TIDMGSR
RNS Number : 3207J
Golden Saint Resources Ltd
27 June 2017
27 June 2017
Golden Saint Resources Ltd
("GSR" or the "Company")
Audited results for the financial year ended 31 December
2016
and Notice of AGM
The Board of Directors of Golden Saint Resources Ltd is pleased
to announce the audited results for the financial year ended 31
December 2016.
Highlights within the 12 months to 31 December 2016
-- All the Company's three exploration licences in Sierra leone
(Baja, Tongo and Moa) were approved for renewal by the National
Minerals Agency ("NMA") for another term of three years with first
renewals due at the end of 2018 and early 2019 and provisional
extensions to 2020 and 2021 provided annual licence payment
obligations are fully met;
-- Initial bulk sampling operations in Tongo were successfully
completed on 22 Aug 2016 with a recovery of a total of 64 diamonds
weighing 26.78 carats yielding a diamond grade of 9.1 carats per
hundred tonnes to 21.2 carats per hundred tonnes. At the same time,
the total gold recovered amounted to 8.49 grams yielding a gold
grade of 0.04 to 0.05 grams per tonne;
-- The building of vehicular road access to Baja site 2 was
completed in October 2016 and after the transportation and
commissioning of the local plant at Baja site 2, the alluvial bulk
sampling operations on the Sewa River low terrace commenced in
November 2016 through to December 2016;
-- The bulk sampling operations at Baja site 2 yielded a total
of 19 diamonds weighing 7.81 carats and ranging from 0.17 to 1.57
carats per stone and the total amount of alluvial gold recovered
was 7.97 grams;
-- With the newly created vehicular access at Baja, the Company
was able to clear two additional localities at Baja site 3 and Baja
site 4 to allow for the excavation of sample trenches to enable the
Company to systematically develop the exploration targets in the
selected alluvial terrace deposits along the Sewa River towards an
inferred resource level of confidence;
-- At Tongo site 1, the original bulk sample trench on the low
terrace of the Woa River was extended for further extraction of
gravels for processing by the Dove Explorer sampling plant;
-- The Diamond Club generated approximately USD $16,000 (2015:
USD $26,000) in confirmed sales during the financial year. Another
USD $6,018 diamond sale was made on 1 February 2017
Highlights of operations post 31 December 2016
-- During the months of February 2017 and March 2017, the
washing operations at Tongo site 1 and Baja site 4 produced the
following results:
Licensed Date of washing Number of Number of Description
area operation in tonnes of carats of
2017 gravels washed diamonds
recovered
----------- ---------------- ---------------- ------------ ------------------
Tongo site 14 Feb to 30 138 tonnes 3.75 carats 2 stones of 1.0
1 Mar carat and 1.45
carats each
----------- ---------------- ---------------- ------------ ------------------
Baja site 26 Feb to 30 156 tonnes 3.00 carats 19 stones ranging
4 Mar from 0.05 carats
to 0.40 carats
----------- ---------------- ---------------- ------------ ------------------
-- Following one of the site visits by the Company's technical
consultants, Rock Forage Consulting Services ( "Rock Forage") in
December 2016, a report was released by the Company on 20 January
2017 that provided the estimated provisional alluvial diamond and
gold inventories for the Baja and Tongo exploration targets based
on Rock Forage's crtical analysis with proposed solutions to lift
these targets to the required inferred resource level of
confidence;
-- The following tables setting out the diamond and gold
estimates have been extracted from the detalied Rock Forage report
which can be downloaded from the Company's website at
www.goldensaintresources.com:
Baja Exploration Targets
The estimated tonnes of basal mineralized gravel are
approximately 2,100,000 tonnes (range some 1,800,000 t to 2,400,000
t), which could host between 210,000 to 525,000 carats of diamonds
and some 63 to 105 kg of alluvial gold. Please see table below for
further details:
Sewa North & Sewa South Provisional Inventory (Exploration
Targets)
Length Width Gravel 50% Remaining Possible Possible Possible Possible
(m) (m) thickness Target Carat Carat Gold Gold
(m) (tonnes) Inventory Inventory Inventory Inventory
at 10 at 25 (kg) (kg)
cpht cpht at 0.03 at 0.05
g/t g/t
-------- -------- -------- ----------- -------------- ----------- ----------- ----------- -----------
Sewa
North 4,000 200 0.5 400,000 40,000 100,000 12 20
-------- -------- -------- ----------- -------------- ----------- ----------- ----------- -----------
200x2
(east
Sewa & west
South 8,500 banks) 0.5 1,700,000 170,000 425,000 51 85
-------- -------- -------- ----------- -------------- ----------- ----------- ----------- -----------
Total
= 2,100,000 210,000 525,000 63 105
----------- -------------- ----------- ----------- ----------- -----------
Notes
1. The figures set out above are Exploration Targets and are
merely guidelines for potential mineralisation. These figures are
not to be regarded as any category of Resource under an AIM
acceptable Standard.
2. Strip ratio expected to be in the range of 8:1 to 12:1.
Tongo Exploration Targets
The estimated tonnes of basal mineralized gravel are
approximately 1,200,000 tonnes (range some 900,000 t to 1,500,000
t) which could host between 120,000 to 300,000 carats of diamonds
and some 36 to 60 kg of alluvial gold. Please see table below for
further details:
Tongo North & Tongo South Provisional Inventory (Exploration
Targets)
Length Width Gravel 50% Remaining Possible Possible Possible Possible
(m) (m) thickness Target Carat Carat Gold Gold
(m) (tonnes) Inventory Inventory Inventory Inventory
at 10 at 25 (kg) (kg)
cpht cpht at 0.03 at 0.05
g/t g/t
-------- ------- -------- ----------- -------------- ----------- ----------- ----------- -----------
Tongo
North 4,000 200 0.5 400,000 40,000 100,000 12 20
-------- ------- -------- ----------- -------------- ----------- ----------- ----------- -----------
200x2
(east
Tongo & west
South 4,000 banks) 0.5 800,000 80,000 200,000 24 40
-------- ------- -------- ----------- -------------- ----------- ----------- ----------- -----------
Total
= 1,200,000 120,000 300,000 36 60
----------- -------------- ----------- ----------- ----------- -----------
Notes
1. The figures set out above are Exploration Targets and are
merely guidelines for potential mineralisation. These figures are
not to be regarded as any category of Resource under an AIM
acceptable Standard.
2. Strip ratio expected to be in the range of 8:1 to 12:1.
-- Rock Forage also conducted a site visit to the Company's
field operations in the Tongo, Baja and Moa licences between 9
February 2017 and 4 March 2017. The primary objective was to
investigate and review the best approaches to increase confidence
in the two exploration targets, Baja and Tongo, moving them towards
a resource status. On-site guidance was also provided for the
implementation of a small, cost- effective kimberlite exploration
programme over a high priority airborne magnetic target in the
Tongo licence area.
-- The site visit report submitted by Rock Forage (which
includes a glossary of technical terms) can be downloaded from the
Company's website at www.goldensaintresources.com and can also be
accessed through the link on this announcement
http://www.rns-pdf.londonstockexchange.com/rns/3207J_1-2017-6-27.pdf
-- Tongo Licence area - Alluvial Diamonds
-- At Tongo site 1, with the bulk sampling operations carried
out to 13 June 2017, the Company recovered 14 more diamonds
weighing a total of 10.46 carats. The stones ranged from 0.25 to
2.15 carats per stone. In addition, some 23.62 grams of alluvial
gold were also recovered from the gravels treated. The Company will
provide further updates as the gravel extraction and washing
operations progresses
-- Baja Licence area
-- At Baja site 4, operations were focused on relocating the
stockpile of gravels to a higher and more secure location. This
will reduce the risk of loss associated with the rising water table
resulting from the impending wet season. Bulk sampling operations
have resumed and are operating concurrently with the gravel
relocation exercise.
A copy of the Annual Report and Accounts has been posted to
Shareholders today together with a Notice of the Annual General
Meeting ("AGM") to be held at Gledden Building, Level 3, 731 Hay
Street, Perth, WA 6000 on 28 July 2016 at 11.00a.m. (WST) and
copies of both documents are available on the Company's website
www.goldensaintresources.com
Set out below are extracts of the Company's audited results for
the year ended 31 December 2016.
For further information please contact:
Golden Saint Resources +61 (8) 6145
Ltd Keng Hock Seah 4400
------------------------ --------------------- ----------------
Beaumont Cornish +44 (0) 20 7628
Limited Roland Cornish 3396
------------------------ --------------------- ----------------
SVS Securities +44 (0) 20 3700
Plc Tom Curran/Ben Tadd 0093
------------------------ --------------------- ----------------
Cassiopeia Services +44 (0) 79 4969
Ltd Stefania Barbaglio 0338
------------------------ --------------------- ----------------
Executive Chairman's Review
Overview
The Company's focus during the 2016 year has been on the further
development of its ongoing exploration and bulk sampling operations
particularly in Baja and Tongo. Working closely with the technical
consultants, Rock Forage Consulting Services ("Rock Forage'), the
Company was able to systematically develop its exploration targets
in the selected alluvial terrace deposits along the Sewa and Woa
River towards an inferred resource level of confidence. The
estimated provisional inventories of the diamond and gold deposits
in our Baja and Tongo licenced areas reported by Rock Forage, an
extract of which was presented in the preceding section are very
encouraging and going forward, we will consider the work necessary
to establish that inferred resource within the Baja and Tongo
licence areas. The early diamond and gold recoveries from both
these areas during the 2016 year were also positive indicators of
further diamond and gold mineralisation.
As the Company continued with the exploration work amidst a
difficult mining climate in Sierra Leone, we were also pleased to
report on 18 August 2016, the National Minerals Agency ("NMA")
approved the renewal of the Company's three exploration licences
(Baja, Tongo and Moa) for another three year term with a final
expiry of 12 December 2018 for Baja, 24 November 2018 for Tongo and
27 January 2019 for Moa.
Financial review
The Group's total comprehensive loss of USD 1.880 million for
the financial year ended 31 December 2016 was a reduction of USD
370,000 (16.4 %) compared to the previous financial year (2015: USD
2.25 million). Management will continue to review its operations
and reduce operating costs where possible. Operating expenses
comprise mainly exploration expenses and general administrative
costs of a corporate and management level. The Group's mining
operations during the year under review continue to be focussed on
bulk sampling and exploration activities.
As at 31 December 2016, the Group had USD 376,000 cash available
for continuing exploration and working capital purposes. However
subsequent to the year end and up to the date of this report, the
Group had managed to raise approximately USD 0.6 million in cash to
continue to support its bulk sampling and exploration
operations.
Board Changes
The Board has appointed Mr. Yohannes Adimas Prawiro to the role
of Executive Director, Business Development which will be effective
from 24 July 2017. Mr Prawiro has previously served as Project
Manager for GSR.
In addition, the Board is now proposing to appoint Mr Pierre
Fourie to the role of Chief Executive Officer. The appointment of
Mr Fourie is subject to satisfactory due diligence and regulatory
checks, which are currently in progress.
Mr. Pierre Fourie is a member of Rock Forage Consulting
Services, which is currently engaged as the Company's technical
consultants. Mr Pierre Fourie is a mining engineer with over 20
years' experience in the field of resource/reserve estimation,
mineral economics, mine construction and operations. Mr. Fourie has
a Bachelor of Accountancy Science and a B. Eng in mining with
practical mining experience in both underground and open pit
mining. He has significant experience of mining in Africa
Mr Keng Hock Seah has notified the Board of his intention to
resign as Finance Director of the Company and Director of all
subsidiary companies of GSR at the end of July 2017.
Change of Management in Sierra Leone
The Company appointed Mr Mohammed A.S. Deen ("Sallau Deen") as
Geologist Manager with effect from 1 August 2016. Sallau Deen has
been with the Company since September 2013 working as a senior
geologist and prior to joining the Company, Sallau Deen held a
number of in house geologist and consultancy positions, for both
private and public companies. Sallau Deen has taken over the
geological project responsibilities from Mr Ernest Gbappi who
resigned as the Company's Chief Resident Geologist for personal
reasons. Sallau Deen will work closely with the project manager in
the Perth office and our technical consultants, Rock Forage
Consulting Services. The Company would like to thank Mr Ernest
Gbappi for his contributions and wish him well in his future
endeavours.
Golden Saint is pleased to announce the appointment of Mr Hassan
Abass Kargbo as Exploration Manager. Reporting to the Board,
Hassan's key responsibilities include preparation of geological
strategies and planning policies, supervision and coordination of
all other geological work of the Company.
Corporate Update
SVS Securities was appointed as joint broker to the Company on
10 June 2016 and became the sole broker to the Company on 19
January 2017.
Outlook
We are grateful for the support of all shareholders who
participated in the capital raising exercises during the course of
the year. With the additional financial capacity and the dedicated
efforts by the staff, technical consultants, management and the
support of the National Minerals Agency, GSR was able to make
significant progress in taking its exploration and bulk sampling
operations to a higher level. We remain cautiously optimistic about
GSR being able to deliver meaningful long term returns to all our
stakeholders.
Audit opinion
The consolidated annual financial statements were audited by the
Company's auditors, Greenwich & Co Audit Pty Ltd. The auditors'
report contains an emphasis of matter with regard to the
continuation as a going concern as follows:
Emphasis of matter - Inherent uncertainty regarding continuation
as a going concern
Without modifying our opinion, we draw attention to the notes to
the financial report, which describes that the ability of the
company to continue as a going concern is dependent on the
company's ability to raise additional equity finance and generate
revenue from alluvial diamond and gold sales. As a result there is
material uncertainty related to events or conditions that may cast
significant doubt on the company's ability 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.
David McDonald
Executive Chairman
27 June 2017
Operations Update 2016
LOCATIONS
Golden Saint Resources Limited (GSR) has three main projects in
Sierra Leone; Tongo, Baja and Moa. All three projects, for which
GSR has renewed its exploration licences, are located in the Bo and
Kenema districts of the Southern and Eastern provinces of the
country. The Tongo and Baja licence areas are located within the
Tongo Diamond Field, which is considered highly prospective for
diamonds. Within the Baja project, there is a section of the Sewa
River, which is known to contain alluvial diamonds and gold and is
locally worked by artisanal miners. The Moa project is also
prospective for gold as well as diamonds as the licence area
extends into the foothills of the Kambui Hills, which is part of
the greenstone belt of Sierra Leone.
Tongo (Licence number EL86/2011) is located close to Lowoma
Village, which is approximately 56km east of Kenema Town in the
Lower Bambara Chiefdom of Kenema District and approximately 356km
east of Freetown. From Freetown to Kenema there is approximately
300km of well paved bitumen surfaced road with an unmade but graded
road between Kenema and the licence area.
Baja (Licence number EL87/2011) is located approximately 52km
northeast of Bo in the Kando Lekpeama and Simbaru Chiefdoms in the
Kenema District of the Eastern Province and in the Komboya, Badjia
and Baoma Chiefdoms in the Bo District of the Southern Province. It
is approximately 292km east of Freetown. From Freetown to Baoma is
approximately 273km of well paved bitumen surfaced road. The
distance from Baoma to the licence area is approximately 19km of
unmade but graded road.
Moa (Licence number EL07/2012) is situated approximately 46km
southwest of Kenema City in the Koya and Dama Chiefdoms in the
Kenema District of the Eastern Province of Sierra Leone. It is
approximately 316km east of Freetown. There is approximately 290km
of bitumen road between Freetown and Blama and approximately 26km
of unmade but graded lateritic road between Blama and the licence
area.
In addition to the above three projects, until late 2015 GSR,
through Golden Saint Diamonds (SL) Ltd (GSR's 75 per cent owned
subsidiary), actively sponsored a number of artisanal mining
operations in the Zimmi and Rowaka areas. The Zimmi project is
located in the Southern Province close to the border with the
Republic of Liberia. The Zimmi area has a history of diamond
occurrences along the rivers and streams. The GSR Zimmi project
area has produced a number of coloured diamonds to date although
this does not necessarily reflect on their value.
GENERAL GEOLOGY OF PROJECT AREA
The three projects lie within the stable Man craton of West
Africa, which covers two-thirds of Sierra Leone. The Man craton is
geologically subdivided into the Leonean and Liberian events, which
comprise tectonothermal events leading to the emplacement of
synkinematic granites, the greenstone belts and other late
kinematic events. The Tongo and Baja projects lie within the known
diamond fields of Sierra Leone (P. K. Hall, 1960); these cover most
of the Eastern Province and the eastern half of the Southern
Province. Diamonds occur in the primary host rock of kimberlite
pipes or dykes intruded along fissure shears, such as those of the
Koidu mine kimberlite deposit. The Koidu kimberlite dykes and pipes
have been dated to the Jurassic period.
Alluvial diamonds also occur in Sierra Leone as a result of the
weathering and erosion of diamondiferous kimberlites, though the
diamonds are usually smaller and in much lower concentration than
those found in the kimberlites. Alluvial diamonds have been mined
in both the Woa stream in the Tongo licence area and in the Sewa
River that passes through the Baja licence area.
Hall (1968) noted that alluvial diamond deposits are almost
invariably located on the river terraces (which he referred to as
the coastal plains) and in the active channels of the rivers and
stream; as per standard rules of deposition in alluvial
environments, bends in rivers are also important sedimentary traps
for alluvial diamonds.
The Moa project is located to the southern end of the Kambui
hills, which is part of the Archaean greenstone belt. The
greenstone belt is known to host gold deposits in Sierra Leone and
across the Man Shield. These gold deposits are largely associated
with ductile deformation and high strain zones adjacent to or
within crustal scale shear zones and also at the contacts between
the granite and the greenstones, such as found at the Baomahun
deposit in the Kangari Hills - Sula Mountains greenstone belt of
Sierra Leone.
Alluvial gold in Sierra Leone is found within the rivers and
streams across the country, particularly in the watershed around
the Kangari Hills - Sula Mountains and the Kambui Hills immediately
to the northwest of the Moa licence area.
EXPLORATION WORK DURING REPORTING PERIOD UNDER REVIEW
Exploration continued to progress well throughout the reporting
period.
The strategy of the ongoing exploration for both diamond and
gold has always been to:
1. Identify the regional shear structures beneath the
transported cover where potential diamondiferous kimberlites could
be located.
2. Identify hard rock gold deposits in Archean terrain and in
placer accumulations in alluvial deposits.
3. Identify target areas where artisanal workings are evident
with a view to identifying economic alluvial deposits that could be
worked in the near term thus generate a cash flow to support longer
term exploration for hard rock gold and diamond deposits.
To achieve the above, the work plan was organised to
include;
1. follow up on airborne magnetic survey targets through geological mapping;
2. recommendations by our technical consultants, Rock Forage Consulting Services ( Rock Forage);
3. loam sampling of kimberlite targets;
4. construction of access routes to enable us to carry out our work plan; and
5. bulk sampling.
FOLLOW UP ON AIRBORNE MAGNETIC SURVEY TARGETS THROUGH GEOLOGIC
MAPPING
Aeromagnetic survey was completed by Geotech Airborne Ltd in
November, 2013 over the three project areas of Tongo, Baja and
Moa.
Core Geophysics Pty (Core) was commissioned by GSR to quality
control, process image and generate a structural interpretation
from the three aeromagnetic surveys completed over the
projects.
The aeromagnetic surveys have greatly improved the geology and
structural understanding of the projects. Within the Tongo and Baja
projects, the processed data have identified strong ENE -WSW
structural trends beneath transported cover, consistent with the
regional structures hosting kimberlite dykes and known diamond
resources located within the neighbouring tenements. At Moa, the
data have identified a number of major structures and finer scale
fabrics which may control or host gold mineralisation.
At Tongo, a total of 37 dyke targets, 14 pipe targets and 5
alluvial targets were selected from the processed data of which 12
dykes, 3 pipes and 2 alluvial targets have been given a high
priority.
At Baja, 79 dyke targets, 4 pipe targets and 5 alluvial targets
were selected from the processed data of which 17 dykes and 2
alluvial targets have been given a high priority.
At Moa 6 broad target areas for gold mineralisation have been
defined, of which 2 are given a high priority along with 3 sites
for alluvial diamonds selected along the Moa River.
A team of GSR geologists and geo technicians have been engaged
in identifying and mapping of all geophysical targets. This mapping
is in an effort to identify the various geological stratigraphy,
structural controls and mineralisation of these target areas.
RECOMMATIONS BY OUR TECHNICAL CONSULTANTS, ROCK FORAGE
CONSULTING SERVICES
With the objective of advancing GSR's work in the field, in July
2015, Rock Forage Mining Consultancy (A South Africa based
consultancy) was appointed to work with the local team by
integrating data previously generated by GSR from its soil sampling
analysis and data from neighbouring licences in order to provide an
ongoing work programme for its exploration operations.
Based on observations made by the Rock Forage Mining Consultancy
during their site visits, the following recommendations were
made;
-- Bulk sampling campaign to be continued along the terraces of
the Woa and Sewa Rivers at 500m intervals, preferably at
aeromagnetic target points to quantify the amount of diamond and
gold found per unit tonne.
-- Loam sampling to be done in target areas in Tongo as a follow
up to identifying kimberlitic dykes.
-- Hand auguring be done along the terraces of the Woa and Sewa
Rivers at 250m and 500m intervals, to quantify the amount of
alluvial gravel per unit area.
-- Further modification be done on the dove plant (reduction of
the screen size) to increase the efficiency of the machine.
LOAM SAMPLING OF KIMBERLITE TARGETS
A loam sampling campaign was initiated within this reporting
period. Targets of aeromagnetic survey are being loam sampled. The
sampling is done through the establishment of a sample pit that
measure 1m (length) by 1m (breadth) by 0.5m (depth). About 100kg of
loam soil is collected from each pit for sampling. The sampling is
being done at 25m interval from a referenced sample point. Loam
samples have now been collected at 25 sample points (TD1 and its
surrounding points) and are now awaiting sieving and further
processing.
CONSTRUCTION OF ACCESS ROUTES TO ENABLE US CARRY OUT OUR WORK
PLAN
GSR in this period embarked on creating access routes within the
Baja Concession to enable us to carry out our different work plans
and also to convey our equipment to the different sites of
operation.
The building of theses access routes also contributed to the
development of the community in the Baja Chiefdom.
About 15.1km access routes have been created in the Baja
Concession Baja to Nomiama (4.65km), Nomiama to Baja Site 2
(4.54km), Baja Site 2 to Baja Site 3 (1.63km) and Baja Site 3 to
Baja Site 4 (4.28km).
BULK SAMPLING OF ALLUVIAL GRAVELS
Bulk sampling of alluvial gravels continued in the Tongo and
Baja licence areas during the reporting period. This programme was
carried out in order to identify valuable alluvial resource with an
economic grade for small scale mining as a faster means of income
generation for the company.
The National Mineral Agency of Sierra Leone authorised the
company to carry out the exercise as part of their exploration
programme.
At Baja Site 2 casual labour was used to manually extract and
stockpile the basal gravels, which was around 600 tonnes. The
stockpile of gravels was processed using the local washer at Baja
site2 and about 45% (270 tonnes) of the stockpile has already been
washed. The processing rate of washing is about 1.2 tonnes per
hour. Baja site 2 still holds a stockpile of gravel of about 330
tonnes, which will be processed once the local washer is relocated
back from Baja site 4.
At Baja Site 4, gravels were extracted and put on stockpiles
using D9 bulldozer and a 320 Cat excavator. About 1,900 tonnes of
basal gravel is expected to be excavated, with an additional 7,300
tonnes of upper gravel. Washing of gravel at Baja Site 4 started on
26(th) February with the local washing plant, and by 30 March 2017,
about 156 tonnes of gravel has been washed
At Tongo Site 1, gravels were extracted and put on stockpiles
using D8 bulldozer and a 320 Cat excavator. About 950 tonnes of
basal gravel is expected to be excavated at Tongo Site 1. Washing
of gravel at Tongo Site 1 started on 14(th) February with the dove
explorer, and by 30 March 2017, about 138 tonnes of gravels has
been washed.
COMPETENT PERSON STATEMENT
The information in this release that relates to the general
geology of the area is based upon information compiled by Dr John
D. Ward (Pr. Sci. Nat; PhD) who is an Independent Consultant
employed by Rock Forage Mining Limited and is a Fellow of The
Geological Society of South Africa. Dr Ward has sufficient
experience relevant to the style of mineralisation and type of
deposit under consideration and the activity in which he is
undertaking to qualify as a Competent Person under the 2012 Edition
of the Australasian Code for Reporting Exploration Results, Mineral
Resources and Ore Reserves (JORC Code). Dr Ward consents to the
inclusion in a release of the matters based on his information in
the form and context in which it appears.
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
For the year 1 January 2016 to 31 December 2016
1 January 1 January
2016 to 31 2015 to 31
December December
2016 2015
Notes US $'000 US $'000
Net operating income
Sales 16 26
Foreign exchange gain/(loss) (10) 116
Other income - 110
------------ ------------
6 252
Net operating expenses
Continuing operations 2 (1,839) (2,315)
Operating loss (1,839) (2,315)
Net loss for the period (1,833) (2,063)
------------ ------------
Other comprehensive income
Foreign currency (loss)/gain (47) (187)
------------ ------------
(47) (187)
Total comprehensive loss for the
period (1,880) (2,250)
------------ ------------
Net loss for the period attributable
to:
Equity holders of the parent (1,620) (1,891)
Non-controlling interest (213) (172)
------------ ------------
(1,833) (2,063)
------------ ------------
Total comprehensive loss for the
period attributable to:
Equity holders for the parent (1,667) (2,078)
Non-controlling Interest 16 (213) (172)
------------ ------------
(1,880) (2,250)
------------ ------------
Basic loss per share-cents 5 0.04 0.16
Diluted loss per share-cents 5 0.04 0.13
Consolidated Statement of Financial Position
As at 31 December 2016
31 December 31 December
2016 2015
Notes US $'000 US $'000
ASSETS
Current assets
Cash and cash equivalents 7 376 13
Trade and other receivables 8 40 50
Inventories 9 306 331
------------ ------------
Total current assets 722 394
Non-current assets
Property plant and equipment 10 1,077 1,177
Exploration and evaluation assets 11 132 132
Intangible assets 12 6 6
------------ ------------
Total non-current assets 1,215 1,315
------------ ------------
TOTAL ASSETS 1,937 1,709
------------ ------------
EQUITY
Share capital 15 55,077 52,860
Reserves 15 (42,794) (42,747)
Retained earnings (10,592) (8,759)
------------ ------------
Total equity 1,691 1,354
Equity attributable to owners of
the parent 2,525 1,975
Non-controlling equity interest 16 (834) (621)
------------ ------------
TOTAL EQUITY 1,691 1,354
------------ ------------
LIABILITIES
Current liabilities
Trade and other payables 17 234 342
Financial liabilities 18 12 13
------------ ------------
Total Current Liabilities 246 355
------------
TOTAL LIABILITIES 246 355
------------
TOTAL EQUITY AND LIABILITIES 1,937 1,709
------------ ------------
Consolidated Statement of Cash Flow
For the year 1 January 2016 to 31 December 2016
1 January 1 January
2016 to 31 2015 to 31
December December
2016 2015
Notes US $'000 US $'000
Cash Flows from operating activities
Loss before taxation from operations (1,833) (2,064)
------------ ------------
Adjustments to add non-cash items:
Depreciation of property, plant
and equipment 139 99
Unrealised foreign exchange loss (47) (187)
(1,741) (2,152)
Operating loss before working capital
changes
Decrease in inventories 25 22
Decrease in prepayments and other
receivables 10 299
Decrease in financial liabilities (1) -
(Decrease)/Increase in financial
liabilities (108) 207
------------ ------------
Net cash flow used in operating
activities (1,815) (1,624)
Cash flows from investing activities
Payments to acquire property, plant
and equipment (39) (991)
Net cash flow used in investing
activities (39) (991)
Cash flows from financing activities
Proceeds of ordinary share issue 2,322 2,780
Payments for capital raising (105) -
Proceeds from convertible notes - (1,008)
Net cash provided by financing activities 2,217 1,772
------------ ------------
Net increase/(decrease) in cash
and cash equivalents 363 (843)
Cash and cash equivalents at beginning
of period 13 856
------------ ------------
Cash and cash equivalents at end
of period 376 13
------------ ------------
Consolidated Statement of Changes in Equity
For the period 1 January 2016 to 31 December 2016
Attributable to equity holders
of the parent
Merger Total
Reserve Attributable
Foreign to Owners
Share Currency Retained Total of the Non-Controlling
Capital Reserve Earnings Equity Parent Interest Total
US $'000 US $'000 US $'000 US $'000 US $'000 US $'000 US $'000
--------- ---------- --------- ---------- -------- --------------- ---------------- ---------
Opening Balance
as at 1
January
2016 52,860 (100) (42,647) (8,759) 1,354 1,975 (621) 1,354
--------- ---------- --------- ---------- -------- --------------- ---------------- ---------
Comprehensive
income
Loss of the
period - - - (1,833) (1,833) (1,620) (213) (1,833)
Foreign
exchange
gain on
translation - (47) - - (47) (47) - (47)
--------- ---------- --------- ---------- -------- --------------- ---------------- ---------
Total
comprehensive
income for the
period - (47) - (1,833) (1,880) (1,667) (213) (1,880)
Transactions
with
owners, in
their
capacity as
owners
Shares issued
during the
period 2,322 - - - 2,322 2,322 - 2,322
Cost of capital (105) - - - (105) (105) - (105)
--------- ---------- --------- ---------- -------- --------------- ---------------- ---------
Total
transactions
with owners 2,217 - - - 2,217 2,217 - 2,217
Balance at 31
December 2016 55,077 (147) (42,647) (10,592) 1,691 2,525 (834) 1,691
--------- ---------- --------- ---------- -------- --------------- ---------------- ---------
Consolidated Statement of Changes in Equity
For the period 1 January 2015 to 31 December 2015
Attributable to equity holders
of the parent
Merger Total
Reserve Attributable
Foreign to Owners
Share Currency Retained Total of the Non-Controlling
Capital Reserve Earnings Equity Parent Interest Total
US $'000 US $'000 US $'000 US $'000 US $'000 US $'000 US $'000
--------- ---------- --------- ---------- -------- --------------- ---------------- ---------
Opening Balance
as at 1
January
2015 50,080 87 (42,647) (6,696) 824 1,273 (449) 824
--------- ---------- --------- ---------- -------- --------------- ---------------- ---------
Comprehensive
income
Loss of the
period - - - (2,063) (2,063) (1,891) (172) (2,063)
Foreign
exchange
gain on
translation - (187) - - (187) (187) - (187)
--------- ---------- --------- ---------- -------- --------------- ---------------- ---------
Total
comprehensive
income for the
period - (187) - (2,063) (2,250) (2,078) (172) (2,250)
Transactions
with
owners, in
their
capacity as
owners
Shares issued
during the
period 2,780 - - - 2,780 2,780 - 2,780
Cost of capital - - - - - - - -
--------- ---------- --------- ---------- -------- --------------- ---------------- ---------
Total
transactions
with owners 2,780 - - - 2,780 2,780 - 2,780
Balance at 31
December 2015 52,860 (100) (42,647) (8,759) 1,354 1,975 (621) 1,354
--------- ---------- --------- ---------- -------- --------------- ---------------- ---------
Notes to the Financial Statements
Accounting Policies
1.1 Corporate information
The consolidated financial statements of Golden Saint Resources
Ltd for the financial year ended 31 December 2016 were authorised
for issue in accordance with a resolution of the Directors on 27
June 2017.
The registered office of Golden Saint Resources Ltd, the
ultimate parent of the Group, is 171 Main Street, Road Town Tortola
VG 1110 British Virgin Islands.
The principal activity of the Group is early stage diamond and
gold exploration with three Exploration Licenses in Sierra
Leone.
1.2 Basis of preparation
The consolidated financial statements of Golden Saint Resources
Limited and its controlled entities ("the Group") have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB) and adopted by the European Union (EU) as
they apply to the financial statements of the Group for the period
1 January 2016 to 31 December 2016.
The consolidated financial statements have been prepared on a
historical cost convention basis, except for certain financial
instruments that have been measured at fair value. The consolidated
financial statements are presented in US dollars and all values are
rounded to the nearest thousand except when otherwise
indicated.
1.3 Basis of consolidation
The consolidated financial statements comprise the financial
statements of the Group as at 31 December 2016, and for the period
then ended.
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Group obtains control, and
continue to be consolidated until the date when such control
ceases.
The financial statements of the subsidiaries are prepared for
the same reporting period as the parent company, using consistent
accounting.
All intra-group balances, transactions, unrealised gains and
losses resulting from intra-group transactions and dividends are
eliminated in full.
Total comprehensive income within a subsidiary is attributed to
the non-controlling interest even if it results in a deficit
balance. A change ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction.
Pooling of Interests on Incorporation of Parent Entity
On incorporation of the entity, subsidiaries have been
consolidated using the pooling of interests method on the basis
that the entities being combined are ultimately controlled by the
same parties, both before and after the combination.
Under this method the assets and liabilities of the acquiree are
recorded at book value and intangible assets and contingent
liabilities are only recognised if they were previously recognised
by the acquiree. No goodwill is recorded and expenses of the
combination are written off immediately in profit or loss.
The excess of consideration over the value of the acquiree's net
assets is recognised in the merger reserve, a negative reserve
within equity.
Any non-controlling interest in the acquiree is recognised as
the proportion of the assets and liabilities of the acquiree at the
date of acquisition. From the date of acquisition forward, a
proportionate share of profits, or losses, in the related
subsidiary is then attributed to the non-controlling interest.
Subsequent Business Combinations
Business combinations occur where an acquirer obtains control
over one or more businesses. A business combination is accounted
for by applying the acquisition method, unless it is a combination
involving entities or businesses under common control. The business
combination will be accounted for from the date that control is
attained, whereby the fair value of the identifiable assets
acquired and liabilities (including contingent liabilities) assumed
is recognised (subject to certain limited exceptions).
When measuring the consideration transferred in the business
combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not
re-measured and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset or
liability is re-measured in each reporting period to fair value,
recognising any change to fair value in profit or loss, unless the
change in value can be identified as existing at acquisition
date.
All transaction costs incurred in relation to business
combinations are expensed to the statement of comprehensive income.
The acquisition of a business may result in the recognition of
goodwill or a gain from a bargain purchase.
1.4 Significant accounting judgements, estimates and assumptions
The preparation of the Group's consolidated financial statements
requires management to make judgements, estimates and assumptions
that affect the reported amounts of assets and liabilities and the
disclosure of contingent liabilities at the date of the
consolidated financial statements, and the reported amounts of
revenues and expenses during the reporting period. Estimates and
assumptions are continuously evaluated and are based on
management's experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. However, actual outcomes would differ from these
estimates if different assumptions were used and different
conditions existed.
In particular, the Group has identified the following areas
where significant judgements, estimates and assumptions are
required, and where actual results were to differ, may materially
affect the financial position or financial results reported in
future periods. Further information on these and how they impact
the various accounting policies is located in the relevant notes to
the consolidated financial statements.
1.4.1 Key Judgements
In the process of applying the Group's accounting policies,
management has made the following judgements, which have the most
significant effect on the amounts recognised in the consolidated
financial statements.
Going concern
This report has been prepared on the going concern basis, which
contemplates the continuation of normal business activity and the
realisation of assets and the settlement of liabilities in the
normal course of business.
At 31 December 2016, the Group held cash reserves of
$376,000.
The Directors are confident the Group will generate revenue from
alluvial diamond and gold sales in into 2017 which will contribute
to cash flow. In addition the Company intends to raise additional
equity finance during the course of the year to contribute towards
its working capital requirements.
On this basis, the Directors believe that there are sufficient
funds to meet the Group's working capital requirements.
The Group recorded a loss of $1,833,000 for the year ended 31
December 2016 and had net assets of $1,691,000 as at 31 December
2016 (Dec 2015: loss of $2,063,000 and net assets of
$1,354,000).
Should the Group be unable to obtain sufficient funding as
advised above, there is a material uncertainty which may cast doubt
as to whether or not the Group will be able to continue as a going
concern and whether it will realise its assets and extinguish its
liabilities in the normal course of business and at the amounts
stated in the financial statements.
The financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts
nor to the amounts and classification of liabilities that might be
necessary should the Group not continue as a going concern.
Accruals
Management have used judgement and prudence when estimating
certain accruals for contractor claims. The accruals recognised are
based on work performed but are before settlement.
Contingencies
By their nature, contingencies will only be resolved when one or
more uncertain future events occur or fail to occur. The assessment
of the existence, and potential quantum, of contingencies
inherently involves the exercise of significant judgement and the
use of estimates regarding the outcome of future events. Please
refer to Note 19 for further details.
Impairment of assets
The Group assesses each asset or cash generating unit (CGU)
every reporting period to determine whether any indication of
impairment exists. Where an indicator of impairment exists, a
formal estimate of the recoverable amount is made, which is
considered to be the higher of the fair value less costs to sell,
or the value in use.
These assessments require the use of estimates and assumptions
such as long-term commodity prices (considering current and
historical prices, price trends and related factors), discount
rates, operating costs, future capital requirements, closure and
rehabilitation costs, exploration potential, reserves and operating
performance (which includes production and sales volumes). These
estimates and assumptions are subject to risk and uncertainty.
Therefore, there is a possibility that changes in circumstances
will impact these projections, which may impact the recoverable
amount of assets and/or CGUs. Please refer to Note 10 for further
details.
Goodwill and intangible assets that have an indefinite useful
life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in
circumstances indicate that they might be impaired. Other assets
are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use.
1.4.2 Key estimates and assumptions
The key assumptions concerning the future and other key sources
of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are described below. The Group based its assumptions and estimates
on parameters available when the consolidated financial statements
were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or
circumstances arising beyond the control of the Group. Such changes
are reflected in the assumptions when they occur.
Exploration and evaluation expenditure
The application of the Group's accounting policy for exploration
and evaluation expenditure requires judgement in determining
whether future economic benefits will arise either from future
exploitation or sale or where activities have not reached a stage
which permits a reasonable assessment of the existence of reserves.
The determination of a Joint Ore Reserves Committee (JORC) resource
is itself an estimation process that requires varying degrees of
estimation depending on sub-classification and these estimates
directly impact the point of deferral of exploration and evaluation
expenditure. The deferral policy requires management to make
certain estimates and assumptions about future events or
circumstances, in particular whether an economically viable
extraction operation can be established. Estimates and assumptions
made may change if new information becomes available. If, after
expenditure is capitalised, information becomes available
suggesting that the recovery of expenditure is unlikely, the amount
capitalised is written off in the consolidated statement of
comprehensive income in the period when the new information becomes
available. Exploration and evaluation assets are carried at
historical cost less any impairment losses recognised. (Please
refer to Note 11 for further details).
1.5 New standards and amendments and interpretations adopted by the Group
There are a number of new Accounting standards and
interpretations issued by the AASB that are not yet mandatorily
applicable to the Group and have not been applied in preparing
these consolidated financial statements. The Group does not plan to
adopt these standards early.
These standards are not expected to have a material impact on
the Group in the current or future reporting periods.
1.6 Summary of significant accounting policies
Exploration and evaluation assets
It is the Group's policy to capitalise the cost of acquiring
rights to explore areas of interest. All other exploration and
evaluation expenditure is expensed to the statement of profit or
loss and other comprehensive income.
The costs of acquisition are carried forward as an asset
provided the rights to the areas of interest are current and one of
the following conditions are met:
-- Such costs are expected to be recouped through the successful
development and exploitation of the area of interest, or
alternatively, by its sale; or
-- Exploration activities in the area of interest have not yet
reached a stage which permits a reasonable assessment of the
existence of otherwise of recoverable reserves, and active and
significant operations in relation to the area are continuing.
When the technical feasibility and commercial viability of
extracting a mineral resource have been demonstrated then any
capitalised exploration and evaluation expenditure is reclassified
as capitalised mine development. Prior to reclassification,
capitalised exploration and evaluation expenditure is assessed for
impairment.
Impairment
An impairment exists when the carrying amount of an asset or
cash-generating unit exceeds its estimated recoverable amount. Any
impairment losses are recognised in the statement of profit or loss
and other comprehensive income.
The carrying value of capitalised exploration and evaluation
expenditure is assessed for impairment at the cash generating unit
level whenever facts and circumstances (from an impairment review)
suggest that the carrying amount of the asset may exceed its
recoverable amount.
Impairment reviews for exploration and evaluation costs are
carried out on a project-by-project basis, as each project has the
potential to be an economically viable cash generating unit. An
impairment review is undertaken when indicators of impairment arise
but normally when one of the following conditions applies:
-- unexpected geological occurrences render a deposit uneconomic
-- title to an asset is compromised
-- variations in commodity prices render the project uneconomic
-- variations in the currency of operation
-- variations to the fiscal and tax legislation in the country of operation.
Property, plant and equipment
Plant and equipment are shown at cost less accumulated
depreciation and impairment losses. The initial cost of an asset
comprises its purchase price or construction cost, any costs
directly attributable to bringing the asset into operation, any
incidental cost of purchase, and associated borrowing costs. The
purchase price or construction cost is the aggregate amount paid
and the fair value of any other consideration given to acquire the
asset. Directly attributable costs include employee benefits,
professional fees and costs of testing whether the asset is
functioning properly. Capitalised borrowing costs include those
that are directly attributable to the construction of mining and
infrastructure assets.
Property, plant and equipment relate to plant, machinery,
fixtures and fittings and are shown at historical cost less
accumulated depreciation and impairment losses.
The depreciation rates applied to each type of asset are as
follows:
Plant and machinery 10%
Motor Vehicles 15%
Fixtures and fittings 10-20%
Lease Improvements 5 years
Subsequent expenditure is capitalised when it is probable that
future economic benefits from the use of the asset will be
increased. All other subsequent expenditure is recognised as an
expense in the period in which it is incurred. Assets that are
replaced and have no future economic benefit are derecognised and
expensed through profit or loss. Repairs and maintenance which
neither materially add to the value of assets nor appreciably
prolong their useful lives are charged against income. Gains/
losses on the disposal of fixed assets are credited/charged to
income. The gain or loss is the difference between the net disposal
proceeds and the carrying amount of the asset.
The asset's residual values, useful lives and methods of
depreciation are reviewed at each reporting period, and adjusted
prospectively if appropriate.
Inventories
Inventories are valued at the lower of cost and net realisable
value.
Financial instruments: initial recognition and measurement
Trade and other receivables
Trade and other receivables are stated at amortised cost less
provision for doubtful debts. Trade and other receivables are
non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market.
Trade receivables are generally due for settlement between 30
and 90 days. They are presented as current assets unless collection
is not expected for more than 12 months after reporting date.
Collectability of trade receivables is reviewed on an ongoing
basis. Debts which are known to be uncollectible are written off by
reducing the carrying amount directly. A provision for impairment
of trade receivables is used when there is objective evidence that
the Group will not be able to collect all amounts due according to
the original terms of the receivables.
Cash and cash equivalents
Cash and cash equivalents are measured at fair value, based on
the relevant exchange rates at balance sheet date. Cash and cash
equivalents comprise cash, cash at hand and short-term deposit
amounts with original maturity of less than three months. For the
purpose of the consolidated statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents as defined above,
net of outstanding bank overdrafts.
Impairment
The Group assesses at each reporting date whether there is any
objective evidence that a financial asset is impaired. A financial
asset is deemed to be impaired if there is objective evidence of
impairment as a result of one or more events that has occurred
after the initial recognition of the asset (a loss event) and that
loss event has an impact on the estimated future cash flows of the
financial asset that can be reliably estimated.
Trade and other payables
Trade and other payables are non-derivative financial
liabilities that are not quoted in an active market. It represents
liabilities for goods and services provided to the Group prior to
the year end and which are unpaid. These amounts are unsecured and
have 7-30 day payment terms. Trade and other payables are presented
as current liabilities unless payment is not during within 12
months from the reporting date. They are recognised initially at
their fair value and subsequently measured at amortised cost using
the effective interest method.
Interest-bearing loans and borrowings
Interest-bearing loans and borrowings are recognised initially
at fair value, net of transaction costs incurred. Borrowings are
subsequently carried at amortised cost using the effective interest
(EIR) method. The fair value implies the rate of return on the debt
component of the facility. This rate of return reflects the
significant risks attaching to the facility from the lenders'
perspective.
Amortised cost is calculated by taking into account any discount
or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortisation is included in finance income
in profit or loss.
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or
sale are capitalised as part of the cost of the respective assets.
All other borrowing costs are expensed in the period they occur.
Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds e.g. arrangement
fees.
The Group capitalises borrowing costs for all eligible assets.
Where funds are borrowed specifically to finance the project, the
amount capitalised represents the actual borrowing costs incurred.
Early repayment of borrowings, specifically for reasons of
refinancing do not qualify for capitalising as borrowing costs
under IAS 23 and are recognised as a loss on de-recognition in the
statement of comprehensive income.
Fair value of financial instruments
The following methods and assumptions are used to estimate the
fair values:
-- Cash and short-term deposits, trade and other receivables,
trade and other payables and other current liabilities approximate
their carrying amounts largely due to the short-term maturities of
these instruments.
-- Initial fair value of interest-bearing borrowings is normally
the transaction price, i.e. the fair value of the consideration
received. When part of the consideration is for something other
than the loan, the fair value is estimated using an appropriate
valuation technique.
-- For disclosure purpose only, the fair value of unquoted
instruments, such as loans and other financial liabilities, is
estimated by discounting future cash flows using rates currently
available for debt on similar terms, credit risk and remaining
maturities.
Provisions
Provisions are measured at the present value of management's
best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount rate
used to determine the present value is a pre-tax amount that
reflects current market assessments of the time value of money, and
the risks specific to the liability. The increase in the provision
due to the passage of time is recognised as interest expense.
Finance income
Interest income is made up of interest received on cash and cash
equivalents.
Deferred taxation
Deferred income tax is provided using the balance sheet method
on temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable
temporary differences.
Deferred income tax assets are recognised for all deductible
temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused
tax losses, can be utilised, except:
-- In respect of deductible temporary differences associated
with investments in subsidiaries, deferred income tax assets are
recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary
differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at
the end of each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income tax asset to
be utilised. Unrecognised deferred income tax assets are reassessed
at the end of each reporting period and are recognised to the
extent that it has become probable that future taxable profit will
be available to allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted by the end of
the reporting period.
Deferred income tax assets and deferred income tax liabilities
are offset if a legally enforceable right exists to set off current
tax assets against current income tax liabilities and the deferred
income taxes relate to the same taxable entity and the same
taxation authority.
Foreign currencies
i) Functional and presentation currency
The consolidated financial statements are presented in US
dollars, which is the Group's presentation currency.
ii) Transaction and Balances
Transactions in foreign currencies are initially recorded in the
functional currency at the respective functional currency rates
prevailing at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at
the spot rate of exchange ruling at the reporting date. All
differences are taken to the profit or loss, should specific
criteria be met.
Non-monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rate as at
the date of the initial transaction. Non-monetary items measured at
fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
iii) Group Companies
The results and financial position of foreign operations (none
of which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are
translated into the presentation currency as follows:
-- Assets and liabilities for each statement of financial
position presented as translated at the closing rate at the date of
the statement of financial position.
-- Income and expenses for each income statement and statement
of profit or loss and other comprehensive income are translated at
average exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transactions dates, in which case income and expenses are
translated at the dates of the transactions), and
-- All resulting exchange differences are recognised in other comprehensive income
Revenue Recognition
Revenue is measured at the fair value of the consideration
received or receivable.
The Group recognises when the amount of revenue can be reliably
measured, it is probably that future economic benefits will flow to
the entity and specific criteria have been met as described
below.
i) Interest Income
Interest income is recognised using the effective interest
method. When a receivable is impaired, the Group reduces the
carrying amount to its recoverable amount, being the estimated
future cash flow discounted at the original effective interest rate
of the instrument, and continues unwinding the discount as interest
income.
ii) Sale of Goods
Revenue from sale of goods is recognised at the point of
delivery as this corresponds to the transfer of significant risks
and rewards of ownership of the goods and the cessation of all
involvement in those goods.
2. Net Operating Expenses
1 January 1 January
2016 to 31 2015 to 31
December December
2016 2015
US $'000 US $'000
From continuing operations
Depreciation of property plant
and equipment 139 99
Amortisation expenses - 97
Cost of Goods Sold 13 22
Occupancy costs 116 154
Employee costs 4 566 809
General expenses 150 220
Advertising and promotion
expenses 43 37
Exploration expenses 492 416
Administration expenses 307 418
Lease expenses 2 6
Travel expenses 11 37
------------ ------------
Total net operating expenses 1,839 2,315
------------ ------------
Net operating expenses
Include:
Auditors remuneration:
Audit of the annual financial
statements 13 19
Other non-audit services - -
------------ ------------
13 19
3. Key Management Personnel
1 January 1 January
2016 to 31 2015 to 31
December December
2016 2015
US $'000 US $'000
Directors' emoluments 283 402
Superannuation 21 23
------------ ------------
304 425
------------ ------------
-- Key Management personnel comprise the Directors.
4. Employee Costs
1 January 1 January
2016 to 31 2015 to 31
December December
2016 2015
US $'000 US $'000
Wages and salaries 525 645
Superannuation 41 41
Other employee costs - 123
------------ ------------
Total 566 809
------------ ------------
5. Earnings per share
1 January
2016 to 1 January 2015
31 December to 31 December
2016 2015
US $'000 US $'000
Loss for the period attributable to
members of the parent 1,620 1,891
Basic loss per share is calculated by dividing the loss attributable
to owners of the parent by the weighted average number of ordinary
shares on issue during the period.
Basic weighted average number of common
shares in issue 3,909,701,681 1,169,492,134
Basic Loss per share-cents 0.04 0.16
Warrants outstanding 275,351,720 275,351,720
Diluted loss per share 0.04 0.13
6. Segment Information
The consolidated entity's operating segments have been
determined with reference to the monthly management accounts used
by the chief operating decision maker to make decisions regarding
the consolidated entity's operations and allocation of working
capital.
Due to the size and nature of the consolidated entity, the Board
as a whole has been determined as the chief operating decision
maker.
The consolidated entity operates in one business segment and one
geographical segment, namely mineral exploration industry in Sierra
Leone.
The revenues and results of this segment are those of the
consolidated entity as a whole and are set out in the statement of
profit and loss and other comprehensive income. The segment assets
and liabilities of this segment are those of the consolidated
entity and are set out in the Statement of Financial Position.
7. Cash and Cash Equivalents
31 December 31 December
2016 2015
US $'000 US $'000
Current accounts 376 13
------------ ------------
376 13
------------ ------------
There are no restrictions on the cash currently held by the
Group.
8. Trade and Other Receivables
31 December 31 December
2016 2015
US $'000 US $'000
Trade receivables - -
Prepayments 40 50
Other receivables - -
------------ ------------
Total receivables 40 50
------------ ------------
Prepayments relate to payments made in advance for services from
the AIM Nomad and Broker as well as a legal retainer for GSR
Africa.
9. Inventories
31 December 31 December
2016 2015
US $'000 US $'000
Opening stock 331 353
Polishing costs during the year - -
Cost of diamond sales (25) (22)
Finished goods 306 331
------------ ------------
Inventories consist of 158.08 carats of cut, gem quality
diamonds.
GSR also has an additional 125.37 carats of rough diamonds which
have been shipped from Sierra Leone and arrangements are currently
being made to send them to Mumbai for cutting and polishing and
subsequently for sale in the GSR Diamond Club. After cutting and
polishing the diamonds will be individually and objectively
appraised for market value (reflected in its sale price) and then
recorded at the lower of cost or market value.
10. Property, Plant and Equipment
Plant and Furniture
Machinery and Fixtures Lease Improvements Motor Vehicles Total
US $'000 US $'000 US $'000 US $'000 US $'000
Period 1 January 2016
to 31 December 2016
Opening net book value 1,107 31 6 33 1,177
Additions 8 7 - 24 39
Disposals - (1) - - (1)
Depreciation charge (121) (6) (2) (9) (138)
Closing Net Book Value 994 31 4 48 1,077
----------- -------------- ------------------- --------------- ---------
At 31 December 2016
Cost 1,219 56 8 75 1,358
Accumulated depreciation (225) (25) (4) (27) (281)
----------- -------------- ------------------- --------------- ---------
Net book value 994 31 4 48 1,077
----------- -------------- ------------------- --------------- ---------
Plant and Furniture
Machinery and Fixtures Lease Improvements Motor Vehicles Total
US $'000 US $'000 US $'000 US $'000 US $'000
Period 1 January 2015
to 31 December 2015
Opening net book value 199 39 7 40 285
Additions 989 1 - 1 991
Disposals - - - - -
Depreciation charge (81) (9) (1) (8) (99)
Foreign currency translation
differences - - - - -
----------- -------------- ------------------- --------------- ---------
Closing Net Book Value 1,107 31 6 33 1,177
----------- -------------- ------------------- --------------- ---------
At 31 December 2015
Cost 1,211 50 8 51 1,320
Accumulated depreciation (104) (19) (2) (18) (143)
----------- -------------- ------------------- --------------- ---------
Net book value 1,107 31 6 33 1,177
----------- -------------- ------------------- --------------- ---------
11. Exploration and Evaluation Assets
Mineral Exploration Total
Licenses
US $'000 US $'000
Cost
At 1 January 2016 132 132
Additions - -
-------------------- ----------
As at 31 December 2016 132 132
Provision for Amortisation
and Impairment
At 1 January 2016 - -
Amortisation charge for the
period - -
-------------------- ----------
As at 31 December 2016 - -
Net book value
-------------------- ----------
At 31 December 2016 132 132
-------------------- ----------
The board of directors regularly assesses the potential of each
mineral licence. There was no impairment during the 2016 Financial
Year.
Mineral Exploration Total
Licenses
US $'000 US $'000
Cost
At 1 January 2015 132 98
Additions - 34
-------------------- ----------
As at 31 December 2015 132 132
Provision for Amortisation
and Impairment
At 1 January 2015 - -
Amortisation charge for the
period - -
-------------------- ----------
As at 31 December 2015 - -
Net book value
-------------------- ----------
At 31 December 2015 132 132
-------------------- ----------
The board of directors regularly assesses the potential of each
mineral licence. There was no impairment during the 2015 Financial
Year.
12. Intangible Assets
Trade Mark Total
US $'000 US $'000
Opening net book value at 1 January
2016 6 6
Additions - -
Amortisation charge - -
----------- ----------
Closing net book value at 31
December 2016 6 6
----------- ----------
There was no impairment recorded during the 2016 Financial
Year.
13. Subsidiaries
Details of the Company's subsidiaries at 31 December 2016 are as
follows:
Name of Subsidiary Place of Incorporation Proportion of Proportion of
Ownership Interest Voting Power
Golden Saint
Resources (Australia)
Pty Ltd Australia 100 100
Golden Saint
Resources (Africa)
Ltd Sierra Leone 75 75
Golden Saint
Diamonds (Singapore)
Pte Ltd Singapore 100 100
Golden Saint
Diamonds (SL)
Limited Sierra Leone 75 75
14. Taxation
Unrecognised tax losses
Where the realisation of deferred tax assets is dependent on
future taxable profits, losses carried forward are recognised only
to the extent that business forecasts predict that such profits
will be available to the companies in which losses arose.
The parent, GSR, is not liable to corporation tax in BVI, so it
has no provision for deferred tax. However, GSR (Australia) Pty Ltd
is liable to tax in Australia and GSR (Africa) is liable to tax in
Sierra Leone, so potential deferred tax in respect of those
companies is noted as follows:
As at 31 December 2016, GSR (Australia) Pty Ltd had losses of
USD 2,714,382 (2015: USD 2,167,925), while GSR Africa had losses of
USD 3,329,931 (2015: USD 2,457,261) upon which deferred tax assets
are not recognised. These losses are available indefinitely for
offset against future taxable profits.
15. Share Capital and Reserves
The share capital of the Company is denominated in Pounds
Sterling. Each allotment during the period was then translated into
the Group's functional currency, US Dollars at the spot rate on the
date of issue.
Number of
Shares US $
At 31 December 2014 480,296,398 50,079,616
Shares issued during the period 1 January
2015 to 31 December 2015
27 January 2015 Share placement
GBP 0.00325 53,846,154 264,556
31 March 2015 Share placement
GBP 0.0015 300,000,000 697,266
12 May 2015 Share placement
GBP 0.0015 15,785,600 36,682
27 July 2015 Share placement
GBP 0.0008 312,500,000 388,350
24 November 2015 Share placement
GBP 0.00025 680,000,000 264,078
23 December 2015 Share placement
GBP 0.00035 14,285,714 7,767
Darwin Convertible Note Conversions
1 January 2015 at GBP 0.00546 18,315,018 155,728
4 March 2015 at GBP 0.0025 252,000,000 965,670
---------------- --------------
At 31 December 2015 2,127,028,884 52,859,713
Shares issued during the period 1 January
2015 to 31 December 2016
12 February 2016 Share placement
GBP 0.0003 500,000,000 217,500
30 March 2016 Share placement
GBP 0.00045 281,962,222 190,092
17 May 2016 Share placement
GBP 0.00056 1,021,303,571 818,145
10 June 2016 Share placement
GBP 0.0007 571,428,571 600,000
16 November 2016 Share placement
GBP 0.0003 1,333,333,333 497,632
Cost of Capital - (105,811)
---------------- --------------
At 31 December 2016 5,835,056,581 55,077,271
Reserves
Foreign Currency Reserve - Balances held in Foreign Currency
Reserve relate to foreign exchange gain/loss that arises when
converting the group entities to the presentation.
Merger Reserve - Balances held in Merger Reserve represent the
excess of consideration paid for GSR Africa over the fair value
of net assets acquired.
31 December
2016
US $'000
As at 1 January 2016 (42,747)
Foreign Currency Translation Reserve (47)
Merger reserve -
--------------
As at 31 December 2016 (42,794)
31 December
2015
US $'000
As at 1 January 2015 87
Foreign Currency Translation Reserve (187)
Merger reserve (42,647)
As at 31 December 2015 (42,747)
16. Non-Controlling Equity Interest
31 December 31 December
2016 2015
US $'000 US $'000
Balance brought forward from prior
year (621) (449)
Share of net assets at acquisition
date - -
Share of losses in period to 31
December (213) (172)
------------ ------------
(834) (621)
------------ ------------
On 1 July 2013, the Group acquired a 75% interest in GSR Africa.
At this date, the Group recognised a non-controlling interest of
USD 21,646, which represented the non-controlling interest's share
of net assets in GSR Africa at that date.
For the year ended 31 December 2016, the non-controlling
interest's share of losses in GSR Africa was USD 211,917 (2015: USD
171,575).
17. Trade and Other Payables
31 December 31 December
2016 2015
US $'000 US $'000
Trade payables 124 132
Accruals 7 170
Other payables 103 40
------------ ------------
Total accruals 234 342
------------ ------------
Trade payables are non-interest bearing and are normally settled
on 7 - 30 day terms.
Accruals relate to end of the financial period audit and
accounting services.
Other payables relate to superannuation and tax withheld from
salaries payable to the tax office.
18. Financial liabilities
31 December 31 December
2016 2015
US $'000 US $'000
Hire purchase loan 12 13
Total Financial liabilities 12 13
------------ ------------
19. Commitments and Contingencies
Tenement expenditure minimum payments
The Group is subject to the following minimum expenditures
commitments in the 2017 financial year under the three exploration
licences: Tongo $USD 350,000; Moa $USD 250,000 and Baja $USD
350,000.
Future minimum lease payments
At 31 December 2016, the future minimum lease payments under
non-cancellable leases were payable as follows.
31 December 31 December
2016 2015
US $'000 US $'000
Less than one year 107 103
Between one and five years 73 181
180 284
------------ ------------
Aside from those mentioned above, the Group is subject to no
other commitments or contingent liabilities.
20. Subsequent Events
-- The Company carried out capital raisings by way of issue of
new Ordinary Shares of no par value on the following dates :
Date Capital raised Placement price No. of new Ordinary shares
GBP GBP per share of no par value
28 Apr 2017 553,484 0.00021 2,635,638,097
-- On 28 April 2017, the Company agreed with consultants to
issue 351,561,904 new ordinary shares of no par value in lieu of
services rendered and to be rendered ( totalling GBP73,828) up to
31 March 2018. The shares were issued at a price of 0.021 pence per
share, being the same as the placing price given to other placees
who participated in the Placing of GBP553,484 on the same date.
21. Related Party Transactions
During the financial year to 31 December 2016, no fees were
invoiced from David McDonald Legal, a company controlled by Mr
David McDonald, a Director of the Company, in relation to
professional services rendered (2015: USD 1,203).
22. Financial risk management objectives and policies
The Group's activities expose it to a variety of financial
risks. The Group's Board provides certain specific guidance in
managing such risks, particularly as relates to credit and
liquidity risk. Any form of borrowings requires approval from the
Board and the Group does not currently use any derivative financial
instruments to manage its financial risks. The key financial risks
and the Group's major exposures are as follows:
Credit risk
The maximum exposure to credit risk is represented by the
carrying amount of the financial assets. In relation to cash and
cash equivalents, the Group limits its credit risk with regards to
bank deposits by only dealing with reputable banks. In relation to
sales receivables, the Group's credit risk is managed by credit
checks for credit customers and approval of letters of credit by
the Group's advising bank for offtake customers. The Group does not
have any significant concentrations of credit risk.
Foreign Currency Risk
Currency risk is the risk that the value of a financial
instrument will fluctuate due to changes in foreign exchange rates.
The table below indicates the currencies to which the Group had
significant exposure at 31 December 2016 on its monetary assets and
liabilities. The analysis calculates the effect of a reasonably
possible movement of the currency rate against the US dollar, with
all other variables held constant on the statement of comprehensive
income. A positive amount in the table reflects a potential net
increase in the consolidated statement of comprehensive income.
Currency Held 2016 Change in Effect on
Currency Statement
rate in 10% of Comprehensive
Income
$'000
British Pound Sterling 234 +10 23
Australian Dollar 83 +10 8
Singaporean Dollar 1 +10 -
Sierra Leonean Leone 3 +10 -
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. Numbers in the
table below represent the gross, contractual, undiscounted amount
payable in relation to the financial liabilities. The Group
monitors its risk to a shortage of funds using a combination of
cash flow forecasts, budgeting and monitoring of operational
performance.
On Demand Less than Three to One to Total
three months twelve months five years
USD USD USD USD USD
$'000 $'000 $'000 $'000 $'000
As at 31 December
2016:
Trade and other
payables 254 - - - 254
23. Capital management
Capital includes equity attributable to the equity holders of
the parent. Refer to the statement of changes in equity for
quantitative information regarding equity.
The Group's primary objectives when managing capital are to
safeguard its ability to continue as a going concern in order to
provide returns for shareholders. For details of the capital
managed by the Group as at 31 December 2016, please see Note
15.
The Group is not subject to any externally imposed capital
requirements.
24. Interest rate risk
Interest rate risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in market interest rates. A sensitivity analysis is not
presented, as all borrowing costs have been capitalised as at 31
December 2016; therefore profit or loss and equity would have not
been affected by changes in the interest rate.
25. Parent Company Information (Golden Saint Resources Ltd)
1 January 1 January
2016 to 31 2015 to 31
December December
2016 2015
US $'000 US $'000
Loss for the period 450 693
Balance Sheet as at 31 December 2016
Current assets 7,656 5,894
Non-current assets 69,406 69,406
Equity 76,988 75,221
Current liabilities 71 79
Non-current liabilities 0 0
A copy of the report and accounts is available on the Company's
website www.goldensaintresources.com.
Glossary of Technical Terms
The following glossary of terms applies throughout this
announcement, unless the context otherwise requires:
aeromagnetic An airborne geophysical survey technique used
to measure the magnetic susceptibility of rocks
alluvial detrital material which is transported by a
river and deposited at points along the course
and in flood plain of a river
amphibolite a faintly foliated, metamorphic rock developed
during regional metamorphism and composed mainly
of amphibole (a silicate mineral)
Archean Geological eon (period) between 4,000 and 2,500
million years ago when Earth's crust formed
bedrock mining/geological term for the un-weathered
rock below the soil or loose sedimentary cover
bulk sampling the process of taking very large samples, commonly
as a composite from several areas of a defined
deposit, as part of the general procedure for
the exploration and evaluation of a mineral
deposit
carat standard measure of diamond weight (0.2grams)
diamond a precious stone consisting of a clear and
typically colourless crystalline form of pure
carbon; the hardest naturally occurring substance
diamond field a zone of concentration of diamond occurrences
diamondiferous containing diamonds
dredging excavation activity carried out partly underwater
with the purpose of gathering up bottom sediments
and extracting diamonds through pumping and
screening on a barge
ductile deformation behaviours in which rocks, at a critical stress,
do not rupture but instead become permanently
deformed by plastic changes
E East direction
eon period of geological time or distance
fissure breakage line made by cracking or splitting
in rock and earth
granite coarse-grained igneous rock dominated by light-coloured
minerals, consisting of about 50% orthoclase,
25% quartz, and balance of plagioclase feldspars
and ferromagnesian silicates
greenstone Archean (geological period before 2,500 million
years ago) and Proterozoic (1,600-2,500 million
years ago) volcanic- sedimentary rock sequences
high strain zone an area of material over which a high strain
rate is applied; often resulting in a shear
zone
igneous said of a rock or mineral that solidified from
molten or partly molten material, i.e., from
a magma
intrusive of or pertaining to intrusion, both the processes
and the rock so formed
Jurassic geologic period of time from 190 to 135 million
years
kimberlite a rare, blue-tinged, coarse-grained potassic
intrusive igneous rock sometimes containing
diamonds
kimberlite pipe/dyke a vertical "carrot-shaped" intrusive volcanic
structure which hosts kimberlites
kinematic branch of mechanics that deals with pure motion,
without the inclusion to masses or different
forces involved
lateritic soil and rock type rich in iron and aluminium,
and is commonly considered to have formed in
hot and wet tropical areas.
mafic a dark coloured igneous rock which has a high
proportion of pyroxene and olivine minerals
metamorphism process whereby rocks undergo physical or chemical
changes or both to achieve equilibrium with
conditions other than those under which they
were originally formed (excluding process of
weathering). Agents of metamorphism are heat,
pressure and chemically active fluids
mineralisation process of formation and concentration of elements
and their chemical compounds within a mass
or body of rock
N North direction
olivine any of a group of olive green magnesium-iron
silicate minerals that crystallize in the orthorhombic
system
outcrop area over which a particular rock type occurs
at the surface whether visibly exposed or not
potassic containing potassium
prospective an area of land suitable and considered warranting
mineral exploration
resources Measured: a mineral resource intersected and
tested by drill holes, underground openings
or other sampling procedures at locations which
are spaced closely enough to confirm continuity
and where geoscientific data are reliably known.
A measured mineral resource estimate will be
based on a substantial amount of reliable data,
interpretation and evaluation which allows a
clear determination to be made of shapes, sizes,
densities and grades
Indicated: a mineral resource sampled by drill
holes, underground openings or other sampling
procedures at locations too widely spaced to
ensure continuity but close enough to give a
reasonable indication of continuity and where
geoscientific data are known with a reasonable
degree of reliability. An indicated resource
will be based on more data, and therefore will
be more reliable than an inferred resource estimate
Inferred: a mineral resource inferred from geoscientific
evidence, underground openings or other sampling
procedures where the lack of data is such that
continuity cannot be predicted with confidence
and where geoscientific data may not be known
with a reasonable level of reliability
S South direction
schist metamorphic rock dominated by fibrous or platy
minerals
shear zone a zone of strong deformation (with a high strain
rate) surrounded by rocks with a lower rate
of finite strain
shield a shield is generally a large area of exposed
Precambrian crystalline igneous and high-grade
metamorphic rocks that form tectonically stable
areas
soil sampling testing of soil for mineral content from samples
selected at strategic points over the sampled
areas; usually in a grid pattern
structure term used to describe the relationship between
rock masses, implying structure feature
synkinematic granites family of granite that occurs first in relation
to deformative events in the earth's lithosphere
target area of the deposit which is the focus of exploration
tectonothermal involving both the movement of the earth's crust
and geothermal activity
terrace remnant of the former floodplain or older course
of a stream or
river
transported cover alluvial material or sediments that have been
transported to their present location and cover
bedrock
W West direction
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PGUWUQUPMGWM
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June 27, 2017 10:36 ET (14:36 GMT)
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