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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| European Gold | LSE:EGU | London | Ordinary Share | CA2987741006 | COM SHS NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 807.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
TIDMEGU
RNS Number : 2333C
European Goldfields Ltd
10 November 2009
European Goldfields Limited
Interim Consolidated Financial
Statements
(Unaudited)
For the Three-and Nine-Month Periods Ended
30
September 2009 and 2008
Disclosure of auditor review of interim consolidated financial statements
The interim consolidated financial statements of the Company for the three- and
nine-month periods ended 30 September 2009 and 2008 have not been reviewed by
the auditors of the Company.
+-------------------------------------------------------+------+-+------------+-+-+----------+-+-+-+-+-+-+-+-+----------+
| European Goldfields Limited | | | 30 September | | 31 December |
| Consolidated Balance Sheets | | | | | |
| As at 30 September 2009 and 31 December 2008 | | | | | |
| (Unaudited - Prepared by Management) | | | | | |
| (in thousands of US Dollars, except per share | | | | | |
| amounts) | | | | | |
| | | | | | |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| | | | 2009 | | 2008 |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| | | | $ | | $ |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Assets |Note | | Unaudited | | Audited |
+-------------------------------------------------------+------+-+--------------+--------------------+------------------+
| | | | | | |
+-------------------------------------------------------+------+-+--------------+--------------------+------------------+
| Current assets | | | | | |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Cash and cash equivalents | 12 | | 124,112 | | 170,296 |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Accounts receivable | 12 | | 25,556 | | 20,057 |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Hedge contract | 12 | | 545 | | 10,282 |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Current taxes receivable | | | 4,019 | | 3,820 |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Future tax assets | | | 698 | | 2,004 |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Prepaid expenses | | | 1,053 | | 1,414 |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Inventory | 3 | | 4,663 | | 3,069 |
+-------------------------------------------------------+------+-+--------------+ +--------------+
| | | | 160,646 | | 210,942 |
+-------------------------------------------------------+------+-+--------------+ +--------------+
| | | | | | |
+-------------------------------------------------------+------+-+--------------+------------------------+--------------+
| Non-current assets | | | | | |
+-------------------------------------------------------+------+-+--------------+ +------------------------+
| Property, plant and equipment | 4 | | 104,367 | | 74,401 |
+-------------------------------------------------------+------+-+--------------+ +------------------------+
| Deferred exploration and | 5 | | | | |
| development costs | | | | | |
+-------------------------------------------------------+------+-+--------------+ +------------------------+
| Greek production stage mineral | | | 24,417 | | 26,652 |
| properties | | | | | |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Greek development stage mineral | | | 404,897 | | 403,907 |
| properties | | | | | |
+-------------------------------------------------------+------+-+--------------+ +----------------+
| | | | 429,314 | | 430,559 |
+-------------------------------------------------------+------+-+--------------+----------------------+----------------+
| Romanian development stage | | | 49,880 | | 45,187 |
| mineral properties | | | | | |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Turkish exploration stage | | | 1,207 | | 456 |
| mineral properties | | | | | |
+-------------------------------------------------------+------+-+------------+ +--------------+
| | | | 480,401 | | 476,202 |
+-------------------------------------------------------+------+-+------------+ +--------------+
| | | | | | |
+-------------------------------------------------------+------+-+------------+--------------------------+--------------+
| Investment in associates | 6 | | 2,062 | | 2,075 |
+-------------------------------------------------------+------+-+--------------+ +------------------------+
| | | | | | |
+-------------------------------------------------------+------+-+--------------+ +------------------------+
| Future tax assets | | | 2,394 | | 2,475 |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| | | | | | |
+-------------------------------------------------------+------+-+----------------+ +------------+
| | | | 749,870 | | 766,095 |
+-------------------------------------------------------+------+-+----------------+ +------------+
| | | | | | |
+-------------------------------------------------------+------+-+----------------+------------------------+------------+
| Liabilities | | | | | |
+-------------------------------------------------------+------+-+--------------+ +------------------------+
| | | | | | |
+-------------------------------------------------------+------+-+--------------+ +------------------------+
| Current liabilities | | | | | |
+-------------------------------------------------------+------+-+--------------+ +------------------------+
| Accounts payable and accrued | 12 | | 13,790 | | 16,263 |
| liabilities | | | | | |
+-------------------------------------------------------+------+-+--------------+ +------------------------+
| Current taxes payable | | | - | | - |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Future tax liabilities | 7 | | 185 | | 3,496 |
+-------------------------------------------------------+------+-+----------------+ +------------+
| | | | 13,975 | | 19,759 |
+-------------------------------------------------------+------+-+----------------+ +------------+
| | | | | | |
+-------------------------------------------------------+------+-+----------------+------------------------+------------+
| Non-current liabilities | | | | | |
+-------------------------------------------------------+------+-+--------------+ +------------------------+
| Future tax liabilities | 7 | | 90,665 | | 90,294 |
+-------------------------------------------------------+------+-+--------------+ +------------------------+
| Asset retirement obligation | 8 | | 7,033 | | 6,937 |
+-------------------------------------------------------+------+-+--------------+--------------+------------------------+
| Deferred revenue | 9 | | 56,184 | | 58,496 |
+-------------------------------------------------------+------+-+--------------+----------------------------+----------+
| | | | 153,882 | | 155,727 |
+-------------------------------------------------------+------+-+----------------+ +----------+
| | | | | | |
+-------------------------------------------------------+------+-+----------------+--------------------------+----------+
| Non-controlling interest | | | 2,771 | | 2,874 |
+-------------------------------------------------------+------+-+----------------+ +----------------------+
| | | | | | |
+-------------------------------------------------------+------+-+----------------+ +----------------------+
| Shareholders' equity | | | | | |
+-------------------------------------------------------+------+-+----------------+--------------+----------------------+
| Capital stock | 10 | | 540,204 | | 538,316 |
+-------------------------------------------------------+------+-+---------------------------+ +----------------------+
| Contributed surplus | 10 | | 8,826 | | 7,788 |
+-------------------------------------------------------+------+-+---------------------------+ +-------------+
| Accumulated other comprehensive | 10 | | 37,197 | | 43,676 |
| income | | | | | |
+-------------------------------------------------------+------+-+---------------------------+---+-------------+
| Deficit | | | (6,985) | | (2,045) |
+-------------------------------------------------------+------+-+--------------+ +--------------------+
| | | | 579,242 | | 587,735 |
+-------------------------------------------------------+------+-+--------------+ +--------------------+
| | | | | | |
+-------------------------------------------------------+------+-+--------------+ +--------------------+
| | | | 749,870 | | 766,095 |
+-------------------------------------------------------+------+-+------------+-+-+----------+-+-+-+-+-+-+-+-+----------+
The accompanying notes are an integral part of these interim consolidated
financial statements.
Approved by the Board of Directors
(s) Timothy Morgan-Wynne(s) Jeffrey O'Leary
Timothy Morgan-Wynne, Director Jeffrey O'Leary, Director
+---------------------------------------------+------+-+----------+-------+----------+--------+----------+--------+----------+
| European Goldfields Limited | | | 3 months ended | | 9 months ended |
| Consolidated Statements of Profit and Loss | | | 30 September | | 30 September |
| For the three- and nine-month periods ended | | | | | |
| 30 September 2009 and 2008 | | | | | |
| (Unaudited - Prepared by Management) | | | | | |
| (in thousands of US Dollars, except per | | | | | |
| share amounts) | | | | | |
| | | | | | |
+---------------------------------------------+------+-+-----------------------------+--------+------------------------------+
| |Note | | 2009 | | 2008 | | 2009 | | 2008 |
| | | | $ | | $ | | $ | | $ |
+---------------------------------------------+------+-+----------+-------+----------+ +----------+--------+----------+
| Income | | | | | | | | |
+---------------------------------------------+------+-+----------+-------+----------+--------+----------+--------+
| Sales | | | 17,037 | | 16,101 | | 43,983 | | 47,270 |
+---------------------------------------------+------+-+----------+-------+----------+--------+----------+--------+----------+
| Cost of sales | 3 | | (11,586) | | (13,065) | | (32,165) | | (33,518) |
+---------------------------------------------+------+-+----------+-------+----------+--------+----------+--------+----------+
| Depreciation and depletion | | | (1,888) | | (1,643) | | (5,411) | | (4,040) |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Gross profit | | | 3,563 | | 1,393 | | 6,407 | | 9,712 |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Other income | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Hedge contract profit | | | 1,030 | | 1,362 | | 5,248 | | 1,753 |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Interest income | | | 147 | | 1,306 | | 788 | | 4,565 |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Foreign exchange loss | | | (501) | | (2,800) | | (1,664) | | (153) |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Loss on dilution of | | | (135) | | - | | (36) | | - |
| interest in | | | | | | | | | |
| associates | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Share of loss in | | | (52) | | (66) | | (73) | | (102) |
| equity investment | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | 489 | | (198) | | 4,263 | | 6,063 |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Expenses | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Corporate | | | 1,135 | | 1,353 | | 3,204 | | 3,918 |
| administrative and | | | | | | | | | |
| overhead expenses | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Equity-based | | | 1,371 | | 544 | | 2,332 | | 1,547 |
| compensation expense | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Hellas Gold | | | 1,900 | | 2,192 | | 4,665 | | 6,202 |
| administrative and | | | | | | | | | |
| overhead expenses | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Hellas Gold water | | | 782 | | 1,764 | | 2,550 | | 3,855 |
| treatment expenses | | | | | | | | | |
| (non-operating mines) | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Accretion of asset | 8 | | 34 | | 35 | | 96 | | 101 |
| retirement obligation | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Depreciation | | | 162 | | 166 | | 481 | | 506 |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | 5,384 | | 6,054 | | 13,328 | | 16,129 |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Profit/(loss) for the | | | (1,332) | | (4,859) | | (2,658) | | (354) |
| period before income | | | | | | | | | |
| taxes | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Income taxes | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Current taxes | | | (737) | | 1,639 | | (831) | | 1,198 |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Future taxes | | | (1,110) | | (2,090) | | (1,554) | | (1,626) |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | (1,847) | | (451) | | (2,385) | | (428) |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Profit/(loss) for the | | | (3,179) | | (5,310) | | (5,043) | | (782) |
| period after income | | | | | | | | | |
| taxes | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Non-controlling | | | 56 | | 267 | | 103 | | (40) |
| interest | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Profit/(loss) for the | | | (3,123) | | (5,043) | | (4,940) | | (822) |
| period | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Deficit - Beginning | | | (3,862) | | (3,343) | | (2,045) | | (7,564) |
| of period | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Deficit - End of | | | (6,985) | | (8,386) | | (6,985) | | (8,386) |
| period | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Earnings/(loss) per | 19 | | | | | | | | |
| share | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Basic | | | (0.02) | | (0.03) | | (0.03) | | 0.00 |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Diluted | | | (0.02) | | (0.03) | | (0.03) | | 0.00 |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Weighted average | | | | | | | | | |
| number of shares (in | | | | | | | | | |
| thousands) | | | | | | | | | |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Basic | | | 180,513 | | 179,606 | | 180,430 | | 179,586 |
+---------------------------------------------+------+-+----------+ +----------+ +----------+ +----------+
| Diluted | | | 180,513 | | 179,606 | | 180,430 | | 179,586 |
+---------------------------------------------+------+-+----------+-------+----------+--------+----------+--------+----------+
The accompanying notes are an integral part of these interim consolidated
financial statements.
+------------------------------------+---------+-----------+--------------+--------+---------------+-+---------+-+--------------+
| European Goldfields Limited | Capital | | Contributed | | Accumulated | | Deficit | | Total |
| Consolidated Statements of | Stock | | Surplus | | Other | | $ | | $ |
| Equity | $ | | $ | | Comprehensive | | | | |
| As at 30 September 2009 and | | | | | Income | | | | |
| 2008 | | | | | $ | | | | |
| (Unaudited - Prepared by | | | | | | | | | |
| Management) | | | | | | | | | |
| (in thousands of US Dollars, | | | | | | | | | |
| except per share amounts) | | | | | | | | | |
| | | | | | | | | | |
+------------------------------------+---------+-----------+--------------+--------+---------------+-+---------+-+--------------+
| | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Balance | 537,275 | | 5,997 | | 38,295 | | (7,564) | | 574,003 |
| - 31 | | | | | | | | | |
| December | | | | | | | | | |
| 2007 | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Equity-based | - | | 2,888 | | - | | - | | 2,888 |
| compensation | | | | | | | | | |
| expense | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Share | (10) | | - | | - | | - | | (10) |
| issue | | | | | | | | | |
| costs | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Restricted | 1,314 | | (1,314) | | - | | - | | - |
| share | | | | | | | | | |
| units | | | | | | | | | |
| vested | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Share | 77 | | (24) | | - | | - | | 53 |
| options | | | | | | | | | |
| exercised | | | | | | | | | |
| or | | | | | | | | | |
| exchanged | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Change | - | | - | | 3,882 | | - | | 3,882 |
| in fair | | | | | | | | | |
| value | | | | | | | | | |
| cash | | | | | | | | | |
| flow | | | | | | | | | |
| hedge | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Movement | - | | - | | (291) | | - | | (291) |
| in | | | | | | | | | |
| cumulative | | | | | | | | | |
| translation | | | | | | | | | |
| adjustment | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Loss for | - | | - | | - | | (822) | | (822) |
| the | | | | | | | | | |
| period | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| | 1,381 | | 1,550 | | 3,591 | | (822) | | 5,700 |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Balance | 538,656 | | 7,547 | | 41,886 | | (8,386) | | 579,703 |
| - 30 | | | | | | | | | |
| September | | | | | | | | | |
| 2008 | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Equity-based | - | | (100) | | - | | - | | (100) |
| compensation | | | | | | | | | |
| expense | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Share | - | | - | | - | | - | | - |
| issue | | | | | | | | | |
| cost | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Restricted | (341) | | 341 | | - | | - | | - |
| share | | | | | | | | | |
| units | | | | | | | | | |
| vested | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Share | 1 | | - | | - | | - | | 1 |
| options | | | | | | | | | |
| exercised | | | | | | | | | |
| or | | | | | | | | | |
| exchanged | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Change | - | | - | | 2,022 | | - | | 2,022 |
| in fair | | | | | | | | | |
| value | | | | | | | | | |
| cash | | | | | | | | | |
| flow | | | | | | | | | |
| hedge | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Movement | - | | - | | (232) | | - | | (232) |
| in | | | | | | | | | |
| cumulative | | | | | | | | | |
| translation | | | | | | | | | |
| adjustment | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Profit | - | | - | | - | | 6,341 | | 6,341 |
| for the | | | | | | | | | |
| period | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| | (340) | | 241 | | 1,790 | | 6,341 | | 8,032 |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Balance | 538,316 | | 7,788 | | 43,676 | | (2,045) | | 587,735 |
| - 31 | | | | | | | | | |
| December | | | | | | | | | |
| 2008 | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Equity-based | - | | 2,315 | | - | | - | | 2,315 |
| compensation | | | | | | | | | |
| expense | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Share | (28) | | - | | - | | - | | (28) |
| issue | | | | | | | | | |
| costs | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Restricted | 801 | | (801) | | - | | - | | - |
| share | | | | | | | | | |
| units | | | | | | | | | |
| vested | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Share | 1,115 | | (476) | | - | | - | | 639 |
| options | | | | | | | | | |
| exercised | | | | | | | | | |
| or | | | | | | | | | |
| exchanged | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Change | - | | | | (6,426) | | - | | (6,426) |
| in fair | | | | | | | | | |
| value | | | | | | | | | |
| cash | | | | | | | | | |
| flow | | | | | | | | | |
| hedge | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Movement | - | | - | | (53) | | - | | (53) |
| in | | | | | | | | | |
| cumulative | | | | | | | | | |
| translation | | | | | | | | | |
| adjustment | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Loss for | - | | - | | - | | (4,940) | | (4,940) |
| the | | | | | | | | | |
| period | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| | 1,888 | | 1,038 | | (6,479) | | (4,940) | | (8,493) |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| Balance | 540,204 | | 8,826 | | 37,197 | | (6,985) | | 579,242 |
| - | | | | | | | | | |
| 30 September | | | | | | | | | |
| 2009 | | | | | | | | | |
+------------------------------------+---------+ +--------------+ +---------------+ +---------+ +--------------+
| | | | | | | | | | |
+------------------------------------+---------+-----------+--------------+--------+---------------+-+---------+-+--------------+
The accompanying notes are an integral part of these interim consolidated
financial statements.
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| European Goldfields Limited | | 3 months ended | | 9 months ended |
| Consolidated Statements of Cash Flows | | 30 September | | 30 September |
| For the three- and nine-month periods ended | | | | |
| 30 September 2009 and 2008 | | | | |
| (Unaudited - Prepared by Management) | | | | |
| (in thousands of US Dollars, except per | | | | |
| share amounts) | | | | |
+---------------------------------------------+------+------------------------------+--------+------------------------------+
| | Note | 2009 | | 2008 | | 2009 | | 2008 |
| | | $ | | $ | | $ | | $ |
+---------------------------------------------+------+----------+--------+----------+ +----------+--------+----------+
| | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Cash flows from | | | | | | | | |
| operating activities | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Profit/(loss)for the | | (3,123) | | (5,043) | | (4,940) | | (822) |
| period | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Foreign exchange | | (1,163) | | 2,906 | | (430) | | (16) |
| (gain)/loss | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Share of loss in | | 52 | | 66 | | 73 | | 102 |
| equity investment | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Loss on change of | | 135 | | - | | 36 | | - |
| interest in | | | | | | | | |
| associates | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Depreciation | | 1,114 | | 781 | | 3,254 | | 2,230 |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Equity-based | | 1,371 | | 544 | | 2,332 | | 1,547 |
| compensation expense | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Accretion of asset | | 34 | | 35 | | 96 | | 102 |
| retirement obligation | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Current taxation | | 737 | | (1,639) | | 831 | | (1,198) |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Future tax asset | | 1,110 | | 2,090 | | 1,554 | | 1,626 |
| recognised | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Non-controlling | | (56) | | (267) | | (103) | | 40 |
| interest | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Deferred revenue | | (883) | | (1,591) | | (2,312) | | (3,349) |
| recognised | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
| Depletion of mineral | | 1,031 | | 1,029 | | 2,821 | | 2,316 |
| properties | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+--------+----------+--------+----------+
| | | 359 | | (1,089) | | 3,212 | | 2,578 |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Net changes in | 13 | 2,506 | | (5,332) | | (11,003) | | (13,440) |
| non-cash working | | | | | | | | |
| capital | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| | | 2,865 | | (6,421) | | (7,791) | | (10,862) |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Cash flows from | | | | | | | | |
| investing activities | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Deferred exploration | | (1,652) | | (1,420) | | (4,168) | | (4,115) |
| and development | | | | | | | | |
| costs - Romania | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Plant and equipment - | | (20,649) | | (2,971) | | (33,052) | | (13,183) |
| Greece | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Deferred development | | (129) | | (519) | | (1,351) | | (1,944) |
| costs - Greece | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Deferred exploration | | (356) | | (68) | | (699) | | (118) |
| cost - Turkey | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Purchase of land | | - | | - | | (88) | | (2,705) |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Purchase of equipment | | (7) | | (52) | | (133) | | (165) |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Investment in | | - | | - | | - | | (121) |
| subsidiary | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Investment in | | - | | - | | (143) | | (1,858) |
| associates | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| | | (22,793) | | (5,030) | | (39,634) | | (24,209) |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Cash flows from | | | | | | | | |
| financing activities | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Deferred revenue | | - | | - | | - | | 3,563 |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Proceeds from | | - | | - | | 638 | | 54 |
| exercise of share | | | | | | | | |
| options | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Share issue costs | | - | | - | | - | | - |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| | | - | | - | | 638 | | 3,617 |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Effect of foreign | | 1,312 | | (2,001) | | 603 | | 171 |
| currency translation | | | | | | | | |
| on cash | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Increase/(decrease) in cash and cash | | (18,616) | | (13,452) | | (46,184) | | (31,283) |
| equivalents | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Cash and cash equivalents - | | 142,728 | | 201,008 | | 170,296 | | 218,839 |
| Beginning of period | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| | | | | | | | | |
+---------------------------------------------+------+----------+ +----------+ +----------+ +----------+
| Cash and cash equivalents - End of | | 124,112 | | 187,556 | | 124,112 | | 187,556 |
| period | | | | | | | | |
+---------------------------------------------+------+----------+--------+----------+--------+----------+--------+----------+
The accompanying notes are an integral part of these interim consolidated
financial statements.
+-------------------------------------------------+---------+--------+---------+--------+---------+-+--------+
| European Goldfields Limited | 3 months ended | | 9 months ended |
| Consolidated Statements of Other Comprehensive | 30 September | | 30 September |
| Income | | | |
| For the three- and nine-month periods ended | | | |
| 30 September 2009 and 2008 | | | |
| (Unaudited - Prepared by Management) | | | |
| (in thousands of US Dollars, except per share | | | |
| amounts) | | | |
| | | | |
+-------------------------------------------------+----------------------------+--------+--------------------+
| | 2009 | | 2008 | | 2009 | | 2008 |
| | $ | | $ | | $ | | $ |
+-------------------------------------------------+---------+ +---------+ +---------+ +--------+
| | | | | | | | |
+-------------------------------------------------+---------+ +---------+ +---------+ +--------+
| Profit/(loss) for the period | (3,123) | | (5,043) | | (4,940) | | (822) |
+-------------------------------------------------+---------+ +---------+ +---------+ +--------+
| | | | | | | | |
+-------------------------------------------------+---------+ +---------+ +---------+ +--------+
| Other comprehensive | | | | | | | |
| income/(loss) in the | | | | | | | |
| period | | | | | | | |
+-------------------------------------------------+---------+ +---------+ +---------+ +--------+
| Currency translation | (11) | | (314) | | 53 | | (291) |
| adjustment | | | | | | | |
+-------------------------------------------------+---------+ +---------+ +---------+ +--------+
| Change in fair value of | 1,605 | | (1,232) | | 4,940 | | 3,883 |
| cash flow hedge | | | | | | | |
+-------------------------------------------------+---------+ +---------+ +---------+ +--------+
| Comprehensive | (1,529) | | (6,589) | | 53 | | 2,770 |
| income/(loss) | | | | | | | |
+-------------------------------------------------+---------+--------+---------+--------+---------+-+--------+
European Goldfields Limited
Notes to Consolidated Financial Statements
For the three- and nine-month periods ended 30 September 2009 and 2008
(Unaudited - Prepared by Management)
(in thousands of US Dollars, except per share amounts)
1. Nature of operations
European Goldfields Limited (the "Company"), a company incorporated under the
Yukon Business Corporations Act, is a resource company involved in the
acquisition, exploration and development of mineral properties in Greece,
Romania and South-East Europe.
The Company's common shares are listed on the AIM Market of the London Stock
Exchange and on the Toronto Stock Exchange (TSX) under the symbol "EGU".
Greece - The Company holds a 95% interest in Hellas Gold S.A ("Hellas Gold").
Hellas Gold owns three major gold and base metal deposits in Northern Greece.
The deposits are the polymetallic operation at Stratoni, the Olympias project
which contains gold, zinc, lead and silver, and the Skouries copper/gold
porphyry project. Hellas Gold commenced production at Stratoni in September
2005 and commenced selling an existing stockpile of gold concentrates from
Olympias in July 2006. Hellas Gold is applying for permits to develop the
Skouries and Olympias projects.
Romania - The Company owns 80% of the Certej gold/silver project in Romania. In
July 2008, the National Agency of Mineral Resources approved the technical
feasibility study in support of its permit application and issued a new mining
permit for the Certej project.
The underlying value of the deferred exploration and development costs for
mineral properties is dependent upon the existence and economic recovery of
reserves in the future, and the ability to raise long-term financing to complete
the development of the properties.
For the coming year, the Company believes it has adequate funds available to
meet its corporate and administrative obligations and its planned expenditures
on its mineral properties.
These consolidated financial statements have been prepared on a going concern
basis, which assumes the Company will be able to realise assets and discharge
liabilities in the normal course of business for the foreseeable future. These
consolidated financial statements do not include the adjustments that would be
necessary should the Company be unable to continue as a going concern.
2. Significant accounting policies
These interim consolidated financial statements have been prepared on the going
concern basis in accordance with accounting principles generally accepted in
Canada ("Canadian GAAP") using the same accounting policies as those disclosed
in Note 2 to the Company's audited consolidated financial statements for the
years ended 31 December 2008 and 2007.
These interim consolidated financial statements should be read in conjunction
with the Company's audited consolidated financial statements for the years ended
31 December 2008 and 2007.
Goodwill and intangible assets - In February 2008, the Canadian Institute of
Chartered Accountants ("CICA") issued Section 3064 Goodwill and intangible
assets, replacing Section 3062, Goodwill and other intangible assets. It
establishes standards for the recognition, measurement, presentation and
disclosure of goodwill subsequent to its initial recognition and of intangible
assets by profit-oriented enterprises. Standards concerning goodwill are
unchanged from the standards included in the previous Section 3062. The Company
adopted the new standards on 01 January 2009. The adoption of this new Section
had no impact on the consolidated financial statements.
Credit Risk and the Fair Value of Financial Assets and Financial Liabilities
(EIC 173) - In January 2009, the CICA issued EIC 173, "Credit Risk and the Fair
Value of Financial Assets and Financial Liabilities". The EIC requires the
Company to take into account the Company's own credit risk and the credit risk
of the counterparty in determining the fair value of financial assets and
financial liabilities, including derivative instruments. This EIC applies to
interim and annual consolidated financial statements relating to fiscal years
beginning on or after 01 January 2009. The adoption of this new accounting
policy did not have any impact on the Company's consolidated financial
statements.
Mining Exploration Costs (EIC 174) - In March 2009, the CICA issued EIC Abstract
174, "Mining Exploration Costs". The EIC provides guidance on the accounting and
the impairment review of exploration costs. This EIC applies to interim and
annual consolidated financial statements relating to fiscal years beginning on
or after 01 January 2009. The adoption of this new accounting policy did not
have any material impact on the Company's consolidated financial statements.
3.Inventory
This balance comprises the following:
+--------------------------------------------------+-------------+-----------+-----------+
| | 30 | | 31 |
| | September | | December |
+--------------------------------------------------+-------------+-----------+-----------+
| | 2009 | | 2008 |
+--------------------------------------------------+-------------+-----------+-----------+
| | $ | | $ |
+--------------------------------------------------+-------------+ +-----------+
| | | | |
+--------------------------------------------------+-------------+ +-----------+
| Ore mined | 1,184 | | 397 |
+--------------------------------------------------+-------------+ +-----------+
| Metal concentrates | 1,102 | | 767 |
+--------------------------------------------------+-------------+ +-----------+
| Material and supplies | 2,377 | | 1,905 |
+--------------------------------------------------+-------------+ +-----------+
| | 4,663 | | 3,069 |
+--------------------------------------------------+-------------+-----------+-----------+
As at 30 September 2009, the value of total inventory carried at net realisable
value amounted to $Nil (2008 - $767), which includes a write-down of $Nil (2008
- $953).
The components of cost of sales were as follows:
+---------------------------------------------+--------+--------+--------+--------+---------+-+---------+
| | 3 months ended | | 9 months ended30 |
| | 30 September | | September |
+---------------------------------------------+--------------------------+--------+---------------------+
| | 2009 | | 2008 | | 2009 | | 2008 |
| | $ | | $ | | $ | | $ |
+---------------------------------------------+--------+ +--------+ +---------+ +---------+
| | | | | | | | |
+---------------------------------------------+--------+--------+--------+ +---------+ +---------+
| Mining cost | 5,679 | | 6,731 | | 18,053 | | 21,668 |
+---------------------------------------------+--------+--------+--------+ +---------+ +---------+
| Direct labour | 1,148 | | 1,373 | | 3,352 | | 3,814 |
+---------------------------------------------+--------+--------+--------+ +---------+ +---------+
| Indirect labour | 116 | | 242 | | 356 | | 714 |
+---------------------------------------------+--------+--------+--------+ +---------+ +---------+
| Other overhead costs | 1,345 | | 1,968 | | 4,199 | | 5,498 |
+---------------------------------------------+--------+--------+--------+ +---------+ +---------+
| Change in gross inventories | 1,080 | | 893 | | (1,268) | | (2,164) |
+---------------------------------------------+--------+--------+--------+ +---------+ +---------+
| Freight charges | 2,218 | | 1,597 | | 7,473 | | 3,988 |
+---------------------------------------------+--------+--------+--------+ +---------+ +---------+
| Write down of inventory to net realisable | - | | 261 | | - | | - |
| value | | | | | | | |
+---------------------------------------------+--------+ +--------+ +---------+ +---------+
| | 11,586 | | 13,065 | | 32,165 | | 33,518 |
+---------------------------------------------+--------+--------+--------+--------+---------+-+---------+
4.Property, plant and equipment
+---------------------------------------------------------+-----------+---------+----------+--------+-----------+-+---------+
| | Plant | | Vehicles | | Land | | Total |
| | and | | $ | | and | | $ |
| | equipment | | | | buildings | | |
| | $ | | | | $ | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| Cost | | | | | | | |
| - | | | | | | | |
| 2009 | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| At | 46,354 | | 2,062 | | 35,738 | | 84,154 |
| 31 | | | | | | | |
| December | | | | | | | |
| 2008 | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| Additions | 32,340 | | 143 | | 743 | | 33,226 |
| | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| Disposals | - | | - | | - | | - |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| At | 78,694 | | 2,205 | | 36,481 | | 117,380 |
| 30 September | | | | | | | |
| 2009 | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| Accumulated | | | | | | | |
| depreciation | | | | | | | |
| - 2009 | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| At | 4,668 | | 1,284 | | 3,801 | | 9,753 |
| 31 | | | | | | | |
| December | | | | | | | |
| 2008 | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| Provision | 1,156 | | 154 | | 1,950 | | 3,260 |
| for the | | | | | | | |
| period | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| Disposals | - | | - | | - | | - |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| At | 5,824 | | 1,438 | | 5,751 | | 13,013 |
| 30 September | | | | | | | |
| 2009 | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| | | | | | | | |
+---------------------------------------------------------+-----------+ +----------+ +-----------+ +---------+
| Net | 72,870 | | 767 | | 30,730 | | 104,367 |
| book | | | | | | | |
| value | | | | | | | |
| at | | | | | | | |
| 30 September | | | | | | | |
| 2009 | | | | | | | |
+---------------------------------------------------------+-----------+---------+----------+--------+-----------+-+---------+
At 30 September 2009, the net book value amount of plant and equipment not
depreciated amounted to $75,173 (2008 - $43,095)
5.Deferred exploration and development costs
Greek mineral properties:
+------------------------------+----------+----------+----------+--+----------+--+-------------+-+----------+
| | Stratoni | | Olympias | | Skouries | | Other | | Total |
| | $ | | $ | | $ | | exploration | | $ |
| | | | | | | | $ | | |
+------------------------------+----------+ +----------+ +----------+--+-------------+-+----------+
| | | | | | | | | | |
+------------------------------+----------+ +----------+ +----------+--+-------------+-+----------+
| Balance - 31 December 2008 | 26,652 | | 237,362 | | 166,292 | | 253 | | 430,559 |
+------------------------------+----------+ +----------+ +----------+--+-------------+-+----------+
| | | | | | | | | | |
+------------------------------+----------+ +----------+ +----------+--+-------------+-+----------+
| Deferred development costs | 205 | | 355 | | 1,072 | | 24 | | 1,656 |
+------------------------------+----------+ +----------+ +----------+--+-------------+-+----------+
| Depletion of mineral | (2,440) | | (461) | | - | | - | | (2,901) |
| properties | | | | | | | | | |
+------------------------------+----------+ +----------+ +----------+--+-------------+-+----------+
| | (2,235) | | (106) | | 1,072 | | 24 | | (1,245) |
+------------------------------+----------+ +----------+ +----------+--+-------------+-+----------+
| | | | | | | | | | |
+------------------------------+----------+ +----------+ +----------+--+-------------+-+----------+
| Balance - 30 September 2009 | 24,417 | | 237,256 | | 167,364 | | 277 | | 429,314 |
+------------------------------+----------+----------+----------+--+----------+--+-------------+-+----------+
The Stratoni, Skouries and Olympias properties are held by the Company's
95%-owned subsidiary, Hellas Gold. In September 2005, the Stratoni property
commenced production.
Romanian mineral properties:
+-------------------------------------------------------------------------------+-----------+-----------+-------------+--+------------+
| | Certej | | Other | | Total |
| | $ | | exploration | | $ |
| | | | $ | | |
+-------------------------------------------------------------------------------+-----------+ +-------------+ +------------+
| | | | | | |
+-------------------------------------------------------------------------------+-----------+ +-------------+ +------------+
| Balance | 38,832 | | 6,355 | | 45,187 |
| - 31 | | | | | |
| December | | | | | |
| 2008 | | | | | |
+-------------------------------------------------------------------------------+-----------+ +-------------+ +------------+
| | | | | | |
+-------------------------------------------------------------------------------+-----------+ +-------------+ +------------+
| Exploration | 2,766 | | 406 | | 3,172 |
| | | | | | |
+-------------------------------------------------------------------------------+-----------+ +-------------+ +------------+
| Permit | 107 | | - | | 107 |
| acquisition | | | | | |
+-------------------------------------------------------------------------------+-----------+ +-------------+ +------------+
| Project | 1,265 | | 95 | | 1,360 |
| overhead | | | | | |
+-------------------------------------------------------------------------------+-----------+ +-------------+ +------------+
| Depreciation | 43 | | 11 | | 54 |
+-------------------------------------------------------------------------------+-----------+ +-------------+ +------------+
| | 4,181 | | 512 | | 4,693 |
+-------------------------------------------------------------------------------+-----------+ +-------------+ +------------+
| | | | | | |
+-------------------------------------------------------------------------------+-----------+ +-------------+ +------------+
| Balance | 43,013 | | 6,867 | | 49,880 |
| - | | | | | |
| 30 September | | | | | |
| 2009 | | | | | |
+-------------------------------------------------------------------------------+-----------+-----------+-------------+--+------------+
The Certej exploitation licence and the Baita-Craciunesti exploration licence
are held by the Company's 80% owned subsidiary, Deva Gold. Minvest S.A. (a
Romanian state owned mining company), together with three private Romanian
companies, hold the remaining 20% interest in Deva Gold. The Company is
required to fund 100% of all costs related to the exploration and development of
these properties. As a result, the Company is entitled to the refund of such
costs (plus interest) out of future cash flows generated by Deva Gold, prior to
any dividends being distributed to shareholders. The Voia and Cainel exploration
licences are held by the Company's wholly-owned subsidiary, European Goldfields
Deva SRL.
As at the 30 September 2009, the following cost had been incurred on the
remaining Romanian mineral properties:
+-------------------------------------------------------+------------+------------+------------+
| | 30 | | 31 |
| | September | | December |
| | 2009 | | 2008 |
| | $ | | $ |
+-------------------------------------------------------+------------+ +------------+
| | | | |
+-------------------------------------------------------+------------+ +------------+
| Baita-Craciunesti | 3,343 | | 3,312 |
+-------------------------------------------------------+------------+ +------------+
| Voia | 1,816 | | 1,741 |
+-------------------------------------------------------+------------+ +------------+
| Magura Tebii | 168 | | 136 |
+-------------------------------------------------------+------------+ +------------+
| Cainel | 1,540 | | 1,166 |
+-------------------------------------------------------+------------+ +------------+
| | 6,867 | | 6,355 |
+-------------------------------------------------------+------------+------------+------------+
Turkish mineral properties:
+--------------------------------------------+-----------+-----------+------------+-----------+-+------------+
| | Ardala | | Other | | Total |
| | $ | | exploration | | $ |
| | | | $ | | |
+--------------------------------------------+-----------+-----------+------------------------+-+------------+
| | | | | | |
+--------------------------------------------+-----------+ +------------+ +------------+
| Balance - 31 December 2008 | 449 | | 7 | | 456 |
+--------------------------------------------+-----------+-----------+------------+-----------+-+------------+
+-------------------------------------------------------------------------------+-----------+-----------+------------+------------+------------+
| Exploration | 24 | | 25 | | 49 |
| | | | | | |
+-------------------------------------------------------------------------------+-----------+-----------+------------+ +------------+
| Project | 505 | | 59 | | 564 |
| overhead | | | | | |
+-------------------------------------------------------------------------------+-----------+-----------+------------+ +------------+
| Permit | 108 | | 17 | | 125 |
| acquisition | | | | | |
+-------------------------------------------------------------------------------+-----------+-----------+------------+ +------------+
| Depreciation | 11 | | 2 | | 13 |
| | | | | | |
+-------------------------------------------------------------------------------+-----------+ +------------+ +------------+
| | 648 | | 103 | | 751 |
+-------------------------------------------------------------------------------+-----------+ +------------+ +------------+
| | | | | | |
+-------------------------------------------------------------------------------+-----------+ +------------+ +------------+
| Balance | 1,097 | | 110 | | 1,207 |
| - | | | | | |
| 30 September | | | | | |
| 2009 | | | | | |
+-------------------------------------------------------------------------------+-----------+-----------+------------+------------+------------+
The Turkish licenses are held by the Joint Venture Company ("JV"), Pontid
Madencilik. Currently the Company has a 51% interest in all the properties
within the JV and the Company will fund 100% of all costs related to the
development of these properties. Ownership of these properties maybe increased
to 80% by funding to completion of a Bankable Feasibility Study. Any new
concessions within the JV funded to a Bankable Feasibility Study will be 90%
owned by the Company. The owner of the remaining 49% of the properties is Ariana
Resources plc.
6.Investment in associates
+------------------------------------------------------+------------+------------+------------+
| | 30 | | 31 |
| | September | | December |
| | 2009 | | 2008 |
| | $ | | $ |
+------------------------------------------------------+------------+ +------------+
| | | | |
+------------------------------------------------------+------------+ +------------+
| Balance - Beginning of period | 2,075 | | - |
+------------------------------------------------------+------------+ +------------+
| Shares acquired | 143 | | 2,692 |
+------------------------------------------------------+------------+ +------------+
| Share of loss | (74) | | (105) |
+------------------------------------------------------+------------+ +------------+
| Cumulative translation adjustment | (18) | | (517) |
+------------------------------------------------------+------------+ +------------+
| Equity-based compensation expense | - | | 5 |
+------------------------------------------------------+------------+ +------------+
| Share issue cost | (28) | | - |
+------------------------------------------------------+------------+ +------------+
| Loss on change of interest in associates | (36) | | - |
+------------------------------------------------------+------------+ +------------+
| Balance - End of period | 2,062 | | 2,075 |
+------------------------------------------------------+------------+------------+------------+
In January 2008, Hellas Gold acquired a 50% share of Greek Nurseries SA for a
consideration of $834 (EUR530).
In May 2008, the Company subscribed for 20.13% of the issued share capital of
Ariana through a $1,858 (GBP929) private placement of shares. The difference
between the cost of the investment of $1,830 and the underlying net book value
of Ariana is $132 at the date of acquisition. This excess represents additional
fair value assigned to mineral properties of Ariana and will be depleted upon
commencement of mining operations of Ariana. In January 2009, the Company
acquired further shares in Ariana and held 19.87% of the issued share capital.
During September 2009, Ariana carried out a further share placement and as at 30
September 2009, the Company held 16.58% of the issued share capital.
7. Future tax liability
The following table reflects future income tax liabilities:
+-------------------------------------------------------+------------+------------+------------+
| | 30 | | 31 |
| | September | | December |
| | 2009 | | 2008 |
| | $ | | $ |
+-------------------------------------------------------+------------+ +------------+
| | | | |
+-------------------------------------------------------+------------+ +------------+
| Mineral properties | 84,664 | | 85,167 |
+-------------------------------------------------------+------------+ +------------+
| Plant and equipment | 1,979 | | 882 |
+-------------------------------------------------------+------------+ +------------+
| Exploration and development expenditure | 3,088 | | 2,709 |
+-------------------------------------------------------+------------+ +------------+
| Accrued expenses & other | 72 | | 663 |
+-------------------------------------------------------+------------+ +------------+
| Inventory | - | | - |
+-------------------------------------------------------+------------+ +------------+
| Retirement obligation | 862 | | 873 |
+-------------------------------------------------------+------------+ +------------+
| Hedge contract | 185 | | 3,496 |
+-------------------------------------------------------+------------+ +------------+
| | 90,850 | | 93,790 |
+-------------------------------------------------------+------------+ +------------+
| Less: Current portion | (185) | | (3,496) |
+-------------------------------------------------------+------------+ +------------+
| Future income tax liabilities recognised | 90,665 | | 90,294 |
+-------------------------------------------------------+------------+------------+------------+
The majority of the future tax liability arises as a result of the increase in
value placed on the mineral properties held by Hellas Gold on acquisition by the
Company. This future tax liability will reverse as the corresponding mineral
properties are amortised.
8.Asset retirement obligation
Management has estimated the total future asset retirement obligation based on
the Company's net ownership interest in the Olympias, Skouries and Stratoni
mines and facilities. This includes all estimated costs relating to the
Company's obligation to dismantle, remove, reclaim and abandon the facilities
and the estimated time period during which these costs will be incurred in the
future. The following table reconciles the asset retirement obligations as at
30 September 2009 and 31 December 2008:
+-------------------------------------------------------+--------------+------------+------------+
| | 30 September | | 31 |
| | | | December |
+-------------------------------------------------------+--------------+ +------------+
| | 2009 | | 2008 |
+-------------------------------------------------------+--------------+ +------------+
| | $ | | $ |
+-------------------------------------------------------+--------------+ +------------+
| | | | |
+-------------------------------------------------------+--------------+ +------------+
| Asset retirement obligation - Beginning | 6,937 | | 6,805 |
| of period | | | |
+-------------------------------------------------------+--------------+ +------------+
| Accretion expense | 96 | | 132 |
+-------------------------------------------------------+--------------+ +------------+
| Asset retirement obligation - End of | 7,033 | | 6,937 |
| period | | | |
+-------------------------------------------------------+--------------+------------+------------+
As at 30 September 2009, the undiscounted amount of estimated cash flows
required to settle the obligation was $7,805 (31 December 2008 - $7,805). The
estimated cash flow has been discounted using a credit adjusted risk free rate
of 5.04% (2008 - 5.04%). The expected period until settlement is six years.
9. Deferred revenue
In April 2007, Hellas Gold agreed to sell to Silver Wheaton (Caymans) Ltd.
("Silver Wheaton") all of the silver metal to be produced from ore extracted
during the mine-life within an area of some 7 km² around its zinc-lead-silver
Stratoni mine in northern Greece (the "Silver Wheaton Transaction"). The sale
was made in consideration of a prepayment to Hellas Gold of $57.5 million in
cash, plus a fee per ounce of payable silver to be delivered to Silver Wheaton
of the lesser of $3.90 (subject to an inflationary adjustment beginning after
year three) and the prevailing market price per ounce. The current Stratoni
proven and probable silver reserve contains approximately 12 million ounces of
silver.
In April 2007, Hellas Gold entered in an agreement with MRI Trading AG for the
sale of 25,000 wet metric tonnes of gold bearing pyrite concentrate. Hellas Gold
received a prepayment of $2.18 million in cash. A further agreement with MRI
Trading AG was entered into in March 2008, for the sale of a further 23,372 dry
metric tonnes, for which Hellas Gold received a prepayment of $3.56 million in
cash. The remaining balances relating to MRI prepayments were transferred to
current liabilities reflecting the repayment of these amounts to MRI in February
2009. In September 2007, Hellas Gold entered into an agreement with a subsidiary
of Celtic Resources Holdings Plc for the sale of 50,000 wet metric tonnes of
gold bearing pyrite concentrate, for which Hellas Gold received a prepayment of
$4.71 million in cash.
The following table reconciles movements on deferred revenue associated with the
MRI and Celtic Resources prepayments, and the Silver Wheaton transaction:
+--------------------------------------------------------+------------+-----------+-----------+
| | 30 | | 31 |
| | September | | December |
+--------------------------------------------------------+------------+-----------+-----------+
| | 2009 | | 2008 |
+--------------------------------------------------------+------------+-----------+-----------+
| | $ | | $ |
+--------------------------------------------------------+------------+ +-----------+
| | | | |
+--------------------------------------------------------+------------+ +-----------+
| Deferred revenue - Beginning of period | 58,496 | | 65,344 |
+--------------------------------------------------------+------------+ +-----------+
| Additions | - | | 3,564 |
+--------------------------------------------------------+------------+ +-----------+
| Revenue recognised | (2,312) | | (6,399) |
+--------------------------------------------------------+------------+ +-----------+
| Transferred to current liabilities | - | | (4,013) |
+--------------------------------------------------------+------------+ +-----------+
| Deferred revenue - End of period | 56,184 | | 58,496 |
+--------------------------------------------------------+------------+-----------+-----------+
For the nine-month period ended 30 September 2009, Hellas Gold delivered
concentrate containing 558,218 ounces (Year to 31 December 2008 - 1,038,762
ounces) of silver for credit to Silver Wheaton.
10.Capital stock
Authorised:
- Unlimited number of common shares, without par value
- Unlimited number of preferred shares, issuable in series, without par value
Issued and outstanding (common shares - all fully paid)
+-------------------------------------------------------+-------------+-----------+-----------+
| | Number of | | Amount |
| | Shares | | $ |
+-------------------------------------------------------+-------------+ +-----------+
| | | | |
+-------------------------------------------------------+-------------+ +-----------+
| Balance - 31 December 2008 | 179,382,381 | | 538,316 |
+-------------------------------------------------------+-------------+ +-----------+
| | | | |
+-------------------------------------------------------+-------------+ +-----------+
| Restricted share units vested | 205,000 | | 801 |
+-------------------------------------------------------+-------------+ +-----------+
| Share options exercised | 300,000 | | 1,115 |
+-------------------------------------------------------+-------------+ +-----------+
| Share issue costs | - | | (28) |
+-------------------------------------------------------+-------------+ +-----------+
| | 505,000 | | 1,888 |
+-------------------------------------------------------+-------------+ +-----------+
| | | | |
+-------------------------------------------------------+-------------+ +-----------+
| Balance - 30 September 2009 | 179,887,381 | | 540,204 |
+-------------------------------------------------------+-------------+-----------+-----------+
Contributed surplus
+-------------------------------------------------------+------------+-----------+-----------+
| | 30 | | 31 |
| | September | | December |
+-------------------------------------------------------+------------+ +-----------+
| | 2009 | | 2008 |
+-------------------------------------------------------+------------+ +-----------+
| | $ | | $ |
+-------------------------------------------------------+------------+ +-----------+
| | | | |
+-------------------------------------------------------+------------+ +-----------+
| Equity-based compensation expense | 8,248 | | 7,210 |
+-------------------------------------------------------+------------+ +-----------------------+
| Broker warrants | 578 | | 578 |
+-------------------------------------------------------+------------+ +-----------------------+
| | 8,826 | | 7,788 |
+-------------------------------------------------------+------------+-----------+-----------+
Accumulated other comprehensive income
The components of accumulated other comprehensive income were as follows:
+-------------------------------------------------------+------------+-----------+-----------+
| | 30 | | 31 |
| | September | | December |
| | 2009 | | 2008 |
+-------------------------------------------------------+------------+ +-----------+
| | $ | | $ |
+-------------------------------------------------------+------------+ +-----------+
| | | | |
+-------------------------------------------------------+------------+ +-----------+
| Cumulative translation adjustment | 36,837 | | 36,890 |
+-------------------------------------------------------+------------+ +-----------+
| Fair value of cash flow hedge (net of tax) | 360 | | 6,786 |
+-------------------------------------------------------+------------+ +-----------+
| | 37,197 | | 43,676 |
+-------------------------------------------------------+------------+-----------+-----------+
11.Share options, restricted share units and deferred phantom units
Share Option Plan
The Company operates a Share Option Plan (together with its predecessor, the
"Share Option Plan") authorising the directors to grant options to acquire
common shares of the Company to the directors, officers, employees and
consultants of the Company and its subsidiaries, on terms that the Board of
Directors may determine, within the limitations of the Share Option Plan. The
maximum number of common shares of the Company which may be reserved for
issuance for all purposes under the Share Option Plan shall not exceed 15% of
the common shares issued and outstanding from time to time (26,983,107 shares as
at 30 September 2009).
An optionee under the Share Option Plan may elect to dispose of its rights under
all or part of its options (the "Exchanged Rights") in exchange for the
following number of common shares of the Company (or at the Company's option for
cash) in settlement thereof (the "Settlement Common Shares"):
+----------------------+-------------------------------+---------------------------+
| Number of = | Number of Optioned X | (Current Price - Exercise |
| | | Price) |
+----------------------+-------------------------------+---------------------------+
| Settlement | Shares issuable on | Current Price |
+----------------------+-------------------------------+---------------------------+
| Common | exercise of the | |
+----------------------+-------------------------------+---------------------------+
| Shares | Exchanged Rights | |
+----------------------+-------------------------------+---------------------------+
As at 30 September 2009, the following share options were outstanding:
+-----------------------------------------------------------+-----------+--------+----------+
| Expiry date | Number of | | Exercise |
| | Options | | price |
| | | | C$ |
+-----------------------------------------------------------+-----------+ +----------+
| | | | |
+-----------------------------------------------------------+-----------+ +----------+
| 2009 | 360,000 | | 3.07 |
+-----------------------------------------------------------+-----------+ +----------+
| 2009 | 75,000 | | 3.15 |
+-----------------------------------------------------------+-----------+ +----------+
| 2010 | 309,999 | | 2.00 |
+-----------------------------------------------------------+-----------+ +----------+
| 2011 | 66,666 | | 3.25 |
+-----------------------------------------------------------+-----------+ +----------+
| 2011 | 600,000 | | 3.85 |
+-----------------------------------------------------------+-----------+ +----------+
| 2011 | 100,000 | | 4.10 |
+-----------------------------------------------------------+-----------+ +----------+
| 2012 | 250,000 | | 5.66 |
+-----------------------------------------------------------+-----------+ +----------+
| 2012 | 150,000 | | 5.71 |
+-----------------------------------------------------------+-----------+ +----------+
| 2012 | 270,000 | | 5.87 |
+-----------------------------------------------------------+-----------+ +----------+
| 2013 | 50,000 | | 1.99 |
+-----------------------------------------------------------+-----------+ +----------+
| 2013 | 360,000 | | 3.54 |
+-----------------------------------------------------------+-----------+ +----------+
| 2013 | 135,000 | | 5.07 |
+-----------------------------------------------------------+-----------+ +----------+
| 2013 | 165,000 | | 6.80 |
+-----------------------------------------------------------+-----------+ +----------+
| | 2,891,665 | | 4.13 |
+-----------------------------------------------------------+-----------+--------+----------+
During the nine-month period ended 30 September 2009, share options were
granted, exercised and forfeited as follows:
+-----------------------------------------------------------+-----------+----------+----------+
| | Number of | | Weighted |
| | Options | | average |
| | | | exercise |
| | | | price |
| | | | C$ |
+-----------------------------------------------------------+-----------+ +----------+
| | | | |
+-----------------------------------------------------------+-----------+ +----------+
| Balance - 31 December 2008 | 3,491,665 | | 4.01 |
+-----------------------------------------------------------+-----------+ +----------+
| | | | |
+-----------------------------------------------------------+-----------+ +----------+
| Options granted | - | | - |
+-----------------------------------------------------------+-----------+ +----------+
| Options exercised for shares | (300,000) | | 2.67 |
+-----------------------------------------------------------+-----------+ +----------+
| Options forfeited | (300,000) | | 4.18 |
+-----------------------------------------------------------+-----------+ +----------+
| | | | |
+-----------------------------------------------------------+-----------+ +----------+
| Balance - 30 September 2009 | 2,891,665 | | 4.13 |
+-----------------------------------------------------------+-----------+----------+----------+
Of the 2,891,665 (2008 - 3,941,665) share options outstanding as at 30 September
2009, 2,314,999 (2008 - 2,621,669) were fully vested and had a weighted average
exercise price of C$3.85 (2008 - C$3.48) per share. The share options
outstanding as at 30 September 2009, had a weighted average remaining
contractual life of years 2.15 (2008 - 3.27 years).
The weighted average grant date fair value of the NIL share options granted
during the nine-month period ended 30 September 2009 (2008 - 960,000) was C$
NIL (2008 - C$4.78). For outstanding share options which were not fully vested
during the nine-month period ended 30 September 2009, the Company incurred a
total equity-based compensation cost of $703 (2008 - $1,204) of which $520 (2008
- $957) has been recognised as an expense in the income statement and $183 (2008
- $248) has been capitalised to deferred exploration and development costs.
Restricted Share Unit Plan
The Company operates a Restricted Share Unit Plan (the "RSU Plan") authorising
the directors, based on recommendations received from the Compensation
Committee, to grant Restricted Share Units ("RSUs") to designated directors,
officers, employees and consultants. The RSUs are "phantom" shares that rise and
fall in value based on the value of the Company's common shares and are redeemed
for actual common shares on the vesting dates determined by the Board of
Directors when the RSUs are granted. The RSUs vest on the dates below however
upon a change of control of the Company they would typically become 100% vested.
The maximum number of common shares of the Company which may be reserved for
issuance for all purposes under the RSU Plan shall not exceed 2.5% of the common
shares issued and outstanding from time to time (4,497,185 shares as at
30 September 2009).
As at 30 September 2009, the following RSUs were outstanding:
+--------------------------------------------------------+------------+------------+------------+
| Vesting date | Number of | | Grant date |
| | RSUs | | fair value |
| | | | of |
| | | | underlying |
| | | | shares |
| | | | C$ |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| 01 December 2009 | 271,250 | | 3.31 |
+--------------------------------------------------------+------------+ +------------+
| 01 December 2009 | 216,810 | | 3.47 |
+--------------------------------------------------------+------------+ +------------+
| 04 January 2010 | 242,390 | | 2.65 |
+--------------------------------------------------------+------------+ +------------+
| 04 January 2011 | 242,389 | | 2.65 |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| | 972,839 | | 3.02 |
+--------------------------------------------------------+------------+------------+------------+
During the nine-month period ended 30 September 2009, RSUs were granted, vested
and forfeited as follows:
+--------------------------------------------------------+------------+------------+------------+
| | Number of | | Weighted |
| | RSUs | | average |
| | | | grant date |
| | | | fair value |
| | | | of |
| | | | underlying |
| | | | shares |
| | | | C$ |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| Balance - 31 December 2008 | 205,000 | | 4.09 |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| RSUs granted | 1,072,839 | | 2.99 |
+--------------------------------------------------------+------------+ +------------+
| RSUs vested | (205,000) | | 4.09 |
+--------------------------------------------------------+------------+ +------------+
| RSUs forfeited | (100,000) | | 2.74 |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| Balance - 30 September 2009 | 972,839 | | 3.02 |
+--------------------------------------------------------+------------+------------+------------+
The weighted average grant date fair value of underlying shares of the 1,072,839
RSUs granted during the nine-month period ended 30 September 2009 (2008
- 365,000 ) was C$2.99 (2008 - C$5.26).For outstanding RSUs which were not
fully vested during the nine-month period ended 30 September 2009, the Company
incurred a total equity-based compensation cost of $1,612 (2008 - $1,683) of
which $965 (2008 - $590) has been recognised as an expense in the income
statement and $647 (2008 - $1,092) has been capitalised to deferred exploration
and development costs.
Deferred Phantom Unit Plan
The Company operates a Deferred Phantom Unit plan (the "DPU Plan") authorising
the directors based on recommendation by the Human Capital Management Committee
to grant Deferred Phantom Units ("DPUs") to independent eligible directors. The
DPUs are units which gives rise to a right to receive a cash payment the value
of which, on a particular date should be the market value of the equivalent
number of shares at that date. The market value at 30 September 2009 has been
included in current liabilities.
As at 30 September 2009, the following DPUs were outstanding:
+---------------------------------------------------------+----------+-----------+-----------+
| Grant date | Number | | Grant |
| | of | | date |
| | DPUs | | Fair |
| | | | Value of |
| | | | DPUs |
| | | | C$ |
+---------------------------------------------------------+----------+ +-----------+
| | | | |
+---------------------------------------------------------+----------+ +-----------+
| 05 December 2008 | 406,500 | | 1.86 |
+---------------------------------------------------------+----------+ +-----------+
| 23 March 2009 | 9,276 | | 3.63 |
+---------------------------------------------------------+----------+ +-----------+
| 15 May 2009 | 11,568 | | 2.90 |
+---------------------------------------------------------+----------+ +-----------+
| 18 August 2009 | 10,377 | | 3.38 |
+---------------------------------------------------------+----------+ +-----------+
| | | | |
+---------------------------------------------------------+----------+ +-----------+
| | 437,721 | | 1.96 |
+---------------------------------------------------------+----------+-----------+-----------+
During the nine-month period ended 30 September 2009, DPUs were granted and
forfeited as follows:
+---------------------------------------------------------+----------+-----------+-----------+
| | Number | | Fair |
| | of | | Value of |
| | DPUs | | DPUs |
| | | | C$ |
+---------------------------------------------------------+----------+ +-----------+
| | | | |
+---------------------------------------------------------+----------+ +-----------+
| Balance - 31 December 2008 | 406,500 | | 3.24 |
+---------------------------------------------------------+----------+ +-----------+
| | | | |
+---------------------------------------------------------+----------+ +-----------+
| DPUs granted and vested | 31,221 | | 3.24 |
+---------------------------------------------------------+----------+ +-----------+
| DPUs forfeited | - | | - |
+---------------------------------------------------------+----------+ +-----------+
| | | | |
+---------------------------------------------------------+----------+ +-----------+
| Balance - 30 September 2009 | 437,721 | | 4.98 |
+---------------------------------------------------------+----------+-----------+-----------+
Of the 31,221 (2008 - Nil) DPUs granted during the period, 31,221 (2008 - Nil)
were fully vested.
The weighted average grant date fair value cost of the 31,221 DPUs granted
during the nine-month period ended 30 September 2009 (2008 - Nil) was $3.24
(2008 - Nil). The weighted average fair value cost of the 437,721 DPUs as at the
30 September 2009, based on the period end share price, amounted to C$4.98 (2008
- Nil).
12. Financial instruments and financial risk management
The Company's financial instruments consist of cash and cash equivalents,
accounts receivable, restricted cash, accounts payable, accrued liabilities,
embedded derivatives and hedge contracts.
Short-term financial assets are amounts that are expected to be settled within
one year. The carrying amounts in the consolidated balance sheets approximate
fair value because of the short term nature of these instruments.
The embedded derivatives are classified as a short term financial asset.
The carrying amounts for the financial instruments as at 30 September 2009 are
as follows:
+--------------------------------------------------------+------------+------------+------------+
| | 30 | | 31 |
| | September | | December |
| | 2009 | | 2008 |
| | $ | | $ |
+--------------------------------------------------------+------------+ +------------+
| Financial asset | | | |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| Held for trading, measured at fair value | | | |
+--------------------------------------------------------+------------+ +------------+
| Cash and cash equivalents | 124,112 | | 170,296 |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| Loans and receivables, measured at amortised cost | | | |
+--------------------------------------------------------+------------+ +------------+
| Accounts receivable | 25,556 | | 20,057 |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| Derivative financial instruments - measured at fair | | | |
| value | | | |
+--------------------------------------------------------+------------+ +------------+
| Designated as cash flow hedge | | | |
+--------------------------------------------------------+------------+ +------------+
| Lead hedging contracts | 545 | | 10,282 |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| Financial liabilities | | | |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| Other liabilities, measured at amortised costs | | | |
+--------------------------------------------------------+------------+ +------------+
| Accounts payable, accrued liabilities and income taxes | 13,790 | | 16,263 |
| payable | | | |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+------------+------------+
Credit risk - Credit risk represents the financial loss the Company would suffer
if the Company's counterparties to a financial instrument, in owing an amount to
the Company, fail to meet or discharge their obligation to the Company.
Financial instruments that potentially subject the Company to concentration of
credit risk consist of cash and cash equivalents, accounts receivable and
hedging contracts. The cash equivalents consist mainly of short-term
investments, such as money market deposits. The Company does not invest in
asset-backed commercial papers and has deposited the cash equivalents only with
the largest banks within a particular region or with top rated institutions.
As at 30 September 2009, the cash and cash equivalent comprises the following:
+--------------------------------------------------------+------------+------------+------------+
| | 30 | | 31 |
| | September | | December |
| | 2009 | | 2008 |
| | $ | | $ |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| Interest bearing bank accounts | 112,920 | | 123,297 |
+--------------------------------------------------------+------------+ +------------+
| Short-term deposits | 11,192 | | 46,999 |
+--------------------------------------------------------+------------+ +------------+
| | 124,112 | | 170,296 |
+--------------------------------------------------------+------------+------------+------------+
The Company has accounts receivable from trading counterparties to whom
concentrate products are sold. Where traders are chosen as counterparties, only
the larger and most financially secure metal trading groups are dealt with. The
Company may also transact agreements with trading groups who have direct
interests in smelting capacity, or direct to the smelters themselves.
Of the total trade receivables as at 30 September 2009, 5 (31 December 2008 - 3)
customers represented 96% (31 December 2008 - 90%) of the total. The Company
does not anticipate any loss for non-performance.
As at 30 September 2009, the accounts receivable comprises the following:
+--------------------------------------------------------+------------+------------+------------+
| | 30 | | 31 |
| | September | | December |
| | 2009 | | 2008 |
| | $ | | $ |
+--------------------------------------------------------+------------+ +------------+
| | | | |
+--------------------------------------------------------+------------+ +------------+
| Trade receivables | 6,246 | | 4,986 |
+--------------------------------------------------------+------------+ +------------+
| Value added taxes recoverable | 17,726 | | 11,780 |
+--------------------------------------------------------+------------+ +------------+
| Other accounts receivable | 1,584 | | 3,291 |
+--------------------------------------------------------+------------+ +------------+
| | 25,556 | | 20,057 |
+--------------------------------------------------------+------------+------------+------------+
As at the 30 September 2009, the Company considers its accounts receivable,
excluding Value Added Taxes recoverable and other accounts receivable, to be
aged as follows:
+-----------------------------------------------------+-------------+------------+------------+
| Ageing | 30 | | 31 |
| | September | | December |
| | 2009 | | 2008 |
| | $ | | $ |
+-----------------------------------------------------+-------------+ +------------+
| | | | |
+-----------------------------------------------------+-------------+ +------------+
| Current | 3,295 | | 1,807 |
+-----------------------------------------------------+-------------+ +------------+
| Past due (1-30 days) | 3,589 | | 2,632 |
+-----------------------------------------------------+-------------+ +------------+
| Past due (31-60 days) | - | | 417 |
+-----------------------------------------------------+-------------+ +------------+
| Past due (more than 60 days) | (638) | | 130 |
+-----------------------------------------------------+-------------+ +------------+
| | 6,246 | | 4,986 |
+-----------------------------------------------------+-------------+------------+------------+
Interest rate risk - The Company is exposed to interest rate risk arising from
fluctuations in interest rates on its cash equivalents. The Company seeks to
maximise returns on cash equivalents, without risking capital values. The
Company's objectives of managing its cash and cash equivalents are to ensure
sufficient funds are maintained on hand at all times to meet day to day
requirements and to place any amounts which are considered in excess of day to
day requirements on short-term deposits with the Company's banks so they earn
interest. Upon placing amounts of cash and cash equivalents on short-term
deposits, the Company uses top rated institutions and ensures that access to the
amounts can be gained at short notice. During the nine-month period ended 30
September 2009, the Company earned interest income of $788 (30 September 2008 -
$4,565) and $147 for the three-month period (30 September 2008 - $1,306) on cash
and cash equivalents, based on rates of returns for the nine-month period
between 0.15% and 3.59% (0.50% and 5.42% - 30 September 2008) and for the
three-month period between 0.15% and 1.23% (0.50% and 5.04% - 30 September
2008).
Currency risk - The Company is exposed to currency risk on sales, purchases and
cash holdings that are denominated in a currency other than the functional
currencies of the individual entities in the group. As at the 30 September 2009,
the Company held the equivalent of $4,005 in foreign currencies. These balances
are primarily made up of Euro and Canadian dollar.
For the nine-month period ended 30 September 2009 the Company recorded a foreign
exchange loss of $1,664 compared to a loss of $153 in the corresponding period
to 30 September 2008; and for the three-month period ended 30 September 2009, a
loss of $501 compared to a loss of $2,800 for the comparable period in 2008,
mainly due to the strengthening of the Euro against the US dollar for both the
nine and three-month period ended 30 September 2009.
The Company publishes its consolidated financial statements in US dollars and as
a result, it is also subject to foreign exchange translation risk in respect of
assets and liabilities nominated in Euros in its foreign operations.
Liquidity risk - Liquidity risk is the risk that the Company will not be able to
meet its financial obligations when they become due.
The Company manages its liquidity risk by ensuring there is sufficient capital
to meet short and long term business requirements after taking into account cash
flows from operations and holdings of cash and cash equivalents. The Company
believes that these sources will be sufficient to cover the likely short to
medium term requirements. Senior management is also actively involved in the
review and approval of planned expenditures by regularly monitoring cash flows
from operations and anticipated investing and financing activities.
The Company does not have any borrowing or debt facilities and settles its
obligations out of cash and cash equivalents. The ability to do this relies on
the Company collecting its accounts receivable in a timely manner and
maintaining cash on hand.
Financial liabilities consist of trade payables, accrued liabilities and income
taxes payable. As at 30 September 2009, the Company's trade payables and accrued
liabilities amounted to $13,790 (31 December 2008 - $16,263), all which fall due
for payment within 12 months of the balance sheet date. The average credit
period taken during the nine-month period ended 30 September 2009 was 30
days (30 days - 31 December 2008).
Commodity Price Risk - The value of the Company's mineral resource properties is
related to the prices of gold, copper, zinc, lead and silver and outlook for
these commodities.
Gold prices historically have fluctuated widely and are affected by numerous
factors outside of the company's control, including, but not limited to,
industrial and retail demand, central bank lending, forward sales by producers
and speculators, levels of worldwide production, short-term changes in supply
and demand because of speculative investing activities, macro-economic and
political variables, and certain other factors related specifically to gold.
Base metal prices have historically tended to be driven more by the demand and
supply fundamentals for each metal. However, levels of speculative activity in
the base metals market have increased in recent years.
The profitability of the Company's operations is highly correlated to the market
price of its commodities in particular gold. To the extent that these prices
increase, asset values increase and cash flows improve; conversely, declines in
metal prices directly impact value and cash flows. A protracted period of
depressed prices could impair the Company's operations and development
opportunities, and significantly erode shareholder value.
The Company has completed a sensitivity analysis to estimate the impact on net
profit of a 5% change in foreign exchange rates, a 1% change in interest rates
and a 10% change in commodity prices during the period ended 30 September 2009
and 2008. The results of the sensitivity analysis can be seen in the following
table:
+------------------------------------------------+------------------+--------+--------+---------+-------+--------+------+---------+
| | 3 months ended | 9 months ended |
| | 30 September | 30 September |
+------------------------------------------------+------------------------------------------------------+-------------------------+
| Impact on profit/(loss) (+/-) | 2009 | | 2008 | | 2009 | | 2008 |
| | $ | | $ | | $ | | $ |
+-------------------------------------------------------------------+--------+ +---------+ +--------+ +---------+
| | | | | | | | |
+-------------------------------------------------------------------+--------+--------+---------+ +--------+ +---------+
| Change of + 5 % US$ : EUR foreign exchange rate | 894 | | 1,792 | | 2,013 | | 3,277 |
+-------------------------------------------------------------------+--------+--------+---------+ +--------+ +---------+
| Change of - 5 % US$ : EUR foreign exchange rate | (907) | | (1,762) | | 2,026 | | (3,277) |
+-------------------------------------------------------------------+--------+--------+---------+ +--------+ +---------+
| Change of +/- 1% in interest rates | 221 | | 342 | | 697 | | 1,051 |
+-------------------------------------------------------------------+--------+--------+---------+ +--------+ +---------+
| Change of +/- 10% in commodities prices | 1,699 | | 1,112 | | 7,273 | | 6,368 |
+-------------------------------------------------------------------+--------+--------+---------+-------+--------+ +---------+
| | | | | | | | |
+------------------------------------------------+------------------+--------+--------+---------+-------+--------+------+---------+
Limitations of sensitivity analysis - The above table demonstrates the effect of
either a change in foreign exchange rates, interest rates or commodities prices
in isolation. In reality, there is a correlation between the two factors.
Additionally, the financial position of the Company may vary at the time that a
change in either of these factors occurs, causing the impact on the Company's
results to differ from that shown above.
Hedging and specific commitments - The Company enters into financial
transactions in the normal course of business and in line with Board guidelines
for the purpose of hedging and managing its expected exposure to commodity
prices. There are a number of financial institutions which offer metal hedging
services. As with cash deposits, the Company deals with highly rated banks and
in addition, those institutions who have demonstrated long term commitment to
the mining sector. The Company has one counterparty relating to the remaining
lead hedge contracts. If this counterparty were unable to honour its
obligations under the hedge contracts, the Company would be exposed up to the
entire value of the hedge stated in the accounts and would be exposed to the
difference between the hedge and the then current market price at the date of
the settlement of the hedged item. The hedges below are treated as cash flow
hedges in accordance with CICA 3865: Hedges.
Lead hedging contracts - As at 30 September 2009, the Company had entered into
forward hedging arrangements over tonnes of lead, using options to provide a
minimum: maximum price exposure. The hedging contracts are put/call option
collar contracts with maturity dates between 02 January 2009 and 05 January 2010
where the fair value amounted to $545 (31 December 2008 - $10,282), established
by reference to market prices for lead.
+--------------------------------------------------------------------+-------------+
| | 30 |
| | September |
| | 2009 |
+--------------------------------------------------------------------+-------------+
| | |
+--------------------------------------------------------------------+-------------+
| Lead tonnes | 1,800 |
+--------------------------------------------------------------------+-------------+
| | |
+--------------------------------------------------------------------+-------------+
| US dollar price ($/tonne) - Put | 2,500 |
+--------------------------------------------------------------------+-------------+
| US dollar contract amount ($'000) - Put | 4,500 |
+--------------------------------------------------------------------+-------------+
| | |
+--------------------------------------------------------------------+-------------+
| US dollar price ($/tonne) - Call | 3,500 |
+--------------------------------------------------------------------+-------------+
| US dollar contract amount ($'000) - Call | 6,300 |
+--------------------------------------------------------------------+-------------+
| | |
+--------------------------------------------------------------------+-------------+
During the nine and three-months period ended 30 September 2009, the Company
recorded income relating to its lead hedging activities of $5,248 (2008 -
$1,753) and $1,030 (2008 - $1,362) respectively.
13.Supplementary cash flow information
+------------------------------------------+--------+--------+----------+--------+----------+--------+----------+
| | 3 months ended | | 9 months ended |
| | 30 September | | 30 September |
+------------------------------------------+----------------------------+--------+------------------------------+
| | 2009 | | 2008 | | 2009 | | 2008 |
+------------------------------------------+--------+--------+----------+ +----------+--------+----------+
| | $ | | $ | | $ | | $ |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| Changes in non-cash operating accounts: | | | | | | | |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| Accounts receivable, prepaid expenses | 2,497 | | 7,462 | | (5,334) | | 3,729 |
| and supplies | | | | | | | |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| Accounts payable | 282 | | (1,487) | | (3,325) | | (1,366) |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| Taxation | (831) | | (11,831) | | (831) | | (13,227) |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| Inventory | 558 | | 524 | | (1,513) | | (2,576) |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| | 2,506 | | (5,332) | | (11,003) | | (13,440) |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| | | | | | | | |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| Supplementary disclosure of non-cash | | | | | | | |
| transactions: | | | | | | | |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| Share options and restricted share units | 601 | | 1,024 | | 2,315 | | 2,888 |
| issued for non-cash consideration | | | | | | | |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| Exercise of share options - Transfer | - | | - | | (476) | | (24) |
| from contributed surplus to share | | | | | | | |
| capital | | | | | | | |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| Vesting of restricted share units | - | | - | | (801) | | (1,314) |
+------------------------------------------+--------+ +----------+ +----------+ +----------+
| | | | | | | | |
+------------------------------------------+--------+--------+----------+--------+----------+--------+----------+
14. Capital Risk Management
The Company's objectives when managing capital is to maintain its ability to
continue as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to ensure sufficient resources are available
to meet day to day operating requirements.
The Company's Board of Directors takes full responsibility for managing the
Company's capital and does so through quarterly board meetings, review of
financial information, and regular communication with Officers and senior
management.
In order to maximise ongoing development efforts, the company does not pay out
dividends.
The Company's investment policy is to invest its cash in high-grade investment
securities with varying terms and maturity, selected with regards to the
expected timing of expenditures from continuing operations.
The Company expects its current capital resources will be sufficient to carry
out its plans and operations through its current operating period.
The Company is not subject to externally imposed capital requirements and there
has been no change in the overall capital risk management as at 30 September
2009.
Capital under management was as follows:
+-----------------------------------------------+--------------+------------+------------+
| | 30 | | 31 |
| | September | | December |
| | 2009 | | 2008 |
+-----------------------------------------------+--------------+------------+------------+
| | $ | | $ |
+-----------------------------------------------+--------------+ +------------+
| | | | |
+-----------------------------------------------+--------------+ +------------+
| Capital stock | 540,204 | | 538,316 |
+-----------------------------------------------+--------------+ +------------+
| Contributed surplus | 8,826 | | 7,788 |
+-----------------------------------------------+--------------+ +------------+
| Accumulated other comprehensive income | 37,197 | | 43,676 |
+-----------------------------------------------+--------------+ +------------+
| Deficit | (6,985) | | (2,045) |
+-----------------------------------------------+--------------+ +------------+
| | 579,242 | | 587,735 |
+-----------------------------------------------+--------------+------------+------------+
15.Commitments
The Company has spending commitments of $236 (GBP166) per year (plus service
charges and value added tax) for a term of ten years under the lease for its
office in London, England, which commenced in April 2004. The rent was subject
to an upward only review in April 2009, for which the new rent became effective
from November 2008.
Hellas Gold has spending commitments of $142 (EUR104) per year for a term of 9
years under the lease for its office in Athens, Greece, which commenced in
December 2007. The rent will be reviewed on the second anniversary of the
commencement of the term to reflect any increase in rents in the market.
As at 30 September 2009, Hellas Gold had entered into off-take agreements
pursuant to which Hellas Gold agreed to sell 45,388 dmt of zinc concentrates,
10,494 dmt of lead/silver concentrates and 128,832 dmt of gold concentrates
until the financial year ending 2012.
During 2007, Hellas Gold entered into purchase agreements with Outotec Minerals
OY for long-lead time equipment for the Skouries project with a cost of $50,474
(EUR34,470) which is to be paid by the end of 2009. As at 30 September 2009,
$46,820 (EUR31,974) of the commitment had been paid.
16.Transactions with related parties
During the nine and three-month periods ended 30 September 2009, Hellas Gold
incurred costs of $24,768 (2008 - $28,651) and $6,945 (2008 - $10,393)
respectively for management, technical and engineering services received from a
related party, Aktor S.A., a 5% shareholder in Hellas Gold. As at 30 September
2009, Hellas Gold had accounts payable of $8,673 (2008 - $4,216) to Aktor S.A.
These expenses were contracted in the normal course of operations and are
recorded at the exchange amount agreed by the parties.
17.Segmented information
The Company has one operating segment: the acquisition, exploration and
development of precious and base metal mineral resources properties located in
Greece, Romania and Turkey.
Geographic segmentation of property, plant and equipment, deferred exploration
and development costs and operating liabilities is as follows:
+------------------------------------------------+--------------+-----------+-----------+
| | 30 September | | 31 |
| | | | December |
+------------------------------------------------+--------------+-----------+-----------+
| | 2009 | | 2008 |
+------------------------------------------------+--------------+-----------+-----------+
| | $ | | $ |
+------------------------------------------------+--------------+ +-----------+
| Revenue | | | |
+------------------------------------------------+--------------+ +-----------+
| Canada | - | | - |
+------------------------------------------------+--------------+ +-----------+
| Greece | 43,983 | | 60,044 |
+------------------------------------------------+--------------+ +-----------+
| Romania | - | | - |
+------------------------------------------------+--------------+ +-----------+
| Turkey | - | | - |
+------------------------------------------------+--------------+ +-----------+
| United Kingdom | - | | - |
+------------------------------------------------+--------------+ +-----------+
| | 43,983 | | 60,044 |
+------------------------------------------------+--------------+ +-----------+
| | | | |
+------------------------------------------------+--------------+ +-----------+
| Property, plant and equipment, deferred | | | |
| exploration | | | |
| and development costs | | | |
+------------------------------------------------+--------------+ +-----------+
| Canada | - | | - |
+------------------------------------------------+--------------+ +-----------+
| Greece | 530,540 | | 501,852 |
+------------------------------------------------+--------------+ +-----------+
| Romania | 52,712 | | 47,946 |
+------------------------------------------------+--------------+ +-----------+
| Turkey | 1,265 | | 496 |
+------------------------------------------------+--------------+ +-----------+
| United Kingdom | 251 | | 309 |
+------------------------------------------------+--------------+ +-----------+
| | 584,768 | | 550,603 |
+------------------------------------------------+--------------+ +-----------+
| | | | |
+------------------------------------------------+--------------+ +-----------+
| Operating liabilities | | | |
+------------------------------------------------+--------------+ +-----------+
| Canada | 2,038 | | 1,503 |
+------------------------------------------------+--------------+ +-----------+
| Greece | 10,799 | | 14,084 |
+------------------------------------------------+--------------+ +-----------+
| Romania | 476 | | 252 |
+------------------------------------------------+--------------+ +-----------+
| Turkey | 73 | | 80 |
+------------------------------------------------+--------------+ +-----------+
| United Kingdom | 404 | | 344 |
+------------------------------------------------+--------------+ +-----------+
| | 13,790 | | 16,263 |
+------------------------------------------------+--------------+-----------+-----------+
18. Pension plans and other post-retirement benefits
The company's subsidiary, European Goldfields (Services) Limited, maintains a
defined contribution pension plan for its employees. The defined contribution
pension plan provides pension benefits based on accumulated employee and Company
contributions. Company contributions to these plans are a set percentage of
employees' annual income and may be subject to certain vesting requirements. The
cost of defined contribution benefits is expensed as earned by employees.
As at 30 September 2009, the company recognised the following costs:
+---------------------------------------------+----------------------+--------+--------+--------+--------+------+--------+
| | 3 months ended | | 9 months ended |
| | 30 September | | 30 September |
+---------------------------------------------+----------------------------------------+ +------------------------+
| | 2009 | | | 2008 | 2009 | | 2008 |
+---------------------------------------------+----------------------+ +--------+--------+--------+ +--------+
| | $ | | | $ | $ | | $ |
+---------------------------------------------+----------------------+ +--------+--------+--------+ +--------+
| | | | | | | | |
+---------------------------------------------+----------------------+ + +--------+--------+ +--------+
| Defined contribution plans | 61 | | | 65 | 161 | | 190 |
+---------------------------------------------+----------------------+--------+--------+--------+--------+------+--------+
19.Earnings per share
The calculation of the basic and diluted earnings per share attributable to
holders of the Company's common shares is based as follows:
[*** UNPARSEABLE TABLE ***]
20.Reclassification of comparative figures
Certain comparative figures have been reclassified to conform to the current
year's presentation.
21.Legal proceedings
In June 2005, certain residents of Stratoniki village submitted a request for
the annulment of the Greek government's joint ministerial decision approving the
environmental impact study for the Stratoni mine (the "JMD Approval"). In
November 2005, the same petitioners submitted a request for the annulment of the
decision of the Minister of Development approving the Technical Study for the
exploitation of the Mavres Petres mine that forms part of the Stratoni complex
(the "MOD Approval"). The JMD Approval and the MOD Approval are necessary for
the continued operation of the Stratoni mine. In both cases the petitioners
alleged a lack of legal basis for the approvals and potential harm to the
environment and their properties. The Greek government, supported by the
Company, the Association of Extractive Companies, and two workers' unions, has
taken a position that the approvals are valid. In December 2005 the petitioners
requested an injunction to stop work on the Stratoni project pending the hearing
of the requests for annulment, but the court rejected the request. A hearing on
both requests for annulment will be held shortly. The management of the Company
believes that both requests for annulment are unfounded and unlikely to succeed.
22.New accounting pronouncements
Business Combination, Consolidated Financial Statements and non controlling
interest - In January 2009, the CICA issued Handbook Sections 1582 - Business
Combinations, 1601 - Consolidated Financial Statements and 1602 -
Non-controlling Interests which replace CICA Handbook Sections 1581 - Business
Combinations and 1600 - Consolidated Financial Statements. Section 1582
establishes standards for the accounting for business combinations that is
equivalent to the business combination accounting standard under International
Financial Reporting Standards. Section 1582 is applicable for the Company's
business combinations with acquisition dates on or after January 1, 2011. Early
adoption of this Section is permitted. Section 1601 together with Section 1602
establishes standards for the preparation of consolidated financial statements.
Section 1601 is applicable for the Company's interim and annual consolidated
financial statements for its fiscal year beginning January 1, 2011. Early
adoption of this Section is permitted. If the Company chooses to early adopt any
one of these Sections, the other two sections must also be adopted at the same
time.
International Financial Reporting Standards ("IFRS) - In 2006, the Canadian
Accounting Standards Board ("AcSB") published a new strategic plan that will
significantly affect financial reporting requirements for Canadian companies.
The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over
an expected five year transitional period. In February 2008 the AcSB announced
that 2011 is the changeover date for public accountable companies to use IFRS,
replacing Canada's own GAAP. The transition date is for interim and annual
financial statements relating to fiscal years beginning on or after January 1,
2011. The transition date of January 1, 2011 will require the restatement for
comparative purposes of amounts reported by the Company for the year ended
December 31, 2010.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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