Jeu 23 Sep 2010 10:53
Albidon Interim financial report for 6 months ended 30-06-10
Albidon Limited
(subject to Deed of Company Arrangement)
Interim financial report for the six months
ended 30 June 2010
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
2
Corporate Information
ABN 86 107 288 755
DIRECTORS Valentine Chitalu (Non-executive Director)
Alasdair Cooke (Executive Director)
Yimin Zhang (Executive Director, a representative of Jinchuan Group Limited).
Sanlin Zhang (Non-executive Director, appointed 31 August 2010, as a
representative of Jinchuan Group Limited).
Jianke Gao (Non-executive Director, appointed 31 August 2010, as a
representative of Jinchuan Group Limited).
Harold Wang (Non-executive Director, appointed 31 August 2010).
SECRETARY Daniel Davis
REGISTERED OFFICE 3/F Barclays House, Wickhams Cay
Road Town, Tortola, British Virgin Islands
PRINCIPAL PLACE OF BUSINESS Level 1, 8 Colin Street
West Perth Western Australia 6005
Telephone: (08) 9211 4600
Facsimile: (08) 9211 4699
Email: info@albidon.com
Website: www.albidon.com
SOLICITORS Blakiston & Crabb
1202 Hay Street
West Perth, Western Australia 6005
AUDITORS Ernst & Young
11 Mounts Bay Road
Perth, Western Australia 6000
SHARE REGISTRY Computershare Investor Services Pty Ltd
452 Johnston Street
Abbotsford, Victoria 3067
Telephone: 1300 850 505
Facsimile: 1800 783 447
Albidon Limited shares are listed on the Australian Stock Exchange (ASX). The Company was delisted from the
Alternative Investment Market (AIM) on 16 November 2009.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
3
Table of Contents
Directors’ report ........................................................................................................ 4
Auditor’s independence declaration ......................................................................... 6
Consolidated statement of comprehensive income .................................................. 7
Consolidated statement of financial position ............................................................ 8
Consolidated statement of cash flows ....................................................................... 9
Consolidated statement of changes in equity ........................................................ 10
Notes to the financial statements ........................................................................... 11
1. General Information .................................................................................. 11
2. Basis of preparation and accounting policies ............................................. 11
3. Operating Segments .................................................................................. 18
4. Revenue, income and expenses ................................................................. 19
5. Loss per share ........................................................................................... 19
6. Cash and cash equivalents ......................................................................... 20
7. Interest bearing loans and borrowings ...................................................... 20
8. Related party transactions......................................................................... 22
9. Commitments and contingencies .............................................................. 22
10. Events after the balance sheet date .......................................................... 22
Directors’ Declaration ............................................................................................. 23
Independent auditor’s review report ...................................................................... 24
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
4
Directors’ report
The Directors present their report on the Consolidated Entity consisting of Albidon Limited and the entities it
controlled at the end of, or during, the six months ended 30 June 2010.
Directors
The names and details of the Company’s directors in office during the reporting period and until the date of this
report are as follows:
Alasdair Cooke (Executive Director)
Valentine Chitalu (Non-Executive Director)
Yimin Zhang (Executive Director)
Xie Penngen (Non-Executive Director, resigned 31 August 2010)
Sanlin Zhang (Non-Executive Director, appointed 31 August 2010)
Jianke Gao (Non-Executive Director, appointed 31 August 2010)
Harold Wang (Non-Executive Director, appointed 31 August 2010)
Review and Results of Operations
Principal Activities
The principal activity of the Consolidated Entity during the period was the exploration, evaluation, development and
production from mineral interests.
The operating loss after income tax for the six months ended 30 June 2010 was US$11,459,867 (2009: US$7,795,115
profit).
Group Highlights
(i) Munali Nickel Project
The Operations was officially reopened by his Excellency, Mr Rupiah Bwezani Banda, the President of the
Republic of Zambia, on 26th March. Both Albidon’s management and the Chairman of Jinchuan attended the
reopening ceremony.
The Munali Nickel Mine maintained an excellent safety record.
During the past half year the Munali Nickel Mine mined a total of 255,169t of ore @ 0.79% Ni and processed
a total of 267,200t of ore @ 0.7% Ni.
The Company produced a total of 14,257 tonnes of nickel concentrates @ 7.80% Ni containing 1,086 tonnes
of Ni metal. All concentrates have been sold to Jinchuan and US$13.3million has been recognised as revenue
for the period.
(ii) Exploration Projects
The Company approved a US$150,000 exploration budget for the Songea Nickel Sulfide Project in Tanzania in
this half year. The field exploration work involving a total of 2,940m diamond drilling of 8 targets, will
commence during the third quarter of this year.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
5
(iii) Corporate Activities
In February 2010, the Company appointed Jian-Hua Sang as Chief Executive Officer.
In March 2010, Mr Tony Weber, was appointed as Assistant General Manager to take the portfolio of
Commercial, Procurement and Administration.
In April 2010, the Company finalised a USD$20m working capital arrangement with Jinchuan Group Ltd.
In June 2010, Mr Jianke Gao was appointed as the interim General Manager for the Munali Nickel Mine.
(iv) Significant events after the balance sheet date
On 3 August 2010, Mining Plus completed and presented the new Life of Mine study with a revised
mining schedule for 1Mtpa.
On 31 August 2010 the company accepted the resignation of Mr Xie PengGen as a Director of the
company and the company appointed Messrs Sanlin Zhang, Jianke Gao and Harold Wang as Directors of
the company. Messrs Sanlin Zhang and Jianke Gao act as representatives of Jinchuan.
This report is made in accordance with a resolution of the Directors
Alasdair Cooke
Managing Director
Perth, 22 September 2010
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
6
Auditors’ independence declaration
Auditor's Independence Declaration to the Directors of Albidon Limited
In relation to our review of the financial report of Albidon Limited for the half year ended 30 June 2010, to
the best of my knowledge and belief, there have been no contraventions with the independence
requirements of the international professional ethical pronouncements.
Ernst & Young
J C Palmer
Partner
Perth
22 September 2010
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
7
Consolidated statement of comprehensive income
For the six months ended 30 June 2010
30-Jun-10 30-Jun-09
Notes US$ US$
Continuing Operations
Sale of goods 13,333,900 2,915,905
Other revenue 4 (a) 26,388 80,719
Revenue 13,360,288 2,996,624
Cost of sales (13,333,900) (2,915,905)
Gross profit 26,388 80,719
Release of hedge reserve - 30,581,708
Depreciation expense (18,791) (20,216)
Exploration and evaluation expense (237,514) (435,351)
Impairment of mine property and development (8,649,580) (9,073,940)
Other expenses from ordinary activities 4 (b) (2,580,370) (2,533,634)
(Loss)/profit from continuing operations before income tax (11,459,867) 18,599,286
Income tax expense - (10,804,171)
(Loss)/Profit from continuing operations after income tax (11,459,867) 7,795,115
Other comprehensive income
Fair value of hedges taken from equity - (30,581,708)
Income tax expense on other comprehensive income - 10,804,171
Other comprehensive income for the period, net of tax - (19,777,537)
Total comprehensive income for the period (11,459,867) (11,982,422)
Loss attributable to:
Owners of the Company (11,459,867) (7,795,115)
Total comprehensive income attributable to:
Owners of the Company (11,459,867) (11,982,422)
Earnings per share for loss attributable to the ordinary equity
holders of the parent:
Basic loss per share (cents) 5 (3.31) 3.71
Diluted loss per share (cents) 5 (3.31) 3.71
The accompanying notes are an integral part of these consolidated financial statements.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
8
Consolidated statement of financial position
As at 30 June 2010
30-Jun-10 31-Dec-09
Notes US$ US$
Current assets
Cash and cash equivalents 6 14,182,575 13,252,191
Trade and other receivables 11,144,512 2,619,690
Prepayments 238,265 55,117
Inventories 4,914,126 3,919,582
Other financial assets 20,277 -
Total current assets 30,499,755 19,846,580
Non-current assets
Plant and equipment 73,316,177 72,210,185
Mine properties and development 37,781,064 29,848,192
Total non-current assets 111,097,241 102,058,377
Total assets 141,596,996 121,904,958
Current liabilities
Trade and other payables 13,522,864 5,276,144
Interest bearing loans and borrowings 7 100,358,120 97,599,273
Other financial liabilities - -
Provisions 238,862 133,421
Total current liabilities 114,119,846 103,008,838
Non-current liabilities
Interest bearing loans and borrowings 7 20,000,000 -
Provisions 2,795,749 2,795,749
Total non-current liabilities 22,795,749 2,795,749
Total liabilities 136,915,595 105,804,587
Net assets 4,681,401 16,100,371
Equity
Capital and reserves attributable to the Company's equity holders
Issued capital 3,458,218 3,458,218
Share premium reserve 120,415,498 120,415,498
Capital raising costs (3,519,564) (3,519,564)
Share capital 120,354,152 120,354,152
Option premium reserve 4,024,788 3,983,891
Convertible note reserve 2,226,596 2,226,596
Accumulated loss (121,924,135) (110,464,268)
Total equity 4,681,401 16,100,371
The accompanying notes are an integral part of these consolidated financial statements.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
9
Consolidated statement of cash flows
For the six months ended 30 June 2010
30-Jun-10 30-Jun-09
Notes US$ US$
Cash flows from operating activities
Receipts from customers (inclusive of VAT) 6,137,596 4,916,740
Payment to suppliers and employees (8,645,283) (6,096,471)
Interest and other revenue received 26,388 80,719
Net cash flows from/(used in) operating activities (2,481,299) (1,099,012)
Cash flows from investing activities
Purchase of plant and equipment (1,124,782) (598,422)
Payments for mine development (15,205,613) (2,038,293)
Payment to suppliers (exploration) (237,514) (425,107)
Proceeds from sale of plant and equipment - 35,261
Net cash flows (used in) investing activities (16,567,909) (3,026,561)
Cash flows from financing activities
Proceeds from issue of ordinary shares - -
Share issue transaction costs - -
Payment of finance lease liabilities - (1,628,803)
Interest and other costs of finance paid (20,409) (1,512,363)
Proceeds from loans 20,000,000 400,000
Net cash flows from financing activities 19,979,591 (2,741,166)
Net (decrease) in cash and cash equivalents 930,384 (6,866,739)
Effects of exchange rate changes - 25,886
Cash and equivalents at beginning of the period 13,252,191 7,742,618
Cash and equivalents at end of the period 14,182,575 901,765
The accompanying notes are an integral part of these consolidated financial statements.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
10
Consolidated statement of changes in equity
Issued
Capital
Share
Premium
Option
Premium
Reserve
Hedging
Derivative
Reserve
Capital
Raising Costs
Convertible
Note Reserve
Accumulated
Profit /(Loss) Total
US$ US$ US$ US$ US$ US$ US$ US$
Balance at 1 January 2010 3,458,218 120,415,498 3,983,891 - (3,519,564) 2,226,596 (110,464,268) 16,100,371
Loss for the period - - - - - - (11,459,867) (11,459,867)
Other comprehensive income, net of
tax - - - - - - - -
Total comprehensive income for
the period - - - - - - (11,459,867) (11,459,867)
Transactions by owners, recorded
directly in equity
Share-based payments - - 40,897 - - - - 40,897
Total transactions with owners - - 40,897 - - - - 40,897
Balance at 30 June 2010 3,458,218 120,415,498 4,024,788 - (3,519,564) 2,226,596 (121,924,135) 4,681,401
Balance at 1 January 2009 2,102,064 114,771,652 4,231,783 19,777,537 (3,519,564) - (110,054,042) 27,309,430
Loss for the period - - - - - - 7,795,115 7,795,115
Other comprehensive income, net of
tax - - - (19,777,537) - - - (19,777,537)
Total comprehensive income for
the period - - - (19,777,537) - - 7,795,115 (11,982,422)
Transactions by owners, recorded
directly in equity
Share-based payments - - (103,387) - - (103,387)
Total transactions with owners - - (103,387) - - - - (103,387)
Balance at 30 June 2009 2,102,064 114,771,652 4,128,396 - (3,519,564) - (102,258,927) 15,223,621
The accompanying notes are an integral part of these consolidated financial statements.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
11
Notes to th e financial sta teme nts
1. General Information
The condensed interim financial report of Albidon Limited for the six months ended 30 June 2010 were authorised for
issue in accordance with a resolution of the Directors dated 22 September 2010.
Albidon Limited (“the Company”) is a Company incorporated in the British Virgin Islands, on 11 April 2000, whose
shares are publicly traded on the Australian Stock Exchange (“ASX”). Its registered place of business is Level 1, 8 Colin
Street, West Perth, 6005, Western Australia.
The principal activities of the Company and its subsidiaries (“the Consolidated Entity”) are described in the Directors’
report.
2. Basis of preparation and accounting policies
(a) Basis of preparation
This condensed interim financial report of Albidon Limited and all its subsidiaries for the six months ended 30 June
2010 has been prepared in accordance with IAS 34 Interim Financial Reporting.
The condensed interim financial report does not include all the notes of the type normally included within the annual
financial report and therefore cannot be expected to provide as full an understanding of the financial performance,
financial position and financing and investing activities of the Consolidated Entity as the full financial report.
It is recommended that the condensed interim financial report be read in conjunction with the annual report for the
year ended 31 December 2009 and considered together with any public announcements made by Albidon Limited
during the half-year ended 30 June 2010 in accordance with ASX continuous disclosure obligations of the ASX listing
rules.
The functional currency of the Company and each of the subsidiaries is US dollars. The represents the currency of the
primary economic environment in which the Company and each of the subsidiaries operates.
The condensed interim financial report has been prepared on a historical cost basis.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
12
(i) Going concern
As at 30 June 2010, the Consolidated Entity had net current liabilities of US$83,620,091.
On 22 April 2009, the Company was placed in voluntary administration by the Directors, owing to the delay in the
Tranche 2 funding to be provided by Jinchuan Group Limited and no alternative sources of funding being available to
the Company.
Further details on the events occurring subsequent to balance date are provided in note 10 to the financial
statements.
As at the date of this report, the Consolidated Entity has principal repayments under outstanding facilities due by 30
September 2011 of $29 million and is currently in default in respect of the convertible notes of US$21 million relating
to its suspension and subsequent removal from the Alternative Investment Market (“AIM”) and for non payment of
accrued interest under the US $ facilities agreement.
In the directors’ opinion there are reasonable grounds to believe that the Consolidated Entity will be able to continue
as a going concern and pay its debts as and when they become due and payable for the following reasons:
(i) On 2 July 2009, Jinchuan Group Limited entered into settlement agreements with the senior lenders to acquire
all outstanding amounts under the Subordinated Debt Agreement with Albidon Zambia Limited from the
European Investment Bank (“EIB”) and Barclays Capital Plc (“Barclays”);
(ii) On 13 September 2009, Albidon Zambia Limited entered into a replacement US$ Facilities Agreement with
Jinchuan Group Limited, totalling $55 million. Under this agreement, over the term of the facility, Albidon
Zambia Limited is not obliged to make a repayment if the repayment would result in Albidon Zambia Limited’s
insolvency
(iii) On 30 October 2009, Jinchuan Group Limited provided $28 million in cash to the Consolidated Entity through
an equity injection of $7 million and a convertible notes issue of $21 million;
(iv) The receipt of these amounts allowed for the settlement of all outstanding creditors;
(v) On 23 December 2009, Albidon Limited entered into a loan agreement with Jinchuan Jitian Nickel Pty Ltd for a
US$20 million facility that was fully drawn down on the same day. Part of these proceeds was used to settle a
lease facility with Barclays Bank Zambia;
(vi) On 19 April 2010, Albidon Zambia Limited entered into a loan agreement with Jinchuan Jitian Nickel Pty Ltd for
a US$20 million facility of which US$10 million was drawn on 21 April 2010 and the remaining US$10 million
was drawn on 28 May 2010;
(vii) Following the above settlement with Barclays Zambia all debt ultimately rests with Jinchuan Group companies;
(viii) On 26 March 2010, the Munali mine was officially reopened, following the recommencement of mining
operations, through the deployment of a new management team supported by Jinchuan representatives and
with the previous offtake agreement with Jinchuan Group Limited continuing to be honoured;
(ix) The receipt of a letter by the Company from Jinchuan Jintian Nickel Pty Ltd confirming it is their intention to
extend the repayment date of the facility referred to in (v) above, for which repayment is due by 30 September
2010, for twelve months to 30 September 2011; and
(x) The receipt of a letter by the Company from Jinchuan Group Limited confirming that they will not seek any
actions available to them under the convertible note agreement in respect of existing defaults if Albidon
Limited is relisted on the ASX by 8 October 2010.
(xi) The receipt of a letter by the company from Jinchuan Group Limited that they will not seek any action available
to them under the US$ facility agreement in respect of the existing defaults.
(xii) As at the date of the report the company has $9 million in receivables from Jinchuan.
Notwithstanding the above matters, the ability of the Consolidated Entity to continue as a going concern as at the
date of this report, is dependent on the following:
(i) The Consolidated Entity achieving a ramp up in production to budgeted production levels;
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
13
(ii) Net cashflows from operation achieving budgeted outcomes;
(iii) The ongoing financial support of the Consolidated Entity’s majority shareholder, Jinchuan Group Limited, who
as at the date of this report owns 50.4% of the share capital of the company; and
(iv) The Consolidated Entity having continued access to its loan facilities with Jinchuan Group companies and the
ability to manage repayments under these loan agreements.
As at the date of this report, the Directors are confident that the Consolidated Entity will achieve the above matters
and relist on the ASX by 8 October 2010, and as a result the going concern assumption continues to be appropriate.
Should the Consolidated Entity be unable to materially achieve the matters set out above, there is significant
uncertainty as to whether the Consolidated Entity will be able to meet its debts as and when they fall due, and thus
continue as a going concern.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded
assets amounts, nor to the amounts or classification of liabilities that might be necessary should the Consolidated
Entity not be able to continue as a going concern.
(ii) Accounting policies
Except as described below, the accounting policies applied by the Consolidated Entity in these condensed
consolidated interim financial statements are the same as those applied by the Consolidated Entity in its consolidated
financial statements as at and for the year ended 31 December 2009.
(iii) Change in accounting policy
In the current year, the Group has adopted all new and revised Standards and Interpretations issued by the
International Accounting Standards Board (the IASB) and the International Financial Reporting Interpretation
Committee (IFRIC) of the IASB that are relevant to its operations and effective for accounting periods beginning on or
after 1 January 2010. The adoption of these new and revised Standards and Interpretations has not resulted in any
changes to the Groups accounting policies.
Future Accounting Standards
Certain International Financial Reporting Standards and IFRIC Interpretations have recently been issued or amended
but are not yet effective and have not been adopted by the Group for the half year ended on 30 June 2010.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
14
Reference Title Summary
Application
date of
standard
Application
date for
Group
IFRS 9 Financial
Instruments:
Recognition and
Measurement of
Financial Assets
IFRS 9 includes requirements for the classification and
measurement of financial assets resulting from the first part of
Phase 1 of the IASB’s project to replace IAS 39 Financial
Instruments: Recognition and Measurement.
These requirements improve and simplify the approach for
classification and measurement of financial assets compared
with the requirements of IAS 39. The main changes from IAS 39
are described below.
(a) Financial assets are classified based on (1) the objective
of the entity’s business model for managing the financial
assets; (2) the characteristics of the contractual cash
flows. This replaces the numerous categories of financial
assets in IAS 39, each of which had its own classification
criteria.
(b) IFRS 9 allows an irrevocable election on initial
recognition to present gains and losses on investments
in equity instruments that are not held for trading in
other comprehensive income. Dividends in respect of
these investments that are a return on investment can
be recognised in profit or loss and there is no
impairment or recycling on disposal of the instrument.
(c) Financial assets can be designated and measured at fair
value through profit or loss at initial recognition if doing
so eliminates or significantly reduces a measurement or
recognition inconsistency that would arise from
measuring assets or liabilities, or recognising the gains
and losses on them, on different bases.
1 January 2013 1 January
2014
IAS 32 Financial
Instruments:
Presentation
The amendment provides relief to entities that issue rights in a
currency other than their functional currency, from treating the
rights as derivatives with fair value changes recorded in profit
or loss. Such rights will now be classified as equity instruments
when certain conditions are met.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
15
Reference Title Summary
Application
date of
standard
Application
date for
Group
IFRS 9 Financial
Instruments:
Recognition and
Measurement
The revised Standard introduces a number of changes to the
accounting for financial assets, the most significant of which
includes:
► two categories for financial assets being amortised cost or
fair value
► removal of the requirement to separate embedded
derivatives in financial assets
► strict requirements to determine which financial assets can
be classified as amortised cost or fair value, Financial assets
can only be classified as amortised cost if (a) the contractual
cash flows from the instrument represent principal and
interest and (b) the entity’s purpose for holding the
instrument is to collect the contractual cash flows
► an option for investments in equity instruments which are
not held for trading to recognise fair value changes through
other comprehensive income with no impairment testing
and no recycling through profit or loss on derecognition
► reclassifications between amortised cost and fair value no
longer permitted unless the entity’s business model for
holding the asset changes
► changes to the accounting and additional disclosures for
equity instruments classified as fair value through other
comprehensive income
1 January 2013 1 January
2014
IAS 24 (Revised) Related Party
Disclosures
The revised IAS 24 simplifies the definition of a related party,
clarifying its intended meaning and eliminating inconsistencies
from the definition, including:
(a) the definition now identifies a subsidiary and an
associate with the same investor as related parties of
each other;
(b) entities significantly influenced by one person and
entities significantly influenced by a close member of the
family of that person are no longer related parties of
each other; and
(c) the definition now identifies that, whenever a person or
entity has both joint control over a second entity and
joint control or significant influence over a third party,
the second and third entities are related to each other.
A partial exemption is also provided from the disclosure
requirements for government-related entities. Entities that are
related by virtue of being controlled by the same government
can provide reduced related party disclosures.
1 January 2011 1 January
2012
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
16
Reference Title Summary
Application
date of
standard
Application
date for
Group
IFRS 5, 8, IAS 8,
10, 12, 19, 33,
37, 39
Amendments to
International
Accounting
Standards [IFRS 5, 8,
IAS 8, 10, 12, 19,
33, 37, 39]
This amendment makes numerous editorial changes to a range
of International Accounting Standards and Interpretations.
In particular, it amends IFRS 8 Operating Segments to require an
entity to exercise judgement in assessing whether a
government and entities known to be under the control of that
government are considered a single customer for the purposes
of certain operating segment disclosures. It also makes
numerous editorial amendments to a range of Australian
Accounting Standards and Interpretations, including
amendments to reflect changes made to the text of IFRSs by the
IASB.
1 January 2011 1 January
2012
IFRIC 14 Amendments to
IFRIC 14 –
Prepayments of a
Minimum Funding
Requirement
These amendments arise from the issuance of Prepayments of a
Minimum Funding Requirement (Amendments to IFRIC 14). The
requirements of IFRIC 14 meant that some entities that were
subject to minimum funding requirements could not treat any
surplus in a defined benefit pension plan as an economic
benefit.
The amendment requires entities to treat the benefit of such an
early payment as a pension asset. Subsequently, the remaining
surplus in the plan, if any, is subject to the same analysis as if no
prepayment had been made.
1 January 2011 1 January
2012
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
17
Reference Title Summary
Application
date of
standard
Application
date for
Group
IAS Annual
Improvements
Project
Amendments to
International
Accounting
Standards arising
from the Annual
Improvements
Project
[IFRS 3, 7, IAS 21,
28, 31, 32 & 39]
Limits the scope of the measurement choices of non-controlling
interest at proportionate share of net assets in the event of
liquidation. Other components of NCI are measured at fair
value.
Requires an entity (in a business combination) to account
for the replacement of the acquiree’s share-based payment
transactions (whether obliged or voluntarily), i.e., split
between consideration and post combination expenses.
Clarifies that contingent consideration from a business
combination that occurred before the effective date of IFRS 3
Revised is not restated.
Eliminates the requirement to restate financial statements
for a reporting period when significant influence or joint
control is lost and the reporting entity accounts for the
remaining investment under IAS 39. This includes the effect
on accumulated foreign exchange differences on such
investments.
1 July 2010 1 January
2011
IAS Annual
Improvements
Project
Further
Amendments to
International
Accounting
Standards arising
from the Annual
Improvements
Project [IFRS 1, 7,
IAS 1, IAS 34 and
IFRIC 13]
Emphasises the interaction between quantitative and
qualitative IFRS 7 disclosures and the nature and extent of
risks associated with financial instruments.
Clarifies that an entity will present an analysis of other
comprehensive income for each component of equity,
either in the statement of changes in equity or in the notes
to the financial statements.
Provides guidance to illustrate how to apply disclosure
principles in IAS 34 for significant events and transactions
Clarify that when the fair value of award credits is measured
based on the value of the awards for which they could be
redeemed, the amount of discounts or incentives otherwise
granted to customers not participating in the award credit
scheme, is to be taken into account.
1 January 2011 1 January
2012
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
18
Reference Title Summary
Application
date of
standard
Application
date for
Group
IFRIC 19 Extinguishing
Financial Liabilities
with Equity
Instruments
This interpretation clarifies that equity instruments issued to a
creditor to extinguish a financial liability are “consideration
paid” in accordance with paragraph 41 of IAS 39. As a result, the
financial liability is derecognised and the equity instruments
issued are treated as consideration paid to extinguish that
financial liability.
The interpretation states that equity instruments issued in a
debt for equity swap should be measured at the fair value of
the equity instruments issued, if this can be determined
reliably. If the fair value of the equity instruments issued is not
reliably determinable, the equity instruments should be
measured by reference to the fair value of the financial liability
extinguished as of the date of extinguishment.
1 July 2010 1 January
2011
The Group is in the process of reviewing any potential impact from these standards and interpretations.
3. Operating Segments
Identification of reporting segments
The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and
used by the executive management team (the chief operating decision makers) in assessing performance and in
determining the allocation of resources.
The Consolidated Entity currently has a single operating segment being the mining and exploration in Africa.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
19
4. Revenue, income and expenses
30-Jun-10 30-Jun-09
US$ US$
(a) Other Income
Interest on bank balances 26,388 80,719
(b) Other expenses from ordinary activities
Salaries and wages (47,080) (399,021)
Superannuation expenses (6,178) (25,720)
Share based payments (40,897) 103,387
Other employee expenses (1,911) (42,168)
Total employee expenses (96,066) (363,522)
Consultant expenses (604,863) (25,409)
Advisory fees (8,926) (67,913)
Audit fees (99,065) (60,134)
Travel expenses (203,023) (56,247)
Printing, stationery and public relations expenses (1,145) (26,266)
Occupancy and insurance expenses (136,961) (170,133)
Information technology and communication expenses (53,120) (46,653)
Corporate and general operating expenses (104,732) (74,492)
Net loss on disposal of plant and equipment - (46,131)
Foreign exchange (gains)/losses 32,557 (84,371)
Interest expense (1,305,026) (1,512,363)
(2,580,370) (2,533,634)
5. Loss per share
The following reflects the income used in the basic and diluted earnings per share computations:
30-Jun-10 30-Jun-09
(a) Earnings used in calculating earnings per share US$ US$
For basic and diluted earnings per share:
Net loss from continuing operations attributable to ordinary equity
holders of the parent (11,459,867) 7,795,115
Net loss attributable to ordinary equity holders of the parent (11,459,867) 7,795,115
Number of shares
(b) Weighted average number of shares 30-Jun-10 30-Jun-09
Weighted average number of ordinary shares for basic and diluted
earnings per share 345,821,837 210,206,452
Basic loss per share (cents per share) (3.31) 3.71
Diluted loss per share (cents per share) (3.31) 3.71
Basic loss per share
Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted
average number of ordinary shares on issue during the half-year.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
20
Diluted loss per share
Diluted loss per share amounts are calculated by dividing the net loss attributable to ordinary shareholders by the
weighted number of ordinary shares outstanding during the half-year adjusted for the effects of dilutive options.
6. Cash and cash equivalents
30-Jun-10 31-Dec-09
US$ US$
For the purpose of the half-year statement of cash flows, cash and
cash equivalents are comprised of the following:
Cash at bank and in hand (i) 14,182,575 13,252,191
14,182,575 13,252,191
(i) Includes US$1.7million of restricted funds held in the KPMG administration trust (2009: US$2.0 million), for the
payment of creditors and the claim under the DOCA.
7. Interest bearing loans and borrowings
30-Jun-10 31-Dec-09
US$ US$
Total Facilities
US $ Facilities Agreement (i) 55,000,000 55,000,000
Jinchuan Jitian Nickel Loan(ii) 40,000,000 20,000,000
Convertible notes (iii) 19,781,280 18,773,404
Interest payable 5,576,840 3,825,869
120,358,120 97,599,273
Current 100,358,120 97,599,273
Non-current 20,000,000 -
120,358,120 97,599,273
(i) On 13 September 2009, Albidon entered into a US$ facilities agreement with Jinchuan Group Limited for
three cash advance facilities. The facilities are subject to various covenants and a negative pledge
restricting the amount of future secured borrowings. At 30 June 2010 all facilities were fully drawn
down. The details of these facilities are as follows:
Cash advance 1:
Limit: US$20 million
Interest rate: LIBOR + 3.2%
Repayment dates: between 30 June 2012 and 30 June 2014
Facility end date: 30 June 2014
Cash advance 2:
Limit: US$20 million
Interest rate: LIBOR + 2.75%
Repayment dates: between 30 June 2014 and 31 December 2017
Facility end date: 31 December 2017
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
21
Cash advance 3:
Limit: US$15 million
Interest rate: LIBOR + 3.75%
Repayment dates: between 31 December 2010 and 31 December 2012
Facility end date: 31 December 2012
(ii) On 23 December 2009, an loan facility of US$20 million was arranged with Jinchuan Jitian Nickel Pty Ltd.
This loan was initially repayable by 30 September 2010 and on 9 June 2010 Jinchuan Jitian Nickel Pty Ltd
by written notification expressed its intention to extend the facility to 30 September 2011. Refer to note
2(a)(i)(v) for further details
On 19 April 2010, Albidon Zambia Limited entered into a loan agreement with Jinchuan Jitian Nickel Pty
Ltd for a US$20 million facility of which US$10 million was drawn on 21 April 2010 and the remaining
US$10 million was drawn on 28 May 2010. This facility is repayable in monthly instalments of US$3.6
million between 30 September 2011 and 31 January 2012, with the final payment of US$2 million due on
31 March 2012. The facility bears an interest rate of LIBOR + 3.5%.
All facilities are subject to various covenants and a negative pledge restricting the amount of future
secured borrowings
Details of the facilities are as follows:
December 2009:
• Limit: US$20 million
• Interest rate: LIBOR + 2.75%
• Repayment date: 30 September 2010 (extended subsequent to year end)
• Facility end date: 30 September 2010 (extended subsequent to year end)
April 2010:
• Limit: US$20 million
• Interest rate: LIBOR + 3.5%
• Repayment date: 30 September 2011 to 31 March 2012
• Facility end date: 31 March 2012
(iii) On 1 November 2009, the company issued 323,076,923 secured convertible notes to Jinchuan at an issue
and conversion price of US$0.065, raising US$21 million. Interest is accrued at a rate of 3.75% + USD
LIBOR and is payable quarterly. The convertible notes have a 5 year term during which Jinchuan can
exercise their option at any time before expiry date. At issue date, the equity component of the
convertible note was US$2,226,596. The debt component of the convertible notes are being accreted to
their face value over the term using the effective interest rate at 31 December 2009 of 8.04%.
ALBIDON LIMITED
INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Notes to the financial statements
22
8. Related party transactions
The following transactions were carried out with related parties:
Directors’ interests
Mitchell River Group Pty Ltd, an entity associated with Mr Alasdair Cooke, provides office space and administrative
staff, facilities and services to the Company, the cost of which is then reimbursed by the Company. For the six months
ended 30 June 2010, these costs totalled US$152,288 (2009: US$62,505). At 30 June 2010, the Company owed
Mitchell River Group Pty Ltd US$53,363 (2009 US$4,286).
Hartree Pty Ltd, a mining consulting firm of which Mr Alasdair Cooke is a director, has received fees of US$111,013
(2009: US$71,386 ) in respect of executive services provided by Alasdair Cooke to the Company in the ordinary course
of business. At 30 June 2010, the Company owed Hartree Pty Ltd US$51,374 (2009: US$69,945)
Directors and key management personnel
The Directors and key management personnel of the Company during the six months ended 30 June 2010, and up to
date of this report (unless otherwise stated) were as follows:
Alasdair Cooke - Executive Director
Valentine Chitalu - Non-Executive Director
Yimin Zhang - Non-Executive Director
Xie Penngen - Non-Executive Director resigned 31 August 2010
Sanlin Zhang - Non-Executive Director appointed 31 August 2010
Jianke Gao - Non-Executive Director appointed 31 August 2010
Harold Wang - Non-Executive Director appointed 31 August 2010
Jian-Hua Sang – Chief Executive Officer
Daniel Davis – Company Secretary
9. Commitments and contingencies
The commitments and contingencies are consistent with those reported in the 31 December 2009 annual financial
report. There were no significant changes to the commitments and contingencies during the six months ended 30
June 2010.
10. Events after the balance sheet date
On 3 August 2010 Mining Plus completed and presented the new Life of Mine study with a revised mining
schedule for 1Mtpa.
On 31 August 2010 the company accepted the resignation of Mr Xie PengGen as a Director of the company and
the company appointed Messrs Sanlin Zhang, Jianke Gao and Harold Wang as Directors of the company. Messrs
Sanlin Zhang and Jianke Gao act as representatives of Jinchuan.
ALBIDON LIMITED
FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Directors’ Declaration
23
Directors’ Declaration
In accordance with a resolution of directors of Albidon Limited, I state that:
In the opinion of the directors:
(a) The financial statements and notes of the consolidated entity:
(i) Give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2010 and of
its performance, for the six month period ended on that date; and
(ii) Comply with International Accounting Standard IAS 34 Interim Financial Reporting; and
(b) Subject to the matters set out in note 2(a)(i), there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they become due and payable.
On behalf of the board
Alasdair Cooke
Managing Director
Perth, 22 September 2010
ALBIDON LIMITED
FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Independent auditor’s review report to the members of Albidon Limited
24
To the members of Albidon Limited
Report on the half-year financial report
We have reviewed the accompanying half-year financial report of Albidon Limited, which comprises the
statement of financial position as at 30 June 2010, and the statement of comprehensive income,
statement of changes in equity and statement of cash flows for the half-year ended on that date, other
selected explanatory notes and the directors’ declaration of the consolidated entity comprising the
company and the entities it controlled at the half-year end or from time to time during the half-year.
Directors’ responsibility for the half-year financial report
The directors of the company are responsible for the preparation and fair presentation of the half-year
financial report in accordance with International Accounting Standards. This responsibility includes
establishing and maintaining internal controls relevant to the preparation and fair presentation of the halfyear
financial report that is free from material misstatement, whether due to fraud or error; selecting and
applying appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances.
Auditor’s responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We
conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of
Interim and Other Financial Reports Performed by the Independent Auditor of the Entity, in order to state
whether, on the basis of the procedures described, we have become aware of any matter that makes us
believe that the financial report does not fairly present the consolidated entity’s financial position as at 30
June 2010 and its performance for the half-year ended on that date; and complying with Accounting
Standard IAS 34 Interim Financial Reporting. As the auditor of Albidon Limited and the entities it
controlled during the half-year, ASRE 2410 requires that we comply with the ethical requirements relevant
to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and
consequently does not enable us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the international
professional ethical pronouncements.
Basis for Disclaimer of Conclusion
Albidon Limited was placed into voluntary administration on 22 April 2009 with key management
personnel leaving the company on or around this time. As a result of the departure of key management
personnel, the company has not been able to provide reconciliations of key accounts including fixed assets,
unrealised and realised foreign exchange, creditors, receivables, inventory and an assessment of
impairment in accordance with IAS 36 “Impairment of Assets” at either 30 June 2009, 31 December 2009
or 30 June 2010. We were unable to confirm or verify by alternative means, the balances of these
accounts included in the statement of financial position as at 30 June 2010 and 31 December 2009.
ALBIDON LIMITED
FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Independent auditor’s review report to the members of Albidon Limited
25
As a result of these matters, we were unable to determine whether any adjustments might have been
necessary in respect of recorded or unrecorded balances and the elements making up the statement of
comprehensive income, statement of changes in equity and statement of cashflows for the half-year ended
30 June 2010, resulting from either transactions arising during the half-year ended 30 June 2010, or as a
result of adjustments that might have been necessary in respect of recorded or unrecorded balances at 31
December 2009.
Disclaimer of Conclusion
Because of the existence of the limitation on the scope of our work as described in the Basis for Disclaimer
of Conclusion paragraph, and the effects of such adjustments, if any, as might have been determined to be
necessary had the limitation not existed, we are unable to and do not express a conclusion on whether the
half-year financial report of Albidon Limited and the entities it controlled during the half-year fairly
presents:
(i) the consolidated entity’s financial position as at 30 June 2010 and of its performance for the halfyear
ended on that date;
(ii) the consolidated entity’s financial position as at 31 December 2009 and its financial performance
for the half-year ended 30 June 2009, which are shown for the purposes of comparison; and
(iii) complies with International Accounting Standard 34 Interim Financial Reporting.
Inherent Uncertainty Regarding Continuation as a Going Concern
Without modification to our conclusion expressed above, we draw attention to Note 2(a)(i) of the half-year
financial report. There is significant uncertainty whether the Group will be able to continue as a going
concern and therefore whether it will be able to meet its commitments as and when they fall due and
realise its assets and extinguish its liabilities in the normal course of business at the amounts stated in the
half-year financial report. The half-year financial report does not include any adjustments relating to the
recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities
that might be necessary should the Group not continue as a going concern.
Ernst & Young
J C Palmer
Partner
Perth
22 September 2010
Ce que l'on conçoit bien, s'énonce clairement, Et les mots pour le dire arrivent aisément. BOILEAU