17 Dec 2008 07:00
CHINA GOLDMINES PLC
PRELIMINARY RESULTS FOR THE YEAR TO 30 JUNE 2008
China Goldmines plc (AIM : CGM) which recently transitioned from explorer to gold producer announces the following preliminary results for the financial year ended 30 June 2008.
Highlights
Financial
* In October 2007, the Company acquired all eight producing gold mines in the Shen Jia Ya prospect. All eight gold mines were successfully transferred into the Company's possession and control.
* Net assets as at 30 June 2008 of US$59m, which includes US$32m invested in wholly owned mining properties, with no long term debts or borrowings.
* Loss for the 2008 year amounted to US$4.2m being US 9.37 cents per share.
* Cash position as at 30 June 2008: US$25m. (Unaudited cash position as at 30 November 2008 US$13.5m (excluding gold inventory)).
Operational
* China Goldmines has three processing plants in operation. They have a total capacity of 350 tonnes per day.
* During 2008 underground mining was active on nine mine faces, with 1.6 million tonnes immediately available for mining that will be high-graded to achieve budget grades in excess of 6 grams per tonne.
* In June 2008 the Land and Resources Department of the Hunan Province approved the consolidation of eight mining licences into one mining licence, which was subsequently issued in August 2008 to our Chinese JV Company, Hunan Westralian Mining Co. Ltd.
* We have constructed an internationally accredited laboratory that will process an average of 120 samples per day.
* The Company has made a milestone transition from gold explorer to gold producer. CGM sold 17 kg of gold from treatment of stock piles (taken on as part of the acquisition of the eight gold mines) during the 2008 financial year. We commenced production in the June quarter, producing 110 tonnes of concentrate with a gold content of 100 g/t and 2216 grams from gravity recovery.
* The Company will shortly commence the sale of gold amalgam and concentrate.
* Based on production results to date, CGM anticipates production of 5,000 to 6,000 oz's of gold for the calendar year ending December 2008.
* Once the first stage of refurbishment is completed and the plants have been upgraded to a total producing capacity of 570 tpd (with higher grades indicated in deeper zones of mines), we confidently expect to achieve output of 20,000 to 25,000 oz's in the calendar year ending December 2009.
* High grades were verified in drilling and underground sampling, with results of up to 103 grams per tonne. Exploratory drilling will be finalised by December 2008, achieving 20,000 metres.
* The Company expects to provide a Q2 operational update in January 2009.
Frank Vanspeybroeck, CEO of China Goldmines said:
"Under adverse and challenging external conditions, the Company has made solid progress during 2008 which will now lay the foundation as a gold producer for the coming years."
The Chairman's Statement and financials follow.
-ENDS-
| China Goldmines plc | |
| Frank Vanspeybroeck (CEO) | +86 731 518 8200 |
| Alex Worrall (Director/Company Secretary) | +44 207 788 7621 |
| Marinko Vidovich (CFO) | +61 8 6216 5200 |
| Guanzhuang Site Office | +86 745 463 9900 |
| Brewin Dolphin Ltd (Nomad) | |
| Alex Dewar (Nominated Adviser) | +44 131 529 0276 |
Notes to Editors
China Goldmines plc is a UK mining company listed on AIM on 7 February 2006 as a gold resources company focussed on the discovery and development of gold projects in Hunan Province, China.
CGM's Gold Project is known as the Guanzhuang Gold Project. Based on an Independent Geological Report, the project has an estimated inferred resource of 1.8m ounces within the top 325m from the surface and over a strike distance of 1.5km. The resources have been identified from CGM's 100% owned/controlled Shen Jia Ya Prospect, which is within the Guanzhuang Gold Project.
The Shen Jia Ya Prospect consists of eight gold mines that have now been converted into a single mining licence. The Company plans to consolidate all eight individual mines. That consolidation will result in a mining operation with a long life producing 150,000 oz Au/pa, in the longer term. At the same time as mining the existing eight mines, China Goldmines will continue to investigate the potential of the project area that remains under-explored.
The information in this report was derived from data compiled by Hunan Westralian Mining Co. Ltd, China and reported by John Warner B. App. Sc. (App. Geol), MAIG, MGAA. John Warner is the Group Geology Manager to the Company. He has the required experience of the style of mineralisation and types of deposit under consideration and of the activity he is undertaking so that he is qualified as a Competent Person as defined by the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.' John Warner consents to the inclusion in the report of matters based on his information in the form and context in which it appears and has reviewed the contents of this announcement.
Chairman's Statement
In this, my first annual statement as Chairman, I am pleased to report that China Goldmines plc (CGM) has made substantial progress during the year with the exploration, evaluation and purchase of eight gold mines using funds from the successful capital raising in October 2007. This has enabled us to reach the key milestone with CGM moving from exploration to become a gold producer in China, now the largest gold producing nation in the world
In June 2008, we poured our first gold and we anticipate production of 5,000 to 6,000 ounces of gold by 31 December 2008.
During the course of this turbulent year in the international markets, the Board has prudently re-focused the company on three priority areas: safety, production and cash conservation.
Our safety record remains outstanding with no fatalities since start up and a lost time injury rate of just 0.0003%. We remain vigilant to ensure that all colleagues return home safely to their families every night.
In 2009, when the plants have been upgraded to exceed 500 tpd, output will increase considerably and we plan to exceed 20,000 ounces during the calendar year.
We are maintaining a tight control on costs and only capital expenditure relating to improved safety and increased production is being approved. As a result, our cash position remains strong. On 30 June 2008, we had US$25m in the Bank with no bank debt and we continue to monitor our cash position closely.
Looking forward, in 2009 we will continue work to link the eight mines underground to help accelerate ore production. This will also provide multiple exploration drilling platforms and facilitate modern load and haulage practices. Most importantly, it will assist us to increase production towards 150,000 ounces per annum in the longer term. We will continue to focus on safety, with the implementation of a rigorous training programme to further improve health and safety procedures. We will also conduct vigorous underground exploration to better understand low-grade surface soil anomalies and higher-grade depth extensions.
Our transformation from gold explorer to gold producer was only achieved by the teamwork, enthusiasm and skills of all staff both above and below ground. For their dedicated efforts and contributions throughout the year, I would like to thank all colleagues, consultants, contractors and fellow Board members. In particular, I would like to thank Clive Donner who due to time constraints stepped down as Chairman in July this year, but has agreed to remain on the Board as a Non-Executive Director. Finally, I would also like to thank Shareholders for their continued support and confidence.
Lance Browne CBE
Chairman
OPERATIONS OVERVIEW
1. Project Overview
CGM's Gold Project is known as the Guanzhuang Gold Project. Based on an Independent Geological Report, the project has an estimated inferred resource of 1.8m ounces within the top 325m from the surface and over a strike distance of 1.5km. The resources have been identified from CGM's 100% owned/controlled Shen Jia Ya Prospect, which is within the Guanzhuang Gold Project.
The Shen Jia Ya Prospect consists of eight gold mines that have now been converted into a single mining licence. The Company plans to consolidate all eight individual mines. That consolidation will result in a mining operation with a long life. At the same time as mining the existing eight mines, China Goldmines will continue to investigate the potential of the project area that remains under-explored.
2. Tenure
The Guanzhuang project comprises an exploration licence held by our Joint Venture Partner, Brigade 407, for an area of 20.74 km2.
Final approval from the Land and Resources Department to transfer the exploration licence to CGM was completed and handed over to Hunan Westralian Mining Co., JV Company ("HWM") in March 2008. The transfer fee of 700,000RMB (approximately $102,000 USD) was calculated by an independent valuation institute in Beijing and paid by HWM in June 2008.
On 10 June 2008 the Land and Resources Department of the Hunan Province approved the consolidation of the eight mining licences into one new mining licence at the same time increasing the area under license from 3.66 km2 (being eight individual mines all combined) to 6.24 km2 with a depth of -230 metres (approximately 550 metres vertical depth from surface). What this means is that CGM has an approximate eight year mine life until it mines to a depth of -230 meters. The mining licence will be renewed next year for three year terms without incurring further fees until HWM reaches the depth of -230 metres from its underground production.
Any depth extensions beyond the -230 metres will be granted subject to a renewal fee based on the Company's resource report on the extended area. The company anticipates mining to -2000 metres.
3. Exploration
The Cooperation Area contains two dominant east - west shear veins, continuous for over 9.5km, and a number of smaller sub-parallel shear veins which are associated with the majority of mineralisation within a structure/shear zone up to 200m wide. A new mineralised parallel structure some 1,000m to the south of the Gold Mines has been located during recent exploration.
Current mining and production activities at the Shenjiaya Prospect demonstrate the capacity to mine relatively high grades of mineralisation utilising limited technology at low production rates. Exploration has established that the mineralised structures display strong continuity over the 9.5km strike length and have also been intersected at depth in several localities. The persistence of the mineralised structures provides the CGM Group with an opportunity to define a substantial gold resource once the structural controls on the location of mineralised shoots can be established.
One important aspect of the shear zone that warrants further investigation is the potential for oxide mineralisation potentially amenable to open pit mining. Two of the Gold Mines had small open pit operations prior to underground development.
An extensive exploration programme to better define low grade surface soil anomalies and higher grade depth extensions by further infill drilling and exploratory development is being currently implemented.
Continuous mapping and trenching programmes will be supplemented with additional surface sampling to allow for the effective use of drill programmes along strike and up/down dip mineralisation extensions. Soil sampling in the form of MMI programmes will be trialled to check its effectiveness before committing to a larger scale programme across the tenements.
A number of drilling programmes are being designed to provide ongoing data for exploration, grade control, geotechnical and structural investigations.
Current underground drilling will use existing development locations, supplemented with multi-purpose development drives, to focus on grade control and infill definition.
Surface exploration will focus on resource extensions and testing parallel structures already identified to the south of the main mineralisation trend.
The surface drilling budget of 15,000 metres for the calendar year 2008 is on target even though the Company experienced delays due to an uncharacteristically harsh and prolonged winter at the start of the year.
Significant Drill and Underground Sampling Results (over 5 g/t)
Sampling results
| Sample_ID | Location | App. Length (M) | True Length (M) | Au Grade (g/t) | Mine |
| D001863 | 2/2/ACC | 1 | 1 | 8.3 | Xiao Chong Zi |
| D001840 | 2/2/ACC | Stope grab sample | 7.9 | Xiao Chong Zi | |
| D001853 | 2/4/ACC | Survey point 2044 | 0.8 | 7.56 | Xiao Chong Zi |
| D001862 | 2/2/ACC | 1 | 1 | 6.28 | Xiao Chong Zi |
| D001857 | 2/2/ACC | 1 | 1 | 6.02 | Xiao Chong Zi |
| D001802 | 4/1/ACC | Survey point 1015 | 1.02 | 24.09 | De Sheng |
| D003072 | 4/3/ ACC | 0.9 | 0.9 | 12.5 | De Sheng |
| D003080 | 4/3/ ACC | 1.1 | 0.9 | 12.1 | De Sheng |
| D001803 | 4/1/ACC | 0.8 | 0.58 | 9.02 | De Sheng |
| D003082 | 4/3/ ACC | 1 | 0.85 | 5.62 | De Sheng |
| D003091 | 1/1C/ACC | 0.5 | 0.4 | 103.5 | Bao Mu Yuan |
| D001750 | 1/1/EXP1 | Rock chip | SJY left over | 24.44 | Bao Mu Yuan |
| D001734 | 1/2/ACC | 1 | 1 | 19.02 | Bao Mu Yuan |
| D001736 | 1/2/ACC | 0.7 | 0.7 | 18.48 | Bao Mu Yuan |
| D001721 | 1/1/ACC | Stope grab sample | 15.59 | Bao Mu Yuan | |
| D001395 | 1/1c/ACC | Stope grab sample | 12.77 | Bao Mu Yuan | |
| D002958 | 1/2/ expE | 1.2 | 0.9 | 12.47 | Bao Mu Yuan |
| D001895 | 1/2/ expE | 1.7 | 1.3 | 11.51 | Bao Mu Yuan |
| D003116 | 1/1C/ACC | Stope grab sample | 9.85 | Bao Mu Yuan | |
| D001397 | 1/1c/ACC | Stope grab sample | 9.41 | Bao Mu Yuan | |
| D001798 | 1/1c/ACC | 1.2 | 0.9 | 9.33 | Bao Mu Yuan |
| D001374 | 1/2/ACC | 1 | 0.4 | 7.49 | Bao Mu Yuan |
| D001729 | 1/2/ACC | 1 | 1 | 7.07 | Bao Mu Yuan |
| D001816 | 1/1/R1 L | 1.5 | 0.6 | 6.85 | Bao Mu Yuan |
| D001335 | 1/1a/ACC | 1 | 0.83 | 6.72 | Bao Mu Yuan |
| D001778 | 1/1c/ACC | 0.8 | 0.8 | 6.7 | Bao Mu Yuan |
| D001731 | 1/2/ACC | 1 | 0.82 | 6.43 | Bao Mu Yuan |
| D003071 | 1/1c.d | 1.3 | 1.15 | 6.35 | Bao Mu Yuan |
| D001818 | 1/1c/ACC | 1 | 1 | 6.13 | Bao Mu Yuan |
| D001815 | 1/1/R1 L | 1.15 | 0.7 | 6.1 | Bao Mu Yuan |
| D001899 | 1/1/R1 | 1.5 | 1.5 | 5.55 | Bao Mu Yuan |
| D001304 | 1/1a/ACC | 1 | 0.85 | 5.47 | Bao Mu Yuan |
| D001755 | 3/3/ACC | 1 | 0.85 | 6.9 | Shen Jia Ya |
| D001791 | 5/6/ACC | 0.8 | 0.66 | 7.74 | Zheng Jia Shan |
| D001766 | 5/5/ACC | 1.1 | 1.1 | 7.7 | Zheng Jia Shan |
| D001710 | 5/1/ACC | 0.85 | 0.6 | 7.1 | Zheng Jia Shan |
| D001825 | 5/5/ACC | 0.95 | 0.9 | 5.75 | Zheng Jia Shan |
| D002908 | 5/5/ACC | 0.8 | 0.7 | 5.52 | Zheng Jia Shan |
Drill results
| Drill hole | Beijing | Beijing | Beijing | From | To | Length | Grade | From | To | Length | Grade | |
| Grid East | Grid North | Grid RL | (m) | (m) | (m) | (g/t) | (m) | (m) | (m) | (g/t) | ||
| (m) | (m) | (m) | ||||||||||
| SJDD0005 | 37501450 | 3160264 | 306.14 | 85.90 | 87.40 | 1.50 | 3.0 | Exploration hole to prove mineralisation up dip from ZK00601, East of Xiang Lu | ||||
| SJDD0006 | 37501379 | 3160299 | 249.6 | Exploration hole for structure between known mineralisation - uneconomic alteration was intersected. | ||||||||
| SJDD0007 | 37501265 | 3160265 | 205 | 311 | 312 | 1.00 | 2.1 | |||||
| SJDD0008 | 37500815 | 3160127 | 226.83 | Hole drilled for structural interpretation between Jin Zhu Wan and Xiang Lu - uneconomic alteration was intersected. | ||||||||
| SJDD0009 | 37500703 | 3160037 | 227.05 | 305.4 | 310 | 4.6 | 9.39 | Includes | 305.4 | 306 | 0.6 | 6.73 |
| and | 306 | 307 | 1 | 13.25 | ||||||||
| and | 307 | 308 | 1 | 8.58 | ||||||||
| and | 308 | 308.8 | 0.8 | 19.25 | ||||||||
| and | 308.8 | 310 | 1.2 | 1.61 | ||||||||
| SJDD0009 | 315 | 316 | 1 | 2.32 | ||||||||
| SJDD0009 | 316 | 317 | 1 | 1.27 | ||||||||
| SJDD0009 | 321 | 323 | 2 | 1.92 | Includes | 321 | 322 | 1 | 2.52 | |||
| and | 322 | 323 | 1 | 1.31 | ||||||||
| SJDD0009 | 325 | 326 | 1 | 1.13 | ||||||||
| SJDD0009 | 390 | 391 | 1 | 1.29 | ||||||||
| SJDD0009 | 392 | 393.3 | 1.3 | 3.88 | ||||||||
| SJDD0009 | 396 | 397 | 1 | 1.46 | ||||||||
| SJDD0009 | 397 | 398 | 1 | 1.11 | ||||||||
Of interest are the results from SJDD0009 drill hole. Besides intersecting significant mineralisation under the Jin Zhu Wan Mine, this was screen fired assayed with additional assaying of the 'plus size' sieve fraction. The oversize fraction (Au-SCR21 / Au(+) Fraction) when assayed provide results indicating, in part, what could be a small nugget effect.
| Drill hole | From | To | Length | Au- | Au- | Au- | Au- | Au- | Au- | Au- | Au- |
| AA25 | AA25D | SCR21 | SCR21 | SCR21 | SCR21 | SCR21 | SCR21 | ||||
| Au | Au | Au Total | Au (+) | Au (-) | Au (+) mg | WT. + | WT. - Frac | ||||
| (+)(-) | Fraction | Fraction | Frac | Entire | |||||||
| Combined | Entire | ||||||||||
| (m) | (m) | (m) | ppm | ppm | Ppm | ppm | ppm | mg | g | g | |
| SJDD0009 | 304.5 | 305.4 | 0.9 | 0.17 | 0.23 | 0.2 |
| 0.2 |
| 9.61 | 1110.5 |
| SJDD0009 | 305.4 | 306 | 0.6 | 6.73 | 5.99 | 7.2 | 53.6 | 6.36 | 1.025 | 19.13 | 1061 |
| SJDD0009 | 306 | 307 | 1 | 13.25 | 13.35 | 17.4 | 461 | 13.3 | 4.288 | 9.31 | 1010.5 |
| SJDD0009 | 307 | 308 | 1 | 8.58 | 9.08 | 13.45 | 443 | 8.83 | 5.637 | 12.72 | 1177.5 |
| SJDD0009 | 308 | 308.8 | 0.8 | 19.25 | 19.5 | 27 | 652 | 19.4 | 8.806 | 13.51 | 1106.5 |
| SJDD0009 | 308.8 | 310 | 1.2 | 1.61 | 1.77 | 1.88 | 15.1 | 1.69 | 0.22 | 14.58 | 995.4 |
* Au-AA25 - Standard Au assay protocol
* Au-AA25D - Duplicate of Au-AA25
* Au-SCR21 - Using both minus and plus fractions for a full determination of gold present. Effectively provides a weighted average of 12.9 g/t for the interval instead of 9.39 g/t - over 30% increase in gold. For resource purposes only the Au-AA25 results will be used for consistency.
* Au results - ppm is equivalent to g/t
Underground Drilling
Ausino Drilling Services carried out an underground drilling programme for grade control and infill definition. An underground drilling programme of 6,000 metres has been scheduled. The underground programme has been delayed by the contractor because of mobilisation delays with the drilling equipment. In addition, delays to the installation of compressed air lines has impacted the start air operated drill rigs with only limited drilling achieved in calendar year 2008.
Immediate Resources available for mining
Production Geologists have been mapping / sampling six of the eight mines and completing interpretation and their understanding of the deposits. The following, although not meeting JORC compliancy standards and requirements, is considered to be what is available for mining while JORC compliant resources and reserves are being more fully evaluated.
| Mine | Au Grade | Thickness | Height | Width | Tonnes |
| (g/t) | (m) | (m) | (m) | ||
| Bao Mu Yuan Mine | 160 | 130 | 73,450 | ||
| Shen Jia Ya Mine | 4.5 | 2 | 40 | 35 | 7,500 |
| De Sheng Mine | 4.44 | 1.09 | 120 | 50 | 15,900 |
| Zheng Jia Shan Mine | 3.20 | 1.23 | 160 | 45 | 28,300 |
| Xiang Lu Mine | 4.5 | Numerous mineralisation zones | 1,500,000 | ||
*Footnote: There are a number of mineralised zones of various dimensions which have been processed and described under the Chinese Resource Estimation methodology. These have been previously reported in the Competent Persons Report of July 2007.
4. Mine Development
The year under review has marked the transition of China Goldmines from explorer to gold producer. Production cash flows will contribute to the ongoing funding of the Company's development work to consolidate and expand the eight gold mines in order to achieve its objective of becoming a significant gold producer in the region.
The Company took possession of the eight mines on 1 November 2007 from the previous owners. Since then the Company has assessed all mines, the plant and equipment, instigated the refurbishment programme and moved into initial production.
It has determined the overall development programme for the resource, acquired additional land and identified the route for "Highway -40", an underground transport route 350 metres from surface, linking all eight mines to a central location. It has recruited and trained over 400 Chinese staff across all departments. In addition approximately 300 contract staff are now on site, similarly trained in the Company's safety standards.
5. Progress of Eight Mines
After delays experienced in the first three months of 2008, owing to an uncharacteristically harsh and prolonged winter, combined with the Chinese festive season, underground mine development has progressed in line with our revised schedule. This programme has increased the throughput in our expanding processing facilities. It is important to note that the site was not affected by the tragic earthquake that struck the Sichuan province.
Shen Jia Ya (SJY) Mine
The SJY mine was in the best condition of all the mines that were purchased, with reasonable infrastructure in place at the time of transfer. By the end of August, China Goldmines has Level 3 SJY and Level 2 BMY connected to enable the haulage of material between the two mines, and the establishment of a ventilation circuit that will service both Bao Mu Yuan (BMY) and SJY, with extension to XCZ.
New air compressors (20m3/min total) and reticulation have been installed allowing enough compressed air capacity for the development of the 'Highway -40' to start from SJY, and also for Diamond Drilling to take place.
SJY is also due to have a primary ventilation circuit established into the lower portions of the mine and as such will be the first of our mines to do so.
On completion of the primary ventilation we have started our production on level 3 with a major stoping block. As the 'Highway -40' is due to closely shadow the main ore structure, it is anticipated that ore will be produced from the highway area in the near future as it's development progresses. This will then be transported to the BMY processing plant via the current mine breakthrough.
Active stopes: No. 070 (500t @ 6 g/t)
No. 050 (2,000t @ 4 g/t)
Indentified stopes for development total 19,000t @ 4.5 g/t.
Bao Mu Yuan (BMY) Mine
Improvements at BMY have lead to increased levels of safety, air capacity and the breakthrough to the Xia Chong Zi (XCZ) mine on Level 1 to help improve ventilation, and to allow haulage from BMY to XCZ. Other developments taking place include the mining of the Level 2 exploration drive, which is connected to Shen Jia Ya (SJY) mine, establishment of a Level 2 Drilling Cuddy, a Level 1C Decline, and Ore Drive.
Stoping blocks have been established in Level 1 Sublevel, Level 1C, Level 1C Decline and Level 2. The Company intends to establish more stoping blocks in the areas of the current exploration drive to supplement the above blocks as they are depleted.
Active stopes: No. 100 (2,200t @ 3 g/t)
No. 075 (1,500t @ 4.5 g/t)
No. 905 (1,000t @ 3.5 g/t)
No. 850 (5,000t @ 4.5 g/t)
Identified stopes for development total 5,000t @ 4.5 g/t.
Xia Chong Zi (XCZ) Mine
Level 2 is currently the focus of production from XCZ, with 2 main stoping blocks delineated and recently coming into production.
Due to XCZ being in close proximity to BMY, development has been limited to areas that are not easily accessible from BMY. Current development consists of the Level 1 Exploration Drive.
As XCZ will be used predominantly as a haulage thoroughfare for material from BMY, the refurbishment has been focussed on the haulage system and on gaining safe access, particularly to the Level 1 Exploration Drive take off and the Level 2 Stoping area. The haulage upgrade included replacing the haulage winches and the rail track with larger specification items to enable an increase in haulage capacity.
De Sheng (DS) Mine
Refurbishment to the haulage system has taken place and CGM has established two raises on Level 1 and Level 2 in ore as part of preparation of a stoping block.
The Company has started a new decline from the surface which will enable the haulage of material from Level 1 direct to the processing plant, and better access to waste storage than the current portal.
Once ventilation is established to Level 3 in DS, another decline is to be developed to access 'Highway -40' and commence development towards SJY. This development will also create access for us to the area under the material due to be stoped on Level 3.
Active stopes: No. 600 (800t @ 3.5 g/t)
No. 700 (800t @ 7.9 g/t)
No. 605 (1,000t @ 4 g/t)
No. 650 (2,000t @ 6 g/t)
No. 660 (5,800t @ 3 g/t)
Identified stopes for development total 13,000t @ 7 g/t and 52,000t @ 4.5 g/t.
Zhen Jia Shan (ZJS) Mine
The refurbishment at ZJS has consisted of upgrading two winches and their associated rail track to enable an increase in the haulage capacity, installation of a new 10m3/min air compressor, and rehabilitation of the access to the Level 1 orebody. On the surface at ZJS, the Company has also established new ore and waste stockpiling areas.
Since taking ownership, the Company has completed ore development on the Portal Level, established a connection to Jiu Fa (JF) to enhance ventilation, and enabled the transfer of material from mine to mine. CGM has started two exploration drives in the lower levels of the mine.
As part of the goal to join up all of the eight mines, development from the lowest level in ZJS will start shortly to access the 'Highway -40'.
Production has been limited to the stoping at the Portal Level, and this is ongoing. As the exploration drives progress, the Company will be in a position to look at establishing stoping blocks.
Active stopes: No. 925 (500t @ 5 g/t)
No. 950 (500t @ 5 g/t)
Identified stopes for development total 29,000t @ 4 g/t.
Jiu Fa (JF) Mine
The refurbishment of JF has recently started which will include the replacement of several winches to increase haulage capacity for the waste development for the 'Highway -40' project.
Once safe access and ventilation is established to the lower portions of the mine, decline development will commence to link up with 'Highway -40' and continue it's development towards ZJS and Jin Zhu Wan (JZW).
Ore production will commence when ventilation is established at JF in the near future.
Xiang Lu (XL) Mine
The refurbishment at XL is ongoing, after which the Company's first production area will be that on a small decline from Level 2; an area previously stoped by the last owner and offering immediate access.
Refurbishment has involved the upgrading of the haulage system with larger winching capacity, and heavier track. Other items that are to be dealt with include the installation of a new 10m3/min air compressor, and the establishment of a primary ventilation circuit.
The Company has developed a haulage tunnel from the surface at XL through an adjacent hill that will enable CGM to take the ore to a road with more favourable access for large road trucks to transport the ore for processing.
Identified stopes for development are estimated at a total of 25,000t @ 3 g/t and 40,000t @ 6 g/t.
Jin Zhu Wan (JZW) Mine
JZW mine is currently under refurbishment. A connection will be established via the 'Highway -40' development from Jiu Fa (JF) mine to JZW. The planned breakthrough from JF will create the ventilation circuit needed to commence production in JZW by the end of the year.
Identified stopes 40,000t @ 4 g/t and 45,000t @ 5 g/t.
5. Summary of Ongoing Development Programme
The Company has a three-stage development programme on top of its exploration programme, and is on track with Stage 1 of refurbishment.
Stage 1: Consolidation and Refurbishment (Current-2010)
In the first stage of development:
* Currently in progress of upgrading and modernising the underground conditions, equipment and practices at each of the mines.
* During 2008 we have increased the underground workforce and implemented stringent health and safety procedures.
* The Company has increased the underground development from approximately 120 meters per month to currently 1,000 meters per month and is on track to achieve its target of 3,000 metres for 2009.
* The Company is on track to achieve its original target of approximately 11,900 tpm in 2009 (equivalent to 142,000 tpa).
Stage 2: Infrastructure Development (2010)
In the second stage of development, the Company plans to:
* Improve the load and haul practices through mechanisation.
* Make further enhancements to communications and ventilation.
* Introduce more modern drilling equipment to increase productivity.
* Construct a processing plant linked underground to all eight of the gold mines. It is the Directors' expectation that they may require additional finance (which may be equity or debt) to complete the construction of the processing plant.
Stage 3: Mechanised Mining (2011 onwards)
In the final phase of development, the Company plans to:
* Move to mechanised mining at the same time as continuing the level exploration along the strike length of the ore body and continued vertical development to explore and prepare deeper mining blocks.
* Construct a vertical haulage shaft and locomotive haulage to underground crusher and loading stations.
6. Processing
China Goldmines has successfully commissioned three gold processing plants in its Shenjiaya Gold Prospect. The Baomuyuan Processing Plant was commissioned with low grade ore and confirmed the metallurgical test work with recoveries of 90% plus. Baomuyuan was operating at 50 tonnes of ore a day, and has been upgraded to 200 tonnes a day.
Designs for the new Bao Mu Yuan tailing dam have been approved by the Chinese authorities and construction will start in the December quarter 08
The second processing plant successfully commissioned is the Xiachongzi Plant which is running at 130 tonnes a day and will be upgraded for it to enable processing 320 tonnes of ore a day.
The Desheng mine has been commissioned and is currently processing 50 tonnes of ore per day following the commissioning of the 2.5km tailings line to the Bao Mu Yuan tailing dam.
The three processing plants have all been scheduled to run twenty four hours a day utilising three eight hour shifts. The three processing plants have a total capacity of 350 tonnes per day (tpd). The three plants will be upgraded to 570 tpd by mid 2009.
The Company's technical management team in Hunan, China, have designed an economic programme of running the three processing plants to achieve up to 570 tonnes of ore processed each day as being the most economical way moving forward until the 2000 tonne a day plant is operational. By only having three plants as opposed to original six plants the Company has reduced the duplication of costs associated with power, labour, consumables and transport whilst achieving the same economic output because of the substantially upgraded plants. This approach also reduces the operational risk associated with health, safety and environmental factors as the operations are confined to three plants as opposed to six plants on six mines with a lower level of productivity.
CGM sold 17 kg of gold from treatment of stock piles (taken on as part of the acquisition of the eight gold mines) during the 2008 financial year. We commenced production in the June quarter, producing 100 tonnes of concentrate with a gold content of 100 g/t and 2216 grams from gravity recovery.
The summary of production to 30 September 2008:-
|
| TONNES | HEAD | CONCENTRATE | CONCENTRATE | GRAVITY | TAILS | Recovery |
|
|
| GRADE | TONNES | GRADE | GOLD(g) | g/t | % |
|
|
|
|
| (grams/tonne) |
|
|
|
| 1 April - 30 June | 5,172 | 2.82 | 110 | 100 | 2,216 | 0.27 | 90% |
| 1 July - 30 September | 7,552 | 4 | 290 | 85 | 3,715 | 0.27 | 93% |
| Total | 12,724 | 3.5 | 400 | 90 | 5,841 | 0.27 | 92% |
Based on production results to date, CGM anticipates production results of 5,000 to 6,000 ounces for the calendar year ending 31 December 2008.
CGM is confident that once refurbishment is completed and the plants have been upgraded to 570 tpd (with higher grades indicated in deeper zones of mines), there will be a higher output of 20,000 to 25,000 ounces for the calendar year ending 31 December 2009.
During the year under review, the Company's health and safety policy was a major priority, both in implementing Western procedures and in the ongoing audit and training. This has resulted in an excellent health and safety record to date.
Expanding the Processing Plant Area
In order to expand its operations the Company is seeking to increase the processing plant land area and to construct new tailing dams. To this end the Company has successfully negotiated the acquisition of a total area of approximately 160 MU (107,839 m2) for a total price of 929,855 RMB (approximately $136,000 USD). This being the amount associated for land compensation for temporary use of land.
The Company is now in the final stages of negotiations to acquire by way of permanent use its central site location in the Zhengjiashan region. The area of 160 Mu has been earmarked for the land to be used for:
* Central decline
* Plant site for the 2000 tonne/day plant
* Central office/accommodation
* Medical clinic
* Maintenance area
7. Laboratory
CGM has constructed an international accredited lab that will process on an average 60 samples from our processing plants on a daily basis and a similar amount from the geology department associated with underground grade control and exploration activity. This lab will be equipped with the latest technology which will be capable of screen fire assay and A.A.S sample reading using a graphite tube that is extremely accurate. The Company is currently training people to use this equipment and is also putting in place procedures that enable it to become QAQC compliant.
8. Financial Position
As a result of prudent cash management of expenditure, CGM remains on track with its budgeted cash position. The Company has a healthy cash position as at 30 June 2008; its cash on hand was USD$25.1 million.
The Company has no long term borrowings and its net assets position is USD$59m of which USD$32m is represented by China mining properties.
Based on operational results to 30 June 2008, CGM is ahead of its internal management budget largely from upgrading three processing plants rather than the six which was originally budgeted. With the gold production target set at 20,000 to 25,000 oz's for the 2009 calendar year, this will contribute a positive cash flow assisting future capital development.
In light of the current global volatility in the capital markets, currency movements (GBP to USD) and the gold price, the Board will continue to adopt a prudent approach to expenditure for the foreseeable future. The Board has decided not to bring forward and fast track the "Central Decline Project", but rather to remain on course with the original development plan scheduled to start in mid-2009.
Consolidated Income Statement
| Note | Year Ended | Year Ended | |
| 30 June 2008 | 30 June 2007 | ||
| $ | $ | ||
| Continuing Operations | |||
| Revenue | 523,635 | - | |
| Salaries and employee benefits | (1,719,889) | (619,758) | |
| Office expenses and professional fees | (2,814,823) | (1,063,710) | |
| Consulting expenses | (1,161,254) | (634,132) | |
| Travel and accommodation expenses | (384,463) | (325,371) | |
| Mining expenses | (1,343,585) | - | |
| Other expenses | (267,997) | (68,425) | |
| Operating Loss | (7,168,376) | (2,711,396) | |
| Other gains and losses | 1 | 1,909,520 | 563,648 |
| Financial income | 998,287 | 181,969 | |
| Loss before tax | (4,260,569) | (1,965,779) | |
| Tax | - | - | |
| Loss for the year | (4,260,569) | (1,965,779) | |
| Attributable to: | |||
| Equity holders of the company | (3,800,361) | (1,889,163) | |
| Minority interest | (460,208) | (76,616) | |
| (4,260,569) | (1,965,779) | ||
| Earnings per share | 2008 | 2007 | |
| Cents | Cents | ||
| Basic and diluted | 2 | (9.37) | (8.38) |
Consolidated Statement of Recognised Income & Expenditure
| Year Ended | Year Ended | |
| 30 June 2008 | 30 June 2007 | |
| $ | $ | |
| Loss for the year | (4,260,569) | (1,965,779) |
| Exchange differences on translation of foreign operations | (1,428,978) | (20,012) |
| Total recognised income and expense for the year | (5,689,547) | (1,985,791) |
| Attributable to: | ||
| Equity holders of the parent | (5,229,339) | (1,909,175) |
| Minority interests | (460,208) | (76,616) |
| (5,689,547) | (1,985,791) |
Consolidated Balance Sheet
| Note | Year Ended | Year Ended | |
| 30 June 2008 | 30 June 2007 | ||
| $ | $ | ||
| Non-current Assets | |||
| Intangible assets | 3 | 704,974 | 449,191 |
| Mining properties | 4 | 32,372,602 | 1,780,785 |
| Property, plant and equipment | 5 | 1,371,728 | 240,264 |
| Investments | - | 143,641 | |
| Trade and other receivables | 6 | 821,958 | - |
| 35,271,262 | 2,613,881 | ||
| Current Assets | |||
| Inventories | 7 | 502,683 | - |
| Trade and other receivables | 118,617 | 180,650 | |
| Cash and cash equivalents | 25,147,806 | 2,594,152 | |
| 25,769,106 | 2,774,802 | ||
| Total Assets | 61,040,368 | 5,388,683 | |
| Current Liabilities | |||
| Trade and other payables | 8 | (2,004,892) | (637,605) |
| Total Liabilities | (2,004,892) | (637,605) | |
| Net Assets | 59,035,476 | 4,751,078 | |
| Equity | |||
| Share capital | 9 | 919,975 | 390,151 |
| Share premium account | 66,169,804 | 6,725,683 | |
| Foreign exchange reserve | (1,431,930) | (2,952) | |
| Other reserves | 61,344 | 61,344 | |
| Retained earnings | (6,671,564) | (2,871,203) | |
| Equity attributable to equity holders of the parent company | 59,047,629 | 4,303,023 | |
| Minority interest | (12,153) | 448,055 | |
| Total Equity | 59,035,476 | 4,751,078 |
Consolidated Statement of Changes in Equity
| Attributable to Members of China Goldmines | |||||||||
|
| Notes | Share | Share | Foreign | Other | Retained | Total | Minority | Total Equity |
|
|
| Capital $ | Premium | Exchange | Reserves | Earnings |
| Interest |
|
|
|
|
| Reserve | Reserve | $ | $ |
| $ |
|
|
|
|
| $ | $ |
|
|
|
|
|
| Balance at 1 July 2006 | 390,151 | 6,725,683 | 17,060 | 61,344 | (662,040) | 6,532,198 | 204,671 | 6,736,869 | |
| Exchange differences on | - | - | (20,012) | - | - | (20,012) | - | (20,012) | |
| translation of foreign |
|
|
|
|
|
|
|
|
|
| operation |
|
|
|
|
|
|
|
|
|
| Net income/(expense) | - | - | (20,012) | - | - | (20,012) | - | (20,012) | |
| recognised directly in equity | |||||||||
| Loss for the year | - | - | - | - | (1,889,163) | (1,889,163) | (76,616) | (1,965,779) | |
| Transfer | - | - | - | - | (320,000) | (320,000) | 320,000 | - | |
| Total recognised income | - | - | (20,012) | - | (2,209,163) | (2,229,175) | 243,384 | (1,985,791) | |
| and expense for the year | |||||||||
| Balance at 30 June 2007 | 390,151 | 6,725,683 | (2,952) | 61,344 | (2,871,203) | 4,303,023 | 448,055 | 4,751,078 | |
| Exchange differences on | - | - | (1,428,978) | - | - | (1,428,978) | - | (1,428,978) | |
| translation of foreign |
|
|
|
|
|
|
|
|
|
| operation |
|
|
|
|
|
|
|
|
|
| Net income/(expense) | - | - | (1,428,978) | - | - | (1,428,978) | - | (1,428,978) | |
| recognised directly in equity | |||||||||
| Loss for the year | - | - | - | - | (3,800,361) | (3,800,361) | (460,208) | (4,260,569) | |
| Total recognised income | - | - | (1,428,978) | - | (3,800,361) | (5,229,339) | (460,208) | (5,689,547) | |
| and expense for the year | |||||||||
| Contributions of equity, net of | 9 | 529,824 | 63,417,004 | - | - | - | 63,946,828 | - | 63,946,828 |
| transaction costs |
|
|
|
|
|
|
|
|
|
| Equity issue transaction costs | - | (3,972,883) | - | - | - | (3,972,883) | - | (3,972,883) | |
| Balance at 30 June 2008 | 919,975 | 66,169,804 | (1,431,930) | 61,344 | (6,671,564) | 59,047,629 | (12,153) | 59,035,476 | |
Consolidated Cash Flow Statement
| Year Ended | Year Ended | ||
| 30 June 2008 | 30 June 2007 | ||
| $ | $ | ||
| Operating Loss | (7,168,376) | (2,711,396) | |
| Adjustments for: | |||
| Net exchange differences |
| (20,253) | - |
| Depreciation of property, plant and equipment |
| 122,727 | 61,221 |
| Amortisation of intangibles |
| 145,270 | 19,029 |
| Operating cash flows before movements in working capital | (6,920,632) | (2,631,146) | |
| (Increase) in inventories |
| (502,683) | - |
| (Increase)/Decrease in receivables |
| (449,863) | 2,104 |
| Increase in trade and other payables | 1,289,638 | 298,512 | |
| Net cash outflow from operating activities |
| (6,583,540) | (2,330,530) |
| Investing activities | |||
| Interest received | 998,287 | 181,969 | |
| Payments for licences, exploration and development expenditure | (29,193,392) | (1,661,454) | |
| Payments for environmental deposits | (303,863) | - | |
| Purchases of property, plant and equipment | (1,247,931) | (192,902) | |
| Purchases of equity investments | - | (143,641) | |
| Net cash used in investing activities | (29,746,899) | (1,816,028) | |
| Financing activities | |||
| Proceeds on issue of ordinary share capital | 62,775,554 | - | |
| Payments for share issue expenses | (3,972,881) | - | |
| Net cash from financing activities | 58,802,673 | - | |
| Net increase/(decrease) in cash and cash equivalents | 22,472,234 | (4,146,558) | |
| Cash and cash equivalents at beginning of year | 2,594,152 | 6,197,074 | |
| Movement in foreign exchange rate | 81,420 | 543,636 | |
| Cash and cash equivalents at end of year | 25,147,806 | 2,594,152 | |
Basis of Preparation
The preliminary results were approved by the Board of Directors on 14 December 2008. The financial information set out above does not comprise the Company's statutory accounts for the year ended 30 June 2007 or 30 June 2006, but is derived from those accounts. The auditors have reported on the 2007 accounts; their report was unqualified. The auditors have yet to sign their report on the 2008 accounts.
These preliminary results have been prepared in accordance with the accounting policies normally adopted in the audited accounts for the year ended 30 June 2007. Where relevant the provisions of International Financial Reporting Standards have been applied in the preparation of this preliminary announcement. The annual report and accounts will be mailed to shareholders on or before 28 December 2008.
1. Other gains and losses
| Year ended | Year ended | |
| 30 June 2008 | 30 June 2007 | |
| $ | $ | |
| Foreign exchange gains | 1,909,520 | 563,648 |
2. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
| Year Ended | Year Ended | ||
| 30 June 2008 | 30 June 2007 | ||
| $ | $ | ||
| Earnings | |||
| Earnings for the purposes of basic and diluted earnings per | (3,800,361) | (1,889,163) | |
| share being net profit attributable to equity holders of the parent | |||
| Number | Number | ||
| Number of shares | |||
| Weighted average number of ordinary shares for the purposes | 40,572,413 | 22,549,995 | |
| of basic and diluted earnings per share | |||
| Basic earnings per share | (9.37) cents | (8.38) cents | |
3. Intangible assets
| Business | Software | Total | |
|
| Licences | $ | $ |
|
| Held |
|
|
| $ | |||
| Cost | |||
| At 1 July 2006 | 441,394 | 12,393 | 453,787 |
| Additions | - | 14,433 | 14,433 |
| At 30 June 2007 | 441,394 | 26,826 | 468,220 |
| Additions | - | 394,321 | 394,321 |
| Exchange differences | - | 86,649 | 86,649 |
| At 30 June 2008 | 441,394 | 507,796 | 949,190 |
| Accumulated Amortisation | |||
| At 1 July 2006 | - | - | - |
| Charge for the year | (14,713) | (4,316) | (19,029) |
| At 30 June 2007 | (14,713) | (4,316) | 930,161 |
| Charge for the year | (14,713) | (124,204) | (138,917) |
| Exchange differences | - | (86,270) | (86,270) |
| At 30 June 2008 | (29,426) | (214,790) | (244,216) |
| Carrying Amount | |||
| At 30 June 2008 | 411,968 | 293,006 | 704,974 |
| At 30 June 2007 | 426,681 | 22,510 | 449,191 |
4. Mining properties
| | Land | Explor. | Mine. | Mining | Total | ||
| | Comp. | Expend. | Develop | Licences | $ | ||
| | Costs | $ | Expend | $ | | ||
| | $ | | $ | | | ||
| Cost | | | | | | ||
| At 1 July 2006 | - | 133,764 | - | - | 133,764 | ||
| Additions | - | 1,647,021 | - | - | 1,647,021 | ||
| At 30 June 2007 | - | 1,780,785 | - | - | 1,780,785 | ||
| Additions | 119,771 | 824,016 | 3,645,980 | 24,209,304 | 28,799,071 | ||
| Exchange differences | 7,141 | - | - | 1,792,337 | 1,799,478 | ||
| At 30 June 2008 | 126,912 | 2,604,801 | 3,645,980 | 26,001,641 | 32,379,334 | ||
| At 1 July 2006 | - | - | - | - | - | ||
| Charge for the year | - | - | - | - | - | ||
| At 30 June 2007 | - | - | - | - | - | ||
| Charge for the year | (6,353) | - | - | - | (6,353) | ||
| Exchange differences | (379) | - | - | - | (379) | ||
| At 30 June 2008 | (6,732) | - | - | - | (6,732) | ||
| Carrying Amount | | | | | | ||
| At 30 June 2008 | 120,180 | 2,604,801 | 3,645,980 | 26,001,641 | 32,372,602 | ||
| At 30 June 2007 | - | 1,780,785 | - | - | 1,780,785 | ||
The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective mining areas.
Amortisation of the costs carried forward for the development phase and the mining licences is not being charged pending the commencement of production. The business licences are being amortised over 30 years, and software over 5 years, and land compensation costs over 2 years.
The Company shall start to amortise its mining related intangible assets when the relevant area of interest is capable for commercial production (i.e. when the relevant mining assets are available for use). The development costs incurred on the area of interest prior to commercial production are capitalised/expensed in accordance with the Company's accounting policies applicable.
Management has determined that the area of interest (Shenjiaya Project) owned by the Company is yet to be capable for commercial production at the balance sheet date and no amortisation is charged on the relevant mining related intangible assets.
Key factors considered but not limited to:
i ) nominated percentage of design capacity for the mines;
ii ) mineral recoveries at or near expected levels; and
iii ) the achievement of continuous production or other output.
Amortisation will be charged over the mines estimated life using the units of production method calculated on the basis of proven and probable reserves.
5. Property Plant and Equipment
|
|
| Leasehold | Motor | Furniture, | Total |
|
|
| improvements | vehicles | fittings and | $ |
|
|
| $ | $ | equipment |
|
|
|
|
|
| $ |
|
| Cost | |||||
| At 1 July 2006 | 12,694 | 45,483 | 60,212 | 118,389 | |
| Additions | 3,873 | 24,362 | 164,667 | 192,902 | |
| At 30 June 2007 | 16,567 | 69,845 | 224,879 | 311,291 | |
| Additions | - | 54,965 | 1,192,966 | 1,247,931 | |
| Exchange differences | - | 7,342 | 10,910 | 18,252 | |
| Disposals | (16,567) | - | - | (16,567) | |
| At 30 June 2008 | - | 132,152 | 1,428,755 | 1,560,907 | |
| Accumulated | |||||
| depreciation | |||||
| At 1 July 2006 | (2,793) | (2,047) | (4,966) | (9,806) |
| Charge for the year | (11,127) | (12,535) | (37,559) | (61,221) |
| At 30 June 2007 | (13,920) | (14,582) | (42,525) | (71,027) |
| Charge for the year | - | (3,950) | (118,777) | (122,727) |
| Exchange differences | - | 1,751 | (11,096) | (9,345) |
| Disposals | 13,920 | - | - | 13,920 |
| At 30 June 2008 | - | (16,781) | (172,398) | (189,179) |
| Carrying amount | ||||
| At 30 June 2008 | - | 115,371 | 1,256,357 | 1,371,728 |
| At 30 June 2007 | 2,647 | 55,263 | 182,354 | 240,264 |
No assets are pledged as security for liabilities.
6. Trade and other receivables
Amounts due after more than one year
| 30 June 2008 | 30 June 2007 | |||
| $ | $ | |||
| Prepayments | 518,095 | - | ||
| Environmental remediation deposits | 303,863 | - | ||
| 821,958 | - |
The environmental remediation deposits were paid to the Land and Resources Department of Hunan Province. The deposit represents an environmental security bond over the eight operating gold mines. The environmental deposit remains in place during the duration of the mining licence.
7. Inventories
| 30 June 2008 | 30 June 2007 | |||
| $ | $ | |||
| Raw materials and stores - at cost | 360,286 | - | ||
| Work in progress - at cost | 142,397 | - | ||
| 502,683 | - |
8. Trade and other payables
|
| 30 June 2008 | 30 June 2007 | ||
| $ | $ | |||
| Trade payables | 371,897 | 381,664 | ||
| Other payables and accruals | 1,632,995 | 255,941 | ||
| 2,004,892 | 637,605 | |||
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs.
The average credit period taken for trade purchases is 55 days, (2007: 47 days).
The directors consider that the carrying amount of trade and other payables approximates to their fair value.
9. Share Capital
|
| 30 June 2008 | 30 June 2007 |
| $ | $ | |
| Authorised: | ||
| 55,000,000 ordinary shares of £0.01 each | 1,043,678 | 444,000 |
| (2007 : 24,000,000 ordinary shares of £0.01 each) | ||
| Issued and fully paid: | ||
| 48,475,411 ordinary shares of £0.01 each | 919,975 | 390,151 |
(2007: 22,549,995 ordinary shares of £0.01 each)
On 7 February 2006, 7,500,000 shares of £0.01 ($0.02) each were placed at a premium of £0.59 ($1.04) each.
The Company has one class of ordinary shares which carries no right to fixed income.
On 7 August 2007, 900,000 shares were placed at 140 pence per share to raise £1,260,000 to meet immediate working capital needs.
On 22 October 2007 25,025,416 million shares were placed at 120 pence per share to raise £30,000,000 to secure the transfer of the eight gold mines and then to invest in the consolidation and development of the existing mining activities.
10. Contingent liabilities
There were no material contingent liabilities of the Group or Company at the Balance Sheet date.
11. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Transactions between the Group and related parties are disclosed below.
Trading transactions
During the year, Group companies entered into the following transactions with related parties who are not members of the Group:
| | Purchase of goods / | Amounts owed to related | ||||||
| | services | parties | ||||||
| | 2008 | 2007 | 2008 | 2007 | ||||
| | $ | $ | $ | $ | ||||
| Bowlane Nominees Ltd | 295,096 | 271,680 | - | - | ||||
| Jinan Limited | 242,776 | 210,800 | - | - | ||||
| Mr Ian Anderson | 17,980 | 72,150 | - | - | ||||
| Metallurgical Management Services (Pty) Ltd | 20,655 | 4,400 | - | - | ||||
| Wildewood Limited | 26,000 | 52,000 | - | - | ||||
| Linq Corporate Pty Ltd | 72,000 | 72,000 | - | - | ||||
| | | | | | ||||
Bowlane Nominees Ltd is a company that provides managerial services to the Group, on behalf of Frank Vanspeybroeck, a director of China Goldmines plc. $295,096 (2007: $271,680) was paid in accordance with his agreed service agreement.
Jinan Limited is a company that provides financial and accounting services to the Group, on behalf of Marinko Vidovich, a director of China Goldmines plc. $242,776 (2007: $210,800) was paid in accordance with his agreed service agreement.
Mr Ian Anderson provided geological services to the Group, and is a director of Global Resource Ventures Limited. $17,980 (2007: $72,150) was paid in accordance with his consultancy agreement.
Metallurgical Management Services (Pty) Ltd is a company that provides metallurgical consultancy services to the Group. Evan Kirby is a director of both this company and China Goldmines plc. $20,655 (2007: $4,400) was paid in accordance with commercial rates.
Wildewood Limited is a company in which Mr Worrall is a director and shareholder, supplies consultancy services to the Company for Mr Worrall who is a director of China Goldmines plc. $26,000 (2007: $52,000) was paid in accordance with commercial rates.
Linq Corporate Pty Ltd, a company of which Mr Donner is a director, has provided in the period corporate consultancy services utilising a number of Linq Corporate employees amounting to $72,000 (2007 : $72,000).
All services were provided under normal commercial terms.
The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received.
Remuneration of key management personnel
The emoluments of the directors, who are the key management personnel of the Group, were $284,000 (2007: $308,000). These do not include the amounts paid in consultancy fees noted on the previous page.