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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Consol. Gen.Min | LSE:CGM | London | Ordinary Share | GB00B0T4LB03 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 24.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMCGM RNS Number : 0223D China Goldmines PLC 25 November 2009 CHINA GOLDMINES PLC ("China Goldmines", "CGM", the "Company", or the "Group") PRELIMINARY FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2009 Financial Highlights * Cash position as at year end USD$6.2m. * Net assets for the Group amounted to USD$28.5m. * For the year ended 30 June 2009 the Group has recorded a loss of USD$36.2m, after charging USD$18.3m impairment provision against mining properties and a loss on foreign exchange of USD$10.7m. * The Group has no long term debts or borrowings. Post year end: * Following the disposal of the Company's interest in Westralian Resources Pty Ltd ("WES"), (Guanzhuang Project) on 29 September 2009, the Company has no further interest in mining operations in China or elsewhere. The Company is regarded as an investing company under the AIM Rules for Companies. * Completion of disposal of the entire share capital of Westralian Resources Pty Ltd for a gross consideration of USD$26.35m. * Warranties in respect of the disposal capped at USD$10m expire on 29 September 2010. * Cash position as at 31 October 2009 USD$21.8m plus USD$2.9m held in trust until 31 December 2009 and will be released in January 2010 on condition that the purchaser is satisfied that all contingent debts and obligations are resolved in Westralian Resources and Hunan Westralian Mining Co., Ltd. * No long term debts or borrowings. Operational Highlights * Eight mining licences consolidated into one. * China Goldmines had three processing plants in operation with a total capacity of 350 tpd. * A twelve month drilling campaign completed by the end of December 2008 that achieved 15,000 metres of drilling:- * High grades achieved in drilling (e.g. 4.35 metres @ 24.1 g/t) * Underground sampling with results up to 114.93 g/t * 46,516 tonnes of ore milled and contained 8,211 ounces of gold produced during the year ended 30 June 2009. * For the three months ended 30 June 2009, grade improvement of 88% from the previous period (average grade 5.3 g/t to an average milling grade 10 g/t). * Underground mine development Highway -40 was on target at end of June 2009 to link four mines 350 metres below surface. * Theft of high-grade gold at the Xiang Lu ("XL") mine following forced entry and sustained civil disturbances caused significant operational disruption. Subsequent attempted improvements put in place. * Yuanling County Government Safety Award for no deaths/injuries for the year. * The Company intends to set out its proposed investing strategy for shareholders approval at the forthcoming AGM. For further information contact: +-----------------------------------------+-----------------------------------------+ | China Goldmines plc | | +-----------------------------------------+-----------------------------------------+ | Frank Vanspeybroeck (CEO) | +86 731 489 0755 | +-----------------------------------------+-----------------------------------------+ | Marinko Vidovich (CFO) | +61 8 6216 5200 | | | | +-----------------------------------------+-----------------------------------------+ | Brewin Dolphin Ltd (Nomad) | | +-----------------------------------------+-----------------------------------------+ | Alex Dewar | +44 (0)131 529 | | (Nominated Adviser) | 0276 | | Threadneedle Communications | +44 (0)20 7653 | | Laurence Read/ Beth Harris | 9855 | +-----------------------------------------+-----------------------------------------+ Chairman's Report The year ended 30 June 2009 has been a challenging one for the Company. The global financial crisis has lead to a significant decline in economic and investment activity across the world. The contraction of many of the world's leading economies had considerable impact on share markets, the availability of capital and currency movements. In addition to the macroeconomic challenges facing the Company we also encountered various operational difficulties (in the province of Hunan within the Peoples Republic of China), as the Company attempted its first full year of commercial gold production, including security breaches, theft and cultural issues. China Goldmines began producing gold in early 2008. However, throughout the year we began to experience increasing operational disturbances that were outside of the Company's control. These arose in part from Chinese cultural issues in managing the mines and interaction with the local population. In May 2009, there was a significant attack at our Xiang Lu mine site and the Bao Mu Yuan Plant. Fifty or more thieves broke in and raided the high grade ore/concentrate and threatened staff. We were forced to close down the Xiang Lu operations to ensure the safety of the Company's workers and to avoid more theft of high grade ore. These setbacks were particularly frustrating because of our notable achievements during the year. We had identified high-grade stopes for production and completed our 15,000 metre drilling programme, with drilling results that confirmed the likelihood of continuity of the ore body in both strike length and depth. We maintained an excellent safety record, with no serious injuries. Six of the eight gold mines were in operation, while two were in development, and mine production in March and April was delivering promising results. However, as the security situation grew increasingly serious, preventing us from processing higher-grade mining which would fund planned development, we were restricted to mining only small regions within the Mining Licence at a time. Given the widespread nature of the incidents, local authorities were ineffectual in assisting us. These problems, combined with the additional capital required to develop the underground infrastructure to deliver a higher and more sustainable level of gold production and profitability, resulted in the board seeking joint venture partners. Discussions were held with a number of international and local JV parties which ultimately led to the board considering the disposal of the project in order to ensure that we would be able to retain some value for the project rather than continuing to manage and operate in a very difficult operational environment and face an uncertain future. The offer from Cosmos Castle Management Limited to purchase Westralian Resources Pty. Ltd. was put to shareholders at a General Meeting on 21 September 2009 and was approved. The purchase has been completed and the funds were received on 29 September 2009. The consideration paid by Cosmos, expressed in US Dollars was USD$26.3m. Of the total consideration, USD$2.9m is held in trust as a contingency to cover outstanding liabilities of Westralian Resources Pty. Ltd. and Hunan Westralian Mining Co. Ltd., as well as certain costs by CGM and its subsidiary, Global Resource Ventures Limited, in fulfilling their commitments under the Share Purchase Agreement up to 31 December 2009 Following the closing of the disposal we retain funds of USD$24.7m (including the USD $2.9m held in trust) and are well placed to add significant shareholder value through investments in other companies and/or projects. We are identifying a number of project opportunities which we will appraise against the objective of delivering value to shareholders. At a corporate level, there were some significant changes to the Board personnel during the year. The Board wishes to extend its appreciation and thanks to the former Chairman, Mr Lance Browne and non-executive director/company secretary, Mr Alex Worrall, who both recently left the Board to pursue other opportunities. On behalf of the Board, I wish to acknowledge the commitment of our managers and staff, in particular, Frank Vanspeybroeck (CEO), our staff on site and the team in Perth. Their commitment and persistence in working in difficult operating conditions has been noteworthy. Clive Donner Non-Executive Chairman Business Review Following the financial year under review the Company disposed of WES, its operating subsidiary through which it held its interest in the Guanzhuang mining project. Following the completion of the disposal on 29 September 2009, the Company is classified as an Investing Company under the AIM Rules for Companies. At the start of the financial year the Company was focussed on expanding gold production following the consolidation of the mining licences and the investment in the administration and infrastructure of the Company. Operations were becoming increasingly disrupted by theft and local disputes. These had the consequence of preventing the Company from processing sufficient gold to fund the necessary development of the mining infrastructure and operations. The directors examined various alternatives for preserving shareholders value in the Guanzhuang mining project which ultimately led the Company to dispose of WES to Cosmos Castle Management Limited. The Group made a loss for the 2009 year before taxation of USD$36,203,861, (2008: USD$(4,260,569). The loss attributable to shareholders was USD$36,203,861, (2008: USD$(3,800,361). The directors do not propose a dividend, (2008: nil). Disposal of Principle Asset and Future Investment Strategy Following the disposal, the Company is now classified under the AIM Rules for companies as an investing company. Post sale transaction the Company now has cash reserves of USD$24.7m. China Goldmines proposes to identify and acquire holdings in natural resources, minerals and/or metals companies and/or assets which the Directors believe are undervalued and will enhance shareholder value. Accordingly a new investment strategy for the Company has been determined for your Company, with your Board laying down the following guiding principles: * The Company will employ a broad geographic focus for its business with an emphasis on established mining regions within Australasia, South America and Africa, with China being specifically excluded as an investment region. Other regions / countries will be reviewed on a case by case basis; * Within these regions, the Company will target projects that demonstrate a sound investment case that meets or exceeds the Company's investment criteria. Our investment criterion remains flexible across a range of commodity types, including but not limited to bulk commodities (iron and coal, but not oil and gas), base metals (primarily copper, nickel, lead, and zinc) as well as precious metals (particularly gold and platinum); * The Company will aim to invest in the more mature exploration properties, with preference towards projects that are advancing into the development / commissioning phase; * The Company, subject to a compelling investment case, remains open to consider the acquisition of producing assets (or even ones that are in care and maintenance). The Company will also not rule out joint venture opportunities within its investment matrix, provided the potential for shareholder value uplift is evident; * The size of the investment that the Company would consider will vary depending on the Company's ability to fund the acquisition from its ability to source both debt and equity funding. All investments that are made must demonstrate the ability to at least meet or exceed the Company's internal investment hurdle rates of return; * The Company will source investment opportunities from internal sources, consultants and advisors, banks and brokers and will evaluate opportunities internally and with the use of appropriate skilled and experienced consultants and advisors; and * The Company believes it currently has the relevant skills to undertake and / or manage an operation or development project and can access or source the appropriate senior management to undertake the relevant positions for an operating mining asset. Review of Operations China Goldmines attempted during the 2009 year to sustain commercial gold mining production but encountered a number of issues in developing and optimising the Project. Continued security breaches, theft and other local community issues have had a significant impact on the Company's ability to develop and optimise the Project. Management had sought to address this situation by putting in place additional security arrangements and conducting a comprehensive review of the mining operations. The Company also revised its business strategy, which ultimately led the Board to consider the merits of selling the Project. A number of alternative solutions were assessed and reviewed by the Directors, including Chinese and international joint-venture partners, conventional equity raisings and a potential sale of the Project. The Directors estimated that the Project required an injection of substantial capital in order to develop the underground infrastructure to achieve higher and more sustainable gold production in order to become a profitable gold producer. The Directors concluded that the proposed disposal of the Project represented the best alternative to preserve shareholder value. Geological Prior to August 2008, there were eight small independent mining licences for the following mines: Shen Jia Ya (SJY), De Sheng (DS), Bao Mu Yuan (BMY), Xiao Chong Zi (XCZ), Zheng Jia Shan (ZJS), Jiu Fa (JF), Jin Zhu Wan (JZW) and Xiang Lu (XL). In August 2008, the Company combined these eight gold-mining rights into one and renamed it as Hunan Westralian Guanzhuang Gold Mine. The combined area of mining rights accumulated to 6.3126km2. Exploration Exploration drilling achieved a total of 15,000 metres for surface drilling to December 2008. The underground drilling completed approximately 2,000 metres. Underground sampling, together with underground drilling, continued to confirm the continuity of the orebodies, both along strike and with depth. The Company, since December 2008, focused purely on underground drilling that would assist mine production. Underground drilling directly connected with identifying zones for immediate mining was conducted in the second half of the financial year. Underground drilling and channel sampling to the extension of Xiang Lu (XL) decline 3 had discovered a high grade orebody. A 25 degree decline almost perpendicularly entered into an orebody 5m thick, at an average grade of 160.8 g/t. Channel sampling along the grade line of the decline (1m above the floor, across the thickness of the orebody) gave the following grades: +--------------------------+------------+---------------+---------------------------+ | Channel sample length | Grade | Accumulated |Grade for the accumulated | | across the orebody | (g/t) |thickness (m) | thickness (g/t) | | thickness (m) | | | | +--------------------------+------------+---------------+---------------------------+ | 0.6 | 916.74 | First 0.6m | 916.74 | +--------------------------+------------+---------------+---------------------------+ | 1.3 | 123.68 | First 1.9m | 374.1 | +--------------------------+------------+---------------+---------------------------+ | 0.5 | 46.06 | First 2.4m | 305.8 | +--------------------------+------------+---------------+---------------------------+ | 1.2 | 4.28 | First 3.6m | 205.3 | +--------------------------+------------+---------------+---------------------------+ | 1 | 0.57 | First 4.6m | 160.8 | +--------------------------+------------+---------------+---------------------------+ The Company determined this to be a significant high grade gold mineralisation which was to be earmarked for immediate production and processing, prior to the decision to suspend mining activity in Xiang Lu. Mining Background CGM had eight mining operations, divided into the east section and west section. The east section had four operations: Zheng Jia Shan, Xiang Lu, Jin Zhu Wan and Jiu Fa. The west section had four operations: Shen Jia Ya, Bao Mu Yuan, Xia Chong Zi and De Sheng. CGM was upgrading the west section operations, where the four operations had been connected, while upgrading was also being undertaken on the east section, where the four mines were not connected as a result of ventilation and other factors. Within the CGM mining operations, underground access is made available by adits and declines. Materials are hoisted by winches. An emergency compartment is placed every 20m in the declines. Production During the financial year, the Company's mining operation was making the transition from remnant mining, while refurbishing the mines to target new high-grade mine development. This progress was materially impeded by escalating local disruption culminating in a large scale robbery in May 2009. As a result CGM scaled down active mining to ensure increased security coverage by resorting to measures such as temporarily closing access to the high-grade orebodies. A solution to the mining operations was to develop a centralised hoisting and processing facility for the long-term and sustainable development of the Guanzhuang Project. A mine feasibility study program was initiated in June 2009. In June 2009, the Company was also in the process of preparing the necessary reports and designs for its central project to be approved by the County Government and to obtain the construction permits for its central shaft, processing plant, tailing dams, power upgrade and the transfer of land title to the Company. 2009 Summary Mining Results +----------------------+-------------+ | Period | Tonnes | +----------------------+-------------+ | Q1: Jul 08 to Sep 08 | 7,552 | | Q2: Oct 08 to Dec 08 | 23,519 | | Q3: Jan 09 to Mar 09 | 13,578 | | Q4: Apr 09 to Jun 09 | 14,555 | +----------------------+-------------+ | Total Tonnes Mined | 59,204 | +----------------------+-------------+ Summary of Production to 30 June 2009 +-----------------+---------+------------+----------+-------+ | Quarter | Tonnes | Head Grade | Recovery | Oz's | +-----------------+---------+------------+----------+-------+ | 1 Jul to 30 Sep | 7,552 | 4 | 95% | 903 | | 09 | 18,091 | 4 | 93% | 2,214 | | 1 Oct to 31 Dec | 8,911 | 5.3 | 93% | 1,417 | | 09 | 11,962 | 10 | 95% | 3,677 | | 1 Jan to 31 Mar | | | | | | 09 | | | | | | 1 Apr to 30 Jun | | | | | | 09 | | | | | +-----------------+---------+------------+----------+-------+ | | 46,516 | | | 8,211 | +-----------------+---------+------------+----------+-------+ The 8,211 ounces of gold produced from our production mills included gold concentrate and doré bars from gravity concentration. The gold was sold to the Chinese refinery and after costs associated with "refining," the Company received net proceeds for 3,177 ounces of gold, for a net consideration of USD2.9m. Mine Safety CGM developed its internal (western) safety procedures which held a proud record in China. Disposal of Entire Issued Capital of Westralian Resources Pty Ltd On 29 September 2009, the Company disposed of the entire issued share capital of Westralian Resources Pty Ltd, the JV Company to the Guanzhuang Gold Project via Hunan Westralian Mining Co. Ltd (China). The gross consideration paid by Cosmos Castle Management Limited (the Purchaser) was USD$26.35m, of which USD$2.9m is held in trust to cover outstanding liabilities of Westralian Resources Pty Ltd or its subsidiary Hunan Westralian Mining Co. Ltd, and is expected to be released in January 2010. Investing Policy * The Company intends to set out its investing policy that seeks to add shareholder value, at the Company's forthcoming AGM. After Settlement of the Sale of Westralian Resources Pty Ltd After the Closing Date, 29 September 2009, CGM was required to use its reasonable endeavours and act regularly and diligently to:- * Obtain the lawful and valid mining rights certificates of the eight gold mines, fully consolidating the eight mining rights certificates, and the lawful and valid certificates and licences for the operation and business. * Settle by no later than 31 December 2009, all debts, obligations and matters which relate to the USD$2.9m held in trust. Warranties in Accordance with the Share Purchase Agreement China Goldmines and Global Resource Ventures Limited provided warranties, jointly and severally, to Cosmos and its successors in title, subject to any matters disclosed. The warranties are concerned with the following matters: * The authority and capacity of CGM and GRV to enter into the Share Purchase Agreement, which is binding upon them; * The entering into and performance of the Share Purchase Agreement not breaching the constitutions of CGM and GRV and the agreements, licences etc and court orders and judgements which affect CGM and GRV; * Ownership and title to the Shares and Shareholder Loan; * The validity and terms of the Shareholder Loan and borrowings and indebtedness; * Commercial activities between the date of the Agreement and Closing not taking place without Cosmos' consent (save for certain specified activities); * Contractual arrangements; * Litigation and disputes pursued by and against GRV, HW and WES; * The solvency of GRV, HW and WES; * Compliance by HW and WES with laws and regulations and official inquiries or investigations; * The structure of the group and the information set out in the schedules to the Share Purchase Agreement; * The accuracy of the books and records of HW and WES and that such books and records are in their possession or control; * The validity of licences, permits and consents; * Ownership and control of assets and the condition of such assets; * Merchantable quality and adequacy of stock in trade * The standing of HW and its rights in relation to mining and exploration, including whether all relevant fees have been paid; * The employment arrangements of HW and WES; * The accuracy, and completeness of information provided to Cosmos and also in the share purchase agreement and disclosure letter; * Financial information and accounts of HW and WES; * The financial position, standing and operation of HW and WES since 31 December 2008; * The ownership of intellectual property rights and software and any claims in relation thereto; * The ownership, title and use of equipment and real property; * The insurance arrangements of HW and WES; and * The taxation affairs of HW and WES. The warranties expire 12 months from the Closing Date. The maximum liability of CGM and GRV under the warranties is USD$10,000,000 with Cosmos permitted to select any basis of claiming damages available to it as well as any other rights or remedy which is available. Directors' Report The Directors present their Annual Report and Group Accounts of China Goldmines plc for the year ended 30 June 2009. Consolidated Income Statement +------------------------------------------+---------+--------------+-------------+ | | Note | Year Ended | Year Ended | | | | 30 June | 30 June | | | | 2009 | 2008 | | | | $ | $ | +------------------------------------------+---------+--------------+-------------+ | | | | | +------------------------------------------+---------+--------------+-------------+ | Revenue | | 396,740 | 523,635 | +------------------------------------------+---------+--------------+-------------+ | Salaries and employee benefits | | (2,619,097) | (1,719,889) | +------------------------------------------+---------+--------------+-------------+ | Office expenses and professional fees | | (3,124,949) | (2,814,823) | +------------------------------------------+---------+--------------+-------------+ | Consulting expenses | | (715,588) | (1,161,254) | +------------------------------------------+---------+--------------+-------------+ | Travel and accommodation expenses | | (214,864) | (384,463) | +------------------------------------------+---------+--------------+-------------+ | Mining expenses | | - | (1,343,585) | +------------------------------------------+---------+--------------+-------------+ | Impairment of intangible assets | 4 | (18,388,341) | - | +------------------------------------------+---------+--------------+-------------+ | Other expenses | | (1,214,752) | (267,997) | +------------------------------------------+---------+--------------+-------------+ | Operating loss | | (25,880,851) | | +------------------------------------------+---------+--------------+-------------+ | | | | | +------------------------------------------+---------+--------------+-------------+ | Other gains and losses | 1 | (10,688,330) | 1,909,520 | +------------------------------------------+---------+--------------+-------------+ | Financial income | | 365,320 | 998,287 | +------------------------------------------+---------+--------------+-------------+ | Loss before tax | | (36,203,861) | (4,260,569) | +------------------------------------------+---------+--------------+-------------+ | Tax | | - | - | +------------------------------------------+---------+--------------+-------------+ | Loss for the year | | (36,203,861) | (4,260,569) | +------------------------------------------+---------+--------------+-------------+ | Attributable to: | | | | +------------------------------------------+---------+--------------+-------------+ | Equity holders of the company | | (36,203,861) | (3,800,361) | +------------------------------------------+---------+--------------+-------------+ | Minority interest | | - | (460,208) | +------------------------------------------+---------+--------------+-------------+ | | | (36,203,861) | (4,260,569) | +------------------------------------------+---------+--------------+-------------+ | | | | | +------------------------------------------+---------+--------------+-------------+ | Earnings per share | | 2009 | 2008 | | | | Cents | Cents | +------------------------------------------+---------+--------------+-------------+ | Basic and diluted | 2 | (74.68) | (9.37) | +------------------------------------------+---------+--------------+-------------+ Consolidated Statement of Recognised Income & Expenditure +----------------------------------------------------+--------------+-------------+ | | Year Ended | Year Ended | | | 30 June | 30 June | | | 2009 | 2008 | | | $ | $ | +----------------------------------------------------+--------------+-------------+ | Loss for the year | (36,203,861) | (4,260,569) | +----------------------------------------------------+--------------+-------------+ | Exchange differences on translation of foreign | 5,681,438 | (1,428,978) | | operations | | | +----------------------------------------------------+--------------+-------------+ | Total recognised income and expense for the year | (30,522,423) | (5,689,547) | +----------------------------------------------------+--------------+-------------+ | Attributable to: | | | +----------------------------------------------------+--------------+-------------+ | Equity holders of the parent | (30,522,423) | (5,229,339) | +----------------------------------------------------+--------------+-------------+ | Minority interests | - | (460,208) | +----------------------------------------------------+--------------+-------------+ | | (30,522,423) | (5,689,547) | +----------------------------------------------------+--------------+-------------+ Consolidated Balance Sheet +--------------------------------------------+---------+--------------+-------------+ | | Note | Year Ended | Year Ended | | | | 30 June | 30 June | | | | 2009 | 2008 | | | | $ | $ | +--------------------------------------------+---------+--------------+-------------+ | Non-current Assets | | | | +--------------------------------------------+---------+--------------+-------------+ | Intangible assets | 3 | 5,898 | 704,974 | +--------------------------------------------+---------+--------------+-------------+ | Mining properties | 4 | 21,385,440 | 32,372,602 | +--------------------------------------------+---------+--------------+-------------+ | Property, plant and equipment | 5 | 2,350,920 | 1,371,728 | +--------------------------------------------+---------+--------------+-------------+ | Trade and other receivables | 6 | 319,760 | 821,958 | +--------------------------------------------+---------+--------------+-------------+ | | | 24,062,018 | 35,271,262 | +--------------------------------------------+---------+--------------+-------------+ | Current Assets | | | | +--------------------------------------------+---------+--------------+-------------+ | Inventories | 7 | 1,246,749 | 502,683 | +--------------------------------------------+---------+--------------+-------------+ | Trade and other receivables | | 151,082 | 118,617 | +--------------------------------------------+---------+--------------+-------------+ | Cash and cash equivalents | | 6,192,290 | 25,147,806 | +--------------------------------------------+---------+--------------+-------------+ | | | 7,590,121 | 25,769,106 | +--------------------------------------------+---------+--------------+-------------+ | Total Assets | | 31,652,139 | 61,040,368 | +--------------------------------------------+---------+--------------+-------------+ | Current Liabilities | | | | +--------------------------------------------+---------+--------------+-------------+ | Trade and other payables | 8 | (3,139,086) | (2,004,892) | +--------------------------------------------+---------+--------------+-------------+ | Total Liabilities | | (3,139,086) | (2,004,892) | +--------------------------------------------+---------+--------------+-------------+ | | | | | +--------------------------------------------+---------+--------------+-------------+ | Net Assets | | 28,513,053 | 59,035,476 | +--------------------------------------------+---------+--------------+-------------+ | Equity | | | | +--------------------------------------------+---------+--------------+-------------+ | Share capital | 9 | 919,975 | 919,975 | +--------------------------------------------+---------+--------------+-------------+ | Share premium account | | 66,169,804 | 66,169,804 | +--------------------------------------------+---------+--------------+-------------+ | Foreign exchange reserve | | 4,249,508 | (1,431,930) | +--------------------------------------------+---------+--------------+-------------+ | Reverse acquisition reserve | | 61,344 | 61,344 | +--------------------------------------------+---------+--------------+-------------+ | Retained earnings | | (42,875,425) | (6,671,564) | +--------------------------------------------+---------+--------------+-------------+ | Equity attributable to equity holders of | | 28,525,206 | 59,047,629 | | the parent company | | | | +--------------------------------------------+---------+--------------+-------------+ | Minority interest | | (12,153) | (12,153) | +--------------------------------------------+---------+--------------+-------------+ | Total Equity | | 28,513,053 | 59,035,476 | +--------------------------------------------+---------+--------------+-------------+ Consolidated Statement of Changes in Equity +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | | Attributable to Members of China Goldmines | | | +------------------+---------------------------------------------------------------------------------+-----------+--------------+ | | Share | Share | Foreign | Reverse | Retained | Total | Minority | Total | | | Capital | Premium | Exchange | Acquisition | Earnings | | Interest | Equity | | | $ | Reserve | Reserve | Reserve | $ | | $ | | | | | $ | $ | $ | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Balance at 30 | 390,151 | 6,725,683 | (2,952) | 61,344 | (2,871,203) | 4,303,023 | 448,055 | 4,751,078 | | June 2007 | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Exchange | - | - | (1,428,978) | - | - | (1,428,978) | - | (1,428,978) | | differences on | | | | | | | | | | translation of | | | | | | | | | | foreign | | | | | | | | | | operation | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Net | - | - | (1,428,978) | - | - | (1,428,978) | - | (1,428,978) | | income/(expense) | | | | | | | | | | recognised | | | | | | | | | | directly in | | | | | | | | | | equity | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Loss for the | - | - | - | - | (3,800,361) | (3,800,361) | (460,208) | (4,260,569) | | year | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Total recognised | - | - | (1,428,978) | - | (3,800,361) | (5,229,339) | (460,208) | (5,689,547) | | income and | | | | | | | | | | expense for the | | | | | | | | | | year | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Issue of shares | 529,824 | 63,417,004 | - | - | - | 63,946,828 | - | 63,946,828 | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Equity issue | - | (3,972,883) | - | - | - | (3,972,883) | - | (3,972,883) | | transaction | | | | | | | | | | costs | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Balance at 30 | 919,975 | 66,169,804 | (1,431,930) | 61,344 | (6,671,564) | 59,047,629 | (12,153) | 59,035,476 | | June 2008 | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Exchange | - | - | 5,681,438 | - | - | 5,681,438 | - | 5,681,438 | | differences on | | | | | | | | | | translation of | | | | | | | | | | foreign | | | | | | | | | | operation | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Net | - | - | 5,681,438 | - | - | 5,681,438 | - | 5,681,438 | | income/(expense) | | | | | | | | | | recognised | | | | | | | | | | directly in | | | | | | | | | | equity | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Loss for the | - | - | - | - | (36,203,861) | (36,203,861) | - | (36,203,861) | | year | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Total recognised | - | - | 5,681,438 | - | (36,203,861) | (30,522,423) | - | (30,522,423) | | income and | | | | | | | | | | expense for the | | | | | | | | | | year | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ | Balance at 30 | 919,975 | 66,169,804 | 4,249,508 | 61,344 | (42,875,425) | 28,525,206 | (12,153) | 28,513,053 | | June 2009 | | | | | | | | | +------------------+---------+-------------+-------------+-------------+--------------+--------------+-----------+--------------+ Statement of Consolidated Cash Flows +-----------------------------------------+----------+--------------+--------------+------------+ | | | Year Ended | Year Ended | | | | | 30 June 2008 | | | | 30 June | $ | | | | 2009 | | | | | $ | | +-----------------------------------------+----------+--------------+--------------+ | Operating Loss | | (25,880,851) | (7,168,376) | +-----------------------------------------+----------+--------------+--------------+ | Adjustments for: | | | | +-----------------------------------------+----------+--------------+--------------+ | Net exchange differences | (333,772) | (20,253) | +----------------------------------------------------+--------------+--------------+ | Depreciation of property, plant and equipment | 628,332 | 122,727 | +----------------------------------------------------+--------------+--------------+ | Impairment of property, plant and equipment | 174,451 | - | +----------------------------------------------------+--------------+--------------+ | Amortisation and impairment of | | 19,081,174 | 145,270 | | intangible assets | | | | +-----------------------------------------+----------+--------------+--------------+ | Operating cash flows before movements in working | (6,330,666) | (6,920,632) | | capital | | | +----------------------------------------------------+--------------+--------------+ | (Increase) in inventories | | (741,999) | (502,683) | +-----------------------------------------+----------+--------------+--------------+ | Decrease/(Increase) in receivables | | 484,198 | (449,863) | +-----------------------------------------+----------+--------------+--------------+ | Increase in trade and other payables | | 1,422,962 | 1,289,638 | +-----------------------------------------+----------+--------------+--------------+ | Net cash outflow from operating | | (5,165,505) | (6,583,540) | | activities | | | | +-----------------------------------------+----------+--------------+--------------+ | Investing activities | | | | +-----------------------------------------+----------+--------------+--------------+ | Interest received | | 365,320 | 998,287 | +-----------------------------------------+----------+--------------+--------------+ | Payments for licences, exploration and | (8,940,449) | (29,193,392) | | | development expenditure | | | | +----------------------------------------------------+--------------+--------------+------------+ | Payments for environmental deposits | | (14,907) | (303,863) | +-----------------------------------------+----------+--------------+--------------+ | Purchases of property, plant and | | (1,529,522) | (1,247,931) | | equipment | | | | +-----------------------------------------+----------+--------------+--------------+ | Net cash used in investing activities | | (10,119,558) | (29,746,899) | +-----------------------------------------+----------+--------------+--------------+ | Financing activities | | | | +-----------------------------------------+----------+--------------+--------------+ | Proceeds on issue of ordinary share | | - | 62,775,554 | | capital | | | | +-----------------------------------------+----------+--------------+--------------+ | Payments for share issue expenses | | - | (3,972,881) | +-----------------------------------------+----------+--------------+--------------+ | Net cash from financing activities | | - | 58,802,673 | +-----------------------------------------+----------+--------------+--------------+ | Net (decrease)/increase in cash and cash | (15,285,063) | 22,472,234 | | | equivalents | | | | +----------------------------------------------------+--------------+--------------+------------+ | Cash and cash equivalents at beginning of year | 25,147,806 | 2,594,152 | | +----------------------------------------------------+--------------+--------------+------------+ | Movement in foreign exchange rate | | (3,670,453) | 81,420 | +-----------------------------------------+----------+--------------+--------------+ | Cash and cash equivalents at end of | | 6,192,290 | 25,147,806 | | year | | | | +-----------------------------------------+----------+--------------+--------------+------------+ Notes to the Preliminary Financial Results Announcements:- 1. Other gains and losses +---------------------------------------------+--------------+-------------+ | | Year ended | Year ended | | | 30 June | 30 June | | | 2009 | 2008 | | | $ | $ | +---------------------------------------------+--------------+-------------+ | Foreign exchange (losses)/gains | (10,688,330) | 1,909,520 | +---------------------------------------------+--------------+-------------+ 2. Earnings per share The calculation of the basic and diluted earnings per share is based on the following data: +------------------------------+---------------+--------------+-------------+ | | | Year Ended | Year Ended | | | | | 30 June | | | | 30 June | 2008 | | | | 2009 | $ | | | | $ | | +------------------------------+---------------+--------------+-------------+ | Earnings | (36,203,861) | (3,800,361) | | Earnings for the purposes of basic and | | | | diluted earnings per share being net profit | | | | attributable to equity holders of the parent | | | +----------------------------------------------+--------------+-------------+ | | | | | +------------------------------+---------------+--------------+-------------+ | | | Number | Number | +------------------------------+---------------+--------------+-------------+ | Number of shares | | | | +------------------------------+---------------+--------------+-------------+ | Weighted average number of ordinary shares | 48,475,411 | 40,572,413 | | for the purposes of basic and diluted | | | | earnings per share | | | +----------------------------------------------+--------------+-------------+ | Basic earnings per share | | (74.68) | (9.37) | | | | cents | cents | +------------------------------+---------------+--------------+-------------+ There are no dilutive instruments. 3. Intangible assets +----------------------------------------+------------+-----------+-----------+ | | Business | Software | Total | | | Licences | $ | $ | | | Held | | | | | $ | | | +----------------------------------------+------------+-----------+-----------+ | Cost | | | | +----------------------------------------+------------+-----------+-----------+ | At 30 June 2007 | 441,394 | 26,826 | 468,220 | +----------------------------------------+------------+-----------+-----------+ | Additions | - | 394,321 | 394,321 | +----------------------------------------+------------+-----------+-----------+ | Exchange differences | - | 86,649 | 86,649 | +----------------------------------------+------------+-----------+-----------+ | At 30 June 2008 | 441,394 | 507,796 | 949,190 | +----------------------------------------+------------+-----------+-----------+ | Additions | - | 41,310 | 41,310 | +----------------------------------------+------------+-----------+-----------+ | Exchange differences | - | (79,623) | (79,623) | +----------------------------------------+------------+-----------+-----------+ | At 30 June 2009 | 441,394 | 469,483 | 910,877 | +----------------------------------------+------------+-----------+-----------+ | Accumulated Amortisation | | +-----------------------------------------------------+-----------------------+ | At 30 June 2007 | (14,713) | (4,316) | (19,029) | +----------------------------------------+------------+-----------+-----------+ | Charge for the year | (14,713) | (124,204) | (138,917) | +----------------------------------------+------------+-----------+-----------+ | Exchange differences | - | (86,270) | (86,270) | +----------------------------------------+------------+-----------+-----------+ | At 30 June 2008 | (29,426) | (214,790) | (244,216) | +----------------------------------------+------------+-----------+-----------+ | Charge for the year | (14,713) | (280,666) | (295,379) | +----------------------------------------+------------+-----------+-----------+ | Impairment | (397,255) | - | (397,255) | +----------------------------------------+------------+-----------+-----------+ | Exchange differences | - | 31,871 | 31,871 | +----------------------------------------+------------+-----------+-----------+ | At 30 June 2009 | (441,394) | (463,585) | (904,979) | +----------------------------------------+------------+-----------+-----------+ | Carrying Amount | | | | +----------------------------------------+------------+-----------+-----------+ | At 30 June 2009 | - | 5,898 | 5,898 | +----------------------------------------+------------+-----------+-----------+ | At 30 June 2008 | 411,968 | 293,006 | 704,974 | +----------------------------------------+------------+-----------+-----------+ Refer to Note 4 for details of the impairment. 4. Mining properties +--------------------+-----------+-------------+-------------+-------------+--------------+ | | Land | Explor. | Mine | Mining | Total | | | Comp. | Expend. | Develop. | Licences | $ | | | Costs | $ | Expend. | $ | | | | $ | | $ | | | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Cost | | | | | | +--------------------+-----------+-------------+-------------+-------------+--------------+ | At 30 June 2007 | - | 1,780,785 | - | - | 1,780,785 | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Additions | 119,771 | 824,016 | 3,645,980 | 24,209,304 | 28,799,071 | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Exchange | 7,141 | - | - | 1,792,337 | 1,799,478 | | differences | | | | | | +--------------------+-----------+-------------+-------------+-------------+--------------+ | At 30 June 2008 | 126,912 | 2,604,801 | 3,645,980 | 26,001,641 | 32,379,334 | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Additions | 534,523 | 2,082,265 | 5,341,995 | - | 7,958,783 | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Exchange | 522 | (113,316) | (405,843) | 106,930 | (411,707) | | differences | | | | | | +--------------------+-----------+-------------+-------------+-------------+--------------+ | At 30 June 2009 | 661,957 | 4,573,750 | 8,582,132 | 26,108,571 | 39,926,410 | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Accumulated | - | - | - | - | - | | Amortisation | | | | | | | At 30 June 2007 | | | | | | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Charge for the | (6,353) | - | - | - | (6,353) | | year | | | | | | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Exchange | (379) | - | - | - | (379) | | differences | | | | | | +--------------------+-----------+-------------+-------------+-------------+--------------+ | At 30 June 2008 | (6,732) | - | - | - | (6,732) | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Charge for the | (145,869) | - | - | - | (145,869) | | year | | | | | | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Impairment | - | (4,573,750) | (8,582,132) | (5,232,459) | (18,388,341) | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Exchange | (28) | - | - | - | (28) | | differences | | | | | | +--------------------+-----------+-------------+-------------+-------------+--------------+ | At 30 June 2009 | (152,629) | (4,573,750) | (8,582,132) | (5,232,459) | (18,540,970) | +--------------------+-----------+-------------+-------------+-------------+--------------+ | Carrying Amount | | | | | | +--------------------+-----------+-------------+-------------+-------------+--------------+ | At 30 June 2009 | 509,328 | - | - | 20,876,112 | 21,385,440 | +--------------------+-----------+-------------+-------------+-------------+--------------+ | At 30 June 2008 | 120,180 | 2,604,801 | 3,645,980 | 26,001,641 | 32,372,602 | +--------------------+-----------+-------------+-------------+-------------+--------------+ The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective mining areas. Amortisation of the costs carried forward for the development phase and the mining licences is not being charged pending the commencement of commercial levels of production. The business licences are being amortised over 30 years, and software over 5 years, and land compensation costs over 2 years. The Company shall start to amortise its mining related intangible assets when the relevant area of interest is capable for commercial production (i.e. when the relevant mining assets are available for use). The development costs incurred on the area of interest prior to commercial production are capitalised/expensed in accordance with the Company's accounting policies applicable. Management has determined that the area of interest (Shenjiaya Project) owned by the Company is yet to be capable for commercial production at the balance sheet date and no amortisation is charged on the relevant mining related intangible assets. Key factors considered but not limited to: i) nominated percentage of design capacity for the mines; ii) mineral recoveries at or near expected levels; and iii) the achievement of continuous production or other output. On 26 August 2009 the Companys 100% owned subsidiary, Global Resource Ventures Limited ("GRV"), signed a Share Purchase Agreement with Cosmos Castle Management Limited, a company incorporated in the British Virgin Islands, to sell all of the issued securities of Westralian Resources Pty Ltd ("Westralian"). The carrying values of assets disposed of were written down to equal the value of proceeds received being the lower of net realisable value and value in use. This has resulted in impairment losses being recognised against the different categories of mining properties as shown in the table above. As the entire project has been disposed of following the sale of Westralian, the Group will no longer receive any future benefit from the capitalised exploration and mine development costs, hence these amounts have been impaired to reflect amounts received. The mining licences embody the value of the project being disposed of and have been impaired to the net value of the consideration being received, as adjusted by the net assets of the entities being disposed. 5. Property Plant and Equipment +-----------+--------+--+-----------+---------------+--+----------+------------+--+-----------+--+ | | | Construction | Leasehold | Motor | Furniture, | Total | | | | in progress | improvements | vehicles | fittings | $ | | | | $ | $ | $ | and | | | | | | | | equipment | | | | | | | | $ | | +-----------+--------+--------------+---------------+-------------+------------+-----------------+ | Cost | | | | | | | +-----------+--------+--------------+---------------+-------------+------------+-----------------+ | At 30 June 2007 | - | 16,567 | 69,845 | 224,879 | 311,291 | +--------------------+--------------+---------------+-------------+------------+-----------------+ | Additions | | - | - | 54,965 | 1,192,966 | 1,247,931 | +-----------+--------+--------------+---------------+-------------+------------+-----------------+ | Exchange | - | - | 7,342 | 10,910 | 18,252 | | differences | | | | | | +--------------------+--------------+---------------+-------------+------------+-----------------+ | Disposals | - | (16,567) | - | - | (16,567) | +--------------------+--------------+---------------+-------------+------------+-----------------+ | At 30 June 2008 | - | - | 132,152 | 1,428,755 | 1,560,907 | +--------------------+--------------+---------------+-------------+------------+-----------------+ | Additions | 208,497 | - | 185,847 | 1,114,896 | 1,509,240 | +--------------------+--------------+---------------+-------------+------------+-----------------+ | Exchange | - | - | (532) | (96,095) | (96,627) | | differences | | | | | | +--------------------+--------------+---------------+-------------+------------+-----------------+ | At 30 June 2009 | 208,497 | - | 317,467 | 2,447,556 | 2,973,520 | +--------------------+--------------+---------------+-------------+------------+-----------------+ | Accumulated depreciation | | | | | +-----------------------------------+------------------+----------+---------------+-----------+ | At 30 June 2007 | - | (13,920) | (14,582) | (42,525) | (71,027) | +-----------------------+-----------+------------------+----------+---------------+-----------+ | Charge for the year | - | - | (3,950) | (118,777) | (122,727) | +-----------------------+-----------+------------------+----------+---------------+-----------+ | Exchange differences | - | - | 1,751 | (11,096) | (9,345) | +-----------------------+-----------+------------------+----------+---------------+-----------+ | Disposals | - | 13,920 | - | - | 13,920 | +-----------------------+-----------+------------------+----------+---------------+-----------+ | At 30 June 2008 | - | - | (16,781) | (172,398) | (189,179) | +-----------------------+-----------+------------------+----------+---------------+-----------+ | Charge for the year | - | - | (16,127) | (228,601) | (244,728) | +-----------------------+-----------+------------------+----------+---------------+-----------+ | Exchange differences | - | - | 58 | (14,299) | (14,241) | +-----------------------+-----------+------------------+----------+---------------+-----------+ | Impairment | - | - | - | (174,452) | (174,452) | +-----------------------+-----------+------------------+----------+---------------+-----------+ | At 30 June 2009 | - | - | (32,850) | (589,750) | (622,600) | +-----------------------+-----------+------------------+----------+---------------+-----------+ | Carrying amount | | | | | | +-----------------------+-----------+------------------+----------+---------------+-----------+ | At 30 June 2009 | 208,497 | - | 284,617 | 1,857,806 | 2,350,920 | +-----------------------+-----------+------------------+----------+---------------+-----------+ | At 30 June 2008 | - | - | 115,371 | 1,256,357 | 1,371,728 | +-----------+--------+--+-----------+---------------+--+----------+------------+--+-----------+--+ No assets are pledged as security for liabilities. Refer to Note 4 for details of the impairment. 6. Trade and other receivables Amounts due after more than one year +------------------------------+----+----------+-------------+--------------+ | | | | 30 June | 30 June 2008 | | | | | 2009 | $ | | | | | $ | | +------------------------------+----+----------+-------------+--------------+ | Prepayments | | | - | 518,095 | | Environmental remediation | | | 319,760 | 303,863 | | deposits | | | | | +------------------------------+----+----------+-------------+--------------+ | | | | 319,760 | 821,958 | +------------------------------+----+----------+-------------+--------------+ | The environmental remediation deposits were paid to the Land and | | Resources Department of Hunan Province. The deposit represents an | | environmental security bond over the eight operating gold mines. The | | environmental deposit remains in place for the duration of the mining | | licence. | +------------------------------+----+----------+-------------+--------------+ 7. Inventories +---------------------------+-------+-----------+------------+--------------+ | | | | 30 June | 30 June 2008 | | | | | 2009 | $ | | | | | $ | | +---------------------------+-------+-----------+------------+--------------+ | Raw materials and stores | | | 596,274 | 360,286 | | - at cost | | | 82,908 | 142,397 | | Work in progress - at | | | 567,567 | - | | cost | | | | | | Finished goods - at cost | | | | | +---------------------------+-------+-----------+------------+--------------+ | | | | 1,246,749 | 502,683 | +---------------------------+-------+-----------+------------+--------------+ 8. Trade and other payables +--------------+--+-----------------------------+------------+------------+ | | | | 30 June | 30 June | | | | | 2009 | 2008 | | | | | $ | $ | +--------------+--+-----------------------------+------------+------------+ | Trade payables | 186,585 | 371,897 | +-----------------------------------------------+------------+------------+ | Other payables and accruals | 2,952,501 | 1,632,995 | +-----------------------------------------------+------------+------------+ | | | | 3,139,086 | 2,004,892 | +--------------+--+-----------------------------+------------+------------+ Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 60 days, (2008: 55 days). The directors consider that the carrying amount of trade and other payables approximates to their fair value. 9. Share Capital +----------------------------------------------+------------+------------+ | | 30 June | 30 June | | | 2009 | 2008 | | | $ | $ | +----------------------------------------------+------------+------------+ | Authorised: | | | +----------------------------------------------+------------+------------+ | 55,000,000 ordinary shares of GBP0.01 each | 1,043,678 | 1,043,678 | +----------------------------------------------+------------+------------+ | | | | +----------------------------------------------+------------+------------+ | Issued and fully paid: | | | +----------------------------------------------+------------+------------+ | 48,475,411 ordinary shares of GBP0.01 each | 919,975 | 919,975 | +----------------------------------------------+------------+------------+ (2008: 48,475,411 ordinary shares of GBP0.01 each) On 7 February 2006, 7,500,000 shares of GBP0.01 ($0.02) each were placed at a premium of GBP0.59 ($1.04) each. The Company has one class of ordinary shares which carries no right to fixed income. On 7 August 2007, 900,000 shares were placed at 140 pence per share to raise GBP1,260,000 to meet immediate working capital needs. On 22 October 2007 25,025,416 million shares were placed at 120 pence per share to raise GBP30,000,000 to secure the transfer of the eight gold mines and then to invest in the consolidation and development of the existing mining activities. Costs of $3,972,883 arose on the placement of the shares. 10. Contingent liabilities There were no material contingent liabilities of the Group or Company at the Balance Sheet date. 11. Related party transactions Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Transactions between the Group and related parties are disclosed below. Trading transactions During the year, Group companies entered into the following transactions with related parties who are not members of the Group: +---------------------------------+----------+---------+---------+----------+ | | Purchase of | Amounts owed to | | | goods / | related parties | | | services | | +---------------------------------+--------------------+--------------------+ | | 2009 | 2008 | 2009 | 2008 | | | $ | $ | $ | $ | +---------------------------------+----------+---------+---------+----------+ | Bowlane Nominees Ltd | 343,200 | 295,096 | - | - | +---------------------------------+----------+---------+---------+----------+ | Jinan Limited | 288,000 | 242,776 | - | - | +---------------------------------+----------+---------+---------+----------+ | Metallurgical Management | 32,800 | 20,655 | - | - | | Services (Pty) Ltd | | | | | +---------------------------------+----------+---------+---------+----------+ | Wildewood Limited | 19,000 | 26,000 | - | - | +---------------------------------+----------+---------+---------+----------+ | Linq Corporate Pty Ltd | 113,200 | 72,000 | - | - | +---------------------------------+----------+---------+---------+----------+ Bowlane Nominees Ltd and Immo Services (WA) Pty Ltd are companies that provide managerial services to the Group, on behalf of Frank Vanspeybroeck, a director of China Goldmines plc. USD$343,200 (2008: USD$295,096) was paid in accordance with his agreed service agreement. Jinan Limited is a company that provides financial and accounting services to the Group, on behalf of Marinko Vidovich, a director of China Goldmines plc. $288,000 (2008: $242,776) was paid in accordance with his agreed service agreement. Metallurgical Management Services (Pty) Ltd is a company that provides metallurgical consultancy services to the Group. Evan Kirby is a director of both this company and China Goldmines plc. USD$32,800 (2008: USD$20,655) was paid in accordance with commercial rates. Wildewood Limited is a company in which Mr Worrall is a director and shareholder, supplies consultancy services to the Company for Mr Worrall who is a director of China Goldmines plc. USD$19,000 (2008: USD$26,000) was paid in accordance with commercial rates. Linq Corporate Pty Ltd, a company of which Mr Donner is a director, has provided in the period corporate consultancy services utilising a number of Linq Corporate employees amounting to USD$113,200 (2008 : USD$72,000). All services were provided under normal commercial terms. The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. Remuneration of key management personnel The emoluments of the directors, who are the key management personnel of the Group, were USD$253,000 (2008: USD$284,000). These do not include the amounts paid in consultancy fees noted on the previous page. 12. Events after the Balance Sheet Date On 26 August 2009 the Companys 100% owned subsidiary, Global Resource Ventures Limited ("GRV"), signed a Share Purchase Agreement with Cosmos Castle Management Limited, a company incorporated in the British Virgin Islands, to sell all of the issued securities of Westralian Resources Pty Ltd ("Westralian"). Settlement of the sale occurred on 29 September 2009, from which date Westralian and its 80% owned subsidiary Hunan Westralian Mining Co., Ltd will cease to be consolidated into the Group. GRV will receive total net cash consideration of USD 23,488,674 for the sale of Westralian. The carrying values of assets disposed of were written down to equal the value of proceeds received as at 30 September 2009. The effect on the income statements for the year ending 30 June 2009 is summarised as follows: +--------------------------------------------+--------------+------------+ | | Consolidated | Company | | | $ | $ | +--------------------------------------------+--------------+------------+ | Impairment of investment in subsidiary | - | 195,224 | +--------------------------------------------+--------------+------------+ | Impairment of loans to related parties | - | 24,171,937 | +--------------------------------------------+--------------+------------+ | Impairment of plant and equipment | 174,552 | - | +--------------------------------------------+--------------+------------+ | Impairment of mining properties | 18,388,341 | - | +--------------------------------------------+--------------+------------+ | Net impact of disposal on income | 18,562,893 | 24,367,161 | | statements | | | +--------------------------------------------+--------------+------------+ 13. Other information The financial information set out above does not constitute group's statutory financial statements for the years ended 30 June 2009 and 30 June 2008 but is derived from them. The 2008 financial statements have been filed with the Registrar of Companies; their report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. Whilst the auditors have not reported on the financial statements for the year ended 30 June 2009, they anticipate issuing an unqualified report which will not contain statements under section 498(2) or (3) of the Companies Act 2006. The statutory accounts for the year ended 30 June 2009 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The financial information set out in this announcement was approved by the Board of Directors on 24 November 2009. Significant Accounting Policies for the year ended 30 June 2009 China Goldmines Plc (the "Company") is a company domiciled in the United Kingdom. The consolidated financial statements of the Company for the year ended 30 June 2009 comprise those of the Company and its subsidiaries (together referred to as the "group") and the group's interest in associates and jointly-controlled entities. The financial statements were authorised for issue by the directors on 24 November 2009. Basis of Preparation The consolidated financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU. The financial statements are presented in USD. They are prepared on the historical cost basis. However, the financial information included in this announcement does not in itself contain sufficient information to comply with IFRS. The accounting policies applied in preparing this financial information are consistent with the group's financial statements for the year ended 30 June 2009. New accounting standards that came into force in the year did not require restatement of comparatives nor had any significant impact on the group's consolidated results or financial position. The preparation of financial statements under IFRS requires management to make judgements, estimates and assumptions about the reported amounts of assets and liabilities, income and expenses and the disclosure of contingent assets and liabilities. The estimates and associated assumptions are based on experience. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on a regular basis. Revisions to accounting estimates are recognised from the period in which the estimates are revised. The consolidated financial statements of the group are prepared for the year ended 30 June 2009. This information is provided by RNS The company news service from the London Stock Exchange END FR PUGRAGUPBGQC
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