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STREAMPLAY STUDIO LIMITED Interim / Quarterly Report 2012
65841_rns_2012-03-14_10e94525-3356-4fce-93a2-10c2beef21cf.pdf
Interim / Quarterly Report
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ABN 31 004 766 376 and Controlled Entities
FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2011
CONTENTS
| CORPORATE DIRECTORY | 1 |
|---|---|
| DIRECTORS' REPORT | 3 |
| AUDITOR'S INDEPENDENCE DECLARATION | 4 |
| CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE HALF YEAR ENDED 31 DECEMBER 2011 | 5 |
| CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2011 | 6 |
| CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE HALF YEAR ENDED 31 DECEMBER 2011 | 7 |
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE HALF YEAR ENDED 31 DECEMBER 2011 | 8 |
| NOTES TO THE FINANCIAL REPORTFOR THE HALF YEAR ENDED 31 DECEMBER 2011 | 9 |
| DIRECTORS' DECLARATION | 15 |
| INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF GIPPSLAND LIMITED | 16 |
CORPORATE DIRECTORY
| DIRECTORS | Ian Jeffrey Gandel – Non-Executive ChairmanJon Starink – Executive DirectorJohn Stuart Ferguson Dunlop – Executive DirectorJohn Damian Kenny - Non-Executive Director | ||||
|---|---|---|---|---|---|
| COMPANY SECRETARY | Rowan St John Caren | ||||
| REGISTERED OFFICE | Suite 4, 207 Stirling HighwayClaremont WA 6010Australia | ||||
| POSTAL ADDRESS | PO Box 352Nedlands WA 6909Australia | ||||
| TELEPHONE | +61 (0)8 9340 6000 | ||||
| FACSIMILE | +61 (0)8 9340 6060 | ||||
| [email protected] | |||||
| WEBSITE | www.gippslandltd.com | ||||
| AUDITORS | Deloitte Touche TohmatsuLevel 14, Woodside Plaza240 St Georges TerracePerth WA 6000Australia | ||||
| SOLICITORS | Steinepreis PaganinLevel 4, 16 Milligan StreetPerth WA 6000Australia | Trowers & Hamlins3rd Floor, 1 El Gabalaya StreetZamalek, CairoArab Republic of Egypt | |||
| Gowlings (UK) LLP15th Floor, 125 Old Broad StreetLondon EC2N 1ARUnited Kingdom | |||||
| SHARE REGISTRY | Security Transfer Registrars Pty LtdSuite 1, 770 Canning HwyApplecross WA 6153Australia | PO Box 535Applecross WA 6953Australia |
Website: www.securitytransfer.com.au
CORPORATE DIRECTORY (cont)
| AUSTRALIAN SECURITIES EXCHANGE | The Company's securities are quoted on the official list of the AustralianSecurities Exchange (ASX Limited), the home exchange being:ASX Limited2 The EsplanadePerth WA 6000Australia |
|---|---|
| ASX CODE | GIP |
| FRANKFURT STOCK EXCHANGE | The Company's securities are quoted on the Frankfurt Stock Exchange;Neue Börsenstrasse 160487 Frankfurt / MainGermany |
| FSE – CODE | GIX |
DIRECTORS' REPORT
Your directors submit the financial report for the half year ended 31 December 2011.
Directors
The names of directors who held office during or since the end of the half-year:
Mr Ian J Gandel Mr Jon Starink Mr John D Kenny Mr John SF Dunlop
Review of Operations
The consolidated operating loss after tax for the half year was $1,152,991 (2010 – loss of $1,236,248).
The principal activities of the economic entity during the half-year were the exploration and development of commercially and economically viable mineral resources. The primary focus continued to be on the development of the Abu Dabbab tantalite, tin and feldspar project in Egypt in which both Gippsland and the Egyptian Government each have a 50% shareholding.
The Company completed a comprehensive engineering study and economic evaluation of the opportunity to develop the Abu Dabbab alluvial tin deposits (the "Abu Dabbab Alluvial Project"). The Company placed orders for capital items which will be utilised to process high grade alluvial material at the Abu Dabbab Alluvial Project. The initial alluvial mining program will target only the high grade portions of the Wadi Quaria deposit. Mining and processing operations are scheduled to commence in March 2012.
The Company is working towards securing project finance and equity for the development and construction of the Abu Dabbab project in Egypt and has re-focused the search for a financier on major banks and sovereign funds located in the Middle East and North Africa region.
The Company approved a programme of work at its Nuweibi project and undertook satellite image acquisition, map compilation and processing of a small parcel of cassiterite bearing alluvials. Planned drilling has been deferred due to the lack of a suitable drilling rig.
The Group applied for and was granted the Gerasi South exploration licence covering 100 km2 in Eritrea. Together with its Adobha exploration licence, the Group has exploration licences covering a total of 2,200 km2 of ground prospective for both VMS mineralisation and structurally controlled gold mineralisation. During the period, the Group completed a 5,161 line-kilometre airborne geophysical survey over the Adobha and Gerasi South licence areas and received the final levelled data from the survey. Interpretation of the data by the Company's consultant geophysicist has identified 16 electro-magnetic ("EM") anomalies and follow-up exploration in the areas of the EM anomalies has commenced with programmes of geological mapping, in-fill drainage sampling, and soil and rock-chip sampling. Gravity surveys are being planned for the high to medium priority EM anomalies. The Company has submitted an application for an Exploration Licence to cover the area to the west of the granted Adobha and Gerasi South Exploration Licences.
Corporately, during the half year;
- Gippsland raised $5.06 million (before costs) by way of a fully underwritten renounceable rights issue at an issue price of $0.027 per share.
- Gippsland signed a sale and purchase agreement with Stellar Resources Ltd ("Stellar") for the sale of Gippsland's 40% interest in the Heemskirk Tin Project to Stellar in return for 43,528,743 Stellar shares and a royalty. The transaction was completed in February 2012.
Auditor's Declaration
The lead auditor's independence declaration under section 307C of the Corporations Act 2001 is set out on page 4 for the half-year ended 31 December 2011.
This report is signed in accordance with a resolution of the Board of Directors.
JSF DUNLOP DIRECTOR Dated this 15th day of March 2012
Deloitte Touche Tohmatsu ABN 74 490 121 060
Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia
Tel: +61 8 9365 7000 Fax: +61 8 9365 7001
www.deloitte.com.au The Board of Directors Gippsland Limited Suite 4, 207 Stirling Highway CLAREMONT WA 6010
15 March 2012
Dear Board Members
Gippsland Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Gippsland Limited.
As lead audit partner for the review of the financial statements of Gippsland Limited for the half-year ended 31 December 2011, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
(ii) any applicable code of professional conduct in relation to the review.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Neil Smith Partner Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2011
| Consolidated | |||
|---|---|---|---|
| Note | 31 December2011$ | 31 December2010$ | |
| Finance revenue | 53,996 | 44,804 | |
| Other income | 9,575 | 188 | |
| Total income | 63,571 | 44,992 | |
| Administration expense | (515,390) | (615,138) | |
| Employee benefits expense | (650,969) | (591,230) | |
| Foreign exchange (losses)/gains | (11,404) | 4,255 | |
| Share based payment expense | (4,260) | (22,500) | |
| Exploration expenses | - | (31,299) | |
| Project evaluation expense | - | (9,616) | |
| Depreciation expense | (34,539) | (15,712) | |
| Total expenses | (1,216,562) | (1,281,240) | |
| Loss before income tax | (1,152,991) | (1,236,248) | |
| Income tax expense | - | - | |
| Loss after income tax | (1,152,991) | (1,236,248) | |
| Other comprehensive incomeForeign currency translation | 81,482 | (664,686) | |
| Total other comprehensive income | 81,482 | (664,686) | |
| Total comprehensive income/(loss) for the period | (1,071,509) | (1,900,934) | |
| Profit/(loss) is attributable to:Members of the parentNon-controlling interest | (1,152,991)- | (1,236,248)- | |
| Total comprehensive income/(loss) is attributable to:Members of the parentNon-controlling interest | (1,071,509)- | (1,900,934)- | |
| Earnings per shareBasic profit (loss) (cents per share)Diluted profit (loss) (cents per share) | (0.15)(0.15) | (0.21)(0.21) |
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011
| Consolidated | ||||
|---|---|---|---|---|
| Note | 31 December2011$ | 30 June2011$ | ||
| CURRENT ASSETS | ||||
| Cash and cash equivalents | 1,771,054 | 806,397 | ||
| Trade and other receivablesOther current assets | 39,160265,307 | 98,48080,524 | ||
| TOTAL CURRENT ASSETS | 2,075,521 | 985,401 | ||
| NON CURRENT ASSETS | ||||
| Property, plant and equipment | 801,608 | 284,429 | ||
| Exploration and evaluation | 6,105,160 | 4,316,624 | ||
| TOTAL NON CURRENT ASSETS | 6,906,768 | 4,601,053 | ||
| TOTAL ASSETS | 8,982,289 | 5,586,454 | ||
| CURRENT LIABILITIES | ||||
| Trade and other payables | 981,696 | 1,010,327 | ||
| Provisions | 15,724 | 10,177 | ||
| Loans and borrowings | - | 188,957 | ||
| TOTAL CURRENT LIABILITIES | 997,420 | 1,209,461 | ||
| TOTAL NON-CURRENT LIABILITIES | - | - | ||
| TOTAL LIABILITIES | 997,420 | 1,209,461 | ||
| NET ASSETS | 7,984,869 | 4,376,993 | ||
| EQUITY | ||||
| Issued capital | 3 | 43,263,306 | 38,588,181 | |
| Reserves | (191,209) | (276,951) | ||
| Accumulated losses | (35,087,228) | (33,934,237) | ||
| TOTAL EQUITY | 7,984,869 | 4,376,993 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2011
| CONSOLIDATED | Share Capital- Ordinary | AccumulatedLosses | OtherReserves | Total |
|---|---|---|---|---|
| Balance at 1 July 2010 | 35,581,715 | (31,303,592) | 622,497 | 4,900,620 |
| Currency translation differences | - | - | (664,686) | (664,686) |
| Loss for the period | - | (1,236,248) | - | (1,236,248) |
| Total comprehensive income for the period | - | (1,236,248) | (664,686) | (1,900,934) |
| Transactions with owners in their capacity asowners | ||||
| Shares issued during the half year | 3,222,500 | - | - | 3,222,500 |
| Share issue costs | (216,034) | - | - | (216,034) |
| Balance at 31 December 2010 | 38,588,181 | (32,539,840) | (42,189) | 6,006,152 |
| Balance at 1 July 2011 | 38,588,181 | (33,934,237) | (276,951) | 4,376,993 |
| Currency translation differences | - | - | 81,482 | 81,482 |
| Loss for the period | - | (1,152,991) | - | (1,152,991) |
| Total comprehensive income for the period | - | (1,152,991) | 81,482 | (1,071,509) |
| Transactions with owners in their capacity asowners | ||||
| Shares issued during the half year | 5,063,591 | - | - | 5,063,591 |
| Share issue costs | (388,466) | - | - | (388,466) |
| Option reserve on recognition of unlisted options | - | - | 4,260 | 4,260 |
| Balance at 31 December 2011 | 43,263,306 | (35,087,228) | (191,209) | 7,984,869 |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2011
| Consolidated | |||
|---|---|---|---|
| 31 December2011$ | 31 December2010$ | ||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Payments to suppliers and employeesInterest receivedFinance costs paidOther income | (1,077,507)52,285(592)9,575 | (1,183,181)17,603-187 | |
| Net cash flows from/(used in) operating activities | (1,016,239) | (1,165,391) | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Payments for exploration and evaluationPurchase of property, plant and equipmentLoans to other entities | (1,891,980)(549,623)(66,678) | (264,039)(40,767)(16,413) | |
| Net cash flows from/(used in) investing activities | (2,508,281) | (321,219) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Net proceeds from share issuesPayment of share issue costsProceeds from borrowingsRepayment of borrowings | 5,063,591(388,467)400,000(560,000) | 3,200,000(216,034)-- | |
| Net cash flows from/(used in) financing activities | 4,515,124 | 2,983,966 | |
| Net increase / (decrease) in cash and cashequivalents | 990,604 | 1,497,356 | |
| Effects of exchange rate changes on cash | (25,947) | (25,214) | |
| Cash and cash equivalents at beginning of period | 806,397 | 1,223,122 | |
| Cash and cash equivalents at end of period | 1,771,054 | 2,695,264 |
NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2011
NOTE 1: BASIS OF PREPARATION
The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting.
The half-year financial report does not include all of the notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.
It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2011 and any public announcements made by Gippsland Limited and its controlled entities during the half-year in accordance with the continuous disclosure requirements arising under the Corporations Act 2001.
The half-year report does not include full disclosures of the type normally included in an annual financial report.
For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.
Reporting Basis and Conventions
The half-year report has been prepared on an accrual basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.
Going Concern
The consolidated entity has incurred a net loss after income tax of $1,152,991 (2010: $1,236,248) and experienced net cash outflows from operations of $1,016,239 (2010: $1,165,391) and net cash outflows from investing activities of $2,508,281 (2010: $321,219) for the half-year ended 31 December 2011.
The ability of the consolidated entity to continue as a going concern is principally dependent upon raising additional capital and / or debt finance to fund exploration and project development, funding the Abu Dabbab project, other commitments, other principal activities and working capital.
These conditions indicate a material uncertainty that may cast significant doubt about the consolidated entity's ability to continue as a going concern.
During February and March 2012, the Company commenced and is currently in the process of completing a fully underwritten renounceable rights issue to raise $2,438,025 before costs. The rights issue is underwritten by Patersons Securities Ltd and sub-underwritten by Gandel Metals Pty Ltd, an entity associated with Mr Ian Gandel.
The directors have prepared a cash flow forecast for the period ending 31 March 2013 which indicates that the current cash resources may not meet expected cash outgoings, without additional capital and / or debt funding. The consolidated entity will require further capital of approximately $2 million (net of costs), over and above the rights issue currently underway, to be raised by no later than November 2012 to fund its current operations through to 31 March 2013. The consolidated entity is currently evaluating capital raising and/or debt funding opportunities.
Based on the cash flow forecasts and achieving future funding, the directors are satisfied that the going concern basis of preparation is appropriate. The financial report has therefore been prepared on a going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
Should the consolidated entity be unable to raise the funding referred to above, there is a material uncertainty whether the consolidated entity will be able to continue as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal course of business and at amounts stated in the financial report.
The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.
NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2011
Accounting Policies
The accounting policies have been consistently applied by the entities in the consolidated entity and are consistent with those applied in the 30 June 2011 annual report, except for the adoption of amending standards mandatory for annual periods beginning on or after 1 July 2011, as noted below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.
New Standards and Interpretations
(a) Changes in Accounting Policies and Disclosures
The consolidated entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to their operations and are effective for the current financial reporting period.
Significant new and revised standards and interpretations effective for the current financial reporting period that are relevant to the consolidated entity are:
- AASB 124 Related Party Disclosures (2009), AASB 2009-12 Amendments to Australian Accounting Standards;
- AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project;
- AASB 2010-5 Amendments to Australian Accounting Standards;
- AASB 2010-6 Amendments to Australian Accounting Standards Disclosures on Transfers of Financial Assets;
The adoption of these Standards and Interpretations has not had an impact on the consolidated entity.
(b) Accounting Standards and Interpretations issued but not yet effective.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective and have not been adopted by the consolidated entity for the half year ending 31 December 2011. Management are in the process of assessing the impact of the adoption of these standards and interpretations on the consolidated entity.
NOTE 2: OPERATING SEGMENT
(a) Industry segments
The Group operates predominantly in the mining and exploration industry.
Information reported to the Group's chief operating decision maker for the purpose of resource allocation and assessment of segment performance is focussed on the type of resources being explored for and evaluated or developed. The Group's reportable segments under AASB 8 are therefore as follows:
- Tantalum
- Gold
- Copper
- Corporate
The tantalum segment relates to the development of the Group's Abu Dabbab tantalum-tin project in Egypt. The gold segment relates to the exploration activities at Wadi Allaqi in Egypt. The copper segment relates to the exploration activities at the Adobha project in Eritrea.
The corporate segment relates to operations of the corporate head office in Perth, Western Australia.
NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2011
(b) Business segments
The following tables present revenue and loss information and certain asset and liability information regarding business segments for the periods ended 31 December 2011 and 2010.
| Continuing Operations | TotalOperations | ||||
|---|---|---|---|---|---|
| Tantalum$ | Gold$ | Copper$ | Corporate$ | $ | |
| Period ended 31 December 2011 | |||||
| Revenue | |||||
| Other revenues from external customers | - | - | 2,223 | 61,348 | 63,571 |
| Inter-segment transactions | - | 2,606 | - | - | 2,606 |
| Total segment revenue | - | 2,606 | 2,223 | 61,348 | 66,177 |
| Inter-segment elimination | (2,606) | ||||
| Total consolidated revenue | 63,571 | ||||
| Result | |||||
| Segment result | 299,185 | 22,243 | 70,974 | 760,589 | 1,152,991 |
| Loss before income tax and minority interest | 1,152,991 | ||||
| Income tax expense | - | ||||
| Net loss for the year | 1,152,991 | ||||
| Assets and liabilities | |||||
| Segment assetsTotal assets | 5,251,661 | 55,070 | 2,035,632 | 1,639,926 | 8,982,2898,982,289 |
| Continuing Operations | TotalOperations | ||||
| Tantalum$ | Gold$ | Copper$ | Corporate$ | $ | |
| Period ended 31 December 2010 | |||||
| Revenue | |||||
| Other revenues from external customers | - | - | - | 44,992 | 44,992 |
| Inter-segment transactions | - | 8,795 | - | - | 8,795 |
| Total segment revenue | - | 8,795 | - | 44,992 | 53,787 |
| Inter-segment elimination | (8,795) | ||||
| Total consolidated revenue | 44,992 | ||||
| Result | |||||
| Segment resultLoss before income tax and minority interest | 332,469 | 31,641 | 9,624 | 862,514 | 1,236,2481,236,248 |
| Income tax expense | - | ||||
| Net loss for the year | 1,236,248 | ||||
| Assets and liabilities | |||||
| Segment assetsTotal assets | 3,829,443 | 64,737 | 309,114 | 2,835,387 | 7,038,6817,038,681 |
NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2011
NOTE 3: CONTRIBUTED EQUITY
| 31 December2011$ | 31 December2011Number | 30 June2011$ | 30 June2011Number | |
|---|---|---|---|---|
| Issued capital: | ||||
| 812,675,131 (June 2011: | ||||
| 625,134,716) fully paid ordinary | ||||
| shares | 43,263,306 | 812,675,131 | 38,588,181 | 625,134,716 |
| Movement | ||||
| Opening Balance at 1 July 2011 | 38,588,181 | 625,134,716 | ||
| Shares issued during the period | ||||
| Rights issue | 5,063,591 | 187,540,415 | ||
| Share issue costs | (388,466) | - | ||
| Closing balance at 31 December | ||||
| 2011 | 43,263,306 | 812,675,131 | ||
| Options | ||||
| No of Options | ||||
| Opening balance at 1July 2011 | 56,000,000 | |||
| Less: Exercise of options during | ||||
| the period | - | |||
| Less: Options expired during the | ||||
| period | (14,000,000) | |||
| Plus: Options issued during the | ||||
| period | 1,200,000 | |||
| Closing balance at 31 December | ||||
| 2011 | 43,200,000 |
As at 31 December 2011 the economic entity had the following options on issue:
(i) 25,000,000 unlisted options exercisable at 13.5 cents each by 26 May 2012.
(ii) 17,000,000 unlisted options exercisable at 15.0 cents each by 31 May 2012.
(iii) 600,000 unlisted options exercisable at 4.0 cents each by 31 December 2012.
(iv) 600,000 unlisted options exercisable at 6.0 cents each by 31 December 2013.
NOTE 4: COMMITMENTS AND CONTINGENCIES
Operating lease commitments - Group as lessee
The Group has entered into commercial leases for office accommodation in:
- Perth, Australia;
- Cairo, Egypt; and
- Asmara, Eritrea
Perth Office Lease
The property lease is a non-cancellable lease with a 2.5 year term (expiring in April 2014), with rent payable monthly in advance. The lease is currently subject to a market rent review which will be back-dated to October 2011 and, for subsequent rent reviews, contingent rental provisions within the lease agreement require the minimum lease payments shall be increased by the lower of CPI or 5% per annum. Lease payments for the next 12 month period to 31 December 2012 are estimated to be $132,350 and for the remaining term of the current lease from 1 January 2013 to 10 April 2014 are estimated to be $169,000, subject to the market rent review. An option exists to renew the lease at the end of the 2.5 year term for an additional 2.5 years.
NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2011
Cairo Office Lease
The property lease is a non-cancellable lease with a five year term expiring on 31 August 2016, with rent payable monthly in advance. Lease payments for the next 12 month period to 31 December 2012 are estimated to be $19,000 and for the remaining term of the current lease from 1 January 2013 to 31 August 2016 are estimated to be $70,000.
Asmara Office Lease
The property lease is a non-cancellable lease with a twelve month term, with rent payable monthly in advance. Lease payments for the next 12 month period to 31 December 2012 are estimated to be $10,000.
Bank Guarantee
A subsidiary of the Group has been required to provide a bank guarantee of US$30,000 to the General Authority for Investment and Free Zone in Egypt. The letter of guarantee is valid until 10 August 2012.
Minimum Exploration Expenditure – Eritrea
Under Eritrean mining law, expenditure commitments entered into by a tenement holder with respect to a tenement are mandatory. Failure to expend funds in accordance with a commitment may result in a liability to the Eritrean government to the extent of the unexpended portion of the expenditure commitment, or forfeiture of the tenement/s. The Group is required to expend approximately a further $1,014,000 on the Adobha Exploration Licence in Eritrea by no later than 23 July 2012, being the second anniversary of the grant of the tenement, and approximately a further $61,000 on the Gerasi South Exploration Licence in Eritrea by no later than 25 August 2012, being the first anniversary of the grant of the tenement.
Subject to the relinquishment provisions in relation to the licence areas, the minimum expenditure commitments for year 3 of the Adobha Exploration Licence is US$3,440,000 and the minimum expenditure commitments for year 2 of the Gerasi South Exploration Licence is US$200,000. The Group has pending applications regarding other exploration licence areas.
Exploration Expenditure - Nuweibi
Prior to 30 June 2011, the Group committed to spend US$300,000 on exploration at its Nuweibi Tantalum-Tin Project by 31 December 2011. During the period ended 31 December 2011, work undertaken at the Nuweibi Tantalum-Tin Project included satellite image acquisition, map compilation and processing of a small parcel of cassiterite bearing alluvials. The amount spent on this work was approximately US$5,600.
Drilling at Nuweibi planned for the December 2011 quarter was deferred until 2012 due to the lack of a suitable drilling rig. Accordingly, approximately a further US$294,400 is required to be spent in relation to exploration once a suitable drilling rig becomes available in order to meet this expenditure commitment.
Capital Commitments
Gippsland's subsidiary, Tantalum Egypt JSC, entered into a contract prior to 31 December 2011 with a mining contractor in relation to its Alluvial Tin Project. The total contract value is estimated at US$1,740,000 over the life of the project. As at 31 December 2011, under this contract, Tantalum Egypt JSC had paid an advance payment of US$125,000 and accrued for a further advance payment of US$100,000, which was paid during January 2012.
As at 31 December 2011, Gippsland's subsidiary, Tantalum Egypt JSC, had a capital commitment of approximately $20,000 in relation to an item of plant purchased for its Alluvial Tin Project. This amount was paid on 2 February 2012.
NOTE 5: EVENTS SUBSEQUENT TO REPORTING DATE
At an Extraordinary General Meeting on 20 January 2012, the Shareholders of Gippsland approved the sale of its interest in the Heemskirk Tin Joint Venture to Columbus Metals Ltd, a subsidiary of Stellar Resources Ltd. As announced to the ASX on 2 February 2012, the Shareholders of Stellar Resources Ltd approved the transaction on 25 January 2012 and settlement has occurred.
In consideration for the sale, Gippsland has been issued 43,528,743 fully paid ordinary shares in Stellar Resources Ltd and has been released from any obligations in relation to prior year exploration expenditure. Gippsland is also entitled to a net smelter royalty in respect of any further tin production from the Heemskirk Tin Joint Venture.
NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2011
On 2 February 2012, Gippsland announce a fully underwritten renounceable rights issue to all shareholders on the basis of one new share for every five existing shares to raise approximately $2,438,000 before costs at an issue price of 1.5 cents per new share. The Rights Issue has been fully underwritten by Patersons Securities Limited and is subunderwritten by Gandel Metals Pty Ltd as trustee for the Gandel Metals Trust, a company controlled by Gippsland Chairman, Mr Ian Gandel.
Since 31 December 2011, no other events have arisen that have materially affected the operations of the economic entity, the results of the economic entity or the state of affairs of the economic entity.
DIRECTORS' DECLARATION
The directors of Gippsland Limited declare that:
-
- In the directors' opinion, the financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the consolidated entity's financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and
-
- In the directors' opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors dated this 15th day of March 2012.
JSF DUNLOP Director
Deloitte Touche Tohmatsu ABN 74 490 121 060
Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia
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Independent Auditor's Review Report to the Members of Gippsland Limited
We have reviewed the accompanying half-year financial report of Gippsland Limited, which comprises the condensed statement of financial position as at 31 December 2011, and the condensed statement of comprehensive income, the condensed statement of cash flows and the condensed statement of changes in equity for the half-year ended on that date, selected explanatory notes and, the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 5 to 15.
Directors' Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's financial position as at 31 December 2011 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Gippsland Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Auditor's Independence Declaration
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Gippsland Limited, would be in the same terms if given to the directors as at the time of this auditor's review report.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Gippsland Limited is not in accordance with the Corporations Act 2001, including:
- (a) giving a true and fair view of the consolidated entity's financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and
- (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
Material Uncertainty Regarding Continuation as a Going Concern
Without qualifying our conclusion, we draw attention to Note 1 in the financial report, which indicates that the consolidated entity has incurred net losses of $1,152,991 (2010: $1,236,248) and experienced net cash outflows from operations of $1,016,239 (2010: $1,165,391) and net cash outflows from investing activities of $2,508,281 (2010: $321,219) for the half-year ended 31 December 2011. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity's ability to continue as a going concern and therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business and at the amounts stated in the financial report.
DELOITTE TOUCHE TOHMATSU
Neil Smith Partner Chartered Accountants Perth, 15 March 2012