SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM 8-K/A No.2
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date or Report (Date of earliest event reported): April 17, 1993
COEUR D'ALENE MINES CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Idaho 1-8641 82-0109423
--------------------------- ------------ ---------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
400 Coeur d'Alene Mines Bldg.
505 Front Avenue
Coeur d'Alene, Idaho 83814
---------------------------------------- ----------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (208) 667-3511
--------------
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K,
filed on April 30, 1996, as set forth in the pages attached hereto:
Item 7(a) - Financial Statements of Business Acquired
Item 7(b) - Pro Forma Financial Information
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereto duly authorized.
COEUR D'ALENE MINES CORPORATION
Date: June 28, 1996 By: /s/JAMES A. SABALA
-------------------
James A. Sabala
Senior Vice President and
Chief Financial Officer
<PAGE>
The current Report on Form 8-K of Coeur d'Alene Mines Corporation
("Coeur") dated April 17, 1996 and filed on April 30, 1996, reported the
acquisition of shares of Gasgoyne Gold Mines N.L., an Australian gold company
("Gasgoyne"), representing 35% of Gasgoyne's outstanding shares. Pursuant to
the offer, Coeur offered shares of its common stock plus A$96 in exchange for
each 100 Gasgoyne shares. Item 7(a) of the report stated that the historical
financial statements of Gasgoyne called for by Item 7(a) of Form 8-K and Rule
3-05 of Regulation S-X, and the pro-forma financial information required under
Item 7(b) of Form 8-K and Article 11 of Regulations S-X would be filed not
later than 60 days after the date on which the Form 8-K was required to be
filed. The purpose of this amendment is to file such historical and pro forma
financial information.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
The following lists the historical financial statements, set forth in
Australian dollars, of Gasgoyne attached hereto:
Page(s)
-------
Audited consolidated balance sheet as of June 30, 1995, and
June 30, 1994, . . . . .. . . . . . . . . . . . . . . . . 5
Audited consolidated statements of operations, and cash flow
for the years ended June 30, 1995, and June 30, 1994. . . 6-7
Notes to consolidated financial statements for year ended
June 30, 1995 . . . . . . . . . . . . . . . . . . . . . . 8-30
Audited consolidated balance sheet as of June 30, 1994, and
June 30, 1993, . . . . .. . . . . . . . . . . . . . . . . 32
Audited consolidated statements of operations, and cash flow
for the years ended June 30, 1994, and June 30, 1993. . . 33-34
Notes to consolidated financial statements for year ended
June 30, 1994 . . . . . . . . . . . . . . . . . . . . . . 35-55
Unaudited consolidated balance sheets as of March 31, 1996 . 56
Unaudited consolidated statements of operations and cash
flow for the nine months ended March 31, 1996, and
March 31, 1995. . . . . . . . . . . . . . . . . . . . . . 57-58
-2-
<PAGE>
(b) PRO FORMA FINANCIAL INFORMATION.
The following lists the unaudited pro forma financial information , set
forth in U.S. dollars, attached hereto:
Page(s)
-------
Unaudited pro forma consolidated financial statements . . . 59
Pro forma consolidated balance sheet as of March 31, 1996 . 60-61
Pro forma consolidated statement of operations for the
three months ended March 31, 1996 . . . . . . . . . . . . . 62
Pro forma consolidated statement of operations for the
year ended December 31, 1995. . . . . . . . . . . . . . . . 63
Notes to unaudited consolidated pro forma financial
statements. . . . . . . . . . . . . . . . . . . . . . . . . 64-65
(c) EXHIBITS.
None.
-3-
<PAGE>
F I N A N C I A L S T A T E M E N T S
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
FOR THE YEAR ENDED 30 JUNE I995
-4-
<PAGE>
B A L A N C E S H E E T
AS AT 30 JUNE 1995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
Notes 1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 11,729,852 12,174,918 3,096,156 2,327,685
Receivables 6 485,760 105,527 247,097 113,679
Investments 7 894,298 93,792 894,298 93,792
Inventories 8 3,837,518 1,789,217 3,837,518 1,789,217
Other 9 710,450 1,605,567 692,390 1,604,853
-----------------------------------------------------------
TOTAL CURRENT ASSETS 17,657,878 15,769,021 8,767,459 5,929,226
-----------------------------------------------------------
NON-CURRENT ASSETS
Receivables 10 2,195,295 - 2,195,295
Investments 11 30,010 10 2,010,058 1,851,661
property, plant and equipment 12 3,374,626 3,011,607 3,181,556 2,993,806
Intangibles 13 542,893 827,221 79,431 166,082
Other 14 15,869,346 10,097,303 14,374,635 9,588,455
------------------------------------------------------------
TOTAL NON-CURRENT ASSETS 22,012,170 13,936,141 21,840,975 14,600,004
------------------------------------------------------------
TOTAL ASSETS 39,670,048 29,705,162 30,608,434 20,529,230
------------------------------------------------------------
CURRENT LIABILITIES
Creditors and borrowings 15 2,803,636 2,196,515 2,659,410 2,117,436
Provisions 16 7,878,610 4,464,814 7,878,610 4,464,814
Other 17 277,304 331,112 277,304 331,112
------------------------------------------------------------
TOTAL CURRENT LIABILITIES 10,959,550 6,992,441 10,815,324 6,913,362
------------------------------------------------------------
NON-CURRENT LIABILITIES
Creditors and borrowings 18 67,651 68,626 67,651 68,626
Provisions 19 1,787,135 2,084,463 2,079,150 2,471,500
Other 20 134,255 584,572 134,255 584,572
------------------------------------------------------------
TOTAL NON-CURRENT LIABILITIES 1,989,041 2,737,661 2,281,056 3,124,698
------------------------------------------------------------
TOTAL LIABILITIES 12,948,591 9,730,102 13,096,380 10,038,060
------------------------------------------------------------
NET ASSETS 26,721,457 19,975,060 17,512,054 10,491,170
============================================================
SHAREHOLDERS' EQUITY
Share capital 21 4,997,035 4,082,059 4,997,035 4,082,059
Reserves 22 2,620,449 303,500 2,620,449 303,500
Retained profits 11,751,861 7,897,487 9,894,570 6,105,611
------------------------------------------------------------
Shareholders' equity attributable to
members of the chief entity 19,369,345 12,283,046 17,512,054 10,491,170
Outside equity interests in
controlled entity 23 7,352,112 7,692,014 - -
------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 26,721,457 19,975,060 17,512,054 10,491,170
============================================================
</TABLE>
The above balance sheet should be read in conjunction with the accompanying
notes.
-5-
<PAGE>
P R O F I T A N D L O S S A C C O U N T
FOR THE YEAR ENDED 30 JUNE I995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
NOTES 1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C> <C>
Operating Revenue 2 33,397,785 23,918,760 32,753,843 24,984,725
----------------------------------------------------------
Operating profit before
income tax 3 13,405,097 8,067,211 13,451,530 9,390,102
Income tax attributable to
operating profit 4 4,733,949 2,758,996 4,638,927 3,146,033
----------------------------------------------------------
Operating profit after income tax 8,671,148 5,308,215 8,812,603 6,244,069
Profit on extraordinary items 5 - 2,680,513 - -
----------------------------------------------------------
Operating Profit and Extraordinary
items after income tax 8,671,148 7,988,728 8,812,603 6,244,069
Outside equity interests in operating
profit and extraordinary items after
income tax (206,870) (47,217) - -
----------------------------------------------------------
Operating profit and extraordinary items
after income tax attributable to members
ofthe chief entity 8,878,018 8,035,945 8,812,603 6,244,069
Retained profits at the
beginning of the financial year 7,897,487 3,035,784 6,105,611 3,035,784
----------------------------------------------------------
Total available for appropriation 16,775,505 11,071,729 14,918,214 9,279,853
Dividends provided for or paid 32 5,023,644 3,174,242 5,023,644 3,174,242
----------------------------------------------------------
Retained profits at the end of the
financial year 11,751,861 7,897,487 9,894,570 6,105,611
==========================================================
</TABLE>
The above profit and loss account should be read in conjunction with the
accompanying notes.
-6-
<PAGE>
S T A T E M E N T O F C A S H F L O W
FOR THE YEAR ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
Notes 1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Receipts from customers 32,802,014 23,144,108 32,803,221 23,144,108
Payments to suppliers and employees 16,352,339) (17,542,830) (15,987,164) (17,339,856)
Interest received 587,758 262,663 209,074 79,480
Interest and other costs of finance paid (11,115) (25,156) (11,115) (25,156)
Income tax paid (2,320,911) (1,097,197) (2,320,911) (1,097,197)
Net cash provided by operating
activities 30(c) 14,705,407 4,741,588 14,693,105 4,761,379
CASH FLOWS FROM INVESTING
ACTIVITIES
Payment for mineral exploration and
development (9,995,746) (1,821,644) (9,003,242) (1,389,958)
Payments for investments (1,094,903) (362,219) (1,062,903) (862,219)
Proceeds from sale of investments 112,249 1,255,418 92,599 1,255,418
Payment for property, plant and
equipment (858,014) (1,014,500) (652,549) (994,825)
Proceeds from sale of equipment 21,896 71,963 21,896 71,963
Loan to other entities (2,195,295) (2,195,295)
Net cash used in investing activities (14,009,813) (1,870,982) (12,799,494) (1,919,621)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of shares 16,450 404,050 16,450 404,050
Payment of prospectus issue expenses - (765,208) - -
Repayment of borrowings (31,294) (1,024,168) (31,294) (1,024,168)
Dividends paid (1,110,296) (2,516,820) (1,110,296) (2,516,820)
Other - outside equity - 10,568,072
Net cash from financing activities (1,125,140) 6,665,926 (1,125,140) (3,136,938)
Net increase (decrease ) in cash held (429,546) 9,536,532 768,471 (295,180)
Cash at beginning of the financial
year 12,159,398 2,622,866 2,327,685 2,622,865
Cash at the end of the financial year 30(a) 11,729,852 12,159,398 3,096,156 2,327,685
</TABLE>
The above statement of cash flows should be read in conjunction with the
accompanying notes.
-7-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies adopted by the economic
entity in the preparation of the financial statements is set out in this
note. The financial statements adopted are prepared in accordance with
applicable Accounting Standards and other mandatory professional
reporting requirements (Urgent Issues Group Consensus Views) and the
Corporations Law, including the disclosure requirements of Schedule 5 of
the Corporations Regulations. The accounting policies adopted are
consistent with those of the previous year.
(a) HISTORICAL COST
The financial statements have been prepared under the convention of
historical cost accounting and do not take into account changing
money values.
(b) PRINCIPLES OF CONSOLIDATION
The consolidated accounts comprise the accounts of the company and
its controlled entity, Pilbara Mines N. L. A controlled entity is
any entity controlled by the company. Control exists where the
company has the capacity to dominate the decision-making in relation
to the financial and operating policies of another entity so that
the other entity operates with the company to achieve its
objectives.
All inter-company balances and transactions between entities in the
economic entity, including any unrealized profits or losses, have
been eliminated on consolidation.
Outside equity interests in the results and equity of the controlled
entity are shown separately in the consolidated profit and loss
account and balance sheet respectively.
(c) INTERESTS IN JOINT VENTURES
1. The economic entity's interests in production joint ventures
are brought to account by including the amount of:
(i) the entity's interest in each of the individual assets
employed in the joint ventures;
(ii) the entity's share of liabilities incurred by the joint
ventures, and
(iii) the entity's interest in the expenses incurred in
relation to the joint ventures.
2. The entity's interests in exploration joint ventures are
brought to account based on the actual expenditure incurred by
the entity in contributing to the joint venture exploration
programs.
(d) REVENUE RECOGNITION
(i) Refined gold which is subject to forward sales contracts, is
recognized as revenue at the appropriate forward sales price at
the point at which the bullion has been refined and is
available for delivery. Unrealized gains or losses relating to
forward gold sales contracts outstanding at balance date are
not reflected in the profit and loss account.
(ii) Funds received on the sale of call options, other than in
circumstances where the call option is related to forward
selling arrangements, are recognized as revenue when received.
(e) INCOME TAX
Tax effect accounting procedures are followed using the liability
method of tax effect accounting, whereby the income tax expense for
the year is matched with the accounting result after allowance for
permanent differences.
-8-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
Future income tax benefits are not brought to account unless
realization of the asset is assured beyond reasonable doubt in
respect to timing differences, and virtually certain in respect of
tax losses.
Income tax on cumulative timing differences is set aside to the
deferred income tax or the future income tax benefit accounts at the
rates which are expected to apply when the timing differences
reverse.
(f) INVENTORIES
(i) Ore stockpiles and gold in circuit are valued at the lower of
cost and net realisable value. Cost comprises direct material,
labor and transportation expenditure incurred in getting
inventories to their existing location and condition, together
with an appropriate portion of fixed and variable overhead
expenditure based on weighted average costs incurred during the
period in which such inventories were produced.
(ii) Stores and consumable are valued at the lower of weighted
average cost and net realisable value.
(g) EXPLORATION AND DEVELOPMENT EXPENDITURE
Exploration, evaluation and development expenditure incurred is
accumulated in respect of each identifiable area of interest. These
costs are only carried forward to the extent that they are expected
to be recouped through the successful development, exploration or
sale of the area or where activities in the area have not yet
reached a stage which permits reasonable assessment of the
existence, or otherwise of economically recoverable reserves, and
active and significant operations in relation to the area are
continuing.
Expenditure which no longer satisfies the above policy is written
off against profits.
When production commences, the accumulated costs for the relevant
area of interest are amortized over the life of the area according
to the rate of depletion of the economically recoverable reserves.
Any costs of site restoration are provided for during the relevant
production stages and included in the costs of that stage.
A regular review is undertaken of each area of interest to determine
the appropriateness of continuing to carry forward costs in relation
to that area of interest.
(h) Restoration, Rehabilitation and Environmental Costs
Restoration, rehabilitation and environmental expenditure to be
incurred during the production phase of operations is accrued when
the need for such expenditure is established and then written off
immediately as part of the cost of production of the mine property
concerned.
There is no provision in the accounts for restoration,
rehabilitation and environmental expenditure to be incurred
subsequent to the cessation of production at a mine property.
(i) PROPERTY, PLANT AND EQUIPMENT
(i) The cost of each item of buildings, machinery and equipment
held at minesites is written off over its expected economic
life. Each item's economic life has due regard both to its own
physical life limitations and to present assessments of
economically recoverable resources of the mine property at
which the item is located, and to possible future variations in
those assessments. Estimates of remaining useful lives are made
on a regular basis for all assets, with annual reassessments
for major items.
-9-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
The total net carrying values of mine buildings, machinery and
equipment at each mine property are reviewed regularly and, to
the extent to which these values exceed their recoverable
amounts, that excess is fully provided against in the financial
year in which this is determined.
(ii) Other assets are depreciated over their expected useful lives
on the straight line or reducing balance basis as appropriate.
(j) LEASES
Leased assets, other than operating leases, where substantially all
the risks and benefit incident to the ownership of the asset but not
the legal ownership are transferred to the company are classified as
finance leases. Finance leases are capitalized recording an asset
and a liability equal to the present value of the minimum lease
payments, including any guaranteed residual value. Leased assets are
amortized over their estimated useful lives. Lease payments are
allocated between the reduction of the lease liability and the lease
interest expense for the period. Lease payments under operating
leases are charged as expenses in the periods in which they are
incurred.
(k) INTANGIBLES
Intangibles comprise expenses incurred in connection with the
prospectus issued by the company and its controlled entity which are
being amortized over a period of 5 years commencing from the date of
the successful flotation of the shares.
(1) Employee Entitlements
The amounts expected to be paid to employees for their pro-rata
entitlement to annual and sick leave are accrued annually at current
pay rates having regard to experience of employee departures and
periods of service.
(m) Recoverable Amount of Non-current Assets
The recoverable amount of an asset is the net amount expected to be
recovered through the net cash inflows arising from its continued
use and subsequent disposal.
Where the carrying amount of a non-current asset is greater than its
recoverable amount the asset is revealed to its recoverable amount.
Where net cash inflows are derived from a group of assets working
together, the recoverable amount is determined on the basis of the
relevant group of assets.
The expected net cash flows included in determining recoverable
amounts of non-current assets are not discounted to their present
values.
(n) Segmental Information
The economic entity operates predominantly in the mining industry in
Western Australia.
(o) Cash
For the purpose of the statement of cash flows, cash includes:
(i) cash on hand and in at call deposits with banks or financial
institutions, net of bank overdrafts; and
(ii) investments in money market instruments with less than 14 days
to maturity.
-10-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
2 OPERATING REVENUE
<S> <C> <C> <C> <C>
Gold sales 31,404,187 20,832,079 31,404,187 20,832,079
Gold call option fee - 1,000,000 - 1,000,000
Sales of investments 131,899 1,255,418 112,249 1,255,418
Sales of plant and equipment 21,896 71,963 21,896 71,963
Interest received 824,077 262,663 209,074 79,480
Sales of tenements - - - 1,250,000
Other income 1.015,726 496,637 1,006,437 495,785
------------------------------------------------------
33,397,785 23,918,760 32,753,843 24,984,725
=======================================================
</TABLE>
<TABLE>
3 OPERATING PROFIT
The operating profit before income tax has been determined after
crediting and charging the following specific items:
<S> <C> <C> <C> <C>
(a) Crediting as income
Interest received from unrelated
corporations 824,077 262,663 209,074 79,480
Profit on share trading - 915,300 - 915,300
Profit on disposal of plant
and equipment - 2,014 - 2,014
(b) Crediting as abnormal
Profit on sale of tenements - - - 1,172,838
Gold call option fee - 1,000,000 - 1,000,000
------------------------------------------------------
- 1,000,000 - 2,172,838
------------------------------------------------------
Income tax at 33% - 330,000 - 717,037
------------------------------------------------------
</TABLE>
-11-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
(c) Charging as expenses
Amortisation
- assets under finance leases 31,636 28,909 31,636 28,909
- prospectus issue expenses 239,693 144,043 86,652 86,652
- exploration and development expenses 633,106 439,281 633,106 439,281
Depreciation
- property, plant and equipment 468,368 396,268 440,758 394,394
Exploration expenditure on areas
written off 186,244 - 127,017
Interest paid to unrelated corporations - 12,513 - 12,513
Lease finance charges 11,115 12,643 11,115 12,643
Loss on disposal of investments 13,751 - 11,401
Loss on disposal of plant and equipment 528 - 528
Operating lease rentals 76,881 44,564 58,843 44,564
Provision for employee entitlements 5,557 3,089 5,557 3,089
</TABLE>
<TABLE>
4 INCOME TAX
<S> <C> <C> <C> <C>
Operating profit before income tax 13,405,097 8,067,211 13,451,530 9,390,102
------------------------------------------------------
Income tax @ 33% (1994 - 33%) 4,423,682 2,662,180 4,439,005 3,098,734
Permanent differences
- Amortisation of prospectus expenses 79,099 47,534 28,595 28,595
- Other 1,768 38,435 (1,935) 18,704
------------------------------------------------------
4,504,549 2,748,149 4,465,665 3,146,033
Effect on deferred income tax of change
in tax rate from 33% to 36% 148,928 - 173,262 -
Future income tax benefits not recognized 80,472 10,847 - -
------------------------------------------------------
Income tax attributable to operating
profit 4,733,949 2,758,996 4,638,927 3,146,033
======================================================
</TABLE>
-12-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
Provision for income tax 5,031,277 2,260,444 5,031,277 2,260,444
Provision for deferred income tax (297,328) 498,552 (392,350) 885,589
------------------------------------------------------
4,733,949 2,758,996 4,638,927 3,146,033
======================================================
<FN>
The future income tax benefit of $80,472, (1994 - $10,847) attributable to tax
losses of the controlled entity has not been brought to account as realization
of the benefit is not virtually certain. The benefit will only be obtained if:
(a) the controlled entity derives future assessable income of a nature and of
an amount sufficient to enable the benefit from the deductions for the
loss to be realized;
(b) the controlled entity continues to comply with the conditions for
deductibility imposed by tax legislation; and
(c) no changes in tax legislation adversely affect the controlled entity in
realizing the benefit from the deductions for the loss.
</FN>
</TABLE>
5 EXTRAORDINARY ITEM
<TABLE>
<S> <C> <C> <C> <C>
Gain on reduction in ownership interest
in controlled entity - 2,680,513 - -
------------------------------------------------------
</TABLE>
There is no tax attributable to this gain.
6 CURRENT ASSETS - RECEIVABLES
<TABLE>
<S> <C> <C> <C> <C>
Trade debtors 156,320 47,536 153,976 55,833
Other debtors 329,440 57,991 93,121 57,846
------------------------------------------------------
485,760 105,527 247,097 113,679
======================================================
</TABLE>
7 CURRENT ASSETS - INVESTMENTS
<TABLE>
<S> <C> <C> <C> <C>
Investment listed on a prescribed
stock exchange at cost 894,298 93,792 894,298 93,792
======================================================
Market value 1,014,228 142,180 1,014,228 142,180
======================================================
</TABLE>
-13-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
8 CURRENT ASSETS - INVENTORIES
Ore stockpiles 3,188,208 1,226,977 3,188,208 1,226,977
Gold in circuit 52,120 161,493 52,120 161,493
Stores and consumables 597,190 400,747 597,190 400,747
------------------------------------------------------
3,837,518 1,789,217 3,837,518 1,789,217
======================================================
</TABLE>
9 CURRENT ASSETS - OTHER
<TABLE>
<S> <C> <C> <C> <C>
Prepayments 209,115 74,092 191,055 73,378
Gold on metal account 501,335 1,531,475 501,335 1,531,475
------------------------------------------------------
710,450 1,605,567 692,390 1,604,853
======================================================
</TABLE>
10 NON-CURRENT ASSETS - RECEIVABLES
<TABLE>
<S> <C> <C> <C> <C>
Unsecured loans 2,195,295 - 2,195,295 -
------------------------------------------------------
<FN>
These monies have been advanced in terms of agreements relating to the
Awak Mas Gold Project in terms of which the company is required to
contribute funds for feasibility studies. Repayment of these loans is
contingent upon the Project proceeding and generating adequate positive
cash flow.
</FN>
</TABLE>
11 NON-CURRENT ASSETS - INVESTMENTS
<TABLE>
<S> <C> <C> <C> <C>
Investments in unlisted companies at cost 30,010 10 20,010 10
Investment in controlled entity at cost - - 1,990,048 1,851,651
------------------------------------------------------
30,010 10 2,010,058 1,851,661
======================================================
</TABLE>
The controlled entity is a listed company.
<TABLE>
<S> <C> <C> <C> <C>
Market value of traceable shares - - 220,000 100,000
Cost of escrowed shares - - 1,750,000 1,750,000
</TABLE>
-14-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
12 NON-CURRENT ASSETS - PROPERTY
PLANT AND EQUIPMENT
Freehold land at cost 95,789 44,160 95,789 44,160
------------------------------------------------------
Buildings at cost 697,562 611,531 697,562 611,531
Less: accumulated depreciation 195,606 133,507 195,606 133,507
------------------------------------------------------
501,956 478,024 501,956 478,024
------------------------------------------------------
Plant and equipment, at cost 4,229,069 3,535,095 4,003,929 3,515,420
Less: accumulated depreciation 1,521,025 1,116,125 1,488,955 1,114,251
------------------------------------------------------
2,708,044 2,418,970 2,514,974 2,401,169
------------------------------------------------------
Plant and equipment under lease 143,011 118,311 143,011 118,311
Less: amortisation 74,174 47,858 74,174 47,858
------------------------------------------------------
68,837 70,453 68,837 70,453
------------------------------------------------------
3,374,626 3,011,607 3,181,556 2,993,806
======================================================
</TABLE>
l3 NON-CURRENT ASSETS - INTANGIBLES
<TABLE>
<S> <C> <C> <C> <C>
Prospectus issue expense 1,106,889 1,151,523 432,993 432,993
Less: amortisation 563,996 324,302 353,562 266,911
------------------------------------------------------
542,893 827,221 79,431 166,082
======================================================
</TABLE>
14 NON-CURRENT ASSETS - OTHER
<TABLE>
<S> <C> <C> <C> <C>
Deferred mining costs (a) 1,225,544 4,682,483 1,225,544 4,682,483
Expenditure on mineral exploration
evaluation and development (b) 14,643,802 5,414,820 13,149,091 4,905,972
------------------------------------------------------
15,869,346 10,097,303 14,374,635 9,588,455
======================================================
</TABLE>
(a) Deferred mining costs represent costs of mining waste in excess of the
estimated ratio of waste to ore over the mine life.
-15-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
(b) Expenditure on mineral exploration evaluation and development on areas of
interest represents:
<S> <C> <C> <C> <C>
in the exploration or evaluation phase 5,044,713 3,225,491 3,550,002 2,716,643
------------------------------------------------------
in which production has commenced 11,272,815 3,229,949 11,272,815 3,229,949
Less: accumulated amortisation 1,673,726 1,040,620 1,673,726 1,040,620
------------------------------------------------------
9,599,089 2,189,329 9,599,089 2,189,329
------------------------------------------------------
14,643,802 5,414,820 13,149,091 4,905,972
======================================================
</TABLE>
The carrying value of mineral exploration, evaluation and development
expenditure is dependent upon the discovery and exploitation of
commercially viable mineral deposits, the generation of sufficient future
income therefrom or sale for at least carrying value.
15 CURRENT LIABILITIES - CREDITORS AND BORROWINGS
<TABLE>
<S> <C> <C> <C> <C>
Bank overdraft - 15,520 - -
Trade creditors 1,184,115 1,312,527 1,131,101 1,255,968
Other creditors 1,598,721 847,368 1,507,509 840,368
Lease liabilities 20,800 21,100 20,800 21,100
------------------------------------------------------
2,803,636 2,196,515 2,659,410 2,117,436
======================================================
</TABLE>
16 CURRENT LIABILITIES - PROVISIONS
<TABLE>
<S> <C> <C> <C> <C>
Employee entitlements 71,540 65,983 71,540 65,983
Dividends 2,813,230 2,115,357 2,813,230 2,115,357
Income tax 4,993,840 2,283,474 4,993,840 2,283,474
------------------------------------------------------
7,878,610 4,464,814 7,878,610 4,464,814
======================================================
17 CURRENT LIABILITIES - OTHER
Prepaid gold sales and fees 277,304 331,112 277,304 331,112
======================================================
</TABLE>
-16-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
18 NON CURRENT LIABILITIES - CREDITORS
AND BORROWINGS
<S> <C> <C> <C> <C>
Lease Liabilities 67,651 68,626 67,651 68,626
======================================================
</TABLE>
19 NON-CURRENT LIABILITIES - PROVISIONS
<TABLE>
<S> <C> <C> <C> <C>
Deferred income tax 1,787,135 2,084,463 2,079,150 2,471,500
======================================================
</TABLE>
20 NON CURRENT LIABILITIES - OTHER
<TABLE>
<S> <C> <C> <C> <C>
Prepaid gold sales and fees 134,255 584,572 134,255 584,572
======================================================
</TABLE>
21 SHARE CAPITAL
<TABLE>
<S> <C> <C> <C> <C>
Authorised
100,000,000 shares of 20 cents each 20,000,000 20,000,000 20,000,000 20,000,000
======================================================
Issued and paid up
46,867,173 ordinary shares of 20 cents
each (1994 - 42,292,293) 9,373,435 8,458,459 9,373,435 8,458,459
Discount on shares (4,376,400) (4,376,400) (4,376,400) (4,376,400)
------------------------------------------------------
4,997,035 4,082,059 4,997,035 4,082,059
======================================================
</TABLE>
21.1 Movement in issued share capital
<TABLE>
<CAPTION>
Number $
<S> <C> <C>
Opening balance 42,292,293 8,458,459
Allotted on conversion of options 35,000 7,000
Allotted pursuant to the
Dividend Reinvestment Plan
final dividend 1994 1,921,819 384,364
interim dividend 1995 815,907 163,181
Bonus share issue 1,802,154 360,431
-------------------------
46,867,173 9,373,435
</TABLE>
-17-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
21.2 At balance date the company had on issue the following unquoted options
to subscribe for ordinary shares:
<TABLE>
<CAPTION>
1995 1994 Exercise Price Expiry Date
<S> <C> <C> <C>
92,000 92,000 $1.45 28 June 1997
121,000 121,000 $2.24 29 June 1997
795,000 830,000 $0.47 30 June 1987
2,530,000 - $1.30 22 December 1997
100,000 - $1.47 28 April 1998
3,638,000 1,043,000
</TABLE>
21.2 At balance date the controlled entity had on issue to persons not being
members of the economic entity, 36,510,146 (1994 - 30,420,146) options
to subscribe for ordinary shares in the controlled entity at an exercise
price of 20 cents per share, exercisable on or before 30 June 1998.
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
22 RESERVES
Share Premium at beginning of year 303,500 68,050 303,500 68,050
On conversion of 35,000 (1994 -872,037)
options at a premium of 27 cents per share 9,450 235,450 9,450 235,450
On ordinary shares allotted pursuant to
the dividend reinvestment plan:
1,921,819 shares at a premium of 90
cents per share 1,729,637 - 1,729,637 -
815,907 shares at a premium of $1.15
per share 938,293 - 938,293 -
------------------------------------------------------
2,980,880 303,500 2,980,880 303,500
Utilised for issue of 1,802,154
bonus shares (360,431) - (360,431) -
------------------------------------------------------
2,620,449 303,500 2,620,449 303,500
======================================================
</TABLE>
23 OUTSIDE EQUITY INTERESTS IN CONTROLLED ENTITY
<TABLE>
<S> <C> <C> <C> <C>
Outside equity interest comprises:
Share capital 7,651,816 7,786,813 - -
Accumulated losses (299,704) (94,799) - -
------------------------------------------------------
7,352,112 7,692,014 - -
======================================================
</TABLE>
The outside equity interests in the issued and paid-up capital of the
controlled entity comprises 50,890,362 (1994 - 51,840,362) fully paid ordinary
shares of 20 cents each issued at varying discounts.
-18-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
24 COMMITMENTS FOR EXPENDITURE
24.1 Exploration Tenement Leases
In order to maintain current rights of tenure to exploration tenements,
the company and economic entity is required to outlay lease rentals and
to meet the minimum expenditure requirements of the Western Australia
Mines Departments. These obligations are subject to renegotiation upon
expiry of the exploration leases or when application for a mining licence
is made. These obligations are not provided for in the accounts and are
payable:
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
Not later than one year 1,777,553 1,556,452 1,285,451 1,022,390
Later than one year, but not
later than 2 years 3,393,369 1,777,553 2,942,601 1,285,451
Later than 2 years, but not
later than 5 years 6,129,641 5,018,537 5,304,116 3,856,353
-----------------------------------------------------
11,300,563 8,352,542 9,532,168 6,164,194
======================================================
</TABLE>
The dynamic nature of tenement portfolio management is such that the
actual expenditures will vary significantly from these "commitments",
depending upon the results of future exploration and farm-out
opportunities.
24.2 Joint Venture Commitments
The company and economic entity have the following cumulative commitments
in respect of exploration joint ventures to which they are farming in and
are not provided for in the accounts:
<TABLE>
<S> <C> <C> <C> <C>
Not later than one year 319,000 155,250 270,000 106,250
Later than one year, but not
later than 2 years 503,859 101,250 465,000 52,250
Later than 2 years, but not
later than 5 years 585,000 38,859 585,000 -
------------------------------------------------------
1,407,859 256,500 1,320,000 158,500
======================================================
</TABLE>
If a participant to a joint venture defaults and fails to contribute its
share of joint venture obligations, then the joint venturers are jointly
and severally liable to meet the obligations of the defaulting venturer.
In this event the interest in the tenement held by the defaulting
participant may be redistributed to the remaining joint venturers. In the
event of a default, a commitment exists in respect of expenditure
commitments due to be met by the company's defaulting joint venture
partner.
-19-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
24.3 Lease Commitments
(a) Finance leases - plant and
equipment
due within 1 year 20,800 30,267 20,800 30,267
due within 1-2 years 35,431 32,102 35,431 32,102
due within 2-5 years 49,168 44,549 49,168 44,549
Minimum lease payments 105,399 106,918 105,399 106,918
Less: future finance charges 16,948 17,192 16,948 17,192
Provided for in the accounts 88,451 89,726 88,451 89,726
(b) Non-cancellable operating
leases
due within 1 year 101,250 - 101,250
due within 1-2 years 253,125 101,250 253,125 101,250
due within 2-5 year 320,625 573,750 320,625 573,750
Not provided for in the
accounts 675,000 675,000 675,000 675,000
</TABLE>
24.4 Forward Sales Contracts
At balance date the company had outstanding gold par forward sales
contracts for 130,695 (1994 - 144,346) ounces at an average price of $588
(1994 - $570) per ounce with monthly deliveries of 2,600 ounces per month
to 20 February 2000.
24.5 GOLD CALL OPTION
At balance date the company had outstanding a gold call option expiring
27 March 1998 to deliver 20,000 ounces at a price of $580 per ounce
exercisable by the option holder.
-20-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
25 JOINT VENTURES
25.1 The economic entity has interests in the following unincorporated joint
ventures:
<TABLE>
<CAPTION>
VENTURE PRINCIPAL ACTIVITIES PERCENTAGE
INTEREST
JOINT 1995 1994
----------------------------------------------------------------------------------------
Company
<S> <C> <C> <C>
Yilgarn Star Exploration Gold Exploration 50 50
Yilgarn Star Production Production from Yilgarn Star Mine 50 50
Star Milling Operation of Burbidge Gold Plant 50 50
Marvel Loch Gold Exploration 50 50
Boodarding Gold Exploration 44.25 44.25
McGowans Find Gold Exploration 45* 45 *
Toomey Hills Gold Exploration 47.5 47.5*
Dulcie Gold Exploration 40 * 24.5 *
Polar Bear Gold Exploration 25 25
Duke Gold Exploration 24.5 24.5
Wilga Well Gold Exploration 90 90 *
Sunrise Dam Gold Exploration 80 80 *
Sunrise Dam West Gold Exploration 80 80
Norseman Gold Exploration 49 100
Wilga Well West Gold Exploration 80 80
Olga Rocks Gold Exploration 45 * Nil
Laverton South Gold Exploration 80 * Nil
Controlled Entity
Whim Creek Base Metal Exploration 70 70*
Mt Fraser Base Metal Exploration 51 51*
<FN>
* Earning interest in accordance with respective joint venture agreements.
</FN>
</TABLE>
-21-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
25.2 JOINT VENTURE ASSETS AND LIABILITIES
The company's share of assets and liabilities in the above joint ventures
has been included in the balance sheet of the company under the following
classifications.
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash 335,074 123,703 335,074 123,703
Receivables 94,121 57,846 94,121 57,846
Inventories 3,837,517 1,789,217 3,837,517 1,789,217
Other 73,005 54,514 73,005 54,514
------------------------------------------------------
TOTAL CURRENT ASSETS 4,339,717 2,025,280 4,339,717 2,025,280
------------------------------------------------------
NON-CURRENT ASSETS
Property, plant and equipment 2,747,934 2,714,217 2,747,934 2,714,217
Other - Exploration evaluation
and development 12,579,166 3,907,911 12,072,701 3,703,958
- Deferred mining 1,225,544 4,682,483 1,225,544 4,682,483
------------------------------------------------------
TOTAL NON-CURRENT ASSETS 16,552,644 11,304,611 16,046,179 11,100,658
------------------------------------------------------
TOTAL ASSETS 20,892,361 13,329,891 20,385,896 13,125,938
======================================================
CURRENT LIABILITIES
Creditors and borrowings 2,411,073 1,992,234 2,411,073 1,992,234
Provisions 65,503 55,686 65,503 55,686
------------------------------------------------------
TOTAL LIABILITIES 2,476,576 2,047,920 2,476,576 2,047,920
======================================================
</TABLE>
25.3 Joint Venture Contributions
The net contribution of joint venture activities to operating profit
before income tax may be summarised as follows:
<TABLE>
<S> <C> <C> <C> <C>
Share of costs incurred by production
joint ventures 17,298,822 13,520,368 17,298,822 13,520,368
Additional costs incurred by company 285,282 338,285 285,282 338,285
------------------------------------------------------
17,584,104 13,858,653 17,584,104 13,858,653
Revenue from sale of company share
of gold produced and other income
of joint ventures 31,771,702 21,175,665 31,771,702 21,175,665
------------------------------------------------------
Net contribution 14,187,598 7,317,012 14,187,598 7,317,012
======================================================
</TABLE>
-22-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
25.4 Contingent Liability
Participants in the Yllgarn Star Production Joint Venture, being the
company, Orion Resources N.L. ("Orion") and Gemini Mining Pq Ltd
("Gemini") were recently served with a Writ issued by Boral out of the
Supreme Court of Western Australia claiming damages for alleged breach of
contract in the sum of $4,991,832.03, together with interest and costs.
The company, Orion and Gemini ("Yilgarn Star Participants") intend to
vigorously defend the action by Boral. Based upon advice received by the
solicitors and Counsel engaged to review Boral's claims, it is the view
of the Yilgarn Star Participants that Boral's claims have no foundation
and that the Yilgarn Star Participants have no liability to Boral.
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
26 REMUNERATION OF THE DIRECTORS
Amounts received, or due and receivable
by directors of the company from the company
and its controlled entity 584,172 434,235
Amounts received, or due and receivable
by directors of each entity in the
economic entity from the company and
its controlled entity 593,768 434,235
</TABLE>
Directors remuneration includes superannuation payments and is disclosed
in accordance with class order 94/1529 "Disclosure of Directors
Remuneration" issued by the Australian Securities Commission.
Number of directors of the company whose remuneration was within the
following bands:
<TABLE>
<S> <C> <C>
$ O - 9,999 - 1
$ 10,000 - 19,999 2 1
$ 40,000 - 49,999 1 -
$ 70,000 - 79,999 - 1
$ 80,000 - 89,999 1 1
$ 90,000 - 99,999 1 -
$ 120,000 - 129,999 - 1
$ 130,000 - 139,999 - 1
$ 150,000 - 159,999 1 -
$ 180,000 - 189,999 1 -
</TABLE>
27 AUDITORS' REMUNERATION
<TABLE>
Amounts received, or due and receivable by the auditors for:
<S> <C> <C> <C> <C>
(a) Auditing the accounts of the
company 17,850 22,250 14,350 15,250
(b) Other services 9,450 10,575 6,200 2,075
</TABLE>
-23-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
28 RELATED PARTY TRANSACTIONS
The directors of the company during the year were P G Crabb, R W Crabb, R J
Dunn, B J Hurley, D J Porter, F R Madden and J S F Dunlop.
(a) Directors' remuneration and superannuation is disclosed in note 26.
(b) Legal fees of $91,775 (1994 - $97,822) were paid by the economic entity
and joint ventures in which it has an interest in the normal course of
business to a firm in which R W Crabb is a partner.
(c) Consultancy fees totalling $244,486 (1994 - $309,635) were paid to P G
Crabb, R J Dunn, B J Hurley, D J Porter, F R Madden and J S F Dunlop and
their director related entities by the economic entity and joint ventures
in which it has an interest for services relating to exploration
activities, and is included in directors remuneration.
(d) Charges for drilling services totalling $24,990 were paid to a director
related entity by the company and joint venturers of P G Crabb on normal
terms and conditions.
(e) Aggregate amounts receivable from and payable to directors and their
director related entities at the end of the financial year were $800
(1994 - $1,071) and $17,617 (1994 - $26,769) respectively.
(f) The company has entered into joint venture agreements with Gemini Mining
Pty Ltd (formerly Bredelle Pty Ltd) a company in which R W Crabb and P G
Crabb has an interest.
(g) Directors and their related entities acquired the following equity
interests in companies in the economic entity during the year.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NUMBER OF NUMBER OF
SHARES OPTIONS SHARES OPTIONS
1995 1995 1994 1994
<S> <C> <C> <C> <C>
Gasgoyne Gold Mines N.L.
ordinary shares, on exercise of options 25,000 - 695,000
issued pursuant to Employee Option
Plan - 1,515,000 - -
Pilbara Mines N L
issued pursuant to a prospectus - - 4,145,818 1,947,909
issued pursuant to the Directors,
Consultants and Employees Share
Option Plan - 3,680,000 - -
(h) Directors and their related entities
hold the following equity interests in
companies in the economic entity at
balance date
Gasgoyne Gold Mines N.L. 16,007,473 1,870,000 15,602,615 395,000
Pilbara Mines NL 4,705,818 6,010,909 4,145,818 1,947,909
</TABLE>
-24-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
29 CONTROLLED ENTITY
The controlled entity and contributions to consolidated profit:
<TABLE>
<CAPTION>
CONTRIBUTION TO
CONSOLIDATED
OPERATING PROFIT &
EXTRAORDINARY ITEMS
AFTER INCOME TAX
ATTRIBUTABLE TO
COUNTRY OF % INVESTMENT MEMBERS OF THE
INCORPORATION OWNED AT COST CHIEF ENTITY
1995 1994 1995 1994 1995 1994
$ $ $ $ $ $
<S> <C> <C> <C> <C> <C> <C> <C>
Chief Entity:
Gasgoyne Gold Mines N.L. Australia 9,005,525 8,138,781
Controlled Entity:
Pilbara Mines N.L. Australia 38.1 36.8 1,990,048 1,851,651 (127,507) (102,836)
---------------------------------------------------------
1,990,048 1,851,651 8,878,018 8,035,945
=========================================================
</TABLE>
Pilbara Mines N L is considered a controlled entity because the company
has the capacity to dominate the decision making in relation to the
financial and operating policies of the controlled entity so that the
controlled entity operates with the company to achieve its objectives.
30 NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of Cash
For the purposes of the statement of cash flows, cash includes cash on
hand and in banks and investments in money market instruments, net of
outstanding bank overdrafts. Cash at the end of the financial year as
shown in the statement of cash flows is reconciled to the related items
in the balance sheet as follows:
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
Cash 1,410,478 305,839 1,405,599 305,839
Deposits at call 10,319,374 11,869,079 1,690,557 2,021,846
Bank overdraft - (15,520) - -
------------------------------------------------------
11,729,852 12,159,398 3,096,156 2,327,685
======================================================
</TABLE>
Deposits at call includes $283,050 to secure a bank guarantee to the
lessor of the company's office premises.
-25-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
(b) Non-cash Financing and Investing Activities
(i) During the financial year the company paid dividends which
were satisfied by the issue of fully franked bonus shares with
an aggregate value of $3,215,475;
(ii) During the financial year the company acquired plant and
equipment by means of finance leases with an aggregate value
of $38,700 (1994 - $12,188);
(iii) During the financial year the controlled entity acquired
tenements by means of issue of shares in controlled entity to
outsiders totalling $50,000.
These acquisitions are not reflected on the statement of cash flows.
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
(c) Reconciliation of Net Cash
provided by Operating
Activities to Operating Profit
After Income tax
Operating profit after income tax 8,671,148 5,308,215 8,812,603 6,244,069
Depreciation 500,004 425,177 472,394 423,303
Amortisation 872,799 583,324 719,757 525,933
Loss/(Profit) on sale of investments 13,751 (915,300) 11,401 (915,300)
Loss/(Profit) on sale of equipment 528 (2,014) 528 (2,014)
Exploration costs written off 186,244 - 127,017 -
Movements in
- - Provision for income tax 2,710,366 1,163,247 2,710,366 1,163,247
- - Provision for deferred income tax (297,328) 498,552 (392,350) 885,589
Profits on sale of tenements - - - (1,172,838)
Change in assets and liabilities
(Increase)/Decrease in debtors (380,233) 138,268 (133,4l8) 130,116
(Increase) in inventories (2,048,301) (884,987) (2,048,301) (884,987
(Increase) in prepaid expenses (135,023) (25,061) (117,677) (24,347)
Decrease/(Increase) in gold on metals
accounts 1,030,140 (1,238,560) 1,030,140 (1,238,560)
Decrease/(Increase) in deferred mining costs 3,456,939 (1,543,930) 3,456,939 (1,543,930)
Increase in creditors 622,941 315,793 542,274 252,234
Increase in provision for employee
entitlements 5,557 3,180 5,557 3,180
(Decrease)/Increase in deferred gold sales
and fees (504,125) 915,684 (504,125) 915,684
------------------------------------------------------
Net cash provided by operating
Activities 14,705,407 4,741,588 14,693,105 4,761,379
======================================================
</TABLE>
-26-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1995 1994 1995 1994
$ $ $ $
<S> <C> <C> <C> <C>
31 EARNINGS PER SHARE
Basic earnings per share (cents per share) 20.2 13.00
Diluted earnings per share (cents per
share) 19.5 13.00
(a) Weighted average number of ordinary
shares outstanding during the year
used in calculation of basic earnings
per share 44,000,666 42,010,011
</TABLE>
(b) Classification of securities
Diluted earnings per share is calculated after classifying 3,517,000 (1994 -
922,000) options exercisable at below market price at balance date as
potential ordinary shares.
121,000 options have not been considered dilutive as they are exercisable at
above market price.
32 DIVIDENDS PAID AND PROPOSED
<TABLE>
<S> <C> <C> <C> <C>
Interim ordinary dividend of 5 cents per share
paid (fully franked, 1994 - unfranked 100%) 2,210,414 1,059,627 2,210,414 1,059,627
Proposed final ordinary dividend of 6 cents per
share (fully franked, 1994 fully franked) 2,813,230 2,114,615 2,813,230 2,114,615
------------------------------------------------------
5,023,644 3,174,242 5,023,644 3,174,242
======================================================
</TABLE>
33 EVENTS OCCURRING AFTER BALANCE DATE
Since 30 June 1995 the following significant events have occurred;
(a) On 6 September 1995 the company dispatched the takeover offer
documents to the controlled entity's share and option holders. The
consideration being offered by the company for:
(i) the acquisition of the controlled entity shares is the
allotment and issue of one company share credited as fully paid
for every 12 controlled entity shares; and
(ii) the acquisition of the controlled entity options is the
allotment and issue of one company share credited as fully paid
for every 40 of controlled entity options.
The offer is subject to specified conditions as outlined in the company's
offer documents which were dispatched to share and option holders on 6
September 1995.
As at 27 September 1995 the company and its associates were entitled to
64,492,614 (75.97%) of the controlled entity shares (of which 31,366,671 are
held directly by the company) and 31,177,166 controlled entity options (of
which 14,583,332 are directly held by the company).
-27-
<PAGE>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1995
(b) On 1 September 1995 the company announced that it had entered into a
Facility Agreement with Citibank Limited to provide a line of credit
to a maximum of $10,500,000 which may be drawn by the company in
cash or the gold equivalent thereof. The facility is for a period of
three years.
The Citibank facility will be used by the company for the ongoing
funding commitments on the Awak Mas Gold Project in South Sulawesi,
Indonesia and for other working capital requirements. However, due
to the substantial cash surplus being generated by the company's
interest in the Yilgarn Star Project, the Citibank facility is not
anticipated to be required to its full extent and at the date of
this report has only initially been drawn to the sum of $5,250,000.
Security of the Citibank facility is by way of a Fixed and Floating
Charge over all the assets and undertaking of the company
(c) On 13 September 1995 the company announced that in accordance with
the terms of the Masmindo Option Agreement, the company and its
joint venture partner, Lone Star Exploration N.L. had given notice
of exercise of the Option in relation to the Awak Mas Gold Project
and the first payment US$1 million had been paid.
As a result of the above, the effective equity holding in the Awak
Mas Gold Project is as follows:
<TABLE>
<S> <C>
Company 45%
Lone Star Exploration N.L. 45%
P T Asminco Bara Utama 10%
----
100%
====
</TABLE>
The balance of the consideration for the Masmindo Option Agreement
(US$3 million) will be paid in accordance with the terms of the
Option Agreement, being US$1 million on 15 September 1996 and US$2
million on 15 September 1997. These payments will be accelerated
should the project proceed to production prior to those dates.
-28-
<PAGE>
S T A T E M E N T B Y D I R E C T O R S
In the opinion of the directors of Gasgoyne Gold Mines N.L.:
(a) the financial statements set out on pages 30 to 53 are drawn up in
accordance with Divisions 4, 4A and 4B of Part 3.6 of the
Corporations Law and so as to give a true and fair view of:
(i) the state of affairs as at 30 June 1995 and the profit for the
financial year ended on that date of the company and the
economic entity; and
(ii) the other matters with which they deal; and
(b) at the date of this statement, there are reasonable grounds to
believe that the company will be able to pay its debts as and when
they fall due.
The financial statements are drawn up in accordance with applicable
Accounting Standards.
Signed in accordance with a resolution of the Directors.
Dated at Perth this 28th day of September, 1995.
BJ HURLEY
Director
P G CRABB
Direcror
-29-
<PAGE>
I N D E P E N D E N T A U D I T R E P O R T
SCOPE
We have audited the financial statements of Gasgoyne Gold Mines N.L. for the
year ended 30 June 1995 as set out on pages 30 to 54. The financial statements
include the consolidated accounts of the economic entity comprising the
company and its controlled entity. The company's directors are responsible for
the preparation and presentation of the financial statements and the
information they contain. We have conducted an independent audit of these
financial statements in order to express an opinion on them to the members of
the company.
Our audit has been conducted in accordance with Australian Auditing Standards
to provide reasonable assurance as to whether the financial statements are
free of material mix-statement. Our procedures included examination, on a test
basis, of evidence supporting the amounts and other disclosures in the
financial statements, and the evaluation of accounting policies and
significant accounting estimates. These procedures have been undertaken to
form an opinion as to whether, in all material respects, the financial
statements are presented fairly in accordance with Australian accounting
standards, other mandatory professional reporting requirements (Urgent Issues
Group Consensus Views), and statutory requirements so as to present a view of
the company and of the economic entity which is consistent with our
understanding of their financial position and the results of their operations
and cash flows.
The audit opinion expressed in this report has been formed on the above basis.
AUDIT OPINION
In our opinion, the financial statements of Gasgoyne Gold Mines N.L. are
properly drawn up:
(a) so as to give a true and fair view of:
(i) the state of affairs of the company and of the economic entity
as at 30 June 1995 and of their profit and cash flows for the
year ended on that date; and
(ii) the other matters required by Divisions 4, 4A and 4B of Part
3.6 of the Corporations Law to be dealt with in the financial
statements;
(b) in accordance with the provisions of the Corporations Law; and
(c) in accordance with applicable Accounting Standards and other
mandatory professional reporting requirements.
COOPERS & LYBRAND
Chartered Accountants
AJ EDWARDS
Partner
Perth, WA
28 September, 1995
-30-
<PAGE>
F I N A N C I A L S T A T E M E N T S
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
FOR THE YEAR ENDED 30 JUNE 1994
-31-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
BALANCE SHEET
AS AT 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
Notes 1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 12,174,918 2,629,333 2,327,685 2,629,332
Receivables 6 105,527 243,795 113,679 243,795
Investments 7 93,792 173,341 93,792 173,341
Inventories 8 1,789,217 904,230 1,789,217 904,230
Other 9 1,605,567 341,946 1,604,853 341,946
------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 15,769,021 4,292,645 5,929,226 4,292,644
------------------------------------------------------------------------------------------------------
NON-CURRENT ASSETS
Investments 10 10 10 1,851,661 11
Property, plant and equipment 11 3,011,607 2,480,045 2,993,806 2,480,045
Intangibles 12 827,221 252,734 166,082 252,734
Other 13 10,097,303 7,171,010 9,588,455 7,171,010
------------------------------------------------------------------------------------------------------
TOTAL NON-CURRENT ASSETS 13,936,141 9,903,799 14,600,004 9,903,800
------------------------------------------------------------------------------------------------------
TOTAL ASSETS 29,705,162 14,196,444 20,529,230 14,196,444
------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Creditors and borrowings 14 2,196,515 2,867,782 2,117,436 2,867,782
Provisions 15 4,464,814 2,640,965 4,464,814 2,640,965
Other 16 331,112 - 331,112 -
------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 6,992,441 5,508,747 6,913,362 5,508,747
------------------------------------------------------------------------------------------------------
NON-CURRENT LIABILITIES
Creditors and borrowings 17 68,626 84,493 68,626 84,493
Provisions 18 2,084,463 1,585,911 2,471,500 1,585,911
Other 19 584,572 - 584,572 -
------------------------------------------------------------------------------------------------------
TOTAL NON-CURRENT LIABILITIES 2,737,661 1,670,404 3,124,698 1,670,404
------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 9,730,102 7,179,151 10,038,060 7,179,151
------------------------------------------------------------------------------------------------------
NET ASSETS 19,975,060 7,017,293 10,491,170 7,017,293
======================================================================================================
SHAREHOLDERS' EQUITY
Share capital 20 4,082,059 3,913,459 4,082,059 3,913,459
Reserves 21 303,500 68,050 303,500 68,050
Retained profits 7,897,487 3,035,784 6,105,611 3,035,784
------------------------------------------------------------------------------------------------------
Shareholders' equity attributable
to members of the chief entity 12,283,046 7,017,293 10,491,170 7,017,293
Outside equity interests in
controlled entity 22 7,692,014 - - -
------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 19,975,060 7,017,293 10,491,170 7,017,293
======================================================================================================
</TABLE>
The above balance sheet should be read in conjunction with the accompanying
notes.
-32-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
Notes 1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C> <C>
Operating Revenue 2 23,918,760 19,466,278 24,984,725 19,466,278
======================================================================================================
Operating profit before income tax 3 8,067,211 7,647,770 9,390,102 7,647,770
Income tax attributable to
operating profit 4 2,758,996 2,706,138 3,146,033 2,706,138
------------------------------------------------------------------------------------------------------
Operating profit after income tax 5,308,215 4,941,632 6,244,069 4,941,632
Profit on extraordinary items 5 2,680,513 - - -
------------------------------------------------------------------------------------------------------
Operating profit and extraordinary
items after income tax 7,988,728 4,941,632 6,244,069 4,941,632
Outside equity interests in
operating profit and extraordinary
items after income tax (47,217) - - -
------------------------------------------------------------------------------------------------------
Operating profit and extraordinary
items after income tax attributable
to members of the Chief Entity 8,035,945 4,941,632 6,244,069 4,941,632
Retained profits at the
beginning of the financial year 3,035,784 582,819 3,035,784 582,819
------------------------------------------------------------------------------------------------------
Total available for appropriation 11,071,729 5,524,451 9,279,853 5,524,451
Dividends provided for or paid 31 3,174,242 2,488,667 3,174,242 2,488,667
------------------------------------------------------------------------------------------------------
Retained profits at the end of the
financial year 7,897,487 3,035,784 6,105,611 3,035,784
======================================================================================================
</TABLE>
The above profit and loss account should be read in conjunction with the
accompanying notes.
-33-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
STATEMENT OF CASH FLOWS
FOR YEAR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
Notes 1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Receipts from customers 23,144,108 19,186,524 23,144,108 19,186,524
Payments to suppliers and
employees (17,542,830) (12,724,933) (17,339,856) (12,724,933)
Interest received 262,663 117,485 79,480 117,485
Interest and other costs of
finance paid (25,156) (82,382) (25,156) (82,382)
Income tax paid (1,097,197) - (1,097,197) -
------------------------------------------------------------------------------------------------------
Net cash provided by operating
activities 29(c) 4,741,588 6,496,694 4,761,379 6,496,694
------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING
ACTIVITIES
Payment for mineral exploration and
development (1,821,644) (1,118,249) (1,389,958) (1,118,249)
Payments for investments (362,219) (125,003) (862,219) (125,004)
Proceeds from sale of investments 1,255,418 81,966 1,255,418 81,966
Payment for property, plant and
equipment 29(b) (1,014,500) (944,249) (994,825) (944,249)
Proceeds from sale of equipment 71,963 55,000 71,963 55,000
------------------------------------------------------------------------------------------------------
Net cash used in investing activities (1,870,982) (2,050,535) (1,919,621) (2,050,536)
------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of shares 404,050 221,050 404,050 221,050
Payment of prospectus issue expenses (765,208) - - -
Proceeds from borrowings - 354,374 - 354,374
Repayment of borrowings (1,024,168) (2,033,938) (1,024,168) (2,033,938)
Dividends paid (2,516,820) (2,052,221) (2,516,820) (2,052,221)
Other-outside equity 10,568,072 - - -
------------------------------------------------------------------------------------------------------
Net cash from financing activities 6,665,926 (3,510,735) (3,136,938) (3,510,735)
------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash held 9,536,532 935,424 (295,180) 935,423
Cash at beginning of the financial
year 2,622,866 1,687,442 2,622,865 1,687,442
------------------------------------------------------------------------------------------------------
Cash at the end of the financial 29(a) 12,159,398 2,622,866 2,327,685 2,622,865
year
======================================================================================================
</TABLE>
The above statement of cash flows should be read in conjunction with the
accompanying notes.
-34-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies adopted by the economic entity in
the preparation of the financial statements is set out in this note. The
policies adopted are in accordance with applicable Accounting Standards and
the Corporations Law, including the disclosure requirements of Schedule 5 of
the Corporations Regulations.
(a) HISTORICAL COST
The financial statements have been prepared under the convention of historical
cost accounting and do not take into account changing money values.
(b) PRINCIPLES OF CONSOLIDATION
The consolidated accounts comprise the accounts of the company and its
controlled entity, Pilbara Mines N. L. A controlled entity is any entity
controlled by the company Control exists where the company has the capacity to
dominate the decision-making in relation to the financial and operating
policies of another entity so that the other entity operates with the company
to achieve its objectives.
All inter-company balances and transactions between entities in the economic
entity, including any unrealized profits or losses, have been eliminated on
consolidation.
Where the controlled entity has entered or left the economic entity during the
year, their operating results have been included from the date control was
obtained or until the date control ceased.
(c) INTERESTS IN JOINT VENTURES
1. The economic entity's interests in production joint ventures are
brought to account by including the amount of:
(i) the entity's interest in each of the individual assets
employed in the joint ventures;
(ii) the entity's share of liabilities incurred by the joint
ventures, and
(iii) the entity's interest in the expenses incurred in relation to
the joint ventures.
2. The entity's interests in exploration joint ventures are brought to
account based on the actual expenditure incurred by the entity in
contributing to the joint venture exploration programmes.
(d) REVENUE RECOGNITION
(i) Refined gold which is subject to forward sales contracts, is
recognised as revenue at the appropriate forward sales price
at the point at which the bullion has been refined and is
available for delivery. Unrealized gains or losses relating to
forward gold sales contracts outstanding at balance date are
not reflected in the profit and loss account.
(ii) Gold delivered as repayment of the gold loan is accounted for
as in note 1 (m).
(iii) Funds received on the sale of call options, other than in
circumstances where the call option is related to forward
selling arrangements, are recognised as revenue when received.
-35-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
(e) INCOME TAX
Tax effect accounting procedures are followed using the liability method of
tax effect accounting, whereby the income tax expense for the year is matched
with the accounting result after allowance for permanent differences.
Future income tax benefits are not brought to account unless realization of
the asset is assured BEYOND reasonable doubt in respect to timing differences,
and virtually certain in respect of tax losses.
(f) INVENTORIES
(i) Ore stockpiles and gold in circuit are valued at the lower of
cost and net realisable value. Cost comprises direct material,
labour and transportation expenditure incurred in getting
inventories to their existing location and condition, together
with an appropriate portion of fixed and variable overhead
expenditure based on weighted average costs incurred during
the period in which such inventories were produced.
(ii) Stores and consumables are valued at the lower of weighted
average cost and net realisable value.
(g) EXPLORATION AND DEVELOPMENT EXPENDITURE
Exploration, evaluation and development expenditure incurred is accumulated in
respect of each identifiable area of interest. These costs are only carried
forward to the extent that they are expected to be recouped through the
successful development of the area or where activities in the area have not
yet reached a stage which permits reasonable assessment of the existence of
economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full
against profit in the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area according to the rate of
depletion of the economically recoverable reserves. Any costs of site
restoration are provided for during the relevant production stages and
included in the costs of that
A regular review is undertaken of each area of interest to determine the
appropriateness of continuing carry forward costs in relation to that area of
interest
(h) RESTORATION, REHABILITATION AND ENVIRONMENTAL COSTS
Restoration, rehabilitation and environmental expenditure to be incurred
during the production PHASE of operations is accrued when the need for such
expenditure is established and then written off immediately as part of the
cost of production of the mine property concerned.
There is no provision in the accounts for restoration, rehabilitation and
environmental expenditure to be incurred subsequent to the cessation of
production at a mine property.
-36-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT
FOR THE YEAR ENDED 30 JUNE 1994
(i) PROPERTY, PLANT AND EQUIPMENT
(i) The cost of each item of buildings, machinery and equipment
held at mine sites is written off over its expected economic
life. Each item's economic life has due regard both to its own
physical life limitations and to present assessments of
economically recoverable resources of the mine property at
which the item is located, and to possible future variations
in those assessments. Estimates of remaining useful lives are
made on a regular basis for all assets, with annual
reassessments for major items.
The total net carrying values of mine buildings, machinery and
equipment at each mine property are reviewed regularly and, to
the extent to which these values exceed their recoverable
amounts, that excess if fully provided against in the
financial year in which this is determined.
(ii) Other assets are depreciated over their expected useful lives
on the straight line or reducing balance basis as appropriate.
(j) LEASES
Leased assets, other than operating leases, where substantially all the risks
and benefit incident to the ownership of the asset but not the legal ownership
are transferred to the company are classified as finance leases. Finance
leases are capitalised recording an asset and a liability equal to the present
value of the minimum lease payments, including any guaranteed residual value.
Leased assets are amortised over their estimated useful lives. Lease payments
are allocated between the reduction of the lease liability and the lease
interest expense for the period. Lease payments under operating leases are
charged as expenses in the periods in which they are incurred.
(k) INTANGIBLES
Intangibles comprise expenses incurred in connection with the prospectus
issued by the company and its controlled entity which are being amortised over
a period of 5 years commencing from the date of the successful flotation of
the shares.
(l) EMPLOYEE ENTITLEMENTS
The amounts expected to be paid to employees for their pro-rata entitlement to
annual and sick leave are accrued annually at current pay rates having regard
to experience of employee departures and periods of service.
(m) GOLD LOAN
The gold loan is carried in the financial statements at a rate equal to the
price of gold at the date of drawdown. Gold delivered as repayment of the loan
is recorded as sales and as a reduction of liability at the same historical
gold price as at drawdown.
-37-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
(n) Segmental Information
The economic entity operates predominantly in the mining industry in Western
Australia.
(o) Cash
For the purpose of the statement of cash flows, cash includes:
(i) cash on hand and in at call deposits with banks or financial
institutions, net of bank overdrafts; and
(ii) investments in money market instruments with less than 14 days
to maturity.
(p) Comparative Figures
Where required by Accounting Standards comparative figures have been adjusted
to conform with changes in presentation for the current financial year.
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
2 OPERATING REVENUE
Gold sales 20,832,079 18,640,278 20,832,079 18,640,278
Gold call option fee 1,000,000 - 1,000,000 -
Royalties received - 65,210 - 65,210
Sales of investments 1,255,418 81,966 1,255,418 81,966
Sales of plant and equipment 71,963 55,000 71,963 55,000
Interest received 262,663 122,032 79,480 122,032
Sales of tenements - - 1,250,000 -
Other income 496,637 501,792 495,785 501,792
------------------------------------------------------------------------------------------------------
23,918,760 19,466,278 24,984,72 19,466,278
======================================================================================================
</TABLE>
3 OPERATING PROFIT
The operating profit before
income tax has been determined
after crediting and charging
the following specific items:
a) Crediting as income
<TABLE>
<S> <C> <C> <C> <C>
Interest received from unrelated
corporations 262,663 122,032 79,480 122,032
Profit on share trading 915,300 13,365 915,300 13,365
Profit on disposal of plant and equipment (2,014) 4,160 (2,014) 4,160
</TABLE>
-38-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
b) CREDITING AS ABNORMAL
Profit on sale of tenements - - 1,172,838 -
Gold call option fee 1,000,000 - 1,000,000 -
------------------------------------------------------------------------------------------------------
1,000,000 - 2,172,838 -
------------------------------------------------------------------------------------------------------
Income tax at 33% 330,000 - 717,037 -
------------------------------------------------------------------------------------------------------
c) CHARGING AS EXPENSES
Amortisation - assets under finance leases 28,909 21,740 28,909 21,740
- prospectus issue expenses 144,043 86,651 86,652 86,651
- exploration expenses 439,281 366,438 439,281 366,438
Depreciation - plant and equipment 396,268 618,673 394,394 618,673
Exploration expenditure on areas
written off - 177,312 - 177,312
Interest paid to unrelated corporations 12,513 72,517 12,513 72,517
Lease finance charges 12,643 9,864 12,643 9,864
Operating lease rentals 44,564 39,771 44,564 39,771
Royalties paid - 574,105 - 574,105
Provision for employee entitlements 3,089 281,647 3,089 28,647
4 INCOME TAX
Operating profit before income tax 8,067,211 7,647,770 9,390,102 7,647,770
------------------------------------------------------------------------------------------------------
Income tax @ 33% (1993 - 39%) 2,662,180 2,982,630 3,098,734 2,982,630
------------------------------------------------------------------------------------------------------
Permanent differences
- Amortisation of prospectus expenses 47,534 33,794 28,595 33,794
- Other 38,435 25,768 18,704 25,768
------------------------------------------------------------------------------------------------------
2,748,149 3,042,192 3,146,033 3,042,192
Utilization of unrecognized future
income tax benefits of prior years - (47,707) - (47,707)
Effect on deferred income tax of change
in tax rate from 39% to 33% - (288,347) - (288,347)
Future income tax benefits not recognised 10,847 - - -
------------------------------------------------------------------------------------------------------
Income tax attributable to operating
profit 2,758,996 2,706,138 3,146,033 2,706,138
======================================================================================================
</TABLE>
-39-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
Provision for income tax 2,260,444 1,120,227 2,260,444 1,120,227
Provision for deferred income tax 498,552 1,585,911 885,589 1,585,911
------------------------------------------------------------------------------------------------------
2,758,996 2,706,183 3,146,033 2,706,138
------------------------------------------------------------------------------------------------------
</TABLE>
The future income tax benefit of $l0,847 attributable to tax losses of
the controlled entity has not been brought to account as realization of
the benefit is not virtually certain. The benefit will only be obtained
if:
(a) the controlled entity derives future assessable income of a
nature and of an amount sufficient to enable the benefit from
the deductions for the loss to be realized;
(b) the controlled entity continues to comply with the conditions
for deductibility imposed by tax legislation; and
(c) no changes in tax legislation adversely affect the controlled
entity in realizing the benefit from the deductions for the
loss.
5 EXTRAORDINARY ITEM
<TABLE>
<S> <C> <C> <C> <C>
Gain on reduction in ownership interest
in controlled entity 2,680,513 - - -
======================================================================================================
</TABLE>
There is no tax attributable to this gain.
6 CURRENT ASSETS - RECEIVABLES
<TABLE>
<S> <C> <C> <C> <C>
Trade debtors 47,536 243,795 55,833 243,795
Other debtors 57,991 - 57,846 -
------------------------------------------------------------------------------------------------------
105,527 243,795 113,679 243,795
======================================================================================================
</TABLE>
7 CURRENT ASSETS - INVESTMENTS
<TABLE>
<S> <C> <C> <C> <C>
Investment listed on a prescribed
stock exchange at cost 93,792 173,341 93,792 173,341
------------------------------------------------------------------------------------------------------
Market Value 142,180 1,099,452 142,180 1,099,452
======================================================================================================
</TABLE>
-40-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
8 CURRENT ASSETS - INVENTORIES
Ore stockpiles 1,226,977 569,351 1,226,977 569,351
Gold in circuit 161,493 191,142 161,493 191,142
Stores and consumables 400,747 143,737 400,747 143,737
------------------------------------------------------------------------------------------------------
1,789,217 904,230 1,789,217 904,230
======================================================================================================
9 CURRENT ASSETS - OTHER
Prepayments 74,092 49,031 73,378 49,031
Gold on metal account 1,531,475 292,915 1,531,475 292,915
------------------------------------------------------------------------------------------------------
1,605,567 341,946 1,604,853 341,946
======================================================================================================
10 NON-CURRENT ASSETS - INVESTMENTS
Investments in unlisted companies at cost 10 10 10 10
Investment in controlled entity at cost - - 1,851,651 1
------------------------------------------------------------------------------------------------------
10 10 1,851,661 11
======================================================================================================
The controlled entity is a listed company
Market value of traceable shares - - 100,000 -
Cost of escrowed shares - - 1,750,000 -
11 NON-CURRENT ASSETS - PROPERTY, PLANT
AND EQUIPMENT
Freehold land at cost 44,160 41,189 44,160 41,189
------------------------------------------------------------------------------------------------------
Buildings at cost 611,531 237,307 611,531 237,307
Less: accumulated depreciation 133,507 63,916 133,507 63,916
------------------------------------------------------------------------------------------------------
478,024 173,391 478,024 173,391
======================================================================================================
</TABLE>
-41-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
Plant and equipment, at cost 3,535,095 2,974,780 3,515,420 2,974,780
Less: accumulated depreciation 1,116,125 806,088 1,114,251 806,088
------------------------------------------------------------------------------------------------------
2,418,970 2,168,692 2,401,169 2,168,692
------------------------------------------------------------------------------------------------------
Plant and equipment under lease 118,311 129,683 118,311 129,683
Less: amortisation 47,858 32,910 47,858 32,910
------------------------------------------------------------------------------------------------------
70,453 96,773 70,453 96,773
------------------------------------------------------------------------------------------------------
3,011,607 2,480,045 2,993,806 2,480,045
======================================================================================================
12 NON-CURRENT ASSETS - INTANGIBLES
Prospectus issue expenses 1,151,523 432,993 432,993 432,993
Less: amortisation 324,302 180,259 266,911 180,259
------------------------------------------------------------------------------------------------------
827,221 252,734 166,082 252,734
======================================================================================================
13 NON-CURRENT ASSETS - OTHER
Deferred mining costs (a) 4,682,483 3,138,553 4,682,483 3,138,553
Expenditure on mineral exploration
evaluation and development (b) 5,414,820 4,032,457 4,905,972 4,032,457
------------------------------------------------------------------------------------------------------
10,097,303 7,171,010 9,588,455 7,171,010
======================================================================================================
<FN>
(a) Deferred mining costs represent costs of mining waste in excess of the
estimated ratio of waste to ore over the mine life.
</FN>
</TABLE>
-42-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE FOR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
(b) Expenditure on mineral
exploration evaluation and
development on areas of
interest represents:
- in the exploration or evaluation phase 3,225,491 1,968,230 2,716,643 1,968,230
------------------------------------------------------------------------------------------------------
- in which production has commenced 3,229,949 2,665,566 3,229,949 2,665,566
Less: accumulated amortisation 1,040,620 601,339 1,040,620 601,339
------------------------------------------------------------------------------------------------------
2,189,329 2,064,227 2,189,329 2,064,227
------------------------------------------------------------------------------------------------------
5,414,820 4,032,457 4,905,972 4,032,457
======================================================================================================
</TABLE>
The carrying value of mineral exploration, evaluation and development
expenditure is dependent upon the discovery and exploitation of commercially
viable mineral deposits, the generation of sufficient future income
therefrom or sale for at least carrying value.
14 CURRENT LIABILITIES - CREDITORS & BORROWINGS
<TABLE>
<S> <C> <C> <C> <C>
Bank overdraft 15,520 6,467 - 6,467
Trade creditors 1,312,527 950,170 1,255,968 950,170
Other creditors 847,368 893,932 840,368 893,932
Lease liabilities 21,100 22,517 21,100 22,517
Gold loan, secured - 994,696 - 994,696
------------------------------------------------------------------------------------------------------
2,196,515 2,867,782 2,117,436 2,867,782
======================================================================================================
15 CURRENT LIABILITIES - PROVISIONS
Employee entitlements 65,983 62,803 65,983 62,803
Dividends 2,115,357 1,457,935 2,115,357 1,457,935
Income tax 2,283,474 1,120,227 2,283,474 1,120,227
------------------------------------------------------------------------------------------------------
4,464,814 2,640,965 4,464,814 2,640,965
======================================================================================================
16 CURRENT LIABILITIES - OTHER
Prepaid gold sales and fees 331,112 - 331,112 -
======================================================================================================
17 NON CURRENT LIABILITIES - CREDITORS
AND BORROWINGS
Lease Liabilities 68,626 84,493 68,626 84,493
======================================================================================================
</TABLE>
-43-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
18 NON-CURRENT LIABILITIES - PROVISIONS
Deferred income tax 2,084,463 1,585,911 2,471,500 1,585,911
======================================================================================================
19 NON CURRENT LIABILITIES - OTHER
Prepaid gold sales and fees 584,572 - 584,572 -
======================================================================================================
20 SHARE CAPITAL
AUTHORISED
100,000,000 shares of 20 cents each 20,000,000 20,000,000 20,000,000 20,000,000
ISSUED AND PAID UP
42,292,293 ordinary shares of 20 cents
each (1993 - 41,449,293) 8,458,459 8,289,859 8,458,459 8,289,859
Discount on shares (4,376,400) (4,376,400) (4,376,400) (4,376,400)
------------------------------------------------------------------------------------------------------
4,082,059 3,913,459 4,082,059 3,913,459
======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
20.1 Movement in issued share capital Number $
<S> <C> <C>
Opening balance 41,449,293 3,913,459
Allotted on conversion of options 843,000 168,600
------------------------------------------------------------------------------------------------------
42,292,293 4,082,059
======================================================================================================
</TABLE>
20.2 At balance date the company had on issue the following unquoted
options to subscribe or ordinary shares exercisable on or before 30
June 1997
<TABLE>
<CAPTION>
1994 1993 Exereise
Price
<S> <C> <C> <C>
830,000 1,665,000 $0.47
92,000 100,000 $1.45
121,000 - $2.24
</TABLE>
20.3 At balance date the controlled entity had on to persons not being
members of the economic entity, 30,420,146 options to subscribe for
ordinary shares in the controlled entity at an exercise price of 20
cents per share, exercisable on or before 30 June 1998.
-44-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
21 RESERVES
Share Premium at beginning of year 68,050 10,000 68,050 10,000
On conversion of 872,037 options at a
premium of 27 cents per share 235,450 58,050 235,450 58,050
------------------------------------------------------------------------------------------------------
303,500 68,050 303,500 68,050
======================================================================================================
22 OUTSIDE EQUITY INTERESTS IN
CONTROLLED ENTITY
Outside equity interest comprises:
Share capital 7,786,813 - -- --
Accumulated losses (94,799) - - -
------------------------------------------------------------------------------------------------------
7,692,014 - -- --
======================================================================================================
</TABLE>
The outside equity interests in the issued and paid-up capital of the
controlled entity comprises 51,840,362 fully paid ordinary shares of 20
cents each issued at varying discounts.
23 COMMITMENTS
23.1 EXPLORATION AND DEVELOPMENT EXPENDITURE
In order to maintain the exploration leases, licenses and permits in
which the company and other joint venturers are involved, all
participants are committed to fulfill the minimum annual expenditure
conditions under which the tenements are granted. These obligations
may be varied from time to time, subject to approval, and are
expected to be fulfilled in the normal course of operations of the
company.
23.2 INTERESTS IN JOINT VENTURE
The company has entered into joint ventures with other parties for
the purpose of exploiting and developing its mining tenements. If a
participant to a joint venture defaults and fails to contribute its
share of joint venture obligations, then the joint venturers are
jointly and severally liable to meet the obligations of the
defaulting venture. In this event the interest in the tenement held
by the defaulting participant may be redistributed to the remaining
joint venturers. In the event of a default a commitment exists in
respect of expenditure commitments due to be met by the company's
defaulting joint venture partner.
-45-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
23.3 Lease Commitments
(a) Finance leases - plant &
equipment
due within 1 year 30,267 34,359 30,267 34,359
due within 1-2 years 32,102 28,547 32,102 28,547
DUE WITHIN 2-5 years 44,549 72,716 44,549 72,716
------------------------------------------------------------------------------------------------------
Minimum lease payments 106,918 135,622 106,918 135,622
Less: future finance charges 17,192 28,612 17,192 28,612
------------------------------------------------------------------------------------------------------
Provided for in the accounts 89,726 107,010 89,726 107,010
======================================================================================================
(b) Non-cancellable operating
leases
due within 1 year - 39,864 - 39,864
due within 1-2 years 101,250 36,542 101,250 36,542
due within 2-5 year 573,750 - 573,750 --
------------------------------------------------------------------------------------------------------
Not provided for in the
accounts 675,000 76,406 675,000 76,406
======================================================================================================
</TABLE>
23.4 Forward Sales Contracts
At balance date the company had outstanding gold per forward safes
contracts for 144,346 (1993-117,599) ounces at an average price of
$570 (1993-$492) per ounce.
23.5 Gold Call Option
At balance date the company had outstanding a gold call option
expiring 28 March 1996 to deliver 22,325 ounces at a price of $580
per ounce exercisable by the option holder.
-46-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
24 JOINT VENTURES
24.1 The economic entity has interests in the following unincorporated
joint ventures:
<TABLE>
<CAPTION>
JOINT VENTURE PRINCIPAL ACTIVITIES PERCENTAGE INTEREST
RIGHT TO OBLIGATION
ACQUIRE TO DISPOSE
======================================================================================================
COMPANY
<S> <C> <C> <C>
Yilgarn Star Exploration Gold Exploration 50 -
Yilgarn Star Production Production from Yilgarn Star Mine 50 -
Star Milling Operation of Burbidge Gold Plant 50 -
Marvel Loch Gold Exploration 50 --
Boodarding Gold Exploration 44.25 --
McGowans Find Gold Exploration 45 --
Toomey Hills Gold Exploration 47.5 --
Centenary Gold Exploration 47.5 --
Dulcie Gold Exploration 37.5 --
LSD Gold Exploration 95 --
Polar Bear Gold Exploration - 17.5
Norseman Gold Exploration - 35
Wilga Well Gold Exploration 90 --
Sunrise Dam Gold Exploration 80 --
Norseman East Gold Exploration - 70
Wilga Well West Gold Exploration 80 --
Sunrise Dam West Gold Exploration 90 --
Olga Rocks Gold Exploration 45 --
CONTROLLED ENTITY
Whim Creek Base Metal Exploration 70 --
Mt Fraser Base Metal Exploration 51 --
======================================================================================================
</TABLE>
24.2 JOINT VENTURE ASSETS AND LIABILITIES
The company's share of assets and liabilities in the above joint
ventures has been included in the balance sheet of the company under
the following classifications.
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash 123,703 372,391 123,703 372,391
Receivables 57,846 129,502 57,846 129,502
Inventories 1,789,217 904,230 1,789,217 904,230
Other 54,514 32,096 54,514 32,096
------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 2,025,280 1,438,219 2,025,280 1,438,219
======================================================================================================
</TABLE>
-47-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
NON-CURRENT ASSETS
Property, plant and equipment 2,714,217 2,280,288 2,714,217 2,280,288
Other - Exploration evaluation
and development 3,907,911 2,726,076 3,703,958 2,726,076
- Deferred mining 4,682,483 3,138,553 4,682,483 3,138,553
------------------------------------------------------------------------------------------------------
TOTAL NON-CURRENT ASSETS 11,304,611 8,144,917 11,100,658 8,144,917
------------------------------------------------------------------------------------------------------
TOTAL ASSETS 13,329,891 9,583,136 13,125,938 9,583,136
======================================================================================================
CURRENT LIABILITIES
Creditors and borrowings 1,992,234 1,722,163 1,992,234 1,722,163
Provisions 55,686 40,861 55,686 40,861
------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 2,047,920 1,763,024 2,047,920 1,763,024
======================================================================================================
24.3 JOINT VENTURE CONTRIBUTIONS
The net contribution of joint venture
activities to operating profit before
income tax may be summarized as
follows:
Share of costs incurred by production
joint ventures 13,520,368 9,920,245 13,520,368 9,920,245
Additional costs incurred by company 338,285 645,396 338,285 645,396
------------------------------------------------------------------------------------------------------
13,858,653 10,565,641 13,858,653 10,565,641
Revenue from sale of company share
of gold produced and other income
of joins ventures 21,175,665 19,038,674 21,175,665 19,038,674
------------------------------------------------------------------------------------------------------
Net contribution 7,317,012 8,473,033 7,317,012 8,473,033
======================================================================================================
</TABLE>
24.4 CONTINGENT LIABILITY
The open pit mining contractor has advised that it intends to lodge cost
reimbursement claims against the Yilgarn Star Joint Venture participants
totaling $1 million. The claims will be disputed by the Yilgarn Star
Venture participants.
-48-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
REMUNERATION OF THE DIRECTORS
Amounts received, or due and
receivable by directors of the
company from the company
and its controlled entity 434,235 275,433
Amounts received, or due and
receivable by directors of each
entity in the economic entity from
the company and its
controlled entity 434,235 275,433
Directors remuneration includes
superannuation payments and is
disclosed in accordance with class
order 94/947 "Disclosure of Directors
Remuneration" issued by the
Australian Securities Commission.
Number of directors of the company
whose remuneration was within the
following bands:
</TABLE>
<TABLE>
<S> <C> <C>
$ O - 9,999 1 1
$ 10,000 - 19,999 1 1
$ 30,000 - 39,999 - 1
$ 40,000 - 49,999 - 1
$ 50,000 - 59,999 - 1
$ 60,000 - 69,999 - -
$ 70,000 - 79,999 1 -
$ 80,000 - 89,999 1 -
$120 000 - 129 999 1 1
$130 000 - 139 999 1 -
</TABLE>
26 AUDITORS' REMUNERATION
Amounts received, or due and receivable by
the auditors for:
<TABLE>
<S> <C> <C> <C> <C>
(a) Auditing the accounts of the
company 22,250 15,100 15,250 15,100
(b) Other services 10,575 2,525 2,075 2,525
</TABLE>
27 RELATED PARTY TRANSACTIONS
The directors of the company during the year were P G Crabb, R W Crabb, R J
Dunn, D Dunnet (resigned 29 November 1993), B J Hurley and D J Porter.
(a) Directors' remuneration and superannuation is disclosed in note 25.
(b) Legal fees of $97,822 (1993 - $56,791) were paid by the economic
entity and joint ventures in which it has an interest in the normal
course of business to a firm in which R W Crabb is a partner.
-49-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
(c) Consultancy fees totalling $309,635 (1993 - $202,493) were paid to P
G Crabb, R J Dunn, D Dunnct, B J Hurley, D J Porter and their
director related entities by the economic entity and joint ventures
in which it has an interest for services relating to exploration
activities, and is included in directors remuneration.
(d) Aggregate amounts receivable from and payable to directors and their
director related entities at the end of the financial year were
$1,071 (1993 - $6,938) and $26,769 (1993 - $1,935) respectively.
(e) The company has entered into joint venture agreements with Orion
Resources N L, a company of which D Dunnet (a former director) is a
director and Bredelle Pty Ltd a company in which R W Crabb has an
interest.
(f) Directors and their related entities acquired the following equity
interests in companies in the economic entity during the year.
<TABLE>
<CAPTION>
Number of Number of
Shares Options
<S> <C> <C>
Gasgoyne Gold Mines N.L.
On exercise of options 695,000
Pilbara Mines N L
Pursuant to a prospectus 4,145,818 1,947,909
(g) Directors and their related entities
hold the following equity interests in
companies in the economic entity at
Gasgoyne Gold Mines N.L. 15,602,615 395,000
Pilbara Mines N L 4,145,818 1,947,909
</TABLE>
-50-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
28 CONTROLLED ENTITY
The controlled entity and contributions to consolidated profit:
<TABLE>
<CAPTION>
Contribution To
Consolidated
Operating profit &
extraordinary items
after income tax
attributable to
Country Of % Investment members of the
Incorporation Owned At Cost Chief Entity
1994 1993 1994 1993 1994 1993
$ $ $ $ $ $
<S> <C> <C> <C> <C> <C> <C> <C>
CHIEF ENTITY:
Gasgoyne Gold Mines N.L. Aust 8,138,781 4,941,632
CONTROLLED ENTITY:
Pilbara Mines N.L. Aust 36.8 100.0 1,851,651 1 (102,836) --
-------------------------
8,035,945 4,941,632
=========================
</TABLE>
Pilbara Mines N L is considered a controlled entity because the company has
the capacity to dominate the decision making in relation to the financial and
operating policies of the controlled entity so that the controlled entity
operates with the company to achieve its objectives.
29 NOTES TO THE STATEMENT OF CASH FLOWS
(a) RECONCILIATION OF CASH
For the purposes of the statement of cash flows, cash includes cash
on hand and in banks and investments in money market instruments,
net of outstanding bank overdrafts. Cash at the end of the financial
year as shown in the statement of cash flows is reconciled to the
related items in the balance sheet as follows:
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
Cash 305,839 413,127 305,839 413,126
Deposits at call 11,869,079 2,216,206 2,021,846 2,216,206
Bank overdraft (15,520) (6,467) - (6,467)
------------------------------------------------------------------------------------------------------
12,159,398 2,622,866 2,327,685 2,622,865
======================================================================================================
</TABLE>
Deposits at call includes $283,050 to secure a bank guarantee to the lessor of
the company's office premises.
-51-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
(b) NON-CASH FINANCING AND INVESTING ACTIVITIES
During the year the economic entity and the company acquired plant
and equipment with an aggregate fair value of $12,188 (1993 -
$103,323) by means of finance leases. These acquisitions are not
reflected on the statement of cash flows.
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
(c) RECONCILIATION OF NET CASH
PROVIDED BY OPERATING ACTIVITIES
TO OPERATING PROFIT AFTER INCOME
TAX
Operating profit after income tax 4,921,178 4,941,632 6,244,069 4,941,632
Depreciation 425,177 618,673 423,303 618,673
Amortisation 583,324 474,829 525,933 474,829
Profit on sale of investments (915,300) (13,365) (915,300) (13.365)
Profit on sale of equipment (2,014) (4,160) (2,014) (4,160)
Exploration costs written off - 177,312 - 177,312
Movements in -
Provision for income tax 1,163,247 1,120,227 1,163,247 1,120,227
Movements in -
Provision for deferred income tax 885,589 1,585,911 885,589 1,585,911
Profits on sale of tenements - (1,172,838)
Change in assets and liabilities
Decrease in debtors 138,268 (101,187) 130,116 (101,187)
Decrease/(lncrease) in inventories (884,987) 371,012 (884,987) 371,012
Decrease/(lncrease) in prepaid expenses (25,061) 13,497 (24,347) 13,497
Increase in gold on metals accounts (1,238,560) (20,756) (1,238,560) (20,756)
Increase in deferred mining costs (1,543,930) (3,138,553) (1,543,930) (3,138,553)
Increase in creditors 315,793 442,975 252,234 442,975
Increase in provision for employee
entitlements 3,180 28,647 3,180 28,647
Increase in deferred gold sales and
fees 915,684 - 915,684 --
Net cash provided by operating
activities 4,741,588 6,496,694 4,761,379 6,496,694
30 EARNINGS PER SHARE
Basic earnings per share (cents per share) 13.00 12.0
Diluted earnings per share (cents per
share) 13.00 11.8
a) Weighted average number of ordinary
shares outstanding during the year
used in calculation of basic earnings
per share 42,010,011 41,041,793
</TABLE>
-52-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1994
(b) CLASSIFICATION OF SECURITIES
Diluted earnings per share is calculated after classifying 922,000
options exercisable at below market price at balance date as
potential ordinary shares.
121,000 options have not been considered dilutive as they are
exercisable at above market price.
31 DIVIDENDS PAID AND PROPOSED
<TABLE>
<CAPTION>
ECONOMIC ENTITY COMPANY
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
Interim ordinary dividend of 2.5 cents per
share paid 28 February 1994 (unfranked
100% 1993 - unfranked 100%)
1,059,627 1,030,732 1,059,627 1,030,732
Proposed final ordinary dividend of 5
cents per share (fully franked, 1993
unfranked 100%)
2,114,615 1,457,935 2,114,615 1,457,935
------------------------------------------------------------------------------------------------------
3,174,242 2,488,667 3,174,242 2,488,667
======================================================================================================
</TABLE>
-53-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
STATEMENT BY DIRECTORS
In the opinion of the directors of Gasgoyne Gold Mines N.L.:
(a) the accompanying Profit and Loss account is drawn up so as to give a
true and fair view of the results of the company for the financial
year ended 30 June 1994;
(b) the accompanying Balance Sheet is drawn up so as to give a true and
fair view of the state of affairs of the company as at 30 June 1994;
and
(c) the accompanying consolidated accounts:
(i) have been made out in accordance with Divisions 4A and 4B of
Part 3.6 of the Corporations Law; and
(ii) give a true and fair view of the matters dealt with by those
Divisions; and
(d) at the date of this statement, there are reasonable grounds to
believe that the Company will be able to pay its deters as and when
they fall due.
Signed in accordance with a resolution of the Directors. Dated at
Perth this 14th day of October, 1994.
P G CRABB
Director
RWCRABB
Director
-54-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
INDEPENDENT AUDIT REPORT TO THE MEMBERS
AUDIT SCOPE
We have audited the financial statements of Gasgoyne Gold Mines N.L. and
of the economic entity for the year ended 30 June 1994 as set out on
pages 25 to 47. The company's directors are responsible for the
preparation and presentation of the financial statements and the
information they contain. We have conducted an independent audit of these
financial statements in order to express an opinion on them to the
members of the company.
Our audit has been conducted in accordance with Australian Auditing
Standards to provide reasonable assurance as to whether the financial
statements are free of material mix-statement. Our procedures included
examination, on a test basis, of evidence supporting the amounts and
other disclosures in the financial statements and the evaluation-of
accounting policies and significant accounting estimates. These
procedures have been undertaken to form an opinion as to whether, in all
material respects, the financial statements are presented fairly in
accordance with Australian Accounting Standards and statutory
requirements so as to present a view of the company and of the economic
entity which is consistent with our understanding of their financial
position and the results of their operations and cash flows.
The audit opinion expressed in this report has been formed on this basis.
AUDIT OPINION
In our opinion, the accounts of Gasgoyne Gold Mines N.L. and of the
economic entity are properly drawn up:
(a) so as to give a true and fair view of:
(i) the state of affairs of the company and of the economic entity
as at 30 June 1994 and of their results and cash flows for the
year ended on that date;
(ii) the other matters required by Divisions 4, 4A and 4B of Part
3.6 of the Corporations Law to be dealt with in the accounts;
and
(b) in accordance with the provisions of the Corporations Law; and
(c) in accordance with applicable accounting standards.
HORWATH & HORWATH R G HOWARD
Chartered Accountants Partner
Perth Partnership
Perth, WA
15th October, 1994
-55-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
BALANCE SHEET
AS AT MARCH 31, 1996
<TABLE>
Consolidated
<CAPTION>
31/03/1996
$
<S> <C>
CURRENT ASSETS
Cash 11,710,261
Receivables 283,549
Investments 988,764
Inventories 3,148,703
Other 1,075,983
------------
TOTAL CURRENT ASSETS 17,207,260
------------
NON-CURRENT ASSETS
Receivables 8,347,223
Investments 626,079
Property, plant and equipment 7,187,072
Intangibles 363,123
Other 18,448,376
------------
TOTAL NON-CURRENT ASSETS 34,971,873
------------
TOTAL ASSETS 52,179,133
CURRENT LIABILITIES
Accounts payable 2,749,419
Borrowings 8,316,309
Provisions 3,448,723
Other 82,570
------------
TOTAL CURRENT LIABILITIES 14,597,021
------------
NON-CURRENT LIABILITIES
Borrowings 55,702
Provisions 1,745,688
Other 134,255
------------
TOTAL NON-CURRENT LIABILITIES 1,935,645
------------
TOTAL LIABILITIES 16,532,666
------------
NET ASSETS 35,646,467
============
SHAREHOLDERS' EQUITY
Share capital 6,525,906
Reserves 13,272,621
Retained profits 15,847,940
------------
Shareholders' equity attributable to
members of the chief entity 35,646,467
Outside equity interests in
controlled entity -
TOTAL SHAREHOLDERS' EQUITY 35,646,467
============
</TABLE>
The above balance sheet should be read in conjunction with the accompanying
notes.
-56-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
PROFIT AND LOSS ACCOUNT
FOR THE 9 MONTHS ENDED MARCH 31, 1996 AND MARCH 31, 1995
<TABLE>
Consolidated
<CAPTION>
Notes 31/03/1996 31/03/1995
$ $
<S> <C> <C> <C>
Sales Revenue 25,145,705 23,443,091
Other Revenue 1,775,779 598,600
------------- -------------
Total Operating Revenue $ 26,921,484 $ 24,041,691
============= =============
Operating profit before abnormal items
and income tax 2 8,566,261 9,542,991
Abnormal items before income tax 3 (922,999)
------------- -------------
Operating profit before income tax 7,643,262 9,542,991
Income tax attributable to operating
profit 3,316,998 3,519,145
------------- -------------
Operating profit after income tax 4,326,264 6,023,846
Outside equity interests in operating
profit after income tax (68,216) (273,218)
------------- -------------
Operating profit after income tax
attributable to members of the
Chief Entity 4,394,480 6,297,064
Retained profits at the beginning
of the reporting period 11,751,861 7,897,487
------------- -------------
Total available for appropriation 16,146,341 14,194,551
Dividends provided for or paid 298,401 2,211,206
------------- -------------
Retained profits at the end of the
reporting period $ 15,847,940 $ 11,983,345
============= =============
</TABLE>
The above profit and loss account should be read in conjunction with the
accompanying notes.
-57-
<PAGE>
GASGOYNE GOLD MINES N.L. AND CONTROLLED ENTITY
STATEMENT OF CASH FLOWS
FOR THE 9 MONTHS ENDED MARCH 31, 1996 AND MARCH 31, 1995
<TABLE>
Consolidated
<CAPTION>
31/03/1996 31/03/1995
$ $
<S> <C> <C>
CASHFLOWS FROM OPERATING ACTIVITIES
Receipts from customers 25,146,677
Payments to suppliers and employees (14,737,869)
Dividends received 1,780
Interest received 822,442
Interest and other costs of finance paid (388,047)
Income tax paid (4,987,332)
------------ ------------
Net cash provided by operating activities 5,857,651 9,918,064
------------ ------------
CASHFLOWS FROM INVESTING ACTIVITIES
Payment for mineral exploration and development (3,411,450)
Payments for investments (823,062)
Proceeds from sale of investments 388,359
Payment for property, plant and equipment (4,541,766)
Proceeds from sale of equipment 151,493
Loans to other entities (6,151,928)
------------ ------------
Net cash used in investing activities (14,388,354) (8,692,862)
------------ ------------
CASHFLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 1,583,258
Borrowings 8,300,000
Repayment of borrowings (16,354)
Dividends paid (1,355,792)
------------ ------------
Net cash used in financing activities 8,511,112 (1,121,546)
------------ ------------
Net increase (decrease) in cash held (19,591) 103,656
Cash at beginning of the reporting period 11,729,852 12,159,398
Cash at the end of the reporting period 11,710,261 12,263,054
============ ============
</TABLE>
The above statement of cash flows should be read in conjunction with the
accompanying notes.
-58-
<PAGE>
Unaudited Pro Forma Consolidated Financial Statements
The historical balance sheet and income statement information, included
in the Coeur pro forma financial information that follows, has been adjusted
"as if" the transaction, that occurred after the date of this historical
information, had occurred at the date of the historical information. This pro
forma information is intended to help readers understand the impact of the
transaction by showing how the transaction might have affected the historical
financial statements. The following Pro Forma Consolidated Balance Sheet as of
March 31, 1996, and Pro Forma Consolidated Statements of Operations of Coeur
for the three months ended March 31, 1996, and for the year ended December 31,
1995, give effect to the acquisition of the outstanding shares of Gasgoyne
acquired by Coeur. The pro forma information is based on the historical
financial statements of Coeur giving effect to the acquisition of shares of
Gasgoyne and the assumptions and adjustments in the accompanying notes to the
Pro Forma Financial Statements.
Gasgoyne's net income for the twelve month period ended December 31,
1995, decreased by US$1.6 million (A$2.2 million) or 25%, as compared to the
twelve month period ended June 30, 1995. The decrease is primarily due to a
decrease in gold production at the Yilgarn mine, which reflects the mines
transition from an open pit to an underground mining operation. Coeur believes
that the reduced level of net income in 1995 is not indicative of the results
to be achieved during the remainder of 1996 because the mine successfully
completed the transition to an underground mine during the first quarter of
1996.
The Pro Forma Consolidated Financial Statements have been prepared by the
Company's management based on the historical financial statements of the
Company. These Pro Forma Financial Statements may not be indicative of the
results that actually would have occurred if the acquisition of shares had
been in effect on the dates indicated or which may be obtained in the future.
The Pro Forma Financial Statements should be read in conjunction with the
historical financial statements and notes herein of Coeur an Gasgoyne for the
periods covered.
-59-
<PAGE>
UNAUDITED
COEUR D'ALENE MINES CORPORATION PRO FORMA BALANCE SHEET
<TABLE>
<CAPTION>
March 31, 1996
----------------------------------------------------
ASSETS (In thousands) Historical Pro Forma Pro Forma
Balance Note Adjustments Balances
------------- ------ --------------- -----------
<S> <C> <C> <C> <C>
CURRENT ASSETS (D) $ 18,968
Cash and cash equivalents $ 83,918 (B) ($ 18,968) $ 83,918
Funds held in escrow 2,271 2,271
Short term investments 98,122 98,122
Receivables 21,459 21,459
Inventories 29,432 29,432
--------- --------- ---------
Total Current Assets 235,202 0 235,202
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment(net) 83,803 83,803
MINING PROPERTIES
Operational mining properties(net) 119,436 119,436
Developmental properties 110,908 110,908
--------- --------- ---------
230,344 230,344
OTHER ASSETS
Notes receivable 5,000 5,000
Debt issuance costs, net of
accumulated amortization 4,548 4,548
Marketable securities 18,137 18,137
Investment in unconsolidated
affiliate (B) 46,869
(B),(C) 413 47,282
Other 1,487 1,487
--------- -------- ---------
Total 29,172 47,282 76,454
--------- -------- ---------
$578,521 $ 47,282 $625,803
========= ========= =========
</TABLE>
See notes to unaudited Pro Forma Consolidated Financial Statements.
-60-
<PAGE>
UNAUDITED
COEUR D'ALENE MINES CORPORATION PRO FORMA BALANCE SHEET
<TABLE>
<CAPTION>
March 31, 1996
----------------------------------------------------
LIABILITIES AND SHAREHOLDERS Historical Pro Forma Pro Forma
EQUITY (In thousands) Balance Note Adjustments Balances
<S> <C> <C> <C> <C>
------------- ------ --------------- -----------
CURRENT LIABILITIES
Accounts payable - trade $ 3,434 $ 3,434
Accrued liabilities 7,207 7,207
Accrued interest 3,624 (D) 349 3,973
Accrued salaries & wages 3,959 3,959
Cash dividends payable 3,071 3,071
Current portion of obligations under
capital leases 1,659 1,659
--------- --------- ---------
Total Current Liabilities $ 22,954 349 $ 23,303
OTHER LIABILITIES
Subordinated Convertible bonds
payable - 6% 50,000 50,000
Subordinated Convertible bonds
payable - 6.375% 100,000 100,000
Limited recourse project financing 24,000 24,000
Bank loan payable (D) 18,997 18,997
Deferred taxes 1,399 (E) (270) 1,129
Other LT Liability 9,695 9,695
--------- --------- ---------
Total Long Term Liabilities $185,094 18,727 $203,821
SHAREHOLDERS' EQUITY
Common stock par value $1.00 per
share - authorized 60,000,000 shares,
issued 21,524,093 including 1,059,211
shares held in treasury) 21,524 (B) 1,420 22,944
Preferred stock, par value $1.00 per
share - authorized 10,000,000
shares, issued 6,588,235 6,588 6,588
Capital Surplus 372,090 (B) 26,452 398,542
Accumulated deficit (15,756) 334 (15,422)
Repurchased and nonvested shares (13,244) (13,244)
Unrealized gains(losses) on
securities (729) (729)
--------- --------- ---------
Total Stockholders Equity 370,473 28,206 398,679
--------- --------- ---------
Total Liabilities & Equity $578,521 $ 47,282 $625,803
========= ========= =========
</TABLE>
See notes to unaudited Pro Forma Consolidated Financial Statements.
-61-
<PAGE>
UNAUDITED
COEUR D'ALENE MINES CORPORATION STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the three month period ended March 31, 1996
----------------------------------------------------
ASSETS (In thousands) Historical Pro Forma Pro Forma
Balance Note Adjustments Balances
------------- ------ --------------- -----------
<S> <C> <C> <C> <C>
INCOME
From mine operations:
Sale of concentrates
and dore' $ 22,609 $ 22,609
Less cost of operations 19,596 19,596
--------- --------- ---------
Gross Profits 3,013 3,013
OTHER INCOME
Interest and other 1,931 1,931
Income from unconsolidated
affiliate (B) 413 413
--------- --------- ---------
Sub-Total 1,931 413 2,344
--------- --------- ---------
Total Income 4,944 413 5,357
EXPENSES
Administration 1,088 1,088
Accounting and legal 274 274
General corporate 1,650 1,650
Interest 684 (D) 349 1,033
Mining exploration 1,039 1,039
Idle facilities
--------- --------- ---------
Total Expenses 4,735 349 5,084
--------- --------- ---------
Net Income from continuing
operations before income taxes 209 64 273
Provision benefit for income
taxes (76) (E) 270 194
--------- --------- ---------
Net Income $ 133 $ 334 $ 467
========= ========= =========
Earnings per Share Data:
Weighted average number of
shares of Common Stock
and equivalents used in
calculation 20,502 21,922
========= =========
Income from continuing
operations $ .01 $ .02
Income from discontinued
operations
--------- ---------
Net Income $ .01 $ .02
========= =========
</TABLE>
See notes to unaudited Pro Forma Consolidated Financial Statements
-62-
<PAGE>
UNAUDITED
COEUR D'ALENE MINES CORPORATION STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the year ended December 31, 1995
----------------------------------------------------
ASSETS (In thousands) Historical Pro Forma Pro Forma
Balance Note Adjustments Balances
------------- ------ --------------- -----------
<S> <C> <C> <C> <C>
INCOME
From mine operations:
Sale of concentrates
and dore' $ 89,239 $ 89,239
Less cost of operations 72,210 72,210
--------- --------- ---------
Gross Profits 17,029 17,029
OTHER INCOME
Interest and other 9,504 9,504
Income from unconsolidated
affiliate (B) 564 564
--------- --------- ---------
Sub-Total 9,504 564 10,068
--------- --------- ---------
Total Income 26,533 564 27,097
EXPENSES
Administration 3,677 3,677
Accounting and legal 1,626 1,626
General corporate 6,207 6,207
Interest 9,746 (D) 1,395 11,141
Mining exploration 4,854 4,854
Idle facilities 1,481 1,481
--------- --------- ---------
Total Expenses 27,591 1,395 28,986
--------- --------- ---------
Net Income(Loss) from continuing
operations before income taxes (1,058) (831) (1,889)
(Provision) benefit for income
taxes (200) (E) 468 (268)
--------- --------- ---------
Net Income (Loss) from continuing
operations (1,258) (363) (1,621)
Income from discontinued
operations, net of
applicable taxes 2,412 2,412
--------- --------- ---------
Net Income(loss) $ 1,154 $ (363) $ (791)
========= ========= =========
Earnings per Share Data:
Weighted average number of
shares of Common Stock
and equivalents used in
calculation 15,888 16,998
========= =========
Income(loss)from continuing
operations $ (.08) $ (.09)
Income from discontinued
operations .15 .14
--------- ---------
Net Income(loss) $ .07 $ .05
========= =========
</TABLE>
See notes to unaudited Pro Forma Consolidated Financial Statements
-63-
<PAGE>
Notes to the Unaudited Pro Forma Consolidated Financial Statements
Note A:
The historical balance sheet and income statement information, included in the
pro forma financial information preceding these notes, have been adjusted "as
if" the transaction, that occurred after the date of this historical
information, had occurred at the beginning of the period presented. This pro
forma information is intended to help readers understand the impact of the
transaction by showing how it might have affected the historical financial
statements. The Pro Forma Consolidated Balance Sheet as of March 31, 1996,
includes the effects of events that are directly attributable to the
acquisition of Gasgoyne. The Pro Forma Consolidated Statements of Operations
assume the acquisition had occurred as of the beginning of the period covered
and include the effects of events that are directly attributable to the
acquisition.
The effective date of closing of the Gasgoyne transaction was April 17, 1996.
Coeur's offer to acquire outstanding shares of Gasgoyne from the holders
thereof, on a basis of seven shares of Coeur common stock plus A$96 in
exchange for each 100 Gasgoyne shares, expired on April 17, 1996.
Note B:
The Company's investment in Gasgoyne is accounted for by the Equity Method. An
analysis of this investment as of the beginning of the periods presented, is
as follows:
<TABLE>
<CAPTION>
3/31/96 12/31/95
--------- ----------
<S> <C> <C>
Investment in Gasgoyne prior to April 17, 1996,
acquisition transaction $ 14,397 $ 14,397
Acquisition transaction:
Cash Paid 15,699,782 15,699,782
Fair market value of Coeur common stock issued 27,886,297 27,886,297
Acquisition Costs 3,268,494 3,268,494
------------ ------------
Investment in Gasgoyne 46,868,970 46,868,970
Equity in Earnings of Gasgoyne for periods
presented 812,428 1,891,608
Less amortization of the excess of cost of
the acquisition over the underlying equity
in the net assets of Gasgoyne 399,127 1,328,265
------------ ------------
Net carrying value of investment $47,282,271 $47,432,313
============ ============
</TABLE>
Average exchange rates used for the three months ended March 31, 1996 is
US$.76 and US$.74 for the twelve months ended December 31, 1995.
Coeur has excluded its share of non-recurring expenses of $125,136 and
$119,946, respectively, attributed to Gasgoyne's net income related to the
costs incurred in connection with the acquisition.
Note C:
The excess cost of the investment over the underlying equity in the net assets
of Gasgoyne has been paid based on the potential value of Gasgoyne's mining
properties. Coeur is currently amortizing the excess cost by the
unit-of-production method. Approximately $399,000 and $1,328,000 was amortized
for the periods ended March 31, 1996, and December 31, 1995, respectively.
-64-
<PAGE>
Note D:
The cash portion of the acquisition costs was financed by a loan facility
provided by Rothschild Australia Limited and provides for a maximum of $50
million of borrowings at an annual interest rate equal to LIBOR plus 1.5%. The
loan is collateralized by Coeur's shareholding in Gasgoyne. The agreement also
contains certain financial covenants pertaining to Coeur. The pro forma's
reflect the adjustment for the interest that would have been incurred on this
debt for the respective periods presented.
Note E:
Income tax effects on the pro forma income are calculated based on Coeur's tax
rate of 36% applicable to Federal and State income taxes adjusted for Coeur's
ability to utilize net operating loss carryforwards in 1995. The tax provision
is further determined on the basis that Coeur's equity in earnings of Gasgoyne
is permanently invested in Australia.
-65-
