RNS Number:4312I
St. Barbara Mines Limited
07 March 2003
ASX SHAREHOLDERS REPORT
Interim Financial Result 2002/03 and Outlook
For a printable pdf version of this report, please go to our website at http://
www.stbarbara.com.au/UPLOADED/SBM000379.pdf
FINANCE
* Post period end $9.8 million of new capital raised
* Net loss after tax $22.0 million includes:
- change in accounting policy of $8.5 million
- non-cash charges of $15.6 million (including accelerated
write-down of underground operations - $7.5 million)
* Gold sales 59,865 ounces, up 24 percent
* Realised gold price $577 per ounce, up $58 per ounce
- Net cash cost of production $460 per ounce
OUTLOOK
Production
- Gibraltar underground production ceased February 2003
- Paddys Flat initial production from heavily weathered low grade
stockpiles commenced mid-February 2003. Development plans for Paddys Flat high
grade Vivians, Consols and Prohibition orebodies progressing
Hedge Position
- nil at the date of this report
- no foreign currency contracts
Exploration
- Reedys tenements farmed-out (minimum first year expenditure $1.0 million)
to Gold Fields
Defiance Merger Proposal
- Despatch of Explanatory Statement to shareholders late March 2003
- Shareholder meetings late April 2003
The Company recorded a consolidated net loss of $22.0 million, with higher gold
sales offset by accelerated mine development writedown of underground operations
and a change in accounting policy.
Financial Performance
Gold revenue from operations at $34.6 million was $9.6 million higher than the
corresponding six month period, a result of higher gold sales (59,865 ounces, up
24 percent) and higher realised prices ($577 per ounce, up $58 per ounce). The
higher realised price reflected improved hedge prices, minor spot sales and
closed-out positions.
The average realised price exceeded the average weighted spot price for the six
months of $575 per ounce.
Outstanding hedging at the year end was 10,254 ounces at a net realisable $588
per ounce (nil position at the date of this report).
The net operating cost of production (equivalent to the Gold Institute total
cash cost) at $617 per ounce reflected, in particular, difficulties with both
underground mines. Great Northern Highway ceased operating one month earlier
than forecast, necessitating a $2.6 million write-down. Gibraltar suffered a
significant disruption (25 days) and a change in mining method, sterilising
reserve ounces and necessitating accelerated amortisation of mine development
costs.
Other revenue, in the corresponding six month period, was dominated by the sale
of the shareholding in Goldfields Limited for $26.7 million, and a net profit of
$9.2 million.
A loss before interest, tax, depreciation and amortisation of $1.5 million was
determined after state royalties ($0.8 million), exploration costs ($1.9
million) and an accounting change ahead of the proposed Defiance merger ($8.5
million). The accounting change relates to previously capitalised exploration
and development expenditure.
Higher interest charges reflected an increased drawdown on the RCF loan and an
extension fee.
Simplified Statement of Financial Performance
($'000)
for the year ended 31 December 2002 2001
Gold revenue from operations.... 34,570 25,014
Other revenue ............................. 760 28,747
Earnings before interest, tax, depreciation and 7,047 12,078
amortisation and change in accounting policy..
Change in accounting policy...... (8,532) -
Earnings before interest, tax, depreciation and (1,485) 12,078
amortisation.....
Depreciation................................. (971) (1,156)
Amortisation of mine (14,630) (8,854)
development................................
Earning/(loss) before interest and (17,086) 2,068
tax.................................................
Interest (expense)/income........... (2,242) (1,374)
Income tax expense...................... (2,965) -
Outside equity interests............... (252) (77)
Net profit/(loss)............................ (22,041) 771
Prepared in accordance with Australian Generally Accepted Accounting
Principles.
Segmental Analysis
($'000)
for the year ended 31 December 2002 2001
Results from Operations....................... 6,309 1,670
Amortisation and depreciation............. (15,601) (10,010)
Profit on sale of shares and property, plant 738 10,408
and equipment..............................
Change in accounting policy (8,532) -
Earnings/loss before interest and tax (17,086) 2,068
Amortisation and depreciation includes:
-Gibraltar (7,515) (298)
..............................................
-Great Northern Highway ................... (2,557) (43)
Cash Flow Statement
Available cash (net of security bonds) decreased through the six month period to
$0.3 million.
Capital allocations included on-going Great Northern Highway and Gibraltar
underground mine development ($3.9 million) and Mulla Mulla and regional
exploration ($1.9 million).
Additional security bonds ($1.5 million) previously secured by guarantee were
cash backed during the period.
Loan and finance repayments, principally the Taipan convertible note ($7.3
million) was financed from cash and a further drawdown of the RCF loan.
Financial Position
Total shareholders' equity decreased by $14.9 million, reflecting the change in
accounting policy and accelerated amortisation of underground mine development.
Working capital at the end of December was negative $3.2 million.
Interest bearing debt at $18.1 million was down $4.2 million. This comprises
the RCF loan, fully drawn to an amended $12.0 million (previously $20.0 million)
and lease commitments. RCF interest and extension fees were satisfied by the
issue of shares and options.
Current assets include the 12.3 percent investment in Dioro Exploration NL (the
49 percent owner of the Frogs Leg high grade gold project) at cost of $4.9
million.
Simplified Cash Flow Statement
($'000)
for the year ended 31 December 2002 2001
Operating Activities
Cash receipts....................................... 38,843 26,678
Payments - suppliers/employees....... (41,451) (21,159)
Other (net)........................................... (544) (958)
Net cash flow...................................... (3,152) 4,561
Investing Activities
Payments - exploration/evaluation/development. (4,371) (22,239)
Payments - listed investments............ (365) -
Payments - increased security bond.. (1,500) -
Investment sold................................... - 26,724
Payments -property/plant/equipment (46) (401)
(net).....................................................
Net cash flow...................................... (6,282) 4,084
Financing Activities
Loan and finance repayments............. (8,699) (13,342)
Proceeds from borrowings................ 4,000 3,538
Issue of securities................................ 5,361 -
Share buy-back.................................... - (1,066)
Net cash flow...................................... 662 (10,870)
Cash - beginning of period................. 9,032 4,755
Net change in cash.............................. (8,772) (2,225)
Cash - end of period........................... 260 2,530
Simplified Statement of Financial Position
($'000)
As at 31 December 30 June
2002 2002
Assets
Current.................................................... 19,390 24,384
Non-current............................................ 57,425 77,654
Total....................................................... 76,815 102,038
Liabilities
Current.................................................... 22,630 29,868
Non-current............................................ 9,062 12,062
Total....................................................... 31,692 41,930
Net assets.............................................. 45,123 60,108
Share capital & reserves........................ 125,951 118,643
Accumulated losses............................... (80,828) (58,787)
Outside equity interests......................... - 252
Total shareholders' equity..................... 45,123 60,108
OUTLOOK
Financial Position
The financial position of the Company was strengthened early in the second half
of the year with a placement of shares to fund the first Paddys Flat acquisition
instalment ($1.4 million) and an agreement to raise $8.4 million (convertible
note $2.8 million and convertible loan $5.6 million) to fund the remaining
instalments (a total of $3.0 million).
The total acquisition cost is expected to be recovered from the processing of
low grade stockpiles over an eighteen month period.
Meekatharra Production
Production for the second half of the 2002/03 financial year will comprise
remaining stope ore from Gibraltar with milling of ore completed by the end of
March 2003.
Milling of highly oxidised Paddys Flat low grade stockpiles commenced
mid-February 2003.
Whilst plans for the exploitation of the high grade Vivians, Consols and
Prohibition orebodies are well advanced, development ore would not be available
until next financial year.
Defiance Merger Proposal
A proposal to merge St Barbara with Midas Gold plc (London) and Geomaque
Explorations Limited (Toronto) was announced on 9 January 2003. The proposal to
form Defiance Mining Corporation, subject to shareholder approval late April
2003, will create a company with two 100% owned operating mines and two
development projects at Paulsens and Tasiast (Mauritania).
Shareholders will receive explanatory statements late March 2002 and are urged
to discuss the proposal with their financial advisors and company executives.
Shareholders from each company have at this stage indicated overwhelming support
for the merger proposal.
CORPORATE INFORMATION
Board of Directors/Executive Management Issued Capital Shareholder Enquiries
S. W. Miller Executive Chairman As at the date of this report, Matters related to shares held,
K. A. Dundo Non-Executive Director issued capital is 385,552,803 change of address and tax file
G. B. Speechly Non-Executive Director shares. numbers should be directed to:
H. G. Tuten Non-Executive Director There were 44,329,772 listed Australia:
J. T. McClements Alternate to H. Tuten options, exercisable at 30 cents Advanced Share Registry Services
A. D. Rule Chief Financial Officer up until 29 February 2004 and Level 7, 200 Adelaide Terrace
and Company Secretary 46,130,634 unlisted options Perth WA 6000
Registered Office exercisable at various prices Telephone: .+61 8 9221 7288
Level 2, 16 Ord Street between 11 cents and 45 cents up Facsimile: +61 8 9221 7869
West Perth WA 6005 to 8 January 2007. United Kingdom:
Telephone: +61 8 9476 5555 Computershare Investor Services
Facsimile: +61 8 9476 5500 PLC
Email: perth@stbarbara.com.au Major Shareholders PO Box 435, Owen House
Website: www.stbarbara.com.au National Nominees 11.96% 8 Bankhead Crossway North
Strata Mining Corporation Edinburgh EH11 4BR
Stock Exchange Listings Ltd 8.35% Telephone: +44 870 703 6088
Australian Stock Exchange ANZ Nominees 5.86% Facsimile: +44 870 703 6142
AIM Board of London Stock Exchange Resource Capital Fund 4.71% ADR Depositary
Ticker Symbol: SBM Citicorp Nominees Pty The Bank of New York
Ltd 4.43% 101 Barclay Street
New York NY10286 USA
Substantial Shareholders Telephone: +1 212 815 2218
Strata Mining Corporation
Ltd 9.39%
Enquiries regarding this report may be directed to:
Stephen W. Miller Executive Chairman
Telephone (08) 9476 5555
Overseas +61 8 9476 5555
or
Colin G. Jackson
Investor Relations
Telephone 0417 929 107
St Barbara Mines Limited
Level 2, 16 Ord Street
West Perth
Western Australia 6005
Telephone (08) 9476 5555
Overseas +61 8 9476 5555
Dollar values in this report are Australian Dollars unless otherwise stated.
Comparatives are six months to 31 December 2001.
St Barbara is a dedicated gold company listed on both the Australian Stock Exchange and the AIM (London Stock
Exchange) - ticker symbol SBM - with over 12,000 shareholders.
ST BARBARA MINES LIMITED
ABN 36 009 165 066
HALF-YEAR FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2002
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
CONTENTS Page
Directors' report 3
Consolidated statement of financial performance 5
Consolidated statement of financial position 6
Consolidated statement of cash flows 7
Notes to the consolidated financial statements 8
Directors' declaration 15
Independent review report to the members 16
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS REPORT
Your Directors present their report on the consolidated entity consisting of St
Barbara Mines Limited and the entities it controlled at the end of, or during,
the half year ended 31 December 2002.
Directors
The names of Directors who held office during or since the end of the half year:
Name Position Period of Directorship
Stephen Miller Executive Chairman and Managing Director Director since 12 March 1999
G. Brian Speechly Non Executive Director Director since 9 July 1997
Kevin Dundo Non Executive Director Director since 26 March 2002
Henderson Tuten Non Executive Director Director since 26 March 2002
James McClements Alternate Non Executive Director to Mr Tuten Alternate Director since 26 March 2002
Review of Operations
The consolidated operating loss after tax for the half-year ended 31 December
2002 attributable to members of the Company was $22,041,000 (31 December 2001:
$771,000 profit). The current year loss includes the impact of a change in
accounting policy effective 1 July 2002 to write off a total of $8,532,000 in
current and previous exploration and evaluation expenditure as follows:
$
Cumulative effect of write off of exploration expenditure
incurred prior to 1 July 2002 4,422,000
Current period exploration expenditure written off
- Exploration drilling and assay expenditure 1,692,000
- Exploration consultant expenditure 963,000
- Other exploration expenditure items 1,455,000
8,532,000
Production and Sales Statistics 6 months to 6 months to 6 months to
31 December 2002 30 June 2002 31 December 2001
Ore Mined (tonnes) 427,936 609,791 776,404
Head grade (g/t) 3.69 2.66 2.00
Ore Milled (tonnes) 931,896 935,647 953,182
Head grade (g/t) 2.18 2.06 1.64
Recovery (%) 92.6% 92.6% 91.8%
Gold produced (ounces) 60,393 57,272 46,010
Gold sold (ounces) 59,865 57,654 48,191
Ore mined was lower than the previous period due to difficulties at Gibraltar
resulting in mining delays and sterilising of ounces. These factors have had an
adverse impact on amortisation of Gibraltar which is exaggerated due to the
short remaining mine life. Stoping at Gibraltar was completed in February 2003.
Mill feed is now exclusively from low grade stockpiles including inaugural
material from Paddy's Flat.
Mining activity at Meekatharra is in transition. Following the completion of
both Caledonian and Great Northern Highway four months ago and the imminent
completion of Gibraltar, the current focus is the on-going evaluation of a
number of resource positions, and the recent Paddy's Flat tenement acquisition.
Events subsequent to 31 December 2002
Since 31 December 2002 the following has occurred:
* On 9 January 2003, the Company announced a proposed business
combination between the Company and Geomaque Explorations Ltd (which will
include Midas Gold plc) to create a new growth oriented, international gold
mining and exploration company to be named Defiance Mining Corporation and
incorporated in Canada.
* On 3 February 2003, 15,000,000 fully paid ordinary shares at a price
of $0.11 per share were issued to raise $1.65 million (before issue expenses) to
assist in the acquisition of the Paddy's Flat area of interest. On 31 January
2003 the Company made the first payment for $1.4 million for the Paddy's Flat
acquisition with the remaining two payments of $1.5 million due 31 March 2003
and 30 April 2003.
* On 20 February 2003, 5,600,000 fully paid ordinary shares at $0.11 per
share were issued in relation to the Paulsens native title agreement.
* On 20 February 2003, 1,000,000 unlisted options with an exercise price
of $0.11 and an expiry date of 31 December 2005 were issued to Resource Capital
Fund II LP in satisfaction of the corporate debt facility extension fee.
* On 27 February 2003, the Company announced that it had entered into 2
agreements to raise $8.4 million by way of St Barbara issuing $2.8 million of
unsecured Convertible Notes and $5.6 million through an unsecured Convertible
Loan. The funds raised will be used to fund the Paddys Flat acquisition and
general working capital. The repayment date for the Convertible Notes and the
Convertible loan is 31 December 2007 and both facilities carry interest at 12%.
Other than the matters discussed above, there has not arisen in the interval
between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of
the directors of the Company, to affect significantly the operations of the
economic entity, the results of those operations, or the state of affairs of the
economic entity, in future financial years.
Rounding Off
The Company is of a kind referred to in Class Order 98/0100 issued by the
Australian Securities and Investment Commission, relating to the "rounding off"
of amounts in the Directors' report and Financial report. Amounts in the
Directors' report and the Financial report have been rounded off to the nearest
thousand dollars in accordance with that Class Order.
Signed in accordance with a resolution of the Board of Directors.
STEPHEN W. MILLER
EXECUTIVE CHAIRMAN
Dated at Perth this 6th day of March 2003
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
STATEMENT OF FINANCIAL PERFORMANCE
for the 6 months ended 31 December 2002
Note Consolidated Consolidated
31 December 31 December
2002 2001
$'000 $'000
Revenues from sale of gold 34,570 25,014
Other revenues from outside operating activities 3 760 28,747
Revenue from ordinary activities 35,330 53,761
Expenses
- cost of sale of investments - (17,502)
- changes in inventory - finished goods & work in progress 700 (391)
- raw materials and consumables used (7,622) (6,499)
- employee expenses (4,536) (5,255)
- cost of sale of plant and equipment (22) (837)
- cost of contract mining (11,701) (7,289)
- cost of contract cartage (1,596) (1,001)
- cost of contract processing (1,397) (1,074)
- exploration drilling and assay expenditure 1 (1,692) -
- exploration consultant expenditure 1 (963) -
- cumulative effect of exploration write off 1 July 2002 1 (4,422) -
- other expenses from ordinary activities (3,564) (1,835)
Profit/(loss) before interest, tax, depreciation and (1,485) 12,078
amortisation (EBITDA)
- depreciation (971) (1,156)
- amortisation of mine development expenses (14,630) (8,854)
Profit/(loss) before interest and tax (EBIT) (17,086) 2,068
- borrowing cost expense (2,242) (1,374)
Profit/(loss) from ordinary activities before income tax (19,328) 694
Income tax expense 4 (2,965) -
Profit/(loss) from ordinary activities after income tax (22,293) 694
Net (loss) attributable to outside equity interests (252) (77)
Net profit/(loss) attributable to members of St Barbara Mines
Limited
(22,041) 771
Total changes in equity other than those resulting from
transactions with owners as owners
(22,041) 771
Basic and diluted earnings/(loss) per share for St Barbara 11 (6.332) 0.359
Mines Limited
(cents per share)
The above statement of financial performance should be read in conjunction with
the accompanying notes.
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
STATEMENT OF FINANCIAL POSITION
as at 31 December 2002
Note Consolidated Consolidated
31 December 30 June
2002 2002
$'000 $'000
Current assets
Cash and bank balances 260 9,032
Receivables 2,849 3,287
Other financial assets 4,891 -
Inventories 5,027 5,151
Assets held for resale 4,857 5,409
Other 1,506 1,505
Total current assets 19,390 24,384
Non-current assets
Restricted cash 3,337 1,837
Other financial assets - 4,526
Property, plant & equipment 9,424 9,906
Other 188 232
Deferred tax assets - 2,965
Mining properties 44,476 58,188
Total non-current assets 57,425 77,654
Total assets 76,815 102,038
Current liabilities
Payables 9,720 15,905
Interest bearing liabilities 9 11,845 12,926
Provisions 1,065 1,037
Total current liabilities 22,630 29,868
Non-current liabilities
Interest bearing liabilities 9 6,251 9,393
Provisions 2,811 2,669
Total non-current liabilities 9,062 12,062
Total liabilities 31,692 41,930
Net assets 45,123 60,108
Equity
Parent entity interest
Contributed equity 5 124,350 118,213
Option reserves 6 1,601 430
(Accumulated Losses) 7 (80,828) (58,787)
Total Parent entity interest 45,123 59,856
Outside equity interests in controlled entities - 252
Total equity 45,123 60,108
The above statement of financial performance should be read in conjunction with
the accompanying notes.
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
STATEMENT OF CASH FLOWS
for the 6 months ended 31 December 2002
Consolidated Consolidated
31 December 31 December
2002 2001
$'000 $'000
Cash flows from operating activities:
Receipts in the course of operations (inclusive of GST) 38,843 26,678
Payments in the course of operations (inclusive of GST) (41,451) (21,159)
Interest received 202 88
Borrowing costs paid (746) (1,046)
Net cash provided by / (used in) operating activities: (3,152) 4,561
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment 391 1,532
Proceeds on sale of investments in listed securities - 26,724
Payments for investments in listed securities (365) -
Payments in respect of exploration, evaluation & development
(4,371) (22,239)
Payments to increase security bonds (1,500) -
Payments for property, plant and equipment (437) (1,933)
Net cash provided by / (used in) investing activities: (6,282) 4,084
Cash flows from financing activities:
Proceeds from borrowings 4,000 3,538
Repayment of borrowings (8,699) (13,342)
Net proceeds from issues of shares 5,361 -
Payment for shares bought back - (1,066)
Net cash provided by / (used in) financing activities: 662 (10,870)
Net (decrease) in cash held (8,772) (2,225)
Cash at beginning of period 9,032 4,755
Cash at end of period 260 2,530
The above statement of financial performance should be read in conjunction with
the accompanying notes.
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the 6 months ended 31 December 2002
Note 1 - Basis of preparation of half-year consolidated financial report
This general purpose financial report for the interim half-year reporting period
ended 31 December 2002 has been prepared in accordance with Accounting Standard
AASB 1029 Interim Financial Reporting, other mandatory professional reporting
requirements (Urgent Issues Group Consensus Views), other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations
Act 2001.
This interim financial report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this report is to
be read in conjunction with the annual report for the year ended 30 June 2002
and any public announcements by St Barbara Mines Limited and its Controlled
Entities during the interim reporting period in accordance with continuous
disclosure requirements of the Corporations Act 2001.
Unless otherwise stated the accounting policies adopted are consistent with
those of the previous financial year and corresponding interim reporting period.
These consolidated financial statements have been prepared on a going concern
basis. At 31 December 2002, the consolidated entity's current liabilities
exceeded its current assets by $3.2 million after recording a loss for the 6
months of $22.0 million. Refer to note 12 - Events Subsequent to Balance Date
which sets out the financing arrangements put in place since 31 December 2002.
Furthermore, subsequent to period end, the company announced a proposed merger
to form Defiance Mining Corporation. The proposed merger should enable the
Company to access the major resource capital markets and secure funding
commensurate with its needs.
Should the merger not proceed the Directors are of the view, based on past
experience, that the consolidated entity will be able to renegotiate its debt
structure, secure such additional equity funding as is necessary; and/or sell
such assets as are necessary to provide the required funding to enable the
Company and its operations to continue as a going concern.
Change in accounting policy for treatment of Exploration, Evaluation and
Development Expenditure
With effect from 1 July 2002 all exploration and evaluation expenditure incurred
by or on behalf of the Company up to the decision by the Board to proceed with
development of a mining property, will be expensed as incurred. Acquired
exploration assets are not written down below acquisition cost until such time
as the acquisition cost is not expected to be recovered.
Mining properties now consists only of acquired exploration assets and mineral
properties currently under development or in production together with related
mine development costs and capital assets. The cost of mineral properties
includes the cash consideration and/or the fair value of shares issued on the
date the property is acquired.
The recoverability of amounts shown for mining properties is dependent upon the
existence of economically recoverable reserves; the acquisition and maintenance
of appropriate permits, licenses and rights; the ability of the Company to
obtain financing to complete the development of the properties where necessary
and upon future profitable production; or, alternatively, upon the Company's
ability to recover its spent costs through a disposition of its interests.
Mine development costs relating to mineral properties are deferred until the
properties are brought into commercial production, at which time they are
amortised over the estimated useful life of the related property or on a
unit-of-production basis over proven and probable reserves. Pre-production
credits, including the value of marketable metals extracted during mine
development, are credited against costs incurred.
The above policy was adopted with effect from 1 July 2002 to align the
accounting policies of the Company with those of entities involved in the
proposed Defiance Mining Corporation business combination with Geomaque
Explorations Limited (a Canadian listed company).
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the 6 months ended 31 December 2002
Note 1 - Basis of preparation of half-year consolidated financial report -
continued
An adjustment of $8,532,000 was made on the statement of financial performance
as a result of this change in accounting policy:
Cumulative effect of write off of exploration expenditure incurred prior
to 1 July 2002 4,422,000
Current period exploration expenditure written off
- Exploration drilling and assay expenditure 1,692,000
- Exploration consultant expenditure 963,000
- Other exploration expenditure items 1,455,000
8,532,000
The previous accounting policy was to carry forward exploration and evaluation
expenditure to the extent that such activities in the area of interest had not
yet reached a stage which permitted a reasonable assessment of the existence or
otherwise of recoverable mineral resources.
The restatements of consolidated retained losses and non current assets
exploration, evaluation and development set out below show the information that
would have been disclosed had the new accounting policy always applied.
Consolidated Consolidated
31 December 31 December
2002 2001
$'000 $'000
Restated Restated
Restatement of consolidated statement of financial
performance (extract)
Profit from ordinary activities before income tax expense (15,656) (2,550)
Income tax expense (2,965) -
Net profit (18,621) (2,550)
Consolidated Consolidated
31 December
2002 30 June
$'000 2002
$'000
Restated
Restatement of non current assets - exploration, evaluation
and development expenditure
Previously reported carrying amount 44,476 58,188
Adjustment for change in accounting policy - (4,422)
Restated carrying amount 44,476 53,766
Restatement of retained profits
Previously reported carrying amount (80,828) (58,787)
Adjustment for change in accounting policy - (4,422)
Restated carrying amount (80,828) (63,209)
Note 2 - Segment Information
The consolidated entity operates predominantly in the gold mining industry in
Australia.
The consolidated entity's head office is in Australia.
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the 6 months ended 31 December 2002
Consolidated Consolidated
31 December 30 June
2002 2002
$'000 $'000
Note 3 - Other revenue
Operating profit before income tax has been determined after
crediting as other revenues from outside operating activities:
- proceeds on sale of investment in listed securities - 26,724
- proceeds on sale of property plant & equipment 391 1,532
- interest revenue 202 88
- other revenue 167 403
760 28,747
Consolidated Consolidated
31 December 31 December
2002 2001
$'000 $'000
Note 4 - Income Tax
The Economic Entity adopts the liability method of tax-effect accounting.
Tax expense
The amount of income tax attributable to the
financial year differs from the amount prima
facie payable on the operating profit (loss). The
differences are reconciled as follows:
Operating (loss) (19,328) 694
Prima facie income tax expense (benefit) on the
operating profit at 30% (2002: 30%) (5,798) 208
Tax effect of permanent differences:
Legal and other capital expenditure 64 56
Sundry items 9 1
73 57
Income tax (benefit) adjusted for permanent (5,725) 265
differences
Future income tax benefit not brought to account 5,725 -
Future income tax benefits previously recognised,
now written off
2,965 -
Benefit of tax losses of prior year not
previously recognised - (265)
Income tax expense/(benefit) 2,965 -
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the 6 months ended 31 December 2002
Consolidated Consolidated
31 December 30 June
2002 2002
$'000 $'000
Note 5 - Contributed Equity
Ordinary Share Capital
Issued and paid up 124,350 118,213
These shares have no par value and are fully paid ordinary shares. Ordinary
shares entitle the holder to participate in dividends and the proceeds on
winding up of the Company in proportion to the number of and amounts paid on the
shares held. On a show of hands every holder of ordinary shares present at a
meeting in person or by proxy, is entitled to one vote, and upon a poll each
share is entitled to one vote.
Movements in Ordinary Share Capital:
Date Details Notes Number Issue A$'000
of shares price
30 June 02 Opening balance 319,758,267 118,213
11 July 02 Share issue (i) 1,210,052 $0.2037 246
11 July 02 Share issue (i) 196,562 $0.2263 44
11 July 02 Share issue (ii) 1,846,628 $0.2143 396
21 Aug 02 Placement (iii) 34,333,332 $0.1650 5,665
21 Aug 02 Placement costs (iii) - - (994)
17 Oct 02 Share issue (ii) 280,140 $0.1973 55
2 Dec 02 Share issue (i) 1,562,000 $0.0960 150
31 Dec 02 Share issue (i) 1,067,616 $0.0843 90
31 Dec 02 Share issue (i) 4,261,200 $0.1021 435
31 Dec 02 Share issue (i) 437,006 $0.1136 50
31 Dec 02 Balance 364,952,803 124,350
(i) Share issue to Resource Capital Fund II LP for Facility interest and
fees.
(ii) Share issue in accordance with an agreement with Grimwood Davies Pty
Ltd for conducting a drilling program in the Meekatharra area.
(iii) Placement to raise working capital.
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the 6 months ended 31 December 2002
Consolidated Consolidated
31 December 30 June
2002 2002
$'000 $'000
Note 6 - Option Reserve
Option Reserve
Balance 1,601 430
The option reserve increased during the half year to 31 December 2002 due to the issue of 8,703,287
unlisted options and 22,166,666 listed options. The fair value of each option issued has been valued using
the Black-Scholes option pricing model after considering factors such as the term of the option, the risk
free interest rate and the volatility of the share price.
The options issued were as follows:
* 8,703,287 options issued to Resource Capital Fund II LP in lieu of debt facility fees and
interest. The value ascribed to these issues is $480,758; and
* 22,166,666 listed share options with a strike price of $0.30 and expiry of 29 February 2004
issued in conjunction with the placement of ordinary shares. The value ascribed to these issues is
$689,540.
Note 7 - Accumulated Losses
Accumulated (losses) at the beginning of the financial (58,787) (40,893)
period
Net (loss) attributable to members of St Barbara Mines (22,041) (17,894)
Limited
Accumulated (losses) at the end of the financial period (80,828) (58,787)
Note 8 - Notes to Statement of Cash Flows
(i) Non Cash Financing and Investing Activities
During the half year the following transactions occurred which affected assets and liabilities and did not result in
cash flows:
* The issue of 8,734,436 fully paid ordinary shares to RCF in satisfaction of the RCF interest and facility
fees. The value ascribed to this issue is $1,016,000.
* The issue of 2,126,768 fully paid ordinary shares to Grimwood Davies Pty Ltd in satisfaction of a drilling
program. The value ascribed to this issue is $451,000.
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the 6 months ended 31 December 2002
Consolidated Consolidated
31 December 30 June
2002 2002
$'000 $'000
Note 9 - Interest bearing liabilities
Current:
Secured
- lease liability (a) 2,561 3,072
- HP liability 1,284 1,285
- other loans (b) 8,000 1,500
- convertible notes (c) - 7,069
11,845 12,926
Non-Current:
Secured
- HP liability 2,251 2,893
- other loans (b) 4,000 6,500
6,251 9,393
(a) Secured by a fixed charge over the item of plant and equipment purchased by the funds advanced. The lease
liability is payable monthly with the last payment due in November 2004 however the entire liability is disclosed as a
current liability as it relates to one of the assets held for resale which is disclosed as a current asset.
(b) On 8 January 2002, Resource Capital Fund II L.P. ("RCF") and the Company, Silkwest Holdings Pty Ltd and St
Barbara
Pastoral Co. Pty Ltd entered into a financing facility of A$20 million ("RCF Facility"). Each of these companies have
entered into deeds of fixed and floating charges with RCF to secure their obligations under the RCF Facility. In
addition, the Company granted RCF a share mortgage. Silkwest Holdings Pty Ltd and St Barbara Pastoral Co. Pty Ltd
have
entered into deeds of guarantee and indemnity with RCF.
The security provided to RCF constitutes a first ranking security to RCF over any assets of the consolidated entity
acquired by utilising funds drawn down under the RCF Facility and a second ranking charge over the consolidated entity
assets generally. This second ranking security is subordinated to the existing Macquarie Bank Limited security under
a
deed of priority.
The RCF Facility was modified and extended on 10 September 2002 such that the facility of A$20 million was reduced to
A$12 million on 1 January 2003. An extension fee of $390,000 was paid in cash and shares.
The $8 million of the RCF Facility is repayable on 31 July 2003 with the balance of $4 million repayable on 1 January
2004 or at a later date agreed to by the parties. Should the proposed Defiance merger not be completed by 31 May
2003,
RCF have the right to review the timing of the $4 million repayment. Interest of 10 per cent per annum calculated
daily
pursuant to the RCF Facility is payable on 31 July 2003.
The RCF Facility provides RCF with an entitlement to be issued options. The Company must, at the end of each quarter
during the term, issue options to RCF calculated with reference to the funding portion which remains outstanding on
each day. The term of each option will be 48 months from the date of issue. The options issued under the RCF
Facility
are not listed for trading on ASX.
(c) The convertible notes were issued to Perpetual Trustees Nominees Limited as trustee of the Golden Arrow Fund
(GAF) and were secured by way of a fixed and floating charge over substantially all of the assets and undertakings of
Taipan Resources NL. The convertible notes each bear interest at 10% per annum compounded monthly. St Barbara Mines
Limited provided the funds to redeem the convertible notes in full on 29 November 2002.
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the 6 months ended 31 December 2002
Note 10 - Contingent Liabilities
There have been no changes to Contingent Liabilities disclosed since the Annual
Report for the year ended 30 June 2002.
Note 11 - Earnings Per Share
Consolidated Consolidated
31 December 31 December
2002 2001
$'000 $'000
Basic earnings/(loss) per share - cents per share (6.332) 0.359
Weighted average number of ordinary shares outstanding during the 6 348,075,834 214,693,287
months used in calculation of basic EPS
Diluted earnings per share has not been calculated as the exercise price of the
89,110,406 options on issue were above the market price at balance date.
Note 12 - Events Subsequent to Balance Date
Since 31 December 2002 the following has occurred:
* On 9 January 2003, the Company announced a proposed business
combination between the Company, Geomaque Explorations Ltd (which will include
Midas Gold plc) to create an international gold mining and exploration company
to be named Defiance Mining Corporation and incorporated in Canada.
* On 3 February 2003, 15,000,000 fully paid ordinary shares at a price
of $0.11 per share were issued to raise $1.65 million (before issue expenses) to
assist in the acquisition of the Paddy's Flat area of interest. On 31 January
2003 the Company made the first payment for $1.4 million for the Paddy's Flat
acquisition with the remaining two payments of $1.5 million due 31 March 2003
and 30 April 2003.
* On 20 February 2003, 5,600,000 fully paid ordinary shares at $0.11 per
share were issued to Yamatji Marlpa Barna Baba Maaja Aboriginal Corporation in
trust for Puutu Kunti Kurrama Pinikura in relation to the Puutu Kunti Kurrama
Pinikura native title agreement.
* On 20 February 2003, 1,000,000 unlisted options with an exercise price
of $0.11 and an expiry date of 31 December 2005 were issued to Resource Capital
Fund II LP in satisfaction of the corporate debt facility extension fee.
* On 27 February 2003, the Company announced that it had entered into 2
agreements to raise $8.4 million by way of St Barbara issuing $2.8 million of
unsecured Convertible Notes and $5.6 million through an unsecured Convertible
Loan. The funds raised will be used to fund the Paddys Flat acquisition and
general working capital. The repayment date for the Convertible Notes and the
Convertible loan is 31 December 2007 and both facilities carry interest at 12%.
Other than the matters discussed above, there has not arisen in the interval
between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of
the directors of the Company, to affect significantly the operations of the
economic entity, the results of those operations, or the state of affairs of the
economic entity, in future financial years.
ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES
Half-year financial statements for the 6 months ended 31 December 2002
DIRECTORS' DECLARATION
The Directors declare that the Financial Statements and notes set out on pages 5
to 14:
(a) comply with Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements, and
(b) give a true and fair view of the consolidated entity's financial
position as at 31 December 2002 and of its performance, as represented by the
results of its operations and its cash flows, for the half-year ended on that
date.
In the directors' opinion:
(a) the financial statements and notes are in accordance with the
Corporations Act 2001; and
(b) there are reasonable grounds to believe that St Barbara Mines Limited
will be able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of directors.
STEPHEN W. MILLER
EXECUTIVE CHAIRMAN
Dated at Perth this 6th day of March 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KDLBBXXBXBBK