17th Mar 2008 10:04
Allied Gold Limited17 March 2008 FOR IMMEDIATE RELEASE 17 March 2007 Allied Gold Limited ("the Company") Half Year - REPORT 2007 Allied Gold Limited has lodged its Half Year Financial Report. Directors' report (extracts as summarised below) RESULTS The consolidated loss of the economic entity after providing for income tax is$3,961,102 (2006: loss $467,554). REVIEW OF OPERATIONS During the period under review, the Groups main focus was on the completion ofthe Groups 100% owned Simberi Oxide Project, located in offshore Papua NewGuinea. Construction was essentially complete at period end with commissioningwell advanced. The Group's inaugural gold pour and commencement of productionsubsequently took place in February 2008. Exploration drilling recommenced with three of the four drilling rigs acquiredby the Group being operational during the period. The Group will now continuewith an aggressive exploration program. Further details of exploration werecontained within the Company's quarterly reports lodged with the ASX. The Company hedged a total of 170,000 ounces of gold, in accordance with thefinance facility entered into with RMB and Macquary Bank, at an effective priceof US$700/oz for delivery between March 2008 and December 2011. TheParticipating Gold Forward Option that the Company has entered into allowsAllied to participate in any upside in the price of gold for 40% (representing68,000 ozs) of the Company's hedging commitment while remaining protected atUS$700/oz at all times as a worst case on the entire 170,000 ounces hedged. SUBSEQUENT EVENTS Subsequent to period end, Allied Gold raised approximately AUD$10.5 millionthrough an institutional share placement to existing shareholders. These fundswere applied to project development expenditure as an alternative to drawingdown further on the existing Finance Facility, and were raised at a share priceof AUD$0.72. Mr Richard Johnson was appointed as Chief Executive Officer in early January2008. The Company commenced gold production with its inaugural gold pour in February2008. Other than the matters disclosed above and elsewhere in this half year financialreport, there has not arisen in the interval between the end of the financialperiod and the date of this report any item, transaction or event of a materialand unusual nature likely, in the opinion of the Directors of the Company, toaffect significantly the operations of the Company, the results of thoseoperations or the state of affairs of the Company in future financial periods. FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES The company is continuing with the ramp up to full scale production at itsSimberi Oxide Gold Project. It is also anticipated that an acceleratedexploration program will be undertaken on all the current land holdings of theGroup. In the opinion of the Directors it may prejudice the interests of the Company toprovide additional information in relation to likely developments in theoperations of the Company and the expected results of those operations insubsequent financial periods. NOTE A copy of the Report and attached audit opinion is available for a period of onemonth, 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 or as a link to this announcement. http://www.rns-pdf.londonstockexchange.com/rns/2328q_-2008-3-17.pdf For enquiries in connection with the above, please contact: Mark CarusoChairman and Managing DirectorAllied Gold Limited+ 61 8 9353 [email protected] Roland CornishBeaumont Cornish Limited020 7628 3396 CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2007 Half Year 2007 2006 Note $ $ Revenue 2 334,623 1,354,714 Exploration and evaluation costs - -Provision for diminution listed shares - (12,900)Increase in fair value of listed - 105,949sharesMMPEU costs, including depreciation - -Depreciation (389,210) (362,373)Share based remuneration (921,744) -General & administration expenses (2,984,771) (1,379,801)Net foreign exchange losses - (173,143) --------- ---------Loss before income tax (3,961,102) (467,554)Income tax expense - - --------- ---------Loss after income tax attributable tomembers of the parent entity (3,961,102) (467,554) ========= ========= Overall operationsBasic earnings per share (cents) (1.16) (0.17)Diluted earnings per share (cents) n/a n/a The above condensed income statement should to be read in conjunction with theaccompanying notes. CONDENSED CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2007 Note 31 December 2007 30 June 2007 $ $CURRENT ASSETSCash and cash equivalents 1,405,322 12,657,949Trade and other receivables 2,006,227 81,277Derivative Financial Asset 5,327,731 -Available for Sale Financial Assets 398,963 474,419Other current assets 109,053 85,745 ---------- ---------Total Current Assets 9,247,296 13,299,390 ---------- --------- NON-CURRENT ASSETSPlant and equipment 3 94,867,150 68,834,971Exploration and evaluationexpenditure 4 36,055,354 30,002,238Available for Sale Financial Assets 1,160,700 1,447,200 ---------- ---------Total Non-Current Assets 132,083,204 100,284,409 ---------- --------- Total Assets 141,330,500 113,583,799 ---------- --------- CURRENT LIABILITIESTrade and other payables 10,490,786 9,163,140Derivative Financial Liability 25,122,640 -Borrowings 18,607,305 - ---------- ---------Total Current Liabilities 54,220,731 9,163,140 ---------- --------- NON CURRENT LIABILITIESTrade and other payables 2,424,861 2,424,861Borrowings 4,786,256 - ---------- ---------Total Non-Current Liabilities 7,211,117 2,424,861 ---------- --------- ---------- ---------Total Liabilities 61,431,848 11,588,001 ---------- --------- NET ASSETS 79,898,652 101,995,798 ========== ========= EQUITYIssued capital 5 107,060,057 105,794,580Reserves (16,708,514) 2,693,009Accumulated losses (10,452,893) (6,491,791) ---------- ---------TOTAL EQUITY 79,898,650 101,995,798 ========== ========= The above condensed balance sheet should be read in conjunction with theaccompanying notes. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2007 ----------- --------- -------- -------- -------- -------- -------- -------- Issued Accumulated Share-based Foreign Hedging Available Total Capital Losses Payments Exchange Reserves for Sale Reserve Translation Investment Reserve Revaluation ReserveECONOMICENTITY --------- -------- -------- -------- -------- -------- ------------------- At 1 July 87,802,197 (4,611,180) 1,823,322 (23,070) - - 84,991,2692006Conversionof 10,000 - - - - - 10,000optionsCost ofequity (68,691) - - - - - (68,691)raisingAdjustmentsfromtranslationofforeigncontrolled - - - 151,905 - - 151,905entities --------- -------- -------- -------- -------- -------- --------Totalincomeand expenserecogniseddirectly in - - - 151,905 - - 151,905equityLoss forthe - (467,554) - - - - (467,554)period --------- -------- -------- -------- -------- -------- --------Totalrecognisedincome andexpenseduring - (467,554) - 151,905 - - (315,639)the year --------- -------- -------- -------- -------- -------- --------At 31December 87,743,506 (5,078,734) 1,823,322 128,835 - - 84,616,9292006 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2007 Issued Capital Accumulated Share-based Foreign Hedging Available Total Losses Payments Exchange Reserves for Sale Reserve Translation Investment Reserve Revaluation ReserveECONOMICENTITY At 1 July 105,794,580 (6,491,791) 1,912,347 22,575 - 758,090 101,995,8012007Conversionof 1,265,477 - - - - - 1,265,477optionsCost of - - - - - -equityraisingShare basedpayments - - 921,744 - - - 921,744Adjustmentsfromtranslationofforeigncontrolled - - - (151,406) - - (151,406)entitiesChanges inthefair value (376,955) (376,955)ofinvestmentsChanges inthefair valueofcash flow - - - - (19,794,909) - (19,794,909)hedges, netoftaxTotalincomeand expenserecogniseddirectly in - - - (151,406) (19,794,909) (376,955) (20,323,270)equityLoss forthe - (3,961,102) - - - - (3,961,102)periodTotalrecognisedincome andexpenseduring - (3,961,102) - (151,406) (19,794,909) (376,955) (24,284,372)the yearAt 31December 107,060,057 (10,452,893) 2,834,091 (128,831) (19,794,909) 381,135 79,898,6502007 The above condensed statement of changes in equity should be read in conjunctionwith the accompanying notes. CONDENSED CONSOLIDATED CASHFLOW STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2007 Note Economic Entity Half Year ended Half Year ended 31 December 2007 31 December 2006 $ $CASH FLOWS FROM OPERATING ACTIVITIESExplorationand evaluationexpenditure (6,053,116) (7,950,387)Interestreceived 334,623 1,352,072Interest paid (1,849,849) -Payments tosuppliers &employees (477,430) (1,379,592) --------- ---------Net cashinflow/(outflow) fromoperatingactivities (8,045,772) (7,977,907) --------- --------- Purchase of equity investments -Purchase ofplant &equipment (1,630,595) (2,006,865)Assets underconstruction (26,083,895) (12,241,272)Proceeds from sale of plant and - -equipment --------- ---------Net cashinflow/(outflow) frominvestingactivities (27,714,490) (14,248,137) --------- --------- Proceeds fromthe issue ofsecurities 1,265,477 10,000Subscription for equitysecurities received pendingallotmentProceeds fromborrowings 23,393,561Costs ofraising equitycapital (68,691) --------- ---------Net cashinflow/(outflow) fromfinancingactivities 24,659,038 (58,691) --------- --------- Net increasein cash held (11,101,224) (22,284,735)Cash atbeginning ofthe half year 12,657,949 55,370,334Effects ofexchange ratechanges on thebalance ofcash held inforeigncurrencies (151,403) 154,547 --------- ---------Cash and cashequivalents atend of thehalf year 1,405,322 33,240,146 --------- --------- The above condensed statement of cashflow should be read in conjunction with theaccompanying notes. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2007 1. BASIS OF PREPARATION OF HALF YEAR FINANCIAL STATEMENTS CORPORATE INFORMATION The financial report of Allied Gold Limited and it's controlled entities (theGroup) for the half-year ended 31 December 2007 was authorised for issue inaccordance with a resolution of the directors on 14 March 2008. Allied GoldLimited is a company incorporated in Australia and limited by shares, which arepublicly traded on the Australian Stock Exchange. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The half-year financial report does not include all notes of the type normallyincluded within the annual financial report and therefore cannot be expected toprovide as full an understanding of the financial performance, financialposition and financing and investing activities of the Group as the fullfinancial report. The half-year financial report should be read in conjunction with the annualfinancial report of the Groupas at 30 June 2007. It is also recommended that the half-year financial report be consideredtogether with any public announcements made by Allied Gold Limited during thehalf year ended 31 December 2007 in accordance with the continuous disclosureobligations arising under the Corporations Act 2001. Basis of preparation The half-year financial report is a general-purpose condensed financial report,which has been prepared in accordance with the requirements of the CorporationsAct 2001, applicable Accounting Standards including AASB 134 "Interim FinancialReporting" and other mandatory professional reporting requirements. For the purpose of preparing the half-year financial report, the half-year hasbeen treated as a discrete reporting period. Significant new accounting policies The half-year financial statements have been prepared using the same accountingpolicies as used in the annual financial statements for the year ended 30 June2007 except for the following new accounting policies for the period Derivatives Derivatives are initially recognized at fair value on the date a derivativecontract is entered into and are subsequently remeasured to their fair value ateach reporting date. The accounting for subsequent changes in fair value dependson whether the derivative is designated as a hedging instrument, and if so, thenature of the item being hedged. The Group designates certain derivatives as : - Hedges of the cash flows of recognized assets and liabilities and highlyprobable forecast transactions (cash flow hedges). The Group documents at the inception of the hedging transaction the relationshipbetween hedging instruments and hedged items, as well as its risk managementobjective and strategy for undertaking various hedge transactions. The Groupalso documents its assessment, both at hedge inception and on an ongoing basis,of whether the derivatives that are used in hedging transactions have been andwill continue to be highly effective in offsetting changes in fair values orcash flows of hedged items. Trading derivatives are classified as current assets. The fair value of allderivatives are determined with reference to publicly disclosed gold curveinformation. The value attached to the derivatives coincides with the maturitydates of the derivatives and this value is then discounted back using the basicrate of interest as published by the Reserve Bank. The group has accounted for the fair values of both the call and put options inaccordance with their legal structure and has not netted these fair values. Cash flow hedge The effective portion of changes in the fair value of derivatives that aredesignated and qualify as cash flow hedged is recognized in equity in thehedging reserve. The gain or loss relating to the ineffective portion isrecognized immediately in the income statement within other income or otherexpenses. Amounts accumulated in equity are recycled in the income statement in theperiods when the hedged item affects profit or loss (for instance when theforecast sale that is hedged takes place). When a hedging instrument expires or is sold or terminated, or when a hedge nolonger meets the criteria for hedge accounting, any cumulative gain or lossexisting in equity at that time remains in equity and is recognized when theforecast transaction is ultimately recognized in the income statement. When aforecast transaction is no longer expected to occur, the cumulative gain or lossthat was reported in equity is immediately transferred to the income statement. The group has decided not to separate out time and intrinsic value but retainone single fair value to all option derivatives and measure hedge effectivenessconsistent with this. Allied Gold at the inception of each hedge documents both the relationshipbetween the financial instruments and the hedged item, as well as the aim andstrategy of the hedge. This involves assigning the hedging instruments to itscorresponding unrecognised forecast sales commitments in the future derived fromfuture gold transaction. The group has made the assessment that these forecastsales are highly probable on the basis of the group having a JORC compliant goldreserve. Half Year 2007 2006 $ $ 2. REVENUES AND EXPENSES (a) RevenueInterest revenue- interest other persons 334,623 1,354,714 (b) Other incomeFair value change on investments held for trading - 105,949Net gain on disposal of assets - -Net gain on disposal of investments - - -------- -------- - 105,949 ======== ======== (c) DepreciationPlant and equipment 389,210 362,373 ======== ======== 3. PLANT AND EQUIPMENT Plant and equipment - at cost 96,038,661 69,623,932Accumulated depreciation (1,171,511) (788,961) --------- ---------Total property, plant and equipment 94,867,150 68,834,971 ========= ========= Reconciliation of the carrying amount of plantand equipment at the beginning and end of thecurrent and previous financial year.Plant and equipmentCarrying amount at beginning of year 68,834,971 3,586,280Acquisition of controlled entity -Additions 26,421,389 65,356,330Disposal - -Depreciation (389,210) (107,639) --------- ---------Carrying amount at end of year 94,867,150 68,834,971 ========= ========= As at 31 December 2007 there was a further $6,067,068 (2006 $22,297,924)expenditure commitment on the Simberi Oxide Gold project. Included within thetotal of Property, Plant and Equipment are Assets under Construction of$79,701,865 (30 June 2007: $57,613,648) and mine development costs of $7,691,632(30 June 2007: $7,691,632) Economic Entity 31 Dec 2007 30 June 2007 $ $ 4. EXPLORATION AND EVALUATION EXPENDITUREExploration expenditure - costscarried forward in respect of areas ofinterest in:Exploration and evaluation phases 36,055,354 30,002,238 ========== ======== The ultimate recoupment of such costs isdependant on successful development andcommercial exploitation, or alternativelysale of the exploration areas. Reconciliation of the carrying amount of miningtenements at the beginning and end of the currentand the previous financial period:Carrying amount at beginning of year 30,002,238 27,769,231Expenditure outlaid in cash and accrued 6,053,116 9,924,639Expenditure reclassified to Development - (7,691,632)Foreign currency translation -Write off discontinued projects - - --------- ---------Carrying amount at end of year 36,055,354 30,002,238 ========= ========= 5 ISSUED Half year ended Half year ended Half year ended Half year endedCAPITAL 31 December 31 December 31 December 31 December 2007 2007 2006 2006 Number of $ Number of $ shares shares Issued Capital 342,014,710 107,060,057 272,062,528 87,743,506 (a)ReconciliationBalance atbeginning offinancial year 337,649,110 105,794,580 272,022,528 87,802,197Conversion ofoptions duringthe half yearended 31December 4,365,600 1,265,477 40,000 10,000Costs ofcapitalraising - (68,691) --------- --------- --------- --------Balance at endof financialyear 342,014,710 107,060,057 272,062,528 87,743,506 ========= ========= ========= ======== Fully paid ordinary shares entitle the holder to participate in dividends and toone vote per share. (b) Options Options granted and exercised during the period, and on issue at balance dateare as follows. Date and details of grant / exercise No. of Options Exercise Price Expiry Date Opening balance 9,325,601 Various VariousOptions exercised in theperiod (4,365,600) Various VariousOptions Issued during theperiod 2,640,000 Various Various ----------- Balance at 31 December 2007 7,600,001 =========== 6 CONTINGENT LIABILITIES There are no contingent liabilities. 7 SUBSEQUENT EVENTS Subsequent to quarter-end, Allied Gold raised approximately AUD$10.5 millionthrough an institutional share placement to existing shareholders. These fundswere applied to project development expenditure as an alternative to drawingdown further on the existing Finance Facility, and were raised at a share priceof AUD$0.72. Mr Richard Johnson was appointed as Chief Executive Officer in early January2008. The Company commenced gold production with its inaugural gold pour in February2008. Other than the matters disclosed above and elsewhere in this half year financialreport, there has not arisen in the interval between the end of the financialperiod and the date of this report any item, transaction or event of a materialand unusual nature likely, in the opinion of the Directors of the Company, toaffect significantly the operations of the Company, the results of thoseoperations or the state of affairs of the Company in future financial periods. 8. SEGMENT REPORTING Geographical segments The consolidated entity has the following two geographical segments • Australia • Papua New Guinea (a) Australia Papua New Guinea ConsolidatedGeographical 31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $ $ $ $ $ $RevenueTotalsegment 334,623 1,352,072 - 2,642 334,623 1,354,714revenue -------- --------- -------- -------- -------- --------ResultSegment (2,593,858) 555,501 (1,367,244) (1,023,055) (3,961,102) (467,554)resultIncome Tax - - - - - - -------- --------- -------- -------- -------- --------Loss fromordinaryactivitiesafter tax (2,593,858) 555,501 (1,367,244) (1,023,055) (3,961,102) (467,554) 9. SHARE BASED PAYMENTS In 2006, the group established a share option programme that entitles keymanagement personnel and senior employees to purchase shares in the entity. Theterms and conditions of the share option programme are disclosed in theconsolidated financial report as at and for the year ended 30 June 2007. InNovember 2007 a further grant on similar terms was made to key managementpersonnel. The terms and conditions of the grants made during the six months ended 31December 2007 are as follows: Directors OptionsGrant Date Number of Instruments Vesting Conditions Contractual Life of Options28 November2007 2,000,000 Nil 13 Months Fair value of share options and assumptions for the six months ended 31 December2007: Fair value at grant date Share price $0.65 Exercise price $0.40, $0.44 Expected volatility (expressed as weighted average volatility 80% used in the modeling under binomial lattice model) Option life (expressed as weighted average volatility 13 months used in the modeling under binomial lattice model) Expected dividends Nil Risk free interest rate (based on government bonds) 6.25% Employee OptionsGrant Date Number of Instruments Vesting Conditions Contractual Life of Options21 November2007 640,000 Nil 2 years Fair value of share options and assumptions for the six months ended 31 December2007: Fair value at grant date Share price $0.75 Exercise price $0.50 Expected volatility (expressed as weighted average volatility 70% used in the modeling under binomial lattice model) Option life (expressed as weighted average volatility 2 years used in the modeling under binomial lattice model) Expected dividends Nil Risk free interest rate (based on government bonds) 6.35% The basis of measuring fair value is consistent with that disclosed in theconsolidated financial report as at and for the year ended 30 June 2007. 10. LOANS AND BORROWINGS The following loans and borrowings (non-current and current) were issued andrepaid during the six months ended 31 December 2007: In thousands Currency Nominal Effective Face Carrying Year ofof AUD Interest Interest Value Amount Rate Rate '(000) '(000) MaturityBalance at 1 -July 2007New IssuesLoanacquired AUD LIBOR +3.0% LIBOR + 3.0% 23,394 23,394 2010(see note10)RepaymentsSecured bank AUD LIBOR + - -- - -loan 3.0%Balance at31 23,394December2007 11. RELATED PARTY TRANSACTIONS Arrangements with related parties continue to be in place. For details on thesearrangements, refer to the 30 June 2007 annual financial report This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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