TIDMGBGR
RNS Number : 0213T
GoldBridges Global Resources PLC
30 September 2014
GOLDBRIDGES GLOBAL RESOURCES PLC
Interim report - six months to 30 June 2014
GoldBridges Global Resources Plc ("GoldBridges" or the
"Company"), the AIM quoted gold mining and development group,
announces its unaudited results for the six months to 30 June
2014.
Highlights:
Production
- H1 2014 gold production from Sekisovskoye was 12,694 ounces
("oz") at an average grade of 1.42 grammes / tonne ("g/t"),
compared to 12,673 oz in H1 2013 at an average grade of 1.45
g/t;
- Significant reduction in total production cost to US$11.6m (H1 2013: US$15.9m) and administrative cost to US$3.3m (H1 2013: US$6.2m);
- Significant decrease in unit cash costs to US$744 / oz (H1 2013: US$1,055 / oz);
Financial
- Decline in revenue for the period to US$16.7m (H1 2013:
US$20m), reflecting the recent decline in the global price of
gold;
- This lower gold price was offset to some extent by the
government imposed devaluation of the Kazakh Tenge by approximately
20 per cent. in February 2014;
- Operating profit of US$3.3m in H1 2014, a significant
turnaround from a loss of US$2.1m in H1 2013;
- Leading to an EPS of US$0.19/share, up from a loss of US$0.24/share in H1 2013;
- Equity capital raisings in excess of US$22m during the period;
- Cash balances of US$18.5m as at 30 June 2014 (H1 2013 US$1.3m);
Strategic
- The licence and permit applications in relation to the
Karasuyskoye Ore Fields ("Karasuyskoye") are continuing;
- As part of the completion of the Karasuyskoye purchase, the
Group is entitled to a VAT refund of 453m Tenge (approximately
US$2.5m at closing exchange rates) which will aid future cash flow.
This is expected to be set off against VAT liabilities arising over
a period of approximately two years;
- The Group is expected to benefit from participation in the
Kazakhstan government's initiative on industrial development
and;
- The Sekisovskoye CPR was being finalised in Q3 and is expected
to be released in Q4 2014.
Aidar Assaubayev, CEO of GoldBridges Global Resources Plc
commented:
"We are very pleased with our 2014 interim results. The
reorganisation and cost cutting measures that we have taken have
had a positive effect on our operations. This, in combination with
the weaker Kazakh Tenge, has resulted in the reporting of a profit
for the six months to June 2014. The Group is now well positioned
to move forward to exploit its opportunities, both in developing
the underground mine at Sekisovskoye and the ore fields at
Karasuyskoye, once the necessary permits have been obtained".
For further information please contact:
GoldBridges Global Resources Plc +44 (0) 207 932
Louise Wrathall 2456
Strand Hanson (Nomad and Joint Broker)
Andrew Emmott +44 (0) 207 409
Ritchie Balmer 3494
+44 (0) 203 540
1720
Peat & Co. (Joint Broker) +44 (0) 203 540
John Beaumont, COO and Head of Research 1723
Blytheweigh (Financial PR)
Tim Blythe
Halimah Hussain +44 (0) 207 138
Camilla Horsfall 3204
GOLDBRIDGES GLOBAL RESOURCES PLC
Chief Executive's review
Review of 2014 to date
I am delighted to update you on the positive progress that we
have made during H1 2014. In the reported period, the Group has
benefited from the rationalisation and reorganisational measures
that were put in place over the last year. We have continued with
our efforts to upgrade the gold processing plant, have raised
capital in excess of US$22m through two equity placings and have
been endorsed by the Kazakhstan government for our inclusion in the
State Programme on Forced Industrial-Innovative development
(SPFIID) for the Sekisovskoye development.
We have produced 12,694oz of gold during the six months to June
2014, which was in line with our output during H1 2013. This result
is extremely pleasing given that our costs have reduced from an
average of US$1,055/oz in H1 2013 to US$744/oz during H1 2014. This
is primarily due to cost saving measures that the Group has put in
place, coupled with the approximate 20 per cent. government imposed
devaluation of the local currency, the Kazakh Tenge.
In terms of production, although the open pit remains the
primary source of ore, the Group's main focus in H1 2014 was the
continuing objective of increasing the tonnage of ore produced from
the underground mine development. The ultimate aim is to develop
the capacity for 'bulk' production from the mining stopes with the
development drifts currently being mined to give access to the ore
stopes.
We have continued to upgrade the gold processing plant and, in
the 6 months up to 30 June 2014, additional crushing equipment has
been installed allowing the ball mills to receive a finer feed and
increase the productivity of the grinding system. Additional
debottlenecking is required to increase the capacity of the plant
with the ultimate goal being 1 million tonnes per annum ("Mtpa"),
and this remains work in progress.
The open pit mine, previously consisting of two pits, has
reduced to a single pit as the higher grade ore from the north is
now virtually depleted except for a small amount of remnant ore
that will be selectively mined as it becomes available. The
remaining open pit operations during the rest of 2014 will be from
the central pit. With increasing underground production the fall in
grade from the open pit operations should be more than compensated
for by the higher grade ore from the underground mine in the longer
term.
During the six months, there have been two successful capital
raisings and we thank our shareholders for their support and belief
in our business. In total, we raised approximately US$22.1m through
a placing in early January of 97,972,000 new Ordinary Shares at a
price of 1.975 pence per Ordinary Share, and then through a second
placing in February of 550,000,000 shares at a price of 2.175 pence
per Ordinary Share. The net proceeds of both placings have been
used further the development of the underground mine at
Sekisovskoye and for general working capital purposes.
The Group's Sekisovskoye underground development will benefit
from inclusion in the State Programme On Forced
Industrial-Innovative Development ("SPFIID"). Currently a report on
the project is being prepared, which will then be presented to the
Kazakhstan State Commission of Modernisation, headed by the Prime
Minister of Kazakhstan, for final approval. The SPFIID initiative
targets the modernisation of the Kazakhstan economy and pledges
state support to selected projects by providing financing
incentives such as grants and low interest loans, infrastructure
development and policies to fast track these strategic projects.
Following final approval, the Kazakhstan government will expand
existing infrastructure supporting the Sekisovskoye project
including electricity and transportation networks. These works will
run in tandem with the Group's own development plans. We will
update the market further once the final approval is granted.
GOLDBRIDGES GLOBAL RESOURCES PLC
Chief Executive's review (continued)
Outlook
During Q3 2014, international mining consultants Venmyn Deloitte
were finalising their independent competent persons report ("CPR")
on the Sekisovskoye underground mine, it is now expected to be
released in Q4 2014. The CPR will contain an updated JORC compliant
reserve and resource estimate based on the historical drilling and
the most recent drilling programme completed in early 2014. This
report should pave the way for increased development of the
underground resources and reserves at Sekisovskoye and higher gold
production in the future.
As a result of internal [staff] changes at the government
departments that are responsible for issuing the appropriate
licences and permits, the Group's timeline for obtaining the
various approvals needed for the development of Karasuyskoye has
been extended beyond initial expectations. The Group is however now
pleased to announce that the licence application is proceeding
without any further delay and the Directors hope to provide a
positive progress report in the near future.
In terms of gold production, we look forward to higher output in
H2 2014 and remain confident that we will meet our production
targets for the year.
GOLDBRIDGES GLOBAL RESOURCES PLC
Operations report
Mining activity
Overview H1 2014
Mining operations in the first half of 2014 performed to
expectations. The activities continued to be focused on the open
pit operation with 317,085 tonnes of ore mined during the period,
which was the primary source of material for the processing plant.
The northern pit is now virtually depleted of ore except for some
remnant material that will be selectively mined in the future.
During the reporting period and in the future, open pit mining will
focus on the lower grade central pit.
During the six months to 30 June the contribution of underground
ore increased significantly, with 26,157 tonnes of the higher grade
ore being mined. It must be noted that a large portion of this ore
was as result of the development work to gain access to the mining
stopes. A higher grade of ore will be generated from the actual
mining stopes.
The processing plant feed experienced a slight decrease in the
gold grade to 1.42 g/t, as compared to 1.45 g/t in H1 2013, due to
the depletion of ore from the open cast northern pit and the higher
than expected quantities of development ore from the underground
mine.
H1 2014 H1 2013
Total ore mined, open pit (t) 317,085 374,448
Total ore mined, underground (t) 26,157 5,739
Total ore milled (t) 333,490 329,104
Open pit gold grade (g/t) 1.32 1.42
Underground gold grade (g/t) 2.97 5.60
Average gold grade (g/t) 1.42 1.45
Average silver grade (g/t) 2.15 1.94
Gold recovery (%) 83.4 82.8
Gold produced (oz) 12,694 12,673
Silver produced (oz) 17,380 15,524
The focus on reducing costs and improving efficiencies has
helped decrease production costs in H1 2014 to US$744/oz from
US$1,055/oz in H1 2013. Substantial savings have been achieved by
restructuring the costs related to supervision and labour and,
this, together with investments in equipment and machinery during
2013 and 2014 has increased the efficiency and reliability of the
operation. Management continues to focus on further cost
savings.
Open Pit Mining
In total, 317,085t of ore was produced from the central and
north pits during H1 2014 as compared to 374,448t of ore in H1
2013. In future and until the depletion of the open pit in 2016,
all ore will come from the lower grade central pit. Some ore
remains in the north pit and it will be selectively mined with
smaller equipment if required. The waste generated from open pit
mining activities is used as foundation material for the tailings
dams and, as such, waste generated during the reporting period was
used to complete the construction of Tailings Dam 4 and commence
Tailings Dam 5. Once complete, Tailings Dam 5 is expected to have
capacity for some 17 years from 2015 onwards to support the
underground mining operation. The plan is to complete all tailings
dams by 2016 so that when the open pit mine ceases all civil
engineering infrastructure tasks onsite will be complete.
GOLDBRIDGES GLOBAL RESOURCES PLC
Operations report (continued)
Gold Processing Plant
Gold recovery rate at the processing plant improved to 83.4 per
cent in H1 2014 from 82.8 per cent in H1 2013. This was driven by
efficiency and optimisation measures even with the slightly lower
gold grade in the plant feed. This improvement in the gold recovery
rate follows the installation and commissioning of the high
capacity tailings and recycling water pumps, new heat-exchange
elution units and a second elution column plus the seventh CIL tank
in late 2013. In addition to this, new crushing equipment is being
commissioned in H2 2014 and more debottlenecking of the plant is
planned with the aim of further improving recoveries and
throughput.
The increased gold recovery rates are a positive indicator for
the future productivity of the plant, when the source material
consists of only underground ore. This is forecast to be the case
by 2016, when the production life of the open pit comes to an end.
Test work to date using 100 per cent underground ore indicates gold
recovery at approximately 84 per cent.
The Underground Mine
The management team is committed to the development of the
underground mine which, in combination with the processing plant
upgrades which are underway, should result in long term increased
gold production for GoldBridges. The quantity of ore is steadily
increasing, however during the move to access the higher grade ore,
the grades will initially be variable as some of the development
work transverses low grade ore zones.
The Group's development plans will include appraising the costs
and benefits of using our own team as compared to employing a
contractor for the underground mine development. This aim is to
ensure that developmental progress of the underground mine
progresses as required by the mine plan to access the high grade
underground stopes prior to the depletion of the open pit ore. This
is seen as a key objective for the success of the Sekisovskoye
Underground Development Project during the transition from the open
pit to the underground.
During H1 2014, the underground ore was sourced from the decline
where horizontal developments are being made to access the future
mining stopes. This work provides relatively small quantities of
ore when compared to the future bulk mining of the stopes. However
all the development ore processed is within the mineralised part of
the ore body.
GOLDBRIDGES GLOBAL RESOURCES PLC
Operations report (continued)
Exploration Drilling
During H1 2014, 94 diamond drill holes were drilled for a total
of 7,230m. H1 2014 exploration drilling had considerable success in
confirming the vertical extension of the ore body. Initially, all
drilling had been terminated at the -400masl level, approximately
725m from surface. The 6 holes that were drilled along the ore body
from the -400masl level, targeted the -800masl level with the
intention of confirming gold mineralization continuity. The
drilling was a success and these deeper holes will now form part of
the updated JORC resource estimate.
GOLDBRIDGES GLOBAL RESOURCES PLC
Operations report (continued)
Financial
Sekisovskoye poured 12,694 ounces of gold in H1 2014 (H1
2013:12,673). Gold sold during the period amounted to 12,479 ounces
(H1 2013: 12,694) at an average price of US$1,337 per ounce H1
2013: US$1,554). The average price of sales achieved includes
revenues generated from silver sales in the period, which are
treated as incidental to gold production. During 2014 the Group
also sold spare parts and other consumables for US$1.2m (2013: US$
Nil).
There have been significant savings in both production costs and
administrative costs.
The cash cost (cost of sales excluding depreciation and
provisions) for the period was US$744 per ounce (H1 2013:
US$1,055). The decrease in the cost of production is due to a
number of factors the principal ones are described below:
During H1 2014, due to a change in government legislation in
relation to metal sales, the Group sold all production to the state
refiner. The price as in the prior period is still fixed in terms
of US Dollars, however all amounts are paid to the Group in Kazakh
Tenge (being the principal cost base of the Kazakh based
Companies). The Group has benefited from the devaluation of the
Kazakh Tenge to the US Dollar, decreasing the costs denominated in
Kazakh Tenge by approximately 20% from last year in currency terms.
In addition, the switch to the Kazakh based refiner has led to
substantial savings in transportation and security costs from the
prior period when the gold was shipped to Switzerland. Further cost
savings have been achieved from the Group performing a greater part
of the mining works in house and therefore dispensing with a number
of contractors. This has not only led to a decrease in contractor
cost but a saving in material component costs that were previously
being purchased via the contractors.
Administration costs in the six months to 30 June 2014 amounted
to US$3.3m (H1 2013: US$6.2m). The savings are a product of cost
cutting measures now being fully reflected in the current period
and as a result of savings made from Karasuyskoye related costs
that were incurred in the prior period, and which are not
recurring. Expenses amounting to US$2.6m were incurred in the prior
year to 31 December 2013 in negotiating and securing the
Karasuyskoye deal.
There is expected to be a positive impact on cash flow in future
periods as the Group will be able to recover approximately US$3m in
relation to the VAT attributable to the purchase of Karasuyskoye
geological data. This has now been reflected in note 3 by a
consequent reduction of the purchase price to the net amount paid
to purchase the geological information. Recovery will be obtained
by off-setting this amount against future VAT liabilities that
would have been payable by Sekisovskoye.
The Company has retained a strong cash position with US$18.5m at
the balance sheet date. Cash generated from operations was a
negative US$0.8m and in large part was due to the repayment of
creditors of approximately US$5m. Creditors in total have increased
from US$11.5m to US$19.4m, however US$12.9m relates to the purchase
of assets and as such are not reflected as part of operating
activities. If these are adjusted for, the actual creditors have
decreased from US$11.5m to US$6.5m i.e. a reduction of US$5m. The
payment in relation to the asset purchases has been agreed to be
made over an extended period and will not have an impact on the
liquidity of the Group.
Capital expenditure totalled US$18.5m in H1 2014 (H1 2013:
US$3.7m). The main item of capital expenditure was the development
of the underground mine, and associated equipment.
The increase in trade and other receivables is principally due
to the recognition of the VAT as mentioned above on the
Karasuyskoye asset which is expected to be recovered in full over a
period of approximately two years.
GOLDBRIDGES GLOBAL RESOURCES PLC
Operations report (continued)
Financial (continued)
The Group has recognised deferred tax assets and in total these
amount to US$2.1m (H1 2013: US$1.1m) in relation to both trading
subsidiary companies in Kazakhstan on the basis that both are
expected to generate chargeable profits in future periods.
Aidar Assaubayev
Chief Executive Officer
30 September 2014
INDEPENDENT REVIEW REPORT
FOR THE PERIOD ENDED 30 JUNE 2014
INDEPENDENT REVIEW REPORT TO GOLDBRIDGES GLOBAL RESOURCES
PLC
Introduction
We have been engaged by the Company to review the consolidated
financial information in the interim financial report for the six
months ended 30 June 2014 which comprise the Consolidated Income
Statement, the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Changes in Equity, the Consolidated
Statement of Financial Position, the Consolidated Statement of Cash
Flows and the related notes.
We have read the other information contained in the interim
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the consolidated
financial information.
Directors' responsibilities
The interim financial report, including the financial
information contained therein, is the responsibility of and has
been approved by the directors. The directors are responsible for
preparing the interim financial report in accordance with the rules
of the London Stock Exchange for companies trading securities on
the Alternative Investment Market which require that the interim
financial report be presented and prepared in a form consistent
with that which will be adopted in the Company's annual accounts
having regard to the accounting standards applicable to such annual
accounts.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the consolidated financial information in the interim financial
report based on our review.
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities
on the Alternative Investment Market and for no other purpose. No
person is entitled to rely on this report unless such a person is a
person entitled to rely upon this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised
to do so by our prior written consent. Save as above, we do not
accept responsibility for this report to any other person or for
any other purpose and we hereby expressly disclaim any and all such
liability.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the consolidated financial information in
the interim financial report for the six months ended 30 June 2014
is not prepared, in all material respects, in accordance with the
rules of the London Stock Exchange for companies trading securities
on the Alternative Investment Market.
Emphasis of Matter - Carrying value of Intangible Assets
In forming our review conclusion, which is not modified, we have
considered the adequacy of the disclosures in note 3 to the
financial statements concerning the outcome of the licence
application at Karasuyskoye. During 2013, the Group acquired the
geological data at Karasuyskoye for $27.5m and has applied for but
not yet been granted a mining licence over this area. In the event
that the licence is granted to another party, the Group would need
to negotiate the sale of the data to the successful applicant which
may be at a lower value than the carrying value. The ultimate
outcome of this matter cannot presently be determined.
BDO LLP
Chartered Accountants and Registered Auditors
London
United Kingdom
30 September 2014
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
GOLDBRIDGES GLOBAL RESOURCES PLC
Consolidated income statement
Six months
Six months ended Year ended
ended 30 June 30 June 31 December
2014 2013 2013
(unaudited) (unaudited) (audited)
Note US$'000 US$'000 US$'000
======================== ====== ================= ============= =============
Revenue 16,683 20,014 42,395
Cost of sales (11,593) (15,877) (32,076)
Gross profit 5,090 4,137 10,319
Other operating
income 7 1,162 - -
Administrative
expenses (3,286) (6,223) (16,475)
Tailings dam
leak 300 - 9,252
Operating profit/(loss) 3,266 (2,086) 3,096
Finance income 4 1 1
Foreign exchange
(loss)/gain (368) 192 (413)
Finance Expense (229) (365) (1,515)
Profit/(loss)
before taxation 2,673 (2,258) 1,169
Taxation
credit/(charge) 1,173 (79) 358
------------------------ ------ ----------------- ------------- -------------
Profit/(loss)
attributable
to equity shareholders 3,846 (2,337) 1,527
======================== ====== ================= ============= =============
Profit/(loss)
per ordinary
share
Basic & diluted
(US cent) 2 0.19 (0.24) 0.15
The notes on pages 17 to 23 form part
of this financial information
GOLDBRIDGES GLOBAL RESOURCES PLC
Consolidated statement of comprehensive
income
Six months Six months Year ended
ended 30 June ended 30 31 December
2014 June 2013 2013
(unaudited) (unaudited) (audited)
US$000 US$000 US$000
-------------------------------------------------- ----------------- ------------- -------------
Profit/(loss) for the
period/year 3,846 (2,337) 1,527
Currency translation differences
arising on translations
of foreign operations
items which will or may
be reclassified to profit
or loss (6,295) (1,001) (763)
Total comprehensive income/(loss)
for the period/year attributable
to equity shareholders (2,449) (3,338) 764
-------------------------------------------------- ----------------- ------------- -------------
The notes on pages 17 to 23 form part of this financial
information
GOLDBRIDGES GLOBAL RESOURCES PLC
Consolidated statement of financial position
Six months
ended 30 Six months Year ended
June ended 30 31 December
2014 June 2013 2013
Notes (unaudited) (unaudited) (audited)
US$'000 US$'000 US$'000
---------------------------------- ------ ------------ ------------ -------------
Non-current assets
Intangible asset 3 23,633 - 27,157
Property, plant and
equipment 4 52,721 42,052 44,357
Trade and other
receivables 3,040 485 381
Deferred tax asset 2,059 344 1,145
Restricted cash 253 306 301
---------------------------------- ------ ------------ ------------ -------------
81,706 43,187 73,341
---------------------------------- ------ ------------ ------------ -------------
Current assets
Inventories 6,913 10,449 9,354
Trade and other
receivables 8,475 11,798 5,446
Cash and cash equivalents 18,514 1,264 2,067
---------------------------------- ------ ------------ ------------ -------------
33,902 23,511 16,867
---------------------------------- ------ ------------ ------------ -------------
Total assets 115,608 66,698 90,208
Current liabilities
Current tax payable (470) - (558)
Trade and other
payables (19,352) (11,903) (11,512)
Other financial
liabilities (351) (229) (239)
Provisions (363) (10,714) (647)
Borrowings (1,666) (10,000) (894)
---------------------------------- ------ ------------ ------------ -------------
(22,202) (32,846) (13,850)
---------------------------------- ------ ------------ ------------ -------------
Net current assets/(liabilities) 11,700 (9,335) 3,017
Non-current liabilities
Other financial
liabilities (963) (1,322) (1,287)
Provisions (5,486) (6,566) (6,705)
Borrowings (8,333) - (10,000)
---------------------------------- ------ ------------ ------------ -------------
(14,782) (7,888) (17,992)
---------------------------------- ------ ------------ ------------ -------------
Total liabilities (36,984) (40,734) (31,842)
---------------------------------- ------ ------------ ------------ -------------
Net assets 78,624 25,964 58,366
---------------------------------- ------ ------------ ------------ -------------
Equity
Called-up share
capital 5 3,702 1,684 2,635
Share premium 137,234 88,245 115,594
Merger reserve (282) (282) (282)
Currency translation
reserve (15,136) (9,079) (8,841)
Accumulated loss (46,894) (54,604) (50,740)
---------------------------------- ------ ------------ ------------ -------------
Total equity 78,624 25,964 58,366
---------------------------------- ------ ------------ ------------ -------------
The financial information was approved and authorised for issue
by the Board of Directors on 30 September 2014 and was signed on
its behalf by:
Aidar Assaubayev
Chief Executive Officer
The notes on pages 17 to 23 form part of this financial
information
GOLDBRIDGES GLOBAL RESOURCES PLC
Consolidated Statement of changes
in equity
For the six months ended 30 June
2014
Share Share Merger Cumulative Retained Total
capital premium reserve translation deficit
reserve
Unaudited US$'000 US$'000 US'000 US$'000 US$'000 US$'000
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
At 1 January
2014 2,635 115,594 (282) (8,841) (50,740) 58,366
Profit for the
period - - - - 3,846 3,846
Exchange
differences
on
translating
foreign
operations - - - (6,295) - (6,295)
Total
comprehensive
loss for the
period - - - (6,295) 3,846 (2,449)
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
Shares issued 1,067 22,094 - - - 23,161
Issue costs - (454) - - - (454)
At 30 June
2014 3,702 137,234 (282) (15,136) (46,894) 78,624
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
For the six months ended 30 June
2013
Share Share Merger Cumulative Retained Total
capital premium reserve translation deficit
reserve
Unaudited US$'000 US$'000 US'000 US$'000 US$'000 US$'000
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
At 1 January
2013 1,684 88,245 (282) (8,078) (52,267) 29,302
Loss for the
period - - - - (2,337) (2,337)
Exchange
differences
on
translating
foreign
operations - - - (1,001) - (1,001)
Total
comprehensive
loss for the
period - - - (1,001) (2,337) (3,338)
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
At 30 June
2013 1,684 88,245 (282) (9,079) (54,604) 25,964
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
For the year ended 31 December
2013
Share Share Merger Cumulative Retained Total
capital premium reserve translation deficit
reserve
Audited $'000 $'000 $'000 $'000 $'000 $'000
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
At 1 January
2013 1,684 88,245 (282) (8,078) (52,267) 29,302
Profit for the
year - - - - 1,527 1,527
Exchange
differences
on
translating
foreign
operations - - - (763) - (763)
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
Total
comprehensive
income for
the year - - - (763) 1,527 764
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
Shares issued 951 27,590 - - - 28,541
Issue costs - (241) - - - (241)
At 31 December
2013 2,635 115,594 (282) (8,841) (50,740) 58,366
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
The notes on pages 17 to 23 form part of this financial
information
GOLDBRIDGES GLOBAL RESOURCES PLC
Consolidated cash flow statement
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2014 2013 2013
(unaudited) (unaudited) (audited)
Note US$'000 US$'000 US$'000
Net cash (outflow)/inflow
from operating
activities 8 (833) 2,845 7,304
--------------------------- ----- --------------- --------------- -------------
Investing activities
Interest received - - 1
Proceeds on
disposals of
property, plant
and equipment 577 29 -
Purchase of
property, plant
and equipment (5,639) (3,720) (7,471)
Prepayment for
non-current
assets - (65) -
Restricted cash - (78) -
Net cash used
in investing
activities (5,062) (3,834) (7,470)
Financing activities
Proceeds on
issue of shares 23,162 - -
Share issue
costs (455) - (241)
Loan from related
party - - 894
Interest paid (365) (362) (924)
Net cash flow
from financing
activities 22,342 (362) (271)
--------------------------- ----- --------------- --------------- -------------
Increase/(Decrease)
in cash and
cash equivalents 16,447 (1,351) (437)
Cash and cash
equivalents
at the beginning
of the year 2,067 2,504 2,504
Effect of foreign
exchange rate
movements - 111 -
Cash and cash
equivalents
at the end of
the period 18,514 1,264 2,067
--------------------------- ----- --------------- --------------- -------------
The notes on pages 17 to 23 form part of this financial
information
GOLDBRIDGES GLOBAL RESOURCES PLC
Notes to the consolidated financial information
1. Basis of preparation
GoldBridges Global Resources Plc is registered and domiciled in
England and Wales.
The interim financial results for the period ended 30 June 2014
are unaudited. The financial information contained within this
report does not constitute statutory accounts as defined by Section
434(3) of the Companies Act 2006.
This interim financial information of the Company and its
subsidiaries ("the Group") for the six months ended 30 June 2014
has been prepared on a basis consistent with the accounting
policies set out in the Group's consolidated annual financial
statements for the year ended 31 December 2013. It has not been
audited, does not include all of the information required for full
annual financial statements, and should be read in conjunction with
the Group's consolidated annual financial statements for the year
ended 31 December 2013. The 2013 annual report and accounts, as
filed with the Registrar of Companies, received an unqualified
opinion from the auditors, but did draw attention to the carrying
value of the intangible assets by way of emphasis, it did not
contain a statement under section 498 (2) or 498 (3) of the
Companies Act 2006.. As permitted, the Group has chosen not to
adopt IAS 34 'Interim Financial Reporting'.
The financial information is presented in US Dollars and has
been prepared under the historical cost convention.
The same accounting policies, presentation and method of
computation are followed in this consolidated financial information
as were applied in the Group's latest annual financial statements
except that in the current financial year, the Group has adopted a
number of revised Standards and Interpretations. However, none of
these have had a material impact on the Group.
In addition, the IASB has issued a number of IFRS and IFRIC
amendments or interpretations since the last annual report was
published. It is not expected that any of these will have a
material impact on the Group.
Going concern
The Group's operations are cash generative and the current cash
position is sufficient to cover ongoing operating and
administrative expenditure for the next 12 months.
During the period the Company secured an additional US$22m
equity investment. The Directors consider this together with income
from the Group's producing assets to be sufficient to cover the
expenses of running the Group's business for the foreseeable
future. They have therefore adopted the going concern basis in the
preparation of these financial statements.
GOLDBRIDGES GLOBAL RESOURCES PLC
Notes to the consolidated financial information (continued)
2. Profit/(loss) per ordinary share
Basic profit/(loss) per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
The calculation of basic and diluted earnings per share is based
upon the retained profit for the financial.
The weighted average number of ordinary shares for calculating
the basic profit/(loss) per share and diluted loss per share for
the period are as follows:
Six months Six months Year ended
ended 30 ended 30 31 December
June 2014 June 2012 2013
(unaudited) (unaudited) (audited)
2,038,802,240 979,721,513 1,003,707,088
-------------- ------------ --------------
3,846 (2,337) 1,527
-------------- ------------ --------------
The basic weighted average number of ordinary shares in issue
during the period
The profit/(loss) for the period attributable to equity
shareholders (US$'000s)
There are no dilutive instruments.
GOLDBRIDGES GLOBAL RESOURCES PLC
Notes to the consolidated financial information (continued)
3. Intangible assets
US$'000
------------------------- -------
Cost
------------------------- -------
1 January 2013 -
------------------------- -------
Additions -
------------------------- -------
30 June 2013 -
------------------------- -------
Additions 27,500
------------------------- -------
31 December 2013 27,500
------------------------- -------
Adjustments* (2,946)
------------------------- -------
30 June 2014 24,554
------------------------- -------
Accumulated amortisation
------------------------- -------
1 January 2013 -
------------------------- -------
Charge for the period -
------------------------- -------
30 June 2013 -
------------------------- -------
Charge for the period 343
------------------------- -------
31 December 2013 343
------------------------- -------
Charge for the period 578
------------------------- -------
30 June 2014 921
------------------------- -------
30 June 2013 -
------------------------- -------
31 December 2013 27,157
------------------------- -------
30 June 2014 23,633
------------------------- -------
The intangible asset relates to the historic geological
information pertaining to the Karasuyskoye ore fields, purchased by
the Group in 2013.
The value of the geological data purchased is in the opinion of
the Directors the value that would have been incurred if the
drilling had been undertaken by a third party (or internally). The
Directors have taken the view that a 20 year write off is
appropriate in relation to the absorption of the cost. The Group is
in the process of obtaining the mining rights in relation to the
area covered by the data.
However, the licencing tender process has not yet been completed
and there is no guarantee that the licence will be granted. In the
event that the licence is not granted, the Group would seek to
negotiate a disposal of the asset to the successful licence
applicant.
* The adjustment relates to the recovery of VAT reclaimable on
the purchase price of the geological data, as agreed with the tax
authorities in Kazakhstan in the current period. The VAT is
recoverable by way of set off against the VAT liabilities accruing
on a quarterly basis by Sekisovskoye, full recovery is expected
over a period of approximately two years.
GOLDBRIDGES GLOBAL RESOURCES PLC
Notes to the consolidated financial information (continued)
4. Property, plant and equipment
Equipment,
Mining Freehold fixtures Plant,
properties land and and machinery Assets under
and leases buildings fittings and vehicles construction Total
US$000 US$000 US$000 US$000 US$000 US$000
------------------------------------------------------- ---------- ---------------- --------------- -----------
Cost
1 January 2013 10,401 16,980 15,165 7,352 12,494 62,392
Additions 141 - 926 692 1,961 3,720
Disposals - (36) (22) - - (58)
Currency translation
adjustment (46) (105) (102) (51) (97) (401)
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
30 June 2013 10,496 16,839 15,967 7,993 14,358 65,653
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
Additions 327 11 308 274 5,374 6,294
Disposals - (83) (120) (8) (8) (219)
Currency translation
adjustment (141) (273) (228) (127) (300) (1,069)
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
31 December 2013 10,682 16,494 15,927 8,132 19,424 70,659
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
Additions 603 - 4,456 - 13,471 18,530
Disposals - (569) (59) - - (628)
Currency translation
adjustment (1,537) (2,714) (2,796) (1,040) (3,503) (11,590)
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
30 June 2014 9,748 13,211 17,528 7,092 29,392 76,971
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
Accumulated depreciation
1 January 2013 2,983 3,937 10,335 4,323 - 21,578
Charge for the period 300 828 428 616 - 2,172
Disposals - - - - - -
Currency translation
adjustment (21) (26) (34) (68) - (149)
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
30 June 2013 3,262 4,739 10,729 4,871 - 23,601
Charge for the period 347 858 1,602 248 - 3,055
Disposals - (5) (91) (30) - (126)
Currency translation
adjustment (57) (91) (66) (14) - (228)
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
31 December 2013 3,552 5,501 12,174 5,075 - 26,302
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
Charge for the period 280 618 999 364 - 2,261
Disposals - (62) - - - (62)
Currency translation
adjustment (573) (897) (1,960) (821) - (4,251)
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
30 June 2014 3,259 5,160 11,213 4,618 - 24,250
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
Net Book Values
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
1 January 2013 7,418 13,043 4,830 3,029 12,494 40,814
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
30 June 2013 7,234 12,100 5,238 3,122 14,358 42,052
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
31 December 2013 7,130 10,993 3,753 3,057 19,424 44,357
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
30 June 2014 6,489 8,051 6,315 2,474 29,392 52,721
------------------------------- ------- ------------- ---------- ---------------- --------------- -----------
The additions in the period principally relate the continuing
works associated with the underground mine in relation to
development of the declines, ventilation shafts and other
associated works.
GOLDBRIDGES GLOBAL RESOURCES PLC
Notes to the consolidated financial information (continued)
5. Share capital
Number US$000
1 January 2013 979,721,513 1,684
Issued during the year
Conversion of convertible
loan notes 583,648,617 951
31 December 2013 1,563,370,130 2,635
Issued during the year
Share placement 647,972,000 1,067
30 June 2014 2,211,342,130 3,702
---------------------------------- ------------------------- ------------
On 10 January 2014 there was a placing of 97,972,000 new
Ordinary Shares at a price of 1.975 pence per Ordinary Share. On 28
February 2014 there was a placing of 550,000,000 shares at a price
of 2.175 pence per Ordinary Share. The net proceeds of both
placings will be used for general working capital purposes and will
form part of the funding to enable the Company to develop the
underground mine at Sekisovskoye.
6. Reserves
A description and purpose of reserves is given below:
Reserve Description and purpose
Share capital Amount of the contributions made
by shareholders in return for
the issue of shares.
Share premium Amount subscribed for share capital
in excess of nominal value.
Merger Reserve Reserve created on application
of merger accounting under a previous
GAAP.
Currency translation Gains/losses arising on re-translating
reserve the net assets of overseas operations
into US Dollars.
Other reserves Fair value of share options granted
net of amounts transferred to
retained earnings on exercise
or lapse of options.
Accumulated Cumulative net gains and losses
losses recognised in the consolidate
statement of financial position.
GOLDBRIDGES GLOBAL RESOURCES PLC
Notes to the consolidated financial information (continued)
7. Related party transactions
Remuneration of key management personnel
The remuneration of the Directors, who are the key management
personnel of the Group, is set out below in aggregate for each of
the categories specified in IAS 24 - "Related Party
Disclosures".
Six months Six months Year to
ended 30 ended 30 December
June 2014 June 2013 2013
US$ US$ US$
Short term employee
benefits 135,165 195,311 292,612
Other - 16,637 16,637
-------------------------- ------------------------ ----------- -----------
135,165 211,948 309,249
Social security costs 7,581 19,915 19,915
-------------------------- ------------------------ ----------- -----------
142,746 231,863 329,164
------------------------- ------------------------ ----------- -----------
During the period ended 30 June 2014, US$Nil (H1 2013:US$Nil, YE
2013:US$7,974) has been accrued to Ellenkay Gold Ltd for the
provision of services by Ken Crichton.
During the year the following transactions were connected with
the Company's controlled by the Assaubayev family:
- An interest free loan was made to GoldBridges Global Resources
Plc, by Amrita Investments Limited to pay certain creditors in the
year ended 31 December 2013. This amounted to US$149,000 and was
repaid during the current period.
- An amount of 138m Tenge paid during the year ended 2013 by
Asia Mining Group ("AMG"), has been offset against total sales to
AMG of US$1.2m (being 202m Tenge) during the period. The sale by
the Group of parts and consumables were on normal commercial
terms.
GOLDBRIDGES GLOBAL RESOURCES PLC
Notes to the consolidated financial information (continued)
8. Notes to the cash flow statement
Net cash(outflow)/inflow from operating activities
Six months Six months Year ended
ended ended ended
30 June 30 June 31 December
2014 (unaudited) 2013 (unaudited) 2013
US$000's US$000's (audited)
US $000's
------------------
Profit/(loss) before taxation 2,673 (2,258) 1,169
Adjusted for:
Finance income (4) (1) (1)
Finance expense 229 365 1,515
Depreciation of tangible fixed
assets 2,261 2,172 5,224
Amortisation of intangibles 578 - 343
Change in provisions (284) (43) (9,252)
Decrease in inventories 2,441 2,930 4,025
Increase in trade and other
receivables (3,224) (7,637) (1,594)
Decrease in other financial
liabilities (182) (10) (36)
(Decrease)/increase in trade
and other payables (5,610) 8,076 5,208
(Profit)/loss on disposal of
property, plant and equipment (17) 7 151
Foreign currency translation 306 (756) 576
-------------------------------------- ------------------
Cash inflow from operations (833) 2,845 7,328
Income taxes paid - - (24)
-------------------------------------- ------------------
(833) 2,845 7,304
------------------------------ ------ ------------------ ------------------ ----------------
9. Events after the balance sheet date
There were no significant transactions after the reporting
date.
GOLDBRIDGES GLOBAL RESOURCES PLC
Company information
Directors Kanat Assaubayev Chairman
Aidar Assaubayev Chief executive officer
Ken Crichton Executive director
Ashar Qureshi Non-executive director
William Trew Non-executive director
Alain Balian Non-executive director
Secretary Rajinder Basra
Registered office and number Company number : 05048549
28 Eccleston Square
London
SW1V 1NZ
Telephone: +44 208 932
2455
Web www.goldbridgesplc.com
Kazakhstan office 10 Novostroyevskaya
Sekisovskoye Village
Kazakhstan
Telephone: +7 (0) 72331 27927 Fax: +7 (0)
72331 27933
Nominated adviser and joint Strand Hanson Limited
broker
26 Mount Row
Mayfair
London W1K 3SQ
Telephone: +44 (0) 20 7409
3494
Joint broker Peat & Co
108 Piccadilly
London
W1J 7NW
Telephone: +44 (0) 20 3540
1720
GOLDBRIDGES GLOBAL RESOURCES PLC
Company information (continued)
BDO LLP
Auditors 55 Baker Street, London
W1U 7EU
BDO Kazakhstanaudit, LLP
56 "A", micro region 6 Almaty city, 050036
KAZAKHSTAN
Lawyers Gowlings (UK) LLP
15th Floor
Old Broad Street
London
EC2N 1AR
Registrars Neville Registrars
18 Laurel Lane
Halesowen
West Midlands B63 3DA
Telephone: +44 (0) 121 585 1131
Bankers NatWest Bank plc
London City Commercial Business Centre
7th Floor, 280 Bishopsgate
London
EC2M 4RB
LTG Bank AG
Herrengasse 12
FL-9490, Vaduz
Principal of Liechtenstein
This information is provided by RNS
The company news service from the London Stock Exchange
END
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