CGA Mining Limited - Preliminary final report for the year ended 30 June 2012

APPENDIX 4E

CGA Mining Limited and its Controlled Entities

ABN 88 009 153 128

PERTH, Western Australia, Aug. 31, 2012 /CNW/ -

Preliminary Final Report
Financial Year Ended 30 June 2012

RESULTS FOR ANNOUNCEMENTS TO THE MARKET

This report is based on accounts that are in the process of being audited.

Operating Performance

There are no dividend or distribution reinvestment plans and there have been no dividend or distribution payments during the financial year ended 30 June 2012.

COMMENTARY ON RESULTS FOR THE YEAR ENDED 30 JUNE 2012

HIGHLIGHTS

• The results for this financial year were heavily impacted by the failure of the SAG mill which impacted the first 6 months of operations and accordingly, we would anticipate a material improvement in the coming 12 month period.
  
  
• All expenses in relation to the repair of the SAG Mill have been fully expensed in the 12 month period. Furthermore, any insurance claims arising therefrom, including a loss of profits insurance claim, have not been reflected in the current year results. Any insurance proceeds received subsequently will be disclosed as income in the period received.
  
  
• Whilst the results for the year were affected by the SAG Mill incident, following the recommencement of full production in January 2012, the six months to June 2012 has resulted in production of a record 100,013 ounces.
  
  
• In the six months to 30 June 2012, net profit after tax was US$28,109,938 (6 months to 30 June 2011: US$26,063,123) before allowing for non-recurring expenses on the SAG Mill of US$6,213,085 and impairment arising from the mark to market of investments of US$6,869,837.
  
  
• The plant continued to operate above expectations with availabilities for the 6 months to 30 June 2012 averaging 94.8%. Since recommissioning, the SAG Mill has consistently operated at or above 6.6Mtpa.
  
  
• The optimisation study commenced during the year is due for completion shortly and will look at various options to lift production rates to +10Mtpa.
  
  
• Net tangible assets per share increased from US73.42c per share at 30 June 2011 to 84.39c per share as at 30 June 2012. Net assets likewise increased from US$23,099,543 as at 30 June 2011, to US$321,263,390 as at 30 June 2012.

OTHER INFORMATION

Statement of Retained Earnings

Control Gained or lost over entities

Associates and Joint Ventures

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2012

STATEMENT OF CONSOLIDATED CASHFLOWS
FOR THE YEAR ENDED 30 JUNE 2012

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2012

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2011

(g) SAG Mill expenses
Included within SAG Mill expenses for the current year are legal, consulting and other costs incurred in relation to the repair of the SAG Mill.  An insurance claim has been lodged to compensate for costs incurred to repair the SAG Mill, however it is not a point of virtual certainty and therefore the costs have been expensed.  Any insurance proceeds subsequently received will be disclosed as income in the period received.

(h) Other expenses
Included within Other expenses is $382,269 being the loss on disposal of assets during the year.

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying periods of between one day and three months, depending on the Company's immediate cash requirements, and earn interest at short term deposit rates. The fair value of cash and cash equivalents is $79,671,526 (2011: $107,336,345).

Restricted Cash
Included in cash and cash equivalents is an amount of $9,000,000 held with BNP Paribas in line with the requirements of project financing facility agreement which requires two quarters of principal and interest payments due on the facility to be held on deposit.

Reconciliation to Cash Flow Statement

For the purposes of the Cash Flow Statement, cash and cash equivalents comprise the following at 30 June:

Non cash financing activities
During the year there were leased asset additions of $6,306,081 (2011: $12,435,962).

Other receivables are non-interest bearing and are generally on 30-90 day terms.  There are no receivables past due or impaired. It is expected that these receivables will be received when due.

The fair value of the available for sale investments has been determined directly by reference to published price quotations in an active market.

6.INTANGIBLE ASSETS (Non-current)

(a)  Reconciliation of carrying amounts at the beginning and end of the period

(b)     Description of the Group's intangible assets

Contractual rights
Contractual rights have been acquired through business combinations and are carried at cost less accumulated amortisation and accumulated impairment losses. They represent the contractual right of PGPRC, a wholly owned subsidiary of CGA, to purchase mineral ore from the Masbate Gold Project owned by Filminera, an associate of CGA, at a specified price.

The intangible asset has been assessed as having a finite life and is amortised using the units of production method over the reserve base of the Masbate Gold Project in the Philippines.

Trade payables to third parties are non-interest bearing and are normally settled on 30 to 60 day terms.

Trade payables to an associate relate to payables for ore purchases, are non-interest bearing and are normally settled on 30 to 60 day terms.

(i) During the current year the Group made principal repayments of $16,272,330 to the BNP Paribas project financing facility. The drawn down portion of the facility accrues interest at 3.15% plus LIBOR per annum. The remaining loan is repayable over a 1.5 year period, on or before 31 December 2013.  The current portion of the loan liability is $17,748,210 and the non-current portion is $9,457,680.

(ii) The Company has entered into a finance lease for certain equipment to be used in the mining process for the Masbate Gold Project. The lease details are specified in the Masbate Technical Contract with Leighton Contractors (Philippines) Incorporated and Leighton Holdings Limited. The term of the lease is for 72 months up to May 2016 and is secured over the underlying assets. The Company has acquired an additional fleet during the 30 June 2011 and 30 June 2012 years which is for a term of 60 months and both are secured over the underlying assets.

(iii) During December 2011, the Group entered into a premium funding arrangement for the renewal of ISR Insurance.  The term of the funding is for 10 months at an interest rate of 3.98%.

The provision for rehabilitation in relation to the Masbate Gold Project is largely recognised in the accounts of Filminera who holds the mining licenses and tenements over the project.

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Share options

The Company has a share based payment option scheme under which options to subscribe for the Company's shares have been granted to certain employees and consultants.

(b) RESERVES

12. DISCONTINUED OPERATIONS

There were no discontinued operations during the current financial year.

On 6 August 2010, the Company announced that the offering of common shares in Ratel Gold Limited ("Ratel"), a wholly owned subsidiary of the Company, had closed successfully. Pursuant to the offering, Ratel issued 70,000,000 common shares at a price of C$0.20 per common share, for aggregate gross proceeds of C$14 million.  Upon completion of the offering, the Company held 20% of Ratel's issued shares, resulting in a gain on deconsolidation of $2,929,067.

As a result Ratel is disclosed in the financial report as a discontinued operation and was previously represented in the "Exploration Activities (Africa)" segment in the Segment Information note.

The results of the discontinued operations for the year until disposal are presented below:

13. EVENTS AFTER THE BALANCE SHEET DATE

No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years

COMPLIANCE STATEMENT

1. This report, and the accounts upon which it is based, have been prepared in accordance with AASB Standards and other AASB authoritative pronouncements.
   
   
2. This report, and the accounts upon which it is based, use the same accounting policies.
   
   
3. This report does give a true and fair view of the matters disclosed.
   
   
4. This report is based on accounts that are in the process of being audited.
   
   
5. The entity has a formally constituted audit committee.

Signed

SOURCE CGA Mining Limited