 000/132 584
R Stewart** Open ended commencing 1 Nov 2010 2 484 000/292 745 937 500/110 487
P Kruger** Open ended commencing 1 Nov 2010 1 980 000/233 348 937 500/110 487
R Plaistowe Open ended commencing 22 Aug 2011 1 920 000/226 277 -
* Retention bonus instalment payable on 30 December 2013 pursuant to the transaction implementation agreement between Gold One and BCX
Gold, dated 16 May 2011. Shareholders approved the payment of retention bonuses in the case of Christopher Chadwick on 7 September 2011.
** The balance of share options held at 31 December 2011 (‘restricted executive options’) are subject to clause 4 of schedule 7 of the transaction
implementation agreement whereby the company has requested that the executives do not sell any shares resulting from the exercise of any restricted
executive options for a period of two years reckoned from 30 December 2011. After the conclusion of the two year period BCX Gold is obliged to offer
to purchase the restricted executive options or shares at the offer price of A$0.55.
SHAREHOLDINGS OF EXECUIIVES AND KEY MANAGEMENT PERSONNEL
The movement in shareholding of executives and key management throughout the year is detailed below:
SHARES
BAlANCE ACQUIRED ON ON EXERCISE OF RESIGNED/ BAlANCE
NAME 1 JAN 2012 OPEN MARKET OPTIONS RETIRED 31 DEC 2012
I Marais 20 000 - - - 20 000
P Kruger 19 500 60 500 - - 80 000
N Froneman 170 000 - - (170 000) -
M Wheatley 14 830 87 619 - (102 449) -
B Davison 2 250 000 - - (2 250 000) -
K Dicks 175 000 - - (175 000) -
S Swana 50 000 - - (50 000) -
K Winters 250 000 - - (250 000) -
SHARES
BAlANCE ACQUIRED ON ON EXERCISE OF BAlANCE
NAME 1 JAN 2011 OPEN MARKET OPTIONS SOLD 31 DEC 2011
C Chadwick - - 2 770 323 (2 770 323) -
I Marais 20 000 - 3 227 283 (3 227 283) 20 000
R Stewart - - 1 419 111 (1 419 111) -
P Kruger 19 500 - 2 147 988 (2 147 988) 19 500
N Froneman 170 000 - 5 938 871 (5 938 871) 170 000
M Wheatley 512 500 14 830 3 300 000 (3 812 500) 14 830
B Davison 500 000 - 1 950 000 (200 000) 2 250 000
K Dicks 175 000 - 2 690 171 (2 690 171) 175 000
W Harris 200 000 - 2 250 000 (2 450 000) -
S Swana 50 000 - 2 690 171 (2 690 171) 50 000
K Winters 258 252 68 750 2 600 000 (2 677 002) 250 000
S Caddy 30 000 - 1 033 500 (1 063 500) -
table 3: Options holdings of key Management Personnel
Details of options over ordinary shares in the company provided as remuneration to each director of Gold One and key
management personnel of the group are set out below. When exercisable, each option converts into one ordinary share of Gold
One. Further information on the options is set out in note 39 of the financial statements.
VESTED
BAlANCE RESIGNED/ BALANCE
NAME 1 JAN 2012 EXERCISED EXPIRED 31 DEC 2012 2012 2011
C Chadwick 2 770 322 - - 2 770 322 2 770 322 2 770 322
I Marais 3 227 283 (1 067 000) - 2 160 283 2 160 283 3 227 283
R Stewart 1 419 112 - - 1 419 112 1 419 112 1 419 112
P Kruger 2 147 989 - - 2 147 989 2 147 989 2 147 989
N Froneman 5 938 872 - (5 938 872) - - 5 938 872
M Wheatley 756 000 - (756 000) - - 756 000
K Winters 398 101 - (398 101) - - 398 101
S Caddy 1 033 500 - (1 033 500) - - 1 033 500
All options vested at 31 December 2012. VESTED
BAlANCE BAlANCE
NAME 1 JAN 2011 EXERCISED EXPIRED 31 DEC 2011 2011 2010
C Chadwick 5 540 645 (2 770 323) - 2 770 322 2 770 322 2 248 109
I Marais 6 454 566 (3 227 283) - 3 227 283 3 227 283 3 085 941
R Stewart 2 838 223 (1 419 111) - 1 419 112 1 419 112 376 289
P Kruger 4 295 977 (2 147 988) - 2 147 989 2 147 989 1 817 466
N Froneman 11 877 743 (5 938 871) - 5 938 872 5 938 872 4 524 803
M Wheatley 4 181 000 (3 300 000) (125 000) 756 000 756 000 2 181 000
B Davison 1 950 000 (1 950 000) - - - -
K Dicks 2 690 171 (2 690 171) - - - 806 836
W Harris 2 250 000 (2 250 000) - - - 300 000
S Swana 2 690 171 (2 690 171) - - - 06 836
K Winters 2 998 101 (2 600 000) - 398 101 398 101 1 048 101
S Caddy 2 067 000 (1 033 500) - 1 033 500 1 033 500 711 334
Key management personnel options that were exercised during the year:
NAME DATE OF GRANT DATE OF EXERCISE EXERCISE PRICE NUMBER EXERCISED
I Marais 12/11/2007 12/11/2012 ZAR 3.13 1 067 000
The assessed fair value of options granted at the grant date to the individuals is allocated equally over the period from grant date to
vesting date, and the amount is included in the remunerations tables above. Fair values at grant date are independently determined
using a modified binomial model that takes into account the exercise price, the term of the option, the impact of dilution, the share
price at grant date and the expected price volatility of the underlying share, the expected dividend yield, and the risk-free interest rate
for the term of the option.
DETAILS OF REMUNERATION: CASH BONESES AND OPTIONS
For each cash bonus and grant of options included in the tables contained above and within note 39 of the notes to the annual financial
statements, the percentage of the available bonus or grant that was paid or that vested in the financial year, and the percentage that
was forfeited because the person did not meet the service and performance criteria, are set out below. No part of the bonuses is
payable in future years. At the time of grant, options vest after three years provided the vesting conditions are met and no options will
vest if the conditions are not satisfied; hence the minimum value of the option yet to vest is nil. The maximum value of the options
yet to vest has been determined as the amount of the grant date fair value of the options that is yet to be expensed. This amount,
however, is nil as there were no unvested options as a result of the takeover offer by a consortium of Chinese investors that was
lodged with the ASX on 3 August 2011. At that time the remaining fair value of the grant yet to vest was recognised as an expense in
the Statement of Comprehensive Income.
CASH BONUS* OPTIONS
MIN MAX
BALANCE OF YEARS IN VALUE OF VALUE OF
OPTIONS WHICH GRANT GRANT
GRANTED At 31 OPTIONS YET TO YET tO
PAID FORFEITED DEC 2012 VESTED FORFEITED MAY VEST VEST VEST
NAME % % % % A$ A$
C Chadwick - 100% 2 770 322 100 - - Nil Nil
W Robinson - 100% - - - - Nil Nil
I Marais - 100% 2 160 283 100 - - Nil Nil
R Stewart - 100% 1 419 112 100 - - Nil Nil
R Plaistowe - 100% - - - - Nil Nil
P Kruger - 100% 2 147 989 100 - - Nil Nil
* The company has not been able to determine with certainty that performance bonuses will be paid for the 2012 year and as a consequence it is not able
to accrue for same in 2012.
SHARES UNDER OPTION
Unissued ordinary shares of Gold One under option at the end of the year are detailed in note 39 of the notes to the annual financial
statements.
STRIKE BAlANCE 1 BAlANCE 31
GRANT DATE EXPIRY DATE CURRENCY PRICE JAN 2012 GRANTED EXERCISED FORFEITED EXPIRED DEC 2012
12/10/2007 12/10/2012 A$ 0.50 6 537 635 - (12 174) - (6 525 461) -
12/11/2007 12/11/2012 ZAR 3.13 1 067 000 - (1 067 000) - - -
12/03/2008 12/03/2013 A$ 1.00 1 375 000 - - - - 1 375 000
26/03/2008 26/03/2013 A$ 0.40 125 000 - - - - 125 000
12/06/2008 12/06/2013 ZAR 2.01 970 322 - - - - 970 322
24/06/2008 24/06/2013 ZAR 2.04 2 592 274 - - - - 2 592 274
11/07/2008 11/07/2013 A$ 0.40 5 000 - - - - 5 000
1/08/2008 1/08/2013 ZAR 2.25 59 600 - - - - 59 600
11/12/2008 11/12/2013 ZAR 1.35 194 888 - (2 899) - - 191 989
21/01/2009 21/01/2014 A$ 0.22 330 000 - - - - 330 000
24/02/2009 24/02/2014 ZAR 1.47 20 000 - - - - 20 000
6/10/2009 6/10/2014 ZAR 1.93 1 011 500 - - - - 1 011 500
21/12/2009 21/12/2014 ZAR 2.12 458 642 - (47 101) - - 411 541
11/01/2010 11/01/2015 ZAR 2.16 30 000 - - - - 30 000
5/03/2010 5/03/2015 ZAR 1.96 246 246 - - - - 246 246
20/05/2010 20/05/2015 A$ 0.27 6 800 000 - - - - 6 800 000
20/05/2010 20/05/2015 ZAR 1.79 1 484 881 - - - - 1 484 881
12/07/2010 12/07/2015 ZAR 1.77 29 000 - (29 000) - - -
3/09/2010 3/09/2015 ZAR 1.68 163 500 - - - - 163 500
25/11/2010 25/11/2015 ZAR 2.35 2 000 000 - - - - 2 000 000
22/02/2012 22/02/2017 A$ 0.47 - 430 853 - - - 430 853
22/02/2012 22/02/2017 ZAR 3.94 - 13 742 896 - (839 974) - 12 902 922
29/05/2012 29/05/2017 ZAR 3.69 - 9 419 660 - (700 962) - 8 718 698
6/09/2012 6/09/2017 ZAR 3.71 - 1 300 000 - - - 1 300 000
Total 25 500 488 24 893 409 (1 158 174)(1 540 936) (6 525 461) 41 169 326
16. CORPORATE INFORMATION
The Financial Report for Gold One for the year ended 31 December 2012 was authorised for issue in accordance with a resolution of the
directors on 27 February 2013.
Gold One is a company limited by shares that is incorporated and domiciled in Australia and which shares are publicly traded on the ASX
and the JSE. Gold One has prepared a consolidated Financial Report incorporating the entities that it controlled during the financial year.
The nature of the operations and principal activities of the group are described in this Directors’ Report.
17. EMPLOYEES
The group employed 6,420 employees as at 31 December 2012 (2011: 1,824 employees).
18. AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 (Cth) is set out on pages
34 and 35.
19. NON-AUDIT SERVICES
The company may decide to employ the auditor on assignments additional to its statutory audit duties where the auditor’s
expertise and experience with the company and/or the group are important.
Details of the amounts paid or payable to the auditors (PricewaterhouseCoopers) for audit and non-audit services provided
during the year are set in note 8 of the notes to the annual financial statements.
The board of directors has considered the position and, in accordance with advice received from the Audit Committee, is satisfied
that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001 (Cth). The directors are satisfied that the provision of non-audit services by the auditor, as set out below,
did not compromise the auditor’s independence requirements of the Corporations Act 2001 (Cth) for the following reasons:
- All non-audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and
objectivity of the auditor
- None of the services undermines the general principles relating to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants.
During the year the following fees were paid or payable for non-audit services provided by the auditor of the parent entity and
its related practices:
2012 2011
A$ A$
Tax compliance services 65 662 9 651
Other services 54 973 8 462
20. ROUNDiNG Of AmOUNTs
The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission,
relating to the “rounding off” of amounts in the Directors’ Report and Financial Report. Amounts in the Directors’ Report and
Financial Report have been rounded off to the nearest thousand dollars in accordance with the Class Order or, in certain cases,
the nearest dollar.
21. AUDiTOR
PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001 (Cth).
The report is made in accordance with a resolution of directors.
The Financial Report set out on pages 44 to 105, which has been prepared on the going concern basis, was approved by the board
on 27 February 2013 and signed on its behalf by:
Christopher Chadwick (CFO and acting CEO)
27 February 2013
Johannesburg, South Africa
CORPORATE GOVERNANCE STATEMENT
PREAMBLE
Gold One and the board are committed to achieving and demonstrating the highest standards of corporate governance.
The company and its controlled entities are jointly referred to as the ‘group’ in this statement. A description of the group’s
main corporate governance practices is set out below. They comply, unless the contrary is stated, with the March 2010
ASX Principles of Good Corporate Governance and Best Practice Recommendations.
There were material changes in the composition of the board, as will more fully appear hereunder, and this
Corporate Governance Statement should be read against this background.
On 16 May 2011 the company announced that it had entered into a transaction implementation agreement (“TIA”) with
a consortium of investors (“the Jintu Transaction”). On 30 December 2011 Gold One successfully concluded the
Jintu Transaction, introducing the BCX Consortium as the company’s new majority shareholder holding 89.17% of the
share capital.
The TIA provides for the initial constitution of the board during the 12 months immediately following the completion
of the Jintu Transaction, namely 31 December 2011 to 30 December 2012 (“the transition period”). Notwithstanding
the above, it was agreed that the board as constituted on 30 December 2011 would remain in office until 28 February
2012 to enable it, inter alia, to approve the annual financial statements for the period ended 31 December 2011 and that
the board would be reconstituted in accordance with the TIA with effect from 1 March 2012.
The TIA provided that during the transition period the board would consist of 11 persons, namely:
- A CEO, being the CEO as at 16 May 2011
- A CFO, being the CFO as at 16 May 2011
- A lead independent director, being one of the independent directors on the board as at 16 May 2011
- Five independent directors comprising two of the directors on the board as at 16 May 2011, and three independent
directors nominated by the BCX Consortium
- Three non-executive nominee directors appointed by the BCX Consortium, one of whom would be the chairman.
The TIA further provided that, following the transition period, the BCX Consortium may reconstitute the board in
accordance with the following principles:
- Representation of the BCX Consortium will be in proportion with the latter’s total shareholding in the company
- Size, which will be suitable for the board to perform its duties and function
- Composition, which will incorporate an appropriate mix of experience and qualifications of the board members
and have regard to the relevant corporate governance considerations, including the ASX Corporate Governance
Principles and Recommendations
- Independence, which will require a lead independent director and at least four independent non-executive
directors.
Principle 1
Lay Solid Foundations for Management and Oversight
The relationship between the board and senior management is critical to the group’s long term success. The directors are
responsible to the shareholders for the performance of the group in both the short and the long term, and seek to balance
sometimes competing objectives in the best interests of the group as a whole. Their focus is to enhance the interests of
shareholders and other key stakeholders and to ensure that the group is properly managed.
The responsibilities of the board include:
- Providing strategic guidance to the group, including
approving the corporate strategy
- Reviewing and approving business plans, the annual
budget, and financial plans, including available resources
and major capital expenditure initiatives
- Overseeing and monitoring:
- Organisational performance and the achievement of the group’s strategic goals and objectives
- Progress of major capital expenditures and other significant corporate projects, including any
acquisitions or divestments
- Monitoring financial performance, including approval of the annual and half-year financial reports and liaising with
the company’s auditors
- Effecting the appointment, performance assessment and, if necessary, removal of the CEO
- Ratifying the appointment and/or removal of and contributing to the performance assessments for
members of the senior management team, including the CFO and the company secretary
- Ensuring that effective management processes are in place and approving major corporate initiatives
- Enhancing and protecting the reputation of the organisation
- Overseeing the operation of the group’s system for compliance and risk management reporting to shareholders
- Ensuring appropriate resources are available to senior management.
Day to day management of the group’s affairs and the
implementation of the corporate strategy and policy
initiatives are formally delegated by the board to the CEO and
senior executives as set out in the group’s delegations policy.
These delegations are reviewed on an annual basis
Principle 2
Structure the Board to Add Value
The board operates in accordance with the broad principles set out in its charter. The charter details the board’s composition
and responsibilities. Board Composition
• The board is to be comprised of both executive and non-executive directors with a majority of non-executive
directors. Non-executive directors bring a fresh perspective to the board’s consideration of strategic, risk and
performance matters.
• In recognition of the importance of independent views and the board’s role in supervising the activities of
management, the chairman should be an independent non-executive director, the majority of the board must
be independent of management, and all directors are required to exercise independent judgment and review
and constructively challenge the performance of management.
• The chairman is elected by the full board and is required to meet regularly with the CEO.
• The company is to maintain a mix of directors on the board from different backgrounds with complementary
skills and experience.
• The board is required to undertake an annual board performance review and to consider the appropriate mix
of skills required by the board to maximise its effectiveness and its contribution to the group.
The board seeks to ensure that:
• At any point in time, its membership represents an appropriate balance and diversity between directors with
experience and knowledge of the group and directors with an external or fresh perspective
• The size of the board is conducive to effective discussion and efficient decision making.
Directors’ Independence
The board has adopted specific principles in relation to directors’ independence. These state that when determining
independence, a director must be a non-executive and the board should consider whether the director:
• Is a substantial shareholder of the company or an officer of, or otherwise associated directly with, a substantial
shareholder of the company
• Is or has been employed in an executive capacity by the company or any other group member within three years
before commencing to serve on the board
• Within the last three years has been a principal of a material professional advisor or a material consultant to
the company or any other group member, or an employee materially associated with the service provided
- Is a material supplier or customer of the company or any other group member or an officer of, or otherwise
associated directly or indirectly with, a material supplier or customer
• Has a material contractual relationship with the company or a controlled entity other than as a director of the group
• Is free from any business or other relationship which could, or could reasonably be perceived to, materially
interfere with the director’s independent exercise of their judgment.
Materiality for these purposes is determined on both quantitative and qualitative bases. An amount of over 5%
of annual turnover of the company or group or 5% of the individual director’s net worth is considered material for
these purposes. In addition a transaction of any amount, or a relationship, is deemed material if knowledge of it may
impact the shareholder’s understanding of the director’s performance.
Recent thinking on corporate governance has introduced the view that a director’s independence may be perceived to
be impacted by lengthy service on the board. The board will continue to monitor developments on this issue.
The board assesses independence each year. To enable this process, the directors must provide all information that may
be relevant to the assessment.
An independence assessment was undertaken in 2011 following the conclusion of the TIA to assess the independence
status of the directors who would take office during the transition period.
The board concluded in its assessment that:
- Yalei Sun, Ming Liao and Chao Zhou were not independent by reason of the fact that they are officers of, or otherwise
associated directly with, a substantial shareholder of the company
- Mark Wheatley, Kenneth Winters, Barry Davison, Michael Solomon, Allan Liu and Robert Chan met the requirements
for independence.
In assessing each director’s independence, due regard was given to the grant of share options to non-executive directors
approved by shareholders in 2010. In 2010 the board was of the opinion that share options were an appropriate means of
remuneration and did not impact on the independence of the non-executive directors. The board remains of the opinion
that the number and value of the share options granted in 2010 does not impact on the independence of non-executive
directors.
On the expiry of the transition period on 30 December 2012 the BCX Consortium gave notice of the reconstitution of the
board. With effect from 30 December 2012 the board has been streamlined to seven members of whom four are independent
directors. The board will conduct an independence evaluation in 2013 to ensure that the majority of the directors are
independent.
Board Members
Details of the members of the board, their experience, expertise, qualifications, terms of office, relationships
affecting their independence and their independent status are set out in the Directors’ Report. At the date of signing the
Directors’ Report there was one executive director and five non-executive directors. A further independent non-executive
director will be appointed shortly.
Term of Office
The company’s constitution specifies that, save for the managing director, all elected directors must retire from office
no later than the third annual general meeting following their last election. The board may appoint a person to be a director
at any time except during a general meeting. Any director so appointed automatically retires at the annual general meeting
immediately following his appointment. Where eligible, a director may stand for re-election.
Chairman and CEO
The chairman is responsible for leading the board, ensuring directors are properly briefed in all matters relevant to
their role and responsibilities, facilitating board discussions and managing the board’s relationship with the company’s
senior executives. In accepting the position the chairman acknowledges that it will require a significant time
commitment and has confirmed that other positions will not hinder his effective performance in the role of chairman.
The CEO is responsible for implementing group strategies and policies.
The Gold One Board Charter specifies that the roles of chairman and CEO are separate roles to be undertaken
by separate people and that the chairman should be independent. The chairman, Yalei Sun, is not regarded as
being independent by reason of the fact that he is associated directly with a substantial shareholder and, as a consequence,
Mark Wheatley was appointed lead independent director during the transition period. Following the reconstitution of
the board on 30 December 2012, Mark Wheatley retired as a director and as such it will be necessary for the board to
appoint a new lead independent director from its ranks.
Induction
The induction provided to new directors and senior managersenables them to actively participate in board decision
making as soon as possible. It ensures that they have a full understanding of the company’s culture, financial position,
strategies, operations and risk management policies. It also explains the respective rights, duties, responsibilities and roles
of the board and senior executives as well as the arrangements for meetings.
Commitment
The board held four board meetings during the year. Board meetings held in South Africa are usually held over a period of
two to three days and include visits to the operations with full reviews of the various operations.
The number of meetings of the company’s board of directors and of each board committee held during the period ended
31 December 2012, and the number of meetings attended by each director, are disclosed on page 20.
It is the company’s practice to allow its executive directors to accept appointments outside the Gold One Group of
companies with prior written approval from the board. No appointments of this nature were accepted during the year to
31 December 2012.
The commitments of non-executive directors are considered by the Governance and Nomination Committee prior to the
directors’ appointments to the board of the company and are reviewed from time to time.
Prior to appointment or being submitted for re-election each non-executive director is required to specifically acknowledge
that they have, and will continue to have, the time available to discharge their responsibilities to the company.
Independent Professional Advice
Directors and board committees have the right, in connection with their duties and responsibilities, to seek independent
professional advice at the company’s expense. Prior written approval from the chairman is required but this will not be
unreasonably withheld.
Conflict of Interests
In accordance with the board charter, directors are requested to declare any conflict of interest and are precluded from
taking part in any discussions on decisions in connection therewith. In addition, no board papers relating to the conflict
of interest are distributed to the director concerned.
Performance Assessment
In terms of its charter the board is required to undertake an annual evaluation of the performance of the directors and
its committees. No formal assessment was carried out for the year ended 31 December 2012 by reason of the fact that
the board was reconstituted on 1 March 2012 and again on 30 December 2012, as is set out in the preamble to this
statement.
Board Committees
The board has established a number of committees to assist in the execution of its duties and to allow detailed consideration
of complex issues. Current committees of the board are the audit, governance, remuneration and health and safety
committees. Save for the Health, Safety, Environment and Sustainable Development Committee on which an executive
director is required to serve, all other committees are comprised entirely of non-executive directors, the majority
of whom are independent. The committee structures and memberships are reviewed on an annual basis. A policy of
rotation of committee members applies.
Each committee has its own written charter setting out its role and responsibilities, composition, structure, membership
requirements and the manner in which the committee is to operate. All of these charters are reviewed on an annual
basis. Unless authority has been delegated to a committee by the board to determine a specific issue, all matters
determined by committees are submitted to the full board as recommendations for board decisions.
Minutes of committee meetings are tabled at the subsequent board meetings. Additional requirements for specific reporting
by the committees to the board are addressed in the charters of the individual committees.
With the reconstitution of the board on 30 December 2012, which resulted in the retirement of three independent
non-executive directors, and coupled with the resignation of an executive director, it will be necessary for the board to
review the composition of the committees during the March 2013 quarter. The composition of the committees set out
below is as at the end of the transition period, namely 30 December 2012.
Governance and Nomination Committee
During the transition period the Governance and Nomination Committee consisted of the following non-executive
directors, all of whom were regarded as being independent:
- Mark Wheatley (chairman)
- Robert Chan
- Michael Solomon
Details of these directors’ attendance at committee meetings are set out in the Directors’ Report on page 20.
The main responsibilities of the committee are to:
- Conduct an annual review of the membership of the board having regard to present and future needs of the company
and to make recommendations on board composition and appointments
- Conduct an annual review of, and conclude on, the independence of each director
- Propose candidates for board vacancies
- Oversee the annual performance assessment programme
- Oversee board succession, including the succession of the chairman
- Develop and review the board and committee charters
- Prepare committee reports that are required to be included in the company’s annual report and circulars to
shareholders.
Acting on the recommendation of the Nominating Committee the full board may appoint a director at any time except at
a general meeting. A director appointed by the board must stand for election at the next annual general meeting of the
company. The committee’s nomination of existing directors for reappointment is not automatic and is contingent on
their past performance, contribution to the company and the current and future needs of the board and company. The
board and the committee are also aware of the advantages of board renewal and succession planning.
Notices of meetings for the election of directors comply with the ASX Corporate Governance Council’s best practice
recommendations.
All new directors are required to participate in a comprehensive formal induction programme, which covers the operation
of the board and its committees and financial, strategic, operational, regulatory and compliance issues.
Health, Safety, Environmen t and Sustainable Development Committee
During the transition period the Health, Safety, Environment and Sustainable Development Committee consisted of the
following directors:
- Michael Solomon (chairman)
- Mark Wheatley
- Neal Froneman (executive)
The main responsibilities of the committee are to:
- Oversee the development of policies, programmes and practices pertaining to the environment, occupational
health and safety, and sustainable development matters
- Promote the empowerment of historically disadvantaged persons
- Monitor compliance with the South African Mining Charter.
Companpy Secretaries
The company has appointed two company secretaries, one of whom is ordinarily resident in Australia. They provide
advice to the board in respect of corporate governance and the recommendations contained in the ASX Governance
Principles. In addition to the company secretaries’ statutory and other duties, they provide the board as a whole, and
committees and directors individually, with guidance as to the discharging of responsibilities in the best interests of the
company. The company secretaries are responsible for the induction and training of all new appointments to the board
according to a programme to familiarise them with the affairs and business of the group and the strategies of the board.
The appointment and removal of a company secretary is a matter for the board as a whole.
Principle 3
Promote Ethical and Responsible Decision Making
Code of Conduct
The company is in the process of developing a statement of values and a code of conduct (“the code”). The code will
be regularly reviewed and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism
and the practices necessary to maintain confidence in the group’s integrity, and to take into account legal obligations
and reasonable expectations of the company’s stakeholders.
In summary, the code will require that at all times all company personnel act with the utmost integrity, objectivity
and in compliance with the letter and the spirit of the law and company policies.
The purchase and sale of company securities by directors and employees is not permitted during closed or prohibited
periods. A director wishing to purchase or sell company securities is obliged to obtain the consent of the chairman
in advance of the trade. A copy of the company’s Securities Dealing Policy can be viewed on the company’s website.
The company’s Securities Dealing Policy is discussed with each new director and employee as part of their induction training.
The directors are satisfied that the group has complied with its policies on ethical standards, including dealing in securities.
Diversity Policy
The company recognises that a talented and diverse workforce at all levels of the company is a key competitive advantage
and that experienced, skilled and diversified employees are an important contributor to the company’s success. Gold One
regards people as its most important asset.
The board does not consider it appropriate at this stage for the company to implement a diversity policy consistent with
the ASX Corporate Governance Principles, as the company is already required by South African law to comply with the
diversity requirements stipulated under the Broad-Based Socio-Economic Empowerment Charter for the South
African Mining Industry, published and implemented by the South African Department of Mineral Resources. All of the
company’s mining and exploration operations are located within Southern Africa.
The Mining Charter aims at facilitating the participation of historically disadvantaged South Africans (“HDSAs”) in the
mining and minerals industry by providing specific targets, which must be met by 2014, to effect transformation and
promote sustainable development and growth within the South African mining industry. HDSAs are defined as “any
person, category of persons, or community disadvantaged by unfair discrimination before the Constitution of the Republic
of South Africa Act 200 of 1993 came into operation,” on the basis of race, gender or disability and includes females
generally as well as black, Indian and coloured people.
Furthermore, under the Mining Charter, in furtherance of employment equity targets, a holder of a new order mining
right must reach 40% HDSA representation at all levels of management and core skills including 10% women in mining
by no later than 2014.
Gold One has already achieved the target of 10% women in mining at its operations.
Principle 4
Safeguard Integrity in Financial Reporting
Audit Committee
During the transition period the Audit Committee consisted of the following non-executive directors, all of whom were
regarded as being independent:
- Kenneth Winters (chairman)
- Michael Solomon
- Robert Chan
Details of these directors’ qualifications and attendance at Audit Committee meetings are set out in the Directors’
Report on pages 19 to 20.
All members of the Audit Committee are financially literate and have an appropriate understanding of the mining industry.
The Audit Committee operates in accordance with a charter, which is approved by the entire board.
The main responsibilities of the committee are to:
- Review, assess and approve the annual full and concise reports, the half-year financial report and all other
financial information published by the company or released to the market
- Assist the board in reviewing the effectiveness of the organisation’s internal control environment covering:
- Effectiveness and efficiency of operations
- Reliability of financial reporting
- Compliance with applicable laws and regulations
- Determine the scope of the internal finance function and ensure that its resources are adequate and used
effectively, as well as assess its performance
- Ratify the appointment and/or removal, and contribute to the performance assessment of, the CFO
- Oversee the effective operation of the risk management framework
- Recommend to the board the appointment, removal and remuneration of the external auditors, and review the
terms of their engagement, the scope and quality of the audit, and assess performance
- Consider the independence and competence of the external auditor on an ongoing basis
- Review and approve the level of non-audit services provided by the external auditors and ensure it does not
adversely impact on auditor independence
- Review and monitor related party transactions and assess their propriety
- Report to the board on matters relevant to the committee’s role and responsibilities.
In fulfilling its responsibilities, the Audit Committee:
- Receives regular reports from management and the external auditors
- Meets with the external auditors at least twice a year, or more frequently if necessary
- Reviews the processes the CEO and CFO have in place to support their certifications to the board
- Reviews any significant disagreements between the auditors and management, irrespective of whether they
have been resolved
- Meets separately with the external auditors at least twice a year without the presence of management
- Provides the external auditors with a clear line of direct communication at any time to either the chairman of the
Audit Committee or the chairman of the board.
The Audit Committee has authority within the scope of its responsibilities to seek any information it requires from any
employee or external party.
External Auditors
Company and Audit Committee policy is to appoint external auditors who clearly demonstrate quality and independence.
The performance of the external auditor is reviewed annually and applications for tender of external audit services are
requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs.
PricewaterhouseCoopers was appointed as the external auditor at the 2012 annual general meeting. It is PricewaterhouseCoopers’
policy to rotate audit engagement partners on listed companies at least every five years.
An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is provided in the
Financial Report. It is the policy of the external auditors to provide an annual declaration of their independence to the
Audit Committee.
The external auditor is required to attend the annual general meeting and be available to answer shareholder questions
about the conduct of the audit and the preparation and content of the audit report.
Principles 5 and 6
Make Timely and Balanced Disclosures and Respect the Rights of Shareholders
Continuous Disclosure and Shareholder Communication
The company has developed written policies and procedures on information disclosure that focus on continuous disclosure
of any information concerning the group that a reasonable person would expect to have a material effect on the price
of the company’s securities. These policies and procedures include the arrangements the company has in place to
promote communication with shareholders and encourage effective participation at general meetings.
The company secretaries have been nominated as the persons responsible for communications with both the ASX and the
JSE. This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX
Listing Rules and overseeing and coordinating information disclosure to the ASX, JSE, analysts, brokers, shareholders, the
media and the public.
All information disclosed to the exchanges is posted on the company’s website as soon as it is disclosed. When analysts
are briefed on aspects of the group’s operations, the material used in the presentation is released to the exchanges and
posted on the company’s website. Procedures have also been established for reviewing whether any price sensitive
information has been inadvertently disclosed and, if so, this information is also immediately released to the market.
All shareholders may elect to receive a copy of the company’s annual (full or concise) and half-yearly reports. In addition,
the company seeks to provide opportunities for shareholders to participate through electronic means. Recent initiatives to
facilitate this include making all company announcements, media briefings, details of company meetings, media releases
for prior years and historical financial reports available on the company’s website. The website also enables users to register
their email address for direct email updates on company matters.
Principle 7
Recognise and Manage Risk
The board is responsible for satisfying itself annually, or more frequently as required, that management has developed
and implemented a sound system of risk management and internal control. Detailed work on this task is delegated to the
Audit Committee and reviewed by the whole board.
The Audit Committee is responsible for ensuring there are adequate policies in relation to risk management by overseeing
management’s actions in the evaluation, management, monitoring and reporting of material operational, financial,
compliance and strategic risks. In providing this oversight, the committee:
- Reviews the framework and methodology for risk identification, the degree of risk the company is willing
to accept, the management of risk, and the processes for auditing and evaluating the company’s risk management
system
- Reviews group wide objectives in the context of the abovementioned categories of corporate risk
- Reviews and, where necessary, approves guidelines and policies governing the identification, assessment and
management of the company’s exposure to risk
- Reviews and approves the delegation of financial authorities and addresses any need to update these
authorities on an annual basis
- Reviews compliance with agreed policies.
The committee recommends any actions it deems appropriate to the board for its consideration.
Management is responsible for designing, implementing, and reporting on the adequacy of the company’s risk management
and internal control system and has to report to the Audit Committee on the effectiveness of:
- The risk management and internal control system during the year
- The company’s management of material business risks.
Risk Management Group
The company’s risk management policy and the operation of the risk management and compliance system are managed
by the company’s Risk Management Committee comprising senior executives. The board receives quarterly reports
from this group as to the effectiveness of the company’s management of material risks that may impede meeting
business objectives.
Corporate Reporting
In complying with the third bullet point of Principle 7 above, the CEO and CFO have made the following certifications to
the board:
- That the company’s financial reports are complete and present a true and fair view in all material respects of
the financial condition and operational results of the company and group, and are in accordance with relevant
accounting standards
- That the above statement is founded on a sound system of risk management and internal compliance and control,
which implements the policies adopted by the board, and that the company’s risk management and internal
compliance and control are operating efficiently and effectively in all material respects in relation to financial
reporting risks.
PRINCIPLE 8
REMUNERATE FAIRLY AND RESPONSIBLY
REMUNERATION COMMITTEE
During the transition period the Remuneration Committee consisted of the following non-executive directors (all of
whom were independent):
- Allan Liu (chairman)
- Barry Davison
- Mark Wheatley
Details of these directors’ attendance at Remuneration Committee meetings are set out in the Directors’ Report on
page 20.
The Remuneration Committee operates in accordance with its charter, which has been approved by the whole board. The
Remuneration Committee advises the board on remuneration and incentive policies and practices generally, and makes
specific recommendations on remuneration packages and other terms of employment for executive directors, other
senior executives and non-executive directors.
Committee members receive regular briefings from an external remuneration expert on recent developments on
remuneration and related matters.
Each member of the senior executive team signs a formal employment contract at the time of their appointment
covering a range of matters including their duties, rights, responsibilities and any entitlements on termination. The
standard contract refers to a specific formal job description.
Further information on directors and executives’ remuneration, including principles used to determine remuneration, is set
out in the Directors’ Report under the heading ‘Remuneration Report’.
The committee also assumes responsibility for overseeing management succession planning, including the
implementation of appropriate executive development programmes and ensuring adequate arrangements are in
place so that appropriate candidates are recruited for later promotion to senior positions.
FINANCIAL REPORT
for the year ended 31 December 2012
Independent Auditor's Report 107 - 108
The financial report covers the financial statements for the consolidated entity consisting of Gold One International Limited
("Gold One") and its subsidiaries. The financial report is presented in Australian Dollars ("A$").
Gold One is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of
business is:
Gold One International Limited
A.B.N. 35 094 265 746
Level 3
100 Mount Street
North Sydney NSW 2060
Gold One is registered in South Africa as an external company under registration number 2009/000032/10.
A description of the nature of the consolidated entity's operations and its principal activities is included in the Company Review
on pages 6 to 17 and in the Directors' Report on pages 18 to 31, both of which are not part of these consolidated financial
statements.
The consolidated financial statements were authorised for issue by the directors on 27 February 2013. The directors have the
power to amend and reissue the consolidated financial statements.
All press releases, consolidated financial statements and other information are available on our website.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2012
2012 2011
Note A$ '000 A$ '000
Revenue from gold sales 381 633 188 260
Cost of sales 6 (335 435) (82 413)
GROSS PROFIT 46 198 105 847
Other income 344 1 392
General and administrative expenses 7 (28 946) (34 751)
Fair value adjustments 9 (21 545) 7 049
Other expenses 10 (5 638) (45)
Exploration and pre-feasibility expenditure (11 002) (8 805)
Gain on bargain purchase 11 107 206 -
Black Economic Empowerment transactions 31 (28 685) -
OPERATING PROFIT BEFORE FINANCE COSTS 57 932 70 687
Finance income 2 669 1 645
Finance costs 12 (14 318) (3 632)
PROFIT BEFORE TAXATION 46 283 68 700
Income tax 13 (16 131) (18 807)
PROFIT FOR THE YEAR 30 152 49 893
OTHER COMPREHENSIVE (LOSS)/INCOME, NET OF TAX:
Currency translation differences on foreign operations (44 604) (34 266)
Fair value adjustments of available-for-sale assets 2 589 -
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR (11 863) 15 627
TOTAL COMPREHENSIVE (LOSS)/INCOME ATTRIBUTABLE TO:
Owners of the parent (9 321) 15 627
Non-controlling interest (2 542) -
(11 863) 15 627
PROFIT FOR THE YEAR ATTRIBUTABLE TO:
Owners of the parent 32 694 49 893
Non-controlling interest (2 542) -
30 152 49 893
EARNINGS PER SHARE
14
Basic earnings per share (A$) 0.02 0.06
Diluted earnings per share (A$) 0.02 0.06
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2012
2012 2011
Note A$ '000 A$ '000
ASSETS
CURRENT ASSETS
Cash and cash equivalents 15 37 008 209 492
Trade and other receivables 16 14 678 8 997
Inventories 17 15 805 7 109
Taxation receivable - 235
67 491 225 833
NON-CURRENT ASSETS
Held-to-maturity investments 18 2 127 1 408
Restricted cash 19 13 402 13 124
Available-for-sale investments 20 30 266 -
Property, plant and equipment 21 669 953 142 931
Investment property 22 8 715 -
Intangible assets 23 9 285 7
Deferred tax assets 24 - 3 931
733 748 161 401
TOTAL ASSETS 801 239 387 234
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 25 33 403 22 897
Taxation payable 1 489 -
Gold derivative liabilities 26 30 399 -
Accruals 27 13 518 11 406
Borrowings 28 60 195 -
139 004 34 303
NON-CURRENT LIABILITIES
Deferred tax liabilities 24 54 130 24 591
Gold derivative liabilities 26 46 435 -
Borrowings 28 158 017 -
Provisions 29 37 616 2 835
296 198 27 426
TOTAL LIABILITIES 435 202 61 729
NET ASSETS 366 037 325 505
EQUITY
Contributed equity 30 347 574 346 826
Reserves 31 (44 098) (32 188)
Retained earnings 57 399 10 867
CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF GOLD ONE
360 875 325 505
Non-controlling interest 32 5 162 -
TOTAL EQUITY 366 037 325 505
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2012
TOTAL
ATTRIBUTABLE NON-
CONTRIBUTED RETAINED TO EQUITY CONTROLLING TOTAL
EQUITY RESERVES EARNINGS HOLDERS INTEREST EQUITY
A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000
BALANCE AT 01 JANUARY -
2011 130 782 (2 301) (39 026) 89 455 89 455
Profit for the year - - 49 893 49 893 - 49 893
Other comprehensive loss for
the year - (34 266) - (34 266) - (34 266)
TRANSACTIONS WITH
OWNERS IN THEIR CAPACITY
AS OWNERS
Contributions of equity net of
transaction costs 141 675 - - 141 675 - 141 675
Share options 14 666 4 379 - 19 045 - 19 045
Convertible bonds exercised 59 703 - - 59 703 - 59 703
Total changes 216 044 (29 887) 49 893 236 050 - 236 050
BALANCE AT 31 DECEMBER 346 826 (32 188) 10 867 325 505 - 325 505
2011
Profit for the year - - 32 694 32 694 (2 542) 30 152
Other comprehensive loss for
the year - (42 015) - (42 015) - (42 015)
TRANSACTIONS WITH
OWNERS IN THEIR CAPACITY
AS OWNERS
Transactions between
shareholders - - 13 838 13 838 7 704 21 542
Contributions of equity net of
transaction cost 718 - - 718 - 718
Share options 30 30 105 - 30 135 - 30 135
Total changes 748 (11 910) 46 532 35 370 5 162 40 532
BALANCE AT 31 DECEMBER
2012 347 574 (44 098) 57 399 360 875 5 162 366 037
Notes 30 31
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ending 31 December 2012
2012 2011
Note A$ '000 A$ '000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 335 780 190 920
Cash paid to suppliers and employees (343 486) (83 615)
Cash used in operations (7 706) 107 305
Finance income 2 669 1 645
Finance costs (12 098) (3 482)
Income tax paid (3 819) (238)
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES 34 (20 954) 105 230
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment 21 (60 831) (34 964)
Proceeds from the sale of property, plant and equipment 21 26 112
Purchase of investment property 22 (458) -
Purchase of intangibles 23 (698) -
Proceeds from the sale of intangibles 23 3 -
Payment for acquisition of subsidiaries, net of cash acquired 11 (287 836) -
Proceeds from the sale of investments 4 608 -
Increase in investments (360) (134)
De-restricted cash 3 895 -
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (341 651) (34 986)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from shares issued, net of transaction costs 627 156 341
Proceeds from borrowings 230 285 -
Repayment of borrowings (39 639) -
NET CASH INFLOW FROM FINANCING ACTIVITIES 191 273 156 341
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (171 332) 226 585
Cash at the beginning of the year 209 492 (8 623)
Effect of exchange rate changes on cash and cash equivalents (1 152) (8 470)
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 15 37 008 209 492
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
NOTES TO THE FINANCIAL REPORT
for the year ended 31 December 2012
NOTES TO THE FINANCIAL REPORT
for the year ended 31 December 2012
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial
statements are for the consolidated entity consisting of Gold One and its subsidiaries.
On 18 May 2009, Gold One, a company incorporated in Australia and listed on the ASX, inward listed on the JSE and
on 25 May 2009 acquired all the issued ordinary shares in Gold One Africa Limited ("Gold One Africa") (formerly
Aflease Gold Limited).
1.1 BASIS OF PREPARATION
These general purpose consolidated financial statements have been prepared in accordance with Australian
Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board ("AASB"),
Urgent Issues Group Interpretations and the Corporations Act 2001.
Gold One is a for-profit entity for the purpose of preparing the consolidated financial statements.
COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS
The consolidated financial statements of Gold One also comply with International Financial Reporting Standards
("IFRS") as issued by the International Accounting Standards Board ("IASB").
HISTORICAL COST CONVENTION
These consolidated financial statements have been prepared under the historical cost convention except for the
following items in the consolidated statement of financial position:
- Derivative financial instruments at fair value; and
- Investment property at fair value.
GOING CONCERN
The consolidated financial statements have been prepared on the going concern basis using appropriate accounting
policies, supported by reasonable judgements and estimates. The going concern basis contemplates that the group
will have adequate resources to continue as a going concern for the foreseeable future.
As at 31 December 2012, the total assets exceeded the total liabilities by A$ 366.037 million and the group generated
a profit for the year of A$ 30.152 million.
However, as a result of the acquisitions which occurred during the year (refer note 11), the group's current liabilities
exceeded its current assets by A$ 71.513 million. The negative current assets position will be reversed in 2013 through
the settlement of the Rand Uranium gold forward sales agreement, improved cash flows from operations and the
execution of the Cooke Underground turnaround strategy. In addition certain capital projects may be postponed to
longer than 12 months in order to manage the group's cash flow. Further long term funding could be drawn down upon
to remedy any potential funding shortfalls (refer note 28).
PARENT ENTITY FINANCIAL INFORMATION
The financial statements for the parent entity, Gold One, disclosed in note 41, has been prepared on the same basis
as for the consolidated financial statements, except as set out below:
INVESTMENT IN SUBSIDIARIES
Investments in subsidiaries are accounted for at cost in the financial statements of Gold One.
CRITICAL ACCOUNTING ESTIMATES
The preparation of consolidated financial statements in conformity to IFRS, requires the use of certain critical
accounting estimates. It also requires 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 consolidated financial statements are disclosed in note 4, Critical accounting estimated
and judgements.
1.2 PRINCIPLES OF CONSOLIDATION
SUBSIDIARIES
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Gold One ("company"
or "parent entity") as at 31 December 2012 and the results of all subsidiaries for the year then ended. Gold One and its
subsidiaries together are referred to in these consolidated financial statements as the "group" or the "consolidated
entity".
Subsidiaries are all 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 which control ceases.
Adjustments are made when necessary to the consolidated financial statements of subsidiaries to bring their
accounting policies in line with those of the group.
Intercompany transactions, balances, and unrealised gains on transactions between group companies are eliminated
in full on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred.
Non-controlling interests in the results and equity of consolidated subsidiaries are identified and recognised separately
from the group's interest therein, and are recognised within the consolidated statements of comprehensive income,
financial position and changes in equity respectively. Losses of subsidiaries attributable to non-controlling interests
are allocated to non-controlling interest even if this results in a debit balance being recognised for non-controlling
interest.
CHANGES IN OWNERSHIP INTERESTS
The group treats transactions with non-controlling interests, that do not result in a loss of control, as transactions with
equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of
the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between
the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a
separate reserve within equity attributable to owners of Gold One.
When the group ceases to have control, any retained interest in the entity is remeasured to its fair value with the
change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition,
any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the
group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in
other comprehensive income are reclassified to profit or loss.
BUSINESS COMBINATIONS
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises
the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the group.
The consideration transferred also includes the fair value of any asset or liability resulting from a contingent
consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related
costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an
acquisition-by-acquisition basis, the group recognises any non-controlling interest in the acquiree either at fair value or
at the non-controlling interest's proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable
assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of
the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly
in profit or loss as a bargain purchase.
1.3 SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segment, has been identified as the Executive Committee that makes strategic
decisions.
1.4 TRANSLATION OF FOREIGN CURRENCIES
FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the consolidated financial statements of each entity in the group are measured using the currency
that best reflects the economic substance of the underlying events and circumstances relevant to that entity
("the functional currency"). The consolidated financial statements are presented in A$, which is the group's
presentation currency. The functional currency of the company and its subsidiaries is the South African Rand ("ZAR").
TRANSACTIONS AND BALANCES
A foreign currency transaction is recorded in ZAR on initial recognition by applying the spot exchange rate in ZAR at
the date of the transaction.
At the end of the reporting period:
- Foreign currency monetary items are translated using the closing rate;
- Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction; and
- Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different
from those at which they were translated on initial recognition during the period or in previous consolidated financial
statements are recognised in profit or loss in the period in which they arise. Exchange differences on assets and
liabilities carried at fair value are reported as a fair value gain or loss.
Cash flows arising from transactions in a foreign currency are recorded in ZAR by applying to the foreign currency
amount the exchange rate between the ZAR and the foreign currency at the date of the cash flow.
GROUP COMPANIES
The results and financial position of all group entities (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
- Assets and liabilities for each consolidated statement of financial position presented are translated at the closing
rate at the reporting date;
- Income and expenses for each item of profit or loss are translated at average exchange rates (unless this is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the transactions); and
- All resulting exchange differences are recognised in other comprehensive income.
1.5 PROPERTY, PLANT AND EQUIPMENT
MINE DEVELOPMENT AND PLANT FACILITIES
Mine development and plant facilities costs are capitalised to the extent that they provide access to ore bodies and
have future economic benefit. These costs include the purchase price (including duties and non-refundable taxes) of
assets used in the construction of the mine, costs directly related to develop the mine asset for its intended use and
the present value of the initial estimate of future costs of decommissioning and land restoration. Other costs
capitalised to the asset are direct costs incurred in the development of the mine and plant and indirect costs that can
be directly attributable to the development of the mine and plant.
Depreciation of other assets used in and borrowing costs directly attributable to the development of the mine and plant
are also capitalised. All mine and plant start-up costs and incidental income earned during development are
capitalised.
The above costs are capitalised until the ore body is available for intended use, at which time the asset is depreciated
and further costs are expensed. Mine assets are initially recorded at cost, whereafter they are measured at cost less
accumulated depreciation and accumulated impairment losses.
MINING EXPLORATION
Exploration costs are expensed as incurred, unless there is a high degree of confidence in the project's viability and it
is probable that the project will return future economic benefits to the group when all further pre-production expenditure
is capitalised. These costs include evaluation costs.
UNDEVELOPED PROPERTIES
Undeveloped properties include land, mineral and surface rights as well as plant and equipment used in exploration
activities are recorded at cost of acquisition.
Capitalised expenditure on undeveloped properties is reviewed for impairment at each reporting date. In the case of
undeveloped properties, there may be only inferred resources to form a basis for the impairment review. When there is
little likelihood of mineral rights being exploited, or the value of mineral rights have diminished below cost, an
impairment loss is recognised against income in the period that such determination is made.
Subsequent recovery of the resulting carrying value depends on successful development of the area of interest or sale
of the project. If a project does not prove viable, all irrecoverable costs associated with the project are written off.
DEPRECIATION OF MINING ASSETS
Land is not depreciated. Depreciation of mine development costs, plant facilities, mineral and surface rights as well as
equipment used in exploration activities is computed principally by the units-of-production method based on estimated
proven and probable reserves. To the extent that these costs benefit a portion of the entire ore body, they are
depreciated over the expected useful life of the ore body portion. Depreciation is first charged on mining ventures from
the date on which the mining ventures are available for intended use. Changes in depreciation as a result of changes
in reserve estimates are made prospectively.
OTHER PLANT AND EQUIPMENT
Other plant and equipment include plant, equipment, buildings, vehicles, office and computer equipment.
Other plant and equipment are shown at historical cost less accumulated depreciation and accumulated impairment
losses. Historical cost includes expenditure 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 measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and
maintenance are charged to profit or loss during the financial period in which they are incurred.
These assets are depreciated on the straight line basis to allocate their cost to their residual values over their
estimated useful lives as follows:
ITEM AVERAGE USEFUL LIFE
Plant and equipment 3 years
Buildings 20 years
Vehicles 3 - 10 years
Office equipment 3 - 10 years
Computer equipment 3 years
The residual value, useful life and depreciation method of each asset is reviewed and adjusted as appropriate at the
end of each reporting period. If the expectations differ from previous estimates, the change is accounted for as a
change in accounting estimate.
The 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.
The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of
another asset.
The gain or loss arising from the derecognition and/or disposal of an item of property, plant and equipment is included
in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property,
plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying
amount of the item.
1.6 INVESTMENT PROPERTY
Investment property is recognised as an asset when, and only when, it is probable that the future economic benefits
that are associated with the investment property will flow to the enterprise and the cost of the investment property can
be measured reliably.
Investment property is initially recognised at cost. Transaction costs are included in the initial measurement.
Costs include costs incurred initially and costs incurred subsequently to add to, or to replace a part of, or service a
property. If a replacement part is recognised in the carrying amount of the investment property, the carrying amount of
the replaced part is derecognised.
FAIR VALUE
Subsequent to initial measurement investment property is measured at fair value.
A gain or loss arising from a change in fair value is included in net profit or loss for the period in which it arises.
1.7 INTANGIBLE ASSETS
GOODWILL
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortised but it is tested for
impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is
carried at cost less accumulated impairment losses. Gains or losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in
which the goodwill arose, identified according to operating segments.
IT DEVELOPMENT AND SOFTWARE
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will
contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to
software and systems. Costs capitalised include external direct costs of materials and service and direct payroll and
payroll related costs of employees’ time spent on the project. Amortisation is calculated on a straight-line basis over
periods generally ranging from 3 to 5 years.
IT development costs include only those costs directly attributable to the development phase and are only recognised
following completion of technical feasibility and where the group has an intention and ability to use the asset.
1.8 FINANCIAL INSTRUMENTS
NON-DERIVATIVE FINANCIAL ASSETS
The group initially recognises loans and receivables on the date that they are originated. All other financial assets
(including assets designated as at fair value through profit or loss) are recognised initially on the trade date, which is
the date that the group becomes a party to the contractual provisions of the instrument.
The group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it
transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards
of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or
retained by the group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial
position when, and only when, the group has a legal right to offset the amounts and intends either to settle them on a
net basis or to realise the asset and settle the liability simultaneously.
The group classifies non-derivative financial assets into the following categories: held-to-maturity investments,
available-for-sale investments and loans and receivables.
HELD-TO-MATURITY INVESTMENTS
Held-to-maturity investments are non-derivative investments with fixed or determinable payments and fixed maturities
that the group's management has the positive intention and ability to hold to maturity. If the group were to sell, other
than an insignificant amount of held-to-maturity investments, the whole category would be tainted and reclassified as
available-for-sale. Held-to-maturity investments are included in non-current assets, except for those with maturities
less than 12 months from the reporting date, which are classified as current assets.
Held-to-maturity investments are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective
interest method, less any impairment losses.
Held-to-maturity investments comprise debt securities (refer note 18).
AVAILABLE-FOR-SALE INVESTMENTS
Available-for-sale investments are non-derivative investments that are designated as available-for- sale or are not
classified in any of the above categories of financial assets. Available-for-sale investments are recognised initially at
fair value.
Subsequent to initial recognition, available-for-sale investments are measured at fair value and changes therein, other
than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognised in
other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognised,
the gain or loss accumulated in equity is reclassified to profit or loss.
Available-for-sale investments comprise equity securities and debt securities.
LOANS AND RECEIVABLES
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any
impairment losses.
Loans and receivables comprise cash and cash equivalents, and trade and other receivables.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the
acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the group in the
management of its short-term commitments.
TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using
the effective interest method less provision for impairment. Appropriate allowances for estimated irrecoverable
amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant
financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and
default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is
impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is
recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against
the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited in
the consolidated statement of comprehensive income.
NON-DERIVATIVE FINANCIAL LIABILITIES
The group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All
other financial liabilities are recognised initially on the trade date, which is the date that the group becomes a party to
the contractual provisions of the instrument.
The group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
The group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial
liabilities are recognised initially at fair value less any directly attributable transaction costs. Subsequent to initial
recognition, these financial liabilities are measured at amortised cost using the effective interest method.
Other financial liabilities comprise borrowings, bank overdrafts, and trade and other payables.
BORROWINGS
Borrowings include short term and long term borrowings. Borrowings are initially recognised at fair value, net of
transaction costs incurred and is subsequently stated at amortised cost. Borrowings are classified as short term unless
the borrowing entity has an unconditional right to defer settlement of the liability for at least 12 months after the
reporting date. Borrowings are derecognised when the obligation in the contract is discharged, cancelled or has
expired. Premiums or discounts arising from the difference between the fair value of borrowings raised and the amount
repayable at maturity date are charged to profit or loss as finance expenses based on the effective interest method.
TRADE AND OTHER PAYABLES
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using
the effective interest method.
DERIVATIVE FINANCIAL INSTRUMENTS
The group holds derivative financial instruments as economic hedges of its foreign currency and commodity price risk
exposures. Hedge accounting is not applied.
Derivatives are recognised initially at fair value; any attributable transaction costs are recognised in profit or loss as
incurred. Subsequent to initial recognition, derivatives are measured at fair value and changes therein are accounted
for as described below:
OTHER NON-TRADING DERIVATIVES
When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge accounting, all
changes in its fair value are recognised immediately in profit or loss in the line, Fair value adjustments.
IMPAIRMENT
NON-DERIVATIVE FINANCIAL ASSETS
A financial asset not classified as at fair value through profit or loss is assessed at each reporting date to determine
whether there is objective evidence that it is impaired. A financial asset is impaired if there is objective evidence of
impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss
events had an impact on the estimated future cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets are impaired includes default or delinquency by a debtor, restructuring of an
amount due to the group on terms that the group would not consider otherwise, indications that a debtor or issuer will
enter bankruptcy, adverse changes in the payment status of borrowers or issuers, economic conditions that correlate
with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity
security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. The group
considers a decline of 20 percent to be significant and a period of nine months to be prolonged.
FINANCIAL ASSETS MEASURED AT AMORTISED COST
The group considers evidence of impairment for financial assets measured at amortised cost (loans and receivables
and held-to-maturity investments) at both a specific asset and collective level. All individually significant assets are
assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any
impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively
assessed for impairment by grouping together assets with similar risk characteristics.
In assessing collective impairment, the group uses historical trends of the probability of default, the timing of
recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic
and credit conditions are such that the actual losses are likely to be greater or lesser than suggested by historical
trends.
An impairment loss in respect of a financial assets measured at amortised cost is calculated as the difference between
its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective
interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and
receivables or held-to-maturity investment securities. Interest on the impaired asset continues to be recognised. When
an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the
decrease in impairment loss is reversed through profit or loss.
Where financial assets are impaired through use of an allowance account, the amount of the loss is recognised in
profit or loss within operating expenses. When such assets are written off, the write off is made against the relevant
allowance account. Subsequent recoveries of amounts previously written off are credited against operating expenses.
1.9 INVENTORIES
Inventories are valued at the lower of cost and net realisable value and include bullion stock and spares and
consumables.
BULLION STOCK (STOCKPILES, GOLD IN PROCESS, ORE IN LEACH TANKS AND PRODUCT INVENTORIES)
Costs that are incurred in or benefit the production process are accumulated as stockpiles, gold in process, ore in
leach tanks and product inventories. Net realisable value tests are performed at least annually and represent the
estimated future sales price of the product based on prevailing spot metal prices at the reporting date, less estimated
costs to complete production and bring the product to sale. Stockpiles are measured by estimating the number of
tonnes added and removed from the stockpile, the number of contained gold ounces based on assay data and the
estimated recovery percentage based on the expected processing method. Stockpile tonnages are verified by periodic
surveys. Low grade stockpiles are not valued.
Gold on hand represents production on hand after the smelting process.
Gold on hand and gold in process are valued using the weighted average cost method. Cost includes production,
depreciation and amortisation and related administration costs.
SPARES AND CONSUMABLES
The cost of spares and consumables include the purchase price, import duties and other taxes, transport, handling
and all other costs directly attributable to the acquisition of the spares and consumables. Spares and consumables are
valued using the weighted average cost method. Net realisable value is the estimated selling price in the ordinary
course of business, less applicable variable selling expenses.
1.10 CONTRIBUTED EQUITY
ORDINARY SHARES
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
1.11 CURRENT AND DEFERRED INCOME TAX
Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to
the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive
income.
The income tax expense or income for the period is the tax payable on the current period's taxable income based on
the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and unused tax losses.
CURRENT TAX ASSETS AND LIABILITIES
Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either
to settle on a net basis, or to realise the asset and settle the liability simultaneously.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of
the reporting period in the countries where the company’s subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to
be paid to the tax authorities.
DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
- Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
- Temporary differences related to investments in subsidiaries to the extent that the group is able to control the
timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable
future; and
- Taxable temporary differences arising on the initial recognition of goodwill.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the group
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. For
investment property that is measured at fair value, the presumption that the carrying amount of the investment property
will be recovered through sale has not been rebutted.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to taxes levied by the same tax authority on the same taxable entity, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent
that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit
will be realised.
TAX EXPOSURES
In determining the amount of current and deferred tax, the group takes into account the impact of uncertain tax
positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions
and may involve a series of judgements about future events. New information may become available that causes the
group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will
impact tax expense in the period that such a determination is made.
1.12 LEASES
OPERATING LEASES - LESSEE
A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to
ownership.
Operating lease payments (net of any incentives received from the lessor) are recognised as an expense on a straight-
line basis over the lease term.
1.13 IMPAIRMENT OF NON-FINANCIAL ASSETS
The carrying amounts of the group’s non-financial assets, other than investment property, inventories and deferred tax
assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated. Goodwill and indefinite-lived intangible assets are
tested annually for impairment. An impairment loss is recognised if the carrying amount of an asset or cash-generating
unit ("CGU") exceeds its recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other assets or CGUs. Subject to an operating
segment ceiling test, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment
testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill
acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of
the combination.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first
to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying
amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
1.14 PROVISIONS
ASSET RETIREMENT OBLIGATIONS
The group recognises the best estimate of the future asset retirement obligation as a liability in the year in which it
incurs a legal or constructive obligation associated with the retirement of tangible long lived assets that results from the
acquisition, construction, development, and/or normal use of the assets. The group concurrently recognises a
corresponding increase in the carrying amount of the related long-lived asset that is depreciated over the life of the
asset.
The present value of the asset retirement obligation is reviewed annually using the expected cash flow approach that
reflects the actual outcome discounted at credit adjusted risk-free interest rate. The present value is provided for in full,
based on disturbance to date, for the estimated future costs of pollution control and rehabilitation, in accordance with
environmental and regulatory requirements.
Changes in the obligation due to damage caused during the production phase are recognised in profit or loss.
Subsequent to the initial measurement, the asset retirement obligation is adjusted at the end of each year to reflect the
passage of time and changes in the estimated future cash flows underlying the obligation.
Changes in the obligation, due to the passage of time, are recognised in the consolidated statement of comprehensive
income as a financing cost using the discounted cash flow method. Changes in the obligation due to changes in
estimated cash flows are recognised as an adjustment to the carrying amount of the long-lived asset that is
depreciated over the remaining life of the asset.
The rehabilitation asset is amortised over the life of the mine.
1.15 EMPLOYEE BENEFITS
WAGES AND SALARIES
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within
12 months of the reporting date are recognised in accruals in respect of employees' services up to the reporting date
and are measured at the amounts expected to be paid when the liabilities are settled.
The liability for annual leave is recognised in the provision for employee benefits. All short-term employee benefit
obligations are presented as payables.
DEFINED CONTRIBUTION PLANS
Pension and provident plans are funded through annual contributions. The group's contributions to the defined
contribution pension and provident plans are charged to the consolidated statement of comprehensive income in the
year in which they relate. The group's liability is limited to its annual determined contributions.
SHARE BASED PAYMENTS
Share based compensation benefits are provided to employees via an employee share scheme. The fair value of
options granted under the employee share scheme 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 determined using a Binomial option pricing model that takes into account the exercise
price, term of the option, impact of dilution, share price at grant date and expected price volatility of the underlying
share, expected dividend yield and risk free interest rate for the term of the option.
The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact of any
non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are
included in assumptions about the number of options that are expected to become exercisable. At each reporting date,
the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit
expense, recognised each period, takes into account the most recent estimate.
TERMINATION BENEFITS
Termination benefits are payable when employment is terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these benefits. The group recognises termination benefits
when it is demonstrably committed to either terminating the employment of current employees according to a detailed
formal plan without the possibility of withdrawal or to providing termination benefits as a result of an offer made to
encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are
discounted to present value.
1.16 ACCOUNTING FOR BLACK ECONOMIC EMPOWERMENT ("BEE") TRANSACTIONS
The group issued equity instruments to BEE parties. These are accounted for as equity-settled share-based payments.
Equity-settled share-based payments are measured at the fair value at the date of grant. The fair value determined at
the grant date of the equity-settled share-based payments are immediately charged to profit or loss, based on the
group's estimate of the shares that will eventually vest.
The fair value of the grant is determined using the Monte Carlo pricing model that takes into account the exercise
price, term of the option, impact of dilution, share price at grant date and expected price volatility of the underlying
share, expected dividend yield and risk free interest rate for the term of the option.
1.17 REVENUE RECOGNITION
Revenue is measured at the fair value of the consideration received or receivable and represents the amounts
receivable for goods and services provided in the normal course of business, net of returns trade discounts and
volume rebates, amounts collected on behalf of third parties.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and specific criteria have been met for each of the group's activities, as
described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to
the sale have been resolved. The group bases its estimates on historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each arrangement.
SALE OF GOLD
Gold revenue is recognised when the significant risks and rewards of ownership of the gold has passed to the buyer
and can be measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery, being
when the gold leaves the processing plant and is collected by Rand Refinery Limited (the group's only customer).
Sundry revenue, incidental to the main revenue generating activities of the operations and which is a consequence of
production and selling the main products, is treated as a credit to operating costs.
RENTAL INCOME
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.
1.18 EARNINGS PER SHARE
BASIC EARNINGS PER SHARE
Basic earnings per share is computed by dividing the profit attributable to owners of the company, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during
the year, adjusted for bonus elements in ordinary shares during the year and excluding treasury shares.
DILUTED EARNINGS PER SHARE
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares, and the weighted average number of additional ordinary shares that would have been outstanding assuming
the conversion of all dilutive potential ordinary shares.
1.19 FINANCE INCOME
Finance income comprises interest income on funds invested. Interest income is recognised as it occurs, in profit or
loss, using the effective interest method.
1.20 FINANCE COSTS
Finance costs comprise interest expense on borrowings, financial liabilities designated at fair value through profit or
loss and unwinding of the discount on provisions.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are
recognised in profit or loss using the effective interest method.
1.21 GOODS AND SERVICES TAX ("GST") AND VALUE ADDED TAX ("VAT")
Revenues, expenses and assets are recognised net of the amount of associated GST and VAT, unless the GST and
VAT incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST and VAT receivable or payable. The net amount
of GST and VAT recoverable from, or payable to, the taxation authority is included with other receivables or payables
in the consolidated statement of financial position.
Cash flows are presented on a gross basis. The GST and VAT components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash
flows.
1.22 ROUNDING
The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments
Commission, relating to the "rounding off" of amounts in the consolidated financial statements. Amounts in the
consolidated financial statements have been rounded off in accordance with that Class Order to the nearest thousand
A$, or in certain cases, the nearest A$.
1.23 RECLASSIFICATION
Certain immaterial reclassifications were made to comparative figures to achieve better comparison and comparability
to the current year's results.
2. NEW STANDARDS AND INTERPRETATIONS
Certain new accounting standards and interpretations have been published that are not mandatory for the
31 December 2012 reporting period. The group's assessment of the impact of these new standards and interpretations is
set out below:
2.1 STANDARDS AND INTERPRETATIONS EFFECTIVE AND ADOPTED IN THE CURRENT YEAR
The group has adopted the following standards and interpretations that are effective for the current financial year and that
are relevant to its operations:
EFFECTIVE FOR
ANNUAL
PERIODS
STANDARD OR BEGINNING ON
INTERPRETATION OR AFTER IMPACT ON CONSOLIDATED FINANCIAL STATEMENTS
AASB 2010-8 Amendments 01 January 2012 The amendment introduces a rebuttable presumption that
to Australian Accounting investment property measured at fair value is recovered entirely by
Standards - Deferred Tax: sale.
Recovery of underlying
assets The principals of the amendment have been previously applied and
accordingly there was no material impact on the financial
statements as a result of this amendment.
2.2 STANDARDS AND INTERPRETATIONS EARLY ADOPTED
The group has chosen not to early adopt any of the standards and interpretations not yet effective.
2.3 STANDARDS AND INTERPRETATIONS NOT YET EFFECTIVE
The following accounting standards, amendments and interpretations, which are not yet effective but relevant to the
group, have not yet been adopted:
EFFECTIVE FOR
ANNUAL
PERIODS
STANDARD OR BEGINNING ON EXPECTED IMPACT ON CONSOLIDATED FINANCIAL
INTERPRETATION OR AFTER STATEMENTS
AASB 9 Financial 01 January 2015 AASB 9 introduced new requirements for classifying and measuring
Instruments and subsequent financial assets. Subsequently, new requirements were published
amendments for the accounting for financial liabilities and the derecognition of
financial instruments. As the scope of the standard will be further
expanded to included impairment of assets and hedge accounting,
the group will review the effect of a comprehensive standard on
financial instruments and consider adoption when appropriate.
AASB 10 Consolidated 01 January 2013 The standard defines the principle of control and establishes control
Financial Statements, AASB as the basis for determining which entities are included in the
2012-10 and consolidation financial statements. This standard will not have a
AASB 2011-7 significant impact on the financial statements of the group as it
currently applies the criteria for establishing control as defined in
AASB 10 Consolidated Financial Statements.
AASB 12 Disclosure of 01 January 2013 The standard requires an entity to disclose information that enables
Interest in Other Entities users of financial statements to evaluate the nature of, and risks
associated with, its interests in subsidiaries, entities which are not
fully consolidated, including special purpose entities; and the effects
of those interests on its financial position, financial performance and
cash flows. The group is currently reviewing the effects of this
standard and the impact on the extent of disclosures required.
AASB 13 Fair Value 01 January 2013 The standard explains how to measure fair value and aims to
Measurement and AASB enhance fair value disclosure. The group has yet to determine
2011-8 which, if any, of its current measurement techniques will have to
change as a result of the new guidance. It is therefore, not possible
to state the impact, if any, that the new rules will have on any of the
amounts recognised in the financial statements. However,
application of the new standard will impact the nature and extent of
information disclosed in the notes to the financial statements.
AASB 2011-4 Amendments 01 July 2013 Removes the individual key management personnel disclosure
to Australian Accounting requirements from AASB 124 Related Party Disclosures, to achieve
Standards to Remove consistency with the international equivalent standard and remove a
Individual Key Management duplication of the requirements with the Corporations Act 2001.
Personnel Disclosure
Requirements These amendments cannot be adopted early.
AASB 2011-9 Amendments 01 July 2012 The main change from these amendments is a requirement for
to Australian Accounting entities to group items presented in other comprehensive income on
Standards Presentation of the basis of whether they may be recycled to profit or loss in the
Items of Other future. The amendments do not address which items are presented
Comprehensive Income in other comprehensive income.
We do not anticipate that this additional disclosure will have a
significant impact on the financial statements.
AASB 2012-5 Amendments 01 January 2013 The annual improvements project makes minor but necessary
to Australian Accounting annual amendments to Australian Accounting Standards.
Standards arising from Amendments made in the 2009-2011 Cycle are:
Annual Improvements 2009- - AASB 101 – clarifies the disclosure requirements for
2011 Cycle comparative information when an entity provides a third
balance, either because it has applied an accounting policy
retrospectively, restated items retrospectively or reclassified
items in its financial statements or does so voluntarily.
- AASB 116 – clarifies that spare parts and servicing equipment
are classified as property, plant and equipment rather than
inventory when they meet the definition of property, plant and
equipment.
- AASB 132 – clarifies the treatment of income tax relating to
distributions and transaction costs.
- AASB 134 – clarifies the disclosure requirements for segment
assets and liabilities in interim financial statements.
The group does not anticipate that this additional disclosure will
have a significant impact on the financial statements.
3. FINANCIAL RISK MANAGEMENT
The group's activities expose it to a variety of financial risks including, market risk (interest rate risk, foreign exchange risk
and commodity price risk), credit risk and liquidity risk. The group's overall risk management process focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on its financial performance.
The group's Board of Directors has the overall responsibility for the establishment and oversight of the group's risk
management framework.
The group's Audit Committee oversees how management monitor compliance with the group's risk management policies
and procedures and reviews the adequacy of the risk management framework in relation to the risk faced by the group.
The group Audit Committee is assisted in its oversight role by Internal Audit.
The group holds the following financial instruments:
2012 2011
Note A$ '000 A$ '000
LOANS AND RECEIVABLES
Short-term deposits 15 35 589 208 127
Cash on hand 15 1 419 1 365
Trade receivables 16 10 894 5 504
Restricted cash 19 13 402 13 124
61 304 228 120
HELD-TO-MATURITY
Held-to-maturity investments 18 2 127 1 408
AVAILABLE-FOR-SALE
Available-for-sale investments 20 30 266 -
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
Gold derivative liabilities 26 76 834 -
FINANCIAL LIABILITIES AT AMORTISED COST
Trade and other payables 25 33 403 22 897
Borrowings 28 218 212 -
251 615 22 897
MARKET RISK
(i) INTEREST RATE RISK
The group's exposure to cash flow interest rate risk relates to the group’s cash and cash equivalents, short-term deposits,
restricted cash, held-to-maturity investments and borrowings.
The group constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals
of existing positions, alternatives and the mix of fixed and variable interest rates.
SENSITIVITY ANALYSIS
A change of 100 basis points in interest rates at the end of the year would have increased/(decrease) in profit or loss by
the amount shown below. This analysis assumes that all other variables in particular foreign currency rates, remain
constant.
PROFIT OR LOSS
100 bp 100 bp
INCREASE DECREASE
A$ '000 A$ '000
2012
Cash and cash equivalents 256 (256)
Held-to-maturity investments 15 (15)
Restricted cash 96 (96)
Borrowings (1 571) 1 571
(1 204) 1 204
PROFIT OR LOSS
100 bp 100 bp
INCREASE DECREASE
A$ '000 A$ '000
2011
Cash and cash equivalents 1 603 (1 603)
Held-to-maturity investments 11 (11)
Restricted cash 8 (8)
1 622 (1 622)
(ii) FOREIGN EXCHANGE RISK
The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the US Dollar ("US$") and Australian Dollar ("A$").
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a
currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow
forecasting.
The group generally manages its exposure to currency fluctuations by holding cash reserves in its functional currency
unless there is a requirement to provide funding for operations in currency jurisdictions outside of its functional currency
jurisdiction or to meet future committed obligations that are denominated in a currency other than its functional currency
for capital or operating expenditure, debt obligations, acquisitions or dividends.
Net exposures for operating and capital expenditure that are denominated in currencies other than the functional currency
for amounts greater than the equivalent of US$ 10 million, on a three month rolling forward basis, are hedged to ensure
there are no adverse functional currency losses.
Management strategies for exposure to capital projects for amounts greater than the equivalent of US$ 10 million that are
denominated in currencies other than the functional currency are not permitted without express Board approval, which
can be obtained during the capital expenditure approval as part of the budget process or a capital project approval.
ANALYSIS OF FOREIGN EXCHANGE EXPOSURE
The analysis of foreign exchange exposure, at the end of the reporting period, by currency is set out below:
2012 2011
US$ '000 A$ '000 US$ '000 A$ '000
ASSETS
Cash and cash equivalents - 17 219 - 146 373
Trade receivables - 70 - 702
LIABILITIES
Trade and other payables - (496) - (13 179)
Gold derivative liabilities (54 996) - - -
Borrowings (124 821) - - -
SENSITIVITY ANALYSIS ZAR AGAINST US$
A strengthening/(weakening) of the ZAR against the US$ would have affected the measurement of financial instruments
denominated in a foreign currency and increase/(decreased) profit or loss by the amounts shown below. The analysis is
based on foreign currency exchanges rate variations that the group considers to be reasonably possible at the end of the
reporting period. The analysis assumes that all other variables, in particular interest rates and commodity prices remain
constant:
PROFIT OR LOSS
STRENGTHENING WEAKENING
MOVEMENT A$ '000 A$ '000
2012
US$ 10% 5 312 (4 829)
2011
US$ 10% - -
SENSITIVITY ANALYSIS US$ AGAINST A$
A strengthening/(weakening) of the US$ against the A$ would have affected the measurement of financial instruments
denominated in a foreign currency and increase/(decreased) profit or loss by the amounts shown below. The analysis is
based on foreign currency exchanges rate variations that the group considers to be reasonably possible at the end of the
reporting period. The analysis assumes that all other variables, in particular interest rates and commodity prices, remain
constant:
PROFIT OR LOSS
STRENGTHENING WEAKENING
MOVEMENT A$ '000 A$ '000
2012
A$ 10% 10 942 (12 036)
2011
A$ 10% - -
SENSITIVITY ANALYSIS ZAR AGAINST A$
There is no currency risk on A$ financial instruments as they are held in companies with A$ as the functional currency.
(iii) COMMODITY PRICE RISK
Risk arises from fluctuations in the gold price. The risk is managed by the natural correlation between the gold price in
US$ and the US$/ZAR exchange rate. If the gold price declines, the ZAR tends to weaken thereby limiting the variability in
the revenue recognition.
Gold production need not be sold intraday. This is however subject to the restriction that the maximum combined currency
and commodity open position arising from withholding sales must be limited to an average weeks gold production.
In addition, up to 50% of the estimated gold production for the next rolling three month period may be sold forward
provided that the commodity hedge is aligned with a currency hedge undertaken.
SENSITIVITY ANALYSIS
A change in the gold price by 10% with all other variables held constant, in particular foreign currency rates, would have
the following impact on the exposure to commodity risk at the end of the period:
PROFIT OR LOSS
STRENGTHENING WEAKENING
MOVEMENT A$ '000 A$ '000
2012
Gold derivative liabilites 10% (10 557) 12 962
2011
Gold derivative liabilites 10% - -
CREDIT RISK
Credit risk is managed on a group basis. Credit risk mainly arises from cash equivalents and deposits with banks and
financial institutions, as well as credit exposure to customers, including outstanding receivables and committed
transactions. The group receives timeous payment on gold sales and only deposits cash with various major banks and
financial institutions with a minimum independent rating of "A", based on the ratings by Fitch Ratings.
The group's only customer, Rand Refinery Limited, represents the majority of trade receivables as set out in note 16.
LIQUIDITY RISK
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close out market positions as they fall due.
The group manages liquidity risk by continuously monitoring forecast and actual production and cash flows and matching
the maturity profiles of financial assets and liabilities. Surplus funds are generally only invested in instruments that are
tradable in highly liquid markets.
FINANCING ARRANGEMENTS
The group has a number of intraday trading facilities in place across several institutions for the purpose of gold and
foreign exchange services. The group also has a A$ 5.690 million unsecured, undrawn overdraft facility.
MATURITY OF FINANCIAL INSTRUMENTS
The table below analyses the group’s financial liabilities and net-settled derivative financial liabilities into relevant maturity
groupings based on the remaining period at the consolidated statement of financial position to the contractual maturity
date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months
equal their carrying balances as the impact of discounting is not significant.
MATURITY OF FINANCIAL LIABILITIES
CARRYING LESS THAN BETWEEN MORE THAN
AMOUNT ONE YEAR 1 - 2 YEARS 3 YEARS TOTAL
2012 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000
Trade and other payables (33 403) (33 403) - - (33 403)
Gold derivative liabilities (76 834) (30 387) (21 965) (24 482) (76 834)
Borrowings (218 212) (70 821) (191 789) (5 272) (267 882)
(251 615) (104 224) (191 789) (5 272) (301 285)
CARRYING LESS THAN BETWEEN MORE THAN
AMOUNT ONE YEAR 1 - 2 YEARS 3 YEARS TOTAL
2011 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000
Trade and other payables (22 897) (22 897) - - (22 897)
FAIR VALUE ESTIMATION
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.
The group uses a variety of methods and make assumptions that are based on market conditions existing at the end of
each reporting period.
The group has adopted AASB 7 Financial Instruments: Disclosure, which requires disclosure of the fair value
measurements by level of the following fair value measurement hierarchy:
- Quoted prices (unadjusted) in active markets for identical assets (level 1);
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (level 2); and
- Inputs for the asset or liability that are not based on observable market data (level 3).
The group classified the financial assets and financial liabilities as follows:
- Available-for-sale investments - Level 2;
- Gold derivative liabilities - forward sale agreement - Level 2; and
- Gold derivative liabilities- Franco Nevada gold derivative - Level 3.
ACCOUNTING CLASSIFICATION AND FAIR VALUES
The accounting policies for financial instruments have been applied to the line items below:
TOTAL
CARRYING FAIR
VALUE VALUE
2012 Note A$ '000 A$ '000
FINANCIAL ASSETS
Cash and cash equivalents 15 37 008 37 008
Trade receivables 16 10 894 10 894
Held-to-maturity investments 18 2 127 2 127
Restricted cash 19 13 402 13 402
Available-for-sales investments 20 30 266 30 266
93 697 93 697
FINANCIAL LIABILITIES
Trade and other payables 25 33 403 33 403
Gold derivative liabilities 26 76 834 76 834
Borrowings 28 218 212 218 212
328 449 328 449
TOTAL
CARRYING FAIR
VALUE VALUE
2011 Note A$ '000 A$ '000
FINANCIAL ASSETS
Cash and cash equivalents 15 209 492 209 492
Trade receivables 16 5 504 5 504
Held-to-maturity investments 18 1 408 1 408
Restricted cash 19 13 124 13 124
229 528 229 528
FINANCIAL LIABILITIES
Trade and other payables 25 22 897 22 897
22 897 22 897
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under
the circumstances.
In preparing the consolidated financial statements, management is required to make estimates and assumptions that
affect the amounts represented in the consolidated financial statements and related disclosures. Use of available
information and the application of judgement is inherent in the formation of estimates. Actual results in the future could
differ from these estimates which may be material to the consolidated financial statements.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are addressed below:
FAIR VALUE ESTIMATION
PROPERTY, PLANT AND EQUIPMENT
The fair value of property, plant and equipment recognised as a result of a business combination is the estimated amount
for which property could be exchanged on the acquisition date between a willing buyer and a willing seller, in an arm's
length transaction, after proper marketing, wherein the parties had each acted knowledgeably. The fair value of the items
of property, plant and equipment is based on the market, income and costs approaches using quoted market prices for
similar items when available and depreciated replacement cost when appropriate. Depreciated replacement cost reflects
adjustments for physical deterioration as well as functional and economic obsolescence.
MINERAL RIGHTS
The fair value of mineral rights, which are recognised as part of a business combination, comprising mineral reserves and
mineral resources, are determined by reference to market values of those or similar items where available, or by
discounting expected future cash flows using the discount rate to present values.
FINANCIAL INSTRUMENTS
The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives) is
determined by using valuation techniques. The group uses its judgement to select a variety of methods and makes
assumptions that are mainly based on market conditions existing at the end of each reporting period.
FORWARD EXCHANGE CONTRACTS
The fair values of forward exchanges contracts are based on broker quotes. Those quotes are tested for reasonableness
by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest
rates for a similar instrument at the measurement date. Fair values reflect the credit risk of the instrument and include
adjustments to take account of the credit risk of the group entity and counterparty when appropriate.
INVESTMENT PROPERTY
An experienced valuator having appropriate recognised professional qualifications and recent experience in the location
and category of the property being valued, values the group's investment property portfolio every six months. The fair
values are based on market values, being the estimated amount for which a property could be exchanged on the date of
the valuation between a willing buyer and willing seller in an arm's length transaction after proper marketing wherein the
parties had each acted knowledgeably.
In the absence of current prices in an active market, the valuations are prepared by considering the estimated rental value
of the property. A market yield is applied to the estimated rental value to arrive at the gross property valuation. When
accrual rents differ materially from the estimated rental value, adjustments are made to reflect actual rents.
SHARE BASED PAYMENT TRANSACTIONS
Share based payments are calculated at fair value at the date granted and recognised as an expense over the vesting
period. The group uses certain assumptions as inputs into the valuation model. The key assumptions and judgements
used in the valuation of share based payments is set out in note 31 and 39.
MEASUREMENT OF ASSET RETIREMENT OBLIGATION
The present value of the asset retirement obligation is calculated annually using the expected cash flow approach that
reflects management's best estimates discounted at a credit adjusted risk-free interest rate.
Rehabilitation costs are expected when exploration, evaluation and development activities give rise to the need for
restoration. The costs include obligations relating to reclamation, waste site closure, plant closure and other costs
associated with the restoration of the site. These estimates of the restoration obligations are based on current technology
and legal requirements and future costs. Any changes in the estimates are adjusted on a prospective basis. In
determining the restoration obligations, the entity has assumed no significant changes will occur in the relevant South
African legislation in relation to restoration of such mines in the future. Refer to note 29 of the notes to the consolidated
financial statements for the key assumptions used in determining the asset retirement obligation.
MINERAL RESERVES
Mineral reserves are the basis of future cash flow estimates and unit-of-production depreciation and depletion and
amortisation calculations. Management uses estimates and assumptions in determining the reserves. These estimates
and assumptions are continually evaluated based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstance.
The group is required to determine and report on the mineral reserves in accordance with the JORC and SAMREC codes.
Estimates of mineral reserves may change from year to year due to the change in economic assumptions used to
estimate ore reserves and due to additional geological data becoming available during the course of operations.
Changes in reported proven and probable reserves may affect the group's financial results and position in a number of
ways including the following:
- Asset carrying values may be affected due to changes in estimated cash flows;
- Depreciation and amortisation charges to profit or loss may change as these are calculated on the units-of-
production method, or where the useful economic lives of assets change;
- Decommissioning site restoration and environmental provisions may change where changes in Ore Reserves affect
expectations about the timing or cost of these activities; and
- The carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax
benefits.
USEFUL LIVES AND RESIDUAL VALUES
The group depreciates its mining assets using the units-of-production method, based on proven and probable mineral
reserves. The calculation of the units-of-production rate of depreciation could be impacted to the extent that actual
production is different from current forecast production based on proven and probable reserves. This would generally
arise when there are significant changes in any of the factors or assumptions used in estimating mineral reserves.
Plant and equipment is depreciated on a straight line basis over their estimated useful lives, which do not exceed the
estimated mine life. The estimation of the useful lives of assets is based on historic performance as well as expectations
about future use. These methods require a significant degree of judgement to be applied by management. The actual
lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and
maintenance programmes.
5. SEGMENT INFORMATION
DESCRIPTION OF SEGMENTS
Management has determined the operating segments based on the reports reviewed by the Executive Committee and
used to make strategic decisions.
The committee considers the business from both a functional and a geographic perspective and has identified five
reportable segments: Corporate, which consists of corporate, administrative and business development activities; Modder
East, Cooke Underground and Randfontein Surface Operations, which represent the segments responsible for the
extraction of and processing of gold ore into fine gold; and Projects, which consist of the exploration and feasibility studies
of the group's mineral properties. The reportable segments have changed from the previous period due to the acquisition
of new businesses during the year.
The reported measure of assets and liabilities excludes inter-segment assets and liabilities. Corporate assets consist
mainly of cash and cash equivalents managed centrally for the other segments.
Performance is measured based on segment profit before tax as included in the internal management reports that are
reviewed by the Executive Committee.
The group is primarily domiciled in South Africa. The revenue, profit and total non-current assets described in the table
below are located in South Africa.
SEGMENT INFORMATION PROVIDED TO THE EXECUTIVE COMMITTEE:
2012 2011
SEGMENT REVENUE A$ '000 A$ '000
Corporate - -
Modder East 153 094 188 260
Cooke Underground 185 034 -
Randfontein Surface 43 505 -
Projects - -
CONSOLIDATED SEGMENT REVENUE 381 633 188 260
(LOSS)/PROFIT BEFORE TAX
Corporate (27 075) (25 068)
Modder East 73 311 106 225
Cooke Underground (38 199) (12 457)
Randfontein Surface (12 063) -
Projects (16 307) -
SEGMENT (LOSS)/PROFIT BEFORE TAX (20 333) 68 700
Gain on bargain purchase 107 206 -
Depreciation on fair values of mineral reserves and resources (11 904) -
Black Economic Empowerment transactions (28 686) -
CONSOLIDATED PROFIT BEFORE TAX 46 283 68 700
OTHER PROFIT AND LOSS DISCLOSURE:
FINANCE INCOME
DEPRECIATION COSTS TAX
2012 A$ '000 A$ '000 A$ '000
Corporate 140 6 582 -
Modder East 17 703 3 841 (20 659)
Cooke Underground 28 213 1 552 8 939
Randfontein Surface 9 913 545 3 141
Projects 472 1 798 (7 552)
56 441 14 318 (16 131)
FINANCE INCOME
DEPRECIATION COSTS TAX
2011 A$ '000 A$ '000 A$ '000
Corporate 55 3 438 18 806
Modder East 20 442 184 -
Cooke Underground - - -
Randfontein Surface - - -
Projects 1 102 10 1
21 599 3 632 18 807
2012 2011
A$ '000 A$ '000
ASSETS
Corporate 44 409 216 417
Modder East 108 691 169 497
Cooke Underground 310 216 -
Randfontein Surface 114 737 -
Projects 13 197 1 320
591 250 387 234
Fair values on mineral resources and reserves 201 421 -
Goodwill 8 568 -
CONSOLIDATED ASSETS 801 239 387 234
LIABILITIES
Corporate (123 398) (16 292)
Modder East (115 568) (42 798)
Cooke Underground (115 072) -
Randfontein Surface (42 561) -
Projects (38 603) (2 639)
CONSOLIDATED TOTAL LIABILITIES (435 202) (61 729)
Cooke Underground and Randfontein Surface Operations were not under control of the group during 2011.
2012 2011
A$ '000 A$ '000
6. COST OF SALES
Cost of sales comprise the following:
By-product revenue 5 541 1 680
Capital re-allocation 30 883 18 457
Consultants and contractors costs (27 519) (10 954)
Consumables (107 299) (33 309)
Depreciation (55 829) (20 442)
Employee costs (133 966) (35 693)
Other costs (3 702) (830)
Retrenchment cost (3 209) -
Royalty tax (3 351) (951)
Staff refreshments (94) (58)
Stock movement (2 503) 4 040
Utility costs (34 387) (4 353)
(335 435) (82 413)
7. GENERAL AND ADMINISTRATIVE EXPENDITURE
Audit fees (1 146) (583)
Consultants and management services (7 685) (8 095)
Depreciation and amortisation (248) (151)
Directors' remuneration (4 429) (2 865)
Employee share option plan (1 420) (3 898)
Insurance (405) (146)
Listing fees (824) (762)
Marketing (97) (148)
Provision for bad debts (1 861) -
Operating lease expenses (475) (263)
Other administrative expenses (3 160) (1 194)
Salaries and benefit expenses (5 174) (4 613)
Transaction costs (2 022) (12 033)
(28 946) (34 751)
8. AUDITORS' REMUNERATION
The following fees were payable for services provided during the year by the auditor of the group and its related practices:
2012 2011
A$ A$
PRICEWATERHOUSECOOPERS AUSTRALIA
Audit and assurance services 161 500 142 574
Other services 4 400 3 000
165 900 145 574
PRICEWATERHOUSECOOPERS SOUTH AFRICA
Audit and assurance services 638 417 201 429
Tax compliance services 12 634 9 651
Other services 50 573 5 462
701 624 216 542
PRICEWATERHOUSECOOPERS LUXEMBOURG
Tax compliance services 10 974 -
PRICEWATERHOUSECOOPERS CYPRUS
Tax compliance services 42 054 -
2012 2011
Note A$ '000 A$ '000
9. FAIR VALUE ADJUSTMENTS
Gold derivative liabilities 26 (21 406) -
Convertible bonds 35 - 7 049
Other (139) -
(21 545) 7 049
10. OTHER EXPENSES
Impairment of property, plant and equipment 21 (2 700) -
Impairment of intangible assets 23 (1 636) -
(Loss)/gain on foreign exchange transactions (1 153) 34
Loss on disposal of assets (149) (79)
(5 638) (45)
11. BUSINESS COMBINATIONS
(a) ACQUISITION OF A SUBSIDIARY - RAND URANIUM
In January 2012, Newshelf 1114 Proprietary Limited, a 100% held subsidiary of Gold One, acquired 100% of the issued
share capital of the mining company, Rand Uranium Proprietary Limited ("Rand Uranium"). All conditions precedent to the
acquisition of Rand Uranium for a purchase price of US$ 250.000 million (A$ 242.780 million), were fulfilled and the
acquisition was declared unconditional on 06 January 2012 ("the acquisition date"). The purchase price was settled in
cash on the completion date. The acquisition has significantly increased the group's production capacity.
Rand Uranium has been consolidated into the Gold One group from 06 January 2012 and contributed a revenue of
A$ 216.269 million and net loss of A$ 18.667 million for the year. The fair value assessments and purchase price
allocation have been finalised. An adjustment was made to the mineral resources and mineral reserves, together with the
consequential tax effects.
Details of the purchase consideration and the fair values of the net assets acquired are as follows:
2012
A$ '000
FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
Asset retirement provisions (23 271)
Available-for-sale investments 28 033
Borrowings (30 080)
Cash and cash equivalents 2 308
Deferred taxation on fair value adjustment (23 209)
Gold derivative liabilities (57 844)
Inventories 6 182
Investment property 8 183
Mineral reserve and related rights 196 977
Mineral resources and related rights 144 822
Property, plant and equipment 108 812
Taxation payable (150)
Trade and other payables (24 215)
Trade and other receivables 8 324
Total identifiable net assets
344 872
Gain on bargain purchase (102 092)
COST OF INVESTMENT 242 780
NET CASH ON ACQUISITION
Cash consideration paid (242 780)
Cash and cash equivalents 2 308
(240 472)
Acquisition costs of A$ 0.186 million (2011: A$ 4.131 million) are included in general and administration expenses in profit
or loss and in operating cash flows in the consolidated statement of cash flows.
BARGAIN PURCHASE
A bargain purchase arose in the acquisition of Rand Uranium as a result of the distressed sale of the assets.
Management have performed a reassessment of the acquisition and are satisfied that all the assets acquired and
liabilities assumed have been correctly identified. As a result, a gain from the bargain purchase amounting to
A$ 102.092 million was recognised in profit or loss.
(b) ACQUISITION OF A SUBSIDIARY - GOLIATH GOLD MINING LIMITED
Goliath Gold Mining Limited ("Goliath"), previously known as White Water Resource Limited, acquired all the Megamine
Proprietary Limited ("Megamine") assets of Gold One Africa, a 100% held subsidiary of Gold One. All conditions
precedent to the acquisition of Goliath were fulfilled and the transaction was declared unconditional on 28 March 2012.
Goliath settled the purchase price by issuing shares to Gold One Africa. In accordance with AASB 3 Business
Combinations, this transaction was determined to be a "reverse acquisition". In a reverse acquisition the legal acquirer,
Goliath becomes the accounting subsidiary and the legal acquiree, Megamine, becomes the accounting acquirer.
Goliath incurred a net loss of A$ 7.607 million for the nine months, from 01 April 2012 to 31 December 2012, which has
been included in the Gold One group accounts. If the acquisition had occurred on 01 January 2012, Goliath would have
contributed a loss of A$ 7.922 million to the Gold One group.
Goliath was acquired in order for the group to gain control over Goliath's explorations and prospecting resources.
Details of the purchase consideration and the provisional fair values of the net assets acquired are as follows:
2012
A$ '000
FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
Cash and cash equivalents 4 478
Investment property 485
Mineral resources 7 062
Other financial liabilities (2 469)
Other financial assets 4 747
Property, plant and equipment 3
Trade and other receivables 162
Trade and other payables (2 473)
Total identifiable net assets
11 995
Goodwill 9 547
MARKET VALUE OF CONSIDERATION 21 542
Acquisition costs of A$ 0.313 million (31 December 2011: A$ 1.020 million) are included in general and administration
expenses in profit or loss and in operating cash flows in the consolidated statement of cash flows.
GOODWILL
Goodwill was measured as the excess of the fair value of the consideration effectively transferred, as the market value of
the shares issued, which was in excess of the net amount of Goliath's recognised identifiable assets and liabilities. No
deferred tax is raised on goodwill.
NON-CONTROLLING INTEREST
As part of the business combination, Goliath issued 104,891,947 shares to Gold One Africa, resulting in Gold One Africa
owning 72% of Goliath's issued share capital.
The amount of non-controlling interest in Goliath recognised at the acquisition date was A$ 7.704 million, which was
measured at fair value. The fair value was determined as the market value of the shares in issue and the proportion of
Megamine assets contributed to Goliath.
(c) ACQUISITION OF A SUBSIDIARY - EZULWINI
In August 2012, Gold One acquired 100% of the issued share capital of First Uranium Limited ("Cyprus"), which in turn
holds 100% of the issued share capital of Ezulwini Mining Company Proprietary Limited ("Ezulwini"), a mining company
adjacent to Gold One's Cooke assets ("Rand Uranium"). All conditions precedent to the acquisition of Cyprus were fulfilled
and the acquisition was declared unconditional on 01 August 2012. The purchase price of A$ 67.159 million
(US$ 70.000 million) was settled in cash on completion date.
Ezulwini was acquired in order to integrate the company with the Cooke Underground and Randfontein Surface
Operations to unlock the project's uranium potential.
Ezulwini was consolidated into the Gold One group from 01 August 2012 and contributed revenue of A$ 12.257 million
and a net loss of A$ 23.755 million for the five months. If the acquisition had occurred on 01 January 2012, Ezulwini would
have contributed revenue of A$ 43.829 million and a net loss of A$ 36.167 million.
The fair values have been determined on a provisional basis, which are pending the outcome of a review and audit of the
proven and probable gold and uranium reserves and resources. The outcome of this process is expected to be completed
in April 2013. The following fair values are considered provisional:
- Mineral reserves and resources and related rights; and
- Deferred tax on fair value adjustments.
As a result of the finalisation of the fair values of the above items arising from the acquisition, the gain on bargain
purchase may increase.
Details of the purchase consideration and the provisional fair values of the net assets acquired are as follows:
2012
A$ '000
PROVISIONAL FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
Asset retirement provisions (6 514)
Cash and cash equivalents 15 317
Gold derivative liabilities (44 564)
Held-to-maturity investments 374
Inventories 4 424
Property, plant and equipment 112 038
Restricted cash 4 173
Taxation payable (1 163)
Trade and other payables (13 323)
Trade and other receivables 1 511
Total identifiable net assets
72 273
Gain on bargain purchase (5 114)
COST OF INVESTMENT 67 159
NET CASH ON ACQUISITION
Cash consideration paid (67 159)
Cash and cash equivalents 15 317
(51 842)
Acquisition costs of A$ 2.138 million (2011: A$ 0.005 million) are included in general and administrative expenses in profit
or loss and in operating cash flows in the consolidated statement of cash flows.
BARGAIN PURCHASE
A bargain purchase arose in the acquisition of Ezulwini as a result of the distressed sale of assets. Management are in
the process of finalising the fair value of the identifiable assets and liabilities. As a result, a provisional gain from the
bargain purchase was recognised a gain on bargain purchase amounting to A$ 5.114 million in profit or loss.
(d) RECONCILIATION OF PURCHASE CONSIDERATION - CASH OUTFLOW
Outflow of cash to acquire subsidiary, net of cash acquired:
Cash consideration (309 939) -
Less: Cash balance acquired 22 103 -
Outflow of cash - investing activities (287 836) -
(e) RECONCILIATION OF GAIN ON BARGAIN PURCHASE
Gain on bargain purchase comprises the following:
Rand Uranium acquisition 11(a) 102 092 -
Ezulwini acquisition 11(c) 5 114 -
107 206 -
12. FINANCE COSTS
Finance charges on borrowings 28 (11 759) -
Unwinding of discount on asset retirement obligation 29 (2 220) (150)
Other (339) (3 482)
(14 318) (3 632)
13. INCOME TAX
The major components of the income tax expenses are:
CURRENT INCOME TAX
Current income tax charge (4 323) (238)
Prior year 94 -
(4 229) (238)
DEFERRED INCOME TAX
Current year (12 435) (29 827)
Prior year 533 11 258
(11 902) (18 569)
INCOME TAX IN THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (16 131) (18 807)
NUMERICAL RECONCILIATION OF INCOME TAX TO PRIMA FACIE TAX PAYABLE:
Accounting profit before tax 46 283 68 700
Tax at the standard corporate tax rate of 28% (2011: 28%) (12 959) (19 236)
Deferred tax assets not recognised (21 031) (1 790)
Non-deductible expenses (19 613) (8 727)
Non taxable income 30 026 -
Prior year adjustment - deferred tax (533) (257)
Prior year adjustment - deferred tax on special capital allowances - 11 515
Prior year adjustment - income tax 94 -
Special capital allowances - current year - 4 951
Tax rate differential 7 885 (5 263)
TOTAL CHARGE (16 131) (18 807)
AMOUNTS ARISING IN THE CURRENT REPORTING PERIOD AND
RECOGNISED DIRECTLY IN EQUITY AND NOT IN PROFIT AND LOSS:
Aggregated current tax - -
Aggregated deferred tax (1 006) -
TAX LOSSES
Unused tax losses not recognised as deferred tax assets 197 524 11 115
POTENTIAL TAX BENEFIT AS 28% (2011: 28%) 55 307 3 112
UNRECOGNISED TEMPORARY DIFFERENCES
Unrecognised deferred tax assets relating to temporary differences 97 759 3 125
2012 2011
14. EARNINGS PER SHARE
EARNINGS PER SHARE (A$)
Basic earnings per share 0.02 0.06
Diluted earnings per share 0.02 0.06
BASIC EARNINGS PER SHARE
The calculation of basic earnings per share at 31 December 2012 was based on the profit attributable to ordinary
shareholders of A$ 32.694 million (2011: A$ 49.893 million) and a weighted average number of shares of ordinary shares
outstanding of 1,416,121,312 (2011: 840,367,163), calculated as follows:
Profit attributable to the owners of the company (A$ '000) 32 694 49 893
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES (BASIC)
Issued ordinary shares at 1 January 1 415 189 093 806 875 987
Effect of share options exercised 50 490 6 771 723
Effect of shares issued related to a business combination - Goliath 705 605 -
Issue of shares - Tulo 176 124 267 992
Issue of shares - Jintu transaction - 16 438 356
Conversion of bondholders - 10 013 105
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES 1 416 121 312 840 367 163
DILUTIVE EARNINGS PER SHARE
The calculation of diluted earnings per share at 31 December 2012 was based on profit attributable to the ordinary
shareholders of A$ 32.694 million (2011: A$ 49.893 million) after diluted potential ordinary shares of 1,457,290,638
(2011: 865,867,651), calculated as follows:
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES (DILUTED):
Weighted average number of ordinary shares (basic) 1 416 121 312 840 367 163
Effect of share options on issue:
- Employee share options in issue 41 169 326 25 500 488
DILUTIVE NUMBER OF ORDINARY SHARES 1 457 290 638 865 867 651
The average market value of the group's shares for purposes of calculating the dilutive effect of share options was based
on quoted market prices for the period during which the options were outstanding.
2012 2011
A$ '000 A$ '000
15. CASH AND CASH EQUIVALENTS
Short-term deposits 35 589 208 127
Cash at bank 1 419 1 365
37 008 209 492
RECLASSIFICATION OF CASH TO RESTRICTED CASH
A prior year cash balance amounting to A$ 13.124 million, relating to funds allocated for rehabilitation after the life-of mine
was reallocated to restricted cash (refer note 19).
16. TRADE AND OTHER RECEIVABLES
Trade receivables 10 894 2 256
Prepayments 1 182 171
GST/VAT 2 602 3 322
Funds in trust - 3 248
14 678 8 997
Trade and other receivables are non-interest bearing and generally settled within 30 days.
FUNDS IN TRUST
Funds in trust refers to a dispute with Grinaker-LTA Mining. The dispute was settled on 17 February 2012 in the amount of
A$ 2.208 million. The balance of the funds in trust being A$ 1.040 million were returned to the group.
FAIR VALUE AND CREDIT RISK
Due to the short-term nature of these receivables, their carrying value is assumed to approximate their fair value. The
maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security.
17. INVENTORIES
Bullion stock 3 779 3 669
Spares and consumables 12 026 3 440
15 805 7 109
Included in cost of sales is an amount of A$ 2.503 million (2011: A$ nil) representing a write down to net realisable value
of bullion stock during the year in respect of the Cooke Underground and Randfontein Surface Operations.
This arose as a result of the average cost of production at these operations exceeding the average sales price achieved
for bullion stock for the period because most of the gold produced by the Cooke Underground and Rand Surface
Operations was delivered into the unfavourable gold forward sales contracts which were acquired as part of the Rand
Uranium acquisition.
As at 31 December 2012, the group has A$ 3.611 million (2011: A$ nil) of bullion stock on hand which was measured at
its net realisable value.
2012 2011
Note A$ '000 A$ '000
18. HELD-TO-MATURITY INVESTMENTS
Balance at the beginning of the year 1 408 1 518
Acquired during the year 11 374 -
Investment income net of transaction costs 75 49
Contributions 360 134
Effect of translation to presentation currency (90) (293)
2 127 1 408
GUARDRISK POLICY
The group invested in a Guardrisk policy to enable it to furnish a guarantee to the Department of Mineral Resources for
future rehabilitation expenditure at Modder East. Premiums are paid in accordance with the policy. The group earns
investment income on the balance invested and the policy will mature after three years after which the balance on the
account will be refunded to the group. Any claim for rehabilitation will be paid by Guardrisk. Claims in excess of the fund
balance are owed to Guardrisk and carry interest at the prime lending rate. A further premium of A$ 0.114 million is due in
2013 and the policy expires in September 2013.
MOMENTUM
The momentum investment is a savings plan with monthly contributions of A$ 50,000 for a period of 10 years, from
01 January 2012 to 31 December 2021, and automatically continuing thereafter. The contribution growth is 10% per
annum.
IMPAIRMENT AND RISK EXPOSURE
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of the investments. Refer to
note 3 for more information on the group's exposure to credit and market risk and fair value information.
None of the held-to-maturity investments are either past due or impaired. All held-to-maturity investments are
denominated in ZAR.
19. RESTRICTED CASH
Restricted cash include the following:
Guarantees 9 340 12 996
Environmental trust fund 4 062 128
13 402 13 124
The environmental trust fund is a trust under the group's control. Contributions to the trust are invested primarily in
interest-bearing short-term investments. The costs of these investments approximate their fair value. These investments
provide for the estimated cost of rehabilitation during and after the life of the mine for the group's mines. Income earned
on the investments is restricted in use and may only be used to fund the group's approved rehabilitation costs.
The guarantees relate to the performance bank and insurance guarantees of the Department of Mineral Resources for
environmental rehabilitation, as well as performance guarantees to Eskom for energy.
2012 2011
Note A$ '000 A$ '000
20. AVAILABLE-FOR-SALE INVESTMENTS
Acquired during the year 11 28 033 -
Adjustment to fair value, net of transaction costs 3 595 -
Effect of translation to presentation currency (1 362) -
30 266 -
COOK REHABILITATION TRUST INVESTMENTS
The funds held in the Cooke Rehabilitation Trust are treated as restricted as these funds have been placed into a
separate trust in order to meet the closure liability at the end of the life of the mine. The amount put into trust is agreed to
by the Department of Mineral Resources based on a valuation performed by an expert and cannot be accessed until such
time as they are required to rehabilitate the land on which mining has taken place. These funds are invested in various
instruments in order to earn a return which is also placed in trust. No funds can be released from the trust without the
Department of Mineral Resources’s consent and this release has to be in terms of the trust deed.
The investment comprises equity linked deposits with various term ranging from 3 - 5 years with a guaranteed interest of
6.00% - 7.00% per annum. The yield to date ranges from 9.00% - 12.00% per annum.
IMPAIRMENT AND RISK EXPOSURE
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of the investments.
Refer to note 3 for more information on the group's exposure to credit and market risk and fair value information.
21. PROPERTY, PLANT AND EQUIPMENT
2012 2011
ACCUMULATED CARRYING ACCUMULATED CARRYING
COST DEPRECIATION VALUE COST DEPRECIATION VALUE
A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000
Mine development costs
and plant facilities 561 556 (245 563) 315 993 127 319 (19 317) 108 002
Undeveloped properties 328 905 (33 453) 295 452 13 897 (895) 13 002
Other plant and
equipment 97 352 (38 844) 58 508 40 188 (18 261) 21 927
TOTAL 987 813 (317 860) 669 953 181 404 (38 473) 142 931
RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT - 2012
CARRYING
AMOUNT ACQUISITION FOREIGN CARRYING
AT THE THROUGH CURRENCY AMOUNT AT
BEGINNING OF BUSINESS TRANSLATION IMPAIRMENT THE END OF
THE YEAR ADDITIONS COMBINATION DISPOSALS TRANSFERS RESERVE DEPRECIATION LOSS THE YEAR
A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000
Mine development, development costs and
plant facilities 108 002 55 109 223 772 - (16 218) (25 572) (26 400) (2 700) 315 993
Undeveloped properties 13 002 1 289 330 202 - (18 613) (14 499) (15 929) - 295 452
Other plant and equipment 21 927 8 745 13 345 (26) 34 831 6 092 (13 406) - 58 508
142 931 65 143 567 319 (26) - (46 979) (55 735) (2 700) 669 953
RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT - 2011
CARRYING
AMOUNT FOREIGN CARRYING
AT THE CURRENCY RECLASSIFIED AMOUNT AT
BEGINNING OF TRANSLATION TO INTANGIBLE THE END OF
THE YEAR ADDITIONS DISPOSALS RESERVE ASSETS DEPRECIATION THE YEAR
A$ '000 A$ '000 A$ '000 A$ '000 A$' 000 A$ '000 A$ '000
Mine development, development costs and plant facilities 115 057 24 284 - (18 521) - (12 818) 108 002
Undeveloped properties 16 342 1 672 (30) (4 405) - (577) 13 002
Other plant and equipment 28 774 9 008 (161) (7 483) (18) (8 193) 21 927
160 173 34 964 (191) (30 409) (18) (21 588) 142 931
PLEDGED AS SECURITY
Refer to note 28 for information on assets pledged as security on long term borrowings.
Refer to note 36 for contractual and capital commitments.
DEPRECIATION AND AMORTISATION CHARGED TO PROPERTY, PLANT AND EQUIPMENT IS MADE UP AS
FOLLOWS:
2012 2011
A$ '000 A$ '000
Depreciation and amortisation classified as cost of sales (55 829) (20 442)
Depreciation and amortisation classified as exploration and pre-feasibility expense (364) (325)
Depreciation and amortisation classified as general and administrative
expenditure (248) (151)
Effect of translation to presentation currency - 96
(56 441) (20 822)
IMPAIRMENT LOSS
The impairment loss recorded in 2012 relates to assets which were flooded at the Megamine site. The whole amount of
capitalised development cost and related decommission assets was recognised in profit or loss. The remaining Megamine
surface assets were not considered impaired as these assets are being applied in the exploration and development of
other exploration assets in the group.
22. INVESTMENT PROPERTY
RECONCILIATION OF INVESTMENT PROPERTY - 2012
CARRYING
AMOUNT ACQUISITION FOREIGN CARRYING
AT THE THROUGH CURRENCY AMOUNT AT
BEGINNING OF BUSINESS TRANSLATION THE END OF
THE YEAR ADDITIONS COMBINATION RESERVE THE YEAR
A$ '000 A$ '000 A$ '000 A$ '000 A$ '000
Land and buildings at fair value - 458 8 668 (411) 8 715
- 458 8 668 (411) 8 715
DETAILS OF VALUATION
LAND
The investment property represents various properties situated in Johannesburg and Westonaria. These properties are
freehold and are held for capital appreciation.
The investment property valuations are updated annually by a valuator. The latest valuation was performed by
Mr HD Jooste, Group Property and Real Estate Rights Manager of Gold One on 31 December 2012. Mr HD Jooste has
the required experience to conduct the valuation. The investment property was valued using the comparable sales
method.
BUILDINGS
Gold One acquired a residential property in Johannesburg. This property is leased out at market related rates to generate
rental income.
AMOUNTS RECOGNISED IN PROFIT OR LOSS FOR THE YEAR
Rental income from investment property 18 -
Direct operating expenses from rental generating property (14) -
4 -
23. INTANGIBLE ASSETS
2012 2011
ACCUMULATED CARRYING ACCUMULATED CARRYING
COST AMORTISATION VALUE COST AMORTISATION VALUE
A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000
Goodwill 8 568 - 8 568 - - -
IT development and
software 5 005 (4 288) 717 42 (35) 7
TOTAL 13 573 (4 288) 9 285 42 (35) 7
RECONCILIATION OF INTANGIBLE ASSETS - 2012
CARRYING
AMOUNT ACQUISITION FOREIGN
AT THE THROUGH CURRENCY
BEGINNING OF BUSINESS TRANSLATION IMPAIRMENT
THE YEAR ADDITIONS COMBINATION DISPOSALS RESERVE AMORTISATION LOSS TOTAL
A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000
Goodwill - - 9 547 - (979) - - 8 568
IT development and software 7 698 2 395 (3) (38) (706) (1 636) 717
7 698 11 942 (3) (1 017) (706) (1 636) 9 285
RECONCILIATION OF INTANGIBLE ASSETS - 2011
CARRYING
AMOUNT RECLASSIFIED
AT THE FROM PLANT
BEGINNING OF AND
THE YEAR ADDITIONS EQUIPMENT AMORTISATION TOTAL
A$ '000 A$ '000 A$' 000 A$ '000 A$ '000
IT development and software - - 18 (11) 7
IMPAIRMENT TESTING FOR CASH GENERATING UNITS CONTAINING GOODWILL
The only cash generating unit with allocated goodwill is Far East Gold Special Purpose Vehicle Proprietary Limited
("FEG"). FEG is the exploration entity which is exploring and prospecting in the East Rand region. In particular, FEG
acquired the assets of Megamine on 19 March 2012 and the Wit Nigel prospecting rights (PR73) which was acquired from
Goliath Gold on the same date.
At the time of the reverse acquisition (refer to note 11), a valuation of the business was performed and goodwill was
determined to be A$ 9.547 million based on the synergistic benefit of the adjacent prospecting rights to the existing
Megamine exploration properties.
As FEG is currently in the prospecting and exploration phase, a discounted cash flow valuation could not be performed.
As at 31 December 2012, the carrying value of the entire cash generating unit of FEG including goodwill was assessed
against the market value of the Goliath shares in issue. At that date there was adequate headroom over the net asset
values of FEG, including goodwill, in order to conclude that no impairment was required.
Furthermore, as economic indicators such as the Rand gold price have improved, this provided further evidence that
goodwill was not impaired.
2012 2011
A$ '000 A$ '000
24. DEFERRED TAX LIABILITIES
DEFERRED TAX ASSETS
THE BALANCE COMPRISES TEMPORARY DIFFERENCES ATTRIBUTABLE TO:
Bad debt provision 320 -
Employee benefits 2 651 479
Gold hedge obligation 7 658 -
Property, plant and equipment - 6 779
Tax losses 10 346 896
Asset retirement obligation 847 964
Deferred rental provision 36 14
NET DEFERRED TAX ASSETS 21 858 9 132
Set-off of deferred tax liabilities pursuant to set-off provisions (21 858) (5 201)
NET DEFERRED TAX ASSETS - 3 931
Deferred tax assets expected to be recovered within 12 months - 2 953
Deferred tax assets expected to be recovered after 12 months - 978
- 3 931
MOVEMENT IN DEFERRED TAX ASSETS
Asset retirement obligation (117) (147)
Bad debt provision 320 -
Employee benefits 2 172 94
Future rental provision 22 14
Gold hedge obligation 7 658 -
Property, plant and equipment (6 779) (1 502)
Tax losses 9 449 (199)
12 725 (1 740)
DEFERRED TAX LIABILITIES
THE BALANCE COMPRISES TEMPORARY DIFFERENCES ATTRIBUTABLE TO:
Property, plant and equipment 70 450 25 956
Acquisition of subsidiary 3 606 3 836
Asset retirement investment 1 932 -
TOTAL DEFERRED TAX LIABILITIES 75 988 29 792
Set-off of deferred tax liabilities pursuant to set-off provisions (21 858) (5 201)
NET DEFERRED TAX LIABILITIES 54 130 24 591
Deferred tax liabilities expected to be settled within 12 months 5 523 24 591
Deferred tax liabilities expected to be settled after more than 12 months 48 607 -
54 130 24 591
MOVEMENT IN DEFERRED TAX LIABILITIES
Acquisition of subsidiary (230) (850)
Asset retirement investment 1 932 -
Property, plant and equipment 44 494 15 019
46 196 14 169
25. TRADE AND OTHER PAYABLES
Trade payables 33 305 9 950
Other payables 98 12 947
33 403 22 897
FAIR VALUE
These payables are short term by nature and their carrying value is deemed to approximate their fair value.
26. GOLD DERIVATIVE LIABILITIES
At acquisition 11 102 408 -
Delivery of gold to settle the derivative liability (45 853) -
Fair value loss on derivative liability 9 21 406 -
Loss on foreign exchange 1 474 -
Effect of translation to presentation currency (2 601) -
76 834 -
GOLD DERIVATIVE LIABILITIES COMPRISE:
Franco-Nevada gold derivative 53 125 -
Forward sale agreement 23 709 -
76 834 -
Less: Short term portion of derivative (30 399) -
LONG TERM PORTION OF DERIVATIVE 46 435 -
FRANCO-NEVADA GOLD DERIVATIVE
On 05 November 2009, First Uranium signed a derivative agreement with Franco-Nevada (Barbados) Corporation ("FN"),
whereby FN acquired the right to receive seven percent of the life-of mine gold production from the Ezulwini Mine
(the Ezulwini Gold Stream Transaction). Under the terms of the Ezulwini Gold Stream Transaction, FN paid Ezulwini
US$ 50.000 million upfront. In addition, FN will make an ongoing payment equal to the lesser of US$ 400 per ounce (the
Fixed Price) (subject to an annual inflation adjustment of one percent, starting in the fourth year following receipt of the
first payment) and the prevailing spot price at the time of such payment for each ounce of gold delivered under the
contract.
The total remaining gold ounces to be delivered by the Ezulwini Mine under the current Ezulwini life of mine plan to FN
has been accounted for as a financial liability which is fair valued using the Black Scholes pricing model. All cash received
and cost of production relating to the delivered ounces are recognised as part of the derivative expense related to the
Gold Stream Transaction along with the revaluation effects of the financial derivative liability.
Pursuant to the Ezulwini Gold Stream Transaction, Ezulwini granted to FN a special bond over certain of the tailings dams
and a pledge of seven percent of the gold production from the Ezulwini Mine. FN also has the right of first refusal on
future gold sales transactions that might be considered at Ezulwini.
The financial liability is fair valued using the Black Scholes pricing model. The following assumptions were used:
31 DECEMBER 01 AUGUST
2012 2012
Strike price ($/oz) 400 400
Gold price ($/oz) 1 661 1 594
Estimated life of mine production (oz) 3 438 615 3 458 416
3 Month Libor rate 0.306 % 0.442 %
Gold lease rates (12 months) 0.378 % 0.534 %
FORWARD SALE AGREEMENT
The gold derivative liability arose as a result of the mark-to-market value of the gold forward sales contracts that Gold One
acquired as part of the Rand Uranium acquisition. At the date of acquisition, Rand Uranium had a commitment to deliver
154,067 ounces of gold up to June 2013. The mark-to-market value of the liability was measured as A$ 57.822 million at
the date of acquisition. During the year 105,371 ounces of gold were delivered into these contracts by the Cooke
Underground and Randfontein Surface Operations. At 31 December 2012, the remaining commitment was 48 696 ounces
of gold at ZAR 10.054 (A$ 1.197) per ounce to be delivered up to 28 June 2013 with a mark-to-market value of
A$ 23.709 million.
2012 2011
A$ '000 A$ '000
27. ACCRUALS
Employee related payables 11 477 5 488
Employee PAYE payable 2 041 5 918
13 518 11 406
28. BORROWINGS
Secured 97 833 -
Unsecured 120 379 -
218 212 -
Less: Short term portion of borrowings (60 195)
LONG TERM PORTION OF BORROWINGS 158 017
RECONCILIATION
Draw downs 230 285 -
Finance charges on borrowings 12 11 759 -
Acquisition through business combination 11 30 080 -
Repayment (48 928) -
Effect of translation to presentation currency (4 984) -
218 212 -
SECURED
Investec Bank Limited made available to the group facilities two loans totaling A$ 169.000 million to facilitate the
acquisition of Rand Uranium and Ezulwini. Repayments occur quarterly, the first being 02 July 2012 and ending on 31
December 2013 and 30 September 2016 respectively. One third of the loan is repayable by 31 December 2013. The
interest on the loans are paid quarterly and charged on average at 3-month JIBAR plus 3.89% until 50% of the loan has
been repaid after which interest is charged at 3-month JIBAR plus 3.25%.
Investec Bank Limited loans are secured by the assets in New Kleinfontein Gold Mine and over all non-rehabilitation
related cash balances in the group.
The undrawn facility available at 31 December 2012 is A$ 59.749 million (2011: nil).
UNSECURED
Baiyin Precious Metals Limited (“Baiyin”) advanced two unsecured shareholder loans totaling US$ 145.000 million
(A$ 140.650 million) to Gold One to facilitate the acquisition of Rand Uranium and Ezulwini. These loans accrue interest
at 10% and 8.5% p.a. respectively for which the interest is repayable semi annually. The principal repayment is due on
28 September 2014.
The undrawn facility available at 31 December 2012 is A$ 22.172 million (2011: nil).
29. PROVISIONS
ASSET RETIREMENT AND REHABILITATION OBLIGATION
Opening balance 2 835 3 268
Adjustment to decommissioning asset 4 312 27
Acquisition of business 29 785 -
Unwinding of discount on asset retirement obligation 12 2 220 150
Effect of translation to presentation currency (1 536) (610)
Closing balance 37 616 2 835
Rehabilitation costs are expected when exploration, evaluation and development activities give rise to the need for
restoration. The costs include obligations relating to reclamation, waste site closure, plant closure and other costs
associated with the restoration of the site. These estimates of the restoration obligation are based on current technology,
legal requirements and future costs. Any changes in the estimates are adjusted on a prospective basis. In determining the
restoration obligation, the entity has assumed no significant changes will occur in the relevant Australian and South
African legislation in relation to restoration of such mines in the future.
Key assumptions used in estimating the asset retirement and rehabilitation obligations were as follows:
2012 2011
Discount rates - long term government bond rate 6.93% 8.10%
Inflation (percentage per annum) 5.20% 6.00%
Expected closure date of mines 2021 - 2029 2022
2012 2011
A$ '000 A$ '000
30. CONTRIBUTED EQUITY
ISSUED
Ordinary shares (see below) 347 574 346 826
NUMBER OF
SHARES
2012 A$ '000 '000
OPENING BALANCE 346 826 1 415 189
Issue of shares 720 1 259
Transaction costs on issue of shares (1)
Exercise of share options 30 91
Transaction cost on exercise of share options (1)
347 574 1 416 539
NUMBER OF
SHARES
2011 A$ '000 '000
OPENING BALANCE 130 782 806 876
Issue of shares 209 861 546 102
Transaction costs on issue of shares (8 491)
Exercise of share options 14 687 62 211
Transaction costs on exercise of share options (13)
346 826 1 415 189
TERMS AND CONDITIONS OF CONTRIBUTED EQUITY
Ordinary fully paid shares have the right to receive dividends as declared, and in the event of winding up the company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number and amounts paid up on shares
held.
UNLISTED SHARE OPTIONS
At 31 December 2012 there were 41,169,326 (2011: 18,962,853) unlisted options issued by the group, which entitle the
option holder, subject to the terms and conditions of the options, one ordinary fully paid share for each option held.
Refer to note 39 for further detail on unlisted share options.
LISTED SHARE OPTIONS
At 31 December 2012 there were nil (2011: 6,537,635) listed options outstanding for the group, which entitled the option
holder, subject to the terms and conditions of the option, one ordinary fully paid share for each option held. The exercise
price of these options was 50 cent, with no vesting period and expired after five years on 12 October 2012.
CAPITAL MANAGEMENT
The group is not subject to externally imposed capital requirements. When managing capital, management's objectives
are to ensure the entity continues as a going concern and maintain a capital structure that ensure the lowest cost of
capital available to the entity. As the market is constantly changing, management may change the amount of dividends to
be paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
2012 2011
A$ '000 A$ '000
31. RESERVES
RESERVES
Share option reserve 43 518 13 413
Fair value adjustment reserve 2 589 -
Foreign currency translation reserve (90 205) (45 601)
(44 098) (32 188)
MOVEMENTS
SHARE OPTION RESERVES
Opening balance 13 413 9 515
Employee share option plan 1 420 3 898
Black Economic Empowerment transactions 28 685 -
CLOSING BALANCE 43 518 13 413
FOREIGN CURRENCY TRANSLATION RESERVE
Opening balance (45 601) (11 816)
Currency translation differences arising during the year (44 604) (33 785)
CLOSING BALANCE (90 205) (45 601)
FAIR VALUE ADJUSTMENT RESERVE
Opening balance - -
Fair value adjustment on available-for-sale investments 2 589 -
CLOSING BALANCE 2 589 -
NATURE AND PURPOSE OF RESERVE
(a) SHARE OPTION RESERVE
(i) EMPLOYEE SHARE OPTION PLAN
The share option reserve is used to record the value of share based payments provided to employees and consultants, as
part of the remuneration for their services.
The listed share option reserve is used to record the value of options issued to parties through the raising of capital.
Listed share options were exercised during the period.
Refer to note 39 for further information on the number of shares issued and key assumptions.
(ii) BLACK ECONOMIC EMPOWERMENT TRANSACTIONS
During the year, the group granted a number of share options arrangements to Black Economic Empowerment ("BEE")
partners in order to meet the South African Mining charter requirements of 26% black ownership by 2014. These share
option arrangements will settle in the equity interest of the group's mining operations. Accordingly, all the BEE share
options are considered to be equity settled in nature.
MEASUREMENT OF FAIR VALUES
The fair values of the share options granted through the BEE share option arrangements were measured based on the
Monte Carlo valuation model. Expected volatility is estimated by considering historical volatility of similar companies over
the period commensurate with the expected term. The key inputs and assumptions used in the grant date measurement
of the fair values for the BEE share options were as follows:
RAND URANIUM MODDER EAST GOLIATH
Initial number of shares (No) 260 260 26
Initial share price (ZAR '000) 2 000 2 000 10 000
Dividend yield 1.560% 1.056% 0.000%
Expected volatility (weighted average) 50% 40% 40%
Interest accrued on loan to BEE party 7.480% Forecasted Prime rate Jibar + 8.000%
Expected life (weighted average) 5 years 10 years 10 years
(b) FAIR VALUE ADJUSTMENT RESERVE
The fair value adjustment reserve relates to the cumulative fair value changes, net of deferred tax, arising from the Cooke
rehabilitation assets which are classified as available-for-sale financial investments (refer note 20).
(c) FOREIGN CURRENCY TRANSLATION RESERVE
Exchange differences arising on translation of foreign controlled entities are recognised in the consolidated statement of
comprehensive income and accumulated as reserves within equity.
2012 2011
A$ '000 A$ '000
32. NON-CONTROLLING INTEREST
INTEREST IN:
Share capital 7 704 -
Retained earnings (2 542) -
5 162 -
33. DIVIDENDS PAID
During the financial year, A$ nil has been paid or declared (2011: A$ nil).
34. RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH (OUTFLOW)/INFLOW FROM
OPERATING ACTIVITIES
Profit for the year 30 152 49 893
ADJUSTMENTS FOR:
Black Economic Empowerment transactions 28 686 -
Delivery of gold to settle the derivative liability (45 853) -
Depreciation and amortisation 56 441 21 599
Fair value adjustments 21 406 (7 049)
Foreign exchange loss on gold derivative 1 474 -
Gain on bargain purchase (107 206) -
Gain on foreign exchange transactions (5 362) (34)
Held-to-maturity investment income (75) -
Impairment of assets 4 459 134
Increase in deferred tax liabilities 16 130 18 569
Increase in income tax (3 819) -
Loss on sale of assets 139 79
Notional interest on provisions 2 220 177
Share based payment expense 1 420 3 898
CHANGES IN WORKING CAPITAL:
Acquisition through business combination (19 407) -
Increase in inventories (8 696) (5 775)
Increase in trade and other receivables (5 681) (1 361)
Increase in trade and other payables 12 618 25 100
(20 954) 105 230
35. CONVERTIBLE BONDS
Financial liabilities consist of convertible bonds classified as financial liabilities at fair value through profit or loss.
RECONCILIATION OF CONVERTIBLE BONDS
Opening balance - 66 593
Effect of translation to presentation currency - 159
Fair value gain (US$ denominated bonds) - (7 049)
Conversion of bond options - (59 703)
- -
In 2007, 600 8.5% convertible bonds were issued by Gold One Africa at a nominal value of R1 million per bond. As a
result of the reverse acquisition arrangement in 2009 whereby Gold One Africa (formerly Aflease Gold Limited) was
acquired by Gold One, the original bonds issued were replaced on 25 May 2009 with 600 8.5% convertible bonds at a
total nominal value of US$ 71.598 million. The bonds were to mature in December 2012, 5 years from the original issue
date at the redemption value of 109.6% of the nominal value unless converted into the group's ordinary shares at the
holder's option, at any time during the conversion period. All or some of the bonds could have been converted at fixed rate
of 314,026 shares per bond.
The bondholders had the option to put the bonds to the group at the accreted principal plus accrued interest on
12 December 2010, being the third anniversary of the closing date. The bondholders elected not to exercise their put
option. During 2011 all of the remaining bonds were converted which resulted in the exercise of 170,758,534 shares.
36. COMMITMENTS
GUARANTEES, CAPITAL AND OPERATING LEASE COMMITMENTS
Guarantees 10 194 12 996
Capital commitments - Contracted 9 906 4 981
Operating lease commitments 1 384 1 728
21 484 19 705
GUARANTEES
Department of Mineral Resources 9 123 12 155
Eskom 936 783
Office rental 135 58
10 194 12 996
The guarantees relate to performance bank and insurance guarantees provided to the Department of Mineral Resources
for environmental rehabilitation, as well as performance guarantees to Eskom for energy.
CAPITAL COMMITMENTS
The capital commitments relate to contracted capital expenditure for the 2013 financial reporting period. Capital
commitments will be funded out of the group's own cash flows and debt financing.
OPERATING LEASES
The future aggregate minimum lease payment under non-cancellable operating
leases are:
Within one year 277 277
In second to fifth year inclusive 332 568
Later than five years 775 883
1 384 1 728
The operating lease commitments relate to the leases for the farm Cloverfield, 55 Empire Road, Constantia Park offices
and Australian offices. No contingent rent is payable.
37. RELATED PARTIES
RELATIONSHIPS
Directors Refer to the Directors' Report
Goliath Gold Mining Limited directors Keith Rayner
Jerry Vilakazi
Piet Nel
COUNTRY OF
SUBSIDIARIES INCORPORATION EQUITY INTEREST
2012 2011
% %
Gold One Africa Limited South Africa 100 100
Twin Hills Operations Pty Limited Australia 100 100
Australian Silicon Operations Pty Limited Australia 100 100
Gold One Mozambique Limitada Mozambique 100 100
Etendeka Prospecting and Mining Company Proprietary Limited Namibia 100 100
New Kleinfontein Mining Company Limited South Africa 100 100
New Kleinfontein Goldmine Proprietary Limited South Africa 100 100
New Kleinfontein Gold Claims Proprietary Limited South Africa 100 100
New Kleinfontein Rehabilitation Trust South Africa 100 100
Gold One International Limited Share Incentive Scheme South Africa 100 100
Cooke Rehabilitation Trust South Africa 100 -
Gold One Asia Limited South Africa 100 -
Gold One Asia Management Limited British Virgin Isles 100 -
Far East Gold SPV Proprietary Limited British Virgin Isles 100 -
Newshelf 1186 Proprietary Limited South Africa 100 -
Newshelf 1201 Proprietary Limited South Africa 100 -
Consolidated Resources and Exploration Limited South Africa 100 -
Guild Hall No. 22 Proprietary Limited South Africa 100 -
IEN Investments Proprietary Limited South Africa 100 -
Brakfontein Diamante Proprietary Limited South Africa 100 -
Witnigel Investments Proprietary Limited South Africa 100 -
Newlands Minerals Proprietary Limited South Africa 100 -
Goliath Gold Mining Limited South Africa 72 -
Goliath Gold Share Incentive Scheme South Africa 100 -
Newshelf 1114 Proprietary Limited South Africa 100 -
Rand Uranium Proprietary Limited South Africa 100 -
Newshelf 1198 Proprietary Limited South Africa 100 -
Gold One Europe Limited Cyprus 100 -
Ezulwini Mining Company Proprietary Limited South Africa 100 -
ULTIMATE CONTROLLING INTEREST
The ultimate controlling interest is held by BCX Gold Investment Holdings Limited ("BCX"), a company incorporated in the
British Virgin Islands) which at 31 December 2012 owned 89.17% (2011: 89.17%) of the issued ordinary shares of Gold
One. The ultimate holders of BCX are as follows:
INCORPORATED IN
Baiyin Non-Ferrous Group Company Limited China
Baiyin Precious Metal Investment Limited British Virgin Islands
China-Africa Development Fund China
China-Africa Gold Investment Company Limited China
China Development Bank Corporation China
Long March Capital management Limited China
CITIC Kingview Capital Management Company Limited China
CX Elements Investments Limited British Virgin Islands
CX Gold Investment Holdings Limited British Virgin Islands
ADVISORY SERVICES
Advisory services of A$ 712,139 (2011: A$ 3,812,396) were provided by Long March Capital Management Limited. Rates
were based on arm's length transactions and no amount was outstanding at 31 December 2012.
KEY MANAGEMENT PERSONNEL
For details on remuneration and other benefits paid to key management personnel, please refer to note 38.
MANAGEMENT SERVICES
Management services amounting to A$ nil (2011: A$ 1.000 million) were charged to general expense and administrative
costs of A$ nil (2011: A$ 965.889 million) were paid on behalf of Goliath Mining Limited. Rates were based on arm's
length transactions and an amount of A$ nil (2011: A$ 1.966 million) was outstanding at 31 December 2012. No interest
was charged on the loan balance.
PRINTING AND POSTAGE
Printing and postage services amounting to A$ nil (2011: A$ 45,459) were provided to Baiyin Precious Metals Investment
Ltd. Rates were based on arm's length transactions and no amount was outstanding at 31 December 2012.
SHAREHOLDER'S LOAN
For details on the shareholder's loan, please refer to note 28.
TRAVELLING
Travel services of A$ 64,370 (2011: A$ 6,617) were provided by Long March Capital Management Limited. Rates were
based on arm's length transactions and no amount was outstanding at 31 December 2012.
Travel services of A$ 7,766 (2011: A$ nil) were provided to Baiyian Precious Metals Investments Limited. Rates were
based on arm's length transactions and no amount was outstanding at 31 December 2012.
Travel costs of A$ nil (2011: A$ 29,611) were reimbursed by Uranium One Incorporated in 2011, of which M K Wheatley
was a director. Rates were based on arm's length transactions and no amount was outstanding at 31 December 2012.
Travel costs of A$ nil (2011: A$ 2,796) were reimbursed to Norton Gold Fields, of which M K Wheatley was a director.
Rates were based on arm's length transactions and no amount was outstanding at 31 December 2012.
Travel for the board on company business is co-ordinated with other directorships, where schedules allow. This allows the
expenses to be shared by those companies and results in cost savings for Gold One.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated
38. KEY MANAGEMENT PERSONNEL DISCLOSURE
EXECUTIVE DIRECTORS
SHARE
BASED
SHORT-TERM PERFOR- PAYMENTS
SALARY AND/ RETENTION MANCE EQUITY
OR FEES BONUS BONUS OPTIONS* TOTAL
2012 A$ A$ A$ A$ A$
N J Froneman - Chief Executive Officer 677 224 519 594 - - 1 196 818
C D Chadwick - Chief Financial Officer 275 876 130 329 - 239 406 444
953 100 649 923 - 239 1 603 262
SHARE
BASED
SHORT-TERM PERFOR- PAYMENTS
SALARY AND/ RETENTION MANCE EQUITY
OR FEES BONUS BONUS OPTIONS* TOTAL
2011 A$ A$ A$ A$ A$
N J Froneman - Chief Executive Officer 622 240 513 637 622 819 467 867 2 226 563
C D Chadwick - Chief Financial Officer 251 833 137 883 227 536 169 432 786 684
874 073 651 520 850 355 637 299 3 013 247
NON-EXECUTIVE
POST SHARE
RETENTION/ EMPLOY- BASED
SHORT-TERM PERFOR- MENT PAYMENTS
SALARY AND/ MANCE SUPER- EQUITY
OR FEES BONUS ANNUATION OPTIONS* TOTAL
2012 A$ A$ A$ A$ A$
M K Wheatley (resigned 30 December 2012) 221 193 - 40 423 239 261 855
B E Davison (resigned 30 December 2012) 77 331 - - - 77 331
K V Dicks (resigned 29 February 2012) 13 300 - - - 13 300
W B Harris (resigned 29 February 2012) 13 300 - - - 13 300
S Swana (resigned 29 February 2012) 13 300 - - - 13 300
K J Winters (resigned 30 December 2012) 97 069 - - - 97 069
Y Sun (appointed 1 March 2012) 69 331 - - - 69 331
M H Solomon (appointed 01 March 2012) 86 500 - - - 86 500
A H Liu (appointed 01 March 2012) 61 500 - - - 61 500
R T L Chan (appointed 01 March 2012) 69 331 - - - 69 331
M Liao (appointed 01 March 2012, resigned -
30 December 2012) 44 331 - - 44 331
C Zhou (appointed 01 March 2012) 49 331 - - - 49 331
815 817 - 40 423 239 856 479
POST SHARE
RETENTION/ EMPLOY- BASED
SHORT-TERM PERFOR- MENT PAYMENTS
SALARY AND/ MANCE SUPER- EQUITY
OR FEES BONUS ANNUATION OPTIONS* TOTAL
2011 A$ A$ A$ A$ A$
M K Wheatley 220 474 - 11 593 169 127 401 194
B E Davison 64 800 - - 168 953 233 753
K V Dicks 64 800 - - 168 722 233 522
W B Harris 64 800 - - 168 953 233 753
S Swana 49 800 - - 168 722 218 522
K J Winters 86 400 - - 169 214 255 614
551 074 - 11 593 1 013 691 1 576 358
No termination benefits were paid to executives or key management personnel during the year ended 31 December 2012.
Other key management personnel
SHARE
BASED
SHORT-TERM PERFOR- PAYMENTS
SALARY AND/ RETENTION MANCE EQUITY
OR FEES BONUS BONUS OPTIONS* TOTAL
2012 A$ A$ A$ A$ A$
I J Marais 297 968 143 191 - - 441 159
S J M Caddy (resigned 05 October 2012) 237 423 105 632 - - 343 055
R A Stewart 255 913 119 326 - 239 375 478
R H A Plaistowe 235 410 - - - 235 410
P B Kruger - Company Secretary 234 874 119 326 - 239 354 439
W D R Robinson 220 345 - - - 220 345
1 481 933 487 475 - 478 1 969 886
SHARE
BASED
SHORT-TERM PERFOR- PAYMENTS
SALARY AND/ RETENTION MANCE EQUITY
OR FEES BONUS BONUS OPTIONS* TOTAL
2011 A$ A$ A$ A$ A$
I J Marais 289 699 162 896 167 099 139 608 759 302
S J M Caddy 269 654 162 896 206 552 93 803 732 905
R A Stewart 209 230 135 746 158 781 243 862 747 619
R H A Plaistowe 78 104 - - - 78 104
P B Kruger - Company Secretary 238 116 135 746 163 737 46 590 584 189
1 084 803 597 284 696 169 523 863 2 902 119
TOTAL DIRECTORS' AND EXECUTIVE REMUNERATION
POST SHARE
EMPLOY- BASED
SHORT-TERM PERFOR- MENT PAYMENTS
SALARY AND/ RETENTION MANCE SUPER- EQUITY
OR FEES BONUS BONUS ANNUATION OPTIONS* TOTAL
A$ A$ A$ A$ A$ A$
2012 3 250 850 1 137 398 - 40 423 956 4 429 627
2011 2 509 950 1 248 804 1 546 524 11 593 2 174 853 7 491 724
* Share based payments equity options issued during the year relate to the Goliath share option scheme. No other share
options were issued during the year to key management personnel or directors.
NUMBER OF SHARES
The number of shares in the company held during the financial year by each director of Gold One and other key
management personnel of the group, including their personally related parties, are set out below. There were no shares
granted during the reporting period as compensation.
SHARES
ACQUIRED ON
OPENING ON OPEN EXERCISE RESIGNED/ CLOSING
2012 BALANCE MARKET OF OPTIONS RETIRED BALANCE
EXECUTIVE DIRECTORS
N J Froneman 170 000 - - (170 000) -
C D Chadwick - - - - -
NON-EXECUTIVE DIRECTORS
M K Wheatley 14 830 87 619 - (102 449) -
B E Davison 2 250 000 - - (2 250 000) -
K V Dicks 175 000 - - (175 000) -
S Swana 50 000 - - (50 000) -
K J Winters 250 000 - - (250 000) -
OTHER KEY MANAGEMENT
PERSONNEL
I J Marais 20 000 - - - 20 000
S J M Caddy - - - - -
R A Stewart - - - - -
P B Kruger 19 500 60 500 - - 80 000
SHARES
ACQUIRED ON SHARE
OPENING ON OPEN EXERCISE OPTIONS CLOSING
2011 BALANCE MARKET OF OPTIONS DISPOSED BALANCE
EXECUTIVE DIRECTORS
N J Froneman 170 000 - 5 938 871 (5 938 871) 170 000
C D Chadwick - - 2 770 323 (2 770 323) -
NON-EXECUTIVE DIRECTORS
M K Wheatley 512 500 14 830 3 300 000 (3 812 500) 14 830
B E Davison 500 000 - 1 950 000 (200 000) 2 250 000
K V Dicks 175 000 - 2 690 171 (2 690 171) 175 000
W B Harris 200 000 - 2 250 000 (2 450 000) -
S Swana 50 000 - 2 690 171 (2 690 171) 50 000
K J Winters 258 252 68 750 2 600 000 (2 677 002) 250 000
OTHER KEY MANAGEMENT
PERSONNEL
I J Marais 20 000 - 3 227 283 (3 227 283) 20 000
S J M Caddy 30 000 - 1 033 500 (1 063 500) -
R A Stewart - - 1 419 111 (1 419 111) -
P B Kruger 19 500 - 2 147 988 (2 147 988) 19 500
NUMBER OF OPTIONS
The number of options over ordinary shares in the company held during the financial year by each director of Gold One
and other key management personnel of the group, including their personally related parties, are set below.
On 3 August 2011, BCX, representing a consortium of Chinese investors, lodged a bidder's statement in respect of a
takeover proposal to obtain a majority ownership holding in Gold One. This had the effect of causing all unvested options
to vest and become exercisable immediately at that date.
VESTED AND
EXERCISABLE AT
31 DECEMBER
OPENING RESIGNED/ CLOSING
2012 BALANCE EXERCISED RETIRED BALANCE 2012 2011
EXECUTIVE DIRECTORS
N J Froneman 5 938 872 - (5 938 872) - - 5 938 872
C D Chadwick 2 770 322 - - 2 770 322 2 770 322 2 770 322
NON-EXECUTIVE
DIRECTORS
M K Wheatley 756 000 - (756 000) - - 756 000
K J Winters 398 101 - (398 101) - - 398 101
OTHER KEY
MANAGEMENT
PERSONNEL
I J Marais 3 227 283 (1 067 000) - 2 160 283 2 160 283 3 227 283
S J M Caddy 1 033 500 - (1 033 500) - - 1 033 500
R A Stewart 1 419 112 - - 1 419 112 1 419 112 1 419 112
P B Kruger 2 147 989 - - 2 147 989 2 147 989 2 147 989
VESTED AND
EXERCISABLE AT
31 DECEMBER
OPENING EXERCISED/ CLOSING
2011 BALANCE EXPIRED BALANCE 2011 2010
EXECUTIVE DIRECTORS
N J Froneman 11 877 743 (5 938 871) 5 938 872 5 938 872 4 524 803
C D Chadwick 5 540 645 (2 770 323) 2 770 322 2 770 322 2 248 109
NON-EXECUTIVE DIRECTORS
M K Wheatley 4 181 000 (3 425 000) 756 000 756 000 2 181 000
B E Davison 1 950 000 (1 950 000) - - -
K V Dicks 2 690 171 (2 690 171) - - 806 836
W B Harris 2 250 000 (2 250 000) - - 300 000
S Swana 2 690 171 (2 690 171) - - 806 836
K J Winters 2 998 101 (2 600 000) 398 101 398 101 1 048 101
OTHER KEY MANAGEMENT
PERSONNEL
I J Marais 6 454 566 (3 227 283) 3 227 283 3 227 283 3 085 941
S J M Caddy 2 067 000 (1 033 500) 1 033 500 1 033 500 711 334
R A Stewart 2 838 223 (1 419 111) 1 419 112 1 419 112 376 289
P B Kruger 4 295 977 (2 147 988) 2 147 989 2 147 989 1 817 466
All options have vested at 31 December 2012. The elements of emoluments have been determined based on a cost to
the company. Key management personnel are those directly accountable and responsible for the operational
management and strategic direction of the company. Emoluments of key management personnel (other than options and
retention bonuses) are related to the performance of the company.
39. SHARE BASED PAYMENTS
Share options on issue to key management personnel and employees of the group at 31 December 2012:
OPENING REPLACED/ CLOSING
BALANCE GRANTED EXPIRED/ BALANCE
GRANT EXPIRY EXERCISE (SHARE DURING THE FORFEITED/ (SHARE
DATE DATE PRICE OPTIONS) YEAR EXERCISED MODIFIED OPTIONS)
12/11/2007 12/11/2012 R3.13 1 067 000 - (1 067 000) - -
12/03/2008 12/03/2013 A$1.00 1 375 000 - - - 1 375 000
26/03/2008 26/03/2013 A$0.40 125 000 - - - 125 000
12/06/2008 12/06/2013 R2.01 970 322 - - - 970 322
24/06/2008 24/06/2013 R2.04 2 592 274 - - - 2 592 274
11/07/2008 11/07/2013 A$0.40 5 000 - - - 5 000
01/08/2008 01/08/2013 R2.25 59 600 - - - 59 600
11/12/2008 11/12/2013 R1.35 194 888 - (2 899) - 191 989
21/01/2009 21/01/2014 A$0.22 330 000 - - - 330 000
24/02/2009 24/02/2014 R1.47 20 000 - - - 20 000
06/10/2009 06/10/2014 R1.93 1 011 500 - - - 1 011 500
21/12/2009 21/12/2014 R2.12 458 642 - (47 101) - 411 541
11/01/2010 11/01/2015 R2.16 30 000 - - - 30 000
05/03/2010 05/03/2015 R1.96 246 246 - - - 246 246
20/05/2010 20/05/2015 R1.79 1 484 881 - - - 1 484 881
20/05/2010 20/05/2015 A$0.27 6 800 000 - - - 6 800 000
12/07/2010 12/07/2015 R1.77 29 000 - (29 000) - -
30/09/2010 30/09/2015 R1.68 163 500 - - - 163 500
25/11/2010 25/11/2015 R2.35 2 000 000 - - - 2 000 000
22/02/2012 22/02/2017 A$0.47 - 430 853 - - 430 853
22/02/2012 22/02/2017 R3.94 - 13 742 896 - (839 974) 12 902 922
29/05/2012 29/05/2012 R3.69 - 9 419 660 - (700 962) 8 718 698
06/09/2012 06/09/2017 R3.71 - 1 300 000 - - 1 300 000
18 962 853 24 893 409 (1 146 000) (1 540 936) 41 169 326
Share options have been granted as an incentive component in the remuneration arrangements for senior executives and
managers. The contractual life of each option granted is 3 to 5 years and the market price of the options is set at the
market price of the shares at the grant date. There are no cash settlement alternatives.
No option holder has any right under the options to participate in any other share issue of the company unless the option
holder exercises that option and becomes the holder of Gold One shares prior to the record date for the issue of the
shares. Share options held under the Aflease Group share option schemes were cancelled and re-issued under
Replacement Option Terms. Share options held under the BMA Gold share option scheme were unaffected. New share
options are issued under the Gold One International Limited Share Incentive Scheme approved by shareholders on
26 August 2009.
FAIR VALUE OF OPTIONS GRANTED
The assessed fair value at grant date of options granted during the year ended 31 December 2012 was A$ 0.205 cents
per option (2011: nil). The fair value at grant date is independently determined using a Binomial option pricing model that
takes into account the exercise price, the term of the option, the impact of dilution, 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.
The expected volatility is based on an annualised standard deviation of daily return over the last 90 consecutive days
("90-day volatility"). The volatilities used used were estimated using share price data that was independently sourced.
The model inputs for the South African options granted during the year to 31 December included:
JSE ASX
Share price at grant date Quoted market price Quoted market price
Expected forfeiture and early exercise 0% 0%
Expected volatility Between 29.46% and 50.07% 67%
Expected dividends nil nil
Risk-free interest rate Zero coupon swap curve as at the Zero coupon swap curve as at the
date of issue date of issue
GOLIATH GOLD MINING INCENTIVE SCHEME
OPENING REPLACED/ CLOSING
BALANCE GRANTED EXPIRED/ BALANCE
GRANT EXPIRY EXERCISE (SHARE DURING THE FORFEITED/ (SHARE
DATE DATE PRICE OPTIONS) YEAR EXERCISED MODIFIED OPTIONS)
13/12/2012 13/13/2017 R3.41 - 7 150 000 - - 7 150 000
- 7 150 000 - - 7 150 000
FAIR VALUE OF OPTIONS GRANTED
The assessed fair value at grant date of options granted during the year ended 31 December 2012 was ZAR 0.246 per
option (2011: nil). The fair value at grant date is independently determined using a Binomial option pricing model that
takes into account the exercise price, the term of the option, the impact of dilution, 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 terms of
the option.
The expected volatility is based on an annualised standard deviation of daily return over the last 90 consecutive days
("90-day volatility"). The volatilities used were estimated using share price data that was independently sourced.
The model inputs for the options granted during the year to 31 December included:
JSE
Share price at grant date Quoted market price
Expected forfeiture and early exercise 0%
Expected volatility 98.08%
Expected dividends nil
Risk-free interest rate Zero coupon swap curve as at the
date of issue
40. EVENTS AFTER THE REPORTING PERIOD
The directors are not aware of any matter or circumstance arising since the end of the financial year.
41. PARENT ENTITY FINANCIAL INFORMATION
The individual consolidated financial statements for the parent entity show the following aggregate amounts:
2012 2011
STATEMENT OF FINANCIAL POSITION A$'000 A$'000
Current assets 447 986 295 379
Total assets 823 845 603 386
Current liabilities 233 873 64 161
Total liabilities 351 477 64 161
SHAREHOLDERS' EQUITY
Issued capital 606 283 605 536
RESERVES
Share based payment reserve 27 924 28 235
Translation reserve (29 939) 12 047
Accumulated loss (131 900) (106 593)
NET ASSETS 472 368 539 225
(LOSS)/PROFIT FOR THE YEAR (25 307) 25 068
TOTAL COMPREHENSIVE (LOSS)/PROFIT FOR THE YEAR (25 307) 25 068
GUARANTEES ENTERED INTO BY THE PARENT ENTITY
No guarantees were entered into by the parent entity.
CONTINGENT LIABILITIES OF THE PARENT ENTITY
There were no contingent liabilities for the parent entity for the year under review.
CONTRACTUAL COMMITMENTS OF THE ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT
No contractual commitments were entered into by the parent entity.
DIRECTORS' OPINION
In the opinion of the directors of Gold One International Limited:
(a) The financial statements and notes, set out on pages 44 to 105, of the consolidated entity, are in accordance with the
Corporations Act 2001 (Cth), including:
(i) Complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements
(ii) Giving a true and fair view of the consolidated entity’s financial position as at 31 December 2012 and of its performance
for the financial year ended on that date
(b) There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable
(c) At the date of this declaration there are reasonable grounds to believe that the members of the extended closed group,
identified in note 37, will be able to meet any obligations or liabilities to which they are, or may become, committed to.
Note 1 confirms that the financial statements also comply with International Financial Reporting Standards, as issued by the
International Accounting Standards Board.
The directors have been given the declarations by the CFO and Acting CEO, required by section 295A of the Corporations Act
2001 (Cth).
This declaration is made in respect of Gold One International Limited and the entities it controlled during the year and is made
in accordance with a resolution of the directors.
On behalf of the board
Christopher Chadwick (CFO and acting CEO)
27 February 2013
Johannesburg, South Africa
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable at 31 January 2013.
A. DISTRIBUTION OF EQUITY SECURITIES
SHARES
1 - 1000 2 261
1001 - 5000 1 493
5001 - 10000 502
10001 - 100000 754
100 000 and over 106
5 116
B. EQUITY SECURITY HOLDERS
The names of the 20 largest holders of quoted equity securities are listed below:
NAME NUMBER OF SHARES PERCENtAGE OF ISSuED ShARES
BCX Gold Investment Holdings 1 261 861 238 89.10%
National Nominees Limited 42 314 649 2.99%
HSBC Custody Nominees 18 411 387 1.30%
JP Morgan Nominees Australia 6 195 831 0.44%
Citicorp Nominees Pty Limited 5 890 775 0.42%
BNP Paribas Noms Pty Ltd 3 877 000 0.27%
ABN Amro Clearing Sydney 3 278 600 0.23%
SBG Securities (Pty) Ltd 3 190 317 0.23%
Pershing Australia Nominees 2 367 000 0.17%
Titan Share Dealers (Pty) Ltd 2 335 800 0.16%
Mr Barry Erskine Davison 2 250 000 0.16%
Mrs Linda Gregory 1 800 000 0.13%
Mnr Ferdinand Hugo Van Zyl 1 708 000 0.12%
Mr & Mrs Dianne Fay & Clemens Mary 1 551 000 0.11%
SEB Swedish Clients 1 485 076 0.10%
Mr Nicholas Frederick Tennant 1 134 375 0.08%
Mr Johan Wilhelm Bruwer 1 102 000 0.08%
Evalon Investments Pty Ltd 1 100 000 0.08%
PSL Client Safe Custody Asset 1 042 996 0.07%
Bernville (Pty) Limited 1 000 000 0.07%
1 363 896 044 96.31%
UNQUOTED EQUITY SECURITIES
NUMBER ON ISSUE NUMBER OF HOLDERS
Options issued under the employee plan 41,169,326* 52
* Number of unissued ordinary shares under the options
C. SUBSTANTIAL HOLDERS
Substantial holders in the company are set out below.
NAME NUMBER OF SHARES PERCENTAGE OF ISSUED SHARES
BCX Gold Investment Holdings 1 261 861 238 89.10%
D. VOTING RIGHTS
The voting rights attaching to each class of equity securities are set out below.
(a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll shall have
one vote.
(b) Options
No voting rights.
COMPETENT PERSONS
The information in this release that relates to exploration results, mineral resources or mineral (ore) reserves is based
on information compiled by the following Competent Persons for the purposes of both the 2004 Edition of the Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”) and the 2007 Edition of
the South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves (“SAMREC Code”).
The overall Competent Person for the Gold One group is Dr Richard Stewart, who has a doctorate in geology and
who is a professional natural scientist registered with the South African Council for Natural Scientific Professions
(“SACNASP”), membership number 400051/04. Dr Stewart is also a fellow of the Geological Society of South Africa
(“GSSA”) and is Executive Vice President: Technical Services for Gold One, with which he is a full-time employee, and has
13 years’ experience relevant to the style of mineralisation and type of deposits under consideration, and to the activity
which he is undertaking, to qualify as a Competent Person for the purposes of both the JORC Code and the SAMREC Code.
The Competent Person for the Ventersburg resource is Mr Quartus Meyer, who has a master’s degree in science
(geology) and who is a professional natural scientist registered with SACNASP, membership number 400063/88. Mr Meyer
is Vice President: Exploration for Gold One, with which he is a full-time employee, and has 26 years’ experience relevant
to the style of mineralisation and type of deposit under consideration, and to the activity which he is undertaking, to
qualify as a Competent Person for the purposes of both the JORC Code and the SAMREC Code.
The Competent Person for the Modder East Operations is Mr Evan Cook, who has a bachelor’s degree in technology
(geology) and who is a professional natural scientist registered with SACNASP, membership number 400162/07. Mr Cook is
also a member of the GSSA and is Mineral Resources Manager: South African Operations for Gold One, with which he is a
full-time employee, and has 14 years’ experience relevant to the style of mineralisation and type of deposit under
consideration, and to the activity which he is undertaking, to qualify as a Competent Person for the purposes of both the
JORC Code and the SAMREC Code.
Dr Stewart and Messrs Meyer and Cook consent to the inclusion in this release of the matters based on information
compiled by themselves, Gold One employees and the companies’ consultants in the form and context in which
they appear for the purposes of both the JORC Code and the SAMREC Code.
Further information on Gold One’s resource statement is available in the pre-listing statement of Gold One
International Limited issued on 19 December 2008, and in the resource statements released by Gold One on the ASX
Market Announcements Platform and the Stock Exchange News Service (SENS) on 7 December 2010, (Ventersburg), 15
December 2010, (Modder East), in the 2010 Annual Report released on 28 February 2011 and in the December Quarterly
Report released on 31 January 2012.
SAMREC AND JORC TERMINOLOGY
In addition, this release uses the terms ‘indicated resources’ and ‘inferred resources’ as defined in accordance with the
SAMREC Code, prepared by the South African Mineral Resource Committee (SAMREC), under the auspices of the
South African Institute of Mining and Metallurgy (SAIMM), effective March 2000 or as amended from time to time and
where indicated in accordance with the Canadian National Instrument 43-101 – Standards for Disclosure for Mineral
Projects. The terms ‘indicated resources’ and ‘inferred resources’ are also defined in the 2004 Edition of the JORC
Code, prepared by the Joint Ore Reserves Committee (JORC) of the Australasian Institute of Mining and Metallurgy
(AusIMM), the Australian Institute of Geoscientists (AIG) and the Minerals Council of Australia (MCA). [The use of these
terms in this release is consistent with the definitions of both the SAMREC Code and the JORC Code.]
A mineral reserve (or ‘ore reserve’ in the JORC Code) is the economically mineable part of a measured or indicated
resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on
mining, processing, metallurgical, economic and other relevant factors that demonstrate at the time of reporting
that economic extraction can be justified. A mineral reserve includes diluting materials and allows for losses that may
occur when the material is mined. A proven mineral reserve (or ‘proved ore reserve’ in the JORC Code) is the economically
mineable part of a measured resource for which quantity, grade or quality, densities, shape and physical characteristics are so
well established that they can be estimated with confidence sufficient to allow the appropriate application of technical
and economic parameters to support production planning and evaluation of the economic viability of the deposit. A probable
mineral reserve (or ‘probable ore reserve’ in the JORC Code) is the economically mineable part of an indicated mineral
resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of
confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning
and evaluation of the economic viability of the deposit.
A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilised organic material in or on the earth’s
crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction.
The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or
interpreted from specific geological evidence and knowledge. A measured mineral resource is that part of a mineral resource
for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of
confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning
and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drillholes that are spaced closely enough to confirm both geological and grade continuity. An
indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and
physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of
technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough for geological
and grade continuity to be reasonably assumed. An inferred mineral resource is that part of a mineral resource for which
quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably
assumed, but not verified, geological and grade continuity. The estimate is based on limited exploration and sampling
gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes.
Mineral resources which are not mineral reserves do not have demonstrated economic viability. Investors are cautioned
not to assume that all or any part of the mineral deposits in the measured and indicated resource categories will ever
be converted into reserves. In addition, inferred resources have a great amount of uncertainty as to their existence
and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will be
ever be upgraded to a higher category. Under South African and Australian rules, estimates of inferred mineral resources
may not form the basis of feasibility or pre-feasibility studies or economic studies except under conditions noted in the
SAMREC Code and the JORC Code, respectively.
Investors are cautioned not to assume that all or any part of an inferred resource exists or is economically or legally
mineable. Exploration data is acquired by Gold One and the companies’ consultants under strict quality assurance and
quality control protocols.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information
contained herein.
Date: 28/02/2013 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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