CGA Mining Limited - Preliminary final report for the year ended 30 June 2012

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CGA Mining Limited

Aug 31, 2012, 09:00 ET

APPENDIX 4E

CGA Mining Limited and its Controlled Entities

ABN 88 009 153 128

PERTH, Western Australia, Aug. 31, 2012 /CNW/ -

Preliminary Final Report
Financial Year Ended 30 June 2012

RESULTS FOR ANNOUNCEMENTS TO THE MARKET

Current reporting period:					12 months to 30 June 2012
Previous reporting period:					12 months to 30 June 2011

This report is based on accounts that are in the process of being audited.

Operating Performance

			US$
Revenues from ordinary activities	Down 21.3%	to	187,694,928

Profit/(loss) from ordinary activities after tax attributable to members	Down 90.8%	to	5,988,349

Net profit/(loss) for the period attributable to members	Down 90.8%	to	5,988,349


Dividends	Amount per security	Franked amount per security

Final Dividend	Nil	Nil

Interim Dividend	Nil	Nil


Record date for determining entitlements to the final dividend					N/A

Payment date for the final dividend					N/A

There are no dividend or distribution reinvestment plans and there have been no dividend or distribution payments during the financial year ended 30 June 2012.

COMMENTARY ON RESULTS FOR THE YEAR ENDED 30 JUNE 2012

HIGHLIGHTS

The results for this financial year were heavily impacted by the failure of the SAG mill which impacted the first 6 months of operations and accordingly, we would anticipate a material improvement in the coming 12 month period.
All expenses in relation to the repair of the SAG Mill have been fully expensed in the 12 month period. Furthermore, any insurance claims arising therefrom, including a loss of profits insurance claim, have not been reflected in the current year results. Any insurance proceeds received subsequently will be disclosed as income in the period received.
Whilst the results for the year were affected by the SAG Mill incident, following the recommencement of full production in January 2012, the six months to June 2012 has resulted in production of a record 100,013 ounces.
In the six months to 30 June 2012, net profit after tax was US$28,109,938 (6 months to 30 June 2011: US$26,063,123) before allowing for non-recurring expenses on the SAG Mill of US$6,213,085 and impairment arising from the mark to market of investments of US$6,869,837.
The plant continued to operate above expectations with availabilities for the 6 months to 30 June 2012 averaging 94.8%. Since recommissioning, the SAG Mill has consistently operated at or above 6.6Mtpa.
The optimisation study commenced during the year is due for completion shortly and will look at various options to lift production rates to +10Mtpa.
Net tangible assets per share increased from US73.42c per share at 30 June 2011 to 84.39c per share as at 30 June 2012. Net assets likewise increased from US$23,099,543 as at 30 June 2011, to US$321,263,390 as at 30 June 2012.

OTHER INFORMATION


NTA Backing	Current Period US cents	Prior Period US cents

Net tangible assets per security	84.39	73.42

Statement of Retained Earnings

	Consolidated
	Current Period US$	Previous Period US$

Balance at 1 July	49,949,969	(15,132,295)
Net profit for the year	5,988,349	65,082,264
Dividends paid	-	-
Balance 30 June	55,938,318	49,949,969

Control Gained or lost over entities


Entities:					Ratel Gold Limited Zambian Mining Ltd Seringa Mining Ltd Mkushi Copper Joint Venture Co Ltd CGX Holdings Ltd Segilola Gold Ltd
Date of loss of control:					6 August 2010


	Current Reporting Period	Previous Reporting Period
	($US'000)	($US'000)
Contribution to profit from ordinary activities in the current reporting period and whole of previous reporting period	-	(278)

Associates and Joint Ventures


	Current Reporting Period	Previous Reporting Period
	($US'000)	($US'000)
Aggregate share of profits(losses) of associates:

Profit (loss) from ordinary activities before tax	(3,883)	(3,192)

Income tax on ordinary activities	-	-

Share of net profit/(loss) of associates and joint venture entities	(3,883)	(3,192)


		Percentage ownership interest held at end of period or date of disposal		Contribution to net profit / (loss) ($US'000)
Name of entity		Current Reporting Period	Previous Reporting Period	Current Reporting Period	Previous Reporting Period

Aroroy Resources Inc.		40%	20.5%	(16)	-

Masminero Resources Corporation				(30)	-
	- Direct ownership	40%	32.8%
	- Indirect ownership	24%	-

Ratel Group Limited		19.15%	19.15%	(927)	(746)

Filminera Resources Corporation				(1,986)	(812)
	- Direct ownership	40%	40%
	- Indirect ownership	24%	24%

St Augustine Gold and Copper Limited		20.75%	22.8%	(924)	(1,634)
				(3,883)	(3,192)

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2011
Continuing Operations		US$	US$
Revenue	1(a)	187,694,928	238,481,332
Cost of sales	1(b)	(147,855,451)	(158,112,878)
Gross profit		39,839,477	80,368,454

Administrative expenses	1(c)	(4,236,998)	(4,896,938)
Finance costs	1(f)	(3,781,558)	(5,042,470)
Movement in fair value of derivative financial instruments	1(e)	(863,693)	493,491
Impairment of Investments		(6,869,837)	-
Gain on deconsolidation		-	2,929,066
Share of loss of associates		(3,883,156)	(3,191,968)
SAG Mill expenses	1(g)	(6,213,083)	-
Other expenses	1(h)	(8,191,517)	(4,945,690)
Profit from continuing operations before income tax expense		5,799,635	65,713,945

Income tax (expense)/benefit		188,714	(353,827)
Net profit from continuing operations for the period		5,988,349	65,360,118

Discontinued Operations
Profit/(Loss) from discontinued operations after tax	12	-	(277,854)
Net profit for the year		5,988,349	65,082,264

Other comprehensive income
Movement in available for sale investments		(1,374,944)	1,687,074
Cashflow hedges:
Transferred to the income statement		46,750,961	15,147,482
Net Loss taken to equity net of tax		(16,721,080)	(25,275,045)
Other comprehensive income/(loss) for the year, net of tax		28,654,937	(8,440,489)
Total comprehensive income/(loss) for the year		34,643,286	56,641,775

Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the company
Basic earnings per share (cents)		1.79	19.64
Diluted earnings per share (cents)		1.78	19.31

Earnings per share for profit/(loss) attributable to the ordinary equity holders of the company
Basic earnings per share (cents)		1.79	19.56
Diluted earnings per share (cents)		1.78	19.23

CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2012
	Note	2012	2011
ASSETS		US$	US$
Current Assets
Cash and cash equivalents	2	79,671,526	107,336,345
Trade and other receivables	3	2,115,475	704,292
Prepayments		5,999,955	7,849,902
Inventories	4	25,765,293	17,063,423
Derivative financial assets	11	-	1,759,748
Total Current Assets		113,552,249	134,713,710

Non-Current Assets
Available for sale financial assets	5	2,806,732	4,181,703
Investment in associates		86,412,984	71,574,437
Plant and equipment		191,842,654	191,355,070
Intangible assets	6	36,223,732	38,278,394
Tax assets		22,554,390	19,532,656
Total Non-current Assets		339,840,492	324,922,260

TOTAL ASSETS		453,392,741	459,635,970

LIABILITIES
Current Liabilities
Trade and other payables	7	13,151,694	12,697,346
Interest bearing loans and borrowings	8	27,578,868	22,077,574
Derivative financial liabilities	11	38,783,810	37,770,654
Provisions	9	1,843,891	527,119
Total Current Liabilities		81,358,263	73,072,693

Non-Current Liabilities
Interest bearing loans and borrowings	8	26,485,296	46,953,180
Provisions	9	1,247,542	911,306
Derivative financial liabilities	11	17,543,273	49,482,368
Deferred Tax Liability		5,494,977	6,116,880
Total Non-Current Liabilities		50,771,088	103,463,734

TOTAL LIABILITIES		132,129,351	176,536,427

NET ASSETS		321,263,390	283,099,543

Equity
Contributed equity	10	305,076,668	302,016,570
Reserves	10	(39,751,596)	(68,866,996)
Retained profits	10	55,938,318	49,949,969

TOTAL EQUITY		321,263,390	283,099,543

STATEMENT OF CONSOLIDATED CASHFLOWS
FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2011
		US$	US$
Cash flows from operating activities
Receipts from customers		184,694,778	235,280,284
Payments to suppliers and employees		(150,225,407)	(149,213,447)
Exploration and evaluation expenditure		-	(277,854)
Interest received		88,885	594,723
Taxes Paid		(4,574,435)	(864,420)
Net cash inflow from operating activities	2	29,983,821	85,519,286

Cash flows from investing activities
Payments for property, plant and equipment		(11,984,958)	(10,856,435)
Loans to associate		(17,780,275)	(10,784,737)
Loans to non-related parties		-	(14,461,394)
Repayment of loan from non-related parties		-	14,458,626
Investments in associates		(4,900,000)	(16,896,067)
Disposal of controlled entity		-	(166,882)
Investments in available for sale financial assets		-	(1,011,941)
Net cash outflow from investing activities		(34,665,233)	(39,718,830)

Cash flows from financing activities
Proceeds from the issue of shares and exercise of Warrants and options to acquire shares		3,060,099	2,469,125
Interest paid		(3,353,683)	(3,844,270)
Capital raising costs		-	(2,338)
Repayment of borrowings		(21,748,715)	(24,205,533)
Financing costs		(301,388)	(316,409)
Net cash inflow/(outflow) from financing activities		(22,343,687)	(25,899,425)

Net increase in cash and cash equivalents		(27,025,099)	19,901,031

Cash and cash equivalents at beginning of financial year		107,336,345	87,787,357

Effects of exchange rate fluctuations on the balances of cash held in foreign currencies		(639,720)	(352,043)

Cash and cash equivalents at end of the financial year	2	79,671,526	107,336,345

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2012

	Contributed Equity US$	Retained Profits/ (Accumulated losses) US$	Foreign Currency Translation Reserve US$	Share Based Payments Reserve US$	Cash Flow Hedge Reserve US$	Available for Sale Reserve US$	Total US$

At 1 July 2011	302,016,570	49,949,969	5,815,359	5,862,078	(82,678,901)	2,134,468	283,099,543
Net gain/(loss) on cash flow hedges	-	-	-	-	30,029,881	-	30,029,881
Available for sale reserve	-	-	-	-	-	(1,374,945)	(1,374,945)
Profit for the period	-	5,988,349	-	-	-	-	5,988,349
Total comprehensive income for the period	-	5,988,349	-	-	30,029,881	(1,374,945)	34,643,285

Equity Transactions:
Share-based payment	-	-	-	460,464	-	-	460,464
Exercise of options	3,060,098	-	-	-	-	-	3,060,098

At 30 June 2012	305,076,668	55,938,318	5,815,359	6,322,542	(52,649,020)	759,523	321,263,390

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2011

	*Contributed* *Equity* *US$*	*Retained Profits/* *(Accumulated losses)* *US$*	*Foreign Currency* *Translation Reserve* *US$*	*Share Based* *Payments* *Reserve* *US$*	*Cash Flow* *Hedge* *Reserve* *US$*	*Asset* *Revaluation* *Reserve* *US$*	*Total* *US$*

At 1 July 2010	299,576,520	(15,132,295)	5,815,359	4,941,151	(72,551,338)	447,394	223,096,791
Net gain/(loss) on cash flow hedges	-	-	-	-	(10,127,563)	-	(10,127,563)
Available for sale reserve	-	-	-	-	-	1,687,074	1,687,074
Profit for the period	-	65,082,264	-	-	-	-	65,082,264
Total comprehensive income for the period	-	65,082,264	-	-	(10,127,563)	1,687,074	56,641,775

Equity Transactions:
Transaction costs	(9,352)	-	-	-	-	-	(9,352)
Share-based payment	-	-	-	920,927	-	-	920,927
Exercise of options and warrants	2,449,402	-	-	-	-	-	2,449,402

At 30 June 2011	302,016,570	49,949,969	5,815,359	5,862,078	(82,678,901)	2,134,468	283,099,543

1. REVENUES AND EXPENSES
	2012	2011
	US$	US$
(a) Revenue
Revenue from metals sales	184,285,215	235,313,629
Management fee	409,563	-
Interest - non related parties	88,885	561,378
Interest - accretion on loan to associate	2,911,265	2,606,325
	187,694,928	238,481,332

(b) Cost of sales
Ore purchases	53,977,029	68,187,366
Salaries and employee benefits	1,659,295	1,564,191
Contractors and professional fees	14,946,451	15,381,574
Consumables and supplies	44,619,248	41,696,706
Leases and rentals	1,631,168	1,884,396
Travel and accommodation	503,541	415,840
Utilities	25,322	28,498
Taxes and government charges	1,682,554	3,816,964
Other production overheads	11,836,905	8,983,449
Depreciation and amortisation	16,973,938	16,153,894
	147,855,451	158,112,878

(c) Administrative expenses
Salaries and wages	2,745,893	3,073,262
Defined contribution/superannuation expense	274,775	341,034
Employee share option expense	460,464	920,927
Foreign exchange losses	639,720	352,042
Depreciation	116,146	209,673
	4,236,998	4,896,938

(d) Lease payments
Minimum lease payments - operating lease	381,498	139,244

(e) Movement in fair value of derivative financial instruments - gain/(loss)
Ineffectiveness in gold forward sales contracts	(343,074)	-
Ineffectiveness in interest rate swap contracts	(552,981)	-
Mark to market movement in fuel hedges not qualifying for hedge accounting	1,759,748	493,491
	863,693	493,491

(f) Finance costs
Borrowing costs expensed	3,781,558	5,042,470
Total	3,781,558	5,042,470

(g) SAG Mill expenses
Included within SAG Mill expenses for the current year are legal, consulting and other costs incurred in relation to the repair of the SAG Mill. An insurance claim has been lodged to compensate for costs incurred to repair the SAG Mill, however it is not a point of virtual certainty and therefore the costs have been expensed. Any insurance proceeds subsequently received will be disclosed as income in the period received.

(h) Other expenses
Included within Other expenses is $382,269 being the loss on disposal of assets during the year.

	2012	2011
	US$	US$
2. CASH AND CASH EQUIVALENTS

Cash at bank and on hand	58,059,694	75,228,173
Deposits at call	21,611,832	32,108,172
	79,671,526	107,336,345

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying periods of between one day and three months, depending on the Company's immediate cash requirements, and earn interest at short term deposit rates. The fair value of cash and cash equivalents is $79,671,526 (2011: $107,336,345).

Restricted Cash
Included in cash and cash equivalents is an amount of $9,000,000 held with BNP Paribas in line with the requirements of project financing facility agreement which requires two quarters of principal and interest payments due on the facility to be held on deposit.

Reconciliation to Cash Flow Statement

For the purposes of the Cash Flow Statement, cash and cash equivalents comprise the following at 30 June:


Cash at bank and on hand		58,059,694	75,228,173
Deposits at call		21,611,832	32,108,172
		79,671,526	107,336,345

Reconciliation of net profit after tax to net cash flows from operations
Net profit/(loss)after related income tax		5,988,349	65,082,264
Adjustment for non-cash income and expense items:
Depreciation and amortisation		17,090,083	17,245,358
Unrealised foreign exchange (gain)/loss		639,720	352,043
Loss on sale of assets		382,269	-
Proceeds from sale of assets		2,236	-
Share-based payments		460,464	920,927
Share of loss of associate		3,883,156	3,191,968
Impairment of Investments		6,869,837	-
Interest income on receivable from associate		(2,911,265)	(2,606,325)
Borrowing costs		4,082,944	4,160,678
Movement in fair value of derivatives		863,693	(493,491)
Other		27	(1,451)

Changes in assets and liabilities:
(Increase) / decrease in assets:
	Trade and other receivables	(1,411,183)	(565,883)
	Prepayments	1,849,945	(4,867,826)
	Inventories	(8,701,870)	(5,866,525)
	Tax assets	(3,021,734)	(1,452,688)
	Other assets	-	3,306,819
Increase / (decrease) in liabilities:
	Trade and other payables	2,886,045	5,982,356
	Deferred tax liabilities	(621,903)	591,812
	Provisions	1,653,008	539,249
Net cash inflow/(outflow) from operating activities		29,983,821	85,519,286

Non cash financing activities
During the year there were leased asset additions of $6,306,081 (2011: $12,435,962).

	2012	2011
	US$	US$
3. TRADE AND OTHER RECEIVABLES (Current)

GST	47,387	43,710
Other debtors	2,068,088	660,582
	2,115,475	704,292

Other receivables are non-interest bearing and are generally on 30-90 day terms. There are no receivables past due or impaired. It is expected that these receivables will be received when due.

4. INVENTORIES

Gold on hand	6,501,031	2,986,430
Gold in circuit	4,837,256	3,311,213
Consumables	9,979,365	7,625,071
Consumables & Stores In transit	50,449	-
Ore stockpiles	4,397,192	3,140,709
	25,765,293	17,063,423

5. OTHER FINANCIAL ASSETS

Investments
Available for sale financial assets	1,855,468	1,855,494
Revaluation of investments at fair value	951,264	2,326,209
	2,806,732	4,181,703

The fair value of the available for sale investments has been determined directly by reference to published price quotations in an active market.

6. INTANGIBLE ASSETS (Non-current)

(a) Reconciliation of carrying amounts at the beginning and end of the period

Contractual Rights

Cost	43,173,940	43,173,940
Accumulated amortisation	(6,950,208)	(4,895,546)
Net carrying value	36,223,732	38,278,394

Balance at beginning of year	38,278,394	41,013,214
Amortisation	(2,054,662)	(2,734,820)
Balance at end of year	36,223,732	38,278,394

(b) Description of the Group's intangible assets

Contractual rights
Contractual rights have been acquired through business combinations and are carried at cost less accumulated amortisation and accumulated impairment losses. They represent the contractual right of PGPRC, a wholly owned subsidiary of CGA, to purchase mineral ore from the Masbate Gold Project owned by Filminera, an associate of CGA, at a specified price.

The intangible asset has been assessed as having a finite life and is amortised using the units of production method over the reserve base of the Masbate Gold Project in the Philippines.

	2012	2011
	US$	US$

7. TRADE AND OTHER PAYABLES (current)

Trade payables - third parties	6,337,913	7,003,835
Trade payables to an associate	6,813,781	5,693,511
	13,151,694	12,697,346

Trade payables to third parties are non-interest bearing and are normally settled on 30 to 60 day terms.

Trade payables to an associate relate to payables for ore purchases, are non-interest bearing and are normally settled on 30 to 60 day terms.

8. INTEREST BEARING LIABILITIES (current)

Loans⁽ⁱ⁾	17,748,210	16,272,330
Lease liabilities ⁽ⁱⁱ⁾	7,398,961	5,805,244
Insurance Premium Funding ⁽ⁱⁱⁱ⁾	2,431,697	-
	27,578,868	22,077,574

INTEREST BEARING LIABILITIES (non-current)

Loans⁽ⁱ⁾	9,457,680	27,205,890
Lease liabilities ⁽ⁱⁱ⁾	17,027,616	19,747,290
	26,485,296	46,953,180

(i) During the current year the Group made principal repayments of $16,272,330 to the BNP Paribas project financing facility. The drawn down portion of the facility accrues interest at 3.15% plus LIBOR per annum. The remaining loan is repayable over a 1.5 year period, on or before 31 December 2013. The current portion of the loan liability is $17,748,210 and the non-current portion is $9,457,680.

(ii) The Company has entered into a finance lease for certain equipment to be used in the mining process for the Masbate Gold Project. The lease details are specified in the Masbate Technical Contract with Leighton Contractors (Philippines) Incorporated and Leighton Holdings Limited. The term of the lease is for 72 months up to May 2016 and is secured over the underlying assets. The Company has acquired an additional fleet during the 30 June 2011 and 30 June 2012 years which is for a term of 60 months and both are secured over the underlying assets.

(iii) During December 2011, the Group entered into a premium funding arrangement for the renewal of ISR Insurance. The term of the funding is for 10 months at an interest rate of 3.98%.

9. PROVISIONS (Current)

Employee entitlements	816,932	527,119
Other taxes	1,026,959	-
	1,843,891	527,119

PROVISIONS (Non-current)

Employee entitlements	183,188	125,397
Provision for rehabilitation	1,064,354	785,909
	1,247,542	911,306

The provision for rehabilitation in relation to the Masbate Gold Project is largely recognised in the accounts of Filminera who holds the mining licenses and tenements over the project.

10. CONTRIBUTED EQUITY AND RESERVES

2012

2011

2012

2011

Number

US$

(a) Issued and paid up capital:

337,775,726

333,425,726

305,076,669

302,016,570

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Movement in ordinary shares on issue	2012	2011	2012	2011
	Number	Number	US$	US$
(i) Ordinary Shares
Opening balance	333,425,726	331,294,976	302,016,570	299,576,520
Add: Shares issued on exercise of options and warrants	4,350,000	2,130,750	3,060,099	2,449,402
Less: share issue costs	-	-	-	(9,352)
Issued and fully paid	337,775,726	333,425,726	305,076,669	302,016,570


			2012	2011
			Number	Number
(ii) Options
Unlisted options:
Opening balance			10,821,250	11,902,000
Issued during the year			-	1,050,000
Exercised during the year			(4,350,000)	(2,130,750)
Expired during the year			(150,000)	-
Closing Balance			6,321,250	10,821,250

Exercisable at A$0.65 on or before 30 June 2012			-	4,300,000
Exercisable at A$0.90 on or before 30 September 2012			200,000	200,000
Exercisable at A$1.80 on or before 31 March 2013			700,000	700,000
Exercisable at A$1.20 on or before 15 October 2013			400,000	400,000
Exercisable at A$1.15 on or before 17 November 2013			40,000	40,000
Exercisable at A$1.50 on or before 28 November 2013			3,000,000	3,000,000
Exercisable at A$1.70 on or before 2 April 2014			981,250	1,031,250
Exercisable at A$1.50 on or before 30 June 2014			100,000	100,000
Exercisable at A$2.97 on or before 27 December 2011			-	150,000
Exercisable at A$2.97 on or before 27 December 2012			75,000	75,000
Exercisable at A$2.97 on or before 31 December 2015			825,000	825,000
			6,321,250	10,821,250

Share options

The Company has a share based payment option scheme under which options to subscribe for the Company's shares have been granted to certain employees and consultants.

(b) RESERVES

Consolidated	Foreign currency translation	Share- based payments	Cash flow hedge reserve	Asset revaluation reserve	Total
	US$	US$	US$	US$	US$
At 1 July 2011	5,815,359	5,862,078	(82,678,902)	2,134,468	(68,866,997)
Share-based payment	-	460,464	-	-	460,464
Net gain/(loss) on cash flow hedges	-	-	30,029,881	-	30,029,881
Revaluation of listed investments	-	-	-	(1,374,944)	(1,374,944)
At 30 June 2012	5,815,359	6,322,542	(52,649,021)	759,524	(39,751,596)

At 1 July 2010	5,815,359	4,941,151	(72,551,338)	447,394	(61,347,434)
Share-based payment	-	920,927	-	-	920,927
Net gain/(loss) on cash flow hedges	-	-	(10,127,564)	-	(10,127,564)
Revaluation of listed investments	-	-	-	1,687,074	1,687,074
At 30 June 2011	5,815,359	5,862,078	(82,678,902)	2,134,468	(68,866,997)

	2012	2011
	US$	US$
(c) ACCUMULATED LOSSES

Balance at 1 July	49,949,969	(15,132,295)
Net profit for the year	5,988,349	65,082,264
Balance at 30 June	55,938,318	49,949,969

11. DERIVATE FINANCIAL INSTRUMENTS

Derivative financial assets - current
Fuel swaps	-	1,759,748
	-	1,759,748

Derivative financial liabilities - current
Gold forward sales contracts	38,650,698	37,770,654
Interest rate swaps	133,112	-
	38,783,810	37,770,654

Derivative financial liabilities - non current
Gold forward sales contracts	17,526,033	48,979,948
Interest rate swaps	17,240	502,420
	17,543,273	49,482,368

12. DISCONTINUED OPERATIONS

There were no discontinued operations during the current financial year.

On 6 August 2010, the Company announced that the offering of common shares in Ratel Gold Limited ("Ratel"), a wholly owned subsidiary of the Company, had closed successfully. Pursuant to the offering, Ratel issued 70,000,000 common shares at a price of C$0.20 per common share, for aggregate gross proceeds of C$14 million. Upon completion of the offering, the Company held 20% of Ratel's issued shares, resulting in a gain on deconsolidation of $2,929,067.

As a result Ratel is disclosed in the financial report as a discontinued operation and was previously represented in the "Exploration Activities (Africa)" segment in the Segment Information note.

The results of the discontinued operations for the year until disposal are presented below:

(a) Results of discontinued operations	2012	2011
	US$	US$
Revenue	-	-
Expenses	-	(277,854)
Loss for the year from discontinued operations	-	(277,854)

Profit/(loss) from discontinued operations	-	(277,854)

13. EVENTS AFTER THE BALANCE SHEET DATE

No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years

COMPLIANCE STATEMENT

This report, and the accounts upon which it is based, have been prepared in accordance with AASB Standards and other AASB authoritative pronouncements.
This report, and the accounts upon which it is based, use the same accounting policies.
This report does give a true and fair view of the matters disclosed.
This report is based on accounts that are in the process of being audited.
The entity has a formally constituted audit committee.

Signed