TIDMKGLD
RNS Number : 1858T
Kolar Gold Limited
10 December 2012
10 December 2012
Kolar Gold Ltd
Final results for year ended 30 June 2012
Notice of Annual General Meeting
Kolar Gold Limited ("Kolar Gold" or "KGL" or the "Company"), the
Indian focused gold exploration and mine development company,
announces its audited results for the year ended 30 June 2012.
HIGHLIGHTS
Corporate and Operational:
-- 8,000 metres of Diamond and RC drilling activities completed
on target deposits at South Kolar licence area.
-- Consolidation and review of exploration data generated since
February 2011 to determine next phase drill targets
-- New JORC compliant gold resource at the Mallappakonda deposit
of 3.46 million tonnes at an average grade of 1.76 g/t gold
containing 195,000 oz of gold.
-- The Group's total JORC compliant gold resource stands at
approximately 226,000 ounces of gold.
-- Drilling programme of an additional 160 holes submitted to government at the Chigargunta and Mallappakonda deposits; awaiting forestry approval.
-- Increased focus and resources to be applied to the permitting
process which has been slower than anticipated due to the current
state of flux in India's domestic mining regime
-- Appointment of N+1 Singer as Nominated Adviser and joint broker.
Financial:
-- Strong cash position at 30 June 2011 of GBP8.13m (2010: GBP11.54m)
Post Period:
-- Richard Johnson steps down as COO.
Nick Spencer, Chief Executive Officer of Kolar Gold Limited,
comments:
"It has been a period of solid operational progress for Kolar
Gold following our listing on the AIM Market in June 2011. We were
pleased to treble the JORC resource at the Mallappakonda deposit
after exploration work conducted on our granted South Kolar licence
area. Upon receiving forestry approval, the next phase of
exploration will begin in the key target areas of Chigargunta and
Mallappakonda.
"In conjunction with our local partners, we have increased
efforts with regard to accelerating the permitting process on
priority licences which has been slower than expected. We have also
reviewed and investigated a number of additional gold projects in
India with the aim of building our position into the leading Indian
gold exploration and development company. Kolar remains well
capitalised which is vital in these current market conditions."
Notice of AGM
The second Annual General Meeting of Shareholders of the Company
will be held at Frances House, Sir William Place, St Peter Port,
Guernsey on Monday 31 December 2012 at 9.30 am.
Copies of the 2012 Annual Report and Notice of AGM will be
posted to shareholders on Tuesday 11 December following which they
may be obtained from the date of posting for one month free of
charge from the registered office of the Company, Frances House,
Sir William Place, St Peter Port, Guernsey, as well as from the
Company's web site www.kolargold.com.au
For further information:
Kolar Gold Limited
------------------------------- -----------------
Nick Spencer +617 3846 0211
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N+1 Singer
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Nomad and Joint Broker
------------------------------- -----------------
James Maxwell/Jenny Wyllie +44 20 7496 3000
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Ocean Equities Limited
------------------------------- -----------------
Joint Broker
------------------------------- -----------------
Will Slack +44 20 7786 4370
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Tavistock Communications
------------------------------- -----------------
Ed Portman / Jessica Fontaine +44 20 7920 3150
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About Kolar Gold Limited
Kolar Gold is an Indian gold exploration and development
company, listed on the AIM market (Ticker: KGLD) that has an
experienced international board and strong local partners.
KGL has rights to explore and develop one prospecting licence
and 13 further licence applications in the Kolar Gold Belt, an 80
kilometre long Archaean Greenstone Belt, in Southern India. The
Kolar Gold Belt is one of the most prospective underdeveloped
Archaean Greenstone Belts in the world and is regarded by Mr Andrew
J Vigar of Mining Associates Limited, the Competent Person, as
comparable to the Archaean Greenstone Belts of South Africa, Canada
and Western Australia which have similar geology, structure and
style of mineralisation. This project area includes 32 known
mineralised prospects and covers 568 square kilometres in the
southern states of Andhra Pradesh, Karnataka and Tamil Nadu. KGL
commenced exploration on the first Prospecting Licence in South
Kolar in February 2011.
KGL is also jointly pursuing, with the mine employee unions, the
acquisition and revival of the neighbouring historic Kolar Gold
Fields which has produced 25 million ounces of gold at 15.9 grams
per tonne over 120 years until closure in 2001.
Chairman's Report
Dear Shareholder
This is my second Chairman's Report to the shareholders of Kolar
Gold Limited. It has been a year of consolidation and challenges
for the Company.
On a macro level, India's deeply entrenched passion for gold,
combined with low domestic production, results in India importing
most of its gold requirements. During 2011 more then one third of
all gold produced globally was imported to India. Yet India sits on
some of the most prospective gold terrain in the world.
India's domestic mining regime is in a state of flux. The
anticipated passing at the time of the Company's admission to AIM
in June 2011 of the Mines and Minerals Development and Regulation
(MMDR) Bill, which is approved by Cabinet, still awaits approval by
the Indian Parliament. Indeed, now, the timing of the passing of
this Act and the exact terms is unclear. This, together with the
examination and consequences of the historic privatization of
assets and granting of licences in the mining and other industries
in India has resulted in an environment in Delhi that is not
conducive to prompt and timely decision making, even when all the
relevant processes are followed diligently.
This has led to the slower than anticipated grant of new
licenses to GMSI of which Kolar Gold would be the beneficiary.
Consequently, the Board is reviewing its exploration strategy with
a view to utilizing its cash resources to create the best value for
shareholders over the near and medium term. As part of a refined
strategy, more management and cash resources are likely to be
focused on assisting and working with GMSI to procure granting of
the few key licenses that Kolar Gold has prioritised. We are also
in discussions with additional local mining and permitting partners
to explore whether they can assist us with faster permitting in
India. At this point in time, we have no reason to believe that we
will not ultimately get the additional licenses as anticipated.
It is hoped that the MMDR, once passed, will create a better
legislative environment for attracting investment and technology to
the mining sector. This would help India to develop its mining
sector to its full potential with companies in the sector operating
to international best practice standards. Recent clampdowns on
illegal mining will also assist in this area.
On the exploration front, there have been encouraging
exploration results at South Kolar with the two rig programme
confirming some high grade veins and wider low grade sections at NE
Chigargunta and Mallappakonda areas. The historic gold resource at
the Mallappakonda deposit of 61,527oz defined by the Minerals
Exploration Corporation Limited has been more than trebled to
195,000 oz of gold. There remains considerable scope to add more
ounces to this deposit with further resource drilling.
Whilst we still have preferential rights over the Kolar belt
projects, the permitting processes and forestry approvals are more
complicated than expected, even over the asset over which we have
rights. The granting of approvals from organisations like the
forestry commission has been slow and unpredictable and this had
had an impact on our rate of exploration. We have, however, drilled
more than 8,000m and we are consolidating and interpreting all the
data generated. A phase 2 drilling programme of 160 holes has been
submitted to the authorities and we expect to start drilling again
as soon as the approvals are received, subject to prioritising the
use of our cash resources.
Under the terms of its grant, the South Kolar prospecting
license expired on 17 July 2012, and in accordance with industry
practice GMSI applied for a renewal of this license on 17 April
2012. This site was inspected by the Department of Mines and
Geology, Government of Andhra Pradesh, on 11 July 2012 and to date
GMSI has not received any subsequent communication from the
Department of Mines and Geology. Under the terms of the license,
the State Government has the right to dispose of the prospecting
license prior to the expiry date. If this does not happen, the
prospecting license is then deemed to be renewed.
Our balance sheet remains strong, with more than GBP8m in cash
at year end, providing us with sufficient funds to execute our
current exploration programme, which is under constant review, for
the next 12-18 months. We continue to work ever more closely with
our partners, including GMSI, on permitting and exploration.
Our relationship with BGML ex-employees and their representative
bodies remains strong and together we are progressing the historic
BGML mine revival project in the Supreme Court to secure a final
verdict to proceed with the sale tender process.
We also continue to review a number of additional quality gold
projects in India with a view to expanding our portfolio of
licences and licence applications, if that provides a better and
enhanced way of developing shareholder value within a reasonable
timeframe.
We have confirmed we are in a very prospective gold province and
have now established our presence in India. Our foundations are
set, the portfolio of licences and licence applications is
outstanding and our priority focus remains execution of permits in
key areas with our collective resources and local partners. We are
committed to building the leading gold explorer and mine developer
in India.
Finally, I have to report the resignation of Richard Johnson,
our COO in India. The Company remains well served by a strong
technical team which will expand as Kolar Gold grows.
Harvinder Hungin
Chairman
Kolar Gold Limited
7(th) December 2012
Chief Executive Officer's Report
In the last 12 months, we have made solid progress both
operationally and in respect of corporate activities.
Firstly, we successfully upgraded the JORC gold resource at our
Mallappakonda deposit in the South Kolar licence area (GP 13) from
61,527 to 195,000 ounces of gold. This brings our total JORC
compliant resource to date to approximately 226,000 ounces of gold.
Mallappakonda and Chigargunta remain our priority targets for
further resource drilling. A number of gold prospects in the South
Kolar license area have been confirmed from significant anomalies
via an Induced Polarisation survey, geochemical analysis of
samples, detailed mapping, filtering magnetics and interpretation.
It is expected that these targets will be further drilled in the
next phase of exploration.
Secondly, given the slower than expected grant of new licenses
we have increased efforts with our local partners to expedite
permitting on priority licenses. Permitting in India is a complex
and lengthy process which needs continual application of key
resources to move files through a large number of bureaucratic
steps. Our established partner, GMSI, a Bangalore based exploration
group, is one of the few private groups that has succeeded by
securing 22 Reconnaissance Permits and 2 Prospecting Licences in
the gold sector a number of which we have rights over. We continue
to work closely with GMSI and are also in discussion with a number
of other sizeable mining partners who regularly and successfully
achieve permit grants in their sphere of business.
SUN performance warrants
KG has granted their local partner SUN Mining, two tranches of
Performance Warrants to be issued for assisting with operations in
India and performing an agreed set of services. SUN is due to
receive its first set of warrants and the board intends to issue
these in due course.
Exploration Programme
We have established our operations at South Kolar with an
office, accommodation and a workshop in the area and have been
employing approximately 30 local people on the drill programme and
exploration support services.
Kolar Gold has been working closely with GMSI geologists on
drilling and exploration work at South Kolar. To date 8,000m of
both Reverse Circulation (RC) and diamond drilling has been
completed on our target deposits and prospects. Drilling has
principally targeted known zones of mineralisation and extensions
of auriferous lodes previously mined at the Chigargunta mine in the
south and the Bisanatham mine in the north of the licence area.
The Drilling in the South Kolar prospect at NE Chigargunta, the
Chigargunta Eastern lodes and the Mallappakonda deposit has
successfully validated historical drilling results and also
provided valuable fresh geological data on the host rocks and
structural controls to mineralisation.
Following a thorough review of exploration data in February 2012
all data generated from stage one of the drilling programme that
had been underway in 2011 was consolidated, digitised and
interpreted. This data included full surface geological mapping, a
reinterpretation of the geophysics, a 40 km line of detailed
Induced Polarisation surveys (IP), which confirmed the continuity
of auriferous structures previously mined at the Chigargunta and
Old Bisanatham mines, and a structural analysis. The revised
interpretation also identified a number of significant anomalies
along the north-south trend of the greenstone belt that indicated a
number of good target areas for drilling.
This IP data was combined with a large database of information
comprising ASTER imaging, close spaced ground magnetics, IP
surveys, mapping, Reverse Circulation ("RC") and diamond drilling.
This in turn has assisted with the identification of larger
structural anomalies, likely mineralisation trends and drill target
generation.
A drill plan has been drawn up for an additional 160 drill holes
in the Chigargunta and Mallapakonda areas, to be implemented upon
obtaining forestry permission, subject to prioritizing the use of
our cash resources. The application for this permit has been
submitted to the authorities and is being expedited with
priority.
Chigargunta NE and Eastern Lodes
Gold mineralisation is localised along shear zones,
characterised by profuse quartz veining and hydrothermal
alteration. The current Chigargunta NE JORC compliant resource is
13,182 ounces of gold due to limited drilling under the earlier
Reconnaissance Permit.
Currently, in Chigargunta NE, we have completed thirteen diamond
drill holes, with all holes intersecting mineralised zones.
Logging, sampling and further assays are underway and a full review
of data and geological modelling is being carried out.
The Chigargunta Eastern Lodes are mapped and identified on
surface. An access road was cut and a small causeway built for the
core rig; drilling commenced there in October 2011. A further
drilling programme, subject to our prioritising and our cash
reserves, is proposed upon the granting of the forestry permit.
Mallappakonda
The Mallappakonda deposit was first identified during regional
exploration conducted by the Geological Survey of India to the
south of Kolar Gold Fields in 1975-79. The mineralisation here
occurs as sulphidic zones associated with banded iron formation
within mafic units. Several substantial ancient workings are seen
at surface. Of the 800m strike length of mineralisation at the end
of the prominent Mallappakonda Hill, only 150m has been evaluated
with drilling. Historically there have been three levels of
underground development.
The newly revised Mallappakonda gold resource, which was
calculated from recent and historical drill data, is 3.46 million
tonnes of ore at an average grade of 1.76 g/t gold, containing
195,000 ounces of gold. The revised resource estimate has been
compiled by the Company's Competent Person, Mr Andrew J Vigar of
Mining Associates and all work has been conducted under JORC
guidelines.
Further resource delineation work is proposed at the
Mallappakonda deposit via an additional 40 surface drill holes and,
subject to prioritising and cash reserves, an underground programme
of resource drilling from two existing adits. Clearing work has
been undertaken and approvals have been sought to reopen the adits
in preparation for underground drilling.
Bharat Gold Mines Limited (BGML) Acquisition
Kolar Gold, jointly with its partner, the combined BGML
ex-employee unions, and with the assistance of SUN Mining,
continues to make progress with the Government of India in the
pursuit of the acquisition and development of the BGML mine assets.
The matter has been passed to the Supreme Court for final direction
on the tender sale process. We are encouraged with the recent
agreement in the Supreme Court to proceed with the sale and revival
of the BGML mine by tender process. We are awaiting the court order
to ratify this process and the issue of the sale tender documents
which have been drafted by Ernst & Young as advisors to the
government.
We believe that exploration and development of the Kolar Gold
Projects, which surround the historic BGML mines, will demonstrate
our commitment to gold exploration in this region and should assist
this process. Any acquisition of the assets would require
additional funding from the market.
The next 12 months are expected to be a very busy time for Kolar
Gold as we build a strong presence in India and proceed with
focussed effort on permitting and selective exploration of these
potentially world class gold assets.
Nick Spencer
Chief Executive Officer
Kolar Gold Limited
7(th) December 2012
Kolar Gold Limited and its controlled entities
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2012
Group
Note 2012 2011
GBP GBP
SUN Mining warrants expensed for
services 9 (571,391) (547,006)
Broker warrants expensed for services 9 - (492,510)
Shares and options issued by Kolar
Gold plc to employees and consultants 9 - (294,241)
Options to Directors 9 - (374,975)
Salaries and wages (514,527) (697,008)
Other administrative expenses (1,390,482) (818,127)
Loss from operating activities (2,476,400) (3,223,867)
------------- ------------
Finance income 147,889 530
Finance costs (1,087) (32,953)
Net financing income/(expense) 146,802 (32,423)
------------- ------------
Loss before tax (2,329,598) (3,256,290)
Income tax expense 5 - -
------------- ------------
Loss for the year (2,329,598) (3,256,290)
Other comprehensive loss
Foreign exchange translation variances (52,788) 142,231
------------- ------------
Total comprehensive loss for the
year (2,382,386) (3,114,059)
============= ============
Basic and diluted loss per share
(p) 11 2.33 5.69
All results are derived from continuing activities.
Kolar Gold Limited and its controlled entities
Consolidated Statement of Financial Position
as at 30 June 2012
Group
2012 2011
Note GBP GBP
Non-current assets
Plant and equipment 25,238 21,859
Exploration and evaluation assets 6 5,496,153 4,496,933
Total non-current assets 5,521,391 4,518,792
------------ -----------------
Current assets
Trade and other receivables 54,824 59,642
Prepayments and other assets 50,687 37,751
Cash and cash equivalents 8,131,892 11,544,630
Total current assets 8,237,403 11,642,023
------------ -----------------
Total assets 13,758,794 16,160,815
------------ -----------------
Current liabilities
Trade and other payables 7 423,513 1,085,852
Employee benefits 8 178,956 113,416
Total current liabilities 602,469 1,199,268
------------ -----------------
Non-current liabilities
Employee benefits 8 2,992 43,457
------------ -----------------
Total non-current liabilities 2,992 43,457
------------ -----------------
Total liabilities 605,461 1,242,725
------------ -----------------
Total net assets 13,153,333 14,918,090
============ =================
Equity
Share capital 7,010,625 7,001,696
Share premium 15,700,535 15,663,226
Reserves 4,095,798 3,577,195
Accumulated losses (13,653,625) (11,324,027)
------------ -----------------
Total equity 13,153,333 14,918,090
============ =================
These financial statements were approved by the Board of
Directors on 7th December 2012 and were signed on its behalf
by:
Harvinder Hungin
Chairman
Kolar Gold Limited and its controlled entities
Consolidated Statement of Changes in Equity
for year ended 30 June 2012
Share Share premium Share Foreign Accumulated Total equity
capital based exchange losses
payment translation
reserve reserve
GBP GBP GBP GBP GBP GBP
Balance at 1 July
2010 3,544,336 3,715,557 696,321 (75,327) (8,067,737) (186,850)
Loss for the year - - - - (3,256,290) (3,256,290)
Other comprehensive
loss - foreign exchange
translation variances - - - 142,231 - 142,231
---------- -------------- ---------- ------------- ------------- -------------
Total comprehensive
loss for the year - - - 142,231 (3,256,290) (3,114,059)
---------- -------------- ---------- ------------- ------------- -------------
Issue of ordinary
shares 3,735,150 13,816,568 - - - 17,551,718
Cancellation of shares (277,790) 277,790 - - - -
Share issue costs - (2,146,689) - - - (2,146,689)
Equity-settled transactions - - 2,813,970 - - 2,813,970
Total contributions
by and distributions
to owners 3,457,360 11,947,669 2,813,970 - - 18,218,999
---------- -------------- ---------- ------------- ------------- -------------
Balance at 30 June
2011 7,001,696 15,663,226 3,510,291 66,904 (11,324,027) 14,918,090
---------- -------------- ---------- ------------- ------------- -------------
Loss for the year - - - - (2,329,598) (2,329,598)
Other comprehensive
loss - foreign exchange
translation variances - - - (52,788) - (52,788)
---------- -------------- ---------- ------------- ------------- -------------
Total comprehensive
loss for the year - - - (52,788) (2,329,598) (2,382,386)
---------- -------------- ---------- ------------- ------------- -------------
Issue of ordinary
shares 8,929 37,309 - - - 46,238
---------- -------------- ---------- ------------- ------------- -------------
Equity-settled transactions - - 571,391 - - 571,391
---------- -------------- ---------- ------------- ------------- -------------
Total contributions
by and distributions
to owners 8,929 37,309 571,391 - - 617,629
---------- -------------- ---------- ------------- ------------- -------------
Balance at 30 June
2012 7,010,625 15,700,535 4,081,682 14,116 (13,653,625) 13,153,333
========== ============== ========== ============= ============= =============
Kolar Gold Limited and its controlled entities
Consolidated Statement of Cash Flows
For the year ended 30 June 2012
Note 2012 2011
GBP GBP
Cash flows from operating activities
Loss for the year (2,329,598) (3,256,290)
Adjustments for:
Depreciation 6,720 4,439
Net financing (income)/expense (144,045) 1,945
Foreign exchange variances (16,930) (60,846)
Equity-settled transactions 9 571,391 1,708,732
Operating loss before changes in
working capital and provisions (1,912,462) (1,602,020)
Change in trade and other receivables 25,049 (24,140)
Change in other current assets (12,936) (33,099)
Change in trade and other payables (712,646) 794,308
Change in employee benefits 25,075 79,424
------------ ------------
Cash used in operating activities (2,587,920) (785,527)
Interest and finance costs paid (1,087) (2,475)
Net cash used in operating activities (2,589,007) (788,002)
------------ ------------
Cash flows from investing activities
Interest received 124,900 530
Payments for exploration and evaluation
assets (948,912) (2,189,930)
Payments for plant and equipment (11,292) (7,577)
Net cash used in investing activities (835,304) (2,196,977)
------------ ------------
Cash flows from financing activities
Proceeds from the issue of convertible
notes - 250,000
Proceeds from issues of equity
securities per Initial Public Offering - 12,000,000
Proceeds from other share issues 46,238 3,645,000
Payment of share issue costs - (2,108,630)
------------ ------------
Net cash from financing activities 46,238 13,786,370
------------ ------------
Net increase/(decrease) in cash
and cash equivalents (3,378,073) 10,801,391
Foreign exchange gain/(loss) on
opening cash balances (34,665) 3,829
Cash and cash equivalents at 1
July 11,544,630 739,410
------------ ------------
Cash and cash equivalents at 30
June 8,131,892 11,544,630
============ ============
The notes are an integral part of the consolidated financial
statements
Notes to the financial statements
5. Income tax expense
2012 2011
GBP GBP
Current tax expense
Current year - -
====== ============
Deferred tax expense
Origination and reversal of temporary -
differences -
====== ============
Tax expense in income statement - -
Reconciliation of effective
tax rate 2012 2012 2011 2011
% GBP % GBP
Loss for the year (2,329,598) (3,256,290)
Total income tax for the year - -
------------ ------------
Loss excluding income tax (2,329,598) (3,256,290)
------------ ------------
Income tax using the Company's
domestic rate (0.0) - (0.0) -
Effect of tax rates in foreign
jurisdictions (305,409) (521,515)
Non-deductible expenses 128,961 97,426
Current year losses for which
no deferred tax asset was recognised 176,448 424,089
Total current tax benefit - - - -
------ ------------ ------ ------------
A deferred tax asset of GBP3,107,096 (2011: GBP2,930,648) has
not been recognised in respect of losses, as there is currently
uncertainty surrounding the recoverability of such assets.
6. Exploration and evaluation expenditure
2012 2011
GBP GBP
Balance at beginning of year 4,496,933 -
Transferred from investments (a) - 984,046
Acquisition of tenement rights - 1,217,596
Payment to SUN Mining by the issue
of shares (b) - 1,749,936
Driiling expenses captialised 295,409 163,693
Geological services 158,604 74,439
Consultant reports 69,216 -
Salaries & wages 283,876 4,550
Other expenses capitalised 192,115 61,296
Foreign exchange variances - 241,377
------------ -----------------
Balance at end of year 5,496,153 4,496,933
============ =================
The recoverability of the carrying amounts of exploration and
evaluation assets is dependent on the succcessful development
and commercial exploitation or sale of the respective area
of interest.
a Transfer from investments
At 30 June 2010 the Group had entered into an agreement to
acquire interests in mineral exploration tenements in the Kolar
region in India from Geomysore Services India (Private) Limited
(GMSI). Under the terms of the agreement, at 30 June 2010 the
Group had paid deposits totalling GBP984,046 and it was intended
that the Group and GMSI would establish a joint venture to
conduct exploration and evaluation of the mineral exploration
tenements. This amount was classified as an investment as at
30 June 2010.
During the year ended 30 June 2011 the agreement with GMSI
was renegotiated and new agreements were entered into. Under
the terms of the new agreements the Group has acquired mineral
exploration tenement rights from GMSI. While the Group will
not have legal title to these tenements until transferred with
Government approval, it will have contractual rights to exploit
them once the required approvals have been granted. These tenement
rights have been accounted for in accordance with the Group's
accounting policy for exploration and evaluation expenditure
which is set out in Note 1.9.
GMSI was granted a Prospecting License over South Kolar tenements
in 2009 and the Group secured the exploration rights under
the above agreement. Under the terms of its grant, the South
Kolar prospecting license expired on 17(th) July 2012, and
in accordance with industry practice GMSI applied for a renewal
of this license on 17(th) April 2012. This site was inspected
by the Department of Mines and Geology, Government of Andhra
Pradesh, on 11(th) July 2012 and to date GMSI has not received
any subsequent communication from the Department of Mines and
Geology. Under the terms of the license, the State Government
has the right to dispose of the prospecting license prior to
the expiry date. If this does not happen, the prospecting license
is then deemed to be renewed.
b Payment to SUN Mining by the issue of shares
On 8 April 2011 SUN Mining were issued 5,833,119 shares as
payment for services with respect to securing the tenement
right through completion of the agreements with GMSI. These
shares were valued at 30p per share, a total cost of GBP1,749,936.
2012 2011
GBP GBP
7. Trade and other payables
Trade and other payables due
to related parties 41,438 479,354
Other trade payables 137,431 447,050
Non-trade payables and accrued
expenses 244,644 159,448
----------- ------------
423,513 1,085,852
=========== ============
8. Employee benefits
2012 2011
GBP GBP
Current
Liability for annual leave 87,481 74,433
Liability for long service leave 91,475 38,983
----------- ------------
178,956 113,416
Non-current
Liability for long service leave 2,992 43,457
----------- ------------
181,948 156,873
=========== ============
9. Share-based payments
a) Options
In prior periods, Kolar Gold (UK) Limited (previously Kolar Gold
Plc) and Kolar Gold Limited issued options to directors, employees
and long-term consultants to compensate them for services rendered
and incentivise them to add value to the Group's longer term share
value. When Kolar Gold Limited was created as the new holding company
of the Kolar Gold Group, options previously issued by Kolar Gold
(UK) Limited were exchanged for options over Kolar Gold Limited
shares. Options issued comprise "Reward" Options in exchange for
the provision of services and "Bonus" Options, which became receivable
upon Kolar Gold Limited being admitted to trading on AIM on 17
June 2011. Each option entitles the holder to subscribe for one
ordinary share in Kolar Gold Limited. Options do not confer any
voting rights on the holder.
As at 30 June 2012, the following unexpired options were is existence
over the shares of Kolar Gold Limited:
Name Date of Grant Ordinary Shares Expiry Date Exercise Price
under option GBP
Nicholas Taylor
Spencer (1) 1.12.10 500,000 1.12.13 0.30
Richard Johnson
(1) 1.12.10 500,000 1.12.13 0.30
Non-Directors (1) 5.5.10 150,000 5.05.13 0.30
Non-Directors (1) 1.12.10 350,000 1.12.13 0.30
Norman Coldham-Fussell
(2) 1.12.05 675,000 17.06.14 0.40
Nicholas Taylor
Spencer (2) 1.12.05 1,350,000 17.06.14 0.40
Richard Johnson
(2) 1.12.05 675,000 17.06.14 0.40
Harvinder Hungin
(3) 10.6.11 450,000 10.06.16 0.40
Stephen Coe (3) 10.6.11 350,000 10.06.16 0.40
Stephen Oke (3) 10.6.11 350,000 10.06.16 0.40
----------------
5,350,000
================
(1) These share-based payment arrangements were originally in
relation to options issued by Kolar Gold plc and vested immediately
on grant date, having no vesting conditions. On 8 April 2011, these
options were released by the option holders in exchange for options
in Kolar Gold Limited. These options replaced the original options
on identical terms granted to the same persons; they vested on
grant date and are exercisable at any time before the date of lapse.
Each option confers a right to one "B" class ordinary share at
exercise prices of GBP0.30. The options are transferable, and on
an alteration of the ordinary share capital of the Company by capitalisation
or rights issue, consolidation, sub-division or reduction or other
alteration, the number of ordinary shares subject to the Existing
Options or the option price may be adjusted by the Board.
(2) The Directors and Shareholders of Kolar Gold plc had previously
resolved to grant options subject to completion of a successful
Initial Public Offering to Norman Coldham-Fussell, Nicholas Spencer
and Richard Johnson (Bonus Options) and a consultant. On admission
of the Company's shares to trading on AIM on 17 June 2011, the bonus
options were exchanged for options in respect of 2,700,000 Ordinary
Shares in Kolar Gold Limited. This resulted in a modification, with
2,000,000 bonus options in being swapped for 2,700,000 reward options.
As a result of this modification, an accounting charge of GBP92,650
was recognised in the year ended 30 June 2011 and the modified options
vested on 17 June 2011 due to the IPO.
(3) The above options were granted by Kolar Gold Limited on 10 June
2011 to directors. The options vested on grant date with no vesting
conditions.
4,350,000 options expired on 1 December 2011 and no options were
issued during the year ended 30 June 2012.
Inputs for measurement of grant date fair values
The grant date fair values of all options issued was measured based
on the Black-Scholes formula. Expected volatility is estimated by
considering historic average share price volatility. The inputs
used in the measurement of the fair values at grant date of the
share-based payment plans are the following:
Additional Kolar Gold
options plc
Kolar Gold Options
Ltd December 2010
June 2011
2011 2011
GBP GBP
Fair value at grant date 0.246 1.787
Share price at grant date 0.40 0.25
Exercise price 0.40 0.29
Expected volatility 74.1% 25%
Option life 3.0 years 4.3 years
Expected dividend nil nil
The number and weighted average exercise price of the options
are as follows:
Weighted average Weighted average
exercise price Number of exercise price Number
GBP options GBP of options
2012 2012 2011 2011
Reward Option issued by
Kolar Gold plc
Outstanding at the beginning
of the year - - 0.231 4,500,000
Granted during the year - - 0.300 1,350,000
Cancelled and re-issued
by Kolar Gold Limited
during the year - - 0.247 (5,850,000)
------------------ ----------- ----------------- ------------
Outstanding at the end
of the year - - - -
================== =========== ================= ============
Options issued by Kolar
Gold Limited
Outstanding at the beginning
of the year 0.307 9,700,000 - -
Options originally in
Kolar Gold plc re-issued
by Kolar Gold Limited - - 0.247 5,850,000
Granted during the year - - 0.400 3,850,000
Expired during the year 0.228 (4,350,000) - -
------ ------------ ------ ----------
0.372 5,350,000 0.307 9,700,000
====== ============ ====== ==========
b) Warrants
The following unexercised warrants existed as at 30 June
2012:
Name Date Ordinary Expiry Exercise
of Grant Shares under Date Price
option GBP
Broker warrants Series
1 (1) 5.5.11 1,300,000 17.6.14 0.40
Broker warrants Series
2 (2) 17.6.11 1,500,000 17.6.14 0.60
SUN Mining initial warrants 24.2.11 2,916,559 24.2.12 Nil
Series 1 (3)
SUN Mining initial warrants 24.2.11 2,916,559 24.2.13 Nil
Series 2 (3)
SUN Mining initial additional 24.2.11 3,499,871 24.2.13 VWAP (4)
warrants (3)
--------------
12,132,989
==============
Each warrant entitles the holder to subscribe for one ordinary
share in the Company. Warrants do not confer any voting rights
on the holder. On 30 June 2011, there were 16,796,989 warrants
in existence and on 1 March 2012, 4,664,000 warrants expired.
1 On 5 May 2011 the Company issued 1,000,000 warrants to Cenkos
Securities plc and 300,000 warrants to Ocean Equities Limited
in consideration for historical services provided by them
as brokers to Kolar Gold plc. These warrants have an exercise
price of 40 pence per share and expire on 17 June 2014.
2. On 17 June 2011 the Company's shares listed for trading
on AIM, entitling Cenkos Securities plc and Ocean Equities
Limited to 750,000 warrants each. These warrants have an
exercise price of 60 pence and expire on 17 June 2014.
3 On 24 February 2011 the Company entered into an agreement
to issue warrants to SUN Mining, pursuant to the following
agreement. Under the terms of this agreement, subject to
satisfaction of the conditions necessary to give effect
to the share swap and restructure:
(a) Kolar Gold Limited issued to SUN Mining 5,833,119 Ordinary
Shares, in consideration for SUN Mining providing services
with respect to securing the tenement rights in the Kolar
Gold Fields through the agreements with GMSI. These shares
were valued at 30 pence and the total cost of GBP1,749,936
has been capitalised as exploration expenditure (see Note
6);
(b) Kolar Gold Limited has agreed to issue the following
Ordinary Shares (such agreement being reflected by the grant
to SUN Mining of warrants):
(i) 2,916,559 Shares, subject to SUN performing certain
ongoing services for 12 months; and
(ii) a further 2,916,559 Shares, subject to SUN:
A) performing such ongoing services for 24 months; and
B) assisting Kolar Gold Limited to acquire the BGML Assets;
The 2,916,559 SUN Mining warrants Series 1 were not exercised
by SUN Mining by the expiry date of 24 February 2012, due
to dealings in the Company's shares being restricted under
the AIM rules in a closed period. SUN Mining is entitled
to exercise these warrants immediately after the closed
period.
(c) Kolar Gold agreed to grant SUN the Additional Warrant
in consideration for services already received in respect
of securing the tenement rights in the Kolar Gold Field,
being:
(i) a right by SUN to subscribe for 3,499,871 Ordinary
Shares in cash;
(ii) at the subscription price equal to the VWAP for the
3 months prior to exercising the option; and with an expiry
date of 2 years from the date of the agreement.
4 Volume weighted average price
Inputs for measurement of grant date fair values
The grant date fair values of warrants issued or agreed to be
issued were measured based on the Black-Scholes formula, or in the
case of the SUN Mining Additional Warrants, the Monte Carlo
simulation method was used.
Expected volatility is estimated by considering historic average
share price volatility. The inputs used in the measurement of the
initial fair values at grant date of the share-based payment plans
are the following:
SUN Mining SUN Mining Broker Broker SUN Mining
Initial Initial warrants warrants additional
warrants warrants Series Series warrants
Series 1 Series 2 1 2 GBP
GBP GBP GBP GBP
Fair value at
grant date 0.30 0.30 0.199 0.155 0.027
Share price at
grant date 0.30 0.30 0.40 0.40 0.300
3 months
Exercise price nil nil 0.40 0.60 VWAP*
Expected volatility 74.1% 74.1% 74.1% 74.1% 74.1%
Warrant life 2 years 3 years 3.1 years 3 years 2 years
Expected dividend nil nil nil nil nil
* Volume weighted average price
Vesting conditions require that the charge for the SUN Mining
Initial warrants Series 1 and 2 be spread over the service period.
The fair value of the identifiable services received in exchange
for these warrants cannot be reliably measured under IFRS 2
therefore their fair value has been determined by reference to the
fair value of the equity instruments provided measured over the
period of time that the services are received. This has resulted in
a lower average fair value in the current year.
c) Share-based payment expense recognised in the income statement
2012 2011
GBP GBP
SUN Mining Initial warrants Series
1 339,481 302,044
SUN Mining Initial warrants Series
2 231,910 150,815
SUN Mining Additional warrants - 94,147
Brokers Warrants Series 1 - 258,960
Brokers Warrants Series 2 - 233,550
Bonus options (reissued) to directors - 92,650
Options issued to non-executive
directors - 282,325
Shares and options issued by Kolar
Gold plc during the period 1 July
2010 to 31 December 2010 - 294,241
-------- ----------
Total share-based payment expense 571,391 1,708,732
======== ==========
11. Loss per share
The calculation of basic loss per share at 30 June 2012 was
based on the loss of GBP2,329,598 (2011: GBP3,256,290), and a
weighted average number of ordinary shares outstanding of
100,124,647 (2011: 57,184,802), calculated as follows:
2012 2011
GBP GBP
Loss attributable to ordinary shareholders 2,329,598 3,256,290
========== ==========
Weighted average number of ordinary
shares
'000 '000
Issued ordinary shares at 1 July 100,024 46,665
Effect of shares issued during the
year 101 10,520
---------- ----------
Weighted average number of shares
at 30 June 100,125 57,185
========== ==========
Diluted loss per share
Options and warrants granted to the Directors, staff and
external consultants are considered to be potential ordinary shares
and have not been included in the determination of diluted loss per
share because they are not considered to be dilutive. The options
have not been included in the determination of the basic loss per
share.
2012 pence 2011 pence
per share per share
Basic and diluted loss per share 2.33 5.69
This information is provided by RNS
The company news service from the London Stock Exchange
END
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