Final Results

1st Sep 2009 09:14



FOR IMMEDIATE RELEASE 1 September 2009

allied gold limited

("the Company")

Financial REPORT 2008/2009

Allied Gold Limited has lodged its audited Annual Financial Report ("Report") as required by the Australian Securities Exchange, for the period ended 30 June 2009 today. Extracts are set out below. 

Highlights

Allied Gold Limited consolidating a platform for growth.

EBITDA:  $14.59M

Net cash from Operations: $21.56M

Operating result post tax ($8.22M)*

* Note ($26.9M) of significant noncash items including D&A, share based payments, investment write downs.

Hedge book remaining at 30 June 2009: 54,583 oz 

Cash at Bank $21.6M

Operational focus on track:

1.11M oz Ore Reserves and 4.7M oz Ore Resources with life of mine on oxide deposit ~ 10+ years

Fast tracked exploration program in progress.

Scoping study on potential oxide plant expansion from 2.0M tpa to 3.0m tpa accelerated

Pre-feasibility on Sulphide development advancing.

DIRECTORS' REPORT

The Directors present their report, together with the financial report of Allied Gold Limited ("the Company") and its controlled entities ("Allied Gold") for the year ended 30 June 2009 ("the financial period").

DIRECTORS

The Directors of the Company in office at any time during or since the end of the financial period are named below. Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Mr Mark V Caruso 

Mr Gregory H Steemson

Mr Anthony Lowrie

Mr Frank Terranova (appointed 10 December 2008)

Mr Monty House (appointed 4 March 2009)

Mr Richard Johnson (resigned 3 October 2008)

INFORMATION ON DIRECTORS

Mr Mark V Caruso  Executive Chairman

Experience and expertise

Mr Caruso is a Director of Simto Australia Pty Ltd which is involved in mining, earthmoving and civil engineering construction earthworks. He is also a director of Mineral Commodities Limited (since September 2000). Former directorships of public listed companies in the last 3 years are CI Resources Limited (October 2003 until May 2008) and ORT Limited (August 2003 until August 2005).

Other current directorships

Non-executive director of Mineral Commodities Limited.

Former directorships in last 3 years

Non-executive director of CI Resources Limited from 2003 to 2008.

Non-executive director of ORT Limited from 2003 to 2005.

Special responsibilities

Executive Chairman of the Board.

Direct and indirect interests in shares and options

7,585,193 ordinary shares in Allied Gold Limited.

13,400,000 options over ordinary shares in Allied Gold Limited.

Mr Gregory H Steemson Non-Executive Director

Experience and expertise

Mr Steemson is a qualified geologist and geophysicist with an extensive background in exploration and the development and management of mining projects.

Other current directorships

Executive director of Mineral Commodities Limited.

Former directorships in last 3 years

Executive director of Sandfire Resources NL from 2003 to 2008.

Special responsibilities

Member of the Remuneration and Nomination Committee and the Audit , Compliance and Risk Committee.

Direct and indirect interests in shares and options

1,100,000 ordinary shares in Allied Gold Limited.

2,000,000 options over ordinary shares in Allied Gold Limited.

Mr Anthony Lowrie Non-Executive Director

Experience and expertise

Mr Lowrie has considerable corporate and finance experience. He was Chairman of ABN AMRO Asia Securities Limited having originally been a partner of Hoare Govett Ltd, which he joined in 1973.

Other current directorships

Non-executive director of Kenmare Resources PLC.

Non-executive director of Edinburgh Dragon Fund.

Former directorships in last 3 years

ABN AMRO Bank Limited

Non-executive director of JD Wetherspoon PLC.

Non-executive director of Quadrise Fuels International.

Non-executive director of The Thai Euro Fund.

Special responsibilities

Member of Remuneration and Nomination Committee.

Direct and indirect interests in shares and options

1,635,460 ordinary shares in Allied Gold Limited.

2,000,000 options over ordinary shares in Allied Gold Limited.

Mr Monty House Non-executive Director (appointed 4 March 2009)

Experience and expertise

Mr House is a member of the Australian Institute of Company Directors and was previously a Member of Parliament in Western Australia. Mr House was elected as Deputy Leader of the National Party in 1988. 

Other current directorships

Chairman of Landgate Western Australia.

Director of Latent Petroleum.

Former directorships in last 3 years

Nil

Special responsibilities

Chairman of Audit, Compliance and Risk Committee.

Direct and indirect interests in shares and options

10,000 ordinary shares in Allied Gold Limited.

Mr Frank Terranova  Executive Director and Chief Financial Officer (appointed as a director 10 December 2008)

Experience and expertise

Mr Terranova is a chartered accountant with extensive experience in corporate finance and financial risk management predominantly within the mining and manufacturing industries. He has held many senior finance positions for various ASX listed corporations.

Other current directorships

Nil.

Former directorships in last 3 years

Nil.

Special responsibilities

Chief Financial Officer.

Direct and indirect interests in shares and options

1,000 ordinary shares in Allied Gold Limited.

6,250,000 options over ordinary shares in Allied Gold Limited.

COMPANY SECRETARY

Mr Peter Torre was the Company Secretary of Allied Gold Limited from the beginning of the reporting period until the date of this report.

Mr Torre is the principal of the corporate advisory firm Torre Corporate which provides corporate secretarial services to a range of listed companies. Prior to establishing Torre Corporate, Mr Torre was a partner of an internationally affiliated firm of Chartered Accountants working within its Corporate services Division for over 9 years where he also held the position of Chairman of the National Corporate Services Committee. Mr Torre holds a Bachelor of Business, is a Chartered Accountant, a Chartered Secretary and is a member of the Institute of Company Directors. 

Direct and indirect interests in shares and options

20,000 ordinary shares in Allied Gold Limited.

2,000,000 options over ordinary shares in Allied Gold Limited.

DIRECTORS' MEETINGS

The number of directors' meetings and number of meetings attended by each of the Directors of the Company during the financial period under review was:

	Board of Directors
	Meetings held*	Meetings attended
Mark Caruso	8	8
Greg Steemson	8	5
Anthony Lowrie	8	8
Richard Johnson	3	3
Frank Terranova	3	3
Monty House	2	2

* Reflects the number of meetings held during the time the Director held office during the financial period.

The Remuneration and Nomination Committee did not meet during the financial period.

The members of the Audit, Compliance and Risk Committee were appointed in June 2009. The Audit, Compliance and Risk Committee did not meet during the financial period.

PRINCIPAL ACTIVITIES

The principal activities of Allied Gold during the course of the financial period were the mining and processing of gold and exploration for gold. These activities mainly involved Allied Gold's wholly owned Simberi Gold Oxide Project, located in offshore Papua New Guinea. 

 RESULTS

The consolidated operating loss after tax was $8,226,666 (2008: loss $9,538,963).

DIVIDENDS PAID OR RECOMMENDED

No dividends were paid or declared during or in the 2009 financial year (2008: nil).

REVIEW OF OPERATIONS

The principal focus of the company over the year was the mining and processing of gold, and exploration for gold in Papua New Guinea.

Key operating statistics for the mining and processing activities for the financial year are summarised in the table below:

Key operating statistic	Unit of measure	Volume
Waste mined	tonnes	199,746
Ore mined	tonnes	1,708,765
Ore processed	tonnes	1,654,149
Grade	grams of gold / tonne	1.64
Recovery	%	83.2
Gold produced	ounces	72,609
Gold sold	ounces	69,886

Significant events during the financial year included:

In June 2009 the Group produced its 100,000th ounce of gold at its Simberi Island Gold Oxide Project since commencing production in February 2008.

The Group announced a 45% increase in total Simberi Island Measured, Indicated and Inferred Resources to 4.7 million ounces of gold and 10 million ounces of silver, comprising oxide gold resources of 1.4 million ounces and sulphide gold resources of 3.3 million ounces.

The Group announced an extension of 437,000 ounces to its Ore Reserve extending the remaining mine life to over ten years.

A Sulphide pre-feasibility study was commenced with a view to underpinning an expansion of the production profile by up to 100,000 ounces per annum by December 2011.

In accordance with its AUD$20 million farm-in to Allied Gold's exploration licence over Big Tabar and Tatau Islands, Barrick Gold commenced exploration activities in August 2008.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

Capital Raisings

The Company completed the following capital raisings during the financial period:

In August 2008, Allied Gold successfully raised $10.5 million through a placement of shares with sophisticated investors, including its joint venture partner Barrick Gold Corporation.

In February 2009, Allied Gold successfully raised $30.7 million through a placement of shares with sophisticated investors adding additional quality institutional investors to its share register.

Borrowings and hedge program

As noted in the Review of Operations, the following significant developments occurred in relation to the Group's borrowing and hedge program in the year ended 30 June 2009:

The Group's USD25 million project financing facility was retired 21 months ahead of schedule.

The Group's hedge book was restructured to reduce its duration by approximately 12 months. Further pre-deliveries into the hedge book have reduced the residual hedge book to less than 55,000 ounces as at 30 June 2009.

SUBSEQUENT EVENTS

No matter or circumstance has arisen since 30 June 2009 that has significantly affected, or may significantly affect:

 

(a) the Group's operations in future financial years; or

 

(b) the results of those operations in future financial years; or

 

(c) the Group's state of affairs in future financial years.

FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES

With the commissioning and ramp-up phases of the initial Oxide operation effectively completed, and ongoing exploration success, Allied continues to assess the viability of an expansion of its existing Simberi oxide plant. Significant potential productivity benefits are possible with a rescaling of the plant and this is currently being scoped. 

The Group is rapidly advancing pre-feasibility studies to exploit Simberi's extensive sulphide gold resources. The Sulphide Expansion Project is anticipated to increase Simberi's total annual production to approximately 200,000 ounces by December 2011.

Accelerated investment in exploration through the mobilisation of an additional drill rig and associated support equipment, bringing the total rigs on site to five, is expected to result in further substantial adjustments to the Resource and Reserve position during the December 2009 quarter.

Allied Gold continues to assess emerging opportunities within the sector that may ultimately complement its existing strong organic growth profile.

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.

 

SCHEDULE OF MINING TENEMENTS

Mining Tenements currently held by the Group are:

The Simberi Mining Joint Venture owns ML136 covering the eastern portion of Simberi Island, the northern most  island of the Tabar group, off New Ireland, Papua New Guinea. The Tabar Exploration Joint Venture owns EL609 which covers all of Tatau and Tabar Islands, as well as the ground on Simberi Island not covered by ML136.

 

ENVIRONMENTAL REGULATIONS

In the course of its normal mining and exploration activities the Group adheres to environmental regulations imposed upon it by the various regulatory authorities, particularly those regulations relating to ground disturbance and the protection of rare and endangered flora and fauna. The Group has complied with all material environmental requirements up to the date of this report.

The Group is in the process of assessing its reporting obligations under the Energy Efficiency Opportunities Act 2006 and the National Greenhouse and Energy Reporting Act 2007. 

INSURANCE OF DIRECTORS AND OFFICERS

During the year, the Company has paid an insurance premium in respect of a contract indemnifying the Company's directors and officers. This contract prohibits disclosure of the nature of the liability and the amount of the premium.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those proceedings

The Company was not a party to any such proceedings during the year.

OTHER INFORMATION

The registered office and principal place of business of the Company is Unit B9, 431 Roberts Road, Subiaco, Western Australia, 6008.

		Consolidated				Parent Entity
	Note	2009		2008		2009		2008
		$		$		$		$
Revenue	6	77,467,668		23,393,798		-		-
Cost of sales	7	(66,436,649)		(20,264,174)		-		-
Gross profit		11,031,019		3,129,624		-		-
Unrealised losses on derivatives		(21,828)	-	-		-		-
Corporate expenses		(7,545,907)		(4,404,307)		(6,498,702)		(4,404,307)
Share based remuneration	27(b)	(4,130,120)		(3,590,530)		(4,130,120)		(3,590,530)
Impairment of available for sale assets		(1,214,402)		-		(1,214,402)		-
Other expenses		(3,426,778)		(4,049,118)		(221,556)		31,630
Other income	6	149,937		31,688		97,361		-
Financial income	6	327,760		533,365		326,002		439,322
Financial expenses	8	(3,396,347)		(1,189,685)		(1,663)		(79,264)
Loss before tax		(8,226,666)		(9,538,963)		(11,643,080)		(7,603,149)
Income tax benefit/(expense)	9	-		-		-		-
Loss after tax attributable to members of the parent entity		(8,226,666)		(9,538,963)		(11,643,080)		(7,603,149)
Basic earnings per share (cents) Diluted earnings per share (cents)	23(a) 23(b)	(1.92) (1.92)		(2.70) (2.70)

The income statements are to be read in conjunction with the notes to the financial statements.

	Note	Consolidated				Parent Entity
		2009 $		2008 $		2009 $		2008 $
CURRENT ASSETS
Cash and cash equivalents	28(a)	20,529,979		154,180		15,629,318		13,874
Trade and other receivables	10	800,494		1,758,073		117,365		330,529
Inventories	11	14,269,497		7,401,734		-		-
Derivative financial instruments	12	2,025,000		314,212		-		-
Other assets	14	246,792		531,032		35,213		6,138
Total Current Assets		37,871,762		10,159,231		15,781,896		350,541
NON-CURRENT ASSETS
Trade and other receivables	10	-		-		112,897,819		95,481,185
Derivative financial instruments	12	686,759		3,495,855		-		-
Available for sale financial assets	13	348,974		1,185,074		348,974		1,185,074
Property, plant and equipment	15	145,861,709		130,034,534		259,020		325,762
Exploration and evaluation expenditure	16	11,115,743		10,406,786		-		-
Investments in controlled entities	30	-		-		31,675,293		31,675,293
Total Non-Current Assets		158,013,185		145,122,249		145,181,106		128,667,314
Total Assets		195,884,947		155,281,480		160,963,002		129,017,855
CURRENT LIABILITIES
Trade and other payables	18	20,683,026		14,446,386		758,604		995,343
Borrowings	19	2,094,483		8,561,286		-		-
Derivative financial instruments	12	10,197,958		6,972,407		-		-
Provisions	20	491,709		365,819		194,773		184,849
Total Current Liabilities		33,467,176		30,345,898		953,377		1,180,192
NON-CURRENT LIABILITIES
Borrowings	19	3,845,885		2,739,755		-		-
Derivative financial instruments	12	5,748,977		18,911,174		-		-
Provisions	20	2,782,426		2,584,870		-		-
Total Non-Current Liabilities		12,377,288		24,235,799		-		-
Total Liabilities		45,844,464		54,581,697		953,377		1,180,192
NET ASSETS		150,040,483		100,699,783		160,009,625		127,837,663
EQUITY
Contributed equity	21	173,098,363		133,686,704		173,098,363		133,686,704
Reserves	22	1,199,540		(16,956,167)		9,912,806		5,509,423
Accumulated losses	22	(24,257,420)		(16,030,754)		(23,001,544)		(11,358,464)
TOTAL EQUITY		150,040,483		100,699,783		160,009,625		127,837,663

The balance sheets are to be read in conjunction with the notes to the financial statements.

	Issued Capital	Accumulated Losses	Share-based payments reserve	Foreign exchange translation reserve	Available for sale investments revaluation reserve	Cash Flow Hedging Reserve	Total
Consolidated	$	$	$	$	$	$	$
At 1 July 2007	105,794,580	(6,491,791)	1,912,347	22,572	758,090	-	101,995,798
Revaluation of investments available for sale	-	-	-	-	(751,544)	-	(751,544)
Translation of foreign controlled entities	-	-	-	(414,648)	-	-	(414,648)
Changes in the fair value of cash flow hedges - gross	-	-	-	-	-	(23,225,075)	(23,225,075)
Transfer to net profit - gross	-	-	-	-	-	1,151,561	1,151,561
Total expense  recognised directly in equity during the year	-	-	-	(414,648)	(751,544)	(22,073,514)	(23,239,706)
Loss for the period	-	(9,538,963)	-	-	-	-	(9,538,963)
Total recognised income and expense during the year	-	(9,538,963)	-	(414,648)	(751,544)	(22,073,514)	(32,778,669)
Transactions with equity holders in their capacity as equity holders
Cost of equity raising	(543,123)	-	-	-	-	-	(543,123)
Share-based payments	-	-	3,590,530	-	-	-	3,590,530
Share placements	26,514,770	-	-	-	-	-	26,514,770
Conversion of options	1,920,477	-	-	-	-	-	1,920,477
At 30 June 2008	133,686,704	(16,030,754)	5,502,877	(392,076)	6,546	(22,073,514)	100,699,783
Changes in fair value of investments available for sale	-	-	-	-	129,843	-	129,843
Translation of foreign controlled entities	-	-	-	(252,552)	-	-	(252,552)
Changes in the fair value of cash flow hedges	-	-	-	-	-	6,520,145	6,520,145
Transfer to net profit	-	-	-	-	-	7,484,731	7,484,731
Total income and expense recognised directly in equity during the year	-	-	-	(252,552)	129,843	14,004,876	13,882,167
Loss for the period	-	(8,226,666)	-	-	-	-	(8,226,666)
Total recognised income and expense during the year	-	(8,226,666)	-	(252,552)	129,843	14,004,876	5,655,501
Transactions with equity holders in their capacity as equity holders
Cost of equity raising	(1,949,292)	-	-	-	-	-	(1,949,292)
Share-based payments	-	-	4,273,540	-	-	-	4,273,540
Share placements	41,360,951	-	-	-	-	-	41,360,951
At 30 June 2009	173,098,363	(24,257,420)	9,776,417	(644,628)	136,389	(8,068,638)	150,040,483

 

The above statements of changes in equity are to be read in conjunction with the notes to the financial statements.

  

	Issued Capital	Accumulated Losses	Share-based payments reserve	Available for sale investments revaluation reserve	Total
Parent entity	$	$	$	$	$
At 1 July 2007	105,794,580	(3,755,315)	1,912,347	758,090	104,709,702
Change in fair value of investments available for sale	-	-	-	(751,544)	(751,544)
Total income recognised directly in equity during the year	-	-	-	(751,544)	(751,544)
Loss for the period	-	(7,603,149)	-	-	(7,603,149)
Total recognised income and expense during the year	-	(7,603,149)	-	(751,544)	(8,354,693)
Transactions with equity holders in their capacity as equity holders
Cost of equity raising	(543,123)	-	-	-	(543,123)
Share-based payments	-		3,590,530	-	3,590,530
Share placements	26,514,770	-	-	-	26,514,770
Conversion of options	1,920,477	-	-	-	1,920,477
At 30 June 2008	133,686,704	(11,358,464)	5,502,877	6,546	127,837,663
Change in fair value of investments available for sale	-	-	-	129,843	129,843
Total income recognised directly  in equity during the year	-	-	-	129,843	129,843
Loss for the period	-	(11,643,080)	-	-	(11,643,080)
Total recognised income and expense during the year	-	(11,643,080)	-	129,843	(11,513,236)
Transactions with equity holders in their capacity as equity holders
Cost of equity raising	(1,949,292)	-	-	-	(1,949,292)
Share-based payments	-	-	4,273,540	-	4,273,540
Share placements	41,360,951	-	-	-	41,360,951
At 30 June 2009	173,098,363	(23,001,544)	9,776,417	136,389	160,009,625

The above statements of changes in equity are to be read in conjunction with the notes to the financial statements.

	Note	Consolidated				Parent Entity
		2009 $		2008 $		2009 $				2008 $
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers		78,160,874		21,748,690		-			-
Proceeds from settlement of derivatives		5,122,882		-		-			-
Payments to suppliers & employees		(61,115,934)		(21,374,990)		(6,623,767)			(3,614,372)
Interest received		327,760		533,365		326,002			439,322
Interest paid		(932,382)		(1,189,685)		-			(79,264)
Net cash generated by / (used in ) operating activities	28(b)	21,563,200		(282,620)		(6,297,765)		(3,254,314)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equity investments		(241,200)		(14,999)		(241,200)		(14,999)
Purchase of plant & equipment		(16,246,475)		(40,223,122)		(93,700)		(103,840)
Development expenditure		(7,205,878)		-		-		-
Exploration and evaluation expenditure		(708,957)		(13,075,876)		-		-
Funds advanced to controlled entities		-		-		(17,416,634)		(35,265,436)
Net cash used in investing activities		(24,402,510)		(53,313,997)		(17,751,534)		(35,384,275)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issue of securities		41,575,365		26,891,855		41,575,365		26,891,855
Costs of raising equity capital		(1,766,744)		(256,773)		(1,766,744)		(256,773)
Proceeds from borrowings		2,900,000		23,393,561		-		-
Finance lease payments		(3,337,264)		-		-		-
Repayments of borrowings		(16,407,977)		(8,935,838)		-		-
Net cash generated by financing activities		22,963,380		41,092,805		39,808,621		26,635,082
Net increase / (decrease) in cash and cash equivalents		20,124,070		(12,503,812)		15,759,322		(12,003,507)
Cash and cash equivalents at beginning of financial year		154,180		12,657,949		13,874		12,017,381
Effects of exchange rate changes on the balance of cash and cash equivalents		251,729		43		(143,878)		-
Cash and cash equivalents at end of financial year	28(a)	20,529,979		154,180		15,629,318		13,874

The cash flow statement is to be read in conjunction with the notes to the financial statements.

The full version of the ASX announcement, including the unqualified Audit Opinion, is available from the Company's website, www.allied.com.au and as a link to the announcement:

http://www.rns-pdf.londonstockexchange.com/rns/2953Y_-2009-9-1.pdf

For more information: 

Mark Caruso Executive Chairman	T:+61 7 93252 5911
Roland Cornish Beaumont Cornish Limited	T: +44 (0) 20 7628 3396

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