RNS Number:0876T
Gippsland Limited
16 March 2007
GIPPSLAND LIMITED
ABN 31 004 766 376
and Controlled Entities
FINANCIAL REPORT
FOR THE HALF YEAR ENDED
31 DECEMBER 2006
CORPORATE DIRECTORY
DIRECTORS Robert John (Jack) Telford - Executive Chairman & Managing Director
John Morrison Chisholm - Executive Director
John Stuart Ferguson Dunlop - Non-Executive Director
John Damien Kenny - Non-Executive Director
COMPANY SECRETARY Rowan St John Caren
REGISTERED OFFICE 207 Stirling Highway
Claremont WA 6010
Australia
POSTAL ADDRESS PO Box 352
Nedlands WA 6909
Australia
TELEPHONE +61 (0)8 9340 6000
FACSIMILE +61 (0)8 9340 6060
E-MAIL info@gippslandltd.com
WEBSITE www.gippslandltd.com
AUDITORS Grant Thornton Western Australian Partnership, Chartered Accountants
256 St George's Terrace
Perth WA 6000
Australia
NOMINATED ADVISOR (NOMAD) Grant Thornton Corporate Finance
Grant Thornton House
Melton Street, Euston Square
London NW1 2EP
United Kingdom
SOLICITORS Blakiston and Crabb Trowers & Hamlins
1202 Hay Street 3rd Floor, 1 El Gabalaya Street
West Perth WA 6005 Zamalek, Cairo
Australia Arab Republic of Egypt
Cobbets Ibrahim Naji & Co
Ship Canal House Suite 409, Level 4
King Street 102-B Margahny Street
Manchester M2 4WB Heliopolis, Cairo
United Kingdom Arab Republic of Egypt
SHARE REGISTRIES Security Transfer Registrars Pty Ltd PO Box 535
Suite 1, Alexandrea House Applecross WA 6953
770 Canning Hwy Australia
Applecross Wa 6153
Australia
Website: www.securitytransfer.com.au
Computershare Limited
PO Box 82
The Pavilions, Bridgwater Road
Bristol BS99 7NH
United Kingdom
Website: www.computershare.com
AUSTRALIAN STOCK EXCHANGE The Company's securities are quoted on the official
list of the Australian Stock Exchange Ltd (ASX), the home exchange being:
The Australian Stock Exchange (Perth) Ltd
1 The Esplanade
Perth WA 6000
Australia
ASX CODES Shares - GIP
Listed options - GIPO
LONDON STOCK EXCHANGE The Company's securities are quoted on the London Stock
Exchange Plc's (LSE) Alternative Investment Market (AIM);
10 Paternoster Square
London, EC4M 7LS
United Kingdom
LSE - AIM CODES Shares - GIP
Listed options - GIPO
DIRECTORS' REPORT
Your directors submit the financial report of the economic entity for the half
year ended 31 December 2006.
Directors
The names of directors who held office during or since the end of the half-year:
Mr Robert J Telford
Dr John M Chisholm
Mr John D Kenny
Mr John SF Dunlop
Review of Operations
The consolidated operating loss after tax for the half year was $1,978,847 (2005
- $1,234,588).
The principal activities of the economic entity during the half-year were the
exploration and development of commercially and economically viable mineral
resources. The primary focus continued to be on the development of the Abu
Dabbab tantalite, tin and feldspar project in Egypt in which Gippsland has a 50%
economic interest by way of an incorporated joint venture with the Egyptian
Government. The Bankable Feasibility Study ("BFS") was updated for financing
purposes. The updated BFS confirmed that the 40 million tonne Abu Dabbab project
will produce an average of 650,000 pounds of tantalum pentoxide (Ta2O5) over the
first thirteen years of an estimated twenty year mine life, which will establish
Gippsland as the world's second largest tantalum producer. The project will also
produce an average of 1,530 tonnes of tin per annum.
The project also has the potential to become a significant feldspar producer for
use in the manufacture of ceramic floor tiles and sanitary ware from the
tailings generated in the production of tantalum and tin. A feasibility study on
the feldspar production will commence once the tantalum and tin operation is in
operation.
On November 27, 2006, Gippsland announced the appointment of the German company
Linden Advisory & Consulting Services as its Financial Advisor for the financing
of the Abu Dabbab project.
Gippsland also continued exploration on the Wadi Allaqi tenements in southern
Egypt. At Seiga, this exploration produced a first pass inferred resource of 1.5
million tonnes at 1.7g/t Au containing 93,000 ounces of gold.
The company boosted its financial and commercial expertise with the appointment
of Mr Paul Sims as Chief Financial Officer and Mr Rowan Caren as Company
Secretary.
Auditor's Declaration
The lead auditor's independence declaration under section 307C of the
Corporations Act 2001 is set out on page 4 for the half-year ended
31 December 2006.
This report is signed in accordance with a resolution of the Board of Directors.
R J TELFORD
DIRECTOR
Dated this 16th day March 2007
AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT
2001
TO THE DIRECTORS OF GIPPSLAND LIMITED
AUDITOR'S INDEPENDENCE DECLARATION
In accordance with the requirements of section 307C of the Corporations Act
2001, as lead auditor for the review of Gippsland Limited and its controlled
entities for the half-year ended 31 December 2006, 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.
GRANT THORNTON WESTERN AUSTRALIAN PARTNERSHIP
Chartered Accountants
Cyrus patell
Partner
Dated 16 March 2007
CONSOLIDATED INCOME STATEMENT
FOR THE HALF YEAR ENDED 31 DECEMBER 2006
Consolidated Entity
31 December 2006 31 December 2005
$ $
Other Income 92,632 10,669
Employee expenses (221,131) (136,987)
Depreciation (18,641) (10,643)
Project feasibility and exploration
expenses (1,268,856) (531,891)
Management and consulting expenses (146,972) (71,424)
Corporate office expenses (43,381) (29,069)
AIM administration expenses (129,376) (91,160)
Unrealised foreign exchange
(losses)/gains (3,703) 16,757
Impairment of exploration - (194,143)
Other expenses from ordinary activities (239,419) (196,697)
----------- -----------
Loss before income tax expense (1,978,847) (1,234,588)
Income tax expense - -
----------- -----------
Net loss attributable to members of the
parent entity (1,978,847) (1,234,588)
============= =============
Basic loss / diluted loss per share
(cents per share) (0.8) (0.7)
The accompanying notes form part of these financial statements
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2006
Consolidated Entity
31 December 30 June 31 December
2006 2006 2005
$ $ $
CURRENT ASSETS
Cash and cash equivalents 2,194,399 3,937,943 826,916
Trade and other receivables 54,281 49,212 42,650
Other current assets 6,744 915 3,650
--------- --------- ---------
TOTAL CURRENT ASSETS 2,255,424 3,988,070 873,216
--------- --------- ---------
NON CURRENT ASSETS
Property, plant and equipment 194,160 35,684 43,004
--------- --------- ---------
TOTAL NON CURRENT ASSETS 194,160 35,684 43,004
--------- --------- ---------
TOTAL ASSETS 2,449,584 4,023,754 916,220
--------- --------- ---------
CURRENT LIABILITIES
Trade and other payables 541,100 208,109 172,948
Short term provisions 18,951 9,923 9,000
--------- --------- ---------
TOTAL CURRENT LIABILITIES 560,051 218,032 181,948
--------- --------- ---------
NON-CURRENT LIABILITIES
Long term provisions 16,683 15,000 -
--------- --------- ---------
TOTAL NON-CURRENT LIABILITIES 16,683 15,000 -
--------- --------- ---------
TOTAL LIABILITIES 576,734 233,032 181,948
--------- --------- ---------
NET ASSETS 1,872,850 3,790,722 734,272
--------- --------- ---------
EQUITY
Contributed equity 22,658,274 22,658,274 17,187,682
Share option reserve 138,802 77,827 77,827
Accumulated losses (20,924,226) (18,945,379) (16,531,237)
--------- --------- ---------
1,872,850 3,790,722 734,272
--------- --------- ---------
The accompanying notes form part of these financial statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED 31 DECEMBER 2006
Share Capital Retained Option Total
-Ordinary Earnings Reserve
Balance at 1
July 2005 15,868,236 (15,296,649) - 571,587
Loss
attributable
to members of
parent entity - (1,234,588) - (1,234,588)
----------- --------- ------- --------
Sub-total 15,868,236 (16,531,237) - (663,001)
Shares issued
during the
year 1,388,890 - - 1,388,890
Option
reserve
on
recognition
of bonus - - 77,827 77,827
element of
options
Transaction
Costs (69,444) - - (69,444)
----------- --------- ------- --------
Balance at 31
December 2005 17,187,682 (16,531,237) 77,827 734,272
----------- --------- ------- --------
Balance at 1
July 2006 22,658,274 (18,945,379) 77,827 3,790,722
Loss
attributable
to members of
parent entity - (1,978,847) - (1,978,847)
----------- --------- ------- --------
Sub-total 22,658,274 (20,924,226) 77,827 1,811,875
Option
reserve
on
recognition
of bonus - - 60,975 60,975
element of ----------- --------- ------- --------
options
Balance at 31
December 2006 22,658,274 (20,924,226) 138,802 1,872,850
=========== ========= ======= ========
The accompanying notes form part of these financial statements
CONSOLIDATED CASH FLOW STATEMENT
FOR THE HALF YEAR ENDED 31 DECEMBER 2006
Consolidated Entity
31 December 31 December
2006 2005
$ $
CASH FLOW FROM OPERATING ACTIVITIES
Payments to suppliers and employees (1,647,122) (884,767)
Interest received 84,399 10,669
--------- ---------
Net cash used in operating activities (1,562,723) (874,098)
--------- ---------
CASH FLOW FROM INVESTING ACTIVITIES
Payments for property, plant and equipment (177,117) (11,705)
Payments for exploration / tenement - (179,492)
guarantees --------- ---------
Net cash used in investing activities (177,117) (191,197)
--------- ---------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from share issues - 1,388,890
Payments for share issues - (69,444)
--------- ---------
Net cash provided by financing activities - 1,319,446
--------- ---------
Net (decrease) / increase in cash held (1,739,841) 254,151
Effects of exchange rate changes on cash (3,703) (16,757)
Add opening cash brought forward 3,937,943 589,522
--------- ---------
Closing cash carried forward 2,194,399 826,916
--------- ---------
The accompanying notes form part of these financial statements.
NOTE 1. BASIS OF PREPARATION
The half-year consolidated financial statements are a general purpose financial
report prepared in accordance with the requirements of the Corporations Act
2001, Australian Accounting Standard AASB 134: Interim Financial Reporting,
Urgent Issues Group Interpretations and other authoritative pronouncements of
the Australian Accounting Standards Board.
It is recommended that this financial report be read in conjunction with the
annual financial report for the year ended 30 June 2006 and any public
announcements made by Gippsland Limited and its controlled entities during the
half-year in accordance with the continuous disclosure requirements arising
under the Corporations Act 2001.
The half-year report does not include full disclosures of the type normally
included in an annual financial report.
Reporting Basis and Conventions
The half-year report has been prepared on an accrual basis and is based on
historical costs modified by the revaluation of selected non-current assets,
financial assets and financial liabilities for which the fair value basis of
accounting has been applied.
(i) Going Concern
The financial statements have been prepared on the going concern basis of
accounting which assumes that the Company will be able to meet its commitments,
realise its assets and discharge its liabilities in the ordinary course of
business.
The Company's ability to continue as a going concern is contingent upon raising
additional capital to fund exploration commitments, other principal activities
and working capital. If additional capital is not raised, the going concern
basis may not be appropriate with the result that the entity may have to realise
its assets and extinguish its liabilities other than in the ordinary course of
business and at amounts different from those stated in the financial report. No
allowance for such circumstances has been made in the financial report.
NOTE 2: SEGMENT INFORMATION
Primary reporting - Business segments
The economic entity only operates in the mining and exploration segment.
Primary reporting - Geographic segments
Segment Revenue Segment result
Half-year ended Half-year ended
31 December 31 December 31 December 31 December
2006 2005 2006 2005
$ $ $ $
Continuing operations
Australia 92,596 10,669 (1,142,956) (1,040,445)
Egypt 36 - (835,891) (194,143)
--------- -----------
Consolidated revenue 92,632 10,669
--------- ----------- ----------- -----------
Loss before income tax
expense (1,978,847) (1,234,588)
Income tax expense - -
----------- -----------
Loss for the period (1,978,847) (1,234,588)
----------- -----------
NOTE 3: CONTRIBUTED EQUITY
31 December 31 December
2006 2006
$ Number
Issued capital:
-----------------
232,851,926 (June 2006: 232,851,926) fully
paid ordinary shares 22,658,274 232,851,926
========== ==========
Movement
----------
Opening Balance 22,658,274 232,851,926
Shares issued during the period - -
---------- ----------
Closing balance 22,658,274 232,851,926
========== ==========
As at 31 December 2006 the economic entity had the following options on issue:
(i) 43,738,393 listed options exercisable at 9 cents each by 31 December 2007;
(ii) 10,000,000 unlisted options exercisable at 4 UK pence each by
31 December 2007;
(iii) 4,500,000 unlisted options exercisable at 15 cents each by 31 December
2007; and
(iv) 25,000,000 unlisted options exercisable at 13.5 cents each by 26 May 2012.
NOTE 4: CONTINGENT LIABILITIES
There have been no changes in contingent liabilities since the last annual
reporting date.
NOTE 5: EVENTS SUBSEQUENT TO REPORTING DATE
Since 31 December 2006, no event has arisen that would be likely to materially
affect the operations of the economic entity, the results of the economic entity
or the state of affairs of the economic entity not otherwise disclosed in the
economic entity's financial statements.
DIRECTORS' DECLARATION
The directors of Gippsland Limited declare that:
1. The financial statements and notes, as set out on pages 5 to 10:
a) comply with Accounting Standard AASB 134: Interim Financial Reporting
and the Corporations Regulations 2001; and
b) give a true and fair view of the consolidated entity's financial
position as at 31 December 2006 and of its performance for the half-year
ended on that date.
2. In the directors' opinion there are reasonable grounds to believe that
the economic entity 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 Board of
Directors dated this 16th day of March 2007.
R.J. Telford
Chairman
INDEPENDENT AUDIT REVIEW TO THE MEMBERS OF GIPPSLAND LIMITED
Independent Review Report
To the Members of Gippsland Limited and its Controlled Entities
Scope
The half-year financial report and Director's responsibility
We have reviewed the accompanying half-year financial report of Gippsland
Limited and its Controlled Entities (the consolidated entity) which comprises
the consolidated balance sheet as at 31 December 2006 and the consolidated
income statement, consolidated statement of changes in equity and consolidated
cash flow statement for the half-year ended on that date, a description of
accounting policies, other selected explanatory notes and the directors'
declaration. The consolidated entity comprises both Gippsland Limited and the
entities it controlled during that half-year.
The directors of the consolidated entity are responsible for the preparation and
fair presentation of the half-year financial report in accordance with
Australian Accounting Standards (including the Australian Accounting
Interpretations) and 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 appropriate
accounting policies and reasonable accounting estimates inherent in the
half-year financial report.
Review approach
We conducted an independent review where our responsibility is to express a
conclusion on the half-year financial report based on our review. We conducted
our review in accordance with Auditing Standard on Review Engagement ASRE 2410
'Review of an Interim Financial Report Performed by the Independent Auditor of
the Entity', in order to state whether, on the basis of the procedures
described, we have become aware of any matter that makes us believe that the
financial report is not in accordance with the Corporations Act 2001 including,
giving a true and fair view of the consolidated entity's financial position as
at 31 December 2006 and its performance for the half-year ended on that date;
and complying with Accounting Standard AASB 134 'Interim Financial Reporting and
the Corporations Regulations 2001'. As the auditor of Gippsland Limited and its
controlled entities, ASRE 2410 requires that we comply with the ethical
requirements relevant to the audit of the annual financial report.
A review of a half-year financial report 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 Australian Auditing Standards 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. We have not
performed an audit and, accordingly, we do not express an audit opinion.
Independence
In conducting our review, we complied with the independence requirements of the
Corporations Act 2001.
Conclusion
Based on our review, which is not an audit, we have not become aware of any
matter that makes us believe that the half-year financial report of Gippsland
Limited and its controlled entities is not in accordance with the Corporations
Act 2001, including:
(a) Giving a true and fair view of the consolidated entity's financial
position as at 31 December 2006 and of its performance for the half-year
ended on that date.
(b) Complying with Australian Accounting Standard AASB 134 : 'Interim
Financial Reporting' and the Corporations Regulations 2001.
Inherent Uncertainty Regarding Continuation as a Going Concern
Without qualification to the review opinion expressed above, attention is drawn
to the following matter. As a result of the matters described in Note 1 to the
financial statements, there is significant uncertainty whether the entity will
be able to continue as a going concern and therefore whether it will realise its
assets and extinguish its liabilities in the normal course of business and at
the amounts stated in the financial report
GRANT THORNTON WESTERN AUSTRALIAN PARTNERSHIP
Chartered Accountants
CYRUS PATELL
Partner
Perth, WA
16 March 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
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