Gold One International Limited HY 2013 results

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Gold One International Limited HY 2013 results

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Gold One International Limited HY 2013 results

  1. 1. Gold One International Limited (A.B.N. 35 094 265 746) Appendix 4D reporting under Listing Rule 4.2A.3 and condensed consolidated interim financial statements for the six months ended 30 June 2013 The information contained in this report is to be read in conjunction with Gold One International Limited's 2012 annual report and announcements to the market made during the six months ended 30 June 2013
  2. 2. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 ASX APPENDIX 4D 1. RESULTS FOR ANNOUNCEMENT TO THE MARKET Gold One International Limited and its subsidiaries ("Gold One" or "group") results for announcements to the market are detailed below: 30 June 2013 A$ '000 187 125 (37 654) 2. Change A$ '000 (2 519) (129 030) Change % (1.33) (141.21) (37 089) (40 818) Revenue and other income (Loss) / profit for the period (Loss) / profit for the period attributable to owners of the parent (Loss) / profit before taxation Restated 30 June 2012 A$ '000 189 644 91 376 91 978 114 746 (129 067) (155 564) (140.32) (135.57) DIVIDENDS No interim dividends or distributions will be paid in relation to the six months ended 30 June 2013 (2012: A$ nil). 3. EXPLANATION OF RESULTS Please refer to the "Operating and Financial Review" for an explanation of the results. This information should be read in conjunction with the annual report of the group for the year ended 31 December 2012. This report should also be read in conjunction with any public announcements made by Gold One in accordance with the continuous disclosure requirements arising under the Corporations Act 2001 and the Australian Stock Exchange ("ASX") Listing Rules. The information provided in this report contains all the information required by ASX Listing Rule 4.2A.3. 4. NET TANGIBLE ASSETS PER SECURITY Restated 30 June 31 December 2012 2013 A$ A$ 0.20 0.30 0.19 0.29 Net tangible assets per ordinary share Diluted tangible assets per ordinary share 5. CHANGES IN CONTROLS There were no businesses/entities acquired or disposed of by Gold One during the period. 6. ASSOCIATES AND JOINT VENTURES Gold One had no interest in associates or joint ventures during the period. 1
  3. 3. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 CONTENTS The reports and statements set out below comprise the condensed consolidated interim financial statements presented to the shareholders: Directors' Report 3-6 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income 7 Condensed Consolidated Statement of Financial Position 8 Condensed Consolidated Statement of Changes in Equity 9 Condensed Consolidated Statement of Cash Flows 10 Notes to the Condensed Consolidated Interim Financial Statements Directors' Declaration 11 - 27 28 Independent Auditor's Report on Review of Condensed Consolidated Interim Financial Report Lead Auditor's Independence Report 29 - 30 31 Corporate Directory 32 - 34 2
  4. 4. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 DIRECTORS' REPORT The directors present their report on the consolidated entity consisting of Gold One and its subsidiaries for the six months ended 30 June 2013. 1. DIRECTORS The directors of the group during the six months and to the date of this report are as follows: NAME NATIONALITY INDEPENDENCE NON EXECUTIVE DIRECTORS Yalei Sun (Chairman) Michael H Solomon Allan H Liu Robert T L Chan Chao Zhou Chinese South Africa Chinese British Chinese Not independent Independent Independent Independent Not independent South African Not independent EXECUTIVE DIRECTOR Christopher D Chadwick (CFO and acting CEO) 2. REVIEW OF OPERATIONS PRINCIPAL ACTIVITY AND NATURE OF OPERATIONS Gold One is a dual listed mid-tier mining group with gold operations and gold and uranium prospects across Southern Africa. Gold One remains focused on developing and mining low technical risk, high margin precious metal resources in diversified jurisdictions. 3. OPERATING AND FINANCIAL REVIEW OPERATING RESULTS FOR THE SIX MONTHS The six months under review were characterised by a sharp decline in the gold price during the period, which has placed pressure on the gold industry as a whole. At New Kleinfontein Goldmine Proprietary Limited (“Modder East”), high operating margins have ensured that the operation remains robust even in a lower gold price environment, although the period has been impacted by slower than planned ramp up of operations post the labour unrest in 2012. Operational profitability at Modder East is expected to improve further as the operation reaches steady state production later this year, which will further reduce unit operating costs. The Cooke Underground Operation is strongly focused on achieving its turnaround strategy and the realisation of uranium co-production. Post the significant restructuring at the Cooke Underground Operation late last year, the operation is better positioned for improved performance. Furthermore, to mitigate against the current depressed gold price environment, additional production opportunities in higher grade areas and vamping operations have been identified at each of the Cooke Underground Operation’s four shafts, and a focus on maintaining mining above the paylimit has remained in place across the operation. The Randfontein Surface Operation has continued to deliver a strong performance during the period under review. The operation’s focus has remained on the Cooke Gold Plant Optimisation Project, which will see the Cooke Gold Plant improve economies of scale by converting from mechanical reclamation to hydraulic reclamation and increasing throughput capacity from 300 000 to 400 000 tonnes per month. The project will have a direct impact by reducing unit operating costs by approximately 40%. The expansion and commissioning of the plant are scheduled for completion during December 2013 and does require capital investment during the remainder of the year. Gold One produced 130 061oz of gold during the six months compared to 125 856 oz in the comparative period. Despite the increase in production, revenue was negatively impacted by the lower average gold price achieved in Australian Dollars ("A$"). As a result, revenue decreased for the six months to A$ 186 million as compared to A$ 189 million in the previous period. Gross profit over the period reduced from A$ 39 million to A$ 11 million. The group incurred negative cash flows from operations of A$ 2 million during the six months. The company remains focused on ensuring that all of its projects are prioritised according to those that maximise company value and provide short term operational flexibility during the current volatile gold price environment. 3
  5. 5. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 DIRECTORS' REPORT 3. OPERATING AND FINANCIAL REVIEW (continued) Following the sharp decrease in the gold price, an impairment of assets of A$ 76 million was recorded during June 2013 relating to the Rand Uranium Proprietary Limited ("Rand Uranium") underground assets. The impairment results from a lower than expected life of mine profit, due predominantly to the reduction in the United States Dollar ("US$") gold and uranium prices assumptions, which have impacted the market as a whole. The life of mine plans will be adjusted at yearend to reflect the latest gold price environment and assumptions. The directors will then review the recoverable amounts of these assets and make any further adjustment to the impairment charge as necessary. Headline earnings / (loss) for the period reflects the earnings / (loss) for the period adjusted for gains and / or losses attributable to non-recurring expenses as well as capital gains or losses. The disclosure of headline earnings or loss per share is a JSE Limited ("JSE") requirement. 30 June 2013 CONSOLIDATED Headline earnings / (loss) per share (A$) Diluted headline earnings / (loss) per share (A$) Calculation based on Weighted average number of fully paid ordinary shares Headline earnings / (loss) for the period (A$ '000) 0.02 0.02 Restated 30 June 2012 (0.00) (0.00) 1 417 754 459 1 415 715 886 30 442 (3 093) RECONCILIATION OF BASIC (LOSS) / EARNINGS AND HEADLINE EARNINGS / (LOSS) FOR THE PERIOD (A$ '000) (Loss) / profit attributable to the owners of the company Impairment of assets Loss on sale of assets Gain on bargain purchase price Deferred tax on items above (37 089) 75 898 40 (8 407) 91 978 356 9 (95 436) - 30 442 (3 093) DILUTED HEADLINE EARNINGS / (LOSS) PER SHARE The calculation of diluted headline earnings / (loss) per share at 30 June 2013 was based on the headline earnings of A$ 30 million (2012: loss of A$ 3 million) and a diluted weighted average number of shares of ordinary shares outstanding of 1 453 923 785 (2012: 1 463 422 847). DILUTED WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES Weighted average number of ordinary shares (basic) Employee share options in issue 1 417 754 459 1 415 715 886 36 169 326 47 706 961 DILUTED WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES 1 453 923 785 1 463 422 847 The average market value of the group's shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding. 4
  6. 6. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 DIRECTORS' REPORT 4. GOING CONCERN An uncertainty with regards to going concern arises from a breach of debt covenants with Investec Limited (“Investec”). This debt facility was advanced to Gold One prior to the industrial action experienced during 2012. The Investec facility was structured to coincide with the timing of Modder East meeting its steady state production in terms of its life of mine plan. As a result of the industrial action and the dismissal of large portion of the work force, the achievement of the steady state production targets was delayed. As a result of lower cash flows from operations, certain covenants in terms of the facility were breached. Investec and Gold One continue to cooperate and are in discussions with regards to remedies to the breach including a refinancing of the existing facilities. The Board expects these negotiations to be concluded successfully. Gold One’s major shareholder, BCX Gold Investment Holdings Limited (“BCX Gold”) has recently increased its stake in the company to over 90%. BCX Gold has to date invested approximately A$ 700 million to acquire its stake in Gold One and has further supported Gold One through unsecured shareholder loans. BCX Gold has issued a letter of support to provide further shareholder funding to Gold One should Investec exercise their rights in terms of the breach in the debt covenants. The Board acknowledges that the group’s operating funding requirements and potential for Investec to demand immediate repayment of its loans in full represents a significant refinancing requirement for the coming 12 months. However, the Board is confident that the going concern basis remains appropriate based on the debt refinancing as well as continued financial support from the major shareholder. 5. SUBSEQUENT EVENTS On 18 July 2013, BCX Gold reaffirmed its commitment to the future of Gold One by increasing its holding in Gold One’s issued share capital from 89.10% to 90.03%. In terms of Chapter 6A of the Corporations Act 2001 BCX has acquired the right but not the obligation to compulsorily acquire any remaining Gold One shares. During August 2013, a merger agreement with Sibanye Gold Limited (“Sibanye”) was announced whereby Gold One’s interest in the West Rand assets (comprising Newshelf 1114 Proprietary Limited ("Newshelf 1114"), Rand Uranium and Ezulwini) will be exchanged for a number of new Sibanye ordinary shares which represents 17% of Sibanye’s issued share capital, on a fully diluted basis on closing of the transaction. During August 2013 the Pamodzi East Rand acquisition agreement, announced by Gold One on 17 April 2012, was progressed and two of the three prospecting applications pertaining to the acquisition were granted. Furthermore, the acquisition of the selected surface assets has been made unconditional. 6. ADDITIONAL DISCLOSURES Additional information can be found in the notes to the condensed consolidated interim financial statements. These disclosures have been included to provide a true and fair view of the company's financial performance and position as required by the Corporations Act 2001. 7. ASIC GUIDANCE In December 2011 ASIC issued Regulatory Guide 230. To comply with this guide, Gold One is required to make a clear statement about whether information disclosed in documents other than the financial report has been audited or reviewed in accordance with Australian Auditing Standards. In line with the previous years and in accordance with the Corporation Act 2001, the Directors' Report is unaudited. Notwithstanding this, the Directors' Report (including the Operating and Financial Review) contains disclosure which is extracted or derived from the condensed consolidated interim financial statements for the six months ended 30 June 2013. The condensed consolidated interim financial statements have been reviewed by the group's independent auditor. 5
  7. 7. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 DIRECTORS' REPORT 8. AUDITORS KPMG has been appointed to office in accordance with Section 327 of the Corporations Act 2001. 9. AUDITORS INDEPENDENCE DECLARATION The Lead Auditor's Independence Declaration is set out on page 31 and forms part of the Directors' Report for the six months ended 30 June 2013. 10. ROUNDING OFF The company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that class order, amounts in the condensed consolidated interim financial statements and Directors' Report have been rounded off to the nearest thousand dollars, unless otherwise stated. Signed in accordance with a Resolution of the Directors: Christopher D Chadwick (CFO and acting CEO) Johannesburg, South Africa 30 August 2013 6
  8. 8. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the six months ended 30 June 2013 Six months ended 30 June 2013 A$ '000 Restated Six months ended 30 June 2012 A$ '000 185 769 (174 970) 189 175 (150 627) 10 799 1 356 (10 465) (3 519) (75 898) 47 063 - 38 548 469 (9 936) (5 516) (356) (2 058) 95 436 OPERATING (LOSS) / PROFIT Finance income Finance costs (30 664) 887 (11 041) 116 587 3 809 (5 650) (LOSS) / PROFIT BEFORE TAX Income tax benefit / (expense) (40 818) 3 164 114 746 (23 370) (LOSS) / PROFIT FOR THE PERIOD (37 654) 91 376 Items that may be reclassified subsequently to profit or loss Currency translation differences on foreign operations Fair value adjustments of investments held in trust (29 504) 843 (7 529) - OTHER COMPREHENSIVE INCOME FOR THE PERIOD (28 661) (7 529) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (66 315) 83 847 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO Owners of the parent Non-controlling interest (65 750) (565) 84 449 (602) (66 315) 83 847 (37 089) (565) 91 978 (602) (37 654) 91 376 Notes Revenue from gold sales Cost of sales GROSS PROFIT Other income General and administrative expenses Exploration and pre-feasibility expenditure Impairment of assets Fair value adjustments Gain on bargain purchase price 6 7 14 OTHER COMPREHENSIVE INCOME, NET OF TAX (LOSS) / PROFIT FOR THE PERIOD ATTRIBUTABLE TO Owners of the parent Non-controlling interest (LOSS) / EARNINGS PER SHARE 5 Basic (loss) / earnings per share (A$) Diluted (loss) / earnings per share (A$) (0.03) (0.03) The condensed notes on page 11-27 are an integral part of these condensed consolidated interim financial statements. 7 0.06 0.06
  9. 9. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2013 Notes Restated 30 June 31 December 2013 2012 A$ '000 A$ '000 ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Gold derivative asset 7 729 20 136 20 397 2 690 37 008 14 678 15 805 - 50 952 67 491 2 414 21 306 25 611 572 226 795 8 939 2 127 13 402 30 266 661 479 893 9 305 631 291 717 472 682 243 784 963 48 815 734 6 714 14 123 4 977 69 908 33 403 1 489 30 399 13 518 60 195 145 271 139 004 41 362 9 387 157 123 41 727 52 670 46 435 158 017 37 616 249 599 294 738 TOTAL LIABILITIES 394 870 433 742 NET ASSETS 287 373 351 221 EQUITY Contributed equity Reserves Retained earnings 348 857 (79 515) 13 434 347 574 (44 017) 42 502 CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF GOLD ONE Non-controlling interest 282 776 4 597 346 059 5 162 TOTAL EQUITY 287 373 351 221 7 NON-CURRENT ASSETS Held to maturity investments Restricted cash Investments held in trust Property, plant and equipment Investment property Intangible assets 6 TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Taxation payable Gold derivative liabilities Accruals Bank overdraft Borrowings 7 8 NON-CURRENT LIABILITIES Deferred tax liabilities Gold derivative liabilities Borrowings Provisions 7 8 The condensed notes on page 11-27 are an integral part of these condensed consolidated interim financial statements. 8
  10. 10. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2013 TOTAL ATTRIBUTABLE NONRETAINED TO EQUITY CONTROLLING EARNINGS HOLDERS INTEREST CONTRIBUTED EQUITY A$ '000 BALANCE AT 01 JANUARY 2012 Loss for the six months as previously reported BALANCE AS PREVIOUSLY REPORTED Prior period adjustment (refer to note 14) Other comprehensive income TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS Transactions between shareholders Contributions of equity net of transaction costs Employee share options RESERVES A$ '000 A$ '000 (32 188) 10 867 346 826 - - (3 458) A$ '000 A$ '000 325 505 - (3 458) 346 826 (32 188) 7 409 - (7 529) 95 436 - (602) 322 047 (602) 95 436 (7 529) - TOTAL EQUITY A$ '000 325 505 (4 060) 321 445 95 436 (7 529) - - 13 838 13 838 7 704 21 542 660 19 483 - 660 502 - 660 502 BALANCE AT 30 JUNE 2012 347 505 (39 234) 116 683 424 954 7 102 432 056 BALANCE AT 01 JANUARY 2013 AS PREVIOUSLY REPORTED Prior period adjustments (refer to note 14) 347 574 (44 098) 57 399 360 875 5 162 366 037 (14 897) (14 816) RESTATED BALANCE AT 01 JANUARY 2013 Loss for the six months Other comprehensive income TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS Contributions of equity net of transaction costs Employees share options Black economic transactions Employee share options lapsed or forfeited BALANCE AT 30 JUNE 2013 - 81 347 574 (44 017) 42 502 346 059 - (28 661) (37 089) - - (37 089) (28 661) 1 283 - 955 229 5 162 (565) - (14 816) 351 221 (37 654) (28 661) - 1 283 955 229 - 1 283 955 229 - (8 021) 8 021 - - - 348 857 (79 515) 13 434 282 776 4 597 287 373 The condensed notes on page 11-27 are an integral part of these condensed consolidated interim financial statements. 9
  11. 11. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS for the six months ending 30 June 2013 Six months ended 30 June 2013 A$ '000 Six months ended 30 June 2012 A$ '000 183 097 (163 926) 165 395 (180 562) 19 171 887 (15 688) (6 684) (15 167) 3 809 (5 535) (586) (2 314) (17 479) Purchase of property, plant and equipment Proceeds from the sale of property, plant and equipment Purchase of intangibles assets Payment for acquisition of subsidiaries, net of cash acquired Contributions to held to maturity investments Investment in environmental trust (28 903) 136 (18) (305) (3 334) (27 636) 13 (242 856) - NET CASH OUTFLOW FROM INVESTING ACTIVITIES (32 424) (270 479) 1 283 1 066 (597) 22 096 (24 446) 617 126 304 (19 904) Notes CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Cash paid to suppliers and employees Cash generated from operations Finance income Finance costs Income tax paid NET CASH OUTFLOW FROM OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from shares issued, net of transaction costs Proceeds from transactions with black economic empowerment parties Payments to black economic empowerment parties Proceeds from borrowings Repayment of borrowings NET CASH (OUTFLOW) / INFLOW FROM FINANCING ACTIVITIES NET DECREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at 31 December Effect of exchange rate changes on cash and cash equivalents (598) 107 017 (180 941) 222 616 4 076 2 752 CASH AND CASH EQUIVALENTS AT 30 JUNE (35 336) 37 008 1 080 45 751 The condensed notes on page 11-27 are an integral part of these condensed consolidated interim financial statements. 10
  12. 12. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of these condensed consolidated interim financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The condensed consolidated interim financial statements are for the consolidated entity consisting of Gold One and its subsidiaries. 1.1 BASIS OF PREPARATION The condensed consolidated interim financial statements prepared in accordance with Australian Accounting Standards Board (“AASB”) 134 Interim Financial Reporting and the Corporations Act 2001. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the group since the last annual report as at the year ended 31 December 2012. The condensed consolidated interim financial statements do not include all of the information required for full annual report, and should be read in conjunction with the annual report of the group as at the year ended 31 December 2012 and any public announcement made in terms of the continuous disclosure requirements arising under the Corporations Act 2011 and the ASX Listing Rules. These condensed consolidated interim financial statements were approved by the Board of Directors on 30 August 2013. The company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and, in accordance with the class order, amounts in the condensed consolidated interim financial statements have been rounded off to the nearest thousand dollars, unless otherwise stated. JUDGEMENTS AND ESTIMATES In preparing these condensed consolidated interim financial statements, management makes judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual report for the year ended 31 December 2012. 1.2 SIGNIFICANT ACCOUNTING POLICIES Except as described below, the accounting policies applied in these condensed consolidated interim financial statements are the same as those applied in the group's annual report for the year ended 31 December 2012. The following changes in accounting policies are also expected to be reflected in the group's annual report for the year ending 31 December 2013. FUNCTIONAL CURRENCY Each entity in the group uses the functional currency which best represents the economic substance of the underlying events and circumstances relevant to that entity (“the functional currency”). The functional currency of the parent changed with effect from 01 January 2013 to the US Dollar, which best represents the economic substance of underlying events and circumstances applicable to Gold One parent. The change in circumstances arose as a result of the closing of the Australian office. The majority of significant remaining transactions are determined with reference to the US Dollar. There have been no other changes to functional currency within the group. The condensed consolidated interim financial statements are presented in Australian Dollar. 11
  13. 13. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 2. GOING CONCERN The group incurred a loss before tax of $ 41 million for the six months ended 30 June 2013. Losses were incurred as a result of lower commodity prices and the deliveries into the unfavourable gold forward sale agreement which was acquired as part of the acquisition of Rand Uranium. These factors and the impact of the illegal industrial action in 2012 caused the group to breach certain of its debt covenants with Investec. Accordingly, Investec presently holds an unexercised right to immediately demand payment of drawn amounts in full. The outstanding amount of the Investec facility at 30 June 2013 amounting to A$ 70 million was reclassified as short term. As a result, current liabilities exceed current assets by A$ 94 million which results in a short term cash shortfall position. On 1 July 2013, Gold One repaid an amount of A$ 17 million of capital and accrued interest reducing the amount outstanding with Investec to A$ 53 million. Gold One is in negotiations to refinance all of its present debt facilities. The Board expects these negotiations to be concluded successfully. Gold One’s major shareholder BCX Gold Investment Holdings ("BCX Gold"), has recently increased its stake in the company to over 90%. BCX Gold has to date invested approximately A$ 700 million to acquire its stake in Gold One and has further supported Gold One through unsecured shareholder loans. BCX Gold has provided a letter of support to provide further shareholder funding to Gold One including should Investec exercise their rights in terms of the breach of the debt covenants. Furthermore, BCX Gold has provided additional shareholder funding of US$ 20 million since 30 June 2012. These proceeds have been placed on deposit and form part of the present working capital position of the group. At 30 August, the group held cash of approximately A$ 23 million. The Board acknowledges that the group’s operating funding requirements and the potential for Investec to demand immediate repayment of its loans in full, represents a significant refinancing requirement for the coming 12 months. However, the Board is confident that the going concern basis remains appropriate for the following reasons: Gold One is currently in negotiations with its debt financiers to refinance the existing debt facilities. These negotiations are advanced and anticipated to be completed successfully; and Gold One has financial support from its major shareholder should further funding requirements be required. Accordingly, these condensed consolidated interim financial statements are prepared on the basis of accounting policies applicable to a going concern. 12
  14. 14. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 3. CHANGES IN ACCOUNTING POLICY The group has adopted the following new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 01 January 2013. There is no aggregate effect of the changes in accounting policy on the condensed consolidated interim financial statements for the six months ended 30 June 2013. AASB 10 CONSOLIDATED FINANCIAL STATEMENTS SUBSIDIARIES As a result of AASB 10, the group has changed its accounting policy for determining whether it has control over and consequently whether it consolidates its investees. AASB 10 introduces a new control model that is applicable to all investees by focusing on whether the group has power over an investee, exposure or rights to variable returns from its involvement with the investee and the ability to use its power to affect those returns. In particular, AASB 10 requires that the group consolidates investees that it controls on the basis of de facto circumstances. In accordance with the transitional provisions of AASB 10, the group reassessed the control conclusion for its investees at 01 January 2013. It was determined that no changes in control will be required for investments currently held. AASB 13 FAIR VALUE MEASUREMENT AASB 13 establishes a single framework for measuring fair value and marketing disclosure about fair vale measurements, when such measurements are required or permitted by other AASBs. In particular, it unifies the definition of fair values as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurements in other AASBs, including AASB 7 Financial Instruments: Disclosures. In accordance with the transitional provisions of AASB 13, the group has applied the new fair value measurement guidance prospectively, and has not provided any comparative information for new disclosures. Notwithstanding the above, the change had no significant impact on the measurements of the group's assets and liabilities. AASB 101 PRESENTATION OF ITEMS OF OTHER COMPREHENSIVE INCOME As a result of the amendments to AASB 101, the Group has modified the presentation of items of other comprehensive income in its condensed consolidated statement of profit or loss and other comprehensive income, to present separately items that would be reclassified to profit or loss in the future from those that would never be. Comparative information has also been re-presented accordingly. The adoption of the amendment to AASB 101 has no impact on the recognised assets, liabilities and comprehensive income of the Group. AASB 134 SEGMENT INFORMATION The amendment to AASB 134 clarifies that the group need to disclose the measures of total assets and liabilities of a particular reportable segment only if the amounts are regularly provided to the group's chief operating decision maker, and there has been a material change from the amount disclosed in the last annual report for that reportable segment. 4. SEGMENT INFORMATION DESCRIPTION OF SEGMENTS Management has determined the operating segments based on the reports reviewed by the Executive Committee (chief operating decision maker) and used to make strategic decisions. The committee considers the business from both a functional and a geographic perspective and has identified five reportable segments: Corporate, which consists of corporate, administrative and business development activities; Modder East, Cooke Underground and Randfontein Surface Operations, which represent the segments responsible for the extraction of and processing of gold ore into fine gold; and Projects, which consist of the exploration and feasibility studies of the group's mineral properties. There are no differences from the last annual report in the basis of segmentation for the measurement of segment profit or loss. It is noted that Ezulwini was acquired on 01 August 2012 and that the six months ended 30 June 2013 results include the impact thereof. 13
  15. 15. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 4. SEGMENT INFORMATION (continued) The reported measure of assets and liabilities excludes inter-segment assets and liabilities. Corporate assets consist mainly of cash and cash equivalents managed centrally for the other segments. Performance is measured based on segment profit before tax as included in the internal management reports that are reviewed by the Executive Committee. The group is primarily domiciled in South Africa. The revenue, profit and total non-current assets described in the table below are located in South Africa. SEGMENT INFORMATION PROVIDED TO THE EXECUTIVE COMMITTEE 30 June 2013 A$ '000 Restated 30 June 2012 A$ '000 73 811 84 083 27 875 - 89 083 72 416 27 676 - 185 769 189 175 30 June 2013 A$ '000 Restated 30 June 2012 A$ '000 (LOSS) / PROFIT BEFORE TAX Corporate Modder East Cooke Underground Randfontein Surface Projects Gain on bargain purchase (5 299) 31 526 (69 205) 5 689 (3 529) - (8 339) 44 639 (16 225) 5 204 (5 969) 95 436 CONSOLIDATED (LOSS) / PROFIT BEFORE TAX (40 818) 114 746 SEGMENT REVENUE Corporate Modder East Cook Underground Randfontein Surface Projects CONSOLIDATED SEGMENT REVENUE Restated 30 June 31 December 2012 2013 A$ '000 A$ '000 ASSETS Corporate Modder East Cooke Underground Randfontein Surface Projects 25 840 136 229 393 498 97 474 29 202 44 409 108 691 444 796 158 240 28 827 682 243 784 963 LIABILITIES Corporate Modder East Cooke Underground Randfontein Surface Projects (189 916) (108 032) (70 386) (24 040) (2 496) (157 504) (115 568) (113 612) (42 561) (2 497) CONSOLIDATED LIABILITIES (394 870) (431 742) 14
  16. 16. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 30 June 2013 5. Restated 30 June 2012 (LOSS) / EARNINGS PER SHARE (LOSS) / EARNINGS PER SHARE Basic (loss) / earnings per share (A$) Diluted (loss) / earnings per share (A$) (0.03) (0.03) 0.06 0.06 BASIC (LOSS) / EARNINGS PER SHARE The calculation of basic (loss) / earnings per share at 30 June 2013 was based on the loss attributable to ordinary shareholders of A$ 37 million (2012: profit of A$ 92 million) and a weighted average number of shares of ordinary shares outstanding of 1 417 754 459 (2012: 1 415 715 886). (Loss) / profit attributable to the owners of the company (A$ '000) (37 089) 91 978 WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES (BASIC) Issued ordinary shares at 01 January Issue of shares - Gold One Mozambique Limitada Effect of share options exercised Effect of share issue related to a business combination - Goliath Gold 1 416 538 989 1 415 189 093 109 872 1 215 470 21 837 395 084 WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES 1 417 754 459 1 415 715 886 DILUTED (LOSS) / EARNINGS PER SHARE The calculation of diluted (loss) / earnings per share at 30 June 2013 was based on loss attributable to the ordinary shareholders of A$ 37 million (2012: profit of A$ 92 million) after diluted potential ordinary shares of 1 453 923 785 (2012: 1 463 422 847). DILUTED WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES Weighted average number of ordinary shares (basic) Employee share options in issue 1 417 754 459 1 415 715 886 36 169 326 47 706 961 DILUTED NUMBER OF ORDINARY SHARES 1 453 923 785 1 463 422 847 The average market value of the group's shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding. 15
  17. 17. 6. Mine development, development costs and plant facilities Undeveloped properties Other plant and equipment 18 269 13 596 31 865 235 816 319 017 106 646 661 479 16 (174 127) (89 196) (26 706) (58 225) 572 226 234 346 228 271 109 609 CARRYING VALUE A$ '000 (136) (6) (130) (15 637) (5 649) (7 642) (2 346) Restated 2012 881 393 381 017 338 650 161 726 (29 447) (14 084) (7 207) (8 156) (75 898) (75 897) (1) IMPAIRMENT LOSS A$ '000 (219 914) (145 201) (19 633) (55 080) ACCUMULATED DEPRECIATION AND IMPAIRMENT COST LOSS A$ '000 A$ '000 FOREIGN CURRENCY TRANSLATION ADDITIONS DISPOSALS RESERVE DEPRECIATION A$ '000 A$ '000 A$ '000 A$ '000 746 353 TOTAL CARRYING AMOUNT AT THE BEGINNING OF THE PERIOD A$ '000 323 542 254 977 167 834 RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT - 2013 2013 ACCUMULATED DEPRECIATION AND IMPAIRMENT COST LOSS A$ '000 A$ '000 Mine development costs and plant facilities Undeveloped properties Other plant and equipment PROPERTY, PLANT AND EQUIPMENT for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Gold One International Limited Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2013 572 226 234 346 228 271 109 609 TOTAL A$ '000 661 479 235 816 319 017 106 646 CARRYING VALUE A$ '000
  18. 18. 6. 55 109 1 289 8 745 65 143 108 002 13 002 21 927 142 931 562 205 339 895 91 479 130 831 ACQUISITION THROUGH BUSINESS ADDITIONS COMBINATION A$ '000 A$ '000 (26) (26) - DISPOSALS A$ '000 - (3 526) 3 692 (166) TRANSFERS A$ '000 (20) (20) - (46 803) (15 723) (1 701) (29 379) (59 251) (15 920) (17 450) (25 881) REFOREIGN ALLOCATION CURRENCY TO TRANSLATION INTANGIBLES RESERVE DEPRECIATION A$ '000 A$ '000 A$ '000 (2 700) Refer to note 10 for contractual and capital commitments. 17 - (2 700) IMPAIRMENT LOSS A$ '000 Investec Bank Limited's loans are secured by the assets in Rand Uranium and all non-rehabilitation related cash balances in the group amounting to A$ 432 million (refer to note 8). PLEDGED AS SECURITY Mine development, development costs and plant facilities Undeveloped properties Other plant and equipment CARRYING AMOUNT AT THE BEGINNING OF THE PERIOD A$ '000 RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT - 31 DECEMBER 2012 (RESTATED) PROPERTY, PLANT AND EQUIPMENT (continued) for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Gold One International Limited Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2013 661 479 319 017 106 646 235 816 RESTATED TOTAL A$ '000
  19. 19. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 6. PROPERTY, PLANT AND EQUIPMENT (continued) IMPAIRMENT LOSS The group reviews and tests the carrying value of its mining assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Consideration was given to a range of indicators including a decline in the long term gold price and market capitalisation of the group. As a result, the Rand Uranium cash generating unit's recoverable amount did not support its carrying value at 30 June 2013 and an impairment loss A$ 76 million was recognised. The carrying amounts of Modder East and Ezulwini cash generating units were also tested against their recoverable amounts and no impairment losses were required under current market conditions. Management assumptions include: The gold price assumptions represent management’s best estimate of the future price of gold. A long term gold price of A$ 45 505 / kg (ZAR 410 000 / kg) is based on a range of economic and market conditions that are expected to exist over the remaining useful life of the assets. Annual life of mine plans take into account the following: Proved and probable ore reserves; The real pre-tax discount rate, per cash generating unit ranged from 12.38% to 18.0%, is derived from the group’s weighted average cost of capital ("WACC") and risk factors which were consistent with the basis used in 2012. In determining the WACC for each cash generating unit appropriate use has been made for mining and country risk factors; Cash flows used in impairment calculations are based on life of mine plans which range from 13 to 15 years; and Under International Financial Reporting Standards it is clear that in preparing interim financial reports, companies make more use of estimation methods than they do in the process of annual financial reporting. Gold One’s estimates of a range of factors (including its reserve and resource inventory and future production and cost levels) are premised on an extensive annual planning process, the last of which was completed at the end of 2012. Gold One’s impairments were calculated using these most recent planning estimates from the end of 2012, along with adjustments to elements that are known. They do not include information from optimised plans, which are currently being prepared and will include measures to mitigate the effects of the recent decline in the gold price. (Bearing in mind the assumptions made and information used, these estimates of impairments necessarily contain a greater element of uncertainty than those traditionally completed at year-end). The estimates of impairment, assumptions and life of mine plans will be updated in the fourth quarter. The life of mine plans will be adjusted at year-end to reflect the latest gold price environment and assumptions. The directors will then review the recoverable amount of these assets and make adjustments to the impairment charge as necessary. The determination of the recoverable amount is highly sensitive to changes in the ZAR gold price. An increase of 10% in the ZAR gold price would result in an increase in the recoverable amount of A$ 87 million of the impaired Rand Uranium cash generating unit. 18
  20. 20. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 30 June 31 December 2012 2013 A$ '000 A$ '000 7. NET GOLD DERIVATIVES LIABILITIES Opening balance At acquisition Delivery of gold to settle the derivative liability Fair value (gain) / loss on derivative liability (Gain) / loss on foreign exchange Effect of translation to presentation currency 76 834 (12 331) (47 063) (1 257) (2 772) 102 408 (45 853) 21 406 1 474 (2 601) 13 411 76 834 NET GOLD DERIVATIVE LIABILITIES COMPRISE Franco-Nevada gold derivative Forward sale agreement 12 809 602 53 125 23 709 Add: Gold hedge asset Less: Short term portion of derivative liabilities 13 411 2 690 (6 714) 76 834 (30 399) 9 387 46 435 LONG TERM PORTION OF DERIVATIVE LIABILITIES FRANCO-NEVADA GOLD DERIVATIVE On 05 November 2009, First Uranium Corporation signed an agreement with Franco-Nevada (Barbados) Corporation ("Franco-Nevada"), whereby Franco-Nevada acquired the right to receive seven percent of the life of mine gold production from Ezulwini (the Ezulwini Gold Stream Transaction). Under the terms of the Ezulwini Gold Stream Transaction, FrancoNevada paid Ezulwini US$ 50 million upfront. Franco-Nevada will make an ongoing payment equal to the lesser of US$ 400 / oz (the Fixed Price, subject to an annual inflation adjustment of 1%, non-compounding, starting in the fourth year following receipt of the first payment) and the prevailing spot price at the time of such payment for each ounce of gold delivered under the contract. The total gold ounces delivery obligation by Ezulwini under the current Ezulwini life of mine plan to Franco-Nevada has been accounted for as a financial liability, which is measured at fair valued using the Garman Kohlhagen, extension of the Black Scholes pricing model. All cash received and cost of production relating to the delivered ounces are recognised as part of the derivative expense related to the Gold Stream Transaction along with the revaluation effects of the financial derivative liability. Pursuant to the Ezulwini Gold Stream Transaction, Ezulwini granted to Franco-Nevada a special bond over certain of the tailings dams and a pledge of seven percent of the gold production from Ezulwini. Franco-Nevada also has the right of first refusal on future gold sales transactions that might be considered at Ezulwini. The JORC code defines reserves as the economically mineable part of a measured or indicated resource demonstrated by at least a preliminary feasibility study. As such, it is the reserves that are used as an estimation of the future potential gold production of Ezulwini. At the date of Gold One’s acquisition of Ezulwini, the latter had not declared any reserves on its mining property. The total estimated gold ounces used in the valuation of the gold stream transaction, at the acquisition date, was therefore based on the measured resources of Ezulwini as published in the Scott Wilson Roscoe Postle Associates Inc. report dated 02 February 2011. This represented the latest verified information regarding potential future gold production of Ezulwini at the acquisition date. Based on this information an amount of 3 438 615 oz was used on the basis of the valuation prepared for the 31 December 2012 annual report. During June 2013, a new life of mine plan for Ezulwini was approved by SRK Consulting as part of the assessment of the existing reserves and resources of the operation. The new life of mine plan indicated reserves of approximately 365 738 oz as at 30 June 2013. This is the first reporting date at which an estimate of the reserves has become available for use in the valuation of the gold stream transaction. As such, the decrease in future potential production from 3 438 615 oz to 365 738 oz is considered to be a change in estimate during the 30 June half year-end. The resulting adjustment to the fair value of the liability arising from this transaction is therefore accounted for prospectively, in accordance with the Gold One group accounting policy. The valuation of this gold stream transaction is directly correlated to any changes in the estimated future gold production of Ezulwini, with a 10% change in the production, resulting in a 10% change in the valuation of the liability arising from the Ezulwini Gold Stream Transaction. 19
  21. 21. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 7. NET GOLD DERIVATIVES LIABILITIES (continued) The financial liability is fair valued using the Garman Kohlhagen, extension of the Black Scholes pricing model. The following assumptions were used: 30 June 31 December 2012 2013 Strike price (US$ / oz) Gold price (US$ / oz) Estimated life of mine production (oz) 3 Month Libor rate Gold lease rates (12 months) 400 1 251 375 219 0.273 % 0.466 % 400 1 661 3 438 615 0.306 % 0.378 % 30 June 31 December 2012 2013 A$ '000 A$ '000 8. BORROWINGS Secured Unsecured 69 908 157 123 97 833 120 379 Less: Short term portion of borrowings 227 031 (69 908) 218 212 (60 195) LONG TERM PORTION OF BORROWINGS 157 123 158 017 RECONCILIATION Opening balance Draw downs Finance charges on borrowings Acquisition through business combination Repayments (capital and interest) Effect of translation to presentation currency 218 212 22 096 11 041 (40 134) 15 816 230 285 11 759 30 080 (48 928) (4 984) 227 031 218 212 SECURED Investec Bank Limited made available to the group facilities two loans totaling A$ 169 million to facilitate the acquisition of Rand Uranium and Ezulwini. Repayments for these facilities occur quarterly. At 30 June 2013, A$ 70 million remains unpaid on this facility. At 30 June 2013 the company was in breach of contract on the Investec facilities. As a result all Investec debt has been classified as current. On 01 July 2013 the group made a scheduled repayment of A$ 13 million to Investec. Investec loans are secured by the assets in Rand Uranium and over all non-rehabilitation related cash balances in the group amounting to A$ 432 million. UNSECURED Baiyin Precious Metals Limited (“Baiyin”) advanced two unsecured shareholder loans totaling US$ 145 million (A$ 141 million) to Gold One to facilitate the acquisition of Rand Uranium and Ezulwini. These loans accrue interest at 10% and 8.5% p.a. respectively for which the interest is repayable semi annually. The principal repayment is due on 28 September 2014. In July 2013, the group received a further advance of US$ 20 million pursuant to this facility. 20
  22. 22. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 9. BUSINESS COMBINATIONS In August 2012, Gold One acquired 100% of the issued share capital of First Uranium Limited ("Cyprus"), which in turn holds 100% of the issued share capital of Ezulwini, a mining company adjacent to Rand Uranium. All conditions precedent to the acquisition of Cyprus were fulfilled and the acquisition was declared unconditional on 01 August 2012. The purchase price of A$ 67 million (US$ 70 million) was settled in cash on completion date. At 31 December 2012, the fair values of net assets had been determined on a provisional basis. The fair values of net assets were finalised in 2013 during the measurement period. Accordingly, the provisional fair values recorded as at 31 December 2012 in the annual report have been adjusted to reflect final determined values. Details of the adjusted purchase consideration and the fair values of the net assets acquired are as follows: PREVIOUSLY RESTATED REPORTED BALANCE 31 DECEMBER ADJUSTMENTS 31 DECEMBER 2012 2012 2012 A$ '000 A$ '000 A$ '000 (6 514) 15 317 (44 564) 374 4 424 112 038 4 173 (1 163) (13 323) 1 511 (5 114) - (6 514) 15 317 (44 564) 374 4 424 106 924 4 173 (1 163) (13 323) 1 511 Gain on bargain purchase 72 273 (5 114) (5 114) 5 114 67 159 - COST OF INVESTMENT 67 159 FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Asset retirement provisions Cash and cash equivalents Gold derivative liabilities Held to maturity investments Inventories Property, plant and equipment Restricted cash Taxation payable Trade and other payables Trade and other receivables Total identifiable net assets - 67 159 No deferred tax assets have been recognised on unredeemed capital expenditure in accordance with recognition principles in AASB 112 Income Taxes. At acquisition, the unrecognised deferred asset was A$ 40 million. 21
  23. 23. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 30 June 31 December 2012 2013 A$ '000 A$ '000 10. COMMITMENTS GUARANTEES, CAPITAL AND OPERATING LEASE COMMITMENTS Guarantees Capital commitments - Contracted Operating lease commitments 22 003 18 613 1 286 10 194 9 906 1 384 GUARANTEES Department of Mineral Resources Eskom Office rental 20 998 1 005 - 9 123 936 135 The guarantees relate to performance bank and insurance guarantees provided to the Department of Mineral Resources for environmental rehabilitation, as well as performance guarantees to Eskom for energy. These guarantees are secured by restricted cash. CAPITAL COMMITMENTS The capital commitments relate to contracted capital expenditure for the 2013 financial reporting period. Capital commitments will be funded out of the group's own cash flows and debt financing. 11. RELATED PARTIES CONSULTANCY SERVICES Consultancy services of A$ 0.4 million (2012: A$ 0.7 million) were provided by Long March Capital Management Limited. Rates were based on arm's length transactions and no amount was outstanding at 30 June 2013. SHAREHOLDER'S LOAN Interest on related party loans of A$ 7 million was paid to Baiyin Precious Metals Investment Limited. The loan proceeds net of repayment amounted to A$ 17 million. The balance of the loan outstanding as at 30 June 2013 is A$ 157 million (2012: A$ 120 million). TRAVELLING Travel services of A$ 0.4 million (2012: A$ 0.6 million) were provided by Long March Capital Management Limited. Rates were based on arm's length transactions and no amount was outstanding at 30 June 2013. 12. FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS CARRIED AT FAIR VALUE The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The group uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. AASB 7 Financial Instruments: Disclosure requires disclosure of the fair value measurements by level of the following fair value measurement hierarchy: Quoted prices (unadjusted) in active markets for identical assets (level 1); Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2); and Inputs for the asset or liability that are not based on observable market data (level 3). 22
  24. 24. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 12. FINANCIAL INSTRUMENTS (continued) The group classified the financial assets and financial liabilities as follows: Investments held in trust (Available for sale assets) - Level 2; Gold forward sale agreements - Level 2; and Franco-Nevada gold derivative - Level 3. The table below analyses recurring fair value measurements for financial assets and financial liabilities. Financial asset and liabilities Level 1 A$ '000 Investments held in trust Gold forward sale agreements Franco-Nevada gold derivative - Level 2 A$ '000 25 611 (602) 25 009 Level 3 A$ '000 (12 809) (12 809) Total A$ '000 25 611 (602) (12 809) 12 200 LEVEL 2 FAIR VALUES The funds held in the Cooke Rehabilitation Trust (investment held in trust) as restricted have been placed to meet the closure liability at the end of the life of the mine. These funds are invested in equity linked deposits with various terms ranging from 3-5 years with a guaranteed interest of 6-7% per annum. The yield to date ranges between 9-12% per annum. The level 2 fair values for over the counter derivative financial instruments are based on quotes from financial institutions. These quotes are tested for reasonableness by discounting expected future cash flows using market interest rates for similar instruments at measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risks of the group entities and the counterparties where appropriate. LEVEL 3 FAIR VALUES The group has an established control framework with respect to the measurements of fair values. The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information is used to measure fair values, then the valuation team assesses and documents the evidence obtained from third parties to support the conclusions that such valuations meet the requirements of AASB 13, including the level of the fair value hierarchy in which the resulting fair value estimates should be classified. Significant valuation issues are reported to the Audit Committee. Further information with regards to inputs into the valuation of the Franco-Nevada hedge is set out in note 7. 23
  25. 25. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 12. FINANCIAL INSTRUMENTS (continued) CARRYING AMOUNTS VERSUS FAIR VALUES The fair values of financial assets and financial liabilities, together with the carrying amounts in the condensed consolidated statement of financial position, are as follows: CARRYING VALUE A$ '000 30 June 2013 FINANCIAL ASSETS Cash and cash equivalents Trade receivables Held to maturity investments Restricted cash Investments held in trust Gold derivative asset FAIR VALUE A$ '000 Note 7 8 69 707 48 815 4 977 16 101 227 031 48 815 4 977 16 101 233 240 296 924 FINANCIAL LIABILITIES Trade and other payables Bank overdraft Gold derivative liabilities Borrowings 7 729 9 957 2 414 21 306 25 611 2 690 69 707 7 7 729 9 957 2 414 21 306 25 611 2 690 303 133 CARRYING VALUE A$ '000 31 December 2012 FINANCIAL ASSETS Cash and cash equivalents Trade receivables Held to maturity investments Restricted cash Investments held in trust FAIR VALUE A$ '000 Note 37 008 10 894 2 127 13 402 30 266 93 697 7 8 24 93 697 33 403 76 834 218 212 33 403 76 834 218 212 328 449 FINANCIAL LIABILITIES Trade and other payables Gold derivative Borrowings 37 008 10 894 2 127 13 402 30 266 328 449
  26. 26. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 13. EVENTS AFTER THE REPORTING PERIOD DISPOSAL OF WEST RAND ASSETS On 16 August 2013, Gold One and Newshelf 1114 entered into a merger agreement with Sibanye whereby Gold One’s 74% shareholding in Newshelf 1114 and the Gold One group's claims against Newshelf 1114 will be merged with Sibanye’s operations in exchange for such number of new Sibanye ordinary shares that represents 17% of Sibanye’s issued share capital, on a fully diluted basis (“Consideration Shares”) on closing of the transaction (“the Proposed Transaction”). Newshelf 1114 holds a 100% shareholding in Rand Uranium and, post an internal restructure (“Restructure”) being completed, will hold 100% of Ezulwini. The implementation of the Proposed Transaction is both subject to and conditional upon the fulfillment of, inter alia, the following conditions precedent: The approval of the Proposed Transaction, where so required, by any third party financier or security holder of Gold One and Sibanye, respectively; The shareholders of Sibanye passing such resolutions required to approve and implement the Proposed Transaction; The shareholders of Gold One passing such resolutions required to approve and implement the Proposed Transaction; All necessary approvals having been obtained from, including but not limited to: The Minister of Mineral Resources of South Africa; The JSE; The South African Reserve Bank, to the extent required; The competition authorities, as provided for in the Competition Act; All Chinese regulatory approvals required by the BCX Consortium, including that of the Chinese National Development and Reform Commission, the Chinese Ministry of Commerce and the Chinese State Administration of Foreign Exchange; Completion of the Restructure; and A material adverse change not having occurred, unless it has been remedied by closing of the Proposed Transaction. The Proposed Transaction is also subject to normal warranties and representations for a transaction of this nature. In recognition of the strategic relationship established through the Proposed Transaction, Gold One shall be entitled to nominate three individuals for election by the Sibanye shareholders as directors of Sibanye, to serve as non-executive directors on the Sibanye board. 25
  27. 27. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 13. EVENTS AFTER THE REPORTING PERIOD (continued) ACQUISITION OF GROOTVLEI ASSETS Gold One and Goliath Gold Mining Limited ("Goliath Gold") advised that two of three prospecting applications pertaining to the acquisition agreement to purchase the underground deposits and selected surface assets of Pamodzi Gold East Rand Proprietary Limited (“Pamodzi”) were granted in August 2013. Furthermore, the acquisition of the selected surface assets has been made unconditional. On 17 April 2012 Gold One announced that the company, together with Goliath Gold (in which Gold One holds a 72% controlling interest), had entered into an A$ 8 million acquisition agreement with the joint provisional liquidators representing Pamodzi and its subsidiaries (“the Sellers”) to acquire the Grootvlei Proprietary Mines Limited (“Grootvlei”) treatment plant, selected Grootvlei surface assets (including primarily the Grootvlei office complex), historical geological data, and the right to apply for three prospecting rights. Gold One was to acquire the treatment plant and surface assets together with the right to apply for a prospecting right over the down-dip extensions to Gold One’s Modder East Operations for A$ 7 million. Goliath Gold was to obtain prospecting rights and acquire historical mining and geological data from Consolidated Modderfontein Mines 1979 Limited, Consolidated Modderfontein Mines Limited, Nigel Gold Mining Company Proprietary Limited and Grootvlei for A$ 0.5 million. The original transaction has been made unconditional through an amendment to the acquisition agreement to comprise: An initial payment of A$ 4 million for the selected surface assets and historical mining and geological data, which is now unconditional. The balance of the purchase price relating to selected surface assets and historical mining and geological data is A$ 3 million, a deposit of A$ 0.8 million having already been paid, and is payable on transfer of the immovable property; and An A$ 4 million payment for the prospecting rights, which will only be payable in the event that the third prospecting right is granted within 30 days of the fulfillment of the last condition precedent, which must be fulfilled on or before 31 August 2013. Should the final prospecting right not be granted, Gold One and Goliath Gold will be exempt from payment of the A$ 4 million. 14. PRIOR PERIOD ADJUSTMENTS The table below sets out the adjustments made to balances previously reported. CONSOLIDATED STATEMENT OF FINANCIAL POSITION Property, plant and equipment Investment property Intangible assets Deferred taxation liability Reserves Retained earnings PREVIOUSLY REPORTED 31 DECEMBER BUSINESS ADDITIONAL 2012COMBINATIONS DEPRECIATION A$ '000 A$ '000 A$ '000 669 953 8 715 9 285 (54 130) 44 098 (57 399) (5 019) (95) 5 114 (3 435) 14 3 421 RESTATED PRIOR ACCOUNT BALANCE PERIOD RE- 31 DECEMBER ERROR ALLOCATION 2012 A$ '000 A$ '000 A$ '000 (7 822) 1 460 6 362 (20) 20 - PREVIOUSLY REPORTED 30 BUSINESS JUNE 2012 COMBINATION A$ '000 A$ '000 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Gain on bargain purchase price 26 - 95 436 661 479 893 9 305 (52 670) 44 017 (42 502) RESTATED 30 JUNE 2012 A$ '000 95 436
  28. 28. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2013 14. PRIOR PERIOD ADJUSTMENTS (continued) RAND URANIUM BUSINESS COMBINATION At 30 June 2012, the fair values of the assets acquired and liabilities assumed were indicated to be provisional. These provisional fair values of assets acquired and liabilities assumed were finalised during the measurement period and were included in the 31 December 2012 annual report. A measurement period adjustment was made to the 30 June 2012 profit or loss of A$ 95 million to reflect the gain on bargain purchase and consequential deferred tax implications that existed at the date of acquisition. As 2012 was the earliest year of consolidation of Rand Uranium, no third statement of financial position has been presented as prior periods were not impacted. EZULWINI BUSINESS COMBINATION Ezulwini was consolidated into the group with effect from 01 August 2012. At 31 December 2012, the fair values of assets acquired and liabilities assumed were deemed to be provisional. These provisional fair values of assets acquired and liabilities assumed were finalised during the measurement period. Accordingly, a measurement period adjustment was made to the fair values at acquisition of Ezulwini (refer to note 9 for further details) and the consolidated statement of financial position. PRIOR PERIOD ERROR During the period, an error was identified as an overstatement of the investment property and deferred tax liability as part of the acquisition of Rand Uranium in January 2012. This error is considered material. Accordingly, the investment property, deferred tax liabilities and gain on bargain purchase have been restated. As 2012 was the earliest year of consolidation of Rand Uranium, no third statement of financial position has been presented as prior periods were not impacted. 27
  29. 29. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 DIRECTORS DECLARATION In the opinion of the directors of Gold One International Limited: 1. The condensed consolidated interim financial statements and notes set out on pages 7 to 27, are in accordance with the Corporations Act 2001 including: (a) (b) Giving a true and fair view of the group’s financial position as at 30 June 2013 and of its performance for the six month period ended on that date; and Complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and 2. There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of the directors: On behalf of the Board Christopher D Chadwick (CFO and acting CEO) 30 August 2013 28
  30. 30. Independent auditor’s review report to the members of Gold One International Limited Report on the financial statements We have reviewed the accompanying condensed consolidated interim financial statements of Gold One International Limited, which comprises the condensed consolidated statement of financial position as at 30 June 2013, condensed consolidated statement of profit and loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the half-year ended on that date, notes 1 to 14 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the Group comprising the company and the entities it controlled at the half-year’s end or from time to time during the half-year. Directors’ responsibility for the interim financial statements The directors of the company are responsible for the preparation of the interim financial statements that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the interim financial statements that is free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express a conclusion on the interim financial statements based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the interim financial statements is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s financial position as at 30 June 2013 and its performance for the half-year ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As auditor of Gold One International Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial statements. A review of interim financial statements consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Liability limited by a scheme approved under Professional Standards Legislation.
  31. 31. Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial statements of Gold One International Limited is not in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group’s financial position as at 30 June 2013 and of its performance for the half-year ended on that date; and (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. KPMG Trevor Hart Partner Perth 30 August 2013
  32. 32. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To: the directors of Gold One International Limited I declare that, to the best of my knowledge and belief, in relation to the review for the half-year ended 30 June 2013 there has been: (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and (ii) no contraventions of any applicable code of professional conduct in relation to the review. KPMG Trevor Hart Partner Perth 30 August 2013 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Liability limited by a scheme approved under Professional Standards Legislation.
  33. 33. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 CORPORATE DIRECTORY REGISTERED OFFICE AUSTRALIAN CORPORATE OFFICE 79 Broadway Nedlands WA 6009 Telephone: + 61 8 6389 2668 Facsimile: + 61 8 6389 2588 SOUTH AFRICAN CORPORATE OFFICE Constantia Office Park Bridgeview House Ground Floor Corner 14th Avenue and Hendrik Potgieter Street Weltevreden Park 1709 Telephone: +27 11 726 1047 Facsimile: +27 11 726 1087 BOARD OF DIRECTORS NON-EXECUTIVE DIRECTORS Yalei Sun (Chairman) Michael H Solomon Allan H Liu Robert T L Chan Chao Zhou EXECUTIVE DIRECTOR Christopher D Chadwick (CFO and acting CEO) SECRETARIES Kim Hogg (Australia) Pierre B Kruger (South Africa) AUDITORS KPMG 2355 Georges Terrace Perth WA 600 SHARE REGISTRIES AUSTRALIA Boardroom Limited Level 7, 207 Kent Street Sydney NSW 2000 32
  34. 34. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 CORPORATE DIRECTORY SHARE REGISTRIES SOUTH AFRICA Computershare Investor Services Proprietary Limited 70 Marshall Street Johannesburg 2001 SOLICITORS AUSTRALIA Ashurst LLP 2 The Esplanade Perth WA 6000 SOUTH AFRICA Edward Nathan Sonnenbergs Incorporated 1 North Wharf Square Loop Street Foreshore Cape Town 8001 BANKERS AUSTRALIA Commonwealth Bank of Australia Institutional Banking Level 22 Darling Park Tower 1 201 Sussex Street Sydney NSW 2000 SOUTH AFRICA ABSA Bank Limited Corporate Banking 15 Alice Lane Sandton 2196 33
  35. 35. Gold One International Limited Condensed consolidated interim financial statements for the six months ended 30 June 2013 CORPORATE DIRECTORY STOCK EXCHANGE LISTINGS PRIMARY LISTING ASX Limited 20 Bridge Street Sydney NSW 2000 Ticker: GDO SECONDARY LISTING JSE Limited One Exchange Square Gwen Lane Sandton 2196 Ticker: GDO AMERICAN DEPOSITORY SHARES (ADSS) OTCQX International Ticker: GLDZY Level 1 ADS Sponsor The Bank of New York Mellon Depository Receipts Division 101 Barclay Street 22nd floor New York 102386 USA WEBSITE ADDRESSES www.gold1.com.au www.gold1.co.za OTHER KEY MANAGEMENT PERSONNEL Other key management personnel of the group are those who report directly to the executive directors of the company, being: Wayne Robinson (Executive Vice President: West Rand Operations) Izak J Marais (Executive Vice President: East Rand Operations) Dick Plaistowe (Senior Vice President: Surface Operations) Richard A Stewart (Executive Vice President: Technical Services) Pierre B Kruger (Group Company Secretary) 34

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