We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Avocet Mining Plc | LSE:AVM | London | Ordinary Share | GB00BZBVR613 | 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% | 13.10 | 11.40 | 14.80 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMAVM
RNS Number : 8170R
Avocet Mining PLC
31 October 2013
Refinancing & Unaudited Interim Results for
the quarter ended 30 September 2013
Refinancing & Tri-K
-- Avocet poised to become a fully unhedged gold producer;
-- US$63 million medium term loan facility with Ecobank Burkina Faso drawn down - no hedging required;
-- Ecobank loan term of five years at interest rate of 8% per annum;
-- Remaining Macquarie debt repaid during the quarter - entire Macquarie hedge position to be bought back shortly;
-- Tri-K feasibility study: - work to date confirms technical viability of low cash cost operation; - mining licence application process commenced; - government approval received for environmental and social impact assessment; - key Koulékoun exploration licence valid for additional two years; and
- work underway to optimise project, including capital and operating costs, to determine project economics.
Q3 results
-- Revised Inata life of mine plan announced in August, with 36% increase in recovered ounces over the eight year mine life;
-- Quarterly gold production of 30,987 ounces (Q2: 31,245 ounces); -- Total cash costs (including royalties) of US$1,195 per ounce (Q2: US$1,238 per ounce);
-- Average realised gold price of US$1,121 per ounce (including 18,000 ounces delivered into the hedge position at US$938 per ounce); and
-- Loss before tax includes negative impact of accelerated hedge delivery and change in the mark-to-market of hedge position during the quarter (in aggregate approximately US$14m)
Quarter Quarter Quarter Quarter ended ended ended ended 30 September 30 September 30 June 30 March KEY FINANCIAL METRICS 2013 2012 2013 2013 Period Unaudited Unaudited Unaudited Unaudited =========================================== ============== ============== =========== =========== Gold production (ounces) 30,987 33,067 31,245 30,481 =========================================== ============== ============== =========== =========== Average realised gold price (US$/oz) 1,121 1,506 1,304 1,422 =========================================== ============== ============== =========== =========== Total cash production cost (US$/oz) 1,195 937 1,238 1,169 =========================================== ============== ============== =========== =========== (Loss)/profit before tax and exceptional items (US$000) (14,507) (323) (8,422) 181 =========================================== ============== ============== =========== =========== (Loss)/profit before tax (US$000) (25,265) (323) (20,907) (44,792) =========================================== ============== ============== =========== =========== (Loss)/earnings per share (US cents per share) (13.33) (0.46) (9.48) (20.30) =========================================== ============== ============== =========== =========== EBITDA (US$000) (6,124) 6,281 844 6,748 =========================================== ============== ============== =========== =========== Net cash (used in)/generated by operating activities (US$000) 5,033 1,411 (10,615) (15,374) =========================================== ============== ============== =========== ===========
David Cather, Chief Executive Officer, commented:
"As an unhedged gold producer, the Company will be able to offer shareholders full exposure to the gold spot price on Inata's production. It has long been our goal to become an unhedged gold producer and negotiation of the Ecobank loan will enable us to achieve this target, as well as the flexibility to transfer surplus funds to Avocet for corporate purposes. In the year to date we have delivered the revised life of mine plan for Inata and are close to completing the Tri-K feasibility study, both of which were critical to our refinancing efforts. Our immediate priorities are to complete the hedge buy back, continue to deliver operational improvements at Inata and obtain the Exploitation Permit at Tri-K."
Management Conference Call
The Company will host a conference call for investors and analysts at 9am (UK) on Thursday
31 October 2013.
Dial in details are as follows:
UK: 0800 6940257 Norway: 21563013 Alternative number: +44 (0)1452 555 566 Conference ID: 82678864
A recording of the conference call will also be made available on the Avocet website later on the same day.
FOR FURTHER INFORMATION PLEASE CONTACT
Avocet Mining Pelham Bell Pottinger J.P. Morgan Cazenove Arctic Securities SEB Enskilda PLC Financial PR Corporate Broker Financial Financial Adviser Consultants Adviser ============= ===================== ========================= ================= ================== David Cather, Daniel Thöle Michael Wentworth-Stanley Arne Wenger Fredrik Cappelen CEO Petter Bakken Mike Norris, FD Rob Simmons, IR ------------- --------------------- ------------------------- ----------------- ------------------ +44 20 7766 +47 2101 7676 +44 20 7861 3232 +44 20 7742 4000 3100 +47 2100 8500
NOTES TO EDITORS
Avocet Mining PLC ('Avocet' or the 'Company') is a gold mining and exploration company listed on the London Stock Exchange (ticker: AVM.L) and the Oslo Børs (ticker: AVM.OL). The Company's principal activities are gold mining and exploration in West Africa.
In Burkina Faso the Company owns 90% of the Inata Gold Mine. The deposit at Inata currently comprises a Mineral Resource of 4.7 million ounces and an Ore Reserve of 0.9 million ounces. The Inata Gold Mine poured its first gold in December 2009 and produced 135,189 ounces of gold in 2012.
Other assets in Burkina Faso include eight exploration permits surrounding the Inata Gold Mine in the broader Bélahouro region. The most advanced of these projects is Souma, some 20 kilometres from the Inata Gold Mine, where there is a Mineral Resource estimate of 0.8 million ounces.
In Guinea, Avocet owns 100% of the Tri-K Project in the north east of the country. Drilling to date has outlined a Mineral Resource of over 3.0 million ounces, and in October 2013 the Company announced a maiden Ore Reserve on the oxide portion of the orebody, which is suitable for heap leaching, of 0.5 million ounces. Development of a CIL processing plant to exploit the remaining 2.4 million ounces will be considered once the heap leach feasibility study has been completed.
About Ecobank Group
Ecobank Transnational Corporation ('Ecobank'), a public limited liability company, is a leading pan-African bank with operations in 33 countries across the continent, and was established as a bank holding company in 1985 under a private sector initiative spearheaded by the Federation of West African Chambers of Commerce and Industry with the support of ECOWAS. The Group also has a licenced operation in Paris and representative offices in Beijing, Dubai, Johannesburg, London and Luanda. Ecobank's headquarters are in Lomé, Togo. As at the end 2012, the bank had assets of US$20 billion and revenue of close to US$2 billion.
For more information, please visit www.ecobank.com
CHIEF EXECUTIVE OFFICER'S REVIEW
The Company today announces that it has closed, and drawn down, a 30 billion FCFA (US$63 million) medium term loan facility with Ecobank Burkina Faso ("Ecobank"). The loan amount is 30 billion Francs de la Communauté Financière d'Afrique ("FCFA"), which is the legal currency of Burkina Faso and the loan amount is currently equivalent to approximately US$63 million. The Ecobank loan has been provided to the Company's 90% subsidiary Société des Mines de Bélahouro SA ('SMB'), which owns the Inata mine. Through this loan, the Company intends shortly to remove all future hedge commitments, and is therefore poised to become an unhedged gold producer.
The Ecobank facility has a five year term, bears an interest rate of 8% per annum and is secured against certain of the assets of SMB. The first repayment will be made in November 2013 and equal monthly repayments of 631 million FCFA (US$1.3 million), comprising interest and principal, will continue for the 60 month duration of the loan. The facility requires that an amount equal to two months' payments, 1.3 billion FCFA (US$2.6 million), be held as a debt service reserve account. Subject to the debt service reserve account requirement, there are no restrictions on SMB's use of loan proceeds or cash flow generated, including the transfer of funds from SMB to Avocet for corporate purposes. The Ecobank loan facility has no hedge requirement.
The Company's decision to exit the hedge will provide Avocet shareholders with full exposure to the gold price for Inata's presently defined mine life of eight years. The Ecobank loan, which has been drawn down in full, and removal of the hedge, which is expected to occur shortly, will provide more flexibility than under the previous Macquarie Bank Limited ('MBL') facility, including the ability to pass surplus funds up to Avocet for corporate purposes. The final hedge settlement is expected to total approximately US$47 million. This is equivalent to 111,980 ounces bought back at US$938 per ounce. Of the US$47 million total buy back, US$12 million will be satisfied from cash previously held by Macquarie as restricted funds, with the remaining US$35 million provided by the Ecobank loan proceeds. Details of the hedge buy back will be announced to the market following its completion.
During the quarter the Company made the final US$5.0 million repayment of the Inata project finance facility with MBL and all obligations to MBL will be satisfied once the Company removes its hedge commitments.
As announced on 9(th) October 2013, third quarter gold production of 30,987 ounces was below expectations for the period as a result of lower than planned grades and mill availability. The lower grades in the third quarter partly reflected reduced availability of the mobile fleet, which caused delays in waste stripping to access higher grade ore. Processing during the quarter continued to target oxide ore sources prior to commissioning of the carbon blanking circuit, and as a result recoveries increased to 89%.
Following the lower than expected production in the third quarter, the Company also released revised full year guidance of 125,000-130,000 ounces for 2013, which takes into account the above production issues and their impact on the fourth quarter. The reduced production in H2 2013 means that cash costs per ounce in the second half of 2013 are likely to be similar to those seen in H1 2013.
Regrettably, during the quarter an employee at Inata suffered a lost time injury ('LTI') arising from a hand injury, ending a run for the Company of 517 days without an LTI.
Work on the feasibility study at Tri-K, which was submitted to the government of Guinea in September, has confirmed the technical viability of a low cash cost mining and heap leach operation on the oxide portion of the resources. The Company is in discussions with the Guinean Government with regards to an exploitation permit at Tri-K, and in conjunction with this process the Company has announced a maiden Ore Reserve on the oxide portion of the orebody of 7.9 million tonnes at 1.89 g/t Au for 480,000 contained ounces. The government has now approved the Environmental and Social Impact Assessment and work is underway to optimise the project, including the capital and operating cost estimates, to determine the project's economics.
INATA OPERATIONAL REVIEW
Gold production and cash costs
2012 2013 Q1 Q2 Q3 Q4 FY 2012 Q1 Q2 Q3 YTD 2013 Ore mined (k tonnes) 578 610 559 906 2,653 817 971 591 2,379 Waste mined (k tonnes) 7,240 6,689 7,565 8,980 30,474 9,127 8,700 6,547 24,374 Total mined (k tonnes) 7,818 7,299 8,124 9,886 33,127 9,944 9,673 7,138 26,753 Ore processed (k tonnes) 608 651 643 654 2,556 616 620 620 1,856 Average head grade (g/t) 2.36 1.82 1.62 2.03 1.95 1.65 1.84 1.73 1.74 Process recovery rate 87% 86% 91% 83% 87% 82% 87% 89% 86% ------- ------- ------- ------- ========= ------- ------- ------- --------- Gold Produced (oz) 38,296 32,917 33,067 30,909 135,189 30,481 31,245 30,987 92,713 Cash costs (US$/oz) Q1 Q2 Q3 Q4 FY 2012 Q1 Q2 Q3 YTD 2013 Mining 332 402 374 562 412 542 582 540 555 Processing 283 332 279 350 309 360 371 383 371 Administration 122 145 167 219 161 163 188 180 177 Royalties 113 127 117 115 118 104 97 92 98 ------- ------- ------- ------- ========= ------- ------- ------- --------- 850 1,006 937 1,246 1,000 1,169 1,238 1,195 1,201
Results for the Quarter ended 30 September 2013
On 8 August the Company announced a revised life of mine plan for Inata, with an increase in life of mine recoverable ounces of 36% and an increase of 21% in the average annual gold production to 116,000 ounces per annum, when compared with the previous plan announced in March 2013. The revised life of mine plan at Inata includes the construction of a carbon blanking circuit to improve gold recoveries when processing carbonaceous ore types, at a total project cost of US$6 million. September marked the start of the engineering design for this project and a lead engineering consultant has now been appointed. Long lead time items have been ordered and the current focus is on process design and general layout.
As referenced in the Company's press release of 9(th) October 2013, Inata's underlying operational performance in the quarter was marginally behind expectations with gold production for the quarter of 30,987 ounces.
Following the demobilisation of the additional rental mining fleet in July, the revised life of mine plan envisages a mining rate of 85,000 tonnes per day. Reduced equipment availability contributed to average mining rates of approximately 83,000 and 78,000 tonnes per day in August and September respectively, and access to higher grade ore was delayed as a result. Mining rates were also adversely affected by the wet season, which runs between July and September.
Plant throughput had been expected to improve in Q3 as a result of processing softer oxide material from the Minfo Pit, compared to harder ore sources that have a slower rate of processing. Processing of alternative, harder ore types, in addition to lower than planned mill availability resulted in the overall processing of 620,000 tonnes during Q3, which was in line with Q2 2013, but below Q3 expectations. As a consequence of mining volumes being behind schedule from the Minfo and Sayouba pits, the plant feed was supplemented by lower grade stockpile, lowering the overall head grade for the quarter to 1.73 g/t Au.
Total cash costs (including royalties) in the period were US$1,195 per ounce, a decrease compared to the prior quarter, reflecting the standing down of the mining contractor at the end of Q2 2013, and lower tonnes mined. This was partially offset by higher maintenance costs, together with an increase in the cost of fuel due to an additional 10 cents per litre fuel duty applied by the government of Burkina Faso during the quarter.
Tri-K development project, Guinea
Work on the Tri-K project in Guinea during the quarter made several significant steps towards a mining licence, with an environmental and social impact assessment submitted to the government in July, and technical documents submitted on schedule in September. A feasibility study update was published to the market shortly after the quarter end, which outlined the technical viability of a low cost heap leach operation with a low strip ratio. The maiden Ore Reserve for Tri-K, announced as part of the feasibility study update, is shown in the table below.
Deposit Classification Tonnes Au g/t Ounces --------------------- ---------------- ---------- ------- -------- Kodiéran Proven - - - (cut off grade 0.45 g/t Au) Probable 4,776,000 2.00 307,000 --------------------- ---------------- ---------- ------- -------- Koulékoun Proven - - - (cut off grade 0.65 g/t Au) Probable 3,133,000 1.72 173,000 --------------------- ---------------- ---------- ------- -------- Total 7,909,000 1.89 480,000 --------------------------------------- ---------- ------- --------
Notes: The information in this press release that relates to the Tri-K Ore Reserves, has been estimated in conformance with JORC 2004 Code, and is based on information compiled by Clayton Reeves, of Avocet Mining PLC. Clayton is a member of The Southern African Institute of Mining and Metallurgy (SAIMM) and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person in terms of the JORC Code. Estimates are rounded to nearest significant figure. Rounding errors may occur.
The technical work submitted to the Guinea Government in September outlines a 1.2 million tonnes per annum heap leach plant with an initial seven year mine life, averaging 55,000 ounces of production per annum. The Tri-K project benefits from a low life of mine strip ratio of 2.6 and high gold grades and recoveries (80%) for a heap leach project. Pre-production capital costs are currently estimated as US$88.5 million, and life of mine operating cash costs (including royalty) are currently estimated to be US$787 per ounce.
Certain parameters, including capital expenditure and operating costs, are expected to change as a result of project optimisation work currently in progress.
Souma exploration project, Burkina Faso
In line with previous years, field-based exploration activities, such as drilling, were reduced during the quarter as the rainy season passed.
Resource definition drilling activities within the Inata mining licence recorded results at Minfo that are expected to positively impact the resource model. Results included:
- 25 metres at 3.9 g/t Au from 30 metres depth - 4 metres at 16.5 g/t Au from 17 metres depth - 24 metres at 2.5 g/t Au from 6 metres depth - 20 metres at 1.9 g/t Au from 99 metres depth
In the broader Bélahouro region surrounding the mine site, drilling results were received from the N'Darga Prospect during the quarter, which forms part of the Souma project, and these included 25 metres at 3.9 g/t Au from 30 metres depth and 24 metres at 2.5 g/t Au from 6 metres depth. Geophysics IP dipole modelling on Souma has been completed and a 3D model prepared for the entire Souma trend, which will enhance the Company's understanding of the mineralisation at Souma, as potential additional feed for Inata in the future.
Financial Review
Revenue in the quarter was US$37.4 million, representing 33,385 ounces sold at an average realised price of US$1,121 per ounce. The average spot price fell to US$1,338 per ounce (Q2: US$1,441 per ounce), and an accelerated total of 18,000 ounces was delivered into the hedge at a price of US$938 per ounce (Q2: 8,250 ounces), as part of the strategic decision to reduce the Group's obligations to Macquarie Bank Limited as early as possible.
With cash costs in the quarter averaging US$1,195 per ounce, the impact of this hedge delivery strategy was to reduce gross margin by approximately US$3.6 million resulting in a gross loss of US$10.5 million. For similar reasons, EBITDA in the quarter was also negative at US$6.1 million, while the loss from operations, which includes exploration expenditure, corporate and head office costs, and depreciation, was US$12.5 million.
At 30 September 2013, the mark-to-market liability of the hedge book was US$46.6 million, compared with US$35.8 million at the start of the quarter, resulting in an expense to the income statement of US$10.8 million. Although the total ounces hedged decreased by 18,000 to 117,980, the increase in mark-to-market liability of the hedge reflects the fact that the quarter end spot price increased from US$1,192 per ounce at 30 June 2013 to US$1,327 per ounce at 30 September 2013.
The loss before tax for the quarter was therefore US$25.3 million, compared with a loss of US$20.9 million in Q2.
Cash generated from operating activities was positive in the quarter at US$5.0 million. This was partly due to movements in stockpiles and gold inventories (amounting to US$1.5 million), but also reflected a reduction in the value of spares held on site by US$5.5m, as well as around US$3.7 million from VAT rebates, trade creditors and other working capital movements.
With cash conservation measures in place, capex was restricted to US$0.9 million in the quarter, while feasibility study work at Tri-K and resource definition in the Inata surrounds amounted to US$2.0 million of capitalised costs.
The final instalment of the Macquarie Bank Limited debt facility of US$5.0 million was repaid on 30 September. The third tranche of the US$15.0 million Elliott loan of US$5.0 million was also drawn down in the quarter.
Net cash flow in the quarter totalled US$1.9 million. The closing cash position of the Group at 30 September 2013 was US$19.5 million, with US$15.4 million of debt and accrued interest, a net cash position of US$4.1 million.
Outlook
As previously announced, the impact of the mechanical issues that affected both the mining fleet and plant is expected to extend into the fourth quarter, and as a result, our full year production is now forecast to be 125,000-130,000 ounces, with cash costs similar to those seen year to date.
Our immediate priorities are to achieve operational improvements at Inata and obtain the Exploitation Permit at Tri-K.
DAVID CATHER
Chief Executive Officer
CONDENSED CONSOLIDATED INCOME STATEMENT For the three and nine months ended 30 September 2013 Three months ended Nine months ended 30 September 30 September 30 September 30 September 2013 2012 2013 2012 Note Unaudited Unaudited Unaudited Unaudited ====================================== ===== ============= ============= ============= ============= US$000 US$000 US$000 US$000 Continuing operations Revenue 2 37,441 50,146 117,929 159,657 Cost of sales 2 (47,953) (45,689) (129,077) (124,430) ====================================== ===== ============= ============= ============= ============= Gross (loss)/profit (10,512) 4,457 (11,148) 35,227 ====================================== ===== ============= ============= ============= ============= Administrative expenses (1,530) (3,630) (6,084) (8,950) Share based payments (440) (517) (834) (1,547) Partial reversal of impairment of mining assets 3,8 - - 72,200 - Impairment of mining and exploration assets 3,9 - - (73,616) - (Loss)/profit from operations (12,482) 310 (19,482) 24,730 ====================================== ===== ============= ============= ============= ============= Gain and loss on financial instruments Restructure of forward contracts 3 - - (20,225) - Loss on recognition of forward contracts 3 - - (96,632) - Change in fair value of forward contracts 3 (10,758) - 50,057 - Finance items Exchange gains/(losses) 15 76 (107) 440 Finance expense (2,040) (720) (4,591) (2,321) Finance income - 11 16 125 (Loss)/profit before taxation from continuing operations (25,265) (323) (90,964) 22,974 ====================================== ===== ============= ============= ============= ============= Analysed as: (Loss)/profit before taxation and exceptional items (14,507) (323) (22,748) 22,974 Exceptional items 3 (10,758) - (68,216) - ====================================== ===== ============= ============= ============= ============= (Loss)/profit before taxation from continuing operations (25,265) (323) (90,964) 22,974 ====================================== ===== ============= ============= ============= ============= Taxation (3,300) (486) (3,263) (7,959) ====================================== ===== ============= ============= ============= ============= (Loss)/profit for the period from continuing operations (28,565) (809) (94,227) 15,015 ====================================== ===== ============= ============= ============= ============= Discontinued operations Loss on disposal on subsidiaries(1) 3 - - - (105) ====================================== ===== ============= ============= ============= ============= (Loss)/profit for the period (28,565) (809) (94,227) 14,910 ====================================== ===== ============= ============= ============= ============= Attributable to: Equity shareholders of the parent company (26,542) (918) (85,843) 13,185 Non-controlling interest (2,023) 109 (8,384) 1,725 ====================================== ===== ============= ============= ============= ============= (28,565) (809) (94,227) 14,910 ====================================== ===== ============= ============= ============= ============= Earnings per share - basic (cents per share) 5 (13.33) (0.46) (43.11) 6.63 - diluted (cents per share) 5 (13.33) (0.46) (43.11) 6.59 EBITDA (2) 4 (6,124) 6,281 1,468 43,061 ====================================== ===== ============= ============= ============= =============
(1) During 2012, the Group disposed of its final South East Asian asset. All operations for 2013 are
continuing. Refer to note 3 for further information.
(2) EBITDA represents earnings before exceptional items, finance items, taxation, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the three months ended 30 September 2013 Three months ended 30 September 30 September 2013 2012 ========================================= ===== ============= ============= Note Unaudited Unaudited ========================================= ===== ============= ============= US$000 US$000 Loss for the period (28,565) (809) Revaluation of other financial assets 10 (73) (172) ========================================= ===== ============= ============= Total comprehensive loss for the period (28,638) (981) ========================================= ===== ============= ============= Attributable to: Equity holders of the parent company (26,615) (1,090) Non-controlling interest (2,023) 109 ========================================= ===== ============= ============= Total comprehensive loss for the period (28,638) (981) ========================================= ===== ============= ============= Total comprehensive loss for the period attributable to owners of the parent arising from: Continuing operations (28,638) (981) Discontinued operations - - ========================================= ===== ============= ============= (28,638) (981) ========================================= ===== ============= ============= CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the nine months ended 30 September 2013 Nine months ended 30 September 30 September 2013 2012 ======================================= ===== ============= ============= Note Unaudited Unaudited ======================================= ===== ============= ============= US$000 US$000 (Loss)/profit for the period (94,227) 14,910 Revaluation of other financial assets 10 (445) (776) ======================================= ===== ============= ============= Total comprehensive (loss)/profit for the period (94,672) 14,134 ======================================= ===== ============= ============= Attributable to: Equity holders of the parent company (86,288) 12,409 Non-controlling interest (8,384) 1,725 ======================================= ===== ============= ============= Total comprehensive (loss)/profit for the period (94,672) 14,134 ======================================= ===== ============= ============= Total comprehensive (loss)/profit for the period attributable to owners of the parent arising from: Continuing operations (94,672) 14,239 Discontinued operations - (105) ======================================= ===== ============= ============= (94,672) 14,134 ======================================= ===== ============= ============= CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 30 September 2013 30 September 30 June 2013 31 December 2013 Unaudited 2012 Note Unaudited Audited =============================== ===== ============= ============= ============ US$000 US$000 US$000 Non-current assets Intangible assets 6 55,271 53,016 49,442 Property, plant and equipment 7 142,144 147,910 145,653 Other financial assets 10 154 227 599 197,569 201,153 195,694 Current assets Inventories 11 62,401 69,440 56,949 Trade and other receivables 12 23,404 27,614 25,124 Cash and cash equivalents 13 19,549 17,671 54,888 =============================== ===== ============= ============= ============ 105,354 114,725 136,961 Current liabilities Trade and other payables 45,193 44,867 42,023 Current tax liabilities 18 3,300 - - Other financial liabilities 14 34,015 27,518 6,105 =============================== ===== ============= ============= ============ 82,508 72,385 48,128 =============================== ===== ============= ============= ============ Non-current liabilities Other financial liabilities 14 31,436 26,439 2,434 Deferred tax liabilities - - 37 Other liabilities 6,449 6,383 6,251 =============================== ===== ============= ============= ============ 37,885 32,822 8,722 Net assets 182,530 210,671 275,805 =============================== ===== ============= ============= ============ Equity Issued share capital 16,247 16,247 16,247 Share premium 146,040 146,040 146,040 Other reserves 15,737 15,769 16,117 Retained earnings 21,710 47,796 106,221 Total equity attributable to the parent 199,734 225,852 284,625 Non-controlling interest (17,204) (15,181) (8,820) =============================== ===== ============= ============= ============ Total equity 182,530 210,671 275,805 =============================== ===== ============= ============= ============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Nine months ended 30 September 2013 ===================================================================================================================== Share Share Other Retained Total attributable Non-controlling Total capital premium reserves earnings to the parent interest equity ===================== ========= ========= ========== ========== =================== ================ ========= US$000 US$000 US$000 US$000 US$000 US$000 US$000 At 31 December 2012 (Audited) 16,247 146,040 16,117 106,221 284,625 (8,820) 275,805 Loss for the period - - - (85,843) (85,843) (8,384) (94,227) Revaluation of other financial assets - - (445) - (445) - (445) Total comprehensive income for the period - - (445) (85,843) (86,288) (8,384) (94,672) ===================== ========= ========= ========== ========== =================== ================ ========= Share based payments - - - 1,235 1,235 - 1,235 Release of treasury and own shares - - 65 97 162 - 162 At 30 September 2013 (Unaudited) 16,247 146,040 15,737 21,710 199,734 (17,204) 182,530 ===================== ========= ========= ========== ========== =================== ================ ========= Nine months ended 30 September 2012 ===================================================================================================== Total attributable Share Share Other Retained to the Non-controlling Total capital premium reserves earnings parent interest equity =============== ======== ======== ========= ========= ============= ================ ========= US$000 US$000 US$000 US$000 US$000 US$000 US$000 At 31 December 2011 (Audited) 16,247 149,915 15,273 208,129 389,564 991 390,555 Profit for the period - - - 13,185 13,185 1,725 14,910 Revaluation of other financial assets - - (776) - (776) - (776) Total comprehensive income for the period - - (776) 13,185 12,409 1,725 14,134 =============== ======== ======== ========= ========= ============= ================ ========= Share based payments - - - 1,942 1,942 - 1,942 Release of treasury and own shares - - 914 (865) 49 - 49 Exercise of share options - - - (16) (16) - (16) Final dividend - - - (13,505) (13,505) - (13,505) =============== ======== ======== ========= ========= ============= ================ ========= At 30 September 2012 (Unaudited) 16,247 149,915 15,411 208,870 390,443 2,716 393,159 =============== ======== ======== ========= ========= ============= ================ ========= CONDENSED CONSOLIDATED CASH FLOW STATEMENT For the three and nine months ended 30 September 2013 Three months ended Nine months ended 30 September 30 September 30 September 30 September 2013 2012 2013 2012 ====================================== ===== ============= ============= ============= ============= Note Unaudited Unaudited ====================================== ===== ============= ============= ============= ============= US$000 US$000 Cash flows from operating activities (Loss)/profit for the period (28,565) (809) (94,227) 14,910 Adjusted for: Depreciation of non-current assets 2,7 6,358 5,971 19,534 18,331 Partial reversal of impairment of mining assets 8 - - (72,200) - Impairment of mining and exploration assets 9 - - 73,616 - Share based payments 440 517 834 1,547 Taxation in the income statement 3,300 486 3,263 7,959 Loss on recognition of forward - - 96,632 - contracts Change in fair value of forward contracts 10,758 - (50,057) - Non-operating items in the income statement 1,970 1,796 3,627 3,746 Discontinued operations 3 - - - 105 ====================================== ===== ============= ============= ============= ============= (5,739) 7,961 (18,978) 46,598 Movements in working capital Decrease / (increase) in inventory 7,039 (111) (5,452) (12,305) Decrease / (increase) in trade and other receivables 4,210 1,396 1,719 1,055 (Decrease) / increase in trade and other payables (340) (7,596) 2,129 1,460 ====================================== ===== ============= ============= ============= ============= Net cash generated/ (used in) by operations 5,170 1,650 (20,582) 36,808 Interest received - - 2 138 Interest paid (137) (239) (376) (966) Net cash generated / (used in) by operating activities 5,033 1,411 (20,956) 35,980 ====================================== ===== ============= ============= ============= ============= Cash flows from investing activities Payments for property, plant and equipment (870) (8,876) (10,319) (22,592) Exploration and evaluation expenses (2,014) (4,871) (12,801) (26,907) Disposal of discontinued operation, net of cash disposed of (4) - (4) 1,980 Net cash (used in)/generated by investing activities (2,888) (13,747) (23,124) (47,519) ====================================== ===== ============= ============= ============= ============= Cash flows from financing activities Loans repaid 14 (5,000) (6,000) (5,000) (18,000) Proceeds from debt 5,000 - 15,000 - Net exercise of share options settled in cash - (14) - (155) Final dividend - - - (13,166) Financing costs (221) - (723) - Payments in respect of finance lease (61) (63) (427) (434) Net cash (used in)/ generated by financing activities (282) (6,077) 8,850 (31,755) ====================================== ===== ============= ============= ============= ============= Net cash movement 1,863 (18,413) (35,230) (43,294) Exchange gains / (losses) 15 76 (109) 101 Total increase / (decrease) in cash and cash equivalents 1,878 (18,337) (35,339) (43,193) ====================================== ===== ============= ============= ============= ============= Cash and cash equivalents at start of the period 17,671 80,380 54,888 105,236 ====================================== ===== ============= ============= ============= ============= Cash and cash equivalents at end of period 19,549 62,043 19,549 62,043
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
The condensed consolidated interim financial statements, which are unaudited, have been prepared in accordance with the requirements of International Accounting Standard 34 as adopted for use in the European Union. This condensed interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this condensed report is to be read in conjunction with the Annual Report for the year ended 31 December 2012, which has been prepared in accordance with IFRS as adopted by the European Union, and any public announcements made by the Group during the interim reporting period.
The financial information set out in this interim report does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The unaudited condensed financial statements for the three and nine months ended 30 September 2013 have been drawn up using accounting policies and presentation expected to be adopted in the Group's full financial statements for the year ending 31 December 2013. The accounting policies are not different to those set out in note 1 to the Group's audited financial statements for the year ended 31 December 2012, with the exception of certain amendments to accounting standards or new interpretations issued by the International Accounting Standards Board, which were applicable from 1 January 2013. These have not had a material impact on the Group.
The Company's statutory financial statements for the year ended 31 December 2012 are available on the Company's website www.avocetmining.com. The auditor's report on those financial statements was unqualified and did not contain a statement under sections 498(2) or (3) of the Companies Act 2006.
Going Concern
The Group announced today a new US$63 million financing facility with Ecobank, which has a maturity of five years. Approximately US$35 million of this facility will shortly be used to buy back the outstanding hedge with Macquarie Bank Limited. The remaining available loan proceeds, after deducting loan costs and debt service reserve account requirements, of US$25 million exceed the Elliott loan of US$16 million (including interest) that is due for repayment on or before 31 December 2013. However, the possibility exists that lower production or gold prices or other adverse impacts on cash flow over the next six months could cause available liquidity to be insufficient to repay the full US$16m Elliott loan on or before 31 December 2013. The directors therefore believe that a material uncertainty will continue to exist in respect of the Elliott loan until it is either repaid or renegotiated.
In its assessment of going concern, the directors have considered a number of factors including the Ecobank loan repayment schedule, the repayment or the renegotiation of the Elliott loan, the risk of lower production or gold prices, and the possibility of higher than expected operating or capital costs. The directors have also considered the Company's potential responses and actions to mitigate or address these issues. As a result of this assessment, the directors have concluded that they have a reasonable expectation that the Company will have sufficient cash to meet its obligations over the next 12 months. Accordingly, the directors believe the going concern basis to be appropriate for the Q3 financial statements.
Estimates
Certain amounts included in the condensed consolidated interim financial statements involve the use of judgement and/or estimation. These are based on management's best knowledge of the relevant facts and circumstances, having regard to prior experience. However, judgements and estimations regarding the future are a key source of uncertainty and actual results may differ from the amounts included in the financial statements.
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended 31 December 2012, with the exception of those highlighted in the exceptional items in notes of these statements.
2. Segmental reporting
IFRS 8 requires the disclosure of certain information in respect of reportable operating segments. One of the criteria for determining reportable operating segments is the level at which information is regularly reviewed by the Chief Operating Decision Maker (CODM) for the purposes of making economic decisions. In this report, operating segments for continuing operations are determined as the UK, West Africa mining operations (which includes exploration activity within the Inata mine licence area), and West Africa exploration (which includes exploration projects in Burkina Faso, Guinea and Mali). Discontinued operations for 2012 represent the disposal of one of the remaining assets in South East Asia that was subject to the agreement with J&Partners L.P. (note 3).
2. Segmental Reporting West Africa For the three months ended mining West Africa 30 September 2013 UK operations exploration Total ========================================== ======== ============ ============= ========= US$000 US$000 US$000 US$000 INCOME STATEMENT Revenue - 37,441 - 37,441 ========================================== ======== ============ ============= ========= Cost of Sales 790 (47,893) (850) (47,953) ========================================== ======== ============ ============= ========= Cash production costs: - mining - (16,744) - (16,744) - processing - (11,858) - (11,858) - overheads - (5,589) - (5,589) - royalties - (2,853) - (2,853) ========================================== ======== ============ ============= ========= - (37,044) - (37,044) Changes in inventory - (1,499) - (1,499) Expensed exploration and other cost of sales (a) 796 (2,998) (850) (3,052) Depreciation and amortisation (b) (6) (6,352) - (6,373) =================================== ===== ======== ============ ============= ========= Gross profit/(loss) 790 (10,452) (850) (10,512) Administrative expenses and share based payments (1,970) - - (1,970) (Loss)/profit from operations (1,180) (10,452) (850) (12,482) Change in fair value of forward contracts - (10,758) - (10,758) Net finance items (1,202) (828) 5 (2,025) ========================================== ======== ============ ============= ========= Loss before taxation (2,382) (22,038) (845) (25,265) Taxation - (3,300) - (3,300) ========================================== ======== ============ ============= ========= Loss for the period (2,382) (25,338) (845) (28,565) ========================================== ======== ============ ============= ========= Attributable to: Equity shareholders of parent company (2,382) (23,315) (845) (26,542) Non-controlling interest - (2,023) - (2,023) (Loss)/profit for the period (2,382) (25,338) (845) (28,565) ========================================== ======== ============ ============= ========= EBITDA (c) (1,174) (4,100) (850) (6,124) =================================== ===== ======== ============ ============= =========
(a) Other cost of sales represents costs not directly attributable to production in the period, including exploration expenditure expensed;
(b) Includes amounts in respect of the amortisation of mine closure provision at Inata;
(c) EBITDA represents earnings before exceptional items, finance items, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation.
2. Segmental Reporting (continued) West Africa mining West Africa At 30 September 2013 UK operations exploration Total ================================== ===== ========= ============ ============= ========== US$000 US$000 US$000 US$000 STATEMENT OF FINANCIAL POSITION Non-current assets 678 137,816 59,075 197,569 Inventories - 62,189 212 62,401 Trade and other receivables 355 19,361 3,688 23,404 Cash and cash equivalents 4,191 15,038 320 19,549 Total assets 5,224 234,404 63,295 302,923 ========================================= ========= ============ ============= ========== Current liabilities (18,951) (61,101) (2,456) (82,508) Non-current liabilities (430) (37,455) - (37,885) ========================================= ========= ============ ============= ========== Total liabilities (19,381) (98,556) (2,456) (120,393) ========================================= ========= ============ ============= ========== Net assets (14,157) 135,848 60,839 182,530 ========================================= ========= ============ ============= ========== West Africa For the three months ended 30 mining West Africa September 2013 UK operations exploration Total ================================== ===== ========= ============ ============= ========== US$000 US$000 US$000 US$000 CASH FLOW STATEMENT Loss for the period (2,382) (25,338) (845) (28,565) Adjustments for non-cash and non-operating items (d) 1,531 21,632 (337) 22,826 Movements in working capital 333 10,973 (397) 10,909 ========================================= ========= ============ ============= ========== Net cash generated by / (used in) operations (518) 7,267 (1,579) 5,170 Net interest paid - (137) - (137) Purchase of property, plant and equipment - (854) (16) (870) Deferred exploration expenditure - - (2,014) (2,014) Loan repayment - (5,000) - (5,000) Proceeds from debt 5,000 - - 5,000 Financing costs (221) - - (221) Other cash movements (e) (3,398) (54) 3,402 (50) ================================== ===== ========= ============ ============= ========== Total increase / (decrease) in cash and cash equivalents 863 1,222 (207) 1,878 ========================================= ========= ============ ============= ==========
(d) Includes depreciation and amortisation, share based payments, taxation in the income statement, and other non-operating items in the income statement;
(e) Other cash movements include cash flows from financing activities, intragroup transfers, and exchange gains or losses.
2. Segmental Reporting (continued) West Africa For the three months ended mining West Africa 30 September 2012 UK operations exploration Total ========================================== ======== ============ ============= ========= US$000 US$000 US$000 US$000 INCOME STATEMENT Revenue - 50,146 - 50,146 ========================================== ======== ============ ============= ========= Cost of Sales 718 (45,308) (1,099) (45,689) ========================================== ======== ============ ============= ========= Cash production costs: - mining - (12,355) - (12,355) - processing - (9,219) - (9,219) - overheads - (5,521) - (5,521) - royalties - (3,877) - (3,877) ========================================== ======== ============ ============= ========= - (30,972) - (30,972) Changes in inventory - (5,662) - (5,662) Expensed exploration and other cost of sales (a) 751 (2,736) (1,099) (3,084) Depreciation and amortisation (b) (33) (5,938) - (5,971) =================================== ===== ======== ============ ============= ========= Gross profit/(loss) 718 4,838 (1,099) 4,457 Administrative expenses and share based payments (4,147) - - (4,147) ========================================== ======== ============ ============= ========= (Loss)/profit from operations (3,429) 4,838 (1,099) 310 Net finance items 4 (641) 4 (633) ========================================== ======== ============ ============= ========= (Loss)/profit before taxation (3,425) 4,197 (1,095) (323) Taxation - (486) - (486) ========================================== ======== ============ ============= ========= (Loss)/profit for the period (3,425) 3,711 (1,095) (809) ========================================== ======== ============ ============= ========= Attributable to: Equity shareholders of parent company (3,425) 3,602 (1,095) (918) ========================================== ======== ============ ============= ========= Non-controlling interest - 109 - 109 (Loss)/profit for the period (3,425) 3,711 (1,095) (809) ========================================== ======== ============ ============= ========= EBITDA (c) (3,396) 10,776 (1,099) 6,281 =================================== ===== ======== ============ ============= =========
(a) Other cost of sales represents costs not directly attributable to production, including exploration expenditure expensed;
(b) Includes amounts in respect of the amortisation of mine closure provision at Inata;
(c) EBITDA represents earnings before exceptional items, finance items, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation.
2. Segmental Reporting (continued) ============================================================================================ West Africa mining West Africa At 30 September 2012 UK operations exploration Total ================================== ===== ========= ============ ============= ========= US$000 US$000 US$000 US$000 STATEMENT OF FINANCIAL POSITION Non-current assets 1,616 271,548 49,399 322,563 Inventories - 52,426 394 52,820 Trade and other receivables 528 22,481 4,149 27,158 Cash and cash equivalents 13,587 48,140 316 62,043 Total assets 15,731 394,595 54,258 464,584 ========================================= ========= ============ ============= ========= Current liabilities (3,085) (35,070) (3,094) (41,249) Non-current liabilities (430) (29,746) - (30,176) ========================================= ========= ============ ============= ========= Total liabilities (3,515) (64,816) (3,094) (71,425) ========================================= ========= ============ ============= ========= Net assets 12,216 329,779 51,164 393,159 ========================================= ========= ============ ============= ========= West Africa For the three months ended 30 mining West Africa September 2012 UK operations exploration Total ================================== ===== ========= ============ ============= ========= US$000 US$000 US$000 US$000 CASH FLOW STATEMENT (Loss)/profit for the period (3,425) 3,711 (1,095) (809) Adjustments for non-cash and non-operating items (d) 546 8,414 (190) 8,770 Movements in working capital (677) (2,608) (3,026) (6,311) ========================================= ========= ============ ============= ========= Net cash (used in)/generated by operations (3,556) 9,517 (4,311) 1,650 Net interest received/(paid) (4) (235) - (239) Purchase of property, plant and equipment (5) (8,784) (87) (8,876) Loans repaid - (6,000) - (6,000) Deferred exploration expenditure - - (4,871) (4,871) Other cash movements (e) (25,867) 17,058 8,808 (1) Total (decrease)/ increase in cash and cash equivalents (29,432) 11,556 (461) (18,337) ========================================= ========= ============ ============= =========
(d) Includes depreciation and amortisation, share based payments, taxation in the income statement, and other non-operating items in the income statement;
(e) Other cash movements include cash flows from financing activities, intergroup transfers; and exchange gains or losses.
2. Segmental Reporting (continued) West Africa For the nine months ended 30 September mining West Africa 2013 UK operations exploration Total ============================================== ======== ============ ============= ========== US$000 US$000 US$000 US$000 INCOME STATEMENT Revenue - 117,929 - 117,929 ============================================== ======== ============ ============= ========== Cost of Sales 2,268 (128,129) (3,216) (129,077) ============================================== ======== ============ ============= ========== Cash production costs: - mining - (51,432) - (51,432) - processing - (34,434) - (34,434) - overheads - (16,433) - (16,433) - royalties - (9,047) - (9,047) ============================================== ======== ============ ============= ========== - (111,346) - (111,346) Changes in inventory - 7,684 - 7,684 Expensed exploration and other cost of sales (a) 2,307 (4,972) (3,216) (5,881) Depreciation and amortisation (b) (39) (19,495) - (19,534) ======================================= ===== ======== ============ ============= ========== Gross profit/(loss) 2,268 (10,200) (3,216) (11,148) Administrative expenses and share based payments (6,918) - - (6,918) Partial reversal of impairment of mining assets - 72,200 - 72,200 Impairment of mining and exploration assets - (73,300) (316) (73,616) Loss profit from operations (4,650) (11,300) (3,532) (19,482) Gain and loss on financial instrument Loss on recognition of forward contracts - (96,632) - (96,632) Restructure of forward contracts - (20,225) - (20,225) Change in fair value of forward contracts - 50,057 - 50,057 Net finance items (2,313) (2,356) (13) (4,682) ============================================== ======== ============ ============= ========== Loss before taxation (6,963) (80,456) (3,545) (90,964) Taxation - (3,263) - (3,263) ============================================== ======== ============ ============= ========== Loss for the period (6,963) (83,719) (3,545) (94,227) ============================================== ======== ============ ============= ========== Attributable to: Equity shareholders of parent company (6,963) (75,335) (3,545) (85,843) ============================================== ======== ============ ============= ========== Non-controlling interest - (8,384) - (8,384) Loss for the period (6,963) (83,719) (3,545) (94,227) ============================================== ======== ============ ============= ========== EBITDA (c) (4,611) 9,295 (3,216) 1,468 ======================================= ===== ======== ============ ============= ==========
(a) Other cost of sales represents costs not directly attributable to production, including exploration expenditure expensed;
(b) Includes amounts in respect of the amortisation of mine closure provision at Inata;
(c) EBITDA represents earnings before exceptional items, finance items, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation.
2. Segmental Reporting (continued) West Africa Continuing For the nine months ended mining West Africa operations Discontinued 30 September 2012 UK operations exploration total operations Total ===================================== ========= ============ ============= ============ ============= ========== US$000 US$000 US$000 US$000 US$000 US$000 INCOME STATEMENT Revenue - 159,657 - 159,657 - 159,657 ===================================== ========= ============ ============= ============ ============= ========== Cost of Sales 2,576 (122,823) (4,183) (124,430) - (124,430) ===================================== ========= ============ ============= ============ ============= ========== Cash production costs: - mining - (38,287) - (38,287) - (38,287) - processing - (30,960) - (30,960) - (30,960) - overheads - (14,995) - (14,995) - (14,995) - royalties - (12,398) - (12,398) - (12,398) ===================================== ========= ============ ============= ============ ============= ========== - (96,640) - (96,640) - (96,640) Changes in inventory - (596) - (596) - (596) Expensed exploration and other cost of sales (a) 2,675 (7,355) (4,183) (8,863) - (8,863) Depreciation and amortisation (b) (99) (18,232) - (18,331) - (18,331) ============================== ===== ========= ============ ============= ============ ============= ========== Gross profit/(loss) 2,576 36,834 (4,183) 35,227 - 35,227 Administrative expenses and share based payments (10,497) - - (10,497) - (10,497) ===================================== ========= ============ ============= ============ ============= ========== (Loss)/profit from operations (7,921) 36,834 (4,183) 24,730 - 24,730 Loss on disposal of subsidiaries - - - - (105) (105) Net finance items 433 (2,208) 19 (1,756) - (1,756) ===================================== ========= ============ ============= ============ ============= ========== (Loss)/profit before taxation (7,488) 34,626 (4,164) 22,974 (105) 22,869 Taxation - (7,959) - (7,959) - (7,959) ===================================== ========= ============ ============= ============ ============= ========== (Loss)/profit for the period (7,488) 26,667 (4,164) 15,015 (105) 14,910 ===================================== ========= ============ ============= ============ ============= ========== Attributable to: Equity shareholders of parent company (7,488) 24,942 (4,164) 13,290 (105) 13,185 Non-controlling interest - 1,725 - 1,725 - 1,725 ===================================== ========= ============ ============= ============ ============= ========== (Loss)/profit for the period (7,488) 26,667 (4,164) 15,015 (105) 14,910 ===================================== ========= ============ ============= ============ ============= ========== EBITDA (c) (7,822) 55,066 (4,183) 43,061 - 43,061 ============================== ===== ========= ============ ============= ============ ============= ==========
(a) Other cost of sales represents costs not directly attributable to production, including exploration expenditure expensed;
(b) Includes amounts in respect of the amortisation of mine closure provisions at Inata;
(c) EBITDA represents earnings before exceptional items, finance items, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation.
2. Segmental Reporting (continued) For the nine months ended 30 September 2013 UK West Africa mining operations West Africa exploration Total =============================== ===== ========= ============================== ======================== ========= US$000 US$000 US$000 US$000 CASH FLOW STATEMENT Loss for the period (6,963) (83,719) (3,545) (94,227) Adjustments for non-cash and non-operating items (d) 3,068 72,099 82 75,249 Movements in working capital (726) (852) (25) (1,603) ====================================== ========= ============================== ======================== ========= Net cash used in operations (4,621) (12,472) (3,488) (20,581) Net interest received/(paid) 2 (376) - (374) Purchase of property, plant and equipment (1) (10,083) (236) (10,320) Deferred exploration expenditure - - (12,801) (12,801) Loan repayment - (5,000) - (5,000) Proceeds from debt 15,000 - - 15,000 Financing costs (723) - - (723) Other cash movements (e) (12,859) (3,957) 16,276 (540) Total decrease in cash and cash equivalents (3,202) (31,888) (249) (35,339) ====================================== ========= ============================== ======================== ========= For the nine months West Africa Continuing ended 30 September mining West Africa operations Discontinued 2012 UK operations exploration total operations Total ===================== ===== ========= =============== =============== =============== =============== ========= US$000 US$000 US$000 US$000 US$000 US$000 CASH FLOW STATEMENT (Loss)/profit for the period (7,488) 26,667 (4,164) 15,015 (105) 14,910 Adjustments for non-cash and non-operating items (d) 1,213 30,606 (236) 31,583 105 31,688 Movements in working capital (4,772) (4,796) (222) (9,790) - (9,790) ============================ ========= =============== =============== =============== =============== ========= Net cash (used in)/ generated by operations (11,047) 52,477 (4,622) 36,808 - 36,808 Net interest received/(paid) 134 (962) - (828) - (828) Purchase of property, plant and equipment (169) (20,557) (1,866) (22,592) - (22,592) Deferred exploration expenditure - (367) (26,540) (26,907) - (26,907) Net proceeds from disposal of discontinuing operations 1,980 - - 1,980 - 1,980 Loans repaid - (18,000) - (18,000) - (18,000) Final dividend (13,166) - - (13,166) - (13,166) Other cash movements (e) (39,899) 6,834 32,577 (488) - (488) Total (decrease)/increase in cash and cash equivalents (62,167) 19,425 (451) (43,193) - (43,193) ============================ ========= =============== =============== =============== =============== =========
(d) Includes depreciation and amortisation, share based payments, movement in provisions, taxation in the income statement, and other non-operating items in the income statement;
(e) Other cash movements include deferred consideration paid, cash flows from financing activities, and exchange gains or losses;
3. Exceptional items 30 September 2013 30 September 2012 30 September 2013 30 September 2012 (three months) Unaudited (three months) (nine months) Unaudited (nine months) Unaudited Unaudited ======================= ========================== ================== ========================= ================== US$000 US$000 US$000 US$000 Restructure of forward - - (20,225) - contracts Loss on recognition of - - (96,632) - forward contracts Change in fair value of forward contracts (10,758) - 50,057 - Partial reversal of - - 72,200 - impairment of mining assets Impairment of Mali - - (316) - exploration asset Impairment of Inata - - (73,300) - mining assets Loss on disposal of subsidiaries - - - (105) Exceptional loss (10,758) - (68,216) (105) ======================= ========================== ================== ========================= ==================
Restructure and recognition of forward contracts
On 25 March 2013, Avocet announced the restructure of the Macquarie forward contracts for delivery of gold bullion. The restructure consisted of eliminating 29,020 ounces under the forward contracts at a cost of US$20.2 million and shortening the delivery profile of the remaining ounces by 18 months so that all ounces would be delivered by December 2016.
The recognition of the liability was in accordance with IAS 39 (see note 14 for more information), and reflects the fact that the buy back demonstrated a practice of cash-settling forward contracts. Under IAS 39, this meant that the own-use exemption previously applied was no longer appropriate. The fair value of the forward contracts was recognised at 31 March 2013 at $96.6m. Further details are provided in note 14.
Change in fair value of forward contracts
The forward contracts are required to be valued at each reporting date and the movement recognised through the income statement. At 30 September the forward contracts had a fair value of $46.6 million based on a spot price on that date of $1,326.50/oz. The reduction in fair value since recognition resulted in a gain of $50.1 million for the nine months, while the fair value increased since 30 June 2013 causing a loss of $10.8 million in the third quarter.
Partial reversal of impairment on mining assets
In March 2013 Avocet recognised a partial reversal of impairment of non-current mining assets in respect of the Inata Gold Mine driven by the requirement to recognise the forward contract liability. Further details are provided in note 8.
Impairment of Mali exploration asset
During Q1 the company decided to discontinue operations at the N'tjila permit located in the Republic of Mali. As a result the $0.3m capitalised in relation to the permit was impaired and recognised as an exceptional item.
Impairments of Inata mining assets
At 30 June 2013 Avocet recognised an impairment of non-current mining assets in respect of the Inata Gold Mine driven by a reduction in the forecasted gold price. Further details are provided in note 9.
Loss on disposal of subsidiaries
Completion of one of the last two exploration assets occurred on 16 February 2012 for proceeds of US$2.0 million, resulting in a loss of US$0.1 million. There are no remaining assets or liabilities recognised in the Group statement of financial position in respect of the last remaining South East Asian exploration company, which the Company no longer expects to sell.
4. EBITDA
Earnings before interest, tax, depreciation and amortisation (EBITDA) represents profit before depreciation/amortisation, interest and taxes, as well as excluding any exceptional items and profit or loss from discontinued operations and changes in fair value of forward contracts.
30 September 30 September 2012 2012 30 September 30 September 2013 (three months) 2013 (nine months) (three months) (nine months) Unaudited Unaudited Unaudited Unaudited US$000 US$000 US$000 US$000 (Loss)/profit before taxation (25,265) (323) (90,964) 22,974 Exceptional Items 10,758 - 68,216 - Depreciation 6,358 5,971 19,534 18,331 Exchange (gain)/losses (15) (76) 107 (440) Net finance income - (11) (16) (125) Net finance expense 2,040 720 4,591 2,321 =============================== ================ ================ =============== =============== EBITDA (6,124) 6,281 1,468 43,061 =============================== ================ ================ =============== =============== 30 September 30 September 2012 2012 30 September 30 September 2013 (three months) 2013 (nine months) (three months) (nine months) Unaudited Unaudited Unaudited Unaudited US$000 US$000 US$000 US$000 EBITDA (6,124) 6,281 1,468 43,061 Working capital 10,909 (6,311) (1,604) (3,479) Interest (137) (239) (374) (828) Hedge restructure - - (20,200) - Provisions and other costs 385 1,680 (246) (2,774) Net cash generated by / (used in) operating activities 5,033 1,411 (20,956) 35,980 =============================== ================ ================ =============== =============== 5. Earnings per Share
Earnings per share are analysed in the table below, presenting earnings per share for continuing and discontinued operations.
30 September 30 September 30 September 30 September 2013 (three 2012 (three 2013 (nine 2012 (nine months) months) months) months) Unaudited Unaudited Unaudited Unaudited ====================================== ============= ============= ============= ============= Shares Shares Shares Shares Weighted average number of shares in issue for the period - number of shares with voting rights 199,104,701 199,104,701 199,104,701 199,004,219 - effect of share options in issue(1) - 6,915 23,194 1,212,506 ====================================== ============= ============= ============= ============= - total used in calculation of diluted earnings per share 199,104,701 199,111,616 199,127,895 200,216,725 ====================================== ============= ============= ============= ============= US$000 US$000 US$000 US$000 Earnings per share from continuing operations (Loss)/profit for the period from continuing operations (28,565) (809) (94,227) 15,015 Less non-controlling interest 2,023 (109) 8,384 (1,725) ====================================== ============= ============= ============= ============= (Loss)/profit for the period attributable to equity shareholders of the parent (26,542) (918) (85,843) 13,290 ====================================== ============= ============= ============= ============= (Loss)/earnings per share - basic (cents per share) (13.33) (0.46) (43.11) 6.68 - diluted (cents per share) (1) (13.33) (0.46) (43.11) 6.64 ====================================== ============= ============= ============= ============= Earnings per share from discontinued operations Profit/(loss) for the period - - - (105) Less non-controlling interest - - - - ====================================== === === === ======= Profit/(loss) for the period attributable to equity shareholders of the parent - - - (105) ====================================== === === === ======= Earnings/(loss) per share - basic (cents per share) - - - (0.05) - diluted (cents per share) - - - (0.05) ====================================== === === === ======= Total (loss)/earnings per share - basic (cents per share) (13.33) (0.46) (43.11) 6.63 - diluted (cents per share) (1) (13.33) (0.46) (43.11) 6.59 ============================= ======== ======= ======== =====
(1) As a result of the loss for the period, in calculating the diluted earnings per share the effect of share options in issue has been ignored for the 3 months and 9 months ending 30 September 2013.
6. Intangible assets
Intangible assets represent deferred exploration expenditure. The movement in the period is analysed below:
US$000 At 1 January 2013 (audited) 49,442 Additions 12,782 Capitalised depreciation(1) 849 Impairment of Mali exploration assets (316) Transfer of exploration assets(2) (7,486) ======================================= ======== At 30 September 2013 (unaudited) 55,271 ======================================= ======== 30 September 31 December 2013 2012 (Unaudited) (Audited) ============== === ============== ============= US$000 US$000 Burkina Faso 25,595 26,577 Guinea 29,676 22,574 Mali - 291 =================== ============== ============= Total 55,271 49,442 =================== ============== =============
(1) Capitalised depreciation represents the depreciation of items of property, plant, and equipment which are used exclusively in the Group's exploration activities. The consumption of these assets is capitalised as an intangible asset, in accordance with accounting standards and industry practice.
(2) During 2013, US$7.5 million of drilling and other exploration costs associated with the Inata reserve were transferred into Property, Plant and Equipment, on the basis that they related to areas of the orebody that were being mined, and should therefore be depreciated as a Mine Development cost.
7. Property, plant and equipment Mining property and plant =============================================== Mine Vehicles, Exploration development Plant and fixtures, and property Office costs Machinery equipment and plant equipment ============== =============== ============== =============== =============== Nine months ended 30 Sept 2013 Note West Africa West Africa West Africa West Africa UK Total ================= ===== ============== =============== ============== =============== =============== ========= US$000 US$000 US$000 US$000 US$000 US$000 Cost At 1 January 2013 (audited) 96,789 87,589 55,568 5,242 1,121 246,309 Additions 5,489 4,289 177 237 1 10,193 Addition to mine closure provision 295 - - - - 295 Transfer from exploration intangibles 6 7,486 - - - - 7,486 Partial reversal of impairment on mining assets 8 72,200 - - - - 72,200 Impairment of mining assets 9 (73,300) - - - - (73,300) At 30 Sept 2013 (unaudited) 108,959 91,878 55,745 5,479 1,122 263,183 ================= ===== ============== =============== ============== =============== =============== ========= Depreciation At 1 January 2013 (audited) 56,958 23,624 18,677 822 575 100,656 Charge for the period 6,449 8,465 4,597 - 23 19,534 Charge for the period - capitalised(1) - - - 849 - 849 ================= ===== ============== =============== ============== =============== =============== ========= At 30 Sept 2013 (unaudited) 63,407 32,089 23,274 1,671 598 121,039 ================= ===== ============== =============== ============== =============== =============== ========= Net Book Value At 30 Sept 2013 (unaudited) 45,552 59,789 32,471 3,808 524 142,144 ================= ===== ============== =============== ============== =============== =============== ========= At 1 January 2013 (audited) 39,831 63,965 36,891 4,420 546 145,653 ================= ===== ============== =============== ============== =============== =============== =========
(1) Capitalised depreciation represents the depreciation of items of property, plant, and equipment which are used exclusively in the Group's exploration activities. The consumption of these assets is capitalised as an intangible asset, in accordance with accounting standards and industry practice.
8. Partial reversal of impairment on mining assets as at 31 March 2013
At 31 December 2012, the Group recognised an impairment of $135.3m in respect of mining assets at Inata. In accordance with IAS 36 Impairment of Assets, an entity is required to assess at the end of each reporting period whether there is any indication that a previous impairment loss may no longer exist or may have decreased. If such an indication exists, the entity should estimate the recoverable amount of that asset.
The forward contract liability at fair value in March 2013 was excluded from both the carrying amount of the cash generating unit ('CGU') and the cash flows of the value in use ('VIU') calculation. This avoids double counting of the liability's cash flow and provides a more stable basis to assess the CGU's fair value. The Company concluded that the requirements of an indication of a reversal of impairment were identified in relation to the Inata mining assets. An assessment was therefore carried out of the fair value of Inata's assets, using the discounted cash flows of Inata's latest estimated life of mine plan to calculate the VIU. As a result of the review, a pre-tax partial reversal of impairment losses of $72.2m was recorded in Q1 2013 and allocated to mine development costs.
When calculating the VIU, certain assumptions and estimates were made. Changes in these assumptions can have a significant effect on the recoverable amount and therefore the value of the impairment recognised. The key assumptions are outlined overleaf.
Assumption Judgements Sensitivity(2) ------------- --------------------------------------- ----------------------------------- Timing of Cash flows were forecast over the An extension or shortening cash flows expected life of the mine. The of the mine life would result life of mine plan in place in March in a corresponding increase forecasted mining activities to or decrease in reversal continue until 2017, with a further of impairment, the extent 3 years during which stockpiles of which it was not possible would be processed and rehabilitation to quantify. costs would be incurred. ------------- --------------------------------------- ----------------------------------- Production Production costs were forecast A change in production costs costs based on detailed assumptions, of 10% would increase or including staff costs, consumption decrease the pre-tax reversal of fuel and reagents, maintenance, of impairment attributable and administration and support by US$37.4 million(1) . costs. ------------- --------------------------------------- ----------------------------------- Gold price Analyst consensus prices were used A change of 10% in the gold for the forecast of revenue from price assumption would increase gold sales, based on an average or decrease the pre-tax consensus at March 2013 for the reversal of impairment recognised period 2013-2020. Prices ranged in the year by US$79.1 million(1) from US$1,775 per ounce in 2013 . to US$1,293 per ounce from 2017. ------------- --------------------------------------- ----------------------------------- Discount A discount rate of 10% (pre-tax) A change in the discount rate was used in the VIU estimation. rate of one percentage point would increase or decrease the pre-tax reversal of impairment recognised in the year by US$6.0 million(1) . ------------- --------------------------------------- ----------------------------------- Ore Reserves The life of mine plan in place A 10% increase or decrease and gold in March was based on Ore Reserves in ounces produced, compared production of 0.92 million for the Inata Mine with the current Ore Reserve, as at 31 December 2012, less the would increase or decrease Q1 2013 production. The Ore Reserve the pre-tax reversal of was estimated in accordance with impairment recognised in the principles the JORC Code and the year by US$79.1 million(1) was reviewed and approved by Clayton . Reeves (refer to page 22 of the 31 December 2012 Annual Report). ------------- --------------------------------------- ----------------------------------- (1) Sensitivities provided are on a 100% basis, pre-tax. 10% of the post-tax impairment would be attributed to the non-controlling interest. (2) The impairment reversal on the Inata mining assets would be limited to US$130.1 million, being the previous impaired value less the impact on depreciation as a result of the impairment. ------------------------------------------------------------------------------------------- 9. Impairment of mining assets
At 30 June due to a review of impairment indicators, the Company concluded that the fall in the gold spot price and market forecasts was considered to be an indicator for impairment. An assessment was therefore carried out of the fair value of Inata's assets, using the discounted cash flows of Inata's latest estimated life of mine plan to calculate their VIU. As a result of this review, a pre-tax impairment loss of US$73.3 million was recorded in June 2013, being an impairment of mine development costs.
When calculating the VIU, certain assumptions and estimates were made. Changes in these assumptions can have a significant effect on the recoverable amount and therefore the value of the impairment recognised. Should there be a change in the assumptions which indicated the impairment, this could lead to a revision of recorded impairment losses in future periods. The key assumptions are outlined in the table overleaf.
Assumption Judgements Sensitivity ---------------- ----------------------------------- ------------------------------------ Timing of cash Cash flows were forecast over An extension or shortening flows the expected life of the mine. of the mine life would result The life of mine plan in place in a corresponding increase in June forecasted mining or decrease activities to continue until in impairment, the extent 2018, with a further 17 months of which it was not possible during which stockpiles would to quantify. be processed and rehabilitation costs would be incurred. ---------------- ----------------------------------- ------------------------------------ Production costs Production costs were forecast A change in production costs based on detailed assumptions, of 10% would increase or decrease including staff costs, consumption the pre-tax impairment attributable of fuel and reagents, maintenance, by US$56.5 million(1) . and administration and support costs. ---------------- ----------------------------------- ------------------------------------ Gold price Analyst consensus prices were A change of 10% in the gold used for the forecast of revenue price assumption would increase from gold sales, based on or decrease the pre-tax impairment an average consensus at July recognised in the year by 2013 for the period US$69.0 million(1) . 2013-2021. Prices ranged from US$1,278 per ounce in 2013 to US$1,230 in 2015, and US$1,260 per ounce from 2016. ---------------- ----------------------------------- ------------------------------------ Discount rate A discount rate of 10% (pre-tax) A change in the discount rate was used in the VIU estimation. of one percentage point would increase or decrease the pre-tax impairment recognised in the year by US$6.7 million(1) . ---------------- ----------------------------------- ------------------------------------ Gold production The life of mine plan was A 10% increase or decrease based on gold production of in ounces produced, compared 0.96 million for the Inata with the life of mine gold Mine. production, would increase or decrease the pre-tax impairment recognised in the year by US$81.8 million(1) . ---------------- ----------------------------------- ------------------------------------
1 Sensitivities provided are on a 100% basis, pre-tax. 10% of the post-tax impairment would be attributed to the non-controlling interest.
10. Other financial assets 30 September 30 September 30 September 30 September 2013 2012 2013 2012 (3 months) (3 months) (9 months) (9 months) Unaudited Unaudited Unaudited Unaudited ======================= ============= ============= ============= ============= US$000 US$000 US$000 US$000 At 1 January/1 July 227 1,224 599 1,828 Fair value adjustment (73) (172) (445) (776) ======================= ============= ============= ============= ============= At 30 September 154 1,052 154 1,052 ======================= ============= ============= ============= =============
Other financial assets represent available for sale financial assets which are measured at fair value. The fair value adjustment is the periodic re-measurement to fair value, with gains or losses on re-measurement recognised in equity.
Other financial assets relate to shares in Golden Peaks Resources Limited. The shares were acquired as consideration for the disposal of two of the Group's assets in South East Asia in 2011. In January 2012 Golden Peaks announced that it had changed its name to Reliance Resources. Reliance Resources is listed on the Toronto Stock Exchange.
11. Inventories
30 September 31 December 2013 2012 Unaudited Audited US$000 US$000 Consumables 31,614 33,844 Work in progress 27,033 20,001 Finished goods 3,754 3,104 62,401 56,949 ================== ============= ============
Work in progress includes ore in stockpiles and gold in circuit. Finished goods represent gold in transit or undergoing refinement prior to sale.
12. Trade and other receivables 30 September 31 December 2013 2012 Unaudited Audited US$000 US$000 Payments in advance to suppliers 4,753 9,524 VAT 16,919 14,766 Prepayments 1,732 834 23,404 25,124 ================================== ============= ============ 13. Cash and cash equivalents
Included in US$19.5 million cash and cash equivalents at 30 September 2013 is US$13.4 million of restricted cash (31 December 2012: US$38.4 million), representing a minimum account balance held in Macquarie Bank Limited of US$12.0 million, a condition of the Inata project finance facility, and US$1.4 million (31 December 2012: US$1.4 million) relating to amounts held on restricted deposit in Burkina Faso for the purposes of environmental rehabilitation work, as required by the terms of the Inata mining licence.
In relation to the minimum account balance held in Macquarie Bank Limited ('MBL') of US$12.0 million, there were no restrictions on the use of funds above the minimum amount by SMB. Restrictions did apply to the availability of surplus funds above the US$12.0m to other Group entities, as set out in the Company's press release of 25 March 2013.
The repayment of the MBL debt during Q3, and the hedge buy back, expected to take place shortly, will remove these restrictions. Under the terms of the Ecobank loan, a minimum balance of approximately US$2.6 million must be held in a restricted account, equivalent to two monthly principal and interest payments.
14. Other financial liabilities 30 September 31 December 2013 2012 Unaudited Audited US$000 US$000 Current liabilities Warrant on company equity 455 - Interest bearing debt 15,400 5,000 Finance lease liabilities 668 1,105 Forward contracts - held for 17,492 - trading Total current other financial liabilities 34,015 6,105 =============================== ============= ============ 30 September 31 December 2013 2012 Unaudited Audited US$000 US$000 Non-current liabilities Finance lease liabilities 2,353 2,434 Forward contracts - held for trading 29,083 - Total non-current other financial liabilities 31,436 2,434 =============================================== ============= ============
Interest bearing debt
Interest bearing debt relates to the Elliott loan of US$15.0 million (31 December 2012: US$nil).
The remaining balance of US$5.0 million under the Macquarie Inata project finance facility, previously due on 31 March 2013, was paid on 30 September 2013.
The Elliott facility is repayable 30 December 2013. The facility is held at amortised cost and includes the US$15.0 million drawn down and accrued interest of US$0.4 million.
Warrant on company equity
A warrant on Avocet Mining PLCs equity was issued to the Elliott Lender as consideration for the loan facility. The warrant has been treated as a financial instrument rather than a share based payment on the basis that the warrant was issued as part of the loan and has not as a result of services provided. Further the warrant has been considered a liability rather than equity as the exercise price is quoted in GBP, and therefore the cash payment from Elliott will not be fixed when accounting in the Company's functional currency USD.
The warrant relates to 4,000,000 of ordinary shares with a strike price of GBP 0.40 and expires three years from issuance on 28 May 2013. The warrant was valued using a Black-Scholes model based on the 30 September 2013 closing share price of GBP 0.145.
Forward contracts
On 25 March 2013, Avocet announced a restructure of the Macquarie forward contracts for delivery of gold bullion. The partial settlement of the contract means that the remaining forward contracts no longer qualify for the 'own use exemption' and are therefore now within the scope of IAS 39 financial instruments. Under IAS 39 the forward contracts are classified as a financial liability designated at fair value through profit or loss (FVTPL) as they meet the requirements to be classified as held-for-trading.
The fair value of the forward contracts was assessed to be US$46.6 million based on a closing spot price of US$1,326.50/oz, analysed between current (US$17.5 million) and non-current (US$29.1 million) in accordance with the schedule of delivery of forward sold ounces.
30 September 30 September 30 September 30 September 2013 2012 2013 2012 (3 months) (3 months) (9 months) (9 months) Unaudited Unaudited Unaudited Unaudited ======================= ============= ============= ============= ============= US$000 US$000 US$000 US$000 At 1 January/1 July 35,817 - - - Recognition - - 96,632 - Fair value adjustment 10,758 - (50,057) - ======================= ============= ============= ============= ============= At 30 September 46,575 - 46,575 - ======================= ============= ============= ============= ============= 15. Finance lease liabilities
Also included within other financial liabilities are liabilities in respect of assets held under finance lease, US$0.7 million of which is included within current financial liabilities, and US$2.4 million is included within non-current financial liabilities.
16. Deferred tax 30 September 31 December 2013 2012 US$000 US$000 Liabilities At 1 January 37 14,566 Income statement movement (37) (14,529) At 30 September/31 December - 37
At 31 December 2012 the Group had deferred tax liabilities of less than US$0.1 million (31 December 2011: US$14.6 million) in relation to continuing operations. This liability relates to temporary differences on the Inata mine development costs and property, plant, and equipment. The reduction in the liability during 2012 reflects the impairment of mining assets, net of additions to mining property and plant during the year and of tax allowances on capital items used in the period.
17. Related party transactions
The table below sets out charges in the three month period and balances at 30 September 2013 between the Company (Avocet Mining PLC) and Group companies that were not wholly owned, in respect of management fees and interest on loans. There were no other related party transactions in the period requiring disclosure.
Avocet Mining PLC Wega Mining AS Charged in Charged in nine months Balance at nine months Balance at to 30 September 30 September to 30 September 30 September 2013 2013 2013 2013 US$000 US$000 US$000 US$000 Société des Mines de Bélahouro SA (90%) 1,581 140,366 (194) 108,502
Compensation paid to key management of the Group during Q3 2013 was US$0.6 million, including pension contributions of US$0.02 million. A share based payment expense of US$0.4 million was recognised in the six months ended June 2013 in respect of awards made under the Performance Share Plan, the details of which were reported in the announcement made on 13 March 2012. No dividends were received by Directors during the period in respect of shares held in the Company.
During 2013 the Company entered into a US$15.0 million loan agreement with Manchester Securities Corp. ("the Elliott Lender"), an affiliate of Avocet's largest shareholder, Elliott Management. Under the UK listing rules, the Elliott Lender and Elliott Management are related parties to the Company. US$5.0m was drawn down in March 2013 under the initial facility in accordance with the loan agreement. The terms of the initial facility, which was unsecured were considered to be normal commercial terms. The availability of the second facility under the agreement, which is secured, was approved by the shareholders at a General Meeting held on 28 May 2013. The amount owing on the initial facility was subsequently transferred to the second facility and a further US$5.0m was drawn down on the facility. Attached to the second facility is a warrant for 4 million ordinary shares of the Company, further details are provided in note 14.
18. Contingent liabilities
Burkina Faso tax claim
In 2012, Société des Mines de Bélahouro SA ('SMB', the subsidiary in Burkina Faso which operates the Inata mine) underwent a tax audit in respect of the fiscal years 2009, 2010, and 2011. The initial assessment of this tax audit, which was undertaken by the tax department of the Burkina Faso government, was that a total of US$25.5 million was due in taxes and penalties. A review of the assumptions underlying this conclusion led Avocet, along with its tax advisers, to believe that this assessment was factually inaccurate, and based on incorrect application and interpretation of the Burkina Faso tax code. Avocet felt highly confident that, with the exception of some minor items which were settled without delay, the full amount would be revised on review and discussion with the Burkinabe Director General of Taxes.
The possibility of such a liability coming to pass was therefore judged to be sufficiently remote that no provision was deemed necessary, nor in fact was disclosure required in the financial statements at 31 December 2012 and at 31 March 2013.
Following a number of discussions with government representatives, the Company is confident that an agreement will be reached without the requirement to enter into legal action. A provision of US$3.3 million, representing less than 13 per cent of the original claim, has been recorded in the Group accounts, however until the balance of the claim has been formally withdrawn, the full claim remains a contingent liability.
PT Lebong Tandai claim
Note 32 to the financial statements for the year ended 31 December 2012 contained a description of the Indonesian civil cases being brought by PT Lebong Tandai against Avocet and other parties, and the reader is therefore referred to the Company's Annual Report for 2012 for further details. As any financial settlement is considered to be remote, this matter does not constitute a contingent liability.
19. Unaudited quarterly income statement for continuing operations
Year ended Quarter ended Quarter ended Quarter ended YTD 31 December 31 March 30 September 30 September 2013 30 June 2013 2013 2013 2012 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) US$000 US$000 US$000 US$000 US$000 Revenue 40,885 39,603 37,441 117,929 204,110 Cost of sales (36,749) (44,375) (47,953) (129,077) (168,694) Cash production costs: - mining (16,495) (18,193) (16,744) (51,432) (55,659) - processing (10,970) (11,606) (11,858) (34,434) (41,772) - overheads (4,983) (5,861) (5,589) (16,433) (21,762) - royalties (3,171) (3,023) (2,853) (9,047) (15,945) (35,619) (38,683) (37,044) (111,346) (135,138) Changes in inventory 4,074 5,109 (1,499) 7,684 10,202 Expensed exploration and other cost of sales (128) (2,701) (3,052) (5,881) (15,762) Depreciation and amortisation (5,076) (8,100) (6,358) (19,534) (27,996) Gross profit/(loss) 4,136 (4,772) (10,512) (11,148) 35,416 Administrative expenses (2,135) (2,419) (1,530) (6,084) (13,002) Share based payments (329) (65) (440) (834) (2,067) Impairment of mining and exploration assets (316) (73,300) - (73,616) (135,300) Reversal of impairment of mining assets 72,200 - - 72,200 - Profit/(loss) from operations 73,556 (80,556) (12,482) (19,482) (114,953) Loss on recognition of forward contracts (96,632) - - (96,632) - Restructure of forward contracts (20,225) - - (20,225) - Change in fair value of forward contract - 60,815 (10,758) 50,057 - Net finance costs (1,491) (1,166) (2,025) (4,682) (2,072) Loss before taxation (44,792) (20,907) (25,265) (90,964) (117,025) Analysed as: Profit/(loss) before taxation and exceptional items 181 (8,422) (14,507) (22,748) 18,275 Exceptional items (44,973) (12,485) (10,758) (68,216) (135,300) Loss before taxation (44,792) (20,907) (25,265) (90,964) (117,025) Taxation 37 - (3,300) (3,263) 14,529 Loss for the period (44,755) (20,907) (28,565) (94,227) (102,496) Attributable to: Equity shareholders of the parent company (40,416) (18,885) (26,542) (85,843) (92,685) Non-controlling interest (4,339) (2,022) (2,023) (8,384) (9,811) (44,755) (20,907) (28,565) (94,227) (102,496) EBITDA (1) 6,748 844 (6,124) 1,468 48,343
(1) EBITDA represents earnings before exceptional items, finance items, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation.
20. All-in sustaining cost
The All-in sustaining cost ('AISC') has been reported in line with the guidance issued by the World Gold Council during 2013. The Company will continue to disclose cash costs in order to provide comparability to prior periods.
Previously disclosed All-in cash costs were based on Inata life of mine plans, while the AISCs are based on the Avocet group and include share based payments and general and administrative costs.
Quarter ended Quarter ended Quarter ended Quarter ended YTD 30 September 31 March 30 September 30 September 2013 30 June 2013 2013 2013 2012 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) US$000 US$000 US$000 US$000 US$000 Gold produced (oz) 30,482 31,245 30,987 92,714 33,067 Total cash production cost (35,619) (38,683) (37,044) (111,346) (30,972) Total cash production cost (US$/oz) (1,169) (1,238) (1,195) (1,201) (937) Other costs of sales (US$k) (54) (1,022) (1,421) (2,497) (830) Foreign exchange (US$k) 869 (791) (1,090) (1,012) (1,358) Sustaining capital expenditure (US$k) (5,304) (3,925) (854) (10,083) (8,789) Share based payments (US$k) (329) (65) (440) (834) (517) Administrative expenses (US$k) (2,135) (2,419) (1,552) (6,106) (3,630) All-in Sustaining Costs (US$k) (42,572) (46,905) (42,401) (131,878) (46,096) All-in Sustaining Costs (US$/oz) (1,397) (1,501) (1,368) (1,422) (1,394)
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DDBDGBUXBGXG
1 Year Avocet Mining Chart |
1 Month Avocet Mining Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions