Goldstone Resources Regulatory News (GRL)

29 Nov 2007 16:47

Goldstone Resources Ltd29 November 2007 GOLDSTONE RESOURCES LIMITED CORRECTION TO INTERIM RESULTS GoldStone Resources Limited advises that the following replaces the "InterimResults" announcement released today at 12.02 under RNS number 7826I. Thefigure for other expenses on the Income Statement for the period ended 31 August2007 was incorrectly stated as US$323,993 and should have read US$348,993.There are no other changes to the interim financial information. The fullamended text appears below. INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2007 Chief Executive's Report I am setting out below a review of the activities during the six months ended 31August 2007 for GoldStone Resources Limited ("GoldStone" or the "Company"),which incorporates an update on the current status of the Company's projects. SWARTDORING DIAMOND PROJECT In April 2007 GoldStone conditionally agreed to acquire a 70% interest in XanaduMining (Pty) Ltd ("Xanadu") from GeoQuest Holdings Limited ("GeoQuest") (the "Acquisition"). The interest comprises 70% of both the share capital of Xanaduand inter-company loans owed by Xanadu to GeoQuest. Xanadu, through its wholly owned subsidiaries, GrindStone Mining (Pty) Ltd andMultidirect Mining (Pty) Ltd, holds prospecting rights over the SwartdoringDiamond Project. Completion of the Acquisition is conditional on: • The successful listing of GoldStone on the Alternative Exchange of the JSE Securities Exchange; and • The approval of the Acquisition by the South African Reserve Bank ("SARB"). The Company has received provisional approval from the Listings Committee of theJSE Securities Exchange to list on the Alternative Exchange. In addition theSARB has approved the acquisition of 70% of the share capital of Xanadu byGoldStone. Approval by the SARB of the acquisition of the inter-company loansis still pending. Completion of the Acquisition will not take place until full satisfaction ofeach of the outstanding conditions. GoldStone and GeoQuest agreed to extend thelong stop date for completion of the Acquisition to 28 February 2008. The Swartdoring Diamond Deposit is a preserved diamondiferous palaeochannel ofthe Swartdoring River in the Northern and Western Cape Provinces of SouthAfrica. An inferred resource of 12 million tonnes of diamond bearing gravellies beneath loose to slightly cemented sandy overburden and there is apossibility to extend this resource to approximately 49 million tonnes ofdiamond bearing gravel. Following completion of the Acquisition, exploration atan investment cost of approximately US$500,000 will be conducted in order tocomplete a Mining Feasibility Study on the inferred resource of the project. BAUXITE In September 2005, GoldStone entered into an option agreement with BHP Billitonover the bauxite interests in Guyana. An initial programme was launched toexplore the bauxite potential in the leased areas. The programme confirmed thedeposits previously identified by GoldStone. Further more detailed sampling was undertaken during the first quarter of 2007and the Company has since received all the results from this completedprogramme. BHP Billiton elected during July 2007 not to exercise its option andsubsequently made available to GoldStone all information in its possessionrelating to the exploration programme, as well as a summarising geologicalreport. During the third quarter of 2007 GoldStone secured an extension of the expirydate of the bauxite Reconnaissance Permission from 5 September 2007 to 4 January2008. A request by Goldstone for a further extension of the expiry date from 4January 2008 to 4 April 2008 is currently under consideration by the Minister ofMines in Guyana. The Company has entered into discussions with other majorplayers in the bauxite industry and the bauxite project is accordingly beingevaluated and considered. FINANCING The Company's cash resources are currently US$2.5 million. APPROVAL Dr Lawrie Minter, who holds a PhD in Palaeoplacer Sedimentology, has reviewedand approved the content of this announcement. SUMMARY The Board looks forward to the completion of the acquisition of the SwartdoringDiamond Project which has the potential to provide near term production to theCompany. The listing of GoldStone on the Alternative Exchange is taking longer thanplanned due to the outstanding SARB approval. This process is well advanced andthe Board anticipates that the listing and completion of the Acquisition willtake place in early 2008. In addition and on an ongoing basis the Board is actively investigating andreviewing other potential exploration projects which may fall within the ambitof sediment hosted minerals. Enquiries: GoldStone Resources Limited 00 27 21 794 4004Nico van der Hoven (Chief Executive Officer) Hanson Westhouse Limited 0113 246 2610Tim Feather INCOME STATEMENT 6 Months ended 6 Months ended 12 Months ended 31 August 2007 31 August 2006 28 February 2007 US$ US$ US$ Management fee Income-Continuing Operations (25,000) (39,722) (139,722)Depreciation 7,102 40,726 50,233Employee benefits 8,202 11,767 23,534Foreign exchange (gains)/losses (31,533) (106,468) (147,519)Other Expenses 348,993 312,204 564,609Gross Loss 307,764 218,507 351,135 Interest receivable-Continuing Operations (76,061) (70,155) (141,583) OPERATING LOSS FOR THE PERIOD-Continuing Operations 231,703 148,352 209,552OPERATING LOSS FOR THE PERIOD-Discontinued Operations - 541,526 468,697 Loss before tax 231,703 689,878 678,249Income tax for period - - - Loss for period 231,703 689,878 678,249 Loss per ordinary shareBasic from continuing operations (cents per share) (0.2) (0.1) (0.2)Basic from discontinued operations (cents per share) - (0.4) (0.3) BALANCE SHEET 6 Months ended 6 Months ended 12 Months ended 31 August 2007 31 August 2006 28 February 2007 US$ US$ US$FIXED ASSETSTangible assets 23,674 95,099 30,490 CURRENT ASSETSDebtors and prepayments 58,579 43,690 48,540Cash at bank 2,859,835 2,988,989 3,103,109 2,918,414 3,032,679 3,151,649 CREDITORS:amounts falling due within one yearCreditors and accruals (70,330) (35,947) (78,679) (70,330) (35,947) (78,679) Net current assets 2,848,084 2,996,732 3,072,970 TOTAL ASSETS 2,871,758 3,091,831 3,103,460 CAPITAL AND RESERVESShare capital 2,354,482 2,354,482 2,354,482 Share premium 13,849,554 13,849,554 13,849,554 Capital contribution reserve 555,110 555,110 555,110 Profit and loss - (deficit) (13,887,388) (13,667,315) (13,655,686) 2,871,758 3,091,831 3,103,460 CASH FLOW STATEMENT 6 Months ended 6 Months ended 12 Months ended 31 August 2007 31 August 2006 28 February 2007 US$ US$ US$Cash flows from operating activitiesCash used in operations (319,047) (402,317) (705,657)Interest income 76,061 70,155 141,583 Net cash from operating activities (242,986) (332,162) (564,074) Cash flows from investing activitiesPurchase of Fixed Assets (288) - (3,968)Sale of Fixed Assets - - 350,000 Net cash from investing activities (288) - 346,032 Total cash movement for the year (243,274) (332,162) (218,042)Cash at the beginning of the year 3,103,109 3,321,151 3,321,151 Total cash at the end of the year 2,859,835 2,988,989 3,103,109 Cash used in operations(Loss) before taxation (231,703) (689,878) (678,249)Adjustments for:Depreciation 7,105 40,726 50,233Interest Received (76,061) (70,155) (141,583)Profit on sale of fixed assets - - (290,929)Changes in working capital:Increase/Decrease in Debtors (10,039) 350,874 346,023Decrease in Creditors (8,349) (33,884) 8,848 (319,047) (402,317) (705,657) NOTES 1 Earnings per share Basic earnings per share is calculated by dividing the losses attributable to ordinary shareholders by the weighted average number of ordinary shares in issue after the placing on the AIM. Diluted earnings per share is calculated using the weighted average number of ordinary shares in issue as adjusted to assume conversion of all dilutive potential ordinary shares. FRS 14: Earnings Per Share ('EPS'), requires presentation of diluted EPS when a company could be called upon to issue share that would decrease net profit or increase net loss per share. For a loss making company with outstanding warrants, net loss per share would only be increased by the exercise of warrants of out-of-the-money warrants. Since it seems inappropriate to assume that option holders would act irrationally, no adjustment has been made to diluted EPS for out-of-the-money warrants. The warrants expired on 30 September 2006. 6 Months ended 6 Months ended 12 Months ended 31 August 2007 31 August 2006 28 February 2007 US$ US$ US$ Earnings per share Loss attributable to shareholders- continuing (231,703.00) (107,605.00) (209,552.00) operations Loss attributable to shareholders- - (582,273.00) (468,697.00) discontinuing operations No. No. No. Weighted average number of ordinary shares 130,816,633 130,816,633 130,816,633 Basic loss per share (cents)- continuing (0.2) (0.1) (0.2) operations Basic loss per share (cents)- discontinuing - (0.4) (0.3) operations 2 ACCOUNTING POLICIES (a) Statement of compliance and basis of preparation GoldStone is required, in accordance with the AIM Rules, to prepare its financial results for the year ending 28 February 2008 in compliance with International Financial Reporting Standards ("IFRS") as adopted by the EU. The Company's date of transition for this purpose is 1 March 2007. The interim financial information has been prepared under the historical cost convention in accordance with the recognition and measurement principles contained within IFRS as endorsed by the EU. The accounting policies set out below have been applied consistently to the interim financial information. IFRS 1 EXEMPTION The Company has elected to apply the following IFRS 1 exemption and transitional provision: • Fair value or revaluation as deemed cost The Company has not taken advantage of the transitional provision permitting the revaluation of Property, Plant and Equipment and treatment of this fair value as the deemed cost going forward. (b) Tangible fixed assets Tangible assets are held at historical cost net of depreciation and any provision for impairment. Depreciation is calculated to write down the cost to the estimated residual value over the expected useful life. The rates generally applicable are: Office equipment 25.0% Field, Geological equipment 25.0% Computer equipment 33.3% Gold samples are stated at cost and are not depreciated. Material residual value estimates are updated as required, but at least annually, whether or not the asset has been revalued. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. (c) Impairment Whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable an asset is reviewed for impairment. An asset's carrying value is written down to its estimated recoverable amount if that amount is less than the asset's carrying amount. The recoverable amount is the higher value of fair value less costs to sell and value in use. Impairment reviews are carried out on a project by project basis, with each project representing a potential single cash generating unit. (d) Taxation Current income tax assets and liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting period, that are unpaid at the balance sheet date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate, based on the taxable profit for the period. Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the relevant transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries is not provided if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future. In addition tax losses available to be carried forward as well as other income tax credits to the Company are assessed for recognition as deferred tax assets. Deferred tax liabilities are provided for in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date. Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited to equity. The Company has been granted "Exempt Company" status under article 123A of the Income Tax (Jersey) Law 1961. This status is renewable annually. The Company plans to maintain this status for as long as it is available pending the introduction of the general zero rate of corporation tax which is expected to be introduced in 2009. In order to hold exempt status an annual fee of £600 is payable. The fee is included as an expense in the profit and loss account as it is not dependent on the Company's results. The Company is also registered for income tax purposes with the South African Revenue Service ('SARS'). Due to the loss making position of the Company, there is no South African corporate tax charge this year (2006:$nil). The directors believe that the accumulated loss of US$13,887,388 described above might reasonably be assessed by the relevant tax authority (Guyanese or South African) as a tax loss in future and may be available to be offset against possible future capital or income gains of the Company or from other sources of income or capital that may originate outside of the Republic of South Africa. No deferred tax asset has been recognised this year due to the uncertainty of future profits (2006: $nil). (e) Exploration costs Exploration costs incurred include appropriate technical and administrative overheads. Exploration costs are expensed until the commercial viability of a project has been proven. (f) Share-based payments Share based payments are dealt with in accordance with the requirements of IFRS. The Company made no share based payments or other equity - settled transactions during the period. (g) Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets include cash and cash equivalents, other receivables, equity instruments of another enterprise and are recognised in the balance sheet at fair value. Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less from acquisition. Other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition these assets are measured at amortised cost using the effective interest method less provision for impairment. Any change in their value is recognised in the income statement. Prepayments are distinguished form other receivables in that a prepayments balance will not result in the receipt of cash. Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities categorised at fair value through income statement are recorded initially at fair value, all transaction costs are recognised immediately in the income statement. All other financial liabilities are recorded initially at fair value, net of direct issue costs. Trade and other payables are financial liabilities which are expected to be settled within 12 months of balance sheet date. Recognition occurs when a Company becomes a party to the contractual provisions of the instrument. Most obligations are legally enforceable and arise under contractual arrangements. These include amounts owed for assets purchased or services obtained (trade creditors), and obligations to provide goods and services where an external party has paid in advance. Accrued expenses are liabilities to pay for goods or services that have been received or supplied but have not been paid, invoiced or formally agreed with the supplier. The recognition of accrued expenses results directly from the recognition of expenses for items of goods and services consumed during the period. The initial measurement of trade and other payables is usually at fair value. Interest receivable and payable is accrued and credited/charged to the income statement in the period to which it relates. Financial assets that the Company has the positive intention and ability to hold to maturity are classified as held to maturity assets. The Company has not entered into any derivative financial instruments for hedging or any other purpose. (h) Available for sale financial assets Available for sale financial assets include non-derivative financial assets that are either designed as such or do not qualify for inclusion in any of the other categories of financial assets that are either designated as such or do not qualify for inclusion in any of the other categories of financial assets. All financial assets within this category are measured subsequently at fair value, with changes in value recognised in equity, through the statement of changes in equity/statement of recognised income and expenditure. Gains and losses arising from investments classified as available for sale are recognised in the income statement when they are sold or when the investment is impaired. In the case of impairment of available for sale assets, any loss previously recognised in equity is transferred to the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement. Impairment losses recognised previously on debt securities are reversed through the income statement when the increase can be related objectively to an event occurring after the impairment loss was recognised in the income statement. The Company had nil available for sale financial assets during the year ended 28 February 2007. (i) Pensions and employee benefits The cost of short term employee benefits (those payable within 12 months after the service is rendered, such as paid vacation and sick leave, bonuses and non monetary benefits such as medical care ) are recognised in the period in which the service is rendered and are not discounted. The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement, in the case of non-accumulating absences, when the absence occurs. The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or contractual obligation to make such payments as a result of past performance During the period under review the Group did not operate or contribute to any pension schemes. (j) Income and expense recognition The Company's income comprises interest receivable from bank deposits and management fees. Operating expenses are recognised in the income statement upon utilisation of the service or at the date of their origin. Interest received is recognised upon receipt and any outstanding interest is accrued at the end of the period. All other income and expenses are reported on an accrual basis. (k) Foreign currency translation The financial information is prepared using United States Dollars as the functional currency. Transactions denominated in other currencies are translated into Dollars at the rate actually incurred when making the transaction Monetary assets and liabilities denominated in other currencies at the balance sheet date are translated at the exchange rate ruling at that date. These translation differences are dealt with in the profit and loss account. Other assets and liabilities have been translated into Dollars at the closing rate at the balance sheet date. Where expenses denominated in other currencies were not recorded as incurred, translation takes place at an average rate for the period. (l) Equity and share capital An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all its liabilities. Equity comprises the following: i) "Share capital" is the nominal value of equity shares translated into Dollars at date of issue. ii) "Share premium account" represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue translated into Dollars at date of issue. iii) "Retained losses" represents retained losses transferred from the profit and loss account. If the Company re-acquires its own equity instruments, those treasury shares are deducted from equity. No gain or loss is recognised in profit or loss account on the purchase, sale, issue or cancellation of the Company's own equity instruments. Consideration paid or received is recognised directly in equity. (m) Operating lease agreements Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight-line basis over the period of the lease. The Company did not operate any assets under lease or rental agreements during the period. (n) Cash and cash equivalents Cash and cash equivalents in the balance sheet comprise cash on hand and demand deposits together with other short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. (o) Goodwill Goodwill which represents the excess of the cost of acquisition over the fair value of the Company's share of the identifiable net assets acquired is capitalised and reviewed annually for impairment. Goodwill is carried at cost less accumulated impairment losses. Negative goodwill is recognised immediately after acquisition in the income statement. Goodwill written-off to reserves prior to the date transition to IFRS remains in reserves. There is no re-instatement of goodwill that was amortised prior to transition to IFRS. Goodwill previously written-off to reserves is not written back to the income statement on subsequent disposal. (p) Standards and interpretations not yet applied The directors together with their advisers are in the process of evaluating the impact of standards and/or interpretations that have not yet become effective. Listed below are those standards and/or interpretations most likely to impact the Company. i) IFRIC 11 (IFRS 2) Group and Treasury Share Transactions - mandatory for year 2008; and ii) IFRS 8 Operating segments - mandatory for year 2009. Based on the Company's current business model and accounting policies it is felt that these standards and/or interpretations are not likely to have a material impact on the Company's earnings or shareholders funds. (q) Critical accounting estimates and judgements The Company makes estimates and assumptions concerning the future. The resulting estimates will by definition seldom equal the actual results. These estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. These judgements and estimates are based on management's best knowledge of the relevant facts and circumstances, having regard to prior experience. The board of directors has considered the critical accounting estimates and assumptions used in the historical financial information and concluded that areas of judgement that have the most significant effect on the amounts recognised in the financial statements concern: the decision not to recognise deferred tax and the estimation of share options' "non-fair value",value. The Company has no contractual obligations for restoration from exploration work carried out in the period. This information is provided by RNS The company news service from the London Stock Exchange