TIDMTSG
RNS Number : 1771P
Trans-Siberian Gold PLC
30 September 2013
Trans-Siberian Gold plc
Interim Results for the half year ended 30 June 2013
Highlights
-- 1(st) half production 13,950 oz. gold, 17,691 oz. silver,
increases of 9.8% and 15.1% respectively
-- Asacha plant processed average 11,814 tonnes per month, 14.6% increase
-- $26.5 million loans rescheduled
-- Asacha licence extended to 1 September 2018
Chief Executive's Operating Review
Trans-Siberian Gold plc ("TSG" or the "Company") (TSG.L) reports
that its results for the six months to 30 June 2013 included a 9.8%
increase in gold production and a 15.1% increase in silver
production compared to the first half of 2012. The principal
operational problem at the Asacha mine continued to be dilution
affecting the grade of ore delivered to the plant, however this
improved from an average 6.36 g/t in the first three months to 6.60
g/t in the second quarter and 6.90 g/t in July/August and TSG
expects further improvements in the remainder of 2013 and in
2014.
Revenue from the sale of 14,149 oz. of refined gold and 18,369
oz. of refined silver (2012 first half: 12,708 oz. and 15,372 oz.
respectively) was $21.6 million and $476,000 respectively (2012
first half: $21.0 million and $456,000). Average realised prices
were $1,528 per oz. gold and $26 per oz. silver (2012 first half:
$1,651 per oz. and $30 per oz.). Cost of sales per oz. gold, net of
the credit from silver sales revenue, was $1,486 (2012 first half:
$1,663). Cash cost per oz. gold including depletion, net of the
silver credit and excluding royalty, was $1,058 (2012 first half:
$1,130). Cash cost per oz. gold excluding depletion, net of the
silver credit and excluding royalty, was $817 (2012 first half:
$651).
Administrative expenses for the half year amounted to $408,000
in UK and $2.8 million in Russia, in aggregate $3.2 million
compared to $462,000 and $3.4 million respectively, in aggregate
$3.8 million, for the corresponding period of 2012. Russian
administrative expenses included the write off of $0
non-recoverable Value Added Tax (2012 first half: $439,000).
Finance income was $7,000 (2012 first half: $3,000). Finance
costs were $1.7 million (2012 first half: $1.5 million).
The loss for the period was $4.6 million (2012 first half: $3.9
million) net of exchange gains of $182,000 (2012 first half:
$29,000). The loss for the period included a tax charge of $505,000
(2012 first half: $1.4 million tax credit).
Cash and cash equivalents increased from $669,000 at 31 December
2012 to $1.1 million.
Borrowings reduced from $34.4 million at 31 December 2012 to
$28.3 million, principally reflecting $6.0 million of repayments of
the two project finance facilities totalling $43 million provided
by Sberbank for the development of Asacha. On 20 September 2013
Sberbank agreed to extend the terms of the two loan facilities to
December 2018. Repayment of the $26.5 million outstanding under the
two facilities will commence in March 2014, with total repayments
of $1.3 million due in 2014. It has been agreed that a gold price
hedge programme will be implemented for the revised term of the
facilities, with gold price protection for the initial 12 month
period to be put in place by 1 November 2013.
In 2012 the Company's major shareholders UFG Asset Management
(UFG) and AngloGold Ashanti Limited (AGA)provided TSG with short
term loan facilities in aggregate $781,000 on commercial terms. In
September 2012 the terms of these facilities were extended to 1
March 2013, the revised facility agreements including an option for
the lenders, subject to the requisite approval of TSG's
shareholders, to convert any part of the outstanding loans into TSG
shares at a price equivalent to the volume weighted average price
of TSG's shares for the period of 60 business days prior to notice
of such conversion. In January 2013 the two facilities were
increased to an aggregate $891,000 and their terms extended to 30
September 2013. On 26 September 2013 UFG and AGA agreed a further
extension of the terms to 31 March 2014.
Asacha Project, Kamchatka Krai
In the six months to 30 June 2013 mine development and
preparation works, by-product extraction works and exploration
works comprised 1,191 metres with more than 93,000 tonnes of ore
extracted. Mining activity was focused on increasing the volume and
quality of stoping ore, since the 4,100 metres of mine development
in 2012 included the preparation of stoping areas to be mined in
2013.
Plant performance in the first half of 2013 continued to be
affected by low ore grades, due to dilution, however there was some
improvement in the second quarter and TSG remainscautiously
optimistic that planned adjustments in mining methods, in
particular reducing the diameter of drill holes and the
introduction of additional supports, will result in further
improvements, once all these changes have been implemented. The
required equipment was delivered to site in May and June 2013. The
use of less brisant explosives (i.e. explosives with less
shattering effect) is also expected to reduce dilution.
In the reporting period the Asacha plant processed an average
11,814 tonnes of ore per month (2012 first half: 10,307 tonnes per
month). In July and August the average throughput increased to
13,856 tonnes at an average 6.90 g/t, with 7.4 g/t achieved in July
2013. TSG expects that the average grade of ore delivered to the
plant in the second half of 2013 will be at least 7 g/t. Gold
recovery averaged 94.05% during the reporting period (2012 first
half: 95.39%).
Mining and production at Asacha in the first half of 2013 is
shown in the following table.
1(st) 2(nd) 1st July/ January/ January/ 1st
quarter quarter half August August August half
2013 2013 2013 2013 2013 2012 2012
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
Mine development (metres) 396 795 1,191 469 1,660 2,803 2,070
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
Ore extracted (tonnes) 45,352 47,923 93,275 23,330 116,605 84,743 63,615
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
Ore processed (tonnes) 35,585 35,298 70,883 27,712 98,595 86,944 61,840
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
Average gold
grade (g/t) 6.36 6.60 6.48 6.90 6.60 6.72 6.66
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
Average silver
grade (g/t) 9.80 10.77 10.28 10.99 10.48 12.79 13.32
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
Gold recovery
rate (%) 94.52 93.58 94.05 94.69 94.24 95.43 95.39
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
Silver recovery
rate (%) 78.81 70.28 74.39 73.24 74.10 64.04 59.54
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
Gold in dore (oz.) 6,826 6,929 13,755 5,922 19,677 18,502 13,151
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
Silver in dore (oz.) 8,791 8,416 17,207 6,831 24,038 23,625 16,311
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
Gold refined (oz.) 6,833 7,117 13,950 5,579 19,529 18,508 12,708
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
Silver refined (oz.) 8,865 8,826 17,691 6,696 24,387 23,275 15,372
------------------ ---------- --------- --------- -------- -------- --------- --------- -------
In August 2013, various elements of the Asacha operation were
officially commissioned, including the processing plant, cyanide
storage facility, tailings storage (first phase) and sludge
pipeline, the water supply network and fuel storage facility. In
September 2013 the cold storage facility was also commissioned.
On 12 September 2013 the Federal Agency on Subsoil Use decided
to extend the Asacha licence until 1 September 2018.
Rodnikova Project, Kamchatka Krai
As previously reported, the Federal Service for Supervision of
Natural Resources Management has prescribed the implementation of
two provisions of the Rodnikova licence by April 2014, first the
finalisation of the design documentation, secondly the commencement
of work at the deposit, failing which the federal authorities will
consider the termination of the licence. Although the Company is
trying to keep the licence it is unclear whether there is adequate
time or available funding to comply with these requirements.
Therefore the full impairment provision recognised in 2012 in
respect of Rodnikova's deferred exploration and evaluation costs
has been maintained.
Personnel
As at 30 June 2013, 487 personnel were employed in Kamchatka,
with a slight decrease to 471 by the end of August.
Contacts:
TSG +44 (0) 1480 811871
Simon Olsen
+44 (0) 207 894
Cantor Fitzgerald Europe 7000
Stewart Dickson / David Foreman (Corporate
Finance)
Jeremy Stephenson (Corporate Broking)
The information in this report relating to Asacha's mineral
resources is based on information compiled by Michael Stewart, a
member of the Australasian Institute of Mining and Metallurgy, who
has sufficient experience relevant to the styles of mineralisation
and types of deposit under consideration and to the activity he is
undertaking to qualify as a Competent Person as defined in the 2004
edition of the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves. Mr Stewart is a
Qualified Person as defined by the AIM Rules and consents to the
inclusion in the report of the matters based on his information in
the form and context in which it appears.
Condensed Consolidated Statement of Financial Position
at 30 June 2013
30 June 2013 30 June 31 December
unaudited 2012 2012
$000 unaudited audited
Note $000 $000
------------------------------ ----- ------------- ----------- -----------------
Assets
Non-current assets
Mining properties 6 28,798 29,512 29,498
Property, plant and equipment 7 70,115 80,247 75,354
Deferred exploration and
evaluation costs 8 1,643 2,866 1,643
Deferred tax asset 3,333 7,066 4,096
Total non-current assets 103,889 119,691 110,591
------------------------------ ----- ------------- ----------- -----------------
Current assets
Inventories 9 17,879 12,884 20,404
Trade and other receivables 2,308 2,745 2,823
Cash and cash equivalents 1,141 3,701 669
------------------------------ ----- ------------- ----------- -----------------
Total current assets 21,328 19,330 23,896
------------------------------ ----- ------------- ----------- -----------------
Total assets 125,217 139,021 134,487
------------------------------ ----- ------------- ----------- -----------------
Liabilities
Non-current liabilities
Deferred tax liability - 320 -
Loans and borrowings 10 305 23,196 13,028
Provisions 11 1,110 644 1,045
------------------------------ ----- ------------- ----------- -----------------
Total non-current liabilities 1,415 24,160 14,073
------------------------------ ----- ------------- ----------- -----------------
Current liabilities
Trade and other payables 8,229 5,367 6,776
Borrowings 10 27,950 16,450 21,399
------------------------------ ----- ------------- ----------- -----------------
Total current liabilities 36,179 21,817 28,175
------------------------------ ----- ------------- ----------- -----------------
Total liabilities 37,594 45,977 42,248
------------------------------ ----- ------------- ----------- -----------------
Total net assets 87,623 93,044 92,239
------------------------------ ----- ------------- ----------- -----------------
Capital and reserves attributable to owners
of the Company
Share capital 15 18,988 18,988 18,988
Share premium 15 89,520 89,520 89,520
Retained deficit (20,885) (15,464) (16,269)
------------------------------ ----- ------------- ----------- -----------------
Total equity 87,623 93,044 92,239
------------------------------ ----- ------------- ----------- -----------------
Condensed Consolidated Statement of Comprehensive Income - for
the 6 months ended 30 June 2013
6 months 6 months 12 months
to to to
30 June 2013 30 June 31 December
unaudited 2012 2012
$000 unaudited audited
Note $000 $000
---------------------------------- ----- -------------- ----------- -------------
Revenue 12 22,101 21,441 44,886
Cost of sales 13 (21,497) (21,589) (37,184)
---------------------------------- ----- -------------- ----------- -------------
Gross profit (loss) 604 (148) 7,702
Administrative expenses (3,169) (3,818) (6,269)
Other income 1 96 75
Impairment provision - - (2,902)
Net foreign exchange differences
on operating activities 184 26 2,075
---------------------------------- ----- -------------- ----------- -------------
(Loss) profit from operations (2,380) (3,844) 681
Finance expense (1,736) (1,529) (4,111)
Finance income 7 3 6
Net foreign exchange differences
on financing activities (2) 3 1
---------------------------------- ----- -------------- ----------- -------------
Loss before tax (4,111) (5,367) (3,423)
Income tax (charge) credit (505) 1,442 (1,307)
---------------------------------- ----- -------------- ----------- -------------
Loss for the period (4,616) (3,925) (4,730)
Total comprehensive expense
for the period (4,616) (3,925) (4,730)
---------------------------------- ----- -------------- ----------- -------------
Loss for the period attributable
to:
Owners of the parent company (4,616) (3,925) (4,730)
Loss for the period (4,616) (3,925) (4,730)
---------------------------------- ----- -------------- ----------- -------------
Total comprehensive expense
for the period attributable
to:
Owners of the parent company (4,616) (3,925) (4,730)
Loss for the period (4,616) (3,925) (4,730)
---------------------------------- ----- -------------- ----------- -------------
Loss per share attributable
to the owners
of the parent company (expressed
in cents)
- basic and diluted 14 (4.19) (3.59) (4.33)
Condensed Consolidated Statement of Changes in Equity
for the 6 months ended 30 June 2013
Attributable to owners of the Company
Share Share Retained Total
capital premium deficit equity
$000 $000 $000 $000
----------------------- ---------- ---------- ---------- --------
At 1 January 2012 18,050 84,013 (11,539) 90,524
Issue of share capital 938 5,507 - 6,445
Loss for the period - - (3,925) (3,925)
Value of share-based - - - -
payments
At 30 June 2012 18,988 89,520 (15,464) 93,044
Issue of share capital - - - -
Loss for the period - - (805) (805)
Value of share-based - - - -
payments
At 31 December 2012 18,988 89,520 (16,269) 92,239
Issue of share capital - - - -
Loss for the period - - (4,616) (4,616)
Value of share-based - - - -
payments
At 30 June 2013 18,988 89,520 (20,885) 87,623
----------------------- ---------- ---------- ---------- --------
Condensed Consolidated Statement of Cash Flows
for the 6 months ended 30 June 2013
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2013 2012 2012
unaudited unaudited audited
$000 $000 $000
---------------------------------------- ----------- ----------- -------------
Cash flows from operating activities
Loss for the period (4,616) (3,925) (4,730)
Adjustment for:
Mining properties depletion charged
to income statement 3,596 6,273 6,915
Depreciation of property, plant
and equipment charged to income
statement 5,576 5,475 12,434
Finance expense - net 1,729 1,523 4,105
Impairment provision - - 2,902
Share based payments - - -
Corporation tax charge (credit) 505 (1,442) 1,307
Loss on sale of property, plant
and equipment 1 1 31
---------------------------------------- ----------- ----------- -------------
Cash flows from operating activities
before changes in working capital
and provisions 6,791 7,905 22,964
Decrease (increase) in inventories 3,204 (761) (1,049)
Decrease in trade and other receivables 552 1,217 2,344
Increase (decrease) in trade and
other payables 3,483 (495) 1,117
Cash generated from operations 14,030 7,866 25,376
Corporation tax received (paid) 222 386 (4)
Interest paid on borrowings (1,702) (1,398) (4,058)
Net cash flows generated from
operating activities 12,550 6,854 21,314
---------------------------------------- ----------- ----------- -------------
Investing activities
Mining and mine development (2,831) (860) (10,099)
Purchase of property, plant and
equipment (PPE) (1,807) (1,999) (3,445)
Proceeds from sale of PPE - 45 44
Purchase of exploration and evaluation
assets including capitalised interest (1,335) - (891)
Interest received - third party 7 3 6
---------------------------------------- ----------- ----------- -------------
Net cash used in investing activities (5,966) (2,811) (14,385)
---------------------------------------- ----------- ----------- -------------
Financing activities
Proceeds from bank borrowings - - -
Repayment of bank borrowings (6,027) (1,478) (7,375)
Proceeds from short term borrowings 110 781 781
Repayment of short term borrowings - (1,760) (1,760)
Repayment of finance leases (193) (78) (97)
---------------------------------------- ----------- ----------- -------------
Net cash used in financing activities (6,110) (2,535) (8,451)
---------------------------------------- ----------- ----------- -------------
Net increase (decrease) in cash
and cash equivalents 474 1,508 (1,522)
Cash and cash equivalents at beginning
of the period 669 2,190 2,190
Exchange (loss) gain on cash and
cash equivalents (2) 3 1
Cash and cash equivalents at end
of the period 1,141 3,701 669
---------------------------------------- ----------- ----------- -------------
Unaudited notes forming part of the condensed consolidated
interim financial information for the period ended 30 June 2013
1. General information
Trans-Siberian Gold plc (the Company) is a UK-based resources
company, with the objective of acquiring and developing a portfolio
of quality gold-mining assets in Russia.
The Company is a public limited company, incorporated and
domiciled in the United Kingdom, and has subsidiaries based in the
Russian Federation. The Company's registered office is 39 Parkside
Cambridge CB1 1PN United Kingdom. The registered number of the
Company is 1067991. The Company's shares are traded on the AIM
Market of the London Stock Exchange.
This condensed consolidated interim financial information was
approved by the Board on 27 September 2013.
The interim financial information for the six months ended 30
June 2013 and 30 June 2012 is unreviewed and unaudited and does not
constitute statutory accounts as defined in Section 435 of the
Companies Act 2006. The comparative financial information for the
year ended 31 December 2012 has been derived from the statutory
financial statements for that year. Statutory accounts for the year
ended 31 December 2012 were approved by the Board of directors on 3
June 2013 and filed with the Registrar of Companies. The
Independent Auditors' Report on those accounts was unqualified but
contained an emphasis of matter in respect of the Group's going
concern.
2. Going concern
Management tightly control the level of committed expenditure to
ensure that the Group has sufficient resources available to meet
its liabilities as they fall due. Regular cash forecasts are
reviewed to assess the potential impact of factors such as changes
in commodity prices, production rates and the timing of capital
expenditure. These forecasts, taking account of reasonably possible
changes in commodity prices, trading performance and expenditure,
show that the Group has adequate resources to continue in
operational existence for the foreseeable future, wherefore the
directors are confident that the Group will continue as a going
concern and have prepared the interim financial information on that
basis.
The Independent Auditors' Report on the statutory accounts for
the year ended 31 December 2012 contained an emphasis of matter in
respect of the Group's going concern, reflecting the uncertainty
over the repayment of $32.5m of bank borrowings, which was due in
2013 and 2014 and which could not be funded from the cash generated
from operations and existing working capital. Management were then
in advanced negotiations with the Group's bankers to reschedule the
existing bank debt.On 20 September 2013, as discussed in Notes 10
and 17, a revised repayment schedule was agreed whereby the terms
of the relevant loan facilities were extended to December 2018.
Repayment of the $26.5 million now outstanding under the two
facilities will commence in March 2014, with total repayments of
$1.3 million due in 2014.
3. Principal accounting policies
The Group's principal accounting policies applied in the
presentation of the consolidated interim financial information are
set out below. These policies have been consistently applied to all
periods presented, unless otherwise stated, and are consistent with
those that the directors intend to use in the financial statements
for the year ending 31 December 2013 which will be prepared in
accordance with IFRS as adopted by the EU.
Basis of preparation
The condensed consolidated interim financial information for the
six months ended 30 June 2013 has been prepared under the
historical cost convention and in accordance with the AIM Rules and
complies with IAS 34 Interim financial reporting as adopted by the
EU. The interim condensed consolidated financial report does not
include all disclosures that would otherwise be required in a
complete set of financial statements and should be read in
conjunction with the annual report and accounts for 2012.
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these
estimates. The areas involving a higher degree of judgement or
complexity, or where assumptions and estimates are significant to
the consolidated financial statements, are disclosed in Note 4.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision only
affects that period or in the period of revision and future periods
if the revision affects both current and future periods.
The same accounting policies, presentation and methods of
computation are followed in this condensed consolidated interim
financial information as were applied in the Group's latest annual
audited financial statements except that, in the current financial
year, the Group has adopted a number of new or revised Standards
and interpretations. However none of these has had a material
impact on the Group's reporting.
None of the IFRS and IFRIC amendments or interpretations issued
by the IASB since the publication of the latest annual report is
expected to have a material impact on the Group.
Basis of consolidation
The consolidated financial statements of the Group include the
accounts of Trans-Siberian Gold plc and its subsidiaries.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are de-consolidated from the date
on which control ceases. Inter-company transactions, balances and
unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated but considered an
impairment indicator of the asset transferred. The accounting
policies and financial year ends of its subsidiaries are consistent
with those applied by the Company.
Foreign currency translation
a) Functional and presentation currency
Items included in the financial information of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates (the functional
currency). The consolidated financial information is presented in
US dollars ($), which is the functional and presentation currency
of the Company and the functional currency of its subsidiaries.
b) Transactions and balances
Foreign currency transactions are translated into the functional
currency at the average exchange rate ruling during the month in
which the transactions occur. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in
profit or loss. Foreign exchange gains and losses resulting from
the translation of cash, cash equivalents and borrowings
denominated in foreign currencies are shown as financing
activities; all other foreign exchange gains and losses are shown
as operating activities.
Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision makers.
The chief operating decision makers have been identified as the
Chief Executive Officer, Finance Director and the non-executive
board members.
The operating results of each of the geographical segments are
regularly reviewed by the Group's chief operating decision makers
in order to make decisions about the allocation of resources and to
assess their performance. The Group has one operating segment in
Russia which has production, exploration and development
activities. The Group's activities in the United Kingdom are of an
administrative and corporate nature and do not form part of the
operating segment.
Property, plant and equipment
Property, plant and equipment are recorded at historical cost
less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items. Depreciation
of property, plant and equipment is calculated using the
straight-line method to allocate their cost to their residual
values over their estimated useful lives, being:
Buildings - 3-20 years
Motor vehicles - 4-7 years
Plant and machinery - 4-7 years
Office furniture and equipment - 3-5 years
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each reporting date. An asset's
carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount. Gains and losses on disposals are determined by
comparing the proceeds with the carrying amount and are recognised
within administrative expenses in profit or loss. Assets under
construction are not subject to depreciation until the date on
which the Group brings them into use.
Leases
Leases in which a significant portion of the risks and rewards
of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases (net of any incentives
received from the lessor) are charged to profit or loss on a
straight-line basis over the period of the lease.
Assets held under finance leases are capitalised as property,
plant and equipment at the estimated present value of the
underlying lease payments. The corresponding finance lease
obligation is included in creditors due within or after more
than one year. The interest element is allocated to accounting
periods during the lease term to reflect a constant rate of
interest on the remaining balance of the obligation for each
accounting period.
Exploration and evaluation costs
When the Group incurs expenditure on mining properties that have
not reached the stage of commercial production, the costs of
acquiring the rights to such mining properties and related
exploration and evaluation costs, including directly attributable
employment costs, are deferred where the expected recovery of costs
is considered probable by the successful exploitation or sale of
the asset. General overheads are expensed immediately. Depreciation
on property, plant and equipment used on exploration and evaluation
projects is charged to deferred costs whilst the projects are in
progress. The Group capitalises borrowing costs directly
attributable to the acquisition, construction or production of a
qualifying asset (one that takes a substantial period of time to
get ready for use or sale) as part of the cost of that asset.
Finance costs incurred in respect of the Group's general borrowings
are expensed in profit or loss as incurred. Exploration and
evaluation costs are not amortised.
Where a feasibility study indicates that the future recovery of
costs is not probable, full provision is made in respect of any
deferred costs. Where mining properties are abandoned, deferred
expenditure is written off in full.
Deferred exploration and evaluation costs are assessed at each
reporting date to determine whether there are indicators that the
asset may be impaired. If any such indicator exists, a review for
impairment is conducted.
The amounts shown as deferred exploration and evaluation
expenditure represent costs incurred and do not necessarily reflect
present or future values.
In future a project's deferred exploration and evaluation
expenditure will be transferred to non-current mining assets when
the decision to proceed to the development stage of that project is
taken.
Mining properties
Once a project reaches the stage of commercial production, the
capitalised exploration and evaluation expenditure, other than that
on buildings, plant and machinery and equipment, related to that
project is transferred to tangible assets as mining properties.
Mining properties are depleted over the estimated life of the
reserves on a 'unit of production' basis.
Commercial reserves are proven and probable reserves. Changes in
commercial reserves affecting unit of production calculations are
deal with prospectively over the revised remaining reserves.
Impairment
The carrying amount of the Group's non-current assets is
compared to the recoverable amount of the assets whenever events or
changes in circumstances indicate that the net book value may not
be recoverable. The recoverable amount is the higher of value in
use and the fair value less costs to sell.
Value in use is estimated by reference to the net present value
of expected future cash flows of the relevant cash generating unit.
Individual mining properties are considered to be separate income
generating units for this purpose, except where they would be
operated together as a single mining business.
If the recoverable amount is less than the carrying amount of an
asset, an impairment loss is recognised. The revised carrying
amounts are amortised in line with the Group's accounting
policy.
A previously recognised impairment loss is reversed if the
recoverable amount increases as a result of a reversal of the
conditions that originally resulted in the impairment. The reversal
is recognised in the income statement and is limited to the
carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised in the prior
reporting periods.
Business combinations
The consolidated financial statements incorporate the results of
the business combinations using the acquisition method of
accounting. In the consolidated statement of financial position,
the acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the
acquisition date. The results of acquired operations are included
in the consolidated statement of comprehensive income from the date
on which control is obtained.
Financial instruments
Financial assets are recognised when the Group has rights or
other access to economic benefits. Such assets consist of cash,
equity instruments, contractual rights to receive cash or another
financial asset, or contractual rights to exchange financial
instruments with another entity on potentially favourable terms.
Financial liabilities are recognised when there is an obligation to
transfer benefits and that obligation is a contractual liability to
deliver cash or another financial asset or to exchange financial
instruments with another entity on potentially unfavourable terms.
When these criteria no longer apply, a financial asset or liability
is no longer recognised. Compound financial instruments are split
into their debt and equity components.
If a legally enforceable right exists to set off recognised
amounts of financial assets and liabilities, which are in
determinable monetary amounts, and the Group intends to settle on a
net basis, the relevant financial assets and liabilities are
offset.
The Group has no financial instruments that are classified as
fair value through profit or loss.
Interest costs are charged against income in the year in which
they are incurred. Premiums or discounts arising from the
difference between the net proceeds of financial instruments
purchased or issued and the amounts receivable or payable
at maturity are taken to net interest payable over the life of
the instrument.
Inventories
Raw materials and consumables, which consist of tools for
development activities, spare parts, fuel and materials used in
mining operations, are initially recognised at cost, and
subsequently valued at the lower of cost and net realisable
value.
Ore stocks containing gold are valued at the lower of weighted
average cost (including direct labour costs and related overheads)
and net realisable value (using assay data to estimate the amount
of gold contained in the stockpiles, adjusted for expected gold
recovery rates).
Finished goods (comprising refined gold and silver) and work in
progress (including gold in circuit and gold dore) are stated at
the lower of weighted average cost and net realisable value. Cost
includes direct materials, direct labour costs and production
overheads, including depreciation and depletion of relevant
property, plant and equipment and mining properties.
Net realisable value represents the estimated selling price less
all expected costs to completion and costs to be incurred in
selling and distribution.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held
at call with banks and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities in the statement of
financial position.
Revenue
The Group has entered into contracts for the sale of refined
gold and silver. Revenue arising from sales under these contracts
is recognised when the price is determinable, the product has been
delivered in accordance with the terms of the contract, the
significant risks and rewards have been transferred to the customer
and collection of the sale price is reasonably assured.
Taxation
Current tax is the expected tax payable or recoverable on the
taxable profit or loss for the year, using rates enacted at the
reporting date and any adjustments to the tax payable in respect of
previous years.
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated
financial statements. However, the deferred income tax is not
accounted for if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantively enacted by
the reporting date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising
on investments in subsidiaries and associates, except where the
timing of the reversal of the temporary difference is controlled by
the Group and it is probable that the temporary difference will not
reverse in the foreseeable future.
Share-based payment transactions
The Company makes equity-settled share-based payments to certain
Group employees under the terms of its employee share option
scheme. The fair value of options granted to employees is
recognised as an employee expense, with a corresponding increase in
equity by way of a credit to retained earnings.
The fair value is measured at grant date and expensed on a
straight-line basis over the expected vesting period. The fair
value of the options granted is measured using a Black-Scholes
valuation model, taking into account the terms and conditions upon
which the options were granted. The amount recognised as an expense
is adjusted to reflect the actual number of share options that vest
or are likely to vest except where non-exercise is only due to the
Company's share price not achieving the threshold for vesting.
Non-market based vesting conditions are taken into account in
estimating the number of options likely to vest. The estimate of
the number of options likely to vest is reviewed at each reporting
date up to the vesting date, at which point the estimate is
adjusted to reflect the actual options exercised. No adjustment is
made after the vesting date even if the options are not
exercised.
Defined contribution personal pension plan
Contributions to employees' defined contribution personal
pension plans are recognised as an expense in profit or loss as the
services giving rise to the Group's obligations are rendered by the
employees.
Provisions
Provisions for decommissioning, environmental restoration and
legal claims are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the
obligation and the amount has been reliably estimated. Provisions
are not recognised for future operating losses.
Group companies are generally required to restore mine and
processing sites at the end of their productive lives to a
condition acceptable to the relevant authorities and consistent
with the Group's environmental policies. The expected cost of any
committed decommissioning or restoration programme, discounted to
its net present value where the effect of discounting is material,
is provided and capitalised at the beginning of each project. The
capitalised cost is amortised over the life of the operation and
the increase in the net present value of the provision for the
expected cost is included with interest and similar charges.
The costs of on-going programmes to prevent and control
pollution and to rehabilitate the environment are charged to profit
or loss as incurred.
Determination of ore reserves
The Group estimates its ore reserves and mineral resources based
on information compiled by Competent Persons as defined in
accordance with the 2004 edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves (the JORC code).
4. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
Use of estimates and assumptions
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results.
The more significant areas requiring the use of management
estimates and assumptions relate to mineral reserves that are the
basis of future cash flow estimates and unit-of-production
depreciation, depletion and amortisation calculations;
decommissioning, site restoration, environmental costs and closure
obligations; estimates of recoverable gold and other
materials; asset impairments; the fair value and accounting
treatment of financial instruments and deferred taxation.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
Critical judgements in applying the entity's accounting
policies
a) Mining properties
The recoverability of the amounts shown in the Group statement
of financial position in relation to mining properties (and also
the carrying value of the Company's investments in its
subsidiaries) are dependent upon compliance with the terms of the
relevant mineral rights licences, the political, economic and
legislative stability of the regions in which the Group operates,
the Group's ability to obtain the necessary financing to fulfil its
obligations as they arise and upon future profitable production or
proceeds from the disposal of properties.
b) Deferred exploration and evaluation costs
The recoverability of the amounts shown in the Group statement
of financial position in relation to deferred exploration and
evaluation expenditure (and also the carrying value of the
Company's investments in its subsidiaries) are dependent upon the
discovery of economically recoverable reserves, continuation of the
Group's interests in the underlying mining claims, the political,
economic and legislative stability of the regions in which the
Group operates, compliance with the terms of the relevant mineral
rights licences, the Group's ability to obtain the necessary
financing to fulfil its obligations as they arise and upon future
profitable production or proceeds from the disposal of
properties.
c) Decommissioning, site restoration and environmental costs
The Group's mining and exploration activities are subject to
various laws and regulations governing the protection of the
environment. The Group recognises management's best estimate for
asset retirement obligations in the period in which they
are incurred. Actual costs incurred in future periods could
differ materially from the estimates. Additionally, future changes
to environmental laws and regulations, life of mine estimates and
discount rates could affect the carrying amount of this provision.
Such changes could similarly impact the useful lives of assets
depreciated on a straight-line-basis, where those lives are limited
to the life of mine.
d) Share-based payments
The Company makes equity-settled share-based payments to certain
Group employees and advisers. Equity-settled
share-based payments are measured at fair value using a
Black-Scholes valuation model at the date of grant. The fair
value is expensed as services are rendered over the vesting
period, based on the Group's estimate of the shares that will
eventually vest and adjusted for the effect of non-market-based
vesting conditions. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of
non-transferability, exercise restrictions and
behavioural considerations.
e) Contingencies
By their nature, contingencies will only be resolved when one or
more future events occur or fail to occur. The assessment of such
contingencies inherently involves the exercise of significant
judgement and estimates of the outcome of future events.
5. Segment information
The Group's operations are entirely focused on gold production
and exploration and development activities within the Russian
Federation, with its corporate head office in the UK. The operating
segment has been identified on the basis of internal reports about
the components of the Group. The Group has one reportable segment,
being operations in Russia, as set out below. The operating results
of this segment are regularly reviewed by the Group's chief
operating decision makers in order to make decisions about the
allocation of resources and to assess its performance.
The accounting policies of these segments are in line with those
set out in note 3.
30 June 2013 30 June 2012 31 December
2012
Russia operating segment $000 $000 $000
-------------------------------------- ------------- ------------- ------------
Revenue 22,101 21,441 44,886
Cost of sales (21,497) (21,589) (37,184)
Administration expenses (2,761) (3,356) (5,431)
Impairment provision (Rodnikova) - - (2,902)
Other income 1 96 75
Finance expense (1,702) (1,458) (4,009)
Finance income 7 2 5
Exchange differences 184 26 2,075
Taxation (expense) credit (505) 1,442 (1,307)
-------------------------------------- ------------- ------------- ------------
Loss for the period after taxation (4,172) (3,396) (3,792)
-------------------------------------- ------------- ------------- ------------
Non-current assets 103,888 119,686 110,588
Inventories 17,879 12,884 20,404
Trade and other receivables (current
assets) 2,242 2,659 2,786
Cash and cash equivalents 1,002 3,240 568
-------------------------------------- ------------- ------------- ------------
Segment assets 125,011 138,469 134,346
-------------------------------------- ------------- ------------- ------------
Loans and borrowings 27,296 39,862 33,612
Trade and other payables (current
liabilities) 8,015 5,167 6,530
Deferred tax liability - 320 -
Provisions 1,110 644 1,045
-------------------------------------- ------------- ------------- ------------
Segment liabilities 36,421 44,993 41,187
-------------------------------------- ------------- ------------- ------------
Segment net assets 88,590 93,476 93,159
-------------------------------------- ------------- ------------- ------------
30 June 2013 30 June 2012 31 December
2012
$000 $000 $000
------------------------------------- ------------- ------------- ------------
Operating segment loss for the
period after taxation (4,172) (3,396) (3,792)
Head office administration expenses (408) (462) (838)
Finance expense (34) (71) (103)
Finance income - 1 1
Exchange differences (2) 3 2
------------------------------------- ------------- ------------- ------------
Loss for the period after taxation (4,616) (3,925) (4,730)
------------------------------------- ------------- ------------- ------------
-- Finance income, finance costs and taxation have been analysed
above in line with the way the Group's business is structured.
-- All material non-current assets other than financial
instruments are owned by a Russian subsidiary and are located in
Russia.
-- All revenue is generated in Russia from the sale of refined
gold and silver to one well established Russian bank.
-- All material capital expenditure in the current and previous
periods relates to the Russian operating segment.
6. Mining properties
Mining properties assets relate to the Asachinskoye (Asacha)
mining licence held by the Company's subsidiary ZAO Trevozhnoye
Zarevo (TZ).
Asacha Rodnikova Total
$000 $000 $000
-------------------- -------- ---------- --------
At 1 January 2012 34,224 - 34,224
Additions 2,396 - 2,396
Depletion (7,108) - (7,108)
-------------------- -------- ---------- --------
At 30 June 2012 29,512 - 29,512
-------------------- -------- ---------- --------
Additions 8,105 - 8,105
Depletion (8,119) - (8,119)
-------------------- -------- ---------- --------
At 31 December 2012 29,498 - 29,498
-------------------- -------- ---------- --------
Additions 2,896 - 2,896
Depletion (3,596) - (3,596)
-------------------- -------- ---------- --------
At 30 June 2013 28,798 - 28,798
-------------------- -------- ---------- --------
7. Property, plant and equipment
Plant Assets
and Motor Office equipment under
construction
Buildings machinery vehicles and furniture (a) Total
$000 $000 $000 $000 $000 $000
Cost
At 1 January
2012 72,610 15,968 2,339 496 1,823 93,236
Additions - - - - 1,777 1,777
Disposals - (79) - (10) - (89)
Re-classification - 121 - - (121) -
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
At 30 June 2012 72,610 16,010 2,339 486 3,749 94,924
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
Depreciation
At 1 January
2012 (2,562) (3,739) (1,712) (329) - (8,342)
Charge for year
(b) (5,174) (1,057) (113) (34) - (6,378)
Disposals - 34 - 9 - 43
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
At 30 June 2012 (7,736) (4,762) (1,825) (354) - (14,677)
Net book value
At 1 January
2012 70,048 12,229 627 167 1,823 84,894
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
At 30 June 2012 64,874 11,248 514 132 3,479 80,247
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
Cost
At 1 July 2012 72,610 16,010 2,339 486 3,479 94,924
Additions 1,673 870 - 19 (874) 1,688
Disposals (8) (83) (46) (9) - (146)
Re-classification 1,009 84 - 6 (1,099) -
At 31 December
2012 75,284 16,881 2,293 502 1,506 96,466
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
Depreciation
At 1 July 2012 (7,736) (4,762) (1,825) (354) - (14,677)
Charge for year
(b) (5,170) (1,263) (88) (31) - (6,552)
Disposals 6 56 46 9 - 117
At 31 December
2012 (12,900) (5,969) (1,867) (376) - (21,112)
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
Net book value
At 1 July 2012 64,874 11,248 514 132 3,479 80,247
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
At 31 December
2012 63,384 10,912 426 126 1,506 75,354
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
Cost
At 1 January
2013 75,284 16,881 2,293 502 1,506 96,466
Additions 894 469 - - 228 1,591
Disposals (12) (1) - (2) - (15)
Re-classification 61 (45) 1 (1) (16) -
At 30 June 2013 76,227 17,304 2,294 499 1,718 98,042
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
Depreciation
At 1 January
2013 (12,900) (5,969) (1,867) (376) - (21,112)
Charge for year
(b) (5,427) (1,290) (87) (26) - (6,830)
Disposals 12 - - 3 - 15
At 30 June 2013 (18,315) (7,259) (1,954) (399) - (27,927)
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
Net book value
At 1 January
2013 62,384 10,912 426 126 1,506 75,354
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
At 30 June 2013 57,912 10,045 340 100 1,718 70,115
------------------- ---------- ----------- ---------- ----------------- -------------- ----------
a. Assets under construction at 30 June 2013 comprise $1,405,918
(31 December 2012: $1,239,426) for building construction and
infrastructure at Asacha; $35,329 (31 December 2012: $69,366) for
plant and equipment at Asacha and $276,839 (31 December 2012
$197,361) for building and infrastructure at Rodnikova.
b. $574,642 (2012 first half: $157,572) of the depreciation
charge related to property, plant and equipment used on exploration
and evaluation projects or assets under construction and was
capitalised in exploration and evaluation costs or property, plant
and equipment in accordance with the Group's accounting policy.
c. The net carrying amount of property, plant and equipment
includes the following amounts in respect of assets held under
finance leases:
30 June 30 June 30 December
2013 2012 2012
$000 $000 $000
-------------------------------- -------- -------- ------------
Plant and machinery 974 469 817
Motor Vehicles - - -
Office equipment and furniture - - -
-------------------------------- -------- -------- ------------
974 469 817
-------------------------------- -------- -------- ------------
8. Deferred Exploration and evaluation costs
Movements on deferred exploration and evaluation expenditure, by
location of the property, are as follows:
Asacha Rodnikova Total
$000 $000 $000
---------------------- ------- ---------- --------
At 1 January 2012 - 2,866 2,866
Additions (i) - - -
---------------------- ------- ---------- --------
At 30 June 2012 - 2,866 2,866
---------------------- ------- ---------- --------
At 1 July 2012 - 2,866 2,866
Additions (i) 1,643 32 1,679
Impairment provision - (2,902) (2,902)
At 31 December 2012 1,643 - 1,643
---------------------- ------- ---------- --------
At 1 January 2013 1,643 - 1,643
Additions (i) - - -
---------------------- ------- ---------- --------
At 30 June 2013 1,643 - 1,643
---------------------- ------- ---------- --------
i Additions include capitalised PPE depreciation (see Note 7(b) ).
9. Inventories
30 June 30 June 31 December
2013 2012 2012
$000 $000 $000
------------------------------ -------- -------- ------------
Finished goods 2,078 - -
Gold in progress 3,014 2,844 3,970
Silver in progress 46 92 139
Ore stocks 10,275 6,280 12,357
Fuel 726 1,314 1,273
Other materials and supplies 1,740 2,354 2,665
At end of period 17,879 12,884 20,404
------------------------------ -------- -------- ------------
10. Borrowings
30 June 30 June 31 December
2013 2012 2012
$000 $000 $000
----------------------------------- --------- --------- ------------
Non-current:
Bank borrowings - 23,000 12,500
Finance lease obligations 305 196 528
At end of period 305 23,196 13,028
----------------------------------- --------- --------- ------------
Current:
Bank borrowings 26,576 15,500 20,103
Related party - other loans 959 784 815
Finance lease obligations 415 166 481
----------------------------- ------- ------- -------
At end of period 27,950 16,450 21,399
----------------------------- ------- ------- -------
28,255 39,646 34,427
----------------------------- ------- ------- -------
Movement in borrowings is analysed
as follows:
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2013 2012 2012
$000 $000 $000
----------------------------------- --------- --------- -------------
At beginning of period 34,427 48,498 48,498
Increase in borrowings 110 781 781
Interest on related party loans 34 71 103
Repayment of loans (6,027) (3,288) (9,185)
Conversion of loans to equity - (6,445) (6,445)
Finance leases (289) 29 675
At end of period 28,255 39,646 34,427
----------------------------------- --------- --------- -------------
In 2009 ZAO Trevozhnoye Zarevo (TZ) refinanced its initial
borrowing for the Asacha project with a five year $25 million loan
facility from Sberbank at an annual interest rate of 11.75%,
reduced to 10.5% in May 2010. Repayments commenced in November
2011. In 2010 TZ agreed a further four year loan facility of $18
million for the Asacha project with Sberbank at an annual interest
rate of 10.5%. Repayments commenced in September 2012. On 20
September 2013, as discussed in Note 17, Sberbank and TZ agreed to
extend the terms of the facilities to December 2018. Repayment of
the $26.5 million outstanding will commence in March 2014, with
total repayments of $1.3 million due in 2014. TZ has agreed to
implement a gold price hedge programme for the revised term of the
facilities, with gold price protection for the initial 12 month
period to be put in place by 1 November 2013.
In September 2011 UFG Asset Management (UFG) and AngloGold
Ashanti Limited (AGA), each a related party by virtue of their then
respective 54.42% and 30.70% holdings in the shares of the Company,
provided TSG with short term loan facilities amounting to $8
million on commercial terms, each facility agreement including an
option for the lender, subject to the requisite approval of TSG's
shareholders, to convert any part of the outstanding loan into TSG
shares at a price equivalent to the volume weighted average price
of TSG's shares for the period of 60 business days prior to notice
of such conversion, exercisable prior to scheduled repayment 180
days after drawdown.
In February 2012, as discussed in Note 15, three of the short
term loan facilities provided by UFG and part of the short term
facility provided by AGA, in aggregate $6,445,099 including accrued
interest, were converted into TSG ordinary shares. The fourth UFG
facility and the remaining part of the AGA facility were repaid in
March 2012 and April 2012 respectively.
In June 2012 UFG and AGA agreed to provide additional short term
facilities, in aggregate $781,000 million, on commercial terms.
These facilities were increased to an aggregate $891,000 in January
2013 and their terms extended to 30 September 2013, the revised
agreements also including the same lender's conversion option as
the facilities provided in 2011. As discussed in Note 17, on 26
September 2013 UFG and AGA agreed to extend the terms of the two
facilities, in aggregate $891,000, to 31 March 2014.
In consideration of an earlier loan facility provided by UFG in
2009, the Company also agreed, subject to obtaining the necessary
shareholder approvals, to issue warrants to subscribe for
additional TSG shares to UFG on terms to be agreed and considered
as fair and reasonable by the Company's Board (excluding those
directors connected to UFG) after consultation with TSG's Nominated
Adviser. No warrants were issued in 2010, 2011, 2012 or 2013 or
after the reporting date.
11. Provisions
6 months 6 months Year ended
ended ended
30 June 2013 30 June 31 December
2012 2012
$000 $000 $000
------------------------ -------------- --------- -------------
At beginning of period 1,045 644 644
Additions 65 - 401
At end of period 1,110 644 1,045
------------------------ -------------- --------- -------------
The above provision relates entirely to site restoration at the
Asacha mine. The amount of $1,110,064 (31 December 2012:
$1,045,064) is included in Mining Properties and is calculated
based on regional data from the Monitoring Ecological Centre of
Kamchatka.
12. Revenue
6 months 6 months
ended ended Year ended
30 June 31 December
30 June 2013 2012 2012
$000 $000 $000
--------------- -------------- --------- -------------
Gold 21,625 20,985 43,911
Silver 476 456 975
Total revenue 22,101 21,441 44,886
--------------- -------------- --------- -------------
13. Cost of sales
6 months 6 months
ended ended Year ended
30 June 31 December
30 June 2013 2012 2012
$000 $000 $000
---------------------- -------------- --------- -------------
Wages and salaries 5,092 3,752 7,985
Energy and materials 6,431 2,212 7,802
Depreciation 5,145 5,612 12,434
Depletion 3,412 6,088 6,915
Other costs 1,417 3,925 2,048
---------------------- -------------- --------- -------------
Total cost of sales 21,497 21,589 37,184
---------------------- -------------- --------- -------------
14. Earnings per share
The calculation of basic and diluted loss per share has been
based on the loss for the period of $4,615,817 (2012 first half:
$3,925,387) and the weighted average number of shares being
110,053,073 ordinary shares issued for the period ended 30 June
2013 (2012 first half: 109,322,774).
15. Share capital and premium
Number of
Number of shares allotted Share
shares and fully capital Share premium Total
authorised paid $000 $000 $000
--------------------- ------------ ----------------- --------- -------------- --------
At 1 January 2012 150,000,000 104,210,683 18,050 84,013 102,063
Shares issued
Placing for cash - 5,842,390 938 5,507 6,545
At 30 June 2012 150,000,000 110,053,073 18,988 89,520 108,508
At 31 December 2012 150,000,000 110,053,073 18,988 89,520 108,508
--------------------- ------------ ----------------- --------- -------------- --------
At 1 January 2013 150,000,000 110,053,073 18,988 89,520 108,508
At 30 June 2013 150,000,000 110,053,073 18,988 89,520 108,508
------------------- ------------ ------------ ------- ------- --------
All shares are ordinary shares with a par value of 10 pence.
In February 2012, 5,842,390 ordinary shares were issued to UFG
Asset Management (UFG) and AngloGold Ashanti Limited (AGA) in
settlement of the Company's indebtedness, in aggregate $6,445,099
including accrued interest. 3,738,665 ordinary shares were issued
to UFG, 2,808,151 ordinary shares on 1 February 2012 at 69.94 pence
per share and 930,514 ordinary shares on 3 February 2012 at 69.98
pence per share, and 2,103,725 ordinary shares to AGA, 1,578,620
ordinary shares on 1 February 2012 at 69.98 pence per share and
525,105 ordinary shares on 3 February 2012 at 69.75 pence per
share, in consideration of the conversion of the outstanding
amounts of four loan facilities as discussed in Note 10.
Retained earnings represents the cumulative net gains and losses
recognised in the statement of comprehensive income less any
amounts reflected directly in other reserves.
The share premium account represents the amounts received by the
Company on the issue of its shares which were in excess of the
nominal value of the shares.
16. Related party transactions
There are no related party transactions other than those
relating to major shareholders AngloGold Ashanti Limited (AGA) and
UFG Asset Management (UFG) as detailed below:
Purchases during Amount owing
the 6 months at
to 30 June 2012 30 June 2012
Related $000 $000
party Nature of transaction
--------- ----------------------- ------------------ --------------
AGA Loan 281 281
Loan interest 24 -
--------- ----------------------- ------------------ --------------
305 281
--------------------------------- ------------------ --------------
UFG Loan 500 500
Loan interest 47 3
--------------------------------- ------------------ --------------
547 503
--------------------------------- ------------------ --------------
Total 852 784
---------------------------------- ------------------ --------------
Purchases during Amount owing
the 6 months at
to 31 December 2012 31 December
2012
Related $000 $000
party Nature of transaction
--------- ----------------------- --------------------- -------------
AGA Loan - 281
Loan interest 11 11
--------------------------------- --------------------- -------------
11 292
--------------------------------- --------------------- -------------
UFG Loan - 500
Loan interest 20 23
--------------------------------- --------------------- -------------
20 523
--------------------------------- --------------------- -------------
Total 31 815
---------------------------------- --------------------- -------------
Purchases during Amount owing
the 6 months at
to 30 June 2013 30 June 2013
Related $000 $000
party Nature of transaction
--------- ----------------------- ------------------ --------------
AGA Loan 40 321
Loan interest 12 23
52 344
--------------------------------- ------------------ --------------
UFG Loan 70 570
Loan interest 22 45
--------------------------------- ------------------ --------------
92 615
--------------------------------- ------------------ --------------
Total 144 959
---------------------------------- ------------------ --------------
Loan facilities provided by UFG and AGA and the conversion of
several of those loan facilities into TSG ordinary shares are
discussed in Notes 10 and 15 respectively.
The directors of the Company consider that there are no key
management personnel, as defined by IAS 24, Related party
transactions, other than the directors themselves.
17. Events after the reporting date
On 20 September 2013 Sberbank and the Company's subsidiary ZAO
Trevozhnoye Zarevo (TZ) agreed the terms of an extension of TZ's
loan facilities to December 2018. Repayment of the $26.5 million
outstanding under the two facilities will commence in March 2014,
with total repayments of $1.3 million due in 2014. TZ has agreed to
implement a gold price hedge programme for the revised term of the
facilities, with gold price protection for the initial 12 month
period to be put in place by 1 November 2013.
On 26 September 2013 UFG Asset Management (UFG) and AngloGold
Ashanti Limited (AGA) agreed to extend the terms of their two short
term loan facilities, in aggregate $891,000, initially provided to
TSG in June 2012, to 31 March 2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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