NORTHERN STAR RESOURCES LTD Interim Financial Report For the Six Months Ended 31 December 2011

Transcription

1 NORTHERN STAR RESO OURCES LTD Interim Financial Report For the Six Monthss Ended 31 December 2011

2 CORPORATE DIRECTORY Directors Christopher Rowe (NonExecutivee Chairman) Bill Beament (Managing Director) Peter Farris (NonExecutive) Michael Fotios (NonExecutive) Company Secretary Karen Brown Registered Office 65 Burswood Road Burswood WA 6100 Telephone: (08) Facsimile: (08) Principal Office 24 Mumford Place Balcatta WA 6021 Telephone: (08) Facsimile: (08) Web Page: Share Registry Advanced Share Registry Limited 150 Stirling Highway Nedlands WA 6009 Telephone: (08) Investor website: Home Stock ASX Limited (Australian Securities Exchange) 2 The Esplanade Perth WA 6000 ASX Code: NST Auditors Exchange Rothsay Chartered Accountants St Georges Tce Perth WA 6000

3 TABLE OF CONTENTS Review of Operations Directors' Report Lead Auditor s Independence Declaration Statement of Comprehensive Income Statement of Financial Position Statement of Cash Flows Statement of Changes in Equity Notes to the d Interim Financial Statements Directors' Declaration Independent Review Report

4 REVIEW OF OPERATIONS Overview Northern Star Resources Ltd is a gold producingg and exploration company with a resource basee approaching one million ounces, located in the highly prospective AshburtonPilbara region of Western Australia. An updated resource report will be finalised in the March 2012 quarter. q Northern Star's strategy is to increase the production at its Paulsen s Gold Mine to 100,000 ounces per annum rate by the end of Exploration will continue at both the Ashburton and Paulsen ss Gold Project with the goal of building a second 100,000 ounce per annum operation at the Ashburton Project. Health and Safety The Health and Safety of our employees and contractors continues to be a fundamental measuree of success for the business. The ongoing focus and commitment to a safe workplace is resulting in a notable improvement in our safety performance. After a record 527 days LTI free, a Losss Time Injury ("LTI") was recorded resulting from an operator injuring a hand and missing one shift. The operatorr received medical treatment and has since made a full recovery. Mine Production A total of 36,029 ounces was mined at an average grade of 6.74 g/t Au for the period. Cashh costs for the period were $665 per ounce Au. Total cost per tonne has decreased by 30% since moving to owner operator and the full benefit of this change out are now being realised. There were 170,182 tonnes milled during the period p at an average head grade of 6.89 g/t Au for 35,128 ounces recovered. Unprocessed ore stocks available for mill feed at the end of the period totalled 5,590 tonnes containing 1,067 ounces o of gold. Gold in circuit at the end of the period totalled 1,080 ounce. Bullion on hand amounted to 2,,451 ounces and was subsequently sold realising $3.8M. Both of these items are reflected in the accounts as gold in circuit at cost. HY122 Underground Ore Ore Production Goldd Production Cashh Cost Mined 166,253 Grade g/ /t 6.74 Contained Ounces 36,0299 Milled 170,182 Grade g/ /t 6.89 Recovery % 93.2 oz 35,1288 A$ $/oz 665 Financial Result Gold sales for the December half were 34,154 ounces, at an average realised price of $1,624 per ounce. Revenue was $55.6 million and grosss profit from operations was $33. 4 million. Northern Star is in a strong financial position with cash on hand of A$ $37.9 million as at 31 December

5 REVIEW OF OPERATIONS Business Development During the period Northern Star was granted the exploration tenement E08/2232. This new tenement does not contain any resource or reservee ounces of gold. The Company is in an option deal to divest its Golden Crown tenement (E80/2394). Northern Star continues to review r its mining options within the Paulsens Goldmine with thee intention of developing an open pit project as a well as undertaking mining evaluations e at its nearby Ashburton Gold Project. Potential project acquisitions are being evaluated constantly to provide future increases in shareholder value. Exploration Exploration and project development drilling has been very active in the December Half and this level of activity will accelerate further into Drilling continued during the Half Year at both the Paulsens and Ashburton Gold Projects. Strong results were received from the Paulsenss Mine, with the most significant intersection to date of 12,178g/t Au in the Voyager 2 position. p This indicates the potential of this newly discovered mineralisation to addd further to the Company s existing Mineral Resource Inventory. Northern Star is in the processs of updating its Mineral Resourcee to be released in the March 2012 quarter. Over the next six months surface exploration inn the Ashburton region will be targeting the high grade zones. Exploration will accelerate at the Paulsens Gold Project including follow up on thee newly discovered GabbroOffset position. Greenfields exploration will continue at the Cheerona Project to follow up on soill assay results which are currentlyy pending from the t Laboratory. 2

6 REVIEW OF OPERATIONS Details of 2010 Mineral Resource Performance GOLD MINERAL RESOURCES 1 As at December 31, MEASURED (M) 2010 Based on attributable ounces Tonnes (000's) Grade Ounces (g/t) (000's) INDICATED (I) INFERRED Tonnes Grade Ounces Tonnes Grade Ounces (000's) (g/t) (000's) (000's) (g/t) (000's) TOTAL MEASURED/INDICATED/ INFERRED Tonnes s Grade Ounces (000's)) (g/t) (000's) Cut Offf Grade PAULSENS GOLD Surface Paulsens Mt Clement Underground Upper Paulsens Voyager 1 Stockpiles Gold in Circuit PROJECT g/t Au 1.0 g/t Au 3 g/t Au 3 g/t Au ASHBURTON GOLD PROJECT Surface Mt Olympus 1, , , , g/t Au KIMBERLEY PROJECT Surface Golden Crown g/t Au TOTAL 1, , , , Resources are exclusivee of Reserves and do not have demonstrated economic viability. Resources for Ashburton Gold Project acquired February 2011 Competent Persons Statements The information in this Report that relates to Paulsens and Mt Olympus mineral resource estimation, exploration results, data quality, geological interpretations, potential for eventual economic extraction and estimates of exploration potential, is based on information compiled by or under the supervision of Brook Ekers, (Member AIG), who is a ffulltime employee of Northern Star Resources Ltd. Mr.Ekers has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". The information in this Report that relates to Exploration Results, Mineral Resources or Ore Reserves in the Exploration section of this report is based on information compiled by Jason Boladeras, who is a Member of the Australian Institute of Geoscientists (AIG) and Exploration Manager and employee of Northern Star Resources. Mr Boladeras has sufficient experience which is relevant to the style of mineralisationn and type of deposit under consideration and to the activity whichh he is undertaking to qualify as a Competent Person as defined iin the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Boladeras consents to the inclusion in the report of the matters based on n his information in the form and context in which it appears. Forward Looking Statements Some of the information contained in this Report has been obtained from third parties and has not been independently verified by Northern Star. In particular the financial projections model on whichh the forward looking statements included in this Report have not been prepared by the Company and the Company has not undertaken any verification of the model. The Company takes no responsibility and is not liable for the projections in any way. Given the risks and uncertainties that may cause the Company s actual future results, performance or achievements to be materially different from that expected, expressed or implied forward looking statements included in this report, undue reliance should not be placed on these statements. Nothing contained in this Report is a promise or representation as to the future. No assurance or representation is made by any person that any forecast or projection will be achieved. Accordingly, investors must make their own investigations and inquiries regarding all assumptions, uncertainties and contingencies, which may affect the future operations of the Company. 3

7 DIRECTORS REPORT The directors off Northern Star Resources Ltd (Northern Star) present their report together with the consolidatedd interim financial report for the six months ended 31 December Directors The Directors in office at the date of this reportt and at any time during the half year are as follows. Christopher K G Rowe William J (Bill) Beament Peter C P Farris Michael G Fotios Chairman Managing Director r Director Director Corporate Information Nature of Operations and Principal Activities The principal activities of the Group are: Mining of gold deposits at Paulsens Construction and development of gold mining operationss at Paulsen s Exploration and development of gold deposits in the Ashburton region of Western Australia. Review of Operations Refer to the Review of Operations preceding thiss Report of the Directors. Dividends No dividend has been paid or declared by the Company up to the date of this report. The Directors are continuously looking at a ways to better manage the company s capital structure and returns to shareholders. Financial Position The Group did not have any controlled entitiess prior to 31 December Accordingly, thee Group does not have any 31 December comparative financial information. 31 December 2010 comparative financial information for the Parent Company iss shown instead. The Group reported a net profit for the period of o $12.5 million (2010: $5 million). Total assets of the Group have increased by $ 21.3 million fromm 30 June to $70 million for the period major movements were: An increase in Cash of $23.3 million; and A decrease in Trade and other receivables $3.8 million. ending 31 December The Total liabilities of the group have increased by $5.5 $ million fromm 30 June 2011 to $28.1 million for the period ending 31 December This was primarily due to an increase in Current Tax Liability of $4.44 million. Significant Changes in State of Affairs Other than as stated above in the review of operations, there was no significant change in the entity's state of affairs during the half year ended 31 December

8 DIRECTORS REPORT Subsequent Events There are no other matters or circumstances other than the future development of the production site that havee arisen since 31 December 2011 that have or may significantly affect the operations, results, or state of affairs of the Group in future financial years, except for the following: On 18 January 2012, 70,720 shares were issued to employees in recognition of significant operational performance under the Employeee Share plan. Auditor Independence The lead auditor's independence declaration is set out on page and forms part of the directors' report for thee six months ended 31 December Dated at Perth this 8 th day of February Signed in accordance with a resolution of the directors. Bill Beament Managing Director 5

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10 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the six months endedd 31 December 2011 Note 31Dec11 Company 31Dec10 0 Revenue from continuing operations Mine operating costs Gross profit 2 (a) 3 (a) 55,555 (22,165) 33,390 58,369 (18,071) 40,298 Other revenuee 2 (b) Acquisition Royalty expense Government Royalty expense Depreciation and amortisation Administrationn Exploration expenses Finance costs Profit from continuing operations before income tax (1,302) (9,343) (2,331) (3,153) (247) 17,847 (16,905) (1,466) (14,316) (2,029) (340) (295) 5,042 Income tax expense (5,354) Net Profit after tax attributable to members of the Company 12,493 5,042 Other comprehensive income Total comprehensive income 12,493 5,042 Earnings per share for loss from continuing operations attributable to the ordinary equity holderss of the Company: Cents Cents Basic earnings/(loss) per share (cents per share) Diluted earnings/(loss) per share (cents per share)

11 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2011 CURRENT ASSETSS Cash and cash equivalents Trade and other receivables Inventory Other current assets TOTAL CURRENT ASSETS Note Dec11 37,885 1,143 4, ,452 d 30Jun ,574 4,940 4, ,9799 NON CURRENT ASSETS Investments Trade and other receivables Property, plant & equipment Exploration tenements Mine Development Deferred tax assets TOTAL NON CURRENT ASSETS ,773 11,323 2, ,572 10,9666 9,0299 1, ,775 TOTAL ASSETS 70,024 48,7544 CURRENT LIABILITIES Trade and other payables Interestbearing loans and borrowings Provisions Current tax liabilities Other liabilities TOTAL CURRENT LIABILITIES (a) 14 (a) 12 7,518 1, ,347 17,129 10,5999 1, , ,547 NON CURRENT LIABILITIES Interestbearing loans and borrowings Provisions Deferred tax liabilities TOTAL NON CURRENT LIABILITIES 13 (b) 14 (b) 5,528 2,841 2,584 10,953 2,750 2,863 1,467 7,0800 TOTAL LIABILITIES 28,082 22,627 NET ASSETS 41,942 26,127 EQUITY Contributed equity Reserves Retained earnings TOTAL EQUITY , ,922 41,942 18, ,429 26,127 8

12 CONSOLIDATED STATEMENT OF CASH FLOWS For the six months endedd 31 December 2011 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusivee of GST) Interest received Finance costs NET CASH INFLOW/(OUTFLOW) FROM OPERATINGG ACTIVITIES Note 31Dec11 55,502 (27,712) 645 (242) 28,193 Company 31Dec ,5155 (20,358) 95 (307) 36,945 CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant & equipment Proceeds from sale of property, plant and equipment Payments for development of mining properties Exploration and evaluation expenditure Acquisition of mine site NET CASH OUTFLOW FROM INVESTING ACTIVITIES (3,957) 8 (6,755) (2,293) (12,997) (663) (1,833) (273) (33,526) (36,295) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares and conversion of options Payments for security depositss Proceeds from financing facility Proceeds from borrowings Principal Repayments NET CASH INFLOW FROM FINANCING ACTIVITIES 3,214 3,865 (964) 6,115 4,1144 (480) 15,106 (15,003) 3,7377 NET DECREASE IN CASH AND CASH EQUIVALENTS HELD 21,311 4,387 Cash and cash equivalents at beginning of the half year 16,574 1,095 CASH AND CASH EQUIVALENTS AT THE END OF THE T HALF YEAR 5 37,885 5,482 9

13 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Notes Attributable to equity Contributed Reserves Equity holders of the Company C Retainedd Total Equity Earningss 0 At 1 July 2011 Equity issues (net of transaction costs) Share based payments Transfer from option reserve Total comprehensive income for the half year 18,306 3, (249) 7, ,127 3, , ,493 At 31 December , , ,942 Notes Attributable to equity Contributed Reserves Equity holders of the Company C Retainedd Total Equity Earningss 0 At 1 July , (8,855)) 5,084 Equity issues (net of transaction costs) Share based payments Transfer from option reserve Total comprehensive income for the half year 4, (309) 4, ,0411 5,041 At 31 December , (3,814)) 14,331 10

14 NOTES TO THE FINANCIAL STATEMENTS 1. Accounting Policies (i) Reporting Entity Northern Star Resources Ltd ("Northern Star" or "the Company") is a company domiciled in Australia. The interim financial report of the Company as at and for the six months endedd 31 December 2011 comprises the Company and a its subsidiaries (together referred to as the "Group"). (ii) Statement of Compliance These general purpose financial statements for the halfyear ended 31 December 2011 have been prepared in accordance with AASB A 134 Interim Financial Reporting and the Corporations Act The halfyear financial statements do not include all notes of the type normally included within the Annual Financial Statements and thereforee cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidatedd entity as the full financial statements. The halfyear any public announcements made by Northern Star Resources Ltd during the halfyear reporting period in accordance with the continuous disclosure requirements of the Corporations Act For the purpose of preparing the halfyear financial statements, the halfyear has been treated as a discretee reporting period. financial statements should be read in conjunction with the annual financial statements for the year ended 30 June 2011 and (iii) Basis of Preparation The halfyear financial statements have been prepared in accordance with the historical cost basis. All values are rounded to the nearest thousand dollars ($ 000) unless otherwise stated under the option available to the company under ASIC Class C Order 98/100. The Companyy is an entity to which the class order applies. The financial statements have been prepared onn the basis that the Company will continue to meet m its commitments and can therefore continue normal business activities and realise assets and settle liabilities in the ordinary course of business. The ability of the company to do this is dependent on its funding from operational cash flows from its Paulsens Gold Project. Att the date of the signing of the financial statements, the Directors are confident that the necessary level of operational cash flows will be achieved and as such the going concern basis is appropriate. (iv) Significant Accounting Policies The accounting policies applied by the Group in this consolidated interim financial report are consolidated financial report as at and for the year y ended 30 June REVENUE (a) Revenue from continuing operations Sale of gold Sale of silver (b) Other revenue Interest revenuee Other Revenue the same as those applied by 31Dec11 55, , ,388 the Group in its Company 31Dec , , ,

15 NOTES TO THE FINANCIAL STATEMENTS 3. EXPENSESS (a) Mine operating costs Mining Expensess Processing Expenses Admin Expenses (b) Operating Cost Acquisition Royalty expense Government Royalty expense Depreciation and amortisation Depreciation Amortisation Administration expenses Exploration expenses Finance costs 31Dec11 11,089 6,979 4,097 22,165 1,302 3,138 6,205 2,331 3, ,376 38,541 Company 31Dec ,832 5,851 1, ,071 16,905 1,4666 3,035 11,280 2, ,350 53, EARNINGS PER SHARE Basic profit/(loss) per share (cents) Diluted profit/(loss) per share (cents) Profit/(loss) used to calculate earnings per share () Weighted average number of ordinary shares during the period used in calculation of basic profit/(loss) per p share Weighted average number of ordinary shares during the period used in calculation of diluted profit/(loss) per share 31Dec , ,640, ,195,359 Company 31Dec , ,824, ,930, CASH AND CASH EQUIVALENTS Cash at bank Cash on Deposit 31Dec11 36,125 1,760 37,885 d 30Jun ,508 1, ,574 12

16 NOTES TO THE FINANCIAL STATEMENTS 6. TRADE AND OTHER RECEIVABLES Amounts receivable from Sundry debtors Goods and services tax recoverable Fuel Rebates Other receivables 31Dec ,143 d 30Jun , , INVENTORY Consumables Ore Gold In Circuit 8. OTHER CURRENT ASSETS Prepayments 31Dec11 1, ,844 4,406 31Dec11 18 d 30Jun ,197 2,698 4,812 d 30Jun PROPERTY, PLANT AND EQUIPMENTT Plant and equipment brought forward Additions Disposals/transfers Depreciation expense Plant and equipment carried forward 31Dec11 10,966 3,957 (3,150) 11,773 d 30Jun ,5455 (15) (5,570) 10,

17 NOTES TO THE FINANCIAL STATEMENTS 10. EXPLORATION AND EVALUATION COSTS Exploration costs brought forward Exploration costs this year Exploration costs now written off Transfer to development expenditure Exploration costs carried forward 31Dec11 9,029 5,447 (3,153) 11,323 d 30Jun11 0 4,503 5,293 (767) 9, DEVELOPMENT EXPENDITURE Development expenditure brought forward (acquired) Transfer from exploration and evaluation costs Development expenditure this year Accumulated amortisation Development expenditure carried forward 31Dec11 1,053 26,636 (25,059) 2,630 d 30Jun11 0 4,869 15,038 (18,854) 1, TRADE AND OTHER PAYABLES Trade payables Other payables 31Dec11 7,518 7,518 d 30Jun , , BORROWINGS (a) Current Term Purchase Hire Purchase Agreement (b) NonCurrent Term Purchase Hire Purchase Agreement 31Dec ,358 1, ,107 5,528 d 30Jun ,140 1, ,329 2,750 14

18 NOTES TO THE FINANCIAL STATEMENTS 14. PROVISIONS (a) Current Provision for annual leave Provision Other (b) NonCurrent Provision for long service leave Provision for rehabilitation 31Dec ,676 2,841 d 30Jun ,6766 2, CONTRIBUTED EQUITY Issued Capital Ordinary shares fully paid Movements in Ordinary Share Capital 31Dec11 351,990,153 d 30Jun11 304,830,925 Number of Shares 304,830,925 47,159, ,990,153 Summary of Movements Opening balance at 1 July 2011 Placements Exercise of Options Transfer from Option Reserve Less: Cost of Issue Closing Balance at 31 December 2011 Company C 18,306 3, , SHAREBASED OPTION RESERVE 31Dec11 d 30Jun11 0 Balance at the beginning of the year Option exercised Option forfeited Option expense Balance at the end of the year 392 (11) (238) (224) (154) COMMITMENTS AND CONTINGENT LIABILITIES There have been no other significant changes to the Group's commitments since 30 June

19 NOTES TO THE FINANCIAL STATEMENTS 18. SEGMENT INFORMATION Management has determined the operating segments based on the reports reviewed by the board of directors that are used too make strategic decisions. The consolidated entity does not havee any operating segments with discrete financial information. All the group s assets and liabilities are located within Australia. The Board of Directors review internal management reports onn a monthly basis that is consistent with the information provided in the statement of comprehensive income, statement of financial position and statement of cash flows. As a result no reconciliation is required becausee the informationn as presented iss what is used by the Board to make m strategic decisions. 19. EVENTS SUBSEQUENT TO YEAR END On 18 January 2012, 70,720 shares were issued to employees in recognition of significant operational performance under the Employee Share plan. Other than this, there are no other matters or circumstances that have arisen since 31 December 2011 that have or may significantly s affect the operations, results, or state of affairs of the Group in future financial years. 16

20 DIRECTORS DECLARATION In the opinion of the directors of Northern Star: 1. the financial statements and notes set s out on pagess 7 to 16, are in accordance withh the Corporations Act 2001 including: (a) giving a true and fair view of the Group's financial position as at 31 Decemberr 2011 and of its performance for the six month period ended on that date; andd (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and 2. there are reasonable grounds to believe that the Company will be able to pay its debts as and whenn they become due d and payable. Dated at Perth this 8 th of February Signed in accordance with a resolution of the directors: Bill Beament Managing Director 17

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