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Summarised provisional audited results for the year ended 31 December 2012
Witwatersrand Consolidated Gold Resources Limited
(Wits Gold or the Company)
(Registration Number 2002/031365/06)
JSE Share Code: WGR
ISIN: ZAE000079703
TSX Share Code: WGR
CUSIP Number: S98297104
Summarised provisional audited results for the year ended 31 December 2012
All figures quoted in South African Rand unless otherwise stated.
Bank of Canada noon rate at 19 March 2012: R9.03 = CAD$1, 31 December 2012:
R8.53 = CAD$1)
Mr DM Urquhart (CA (SA)), Financial Director, was responsible for
supervising the preparation of the financial statements and preparing these
financial statements.
In the previous financial period, the Company changed its financial year end
to 31 December and therefore the comparative figures relate to the ten
months ended 31 December 2011.
Statement of financial position as at 31 December
2012 2011
R R
Assets
Non-current assets 516 882 849 445 629 036
Property and equipment 5 143 554 4 856 506
Intangible exploration and
evaluation assets 511 739 295 440 772 530
Current assets 24 433 149 112 900 999
Other receivables 9 376 865 1 311 247
Cash and cash equivalents 15 056 284 111 589 752
Total assets 541 315 998 558 530 035
Equity and liabilities
Capital and reserves 534 834 182 551 981 469
Stated Capital/Ordinary
share capital 573 539 795 344 903
Share premium - 573 194 892
Equity-settled share-based
payment reserve 19 157 955 18 033 076
Revaluation reserve 1 648 157 1 329 449
Accumulated loss (59 511 725) (40 920 851)
Current liabilities 6 481 816 6 548 566
Trade and other payables 6 481 816 6 448 566
Provisions - 100 000
Total equity and liabilities 541 315 998 558 530 035
Statement of comprehensive income for the period ended 31 December
Year Ten months
ended ended
December December
2012 2011
R R
Revenue - -
Other income 5 400 16 813
Administrative expenses (23 555 605) (30 765 683)
Loss from operating activities (23 550 205) (30 748 870)
Finance income interest received 4 907 447 6 103 507
Loss before income tax (18 642 758) (24 645 363)
Income tax expense 51 884 -
Loss from operations attributable
to owners of the Company (18 590 874) (24 645 363)
Other comprehensive income net
of income tax 318 708 -
Increase in revaluation of
land and building 370 592 -
Deferred tax (51 884) -
Total comprehensive income
attributable to owners of
the Company (18 272 166) (24 645 363)
Loss per share
Basic and diluted loss
per share (cents) (53.96) (71.65)
Headline and diluted headline
loss per share (cents) (53.35) (68.46)
Statement of changes in equity for the period ended 31 December
Equity-
Stated settled
Capital/ share- Total
Ordinary based Revalu- Accumu- capital
share Share payment ation lated and
capital premium reserve reserve loss reserves
R R R R R R
Balance at
28 February 2011 344 903 573 211 583 7 119 295 1 329 449 (16 275 488) 565 729 742
Total comprehensive
loss for the
ten months
Loss and total
comprehensive income
for the ten months - - - - (24 645 363) (24 645 363)
Transactions with
owners recorded
directly in equity - (16 691) 10 913 781 - - 10 897 090
Qualifying costs
of share issue* - (16 691) - - - (16 691)
Share-based payment - - 10 913 781 - - 10 913 781
Balance at
31 December 2011 344 903 573 194 892 18 033 076 1 329 449 (40 920 851) 551 981 469
Total comprehensive
loss for the year
Loss and total other
comprehensive income
for the year - - - 318 708 (18 590 874) (18 272 166)
Loss for the year - - - - (18 590 874) (18 590 874)
Other comprehensive
income for the year - - - 318 708 - 318 708
Increase on
revaluation of
land & buildings - - - 370 592 - 370 592
Deferred tax on
revaluation - - - (51 884) - (51 884)
Transactions with
owners recorded
directly in equity 573 194 892 (573 194 892) 1 124 879 - - 1 124 879
Conversion to
no par value
shares** 573 194 892 (573 194 892) - - - -
Share-based
payments - - 1 124 879 - - 1 124 879
Balance at
31 December 2012 573 539 795 - 19 157 955 1 648 157 (59 511 725) 534 834 182
* Additional expenses relating to the capital raised.
** Ordinary share capital converted to ordinary shares of no par value in
terms of resolutions passed at the annual general meeting held on
12 September 2012.
Statement of cash flows for the period ended 31 December
Year Ten months
ended ended
December December
2012 2011
R R
Cash flows from operating activities
Cash utilised in operating activities (30 078 387) (18 812 147)
Finance income received 4 907 447 6 103 507
Taxation refunded - 2 085 337
Net cash utilised by operating activities (25 170 940) (10 623 303)
Cash flows from investing activities
Additions to property and equipment (184 311) (121 176)
Additions to intangible exploration
and evaluation assets (71 178 217) (23 839 524)
Proceeds on disposal of property
and equipment - 11 842
Net cash utilised in investing activities (71 362 528) (23 948 858)
Cash flows from financing activities
Costs of issue of share capital - (16 691)
Net cash utilised in financing activities - (16 691)
Decrease in cash and cash equivalents (96 533 468) (34 588 852)
Cash and cash equivalents at beginning
of the year 111 589 752 146 178 604
Cash and cash equivalents at end
of the year 15 056 284 111 589 752
Nature of business
Witwatersrand Consolidated Gold Resources Limited (Wits Gold or the Company)
(registration number 2002/031365/06) is a company domiciled in the Republic
of South Africa. The Companys shares are publicly traded in South Africa on
the JSE Limited securities exchange (primary listing), and in Canada on the
Toronto Stock Exchange (secondary listing). The Company carries on the
business of acquiring, preserving, evaluating, trading and developing
Mineral Rights for exploration, investment and development purposes.
The Company has been granted 14 Prospecting Rights by the Department of
Mineral Resources (DMR) under the Mineral and Petroleum Resources
Development Act of 2002. Two of these Rights have been fully impaired and
are in the process of being handed back to the State. Two renewal
applications for Prospecting Rights were submitted to the DMR during 2011
while a further renewal application for one Prospecting Right was submitted
to the DMR in November 2012. All three applications are still being
processed in terms of the abovementioned Act.
The Company has submitted a Mining Right application to the DMR Free State
region incorporating the Prospecting Rights for the combined De Bron
Merriespruit Project (DBM Project) as well as those relating to the
Bloemhoek and Hakkies Project areas. Wits Gold has not, and does not in the
near future, expect to generate any operating income from its exploration
projects. Mineral exploration is highly speculative due to a number of
significant risks, including the possible failure to discover mineral
deposits that are sufficient in quantity and quality to justify the
completion of feasibility studies. Additional work will need to be
undertaken in order to determine if any economic deposits occur on any of
the Companys remaining properties.
The ongoing exploration of the Companys Prospecting Rights is dependent
upon the Companys ability to obtain additional financing through the joint
venturing of projects, debt financing, equity financing or other means. In
this regard, the Company obtained an unsecured loan for R40 million from The
Joburg Trust in February 2013. This loan is repayable no later than
31 December 2014, with interest payable on a monthly basis. In future, such
sources of financing may not be available on acceptable terms, if at all.
The Company has, however, been successful in the past in raising the
required capital from its shareholders and financiers to fund its operating
and exploration activities. Wits Gold intends raising additional
shareholders funds during the latter half of 2013 in order to settle the
above-mentioned loan, to fund its day to day operational expenditure and to
fast track the development of the DBM Project.
Operational review*
During the period under review, the Company continued to focus its
exploration efforts predominantly in the southern Free State goldfield,
however some additional studies were initiated in the Potchefstroom and
Klerksdorp goldfields in order to better plan the future exploration
activities in these areas. The Company continues to comply with the
rehabilitation procedures imposed by the DMR at the time of the granting of
the relevant Prospecting Right and has provided bank guarantees in the
amount of R350 000 (2011: R320 000) to the DMR as security to cover these
obligations.
The directors are not aware of any legal proceedings or other material
conditions that may impact on the Companys ability to continue its
exploration activities, other than the ability to raise future additional
financing as noted above.
Southern Free State goldfield
Based on the positive Pre-feasibility Study results, the Company immediately
commissioned Royal Haskoning DHV and MDM Technical Africa (Pty) Limited to
complete a Definitive Feasibility Study scheduled to be completed by the 3rd
quarter of 2013.
The transfer of ownership of the Merriespruit South property to the Company
was granted to the Company in November 2012 by the Minister in terms of
Section 102 of the Act and the R51 million balance of the purchase price has
been paid to Harmony.
The Potchefstroom goldfield
No further diamond drilling was undertaken in this area during the period
under review. A structural analysis of the Boskop Project has been
completed in order to optimally position boreholes planned for the future.
The Klerksdorp goldfield
A desk-top study of the Klerksdorp goldfield has been completed and
constrained areas where the Vaal Reef is shallower than 5 000 metres below
surface. The Company intends to undertake focused exploration to attempt to
reduce the Prospecting Rights area in order that non-mineralised areas can
be relinquished.
Mineral Resources
The Companys declared Mineral Resources are estimated by qualified
independent geologists or Competent Persons. These Resource Estimates are
dependent on geological interpretation and statistical inferences drawn from
drilling and sampling that may prove to be unreliable. The Inferred or
Indicated Resources outlined in the Companys properties have been
calculated from widely-spread borehole data. No assurance can be given that
future exploration will be successful in the improvement of the confidence
levels or that any particular level of recovery of minerals will in fact be
realised. It is uncertain whether the identified Mineral Resources will
ever qualify as a viable orebody that can be economically exploited. In
addition, the grade and tonnages of any orebody that may ultimately be mined
may differ from the Mineral Resources currently estimated and any such
differences could be material.
For further information concerning the locality of the Companys Mineral
Resources, including information concerning the geology, mineral
occurrences, nature of mineralisation, geological controls, rock types,
historical work including data density, the application of quality assurance
and quality control measures, sampling and analytical procedures, the names
of analytical laboratories employed and the key assumptions, parameter and
methods used to estimate the Mineral Resources at the Companys various
projects, please see the Companys NI43-101 and Samrec compliant Independent
Technical Reports dated November 2007, June 2008, May 2009, June 2009,
October 2009, May 2010, August 2011, February 2012 and July 2012 which can
be viewed at www.sedar.com and on the Companys website, www.witsgold.com.
The information referred to in this section has not changed materially
except as stated above.
Despite the historic exploration work on the Companys remaining Prospecting
Rights, other than the DBM and Bloemhoek Projects, no other known bodies of
commercial ore or economic deposits have been determined. Additional work
will be required in order to determine if any economic deposits occur on
these properties.
Qualified Person
The technical and scientific information contained in this release was
reviewed by Qualified Person, Dirk Jacobus Muntingh, who is a full time
employee of the Company. Mr Muntingh (M Sc Geology) is a registered
Professional Natural Scientist (Pr.Sci.Nat) with the South African Council
for Natural Scientific Professionals (SACNASP) and has over 22 years of
experience in gold exploration.
* - The information in the section Operational review has not been audited
by KPMG Inc.
Financial Review
The Company changed its year end to December during 2011. Accordingly the
comparative figures relate to the ten months ended 31 December 2011.
Results from operating activities
The loss from operating activities for the year under review decreased by
R7.2 million compared to the prior year. This decrease results mainly from
reductions in:
- the non-cash share-based payment expense of R9.1 million;
- impairment charge of R0.9 million; and
- investor relations expense of R0.8 million.
This was partially offset by increases in:
- new project expenditure of R1.1 million;
- marketing expenses of R1.5 million; and
- non-executive directors fees of R0.8 million.
Headline and diluted headline loss per share
Year Ten months
ended ended
December December
2012 2011
R R
Supplementary information:
Number of shares in issue 34 490 265 34 490 265
Weighted average number of
shares in issue 34 451 704 34 398 701
The loss attributable to ordinary
shareholders is reconciled to
Headline loss as follows:
Net loss attributable to
ordinary shareholders (18 590 874) (24 645 363)
Profit on disposal of property
and equipment - (10 919)
Impairment of intangible assets 211 452 1 105 652
Headline loss (18 379 422) (23 550 630)
Net asset value per
issued share (cents) 1550.68 1 600.40
Net tangible asset value per
issued share (cents) 66.96 322.44
Loss before income tax
The loss before taxation decreased by R6.0 million which results from the
decreased loss from operating activities mentioned above offset by the
decrease in interest received of R1.2 million. Interest income decreased
compared to the previous period, due to the decrease in funds invested
during the year under review.
Non-current assets
During the year under review, the Company incurred direct exploration
expenditure in the amount of R71.2 million (2011: R23.8 million) of which
R51 million related to the acquisition of the Merriespruit South area from
Harmony (2011: Rnil). These amounts have all been capitalised to intangible
exploration and evaluation assets.
Current assets
The Companys cash and cash equivalents decreased by R96.5 million (2011:
R34.6 million) which reflects the normal operational and exploration
outflows offset by interest received and includes the R51 million payment
for the acquisition of the Merriespruit South area.
Current liabilities
There was no material variation in current liabilities (2011: R1.5 million
increase).
Commitments
The Company has committed to spend approximately R19.2 million finalising
the definitive feasibility study on the DBM Project (2011: Rnil), and an
additional amount of approximately R0.2 million (2011: R9.4 million) on
professional consultants during the next year. Furthermore, the Company has
also committed to spend R4.5 million (2011: R55.5 million) on the
acquisition of exploration properties and R2.1 million (2011: R15.5 million)
on exploration activities during the next five years. All of these
commitments will be funded out of existing cash resources and from the
R40 million unsecured loan received from The Joburg Trust in February 2013.
Litigation
There are no legal or arbitration proceedings in which the Company is or has
been engaged, which may have or have had, a material effect on the Companys
financial position.
Dividends
No dividends were declared or paid by the Company during the period under
review (2011: nil).
Basis of preparation
These summarised financial results for the year ended 31 December 2012
comply with the recognition and measurement requirements of International
Financial Reporting Standards, the presentation and disclosure requirements
of IAS 34, Interim Financial Reporting, the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee and the South African
Companies Act of 2008. The accounting policies are consistent with those
applied in the previous financial period. They do not include all the
information required for full annual financial statements and should be read
in conjunction with the financial statements for the year ended 31 December
2012.
The Company consists of only one segment and there have been no changes to
the composition of the entity. There has been no reclassification or
correction of errors and no changes in accounting estimates. The Company
does not have any contingent assets or liabilities. No material related
party transactions have been identified, apart from those disclosed under
Events after the reporting date.
Events after the reporting date
In February 2013:
- The agreement to acquire the Richelieu Plecy area became unconditional
and the purchase price of R3 million was paid to Taung Gold on 18 February
2013 to acquire the Prospecting Right, which is contiguous with the Mining
Rights application area; and
- The Company concluded a R40 million unsecured loan from The Joburg Trust
which is a related party. This loan is repayable no later than 31 December
2014, with interest payable at 10.07% on a monthly basis.
Going concern
Due to the inherent risk in the nature of exploration activities, there may
be uncertainty regarding the recoverability of the Companys exploration
expenditure. To meet its ongoing obligations and maintain its operations,
the Company will periodically seek to raise additional debt or equity
funding which will be premised on the exploration results and the contingent
further exploration plans. Accordingly, in February 2013 the Company
obtained an unsecured loan for R40 million from The Joburg Trust. This loan
is repayable no later than 31 December 2014, with interest payable on a
monthly basis. In addition, the Company intends to undertake a capital
raising during the second half of 2013 in order to settle the above-
mentioned loan, fund its day to day operational expenditure and to fast
track the development of the DBM project. Should the Company fail to raise
the required funding, the management of Wits Gold will make the appropriate
adjustments to the Companys planned future expenditure until such time as
further funding is obtained. These adjustments will ensure that the Company
can continue as a going concern for at least 12 months beyond the approval
date of these summarised audited results.
Annual General Meeting
The Annual General Meeting of the Company will be held at 15h00 on 26 June
2013 at Macquarie First South Capital, The Place, South Building, 1 Sandton
Drive, Sandton, Johannesburg, South Africa.
Audit report
These summarised financial statements have been extracted from the complete
set of financial statements on which the auditors, KPMG Inc. have expressed
an unqualified audit opinion. KPMG has also issued an unqualified audit
report on these summarised financial statements stating that these
summarised results are consistent, in all material respects, with the
complete financial statements. A copy of the auditors report is available
for inspection at the Companys registered office.
Printed copies of these results are available at the Wits Gold registered
office and are available on the Companys website, www.witsgold.com
Forward-looking information
Certain statements in this release may constitute forward-looking
information within the meaning of securities laws. In some cases, forward
looking information can be identified by use of terms such as may, will,
should, expect, believe, plan, scheduled, intend, estimate,
forecast, predict, potential, continue, anticipate or other
similar expressions concerning matters that are not historical facts.
Forward-looking information may relate to managements future outlook and
anticipated events or results, and may include statements or information
regarding the future plans or prospects of the Company. Without limitation,
statements about the timing of a preliminary economic assessment are
forward-looking information. Without limitation, statements about the timing
of a final feasibility study, the anticipated period in which the grant of a
Mining Right may be expected, and the timing of the commencement of
development are forward-looking information.
Forward-looking information involves known and unknown risks, uncertainties
and other important factors that could cause the actual results, performance
or achievements of the Company to be materially different from the future
results, performance or achievements expressed or implied by such forward-
looking information. Such risks, uncertainties and other important factors
include among others: economic, business and political conditions in South
Africa; decreases in the market price of gold; hazards associated with
underground and surface gold mining; the ability to attract and retain
qualified personnel; labour disruptions; changes in laws and government
regulations, particularly environmental regulations and Mineral Rights
legislation including risks relating to the acquisition of the necessary
licences and permits; changes in exchange rates; currency devaluations and
inflation and other macro-economic factors; risk of changes in capital and
operating costs, financing, capitalisation and liquidity risks, including
the risk that the financing required to fund all currently planned
exploration and related activities, potential obligations to fast track the
DBM Project may not be available on satisfactory terms, or at all; and the
ability to maximise the value of any economic resources. These forward-
looking statements speak only as of the date of this release.
You should not place undue importance on forward-looking information and
should not rely upon this information as of any other date. The Company
undertakes no obligation to update publicly or release any revisions to
these forward-looking statements to reflect events or circumstances after
the date of this release or to reflect the occurrence of unanticipated
events except where required by applicable laws.
For and on behalf of the Board
P Kotze
Chief Executive Officer
DM Urquhart
Financial Director
25 March 2013
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Business and Registered Office
12th Floor, 70 Fox Street, Johannesburg, 2001
PO Box 61147, Marshalltown, 2107
Tel (011) 832 1749
Fax (011) 838 3208
Directors
Mr Adam Fleming (Chairman)*, Prof Taole Mokoena (Deputy Chairman)*,
Dr Humphrey Mathe (Director)*, Mrs Gayle Wilson (Director)*,
Mr Ken Dicks (Director)*, Mr Philip Kotze (Chief executive officer),
Mr Derek Urquhart (Chief Financial officer)
* Non-Executive
Company Secretary
Mr Brian Dowden
7 Pam Road, Morningside Ext 5, Sandton, Johannesburg 2057
PO Box 651129, Benmore, 2010. South Africa
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Limited
2 Eglin Rd, Sunninghill 2157
Private Bag X37, Sunninghill 2157, South Africa
Transfer Secretaries
JSE: Link Market Services SA (Pty) Limited
TSX: Canadian Stock Transfer Company
Date: 25/03/2013 03:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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