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Financial Summary

FINANCIAL PERFORMANCE (from 2003 Annual Report)

Key points regarding the Group's 2002-03 financial performance are:

  • Coal revenue increased 17% due to a better $A/$US exchange being achieved in 2002-03. Coal revenue was much less than planned due to production difficulties suppressing mine production by 300,000 tonnes to 1.26 million tonnes and shipping constraints delaying 100,000 tonnes of sales into the 2003-04 financial year;
  • Total operating costs increased in line with higher production and due to additional ground support costs being incurred at Southland;
  • Depreciation and amortisation charges increased, reflecting increased production and the level of capital spent on the operations in recent years;
  • Increased borrowing costs reflect interest paid on the Convertible Notes for the first full year and a higher level of Group borrowings; and
  • The loss after tax of $22.9 million was most disappointing and represents what can only be described as an unsatisfactory result.

FINANCIAL POSITION

The Company's financial position at 30 June 2003 may be summarised as follows:

  • Working capital of $5.3 million. Receivables at the end of June were more than usual as sales increased sharply in June;
  • Total assets of $226.1 million related primarily to $66.3 million of current assets, $86.5 million to long-term gold assets and $65.2 million to long-term coal assets;
  • Total liabilities represent 58% of total assets;
  • Of total liabilities of $131.0 million, $40.0 million is attributable to the Convertible Notes which are unsecured, subordinated and redeemable; $36.1 million is attributable to secured term borrowings; and the balance is a combination of revolving trade finance lines, equipment leasing, trade creditors and provisions; and
  • Total shareholders' equity is $95.1 million.

CAPITAL STRUCTURE

In order to restore the Company's working capital, a package of equity raisings totalling $15.2 million was completed in May 2003. The initial component of this raising was private placements to professional investors (as defined in Australian corporations law) and several of the Company's Directors. The second component was a Share Purchase Plan which provided the opportunity for all eligible shareholders to participate at the same price as the private placements at $0.335 per share.

At 30 June 2003, Gympie Gold Limited had 206.4 million ordinary shares on issue and 12.0 million unlisted options.

A total of 40.0 million Convertible Notes are on issue and interest is paid quarterly at a fixed rate of 8.5% per annum on the $1.00 par value. Noteholders may elect to convert their notes into Gympie Gold shares at the Conversion Rate of 1 note to 0.7567 of a Gympie Gold share. If the noteholder elects not to convert the notes into Gympie Gold shares, then the Company will simply redeem the notes at par value ($1.00) at the end of their five-year life in September 2007.

RISK MANAGEMENT

Operational management, including exploration and mine planning, is controlled by our own personnel. Suitably qualified contractors provide support as appropriate at our operations - Thiess at Southland Coal, Roche at Gympie Eldorado and Kabana in the Gympie Gold Gemstone venture.

A portion of future product revenues are hedged in $A in order to provide some insurance. The general rationale of our hedging policies is to protect the company's exposure where a change in product pricing would be damaging, but to leave upside potential unhedged as much as practical.

Gold revenue received (including by-product credits) for 2002-03 was $A552 per ounce, compared with the average spot gold price of $A572 for the year.

Gold hedging commitments were reduced by 94,000 ounces or 43% during 2002-03. Forward sales totalled only 126,100 ounces at 30 June 2003. These forward contracts are scheduled to be delivered at $A520 per ounce and at a rate of 3,000 ounces per month until December 2006.

Only 18% of Mineral Resources at Gympie Eldorado are subject to price caps (hedging commitments) - down from 51% at 30 June 2000. The remaining 82% and all additional gold discovered is fully exposed to gold price movements.

The contracts for Southland's coal are predominantly in US dollars and the Company utilises currency hedging in order to protect the Australian dollar revenue stream. Southland converted its 2002-03 $US receipts into Australian dollars at an average exchange rate of less than $A 1.00/$US 0.59.

At 30 June 2003, the Company had currency hedging in place of $US57 million at an average rate of $A1.00/$US0.616, sufficient to cover approximately 1.5 million tonnes of coal sales. The positive marked-to-market value of this position was $A5 million at the year-end spot rate of $1.00/US$0.667. Management will continue to evaluate further short-term currency hedging at appropriate levels to protect future revenue in $A terms.


Download the complete 2003 Financial and Resources Report (200KB) [ pdf ]

  Latest Releases
Announcements
11 October 2005:
Circular to stakeholders - 5 October 2005
26 September 2005:
Notice of Meeting
Quarterly Reports
30 January 2004:
Report for December 2003 Quarter
20 October 2003:
Report for September 2003 Quarter
Annual Reports
23 October 2003:
2003 Annual Report
01 October 2002:
2002 Annual Report
 
Profit Reports
28 August 2003:
Full-Year Results and Update
28 August 2003:
02-03 Preliminary Final Report
 
Presentations
25 November 2003:
2003 AGM - Managing Director's Presentation
05 November 2003:
Mining 2003 Conference Presentation
 




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Last Modified: Wednesday, 31-Mar-2004 14:39:57 EST