Final Results -17-
March 25 2009 - 3:01AM
UK Regulatory
| | elect to |
| | increase its |
| | interest up |
| | to 70% in |
| | the new |
| | company by |
| | producing a |
| | feasibility |
| | study and |
| | financing |
| | 100% of the |
| | costs to |
| | initiate |
| | commercial |
| | production. |
+--------+------------------+
| | A |
| | total |
| | of 38 |
| | exploration |
| | prospects |
| | have been |
| | identified |
| | and |
| | evaluated |
| | in the |
| | project |
| | area with |
| | Crespo |
| | project |
| | being the |
| | most |
| | important |
| | property |
| | which is in |
| | the |
| | inferred |
| | mineral |
| | resource |
| | category. |
| | The |
| | investment |
| | of |
| | US$33,333,333 |
| | was made |
| | mainly to |
| | acquire the |
| | Crespo |
| | resources and |
| | immediately |
| | commence an |
| | exploration |
| | programme to |
| | transform |
| | these |
| | inferred |
| | resources |
| | into |
| | reserves. The |
| | consideration |
| | has been |
| | allocated to |
| | the mining |
| | rights and |
| | the |
| | subsequent |
| | investment of |
| | US$197,000 |
| | during 2008 |
| | has been |
| | capitalised |
| | within |
| | exploration |
| | and |
| | evaluation |
| | costs. |
+--------+------------------+
| | |
+--------+------------------+
| (b) | Acquisition |
| | of assets |
+--------+------------------+
| | San |
| | Felipe |
+--------+------------------+
| | On 15 |
| | May |
| | 2006 |
| | the |
| | Group |
| | signed |
| | a |
| | joint |
| | venture |
| | agreement |
| | which |
| | gave the |
| | Group the |
| | right to |
| | earn a |
| | 70% |
| | interest |
| | in the |
| | San |
| | Felipe |
| | project |
| | once |
| | investment |
| | thresholds |
| | in |
| | exploration |
| | and mine |
| | development |
| | of |
| | US$33,300,000 |
| | were met. |
+--------+------------------+
| | On 4 |
| | June |
| | 2008 |
| | the |
| | Group |
| | acquired |
| | the 100% |
| | ownership |
| | of the |
| | San |
| | Felipe |
| | project |
| | in Mexico |
| | for a |
| | total |
| | consideration |
| | of |
| | US$51,500,000 |
| | payable to |
| | its former |
| | local |
| | partner, |
| | Grupo Serrana |
| | S.A. de C.V. |
+--------+------------------+
| | With |
| | the |
| | acquisition |
| | of the San |
| | Felipe |
| | project, |
| | the |
| | original |
| | joint |
| | venture |
| | agreement |
| | was |
| | terminated. |
| | As at the |
| | acquisition |
| | date, the |
| | Group had |
| | invested |
| | approximately |
| | US$8,800,000 |
| | in the |
| | property |
| | which has |
| | been expensed |
| | to the income |
| | statement in |
| | accordance |
| | with the |
| | Group's |
| | accounting |
| | policy (see |
| | also note |
| | 15). |
+--------+------------------+
| | Further |
| | on 4 |
| | June |
| | 2008, |
| | the |
| | Group |
| | acquired |
| | a group |
| | of |
| | assets |
| | related |
| | to the |
| | project |
| | for a |
| | total |
| | consideration |
| | of |
| | US$1,000,000 |
| | payable to |
| | Grupo Serrana |
| | S.A. de C.V. |
+--------+------------------+
| | |
+--------+------------------+
| (c) | Acquisition |
| | of |
| | associates |
+--------+------------------+
| | Lake |
| | Shore |
| | Gold |
| | Corp. |
+--------+------------------+
| | During |
| | 2008, |
| | the |
| | Group |
| | acquired |
| | a 39.99% |
| | interest |
| | in Lake |
| | Shore |
| | Gold |
| | Corp. |
| | ('Lake Shore'), |
| | a gold mining |
| | company listed |
| | on the Toronto |
| | Stock Exchange |
| | for a total |
| | consideration |
| | of |
| | US$163,997,000. |
| | The acquisition |
| | was made in the |
| | following |
| | tranches: |
+--------+------------------+
| | - |
| | 19.99% |
| | acquired |
| | through |
| | a share |
| | issue on |
| | 19 |
| | February |
| | 2008 for |
| | US$64,806,000; |
+--------+------------------+
| | - |
| | 15.00% |
| | acquired |
| | through |
| | a share |
| | issue on |
| | 13 June |
| | 2008 for |
| | US$78,029,000, |
| | and |
+--------+------------------+
| | - |
| | 5.00% |
| | acquired |
| | from a |
| | third |
| | party on |
| | 23 June |
| | 2008 for |
| | US$21,162,000. |
+--------+------------------+
| | The |
| | interest |
| | in |
| | Lake Shore |
| | gives the |
| | Group the |
| | right to |
| | exercise |
| | significant |
| | influence |
| | over that |
| | company. In |
| | compliance |
| | with the |
| | Group's |
| | policy and |
| | IAS 28, the |
| | investment |
| | has been |
| | treated as |
| | an |
| | associate |
| | and |
| | accounted |
| | for using |
| | the equity |
| | method. |
+--------+------------------+
| | Management |
| | has |
| | assessed |
| | the fair |
| | value of |
| | the |
| | Group's |
| | interest |
| | in the |
| | assets and |
| | liabilities |
| | acquired as |
| | being |
| | US$151,698,000, |
| | resulting in |
| | goodwill of |
| | US$12,513,000 |
| | on acquisition. |
| | The fair value |
| | includes |
| | transaction |
| | costs incurred |
| | by the Group of |
| | US$214,000. |
+--------+------------------+
4Finance income and finance costs
+--------------------+-+-------------+--+-------------+--+---------+--+-------------+--+-------------+--+--------+-+
| | | Year ended 31 December 2008 | | Year ended 31 December 2007 | |
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