Final Results
August 06 2003 - 2:30AM
UK Regulatory
RNS Number:3684O
African Gold PLC
06 August 2003
AFRICAN GOLD PLC
Contacts:
John Teeling: +353 1 833 2833 6 August 2003
Jim Finn: +353 1 833 2210
AFRICAN GOLD, THE AIM LISTED GOLD MINER ANNOUNCES RESULTS FOR THE YEAR ENDED
MARCH 31st, 2003
John Teeling, Chairman commenting on the results. "We will stay in gold, stay
in Africa and stay in Zimbabwe. There is potential in gold in Africa. We will
continue to look for profitable opportunities on the continent".
African Gold continues to operate in Zimbabwe though at a level barely covering
local direct cash operating costs. In the year to March 31st we lost less than
#10,000 in Zimbabwe. The total loss of #121,000 reflects the cost of
maintaining an AIM listed vehicle with 2500 shareholders.
A noteworthy point in the accounts is the low value of our assets #33,500. This
reflects the collapse of the Zimbabwean dollar against Sterling. From a single
digit rate of exchange in the 90's the rate used in these accounts has risen to
Z$1,213 : #1 stg. The parallel rate is Z$4,000 to the #1 stg. We recently
completed an updated asset register that covers 25 pages reflecting the
extensive range of equipment and plant needed to operate an underground mine
with three shafts. Given the present state of the Zimbabwean economy no one is
likely to invest so a tiny realizable asset value may make sense. However, the
replacement cost is a seven figure sum.
Our 200-ton per day facility near Kadoma in Central Zimbabwe is operating at
about 10 per cent of capacity. During the year we had power breakdowns a little
civil unrest but our principal problem was a breakdown in our small mill. We
affected running repairs, which failed, and then suffered a 3-month loss of
production while we waited for parts to be cast, milled and cut. The suppliers
could not source the raw materials and they had power problems. The initial
price quotation tripled in three months. We adapted. The big 200-tpd mill was
pressed back into service working intermittently to mill the ore coming mainly
from the North shaft - a small high grade deposit. The other two underground
operations East and Main are in mothballs. You can see from the operations
review below where we get ore.
Can we survive in Zimbabwe as it falls into economic chaos? It is now a classic
case of hyperinflation. By year-end 2003 inflation may be running at a rate in
excess of 600%. Wage rates are raised on a retroactive basis. There have been
two rises of more than 200% each in the past year. Power is intermittent and the
price rises monthly. Fuel is available but often at black-market prices.
We have a good and loyal workforce, down now to about 80 direct operatives,
supporting about 500 people in the mine village. Some of these employees have
been with us for over a decade. Alternative employment opportunities are non -
existent. A reduction of 15 in the workforce during the year highlights an
appalling problem - death from TB, malaria and Aids. Only 3 of the 15 resigned.
The others died. HIV and poor nutrition make TB and malaria lethal.
Why do we persist? For a number of reasons. Zimbabwe has gold. It has an
educated workforce, reasonable but crumbling infrastructure, good laws when
fairly applied and great potential. It has a future and we want to be part of
that future.
However, we cannot survive forever waiting for Zimbabwe to come good. Our
finances are weak. The company is being financed by frequent small placings
mainly with directors. We continue to evaluate opportunities in gold. The
fundamentals of the gold industry have improved due to further reductions in the
producer hedge-book, a rise in investor interest and a general improvement in
market sentiment.
Gold in Africa is a different and difficult proposition. We have evaluated a
number of projects mainly in West Africa. Some look good on first analysis but
the need for substantial infrastructure expenditure on roads, power and water
mean that good grades and large tonnages are needed for viability. So far we
have seen nothing to recommend.
Shareholders have been very patient. I hope to be in the position to reward that
patience in the coming months.
John Teeling
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2003
2003 2002
# #
TURNOVER 27,576 388,783
Cost of Sales (24,062) (330,330)
GROSS PROFIT 3,514 58,453
Administrative Expenses (124,259) (89,393)
OPERATING LOSS (120,745) (30,940)
Interest payable and similar charges (542) (2,826)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (121,287) (33,766)
Tax on loss on ordinary activities - -
RETAINED LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (121,287) (33,766)
LOSS PER SHARE (0.08p) (.02p)
LOSS PER SHARE - diluted (0.08p) (.02p)
BALANCE SHEETS
AT 31 MARCH 2002
Group Group Company Company
2003 2002 2003 2002
# # # #
FIXED ASSETS
Tangible Assets 33,459 183,428 - -
CURRENT ASSETS
Stocks 451 7,067 - -
Debtors 3,172 51,588 2,396 40,500
Cash at bank 4,310 38,166 3,953 16,569
CREDITORS:(Amounts falling
due within one year) (134,178) (254,614) (89,695) (29,170)
NET CURRENT (LIABILITIES)/
ASSETS (126,245) (157,793) (83,346) 27,899
NET ASSETS/(LIABILITIES) (92,786) 25,635 (83,346) 27,899
CAPITAL AND RESERVES
Called up share capital 1,387,899 1,387,899 1,387,899 1,387,899
Share Premium 2,815,295 2,815,295 2,815,295 2,815,295
Profit and loss
account-deficit (4,295,980) (4,177,559) (4,286,540) (4,175,295)
SHAREHOLDERS' (DEFICIT)/
SURPLUS - ALL EQUITY (92,786) 25,635 (83,346) 27,899
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2003
2003 2002
# #
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (15,892) (134,131)
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest Paid (542) (363)
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE (542) (363)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire tangible fixed assets (24,178) (8,332)
Receipts from sales of tangible fixed assets 6,756 -
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT (17,422) (8,332)
NET CASH OUTFLOW BEFORE FINANCING (33,856) (142,826)
FINANCING:
Issue of ordinary share capital - 177,250
NET CASH INFLOW FROM FINANCING - 177,250
(DECREASE)/INCREASE IN CASH (33,856) 34,424
Copies of this announcement will be sent to shareholders and will be available
for inspection at the Company's registered office at 20-22 Bedford Row, London
WC1R 4JS.
African Gold plc 162 Clontarf Road Tel: +353 1 833 2833
Dublin 3 Fax: +353 1 833 3505
Email:afgold@iol.ie
www.africangoldplc.com
Registrars & Transfer Office: Computershare Tel: +353 1 216 3100
Heron House Fax: +353 1 216 3150
Corrig Road
Sandyford Ind. Estate
Dublin 18
The financial information set out above does not constitute the Company's
financial statements for the years ended 31 March 2003 or 2002. The financial
information for 2002 is derived from the financial statements for 2002.
A copy of the Company's annual report and accounts for 2003 will be mailed to
shareholders shortly and will also be available for collection from the
Company's registered office.
This information is provided by RNS
The company news service from the London Stock Exchange
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