31st Mar 2008 07:24
Norseman Gold PLC31 March 2008 Norseman Gold plc / Epic: NGL / Index: AIM / Sector: Mining & Exploration Norseman Gold plc ("Norseman" or the "Company") Interim Report for the half year ended 31 December 2007 Norseman Gold plc, the AIM listed Australian gold production company, is pleasedto announce the unaudited results for the half year ended 31 December 2007relating to the six months of trading of the Norseman Gold Project in WesternAustralia. Highlights during the period and following the completion of the period • Progress at the mine, although slower than anticipated, has continued on a positive trend but personnel shortages and costs increases has placed pressure on operations. • Total production of 37,025 ounces from 219,085 tonnes treated for the period. • New operating equipment finance has been approved with equipment scheduled to arrive commencing March 2008. Expected to result in annual savings in excess of $AUD3.1m per annum. • Regional drilling programme has continued and results have been encouraging with further work being undertaken. Two drilling rigs now on site at Mararoa North and Lady Miller. • Major upgrade works on the Treatment Plant completed ahead of schedule. • Senior management team placements finalised in January 2008. • Continual monitoring of regional area for corporate opportunities that can add to shareholder value. • Work has continued on the proposal to dual list on the Australian Securities Exchange to facilitate an increased shareholder base and create a wider interest in the Company. • 1 for 5 consolidation of all securities has been completed. For further information visit www.norsemangoldplc.com or contact: David Steinepreis Norseman Gold Plc Tel: 61 (0) 89 420 9300 Guy Wilkes Ocean Equities Ltd Tel: 020 7786 4370 Olly Cairns Blue Oar Securities Plc Tel: +61 (0) 8 6430 1631 Romil Patel Blue Oar Securities Plc Tel: 020 7448 4400 Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7242 4477 Forward-Looking Statements. This regulatory news release contains certainforward looking statements, which include assumptions with respect to futureplans, results and capital expenditures. The reader is cautioned thatassumptions used in the preparation of such information may prove to beincorrect. All such forward looking statements involve substantial known andunknown risks and uncertainties, certain of which are beyond the Company'scontrol. Please refer to the Company's Admission Document available from theCompany's web site for a list of risk factors. The Company's actual resultscould differ materially from those expressed in, or implied by, theseforward-looking statements and, accordingly, no assurances can be given that anyof the events anticipated by the forward-looking statements will transpire oroccur, or if any of them do so, what benefits the Company will derive therefrom.All subsequent forward-looking statements, whether written or oral, attributableto the Company or persons acting on its behalf are expressly qualified in theirentirety by these cautionary statements. Furthermore, the forward-lookingstatements contained in this news release are made as at the date of this newsrelease. Chairman's Statement The interim financial results of the Company represent six months of operationsof the Central Norseman Gold Mine for the period 1 July 2007 to 31 December2007. The loss of £3,686,209 contains a substantial amount of non operatingexpenses which are short term charges likely to affect the Profit and LossStatement for the next two years. During the period we have continued to implement the mine development plan whichis the long term future of any mining operation and, as we are now fully manned,this task has begun to show positive results. However, as previously advised,the Board believes the advancement in development will take up to a year toreach prudent targeted levels. As with the mining industry as a whole, costshave risen substantially and have only been partially offset by the rising goldprice. Whilst management constantly reviews costs the average cash cost perounce for the year to date have increased and it is anticipated that with theoperational improvements already in place that the estimated cash costs perounce for the year ended 30 June 2008 will be in the order of A$730 and A$760 onforecast production of between 75,000 and 80,000 ounces. This forecastproduction is on the basis of: 1. 6 months production reported above 2. 2 months of production data reported in our internal management accounts; and 3. the Company forecast of production for the remaining 4 months of the financial year; which forecast assumes an improvement in recovery rates from: a. production of higher grade reef at Norseman once reached; which higher grade reef is apparent from forward test drilling results; and b. operational improvements in place at both mines. The nature of costs in underground mines is such that a large proportion arefixed so that any reduction in the production profile will raise the cash costper ounce of production. In terms of actual costs and in line with mostoperators in Australia, the price of labour has continued to increase as aresult of the mining industry's skill shortage. The price of diesel has also putupward pressure on power generation costs but the Company is evaluating ways toalleviate this. With operational improvements now in place and at higher levels of productionrelative to fixed costs, the Board expect that cash operating costs should fallgoing forward. The Company estimates that if a consistent production level of8,500 ounces per month can be reached, the equivalent cash cost to that forecastabove would fall to between A$550 and A$600 per ounce. The Board reaffirms its commitment to the task over the next twelve months ofre-fitting the mine and stabilisation of the workforce that we hope will lead toa substantially improved production profile that will limit some of our risks,although the risk of mined grade continues to be one of the most exacting tasksmanagement faces. Vince Pendal Chairman Interim Financial Information of Norseman Gold plc The following interim financial information of Norseman Gold plc is for theperiod from 1 July 2007 to 31 December 2007. The financial information wasapproved by the directors on 31 March 2008. NORSEMAN GOLD PLC GROUP INCOME STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2007 Unaudited Unaudited Audited Period ended Period ended Year ended 31 December 2007 31 December 2006 30 June 2007 £ £ £ Continuing operations Group revenue 13,744,015 - 4,869,941 Cost of sales (13,953,015) (88,679) (4,324,273) Gross profit (loss) (209,000) (88,679) 545,668 Administrative expenses before depreciation andamortisation and charge for share-based payments (439,976) (27,808) (553,288) Exploration and rehabilitation expenditure (213,321) - (169,973) Impairment of Goodwill on acquisition - - (15,927,910) Depreciation and Amortisation (1,727,515) - (641,431) Share-based payments (934,535) - (531,370) Total administrative expenses (3,315,347) (27,808) (17,823,972) Group operating loss (3,524,347) (116,487) (17,278,304) Interest receivable 145,552 2,720 49,517 Interest payable (307,414) - (149,430) Loss before taxation (3,686,209) (113,767) (17,378,217) Taxation - - - Loss for the period (3,686,209) (113,767) (17,378,217) Attributable to: Equity holders of the Company (3,686,209) (113,767) (17,378,217) Loss per share (pence) Basic and diluted (0.93)p (0.33)p (13.4)p NORSEMAN GOLD PLC GROUP STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 DECEMBER 2007 Foreign Share Share Currency Equity Retained Total Capital Premium Reserve Reserve Losses Equity £ £ £ £ £ £UnauditedPeriod ended31 December2007 Balance at 1July 2007 994,500 27,807,030 400,756 759,632 (17,378,217) 12,583,701 Share issues 2,875 112,125 - - - 115,000 Foreigncurrency - - (135,046) - - (135,046) Other reserves - - - 774,858 - 774,858 Net loss for31 December2007 - - - - (3,686,209) (3,686,209) __________ __________ __________ __________ __________ __________ Balance at 31December 2007 997,375 27,919,155 265,710 1,534,490 (21,064,426) 9,652,304 ========= ========= ========= ========= ========= ========= UnauditedPeriod ended31 December2006 Balance 1July 1 - - - - 12006 Share issues 137,499 388,890 - - - 526,389 Net loss for31 December2006 - - - - (113,767) (113,767) __________ __________ __________ __________ __________ __________ Balance at 31December 2006 137,500 388,890 - - (113,767) 412,263 ========= ========= ========= ========= ========= ========= AuditedYear ended 30June 2007 Balance at 1July 2006 1 - - - - 1 Share issues 994,499 27,807,030 - - - 28,801,529 Foreigncurrency - - 400,756 - - 400,756 Other reserves - - - 759,632 - 759,632 Net loss for30 June 2007 - - - - (17,378,217) (17,378,217) __________ __________ __________ __________ __________ __________ Balance at 30June 2007 994,500 27,807,030 400,756 759,632 (17,378,217) 12,583,701 ========= ========= ========= ========= ========= ========= NORSEMAN GOLD PLC GROUP BALANCE SHEET AS AT 31 DECEMBER 2007 Unaudited Unaudited Audited As at As at As at Notes 31 December 31 December 30 June 2007 2006 2007 £ £ £ ASSETS Non-CurrentAssetsProperty,plant &equipment 4 3,412,228 - 3,514,913 Mineproperties inproductionphase 5 5,234,934 - 4,965,563 Exploration &evaluationexpenditure 6 1,116,911 30,000 421,487 Goodwill 7 6,247,500 - 6,247,500 __________ __________ __________ 16,011,573 30,000 15,149,463 __________ __________ __________CurrentAssets Trade andotherreceivables 1,131,634 2,151 827,200 Investments 31,622 48,591 -Inventories 8 2,773,553 - 2,886,069 Cash at bankand in hand 5,422,943 421,581 7,347,233 __________ __________ __________ 9,359,752 472,323 11,060,502 __________ __________ __________Total Assets 25,371,325 502,323 26,209,965 __________ __________ __________LIABILITIES CurrentLiabilities Trade andother 9 4,026,266 89,700 2,382,238payables Provisions 10 1,092,272 - 1,080,688 ConvertibleNotes 11 2,082,401 - 1,955,258 __________ __________ __________ 7,200,939 89,700 5,418,184 __________ __________ __________Non-CurrentLiabilities Provisions 10 2,000,069 - 1,927,280 ConvertibleNotes 11 6,518,013 - 6,280,800 __________ __________ __________ 8,518,082 - 8,208,080 __________ __________ __________TotalLiabilities 15,719,021 89,700 13,626,264 __________ __________ __________Net Assets 9,652,304 412,623 12,583,701 ========= ========= =========EQUITY Capital andReserves Share capital 12 997,375 137,500 994,500 Share premiumaccount 27,919,155 388,890 27,807,030 Currencytranslationreserve 13 265,710 - 400,756 Equity 13 1,534,490 - 759,632reserve Retained (21,064,426) (113,767) (17,378,217)losses __________ __________ __________Shareholders'Equity 9,652,304 412,623 12,583,701 ========= ========= ========= NORSEMAN GOLD PLC GROUP CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2007 Unaudited Unaudited Audited Period Period Year ended ended ended Notes 31 December 31 December 30June 2007 2006 2007 £ £ £ Net cash inflow(outflow) fromoperating activities 16 1,039,312 (78,344) (699,210) __________ __________ __________ Investing activities Funds used in mineproperties, exploration& production (2,056,111) (57,572) (367,451) Payments to purchase plant andequipment (610,583) - (20,992) Costs of acquiring subsidiaries - - (17,409,487) Interest 145,552 2,720 49,517received Interest payable (307,414) - (149,430) __________ __________ __________ Net cash used in investingactivities (2,828,556) (54,852) (17,897,843) __________ __________ __________ Financing activities Loan from AscentCapital Holdings Pty Ltd - 28,387 - Cash proceeds from issue ofshares - 715,000 27,225,999 Share issue costs - (188,610) (1,682,470) __________ __________ __________ Net cash from financing activities - 554,777 25,543,529 __________ __________ __________ Increase(decrease)in cash and cash equivalents (1,789,244) 421,581 6,946,476 Effect of foreigncurrency translation reserve (135,046) - 400,756 Cash and cashequivalents at beginning ofperiod 7,347,233 - 1 __________ __________ __________ Cash and cashequivalents at end of period 5,422,943 421,581 7,347,233 ========= ========= ========= NORSEMAN GOLD PLC NOTES TO THE FINANCIAL INFORMATION FOR THE PERIOD ENDED 31 DECEMBER 2007 1. Accounting policies The principal accounting policies applied in the preparation of these financialstatements are set out below. These policies have been consistently applied toall the periods presented, unless otherwise stated below. 1.1 Basis of preparation This interim report, which incorporates the financial information of the Companyand its subsidiary undertakings ("the Group"), has been prepared using thehistorical cost convention and in accordance with the International FinancialReporting Standards ("IFRS") including IAS 34 'Interim Financial Reporting' andIFRS 6 'Exploration for and Evaluation of Mineral Resources', as adopted by theEuropean Union ("EU"). These interim results for the six months ended 31 December 2007 are unauditedand do not constitute statutory accounts as defined in section 240 of theCompanies Act 1985. They have been prepared using accounting bases and policiesconsistent with those used in the preparation of the financial statements of theCompany and the Group for the year ended 30 June 2007 and those to be used forthe year ending 30 June 2008. The financial statements for the year ended 30June 2007 have been delivered to the Registrar of Companies and the auditors'report on those financial statements was unqualified and did not contain astatement made under Section 237(2) or Section 237(3) of the Companies Act 1985. 1.2 Goodwill Goodwill is the difference between the amount paid on theacquisition of the subsidiary undertakings and the aggregate fair value of theirseparable net assets. Goodwill is capitalised as an intangible asset and inaccordance with IFRS3 'Business Combinations' is not amortised but tested forimpairment when there are any indications that its carrying value is notrecoverable. As such, goodwill is stated at cost less any provision forimpairment in value. If a subsidiary undertaking is subsequently sold, goodwillarising on acquisition is taken into account in determining the profit and losson sale. 1.3 Mine properties in production phase Exploration and evaluation expenditure Exploration, evaluation and development expenditure incurred is accumulated inrespect of each identifiable area of interest. These costs are only carriedforward to the extent that they are expected to be recouped through thesuccessful development of the area or where activities in the area have not yetreached a stage which permits reasonable assessment of the existence ofeconomically recoverable reserves. Accumulated costs in relation to an abandonedarea are written off in full against profit in the year in which the decision toabandon the area is made. When production commences, the accumulated costs forthe relevant area of interest are amortised over the life of the area accordingto the rate of depletion of the economically recoverable reserves. Economicallyrecoverable reserves are determined by the following: For open pit operations -proven and probable reserves; and for underground operations - proven andprobable reserves and reasonably assured potential additional reserves.Accumulated costs associated with underground operations include an estimate ofthe future costs associated with the conversion of 'indicated' and 'inferred'resources into the 'measured category'. This estimate is based on the historicalcost per ounce discovered. A regular review is undertaken of each area ofinterest to determine the appropriateness of continuing to carry forward costsin relation to that area of interest. Costs of site restoration are provided when an obligating event occurs from whenexploration commences and are included in the costs of that stage. Siterestoration costs include the dismantling and removal of mining plant, equipmentand building structures, waste removal and rehabilitation of the site inaccordance with clauses of the mining permits. Such costs have been determinedusing estimates of future costs, current legal requirements and technology on adiscounted basis. Any changes in the estimates for the costs are accounted foron a prospective basis. In determining the costs of site restoration, there isuncertainty regarding the nature and extent of the restoration due to communityexpectations and future legislation. Accordingly the costs have been determinedon the basis that the restoration will be completed within one year ofabandoning the site. 1.4 Inventories (i) Raw Materials and Stores Inventories of raw materials and stores expected to be used in production arevalued at average cost. Obsolete or damaged inventories of such items are valuedat net realisable value. There is a regular and ongoing review of inventoriesfor surplus items and provision is made for any anticipated loss on theirdisposal. (ii) Work in Progress and Gold in Circuit Inventories of broken ore, work in progress and gold in circuit are valued atthe lower of cost and net realisable value. Cost comprises direct material,labour and transportation expenditure incurred in getting inventories to theirexisting location and condition, together with an appropriate portion of fixedand variable overhead expenditure based on weighted average costs incurredduring the period in which such inventories were produced. Net realisable valueis the amount anticipated to be realised from the sale of inventory in thenormal course of business less any anticipated costs to be incurred prior to itssale. 1.5 Revenue Revenue from the sale of goods (precious metals) is recognised upon production.Interest revenue is recognised on a proportional basis taking into account theinterest rates applicable to the financial assets. 1.6 Share based payments The Company made share-based payments to certain directors and advisers by wayof issue of share options. The fair value of these payments is calculated by theCompany using the Black-Scholes option pricing model. The expense is recognisedon a straight line basis over the period from the date of award to the date ofvesting, based on the Company's best estimate of shares that will eventuallyvest. The Company has issued shares to management which will vest in one and two yearsfollowing readmission, provided certain requirements are met. The Companyrecords an expense, based upon the market price at date of issue of sharesexpected to vest, on a straight line basis over the vesting period. 1.7 Foreign Currency Transactions and Balances (i) Functional and presentational currency Items included in the Group's financial statements are measured using AustralianDollars ("A$"), which is the currency of the primary economic environment inwhich the Group operates ("the functional currency"). The financial statementsare presented in Pounds Sterling ("£"), which is the functional currency of theCompany and is the Group's presentation currency. The individual financial statements of each Group company are presented in thefunctional currency of the primary economic environment in which it operates. (ii) Transactions and balances Foreign currency transactions are translated into the functional currency usingthe exchange rates prevailing at the dates of the transactions. Foreign exchangegains and losses resulting from the settlement of such transactions and from thetranslation at period end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are recognised in the income statement. Transactions in the accounts of individual Group companies are recorded at therate of exchange ruling on the date of the transaction. Monetary assets andliabilities denominated in foreign currencies are translated at the rates rulingat the balance sheet date. All differences are taken to the income statement. For the purpose of presenting consolidated financial statements, the assets andliabilities of the Group's foreign operations are translated at exchange ratesprevailing on the balance sheet date. Income and expense items are translated atthe average exchange rates for the period. Exchange differences arising areclassified as equity and transferred to the Group's translation reserve. Suchtranslation differences are recognised as income or as expenses in the period inwhich the operation is disposed of. 1.8 Convertible notes Convertible notes are regarded as compound instruments, consisting of aliability component and an equity component. At the date of issue, the fairvalue of the liability component is estimated using the prevailing market ratefor similar non-convertible debt. The difference between the proceeds of issueof the convertible notes and the fair value assigned to the liability component,representing the embedded option to convert the liability into equity of theCompany, is included in equity. Issue costs are apportioned between the liability components ofthe convertible notes based on their relative carrying amounts at the date ofissue. The portion relating to the equity component is charged directly againstequity. The interest expense on the liability component is calculated by applying theprevailing market interest rate for similar non-convertible debt to theliability component of the instrument. The difference between this amount andthe interest paid is added to the carrying amount of the convertible note. 2. Loss per share The basic loss per ordinary share has been calculated using the loss for theperiod of £3,686,209 (31 December 2006: £113,767, 30 June 2007: £17,378,217)and the weighted average number of ordinary shares in issue of 398,482,418 (31December 2006: 33,794,449, 30 June 2007: 129,517,317). The diluted loss per share has been calculated using a weighted average numberof shares in issue and to be issued of 398,950,000 (31 December 2006:55,000,000, 30 June 2007: 129,517,317). The diluted loss per share has been keptthe same as the basic loss per share as the conversion of share optionsdecreases the basic loss per share, thus being anti-dilutive. 3. Segmental reporting For the purposes of segmental information, the operations of the Group arefocused on Australia and comprise one class of business: the production,exploration, evaluation and development of mineral resources. The Company acts as a holding Company. The Group's operating loss arose from its operations in Australia. In addition,all the Group's assets are based in Australia. 4. Property, plant & equipment Unaudited Group - 31 December 2007 Land and Plant and Mine Capital Total Buildings Equipment Infrastructure Works in Progress £ £ £ £ £CostAt 1 July 2007 153,121 1,014,370 1,975,148 614,549 3,757,188Additions 9,883 306,810 51,222 242,668 610,583Disposals - - - - -At 31 December 2007 163,004 1,321,180 2,026,370 857,217 4,367,771 DepreciationAt 1 July 2007 (9,436) (54,153) (178,686) - (242,275)Charge for period (29,938) (187,703) (495,627) - (713,268)Depreciation on disposals - - - - -At 31 December 2007 (39,374) (241,856) (674,313) - (955,543) Net book value31 December 2007 123,630 1,079,324 1,352,057 857,217 3,412,228 Audited Group - 30 June 2007 Land and Plant and Mine Capital Total Buildings Equipment Infrastructure Works in Progress £ £ £ £ £CostAt 1 July 2006 - - - - -Additions 153,121 1,014,370 1,975,148 614,549 3,757,188Disposals - - - - -At 30 June 2007 153,121 1,014,370 1,975,148 614,549 3,757,188 DepreciationAt 1 July 2006 - - - -Charge for year (9,436) (54,153) (178,686) - (242,275)Depreciation on disposals - - - - -At 30 June 2007 (9,436) (54,153) (178,686) - (242,275) Net book value30 June 2007 143,685 960,217 1,796,462 614,549 3,514,913 5. Mine properties in production phase Group Unaudited Unaudited Audited 31 December 2007 31 December 2006 30 June £ £ 2007 £Opening balance 4,965,563 - -Mining expenditure incurred during the period 1,285,944 - 367,451Acquisition of mining properties - - 4,998,000Amortisation during the period (1,016,573) - (399,888) Closing balance 5,234,934 - 4,965,563 6. Exploration & evaluation expenditure GroupCosts carried forward in respect of areas of Unaudited Unaudited Auditedinterest in: 31 December 2007 31 December 2006 30 June £ £ 2007Exploration and evaluation phases: £ Opening balance 421,487 - -Acquired - Norseman Project - - 504,787Exploration expenditure capitalised 738,545 30,000 -Exploration expenditure written off (43,121) - (83,300) Closing balance 1,116,911 30,000 421,487 The amounts for intangible exploration and evaluation ("E & E") assets representcosts incurred in relation to the Group's operations at Norseman. These amountswill be written off to the income statement as exploration expenses unlesscommercial reserves are established or the determination process is notcompleted and there are no indicators of impairment. The outcome of ongoingexploration and evaluation, and therefore whether the carrying value of E & Eassets will ultimately be recovered, is inherently uncertain. The Directors haveassessed the value of the exploration and evaluation expenditure carried asintangible assets and in their opinion no provision for impairment is currentlynecessary. 7. Goodwill Group Goodwill £ Cost At 30 June 2007 and 31 December 2007 22,175,410 Amortisation and impairment At 30 June 2007 and 31 December 2007 (15,927,910) __________ Net book value At 30 June and 31 December 2007 6,247,500 ========= Goodwill arose on the acquisition of the Company's subsidiary undertakings.The Group tests goodwill for impairment if there are indicators that goodwillmight be impaired. The Board impaired the value of goodwill at 30 April 2007. 8. Inventories Unaudited Unaudited Audited 31 December 31 December 30 June 2007 2007 2006 £ £ £ Gold Bullion 893,623 - 1,089,475 Work in Progress - at cost - Ore Stockpiles 679,929 - 694,282 - Gold in circuit 241,971 - 531,300 Raw materials and stores - at net realisable value 958,030 - 571,012 __________ __________ __________ 2,773,553 - 2,886,069 ========= ========= ========= 9. Trade and other payables Trade accruals 2,913,809 89,700 1,771,072 Other payables 1,112,457 - 611,166 __________ __________ __________ 4,026,266 89,700 2,382,238 ========= ========= ========= 10. Provisions UnauditedGroup - 31 December 2007 Current: Employee Restoration and Total benefits decommissioning £ £ £ At 1 July 2007 690,582 390,106 1,080,688 Charge to income statement (29,130) 40,714 11,584 __________ __________ __________ At 31 December 2007 661,452 430,820 1,092,272 ========= ========= ========= Non-current: Restoration and Total decommissioning £ £ At 1 July 2007 1,927,280 1,927,280 Charge to income statement 72,789 72,789 __________ __________ At 31 December 2007 2,000,069 2,000,069 ========= ========= AuditedGroup - 30 June 2007 Current: Employee Restoration and Total benefits decommissioning £ £ £ At 1 July 2006 - - - Charge to income statement 690,582 390,106 1,080,688 __________ __________ __________ At 30 June 2007 690,582 390,106 1,080,688 ========= ========= ========= Non-current: Restoration and Total decommissioning £ £ At 1 July 2006 - - Charge to income statement 1,927,280 1,927,280 __________ __________ At 30 June 2007 1,927,280 1,927,280 ========= ========= The Directors have considered environmental issues and the need for anynecessary provision for the cost of rectifying any environmental damage, asmight be required under local legislation and the Group's license obligationsand have provided the above provisions for any future costs of decommissioningor any environmental damage. 11. Convertible Notes Unaudited Unaudited Audited 31 December 31 December 30 June 2007 2007 2006 £ £ £ Current: Convertible note, unsecured 2,082,401 - 1,955,258 ========= ========= ========= Non-current: Convertible notes, unsecured 6,518,013 - 6,280,800 ========= ========= ========= Within not more than one year 2,082,402 - 1,955,258 Payable between 1 and 2 years 2,082,402 - 1,955,258 Payable between 2 to 5 years 4,435,610 - 4,325,542 __________ __________ __________ 8,600,414 - 8,236,058 ========= ========= ========= 12. Share capital and options Unaudited Unaudited Audited 31 December 31 December 30 June 2007 2006 2007 £ £ £ Authorised 4,000,000,000 Ordinary shares of 0.25p each 10,000,000 10,000,000 10,000,000 ========= ========= ========= Allotted, called up and fully paid Ordinary shares of 0.25p each 997,375 137,500 994,500 ========= ========= ========= On 12 September 2007, the Company announced that, following the termination of aconsultancy agreement with one of its consultants (the "Consultant") providedthrough Infinity Resources Pty Ltd ("Infinity"): (a) the Consultant was issued with 1,150,000 ordinary shares in theCompany (the "Shares"); and (b) the Consultant's 3,000,000 options to subscribe for Shares and theConsultant's right to be issued with 1,850,000 Shares were assigned for noconsideration to Infinity (the "Assignments") and reconfirmed by the Company. The Ordinary Shares rank pari passu in all respects including the right toreceive all dividends and other distributions declared, made or paid. Share options The details of share options outstanding at 31 December 2007 are as follows: Unaudited Unaudited AuditedNumber of share options 31 December 31 December 30 June 2007 2006 2007 Opening balance 19,300,000 - -Granted during the period - - 19,300,000Exercised during the period - - -Lapsed during the period - - - 19,300,000 - 19,300,000 13. Reserves Group Foreign Currency, movements Unaudited Unaudited Audited 31 December 31 December 30 June 2007 2006 2007 £ £ £ Opening balance 400,756 - -Foreign currency transactions - 400,756Movement in reserve (135,046) - -Closing balance 265,710 - 400,756 Group - Unaudited 31 December 2007 Unaudited Unaudited AuditedEquity reserves, movements: 31 December 31 December 30 June 2007 2006 2007 £ £ £ Opening balance 759,632 - -Share based payments - charge 934,535 - 531,370Share based payments transferred to issuedcapital and share premium reserve (115,000) -Equity component of convertible note (44,677) - 228,262 Closing balance 1,534,490 - 759,632 14. Share-based payments Unaudited Unaudited Audited 31 December 31 December 30 June 2007 2006 2007 £ £ £ The Group and Company recognised the following charge in the income statement in respect of its share based payment plans: Share option charge 59,535 - 245,953 Management share charge 875,000 - 285,417 __________ __________ __________ 934,535 - 531,370 ========= ========= ========= Management share charge The Management Shares will be issued provided that the relevant director,employee or consultant remains a director, employee or consultant at that time.If he does not, the relevant Management Shares will not be issued unless thereason for cessation was ill health, disability, death or termination by theCompany or by the relevant employee or consultant or his associated consultancyentity for breach by or insolvency of the Company, in which case the relevantManagement Shares may be required to be issued at any time after the firstanniversary of Re-Admission (or earlier in case of death). The ManagementShares may also be required to be issued after such first anniversary in case ofa change of board control (in the case only of Management Shares held byassociates of the Directors) or at any time in case of a change of votingcontrol of the Company. Of the total of 30,750,000 Management Shares issued1,150,000 have been converted to ordinary shares and 2,350,000 will vest on thefirst anniversary of Re-Admission and the balance on the second anniversary ofRe-Admission. The Company's market price at readmission was 10p, the discount of £3,075,000will be amortised over the vesting period of one and two years for the twoallocations respectively. 15. Exploration expenditure commitments In order to maintain an interest in the mineral assets in which the Group isinvolved, the Group is committed to meet the conditions under which the licenceswere granted. The timing and amount of exploration expenditure commitments andobligations of the Group are subject to the work programme required as per thelicence commitments and may vary significantly from the forecast based upon theresults of the work performed. Exploration results in any of the projects mayalso result in variation of the forecast programmes and resultant expenditure.Such activity may lead to accelerated or decreased expenditure. 31 December 2007 Group £ As at the balance sheet date the aggregate amount payable is: Within not more than one year 2,685,071 ========= 16. Reconciliation of operating cash flows to net cash outflows from operating activities Group Unaudited Unaudited Audited 31 December 31 December 30 June 2007 2006 2007 £ £ £ Group operating loss (3,524,347) (116,487) (17,278,304) Adjustments for items not requiring an outlay of funds: Foreign currency - unrealised 319,680 1,333 197,018 Depreciation and amortisation 1,729,841 - 641,431 Exploration expenditure written off 43,121 83,300 Share-based payments charge 934,535 - 531,370 Impairment of goodwill on acquisition - - 15,927,910 __________ __________ __________ Operating profit (loss) before changes in working capital (497,170) (115,154) 102,725 Decrease (increase) in inventories 112,516 - (2,441,521) Increase in receivables and prepayments (Note a) (304,434) (2,151) (827,201) Increase in provisions 84,373 - 84,549 Increase in trade and other payables 1,644,027 38,961 2,382,238 __________ __________ __________ Net cash inflow (outflow) from operating activities 1,039,312 (78,344) (699,210) ========= ========= ========= Note a: Inventories includes £893,623 of Gold Bullion on hand at 31 December2007 (30 June 2007: £1,089,475). 17. Events after the balance sheet date On 18 January 2008, the Company's ordinary share capital was consolidatedresulting in every 5 Existing Ordinary Shares being consolidated into 1 NewOrdinary Share. 18. Dividend The Directors do not recommend the payment of a dividend. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Norseman Gold