RNS Number:3419Q
St. Barbara Mines Limited
30 September 2003
ASX SHAREHOLDERS REPORT
Below are the Company's audited financial statements for the year ended 30 June
2003 (or see pdf version on our website http://www.stbarbara.com.au/UPLOADED/
SBM000403%20web.pdf)
Stephen W. Miller
Executive Chairman
30 September 2003
ST BARBARA MINES LIMITED
ABN 36 009 165 066
FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2003
DIRECTORS REPORT
Your Directors present their report on the consolidated entity consisting of St
Barbara Mines Limited ("Company" or "parent entity") and the entities it
controlled at the end of, or during, the financial year ended 30 June 2003 and
the Audit Report thereon.
DIRECTORS
The names of Directors who held office during the financial year or up to the
date of this report:
Stephen W. Miller (aged 43) - Executive Chairman
CA, BBus FAICD
Appointed director on 12 March 1999
Mr Miller is a chartered accountant by profession with over twenty years'
experience in the corporate and financial arena. Since 1992, Mr Miller has
specialised in the mineral resources sector and has been executive director and
founder of a number of resource companies, including Western Metals Limited,
East Africa Gold Corporation and Hargraves Resources NL. Mr Miller is also
chairman of Strata Mining Corporation Limited, St Barbara's major shareholder.
Mr Miller brings valuable management, corporate and financing experience to the
board of St Barbara. Mr Miller is also executive chairman of Taipan Resources
NL, Defiance Mining Corporation and a board member of the Australian Gold
Council.
G. Brian Speechly (aged 70) - Non-Executive Director
FAusIMM
Appointed director on 9 July 1997
Member of Remuneration Committee
Mr Speechly is a consultant with over 40 years of experience in the mining
industry. He spent more than 24 years spent in technical and managerial roles
with major international mining companies. For the past 18 years, Mr Speechly
has provided consulting services to a wide range of clients. Over the course of
his career, Mr Speechly has been involved in several hundred mining projects and
is recognised in Australia and overseas as an expert in both underground and
open cut mining and design, equipment selection and practical, workable, low
cost mining methods. Mr Speechly is also a director of Centamin Egypt Limited.
Kevin A. Dundo (aged 51) - Non-Executive Director
LLB, B.Com, FCPA
Appointed director on 26 March 2002
Chairman of Audit Committee and Remuneration Committee
Mr Dundo is a corporate lawyer and practices in the commercial and corporate
areas and has considerable experience in the mining area and the financial
services industry. Mr Dundo has played a major role in providing advice in the
corporate law area to mining companies and is also a director of Taipan
Resources NL, Defiance Mining Corporation and Midas Gold plc.
Henderson (Hank) G. Tuten (aged 55) - Non-Executive Director
B.A. (Econ)
Appointed director on 26 March 2002
Member of the Audit Committee
Mr Tuten is actively involved in a consolidated entity of private equity funds
as a founding partner. These are the Resource Capital Funds, the e-Century
Capital Fund and the CIP Fund. He spent over 15 years with the N.M. Rothschild
and Sons Consolidated entity. During that period, he was the chief executive
officer of Rothschild Australia Limited, Rothschild North America Inc. and
Continuation Investments N.V., the private equity vehicle for Rothschild
continuation Holdings A.G. Consolidated entity. Prior to that, he was a
commercial banker with the Philadelphia National Bank. Mr Tuten serves on
several boards in connection with his investment activities. He graduated from
the University of Virginia with B.A. in Economics.
Mr James T. McClements was an alternate director to Mr HG Tuten from the
beginning of the financial year until his resignation on 10 July 2003.
PRINCIPAL ACTIVITIES
The principal activities of St Barbara Mines Limited and entities controlled by
it (collectively known as the consolidated entity) during the financial year
ended 30 June 2003, were gold production, gold, oil and mineral exploration,
pastoral activities, and investment.
RESULTS OF OPERATIONS
The consolidated operating loss after tax for the year ended 30 June 2003
attributable to members of the Company was $32,733,000 (2002: $17,894,000 loss).
The current year loss includes the impact of a change in accounting policy
effective 1 July 2002 to write off a total of $9,897,000 in current and previous
exploration and evaluation expenditure. See Note 1(d) for further details.
Commentary on the operations and the results of those operations are set out
below:
Production and Sales Statistics 12 months to 30 June 12 months to 30
2003 June 2002
- Ore Mined tonnes 483,041 1,386,084
- Ore Milled tonnes 2,284,599 1,888,829
- Head grade g/t 1.47 1.84
- Recovery % 89.7 92.2
- Gold produced ounces 96,611 103,217
- Gold sold ounces 98,080 105,844
- Cash cost $/ounce 465 553
Mining activity at Meekatharra underwent significant transition during the year.
Following completion of mining at Caledonian (September 2002), Great Northern
Highway (October 2002) and Gibraltar (February 2003), the current focus has
turned to evaluation of the underground potential of the Paddys Flat tenement
area. Current mill feed is from low grade stockpiles at Paddys Flat.
DIVIDENDS
The Directors do not recommend the payment of a dividend.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the consolidated entity during
the financial year were as follows:
* On 8 July 2002, the Company listed on the Alternative
Investment Market (AIM) of the London Stock Exchange.
* On 15 July 2002, the Company issued 774,588 options with an
average exercise price of $0.2122 and an expiry date of 15 July 2005 in
satisfaction of the Resource Capital Fund II LP ("RCF") monthly facility fee.
* On 15 July 2002, the Company issued 1,406,614 fully paid
ordinary shares at prices ranging from $0.2125 to $0.2263 in satisfaction of the
RCF interest and standby fee.
* On 15 July 2002, the Company issued 1,846,628 fully paid
ordinary shares to Grimwood Davies Pty Ltd at a price of $0.2143 per share in
satisfaction of drilling services provided.
* On 13 August 2002, the Company issued 800,408 options with an
average exercise price of $0.2122 and an expiry date of 13 August 2005 in
satisfaction of the RCF monthly facility fee.
* On 21 August 2002, the Company issued 34,333,332 fully paid
ordinary shares at $0.165 per share to raise $5.6 million (before issue
expenses). In addition one listed option was issued for each new share issued.
The options have an exercise price of $0.30 per option and expire on 29 February
2004.
* On 6 September 2002, the Company issued 800,408 options with an
average exercise price of $0.2122 and an expiry date of 6 September 2005 in
satisfaction of the RCF monthly facility fee.
* On 6 September 2002, the Company issued 5,000,000 options with
an exercise price of $0.30 and an expiry date of 29 February 2004 as a placement
facility fee.
* On 8 October 2002, the Company announced that it had entered
into an agreement to acquire the Paddys Flat mining area from a subsidiary of
Barrick Gold for $4.5 million plus a royalty of $10 per ounce on production
exceeding 50,000 ounces.
* On 2 December 2002, the Company announced that the convertible
notes due on 30 November 2002 by Taipan Resources NL, were redeemed in full on
29 November 2002. The redemption by Taipan Resources NL was funded by an
increase in the existing loan from the Company.
* 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 31 January 2003, the Company issued 15,000,000 fully paid
ordinary shares at a price of $0.11 per share 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.
* On 17 February 2003, the Company announced that it had signed a
joint venture agreement with Gold Fields Australasia Pty Limited covering the
Reedys area. Gold Fields Australasia Pty Limited can earn 51% interest by
spending $3.5 million over 3 years.
* On 17 February 2003, the Company issued 5,600,000 fully paid
ordinary shares at $0.11 per share in relation to the Paulsens native title
agreement.
* On 20 February 2003, the Company issued 1,000,000 unlisted
options with an exercise price of $0.11 and an expiry date of 31 December 2005
to RCF in satisfaction of the corporate debt facility extension fee.
* On 27 February 2003, the Company announced that it had entered
into 2 agreements with Ocean Resources Capital Holdings Limited ("Ocean") to
raise $8.4 million by way of the Company 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%.
* On 28 February 2003, the Company announced that Mr Peter
McIntyre had resigned as Chief Operating Officer with effect from 31 March 2003.
* On 3 April 2003, the Company announced a revision to the
proposed business combination between the Company and Geomaque Explorations Ltd.
The revised proposal will see a sequential, rather than concurrent process,
with Geomaque Explorations Ltd acquiring Midas Gold plc to create Defiance
Mining Corporation, followed, subject to agreement on merger terms, by the
merger of the Company and Defiance Mining Corporation.
* On 27 June 2003, the Company announced the placement of
15,000,000 shares to a UK institution at a price of $0.0667 to raise a net $1.0
million. In addition Ocean had exercised early, at a price of $0.13 per share,
15 million shares pursuant to the convertible note issued February 2003 (and
convertible up to 31 December 2007). These shares were transferred by Ocean to
the UK institution for no consideration. Shares allotted pursuant to this
exercise were approved by shareholders at the 6 June 2003 General Meeting.
LIKELY DEVELOPMENTS
In the opinion of the Directors, likely developments in the operations of the
consolidated entity and the expected results of those operations, known at the
dates of this report, have been covered in the Review of Operations and Events
Subsequent to 30 June 2003 in this report. Likely developments which may
prejudice the Company by disclosure have not been disclosed.
EVENTS SUBSEQUENT TO 30 JUNE 2003
Since 30 June 2003 the following has occurred:
* On 3 July 2003, the Company sold all of its 44,400,000 shares
held in Dioro Exploration NL, receiving net proceeds of $4,984,000 resulting in
a profit on sale of $93,000. As a result of the sale of the shares, the
proceeds were used to reduce the debt facility with RCF by $5,000,000.
* On 7 July 2003, the Company issued 15,910,922 fully paid
ordinary shares at $0.0374 per share to RCF in satisfaction of interest on the
debt facility.
* On 7 July 2003, the Company issued the following options with
an expiry date of 7 January 2007 to RCF in satisfaction of the monthly facility
fee:
* 5,834,004 options exercisable at $0.2125;
* 594,308 options exercisable at $0.2086;
* 2,918,376 options exercisable at $0.2124; and
* 17,430,243 options exercisable at $0.1138.
* On 10 July 2003, the Company announced that the convertible
note and convertible loan held by Ocean had been restructured effective 19 June
2003. Under the new arrangement, the existing convertible note and convertible
loan are replaced with a convertible loan with a face value of $7.2 million and
a new conversion price of $0.08 and repayable on 19 December 2005. The
financial effect of this transaction has been brought to account at 30 June
2003.
* On 10 July 2003, the Company announced that Mr James McClements
had resigned as alternate director to Mr Hank Tuten due to other work
commitments.
* On 22 September 2003, the Company announced that RCF has agreed
to convert its remaining debt ($7.0 million) into equity at $0.08 per share,
thereby extinguishing all secured debt from the Company's balance sheet. The
debt to equity swap by RCF, including a modification fee of 4.5 million shares,
will result in the issue to RCF of 92 million shares at $0.08 per share, taking
its shareholding from 7.9 percent to approximately 23 percent of an enlarged
capital base. The transaction is subject to shareholder approval at the Annual
General Meeting. The transaction is also subject to RCF obtaining various
approvals including the Foreign Investment Review Board. In addition, the
Company will restructure the board to consist of five board members; to include
two nominees of RCF and a new non-executive Chairman. Should this transaction
be approved by shareholders at the Annual General Meeting, the consolidated
entity's current liabilities will reduce by $7.0 million. Should the
transaction not be approved by shareholders the $7.0 million owing to RCF will
be repayable on 30 November 2003.
* On 25 September 2003, the Company announced the placement of up
to 12 million fully paid ordinary shares at $0.08 per share for working capital
to raise up to $960,000 before expenses.
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
consolidated entity, the results of those operations, or the state of affairs of
the consolidated entity, in future financial years.
MEETINGS OF DIRECTORS
The meetings of the Company's board of directors and each board committee held
during the year ended 30 June 2003, and the numbers of meetings attended by each
director were:
Board Audit Remuneration
A B A B A B
S.W. Miller 6 6 * * * *
B.G. Speechly 5 6 * * 1 1
K.A. Dundo 6 6 3 3 1 1
H.G. Tuten 6 6 3 3 * *
A = Number of meetings attended
B = Number of meetings held during the time that the director held office or was a member of the committee
during the year
* = Not a member of the relevant committee
In addition there were 28 circular resolutions approved by the Board during the
year.
DIRECTORS' INTERESTS IN SHARES AND OPTIONS
Particulars of directors' interests and of persons connected with them (within
the meaning of section 34b of the Corporations Act 2001) in shares of Company as
at the date of this report are as follows:
Directors No. of Shares
S.W. Miller (1) Nil
G.B. Speechly 20,000
K.A. Dundo 100,000
H.G. Tuten (2) Nil
Connected Persons:
Strata Mining Corporation Limited (1) 32,200,000
RCF (2) 34,057,085
(1) Mr Miller is a director of Strata Mining Corporation Limited
(2) Mr Tuten is the Chairman of RCF Management L.L.C., the management
company of RCF
Particulars of directors interests and of persons connected with them (within
the meaning of section 34b of the Corporations Act 2001) in options of the
Company as at the date of this report are as follows:
Directors Date of Grant Shares under option Exercise Price Expiry Date
S.W. Miller 23 December 1999 2,500,000 $0.25 23 December 2004
23 December 1999 2,500,000 $0.35 23 December 2004
23 December 1999 2,500,000 $0.45 23 December 2004
30 November 2001 10,000,000 $0.40 31 December 2004
17,500,000
G.B. Speechly 30 November 2001 500,000 $0.40 31 December 2004
K.A. Dundo Nil Nil Nil Nil
H.G. Tuten (1) Nil Nil Nil Nil
Connected Persons
RCF (1) 12 February 2002 157,938 $0.2125 7 February 2005
5 March 2002 373,893 $0.2125 5 March 2005
2 April 2002 449,638 $0.2125 2 April 2005
17 May 2002 470,589 $0.2125 20 May 2005
17 May 2002 36,118 $0.2086 20 May 2005
4 June 2002 499,597 $0.2125 3 June 2005
4 June 2002 50,894 $0.2086 3 June 2005
4 June 2002 88,680 $0.2124 3 June 2005
15 July 2002 483,482 $0.2125 15 July 2005
15 July 2002 49,252 $0.2086 15 July 2005
15 July 2002 241,854 $0.2124 15 July 2005
13 August 2002 499,597 $0.2125 13 August 2005
13 August 2002 50,894 $0.2086 13 August 2005
13 August 2002 249,917 $0.2124 13 August 2005
6 September 2002 499,597 $0.2125 6 September 2005
6 September 2002 50,894 $0.2086 6 September 2005
6 September 2002 249,917 $0.2124 6 September 2005
15 October 2002 483,482 $0.2125 15 October 2005
15 October 2002 49,252 $0.2086 15 October 2005
15 October 2002 241,854 $0.2124 15 October 2005
20 February 2003 1,000,000 $0.1100 31 December 2005
7 January 2003 1,482,677 $0.2125 7 July 2006
7 January 2003 151,040 $0.2086 7 July 2006
7 January 2003 741,686 $0.2124 7 July 2006
7 January 2003 3,177,890 $0.1138 7 July 2006
7 July 2003 5,834,004 $0.2125 7 January 2007
7 July 2003 594,308 $0.2086 7 January 2007
7 July 2003 2,918,376 $0.2124 7 January 2007
7 July 2003 17,430,243 $0.1138 7 January 2007
38,607,563
(1) Mr Tuten is the Chairman of RCF Management L.L.C., the management
company of RCF
DIRECTORS' AND EXECUTIVES' EMOLUMENTS
Previously the Company has adopted a consultative approach to setting
remuneration levels. This process involved the Board being regularly advised of
industry remuneration standards through consultation with external agents and
senior executives.
Currently, remuneration is based on industry standards and set to attract
qualified and experienced directors and senior executives. Recommendations are
made to the Board on salary levels, packaging options, employee benefits and
conditions.
The Company formed a Remuneration Committee in April 2002 to consider
recommendations regarding the overall remuneration structure, packaging
strategies, remuneration policy and developed a formal performance based annual
review system. This committee meets annually to review directors' fees, senior
executive salary packages and salary ranges for the organisation.
Details of the nature and amount of each element of the emoluments of each
director of St Barbara Mines Limited and each of the 5 most highly remunerated
executive officers of the Company and the consolidated entity receiving the
highest emoluments during the year ended 30 June 2003 are set out on the
following tables:
Non- executive directors of St Barbara Mines Limited:
Directors' Superannuation Total Options
Fee $ $ issued
$ $
B.G. Speechly 50,000 4,500 54,500 -
K.A. Dundo (i) 94,320 8,488 102,808 -
H.G. Tuten - - - -
(i) Mr Dundo's remuneration includes $50,785 received from Taipan
Resources NL.
Executive directors of St Barbara Mines Limited:
Salary Motor Vehicle Superannuation Other Total Options
benefits issued
$ $ $ $ $ $
S.W. Miller 400,000 - 80,000 70,069 550,069 -
Other Executives of St Barbara Mines Limited and group:
Salary Motor Superannuation Retirement Total Options
Vehicle benefits issued
$ $ $ $ $ $
R.T. Calnan 169,000 5,883 62,600 - 237,483 -
C.W. Davis 145,391 5,194 21,809 - 172,394 -
P.T. McIntyre 154,596 20,504 33,006 165,506 373,612 -
P.J. Richardson 149,375 - 14,938 - 164,313 14,824 (i)
A.D. Rule 190,000 - 28,500 - 218,500 27,796 (i)
(1) The fair value of options issued to Executives during the year is
estimated at $0.037 per option. These options were issued on 17 January 2003
with an expiry date of 15 January 2008 and an exercise price of $0.35 per share.
This value has been calculated using a Black-Scholes option pricing model
after considering the following factors, amongst others, the share price on
grant date of $0.12, expiry date of 17 January 2008, exercise price of $0.35,
the term of the option, a risk free interest rate of 5% and using share price
volatility of 100%. This value has not been included in the Statement of
Financial Performance.
OPTIONS
Options over ordinary shares of St Barbara Mines Limited are as follows:
As at 30 June 2003 As at the date of this report
Listed share options - see Note 20(b) 44,329,772 44,329,772
Unlisted share options - see Note 20(c) 44,905,632 71,682,563 (1)
(1) The following unlisted share options have been issued since the end of
the financial year end as follows:
Recipient Date of Options Expiry Date Exercise Number of
Price Options
RCF 7 July 2003 7 January 2007 $0.2125 5,834,004
RCF 7 July 2003 7 January 2007 $0.2086 594,308
RCF 7 July 2003 7 January 2007 $0.2124 2,918,376
RCF 7 July 2003 7 January 2007 $0.1138 17,430,243
26,776,931
No options were exercised during or since the end of the financial year.
No options over unissued ordinary shares of St Barbara Mines Limited were
granted during or since the end of the financial year to any of the directors of
the company and the consolidated entity.
Options over unissued ordinary shares of St Barbara Mines Limited granted during
or since the end of the financial year to the 5 most highly remunerated
executive officers of the company and the consolidated entity as part of their
remuneration were as follows:
Date Options Granted Expiry Date Exercise Price Number of Options
A.D. Rule 17 January 2003 17 January 2008 $0.35 750,000
P.J. Richardson 17 January 2003 17 January 2008 $0.35 400,000
OFFICERS' INDEMNITIES AND INSURANCE
The Company has agreed to indemnify the following current directors and officers
of the Company, Mr S. Miller, Mr B. Speechly, Mr K. Dundo, Mr H. Tuten and Mr.
A. Rule, against all liabilities to another person and the Company that may
arise from their position as directors and officers of the Company and its
controlled entities, except where the liability arises out of conduct involving
a wilful breach of duty. The agreement stipulates that the Company will meet
the full amount of such liabilities including costs and expenses.
The Company has paid or agreed to pay a premium in respect of a contract
insuring directors and officers of the Company. That contract of insurance
prohibits the Company disclosing the nature of the liability insured against and
the amount of the premium paid therefore.
ENVIRONMENTAL REGULATIONS AND PERFORMANCE
The Company remains committed to the concept of sustainable development which
requires balancing the need for economic growth with good stewardship and the
protection of human health and the environment.
Mine site rehabilitation objectives are directed towards ensuring that the
physical structures that remain after mine closure do not impose a long term
hazard to public safety or the environment and that the mined area achieves the
nominated post mining land use. During the past year continued significant
progress was made toward fulfilling these rehabilitation objectives. Work was
undertaken across a range of sites which included rehabilitation earthworks
programs, making safe historic mine workings, waste dump slope profiling,
capping with topsoil/oxide material and deep ripping on contour. This program
resulted in the rehabilitation of 162 hectares of mine disturbed land during the
twelve months.
Drill site rehabilitation standards were also reviewed and are included in all
new drilling contracts. Rehabilitation of drill holes resulted in a total of
2,554 holes capped.
In addition to statutory monitoring requirements, regular self-audits were
conducted throughout the year to monitor progress and to identify areas which
required further management focus. One reportable incident occurred during the
year, which resulted from the discharge of approximately 250 kilolitres of near
potable quality mine water into an adjoining natural drainage system. No impact
on the vegetation in the area of the discharge was expected, and no impact has
been observed. In addition, three minor hydrocarbon spillage incidents were
reported involving small volumes of diesel fuel or waste oil. Each of these
incidents has been remediated by site personnel responsible for the areas
concerned.
Environmental management initiatives commenced or completed during the year
included:
* on going implementation of a Site Waste Management Plan with
the initial focus on waste grease disposal. One hundred and sixty drums were
collected, redrummed and sent to the DEP Approved disposal facility at Port
Hedland;
* development of environmental awareness, training requirements
and implementation of self audits;
* continuing progressive rehabilitation at new mines with the
target of completing all rehabilitation works within 3 months of a mine closure;
and
* seeding in excess of 190 ha of mine disturbed land using local
Meekatharra community groups.
OCCUPATIONAL, HEALTH, SAFETY AND WELFARE
This year Meekatharra Gold Operations reported two Lost Time Injuries for the
twelve months to 30 June 2003, compared to eleven Lost Time Injuries sustained
during the previous year. This significant improvement resulted in the reduction
of the Lost Time Injury Frequency Rate (LTIFR) from 16.6 (rolling twelve month
average) down to 8.1, while underground mining was still being conducted and a
further reduction to 4.7, by the end of June 2003.
Occupational Health and Safety training continued to focus on Risk Assessment,
Hazard Identification and Emergency Response Planning.
Training undertaken included:
* Accident & Incident Investigation
* Hazard Identification
* Fitness for Work Awareness
* Site Wide Emergency Evacuation
* Emergency Response Team Self Contained Breathing Apparatus
* Emergency Response - First Responder
* OH & S for Supervisors
Further work continued to develop the Site Safety Management Plan and Site
Hazard Register.
The workforce commitment to safety performance will focus on the continuous
review and improvement of safety systems and awareness which will target the
maintenance of the LTIFR at or below the industry average
ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July
1998 and in accordance with that Class Order, amounts in the financial report
and directors' report have been rounded off to the nearest thousand dollars,
unless otherwise stated.
AUDITOR
PricewaterhouseCoopers continues in office in accordance with section 327 of the
Corporations Act 2001.
Signed in accordance with a resolution of the Board of Directors.
STEPHEN W. MILLER
EXECUTIVE CHAIRMAN
Dated at Perth this 30th day of September 2003
Statements of Financial Performance for the year ended 30 June 2003
Consolidated Company
Notes 30 June 30 June 30 June 2003 30 June 2002
2003 2002 $'000 $'000
$'000 $'000
Revenue from sale of gold 3 56,111 54,516 56,111 54,516
Other revenues from outside operating 3 1,493 31,977 2,411 22,780
activities
Total revenue from ordinary activities 57,604 86,493 58,522 77,296
Changes in inventories of finished goods (999) (278) (999) (278)
Raw materials and consumables used (12,263) (13,425) (12,263) (13,425)
Cost of investments sold - (17,506) - (11,960)
Cost of property, plant and equipment sold (184) (1,964) (184) (1,964)
Cost of tenements sold - (186) - (186)
Contract mining, cartage, milling, (22,195) (19,744) (22,195) (19,744)
maintenance, labour and consultants
Tenement rent and rates (1,110) (1,224) (1,110) (1,224)
Royalty (1,728) (1,386) (1,728) (1,386)
Employee expenses (8,626) (10,788) (8,576) (10,650)
Exploration drilling and assay expenditure 1(d) (1,803) - (1,319) -
Exploration consultant expenditure 1(d) (1,447) - (477) -
Cumulative effect of exploration write off 1(d) (4,422) - (750) -
prior to 1 July 2002
Shares issued for native title (616) - - -
AIM admission costs - (1,214) - (1,214)
Provision for diminution in investment in - - (4,081) -
controlled entities
Other expenses from ordinary activities (8,391) (2,666) (6,385) (2,380)
Earnings/(loss) before interest, tax, (6,180) 16,112 (1,545) 12,885
depreciation and amortisation (EBITDA)
Amortisation of mining development expenses 4 (15,641) (22,426) (15,641) (22,426)
Write down of mining development expenses 4 - (5,750) - (5,750)
Depreciation and amortisation expenses 4 (2,750) (2,044) (2,706) (1,884)
Earnings/(loss) before interest and tax (24,571) (14,108) (19,892) (17,175)
(EBIT)
Borrowing costs 4 (5,449) (3,941) (5,078) (3,272)
(Loss) from ordinary activities before (30,020) (18,049) (24,970) (20,447)
income tax
Income tax expense 5 (2,965) - (2,965) -
Net (loss) after income tax (32,985) (18,049) (27,935) (20,447)
Net (loss) attributable to outside equity 252 155 - -
interests
Net (loss) attributable to members of the 21 (32,733) (17,894) (27,935) (20,447)
Company
Total changes in equity attributable to (32,733) (17,894) (27,935) (20,447)
members of the Company other than those
resulting from transactions with owners as
owners
Basic and diluted (loss) per share (cents 35 (8.00) (7.83)
per share)
The above Statements of Financial Performance should be read in conjunction with
the accompanying notes.
Statements of Financial Position as at 30 June 2003
Notes Consolidated Company
30 June 30 June 30 June 2003 30 June 2002
2003 2002 $'000 $'000
$'000 $'000
Assets
Current assets
Cash assets 6 597 9,032 595 9,031
Restricted cash 7 280 - 280 -
Receivables 8 3,688 3,287 3,688 2,939
Other financial assets 15 4,891 - 4,891 -
Inventories 9 4,264 5,151 4,264 5,151
Assets held for resale 10 4,194 5,409 4,094 5,229
Other 11 1,250 1,505 1,219 1,447
19,164 24,384 19,031 23,797
Non-current assets
Restricted cash 7 3,293 1,837 3,293 1,837
Receivables 8 - - 18,240 6,229
Other financial assets 15 - 4,526 16,635 25,239
Property, plant and equipment 12 8,380 9,906 7,253 8,739
Other 11 83 232 83 232
Deferred tax assets 13 - 2,965 - 2,965
Mining properties 14 46,372 58,188 19,224 27,370
58,128 77,654 64,728 72,611
Total Assets 77,292 102,038 83,759 96,408
Liabilities
Current liabilities
Payables 16 10,561 15,905 10,555 15,892
Interest bearing liabilities 17 15,151 12,926 15,151 5,857
Provisions 18 898 1,037 898 1,037
26,610 29,868 26,604 22,786
Non-current liabilities
Payables 16 - - 11,484 11,513
Interest bearing liabilities 17 8,833 9,393 8,833 9,393
Provisions 18 3,876 2,669 3,876 2,669
12,709 12,062 24,193 23,575
Total Liabilities 39,319 41,930 50,797 46,361
Net Assets 37,973 60,108 32,962 50,047
Equity
Contributed equity 19 127,534 118,213 127,534 118,213
Option reserve 20(a) 1,959 430 1,959 430
Accumulated losses 21 (91,520) (58,787) (96,531) (68,596)
Parent entity interest 37,973 59,856 32,962 50,047
Outside equity interest 22 - 252 - -
Total Equity 37,973 60,108 32,962 50,047
The above Statements of Financial Position should be read in conjunction with
the accompanying notes.
Statements of Cash Flows for the year ended 30 June 2003
Notes Consolidated Company
30 June 30 June 30 June 30 June
2003 2002 2003 2002
$'000 $'000 $'000 $'000
Cash Flows from Operating Activities
Cash receipts in the course of operations 63,043 59,968 62,802 59,968
(inclusive of goods and services tax)
Payments to suppliers and employees (63,256) (81,280) (63,268) (80,221)
(inclusive of goods and services tax)
Other cash receipts - 405 - 37
Interest received 292 124 292 123
Borrowing costs paid and gold lease fees (68) (1,842) - (1,842)
Finance charges - finance (340) (270) (340) (270)
leases
- hire (225) (126) (225) (126)
purchase agreements
Net cash flows (used in) operating 33 (554) (23,021) (739) (22,331)
activities
Cash Flows from Investing Activities
Payments in respect of exploration, (13,050) (10,558) (9,984) (7,076)
evaluation and development
Payments for property, plant and equipment (205) (1,749) (205) (1,749)
Cash received from investments sold - 26,736 - 17,669
Payments for investment in listed (365) (4,526) (365) (4,526)
securities
Net funds from controlled entities - - (10,254) 4,894
Cash received from sale of property, plant 982 4,300 982 4,300
and equipment
Net cash flows provided by / (used in) (12,638) 14,203 (19,826) 13,512
investing activities
Cash Flows from Financing Activities
Principal repayments under secured loans - (12,700) - (12,700)
Repayment of convertible loan (7,372) - - -
Restricted cash (1,736) - (1,736) -
Share buy back - (1,066) - (1,066)
Proceeds from borrowings 9,830 9,653 9,830 9,653
Net proceeds from issue of securities 8,493 19,088 8,493 19,088
Principal repayments - finance leases (1,204) (1,078) (1,204) (1,078)
- hire purchase agreements (1,059) (517) (1,059) (517)
Net cash flows provided by financing 4,757 13,380 12,129 13,380
activities
Net increase / (decrease) in cash (8,435) 4,562 (8,436) 4,561
Cash at the beginning of the financial year 9,032 4,470 9,031 4,470
Cash at the end of the financial year 6 597 9,032 595 9,031
Non-cash financing and investing activities 33
Financing facilities 34
The above Statements of Cash Flows should be read in conjunction with the
accompanying notes.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This general purpose financial report has been prepared in accordance with
Accounting Standards, other authoritative pronouncements of the Australian
Accounting Standards Board, Urgent Issues Group Consensus Views and the
Corporations Act 2001.
It is prepared in accordance with the historical cost convention, except for
certain assets which, as noted, are at valuation. Unless otherwise stated, the
accounting policies adopted are consistent with those of the previous year.
These consolidated financial statements have been prepared on a going concern
basis. At 30 June 2003, the consolidated entity's current liabilities exceeded
its current assets by $7.4 million after recording a loss for the twelve months
of $32.7 million.
Note 36 to these financial statements sets out in more detail the financing
arrangements that have been put in place since 30 June 2003.
The Company will be seeking approval from shareholders at the Annual General
Meeting to be held in late November 2003 for the following:
* conversion of the remaining RCF debt of $7 million together with the
extension fee into 92,000,000 fully paid ordinary shares of the Company at $0.08
per share; and
* conversion of the Ocean $7.2 million convertible loan into 90,000,000
fully paid ordinary shares at $0.08 per share as set out in Note 17(4).
Should either or both approvals not be forthcoming from shareholders at the
Annual General Meeting, these amounts will become due and payable.
In the short term, given the current operations, the consolidated entity's
ability to continue operating and its ability to generate a positive cashflow is
dependent on a significant increase in production through development of Paddys
Flat and Paulsens which will require additional debt and equity funding and the
sale of assets held for resale.
The Directors are of the view that shareholders will approve the RCF debt for
equity conversion at the Annual General Meeting and, based on past experience,
that the consolidated entity will be able to secure such additional debt and
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. However, should this not occur there is
significant uncertainty whether the consolidated entity will be able to continue
as a going concern and realise its assets at the amounts stated in the financial
statements. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset and liability amounts
that might be necessary should the entity not continue to be a going concern.
The following accounting policies have been used by the consolidated entity for
the periods presented:
(a) Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of
all entities controlled by St Barbara Mines Limited as at 30 June 2003 and the
results of all controlled entities together are referred to in this financial
report as the consolidated entity. The effects of all transactions between
entities in the consolidated entity are eliminated in full. Outside equity
interests in the results and equity of controlled entities are shown separately
in the consolidated statement of financial performance and statement of
financial position respectively.
Where control of an entity is obtained during a financial year, its results are
included in the consolidated statement of financial performance from the date on
which control commences. Where control of an entity ceases during a financial
year its results are included for that part of the year during which control
existed.
(b) Acquisition of Assets
The purchase method of accounting is used for all acquisitions of assets
regardless of whether equity instruments or other assets are acquired. Cost is
measured as the fair value of the assets given up, shares issued or liabilities
undertaken at the date of acquisition plus incidental costs directly
attributable to the acquisition. Where equity instruments are issued in an
acquisition the value of the instruments is their market price as at the
acquisition date, unless the notional price at which they could be placed in the
market is a better indicator of fair value. Transaction costs arising on the
issue of equity instruments are recognised directly in equity.
Where settlement of any part of cash consideration is deferred, the amounts
payable in the future are discounted to their present value as at the date of
the acquisition. The discount rate used is the incremental borrowing rate,
being the rate at which similar borrowing could be obtained from an independent
financier under comparable terms and conditions.
(c) Recoverable Amount of Non-current Assets
The recoverable amount of an asset is the net amount expected to be recovered
through the cash inflows and outflows arising from its continued use and
subsequent disposal.
Where the carrying amount of a non-current asset is greater than its recoverable
amount, the asset is written down to its recoverable amount. Where net cash
inflows are derived from a group of assets working together, recoverable amount
is determined on the basis of the relevant group of assets. The decrement in
the carrying amount is recognised as an expense in net profit or loss in the
reporting period in which the recoverable amount write-down occurs. The expected
net cash flows included in determining the recoverable amounts of non current
assets are not discounted.
(d) Change in accounting policy for treatment of Mining Properties
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 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).
The following adjustment was made on the statement of financial performance as a
result of this change in accounting policy:
Consolidated Company
$'000 $'000
Cumulative effect of write off of exploration expenditure 4,422 750
incurred prior to 1 July 2002
Current period exploration expenditure written off
- Exploration drilling and assay expenditure 1,803 1,319
- Exploration consultant expenditure 1,447 477
- Other exploration expenditure items 2,225 -
9,897 2,546
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 and parent entity accumulated 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 Company
30 June 2003 30 June 2002 30 June 2003 30 June 2002
$'000 $'000 $'000 $'000
(Restated) (Restated) (Restated) (Restated)
Restatement of consolidated statement of
financial performance (extract)
Loss from ordinary activities before income (20,122) (18,049) (22,424) (20,447)
tax expense
Change in accounting policy (5,476) (4,422) (1,796) (750)
Income tax expense (2,965) - (2,965) -
Net loss after tax (28,563) (22,471) (27,185) (21,197)
Restatement of mining properties
Previously reported carrying amount 46,372 58,188 19,224 27,370
Adjustment for change in accounting policy - (4,422) - (750)
Restated carrying amount 46,372 53,766 19,224 26,620
Restatement of Accumulated Losses
Previously reported carrying amount (91,520) (58,787) (92,450) (68,596)
Adjustment for change in accounting policy - (4,422) - (750)
Restated carrying amount (91,520) (63,209) (92,450) (69,346)
(e) Depreciation and Amortisation of Property, Plant and Equipment
The Directors have considered the economic life of mine buildings, machinery and
equipment with due regard to both the physical life limitations, assessments of
economically recoverable reserves of the mine property at which the items are
located, and to possible future variations in those assessments. The estimated
remaining useful life for all such assets is reviewed regularly with annual
reassessments being made for major items.
The majority of mine buildings, plant and equipment (other than freehold land)
is written off over its expected economic life.
The total net carrying values of mine buildings, machinery and equipment at the
mine property are reviewed regularly and, to the extent by which these values
exceed their recoverable amounts, that excess is fully provided against in the
financial year in which this is determined.
Profits and losses on disposal of property, plant and equipment are taken into
account in determining the result for the year.
(f) Depreciation and Amortisation of Assets Held for Resale
Plant and equipment which is currently surplus to requirements and not used is
not depreciated. When those assets are used, they are depreciated on an hourly
basis. The total carrying value of these assets is not in excess of estimated
market value.
(g) Accounting for Income Tax
Income tax has been brought to account using the liability method of tax effect
accounting. Future income tax benefits relating to tax losses are only
recognised and brought to account to the extent that their realisation is
virtually certain.
Income tax on cumulative timing differences is set aside to the deferred income
tax or the future income tax benefit accounts at the rates which are expected to
apply when those timing differences reverse.
(h) Investments
Investments in listed and unlisted securities, other than controlled entities,
are stated at cost unless, in the opinion of the Directors, a provision for
diminution in value is considered necessary. Income from investments is brought
to account by the consolidated entity when dividends are received. Controlled
entities are accounted for as set out in Note 1(a).
(i) Inventories
Inventories are valued at the lower of cost and net realisable value. The cost
of ore stockpiles and gold stocks includes direct material, direct labour,
transportation costs, and variable and fixed overhead costs relating to mining
activities.
Costs have been assigned to inventory quantities on hand at balance date using
the weighted average basis.
(j) Maintenance and Repairs
Plant of the consolidated entity is required is required to be overhauled on a
regular basis. This is managed as part of an ongoing major cyclical maintenance
program. The costs of this maintenance are charged as expenses as incurred,
except where they relate to the replacement of a component of an asset, in which
case the costs are capitalised and depreciated in accordance with note 1 (e).
Other routine operating maintenance, repair and minor renewal costs are also
charged as expenses as incurred.
(k) Employee Benefits
(i) Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries and annual leave are recognised, and measured
as the amount unpaid at the reporting date at the amounts expected to be paid
when the liabilities are settled. Liabilities for non-accumulating sick leave
are recognised when the leave is taken and measured at the rates paid or
payable.
(ii) Long service leave
The liability for long service leave expected to be settled within 12 months of
the reporting date is recognised in the provisions for employee entitlements and
is measured in accordance with (i) above. The liability for long service leave
expected to be settled more than 12 months from the reporting date is recognised
in the provisions for employee entitlements and measured as the present value of
expected future payments to be made in respect of services provided by employees
up to the reporting date. Consideration is given to the length of service and
the probability of achievement of long service leave anniversary dates.
(iii) Ownership-based remuneration schemes
Ownership-based remuneration is provided to employees via the Employee Option
Plan. Information relating to this scheme is set out in Note REF _Ref46554907 /
r /h 30(e).
No accounting entries are made in relation to the Employee Option Plan until
options are exercised, at which time the amounts receivable from employees are
recognised in the statement of financial position as share capital. The amounts
disclosed for remuneration of directors and executives in Notes 24 and 26 do not
include the assessed fair values of options at the date they were granted.
(l) Leased Assets
Assets acquired under finance leases are included as property, plant and
equipment in the statement of financial position. Finance leases effectively
transfer from the lessor to the lessee substantially all the risks and benefits
incidental to ownership of the leased property. Where assets are acquired by
means of finance leases, the present value of the minimum lease payments is
recognised as an asset at the beginning of the lease term and amortised on a
straight line basis over the expected useful life of the leased asset. A
corresponding liability is also established and each lease payment is allocated
between the liability and finance charge.
Other leases under which all the risks and benefits of ownership are effectively
retained by the lessor are classified as operating leases. Operating lease
payments are charged to expense over the year of expected benefit.
(m) Receivables
A provision is raised for any doubtful debts based on a review of all
outstanding amounts at year end. Bad debts are written off during the year in
which they are identified.
(n) Revenue
Sales revenue represents revenue earned from the sale of gold and is recognised
when title passes at the delivery point.
Revenue on sale of investments and tenements is recognised at disposal.
Interest revenue is recognised when it accrues taking into account interest
rates applicable to financial assets.
(o) Cash Flows
For the purpose of the statements of cash flows, cash includes cash on hand,
deposits held at call which are readily convertible to cash on hand and which
are used in the cash management function on a day-to-day basis, net of
outstanding bank overdrafts.
(p) Foreign Currency
Transactions denominated in a foreign currency are converted at the exchange
rate at the date of the transaction. Foreign currency receivables and payables
at balance date are translated at exchange rates at balance date. Exchange
gains and losses are brought to account in determining the statement of
financial performance for the year.
Exchange gains and losses and hedging costs arising on forward foreign exchange
contracts entered into as hedges of specific commitments are deferred on the
statement of financial position and included in the determination of the amounts
at which the transactions are brought to account. All exchange gains and losses
relating to other hedge transactions are brought to account in the statement of
financial performance in the same year as the exchange differences on the items
covered by the hedge transactions.
Gains and losses on foreign currency transactions that are not accounted for as
specific hedges, if any, are brought to account as they arise and disclosed as
speculative gains or losses.
(q) Trade and Other Creditors
These amounts represent liabilities for goods and services provided to the
consolidated entity prior to the end of the financial year and which are unpaid.
The amounts are unsecured and are usually paid within sixty days of
recognition.
(r) Rehabilitation and Restoration Costs
Provision is made on a straight line basis for the consolidated entity's
estimated liability under specific legislative requirements and the conditions
of its mining leases for future costs expected to be incurred in restoring areas
of interest. The estimated liability is based on the restoration work required,
using existing technology, as a result of activities to date.
(s) Borrowing Costs
Borrowing costs are recognised as expenses in the year in which they are
incurred. Borrowing costs include interest on bank overdrafts, short-term and
long-term borrowings, finance lease charges, the fair value of equity securities
issued in satisfaction of interest and facility fees and amortisation of
establishment costs and facility fees in connection with the arrangement of
borrowings.
(t) Interest Bearing Liabilities
Loans are carried at their principal amounts which represent the present value
of future cash flows associated with servicing the debt. Interest is accrued
over the year it becomes due and is recorded as part of other creditors.
(u) Rounding of Amounts
The Company is of a kind referred to in Class Order 98/0100, issued by the
Australian Securities & Investments Commission, relating to the "rounding off"
of amounts in the financial report. Amounts in the report have been rounded off
in accordance with that Class Order to the nearest thousand dollars, or in
certain cases, to the nearest dollar.
(v) Earnings per Share
(i) Basic earnings per share
Basic earnings per share is determined by dividing net profit after income tax
attributable to members of the Company, excluding any costs of servicing equity
other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account the after income tax effect of
interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for
no consideration in relation to dilutive potential ordinary shares.
2. SEGMENT INFORMATION
The consolidated entity operates predominantly in the gold mining industry in
Australia.
The consolidated entity's head office is in Australia.
3. Revenue
Revenue from operating activities
Revenue from sale of gold 56,111 54,516 56,111 54,516
Revenue from non-operating activities
Proceeds on sale of investments 17 26,727 - 17,669
Proceeds on sale of tenements 35 210 - 10
Proceeds on sale of property, plant and equipment 982 4,300 982 4,300
Interest received 292 124 1,429 353
Other 167 616 - 448
Total revenue from ordinary activities 57,604 86,493 58,522 77,296
4. (LOSS) FROM ORDINARY ACTIVITIES
(Loss) from ordinary activities before income tax
expense includes the following specific net gains
and expenses:
Net Gains
Net gain on disposal of:
- Investments 17 9,221 - 5,709
- Property, plant and equipment 798 2,336 798 2,336
- Tenements - 24 - (176)
Expenses
Cost of gold sales 60,764 59,839 60,764 59,839
Amortisation:
- Mining expenses 15,641 22,426 15,641 22,426
Write down of mining development expenses - 5,750 - 5,750
Write-down of exploration tenements - 3,381 - 3,381
Depreciation:
- Buildings 178 177 178 177
- Plant and equipment 2,572 1,867 2,528 1,707
2,750 2,044 2,706 1,884
Borrowing cost expensed:
- Interest paid 3,547 3,545 3,176 2,876
- Convertible Note borrowing cost 1,337 - 1,337 -
- Finance charges relating to:
- finance leases 340 270 340 270
- hire purchase 225 126 225 126
5,449 3,941 5,078 3,272
Rental of premises 418 303 418 261
Royalties 1,728 1,386 1,728 1,386
Provision for:
- Employee entitlements 832 772 832 772
- Rehabilitation 598 595 598 595
- Inventories 96 22 96 22
Cost/adjustments associated with surplus office (13) (283) (13) (283)
space
5. INCOME TAX
(a) Tax Expense
The amount of income tax expense for the financial
year differs from the amount calculated on the loss.
The differences are reconciled as follows:
Loss from ordinary activities before income tax (30,020) (18,049) (24,970) (20,447)
expense
Income tax calculated @ 30% (2002 - 30%) 9,006 5,415 7,491 6,134
Tax effect of permanent differences:
- Provision for diminution in investments - - (1,224) -
- Legal and other capital expenditure (132) (370) (127) (351)
- Sundry items (20) (2) (20) (2)
(152) (372) (1,371) (353)
Income tax adjusted for permanent differences 8,854 5,043 6,120 5,781
Net future income tax benefit not brought to account (8,854) (5,043) (6,120) (5,781)
Future income tax benefits previously recognised, now (2,965) - (2,965) -
written off
Income tax (expense) (2,965) - (2,965) -
(b) Unbooked future income tax benefit
Future income tax benefit attributable to operating
losses 26,401 16,595 21,617 15,775
Less: offset to provision for deferred income tax (4,248) (8,592) (3,870) (8,592)
22,153 8,003 17,747 7,183
Future income tax benefit attributable to timing 1,615 1,496 1,615 1,496
differences not brought to account
Future income tax benefit not brought to account 23,768 9,499 16,132 8,679
These benefits will only be obtained if:
(i) the consolidated entity derives future assessable income of a
nature and of an amount sufficient to enable the benefit from the deductions for
the loss to be realised; or
(ii) the consolidated entity continues to comply with the conditions
for deductibility imposed by the law; and
(iii) no changes in tax legislation adversely affect the consolidated
entity in realising the benefit from the deductions for the losses.
(c) Tax consolidation legislation
The Company and its wholly-owned Australian subsidiaries have not yet decided to
implement the tax consolidation legislation. The decision will be made prior to
30 June 2004. Accordingly the financial effect of the implementation of the
legislation has not been recognised in the financial statements for the year
ended 30 June 2003.
6. CASH Assets
Current
Current cash on hand 1 1 1 1
Cash on call 596 9,031 594 9,030
597 9,032 595 9,031
7. RESTRICTED CASH
Current
Term deposit (i) 280 - 280 -
Non-Current
Term deposit (i) - 280 - 280
Term deposit (ii) 3,293 1,557 3,293 1,557
3,293 1,837 3,293 1,837
(i) Funds placed on security deposit for lease rental. The lease
expires on 31 December 2003.
(ii) Funds placed on security deposit with Macquarie Bank Limited as
security for performance bonds issued by Macquarie Bank Limited to Department of
Minerals and Petroleum.
8. RECEIVABLES
Current
Trade debtors 2,318 3,287 2,318 2,939
Other debtors 1,370 - 1,370 -
3,688 3,287 3,688 2,939
Non-Current
Non-trade receivables from controlled entities - - 19,600 7,498
Less: provision for non-recovery - - (1,360) (1,269)
- - 18,240 6,229
9. INVENTORIES
Current
Consumables and spares - at cost 1,749 2,320 1,749 2,320
Less: provision for obsolescence (334) (238) (334) (238)
1,415 2,082 1,415 2,082
Ore stockpiles - at cost 1,009 1,336 1,009 1,336
Less: provision for diminution - (826) - (826)
1,009 510 1,009 510
Gold in circuit - at cost 1,840 2,559 1,840 2,559
4,264 5,151 4,264 5,151
10. ASSETS HELD FOR RESALE
Current
Plant and equipment
- Under finance lease 5,261 5,261 5,261 5,261
- Accumulated amortisation (1,261) (365) (1,261) (365)
4,000 4,896 4,000 4,896
Plant and equipment owned
- At cost 2,342 3,559 2,019 3,235
- Accumulated depreciation (2,148) (3,046) (1,925) (2,902)
194 513 94 333
4,194 5,409 4,094 5,229
11. OTHER ASSETS
Current
Prepayments 1,101 1,223 1,070 1,222
Unexpired hire purchase charges 149 225 149 225
Other - 57 - -
1,250 1,505 1,219 1,447
Non-Current
Unexpired hire purchase charges 83 232 83 232
12. PROPERTY, PLANT AND EQUIPMENT
Non-Current
Property, plant and equipment - at cost
Land 1,249 1,255 140 146
Buildings 4,683 4,743 4,683 4,743
Less: Accumulated depreciation (4,300) (4,204) (4,300) (4,204)
383 539 383 539
Plant and equipment 59,319 59,277 59,136 59,094
Less: Accumulated depreciation and provision for (52,571) (51,177) (52,406) (51,052)
diminution
Assets under construction - 12 - 12
Written down value of plant and equipment 6,748 8,112 6,730 8,054
8,380 9,906 7,253 8,739
Reconciliations of the carrying amounts for each
class of property, plant and equipment are set out
below:
Land
Carrying amount at the beginning of year 1,255 456 146 216
Disposals (6) - (6) -
Transfer to/(from) land - 799 - (70)
Carrying amount at the end of the year 1,249 1,255 140 146
Buildings
Carrying amount at the beginning of year 539 739 539 739
Disposals - (6) - (6)
Depreciation (178) (177) (178) (177)
Transfer to/(from) buildings 22 (17) 22 (17)
Carrying amount at the end of the year 383 539 383 539
Plant and equipment
Carrying amount at the beginning of year 8,112 7,562 8,054 7,165
Additions 205 5,908 205 5,908
Disposals (47) (1,958) (47) (2,828)
Depreciation (1,674) (1,867) (1,634) (1,707)
Under construction - 12 - 12
Transfer to/(from) plant and equipment 152 (1,545) 152 (496)
Carrying amount at the end of the year 6,748 8,112 6,730 8,054
8,380 9,906 7,253 8,739
13. DEFERRED TAX ASSETS
Future income tax benefit (relating to tax losses) - 2,965 - 2,965
14. Mining properties
Non-Current
Opening balance 58,188 45,071 27,370 17,736
Direct expenditure 10,558 44,511 6,877 41,028
Acquired tenements 3,164 - 3,164 -
Tenement disposal - (186) - (186)
Provision for diminution - (3,381) - (3,381)
Amortisation charge for the year (15,641) (27,827) (15,641) (27,827)
Write down due to change in accounting policy (see (9,897) - (2,546) -
Note 1(d))
Closing balance 46,372 58,188 19,224 27,370
Mining properties by area of interest:
Areas of interest in the exploration / evaluation
stage:
- at cost 48,734 34,513 14,234 3,695
- write down due to change in accounting (7,352) - - -
policy (see Note 1(d))
41,382 34,513 14,234 3,695
Areas of interest in the development and production phase
- at cost 109,962 109,538 109,962 109,538
- accumulated amortisation (59,075) (42,512) (59,075) (42,512)
- write down due to change in accounting (2,546) - (2,546) -
policy (see Note 1(d))
- provision for diminution (43,351) (43,351) (43,351) (43,351)
4,990 23,675 4,990 23,675
46,372 58,188 19,224 27,370
During the year the Company has reclassified $10.5 million of previously
acquired exploration expenditure from areas of interest in the development and
production phase to areas of interest in the exploration phase.
15. OTHER FINANCIAL ASSETS
Current
Investments in other entities:
- Listed securities - at cost 4,891 - 4,891 -
Non-Current
Investments in other entities:
- Listed securities - at cost (1) - 4,526 - 4,526
Investments in controlled entities:
- Unlisted securities (at cost) - - 179 179
- Listed securities (at cost) (2) - - 20,537 20,534
Provision for diminution - - (4,081) -
- 4,526 16,635 25,239
Listed securities in other entities - market value
The aggregate market value at balance date of
investments in other entities listed on a prescribed
stock exchange is:
Current:
- Listed securities (1) 4,662 - 4,662 -
Non-Current:
- Listed securities (1) - 5,810 - 5,810
Listed securities in controlled entities - market
value
The aggregate market value at balance date of
investments in controlled entities listed on a
prescribed stock exchange is:
Non current:
- Listed securities (2) - - 4,768 15,450
Due to losses carried forward, the amount of tax that would have been paid if
these assets were to be sold at market value at balance date is nil.
At balance date, securities were held in the following listed entities:
(1) Dioro Exploration NL, a gold exploration company. The consolidated
entity held 44,400,000 shares in Dioro Exploration NL at 30 June 2003 (2002:
41,500,000). All of the 44,400,000 shares were sold on 3 July 2003 realising
net proceeds of $4,984,000.
(2) Taipan Resources NL. The consolidated entity held 190,719,338 fully
paid ordinary shares (2002:190,719,338) and nil partly paid shares (2002:
196,142,209). All of the partly paid shares in Taipan Resources NL were
cancelled in February 2003.
16. PAYABLES
Current
Trade creditors and accruals 10,561 15,905 10,555 15,892
Non-Current
Loans from controlled entities - unsecured - - 11,484 11,513
17. INTEREST BEARING LIABILITIES
Current
Lease liability - secured (1) 2,018 3,072 2,018 3,072
Hire purchase liability - secured 1,133 1,285 1,133 1,285
Convertible notes - secured (2) - 7,069 - -
Other loans - secured (3) 12,000 1,500 12,000 1,500
15,151 12,926 15,151 5,857
Non Current
Hire purchase liability - secured 1,528 2,893 1,528 2,893
Other loans - secured (3) - 6,500 - 6,500
Convertible loan - unsecured (4) 7,305 - 7,305 -
8,833 9,393 8,833 9,393
1) 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 with a carrying value of $4,000,000
at 30 June 2003.
2) These convertible notes were repaid in full on 30 November 2002.
3) On 8 January 2002, RCF and the Company, Silkwest Holdings Pty Ltd and
St Barbara Pastoral Co. Pty Ltd entered into a financing facility of $20 million
("RCF Facility"). Each of these companies 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.
Interest of 10 percent per annum calculated daily pursuant to the RCF Facility
is payable.
The RCF Facility provides that, at the election of the Company, the Company may
satisfy a payment obligation for interest by the issue of ordinary shares based
on the weighted average sell price on ASX of the Ordinary Shares on the date the
payment obligation falls due, pursuant to an agreed formula. The Company
elected to pay the interest payment obligation due 30 June 2003 by the issue of
Ordinary Shares. 15,910,922 ordinary shares were issued by the Company to RCF
on 7 July 2003.
The RCF Facility provides RCF with an entitlement to be issued options. The
Company must, at the end of June and December of each period 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 42 months from
the date of issue. The options issued under the RCF Facility are not listed for
trading on ASX.
The RCF Facility was modified and extended on 14 February 2003 such that the
facility of $20 million reduced to $12 million.
$5 million was repaid to RCF on 9 July 2003 on receipt of the proceeds of the
sale of the shares in Dioro Exploration NL. Consequently the RCF Facility was
reduced to $7 million as at that date.
Subject to shareholder approval at a General Meeting, the balance owing of $7
million will be converted at $0.08 per share into fully paid ordinary shares in
the Company. Note 36 - Events occurring after Balance Date sets out details of
the agreement entered into between the Company and RCF on 22 September 2003.
4) On 27 February 2003, the Company announced that it had entered into an
agreement to raise $2,800,000 by way of St Barbara issuing $2,800,000 of
unsecured convertible notes to Ocean Resources Capital Holdings Limited ("Ocean
"). The funds were raised to fund the Paddys Flat acquisition and general
working capital. The repayment date for the convertible notes is 31 December
2007 and carried interest at 12%. The convertible note was convertible, at the
option of Ocean, into 21,538,462 fully paid ordinary shares in the Company at
$0.13 per share. Shares to be issued pursuant to this convertible note were
approved by shareholders at the 6 June 2003 General Meeting.
On 27 June 2003, the Company announced that Ocean had exercised early, at a
price of $0.13 per share, 15,000,000 shares pursuant to the convertible note.
These shares were transferred to a UK institution by Ocean for no consideration
in conjunction with the placement on 26 June 2003.
On 27 February 2003, the Company announced that it had entered into an agreement
to raise $5,600,000 through an unsecured convertible loan from Ocean. The funds
were raised to fund the Paddys Flat acquisition and general working capital.
The repayment date for the convertible loan is 31 December 2007 and carries
interest at 12%. The convertible note is convertible, at the option of Ocean,
into 43,076,923 fully paid ordinary shares in St Barbara at $0.13 per share.
Shares to be issued pursuant to this convertible loan were approved by
shareholders at the 6 June 2003 General Meeting.
On 10 July 2003, the Company announced that the existing convertible note and
convertible loan dated 27 February 2003 had been cancelled and a new convertible
loan had been entered into with Ocean effective 19 June 2003. The face value of
the new unsecured convertible loan from Ocean is $7,200,000, the repayment date
is 19 December 2005 and carries interest at 12%. The convertible loan is
convertible, at the option of Ocean, into 90,000,000 fully paid ordinary shares
in the Company at $0.08 per share. Any shares to be issued pursuant to this
convertible loan will require approval by shareholders at a General Meeting. On
seven business days after shareholder approval at a General Meeting, $2,800,000
of the total face value shall automatically be converted into 35,000,000 fully
paid ordinary shares in the Company at $0.08 per share. The remaining face
value owing will then reduce to $4,400,000. In the event the Company fails to
obtain shareholder approval at a General Meeting within twelve months of the
Issue Date then Ocean may, on not less than sixty business days' notice, require
repayment of the total face value. As at 30 June 2003, $1,370,000 of the
convertible loan had not yet been received (see Note 8) but were received in
August 2003.
Consolidated Company
30 June 30 June 30 June 30 June
2003 2002 2003 2002
$'000 $'000 $'000 $'000
Assets pledged as security
The carrying amounts of assets pledged as security are:
First Mortgage
- Property, plant and equipment 8,380 10,419 7,253 9,072
- Other financial assets 4,891 4,526 25,607 25,239
Finance Lease
- Plant and equipment under finance lease 4,000 4,896 4,000 4,896
Floating Charge
- Cash and restricted cash 4,170 10,869 4,168 10,868
Receivables 3,688 3,287 3,688 2,939
Total assets pledged as security 25,129 33,997 44,716 53,014
18. PROVISIONS
Current
Employee benefits 771 902 771 902
Directors' retirement benefits 98 98 98 98
Surplus leased space 29 37 29 37
898 1,037 898 1,037
Non-Current
Employee benefits 180 108 180 108
Rehabilitation 3,696 2,543 3,696 2,543
Surplus leased space - 18 - 18
3,876 2,669 3,876 2,669
Movements in Provisions
Movements in each class of provision during the financial year, other than
employee benefits, are set out below:
Directors' Surplus Total
retirement leased $'000
benefits space
$'000 $'000
Consolidated and Company
Current
Carrying amount at start of the year 98 37 135
Payments made - (26) (26)
Transfer from non-current - 18 18
Carrying amount at end of the year 98 29 127
Rehabilitation Surplus Total
$'000 leased $'000
space
$'000
Non-Current
Carrying amount at start of the year 2,543 18 2,561
Provision acquired 598 - 598
Additional provision made 555 - 555
Transfer to current - (18) (18)
Carrying amount at end of the year 3,696 - 3,696
19. CONTRIBUTED EQUITY
Ordinary Share Capital
Issued and paid up 127,534 118,213 127,534 118,213
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 of Issue price $'000
shares
30 June 01 Opening balance 216,506,706 98,191
Share buy back (1) (4,568,756) (1,066)
22 Jan 02 Share issue (2) 2,352,403 $0.2125 500
13 Feb 02 Placement (3) 10,909,090 $0.2200 2,400
Share issue expenses - - (113)
9 Apr 02 Share issue (4) 7,058,824 $0.2125 1,500
27 May 02 Placement (5) 60,000,000 $0.2000 12,000
Share issue expenses - - (732)
5 June 02 Placement (6) 27,500,000 $0.2100 5,775
Share issue expenses - - (242)
30 June 02 Balance 319,758,267 118,213
15 July 02 Share issue (7) 1,210,052 $0.2037 246
15 July 02 Share issue (7) 196,562 $0.2263 44
15 July 02 Share issue (9) 1,846,628 $0.2143 396
21 Aug 02 Placement (9) 34,333,332 $0.1650 5,665
Share issue expenses - - (993)
17 Oct 02 Share issue (8) 280,140 $0.1973 55
2 Dec 02 Share issue (7) 1,562,000 $0.0960 150
31 Dec 02 Share issue (7) 1,067,616 $0.0843 90
31 Dec 02 Share issue (7) 4,261,200 $0.1021 435
31 Dec 02 Share issue (7) 437,006 $0.1136 50
31 Jan 03 Share issue (10) 15,000,000 $0.1100 1,650
Share issue expenses - - (83)
17 Feb 03 Share issue (11) 5,600,000 $0.1100 616
14 Mar 03 Correction 500 - -
26 June 03 Share issue (12) 15,000,000 - -
26 June 03 Share issue (13) 15,000,000 $0.0667 1,000
30 June 03 Closing Balance 415,553,303 127,534
(1) During October and November 2001 the company purchased and cancelled
all 4,568,756 fully paid shares on-market being 2% of ordinary share capital.
The buy-back decision was made by the Company on the Board's belief that the
share prices at the time did not reflect the underlying value of the Company's
share capital. The total cost of $1,066,000, was deducted from ordinary share
capital. There is no current on-market buy-back.
(2) Share issue to RCF for RCF Facility establishment fee.
(3) Placement to raise working capital.
(4) Share issue to RCF for the balance of the RCF Facility establishment
fee.
(5) Placement to raise working capital.
(6) Placement to raise working capital.
(7) Share issue to RCF for Facility interest and fees
(8) Share issue in accordance with an agreement with Grimwood Davies Pty
Ltd for conducting a drilling program in the Meekatharra area
(9) Placement to raise working capital
(10) Placement to raise working capital
(11) Share issue on finalisation of Paulsens Native Title agreement
(12) Share issue on part conversion of convertible note - see Note 17 (4)
(13) Placement to raise working capital
20. OPTIONS
(a) Option Reserve
Consolidated Company
30 June 2003 30 June 30 June 30 June 2002
$'000 2002 2003 $'000
$'000 $'000
Option reserve at the beginning of the 430 - 430 -
financial period
Options issued during the financial period 1,529 430 1,529 430
Option reserve at the end of the financial 1,959 430 1,959 430
period
This option reserve arises from 9,703,285 unlisted and 22,166,666 listed options
being issued during the course of the year.
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.
(b) Listed Share Options
The consolidated entity had the following listed share options on issue at 30
June 2003.
Date Details Notes Number of Exercise Price Expiry Date
Options
30 June 2002 Balance 22,163,106 $0.30 29 February 2004
21 Aug 2002 Placement (1) 17,166,666 $0.30 29 February 2004
6 Sept 2002 Financing (2) 5,000,000 $0.30 29 February 2004
30 June 2003 Balance 44,329,772 $0.30 29 February 2004
(1) These options were issued pursuant to the placement of 34,333,332
fully paid ordinary shares. These options enable the holder of each option to
subscribe for one fully paid ordinary share in the Company for every option
held.
(2) These options were issued in satisfaction of a financing fee.
(c) Unlisted Share Options
At 30 June 2003, the consolidated entity had 44,905,632 unlisted share options
on issue.
On 20 October 1995, Shareholders at a general meeting approved the Employee
Share Option Plan (ESOP). The purpose of the ESOP is to provide an incentive to
executive officers on the Company. No new options will be issued in future
under this ESOP.
On 28 November 2001, Shareholders at a general meeting approved a new Employee
Option Plan.
Each unlisted share option entitles the holder to subscribe for 1 ordinary share
on, substantially, the following terms:
(i) each unlisted option entitles the holder to subscribe for 1
ordinary share at the exercise prices set out below;
(ii) the unlisted options are exercisable at any time up to 5.00pm
Perth, Western Australia time on the dates set out below by completing an option
exercise form and delivering it together with the required payment for the
relevant number of ordinary shares in respect of which the unlisted options are
exercised to the registered office of the Company. Any unlisted options not
exercised by that time will lapse.
The unlisted options are not admitted to the official list of ASX.
(iii) Expiry Date Exercise Price No. of Unlisted Options Issue Basis
23 Dec 04 $0.45 5,000,000 Shareholder Approved
23 Dec 04 $0.35 5,000,000 Shareholder Approved
23 Dec 04 $0.25 5,000,000 Shareholder Approved
31 Dec 04 $0.40 500,000 Shareholder Approved
31 Dec 04 $0.40 10,000,000 Shareholder Approved
26 Apr 07 $0.35 6,000,000 Employee Option Plan
17 Jan 08 $0.35 1,575,000 Employee Option Plan
7 Feb 05 $0.2125 157,938 RCF Facility and Shareholder ratified
5 Mar 05 $0.2125 373,893 RCF Facility and Shareholder ratified
2 Apr 05 $0.2125 449,638 RCF Facility and Shareholder ratified
20 May 05 $0.2125 470,589 RCF Facility and Shareholder ratified
20 May 05 $0.2086 36,118 RCF Facility and Shareholder ratified
3 June 05 $0.2125 499,597 RCF Facility and Shareholder ratified
3 June 05 $0.2086 50,894 RCF Facility and Shareholder ratified
3 June 05 $0.2124 88,680 RCF Facility and Shareholder ratified
15 July 05 $0.2125 483,482 RCF Facility and Shareholder ratified
15 July 05 $0.2086 49,252 RCF Facility and Shareholder ratified
15 July 05 $0.2124 241,854 RCF Facility and Shareholder ratified
13 Aug 05 $0.2125 499,597 RCF Facility and Shareholder ratified
13 Aug 05 $0.2086 50,894 RCF Facility and Shareholder ratified
13 Aug 05 $0.2124 249,917 RCF Facility and Shareholder ratified
6 Sept 05 $0.2125 499,597 RCF Facility and Shareholder ratified
6 Sept 05 $0.2086 50,894 RCF Facility and Shareholder ratified
6 Sept 05 $0.2124 249,917 RCF Facility and Shareholder ratified
15 Oct 05 $0.2125 483,482 RCF Facility and Shareholder ratified
15 Oct 05 $0.2086 49,252 RCF Facility and Shareholder ratified
15 Oct 05 $0.2124 241,854 RCF Facility and Shareholder ratified
31 Dec 05 $0.1100 1,000,000 RCF Facility and Shareholder ratified
7 July 06 $0.2125 1,482,677 RCF Facility and Shareholder ratified
7 July 06 $0.2086 151,040 RCF Facility and Shareholder ratified
7 July 06 $0.2124 741,686 RCF Facility and Shareholder ratified
7 July 06 $0.1138 3,177,890 RCF Facility and Shareholder ratified
Total 44,905,632
21. ACCUMULATED LOSSES
Consolidated Company
30 June 2003 30 June 30 June 30 June
$'000 2002 2003 2002
$'000 $'000 $'000
Accumulated losses at the beginning of the financial (58,787) (40,893) (68,596) (48,149)
period
Net profit attributable to members of the Company (32,733) (17,894) (27,935) (20,447)
Accumulated losses at the end of the financial (91,520) (58,787) (96,531) (68,596)
period
22. OUTSIDE EQUITY INTEREST
Outside equity interest in:
- contributed equity 2,403 2,403 - -
- accumulated losses opening balance (2,151) (1,996) - -
- retained loss current period (252) (155) - -
- 252 - -
The outside equity interest arises from the Company's 88.3% interest in Taipan
Resources NL.
23. FINANCIAL INSTRUMENTS
(a) Commodity Contracts
At the end of each financial period, the consolidated entity had committed to
the following gold hedging contracts:
Consolidated Company
30 June 2003 30 June 30 June 30 June
2002 2003 2002
Forwards
- ounces hedged - 4,221 - 4,221
- average price per ounce - $518 - $518
- contract type - Forward - Forward
Hedging was historically undertaken in order to avoid or minimise possible
adverse financial effects of movements in the price of gold. Gold from
production is delivered into forward contracts. The gains and costs of entering
these contracts and any realised or unrealised gains and losses are deferred
until the underlying cash flow occurs.
The unrealised losses deferred at the reporting date and the year to which they
relate are set out below:
Consolidated Company
30 June 2003 30 June 30 June 30 June
$'000 2002 2003 2002
$'000 $'000 $'000
Less than a year - 176 - 176
These unrealised losses are measured by comparing the contracted price to the
spot gold price at balance date. The amounts disclosed above are only
indicative of the amounts which may ultimately be realised.
(b) Credit Risk Exposures
The credit risk on financial assets of the consolidated entity which have been
recognised, other than investments in shares, is generally the carrying amount,
net of any provisions for doubtful debts.
(c) Interest Rate Risk Exposures
The consolidated entity's exposure to interest rate risk and the effective
weighted average interest rate by maturity periods is set out in the following
tables. Exposures arise predominantly from assets and liabilities bearing
variable interest rates as the consolidated entity intends to hold fixed rate
assets and liabilities to maturity.
Fixed interest maturing in:
Floating 1 year or less Over 1 to 5 Non-interest Total
Interest rate $'000 years bearing $'000
$'000 $'000 $'000
30 June 2003
Financial assets
Cash 596 - - 1 597
Restricted cash 3,573 - - - 3,573
Receivables - - - 3,688 3,688
Investments - - - 4,891 4,891
- -
4,169 - - 8,580 12,749
Weighted average 4.60% - - - -
interest rate
Financial
liabilities
Trade & other - - - (10,561) (10,561)
creditors
Lease liability - (1,242) (776) - (2,018)
Other loans - (13,133) (8,833) - (21,966)
- (14,375) (9,609) (10,561) (34,545)
Weighted average - 9.93% 11.18% - -
interest rate
Net financial 4,169 (14,375) (9,609) (1,981) (21,796)
assets/
(liabilities)
30 June 2002
Financial assets
Cash 9,031 - - 1 9,032
Restricted cash 1,837 - - - 1,837
Receivables - - - 3,287 3,287
Investments - - - 4,526 4,526
10,868 - - 7,814 18,682
Weighted average 3.88% - - - -
interest rate
Financial
liabilities
Trade & other - - - (15,905) (15,905)
creditors
Lease liability - (1,055) (2,017) - (3,072)
Other loans - (9,854) (9,393) - (19,247)
- (10,909) (11,410) (15,905) (38,224)
Weighted average - 11.13% 9.94% - -
interest rate
Net financial 10,868 (10,909) (11,410) (8,091) (19,542)
assets/
(liabilities)
Reconciliation of Net Financial Assets to Net Assets 2003 2002
$'000 $'000
Net financial assets above (21,796) (19,542)
Non-financial assets and liabilities
- Inventories 4,264 5,151
- Assets held for resale 4,194 5,409
- Property, plant and equipment 8,380 9,906
- Other assets 1,333 1,737
- Provisions (4,774) (3,706)
- Deferred tax assets - 2,965
- Exploration, evaluation and development 46,372 58,188
Net assets per statement of financial position 37,973 60,108
(d) Net Fair Value of Financial Assets and Liabilities
(i) On-Balance Sheet
The net fair value of cash and cash equivalents and non-interest bearing
monetary financial assets and financial liabilities of the consolidated entity
approximates their carrying value. The net fair value of other monetary
financial assets and financial liabilities is based upon market prices.
(ii) Off-Balance Sheet
For forward exchange and commodity contracts, the net fair value is taken to be
the unrealised gain or loss at balance date calculated by reference to the
current forward rates for contracts with similar maturity profiles.
The consolidated entity has potential financial liabilities that may arise from
certain contingencies disclosed in Note 28. As explained in that note, no
material losses are anticipated in respect of any of those contingencies and the
net fair value disclosed is the Directors' estimate of amounts which would be
payable by the consolidated entity as consideration for the assumption of those
contingencies by another party.
The carrying amounts and the net fair values of financial assets and liabilities
at balance date are:
2003 2002
Carrying Net Fair Carrying Net Fair
Amount Value Amount Value
$'000 $'000 $'000 $'000
On balance sheet financial
instruments
Financial assets
- Cash and restricted cash 4,170 4,170 10,869 10,869
- Receivables 3,688 3,688 3,287 3,287
- Traded investments 4,891 4,662 4,526 5,810
12,749 12,520 18,682 19,966
Financial liabilities
- Payables 10,561 10,561 15,905 15,905
- Lease liability 2,018 2,018 3,072 3,072
- Other loans 21,966 21,966 19,247 19,247
34,545 34,545 38,224 38,224
Off balance sheet financial
instruments
Financial liabilities
- Gold forwards loss - - - 176
24. REMUNERATION OF DIRECTORS
Consolidated Company
30 June 2003 30 June 30 June 30 June 2002
$ 2002 2003 $
$ $
Income paid or payable, or otherwise made 719,049 764,269 656,592 601,861
available, to Directors by entities in the
consolidated entity and related parties in
connection with the management of affairs
of the Company or its controlled entities
The 2003 consolidated remuneration includes Director remuneration for Directors
of Taipan Resources NL totalling $62,457 (2002: $162,408).
No options were granted to Directors during the year ended 30 June 2003. The
amounts disclosed for remuneration of Directors does not include the assessed
fair values of options granted to directors during the year ended 30 June 2002.
The number of the Company's Directors whose total income from the Company or
related parties was within the specified bands are as follows:
30 June 2003 30 June 2002
Number Number
$0 - $9,999 1 1
$10,000 - $19,999 - 1
$50,000 - $59,999 1 1
$100,000 - $109,999 1 -
$260,000 - $269,999 - 1
$270,000 - $279,999 - 1
$550,000 - $559,999 1 -
25. RETIREMENT BENEFITS OF DIRECTORS
No benefits have been paid to Directors in connection with their retirement as a
Director of St Barbara Mines Limited. The Company has made a provision for
Non-Executive Directors' retirement benefits based on the last three years of
Directors' fees paid (see Note 18).
26. REMUNERATION OF EXECUTIVES
Consolidated Company
30 June 2003 30 June 30 June 30 June
$ 2002 2003 2002
$ $ $
Remuneration received, or due and receivable, from 2,187,084 1,650,263 2,187,084 1,525,655
entities in the consolidated entity and related
parties by Australian - based executive officers
(including executive directors) whose remuneration
was at least $100,000
Executive remuneration for the year ended 30 June 2003 includes executive
officers remuneration of Taipan Resources NL totalling $nil (2002 : $124,608).
The amounts disclosed for remuneration of executive officers does not include
the assessed fair values of options granted to executive officers during the
year ended 30 June 2002 or the year ended 30 June 2003. Details of options
issued to executives are set out in the Directors' Report.
The number of executive officers of the consolidated entity and related parties
included in these figures are shown below in their relevant income bands:
Consolidated and Company
30 June 30 June
2003 2002
$100,000 to $109,999 - 1
$120,000 to $129,999 - 1
$140,000 to $149,999 1 -
$150,000 to $159,999 1 -
$160,000 to $169,999 2 2
$170,000 to $179,999 1 -
$190,000 to $199,999 - 1
$210,000 to $219,999 1 -
$230,000 to $239,999 1 -
$240,000 to $249,999 - 1
$260,000 to $269,999 - 1
$270,000 to $279,999 - 1
$370,000 to $379,999 1 -
$550,000 to $559,999 1 -
27. REMUNERATION OF auditors
Consolidated Company
30 June 30 June 30 June 30 June
2003 2002 2003 2002
$ $ $ $
During the year the auditor of the Company, and
its related practices earned the following
remuneration:
PricewaterhouseCoopers
Remuneration for audit or review of the financial 82,000 58,000 76,000 52,000
reports of the Company or any entity in the
consolidated entity
Remuneration for other services:
- Taxation service and general advice 11,800 65,029 11,800 65,029
- AIM Listing - 181,150 - 181,150
93,800 304,179 87,800 304,179
28. CONTINGENT LIABILITIES
Consolidated Company
30 June 30 June 30 June 30 June
2003 2002 2003 2002
$'000 $'000 $'000 $'000
Details and estimated maximum amounts of
contingent liabilities, for which no provisions
are included in the accounts, are as follows:
(a) Guarantees and Undertakings
(i) The Company has given undertakings
to two of its controlled entities that it
intends to provide the necessary financial or
other support to enable them to meet their
obligations as and when they fall due
(ii) Indemnity to the Company's bankers in 3,262 1,492 3,262 1,492
respect of guarantees provided by the bankers
to the Western Australian Department of
Minerals and Energy - see Note 7
(iii) Security guarantees given to the 30 333 30 218
Western Australian Department of Minerals and
Energy
(b) Native Title
It is possible that Native Title, as defined in the Native Title Act 1993, may
be established over land in which the consolidated entity has an interest. The
Consolidated entity has received several claims from interested parties to this
effect. It is impossible at this stage to quantify the impact (if any) these,
or any future claims, may have on the operations of the Consolidated entity.
The outstanding claims remained unresolved at balance date, and negotiations are
continuing.
(c) Litigation
(i) Westgold
In late September 2000, a demand was made against the Company by Westgold
Resources NL ("Westgold") alleging a loss and damage in the sum of $7,581,768.
A Writ of Summons was issued by Westgold against the Company in the Supreme
Court of Western Australia in CIV 2427 of 2000 on 20 October 2000.
The alleged claim by Westgold arose from a series of share transactions in the
Company shares which took place between May and August 1997 as follows:
* On 12 May 1997, Westgold purchased 10,350,000 St Barbara shares
at $0.72 per share from Mr Woss who was a director of the Company at the time ("
Woss Shares"). This share purchase took the total shares owned in the Company
by Westgold to 23,898,951 (approximately 13 percent of the Company equity at the
time) at a total cost of $18.4 million.
* On 9 July 1997, Westgold sold all of its shareholding in the
Company (which included the Woss Shares) to Montleigh Investments Pty Ltd, a
company associated with Mr Ross Atkins who was a director of the Company at the
time. The total sale consideration was $19.1 million. Approximately $8.4
million of the sale consideration was due to be paid by 30 June 1998. During
1998, Montleigh Investments Pty Ltd defaulted on payment of the deferred
consideration and Westgold recovered $1.6 million of the deferred consideration.
In these proceedings Westgold has sought to recover the balance of the deferred
consideration plus interest from the Company and Mr Woss.
The main components of Westgold's statement of claim against the Company in this
Supreme Court Action are as follows:
* An alleged breach of section 1001A(2) of the Corporations Act
in that the Company allegedly contravened the ASX Listing Rules by failing to
notify the ASX of information alleged to have been known to it on or before 30
April 1997 (being a date prior to Westgold's purchase of the Woss Shares). It
is Westgold's contention that certain information, if published, was information
that a reasonable person would expect to have a material effect on the price or
value of the Company's shares.
* An alleged contravention of the previous section 995(2) of the
Corporations Law (being a misleading or deceptive statement made in relation to
securities in the legislation prior to the current Corporations Act) which
Westgold allege to have occurred by public releases made on or about 30 April
1997. Westgold allege that these public releases represented that, save for
certain matters, the Company's operations were proceeding satisfactorily and
with record levels of gold production in the ordinary course of operations and
that there was no further adverse factors affecting or likely to affect the
Company's operations or financial position. Westgold's contention is that this
was misleading and deceptive in that, in its contention:
- the Company's operations were not proceeding satisfactorily and the
Company had not overcome and was not overcoming operational and financial
difficulties from which it had suffered;
- there were many adverse factors affecting and likely to affect the
Company's operations and financial position;
- the record production level in the relevant quarter was the result of
an abnormal occurrence;
- the Company was aware of a reason or factor which likely would
preclude the establishment of a viable mining operation at certain of the
Company's tenements and which likely would require revision of the Company's
published gold reserves for those tenements.
All of these allegations are denied by St Barbara and the claim is being
robustly defended. St Barbara have joined all of the directors who were
directors of St Barbara at the time to the action.
An important issue concerns the Company's insurance arrangements. The Company
was insured during the relevant period for director's and officers' liability of
the nature in respect of which the Westgold proceedings have been issued,
however, uncertainties currently exist as to whether or not this insurance cover
will be available to the Company in the event that it is unsuccessful in this
litigation as the insurer is denying policy liability.
The best case scenario for the Company is to be wholly successful in its defence
and thereby have no liability. The maximum possible liability for the Company
(without any contribution from former directors, insurers or insurance brokers)
would be for the entire loss alleged by Westgold (being approximately $7.5
million plus interest to the date of judgement calculated at 8 percent, together
with legal costs). The Company intends, as part of its defence, to argue that
should it be found liable (which it denies) then certain contribution orders
should be made in relation to third parties and that, in addition, the Company
is of the view that Westgold must, in any event, apportion any loss it incurred
as between the sale of the Woss Share and other St Barbara shares held by
Westgold which were sold simultaneously with the Woss Shares. An unsuccessful
party will usually also be liable for its own and the other party's legal costs.
The matter is yet to be entered for trial.
The Company has incurred legal costs to date in the order of $600,000. It is
possible that the Westgold litigation may not proceed to trial for a further 12
months, in which case, the Company in defending this action may incur further
legal costs in the order of $750,000 to $1 million, which costs could escalate
in the event that costs were awarded against the Company or the trial judge's
decision were to be appealed. It should be emphasised that none of the current
Directors of the Company were directors of the Company at the time that the
above share transactions took place.
(ii) Kingstream
On 2 July 2002, Kingstream Steel Limited (Subject to Deed of Company
Arrangement) commenced proceedings in the Supreme Court of Western Australia
against the Company and Zygot Ltd. Kingstream alleges it has a claim against
the Company and Zygot Ltd arising from the withdrawal of three mining lease
applications, which applications are alleged to be part of the subject matter of
an Option Deed between the Company and Kingstream dated 26 March 1997 as
supplemented by a Deed dated 20 January 1998 and a letter dated 29 January 1999
from the Company's lawyers to Kingstream. Kingstream exercised the option in
February 1999.
Kingstream alleges in essence that the Company and Zygot Ltd breached the
express or implied terms of the Option Deed by causing or allowing the MLA's to
be withdrawn.
The proceedings are at an early stage and have been, and will continue to be,
defended. However, on the basis of expert advice received the Company considers
its potential exposure in relation to this claim to have a value (including
costs) of less than $200,000.
29. COMMITMENTS FOR EXPENDITURE
Consolidated Company
30 June 2003 30 June 30 June 30 June
$'000 2002 2003 2002
$'000 $'000 $'000
(a) Exploration 9,361 9,181 8,114 7,855
In order to maintain rights of tenure to mining
tenements, the consolidated entity is required to
outlay in 2003/04 for tenement rentals and minimum
exploration expenditure requirements of the Western
Australian Department of Minerals and Energy. This
commitment in 2003/04 will continue for future years
with the amount dependent upon tenement holdings
(b) Hire Purchase Commitments
Analysis of hire purchase commitments:
- Payable not later than 1 year (refer Note 1,133 1,285 1,133 1,285
17)
- Payable later than 1 year, not later than 5 1,528 2,893 1,528 2,893
years (refer Note 17)
2,661 4,178 2,661 4,178
These commitments relate to plant and equipment and
are based on the cost of the vehicles and are
payable over a period of up to 48 months.
(c) Finance Lease Commitments
Analysis of finance lease commitments:
Payable not later than 1 year 1,368 1,395 1,368 1,395
Payable later than 1 year, not later than 5 years 855 2,299 855 2,299
Deduct future charges on finance leases (205) (622) (205) (622)
Provide for as a liability 2,018 3,702 2,018 3,702
Representing lease liabilities:
Current (refer Note 17) 2,018 3,072 2,018 3,072
Lease payments are based on the cost of the
equipment. At 30 June 2003, the Company has the
option to purchase the equipment upon a residual
payment of $440,000.
Analysis of Non-Cancellable Operating Lease 371 371
Commitments
Payable not later than 1 year - 408 - 408
Payable later than 1 year, not later than 2 years - 204 - 204
Payable later than 2 years, not later than 5 years - - - -
371 612 371 612
The non-cancellable operating lease commitments are
the net rental payments associated with rental
properties. A provision for excess lease space,
refer to Note 18, has been recognised on the
statement of financial position.
30. EMPLOYEES
(a) Employment Benefit Liabilities
Provision for employee benefits and Directors'
benefits and related on-cost liabilities
- Current (Note 18) 869 1,000 869 1,000
- Non-current (Note 18) 180 108 180 108
1,049 1,108 1,049 1,108
Number Number Number Number
2003 2002 2003 2002
(b) Number of Employees
Number of employees at financial year end 66 116 66 116
(c) Superannuation
The Company participates in an "accumulation" superannuation plan under which
all employees are entitled to lump sum benefits on retirement, disability or
death. The Company contributes various percentages of wages and salaries to the
plan. The contributions made are legally enforceable. No actuarial assessment
of the plan has been made as such assessments are inappropriate to an "
accumulation" plan. The assets of the plan are sufficient to satisfy all
benefits that have vested under the plan in the event of its termination, or in
the event of voluntary or compulsory termination, of the employment of each
employee.
(d) Employee Share Option Plan
Shareholders approved an Employee Share Option Plan on 20 October 1995 ("ESOP").
This ESOP entitles management who meet incentive objectives to apply for options
to purchase shares in the Company. There is no vesting period for these options
and accordingly employees can exercise these options at any time after they have
been issued. These options are automatically cancelled when the employee leaves
the Company. Details of options on issue under this ESOP are set out in Note 20
(c) (iii). No new options will be issued under this ESOP.
(e) Employee Option Plan
Shareholders approved an Employee Option Plan on November 2001. A total of
1,775,000 options were issued under this plan on 17 January 2003 to 11
employees. There is no vesting period for these options and accordingly
employees can exercise these options at any time after they have been issued.
These options are automatically cancelled when the employee leaves the Company.
Details of the options on issue at 30 June 2003 under this plan are set out in
Note 20 (c) (iii).
31. RELATED PARTIES
(a) Directors
The names of persons who were Directors of the Company at any time during each
year are as follows:
S. W. Miller
G. B. Speechly
H. G. Tuten
K. A. Dundo
Mr J.T. McClements resigned as an alternative director to Mr H.G. Tuten on 10
July 2003.
(b) Remuneration and Retirement Benefits
Information on remuneration and retirement benefits of Directors is disclosed in
Notes 24 and 25 respectively.
(c) Loans to Directors and Director-Related Entities
There were no loans to Directors of entities in the consolidated entity and
their director-related entities during each of the years ended 30 June 2003
(2002: nil)
(d) Other Transactions with Directors of the Company and their
Director-Related Entities
The aggregate amounts brought to account in respect of the following types of
transactions with Directors of entities in the consolidated entities and their
Director related entities were:
Consolidated and Company
Director Notes 30 June 30 June
2003 2002
$ $
S. W. Miller - -
G.B. Speechly - -
K.A. Dundo (1) 212,493 887,227
H.G. Tuten (2) 3,249,142 2,291,918
(1) Paid to Clayton Utz for legal services. Mr Dundo was a partner of
Clayton Utz.
(2) Paid to RCF by way of issuance of shares and options as required
under the RCF Facility. Mr Tuten is the Chairman of RCF Management L.L.C. the
management company of RCF.
(e) Transactions of Directors and Director-Related Entities
Concerning Shares or Share Options
Relevant interests in shares and options of the Company held by directors of the
Company and consolidated entity or their director-related entities in the
Company:
Consolidated and Company
30 June 2003 30 June 2002
$ $
Number Number
Ordinary Shares - fully paid
Directors:
S. W. Miller (1) - -
G. B. Speechly 20,000 20,000
K. A. Dundo 100,000 100,000
H. G. Tuten (2) - -
Connected Persons:
Strata Mining Corporation Limited (1) 32,200,000 36,200,000
RCF (2) 18,146,163 9,411,227
(1) Mr S.W. Miller is a director and shareholder of Strata Mining
Corporation NL which holds a relevant interest in the ordinary share capital of
St Barbara Mines Limited.
(2) Mr H.G Tuten is the Chairman of RCF Management L.L.C., the
management company of RCF.
Options
Directors: Date of Grant Shares under Option Exercise Price Expiry
($)
S.W. Miller 23 Dec 1999 2,500,000 $0.25 23 Dec 2004
2,500,000 $0.35 23 Dec 2004
2,500,000 $0.45 23 Dec 2004
10,000,000 $0.40 31 Dec 2004
17,500,000
G.B. Speechly 30 Nov 2001 500,000 $0.40 31 Dec 2004
K.A. Dundo - - - -
H.G. Tuten (1) - - - -
Connected Persons:
RCF (1) 12 Feb 2002 157,938 $0.2125 7 Feb 2005
5 Mar 2002 373,893 $0.2125 5 Mar 2005
2 April 2002 449,638 $0.2125 2 April 2005
17 May 2002 470,589 $0.2125 20 May 2005
17 May 2002 36,118 $0.2086 20 May 2005
4 June 2002 499,597 $0.2125 3 June 2005
4 June 2002 50,894 $0.2086 3 June 2005
4 June 2002 88,680 $0.2124 3 June 2005
15 July 2002 483,482 $0.2125 15 July 2005
15 July 2002 49,252 $0.2086 15 July 2005
15 July 2002 241,854 $0.2124 15 July 2005
13 Aug 2002 499,597 $0.2125 13 Aug 2005
13 Aug 2002 50,894 $0.2086 13 Aug 2005
13 Aug 2002 249,917 $0.2124 13 Aug 2005
6 Sept 2002 499,597 $0.2125 6 Sep 2005
6 Sept 2002 50,894 $0.2086 6 Sep 2005
6 Sept 2002 249,917 $0.2124 6 Sep 2005
15 Oct 2002 483,482 $0.2125 15 Oct 2005
15 Oct 2002 49,252 $0.2086 15 Oct 2005
15 Oct 2002 241,854 $0.2124 15 Oct 2005
20 Feb 2003 1,000,000 $0.1100 31 Dec 2005
7 Jan 2003 1,482,677 $0.2125 7 July 2006
7 Jan 2003 151,040 $0.2086 7 July 2006
7 Jan 2003 741,686 $0.2124 7 July 2006
7 Jan 2003 3,177,890 $0.1138 7 July 2006
11,830,632
(1) Mr Tuten is the Chairman of RCF Management L.L.C., the
management company of RCF.
The options granted to RCF were in consideration for facility fees. All other
options were granted for no consideration by the Company. There are no voting,
conversion or dividend rights related to these options.
(f) Transactions with entities in the wholly-owned group
St Barbara Mines Limited is the parent entity in the wholly-owned group
comprising the Company and its wholly-owned subsidiaries.
During the year the Company advanced loans of $229,776 (2002: $709,530) to
entities in the wholly-owned group. Repayments and advances were received of
99,000 (2002: $9,243,788) from entities in the wholly-owned group. The Company
provided accounting and administrative assistance free of charge to all its
wholly-owned subsidiaries.
Loans payable to and advanced from wholly-owned subsidiaries to the Company are
interest free.
(g) Transactions with non-wholly owned entities in the consolidated
entity
The Company provides funding to Taipan Resources NL, a controlled entity but not
wholly owned, as follows:
30 June 2003 30 June
$'000 2002
$'000
Balance at beginning of financial year 4,877 -
- net funding advanced for exploration and all other 2,842 4,647
activities on normal commercial terms
- cost of shares issued by the Company to PKKP for Native 616 -
Title Agreement
- funding advanced for repayment of convertible note 7,372 -
- interest 1,141 230
16,848 4,877
The amount owing by Taipan Resources NL is secured, and bears interest at 10%
per annum.
(h) Amounts receivable from and payable to entities in the
wholly-owned group and controlled entities
Consolidated
30 June 2003 30 June
$'000 2002
$'000
Aggregate amounts receivable at balance date from:
Non-current:
Controlled entities 16,848 4,877
Entities in the wholly-owned group 2,752 2,621
Less provision for doubtful receivables (1,360) (1,269)
18,240 6,229
Aggregate amounts payable at balance date to:
Non-current:
Entities in the wholly-owned group 11,484 11,513
(i) Amounts receivable from Director Related entities
At 30 June 2003, the Company had a receivable of $1,067,000 (2002: nil) owing by
Defiance Mining Corporation. Mr S. Miller and Mr K Dundo were appointed
directors of Defiance Mining Corporation on 25 June 2003. All of these funds
were received after 30 June 2003.
32. INVESTMENTS IN CONTROLLED ENTITIES
The consolidated entity consists of the Company and its wholly-owned controlled
entities as follows.
Equity holding Cost of Company's investment
Name of entity Class of June 2003 June 2002 June 2003 June 2002
Shares % % $'000 $'000
Australian Eagle Oil Co. NL Ordinary 100 100 179 179
St Barbara Pastoral Co. Pty Ltd Ordinary 100 100 - -
Capvern Pty Ltd Ordinary 100 100 - -
Eagle Group Management Pty Ltd Ordinary 100 100 - -
Murchison Gold Pty Ltd Ordinary 100 100 - -
Kingkara Pty Ltd Ordinary 100 100 - -
Oakjade Pty Ltd Ordinary 100 100 - -
Regalkey Holdings Pty Ltd Ordinary 100 100 - -
Silkwest Holdings Pty Ltd Ordinary 100 100 - -
Sixteenth Ossa Pty Ltd Ordinary 100 100 - -
Vafitu Pty Ltd Ordinary 100 100 - -
Zygot Limited Ordinary 100 100 - -
Taipan Resources NL Ordinary 88.3 88.3 20,537 20,537
Bushsun Pty Ltd* Ordinary 88.3 88.3 - -
20,716 20,716
* 100% subsidiary of Taipan Resources NL
Each company in the consolidated entity was incorporated in Australia.
33. RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH OUTFLOW FROM
OPERATING ACTIVITIES
Consolidated Company
30 June 30 June 30 June 30 June
2003 2002 2003 2002
$'000 $'000 $'000 $'000
Operating loss after income tax (32,985) (18,049) (27,935) (20,447)
Write down FITB 2,965 - 2,965 -
Depreciation and amortisation 2,750 2,044 2,706 1,884
Development mining expenses - (35,201) - (35,401)
Mining properties change in accounting 9,897 - 2,546 -
policies
Amortisation and write down of mining 15,641 28,176 15,641 28,176
expenses
Provision for diminution in investments - - (4,081) -
Write down of exploration tenements - 3,381 - 3,381
(Profit)/loss on sale of tenements - (24) - 176
Write down of feasibility studies - 924 - 924
(Profit) on sale of property, plant and (798) (2,336) (798) (2,336)
equipment
(Profit)/loss on sale of shares - (9,221) - (5,709)
Borrowing expenses paid with shares 1,015 1,000 1,015 1,000
Convertible note borrowing cost 1,337 - 1,337 -
Interest on Taipan Loan account - - (1,141) (230)
Convertible note interest 303 669 - -
Issuance of options in lieu facility 1,529 430 1,529 430
fees
Changes in assets and liabilities:
- (Increase)/decrease in trade & 969 (1,185) 621 (952)
other debtors
- Decrease/(increase) in 887 1,159 887 1,159
inventories
- Decrease/(increase) in other 172 377 145 377
assets
- Increase in trade & other (4,236) 4,835 (4,338) 5,237
creditors, employee entitlements and
provisions
Net cash inflow from operating (554) (23,021) (739) (22,331)
activities
Non-cash financing and investing activities
The following transactions occurred which affected assets and liabilities which
are not reflected in the Statements of Cash Flows.
Year ended 30 June 2002
The issue of 9,411,227 fully paid ordinary shares at $0.2125 per share to RCF in
satisfaction of the RCF Facility fee.
Year ended 30 June 2003
The issue of 8,734,436 fully paid ordinary shares at various prices ranging from
$0.2263 to $0.0843 to RCF in satisfaction of the RCF Facility fee and interest.
See Note 21.
34. FINANCING FACILITIES
Other than as set out in Note 17(iii) regarding the RCF Facility, neither the
Company nor the consolidated entity have access to lines of credit that were
unutilised.
35. EARNINGS PER SHARE
Consolidated
30 June 30 June
2003 2002
cents/share cents/share
Basic and diluted earnings per share (8.00) (7.83)
$'000 $'000
Retained (loss) for the year used in the calculation of basic earnings per (32,733) (17,894)
share
Number Number
Weighted average number of fully paid ordinary shares on issue during the 409,326,900 228,375,474
year used in the calculation of basic earnings per share
36. EVENTS OCCURRING AFTER balance DATE
Since 30 June 2003 the following has occurred:
* On 3 July 2003, the Company sold all of its 44,400,000 shares
held in Dioro Exploration NL, receiving net proceeds of $4,984,000 resulting in
a profit on sale of $93,000. As a result of the sale of the shares, the
proceeds were used to reduce the debt facility with RCF by $5,000,000.
* On 7 July 2003, the Company issued 15,910,922 fully paid
ordinary shares at $0.0374 per share to RCF in satisfaction of interest on the
debt facility.
* On 7 July 2003, the Company issued the following options with
an expiry date of 7 January 2007 to RCF in satisfaction of the monthly facility
fee:
- 5,834,004 options exercisable at $0.2125;
- 594,308 options exercisable at $0.2086;
- 2,918,376 options exercisable at $0.2124; and
- 17,430,243 options exercisable at $0.1138.
* On 10 July 2003, the Company announced that the convertible
note and convertible loan held by Ocean Resources Capital Holdings Limited had
been restructured effective 19 June 2003. Under the new arrangement, the
existing convertible note and convertible loan are replaced with a convertible
loan with a face value of $7.2 million and a new conversion price of $0.08. The
financial effect of this transaction has been brought to account at 30 June
2003.
* On 10 July 2003, the Company announced that Mr James McClements
had resigned as alternate director to Mr Hank Tuten due to other work
commitments.
* On 22 September 2003, the Company announced that RCF has agreed
to convert its remaining debt ($7.0 million) into equity at $0.08 per share,
thereby extinguishing all secured debt from the Company's balance sheet. The
debt to equity swap by RCF, including a modification fee of 4.5 million shares,
will result in the issue to RCF of 92 million shares at $0.08 per share, taking
its shareholding from 7.9 percent to approximately 23 percent of an enlarged
capital base. The transaction is subject to shareholder approval at the Annual
General Meeting. The transaction is also subject to RCF obtaining various
approvals including the Foreign Investment Review Board. In addition, the
Company will restructure the board to consist of five board members; to include
two nominees of RCF and a new non-executive Chairman. Should this transaction
be approved by shareholders at the Annual General Meeting, the consolidated
entity's current liabilities will reduce by $7.0 million. Should the
transaction not be approved by shareholders the $7.0 million owing to RCF will
be repayable on 30 November 2003.
* On 25 September 2003, the Company announced the placement of up
to 12 million fully paid ordinary shares at $0.08 per share for working capital
to raise up to $960,000 before expenses.
Unless stated otherwise, the financial effects of the above transactions have
not been brought to account at 30 June 2003.
37. RECONCILIATION OF AUSTRALIAN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES TO INTERNATIONAL ACCOUNTING STANDARDS
The financial statements are prepared in accordance with Australian Generally
Accepted Accounting Principles ("GAAP"), which differs in certain respects from
International Accounting Standards ("IAS"). The approximate effect of applying
IAS for the two years ended 30 June 2003, where IAS are materially different to
GAAP, is set out below.
Consolidated
30 June 2003 30 June 2002
$'000 $'000
Net (loss) attributable to members of the Company under GAAP (32,733) (17,894)
Adjustments required under IAS (8,571) -
Net (loss)/profit according to IAS (41,304) (17,894)
Equity under GAAP 37,973 82,900
Accounting for impairment of assets (8,571) -
Accounting for investments in available for sale securities (229) 1,284
Accounting for derivative instruments - (200)
Equity under IAS 29,173 83,984
Accounting for impairment of assets
Under IAS 36 "Impairment of Assets" the Consolidated Entity is required to
record an impairment loss whenever the carrying amount of an asset exceeds its
recoverable amount. Recoverable amount is measured as the higher of the net
selling price and value in use. Net selling price is the amount obtainable
from the sale of an asset in an arm's length transaction and value in use is the
present value of estimated future cash flows expected to arise from continued
use and disposal at the end of its useful life. As a result of this treatment
the Consolidated Entity is required to take an after tax write down of $8.6
million for the year ended 30 June 2003.
Accounting for income taxes
Under IAS deferred tax balances are calculated based on the difference between
the tax base of the asset and the carrying amount of the asset. As a result of
this treatment, at 30 June 2003, a deferred tax liability of $7.2 million (2002:
$11.4 million) would be recognised in relation to the carrying value of
exploration, evaluation and development expenditure acquired in the Taipan
acquisition which has no tax base. This would also result in an increase of $7.2
million (2002: $11.4 million) in exploration, evaluation and development
expenditure acquired. This adjustment has no impact on net profit or net assets
of the consolidated entity.
Accounting for investments in available for sale securities
Under IAS 39 "Financial Instruments: Recognition and Measurement" the
Consolidated Entity is required to classify investments in securities as "held
to maturity", "held for trading" and "available-for-sale". The investments held
by the consolidated entity are classified as available-for-sale and carried at
fair value with unrealised gains and losses reported in equity and recycled to
the Statement of Financial Performance when sold or impaired.
Accounting for derivative instruments
With the adoption of IAS 39 "Financial Instruments: Recognition and Measurement"
on 1 July 2001, the Consolidated Entity is required to measure its financial
instruments at fair value. As the Consolidated Entity's financial instruments
are hedges, the changes in fair value would be deferred through equity until the
hedged transaction occurs and subsequently released to the Statement of
Financial Performance. There is no impact for the year ended 30 June 2003 for
this accounting treatment (2002: $0.2 million). This adjustment has no impact
on the net profit of the Consolidated Entity.
Accounting for rehabilitation and restoration costs
Under IAS rehabilitation and restoration costs incurred during production and
after production stops, should be accrued when the liability is incurred. As a
result of this treatment no additional provision for rehabilitation would be
recognised at 30 June 2003 (2002: $450,000). In 2003 this would have resulted
in a corresponding increase in deferred development expenditure in the
production phase. This adjustment has no material impact on net profit or net
assets of the Consolidated Entity.
DIRECTORS' DECLARATION
In the opinion of the directors of St Barbara Mines Limited:
1. the financial statements and notes as set out on pages 10
to 46 are in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the financial position of
the Company and the consolidated entity's financial position as at 30 June 2003
and of their performance, as represented by the results of their operations and
their cash flows, for the financial year ended on that date; and
(b) complying with Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
2. there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they become due and payable.
This declaration is made and signed in accordance with a Resolution of Directors
and is signed for and on behalf of the Directors by:
STEPHEN W. MILLER
EXECUTIVE CHAIRMAN
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.
Dated at Perth this 30th day of September 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SDSFFSSDSEIU