Interim / Quarterly Report • Sep 1, 2010
Interim / Quarterly Report
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INTERNATIONAL GOLD EXPLORATION IGE AB (PUBL) Org. Reg. No 556227-8043
International Gold Exploration IGE AB ("IGE" or the "Company") announced today results for the second quarter ended June 30, 2009. For the second quarter, IGE reported a net loss of MSEK -32.2 or SEK -0.07 per share, compared to a loss of MSEK -4.7 or SEK -0.01 per share in the second quarter of 2008. At June 30th, 2009 the Group had cash and cash equivalents of MSEK 17,1.
For the period ending June 30, 2009, the Company reported a net result of SEK -37.5 million or SEK -0.08 per share, compared to SEK -26.3 million in the first half of 2008.
The weakening of the US dollar has significantly contributed to the loss of the Group during the second quarter. The weaker dollar raised the amount of intercompany debts. While this does not affect- cash, it nonetheless increased the loss of the Group during the second quarter by MSEK -17.1. In addition, write down of assets due to the closure of operations in Burundi affected the result negatively, by about MSEK -1.
| (TSEK, except per share data) | Q2 2009 | Six months ended June 30, 2009 |
Q2 2008 | Six months ended June 30, 2008 |
Twelve months ended Dec 31, 2008 |
|---|---|---|---|---|---|
| Other revenues | - | - | 16,250 | 16,250 | 49,916 |
| Operating profit | -31,459 | -34,149 | -5,931 | -26,471 | -49,800 |
| Net result | -32,152 | -37,461 | -4,720 | -26,279 | -56,787 |
| Cash at the end of the period | 17,122 | 17,122 | 105,965 | 105,965 | 39,639 |
| Interest bearing loans at the end of the period | 36,155 | 36,155 | - | - | 24,929 |
| Basic result per share | -0.07 | -0.08 | -0.02 | -0.07 | -0.16 |
In the second quarter of 2009, a number of targets were realized. Bulk sampling of diamonds began at the Luxinge project in Angola. Similarly, bulk sampling of gold started at our Kilimapesa joint venture in Kenya, and activity at our Rönnbäcken nickel project centred on completion of the scoping study, a critical phase for the project.
The situation in Angola has been challenging related to on-site management. This prompted a change of leadership in April, with the appointment of Phil Mason as Managing Director in Angola. Due to a temporarily lack of management on location in Angola during Q2, this caused some production delays. The situation is now resolved, and we are wholly focused on finalizing the feasibility study at Luxinge, which will allow us to obtain the mining license, raise diamond recovery and commence sales of diamonds. Around 6,000 carats (cts) of gem quality diamonds have been recovered to-date. These diamonds will be exported to Sodiam in Luanda for valuation, and an application will be submitted to the Minister of Geology and Mines to hold initial sales, before the mining license is received. The objective is to obtain the mining license for Luxinge in the fourth quarter of 2009. Phil Mason will also be submitting work programs to Endiama for our three other licenses covering Cariango, Lacage, and Luanguinga, in order to proceed with the next steps of exploration for kimberlites.
After experiencing a serious fall in prices, the market for rough diamonds is now improving, particularly for higher gem qualities. The effect of the delay in our diamond recovery has been mitigated by the improvement and stabilisation of the diamond market during recent months.
Regarding the Kenyan operations, IGE has agreed to sell its 50% interest in the Kilimapesa Gold project to its South African partner Goldplat PLC. We are awaiting final approval from the Ministry of Geology and Mines, in order to finalise the sales agreement. The exploration activities amongst our remaining Kenyan licences have been significantly reduced, during the period, as IGE has decreased investments until finances allow a resumption in activities . Small-scale exploration for gold continues to be carried out by company personnel, primarily within the Lolgorien and Akala licenses. Potential partnerships and collaborations related to our Kenyan licenses are currently under evaluation.
Work towards the completion of the scoping study of The Rönnbäcken nickel project in northern Sweden, has progressed according to plan during the second quarter. The final results will be available to IGE by the beginning of the fourth quarter of 2009. Our continued strategy concerning Rönnbäcken will be decided following review of the finalized scoping study. The latter will be essential for any planned partnerships on the Rönnbäcken project.
The results for the second quarter of 2009 demonstrate the flexibility offered by IGE's business model, as we have quickly adapted to the current economic situation by reducing the supply of capital for exploration investment. Our main objectives going forwards are to begin full-scale diamond production in Luxinge and to initiate exploration programs at our three other kimberlite concessions, and to complete the scoping study for the Rönnbäcken nickel project. "I am convinced that the market for commodities and capital will continue to improve during the autumn. Under such an environment, and given the current valuation of the Company, IGE will prove to be a promising investment going forward, building value for its shareholders" says Tomas Fellbom, CEO of IGE.
• IGE Nordic reported a significant increase of the mineral resource in the Rönnbäcken nickel project resource. IGE Nordic AB ("IGE Nordic"), a subsidiary of IGE announced an independent NI 43-101 compliant mineral resource estimate for the Rönnbäcken nickel project, northern Sweden, prepared by Scott Wilson Roscoe Postle Associates Inc. Canada. For the Vinberget deposit, an indicated resource is estimated to be 54.9 million tonnes with an average total nickel content of 0.187%, of which 0.137% is nickel in sulphide (Ni-AC) based on an open pit strip ratio of 0.46:1 and a nickel price of US\$7.50/lb. For the Rönnbäcksnäset deposit, located five kilometres northwest of Vinberget, an inferred resource is estimated to be 192.9 million tonnes with an average total nickel content of 0.178%, of which 0.107% is nickel in sulphide (Ni-AC) based on an open pit strip ratio of 0.80:1 and a nickel price of US\$7.50/lb. The estimated total contained nickel for Vinberget is 102 thousand tonnes, including 75 thousand tonnes in sulphides, and for Rönnbäcksnäset 343 thousand tonnes, including 206 thousand tonnes in sulphides.
• IGE Nordic agreed to sell its interest in the Gladhammar gold project to Wiking Mineral AB ("Wiking Mineral") for 2 million SEK. The Gladhammar project was a 50/50 joint venture between IGE Nordic and Wiking Mineral.
• IGE agreed to sell its 50% interest in the Kilimapesa gold project to its joint venture partner. Through its wholly owned subsidiary Gold Mineral Resources Limited, IGE signed a Heads of Agreement with Goldplat PLC, to sell IGE's 50% interest in Kilimapesa Gold (Pty) Limited ("Kilimapesa"). Goldplat PLC has agreed to pay US\$ 2.7 million for the acquisition. The parties have agreed to draft and conclude the Sale Agreement as soon as practicable.
• Two new directors of the board were proposed by major shareholders in IGE. After the chairman of the board, Carl Ameln, resigned from the board of directors of IGE, the board of directors consisted of the members Ole Fredriksen, Lars Olof Nilsson and Timothy George and the deputy member Tony Saetre. John Afseth and Magne Aaby were proposed as directors at the extra general meeting of shareholders, on 22nd of July 2009. John Afseth were elected chairman of the Board.
IGE's Luxinge project currently holds a diamond exploration licence. In order for this to become a full commercial mining license, a prefeasibility study has to be concluded. As soon as the project has proven to be economically viable, the licence will be converted. During the second quarter of 2009, IGE has mainly focused on advancing work related to the feasibility study.
Before the licence is converted into a commercial mining licence, the potential sale of the first parcel of Luxinge diamonds has to be negotiated and approved by the Ministry of Geology and Mines. A program of diamond sales, during the exploration phase, is likely to be granted. It is important for IGE to obtain the mining licence as quickly as possible in order to establish a steady revenue stream from the Luxinge project. This will greatly contribute to the financing of the Group's operations.
Work on the prefeasibility study has commenced with trial mining implemented in the early part of the second quarter. Trial mining was initiated in order to ensure that the grades and quality of the diamonds is sustainable. It also gave indications on shortcomings related to the engineering, the process plant and personnel, which is very important for the management of the project going forward. The prefeasibility study is projected to be finalized and submitted during the beginning of the fourth quarter 2009.
At certain periods during the second quarter, operations had to be placed on hold due to bureaucratic issues concerning the entrance of management into Angola. The subsequent lack of management on the project site resulted in temporary disturbances in production. The arrival of a new geologist on site, has enabled IGE to add value to grade control and reporting. With management issues now solved, new controls and processes are being implemented accordingly.
Results from the trial mining have so far been encouraging. The project produced in excess of a 1,000 carats per week, during periods with no disturbances. By the end of the second quarter, the amount of diamonds recovered weighed about 5,800 cts. The areas within the licence area that are projected to be of more interest have so far shown good grades of above 0.33 carat/ m³, with an average stone size of 0.16 carat/stone. The largest diamond found, to-date, weighed 6.71 ct. During the trial mining period, the project managed to mine over 400 cts per day.
Prior to IGE's sale of its first diamond parcel, the diamonds will be sent for valuation by the state and by independent valuators.
Short term objectives for the work of the Luxinge project:
Two of the other three diamond licences of IGE are on standby due to concerns regarding land mines. IGE considers the licences to be highly interesting in terms of kimberlite exploration, and the Company will continue its activities as soon as possible. IGE is planning to continue exploration on the Cariango, Luanguinga and Lacage properties in order to secure the maintenance of the licences, and to effectively create value. Work programs will be presented to Endiama.
With the alluvial production of the Luxinge project in Lunda Norte and the three interesting diamond licenses in its portfolio, IGE is well positioned within the diamond sector of Angola, when market conditions start to improve.
IGE's operations in Kenya currently consist of exploration for gold within the four 100% held licences in the western part of Kenya, along with small-scale gold production at its 50% owned joint venture Kilimpesa Gold.
IGE's exploration activities in Kenya were maintained during the second quarter of 2009. Results were received from the 2,500 m drilling program on the East Lolgorien block, completed during the first quarter. They confirmed the presence of high-tonnage low-grade gold mineralization in the Lolgorien area, and in this case, its association with disseminated sulphides in a shale unit. However, the grade of the mineralization is irregular and low (mainly 2 g/t), and therefore did not warrant further work on this particular target. In May, 1,360 m were drilled by reverse circulation on the Masarura target, and trenching operations were carried out on several targets in the Akala area (all on Special License 91). Samples have been sent for assay at ALS Chemex laboratories in Mwanza, Tanzania.
Trenching operations are currently on-going on the Atieli target, where low-grade and potentially high-tonnage gold mineralization has been noted. IGE is preparing to start diamond drilling on the targets of the Akala area, as soon as the trenching results are available.
Production continued, during the period, at IGE's 50%-owned Kilimapesa gold project in Lolgorien. The first consignment of concentrates and loaded carbons, containing about 86.5 ounces of gold, was sent to Rand Refineries in South Africa in May. In June 2009, IGE and Goldplat Plc entered into an agreement towards the sale of IGE's share in Kilimapesa Gold (Pty) Ltd for 2.7 M USD.
As IGE has much local competence and broad experience operating within the Lake Victoria region, the company is currently doing a major strategic review of possible opportunities for short-term gold mine development in the East Africa region around Lake Victoria. Strong focus lies on Tanzania where such opportunities are more likely to be identified. As the recent years have created much turbulence within the mining industry and the financial markets, IGE considers these gold prospects worth evaluating.
In Burundi, IGE maintained the closure of its operations. As at June 30th, no staff remained on IGE Burundi's payroll. The existing licenses were returned to the Government. Cost of closure for Burundi operations amounts to about MSEK 6.5 (write downs of assets and costs related to the dismissal of staff).
IGE Nordic's activities during the second quarter have centred on the completion of a Preliminary Assessment or scoping study of its 100% owned Rönnbäcken nickel project. The study is being prepared by the independent mining consultant Scott Wilson Roscoe Postle Associates Inc. ("Scott Wilson RPA"), Canada, and will be concluded during the fourth quarter of 2009.
In June, IGE Nordic commenced a summer field program of geological mapping and surveying to identify new drill targets, and to augment knowledge about the mineralogy and petrology of the areas around the Vinberget and Rönnbäcksnäset deposits. This work is being carried out in preparation for the next phase of drilling.
IGE Nordic sold its interest in the Gladhammar project outside Västervik to Wiking Mineral AB for MSEK 2. A joint venture between IGE Nordic and Wiking Mineral, the Gladhammar project was considered a non-core asset.
IGE Nordic has enlisted the services of Torsten Lundstrom to undertake an evaluation of power costs and the use of a hydropower dam for tailings disposal. Lundstrom was the former President and CEO of the Skelleftea Kraft AB power company.
At the Solvik gold-copper project, (IGE Nordic 50%, Archelon Mineral AB 50%), samples of soil were taken to delineate the gold anomaly, while samples of bedrock were taken to assay for gold in the quartz vein system found in outcrops. These samples have been sent for laboratory analysis and the results would be expected in the beginning of the 4th quarter.
The Norrsken Energy Joint Venture (IGE Nordic 49%, Energy Ventures Limited 51%) has been evaluating projects in Sweden in order to secure more advanced uranium resources.
The Administration of International Gold Exploration IGE AB (publ) hereby submit the interim report for the period January 1st to June 30th 2009.
This Report covers the period of January 1st to June 30th 2009, with comparison figures from the corresponding period of the previous year and the most recent annual report.
The Company's activities consist of exploration for mineral deposits and mining. The Company operates in Scandinavia and Africa.
Net investments during the period amount to MSEK 22.4 (43.5). The investments during the period mainly refer to the operations in the Luxinge diamond project and expenditures related to the advancement of the Rönnbäcken nickel project towards the completion of the scoping study.
Cash flow during the period was MSEK -22.4 (-21.7). The negative cash flow during the period is mainly related the development of the Luxinge diamond project and additional work related to the scoping study of the Rönnbäcken nickel project.
Cash and cash equivalents at period end amounted to MSEK 17.1 (106.0). Shareholders Equity amounted to MSEK 238.8 (278.6) at the reporting date, which results in an equity ratio of 81.2 percent (97.2).
The long-term liabilities of the Group are related to a loan given by Svenska Handelsbanken AB for the purchase of equipment from Volvo, amounting to about MSEK 17.3. The loan granted by Svenska Handelsbanken AB is guaranteed by the Swedish Credit Exports Guarantee Board (EKN) and has a duration of 3 years. The loan was raised in June 2008.
The short-term liabilities refer to a bridge loan, raised in May 2009, for further funding of the operations within the Group. The bridge loan was provided by a restricted number of creditors in Sweden.
The Parent Company revenue during the interim period amounted to MSEK 0 (0). Result before tax amounted to MSEK -18.4 (-9.0). Cash and cash equivalents amounted to MSEK 12.8 (31.7) at the end of the reporting period. Investments during the reporting period amounted to MSEK -8.4 (3.4). The negative amount of investments are explained by write downs of assets referable to the operations in Burundi combined with a change of accounting principles related to Kilimapesa Gold (see note 1).
Pledged assets are MSEK 0.2 (0.1) and contingent liabilities are MSEK 0 (0).
The IGE share was delisted from the Swedish stock exchange list "NGM-equity" during the reporting period. The delisting was based on the fact that the trading activity of the IGE share on NGM Equity was considered too small. Furthermore, for a Company with limited administrative resources, listing on two authorized stock exchanges was becoming onerous, with the result that the Board of IGE decided to delist the share.
The listing of the IGE share on the Oslo Stock Exchange (OB Match) will remain as before. The ticker symbol of the share is IGE.
Q3 and 9 months interim report 2009: 26 November 2009 Q4 and Year End report 2009: 25 February 2010
This Interim report has not been subject to special examination by the Company's auditors.
Stockholm August 27th, 2009
Tomas Fellbom Chief Executive Officer International Gold Exploration IGE AB (publ)
| (TSEK) | Note | Q2 2009 | Q2 2008 | Jan-June 2009 | Jan-June 2008 | 2008 |
|---|---|---|---|---|---|---|
| Other revenues | 4 | - | 16,250 | - | 16,250 | 49,916 |
| Change in stock | - | -1 | - | - | - | |
| Other external expenses | 5 | -23,721 | -7,718 | -15,344 | -21,523 | -31,883 |
| Personnel expenses | -5,728 | -7,672 | -12,470 | -14,317 | -28,225 | |
| Other operating expenses | 6 | -1,074 | -3,854 | -1,074 | -3,854 | - |
| Depreciations and write downs | -936 | -2,936 | -5,261 | -3,027 | -39,608 | |
| Operating result | -31,459 | -5,931 | -34,149 | -26,471 | -49,800 | |
| Financial revenue | 7 | 1,239 | 3,400 | 2,415 | 6,170 | 8,249 |
| Financial expenses | 7 | -1,089 | -2,189 | -3,994 | -5,978 | -15,236 |
| Total financial items | 150 | 1,211 | -1,579 | 192 | -6,987 | |
| Result before tax | -31,309 | -4,720 | -35,728 | -26,279 | -56,787 | |
| Result from assets held for sale | 10 | -843 | - | -1,733 | - | - |
| Income tax | 0 | 0 | 0 | 0 | 0 | |
| Result for the period | -32,152 | -4,720 | -37,461 | -26,279 | -56,787 | |
| Result for the period attributable to: | ||||||
| Equity holders of the Parent | ||||||
| Company | -32,152 | -5,938 | -37,461 | -26,408 | -46,351 | |
| Minority interest | - | 1,218 | - | 129 | -10,436 | |
| Result for the period | -32,152 | -4,720 | -37,461 | -26,279 | -56,787 | |
| Earnings per share before dilution | -0.07 | -0.01 | -0.08 | -0.07 | -0.16 | |
| Earnings per share after dilution | -0.07 | -0.01 | -0.08 | -0.07 | -0.16 |
| TSEK | Q2 2009 | Q2 2008 | Jan-June 2009 | Jan-June 2008 | 2008 |
|---|---|---|---|---|---|
| Net result for the period | -32,152 | -4,720 | -37,461 | -26,279 | -56,787 |
| Exchange differences during the period | 4,419 | -600 | 1,691 | 1,802 | -8,502 |
| Total comprehensive income | -27,733 | -5,320 | -35,770 | -24,477 | -65,289 |
| Total comprehensive income attributable to: | |||||
| Equity holders of the Parent Company | -27,733 | -5,320 | -35,770 | -24,477 | -65,289 |
Earnings per share are attributable to shareholders of the Parent Company.
| (TSEK) | Note | 30/06/2009 | 30/06/2008 | 2008 |
|---|---|---|---|---|
| ASSETS | ||||
| Tangible fixed assets | ||||
| Mineral interests | 135,234 | 81,100 | 112,938 | |
| Plant and machinery | 51,266 | 23,530 | 52,933 | |
| Long-term financial assets | ||||
| Shares in associated companies | 8 | 25,425 | 26,581 | 25,731 |
| Receivables on associated companies | - | 1,428 | 3,090 | |
| Long-term receivables | 43,595 | 33,662 | 43,695 | |
| Total fixed assets | 255,520 | 166,301 | 238,387 | |
| Current Assets | ||||
| Inventory | - | - | - | |
| Account receivables | - | 602 | 196 | |
| Other receivables | 7,216 | 3,482 | 4,965 | |
| Prepaid expenses and accrued income | 3,682 | 4,831 | 4,374 | |
| Short term investments | 9 | - | 5,353 | - |
| Cash and cash equivalents | 17,122 | 105,965 | 39,639 | |
| Total current assets | 28,020 | 120,233 | 49,174 | |
| Assets held for sale | 10 | 10,676 | - | - |
| TOTAL ASSETS | 294,216 | 286,534 | 287,561 | |
| EQUITY | 11,12,13 | |||
| Equity attributable to equity holders of the parent company | ||||
| Share capital | 23,974 | 18,750 | 19,600 | |
| Unincorporated share capital | - | - | 1,308 | |
| Other capital-contribution | 376,104 | 324,182 | 348 277 | |
| Reserves | -4,263 | 4,351 | -5,954 | |
| Retained earnings and profit for the period | -156,968 238,847 |
-102,091 245,192 |
-119,507 243,724 |
|
| Minority interest | - | 33,361 | - | |
| Total equity | 238,847 | 278,553 | 243,724 | |
| Long term liabilities | ||||
| Convertible loan | 12 | - | - | 5,500 |
| Interest bearing long term liabilities | 14 | 16,155 | - | 19,429 |
| Other long term liabilities | 316 | - | - | |
| Total long term liabilities | 16,471 | 0 | 24,929 | |
| Current liabilities | ||||
| Interest bearing short term liabilities | 15 | 20,000 | - | - |
| Account payables | 2,786 | 3,458 | 10,391 | |
| Other liabilities | 3,648 | 372 | 1,372 | |
| Accrued expenses and prepaid income | 4,456 | 4,151 | 7,145 | |
| Total current liabilities | 30,890 | 7,981 | 18,908 | |
| Liabilities referable to assets held for sale | 10 | 8,008 | - | - |
| TOTAL EQUITY AND LIABILITIES | 294,216 | 286,534 | 287,561 | |
| PLEDGED ASSETS | 199 | 197 | 5,697 |
| (TSEK) | Equity related to the shareholders of the parent company | ||||||
|---|---|---|---|---|---|---|---|
| 2008 | Share capital |
Other capital contribution |
Exchange differences |
Retained earnings and profit for the year |
Total | Minority interest |
Total Equity |
| Balance at 1 January 2008 | 17,050 | 268,102 | 2,548 | -75,685 | 212,015 | 32,884 | 244,899 |
| Disposal of subsidiary to minority interest company Exchange differences |
1,803 | 1,803 | 350 | 350 1,803 |
|||
| Total income and expenses recognised directly in equity | 1,803 | 1,803 | 1,803 | ||||
| Net result for the period | -26,407 | -26,407 | 129 | -26,278 | |||
| Total income and expenses for the period | 1,803 | -26,407 | -24,604 | 129 | -24,475 | ||
| Transactions with shareholders: | |||||||
| New share issue | 1,700 | 56,080 | 57,780 | 57,780 | |||
| Closing balance at 30 June 2008 | 18,750 | 324,182 | 4,351 | -102,091 245,192 | 33,363 | 278,553 | |
| Disposal of subsidiary to minority interest company | |||||||
| Exchange differences | -10,305 | -10,305 | -10,305 | ||||
| Acquisition of minority interest | 2,529 | 2,529 | -22,796 | -20,267 | |||
| Issued call options | 390 | 390 | 390 | ||||
| Total income and expenses recognised directly in equity | -7,386 | -22,796 | -30,182 | ||||
| Net result April to December Total income and expenses for the period July to |
-19,945 | -19,945 | -10,565 | -30,510 | |||
| December 2008 | -17,416 | -34,717 | -34,717 | ||||
| Transactions with shareholders: | |||||||
| New share issue | 850 | 6,360 | 7,210 | 7,210 | |||
| Non registered share capital | 1,308 | 17,345 | 18,653 | 18,653 | |||
| Closing balance at 31 December 2008 | 20,908 | 348,277 | -5,954 | -119,507 | 243,724 | 0 | 243,724 |
| Balance at 1 January 2009 | 20,908 | 348,277 | -119,507 | 243,724 | 243,724 | ||
| Exchange differences | 1,691 | 1,692 | 1,692 | ||||
| Issued call options | 120 | 120 | 120 | ||||
| Total income and expenses recognised directly in equity | 120 | 1,691 | 1,812 | 1,812 | |||
| Net result for the period | -37,461 | -37,461 | -37,461 | ||||
| Total income and expenses for the period | 120 | 1,691 | -37,461 | -35,650 | -35,650 | ||
| Transactions with shareholders: | |||||||
| New share issue | 3,066 | 27,707 | 30,773 | 30,773 | |||
| Closing balance at 30 June 2009 | 23,974 | 376,104 | -4,263 | -156,968 238,847 | 0 | 238,847 |
* The Parent company has not participated in the share issue
Total number of shares amounts to 479 473 828 as per 2009-06-30.
| (TSEK) | Jan-June 2009 | Jan-June 2008 | 2008 |
|---|---|---|---|
| Cash flow from operations |
|||
| Result after financial items | -37,461 | -26,279 | -56,787 |
| Adjustments for items not included in cash flow* | 6,304 | -6,831 | -15,928 |
| Income tax paid | - | - | - |
| Total cash flow from operations before change |
|||
| in working capital | -31,157 | -33,110 | -72,715 |
| Change in working capital | |||
| Increase/decrease in inventories | -1,346 | 15 | 16 |
| Increase/decrease receivables | 1,384 | -192 | -4,874 |
| Increase/decrease in liabilities | -4,059 | -3,711 | -363 |
| Total cash flow from operations |
-35,177 | -36,998 | -77,936 |
| Cash flow used for investments | |||
| Cash holdings in acquired associated company | 798 | - | -1,617 |
| Acquisition of intangible assets | -31,390 | -13,405 | -46,842 |
| Sale of intangible assets | 2,000 | - | - |
| Acquisition of tangible assets | -139 | -18,849 | -40,902 |
| Acquisition of shares in associated companies | - | - | -2,575 |
| Acquisition of financial assets | |||
| Sale of financial assets | - | -10,211 | -10,812 |
| - | - | 6,078 | |
| Total cash flow used for investments | -28,730 | -42,465 | -96,670 |
| Financial activities | |||
| New share issue | 25,120 | 57,781 | 65,380 |
| Raised credits | 20,000 | - | 20,800 |
| Amortization of debt | -3,640 | - | - |
| Total cash flow from financial activities |
41,480 | 57,781 | 65,380 |
| Change in cash and bank | -22,427 | -21,682 | -88,426 |
| Cash and bank at 1 January | 39,639 | 127,827 | 127,827 |
| Currency exchange difference | -91 | -180 | 238 |
| Cash and bank at the end of reporting period | 17,122 | 105,965 | 39,639 |
| *Adjustments for items not included in cash flow | |||
| Depreciations and write downs on intangible assets | 4,886 | 2,265 | 37,583 |
| Depreciations and write downs of tangible assets | 376 | 761 | 2,024 |
| Exchange gain | -545 | -5 | -29,732 |
| Revaluation of short term bonds | - | 250 | - |
| Revaluation of shares in Minmet Plc | - | 2,880 | - |
| Capital gain | 1,080 | -215 | 299 |
| Change of interest receivable | -58 | -393 | 5,010 |
| Profit from sale of intangible fixed asset | - | -16,228 | -16,228 |
| Other operating expenses | - | 3,854 | - |
| Change in value of shares in associated companies | 322 | - | - |
| Change of equity due to issue in kind | 243 | - | -14,884 |
| Total | 6,304 | -6,831 | -15,928 |
| (TSEK) | Note | Q2 2009 | Q2 2008 | Jan-June 2009 | Jan-June 2008 | 2008 |
|---|---|---|---|---|---|---|
| Revenue | 4 | - | - | - | - | - |
| Other external expenses | -3,215 | -2,927 | -6,686 | -4,228 | -9,137 | |
| Personnel expenses | -2,318 | -2,023 | -3,943 | -3,868 | -7,517 | |
| Depreciations | -26 | -33 | -57 | -64 | -131 | |
| Operating result | -5,559 | -4,983 | -10,686 | -8,160 | -16,785 | |
| Financial revenue | 7 | 1,228 | 2,010 | 1,362 | 2,485 | 2,849 |
| Financial expenses | 7 | -633 | -1,529 | -9,059 | -3,277 -12,907 | |
| Total financial items | 595 | 481 | -7,697 | -792 | -10,058 | |
| Result before tax | -4,964 | -4,502 | -18,383 | -8,952 | -26,843 | |
| Income tax | 0 | 0 | 0 | 0 | 0 | |
| Result for the period | -4,964 | -4,502 | -18,383 | -8,952 | -26,843 |
| (TSEK) | Note | 30/06/2009 | 30/06/2008 | 2008 |
|---|---|---|---|---|
| ASSETS | ||||
| Tangible fixed assets | ||||
| Plant and machinery | 178 | 303 | 236 | |
| Long-term financial assets | ||||
| Shares in subsidiaries | 85,419 | 70,204 | 90,474 | |
| Receivables related to subsidiaries | 230,427 | 130,512 | 190,234 | |
| Shares in associated companies | 8 | - | - | - |
| Receivables on associated companies |
- | 3,806 | 5,447 | |
| Total fixed assets | 316,024 | 204,825 | 286,391 | |
| Current Assets | ||||
| Account receivables | - | 25 | - | |
| Other receivables | 1,127 | 689 | 781 | |
| Prepaid expenses and accrued income | 409 | 811 | 314 | |
| Short term investments | 9 | - | 5,354 | - |
| Cash and cash equivalents | 12,818 | 31,723 | 5,227 | |
| Total current assets | 14,354 | 38,602 | 6,322 | |
| TOTAL ASSETS | 330,378 | 243,427 | 292,713 | |
| SHAREHOLDERS EQUITY | 11,12,13 | |||
| Restricted equity | ||||
| Share capital | 23,974 | 18,750 | 19,600 | |
| Non registered share capital | - | - | 1,308 | |
| Statutory reserve | 111,345 | 111,345 | 111,345 | |
| Total restricted equity | 135,319 | 130,095 | 132,253 | |
| Non restricted equity | ||||
| Share premium reserve | 240,688 | 153,441 | 212,891 | |
| Retained earnings and profit for the period | -113,930 | -42,301 | -95,547 | |
| Total non restricted equity | 126,758 | 111,140 | 117,344 | |
| Total shareholders equity | 262,077 | 241,235 | 249,597 | |
| Long term liabilities | ||||
| Convertible loan | 12 | - | - | 5,500 |
| Interest bearing long term liabilities | 14 | 16,155 | - | 19,429 |
| Other long term liabilities | 27,452 | - | 10,000 | |
| Total long term liabilities | 43,607 | 0 | 34,929 | |
| Current liabilities | ||||
| Interest bearing short term liabilities | 15 | 20,000 | - | - |
| Account payables | 2,178 | 403 | 4,749 | |
| Other liabilities | 102 | 90 | 95 | |
| Accrued expenses and prepaid income | 2,414 | 1,699 | 3,343 | |
| Total current liabilities | 24,694 | 2,192 | 8,187 | |
| TOTAL SHAREHOLDERS EQUITY AND LIABILITIES | 330,378 | 243,427 | 292,713 | |
| (TSEK) | Restricted Equity | Non restricted Equity | ||||
|---|---|---|---|---|---|---|
| 2008 | Share capital | Statutory reserve |
Share premium reserves |
Retained earnings and result for the year |
Total Equity |
|
| Balance as at 1 January 2008 | 17,050 | 111,345 | 132,716 | -68,704 | 192,407 | |
| Result for the period | -8,952 | -8,952 | ||||
| Total income and expenses for the period | - | -8,952 | -8,952 | |||
| New share issue | 1,700 | 56,078 | ||||
| Closing balance at June 30 2008 | 18,750 | 111,345 | 188,794 | -77,656 | 241,235 | |
| Payment of call options | 390 | 390 | ||||
| Total income and expenses for July to December | 390 | -17,891 | -17,501 | |||
| New share issue | 850 | 6,362 | 7,212 | |||
| Non registered share capital | 1,308 | 17,345 | 18,653 | |||
| Closing balance at 31 Dec 2008 | 20,908 | 111,345 | 212,891 | -95,547 | 249,597 | |
| 2009 | ||||||
| Balance as at 1 January 2009 | 20,908 | 111,345 | 212,891 | -95,547 | 249,597 | |
| Payment of call options | 120 | 120 | ||||
| Result for the year | -18,383 | -18,383 | ||||
| Total income and expenses for the period | 120 | -18,383 | -18,263 | |||
| New share issue | 3,066 | 27,677 | 30,743 | |||
| Closing balance at June 30 2009 | 23,974 | 111,345 | 240,688 | -113,930 | 262,077 |
The following currency rates have been used when performing the interim report.
| 2009-06-30 | Closing day rate |
Average rate (period) |
|---|---|---|
| 1 NOK in SEK | 1,20 | 1,22 |
| 1 KES in SEK | 0,10 | 0,11 |
| 1 USD in SEK | 7,75 | 8,16 |
| 1 Euro in SEK | 10,91 | 10,87 |
| 1 BIF in SEK | 0,0065 | 0,0068 |
| 2008-06-30 | ||
| 1 NOK in SEK | 1,18 | 1,18 |
| 1 KES in SEK | 0,10 | 0,10 |
| 1 USD in SEK | 5,98 | 6,14 |
| 1 Euro in SEK | 9,44 | 9,38 |
| 1 BIF in SEK | 0,0051 | 0,0054 |
| 2008-12-31 | ||
| 1 NOK in SEK | 1,10 | 1,17 |
| 1 KES in SEK | 0,11 | 0,10 |
| 1 USD in SEK | 7,77 | 6,59 |
| 1 Euro in SEK | 10,99 | 9,63 |
| 1 BIF in SEK | 0,0065 | 0,0057 |
| 30/06/2009 | 30/06/2008 | 2008 | 2007 | 2006 | ||
|---|---|---|---|---|---|---|
| Number of outstanding shares at beginning of reporting period | Number | 418,161,828 | 341,000,000 | 341,000,000 | 341,000,000 | 311,000,000 |
| New share issue | Number | 50,000,000 | 34,000,000 | 77,161,828 | - | 30,000,000 |
| Number of outstanding shares at the end of reporting period | Number | 479,473,828 | 375,000,000 | 418,161,828 | 341,000,000 | 341,000,000 |
| Average number of shares | Number | 442,157,828 | 354,978,000 | 364,988,889 | 341,000,000 | 313,000,000 |
| Operating result | TSEK | -34,149 | -26,471 | -49,800 | -66,023 | -29,393 |
| Result after tax | TSEK | -37,461 | -26,279 | -56,787 | -62,529 | -36,404 |
| Operating result per share | SEK | -0.077 | -0.075 | -0.136 | -0.194 | -0.094 |
| Result after financial items per share | SEK | -0.085 | -0.074 | -0.156 | -0.181 | -0.116 |
| Result per share after tax | SEK | -0.085 | -0.074 | -0.156 | -0.181 | -0.116 |
| Shareholders equity per share before dilution | SEK | 0.498 | 0.785 | 0.668 | 0.718 | 0.64 |
| Dividend | TSEK | - | - | - | - | - |
| Price per share at the end of reporting period | SEK | 0.61 | 1.44 | 0.65 | 2.34 | 5.05 |
In calculating income and cash flow per share the average number of shares has been used, whereas in calculating shareholders' equity the number of outstanding shares has been used.
IGE possesses none of its own shares at the end of the reporting period.
Further information regarding key ratio definitions can be obtained from the annual report for the financial year 2008.
This interim report has been performed according to Annual Accounts Act and IAS 34 Interim Reporting. The interim report has also been performed in accordance with the rules in the Swedish Financial Accounting Standard RFR2. During 2009, the same accounting principles have been applied in this report as in the annual report prepared for the financial year 2008 with the following exceptions (see below) referred to new or revised standards, interpretations and changes adopted by the European Union (EU) which shall apply from 1 January, 2009. Only the new or revised standards which have had an impact on the Group are described below. The Interim report does not contain all the information and disclosures available in the annual report and the interim report should be read together with the annual report for 2008.
The interim report has been prepared in accordance with prevailing IFRS/IAS standards applied by the EU Commission at 1 January 2005. Further description of accounting principles and how the transition to IFRS has affected the Group accounting can be found in the latest annual report of the Group (2008).
The accounting principle refereble to the Group's joint venture company Kilimapesa Gold Ltd has been changed during the reporting period. The accountings of Kilimapesa Gold are now split into half, 50% of the company's incomes statement and balance sheet is now consolidated in the IGE Group's accountings. Historically IGE Group has reported it as an associated company which implied that only the Group's part of the Kilimapesa result has been included in the accountings of the IGE Group. As a result of the change, the balance sheet items of IGE Group have been affected according to below table:
| Mineral interests | 4,209 |
|---|---|
| Plant and machinery | 2,760 |
| Current assets | 1,120 |
| Cash and cash equivalents | 799 |
| Other long term liabilities | 7,242 |
| Other liabilities | 1,646 |
The Group has from first of January, 2009 implemented IFRS 8 Operating Segments, which replace IAS 14 Segment reporting. The new standard require that a company provide extended financial and describing disclosures about its reportable operating segments and that segment information is presented from managements perspective, which means that the information is presented in the way it is used within the internal reporting. Reportable segments are lines of businesses or aggregated lines of businesses which fulfil certain specific criteria's. The starting point for identification of reportable segments is the internal reporting as it is reported and is followed up by the Chief Operating Decision Maker (CODM). The Group has identified Group Management as CODM. The Group has identified three reportable segments according to IFRS 8 which are Gold, Diamonds, Nickel and Other.
The implementation of this standard has not had any effect on the Groups total financial position compared to the figures presented in the annual report for 2008. The information about the Groups reportable operating segments is shown in Note "Segment reporting" and comparative figures for prior periods have been adjusted.
The revised standard divide changes in shareholders equity based on transactions with shareholders and other changes. The statement of changes in shareholders equity will only include information regarding shareholder transactions. In addition to this the standard introduce the concept "Group statement of comprehensive income" which show all items referred to revenue and expenses which earlier have been shown in "Group statement of changes in shareholders equity in summary", either in an individual statement or in two coherent statements. The Group has chosen to present the statement of comprehensive income in two statements, "Income statement – Group" and "Statement of comprehensive income summary".
The operations of IGE involve certain significant risks, including but not limited to credit risk, foreign exchange risk, and political risk. For a complete discussion of the aforementioned risks, refer to the Company's 2008 annual report, available on the IGE website, www.ige.se.
| Assets held for sale |
||||||
|---|---|---|---|---|---|---|
| (TSEK) | (Kilimapesa) | Gold | Diamonds | Nickel | Other | Total |
| Other revenues | - | - | - | - | - | 0 |
| Depreciation of concessions | - | - | - | -4,886 | - | -4,886 |
| Depreciation according to plan | - | -147 | - | -171 | -57 | -375 |
| Operating result | -1,348 | -2,181 | -7,528 | -10,628 | -13,812 | -35,497 |
| Result before tax | -1,733 | -2,294 | -9,549 | -9,809 | -14,076 | -37,461 |
| Fixed assets | 8,051 | 6,085 | 168,757 | 72,449 | 178 255,520 | |
| Current assets | 2,760 | 4,562 | 5,180 | 2,663 | 15,480 | 30,645 |
| Long term liabilities | - | 316 | 16,155 | - | - | 16,471 |
| Short term liabilities | 6,741 | 581 | 3,823 | 1,791 | 17,954 | 30,890 |
| Investments (gross amounts) | 8,051 | -5,457 | 18,889 | 912 | - | 22,395 |
| Jan-June 2008 | |
|---|---|
| --------------- | -- |
| Assets held for sale |
||||||
|---|---|---|---|---|---|---|
| (TSEK) | (Kilimapesa) | Gold | Diamonds | Nickel | Other | Total |
| Other revenues | - | - | - | - | 16,250 | 16,250 |
| Depreciation of concessions | - | - | - | - | -2,265 | -2,265 |
| Depreciation according to plan | - | - | -567 | -129 | -65 | -761 |
| Operating result | - | -3,463 | -12,216 | -2,574 | -8,218 | -26,471 |
| Result before tax | - | -3,491 | -12,588 | -1,189 | -9,011 | -26,279 |
| Fixed assets | - | 25,052 | 72,734 | 6,477 | 62,038 166,301 | |
| Current assets | - | 2,202 | 24,278 | 77,300 | 16,453 120,233 | |
| Current liabilities | - | 762 | 47 | 4,980 | 2,192 | 7,981 |
| Investments (gross amounts) | - | 7,398 | 25,467 | 4,393 | 17,025 | 54,283 |
Other revenues consist of revenues attributable currency gains related to inter company balances. The currency gain occurs as a result of the exchange differences on intercompany loans. The amount of debt within the Group decreases as the currency, in which the claim is held, weakens. As the main operation carried out by IGE consists of managing its holdings in its subsidiaries, the gains from intercompany lending is treated as revenues from operations.
The weakening of the US dollar has significantly contributed to the loss of the Group during the second quarter. The effect on the income statement from changes in value of the Group's assets and liabilities are to be seen as not realized and may change significantly between the quarters. Changes in exchange rates explains why the "other external expenses" shows a bigger deficit during the second quarter isolated than the reporting period as a whole. The weaker dollar raised the amount of intercompany debts. While this does not affect- cash, it nonetheless increased the loss of the Group during the second quarter by MSEK -17.1. In addition, write down of assets due to the closure of operations in Burundi affected the result negatively, by about MSEK -1.
Other operating expenses are referable to IGE Nordic's sales of exploration permits.
| Financial revenue | Group | ||
|---|---|---|---|
| (TSEK) | 30/06/2009 | 30/06/2008 | 31/12/2008 |
| Received payment for issued share warrants | - | 1,690 | 1,500 |
| Calculation of real value MinMet Plc | - | - | 64 |
| Valuation of other short term investments | - | 121 | 283 |
| Capital gain from disposal of short term investment | - | 215 | 75 |
| Other financial revenues | - | 1 | - |
| Interest | 60 | 1,979 | 3,609 |
| Exchange rate gains | 2,355 | 2,164 | 2,718 |
| Total financial revenue | 2,415 | 6,170 | 8,249 |
| Financial expenses | |||
| (TSEK) | 30/06/2009 | 30/06/2008 | 31/12/2008 |
| Valuation of MinMet Plc | - | -2,880 | -5,074 |
| Valuation of other short term investments | - | -371 | -660 |
| Loss from shares in associated companies | -697 | -82 | -987 |
| Interest | -1,085 | -14 | -864 |
| Exchange rate losses | -2,212 | -2,631 | -7,651 |
| Total financial expenses | -3,994 | -5,978 | -15,236 |
The adjustments as result of revaluation of all short term investments are accounted for in gross amounts.
| (TSEK) Shareholdings |
Ownership | Book value | Equity | Profit/ loss |
|---|---|---|---|---|
| Kilimapesa Gold Ltd | 50% | 0.1 | -1,697 | -1,733 |
| Associated companies to IGE Nordic AB (owned by IGE to 99%) |
Ownership | Book value | Equity | Profit/ loss |
| Norrsken Energy LTD (UK) | 49% | 24,500 | 14,953 | -1,321 |
| Nordic Iron Ore AB | 32% | 1,881 | 1,737 | -2 |
| Associated companies to IGE Burundi SA (owned by IGE to 85%) |
Ownership | Book value | Equity | Profit/ loss |
| Tanganickel SA | 54% | 0 | -702 | -101 |
| (TSEK) | Group | |||
|---|---|---|---|---|
| 30/06/2009 | 30/06/2008 | 31/12/2008 | ||
| MinMet Plc | - | 2,130 | - | |
| UBS So 4 G10 Tr 091012 | - | - | - | |
| UBS Jersey AIO LÅN 90 100223 | - | 1,503 | - | |
| CS AIO PLUS 16 090527 | - | - | - | |
| Rbs Autopilot 5 - Plus Trygghet | - | 1,721 | - | |
| Total short term financial investments | 0 | 5,354 | 0 |
Short term investments are adjusted to market value in the income statement as the actual share price at the end of the reporting period. The holding in Minmet is totally written off according to estimated market value. At the end of the reporting period IGE holds no short term investments.
The sale of IGE's 50% ownership of the Gold project, Kilimapesa Gold, in Kenya is under process. As a consequence of the this sale the result, assets and liabilities referable to Kilimapesa Gold is accounted for separately in the income statement and the balance sheet of the IGE Group. The amounts accounted for as "assets held for sale" in the income statement and balance sheet are referable to Kilimapesa Gold and consists of the following:
| Other external expenses | -945 |
|---|---|
| Personnel expenses | -403 |
| Exchange rate losses | -385 |
| Result from assets held for sale | -1,733 |
| Mineral interests | 3,944 |
| Plant and machinery | 4,107 |
| Inventory | 1,345 |
| Other receivables | 1,280 |
| Assets that is held for sale | 10,676 |
| Other long term liabilities | 6,741 |
| Other liabilities | 1,267 |
| Liabilities referable to assets held for sale | 8,008 |
Inventories consists of consumable stores, gold inventory and raw material inventories.
The management of IGE estimates that the sale of Kilimapesa will have no tax effect that has to be taken in to consideration.
No cash contributing new share issues has been carried out during the reporting period.
The convertible loan that was issued in November 2008 has during the reporting period been fully converted to shares. This has resulted in that additional 11,000,000 shares has been issued during the reporting period.
Total amount of outstanding shares after the above conversion was 429,161,828.
The convertible loan that was issued in March 2009 has during the reporting period been fully converted to shares. This has resulted in that additional 50,000,000 shares has been issued during the reporting period.
Total amount of outstanding shares after the above conversion was 479,161,828.
IGE made, during the fourth quarter of 2008, a voluntary offer to acquire all outstanding shares in IGE Nordic AB (publ) ("IGE Nordic"). The acquisition was made through an all share offer, giving the shareholders in IGE Nordic 4 new shares in IGE for each share held in IGE Nordic.
By the end of 2008, IGE had received acceptances amounting to about 99% of the outstanding shares, including the 20,000,000 shares that it already owned. IGE aims to acquire the remaining shares resulting in that IGE Nordic will be held to 100 percent by IGE.. The total number of additional IGE shares registered in connection to the purchase of IGE Nordic amounted to 26,161,828.
Additional acceptances has been received during the first six month of 2009, resulting in that IGE has purchased 78,000 shares in IGE Nordic during the period. As payment for the shares IGE Nordic, IGE has issued 312,000 shares during the period.
The total number of outstanding IGE shares, after the purchase of additional 0,3% of IGE Nordic AB, amounted to 479,473,828.
Interest bearing long-term liabilities refer to a loan given by Svenska Handelsbanken AB for the purchase of equipment from Volvo. The loan is guaranteed by the Swedish Credit Exports Guarantee Board (EKN) and has a duration of 3 years. The loan was raised in June 2008.
The Board of IGE decided on, May 27, 2009, to issue a bridge loan of totally MSEK 20. The loan was given by a restricted number of creditors in Sweden. No guarantee commission or similar was paid and consequently IGE was provided with the full issue amount of MSEK 20 net through the loan. As a part of the compensation for lending the money, the creditors received a total of 15,000,000 newly issued warrants to subscribe for new shares in the company. Each warrant entitled the creditor to subscribe for new shares in the company not later than on 30 June 2010 at a subscription price that equals to 0.38 SEK (50 % of the volume weighted average paid price of the company's share on Oslo Börs during a period of May 28th to June 3rd, 2009).
The maturity date of the loan is December 31, 2009 and the loan runs with a fixed annual interest rate of 12%.
In connection to the loan IGE has pledged 26,000,000 of its shares in IGE Nordic as a security to the lenders. The total amount of outstanding shares in IGE Nordic is 26,816,042.
For information about currently outstanding share warrants and call options, other than the 15,000,000 described in note 14, the Company refers to the latest annual report of the Group (2008).
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