Appendix 4D
Half-year report
31 December 2013
Appendix 4D
KBL Mining Limited ABN 38 129 954 365
Appendix 4D
Half-year ended 31 December 2013 CONTENTS
Result For Announcement To The Market
Half-Year Financial Report
Independent Review Report
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Appendix 4D
Half-year report
31 December 2013
Appendix 4D
Appendix 4D
Half-year Report Name of entity
KBL Mining Limited
ABN or equivalent company Half-yearly Preliminary Financial year ended (‘current period’) reference (tick) final (tick)
KBL Mining Limited 6 months ended 31 December 2013
Results for announcement to the market $A’000
Sales revenue Up 15.65% 25,693 Profit after tax attributable to members Up 316.65% 12,813 Profit from extraordinary items after tax attributable to members Nil Nil Net profit for the half-year attributable to members Up 316.65% 12,813
Dividends (distributions) Amount per security Franked amount per
security
Final dividend Nil Nil
Interim dividend Nil Nil
Record date for determining entitlements to the dividend Nil
31 December 2013 31 December 2012
Net tangible assets per security 2.51c 2.63c
Brief explanation of any of the figures reported above necessary to enable the figures to be understood. Refer to the Directors’ Report of the Half-year financial report.
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KBL Mining Limited
ABN 38 129 954 365
Interim Report - 31 December 2013
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KBL Mining Limited
Directors' Report
31 December 2013
The directors present their report, together with the financial statements, on the consolidated entity consisting of KBL Mining Limited (referred to hereafter as the ‘company’ or ‘KBL’) and the entities it controlled for the half-year ended 31 December 2013.
Directors
The following persons were directors of the company during the whole of the financial half-year and up to the date of this report, unless otherwise stated:
James Wall
Robert Besley
Stephen Lonergan
Greg Starr (appointed 18 November 2013)
Principal activities
During the financial half-year the principal continuing activities of the company consisted of mineral exploration, resource development and mining in Australia.
Review of operations
The profit for the company after providing for income tax amounted to $12,813,240 (31 December 2012: loss of $5,914,325). Mineral Hill Mine, NSW
KBL 100% Ownership
Mine and Mill Production
During the half-year KBL realised consistent levels of productivity and efficiency from the Mineral Hill Mine with production levels substantially in line with targets for the half-year. The restructured Mineral Hill workforce of 54 (46% reduction) achieved well above expectations whilst mining the remainder of the underground Red Terror copper-gold lodes, establishing SOZ and sustaining high milling rates. Concentrate production was some 1,000DMT lower in the December quarter compared to the September quarter reflecting an expected reduction in ore mined and grades as operations transitioned from the upper Parkers Hill and Red Terror ore bodies to the new production area at SOZ.
Capital works in SOZ have been completed on time and within the $2m budget, with stoping currently underway in the northern portion of the SOZ B and D Lodes. For 2014, the current mine schedule extracts stopes from the B, D and C South Lodes between 40 & 80RL. This will then be followed in subsequent years by C North, G & H Lodes. The mine plan for SOZ is expected to supply 18kt to 20kt of ore feed to the processing plant on a monthly basis.
Optimisation of the process plant has seen throughputs and copper recoveries reaching up to 49tph and 85 – 90% respectively. A sequential float is to be trialled by the end of February to establish the feasibility of producing a marketable Pb-Ag concentrate product from B & D Lodes, in addition to copper/gold concentrates.
The Mineral Hill operation maintained a low cost approach to production, which has contributed significantly to the positive operating cash flow for the half year Cost reduction programmes across all aspects of the Mineral Hill operation are ongoing, with examples being the renegotiation of the Mineral Hill electricity contract to save some $600,000 over 2014 and 2015, significant reductions from the underground mining contractor and an ongoing reduction in supply and contractor charges.
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KBL Mining Limited
Directors' Report
31 December 2013
Table 1: Mineral Hill Production from opening to 31 December 2013
A 6,000m underground diamond drilling program is underway to infill and expand known resources in the Southern Ore Zone (SOZ). The drill program will also de-risk forthcoming mining and support Resource and Reserve upgrades expected in the June Quarter 2014. To date, approximately 3,000m of drilling has been completed with significant results which can be found in the Company’s December Quarterly Report.
Figure 1: Oblique view displaying the current underground drilling program designed to infill and expand the resources at Southern Ore Zone (SOZ). The focus for production for 2014 is highlighted on the B, C & D Lodes.
2014 Mining Focus
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KBL Mining Limited
Directors' Report
31 December 2013
An updated assessment of the geological controls of mineralisation has highlighted a number of exploration targets that will focus exploration activities during 2014. These include shallow Cu-Au and Cu-Pb-Zn-Au-Ag targets adjacent to pre-existing infrastructure and deeper targets beneath historical workings.
KBL is focused on identifying additional underground copper-gold Resources, while at the same time, improving the quality of its existing Resource inventory, by converting Resources to Reserves to extend the existing mine life of the Mineral Hill Mine.
Figure 2. Oblique view of the Mineral Hill mine site with Red Terror (blue) the location of production for 2013. Resources defined at SOZ (green & yellow) will be the focus of production for the 2014-2016 period. All currently defined Resources are open along strike and at depth, and adjacent to pre-existing underground development (dark
grey)1.
Sales Arrangements
KBL shipped approximately 8,000 dry metric tonnes of concentrate containing 1,700 tonnes of copper, 2,500 ounces of gold and 18,000 ounces of silver to MRI Trading AG during the half year.
Strategic Production Plan The plan is to mine the SOZ copper-gold deposits and current SOZ resources are expected to provide ore supply for at least 3 years.
The Company is considering reinstalling a CIL plant to improve gold recoveries from the SOZ Lodes and to enable processing of the Pearse gold silver deposit.
1 The potential quantity and grade of these exploration targets is conceptual in nature. There has been insufficient exploration to define a
Mineral Resource and it is uncertain if further exploration will result in determination of a Mineral Resource.
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KBL Mining Limited
Directors' Report
31 December 2013
Sorby Hills, WA
KBL: 75% Ownership
Project and Approvals
Sorby Hills maiden Ore Reserve estimated for the DE deposit was announced in November 2013. Probable Ore Reserve of 2.4Mt @ 5% lead and 54g/t silver (applying a cut off of 2% lead).
On 22 October 2013 the Company announced that the WA Environment Protection Authority (“EPA”) had recommended that the Minister for Environment approve the development for the Sorby Hills Silver-Lead-Zinc Project. On 7 November 2013 the Company advised that an appeal had been lodged against the EPA’s recommendations. The Company was notified that this appeal had been dismissed on 20 February 2014. The Minister for Environment is now considering whether the Project may proceed and, subject to approval, the Company expects to start funding its 75% share of the bankable feasibility study and certain baseline environmental studies during the current half year. The Joint Venturers are looking to progress the feasibility study and operational licences in preparation for financing, construction and operations, once the approvals are in place.
Additional Information
Additional information in relation to the company’s operations during the half year and the results of those operations are available on the company’s website www.kblmining.com.au.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the company during the financial half-year.
Events after the reporting period
On 20 February 2014 the company announced that it had been advised that the appeal against the EPA recommendations on the Sorby Hills Silver-Lead-Zinc Project (originally announced on 7 November 2013) has been dismissed. The Minister for the Environment is now considering whether the Project may proceed and, if so, the implementation conditions to which it should be subject.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on the following page.
This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.
On behalf of the directors
________________________________ James Wall Director
28 February 2014
Sydney The information in this report that relates to Mineral Resources, Ore Reserves, Exploration Results and Exploration Targets is based on information compiled by Anthony Johnston, MSc (Hons), who is a Member of the Australasian Institute of Mining and Metallurgy and is a full-time employee of the Company. Anthony Johnston has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr Johnston consents to the inclusion in the announcement of the matters based on his information in the form and context that the information appears.
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Level 11, 1 Margaret St Sydney NSW 2000 Australia
Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
DECLARATION OF INDEPENDENCE BY TIM SYDENHAM TO THE DIRECTORS OF KBL MINING LIMITED
As lead auditor for the review of KBL Mining Limited for the half-year ended 31 December 2013, I
declare that, to the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the review; and
2. No contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of KBL Mining Limited and the entities it controlled during the period.
Tim Sydenham
Partner
BDO East Coast Partnership
Sydney, 28 February 2014
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KBL Mining Limited
Financial report
31 December 2013
Contents
Page
Financial report
Statement of profit or loss and other comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11
Directors' declaration
17
Independent auditor's review report to the members of KBL Mining Limited 18
General information
The financial report covers KBL Mining Limited as a consolidated entity consisting of KBL Mining Limited and the entities it controls. The financial report is presented in Australian dollars, which is KBL Mining Limited's functional and presentation currency.
The financial report consists of the financial statements, notes to the financial statements and the directors' declaration.
KBL Mining Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business are at:
Level 3, 2 Elizabeth Plaza
North Sydney
NSW 2060
A description of the nature of the company's operations and its principal activities are included in the directors' report, which is not part of the financial report.
The financial report was authorised for issue, in accordance with a resolution of directors, on 28 February 2014. The directors have the power to amend and reissue the financial report.
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KBL Mining Limited
Statement of profit or loss and other comprehensive income
For the half-year ended 31 December 2013
Consolidated
Note 31/12/2013
31/12/2012
$
$
Revenue and other income 3 25,692,917
22,215,641
Share of profits of associates accounted for using the equity method
-
-
Expenses
Cost of sales 4 (11,978,407)
(20,812,113)
Finance costs
(1,585,125)
(837,149)
Employee benefits expense
(2,642,559)
(3,960,591)
Depreciation and amortisation expense
(1,237,895)
(1,293,755)
Exploration written off (2,629) -
Loss on sale of property (97,623) -
Loss from foreign exchange and hedging (693,115) -
Reversal of impairment on Mining Property 8 6,278,307 -
General and administration costs
(920,631)
(1,226,358)
Profit/(loss) before income tax expense
12,813,240
(5,914,325)
Income tax expense 5 -
-
Profit/(loss) after income tax expense for the half-year
12,813,240
(5,914,325)
Other comprehensive income
-
-
Total comprehensive income for the half-year attributable to members of the parent entity
12,813,240
(5,914,325)
Cents
Cents
Basic profit/(loss) per share
3.45
(2.05)
Diluted profit/(loss) per share
3.44
(2.05)
The above Statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
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KBL Mining Limited
Statement of financial position
As at 31 December 2013
Consolidated
Note 31/12/2013
30/06/2013
$
$
Assets
Current assets Cash and cash equivalents 6 11,153,393 5,305,089
Trade and other receivables 7 965,437 2,469,894
Inventories
1,303,493 1,316,036
Total current assets
13,422,323 9,091,019
Non-current assets
Other financial assets
1,691,700 1,114,700
Property, plant and equipment
10,917,855 11,804,464
Mining property 8 29,620,288 21,597,682
Investment in joint venture
11,407,174 11,057,174
Exploration and evaluation 9 2,290,160 6,881,265
Total non-current assets
55,927,177 52,455,285
Total assets
69,349,500 61,546,304
Liabilities
Current liabilities
Trade and other payables 10 4,098,078 8,556,266
Financial liabilities 11 913,539 4,821,071
Provisions
357,561 365,128
Total current liabilities
5,369,178 13,742,465
Non-current liabilities
Financial liabilities
11,060,930 10,480,097
Provisions
945,992 853,977
Convertible notes (ASX Code: KBLGA)
10,189,287 10,655,276
Total non-current liabilities
22,196,209 21,989,350
Total liabilities
27,565,387 35,731,815
Net assets
41,784,113 25,814,489
Equity
Issued capital
67,846,446 64,744,734
Reserves
2,580,873 2,526,201
Accumulated losses
(28,643,206) (41,456,446)
Total equity
41,784,113 25,814,489
The above Statement of financial position should be read in conjunction with the accompanying notes.
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KBL Mining Limited
Statement of changes in equity
For the half-year ended 31 December 2013
Consolidated
Issued
Accumulated Total
capital Reserves losses equity
$
$
$
$
Balance at 1 July 2012
63,716,920 1,851,984 (27,107,990) 38,460,914
Loss after income tax expense for the half-year
- - (5,914,325) (5,914,325)
Other comprehensive income for the half-year, net of tax -
- - - -
Total comprehensive income for the half-year -
- - (5,914,325) (5,914,325)
Transactions with owners in their capacity as owners:
Ordinary shares issued 1,081,909 - - 1,081,909
Transaction costs (54,095) - - (54,095)
Share based payments
- 41,499 - 41,499
Balance at 31 December 2012 -
64,744,734 1,893,483 (33,022,315) 33,615,902
Issued
Accumulated Total
capital Reserves losses equity
$
$
$
$
Balance at 1 July 2013
64,744,734 2,526,201 (41,456,446) 25,814,489
Profit after income tax expense for the half-year
- - 12,813,240 12,813,240
Other comprehensive income for the half-year, net of tax -
- - - -
Total comprehensive income for the half-year -
- - 12,813,240 12,813,240
Transactions with owners in their capacity as owners:
Ordinary shares issued 3,760,000 - - 3,760,000
Return of capital (602,195) (602,195)
Transaction costs (56,093) - - (56,093)
Share based payments
- 54,672 - 54,672
Balance at 31 December 2013 -
67,846,446 2,580,873 (28,643,206) 41,784,113
The above Statement of changes in equity should be read in conjunction with the accompanying notes.
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KBL Mining Limited
Statement of cash flows
For the half-year ended 31 December 2013
Consolidated
31/12/2013
31/12/2012
$
$
Cash flows related to operating activities Receipts from customers
16,764,241 21,157,491
Payments to suppliers and employees (inclusive of GST)
(18,486,834) (25,427,400)
(1,722,593) (4,269,909)
Interest received
116,286 58,585
Interest and other finance costs paid
(1,182,374) (685,666)
Receipt of R&D claim
14,968,017 -
Net cash from/(used in) operating activities
12,179,336 (4,896,990)
Cash flows related to investing activities
Payments for development
(3,388,010) (5,497,531)
Payments for property, plant and equipment
(242,156) (358,125)
Payments for exploration and evaluation
(1,634,792) (2,020,213)
Payments for other financial assets
(350,000) (480,851)
Receipts from sale of property 285,637 -
Net cash used in investing activities
(5,329,321) (8,356,720)
Cash flows related to financing activities
Proceeds from issue of equity securities, net of share issue costs
3,703,908 1,069,314
Return of capital (602,195) -
Proceeds from borrowings 2,623,315 3,743,478
Repayment of borrowings
(6,726,739) (547,916)
Net cash (used in)/from financing activities
(1,001,711) 4,264,876
Net increase/(decrease) in cash and cash equivalents
5,848,304 (8,988,834)
Cash and cash equivalents at the beginning of the half-year
5,305,089 11,904,571
Cash and cash equivalents at the end of the half-year
11,153,393 2,915,737
The above Statement of cash flows should be read in conjunction with the accompanying notes.
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KBL Mining Limited
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies
These financial statements for the interim half-year reporting period ended 31 December 2013 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.
These financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2013 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.
The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.
New, revised or amending Accounting Standards and Interpretations adopted
The company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Any significant impact on the accounting policies of the company from the adoption of these Accounting Standards and Interpretations are disclosed in the relevant accounting policy. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the company.
Going concern
These financial statements are prepared on a going concern basis. The company has achieved a net profit of after tax of $12,813,240 (2012: loss of $5,914,325) for the half-year ended 31 December 2013 with cash inflows from operating and investing activities of $6,850,015 (2012: outflows of $13,253,710). As at 31 December 2013, the company had cash on hand of $11,153,393 (2012: $2,915,737).
In the Directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
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KBL Mining Limited
Notes to the financial statements
31 December 2013
Note 2. Operating segments
Identification of reportable operating segments
The company operates mineral exploration, resource development and mining projects in Australia and is organised into three operating segments based on an operations and geographic perspective, they are: Mineral Hill, Sorby Hills and Other Exploration. These operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. There is no aggregation of operating segments.
The CODM reviews performance in these segments separately. The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on at least a monthly basis.
Intersegment transactions
There were no intersegment transactions during the half-year.
Operating segment information
Consolidated
Mineral Sorby Other
Hill Hills Exploration Unallocated
Total
31/12/2013 $'000
$
$
$
$
$
Revenue and other income Sales to external
customers -
16,914,125
- -
-
16,914,125
Total sales revenue -
16,914,125
-
-
-
16,914,125 Share of profits from joint venture -
-
-
-
-
-
Other income -
8,670,629
-
-
-
8,670,629
Total revenue and other income -
25,584,754
-
-
-
25,584,754
EBITDA -
11,584,376
-
(2,629)
(2,331,957)
9,249,790 Depreciation and amortisation
(1,237,895)
-
-
-
(1,237,895)
Interest revenue
-
-
-
108,163
108,163
Finance costs
-
-
-
(1,585,125)
(1,585,125) Reversal of impairment 6,278,307 - - - 6,278,307
Profit/(loss) before income tax expense
16,624,788
-
(2,629)
(3,808,919)
12,813,240
Income tax expense
-
-
-
-
-
Profit/(loss) after income tax expense
16,624,788
-
(2,629)
(3,808,919)
12,813,240
Assets Segment assets -
42,807,072
11,407,174
2,290,160
12,845,094
69,349,500
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KBL Mining Limited
Notes to the financial statements
31 December 2013
Note 2. Operating segments (continued)
Consolidated
Mineral Sorby Other
Hill Hills Exploration Unallocated
Total
31/12/2012 $'000
$
$
$
$
$
Revenue and other income Sales to external
customers -
21,878,272
-
-
-
21,878,272
Total sales revenue -
21,878,272
-
-
-
21,878,272 Share of profits of associates -
-
-
-
-
-
Other income -
-
-
-
278,785
278,785
Total revenue and other income -
21,878,272
-
-
278,785
22,157,057
EBITDA -
(2,018,332)
-
-
(1,823,673)
(3,842,005) Depreciation and amortisation
(1,293,755)
-
-
-
(1,293,755)
Interest revenue
-
-
-
58,584
58,584
Finance costs
-
-
-
(837,149)
(837,149)
Profit/(loss) before income tax expense
(3,312,087)
-
-
(2,602,238)
(5,914,325)
Income tax expense
-
-
-
-
-
Profit/(loss) after income tax expense
(3,312,087)
-
-
(2,602,238)
(5,914,325)
Assets Segment assets -
38,873,560
10,595,993
5,724,382
4,030,437
59,224,372
Note 3. Revenue and other income
Consolidated
31/12/2013
31/12/2012
$
$
Sales revenue Sale of concentrates
16,914,125
21,878,272
Interest
108,163
58,584
-
-
17,022,288
21,936,856
Other income
Gain from foreign exchange and hedging
-
274,785
R&D claim(i)
8,670,429 -
Other
200
4,000
-
-
8,670,629
278,785
Revenue and other income
-
-
25,692,917
22,215,641
(i) On 16 July 2013 KBL received an R&D claim totalling $14,968,017; this has been split between income and capital based on the expenditure in the claim in accordance with Australian Accounting Standards. Note 8 shows the balance of $6,297,588 being allocated to the mining property asset which effectively reduces the asset value by the same amount.
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KBL Mining Limited
Notes to the financial statements
31 December 2013
Note 4. Expenses
Consolidated
31/12/2013
31/12/2012
$
$
Profit/(loss) before income tax includes the following specific expenses:
Cost of sales Cost of sales including freight 11,797,259 20,862,048
Change in inventory 181,148 (49,935)
Cost of sales
11,978,407
20,812,113
Finance costs
Interest and finance charges paid/payable
1,585,125
837,149
Employee benefits
Wages and salaries
2,642,559
3,960,591
Note 5. Income tax
31/12/2013
31/12/2012
$
$
Current tax
- -
There is no tax charge in the half-year as the company had tax losses brought forward from 30 June 2013 of $27,859,846; this has a tax effect of $8,357,954.
Note 6. Cash and cash equivalents
31/12/2013
30/06/2013
$
$
Cash at bank and in hand
11,153,393 5,305,089
Note 7. Trade and other receivables
31/12/2013
30/06/2013
$
$
Trade receivables 382,441 1,523,848
Other receivables 312,668 422,494
GST receivable 270,328 282,557
Hedge instruments - 240,995
Trade and other receivables
965,437 2,469,894
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KBL Mining Limited
Notes to the financial statements
31 December 2013
Note 8. Mining property
Consolidated
31/12/2013
30/06/2013
$
$
Cost 41,074,651 38,837,962
Impairment (8,641,773) (14,920,080)
Accumulated amortisation (2,812,590) (2,320,200)
Carrying amount at end of the period
29,620,288
21,597,682
Balance at beginning of the period 21,597,682 15,249,230
Additions 2,811,010 7,853,686
Reversal of impairment 6,278,307 -
Transfer from exploration and evaluation 5,723,267 -
Amortisation (492,390) (1,505,234)
Allocation of R&D claim (Note 3) (6,297,588) -
Carrying amount at end of the period 29,620,288 21,597,682
The recoverable amount of the mining property has been determined by a value-in-use calculation, and during the half-year the company recognised as reversal of impairment amounting to $6,278,307. The relevant impairment was recorded in the 30 June 2012 financial statements. Management believe that the revised carrying value is fully recoverable.
Key assumptions used:
Life of mine remaining – 9 years
Discount rate of 13% post-tax (pre-tax 16.9%)
Exchange rate of AUD/USD 0.88
Commodity prices: o Copper US$7,000 per tonne o Gold US$1,225 per ounce o Silver US$20 per ounce
During the second half of 2013 the company completed a restructure of the workforce and negotiated a significant reduction from its underground mining contractor and other suppliers. These lower costs have been used in the value-in-use calculation.
Note 9. Exploration and evaluation
31/12/2013
30/06/2013
$
$
Balance at beginning of the period 6,881,265 3,704,169
Additions 1,134,791 4,153,070
Transfer to mining property (5,723,267) -
Impairment (2,629) (975,974)
Carrying amount at end of the period
2,290,160
6,881,265
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KBL Mining Limited
Notes to the financial statements
31 December 2013
Note 10. Trade and other payables
Consolidated
31/12/2013
30/06/2013
$
$
Trade payables 3,543,264 7,821,194
Other payables 554,814 735,072
Trade and other payables
4,098,078
8,556,266
Note 11. Financial liabilities - current
31/12/2013
30/06/2013
$
$
Amount due to Triako Resources Pty Ltd - 1,313,189
Amount due to insurance premium funding 205,735 65,503
Amount due on HP facilities 232,309 157,588
Amount due on facility with offtake counterparty 248,041 3,284,791
Hedge instruments 227,454 -
Financial liabilities - current
913,539
4,821,071
Note 12. Financial instruments
Fair value and Transfers of financial instruments The following details the consolidated entity's fair values of financial instruments categorised by the following levels; Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities, Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) and Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Only one liability amounting to $227,454 (30 June 2013: asset $240,995) is classed as Level 2, all other amounts are classed as Level 3. The fair value of hedges is determined using a valuation technique which uses only observable market data. There were no transfers between levels during the half-year.
Changing one or more inputs would not significantly change the fair value of level 3 financial instruments.
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature. The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial instruments.
Note 13. Events after the reporting period
On 20 February 2014 the company announced that it has been advised that the appeal against the EPA recommendations on the Sorby Hills Silver-Lead-Zinc Project (originally announced on 7 November 2013) has been dismissed. The Minister for the Environment is now considering whether the Project may proceed and, if so, the implementation conditions to which it should be subject.
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Directors' declaration
In the directors' opinion:
● the attached financial statements and notes thereto comply with the Corporations Act 2001, Australian Accounting
Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;
● the attached financial statements and notes thereto give a true and fair view of the company's financial position as
at 31 December 2013 and of its performance for the financial half-year ended on that date; and
● 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 directors made pursuant to section 303(5)(a) of the Corporations Act 2001.
On behalf of the directors
________________________________ James Wall Director
28 February 2014
Sydney
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Level 11, 1 Margaret St Sydney NSW 2000 Australia
Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
INDEPENDENT AUDITOR’S REVIEW REPORT
To the members of KBL Mining Limited
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of KBL Mining Limited, which comprises
the consolidated statement of financial position as at 31 December 2013, the consolidated statement
of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the half-year ended on that date, notes comprising a
statement of accounting policies and other explanatory information, and the directors’ declaration of
the consolidated entity comprising the company and the entities it controlled at the half-year’s end or
from time to time during the half-year.
Directors’ Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation of the half-year financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation of
the half-year financial report that is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We
conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review
of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether,
on the basis of the procedures described, we have become aware of any matter that makes us believe
that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving
a true and fair view of the consolidated entity’s financial position as at 31 December 2013 and its
performance for the half-year ended on that date; and complying with Accounting Standard AASB 134
Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of KBL Mining
Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the
annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Australian Auditing Standards
and consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of KBL Mining Limited, would be in the same terms if given to the
directors as at the time of this auditor’s review report.
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Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us
believe that the half-year financial report of KBL Mining Limited is not in accordance with the
Corporations Act 2001 including:
(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2013
and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations
Regulations 2001
BDO East Coast Partnership
Tim Sydenham
Partner
Sydney, 28 February 2014
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