Preliminary Results

3rd Sep 2012 07:49



ASX: NGX

AIM: NGL

 

 NORSEMAN GOLD PLC

('Norseman Gold' or 'the Company')

Preliminary Results

Appendix 4E ASX Listing Rule 4.3A

 

Results for Announcement to the Market

 

	30 June 12	30 June 11	Change
	$‘000	$‘000	%
From continuing operations: Group revenue   Group operating (loss) / profit	45,311   (43,900)	65,934   (12,893)	31%↓
(Loss) / profit before taxation	(63,193)	(27,203)
(Loss) / profit after taxation for the period	(70,052)	(21,801)

	30 June 2012	30 June 2011
	Cents / Share	Cents / Share
Net tangible assets per security	6.7	37.8

  

Audit Status- The Company's financial statements for the year ended 30 June 2012 are in the process of being audited.

In relation to the preliminary announcement of the results for the year ended 30 June 2012 ("the announcement"), filed with the Alternative Investment Market of the London Stock Exchange ("AIM") and the Australian Securities Exchange ("ASX") on 31 August 2012, the Directors wish to inform the shareholders as follows:

Under ASX listing regulations, the Directors are required to file the unaudited preliminary announcement for the year ended 30 June 2012 by 31 August 2012. According to ASX listing regulations and the AIM Rules of the London Stock Exchange there is no requirement for the auditors to agree to the announcement prior to its filing. The Directors of the Company acknowledge that they are responsible for preparing and issuing the announcement. There is a risk that the Company may need to revise its financial information in the light of final audit findings or other developments occurring between the preliminary announcement being notified to the exchanges and the formal completion of the audit.

 

NORSEMAN GOLD PLC

UNAUDITED GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2012

 

Year ended Year ended

30 June 2012 30 June 2011

AUD$ AUD$

 

Continuing operations

 

Group revenue 45,310,996 65,933,643

 

Cost of sales - direct costs (67,423,897) (63,596,829)

Amortisation (2,853,803) (3,577,223)

Gross (loss) / profit (24,966,704) (1,240,409)

 

Other operating income 2,719,315 2,531,309 

 

Total administrative expenses (21,652,735) (14,183,877)

__________ __________

 

Group operating (loss) / profit (43,900,124) (12,892,977)

Interest receivable 393,179 695,973

Interest payable (1,543,419) (6,380)

 

Impairment of goodwill - (15,000,000) 

Impairment of mine properties in production phase (18,142,722) -

__________ __________

(Loss) / profit before taxation (63,193,086) (27,203,384)

Taxation (6,859,683) 5,402,459

__________ __________

 

(Loss) / profit for the period (70,052,769) (21,800,925) 

========== ==========

Total comprehensive income for the period

attributable to equity holders of the Company (70,052,769) (21,800,925)

========== ==========

(Loss) / profit per share (cents)

Basic (22.1) (10.9)

Diluted (22.1) (10.9)

========== ==========

 

 

NORSEMAN GOLD PLC

UNAUDITED GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2012

Foreign

Share Share Currency Equity Retained Total

Capital Premium Reserve Reserve Losses Equity

AUD$ AUD$ AUD$ AUD$ AUD$ AUD$

 

Year ended 30 June 2012

Balance at 1 July 2011 5,865,432 119,059,696 - 475,612 (42,290,029) 83,110,711

 

Net loss for 2012 - - - (70,052,769) (70,052,769)

__________ __________ __________ __________ __________ __________

Total comprehensive - - - - (70,052,769) (70,052,769)

income for the period

 

Share issues 4,764,887 13,192,247 - - - 17,957,134

Share based payments - - 1,415,607 318,601 1,734,208

Convertible loan note

equity element - - - 423,873 - 423,873

__________ __________ __________ __________ __________ __________

 

Balance at 30 June 2012 10,630,319 132,251,943 - 2,315,092 (112,024,197) 33,173,157

========== ========== ========== ========== ========== ==========

 

 

Year ended 30 June 2011

Balance at 1 July 2010 4,905,650 87,292,058 - - (20,489,104) 71,708,604

 

Net loss for 2011 - - - - (21,800,925) (21,800,925)

__________ __________ __________ __________ __________ __________

Total comprehensive

income for the period - - - - (21,800,925) (21,800,925)

 

Share issues 959,782 31,767,638 - - - 32,727,420

Share based payments - - - 475,612 - 475,612

__________ __________ __________ __________ __________ __________

 

Balance at 30 June 2011 5,865,432 119,059,696 - 475,612 (42,290,029) 83,110,711

========== ========== ========== ========== ========== ==========

 

NORSEMAN GOLD PLC

UNAUDITED GROUP BALANCE SHEET

AS AT 30 JUNE 2012

 

As at As at

Notes 30 June 2012 30 June 2011

AUD$ AUD$

ASSETS

Non-Current Assets

Property, plant and equipment 24,220,053 29,387,665

Mine properties in production phase 3 49,025,085 50,254,012

Exploration and evaluation expenditure 4 19,203,103 16,422,085

Deferred tax asset - 6,859,683

__________ __________

92,448,241 102,923,445

__________ __________

Current Assets

Trade and other receivables 2,216,497 4,316,518

Inventories 3,687,453 7,068,762

Cash at bank and in hand 6,660,257 10,502,472

__________ __________

12,564,207 21,887,752

__________ __________

Total Assets 105,012,448 124,811,197 

__________ __________

LIABILITIES

Current Liabilities

Trade and other payables 20,759,921 17,846,833

Provisions 2,780,992 2,536,288

Interest-bearing loans and borrowings 5 23,369,091 9,501,829

__________ __________

46,910,004 29,884,950

__________ __________

Non-Current Liabilities

Provisions 6,460,176 6,501,637

Interest-bearing loans and borrowings 5 18,469,111 5,313,899

__________ __________

24,929,287 11,815,536

__________ __________

Total Liabilities 71,839,291 41,700,486

__________ __________

 

Net Assets 33,173,157 83,110,711

========== ==========

EQUITY

Capital and Reserves

Share capital 6 10,630,319 5,865,432

Share premium account 6 132,251,943 119,059,696

Equity reserve 2,315,092 475,612

Retained losses (112,024,197) (42,290,029)

__________ __________

 

Shareholders' Equity 33,173,157 83,110,711

========== ==========

 

NORSEMAN GOLD PLC

UNAUDITED GROUP CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 JUNE 2012

 

Year ended Year ended

30 June 2012 30 June 2011

AUD$ AUD$

 

Net cash inflow from operating activities (22,313,319) 2,821,828

__________ __________

Investing activities

Funds used in mine properties & production (19,767,598) (22,065,393)

Funds used in exploration (3,216,004) (7,874,311)

Payments to purchase plant and equipment (2,798,535) (11,292,098)

Interest received 393,179 695,972

Interest paid (1,543,419) (6,380)

__________ __________

 

Net cash used in investing activities (26,932,377) (40,542,209) 

__________ __________

 

Financing activities

Cash proceeds from issue of shares 18,698,340 34,560,911

Hire purchase financing (5,067,540) (1,641,987)

Share issue costs (741,206) (1,833,491)

Debt financing 11,496,263 3,500,000

Related party debt financing 3,226,232 -

Convertible loan note financing 17,791,392 -

__________ __________

 

Net cash from financing activities 45,403,481 34,585,433

__________ __________

 

 

Decrease in cash and cash equivalents (3,842,215) (3,134,948)

 

Cash and cash equivalents at beginning of year 10,502,472 13,637,420 

__________ __________

 

Cash and cash equivalents at end of year 6,660,257 10,502,472

========== ==========

 

 

NORSEMAN GOLD PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2012

1.1 Accounting policies

 

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated below.

 

1.2 Basis of preparation

 

The financial statements are prepared on a going concern basis, under the historical cost convention and in accordance with International Financial Reporting Standards, as adopted by the European Union ("IFRS"), including IFRS6 'Exploration for and Evaluation of Mineral Resources' and in accordance with the Companies Act 2006. The Parent Company's financial statements have also been prepared in accordance with IFRS and the Companies Act 2006.

 

1.3 Going Concern

 

The Group incurred an operating loss of AUD$43,900,124 and a net loss of AUD$70,052,769 (including a substantial provision for asset impairment) for the year, which follows an operating loss of AUD$12,892,977 and net loss of AUD$21,800,925 for the full financial year ended 30 June 2011. The operating loss in the current year has been as a result of lower than anticipated gold production from all operations at the Company's Norseman Project and a restructure of the operations including the appointment of a project management company to take over management of the Project on the Group's behalf. Importantly the Group retains ownership to all assets.

The Group's operations continued to invest heavily with major investments in mine development, exploration, plant and equipment and related infrastructure, particularly the North Royal open pit. This ongoing investment in the Norseman Project's future resulted in a total net cash invested in capital assets of AUD$25,782,137, which was funded from capital raisings, debt and convertible loan note finance drawdowns.

The Group is dependent on cash flow generated from its mining operations to fund its ongoing activities. During the year, capital raisings via share placements were undertaken, plus funds were raised from two Convertible Loan Note facilities and related party loans. The Group also fully drew down the finance facility provided to wholly owned subsidiary Central Norseman Gold Corporation Limited by EXP T1 Ltd in July 2011. The funds from EXP T1 Ltd were used to provide the capital required to enable the continued development of the North Royal Open Pit.

Despite recent and continued investment, gold production from the Project has continued to fall well short of expectations, to the extent that the OK Decline was placed on care & maintenance in December 2011, Bullen was placed on care & maintenance in February 2012. Subsequent to the period end, the Harlequin mine has also been placed on care & maintenance. These actions have had a significant impact on the operating performance and also the Group has also incurred restructure costs as part of a strategic review of the Project overall.

The Directors have reviewed the Group's performance and its ability to continue as a going concern. The restructure work continues and at this stage, the Directors are still developing accurate, short to medium term production forecasts which would enable an assessment of likely cash flows to be generated from the reduced operations although the North Royal Open Pit, which has been in development since December 2010, has not proceeded in line with expectations.

 

The Reserve position of all four mines has not altered materially, and the Directors believe that a profitable mine plan can be developed which will take the Company forward and restore it to profitability and positive cashflow. There is however, some risk that a suitable mine plan may not be developed.

The Directors acknowledge this risk and the Group is working on a strategic review of the operations may require additional working capital and the project must continue to generate sufficient funds from production from its operations to enable the Group to continue to trade for the foreseeable future while these plans are developed and implemented.

On this basis, the accounts have been prepared on a going concern basis. Should the Company not achieve the matters set out above, there is uncertainty whether the Company will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

The financial report does not contain any adjustments relating to the recoverability and classification of recorded assets or to the amounts, or classification of, recorded assets or liabilities that might be necessary should the Company not be able to continue as a going concern.

 

2. (Loss) / profit per share

 

The basic (loss) / profit per ordinary share has been calculated using the loss for the financial year of AUD$70,052,769 (2011: AUD$21,800,925) and the weighted average number of ordinary shares in issue of 316,893,017 (2011: 199,199,851).

 

3. Mine properties in production phase

 

Expenditure on developing mine properties in production represents costs incurred in relation to development of operating mines at the Group's operations at Norseman. The Directors review this carrying value periodically to ensure the carrying value will be recovered by ongoing mining activities. During the year, two mines were placed on care and maintenance and one mine subsequent to the end of the financial period. The Directors have assessed the carrying values of the capitalised mine development costs against these operations and impaired the value of those assets. Should a decision be made in the future to reopen any of these operations a further assessment of these values will be made.

 

4. Exploration & evaluation expenditure

 

The amounts for exploration and evaluation ("E & E") assets represent costs incurred in relation to the Group's operations at Norseman. These amounts will be written off to the income statement as exploration expenses unless commercial reserves are established or the determination process is not completed and there are no indicators of impairment. The outcome of ongoing exploration and evaluation, and therefore whether the carrying value of E & E assets will ultimately be recovered, is inherently uncertain.

 

5. Interest-bearing loans and borrowings

 

The Finance Facility is a secured facility provided to Central Norseman Gold Corporation Limited by EXP T1 Ltd.

 

Terms of the Finance Facility

 

Key conditions of this secured facility are as follows:

·; Facility limit - AUD$15,000,000

·; Repayment - repayable in full by 1 July 2013.

·; Interest - calculated at 600 basis points above the daily mean of the 3 month LIBOR quoted for the month of calculation,

·; Security - secured against the assets and undertakings of Central Norseman Gold Corporation Limited, as well as by a Deed of Guarantee from the Company.

 

Terms of the Convertible Notes

 

(a) Introduction

 

There are 2 types of Convertible Loan Notes:

 

·; £5,087,000 10% Secured Convertible Loan Notes convertible at £0.06 (6 pence) for every £1 of nominal value- convertible up until 25/10/2013 (2013 Notes). The security provided is a second ranking mortgage over all of the mining leases and exploration licences and a second ranking general security agreement over all of the assets of Central Norseman Gold Corporation Limited; and

 

·; AUD$10,000,000 10% Secured Convertible Loan Notes convertible at £0.06 (6 pence) for every £1 of nominal value- convertible up until 10/2/2015 (2015 Notes). The security provided is a first ranking mortgage over the exploration licences, second ranking mortgage over all of the mining leases and a second ranking general security agreement over all of the assets of Central Norseman Gold Corporation Limited.

 

The 2013 Notes were issued pursuant to a Convertible Loan Note Instrument dated 25 October 2011 and the 2015 Notes were issued pursuant to a Convertible Loan Note Instrument dated 14 February 2012.

 

(b) Conversion period

Each Convertible Loan Note may be converted at any time into Ordinary Shares within the conversion period (on conversion, the newly converted ordinary shares will rank pari passu with the Ordinary Shares in issue at the date of conversion). In respect of each Convertible Loan Note, the conversion period commences on the date of issue of the Convertible Loan Note and expires on the last day of the term of the Convertible Loan Note.

 

The Company is discharged from its liabilities under the Convertible Loan Note Instrument in respect of a Convertible Loan Note when the Convertible Loan Note is either redeemed or is converted in accordance with its conditions of issue (see below).

 

(c) Value, conversion price and redemption

Each Convertible Loan Note bears interest at a rate of 10% and is convertible at a price of £0.06 (6 pence) for every £1 of nominal value.

 

Any right of conversion may only be exercised in multiples of Convertible Loan Notes (the "Conversion Amount"). The number of Ordinary Shares resulting from the conversion of a Convertible Loan Note shall be calculated by dividing the Conversion Amount by the conversion price (as detailed above).

 

The Convertible Loan Notes shall be redeemed in full on the maturity date in cash or may be redeemed by the Company in cash at any time provided that the ordinary shares have traded at a volume weighted average price on AIM in excess of £0.12 (12 pence) for a period of 10 business days immediately preceding the date which the redemption notice is given.

 

6. Share capital

Year ended Year ended

30 June 2012 30 June 2011

£ £

Allotted, called up and fully paid

Ordinary shares of 1.25p each 6,152,528 2,749,278

========== ==========

 

AUD$ AUD$

Allotted, called up and fully paid

Ordinary shares of 1.25p each 10,630,319 5,865,432

========== ==========

 

 

 

Shares issued in the period to 30 June 2012

 

On 9 December 2011, the number of Ordinary shares issued and fully paid was increased from 219,942,222 Ordinary shares of £0.0125 each to 358,202,222 Ordinary shares of £0.0125. This related to the issue of 138,260,000 shares at an issue price of 6p per share.

 

On 14 March 2012, the number of Ordinary shares issued and fully paid was increased from 358,202,222 Ordinary shares of £0.0125 each to 408,202,223 Ordinary shares of £0.0125. This related to the issue of 50,000,001 shares at an issue price of 6 cents per share.

 

On 30 April 2012, the number of Ordinary shares issued and fully paid was increased from 408,222,223 Ordinary shares of £0.0125 each to 428,202,223 Ordinary shares of £0.0125. This related to the issue of 20,000,000 shares at an issue price of 6 cents per share.

 

On 27 June 2012, the number of Ordinary shares issued and fully paid was increased from 428,222,223 Ordinary shares of £0.0125 each to 492,202,223 Ordinary shares of £0.0125. This related to the issue of 64,000,000 shares at an issue price of 6 cents per share.

 

The Ordinary shares rank pari passu in all respects including the right to receive all dividends and other distributions declared, made or paid.

7. Share-based expenses

Year ended Year ended

30 June 2012 30 June 2011

AUD$ AUD$

The Group and Company recognised the following charge in

the income statement in respect of its share based expense plans:

Share option and warrant charge 1,141,981 475,612

========== ==========

 

Share options and warrants

The details of share options and warrants outstanding at 30 June 2012 are as follows:

 

Number of

Share options

At 1 July 2011 9,550,000

Options expired and lapsed or cancelled in the year (3,500,000)

Options and warrants issued during the year 269,616,660

__________

 

At 30 June 2012 275,666,660

==========

 

Share option and warrant charge

 

Valuation methodology:

 

The option and warrant values are calculated with reference to the Black-Scholes option pricing model taking into account the following assumptions:

The volatility percentage used is the actual volatility in the Company's share price as quoted on the ASX for the period immediately prior to the issue date of the options and warrants.

 

Options and warrants issued:

 

6,800,000 share options exercisable at $1.04 were granted to various employees under an Unapproved Employee Share Option Plan approved by the Board on 28 March 2007 and amended pursuant to a resolution of the Board approved on 15 August 2007 and further amended pursuant to a resolution of the Board dated 24 March 2009. Subsequent to their issue, 4,750,000 options have lapsed by virtue of the awardees terminating their employment with the group, leaving 2,050,000 of these options on issue. The options were issued on 24 January 2011, have a 24 month vesting period from date of issue and expire on 24 January 2016. ("Employee options")

 

2,500,000 share options exercisable at $1.04 were granted under an Unapproved Employee Share Option Plan approved by the Board on 28 March 2007 and amended pursuant to a resolution of the Board approved on 15 August 2007 and further amended pursuant to a resolution of the Board dated 24 March 2009. These options were issued on 28 April 2011 and have a 24 month vesting period, and an expiry date of 28 April 2016. These options were relinquished and reissued on 9 December 2011 with an exercise price of £0.12 with a 24 month vesting period and an expiry date of 9 December 2016 ("Director options").

 

1,500,000 share options exercisable at $0.41 were granted to a long term contractor of the Company's subsidiary Central Norseman Gold Corporation Ltd, approved by the Board on 28 April 2011. The options were issued on 6 May 2011, have a 24 month vesting period and an expiry date of 6 May 2016. These options were relinquished and reissued on 24 January 2012 with an exercise price of £0.12 with a 24 month vesting period and an expiry date of 24 January 2017 ("Incentive options").

 

38,000,000 warrants to acquire ordinary shares exercisable at £0.12 were issued to various parties including related parties and EXP T1 Ltd, as approved by shareholders in general meeting held on 30 March 2012. The warrants were issued on 27 April 2012 and have an expiry date of 27 April 2013 ("April 2012 warrants").

 

3,000,000 warrants to acquire ordinary shares were issued to EXP T1 Ltd (part of the Red Kite group) on 1 July 2011 as part of a finance package provided by the Red Kite group to the Group. The options were first issued on 1 July 2011 with an exercise price $0.30 and an expiry date of 1 July 2013. These warrants were relinquished and reissued on 15 December 2011 with an exercise price of £0.12 and an expiry date of 4 November 2013. ("Financier warrants").

 

84,783,327 warrants to acquire ordinary shares exercisable at £0.12 were issued to various holders of Convertible Loan Notes. The warrants were issued on 15 December 2011 and have an expiry date of 15 December 2013 ("CLN warrants").

 

111,833,333 warrants to acquire ordinary shares exercisable at £0.12 were issued to various parties including the Tulla group and a director of the Company, as approved by shareholders in general meeting held on 30 March 2012. The warrants were issued on 27 April 2012 and have an expiry date of 27 April 2015 ("April 2012 Tulla warrants").

 

32,000,000 warrants to acquire ordinary shares exercisable at £0.12 were issued to Tulla group companies as approved by shareholders in general meeting held on 8 June 2012. The warrants were issued on 22 June 2012 and have an expiry date of 22 June 2015 ("June 2012 Tulla warrants").

8. Subsequent events

 

Subsequent to the period end, the Group:

 

·; placed the Harlequin mine on care and maintenance.

 

·; Completed a placement to raise approximately AUD$25 million through the issue of 625 million new shares to institutional investors at an issue price of 4 cents (2.65 pence) each ("Placement"). The Placement has been processed in a number of tranches. The first tranche of approximately AUD$3m, involving approximately 74 million new shares, was not conditional upon shareholder approval, with new shares commencing trading on 26 July 2012. The second tranche of approximately AUD$9.75 million, involving approximately 243.7 million new shares, was approved by shareholders at a general meeting on 23 August 2012 and settlement occurred on 28 August 2012.

 

·; The balance of the Placement of 307.3 million new shares, which was approved by shareholders on 23 August 2012, includes the conversion of loans advanced for working capital and settlement of a creditor of related parties and 100m shares, subject to FIRB approval and relevant government approvals, to Zhaojin Mining Industry Co., Ltd via its wholly owned investment vehicle Gold Vein International Investment Co.

 

The total number of shares on issue following completion of the Placement is 1,117,202,223.

9. Dividend

The Directors do not propose the payment of a dividend.

10. Preliminary announcement

 

This preliminary announcement for the year ended 30 June 2012 is unaudited and does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.

 

It has been prepared using accounting bases and policies consistent with those used in the preparation of the financial statements of the Company and the Group for the year ended 30 June 2011 and those to be used for the year ending 30 June 2012.

 

The financial statements for the year ended 30 June 2011 have been delivered to the Registrar of Companies and the auditor's report on those financial statements was unqualified and did not contain a statement made under Section 498(2) or Section 498(3) of the Companies Act 2006.

 

* * ENDS * *

 

For further information visit www.norsemangoldplc.com, email [email protected] or contact:

 

David Steinepreis Norseman Gold Plc. Tel: +44 (0) 7913402727

William Vandyk Northland Capital Partners Ltd Tel: 020 7796 8800

Guy Wilkes Ocean Equities Ltd Tel: 020 7786 4370

Susie Geliher / Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7236 1177

 

ENDFR GLGDCSSGBGDX

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Related Shares:

Norseman Gold