TIDMBGL

RNS Number : 2263Q

Bullabulling Gold Limited

28 August 2014

Bullabulling Gold Limited (the "Company")

28 August 2014

The following announcement has been released by the Company in Australia. A version of this announcement, containing the Auditor's Independence Declaration and Independent Auditor's Review Report is available on the website: http://www.bullabullinggold.com/

Further enquiries:

 
 David McArthur                   Westhouse Securities Limited 
  Bullabulling Gold Limited        (UK Broker & Nominated Adviser) 
  Level 2, 55 Carrington Street    Martin Davison / David Coaten 
  Nedlands, WA, 6009, Australia    Tel: +44 20 7601 6100 
  Tel: +61 8 9386 4086 
-------------------------------  ----------------------------------------------- 
 Neil Boom                        John Gardner / Rupert Dearden 
  Gresham PR Ltd (UK media)        MAGNUS Investor Relations. Corporate 
  Tel: +44 7866 805 108            Communication. (Australian Media) 
                                   Tel: +61 8 6160 4900 
                                   jgardner@magnus.net.au rdearden@magnus.net.au 
-------------------------------  ----------------------------------------------- 
 

BULLABULLING GOLD LIMITED

ABN 50 153 234 532

INTERIM FINANCIAL REPORT

30 JUNE 2014

CONTENTS

Page

Company Directory

Directors' Report

Auditor's Independence Declaration

Consolidated Statement of Financial Position

Consolidated Statement of Profit or Loss and other Comprehensive Income

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Interim Financial Statements

Directors' Declaration

Independent Review Report

COMPANY DIRECTORY

DIRECTORS AND COMPANY SECRETARY:

 
 Dianmin Chen              Noel White 
  Non-executive Chairman    Non-executive Director 
 Peter Mansell             David McArthur 
  Non-executive Director    Company Secretary and Chief Financial 
                            Officer 
 
   REGISTERED AND PRINCIPAL OFFICE:                      AUDITORS: 
 
  Level 2, 55 Carrington        PO Box 985    BDO Audit (WA) Pty 
    Street                        NEDLANDS      Ltd 
    NEDLANDS                      WA 6909       38 Station Street 
    WA 6009                                     SUBIACO WA 6008 
                  +61 8 9386 
                   4086 
   Telephone:      +61 8 9389 
    Facsimile:     8327 
 

SHARE REGISTRY: DOMICILE AND COUNTRY OF INCORPORATION:

 
 Computershare Investor Services          Australia 
  Pty Ltd 
  Level 2, Reserve Bank Building 
  45 St George's Terrace 
  PERTH WA 6000 
 Telephone:     +61 8 9323 2000 
  Facsimile:     +61 8 9323 2033 
 
 
   SECURITIES EXCHANGE:                                            WEBSITE AND EMAIL: 
 
 Bullabulling Gold Limited shares      www.bullabullinggold.com 
  are listed on                         info@bullabullinggold.com 
  the Australian Securities Exchange 
  (ASX) under 
  the ticker symbol BAB; and on the 
  London 
  AIM market under the ticker symbol 
  BGL. 
 

DIRECTORS' REPORT

The directors present their report together with the financial report for the six months ended 30 June 2014 and the audit review thereon.

DIRECTORS

The directors of the Company at any time during or since the end of the interim period were:

 
 Name            Period of Directorship 
--------------  -------------------------------- 
 Executive 
 Brett Lambert   Director from 1 May 2012 to 15 
                  July 2014 
 
 Non-executive 
 Peter Mansell   Director since 10 April 2012 
 Dianmin Chen    Director since 4 August 2014 
 Noel White      Director since 4 August 2014 
 Ronnie Beevor   Director from 2 July 2012 to 4 
                  August 2014 
 Brett Lambert   Director from 16 July 2014 to 4 
                  August 2014 
 
 

PRINCIPAL ACTIVITIES

The principal activity of the Group during the interim period was gold exploration and project development.

RESULTS

The net loss of the Group for the interim period after income tax expense was $3,359,573 (2013 loss: $21,311). Subsequent to half year end, the Group received $481,045 (2013: $4,538,603) in Research and Development tax incentive refunds which are included in the Group results.

DIVIDENDS

No dividend was paid during the interim period and the Directors do not recommend payment of a dividend.

REVIEW OF OPERATIONS

Bullabulling Gold Limited ("Bullabulling" or "Company") is a mining exploration and development company, headquartered in Perth, Western Australia and is dual-listed on the Australian Securities Exchange (ASX) and London AIM markets.

Bullabulling is the 100% owner of a large, previously producing gold mine called the Bullabulling Gold Project. The project is located in the goldfields of Western Australia and is within easy commuting distance of the main gold mining centre of Kalgoorlie, which is less than 80kms away on the main Perth-Kalgoorlie highway.

REVIEW OF OPERATIONS (continued)

Definitive Feasibility Study

In the six months ended 30 June 2014 the Company continued to progress the Definitive Feasibility Study (DFS) over the Bullabulling Gold project.

The DFS engineering continued to progress in line with expectations.

Metallurgical test work identified the potential to reduce reagent consumption and increase gold recovery through nano-filtration of process water. The performance of nano- filtration was subsequently confirmed. Potential energy cost savings and further gold recovery improvements were tested through the application of flotation.

1303 metres of diamond drilling was completed, with multi element analysis undertaken. The core was used for metallurgical and geotechnical test work, with results confirming favorable rock properties. Geotechnical evaluation of the proposed tailings storage facility site was commenced.

Flora and fauna field studies confirm the site to be free of any significant populations that would be impacted by the proposed project development.

Exploration

A preliminary mining study was completed for the Gibraltar project. An open pit design at Gibraltar captures 1.94 million tonnes of resource grading 1.15 g/t gold containing 71,700 of in situ gold (ASX release 7 March 2014). Gibraltar does not form part of the current mine plan.

Corporate

On 17 April 2014, the Company received an unsolicited takeover offer from Norton Gold Fields Limited (Norton) at 7 cents per share. The Directors advised that the offer was not adequate and did not reflect the value of Bullabulling or the Bullabulling gold project.

On 14 May 2014, the Company issued a Target's Statement with the recommendation shareholders do not accept the offer as it was neither fair nor reasonable.

Subsequent Events

On 1 July 2014, Norton increased its offer to 8 cents cash per share. The directors recommended shareholders accept the offer after Norton secured 40% of the Company's shares, delivering effective control.

On 14 July 2014, Norton reached a position of control of Bullabulling with an interest of 50.95%.

On 4 August 2014, Norton advanced $2,000,000 to the Company by way of a draw down facility to enable the Company to continue the DFS study and meet day to day expenses.

At the date of this report Norton had acquired 86.24% of the shares and gained a controlling interest in the Company.

Board Change

On 15 July 2014, the Company announced proposed changes to the composition of the board following the acquisition of a controlling interest in the Company by Norton. It was agreed that Norton Managing Director Dr Dianmin Chen and Dr Noel White (a non-executive Director of Norton) would join the board as non-executive directors subject to the completion of regulatory requirements. These requirements were satisfied on 4 August 2014.

As the role and responsibilities of Managing Director Brett Lambert were significantly diminished on 15 July 2014, the board resolved to abolish the position of Managing Director and terminated Mr Lambert's executive contract with termination benefits paid to Mr Lambert pursuant to his agreement.

Mr Lambert resigned as executive director on 15 July 2014.

On 4 August 2014 Dr Dianmin Chen and Dr Noel White joined the Board, and Brett Lambert and Ronnie Beevor resigned as directors. Dr Chen was appointed chairman, with Peter Mansell remaining as a non-executive director.

REVIEW OF OPERATIONS (continued)

Competent Person Statement

The information in this report that relates to the Exploration Results, Mineral Resources or Ore Reserves is based upon information compiled by Mr Trevor Pilcher, who is a full time employee of the Company and is a member of The Australasian Institute of Mining and Metallurgy. Mr Pilcher has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and the activity in which he is undertaking to qualify as a Competent Person under 2012 Edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (JORC Code). All information on mineral resources and ore reserves is based on, and fairly represents, information and supporting documentation prepared by Mr Pilcher. Mr Pilcher consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

DIRECTORS' AND SENIOR EXECUTIVES REMUNERATION

   (a)   Non-executive Directors 

As approved by shareholders at the Annual General Meeting on 27 May 2014, consideration for accrued deferred fees payable to Peter Mansell and Ronnie Beevor, for the 9 month period 1 July 2013 to 31 March 2014, was satisfied in full on 12 June 2014 by the issue of 1,333,094 shares at 7.1 cents each, for a value at the date of issue, of $94,649.

   (b)   Senior executives 

On 14 February 2014, the Company issued 1,786,808 fully paid ordinary shares at 4.7 cents each in part satisfaction of bonuses paid to senior executives. The issue price was based on the 5 day VWAP at the date the bonus was declared.

   (c)   Equity instruments 

All options refer to options over ordinary shares of Bullabulling Gold Limited, which are exercisable on a one-for-one basis.

Options and rights over equity instruments granted as compensation - audited

Details on options over ordinary shares in the Company that were granted as compensation to each key management person during the previous reporting period is as follows:

 
 Tranche   Vesting conditions 
--------  ----------------------------------------------------------- 
 
    1      The 10 day VWAP share price equals or exceeds the exercise 
            price during the 12 month period commencing 1 May 2013 
    2      The 10 day VWAP share price equals or exceeds the exercise 
            price during the 12 month period commencing 1 May 2014 
    3      The 10 day VWAP share price equals or exceeds the exercise 
            price during the 12 month period commencing 1 May 2015 
    4      Exercisable at 10.7 cents per share on or before 29 May 
            2018. The options vest after 12 months and expire after 
            24 months 
    5      Exercisable at a price equal to 130% of the 5 day VWAP 
            immediately prior to the contract commencement date of 
            26 November 2012. The options vest after 14 months and 
            expire after 48 months 
    6      Exercisable at a price equal to 160% of the 5 day VWAP 
            immediately prior to the contract commencement date of 
            26 November 2012. The options vest after 24 months and 
            expire after 36 months 
    7      Exercisable at a price equal to 190% of the 5 day VWAP 
            immediately prior to the contract commencement date of 
            26 November 2012. The options vest after 36 months and 
            expire after 48 months 
 
 

DIRECTORS' REMUNERATION (continued)

   (d)   Equity instruments (continued) 

Options and rights over equity instruments granted as compensation - audited (continued)

 
                          Number        Grant      Fair value                               Financial    Exercise                  Number 
                             of          Date       per option    % vested    % forfeited     years        price                     of 
                          options                    at grant     in year       in year      in which    per option                options 
                          granted                      date                                   grant                                vested 
               Tranche                                                            (B)         vests                      Expiry    during 
                                                      cents         (A)                        (C)         cents          date      2014 
-----------  ---------  ----------  ------------  ------------  ----------  -------------  ----------  ------------  -----------  -------- 
 Executive directors 
 Brett 
  Lambert            1   1,000,000     13-Jun-12          8.81       -           100%       01-Jan-13          28.4     1-May-14      - 
                     2   1,000,000     13-Jun-12         10.66       -            -         01-Jan-14          31.6     1-May-15      - 
                     3   1,000,000     13-Jun-12         11.89       -            -         01-Jan-15          36.8     1-May-16      - 
                     4   2,000,000     29-May-14          5.61       -            -         01-Jan-15          10.7    29-May-18      - 
 Other key management personnel 
 Mark 
  Braghieri          5     500,000     29-Nov-12          4.31       -            -         01-Jan-13          10.2    26-Nov-14      - 
                     6     500,000     29-Nov-12          4.82     100%           -         01-Jan-14          12.6    26-Nov-15   500,000 
                     7     500,000     29-Nov-12          5.28       -            -         01-Jan-15          14.9    26-Nov-16      - 
 
 

(A) The amount vested in the year represents the number of options that become unconditional due to the recipient satisfying specified vesting condition;

(B) The percentage forfeited in the year represents the reduction from the maximum number of options available to vest due to performance criteria not being achieved;

   (C)     The vesting period is from 31 May to 31 May thus spanning two financial years. 

1,000,000 options issued to key management personnel lapsed during the reporting period

No options were granted or exercised during the reporting period to key management personnel.

Options granted carry no dividend or voting rights.

   11.     DIRECTORS' INTERESTS 

The relevant interest of each director in the shares and options issued by the Group, as notified by the directors to the ASX in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:

 
 
                       Ordinary           Options over 
   Director             Shares           ordinary shares 
--------------  -------------------  -------------------- 
 Dianmin Chen                     -                     - 
 Noel White                       -                     - 
 Peter Mansell                    -                     - 
--------------  -------------------  -------------------- 
 

SIGNIFICANT CHANGES TO THE STATE OF AFFAIRS

On 17 April 2014, Norton Gold Fields Limited (Norton) announced an off-market takeover bid for all the fully paid ordinary shares in the Company. At the date of this report Norton had acquired 86.24% of the shares and gained a controlling interest in the Company.

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Bullabulling Gold Limited support and have adhered to the principles of good corporate governance. The Group's corporate governance statement is contained within the 31 December 2013 Annual Report and on the Company's web site.

EVENTS SUBSEQUENT TO REPORTING DATE

Other than the matters disclosed in note 13 of the notes to the interim financial statements, there have been no matters or circumstances that have arisen since the end of the financial year that have significantly affected, or may significantly affect, the operations of the Company, the results of these operations, or the state of affairs of the Company in future financial years.

LEAD AUDITOR'S INDEPENDENCE DECLARATION

The lead auditor's independence declaration as required under Section 307C of the Corporations Act 2001 is set out on the next page and forms part of the Directors' report for the six months ended 30 June 2014.

Dated at Perth, Western Australia this 28(th) day of August 2014.

Signed in accordance with a resolution of the Directors.

Peter Mansell

Director

AUDITOR'S INDEPENDENCE DECLARATION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

 
                                                              30 June        31 December 
                                                               2014           2013 
                                           Note                $              $ 
---------------------------------------  ------  --------------------  ------------------- 
 Assets 
 Cash and cash equivalents                                 2,055,350           4,256,808 
 Other receivables                        6                   560,198               38,637 
 Prepayments                                                  100,466               66,570 
 Total current assets                                      2,716,014           4,362,015 
                                                 --------------------  ------------------- 
 
 Investments                                                  427,778             427,778 
 Property, plant and equipment                                693,460             757,388 
 Other receivables                        6                   185,000             185,000 
 Total non-current assets                                  1,306,238           1,370,166 
                                                 --------------------  ------------------- 
 Total assets                                              4,022,252           5,732,181 
                                                 --------------------  ------------------- 
 
 Liabilities 
 Trade and other payables                                  1,459,872              155,853 
 Employee benefits                                            289,197             412,616 
                                                 --------------------  ------------------- 
 Total current liabilities                                 1,749,069              568,469 
                                                 --------------------  ------------------- 
 
 Provision for site rehabilitation                         1,353,193           1,353,193 
                                                 --------------------  ------------------- 
 Total non-current liabilities                             1,353,193           1,353,193 
                                                 --------------------  ------------------- 
 Total liabilities                                         3,102,262           1,921,662 
                                                 --------------------  ------------------- 
 Net assets                                                   919,990          3,810,519 
                                                 ====================  =================== 
 
 Equity 
 Share capital                            7              69,001,206           68,555,550 
 Reserves                                 7                   349,382             414,061 
 Accumulated losses                                    (68,430,598)         (65,159,092) 
                                                 --------------------  ------------------- 
 Total equity attributable to equity holders 
  of the Company                                              919,990            3,810,519 
                                                 ====================  =================== 
 
 

The notes on pages 14 to 23 are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2014

 
                                                                       30 June                30 June 
                                                                        2014                   2013 
                                                       Note             $                      $ 
---------------------------------------------------  ------  ---------------------  --------------------- 
 
 Revenue from continuing operations                                     73,522                 66,324 
 Other income                                         10              489,182              4,540,160 
 
 Expenses 
 Administrative expenses                              11          (1,225,399)            (1,129,007) 
 Other expenses                                       11          (1,215,991)            (1,255,105) 
 Feasibility study and exploration expenditure                    (1,480,887)            (2,242,322) 
                                                             ---------------------  --------------------- 
 Results from operating activities                                (3,359,573)                (19,950) 
                                                             ---------------------  --------------------- 
 
 Loss before income tax                                           (3,359,573)                (19,950) 
 
 Income tax expense                                                              -             (1,361) 
                                                             ---------------------  --------------------- 
 Loss after income tax for the period                             (3,359,573)                (21,311) 
                                                             ---------------------  --------------------- 
 
 Other comprehensive expense 
 Items that will not be reclassified to profit                                   -                      - 
  or loss 
                                                             ---------------------  --------------------- 
 Total items that will not be reclassified                                       -                      - 
  to profit or loss 
                                                             ---------------------  --------------------- 
 
 Items that may be reclassified subsequently 
  to profit or loss 
 Changes in fair value on equity instruments                                     -                      - 
  measured at 
  fair value through other comprehensive income 
 Foreign currency translation difference                                         -                      - 
  of foreign operations 
                                                             ---------------------  --------------------- 
 Total items that may be reclassified subsequently                               -                      - 
  to profit or loss 
                                                             ---------------------  --------------------- 
 
 Other comprehensive loss for the period,                                        -                      - 
  net of income tax 
                                                             ---------------------  --------------------- 
 
 Total comprehensive loss for the period                          (3,359,573)                (21,311) 
                                                             =====================  ===================== 
 
 Loss attributable to owners of the Company                       (3,359,573)                (21,311) 
                                                             =====================  ===================== 
 
 Total comprehensive loss attributable to 
  owners 
  of the Company                                                  (3,359,573)                (21,311) 
                                                             =====================  ===================== 
 
 Loss per share 
 Basic and diluted (cents per share)                                      (0.98)               (0.01) 
                                                             =====================  ===================== 
 
 

The notes on pages 14 to 23 are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2014

 
                                                Attributable to equity holders of the Company 
                                    Share                Equity-based                        Accumulated 
                                  capital               benefits reserve                          losses         Total 
                                                       Options               Shares 
                                        $                    $                    $                    $             $ 
--------------------  -------------------  -------------------  -------------------  -------------------  ------------ 
  Balance at 1 
   January 2014                68,555,550              356,018               58,043         (65,159,092)     3,810,519 
  Total 
  comprehensive loss 
  for the half year 
  Loss for the half 
   year                                 -                    -                    -          (3,359,573)   (3,359,573) 
 
  Other 
  comprehensive 
  income for the 
  half year 
  Total other                           -                    -                    -                    -             - 
  comprehensive 
  income 
                      -------------------  -------------------  -------------------  -------------------  ------------ 
  Total 
   comprehensive 
   expense for the 
   period                               -                    -                    -          (3,359,573)   (3,359,573) 
                      -------------------  -------------------  -------------------  -------------------  ------------ 
 
  Transactions with 
  owners, recorded 
  directly 
  in equity 
 
  Contributions by 
  and distributions 
  to owners 
  Issue of 1,786,808 
   shares @ 4.7 
   cents in 
   lieu of 50% of 
   senior 
   executives' 
   bonuses                         83,979                    -             (17,325)                    -        66,654 
  Issue of 2,261,938 
   shares @ 6.5 
   cents pursuant 
   to drilling 
   services                       147,027                    -                    -                    -       147,027 
  Placement of 
   2,859,756 shares 
   @ 4.1 cents 
   to the Managing 
   Director                       117,250                    -                    -                    -       117,250 
  Issue of 1,333,094 
   shares @ 7.1 
   cents in 
   lieu of 50% of 
   directors' fees                 94,649                    -             (40,718)                    -        53,931 
 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)

FOR THE SIX MONTHS ENDED 30 JUNE 2014

 
                                                           Attributable to equity holders of the Company 
                                                    Share             Equity-based               Accumulated 
                                                  capital            benefits reserve                 losses     Total 
                                                                 Options               Shares 
                                                        $              $                    $              $         $ 
------------------------------------------  -------------  -------------  -------------------  -------------  -------- 
   Transactions with owners, recorded 
   directly in 
   equity (continued) 
 
  Contributions by and distributions to 
  owners 
  (continued) 
  Transfer of expired options                           -       (88,067)                    -         88,067         - 
  Share-based payment transactions                      -         58,627               22,804              -    81,431 
  Capital raising costs - (includes $6,943 
   GST receivable)                                  2,751              -                    -              -     2,751 
  Total contributions by and distributions 
   to owners                                      445,656       (29,440)             (35,239)         88,067   469,044 
                                            -------------  -------------  -------------------  -------------  -------- 
  Total changes in ownership interests in               -              -                    -              -         - 
  subsidiaries 
                                            -------------  -------------  -------------------  -------------  -------- 
  Total transactions with owners                  445,656       (29,440)             (35,239)         88,067   469,044 
                                            -------------  -------------  -------------------  -------------  -------- 
  Balance at 30 June 2014                      69,001,206        326,578               22,804   (68,430,598)   919,990 
                                            =============  =============  ===================  =============  ======== 
 
 

The notes on pages 14 to 23 are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)

FOR THE SIX MONTHS ENDED 30 JUNE 2013

 
                                                                                Attributable to equity holders of the Company 
                                                                Share                 Equity-based                         Accumulated 
                                                              capital                benefits reserve                           losses               Total 
                                                                                   Options                 Shares 
                                                                    $                    $                      $                    $                   $ 
----------------------------------------  ------  -------------------  -------------------  ---------------------  -------------------  ------------------ 
  Balance at 1 January 2013                                66,704,237            1,074,760                      -         (63,438,127)           4,340,870 
  Total comprehensive loss for the half 
  year 
   Loss for the period                                              -                    -                      -             (21,311)            (21,311) 
 
  Other comprehensive income for the 
  half year 
  Total other comprehensive income                                  -                    -                      -                    -                   - 
                                                  -------------------  -------------------  ---------------------  -------------------  ------------------ 
  Total comprehensive expense for the half 
   year                                                             -                    -                      -             (21,311)            (21,311) 
                                                  -------------------  -------------------  ---------------------  -------------------  ------------------ 
 
   Transactions with owners, recorded directly 
   in 
   equity 
 
  Contributions by and distributions to 
  owners 
  Issue of 39,214,906 ordinary shares                       2,000,183                    -                      -                    -           2,000,183 
  Capital raising costs                                     (159,369)                    -                      -                    -           (159,369) 
  Transfer of expired options                                       -            (528,744)                      -              528,744                   - 
  Share-based payment transactions                                  -              102,791                      -                    -             102,791 
                                                  -------------------  -------------------  ---------------------  -------------------  ------------------ 
  Total contributions by and distributions 
   to owners                                                1,840,814            (425,953)                      -              528,744           1,943,605 
                                                  -------------------  -------------------  ---------------------  -------------------  ------------------ 
  Total changes in ownership interests                              -                    -                      -                    -                   - 
  in subsidiaries 
                                                  -------------------  -------------------  ---------------------  -------------------  ------------------ 
  Total transactions with owners                            1,840,814            (425,953)                      -              528,744           1,943,605 
                                                  -------------------  -------------------  ---------------------  -------------------  ------------------ 
  Balance at 30 June 2013                                  68,545,051              648,807                      -         (62,930,694)           6,263,164 
                                                  ===================  ===================  =====================  ===================  ================== 
 
 
 

The notes on pages 14 to 23 are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2014

 
                                                                 30 June                      30 June 
                                                                  2014                           2013 
                                                                  $                                 $ 
--------------------------------------------  ----  ------------------------  ----------------------- 
 
 Cash flows from operating activities 
 Cash paid to suppliers and employees                       (1,206,127)                   (2,751,600) 
 Payments for exploration, evaluation 
  and development                                           (1,149,797)                   (2,312,257) 
 Interest received                                                 42,051                      60,837 
 Income tax paid                                                           -                  (1,361) 
                                                    ------------------------ 
 Net cash outflow from operating activities                 (2,313,873)                   (5,004,381) 
                                                    ------------------------  ----------------------- 
 
 Cash flows from investing activities 
 Payments for property, plant and equipment                          (500)                  (154,838) 
 Net cash outflow from investing activities                          (500)                  (154,838) 
                                                    ------------------------  ----------------------- 
 
 Cash flows from financing activities 
 Proceeds from issue of shares                                   117,250                    2,000,183 
 Capital raising costs                                            (4,192)                   (159,372) 
                                                    ------------------------  ----------------------- 
 Net cash inflow from financing activities                       113,058                    1,840,811 
                                                    ------------------------  ----------------------- 
 
 Net decrease in cash and cash equivalents                  (2,201,315)                   (3,318,408) 
 Cash and cash equivalents at the beginning 
  of the half-year                                            4,256,808                     4,078,830 
 Effects of exchange rate fluctuations on 
  cash held                                                          (143)                      1,668 
                                                    ------------------------  ----------------------- 
 Cash and cash equivalents at the end of the 
  half-year                                                   2,055,350                       762,090 
                                                    ========================  ======================= 
 
 

The condensed notes on pages 14 to 23 are an integral part of these financial statements.

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2014

   1.       REPORTING ENTITY 

Bullabulling Gold Limited (the "Company") is a company domiciled in Australia. The consolidated interim financial report of the Company as at and for the six months ended 30 June 2014 comprises the Company and its subsidiaries (together referred to as the "Group" and individually as "Group Entities"). The Group is primarily involved in the mineral exploration and development industry in Australia.

The consolidated financial report of the Group as at and for the year ended 31 December 2013 is available upon request from the Company's registered office at Level 2, 55 Carrington Street, Nedlands, Western Australia, 6009 and is available for review on the Company's web site.

   2.       BASIS OF PREPARATION 
   (a)      Statement of compliance 

The consolidated interim financial report is a general purpose financial report which has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001. It does not include all of the information required for a full annual financial report, and should be read in conjunction with the annual consolidated financial report of the Group as at and for the year ended 31 December 2013 and any public announcements made by Bullabulling Gold Limited during the interim reporting period.

Bullabulling Gold Limited is a for-profit entity for the purpose of preparing the financial statements.

The consolidated interim financial report was approved by the Board of Directors on 28 August 2014.

   (b)      Judgements and estimates 

The preparation of interim financial reports requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this consolidated interim financial report, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2013.

   (c)      Going Concern 

The consolidated interim financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the settlement of liabilities in the normal course of business.

Additional funds will need to be sourced for the Company to continue to carry on its business. The ability of the Group to continue funding its development activities is dependent on the Group securing further working capital by additional equity or financing facilities. The timing of raising additional capital will depend on investment markets, current and future planned exploration and development activities.

With effect from 15 July 2014, the Company became a subsidiary of Norton Gold Fields Limited ("Norton"). Norton have given an undertaking to provide financial support for the Company, through a loan facility, should the Company not be able to source funds from the market or alternative financing arrangements. The facility is an unsecured loan up to the value of $2,000,000 with an interest rate of 8% per annum with repayment on the date when the Company raises sufficient moneys to repay the loan in full without prejudicing any creditors or future expenditure commitments or such later date as may be agreed between Norton and the Company.

The financial report does not contain any adjustments to the amounts or classification of recorded assets or liabilities which might be necessary if the Group was not to continue as a going concern.

   2.       BASIS OF PREPARATION 
   (d)      Fair value measurement 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurable date. Fair value for measurement and / or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of AASB 2, leasing transactions that are within the scope of AASB 117, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in AASB 2 or value in use in AASB 136.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

-- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurable date;

-- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

   --      Level 3 inputs are unobservable inputs for the asset or liability. 
   3.       SIGNIFICANT ACCOUNTING POLICIES 

Except as described below, the accounting policies applied by the Group in the consolidated interim financial report are the same as those applied by the Group in its consolidated financial report as at and for the year ended 31 December 2013. The following changes in accounting policy are also expected to be reflected in the Group's consolidated financial statements as at and for the year ending 31 December 2014.

AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements - The change amends AASB 124 Related Party Disclosures to remove the individual key management personnel (KMP) disclosures required by Australian specific paragraphs from the consolidated notes to the financial statements and record in the Directors' Remuneration Report within the Directors' Report. This change will only impact the annual financial report in December 2014.

AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle. The change amends a number of pronouncements as a result of the 2009-2011 annual improvements cycle. These changes do not impact the financial statements.

AASB 9 Financial Instruments - AASB 9 includes requirements for the classification and measurement of financial assets. It was further amended by AASB 2010-7 to reflect amendments to the accounting for financial liabilities. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. Further amendments were made by AASB 2012-6 which amends the mandatory effective date to annual reporting periods beginning on or after 1 January 2015. AASB 2012-6 also modifies the relief from restating prior periods by amending AASB 7 to require additional disclosures on transition to AASB 9 in some circumstances. Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB 2009-11 and superseded by AASB 2010-7 and 2010-10. The AASB issued a revised version of AASB 9 (AASB 2013-9) during December 2013 which incorporated three primary changes, which included that the mandatory effective date will be 1 January 2018. There will be no material impact on the Group on the adoption of this standard.

   4.       FINANCIAL INSTRUMENTS 
   (a)      Carrying amounts and fair values 

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy for financial instruments measured at fair value. It does not include fair value information for financial assets and financial liabilities not measured at fair value of the carrying amount is reasonable approximation of fair value.

 
                                         Carrying Amount                                        Fair Values 
                   Non-current assets             Current assets 
                   Other         Other         Other        Cash and       Total     Level   Level   Level 3    Total 
                receivables   investments   receivables       cash                     1       2 
                                                          equivalentss 
-------------  ------------  ------------  ------------  -------------  ----------  ------  ------  --------  -------- 
 30 June 2014 
 Financial 
 assets 
 measured at 
 fair 
 value 
 Investments              -       427,778             -              -     427,778       -       -   427,778   427,778 
 
 Financial 
 assets 
 not measured 
 at 
 fair value 
 Cash and 
  cash 
  equivalents             -             -             -      2,055,350   2,055,350       -       -         -         - 
 Other 
  receivables       185,000             -       560,198              -     745,198       -       -         -         - 
               ------------  ------------  ------------  -------------  ----------  ------  ------  --------  -------- 
                    185,000       427,778       560,198      2,055,350   3,228,326       -       -   427,778   427,778 
               ============  ============  ============  =============  ==========  ======  ======  ========  ======== 
 
 31 December 
 2013 
 Financial 
 assets 
 measured at 
 fair 
 value 
 Investments              -       427,778             -              -     427,778       -       -   427,778   427,778 
 
 Financial 
 assets 
 not measured 
 at 
 fair value 
 Cash and 
  cash 
  equivalents             -             -             -      4,256,808   4,256,808       -       -         -         - 
 Other 
  receivables       185,000             -        38,637              -     223,637       -       -         -         - 
               ------------  ------------  ------------  -------------  ----------  ------  ------  --------  -------- 
                    185,000       427,778        38,637      4,256,808   4,908,223       -       -   427,778   427,778 
               ============  ============  ============  =============  ==========  ======  ======  ========  ======== 
 
 
   4.       FINANCIAL INSTRUMENTS (continued) 
   (a)      Carrying amounts and fair values (continued) 
 
                                         Carrying Amount                               Fair Values 
                            Non-current          Current 
                             liabilities       liabilities 
                             Trade and          Trade and        Total     Level 1   Level 2   Level 3   Total 
                           other payables     other payables 
-----------------------  -----------------  ----------------  ----------  --------  --------  --------  ------ 
 30 June 2014 
 Financial liabilities 
  not measured at 
  fair value 
 Trade and other 
  payables                               -         1,459,872   1,459,872         -         -         -       - 
 
 31 December 2013 
 Financial liabilities 
  not measured at 
  fair value 
 Trade and other 
  payables                               -           155,853     155,853         -         -         -       - 
 
 
   4.       FINANCIAL INSTRUMENTS (continued) 
   (b)      Measurement of fair values 
   (i)       Valuation techniques and significant unobservable inputs 

The following table shows the valuation techniques used in measuring Level 3 fair values at 30 June 2014 and 31 December 2013.

 
 Type                    Valuation technique     Significant unobservable   Inter-relationship 
                                                  inputs                     between significant 
                                                                             unobservable inputs 
                                                                             and fair value 
                                                                             measurement 
----------------------  ----------------------  -------------------------  ---------------------- 
 
 Equity securities       Market-based approach   Share price from           Sensitivity following 
  - available-for-sale                            most recent capital        a change in the 
  assets                                          raising                    share price 
 
 
   (ii)      Level 3 fair values 

Reconciliation of Level fair values

The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values.

 
                                  Equity securities 
                               - available-for-sale 
                                             assets 
---------------------------  ---------------------- 
 
 Balance at 1 January 2013                  427,778 
                             ---------------------- 
 Balance at 30 June 2013                    427,778 
                             ====================== 
 
 Balance at 1 January 2014                  427,778 
 Balance at 30 June 2014                    427,778 
                             ====================== 
 
 

Sensitivity analysis

For the fair values of available for sale assets, reasonably possible changes at 30 June 2014 and 31 December 2013 to one of the significant unobservable inputs, holding other inputs constant, would have the following effects.

 
                                  OCI, net of tax 
                                Increase   Decrease 
-----------------------------  ---------  --------- 
 30 June 2014 
 Share priced changed by 10%      42,778   (42,778) 
 
 31 December 2013 
 Share priced changed by 10%      42,778   (42,778) 
                               =========  ========= 
 
 
   5.       OPERATING SEGMENTS 

At the reporting date the Group had one reportable segment, being gold exploration, evaluation and development.

Reconciliation of reportable segment loss, assets and liabilities and other material items

 
                                                          30 June                   30 June 
                                                           2014                      2013 
                                                           $                         $ 
----------------------------------------  ------------------------  ---------------------------- 
 Loss before income tax 
 Total loss for reportable segment                   (1,480,887)               (2,242,322) 
 Central administration and directors' 
  remuneration                                       (1,336,335)               (2,382,555) 
 Finance income                                             73,522                    66,324 
 Research and development tax incentive 
  refund                                                  481,045                4,538,603 
 Costs relating to Norton takeover bid               (1,096,918)                               - 
                                          ------------------------  ---------------------------- 
 Consolidated loss before income tax                 (3,359,573)                    (19,950) 
                                          ========================  ============================ 
 
 
 
                                                              30 June           31 December 
                                                               2014              2013 
                                                               $                 $ 
------------------------------------------  -------------------------  ----------------------------- 
 Assets 
 Total assets for reportable segment                          653,559                    710,141 
 Cash and cash equivalents                                 2,055,350                  4,256,808 
 Term deposits                                                185,000                    185,000 
 Available for sale financial assets                          427,778                    427,778 
 Research and development tax incentive                       481,045                              - 
  refund 
 Other central admin assets                                   219,520                    152,454 
                                                           4,022,252                  5,732,181 
                                            =========================  ============================= 
 
 Liabilities 
 Total liabilities for reportable segment                (1,568,609)                (1,399,819) 
 Employee entitlements                                      (289,197)                  (412,616) 
 Norton takeover bid                                     (1,087,831)                               - 
 Other liabilities                                          (156,625)                  (109,227) 
                                                         (3,102,262)                (1,921,662) 
                                            =========================  ============================= 
 
 

There have been no changes to the basis of segmentation or the measurement basis for the segment profit or loss since 31 December 2013.

   6.       OTHER RECEIVABLES 
 
                                                            30 June           31 December 
                                                             2014              2013 
                                                             $                 $ 
----------------------------------------  -------------------------  ----------------------------- 
 
 Research and development tax incentive                     481,045                              - 
  refund 
 Bank interest income                                        40,192                       8,720 
 Office rental income                                        38,961                     29,917 
 Deposits and bonds                                         185,000                    185,000 
                                                            745,198                    223,637 
                                          =========================  ============================= 
 
 Current                                                    560,198                     38,637 
 Non-current                                                185,000                    185,000 
                                          -------------------------  ----------------------------- 
                                                            745,198                    223,637 
                                          =========================  ============================= 
 
 
   7.       CAPITAL AND RESERVES 
   (a)      Share capital 
 
                                                                      Ordinary shares 
                                        30 June 2014                                                  30 June 2013 
                                 Number                                   $                    Number                                   $ 
--------------  -----------------------------  -----------------------------  -----------------------------  ----------------------------- 
 
 On issue at 1 
  January                  342,248,780                      68,555,550                   302,533,874                      66,704,240 
 Entitlement 
  issue of 
  shares at 5 
  cents 
  each to 
  Australian 
  shareholders     -                              -                              16,870,703                     843,535 
 Entitlement 
  issue of 
  shares at 
  5.2 cents 
  each to UK 
  shareholders                              -                              -               22,344,203                       1,156,648 
 Issue of 
  shares at 
  4.7 cents in 
  lieu of 
  50% of bonus                 1,786,808                          83,979                                  -                              - 
 Issue of 
  shares at 
  6.5 cents 
  each 
  pursuant 
  to drilling 
  services                     2,261,938                         147,027                                  -                              - 
 Placement of 
  shares at 
  4.1 cents 
  each 
  to Managing 
  Director                     2,859,756                         117,250                                  -                              - 
 Issue of 
  shares at 
  7.1 cents 
  each in lieu 
  of 50% of 
  directors' 
  fees                         1,333,094                          94,649                                  -                              - 
 Capital 
  raising 
  costs                                     -                       2,751                                 -                  (159,372) 
 On issue at 
  30 June                  350,490,376                      69,001,206                   341,748,780                      68,545,051 
                =============================  =============================  =============================  ============================= 
 
 
   7.       CAPITAL AND RESERVES (continued) 
   (b)      Reserves 

Equity-based benefits reserve

The equity-based benefits reserve represents the cost of options that have been granted and vested as share-based payments but not exercised. This reserve will be transferred to accumulated losses should these options be exercised or reversed through profit and loss should certain vesting conditions not be met.

On 1 May 2014, 1,000,000 options with an exercise price of 28.4 cents each expired unvested.

This reserve also represents shares that are to be issued to directors in lieu of director fees.

   (c)      Options 

At the date of this report, there are 14,592,621 options on issue in Bullabulling Gold Limited. The exercise price ranges from 10.20 cents to 59.22 cents, and the exercise dates range from October 2013 to May 2018.

   8.       COMMITMENTS 

Commitments for approved mineral exploration expenditure are scheduled as follows:

 
                                                   30 June                    30 June 
                                                    2014                       2013 
                                                    $                          $ 
-------------------------  ----  -------------------------  ------------------------- 
 
 Mineral exploration 
 Not later than one year                           575,300                    614,060 
                                 ========================= 
 
 
   9.      RELATED PARTY TRANSACTIONS 
   (a)     Transactions with key management personnel 

Key management personnel receive compensation in the form of short-term employee benefits, post-employment benefits and share-based payments awards (where applicable). Key management personnel received total compensation of $905,917 for the six months ended 30 June 2014 (six months ended 30 June 2013: $886,973).

$90,139 of key management personnel remuneration that was incurred in 2014, was satisfied by the issue of fully paid ordinary shares in the Company.

   (b)     Non-executive Directors 

In view of the need to preserve cash in light of the current financial climate and market condition, shareholders approved the implementation of a scheme, effective 1 July 2013, whereby non-executive directors would receive 50% of their directors' fees in shares. The pricing of the shares and accordingly, the number of shares to be issued, was based on a 5 day VWAP at the end of each calendar quarter.

During the six months ended 30 June 2014, the Company issued 1,333,094 fully paid ordinary shares to non-executive directors in satisfaction of deferred director's fees.

   10.     OTHER INCOME 
 
                                                                  30 June                     30 June 
                                                                   2014                        2013 
                                                                   $                           $ 
----------------------------------------  ----  --------------------------  -------------------------- 
 
 Research and development tax incentive 
  refund                                                          481,045                  4,538,603 
 HMRC VAT refund                                                     8,137                       1,557 
                                                                  489,182                  4,540,160 
                                                ==========================  ========================== 
 
 
   11.     EXPENSES 
 
                                                                         30 June                    30 June 
                                                                            2014                       2013 
                                                Note                           $                          $ 
--------------------------------------------  -------  -------------------------  ------------------------- 
 Loss before income tax from continuing 
  operations includes the following specific 
  expenses: 
     Personnel expenses: 
     Wages and salaries (staff)                                          142,305                    224,028 
     Directors and executives remuneration                               905,917                    886,973 
     Contributions to defined contribution 
      plans (staff)                                                       31,539                     31,983 
     Increase / (decrease) in liability 
      for annual leave (staff)                                             (875)                     21,658 
     Payroll tax                                                          53,056                     53,167 
     Other associated personnel expenses                                   4,494                      8,327 
                                                       -------------------------  ------------------------- 
                                                                       1,136,436                  1,226,136 
                                                       =========================  ========================= 
 
     Expensed in exploration and evaluation                              397,143                    499,744 
     Expensed in administrative expenses                                 739,293                    726,392 
                                                       -------------------------  ------------------------- 
                                                                       1,136,436                  1,226,136 
                                                       =========================  ========================= 
     Administrative expenses: 
     Personnel expenses                                                  739,293                    726,392 
     Advertising and publicity                 (i)                       178,978                    110,721 
     Communication and information services    (i)                        31,371                     40,985 
     Travelling and Motor vehicle expenses     (i)                        68,555                     78,127 
     Office administration                                                99,865                    106,024 
     Bank charges                                                          2,543                     20,780 
     Share registry and statutory fees         (i)                       104,794                     45,978 
                                                       -------------------------  ------------------------- 
                                                                       1,225,399                  1,129,007 
                                                       =========================  ========================= 
 
 
   11.     EXPENSES (continued) 
 
                                                                30 June                    30 June 
                                                                   2014                       2013 
                                       Note                           $                          $ 
-----------------------------------  -------  -------------------------  ------------------------- 
     Other expenses: 
     Professional fees                (i)                     1,140,237                    285,562 
     Depreciation and amortisation                               64,428                     85,463 
     Site restoration expenses                                        -                    883,193 
     Net foreign exchange loss        (ii)                       11,326                        887 
                                                              1,215,991                  1,255,105 
                                              =========================  ========================= 
 
 

Notes to support expenses table

   (i)       Includes costs in relation to the Norton takeover bid; 

(ii) Losses on foreign exchange result from movements in the value of the Australian Dollar against the UK Pound

   12.     CONTINGENCIES 

There were no contingent liabilities at the reporting date (2013: Nil).

   13.     SUBSEQUENT EVENTS 

Subsequent to the reporting date, the Group received $503,403 from the ATO comprising $481,045 in Research and Development tax refunds and $22,358 interest.

On 2 July 2014, the Company issued 321,180 fully paid ordinary shares at 7.1 cents each in part satisfaction of director fees. The issue price was based on the 5 day VWAP at the end of the June 2014 quarter.

On 14 July 2014, Norton reached a position of control of Bullabulling with an interest of 50.95%. At the date of this report, Norton held an 86.24% controlling interest in the Company.

On 15 July 2014, the position of Managing Director and CEO were abolished, and the service agreement with Brett Lambert was terminated, with termination benefits paid to Mr Lambert pursuant to his agreement.

On 4 August 2014, Dr Dianmin Chen and Dr Noel White joined the Board, and Brett Lambert and Ronnie Beevor resigned as directors. Dr Chen was appointed Chairman, with Peter Mansell remaining as a non-executive director.

On 4 August 2014, Norton advanced $ 2,000,000 to the Company by way of a draw down facility to enable the Company to continue the DFS study and meet day to day expenses.

Other than these matters, there have been no matters or circumstances that have arisen since the end of the financial year that have significantly affected, or may significantly affect, the operations of the Company, the results of these operations, or the state of affairs of the Company in future financial years.

DIRECTORS' DECLARATION

In the opinion of the directors of Bullabulling Gold Limited (the "Company"):

(1) the financial statements and notes set out on pages 14 to 24 are in accordance with the Corporations Act 2001, including:

(a) giving a true and fair view of the Group's financial position as at 30 June 2014 and of its performance, for the six month period ended on that date; and

(b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and

(2) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors:

PETER MANSELL

Director

Dated at Perth this 28(th) day of August 2014.

INDEPENDENT REVIEW REPORT

This information is provided by RNS

The company news service from the London Stock Exchange

END

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