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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Consol. Gen.Min | LSE:CGM | London | Ordinary Share | GB00B0T4LB03 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 24.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMCGM
RNS Number : 1334U
China Goldmines PLC
11 October 2010
CHINA GOLDMINES PLC
("China Goldmines", "CGM", the "Company", or the "Group")
PRELIMINARY FINANCIAL RESULTS
FOR THE YEAR ENDED 30 JUNE 2010
Highlights
+---+--------------------------------------------------------------+
| - | Cash position as at year end USD$22.0m |
+---+--------------------------------------------------------------+
| - | Net assets for the Group amounted to USD$22.0m |
+---+--------------------------------------------------------------+
| - | Net loss for the year amounted to USD$2.2m |
+---+--------------------------------------------------------------+
| - | The Group has no long term debts or borrowings. |
+---+--------------------------------------------------------------+
| - | Disposal of 100% interest in Westralian Resources (WES) Pty |
| | Ltd on 29th Sept 2009. |
+---+--------------------------------------------------------------+
| - | USD$23.4m net proceeds received by the Company on disposal |
| | of WES. |
+---+--------------------------------------------------------------+
| - | The Company has no further interest in mining operations |
| | within China or elsewhere. |
+---+--------------------------------------------------------------+
| - | The Company is regarded as an investing company under the |
| | AIM Rules for Companies. |
+---+--------------------------------------------------------------+
Post Year End:
+---+--------------------------------------------------------------+
| - | The guarantee and indemnity associated with the disposal |
| | expired on 29 September 2010, without any antecedent |
| | breaches claimed by Cosmos. |
+---+--------------------------------------------------------------+
| - | As notified on 30 September 2010 the Company's shares have |
| | been suspended from trading on AIM. |
+---+--------------------------------------------------------------+
For further information contact:
+-----------------------------------+-----------------------------------+
| China Goldmines plc | |
+-----------------------------------+-----------------------------------+
| Frank Vanspeybroeck (CEO) | +61 8 6216 5200 |
+-----------------------------------+-----------------------------------+
| Marinko Vidovich (CFO) | +61 8 6216 5200 |
| | |
+-----------------------------------+-----------------------------------+
| Brewin Dolphin Ltd (Nomad) | |
+-----------------------------------+-----------------------------------+
| Alex Dewar | +44 (0)131 529 0276 |
| (Nominated Adviser) | |
| | |
| Threadneedle Communications | +44 (0)20 7653 9855 |
| Laurence Read/ Beth Harris | |
+-----------------------------------+-----------------------------------+
CHAIRMAN'S REVIEW
This is my first year end review having been appointed to the Board of China
Goldmines, in December 2009.
In August 2009, prior to my appointment, the Board made the decision to dispose
of the Guanzhuang Gold Project which had been hampered by site security issues
and the requirement for significant further investment. The disposal was
effected in September 2009 via the sale of Westralian Resources Pty Ltd, the
Company's gold mining subsidiary, to Cosmos Castle Management Limited for a net
consideration of USD$23.4m.
As at 30 June 2010, the Group and Company had net assets of USD$22.0m.
In January 2010, and in conjunction with the Board, I undertook a comprehensive
strategic review to determine how best to exploit the Company's strong cash
position for the benefit of shareholders. Following this review, the Board has
established a rigorous framework by which it will assess future, potential
investment opportunities. CGM will continue to work alongside its advisors to
identify opportunities within the mining and oil and gas sectors as well as
sectors outside of natural resources, providing key parameters are met.
The criteria for new projects are as follows:
+--+--+------------------------------------------------------------+
| -| Resource propositions: |
+--+---------------------------------------------------------------+
| | ?| Producing or near production assets |
+--+--+------------------------------------------------------------+
| | ?| Third party resource validation |
+--+--+------------------------------------------------------------+
| | ?| Medium to low political risk |
+--+--+------------------------------------------------------------+
| | | |
+--+--+------------------------------------------------------------+
| -| Non-resource propositions: |
+--+---------------------------------------------------------------+
| | ?| Revenue generating |
+--+--+------------------------------------------------------------+
| | ?| Profitable or near to profit |
+--+--+------------------------------------------------------------+
| | ?| Market leader or recognised as one of the market leaders |
+--+--+------------------------------------------------------------+
| | ?| High barriers to entry |
+--+--+------------------------------------------------------------+
| | ?| Strong UK/European market position |
+--+--+------------------------------------------------------------+
As announced on 10 September 2010, the Company is continuing to evaluate
investment propositions but acknowledges that it was unable to obtain
shareholder approval of any particular proposition in sufficient time to
complete an acquisition prior to the 29 September 2010 deadline under the AIM
Rules. As a result trading of the Company's shares on AIM were suspended on the
30 September 2010. The Company will remain subject to the AIM Rules for
Companies and any decision regarding a new project specific acquisition will
remain subject to shareholder approval. In the event that the Company is unable
to complete an acquisition by 31 March 2011 the admission of its ordinary shares
to AIM will be cancelled.
A key objective for the year, following the disposal of the Guanzhuang Gold
Project, was to protect the Company's assets from claims under the guarantee and
warranties that were given to Cosmos Castle Management Limited as part of the
disposal of Hunan Westralian Resources Pty Ltd. To this end it was gratifying
that the Group received $2.2m of deferred consideration in January against
payments incurred in connection with the disposal, and that the guarantee and
warranties have expired without any claim being made against them.
I will be providing an update to shareholders in the near future, by which time
we hope to be able to have identified suitably attractive opportunities to put
to shareholders for their approval. In the event that the Board are unable to
identify a suitable investment opportunity then a return of capital will be
proposed to shareholders.
I would like to thank both the Board and our shareholders for their ongoing
commitment and support to the Company.
Robert Adair
Non-Executive Chairman
CORPORATE OVERVIEW
The Company's proposed investing strategy is to create shareholder value by
identifying and acquiring holdings in natural resources, minerals and/or metals
companies and/or assets which the Directors believe are undervalued. The Company
expects to be an active investor but it will depend on the terms of each
transaction before any such investment is made.
The Company will seek to acquire interests in natural resources, minerals and/or
metals projects such as (without limit) exploration permits and licences, mining
and production licences or processing and development projects, which may be
achieved through acquisitions, partnerships or joint venture arrangements. Such
investments may result in CGM acquiring the whole or part of a company or
project. CGM's investments may take the form of equity, joint venture debt,
convertible instruments, licence rights, or other financial instruments as the
Directors deem appropriate.
The Directors believe that their collective experience in the areas of natural
resources, acquisitions, corporate and financial management together with the
opinion of consultant experts in the evaluation of natural resources, minerals
or metals projects, will assist them in the identification and assessment of
suitable opportunities. Where the Directors consider it necessary suitably
qualified persons will be commissioned to prepare reports on the projects being
considered by the Company. The Directors may undertake the initial project
assessments themselves with additional independent technical advice as required.
If the strategy is approved, there is no limit on the number or location of
projects into which the Company may invest.
DIRECTORS' REPORT
The Directors present their preliminary accounts of China Goldmines plc for the
year ended 30 June 2010.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+--------------------------------------+--+------+--+----------+-+-----------+----------+
| | | Year Ended | Year Ended |
| | | 30 June | 30 June 2009 |
| | Note | 2010 | $ |
| | | $ | |
+--------------------------------------+---------+-------------+------------------------+
| | | | |
+--------------------------------------+---------+-------------+------------------------+
| Continuing operations | | | |
+--------------------------------------+---------+-------------+------------------------+
| Revenue | | - | - |
+--------------------------------------+---------+-------------+------------------------+
| Salaries and employee benefits | | (250,628) | (230,889) |
+--------------------------------------+---------+-------------+------------------------+
| Office expenses and professional | | (779,018) | (295,258) |
| fees | | | |
+--------------------------------------+---------+-------------+------------------------+
| Consulting expenses | | (623,152) | (715,588) |
+--------------------------------------+---------+-------------+------------------------+
| Travel and accommodation expenses | | - | (21,249) |
+--------------------------------------+---------+-------------+------------------------+
| Operating loss | | (1,652,798) | (1,262,984) |
+--------------------------------------+---------+-------------+------------------------+
| | | | |
+--------------------------------------+---------+-------------+------------------------+
| Other gains and losses | 1 | (1,026,579) | (11,978,782) |
+--------------------------------------+---------+-------------+------------------------+
| Financial income | | 71,892 | 337,712 |
+--------------------------------------+---------+-------------+------------------------+
| Loss before tax | | (2,607,485) | (12,904,054) |
+--------------------------------------+---------+-------------+------------------------+
| Tax | | - | - |
+--------------------------------------+---------+-------------+------------------------+
| Loss for the year from continuing | | (2,607,485) | (12,904,054) |
| operations | | | |
+--------------------------------------+---------+-------------+------------------------+
| | | | |
+--------------------------------------+---------+-------------+------------------------+
| Discontinued operations | | | |
+--------------------------------------+---------+-------------+------------------------+
| Loss for the year from discontinued | 11 | (289,314) | (23,299,807) |
| operations | | | |
+--------------------------------------+---------+-------------+------------------------+
| Loss for the year | | (2,896,799) | (36,203,861) |
+--------------------------------------+---------+-------------+------------------------+
| | | | |
+--------------------------------------+---------+-------------+------------------------+
| Other comprehensive (loss)/income | | | |
+--------------------------------------+---------+-------------+------------------------+
| Exchange differences on translation | | (4,094,887) | 5,681,438 |
| of foreign operations | | | |
+--------------------------------------+---------+-------------+------------------------+
| Exchange gain recognised on disposal | | (147,712) | - |
| of foreign operations | | | |
+--------------------------------------+---------+-------------+------------------------+
| Other comprehensive (loss)/income | | (4,242,599) | 5,681,438 |
| for the year (net of tax) | | | |
+--------------------------------------+---------+-------------+------------------------+
| Total comprehensive loss for the | | (7,139,398) | (30,522,423) |
| year | | | |
+--------------------------------------+---------+-------------+------------------------+
| | | | |
| Loss for the year attributable to: | | | |
+--------------------------------------+---------+-------------+------------------------+
| Owners of China Goldmines plc | | (2,259,527) | (36,203,861) |
| Non-controlling interests | | (637,272) | - |
+--------------------------------------+---------+-------------+------------------------+
| | | (2,896,799) | (36,203,861) |
+--------------------------------------+---------+-------------+------------------------+
| | | | |
| Total comprehensive loss for the | | | |
| year attributable to: | | | |
+--------------------------------------+---------+-------------+------------------------+
| Owners of China Goldmines plc | | (6,509,035) | (30,522,423) |
| Non-controlling interests | | (630,363) | - |
+--------------------------------------+---------+-------------+------------------------+
| | | (7,139,398) | (30,522,423) |
| | | | |
+--------------------------------------+---------+-------------+------------------------+
| | | | | |
| | | 2010 | 2009 | |
| Earnings per share | | Cents | Cents | |
+-----------------------------------------+---------+------------+-----------+----------+
| | | | | |
+-----------------------------------------+---------+------------+-----------+----------+
| From continuing operations | | | | |
+-----------------------------------------+---------+------------+-----------+----------+
| Basic and diluted loss per share | 2 | (5.38) | (26.62) | |
+-----------------------------------------+---------+------------+-----------+----------+
| | | | | | | | |
+--------------------------------------+--+------+--+----------+-+-----------+----------+
+------------------------------------+------+----------+----------+
| From continuing and discontinued | | | |
| operations | | | |
+------------------------------------+------+----------+----------+
| Basic and diluted loss per share | 2 | (4.66) | (74.68) |
+------------------------------------+------+----------+----------+
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
+-------------------------------------+------+--------------+--------------+
| | | Year | Year |
| | | Ended | Ended |
| |Note | 30 June | 30 June |
| | | 2010 | 2009 |
| | | $ | $ |
+-------------------------------------+------+--------------+--------------+
| | | | |
| Non-current Assets | | | |
+-------------------------------------+------+--------------+--------------+
| Intangible assets | 3 | - | 5,898 |
+-------------------------------------+------+--------------+--------------+
| Mining properties | 4 | - | 21,385,440 |
+-------------------------------------+------+--------------+--------------+
| Property, plant and equipment | 5 | - | 2,350,920 |
+-------------------------------------+------+--------------+--------------+
| Trade and other receivables | 6 | - | 319,760 |
+-------------------------------------+------+--------------+--------------+
| | | - | 24,062,018 |
+-------------------------------------+------+--------------+--------------+
| | | | |
| Current Assets | | | |
+-------------------------------------+------+--------------+--------------+
| Inventories | 7 | - | 1,246,749 |
+-------------------------------------+------+--------------+--------------+
| Trade and other receivables | 8 | 276,201 | 151,082 |
+-------------------------------------+------+--------------+--------------+
| Cash and cash equivalents | | 21,974,606 | 6,192,290 |
+-------------------------------------+------+--------------+--------------+
| | | 22,250,807 | 7,590,121 |
+-------------------------------------+------+--------------+--------------+
| Total Assets | | 22,250,807 | 31,652,139 |
+-------------------------------------+------+--------------+--------------+
| | | | |
| Current Liabilities | | | |
+-------------------------------------+------+--------------+--------------+
| Trade and other payables | | (234,636) | (3,139,086) |
+-------------------------------------+------+--------------+--------------+
| Total Liabilities | | (234,636) | (3,139,086) |
+-------------------------------------+------+--------------+--------------+
| Net Assets | | 22,016,171 | 28,513,053 |
+-------------------------------------+------+--------------+--------------+
| | | | |
| Equity | | | |
+-------------------------------------+------+--------------+--------------+
| Share capital | 9 | 919,975 | 919,975 |
+-------------------------------------+------+--------------+--------------+
| Share premium account | | 66,169,804 | 66,169,804 |
+-------------------------------------+------+--------------+--------------+
| Foreign exchange reserve | | - | 4,249,508 |
+-------------------------------------+------+--------------+--------------+
| Reverse acquisition reserve | | - | 61,344 |
+-------------------------------------+------+--------------+--------------+
| Retained earnings | | (45,073,608) | (42,875,425) |
+-------------------------------------+------+--------------+--------------+
| Equity attributable to equity | | 22,016,171 | 28,525,206 |
| holders of the parent company | | | |
+-------------------------------------+------+--------------+--------------+
| Non-controlling interests | | - | (12,153) |
+-------------------------------------+------+--------------+--------------+
| Total Equity | | 22,016,171 | 28,513,053 |
+-------------------------------------+------+--------------+--------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+------------------+---------+------------+-------------+-------------+--------------+--------------+--------+----------+--------------+
| | Attributable to Members of China Goldmines | | |
| | | | |
+------------------+--------------------------------------------------------------------------------+--------+-------------------------+
| | | Share | Foreign | Reverse | | | Non- Controlling | |
| | Share | Premium | Exchange | Acquisition | Retained | | Interest | |
| | Capital | Reserve | Reserve | Reserve | Earnings | | $ | |
| | $ | $ | $ | $ | $ | Total | | Total |
| | | | | | | | | Equity |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| | 919,975 | 66,169,804 | (1,431,930) | 61,344 | (6,671,564) | 59,047,629 | (12,153) | 59,035,476 |
| Balance at 30 | | | | | | | | |
| June 2008 | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| | - | - | - | - | (36,203,861) | (36,203,861) | - | (36,203,861) |
| Loss for the | | | | | | | | |
| year | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| Other | | | | | | | | |
| comprehensive | | | | | | | | |
| income: | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| Exchange | - | - | 5,681,438 | - | - | 5,681,438 | - | 5,681,438 |
| differences on | | | | | | | | |
| translation of | | | | | | | | |
| foreign | | | | | | | | |
| operations | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| Total | | | 5,681,438 | | | | - | |
| comprehensive | - | - | | - | (36,203,861) | (30,522,423) | | (30,522,423) |
| loss for the | | | | | | | | |
| year | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| Balance at 30 | 919,975 | 66,169,804 | 4,249,508 | 61,344 | (42,875,425) | 28,525,206 | (12,153) | 28,513,053 |
| June 2009 | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| Loss for the | - | - | - | - | (2,259,527) | (2,259,527) | (637,272) | (2,896,799) |
| year | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| Other | | | | | | | | |
| comprehensive | | | | | | | | |
| loss: | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| Exchange | - | - | (4,101,796) | - | - | (4,101,796) | 6,909 | (4,094,887) |
| differences on | | | | | | | | |
| translation of | | | | | | | | |
| foreign | | | | | | | | |
| operations | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| Exchange gain | - | - | (147,712) | - | - | (147,712) | - | (147,712) |
| recognised on | | | | | | | | |
| disposal of | | | | | | | | |
| foreign | | | | | | | | |
| operations | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| Total | - | - | (4,249,508) | - | (2,259,527) | (6,509,035) | (630,363) | (7,139,398) |
| comprehensive | | | | | | | | |
| loss for the | | | | | | | | |
| year | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| Reverse | - | - | - | (61,344) | 61,344 | - | - | - |
| acquisition loss | | | | | | | | |
| recognised on | | | | | | | | |
| disposal of GRV | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| De-recognition | - | - | - | - | - | - | 642,516 | 642,516 |
| of | | | | | | | | |
| non-controlling | | | | | | | | |
| interest on sale | | | | | | | | |
| of Westralian | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| Balance at 30 | 919,975 | 66,169,804 | - | - | (45,073,608) | 22,016,171 | - | 22,016,171 |
| June 2010 | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+-------------------+--------------+
| | | | | | | | | | |
+------------------+---------+------------+-------------+-------------+--------------+--------------+--------+----------+--------------+
CONSOLIDATED STATEMENT OF CASH FLOWS
+----------+------------------------------+----------+--------------+--------------+
| | Notes | Year Ended | Year Ended |
| | | 30 June 2010 | 30 June 2009 |
| | | $ | $ |
+-----------------------------------------+----------+--------------+--------------+
| | | | |
| | Operating Loss | (1,652,799) | (1,262,984) |
+----------+-----------------------------------------+--------------+--------------+
| | Adjustments for: | | |
+----------+-----------------------------------------+--------------+--------------+
| | Discontinued operations | (289,314) | (23,299,802) |
+----------+-----------------------------------------+--------------+--------------+
| | Depreciation | 768,274 | 19,883,957 |
+----------+-----------------------------------------+--------------+--------------+
| | Net foreign exchange movements | (720,389) | (1,624,224) |
+----------+-----------------------------------------+--------------+--------------+
| | Operating cash flows before movements | | |
| | in working capital net of effects of | (1,894,228) | (6,303,053) |
| | discontinued operations | | |
+----------+-----------------------------------------+--------------+--------------+
| | Decrease/(increase) in inventory | 1,246,749 | (741,999) |
+----------+-----------------------------------------+--------------+--------------+
| | (Increase)/decrease in trade and | (1,315) | 484,198 |
| | other receivables | | |
+----------+-----------------------------------------+--------------+--------------+
| | (Decrease)/increase in trade and | (3,206,284) | 1,422,962 |
| | other payables | | |
+----------+-----------------------------------------+--------------+--------------+
| | | | |
| | Net cash outflow from operating | (3,855,078) | (5,137,892) |
| | activities | | |
+----------+-----------------------------------------+--------------+--------------+
| | | |
| Investing activities | | |
+----------------------------------------------------+--------------+--------------+
| Proceeds on sale of subsidiaries, net of cash | 23,381,753 | - |
| disposed23 | | |
+----------------------------------------------------+--------------+--------------+
| Interest received | 71,892 | 337,712 |
+----------------------------------------------------+--------------+--------------+
| Payments for licences, exploration and | (3,299,985) | (8,940,449) |
| development expenditure | | |
+----------------------------------------------------+--------------+--------------+
| Payments for environmental deposits | - | (14,907) |
+----------------------------------------------------+--------------+--------------+
| Purchases of property, plant and equipment | (80,696) | (1,529,522) |
+----------------------------------------------------+--------------+--------------+
| | | |
| Net cash inflow/(outflow) from investing | 20,072,964 | (10,147,166) |
| activities | | |
+----------------------------------------------------+--------------+--------------+
| | | |
| Net increase/(decrease) in cash and cash | 16,217,886 | (15,285,058) |
| equivalents | | |
+----------------------------------------------------+--------------+--------------+
| Cash and cash equivalents at beginning of year | 6,192,290 | 25,147,806 |
+----------------------------------------------------+--------------+--------------+
| Movement in foreign exchange rate | (435,570) | (3,670,458) |
+----------------------------------------------------+--------------+--------------+
| | | |
| Cash and cash equivalents at end of year | 21,974,606 | 6,192,290 |
+----------------------------------------------------+--------------+--------------+
| | | | | |
+----------+------------------------------+----------+--------------+--------------+
AN EXTRACT OF APPLICATION NOTES
Basis of Preparation
The financial information set out in this announcement does not constitute the
Company's statutory accounts as defined in section 343 of the Companies Act 2006
for the years ended 30 June 2010 and 2008. Except as shown below, the financial
information for the year ended 30 June 2010 has been prepared using the
accounting policies which are consistent with those adopted in the audited
accounts for the year ended 30 June 2009. The financial information for the year
ended 30 June 2009 is derived from the statutory accounts for that year, which
have been delivered to the Registrar of Companies.
The auditors have reported on the 2009 accounts; their report was unqualified
and did not contain a statement under 498(2) or (3) of the Companies Act 2006.
Whilst the auditors have not yet reported on the financial statements for the
year ended 30 June 2010, they anticipate issuing a qualified report which will
contain statements under section 498(2) and (3) of the Companies Act 2006 due to
a limitation in audit scope arising from lack of access to accounting records
following the disposal of Westralian Resources Pty Ltd. The impact of this
limitation of scope is that the auditors were unable to obtain sufficient audit
evidence as to the completeness and categorisation of certain expenses included
in the consolidated statement of comprehensive income and consolidated statement
of cash flows, being mining and exploration expenses amounting to $159,304,
employee costs of $123,116, depreciation charge of $16,701, administration and
other income of $2,464, foreign exchange losses of $2,889,921, loss attributable
to the non-controlling interest of GBP637,272 and the loss on disposal of the
subsidiary. The statutory accounts for the year ended 30 June 2010 will be
finalised on the basis of the financial information presented by the Directors
in this preliminary announcement and will be delivered to the Registrar of
Companies following the Company's Annual General Meeting. The financial
information set out in this announcement was approved by the Board of Directors
on 8 October 2010.
Summary of significant accounting policies
Basis of accounting
The financial statements have been prepared on the going concern basis, and a
historic cost basis.
The company adopted IAS1 (revised 2007) Presentation of Financial Statements
effective for annual periods beginning on or after 1 January 2009. The impact of
this standard is purely presentational.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and enterprises controlled by the Company (its subsidiaries) made up
to 30 June ach year. Control is achieved where the Company has the power to
govern the financial and operating policies of a subsidiary.
Non-controlling interests in the net assets of consolidated subsidiaries are
identified separately from the group's equity therein. Non-controlling interests
consist of the amount of those interests at the date of the original business
combination and the non-controlling interests' share of changes in equity since
the date of the combination. Losses applicable to the non-controlling party's
interests in excess of the non-controlling interests' interest in the
subsidiary's equity are allocated against the interests of the group except to
the extent that the non-controlling interests has a binding obligation and is
able to make additional investment to cover the losses.
The results of subsidiaries acquired or disposed of during the period are
included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
All intra-group transactions and balances are eliminated on consolidation.
1. Other gains and losses
+----------------------------------------+-------------+--------------+
| | Year | Year |
| | ended | ended |
| | 30 June | 30 June |
| | 2010 | 2009 |
| | $ | $ |
+----------------------------------------+-------------+--------------+
| Foreign exchange (losses) | (1,026,579) | (11,978,782) |
+----------------------------------------+-------------+--------------+
Taxation
The tax charge represents the sum of current and deferred tax.
Current tax payable is based on taxable profits for the year. Taxable profits
differ from net profits as reported in the income statement because it excludes
items that are taxable or deductible in other years and items that are not
taxable or deductible. The group's liability for current tax is calculated using
tax rates that have been enacted or substantively enacted at the balance sheet
date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the liability method. Deferred tax
liabilities are recognised for all temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable profits will be
available against which temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability or the asset is realised.
2. Earnings per share
(a) Basic and diluted earnings per share
+--------------------+----------------+----------+----------+
| | | Year | Year |
| | | Ended | Ended |
| | | 30 June | 30 June |
| | | 2010 | 2009 |
| | | Cents | Cents |
+--------------------+----------------+----------+----------+
| From continuing operations | (5.38) | (26.62) |
| attributable to the ordinary equity | | |
| holders of the company | | |
+-------------------------------------+----------+----------+
| From discontinued operations | 0.72 | (48.06) |
+-------------------------------------+----------+----------+
| Total basic and diluted earnings | | |
| per share attributable to the | (4.66) | (74.68) |
| ordinary equity holders of the | | |
| company | | |
+--------------------+----------------+----------+----------+
(b) The calculation of the basic and diluted earnings per share is based on
the following data:
+--------------------------+--+-------------+-+------------+----------+--------------+
| | | Year Ended | Year |
| | | 30 June 2010 | Ended |
| | | $ | 30 June |
| | | | 2009 |
| | | | $ |
+--------------------------+----------------+-------------------------+--------------+
| Loss from continuing operations | (2,607,485) | (12,904,054) |
| Earnings for the purposes of basic and | | |
| diluted earnings per share being net | | |
| profit attributable to equity holders of | | |
| the parent | | |
+-------------------------------------------+-------------------------+--------------+
| | (2,259,527) | (36,203,861) |
| Loss from continuing and discontinued | | |
| operations | | |
| Earnings for the purposes of basic and | | |
| diluted earnings per share being net | | |
| profit attributable to equity holders of | | |
| the parent | | |
+-------------------------------------------+-------------------------+--------------+
| | | |
+-------------------------------------------+-------------------------+--------------+
| | | Number | Number |
+-----------------------------+---------------+------------+-------------------------+
| Number of shares | | | |
+-----------------------------+---------------+------------+-------------------------+
| Weighted average number of ordinary shares | 48,475,411 | 48,475,411 |
| for the purposes of basic and diluted | | |
| earnings per share | | |
+---------------------------------------------+------------+-------------------------+
| | | | | | | |
+--------------------------+--+-------------+-+------------+----------+--------------+
There are no dilutive instruments.
3. Intangible assets
+---------------------------------------+-----------+-----------+-----------+
| | Business | | |
| | | Software | Total |
| | Licences | $ | $ |
| | Held | | |
| | $ | | |
+---------------------------------------+-----------+-----------+-----------+
| Cost | | | |
+---------------------------------------+-----------+-----------+-----------+
| At 30 June 2008 | 441,394 | 507,796 | 949,190 |
+---------------------------------------+-----------+-----------+-----------+
| Additions | - | 41,310 | 41,310 |
+---------------------------------------+-----------+-----------+-----------+
| Exchange differences | - | (79,623) | (79,623) |
+---------------------------------------+-----------+-----------+-----------+
| At 30 June 2009 | 441,394 | 469,483 | 910,877 |
+---------------------------------------+-----------+-----------+-----------+
| Disposals on sale of subsidiaries | (441,394) | (469,483) | (910,877) |
+---------------------------------------+-----------+-----------+-----------+
| At 30 June 2010 | - | - | - |
+---------------------------------------+-----------+-----------+-----------+
| | |
| Accumulated Amortisation | |
+---------------------------------------------------+-----------------------+
| At 30 June 2008 | (29,426) | (214,790) | (244,216) |
+---------------------------------------+-----------+-----------+-----------+
| Charge for the year | (14,713) | (280,666) | (295,379) |
+---------------------------------------+-----------+-----------+-----------+
| Impairment | (397,255) | - | (397,255) |
+---------------------------------------+-----------+-----------+-----------+
| Exchange differences | - | 31,871 | 31,871 |
+---------------------------------------+-----------+-----------+-----------+
| At 30 June 2009 | (441,394) | (463,585) | (904,979) |
+---------------------------------------+-----------+-----------+-----------+
| Charge for the year | - | (5,898) | (5,898) |
+---------------------------------------+-----------+-----------+-----------+
| Disposals on sale of subsidiaries | 441,394 | 469,483 | 910,877 |
+---------------------------------------+-----------+-----------+-----------+
| At 30 June 2010 | - | - | - |
+---------------------------------------+-----------+-----------+-----------+
| | | | |
| Carrying Amount | | | |
+---------------------------------------+-----------+-----------+-----------+
| At 30 June 2010 | - | - | - |
+---------------------------------------+-----------+-----------+-----------+
| At 30 June 2009 | - | 5,898 | 5,898 |
+---------------------------------------+-----------+-----------+-----------+
4. Mining properties
+---------------------+---------+----------+-----------+-+-----------+-+------------+-+--------------+
| | Land | | Mine | | |
| | Comp. | Explor. | Develop. | Mining | |
| | Costs | Expend. | Expend. | Licences | Total |
| | $ | $ | $ | $ | $ |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| At 30 June 2008 | 126,912 | 2,604,801 | 3,645,980 | 26,001,641 | 32,379,334 |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Additions | 534,523 | 2,082,265 | 5,341,995 | - | 7,958,783 |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Exchange | 522 | (113,316) | (405,843) | 106,930 | (411,707) |
| differences | | | | | |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| At 30 June 2009 | 661,957 | 4,573,750 | 8,582,132 | 26,108,571 | 39,926,410 |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Additions | - | 1,055,878 | 997,358 | - | 2,053,236 |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Exchange | 885 | 13,578 | 5,365 | 35,643 | 55,471 |
| differences | | | | | |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Disposals on sale | (662,842) | (5,643,206) | (9,584,855) | (26,144,214) | (42,035,117) |
| of subsidiaries | | | | | |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| At 30 June 2010 | - | - | - | - | - |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| | | | | | |
| Accumulated | | | | | |
| Amortisation and | | | | | |
| Impairment | | | | | |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| At 30 June 2008 | (6,732) | - | - | - | (6,732) |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Charge for the year | (145,869) | - | - | - | (145,869) |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Impairment | - | (4,573,750) | (8,582,132) | (5,232,459) | (18,388,341) |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Exchange | (28) | - | - | - | (28) |
| differences | | | | | |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| At 30 June 2009 | (152,629) | (4,573,750) | (8,582,132) | (5,232,459) | (18,540,970) |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Charge for the year | (54,882) | - | - | - | (54,882) |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Impairment | (32,010) | (681,382) | - | - | (713,392) |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Exchange | (243) | - | - | - | (243) |
| differences | | | | | |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| Disposals on sale | 239,764 | 5,255,132 | 8,582,132 | 5,232,459 | 19,309,487 |
| of subsidiaries | | | | | |
+---------------------+--------------------+-------------+-------------+--------------+--------------+
| At 30 June 2010 | - | - | - | - | - |
+---------------------+---------+----------------------+-------------+--------------+----------------+
| Carrying Amount | | | | | |
+---------------------+---------+----------------------+-------------+--------------+----------------+
| At 30 June 2010 | - | - | - | - | - |
+---------------------+---------+----------------------+-------------+--------------+----------------+
| At 30 June 2009 | 509,328 | - | - | 20,876,112 | 21,385,440 |
+---------------------+---------+----------------------+-------------+--------------+----------------+
| | | | | | | | | | |
+---------------------+---------+----------+-----------+-+-----------+-+------------+-+--------------+
5. Property Plant and Equipment
+------------+-----------+--------------+-----------+-----------+-+-------------+
| | | | Motor | Furniture, | Total |
| | | Construction | vehicles | fittings | $ |
| | | in progress | $ | and | |
| | | $ | | equipment | |
| | | | | $ | |
+------------+-----------+--------------+-----------+-------------+-------------+
| Cost | | | | | |
+------------+-----------+--------------+-----------+-------------+-------------+
| At 30 June 2008 | - | 132,152 | 1,428,755 | 1,560,907 |
+------------------------+--------------+-----------+-------------+-------------+
| Additions | | 208,497 | 185,847 | 1,114,896 | 1,509,240 |
+------------+-----------+--------------+-----------+-------------+-------------+
| Exchange differences | - | (532) | (96,095) | (96,627) |
+------------------------+--------------+-----------+-------------+-------------+
| At 30 June 2009 | 208,497 | 317,467 | 2,447,556 | 2,973,520 |
+------------------------+--------------+-----------+-------------+-------------+
| Additions/transfers | (208,497) | - | 289,193 | 80,696 |
+------------------------+--------------+-----------+-------------+-------------+
| Exchange differences | - | 433 | (638) | (205) |
+------------------------+--------------+-----------+-------------+-------------+
| Disposal on sale of | - | (317,900) | (2,736,111) | (3,054,011) |
| subsidiaries | | | | |
+------------------------+--------------+-----------+-------------+-------------+
| At 30 June 2010 | - | - | - | - |
+------------------------+--------------+-----------+-------------+-------------+
| | | | |
| Accumulated depreciation | | | |
+---------------------------------------+-----------+-----------+---------------+
| At 30 June 2008 | - | (16,781) | (172,398) | (189,179) |
+------------------------+--------------+-----------+-----------+---------------+
| Charge for the year | - | (16,127) | (228,601) | (244,728) |
+------------------------+--------------+-----------+-----------+---------------+
| Exchange differences | - | 58 | (14,299) | (14,241) |
+------------------------+--------------+-----------+-----------+---------------+
| Impairment | - | - | (174,452) | (174,452) |
+------------------------+--------------+-----------+-----------+---------------+
| | - | (32,850) | (589,750) | (622,600) |
| At 30 June 2009 | | | | |
+------------------------+--------------+-----------+-----------+---------------+
| Charge for the year | - | (5,030) | (240,164) | (245,194) |
+------------------------+--------------+-----------+-----------+---------------+
| Exchange differences | - | (48) | (55,987) | (56,035) |
+------------------------+--------------+-----------+-----------+---------------+
| Disposal on sale of | - | 37,928 | 885,901 | 923,829 |
| subsidiaries | | | | |
+------------------------+--------------+-----------+-----------+---------------+
| At 30 June 2010 | - | - | - | - |
+------------------------+--------------+-----------+-----------+---------------+
| | | | | |
| Carrying amount | | | | |
+------------------------+--------------+-----------+-----------+---------------+
| At 30 June 2010 | - | - | - | - |
+------------------------+--------------+-----------+-----------+---------------+
| At 30 June 2009 | 208,497 | 284,617 | 1,857,806 | 2,350,920 |
+------------------------+--------------+-----------+-----------+---------------+
| | | | | | | |
+------------+-----------+--------------+-----------+-----------+-+-------------+
No assets are pledged as security for liabilities.
6. Trade and other receivables
Amounts due after more than one year
+--------------------+--+-------------+---------+----------+
| | | | 30 June | 30 June |
| | | | 2010 | 2009 |
| | | | $ | $ |
+--------------------+--+-------------+---------+----------+
| | | | | |
| Environmental | | | - | 319,760 |
| remediation | | | | |
| deposits | | | | |
+--------------------+--+-------------+---------+----------+
| | | | - | 319,760 |
+--------------------+--+-------------+---------+----------+
7. Inventories
+----------------------+-----+--------+---------+-----------+
| | | | 30 June | 30 June |
| | | | 2010 | 2009 |
| | | | $ | $ |
+----------------------+-----+--------+---------+-----------+
| Raw materials and | | | - | 596,274 |
| stores - at cost | | | - | 82,908 |
| Work in progress - | | | - | 567,567 |
| at cost | | | | |
| Finished goods - at | | | | |
| cost | | | | |
+----------------------+-----+--------+---------+-----------+
| | | | - | 1,246,749 |
+----------------------+-----+--------+---------+-----------+
8. Trade and other receivables
Amounts due within one year
+--------------------+----+------------+---------+----------+
| | | | 30 June | 30 June |
| | | | 2010 | 2009 |
| | | | $ | $ |
+--------------------+----+------------+---------+----------+
| | | | | |
| Other debtors | | | 276,201 | 146,621 |
+--------------------+----+------------+---------+----------+
| Prepayments and accrued | | - | 4,461 |
| income | | | |
+-------------------------+------------+---------+----------+
| | | | 276,201 | 151,082 |
+--------------------+----+------------+---------+----------+
9. Share Capital
+--------------------------------------+-----------+-----------+
| | 30 | 30 June |
| | June | 2009 |
| | 2010 | $ |
| | $ | |
+--------------------------------------+-----------+-----------+
| Authorised: | | |
+--------------------------------------+-----------+-----------+
| 55,000,000 ordinary shares of | 1,043,678 | 1,043,678 |
| GBP0.01 each | | |
+--------------------------------------+-----------+-----------+
| (2009: 55,000,000 ordinary shares of | | |
| GBP0.01 each) | | |
+--------------------------------------+-----------+-----------+
| | | |
+--------------------------------------+-----------+-----------+
| Issued and fully paid: | | |
+--------------------------------------+-----------+-----------+
| 48,475,411 ordinary shares of | 919,975 | 919,975 |
| GBP0.01 each | | |
+--------------------------------------+-----------+-----------+
(2009: 48,475,411 ordinary shares of GBP0.01 each)
10. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
Transactions between the Group and other related parties are disclosed below.
Trading transactions
During the year, Group companies entered into the following transactions with
related parties who are not members of the Group:
+-----------------------------+---------+---------+------+------+
| | Purchase of | Amounts |
| | goods / | owed to |
| | services | related |
| | | parties |
+-----------------------------+-------------------+-------------+
| | 2010 | 2009 | 2010 | 2009 |
| | $ | $ | $ | $ |
+-----------------------------+---------+---------+------+------+
| Bowlane Nominees Ltd | 326,535 | 343,200 | - | - |
+-----------------------------+---------+---------+------+------+
| Jinan Limited | 288,000 | 288,000 | - | - |
+-----------------------------+---------+---------+------+------+
| Metallurgical Management | 4,282 | 32,800 | - | - |
| Services (Pty) Ltd | | | | |
+-----------------------------+---------+---------+------+------+
| Wildewood Limited | - | 19,000 | - | - |
+-----------------------------+---------+---------+------+------+
| Linq Corporate Pty Ltd | 374,682 | 113,200 | - | - |
+-----------------------------+---------+---------+------+------+
Bowlane Nominees Ltd and Immo Services (WA) Pty Ltd are companies that provide
managerial services to the Group, on behalf of Frank Vanspeybroeck, a director
of China Goldmines plc. $326,535 (2009: $343,200) was paid in accordance with
his agreed service agreement.
Jinan Limited is a company that provides financial and accounting services to
the Group, on behalf of Marinko Vidovich, a director of China Goldmines plc.
$288,000 (2009: $288,000) was paid in accordance with his agreed service
agreement.
Metallurgical Management Services (Pty) Ltd is a company that provides
metallurgical consultancy services to the Group. Evan Kirby is a director of
this company and China Goldmines plc. $4,282 (2009: $32,800) was paid in
accordance with commercial rates.
Linq Corporate Pty Ltd, a company of which Mr Donner is a director, has provided
in the period corporate consultancy services utilising a number of Linq
Corporate employees amounting to $374,682 (2009 : $113,200).
All services were provided under normal commercial terms.
The amounts outstanding are unsecured and will be settled in cash. No guarantees
have been given or received.
Remuneration of key management personnel
The emoluments of the Directors, who are the key management personnel of the
Group, were $155,038 (2009: $253,000). These do not include the amounts paid in
consultancy fees noted above.
11. Disposals
(a) Description
On 26 August 2009 the Company's 100% owned subsidiary, Global Resource Ventures
Limited ("GRV"), signed a Share Purchase Agreement with Cosmos Castle Management
Limited, a company incorporated in the British Virgin Islands, to sell all of
the issued securities of Westralian Resources Pty Ltd ("Westralian"). Settlement
of the sale occurred on 29 September 2009, from which date Westralian and its
80% owned subsidiary Hunan Westralian Mining Co., Ltd ceased to be consolidated
into the Group. GRV will receive total net cash consideration of USD$23,381,753
for the sale of Westralian. At balance date there is still USD$100,000 being
held on trust by Hunan Westralian Mining/Cosmos to which the Company is now
entitled to as a result of the warranty period expiring.
On 12 May 2010 GRV was placed in voluntary administration, from which date GRV
ceased to be consolidated into the Group. Prior to GRV being liquidated all
outstanding loan balances were forgiven by China Goldmines, which resulted in
the writing off of all remaining loan balances. An amount of USD$125,000 has
been recognised as a receivable being the amount expected to be released by the
administrator on completion of the liquidation process.
Financial information relating to the discontinued operations for the period to
the respective dates of disposal are set out below.
(b) Financial performance and cashflow information
+-------------------------------+-------+-------------+--------------+
| | | Year Ended | Year |
| | | 30 June | Ended |
| | | 2010 | 30 June |
| | | $ | 2009 |
| | | | $ |
+-------------------------------+-------+-------------+--------------+
| Revenue | | - | 396,740 |
+-------------------------------+-------+-------------+--------------+
| Expenses | | (3,821,611) | (25,014,607) |
+-------------------------------+-------+-------------+--------------+
| Operating loss | | (3,821,611) | (24,617,867) |
+-------------------------------+-------+-------------+--------------+
| Foreign exchange gains | | 3,936,175 | 1,290,452 |
+-------------------------------+-------+-------------+--------------+
| Financial income | | 3,647 | 27,608 |
+-------------------------------+-------+-------------+--------------+
| Profit/(loss) before income | | 118,211 | (23,299,807) |
| tax | | | |
+-------------------------------+-------+-------------+--------------+
| Income tax expense | | - | - |
+-------------------------------+-------+-------------+--------------+
| Profit/(loss) after income | | | |
| tax expense of discontinued | | 118,211 | (23,299,807) |
| operation | | | |
+-------------------------------+-------+-------------+--------------+
| | | | |
| | | | |
| | | | |
+-------------------------------+-------+-------------+--------------+
| Loss on deconsolidation of | | (407,525) | - |
| subsidiaries before income | | | |
| tax | | | |
+-------------------------------+-------+-------------+--------------+
| Income tax expense | | - | - |
+-------------------------------+-------+-------------+--------------+
| Loss on deconsolidation of | | | |
| subsidiaries after income tax | | (407,525) | - |
| expense | | | |
+-------------------------------+-------+-------------+--------------+
| | | | |
+-------------------------------+-------+-------------+--------------+
| Loss of discontinued | | (289,314) | (23,299,807) |
| operation | | | |
+-------------------------------+-------+-------------+--------------+
| | | | |
+-------------------------------+-------+-------------+--------------+
| Loss from discontinued | | | |
| operation is attributable | | 347,958 | (23,299,807) |
| to:- | | (637,272) | - |
| Owners of China Goldmines | | | |
| plc | | | |
| Non-controlling interests | | | |
+-------------------------------+-------+-------------+--------------+
| | | (289,314) | (23,299,807) |
+-------------------------------+-------+-------------+--------------+
| | | | |
+-------------------------------+-------+-------------+--------------+
| Net cash outflow from | | (2,315,633) | (3,143,811) |
| operating activities | | | |
+-------------------------------+-------+-------------+--------------+
| Net cash inflow/(outflow) | | | |
| from investing activities | | 1,204,967 | (651,478) |
| (2010 includes a net inflow | | | |
| of $23,381,753 from the sale | | | |
| of subsidiaries) | | | |
+-------------------------------+-------+-------------+--------------+
| Net (decrease) in cash | | | |
| generated by the discontinued | | (1,110,666) | (3,795,289) |
| operation | | | |
+-------------------------------+-------+-------------+--------------+
(c) Details of the sale of subsidiaries
+---------------------------------+----------+--------------+----------+
| | | Year Ended | Year |
| | | 30 June | Ended |
| | | 2010 | 30 June |
| | | $ | 2009 |
| | | | $ |
+---------------------------------+----------+--------------+----------+
| Consideration received or | | | |
| receivable: | | | |
+---------------------------------+----------+--------------+----------+
| Net cash (after costs of | | 23,992,217 | - |
| disposal) on sale of Westralian | | | |
+---------------------------------+----------+--------------+----------+
| Total disposal consideration | | 23,992,217 | - |
+---------------------------------+----------+--------------+----------+
| | | | |
+---------------------------------+----------+--------------+----------+
| Carrying amount of net assets | | (23,748,645) | - |
| sold of Westralian | | | |
+---------------------------------+----------+--------------+----------+
| Carrying amount of net assets | | (156,291) | - |
| disposed of GRV | | | |
+---------------------------------+----------+--------------+----------+
| Recognition of foreign exchange | | 5,152,296 | - |
| reserve on sale of Westralian | | | |
+---------------------------------+----------+--------------+----------+
| Recognition of foreign exchange | | | |
| reserve on deconsolidation of | | (5,004,586) | - |
| GRV | | | |
+---------------------------------+----------+--------------+----------+
| Recognition of non-controlling | | (642,516) | - |
| interest on sale of Westralian | | | |
+---------------------------------+----------+--------------+----------+
| Loss on sale and | | (407,525) | - |
| deconsolidation before income | | | |
| tax | | | |
+---------------------------------+----------+--------------+----------+
| Income tax expense | | - | - |
+---------------------------------+----------+--------------+----------+
| | | | |
| Loss on sale and | | (407,525) | - |
| deconsolidation after income | | | |
| tax | | | |
+---------------------------------+----------+--------------+----------+
At 30 June 2009 the carrying value of Mining Properties and other consolidated
assets were impaired to reflect the disposal of the subsidiaries. A total
write-down of $18,388,341 was recognised against the Mining Properties of the
disposed subsidiaries, with the amount reported below being net of this
impairment.
The carrying amounts of assets and liabilities at the date of
sale/deconsolidation were:
+---------------------------------------+----------+----------+-------------+----------+
| | | | Date of Sale / |
| | | | Deconsolidation |
| | | | $ |
+---------------------------------------+----------+----------+------------------------+
| Sale of Westralian: | | | | |
| Cash | | | 485,938 | |
+---------------------------------------+----------+----------+-------------+----------+
| Trade and other receivables | | | 442,047 | |
+---------------------------------------+----------+----------+-------------+----------+
| Plant and equipment | | | 2,130,182 | |
+---------------------------------------+----------+----------+-------------+----------+
| Mining properties | | | 22,725,630 | |
+---------------------------------------+----------+----------+-------------+----------+
| Total assets | | | 25,783,797 | |
+---------------------------------------+----------+----------+-------------+----------+
| | | | | |
+---------------------------------------+----------+----------+-------------+----------+
| Trade and other liabilities | | | (2,035,152) | |
+---------------------------------------+----------+----------+-------------+----------+
| Total liabilities | | | (2,035,152) | |
+---------------------------------------+----------+----------+-------------+----------+
| | | | | |
+---------------------------------------+----------+----------+-------------+----------+
| Net assets of Westralian | | | 23,748,645 | |
+---------------------------------------+----------+----------+-------------+----------+
| | | | | |
| Liquidation of GRV: | | | | |
| Cash | | | 148,355 | |
+---------------------------------------+----------+----------+-------------+----------+
| Trade and other receivables | | | 9,996 | |
+---------------------------------------+----------+----------+-------------+----------+
| Total assets | | | 158,351 | |
+---------------------------------------+----------+----------+-------------+----------+
| | | | | |
| Trade and other liabilities | | | (2,060) | |
+---------------------------------------+----------+----------+-------------+----------+
| Total liabilities | | | (2,060) | |
+---------------------------------------+----------+----------+-------------+----------+
| | | | | |
| Net assets of GRV | | | 156,291 | |
+---------------------------------------+----------+----------+-------------+----------+
12. Events After the Balance Sheet Date
The guarantee and indemnity associated with the disposal expired on 28 September
2010, without any antecedent breaches claimed by Cosmos.
The Company has no further interest in mining operations within China or
elsewhere, and as such is regarded as an investment company under the AIM
listing rules for companies. Furthermore, under such listing rules, the company
was required to complete an acquisition or an implementation of investment
strategy no later than 28 September 2010. The company was unable to implement
an investing strategy and accordingly, the company's shares on AIM have been
suspended. If the company was required to complete an acquisition by 31 March
2011, the admission of its shares to AIM will be cancelled.
Availability of this announcement
Copies of this announcement will be available from the Company's registered
office, Sandgate House, 102 Quayside, Newcastle-Upon-Tyne, NE1 3DX, England, and
on the Company's website, www.chinagoldmines.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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