TIDMGBGR
RNS Number : 3760X
GoldBridges Global Resources PLC
28 August 2015
GOLDBRIDGES GLOBAL RESOURCES PLC
Interim report - six months to 30 June 2015
GoldBridges Global Resources Plc ("GoldBridges" or the
"Company"), the gold mining and development company, announces its
unaudited results for the six months to 30 June 2015.
Highlights:
Production
- H1 2015 gold production from Sekisovskoye of 8,823 ounces (H1
2014: 12,694 ounces), in line with company expectations;
- Increase in total ore mined to 357,992 tonnes in H1 2015 from 343,242 tonnes in H1 2014;
- Total underground ore mined increased by 232% to 60,586 tonnes when compared to H1 2014;
- Contribution of ore from the underground mine increased to 17%
of total ore mined (H1 2014: 8%);
- 8% decrease in cash costs to US$682/oz versus US$744/oz in H1 2014.
Financial
- Revenue for the period of US$12.8m (H1 2014: US$16.7m),
impacted by lower global gold prices;
- Cost of sales of US$9.5m, reduced from US$11.6m in H1 2014;
- Gross profit of US$3.3m in H1 2015, compared to US$5.1m in H1 2014;
- Equity capital raisings in excess of US$5.0m during the period;
- In August 2015, the Kazakh Tenge devalued by more than 30% on
floating - expected to bring significant operating cost benefits to
the company.
Strategic
- Continued underground exploration drilling, increased
knowledge gained from the Venmyn Deloitte study in order to update
the geological model;
- Detailed plans and budgets developed and approved with local
authorities to access underground reserves by decline with expected
capex savings in the order of 50% in comparison to the shaft
method;
- Underground expansion works proceeding, supported by financial
commitment from strategic shareholder African Resources;
- Increasing contribution from underground production as the
open pit operations are wound down. Expected closure of the open
pit in H2 2015;
- Continuation of preparatory works in relation to Karasuyskoye
project, whilst the licence application process continues -
decision expected in H2 2015.
Maxim Strelnikov, COO of GoldBridges Global Resources Plc
commented:
"During the first half of this year, the Company has completed a
great deal of background work in relation to both the Sekisovskoye
mine and the Karasuyskoye ore fields. We have made good progress in
transitioning our Sekisovskoye mine from an open pit to a solely
underground operation and this work is underway whilst we continue
to optimise mine development plans. We are pleased to have made the
decision to access our substantial underground reserves using a
decline rather than a shaft, as our initial projections suggest
that this will decrease capital expenditure by in the order of 50%
of the costs estimated in the Competent Person's Report by Venmyn
Deloitte, published in November 2014. We look forward to providing
progress updates in the near future. In addition, we anticipate
that the recent devaluation of the Kazakh Tenge will result in both
operational and capital cost benefits for the Company."
For further information please contact:
GoldBridges Global Resources Plc
Louise Wrathall +44 (0) 207 932 2456
Strand Hanson (Financial Adviser and Joint Broker)
Andrew Emmott / James Spinney / Ritchie Balmer +44 (0) 207 409
3494
Cantor Fitzgerald Europe (Joint Broker)
Stewart Dickson / Jeremy Stephenson +44 (0) 207 894 7000
Bell Pottinger (Financial PR)
Daniel Thole / Marianna Bowes / Richard Crowley +44 (0) 203 772
2500
Information on the Company
GoldBridges is a gold mining, exploration and development group
based in Kazakhstan. Whilst the Company was initially established
to exclusively develop and operate the Sekisovskoye gold and silver
mine in the East Kazakhstan Region, it is now actively targeting
additional gold mining opportunities in Kazakhstan. This includes
the adjacent prospective Karasuyskoye Ore Fields, on which
GoldBridges was recently awarded the tender to perform further
confirmatory testing in order to gain the sub-soil user
licence.
The Company holds a 100 per cent shareholding in DTOO
Gornorudnoe Predpriatie Sekisovskoye ("DGPS") which holds a subsoil
use contract in relation to the Sekisovskoye deposit, covering a
total area of 0.855km(2). The subsoil use contract for Sekisovskoye
is valid until 2020 and the Company currently intends to seek to
extend the contract in accordance with its terms. The Company also
holds a 100 per cent shareholding in DTOO Altai Ken-Bayitu LLP
which owns and operates the processing plant at the Sekisovskoye
deposit. The Sekisovskoye deposit is located at the village of
Sekisovka, approximately 40km north of the town of Ust-Kamenogorsk,
the capital city of the East Kazakhstan Region. The current
operation is focused on mining two open pits where the
near-vertical deposits extend to the surface. The open pits are
nearing their end of life in 2015, and the Company is developing an
underground extension to exploit the deposits to depth.
The Company intends that the Sekisovskoye deposit shall become a
selective-mining underground operation. As at 31 May 2014, the
Company's proven and probable reserves consisted of 2.3Moz of gold
and 3.0Moz of silver and the Company's measured, indicated and
inferred resources consisted of 5.1Moz of gold and 3.5Moz of
silver, in each case as classified in accordance with JORC.
In the year ended 31 December 2014, the Company's consolidated
revenue was US$35.2 million and its EBITDA was US$5.3 million.
Chief Executive's review
H1 2015 Review
In H1 2015, GoldBridges has continued to expand its
understanding of the Sekisovskoye underground mine in Kazakhstan,
conducting additional drilling and revising the geological model.
In particular, the Company has been optimising the development
plans that we delivered to the market in the Competent Person's
Report (CPR) published in November 2014.
The first half of 2015 has been a period of transition at
Sekisovskoye as our open pit mine nears completion and we prepare
for our future as a solely underground operation. During this
period we have increased our mined production year on year (357,992
tonnes in H1 2015 against 343,242 tonnes in H1 2014) and, given
that our mill throughput was 296,959 tonnes, we have an additional
60,000 tonnes stockpiled for processing during H2 2015. This will
supplement mined production during H2 2015 as our open pit is
expected to close during this period. In the six months to June
2015, we have produced 8,823oz of gold at Sekisovskoye.
During H1 2015, we increased the contribution of ore mined from
the underground operation to 17% of total mined production, from
the 8% that was achieved in H1 2014. Our operational priority will
remain to continue to increase production from the underground mine
as we move towards our target of producing 100,000 ounces of gold
annually by 2018.
In November 2014, we released the results of the Competent
Person's Report on the underground development project for our
Sekisovskoye gold deposit, which was conducted by independent
consultants Venmyn Deloitte. The study validated our underground
development plans and estimated JORC compliant probable reserves of
2.26 million ounces at a gold grade of 4.09g/t and both indicated
and inferred resources of 5.14 million ounces.
The study originally envisaged sinking a shaft to access the
gold reserves, with the sinking of the shaft and all other capital
expenditure estimated at US$130 million. The study assumed an
increase in annual gold output to in excess of 100,000 ounces by
2018 and estimated operating costs of US$518/oz. The net present
value of this development project at a gold price of US$1,166/oz
and a discount rate of 9.3% was US$239 million. During H1 2015, we
have been optimising this work with a view to reducing as much as
possible the initial capital expenditure required to achieve our
target of 100,000 ounces of gold production by 2018.
To that end, we recently announced that we have reviewed all
development options for the mine and, rather than take the more
traditional shaft-sinking approach, we have made the decision to
access the reserve base by a decline. Decline haulage using
underground trucks is a commonly used and well proven method around
the world to extract ore from similar deposits to that at
Sekisovskoye. Importantly, according to preliminary estimates, we
believe that taking the decline approach could reduce our initial
capital investment by approximately 50%.
During H1 2015, there has been a successful capital raising of
GBP3.4 million (US$5.1m), through the placing of 123 million new
shares at a price of 2.8p/share, and we thank our existing and new
shareholders for their support and belief in our business. The net
proceeds of this placing will be used to fund working capital and
the expansion of our underground mine, which is underway.
In August 2015, we announced that GoldBridges received a
commitment from our key shareholder, African Resources, to provide
financing to cover the Company's capital requirements if necessary.
The Company is in detailed discussions with other parties regarding
potential financing for completion of the expansion, and will
continue these discussions. However, with African Resources'
commitment to fund some or all of the underground expansion
project, the Company has already intensified its underground
expansion activities and is confident in project development.
(MORE TO FOLLOW) Dow Jones Newswires
August 28, 2015 02:01 ET (06:01 GMT)
The Karasuyskoye operation is being progressed with detailed
planning and preparatory work being in progress. In 2014,
GoldBridges' subsidiary Altay Ken-Bait LLP won the tender for the
right to use the subsoil for gold exploration on the Karasuyskoye
site. The exploration plan has been undertaken and is currently
being assessed by Kazakhstan authorities prior to being further
approved by the Central Committee for Exploration and Development
under the Ministry of Investment and Development of Kazakhstan. We
expect the sub-soil use contract to be drawn up and approved in
full in H2 2015.
Since our underground and financing update, the decision was
taken by the Kazakh government to float the Kazakh Tenge and, in
doing so, this resulted in a devaluation of the currency by more
than 30%. We anticipate that this will result in significant
operational and capital cost savings.
Outlook
Given that GoldBridges has already announced that it will access
its underground reserves by a decline rather than a shaft, we are
now in the process of finalising our capital expenditure and
operating cost estimates. In lowering our initial capital
expenditure, we believe we have increased our financing options. We
will update the market as appropriate regarding potential sources
of capital.
We expect our current open pit reserves at Sekisovskoye to be
depleted during H2 2015. While we will continue to increase our
mined output from our underground operations, as a result we may
experience reduced gold output for 2015, when compared to 2014.
That said, we remain focused on the medium and long term future of
the Company, which is the significant underground reserves that we
are currently developing.
Operations report
H1 2015 Operational Overview
Sekisovskoye mining activity
H1 2015 H1 2014
Total ore mined, open pit (t) 297,406 317,085
Total ore mined, underground (t) 60,586 26,157
Total ore milled (t) 296,959 333,490
Open pit gold grade (g/t) 1.20 1.32
Underground gold grade (g/t) 2.46 2.97
Average gold grade (g/t) 1.27 1.42
Average silver grade (g/t) 2.09 2.15
Gold recovery (%) 73.2 83.4
Gold produced (oz) 8,823 12,694
Silver produced (oz) 11,630 17,380
In H1 2015, mining operations at Sekisovskoye performed in line
with expectations. Mining activities were focused on the higher
grade areas of the remaining open pit reserves and in expanding
output from the underground operations. Total mined ore from both
the open pit and underground mine in H1 2015 increased year on year
from 343,242 tonnes to 357,992 tonnes, an improvement of 4.3%.
Total ore milled was slightly lower at 296,959 tonnes (H1 2014:
333,490 tonnes).
Given that the Sekisovskoye open pit reserves are nearing
depletion, it was expected that the open pit gold grade would
decrease during 2015. This has been the case as the average open
pit gold grade was 1.2g/t Au, against 1.32g/t during H1 2014. While
the underground gold grade was below that of 2014 (H1 2015:
2.46g/t, H1 2014: 2.97g/t), this remains reflective of development
ore and will therefore vary in the near term. GoldBridges remains
confident that, once the underground mine is fully developed and
expanded, it can deliver ore to the Sekisovskoye mill with an
average gold grade of above 4g/t Au, as highlighted in the November
2014 Competent Person's Report (CPR).
At 296,959 tonnes, total ore milled was below total tonnes
mined, Sekisovskoye therefore has approximately 60,000 tonnes of
additional stockpiles to supplement its mined production in H2 2015
when it is expected that the open pit mine will close. At 73.2%,
gold recovery was lower than the 83.4% achieved in H1 2014 and
lower than normal for the Sekisovskoye processing plant. This was
due to variable grade and ore composition, and also reflected plant
improvement works undertaken during the period. Recoveries have
since returned to those which are more normal for the plant - above
80%.
As the proportions of sulphidic minerals in the ore and the
amount of gold in fine grains increases during underground mining,
the characteristics of the free gold generally improve, and some
changes were made to the ore process in the plant to reflect this.
The work was largely related to introducing a fuller gravity
circuit into the operational process and this work is currently
being completed. This processing route consists of jigs, washers
and centrifugal concentrators and refining this part of the process
allows the plant to recover the finer grained gold particles from
this circuit. This material will then be processed in line with the
Company's standard processing procedure. It is anticipated that the
recovery will be significantly increased as losses in the final
tailings will be reduced. Additionally, the technology will enable
the Company to reduce its consumption of key reagents, in
particular cyanide and calcium hypochlorite.
In H1 2015, cash production costs were US$682/oz, compared to
US$744/oz in H1 2015. While the grade was lower than previous
periods, unit costs were lower due to reduced processing tonnes and
tight operational cost control.
Underground expansion plans
Critical to H1 2015 has been the completion of the underground
expansion exploration programme where an additional 360 holes have
been added to the geological model. This has significantly
increased GoldBridges' understanding of the ore body since the
Venmyn Deloitte CPR. The primary objective of the exploration
programme has been to focus on targeting the high grade ore zones
previously identified and to better delineate them. The drilling
has now achieved a clear delineation of a number of these ore zones
allowing them to be converted to higher grade mining stopes. In
addition to this, a number of new ore zones have been identified
that with further drilling may also be converted to higher grade
ore zones.
The investment that GoldBridges has made in underground
expansion exploration over the past two years has fundamentally
changed the approach to mining the orebody. The opportunity has now
emerged to mine the majority of the ore body using a selective
mining method at a higher grade than that detailed in the Venmyn
Deloitte CPR.
This will have two key impacts. Firstly, mining the higher grade
ore should reduce the unit costs. Secondly, mining higher grade ore
should mean that fewer tonnes of ore need to be processed to
achieve the Company's objective of producing 100,000 ounces per
annum. Therefore, it is expected that the previously planned mill
expansion may not be necessary and this change would further reduce
the capital investment required for the underground expansion.
Also, the reduction in the annual ore tonnes mined should result in
a significant saving in processing and tailings disposal costs.
Given the prevailing market conditions, the Company is currently
using a gold price of between $1,000 and $1,100 per ounce in its
assumptions for the foreseeable future, and the underground
expansion will be based on this premise. As demonstrated by the
Venmyn Deloitte CPR, the deposit remains financially attractive at
gold prices far lower than this.
The recent success of the exploration drilling programme and the
change in the gold price has warranted an update of the geological
model and a review of the mining approach to the orebody. The key
objectives of this review have been to reduce the initial capital
costs and lower operating costs. As previously announced, it is the
intention to access the orebody using a decline from the bottom of
the open pit and capital required to access the ore body with a
decline is far lower than investing in a high capital cost
shaft.
The company believes that the current work programme underway is
critical in improving the overall financial attractiveness of the
project and in aligning it with the current investment climate.
This work is now well advanced and should be announced upon its
completion during H2 2015.
Exploration Drilling
The company continued to carry out exploration drilling
operations from underground mine workings using the Daimek drill
rig from the drilling chambers. The purpose of these operations is
to make the exploration grid denser in order to confirm the gold
grade in the extracted ore. Currently, the sub-level chambers are
being prepared for mining operations at the 320m and 250m levels.
The results of exploration operations fully confirm the gold grade
in the approved reserves of the deposit. During H1 2015, a total of
3,138m of diamond drill holes were completed (H1 2014: 7.230m)
Financial Review
H1 2015 Financial Review
Sekisovskoye produced 8,823 ounces of gold in H1 2015 (H1
2014:12,694 ounces). Gold sold during the period amounted to 10,440
ounces (H1 2014: 12,479ounces) at an average price of US$1,231/oz
(H1 2014: US$1,337/oz). The average price of sales achieved
includes revenues generated from silver sales in the period, which
are treated as incidental to gold production.
The cash cost (cost of sales excluding depreciation and
provisions) for the period was US$682/oz (H1 2014: US$744/oz). The
decrease in the cost of production is due to fewer tonnes being
milled and the Company's focus on operational cost control, in
particular, cost efficiency in buying raw materials.
GoldBridges has reported a gross profit of US$3.3 million for H1
2015, against US$5.1 million for H1 2014.
Capital expenditure totalled US$4.1 million in H1 2015 (H1 2014:
US$18.5 million). The main item of capital expenditure was the
development of the underground mine, and associated drilling costs
and equipment.
(MORE TO FOLLOW) Dow Jones Newswires
August 28, 2015 02:01 ET (06:01 GMT)
As of 30 June 2015, the Company has cash of US$2.3 million. Cash
generated from operations in H1 2015 was US$1.8 million. During the
period the Company has repaid two tranches of debt in relation to
the EBRD loan, and an amount of US$8.34 million remains outstanding
from the total US$10 million loan. The Company has sufficient cash
resources to operate at the current time and, as indicated in a
recent Company announcement, will be looking for financing
solutions to complete the underground mine development. As also
previously announced, the Company has received a commitment from
its key shareholder, African Resources, to provide financing to
cover the Company's capital requirements if necessary.
During the period the Company has made the decision to write
back the provision made against recoverable VAT, previously
provided for in the holding Company. It is expected that this will
have a positive impact on cash flows in H2 2015.
Aidar Assaubayev
Chief Executive Officer
28 August 2015
Consolidated income statement
Six months Six months Year ended
ended 30 June ended 30 31 December
2015 June 2014 2014
(restated,
(unaudited) unaudited) (audited)
Note US$'000 US$'000 US$'000
======================= ========= =============== ============ ===============
Revenue 12,846 16,683 35,177
Cost of sales (9,534) (11,593) (27,969)
Gross profit 3,312 5,090 7,208
Other operating
income - 1,162 1,141
Administrative
expenses (4,094) (3,286) (8,233)
Tailings dam
leak - 300 330
Listing expenses - - (702)
Impairments - - (1,214)
Impairments
reversed 737 - 2,227
Operating
(loss)/profit (45) 3,266 757
Finance income - 4 7
Foreign exchange
loss (173) (368) (1,418)
Finance Expense (244) (229) (331)
(Loss)/profit
before taxation (462) 2,673 (985)
Taxation credit 35 1,173 730
----------------------- --------- --------------- ------------ ---------------
(Loss)/profit
attributable
to equity
shareholders (427) 3,846 (255)
======================= ========= =============== ============ ===============
(Loss)/profit
per ordinary
share
Basic & diluted
(US cent) 2 (0.02c) 0.19 (0.01c)
The notes to the consolidated financial information at the
end of this section form part of this financial information
Consolidated statement of comprehensive
income
Year
Six months Six months ended
ended 30 June ended 30 31 December
2015 June 2014 2014
(restated,
(unaudited) unaudited) (audited)
US$000 US$000 US$000
(Loss)/profit for the period/year (427) 3,846 (255)
Currency translation differences
arising on translations
of foreign operations items
which will or may be reclassified
to profit or loss (931) (6,295) (9,310)
Currency translation differences
arising on translation of
foreign operations relating
to taxation - - 737
Total comprehensive loss
for the period/year attributable
to equity shareholders (1,358) (2,449) (8,828)
----------------------------------- ----------------------------- ------------------- -------------
The notes to the consolidated financial information at the end
of this section form part of this financial information
Consolidated statement of financial position
Six months
ended 30 Six months Year ended
June ended 30 31 December
2015 June 2014 2014
(restated
Notes (unaudited) unaudited) (audited)
US$'000 US$'000 US$'000
--------------------------- ------ -------------------- ------------ -------------
Non-current assets
Intangible asset 3 18,530 23,633 19,440
Property, plant and
equipment 4 63,154 54,230 61,238
Trade and other
receivables 1,336 3,040 2,553
Deferred tax asset 2,360 2,059 2,407
Restricted cash 249 253 260
---------------------------- ------ -------------------- ------------ -------------
85,629 83,215 85,898
--------------------------- ------ -------------------- ------------ -------------
Current assets
Inventories 11,590 6,913 10,882
Trade and other
receivables 9,783 8,475 10,260
Cash and cash equivalents 2,307 18,514 1,684
---------------------------- ------ -------------------- ------------ -------------
23,680 33,902 22,826
--------------------------- ------ -------------------- ------------ -------------
Total assets 109,309 117,117 108,724
Current liabilities
Current tax payable (463) (470) (475)
Trade and other
payables (14,635) (19,352) (15,725)
Other financial
liabilities (326) (351) (326)
Provisions (378) (363) (335)
Borrowings (3,333) (1,666) (3,333)
---------------------------- ------ -------------------- ------------ -------------
(19,135) (22,202) (20,194)
--------------------------- ------ -------------------- ------------ -------------
Net current assets 4,545 11,700 2,632
Non-current liabilities
Other financial
liabilities (438) (963) (709)
Provisions (7,472) (5,486) (7,400)
Borrowings (5,000) (8,333) (6,667)
---------------------------- ------ -------------------- ------------ -------------
(12,910) (14,782) (14,776)
--------------------------- ------ -------------------- ------------ -------------
Total liabilities (32,045) (36,984) (34,970)
---------------------------- ------ -------------------- ------------ -------------
Net assets 77,264 80,133 73,754
---------------------------- ------ -------------------- ------------ -------------
Equity
Called-up share
capital 5 3,886 3,702 3,702
Share premium 141,918 137,234 137,234
Merger reserve (282) (282) (282)
Currency translation
reserve (18,345) (15,136) (17,414)
Accumulated loss (49,913) (45,385) (49,486)
---------------------------- ------ -------------------- ------------ -------------
Total equity 77,264 80,133 73,754
---------------------------- ------ -------------------- ------------ -------------
(MORE TO FOLLOW) Dow Jones Newswires
August 28, 2015 02:01 ET (06:01 GMT)
The financial information was approved and authorised for issue
by the Board of Directors on 28 August 2015 and was signed on its
behalf by:
Aidar Assaubayev
Chief Executive Officer
The notes to the consolidated financial information at the end
of this section form part of this financial information
Consolidated Statement of changes
in equity
For the six months ended 30 June
2015
Share Share Merger Cumulative Retained Total
capital premium reserve translation deficit
reserve
Unaudited US$'000 US$'000 US'000 US$'000 US$'000 US$'000
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
At 1 January
2015 3,702 137,234 (282) (17,414) (49,486) 73,754
Loss for the
period - - - - (427) (427)
Exchange
differences
on
translating
foreign
operations - - - (931) - (931)
Total
comprehensive
loss for the
period - - - (931) (427) (1,358)
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
Shares issued 184 4,968 - - - 5,152
Issue costs - (284) - - - (284)
At 30 June
2015 3,886 141,918 (282) (18,345) (49,913) 77,264
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
For the six months ended 30 June
2014 (restated)
Share Share Merger Cumulative Retained Total
capital premium reserve translation deficit
reserve
Unaudited US$'000 US$'000 US'000 US$'000 US$'000 US$'000
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
At 1 January
2014 2,635 115,594 (282) (8,841) (49,231) 59,875
Loss for the
period - - - - 3,846 3,846
Exchange
differences
on
translating
foreign
operations - - - (6,295) - (6,295)
Total
comprehensive
loss for the
period - - - (6,295) 3,846 (2,449)
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
Shares issued 1,067 22,095 - - - 23,162
Issue costs - (455) - - - (455)
At 30 June
2014 3,702 137,234 (282) (15,136) (45,385) 80,133
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
For the year ended 31 December
2014
Share Share Merger Cumulative Retained Total
capital premium reserve translation deficit
reserve
Audited $'000 $'000 $'000 $'000 $'000 $'000
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
At 1 January
2014 2,635 115,594 (282) (8,841) (49,231) 59,875
Profit for the
year - - - - (255) (255)
Exchange
differences
on
translating
foreign
operations - - - (8,573) - (8,573)
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
Total
comprehensive
income for
the year - - - (8,573) (255) (8,828)
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
Shares issued 1,067 22,095 - - - 23,162
Issue costs - (455) - - - (455)
At 31 December
2014 3,702 137,234 (282) (17,414) (49,486) 73,754
--------------- ---------------- ------------------ ---------------- ------------------ ------------------ --------
The notes to the consolidated financial information at the end
of this section form part of this financial information
Consolidated cash flow statement
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2015 2014 2014
(restated,
(unaudited) unaudited) (audited)
Note US$'000 US$'000 US$'000
Net cash inflow/(outflow)
from operating
activities 8 1,867 (833) 5,601
--------------------------- ----- --------------- --------------- -------------
Investing activities
Interest received - - 7
Proceeds on disposals
of property, plant
and equipment - 577 -
Purchase of property,
plant and equipment (4,123) (5,639) (25,989)
Restricted cash 5 - (6)
Payment of costs
associated with provisions - - (651)
Net cash used in
investing activities (4,118) (5,062) (26,639)
Financing activities
Proceeds on issue
of shares 5,152 23,162 23,162
Issue costs (284) (455) (455)
Loans repaid (1,667) - (1,043)
Interest paid (327) (365) (750)
Net cash flow
from financing
activities 2,874 22,342 20,914
--------------------------- ----- --------------- --------------- -------------
Increase/(Decrease)
in cash and cash
equivalents 623 16,447 (124)
Foreign currency
translation - - (259)
--------------------------- ----- --------------- --------------- -------------
Cash and cash equivalents
at the beginning
of the year 1,684 2,067 2,067
Cash and cash equivalents
at end of the year 2,307 18,514 1,684
---------------------------------- --------------- --------------- -------------
The notes to the consolidated financial information at the end
of this section form part of this financial information
Notes to the consolidated financial information
1. Basis of preparation
General
GoldBridges Global Resources Plc is registered and domiciled in
England and Wales.
The interim financial results for the period ended 30 June 2015
are unaudited. The financial information contained within this
report does not constitute statutory accounts as defined by Section
434(3) of the Companies Act 2006.
This interim financial information of the Company and its
subsidiaries ("the Group") for the six months ended 30 June 2015
has been prepared on a basis consistent with the accounting
policies set out in the Group's consolidated annual financial
statements for the year ended 31 December 2014. It has not been
audited, does not include all of the information required for full
annual financial statements, and should be read in conjunction with
the Group's consolidated annual financial statements for the year
ended 31 December 2014. The 2014 annual report and accounts, as
filed with the Registrar of Companies, received an unqualified
opinion from the auditors.
(MORE TO FOLLOW) Dow Jones Newswires
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The financial information is presented in US Dollars and has
been prepared under the historical cost convention.
The same accounting policies, presentation and method of
computation are followed in this consolidated financial information
as were applied in the Group's latest annual financial statements
except that in the current financial year, the Group has adopted a
number of revised Standards and Interpretations. However, none of
these have had a material impact on the Group.
In addition, the IASB has issued a number of IFRS and IFRIC
amendments or interpretations since the last annual report was
published. It is not expected that any of these will have a
material impact on the Group.
Going concern
The Group's operations are cash generative and the current cash
position is sufficient to cover ongoing operating and
administrative expenditure for the next 12 months.
During the period the Company secured an additional US$5.1m
(gross), equity investment. The Directors consider this together
with income from the Group's producing assets to be sufficient to
cover the expenses of running the Group's business for the
foreseeable future.
In terms of financing the underground development, post the
period end, we announced that GoldBridges has received a commitment
from our key shareholder, African Resources, to provide financing
to cover the Company's capital requirements if necessary. The
Company is in detailed discussions with various other parties
regarding potential financing for completion of the expansion, and
is keen to continue these discussions. However, with African
Resources' commitment to fund some or all of the underground
expansion project capital expenditure, the Company has already
intensified its underground expansion activities and is confident
in project development.
The Company has therefore adopted the going concern basis in the
preparation of these financial statements.
Notes to the consolidated financial information
Directors Responsibility Statement and Report on Principal Risks
and Uncertainties
Responsibility statement
The Board confirms to the best of their knowledge:
(a) The condensed set of financial statements have been prepared
in accordance with IAS 35 Interim Financial Reporting as adopted by
the EU;
(b) The interim management report includes a fair review of the
information required by:
- DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
set of financial statements; and a description of the principal
risks and uncertainties for the remaining six months of the year;
and
- DTR 4.2.8R of the Disclosures and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
the period; and any changes in the related party transactions
described in the last annual report that could do so.
The Company's management has analysed the risks and
uncertainties and has in place control systems that monitor daily
the performance of the business via key performance indicators.
Certain factors are beyond the control of the Company such as the
fluctuations in the price of gold and possible political upheaval.
However, the Company is aware of these factors and tries to
mitigate these as far as possible. In relation to the gold price
the Company is pushing to achieve a lower cost base in order to
minimise possible downward pressure of gold prices on
profitability. In addition, it maintains close relationships with
the Kazakhstan authorities in order to minimise bureaucratic delays
and problems.
Risks and uncertainties identified by the Company are set out on
page 8 and 9 of the 2014 Annual Report and Accounts and are
reviewed on an ongoing basis. There have been no significant
changes in the first half of 2014 to the principal risks and
uncertainties as set out in the 2014 Annual Report and Accounts and
these are as follows:
- Fiscal changes in Kazakhstan
- Not being awarded the subsoil production mining licence for Karasuyskoye
- No access to capital / funding for Sekisovskoye or Karasuyskoye
- Commodity price risk
- Currency risk
- Changes to mining code in Kazakhstan
- Reliance on operating in one country
- Reliant on one operating mine
- Cost (capex and operating cost) inflation
- Technical difficulties associated with developing the underground mine at Sekisovskoye
- Technical difficulties associated with increasing the Sekisovskoye processing plant
- Exploration work being underwhelming at Karasuyskoye
- Failure to achieve production estimates
- Russian political issues
2. (Loss)/profit per ordinary share
Basic (loss)/profit per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
The calculation of basic and diluted earnings per share is based
upon the retained loss for the financial of US$427,000, (H1 2014
profit US$3,846,000).
The weighted average number of ordinary shares for calculating
the basic profit/(loss) per share and diluted loss per share for
the period are as follows:
Six months Six months Year ended
ended 30 ended 30 31 December
June 2015 June 2014 2014
(unaudited) (unaudited) (audited)
The basic weighted average
number of ordinary shares
in issue during the
period 2,261,225,463 2,038,802,240 2,115,470,650
---------------------------- -------------- -------------- --------------
The (loss)/profit for
the period attributable
to equity shareholders
(US$'000s (427) 3,846 (255)
---------------------------- -------------- -------------- --------------
There are no dilutive instruments.
3. Intangible assets
US$'000
-------------------------------- -------
Cost
-------------------------------- -------
1 January 2014 27,500
-------------------------------- -------
Adjustments* (2,532)
-------------------------------- -------
Currency translation adjustment (414)
-------------------------------- -------
30 June 2014 24,554
-------------------------------- -------
Currency translation adjustment (3,818)
-------------------------------- -------
31 December 2014 20,736
-------------------------------- -------
Currency translation adjustment (429)
-------------------------------- -------
30 June 2015 20,307
-------------------------------- -------
Accumulated amortisation
-------------------------------- -------
1 January 2014 343
-------------------------------- -------
Charge for the period 578
-------------------------------- -------
30 June 2014 921
-------------------------------- -------
Charge for the period 425
-------------------------------- -------
Currency translation adjustment (50)
-------------------------------- -------
31 December 2014 1,296
-------------------------------- -------
Charge for the period 526
-------------------------------- -------
Currency translation adjustment (45)
-------------------------------- -------
30 June 2015 1,777
-------------------------------- -------
30 June 2014 23,633
-------------------------------- -------
31 December 2014 19,440
-------------------------------- -------
30 June 2015 18,530
-------------------------------- -------
The adjustment relates to the recovery of VAT reclaimable on the
purchase price of the geological data. The intangible assets relate
to the historic geological information pertaining to the
Karasuyskoye Ore Fields. The Ore Fields are located in close
proximity to the current open pit and underground mining operations
of Sekisovskoye.
In January 2015, the Company was awarded the subsoil user rights
to Karasuyskoye by the Ministry of Investments and Development in
Kazahstan. The final subsoil contract terms and conditions,
including the new financial incentives offered specifically to the
Company through the state programme on forced industrial-innovative
development (SFIID), has been not awarded however the subsoil user
rights awarded gives the Company a pre-emptive right to obtain the
subsoil contract. The subsoil user rights allows the Company to
perform further exploration work in order to complete a wok
programme which will need to be submitted to the authorities for
approval.
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The Ministry requires 12 to 18 months from the date of issue of
the subsoil user rights to perform due diligence checks on the
information provided by the Company during the tendering process
and to prepare the terms of the subsoil contract including any
grants, tax reliefs, environmental protection requirements etc.
Management believes that the final contract will be awarded based
on ongoing consultation with the Ministry, compliance with local
legal and tax regulations and the submission of an appropriate
mining programme.
4. Property, plant and equipment
Equipment,
Mining Freehold fixtures Plant,
Properties land and and machinery Assets under
and leases buildings fittings and vehicles construction Total
US$000 US$000 US$000 US$000 US$000 US$000
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
Cost
1 January 2014 10,682 16,494 15,927 8,132 20,933 72,168
Additions 131 - 4,456 - 13,943 18,530
Disposals - (569) (59) - - (628)
Transfers 472 - - - (472) -
Currency translation
adjustment (1,537) (2,714) (2,796) (1,040) (3,503) (11,590)
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
30 June 2014 9,748 13,211 17,528 7,092 30,901 78,480
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
Additions - 58 856 1302 8,569 10,785
Disposals - - (958) - (131) (1,089)
Transfers 7,211 2,028 1,400 (339) (10,300) -
Currency translation
adjustment (418) 137 26 (14) 375 106
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
31 December 2014 16,541 15,434 18,852 8,041 29,414 88,282
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
Additions 119 616 1,964 - 1,869 4,568
Disposals - - (4) - (25) (29)
Transfers - 255 64 - (319) -
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
Currency translation
adjustment (172) (324) (372) (164) 273 (759)
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
30 June 2015 16,488 15,981 20,504 7,877 31,212 92,062
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
Accumulated depreciation
1 January 2014 3,552 5,501 12,174 5,075 - 26,302
364
Charge for the period 280 618 999 +53 - 2,261
Disposals - (62) - - - (62)
Currency translation
adjustment (573) (897) (1,960) (821) - (4,251)
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
30 June 2014 3,259 5,160 11,213 4,618 - 24,250
Charge for the period 152 860 1,576 501 - 3,089
Disposals (988) 574 (414)
Currency translation
adjustment 21 26 967 (895) 119
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
31 December 2014 3,432 6,046 12,768 4,798 - 27,044
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
Charge for the period 200 671 1,115 498 - 2,484
Disposals - - 2 - - 2
Transfers - - 15 - - 15
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
Currency translation
adjustment (71) (131) (266) (169) - (637)
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
30 June 2015 3,561 6,586 13,634 5,127 - 28,908
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
Net Book Values
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
1 January 2014 7,130 10,993 3,753 3,057 20,933 45,866
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
30 June 2014 6,489 8,051 6,315 2,474 30,901 54,230
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
31 December 2014 13,109 9,388 6,084 3,243 29,414 61,238
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
30 June 2015 12,927 9,395 6,870 2,750 31,212 63,154
------------------------------ ----------- ---------- ---------- --------------- --------------- -------------
The additions in the period principally relate the continuing
works associated with the underground mine in relation to
development of the declines, ventilation shafts and other
associated works.
5. Share capital
Number US$000
1 January 2014 1,563,370,130 1,684
Issued during the year
Share placement 647,972,000 1,067
31 December 2014 2,211,342,130 3,702
Issued during the year
Share placement 123,000,000 184
30 June 2015 2,334,342,130 3,886
------------------------------ -------------- -------
On 18 April 2015 there was a placing of 123,000,000 new Ordinary
Shares at a price of 2.80 pence per Ordinary Share. The net
proceeds of the placing will be used for general working capital
purposes.
6. Reserves
A description and purpose of reserves is given below:
Reserve Description and purpose
Share capital Amount of the contributions made
by shareholders in return for
the issue of shares.
Share premium Amount subscribed for share capital
in excess of nominal value.
Merger Reserve Reserve created on application
of merger accounting under a previous
GAAP.
Currency translation Gains/losses arising on re-translating
reserve the net assets of overseas operations
into US Dollars.
Other reserves Fair value of share options granted
net of amounts transferred to
retained earnings on exercise
or lapse of options.
Accumulated Cumulative net gains and losses
losses recognised in the consolidate
statement of financial position.
7. Related party transactions
Remuneration of key management personnel
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