TIDMCGM
RNS Number : 0223D
China Goldmines PLC
25 November 2009
CHINA GOLDMINES PLC
("China Goldmines", "CGM", the "Company", or the "Group")
PRELIMINARY FINANCIAL RESULTS
FOR THE YEAR ENDED 30 JUNE 2009
Financial Highlights
* Cash position as at year end USD$6.2m.
* Net assets for the Group amounted to USD$28.5m.
* For the year ended 30 June 2009 the Group has recorded a loss of USD$36.2m,
after charging USD$18.3m impairment provision against mining properties and a
loss on foreign exchange of USD$10.7m.
* The Group has no long term debts or borrowings.
Post year end:
* Following the disposal of the Company's interest in Westralian Resources Pty Ltd
("WES"), (Guanzhuang Project) on 29 September 2009, the Company has no further
interest in mining operations in China or elsewhere. The Company is regarded as
an investing company under the AIM Rules for Companies.
* Completion of disposal of the entire share capital of Westralian Resources Pty
Ltd for a gross consideration of USD$26.35m.
* Warranties in respect of the disposal capped at USD$10m expire on 29 September
2010.
* Cash position as at 31 October 2009 USD$21.8m plus USD$2.9m held in trust until
31 December 2009 and will be released in January 2010 on condition that the
purchaser is satisfied that all contingent debts and obligations are resolved in
Westralian Resources and Hunan Westralian Mining Co., Ltd.
* No long term debts or borrowings.
Operational Highlights
* Eight mining licences consolidated into one.
* China Goldmines had three processing plants in operation with a total capacity
of 350 tpd.
* A twelve month drilling campaign completed by the end of December 2008 that
achieved 15,000 metres of drilling:-
* High grades achieved in drilling (e.g. 4.35 metres @ 24.1 g/t)
* Underground sampling with results up to 114.93 g/t
* 46,516 tonnes of ore milled and contained 8,211 ounces of gold produced during
the year ended 30 June 2009.
* For the three months ended 30 June 2009, grade improvement of 88% from the
previous period (average grade 5.3 g/t to an average milling grade 10 g/t).
* Underground mine development Highway -40 was on target at end of June 2009 to
link four mines 350 metres below surface.
* Theft of high-grade gold at the Xiang Lu ("XL") mine following forced entry and
sustained civil disturbances caused significant operational disruption.
Subsequent attempted improvements put in place.
* Yuanling County Government Safety Award for no deaths/injuries for the year.
* The Company intends to set out its proposed investing strategy for shareholders
approval at the forthcoming AGM.
For further information contact:
+-----------------------------------------+-----------------------------------------+
| China Goldmines plc | |
+-----------------------------------------+-----------------------------------------+
| Frank Vanspeybroeck (CEO) | +86 731 489 0755 |
+-----------------------------------------+-----------------------------------------+
| Marinko Vidovich (CFO) | +61 8 6216 5200 |
| | |
+-----------------------------------------+-----------------------------------------+
| Brewin Dolphin Ltd (Nomad) | |
+-----------------------------------------+-----------------------------------------+
| Alex Dewar | +44 (0)131 529 |
| (Nominated Adviser) | 0276 |
| Threadneedle Communications | +44 (0)20 7653 |
| Laurence Read/ Beth Harris | 9855 |
+-----------------------------------------+-----------------------------------------+
Chairman's Report
The year ended 30 June 2009 has been a challenging one for the Company. The
global financial crisis has lead to a significant decline in economic and
investment activity across the world. The contraction of many of the world's
leading economies had considerable impact on share markets, the availability of
capital and currency movements. In addition to the macroeconomic challenges
facing the Company we also encountered various operational difficulties (in the
province of Hunan within the Peoples Republic of China), as the Company
attempted its first full year of commercial gold production, including security
breaches, theft and cultural issues.
China Goldmines began producing gold in early 2008. However, throughout the year
we began to experience increasing operational disturbances that were outside of
the Company's control. These arose in part from Chinese cultural issues in
managing the mines and interaction with the local population. In May 2009, there
was a significant attack at our Xiang Lu mine site and the Bao Mu Yuan Plant.
Fifty or more thieves broke in and raided the high grade ore/concentrate and
threatened staff. We were forced to close down the Xiang Lu operations to ensure
the safety of the Company's workers and to avoid more theft of high grade ore.
These setbacks were particularly frustrating because of our notable achievements
during the year. We had identified high-grade stopes for production and
completed our 15,000 metre drilling programme, with drilling results that
confirmed the likelihood of continuity of the ore body in both strike length and
depth. We maintained an excellent safety record, with no serious injuries. Six
of the eight gold mines were in operation, while two were in development, and
mine production in March and April was delivering promising results. However, as
the security situation grew increasingly serious, preventing us from processing
higher-grade mining which would fund planned development, we were restricted to
mining only small regions within the Mining Licence at a time. Given the
widespread nature of the incidents, local authorities were ineffectual in
assisting us.
These problems, combined with the additional capital required to develop the
underground infrastructure to deliver a higher and more sustainable level of
gold production and profitability, resulted in the board seeking joint venture
partners. Discussions were held with a number of international and local JV
parties which ultimately led to the board considering the disposal of the
project in order to ensure that we would be able to retain some value for the
project rather than continuing to manage and operate in a very difficult
operational environment and face an uncertain future.
The offer from Cosmos Castle Management Limited to purchase Westralian Resources
Pty. Ltd. was put to shareholders at a General Meeting on 21 September 2009 and
was approved. The purchase has been completed and the funds were received on 29
September 2009. The consideration paid by Cosmos, expressed in US Dollars was
USD$26.3m. Of the total consideration, USD$2.9m is held in trust as a
contingency to cover outstanding liabilities of Westralian Resources Pty. Ltd.
and Hunan Westralian Mining Co. Ltd., as well as certain costs by CGM and its
subsidiary, Global Resource Ventures Limited, in fulfilling their commitments
under the Share Purchase Agreement up to 31 December 2009
Following the closing of the disposal we retain funds of USD$24.7m (including
the USD $2.9m held in trust) and are well placed to add significant shareholder
value through investments in other companies and/or projects. We are
identifying a number of project opportunities which we will appraise against the
objective of delivering value to shareholders.
At a corporate level, there were some significant changes to the Board personnel
during the year. The Board wishes to extend its appreciation and thanks to the
former Chairman, Mr Lance Browne and non-executive director/company secretary,
Mr Alex Worrall, who both recently left the Board to pursue other opportunities.
On behalf of the Board, I wish to acknowledge the commitment of our managers and
staff, in particular, Frank Vanspeybroeck (CEO), our staff on site and the team
in Perth. Their commitment and persistence in working in difficult operating
conditions has been noteworthy.
Clive Donner
Non-Executive Chairman
Business Review
Following the financial year under review the Company disposed of WES, its
operating subsidiary through which it held its interest in the Guanzhuang mining
project. Following the completion of the disposal on 29 September 2009, the
Company is classified as an Investing Company under the AIM Rules for Companies.
At the start of the financial year the Company was focussed on expanding gold
production following the consolidation of the mining licences and the investment
in the administration and infrastructure of the Company.
Operations were becoming increasingly disrupted by theft and local disputes.
These had the consequence of preventing the Company from processing sufficient
gold to fund the necessary development of the mining infrastructure and
operations.
The directors examined various alternatives for preserving shareholders value in
the Guanzhuang mining project which ultimately led the Company to dispose of WES
to Cosmos Castle Management Limited.
The Group made a loss for the 2009 year before taxation of USD$36,203,861,
(2008: USD$(4,260,569). The loss attributable to shareholders was
USD$36,203,861, (2008: USD$(3,800,361).
The directors do not propose a dividend, (2008: nil).
Disposal of Principle Asset and Future Investment Strategy
Following the disposal, the Company is now classified under the AIM Rules for
companies as an investing company. Post sale transaction the Company now has
cash reserves of USD$24.7m. China Goldmines proposes to identify and acquire
holdings in natural resources, minerals and/or metals companies and/or assets
which the Directors believe are undervalued and will enhance shareholder
value.
Accordingly a new investment strategy for the Company has been determined for
your Company, with your Board laying down the following guiding principles:
* The Company will employ a broad geographic focus for its business with an
emphasis on established mining regions within Australasia, South America and
Africa, with China being specifically excluded as an investment region. Other
regions / countries will be reviewed on a case by case basis;
* Within these regions, the Company will target projects that demonstrate a sound
investment case that meets or exceeds the Company's investment criteria. Our
investment criterion remains flexible across a range of commodity types,
including but not limited to bulk commodities (iron and coal, but not oil and
gas), base metals (primarily copper, nickel, lead, and zinc) as well as precious
metals (particularly gold and platinum);
* The Company will aim to invest in the more mature exploration properties, with
preference towards projects that are advancing into the development /
commissioning phase;
* The Company, subject to a compelling investment case, remains open to consider
the acquisition of producing assets (or even ones that are in care and
maintenance). The Company will also not rule out joint venture opportunities
within its investment matrix, provided the potential for shareholder value
uplift is evident;
* The size of the investment that the Company would consider will vary depending
on the Company's ability to fund the acquisition from its ability to source both
debt and equity funding. All investments that are made must demonstrate the
ability to at least meet or exceed the Company's internal investment hurdle
rates of return;
* The Company will source investment opportunities from internal sources,
consultants and advisors, banks and brokers and will evaluate opportunities
internally and with the use of appropriate skilled and experienced consultants
and advisors; and
* The Company believes it currently has the relevant skills to undertake and / or
manage an operation or development project and can access or source the
appropriate senior management to undertake the relevant positions for an
operating mining asset.
Review of Operations
China Goldmines attempted during the 2009 year to sustain commercial gold mining
production but encountered a number of issues in developing and optimising the
Project. Continued security breaches, theft and other local community issues
have had a significant impact on the Company's ability to develop and optimise
the Project. Management had sought to address this situation by putting in place
additional security arrangements and conducting a comprehensive review of the
mining operations. The Company also revised its business strategy, which
ultimately led the Board to consider the merits of selling the Project.
A number of alternative solutions were assessed and reviewed by the Directors,
including Chinese and international joint-venture partners, conventional equity
raisings and a potential sale of the Project. The Directors estimated that the
Project required an injection of substantial capital in order to develop the
underground infrastructure to achieve higher and more sustainable gold
production in order to become a profitable gold producer. The Directors
concluded that the proposed disposal of the Project represented the best
alternative to preserve shareholder value.
Geological
Prior to August 2008, there were eight small independent mining licences for the
following mines: Shen Jia Ya (SJY), De Sheng (DS), Bao Mu Yuan (BMY), Xiao Chong
Zi (XCZ), Zheng Jia Shan (ZJS), Jiu Fa (JF), Jin Zhu Wan (JZW) and Xiang Lu
(XL). In August 2008, the Company combined these eight gold-mining rights into
one and renamed it as Hunan Westralian Guanzhuang Gold Mine. The combined area
of mining rights accumulated to 6.3126km2.
Exploration
Exploration drilling achieved a total of 15,000 metres for surface drilling to
December 2008. The underground drilling completed approximately 2,000 metres.
Underground sampling, together with underground drilling, continued to confirm
the continuity of the orebodies, both along strike and with depth. The Company,
since December 2008, focused purely on underground drilling that would assist
mine production.
Underground drilling directly connected with identifying zones for immediate
mining was conducted in the second half of the financial year. Underground
drilling and channel sampling to the extension of Xiang Lu (XL) decline 3 had
discovered a high grade orebody. A 25 degree decline almost perpendicularly
entered into an orebody 5m thick, at an average grade of 160.8 g/t.
Channel sampling along the grade line of the decline (1m above the floor, across
the thickness of the orebody) gave the following grades:
+--------------------------+------------+---------------+---------------------------+
| Channel sample length | Grade | Accumulated |Grade for the accumulated |
| across the orebody | (g/t) |thickness (m) | thickness (g/t) |
| thickness (m) | | | |
+--------------------------+------------+---------------+---------------------------+
| 0.6 | 916.74 | First 0.6m | 916.74 |
+--------------------------+------------+---------------+---------------------------+
| 1.3 | 123.68 | First 1.9m | 374.1 |
+--------------------------+------------+---------------+---------------------------+
| 0.5 | 46.06 | First 2.4m | 305.8 |
+--------------------------+------------+---------------+---------------------------+
| 1.2 | 4.28 | First 3.6m | 205.3 |
+--------------------------+------------+---------------+---------------------------+
| 1 | 0.57 | First 4.6m | 160.8 |
+--------------------------+------------+---------------+---------------------------+
The Company determined this to be a significant high grade gold mineralisation
which was to be earmarked for immediate production and processing, prior to the
decision to suspend mining activity in Xiang Lu.
Mining Background
CGM had eight mining operations, divided into the east section and west section.
The east section had four operations: Zheng Jia Shan, Xiang Lu, Jin Zhu Wan and
Jiu Fa. The west section had four operations: Shen Jia Ya, Bao Mu Yuan, Xia
Chong Zi and De Sheng. CGM was upgrading the west section operations, where the
four operations had been connected, while upgrading was also being undertaken on
the east section, where the four mines were not connected as a result of
ventilation and other factors. Within the CGM mining operations, underground
access is made available by adits and declines. Materials are hoisted by
winches. An emergency compartment is placed every 20m in the declines.
Production
During the financial year, the Company's mining operation was making the
transition from remnant mining, while refurbishing the mines to target new
high-grade mine development. This progress was materially impeded by escalating
local disruption culminating in a large scale robbery in May 2009. As a
result CGM scaled down active mining to ensure increased security coverage by
resorting to measures such as temporarily closing access to the high-grade
orebodies.
A solution to the mining operations was to develop a centralised hoisting and
processing facility for the long-term and sustainable development of the
Guanzhuang Project. A mine feasibility study program was initiated in June 2009.
In June 2009, the Company was also in the process of preparing the necessary
reports and designs for its central project to be approved by the
County Government and to obtain the construction permits for its central shaft,
processing plant, tailing dams, power upgrade and the transfer of land title to
the Company.
2009 Summary Mining Results
+----------------------+-------------+
| Period | Tonnes |
+----------------------+-------------+
| Q1: Jul 08 to Sep 08 | 7,552 |
| Q2: Oct 08 to Dec 08 | 23,519 |
| Q3: Jan 09 to Mar 09 | 13,578 |
| Q4: Apr 09 to Jun 09 | 14,555 |
+----------------------+-------------+
| Total Tonnes Mined | 59,204 |
+----------------------+-------------+
Summary of Production to 30 June 2009
+-----------------+---------+------------+----------+-------+
| Quarter | Tonnes | Head Grade | Recovery | Oz's |
+-----------------+---------+------------+----------+-------+
| 1 Jul to 30 Sep | 7,552 | 4 | 95% | 903 |
| 09 | 18,091 | 4 | 93% | 2,214 |
| 1 Oct to 31 Dec | 8,911 | 5.3 | 93% | 1,417 |
| 09 | 11,962 | 10 | 95% | 3,677 |
| 1 Jan to 31 Mar | | | | |
| 09 | | | | |
| 1 Apr to 30 Jun | | | | |
| 09 | | | | |
+-----------------+---------+------------+----------+-------+
| | 46,516 | | | 8,211 |
+-----------------+---------+------------+----------+-------+
The 8,211 ounces of gold produced from our production mills included gold
concentrate and doré bars from gravity concentration. The gold was sold to the
Chinese refinery and after costs associated with "refining," the Company
received net proceeds for 3,177 ounces of gold, for a net consideration of
USD2.9m.
Mine Safety
CGM developed its internal (western) safety procedures which held a proud record
in China.
Disposal of Entire Issued Capital of Westralian Resources Pty Ltd
On 29 September 2009, the Company disposed of the entire issued share capital of
Westralian Resources Pty Ltd, the JV Company to the Guanzhuang Gold Project via
Hunan Westralian Mining Co. Ltd (China). The gross consideration paid by Cosmos
Castle Management Limited (the Purchaser) was USD$26.35m, of which USD$2.9m is
held in trust to cover outstanding liabilities of Westralian Resources Pty Ltd
or its subsidiary Hunan Westralian Mining Co. Ltd, and is expected to be
released in January 2010.
Investing Policy
* The Company intends to set out its investing policy that seeks to add
shareholder value, at the Company's forthcoming AGM.
After Settlement of the Sale of Westralian Resources Pty Ltd
After the Closing Date, 29 September 2009, CGM was required to use its
reasonable endeavours and act regularly and diligently to:-
* Obtain the lawful and valid mining rights certificates of the eight gold mines,
fully consolidating the eight mining rights certificates, and the lawful and
valid certificates and licences for the operation and business.
* Settle by no later than 31 December 2009, all debts, obligations and matters
which relate to the USD$2.9m held in trust.
Warranties in Accordance with the Share Purchase Agreement
China Goldmines and Global Resource Ventures Limited provided warranties,
jointly and severally, to Cosmos and its successors in title, subject to any
matters disclosed. The warranties are concerned with the following matters:
* The authority and capacity of CGM and GRV to enter into the Share Purchase
Agreement, which is binding upon them;
* The entering into and performance of the Share Purchase Agreement not breaching
the constitutions of CGM and GRV and the agreements, licences etc and court
orders and judgements which affect CGM and GRV;
* Ownership and title to the Shares and Shareholder Loan;
* The validity and terms of the Shareholder Loan and borrowings and indebtedness;
* Commercial activities between the date of the Agreement and Closing not taking
place without Cosmos' consent (save for certain specified activities);
* Contractual arrangements;
* Litigation and disputes pursued by and against GRV, HW and WES;
* The solvency of GRV, HW and WES;
* Compliance by HW and WES with laws and regulations and official inquiries or
investigations;
* The structure of the group and the information set out in the schedules to the
Share Purchase Agreement;
* The accuracy of the books and records of HW and WES and that such books and
records are in their possession or control;
* The validity of licences, permits and consents;
* Ownership and control of assets and the condition of such assets;
* Merchantable quality and adequacy of stock in trade
* The standing of HW and its rights in relation to mining and exploration,
including whether all relevant fees have been paid;
* The employment arrangements of HW and WES;
* The accuracy, and completeness of information provided to Cosmos and also in the
share purchase agreement and disclosure letter;
* Financial information and accounts of HW and WES;
* The financial position, standing and operation of HW and WES since 31 December
2008;
* The ownership of intellectual property rights and software and any claims in
relation thereto;
* The ownership, title and use of equipment and real property;
* The insurance arrangements of HW and WES; and
* The taxation affairs of HW and WES.
The warranties expire 12 months from the Closing Date. The maximum liability of
CGM and GRV under the warranties is USD$10,000,000 with Cosmos permitted to
select any basis of claiming damages available to it as well as any other rights
or remedy which is available.
Directors' Report
The Directors present their Annual Report and Group Accounts of China Goldmines
plc for the year ended 30 June 2009.
Consolidated Income Statement
+------------------------------------------+---------+--------------+-------------+
| | Note | Year Ended | Year Ended |
| | | 30 June | 30 June |
| | | 2009 | 2008 |
| | | $ | $ |
+------------------------------------------+---------+--------------+-------------+
| | | | |
+------------------------------------------+---------+--------------+-------------+
| Revenue | | 396,740 | 523,635 |
+------------------------------------------+---------+--------------+-------------+
| Salaries and employee benefits | | (2,619,097) | (1,719,889) |
+------------------------------------------+---------+--------------+-------------+
| Office expenses and professional fees | | (3,124,949) | (2,814,823) |
+------------------------------------------+---------+--------------+-------------+
| Consulting expenses | | (715,588) | (1,161,254) |
+------------------------------------------+---------+--------------+-------------+
| Travel and accommodation expenses | | (214,864) | (384,463) |
+------------------------------------------+---------+--------------+-------------+
| Mining expenses | | - | (1,343,585) |
+------------------------------------------+---------+--------------+-------------+
| Impairment of intangible assets | 4 | (18,388,341) | - |
+------------------------------------------+---------+--------------+-------------+
| Other expenses | | (1,214,752) | (267,997) |
+------------------------------------------+---------+--------------+-------------+
| Operating loss | | (25,880,851) | |
+------------------------------------------+---------+--------------+-------------+
| | | | |
+------------------------------------------+---------+--------------+-------------+
| Other gains and losses | 1 | (10,688,330) | 1,909,520 |
+------------------------------------------+---------+--------------+-------------+
| Financial income | | 365,320 | 998,287 |
+------------------------------------------+---------+--------------+-------------+
| Loss before tax | | (36,203,861) | (4,260,569) |
+------------------------------------------+---------+--------------+-------------+
| Tax | | - | - |
+------------------------------------------+---------+--------------+-------------+
| Loss for the year | | (36,203,861) | (4,260,569) |
+------------------------------------------+---------+--------------+-------------+
| Attributable to: | | | |
+------------------------------------------+---------+--------------+-------------+
| Equity holders of the company | | (36,203,861) | (3,800,361) |
+------------------------------------------+---------+--------------+-------------+
| Minority interest | | - | (460,208) |
+------------------------------------------+---------+--------------+-------------+
| | | (36,203,861) | (4,260,569) |
+------------------------------------------+---------+--------------+-------------+
| | | | |
+------------------------------------------+---------+--------------+-------------+
| Earnings per share | | 2009 | 2008 |
| | | Cents | Cents |
+------------------------------------------+---------+--------------+-------------+
| Basic and diluted | 2 | (74.68) | (9.37) |
+------------------------------------------+---------+--------------+-------------+
Consolidated Statement of Recognised Income & Expenditure
+----------------------------------------------------+--------------+-------------+
| | Year Ended | Year Ended |
| | 30 June | 30 June |
| | 2009 | 2008 |
| | $ | $ |
+----------------------------------------------------+--------------+-------------+
| Loss for the year | (36,203,861) | (4,260,569) |
+----------------------------------------------------+--------------+-------------+
| Exchange differences on translation of foreign | 5,681,438 | (1,428,978) |
| operations | | |
+----------------------------------------------------+--------------+-------------+
| Total recognised income and expense for the year | (30,522,423) | (5,689,547) |
+----------------------------------------------------+--------------+-------------+
| Attributable to: | | |
+----------------------------------------------------+--------------+-------------+
| Equity holders of the parent | (30,522,423) | (5,229,339) |
+----------------------------------------------------+--------------+-------------+
| Minority interests | - | (460,208) |
+----------------------------------------------------+--------------+-------------+
| | (30,522,423) | (5,689,547) |
+----------------------------------------------------+--------------+-------------+
Consolidated Balance Sheet
+--------------------------------------------+---------+--------------+-------------+
| | Note | Year Ended | Year Ended |
| | | 30 June | 30 June |
| | | 2009 | 2008 |
| | | $ | $ |
+--------------------------------------------+---------+--------------+-------------+
| Non-current Assets | | | |
+--------------------------------------------+---------+--------------+-------------+
| Intangible assets | 3 | 5,898 | 704,974 |
+--------------------------------------------+---------+--------------+-------------+
| Mining properties | 4 | 21,385,440 | 32,372,602 |
+--------------------------------------------+---------+--------------+-------------+
| Property, plant and equipment | 5 | 2,350,920 | 1,371,728 |
+--------------------------------------------+---------+--------------+-------------+
| Trade and other receivables | 6 | 319,760 | 821,958 |
+--------------------------------------------+---------+--------------+-------------+
| | | 24,062,018 | 35,271,262 |
+--------------------------------------------+---------+--------------+-------------+
| Current Assets | | | |
+--------------------------------------------+---------+--------------+-------------+
| Inventories | 7 | 1,246,749 | 502,683 |
+--------------------------------------------+---------+--------------+-------------+
| Trade and other receivables | | 151,082 | 118,617 |
+--------------------------------------------+---------+--------------+-------------+
| Cash and cash equivalents | | 6,192,290 | 25,147,806 |
+--------------------------------------------+---------+--------------+-------------+
| | | 7,590,121 | 25,769,106 |
+--------------------------------------------+---------+--------------+-------------+
| Total Assets | | 31,652,139 | 61,040,368 |
+--------------------------------------------+---------+--------------+-------------+
| Current Liabilities | | | |
+--------------------------------------------+---------+--------------+-------------+
| Trade and other payables | 8 | (3,139,086) | (2,004,892) |
+--------------------------------------------+---------+--------------+-------------+
| Total Liabilities | | (3,139,086) | (2,004,892) |
+--------------------------------------------+---------+--------------+-------------+
| | | | |
+--------------------------------------------+---------+--------------+-------------+
| Net Assets | | 28,513,053 | 59,035,476 |
+--------------------------------------------+---------+--------------+-------------+
| Equity | | | |
+--------------------------------------------+---------+--------------+-------------+
| Share capital | 9 | 919,975 | 919,975 |
+--------------------------------------------+---------+--------------+-------------+
| Share premium account | | 66,169,804 | 66,169,804 |
+--------------------------------------------+---------+--------------+-------------+
| Foreign exchange reserve | | 4,249,508 | (1,431,930) |
+--------------------------------------------+---------+--------------+-------------+
| Reverse acquisition reserve | | 61,344 | 61,344 |
+--------------------------------------------+---------+--------------+-------------+
| Retained earnings | | (42,875,425) | (6,671,564) |
+--------------------------------------------+---------+--------------+-------------+
| Equity attributable to equity holders of | | 28,525,206 | 59,047,629 |
| the parent company | | | |
+--------------------------------------------+---------+--------------+-------------+
| Minority interest | | (12,153) | (12,153) |
+--------------------------------------------+---------+--------------+-------------+
| Total Equity | | 28,513,053 | 59,035,476 |
+--------------------------------------------+---------+--------------+-------------+
Consolidated Statement of Changes in Equity
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| | Attributable to Members of China Goldmines | | |
+------------------+---------------------------------------------------------------------------------+-----------+--------------+
| | Share | Share | Foreign | Reverse | Retained | Total | Minority | Total |
| | Capital | Premium | Exchange | Acquisition | Earnings | | Interest | Equity |
| | $ | Reserve | Reserve | Reserve | $ | | $ | |
| | | $ | $ | $ | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Balance at 30 | 390,151 | 6,725,683 | (2,952) | 61,344 | (2,871,203) | 4,303,023 | 448,055 | 4,751,078 |
| June 2007 | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Exchange | - | - | (1,428,978) | - | - | (1,428,978) | - | (1,428,978) |
| differences on | | | | | | | | |
| translation of | | | | | | | | |
| foreign | | | | | | | | |
| operation | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Net | - | - | (1,428,978) | - | - | (1,428,978) | - | (1,428,978) |
| income/(expense) | | | | | | | | |
| recognised | | | | | | | | |
| directly in | | | | | | | | |
| equity | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Loss for the | - | - | - | - | (3,800,361) | (3,800,361) | (460,208) | (4,260,569) |
| year | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Total recognised | - | - | (1,428,978) | - | (3,800,361) | (5,229,339) | (460,208) | (5,689,547) |
| income and | | | | | | | | |
| expense for the | | | | | | | | |
| year | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Issue of shares | 529,824 | 63,417,004 | - | - | - | 63,946,828 | - | 63,946,828 |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Equity issue | - | (3,972,883) | - | - | - | (3,972,883) | - | (3,972,883) |
| transaction | | | | | | | | |
| costs | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Balance at 30 | 919,975 | 66,169,804 | (1,431,930) | 61,344 | (6,671,564) | 59,047,629 | (12,153) | 59,035,476 |
| June 2008 | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Exchange | - | - | 5,681,438 | - | - | 5,681,438 | - | 5,681,438 |
| differences on | | | | | | | | |
| translation of | | | | | | | | |
| foreign | | | | | | | | |
| operation | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Net | - | - | 5,681,438 | - | - | 5,681,438 | - | 5,681,438 |
| income/(expense) | | | | | | | | |
| recognised | | | | | | | | |
| directly in | | | | | | | | |
| equity | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Loss for the | - | - | - | - | (36,203,861) | (36,203,861) | - | (36,203,861) |
| year | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Total recognised | - | - | 5,681,438 | - | (36,203,861) | (30,522,423) | - | (30,522,423) |
| income and | | | | | | | | |
| expense for the | | | | | | | | |
| year | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
| Balance at 30 | 919,975 | 66,169,804 | 4,249,508 | 61,344 | (42,875,425) | 28,525,206 | (12,153) | 28,513,053 |
| June 2009 | | | | | | | | |
+------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+
Statement of Consolidated Cash Flows
+-----------------------------------------+----------+--------------+--------------+------------+
| | | Year Ended | Year Ended |
| | | | 30 June 2008 |
| | | 30 June | $ |
| | | 2009 | |
| | | $ | |
+-----------------------------------------+----------+--------------+--------------+
| Operating Loss | | (25,880,851) | (7,168,376) |
+-----------------------------------------+----------+--------------+--------------+
| Adjustments for: | | | |
+-----------------------------------------+----------+--------------+--------------+
| Net exchange differences | (333,772) | (20,253) |
+----------------------------------------------------+--------------+--------------+
| Depreciation of property, plant and equipment | 628,332 | 122,727 |
+----------------------------------------------------+--------------+--------------+
| Impairment of property, plant and equipment | 174,451 | - |
+----------------------------------------------------+--------------+--------------+
| Amortisation and impairment of | | 19,081,174 | 145,270 |
| intangible assets | | | |
+-----------------------------------------+----------+--------------+--------------+
| Operating cash flows before movements in working | (6,330,666) | (6,920,632) |
| capital | | |
+----------------------------------------------------+--------------+--------------+
| (Increase) in inventories | | (741,999) | (502,683) |
+-----------------------------------------+----------+--------------+--------------+
| Decrease/(Increase) in receivables | | 484,198 | (449,863) |
+-----------------------------------------+----------+--------------+--------------+
| Increase in trade and other payables | | 1,422,962 | 1,289,638 |
+-----------------------------------------+----------+--------------+--------------+
| Net cash outflow from operating | | (5,165,505) | (6,583,540) |
| activities | | | |
+-----------------------------------------+----------+--------------+--------------+
| Investing activities | | | |
+-----------------------------------------+----------+--------------+--------------+
| Interest received | | 365,320 | 998,287 |
+-----------------------------------------+----------+--------------+--------------+
| Payments for licences, exploration and | (8,940,449) | (29,193,392) | |
| development expenditure | | | |
+----------------------------------------------------+--------------+--------------+------------+
| Payments for environmental deposits | | (14,907) | (303,863) |
+-----------------------------------------+----------+--------------+--------------+
| Purchases of property, plant and | | (1,529,522) | (1,247,931) |
| equipment | | | |
+-----------------------------------------+----------+--------------+--------------+
| Net cash used in investing activities | | (10,119,558) | (29,746,899) |
+-----------------------------------------+----------+--------------+--------------+
| Financing activities | | | |
+-----------------------------------------+----------+--------------+--------------+
| Proceeds on issue of ordinary share | | - | 62,775,554 |
| capital | | | |
+-----------------------------------------+----------+--------------+--------------+
| Payments for share issue expenses | | - | (3,972,881) |
+-----------------------------------------+----------+--------------+--------------+
| Net cash from financing activities | | - | 58,802,673 |
+-----------------------------------------+----------+--------------+--------------+
| Net (decrease)/increase in cash and cash | (15,285,063) | 22,472,234 | |
| equivalents | | | |
+----------------------------------------------------+--------------+--------------+------------+
| Cash and cash equivalents at beginning of year | 25,147,806 | 2,594,152 | |
+----------------------------------------------------+--------------+--------------+------------+
| Movement in foreign exchange rate | | (3,670,453) | 81,420 |
+-----------------------------------------+----------+--------------+--------------+
| Cash and cash equivalents at end of | | 6,192,290 | 25,147,806 |
| year | | | |
+-----------------------------------------+----------+--------------+--------------+------------+
Notes to the Preliminary Financial Results Announcements:-
1. Other gains and losses
+---------------------------------------------+--------------+-------------+
| | Year ended | Year ended |
| | 30 June | 30 June |
| | 2009 | 2008 |
| | $ | $ |
+---------------------------------------------+--------------+-------------+
| Foreign exchange (losses)/gains | (10,688,330) | 1,909,520 |
+---------------------------------------------+--------------+-------------+
2. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
+------------------------------+---------------+--------------+-------------+
| | | Year Ended | Year Ended |
| | | | 30 June |
| | | 30 June | 2008 |
| | | 2009 | $ |
| | | $ | |
+------------------------------+---------------+--------------+-------------+
| Earnings | (36,203,861) | (3,800,361) |
| Earnings for the purposes of basic and | | |
| diluted earnings per share being net profit | | |
| attributable to equity holders of the parent | | |
+----------------------------------------------+--------------+-------------+
| | | | |
+------------------------------+---------------+--------------+-------------+
| | | Number | Number |
+------------------------------+---------------+--------------+-------------+
| Number of shares | | | |
+------------------------------+---------------+--------------+-------------+
| Weighted average number of ordinary shares | 48,475,411 | 40,572,413 |
| for the purposes of basic and diluted | | |
| earnings per share | | |
+----------------------------------------------+--------------+-------------+
| Basic earnings per share | | (74.68) | (9.37) |
| | | cents | cents |
+------------------------------+---------------+--------------+-------------+
There are no dilutive instruments.
3. Intangible assets
+----------------------------------------+------------+-----------+-----------+
| | Business | Software | Total |
| | Licences | $ | $ |
| | Held | | |
| | $ | | |
+----------------------------------------+------------+-----------+-----------+
| Cost | | | |
+----------------------------------------+------------+-----------+-----------+
| At 30 June 2007 | 441,394 | 26,826 | 468,220 |
+----------------------------------------+------------+-----------+-----------+
| Additions | - | 394,321 | 394,321 |
+----------------------------------------+------------+-----------+-----------+
| Exchange differences | - | 86,649 | 86,649 |
+----------------------------------------+------------+-----------+-----------+
| At 30 June 2008 | 441,394 | 507,796 | 949,190 |
+----------------------------------------+------------+-----------+-----------+
| Additions | - | 41,310 | 41,310 |
+----------------------------------------+------------+-----------+-----------+
| Exchange differences | - | (79,623) | (79,623) |
+----------------------------------------+------------+-----------+-----------+
| At 30 June 2009 | 441,394 | 469,483 | 910,877 |
+----------------------------------------+------------+-----------+-----------+
| Accumulated Amortisation | |
+-----------------------------------------------------+-----------------------+
| At 30 June 2007 | (14,713) | (4,316) | (19,029) |
+----------------------------------------+------------+-----------+-----------+
| Charge for the year | (14,713) | (124,204) | (138,917) |
+----------------------------------------+------------+-----------+-----------+
| Exchange differences | - | (86,270) | (86,270) |
+----------------------------------------+------------+-----------+-----------+
| At 30 June 2008 | (29,426) | (214,790) | (244,216) |
+----------------------------------------+------------+-----------+-----------+
| Charge for the year | (14,713) | (280,666) | (295,379) |
+----------------------------------------+------------+-----------+-----------+
| Impairment | (397,255) | - | (397,255) |
+----------------------------------------+------------+-----------+-----------+
| Exchange differences | - | 31,871 | 31,871 |
+----------------------------------------+------------+-----------+-----------+
| At 30 June 2009 | (441,394) | (463,585) | (904,979) |
+----------------------------------------+------------+-----------+-----------+
| Carrying Amount | | | |
+----------------------------------------+------------+-----------+-----------+
| At 30 June 2009 | - | 5,898 | 5,898 |
+----------------------------------------+------------+-----------+-----------+
| At 30 June 2008 | 411,968 | 293,006 | 704,974 |
+----------------------------------------+------------+-----------+-----------+
Refer to Note 4 for details of the impairment.
4. Mining properties
+--------------------+-----------+-------------+-------------+-------------+--------------+
| | Land | Explor. | Mine | Mining | Total |
| | Comp. | Expend. | Develop. | Licences | $ |
| | Costs | $ | Expend. | $ | |
| | $ | | $ | | |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Cost | | | | | |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| At 30 June 2007 | - | 1,780,785 | - | - | 1,780,785 |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Additions | 119,771 | 824,016 | 3,645,980 | 24,209,304 | 28,799,071 |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Exchange | 7,141 | - | - | 1,792,337 | 1,799,478 |
| differences | | | | | |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| At 30 June 2008 | 126,912 | 2,604,801 | 3,645,980 | 26,001,641 | 32,379,334 |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Additions | 534,523 | 2,082,265 | 5,341,995 | - | 7,958,783 |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Exchange | 522 | (113,316) | (405,843) | 106,930 | (411,707) |
| differences | | | | | |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| At 30 June 2009 | 661,957 | 4,573,750 | 8,582,132 | 26,108,571 | 39,926,410 |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Accumulated | - | - | - | - | - |
| Amortisation | | | | | |
| At 30 June 2007 | | | | | |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Charge for the | (6,353) | - | - | - | (6,353) |
| year | | | | | |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Exchange | (379) | - | - | - | (379) |
| differences | | | | | |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| At 30 June 2008 | (6,732) | - | - | - | (6,732) |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Charge for the | (145,869) | - | - | - | (145,869) |
| year | | | | | |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Impairment | - | (4,573,750) | (8,582,132) | (5,232,459) | (18,388,341) |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Exchange | (28) | - | - | - | (28) |
| differences | | | | | |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| At 30 June 2009 | (152,629) | (4,573,750) | (8,582,132) | (5,232,459) | (18,540,970) |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| Carrying Amount | | | | | |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| At 30 June 2009 | 509,328 | - | - | 20,876,112 | 21,385,440 |
+--------------------+-----------+-------------+-------------+-------------+--------------+
| At 30 June 2008 | 120,180 | 2,604,801 | 3,645,980 | 26,001,641 | 32,372,602 |
+--------------------+-----------+-------------+-------------+-------------+--------------+
The ultimate recoupment of costs carried forward for exploration and evaluation
phases is dependent on the successful development and commercial exploitation or
sale of the respective mining areas.
Amortisation of the costs carried forward for the development phase and the
mining licences is not being charged pending the commencement of commercial
levels of production. The business licences are being amortised over 30 years,
and software over 5 years, and land compensation costs over 2 years.
The Company shall start to amortise its mining related intangible assets when
the relevant area of interest is capable for commercial production (i.e. when
the relevant mining assets are available for use).
The development costs incurred on the area of interest prior to commercial
production are capitalised/expensed in accordance with the Company's accounting
policies applicable.
Management has determined that the area of interest (Shenjiaya Project) owned by
the Company is yet to be capable for commercial production at the balance sheet
date and no amortisation is charged on the relevant mining related intangible
assets.
Key factors considered but not limited to:
i) nominated percentage of design capacity for the mines;
ii) mineral recoveries at or near expected levels; and
iii) the achievement of continuous production or other output.
On 26 August 2009 the Companys 100% owned subsidiary, Global Resource Ventures
Limited ("GRV"), signed a Share Purchase Agreement with Cosmos Castle Management
Limited, a company incorporated in the British Virgin Islands, to sell all of
the issued securities of Westralian Resources Pty Ltd ("Westralian").
The carrying values of assets disposed of were written down to equal the value
of proceeds received being the lower of net realisable value and value in use.
This has resulted in impairment losses being recognised against the different
categories of mining properties as shown in the table above. As the entire
project has been disposed of following the sale of Westralian, the Group will no
longer receive any future benefit from the capitalised exploration and mine
development costs, hence these amounts have been impaired to reflect amounts
received. The mining licences embody the value of the project being disposed of
and have been impaired to the net value of the consideration being received, as
adjusted by the net assets of the entities being disposed.
5. Property Plant and Equipment
+-----------+--------+--+-----------+---------------+--+----------+------------+--+-----------+--+
| | | Construction | Leasehold | Motor | Furniture, | Total |
| | | in progress | improvements | vehicles | fittings | $ |
| | | $ | $ | $ | and | |
| | | | | | equipment | |
| | | | | | $ | |
+-----------+--------+--------------+---------------+-------------+------------+-----------------+
| Cost | | | | | | |
+-----------+--------+--------------+---------------+-------------+------------+-----------------+
| At 30 June 2007 | - | 16,567 | 69,845 | 224,879 | 311,291 |
+--------------------+--------------+---------------+-------------+------------+-----------------+
| Additions | | - | - | 54,965 | 1,192,966 | 1,247,931 |
+-----------+--------+--------------+---------------+-------------+------------+-----------------+
| Exchange | - | - | 7,342 | 10,910 | 18,252 |
| differences | | | | | |
+--------------------+--------------+---------------+-------------+------------+-----------------+
| Disposals | - | (16,567) | - | - | (16,567) |
+--------------------+--------------+---------------+-------------+------------+-----------------+
| At 30 June 2008 | - | - | 132,152 | 1,428,755 | 1,560,907 |
+--------------------+--------------+---------------+-------------+------------+-----------------+
| Additions | 208,497 | - | 185,847 | 1,114,896 | 1,509,240 |
+--------------------+--------------+---------------+-------------+------------+-----------------+
| Exchange | - | - | (532) | (96,095) | (96,627) |
| differences | | | | | |
+--------------------+--------------+---------------+-------------+------------+-----------------+
| At 30 June 2009 | 208,497 | - | 317,467 | 2,447,556 | 2,973,520 |
+--------------------+--------------+---------------+-------------+------------+-----------------+
| Accumulated depreciation | | | | |
+-----------------------------------+------------------+----------+---------------+-----------+
| At 30 June 2007 | - | (13,920) | (14,582) | (42,525) | (71,027) |
+-----------------------+-----------+------------------+----------+---------------+-----------+
| Charge for the year | - | - | (3,950) | (118,777) | (122,727) |
+-----------------------+-----------+------------------+----------+---------------+-----------+
| Exchange differences | - | - | 1,751 | (11,096) | (9,345) |
+-----------------------+-----------+------------------+----------+---------------+-----------+
| Disposals | - | 13,920 | - | - | 13,920 |
+-----------------------+-----------+------------------+----------+---------------+-----------+
| At 30 June 2008 | - | - | (16,781) | (172,398) | (189,179) |
+-----------------------+-----------+------------------+----------+---------------+-----------+
| Charge for the year | - | - | (16,127) | (228,601) | (244,728) |
+-----------------------+-----------+------------------+----------+---------------+-----------+
| Exchange differences | - | - | 58 | (14,299) | (14,241) |
+-----------------------+-----------+------------------+----------+---------------+-----------+
| Impairment | - | - | - | (174,452) | (174,452) |
+-----------------------+-----------+------------------+----------+---------------+-----------+
| At 30 June 2009 | - | - | (32,850) | (589,750) | (622,600) |
+-----------------------+-----------+------------------+----------+---------------+-----------+
| Carrying amount | | | | | |
+-----------------------+-----------+------------------+----------+---------------+-----------+
| At 30 June 2009 | 208,497 | - | 284,617 | 1,857,806 | 2,350,920 |
+-----------------------+-----------+------------------+----------+---------------+-----------+
| At 30 June 2008 | - | - | 115,371 | 1,256,357 | 1,371,728 |
+-----------+--------+--+-----------+---------------+--+----------+------------+--+-----------+--+
No assets are pledged as security for liabilities.
Refer to Note 4 for details of the impairment.
6. Trade and other receivables
Amounts due after more than one year
+------------------------------+----+----------+-------------+--------------+
| | | | 30 June | 30 June 2008 |
| | | | 2009 | $ |
| | | | $ | |
+------------------------------+----+----------+-------------+--------------+
| Prepayments | | | - | 518,095 |
| Environmental remediation | | | 319,760 | 303,863 |
| deposits | | | | |
+------------------------------+----+----------+-------------+--------------+
| | | | 319,760 | 821,958 |
+------------------------------+----+----------+-------------+--------------+
| The environmental remediation deposits were paid to the Land and |
| Resources Department of Hunan Province. The deposit represents an |
| environmental security bond over the eight operating gold mines. The |
| environmental deposit remains in place for the duration of the mining |
| licence. |
+------------------------------+----+----------+-------------+--------------+
7. Inventories
+---------------------------+-------+-----------+------------+--------------+
| | | | 30 June | 30 June 2008 |
| | | | 2009 | $ |
| | | | $ | |
+---------------------------+-------+-----------+------------+--------------+
| Raw materials and stores | | | 596,274 | 360,286 |
| - at cost | | | 82,908 | 142,397 |
| Work in progress - at | | | 567,567 | - |
| cost | | | | |
| Finished goods - at cost | | | | |
+---------------------------+-------+-----------+------------+--------------+
| | | | 1,246,749 | 502,683 |
+---------------------------+-------+-----------+------------+--------------+
8. Trade and other payables
+--------------+--+-----------------------------+------------+------------+
| | | | 30 June | 30 June |
| | | | 2009 | 2008 |
| | | | $ | $ |
+--------------+--+-----------------------------+------------+------------+
| Trade payables | 186,585 | 371,897 |
+-----------------------------------------------+------------+------------+
| Other payables and accruals | 2,952,501 | 1,632,995 |
+-----------------------------------------------+------------+------------+
| | | | 3,139,086 | 2,004,892 |
+--------------+--+-----------------------------+------------+------------+
Trade and other payables principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for trade purchases
is 60 days, (2008: 55 days).
The directors consider that the carrying amount of trade and other payables
approximates to their fair value.
9. Share Capital
+----------------------------------------------+------------+------------+
| | 30 June | 30 June |
| | 2009 | 2008 |
| | $ | $ |
+----------------------------------------------+------------+------------+
| Authorised: | | |
+----------------------------------------------+------------+------------+
| 55,000,000 ordinary shares of GBP0.01 each | 1,043,678 | 1,043,678 |
+----------------------------------------------+------------+------------+
| | | |
+----------------------------------------------+------------+------------+
| Issued and fully paid: | | |
+----------------------------------------------+------------+------------+
| 48,475,411 ordinary shares of GBP0.01 each | 919,975 | 919,975 |
+----------------------------------------------+------------+------------+
(2008: 48,475,411 ordinary shares of GBP0.01 each)
On 7 February 2006, 7,500,000 shares of GBP0.01 ($0.02) each were placed at a
premium of GBP0.59 ($1.04) each.
The Company has one class of ordinary shares which carries no right to fixed
income.
On 7 August 2007, 900,000 shares were placed at 140 pence per share to raise
GBP1,260,000 to meet immediate working capital needs.
On 22 October 2007 25,025,416 million shares were placed at 120 pence per share
to raise GBP30,000,000 to secure the transfer of the eight gold mines and then
to invest in the consolidation and development of the existing mining
activities. Costs of $3,972,883 arose on the placement of the shares.
10. Contingent liabilities
There were no material contingent liabilities of the Group or Company at the
Balance Sheet date.
11. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. Transactions between the Group and related parties are disclosed below.
Trading transactions
During the year, Group companies entered into the following transactions with
related parties who are not members of the Group:
+---------------------------------+----------+---------+---------+----------+
| | Purchase of | Amounts owed to |
| | goods / | related parties |
| | services | |
+---------------------------------+--------------------+--------------------+
| | 2009 | 2008 | 2009 | 2008 |
| | $ | $ | $ | $ |
+---------------------------------+----------+---------+---------+----------+
| Bowlane Nominees Ltd | 343,200 | 295,096 | - | - |
+---------------------------------+----------+---------+---------+----------+
| Jinan Limited | 288,000 | 242,776 | - | - |
+---------------------------------+----------+---------+---------+----------+
| Metallurgical Management | 32,800 | 20,655 | - | - |
| Services (Pty) Ltd | | | | |
+---------------------------------+----------+---------+---------+----------+
| Wildewood Limited | 19,000 | 26,000 | - | - |
+---------------------------------+----------+---------+---------+----------+
| Linq Corporate Pty Ltd | 113,200 | 72,000 | - | - |
+---------------------------------+----------+---------+---------+----------+
Bowlane Nominees Ltd and Immo Services (WA) Pty Ltd are companies that provide
managerial services to the Group, on behalf of Frank Vanspeybroeck, a director
of China Goldmines plc. USD$343,200 (2008: USD$295,096) was paid in accordance
with his agreed service agreement.
Jinan Limited is a company that provides financial and accounting services to
the Group, on behalf of Marinko Vidovich, a director of China Goldmines plc.
$288,000 (2008: $242,776) was paid in accordance with his agreed service
agreement.
Metallurgical Management Services (Pty) Ltd is a company that provides
metallurgical consultancy services to the Group. Evan Kirby is a director of
both this company and China Goldmines plc. USD$32,800 (2008: USD$20,655) was
paid in accordance with commercial rates.
Wildewood Limited is a company in which Mr Worrall is a director and
shareholder, supplies consultancy services to the Company for Mr Worrall who is
a director of China Goldmines plc. USD$19,000 (2008: USD$26,000) was paid in
accordance with commercial rates.
Linq Corporate Pty Ltd, a company of which Mr Donner is a director, has provided
in the period corporate consultancy services utilising a number of Linq
Corporate employees amounting to USD$113,200 (2008 : USD$72,000).
All services were provided under normal commercial terms.
The amounts outstanding are unsecured and will be settled in cash. No guarantees
have been given or received.
Remuneration of key management personnel
The emoluments of the directors, who are the key management personnel of the
Group, were USD$253,000 (2008: USD$284,000). These do not include the amounts
paid in consultancy fees noted on the previous page.
12. Events after the Balance Sheet Date
On 26 August 2009 the Companys 100% owned subsidiary, Global Resource Ventures
Limited ("GRV"), signed a Share Purchase Agreement with Cosmos Castle Management
Limited, a company incorporated in the British Virgin Islands, to sell all of
the issued securities of Westralian Resources Pty Ltd ("Westralian"). Settlement
of the sale occurred on 29 September 2009, from which date Westralian and its
80% owned subsidiary Hunan Westralian Mining Co., Ltd will cease to be
consolidated into the Group. GRV will receive total net cash consideration of
USD 23,488,674 for the sale of Westralian.
The carrying values of assets disposed of were written down to equal the value
of proceeds received as at 30 September 2009. The effect on the income
statements for the year ending 30 June 2009 is summarised as follows:
+--------------------------------------------+--------------+------------+
| | Consolidated | Company |
| | $ | $ |
+--------------------------------------------+--------------+------------+
| Impairment of investment in subsidiary | - | 195,224 |
+--------------------------------------------+--------------+------------+
| Impairment of loans to related parties | - | 24,171,937 |
+--------------------------------------------+--------------+------------+
| Impairment of plant and equipment | 174,552 | - |
+--------------------------------------------+--------------+------------+
| Impairment of mining properties | 18,388,341 | - |
+--------------------------------------------+--------------+------------+
| Net impact of disposal on income | 18,562,893 | 24,367,161 |
| statements | | |
+--------------------------------------------+--------------+------------+
13. Other information
The financial information set out above does not constitute group's statutory
financial statements for the years ended 30 June 2009 and 30 June 2008 but is
derived from them. The 2008 financial statements have been filed with the
Registrar of Companies; their report was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985. Whilst the
auditors have not reported on the financial statements for the year ended 30
June 2009, they anticipate issuing an unqualified report which will not contain
statements under section 498(2) or (3) of the Companies Act 2006. The statutory
accounts for the year ended 30 June 2009 will be finalised on the basis of the
financial information presented by the Directors in this preliminary
announcement and will be delivered to the Registrar of Companies following the
Company's Annual General Meeting. The financial information set out in this
announcement was approved by the Board of Directors on 24 November 2009.
Significant Accounting Policies for the year ended 30 June 2009
China Goldmines Plc (the "Company") is a company domiciled in the United
Kingdom. The consolidated financial statements of the Company for the year ended
30 June 2009 comprise those of the Company and its subsidiaries (together
referred to as the "group") and the group's interest in associates and
jointly-controlled entities.
The financial statements were authorised for issue by the directors on 24
November 2009.
Basis of Preparation
The consolidated financial statements have been prepared and approved by the
directors in accordance with International Financial Reporting Standards as
adopted by the EU.
The financial statements are presented in USD. They are prepared on the
historical cost basis. However, the financial information included in this
announcement does not in itself contain sufficient information to comply with
IFRS.
The accounting policies applied in preparing this financial information are
consistent with the group's financial statements for the year ended 30 June
2009. New accounting standards that came into force in the year did not require
restatement of comparatives nor had any significant impact on the group's
consolidated results or financial position.
The preparation of financial statements under IFRS requires management to make
judgements, estimates and assumptions about the reported amounts of assets and
liabilities, income and expenses and the disclosure of contingent assets and
liabilities. The estimates and associated assumptions are based on experience.
Actual results may differ from these estimates. The estimates and underlying
assumptions are reviewed on a regular basis. Revisions to accounting estimates
are recognised from the period in which the estimates are revised.
The consolidated financial statements of the group are prepared for the year
ended 30 June 2009.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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