RNS Number:7670I
Ballarat Goldfields N.L.
18 February 2005
Ballarat Goldfields NL
A.C.N. 006 245 441
HALF-YEAR REPORT
31 DECEMBER 2004
Contents Page
Directors' Report 2
Auditor's Independence Declaration 4
Consolidated Statement of Financial Performance 5
Consolidated Statement of Financial Position 6
Consolidated Statement of Cash Flows 7
Notes to the Consolidated Financial Statements 8
Directors' Declaration 11
Independent Review Report to the Members 12
Corporate Directory 14
This interim financial report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this report is to
be read in conjunction with the annual report for the year ended 30 June 2004
and any public announcements made by Ballarat Goldfields NL during the interim
reporting period in accordance with the continuous disclosure requirements of
the Corporations Act 2001.
Directors' Report
Your directors present their report on the consolidated entity consisting of
Ballarat Goldfields NL ("BGF") and the entities it controlled at the end of, or
during, the half-year ended 31 December 2004.
Directors
The following persons were directors of Ballarat Goldfields NL during the whole
of the half-year and up to the date of this report:
Colin Smith (Chairman)
Richard Laufmann (Managing Director)
Mike Etheridge was appointed a director on 18 August 2004 and continues in
office at the date of this report.
Nicholas Mather was a director from the beginning of the financial year until
his resignation 27 August 2004.
Review of operations
Corporate
During the half-year to 31 December 2004 the company successfully raised $27.2
million (before costs) by way of an institutional placement of 73.3 million
fully paid ordinary shares at 9.5 cents per share and a fully underwritten
renounceable 2 for 5 rights issue at 9.0 cents per share.
These funds are primarily being used to:
* Extend the existing decline a further 1km along strike, including
associated development for return ventilation and construction of a ventilation
shaft.
* Carry out a combination of exploration and resource definition
drilling on geological targets identified on the First Chance Line and the
Sulieman Line. Advance exploration of the Berringa prospect and improve our
understanding of Ballarat West initially via drilling the Yarrowee Creek
targets.
* Provide working capital to support the company during the next stage
including the completion of a final Feasibility Study on the Ballarat East
Project.
Dr Mike Etheridge joined the Board of BGF on 18 August 2004. Mike is a geologist
with over 30 years experience in exploration, mining, consulting and research.
On 27 August 2004, Mr Nicholas Mather resigned as a director of BGF.
On 1 December 2004, BGF acquired Mining Lease MIN4847 (Ballarat South) from
Datafast Telecommunications for $200,000. This fully permitted licence area
extends the southern end of the Ballarat East field by an additional 5 km of
strike length and provides increased capacity for surface infrastructure
adjacent to the Ballarat East project.
As an extension to the south of the Ballarat East field, BGF considers that the
success experienced with its geological modeling of Ballarat East could be
replicated on MIN4847. BGF will evaluate both the open pit mineral potential of
the license area and the potential for high grade mineralisation at depth.
On 3 December 2004, BGF's ordinary shares and listed options were admitted to
trading on the Alternative Investment Market (AIM) of the London Stock Exchange.
The dual listing provides a larger market for BGF's listed securities, enabling
a broadening of the shareholder base and providing added flexibility and
liquidity to BGF's UK and European based shareholders.
BALLARAT EAST PROJECT DEVELOPMENT
In November 2004 an underground development contract to complete an extension of
the existing decline was awarded and commenced by Pybar Mining Services Pty Ltd.
Development of the Ballarat East project remains on schedule. As of the end of
December 2004, the recommencement of the development of the single heading
decline (5m wide x 5m high) had advanced 149m. The total length of the decline
was 1,063m. Development will proceed from this primary access decline, on
separate headings to the First Chance and Sulieman Lines.
The Sulieman decline will extend 900m north and provide diamond drill platforms
to evaluate the next section of the resource prior to the development and mining
of ore.
The First Chance decline will not only provide access to the northern end of the
resource but also to the southern end which has been drill tested over the past
12 months.
A ventilation drive will be developed 350m south to the planned position of the
new North Prince Extended Ventilation Shaft some 700m from the decline portal.
PROJECT DEVELOPMENT PLAN
BGF is currently completing a project development plan which optimises the
design parameters outlined in the pre-feasibility study. The primary focus of
the plan is finalising the design of the processing plant and underground
development.
The metallurgical testwork to date continues to validate the high level of
gravity recovery from the Ballarat East ore and BGF is working closely with
Gekko Systems to further refine the process plant flowsheet and design.
The proposed underground mining development plans are being finalised following
resource definition drilling and experience gained from recent underground
development work.
EXPLORATION
Ballarat East
Diamond drilling continued during the half-year at Ballarat East. The drilling
continues to intersect gold mineralisation in the targeted ore zones identified
by BGF's geological model. The model for Ballarat East identified gold
mineralisation target zones totalling 28 million ounces. After probability
adjustment for risk and uncertainty the company derived an exploration potential
of 4.5 million ounces in addition to the indicated and inferred resources of
700,000 ounces for Ballarat East.
Berringa
In September 2004, the company announced details of its geological modelling at
Berringa. This concluded that Berringa has a target portfolio of 3.8 million
ounces of gold which has been risk weighted to arrive at an exploration
potential of 0.9 million ounces. This potential may represent either a
stand-alone project or a valuable additional feed source to the Ballarat East
Project.
This report is made in accordance with a resolution of the directors.
Richard Laufmann
Managing Director
Ballarat
18 February 2005
PricewaterhouseCoopers
ABN 52 780 433 757
333 Collins Street
MELBOURNE VIC 3000
GPO Box 1331L
MELBOURNE VIC 3001
DX 77 Melbourne
Australia
www.pwcglobal.com/au
Telephone +61 3 8603 1000
Facsimile +61 3 8603 1999
Auditor's independence declaration
As lead auditor for the review of Ballarat Goldfields NL for the half-year ended
31 December 2004, I declare that, to the best of my knowledge and belief, there
have been:
a) No contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the review; and
b) No contraventions of any applicable code of professional conduct in
relation to the review.
PricewaterhouseCoopers
Tim Goldsmith Melbourne
Partner 18 February 2005
Consolidated Statement of Financial Performance
For the half-year ended 31 December 2004
CONSOLIDATED
HALF-YEAR
2004 2003
$ $
Revenues from sales of goods - -
Cost of sales - -
Gross profit - -
Other revenue from ordinary activities 526,677 22,121
Other expenses from ordinary activities
Marketing (104,282) (82,676)
Administration (753,163) (420,177)
Exploration (5,285,618) (1,468,482)
Loss from ordinary
activities before income tax expense (5,616,386) (1,949,215)
Income tax expense - -
Net loss attributable to members
of Ballarat Goldfields NL (5,616,386) (1,949,215)
Total changes in equity other than those resulting
from transactions with owners as owners 5,616,386) (1,949,215)
Cents Cents
Basic loss per share (0.9) (0.8)
Diluted loss per share (0.6) (0.7)
The above consolidated statement of financial performance should be read in
conjunction with the accompanying notes.
Consolidated Statement of Financial Position
As at 31 December 2004
CONSOLIDATED
HALF-YEAR FULL YEAR
31 December 30 June
2004 2004
$ $
CURRENT ASSETS
Cash 21,190,376 1,343,055
Receivables 362,886 10,734
Inventory - 458
TOTAL CURRENT ASSETS 21,553,262 1,354,247
NON CURRENT ASSETS
Property, plant and equipment 1,100,032 392,858
Exploration 10,753,597 10,348,596
TOTAL NON CURRENT ASSETS 11,853,629 10,741,454
TOTAL ASSETS 33,406,891 12,095,701
CURRENT LIABILITIES
Accounts payable 1,734,156 614,962
Borrowings 50,868 29,191
Provisions 156,259 117,336
Other 45,182 45,182
TOTAL CURRENT LIABILITIES 1,986,465 806,671
NON CURRENT LIABILITIES
Borrowings 158,030 90,198
Provisions 379,500 174,500
TOTAL NON CURRENT LIABILITIES 537,530 264,698
TOTAL LIABILITIES 2,523,995 1,071,369
NET ASSETS 30,882,896 11,024,332
EQUITY
Share capital 107,792,527 82,317,576
Accumulated losses (76,909,631) (71,293,245)
TOTAL EQUITY 30,882,896 11,024,331
The above consolidated statement of financial position should be read in
conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
For the half-year ended 31 December 2004
CONSOLIDATED
HALF-YEAR
2004 2003
$ $
Cash flows from operating activities
Exploration expenditure (4,132,114) (1,221,330)
Payments to suppliers and employees (inclusive of
goods and services tax) (982,665) (553,879)
(5,114,779) (1,775,209)
Interest received 526,677 22,121
Net cash (outflow) from operating activities (4,588,102) (1,753,088)
Cash flows from investing activities
Exploration expenditure (405,000) -
Payments for property, plant and equipment (642,607) (18,709)
Proceeds from sale of property, plant and equipment - 9,500
Net cash (outflow) from investing activities (1,047,607) (9,209)
Cash flows from financing activities
Proceeds from issues of shares 27,235,080 5,219,000
Issue costs (1,752,051) (197,053)
Net cash inflow from financing activities 25,483,029 5,021,947
Net increase (decrease) in cash held 19,847,321 3,259,650
Cash at the beginning of the reporting period 1,343,055 852,561
Net cash at the end of the reporting period 21,190,376 4,112,211
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes.
Notes to the Consolidated Financial Statements
For the half-year ended 31 December 2004
NOTE 1. BASIS OF PREPARATION
This general purpose financial report for the interim half-year reporting period
ended 31 December 2004 has been prepared in accordance with Accounting Standard
AASB 1029 Interim Financial Reporting, other mandatory professional reporting
requirements (Urgent Issues Group Consensus Views), other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations
Act 2001.
This interim financial report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this report is to
be read in conjunction with the annual report for the year ended 30 June 2004
and any public announcements made by Ballarat Goldfields NL during the interim
reporting period in accordance with the continuous disclosure requirements of
the Corporations Act 2001.
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period.
NOTE 2. SEGMENT INFORMATION
The consolidated entity operates predominatly in the mineral exploration
industry. Details of the mineral exploration activities are set out in the
Review of Operations. Each company within the consolidated entity operates
within the one geographic area, being Australia.
NOTE 3. DIVIDENDS
The directors do not recommend that a dividend be paid (2003: nil). Since the
end of the previous financial year, no dividend has been declared or paid.
NOTE 4. EQUITY - SHARE CAPITAL
Movements in ordinary share capital during the half year ended 31 December 2004:
No. of Shares Issue Price $ $
Opening balance 488,944,440 82,317,576
Issue of Ordinary shares: 7/07/2004 73,300,000 0.095 6,963,500
Issue of Ordinary shares: 9/08/2004 224,897,776 0.090 20,240,800
Less Issue Costs - - (1,752,051)
Exercise of Options 6/09/2004 166,666 0.047 7,867
Exercise of Options 6/09/2004 66,965 0.150 10,045
Exercise of Options 12/10/2004 27,235 0.150 4,085
Exercise of Options 10/11/2004 4,704 0.150 706
Closing balance 787,407,786 107,792,527
On 7 July 2004, BGF issued 73.3 million shares in a placement to institutional
investors at 9.5 cents each. On 4 August 2004, BGF was also pleased to announce
that it has closed its Rights Issue, with applications and monies received for
85% of the maximum subscription amount of 224,897,776 ordinary shares. The
shortfall of 32,775,122 shares were subscribed for pursuant to the underwriting
agreement with RFC Corporate Finance Ltd. All shares and options subscribed for
under the issue were allotted on 9 August 2004.
The combined funds of $27.2 million (before costs) raised from the Placement and
the Rights Issue are committed to the next stage of development of the Project.
As approved by shareholders at the AGM on 10 November 2004, one million Director
options were issued to Mike Etheridge on 11 November, 2004, expiring 30
September 2007. Of the options issued, one third are exercisable on 10 November
2004 at an exercise price of 12 cents; one third are exercisable on 10 November
2004 at an exercise price of 13 cents; and one third exercisable on 30 September
2005 at an exercise price of 15 cents.
Options were also issued to three employees, who are not directors of BGF, to
subscribe for shares in the capital of BGF at 17.25 cents, expiring 30 September
2007. A total of two million options were issued with one third of the options
exercisable at anytime; one third of the options exercisable after 30 September
2005; and one third of the options exercisable after 30 September 2006.
Movements in ordinary share capital during the half year ended 31 December 2003:
No. of Shares Issue Price $ $
Opening balance 407,754,440 77,295,629
Issue of Ordinary shares: 21/07/2003 58,000,000 0.050 2,900,000
Issue of Ordinary shares: 13/10/2003 23,190,000 0.100 2,319,000
Less Issue Costs - - (197,053)
Closing balance 488,944,440 82,317,576
NOTE 5. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The economic entity's bankers have guaranteed $379,500 (2003: $174,500) in the
event that the Company is called upon to rehabilitate any of the entity's
exploration sites. Other than as described above, there have been no changes in
the Contingent Liabilities or Contingent Assets during the half-year ended 31
December 2004 from those disclosed in the 2004 Annual Report.
NOTE 6. EVENTS OCCURRING AFTER REPORTING DATE
There are no matters or circumstances which have arisen since 31 December 2004
that have significantly affected or may significantly affect the operations of
the consolidated entity, the results of
those operations or the state of affairs of the consolidated entity in
subsequent periods.
NOTE 7. INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
The Australian Accounting Standards Board (AASB) is adopting IFRS for
application to reporting periods beginning on or after 1 January 2005. The AASB
will issue Australian equivalents to IFRS (A-IFRS), and the Urgent Issues Group
will issue abstracts corresponding to IASB interpretations originated by the
International Financial Reporting Interpretations Committee or the former
Standing Interpretations Committee. The adoption of Australian equivalents to
IFRS will be first reflected in the consolidated entity's financial statements
for the half-year ending 31 December 2005 and the year ending 30 June 2006.
Entities complying with Australian equivalents to IFRS for the first time will
be required to restate their comparative financial statements to amounts
reflecting the application of IFRS to that comparative period. Most adjustments
required on transition to IFRS will be made, retrospectively, against opening
retained earnings as at 1 July 2004.
The consolidated entity has reviewed the transition to Australian equivalents to
IFRS. The project is the responsibility of the Company Secretary who reports to
the Managing Director and the board of directors. The Company Secretary will
prepare a timetable for managing the transition to IFRS. To date the Company has
analysed most of the Australian equivalents to IFRS and has identified a number
of accounting policy changes that will be required.
The changes identified to date that will be required to the consolidated
entity's existing accounting policies include the following:
1. Impairment of Assets - The recoverable amount of non-current assets
will be assessed as the higher of net selling price and value in use, on a
discounted basis. BGF currently assesses recoverable amounts of non-current
assets based on undiscounted future net cash flows.
2. Exploration and Evaluation - An A-IFRS has now been released which
grandfathers accounting treatments which have previously been adopted by AASB
1022. Therefore, no material change is expected from the implementation of this
standard.
3. Restoration, rehabilitation and environmental expenditure -
Environmental obligations associated with the retirement or disposal of long
lived assets will be recognised when the disturbance occurs and is based on the
extent of damage incurred. The provision is measured as the present value of the
future expenditure and a corresponding rehabilitation asset is also recognised.
On an ongoing basis, the rehabilitation liability will be re-measured in line
with the changes in the time value of money (recognised as an expense in the
statement of financial performance and an increase in the provision), and
additional disturbances will be recognised as additions to a corresponding asset
and rehabilitation liability. The rehabilitation asset will be accounted for in
accordance with the accounting policy applicable to the asset to which it
relates (ie. Mine Development).
BGF will be required to remeasure the existing environmental rehabilitation
provision to the present value of the future expenditure and recognize a related
rehabilitation asset. Retained earnings will be impacted to the extent that this
net position differs from the existing rehabilitation provision.
4. Income Tax - Under the Australian equivalent to IAS 12 Income Taxes,
deferred tax balances are determined using the balance sheet method which
calculates temporary differences based on the carrying amounts of an entity's
assets and liabilities in the statement of financial position and their
associated tax bases. In addition, current and deferred taxes attributable to
amounts recognised directly in equity are also recognised directly in equity.
This will result in a change to the current accounting policy, under which
deferred tax balances are determined using the income statement method. Items
are only tax-effected if they are included in the determination of pre-tax
accounting profit or loss and/or taxable income or loss and current and deferred
taxes cannot be recognised directly in equity. Under IFRS deferred tax assets
will be recognised for the carry forward of unused tax losses to the extent that
future taxable profit is probable rather than virtually certain.
5. Equity-based compensation benefits - Under the Australian equivalent to
IFRS 2 Share-based Payment, equity-based compensation to employees will be
recognised as an expense in respect of the services received.
This will result in a change to the current accounting policy, under which no
expense is recognised for equity-based compensation.
The above should not be regarded as a complete list of changes in accounting
policies that will result from the transition to Australian equivalents to IFRS,
as not all standards have been analysed as yet, and some decisions have not yet
been made where choices of accounting policies are available. For these reasons
it is not yet possible to quantify the impact of the transition to Australian
equivalents to IFRS on the consolidated entity's financial position and reported
results.
Directors' Declaration
The directors declare that the financial statements and notes set out on pages 5
to 10:
(a) Comply with Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements, and
(b) Give a true and fair view of the consolidated entity's financial
position as at 31 December 2004 and of its performance, as represented by the
results of its operations and its cash flows, for the half-year ended on that
date.
In the directors' opinion:
(a) The financial statements and notes are in accordance with the
Corporation Act 2001; and
(b) There are reasonable grounds to believe that Ballarat Goldfields NL will
be able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the directors.
Richard Laufmann
Managing Director
Ballarat
18 February 2005
PricewaterhouseCoopers
ABN 52 780 433 757
333 Collins Street
MELBOURNE VIC 3000
GPO Box 1331L
MELBOURNE VIC 3001
DX 77 Melbourne
Australia
www.pwcglobal.com/au
Telephone +61 3 8603 1000
Facsimile +61 3 8603 1999
Independent review report to the members of
Ballarat Goldfields NL
Matters relating to the electronic presentation of the reviewed financial report
This review report relates to the financial report of Ballarat Goldfields NL for
the half-year ended 31 December 2004 included on Ballarat Goldfields NL's web
site. The company's directors are responsible for the integrity of the Ballarat
Goldfields NL's web site. We have not been engaged to report on the integrity of
this web site. The review report refers only to the financial report identified
below. It does not provide any assurance on any other information which may have
been hyperlinked to/from the financial report. If users of this report are
concerned with the inherent risks arising from electronic data communications
they are advised to refer to the hard copy of the reviewed financial report to
confirm the information included in the reviewed financial report presented on
this web site.
Statement
Based on our review, which is not an audit, we have not become aware of any
matter that makes us believe that the financial report of Ballarat Goldfields
NL:
* does not give a true and fair view, as required by the Corporations Act
2001 in Australia, of the financial position of the Ballarat Goldfields
Group (defined below) as at 31 December 2004 and of its performance for the
half-year ended on that date, and
* Is not presented in accordance with the Corporations Act 2001,
Accounting Standard AASB 1029: Interim Financial Reporting and other
mandatory financial reporting requirements in Australia, and the
Corporations Regulations 2001.
This statement must be read in conjunction with the rest of our review report.
Scope
The financial report and directors' responsibility
The financial report comprises the statement of financial position, statement of
financial performance, statement of cash flows, accompanying notes to the
financial statements, and the directors' declaration for the Ballarat Goldfields
Group (the Group), for the half-year ended 31 December 2004. The consolidated
entity comprises both Ballarat Goldfields NL (the company) and the entities it
controlled during that half-year.
The directors of the company are responsible for the preparation and true and
fair presentation of the financial report in accordance with the Corporations
Act 2001. This includes responsibility for the maintenance of adequate
accounting records and internal controls that are designed to prevent and detect
fraud and error, and for the accounting policies and accounting estimates
inherent in the financial report.
Review approach
We conducted an independent review in order for the company to lodge the
financial report with the Australian Securities and Investments Commission. Our
review was conducted in accordance with Australian Auditing Standards applicable
to review engagements.
We performed procedures in order to state whether, on the basis of the
procedures described, anything has come to our attention that would indicate
that the financial report does not present fairly, in accordance with the
Corporations Act 2001, Accounting Standard AASB 1029: Interim Financial
Reporting and other mandatory financial reporting requirements in Australia, a
view which is consistent with our understanding of the consolidated entity's
financial position, and its performance as represented by the results of its
operations and cash flows.
We formed our statement on the basis of the review procedures performed, which
included:
* inquiries of company personnel of certain internal controls,
transactions and individual items
* analytical procedures applied to financial data.
When this review report is included in a document containing information in
addition to the financial report, our procedures include reading the other
information to determine whether it contains any material inconsistencies
with the financial report.
These procedures do not provide all the evidence that would be required in an
audit, thus the level of assurance provided is less than that given in an audit.
We have not performed an audit, and accordingly, we do not express an audit
opinion.
While we considered the effectiveness of management's internal controls over
financial reporting when determining the nature and extent of our procedures,
our review was not designed to provide assurance on internal controls.
Our review did not involve an analysis of the prudence of business decisions
made by directors or management.
Independence
In conducting our review, we followed applicable independence requirements of
Australian professional ethical pronouncements and the Corporations Act 2001.
PricewaterhouseCoopers
Tim Goldsmith Melbourne
Partner 18 February 2005
Corporate Directory
Directors
* Colin Smith (Chairman)
* Richard Laufmann (Managing Director)
* Mike Etheridge
Secretary
* Amber Rivamonte
Registered Office
10 Woolshed Gully Drive
Mt Clear
Victoria 3350
Australia
Tel: 03 5327 1111
Fax: 03 5331 7927
Email: info@ballarat-goldfields.com.au
www.ballarat-goldfields.com.au
Postal Address
PO Box 1228
Bakery Hill
Victoria 3354
Share Registry
Computershare Investor Services Pty Limited
GPO Box 2975
Melbourne
Victoria 3001
Australia
Investor Enquires Tel: 1300 850 505
Tel: 03 9415 5000
Fax: 03 9473 2500
Auditor
PricewaterhouseCoopers
Chartered Accountants
333 Collins Street
Melbourne
Victoria 3000
Australia
Bankers
Australian and New Zealand Banking Group Limited
927 Sturt Street
Ballarat
Victoria 3350
Australia
Lawyers
Baker & McKenzie Solicitors
Rialto
Level 39, 525 Collins Street
Melbourne
Victoria 3000
Australia
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR IIFSFFVITLIE
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