TIDMGGG
GGG Resources plc
(the "Company" or "GGG")
ARBN 143 978 376
INTERIM FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2011
GGG Resources plc (AIM: GGG, ASX: GGB) reports its results for the six months ended 30 June 2011.
Chairman's Statement
The Company has made strong progress in 2011 against a background of market uncertainties.
In May the Company commenced trading on the Australian Stock Exchange with an accompanying
capital raising of over $8.1 million from Institutional and retail shareholders. During this
period the Company launched a takeover bid for all of the fully paid ordinary shares of Auzex
Resources Limited in order to consolidate the Bullabulling Project under a single corporate
entity. We also strengthened our Board with the appointment of David McArthur as our Financial
Director.
The Joint Venture completed a 35,000 metre Phase One drilling programme with the intention of
converting a portion of the Inferred Resources into Indicated Resources. A new resource of
2.6 million ounces, including 711,000 ounces in the Indicated category was announced in
August 2011.
Since then the Joint Venture has embarked on an additional 90,000 metre Phase Two drilling
programme which consists of 70,000 metres of infill drilling to further increase the Indicated
category resource base with a view of converting these into Probable reserves, and 20,000
metres of exploration drilling.
Highlights:
Corporate
* Successful raising of Australian $8.13 million saw GGG Resources plc list on the ASX (Code: GGB)
on 17 May 2011. The ASX listing complements the Company's London Stock Exchange AIM listing
(Stock Ticker: GGG).
* The total number of shares in the capital of the Company on issue is 165,746,090 of which
20,322,500 shares are traded as CDIs on the ASX.
* On 14 March 2011 GGG launched a scrip takeover bid for all the fully paid ordinary shares
that it did not already own in ASX listed Auzex Resources Limited (AZX). The offer terms were
7 shares in GGG for every 5 shares in AZX, closing on 6 June 2011. The offer period was extended
a number of times, however the offer now will lapse on September 5, 2011.
* On 16 March 2011 we appointed David McArthur as the Finance Director to the Company. David is a
qualified chartered accountant who specialised in the corporate and project management of publicly
listed companies in the resources sector for the past 28 years.
Exploration
* Development of Bullabulling continues on track with over 60,000m of drilling completed since the
project was acquired in May 2011.
* Phase I drilling completed and Phase 2 drilling well underway with three drill rigs currently
operating on site.
* Approval received from the WA Government for a Programme of Works for a planned 194,000m drilling
programme to be drilled over the coming months.
* Results from drilling continue to confirm and expand the current resource model, and include high
grade intersections. The August 2010 JORC Inferred Resource was 1,982,000 ounces of contained gold.
* Joint venture resource consultant has confirmed that an adequate QAQC exists which validates the
use of all historic RC and diamond drill data for resource and reserve estimation.
* A deep drilling programme to test for high grade mineralisation below the current resource limit
is planned.
Post Balance Sheet Events:
* In early August 2011 we reported that we received the final payment of US$3.27 million from the
sale of Nimu Project in China. This brings the total repatriated proceeds from this sale to
US$7.4 million (approximately GBP5.0 million) representing GBP0.7 million more than was budgeted for at
the time of the GGG 2009 statutory accounts.
* In mid August 2011 we published a new JORC resource estimate, based on Phase One drilling, of
78.8 Mt @ 1.03 g/t Au for 2.6 million ounces of gold at 0.5 g/t cut-off. The resource is largely
in the Inferred Resource category however it includes 711,700 ounces of Indicated Resources.
* On 30 August 2011 we announced the signing of a Heads of Agreement to merge with Auzex Resources
Ltd by way of Scheme of Arrangement. The takeover Bid will lapse on 5 September 2011. No acceptances
under the offer to date will be accepted by GGG.
Outlook
The results to date from Bullabulling confirm our initial assessment that Bullabulling is a quality
asset which has the potential to generate substantial returns for shareholders. Your Board's priority
now is to consolidate Bullabulling under one corporate entity and to accelerate the resource
definition and development of Bullabulling.
I look forward to updating Shareholders on further progress in the coming months.
Dr. Peter Ruxton
Chairman
General Enquiries, please contact:
Dr. Jeffrey Malaihollo
MD, GGG Resources plc (UK)
Tel: + 44 1992 531820
Website: www.gggresources.com
David McArthur
GGG Resources plc (Australia)
Tel: +61 8 9423 3200
Westhouse Securities Limited (UK Nominated Adviser)
Tom Price / Martin Davison
Tel: + 44 20 7601 6100
Collins Stewart Europe Limited (Broker)
John Prior / Adam Miller
Tel: + 44 20 7523 8350
Neil Boom
MD, Gresham PR Ltd (UK).
Tel: + 44 7866 805 108
David Brook
Professional Public Relations (Australia media)
T: +61 8 9388 0944/ +61 433 112 936
E: david.brook@ppr.com.au
COMPANY DIRECTORY
DIRECTORS:
Dr Peter Antony Ruxton (Non-Executive Chairman)
Jeffrey Malaihollo (Managing Director)
David McArthur (Financial Director)
Ciceron Angeles (Technical Director)
Michael Short (Non-Executive Director)
Nigel Clark (Non-Executive Director)
Paul McGroary (Non-Executive Director)
COMPANY SECRETARY:
Cobbetts (Secretarial) Limited
58 Mosley Street
Manchester M2 3HZ
United Kingdom
REGISTERED AND PRINCIPAL OFFICE (UK):
58 Mosley Street
Manchester, M2 3HZ
United Kingdom
REGISTERED AND PRINCIPAL OFFICE (AUSTRALIA):
41 Stirling Highway
Nedlands WA 6009
GGG Resources plc
Interim Results (reviewed, unaudited) for the period ended 30 June 2011
CONSOLIDATED INCOME STATEMENT
Six months ended 30 June 2011
Six months Six months
ended ended
30 June 30 June
2011 2010
GBP GBP
Administrative expenses (422,142) (522,253)
OPERATING LOSS (422,142) (522,253)
Investment revenues - interest 239,863 17,790
on bank deposits
LOSS BEFORE TAX (182,279) (504,463)
Tax (305,977) -
LOSS FOR THE FINANCIAL PERIOD (488,256) (504,463)
ATTRIBUTABLE TO THE EQUITY (488,256) (504,463)
HOLDERS OF THE PARENT
LOSS PER SHARE GBP0.0032 GBP0.0026
DILUTED LOSS PER SHARE GBP0.0029 GBP0.0024
The Company has taken advantage of the provisions of the Companies Act 2006 not to
publish its own Income Statement.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 30 June 2011
Six months Six months
ended ended
30 June 30 June
2011 2010
GBP GBP
OTHER COMPREHENSIVE INCOME
Foreign currency translation differences (42,827) (76,399)
on foreign operations
OTHER COMPREHENSIVE INCOME FOR THE PERIOD (42,827) (76,399)
RECOGNISED DIRECTLY IN EQUITY
Loss for the period (488,256) (504,463)
TOTAL COMPREHENSIVE INCOME / (LOSS) (531,083) (580,862)
FOR THE PERIOD
The Group has included a consolidated statement of comprehensive income and expense for
the period ended 30 June 2011 and 2010. This revision has no impact on the statement of
financial position for 2011, 2010 or 2009. The 2009 statement of financial position is
available in the 2010 interim financial results announcement, which is available on the
Company's website, www.gggresources.com, under the section headed Corporate and Reports.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months Six months
ended ended
30 June 30 June
2011 2010
GBP GBP
Opening balance 15,776,433 5,334,039
Loss for the financial period (488,256) (504,463)
New equity share capital 406,450 140,449
subscribed
Premium on new equity share 4,227,426 421,349
capital subscribed
Value attributed to share - 107,815
options granted
Translation reserve (42,827) (76,399)
Closing balance 19,879,226 5,422,790
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 31 December
2011 2010
GBP GBP
NON CURRENT ASSETS
Investment 3,080,396 3,080,396
Other intangible assets 4,737,796 2,011,385
7,818,192 5,091,781
CURRENT ASSETS
Other receivables 584,359 467,714
Cash and cash equivalents 13,085,967 10,784,896
13,670,326 11,252,610
TOTAL ASSETS 21,488,518 16,344,391
EQUITY
Share capital 3,314,922 2,908,472
Share premium 20,171,811 15,944,385
Warrant reserve 52,585 52,585
Share option reserve 345,799 345,799
Translation reserve 711,509 754,336
Available for sale asset reserve 2,089,138 2,089,138
Retained losses (6,806,538) (6,318,282)
EQUITY ATTRIBUTABLE TO EQUITY 19,879,226 15,776,433
HOLDERS OF THE PARENT
TOTAL EQUITY 19,879,226 15,776,433
CURRENT LIABILITIES
Other payables 1,405,058 567,958
Restoration provision 204,234 -
TOTAL EQUITY AND LIABILITIES 21,488,518 16,344,391
CONSOLIDATED CASH FLOW STATEMENT
Six months Six months
ended ended
30 June 30 June
2011 2010
GBP GBP
Operating loss (422,142) (522,253)
Stock option expense - 107,815
Decrease(Increase) in receivables (116,645) 1,943,839
and other current assets
(Decrease)Increase in other payables 1,041,334 (680,720)
502,547 848,681
Effect of foreign exchange (42,827) (75,076)
translation
Tax paid by foreign subsidiary (305,977) -
NET CASH USED IN OPERATING 153,743 773,605
ACTIVITIES
INVESTING ACTIVITIES
Acquisition of marketable - (842,697)
Securities
Change in other intangible assets (2,726,411) (1,212,573)
Interest received 239,863 17,790
NET CASH USED IN INVESTING (2,486,548) (2,037,480)
ACTIVITIES
FINANCING ACTIVITIES
Issue of equity share capital 406,450 140,449
Share premium on issue of 4,227,426 421,438
equity share capital
NET CASH FROM FINANCING ACTIVITIES 4,633,876 561,797
NET INCREASE(DECREASE) IN CASH 2,301,071 (702,078)
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT 10,784,896 3,762,442
BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS AT 13,085,967 3,060,364
END OF PERIOD
NOTES TO THE FINANCIAL STATEMENTS
Six months ended 30 June 2011
1. ACCOUNTING POLICIES
These interim financial statements do not constitute statutory financial statements
within the meaning of the Companies Act 2006. A copy of the statutory accounts for
the year ended 31 December 2010 has been delivered to the Registrar of Companies.
The auditors' report on those accounts was not qualified and did not contain statements
under the Companies Act 2006.
The annual financial statements of the group are prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union. The condensed set
of financial statements included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim Financial Reporting", as
adopted by the European Union.
Whilst the results for the six-month period ended 30 June 2011 are unaudited, they have
been reviewed by the Company's Auditors.
2. LOSS PER SHARE
IAS requires presentation of diluted earnings per share when a company could be called
upon to issue shares that would decrease net profit or increase net loss per share.
The calculation of basic and diluted loss per ordinary share is based on the loss of GBP488,256
for the six months ended 30 June 2011 (June 2010: GBP504,463) and on 150,251,587 ordinary shares
(June 2010: 194,153,087) being the weighted-average number of ordinary shares in issue,
diluted by 11,980,000 outstanding options (June 2010 - 16,700,000) and 4,934,208 outstanding
warrants (June 2010 - nil).
3. TAX
The tax expense during the period of GBP305,977 includes withholding tax paid on repatriating
proceeds on the sale of the NIMU Project in China, which amounted to GBP305,652 (2010 - nil).
4. SHARE CAPITAL
30 June 30 June
2011 2010
Called up, allotted and fully paid
No. GBP No. GBP
Ordinary shares
of 1 pence each - - 197,412,135 1,974,121
Ordinary shares
of 2 pence each 165,746,090 3,314,922 - -
Equity Share Capital Consolidation
In December 2010, the equity share capital of the Company was consolidated on a 1:2 basis.
Issue of shares
During the six months ended 30 June 2011, 20,322,500 2p ordinary shares were issued at 25
pence per share upon listing on the Australian Stock Exchange (equivalent of AUD 0.40).
During the six months ended 30 June 2010, 14,044,944 1p ordinary shares were issued at
4 pence per share
At 30 June 2011, the Group has 4,934,208 share purchase warrants outstanding (June 2010 - nil)
at a weighted exercise price of 12.6 pence, expiring on 19 January 2012.
At 30 June 2011, the total number of share options outstanding was 11,980,000
(June 2010 - 16,700,000). During the financial period, no share options were issued
(June 2010 - 9,150,000) and no options lapsed (June 2010 - 1,850,000).
5. INVESTMENT
The investment of GBP3,080,396 (June 2010 - GBP842,697) comprises the Company's interest of
8,000,000 shares in Auzex Resources Limited (June 2010 - 6,000,000) after taking up a rights
issue in August 2010 for an additional 2,000,000 shares. At the last practical date before
announcement of the interim results, these shares traded at AUD 0.39.
6. POST BALANCE SHEET EVENTS
In early August 2011 we reported that we received the final payment of US$3.27 million from
the sale of Nimu Project in China. This brings the total repatriated proceeds from this sale
to US$7.4 million (approximately GBP5.0 million) representing GBP0.7 million more than was budgeted
for at the time of the GGG 2009 statutory accounts.
In mid August 2011 we published a new JORC resource estimate, based on Phase One drilling, of
78.8 Mt @ 1.03 g/t Au for 2.6 million ounces of gold at 0.5 g/t cut-off. The resource is
largely in the Inferred Resource category however it includes 711,700 ounces of Indicated
Resources.
On 30 August 2011 we announced the signing of a Heads of Agreement to merge with Auzex Resources
Ltd by way of Scheme of Arrangement. The takeover Bid will lapse on 5 September 2011. No
acceptances under the offer to date will be accepted by GGG.
INDEPENDENT REVIEW REPORT TO GGG RESOURCES PLC
Introduction
We have been engaged by the group to review the condensed set of financial statements in the
half-yearly financial report for the six months ended 30 June 2011 which comprises the consolidated
income statement, the consolidated statement of comprehensive income, the consolidated statement
of financial position, the consolidated statement of cash flows, the consolidated statements of
changes in equity and the related explanatory notes that have been reviewed. We have read the other
information contained in the half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the condensed set of
financial statements.
Directors' responsibilities
The interim 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
report in accordance with the Disclosure and Transparency rules of the United Kingdom's Financial
Services Authority.
As disclosed in note 1 the annual financial statements of the group are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European Union.The condensed
set of financial statements included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted
by the European Union.
Our responsibility
Our responsibility is to express to the group a conclusion on the condensed set of financial
statements in the half-yearly financial report based on our review.
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 condensed
set of financial statements in the half-yearly financial report for the six months ended 30 June 2011
is not prepared, in all material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency rules of the United Kingdom's
Financial Services Authority.
Lee Lederberg (Senior Statutory Auditor)
For and on behalf of:
Edwards Veeder (Oldham) LLP
Block E, Brunswick Square
Union Street
Oldham
OL1 1DE Date 5 September 2011
END
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