23rd Sep 2009 07:00
|
AIM: GMA |
23 September 2009 |
GMA RESOURCES Plc
("GMA" or "the Company")
Half-Yearly Results for the six months ended 30 June 2009
CHIEF EXECUTIVE OFFICERS STATEMENT
It is my pleasure to provide you with an update on the operating, exploration and financial results of GMA Resources plc for the six months ended 30 June 2009.
Financial Results & Liquidity
The Company generated a net profit for the period of £1,096,000 compared to a loss of £3,986,000 for the same period in 2008 resulting in earnings of 0.29p per share, compared to a loss of 1.1p per share for the same period in 2008. While the profit is a first for GMA since its inception, the Company and ENOR Spa are still suffering from shortages of working capital. These cash flow problems were due to the lack of supply of explosives and also because the Company is building up inventory levels at Amesmessa to counter the long and complicated supply chain. The supply chain and bureaucratic problems in Algeria continue to hinder GMA's production and resultant income levels. The directors of ENOR Spa directed its management to reduce costs not directly attributable to production, which helped during the six month period, to reduce the cost per ounce figures to USD$435 and total cost of USD$535 including interest at ENOR level and depreciation.
The increased market price of gold has partially offset the impact of lower gold production volumes. The Company realised average sales revenue of USD$914.29 per ounce for the first six months of 2009, a significant increase on the budgeted sales price of USD$802 for the period. Prices have risen substantially, especially in the third quarter of 2009 and the short and medium term outlook for gold prices remains strong.
In the 2008 annual report, issued in June 2009, it was discussed that the Company would be required to raise additional finance in the second half of the year to deal with working capital shortages at both GMA and ENOR level. Management is currently exploring a number of options and opportunities and will report back to shareholders as soon as a definitive arrangement is secured.
While worldwide equity markets still appear to be recovering, the Board believe that the appetite for junior gold companies with production is picking up. The Board is confident in its ability to organise sufficient funds for continuity of operations and to start the five year plan recently approved by Sonatrach and GMA for further exploration and expansion of production. Notwithstanding this, the critical short term issue is still to improve upon the supply chain to Amesmessa in order to allow operations to achieve better results.
A summary of operating and financial results for the first six months of 2009 is presented below:
|
6 months to |
6 months to |
Year to |
|
|
30 June 2009 |
30 June 2008 |
31 December 2008 |
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
Gold Production (ounces) |
18,637 |
10,536 |
21,156 |
|
Sales revenue (£'000) |
11,973 |
4,320 |
7,798 |
|
Earnings/(Loss) before tax (£'000) |
1,096 |
(3,986) |
(6,509) |
|
Earnings/(Loss) per share - basic (pence) |
0.29p |
(1.1p) |
(1.81p) |
Production
The mine produced a total of 18,637 ounces of gold in the first half of 2009, compared with 10,620 ounces in the second half of 2008. Gold sales for the six month period were 20,918 ounces gold. Total ounces of gold remaining on the pads as at 30 June were approximately 58,000 ounces. At current recovery rates we will be able to recuperate approximately 30,000 ounces from leaching over the next year. The other ounces will remain on the pad for processing sometime in the future when the Company is in a position to employ other technology such as carbon-in-leach ("CIL"). Gold sales for the first half of the year averaged USD$914.29 against a budgeted price of USD$802.
It is clear from the key performance indicators table below that we are experiencing much higher grade ore than had been modelled in the past, as we are 174 per cent. ahead of expectations on the amount of gold mined from high grade sources. As you would expect, crushed ore grade was over budget for the period being 5.33 grams per ton ("gpt") average grade against a budget of 4.15 gpt or 29 per cent. over budget on grade.
Total tonnes mined were below budget by 11 per cent. for ore and 30 per cent. for waste, with blast hole drilling being 35 per cent. under budget meters. The primary reason for this shortfall is the availability of equipment for operations. Spare parts shortages plagued operations for mining and drilling, thus the stripping was materially under budget.
The carbon columns have been worked to planned capacity, however the solution grade has been 30 per cent. under budget at 1.0 parts per million ("ppm") against a budget of 1.43ppm.
The problem with the solution grade is twofold. We had anticipated a recovery rate from the heap at 72 per cent. based upon a 120 day leaching test period completed for the feasibility study. Our actual recovery rate was approximately 42 per cent. for the six month period. We have not been able to leach as many panels on the pad as planned, nor are we able to leave ore under leach for as long as we had planned due to lack of parts. Thus we leach each area for a shorter period to obtain the gold from the early phase of the leach cycle only. The other issue relates to crush size. With the crusher spares problems we have not been able to crush to the deemed optimum size for this leaching process. That causes the grade of solution to be lower, as more gold is being left on the pads for future recovery.
An ancillary issue experienced related to getting higher grades of gold from the mine than planned. The gold mined was often nuggetty in nature and did not dissolve as well as the finer gold which we had anticipated, based upon the bulk samples analyzed during the feasibility phase. While it is positive that the mine is finding higher grade gold than anticipated, the effect on the heap leach recovery is to lower the recovered percentage. This gold is not lost, but will eventually be recovered by longer leach periods or treatment of the leach pads by conventional CIL process.
|
Key Performance Indicators |
Unit |
Q2, 2009 |
Q2, Budget |
% Var |
6 Month Actual |
6 Month Budget |
% Var |
|
Total Gold Production |
kg |
271.10 |
460.00 |
-41% |
576.80 |
839.50 |
-31% |
|
Total Gold Production |
oz |
8,715.9 |
14,789.0 |
-41% |
18,544.1 |
26,989.9 |
-31% |
|
High Grade Ore Tonnes |
dmt |
17,580 |
8,618 |
104% |
37,770 |
16,162 |
134% |
|
High Grade Ore Grade |
g/t |
12.43 |
11.03 |
13% |
12.97 |
11.07 |
17% |
|
High Grade Ore kg Au |
kg |
218 |
95 |
130% |
490 |
179 |
174% |
|
Heap Leach Ore Tonnes |
dmt |
158,220 |
163,446 |
-3% |
309,420 |
313,608 |
-1% |
|
Heap Leach Ore Tonnes |
g/t |
3.02 |
3.80 |
-21% |
3.13 |
3.83 |
-18% |
|
Marginal Ore Tonnes |
dmt |
25,530 |
38,966 |
-34% |
64,890 |
76,413 |
-15% |
|
Marginal Ore Grade ex-Mine |
g/t |
0.58 |
0.67 |
-13% |
0.60 |
0.68 |
-11% |
|
Waste Tonnes Mined |
dmt |
1,402,740 |
2,060,815 |
-32% |
2,901,390 |
4,167,862 |
-30% |
|
Total Mined Ex-Pit |
dmt |
1,604,070 |
2,271,846 |
-29% |
3,313,470 |
4,574,045 |
-28% |
|
Total Mined Volume |
bcm |
594,100 |
835,531 |
-29% |
1,229,594 |
1,683,812 |
-27% |
|
Strip Ratio |
|
8.12 |
12.20 |
-33% |
8.54 |
12.87 |
-34% |
|
Blasthole Drilling |
mtr |
51,228 |
92,373 |
-45% |
121,435 |
186,792 |
-35% |
|
Ore Crushed Heap Leach |
dmt |
123,281 |
161,621 |
-24% |
260,608 |
318,916 |
-18% |
|
Ore Stacked to Leach Pad |
dmt |
123,281 |
161,621 |
-24% |
262,204 |
318,916 |
-18% |
|
Crushed Ore Grade |
g/t |
5.07 |
4.16 |
22% |
5.33 |
4.15 |
29% |
|
Gold Stacked Heap Leach |
Kg |
624.4 |
672.8 |
-7% |
1,398.1 |
1,322.8 |
6% |
|
Solution Tonnes Processed |
m3 |
301,862 |
294,840 |
2% |
590,688 |
586,440 |
1% |
|
Solution Grade Heap Leach |
ppm |
0.97 |
1.57 |
-38% |
1.000 |
1.43 |
-30% |
|
Gold Extraction Carbon Columns |
% |
98.1 |
99.3 |
-1% |
98.7 |
99.3 |
-1% |
Exploration
Michel Cormier QP was appointed Head of Exploration by the Company during the period. Michael has significant exploration experience which will assist him in leading the considerable exploration programs that have been mandated to him by the Board of ENOR and also by the parameters of the recently approved 5 year plan for ENOR. The Company has also decided to convert company resources to the Canadian 43-101 standard to make us comparable to other international mining companies who require either the Australian, South African or Canadian standards for quality and reporting. We chose the Canadian standard as it is available in its entirety for training purposes in French, while the other two are only available in unilingual English.
The Company's exploration drill rig which was purchased and customised in 2008, is now ready for shipping to Algeria. We are awaiting official Customs clearance for taxes and duties before shipping the drill, service truck, consumables and spares to Algeria. Once the drill is in place, the plan will be to drill promising targets within range of the Amesmessa mine to prolong the life of this operation and to expand current plant parameters. We are also about to start a core drilling program of between 2000-4000 meters. All drilling will be aimed at the Amesmessa area for the next 12 months as we have set a substantial goal of a 43-101 resource of over 1,000,000 ounces for this deposit.
We thank our shareholders, employees and partners for their continued support.
Douglas Perkins
Chief Executive Officer
Enquiries:
|
GMA Resources Plc Douglas Perkins |
Tel: +1 514 806 6788 |
|
John East & Partners Limited, a subsidiary of Merchant Securities plc (Nominated Adviser) Bidhi Bhoma |
Tel: +44 (0) 20 7628 2200 |
Notes to Editors:
GMA owns a controlling 52 per cent stake in ENOR spa ("ENOR"), the Algerian based operating company for the Amesmessa project, with the remainder owned by Sonatrach, the Algerian state-owned oil and gas company.
ENOR holds the exploitation authorization to the Tirek-Amesmessa property, an area of some 1,417 km2, located approximately 450km south west of the city of Tamanrasset, in southern Algeria. Amesmessa is an open pit heap leach gold mine located in the extreme south of the permit area. The Tirek gold mine is located in the northern third of the exploration permit area, some 60 km north of Amesmessa. Research to date suggests that the Zita Zone, which lies between Tirek and Amesmessa, offers considerable potential for the development of additional prospects amenable to open-pit mining. GMA plans to expand upon resources outside of the major 80km north/south Tirek-Amesmessa fault and other exploration targets on the property.
CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2009
|
Notes |
6 months to |
6 months to |
Year to |
|
|
30 June |
30 June |
31 December |
||
|
2009 |
2008 |
2008 |
||
|
£'000s |
£'000s |
£'000s |
||
|
(unaudited) |
(unaudited) |
(audited) |
||
|
Continuing operations |
||||
|
Revenue |
11,973 |
4,320 |
7,798 |
|
|
Cost of sales |
(9,030) |
(6,240) |
(10,929) |
|
|
Gross profit/(loss) |
2,943 |
(1,920) |
(3,131) |
|
|
Finance income |
- |
40 |
52 |
|
|
Administrative costs |
(411) |
(647) |
(1,022) |
|
|
Finance costs |
(1,436) |
(1,459) |
(2,408) |
|
|
Profit/(Loss) before tax |
1,096 |
(3,986) |
(6,509) |
|
|
Income tax expense |
- |
- |
- |
|
|
Profit/(Loss) for the period |
1,096 |
(3,986) |
(6,509) |
|
|
Attributable to: |
||||
|
Equity holders of the parent |
1,096 |
(3,986) |
(6,509) |
|
|
1,096 |
(3,986) |
(6,509) |
||
|
Earnings/(Loss) per share: |
||||
|
Basic earnings/(loss) per share |
2 |
0.29p |
(1.1p) |
(1.81p) |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2009
|
6 months to |
6 months to |
Year to |
||
|
30 June |
30 June |
31 December |
||
|
2009 |
2008 |
2008 |
||
|
£'000s |
£'000s |
£'000s |
||
|
(unaudited) |
(unaudited) |
(audited) |
||
|
Profit/(Loss) for the period |
1,096 |
(3,986) |
(6,509) |
|
|
Exchange differences on translation of foreign |
(2,569) |
(50) |
3,562 |
|
|
operations |
||||
|
Total comprehensive income for the period |
(1,473) |
(4,036) |
(2,947) |
|
|
attributable to equity holders of the parent |
||||
CONDENSED CONSOLIDATED BALANCE SHEET FOR THE SIX MONTHS ENDED 30 JUNE 2009
|
6 months to |
6 months to |
Year to |
|||
|
30 June |
30 June |
31 December |
|||
|
2009 |
2008 |
2008 |
|||
|
£'000s |
£'000s |
£'000s |
|||
|
ASSETS |
|||||
|
Non-current assets |
|||||
|
Property, plant and equipment |
36,880 |
37,680 |
45,942 |
||
|
Other intangible assets |
20 |
32 |
23 |
||
|
36,900 |
37,712 |
45,965 |
|||
|
Current assets |
|||||
|
Inventories |
14,864 |
8,076 |
14,644 |
||
|
Trade and other receivables |
17,727 |
8,748 |
9,787 |
||
|
Cash and cash equivalents |
1,445 |
1,779 |
1,052 |
||
|
34,036 |
18,603 |
25,483 |
|||
|
Total assets |
70,936 |
56,315 |
71,448 |
||
|
LIABILITIES |
|||||
|
Current liabilities |
|||||
|
Trade and other payables |
19,342 |
9,552 |
14,368 |
||
|
Short-term borrowings |
2,243 |
3,993 |
3,065 |
||
|
Short-term finance lease |
6,397 |
5,453 |
7,834 |
||
|
Loan from minority shareholder |
- |
9,949 |
- |
||
|
27,982 |
28,917 |
25,267 |
|||
|
Non-current liabilities |
|||||
|
Long-term borrowing |
7,206 |
4,665 |
8,402 |
||
|
Long-term finance lease |
1,135 |
2,963 |
2,009 |
||
|
Unsecured convertible loan stock |
7,175 |
5,854 |
5,441 |
||
|
Loan from minority shareholder |
16,930 |
5,365 |
19,738 |
||
|
Total non-current liabilities |
32,446 |
18,847 |
35,590 |
||
|
Total liabilities |
60,428 |
47,764 |
60,857 |
||
|
Net assets |
10,508 |
8,551 |
10,591 |
||
|
EQUITY |
|||||
|
Equity attributable to equity holders of |
|||||
|
the parent |
|||||
|
Share capital |
4,263 |
3,544 |
3,680 |
||
|
Share premium account |
25,400 |
23,810 |
24,597 |
||
|
Other reserves - share options |
451 |
420 |
448 |
||
|
Other reserves |
923 |
923 |
923 |
||
|
Cumulative currency translation reserve |
80 |
(964) |
2,648 |
||
|
Retained earnings |
(20,609) |
(19,182) |
(21,705) |
||
|
10,508 |
8,551 |
10,591 |
|||
|
Minority interest |
- |
- |
- |
||
|
Total equity |
10,508 |
8,551 |
10,591 |
||
CONSDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2009
|
Share |
|||||||||
|
Share |
premium |
Share |
Other |
Currency |
Retained |
Minority |
Total |
||
|
capital |
account |
options |
reserves |
reserve |
earnings |
Total |
interest |
equity |
|
|
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
|
|
Balance at 31 December 2007 |
3,544 |
23,810 |
330 |
923 |
(914) |
(15,196) |
12,497 |
- |
12,497 |
|
Changes in equity for first half of 2008 |
|||||||||
|
Exchange differences on translation of foreign operations |
- |
- |
- |
- |
(50) |
- |
(50) |
- |
(50) |
|
Net income recognised directly in equity |
- |
- |
- |
- |
(50) |
- |
(50) |
- |
(50) |
|
Loss for the period |
- |
- |
- |
- |
- |
(3,986) |
(3,986) |
- |
(3,986) |
|
Total recognised income and expense for the period |
- |
- |
- |
- |
(50) |
(3,986) |
(4,036) |
- |
(4,036) |
|
Share based payment charges |
- |
- |
90 |
- |
- |
90 |
- |
90 |
|
|
Balance at 30 June 2008 |
3,544 |
23,810 |
420 |
923 |
(964) |
(19,182) |
8,551 |
- |
8,551 |
|
Share |
|||||||||
|
Share |
premium |
Share |
Other |
Currency |
Retained |
Minority |
Total |
||
|
capital |
account |
options |
reserves |
reserve |
earnings |
Total |
interest |
equity |
|
|
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
|
|
Balance at 31 December 2007 |
3,544 |
23,810 |
330 |
923 |
(914) |
(15,196) |
12,497 |
- |
12,497 |
|
Changes in equity for 2008 |
|||||||||
|
Exchange differences on translation of foreign operations |
- |
- |
- |
- |
3,562 |
- |
3,562 |
- |
3,562 |
|
Net income recognised directly in equity |
- |
- |
- |
- |
3,562 |
- |
3,562 |
- |
3,562 |
|
Loss for the period |
- |
- |
- |
- |
- |
(6,509) |
(6,509) |
- |
(6,509) |
|
Total recognised income and expense for the period |
- |
- |
- |
- |
3,562 |
(6,509) |
(2,947) |
- |
(2,947) |
|
Issue of share capital |
136 |
819 |
- |
- |
- |
955 |
- |
955 |
|
|
Share issue costs |
- |
(32) |
- |
- |
- |
- |
(32) |
- |
(32) |
|
Share based payment charges |
- |
- |
118 |
- |
- |
- |
118 |
- |
118 |
|
Balance at 31 December 2008 |
3,680 |
24,597 |
448 |
923 |
2,648 |
(21,705) |
10,591 |
- |
10,591 |
|
Share |
|||||||||
|
Share |
premium |
Share |
Other |
Currency |
Retained |
Minority |
Total |
||
|
capital |
account |
options |
reserves |
reserve |
earnings |
Total |
interest |
equity |
|
|
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
£'000s |
|
|
Balance at 31 December 2008 |
3,680 |
24,597 |
448 |
923 |
2,648 |
(21,705) |
10,591 |
- |
10,591 |
|
Changes in equity for 2009 |
|||||||||
|
Exchange differences on translation of foreign operations |
- |
- |
- |
- |
(2,568) |
- |
(2,569) |
- |
(2,569) |
|
Net income recognised directly in equity |
- |
- |
- |
- |
(2,568) |
- |
(2,569) |
- |
(2,569) |
|
Loss for the period |
- |
- |
- |
- |
- |
1,096 |
1,096 |
- |
1,096 |
|
Total recognised income and expense for the period |
- |
- |
- |
- |
(2,568) |
1,096 |
(1,473) |
- |
(1,473) |
|
Issue of share capital |
583 |
803 |
- |
- |
- |
- |
1,386 |
- |
1,386 |
|
Share based payment charges |
- |
- |
3 |
- |
- |
- |
3 |
- |
3 |
|
Balance at 30 June 2009 |
4,263 |
25,400 |
451 |
923 |
80 |
(20,609) |
10,508 |
- |
10,508 |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2009
|
6 months to |
6 months to |
Year to |
||
|
30 June |
30 June |
31 December |
||
|
2009 |
2008 |
2008 |
||
|
£'000s |
£'000s |
£'000s |
||
|
Cash flows from operating activities |
||||
|
Profit/(Loss) after taxation |
1,096 |
(3,986) |
(6,509) |
|
|
Adjustments for: |
||||
|
Depreciation |
1,757 |
1,595 |
3,205 |
|
|
Share based payments |
3 |
90 |
118 |
|
|
Investment income |
- |
(40) |
(52) |
|
|
Interest expense |
1,436 |
1,459 |
2,408 |
|
|
Increase in trade and other receivables |
(7,940) |
(3,115) |
(4,154) |
|
|
Increase in inventories |
(220) |
(2,653) |
(9,221) |
|
|
Increase in trade payables |
4,974 |
2,146 |
6,992 |
|
|
Cash generated from/(used by) operations |
1,106 |
(4,504) |
(7,213) |
|
|
Interest paid |
(345) |
(958) |
(1,176) |
|
|
Net cash generated from/(used by) operating |
761 |
(5,462) |
(8,389) |
|
|
activities |
||||
|
Cash flows from investing activities |
||||
|
Purchase of property, plant and equipment |
947 |
(656) |
(5,008) |
|
|
Purchase of intangible asset |
(8) |
(3) |
- |
|
|
Interest received |
- |
40 |
52 |
|
|
Net cash generated from/(used in) investing |
939 |
(619) |
(4,956) |
|
|
activities |
||||
|
Cash flows from financing activities |
||||
|
Proceeds from issue of share capital |
1,386 |
- |
923 |
|
|
Proceeds from long-term borrowing |
- |
3,143 |
(285) |
|
|
Payment of finance lease liabilities |
(909) |
153 |
1,399 |
|
|
Unsecured convertible loan stock |
1,190 |
- |
- |
|
|
Loan from minority interest |
- |
2,599 |
7,023 |
|
|
Proceeds from bank borrowing |
(386) |
461 |
6,412 |
|
|
Net cash generated from financing activities |
1,281 |
6,356 |
15,472 |
|
|
Net increase in cash and cash equivalents |
2,981 |
275 |
2,127 |
|
|
Foreign exchange movements |
(2,588) |
(3,877) |
(6,456) |
|
|
Cash and cash equivalents at beginning of |
1,052 |
(5,381) |
5,381 |
|
|
period |
||||
|
Cash and cash equivalents at end of period |
1,445 |
1,779 |
1,052 |
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
These unaudited interim consolidated financial statements are for the six months ended 30 June 2009. They have been prepared based on the recognition and measurement principles of International Financial Reporting Standards ("IFRS") adopted by the European Union. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2008.
The interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements (for the year ended 31 December 2008) except for the adoption of IAS 1 Presentation of Financial Statements (revised 2007).
The adoption of IAS 1 (revised 2007) does not affect the financial position or profits of the Group, but gives rise to additional disclosures, primarily the introduction of two additional primary statements; the 'Statement of Comprehensive Income', and a 'Consolidated Statement of changes in Equity'. The consolidated financial statements have been prepared under the historical cost convention except for financial instruments which have been measured at fair value. They are presented in UK Sterling and are rounded to the nearest thousand (£'000s) except where otherwise noted. They have been prepared on the going concern basis and do not include any adjustment that would result from the inability of the Group to raise additional funding if needed.
2. EARNINGS/(LOSS) PER SHARE
|
6 months to 30 June 2009 |
Loss |
Weighted average number of shares |
Per share amount |
|
|
£'000s |
Pence |
|||
|
Loss for the year attributable to the equity |
||||
|
holders of the parent entity |
1,096 |
|||
|
Weighted average number of shares |
379,816 |
|||
|
Basic loss per share |
0.29p |
|||
|
6 months to 30 June 2008 |
Loss |
Weighted average number of shares |
Per share amount |
|
|
£'000s |
Pence |
|||
|
Loss for the year attributable to the equity |
||||
|
holders of the parent entity |
(3,986) |
|||
|
Weighted average number of shares |
354,418 |
|||
|
Basic loss per share |
(1.12p) |
|||
|
Year to 31 December 2008 |
Loss |
Weighted average number of shares |
Per share amount |
|
|
£'000s |
Pence |
|||
|
Loss for the year attributable to the equity |
||||
|
holders of the parent entity |
(6,509) |
|||
|
Weighted average number of shares |
360,217 |
|||
|
Basic loss per share |
(1.81p) |
|||
3. DIVIDEND
No dividend has been declared for the six month period ended 30 June 2009.
4. AVAILABILITY OF INTERIM REPORT
The interim report is available for download at the Company's website www.gmaresources.plc.uk.
Related Shares:
Kemin Resources