Wrap Text
Reviewed Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2015
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”)
REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX
MONTHS ENDED 30 JUNE 2015
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Reviewed Reviewed
six months six months
ended ended
30 June 30 June
Change 2015 2014
% R’000 R’000
General and
administrative expenses 70 (15 881) (9 327)
Exploration and pre-
feasibility expenditure (4) (16 040) (16 741)
Employee share option
Settlement costs 100 - (3 500)
Operating loss (31 921) (29 568)
Finance income (19) 68 84
Finance costs 75 (3 702) (2 113)
Loss before taxation (35 555) (31 597)
Income taxation - -
Loss for the period (35 555) (31 597)
Other comprehensive
income - -
Total Comprehensive
Income for the Period 13 (35 555) (31 597)
Reviewed Reviewed
six months six months
ended ended
30 June 30 June
2015 2014
Total number of
ordinary shares issued 147 354 905 147 354 905
Weighted average number
of ordinary shares in
issue 147 354 905 147 354 905
Basic loss per share
(cents) (24) (21)
Diluted loss per share
(cents) (24) (21)
Headline loss per share
(unaudited)(cents) (24) (21)
Diluted headline loss (24) (21)
per share (unaudited)
(cents)
Six months Six months
ended ended
30 June 30 June
2015 2014
R’000 R’000
Reconciliation of Headline Loss
Loss attributable to owners of the company (35 555) (31 597)
Headline loss (35 555) (31 597)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Reviewed Audited
as at as at
30 June 31 December
2015 2014
R’000 R’000
ASSETS
Non-current assets
Property, plant and equipment 121 193 79 120
Intangible assets 76 084 75 829
Loans to related parties 9 722 4 782
Investment property 2 010 2 010
209 009 161 741
Current assets
Receivables 8 890 3 860
Restricted cash 1 498 1 628
Cash and cash equivalents 2 329 975
12 717 6 463
Total assets 221 726 168 204
EQUITY AND LIABILITIES
Equity
Share capital 169 860 169 860
Reserves 35 211 34 146
Accumulated loss (198 999) (163 586)
6 072 40 420
Non-current liabilities
Provision for environmental
rehabilitation 1 925 1 925
1 925 1 925
Current liabilities
Loans from related parties 190 668 121 330
Trade and other payables 22 213 3 828
Employee related accruals 848 398
Taxation payable - 224
Bank overdraft - 79
213 729 125 859
Total liabilities 215 654 127 784
Total equity and liabilities 221 726 168 204
Net asset value per share
(unaudited)(cents) 4 27
Net tangible asset value per
share (unaudited) (cents) (48) (24)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (REVIEWED)
Share Accumulated Total
capital Reserves loss equity
R’000 R’000 R’000 R’000
Balance at
01 January 2014 169 860 31 150 (87 904) 113 106
Loss for the period - - (31 597) (31 597)
Other comprehensive
income - - - -
Total comprehensive
income for the period - - (31 597) (31 597)
Transactions with
owners in their
capacity as owners,
recognised directly in
equity
Equity settled employee
share option expenses - 1 616 - 1 616
Share options (recycle
options of employees
resigned) - (1 095) 1 095 -
Balance at 30 June 2014 169 860 31 671 (118 406) 83 125
Balance at 01 January
2015 169 860 34 146 (163 586) 40 420
Loss for the period - - (35 555) (35 555)
Other comprehensive
income - - - -
Total comprehensive
income for the period - - (35 555) (35 555)
Transactions with
owners in their
capacity as owners,
recognised directly in
equity
Equity settled employee
share option expenses - 1 207 - 1 207
Share options (recycle
options of employees
resigned) - (142) 142 -
Balance at 30 June 2015 169 860 35 211 (198 999) 6 072
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Reviewed
six months six months
ended ended
30 June 30 June
2015 2014
R’000 R’000
Cash utilised in operating
activities (16 633) (23 982)
Net cash from investing
activities (47 570) (3 196)
Net cash from financing
activities 65 636 23 534
Net increase / (decrease) in
cash and cash equivalents 1 443 (3 644)
Cash and cash equivalents at
the beginning of the period 896 4 298
Cash and cash equivalents at
end of the period 2 329 654
COMMENTARY
1. BASIS OF PREPARATION
The condensed consolidated interim financial statements for the six months
ended 30 June 2015 are prepared in accordance with International Financial
Reporting Standard, (IAS) 34 Interim Financial Reporting, the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by Financial Reporting Standards
Council and the requirements of the Companies Act of South Africa. The
accounting policies applied in the preparation of these interim financial
statements are in terms of International Financial Reporting Standards
("IFRS") and are consistent with those applied in the annual financial
statements for the year ended 31 December 2014.
The condensed consolidated interim financial statements for the six months
ended 30 June 2015 do not include all the information required for audited
financial statements in terms of IFRS and should be read in conjunction
with the audited financial statements of the Group for the year ended 31
December 2014 and any public announcements made in terms of the JSE
Listings Requirements. However, selected explanatory notes are included
to explain events and transactions that are significant to an understanding
of the changes in the Group’s financial position and performance since the
last audited financial statements for the year ended 31 December 2014.
The condensed consolidated interim financial statements are presented in
South African Rands and rounded to the nearest thousand.
These condensed consolidated interim financial statements were authorised
for issue by Goliath Gold’s board of directors (“Board”) on 2 September
2015.
The condensed consolidated interim financial statements have been prepared
under the supervision of Phillip Spencer CA(SA).The condensed consolidated
interim financial statements of Goliath Goldfor the six months ended 30 June
2015 have been reviewed by the Company’s auditor, KPMG Inc., on which an
unmodified review conclusion was expressed.
A copy of the report is available for inspection at the Company’s registered office.
The review report does not necessarily report on all of the information
contained in this financial report. 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 review report
together with the accompanying condensed consolidated interim financial
statements from the Company’s registered office.
This announcement does not include the information required pursuant to
paragraph 16A(j) of IAS 34. The full report is available at the issuer’s
registered offices and upon request. This announcement is itself not
reviewed or audited but is extracted from the underlying review
information.
2. NATURE OF THE BUSINESS
Goliath Gold is a South African incorporated mining exploration and
development company listed on the JSE Limited under the issuer code GGM.
Goliath’s primary business interest is in gold exploration within South
Africa’s East Rand basin in the Gauteng Province. As at the release of
these condensed consolidated interim financial statements, the Group holds
four gold prospecting rights and one new order gold mining right within
this area, as well as eight invasive prospecting rights for heavy minerals
and rare earths in South Africa’s Western Cape Province, known as Project
Elephant, for which renewals were granted during July 2015.
In addition to the mineral rights already held by the Group within the
East Rand, Goliath Gold is awaiting the granting of seven East Rand gold
mining permits, collectively known as Project Phoenix, which were lodged
and accepted during March and April 2014. During the six months under
review the Group lodged an additional gold mining permit application over
the Cons Modder Black Reef West Pit 1 project area within the East Rand.
During the period under review the Group also submitted an application in
terms of the Mineral and Petroleum Resources Development Act, 2002, to
incorporate several prospecting areas adjacent to the Company’s existing
Sub Nigel mining right area into the Sub Nigel mining right – this
application is awaiting acceptance. Regarding Project Elephant in the
Western Cape, the Group is also awaiting the granting of a ninth
prospecting right which was accepted during February 2015.
Goliath Gold is also awaiting the granting of an exclusive prospecting
license for base, rare and precious metals over a greenfield project area
in Etendeka, Namibia.
The Group continues to fund exploration expenses on the areas over which
it holds prospecting rights. Accordingly, the Group has incurred a loss
of R35.5 million for the six months ended 30 June 2015 (six months ended
30 June 2014: R31.6 million).
3. PROSPECTS AND FUTURE PERFORMANCE
Goliath Gold’s exploration strategy continues to be driven by the findings
of the East Rand Target Areas (“ERTA”) Project initiated in 2013. The ERTA
Project comprises the continual evaluation and ranking of all Goliath Gold
projects according to their anticipated lead time and ease of getting into
production.
As at the release of these condensed consolidated interim financial
statements, the Group’s consolidated resources and reserves remain as
stated in the 2014 integrated annual report, published on 31 March 2015.
Mineral resources are estimated at 15.01 million SAMREC-compliant gold
ounces (comprising 98.23 million tonnes at 4.75 grams per tonne), including
3.25 million ounces in the indicated category (comprising 21.80 million
tonnes at 4.62 grams per tonne), 11.73 million ounces in the inferred
category (comprising 76.10 million tonnes at 4.79 grams per tonne) and
0.03 million ounces in the measured category (comprising 0.33 million
tonnes at 3.26 grams per tonne).
4. COMPETENT PERSON’S STATEMENT
There have been no material changes to the Company’s estimated mineral
resources as declared in December 2014. On-going exploration results are
continuously monitored and will be utilised to update the existing mineral
resources upon successful completion of the planned exploration
activities.
The information in these condensed consolidated interim financial
statements that relates to exploration results, mineral resources or ore
reserves is based on information compiled by the following Competent
Persons for the purposes of the South African Code for Reporting of
Exploration Results, Mineral Resources and Mineral Reserves (“SAMREC
Code”).
The overall Competent Person for Goliath Gold is Mr. Sean Meadon. The
information contained herein that relates to exploration results is based
on information compiled by Mr. Meadon for the purposes of the SAMREC Code.
The information which relates to underground mineral resources is based
on information compiled by Dr. Carina Lemmer. The information which relates
to surface mineral resources for the Cons Modder Black Reef Project is
based on information compiled by Mr. Peter le Roux.
Mr. Meadon has a master’s degree in science (geology) and is a professional
natural scientist registered with the South African Council for Natural
Scientific Professions ("SACNASP") membership number 400243/09. Mr. Meadon
is Vice President: Technical Services and is a full time employee of
Goliath Gold. Mr. Meadon has 24 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. Prior to March 2015, Mr. Meadon was a fulltime
employee of Gold One Management Services, which has entered into a
management agreement with Goliath Gold.
Dr. Lemmer has a doctorate in applied earth sciences (geostatistics) and
is a professional natural scientist registered with SACNASP, membership
number 400021/03. 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. le Roux has an honour's degree in science (geology) and is a
professional natural scientist registered with SACNASP, membership number
400297/13. At the time of the sign-off for the December 2014 surface
mineral resources for the Cons Modder Black Reef Project Mr. le Roux was
a fulltime geological consultant for Shango Solutions, which is an
independent resource consultant to Goliath Gold. At the time of the
publishing of the Goliath Gold 2014 Integrated Annual Report and the
publishing of these interim financial statements, Mr. le Roux is a fulltime
senior geological consultant to A&B Global Mining (ABGM). Mr. le Roux has
15 years’ experience in resource estimation 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.
Mr. Meadon, Dr. Lemmer and Mr. le Roux consent to the inclusion in these
condensed consolidated interim financial statements of the matters based
on information compiled by themselves in the form and context in which
they appear.
These condensed consolidated interim financial statements use the terms
“indicated resources” and “inferred resources” as defined in accordance
with the SAMREC Code, prepared by the South African Mineral Resource
Committee under the auspices of the South African Institute of Mining and
Metallurgy (“SAIMM”), effective March 2000 or as amended from time to
time. The use of these terms in these condensed consolidated interim
financial statements is consistent with the definitions of the SAMREC
Code.
5. GOING CONCERN
The condensed consolidated interim 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 Company and its subsidiaries will have adequate
resources to continue as going concerns for the foreseeable future.
We note that at 30 June 2015, the Group’s total assets exceed its
liabilities by R 6.1 million. The Group incurred a loss for the six months
ended 30 June 2015 of R 35.6 million. At 30 June 2015, the Group's current
liabilities exceeds its current assets by R 201.0 million (31 December
2014: R 119.4 million).
However, as the Group is a gold exploration group and does not currently
have cash generating assets, the continued exploration programme is funded
from available cash on hand and with shareholder debt from the intermediate
parent company, Gold One South Africa Limited ("GOSA"). GOSA has confirmed
its financial support of Goliath Gold as and when additional funding is
required to execute the exploration programme.
6. 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 one geographical
location, being Southern Africa, and performs exploration activities.
Reviewed Reviewed
six months six months
ended ended
30 June 30 June
2015 2014
R’000 R’000
Segment revenue
Exploration - -
Loss for the period
Exploration (35 555) (31 597)
Reviewed Audited
as at as at
30 June 31 December
2015 2014
R’000 R’000
Assets
Exploration 221 726 168 204
Liabilities
Exploration 215 654 127 784
7. EVENTS AFTER THE REPORTING PERIOD
Subsequent to the half year end, Gold One Africa Limited submitted a non-
binding expression of interest to the Company to acquire the ordinary
shares of the Company that it does not already own by way of a scheme of
arrangement in terms of section 114 of the Companies Act of South Africa.
In terms of the cautionary announcement published on SENS on 29 July 2015,
shareholders could elect to receive either an immediate cash payment of
R1.00 per share (total offer value of R41.2 million), on the date of
implementation (“Immediate Payment”), or a deferred cash payment of R1.60
per share (total nominal offer value of R66 million) after the expiry of
a period of 18 months following the implementation, or a combination
thereof in such ratio as may be elected by the shareholder. Should a
shareholder fail to make a payment election, such shareholder will be
deemed to have elected the Immediate Payment.
8. CONS MODDER EXPLORATION ACTIVITIES
During the period, Newshelf 1186 Proprietary Limited (“Newshelf 1186”)
commenced with exploration activities associated with the Cons Modder
black reef targets where various large pillar areas and portions shallower
than 100 meters had not been previously mined. These exploration activities
were accelerated during the period. Newshelf 1186 entered into a commercial
arrangement with an independent third party to perform certain pre-
stripping activities in order to provide easy access to the orebody in
order to conduct further prospecting activities prior to the sterilisation
of the orebody by rising water levels in the East Rand basin. In addition,
a mining permit application was submitted to the Department of Mineral
Resources, who have acknowledged receipt of the application. Should the
mining permit be issued during the second half of 2015, it is anticipated
that material revenue would be generated through the sale of inventories
generated from mining activities.
The additional costs capitalised to property, plant and equipment,
amounting to R 42.3 million, mainly relate to the capitalisation of these
prospecting activities. It is noted that the increase in trade and other
payables at 30 June 2015 reflects the costs relating to the pre-stripping
activities performed by the independent third party.
9. DIVIDENDS
No dividends were declared or paid to shareholders during the period (2014:
Rnil).
10. DIRECTORATE
There have been no changes to the Board during the period under review.
For and on behalf of the Board
Dale Richards Christopher Chadwick
Chief Executive Officer Chief Financial Officer
Johannesburg
3 September 2015
Directors:
P Nel* (Chairman), D Richards (Chief Executive Officer),
C Chadwick (Chief Financial Officer), K Rayner*,
J Vilakazi*
*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: 03/09/2015 09:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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