The net cash outflow from the acquisition amounted to $4.3 million. Acquisition-related costs of $0.7 million have been charged to administrative and other expenses in the statement of comprehensive income for the year ended December 31, 2017.
The results of Youga and Balogo Gold Mines are included within the consolidated statement of income from the date of acquisition. Youga and Balogo Gold Mines contributed revenues of $2.5 million and a net income after tax of of $0.5 million to the Group's net loss for the period from December 18 to 31, 2017.
Had the acquisition completed on January 1, 2017, the Company would have reported revenues of $236.6 million and a net income after tax of $13.7 million for the year ended December 31, 2017.
5. Segment information
The Company is engaged in the exploration, development and operation of gold projects in the West African countries of Liberia, Burkina Faso and Cameroon. Information presented to the Chief Executive Officer for the purposes of resource allocation and assessment of segment performance is focused on the geographical location of mining operations. The reportable segments under IFRS 8 are as follows:
-- New Liberty operations;
-- Burkina operations which include the Youga and Balogo Gold Mines;
-- Exploration; and
-- Corporate.
Gold sales from New Liberty operations and Burkina operations are each sold to a single but different customer, both located in Switzerland.
Following is an analysis of the Company's results, assets and liabilities by reportable segment for the year ended December 31, 2017:
New Liberty Burkina Exploration Corporate Total
operations operations
$'000 $'000 $'000 $'000 $'000
Net
income/(loss)
for the year (20,770) 1,319 (2,458) (5,498) (27,407)
Gold sales 95,246 2,540 - - 97,786
Production costs
- Mine operating
costs (70,433) (3,187) - - (73,620)
- Change in
inventories (1,983) 2,109 - - 126
(72,416) (1,078) - - (73,494)
Depreciation (32,248) - (500) (17) (32,765)
Segment assets 241,451 90,818 4,197 572 337,038
Segment
liabilities (152,409) (49,388) (4,196) (777) (206,770)
Capital
additions and
acquisitions
-- property,
plant and
equipment 55,868 38,191 - - 94,059
Following is an analysis of the Company's results, assets and liabilities by reportable segment for the year ended December 31, 2016:
New Liberty Burkina Exploration Corporate Total
operations operations
$'000 $'000 $'000 $'000 $'000
Loss for the year (103,015) - (3,105) (6,870) (112,990)
Gold sales 63,612 - - - 63,612
Production costs
- Mine operating
costs (80,209) - - - (80,209)
- Change in
inventories (1,875) - - - (1,875)
- Impairment of
inventories (4,933) - - - (4,933)
(87,017) - - - (87,017)
Depreciation (15,948) - (389) (22) (16,359)
Other costs
- Termination fee
(Note 20) (4,500) - - - (4,500)
- Shutdown costs (4,383) - - - (4,383)
(8,883) - - - (8,883)
Segment assets 216,567 - 575 10,101 227,243
Segment
liabilities (121,483) - (69) (715) (122,267)
Capital additions
-- property,
plant and
equipment 27,714 - 30 - 27,744
6. Administrative expenses
Year ended Year ended
December 31,2017 December 31,
2016
$'000 $'000
Wages, salaries and contractual
termination/change
of control payments 1,693 4,046
Legal and professional 1,548 5,412
Depreciation of non-mining assets 17 411
Share based payments 1,070 768
Foreign exchange 78 250
Other expenses 1,260 1,162
5,666 12,049
7. Income taxes
Year endedDecember 31,2017 Year endedDecember 31,2016
$'000 $'000
Current taxation 143 -
The analysis of the Company's taxation charge for the year based on the company's statutory tax rate of 26.5% is as follows:
Year endedDecember Year endedDecember
31,2017 31,2016
$'000 $'000
Loss before tax (27,264) (112,990)
Tax recovery at the
Canadian corporation tax
rate
of 26.5% (7,225) (29,942)
Effect of different tax
rates of subsidiaries
operating
in other jurisdictions 345 1,895
Non-deductible expenses 1,048 10,822
Non-taxable gains (997) (279)
Tax losses not utilised
and carried forward 7,219 17,957
Other (247) (453)
143 -
Deferred tax balances in Burkina Faso for which there is a right of offset within the same tax jurisdiction are presented net on the face of the balance sheet as permitted by IAS 12. The closing deferred tax assets, after this offsetting of balances, are shown below:
December 31,2017 December 31,2016
$'000 $'000
Deferred tax assets arising from:
Capital allowances 3,203 -
Other temporary differences 1,351 -
4,554 -
Deferred tax balances in Liberia for which there is a right of offset within the same tax jurisdiction are presented net as permitted by IAS 12. A deferred tax asset of $4.8 million (2016: $2.9 million) in respect of losses has been recognised and off set against a deferred tax liability of $4.8 million (2016: $2.9 million) with respect to accelerated tax depreciation in Liberia. The Group has only recognised an asset up to the value of the deferred tax liability.
The Group has further carried forward losses and capital allowances in Liberia and Canada in which it does not recognise a deferred tax asset due to uncertainty over the utilisation of these assets. The unrecognised deferred taxation asset at December 31, 2017 is $107.9 million (2016: US$81.3 million) based on a carried forward tax losses asset of $51.1 million (2016: US$26.6 million) which expires between 2031 and 2037 and capital allowances of $56.8 million (2016: US$54.7 million) which have no expiry date.
8. Trade and other receivables
December 31,2017 December 31,2016
$'000 $'000
Trade receivable 416 760
Other receivables 10,690 1,940
Due from related parties (Note 20(e)) 1,015 122
Pre-payments 13,165 2,953
25,286 5,775
Other receivables include a VAT receivable from the Burkina Faso Government amounting to $8.9 million as at December 31, 2017 (2016: $nil).
9. Inventories
December 31, December 31,
2017 2016
$'000 $'000
Gold dore 3,986 1,720
Gold in circuit 2,561 1,492
Ore stockpiles 6,688 3,737
Consumables 23,697 9,402
36,932 16,351
Consumables at New Liberty as at December 31, 2016 include inventories acquired from a related party (Note 20(d)).
Production costs for the year ended December 31, 2017 include a write-down of ore stockpiles at New Liberty of $2.9 million to net realisable value. Production costs for the year ended December 31, 2016 include an impairment of the low grade oxide stockpiles which was not planned to be fed through the processing plant at New Liberty as at December 31, 2016 of $4.9 million.
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2018 07:00 ET (11:00 GMT)
