29 Sep 2010 07:00
For release on 29 September 2010 at 7.00a.m AIM: CLF / TSX: CFG
Cluff Gold plc
("Cluff Gold" or the "Company")
2010 Interim Results
Cluff Gold Announces a Maiden Profit of US$6m
Confirms its position as a 100,000 ounces per annum gold producer
Cluff Gold, the dual AIM/TSX-listed West African focused gold mining company, announces its interim results for the half-year ended 30 June 2010.
HIGHLIGHTS
Financial:
·; Profit after tax of US$ 6m (H1 2009: loss of US$ 29.5m)
·; EBITDA: US$ 18.4m (H1 2009: loss of US$ 1.5m)
·; Net cash inflow from operations of US$12.7m (H1 2009: outflow of US$8.8m)
·; Cash at 30 June 2010 amounted to US$8.1m (31 December 2009: US$2.3m)
·; Average cash cost (excluding royalties) of US$709/oz (FY 2009: US$865/oz)
Corporate:
·; Appointment of Peter Spivey as Chief Executive Officer, based in West Africa, effective from 1st January 2011
·; Algy Cluff stands down as CEO from 1st January 2011, but maintains his position as Executive Chairman based in London
·; New corporate website launched at www.cluffgold.com
Operations:
Baomahun Gold Project, Sierra Leone (100% ownership)
·; Measured and Indicated resources estimated at 1,420,000oz. Inferred resources estimated at 1,030,000oz
·; Preliminary Assessment (Scoping Study) completed in August with positive results:
o 157,000oz average life of mine annual production
o Cash cost of US$500/oz anticipated over the life of the mine
o Capex of US$195m
o 8 year mine life
o Expected 92% recovery
·; Opportunities for further cost control with the advent of hydroelectric potential currently being explored as well as a maximised pit design option to optimise the cut-off between open-pit and underground mining
·; VTEM geophysical survey complete and full results are expected Q4 2010
Kalsaka Gold Mine, Burkina Faso (78% ownership)
·; 40,831oz of gold produced in H1 2010, or over 80,000oz on an annualised basis, an increase of 50% from 2009
·; 12% reduction in cash cost to US$672/oz in H1 2010
·; 5,000m drilling programme initiated with a further 5,000m planned at the neighbouring Yako licence in H2 2010
Angovia Gold Mine, Côte d'Ivoire (90% ownership)
·; 11,278oz of gold produced in H1 2010
·; 25% decrease in cash cost to US$837/oz in H1 2010 from US$1,113/oz in 2009
·; Cash costs and production expected to improve in H2 2010 as a result of continued operational improvements
·; 5,000m drilling programme to define additional oxide resources initiated in Q2 2010
·; High sulphide potential: Measured and Indicated resources (sulphide mineralisation) are currently estimated at 263,000 ounces, with a full review of historical results initiated to define additional targets
Algy Cluff, Chairman and Chief Executive of Cluff Gold commented:
"Our results not only confirm our position as a producer of over 100,000 ounces of gold per annum, but it also reveals the Company's maiden profit of just over US$6million. Notwithstanding the perils consonant with mining and the long lead times which are characteristic of the business, we have, in the space of five years, brought into production two mines and are now dedicated to completing the bankable feasibility study which hopefully will evolve into a third, and much larger gold mine at Baomahun.
Since founding Cluff Gold in 2004, the Company has matured into a profitable business, owning a strong balance sheet and poised with the realistic potential for continued growth. With this success, I am pleased to announce that I plan to handover the role of Chief Executive to Peter Spivey, effective from January 1st 2011. Peter will continue to take charge of the day-to-day business operations in Africa, while I remain as the Company's Executive Chairman based in London."
We are also pleased to announce the launch of a brand new Company website, from which the Interim Results are also available for download at www.cluffgold.com.
ENQUIRIES
| Cluff Gold plc J.G. Cluff - Chairman and Chief Executive Pete Gardner - Finance Director Tel: +44 (0) 20 7340 9790 | Evolution Securities Limited Rob Collins Tim Redfern Tel: +44 (0) 20 7071 4300 |
| Pelham Bell Pottinger Investor Relations (Global) Charles Vivian Klara Kaczmarek Tel: +44 (0) 20 7861 3232
| Farm Street Communications Limited Press Relations (U.K.) Simon Robinson +44 (0) 7593 340 107 simon.robinson@farmstreetmedia.com |
NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS PRESS RELEASE.
This News Release includes certain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements other than statements of historical fact, included in this release, including, without limitation, the positioning of the Company for future success, statements regarding potential future production at Angovia, Kalsaka and Baomahun, exploration and drilling results at Baomahun, and future capital plans and objectives of Cluff Gold, are forward-looking information that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Cluff Gold's expectations include, among others, risks related to international operations, the actual results of current exploration and drilling activities, changes in project parameters as plans continue to be refined as well as future price of gold. Although Cluff Gold has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cluff Gold does not undertake to update any forward-looking statements that are included herein, except in accordance with applicable securities laws.
Peter Spivey has reviewed and approved the information contained within this announcement. Mr Spivey (BSc, AusIMM) is the Chief Operating Officer of the Company.
A technical report prepared by SRK Consulting (UK) Limited entitled "Technical Review of the Baomahun Gold Exploration Project, Sierra Leone", was filed on 12 August 2010 at www.sedar.com. A technical report prepared by SRK Consulting (UK) Limited entitled "Technical Review of the Angovia Gold Mine, Yaoure, Côte d'Ivoire", was filed on 17 February 2009 at www.sedar.com. A technical report prepared by SRK Consulting (UK) Limited entitled "Technical Review of the Kalsaka Gold Mine, Burkina Faso", was filed on 17 February 2009 at www.sedar.com.
Cautionary Statement:
The Preliminary Assessment is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the conclusions reached in the Preliminary Assessment will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Chairman's Statement
Dear Shareholder,
This year's Interim Report not only affirms our position as a producer of over 100,000 ounces of gold per annum, but it also reveals the Company's maiden profit of just over US$6million. Notwithstanding the perils consonant with mining and the long lead times which are characteristic of the business, we have, in the space of five years, brought into production two mines and are now dedicated to completing the bankable feasibility study which hopefully will evolve into a third, and much larger gold mine at the Baomahun project in Sierra Leone.
I am delighted to announce that operational successes, particularly at the Kalsaka mine, have allowed your Company to significantly strengthen its balance sheet whilst funding ongoing exploration at all three projects from operational cash flow.
The Company is conservatively managed and its activities, notwithstanding opportunities which frequently arise, are confined to the three countries in which we operate. Any extension to our business will not be considered unless it is in West Africa. Exploration expenditure is primarily devoted to adding reserves to our two producing mines and to augmenting the resource at Baomahun. Moreover it is clear that at both Angovia and Kalsaka there exists excellent potential for the discovery of significant sulphide resources which could add great value to your Company.
The Baomahun project remains central to our strategy of delivering full value for our shareholders. A key element of this strategy, the completion of the bankable feasibility study, is on track for completion in 2011 and is expected to be funded from operating cash flow. As I have previously stated, the true potential for Baomahun will only be understood once exploration along the remainder of the 12km prospective belt has been undertaken. Preliminary results from the recent VTEM airborne geophysical survey across the entire project area have highlighted a number of exciting anomalies, and I look forward to announcing the final results of that survey in due course together with our plans to follow up on these targets.
Of the various factors involved in creating and sustaining a mining company, management is manifestly of the greatest importance. This year we have strengthened our overall team by the appointments of Peter Spivey as a Director and Chief Operating Officer, Pete Gardner as Finance Director and Catherine Apthorpe as Company Secretary. Douglas Chikohora has moved from an Executive to a Non-Executive role following his decision to play a wider role in African exploration primarily in the base metals sphere. Since Cluff Gold is focused on development rather than exploration, this is an understandable decision. He and I founded this and other previous African mining companies and I will chair the new venture.
Since founding Cluff Gold in 2004, the Company has matured into a profitable business, owning a strong balance sheet and poised with the realistic potential for continued growth. With this success, I am pleased to announce that I plan to handover the role of Chief Executive to Peter Spivey, effective from January 1st 2011. Peter will continue to take charge of the day-to-day business operations in Africa, while I remain as the Company's Executive Chairman based in London.
I have much enjoyed the challenge of creating a fourth African company alongside long standing colleagues such as Douglas Chikohora, Peter Cowley and Eileen Carr and I warmly thank all of my colleagues for doing the real work which has governed our progress. I am wary of making predictions about a business operating in a volatile world but shareholders should, I respectfully contend, be comforted by our combination of cash flow from the two mines complemented by the possibility of bringing a major new mine into production in Sierra Leone in due course.
Operational Review
Kalsaka
| Production Statistics | FY 2009 | H1 2010 |
|
|
|
|
| Ore mined (t) | 1,296,903 | 778,937 |
| Waste mined (t) | 9,303,243 | 4,989,719 |
| Total tonnage mined (t) | 10,600,146 | 5,768,656 |
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|
|
|
| Ore processed (t) | 1,135,913 | 789,830 |
| Average ore head grade (g/t) | 1.70 | 1.80 |
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|
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| Gold production (oz) | 54,428 | 40,831 |
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|
|
| Cash costs excl. royalties (US$/oz sold) | 767 | 672 |
| Average realised gold price (US$/oz sold) | 1,018 | 1,150 |
Production levels at Kalsaka have ramped up steadily since commissioning in June 2009. Gold production at Kalsaka in H1 2010 totalled 40,831 ounces, or over 80,000 ounces on an annualised basis, versus 54,428 ounces in 2009, representing an increase of 50%. This is predominantly a reflection of ongoing processing improvements made as ramp-up and optimisation continue.
Processing tonnage increased significantly from 1.1Mt in 2009 to an annualised rate of 1.6Mtpa in H1 2010 as a result of ongoing plant modifications made last year which allowed mill throughput to increase from the original 1.2Mtpa stated in the feasibility study. The average mill head grade also showed some improvements from 1.70g/t in 2009 to 1.80g/t in H1 2010.
The above milestones have been realised as a result of various mining improvements made last year, such as the employment of a new mining contractor and additional mining fleet, and improved waste management.
These changes contributed to the increased production volumes in H1 2010 and, more importantly, made the operation more efficient. This is reflected in the 12% reduction in cash costs in H1 2010 to US$672/oz compared to US$767/oz in 2009. We expect this figure to continue to improve as the operation reaches the average life of mine stripping ratio estimated in the Feasibility Study to be 4.9 compared to 6.4 in H1 2010.
Continual mine site improvements are being made to ensure that the operation is as efficient as possible. Currently Kalsaka is on track to produce in excess of 70,000 ounces of gold in 2010.
Exploration
Having achieved strong operational performance, the focus of the Kalsaka mine has now turned to an aggressive drilling programme to increase the resource base and extend mine life.
Within the immediate Kalsaka mining licence area, an initial drilling programme of 5,000 metres of reverse circulation drilling continues on prospective targets identified from historical geological data, such as Zoungwa East, Prospect 2000, and areas around East Pit, all within 5km of the processing plant.
A further 5,000 metres of reverse circulation drilling is also planned for 2010 at the neighbouring Yako license located approximately 20km southwest of Kalsaka, where an inferred JORC-compliant resource of 150,000 ounces (at 1.9g/t Au) was estimated in December 2004. Metallurgical testing has indicated that this resource is amenable to heap leaching, and this drilling programme is aimed at upgrading and increasing the resource base and evaluating the 20km regional strike extension lying within the license.
Angovia
| Production Statistics | FY 2009 | H1 2010 | ||
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| ||
| Ore mined (t) | 880,537 | 486,002 | ||
| Waste mined (t) | 5,233,895 | 1,707,133 | ||
| Total tonnage mined (t) | 6,114,432 | 2,193,135 | ||
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| ||
| Ore processed (t) | 738,832 | 420,435 | ||
| Average ore head grade (g/t) | 1.16 | 1.03 | ||
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| ||
| Gold production (oz) | 21,632 | 11,278 | ||
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| ||
| Cash costs excl. royalties (US$/oz sold) | 1,113 | 837 | ||
| Average realised gold price (US$/oz sold) | 1,121 | 1,145 | ||
Gold production at Angovia in H1 2010 totalled 11,278 ounces, in line with 2009. While this is below our expectations, we forecast improvement in H2 2010 as we enhance our mining and processing operations.
Mining activity at Angovia demonstrated slight improvements in H1 2010. Total ore mined for the period was 486,000 tonnes, or 972,000 tonnes on an annualised basis, a 10% increase from 2009. Processing activity at Angovia showed stronger improvements, with 420,000 tonnes stacked, or 840,000 tonnes on an annualised basis, a 14% increase from 2009. These operational improvements are a reflection of various new acquisitions and upgrades made throughout 2009, including improved mining equipment, the acquisition of a new stacker, and an upgrade to the agglomeration drum.
Processing head grade for H1 2010 declined to 1.03g/t from 1.16g/t in 2009 due primarily to the higher grade areas of the Angovia deposit being associated with quartz and other harder materials which cannot be processed without crushing. The higher grade in 2009 was also a result of the mining and processing of additional ore, at an average grade of 1.6g/t, from the Blangan deposit in Q4 2009 and early Q1 2010. Although Blangan is now mined out and the processing ore grade has returned to pre-Blangan levels, we are currently striving to achieve improvements via a new crushing plant, which was acquired in H1 2010, and is currently being commissioned on site. A significant stockpile of high grade material is available for crushing which will augment higher grade transitional and quartz material contained within the remaining reserves.
The cash cost per ounce in H1 2010, at US$837/oz, is a 25% reduction compared to the average 2009 cash cost of US$1,113/oz. This cost reduction resulted from an ongoing programme of plant modifications, which led to more efficient utilisation in 2010, together with improved mining performance and ore availability. We expect this figure to continue to improve over the next few quarters as higher grade harder ore is processed in the new crushing facility.
Exploration
Following on from the success of the Blangan discovery, an ongoing drilling programme focusing on additional near surface gold-in-laterite and gold-in-saprolite deposits, similar to Blangan, is ongoing. The initial phase of a 5,000 metre reverse circulation drilling commenced in Q2 2010. The targets being investigated include Kongonza and Prospect 2 South, as well as various areas close to the processing plant with mineralisation identified from earlier drilling campaigns. Results from this programme are anticipated Q4 2010.
The Company is also investigating the potential for significant sulphide mineralisation below the existing oxide resources. Measured and Indicated resources (sulphide mineralisation) are currently estimated at 263,000 ounces (155,000oz Measured at 1.6g/t Au and 108,000oz Indicated at 1.7g/t Au), and a full review of historical drilling results has been initiated to define additional drilling targets to increase this.
Baomahun
Exploration success at Baomahun continued in H1 2010. On 4 June 2010, the Company announced a resource update for Baomahun, with Measured and Indicated resources estimated at 1,420,000 ounces (508,000oz Measured at 2.9g/t Au and 909,000oz Indicated at 2.9g/t Au) and inferred resources estimated at 1,030,000 ounces (at 2.6g/t Au).
In August 2010, a Preliminary Assessment in compliance with NI 43-101 was completed, generating positive results. The Preliminary Assessment was based on a steady state throughput rate of 1.9Mtpa (1.5Mtpa from open pit operation and 0.4Mtpa from underground), an expected annual production rate of 157,000 ounces per annum, cash cost of US$500/oz and capex of US$195 million. At a gold price of US$1,100/oz and 10% discount rate, this generated an NPV of US$172 million and an IRR of 31%.
Highlights of the Preliminary Assessment are as follows:
|
|
| Open pit | Underground | Total |
| Measured and Indicated Resources | Moz |
|
| 1.42 |
| Inferred Resources | Moz |
|
| 1.03 |
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| Mineable tonnage | Mt | 12.0 | 2.4 | 14.4 |
| Head grade | g/t | 2.7 | 4.3 | 2.9 |
| Mineable ounces | Moz | 1.1 | 0.3 | 1.4 |
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|
|
| Metallurgical recovery | % |
|
| 92% |
| Steady state throughput | Mtpa |
|
| 1.9 |
| Average annual production | Koz |
|
| 157 |
| Average cash costs | US$/oz |
|
| US$500 |
|
|
|
|
|
|
| Mine life | years |
|
| 8 |
| Capital expenditure | US$m |
|
| US$195 |
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|
|
|
|
|
| Net present value (10%) | US$m |
|
| US$172 |
| Internal rate of return | % |
|
| 31% |
There is much room for operating cost re-optimisation opportunities at Baomahun to further improve the economics. Good hydroelectric potential is apparent in the general area of Baomahun, which may augment the heavy fuel oil power plant option assumed in the Preliminary Assessment and thereby materially reduce power costs. In addition, a maximised pit design and the cut-off between open-pit and underground mining are being further investigated as part of the ongoing feasibility study to optimise the project development.
The Company continues to focus on advancing the Baomahun Project towards bankable feasibility study. In achieving this goal, the Company has a US$12 million budget for Baomahun for the period to 30 June 2011. This includes an in-fill drilling programme to upgrade resources from Inferred to Measured and Indicated as part of the feasibility study. Critical path items such as the environmental and social impact assessment (ESIA), hydro-electric power studies and tailings studies have been initiated. It is anticipated that the costs of the feasibility study will be funded out of free cash flow.
The Company is also investigating the significant exploration potential at Baomahun, focussing on the results of the recently conducted VTEM geophysical survey, which will lead to a further exploration drilling programme on defined targets in the remainder of the 12km prospective trend within the licence area. Final results from the VTEM survey are anticipated in Q4 2011.
Financial
The financial results for H1 2010 represent a maiden profit for Cluff Gold, achieved due to the significant improvements in operational performance for the period.
EBITDA, an approximate measure of the cash generation from each business unit, totalled US$18.4 million in the period, compared to a total of US$4.3 million for the whole of 2009, a figure driven by the strong operational performance at Kalsaka. This result has allowed the Company to significantly strengthen its balance sheet, with a marked increase in cash and reduction in short term liabilities compared to 31 December 2009. In addition, the Company has continued to invest in capital equipment at both mines, including the crushing plant at Angovia, together with significant exploration expenditure, predominantly in Sierra Leone.
Of the US$6 million profit after taxation, US$3.9 million is attributable to the equity holders of the Company, giving ordinary earnings per share of US 3.16 cents. The attribution of profit to non-controlling interests has no affect on the cash position of the group: with exploration and construction loans still to be repaid the cash flow from both the Kalsaka and Angovia mines will be wholly available to fund the group's operations for the immediate future.
The US$10 million working capital facility with RMB Australia Holdings Limited was replaced in June 2010 with a US$6 million facility for a further period of 12 months. Cash reserves are being set aside to repay this amount at maturity.
INDEPENDENT REVIEW REPORT TO CLUFF GOLD PLC
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2010 which comprises the consolidated income statement, consolidated statement of other comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, consolidated statement of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared using accounting policies consistent with those to be applied in the next annual financial statements.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Condensed set of financial statements Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim condensed set of 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 International Standards on Auditing (UK and Ireland) 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.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with the AIM Rules of the London Stock Exchange.
PKF (UK) LLP
London, UK
28 September 2010
Cluff gold plc
CONSOLIDATED INCOME statemenT
For the six months ended 30 June 2010
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| 6 months ended 30 june 2010 | 6 months ended 30 june 2009 | 12 months ended 31 December 2009 |
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| Notes | US$'000 | US$'000 | US$'000 |
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| Unaudited | Unaudited | Audited |
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| Continuing Operations |
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|
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| Revenue |
| 60,959 | - | 39,659 |
|
| Cost of Sales |
| (41,716) | - | (35,085) |
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|
|
|
|
|
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| Gross Profit |
| 19,243 | - | 4,574 |
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|
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| General and administrative expenses |
| (3,932) | (3,743) | (7,533) |
|
| Other operating costs |
| (5,766) | (3,901) | (8,893) |
|
| Exploration and development expenses |
| (405) | (43) | (656) |
|
| Impairment of mining properties |
| - | (21,914) | (21,914) |
|
| Profit on disposal of property, plant & equipment |
| - | - | 7 |
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| Operating profit/(loss) |
| 9,140 | (29,601) | (34,415) |
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| Investment Income |
| 4 | 847 | 727 |
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| Finance Costs |
| (788) | (759) | (1,807) |
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| Profit/(loss) before taxation |
| 8,356 | (29,513) | (35,495) |
|
| Income tax |
| (2,341) | - | 1,228 |
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| Profit/(loss) for the period |
| 6,015 | (29,513) | (34,267) |
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| |
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| Attributable to: |
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| |
| Equity shareholders of the parent company |
| 3,875 | (29,513) | (34,267) | |
| Non-controlling interests |
| 2,140 | - | - | |
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| |
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|
| 6,015 | (29,513) | (34,267) |
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| Earnings/(loss) per share |
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| Basic (cents per share) | 5 | 3.16 | (27.35) | (30.25) |
|
| Diluted (cents per share) | 5 | 3.12 | (27.35) | (30.25) |
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Cluff gold plc
CONSOLIDATED statement of comprehensive INCOME
For the six months ended 30 June 2010
|
| 6 months ended 30 june 2010 | 6 months ended 30 june 2009 | 12 months ended 31 December 2009 |
|
|
| US$'000 | US$'000 | US$'000 |
|
|
| Unaudited | Unaudited | Audited |
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|
|
|
|
|
|
| Profit/(loss) for the period | 6,015 | (29,513) | (34,267) |
|
|
|
|
|
|
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| Other comprehensive income |
|
|
| |
| Exchange difference on translating foreign operations | (908) | 360 | 1,974 | |
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|
|
|
| |
| Other comprehensive income for the period, net of taxation | (908) | 360 | 1,974 | |
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|
|
|
| |
| Total comprehensive income for the period | 5,107 | (29,153) | (32,293) |
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| |
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|
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| Attributable to: |
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|
| |
| Equity shareholders of the parent company | 1,977 | (29,153) | (32,293) | |
| Non-controlling interests | 3,130 | - | - | |
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| |
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| 5,107 | (29,153) | (32,293) |
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Cluff gold plc
consolidated statement of financial position
As at 30 June 2010
|
|
| As at30 June 2010 | As at30 June 2009 | As at 31 December 2009 |
|
| Notes | US$'000 | US$'000 | US$'000 |
|
|
| Unaudited | Unaudited | Audited |
| Assets |
|
|
|
|
| Non-current assets |
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|
|
| Intangible fixed assets | 2 | 45,494 | 45,406 | 44,695 |
| Property, plant and equipment | 3 | 35,264 | 44,314 | 39,485 |
| Other receivables | 7 | 2,560 | - | 2,043 |
| Deferred tax asset |
| 999 | - | 1,228 |
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|
|
|
|
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| Total non-current assets |
| 84,317 | 89,720 | 87,451 |
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|
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|
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| Current assets |
|
|
|
|
| Inventories |
| 16,126 | 7,025 | 15,790 |
| Trade and other receivables |
| 8,151 | 5,255 | 8,357 |
| Cash and cash equivalents |
| 8,131 | 7,642 | 2,273 |
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| Total current assets |
| 32,408 | 19,922 | 26,420 |
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| Total assets |
| 116,725 | 109,642 | 113,871 |
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| Equity |
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| Share capital | 4 | 2,229 | 2,136 | 2,224 |
| Share premium |
| 102,080 | 99,962 | 101,993 |
| Merger reserve |
| 15,107 | 15,107 | 15,107 |
| Share option reserve |
| 4,091 | 3,634 | 3,952 |
| Currency translation reserve |
| 776 | 1,060 | 2,674 |
| Accumulated losses |
| (35,538) | (34,889) | (39,643) |
|
|
|
|
|
|
| Total equity attributable to the parent |
| 88,745 | 87,010 | 86,307 |
| Non-controlling interests |
| 3,130 | - | - |
|
|
|
|
|
|
| Total equity |
| 91,875 | 87,010 | 86,307 |
|
|
|
|
|
|
| Liabilities |
|
|
|
|
| Non-current liabilities |
|
|
|
|
| Provisions |
| 5,225 | 5,053 | 4,578 |
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
| Trade and other payables |
| 19,625 | 17,579 | 22,986 |
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
| 24,850 | 22,632 | 27,564 |
|
|
|
|
|
|
|
|
|
|
|
|
| Total equity and liabilities |
| 116,725 | 109,642 | 113,871 |
|
|
|
|
|
|
|
|
|
|
|
|
Cluff gold plc
consolidated statement of changes in equity
For the six months ended 30 June 2010
|
| Share capital | Share premium | Merger reserve | Share option reserve | Cumulative translation reserve | Accumulated Losses | Sub-total | Non-controlling interests | Total Equity |
|
| US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
|
|
|
|
|
|
|
|
|
|
|
| As at 1 January 2009 | 1,841 | 89,407 | 15,107 | 3,152 | 700 | (5,376) | 104,831 | - | 104,831 |
| Loss for the period | - | - | - | - | - | (29,513) | (29,513) | - | (29,513) |
| Exchange translation differences on consolidation | - | - | - | - | 360 | - | 360 | - | 360 |
| Total comprehensive income for the period | - | - | - | - | 360 | (29,513) | (29,153) | - | (29,153) |
| Issue of ordinary share capital | 295 | 11,517 | - | - | - | - | 11,812 | - | 11,812 |
| Issue costs | - | (962) | - | - | - | - | (962) | - | (962) |
| Share option credit | - | - | - | 482 | - | - | 482 | - | 482 |
|
|
|
|
|
|
|
|
|
|
|
| As at 30 June 2009 | 2,136 | 99,962 | 15,107 | 3,634 | 1,060 | (34,889) | 87,010 | - | 87,010 |
| Loss for the period | - | - | - | - | - | (4,754) | (4,754) | - | (4,754) |
| Exchange translation differences on consolidation | - | - | - | - | 1,614 | - | 1,614 | - | 1,614 |
| Total comprehensive income for the period | - | - | - | - | 1,614 | (4,754) | (3,140) | - | (3,140) |
| Issue of ordinary share capital | 88 | 2,031 | - | - | - | - | 2,119 | - | 2,119 |
| Share option charge | - | - | - | 318 | - | - | 318 | - | 318 |
|
|
|
|
|
|
|
|
|
|
|
| As at 31 December 2009 | 2,224 | 101,993 | 15,107 | 3,952 | 2,674 | (39,643) | 86,307 | - | 86,307 |
| Profit for the period | - | - | - | - | - | 3,875 | 3,875 | 2,140 | 6,015 |
| Exchange translation differences on consolidation | - | - | - | - | (1,898) | - | (1,898) | 990 | (908) |
| Total comprehensive income for the period | - | - | - | - | (1,898) | 3,875 | 1,977 | 3,130 | 5,107 |
| Issue of ordinary share capital | 5 | 87 | - | - | - | - | 92 | - | 92 |
| Share option charge | - | - | - | 369 | - | - | 369 | - | 369 |
| Reserve transfer on cancellation of share options | - | - | - | (230) | - | 230 | - | - | - |
|
|
|
|
|
|
|
|
|
|
|
| As at 30 June 2010 | 2,229 | 102,080 | 15,107 | 4,091 | 776 | (35,538) | 88,745 | 3,130 | 91,875 |
Cluff gold plc
consolidated statement of cash flows
For the six months ended 30 June 2010
|
| 6 months ended 30 june 2010 | 6 months ended 30 june 2009 | 12 months ended 31 December 2009 | ||
|
| US$'000 | US$'000 | US$'000 | ||
|
|
| Unaudited | Unaudited | Audited | |
| Cash flows used in operating activities |
|
|
| ||
| Operating profit/(loss) for the period | 9,140 | (29,601) | (34,415) | ||
| Depreciation | 8,622 | 225 | 7,385 | ||
| Impairment of mineral properties | - | 21,914 | 21,914 | ||
| (Decrease)/increase in trade and other payables | (5,762) | (7) | 3,545 | ||
| (Increase)/decrease in trade and other receivables | (410) | 58 | (7,132) | ||
| Increase in inventories | (158) | - | (3,108) | ||
| Increase in provisions | 647 | - | 248 | ||
| Share option charge | 369 | 955 | 742 | ||
| Exploration costs written off | - | 43 | 621 | ||
| Exchange losses | 263 | 222 | 1,391 | ||
| Loss/(profit) on disposal of fixed assets | - | 27 | (7) | ||
|
|
|
|
| ||
| Net cash flows from operating activities | 12,711 | (6,164) | (8,816) | ||
|
|
|
|
| ||
| Cash flows used in investing activities |
|
|
| ||
| Interest receivable | 4 | 17 | 23 | ||
| Interest payable | (1,156) | (224) | (1,035) | ||
| Purchase of property, plant and equipment net of profit from plant commissioning | (3,576) | 556 | (2,290) | ||
| Purchase of intangible assets | (2,322) | (1,438) | (2,920) | ||
| Proceeds from sale of property, plant and equipment | - | - | 15 | ||
|
|
|
|
| ||
| Net cash flows used in investing activities | (7,050) | (1,089) | (6,207) | ||
|
|
|
|
| ||
| Cash flows from financing activities |
|
|
| ||
| Proceeds from the issue of share capital | 92 | 11,811 | 13,931 | ||
| Issue costs paid | - | (961) | (962) | ||
|
|
|
|
| ||
| Net cash flows from financing activities | 92 | 10,850 | 12,969 | ||
|
|
|
|
| ||
|
|
|
|
| ||
| Net increase/(decrease) in cash and cash equivalents | 5,753 | 3,597 | (2,054) | ||
| Cash and cash equivalents at start of period | 2,273 | 4,416 | 4,416 | ||
| Exchange gains/(losses) on cash | 105 | (392) | (89) | ||
|
|
|
|
| ||
| Cash and cash equivalents at end of period | 8,131 | 7,621 | 2,273 | ||
|
|
|
|
| ||
|
|
|
|
| ||
| Cash and cash equivalents comprise |
|
|
| ||
| Cash at bank | 5,331 | 1,145 | 2,273 | ||
| Short term deposits | 2,800 | 6,497 | - | ||
|
|
|
|
| ||
|
| 8,131 | 7,642 | 2,273 | ||
| Bank overdraft | - | (21) | - | ||
|
|
|
|
| ||
| Cash and cash equivalents | 8,131 | 7,621 | 2,273 | ||
|
|
|
|
| ||
Cluff gold plc
notes to the interim financial information
For the six months ended 30 June 2010
1. Basis of preparation
The interim financial information has been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and implemented in the UK and in accordance with the AIM Rules. The accounting policies, methods of computation and presentation used in the preparation of the interim financial information are the same as those used in the Group's audited financial statements for the year ended 31 December 2009, which this interim consolidated financial information should be read in conjunction with.
The financial information in this statement does not constitute full statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information for the six months ended 30 June 2010 and 30 June 2009 is unaudited, but has been reviewed by the auditors. The financial information for the year ended 31 December 2009 has been derived from the Group's audited financial statements for the period as filed with the Registrar of Companies. It does not constitute the financial statements for that period. The auditors' report on the statutory financial statements for the year ended 31 December 2009 was unqualified and did not contain any statement under sections 498(2) or (3) of the Companies Act 2006.
After review of the Group's operations, financial position and forecasts, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the unaudited interim financial information.
During the period the Group has applied the revised requirements of IAS 27 in respect of the measurement of non-controlling interests. This has not been applied retrospectively to prior periods.
2. Intangible fixed assets
| Deferred exploration costs | Exploration and mining rights | Total | |
| US$'000 | US$'000 | US$'000 | |
|
|
|
| |
| Cost |
|
|
|
| At 1 January 2009 | 12,848 | 30,223 | 43,071 |
| Additions | 1,674 | - | 1,674 |
| Exploration costs written-off | (43) | - | (43) |
| Exchange difference on retranslation | 1,852 | - | 1,852 |
|
|
|
|
|
| At 30 June 2009 | 16,331 | 30,223 | 46,554 |
| Additions | 1,314 | - | 1,314 |
| Exploration costs written-off | (578) | - | (578) |
| Exchange difference on retranslation | (413) | - | (413) |
|
|
|
|
|
| At 31 December 2009 | 16,654 | 30,223 | 46,877 |
| Additions | 3,089 | - | 3,089 |
| Exchange difference on retranslation | (1,243) | - | (1,243) |
|
|
|
|
|
| At 30 June 2010 | 18,500 | 30,223 | 48,723 |
|
|
|
|
|
| Depreciation |
|
|
|
| At 1 January 2009 | - | - | - |
| Impairment charge | - | 1,148 | 1,148 |
|
|
|
|
|
| At 30 June 2009 | - | 1,148 | 1,148 |
| Charge for the period | - | 1,034 | 1,034 |
|
|
|
|
|
| At 31 December 2009 | - | 2,182 | 2,182 |
| Charge for the period | - | 1,047 | 1,047 |
|
|
|
|
|
| At 30 June 2010 | - | 3,229 | 3,229 |
|
|
|
| |
| Net book value |
|
|
|
| At 30 June 2010 | 18,500 | 26,994 | 45,494 |
|
|
|
| |
|
|
|
| |
| At 31 December 2009 | 16,654 | 28,041 | 44,695 |
|
|
|
| |
|
|
|
| |
| At 30 June 2009 | 16,331 | 29,075 | 45,406 |
|
|
|
|
Included within Exploration and mining rights is an amount of US$21.8 million in relation to the Baomahun Gold Project. This amount is recoverable through the exploitation of the project.
In addition, the Group holds two mining licences relating to the Kalsaka and Angovia Gold Mines. The value assigned to these licences amount to US$6 million and US$2.4 million respectively.
3. Property, plant and equipment
| Mine development and associated property, plant and equipment | Motor vehicles, office equipment and fixtures | Total | |
| US$'000 | US$'000 | US$'000 | |
|
|
|
| |
| Cost |
|
|
|
| At 1 January 2009 | 77,373 | 2,062 | 79,435 |
| Additions, net of results from commissioning phase | (3,807) | 25 | (3,782) |
| Transfer to inventories | (7,025) | - | (7,025) |
| Transfer to trade and other receivables | (1,106) | - | (1,106) |
| Disposals | - | (9) | (9) |
| Exchange difference on retranslation | (1,365) | 40 | (1,325) |
|
|
|
|
|
| At 30 June 2009 | 64,070 | 2,118 | 66,188 |
| Additions, net of results from commissioning phase | 5,328 | 814 | 6,142 |
| Transfer to inventories | (4,596) | - | (4,596) |
| Transfer to trade and other receivables | (83) | - | (83) |
| Transfer between categories | (1,047) | 1,047 | - |
| Exchange difference on retranslation | 1,375 | 20 | 1,395 |
|
|
|
|
|
| At 31 December 2009 | 65,047 | 3,999 | 69,046 |
| Additions | 3,175 | 401 | 3,576 |
| Exchange difference on retranslation | (29) | (114) | (143) |
|
|
|
|
|
| At 30 June 2010 | 68,193 | 4,286 | 72,479 |
|
|
|
|
|
| Depreciation |
|
|
|
| At 1 January 2009 | - | 1,183 | 1,183 |
| Charge for the period | - | 317 | 317 |
| Impairment charge | 20,766 | - | 20,766 |
| Exchange difference on retranslation | - | (392) | (392) |
|
|
|
|
|
| At 30 June 2009 | 20,766 | 1,108 | 21,874 |
| Charge for the period | 6,809 | 444 | 7,253 |
| Exchange difference on retranslation | - | 434 | 434 |
|
|
|
|
|
| At 31 December 2009 | 27,575 | 1,986 | 29,561 |
| Charge for the period | 7,311 | 452 | 7,763 |
| Exchange difference on retranslation | (4) | (105) | (109) |
|
|
|
|
|
| At 30 June 2010 | 34,882 | 2,333 | 37,215 |
|
|
|
| |
| Net book value |
|
|
|
| At 30 June 2010 | 33,311 | 1,953 | 35,264 |
|
|
|
| |
|
|
|
| |
| At 31 December 2009 | 37,472 | 2,013 | 39,485 |
|
|
|
| |
|
|
|
| |
| At 30 June 2009 | 43,304 | 1,010 | 44,314 |
|
|
|
|
4. Share capital
| As at30 June 2010 | As at30 June 2009 | As at 31 December 2009 | |
| US$'000 | US$'000 | US$'000 | |
|
|
|
| |
| Authorised: |
|
|
|
| 200,000,000 Ordinary shares of 1p each | 3,631 | 3,647 | 3,633 |
| _ |
| _ | |
|
|
|
| |
|
|
|
| |
| No. | No. | No. | |
| Issued and Fully Paid: |
|
|
|
| Ordinary shares of 1p each | 122,765,595 | 117,136,331 | 122,465,595 |
| _ | __ | _ | |
|
|
|
| |
| US$'000 | US$'000 | US$'000 | |
| Issued and Fully Paid: |
|
|
|
| Ordinary shares of 1p each | 2,229 | 2,136 | 2,224 |
| _ | _ | _ |
Shares issued
On 31 March 2010 the Company issued 300,000 new ordinary shares of 1p at the option price of 20p each to E Carr, a former director, which represents the exercise of options granted on 4 March 2004.
5. Earnings/(loss) per share
The calculation of basic and diluted earnings/(loss) per ordinary share is based on the following data:
|
| 6 months ended 30 june 2010 | 6 months ended 30 june 2009 | 12 months ended 31 December 2009 |
|
| Shares | Shares | Shares |
| Weighted average number of ordinary shares in issue for the period |
|
|
|
| - Number of shares with voting rights | 122,615,595 | 108,041,919 | 113,280,292 |
| - Effect of share options in issue | 1,402,404 | NOTE 1 | NOTE 1 |
|
|
|
|
|
| - Total used in calculation of diluted earnings per share | 124,017,999 | 108,041,919 | 113,280,292 |
|
|
|
|
|
|
|
|
|
|
|
| US$'000 | US$'000 | US$'000 |
| Profit/(loss) for the period attributable to owners of the parent | 3,875 | (29,513) | (34,267) |
|
|
|
|
|
| Earnings/(loss) per share |
|
|
|
| - Basic (cents per share) | 3.16 | (27.35) | (30.25) |
| - Diluted (cents per share) | 3.12 | (27.35) | (30.25) |
|
|
|
|
|
1. At 30 June 2009 and 31 December 2009 the Company recorded a consolidated loss. Accordingly, share options at that time were not dilutive and the diluted loss per share is the same as the basic loss per share.
6. Segmental reporting
An analysis of the consolidated income statement by operating segment, presented on the same basis as that set out in the 2009 annual report, is set out below:
|
| Kalsaka | Angovia | Baomahun | All other segments | Total |
|
| US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
| Six months ended 30 June 2010 |
|
|
|
|
|
| External revenue | 47,347 | 13,612 | - | - | 60,959 |
| Direct costs of production | (25,195) | (8,531) | - | - | (33,726) |
| Other operating and administrative costs | (3,610) | (2,559) | - | (2,687) | (8,856) |
|
|
|
|
|
|
|
| Segmental result | 18,542 | 2,522 | - | (2,687) | 18,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Year ended 31 December 2009 |
|
|
|
|
|
| External revenue | 54,107 | 22,823 | - | - | 76,930 |
| Direct costs of production | (38,155) | (21,006) | - | - | (59,161) |
| Other operating and administrative costs | (5,162) | (3,752) | - | (4,594) | (13,508) |
|
|
|
|
|
|
|
| Segmental result | 10,790 | (1,935) | - | (4,594) | 4,261 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six months ended 30 June 2009 |
|
|
|
|
|
| External revenue | 24,457 | 6,609 | - | - | 31,066 |
| Direct costs of production | (14,634) | (11,544) | - | - | (26,178) |
| Other operating and administrative costs | (1,909) | (1,806) | - | (2,711) | (6,426) |
|
|
|
|
|
|
|
| Segmental result | 7,914 | (6,741) | - | (2,711) | (1,538) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of segmental revenue to that reported in the interim financial statements is as follows:
|
| 6 months ended 30 june 2010 | 12 months ended 31 December 2009 | 6 months ended 30 june 2009 |
|
| US$'000 | US$'000 | US$'000 |
|
|
|
|
|
| Revenue for reportable segments | 60,959 | 76,930 | 31,066 |
| Revenue capitalised during commissioning phase of mining operations | - | (37,271) | (31,066) |
|
|
|
|
|
| Revenue for interim financial statements | 60,959 | 39,659 | - |
|
|
|
|
|
A reconciliation of segmental EBITDA to the profit/(loss) before tax reported in the interim financial statements is as follows:
|
| 6 months ended 30 june 2010 | 12 months ended 31 December 2009 | 6 months ended 30 june 2009 |
|
| US$'000 | US$'000 | US$'000 |
|
|
|
|
|
| EBITDA for reportable segments | 18,377 | 4,261 | (1,538) |
| Depreciation and amortisation | (8,622) | (7,385) | (225) |
| Impairment of non-current assets | - | (21,914) | (21,914) |
| Share based payments | (369) | (742) | (955) |
| Net interest payable | (784) | (1,080) | (207) |
| Profit/(loss) on disposal of fixed assets | - | 7 | (27) |
| EBITDA capitalised during commissioning phase of mining operations | - | (5,583) | (4,900) |
| Change in accrued profit for gold bullion stock at year-end | 17 | (1,047) | 11 |
| Exploration costs written-off | - | (621) | (43) |
| Exchange rate variance | (263) | (1,391) | 285 |
|
|
|
|
|
| Profit before taxation | 8,356 | (35,495) | (29,513) |
|
|
|
|
|
7. Credit risk
The Group is exposed to credit risk in respect of indirect taxes owing to the Group in West Africa, including indirect taxes recoverable of US$5,205,000 (31 December 2009: US$7,311,000; 30 June 2009 US$3,529,000) in Burkina Faso and US$4,434,000 (31 December 2009: US$3,917,000; 30 June 2009 US$2,066,000) in Cote d'Ivoire. Due to the slow moving nature of these amounts the directors have included an impairment provision against the taxation debtor in accordance with their best estimate of the recovery of these amounts totalling US$397,000 (31 December 2009: US$397,000; 30 June 2009 US$397,000) in Burkina Faso and US$1,874,000 (31 December 2009: US$1,874,000; 30 June 2009 US$820,000) in Cote d'Ivoire.
No amounts have yet been recovered in Cote d'Ivoire, and following specialist advice in the country the directors have classified the full amount recoverable in Cote d'Ivoire as due after more than one year.
8. Bank facilities
In June 2010, the US$10 million working capital facility previously arranged with RMB Australia Holdings Ltd was replaced by a US$6 million working capital facility repayable on 30 June 2011.