-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P1vAL0z0Vy5Aph894XzKrQmef80bKK0anK1+WcyMJP4aO+dxF9mTjfyrdi6Z9BmK aFixXxdtxxYIP5LJocphEQ== 0000908634-96-000182.txt : 19960702 0000908634-96-000182.hdr.sgml : 19960702 ACCESSION NUMBER: 0000908634-96-000182 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960417 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960701 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COEUR D ALENE MINES CORP CENTRAL INDEX KEY: 0000215466 STANDARD INDUSTRIAL CLASSIFICATION: SILVER ORES [1044] IRS NUMBER: 820109423 STATE OF INCORPORATION: ID FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08641 FILM NUMBER: 96589212 BUSINESS ADDRESS: STREET 1: 400 COEUR D ALENE MINES BLDG STREET 2: 505 FRONT AVE CITY: COEUR D ALENE STATE: ID ZIP: 83814 BUSINESS PHONE: 2086673511 MAIL ADDRESS: STREET 1: 400 COEUR D ALENE MINES BLDG STREET 2: 505 FRONT AVE CITY: COEUR D'ALENE STATE: ID ZIP: 83814 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------- FORM 8-K/A No.2 Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date or Report (Date of earliest event reported): April 17, 1993 COEUR D'ALENE MINES CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Idaho 1-8641 82-0109423 --------------------------- ------------ --------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification Number) 400 Coeur d'Alene Mines Bldg. 505 Front Avenue Coeur d'Alene, Idaho 83814 ---------------------------------------- ---------- (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (208) 667-3511 -------------- The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Current Report on Form 8-K, filed on April 30, 1996, as set forth in the pages attached hereto: Item 7(a) - Financial Statements of Business Acquired Item 7(b) - Pro Forma Financial Information Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereto duly authorized. COEUR D'ALENE MINES CORPORATION Date: June 28, 1996 By: /s/JAMES A. SABALA ------------------- James A. Sabala Senior Vice President and Chief Financial Officer The current Report on Form 8-K of Coeur d'Alene Mines Corporation ("Coeur") dated April 17, 1996 and filed on April 30, 1996, reported the acquisition of shares of Gasgoyne Gold Mines N.L., an Australian gold company ("Gasgoyne"), representing 35% of Gasgoyne's outstanding shares. Pursuant to the offer, Coeur offered shares of its common stock plus A$96 in exchange for each 100 Gasgoyne shares. Item 7(a) of the report stated that the historical financial statements of Gasgoyne called for by Item 7(a) of Form 8-K and Rule 3-05 of Regulation S-X, and the pro-forma financial information required under Item 7(b) of Form 8-K and Article 11 of Regulations S-X would be filed not later than 60 days after the date on which the Form 8-K was required to be filed. The purpose of this amendment is to file such historical and pro forma financial information. Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The following lists the historical financial statements, set forth in Australian dollars, of Gasgoyne attached hereto: Page(s) ------- Audited consolidated balance sheet as of June 30, 1995, and June 30, 1994, . . . . .. . . . . . . . . . . . . . . . . 5 Audited consolidated statements of operations, and cash flow for the years ended June 30, 1995, and June 30, 1994. . . 6-7 Notes to consolidated financial statements for year ended June 30, 1995 . . . . . . . . . . . . . . . . . . . . . . 8-30 Audited consolidated balance sheet as of June 30, 1994, and June 30, 1993, . . . . .. . . . . . . . . . . . . . . . . 32 Audited consolidated statements of operations, and cash flow for the years ended June 30, 1994, and June 30, 1993. . . 33-34 Notes to consolidated financial statements for year ended June 30, 1994 . . . . . . . . . . . . . . . . . . . . . . 35-55 Unaudited consolidated balance sheets as of March 31, 1996 . 56 Unaudited consolidated statements of operations and cash flow for the nine months ended March 31, 1996, and March 31, 1995. . . . . . . . . . . . . . . . . . . . . . 57-58 -2- (b) PRO FORMA FINANCIAL INFORMATION. The following lists the unaudited pro forma financial information , set forth in U.S. dollars, attached hereto: Page(s) ------- Unaudited pro forma consolidated financial statements . . . 59 Pro forma consolidated balance sheet as of March 31, 1996 . 60-61 Pro forma consolidated statement of operations for the three months ended March 31, 1996 . . . . . . . . . . . . . 62 Pro forma consolidated statement of operations for the year ended December 31, 1995. . . . . . . . . . . . . . . . 63 Notes to unaudited consolidated pro forma financial statements. . . . . . . . . . . . . . . . . . . . . . . . . 64-65 (c) EXHIBITS. None. -3- F I N A N C I A L S T A T E M E N T S GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY FOR THE YEAR ENDED 30 JUNE I995 -4- B A L A N C E S H E E T AS AT 30 JUNE 1995
ECONOMIC ENTITY COMPANY Notes 1995 1994 1995 1994 $ $ $ $ CURRENT ASSETS Cash 11,729,852 12,174,918 3,096,156 2,327,685 Receivables 6 485,760 105,527 247,097 113,679 Investments 7 894,298 93,792 894,298 93,792 Inventories 8 3,837,518 1,789,217 3,837,518 1,789,217 Other 9 710,450 1,605,567 692,390 1,604,853 ----------------------------------------------------------- TOTAL CURRENT ASSETS 17,657,878 15,769,021 8,767,459 5,929,226 ----------------------------------------------------------- NON-CURRENT ASSETS Receivables 10 2,195,295 - 2,195,295 Investments 11 30,010 10 2,010,058 1,851,661 property, plant and equipment 12 3,374,626 3,011,607 3,181,556 2,993,806 Intangibles 13 542,893 827,221 79,431 166,082 Other 14 15,869,346 10,097,303 14,374,635 9,588,455 ------------------------------------------------------------ TOTAL NON-CURRENT ASSETS 22,012,170 13,936,141 21,840,975 14,600,004 ------------------------------------------------------------ TOTAL ASSETS 39,670,048 29,705,162 30,608,434 20,529,230 ------------------------------------------------------------ CURRENT LIABILITIES Creditors and borrowings 15 2,803,636 2,196,515 2,659,410 2,117,436 Provisions 16 7,878,610 4,464,814 7,878,610 4,464,814 Other 17 277,304 331,112 277,304 331,112 ------------------------------------------------------------ TOTAL CURRENT LIABILITIES 10,959,550 6,992,441 10,815,324 6,913,362 ------------------------------------------------------------ NON-CURRENT LIABILITIES Creditors and borrowings 18 67,651 68,626 67,651 68,626 Provisions 19 1,787,135 2,084,463 2,079,150 2,471,500 Other 20 134,255 584,572 134,255 584,572 ------------------------------------------------------------ TOTAL NON-CURRENT LIABILITIES 1,989,041 2,737,661 2,281,056 3,124,698 ------------------------------------------------------------ TOTAL LIABILITIES 12,948,591 9,730,102 13,096,380 10,038,060 ------------------------------------------------------------ NET ASSETS 26,721,457 19,975,060 17,512,054 10,491,170 ============================================================ SHAREHOLDERS' EQUITY Share capital 21 4,997,035 4,082,059 4,997,035 4,082,059 Reserves 22 2,620,449 303,500 2,620,449 303,500 Retained profits 11,751,861 7,897,487 9,894,570 6,105,611 ------------------------------------------------------------ Shareholders' equity attributable to members of the chief entity 19,369,345 12,283,046 17,512,054 10,491,170 Outside equity interests in controlled entity 23 7,352,112 7,692,014 - - ------------------------------------------------------------ TOTAL SHAREHOLDERS' EQUITY 26,721,457 19,975,060 17,512,054 10,491,170 ============================================================
The above balance sheet should be read in conjunction with the accompanying notes. -5- P R O F I T A N D L O S S A C C O U N T FOR THE YEAR ENDED 30 JUNE I995
ECONOMIC ENTITY COMPANY NOTES 1995 1994 1995 1994 $ $ $ $ Operating Revenue 2 33,397,785 23,918,760 32,753,843 24,984,725 ---------------------------------------------------------- Operating profit before income tax 3 13,405,097 8,067,211 13,451,530 9,390,102 Income tax attributable to operating profit 4 4,733,949 2,758,996 4,638,927 3,146,033 ---------------------------------------------------------- Operating profit after income tax 8,671,148 5,308,215 8,812,603 6,244,069 Profit on extraordinary items 5 - 2,680,513 - - ---------------------------------------------------------- Operating Profit and Extraordinary items after income tax 8,671,148 7,988,728 8,812,603 6,244,069 Outside equity interests in operating profit and extraordinary items after income tax (206,870) (47,217) - - ---------------------------------------------------------- Operating profit and extraordinary items after income tax attributable to members ofthe chief entity 8,878,018 8,035,945 8,812,603 6,244,069 Retained profits at the beginning of the financial year 7,897,487 3,035,784 6,105,611 3,035,784 ---------------------------------------------------------- Total available for appropriation 16,775,505 11,071,729 14,918,214 9,279,853 Dividends provided for or paid 32 5,023,644 3,174,242 5,023,644 3,174,242 ---------------------------------------------------------- Retained profits at the end of the financial year 11,751,861 7,897,487 9,894,570 6,105,611 ==========================================================
The above profit and loss account should be read in conjunction with the accompanying notes. -6- S T A T E M E N T O F C A S H F L O W FOR THE YEAR ENDED 30 JUNE 1995
ECONOMIC ENTITY COMPANY Notes 1995 1994 1995 1994 $ $ $ $ CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 32,802,014 23,144,108 32,803,221 23,144,108 Payments to suppliers and employees 16,352,339) (17,542,830) (15,987,164) (17,339,856) Interest received 587,758 262,663 209,074 79,480 Interest and other costs of finance paid (11,115) (25,156) (11,115) (25,156) Income tax paid (2,320,911) (1,097,197) (2,320,911) (1,097,197) Net cash provided by operating activities 30(c) 14,705,407 4,741,588 14,693,105 4,761,379 CASH FLOWS FROM INVESTING ACTIVITIES Payment for mineral exploration and development (9,995,746) (1,821,644) (9,003,242) (1,389,958) Payments for investments (1,094,903) (362,219) (1,062,903) (862,219) Proceeds from sale of investments 112,249 1,255,418 92,599 1,255,418 Payment for property, plant and equipment (858,014) (1,014,500) (652,549) (994,825) Proceeds from sale of equipment 21,896 71,963 21,896 71,963 Loan to other entities (2,195,295) (2,195,295) Net cash used in investing activities (14,009,813) (1,870,982) (12,799,494) (1,919,621) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares 16,450 404,050 16,450 404,050 Payment of prospectus issue expenses - (765,208) - - Repayment of borrowings (31,294) (1,024,168) (31,294) (1,024,168) Dividends paid (1,110,296) (2,516,820) (1,110,296) (2,516,820) Other - outside equity - 10,568,072 Net cash from financing activities (1,125,140) 6,665,926 (1,125,140) (3,136,938) Net increase (decrease ) in cash held (429,546) 9,536,532 768,471 (295,180) Cash at beginning of the financial year 12,159,398 2,622,866 2,327,685 2,622,865 Cash at the end of the financial year 30(a) 11,729,852 12,159,398 3,096,156 2,327,685
The above statement of cash flows should be read in conjunction with the accompanying notes. -7- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of significant accounting policies adopted by the economic entity in the preparation of the financial statements is set out in this note. The financial statements adopted are prepared in accordance with applicable Accounting Standards and other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) and the Corporations Law, including the disclosure requirements of Schedule 5 of the Corporations Regulations. The accounting policies adopted are consistent with those of the previous year. (a) HISTORICAL COST The financial statements have been prepared under the convention of historical cost accounting and do not take into account changing money values. (b) PRINCIPLES OF CONSOLIDATION The consolidated accounts comprise the accounts of the company and its controlled entity, Pilbara Mines N. L. A controlled entity is any entity controlled by the company. Control exists where the company has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with the company to achieve its objectives. All inter-company balances and transactions between entities in the economic entity, including any unrealized profits or losses, have been eliminated on consolidation. Outside equity interests in the results and equity of the controlled entity are shown separately in the consolidated profit and loss account and balance sheet respectively. (c) INTERESTS IN JOINT VENTURES 1. The economic entity's interests in production joint ventures are brought to account by including the amount of: (i) the entity's interest in each of the individual assets employed in the joint ventures; (ii) the entity's share of liabilities incurred by the joint ventures, and (iii) the entity's interest in the expenses incurred in relation to the joint ventures. 2. The entity's interests in exploration joint ventures are brought to account based on the actual expenditure incurred by the entity in contributing to the joint venture exploration programs. (d) REVENUE RECOGNITION (i) Refined gold which is subject to forward sales contracts, is recognized as revenue at the appropriate forward sales price at the point at which the bullion has been refined and is available for delivery. Unrealized gains or losses relating to forward gold sales contracts outstanding at balance date are not reflected in the profit and loss account. (ii) Funds received on the sale of call options, other than in circumstances where the call option is related to forward selling arrangements, are recognized as revenue when received. (e) INCOME TAX Tax effect accounting procedures are followed using the liability method of tax effect accounting, whereby the income tax expense for the year is matched with the accounting result after allowance for permanent differences. -8- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 Future income tax benefits are not brought to account unless realization of the asset is assured beyond reasonable doubt in respect to timing differences, and virtually certain in respect of tax losses. 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 the timing differences reverse. (f) INVENTORIES (i) Ore stockpiles and gold in circuit are valued at the lower of cost and net realisable value. Cost comprises direct material, labor and transportation expenditure incurred in getting inventories to their existing location and condition, together with an appropriate portion of fixed and variable overhead expenditure based on weighted average costs incurred during the period in which such inventories were produced. (ii) Stores and consumable are valued at the lower of weighted average cost and net realisable value. (g) EXPLORATION AND DEVELOPMENT EXPENDITURE Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development, exploration or sale of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence, or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing. Expenditure which no longer satisfies the above policy is written off against profits. When production commences, the accumulated costs for the relevant area of interest are amortized over the life of the area according to the rate of depletion of the economically recoverable reserves. Any costs of site restoration are provided for during the relevant production stages and included in the costs of that stage. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. (h) Restoration, Rehabilitation and Environmental Costs Restoration, rehabilitation and environmental expenditure to be incurred during the production phase of operations is accrued when the need for such expenditure is established and then written off immediately as part of the cost of production of the mine property concerned. There is no provision in the accounts for restoration, rehabilitation and environmental expenditure to be incurred subsequent to the cessation of production at a mine property. (i) PROPERTY, PLANT AND EQUIPMENT (i) The cost of each item of buildings, machinery and equipment held at minesites is written off over its expected economic life. Each item's economic life has due regard both to its own physical life limitations and to present assessments of economically recoverable resources of the mine property at which the item is located, and to possible future variations in those assessments. Estimates of remaining useful lives are made on a regular basis for all assets, with annual reassessments for major items. -9- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 The total net carrying values of mine buildings, machinery and equipment at each mine property are reviewed regularly and, to the extent to which these values exceed their recoverable amounts, that excess is fully provided against in the financial year in which this is determined. (ii) Other assets are depreciated over their expected useful lives on the straight line or reducing balance basis as appropriate. (j) LEASES Leased assets, other than operating leases, where substantially all the risks and benefit incident to the ownership of the asset but not the legal ownership are transferred to the company are classified as finance leases. Finance leases are capitalized recording an asset and a liability equal to the present value of the minimum lease payments, including any guaranteed residual value. Leased assets are amortized over their estimated useful lives. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Lease payments under operating leases are charged as expenses in the periods in which they are incurred. (k) INTANGIBLES Intangibles comprise expenses incurred in connection with the prospectus issued by the company and its controlled entity which are being amortized over a period of 5 years commencing from the date of the successful flotation of the shares. (1) Employee Entitlements The amounts expected to be paid to employees for their pro-rata entitlement to annual and sick leave are accrued annually at current pay rates having regard to experience of employee departures and periods of service. (m) Recoverable Amount of Non-current Assets The recoverable amount of an asset is the net amount expected to be recovered through the net cash inflows 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 revealed to its recoverable amount. Where net cash inflows are derived from a group of assets working together, the recoverable amount is determined on the basis of the relevant group of assets. The expected net cash flows included in determining recoverable amounts of non-current assets are not discounted to their present values. (n) Segmental Information The economic entity operates predominantly in the mining industry in Western Australia. (o) Cash For the purpose of the statement of cash flows, cash includes: (i) cash on hand and in at call deposits with banks or financial institutions, net of bank overdrafts; and (ii) investments in money market instruments with less than 14 days to maturity. -10- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ 2 OPERATING REVENUE Gold sales 31,404,187 20,832,079 31,404,187 20,832,079 Gold call option fee - 1,000,000 - 1,000,000 Sales of investments 131,899 1,255,418 112,249 1,255,418 Sales of plant and equipment 21,896 71,963 21,896 71,963 Interest received 824,077 262,663 209,074 79,480 Sales of tenements - - - 1,250,000 Other income 1.015,726 496,637 1,006,437 495,785 ------------------------------------------------------ 33,397,785 23,918,760 32,753,843 24,984,725 =======================================================
3 OPERATING PROFIT The operating profit before income tax has been determined after crediting and charging the following specific items: (a) Crediting as income Interest received from unrelated corporations 824,077 262,663 209,074 79,480 Profit on share trading - 915,300 - 915,300 Profit on disposal of plant and equipment - 2,014 - 2,014 (b) Crediting as abnormal Profit on sale of tenements - - - 1,172,838 Gold call option fee - 1,000,000 - 1,000,000 ------------------------------------------------------ - 1,000,000 - 2,172,838 ------------------------------------------------------ Income tax at 33% - 330,000 - 717,037 ------------------------------------------------------
-11- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ (c) Charging as expenses Amortisation - assets under finance leases 31,636 28,909 31,636 28,909 - prospectus issue expenses 239,693 144,043 86,652 86,652 - exploration and development expenses 633,106 439,281 633,106 439,281 Depreciation - property, plant and equipment 468,368 396,268 440,758 394,394 Exploration expenditure on areas written off 186,244 - 127,017 Interest paid to unrelated corporations - 12,513 - 12,513 Lease finance charges 11,115 12,643 11,115 12,643 Loss on disposal of investments 13,751 - 11,401 Loss on disposal of plant and equipment 528 - 528 Operating lease rentals 76,881 44,564 58,843 44,564 Provision for employee entitlements 5,557 3,089 5,557 3,089
4 INCOME TAX Operating profit before income tax 13,405,097 8,067,211 13,451,530 9,390,102 ------------------------------------------------------ Income tax @ 33% (1994 - 33%) 4,423,682 2,662,180 4,439,005 3,098,734 Permanent differences - Amortisation of prospectus expenses 79,099 47,534 28,595 28,595 - Other 1,768 38,435 (1,935) 18,704 ------------------------------------------------------ 4,504,549 2,748,149 4,465,665 3,146,033 Effect on deferred income tax of change in tax rate from 33% to 36% 148,928 - 173,262 - Future income tax benefits not recognized 80,472 10,847 - - ------------------------------------------------------ Income tax attributable to operating profit 4,733,949 2,758,996 4,638,927 3,146,033 ======================================================
-12- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ Provision for income tax 5,031,277 2,260,444 5,031,277 2,260,444 Provision for deferred income tax (297,328) 498,552 (392,350) 885,589 ------------------------------------------------------ 4,733,949 2,758,996 4,638,927 3,146,033 ====================================================== The future income tax benefit of $80,472, (1994 - $10,847) attributable to tax losses of the controlled entity has not been brought to account as realization of the benefit is not virtually certain. The benefit will only be obtained if: (a) the controlled 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 realized; (b) the controlled entity continues to comply with the conditions for deductibility imposed by tax legislation; and (c) no changes in tax legislation adversely affect the controlled entity in realizing the benefit from the deductions for the loss.
5 EXTRAORDINARY ITEM Gain on reduction in ownership interest in controlled entity - 2,680,513 - - ------------------------------------------------------
There is no tax attributable to this gain. 6 CURRENT ASSETS - RECEIVABLES Trade debtors 156,320 47,536 153,976 55,833 Other debtors 329,440 57,991 93,121 57,846 ------------------------------------------------------ 485,760 105,527 247,097 113,679 ======================================================
7 CURRENT ASSETS - INVESTMENTS Investment listed on a prescribed stock exchange at cost 894,298 93,792 894,298 93,792 ====================================================== Market value 1,014,228 142,180 1,014,228 142,180 ======================================================
-13- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ 8 CURRENT ASSETS - INVENTORIES Ore stockpiles 3,188,208 1,226,977 3,188,208 1,226,977 Gold in circuit 52,120 161,493 52,120 161,493 Stores and consumables 597,190 400,747 597,190 400,747 ------------------------------------------------------ 3,837,518 1,789,217 3,837,518 1,789,217 ======================================================
9 CURRENT ASSETS - OTHER Prepayments 209,115 74,092 191,055 73,378 Gold on metal account 501,335 1,531,475 501,335 1,531,475 ------------------------------------------------------ 710,450 1,605,567 692,390 1,604,853 ======================================================
10 NON-CURRENT ASSETS - RECEIVABLES Unsecured loans 2,195,295 - 2,195,295 - ------------------------------------------------------ These monies have been advanced in terms of agreements relating to the Awak Mas Gold Project in terms of which the company is required to contribute funds for feasibility studies. Repayment of these loans is contingent upon the Project proceeding and generating adequate positive cash flow.
11 NON-CURRENT ASSETS - INVESTMENTS Investments in unlisted companies at cost 30,010 10 20,010 10 Investment in controlled entity at cost - - 1,990,048 1,851,651 ------------------------------------------------------ 30,010 10 2,010,058 1,851,661 ======================================================
The controlled entity is a listed company. Market value of traceable shares - - 220,000 100,000 Cost of escrowed shares - - 1,750,000 1,750,000
-14- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ 12 NON-CURRENT ASSETS - PROPERTY PLANT AND EQUIPMENT Freehold land at cost 95,789 44,160 95,789 44,160 ------------------------------------------------------ Buildings at cost 697,562 611,531 697,562 611,531 Less: accumulated depreciation 195,606 133,507 195,606 133,507 ------------------------------------------------------ 501,956 478,024 501,956 478,024 ------------------------------------------------------ Plant and equipment, at cost 4,229,069 3,535,095 4,003,929 3,515,420 Less: accumulated depreciation 1,521,025 1,116,125 1,488,955 1,114,251 ------------------------------------------------------ 2,708,044 2,418,970 2,514,974 2,401,169 ------------------------------------------------------ Plant and equipment under lease 143,011 118,311 143,011 118,311 Less: amortisation 74,174 47,858 74,174 47,858 ------------------------------------------------------ 68,837 70,453 68,837 70,453 ------------------------------------------------------ 3,374,626 3,011,607 3,181,556 2,993,806 ======================================================
l3 NON-CURRENT ASSETS - INTANGIBLES Prospectus issue expense 1,106,889 1,151,523 432,993 432,993 Less: amortisation 563,996 324,302 353,562 266,911 ------------------------------------------------------ 542,893 827,221 79,431 166,082 ======================================================
14 NON-CURRENT ASSETS - OTHER Deferred mining costs (a) 1,225,544 4,682,483 1,225,544 4,682,483 Expenditure on mineral exploration evaluation and development (b) 14,643,802 5,414,820 13,149,091 4,905,972 ------------------------------------------------------ 15,869,346 10,097,303 14,374,635 9,588,455 ======================================================
(a) Deferred mining costs represent costs of mining waste in excess of the estimated ratio of waste to ore over the mine life. -15- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ (b) Expenditure on mineral exploration evaluation and development on areas of interest represents: in the exploration or evaluation phase 5,044,713 3,225,491 3,550,002 2,716,643 ------------------------------------------------------ in which production has commenced 11,272,815 3,229,949 11,272,815 3,229,949 Less: accumulated amortisation 1,673,726 1,040,620 1,673,726 1,040,620 ------------------------------------------------------ 9,599,089 2,189,329 9,599,089 2,189,329 ------------------------------------------------------ 14,643,802 5,414,820 13,149,091 4,905,972 ======================================================
The carrying value of mineral exploration, evaluation and development expenditure is dependent upon the discovery and exploitation of commercially viable mineral deposits, the generation of sufficient future income therefrom or sale for at least carrying value. 15 CURRENT LIABILITIES - CREDITORS AND BORROWINGS Bank overdraft - 15,520 - - Trade creditors 1,184,115 1,312,527 1,131,101 1,255,968 Other creditors 1,598,721 847,368 1,507,509 840,368 Lease liabilities 20,800 21,100 20,800 21,100 ------------------------------------------------------ 2,803,636 2,196,515 2,659,410 2,117,436 ======================================================
16 CURRENT LIABILITIES - PROVISIONS Employee entitlements 71,540 65,983 71,540 65,983 Dividends 2,813,230 2,115,357 2,813,230 2,115,357 Income tax 4,993,840 2,283,474 4,993,840 2,283,474 ------------------------------------------------------ 7,878,610 4,464,814 7,878,610 4,464,814 ====================================================== 17 CURRENT LIABILITIES - OTHER Prepaid gold sales and fees 277,304 331,112 277,304 331,112 ======================================================
-16- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ 18 NON CURRENT LIABILITIES - CREDITORS AND BORROWINGS Lease Liabilities 67,651 68,626 67,651 68,626 ======================================================
19 NON-CURRENT LIABILITIES - PROVISIONS Deferred income tax 1,787,135 2,084,463 2,079,150 2,471,500 ======================================================
20 NON CURRENT LIABILITIES - OTHER Prepaid gold sales and fees 134,255 584,572 134,255 584,572 ======================================================
21 SHARE CAPITAL Authorised 100,000,000 shares of 20 cents each 20,000,000 20,000,000 20,000,000 20,000,000 ====================================================== Issued and paid up 46,867,173 ordinary shares of 20 cents each (1994 - 42,292,293) 9,373,435 8,458,459 9,373,435 8,458,459 Discount on shares (4,376,400) (4,376,400) (4,376,400) (4,376,400) ------------------------------------------------------ 4,997,035 4,082,059 4,997,035 4,082,059 ======================================================
21.1 Movement in issued share capital
Number $ Opening balance 42,292,293 8,458,459 Allotted on conversion of options 35,000 7,000 Allotted pursuant to the Dividend Reinvestment Plan final dividend 1994 1,921,819 384,364 interim dividend 1995 815,907 163,181 Bonus share issue 1,802,154 360,431 ------------------------- 46,867,173 9,373,435
-17- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 21.2 At balance date the company had on issue the following unquoted options to subscribe for ordinary shares:
1995 1994 Exercise Price Expiry Date 92,000 92,000 $1.45 28 June 1997 121,000 121,000 $2.24 29 June 1997 795,000 830,000 $0.47 30 June 1987 2,530,000 - $1.30 22 December 1997 100,000 - $1.47 28 April 1998 3,638,000 1,043,000
21.2 At balance date the controlled entity had on issue to persons not being members of the economic entity, 36,510,146 (1994 - 30,420,146) options to subscribe for ordinary shares in the controlled entity at an exercise price of 20 cents per share, exercisable on or before 30 June 1998.
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ 22 RESERVES Share Premium at beginning of year 303,500 68,050 303,500 68,050 On conversion of 35,000 (1994 -872,037) options at a premium of 27 cents per share 9,450 235,450 9,450 235,450 On ordinary shares allotted pursuant to the dividend reinvestment plan: 1,921,819 shares at a premium of 90 cents per share 1,729,637 - 1,729,637 - 815,907 shares at a premium of $1.15 per share 938,293 - 938,293 - ------------------------------------------------------ 2,980,880 303,500 2,980,880 303,500 Utilised for issue of 1,802,154 bonus shares (360,431) - (360,431) - ------------------------------------------------------ 2,620,449 303,500 2,620,449 303,500 ======================================================
23 OUTSIDE EQUITY INTERESTS IN CONTROLLED ENTITY Outside equity interest comprises: Share capital 7,651,816 7,786,813 - - Accumulated losses (299,704) (94,799) - - ------------------------------------------------------ 7,352,112 7,692,014 - - ======================================================
The outside equity interests in the issued and paid-up capital of the controlled entity comprises 50,890,362 (1994 - 51,840,362) fully paid ordinary shares of 20 cents each issued at varying discounts. -18- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 24 COMMITMENTS FOR EXPENDITURE 24.1 Exploration Tenement Leases In order to maintain current rights of tenure to exploration tenements, the company and economic entity is required to outlay lease rentals and to meet the minimum expenditure requirements of the Western Australia Mines Departments. These obligations are subject to renegotiation upon expiry of the exploration leases or when application for a mining licence is made. These obligations are not provided for in the accounts and are payable:
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ Not later than one year 1,777,553 1,556,452 1,285,451 1,022,390 Later than one year, but not later than 2 years 3,393,369 1,777,553 2,942,601 1,285,451 Later than 2 years, but not later than 5 years 6,129,641 5,018,537 5,304,116 3,856,353 ----------------------------------------------------- 11,300,563 8,352,542 9,532,168 6,164,194 ======================================================
The dynamic nature of tenement portfolio management is such that the actual expenditures will vary significantly from these "commitments", depending upon the results of future exploration and farm-out opportunities. 24.2 Joint Venture Commitments The company and economic entity have the following cumulative commitments in respect of exploration joint ventures to which they are farming in and are not provided for in the accounts: Not later than one year 319,000 155,250 270,000 106,250 Later than one year, but not later than 2 years 503,859 101,250 465,000 52,250 Later than 2 years, but not later than 5 years 585,000 38,859 585,000 - ------------------------------------------------------ 1,407,859 256,500 1,320,000 158,500 ======================================================
If a participant to a joint venture defaults and fails to contribute its share of joint venture obligations, then the joint venturers are jointly and severally liable to meet the obligations of the defaulting venturer. In this event the interest in the tenement held by the defaulting participant may be redistributed to the remaining joint venturers. In the event of a default, a commitment exists in respect of expenditure commitments due to be met by the company's defaulting joint venture partner. -19- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ 24.3 Lease Commitments (a) Finance leases - plant and equipment due within 1 year 20,800 30,267 20,800 30,267 due within 1-2 years 35,431 32,102 35,431 32,102 due within 2-5 years 49,168 44,549 49,168 44,549 Minimum lease payments 105,399 106,918 105,399 106,918 Less: future finance charges 16,948 17,192 16,948 17,192 Provided for in the accounts 88,451 89,726 88,451 89,726 (b) Non-cancellable operating leases due within 1 year 101,250 - 101,250 due within 1-2 years 253,125 101,250 253,125 101,250 due within 2-5 year 320,625 573,750 320,625 573,750 Not provided for in the accounts 675,000 675,000 675,000 675,000
24.4 Forward Sales Contracts At balance date the company had outstanding gold par forward sales contracts for 130,695 (1994 - 144,346) ounces at an average price of $588 (1994 - $570) per ounce with monthly deliveries of 2,600 ounces per month to 20 February 2000. 24.5 GOLD CALL OPTION At balance date the company had outstanding a gold call option expiring 27 March 1998 to deliver 20,000 ounces at a price of $580 per ounce exercisable by the option holder. -20- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 25 JOINT VENTURES 25.1 The economic entity has interests in the following unincorporated joint ventures:
VENTURE PRINCIPAL ACTIVITIES PERCENTAGE INTEREST JOINT 1995 1994 ---------------------------------------------------------------------------------------- Company Yilgarn Star Exploration Gold Exploration 50 50 Yilgarn Star Production Production from Yilgarn Star Mine 50 50 Star Milling Operation of Burbidge Gold Plant 50 50 Marvel Loch Gold Exploration 50 50 Boodarding Gold Exploration 44.25 44.25 McGowans Find Gold Exploration 45* 45 * Toomey Hills Gold Exploration 47.5 47.5* Dulcie Gold Exploration 40 * 24.5 * Polar Bear Gold Exploration 25 25 Duke Gold Exploration 24.5 24.5 Wilga Well Gold Exploration 90 90 * Sunrise Dam Gold Exploration 80 80 * Sunrise Dam West Gold Exploration 80 80 Norseman Gold Exploration 49 100 Wilga Well West Gold Exploration 80 80 Olga Rocks Gold Exploration 45 * Nil Laverton South Gold Exploration 80 * Nil Controlled Entity Whim Creek Base Metal Exploration 70 70* Mt Fraser Base Metal Exploration 51 51* * Earning interest in accordance with respective joint venture agreements.
-21- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 25.2 JOINT VENTURE ASSETS AND LIABILITIES The company's share of assets and liabilities in the above joint ventures has been included in the balance sheet of the company under the following classifications.
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ CURRENT ASSETS Cash 335,074 123,703 335,074 123,703 Receivables 94,121 57,846 94,121 57,846 Inventories 3,837,517 1,789,217 3,837,517 1,789,217 Other 73,005 54,514 73,005 54,514 ------------------------------------------------------ TOTAL CURRENT ASSETS 4,339,717 2,025,280 4,339,717 2,025,280 ------------------------------------------------------ NON-CURRENT ASSETS Property, plant and equipment 2,747,934 2,714,217 2,747,934 2,714,217 Other - Exploration evaluation and development 12,579,166 3,907,911 12,072,701 3,703,958 - Deferred mining 1,225,544 4,682,483 1,225,544 4,682,483 ------------------------------------------------------ TOTAL NON-CURRENT ASSETS 16,552,644 11,304,611 16,046,179 11,100,658 ------------------------------------------------------ TOTAL ASSETS 20,892,361 13,329,891 20,385,896 13,125,938 ====================================================== CURRENT LIABILITIES Creditors and borrowings 2,411,073 1,992,234 2,411,073 1,992,234 Provisions 65,503 55,686 65,503 55,686 ------------------------------------------------------ TOTAL LIABILITIES 2,476,576 2,047,920 2,476,576 2,047,920 ======================================================
25.3 Joint Venture Contributions The net contribution of joint venture activities to operating profit before income tax may be summarised as follows: Share of costs incurred by production joint ventures 17,298,822 13,520,368 17,298,822 13,520,368 Additional costs incurred by company 285,282 338,285 285,282 338,285 ------------------------------------------------------ 17,584,104 13,858,653 17,584,104 13,858,653 Revenue from sale of company share of gold produced and other income of joint ventures 31,771,702 21,175,665 31,771,702 21,175,665 ------------------------------------------------------ Net contribution 14,187,598 7,317,012 14,187,598 7,317,012 ======================================================
-22- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 25.4 Contingent Liability Participants in the Yllgarn Star Production Joint Venture, being the company, Orion Resources N.L. ("Orion") and Gemini Mining Pq Ltd ("Gemini") were recently served with a Writ issued by Boral out of the Supreme Court of Western Australia claiming damages for alleged breach of contract in the sum of $4,991,832.03, together with interest and costs. The company, Orion and Gemini ("Yilgarn Star Participants") intend to vigorously defend the action by Boral. Based upon advice received by the solicitors and Counsel engaged to review Boral's claims, it is the view of the Yilgarn Star Participants that Boral's claims have no foundation and that the Yilgarn Star Participants have no liability to Boral.
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ 26 REMUNERATION OF THE DIRECTORS Amounts received, or due and receivable by directors of the company from the company and its controlled entity 584,172 434,235 Amounts received, or due and receivable by directors of each entity in the economic entity from the company and its controlled entity 593,768 434,235
Directors remuneration includes superannuation payments and is disclosed in accordance with class order 94/1529 "Disclosure of Directors Remuneration" issued by the Australian Securities Commission. Number of directors of the company whose remuneration was within the following bands: $ O - 9,999 - 1 $ 10,000 - 19,999 2 1 $ 40,000 - 49,999 1 - $ 70,000 - 79,999 - 1 $ 80,000 - 89,999 1 1 $ 90,000 - 99,999 1 - $ 120,000 - 129,999 - 1 $ 130,000 - 139,999 - 1 $ 150,000 - 159,999 1 - $ 180,000 - 189,999 1 -
27 AUDITORS' REMUNERATION Amounts received, or due and receivable by the auditors for: (a) Auditing the accounts of the company 17,850 22,250 14,350 15,250 (b) Other services 9,450 10,575 6,200 2,075
-23- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 28 RELATED PARTY TRANSACTIONS The directors of the company during the year were P G Crabb, R W Crabb, R J Dunn, B J Hurley, D J Porter, F R Madden and J S F Dunlop. (a) Directors' remuneration and superannuation is disclosed in note 26. (b) Legal fees of $91,775 (1994 - $97,822) were paid by the economic entity and joint ventures in which it has an interest in the normal course of business to a firm in which R W Crabb is a partner. (c) Consultancy fees totalling $244,486 (1994 - $309,635) were paid to P G Crabb, R J Dunn, B J Hurley, D J Porter, F R Madden and J S F Dunlop and their director related entities by the economic entity and joint ventures in which it has an interest for services relating to exploration activities, and is included in directors remuneration. (d) Charges for drilling services totalling $24,990 were paid to a director related entity by the company and joint venturers of P G Crabb on normal terms and conditions. (e) Aggregate amounts receivable from and payable to directors and their director related entities at the end of the financial year were $800 (1994 - $1,071) and $17,617 (1994 - $26,769) respectively. (f) The company has entered into joint venture agreements with Gemini Mining Pty Ltd (formerly Bredelle Pty Ltd) a company in which R W Crabb and P G Crabb has an interest. (g) Directors and their related entities acquired the following equity interests in companies in the economic entity during the year.
NUMBER OF NUMBER OF NUMBER OF NUMBER OF SHARES OPTIONS SHARES OPTIONS 1995 1995 1994 1994 Gasgoyne Gold Mines N.L. ordinary shares, on exercise of options 25,000 - 695,000 issued pursuant to Employee Option Plan - 1,515,000 - - Pilbara Mines N L issued pursuant to a prospectus - - 4,145,818 1,947,909 issued pursuant to the Directors, Consultants and Employees Share Option Plan - 3,680,000 - - (h) Directors and their related entities hold the following equity interests in companies in the economic entity at balance date Gasgoyne Gold Mines N.L. 16,007,473 1,870,000 15,602,615 395,000 Pilbara Mines NL 4,705,818 6,010,909 4,145,818 1,947,909
-24- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 29 CONTROLLED ENTITY The controlled entity and contributions to consolidated profit:
CONTRIBUTION TO CONSOLIDATED OPERATING PROFIT & EXTRAORDINARY ITEMS AFTER INCOME TAX ATTRIBUTABLE TO COUNTRY OF % INVESTMENT MEMBERS OF THE INCORPORATION OWNED AT COST CHIEF ENTITY 1995 1994 1995 1994 1995 1994 $ $ $ $ $ $ Chief Entity: Gasgoyne Gold Mines N.L. Australia 9,005,525 8,138,781 Controlled Entity: Pilbara Mines N.L. Australia 38.1 36.8 1,990,048 1,851,651 (127,507) (102,836) --------------------------------------------------------- 1,990,048 1,851,651 8,878,018 8,035,945 =========================================================
Pilbara Mines N L is considered a controlled entity because the company has the capacity to dominate the decision making in relation to the financial and operating policies of the controlled entity so that the controlled entity operates with the company to achieve its objectives. 30 NOTES TO THE STATEMENT OF CASH FLOWS (a) Reconciliation of Cash For the purposes of the statement of cash flows, cash includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows:
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ Cash 1,410,478 305,839 1,405,599 305,839 Deposits at call 10,319,374 11,869,079 1,690,557 2,021,846 Bank overdraft - (15,520) - - ------------------------------------------------------ 11,729,852 12,159,398 3,096,156 2,327,685 ======================================================
Deposits at call includes $283,050 to secure a bank guarantee to the lessor of the company's office premises. -25- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 (b) Non-cash Financing and Investing Activities (i) During the financial year the company paid dividends which were satisfied by the issue of fully franked bonus shares with an aggregate value of $3,215,475; (ii) During the financial year the company acquired plant and equipment by means of finance leases with an aggregate value of $38,700 (1994 - $12,188); (iii) During the financial year the controlled entity acquired tenements by means of issue of shares in controlled entity to outsiders totalling $50,000. These acquisitions are not reflected on the statement of cash flows.
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ (c) Reconciliation of Net Cash provided by Operating Activities to Operating Profit After Income tax Operating profit after income tax 8,671,148 5,308,215 8,812,603 6,244,069 Depreciation 500,004 425,177 472,394 423,303 Amortisation 872,799 583,324 719,757 525,933 Loss/(Profit) on sale of investments 13,751 (915,300) 11,401 (915,300) Loss/(Profit) on sale of equipment 528 (2,014) 528 (2,014) Exploration costs written off 186,244 - 127,017 - Movements in - - Provision for income tax 2,710,366 1,163,247 2,710,366 1,163,247 - - Provision for deferred income tax (297,328) 498,552 (392,350) 885,589 Profits on sale of tenements - - - (1,172,838) Change in assets and liabilities (Increase)/Decrease in debtors (380,233) 138,268 (133,4l8) 130,116 (Increase) in inventories (2,048,301) (884,987) (2,048,301) (884,987 (Increase) in prepaid expenses (135,023) (25,061) (117,677) (24,347) Decrease/(Increase) in gold on metals accounts 1,030,140 (1,238,560) 1,030,140 (1,238,560) Decrease/(Increase) in deferred mining costs 3,456,939 (1,543,930) 3,456,939 (1,543,930) Increase in creditors 622,941 315,793 542,274 252,234 Increase in provision for employee entitlements 5,557 3,180 5,557 3,180 (Decrease)/Increase in deferred gold sales and fees (504,125) 915,684 (504,125) 915,684 ------------------------------------------------------ Net cash provided by operating Activities 14,705,407 4,741,588 14,693,105 4,761,379 ======================================================
-26- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995
ECONOMIC ENTITY COMPANY 1995 1994 1995 1994 $ $ $ $ 31 EARNINGS PER SHARE Basic earnings per share (cents per share) 20.2 13.00 Diluted earnings per share (cents per share) 19.5 13.00 (a) Weighted average number of ordinary shares outstanding during the year used in calculation of basic earnings per share 44,000,666 42,010,011
(b) Classification of securities Diluted earnings per share is calculated after classifying 3,517,000 (1994 - 922,000) options exercisable at below market price at balance date as potential ordinary shares. 121,000 options have not been considered dilutive as they are exercisable at above market price. 32 DIVIDENDS PAID AND PROPOSED Interim ordinary dividend of 5 cents per share paid (fully franked, 1994 - unfranked 100%) 2,210,414 1,059,627 2,210,414 1,059,627 Proposed final ordinary dividend of 6 cents per share (fully franked, 1994 fully franked) 2,813,230 2,114,615 2,813,230 2,114,615 ------------------------------------------------------ 5,023,644 3,174,242 5,023,644 3,174,242 ======================================================
33 EVENTS OCCURRING AFTER BALANCE DATE Since 30 June 1995 the following significant events have occurred; (a) On 6 September 1995 the company dispatched the takeover offer documents to the controlled entity's share and option holders. The consideration being offered by the company for: (i) the acquisition of the controlled entity shares is the allotment and issue of one company share credited as fully paid for every 12 controlled entity shares; and (ii) the acquisition of the controlled entity options is the allotment and issue of one company share credited as fully paid for every 40 of controlled entity options. The offer is subject to specified conditions as outlined in the company's offer documents which were dispatched to share and option holders on 6 September 1995. As at 27 September 1995 the company and its associates were entitled to 64,492,614 (75.97%) of the controlled entity shares (of which 31,366,671 are held directly by the company) and 31,177,166 controlled entity options (of which 14,583,332 are directly held by the company). -27- NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1995 (b) On 1 September 1995 the company announced that it had entered into a Facility Agreement with Citibank Limited to provide a line of credit to a maximum of $10,500,000 which may be drawn by the company in cash or the gold equivalent thereof. The facility is for a period of three years. The Citibank facility will be used by the company for the ongoing funding commitments on the Awak Mas Gold Project in South Sulawesi, Indonesia and for other working capital requirements. However, due to the substantial cash surplus being generated by the company's interest in the Yilgarn Star Project, the Citibank facility is not anticipated to be required to its full extent and at the date of this report has only initially been drawn to the sum of $5,250,000. Security of the Citibank facility is by way of a Fixed and Floating Charge over all the assets and undertaking of the company (c) On 13 September 1995 the company announced that in accordance with the terms of the Masmindo Option Agreement, the company and its joint venture partner, Lone Star Exploration N.L. had given notice of exercise of the Option in relation to the Awak Mas Gold Project and the first payment US$1 million had been paid. As a result of the above, the effective equity holding in the Awak Mas Gold Project is as follows: Company 45% Lone Star Exploration N.L. 45% P T Asminco Bara Utama 10% ---- 100% ====
The balance of the consideration for the Masmindo Option Agreement (US$3 million) will be paid in accordance with the terms of the Option Agreement, being US$1 million on 15 September 1996 and US$2 million on 15 September 1997. These payments will be accelerated should the project proceed to production prior to those dates. -28- S T A T E M E N T B Y D I R E C T O R S In the opinion of the directors of Gasgoyne Gold Mines N.L.: (a) the financial statements set out on pages 30 to 53 are drawn up in accordance with Divisions 4, 4A and 4B of Part 3.6 of the Corporations Law and so as to give a true and fair view of: (i) the state of affairs as at 30 June 1995 and the profit for the financial year ended on that date of the company and the economic entity; and (ii) the other matters with which they deal; and (b) at the date of this statement, there are reasonable grounds to believe that the company will be able to pay its debts as and when they fall due. The financial statements are drawn up in accordance with applicable Accounting Standards. Signed in accordance with a resolution of the Directors. Dated at Perth this 28th day of September, 1995. BJ HURLEY Director P G CRABB Direcror -29- I N D E P E N D E N T A U D I T R E P O R T SCOPE We have audited the financial statements of Gasgoyne Gold Mines N.L. for the year ended 30 June 1995 as set out on pages 30 to 54. The financial statements include the consolidated accounts of the economic entity comprising the company and its controlled entity. The company's directors are responsible for the preparation and presentation of the financial statements and the information they contain. We have conducted an independent audit of these financial statements in order to express an opinion on them to the members of the company. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance as to whether the financial statements are free of material mix-statement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial statements, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion as to whether, in all material respects, the financial statements are presented fairly in accordance with Australian accounting standards, other mandatory professional reporting requirements (Urgent Issues Group Consensus Views), and statutory requirements so as to present a view of the company and of the economic entity which is consistent with our understanding of their financial position and the results of their operations and cash flows. The audit opinion expressed in this report has been formed on the above basis. AUDIT OPINION In our opinion, the financial statements of Gasgoyne Gold Mines N.L. are properly drawn up: (a) so as to give a true and fair view of: (i) the state of affairs of the company and of the economic entity as at 30 June 1995 and of their profit and cash flows for the year ended on that date; and (ii) the other matters required by Divisions 4, 4A and 4B of Part 3.6 of the Corporations Law to be dealt with in the financial statements; (b) in accordance with the provisions of the Corporations Law; and (c) in accordance with applicable Accounting Standards and other mandatory professional reporting requirements. COOPERS & LYBRAND Chartered Accountants AJ EDWARDS Partner Perth, WA 28 September, 1995 -30- F I N A N C I A L S T A T E M E N T S GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY FOR THE YEAR ENDED 30 JUNE 1994 -31- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY BALANCE SHEET AS AT 30 JUNE 1994
ECONOMIC ENTITY COMPANY Notes 1994 1993 1994 1993 $ $ $ $ CURRENT ASSETS Cash 12,174,918 2,629,333 2,327,685 2,629,332 Receivables 6 105,527 243,795 113,679 243,795 Investments 7 93,792 173,341 93,792 173,341 Inventories 8 1,789,217 904,230 1,789,217 904,230 Other 9 1,605,567 341,946 1,604,853 341,946 ------------------------------------------------------------------------------------------------------ TOTAL CURRENT ASSETS 15,769,021 4,292,645 5,929,226 4,292,644 ------------------------------------------------------------------------------------------------------ NON-CURRENT ASSETS Investments 10 10 10 1,851,661 11 Property, plant and equipment 11 3,011,607 2,480,045 2,993,806 2,480,045 Intangibles 12 827,221 252,734 166,082 252,734 Other 13 10,097,303 7,171,010 9,588,455 7,171,010 ------------------------------------------------------------------------------------------------------ TOTAL NON-CURRENT ASSETS 13,936,141 9,903,799 14,600,004 9,903,800 ------------------------------------------------------------------------------------------------------ TOTAL ASSETS 29,705,162 14,196,444 20,529,230 14,196,444 ------------------------------------------------------------------------------------------------------ CURRENT LIABILITIES Creditors and borrowings 14 2,196,515 2,867,782 2,117,436 2,867,782 Provisions 15 4,464,814 2,640,965 4,464,814 2,640,965 Other 16 331,112 - 331,112 - ------------------------------------------------------------------------------------------------------ TOTAL CURRENT LIABILITIES 6,992,441 5,508,747 6,913,362 5,508,747 ------------------------------------------------------------------------------------------------------ NON-CURRENT LIABILITIES Creditors and borrowings 17 68,626 84,493 68,626 84,493 Provisions 18 2,084,463 1,585,911 2,471,500 1,585,911 Other 19 584,572 - 584,572 - ------------------------------------------------------------------------------------------------------ TOTAL NON-CURRENT LIABILITIES 2,737,661 1,670,404 3,124,698 1,670,404 ------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 9,730,102 7,179,151 10,038,060 7,179,151 ------------------------------------------------------------------------------------------------------ NET ASSETS 19,975,060 7,017,293 10,491,170 7,017,293 ====================================================================================================== SHAREHOLDERS' EQUITY Share capital 20 4,082,059 3,913,459 4,082,059 3,913,459 Reserves 21 303,500 68,050 303,500 68,050 Retained profits 7,897,487 3,035,784 6,105,611 3,035,784 ------------------------------------------------------------------------------------------------------ Shareholders' equity attributable to members of the chief entity 12,283,046 7,017,293 10,491,170 7,017,293 Outside equity interests in controlled entity 22 7,692,014 - - - ------------------------------------------------------------------------------------------------------ TOTAL SHAREHOLDERS' EQUITY 19,975,060 7,017,293 10,491,170 7,017,293 ======================================================================================================
The above balance sheet should be read in conjunction with the accompanying notes. -32- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY Notes 1994 1993 1994 1993 $ $ $ $ Operating Revenue 2 23,918,760 19,466,278 24,984,725 19,466,278 ====================================================================================================== Operating profit before income tax 3 8,067,211 7,647,770 9,390,102 7,647,770 Income tax attributable to operating profit 4 2,758,996 2,706,138 3,146,033 2,706,138 ------------------------------------------------------------------------------------------------------ Operating profit after income tax 5,308,215 4,941,632 6,244,069 4,941,632 Profit on extraordinary items 5 2,680,513 - - - ------------------------------------------------------------------------------------------------------ Operating profit and extraordinary items after income tax 7,988,728 4,941,632 6,244,069 4,941,632 Outside equity interests in operating profit and extraordinary items after income tax (47,217) - - - ------------------------------------------------------------------------------------------------------ Operating profit and extraordinary items after income tax attributable to members of the Chief Entity 8,035,945 4,941,632 6,244,069 4,941,632 Retained profits at the beginning of the financial year 3,035,784 582,819 3,035,784 582,819 ------------------------------------------------------------------------------------------------------ Total available for appropriation 11,071,729 5,524,451 9,279,853 5,524,451 Dividends provided for or paid 31 3,174,242 2,488,667 3,174,242 2,488,667 ------------------------------------------------------------------------------------------------------ Retained profits at the end of the financial year 7,897,487 3,035,784 6,105,611 3,035,784 ======================================================================================================
The above profit and loss account should be read in conjunction with the accompanying notes. -33- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY STATEMENT OF CASH FLOWS FOR YEAR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY Notes 1994 1993 1994 1993 $ $ $ $ CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 23,144,108 19,186,524 23,144,108 19,186,524 Payments to suppliers and employees (17,542,830) (12,724,933) (17,339,856) (12,724,933) Interest received 262,663 117,485 79,480 117,485 Interest and other costs of finance paid (25,156) (82,382) (25,156) (82,382) Income tax paid (1,097,197) - (1,097,197) - ------------------------------------------------------------------------------------------------------ Net cash provided by operating activities 29(c) 4,741,588 6,496,694 4,761,379 6,496,694 ------------------------------------------------------------------------------------------------------ CASH FLOWS FROM INVESTING ACTIVITIES Payment for mineral exploration and development (1,821,644) (1,118,249) (1,389,958) (1,118,249) Payments for investments (362,219) (125,003) (862,219) (125,004) Proceeds from sale of investments 1,255,418 81,966 1,255,418 81,966 Payment for property, plant and equipment 29(b) (1,014,500) (944,249) (994,825) (944,249) Proceeds from sale of equipment 71,963 55,000 71,963 55,000 ------------------------------------------------------------------------------------------------------ Net cash used in investing activities (1,870,982) (2,050,535) (1,919,621) (2,050,536) ------------------------------------------------------------------------------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares 404,050 221,050 404,050 221,050 Payment of prospectus issue expenses (765,208) - - - Proceeds from borrowings - 354,374 - 354,374 Repayment of borrowings (1,024,168) (2,033,938) (1,024,168) (2,033,938) Dividends paid (2,516,820) (2,052,221) (2,516,820) (2,052,221) Other-outside equity 10,568,072 - - - ------------------------------------------------------------------------------------------------------ Net cash from financing activities 6,665,926 (3,510,735) (3,136,938) (3,510,735) ------------------------------------------------------------------------------------------------------ Net increase (decrease) in cash held 9,536,532 935,424 (295,180) 935,423 Cash at beginning of the financial year 2,622,866 1,687,442 2,622,865 1,687,442 ------------------------------------------------------------------------------------------------------ Cash at the end of the financial 29(a) 12,159,398 2,622,866 2,327,685 2,622,865 year ======================================================================================================
The above statement of cash flows should be read in conjunction with the accompanying notes. -34- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES A summary of significant accounting policies adopted by the economic entity in the preparation of the financial statements is set out in this note. The policies adopted are in accordance with applicable Accounting Standards and the Corporations Law, including the disclosure requirements of Schedule 5 of the Corporations Regulations. (a) HISTORICAL COST The financial statements have been prepared under the convention of historical cost accounting and do not take into account changing money values. (b) PRINCIPLES OF CONSOLIDATION The consolidated accounts comprise the accounts of the company and its controlled entity, Pilbara Mines N. L. A controlled entity is any entity controlled by the company Control exists where the company has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with the company to achieve its objectives. All inter-company balances and transactions between entities in the economic entity, including any unrealized profits or losses, have been eliminated on consolidation. Where the controlled entity has entered or left the economic entity during the year, their operating results have been included from the date control was obtained or until the date control ceased. (c) INTERESTS IN JOINT VENTURES 1. The economic entity's interests in production joint ventures are brought to account by including the amount of: (i) the entity's interest in each of the individual assets employed in the joint ventures; (ii) the entity's share of liabilities incurred by the joint ventures, and (iii) the entity's interest in the expenses incurred in relation to the joint ventures. 2. The entity's interests in exploration joint ventures are brought to account based on the actual expenditure incurred by the entity in contributing to the joint venture exploration programmes. (d) REVENUE RECOGNITION (i) Refined gold which is subject to forward sales contracts, is recognised as revenue at the appropriate forward sales price at the point at which the bullion has been refined and is available for delivery. Unrealized gains or losses relating to forward gold sales contracts outstanding at balance date are not reflected in the profit and loss account. (ii) Gold delivered as repayment of the gold loan is accounted for as in note 1 (m). (iii) Funds received on the sale of call options, other than in circumstances where the call option is related to forward selling arrangements, are recognised as revenue when received. -35- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994 (e) INCOME TAX Tax effect accounting procedures are followed using the liability method of tax effect accounting, whereby the income tax expense for the year is matched with the accounting result after allowance for permanent differences. Future income tax benefits are not brought to account unless realization of the asset is assured BEYOND reasonable doubt in respect to timing differences, and virtually certain in respect of tax losses. (f) INVENTORIES (i) Ore stockpiles and gold in circuit are valued at the lower of cost and net realisable value. Cost comprises direct material, labour and transportation expenditure incurred in getting inventories to their existing location and condition, together with an appropriate portion of fixed and variable overhead expenditure based on weighted average costs incurred during the period in which such inventories were produced. (ii) Stores and consumables are valued at the lower of weighted average cost and net realisable value. (g) EXPLORATION AND DEVELOPMENT EXPENDITURE Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. Any costs of site restoration are provided for during the relevant production stages and included in the costs of that A regular review is undertaken of each area of interest to determine the appropriateness of continuing carry forward costs in relation to that area of interest (h) RESTORATION, REHABILITATION AND ENVIRONMENTAL COSTS Restoration, rehabilitation and environmental expenditure to be incurred during the production PHASE of operations is accrued when the need for such expenditure is established and then written off immediately as part of the cost of production of the mine property concerned. There is no provision in the accounts for restoration, rehabilitation and environmental expenditure to be incurred subsequent to the cessation of production at a mine property. -36- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT FOR THE YEAR ENDED 30 JUNE 1994 (i) PROPERTY, PLANT AND EQUIPMENT (i) The cost of each item of buildings, machinery and equipment held at mine sites is written off over its expected economic life. Each item's economic life has due regard both to its own physical life limitations and to present assessments of economically recoverable resources of the mine property at which the item is located, and to possible future variations in those assessments. Estimates of remaining useful lives are made on a regular basis for all assets, with annual reassessments for major items. The total net carrying values of mine buildings, machinery and equipment at each mine property are reviewed regularly and, to the extent to which these values exceed their recoverable amounts, that excess if fully provided against in the financial year in which this is determined. (ii) Other assets are depreciated over their expected useful lives on the straight line or reducing balance basis as appropriate. (j) LEASES Leased assets, other than operating leases, where substantially all the risks and benefit incident to the ownership of the asset but not the legal ownership are transferred to the company are classified as finance leases. Finance leases are capitalised recording an asset and a liability equal to the present value of the minimum lease payments, including any guaranteed residual value. Leased assets are amortised over their estimated useful lives. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Lease payments under operating leases are charged as expenses in the periods in which they are incurred. (k) INTANGIBLES Intangibles comprise expenses incurred in connection with the prospectus issued by the company and its controlled entity which are being amortised over a period of 5 years commencing from the date of the successful flotation of the shares. (l) EMPLOYEE ENTITLEMENTS The amounts expected to be paid to employees for their pro-rata entitlement to annual and sick leave are accrued annually at current pay rates having regard to experience of employee departures and periods of service. (m) GOLD LOAN The gold loan is carried in the financial statements at a rate equal to the price of gold at the date of drawdown. Gold delivered as repayment of the loan is recorded as sales and as a reduction of liability at the same historical gold price as at drawdown. -37- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994 (n) Segmental Information The economic entity operates predominantly in the mining industry in Western Australia. (o) Cash For the purpose of the statement of cash flows, cash includes: (i) cash on hand and in at call deposits with banks or financial institutions, net of bank overdrafts; and (ii) investments in money market instruments with less than 14 days to maturity. (p) Comparative Figures Where required by Accounting Standards comparative figures have been adjusted to conform with changes in presentation for the current financial year.
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ 2 OPERATING REVENUE Gold sales 20,832,079 18,640,278 20,832,079 18,640,278 Gold call option fee 1,000,000 - 1,000,000 - Royalties received - 65,210 - 65,210 Sales of investments 1,255,418 81,966 1,255,418 81,966 Sales of plant and equipment 71,963 55,000 71,963 55,000 Interest received 262,663 122,032 79,480 122,032 Sales of tenements - - 1,250,000 - Other income 496,637 501,792 495,785 501,792 ------------------------------------------------------------------------------------------------------ 23,918,760 19,466,278 24,984,72 19,466,278 ======================================================================================================
3 OPERATING PROFIT The operating profit before income tax has been determined after crediting and charging the following specific items: a) Crediting as income Interest received from unrelated corporations 262,663 122,032 79,480 122,032 Profit on share trading 915,300 13,365 915,300 13,365 Profit on disposal of plant and equipment (2,014) 4,160 (2,014) 4,160
-38- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ b) CREDITING AS ABNORMAL Profit on sale of tenements - - 1,172,838 - Gold call option fee 1,000,000 - 1,000,000 - ------------------------------------------------------------------------------------------------------ 1,000,000 - 2,172,838 - ------------------------------------------------------------------------------------------------------ Income tax at 33% 330,000 - 717,037 - ------------------------------------------------------------------------------------------------------ c) CHARGING AS EXPENSES Amortisation - assets under finance leases 28,909 21,740 28,909 21,740 - prospectus issue expenses 144,043 86,651 86,652 86,651 - exploration expenses 439,281 366,438 439,281 366,438 Depreciation - plant and equipment 396,268 618,673 394,394 618,673 Exploration expenditure on areas written off - 177,312 - 177,312 Interest paid to unrelated corporations 12,513 72,517 12,513 72,517 Lease finance charges 12,643 9,864 12,643 9,864 Operating lease rentals 44,564 39,771 44,564 39,771 Royalties paid - 574,105 - 574,105 Provision for employee entitlements 3,089 281,647 3,089 28,647 4 INCOME TAX Operating profit before income tax 8,067,211 7,647,770 9,390,102 7,647,770 ------------------------------------------------------------------------------------------------------ Income tax @ 33% (1993 - 39%) 2,662,180 2,982,630 3,098,734 2,982,630 ------------------------------------------------------------------------------------------------------ Permanent differences - Amortisation of prospectus expenses 47,534 33,794 28,595 33,794 - Other 38,435 25,768 18,704 25,768 ------------------------------------------------------------------------------------------------------ 2,748,149 3,042,192 3,146,033 3,042,192 Utilization of unrecognized future income tax benefits of prior years - (47,707) - (47,707) Effect on deferred income tax of change in tax rate from 39% to 33% - (288,347) - (288,347) Future income tax benefits not recognised 10,847 - - - ------------------------------------------------------------------------------------------------------ Income tax attributable to operating profit 2,758,996 2,706,138 3,146,033 2,706,138 ======================================================================================================
-39- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ Provision for income tax 2,260,444 1,120,227 2,260,444 1,120,227 Provision for deferred income tax 498,552 1,585,911 885,589 1,585,911 ------------------------------------------------------------------------------------------------------ 2,758,996 2,706,183 3,146,033 2,706,138 ------------------------------------------------------------------------------------------------------
The future income tax benefit of $l0,847 attributable to tax losses of the controlled entity has not been brought to account as realization of the benefit is not virtually certain. The benefit will only be obtained if: (a) the controlled 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 realized; (b) the controlled entity continues to comply with the conditions for deductibility imposed by tax legislation; and (c) no changes in tax legislation adversely affect the controlled entity in realizing the benefit from the deductions for the loss. 5 EXTRAORDINARY ITEM Gain on reduction in ownership interest in controlled entity 2,680,513 - - - ======================================================================================================
There is no tax attributable to this gain. 6 CURRENT ASSETS - RECEIVABLES Trade debtors 47,536 243,795 55,833 243,795 Other debtors 57,991 - 57,846 - ------------------------------------------------------------------------------------------------------ 105,527 243,795 113,679 243,795 ======================================================================================================
7 CURRENT ASSETS - INVESTMENTS Investment listed on a prescribed stock exchange at cost 93,792 173,341 93,792 173,341 ------------------------------------------------------------------------------------------------------ Market Value 142,180 1,099,452 142,180 1,099,452 ======================================================================================================
-40- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ 8 CURRENT ASSETS - INVENTORIES Ore stockpiles 1,226,977 569,351 1,226,977 569,351 Gold in circuit 161,493 191,142 161,493 191,142 Stores and consumables 400,747 143,737 400,747 143,737 ------------------------------------------------------------------------------------------------------ 1,789,217 904,230 1,789,217 904,230 ====================================================================================================== 9 CURRENT ASSETS - OTHER Prepayments 74,092 49,031 73,378 49,031 Gold on metal account 1,531,475 292,915 1,531,475 292,915 ------------------------------------------------------------------------------------------------------ 1,605,567 341,946 1,604,853 341,946 ====================================================================================================== 10 NON-CURRENT ASSETS - INVESTMENTS Investments in unlisted companies at cost 10 10 10 10 Investment in controlled entity at cost - - 1,851,651 1 ------------------------------------------------------------------------------------------------------ 10 10 1,851,661 11 ====================================================================================================== The controlled entity is a listed company Market value of traceable shares - - 100,000 - Cost of escrowed shares - - 1,750,000 - 11 NON-CURRENT ASSETS - PROPERTY, PLANT AND EQUIPMENT Freehold land at cost 44,160 41,189 44,160 41,189 ------------------------------------------------------------------------------------------------------ Buildings at cost 611,531 237,307 611,531 237,307 Less: accumulated depreciation 133,507 63,916 133,507 63,916 ------------------------------------------------------------------------------------------------------ 478,024 173,391 478,024 173,391 ======================================================================================================
-41- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ Plant and equipment, at cost 3,535,095 2,974,780 3,515,420 2,974,780 Less: accumulated depreciation 1,116,125 806,088 1,114,251 806,088 ------------------------------------------------------------------------------------------------------ 2,418,970 2,168,692 2,401,169 2,168,692 ------------------------------------------------------------------------------------------------------ Plant and equipment under lease 118,311 129,683 118,311 129,683 Less: amortisation 47,858 32,910 47,858 32,910 ------------------------------------------------------------------------------------------------------ 70,453 96,773 70,453 96,773 ------------------------------------------------------------------------------------------------------ 3,011,607 2,480,045 2,993,806 2,480,045 ====================================================================================================== 12 NON-CURRENT ASSETS - INTANGIBLES Prospectus issue expenses 1,151,523 432,993 432,993 432,993 Less: amortisation 324,302 180,259 266,911 180,259 ------------------------------------------------------------------------------------------------------ 827,221 252,734 166,082 252,734 ====================================================================================================== 13 NON-CURRENT ASSETS - OTHER Deferred mining costs (a) 4,682,483 3,138,553 4,682,483 3,138,553 Expenditure on mineral exploration evaluation and development (b) 5,414,820 4,032,457 4,905,972 4,032,457 ------------------------------------------------------------------------------------------------------ 10,097,303 7,171,010 9,588,455 7,171,010 ====================================================================================================== (a) Deferred mining costs represent costs of mining waste in excess of the estimated ratio of waste to ore over the mine life.
-42- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE FOR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ (b) Expenditure on mineral exploration evaluation and development on areas of interest represents: - in the exploration or evaluation phase 3,225,491 1,968,230 2,716,643 1,968,230 ------------------------------------------------------------------------------------------------------ - in which production has commenced 3,229,949 2,665,566 3,229,949 2,665,566 Less: accumulated amortisation 1,040,620 601,339 1,040,620 601,339 ------------------------------------------------------------------------------------------------------ 2,189,329 2,064,227 2,189,329 2,064,227 ------------------------------------------------------------------------------------------------------ 5,414,820 4,032,457 4,905,972 4,032,457 ======================================================================================================
The carrying value of mineral exploration, evaluation and development expenditure is dependent upon the discovery and exploitation of commercially viable mineral deposits, the generation of sufficient future income therefrom or sale for at least carrying value. 14 CURRENT LIABILITIES - CREDITORS & BORROWINGS Bank overdraft 15,520 6,467 - 6,467 Trade creditors 1,312,527 950,170 1,255,968 950,170 Other creditors 847,368 893,932 840,368 893,932 Lease liabilities 21,100 22,517 21,100 22,517 Gold loan, secured - 994,696 - 994,696 ------------------------------------------------------------------------------------------------------ 2,196,515 2,867,782 2,117,436 2,867,782 ====================================================================================================== 15 CURRENT LIABILITIES - PROVISIONS Employee entitlements 65,983 62,803 65,983 62,803 Dividends 2,115,357 1,457,935 2,115,357 1,457,935 Income tax 2,283,474 1,120,227 2,283,474 1,120,227 ------------------------------------------------------------------------------------------------------ 4,464,814 2,640,965 4,464,814 2,640,965 ====================================================================================================== 16 CURRENT LIABILITIES - OTHER Prepaid gold sales and fees 331,112 - 331,112 - ====================================================================================================== 17 NON CURRENT LIABILITIES - CREDITORS AND BORROWINGS Lease Liabilities 68,626 84,493 68,626 84,493 ======================================================================================================
-43- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ 18 NON-CURRENT LIABILITIES - PROVISIONS Deferred income tax 2,084,463 1,585,911 2,471,500 1,585,911 ====================================================================================================== 19 NON CURRENT LIABILITIES - OTHER Prepaid gold sales and fees 584,572 - 584,572 - ====================================================================================================== 20 SHARE CAPITAL AUTHORISED 100,000,000 shares of 20 cents each 20,000,000 20,000,000 20,000,000 20,000,000 ISSUED AND PAID UP 42,292,293 ordinary shares of 20 cents each (1993 - 41,449,293) 8,458,459 8,289,859 8,458,459 8,289,859 Discount on shares (4,376,400) (4,376,400) (4,376,400) (4,376,400) ------------------------------------------------------------------------------------------------------ 4,082,059 3,913,459 4,082,059 3,913,459 ======================================================================================================
20.1 Movement in issued share capital Number $ Opening balance 41,449,293 3,913,459 Allotted on conversion of options 843,000 168,600 ------------------------------------------------------------------------------------------------------ 42,292,293 4,082,059 ======================================================================================================
20.2 At balance date the company had on issue the following unquoted options to subscribe or ordinary shares exercisable on or before 30 June 1997
1994 1993 Exereise Price 830,000 1,665,000 $0.47 92,000 100,000 $1.45 121,000 - $2.24
20.3 At balance date the controlled entity had on to persons not being members of the economic entity, 30,420,146 options to subscribe for ordinary shares in the controlled entity at an exercise price of 20 cents per share, exercisable on or before 30 June 1998. -44- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ 21 RESERVES Share Premium at beginning of year 68,050 10,000 68,050 10,000 On conversion of 872,037 options at a premium of 27 cents per share 235,450 58,050 235,450 58,050 ------------------------------------------------------------------------------------------------------ 303,500 68,050 303,500 68,050 ====================================================================================================== 22 OUTSIDE EQUITY INTERESTS IN CONTROLLED ENTITY Outside equity interest comprises: Share capital 7,786,813 - -- -- Accumulated losses (94,799) - - - ------------------------------------------------------------------------------------------------------ 7,692,014 - -- -- ======================================================================================================
The outside equity interests in the issued and paid-up capital of the controlled entity comprises 51,840,362 fully paid ordinary shares of 20 cents each issued at varying discounts. 23 COMMITMENTS 23.1 EXPLORATION AND DEVELOPMENT EXPENDITURE In order to maintain the exploration leases, licenses and permits in which the company and other joint venturers are involved, all participants are committed to fulfill the minimum annual expenditure conditions under which the tenements are granted. These obligations may be varied from time to time, subject to approval, and are expected to be fulfilled in the normal course of operations of the company. 23.2 INTERESTS IN JOINT VENTURE The company has entered into joint ventures with other parties for the purpose of exploiting and developing its mining tenements. If a participant to a joint venture defaults and fails to contribute its share of joint venture obligations, then the joint venturers are jointly and severally liable to meet the obligations of the defaulting venture. In this event the interest in the tenement held by the defaulting participant may be redistributed to the remaining joint venturers. In the event of a default a commitment exists in respect of expenditure commitments due to be met by the company's defaulting joint venture partner. -45- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ 23.3 Lease Commitments (a) Finance leases - plant & equipment due within 1 year 30,267 34,359 30,267 34,359 due within 1-2 years 32,102 28,547 32,102 28,547 DUE WITHIN 2-5 years 44,549 72,716 44,549 72,716 ------------------------------------------------------------------------------------------------------ Minimum lease payments 106,918 135,622 106,918 135,622 Less: future finance charges 17,192 28,612 17,192 28,612 ------------------------------------------------------------------------------------------------------ Provided for in the accounts 89,726 107,010 89,726 107,010 ====================================================================================================== (b) Non-cancellable operating leases due within 1 year - 39,864 - 39,864 due within 1-2 years 101,250 36,542 101,250 36,542 due within 2-5 year 573,750 - 573,750 -- ------------------------------------------------------------------------------------------------------ Not provided for in the accounts 675,000 76,406 675,000 76,406 ======================================================================================================
23.4 Forward Sales Contracts At balance date the company had outstanding gold per forward safes contracts for 144,346 (1993-117,599) ounces at an average price of $570 (1993-$492) per ounce. 23.5 Gold Call Option At balance date the company had outstanding a gold call option expiring 28 March 1996 to deliver 22,325 ounces at a price of $580 per ounce exercisable by the option holder. -46- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994 24 JOINT VENTURES 24.1 The economic entity has interests in the following unincorporated joint ventures:
JOINT VENTURE PRINCIPAL ACTIVITIES PERCENTAGE INTEREST RIGHT TO OBLIGATION ACQUIRE TO DISPOSE ====================================================================================================== COMPANY Yilgarn Star Exploration Gold Exploration 50 - Yilgarn Star Production Production from Yilgarn Star Mine 50 - Star Milling Operation of Burbidge Gold Plant 50 - Marvel Loch Gold Exploration 50 -- Boodarding Gold Exploration 44.25 -- McGowans Find Gold Exploration 45 -- Toomey Hills Gold Exploration 47.5 -- Centenary Gold Exploration 47.5 -- Dulcie Gold Exploration 37.5 -- LSD Gold Exploration 95 -- Polar Bear Gold Exploration - 17.5 Norseman Gold Exploration - 35 Wilga Well Gold Exploration 90 -- Sunrise Dam Gold Exploration 80 -- Norseman East Gold Exploration - 70 Wilga Well West Gold Exploration 80 -- Sunrise Dam West Gold Exploration 90 -- Olga Rocks Gold Exploration 45 -- CONTROLLED ENTITY Whim Creek Base Metal Exploration 70 -- Mt Fraser Base Metal Exploration 51 -- ======================================================================================================
24.2 JOINT VENTURE ASSETS AND LIABILITIES The company's share of assets and liabilities in the above joint ventures has been included in the balance sheet of the company under the following classifications.
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ CURRENT ASSETS Cash 123,703 372,391 123,703 372,391 Receivables 57,846 129,502 57,846 129,502 Inventories 1,789,217 904,230 1,789,217 904,230 Other 54,514 32,096 54,514 32,096 ------------------------------------------------------------------------------------------------------ TOTAL CURRENT ASSETS 2,025,280 1,438,219 2,025,280 1,438,219 ======================================================================================================
-47- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ NON-CURRENT ASSETS Property, plant and equipment 2,714,217 2,280,288 2,714,217 2,280,288 Other - Exploration evaluation and development 3,907,911 2,726,076 3,703,958 2,726,076 - Deferred mining 4,682,483 3,138,553 4,682,483 3,138,553 ------------------------------------------------------------------------------------------------------ TOTAL NON-CURRENT ASSETS 11,304,611 8,144,917 11,100,658 8,144,917 ------------------------------------------------------------------------------------------------------ TOTAL ASSETS 13,329,891 9,583,136 13,125,938 9,583,136 ====================================================================================================== CURRENT LIABILITIES Creditors and borrowings 1,992,234 1,722,163 1,992,234 1,722,163 Provisions 55,686 40,861 55,686 40,861 ------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 2,047,920 1,763,024 2,047,920 1,763,024 ====================================================================================================== 24.3 JOINT VENTURE CONTRIBUTIONS The net contribution of joint venture activities to operating profit before income tax may be summarized as follows: Share of costs incurred by production joint ventures 13,520,368 9,920,245 13,520,368 9,920,245 Additional costs incurred by company 338,285 645,396 338,285 645,396 ------------------------------------------------------------------------------------------------------ 13,858,653 10,565,641 13,858,653 10,565,641 Revenue from sale of company share of gold produced and other income of joins ventures 21,175,665 19,038,674 21,175,665 19,038,674 ------------------------------------------------------------------------------------------------------ Net contribution 7,317,012 8,473,033 7,317,012 8,473,033 ======================================================================================================
24.4 CONTINGENT LIABILITY The open pit mining contractor has advised that it intends to lodge cost reimbursement claims against the Yilgarn Star Joint Venture participants totaling $1 million. The claims will be disputed by the Yilgarn Star Venture participants. -48- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ REMUNERATION OF THE DIRECTORS Amounts received, or due and receivable by directors of the company from the company and its controlled entity 434,235 275,433 Amounts received, or due and receivable by directors of each entity in the economic entity from the company and its controlled entity 434,235 275,433 Directors remuneration includes superannuation payments and is disclosed in accordance with class order 94/947 "Disclosure of Directors Remuneration" issued by the Australian Securities Commission. Number of directors of the company whose remuneration was within the following bands:
$ O - 9,999 1 1 $ 10,000 - 19,999 1 1 $ 30,000 - 39,999 - 1 $ 40,000 - 49,999 - 1 $ 50,000 - 59,999 - 1 $ 60,000 - 69,999 - - $ 70,000 - 79,999 1 - $ 80,000 - 89,999 1 - $120 000 - 129 999 1 1 $130 000 - 139 999 1 -
26 AUDITORS' REMUNERATION Amounts received, or due and receivable by the auditors for: (a) Auditing the accounts of the company 22,250 15,100 15,250 15,100 (b) Other services 10,575 2,525 2,075 2,525
27 RELATED PARTY TRANSACTIONS The directors of the company during the year were P G Crabb, R W Crabb, R J Dunn, D Dunnet (resigned 29 November 1993), B J Hurley and D J Porter. (a) Directors' remuneration and superannuation is disclosed in note 25. (b) Legal fees of $97,822 (1993 - $56,791) were paid by the economic entity and joint ventures in which it has an interest in the normal course of business to a firm in which R W Crabb is a partner. -49- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994 (c) Consultancy fees totalling $309,635 (1993 - $202,493) were paid to P G Crabb, R J Dunn, D Dunnct, B J Hurley, D J Porter and their director related entities by the economic entity and joint ventures in which it has an interest for services relating to exploration activities, and is included in directors remuneration. (d) Aggregate amounts receivable from and payable to directors and their director related entities at the end of the financial year were $1,071 (1993 - $6,938) and $26,769 (1993 - $1,935) respectively. (e) The company has entered into joint venture agreements with Orion Resources N L, a company of which D Dunnet (a former director) is a director and Bredelle Pty Ltd a company in which R W Crabb has an interest. (f) Directors and their related entities acquired the following equity interests in companies in the economic entity during the year.
Number of Number of Shares Options Gasgoyne Gold Mines N.L. On exercise of options 695,000 Pilbara Mines N L Pursuant to a prospectus 4,145,818 1,947,909 (g) Directors and their related entities hold the following equity interests in companies in the economic entity at Gasgoyne Gold Mines N.L. 15,602,615 395,000 Pilbara Mines N L 4,145,818 1,947,909
-50- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994 28 CONTROLLED ENTITY The controlled entity and contributions to consolidated profit:
Contribution To Consolidated Operating profit & extraordinary items after income tax attributable to Country Of % Investment members of the Incorporation Owned At Cost Chief Entity 1994 1993 1994 1993 1994 1993 $ $ $ $ $ $ CHIEF ENTITY: Gasgoyne Gold Mines N.L. Aust 8,138,781 4,941,632 CONTROLLED ENTITY: Pilbara Mines N.L. Aust 36.8 100.0 1,851,651 1 (102,836) -- ------------------------- 8,035,945 4,941,632 =========================
Pilbara Mines N L is considered a controlled entity because the company has the capacity to dominate the decision making in relation to the financial and operating policies of the controlled entity so that the controlled entity operates with the company to achieve its objectives. 29 NOTES TO THE STATEMENT OF CASH FLOWS (a) RECONCILIATION OF CASH For the purposes of the statement of cash flows, cash includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows:
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ Cash 305,839 413,127 305,839 413,126 Deposits at call 11,869,079 2,216,206 2,021,846 2,216,206 Bank overdraft (15,520) (6,467) - (6,467) ------------------------------------------------------------------------------------------------------ 12,159,398 2,622,866 2,327,685 2,622,865 ======================================================================================================
Deposits at call includes $283,050 to secure a bank guarantee to the lessor of the company's office premises. -51- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994 (b) NON-CASH FINANCING AND INVESTING ACTIVITIES During the year the economic entity and the company acquired plant and equipment with an aggregate fair value of $12,188 (1993 - $103,323) by means of finance leases. These acquisitions are not reflected on the statement of cash flows.
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ (c) RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO OPERATING PROFIT AFTER INCOME TAX Operating profit after income tax 4,921,178 4,941,632 6,244,069 4,941,632 Depreciation 425,177 618,673 423,303 618,673 Amortisation 583,324 474,829 525,933 474,829 Profit on sale of investments (915,300) (13,365) (915,300) (13.365) Profit on sale of equipment (2,014) (4,160) (2,014) (4,160) Exploration costs written off - 177,312 - 177,312 Movements in - Provision for income tax 1,163,247 1,120,227 1,163,247 1,120,227 Movements in - Provision for deferred income tax 885,589 1,585,911 885,589 1,585,911 Profits on sale of tenements - (1,172,838) Change in assets and liabilities Decrease in debtors 138,268 (101,187) 130,116 (101,187) Decrease/(lncrease) in inventories (884,987) 371,012 (884,987) 371,012 Decrease/(lncrease) in prepaid expenses (25,061) 13,497 (24,347) 13,497 Increase in gold on metals accounts (1,238,560) (20,756) (1,238,560) (20,756) Increase in deferred mining costs (1,543,930) (3,138,553) (1,543,930) (3,138,553) Increase in creditors 315,793 442,975 252,234 442,975 Increase in provision for employee entitlements 3,180 28,647 3,180 28,647 Increase in deferred gold sales and fees 915,684 - 915,684 -- Net cash provided by operating activities 4,741,588 6,496,694 4,761,379 6,496,694 30 EARNINGS PER SHARE Basic earnings per share (cents per share) 13.00 12.0 Diluted earnings per share (cents per share) 13.00 11.8 a) Weighted average number of ordinary shares outstanding during the year used in calculation of basic earnings per share 42,010,011 41,041,793
-52- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1994 (b) CLASSIFICATION OF SECURITIES Diluted earnings per share is calculated after classifying 922,000 options exercisable at below market price at balance date as potential ordinary shares. 121,000 options have not been considered dilutive as they are exercisable at above market price. 31 DIVIDENDS PAID AND PROPOSED
ECONOMIC ENTITY COMPANY 1994 1993 1994 1993 $ $ $ $ Interim ordinary dividend of 2.5 cents per share paid 28 February 1994 (unfranked 100% 1993 - unfranked 100%) 1,059,627 1,030,732 1,059,627 1,030,732 Proposed final ordinary dividend of 5 cents per share (fully franked, 1993 unfranked 100%) 2,114,615 1,457,935 2,114,615 1,457,935 ------------------------------------------------------------------------------------------------------ 3,174,242 2,488,667 3,174,242 2,488,667 ======================================================================================================
-53- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY STATEMENT BY DIRECTORS In the opinion of the directors of Gasgoyne Gold Mines N.L.: (a) the accompanying Profit and Loss account is drawn up so as to give a true and fair view of the results of the company for the financial year ended 30 June 1994; (b) the accompanying Balance Sheet is drawn up so as to give a true and fair view of the state of affairs of the company as at 30 June 1994; and (c) the accompanying consolidated accounts: (i) have been made out in accordance with Divisions 4A and 4B of Part 3.6 of the Corporations Law; and (ii) give a true and fair view of the matters dealt with by those Divisions; and (d) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its deters as and when they fall due. Signed in accordance with a resolution of the Directors. Dated at Perth this 14th day of October, 1994. P G CRABB Director RWCRABB Director -54- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY INDEPENDENT AUDIT REPORT TO THE MEMBERS AUDIT SCOPE We have audited the financial statements of Gasgoyne Gold Mines N.L. and of the economic entity for the year ended 30 June 1994 as set out on pages 25 to 47. The company's directors are responsible for the preparation and presentation of the financial statements and the information they contain. We have conducted an independent audit of these financial statements in order to express an opinion on them to the members of the company. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance as to whether the financial statements are free of material mix-statement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial statements and the evaluation-of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion as to whether, in all material respects, the financial statements are presented fairly in accordance with Australian Accounting Standards and statutory requirements so as to present a view of the company and of the economic entity which is consistent with our understanding of their financial position and the results of their operations and cash flows. The audit opinion expressed in this report has been formed on this basis. AUDIT OPINION In our opinion, the accounts of Gasgoyne Gold Mines N.L. and of the economic entity are properly drawn up: (a) so as to give a true and fair view of: (i) the state of affairs of the company and of the economic entity as at 30 June 1994 and of their results and cash flows for the year ended on that date; (ii) the other matters required by Divisions 4, 4A and 4B of Part 3.6 of the Corporations Law to be dealt with in the accounts; and (b) in accordance with the provisions of the Corporations Law; and (c) in accordance with applicable accounting standards. HORWATH & HORWATH R G HOWARD Chartered Accountants Partner Perth Partnership Perth, WA 15th October, 1994 -55- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY BALANCE SHEET AS AT MARCH 31, 1996 Consolidated
31/03/1996 $ CURRENT ASSETS Cash 11,710,261 Receivables 283,549 Investments 988,764 Inventories 3,148,703 Other 1,075,983 ------------ TOTAL CURRENT ASSETS 17,207,260 ------------ NON-CURRENT ASSETS Receivables 8,347,223 Investments 626,079 Property, plant and equipment 7,187,072 Intangibles 363,123 Other 18,448,376 ------------ TOTAL NON-CURRENT ASSETS 34,971,873 ------------ TOTAL ASSETS 52,179,133 CURRENT LIABILITIES Accounts payable 2,749,419 Borrowings 8,316,309 Provisions 3,448,723 Other 82,570 ------------ TOTAL CURRENT LIABILITIES 14,597,021 ------------ NON-CURRENT LIABILITIES Borrowings 55,702 Provisions 1,745,688 Other 134,255 ------------ TOTAL NON-CURRENT LIABILITIES 1,935,645 ------------ TOTAL LIABILITIES 16,532,666 ------------ NET ASSETS 35,646,467 ============ SHAREHOLDERS' EQUITY Share capital 6,525,906 Reserves 13,272,621 Retained profits 15,847,940 ------------ Shareholders' equity attributable to members of the chief entity 35,646,467 Outside equity interests in controlled entity - TOTAL SHAREHOLDERS' EQUITY 35,646,467 ============
The above balance sheet should be read in conjunction with the accompanying notes. -56- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY PROFIT AND LOSS ACCOUNT FOR THE 9 MONTHS ENDED MARCH 31, 1996 AND MARCH 31, 1995 Consolidated
Notes 31/03/1996 31/03/1995 $ $ Sales Revenue 25,145,705 23,443,091 Other Revenue 1,775,779 598,600 ------------- ------------- Total Operating Revenue $ 26,921,484 $ 24,041,691 ============= ============= Operating profit before abnormal items and income tax 2 8,566,261 9,542,991 Abnormal items before income tax 3 (922,999) ------------- ------------- Operating profit before income tax 7,643,262 9,542,991 Income tax attributable to operating profit 3,316,998 3,519,145 ------------- ------------- Operating profit after income tax 4,326,264 6,023,846 Outside equity interests in operating profit after income tax (68,216) (273,218) ------------- ------------- Operating profit after income tax attributable to members of the Chief Entity 4,394,480 6,297,064 Retained profits at the beginning of the reporting period 11,751,861 7,897,487 ------------- ------------- Total available for appropriation 16,146,341 14,194,551 Dividends provided for or paid 298,401 2,211,206 ------------- ------------- Retained profits at the end of the reporting period $ 15,847,940 $ 11,983,345 ============= =============
The above profit and loss account should be read in conjunction with the accompanying notes. -57- GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY STATEMENT OF CASH FLOWS FOR THE 9 MONTHS ENDED MARCH 31, 1996 AND MARCH 31, 1995 Consolidated
31/03/1996 31/03/1995 $ $ CASHFLOWS FROM OPERATING ACTIVITIES Receipts from customers 25,146,677 Payments to suppliers and employees (14,737,869) Dividends received 1,780 Interest received 822,442 Interest and other costs of finance paid (388,047) Income tax paid (4,987,332) ------------ ------------ Net cash provided by operating activities 5,857,651 9,918,064 ------------ ------------ CASHFLOWS FROM INVESTING ACTIVITIES Payment for mineral exploration and development (3,411,450) Payments for investments (823,062) Proceeds from sale of investments 388,359 Payment for property, plant and equipment (4,541,766) Proceeds from sale of equipment 151,493 Loans to other entities (6,151,928) ------------ ------------ Net cash used in investing activities (14,388,354) (8,692,862) ------------ ------------ CASHFLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares 1,583,258 Borrowings 8,300,000 Repayment of borrowings (16,354) Dividends paid (1,355,792) ------------ ------------ Net cash used in financing activities 8,511,112 (1,121,546) ------------ ------------ Net increase (decrease) in cash held (19,591) 103,656 Cash at beginning of the reporting period 11,729,852 12,159,398 Cash at the end of the reporting period 11,710,261 12,263,054 ============ ============
The above statement of cash flows should be read in conjunction with the accompanying notes. -58- Unaudited Pro Forma Consolidated Financial Statements The historical balance sheet and income statement information, included in the Coeur pro forma financial information that follows, has been adjusted "as if" the transaction, that occurred after the date of this historical information, had occurred at the date of the historical information. This pro forma information is intended to help readers understand the impact of the transaction by showing how the transaction might have affected the historical financial statements. The following Pro Forma Consolidated Balance Sheet as of March 31, 1996, and Pro Forma Consolidated Statements of Operations of Coeur for the three months ended March 31, 1996, and for the year ended December 31, 1995, give effect to the acquisition of the outstanding shares of Gasgoyne acquired by Coeur. The pro forma information is based on the historical financial statements of Coeur giving effect to the acquisition of shares of Gasgoyne and the assumptions and adjustments in the accompanying notes to the Pro Forma Financial Statements. Gasgoyne's net income for the twelve month period ended December 31, 1995, decreased by US$1.6 million (A$2.2 million) or 25%, as compared to the twelve month period ended June 30, 1995. The decrease is primarily due to a decrease in gold production at the Yilgarn mine, which reflects the mines transition from an open pit to an underground mining operation. Coeur believes that the reduced level of net income in 1995 is not indicative of the results to be achieved during the remainder of 1996 because the mine successfully completed the transition to an underground mine during the first quarter of 1996. The Pro Forma Consolidated Financial Statements have been prepared by the Company's management based on the historical financial statements of the Company. These Pro Forma Financial Statements may not be indicative of the results that actually would have occurred if the acquisition of shares had been in effect on the dates indicated or which may be obtained in the future. The Pro Forma Financial Statements should be read in conjunction with the historical financial statements and notes herein of Coeur an Gasgoyne for the periods covered. -59- UNAUDITED COEUR D'ALENE MINES CORPORATION PRO FORMA BALANCE SHEET
March 31, 1996 ---------------------------------------------------- ASSETS (In thousands) Historical Pro Forma Pro Forma Balance Note Adjustments Balances ------------- ------ --------------- ----------- CURRENT ASSETS (D) $ 18,968 Cash and cash equivalents $ 83,918 (B) ($ 18,968) $ 83,918 Funds held in escrow 2,271 2,271 Short term investments 98,122 98,122 Receivables 21,459 21,459 Inventories 29,432 29,432 --------- --------- --------- Total Current Assets 235,202 0 235,202 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment(net) 83,803 83,803 MINING PROPERTIES Operational mining properties(net) 119,436 119,436 Developmental properties 110,908 110,908 --------- --------- --------- 230,344 230,344 OTHER ASSETS Notes receivable 5,000 5,000 Debt issuance costs, net of accumulated amortization 4,548 4,548 Marketable securities 18,137 18,137 Investment in unconsolidated affiliate (B) 46,869 (B),(C) 413 47,282 Other 1,487 1,487 --------- -------- --------- Total 29,172 47,282 76,454 --------- -------- --------- $578,521 $ 47,282 $625,803 ========= ========= =========
See notes to unaudited Pro Forma Consolidated Financial Statements. -60- UNAUDITED COEUR D'ALENE MINES CORPORATION PRO FORMA BALANCE SHEET
March 31, 1996 ---------------------------------------------------- LIABILITIES AND SHAREHOLDERS Historical Pro Forma Pro Forma EQUITY (In thousands) Balance Note Adjustments Balances ------------- ------ --------------- ----------- CURRENT LIABILITIES Accounts payable - trade $ 3,434 $ 3,434 Accrued liabilities 7,207 7,207 Accrued interest 3,624 (D) 349 3,973 Accrued salaries & wages 3,959 3,959 Cash dividends payable 3,071 3,071 Current portion of obligations under capital leases 1,659 1,659 --------- --------- --------- Total Current Liabilities $ 22,954 349 $ 23,303 OTHER LIABILITIES Subordinated Convertible bonds payable - 6% 50,000 50,000 Subordinated Convertible bonds payable - 6.375% 100,000 100,000 Limited recourse project financing 24,000 24,000 Bank loan payable (D) 18,997 18,997 Deferred taxes 1,399 (E) (270) 1,129 Other LT Liability 9,695 9,695 --------- --------- --------- Total Long Term Liabilities $185,094 18,727 $203,821 SHAREHOLDERS' EQUITY Common stock par value $1.00 per share - authorized 60,000,000 shares, issued 21,524,093 including 1,059,211 shares held in treasury) 21,524 (B) 1,420 22,944 Preferred stock, par value $1.00 per share - authorized 10,000,000 shares, issued 6,588,235 6,588 6,588 Capital Surplus 372,090 (B) 26,452 398,542 Accumulated deficit (15,756) 334 (15,422) Repurchased and nonvested shares (13,244) (13,244) Unrealized gains(losses) on securities (729) (729) --------- --------- --------- Total Stockholders Equity 370,473 28,206 398,679 --------- --------- --------- Total Liabilities & Equity $578,521 $ 47,282 $625,803 ========= ========= =========
See notes to unaudited Pro Forma Consolidated Financial Statements. -61- UNAUDITED COEUR D'ALENE MINES CORPORATION STATEMENT OF OPERATIONS
For the three month period ended March 31, 1996 ---------------------------------------------------- ASSETS (In thousands) Historical Pro Forma Pro Forma Balance Note Adjustments Balances ------------- ------ --------------- ----------- INCOME From mine operations: Sale of concentrates and dore' $ 22,609 $ 22,609 Less cost of operations 19,596 19,596 --------- --------- --------- Gross Profits 3,013 3,013 OTHER INCOME Interest and other 1,931 1,931 Income from unconsolidated affiliate (B) 413 413 --------- --------- --------- Sub-Total 1,931 413 2,344 --------- --------- --------- Total Income 4,944 413 5,357 EXPENSES Administration 1,088 1,088 Accounting and legal 274 274 General corporate 1,650 1,650 Interest 684 (D) 349 1,033 Mining exploration 1,039 1,039 Idle facilities --------- --------- --------- Total Expenses 4,735 349 5,084 --------- --------- --------- Net Income from continuing operations before income taxes 209 64 273 Provision benefit for income taxes (76) (E) 270 194 --------- --------- --------- Net Income $ 133 $ 334 $ 467 ========= ========= ========= Earnings per Share Data: Weighted average number of shares of Common Stock and equivalents used in calculation 20,502 21,922 ========= ========= Income from continuing operations $ .01 $ .02 Income from discontinued operations --------- --------- Net Income $ .01 $ .02 ========= =========
See notes to unaudited Pro Forma Consolidated Financial Statements -62- UNAUDITED COEUR D'ALENE MINES CORPORATION STATEMENT OF OPERATIONS
For the year ended December 31, 1995 ---------------------------------------------------- ASSETS (In thousands) Historical Pro Forma Pro Forma Balance Note Adjustments Balances ------------- ------ --------------- ----------- INCOME From mine operations: Sale of concentrates and dore' $ 89,239 $ 89,239 Less cost of operations 72,210 72,210 --------- --------- --------- Gross Profits 17,029 17,029 OTHER INCOME Interest and other 9,504 9,504 Income from unconsolidated affiliate (B) 564 564 --------- --------- --------- Sub-Total 9,504 564 10,068 --------- --------- --------- Total Income 26,533 564 27,097 EXPENSES Administration 3,677 3,677 Accounting and legal 1,626 1,626 General corporate 6,207 6,207 Interest 9,746 (D) 1,395 11,141 Mining exploration 4,854 4,854 Idle facilities 1,481 1,481 --------- --------- --------- Total Expenses 27,591 1,395 28,986 --------- --------- --------- Net Income(Loss) from continuing operations before income taxes (1,058) (831) (1,889) (Provision) benefit for income taxes (200) (E) 468 (268) --------- --------- --------- Net Income (Loss) from continuing operations (1,258) (363) (1,621) Income from discontinued operations, net of applicable taxes 2,412 2,412 --------- --------- --------- Net Income(loss) $ 1,154 $ (363) $ (791) ========= ========= ========= Earnings per Share Data: Weighted average number of shares of Common Stock and equivalents used in calculation 15,888 16,998 ========= ========= Income(loss)from continuing operations $ (.08) $ (.09) Income from discontinued operations .15 .14 --------- --------- Net Income(loss) $ .07 $ .05 ========= =========
See notes to unaudited Pro Forma Consolidated Financial Statements -63- Notes to the Unaudited Pro Forma Consolidated Financial Statements Note A: The historical balance sheet and income statement information, included in the pro forma financial information preceding these notes, have been adjusted "as if" the transaction, that occurred after the date of this historical information, had occurred at the beginning of the period presented. This pro forma information is intended to help readers understand the impact of the transaction by showing how it might have affected the historical financial statements. The Pro Forma Consolidated Balance Sheet as of March 31, 1996, includes the effects of events that are directly attributable to the acquisition of Gasgoyne. The Pro Forma Consolidated Statements of Operations assume the acquisition had occurred as of the beginning of the period covered and include the effects of events that are directly attributable to the acquisition. The effective date of closing of the Gasgoyne transaction was April 17, 1996. Coeur's offer to acquire outstanding shares of Gasgoyne from the holders thereof, on a basis of seven shares of Coeur common stock plus A$96 in exchange for each 100 Gasgoyne shares, expired on April 17, 1996. Note B: The Company's investment in Gasgoyne is accounted for by the Equity Method. An analysis of this investment as of the beginning of the periods presented, is as follows:
3/31/96 12/31/95 --------- ---------- Investment in Gasgoyne prior to April 17, 1996, acquisition transaction $ 14,397 $ 14,397 Acquisition transaction: Cash Paid 15,699,782 15,699,782 Fair market value of Coeur common stock issued 27,886,297 27,886,297 Acquisition Costs 3,268,494 3,268,494 ------------ ------------ Investment in Gasgoyne 46,868,970 46,868,970 Equity in Earnings of Gasgoyne for periods presented 812,428 1,891,608 Less amortization of the excess of cost of the acquisition over the underlying equity in the net assets of Gasgoyne 399,127 1,328,265 ------------ ------------ Net carrying value of investment $47,282,271 $47,432,313 ============ ============
Average exchange rates used for the three months ended March 31, 1996 is US$.76 and US$.74 for the twelve months ended December 31, 1995. Coeur has excluded its share of non-recurring expenses of $125,136 and $119,946, respectively, attributed to Gasgoyne's net income related to the costs incurred in connection with the acquisition. Note C: The excess cost of the investment over the underlying equity in the net assets of Gasgoyne has been paid based on the potential value of Gasgoyne's mining properties. Coeur is currently amortizing the excess cost by the unit-of-production method. Approximately $399,000 and $1,328,000 was amortized for the periods ended March 31, 1996, and December 31, 1995, respectively. -64- Note D: The cash portion of the acquisition costs was financed by a loan facility provided by Rothschild Australia Limited and provides for a maximum of $50 million of borrowings at an annual interest rate equal to LIBOR plus 1.5%. The loan is collateralized by Coeur's shareholding in Gasgoyne. The agreement also contains certain financial covenants pertaining to Coeur. The pro forma's reflect the adjustment for the interest that would have been incurred on this debt for the respective periods presented. Note E: Income tax effects on the pro forma income are calculated based on Coeur's tax rate of 36% applicable to Federal and State income taxes adjusted for Coeur's ability to utilize net operating loss carryforwards in 1995. The tax provision is further determined on the basis that Coeur's equity in earnings of Gasgoyne is permanently invested in Australia. -65- -----END PRIVACY-ENHANCED MESSAGE-----