| | Published : May 27th, 2009 | Preliminary Results for the Year Ended 31st December, 2008 |
|
Article
|
Comments
|
Comment this article
|
Rating
|
♥
Follow Company
|
|
Wednesday
27 May,
2009
AIM:CLF / TSX:CFG
Cluff Gold plc
("Cluff Gold" or the "Company")
Preliminary
Results for the Year Ended 31st December, 2008
Highlights
For the
year ended 31 December 2008 (the period under review) and the period ended
26 May 2009
Kalsaka, Burkina Faso(78%
ownership)
o Completed development of gold mine
in Q3, 08
o First gold poured in October 08
o Official mine opening in October 08
o New mining contractor commenced work
in January 09
o Gold plant commissioned in March 09
Angovia, Cote d?Ivoire (90% ownership)
o Completed development of gold mine
in Q1, 08
o First gold poured in March 08
o Larger mining fleet deployed in
January 09
o Upgrade to agglomeration drum completed in April 09
o Significant improvement in mining production in April
09
Baomahun, Sierra Leone(100%
ownership)
o Pre-Feasibility drilling continues
with excellent results received in Q1, 08
o Seven fold increase in Measured and Indicated resource
announced in June 08
o Acquisition of remaining 40% interest in Baomahun completed in August 08
o 25 year Mining Lease issued from September 08
o Pre-Feasibility drilling at depth
and along strike commences in April 09
o Successful placing raises gross
proceeds of US$25.4 million in March 2008
o US$10 million Loan Facility arranged in September 08
o Cash of US$5.2 million at 31 December 08
o Listing on the Toronto Stock
Exchange (?CFG?) in February 09
o Successful placing raises gross proceeds of US$11.4
million in March 09
Comment
Algy Cluff,
Chairman and Chief Executive, said today "2008 has been a pivotal year for
the Company in that this was the year which saw us emerge from an explorer to a
producer. To bring two mines onto production in two countries, neither of which
has a strong mining support framework, was a formidable task but with a good
team, hard work and a little luck, we won through. I am pleased to report that
production this year has improved month on month and I
expect both operations to be out of commissioning by mid-year with indications
supporting combined production of 100,000 ounces of gold for 2009.
I
am also pleased to report that for the fourth year running our Group resource
position has increased and is now over 2 million
ounces of Measured and Indicated resources of gold with an additional Inferred
resource of over 600,000 ounces of gold. Most of this increase came from Baomahun, our flagship Gold Project located in Sierra
Leone, where we acquired the remaining 40% interest in August 2008.
Financially,
the Company raised just over US$25 million at the beginning of 2008 in order to
complete the construction of the two Gold Mines at Kalsaka
and Angovia and thought it prudent to arrange a Loan
Facility of US$10 million in September of last year to ensure adequate working
capital throughout the commissioning phase of both mines. This year, an amount
of just over US$11 million was raised principally to accelerate the drilling programme at Baomahun before the
onset of rains. I am hopeful that results from this drilling will provide
support for an enlarged mining operation including both open pit and
underground workings.
With
a resilient gold price, forecast production from operations and good results
from our drilling programme, I am confident that we
shall build upon the efforts of 2008 and end this year in a strong position to
take advantage of opportunities within our area of West Africa."
Results
The
consolidated net loss after taxation of the Group in respect of the year
ended 31 December 2008 amounted to US$945,005 (2007: loss of
US$4.8 million); loss per share 1.08 cents (2007:
7.47 cents). The result for the year includes a credit in respect of
the acquisition of the remaining 40% interest in the Baomahun
Gold Project which has arisen as a consequence of the fair value rules which
underpin IFRS. Also, it should be noted that whilst operations are in the
commissioning phase, operating results are not reflected on the income
statement but are instead included within mining development costs on the balance
sheet.
The
assets of the Group at 31 December 2008 amounted to
US$128.5 million (2007: US$69.6 million) which include intangible
assets amounting to approximately US$43.1 million (2007:
US$10.7 million) and tangible assets amounting to approximately
US$77.4 million (2007: US$41.4 million). Intangible assets
include accumulated deferred exploration and evaluation costs mainly
on the Baomahun Gold Project; the acquisition cost of
the remaining interest in Baomahun and the assigned
value of the mining licences granted by the
governments of Burkina Faso and Cote d'Ivoire.
Cash
balances held by the Group at year end amounted to approximately
US$5.2 million (2007: US$13.9 million). In March 2008, the Company raised
approximately US$25.4 million before expenses through a private
placement of 14,570,000 shares at 88 pence per share. These funds
were used principally to complete the construction of the Angovia
and Kalsaka Gold Mines. In September 2008, in order
to ensure adequate working capital through the commissioning phase of both
operations, the Company arranged a US$10 million Loan Facility with RMB
Australia Holdings Limited, of which US$6 million has been drawn down.
Post
Balance Sheet Events
In
February 2009, the Company listed on the Toronto Stock Exchange and in
March 2009, the Company successfully raised gross proceeds of US$11.4 million
through the placement of 20,285,000 shares at 40 pence per share. These funds
will be used principally to accelerate the drilling programme
designed to test the down dip and along strike extensions at the Baomahun Gold Project in Sierra Leone and to
increase production at the Kalsaka Gold Mine by
further investment in the on-site plant and equipment and through additional
ore reserve drilling.
Dividend
policy
The
Directors do not recommend the payment of a dividend.
Annual
Report
The
Annual Report and Accounts will be available on our website www.cluffgold.com and will be
posted to shareholders on 3 June, 2009.
Annual
General Meeting (AGM)
The
AGM will be held on 26 June 2009 at 10am at the offices of Maclay
Murray & Spens LLP, One London Wall, London, EC2Y 5AB.
Competent Person
Douglas
D. Chikohora has reviewed and approved the
information contained in this announcement. Mr Chikohora (MSc, MIMMM, CEng) is Technical Director of the
Company. Further information regarding Group resources may be found in tabular
form on the Company's website and in the Annual Report..
For
further information, please contact:
Cluff Gold
J.G.
Cluff / Eileen Carr
|
WH Ireland
Katy Mitchell
|
Chairman / Director
|
|
Tel: +44 (0) 20 7340 9790
|
Tel: +44 (0) 161 832 2174
|
Joanna Longo
Investor
Relations (Canada)
The
Equicom Group
+1 416
815 0700 ext 233
jlongo@equicomgroup.com
|
Simon Robinson
Investor
Relations (U.K.)
Farm
Street Communications Ltd
+44 (0) 207 099 2212
simon.robinson@farmstreetmedia.com
|
This
News Release includes certain "forward-looking information" within
the meaning of applicable Canadian securities legislation. All
statements other than statements of historical fact, included in this release,
including, without limitation, the positioning of the Company for future
success, statements regarding potential future production at Angovia and Kalsaka, exploration and
drilling results at Baomahun, and
future capital plans and objectives of Cluff
Gold, are forward-looking information that involve various risks and
uncertainties. There can be no assurance that such statements will prove to be
accurate and actual results and future events could differ materially from
those anticipated in such statements. Important factors that could cause actual
results to differ materially from Cluff Gold's
expectations include, among others, risks related to international operations,
the actual results of current exploration and drilling activities,
changes in project parameters as plans continue to be refined as well as future
price of gold. Although Cluff Gold has
attempted to identify important factors that could cause actual results to
differ materially, there may be other factors that cause results not to be as
anticipated, estimated or intended. There can be no assurance that such
statements will prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking statements. Cluff Gold does not undertake to update any
forward-looking statements that are included herein, except in accordance with
applicable securities laws.
NO REGULATORY
AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS PRESS RELEASE.
Chairman
and Chief Executive’s Statement
Dear
Shareholder,
2008
has been a pivotal year in the development of your Company. It was the year
which saw us emerge from "explorer" to "producer". Two
mines were brought into production and our flagship exploration project
continued to improve. I will not deny that, at times, operational challenges have
been tough, but with a good team, hard work and a little luck we have ended the
year in much better shape than when we began. I believe that 2009 will see
the fruition of our past efforts, with production from both the Kalsaka and Angovia Gold Mines
improving on a monthly basis. I am also pleased to report that drilling has
restarted at Baomahun where the resource will be
tested at depth and along strike, the results of which could expand that
resource significantly.
Operations
Angovia Gold Mine poured its first gold in
March 2008. The development timetable for this mine had experienced some delays
from inclement weather and late delivery of equipment and continued to face
challenges throughout 2008 with poor performance from the reconditioned plant and
equipment and low production rates from the mining contractor due to poor
levels of equipment availability. In order to overcome these problems,
certain plant and equipment were replaced or upgraded and the mining
contractor increased the size of the mining fleet in January 2009. The
results so far this year have been
encouraging, with mining performance currently close to budget.
However, as with most heap leach projects, it
takes time for this increase in mining performance to translate into gold
production. That said, I am confident that the tide has turned at Angovia and that the mine will be fully
commissioned by mid year.
Kalsaka Gold Mine poured its first gold in
October 2008 and although this was later than expected, the ramp up of
production has been as scheduled. Gold production in the first quarter of 2009
was 12,890 ounces and the gold plant has now been successfully commissioned.
The mining contractor was replaced at the year end and a newer,
larger mining fleet has now been deployed. All in all, I am pleased to report
that operations are on track to achieve our forecast gold production of 60,000
ounces for 2009.
To
bring two gold mines into production in the same year in two countries, neither
of which has a strong mining support framework, has been a formidable task and
I applaud our personnel in Cote d'Ivoire, Burkina
Faso and London for achieving this feat.
Exploration
During
the year, results from our exploration work have significantly increased the
potential of the Baomahun Gold Project. Our Measured
and Indicated resources categories for Baomahun
increased sevenfold during this period to over 1.0 million ounces of gold and
results from deeper drilled holes indicate the possibility of the original open
pit resource being supplemented by an underground deposit. Work has started to
test this potential with a 15,000 metre drilling programme already underway.
Exploration
elsewhere during 2008 was put on hold as the Group focused its attention and
funds on bringing the two new gold mines into production.
Acquisition
In
February 2008, your Company successfully negotiated the acquisition of the
remaining 40% of the Baomahun Gold Project for the
sum of US$21.8 million, which was to be satisfied by the issue of 12..4 million shares in your Company, subject to the
completion of various conditions precedent. In August of 2008, the last
remaining condition, being the Government approval of the Mining Lease, had
been achieved and the shares were duly issued. However, during the period from
February to August 2008, the share price of your Company had fallen in line
with world markets thus creating an unrealisable gain
of US$9 million which has been credited to this year's income statement.
I
am very pleased that we acquired 100% ownership of the Baomahun
Gold Project as I believe this project has major potential.
Financing
In
March 2008, your Company successfully completed a placing of 14,570,000
ordinary shares at a price of 88 pence per share and raised approximately
US$25.4 million before expenses. The funds were raised with the support of BMO
Capital Markets, W H Ireland Limited and Smith's Corporate Advisory Limited.
The funds raised were used to complete the construction and development of both
the Angovia and Kalsaka
Gold Mines and to complete the exploration drilling at the Baomahun
Gold Project.
In
September 2008, a US$10 million Loan Facility was arranged with RMB
Australia Holdings Limited to ensure adequate working capital during the
commissioning phase of both gold mines. Currently, US$6 million has been drawn
down from this facility.
A
further fundraising was completed in March 2009 which is described
below in "Post balance Sheet Events".
Market
Gold
remains an enigma - notwithstanding its relatively robust performance it
continues to disappoint its more evangelical supporters by failing to erupt
though the US$1,000 per ounce barrier. This may not altogether be a bad
thing as I fear that if it does stage a sustained rally the law of diminishing
returns could apply with Governments introducing excess profit taxes and
workers demanding higher wages. It must also be recognised
that, although the intellectual case for holding and investing in gold is
very compelling in this uncertain economic environment, gold has its enemies -
notably the civil servants and politicians. A high gold price suggests they are
failing to do their job properly and through Central Banks, they have the power
to hold back the price. At some point, of course, even they could be
overwhelmed by the inflation which they seem to deliberately foster. In the
meanwhile if gold moves in a band between US$850 and US$1,000 per ounce
our gold mines should provide highly satisfactory returns.
Post
balance sheet events
In February
2009, the Toronto Stock Exchange granted approval for the listing of your
Company's shares on that Exchange under the symbol "CFG". Our shares
will continue to be quoted and traded on AIM but I hope that this secondary
listing will enhance investor choice, improve liquidity for shareholders and
provide greater access for investors in our stock.
In March
2009, your Company successfully completed a placing of 20,285,000 ordinary
shares at a price of 40 pence per share and raised approximately US$11.4
million before expenses. The funds were raised with the support of BMO Capital
Markets, Thomas Weisel Partners and Smith's Corporate
Advisory Limited, all of whom I would like to thank especially as raising money
in this current economic climate is not without its challenges. The funds
raised have enabled your Company to commence further exploration drilling
at the Baomahun Gold Project prior to the onset of
rains in Sierra Leone and will also allow for additional
drilling at and around the Kalsaka Gold
Mine in order to increase the mineral resource thereby supporting
increased throughput at that gold mine.
Board
I
would like to welcome Ronald Winston and Geoffrey Stanley to our
Board of Directors, both of whom joined at the beginning of October. Ronald,
best known as Chairman of Harry Winston Inc., brings with him a wealth of
experience of doing business in Africa while Geoffrey has many years' experience
worldwide not only on the technical side but also on the corporate side of
mining. Both directors are based in North America and will be most helpful in
supporting our Toronto listing. I am very pleased that your Company
continues to attract such high calibre members to the
Board.
Conclusion
It
is the judgement of some that we operate in a
politically volatile part of the world. This argument could be construed as a
criticism of virtually anywhere in the developing world at the moment.
However, in West Africa we are involved in countries
which we believe boast excellent geology and which
is complemented by sensible mining investment codes. In addition, the law
to which they adhere is based on the English and French systems. We
have, in the countries in which we operate, established sensible and
practical partnerships with the governments with whom we work and, whilst
there is no denying the complexity of operating mines in Africa, I am
confident that we have the capacity to do so. I would like to thank our country
teams for their hard work and dedication; my fellow board members for their
support; and you the shareholder for staying with us during one of the
most tumultuous times in living memory.
J.G.Cluff
Chairman
and Chief Executive
26 May,
2009
Cluff Gold plc
and subsidiary undertakings
CONSOLIDATED
INCOME STATEMENT
For the year
ended 31 December 2008
|
|
2008
|
2007
|
|
|
US$
|
US$
|
|
|
|
|
OPERATING
COSTS
General
and administrative
|
|
(8,422,750)
|
(5,629,533)
|
|
|
|
|
Exploration costs written off
|
|
(781,256)
|
-
|
|
|
|
|
Negative
goodwill arising on acquisition of subsidiary
|
|
8,956,273
|
-
|
|
|
|
|
OPERATING LOSS
|
|
(247,733)
|
(5,629,533)
|
|
|
|
|
Interest
payable and similar charges
|
|
(1,099,839)
|
(742,933)
|
|
|
|
|
Interest
receivable and similar income
|
|
402,567
|
1,591,507
|
|
|
|
|
Loss before taxATION
|
|
(945,005)
|
(4,780,959)
|
|
|
|
|
Taxation
|
|
-
|
-
|
|
|
|
|
Loss after taxation
|
|
(945,005)
|
(4,780,959)
|
|
|
|
|
|
|
|
|
Loss
per share (CENTS)
-
Basic and diluted
|
|
(1.08)
|
(7.47)
|
|
|
|
|
|
|
|
|
Cluff Gold plc and subsidiary
undertakings
CONSOLIDATED
BALANCE SHEET
As at 31 December
2008
|
|
2008
|
2007
|
|
|
US$
|
US$
|
ASSETS
|
|
|
|
Non-current assets
|
|
|
|
Intangible assets
|
|
|
|
-
Exploration costs and exploration and mining rights
|
|
43,071,310
|
10,693,223
|
Property, plant and equipment
|
|
|
|
- Mine development costs
|
|
77,372,771
|
41,395,030
|
- Other
|
|
879,254
|
1,275,479
|
|
|
|
|
TOTAL NON-CURRENT ASSETS
|
|
121,323,335
|
53,363,732
|
|
|
|
|
Current assets
|
|
|
|
Trade and other receivables
|
|
1,956,427
|
2,174,099
|
Inventories
of mined ore and consumables
|
|
-
|
103,575
|
Cash at bank
|
|
5,171,404
|
13,921,966
|
|
|
|
|
TOTAL CURRENT ASSETS
|
|
7,127,831
|
16,199,640
|
|
|
|
|
TOTAL ASSETS
|
|
128,451,166
|
69,563,372
|
|
|
|
|
|
|
|
|
CAPITAL AND RESERVES
|
|
|
|
Share capital
|
|
1,840,697
|
1,288,558
|
Share premium
|
|
89,407,388
|
64,990,510
|
Share option reserve
|
|
3,151,989
|
1,611,500
|
Merger reserve
|
|
15,107,298
|
2,500,366
|
Accumulated losses
|
|
(5,375,963)
|
(12,845,955)
|
Currency translation reserve
|
|
699,715
|
6,715,029
|
|
|
|
|
Total equity
|
|
104,831,124
|
64,260,008
|
|
|
|
|
NON-Current liabilities
|
|
|
|
Provisions
for other liabilities and charges
|
|
4,102,653
|
1,250,620
|
|
|
|
|
TOTAL NON-CURRENT LIABILITIES
|
|
4,102,653
|
1,250,620
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
Trade and other
payables
|
|
19,517,389
|
4,052,744
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
|
19,517,389
|
4,052,744
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
23,620,042
|
5,303,364
|
|
|
|
|
TOTAL EQUITY AND LIABILITIES
|
|
128,451,166
|
69,563,372
|
|
|
|
|
|
|
|
|
Cluff Gold plc and subsidiary
undertakings
CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
For the year
ended 31 December 2008
|
Share
capital
|
Share
premium
|
Share option
reserve
|
Merger
reserve
|
Currency translation reserve
|
Accumulated
losses
|
Total
equity
|
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
|
|
|
|
|
|
|
|
BALANCE AT 1 JANUARY 2008
|
1,288,558
|
64,990,510
|
1,611,500
|
2,500,366
|
6,715,029
|
(12,845,955)
|
64,260,008
|
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
(945,005)
|
(945,005)
|
Profit
on partial disposal of subsidiaries
|
-
|
-
|
-
|
-
|
-
|
8,414,997
|
8,414,997
|
Exchange translation differences
on consolidation
|
-
|
-
|
-
|
-
|
(6,015,314)
|
-
|
(6,015,314)
|
|
|
|
|
|
|
|
|
Total
recognised income and expenses
|
-
|
-
|
-
|
-
|
(6,015,314)
|
7,469,992
|
1,454,678
|
|
|
|
|
|
|
|
|
Issue
of ordinary share capital
|
552,139
|
26,295,077
|
-
|
12,606,932
|
-
|
-
|
39,454,148
|
Issue costs
|
|
(1,878,199)
|
-
|
-
|
-
|
-
|
(1,878,199)
|
|
|
|
|
|
|
|
|
Share option charge
|
-
|
-
|
1,540,489
|
-
|
-
|
-
|
1,540,489
|
|
|
|
|
|
|
|
|
BALANCE AT 31 DECEMBER 2008
|
1,840,697
|
89,407,388
|
3,151,989
|
15,107,298
|
699,715
|
(5,375,963)
|
104,831,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE AT 1 JANUARY 2007
|
844,104
|
37,282,361
|
1,326,884
|
2,500,366
|
2,568,705
|
(8,064,996)
|
36,457,424
|
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
(4,780,959)
|
(4,780,959)
|
Exchange translation differences
on consolidation
|
-
|
-
|
-
|
-
|
4,146,324
|
-
|
4,146,324
|
|
|
|
|
|
|
|
|
Total
recognised income and expenses
|
-
|
-
|
-
|
-
|
4,146,324
|
(4,780,959)
|
(634,635)
|
|
|
|
|
|
|
|
|
Issue
of ordinary share capital
|
444,454
|
29,735,227
|
-
|
-
|
-
|
-
|
30,179,681
|
Issue costs
|
-
|
(2,027,078)
|
-
|
-
|
-
|
-
|
(2,027,078)
|
Share option charge
|
-
|
-
|
284,616
|
-
|
-
|
-
|
284,616
|
|
|
|
|
|
|
|
|
BALANCE AT 31 DECEMBER 2007
|
1,288,558
|
64,990,510
|
1,611,500
|
2,500,366
|
6,715,029
|
(12,845,955)
|
64,260,008
|
|
|
|
|
|
|
|
|
Cluff Gold plc and subsidiary
undertakings
CONSOLIDATED CASH
FLOW STATEMENT
For the year
ended 31 December 2008
|
2008
|
2007
|
|
US$
|
US$
|
CASH
FLOWS USED IN OPERATING ACTIVITIES
|
|
|
Operating
loss for the period
|
(247,733)
|
(5,629,533)
|
Depreciation
|
79,056
|
58,191
|
(Decrease)/increase
in trade and other payables
|
(39,706)
|
4,354,850
|
Decrease/(increase)
in trade and other receivables
|
217,672
|
(463,524)
|
Increase
in stock and work in progress
|
-
|
(103,575)
|
Share option charge
|
766,494
|
284,616
|
Exploration costs written off
|
781,256
|
-
|
Negative goodwill on acquisition
|
(8,956,273)
|
-
|
Exchange loss
|
718,079
|
-
|
NET
CASH FLOWS USED IN OPERATING ACTIVITIES
|
(6,681,155)
|
(1,498,975)
|
|
|
|
CASH
FLOWS USED IN INVESTING ACTIVITIES
|
|
|
Interest receivable
|
397,409
|
1,499,725
|
Interest payable
|
(73,232)
|
(662)
|
Purchase
of property, plant and equipment
|
(25,703,554)
|
(22,537,283)
|
Purchase of intangible assets
|
(6,658,766)
|
(10,801,495)
|
|
|
|
NET
CASH FLOWS USED IN INVESTING ACTIVITIES
|
(32,038,143)
|
(31,839,715)
|
|
|
|
CASH
FLOWS FROM financing ACTIVITIES
|
|
|
Proceeds
from the issue of share capital
|
26,602,422
|
30,179,681
|
Issue costs paid
|
(1,878,199)
|
(2,027,078)
|
Net proceeds from, loan
|
5,929,042
|
-
|
Amounts
funded on behalf of joint venture party
|
-
|
(1,170,000)
|
|
|
|
NET
CASH FLOWS FROM FINANCING ACTIVITIES
|
30,653,265
|
26,982,603
|
|
|
|
|
|
|
|
|
|
NET
DECREASE IN CASH AND CASH EQUIVALENTS
|
(8,066,033)
|
(6,356,087)
|
Cash
and cash equivalents at start of period
|
13,921,966
|
21,180,012
|
Exchange
losses on cash and cash equivalents
|
(1,440,222)
|
(901,959)
|
|
|
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
4,415,711
|
13,921,966
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENT COMPRISE
|
|
|
Cash at bank
|
3,151,512
|
622,504
|
Short term deposits
|
2,019,892
|
13,299,462
|
|
5,171,404
|
13,921,966
|
Bank overdraft
|
(755,693)
|
-
|
Cash and cash equivalents
|
4,415,711
|
13,921,966
|
|
|
|
The
financial information set out in this preliminary statement does not constitute
the group's statutory financial statements for the year ended 31 December 2008,
but is derived from those financial statements. The financial statements for
2008 have not been delivered to the Registrar of Companies and will be
distributed to shareholders prior to the Company's Annual General Meeting. The
auditors have reported on these financial statements and have issued an
unqualified report which does not contain statements under the UK Companies Act
1985, s237 (2) or (3). An emphasis of matter paragraph is included in their
audit report regarding the carrying value of the Angovia
Gold Mine. The financial statements for 2007 have been delivered to the
Registrar of Companies.
1. Summary
of significant accounting policies
a) Basis
of Preparation
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 in the financial
statements.
The
financial information is presented in US Dollars. The functional currency of
the parent Company is currently Sterling. Operations denominated in other
currencies are included in this financial information in accordance with the
policies set out below. The group has chosen to present its financial
statements in US dollars as it is the currency most relevant to our investors.
b) Nature
of business and going concern
The
Company is a public company incorporated and domiciled in England. The
address of the registered office is 24 Queen Anne's
Gate, London, SW1H 9AA
The
Group is involved in the acquisition, exploration and development and operation
of gold deposits in West Africa.
The
Group has raised equity funds in discrete tranches in order to fund both its
exploration and development activities. The Company raised gross proceeds of
approximately US$25.4 million in March 2008 by way of a placement in order to
fund the completion of construction of the Angovia
and Kalsaka Gold Mines and to fund the requirements
for working capital during the commissioning phase of both operations. Due to
the delay in start up of both mines, the Company arranged a US$10 million
facility with RMB Australia Holdings Limited in September 2008 in order to
ensure adequate working capital cover. At the date of this report, US$6 million
of this facility had been drawn down. In March 2009, the Company raised gross
proceeds of US$11.4 million in order to accelerate definition drilling on the Baomahun Gold Project; to increase the resource at Kalsaka by additional drilling and to upgrade the plant at
the Kalsaka Gold Mine in order to increase
throughput. The cash balance at the end of April stood at US$11.6 million.
As
stated elsewhere in this report, the Kalsaka Gold
Mine is performing to expectations and mining performance at the Angovia Gold Mine has significantly improved since the
beginning of 2009. The gold price remains strong and indications are that this
will continue.
Given
these financial resources, the current and anticipated performance of the
Group's operations and the strong gold price, the Directors consider it
appropriate to prepare these financial statements on the going concern basis.
The use of that basis assumes that the Company meets its commitments as they
fall due.
c) Mining and
development costs
Exploration
costs are capitalised as intangible fixed assets
until a decision is made to proceed to development..
Related costs are then transferred to mining assets. Before reclassification,
exploration costs are assessed for impairment and any impairment
loss is recognised in the income statement.
Subsequent development costs are capitalised under
mining assets, together with any amounts transferred from intangible
exploration assets. During the commissioning of each project, all costs
directly related to that operation are capitalised.
Any revenues generated during this period are treated as
a contribution against those costs and credited against mining and
development costs. At the end of the commissioning phase, when the mine is
capable of substantially operating in the manner intended by management, capitalisation ceases and the mining assets are amortised over the estimated life of the commercial ore
reserves on a unit of production basis..
d) Intangible fixed
assets - deferred exploration and evaluation costs
All
costs incurred prior to obtaining the legal right to undertake exploration and
evaluation activities on a project are written off as incurred.
All
costs associated with mineral exploration and investments are capitalised on a project by project basis, pending
determination of the feasibility of the project. Costs incurred include
appropriate technical and administrative expenses. If an exploration project is
successful, the related costs will be transferred to mining assets and amortised over the estimated life of the commercial ore
reserves on a unit of production basis. Where a project is relinquished,
abandoned, or is considered to be of no further commercial value to the group,
the related costs are written off.
The
recoverability of deferred exploration costs is dependent upon the discovery of
economically recoverable ore reserves, the ability of the group to obtain
necessary financing to complete the development of the ore reserves and future
profitable production or proceeds from the disposal thereof.
2.
|
LOSS PER SHARE
|
2008
|
2007
|
|
The
calculation of the basic and diluted earnings per share is based on the
following data:
|
US$
|
US$
|
|
|
|
|
|
Losses
for the purposes of earnings per share (net loss for the year attributable to
equity holders of the parent)
|
(945,005)
|
(4,780,959)
|
|
|
|
|
|
Number of shares
|
|
|
|
Weighted
average number of ordinary shares for the purposes of earnings per share
|
87,230,853
|
64,037,103
|
|
|
|
|
There
is no difference between the diluted loss per share and the basic loss per
share presented. Due to the loss incurred in the period the effect of the share
options in issue is anti-dilutive.
At
31 December 2008 there were 9,710,100 (31 December 2007: 4,454,793) share
options in issue which would have a potentially dilutive effect on the basic
earnings per share in the future.
3. PROPERTY, PLANT AND EQUIPMENT
|
|
Mining,
development and associated property, plant and equipment cost
US$
|
Motor
vehicles, office equipment, fixtures & computers
US$
|
Total
US$
|
|
COST
|
|
|
|
|
At 1 January 2007
|
10,032,390
|
514,548
|
10,546,938
|
|
Additions
|
21,684,923
|
1,134,425
|
22,819,348
|
|
Transfer from
intangible assets
|
5,870,435
|
-
|
5,870,435
|
|
Exchange difference on retranslation
|
3,807,282
|
149,680
|
3,956,962
|
|
|
|
|
|
|
At 31 December 2007
|
41,395,030
|
1,798,653
|
43,193,683
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2008
|
41,395,030
|
1,798,653
|
43,193,683
|
|
Additions
|
37,743,658
|
509,116
|
38,252,774
|
|
Transfer from
intangible assets
|
446,329
|
-
|
446,329
|
|
Exchange difference on retranslation
|
(2,212,246)
|
(245,286)
|
(2,457,532)
|
|
|
|
|
|
|
At 31 December 2008
|
77,372,771
|
2,062,483
|
79,435,254
|
|
|
|
|
|
|
DEPRECIATION
|
|
|
|
|
At 1 January 2007
|
-
|
164,164
|
164,164
|
|
Charge for the year
|
-
|
340,256
|
340,256
|
|
Exchange difference on retranslation
|
-
|
18,754
|
18,754
|
|
|
|
|
|
|
At 31 December 2007
|
-
|
523,174
|
523,174
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2008
|
-
|
523,174
|
523,174
|
|
Charge for the year
|
-
|
821,892
|
821,892
|
|
Exchange difference on retranslation
|
-
|
(161,837)
|
(161,837)
|
|
|
|
|
|
|
At 31 December 2008
|
-
|
1,183,229
|
1,183,229
|
|
|
|
|
|
|
NET BOOK VALUE
|
|
|
|
|
At 31 December 2008
|
77,372,771
|
879,254
|
78,252,025
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2007
|
41,395,030
|
1,275,479
|
42,670,509
|
|
|
|
|
|
|
|
|
|
|
In
accordance with industry practice all costs and revenues incurred during the
commissioning phase of operations are capitalised.
Carrying
value of the Angovia Gold Mine
Included
within the mine development and associated costs are amounts of US$35.4 million in
respect of the Angovia Gold Mine. Due to the
underperformance of the Angovia Gold Mine in 2008, a
detailed impairment review of the operation was undertaken which considered not
only 2008 performance but also the actions taken by management to rectify the
various operational shortfalls and preparation of an updated detailed economic
model.. This model does not indicate any impairment.
Since the beginning of 2009, a larger mining fleet, deployed to site by the
mining contractor, has led to an increase in equipment availability and hence
an increase in operational performance. The replacement of second hand plant
equipment with newer, better designed plant equipment has increased the plant
capacity and performance. With these actions the mine performance is now moving
towards budget and the Angovia Gold Mine is expected
to exit commissioning by mid year. Because of this an
impairment charge is not considered appropriate at this time. However, should
the increase in performance not continue or should the production of gold not
increase, then this decision will be revisited and an impairment provision may
be required.
|
4. INTANGIBLE ASSETS
|
Exploration
and
Mining
Rights
US$
|
Deferred
exploration and evaluation costs
US$
|
Total
US$
|
|
COST
|
|
|
|
|
At 1 January 2007
|
-
|
5,302,577
|
5,302,577
|
|
Additions
|
-
|
10,801,495
|
10,801,495
|
|
Transfer
to property, plant and equipment
|
-
|
(5,870,435)
|
(5,870,435)
|
|
Exchange difference on retranslation
|
-
|
459,586
|
459,586
|
|
|
|
|
|
|
At 31 December 2007
|
-
|
10,693,223
|
10,693,223
|
|
|
|
|
|
|
At 1 January 2008
|
|
10,693,223
|
10,693,223
|
|
Additions
|
30,222,997
|
7,401,459
|
37,624,456
|
|
Transfer
to property, plant and equipment
|
-
|
(446,329)
|
(446,329)
|
|
Exploration costs written off
|
-
|
(781,256)
|
(781,256)
|
|
Exchange difference on retranslation
|
-
|
(4,018,784)
|
(4,018,784)
|
|
|
|
|
|
|
At 31 December 2008
|
30,222,997
|
12,848,313
|
43,071,310
|
|
|
|
|
|
|
AMORTISATION
|
|
|
|
|
At 1 January 2007
|
-
|
-
|
-
|
|
Charge for the year
|
-
|
-
|
-
|
|
|
|
|
|
|
At 31 December 2007
|
-
|
-
|
-
|
|
|
|
|
|
|
At 1 January 2008
|
-
|
-
|
-
|
|
Charge for the year
|
-
|
-
|
-
|
|
|
|
|
|
|
At 31 December 2008
|
-
|
-
|
-
|
|
|
|
|
|
|
CARRYING AMOUNT
|
|
|
|
|
At 31 December 2008
|
30,222,997
|
12,848,313
|
43,071,310
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2007
|
|
10,693,223
|
10,693,223
|
|
|
|
|
|
Included
within Exploration and Mining rights is an amount of US$21.8 million in
relation to the acquisition of the remaining 40% in Baomahun
Gold Project.. In addition, the Group holds
two mining licences relating to the Kalsaka and Angovia Gold Mines. The value
assigned to these two licences amount to US$6 million
and US$ 2.4 million respectively.
These
amounts are recoverable through the exploitation of the projects.
On
4 August 2008, Cluff Gold plc issued 12,390,909
shares at a price of 52.5p to acquire 100% of Winston Mining Limited, a company
which held the Baomahun exploration licence on behalf of Mr R Winston
in which the Group had already earned 60% interest. Winston Mining Limited had
no further assets or liabilities at the acquisition date.
The
fair value of the remaining 40% interest in the licence,
based on a valuation of the underlying resource, was US$21.8m. When the
acquisition was negotiated the Cluff Gold plc share
price was 88p but by the time all the conditions relating to the sale had been
fulfilled the share price had fallen to 52.5p. This fall in the share price has
reduced the consideration to ?6.5m and a negative
goodwill balance US$ 8.95 million has accordingly been released to the income
statement.
This
company has not traded since the acquisition date and therefore there are no
amounts attributable to this entity in the income statement.
5. Post
balance sheet events
i) In February 2009, the Company
announced that approval had been granted by the Toronto Stock Exchange for the
listing of its entire share capital.
ii) In
March 2009, the Company raised US$11.4 million before expenses by placing
20,285,000 new ordinary shares of 1 pence each
in the Company at a placing price of 40 pence per share. The Shares
were admitted to trade on AIM on 31 March 2009.
ENDS:
|
Cluff Gold
|
|
PRODUCER |
CODE : EWE.BE |
ISIN : GB00B04M1L91 |
|
| |
ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Cluff Gold is a gold producing company based in United kingdom. Cluff Gold holds various exploration projects in Ghana. Its main assets in production are KALSAKA and ANGOVIA (MT YAOURE) in Burkina Faso, its main asset in development is BAOMAHUN in Sierra Leone and its main exploration properties are KARBASSO in Mali and AKROPONG in Ghana. Cluff Gold is listed in Canada, in Germany, in United Kingdom and in United States of America. Its market capitalisation is GBX 11.8 billions as of today (US$ 19.1 billions, € 14.7 billions). Its stock quote reached its highest recent level on May 27, 2011 at GBX 99.75, and its lowest recent point on July 05, 2013 at GBX 10.02. Cluff Gold has 168 047 937 shares outstanding. |
Annual reports of Cluff Gold |
Nominations of Cluff Gold |
Project news of Cluff Gold |
Corporate news of Cluff Gold |
|
|