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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Cnr Champion Parade and Musgrave Street
Port Moresby, NCD, Papua New Guinea
Mr Stuart MacKenzie
0011 617 3318 3300
Stuart.MacKenzie@LGLgold.com
Level 9, 500 Queen Street
Brisbane
Queensland, Australia, 4000
Lihir Gold Limited Ordinary Shares of no par value | NASDAQ Global Market* | |
American Depositary Shares, each of which represents ten | NASDAQ Global Market | |
Lihir Gold Limited Ordinary Shares and which are | ||
evidenced by American Depositary Receipts |
None
Lihir Gold Limited Ordinary Shares of no par value: | 1,904,497,244 fully paid shares | |
(including 585,984 Restricted Executive Shares) | ||
Lihir Gold Limited Treasury “B’’ Shares | 161,527,405 |
o | USGAAP | |
þ | International Financial Reporting Standards as issued by the International Accounting Standards Board | |
o | Other |
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EX-99.4.AB: DNX CONTRACT | ||||||||
EX-99.4.AC: DNX PNG CONTRACT | ||||||||
EX-99.4.AD: REVISED IBP | ||||||||
EX-99.4.AE: GEKKO CONTRACT | ||||||||
EX-99.4.AF: SPINIFEX CONTRACT | ||||||||
EX-99.4.AG: PYBAR CONTRACT | ||||||||
EX-99.4.AH: WASHINGTONS DRILLING CONTRACT | ||||||||
EX-99.4.AI: MERGER IMPLEMENTATION AGREEMENT | ||||||||
EX-99.4.AJ: LESP | ||||||||
EX-99.8: SIGNIFICANT SUBSIDIARIES | ||||||||
EX-99.12.A: CERTIFICATION | ||||||||
EX-99.12.B: CERTIFICATION | ||||||||
EX-99.13.A: CERTIFICATION | ||||||||
EX-99.13.B: CERTIFICATION |
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115 | ||||
116 | ||||
120 | ||||
F-1 – F-67 | ||||
121 | ||||
Exhibit 4 (ab): DNX (Australia) Contract | ||||
Exhibit 4 (ac): DNX (PNG) Contract | ||||
Exhibit 4 (ad): Revised IBP (Integrated Benefits Package review Status Statement (“LSDP”)) | ||||
Exhibit 4 (ae): Gekko Contract | ||||
Exhibit 4 (af): Spinafex Contract | ||||
Exhibit 4 (ag): Pybar Contract | ||||
Exhibit 4 (ah): Washingtons Drilling Contract | ||||
Exhibit 4 (ai): Merger Implementation Agreement | ||||
Exhibit 4 (aj): Lihir Executive Share Plan (LESP) | ||||
Exhibit 8: Substantial Subsidiaries | ||||
Exhibit 12A: Certification | ||||
Exhibit 12B: Certification | ||||
Exhibit 13A: Certification | ||||
Exhibit 13B: Certification |
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A. | Selected Financial Data |
Year ended December 31, | ||||||||||||||||||||
(In $ millions, except where indicated) | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
Amounts calculated in accordance with IFRS: | ||||||||||||||||||||
Statements of Comprehensive Income data: | ||||||||||||||||||||
Revenue(1) | 498.4 | 386.0 | 263.9 | 246.1 | 211.4 | |||||||||||||||
Operating profit before other income/(expense)(2) | 195.9 | 156.2 | 59.7 | 27.1 | 33.6 | |||||||||||||||
Net profit / (loss) after tax(3) | (24.1 | ) | 53.8 | 9.8 | 329.2 | 34.8 | ||||||||||||||
Earnings per share, basic and diluted(4) | (0.014 | ) | 0.042 | 0.008 | 0.256 | 0.030 | ||||||||||||||
Cash dividends per ordinary share(5) | — | — | — | — | 0.016 | |||||||||||||||
Number of ordinary shares (millions)(6) | 1,903.9 | 1,284.2 | 1,284.2 | 1,284.2 | 1,282.3 | |||||||||||||||
Statements of Financial Position data(7): | ||||||||||||||||||||
Total assets | 2,305.6 | 1,496.0 | 1,319.4 | 1,156.9 | 748.9 | |||||||||||||||
Cash and current receivables held | 189.1 | 51.6 | 133.2 | 88.7 | 163.2 | |||||||||||||||
Current liabilities | 77.8 | 177.3 | 80.8 | 104.3 | 60.3 | |||||||||||||||
Long term obligations | 66.7 | 506.8 | 455.1 | 215.4 | 227.2 | |||||||||||||||
Total shareholders’ equity(8) | 2,161.1 | 811.9 | 783.5 | 837.2 | 461.4 | |||||||||||||||
Paid up capital(9) | 2,319.7 | 1,027.1 | 1,027.5 | 1,027.5 | 1,025.3 | |||||||||||||||
Expenditure and Financing Data: | ||||||||||||||||||||
Net cash flow from operating activities | (270 | ) | 57.3 | (54.5 | ) | 30.3 | 16.7 | |||||||||||||
Total expenditure on investing activities | (178.6 | ) | (203.3 | ) | (99 | ) | (87.6 | ) | (26.8 | ) | ||||||||||
Financing activities: | ||||||||||||||||||||
Issuance of ordinary shares | 977.4 | — | — | 2.2 | 151.5 | |||||||||||||||
Drawdown of term debt | 22.4 | 65.6 | 245.5 | — | — | |||||||||||||||
Repayment of loans | (421.6 | ) | — | (49.5 | ) | (14.0 | ) | (7.0 | ) | |||||||||||
Dividend paid | — | — | — | — | (14.2 | ) | ||||||||||||||
Purchase of treasury shares | (1.3 | ) | (0.4 | ) | — | — | — | |||||||||||||
Total financing activities | 576.9 | 65.2 | 139.6 | (11.8 | ) | 130.3 |
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(1) | Alternative terminology: “net sales” or “operating revenues”. | |
(2) | Alternative terminology: “income/(loss) from operations” or “income/(loss) from continuing operations”. | |
(3) | Alternative terminology: “Net income/(loss)” since the Company has no discontinued operations | |
(4) | Alternative terminology: “net income/(loss) from operations per share” or “income/(loss) from continuing operations per share”. To date the Company paid only one dividend of $0.016 ($A0.02) per share on July 16, 2003. | |
(5) | In US$ per share. | |
(6) | As adjusted to reflect changes in capital. | |
(7) | At period end. | |
(8) | Alternative terminology: “net assets”. | |
(9) | Alternative terminology: “capital stock”. |
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B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
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D. | Risk Factors |
1. | The Company is currently dependant on a single mine |
2. | The Lihir operation may be adversely affected by difficult geological conditions | |
a. | Hydrological and geothermal risks |
b. | Volcanic activity risks |
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c. | Landslide risks |
i. | extension of the North Kapit Stockpile; | |
ii. | higher than long term average rainfall over the previous six months prior to the landslide; and | |
iii. | a magnitude 7.7 earthquake on September 9, 2005. |
(a) | flow of water into tension cracks and blockage of subsurface drainage; | |
(b) | geothermal activity; and | |
(c) | loss of side restraint and extension upslope. |
3. | Delays or cost overruns in the development of the MOPU Project could have a material adverse effect on the Company’s business and financial performance. |
4. | The Company’s business is subject to construction, commissioning and other operational risks |
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5. | The Company’s insurance may not address all operating risks |
6. | The Company is subject to PNG political risks |
7. | The Company is vulnerable to civil unrest in PNG |
8. | The Company is vulnerable to landowner compensation issues |
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9. | The Company’s results are dependent upon gold prices determined by the market |
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Price in $ Per Ounce of Gold | ||||||||||||
Year | High | Low | Average | |||||||||
1988 | 484 | 395 | 437 | |||||||||
1989 | 416 | 356 | 381 | |||||||||
1990 | 424 | 346 | 384 | |||||||||
1991 | 403 | 344 | 362 | |||||||||
1992 | 360 | 330 | 344 | |||||||||
1993 | 406 | 326 | 360 | |||||||||
1994 | 396 | 370 | 384 | |||||||||
1995 | 396 | 372 | 384 | |||||||||
1996 | 415 | 367 | 397 | |||||||||
1997 | 366 | 283 | 331 | |||||||||
1998 | 313 | 273 | 294 | |||||||||
1999 | 326 | 253 | 279 | |||||||||
2000 | 313 | 264 | 279 | |||||||||
2001 | 293 | 256 | 271 | |||||||||
2002 | 349 | 278 | 310 | |||||||||
2003 | 416 | 319 | 363 | |||||||||
2004 | 454 | 375 | 409 | |||||||||
2005 | 537 | 411 | 445 | |||||||||
2006 | 725 | 525 | 603 | |||||||||
2007 | 841 | 608 | 695 | |||||||||
2008 (to March 31) | 1,011 | 847 | 925 |
10. | The Company’s prospects are partly dependent on reserves estimates and future experience |
11. | The Company cannot guarantee it can obtain all the mining and processing inputs required for its operations, including staff |
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12. | The Company is subject to the effects of rising oil prices |
13. | The Company has limited financial resources |
14. | The Company’s operations are subject to environmental risks |
15. | The Company’s mining and exploration rights may be terminated under PNG law |
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16. | The Company is vulnerable to a limited market for the Kina and foreign exchange controls |
17. | The Company’s dividends to U.S. shareholders are subject to withholding tax |
18. | The Company’s shareholders are subject to different rights under certain circumstances |
19. | Difficulty may be experienced in the pursuit of litigation against the Company or its executive officers, directors, or experts who are not resident in the United States |
• | the presence of the person to be served within the jurisdiction of the relevant court; or | |
• | the consent of that person to receive service outside the jurisdiction. |
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20. | The Ballarat operation is exposed to exploration risk and uncertainty of development projects |
• | establish the presence, and to quantify the extent and grades (metal content), of mineralized material through exploration drilling; | |
• | determine appropriate metallurgical recovery processes to extract gold from the ore; | |
• | estimate ore reserves; | |
• | construct, renovate or expand mining and processing facilities. |
21. | The Ballarat operation does not have ore reserves and due to the nature of the mineralization, may never have reserves |
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22. | The Ballarat operation is subject to unstable ground conditions |
23. | The Ballarat operation is in an urban setting and is vulnerable to adverse community relations |
24. | The Company is subject to strikes, work slowdowns and other industrial relations risk |
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Item 4. | Information on the Company |
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(in US$ millions) | 2007 | 2006 | 2005 | |||||||||
Lihir | 156.5 | 185.9 | 99.5 | |||||||||
Ballarat | 65.9 | — | — | |||||||||
Corporate | 0.3 | 1.8 | — | |||||||||
222.7 | 187.7 | 99.5 | ||||||||||
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• | it enables the treatment of ore into a higher grade sulphide concentrate for pressure oxidation feed, and | |
• | sensitivity analyses indicate that the flotation expansion has a lower risk profile than the current plant configuration case, because it is less sensitive to most adverse variations in sulphur feed types. |
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2007 | 2006 | 2005 | ||||||||||
High-grade sulphide ore (K tonnes) | 6,111 | 4,204 | 3,518 | |||||||||
High-grade sulphide ore (g Au/t) | 5.14 | 5.51 | 6.11 | |||||||||
Low-grade sulphide ore (K tonnes) | 4,380 | 3,751 | 5,857 | |||||||||
Low-grade sulphide ore grade (g Au/t) | 2.32 | 2.27 | 2.05 | |||||||||
Total Ore (K tonnes) | 10,491 | 7,955 | 9,375 | |||||||||
Total Ore grade (g Au/t) | 3.96 | 3.98 | 3.57 | |||||||||
Total Waste (K tonnes) | 47,769 | 48,195 | 32,177 | |||||||||
Total Material (K tonnes) | 58,260 | 56,150 | 41,552 |
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50 minutes residence time
30 deg. C feed temperature pre heat recovery
90 deg. C max feed temperature post heat recovery
Oxygen utilisation = 90%
Quench water added to compartments 1a, 1b and 1c = 7 m3/h/autoclave
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§ | The heat recovery circuit commissioned in the third quarter of 2001 enables the pressure oxidation circuit to treat a lower grade of sulphide in ore feed. | ||
§ | Flotation plant capacity provides an opportunity to increase the sulphide grade of stockpile ore. | ||
§ | Blending of stockpile ores combined with operation of the flotation circuit will enable feeding of the autoclave circuit at the optimum sulphur level. |
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Symbol | Production Parameter | Unit | Value | |||
A | Estimated Stock Pile Material | Mtonnes | 137 | |||
B | Plant Annual Throughput | Mtonnes | 7.2 | |||
(calculation = A/B) | years | 19 | ||||
C | Gold Grade – average | Au g/t | 2.03 | |||
D | Plant Recovery | % | 77.5% | |||
E | Conversion | grams to ounces | 31.1035 |
(calculation = B*C*D/E)]
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2007 | 2006 | 2005 | ||||||||||
Kina millions | 55.4 | 42.1 | 28.1 | |||||||||
US$ millions equivalent | 20.9 | 14.8 | 9.5 |
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1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | |||||||||||||||||||||||||||||||
LTI | 12 | 11 | 11 | 16 | 11 | 12 | 13 | 12 | 5 | 2 | ||||||||||||||||||||||||||||||
LTIFR | 2.05 | 1.70 | 1.75 | 2.30 | 1.80 | 1.50 | 1.50 | 1.53 | 0.53 | 0.18 |
(1855 - -1917), supporting the resurgence of gold mining within the Ballarat region.
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2007 | 2006 | 2005 | ||||||||||
Development (m) | 3280 | 2890 | 1861 | |||||||||
Total Ore (tonnes) | 24,998 | 20,897 | 9,880 | |||||||||
Total Ore (g Au/t) | 3.32 | 3.32 | 2.23 | |||||||||
Total Waste (tonnes) | 217,300 | 191,463 | 123,291 | |||||||||
Total Material (tonnes) | 242,298 | 212,360 | 133,171 |
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Contained | ||||||||||||||||
Reserve | Tonnes | Average grade | Ounces | |||||||||||||
Category | (In millions) | (g Au/t) | (millions) | |||||||||||||
Un-mined Ore | Proven | 0 | 0 | 0 | ||||||||||||
Probable | 200.4 | 2.87 | 18.5 | |||||||||||||
Economic Stockpiled Ore* | Proven | 53.8 | 2.52 | 4.4 | ||||||||||||
Total Reserves | 254.2 | 2.80 | 22.9 | |||||||||||||
* Economic Stockpiled Ore | ||||||||||||||||
High Grade | 4.5 | 3.61 | 0.5 | |||||||||||||
Low Grade | 49.3 | 2.42 | 3.8 | |||||||||||||
Total Stockpiled | Proven | 53.8 | 2.52 | 4.4 |
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Fine Grained Gold (0.0 to 0.3 mm) | 9 | % | ||
Coarse Grained Gold (0.3 to 1.2 mm) | 41 | % | ||
Very Coarse Gold (>1.2 mm) | 50 | % |
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• | Ballarat East |
• | Ballarat West |
• | Ballarat South |
• | Berringa |
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• | Increase gold production by an average 240,000 ounces per year over the life of the operation. | ||
• | Lift output over the period from 2011 to 2021 by 2.35 million ounces to more than 10 million ounces. | ||
• | Increase gold production by in excess of 1 million ounces over the life of the operation, due to improved processing efficiencies. | ||
• | Provide potential for additional reserves to be established due to the improved project economics, extending the life of the operation. | ||
• | Reduce costs of production by approximately $80 per ounce, following commissioning in 2011. | ||
• | Boost operating cash flows and deliver a significant uplift to net present value. | ||
• | Create operational flexibility to ensure more reliable and consistent production. | ||
• | Involve capital investment of $696 million, to lift process plant capacity to match the current mining rate. |
2008 | 2009 | 2010 | 2011 | Total | ||||||||||||||||||||
Total Cost | $ | M | 138 | 268 | 188 | 102 | 696 |
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• | By maximising direct feed ore to the autoclaves, the proportion of ore fed through the flotation circuit is reduced, thereby increasing gold recoveries and consequently total gold production. | ||
• | By accelerating processing rates, bringing forward production and maximising value. Higher annual production levels will produce significant economies of scale, leading to a reduction in unit costs of approximately US$80 per ounce. |
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• | obtaining approvals from applicable regulatory bodies such as the Foreign Investment Review Board, the Australian Securities and Investments Commission, the ASX, POMSoX, PNGSC and the TSX as appropriate; | ||
• | obtaining exchange control approval from the Bank of Papua New Guinea; | ||
• | if required under decree 96-634 of August 9, 1996 determining the terms of application of Law 95-553 of July 18, 1995 being the Mining Code of the Republic of the Ivory Coast, obtaining the authorisation of theAdministration des Minesto implement the Scheme; | ||
• | obtaining Equigold shareholder approval of the Scheme at the scheme meeting by the requisite majorities under the Corporations Act;and | ||
• | obtaining Court approval of the Scheme in accordance with section 411(4)(b) of theCorporations Act. |
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Equigold’s total gold inventory currently stands at approximately 1.9 million ounces in reserves.
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Application date for | ||||||||||
Application date | Impact on Consolidated Entity's | the Consolidated | ||||||||
Reference | Title | Summary | of standard | financial report | Entity | |||||
IFRS 7 | Financial Instruments: Disclosures | New standard replacing the disclosure requirements | January 1, 2007 | IFRS 7 is a disclosure standard so has no direct impact on the measurement and recognition criteria relating to amounts included in the Consolidated Entity’s financial statements, but does result in changes to the financial instrument disclosures included in the Consolidated Entity’s annual report. | January 1, 2007 | |||||
IFRS 8 | Operating Segments | New standard | January 1, 2009 | IFRS 8 is a disclosure standard so has no direct impact on the measurement and recognition criteria relating to amounts included in the Consolidated Entity’s financial statements, but does result in changes to the segment reporting disclosures included in the Consolidated Entity’s financial report. (Refer to Note 6) | January 1, 2007 | |||||
IAS 1 | Presentation of Financial Statements | Added disclosures about an entity’s capital and changed the presentation and format of financial statements. | January 1, 2007 | IAS 1 is a disclosure standard so has no direct impact on the measurement and recognition criteria relating to amounts included in the Group’s financial statements, but may result in changes to capital disclosures included in the Group’s annual report, and presentation and format of financial statements. | January 1, 2007 |
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Application date for | ||||||||||
Application date | Preliminary assessment on the impact of the | the Consolidated | ||||||||
Reference | Title | Summary | of standard | Consolidated Entity’s financial report | Entity | |||||
IAS 23 | Borrowing Costs | Amended to require all borrowing costs associated with a qualifying asset to be capitalised. | January 1, 2009 | This is consistent with the Consolidated Entity’s existing accounting policy for capitalisation of interest and financing costs and is not expected to have any additional impact. | January 1, 2009 | |||||
IFRIC 11 | IFRS 2 — Treasury Share Transactions | This interpretation deals with accounting for share based payments issued between two entities in the same group and whether certain share based payments should be accounted for as equity-settled or cash-settled awards. | March 1, 2007 | This is consistent with the Consolidated Entity’s existing accounting policy for share based payments and is not expected to have any additional impact. | January 1, 2008 | |||||
IFRIC 12 | Service Concession Arrangements | This interpretation deals with accounting for publicly owned infrastructure constructed, operated, and maintained by the private sector. | January 1, 2008 | Not applicable | Not applicable | |||||
IFRIC 13 | Customer Loyalty Programmes | This interpretation deals with sales of goods with customer award credits should be accounted as multiple-element transactions. | July 1, 2008 | Not applicable | Not applicable | |||||
IFRIC 14 | IAS 19 — The | This | January 1, 2008 | Not applicable | Not applicable | |||||
Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction | interpretation provides Clarification of IAS 19 regarding future contributions and minimum funding requirements of defined benefit plans. |
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$m | ||||||||||||||||
Note | 2007 | 2006 | 2005 | |||||||||||||
Revenue | 7 | 498.4 | 386.0 | 264.0 | ||||||||||||
Cost of sales | 9 | (261.3 | ) | (211.0 | ) | (196.4 | ) | |||||||||
Gross profit from mining activities | 237.1 | 175.0 | 67.6 | |||||||||||||
Corporate expense | (25.3 | ) | (12.1 | ) | (1.9 | ) | ||||||||||
Project studies | (7.5 | ) | (0.8 | ) | — | |||||||||||
Exploration expense | (8.4 | ) | (5.9 | ) | (6.0 | ) | ||||||||||
Operating profit before other income / (expense) | 195.9 | 156.2 | 59.7 | |||||||||||||
Other income / (expense): | ||||||||||||||||
Hedging loss | 10 | (97.2 | ) | (78.3 | ) | (44.1 | ) | |||||||||
Other expenses | 11 | (13.8 | ) | — | (2.5 | ) | ||||||||||
Operating profit before finance costs | 84.9 | 77.9 | 13.1 | |||||||||||||
Financial income | 12 | 10.9 | 4.2 | 6.2 | ||||||||||||
Financial expenses | 12 | (131.6 | ) | (6.2 | ) | (3.6 | ) | |||||||||
Profit / (loss) before tax | (35.8 | ) | 75.9 | 15.7 | ||||||||||||
Income tax benefit / (expense) | 13 | 11.7 | (22.1 | ) | (5.9 | ) | ||||||||||
Net profit / (loss) after tax | (24.1 | ) | 53.8 | 9.8 | ||||||||||||
Other comprehensive income | ||||||||||||||||
Exchange difference on translation of foreign operations | 27 | 42.6 | — | — | ||||||||||||
Cash flow hedges | 27 | 38.7 | (50.8 | ) | (72.4 | ) | ||||||||||
Share based payments | 27 | 2.9 | 5.5 | — | ||||||||||||
Net change in fair value of available for sale financial assets | 27 | 1.2 | — | — | ||||||||||||
Income tax on other comprehensive income | 13 | (4.7 | ) | 20.3 | 8.9 | |||||||||||
Other comprehensive income for the period net of tax | 80.7 | (25.0 | ) | (63.5 | ) | |||||||||||
Total comprehensive income | 56.6 | 28.8 | (53.7 | ) | ||||||||||||
Earnings / (loss) per share | 37 | |||||||||||||||
- Basic (cents/share) | (1.4 | ) | 4.2 | 0.8 | ||||||||||||
- Diluted (cents/share) | (1.4 | ) | 4.2 | 0.8 |
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• | short term changes in the mine plan and scheduling within the period; | ||
• | changes in the reserves and strip ratio with a change in cut-off grade policy; and | ||
• | changes in pit wall design and operating strategies. |
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Gross pre-tax | Net post-tax | |||||||||||
Non-cash | hedging | Non-cash | hedging | |||||||||
loss | Tax effect | loss | ||||||||||
Designation Year | $m | $m | $m | |||||||||
2008 | 76.7 | (23.0 | ) | 53.7 | ||||||||
2009 | 102.3 | (30.7 | ) | 71.6 | ||||||||
2010 | 81.9 | (24.6 | ) | 57.3 | ||||||||
2011 | 44.2 | (13.2 | ) | 31.0 | ||||||||
2012 | 5.8 | (1.7 | ) | 4.1 | ||||||||
2013 | 6.0 | (1.8 | ) | 4.2 | ||||||||
316.9 | (95.0 | ) | 221.9 | |||||||||
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• | Ballarat operation infrastructure and development expenditure of $58 million | ||
• | Lihir operation flotation plant of $62 million | ||
• | Lihir operation geothermal power plant of $17 million |
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1. | On 8 March 2007 and under the Scheme of Arrangement for the merger with Ballarat Goldfields Pty Ltd, the Company issued 112.0m shares with a value of $316.5m to the shareholder of Ballarat Goldfields. The Ballarat Goldfields shareholders received five shares in the Company for every 54 Ballarat Goldfields shares held. On 7 September 2007, the status of Ballarat Goldfields was changed from a no liability company to a proprietary company. | |
2. | On 17 April, 2007, the Company announced a 1 for 3 accelerated pro-rata entitlement offer at an issue price of A$2.30 per share and a placement of shares to institutional investors at A$2.80 per share. As a result, 508.3m new shares were issued, resulting in cash proceeds of $989.0m. The proceeds were applied to repayment of the Company’s debt facilities ($85.6m) and gold loan ($333.4m) and close out of the gold hedge book ($368.5m). The surplus proceeds are being used to fund the development of the Ballarat East Project and are available for other general corporate purposes including facilitating the proposed expansion of production at Lihir Island |
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(in US$ millions) | 2007 | 2006 | 2005 | |||||||||
Lihir | 156.5 | 185.9 | 99.5 | |||||||||
Ballarat | 65.9 | — | — | |||||||||
Corporate | 0.3 | 1.8 | — | |||||||||
222.7 | 187.7 | 99.5 | ||||||||||
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Later than 1 year | Later than 2 years | |||||||||||||||||||
but not later than 2 | but not later than 5 | |||||||||||||||||||
Total | Less than 1 year | years | years | More than 5 years | ||||||||||||||||
$ m | $m | $m | $m | $m | ||||||||||||||||
Capital (Finance) Lease Obligations | 1.0 | 0.3 | 0.4 | 0.3 | — | |||||||||||||||
Operating Lease Obligations | 1.9 | 0.7 | 0.5 | 0.7 | — | |||||||||||||||
Capital expenditure commitments(i) | 9.0 | 9.0 | — | — | — | |||||||||||||||
Purchase obligations (ii) | 25.2 | 25.2 | — | — | — | |||||||||||||||
Other Liabilities (iii) | 28.7 | 13.5 | — | 1.4 | 13.8 | |||||||||||||||
Total | 65.8 | 48.7 | 0.9 | 2.4 | 13.8 |
(i) | The major items of capital commitment included in Purchase Obligations are: Geothermal and de-watering well drilling Lihir Island ($1.6 million), mess facility Lihir Island ($0.7 million), Kapit village relocation Lihir Island ($0.6 million), other items of expenditure Lihir Island ($4.4 million), completion of stage 2 processing plant and surface infrastructure project Ballarat operation ($1.7 million). | |
(ii) | Purchase obligations consist of trade creditors of $23.9 million and employee service related liabilities payable of $1.3 million. | |
(iii) | Other liabilities represents $28.7 consisting of current and non-current provisions on the consolidated balance sheet which represents certain employee, rehabilitation and other provisions. |
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Chairman, Independent Director
Managing Director and Chief Executive Officer
Independent Director
Independent Director
Independent Director
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Independent Director
Independent Director
Independent Director
Name | Position with the Company | Year Joined | ||||
Arthur Hood | Managing Director | 2005 | ||||
Philip Baker | Chief Financial Officer | 2007 | ||||
Nicholas Currey | General Manager, Sustainable Development | 2008 | ||||
Joseph Dowling | General Manager Corporate Affairs | 2005 | ||||
Murray Eagle | General Manager External Affairs & Sustainable Development | 2005 | ||||
Noel Foley | Executive General Manager | 2006 | ||||
Graham Folland | General Manager Corporate Development | 2006 | ||||
Stuart MacKenzie | Group Secretary and General Counsel | 2006 | ||||
Craig Thomas | General Manager, Ballarat Goldfields Operations | 2007 | ||||
Ron Yung | General Manager Organization Performance | 2006 |
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a | Principles used to determine the nature and amount of remuneration | |
b | Details of remuneration | |
c | Service agreements | |
d | Share-based compensation |
• | competitive in structure and quantum with comparator organisations so as to attract, retain and motivate appropriately qualified and experienced executives | |
• | acceptability to shareholders | |
• | performance linkage / alignment of executive compensation | |
• | transparency | |
• | capital management. |
• | has company profit as a core component of plan design | |
• | focuses on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering constant return on assets as well as focusing the executive on key non-financial drivers of value | |
• | attracts and retains high calibre executives. |
• | rewards capability and experience | |
• | reflects competitive reward for contribution to growth in shareholder wealth | |
• | provides a clear structure for earning rewards. |
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2007 | 2006 | |||||||
$ | $ | |||||||
Dr Ross Garnaut(2) | 255,000 | 210,000 | ||||||
Mr Bruce Brook(2) | 107,350 | 70,000 | ||||||
Dr Peter Cassidy(2) | 107,500 | 70,000 | ||||||
Dr Michael Etheridge (appointed 20 March 2007) | 71,735 | — | ||||||
Mrs Winifred Kamit(1) | 109,850 | 70,000 | ||||||
Mr Geoff Loudon(1) | 100,000 | 70,000 | ||||||
Mr Alister Maitland (appointed 20 March 2007)(2) | 71,735 | — | ||||||
Mr John O’Reilly (retired 31 December 2006)(2) | — | 70,000 |
Audit | Remuneration | Safety and | Sustainable | Total | ||||||||||||||||||||
Committee | and Nomination | Technical | Development | Directors | ||||||||||||||||||||
Base fees | fees | Committee fees | Committee fees | Committee fees | fees | |||||||||||||||||||
Dr Ross Garnaut | 255,000 | — | — | — | — | 255,000 | ||||||||||||||||||
Mr Bruce Brook | 85,000 | 20,000 | — | 2,350 | — | 107,350 | ||||||||||||||||||
Dr Peter Cassidy | 85,000 | — | 7,500 | 15,000 | — | 107,500 | ||||||||||||||||||
Dr Michael Etheridge | 66,585 | — | — | 5,150 | — | 71,735 | ||||||||||||||||||
Mrs Winifred Kamit | 85,000 | 2,350 | 7,500 | — | 15,000 | 109,850 | ||||||||||||||||||
Mr Geoff Loudon | 85,000 | — | — | 7,500 | 7,500 | 100,000 | ||||||||||||||||||
Mr Alister Maitland | 66,585 | 5,150 | — | — | — | 71,735 |
Audit Committee — Chairman | Mr Bruce Brook | |
Remuneration and Nomination Committee — Chairman | Dr Ross Garnaut | |
Safety and Technical Committee — Chairman | Dr Peter Cassidy | |
Sustainable Development Committee — Chairperson | Mrs Winifred Kamit |
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(1) | Fees are paid to Mrs Kamit and Mr Loudon in PNG Kina. Mr Loudon’s fees are donated to the Port Moresby City Mission | |
(2) | Fees are paid to Dr Garnaut, Mr Brook, Dr Cassidy, Dr Etheridge and Mr Maitland in Australian dollars equivalent to the amount reported. Fees were paid to Mr O’Reilly in 2006 in Australian dollars | |
(3) | The services of Dr Garnaut are provided through Dr Garnaut’s family company, Maccullochella Pty Limited |
• | base package including superannuation and benefits | |
• | short-term performance incentives, and | |
• | long-term incentives through participation in the Lihir Executive Share Plan (the “LESP”). |
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STI Target Level | Managing Director | Key management personnel | ||
Attainment of Target | 50% of Base package (before tax) | 35% of Base package (before tax) |
• | Phil Baker-Chief Financial Officer (appointed January 21, 2007) | |
• | Joe Dowling — General Manager Corporate Affairs | |
• | Murray Eagle — General Manager External Affairs & Sustainable Development (retired January 16, 2008) | |
• | Noel Foley — Executive General Manager, Operations | |
• | Graham Folland — General Manager Corporate Development | |
• | Stuart MacKenzie — Group Secretary and General Counsel | |
• | Wojciech Ozga — General Manager, Ballarat Operation (appointed March 8, 2007, retired January 31, 2008) | |
• | Ron Yung — General Manager Organisation Performance | |
• | Nick Currey — General Manager Sustainable Development (appointed January 1, 2008) | |
• | Craig Thomas — General Manager, Ballarat Operation (appointed February 1, 2008) | |
• | Richard Laufmann — Executive General Manager Australian Operations and Business Development (appointed March 8, 2007, resigned June 8, 2007) | |
• | Paul Fulton — Chief Financial Officer (resigned February 22, 2007) |
• | Murray Eagle — General Manager External Affairs & Sustainable Development (retired January 16, 2008) | |
• | Noel Foley — Executive General Manager, Operations |
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Long- | Share- | |||||||||||||||||||||||||||||||
term | based | |||||||||||||||||||||||||||||||
2007 | Short-term employee benefits | Post-employment benefits | benefits | payments | ||||||||||||||||||||||||||||
Non | Long | |||||||||||||||||||||||||||||||
Cash salary | Cash | monetary | service | |||||||||||||||||||||||||||||
Name | and fees | bonus | benefits(7) | Superannuation | Other | leave | Share rights | Total | ||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Non-executive directors | ||||||||||||||||||||||||||||||||
Dr Ross Garnaut — Chairman | 255,000 | — | — | — | — | — | — | 255,000 | ||||||||||||||||||||||||
Mr Bruce Brook | 107,350 | — | — | — | — | — | — | 107,350 | ||||||||||||||||||||||||
Dr Peter Cassidy | 107,500 | — | — | — | — | — | — | 107,500 | ||||||||||||||||||||||||
Dr Mike Etheridge(1) | 71,735 | — | — | — | — | — | — | 71,735 | ||||||||||||||||||||||||
Mrs Winifred Kamit | 109,850 | — | — | — | — | — | — | 109,850 | ||||||||||||||||||||||||
Mr Geoff Loudon | 100,000 | — | — | — | — | — | — | 100,000 | ||||||||||||||||||||||||
Mr Alister Maitland(2) | 71,735 | — | — | — | — | — | — | 71,735 | ||||||||||||||||||||||||
Mr John O’Reilly | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Sub-total Non-executive directors | 823,170 | — | — | — | — | — | — | 823,170 | ||||||||||||||||||||||||
Executive directors | ||||||||||||||||||||||||||||||||
Arthur Hood | 1,080,589 | 387,299 | 9,367 | 66,748 | 16,187 | 1,154,882 | 2,715,072 | |||||||||||||||||||||||||
Other key management personnel | ||||||||||||||||||||||||||||||||
Phil Baker(3) | 278,610 | 81,732 | 27,879 | (8) | 26,862 | — | 885 | 103,496 | 519,464 | |||||||||||||||||||||||
Joe Dowling | 195,473 | 46,242 | 11,621 | 20,829 | — | 3,109 | 88,734 | 366,008 | ||||||||||||||||||||||||
Murray Eagle | 200,200 | 97,615 | — | 84,000 | — | — | 36,459 | 418,274 | ||||||||||||||||||||||||
Noel Foley | 245,000 | 99,619 | 4,154 | 84,000 | — | — | 182,372 | 615,145 | ||||||||||||||||||||||||
Graham Folland | 231,530 | 79,455 | 33,888 | (9) | 27,849 | — | 2,198 | 110,395 | 485,315 | |||||||||||||||||||||||
Stuart MacKenzie | 223,358 | 62,507 | 11,126 | 22,159 | — | 1,417 | 83,906 | 404,473 | ||||||||||||||||||||||||
Wojciech Ozga(4) | 172,279 | — | — | 14,565 | 357,865 | (10) | 570 | 68,266 | 613,545 | |||||||||||||||||||||||
Ron Yung | 240,825 | 71,139 | 9,783 | 24,541 | — | 1,601 | 92,271 | 440,160 | ||||||||||||||||||||||||
Paul Fulton(5) | 46,122 | — | — | 4,151 | — | — | — | 50,273 | ||||||||||||||||||||||||
Richard Laufmann(6) | 114,020 | — | — | 48,408 | 484,602 | (11) | — | — | 647,030 | |||||||||||||||||||||||
Total Key management personnel compensation | 3,851,176 | 925,608 | 107,818 | 424,112 | 842,467 | 25,967 | 1,920,781 | 8,097,929 |
(1) | Dr Mike Etheridge commenced as a non-executive director on March 20, 2007 | |
(2) | Mr Alistair Maitland commenced as a non-executive director on March 20, 2007 | |
(3) | Mr Baker commenced employment with the Consolidated Entity on January 21, 2007 (4) Mr Ozga commenced employment with the Consolidated Entity on March 8, 2007 | |
(5) | Mr Fulton ceased employment with the Consolidated Entity on February 23, 2007. Mr Fulton received a termination payment $408,996 in accordance with his employment contract, which was recognised in the previous financial year. | |
(6) | Mr Laufmann commenced employment with the Consolidated Entity on March 8, 2007 and resigned on June 8, 2007. | |
(7) | Non-monetary benefits include car parking, salary continuance, death and total permanent disablement and motor vehicle benefits. | |
(8) | Included in the total non-monetary benefits is a car benefit of $19,866 | |
(9) | Included in the total non-monetary benefits is a car benefit of $25,007 | |
(10) | Includes payment on termination of Ballarat Goldfields employment contract of $357,865 | |
(11) | Includes termination payment of $484,602 |
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Name | Fixed remuneration | At risk -STI | At risk - LTI | |||||||||
2007 | 2007 | 2007 | ||||||||||
Executive directors of Lihir Gold Limited | ||||||||||||
Arthur Hood | 22 | % | 14 | % | 64 | % | ||||||
Other key management personnel of Consolidated Entity | ||||||||||||
Phil Baker | 30 | % | 11 | % | 59 | % | ||||||
Joe Dowling | 30 | % | 11 | % | 59 | % | ||||||
Murray Eagle | 30 | % | 11 | % | 59 | % | ||||||
Noel Foley | 30 | % | 11 | % | 59 | % | ||||||
Graham Folland | 30 | % | 11 | % | 59 | % | ||||||
Richard Laufmann | 58 | % | 21 | % | 21 | % | ||||||
Stuart MacKenzie | 30 | % | 11 | % | 59 | % | ||||||
Wojciech Ozga | 30 | % | 11 | % | 59 | % | ||||||
Ron Yung | 30 | % | 11 | % | 59 | % |
If employment terminated ... | ... the relevant multiple is ... | |
On or after the first anniversary of the commencement date but before the third anniversary of the commencement date (i.e. in years 2 or 3 of employment) | The number of whole months in the period commencing on the day after the date of termination of employment and ending on the fifth anniversary of the commencement date, divided by 24. | |
On or after the third anniversary of the commencement date but before the fifth anniversary of the commencement date (i.e. in years 4 or 5 of employment) | 1 or, if the date of termination of your employment is after the fourth anniversary of the commencement date, the relevant multiple is a fraction, the numerator of which is the number of whole months in the period commencing the day after the date of termination of employment and the denominator of which is 12. |
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Name | Number of share rights granted during the year | Number of share rights vested during the year | ||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Directors of Lihir Gold Limited | ||||||||||||||||
Arthur Hood | 1,535,255 | (1) | 362,263 | 49,208 | 176,071 | |||||||||||
Other key management personnel of the Consolidated Entity | ||||||||||||||||
Phil Baker | 251,786 | — | — | — | ||||||||||||
Joe Dowling | 163,751 | 35,945 | 37,220 | — | ||||||||||||
Murray Eagle | 217,524 | 54,225 | 56,148 | — | ||||||||||||
Noel Foley | 246,481 | 47,926 | 50,148 | — | ||||||||||||
Graham Folland | 207,890 | 41,080 | 42,984 | — | ||||||||||||
Paul Fulton | — | — | — | — | ||||||||||||
Mark Laurie | — | — | — | — | ||||||||||||
Stuart MacKenzie | 181,056 | 13,734 | 14,969 | — | ||||||||||||
Wojciech Ozga | 165,235 | — | — | — | ||||||||||||
Ron Yung | 198,184 | 18,885 | 19,307 | — |
(1) | Subject to approval by shareholders. |
(a) | exercise price: $ nil (2006 — $ nil) | |
(b) | expected volatility: 42% (2006 - 43%) | |
(c) | risk-free interest rate: 6.12% (2006 — 6.05%). | |
(d) | expected life of right (years): 10 years | |
(e) | weighted average share price at grant date: $3.08 (2006 — $2.07) | |
(f) | expected dividend yield: 0% (2006 — 0%) |
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Name | Date of exercise of share rights | Number share rights exercised during the year | ||||||||||
2007 | 2006 | |||||||||||
Directors of Lihir Gold Limited | ||||||||||||
Arthur Hood | Sep 2007 | 49,208 | 176,071 | |||||||||
Other key management personnel of the Consolidated Entity | ||||||||||||
Phil Baker | — | — | ||||||||||
Joe Dowling | Sep 2007 | 37,220 | — | |||||||||
Murray Eagle | Sep 2007 | 4,634 | — | |||||||||
Noel Foley | Sep 2007 | 50,148 | — | |||||||||
Graham Folland | Sep 2007 | 42,984 | — | |||||||||
Stuart MacKenzie | Sep 2007 | 14,969 | — | |||||||||
Wojeich Ozga | — | — | ||||||||||
Ron Yung | Sep 2007 | 19,307 | — |
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• | setting the Company’s values and standards of conduct; | |
• | safeguarding the reputation of the Company; | |
• | providing leadership of the Company within a framework of prudent and effective controls which enable risks to be assessed and managed; | |
• | setting the Company’s direction, strategies and financial objectives; | |
• | ensuring that the performance of management, and the Board itself, is regularly assessed and monitored; | |
• | ensuring monitoring of compliance with regulatory and ethical standards; and | |
• | appointing, terminating and reviewing the performance of the Managing Director. |
• | final approval of corporate strategy and performance objectives, and reserves and financial plans; | |
• | capital management, including capital raisings, and the approval and monitoring of significant capital expenditure; | |
• | monitoring of financial performance, review and approval of significant financial and other reporting; | |
• | assessing the appropriateness and adequacy of, and monitoring compliance with, corporate governance policies and ethical standards; | |
• | evaluating the performance of the senior management team; | |
• | determining the Company’s risk management policies and reviewing and ratifying its risk management and internal control framework, including insurance, corporate security and prudential limits; | |
• | determining the Company’s treasury policies, including gold price hedging, foreign currency and interest rate exposure; and | |
• | the engagement of auditors to review and report to the Board on the Company’s financial results and reporting systems, internal controls and compliance with statutory and regulatory requirements. |
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• | the Board may, in accordance with the Company’s constitution, be comprised of a minimum of five Directors and maximum of twelve; and | |
• | the roles of the Chairman of the Board and of Managing Director should be exercised by different individuals. |
Year Appointed | ||||||
Name | Position | As Director | Term Ends | |||
Ross Garnaut | Chairman of Board, Independent Director | 1995 | ||||
Member of Audit Committee | ||||||
Member of Sustainable Development Committee | ||||||
Chairman of Remuneration and Nomination Committee | ||||||
Geoffrey Loudon | Independent Director | 1995 | ||||
Member of Safety and Technical Committee | ||||||
Member of Sustainable Development Committee | ||||||
Peter Cassidy | Independent Director | 2003 | ||||
Chairman of Safety and Technical Committee | ||||||
Member of Remuneration and Nomination Committee | ||||||
Winifred Kamit | Independent Director | 2004 | ||||
Chair of Sustainable Development CommitteeMember | ||||||
of Remuneration and Nomination Committee | ||||||
Arthur Hood | Managing Director | 2005 | October 1, 2010 | |||
Bruce Brook | Independent Director | 2005 | ||||
Chairman of Audit Committee | ||||||
Michael Etheridge | Independent Director | 2007 | ||||
Member of Safety and Technical Committee | ||||||
Alister Maitland | Independent Director | 2007 | ||||
Member of the Audit Committee |
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• | Audit; | |
• | Remuneration and Nomination; | |
• | Sustainable Development Committee (formally Environmental and Lihir Impact Committee); and | |
• | Safety and Technical. |
Dr Ross Garnaut
Mr Alister Maitland
• | determining the appropriateness of accounting principles and disclosure practices adopted by management and monitoring compliance with applicable accounting standards and other requirements; | |
• | overseeing the preparation and audit of, and verifying and ensuring the integrity of, the Company’s Financial Statements and reports; | |
• | the appointment, compensation, retention and oversight of the Company’s external auditor or any other public accounting firm engaged for the purpose of performing audit, review or attestation services for the Company; | |
• | reviewing and evaluating the independence, qualifications and performance of the external auditor and managing the relationship between the Company and its external auditor; | |
• | monitoring the adequacy of the Company’s internal financial controls; | |
• | risk management, and compliance systems and processes; | |
• | overseeing the retention, tasking and resourcing of the Company’s internal auditors, monitoring their progress and evaluating their performance; and | |
• | reviewing the financial management of the Company generally and undertaking such other tasks as the Board or the Managing Director may request from time to time. |
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• | requires that no person may play a significant role in managing the audit for more than five out of any seven successive years; | |
• | must approve all non-audit work which may be undertaken by the external auditor and exclude them from undertaking such work where it may give rise to a conflict of interest; | |
• | receives periodic statements, at least annually, from the auditors outlining all work undertaken for the Company, and confirming that the auditor has satisfied all professional regulations relating to auditor independence; | |
• | meets with the external auditor independently of management; | |
• | reviews the performance of external auditors at least annually and is responsible for recommending to the Board their appointment, reappointment or termination; | |
• | reviews the scope of the annual audit plan and approves the scope of the audit services to be provided; | |
• | reviews any engagement fees or terms proposed by the external auditors; | |
• | reviews and discusses with external auditors or management any significant matters, problems, difficulties or any other major issues regarding financial reporting issues; | |
• | considers whether the external auditors provision of non-audit services to the Company and any other relationship between the external auditor and the Company (if any) is compatible with maintaining the independence and objectivity of the external auditor and maintaining the quality of the audit services provided; and | |
• | if applicable, takes appropriate action in response to the external auditors report to satisfy itself of the external auditor’s independence for the purposes of making a recommendation to the Board. |
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Dr Peter Cassidy
Mrs Winifred Kamit
• | reviewing remuneration of Non-Executive Directors, the Managing Director and other senior executives; establishing criteria for membership of the Board and its committees, | |
• | and processes for the identification of suitable candidates; reviewing membership of the Board and its committees; | |
• | nominating members of the Board and its committees; | |
• | formulating policies relating to the retirement of Non-Executive Directors; | |
• | reviewing management succession planning, human resources and remuneration policies for the Company generally; and | |
• | ensuring the Company’s obligations in relation to employee benefits and entitlements, including superannuation, are met. |
Dr Ross Garnaut
Mr Geoff Loudon
• | the interaction between the Company’s activities and the local community, and the ways in which these activities contribute to social and economic development; |
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• | dealings with the local community in relation to land; | |
• | maintaining and improving community health; and | |
• | the impact and associated risks of the Company’s activities on the environment, together with monitoring compliance with the applicable regulatory regime including relevant local and international emission standards and controls. |
Mr Geoff Loudon
Dr Michael Etheridge
• | occupational health and safety standards, policies and issues; | |
• | technical issues associated with the Company’s exploration, mining and processing activities, with reference to the standards set by the Company and the standards and norms of the industry more generally; and | |
• | the status of major capital projects approved by the Board. |
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2007 | 2006 | 2005 | ||||||||||
Lihir Operation | ||||||||||||
Management | 10 | 12 | 14 | |||||||||
Commercial, human resources, towns and site services, community and environment | 455 | 450 | 340 | |||||||||
Mining operations and mine technical | 570 | 642 | 414 | |||||||||
Plant operations and maintenance | 879 | 455 | 359 | |||||||||
Lihir Services Australia — Brisbane | ||||||||||||
LSA | 53 | 28 | ||||||||||
Ballarat Operation | ||||||||||||
Management | 9 | |||||||||||
Commercial, human resources, towns and site services, community and environment | 10 | |||||||||||
Mining operations and mine technical | 83 | |||||||||||
Plant operations and maintenance | — | |||||||||||
Total Company employees | 2,069 | 1,587 | 1,127 | |||||||||
Total contractors (full-time equivalent) | 1,893 | 2,250 | 1,506 | |||||||||
Total | 3,962 | 3,837 | 2,633 |
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Interest held by directors in shares of the Company | ||||
Ross Garnaut | 101,523 | (1) | ||
(Director) | ||||
Arthur Hood | 353,704 | |||
(Managing Director) | ||||
Bruce Brook | 33,334 | (2) | ||
(Director) | ||||
Peter Cassidy | 44,301 | (3) | ||
(Director) | ||||
Michael Etheridge | 61,728 | (4) | ||
(Director) | ||||
Geoffrey Loudon | 143,840 | |||
(Director) | ||||
Winifred Kamit | 2,667 | (5) | ||
(Director) | ||||
Alister Maitland | 30,864 | (6) | ||
(Director) |
Notes: | ||
(1) | Held by Maccullochella Pty Limited of which Dr Garnaut is a director and shareholder | |
(2) | 13,334 of which are held by Eagle’s Rest 156 Pty Limited as trustee of the Brook Family Superannuation Fund and 20,000 of which are held by Ms G D Brook. | |
(3) | 26,667 of which are held by Cassidy Waters Pty Limited as trustee for the Cassidy Superannuation Fund | |
(4) | Held by Tectonex Geoconsultants Pty Ltd as trustee for the Etheridge Superannuation Fund | |
(5) | Held by Kamchild Limited of which Mrs Kamit is a director and shareholder | |
(6) | Held by the Alister Maitland Superannuation Fund. |
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Name of Substantial Shareholder | Relevant interest | Percentage | ||||||
Fidelity Management & Research LLC and Fidelity International Limited | 272,288,439 | 14.30 | ||||||
Nuveen Investments Inc. | 214,819,596 | 11.87 | ||||||
Merrill Lynch & Co, Inc | 146,902,847 | 11.44 | ||||||
Ausbil Dexia Limited | 95,742,786 | 5.02 |
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• | Dr Garnaut was re-appointed as chairman for a three-year period commencing on May 1, 2004, subject to his continuing to hold office as a director and to certain other termination rights set out in the agreement; | |
• | No fees or benefits are payable to Dr Garnaut by reason of his retirement or other termination of office; and | |
• | The Company has agreed to indemnify Dr Garnaut against any liability incurred in defending any proceedings arising from the performance of his duties and responsibilities in which judgment is given in his favour, he is acquitted, or relief is granted to him under the Companies Act. The indemnity does not apply to the extent it would be inconsistent with the Company’s constitution or to the extent the liability is otherwise insured. |
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2007 | 2006 | 2005 | ||||||||||||||
Export sales | $ | M | 492.3 | 324.8 | 238.8 | |||||||||||
Export volume | oz's | 707,339 | 642,531 | 592,225 | ||||||||||||
Export volume as % of total sales volume | % | 99.8 | % | 100.0 | % | 100.0 | % |
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Year | Ordinary Shares | American Depositary Shares | ||||||||||||||
High | Low | High | Low | |||||||||||||
A$ | A$ | $ | $ | |||||||||||||
2003 | 1.83 | 1.25 | 24.17 | 13.99 | ||||||||||||
2004 | 1.59 | 0.90 | 24.20 | 12.58 | ||||||||||||
2005 | 2.35 | 0.99 | 37.01 | 15.30 | ||||||||||||
2006 | 3.64 | 1.98 | 28.37 | * | 11.46 | * | ||||||||||
2007 | 4.42 | 2.74 | 40.95 | 21.70 |
Ordinary Shares | American Depositary Shares | |||||||||
Quarter Ending | High | Low | High | Low | ||||||
A$ | A$ | $ | $ | |||||||
2006 | March 31 | 2.67 | 1.99 | 37.99 | 29.11 | |||||
June 30 | 3.60 | 2.57 | 56.74 | 35.02 | ||||||
September 30 | 3.17 | 2.66 | 49.50 | 39.45 | ||||||
December 31 | 3.24 | 2.73 | 25.19* | 20.11* | ||||||
2007 | March 31 | 3.57 | 2.79 | 28.60* | 21.70* | |||||
June 30 | 3.25 | 2.91 | 27.63 | 24.50 | ||||||
September 30 | 3.94 | 2.74 | 36.03 | 22.29 | ||||||
December 31 | 4.42 | 3.16 | 40.95 | 27.20 | ||||||
2008 | January 31 | 3.99 | 3.00 | 36.27 | 29.96 | |||||
February 29 | 4.35 | 3.38 | 38.82 | 30.02 | ||||||
March 31 | 4.37 | 3.59 | 39.95 | 31.57 |
Ordinary Shares | American Depositary Shares | |||||||||||||||
High | Low | High | Low | |||||||||||||
A$ | A$ | $ | $ | |||||||||||||
October 2007 | 4.42 | 3.89 | 40.95 | 35.10 | ||||||||||||
November 2007 | 4.38 | 3.72 | 40.07 | 33.07 | ||||||||||||
December 2007 | 3.90 | 3.16 | 34.79 | 27.20 | ||||||||||||
January 2008 | 3.99 | 3.00 | 36.27 | 29.96 | ||||||||||||
February 2008 | 4.35 | 3.38 | 38.82 | 30.02 | ||||||||||||
March 2008 | 4.37 | 3.59 | 39.95 | 31.57 |
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• | the acquisition of, or an agreement to acquire, whether contingent or not, assets the value of which is more than half the value of assets of the company before the acquisition; | |
• | the disposal of, or an agreement to dispose of, whether contingent or not, assets of the company the value of which is more than half the value of the assets of the company before the disposal; or | |
• | a transaction which has or is likely to have the effect of the company acquiring rights or interests, or incurring obligations or liabilities, the value of which is more than half the value of the assets of the company before the transaction. |
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• | the power to control the exercise of any right to vote attached to a voting share; | |
• | the power to acquire or dispose of the voting share; or | |
• | having the above powers by virtue of any trust, arrangement, agreement or understanding. |
(i) | reflected changes made under the new Companies Act (for example, the abolition of par value of shares, the increased power for directors to make distributions of money or property to members and the removal of the requirement that a company have specific objects and powers); or | |
(ii) | took advantage of specific provisions of the new Act which allow the Company to take a course of action (for example, to buy back the company’s shares, to indemnify directors or to pay for D&O liability insurance) if expressly permitted to do so by its constitution. |
• | The Company is incorporated and registered in PNG (Number C1-23423) and is a registered foreign company in Australia (ARBN 069 803 998). Under section 17 of the Companies Act, a company has full capacity to carry on or undertake any business or activity, do any act or enter into any transaction, and in respect of these purposes, it has full rights, powers and privileges. Therefore it is not necessary to list the objects and purposes of the Company in its constitution. | |
• | In accordance with clause 17, a director may vote on a proposal, arrangement or contract in which he is materially interested provided that he has complied with the Companies Act, the Official Listing Rules of the ASX and provided the board does not otherwise determine. | |
• | The constitution contains provisions for the remuneration of directors (including reimbursement of expenses), the indemnification of directors in respect of certain liability or for costs incurred in defending or settling any claim or proceedings relating to such liability, and for effecting insurance for directors to the extent permitted under the Act. These are general powers of the Company which may in the normal course be exercised by a resolution of the Board. An interested director who has declared his or her interest would be entitled to vote on any such resolution unless the board has determined that the director should not exercise any power in relation to the matter. The interested director is not entitled to vote on a resolution to make that preliminary determination. | |
• | There are no specific provisions relating to borrowing powers in the constitution. Clause 20.1 provides that the Board has all necessary power for managing, and for directing and supervising the management of, the business and affairs of the Company to the exclusion of the Shareholders and in accordance with clause 21.9 every resolution of the board is decided by a majority of votes. Therefore, the borrowing by the Company is determined by a majority decision of the Board. | |
• | An exercise of the borrowing power may in certain circumstances be subject to the provisions of the Companies Act (section 110) requiring shareholder approval for major transactions. | |
• | There are no provisions for retirement or non-retirement of directors under an age limit in the constitution. | |
• | Clause 15.5 provides that a director of the Company need not be a shareholder. | |
• | Clause 10A.2(b) provides that Class B shares have no entitlement to dividends. | |
• | Clause 24.1 provides that the Board may declare distributions to the shareholders (other than Class B shareholders) including declaring the property to constitute the distribution and the time of the distribution. Shareholder approval is not required for a distribution. Clause 24.3 provides that where the Board has declared a dividend the obligation of the Company to make the distribution only arises when the Board fixes the time for distribution and that time has arrived. |
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Clause 24.8 provides that each dividend in respect of each share must be distributed according to the amount paid up on that share save to the extent that the terms of issue of a share provide otherwise. The Company does not have any partly paid shares on issue. | ||
• | Clause 24.18 provides that all dividends declared but unclaimed may (in the case of dividends not to be distributed as money) be realized into money and (in any case) be invested for the benefit of the Company until claimed or until required to be dealt with under any applicable law dealing with unclaimed money. | |
• | Clause 5.6 provides that if a call in relation to a share is due and payable and not paid, the shareholder has no right to receive any dividends and has no right to vote. | |
• | Clause 10A.2(a) provides that the Class B shareholders do not have any voting rights. | |
• | Clause 13.2 provides that each shareholder who is entitle to vote on a resolution (where not disqualified from voting pursuant to the Listing Rules or the Act) has one vote on voting by voice or show of hands, and on a poll he has the number of votes equal to the number of fully paid shares held by that person. | |
• | Under clause 15.3, one third of the directors (excluding the managing director) retire by rotation each year and are eligible for re-election. | |
• | Clause 27.3 provides that after distribution of assets to repay paid up capital any surplus assets will be distributed to the shareholders in proportion to the amount paid up by the shareholder on each share, save to the extent that the terms of issue of a share provide otherwise. | |
• | Clause 10A.2(d) provides that the Class B shares are redeemable at the option of the Company for consideration of K100 per million (or part thereof) of those shares. | |
• | Clause 2.6(b) provides that the Company is authorized to redeem any redeemable shares subject to the provisions of the Listing Rules and the securities clearing house business rules of Australia. | |
• | There are no provisions in the constitution in relation to sinking funds. | |
• | Clause 5 provides that the Board may make calls on a shareholder in respect of any or all of the amount unpaid on the share unless the terms of issue make that payment payable at a fixed time. The constitution does not expose the shareholders to any liability to further capital calls by the Company. | |
• | There are no provisions discriminating against any existing or prospective holder of such securities as a result of such shareholder owning a substantial number of shares in the constitution. | |
• | Under the Companies Act, any provision of the constitution can be altered by special resolution of the shareholders requiring a 75% majority vote of those attending and voting. | |
• | Clause 8.2 provides that where the Company by ordinary shareholders’ resolution consolidates, divides or sub-divides its shares, the Company may also by special resolution determine that, as between the shares resulting from the consolidation, division or sub-division, one or more of those shares has some preference or special advantage as regards dividends, capital, voting or otherwise over or compared with the other shares. | |
• | Clause 8.3 provides that if the shares are divided into different classes of shares, the rights attached to any class of shares may only be varied or abrogated with either the written consent of 75% of the shareholders of that class, or, sanction of a special resolution passed at a separate meeting of that class of shareholders. | |
• | Clause 8.4 provides that the board may do anything to give effect to any resolution authorizing or effecting the alteration of the share capital of the Company, the variation or abrogation of rights attaching to any class of shares, or to adjust the rights of all parties. | |
• | Clause 11.3 provides that the board may convene a special meeting of the Company at any time. Alternatively, clause 11.4 provides that the shareholders may requisition the holding of a special meeting as provided by section 102(b) of the Companies Act, which requires a written request of shareholders holding shares carrying not less than 5% of the voting rights. |
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• | Clause 11.2 provides that the Company must hold an annual general meeting in accordance with the Companies Act, which must be held not later than 15 months after the previous annual general meeting. | |
• | Fourteen days’ written notice of the meeting must be sent to the shareholders, directors and auditor of the Company, stating the nature of the business, the text of any special resolution and, if required by the Official Listing Rules of the ASX, include a form of proxy. | |
• | All shareholders (including Class B shareholders) may attend a meeting of shareholders either in person, by proxy, by attorney or (in the case of a shareholder which is a body corporate) by a representative. | |
• | Clause 12.2 provides that no business may be transacted by a meeting of shareholders unless a quorum of three is present. Clause 12.3 provides that, where a quorum is not present within 30 minutes after the time appointed for the meeting, (in the case of a meeting requisitioned by shareholders), the meeting is dissolved, or in the case of any other meeting, it is adjourned to the same time and the same place the following week, and if there is not a quorum within 30 minutes of the appointed time of that meeting, it is dissolved. | |
In 1995, the Company was granted an exemption with respect to the quorum requirement under NASDAQ Rule 4350(f), which requires each issuer to provide for a quorum as specified in its by-laws for any meeting of the holders of common stock, which shall in no case be less than 33 1/3% of the outstanding shares of the Company’s common voting stock. The Company complied with the quorum requirements set forth in the previous paragraph. | ||
• | There are no limitations on rights to own securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights on the securities imposed by foreign law, or by the charter or other constituent document of the Company in the constitution. | |
• | There are no provisions in the constitution that would have an effect of delaying, deferring or preventing a change in control of the Company, and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company (or any of its subsidiaries). | |
• | There are no provisions in the constitution governing the ownership threshold above which shareholder ownership must be disclosed. | |
• | The Company is incorporated, and has its principal activities, in PNG. As such it is subject to the Companies Act, the Securities Act of PNG and the Takeovers Code under the Securities Act of PNG. The general effect of this legislation is referred to elsewhere in this Annual Report. | |
• | In relation to an increase in capital by the issue of new shares, clause 2.1 provides that this power is conferred on the board of directors subject to the listing rules of any applicable stock exchange (namely the Australian Securities Exchange, Port Moresby Stock Exchange and the Nasdaq Stock Exchange). The conditions in this regard are no more stringent than is required by law. There are no pre-emptive rights of existing shareholders. |
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• | previous arrangements under which management services were provided by the Rio Tinto group to the Company were terminated; | ||
• | the Company acquired all of the shares of LMC (which had been a wholly owned subsidiary of the Rio Tinto group used in connection with the provision of management services) with consideration consisting of a nominal sum, together with transfer of the cash holdings, accrued accounts receivable and net income tax credits receivable at that date; | ||
• | the Rio Tinto Group agreed to provide, at the Company’s option, certain defined technical and procurement services to the Company on certain commercial terms for a term of up to two years; and | ||
• | the Company granted certain releases and indemnities to the Rio Tinto Group in connection with the termination of the management agreements. |
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• | to construct the mine and operate in accordance with the approved proposal for development (including the environmental plan); | |
• | not to incur debt in violation of certain coverage tests; | |
• | to convert its foreign currency revenues into Kina, subject to certain exceptions; | |
• | not to keep gold in inventory for a period greater than three months without placing in its Kina bank account an amount equivalent to the cash value of such gold; | |
• | to comply with PNG Government notices forbidding certain sales of gold; | |
• | to comply with its various obligations to hire PNG employees or suppliers or contractors; | |
• | not to suspend its operations other than as permitted by the Mining Development Contract; and | |
• | to comply in all material respects with the environment plan (see Item 4. “Information on the Company — D. Property, Plant and Equipment — Environmental Considerations — Environmental Plan”). |
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• | MRDC and LMC agreed to each contribute K3,532,759 and $2,635,000 to MRL; and | ||
• | MRL agreed to sell down a proportion of its shareholding in the Company in two separate tranches and to invest the portion of the proceeds remaining, after meeting current commitments to the EIB, to enable it to meet future financing commitments to the EIB. |
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• | obtaining approvals from applicable regulatory bodies such as the Foreign Investment Review Board, the Australian Securities and Investments Commission, the ASX, POMSoX, NASDAQ, SEC, PNGSC and the TSX as appropriate; | ||
• | obtaining exchange control approval from the Bank of Papua New Guinea; | ||
• | if required under decree 96-634 of August 9, 1996 determining the terms of application of Law 95-553 of July 18, 1995 being the Mining Code of the Republic of the Ivory Coast, obtaining the authorisation of theAdministration des Minesto implement the Scheme; | ||
• | obtaining Equigold shareholder approval of the Scheme at the scheme meeting by the requisite majorities under theCorporations Act;and | ||
• | obtaining Court approval of the Scheme in accordance with section 411(4)(b) of theCorporations Act. |
• | A Deed Poll in favour of each person registered as a holder of fully paid ordinary shares in Equigold as at the record date. Pursuant to the Deed Poll, in consideration for the transfer to LAH of each Equigold share held by the shareholders of Equigold, the Company agrees, subject to the Scheme becoming effective, to provide to each shareholder of Equigold 33 shares in the Company to be allotted and issued for each parcel of 25 Equigold shares; and | ||
• | A Scheme of Arrangement whereby Equigold agrees to the transfer of its shares to the Company’s wholly owned subsidiary so that each shareholder of Equigold receives 33 shares in the Company for each parcel of 25 Equigold shares. |
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• | a Gold Facility of up to 480,000 ounces of gold; and | |
• | a revolving credit facility of $50 million (“RCF”). |
• | To repay the original Syndicated Facility agreement; | ||
• | To assist in funding the expansion of the Company’s gold production by approximately 140,000 ounces per year on average through the addition of a 3 million ton per annum flotation processing facility; and | ||
• | To finance a restructuring of the Company’s hedge book. |
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• | a dealer in securities; | |
• | a trader in securities that elects to use a mark-to-market method of accounting for securities holdings; | |
• | a tax-exempt organization; | |
• | a life insurance company; | |
• | a person liable for alternative minimum tax; | |
• | a person that actually or constructively owns 10% or more of our voting stock; | |
• | a person that holds shares or ADSs as part of a straddle or a hedging or conversion transaction; or | |
• | a person whose functional currency is not the U.S. dollar. |
• | a citizen or resident of the United States; | |
• | a domestic corporation; | |
• | an estate whose income is subject to United States federal income tax regardless of its source; or | |
• | a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust. |
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Distributions of additional shares to you with respect to shares or ADSs that are made as part of a pro rata distribution to all of our shareholders generally will not be subject to United States federal income tax.
• | is domiciled in PNG, unless the person’s permanent place of abode is outside PNG; or | ||
• | has been in PNG for more than one half of the year of income, unless that person has a usual place of abode outside PNG and does not intend to take up residence in PNG. |
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• | if transferred through a stock broker registered to operate on the Port Moresby Stock Exchange, the transfer is exempt from stamp duty; | ||
• | otherwise at the rate of 1% of the value of the securities, payable by the purchaser or transferee. |
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• | full fair and accurate timely disclosure in all reports and documents including all public communications; | ||
• | commitment to a work environment where the health, safety and well-being of employees, contractors, visitors and other parties affected by the Company’s operations are paramount; | ||
• | compliance with all laws, regulations and other requirements relating to all aspects of business and personal conduct within PNG and the countries with which the Company interacts; | ||
• | integrity, honesty, transparency and respect in all interactions (whether internal or with groups outside the Company) including with Lihirian and other representative groups in relation to issues important to the community; | ||
• | excellence in the management of environmental responsibilities to ensure minimisation of any adverse effects on the environment or impact on the local community; | ||
• | adoption of the highest standards of business administration, accountability and corporate governance, including the ethical use of all Company resources, funds, equipment, information and time; | ||
• | fairness, within the framework of commitments to local community groups, to potential and existing employees in all areas of recruitment, training and administration of employee benefits; | ||
• | initiative and personal commitment by all employees, contractors and agents working on behalf of the Company, to the highest standards of work performance and the effective achievement of Company objectives; and | ||
• | accountability and willingness to take responsibility. |
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(a) | review the performance of the external auditors at least annually and be responsible for recommending to the Board their appointment, re-appointment or termination; | |
(b) | review the scope of the annual audit program, or audit plan and approve the scope of the audit services to be provided; | |
(c) | review any engagement fees or terms proposed by the external auditors; | |
(d) | consider whether the external auditor’s provision of non-audit services to the Company and any other relationship between the external auditor and the Company (if any) is compatible with maintaining the independence and objectivity of the external auditor and maintaining the quality of the audit services provided; and | |
(e) | if applicable, take appropriate action in response to the external auditor’s report to satisfy itself of the external auditor’s independence for the purposes of making a recommendation to the Board. |
2007 Fees | 2006 Fees | 2005 Fees | ||||||||||
Services provided | $000 | $000 | $000 | |||||||||
Audit fees | 685 | 455 | 354 | |||||||||
Audit-related fees | 642 | 112 | 111 | |||||||||
Tax fees | 54 | 79 | 129 |
• | comfort letters; | ||
• | statutory audits; | ||
• | attest services; | ||
• | consents; and | ||
• | assistance with and review of documents filed with the SEC. |
• | employee benefit plan audits; | ||
• | due diligence related to mergers and acquisitions; | ||
• | accounting assistance and audits in connection with proposed or consummated acquisitions; | ||
• | internal control reviews; and | ||
• | consultations concerning financial accounting and reporting standards. |
• | tax compliance services, including the preparation of original and amended tax returns; | ||
• | tax consultations, such as assistance and representation in connection with tax audits and appeals, tax advice related to mergers and acquisitions, employee benefit plans and requests for rulings or technical advice from taxing authorities; and | ||
• | tax planning services. |
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“Alteration” | Change in the mineral composition of a rock | |
“Anhydrite” | Mineral form of calcium sulfate | |
“Argillic alteration” | Alteration composed of clay minerals | |
“Arsenopyrite” | A sulfide mineral of iron and arsenic | |
“Autoclave” | Vessel used for chemical reactions at high temperature and pressure; for example, to oxidize sulfide ore | |
“Autogenous threshold” | The level of sulfur feed at which the heat generated by oxidation of the sulfides is sufficient to propagate the reaction. | |
“Ball mill” | A mill using metal balls as the grinding medium | |
“Bench” | The horizontal floor along which mining progresses in a pit, also used to describe the horizontal segment between two such floors. The thickness of such a segment is referred to as the “bench height”. As the pit progresses to lower levels, safety benches are left in the walls to catch any rock falling from above. | |
“Brecciation; breccia” | Fracturing of pre-existing rocks by natural forces; a rock type formed in this manner | |
“Bullion” | Gold or silver in bars or ingots | |
“Calcining” | To reduce to a powder or friable state by heat | |
“Caldera” | Large basin shaped, typically circular crater resulting from volcanic activity | |
“Carbon-in-leach” | Method of extracting gold from solution using carbon | |
“Concentrate” | Material that has been processed to increase the content of contained metal or mineral relative to the contained waste | |
“Counter-current decantation” or “CCD” | The clarification and concentration of slurry material by the use of several thickeners in series, with the washing solution flowing in the opposite direction to the slurry | |
“Cut-off grade” | In reserve estimation, the lowest grade of mineralized material that can be economically extracted | |
“Cyanidation” | A standard method of extracting gold and silver from crushed or ground mineralized rock using sodium cyanide | |
“Cyanide leaching” | The extraction of a precious metal from an ore by its dissolution in a cyanide solution | |
“Dilution” | Waste which is commingled with ore in the mining process | |
“Dore” | A mixture of gold and other metals, mostly silver, usually the raw metal produced from a precious metal mine | |
“Electro-winning” | The process of removal of gold from solution by the action of electric currents | |
“Elution” | The process of desorption (taking of gold from carbon) | |
“Epithermal” | A term applied to deposits formed at shallow depths from ascending solutions of moderate temperatures | |
“Exsolution” | To be removed from solution |
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“Feasibility study” | A technical and financial study of a project at sufficient level of accuracy and detail to allow a decision as to whether the project should proceed | |
“Flocculant” | An additive introduced to promote aggregation in a solution. | |
“Flotation” | The process of concentrating ground mineral particles by attaching them to air bubbles in a slurry using chemical reagents and recovering the mineralized froth generated by aeration | |
“Free gold” | Gold not chemically or physically entrapped and hence amenable to relatively simple extraction processes. | |
“Friable” | Said of a rock or mineral that crumbles naturally or is easily broken, pulverized, or reduced to powder, such as soft or poorly cemented sandstone. | |
“Fumaroles” | Vents in a volcanic region from which gases and vapors emanate at high temperatures | |
“GAAP” | Generally accepted accounting principles. | |
“Geochemistry” | The study of the variation of chemical elements in rocks and soils; a method of exploration based on this | |
“Geotechnical” | Pertaining to the engineering properties of rocks and soils | |
“Geothermal” | Pertaining to the heat of the earth’s interior | |
“Grade” | The metal (or mineral) content per unit of rock | |
“Grinding” | Reducing mineralized rock to the consistency of fine sand by crushing the abrading in a rotating steel grinding mill | |
“Gyratory Crusher” | A primary crusher consisting of a vertical spindle, the foot of which is mounted in an eccentric bearing within a conical shell. The top carries a conical crushing head revolving eccentrically in a conical maw. | |
“Hydrological” | Pertaining to the science of hydrology | |
“kPa” | A unit of pressure – an abbreviation for “kilopascals, gauge”. | |
“Joint venture” | An arrangement in which two entities unite to form a new, jointly-owned entity to achieve a specific purpose. | |
“Lime” | Calcium oxide; artificially made from limestone | |
“Limestone” | Rock composed mainly of calcium carbonate | |
“Lithology” | The physical characteristics of rock | |
“Mafic” | Descriptive of rocks containing or made up of ferro-magnesian minerals (usually dark in color) | |
“Magma; magmatic” | Liquid molten rock; pertaining to processes and rocks involving magma | |
“Marcasite” | Iron sulfide mineral (a form of pyrite) | |
“Metallurgy” | The science and technology of metals, usually pertaining to the processing of metals and minerals in mining | |
“Mill feed grade” | The grade of material feed to the mill, equivalent to received at mill | |
“Milling/mill” | The comminution of the ore, although the term has come to cover the broad range of machinery inside the treatment plant where economically valuable minerals are separated from the ore |
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“Mineable” | The portion of a reserve for which extraction is technically and economically feasible | |
“Mineral deposit” | A mineralized underground body which has been intersected by a sufficient number of closely-spaced drill holes and/or underground sampling to support sufficient tonnage and ore grade to warrant further exploration or development; a mineral deposit or mineralized material does not qualify as a commercially mineable ore body (Reserves), as prescribed under standards of the Commission, until a final and comprehensive economic, technical, and legal feasibility study based upon the test results is concluded. | |
“Net smelter returns” | The value received for a mineral after refining, less the cost of transporting the mineral to the refinery and the cost of refining | |
“Open pit” | Surface mining in which the ore is extracted from a pit. The geometry of the pit may vary with the characteristics of the ore body. | |
“Ore” | Material that contains one or more minerals, at least one of which has commercial value and which can be recovered at a profit | |
“Ore body” | A continuous well defined mass of material of sufficient ore content to make extraction economically feasible | |
“Ore grade” | The average amount of the valuable metal or mineral contained in a specific mass of ore; for gold, this is usually expressed as troy ounces per short ton (2,000 pounds avoirdupois) or grams per tonne | |
“Ounces” | Troy ounces of 31.103 grams, or 1.097 Avoirdupois ounces | |
“Outcrop” | That part of a rock formation exposed on surface | |
“Oxide ore” | Gold ore that has been subjected to oxidation through natural weathering and surface water percolation to the extent that the minerals are readily treatable by standard processes | |
“Phyllic alteration” | Hydrothermal alteration of rocks involving the secondary formation of quartz and sericite | |
“Pit shell” | Designed outline of an open pit mine containing all the open pit ore reserves | |
“Pleistocene” | A subdivision of geologic time, about 10,000 — 2 million years before the present | |
“Potassic alteration” | Hydrothermal alteration of rock involving the secondary formation of potash feldspar, commonly the mineral orthoclase, usually with biotite | |
“Pressure oxidation” | A method of processing refractory sulfide ore | |
“Propylitic alteration” | Hydrothermal alteration of basic rocks involving the secondary formation of chlorite, epidote, calcite and sulfide | |
“Pyrite” | Iron sulfide mineral | |
“RC hole” | A reverse circulation drill hole produced by percussion drilling in which rock cuttings are recovered instead of core. “Reverse circulation” refers to the air flow which flows downward around the outside of the drill pipe, returning with the rock cuttings through the drill bit face and stem. | |
“Reactive sulfur” | In mineral processing involving pressure oxidation, sulfur in the form of sulfide |
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“Refining” | The final stage of metal production in which final impurities are removed from the molten metal by introducing air and fluxes. The impurities are removed as gases or slag | |
“Refractory ore” | Ore not amenable to standard processing techniques | |
“Sampling” | Taking small pieces of rock at intervals along exposed mineralization for assay (to determine the mineral content) | |
“SAG” | “Semi-autogenous grinding”, a method of comminution that utilizes the rock fragments to assist in the grinding process | |
“Seismic” | Pertaining to shock waves that pass through the earth | |
“Shotcreting” | Application by pressure spraying of a setting medium with the characteristics of concrete for stabilization of rock faces. | |
“Silt curtain” | A flooding barrier to be deployed offshore from watercourses, which causes temporary ponding of sediment laden fresh water within its confines to enhance settling, and mixing with sea water, as the turbid stream is forced underneath the barrier | |
“Slurry” | A fluid comprising fine solids suspended in a solution (generally water containing additives) | |
“Smelting” | Thermal processing whereby molten metal is liberated from beneficiated ore or concentrate with impurities separating as lighter slag | |
“Stockpile” | A store of unprocessed ore | |
“Stripping” | The process of removing overburden or waste to expose ore | |
“Stripping ratio” | In open pit mining, the ratio of waste material to ore, usually expressed as tonnes waste : tonnes ore | |
“Sulfide ore” | Ore characterized by the inclusion of metal in the crystal structure of a sulfide mineral. This type of ore is often refractory ore | |
“Superannuation fund” | A contributory pension fund. | |
“Surface mixed layer” | Uppermost layer of the ocean that is constantly mixed by wind and wave action | |
“Tailings” | The finely-ground waste product from ore processing | |
“Underground Mine” | Mining of an ore body beneath the earths surface where ore is recovered using trucks via a portal or hoisted via a shaft |
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“US$/ oz. Gold” | US dollars per troy ounce of gold | |
“US$/ t ore” | US dollars per tonne of ore | |
“C” | Degrees Celsius | |
“g Au/t” | Grams of gold per tonne | |
“ha” | Hectares | |
“kg” | Kilograms | |
“kg Au/t” | Kilograms of gold per tonne | |
“kPa” | kilo Pascals | |
“kt” | kilo tonnes | |
“m2” | Square meters | |
“m3” | Cubic meters | |
“mtpy” | Million tonnes per year | |
“t/d” | Tonnes per day | |
“t/h” | Tonnes per hour | |
Unit Equivalents | ||
“Celsius degrees” | (Fahrenheit degrees minus 32.0) times 5/9 | |
“1 cubic meter” | 35.314 cubic feet | |
“1 gram” | 0.03215 troy ounces | |
“1 gram Au/tonne” | 0.02917 troy ounces gold/short ton | |
“1 hectare” | 2.471 acres | |
“1 kilogram” | 2.205 pounds | |
0“1 kilometer” | 0.62 statute miles | |
“1 kilopascal” | 0.145 pounds per square inch | |
“1 kilo tonne” | 1102.31 short tons | |
“1 meter” | 3.281 feet | |
“1 millimeter” | 0.039 inches | |
“1 square kilometer” | 0.3861 square miles | |
“1 square meter” | 10.764 square feet | |
“1 tonne” | 1.1023 short tons |
120
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3 | ||||
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PricewaterhouseCoopers | ||
6th Floor Credit House | ||
Cuthbertson Street | ||
PO Box 484 | ||
PORT MORESBY | ||
PAPUA NEW GUINEA | ||
Website: www.pwc.com.pg | ||
Telephone (675) 321 1500 | ||
Facsimile (675) 321 1428 |
Table of Contents
Port Moresby, Papua New Guinea
15 April 2008
Table of Contents
$m | ||||||||||||||||
Note | 2007 | 2006 | 2005 | |||||||||||||
Revenue | 7 | 498.4 | 386.0 | 264.0 | ||||||||||||
Cost of sales | 9 | (261.3 | ) | (211.0 | ) | (196.4 | ) | |||||||||
Gross profit from mining activities | 237.1 | 175.0 | 67.6 | |||||||||||||
Corporate expense | (25.3 | ) | (12.1 | ) | (1.9 | ) | ||||||||||
Project studies | (7.5 | ) | (0.8 | ) | — | |||||||||||
Exploration expense | (8.4 | ) | (5.9 | ) | (6.0 | ) | ||||||||||
Operating profit before other income / (expense) | 195.9 | 156.2 | 59.7 | |||||||||||||
Other income / (expense): | ||||||||||||||||
Hedging loss | 10 | (97.2 | ) | (78.3 | ) | (44.1 | ) | |||||||||
Other expenses | 11 | (13.8 | ) | — | (2.5 | ) | ||||||||||
Operating profit before finance costs | 84.9 | 77.9 | 13.1 | |||||||||||||
Financial income | 12 | 10.9 | 4.2 | 6.2 | ||||||||||||
Financial expenses | 12 | (131.6 | ) | (6.2 | ) | (3.6 | ) | |||||||||
Profit / (loss) before tax | (35.8 | ) | 75.9 | 15.7 | ||||||||||||
Income tax benefit / (expense) | 13 | 11.7 | (22.1 | ) | (5.9 | ) | ||||||||||
Net profit / (loss) after tax | (24.1 | ) | 53.8 | 9.8 | ||||||||||||
Other comprehensive income | ||||||||||||||||
Exchange difference on translation of foreign operations | 27 | 42.6 | — | — | ||||||||||||
Cash flow hedges | 27 | 38.7 | (50.8 | ) | (72.4 | ) | ||||||||||
Share based payments | 27 | 2.9 | 5.5 | — | ||||||||||||
Net change in fair value of available for sale financial assets | 27 | 1.2 | — | — | ||||||||||||
Income tax on other comprehensive income | 13 | (4.7 | ) | 20.3 | 8.9 | |||||||||||
Other comprehensive income for the period net of tax | 80.7 | (25.0 | ) | (63.5 | ) | |||||||||||
Total comprehensive income | 56.6 | 28.8 | (53.7 | ) | ||||||||||||
Earnings / (loss) per share | 37 | |||||||||||||||
- Basic (cents/share) | (1.4 | ) | 4.2 | 0.8 | ||||||||||||
- Diluted (cents/share) | (1.4 | ) | 4.2 | 0.8 |
-F- 1 -
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As at 31 December 2007 and 2006
$m | ||||||||||||
Note | 2007 | 2006 | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | 14 | 174.2 | 47.0 | |||||||||
Receivables | 16 | 14.9 | 4.6 | |||||||||
Inventories | 17 | 102.8 | 75.3 | |||||||||
Derivative financial instruments | 18 | — | 0.3 | |||||||||
Other assets | 2.3 | 5.5 | ||||||||||
Total current assets | 294.2 | 132.7 | ||||||||||
NON-CURRENT ASSETS | ||||||||||||
Receivables | 16 | 0.4 | 0.5 | |||||||||
Inventories | 17 | 169.1 | 141.7 | |||||||||
Derivative financial instruments | 18 | — | 2.4 | |||||||||
Deferred mining costs | 19 | 218.3 | 148.3 | |||||||||
Property plant and equipment | 20 | 1,430.6 | 951.2 | |||||||||
Intangible assets | 21 | 98.4 | — | |||||||||
Available-for-sale financial assets | 22 | 2.5 | 33.0 | |||||||||
Deferred income tax asset | 13 | 92.1 | 86.2 | |||||||||
Total non-current assets | 2,011.4 | 1,363.3 | ||||||||||
Total assets | 2,305.6 | 1,496.0 | ||||||||||
LIABILITIES | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Accounts payable & accrued liabilities | 23 | 64.0 | 46.6 | |||||||||
Provisions | 24 | 13.5 | 6.4 | |||||||||
Borrowings and finance facilities | 25 | 0.3 | 62.5 | |||||||||
Derivative financial instruments | 18 | — | 61.5 | |||||||||
Income tax payable | 13 | — | 0.3 | |||||||||
Total current liabilities | 77.8 | 177.3 | ||||||||||
NON-CURRENT LIABILITIES | ||||||||||||
Provisions | 24 | 15.2 | 14.2 | |||||||||
Borrowings | 25 | 0.7 | 218.6 | |||||||||
Derivative financial instruments | 18 | — | 274.0 | |||||||||
Deferred income tax liability | 13 | 50.8 | — | |||||||||
Total non-current liabilities | 66.7 | 506.8 | ||||||||||
Total liabilities | 144.5 | 684.1 | ||||||||||
NET ASSETS | 2,161.1 | 811.9 | ||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||
Share capital | 26 | 2,319.7 | 1,027.1 | |||||||||
Reserves | 27 | (170.0 | ) | (250.7 | ) | |||||||
Retained earnings | 27 | 11.4 | 35.5 | |||||||||
TOTAL SHAREHOLDERS’ EQUITY | 2,161.1 | 811.9 | ||||||||||
-F- 2 -
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Year ended 31 December 2007, 2006 and 2005
Retained | ||||||||||||||||
Issued capital | Reserves | Earnings | Total Equity | |||||||||||||
CONSOLIDATED ENTITY | $m | $m | $m | $m | ||||||||||||
Balance at 1 January 2005 | 1,027.5 | (162.2 | ) | (28.1 | ) | 837.2 | ||||||||||
Total comprehensive income / (expense) for the period | (63.5 | ) | 9.8 | (53.7 | ) | |||||||||||
Purchase of treasury shares | ||||||||||||||||
Balance at 31 December 2005 | 1,027.5 | (225.7 | ) | (18.3 | ) | 783.5 | ||||||||||
Balance at 1 January 2006 | 1,027.5 | (225.7 | ) | (18.3 | ) | 783.5 | ||||||||||
Total comprehensive income / (expense) for the period | — | (25.0 | ) | 53.8 | 28.8 | |||||||||||
Purchase of treasury shares | (0.4 | ) | — | — | (0.4 | ) | ||||||||||
Balance at 31 December 2006 | 1,027.1 | (250.7 | ) | 35.5 | 811.9 | |||||||||||
Balance at 1 January 2007 | 1,027.1 | (250.7 | ) | 35.5 | 811.9 | |||||||||||
Total comprehensive income / (expense) for the period | — | 80.7 | (24.1 | ) | 56.6 | |||||||||||
Issue of shares — on acquisition of Ballarat | 316.5 | — | — | 316.5 | ||||||||||||
Issue of shares — rights issue / placement (net of transaction costs) | 977.4 | — | — | 977.4 | ||||||||||||
Purchase of treasury shares | (1.3 | ) | — | — | (1.3 | ) | ||||||||||
Balance at 31 December 2007 | 2,319.7 | (170.0 | ) | 11.4 | 2,161.1 | |||||||||||
-F- 3 -
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Year ended 31 December 2007, 2006 and 2005
$m | ||||||||||||||||
Note | 2007 | 2006 | 2005 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||
Receipts from customers | 472.4 | 329.3 | 243.7 | |||||||||||||
Payments arising from suppliers & employees | (365.9 | ) | (268.7 | ) | (233.5 | ) | ||||||||||
Cash generated from operations | 106.5 | 60.6 | 10.2 | |||||||||||||
Purchase of gold to close out hedge book | (648.4 | ) | — | — | ||||||||||||
Receipts on close out of hedge book | 279.9 | — | — | |||||||||||||
Hedge book restructure & fees | — | — | (62.2 | ) | ||||||||||||
Interest and finance charges paid | (8.0 | ) | (3.3 | ) | (2.5 | ) | ||||||||||
Net cash flow from operating activities | 15 | (270.0 | ) | 57.3 | (54.5 | ) | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||
Interest received | 9.7 | 1.4 | 1.9 | |||||||||||||
Purchase of property plant and equipment | (206.7 | ) | (170.8 | ) | (99.5 | ) | ||||||||||
Proceeds on disposal of property, plant & equipment | — | 0.1 | 0.4 | |||||||||||||
Payments for investments | (1.2 | ) | (34.0 | ) | — | |||||||||||
Acquisition of subsidiary net of cash acquired | 28 | 19.6 | — | — | ||||||||||||
Net cash flow from investing activities | (178.6 | ) | (203.3 | ) | (97.2 | ) | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||
Drawdown of secured debt | 22.4 | 65.6 | 245.5 | |||||||||||||
Repayment of secured debt | (88.2 | ) | — | (49.5 | ) | |||||||||||
Repayment of gold loan | (333.4 | ) | — | — | ||||||||||||
Proceeds of equity issue | 989.0 | — | — | |||||||||||||
Underwriting expenses | (11.6 | ) | — | — | ||||||||||||
Payment for treasury shares | (1.3 | ) | (0.4 | ) | — | |||||||||||
Net cash flow from financing activities | 576.9 | 65.2 | 196.0 | |||||||||||||
Net increase / (decrease) in cash and cash equivalents | 128.3 | (80.8 | ) | 44.3 | ||||||||||||
Cash and cash equivalents at beginning of year | 47.0 | 127.8 | 83.5 | |||||||||||||
Effects of exchange rates to changes in cash held | (1.1 | ) | — | — | ||||||||||||
Cash and cash equivalents at end of year | 14 | 174.2 | 47.0 | 127.8 | ||||||||||||
Financing arrangements | 25 |
-F- 4 -
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• | derivative financial instruments are measured at fair value | ||
• | financial instruments at fair value through profit and loss are measured at fair value | ||
• | available for sale financial assets are measured at fair value |
-F- 5 -
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
- F - 6 -
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Percentage | Percentage | |||||||
depreciated as unit-of- | depreciated as | |||||||
Fixed asset classification | use | straight-line | ||||||
Deferred expenditure | 100 | % | — | |||||
Land & buildings | 100 | % | — | |||||
Plant & equipment | 85 | % | 15 | % | ||||
Total average | 90 | % | 10 | % |
- F - 7 -
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
- F - 8 -
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
- F - 9 -
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1. | hedges of the fair value of recognised assets, liabilities or firm commitments (fair value hedge); | |
2. | hedges of a particular cash flow risk associated with a recognised asset, liability or highly probable forecast transaction (cash flow hedge); or | |
3. | hedges of a net investment in a foreign operation (net investment hedge) |
- F - 10 -
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
• | The Lihir Executive Share Plan (the “LESP”), which provides benefits to the executives of the Company; and | |
• | Share issues made to local Lihirian landowners through Mineral Resources Lihir Limited “(MRL)”. |
a. | the product is in a form suitable for delivery and no further processing is required by, or on behalf of, the Company; | ||
b. | the quantity and quality (grade) of the product can be determined with reasonable accuracy; | ||
c. | the product has been dispatched to the customer and is no longer under the physical control of the Company (or property in the product has earlier passed to the customer); |
- F - 11 -
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
d. | the selling price can be measured reliably; | ||
e. | it is probable that the economic benefits associated with the transaction will flow to the Company; and | ||
f. | the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
a. | cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts; and | ||
b. | investments in money market instruments with less than 90 days to maturity from the date of acquisition. |
- F - 12 -
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
- F - 13 -
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
§ | Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position |
§ | Income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and |
§ | All resulting exchange differences are recognised in the foreign currency translation reserve. |
- F - 14 -
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
- F - 15 -
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Previous financial report | Effect of reclassification | Current financial report | ||||||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||||
Revenue | 307.7 | 225.2 | (a | ) | (307.7 | ) | (225.2 | ) | — | — | ||||||||||||||||||
Sales revenue | (a | ) | 386.0 | 264.0 | 386.0 | 264.0 | ||||||||||||||||||||||
Gold lease rate fees | 2.8 | 5.0 | (g | ) | (2.8 | ) | (5.0 | ) | — | — | ||||||||||||||||||
Fair value losses | (1.7 | ) | (5.4 | ) | (a | ) | 1.7 | 5.4 | — | — | ||||||||||||||||||
Other revenue | 1.6 | (a | ) | (1.6 | ) | — | — | — | ||||||||||||||||||||
Mining expenses | (107.6 | ) | (95.3 | ) | (b | ) | 107.6 | 95.3 | — | — | ||||||||||||||||||
Processing costs | (47.9 | ) | (41.6 | ) | (b | ) | 47.9 | 41.6 | — | — | ||||||||||||||||||
Power generation costs | (27.0 | ) | (27.4 | ) | (b | ) | 27.0 | 27.4 | — | — | ||||||||||||||||||
General and administrative expenses | (66.6 | ) | (57.9 | ) | (b)/ | (c)/(d) | 66.6 | 57.9 | — | — | ||||||||||||||||||
Refining, royalty and management fees | (13.0 | ) | (6.8 | ) | (b | ) | 13.0 | 6.8 | — | — | ||||||||||||||||||
Deferred mining costs | 56.3 | 25.0 | (b | ) | (56.3 | ) | (25.0 | ) | — | — | ||||||||||||||||||
Costs deferred and transferred to inventories | 19.4 | 39.2 | (b | ) | (19.4 | ) | (39.2 | ) | — | — | ||||||||||||||||||
Depreciation and amortisation | (37.4 | ) | (35.7 | ) | (b | ) | 37.4 | 35.7 | — | — | ||||||||||||||||||
Cost of sales | — | — | (b | ) | (211.0 | ) | (196.4 | ) | (211.0 | ) | (196.4 | ) | ||||||||||||||||
Corporate expenses | — | — | (c | ) | (12.1 | ) | (1.9 | ) | (12.1 | ) | (1.9 | ) | ||||||||||||||||
Project studies | — | — | (d | ) | (0.8 | ) | — | (0.8 | ) | — | ||||||||||||||||||
Exploration expenses | (5.9 | ) | (6.2 | ) | (e | ) | — | 0.2 | (5.9 | ) | (6.0 | ) | ||||||||||||||||
Hedging loss | — | — | (a | ) | (78.3 | ) | (44.1 | ) | (78.3 | ) | (44.1 | ) | ||||||||||||||||
Other expenses | — | — | (f | ) | — | (2.5 | ) | — | (2.5 | ) | ||||||||||||||||||
Interest income | 1.4 | 1.2 | (g | ) | (1.4 | ) | (1.2 | ) | — | — | ||||||||||||||||||
Finance costs | (6.2 | ) | (3.6 | ) | (h | ) | 6.2 | 3.6 | — | — | ||||||||||||||||||
Financial income | — | — | (g | ) | 4.2 | 6.2 | 4.2 | 6.2 | ||||||||||||||||||||
Financial expenses | — | — | (h | ) | (6.2 | ) | (3.6 | ) | (6.2 | ) | (3.6 | ) | ||||||||||||||||
Income tax expense | (22.1 | ) | (5.9 | ) | (22.1 | ) | (5.9 | ) | ||||||||||||||||||||
Net profit / (loss) after tax | 53.8 | 9.8 | — | — | 53.8 | 9.8 | ||||||||||||||||||||||
- F - 16 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(a) | Net loss realised on hedging instruments has been re-classified from revenue to hedging loss expense. Other revenue has been classified as revenue. | |
(b) | Mining expenses, processing costs, power generation costs, refining and royalty expenses, deferred mining costs, costs deferred and transferred to inventory, depreciation and amortisation and the operating expense portion of general and administrative expenses have been reclassified to cost of sales. These items were previously reported under operating expenses. | |
(c) | The portion of general and administrative expenditure relating to corporate activities has been re-classified from operating expenses/ cost of sales to corporate expenses. | |
(d) | An amount of $0.8 million of research and development expenditure previously included within general and administrative expenditure has been re-classified as project study expenditure. | |
(e) | An amount of $0.2 million has been re-classified as cost of sales. | |
(f) | An amount of $2.5 million relating to loss on disposal of fixed assets has been re-classified from general and administrative costs to other expenses. | |
(g) | Interest income and gold lease rate fees have been reclassified as financial income. | |
(h) | Finance costs have been re-classified to financial expenses. |
Application date for | ||||||||||
Application date | Impact on Consolidated Entity's | the Consolidated | ||||||||
Reference | Title | Summary | of standard | financial report | Entity | |||||
IFRS 7 | Financial Instruments: Disclosures | New standard replacing the disclosure requirements | 1 January 2007 | IFRS 7 is a disclosure standard so has no direct impact on the measurement and recognition criteria relating to amounts included in the Consolidated Entity’s financial statements, but does result in changes to the financial instrument disclosures included in the Consolidated Entity’s annual report. | 1 January 2007 | |||||
IFRS 8 | Operating Segments | New standard | 1 January 2009 | IFRS 8 is a disclosure standard so has no direct impact on the measurement and recognition criteria relating to amounts included in the Consolidated Entity’s financial statements, but does result in changes to the segment reporting disclosures included in the Consolidated Entity’s financial report. (Refer to Note 6) | 1 January 2007 | |||||
IAS 1 | Presentation of Financial Statements | Added disclosures about an entity’s capital and changed the presentation and format of financial statements. | 1 January 2007 | IAS 1 is a disclosure standard so has no direct impact on the measurement and recognition criteria relating to amounts included in the Group’s financial statements, but may result in changes to capital disclosures included in the Group’s annual report, and presentation and format of financial statements. | 1 January 2007 |
- F - 17 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Preliminary assessment on the | Application date for | |||||||||
Application date | impact of the Consolidated | the Consolidated | ||||||||
Reference | Title | Summary | of standard | Entity's financial report | Entity | |||||
IAS 23 | Borrowing Costs | Amended to require all borrowing costs associated with a qualifying asset to be capitalised. | 1 January 2009 | This is consistent with the Consolidated Entity’s existing accounting policy for Capitalisation of interest and financing costs and is not expected to have any additional impact. | 1 January 2009 | |||||
IFRIC 11 | IFRS 2 — Treasury Share Transactions | This interpretation deals with accounting for share based payments issued between two entities in the same group and whether certain share based payments should be accounted for as equity- settled or cash- settled awards. | 1 March 2007 | This is consistent with the Consolidated Entity’s existing accounting policy for Share based payments and is not expected to have any additional impact. | 1 January 2008 | |||||
IFRIC 12 | Service Concession Arrangements | This interpretation deals with accounting for publicly owned infrastructure constructed, operated, and maintained by the private sector. | 1 January 2008 | Not applicable | Not applicable | |||||
IFRIC 13 | Customer Loyalty Programmes | This interpretation deals with sales of goods with customer award credits should be accounted as multiple- element transactions. | 1 July 2008 | Not applicable | Not applicable | |||||
IFRIC 14 | IAS 19 — The Limit on a Defined Benefit Asset, Minimum Funding Requirements And their Interaction | This interpretation provides Clarification of IAS 19 regarding future contributions and minimum funding requirements of defined benefit plans. | 1 January 2008 | Not applicable | Not applicable |
- F - 18 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Tenement No. | Location | Date registered | Expiry date | |||
EL 3018 | Ballarat | 21 November 2007 | 3 October 2009 | |||
MIN 5396 | Ballarat | 17 December 2003 | 4 October 2008 | |||
MIN 4194 | Berringa | 17 April 2003 | 14 February 2012 | |||
MIN 4847 | Ballarat South | 10 August 1995 | 1 November 2009 | |||
MIN 5444 | Yarrowee River | 4 April 2006 | 4 April 2026 | |||
EL 4920 | North Creswick | 17 January 2007 | 17 January 2012 |
- F - 19 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
• | Credit risk; | ||
• | Liquidity risk; and, | ||
• | Market risk (including foreign exchange risk, interest rate risk and commodity price risk) |
- F - 20 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
- F - 21 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
• | Interest revenue |
• | Finance costs |
• | Hedging gains or losses |
• | Income taxes |
• | Corporate expenses |
• | Cash and cash equivalents |
• | Current and deferred tax balances |
• | Interest bearing loans and borrowings |
• | Derivative financial instruments |
• | Assets and liabilities of the corporate office |
Total | ||||||||||||||||
Papua New | Consolidated | |||||||||||||||
Guinea | Australia | Unallocated | Entity | |||||||||||||
Year ended 31 December 2007 | $m | $m | $m | $m | ||||||||||||
Revenue from external customers | 497.6 | 0.8 | — | 498.4 | ||||||||||||
Depreciation and amortisation | (50.3 | ) | — | (0.1 | ) | (50.4 | ) | |||||||||
Cost of sales (excluding depreciation and amortisation) | (210.1 | ) | (0.8 | ) | — | (210.9 | ) | |||||||||
Mine operating earnings | 237.2 | — | (0.1 | ) | 237.1 | |||||||||||
Corporate expense | — | — | (25.3 | ) | (25.3 | ) | ||||||||||
Project studies | (7.5 | ) | — | — | (7.5 | ) | ||||||||||
Exploration expense | (8.2 | ) | (0.2 | ) | — | (8.4 | ) | |||||||||
Operating profit / (loss) before other income / (expenses) | 221.5 | (0.2 | ) | (25.4 | ) | 195.9 | ||||||||||
Other income / (expense) |
- F - 22 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Total | ||||||||||||||||
Papua New | Consolidated | |||||||||||||||
Guinea | Australia | Unallocated | Entity | |||||||||||||
Year ended 31 December 2007 | $m | $m | $m | $m | ||||||||||||
Hedging loss | — | — | (97.2 | ) | (97.2 | ) | ||||||||||
Other income and expenses | (13.0 | ) | — | 0.1 | (12.9 | ) | ||||||||||
Net finance costs | — | — | (121.6 | ) | (121.6 | ) | ||||||||||
Profit / (loss) before tax | 208.5 | (0.2 | ) | (244.1 | ) | (35.8 | ) | |||||||||
Income tax benefit / (expense) | — | — | 11.7 | 11.7 | ||||||||||||
Net profit / (loss) after tax | 208.5 | (0.2 | ) | (232.4 | ) | (24.1 | ) | |||||||||
Total | ||||||||||||||||
Papua New | Consolidated | |||||||||||||||
Guinea | Australia | Unallocated | Entity | |||||||||||||
Year ended 31 December 2006 | $m | $m | $m | $m | ||||||||||||
Revenue from external customers | 386.0 | — | — | 386.0 | ||||||||||||
Depreciation and amortisation | (37.3 | ) | — | — | (37.3 | ) | ||||||||||
Cost of sales (excluding depreciation and amortisation) | (173.7 | ) | — | — | (173.7 | ) | ||||||||||
Mine operating earnings | 175.0 | 175.0 | ||||||||||||||
Corporate expense | — | — | (12.1 | ) | (12.1 | ) | ||||||||||
Project studies | (0.8 | ) | — | — | (0.8 | ) | ||||||||||
Exploration expense | (5.9 | ) | — | — | (5.9 | ) | ||||||||||
Operating profit / (loss) | 168.3 | — | (12.1 | ) | 156.2 | |||||||||||
Hedging loss | — | — | (78.3 | ) | (78.3 | ) | ||||||||||
Other income and expenses | — | — | — | — | ||||||||||||
Net finance costs | — | — | (2.0 | ) | (2.0 | ) | ||||||||||
Profit / (loss) before income tax | 168.3 | — | (92.4 | ) | 75.9 | |||||||||||
Income tax expense | — | — | (22.1 | ) | (22.1 | ) | ||||||||||
Net profit / (loss) after tax | 168.3 | — | (114.5 | ) | 53.8 | |||||||||||
Total | ||||||||||||||||
Papua New | Consolidated | |||||||||||||||
Guinea | Australia | Unallocated | Entity | |||||||||||||
Year ended 31 December 2005 | $m | $m | $m | $m | ||||||||||||
Revenue from external customers | 264.0 | — | — | 264.0 | ||||||||||||
Depreciation and amortisation | (28.8 | ) | — | — | (28.8 | ) | ||||||||||
Cost of sales (excluding depreciation and amortisation) | (164.6 | ) | — | — | (164.6 | ) | ||||||||||
Mine operating earnings | 70.6 | 70.6 | ||||||||||||||
Corporate expense | (1.9 | ) | — | — | (1.9 | ) | ||||||||||
Project studies | — | — | — | — | ||||||||||||
Exploration expense | (6.0 | ) | — | — | (6.0 | ) | ||||||||||
Operating profit / (loss) | 62.7 | — | — | 62.7 | ||||||||||||
Hedging loss | (44.1 | ) | — | — | (44.1 | ) | ||||||||||
Other income and expenses | (2.5 | ) | — | — | (2.5 | ) | ||||||||||
Net finance costs | (0.4 | ) | — | — | (0.4 | ) | ||||||||||
Profit / (loss) before income tax | 15.7 | — | — | 15.7 | ||||||||||||
Income tax expense | 5.9 | — | — | 5.9 | ||||||||||||
Net profit / (loss) after tax | 9.8 | — | — | 9.8 | ||||||||||||
- F - 23 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Total | ||||||||||||||||
Papua New | Consolidated | |||||||||||||||
Guinea | Australia | Unallocated | Entity | |||||||||||||
$m | $m | $m | $m | |||||||||||||
As at 31 December 2007 | ||||||||||||||||
Assets and liabilities | ||||||||||||||||
Segment assets | 1,578.6 | 492.4 | 234.6 | 2,305.6 | ||||||||||||
Segment liabilities | (79.2 | ) | (11.6 | ) | (53.7 | ) | (144.5 | ) | ||||||||
As at 31 December 2006 | ||||||||||||||||
Assets and liabilities | ||||||||||||||||
Segment assets | 1,292.7 | 33.0 | 170.3 | 1,496.0 | ||||||||||||
Segment liabilities | 348.6 | — | 335.5 | 684.1 | ||||||||||||
As at 31 December 2005 | ||||||||||||||||
Assets and liabilities | ||||||||||||||||
Segment assets | 1,319.4 | — | — | 1,319.4 | ||||||||||||
Segment liabilities | 535.9 | — | — | 535.9 |
2007 | ||||||
Customer | $m | Segment reporting revenue | ||||
1 | 86.6 | Papua New Guinea | ||||
2 | 55.1 | Papua New Guinea | ||||
3 | 52.3 | Papua New Guinea |
2006 | ||||||
Customer | $m | Segment reporting revenue | ||||
1 | 54.1 | Papua New Guinea | ||||
2 | 50.7 | Papua New Guinea | ||||
3 | 43.5 | Papua New Guinea | ||||
4 | 42.2 | Papua New Guinea | ||||
5 | 42.2 | Papua New Guinea | ||||
6 | 38.5 | Papua New Guinea |
2005 | ||||||
Customer | $m | Segment reporting revenue | ||||
1 | 49.3 | Papua New Guinea | ||||
2 | 44.5 | Papua New Guinea | ||||
3 | 36.3 | Papua New Guinea | ||||
4 | 30.3 | Papua New Guinea |
- F -24 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Gold sales | 493.1 | 384.4 | 264.0 | |||||||||
Other revenue | 5.3 | 1.6 | — | |||||||||
498.4 | 386.0 | 264.0 | ||||||||||
$m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Equity settled share-based payment compensation | 2.9 | 0.5 | — | |||||||||
Other personnel expenses | 66.0 | 41.2 | 33.5 | |||||||||
68.9 | 41.7 | 33.5 | ||||||||||
CONSOLIDATED ENTITY | ||||||||||||
$m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Operating costs | (305.4 | ) | (238.5 | ) | (217.9 | ) | ||||||
Royalties, levies & production taxes | (13.2 | ) | (9.4 | ) | (4.8 | ) | ||||||
Refining costs | (0.5 | ) | (0.3 | ) | (0.7 | ) | ||||||
Depreciation & amortisation | (50.4 | ) | (37.3 | ) | (35.7 | ) | ||||||
Deferred mining costs | 70.0 | 56.3 | 25.0 | |||||||||
Change in inventories | 41.2 | 19.4 | 39.2 | |||||||||
Inventory write-off: Economic grade stockpile | — | — | (2.9 | ) | ||||||||
Foreign exchange loss | (3.0 | ) | (1.2 | ) | 1.4 | |||||||
(261.3 | ) | (211.0 | ) | (196.4 | ) | |||||||
$m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Cash hedging loss | (21.4 | ) | (61.2 | ) | (30.6 | ) | ||||||
Non-cash hedging loss on hedge restructure reclassified from equity | (75.8 | ) | (17.1 | ) | (13.5 | ) | ||||||
(97.2 | ) | (78.3 | ) | (44.1 | ) | |||||||
Refer to accounting policy Note 1 (xviii) hedge book restructure for a description of non-cash hedging losses. |
$m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Property, plant and equipment disposal loss | (13.8 | ) | — | (2.5 | ) | |||||||
(13.8 | ) | — | (2.5 | ) | ||||||||
- F -25 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Financial income | ||||||||||||
Interest income | 9.7 | 1.4 | 1.2 | |||||||||
Gold lease rate fees | 0.3 | 2.8 | 5.0 | |||||||||
Other income | 0.9 | — | — | |||||||||
10.9 | 4.2 | 6.2 | ||||||||||
Financial expenses | ||||||||||||
Loss on repayment of gold loan | (117.9 | ) | — | — | ||||||||
Foreign exchange loss * | (5.8 | ) | — | — | ||||||||
Interest expense on debt facilities | (4.8 | ) | (1.5 | ) | (0.4 | ) | ||||||
Other interest & financing | (3.1 | ) | (4.7 | ) | (3.2 | ) | ||||||
(131.6 | ) | (6.2 | ) | (3.6 | ) | |||||||
* | Represents realised foreign exchange movements arising from receiving funds from the capital raising in A$ transaction, the purchase cost of gold for the close out of the hedge book as well as settling other foreign denominated application of funds, including the repayment of debt facilities and investment in subsidiary. |
- F -26 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Income Tax Expense | ||||||||||||
Current tax | — | 0.3 | 1.3 | |||||||||
— | 0.3 | 1.3 | ||||||||||
Deferred tax | (11.9 | ) | 23.3 | 4.6 | ||||||||
Under / (over) provided in prior years | 0.2 | (1.5 | ) | — | ||||||||
(11.7 | ) | 21.8 | 4.6 | |||||||||
Total income tax expense | (11.7 | ) | 22.1 | 5.9 | ||||||||
Numerical reconciliation of income tax expense to prima facie tax payable | ||||||||||||
Profit / (loss) before tax | (35.8 | ) | 75.9 | 15.7 | ||||||||
Prima facie income tax expense on before tax profit at 30% | (10.7 | ) | 22.8 | 4.7 | ||||||||
Tax effect of amounts which are not deductible (taxable) in calculating taxable income | ||||||||||||
- Expenses not deductible / (income not taxable) for tax purposes | (0.8 | ) | 0.9 | — | ||||||||
- Recognition of tax losses not previously recognised | (0.2 | ) | — | |||||||||
- Section 72A double deductions | (0.2 | ) | (0.1 | ) | (0.1 | ) | ||||||
(11.9 | ) | 23.6 | 4.6 | |||||||||
Adjustment for current tax of prior periods | ||||||||||||
Under / (over) provided in prior years | 0.2 | (1.5 | ) | 1.3 | ||||||||
Tax expense / (benefit) | (11.7 | ) | 22.1 | 5.9 | ||||||||
Deferred Income Tax | ||||||||||||
Deferred tax assets: | 230.2 | 175.0 | ||||||||||
Deferred tax liabilities: | (188.9 | ) | (88.8 | ) | ||||||||
41.3 | 86.2 | |||||||||||
Balance at beginning of year | 86.2 | 87.7 | ||||||||||
Credited / (charged) to the statement of comprehensive income | 11.7 | (21.8 | ) | |||||||||
Acquired on business combination | (47.3 | ) | — | |||||||||
Translation adjustments | (4.6 | ) | — | |||||||||
Tax charged to equity | (4.7 | ) | 20.3 | |||||||||
Balance at end of year | 41.3 | 86.2 | ||||||||||
Deferred tax asset — PNG | 92.1 | 86.2 | ||||||||||
Deferred tax liability — Australia | (50.8 | ) | — | |||||||||
- F -27 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Accelerated | ||||||||||||||||||||||||||||
tax | Provisions | Tax | Mining | |||||||||||||||||||||||||
Deferred tax assets: | depreciation | of assets | Derivatives | losses | tenements | Other* | Total | |||||||||||||||||||||
At 1 January 2006 | — | 6.1 | 79.0 | 65.6 | — | 0.5 | 151.2 | |||||||||||||||||||||
Credited / (charged) to the statement of comprehensive income | — | 2.8 | 0.5 | 0.2 | — | (0.1 | ) | 3.4 | ||||||||||||||||||||
Credited / (charged) to equity | — | — | 20.3 | 0.1 | — | — | 20.4 | |||||||||||||||||||||
At 1 January 2007 | — | 8.9 | 99.8 | 65.9 | — | 0.4 | 175.0 | |||||||||||||||||||||
Credited / (charged) to the statement of comprehensive income | — | 3.1 | (0.3 | ) | 32.4 | — | 1.8 | 37.0 | ||||||||||||||||||||
Acquired on business combination | — | — | — | 20.8 | — | 2.3 | 23.1 | |||||||||||||||||||||
Credited / (charged) to equity | — | — | (99.5 | ) | 95.0 | — | (0.4 | ) | (4.9 | ) | ||||||||||||||||||
At 31 December 2007 | — | 12.0 | — | 214.1 | — | 4.1 | 230.2 | |||||||||||||||||||||
Accelerated | ||||||||||||||||||||||||||||
tax | Consumable | Deferred | Prepaid | Mining | ||||||||||||||||||||||||
Deferred tax liabilities: | depreciation | stores | mining | insurance | tenements | Other* | Total | |||||||||||||||||||||
At 1 January 2006 | (31.0 | ) | (4.8 | ) | (27.6 | ) | (0.1 | ) | — | — | (63.5 | ) | ||||||||||||||||
Credited / (charged) to the statement of comprehensive income | (9.8 | ) | 0.6 | (16.9 | ) | (0.1 | ) | — | 1.1 | (25.1 | ) | |||||||||||||||||
Credited / (charged) to equity | — | — | — | — | — | (0.1 | ) | (0.1 | ) | |||||||||||||||||||
At 1 January 2007 | (40.8 | ) | (4.2 | ) | (44.5 | ) | (0.2 | ) | — | 1.0 | (88.7 | ) | ||||||||||||||||
Charged/(credited) to the statement of comprehensive income | 0.5 | (2.2 | ) | (21.5 | ) | (0.6 | ) | — | (1.5 | ) | (25.3 | ) | ||||||||||||||||
Acquired on business combination | — | — | — | — | (68.1 | ) | (7.0 | ) | (75.1 | ) | ||||||||||||||||||
(Credited)/charged to equity | — | — | — | — | — | 0.2 | 0.2 | |||||||||||||||||||||
At 31 December 2007 | (40.3 | ) | (6.4 | ) | (66.0 | ) | (0.8 | ) | (68.1 | ) | (7.3 | ) | (188.9 | ) | ||||||||||||||
* | Other includes share-based payments |
$m | ||||||||||||
Before | Tax | |||||||||||
2007 | tax | effect | Net of tax | |||||||||
Exchange difference on translation of foreign operations | 42.6 | — | 42.6 | |||||||||
Deferred loss on cash flow hedges | 38.7 | (4.5) | * | 34.2 | ||||||||
Share based payments | 2.9 | 0.2 | 3.1 | |||||||||
Net change in fair value of available for sale financial assets | 1.2 | (0.4 | ) | 0.8 | ||||||||
Other comprehensive income | 85.4 | (4.7 | ) | 80.7 | ||||||||
* | Includes $7.2 million adjustment for an unrecognised tax benefit on the previously restructured hedge book |
- F -28 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||||||
Before | Tax | |||||||||||
2006 | tax | effect | Net of tax | |||||||||
Deferred loss on cash flow hedges | (50.8 | ) | 20.4 | (30.4 | ) | |||||||
Share based payments | 5.5 | (0.1 | ) | 5.4 | ||||||||
Other comprehensive income | (45.3 | ) | 20.3 | (25.0 | ) | |||||||
$m | ||||||||||||
Before | Tax | |||||||||||
2005 | tax | effect | Net of tax | |||||||||
Deferred loss on cash flow hedges | (72.4 | ) | 8.9 | (63.5 | ) | |||||||
Other comprehensive income | (72.4 | ) | 8.9 | (63.5 | ) | |||||||
- F -29 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Cash at bank and on hand | 44.7 | 21.4 | 2.6 | |||||||||
Short term deposits with financial institutions | 129.5 | 25.6 | 125.2 | |||||||||
174.2 | 47.0 | 127.8 | ||||||||||
$m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Reconciliation of cash flow from operating activities to operating profit after tax | ||||||||||||
Net profit / (loss) after tax | (24.1 | ) | 53.8 | 9.8 | ||||||||
Add back non-cash items: | ||||||||||||
Depreciation and amortisation | 50.4 | 37.3 | 35.8 | |||||||||
Fair value losses | 0.4 | 1.7 | 5.4 | |||||||||
Amortisation of deferred hedging costs (net) | — | 17.1 | 13.5 | |||||||||
Provision for doubtful debts | 1.3 | 0.4 | 0.4 | |||||||||
Non-cash hedging loss | 75.4 | — | — | |||||||||
Other non-cash income | (0.7 | ) | — | — | ||||||||
Share based payment expenses | 2.9 | 0.6 | — | |||||||||
Hedge book restructure payments and receipts: | ||||||||||||
Purchase of gold to close out hedge book | (648.4 | ) | — | — | ||||||||
Receipts on close out of hedge book | 279.9 | — | — | |||||||||
Hedge book restructure & fees | — | — | (62.2 | ) | ||||||||
Add back items presented in investing or financing (Profit)/loss on disposal of assets | 13.8 | — | 2.5 | |||||||||
Interest income | (9.7 | ) | (1.4 | ) | (1.8 | ) | ||||||
Interest and financing costs | 117.9 | — | — | |||||||||
Change in operating assets and liabilities net of purchase of subsidiary: | ||||||||||||
(Increase)/decrease in debtors and prepayments | (6.0 | ) | 0.1 | 0.7 | ||||||||
(Increase)/decrease in inventories | (54.3 | ) | (19.8 | ) | (46.8 | ) | ||||||
(Increase)/decrease in deferred mining costs | (70.0 | ) | (56.3 | ) | (25.1 | ) | ||||||
Increase/(decrease) in payables | 12.7 | (0.7 | ) | 5.0 | ||||||||
Increase/(decrease) in provisions | 7.1 | 2.9 | 2.4 | |||||||||
Increase/(decrease) in provision for income taxes payable | (0.3 | ) | 0.3 | 1.3 | ||||||||
Increase/(decrease) in provision for deferred income tax | (18.3 | ) | 21.3 | 4.6 | ||||||||
Net cash flow from operating activities | (270.0 | ) | 57.3 | (54.5 | ) | |||||||
-F-30-
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||||||
2007 | 2006 | |||||||||||
CURRENT | ||||||||||||
Other amounts receivable from third parties | 19.1 | 7.5 | ||||||||||
Less: Provision for doubtful debts | (4.2 | ) | (2.9 | ) | ||||||||
Other debtors — related parties | — | — | ||||||||||
14.9 | 4.6 | |||||||||||
NON-CURRENT | ||||||||||||
Other debtors — related parties | — | — | ||||||||||
Other amounts receivable from third parties | 0.4 | 0.5 | ||||||||||
0.4 | 0.5 | |||||||||||
$m | ||||||||
2007 | 2006 | |||||||
CURRENT | ||||||||
Stores at net realisable value | 55.8 | 41.5 | ||||||
Ore stockpiles* | 39.9 | 26.9 | ||||||
Gold in circuit | 3.9 | 2.1 | ||||||
Finished goods | 3.2 | 4.8 | ||||||
102.8 | 75.3 | |||||||
$m | ||||||||
2007 | 2006 | |||||||
NON-CURRENT | ||||||||
Ore stockpiles* | 169.1 | 141.7 | ||||||
169.1 | 141.7 | |||||||
* | With effect from the start of the year a higher proportion of site general and administrative costs are now included in the valuation of inventory. |
-F-31-
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Foreign exchange risk | ||||||||||||||||||||
-10% | ||||||||||||||||||||
Carrying | +10% | |||||||||||||||||||
amount | Equity | Profit | Equity | Profit | ||||||||||||||||
31 December 2007 | $m | $m | $m | $m | $m | |||||||||||||||
Cash & Cash Equivalents | 174.2 | (6.6 | ) | (6.6 | ) | 6.6 | 6.6 | |||||||||||||
Total increase/ (decrease) | (6.6 | ) | (6.6 | ) | 6.6 | 6.6 | ||||||||||||||
Total gross pre-tax | Total tax effect | Total net post-tax | ||||||||||
Designation Year | $m | $m | $m | |||||||||
2008 | 76.7 | (23.0 | ) | 53.7 | ||||||||
2009 | 102.3 | (30.7 | ) | 71.6 | ||||||||
2010 | 81.9 | (24.6 | ) | 57.3 | ||||||||
2011 | 44.2 | (13.2 | ) | 31.0 | ||||||||
2012 | 5.8 | (1.7 | ) | 4.1 | ||||||||
2013 | 6.0 | (1.8 | ) | 4.2 | ||||||||
316.9 | (95.0 | ) | 221.9 | |||||||||
-F-32-
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||||||
Derivative financial instruments | 2007 | 2006 | 2005 | |||||||||
Current assets | ||||||||||||
- Forward contracts | — | 0.3 | 0.5 | |||||||||
— | 0.3 | 0.5 | ||||||||||
Non-current assets | ||||||||||||
- Forward contracts | — | 2.4 | 4.2 | |||||||||
— | 2.4 | 4.2 | ||||||||||
Current liabilities | ||||||||||||
- Forward contracts | — | 36.0 | 36.5 | |||||||||
- Calls options sold | — | 25.5 | 4.3 | |||||||||
— | 61.5 | 40.8 | ||||||||||
Non-current liabilities | ||||||||||||
- Forward contracts | — | 251.8 | 192.2 | |||||||||
- Call options sold | — | 22.2 | 34.9 | |||||||||
— | 274.0 | 227.1 | ||||||||||
Interest rate risk | ||||||||||||||||||||
-50 bps | ||||||||||||||||||||
Carrying | +50 bps | |||||||||||||||||||
amount | Profit | Equity | Profit | Equity | ||||||||||||||||
31 December 2007 | $m | $m | $m | $m | $m | |||||||||||||||
Cash & cash equivalents | 174.2 | (0.6 | ) | (0.6 | ) | 0.6 | 0.6 | |||||||||||||
Total increase/ (decrease) | (0.6 | ) | (0.6 | ) | 0.6 | 0.6 | ||||||||||||||
$m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Gold loans | — | 215.5 | 215.5 | |||||||||
Bank loans | — | 62.5 | — | |||||||||
Finance lease liabilities | 1.0 | — | — |
Less than 1 | Between 1 & | Between 2 & | ||||||||||||||
year | 2 years | 5 years | Over 5 years | |||||||||||||
Consolidated entity at 31 December 2007 | ||||||||||||||||
Trade and other payables | 64.0 | — | — | — | ||||||||||||
Finance lease liabilities | 0.3 | 0.4 | 0.3 | — |
-F-33-
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Less than 1 | Between 1 & | Between 2 & | ||||||||||||||
year | 2 years | 5 years | Over 5 years | |||||||||||||
Consolidated Entity at 31 December 2006 | ||||||||||||||||
Borrowings | 62.5 | 44.9 | 173.7 | — | ||||||||||||
Derivative financial instruments (net) | 61.2 | 46.0 | 207.7 | 17.9 | ||||||||||||
Trade and other payables | 46.6 | — | — | — |
$m | ||||||||||||||||
Less than 1 | Between 1 & | Between 2 & | Over 5 | |||||||||||||
year | 2 years | 5 years | years | |||||||||||||
Consolidated Entity at 31 December 2006 | ||||||||||||||||
Fixed forward contracts — cash flow hedges: | ||||||||||||||||
— outflow | 36.0 | 48.0 | 200.0 | — | ||||||||||||
Call options contracts — cash flow hedges: | ||||||||||||||||
— outflow | 25.5 | — | 4.3 | 17.9 | ||||||||||||
Gold lease rate swap contracts — cash flow hedges: | ||||||||||||||||
— outflow | — | 0.4 | 3.4 | — | ||||||||||||
— inflow | (0.3 | ) | (2.4 | ) | — | — | ||||||||||
Total derivatives | 61.2 | 46.0 | 207.7 | 17.9 | ||||||||||||
• | has a policy for establishing credit limits for the entities dealt with; | ||
• | may require collateral where appropriate; and | ||
• | monitors the overall financial strength of customers through publicly available credit information. |
2007 | 2006 | |||||||||||||||
$m | $m | |||||||||||||||
Carrying | Carrying | |||||||||||||||
amount | Fair value | amount | Fair value | |||||||||||||
Available for sale | ||||||||||||||||
financial assets | 2.5 | 2.5 | 33.0 | 33.0 | ||||||||||||
Receivables | 15.3 | 15.3 | 5.1 | 5.1 | ||||||||||||
Cash and cash equivalents | 174.2 | 174.2 | 47.0 | 47.0 | ||||||||||||
Derivative financial instruments | ||||||||||||||||
-Assets | — | — | 2.7 | 2.7 | ||||||||||||
-Liabilities | — | — | (335.5 | ) | (335.5 | ) | ||||||||||
Finance lease liabilities | (1.0 | ) | (1.0 | ) | — | — | ||||||||||
Accounts payable | (64.0 | ) | (64.0 | ) | (46.6 | ) | (46.6 | ) | ||||||||
Bank loans | — | — | (65.6 | ) | (65.6 | ) | ||||||||||
Gold loans | — | — | (215.5 | ) | (304.5 | ) |
-F-34-
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-F-35-
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2007 | 2006 | |||||||
NON-CURRENT | ||||||||
Deferred mining costs | 218.3 | 148.3 | ||||||
218.3 | 148.3 | |||||||
2007 | 2006 | |||||||
Carrying amount at start of year | 148.3 | 92.0 | ||||||
- Cash overburden costs attributable to current year mining activity | (49.7 | ) | (42.2 | ) | ||||
- Non-cash overburden costs attributable to current year mining activity | (10.5 | ) | (5.7 | ) | ||||
- Total cash costs of material mined during the period (cash) | 110.8 | 91.9 | ||||||
- Total non-cash costs of material mined during the period | 19.4 | 12.3 | ||||||
Carrying amount at end of year | 218.3 | 148.3 | ||||||
-F-36-
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||||||
2007 | 2006 | |||||||||||
LAND AND BUILDINGS | ||||||||||||
Cost brought forward | 118.8 | 117.7 | ||||||||||
Transfers from capital works in progress | 5.8 | 1.1 | ||||||||||
Assets acquired through business combination | 28 | 1.0 | — | |||||||||
Translation adjustments | 0.1 | — | ||||||||||
Cost carried forward | 125.7 | 118.8 | ||||||||||
Depreciation brought forward | (28.3 | ) | (25.3 | ) | ||||||||
Charge for the year | (3.3 | ) | (3.0 | ) | ||||||||
Depreciation carried forward | (31.6 | ) | (28.3 | ) | ||||||||
Net book value | 94.1 | 90.5 | ||||||||||
PLANT AND EQUIPMENT | ||||||||||||
Cost brought forward | 701.2 | 670.0 | ||||||||||
Additions | 6.2 | 7.0 | ||||||||||
Transfers from capital works in progress | 278.9 | 26.7 | ||||||||||
Assets acquired through business combination | 28 | 2.6 | — | |||||||||
Translation adjustments | 0.3 | — | ||||||||||
Reclassification | (5.2 | ) | — | |||||||||
Disposals / transfers | (18.1 | ) | (2.5 | ) | ||||||||
Cost carried forward | 965.9 | 701.2 | ||||||||||
Depreciation brought forward | (247.5 | ) | (225.6 | ) | ||||||||
Charge for the year | (38.3 | ) | (24.4 | ) | ||||||||
Reclassification | 0.2 | — | ||||||||||
Disposals / transfers | 2.6 | 2.5 | ||||||||||
Depreciation carried forward | (283.0 | ) | (247.5 | ) | ||||||||
Net book value | 682.9 | 453.7 | ||||||||||
DEFERRED DEVELOPMENT | ||||||||||||
Cost brought forward | 290.9 | 277.4 | ||||||||||
Additions | 41.6 | — | ||||||||||
Transfers from capital works in progress | 10.3 | 14.7 | ||||||||||
Assets acquired through business combination | — | — | ||||||||||
Translation adjustments | — | — | ||||||||||
Disposals | — | (1.2 | ) | |||||||||
Cost carried forward | 342.8 | 290.9 | ||||||||||
Depreciation brought forward | (93.2 | ) | (84.6 | ) | ||||||||
Charge for the year | (8.1 | ) | (9.8 | ) | ||||||||
Disposals | — | 1.2 | ||||||||||
Depreciation carried forward | (101.3 | ) | (93.2 | ) | ||||||||
Net book value | 241.5 | 197.7 | ||||||||||
DEVELOPMENT PROPERTIES | ||||||||||||
Cost brought forward | — | — | ||||||||||
Additions | — | — |
-F-37-
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||||||
2007 | 2006 | |||||||||||
Transfers from capital works in progress | — | — | ||||||||||
Assets acquired through business combination | 28 | 272.6 | — | |||||||||
Translation adjustments | 29.4 | — | ||||||||||
Disposals | — | — | ||||||||||
Cost carried forward | 302.0 | — | ||||||||||
Depreciation brought forward | — | — | ||||||||||
Charge for the year | — | — | ||||||||||
Disposals | — | — | ||||||||||
Depreciation carried forward | — | — | ||||||||||
Net book value | 302.0 | — | ||||||||||
CAPITAL WORKS IN PROGRESS | ||||||||||||
Cost brought forward | 205.0 | 66.9 | ||||||||||
Additions | 171.5 | 180.7 | ||||||||||
Transfers | (295.0 | ) | (42.6 | ) | ||||||||
Assets acquired through business combination | 28 | 23.6 | — | |||||||||
Translation adjustments | 2.6 | — | ||||||||||
Costs carried forward | 107.7 | 205.0 | ||||||||||
REHABILITATION | ||||||||||||
Cost brought forward | 6.8 | 6.2 | ||||||||||
Additions / (deductions) | (1.6 | ) | 0.6 | |||||||||
Cost carried forward | 5.2 | 6.8 | ||||||||||
Amortisation brought forward | (2.5 | ) | (2.4 | ) | ||||||||
Charge for the year | (0.2 | ) | (0.1 | ) | ||||||||
Amortisation carried forward | (2.7 | ) | (2.5 | ) | ||||||||
Net book value | 2.5 | 4.3 | ||||||||||
Total property, plant & equipment | 1,430.6 | 951.2 | ||||||||||
- F -38 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$ m | ||||||||||||
2007 | 2006 | |||||||||||
MINING INFORMATION | ||||||||||||
Acquired through business combination | 28 | 44.5 | — | |||||||||
Translation adjustments | 4.7 | — | ||||||||||
Cost carried forward | 49.2 | — | ||||||||||
Closing net book value | 49.2 | — | ||||||||||
EXPLORATION RIGHTS | ||||||||||||
Acquired through business combination | 28 | 1.7 | — | |||||||||
Translation adjustments | 0.2 | — | ||||||||||
Cost carried forward | 1.9 | — | ||||||||||
Closing net book value | 1.9 | — | ||||||||||
LICENSES | ||||||||||||
Acquired through business combination | 28 | 0.1 | — | |||||||||
Cost carried forward | 0.1 | — | ||||||||||
Charge for the year(1) | 0.0 | — | ||||||||||
Amortisation carried forward | 0.0 | — | ||||||||||
Closing net book value | 0.1 | — | ||||||||||
GOODWILL | ||||||||||||
Acquired through business combination | 28 | 36.3 | — | |||||||||
Translation adjustments | 3.9 | |||||||||||
Cost carried forward | 40.2 | — | ||||||||||
Charge for the year | — | — | ||||||||||
Amortisation carried forward | — | — | ||||||||||
Closing net book value | 40.2 | — | ||||||||||
OTHER INTANGIBLE ASSETS | ||||||||||||
Costs reclassified(2) | 5.2 | — | ||||||||||
Additions | 2.5 | — | ||||||||||
Cost carried forward | 7.7 | — | ||||||||||
Amortisation reclassified(2) | 0.2 | — | ||||||||||
Charge for the year(1) | 0.5 | — | ||||||||||
Amortisation carried forward | 0.7 | — | ||||||||||
Closing net book value | 7.0 | — | ||||||||||
Total intangible assets | 98.4 | — | ||||||||||
- F -39 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(1) | Amortisation of $0.5 million is included in depreciation and amortisation expense in the statement of comprehensive income | |
(2) | Landowner share based payments have been reclassified as an intangible asset. |
- F -40 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||
2007 | 2006 | |||||||
At beginning of year | 33.0 | — | ||||||
Additions | 1.3 | 33.0 | ||||||
De-classification on business combination | (33.0 | ) | — | |||||
Revaluation surplus/(deficit) transfer to Equity | 1.2 | — | ||||||
At end of year | 2.5 | 33.0 | ||||||
$ m | ||||||||
2007 | 2006 | |||||||
Listed securities: | ||||||||
Equity securities | 2.5 | 33.0 | ||||||
2.5 | 33.0 | |||||||
- F -41 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||
2007 | 2006 | |||||||
CURRENT | ||||||||
Trade creditors and accruals | 64.0 | 46.2 | ||||||
Amounts payable to related parties | — | — | ||||||
Other payables | — | 0.4 | ||||||
64.0 | 46.6 | |||||||
- F -42 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||
2007 | 2006 | |||||||
CURRENT | ||||||||
Employee provisions | 13.5 | 6.4 | ||||||
13.5 | 6.4 | |||||||
NON CURRENT | ||||||||
Employee provisions | 3.1 | 3.1 | ||||||
Other provisions | 1.4 | — | ||||||
Rehabilitation provision | 10.7 | 11.1 | ||||||
15.2 | 14.2 | |||||||
$m | ||||||||
2007 | 2006 | |||||||
Employee provisions current | ||||||||
Annual leave | 5.4 | 2.9 | ||||||
Sick leave | 1.0 | 0.6 | ||||||
Service bonus | 3.7 | 1.3 | ||||||
Short term incentives | 2.1 | 1.2 | ||||||
Long service leave current | 1.3 | 0.4 | ||||||
13.5 | 6.4 | |||||||
$m | ||||||||
2007 | 2006 | |||||||
Employee provisions non-current | ||||||||
Long service leave | 3.1 | 2.1 | ||||||
Service bonus | — | 1.0 | ||||||
3.1 | 3.1 | |||||||
$m | ||||||||
2007 | 2006 | |||||||
Rehabilitation provision | ||||||||
Carrying amount at start of year | 11.1 | 9.8 | ||||||
- additional / (reduction in) provision for changes in estimated cash outflows | (1.7 | ) | 0.4 | |||||
- additional provision due to ground disturbance | 0.1 | 0.2 | ||||||
- life of mine variation | — | — | ||||||
-acquisition of subsidiaries | 0.5 | — | ||||||
- interest charge | 0.7 | 0.7 | ||||||
Carrying amount at end of year | 10.7 | 11.1 | ||||||
- F -43 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||
2007 | 2006 | |||||||
CURRENT | ||||||||
Project financing facility — gold loan | — | 26.9 | ||||||
Ballarat facility | — | 35.6 | ||||||
Finance leases (Note 33) | 0.3 | — | ||||||
0.3 | 62.5 | |||||||
NON CURRENT | ||||||||
Project financing facility — gold loan | — | 188.6 | ||||||
Project financing facility — revolving credit facility | — | 30.0 | ||||||
Finance leases (Note 33) | 0.7 | — | ||||||
0.7 | 218.6 | |||||||
Ballarat | Revolving | |||||||||||||||
Goldfields | Gold | Credit | ||||||||||||||
2006 | Facility | Loan | Facility | Total | ||||||||||||
Repayment Maturity | $m | $m | $m | $m | ||||||||||||
Current | ||||||||||||||||
Less than one year | 35.6 | 26.9 | — | 62.5 | ||||||||||||
Non-current | ||||||||||||||||
Between one and two years | — | 44.9 | — | 44.9 | ||||||||||||
Between two and three years | — | 58.4 | — | 58.4 | ||||||||||||
In excess of three years | — | 85.3 | 30.0 | 115.3 | ||||||||||||
— | 188.6 | 30.0 | 218.6 | |||||||||||||
Total | 35.6 | 215.5 | 30.0 | 281.1 | ||||||||||||
Weighted average interest rate | 8.10 | % | 2.60 | % | 7.30 | % | 3.20 | % |
- F -44 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Ballarat | Revolving | |||||||||||||||
Goldfields | Gold | Credit | ||||||||||||||
2005 | Facility | Loan | Facility | Total | ||||||||||||
Repayment Maturity | $m | $m | $m | $m | ||||||||||||
Current | ||||||||||||||||
Less than one year | — | — | — | — | ||||||||||||
Non-current | ||||||||||||||||
Between one and two years | — | 26.4 | — | 26.4 | ||||||||||||
Between two and three years | — | 44.9 | — | 58.4 | ||||||||||||
In excess of three years | — | 143.6 | — | 143.6 | ||||||||||||
— | 215.5 | — | 215.5 | |||||||||||||
Total | — | 215.5 | — | 215.5 | ||||||||||||
Weighted average interest rate | — | 2.0 | % | — | 2.0 | % |
- F -45 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||||||
2007 | 2006 | |||||||
(a) Issued and paid up capital | ||||||||
Ordinary shares | ||||||||
Opening balance | 1,027.1 | 1,027.5 | ||||||
New issues — Ballarat acquisition | 316.5 | — | ||||||
New issues — capital raising | 989.0 | — | ||||||
Less: Transaction costs | (11.6 | ) | — | |||||
Shares reclassified as treasury shares | (1.3 | ) | (0.4 | ) | ||||
Closing balance | 2,319.7 | 1,027.1 | ||||||
Number of shares ’000 | ||||||||
2007 | 2006 | |||||||
(b)Issued and paid up capital | ||||||||
Opening balance | 1,284,049 | 1,284,225 | ||||||
New issues — capital raising | 508,277 | — | ||||||
New issues — Ballarat acquisition | 111,996 | — | ||||||
Shares reclassified as treasury shares | (410 | ) | (176 | ) | ||||
Closing balance | 1,903,912 | 1,284,049 | ||||||
- F -46 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
US$m | ||||||||
2007 | 2006 | |||||||
(a) Reserves | ||||||||
Hedging reserve — cash flow hedges | (221.9 | ) | (256.1 | ) | ||||
Employee Share based payments reserve | 3.3 | 0.2 | ||||||
Landowner Share based payments reserve | 5.2 | 5.2 | ||||||
Fair value reserve | 0.8 | — | ||||||
Foreign currency translation reserve | 42.6 | — | ||||||
(170.0 | ) | (250.7 | ) | |||||
Movements: | ||||||||
Hedging reserve — cash flow hedges | ||||||||
Opening balance | (256.1 | ) | (225.7 | ) | ||||
Fair value of cash flow hedges | (59.1 | ) | (40.6 | ) | ||||
Call options sold | — | (9.4 | ) | |||||
Deferred hedging gains / (losses) | 97.8 | (0.8 | ) | |||||
Deferred taxation | (4.5 | ) | 20.4 | |||||
(221.9 | ) | (256.1 | ) | |||||
Employee share based payments reserve | ||||||||
Opening balance | 0.2 | — | ||||||
Share rights expensed | 2.9 | 0.3 | ||||||
Deferred taxation | 0.2 | (0.1 | ) | |||||
3.3 | 0.2 | |||||||
Landowners share based payments reserve | ||||||||
Opening balance | 5.2 | — | ||||||
Share rights capitalised | — | 5.2 | ||||||
5.2 | 5.2 | |||||||
Fair value reserve | ||||||||
Opening balance | — | — | ||||||
Fair value of available for sale financial assets | 1.2 | — | ||||||
Deferred tax | (0.4 | ) | — | |||||
0.8 | — | |||||||
Foreign currency translation reserve | ||||||||
Opening balance | — | — | ||||||
Currency translation differences arising during the year | 42.6 | — | ||||||
42.6 | — | |||||||
(b) Retained Profits | ||||||||
Movements in retained profits / (losses) were as follows: | ||||||||
Opening balance | 35.5 | (18.3 | ) | |||||
Net profit for the year | (24.1 | ) | 53.8 | |||||
11.4 | 35.5 | |||||||
- F -47 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
• | the fair value of options issued to employees but not exercised | |
• | the fair value of shares issued to employees | |
• | in the parent entity — the fair value of shares and options issued to employees of subsidiaries |
• | the fair value of shares issued to local landowners |
- F -48 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$m | ||||
Purchase consideration | 316.5 | |||
Shares issued | 33.0 | |||
Cash paid — prior year | 3.5 | |||
Direct costs relating to the acquisition | 353.0 | |||
Fair value of net identifiable net assets | 353.0 | |||
— | ||||
(b) Reconciliation to cash flow | ||||
2007 | ||||
$m | ||||
Acquisition of subsidiary net of cash acquired: | ||||
Cash consideration | 3.0 | |||
Less: cash balances acquired | (22.6 | ) | ||
Net outflow/(inflow) of cash | (19.6 | ) | ||
Cash consideration is direct costs relating to the acquisition paid during the period. |
Acquiree’s | ||||||||
carrying amount | Fair value | |||||||
$m | $m | |||||||
Cash and cash equivalents | 22.6 | 22.6 | ||||||
Receivables | 0.7 | 0.7 | ||||||
Inventory | 0.4 | 0.4 | ||||||
Prepayments | 0.1 | 0.1 | ||||||
Property, plant and equipment | 27.2 | 27.2 | ||||||
Intangible assets | 1.0 | 46.3 | ||||||
Development properties | — | 272.6 | ||||||
Deferred tax asset | 20.8 | 20.8 | ||||||
Accounts payable | (3.9 | ) | (3.8 | ) | ||||
Goodwill | — | 36.3 | ||||||
Borrowings | (1.1 | ) | (1.1 | ) | ||||
Provisions | (0.8 | ) | (1.0 | ) | ||||
Deferred tax liability | (0.2 | ) | (68.0 | ) | ||||
Net assets | 66.8 | 353.0 | ||||||
- F -49 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Name of subsidiary | % ownership interest | Country of incorporation | ||
Niugini Mining Limited | 100% | Papua New Guinea | ||
Niugini Mining Australia Pty Ltd | 100% | Australia | ||
Lihir Management Company Limited | 100% | Papua New Guinea | ||
Lihir Business Development Limited | 100% | Papua New Guinea | ||
Lihir Services Australia Pty Limited | 100% | Australia | ||
Lihir Australian Holdings Pty Ltd | 100% | Australia | ||
Ballarat Goldfields Pty Ltd | 100% | Australia | ||
New Resource Pty Ltd | 100% | Australia | ||
Berringa Resources Pty Ltd | 100% | Australia | ||
Ballarat West Goldfields Pty Ltd | 100% | Australia | ||
Corpique No. 21 Pty Ltd | 100% | Australia |
- F -50 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(i) | Chairman — Non-Executive | |
Dr Ross Garnaut | ||
(ii) | Executive Directors | |
Mr Arthur Hood, Managing Director | ||
(iii) | Non-Executive Directors | |
Mr Bruce Brook | ||
Dr Peter Cassidy | ||
Dr Michael Etheridge (appointed 20 March 2007) | ||
Mrs Winifred Kamit | ||
Mr Geoff Loudon Mr Alister Maitland (appointed 20 March 2007) |
Name | Position | Employer | ||
Phil Baker | Chief Financial Officer | Lihir Services Australia Pty Ltd | ||
(from 21 January 2007) | ||||
Joe Dowling | General Manager Corporate Affairs | Lihir Services Australia Pty Ltd | ||
Murray Eagle | General Manager External Affairs & Sustainable | Lihir Gold Limited | ||
Development | ||||
Noel Foley | Executive General Manager, Operations | Lihir Gold Limited | ||
Graham Folland | General Manager Corporate Development | Lihir Services Australia Pty Ltd | ||
Stuart MacKenzie | Group Secretary and General Counsel | Lihir Services Australia Pty Ltd | ||
Wojciech Ozga | General Manager, Ballarat Operations | Lihir Services Australia Pty Ltd | ||
(from 8 March 2007) | ||||
Ron Yung | General Manager Organisation Performance | Lihir Services Australia Pty Ltd | ||
Richard Laufmann | Executive General Manager Australian Operations and | Lihir Services Australia Pty Ltd | ||
Business Development | ||||
(from 8 March 2007 to 8 June 2007) | ||||
Paul Fulton | Chief Financial Officer | Lihir Services Australia Pty Ltd | ||
(from 1 January 2007 to 20 January 2007) |
Name | Position | Employer | ||
Paul Fulton | Chief Financial Officer | Lihir Services Australia Pty Ltd | ||
Joe Dowling | Manager Investor Relations | Lihir Services Australia Pty Ltd | ||
Murray Eagle | General Manager External Affairs & Sustainable | Lihir Gold Limited | ||
Development | ||||
Noel Foley | Executive General Manager | Lihir Gold Limited | ||
(from 13 March 2006) | ||||
Graham Folland | General Manager Corporate Development | Lihir Services Australia Pty Ltd | ||
(from 1 March 2006) | ||||
Stuart MacKenzie | �� | Group Secretary and General Counsel | Lihir Services Australia Pty Ltd | |
(from 14 August 2006) | ||||
Ron Yung | General Manager Organisation Performance | Lihir Services Australia Pty Ltd | ||
(from 1 July 2006) | ||||
Jan Anderson | General Manager Operations | Lihir Gold Limited | ||
(from 1 January 2006 to 22 February 2006) | ||||
Mark Laurie | Company Secretary/General Counsel, Manager Corporate & | Lihir Gold Limited | ||
Towns | ||||
(from 1 January 2006 to 24 November 2006) |
- F - 51 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$ | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Short-term employee benefits | 4,884,602 | 2,889,353 | 2,750,407 | |||||||||
Post-employment benefits | 424,112 | 178,219 | 293,162 | |||||||||
Termination benefits | 842,467 | 1,106,205 | — | |||||||||
Long-term benefits | 25,967 | — | — | |||||||||
Share-based payments | 1,920,781 | 722,258 | — | |||||||||
8,097,929 | 4,896,035 | 3,043,569 | ||||||||||
Equity settled | ||||||||||||||||||||||||||||||||
Balance at | compensatio | Equity settled | ||||||||||||||||||||||||||||||
start of the | n | compensatio | Other | Balance at end | Vested and | |||||||||||||||||||||||||||
Name | year | (rights issue) | n | Exercised | changes | of the year | exercisable | Unvested | ||||||||||||||||||||||||
Directors of Lihir Gold Limited | ||||||||||||||||||||||||||||||||
Mr Arthur Hood | 181,677 | 4,061 | 1,531,194 | (49,208 | ) | — | 1,667,724 | — | 1,667,724 | |||||||||||||||||||||||
Other key management personnel of the Consolidated Entity | ||||||||||||||||||||||||||||||||
Phil Baker | — | — | 251,786 | — | — | 251,786 | — | 251,786 | ||||||||||||||||||||||||
Joe Dowling | 35,945 | 3,072 | 160,679 | (37,220 | ) | (1,797 | ) | 160,679 | — | 160,679 | ||||||||||||||||||||||
Murray Eagle | 54,225 | 3,547 | 213,977 | (4,634 | ) | (2,711 | ) | 264,404 | 51,514 | 212,890 | ||||||||||||||||||||||
Noel Foley | 47,926 | 4,139 | 242,342 | (50,148 | ) | (1,917 | ) | 242,342 | — | 242,342 | ||||||||||||||||||||||
Graham Folland | 41,080 | 1,593 | 206,297 | (42,984 | ) | (1,643 | ) | 204,343 | — | 204,343 | ||||||||||||||||||||||
Stuart MacKenzie | 13,734 | 4,634 | 176,422 | (14,969 | ) | — | 179,821 | — | 179,821 | |||||||||||||||||||||||
Wojciech Ozga | — | — | 165,235 | — | — | 165,235 | — | 165,235 | ||||||||||||||||||||||||
Ron Yung | 18,885 | 1,235 | 196,949 | (19,307 | ) | (1,171 | ) | 196,591 | — | 196,591 | ||||||||||||||||||||||
Paul Fulton | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
393,472 | 22,281 | 3,144,881 | (218,470 | ) | (9,239 | ) | 3,332,925 | 51,514 | 3,281,411 | |||||||||||||||||||||||
- F 52 -
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Balance at | Balance at | Vested | ||||||||||||||||||||||||||
start of the | Granted as | Other | end of the | and | ||||||||||||||||||||||||
Name | year | compensation | Exercised | changes | year | exercisable | Unvested | |||||||||||||||||||||
Directors of Lihir Gold Limited | ||||||||||||||||||||||||||||
Mr Arthur Hood | — | 362,263 | (176,071 | ) | (4,515 | ) | 181,677 | — | 181,677 | |||||||||||||||||||
Other key management personnel of the Consolidated Entity | ||||||||||||||||||||||||||||
Jan Anderson | — | — | — | — | — | — | — | |||||||||||||||||||||
Joe Dowling | — | 35,945 | — | — | 35,945 | — | 35,945 | |||||||||||||||||||||
Murray Eagle | — | 54,225 | — | — | 54,225 | — | 54,225 | |||||||||||||||||||||
Noel Foley | — | 47,926 | — | — | 47,926 | — | 47,926 | |||||||||||||||||||||
Graham Folland | — | 41,080 | — | — | 41,080 | — | 41,080 | |||||||||||||||||||||
Paul Fulton | — | — | — | — | — | — | — | |||||||||||||||||||||
Stuart MacKenzie | — | 13,734 | — | — | 13,734 | — | 13,734 | |||||||||||||||||||||
Ron Yung | — | 18,885 | — | — | 18,885 | — | 18,885 | |||||||||||||||||||||
— | 574,058 | (176,071 | ) | (4,515 | ) | 393,472 | — | 393,472 | ||||||||||||||||||||
Received during | ||||||||||||||||
the year on the | ||||||||||||||||
Balance at the | exercise of share | Other changes | Balance at the | |||||||||||||
Name | start of the year | rights | during the year | end of the year | ||||||||||||
Directors of Lihir Gold Limited | ||||||||||||||||
Dr Ross Garnaut | 53,225 | — | 48.298 | 101,523 | ||||||||||||
Mr Arthur Hood | 228,371 | 49,208 | 76,125 | 353,704 | ||||||||||||
Mr Bruce Brook | 10,000 | — | 23,334 | 33,334 | ||||||||||||
Dr Peter Cassidy | 33,225 | — | 11,076 | 44,301 | ||||||||||||
Dr Michael Etheridge | — | — | 61,728 | 61,728 | ||||||||||||
Mrs Winifred Kamit | 2,000 | — | 667 | 2,667 | ||||||||||||
Mr Geoff Loudon | 143,840 | — | — | 143,840 | ||||||||||||
Mr Alister Maitland | — | — | 30,864 | 30,864 | ||||||||||||
Other key management personnel of the Consolidated Entity Ordinary shares | ||||||||||||||||
Ordinary shares | ||||||||||||||||
Phil Baker | — | — | 10,000 | 10,000 | ||||||||||||
Joe Dowling | 15,000 | 37,220 | 5,000 | 57,220 | ||||||||||||
Murray Eagle | 4,634 | 4,634 | ||||||||||||||
Noel Foley | 35,191 | 50,148 | 11,731 | 97,070 | ||||||||||||
Graham Folland | 3,500 | 42,984 | 1,167 | 47,651 | ||||||||||||
Stuart MacKenzie | — | 14,969 | — | 14,969 | ||||||||||||
Wojciech Ozga | — | 54,000 | 54,000 | |||||||||||||
Ron Yung | 2,000 | 19,307 | 667 | 21,974 |
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Received during | ||||||||||||||||
the year on the | ||||||||||||||||
Balance at the | issuance of share | Other changes | Balance at the | |||||||||||||
Name | start of the year | rights | during the year | end of the year | ||||||||||||
Directors of Lihir Gold Limited | ||||||||||||||||
Ordinary shares | ||||||||||||||||
Dr Ross Garnaut | 53,225 | — | — | 53,225 | ||||||||||||
Mr Arthur Hood | — | 176,071 | 52,300 | 228,371 | ||||||||||||
Mr Bruce Brook | — | — | 10,000 | 10,000 | ||||||||||||
Dr Peter Cassidy | 33,225 | — | — | 33,225 | ||||||||||||
Mrs Winifred Kamit | 2,000 | — | — | 2,000 | ||||||||||||
Mr Geoff Loudon | 143,840 | — | — | 143,840 | ||||||||||||
Mr John O’Reilly | — | — | — | — | ||||||||||||
Other key management personnel of the Consolidated Entity | ||||||||||||||||
Ordinary shares | ||||||||||||||||
Jan Anderson(1) | — | — | — | — | ||||||||||||
Joe Dowling | 15,000 | — | — | 15,000 | ||||||||||||
Murray Eagle | — | — | — | — | ||||||||||||
Noel Foley | — | — | 35,191 | 35,191 | ||||||||||||
Graham Folland | — | 3,500 | 3,500 | |||||||||||||
Paul Fulton(1) | — | — | — | — | ||||||||||||
Stuart MacKenzie | — | — | — | — | ||||||||||||
Ron Yung | — | — | 2,000 | 2,000 |
(1) | Employment with Consolidated Entity ceased |
Interest paid | Number in | |||||||||
Balance at the | and payable for | Interest not | Balance at the | Consolidated | ||||||
start of the year | the year | charged | end of the year | Entity at the end | ||||||
Consolidated Entity | $ | $ | $ | $ | of the year | |||||
2007 | — | — | 373 | 8,769 | 1 | |||||
2006 | — | — | — | — | — |
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Remuneration and benefit band | Number of employees | |||||
$US | 2007 | 2006 | 2005 | |||
$ 30,001 - $ 40,000 | 37 | 48 | 11 | |||
$ 40,001 - $ 50,000 | 27 | 25 | 7 | |||
$ 50,001 - $ 60,000 | 24 | 17 | 6 | |||
$ 60,001 - $ 70,000 | 20 | 14 | 2 | |||
$ 70,001 - $ 80,000 | 26 | 7 | 3 | |||
$ 80,001 - $ 90,000 | 13 | 11 | 4 | |||
$ 90,001 - $100,000 | 11 | 8 | 5 | |||
$100,001 - $110,000 | 15 | 7 | 10 | |||
$110,001 - $120,000 | 17 | 10 | 4 | |||
$120,001 - $130,000 | 36 | 6 | 9 | |||
$130,001 - $140,000 | 24 | 7 | 5 | |||
$140,001 - $150,000 | 29 | 5 | 9 | |||
$150,001 - $160,000 | 21 | 5 | 7 | |||
$160,001 - $170,000 | 20 | 6 | 6 | |||
$170,001 - $180,000 | 7 | 6 | 7 | |||
$180,001 - $190,000 | 10 | 8 | — | |||
$190,001 - $200,000 | 2 | 2 | 3 | |||
$200,001 - $210,000 | 2 | 1 | 3 | |||
$210,001 - $220,000 | 4 | 5 | 3 | |||
$220,001 - $230,000 | 1 | — | 2 | |||
$230,001 - $240,000 | 1 | 3 | 1 | |||
$240,001 - $250,000 | 3 | 1 | 1 | |||
$250,001 - $260,000 | 3 | — | — | |||
$260,001 - $270,000 | 4 | 1 | — | |||
$270,001 - $280,000 | 1 | 1 | — | |||
$280,001 - $290,000 | — | 1 | 1 | |||
$310,001 - $320,000 | — | 1 | — | |||
$350,001 - $360,000 | 1 | — | — | |||
$360,001 - $370,000 | 1 | — | — | |||
$390,001 - $400,000 | — | — | 1 | |||
$450,001 - $460,000 | 1 | 1 | — | |||
$470,001 - $480,000 | 1 | — | 1 | |||
$480,001 - $490,000 | 1 | — | — | |||
$610,001 - $620,000 | 1 | — | — | |||
$640,001 - $650,000 | 1 | — | — | |||
$650,001 - $660,000 | 1 | — | — |
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$ | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(a) Assurance services | ||||||||||||
Audit services | ||||||||||||
PricewaterhouseCoopers, PNG Firm | 154,843 | 340,333 | 248,555 | |||||||||
PricewaterhouseCoopers, Other Overseas Firms | 530,295 | 114,976 | 104,589 | |||||||||
Total remuneration for audit services | 685,138 | 455,309 | 353,144 | |||||||||
Other assurance services | ||||||||||||
PricewaterhouseCoopers, PNG Firm | 16,026 | 58,115 | 51,942 | |||||||||
PricewaterhouseCoopers, Other Overseas Firms | 625,664 | 54,254 | 58,926 | |||||||||
Total remuneration for other assurance services | 641,690 | 112,369 | 110,868 | |||||||||
Total remuneration for assurance services | 1,326,828 | 567,678 | 464,012 | |||||||||
(b) Taxation services | ||||||||||||
PricewaterhouseCoopers, | 53,598 | 78,884 | 128,682 | |||||||||
Total remuneration for taxation services | 53,598 | 78,884 | 128,682 | |||||||||
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
$ m | ||||||||
2007 | 2006 | |||||||
Payable | ||||||||
- not later than one year | 0.7 | 1.0 | ||||||
- later than one year but not later than 2 years | 0.5 | 0.7 | ||||||
- later than two years but not later than 5 years | 0.7 | 1.3 | ||||||
- later than 5 years | — | 2.3 | ||||||
1.9 | 5.3 | |||||||
$ m | ||||||||
2007 | 2006 | |||||||
Payable | ||||||||
- not later than one year | 0.4 | — | ||||||
- later than one year but not later than 2 years | 0.4 | — | ||||||
- later than two years but not later than 5 years | 0.3 | — | ||||||
Total minimum lease payments | 1.1 | — | ||||||
Future finance charges | (0.1 | ) | — | |||||
Total finance lease liability | 1.0 | — | ||||||
Representing lease liabilities: | ||||||||
Current | 0.3 | — | ||||||
Non-current | 0.7 | — | ||||||
1.0 | — | |||||||
$ m | ||||||||
2007 | 2006 | |||||||
Capital expenditure commitments contracted for: | ||||||||
Payable — not later than one year | 9.0 | 68.3 | ||||||
9.0 | 68.3 | |||||||
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
• | Dr Garnaut was re-appointed as chairman for a three-year period commencing on May 1, 2004, subject to his continuing to hold office as a director and to certain other termination rights set out in the agreement; | |
• | No fees or benefits are payable to Dr Garnaut by reason of his retirement or other termination of office; and |
$ m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Net profit / (loss) attributable to ordinary shareholders | (24.1 | ) | 53.8 | 9.8 | ||||||||
Weighted average number of ordinary shares (millions) | 1,713.8 | 1,284.2 | 1,284.2 | |||||||||
Basic EPS (cents/share) | (1.4 | ) | 4.2 | 0.8 | ||||||||
Diluted number of ordinary shares (millions) | 1,717.4 | 1,287.5 | 1,284.2 | |||||||||
Diluted EPS (cents/share) | (1.4 | ) | 4.2 | 0.8 |
2007 | 2006 | 2005 | ||||||||||
Weighted average number used in calculating basic earnings per share (in millions) | 1,713.8 | 1,284.2 | 1,284.2 | |||||||||
Adjustments for calculation of diluted earnings per share: | ||||||||||||
Contingently issuable shares | 3.3 | — | — | |||||||||
Effect of share options on issue | 0.3 | — | — | |||||||||
Weighted average number used in calculating diluted earnings per share (in millions) | 1,717.4 | 1,287.5 | 1,284.2 |
Table of Contents
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
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Per share | ||||||||||||||||||||||||||||||||
right | Number | Number | Number | Number | Number | |||||||||||||||||||||||||||
Exercise | indicative | granted | exercised | forfeited | outstanding | exercisable | ||||||||||||||||||||||||||
price | value | Hurdle | Number at | during | during | during | at 31-Dec- | at 31-Dec- | ||||||||||||||||||||||||
US$ | US$ | conditions | 1-Jan-07 | period | period | period | 07 | 07 | ||||||||||||||||||||||||
— | 2.529 | 1 | 120,814 | 123,870 | (48,940 | ) | (32,561 | ) | 163,183 | 39,313 | ||||||||||||||||||||||
— | 2.501 | 2 | 165,961 | 123,876 | (122,645 | ) | — | 167,192 | 43,316 | |||||||||||||||||||||||
— | 1.943 | 3 | 181,213 | 185,791 | (102,597 | ) | (13,644 | ) | 250,763 | 64,972 | ||||||||||||||||||||||
— | 1.892 | 4 | 181,221 | 185,801 | (102,603 | ) | (13,644 | ) | 250,775 | 64,974 | ||||||||||||||||||||||
— | — | 5 | — | 40,731 | (33,128 | ) | — | 7,603 | 7,603 | |||||||||||||||||||||||
— | 1.562 | 6 | — | 1,840,903 | — | — | 1,840,903 | — | ||||||||||||||||||||||||
— | 1.506 | 7 | — | 1,840,928 | — | — | 1,840,928 | — | ||||||||||||||||||||||||
Total | 649,209 | 4,341,900 | (409,913 | ) | (59,849 | ) | 4,521,347 | 220,178 |
Number exercised | Exercise date | Weighted average price at exercise date (i) | ||||
409,913 | 14-20 Sep 2007 | USD 2.93 |
i. | Purchased over a 5 day period due to restrictions on the volume that could be traded on any one day. |
(a) | exercise price: $ nil (2006 — $ nil) | |
(b) | expected volatility: 42% (2006 — 43%) | |
(c) | risk-free interest rate: 6.12% (2006 - 6.05%). | |
(d) | Expected life of right (years): 10 years | |
(e) | Weighted average share price at grant date: $3.07 (2006 – $2.07) | |
(f) | expected dividend yield: 0% (2006 - 0%) |
$US ‘m | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Executive share plan | 2.9 | 0.5 | — |
1. | Individuals are set key performance indicators (KPI’s) based around the Company’s performance in developing corporate management and structures in line with Board policies to raise the long-term value of the Company, including through project and geographic diversification. The performance condition will be assessed by the Board. |
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2. | This performance condition will be assessed by the Board against changes in the net present value of the Company. This assessment is to have regard to the amount and timing of net expected cash flows, as indicated by reserves, costs and other relevant factors. | ||
Certain potential sources of change in the Company’s net present value will not be included in the assessment of this performance condition as they have been assessed by the Board to be beyond the individuals control and the control of the management team generally. The sources for which adjustments are to be made to date are changes in the gold price, variations in the hedge delivery programme, hydrocarbon pricing (HFO, diesel and lubricants), inflation and changes in exchange rates between the US dollar and the Australian dollar or PNG kina. | |||
3. | This performance condition will be assessed by the Board by reference to the performance of the: |
– | Company’s “total shareholder return” or TSR over the performance period from the VWAP (volume weighted average share price) Month Employed until the testing date using the VWAP; and | ||
– | Average “total shareholder return” of the Comparator Group using the Comparator Group’s VWAP for the same time periods as applicable above. |
If the Company’s annual TSR when compared with the Comparator Group’s annual TSR: |
– | is greater by 10% or more, all of the share rights subject to this condition will vest; or | ||
– | does not exceed the Comparator Group’s, no share rights subject to this condition will vest; or | ||
– | is greater by less than 10% a straight-line calculated proportion of the share rights subject to this condition will vest. |
Total shareholder return or TSR is, broadly, share price growth and dividends reinvested, excluding the impacts of franking credits and taxations. | |||
Comparator Group (Sept 05 grant and Jan 06 grants) | |||
Prior to March 2006: | |||
Newmont, Barrick, Newcrest, Anglo Gold, Oxiana, Goldfields (South Africa), Placer Dome, Rio Tinto Limited, Harmony and Croesus | |||
Grants after March 2006: | |||
Newmont, Barrick, Newcrest, Anglo Gold, Oxiana, Goldfields (South Africa), Kingsgate and Sino Gold. | |||
4. | This performance condition will be assessed to the extent to which the Company’s “total shareholder return” increases over the performance period using the VWAP Month for each participant as the starting share value for the TSR until the testing date VWAP. | ||
If the Company’s TSR over the performance period increases by: |
– | 15% or more, the participant is entitled to all of the TSR growth share rights vesting; | ||
– | 5% or less, the participant will not be entitled to any TSR growth share rights vesting; or | ||
– | More than 5% but less than 15%, the participant will be entitled to a pro rated number of TSR growth share rights vesting calculated on a straight line basis. |
5. | This grant was made to existing participants who held share rights at the time of the 3 for 1 Entitlement offer and were unable to participate in the offer due to trading restrictions leading up to the capital raising. In recognition of Participants in the LESP not being eligible to participate in the Entitlement Offer, the directors resolved that the number of share rights vested for each Participant be adjusted to take into account each Participant’s entitlement to share rights had they been eligible to participate. The grant is subject to the same three year service period restrictions. | ||
6. | This performance measure will be assessed on the extent to which Company’s TSR increases over the performance period compared to growth in the TSX Global Gold Index (“Index”) over the performance period. If Company’s TSR when compared with the TSX Global Gold Index: |
– | is less than the Index, then none of the share rights subject to this tranche will vest; | ||
– | is equal to the Index (Target case), then a fixed % [refer to (a) to (d) below] of the share rights subject to this tranche will vest; or | ||
– | is equal to 125% of the Index (Stretch case), then 100% of the share rights subject to this tranche will vest; or | ||
– | if the Company’s TSR is greater than the Index but less than 125% of the Index, then a proportion of the share rights (calculated on a straight-line basis) will vest. |
Where the fixed % for the Target case is equal to: | |||
(a) | 50% | ||
(b) | 33.3% | ||
(c) | 37.5% | ||
(d) | 40% |
The grant is split into two 50% tranches with performance periods of 1 July 2007 to 31 December 2008 and 1 July 2007 to 31 December 2009. | |||
7. | This performance measure will be assessed on the extent to which the Company’s TSR increases over the performance period compared to the TSR growth of companies in the Comparator Group over the performance period. If the Company’s TSR when compared with the TSR’s of the companies in the Comparator Group: |
– | is at less than the 50th Percentile (“P50”), then none of the share rights subject to this tranche will vest; | ||
– | is equal to P50 (Target case), then [a fixed % [refer to (a) to (d) below] of the share rights subject to this tranche will vest; or | ||
– | is equal to the 90th Percentile (��P90”) (Stretch case), then 100% of the share rights subject to this tranche will vest. |
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– | if Company’s TSR is greater than P50 but less than P90, then a proportion of the share rights subject to this tranche (calculated on a straight-line basis) will vest. |
Where the fixed % for the Target case is equal to: | |||
(a) | 50% | ||
(b) | 33.3% | ||
(c) | 37.5% | ||
(d) | 40% | ||
The Comparator Group is composed of those companies in the TSX Global Gold Index with a market capitalisation of more than US$1billion at the commencement of the performance period, plus Newcrest, which remain listed companies at the end of the performance period. | |||
The grant is split into two 50% tranches with performance periods of 1 July 2007 to 31 December 2008 and 1 July 2007 to 31 December 2009. |
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• | obtaining approvals from applicable regulatory bodies such as the Foreign Investment Review Board, the Australian Securities and Investments Commission, the ASX, POMSoX, PNGSC and the TSX as appropriate; | ||
• | obtaining exchange control approval from the Bank of Papua New Guinea; | ||
• | if required under decree 96-634 of August 9, 1996 determining the terms of application of Law 95-553 of July 18, 1995 being the Mining Code of the Republic of the Ivory Coast, obtaining the authorisation of theAdministration des Minesto implement the Scheme; | ||
• | obtaining Equigold shareholder approval of the Scheme at the scheme meeting by the requisite majorities under theCorporations Act;and | ||
• | obtaining Court approval of the Scheme in accordance with section 411(4)(b) of theCorporations Act. |
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1. | The financial statements and notes of the Company and of the Consolidated Entity: |
a. | comply with International Financial Reporting Standards and other mandatory professional reporting requirements; and, | ||
b. | give a true and fair view, in all material respects, of the financial position as at 31 December 2007 and performance of the Company and the Consolidated Entity for the year ended on that date; and are in accordance with the Papua New Guinea Companies Act 1997. |
2. | There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. |
Ross Garnaut | Arthur Hood | |
Chairman | Managing Director | |
15 April 2008 |
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CONSOLIDATED ENTITY | ||||||||||||
2007 | 2006 | |||||||||||
PGK Mil | PGK Mil | 2005 | ||||||||||
Revenue | 1,389.5 | 1,156.0 | 658.3 | |||||||||
Net Profit | (67.2 | ) | 161.2 | 28.7 | ||||||||
Total Assets | 6,427.7 | 4,366.8 | 3,882.9 | |||||||||
Total Liabilities | (402.8 | ) | (1,997.0 | ) | (1,577.2 | ) | ||||||
Net Assets | 6,024.9 | 2,369.8 | 2,305.7 | |||||||||
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(Registrant)
By Arthur Hood
Title: Managing Director
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Exhibit 1 * | Constitutionof Lihir Gold Limited, effective as of April 28, 1998 (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2000). | |
Exhibit 4 (a) * | Syndicated Facilities Agreementbetween Lihir, ABN AMRO Australia Limited, ABN AMRO Bank N.V. (Australia Branch), Australia and New Zealand Banking Group Limited, Bayerische Hypo-und Vereinsbank AG, BNP Paribus, Bank of Western Australia Limited, Commonwealth Bank of Australia, Macquarie Bank Limited, National Australia Bank Limited, Natexis Banques Populaires, Societe General, Société Génerale Australia Branch, WestLB AG, and Westpac Banking Corporation dated September 13, 2005 incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (b) * | Refinancing Coordination Deed 2005between Lihir, ABN AMRO Australia Limited, ABN AMRO Bank NV, Commonwealth Bank of Australia, Macquarie Bank Limited, Société Génerale and Société Génerale Australia Branch, dated September 13, 2005. (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (c) * | Amending Deed (Security Trust Deed)between Lihir Niugini Mining Limited, Niugini Mining (Australia) Pty Ltd, ABN AMRO Australia Limited, ABN AMRO Bank NV, Commonwealth Bank of Australia, Macquarie Bank Limited, Société Génerale and Société Génerale Australia Branch, Mitsui & Co. Precious Metals Inc., and J. Aron & Company dated September 13, 2005 (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (d) * | Lihir Gold Security Trust Deedbetween Lihir, Niugini Mining Limited, Niugini Mining (Australia) Pty Ltd, ABN AMRO Australia Limited, ABN AMRO Bank NV, Citibank N.A., and J. Aron & Company dated November 22, 2000 (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2000). | |
Exhibit 4 (e) * | Lihir Gold Limited Offshore Chargebetween Lihir and ABN AMRO Australia Limited dated September 13, 2005 (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (f) * | Lihir Gold Deed of Security (PNG) 2005between Lihir and ABN AMRO Australia Limited dated September 13, 2005 (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (g) * | Lihir Gold Mortgage of Bullion Accountbetween Lihir and ABN AMRO Australia Limited dated September 13, 2005 (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (h) * | Special MiningLease, dated as of March 17, 1995, between Lihir and the PNG Government (incorporated by reference to Lihir’s Form F-1 filed September 6, 1995). | |
Exhibit 4 (i) * | Mining Development Contract,dated as of March 17, 1995, between Lihir and the PNG Government (incorporated by reference to Lihir’s Form F-1 filed September 6, 1995). | |
Exhibit 4 (m) * | Compensation Agreement for Land, Crops, Water and Air,dated as of April 26, 1995, between Lihir Management Company, Lihir Mining Area Landowners Association Incorporated, Block Executives (for and on behalf of the Landowners), Catholic Mission (Kavieng Property Trust) and the United Church in PNG and the Solomon Islands (incorporated by reference to Lihir’s Form F-1 filed September 6, 1995). | |
Exhibit 4 (n) * | Putput and Ladolam Relocation Agreementdated as of April 26, 1995, between Lihir Management Company, Lihir Mining Area Landowners Association Incorporated and the persons named in various schedules to the agreement (incorporated by reference to Lihir’s Form F-1 filed September 6, 1995). | |
Exhibit 4 (o) * | Integrated Benefits Package Review Status Statement (“LSDP”)between Nimamar Rural Local Level Government, Lihir Mining Area Landowners Association, the State of Papua New Guinea, New Ireland Provincial Government and Lihir dated November 9, 2005 (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (p) * | Amended and Restated Lihirian Equity Settlement Agreementdated January 27, 2006 between Mineral Resources Development Company Limited, Mineral Resources Lihir Limited and the European Investment Bank (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2005). |
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Exhibit 4 (q) * | Patent and Know-How License Agreementdated August 5, 1995 between Sherritt Inc and Lihir Management Company Limited for and on behalf of Lihir, together with amendment thereto dated August 18, 1995 (incorporated by reference to Lihir’s annual report on Form 20- F for the fiscal year ended December 31, 2003). | |
Exhibit 4 (r) * | Number not used | |
Exhibit 4 (s) * | Agreement for the Servicesof Professor Ross Garnaut as Chairman of Lihir, dated April 26, 2004 between Lihir and Maccullochella Pty Ltd. (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2003). | |
Exhibit 4 (v) * | Parent Deposit Agreementbetween Lihir Gold Limited and Australia and New Zealand Banking Group Limited dated February 12, 2007(incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2006). | |
Exhibit 4 (w) * | Management Services Agreement (PNG)between Lihir Services Australia Pty Limited and Lihir Gold Limited dated May 9, 2006 (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2006). | |
Exhibit 4 (x) * | Management Services Agreement (Australia)between Lihir Services Australia Pty Limited and Lihir Gold Limited dated May 9, 2006 (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2006). | |
Exhibit 4 (y) * | Merger Implementation Agreementbetween Lihir Gold Limited, Lihir Australian Holdings Pty Limited and Ballarat Goldfields NL dated October 17, 2006(incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2006). | |
Exhibit 4 (z) * | Share Subscription Agreementbetween Lihir Australian Holdings Pty Limited and Ballarat Goldfields NL dated October 17, 2006(incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2006). | |
Exhibit 4 (aa) * | Deed Pollbetween Lihir Gold Limited the holders of fully paid ordinary shares in Ballarat Goldfields N.L. dated December 12, 2006 (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2006). | |
Exhibit 4 (ab) | DNX (Australia) Contractbetween Lihir Gold Limited and DNX Australia Pty Ltd dated January 2, 2008. | |
Exhibit 4 (ac) | DNX (PNG) Contractbetween Lihir Gold Limited and DNX Papua New Guinea Ltd dated January 2, 2008. | |
Exhibit 4 (ad) | Revised IBP (Integrated Benefits Package Review Status Statement (“LSDP”))between Lihir Gold Limited and The People of Lihir represented by The Mining Area Landowners Association Inc and The Nimamar Rural Local-Level Government dated May, 2 2007. | |
Exhibit 4 (ae) | Gekko Contractbetween Ballarat Goldfields NL and Gecko Systems Pty Ltd made on March 26, 2007. | |
Exhibit 4 (af) | Spinifex Contractbetween Ballarat Goldfields NL and Spinifex Projects Pty Ltd made on or about May 12, 2005. | |
Exhibit 4 (ag) | Pybar Contractbetween Ballarat Goldfields NL and Pybar Mining Services Pty Ltd made on October 18, 2004. | |
Exhibit 4 (ah) | Washingtons Drilling Contractbetween Lihir Gold Limited and Washingtons Drilling (International) Limited NZ made on August 2, 2007. | |
Exhibit 4 (ai) | Merger Implementation Agreementbetween Lihir Gold Limited, Lihir Australian Holdings Pty Ltd and Equigold NL dated March 20, 2008. | |
Exhibit 4 (aj) | Lihir Executive Share Plan (LESP)for Lihir Gold Limited approved by shareholders on April 24, 2007 |
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Exhibit 8 | Significant subsidiaries | |
Exhibit 12 (a) | 302 Certification by Chief Executive Officer | |
Exhibit 12 (b) | 302 Certification by Chief Financial Officer | |
Exhibit 13 (a) | 906 Certification by Chief Executive Officer | |
Exhibit 13 (b) | 906 Certification by Chief Financial Officer |
* | Indicates exhibits lodged with SEC in previous Form 20-Fs. |
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