30th Sep 2008 10:49
FOR IMMEDIATE RELEASE 30 September 2008
allied gold limited
("the Company")
ANNUAL REPORT 2008
Allied Gold Limited has posted the Annual Report 2008 (the "Report") to shareholders today. Extracts are set out below.
A copy of the full Report, containing the unqualified audit opinion, is set out as an attachment to this announcement:
http://www.rns-pdf.londonstockexchange.com/rns/6644E_-2008-9-30.pdf
Directors' report (extracts as summarised below)
PRINCIPAL ACTIVITIES
The principal activities of Allied Gold during the course of the year were the exploration for gold, the construction of gold producing infrastructure and the mining and processing of gold. These activities mainly involved Allied Gold's wholly owned Simberi Gold Oxide Project, located in offshore Papua New Guinea. Commissioning of the Simberi process plant commenced in early 2008 and the Simberi Oxide Gold Project poured its first gold in February 2008.
RESULTS
The consolidated operating loss after tax was $9,538,963 (2007: loss $1,880,611).
DIVIDENDS PAID OR RECOMMENDED
No dividends were paid or declared during or in respect of the financial year ended 30 June 2008 (2007: nil).
REVIEW OF OPERATIONS
The principal focus of the company over the year was the construction and commissioning of the mining infrastructure and process plant for the Simberi Oxide Gold project.
Allied Gold poured its first gold in February 2008 and produced a total of 33,068 ounces of gold during the financial year (2007: nil ounces). Key operating statistics for the mining and processing activities for the period of active production from February 2008 to June 2008 are summarised in the table below.
|
Key operating statistic |
Unit of measure |
Volume |
|
Waste mined |
tonnes |
81,390 |
|
Ore mined |
tonnes |
411,297 |
|
Ore processed |
tonnes |
416,627 |
|
Grade |
g/t gold |
2.95 |
|
Recovery |
% |
84.3 |
|
Gold produced |
ounces |
33,068 |
|
Gold sold |
ounces |
28,364 |
Other significant events during the financial year included:
In the first quarter of the financial year the Group made the initial drawdown under a US$25 million finance facility for the Simberi Project. As a condition precedent to the facility, the Group hedged 170,000 ounces of gold at an effective price of US$700 per ounce for delivery between March 2008 and December 2011. A Participating Gold Forward Option which enables the Group to participate in any price upside above US$700 per ounce was entered into in relation to 68,000 ounces of the hedging program.
In January 2008, the Company raised approximately $10.5 million through an institutional share placement to existing shareholders at a price of $0.72 per share. These funds were applied to project expenditure as an alternative to drawing fully on the financing facility.
In March 2008 the Group signed a Letter of Intent with Barrick Gold Corporation whereby Barrick will individually fund up to $20 million of exploration expenditure in order to gain a 70% interest in the exploration licence that encompasses Big Tabar and Tatau Islands. Upon execution of the Letter of Intent, Barrick subscribed for 17,647,059 fully paid ordinary shares in the Company at a price of $0.85 per share, injecting a total of $15 million into the Group.
In April 2008, the Company issued 1,000,000 fully paid ordinary shares to Kennecott Explorations (Australia) Ltd and 352,112 fully paid ordinary shares to Niugini Mining Limited as consideration for relinquishment of each Company's claw back right under the original purchase agreement to acquire the Simberi, Tatau and Tabar Islands projects.
During the financial year the Group continued to progress its exploration activities. In the first half of the year the group took delivery of four exploration drill rigs that were purchased at the end of the previous financial year. Since late 2007, exploration activities have focused on exploration drilling programmes that could lead to a revised resource and reserve statement to warrant an expansion of the newly commissioned oxide project. Assay results received to the end of the financial year from the Sorowar drilling program were very encouraging and indicated potential for further extensions of the Sorowar deposit to the south east, north west, and west. Drilling was also commenced north of the Pigiput deposit, Reinterpretation of the known mineralisation at Pigiput Ridge was followed by a geochemical soil survey resulting in a gold anomaly being defined to the east of the Pigiput oxide deposit. Initial results from the Pigiput East drill program have identified a new zone of gold mineralisation.
It is anticipated that the drilling program will be completed in the first quarter of the 2008/09 financial year and the results incorporated on a new resource estimation to be carried out during the second half of calendar 2008. Regional exploration was carried out within the exploration licence in the Tupinda area located on Tabar Island.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Capital Raisings
As noted in the Review of Operations, the Company completed the following capital raisings during the financial period:
$10.5 million through an institutional share placement to existing shareholders at a price of $0.72 per share in January 2008.
The issue to Barrick Gold Corporation of 17,647,059 fully paid ordinary shares in the Company at a price of $0.85 per share, injecting a total of $15 million into the Group.
In addition, the following options were exercised during the year and converted into fully paid ordinary shares:
2,325,600 listed options converted into 2,325,600 fully paid ordinary shares at $0.20 each.
770,000 unlisted options converted into 770,000 fully paid ordinary shares at $0.50 each.
2,040,000 unlisted options converted into 2,040,000 fully paid ordinary shares at $0.40 each.
600,000 unlisted options converted into 600,000 fully paid ordinary shares at $0.45 each.
Borrowings and hedge program
In the first quarter of the financial year the Group made an initial drawdown under a US$25 million finance facility for the Simberi Project. As a condition precedent to the facility, the Group hedged 170,000 ounces of gold at an effective price of US$700 per ounce for delivery between March 2008 and December 2011. A Participating Gold Forward Option which enables the Group to participate in any price upside above US$700 per ounce was entered into in relation to 68,000 ounces of the hedging program.
SUBSEQUENT EVENTS
On 7 August 2008, the Company completed a placement of 33,988,551 fully paid ordinary shares at $0.31 per share to raise approximately $10,536,431.
Mr Jeffrey J Moore resigned as a director on the 7 July 2008.
Except for the above, no other matter or circumstance has arisen since 30 June 2008 that has significantly affected, or may significantly affect:
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
A number of Group wide improvement processes are being assessed with the objective of having many of these implemented during the financial year ending 30 June 2009 as operations achieve a steady state of production:
Augment the scoping activities surrounding the potential for a significant expansion of the Oxide plant beyond its current capacity of 2.2 million tonnes per annum.
Commencement of various plant modifications to immediately optimise the existing configuration and to potentially ready the facility for future expansion initiatives.
It is anticipated that an update to the Group's reserve statement will be completed in later September to early October. The results of this update will influence the Group's decision whether to proceed with the proposed plant expansion program referred to above.
In the opinion of the Directors it may prejudice the interests of the Company to provide additional information in relation to likely developments in the operations of the Company and the expected results of those operations in subsequent financial periods.
OPTIONS
The number of options for ordinary shares on issue at the date of this report is 17,333,261 unlisted options. Options do not entitle the holder to receive dividends paid to ordinary shareholders, to vote at shareholder meetings or to prticipate in any future share issues.
Consolidated Income Statement
|
Consolidated |
Parent Entity |
|||||||
|
Note |
2008 |
2007 |
2008 |
2007 |
||||
|
$ |
$ |
$ |
$ |
|||||
|
Revenue |
6 |
23,393,798 |
- |
- |
- |
|||
|
Cost of sales |
7 |
(18,557,003) |
- |
- |
- |
|||
|
Gross profit |
4,836,795 |
- |
- |
- |
||||
|
Corporate expenses |
(3,081,159) |
(2,826,386) |
(3,081,159) |
(2,995,927) |
||||
|
Other operating expenses |
8 |
(4,827,049) |
(816,386) |
(1,323,148) |
(107,639) |
|||
|
Share based remuneration |
(3,590,530) |
(89,025) |
(3,590,530) |
(89,025) |
||||
|
Operating loss |
(6,661,943) |
(3,731,797) |
(7,994,837) |
(3,192,591) |
||||
|
Other expenses |
8 |
(2,252,388) |
- |
31,630 |
- |
|||
|
Other income |
6 |
31,688 |
5,292 |
- |
251,544 |
|||
|
Financial income |
6 |
533,365 |
1,845,894 |
439,322 |
2,365,560 |
|||
|
Financial expenses |
8 |
(1,189,685) |
- |
(79,264) |
- |
|||
|
Loss before tax |
(9,538,963) |
(1,880,611) |
(7,603,149) |
(575,487) |
||||
|
Income tax benefit/(expense) |
9 |
- |
- |
- |
- |
|||
|
Loss after tax attributable to members of the parent entity |
(9,538,963) |
(1,880,611) |
(7,603,149) |
(575,487) |
||||
|
Basic and diluted earnings per share (cents) |
23 |
(2.7) |
(0.7) |
|||||
The income statement is to be read in conjunction with the notes to the financial statements.
Consolidated Balance Sheet
|
|
Note |
Consolidated |
Parent Entity |
||||||
|
2008 $ |
2007 $ |
2008 $ |
2007 $ |
||||||
|
CURRENT ASSETS |
|||||||||
|
Cash and cash equivalents |
28a |
154,180 |
12,657,949 |
13,874 |
12,017,381 |
||||
|
Trade and other receivables |
10 |
1,758,073 |
81,277 |
330,529 |
8,449 |
||||
|
Inventories |
11 |
7,401,734 |
- |
- |
- |
||||
|
Derivative financial instruments |
12 |
314,212 |
- |
- |
- |
||||
|
Available for sale financial assets |
13 |
- |
474,419 |
- |
474,419 |
||||
|
Other assets |
14 |
531,032 |
85,745 |
6,138 |
85,745 |
||||
|
Total Current Assets |
10,159,231 |
13,299,390 |
350,541 |
12,585,994 |
|||||
|
NON-CURRENT ASSETS |
|||||||||
|
Trade and other receivables |
10 |
- |
- |
95,481,185 |
84,915,794 |
||||
|
Derivative financial instruments |
12 |
3,495,855 |
- |
- |
- |
||||
|
Investments in controlled entities |
30 |
- |
- |
31,675,293 |
5,988,206 |
||||
|
Available for sale financial assets |
13 |
1,185,074 |
1,447,200 |
1,185,074 |
1,447,200 |
||||
|
Property, plant and equipment |
15 |
130,034,534 |
68,834,971 |
325,762 |
347,806 |
||||
|
Exploration and evaluation expenditure |
16 |
10,406,786 |
30,002,238 |
- |
- |
||||
|
Total Non-Current Assets |
145,122,249 |
100,284,409 |
128,667,314 |
92,699,006 |
|||||
|
Total Assets |
155,281,480 |
113,583,799 |
129,017,855 |
105,285,000 |
|||||
|
CURRENT LIABILITIES |
|||||||||
|
Trade and other payables |
18 |
14,446,386 |
9,163,140 |
995,343 |
575,298 |
||||
|
Borrowings Derivative financial instruments Provisions |
19 12 20 |
8,561,286 6,972,407 365,819 |
- - - |
- - 184,849 |
- - - |
||||
|
Total Current Liabilities |
30,345,898 |
9,163,140 |
1,180,192 |
575,298 |
|||||
|
NON-CURRENT LIABILITIES |
|||||||||
|
Derivative financial instruments |
12 |
18,911,174 |
- |
- |
- |
||||
|
Borrowings |
19 |
2,739,755 |
- |
- |
- |
||||
|
Provisions |
20 |
2,584,870 |
2,424,861 |
- |
- |
||||
|
Total Non-Current Liabilities |
24,235,799 |
2,424,861 |
- |
- |
|||||
|
Total Liabilities |
54,581,697 |
11,588,001 |
1,180,192 |
575,928 |
|||||
|
NET ASSETS |
100,699,783 |
101,995,798 |
127,837,663 |
104,709,702 |
|||||
|
EQUITY |
|||||||||
|
Contributed equity |
21 |
133,686,704 |
105,794,580 |
133,686,704 |
105,794,580 |
||||
|
Reserves |
22 |
(16,956,167) |
2,693,009 |
5,509,423 |
2,670,437 |
||||
|
Accumulated losses |
(16,030,754) |
(6,491,791) |
(11,358,464) |
(3,755,315) |
|||||
|
TOTAL EQUITY |
100,699,783 |
101,995,798 |
127,837,663 |
104,709,702 |
|||||
The balance sheet is to be read in conjunction with the notes to the financial statements.
A copy of the Report and attached audit opinion is available for a period of one month, free of charge, from Unit 15, Level 1, 51-53 Kewdale Road, Welshpool, Western Australia 6106.
A copy can be viewed and downloaded on the Company's website - www.alliedgold.com.au.
For enquiries in connection with the above, please contact:
Mark Caruso
Chairman and Managing Director
Allied Gold Limited
+ 61 8 9353 3638
Roland Cornish
Beaumont Cornish Limited
020 7628 3396
Related Shares:
ALD.L