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Abridged summarised consolidated financial results for the year ended 31 December 2013
and notice of AGM
Goliath Gold Mining Limited
Incorporated in the Republic of South Africa
(Registration number: 1933/004523/06)
Share code: GGM ISIN: ZAE000154753
(“Goliath Gold” or “the Company” or “the Group”)
ABRIDGED SUMMARISED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31
DECEMBER 2013 AND NOTICE of ANNUAL GENERAL MEETING
SUMMARISED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
AUDITED AUDITED
12 months to 12 months
31 December to 31 December
Change 2013 2012
% R’000 R’000
Other income 100 2 503 -
Operating expenses 76 (21 064) (11 993)
Exploration and pre-
feasibility expenditure (3) (23 888) (24 615)
Other expenses (100) (13) (25 365)
Black Economic
Empowerment
transactions (100) - (23 770)
Operating loss (42 462) (85 743)
Finance income 516 1 821
Finance costs (2 107) (2 019)
Loss before taxation (44 053) (85 941)
Income taxation 22 78
Loss for the year (44 031) (85 863)
Other comprehensive
income - -
Total comprehensive
loss attributable to
the parent (49) (44 031) (85 863)
Loss per share (cents) (30) (62)
Diluted loss per share
(cents) (30) (62)
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AUDITED AUDITED
as at as at 31
31 December December
2013 2012
R’000 R’000
ASSETS
Non-current assets
Investment property 3 010 3 825
Property, plant and equipment 78 612 73 417
Intangible assets 75 296 75 282
Current assets
Loans to related parties 17 -
Receivables 378 1 858
Restricted cash 1 628 1 648
Cash and cash equivalents 4 298 12 514
Total assets 163 239 168 544
EQUITY AND LIABILITIES
Share capital 169 860 169 860
Reserves 31 150 24 059
Accumulated loss (87 904) (44 320)
Equity attributable to equity
holders of the Group 113 106 149 599
Non-current liabilities
Provision for environmental
rehabilitation 1 391 1 335
Current liabilities
Loans from related parties 38 826 15 223
Trade and other payables 9 493 2 311
Employee related accruals 423 76
Total equity and liabilities 163 239 168 544
Net asset value per share
(cents) 76.8 101.5
Net tangible asset value per
share (cents) 25.7 50.4
SUMMARY CONSOLIDATED GROUP STATEMENT OF CHANGES IN EQUITY
Retained
earnings /
Share Reserves Accumulated Total
capital R’000 loss equity
R’000 R’000 R’000
Audited balance at
01 January 2012 - - 41 543 41 543
Total comprehensive
loss for the year - - (85 863) (85 863)
Issue of shares 169 860 - - 169 860
Employee share
option expense - 289 - 289
Black Economic
Empowerment
transaction - 23 770 - 23 770
Audited balance at
31 December 2012 169 860 24 059 (44 320) 149 599
Audited balance at
01 January 2013 169 860 24 059 (44 320) 149 599
Total comprehensive
loss for the year - - (44 031) (44 031)
Share options
(recycle options of
employee resigned) - (447) 447 -
Employee share
option expense - 7 538 - 7 538
Audited balance at
31 December 2013 169 860 31 150 (87 904) 113 106
SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS
AUDITED
AUDITED 12 months
12 months to to 31
31 December December
2013 2012
R’000 R’000
Cash utilised in operating
activities (27 090) (33 477)
Cash effect of investing
activities (2 605) 46 883
Cash effect of financing
activities 21 479 (892)
Net cash change for the year (8 216) 12 514
Cash at the beginning of the
year 12 514 -
Net cash at the end of the year 4 298 12 514
COMMENTARY
1. BASIS OF PREPARATION
The summarised consolidated financial statements of the Group for the
year ended 31 December 2013 have been prepared under the supervision of
Phillip Spencer (CA(SA)), Vice President: Finance in accordance with
the JSE Listings Requirements for abridged reports, and the
requirements of the Companies Act, 2008 (Act 71 of 2008), as amended
(“Companies Act”), applicable to summary financial statements. The JSE
Listings Requirements require abridged reports to be prepared in
accordance with the framework concepts and the measurement and
recognition requirements of International Financial Reporting Standards
(“IFRS”) and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued
by the Financial Reporting Standards Council and to also, as a minimum,
contain the information required by IAS 34: Interim Financial
Reporting. The accounting policies applied in the preparations of the
consolidated financial statements, from which the summary consolidated
financial statements were derived, are in terms of IFRS and are
consistent with the accounting policies applied in the preparation of
previous consolidated annual financial statements.
The board of directors take full responsibility for the preparation of
this report and for the correct extraction of information from the
Integrated Annual Report. This abridged report is extracted from
audited information, but is not itself audited.
The Group consolidated financial statements for the year ended 31
December 2013 have been audited by the Group’s auditors, KPMG Inc.,
whose unqualified audit opinion is available, together with the
Integrated Annual Report, for inspection at the Company’s registered
office. The auditor’s report does not necessarily report on all of the
information contained in this announcement. Shareholders are therefore
advised that in order to obtain a full understanding of the nature of
the auditor’s engagement they should obtain a copy of the auditor’s
report together with the accompanying financial information from the
Company’s registered office.
2. NATURE OF THE BUSINESS
The Company’s main business is that of a mining exploration company
that is focused on identifying and exploring diversified resources
across Southern Africa. The Company currently holds gold prospecting
rights and a mining right over several contiguous areas in South
Africa’s East Rand Basin in the Gauteng Province as well as prospecting
rights for heavy mineral sands over an area within South Africa’s
Western Cape Province. Opportunities in other mining-friendly African
jurisdictions are also being considered.
The Company’s subsidiaries are primarily engaged in the resource
sector. The Company has a primary listing on the JSE, issuer code: GGM.
3. CORPORATE ACTIVITY
In 2013 Goliath Gold, together with its majority shareholder, Gold One
International Limited (“Gold One”), acting through its subsidiary
Newshelf 1198 Proprietary Limited (“Newshelf 1198”), entered into an
acquisition agreement with the liquidators of Pamodzi Gold East
Proprietary Limited (Pamodzi). Through this agreement Goliath Gold was
granted two prospecting rights, both on 1 November 2013, for the Nigel
and Cons Modder prospecting areas. In addition to the two prospecting
rights the Company is to acquire historical and geological data from
Consolidation Modderfontein Mines 1979 Limited, Consolidation
Modderfontein Mines Limited, Nigel Gold Mining Company Proprietary
Limited and Grootvlei Proprietary Mines Limited.
The acquisition was first announced on 17 April 2012 and a R 7
million deposit was paid on signature of the acquisition agreement, R
0.5 million by the Group and R 6.5 million by the Gold One group, and
the acquisition of historical and geological data by Goliath Gold and
selected surface assets by Gold One was made unconditional on 7 August
2013. Upon transfer of the data to Goliath Gold and the properties to
Gold One, outstanding payment of R 4.5 million payable by Goliath Gold
and R 58.5 million payable by Gold One will be made. Transfer of the
data to Goliath Gold will take place on registration of transfer of the
surface properties into the name of Newshelf 1198.
4. OPERATIONAL PERFORMANCE
During the 2013 year the East Rand Target Areas (“ERTA”) project was
initiated with a view to evaluate and rank all new and existing Goliath
Gold projects with a particular focus on anticipated lead time and ease
of getting into production, allowing potential near-term projects to be
given priority focus.
With the granting of the additional East Rand prospecting rights during
the year under review, a short term opportunity, now known as Project
Phoenix, was identified. This project considers the surface clean-up
and processing of numerous old shaft and gold plant sites dating back
to the 1940s and 1960s throughout the East Rand. A scoping study based
on initial sampling of these sites indicated that not only was the
project potentially economically viable, but it is also significantly
beneficial to all stakeholders through the potential short term
creation of employment and the fostering of environmental
sustainability. In light of this, Goliath Gold has applied for several
mining permits over the identified surface targets and is currently
awaiting feedback from the Department of Mineral Resources.
Prospective shallower mineral resources defined in the 2012 mineral
resource update formed the focus of the Company’s 2013 exploration
activities, as they provide an opportunity to fast-track economic
studies with a view to defining potential mineral reserves pending the
outcome of these studies. Target areas explored during 2013 include the
Houtpoort Channel (medium term opportunity), Vlakfontein Black Reef
(medium term opportunity) and Wit Nigel 7 Shaft Extension (longer term
opportunity). Exploration activities entailed underground geological
visits, sampling and surface drilling, and were undertaken to enhance
confidence in the geological models and mineral resource estimates. A
total of 54 exploration boreholes have been drilled within the East
Rand project area since 2010 of which eight were completed at the
Houtpoort Channel during 2013, and an additional three were completed
in the southern Houtpoort extension. During the year one borehole in
the Wit Nigel 7 Shaft extension area and five exploration boreholes at
the Vlakfontein Black Reef target area were also completed. The Company
also completed an economic scoping study at the Houtpoort project which
yielded sufficiently positive results to progress to a pre-feasibility
study that will be undertaken during 2014.
The granting of the Cons Modder and Nigel prospecting rights also led
to the identification of another shallow target with quick access
potential: the Romola project. The Romola project is targeting the
Nigel Reef over a strike length of approximately 3 kilometres and
ranging from surface outcrop to depths of 600 metres below surface.
This represents a largely unmined area that could potentially be
accessed via a surface decline pending successful exploration results.
At the Company’s Project Elephant, where heavy minerals and rare earths
are being targeted in Vredendal in the Western Cape Province, an
analysis of historical exploration boreholes and a regional aerial
geophysical survey were completed during the year under review. Pending
the results of this data, which are anticipated during the second
quarter of 2014, Goliath Gold intends to identify drill target areas
and submit an application for the renewal of the prospecting rights,
specifically considering invasive prospecting activities, such as
surface drilling.
5. FINANCIAL PERFORMANCE
The total exploration expenditure incurred during 2013 amounted to
R23.9 million.
The net loss for the Group was R44.0 million for the year ended
31 December 2013, compared to a net loss of R85.9 million for the year
ended 31 December 2012. The main items contributing to the loss for the
year were the continuing exploration and pre-feasibility expenditure
incurred and other operating expenses which includes management fees
and employee share options. The 2012 comparatives include a non-
recurring Black Economic Empowerment transaction of R23.8 million.
The loss per share is set out below:
AUDITED AUDITED
12 months to 12 months
31 December to 31 December
2013 2012
Basic loss per share
(cents) (30) (62)
Diluted loss per share
(cents) (30) (62)
Headline loss per share
(cents) (32) (45)
Diluted headline loss
per share(cents) (32) (45)
6. PROSPECTS AND FUTURE PERFORMANCE
Goliath Gold is focused on creating value by exploring and developing
the Company’s extensive asset base.
During 2013 total mineral resources were estimated at 10.68 million
ounces (including 64.80 million tonnes grading at 5.12 grams per tonne)
consisting of indicated mineral resources of 3.21 million ounces
(including 21.42 million tonnes grading at 4.64 grams per tonne) and
inferred mineral resources of 7.47 million ounces (including 43.38
million tonnes grading at 5.35 grams per tonne). The slight reduction
in overall gold content relative to 2012 was the result of the
application of a more conservative gold price of R410 000/kg being
applied, compared to R450 000/kg in 2012, which resulted in an increase
in cut-off grades and a corresponding 12% decrease in gold content from
12.19 million ounces to 10.68 million ounces, but an 11% increase in
estimated in-situ grades from 4.62 grams per tonne to 5.12 grams per
tonne in 2013.
Future exploration activities will be aimed at further supporting the
Company’s strategy to become the preferred precious metals exploration
and development company in South Africa and to prioritise short term
projects with a view to generate cash flow and turn the Company’s
extensive resource base to account. The Company will achieve this by
focusing on the East Rand projects Phoenix, Houtpoort and Houtpoort
extension, Vlakfontein Black Reef and Romola.
Focus will also remain on the ERTA project, which will continue to
prioritise targets according to depth, ease of access, risk of basin
water ingress and prospectivity. The ranking of all current ERTA
targets is planned to be completed by March 2014, after which assay
data capture and 3D structural modelling will commence on selected
targets. Resource estimation will be undertaken on those targets where
sufficient, validated historic data is available.
Houtpoort exploration drilling will comprise two phases that are to run
concurrently. Six boreholes are planned to increase confidence in the
existing mineral resource by targeting resource blocks included in the
concept study. The second phase has eleven boreholes planned to the
southeast of Houtpoort to test the possibility of the Houtpoort
resource extending towards the historical Rose Reef Mine on
Bothaskraal. The results from these exploration activities will be used
in a pre-feasibility study planned to commence during the second
quarter of 2014.
On the Vlakfontein Black Reef target 20 boreholes are planned. The aim
of the exploration will be to enhance the geological model of the Black
Reef within the Mapleton Basin and test the potential for small scale
opencast mining.
At the Romola project a total of 10 boreholes at depths from 60 metres
to 200 metres are planned to delineate the payshoot.
7. COMPETENT PERSON’S STATEMENT
The overall Competent Person for Goliath Gold is Mr Quartus Meyer. The
information in the Integrated Annual Report that relates to exploration
results is based on information compiled by Mr Meyer for the purposes
of the SAMREC Code. The information in the Integrated Annual Report
that relates to mineral resources is based on information compiled by
Dr Carina Lemmer.
The Competent Person for Goliath Gold’s exploration results is Mr
Meyer, who has a master’s degree in science (geology)and who is a
professional natural scientist registered with the South African
Council for Natural Scientific Professions (SACNASP) membership number
400063/88, and resides at 27 Mynhardt van Graan Street, Hennenman,
9445. Mr Meyer is Vice President: Exploration, and is a fulltime
employee of Gold One, which has entered into a management agreement
with Goliath Gold. Mr Meyer has 27 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 the SAMREC Code.
The Competent Person for Goliath Gold’s mineral resources is Dr Carina
Lemmer, who has a doctorate in applied earth sciences (geostatistics)
and who is a professional natural scientist registered with SACNASP,
membership number 400021/03, and resides at 15 Chiselhurst Drive,
Rossmore, 2092. Dr Lemmer is an independent consultant to Goliath Gold,
and has been an independent consultant to the South African mining
industry for the past 24 years. Dr Lemmer has 36 years’ experience in
resource estimation relevant to the style of mineralisation and type of
deposit under consideration, and to the activity which she is
undertaking, to qualify as a Competent Person for the purposes of the
SAMREC Code. Mr Meyer and Dr Lemmer consent to the inclusion in the
Integrated Annual Report of the matters based on information compiled
by themselves in the form and context in which they appear.
8. SEGMENT INFORMATION
Management has determined the operating segments based on the reports
reviewed by the Executive Committee that are used to make strategic
decisions. The Executive Committee considers the business from a
functional perspective and has identified only one reportable segment,
namely, exploration. The Group currently operates in two geographical
locations, being the East Rand Goldfields in South Africa’s Gauteng
Province as well as in the Western Cape Province, and performs
explorations activities.
No mining activities took place in 2013.
AUDITED
AUDITED 12 months
12 months to to 31
31 December December
2013 2012
R’000 R’000
Segment revenue
Exploration - -
Consolidated segment revenue - -
Comprehensive loss for the year
Exploration (44 031) (85 863)
Consolidated segment loss (44 031) (85 863)
Assets
Exploration 163 239 168 544
Consolidated total assets 163 239 168 544
Liabilities
Exploration (50 133) (18 945)
Consolidated total liabilities (50 133) (18 945)
9. RECONCILIATION OF EARNINGS AND NUMBER OF SHARES
HEADLINE EARNINGS PER SHARE
AUDITED AUDITED
12 months to 12 months
31 December to 31 December
2013 2012
Headline loss per share
(cents) (32) (45)
Diluted headline loss
(cents) (32) (45)
Reconciliation of headline earnings per share
RESTATED
AUDITED
AUDITED 12 months
12 months to to 31
31 December December
2013 2012
R’000 R’000
Loss for the year (44 031) (85 863)
Adjustments for:
Profit on abandonment of
surface rights (1 500) -
Profit on sale of assets (822) -
Loss on sale of assets 13 1 105
Fair value adjustment on
investment property (181) -
Impairment of assets - 22 914
Headline loss for the year (46 521) (61 844)
WEIGHTED AVERAGE NUMBER OF SHARES
AUDITED
AUDITED 12 months
12 months to to 31
31 December December
2013 2012
Number of shares deemed to be
issued from 01 January 2012 to
acquisition date - 22 640 612
Number of shares outstanding
from the acquisition date to 31
December 2012 - 115 548792
Number of shares outstanding
from 1 January 2013 to 31
December 2013 147 354 905 -
Weighted average number of
shares 147 354 905 138 189 404
Diluted headline loss per share
Diluted headline loss per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion of
all dilutive potential ordinary shares. The Group only has one element
of potential ordinary shares which is 6 150 000 employee share options
in issue at 31 December 2013. However, these share options are anti-
dilutive and therefore are not included in the calculation of diluted
weighted average number of ordinary shares. Accordingly, the diluted
weighted average number of ordinary shares is 147 354 905.
10. SUBSEQUENT EVENTS
In the opinion of the board of directors, no subsequent event or
circumstance has arisen since 31 December 2013 that requires additional
disclosure.
11. CONTINGENCIES
Goliath Gold has identified a risk of potential long term Acid Mine
Drainage (“AMD”) on certain of its operations. AMD relates to the
acidification and contamination of naturally occurring water resources
by pyrite bearing ore contained in underground mines and in rock dumps,
tailings dams and pits on the surface. Goliath Gold has not been able
to reliably determine the financial impact that AMD may have on the
Group. The Group has taken certain preventative actions as well as
remedial actions in an attempt to minimise the Group’s exposure to
environmental contamination.
12. DIVIDENDS
No dividends were declared or paid to shareholders during the year.
13. DIRECTORATE
Mark Wheatley resigned as Non-Executive Chairman effective from 30
April 2013 and was replaced by Piet Nel as Independent Non-Executive
Chairman effective from 30 April 2013.
14. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Following the resignation of Neal Froneman as CEO in December 2012,
Richard Stewart was appointed as an executive director and CEO with
effect from 1 January 2013.
On 21 August 2013, Goliath Gold’s majority shareholder, Gold One,
announced that it had entered into an agreement with Sibanye Gold
Limited (“Sibanye Gold”) to merge its 74% shareholding in and claims
against Newshelf 1114 Proprietary Limited (“Newshelf 1114”), which
holds a 100% shareholding in Rand Uranium Proprietary Limited - being
the Cooke 1-3 Underground Operations and Randfontein Surface Operations
- and, which will also hold 100% of Ezulwini Mining Company Proprietary
Limited after an internal restructuring - being the Cooke 4 Underground
Operation – in exchange for a 17% interest in the fully diluted share
capital of Sibanye Gold through the issue of new ordinary shares.
As previously advised, on conclusion of the transaction, which is
expected to close during the first half of 2014, Richard Stewart is to
become a fulltime employee of Sibanye Gold and will therefore be
obliged to resign from his position as CEO of Goliath Gold. In the
interim, and following the approval of the merger by the Competition
Tribunal of South Africa on 5 February 2014, Sibanye Gold and Newshelf
1114 have concluded an interim management agreement in terms of which
Sibanye Gold is to take over the management of the Cooke 1-4
Underground Operations and the Randfontein Surface Operations in
advance of the transaction closing. As a consequence, Richard Stewart’s
resignation as CEO may be accelerated.
The Goliath Gold Board is proactively considering potential candidates
to serve as CEO pending the outcome of the above-mentioned transaction
and a further announcement will be made in this regard.
15. NOTICE OF ANNUAL GENERAL MEETING
The Annual General Meeting of Goliath Gold will be held at 10:00 on
Thursday, 19 June 2014 at the office of the majority shareholder,
Constantia Office Park, Bridgeview House, Ground Floor, Corner 14th
Avenue and Hendrik Potgieter Street, Weltevreden Park, 1709.
The Board has determined that, in terms of section 62(3)(a), as read
with section 59 of the Companies Act, the record date for the purposes
of determining which shareholders of the Company are entitled to
participate in and vote at the Annual General Meeting is Friday, 13
June 2014. Accordingly, the last day to trade Goliath Gold shares in
order to be recorded in the Register to be entitled to vote will be
Friday, 6 June 2014.
For and on behalf of the Board
Richard Stewart Christopher Chadwick
Chief Executive Officer Chief Financial Officer
Johannesburg
31 March 2014
Directors:
P Nel# (Chairman), R Stewart (Chief Executive Officer),
C Chadwick (Chief Financial Officer), K Rayner*,
J Vilakazi*
#Non-executive *Independent Non-Executive
REGISTERED OFFICE
Constantia Office Park, Bridgeview House, Ground Floor, Corner 14th
Avenue and Hendrik Potgieter Road, Weltevreden Park, 1709
COMPANY SECRETARY
Pierre Kruger
Constantia Office Park, Bridgeview House, Ground Floor, Corner 14th
Avenue and Hendrik Potgieter Road, Weltevreden Park, 1709
SPONSOR
Merchantec Capital
AUDITORS
KPMG Inc.
Date: 31/03/2014 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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