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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Medusa Mining | LSE:MML | London | Ordinary Share | AU000000MML0 | ORD NPV (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 97.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMMML MEDUSA MINING LIMITED ABN: 60 099 377 849 Unit 7, 11 Preston Street Como WA 6152 PO Box 860 Canning Bridge WA 6153 Telephone: +618-9367 0601 Facsimile: +618-9367 0602 Email: admin@medusamining.com.au Internet: www.medusamining.com.au 31 August 2010 MEDUSA ACHIEVES RECORD FULL YEAR PROFIT Medusa Mining Limited ("Medusa" or the "Company"), is pleased to present its full year financial results for the year ended 30 June 2010, highlighted by a record net profit after tax* ("NPAT") of US$65.8 million, up 131% (adjusted underlying NPAT was a record US$71.7 million, up 152%). HIGHLIGHTS OF THE FINANCIAL YEAR FINANCIALS +------------------------+------------+------------+--------+------------------+ | Key Results |30 June 2010|30 June 2009|Variance| (%) | +------------------------+------------+------------+--------+------------------+ | Revenues | US$94.6M| US$42.8M|US$51.8M| 121%| +------------------------+------------+------------+--------+------------------+ | EBITDA | US$73.7M| US$30.4M|US$43.3M| 142%| +------------------------+------------+------------+--------+------------------+ | Adjusted underlying | US$79.6M| US$30.4M|US$49.2M| 162%| |EBITDA* | | | | | +------------------------+------------+------------+--------+------------------+ | NPAT | US$65.8M| US$28.5M|US$37.3M| 131%| +------------------------+------------+------------+--------+------------------+ | Adjusted underlying | US$71.7M| US$28.5M|US$43.2M| 152%| |NPAT* | | | | | +------------------------+------------+------------+--------+------------------+ | EPS (basic) | US$0.378| US$0.187|US$0.191| 102%| +------------------------+------------+------------+--------+------------------+ | Adjusted underlying | US$0.412| US$0.187|US$0.225| 120%| |EPS (basic)* | | | | | +------------------------+------------+------------+--------+------------------+ | | | | | | +------------------------+------------+------------+--------+------------------+ | * As a result of a timing issue, bullion awaiting shipment at year end that| |relate to current year's production has been re-classified from revenue to| |inventory at cost to comply with Australian Accounting Standards. This timing| |issue has had a material reduction of US$5.893 million to current year's| |profit. Refer Note 4 under Notes to the Financial Statements at the end of| |this announcement. Subsequent to year end the bullion has been shipped and| |sold in July 2010 and proceeds relating to the sale has been received. | +------------------------------------------------------------------------------+ - Earnings before interest, tax, depreciation and amortisation ("EBITDA") of US$73.7 million, up 142% (adjusted underlying EBITDA of US$79.6 million, up162%); - Earnings per share ("EPS"), of US$0.378 on a weighted average basis, based on NPAT of US$65.8 million, up 102% (adjusted underlying EPS of US$0.412, up 120%); - Revenues increased 121% to a record US$94.6 million, due to increased gold production and a higher price received on sale of gold. Medusa is an un-hedged gold producer and received an average gold price of US$1,100 per ounce from the sale of 64,020 ounces of gold for the year (adjusted underlying revenues totalled US$102.2 million, up 139%); - The Company remains debt free and had total cash and bullion of US$55.8 million at year end (2009: US$26.5 million). The adjusted underlying cash and bullion at year end was US$63.4 million. OPERATIONS Co-O MINE The Company produced a record 89,679 ounces of gold for the year, an increase of 41,810 ounces or 87% from the previous year's production of 47,869 ounces, at an average recovered grade of 16.52 g/t gold (2009: 13.30 g/t gold) and cash costs* of US$184 per ounce (2009: US$213 per ounce). * Cash costs refer to the cost of gold produced (net of development costs) and includes royalties and local taxes of US$46 per ounce for the year (2009: US$40 per ounce). Figure 1 (please see the link at the end of this announcement) shows the production and cash costs of the mine for each quarter in the year to 30 June 2010. The budget for the forthcoming fiscal year is to produce 100,000 ounces at cash costs of around US$190 per ounce. Figure 2 (please see the link at the end of this announcement) shows production from 2007 to 2011 (budgeted) and also budgeted cash costs for 2011. RESERVES AND RESOURCES +---------------------+--------+--------+--------+ |Co-O Reserves |Jun 2010|Jun 2009|Variance| - Gold reserves at Co-O +---------------------+--------+--------+--------+ increased marginally to |Probable reserves | 505,000| 500,000| 5,000| 505,000; +---------------------+--------+--------+--------+ - Co-O's gold resources at |Co-O Resources |Jun 2010|Jan 2010|Variance| year end comprised of +---------------------+--------+--------+--------+ 603,000 indicated resource |Indicated resources | 603,000| 580,000| 23,000| ounces and 898,000 inferred +---------------------+--------+--------+--------+ resource ounces, |Inferred resources | 898,000| 660,000| 238,000| representing increases of +---------------------+--------+--------+--------+ 23,000 ounces and 238,000 |Bananghilig Resources|Jun 2010|Jun 2009|Variance| ounces within the indicated +---------------------+--------+--------+--------+ and inferred categories |Inferred resources | 650,000| 650,000| -| respectively. +---------------------+--------+--------+--------+ Figure 3 (please see the link at the end of this announcement) shows the resource from June 2007 to June 2010. EXPLORATION - Contiguous tenement package maintained at >800km(2); - Budgeted exploration for 2011 fiscal year of $21.0 million (2010 actual: US$18.9 million); - Figure 4 (please see the link at the end of this announcement) shows the exploration costs from 2007 to 2011 (budgeted). - Exploration highlights at Co-O include: - discovery of new veins and extensions to known veins; - extension along strike to approximately 1,500 metres; - extension across strike to approximately 500 metres; - demonstrating that mineralisation extends to over 500 metres below the mine's adit entrance; and - estimation of a Conceptual Exploration Target ** for the Co-O Mine of between 3 and 7 million ounces of gold. - At the Bananghilig disseminated gold deposit, drilling has commenced prior to establishing reserves as a basis for a feasibility study; - At the Lingig copper prospect, drilling has identified a coherent body of basalt-hosted mineralisation requiring further drilling; - Scout drilling is being planned at the newly discovered Usa copper-gold porphyry target; and - At Saugon, re-drilling of the First Hit Vein is in progress. ** The potential target size and grade of the Co-O Mine is conceptual in nature and there has been insufficient exploration to define a mineral resource. It is also uncertain if further exploration will result in the target being defined as a mineral resource. Managing Director, Geoff Davis commented: "This year has indeed been both challenging and exciting in terms of growth with the Company completing a two phase expansion programme, on schedule, in the March 2010 quarter, whilst producing a record 89,679 ounces of gold for the year at average cash costs (net of development costs, but inclusive of royalties and local taxes) of US$184 per ounce. The Company is in the fortunate position of being a low cost gold producer, in an economic climate where gold is trading near record highs. The strong financial result generated from production and sales, as evidenced with a record adjusted underlying profit of US$71.7 million, will enable Medusa to fund ongoing development at its flagship Co-O Mine as well as continue its extensive exploration programme. We believe our landholding sits within one of the most prospective mineralised regions in the Philippines which should enable us to achieve organic growth initially to a mid-tier 300 to 400,000 ounces per year gold producer. Accordingly, the Board has approved an exploration budget of US$21 million for the forthcoming year. To achieve our stated objective, we have commenced work at the large Bananghilig Deposit with the aim of completing mining studies towards the end of 2011. Other prospects will also be examined over time as the Company's landholdings have the potential for the discovery of additional gold and copper mineralisation. Work at the Co-O Mine has achieved our year's objectives of increasing the global resources to approximately 1.5 million ounces and of maintaining the mine's reserves at around 500,000 ounces. The plan going forward is to maintain resources and reserves at these current levels. A conceptual exploration target for the Co-O Mine was estimated during the year at between 3 million and 7 million ounces over the life of the mine. This conceptual target size indicates that the Co-O Mine could be a long-lived asset providing funding for future growth. Financially the Company is in a sound position, being debt free, un-hedged, and with an extremely healthy cash and bullion balance. This year's excellent adjusted underlying financial results set the benchmark for continued strong future earnings." For further information please contact: Australia Medusa Mining Limited +61 8 9367 0601 Geoffrey Davis, Managing Director Roy Daniel, Finance Director United Kingdom Fairfax I.S. PLC +44 (0)20 7598 5368 Nominated Adviser & Broker Ewan Leggat/Laura Littley Lothbury Financial Services Limited +44 (0)20 7868 2010 Michael Padley/Libby Moss Canada Nicholas Sayce, Investor Relations +1 416 822 4404 JORC COMPLIANCE - CONSENT OF COMPETENT PERSONS Medusa Mining Limited Information in this report relating to Exploration Results has been reviewed and is based on information compiled by Mr Geoff Davis, who is a member of The Australian Institute of Geoscientists. Mr Davis is the Managing Director of Medusa Mining Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a "Competent Person" as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a "Qualified Person" as defined in "National Instrument 43-101" of the Canadian Securities Administrators. Mr Davis consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Cube Consulting Pty Ltd Information in this report relating to Mineral Resources has been estimated and compiled by Mark Zammit of Cube Consulting Pty Ltd of Perth, Western Australia. Mr Zammit is a member of The Australasian Institute of Mining & Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a "Qualified Person" as defined in "National Instrument 43-101" of the Canadian Securities Administrators. Mr Zammit consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Crosscut Consulting Information in this report relating to Ore Reserves is based on information compiled by Declan Franzmann, B Eng (Mining), MAusIMM. Mr Franzmann is a full-time employee of Crosscut Consulting. Mr Franzman has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a "Qualified Person" as defined in "National Instrument 43-101" of the Canadian Securities Administrators. Mr Franzmann consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Refer to the revised Technical Report which was filed on Sedar in August 2010 for further discussion of the Co-O Deposit's geology, structural controls, drilling, sampling and assaying information, and any known material environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issue. DISCLAIMER This announcement contains certain forward-looking statements. The words 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'intend', 'should', 'could', 'may', 'target', 'plan' and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Medusa, and its officers, employees, agents and associates, that may cause actual results to differ materially from those expressed or implied in such statements. Actual results, performance or outcomes may differ materially from any projections and forward-looking statements and the assumptions on which those assumptions are based. You should not place undue reliance on forward-looking statements and neither Medusa nor any of its directors, employees, servants or agents assume any obligation to update such information. STATEMENT OF COMPREHENSIVE INCOME for the year ended 30 June 2010 +------------------------------------------------+----+--------+---------------+ +------------------------------------------------+----+--------+---------------+ | | | 2010 |2009 (restated)| +------------------------------------------------+----+--------+---------------+ | |Note| US$000 | US$000 | +------------------------------------------------+----+--------+---------------+ +------------------------------------------------+----+--------+---------------+ |Revenue | | 94,508| 42,825| +------------------------------------------------+----+--------+---------------+ |Other income | | 81| 4| +------------------------------------------------+----+--------+---------------+ |Cost of sales | |(22,455)| (12.970)| +------------------------------------------------+----+--------+---------------+ |Exploration & evaluation expenses | | (294)| (60)| +------------------------------------------------+----+--------+---------------+ |Administration expenses | | (2,853)| (1,760)| +------------------------------------------------+----+--------+---------------+ |Other expenses | | (3,133)| (1,246)| +------------------------------------------------+----+--------+---------------+ |Profit before income tax expense | | 65,854| 26,793| +------------------------------------------------+----+--------+---------------+ |Income tax (expense)/income | 2 | (42)| 1,714| +------------------------------------------------+----+--------+---------------+ |Profit attributable to members of the Company | 4 | 65,812| 28,507| +------------------------------------------------+----+--------+---------------+ +------------------------------------------------+----+--------+---------------+ |Other comprehensive income: | | | | +------------------------------------------------+----+--------+---------------+ |Exchange differences on translation of foreign | | 2,311| (480)| |operations | | | | +------------------------------------------------+----+--------+---------------+ |Total comprehensive income | | 68,123| 28,027| +------------------------------------------------+----+--------+---------------+ |Overall operations: | | | | +------------------------------------------------+----+--------+---------------+ |Basic earnings per share | 3 | 0.378| 0.187| +------------------------------------------------+----+--------+---------------+ |Diluted earnings per share | 3 | 0.377| 0.186| +------------------------------------------------+----+--------+---------------+ The accompanying notes form part of these financial statements. STATEMENT OF FINANCIAL POSITION as at 30 June 2010 +--------------------------------------+---------------------------------------+ | | Consolidated | +--------------------------------------+-------+---------------+---------------+ | | 2010 |2009 (restated)|2008 (restated)| +--------------------------------------+-------+---------------+---------------+ | |US$000 | US$000 | US$000 | +--------------------------------------+-------+---------------+---------------+ | | | | | +--------------------------------------+-------+---------------+---------------+ |CURRENT ASSETS | | | | +--------------------------------------+-------+---------------+---------------+ |Cash & cash equivalents | 32,457| 26,510| 4,648| +--------------------------------------+-------+---------------+---------------+ |Trade & other receivables | 34,895| 5,006| 2,102| +--------------------------------------+-------+---------------+---------------+ |Inventories | 5,511| 1,164| 900| +--------------------------------------+-------+---------------+---------------+ |Other current assets | 468| 128| 320| +--------------------------------------+-------+---------------+---------------+ |Total Current Assets | 73,331| 32,808| 7,970| +--------------------------------------+-------+---------------+---------------+ | | | | | |Non-Current Assets | | | | +--------------------------------------+-------+---------------+---------------+ |Property, plant & equipment | 34,595| 29,823| 23,050| +--------------------------------------+-------+---------------+---------------+ |Exploration, evaluation and | 75,978| 52,722| 36,988| |development expenditure | | | | +--------------------------------------+-------+---------------+---------------+ |Deferred tax assets | 73| 69| 1,902| +--------------------------------------+-------+---------------+---------------+ |Total Non-Current Assets |110,646| 82,614| 61,940| +--------------------------------------+-------+---------------+---------------+ |Total Assets |183,977| 115,422| 69,910| +--------------------------------------+-------+---------------+---------------+ |Current Liabilities | | | | +--------------------------------------+-------+---------------+---------------+ |Trade & other payables | 8,272| 9,193| 6,582| +--------------------------------------+-------+---------------+---------------+ |Total Current Liabilities | 8,272| 9,193| 6,582| +--------------------------------------+-------+---------------+---------------+ |NON-CURRENT LIABILITIES | | | | +--------------------------------------+-------+---------------+---------------+ |Deferred tax liability | 279| 313| 3,481| +--------------------------------------+-------+---------------+---------------+ |Total Non-Current Liabilities | 279| 313| 3,481| +--------------------------------------+-------+---------------+---------------+ |Total Liabilities | 8,551| 9,506| 10,063| +--------------------------------------+-------+---------------+---------------+ |Net Assets |175,426| 105,916| 59,847| +--------------------------------------+-------+---------------+---------------+ |Equity | | | | +--------------------------------------+-------+---------------+---------------+ |Issued capital | 70,906| 69,776| 51,999| +--------------------------------------+-------+---------------+---------------+ |Reserves | 6,878| 4,310| 4,525| +--------------------------------------+-------+---------------+---------------+ |Retained profits | 97,642| 31,830| 3,323| +--------------------------------------+-------+---------------+---------------+ |Total equity |175,426| 105,916| 59,847| +--------------------------------------+-------+---------------+---------------+ The accompanying notes form part of these financial statements. STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2010 +----------------+-----------+--------------+----------+--------------+--------+ | | | | | Foreign | | | | Share | | | Currency | | | | Capital | Accumulated | Option | Translation | | | | Ordinary | Losses | Reserve | Reserve | Total | | | | | | | | | | US$000 | US$000 | US$000 | US$000 |$ US$000| +----------------+-----------+--------------+----------+--------------+--------+ |CONSOLIDATED | | | | | | +----------------+-----------+--------------+----------+--------------+--------+ |Balance at | 51,999| 3,323| 1,312| 3,213| 59,847| |30.06.2008 | | | | | | +----------------+-----------+--------------+----------+--------------+--------+ |Comprehensive | | | | | | |income for the | | 28,507| -| (480)| 28,027| |period | | | | | | +----------------+-----------+--------------+----------+--------------+--------+ |Shares issued | | | | | | |during the | 18,610| -| -| -| 18,610| |period | | | | | | +----------------+-----------+--------------+----------+--------------+--------+ |Share | | | | | | |transaction | (833)| -| -| -| (833)| |costs | | | | | | +----------------+-----------+--------------+----------+--------------+--------+ |Share options | | | | | | |issued during | | | | | | |the period in | -| -| 265| -| 265| |accordance with | | | | | | |AASB 2 - share | | | | | | |based payment | | | | | | +----------------+-----------+--------------+----------+--------------+--------+ |Balance at | 69,776| 31,830| 1,577| 2,733| | |30.06.2009 | | | | | 105,916| +----------------+-----------+--------------+----------+--------------+--------+ |Comprehensive | | | | | | |income for the | -| 65,812| -| 2,311| 68,123| |period | | | | | | +----------------+-----------+--------------+----------+--------------+--------+ |Shares issued | | | | | | |during the | 1,191| -| -| -| 1,191| |period | | | | | | +----------------+-----------+--------------+----------+--------------+--------+ |Share | | | | | | |transaction | (61)| -| -| -| (61)| |costs | | | | | | +----------------+-----------+--------------+----------+--------------+--------+ |Share options | | | | | | |issued during | | | | | | |the period in | -| -| 257| -| 257| |accordance with | | | | | | |AASB 2 - share | | | | | | |based payment | | | | | | +----------------+-----------+--------------+----------+--------------+--------+ |Balance at | 70,906| 97,642| 1,834| 5,043| | |30.06.2010 | | | | | 175,426| +----------------+-----------+--------------+----------+--------------+--------+ The accompanying notes form part of these financial statements. STATEMENT OF CASH FLOWS for the year ended 30 June 2010 +---------------------------------------------------+-+------------------------+ +---------------------------------------------------+-+--------+---------------+ | | | 2010 |2009 (restated)| +---------------------------------------------------+-+--------+---------------+ | | | US$000 | US$000 | +---------------------------------------------------+-+--------+---------------+ +---------------------------------------------------+-+--------+---------------+ |CASH FLOWS FROM OPERATING ACTIVITIES | | | +---------------------------------------------------+-+--------+---------------+ |Receipts from customers | | 78,220| 42,651| +---------------------------------------------------+-+--------+---------------+ |Payments to suppliers and employees | |(40,124)| (12,233)| +---------------------------------------------------+-+--------+---------------+ |Interest received | | 623| 174| +---------------------------------------------------+-+--------+---------------+ |Net cash provided by operating activities | | 38,719| 30,592| +---------------------------------------------------+-+--------+---------------+ |CASH FLOWS FROM INVESTING ACTIVITIES | | | +---------------------------------------------------+-+--------+---------------+ |Payments for plant and equipment | | (7,741)| (7,506)| +---------------------------------------------------+-+--------+---------------+ |Payments for exploration and evaluation activities |(18,924)| (9,181)| +---------------------------------------------------+-+--------+---------------+ |Payment for development activities | | (7,907)| (4,205)| +---------------------------------------------------+-+--------+---------------+ |Net cash (used in) investing activities |(34,572)| (20,892)| +-----------------------------------------------------+--------+---------------+ |CASH FLOWS FROM FINANCING ACTIVITIES | | | +---------------------------------------------------+-+--------+---------------+ |Proceeds from issue of shares | | 1,187| 18,611| +---------------------------------------------------+-+--------+---------------+ |Transaction costs from issue of shares | | (57)| (835)| +---------------------------------------------------+-+--------+---------------+ |Net cash provided by financing activities | 1,130| 17,776| +---------------------------------------------------+-+--------+---------------+ +---------------------------------------------------+-+--------+---------------+ |Net increase in cash and cash equivalents held | | 5,277| 27,476| +---------------------------------------------------+-+--------+---------------+ |Cash and cash equivalents at the beginning of the | | 26,510| 4,648| |financial year | | | | +---------------------------------------------------+-+--------+---------------+ |Exchange rate adjustment | | 670| (5,614)| +---------------------------------------------------+-+--------+---------------+ |Cash and cash equivalents at the end of the | | 32,457| 26,510| |financial year | | | | +---------------------------------------------------+-+--------+---------------+ The accompanying notes form part of these financial statements. Notes to the Financial Statements 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated. The financial report covers the Group of Medusa Mining Limited ("Medusa") and controlled entities. Medusa is a listed public company, incorporated and domiciled in Australia. The financial statements were authorised by the Directors on 27 August 2010. Basis of preparation Reporting Basis and Conventions The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. (a) Principles of consolidation A controlled entity is any entity over which Medusa has the power to govern the financial and operating policies so as to obtain benefits from its activities. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered. Investments in controlled entities are accounted for at lower cost or net realisable value in the separate financial statements of the parent entity. A list of controlled entities during the year ended 30 June 2010 is presented in note 18. Loans to controlled entities for which repayment is not likely in the foreseeable future are accounted for as part of the parent entity's investment in controlled entities. As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year then ended. Where controlled entities have entered (left) the consolidated group during the year, their operating results have been included (excluded) from the date control was obtained (ceased). All inter-group balances and transactions between entities in the consolidated group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity. (b) Comparative figures Where required by Accounting Standards, comparative figures have been adjusted to conform with changes in presentation for the current financial year. (c) Change in accounting policy From 1 July 2009 the Company has adopted the following Standards for the reporting periods beginning on or after 1 July 2009. Adoption of these standards did not have any effect on the financial position or performance of the Company. However, the adoption of AASB 8 has caused the Company to revise its segment reporting. See note 27 for details of the reportable segments and applicable accounting policies. AASB 8 Operating Segment AASB 8 requires a management approach to the identification, measurement and disclosure of operating segments. AASB 101 Revised Presentation of Financial Statements AASB 101 requires all changes in equity arising from transactions with owners , in their capacity a owners, to be presented separately from non-owner changes in equity. Non-owner changes in equity require presentation in the Statement of Comprehensive Income. The revised AASB 101 requires all income and expenses to be presented in either one Statement of Comprehensive Income or a separate Income Statement and a Statement of Comprehensive Income. The Group's financial statements contain a Statement of Comprehensive Income. As a consequence of a change in functional currency the Group has included a Statement of Financial Position and accompanying notes for the year ended June 2008. (d) Change in functional and presentation currency The functional currency for a company is the currency of the primary economic environment in which the company operates. The presentation currency for a company is the currency in which the company chooses to present its financial report. Till June 2009, the presentation currency of the Group was Australian dollars. AASB 121, The Effects of Changes in Foreign Exchange Rates, suggests that a primary factor in determining the functional currency of an entity is the currency that mainly influences sales price for goods and services. The Company's Gold sales, which are in US dollars, significantly outweigh all the expenses of the Group. In order to better reflect the Company's and Group's financial position and operations the Company has decided to change its presentation currency for financial reporting to US dollars. The Company has determined the date of transition of the presentation currency from Australian dollars to US dollars as 1 July 2009. In order to derive US dollar comparatives the Company has converted the Statement of Financial Position at 30 June 2009 at US$/Philippine Peso of 48.369 for Philippine subsidiaries except Medusa Mineral Processing and Refining Corporation ("MMPRC") while the parent entity has been converted at US$/A$ of 0.8931. The Statement of Comprehensive Income for the year ended 30 June 2009 have been converted at an average rate of US$/Philippine Peso 47.594 for Philippine subsidiaries except MMPRC and US$/A$ 0.8704 for the Parent Entity. Equity Balances have been maintained at historical exchange rates relating to the date of transaction. As described in the above mentioned reasons management have decided that MMPRC, a 100% owned subsidiary of the Company, would change its functional and presentation currency from Philippine Pesos to US dollars commencing 1 July 2009. (e) Revenue recognition Revenue from the sale of goods is recognised in the relevant reporting period when there has been a significant transfer of risks and rewards to the customer and no further processing is required by the Group's operations. In addition, the quality and quantity of the goods must be determined with reasonable accuracy, the price is known or determinable and collectability is probable. The point, at which risk passes, for the Group's sales, is for the majority of the time, upon receipt of the bill of lading when the commodity is actually delivered for shipment. Revenue is measured at the fair value of the consideration received or receivable. Gold sales Revenue from the production of gold and silver is recognised when the group has passed control and risk to the buyer. Interest Revenue Interest revenue is recognised using the effective interest rate method, which for floating rate financial assets, is the rate inherent in the instrument. (f) Income tax The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. +-----------------------------------------------------+------------------------+ | | Consolidated | +-----------------------------------------------------+--------+---------------+ | | 2010 |2009 (restated)| +-----------------------------------------------------+--------+---------------+ | | US$000 | US$000 | +-----------------------------------------------------+--------+---------------+ +-----------------------------------------------------+--------+---------------+ |2. TAXATION | | | +-----------------------------------------------------+--------+---------------+ |(a) The components of tax expense comprise: | | | +-----------------------------------------------------+--------+---------------+ | Current tax | 90| -| +-----------------------------------------------------+--------+---------------+ | Deferred tax | (47)| (1,714)| +-----------------------------------------------------+--------+---------------+ | Recoupment of prior year tax losses | | | +-----------------------------------------------------+--------+---------------+ | Under provision in respect of prior years | | | +-----------------------------------------------------+--------+---------------+ | | 42| 1,714| +-----------------------------------------------------+--------+---------------+ |(b) The prima facie tax on loss before income tax is| | | |reconciled to the income tax as follows: | | | +-----------------------------------------------------+--------+---------------+ | Operating profit / (loss) before income tax | 65,854| 26,793| +-----------------------------------------------------+--------+---------------+ | Prima facie income tax (expense)/credit at | 19,756| 8,038| |30% (2009: 30%) on operating profit / (loss) | | | +-----------------------------------------------------+--------+---------------+ | less - tax effect of: | | | +-----------------------------------------------------+--------+---------------+ | Other non-deductible expenses | 788| 302| +-----------------------------------------------------+--------+---------------+ | Difference of effective foreign income tax|(23,224)| (10,054)| |rates | | | +-----------------------------------------------------+--------+---------------+ | Deferred tax assets not brought to account | 2,722| -| +-----------------------------------------------------+--------+---------------+ | Income tax (expense)/income | 42| (1,714)| +-----------------------------------------------------+--------+---------------+ | The applicable weighted average effective tax| 0%| (6)%| |rates are as follows | | | +-----------------------------------------------------+--------+---------------+ The reason for the 0% weighted average effective tax rate for the current year is due to the impact of the tax free holiday in Mindanao Mineral Processing and Refining Corporation, a subsidiary of the parent entity, thorough which sales of bullion are recorded. In the previous year the decrease in the weighted average effective consolidated tax rate for 2010 was a result of utilising available tax losses and the impacts of foreign tax concessions. +----------------------------------------------------------------------+---+---+ |(c) Deferred tax assets not brought to account, the benefits of which| | | |will only be realised if the conditions for deductibility set out in| | | |Note 1(f) occur:- | | | +----------------------------------------------------------------------+---+---+ |- temporary differences |109| 90| +----------------------------------------------------------------------+---+---+ |- Australian tax losses |775|741| +----------------------------------------------------------------------+---+---+ |- Philippine tax losses | 11| 54| +----------------------------------------------------------------------+---+---+ | |895|885| +----------------------------------------------------------------------+---+---+ The benefit of tax losses will only be obtained if: (i) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit to be realised; or the benefit can be utilised by another company in the Group in accordance with Division 170 of the Income Tax Assessment Act 1997; (ii) the Company and/or Group continues to comply with the conditions for deductibility imposed by the law; and (iii) no changes in tax legislation adversely affect the Company and/or the Group in realising the benefit. +---------------------------+--------------------------------------------------+ | | Consolidated | +---------------------------+-----------+---------------+----------------------+ | | 2010 |2009 (restated)| 2008 (restated) | +---------------------------+-----------+---------------+----------------------+ | | US$000 | US$000 | US$000 | +---------------------------+-----------+---------------+----------------------+ |3. EARNINGS/(LOSS) PER| | | | |SHARE | | | | +---------------------------+-----------+---------------+----------------------+ | Earnings used to | | | | |calculate basic and diluted| | | | |EPS | 65,812| 28,508| (1,209)| +---------------------------+-----------+---------------+----------------------+ | Weighted average | | | | |number of ordinary shares | | | | |used in the calculation of | | | | |the basic earnings per | | | | |share. |173,598,847| 1152,723,201| 443,626,534| +---------------------------+-----------+---------------+----------------------+ | Weighted average | | | | |unlisted options | | | | |outstanding | 1,125,994| 479,874| | +---------------------------+-----------+---------------+----------------------+ | Weighted average of | | | | |ordinary shares diluted as | | | | |at 30 June 2009 |174,724,841| 153,203,075| | +---------------------------+-----------+---------------+----------------------+ | Basic earnings per share ("EPS") is calculated by dividing the net profit| |or loss attributable to members of the Company for the reporting period, after| |excluding any costs of servicing equity (other than ordinary shares and| |converting preference shares classified as ordinary shares for EPS calculation| |purposes), by the weighted average number of ordinary shares of the Company,| |adjusted for any bonus issue. | | | | Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by| |the after tax effect of financing costs associated with potential ordinary| |shares and the effect on revenues and expenses of conversion to ordinary| |shares associated with potential ordinary shares, by the weighted average| |number of ordinary shares and potential ordinary shares adjusted for any bonus| |issue. | +------------------------------------------------------------------------------+ +---------------------------------------------------------------------+--------+ | | 2010 | +---------------------------------------------------------------------+--------+ | | US$000 | +---------------------------------------------------------------------+--------+ |4. ADJUSTED UNDERLYING PROFITS | | | As at 30 June 2010, 6,368 gold ounces of current year's| | |production was not dispatched and has been treated as inventory to| | |comply with Australian Accounting Standards. Subsequent to year end| | |these gold ounces was shipped in July 2010 and proceeds relating to| | |the sale were received. If the gold bullion was actually shipped| | |before 30 June 2010, the reported net profit for 2010 financial year| | |would be as follows: | | +---------------------------------------------------------------------+--------+ | Profit attributable to members as per Statement of Comprehensive| 65,812| |Income: | | +---------------------------------------------------------------------+--------+ | plus: | | +---------------------------------------------------------------------+--------+ | Net profit attributable to bullion awaiting shipment to current| | |year's production but not included in Statement of Comprehensive| | |Income | 5,893| +---------------------------------------------------------------------+--------+ | Adjusted Underlying Profit | 71,705| +---------------------------------------------------------------------+--------+ | | | +---------------------------------------------------------------------+--------+ | Earnings per share based on Adjusted Underlying Profits: | | +---------------------------------------------------------------------+--------+ | Basic earnings per share |US$0.412| +---------------------------------------------------------------------+--------+ | Diluted earnings per share |US$0.410| +---------------------------------------------------------------------+--------+ The annual report and accounts for the year ended 30 June 2010 will be sent to shareholders by electronic means (or by post to those shareholders who have specifically requested a hard copy of the annual report) shortly and a copy will be available on the Company's website thereafter - www.medusamining.com.au. [HUG#1441070] Final Results 30 June 2010 - Accompanying Images: http://hugin.info/138050/R/1441070/385659.pdf This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Medusa Mining Ltd via Thomson Reuters ONE
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