TIDMKGLD
RNS Number : 5750T
Kolar Gold Limited
30 March 2016
30 March 2016
Kolar Gold Limited
Half year results for six months ended 31 December 2015
(Unaudited)
& Strategic Review Update
Kolar Gold Limited ("Kolar Gold" or the "Company"), the Indian
focussed gold exploration and mine development company, announces
its unaudited results for the six months ended 31 December
2015.
The Company recorded a loss after tax for the period of
GBP533,065 (unaudited), (2014: loss after tax of GBP568,074). The
Company had GBP890,000 in cash and term deposits as at 31 December
2015 (2014: GBP2.4million).
The Company has, at the date of this report, the following
interests:
-- a shareholding of 23.4 per cent. in Geomysore Mining Services
(India) Private Limited ("GMSI");
-- a Right of First Refusal, in association with the Cooperative
Societies of Bharat Gold Mines Limited ("BGML") ex-employees, to
acquire the BGML mining assets at Kolar through a tender process to
be held by the owner, the Government of India;
-- cash balances of GBP623,000; and
-- outstanding liabilities in connection with changes to
executive management of approximately GBP92,000.
Review of operations
GMSI
Kolar Gold has a 23.4 per cent shareholding in GMSI as at the
date of this report.
During the period under review, GMSI continued to progress with
further exploration drilling, resource modelling and appraisal work
to assess the feasibility, scale and timing of constructing a
producing gold mine at Jonnagiri, for which GMSI has been granted a
30 year mining licence to mine 365,000 tonnes of gold ore per year.
The concerted drilling campaign undertaken at Jonnagiri, over the
Mining lease block including Temple Deep and the East Block,
totalled 15,800 metres. The drilling campaign was undertaken in
order both to increase the resource base and upgrade its
definition, and was completed in December 2015. The Jonnagiri
resource is divided into two parts: a prospective shallow open pit
mine at the East Block and a potential open pit and underground
mine at Temple Deep.
Since the half year end and following the completion of the
drilling and assaying programme Golder Associates, the Competent
Person for GMSI, has completed a detailed review of the exploration
programme which has identified approximately 150,000 ounces of JORC
compliant resource (Indicated and Inferred) and a potential mineral
exploration target of between 150,000 and 250,000 ounces at East
Block at a cut-off grade of 0.5g/t. The ore body has a strike
length of some 450 metres, with a potential extension of an
additional 100 metres to both the north and south, and has been
delineated to at least a depth of 150 metres below surface. Further
reverse circulation (RC or non-core) infill drilling is required to
define the strike and down dip extensions of the ore body more
accurately. In addition GMSI and its technical advisors will
compile a feasibility study in order to confirm the economic
viability of establishing a shallow open pit mine at East Block.
This entire work programme is expected to be completed by September
2016 assuming that GMSI receives the necessary funding of US$2.2
million from its shareholders including Kolar Gold. The current
assumption is that a proposed mine could commence production either
in the 4th quarter 2017 or in the 1st quarter of 2018, at a
production rate of some 15,000 ounces of gold a year.
The drilling results at Temple Deep have not confirmed or
improved the definition or quantum of the resource previously
believed to be present and the Competent Person Golder Associates
has recommended a re-scoping of the previous competent persons
report in order to assess the likely scale of the resource. The
earlier indications of a resource of 520,000 ounces that was
previously validated by SRK would need significant further drilling
to improve confidence levels and upgrade the mostly inferred
resource and also define its potential mineability. GMSI has
therefore decided to focus its activities currently at Jonnagiri
with the aim of bringing the East Block into production and open
the first new gold producing mine in India for decades.
GMSI requires further funding to undertake the additional
drilling work and complete the economic feasibility study in
relation to the East Block open pit mine and currently is seeking
to raise US$2.2 million from its shareholders at the same per share
valuation at which funds were raised last year, that valued GMSI at
US$18.0 million pre new money. Owing to its current cash position
Kolar Gold is unable to invest further in GMSI at this point in
time and would only be able to contemplate doing so if it was able
to raise additional funds. In the absence of Kolar Gold investing
additional capital into GMSI as part of the current round of US$2.2
million its shareholding will be diluted to 21.1 per cent.
In November 2014 Kolar Gold was granted an option to invest a
further US$2 million (GBP1.34 million) in GMSI within 12 months at
the same valuation as the most recent round of funding. As
previously disclosed the option expired during November 2015 and
has not been extended.
GMSI also has a number of other gold licences and applications
in India at different stages of development in some very
prospective areas including North, East and South Kolar Belt but to
progress these GMSI would require further capital.
Merger discussions with Deccan Gold Mines Limited ("DGM") remain
on hold though it is Kolar Gold's understanding that this
initiative may be reactivated but not before the end of 2016. The
logic of the merger, to create India's largest listed gold
exploration company, remains strong. Kolar Gold shareholders will
be kept fully informed of any further developments. The
achievability of obtaining a separate listing for GMSI shares on
the Bombay Stock Exchange will only become clearer once the
economic feasibility of constructing a mine at Jonnagiri is
known.
As at 31 December 2015, the Company valued its investment in
GMSI at GBP3.02 million (30 June 2015: GBP3.05 million).
BGML
The new MMDR Act that was recently promulgated in India has
opened up the possibility of reviving the BGML mine at State level,
and in February JMJ Minerals Private Ltd, a company formed by KGL's
partners, the United BGML ex-employees Union Society (Union),
exchanged an Expression of Interest with the Government of
Karnataka (GoK) for a project to exploit the tailings at BGML with
GoK's support. Direction from the Central Government and GoK is
awaited, and it is not clear whether GoK can progress on the
Expression of Interest exclusively with the Union as normal Indian
government selection procedures, including for joint ventures,
require a tender process. Kolar Gold continues to be in discussions
with the Union and the relationship, cultivated over a long period,
places us in a good position to participate in this project if
commercially and economically viable. The Company will report on
any progress over the coming months.
Cash Balances
As at 31 December 2015, the Company's cash balances were
GBP890,000 and at the date of this report were approximately
GBP623,000.
The Company is continuously monitoring the rate of cash usage to
ensure a balance between investment and achieving major milestones
and having sufficient working capital to remain a going
concern.
Allowing for the Company's reduced budgeted cost base and
excluding any further investment in GMSI there are sufficient funds
to continue operations until mid-2017.
Strategic review
On 8 December 2015 the board of Kolar Gold announced that it was
reviewing its strategic options with the intention of considering
all available opportunities for maximising value for
shareholders.
Kolar Gold has had various discussions with parties who might be
interested in investing in Kolar Gold or GMSI following the
announcement on 8(th) December.
The board of Kolar Gold has now concluded its review of its
strategic options. Having reviewed all strategic options available
to the Company, including a sale of the Company or its assets, its
key conclusions are as follows:
-- Although the board of Kolar Gold remains confident about the
future of GMSI it does not consider that Kolar Gold will be able to
raise capital with a strategy based solely on its Indian gold
interests;
-- The board has examined other opportunities which it considers
may be attractive and has concluded that diversifying its interests
by pursuing complementary opportunities initially focussed in
India, including in the fintech sector, would potentially enable
the Company to raise further capital.
The strategic review has now been completed and the Company is
no longer in an offer period under the Rules of the Takeover Panel
and accordingly the requirement to make Rule 8 disclosures has
ceased.
Looking ahead the board of Kolar Gold plans to pursue such
opportunities that are allied and complementary which it can
develop in parallel with its gold exploration and development
interests. It will also seek opportunities to raise further capital
in order to develop these opportunities in conjunction with its
interests in GMSI.
Board changes
During the period under review Nick Spencer, the CEO of Kolar
Gold, and the Company reached mutual agreement on the termination
of his employment contract and he resigned from the Board of Kolar
Gold on 8 December 2015 and is serving out the notice period to the
end of May 2016.
Non-executive director Stephen Coe resigned on 31 December 2015.
Stephen Oke has replaced Stephen Coe as Chairman of the Audit
Committee.
Key financials
The Company had GBP890,000 in cash deposits at period end.
The loss after tax for the period was GBP533,065, compared to
GBP568,074 for the six months to 31 December 2014 and GBP1,254,716
for the year to June 2015.
Corporate governance statement
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 08:45 ET (12:45 GMT)
The Company, being listed on AIM, is not required to comply with
the UK Corporate Governance Code ("the Code"). However, the Company
has given consideration to the main principles of the Code and the
Directors support the objectives of the Code and intend to comply
with those aspects that they consider relevant to the Group's size
and circumstances.
The Company now has completed its Strategic Review and is now
assessing its Board and management requirements and finalising the
appropriate committee and governance structures.
Going concern
These condensed consolidated interim financial statements have
been prepared on the basis of accounting principles applicable to
Kolar Gold being a "going concern" which assumes the Company will
continue in operation for at least 12 months from the date of these
interim financial statements and will be able to realise its assets
and discharge its liabilities in the normal course of
operations.
The Company currently has no source of operating cash inflow,
and has incurred net operating cash outflows for the 6 months ended
31 December 2015 of GBP527,777. As at 31 December 2015, the Company
had cash balances and term deposits of GBP890,439 and a surplus in
net working capital of GBP673,051.
The Directors have prepared cash flow forecasts for the next 15
months. These are based on the following key assumptions:
Ø no capital being raised, and no other cash inflow beyond
interest income.
Ø the forecast operating cash outflow is, after allowing for the
payment of accrued liabilities in connection with changes to
executive management, assumed to be in line with a reduced run rate
as a result of a number of recurrent savings currently being
implemented.
Ø no allowance has been made in these forecasts for any further
investment in GMSI, or for the funding of any other mining
opportunities within or outside India, including BGML, or any
funding required to pursue any complementary fintech
opportunities.
Ø as at the date of this report, the group has no commitment to
make further investments in GMSI or any other mining opportunity,
and any future investment is at the discretion of the Company.
Based on these cash flow forecasts, there are sufficient
funds to continue operations until approximately the
third quarter of calendar 2017. However, Kolar Gold
will have to raise additional funds under any or all
of the following scenarios:
* In the event that the Company wished to subscribe to
the current GMSI fundraising (i.e. not allow its
investment to be diluted) to complete the next phase
of drilling and the proposed feasibility study, the
potential cash call on Kolar Gold would be in the
region of GBP0.3 million. The potential contribution
from Kolar Gold to complete the construction of a
mine to the point of production could be in the order
of GBP1.75 million depending on the financing
structure available at that time. This contribution
would likely be required within 12 months of the
signing of these accounts to meet the current
assumption that production could commence in the 4th
quarter of 2017.
* The initial instruction by the Supreme Court that a
global tender be initiated for the revival of the
BGML gold mines was made in July 2013. To date, no
tender instructions have been issued, and the tender
process and timeline is not clear. In light of the
possible passing of the control of the sale process
to the State Government of Karnataka and the signing
of an Expression of Interest with our Union partners
it is not clear what funding may be required in order
to proceed with this going forward. The Company may
have to raise further funds in order to continue to
proceed with this process in the coming months.
* In the event that discussions about prospective
fintech opportunities are successful and in order to
develop the opportunity the Company will have to fund
development or acquisition costs.
In the longer term, the Group's ability to develop
and enhance its interests in India, via BGML, if its
tender bid is successful, and its stake in GMSI, including
bringing the Jonnagiri mining assets to commercial
production, will depend upon the ability of the Group
and its partners and/or GMSI to obtain further financing
through equity financing, debt financing or other
means. The Group will also require further funding
to execute the fintech strategy resulting from the
strategic review.
The Company will in any event require further cash
funding by early to mid 2017 and, if this is not forthcoming,
the directors may have to put into place an orderly
wind down of activities and disposal of assets leading
to cessation of the business.
The Board of Directors
Harvinder Hungin, Chairman of Kolar Gold Limited, commented:
"The news from GMSI in connection with the possibility of
building India's first operating mine by the end of 2017 is
promising. Commencement of production, if it can be achieved and
the required funding can be secured, would be a very significant
step in the development of not only GMSI but also for the Indian
gold sector. The strategic review has produced some exciting
opportunities in the fintech sector that the Board will be pursuing
which open up the possibility of raising further capital to meet
the Company's overall objectives. The recent uplift in the price of
gold is also encouraging. I hope to be able to report positive
developments in the near future."
For further information please contact:
Kolar Gold Limited
Harvinder Hungin +44 1481 702 400
N+1 Singer (Nomad and Broker)
James Maxwell / Jen
Boorer +44 20 7496 3000
Tavistock
Ed Portman / Nuala
Gallagher +44 20 7920 3150
About Kolar Gold Limited:
Kolar Gold is a partner and investor in an Indian gold
exploration and mine development company in India, GMSI, and is
also itself pursuing a gold project in the Kolar region in India,
the privatisation of BGML. The company's shares are traded on the
AIM market (Ticker: KGLD)
GMSI has a significant portfolio of gold permits and rights
across India. It has rights to 32 known gold mineralised project
areas including 22 granted Reconnaissance Permits, 2 Prospecting
Licences and 1 mining lease area covering a total of 12,568 square
kilometres in the states of Andhra Pradesh, Karnataka, Madhya
Pradesh and Tamil Nadu. GMSI has a gold mining lease at Jonnagiri
which was granted in October 2013.
Kolar Gold is also jointly pursuing, with the BGML mine employee
unions, the acquisition and revival of the historic BGML gold mine
in the Kolar Goldfields in Karnataka. The BGML gold mine had
produced 25 million ounces of gold over 120 years until its closure
in 2001.The Kolar Goldfields is one of the most prospective
underdeveloped Archaean Greenstone Belts in the world and is
considered comparable to the Archaean Greenstone Belts of South
Africa, Canada and Western Australia in geology, structure and
style of mineralisation.
Condensed consolidated statement of comprehensive income
(unaudited)
for the six months ended 31 December
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2015
2015 2014 (audited)
(unaudited) (unaudited)
GBP GBP
Note GBP
Administrative expenses (501,757) (592,883) (1,128,032)
Accretion/(Dilution)
of investment in associate 7 2,994 86,618 5,952
Loss from operating
activities (498,763) (506,265) (1,122,080)
------------- -------------- ------------
Finance income 6 3,234 12,231 30,128
Finance costs (3,569) (63) (74)
------------- -------------- ------------
Net finance costs (335) 12,168 30,054
------------- -------------- ------------
Share of loss of associate 7 (30,437) (73,977) (162,690)
Loss on disposal of
fixed assets (3,530) - -
------------- -------------- ------------
Loss before tax (533,065) (568,074) (1,254,716)
------------- -------------- ------------
Income tax expense - - -
------------- -------------- ------------
Loss for the period (533,065) (568,074) (1,254,716)
Other comprehensive
income
Foreign exchange translation
gains/(losses) (5,405) 6,176 (3,971)
------------- -------------- ------------
Total comprehensive
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income for the period (538,470) (561,898) (1,258,687)
============= ============== ============
Basic and diluted loss
per share (p) (0.51) (0.53) (1.18)
The condensed notes on pages 10 to 14 are an integral
part of the condensed consolidated interim financial
statements. Condensed consolidated statement of financial
position (unaudited)
as at 31 December
31 December 31 December 30 June
2015 2014 2015
GBP GBP GBP
Note (unaudited) (unaudited) (audited)
Non-current assets
Plant and equipment 5,802 11,152 10,549
Investment in associate 7 3,022,860 2,830,412 3,050,303
Total non-current assets 3,028,662 2,841,564 3,060,852
------------- ------------- -------------
Current assets
Prepayments and other
current assets 12,383 19,377 16,642
Trade and other receivables 16,289 12,037 6,950
Term deposits 434,251 928,765 931,994
Cash and cash equivalents 456,188 1,482,746 505,725
Total current assets 919,111 2,442,925 1,461,311
------------- ------------- -------------
Total assets 3,947,773 5,284,489 4,522,163
------------- ------------- -------------
Current liabilities
Trade and other payables 174,662 230,454 160,848
Employee benefits 71,398 113,199 117,146
Total current liabilities 246,060 343,653 277,994
------------- ------------- -------------
Non-current liabilities
Employee benefits - 3,864 3,986
------------- ------------- -------------
Total non-current liabilities - 3,864 3,986
------------- ------------- -------------
Total liabilities 246,060 347,517 281,980
------------- ------------- -------------
Net assets 3,701,713 4,936,972 4,240,183
============= ============= =============
Equity
Share capital 8 7,440,546 7,440,546 7,440,546
Share premium reserve 15,690,724 15,690,724 15,690,724
Reserves 3,827,315 3,842,867 3,832,720
Accumulated losses (23,256,872) (22,037,165) (22,723,807)
------------- ------------- -------------
Total equity 3,701,713 4,936,972 4,240,183
============= ============= =============
These financial statements were approved by the Board
of Directors on 30 March 2016 and were signed on its
behalf by:
Harvinder Hungin
Chairman
The condensed notes on pages10 to 14 are an integral part of the
condensed consolidated interim financial statements.
Condensed consolidated statement of changes in equity
(unaudited)
for the six months ended 31 December
Share Share Options Foreign Accumulated Total
capital premium reserves currency losses equity
reserve translation
reserve
(Unaudited) GBP GBP GBP GBP GBP GBP
Balance at 1
July 2015 7,440,546 15,690,724 3,838,027 (5,307) (22,723,807) 4,240,183
Total comprehensive
income for the
period
Loss for the
period - - - - (533,065) (533,065)
Other comprehensive
income - foreign
exchange translation
variances - - - (5,405) - (5,405)
---------- ----------- ---------- ------------- ------------- ------------
Total comprehensive
income for the
period: - - - (5,405) (533,065) (538,470)
---------- ----------- ---------- ------------- ------------- ------------
Contributions
by and distributions
to owners:
Issue of ordinary
shares - - - - - -
Equity-settled
transactions
for the period - - - - - -
---------- ----------- ---------- ------------- ------------- ------------
Total contributions
by and distributions
to owners: - - - - - -
---------- ----------- ---------- ------------- ------------- ------------
Balance at 31
December 2015 7,440,546 15,690,724 3,838,027 (10,712) (23,256,872) 3,701,713
(Audited)
Balance at 1
July 2014 7,440,546 15,690,724 3,838,027 (1,336) (21,469,091) 5,498,870
Total comprehensive
loss for the
year
Loss for the
year - - - - (1,254,716) (1,254,716)
Other comprehensive
income - foreign
exchange translation
variances - - - (3,971) - (3,971)
---------- ----------- ---------- ------------- ------------- ------------
Total comprehensive
loss for the
period: - - - (3,971) (1,254,716) (1,258,687)
---------- ----------- ---------- ------------- ------------- ------------
Contributions
by and distributions
to owners:
Equity-settled
transactions
for the period - - - - - -
---------- ----------- ---------- ------------- ------------- ------------
Total contributions
by and distributions
to owners: - - - - - -
---------- ----------- ---------- ------------- ------------- ------------
Balance at 30
June 2015 7,440,546 15,690,724 3,838,027 (5,307) (22,723,807) 4,240,183
========== =========== ========== ============= ============= ============
The condensed notes on pages 10 to 14 are an integral part of
the condensed consolidated interim financial statements.
Condensed consolidated Statement of Cash Flows (unaudited)
for the six months ended 31 December
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2015
2015 2014 (audited)
(unaudited) (unaudited)
GBP GBP GBP
Cash flows from operating
activities
Loss for the period (533,065) (568,074) (1,254,716)
Adjustments for:
Depreciation 792 2,251 2,854
Share of loss of associate 30,437 73,977 162,690
(Accretion)/Dilution of
investment in associate (2,994) (86,618) (5,952)
Net finance costs/(income) (3,234) (10,619) (30,054)
Unrealised foreign exchange
(gains)/losses 17,757 8,234 15,431
Loss on disposal of assets 3,530 - -
------------- -------------- ------------
Operating loss before changes
in working capital and provisions (486,777) (580,849) (1,109,747)
Change in trade and other
receivables (9,339) (2,802) 2,285
Change in other current
assets 4,259 5,330 8,065
Change in trade and other
payables 13,814 (105,586) (175,192)
Change in employee benefits (49,734) (28,806) (24,737)
------------- -------------- ------------
Cash used in operating activities (527,777) (712,713) (1,299,326)
Interest and finance costs
paid - (63) (74)
------------- -------------- ------------
Net cash used in operating
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March 30, 2016 08:45 ET (12:45 GMT)
activities (527,777) (712,776) (1,299,400)
------------- -------------- ------------
Cash flows from investing
activities
Interest received 3,234 10,682 16,074
Proceeds from disposal of
fixed assets 1,297 - -
Funds (placed on)/taken
off term deposit 497,743 1,131,471 1,128,242
Payments for investment
in associate - (314,754) (704,024)
Payments for plant and equipment (873) - -
------------- -------------- ------------
Net cash used in investing
activities 501,401 827,399 440,292
------------- -------------- ------------
Cash flows from financing
activities
Proceeds from issues of
equity securities - - -
Net cash from financing
activities - - -
------------- -------------- ------------
Net increase/(decrease)
in cash and cash equivalents (26,376) 114,623 (859,108)
Foreign exchange gain/(loss)
on closing cash balances (23,161) (2,058) (5,348)
Cash and cash equivalents
at 1 July 505,725 1,370,181 1,370,181
------------- -------------- ------------
Cash and cash equivalents
at 31 December 456,188 1,482,746 505,725
============= ============== ============
The condensed notes on pages 10 to 14 are an integral part of
the condensed consolidated interim financial statements.
Kolar Gold Limited
Notes to the condensed consolidated interim financial
statements
for the six months ended 31 December 2015
1 Reporting entity
Kolar Gold Limited (the 'Company') is a company
incorporated and registered in Guernsey and its
shares are traded on AIM in London. The condensed
consolidated interim financial statements of the
Company as at and for the six months ended 31
December 2015 comprises the Company and its subsidiaries
(together referred to as the "Group"). The Group
primarily is involved in the exploration and development
of mining assets in the Kolar Belt with GMSI,
its Indian partner, and the potential acquisition
of the mining assets of BGML from the GoI.
The consolidated annual financial report of the
Group as at and for the year ended 30 June 2015
is available upon request from the Company's registered
office at Dorey Court, Admiral Park, St Peter
Port, Guernsey GY1 2HT
2 Statement of compliance
These condensed consolidated interim financial
statements have been prepared in accordance with
IAS 34 Interim Financial Reporting. They do not
include all of the information required for full
annual financial statements and should be read
in conjunction with the consolidated financial
statements of the Group as at and for the year
ended 30 June 2015.
These condensed interim consolidated financial
statements were approved by the Board of Directors
on 30 March 2016.
3 Significant accounting policies
The accounting policies applied by the Group in
these condensed consolidated interim financial
statements are the same as those applied by the
Group in its consolidated financial statements
as at and for the year ended 30 June 2015.
4 Going concern
These condensed consolidated interim financial
statements have been prepared on the basis of
accounting principles applicable to Kolar Gold
being a "going concern" which assumes the Group
will continue in operation for at least 12 months
from the date of these interim financial statements
and will be able to realise its assets and discharge
its liabilities in the normal course of operations.
The Group currently has no source of operating
cash inflow, and has incurred net operating cash
outflows for the 6 months ended 31 December 2015
of GBP527,777. As at 31 December 2015, the Group
had cash balances and term deposits of GBP890,439
and a surplus in net working capital of GBP673,051.
The Directors have prepared cash flow forecasts
for the next 15 months. These are based on the
following key assumptions:
Ø no capital being raised, and no other cash
inflow beyond interest income.
Ø the forecast operating cash outflow is,
after allowing for the payment of accrued liabilities
in connection with changes to executive management,
assumed to be in line with a reduced run rate
as a result of a number of recurrent savings currently
being implemented.
Ø no allowance has been made in these forecasts
for any further investment in GMSI, or for the
funding of any other mining opportunities within
or outside India, including BGML, or any funding
required to pursue any complementary fintech opportunities.
Ø as at the date of this report, the group
has no commitment to make further investments
in GMSI or any other mining opportunity, and any
future investment is at the discretion of the
Company.
Based on these cash flow forecasts, there are sufficient
funds to continue operations until approximately the
third quarter of calendar 2017. However, Kolar Gold
will have to raise additional funds under any or all
of the following scenarios:
* In the event that the Company wished to subscribe to
the current GMSI fundraising (i.e. not allow its
investment to be diluted) to complete the next phase
of drilling and the proposed feasibility study, the
potential cash call on Kolar Gold would be in the
region of GBP0.3 million. The potential contribution
from Kolar Gold to complete the construction of a
mine to the point of production could be in the order
of GBP1.75 million depending on the financing
structure available at that time. This contribution
would likely be required within 12 months of the
signing of these accounts to meet the current
assumption that production could commence in the 4th
quarter of 2017.
* The initial instruction by the Supreme Court that a
global tender be initiated for the revival of the
BGML gold mines was made in July 2013. To date, no
tender instructions have been issued, and the tender
process and timeline is not clear. In light of the
possible passing of the control of the sale process
to the State Government of Karnataka and the signing
of an Expression of Interest with our Union partners
it is not clear what funding may be required in order
to proceed with this going forward. The Company may
have to raise further funds in order to continue to
proceed with this process in the coming months.
* In the event that discussions about prospective
fintech opportunities are successful and in order to
develop the opportunity the Company will have to fund
development or acquisition costs.
In the longer term, the Group's ability to develop
and enhance its interests in India, via BGML, if its
tender bid is successful, and its stake in GMSI, including
bringing the Jonnagiri mining assets to commercial
production, will depend upon the ability of the Group
and its partners and/or GMSI to obtain further financing
through equity financing, debt financing or other
means. The Group will also require further funding
to execute the fintech strategy resulting from the
strategic review.
The Company will in any event require further cash
funding by early to mid 2017 and, if this is not forthcoming,
the directors may have to put into place an orderly
wind down of activities and disposal of assets leading
to cessation of the business.
5 Estimates
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions
that affect the application of accounting policies and
the reported amounts of assets, liabilities, income and
expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management
in applying the Group's accounting policies and the key
sources of estimation uncertainty were the same as those
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 08:45 ET (12:45 GMT)
that applied to the consolidated financial statements
as at and for the year ended 30 June 2015.
6 Net finance income
Six months
ended Year ended
Six months
31 December ended 30 June 2015
31 December
2015 2014 (audited)
(unaudited) (unaudited)
GBP GBP GBP
Interest income 3,234 10,682 30,128
Net gain on financial -
instruments designated
as fair value
------------- -------------- -------------------------
3,234 10,682 30,128
============= ============== =========================
7 Investment in associates
As at 30 June 2015 the Company held a 24.7% equity interest
in GMSI, with a carrying value of GBP3,050,303. The Company
made no additional investment in GMSI during the reporting
period and held a 24.6% interest in GMSI at the half
year balance sheet date which reduced to 23.4% following
the final share issues resulting from the earlier funding.
In November 2014 Kolar Gold was granted an option to
invest US$ 2 million in GMSI within 12 months. This option
was not exercised and has now lapsed.
GMSI now needs to raise further funds of US$ 2.2 million
in order to undertake the next phase of required drilling
at Jonnagiri, prepare mining feasibility studies for
the East Block and manage ongoing operations. If GMSI
fails to raise such funds then the value of our investment
in GMSI could be adversely affected.
The Board has reviewed the impact of the above factors
on the carrying value of this investment and resolved
that there has been no impairment to this investment
during the period.
GMSI will continue to be accounted for as an associate
because, while the Group has significant influence over
GMSI, it does not have control, and it will be accounted
for on an equity accounting basis.
The carrying value of the investment in an associate
is determined as follows:
Investment in an associate GBP
Carrying value as at 30 June
2015 3,050,303
Accretion of investment 2,994
Share of loss of associate (30,437)
--------------
Carrying value as at 31 December
2014 3,022,860
==============
8 Share capital
Ordinary shares
(Nominal value 7p per
share)
Six months Year ended
ended 30 June 2015
31 December (audited)
2015
(unaudited) '000
'000
Opening
balance 106,294 106,294
Issued
during the
year - -
Closing
balance 106,294 106,294
============== ====================
No shares were issued during the period.
All shares issued by the Company are 'ordinary'
shares and rank equally in all respects, including
for dividends, shareholder attendance and voter
rights at meetings, on a return of capital and
in a winding-up.
Dividends
No dividends were declared nor paid during the
six months ended 31 December 2015 (2014: nil).
9 Share-based payments
a) Options
The Company has issued options to directors to
compensate them for services rendered and incentivise
them to add value to the Group's longer term share
value.
No options were issued and no options expired
during the reporting period.
The following unexpired options existed as at
31 December 2015.
Name Date of Ordinary Expiry Exercise
Grant Shares under Date Price
option GBP
Harvinder
Hungin 10.6.11 450,000 10.06.16 0.40
Stephen
Coe* 10.6.11 350,000 10.06.16 0.40
Stephen
Oke 10.6.11 350,000 10.06.16 0.40
Harvinder
Hungin 31.12.12 150,000 31.12.17 0.0838
Stephen
Coe* 31.12.12 125,000 31.12.17 0.0838
Stephen
Oke 31.12.12 125,000 31.12.17 0.0838
Harvinder
Hungin 27.11.13 150,000 27.11.18 0.0638
Stephen
Coe* 27.11.13 125,000 27.11.18 0.0638
Stephen
Oke 27.11.13 125,000 27.11.18 0.0638
1,950,000
=============
* Options granted to Stephen Coe will lapse
on 31 March 2016 under the terms of the Company's
option plan
b) Warrants
No warrants were issued during the period.
There were no unexercised warrants existed as
at 31 December 2015 (2014: nil).
10 Operating segments
The Group currently has one operating segment,
being the exploration for gold in India.
11 Subsequent events
There have been no other significant events
subsequent to the balance sheet date to report
that would alter the financial statements as
at 31 December 2015 or require disclosure.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR AKKDQBBKDBNN
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