TIDMMOE
RNS Number : 4528X
Moto Goldmines Limited
14 August 2009
"Not for dissemination in the United States or through any US newswire
service"
NEWS RELEASE
FOR IMMEDIATE RELEASE
TSX Code - MGL
AUGUST 14, 2009 AIM Code - MOE
ISSUE OF JUNE 30, 2009 INTERIM QUARTER FINANCIAL
STATEMENTS
AND
MANAGEMENTS DISCUSSION AND ANALYSIS
PERTH, WESTERN AUSTRALIA -
Moto Goldmines Limited ("Moto") has today issued consolidated financial
statements and management's discussion and analysis for the quarter ended June
30, 2009.
The management's discussion and analysis and the Consolidated Balance Sheets,
Consolidated Statements of Operations and Deficit, Consolidated Statement of
Comprehensive Income and Accumulate Comprehensive Income and Consolidated
Statements of Cash Flows are included below. Complete copies of these documents
are available on the Company's website www.motogoldmines.com and will be made
available under the Company's profile on SEDAR at www.sedar.com.
For further information in respect of the Company's activities, please contact:
+-----------------------------------------+--------------------------------------+
| Andrew Dinning | Mark Arnesen |
+-----------------------------------------+--------------------------------------+
| President and Chief Operating Officer | Financial Director and Chief |
| | Financial Officer |
+-----------------------------------------+--------------------------------------+
| Tel: +61 8 9273 4222 | Tel: +61 8 9273 4222 |
+-----------------------------------------+--------------------------------------+
| email: adinning@motogoldmines.com | email: marnesen@motogoldmines.com |
| | |
+-----------------------------------------+--------------------------------------+
Moto Goldmines Limited website: www.motogoldmines.com
+------------------------------------------------------+---------------------------------------------------+
| Nominated advisor for the purposes of AIM: | RFC Corporate Finance Ltd |
| | Steve Allen |
| | Tel: +61 8 9480 2508 |
| | email: Steve.Allen@rfc.com.au |
| | |
+------------------------------------------------------+---------------------------------------------------+
| AIM Broker | GMP Securities Europe LLP |
| | James Cassley |
| | Tel: +44 207 647 2803 |
| | email: james.cassley@gmpeurope.com |
+------------------------------------------------------+---------------------------------------------------+
Management's Discussion and Analysis
The following is a discussion and analysis of the financial position and results
of operations of Moto Goldmines Limited (the "Company") and its subsidiaries
(the "Group" or "Moto") for the quarter ended June 30, 2009. This information is
presented as of August 13, 2009. The discussion should be read in conjunction
with the unaudited consolidated financial statements of the Company as at and
for the six months ended June 30, 2009 and the audited consolidated financial
statements of the Company as at and for the year ended December 31, 2008 and the
notes thereto. The Company's consolidated financial statements have been
prepared in accordance with Canadian generally accepted accounting principles.
The Company uses the Australian dollar as its reporting currency. References
below to "$" or "A$" refer to Australian dollars. Certain financial information
relating to the Company or the Group set out below originates in Canadian
dollars ("C$") or US dollars "("US$") and has been translated into Australian
dollars based on prevailing exchange rates.
The Company is continued under the Business Corporations Act (British Columbia).
The Company's securities are listed for trading on the Toronto Stock Exchange
(the "TSX") and the AIM market of the London Stock Exchange plc ("AIM").
Additional information about the Company and its business activities, including
the Company's most recent annual information form, being the amended and
restated annual information form for the year ended December 31, 2008, and
technical report prepared in accordance with Canadian National Instrument
43-101("NI 43-101") regarding the Moto Gold Project, is available under the
Company's profile on SEDAR at www.sedar.com.
Cautionary Statement Regarding Forward-Looking Statements and Material
Assumptions
Certain statements and information contained in this discussion and analysis
that are not historical facts constitute "forward-looking statements" and
"forward-looking information", including but not limited to statements and
information with respect to the estimation of mineral resources and mineral
reserves, the development of mineral deposits, the price of mineral commodities,
the timing and amount of estimated future production, costs of production,
reserve determination and reserve conversion rates and Moto's financial
resources, as well as statements and information regarding the proposed merger
of the Company and Randgold Resources Limited ("Randgold") by way of a statutory
plan of arrangement.. Often, but not always, forward-looking statements and
forward-looking information can be identified by the use of words such as
"plans", "expects", "is expected", "budget", "scheduled", "estimates",
"forecasts", "projects", "seeks", "intends", "anticipates", or "believes", or
variations (including negative variations) of such words and phrases, or state
that certain actions, events or results "may", "could", "would", "might ", or
"will" be taken, occur or be achieved. Forward-looking statements and
information involve known and unknown risks, uncertainties and other factors and
events that are not within the control of Moto, which may cause the actual
results, performance or achievements of Moto to be materially different from
those expressed or implied by such forward-looking statements and information.
Such factors include, among others, the actual results of current exploration
activities, access to capital, changes in project parameters as plans continue
to be refined and future prices of gold, as well as those factors disclosed in
the Company's Annual Information Form, under the heading "Risk Factors", which
is available under the Company's profile on SEDAR at www.sedar.com, and with
respect to the proposed merger of the Company and Randgold, risks related to the
integration of the combined companies. See also item 15, "Risks and
Uncertainties", below. There can be no assurance that the forward-looking
statements and information contained in this discussion and analysis will prove
to be accurate as actual results and future events could differ materially from
those anticipated in such statements.
The material factors or assumptions used to develop certain forward-looking
information contained in this Management's Discussion and Analysis are that the
Moto Gold Project will be successfully developed, mineralisation previously
disclosed in respect of the Moto Gold Project will be proven to be economic,
anticipated metallurgical recoveries will be achieved, future evaluation work
will confirm the viability of deposits identified in the Project and future
required regulatory approvals will be obtained. Assumptions upon which
forward-looking statements or information regarding the proposed merger of the
Company and Randgold are based include that Moto and Randgold will be able to
satisfy the conditions in the definitive agreement, that required approvals will
be obtained from the shareholders of Moto, that all third party regulatory and
governmental approvals to the transaction will be obtained and all other
conditions to completion of the transaction will be satisfied or waived.
1. Summary of Key Business Activities and Achievements
Moto is a mineral exploration and development group. Moto's principal asset is
its interest in the Moto Gold Project (the "Moto Gold Project" or "Project"),
details of which are set out in section 2 below. During the three month period
ended June 30, 2009, Moto focussed on the following key areas:
* the continued progress of the Moto Gold Project towards construction and
operations;
* the transfer of the 10 Exploitation Permits that cover the area that relate to
the Project (the "Exploitation Permits") from Moto's joint venture partner,
Okimo, directly into the name of the Project's joint venture company, Kibali
Goldmines s.p.r.l ("Kibali Goldmines"); and
* entering into an arrangement agreement with Red Back Mining Inc ("Red Back") for
a merger of the Company and Red Back by a statutory plan of arrangement during
the period and, subsequent to the period end, a proposal by Randgold for a
merger by statutory plan arrangement, which resulted in the Company terminating
the transaction with Red Back in accordance with its terms and entering into an
arrangement agreement with Randgold.
On May 28, 2009 the Company announced that the Exploitation Permits had been
registered in the name of Kibali, which was a significant milestone and step
forward for Moto and for the Project. Okimo has been issued shares in Kibali
Goldmines representing 30 per cent. of the issued capital and Moto has paid the
pas de porte of US$4.5 million, half of which was paid to the DRC government and
the balance was paid to Okimo.
Moto continues to monitor the regional security situation and notes that there
has been a decrease in the frequency and severity of sporadic incidents of
unlawful activity being carried out by remnants of the Lord's Resistance Army
("LRA") within the area of influence of the Project site. As a precautionary
measure, Project site security has been upgraded and the site continues to
operate in a fully functional manner with drilling and other site activities
recommencing in April 2009.
With the completion of the optimised feasibility study (the "Optimised
Feasibility Study" or "OFS") for the Moto Gold Project in March 2009, Moto has
shifted Project and operational focus to development and execution activities
with the principal area of focus being resettlement planning, road
reconstruction work, execution planning and infill drilling of underground
mineral resources.
Other key achievements during the quarter and up to the date of this report
include:
* Finalisation of the tripartite agreement between the Company, Okimo and Société
d'Organisation, de Participation et de Management ("Orgaman")(the "Tripartite
Agreement") and payment of the first instalment of US$10 million in respect of
the Assignment of the Okimo Receivable (the "Assignment Agreement"), involving
the assumption by Moto of a debt owed by Okimo to Orgaman in the approximate
amount of US$31.5 million and Euro 1.6 million (as at December 31, 2008),
subject to certification (the "Okimo Loan"), which became payable upon the
execution of the Tripartite Agreement. Moto elected to pay 50 per cent. of the
first instalment through an issue of Common Shares at C$4.452 per share
resulting in the issuance to Orgaman of 1,300,539 Common Shares.
* Moto operated continually through the quarter and as a matter of course
continues to monitor and assess the regional security situation. Since the
beginning of the quarter Moto has seen a decline in frequency and severity of
unlawful incidents involving the LRA and recent indications are that the LRA
threat is moving away from the region in which Moto operates. Moto will continue
to monitor the situation and ensure its assets and operations are adequately
secured against any potential threats.
* Despite the delay in the commencement of activities on site due to the security
situation around the site, Project pre-development activities on site continued
to be advanced as planned. In particular, the Project team continued to advance
the community development and resettlement plan, including on the ground census
and survey work, which is nearing completion and will form the basis of the
resettlement action plan.
* Drilling continued to convert and upgrade the Chauffeur Deeps zone where Moto
expects to generate significant high grade mineral reserves over the next twelve
months that are situated in close proximity to planned underground
infrastructure. Assessment of recent drill results indicates that over 15
million tons of high grade mineral reserves may be defined within this zone
which also remains open down dip with potential to add materially to current
mineral resources. Elsewhere within defined mining areas, drilling is also being
undertaken to facilitate mine development and is particularly focussed on ore
scheduled in the first three years of production.
* Moto's social and community programs remained ongoing with major construction
works focused around road building, including the rehabilitation of the road
linking Watsa to the Project and also the road linking the Project area to
Uganda. Moto has continued to work on other programs, which include the multi
phase malaria management program, as well as general health and HIV education
and awareness programs and the assistance and support of key community
infrastructure including schools, dispensaries and clinics.
* On April 27, 2009, the Company completed an equity raising, through a short form
prospectus offering on a "bought deal" basis with a syndicate of brokers co-led
by GMP Securities L.P. and BMO Capital Markets. As a result of the equity
raising, the Company issued 17,860,000 Common Shares at C$2.80 per share for
gross proceeds of approximately C$50 million and net proceeds of approximately
C$47.1. On May 15, 2009, the over-allotment option to purchase up to an
additional 2,679,000 Common Shares to cover over-allotments, if any, and for
market stabilization purposes (the "over-allotment option") was exercised in
full by the Underwriters. The over-allotment option has raised additional gross
proceeds of approximately C$7.5 million and net proceeds of approximately C$7.1
million.
* On June 1, 2009 the Company and Red Back entered into an arrangement agreement
providing for the exchange of each common share of the Company for 0.45 of a
common share of Red Back. Subsequently, the Company received an un-solicited
offer from Randgold (as noted below) which was deemed to be superior to the Red
Back proposal. As a result, in accordance with the terms of the arrangement
agreement entered into with Red Back, on August 5, 2009 the Company terminated
the agreement with Red Back and paid a termination fee to Red Back of C$15.25
million.
* On August 5, 2009, following termination of the arrangement agreement with Red
Back and payment of a termination fee, as described above, the Company and
Randgold entered into an arrangement agreement (the "Arrangement Agreement")
providing for the exchange of each outstanding common share of the Company for
the equivalent of C$4.84 per share (as at August 4, 2009) on the basis of each
Moto common share being exchanged for 0.07061 of a Randgold ordinary share or
American Depositary Share ("ADS") of Randgold (the "Randgold Transaction").
Further details are provided below.
Randgold Transaction
The Company and Randgold have entered into the Arrangement Agreement which
provides for the exchange of each outstanding common share of the Company for
the equivalent of C$4.84 per share (as at August 4, 2009) on the basis of each
the Company's common share being exchanged for 0.07061 of a Randgold ordinary
share or Randgold ADS.
Under the Randgold Transaction, the Company's shareholders will receive 0.07061
of an ordinary share of Randgold (or, where applicable, 0.07061 of an ADS of
Randgold) per Moto common share. In addition, Moto shareholders will have the
option to elect to receive (in lieu of Randgold shares or ADSs) cash
consideration of US$4.47 per Moto common share in respect of all or some of
their Moto common shares, subject to proration based on an aggregate maximum
cash amount payable to all Moto shareholders under the Randgold Transaction of
US$244 million (the "Cash Election"). Assuming full take-up of the Cash
Election, Randgold expects to issue a total of approximately 3.9 million shares
(including shares represented by ADSs) , representing approximately 4.6% of
Randgold's shares in issue following closing, and pay a total cash amount of
approximately US$244 million to Moto shareholders. If no Moto shareholders make
the Cash Election, Randgold expects to issue approximately 7.8 million shares
(including shares represented by ADSs), representing approximately 8.6% of
Randgold's shares in issue following closing.
Immediately prior to accepting the Randgold Transaction, the Company terminated
the existing arrangement agreement with Red Back in accordance with its terms
and initiated payment to Red Back of the agreed termination fee of C$15.25
million. The voting agreements of the Company's directors and officers regarding
the Red Back transaction were also terminated.
The Company's Board of Directors has unanimously recommended that the
shareholders and optionholders of the Company vote in favour of the Randgold
Transaction. Concurrently with the Company entering into the Arrangement
Agreement with Randgold, the directors and officers of the Company have entered
into voting agreements in respect of the Randgold Transaction (representing an
aggregate of 2,782,472 million shares (2.5%) of the Company). Together with the
support of shareholders of the Company representing an aggregate of 39.4 million
shares, a total of 42.2 million shares, or 38.2% of the issued and outstanding
common shares of the Company, have agreed to support the Randgold Transaction.
The Company has been advised by Randgold that Randgold and AngloGold Ashanti
Limited ("AngloGold") have agreed to cooperate in respect of the Randgold
Transaction, which includes an agreement by AngloGold to fully fund the Cash
Election in partial payment for an indirect 50% interest in the Company, which
it will acquire upon completion of the Randgold Transaction. The Company has
been further advised by Randgold that, following completion of the Randgold
Transaction, AngloGold will be jointly responsible with Randgold for funding the
development of the Moto Gold Project for the collective benefit of the
shareholders of all three companies and that Randgold will be appointed operator
of the Project.
Randgold has represented to the Company that Randgold and AngloGold have
received the full support from their respective boards of directors for the
Randgold Transaction and that neither Randgold nor AngloGold requires
shareholder approval in order to proceed with the Randgold Transaction.
If the Company's shareholders elect to receive, in aggregate, more than the
maximum aggregate amount of cash offered under the Randgold Transaction, (a) the
amount of cash consideration available to Moto shareholders making the Cash
Election will be allocated pro rata among all Moto shareholders making valid
Cash Elections; and (b) each Moto shareholder making a valid Cash Election will
instead receive Randgold ordinary shares (or ADSs, as applicable) in exchange
for the remainder of their Moto shares for which they did not receive cash due
to proration.
Entitlements to fractions of a Randgold share (or ADS, as applicable), as well
as the entitlements of any Moto shareholders who are resident in any
jurisdictions where it is or may be unlawful for them to receive Randgold shares
(or ADS, as applicable), will be paid in cash pro rata to entitlements, based on
a whole Randgold share being valued at US$63.26, and such cash payments, if any,
will not reduce the amount available to pay the Cash Election.
The Arrangement Agreement includes a commitment by the Company not to solicit or
initiate discussions concerning alternative transactions, including the sale of
material assets. The Company has agreed to pay a termination fee of
US$14,627,300 to Randgold in certain circumstances and has granted Randgold the
right to match competing offers. Randgold has agreed to reimburse the Company
for the Red Back termination fee in certain circumstances where the Randgold
Transaction does not close. Each party has also been provided with certain other
rights, representations and warranties and covenants customary for a transaction
of this nature.
The Randgold Transaction, which will be effected by way of a statutory plan of
arrangement of Moto's shareholders and optionholders under British Columbia
corporate law, is subject to certain customary conditions, including the receipt
of all necessary court and regulatory approvals, third party consents and the
approval of the Randgold Transaction by not less than 66 2/3% of the outstanding
shares and options of the Company, voting as a single class and a simple
majority of the votes cast in person or by proxy by Moto shareholders at the
special meeting that will be called to approve the Randgold Transaction.
It is anticipated that the meeting of Moto's shareholders will be held in
October, 2009, and subject to approval by shareholders and optionholders and the
British Columbia Supreme Court, the transaction will complete by mid-October,
2009.
Full details of the Randgold Transaction will be included in a Moto Management
Information Circular to be filed with applicable Canadian securities regulatory
authorities and mailed to Moto shareholders in accordance with applicable
Canadian securities laws. The Company expects to mail the Management Information
Circular by mid-September 2009.
A copy of the Arrangement Agreement is available under the Company's profile on
SEDAR at www.sedar.com.
2. The Moto Gold Project
Overview
The Moto Gold Project is located in the Moto goldfields in the north-east of the
Democratic Republic of the Congo ("DRC"), some 560 kms north east of the city of
Kisangani and 150 kms west of the Ugandan border town of Arua. The Project
covers an area of approximately 1,836 sq. kms and is a joint venture between the
Company, Border Energy Pty Ltd (a wholly owned Moto subsidiary) and Okimo with
Kibali Goldmines being the joint venture company.
Tenure
On May 28, 2009, the Company announced that the transfer of the Exploitation
Permits from Okimo into the name of Kibali Goldmines had been completed. During
the registration process, the Project area was revised from 2,143 carrés to
2,161 carrés (approximately 1,836 sq. kms) to take into account the requirement
for the transfer of whole carrés as required by the DRC Mining Code. The
Exploitation Permits are now held directly by and for the benefit of Kibali
Goldmines. Upon completion of the transfer of the Exploitation Permits, the
Company paid the US$4.5 million pas de porte as required, as to one-half to the
DRC Government and the balance to Okimo.
Additional information regarding Moto's contractual relationships in the DRC can
be found in the Company's most recent annual information form, being the amended
and restated annual information form for the year ended December 31, 2008, which
is available on the Company's website, www.motogoldmines.com, and under the
Company's profile on SEDAR at www.sedar.com.
Exploration
As noted in Section 1, Summary of Key Business Activities and Achievements,
drilling on site recommenced in April 2009. Moto will continue to concentrate on
refining and enhancing the underground mineral resource model, upgrading
inferred mineral resources to support underground mine design and increase the
underground mining reserve and tightening up drilling and geological information
in areas that have been identified as requiring further confirmatory
information.
Following the completion of the OFS in March 2009, the Moto Gold Project's
mineral reserves now stand at 42.3 million tonnes grading 4.0g/t for 5.5 million
ounces of gold (all probable mineral reserves). Cube Consulting Pty Ltd (open
pit mining) and SRK Consulting Pty Ltd (underground mining) calculated these
mineral reserves using the Australian standard of resource classifications,
JORC, which are equivalent to the CIM classifications used in Canada in
accordance with NI 43-101.
Operational Activities
The objectives of the OFS, announced in early March 2009, were to reduce
pre-production capital expenditure and improve the economics of the Project. The
inclusion of underground mining and a reconfiguration of the Project's feed
schedule are the key areas that were. The reconfiguration of the Project enabled
the engineering team to focus on value rather than throughput which in turn has
resulted in the mining schedule now being grade rather than tonnes driven.
Social and community planning consultants were appointed to undertake social and
community baselines and impact assessments for the OFS. This work is being used
to build a community development and resettlement action plan for the
construction phase in line with international standards and also the Moto's long
term sustainability planning.
During the quarter, reconstruction and repair works on the Doko to Arua road, a
160 km section of road linking the Project site to Ugandan service
infrastructure, recommenced with activity increasing above recent levels. Moto
anticipates recommencing full reconstruction work on this road in the final
quarter of 2009, following the onset of the dry season. During this calendar
year, the Project development activities at site are likely to include
construction of additional accommodation facilities, necessary infrastructure
works and community development and resettlement works (in line with the
community development and resettlement plan currently being finalised).
Moto continued to advance its social and community development programs, despite
the delays in the re-opening of site operations. Moto is reviewing its social
and community development programs in order to prioritise key projects that will
return the most value to the local communities, however, Moto is committed to
continuing the ongoing educational programs including HIV and personal health
and hygiene campaigns, and ongoing work and interaction with local NGOs and
women's groups. Moto continued with the implementation of a multi phase malaria
management program.
With the delays to the Project resulting predominantly from uncertainties
created by the DRC Mining Contracts Review Process and to a lesser extent the
regional security issues experienced in the first half of 2009, there have been
considerable delays to key critical path items. Moto is working towards key
financing activities, Project approvals and the commencement of critical path
development items, including the community development and resettlement action
plan.
As previously reported, Moto has an obligation to its joint venture partner,
Okimo, to provide assistance under the Revised Technical and Financial
Assistance Contract (the "Revised ATF Contract") to enable Okimo to generate
income from its own exploitation activities. Works on the rehabilitation of the
N'Zoro hydro-electrical plant and the exploitation of the "Durba Tailings" were
commenced early in 2009 with first production expected in the third quarter of
2009.
3.Selected Financial Information
The table below sets forth selected financial data relating to the quarters
ended and the six months ended June 30, 2009, and June 30, 2008 and the year
ended December 31, 2008. This financial data is extracted from the Company's
unaudited consolidated financial statements and the Company's audited annual
consolidated financial statements for December 31, 2008, which are prepared in
accordance with Canadian GAAP. All amounts in the discussion are in Australian
dollars unless otherwise stated.
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| | Quarter ended | Six Months |
+---------------------------------------+-------------------------+----------------------------------------+
| | Jun 30, | Jun 30, | Jun 30, | Jun 30, |
| | 2009 | 2008 | 2009 | 2008 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| | $ | | | $ |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Revenue | 230,017 | 371,162 | 303,626 | 603,562 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Other Income | 3,155,043 | - | 3,155,043 | - |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Operating Expenses | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Employees and consultants | 4,970,378 | 968,289 | 5,810,186 | 1,806,053 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Amortization | 261,575 | 181,863 | 555,383 | 364,217 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Occupancy | 87,826 | 48,735 | 160,027 | 127,013 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Shareholder and listing costs | 28,422 | 255,804 | 155,145 | 385,608 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Marketing and promotion | 419,218 | 205,623 | 676,160 | 433,305 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Stock based compensation | 1,035,211 | 569,335 | 1,460,740 | 1,126,205 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Interest | 885,410 | 666,119 | 1,889,524 | 1,459,830 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Foreign exchange loss / (gain) | 712,996 | 586,767 | 1,086,009 | (387,904) |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Other expenses | 142,516 | 122,362 | 254,080 | 227,418 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Net loss before non-controlling | 5,472,078 | 3,233,735 | 8,902,171 | 4,938,183 |
| interest, dilution loss and taxes | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Non-controlling interest | (1,361,350) | - | (1,361,350) | - |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Dilution loss | 49,456,648 | - | 49,456,648 | - |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Future income tax recoveries | (113,164) | - | (113,164) | - |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Net loss | 53,461,698 | 3,233,735 | 56,891,791 | 4,938,183 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Comprehensive income | (240,475) | - | (240,475) | - |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Total comprehensive loss | 53,221,223 | 3,233,735 | 56,651,316 | 4,938,183 |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| | | |
+---------------------------------------+-------------------------+----------------------------------------+
| | Cents per share |
+---------------------------------------+------------------------------------------------------------------+
| Basic loss per share1 | 51.44 | 3.75 | 59.41 | 6.25 |
| - Net loss | 51.21 | 3.75 | 59.16 | 6.25 |
| - Total comprehensive loss | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| | Jun 30, | Dec 31, | | |
| | 2009 | 2008 | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Balance sheet (millions) | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Balance Sheet total assets | 297 | 260 | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Total Long-term liabilities | 71 | 36 | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Shareholders' equity | 210 | 193 | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Cash flow (millions) | | | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
| Net cash inflow/(outflow) | 31 | 29 | | |
+---------------------------------------+-------------+-----------+--------------------+-------------------+
Note
1 The basic loss per share on a diluted basis is not reported as it is
considered ant-dilutive.
Moto is at the development stage and has no sales revenue. Expenditure is funded
by equity raisings and is partially offset by interest revenue earned on
interest bearing cash deposits. As at June 30, 2009 Moto had cash and cash
equivalents of A$55.3 million compared to A$24.8 million at March 31, 2009 and
A$54.7 million at December 31, 2008. Cash resources are being used in the
exploration and development of the Project, which result in a consistent
decrease in cash resources each quarter, with the exception of those quarters
where capital raisings were completed (recently being the June 2008 and June
2009 quarters). With a significant portion of Moto's cash being held in United
States and Canadian dollars, any weakening of the Australian dollar against
those currencies will mitigate some of the normal quarterly cash reduction. At
June 30, 2009 Moto held approximately 18.8% of its cash and cash equivalents in
Australian dollars, 76.5% in United States dollars, 3.7% in Canadian dollars and
the remaining 1.0% in Pound Sterling and local currencies in the countries in
which Moto operates (including the Congolese Franc and the Ugandan Shilling).
Cash balances as at June 30, 2009 are held on short-term deposit (up to 60 days)
with the National Australia Bank, Barclays Commercial Bank in London and Bank of
Montreal in Canada. Cash is also typically held in a variety of bank deposits
with Banque Commerciale du Congo and other national banks of the DRC and Uganda
in order to service short-term operating commitments in these countries (these
funds do not exceed US$1.0 million).
4. Discussion of Operations and Expenditure
Comparison - Quarter ended June 30, 2009 to the quarter ended June 30, 2008 and
comparison of the six months ended June 30, 2009 and June 30, 2008
Moto had a total comprehensive loss for the quarter ended June 30, 2009 of
$53,221,223 compared to a total comprehensive loss of $3,233,735 for the quarter
ended June 30, 2008. Moto had a total comprehensive loss for the six months
ended June 30, 2009 of $56,651,316 compared to a total comprehensive loss of
$4,938,183 for the six months ended June 30, 2008.
The results for the quarter and six months ended June 30, 2009 compared with the
quarter and six months ended June 30, 2008 reflect the following factors:
* Revenue for the June 2009 quarter, when compared to the June 2008 quarter and to
the March 2009 quarter is impacted as summarized below:
* Interest income for June 2009 quarter is below that of the June 2008 quarter due
to the fall in interest rates on all three of the primary currencies held by
Moto. On a quarter by quarter basis, the interest revenue for the March 2009 and
June 2009 quarters is consistent.
* Kibali Goldmines holds a receivable from its joint venture partner, Okimo, for
monies advanced to Okimo, including advances made pursuant to the Revised ATF
and as agreed to fund certain Okimo employee provisions. Under Canadian GAAP
this loan has been discounted to the present value of the expected repayments as
at June 30, 2009. The recorded discount is then unwound over the anticipated
term of the loan, which results in finance accretion revenue being recorded.
This revenue amounted to A$135,819 during the June 2009 quarter.
* In addition to the finance accretion, Kibali Goldmines earns interest on parts
of the loan receivable with Okimo at 9 per cent. per annum. Part of the loan
receivable with Okimo is subject to an interest free period of 12 months, ending
March 9, 2010. Interest on this loan totalled $26,783 for the quarter to June
2009.
* Other income is a new presentation category for the income statement and
reflects the gain made by the Company on the initial recognition of its
investment in Kilo Goldmines Limited ("Kilo Goldmines"), a public company listed
on the TSX Venture Exchange ("TSX-V"). The gain of $3,155,043 represents the
market value when Kilo Goldmines commenced trading on the TSX-V on April 21,
2009. There are no prior period comparisons as previously stated, April 21, 2009
was the first point of recognition for this investment.
* The employee and consultants costs for the June 2009 quarter are significantly
above that of the June 2008 quarter and that of the March 2009 quarter. This
increase is due primarily to two one off charges to the income statement, being
the payment of US$2 million for the final consultancy fees due to Générale
Industrielle et Commerciale au Congo ("GICC"), the payment of C$800,000 of
director and senior executive bonuses and additional financial advisors' and
legal fees that were incurred due to the corporate activities, primarily
associated with the Red Back arrangement agreement. Employee costs are
consistent with prior quarters as there have been no material movements in staff
levels.
* The amortisation expense for Moto is impacted by the level of capital purchases
during the quarter and by foreign currency movements as the majority of assets
are held by Kibali Goldmines, which is required to report in United States
dollars. The amortisation expense for the June 2009 quarter was higher than the
June 2008 quarter as a result of both of these factors. Although the Australian
dollar has appreciated against the United Stated dollar since the end of the
March 2009 quarter, the Australian dollar remains at lower levels against the
United States dollar when compared to the same period in 2008. As previously
reported, Kibali Goldmines has completed and commissioned a significant
extension to the on-site laboratory facilities, which have now begun to be
depreciated. When compared to the March 2009 quarter, the amortisation expense
is lower, due to the above mentioned appreciation of the Australian dollar.
* Occupancy costs for the June 2009 quarter are consistent with the March 2009
quarter, however these are higher than the June 2008 quarter. This is primarily
because the June 2008 quarter represented only two months of office rent for the
Perth office. There have been no material movements in occupancy costs or the
factors that influence them.
* Shareholder and listing costs for the June 2009 quarter are significantly lower
in the June 2008 quarter, which is due to the June 2008 quarter including large
additional listing costs associated with the capital raising that occurred in
April 2008. Although the Company has again raised capital during the June 2009
quarter, the additional listing costs associated with this capital raising have
been offset against the gross proceeds and included in the share capital number
in the balance sheet. This is also why the six months to June 2009 are below the
six months to June 2008.
* Marketing and promotional costs for the June 2009 quarter are above both the
June 2008 and March 2009 quarters. These additional costs in the June 2009
quarter are the result of additional in person board meetings held immediately
before and after the Company's annual general meeting. In addition, acceptance
of the transaction with Red Back resulted in additional travel & accommodation
costs being incurred during this period for general marketing of the Company and
of the merger proposal.
* Moto incurs the majority of its expenditures in United States dollars, Canadian
dollars and Australian dollars. Moto maintains its cash holdings in these
currencies to match future expenditures and existing liabilities. The foreign
exchange loss of $712,996 for the June 2009 quarter (compared to a loss of
$373,013 for the March 2009 quarter and a loss of $586,767 for the June 2008
quarter) primarily reflects the movements in the rates of exchange in these
currencies against the reporting currency (Australian dollars) on Moto's cash
holdings and the Company's liability in respect of the Assignment Agreement for
the Okimo Loan (which is primarily denominated in United States dollars).
* Stock based compensation costs for the June 2009 quarter are above both the
March 2009 quarter and the June 2008 quarter. The stock based compensation costs
represent the monthly amortisation charges resulting from the issue of stock
options to directors, staff and consultants that contain vesting conditions. In
addition, some options will vest immediately, resulting in an immediate charge
to the income statement. In April and May 2009 the Company completed a capital
raising and as a result a total of 1,026,950 options were issued to the
Company's Chairman, Sam Jonah, KBE. One-third of these options vested
immediately, resulting in the June 2009 quarter having a significant stock based
compensation costs when compared to the March 2009 and June 2009 quarters. This
is also the reason why on a six month basis the June 2009 period is ahead of the
June 2008 period.
* Interest accrues on the amounts due to Orgaman under the Assignment Agreement at
the rate of 8 per cent. per annum and is compounded annually. This interest
charge and resulting capitalisation to the loan amounts due will result in a
higher interest expense each year when compared to the prior year. As the
consideration payable is denominated primarily in United States dollars, on
conversion to Australian dollars these movements can be materially impacted.
Whilst the interest expense for the June 2009 quarter is higher than the June
2008 quarter when compared in United States dollars, this increase does not on
its own explain the movement when compared in Australian dollars. The other
factor influencing this interest charge is the Australian dollar, which was
considerably weaker against the United States dollar during the June 2009
quarter, when compared to the June 2008 quarter, and as a result the interest
expense as translated to Australian dollars is considerably above that of the
prior year's quarter. When compared to the March 2009 quarter, the Australian
dollar did appreciate against the United States dollar, so the June 2009 quarter
interest expense is not as high as the March 2009 quarter when converted to
Australian dollars.
* The other expenses for the June 2009 quarter are materially consistent with the
June 2008 and March 2009 quarters.
* During the June 2009 quarter, Kibali Goldmines, recapitalised, resulting in
10,000,000 shares being on issue at US$1.00 per share. Okimo has been issued
3,000,000 of these shares (representing 30 per cent.) which has resulted in the
recognition of a 'Non-Controlling Interest' at the consolidated Group level. The
initial recognition of the 'Non-controlling interest' has resulted in a dilution
loss in the income statement for the Group of $49,456,648. The dilution loss is
the result of the difference between the US$3 million of share capital issued to
Okimo and the value of Okimo's 30% interest in the net identifiable assets of
Kibali Goldmines at the time of the transaction. To calculate the net
identifiable assets of Kibali Goldmines, the inter-company loan between Kibali
Goldmines and the Company's wholly-owned subsidiary, Moto Goldmines Australia
Pty Ltd, was not included in the liabilities of Kibali Goldmines.
* The non-controlling interest line in the income statement represents Okimo's
share of the losses of Kibali Goldmines since it was issued the share capital
until June 30, 2009. There is no prior quarter or prior year comparisons.
* The Company has recorded a future income tax recoveries item in relation to the
future income tax liability that has been recorded on the mark to market
adjustment in relation to the investment in Kilo Goldmines as described below.
As the Company has available tax losses or pools to offset any future taxes, the
income tax liability associated with the mark to market adjustment has been
reduced to zero with a corresponding future income tax recovery recorded in the
current periods net loss.
* As noted above, the Company recognised its investment in Kilo Goldmines for the
first time on April 21, 2009. The Company has recorded a mark to market
adjustment for the movement in the market value of this investment from April
21, 2009 to the period end, being June 30, 2009. This has resulted in an
additional gain of $353,639, which net of future income tax liabilities of
$113,164 represents a comprehensive income item of $240,475.
The loss per share for the June 2009 quarter is the result of a higher loss, due
primarily to the dilution loss, which is only partially offset by the higher
number of shares now on issue.
Proceeds from Capital Raisings
Recently, the Company has raised capital in April 2008 and April/May 2009. A
Short Form Prospectus ("SFP") was prepared for both capital raisings and can be
found under the Company's profile on SEDAR at www.sedar.com.
In both SFPs the Company provided a table of how the proceeds were expected to
be used, including what amount was expected to be spent on exploration &
drilling, value engineering, pre-development works, road & other construction
works, repayments of the indebtedness due to Orgaman under the Assignment
Agreement for the Okimo Loan, government surface rentals, administrative &
general expenses and payments to its joint venture partner (Okimo).
As Moto has no significant cash generating activities, the use of the funds from
capital raisings is critical to the achievement of the Moto's objectives in
relation to the development of the Moto Gold Project. In relation to the April
2008 capital raising, and as noted in prior Management's Discussions & Analysis,
including for the March 2009 quarter and the December 2008 year end, a
significant amount of funds had to be re-allocated from some of the planned
activities to other areas primarily associated with Moto making its way through
the DRC Mining Commission review process. However, Moto is satisfied that
despite these funds being used differently than expected, Moto was still able to
meet its core objectives. This was in part aided by the additional funds that
had been raised from the April 2008 'over-allotment' option being exercised in
full. However, the Company is aware that had these funds been available for the
original purpose as noted in the 2008 SFP, the Company would not have been
required to raise funds as early as April/May 2009.
In relation to the April/May 2009 capital raising, the Company has again been
aided by the 'over-allotment' option being exercised in full, which raised an
additional net proceeds of approximately C$7.1 million.
However, the recent corporate events in relation to Red Back and the Randgold
Transaction have resulted in a significant divergence from the planned use of
proceeds from the April/May 2009 capital raising. On August 5, 2009, in
connection with the termination of the Red Back arrangement agreement in order
to be able to enter into the Arrangement Agreement with Randgold, the Company
was required to pay a termination fee to Red Back of C$15.25 million, which has
had a significant impact on the Moto's cash resources. The Company was able to
conserve some cash resources upon the first instalment of US$10 million coming
due in respect of the Assignment Agreement for the Okimo Loan by paying only
US$5 million in cash and the remaining 50 per cent. to Orgaman by the issuance
of Moto Common Shares.
Moto has continued to progress its planned activities (as was anticipated in the
SFP for the April/May 2009 capital raising), so that it is able to make all
possible efforts to continue to achieve its key objectives. The Company
acknowledges that in addition to the Red Back termination fee discussed above,
the Company has incurred considerable expenditure in connection with the Red
Back and Randgold proposals in terms of experts, consultants, marketing and
legal costs, and that this will mean that the Company will be forced to seek
further funding earlier than was anticipated or to delay some expenditure if the
Randgold Transaction is not successful.
5. Summary of Quarterly Results
The financial performance, financial position and operating statistics for the
last eight quarters are shown in the table below. This financial data is
extracted from the Company's audited and unaudited consolidated financial
statements, which are prepared in accordance with Canadian GAAP. All amounts in
the discussion are in Australian dollars unless otherwise stated.
+---------------+------------+-----------+-----------+---------+-----------+-----------+-----------+-----------+
| | Jun 09 | Mar 09 | Dec 08 | Sep 08 | Jun 08 | Mar 08 | Dec 07 | Sep 07 |
+---------------+------------+-----------+-----------+---------+-----------+-----------+-----------+-----------+
| | Quarter | Quarter | Quarter |Quarter | Quarter | Quarter | Quarter | Quarter |
+---------------+------------+-----------+-----------+---------+-----------+-----------+-----------+-----------+
| | $ | $ | $ | $ | $ | $ | $ | $ |
+---------------+------------+-----------+-----------+---------+-----------+-----------+-----------+-----------+
| Revenue | 230,017 | 73,609 | 420,988 | 299,835 | 371,162 | 232,400 | 439,607 | 468,880 |
+---------------+------------+-----------+-----------+---------+-----------+-----------+-----------+-----------+
| Loss | 53,461,698 | 3,430,093 | 9,119,607 | 81,069 | 3,233,735 | 1,704,448 | 2,919,549 | 2,740,763 |
+---------------+------------+-----------+-----------+---------+-----------+-----------+-----------+-----------+
| - Basic | 51.44 | 3.9 | 10.41 | 0.09 | 3.75 | 2.37 | 4.64 | 4.44 |
| loss per | | | | | | | | |
| share | | | | | | | | |
| (cents) | | | | | | | | |
+---------------+------------+-----------+-----------+---------+-----------+-----------+-----------+-----------+
| Comprehensive | 53,221,223 | 3,430,093 | 9,119,607 | 81,069 | 3,233,735 | 1,704,448 | 2,919,549 | 2,740,763 |
| loss | | | | | | | | |
+---------------+------------+-----------+-----------+---------+-----------+-----------+-----------+-----------+
| - Basic | 51.21 | 3.9 | 10.41 | 0.09 | 3.75 | 2.37 | 4.64 | 4.44 |
| loss per | | | | | | | | |
| share | | | | | | | | |
| (cents) | | | | | | | | |
+---------------+------------+-----------+-----------+---------+-----------+-----------+-----------+-----------+
The diluted loss per share is not reported as it is considered anti-dilutive.
Significant factors in respect of the quarterly results are:
* Many of the above quarters are significantly impacted by the movements of the
United States and Canadian dollars against the Australian dollars, which result
in material foreign exchange gains or losses. For example, when comparing the
June 2009 quarter to the June 2008 quarter, the June 2009 had a recorded foreign
exchange loss of $869,906, whereas the June 2008 quarter had a foreign exchange
loss of $586,767 (this loss is 48% higher for the June 2009 quarter). The
movements of these currencies can also impact other costs for Moto when
translated to Australian dollars, such as the interest charged on the Okimo
Loan.
* Stock based compensation costs can vary depending on the number of options
issued during a period, the value of the options and the vesting conditions
attached to the options, which results in a varying expense resulting from the
amortisation of these costs. The June 2009 quarter had a significant stock
based compensation cost as a result of the 1,026,950 options issued to the
Company's Chairman, one-third of which vested immediately.
* General costs of the activities of Moto have steadily increased from early 2007
till mid 2008, but have stabilised since that time.
* The June 2009 quarter recorded higher consultants costs as a result of the
payment of the GICC consulting fee of US$2 million and the payment of bonuses to
Directors (and one senior Moto executive) totalling C$800,000.
* As previously disclosed, significantly higher costs in the December 2008 quarter
were due to the treatment of the initial US$2 million consulting fee paid
to GICC and as a result of the one-off charge made to other costs associated
with the write-off of costs previously capitalised to mineral properties, which
was undertaken as part of establishing Kibali Goldmines as the Moto Gold Project
joint venture company.
* The June 2009 quarter is the first quarter to be impacted by the
'Non-controlling Interest' held by Okimo in Kibali Goldmines. The loss reported
above and the basic loss per share are both after the recognition of the
'Non-controlling Interest'. This initial recognition has resulted in a dilution
loss of $49,456,648 which is ultimately the largest contributing factor to the
June 2009 quarter.
* As mentioned above, the Company has recorded comprehensive income for the first
time on the mark to market adjustment on the Kilo Goldmines investment. As a
result the table above now includes both the net loss from operations and the
total comprehensive loss. There are no comparisons for the comprehensive income
for the prior periods.
6. Discussion of Cash Flows, Liquidity and Financial Position
Moto funds its exploration and development activities primarily through equity
fund raisings by the Company. As discussed in more detail below, given the
Moto's current working capital and contractual commitments, Moto expects it will
require additional funds to be raised within the next year.
+-----------------+--------------+-------------+--------------+--------------+
| | Quarter ended | Six Months Ended |
+-----------------+----------------------------+-----------------------------+
| | Jun 30, | Jun 30, | Jun 30, | Jun 30, |
| | 2009 | 2008 | 2009 | 2008 |
+-----------------+--------------+-------------+--------------+--------------+
| | $ | $ | | |
+-----------------+--------------+-------------+--------------+--------------+
| | | | | |
+-----------------+--------------+-------------+--------------+--------------+
| Operating | (7,319,743) | (3,717,370) | (9,622,080) | (5,384,570) |
| activities | | | | |
+-----------------+--------------+-------------+--------------+--------------+
| | | | | |
+-----------------+--------------+-------------+--------------+--------------+
| Investing | (14,407,102) | (7,405,474) | (42,257,971) | (24,817,917) |
| activities | | | | |
+-----------------+--------------+-------------+--------------+--------------+
| | | | | |
+-----------------+--------------+-------------+--------------+--------------+
| Financing | 56,609,032 | 55,119,797 | 56,609,032 | 63,895,279 |
| activities | | | | |
+-----------------+--------------+-------------+--------------+--------------+
Cash Flows
* Operating cash flows for the June 2009 quarter where higher when compared to the
June 2008 quarter. The additional cash outflow is carried over when comparing
the six months to June 2009 and the six months to June 2008. The additional cash
outflow is due to the higher consulting and employee costs (discussed above) and
the decrease in accounts payable and accrued liabilities early in the 2009
financial year.
* Investing activities for the six months to June 2009 and for the June 2009
quarter are above the six months to June 2008 and the June 2008 quarter due to
the following:
* The June 2009 quarter was impacted by the payment of US$4.5 million pas de porte
by the Company. This payment was due and made upon the successful transfer of
the Exploitation Permits to Kibali Goldmines.
* The six months to June 2009 was impacted by the payment of the outstanding
historical surface rentals of US$3.1 million owed by Kibali Goldmines in the
first quarter and significant other payments resulting from the completion of
the DRC Mining Contracts Review process.
* The six months to June 2009 quarter also show outflows of $4,426,826 ($632,532
for the June 2009 quarter), which represents payments made to Okimo in relation
to the Revised ATF Contract and the payment of Okimo's share of the outstanding
historical surface rentals of US$2.0 million.
* Moto had agreed to pay Okimo a premium of US$5.0 million (the "Consolidation
Payment") upon registration of the Consolidated Lease in respect of the
Exploitation Permits with DRC Mining Registry, which occurred prior to the
Exploitation Permits being transferred into the name of Kibali Goldmines. The
Company pre-paid US$2.25 million of the Consolidation Payment and paid the
balance of the Consolidation Payment during the March 2009 quarter. This payment
resulted in an A$5,432,657 of cash outflow relating to investing activities.
* The six months to June 2009 and the June 2009 quarter were also impacted heavily
by the weaker Australian dollar against the United States dollar during these
periods when compared to the June 2008 periods. As the bulk of the expenditures
on mineral properties are made in United States dollars, the translation to
Australian dollars has resulted in higher expenditures being recorded.
* Financing activities are impacted by the following:
* The June 2008 and June 2009 quarter had significant capital raising activities.
In addition, the March 2008 quarter was impacted by the receipt of net proceeds
of approximately A$8.8 million from the Company's Chairman, Sam Jonah, KBE, from
the private placement to him of Common Shares in the Company which was announced
on December 31, 2007.
* There were no financing activities during the March 2009 quarter.
Liquidity and Capital Resources and Commitments
Moto funds its exploration and development activities primarily through equity
fund raisings. As noted above, in April 2009 the Company raised net proceeds of
approximately C$46.7 million from a short form prospectus offering. The
over-allotment option was exercised in full on May 15, 2009 and resulted in
additional net proceeds of approximately C$7.1 million.
Moto had working capital as at June 30, 2009 of A$39.8 million (as at March 31,
2009, working capital was A$8.2 million and as at December 31, 2008, working
capital was A$24.7 million).
Commitments under the Revised ATF Contract, together with the commitment to
provide a loan to Okimo to fund payment of amounts due to Okimo employees,
provide a total capital commitment of approximately US$10 million, which Moto
expects will be incurred/paid over approximately one/two years.
The Company is also committed to paying the remaining balance due in respect of
the Assignment Agreement for the Okimo Loan of US$25.1 million, plus interest,
in two payments over two years or within 7 business days of the completion of a
change of control of the Company.
The table below sets forth Moto's contractual obligations, converted to
Australian dollars:
+--------------------------------+-----------+-----------+---------+---------+---------+
| | Principal Payments Due by Period (A$ million) |
| Financial Obligations | |
| | |
+ +-----------------------------------------------------+
| | Total |Less than | 1 - 3 | 4 - 5 |After 5 |
| | | 1 year | years | years | years |
+--------------------------------+--------------------------------+-----------+-----------+---------+---------+
| Payment due to Orgaman in | 31.2 | 12.4 | 18.8 | - | - |
| respect of the Assignment | | | | | |
| Agreement (for the Okimo Loan) | | | | | |
| (i) | | | | | |
+--------------------------------+-----------+-----------+---------+---------+---------+
| Lease rental payments (ii) | 26.0 | 5.2 | 10.4 | 10.4 | - (ii) |
+--------------------------------+-----------+-----------+---------+---------+---------+
| Surface rental payments (iii) | 6.8 | 1.4 | 2.7 | 2.7 |- (iii) |
| | | | | | |
+--------------------------------+-----------+-----------+---------+---------+---------+
| Okimo Employee Provisions (iv) | 3.5 | 2.1 | 1.4 | - | - |
+--------------------------------+-----------+-----------+---------+---------+---------+
| Revised ATF Contract | 7.8 | 7.8 | - | - | - |
| Obligations (v) | | | | | |
+--------------------------------+-----------+-----------+---------+---------+---------+
| Total Contractual Obligations | 75.3 | 28.9 | 33.3 | 13.1 | - |
+--------------------------------+-----------+-----------+---------+---------+---------+
* The Tripartite Agreement became effective on June 26, 2009, as a result of which
the first instalment in respect of the Assignment Agreement (for the Okimo Loan)
of US$10.0 million became payable and was paid on June 29, 2009. Accordingly,
the second instalment of US$10 million is due and payable on June 26, 2010 and
the final instalment (the balance, plus accrued interest to that date) is due on
June 26, 2011. The total amount outstanding will become payable within 7
business days of the completion of a change of control of the Company. The
Company has the option to pay up to 50 per cent. of any instalment by the issue
of shares, subject to regulatory approvals. The Company paid 50 per cent. of the
first instalment by the issuance of 1,300,539 Common Shares at C$4.452 per share
and paid the balance of US$5 million in cash.
* Rent under the Consolidated Lease is US$350,000 per month or US$4.2 million per
annum until the commencement of commercial production. The parties have agreed
that during commercial production, OKIMO will continue to receive cashflow of
US$350,000 per month by way of an advance of dividends.
* Surface rental payments are expected to continue for the life of the mine at
approximately US$1.1 million per annum.
* Kibali Goldmines will provide a loan to Okimo to fund amounts due to Okimo
employees, including termination costs, of up to US$3.0 million. US$200,000 has
been advanced to date on this commitment.
* Kibali Goldmines will provide loans to Okimo pursuant to the Revised ATF
Contract of up to US$7.0 million. US$1.27 million has been advanced to date on
this commitment.
7. Balance Sheet Discussion and Analysis
+--------------------------------------------+------------+-----------+
| | Jun 30, | Dec 31, |
| | 2009 | 2008 |
+--------------------------------------------+------------+-----------+
| Assets | A$('000) | A$('000) |
+--------------------------------------------+------------+-----------+
| Cash and cash equivalents | 55,321 | 54,690 |
+--------------------------------------------+------------+-----------+
| Sundry receivables, prepayments and | 507 | 661 |
| inventories | | |
+--------------------------------------------+------------+-----------+
| Investment in Kilo Goldmines Limited | 3,292 | - |
+--------------------------------------------+------------+-----------+
| Loan receivable from Okimo | 3,603 | - |
+--------------------------------------------+------------+-----------+
| Capital assets | 1,291 | 1,597 |
+--------------------------------------------+------------+-----------+
| Mineral properties | 233,317 | 203,082 |
+--------------------------------------------+------------+-----------+
| Total Assets | 297,331 | 260,030 |
+--------------------------------------------+------------+-----------+
| Liabilities | | |
+--------------------------------------------+------------+-----------+
| Accounts payables and accrued liabilities | 3,561 | 12,458 |
+--------------------------------------------+------------+-----------+
| Consolidation payment due to Okimo | - | 5,433 |
+--------------------------------------------+------------+-----------+
| Loan due to Orgaman under the Assignment | 12,430 | 12,715 |
| Agreement (for the Okimo Loan)(Current) | | |
+--------------------------------------------+------------+-----------+
| Loan due to Orgaman under the Assignment | 18,748 | 36,192 |
| Agreement (for the Okimo | | |
| Loan)(Non-Current) | | |
+--------------------------------------------+------------+-----------+
| Non-controlling interest | 52,458 | - |
+--------------------------------------------+------------+-----------+
| Total Liabilities | 87,197 | 66,798 |
+--------------------------------------------+------------+-----------+
| Shareholders Equity | 210,133 | 193,232 |
+--------------------------------------------+------------+-----------+
Cash and cash equivalents
The increase in cash and cash equivalents over the prior period is the result of
the continued operating and development expenditures, the impact of foreign
exchange movements between the Australian dollar and both the United States and
Canadian dollars and the capital raising that was finalised in April/May 2009
resulting in additional net proceeds of approximately A$56.6 million.
Sundry receivables and prepayments and inventories
Current receivables and prepayments have not moved materially from December 31,
2008. This balance is not significant for Moto.
Investment in Kilo Goldmines Limited
The investment balance represents the Company's investment in Kilo Goldmines Ltd
("Kilo Goldmines") a company listed on the TSX Venture Exchange ("TSX-V"). Kilo
Goldmines began trading on the TSX-V on April 21, 2009 and this resulted in an
initial market value of C$2,748,674 and as no prior value had been assigned to
this asset, this also resulted in a gain to the income statement of the same
amount. At quarter end the investment had a market value of C$3,062,808 (based
on 7,853,353 common shares at a price of C$0.39 per share, being the closing
price of the common shares of Kilo Goldmines on the TSX-V on June 30, 2009). In
addition to the mark to market gain recorded, on translation to Australian
dollars a foreign exchange loss has also been recorded.
Loan receivable from Okimo
The loan receivable from Okimo relates to the outstanding historical surface
rentals paid by Kibali Goldmines on behalf of Okimo (US$2 million) and the
remainder (US$1.47 million) relates to the expenditures to date in relation to
the Revised ATF commitments and the Okimo employee provisions obligations. Under
Canadian GAAP the fair value of these advances must be determined, which results
in the amounts being discounted back to today's values based on the expected
timing of future repayments.
Capital assets
The movement in capital assets during the six months to June 2009 is the result
of some minor capital additions and the continued depreciation of assets.
Mineral properties
Mineral properties represent the largest value asset on Moto's consolidated
balance sheet. The mineral properties item reflects the expenditure incurred by
Moto on site on exploration and development activities as well as costs incurred
to buy into the Project. During the six months to June 2009, mineral properties
have been impacted by the value of the shares issued to GICC in accordance with
their consultancy arrangement (the issue of 981,193 Common Shares of Moto to
GICC had a value of A$2.7 million which has been recorded against mineral
properties), the payment of the pas de porte of US$4.5 million by the Company
which was recorded against mineral properties and the weaker Australian dollar
when compared to the United States dollar. The bulk of mineral property
expenditure is denominated in United States dollars and when translated to
Australian dollars, the weaker Australian dollar has impacted new charges to
mineral properties.
Accounts payable and accrued liabilities
The balance at December 31, 2008 was impacted by the US$3.1 million payment for
the historical surface rentals and by the recognition of US$3.5 million of
consultants' costs which are associated with the DRC Mining Contract Review
process. These costs were paid subsequent to the year end, and as a result,
accounts payable and accrued liabilities have fallen.
Consolidation payment due to Okimo
Moto made the final payment of US$3.75 million on the US$5.0 million
Consolidation Payment due to Okimo in the first quarter of 2009 on the
registration of the Consolidated Lease with the DRC Mining Registry.
Loans due to Orgaman under the Assignment Agreement (for the Okimo Loan) -
Current
At June 30, 2009 this balance represents the current portion of the payment due
to Orgaman in respect of the Assignment Agreement for the Okimo Loan, which
became payable upon the Tripartite Agreement becoming effective, being US$10.0
million, converted to Australian dollars at the prevailing market rates. This
amount became payable on June 26, 2010 and was paid as to US$5 million in cash
and, in accordance with Moto's option under the governing agreement, as to the
balance in Common Shares of Moto.
Loans due to Orgaman under the Assignment Agreement (for the Okimo Loan) -
Non-current
At June 30, 2009 this balance represents the non-current portion of the payments
due to Orgaman in respect of the Assignment Agreement for the Okimo Loan. The
non-current portion of this loan has decreased since December 31, 2008 because
the Company has paid the first instalment of US$10 million, as described above,
and because the Australian dollar has appreciated against the United States
dollar since December 31, 2008, thus on translation to Australian dollars the
value has decreased.
Non-controlling interest
As part of the joint venture negotiations held with Okimo, it was agreed that
Kibali Goldmines would be recapitalised with total share capital of
US$10,000,000 (representing 10,000,000 shares at US$1.00 per share), Kibali
Goldmines would issue 30 per cent. of its share capital to Okimo and in exchange
Okimo would transfer the Exploitation Permits into the name of Kibali Goldmines.
As a result of the issue of shares in Kibali Goldmines to Okimo, a
'Non-controlling interest' in Kibali Goldmines is now held by Okimo and must be
accounted for in Moto's consolidated balance sheet in accordance with Canadian
GAAP.
The initial recognition of the 'Non-controlling interest' has resulted in a
non-current liability of $53,812,335, which represents 30 per cent. of the net
identifiable assets of Kibali Goldmines. It should be noted that for the
purposes of determining the net identifiable assets of Kibali Goldmines, the
inter-company loan between Kibali Goldmines and Moto Goldmines Australia Pty Ltd
was eliminated. The 'Non-controlling interest' has also been impacted by Okimo's
30 per cent. share of the losses of Kibali Goldmines since taking ownership of
the shares in Kibali Goldmines, which has resulted in a non-current liability of
$52,458,472 representing the 'Non-controlling interest' as at June 30, 2009.
8. Proposed Transactions and Transactions Subsequent to June 30, 2009
Please refer to section 2, above.
9. Accounting Policies and Critical Accounting Estimates
The accounting policies that involve significant management judgement and the
critical accounting estimates within the meaning of National Instrument 51-102
are discussed in this section. For a complete list of the accounting policies of
the Company, reference should be made to Note 2 of the December 31, 2008 audited
consolidated annual financial statements. There were no changes in accounting
policies during the six months ended June 30, 2009.
Exploration Costs
Moto accumulates certain costs associated with exploration activities on
specific areas of interest where Moto has rights of tenure. Moto's policy is to
expense any exploration and associated costs relating to non-specific
projects/properties. Significant property acquisition, exploration, evaluation
and development costs relating to specific properties for which economically
recoverable reserves are believed to exist are deferred until the project to
which they relate is sold, abandoned or placed into production. Management
reviews the carrying values of its mineral properties on at least an annual
basis to determine whether an impairment should be recognised and no costs are
deferred on a mineral property that is considered to be impaired in value. As at
June 30, 2009, Moto has recorded deferred exploration and acquisition costs of
approximately A$233.3 million (March 31, 2009 - A$214.8, December 31, 2008 -
A$203.1 million) associated with the Moto Gold Project on the Moto consolidated
balance sheet.
Valuation of Inventory
Inventory is valued at the lower of cost and realizable value. Management
reviews the inventory regularly and if in the estimation of management the net
realizable value of the inventory is less than cost, a provision is recorded to
reduce the carrying value of the inventory and a corresponding expense is
recognized thereby reducing the net income for the period.
Investment in Kilo Goldmines
The investment held by the Company in Kilo Goldmines is recognised based on the
market value of this investment. As Kilo Goldmines is a public company trading
on the TSX-V the Company has determined that the closing prices of Kilo
Goldmine's stock as traded on the TSX-V is a suitable measure for Management to
determine the market value of this investment.
Carrying Value of Capital Assets
Management establishes the rate of amortization for capital assets. Management
assesses the carrying value of these assets based on the estimated useful life
of the asset and the potential salvage or sale value of the asset. This
estimation may result in the reduction of the carrying value of an asset and a
corresponding increase in expenses and a reduction of net income for the period.
Loans and receivables
As part of the Company's consolidated balance sheet, a receivable has been
created for the amounts advanced to Okimo under the Revised ATF, in respect of
certain of Okimo's employee obligations and the amount of US$2 million paid on
Okimo's behalf in relation to the historical outstanding surface rentals. Under
Canadian GAAP these are accounted for based on the amortization method which
results in the receivable being measured at its fair value. This fair value
calculation requires an estimate of the timing and amounts of future repayments
of the loan. Management's best estimates have been used in determining these
future repayments but Management recognise that there may be material
differences in the actual repayments when they are made. Management has also
made an assessment of the appropriate discount interest rate to be applied.
International Financial Reporting Standards ("IFRS")
The Canadian Institute of Chartered Accountants plans to converge Canadian GAAP
for public companies with IFRS over a transition period that is expected to end
for accounting periods commencing on or after January 1, 2011. The impact of the
transition to IFRS on the Company's consolidated financial statements has not
yet been determined.
10. Outstanding Share Data
As at August 13, 2009, the Company had 110,456,027 Common Shares on issue. The
Company also had 11,689,050 stock options and 500,000 warrants on issue (with an
exercise price range of C$2.60 to C$7.65), and a commitment to issue further
stock options to Sam Jonah, KBE, subject to compliance with stock exchange rules
and receipt of any required regulatory and shareholder approvals, on the basis
that if the Company makes a material further issuance of shares, the Company
will grant stock options at the prevailing market price expiring 6 years after
grant so that the total number of stock options granted to Sam Jonah, KBE, from
the date of his appointment as a director of the Company is maintained at 5 per
cent of the total number of Common Shares issued by the Company.
Pursuant to the consultancy agreement between the Company and GICC, if by
November 30, 2009, the price of the Company's Common Shares on the TSX exceeds
C$11.92 or C$15.90, a further 628,982 Common Shares will be issued to GICC on
each such share price level being exceeded as deferred compensation. In the
event of a change of control of the Company, the Company is required, regardless
of the closing price of the Company's shares on the TSX prior to the change of
control, to issue 628,982 Common Shares to GICC immediately prior to (but
conditional upon) completion of the change of control. In addition, if the share
price is at least C$11.92 just prior to the change of control, a further 628,982
Common Shares must be issued to GICC immediately prior to (but conditional upon)
completion of the change of control. In each case, GICC must undertake to
participate in the change of control transaction.
11. Financial Instruments
Moto's financial instruments consist of cash and cash equivalents, employee
advances and GST receivables, sundry receivables, accounts payable and accrued
liabilities, and short-term and long-term loans due to its former joint venture
partner, Orgaman. It is management's opinion that Moto is not exposed to
significant credit risks arising from these financial instruments. The fair
value of these instruments approximates their carrying values. Further details
on the interest rate and credit risks applicable to Moto can be found in Note
17, Financial Risk Factors, of the audited consolidated financial statements for
the year ended December 31, 2008.
Moto holds the majority of its cash assets in US dollar deposits (and some
Canadian dollar deposits) and incurs a large proportion of its exploration
expenditure in US dollars. It is therefore exposed to foreign currency risk
arising from fluctuations in foreign exchanges rates. Moto does not use
derivative instruments to reduce its exposure to foreign currency risk.
During the six months ended June 30, 2009, Moto recorded bank interest revenue
of A$141,024, interest on the Okimo receivable of $26,783, finance accretion
charges of $135,819 on the loan receivable from Okimo, recorded foreign exchange
losses of A$4,098,035 on the translation of cash and cash equivalents from
foreign currencies to Australian dollars and recorded foreign exchange gains of
A$3,270,649 on the translation of the short-term and long-term loans due to
Orgaman on the Moto consolidated income statement. In addition a foreign
exchange loss of $216,403 has been recorded on the translation of the investment
in Kilo Goldmines from Canadian dollars to Australian dollars.
12. Transactions with Related Parties
Samuel Jonah, KBE, a non-executive director and the Company's Chairman, has a
contractual arrangement that should the Company make any material issuances of
Common Shares, the Company will grant Mr. Jonah stock options at the prevailing
market rate expiring 6 years after the grant date, so that the total number of
stock options granted to Mr. Jonah from the date of his appointment is
maintained at 5 per cent of the total number of Common Shares issued by the
Company. As a result of the equity raising that completed on April 27, 2009,
resulting in the issue of 17,860,000 Common Shares at C$2.80 per share, on April
29, 2009, Mr. Jonah was granted 893,000 stock options each to purchase one
Common Share of the Company at an exercise price of C$2.80. As a result of the
Underwriters exercising in full the over-allotment option on May 15, 2009,
resulting in the issue of a further 2,679,000 Common Shares at C$2.80 per share,
Mr. Jonah was granted 133,950 stock options each to purchase one Common Share of
the Company at an exercise price of C$2.83.
13. Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements that have, or are reasonably likely
to have, a current or future effect on the results of operations or financial
condition of the Company.
14. Additional Notes
The Information in this report that relates to Mineral Resources is based on
information compiled by Rick Adams and Ted Hansen who are members of the
Australasian Institute of Mining and Metallurgy (AusIMM) and are qualified
persons under NI 43-101. Rick Adams and Ted Hansen are directors of Cube
Consulting Pty Ltd and each has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined in
the "Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves" (the "JORC Code"). Rick Adams and Ted Hansen consent to the
inclusion in this report of the Information, in the form and context in which it
appears.
The Information in this report that relates to the technical aspects of the open
pit mine engineering discipline (including calculation of open pit Mineral
Reserves) is based on information compiled by Cube Consulting Pty Ltd under the
direction of Quinton de Klerk who is a member of the Australasian Institute of
Mining and Metallurgy (AusIMM) and a qualified person under NI 43-101. Quinton
de Klerk is a director of Cube Consulting Pty Ltd and has sufficient experience
which is relevant to the type of deposit and open pit mining methods under
consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the JORC Code. Quinton de Klerk consents to the
inclusion in this report of the Information, in the form and context in which it
appears.
The Information in this report that relates to the technical aspects of the
underground mine engineering discipline (including calculation of underground
Mineral Reserves) is based on information compiled by SRK Consulting Pty Ltd
under the direction of Paul Kerr who is a member of the Australasian Institute
of Mining and Metallurgy (AusIMM) and a qualified person under NI 43-101. Paul
Kerr is an employee of SRK Consulting Pty Ltd. and has sufficient experience
which is relevant to the type of deposit and underground mining methods under
consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the JORC Code. Paul Kerr consents to the
inclusion in this report of the Information, in the form and context in which it
appears.
15. Risks and Uncertainties
Moto's future operating and financial performance is subject to a number of
different risks at any given time. These include risks that are widespread risks
associated with any form of business and specific risks associated with Moto's
business and its involvement in the exploration and mining industry generally
and in the DRC in particular. The risk factors include, but are not limited to,
exploration and mining operations risks, government regulations, non assurance
of titles or boundaries, uncertainty of mineral reserve and mineral resource
estimates, uncertainty relating to inferred mineral resources, metal prices, no
company history of mining operations or profitability, joint ventures,
dependence on limited mining properties, financing requirements, including the
current world-wide economic conditions and the resulting uncertain availability
of equity or debt financing, uninsured risks, environmental risks and hazards,
renewal of licences, currency risks, competition, loss and dependence on key
personnel, dividend policy, future sales of common shares by existing
shareholders, repatriation of earnings and stock exchange prices. There are a
number of identifiable risks specific to the Moto Gold Project, including but
not limited to the joint venture negotiation process, ability to raise cash
resources, political instability and changes, risks of international operations,
lack of infrastructure, social instability and militia fighting, impact of local
inflation in the DRC and HIV/AIDS and other health risks. A more detailed
analysis of the risk factors Moto is faced with can be found in the most recent
amended and restated annual information form, which is available under the
Company's profile on SEDAR at www.sedar.com.
16. Internal Controls Over Financial Reporting
The President and Chief Operating Officer (acting as Chief Executive Officer for
this purpose) and the Chief Financial Officer of the Company (the "Certifying
Officers") are responsible for establishing and maintaining disclosure controls
and procedures and internal control over financial reporting, as those terms are
defined in National Instrument 52-109 Certification of Disclosure in Issuers'
Annual and Interim Filings ("NI 52-109") and for certifying the design of the
Company's disclosure controls and procedures and internal control over financial
reporting as required by NI 52-109.
Internal control over financial reporting is intended to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of consolidated financial statements for external purposes in accordance with
applicable generally accepted accounting principles ("GAAP"). Internal control
over financial reporting should include those policies and procedures that
establish the following:
* maintenance of records in reasonable detail, that accurately and fairly reflect
the transactions and dispositions of assets;
* reasonable assurance that transactions are recorded as necessary to permit
preparation of consolidated financial statements in accordance with applicable
GAAP;
* receipts and expenditures are only being made in accordance with authorizations
of management and the Board; and
* reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of Moto's assets that could have a material
effect on the consolidated financial statements.
Disclosure controls and procedures are intended to provide reasonable assurance
that (i) material information relating to the Company is made known to the
Certifying Officers by others, particularly during the period in which the
annual filings are being prepared; and (ii) information required to be disclosed
by the Company in its annual filings, interim filings or other reports filed or
submitted by it under applicable securities legislation is recorded, processed,
summarized and reported within the time periods specified in applicable
securities legislation.
Because of its inherent limitations, internal control over financial reporting
may have material weaknesses and may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate.
As the Company has a limited number of personnel, management has concluded that
a weakness exists in the design of internal controls over financial reporting
caused by a lack of adequate segregation of duties. Management does not believe
that the segregation of duties deficiencies has resulted in a misstatement to
interim financial statements or the annual financial statements, or other
disclosures made by the Company. This weakness has the potential to result in
material misstatements in the Company's financial statements and should also be
considered a weakness in its disclosure controls and procedures. Management has
concluded that, taking into account the present stage of the Company's
development and the best interest of its shareholders, the Company does not have
sufficient size and scale to warrant the hiring of additional personnel to
correct this weakness at this time. To help mitigate the impact of this weakness
and to ensure quality financial reporting, there are supervisory controls
exercised by management and Audit Committee oversight, and interim financial
statements are reviewed by the Company's Board.
The Certifying Officers have reviewed and evaluated, or caused to be evaluated
under their supervision, the effectiveness of the Company's disclosure controls
and procedures and internal control over financial reporting (as defined in NI
52-109) as of June 30, 2009. The Certifying Officers have concluded that, as of
March 31, 2009, except as stated above, the disclosure controls and procedures
and internal control over financial reporting were effective to provide
reasonable assurance that material information relating to the Company would be
known to them, particularly during the period in respect of which this report
was being prepared.
There have been no changes in the Company's internal control over financial
reporting over the six months ending June 30, 2009 that have materially
affected, or are reasonably likely to materially affect, the Company's controls
over financial reporting and to the best of the knowledge of the Certifying
Officers, there has been no fraud that involves management or other employees
who have a significant role in the Company's internal control over financial
reporting.
MOTO GOLDMINES LIMITED
Consolidated Balance Sheets
(Expressed in Australian dollars)
June 30, 2009 (Unaudited)
December 31, 2008 (Audited)
+---------------------------------------+------------------+----------------+
| | Jun 30, | Dec 31, |
| | 2009 | 2008 |
+---------------------------------------+------------------+----------------+
Assets
+---------------------------------------+-------------------------------------+----------------------------------+
| Current Assets | | |
+---------------------------------------+-------------------------------------+----------------------------------+
| Cash and cash equivalents | 55,320,690 | 54,689,744 |
+---------------------------------------+-------------------------------------+----------------------------------+
| Sundry receivables & prepayments | 379,896 | 460,333 |
+---------------------------------------+-------------------------------------+----------------------------------+
| Inventories | 127,205 | 201,040 |
+---------------------------------------+-------------------------------------+----------------------------------+
| | 55,827,791 | 55,351,117 |
+---------------------------------------+-------------------------------------+----------------------------------+
| | | |
+---------------------------------------+-------------------------------------+----------------------------------+
| Investment in Kilo Goldmines Limited | 3,292,279 | - |
| (note 4) | | |
+---------------------------------------+-------------------------------------+----------------------------------+
| Loan receivable from Okimo (note 5) | 3,603,130 | - |
+---------------------------------------+-------------------------------------+----------------------------------+
| Capital assets (note 6) | 1,290,886 | 1,596,624 |
+---------------------------------------+-------------------------------------+----------------------------------+
| Mineral properties (note 7) | 233,316,986 | 203,081,577 |
+---------------------------------------+-------------------------------------+----------------------------------+
| | $297,331,072 | $260,029,318 |
+---------------------------------------+-------------------------------------+----------------------------------+
Liabilities and
Shareholders' Equity
+---------------------------------------+------------------------+-----------------------+
| Current Liabilities | | |
+---------------------------------------+------------------------+-----------------------+
| Accounts payable and accrued | 3,561,338 | 12,457,863 |
| liabilities | | |
+---------------------------------------+------------------------+-----------------------+
| Loan due to Orgaman | 12,430,000 | 12,715,021 |
| under Assignment | | |
| Agreement with Orgaman | | |
| (note 8) | | |
+---------------------------------------+------------------------+-----------------------+
| Consolidation payment due to Okimo | - | 5,432,657 |
+---------------------------------------+------------------------+-----------------------+
| | 15,991,338 | 30,605,541 |
+---------------------------------------+------------------------+-----------------------+
| | | |
+---------------------------------------+------------------------+-----------------------+
| Non Current Liabilities | | |
+---------------------------------------+------------------------+-----------------------+
| Loan due to Orgaman | 18,747,835 | 36,191,518 |
| under Assignment | | |
| Agreement with Orgaman | | |
| (note 8) | | |
+---------------------------------------+------------------------+-----------------------+
| Non-controlling interests (note 11) | 52,458,472 | - |
+---------------------------------------+------------------------+-----------------------+
| | 71,206,307 | 36,191,518 |
+---------------------------------------+------------------------+-----------------------+
| | | |
+---------------------------------------+------------------------+-----------------------+
| Shareholders' Equity | | |
+---------------------------------------+------------------------+-----------------------+
| Share capital (note 9) | 306,042,379 | 233,895,395 |
| | | |
+---------------------------------------+------------------------+-----------------------+
| Contributed surplus (note 10) | 24,517,912 | 23,112,412 |
| | | |
+---------------------------------------+------------------------+-----------------------+
| Deficit | (120,667,339) | (63,775,548) |
| | | |
+---------------------------------------+------------------------+-----------------------+
| Accumulated comprehensive income | 240,475 | - |
+---------------------------------------+------------------------+-----------------------+
| | 210,133,427 | 193,232,259 |
+---------------------------------------+------------------------+-----------------------+
| | $297,331,072 | $260,029,318 |
+---------------------------------------+------------------------+-----------------------+
MOTO GOLDMINES LIMITED
Consolidated Statements of Operations and Deficit (Unaudited)
(Expressed in Australian dollars)
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| | Quarter | Six months |
+-----------------------------+------------------------------------------+--------------------------------------------+
| | Jun 30, | Jun 30, | Jun 30, | Jun 30, |
| | 2009 | 2008 | 2009 | 2008 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Revenue | 230,017 | 371,162 | 303,626 | 603,562 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Other Income (note 3) | 3,155,043 | - | 3,155,043 | - |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Operating Expenses | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Employees and consultants | 4,970,378 | 968,289 | 5,810,186 | 1,806,053 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Amortization | 261,575 | 181,863 | 555,383 | 364,217 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Occupancy | 87,826 | 48,735 | 160,027 | 127,013 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Shareholder and listing | 28,422 | 255,804 | 155,145 | 385,608 |
| costs | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Marketing and promotion | 419,218 | 205,623 | 676,160 | 433,305 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Stock based compensation | 1,035,211 | 569,335 | 1,460,740 | 1,126,205 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Interest | 885,410 | 666,119 | 1,889,524 | 1,459,830 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Foreign exchange loss / | 1,026,582 | 586,767 | 1,399,595 | (387,904) |
| (gain) | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Other expenses | 142,516 | 122,362 | 254,080 | 227,418 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Net loss before | 5,472,078 | 3,233,735 | 8,902,171 | 4,938,183 |
| non-controlling interest, | | | | |
| dilution loss and taxes | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Non-controlling interest | (1,353,864) | - | (1,353,864) | - |
| (note 11) | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Dilution loss (note 11) | 49,456,648 | - | 49,456,648 | - |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Net loss before taxes | 53,574,862 | 3,233,735 | 57,004,955 | 4,938,183 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Future income tax | (113,164) | - | (113,164) | - |
| recoveries (note 4) | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Net loss for the period | 53,461,698 | 3,233,735 | 56,891,791 | 4,938,183 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Deficit - beginning of | 67,205,641 | 51,341,136 | 63,775,548 | 49,636,688 |
| period | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Deficit - end of period | $120,667,339 | $54,574,871 | $120,667,339 | $54,574,871 |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
| Basic Loss Per | $(0.5144) | $(0.0375) | $(0.5941) | $(0.0625) |
| Share | $(0.5121) | $(0.0375) | $(0.5916) | $(0.0625) |
| - Net Loss | | | | |
| - | | | | |
| Comprehensive | | | | |
| Loss | | | | |
+-----------------------------+----------------------+-------------------+------------------------+-------------------+
MOTO GOLDMINES LIMITED
Consolidated Statements of Comprehensive Income (Loss) and Accumulated
Comprehensive Income (Unaudited)
(Expressed in Australian dollars)
+-------------------------------+------------+-----------+------------+-----------+
| | Quarter | Six months |
+-------------------------------+------------------------+------------------------+
| | Jun 30, | Jun 30, | Jun 30, | Jun 30, |
| | 2009 | 2008 | 2009 | 2008 |
+-------------------------------+------------+-----------+------------+-----------+
| | | | | |
+-------------------------------+------------+-----------+------------+-----------+
| Net loss | 53,461,698 | 3,233,735 | 56,891,791 | 4,938,183 |
+-------------------------------+------------+-----------+------------+-----------+
| | | | | |
+-------------------------------+------------+-----------+------------+-----------+
| Other comprehensive | | | | |
| (income): | | | | |
+-------------------------------+------------+-----------+------------+-----------+
| Unrealized | (240,475) | - | (240,475) | - |
| gain on | | | | |
| available-for-sale | | | | |
| Securities | | | | |
+-------------------------------+------------+-----------+------------+-----------+
| | | | | |
+-------------------------------+------------+-----------+------------+-----------+
| Total comprehensive loss |53,221,223 |3,233,735 |56,651,316 |4,938,183 |
+-------------------------------+------------+-----------+------------+-----------+
| | | | | |
+-------------------------------+------------+-----------+------------+-----------+
| | | | Jun 30, | Dec 31, |
| | | | 2009 | 2008 |
+-------------------------------+------------+-----------+------------+-----------+
| Accumulated unrealized gain on available-for-sale | (240,475) | - |
| Securities (Note 4) | | |
+--------------------------------------------------------+------------+-----------+
| | | | | |
+-------------------------------+------------+-----------+------------+-----------+
| Accumulated comprehensive (income) | (240,475) | - |
+-------------------------------+------------+-----------+------------+-----------+
MOTO GOLDMINES LIMITED
Consolidated Statements of Cash flows (Unaudited)
(Expressed in Australian dollars)
+--------------------------------+--------------+-------------+--------------+--------------+
| | Quarter | Six months |
+--------------------------------+----------------------------+-----------------------------+
| | Jun 30, | Jun 30, | Jun 30, | Jun 30, |
| | 2009 | 2008 | 2009 | 2008 |
+--------------------------------+--------------+-------------+--------------+--------------+
| | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Cash flows used in operating | | | | |
| activities | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Loss for the period | (53,461,698) | (3,233,735) | (56,891,791) | (4,938,183) |
+--------------------------------+--------------+-------------+--------------+--------------+
| Items not affecting cash: | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Stock based compensation | 1,035,211 | 569,335 | 1,460,740 | 1,126,205 |
+--------------------------------+--------------+-------------+--------------+--------------+
| Amortization | 261,575 | 181,863 | 555,383 | 364,217 |
+--------------------------------+--------------+-------------+--------------+--------------+
| Write-off of | 23 | - | 2,988 | - |
| mineral | | | | |
| properties and | | | | |
| capital assets | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Foreign exchange variances | (1,901,428) | (1,604,352) | (2,097,621) | (3,038,803) |
+--------------------------------+--------------+-------------+--------------+--------------+
| Interest accrued on | 885,410 | 666,119 | 1,889,524 | 1,360,766 |
| joint venture loan | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Non-controlling interest | (1,353,864) | - | (1,353,864) | - |
+--------------------------------+--------------+-------------+--------------+--------------+
| Dilution loss | 49,456,648 | - | 49,456,648 | - |
+--------------------------------+--------------+-------------+--------------+--------------+
| Initial gain on investment | (3,155,043) | - | (3,155,043) | - |
| in Kilo Goldmines | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Future income tax recoveries | (113,164) | - | (113,164) | - |
+--------------------------------+--------------+-------------+--------------+--------------+
| | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Changes in non-cash working | | | | |
| capital balances | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| (Decrease) in inventories | (73,959) | - | (73,835) | - |
+--------------------------------+--------------+-------------+--------------+--------------+
| (Increase) / decrease in | 118,785 | (213,462) | 17,544 | (130,666) |
| sundry receivables | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Increase / | 981,761 | (83,138) | 680,411 | (128,106) |
| (decrease) in | | | | |
| accounts payable | | | | |
| and accrued | | | | |
| liabilities | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| | (7,319,743) | (3,717,370) | (9,622,080) | (5,384,570) |
+--------------------------------+--------------+-------------+--------------+--------------+
| | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Cash flows used in investing | | | | |
| activities | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Expenditures on mineral | (13,285,884) | (418,050) | (31,786,413) | (443,097) |
| properties | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Purchases of capital assets | (126,256) | (6,987,424) | (249,645) | (24,374,820) |
+--------------------------------+--------------+-------------+--------------+--------------+
| Consolidation payment to Okimo | - | - | (5,432,657) | - |
+--------------------------------+--------------+-------------+--------------+--------------+
| Advances made to Okimo under | (994,962) | - | (4,789,256) | - |
| Revised Technical and | | | | |
| Financial Assistance Contract | | | | |
| and other arrangements | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| | (14,407,102) | (7,405,474) | (42,257,971) | (24,817,917) |
+--------------------------------+--------------+-------------+--------------+--------------+
| | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Cash flows from financing | | | | |
| activities | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Issue of common shares and | 62,662,757 | 55,119,797 | 62,662,757 | 63,895,279 |
| warrants for cash (net of | | | | |
| issue costs) | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Proceeds from exercise of | 161,238 | - | 161,238 | - |
| unlisted Moto stock options | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Repayments to Orgaman under | (6,214,963) | - | (6,214,963) | - |
| Assignment Agreement | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| | 56,609,032 | 55,119,797 | 56,609,032 | 63,895,279 |
+--------------------------------+--------------+-------------+--------------+--------------+
| | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Exchange loss on holding | (4,351,046) | - | (4,098,035) | - |
| foreign currencies | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Net increase in cash and cash | 30,531,141 | 43,996,953 | 630,946 | 33,692,792 |
| equivalents | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Cash and cash equivalents - | 24,789,549 | 15,818,501 | 54,689,744 | 26,122,662 |
| beginning of period | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| Cash and cash equivalents - | $55,320,690 | $59,815,454 | $55,320,690 | $59,815,454 |
| end of period | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
| | | | | |
+--------------------------------+--------------+-------------+--------------+--------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KGGMRNDNGLZG
Grafico Azioni Moto Goldmines (LSE:MOE)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Moto Goldmines (LSE:MOE)
Storico
Da Giu 2023 a Giu 2024
