TIDMCNG
30 June 2016
Annual Report and Accounts
China Nonferrous Gold Limited ?????????? (AIM: CNG), the mineral
exploration and development company currently developing the Pakrut
gold project in the Republic of Tajikistan, today announces its
final results for the year ended 31 December 2015.
The results below are extracted from the Company's audited
Annual Report and Financial Statements. Copies of the Annual Report
will be posted to shareholders today and are available on the
Company's website (www.cnfgold.com) and from the Company's office
at Unit 2.24, The Plaza, 535 Kings Road, London SW10 0SZ.
For further information please visit the Company's website
(www.cnfgold.com) or contact:
China Nonferrous Gold Limited
David Tang, Managing Director
Tel: +86 10 8442 6681
Investec Bank Plc
Jeremy Ellis, George Price
Tel: +44 (0)20 7597 5970
Blytheweigh
Tim Blythe, Nick Elwes
Tel: +44 (0)20 7138 3204
Notes
The Pakrut gold project, of which CNG has 100 per cent
ownership, is situated in Tajikistan approximately 120km northeast
of the capital city Dushanbe. Pakrut is located within the Tien
Shan gold belt, which extends from Uzbekistan into Tajikistan,
Kyrgyzstan and Western China, and which hosts a number of
multi-million ounce gold deposits.
CNG is currently in a construction phase with mining contractors
on site constructing the mine, plant and tailings dam.
Tajikistan is a secular republic located in Central Asia. The
country is a member of the Commonwealth of Independent States and
the Shanghai Cooperation Organisation. Tajikistan hosts numerous
operating precious metal mines as well as the largest aluminium
smelter in Central Asia. CNG's management team has extensive
experience in the mining industry in Tajikistan.
Chairman's Statement
As the Chairman of the Board, it gives me great pleasure to
present the Chairman's Statement at a time when the Group has made
significant progress. The year ending 31 December 2015 witnessed
two significant milestones for our company with the completion of
the project construction and first gold poured at our Pakrut
Project.
Construction
In the first half of the year, work continued at a fast pace and
by September we were able to report significant progress on the
Main Decline, the West Ventilation Access Decline and the Ore
Extraction Ramp. Furthermore, in the first half of the year we
completed the connection Ramp between 2,170 and 2,350 metres.
The Connection Ramp at the levels of 2,292, 2,230, 2,170 and
2,110 metres reached 4,943 metres by the end of the year and the
mining preparation and cutting work continued over the course of
the year with 4,545 metres of tunneling completed across all
sublevels. At the same time, we finished 47 metres of the West
Ventilation Shaft and 33.4 metres tunnelling to the adit of the
East Ventilation shaft.
We continued to make considerable progress on mine engineering
and development work in the second half of the year. Construction
for nearly all of the workshops, the processing plant and most of
the supporting facilities were completed during the course of the
year and the processing plant was commissioned at the end of
September 2015. Construction of the smelting plant was also
completed in 2015 and the plant was commissioned in October 2015,
as planned.
The construction and installation of 73 kilometres of external
power lines up to sites and construction of two electrical
substations at Pakrut and Hamza have been completed. From July
2015, electricity from the national grid began to be supplied to
both the Pakrut processing plant and the smelting plant in
Vahdat.
Trial Production
The mining of the ore started in the second half of the year at
the 2,292 metre level and, by the end of the year, 98,445 tonnes of
ore had been mined. Including ore accumulated during the
construction period, we have a stock pile of more than 160,000
tonnes of ore as at the end of 2015. On 1 October, we were able to
announce that trial production had started and on 29 December the
first gold ingots were poured. In total, 2.45 Kg of gold bars were
produced from the trial.
Financial Results
As progress on the Pakrut project accelerated, the amount of
expenditure incurred by the Group on development and construction
work during the year increased from the previous year and stood at
US$ 112,592,000 (2014: US$81,488,000). Administration expenditure
was US$3,166,000 (2014: US$4,968,000). The overall loss incurred by
the Group was US$6,150,000 (2014: US$15,680,000).
The principal balance of the shareholder loan for the RMB tranch
and USD tranches at the end of the period was US$20,864,188 (2014:
US$47,059,863) and US$44,999,900 (2014: US$8,333,300) respectively,
with the lender providing flexibility over the course of the year
on the currency of draw down. The total balance outstanding under
the Shareholder loan including accrued interest amounted to
US$69,224,000 at the end of the period (2014: US$55,594,000). Loan
repayments were made in accordance with the loan repayment schedule
and financed from existing facilities.
In May 2015, the Group continued to draw down the final
US$40,000,000 tranche of a bank term loan facility totalling
US$120,000,000 from the Industrial and Commercial Bank of China
(Macau) Limited, which was secured by standby letters of credit. A
total of US$54,030,000 was drawn down during 2015. Interest is
charged at a rate of 2.9% above the 3 month LIBOR rate. Loan
repayments commenced in January 2016, post period end, in
accordance with the relevant agreements and have been paid
utilising the Company's existing facilities.
It is the opinion of the board of directors that the Group has
sufficient funds to continue as a going concern, after taking into
account revenue from projected gold sales. Shareholders attention
is also drawn to the auditor's opinion which contains an emphasis
of matter in relation to approval of Pakrut reserves by Tajik
Department of Geology.
Post year end
On 6 May, 2016 the Company has signed documentation with CNMC
International Capitals Company Limited ("CNMC"), an associate of
China Nonferrous Metals International Mining Co., Ltd ("CNIMIM"),
the Company's 38.36% shareholder, for a loan facility of USD$120
million ("CNMC Loan"). The CNMC Loan will be used to refinance the
loan facility with the Industrial and Commercial Bank of China
(Macau) Limited ("ICBC"), under which USD$115 million was drawn at
the time of announcement, and for working capital. The CNMC Loan is
repayable on 31 December 2018 and includes an annual fixed interest
rate of 4% on the amount drawn down, payable half yearly in
arrears. The Company is also in discussions to refinance its 2012
loan with China Nonferrous Metals Int'l Mining Co., Ltd.
Outlook
The transformation of the Pakrut Gold Project from construction
to production is now almost complete and this remains the immediate
focus of the management. Issues from trial mining have been
resolved and the Company is on course to reach nameplate capacity
for phase one of the project of 2,000 tonnes per day during the
fourth quarter of 2016. The plant is currently processing 1,300
tonnes of ore per day.
During the course of the next 12 months the Company plans to
construct a permanent camp at site, replacing the temporary one
currently in use and relocate the tailings dam. The current
tailings dam was always expected to be temporary in nature and the
Company expects to complete the construction of a new permanent
tailings dam in the first half of 2017. The current site has
sufficient capacity until this time.
I would like to take this opportunity to thank all of our
employees, management and advisors for their continued effort in
2015 and thank our shareholders for their continued support of our
Group. I very much look forward to updating our shareholders on the
mine developments and production levels.
Xiang Wu
Chairman
Director
30 June 2016
Independent Auditor's Report to the Members of China Nonferrous
Gold Limited
We have audited the Financial Statements of China Nonferrous
Gold Limited for the year ended 31 December 2015 which comprise the
Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Financial Position, the Consolidated Statement of
Changes in Equity, the Consolidated Statement of Cash Flows, the
Accounting Policies and the related notes. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
This report is made solely to the Company's members, as a body.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of Directors and Auditor
As explained more fully in the Statement of Directors'
Responsibilities, the Directors are responsible for the preparation
of the Financial Statements and for being satisfied that they give
a true and fair view. Our responsibility is to audit and express an
opinion on the Financial Statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
Ethical Standards for Auditors.
Scope of the audit of the Financial Statements
An audit involves obtaining evidence about the amounts and
disclosures in the Financial Statements sufficient to give
reasonable assurance that the Financial Statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of whether the accounting policies are
appropriate to the Group's circumstances and have been consistently
applied and adequately disclosed, the reasonableness of significant
accounting estimates made by the Directors, and the overall
presentation of the Financial Statements. In addition, we read all
the financial and non-financial information in the Annual Report to
identify material inconsistencies with the audited Financial
Statements and to identify any information that is apparently
materially incorrect based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing the audit. If
we become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Opinion on Financial Statements
In our opinion:
-- the Financial Statements give a true and fair view of the state of the
Group's affairs as at 31 December 2015 and of the Group's loss
for the
year then ended; and
-- the Financial Statements of the Company and Group have been properly
prepared in accordance with IFRSs as adopted by the European
Union.
Emphasis of matter - Approval of Pakrut reserves by Tajik
Department of Geology
In forming our opinion on the Financial Statements, which is not
modified, we have considered the adequacy of the disclosures made
in Note 2 - Critical Accounting Estimates, Assumptions and
Judgements, concerning the expected successful approval of the
increased JORC compliant resources from the Tajik Department of
Geology and the Scientific and Technical Counsel, which includes
the results of all exploration and evaluation activities undertaken
by the Group between 2009 and 2013. The application is currently
subject to that approval process and, whilst the approval process
remains ongoing and has not yet been finalised, the Directors are
not aware of any legal or other impediments which would prevent
approval of their application and therefore permit the Group to
mine the increased resources. No provision for any impairment that
may result if approval is not obtained has been made in the
Financial Statements.
PKF Littlejohn LLP 1 Westferry Circus
Chartered Accountants and Registered Auditor Canary Wharf
London E14 4HD
30 June 2016 United Kingdom
Consolidated Statement of Statement of Comprehensive Income
Year ended 31 December 2015
2015 2014
US$000 US$000
Revenue - -
Cost of sales - -
Gross Profit - -
Administrative expenses (3,166) (4,968)
Listing and capital reorganisation expenses - (1,043)
Project impairment - (9,475)
Loss on foreign exchange (2,988) (151)
Operating Loss (6,154) (15,637)
Finance income 4 6
Finance costs - (49)
Loss before Income Tax (6,150) (15,680)
Income tax - -
Loss for the year attributable (6,150) (15,680)
to owners of the parent
Total comprehensive income attributable (6,150) (15,680)
to owners of the parent for the year
Basic and Diluted Earnings per $(0.0161) $(0.0411)
share attributable to owners
of the parent (expressed in dollars per share)
All of the activities of the Group are classed as
continuing.
Consolidated Statement of Statement of Financial Position
Year ended 31 December 2015
As at As at
31 December 2015 31 December 2014
US$000 US$000
Non-Current Assets
Intangible assets - -
Mines under construction 244,529 132,530
Property, plant and equipment 11,624 14,259
Total Non-Current Assets 256,153 146,789
Current Assets
Inventories 39,390 24,732
Trade and other receivables 1,010 1,049
Cash and cash equivalents 2,213 18,272
Total Current Assets 42,613 44,053
Non-Current Liabilities
Trade and other payables - (7,390)
Borrowings (56,437) (88,042)
Provisions for other liabilities (646) (593)
and charges
Total Non-Current Liabilities (57,083) (96,025)
Current Liabilities
Borrowings (132,583) (30,916)
Trade and other payables (74,204) (23,045)
Total Current Liabilities (206,787) (53,961)
Net Current Liabilities (164,174) (9,908)
Net Assets 34,896 40,856
Equity attributable to the
owners of the parent
Share capital 38 38
Share premium 65,901 65,711
Other reserve 10,175 10,175
Retained earnings (41,218) (35,068)
Total Equity 34,896 40,856
These Financial Statements were approved and authorised for
issue by the Directors on 30 June 2016 and are signed on their
behalf by
Mr Weili Tang Mr Li Li
Managing Director Finance Director
Consolidated Statement of Statement of Changes In Equity
Year ended 31 December 2015
Attributable to owners of the parent
Share capital Share premium Other reserve Retained Total
US$000 US$000 US$000 Earnings US$000
US$000
Balance 38 65,616 10,175 (19,521) 56,308
at 1
January
2014
Loss and - - - (15,680) (15,680)
Total
comprehensive
income
for
the year
Share - - - 133 133
based
payments
-option
granted
Issue of - 95 - - 95
ordinary
shares
Total - 95 - 133 228
contributions
by and
distributions
to owners
of
the
parent,
recognised
directly
in
equity
Balance 38 65,711 10,175 (35,068) 40,856
at 31
December
2014
Balance 38 65,711 10,175 (35,068) 40,856
at 1
January
2015
Loss and - - - (6,150) (6,151)
Total
comprehensive
income
for
the year
Issue of - 190 - - 190
ordinary
shares
Total - 190 - - 190
contributions
by and
(distributions
to)
owners
of the
parent,
recognised
directly
in
equity
Balance 38 65,901 10,175 (41,218) 34,896
at 31
December
2015
Other reserve comprises the capital reorganisation reserve under
the scheme of arrangement.
Consolidated Statement of Statement of Cash Flows
Year ended 31 December 2015
31 December 31 December
2015 2014
US$000 US$000
Cash flows from Operating Activities 44,042 45,151
Net cash generated from Operating Activities 44,042 45,151
Cash flows from Investing Activities
Payments for mining rights and (111,999) (59,627)
construction in progress
Purchase of property, plant and equipment (2,282) (12,903)
Movement in inventories (14,658) (18,122)
Interest received 4 6
Net cash used in Investing Activities (128,935) (90,646)
Cash flows from Financing Activities
Cash acquired from contractor
Proceeds from issuance of equity share capital 190 95
Proceeds from borrowings (net 110,909 74,712
of capitalised issue costs)
Repayment of borrowings (31,375) (15,681)
Interest paid (10,890) (3,962)
Net cash generated from Financing Activities 68,834 55,164
Net (decrease)/increase in (16,059) 9,670
Cash and cash equivalents
Cash and cash equivalents 18,272 8,602
at beginning of the year
Cash and cash equivalents at end of the year 2,213 18,272
Major non-cash transactions
Year ended 31 December 2015
During 2015 the Group made drawdowns from its loan facility with
CNMIM of USD 10,470,925, and made drawdowns from ICBC loan
facilities of USD 100,000,000, which under the agency arrangement
were paid directly to suppliers and contractors in order to settle
the Group's liabilities for mine construction, power line
construction and the provision of processing plant equipment and
materials.
Year ended 31 December 2014
During 2014 the Group made drawdowns from its loan facility with
CNMIM under the RMB tranche of RMB274,409,000 (equivalent to
US$43,557,000), which under the agency arrangement were paid
directly to suppliers and contractors in order to settle the
Group's liabilities for mine construction, power line construction
and the provision of processing plant equipment and materials.
1.Basis of Preparation
The principal accounting policies applied in the preparation of
these Consolidated Financial Statements are set out below. These
policies have been consistently applied to all the years presented,
unless otherwise stated. The Consolidated Financial Statements have
been prepared in accordance with International Financial Reporting
Standards (IFRS) and IFRS Interpretations Committee (IFRSIC) as
adopted by the European Union. The Financial Statements have been
prepared on a historical cost basis.
2.Critical Accounting Estimates, Assumptions and Judgements
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amount of assets and
liabilities are set out below. Estimates and assumptions are
continually 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. Uncertainty
about these assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of assets and
liabilities affected in future periods.
The Group has identified the following areas where significant
estimates, assumptions and judgements are required. The most
significant judgement for the Group is the assumption that
exploration and development at its sites will ultimately lead to a
commercial mining operation. Failure to do so could lead to the
write-off of the intangible assets and property, plant and
equipment relating to the particular site.
Approval of Pakrut reserves by Tajik Department of Geology
In November 2011, the Government of the Republic of Tajikistan
issued the Pakrut Gold Project mining licence to LLC Pakrut.
According to the terms of the licence, the amount of ore that can
be mined is variable depending upon the mine plan. The plan
submitted by the Group envisages an initial processing capacity of
660,000 tons of ore per annum, increasing to 1,320,000 tons per
annum. The mining licence is valid until 2 November 2030.
The mining licence issued in November 2011 currently entitles
the Group to mine JORC compliant resources (measured, indicated and
inferred) of 904,000 ounces out of total JORC compliant resources
of 4,383,000 ounces at Pakrut, excluding the Eastern Pakrut,
Rufigar and Sulfidnoye ore zones. The JORC compliant resources
include the results from the Group's exploration and evaluation
work subsequent to the mining licence issue date.
LLC Pakrut has sought approval of the increased JORC compliant
resources from the Tajik Department of Geology and the Scientific
and Technical Counsel which includes the results of all exploration
and evaluation activities undertaken by the Group between 2009 and
2013. The application is currently subject to that approval process
and the Directors are not aware of any legal or other impediments
which would prevent approval of their application and therefore
permit the Group to mine the increased resources. However, the
approval process currently remains incomplete.
The mine design and construction work undertaken to date,
together with the assessment of the recoverable amount of 'Mines
under Construction' (see below), is based upon the total quantity
of JORC compliant resources of which part falls outside the area
covered by the mining licence and still subject to formal approval,
as noted above. Failure to obtain this approval would lead to an
impairment of 'Mines under Construction', together with
inventories, and also impact the going concern basis of preparation
of the Financial Statements. No provision for impairment has been
recognised in these Financial Statements relating to this
uncertainty.
Estimated impairment of exploration and evaluation assets and
mines under construction
The Group tests annually whether exploration, evaluation and
licensing assets and mines under construction have suffered any
impairment. The recoverable amounts of the cash generating units
("CGUs") have been determined based on value in use calculations
which require the use of estimates and assumptions such as
long-term commodity prices, discount rates, operating costs, future
capital requirements and mineral resource estimates (see below).
These estimates and assumptions are subject to risk and uncertainty
and therefore there is a possibility that changes in circumstances
will impact the recoverable amount. Management has assessed its
CGUs as being individual exploration and mine sites, which is the
lowest level for which cash inflows are independent of those of
other assets or CGUs.
In assessing the carrying amounts of its exploration, evaluation
and licensing assets and mines under construction at Pakrut, the
Directors have used an independently prepared and Director approved
bankable feasibility study. The assessment period used in the
report is the anticipated life of the mine to the expiration of the
licence in 2030, which consists of 2 years to prepare for full
production, and 13 years of full production. Gold revenues have
been estimated over that period at a price of US$1,100 per ounce to
US$1,210. These estimates are based on, and are consistent with,
external sources of information. The calculation assumes a mining
capacity of 2,000 tonnes of ore daily increasing to 4,000 tonnes
per day. The total cost per ounce including royalties, taxes,
depreciation and amortisation is US$698, after taking into account
external information available and adjusted according to prevailing
market prices and forecasts over the period of production.
Royalties have been calculated at 6% of sales revenues and
corporate income tax at 15%, according to the relevant laws in
Tajikistan. A discount rate of 10% has been utilised.
The calculations have been tested for sensitivity to changes in
the key assumptions. The most sensitive inputs in the calculation
of the value in use are operating costs, the gold price, and the
discount rate. An impairment to the mine value would occur if gold
prices fell to the five year low, costs were to increase by 10%,
and the discount factor used were to increase to 12%.
Certain of the Group's other exploration and evaluation projects
are at an early stage of development and no JORC compliant resource
estimates are available to enable value in use calculations to be
prepared. The Directors therefore undertook an assessment of the
following areas and circumstances which could indicate the
existence of impairment:
-- The Group's right to explore in an area has expired, or will expire in
the near future without renewal.
-- No further exploration or evaluation is planned or budgeted for.
-- A decision has been taken by the Board to discontinue exploration and
evaluation in an area due to the absence of a commercial level
of
reserves.
-- Sufficient data exists to indicate that the book value will not be
fully recovered from future development and production.
The rights of LLC Pakrut to carry out exploration and evaluation
activity at the Pakrut deposit expired on 1 April 2014. The
Exploration Licence area includes the Pakrut, Eastern Pakrut,
Rufigor and Sulfidnoye gold and mineral deposits. The renewal
application by the Group to extend the Exploration Licence is being
considered by the Government of Tajikistan. Although the Directors
are not aware of any legal or other impediments which would
ultimately prevent approval of the licence extension, the Directors
fully impaired the carrying value of the exploration and evaluation
assets relating to Eastern Pakrut, Rufigar and Sulfidnoye during
2014 due to non-renewal of the Exploration Licence as at 31
December 2014. The licences remain unapproved as at 31 December
2015. Exploration and evaluation activities can continue at the
Pakrut Gold Deposit in the area covered by the Mining Licence.
Mineral resource and reserve estimates
Reserves are estimates of the amount of resources that can be
economically and legally extracted from the Group's mining
properties. The Group estimates its mineral resources based on
information compiled by appropriately qualified persons relating to
the geological and technical data on the size, depth, shape and
grade of the ore body and suitable production techniques and
recovery rates. This analysis requires complex geological
judgements to interpret the data. The estimation of the recoverable
amount is based upon factors such as estimates of commodity prices,
future capital expenditure and production costs along with
geological assumptions made in estimating the size and grade of the
resources.
The Group estimates and reports mineral resource estimates in
line with the principles contained in the Australasian Code for
Reporting Exploration Results, Mineral Resources and Ore Reserves
(December 2004), which is prepared by the Joint Ore Reserves
Committee (JORC) of the Australasian Institute of Mining and
Metallurgy, Australian Institute of Geoscientists and Minerals
Council of Australia, known as the "JORC Code". The determination
of a JORC resource is itself an estimation process that involves
varying degrees of uncertainty depending on how the resources are
classified (i.e. measured, indicated or inferred).
As additional geological information is produced during the
operation of a mine and through additional exploration activity,
mineral resource estimates may change. Such changes may impact on
the Group's reported financial position which includes the carrying
value of mines under construction, property, plant and equipment
and inventories.
Mine rehabilitation provision
Rehabilitation costs will be incurred by the Group at the end of
the operating life of the Pakrut mine and some of the processing
facilities. The Group assesses its rehabilitation provision at each
reporting date. The ultimate rehabilitation costs are uncertain and
cost estimates can vary in response to various factors, including
estimates of the extent and costs of rehabilitation activities,
regulatory changes, inflation rates and changes in discount rates.
These uncertainties may result in future actual expenditure
differing from the amounts currently provided and there could be
significant adjustments to the provisions established which would
affect future financial results. The provision as at 31 December
2015 represents management's best estimate of the present value of
future rehabilitation costs required.
Production start date
The Group assesses the stage of the Pakrut mine under
construction to determine when it moves into the production phase,
this being when the mine is substantially complete and ready for
its intended use. The criteria used to assess the start date are
determined based on the unique nature of the mine construction
project, the complexity of the project and its location. The Group
considers various relevant criteria to assess when the production
phase is considered to have commenced. At this point, all related
amounts are reclassified from 'Mines under construction' to 'Mine
Properties' and 'Property, plant and equipment'. Some of the
criteria used to identify the production start date include:
-- Level of capital expenditure incurred compared to the original
construction cost estimate;
-- Completion of testing of the mine plant and processing equipment; and
-- Ability to produce metal in a saleable form.
When the mine development and construction project moves into
the production phase, the capitalisation of certain costs ceases
and costs are either regarded as forming part of the cost of
inventory or expensed, except for costs that qualify for
capitalisation. It is also at this point that depreciation
commences.
Contingencies
By their nature, contingencies will be resolved only when one or
more uncertain future events occur or fail to occur. The assessment
of contingencies inherently involves the exercise of significant
judgement and the use of estimates regarding the outcome of future
events.
Functional currency
The functional currency for the parent entity and each of its
subsidiaries is the currency of the primary economic environment in
which the entity operates. The parent company has determined the
functional currency of each entity is the US dollar. Determination
of functional currency may involve certain judgements to determine
the primary economic environment and the parent company reconsiders
the functional currency of its entities if there is a change in
events and conditions regarding the primary economic
environment.
3.Going Concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chairman's Statement and the Business Review in
the Report of the Directors. The accounting policies include the
Group's objectives, policies and processes for managing its
capital; its financial risk management objectives; details of its
financial instruments; and its exposure to liquidity risk.
In 2012, CNMIM provided a secured loan facility on commercial
terms to the Company for US$10 million and RMB530 million
(approximately US$83.5 million) that is being utilised to finance
the development of the Pakrut Gold Project. US$65.86 million of
that secured loan facility was utilised as at 31 December 2015,
being the latest available drawdown date. The Group has made
repayments since that date in accordance with the terms of the loan
agreement.
On 19 June 2014, the Group obtained a bank term loan facility of
US$120,000,000 from Industrial and Commercial Bank of China (Macau)
Limited ("ICBC"), secured by standby letters of credit. The loans
advanced under the facility cannot exceed 95% of the value of the
standby letters of credit. Standby letters of credit were issued on
24 June 2014 and 18 June 2015 in order to enable the Group to
drawdown US$80 million and US$40 million respectively under the
facility. The principal loan repayments commence on 30 January
2016. As at 31 December 2015, the Group had fully drawn down the
loan facility extended.
On 6th May 2016 the Group obtained a loan with CNMC
International Capitals Company Limited ("CNMC"), an associate of
CNMIM of US$120 million ("CNMC Loan"). This loan has been used to
refinance the loan facility with ICBC. The CNMC Loan is repayable
on 31 December 2018 and includes an annual fixed interest rate of
4% on the amount drawn down, payable in arrears.
On 27th June 2016 the Group drew down a further loan of
US$19,114,809 from CNMIM for working capital purposes.
As at the date of approval of these Financial Statements, and
based upon the budgeted levels of expenditure and Board approved
cash flow forecasts and expected production dates, the Directors
are satisfied that the Group has sufficient cash and loan
facilities to finance the Group's operating expenses and any
further development and construction of the Pakrut Gold Project
that is required.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for at
least 12 months from the date of signing these Financial
Statements. Thus they continue to adopt the going concern basis of
accounting in preparing the Financial Statements.
4.Finance Income and Costs
2015 2014
US$000 US$000
Finance Income
Interest income on short term bank deposits 4 6
Finance Costs
Interest expense on shareholder's loan 5,099 3,950
wholly repayable within five years
Interest expense on bank borrowings wholly 3,673 487
repayable within five years
Less: Borrowing costs capitalised in qualifying assets (8,772) (4,437)
Provisions: Unwinding of discount - 49
Finance costs - 49
5.Earnings per Share
2015 2014
US$000 US$000
Basic and diluted earnings per share (0.0161) (0.0411)
The basic earnings per share is calculated by dividing the loss
attributable to equity holders after tax of US$6,150,000 (2014 -
loss US$15,680,000) by the weighted average number of shares in
issue and carrying the right to receive dividend. For the year
ended 31 December 2015 this was 382,232,000 (2014 - 381,500,100)
shares.
As the Group has incurred a loss for the year, no option or
warrant is potentially dilutive, and hence the basic and diluted
earnings per share are the same. At year end there were 5,625,000
(2014 - 8,475,000) share options and no warrants outstanding that
are potentially dilutive in future.
6.Mines under Construction
Cost Mining rights US$000 Construction Total US$000
in progress
US$000
At 1 January 2014 34,891 16,151 51,042
Additions including 704 80,784 81,488
foreign
exchange differences
At 31 December 2014 35,595 96,935 132,530
Additions including (573) 113,165 112,592
foreign
exchange differences
At 31 December 2015 35,022 210,100 245,122
At 31 December 2014 35,595 96,935 132,530
Mining rights comprise exploration and evaluation assets up to
the date the Pakrut Gold Project was determined to be technically
feasible and commercially viable. All subsequent exploration and
evaluation expenditure at this site is capitalised within mining
rights. Mining rights also includes the subsoil contract signature
bonus, a share based payment for securing the Pakrut Mining Licence
and payments to obtain land use rights.
The decrease in mining rights during the year is a result of
foreign exchange losses recognised in the amount of US$2,238,417,
which was offset by additions to the Pakrut asset of US$1,665,417
during the period.
Construction in progress comprises the mine, power lines and
road construction work carried out at the Pakrut Gold Project by
contractors and directly by the Group. It also includes the
borrowing costs associated with the loan to finance the mine
construction from China Nonferrous Metals Intl Mining Co. Limited
("CNMIM") and Industrial and Commercial Bank of China (Macau)
Limited ("ICBC"), together with associated legal, professional and
consultancy costs.
Mines under construction are not depreciated until construction
is completed and the assets are available for their intended use,
signified by the formal commissioning of the mine for
production.
View source version on businesswire.com:
http://www.businesswire.com/news/home/20160629006597/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
June 30, 2016 02:16 ET (06:16 GMT)