Beaconsfield Gold - Australia's Richest Gold Resource.

High Grade, Low Cost Gold Producer

Half Yearly Report
For the Half Year Ended 31 December 2004


APPENDIX 4D

Half-Year Report for the period ending 31 December 2004
ASX Code: BCD

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Entity:
 Beaconsfield Gold NL
Reporting Period:
 Six Months ended 31 December 2004
Previous Corresponding Period:
 Six Months ended 31 December 2003





$'000





Revenue from ordinary activities
 down
 10.8%
 to
 18,339
Profit from ordinary activities after
 down
 50.3%
 to
 2,420
tax attributable to members



Net profit for the period attributable
 down
 50.3%
 to
 2,420
to members




Dividends
 Amount per share
 Franked amount per share
Interim dividend
 1.5 cents
 Nil
Previous corresponding period
 Nil
 Nil
Record date for determining
 21 March, 2005
entitlements to the dividends


Net tangible assets per security
 Cents per share
Six months ended 31 December 2004
 15.19
Six months ended 31 December 2003
 (5.90)


BEACONSFIELD GOLD NL

ACN 057 793 834

Half Yearly Report
For the Half Year Ended 31 December 2004

www.beaconsfieldgold.com.au


Directors' Report
Condensed Statement of Financial Performance
Condensed Statement of Financial Position
Condensed Statement of Cash Flows
Notes to the Half-Year Financial Statements
Independent Review Report

Half-Year Report also available as a PDF File (448K)


BEACONSFIELD GOLD NL
DIRECTORS’ REPORT FOR HALF YEAR ENDED 31 DECEMBER 2004

Your directors submit their report for the half-year ended 31 December 2004.

DIRECTORS
The names of the company's directors in office during the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.
A B Greenwood (resigned 28 February 2005)
M W Trumbull
J W Williams (resigned 31 December 2004)
E H Parkin (resigned 24 November 2004)
B G Noonan
W Tsingos
D E Clarke (appointed 25 November 2004)

PRINCIPAL ACTIVITIES

The principal activity of the Company during the half year was to produce gold through its participation in the Beaconsfield Mine Joint Venture ("BMJV") which operates the Beaconsfield Gold Mine in north east Tasmania.

The participants in the unincorporated BMJV are Allstate Explorations NL ("Allstate") with a 51.51% interest and Beaconsfield Gold with a 48.49% interest. Allstate, with the higher interest, is Manager of the BMJV and the BMJV Mine Manager and all the personnel reporting to him are employed by Allstate. Beaconsfield Gold in turn owns 25.62% of the fully paid shares in Allstate.

Joint Administrators were appointed to Allstate on 8 June 2001, and became Joint Deed Administrators when Allstate creditors approved a Deed of Company Arrangement in late 2001.

CONSOLIDATED RESULT

The consolidated profit for the half year after income tax was $2,420,000 (2003 December half year: profit of $4,874,000). The profit of $2,420,000 was after providing $3,124,000 for depreciation and amortisation and $262,000 for interest costs.

Net assets at 31 December 2004 were $21,856,000.

INTERIM DIVIDEND

The directors have declared an interim unfranked dividend of 1.5 cents per fully paid ordinary share.

REVIEW OF OPERATIONS

Production for the BMJV since gold production commenced in September 1999 is summarised in the following table.

For the half year ending 31 December 2004, ore mined and milled was 123,105 tonnes and 120,756 tonnes respectively. Head grade averaged 18.8 g/t gold for the half year. Gold recovery in the ore treatment plant averaged 95.7% for the half year. Record mill throughput in the December quarter reflected improved ore supply from underground and further grinding and bacterial oxidation operational and process improvements.

The mine decline face was 1,020 metres vertically below surface at 31 December 2004. The decline/waste development layout and the modified ½ Upper/Avoca mining method continues to provide benefits to the operation.

BMJV gold production for the half year was 69,711 ounces so that Beaconsfield Gold's 48.49% direct interest was 33,803 ounces.

BMJV ore reserves at 31 December 2004, calculated at a nominal cut-off grade of 6 g/t gold, totalled 377,000 ounces of gold. Beaconsfield Gold's 48.49% direct interest was 182,800 ounces.


Production Summary



SIGNIFICANT EVENTS
New Banking Arrangements with CBA
On 7 December 2004, the Directors announced that the Company had accepted an offer from the Commonwealth Bank of Australia ("CBA") to provide a new package of banking facilities.

The new CBA facilities comprise:-

(a) A $3 million overdraft facility to fund short-term working capital requirements. Based on present cash balances and projected cash flows, it is anticipated that in normal circumstances this facility will not need to be drawn upon.
(b) A $3.35 million performance bond facility to support existing guarantee obligations without the requirement for cash collateral. This facility has freed up $2 million of cash funds which the Company had not been able to access.
(c) A gold hedging facility providing the Company with the ability to forward sell up to approximately 48,000 ounces of gold per year. This will give the Company the flexibility to lock in a percentage of its future gold production at attractive Australian dollar per ounce forward prices.

The CBA facilities will initially be available until 31 December 2006 and security arrangements are similar to those for the facilities provided by the Company's former banker.

Completion took take place on 25 February.

The replacement of the existing facilities has been a major priority of the Board for the past four months. The new relationship with CBA, in addition to releasing more than $2 million of previously inaccessible Company cash funds, provides the Company with considerably more financial flexibility going forward.


Claim Against Allstate Explorations NL ("Allstate")

Beaconsfield Gold lodged a Proof of Debt on 3 November 2004 with the Allstate Deed Administrators for $29,271,854, representing 48.49% of the damages awarded to the Beaconsfield joint venturers in the claim against ACN 005 585 795 Pty Ltd (formerly Brown & Root Engineering & Construction Pty Ltd ("BREC")) and Batepro Australia Pty Ltd ACN 009 006 777 ("BA"). The Proof of Debt alleges that Allstate was negligent in the performance of its duties as manager of the joint venture and was in breach of its duties owed to the joint venturers, under the terms of the Beaconsfield Joint Venture Agreement, in its dealings with BREC and BA in connection with the contract to design, supply, construct and commission the gold ore treatment plant and bacterial oxidation plant at the Beaconsfield mine.

The Allstate Deed Administrators are seeking legal advice on the Proof of Debt and are expected to respond in due course.
ROUNDING

The amounts contained in this report and in the half-year financial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the company under ASIC Class Order 98/0100. The company is an entity to which the Class Order applies.
AUDITOR'S INDEPENDENCE DECLARATION

We have obtained an independence declaration from our auditors, Ernst & Young. A copy can be found on page 15 of this financial report.

Signed in accordance with a resolution of the directors.

D E Clarke
Director
28 February 2005



CONDENSED STATEMENT OF FINANCIAL PERFORMANCE

HALF-YEAR ENDED 31 DECEMBER 2004

Notes

CONSOLIDATED


2004

2003


$'000

$'000

Revenues from ordinary activities

 2
 18,339
 20,556

Expenses from ordinary activities

 2
 (15,919)
 (15,682)
PROFIT FROM ORDINARY ACTIVITIES BEFORE INCOME TAX EXPENSE
2,420
 4,874
INCOME TAX EXPENSE RELATING TO ORDINARY ACTIVITIES
-
 -




NET PROFIT ATTRIBUTABLE TO MEMBERS OF BEACONSFIELD GOLD NL
2,420
 4,874




TOTAL REVENUES, EXPENSES AND VALUATION ADJUSTMENTS ATTRIBUTABLE TO MEMBERS OF BEACONSFIELD GOLD NL AND RECOGNISED DIRECTLY IN EQUITY
-
 -

TOTAL CHANGES IN EQUITY OTHER THAN THOSE RESULTING FROM TRANSACTIONS WITH OWNERS AS OWNERS
2,420
 4,874




Basic earnings per share (cents per share)
1.7
 6.4
Diluted earnings per share (cents per share)
1.6
 6.4


CONDENSED STATEMENT OF FINANCIAL POSITION

HALF-YEAR ENDED 31 DECEMBER 2004

Notes

CONSOLIDATED


AS AT
31 DECEMBER 2004

AS AT
30 JUNE
2004

AS AT
31 DECEMBER 2003


$'000

$'000

$'000

CURRENT ASSETS



Cash assets
7,235
 3,416
 3,733
Receivables
4,462
 5,877
 997
Inventories
1,675
 1,815
 1,095
Other
-
 327
 -

TOTAL CURRENT ASSETS
13,372
 11,435
 5,825

NON-CURRENT ASSETS



Other financial assets
1
 1
 1
Property, plant and equipment
13,253
 14,782
 10,370
Exploration, evaluation & development
7,369
 6,692
 11,698
Other
314
 163
 267

TOTAL NON-CURRENT ASSETS
20,937
 21,638
 22,336

TOTAL ASSETS
34,309
 33,073
 28.161

CURRENT LIABILITIES



Payables
3,613
 6,089
 4,671
Interest bearing liabilities
4,272
 3,267
 26,572
Provisions
923
 854
 649

TOTAL CURRENT LIABILITIES
8,808
 10,210
 31,892

NON-CURRENT LIABILITIES



Payables
330
 330
 329
Interest-bearing liabilities
2,174
 2,234
 154
Provisions
1,141
 863
 348

TOTAL NON-CURRENT LIABILITIES
3,645
 3,427
 831

TOTAL LIABILITIES
12,453
 13,637
 32,723

NET ASSETS
21,856
 19,436
 (4,562)

EQUITY



Share capital
77,782
 77,782
 60,636
Accumulated losses
(55,926)
 (58,346)
 65,198

TOTAL EQUITY
21,856
 19,436
 (4,562)


CONDENSED STATEMENT OF CASH FLOWS

HALF-YEAR ENDED 31 DECEMBER 2004

Notes

CONSOLIDATED


2004

2003


$'000

$'000

CASH FLOWS FROM OPERATING ACTIVITIES


Receipts from customers
18,778
 20,574
Interest received
218
 -
Payments to suppliers and employees
(13,237)
 (12,745)
Borrowing costs
(632)
 -

NET CASH FLOWS FROM OPERATING ACTIVITIES
5,127
 7,829

CASH FLOWS FROM INVESTING ACTIVITIES


Purchase of Plant & Equipment
(363)
 -
Mine Development Expenditure
(1,872)
 (1,162)

NET CASH FLOWS USED IN INVESTING ACTIVITIES
(2,235)
 (1,162)

CASH FLOWS FROM FINANCING ACTIVITIES


Proceeds from borrowings
1,000
 -
Proceeds from issue of shares
-
 100
Repayment of borrowings
-
 (6,000)

Payment of share issue costs
(16)
 -

Repayment of lease principal
(57)
 -

NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
927
 (5,900)

NET INCREASE IN CASH HELD
3,819
 767
Add opening cash brought forward
3,416
 2,966

CLOSING CASH CARRIED FORWARD
7,235
 3,733


NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS

31 DECEMBER 2004

1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT
The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.
The half-year financial report should be read in conjunction with the Annual Financial Report of Beaconsfield Gold NL as at 30 June 2004. It is also recommended that the half-year financial report be considered together with any public announcements made by Beaconsfield Gold NL and its controlled entities during the half-year ended 31 December 2004 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.
Basis of accounting
The half-year financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, applicable Accounting Standards including AASB 1029 "Interim Financial Reporting" and other mandatory professional reporting requirements (Urgent Issues Group Consensus Views).
The half-year financial report has been prepared in accordance with the historical cost convention.
For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.
Accounting policies have been consistently applied by each entity in the consolidated entity and are consistent with those applied in the 30 June 2004 Annual Financial Report.

Notes

CONSOLIDATED


2004

2003


$'000

$'000

2. PROFIT FROM ORDINARY ACTIVITIES


(a) Specific Items


Profit from ordinary activities before income tax expense includes the following revenues and expenses whose disclosure is relevant in explaining the financial performance of the entity:


(i) Revenues from ordinary activities


Revenue from sale of gold
18,039
 20,556
Interest received
252
 -
Other revenue
48
 -


18,339
 20,556




(ii) Expenses


Borrowing costs
262
 1,383
Depreciation and amortisation
3,124
 3,327
Costs of production
11,178
 9,599
Royalties
280
 885
Administration
1,075
 488


15,919
 15,682




3. DIVIDENDS PAID OR PROVIDED FOR ON ORDINARY SHARES
During the reporting period the consolidated entity has not paid any dividends.

4. CONTINGENT ASSETS AND LIABILITIES
Royalty Payments to Mineral Resources Tasmania ("MRT")
On 20 December 2004, the Company submitted a claim to MRT alleging overpayment of profit-based royalty by the Beaconsfield Receiver and Manager, up to the date of his retirement on 12 March 2004.

The alleged overpayment arose mainly from an understatement of depreciation and amortisation expense in calculating profit for royalty, thereby overstating profit.

Profit royalty was accrued in full for the year ended 30 June 2004, but has not been accrued for the December 2004 half-year. The Company continues to pay ad valorem royalty to MRT when it becomes due.

A response to the claim from MRT has not yet been received. A positive outcome will result in a write-back to profit of approximately $1.0 million, and a net amount due from MRT of approximately $630,000. The company has proposed to MRT that this amount be held as a credit balance against which to offset future profit royalty liabilities.

Should MRT not accept the Company's arguments, and should any appeal avenues fail, additional royalty of approximately $400,000 would be payable to MRT for the six months ended 31 December 2004.
Claim Against Allstate Explorations NL ("Allstate")
Beaconsfield Gold lodged a Proof of Debt on 3 November 2004 with the Allstate Deed Administrators for $29,271,854, representing 48.49% of the damages awarded to the Beaconsfield joint venturers in the claim against ACN 005 585 795 Pty Ltd (formerly Brown & Root Engineering & Construction Pty Ltd ("BREC")) and Batepro Australia Pty Ltd ACN 009 006 777 ("BA"). The Proof of Debt alleges that Allstate was negligent in the performance of its duties as manager of the joint venture and was in breach of its duties owed to the joint venturers, under the terms of the Beaconsfield Joint Venture Agreement, in its dealings with BREC and BA in connection with the contract to design, supply, construct and commission the gold ore treatment plant and bacterial oxidation plant at the Beaconsfield mine.

The Allstate Deed Administrators are seeking legal advice on the Proof of Debt and are expected to respond in due course.

5. SEGMENT RESULTS


The consolidated entity operates in the gold exploration, development and mining industry. The consolidated entity operates in Australia.
6. SUBSEQUENT EVENTS
New Banking Arrangements with the CBA
On 7 December 2004, the Directors announced that the Company had accepted an offer from the Commonwealth Bank of Australia ("CBA") to provide a new package of banking facilities.

The new CBA facilities comprise:-

(a) A $3 million overdraft facility to fund short-term working capital requirements. Based on present cash balances and projected cash flows, it is anticipated that in normal circumstances this facility will not need to be drawn upon.
(b) A $3.35 million performance bond facility to support existing guarantee obligations without the requirement for cash collateral. This facility has freed up $2 million of cash funds which the Company had not been able to access.
(c) A gold hedging facility providing the Company with the ability to forward sell up to approximately 48,000 ounces of gold per year. This will give the Company the flexibility to lock in a percentage of its future gold production at attractive Australian dollar per ounce forward prices.

The CBA facilities will initially be available until 31 December 2006 and security arrangements are similar to those for the facilities provided by the Company's former banker, Bank of Western Australia Limited.

Completion took take place on 25 February.

The replacement of the existing facilities has been a major priority of the Board for the past four months. The new relationship with CBA, in addition to releasing more than $2 million of previously inaccessible Company cash funds, provides the Company with considerably more financial flexibility going forward.
Interim Dividend
The directors have declared an interim unfranked dividend of 1.5 cents per fully paid ordinary share.
Since 31 December 2004, there have been no other material events which would impact on the financial results for the half year.
7. IMPACT OF ADOPTING AASB EQUIVALENTS TO IASB STANDARDS
Beaconsfield Gold NL has commenced transitioning its accounting policies and financial reporting from current Australian Standards to Australian equivalents of International Financial Reporting Standards (IFRS). The Company has allocated internal resources and engaged its external auditors to perform diagnostics. The Company has also conducted impact assessments to isolate key areas that will be impacted by the transition to IFRS. As the Company has a 30 June year end, priority will be given to considering the preparation of an opening balance sheet in accordance with AASB equivalents to IFRS as at 1 July 2004. This will form the basis of accounting for Australian equivalents of IFRS in the future, and is required when the Company prepares its first fully IFRS compliant financial information for the year ended 30 June 2006. Set out below are the key areas where accounting policies will change and may have an impact on the financial report of the Company. At this stage the Company has not been able to reliably quantify the impacts on the financial report.

Classification of Financial Instruments
Under AASB 139 Financial Instruments: Recognition and Measurement, financial instruments will be required to be classified into one of five categories which will, in turn, determine the accounting treatment of the item. The classifications are:
  • loans and receivables - measured at amortised cost,
  • held to maturity - measured at amortised cost,
  • held for trading - measured at fair value with fair value changes charged to net profit or loss,
  • available for sale - measured at fair value with fair value changes taken to equity; and
  • non-trading liabilities - measured at amortised cost.
This will result in a change in the current accounting policy that does not classify financial instruments. Current measurement is at amortised cost, with certain derivative financial instruments not recognised on balance sheet. The future financial effect of this change in accounting policy is not yet known as the classification and measurement process has not yet been fully completed.
Hedge Accounting
Under AASB 139 Financial Instruments: Recognition and Measurement in order to achieve a qualifying hedge, the entity is required to meet the following criteria:
  • Identified the type of hedge - fair value or cash flow;
  • Identify the hedged item or transaction;
  • Identify the nature of the risk being hedged;
  • Identify the hedging instrument;
  • Demonstrate that the hedge has and will continue to be highly effective; and
  • Document the hedging relationship, including the risk management objectives and strategy for undertaking the hedge and how effectiveness will be tested.
The Company has adopted a hedging policy that requires the AASB 139 accounting treatment of any hedge to be confirmed prior to execution of the hedge, and which clearly states that it is the Company's policy that all hedge transactions will qualify for hedge accounting under the Standard.
Deferred exploration expenditure
Under AASB 6 Exploration for and Evaluation of Mineral Resources, the Company will be able to "grandfather" the existing accounting treatments employed for exploration and evaluation of mineral resources.

Specifically, AASB 6 provides that entities with exploration and evaluation costs that elect to continue to recognise and measure exploration and evaluation assets in accordance with the accounting policies they applied in their most recent annual financial information will be considered IFRS compliant. However, entities will only be permitted to carry forward exploration and evaluation costs for an area of interest (as per the grandfathering) after having also applied the Australian equivalent of IAS 36 in respect of any impairment of exploration and evaluation assets.
Share based payments
Under AASB 2 Share based Payments, the Company will be required to determine the fair value of options issued to employees as remuneration and recognise an expense in the Statement of Financial Performance. This standard is not limited to options and also extends to other forms of equity based remuneration. It applies to all share-based payments issued after 7 November 2002 which have not vested as at 1 January 2005. Reliable estimation of the future financial effects of this change in accounting policy is impracticable as the details of future equity based remuneration plans are unknown.
Income taxes
Under the Australian equivalent to IAS 12 Income Taxes, the Company will be required to use a balance sheet liability method which focuses on the tax effects of transactions and other events that affect amounts recognised in either the Statement of Financial Position or a tax-based balance sheet. It is not expected that there will be any material impact as a result of adoption of this standard.

DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of Beaconsfield Gold NL, I state that:
In the opinion of the directors:
(a) the financial statements and notes to the financial statements of the consolidated entity:
(i) give a true and fair view of the financial position as at 31 December 2004 and the performance for the half-year ended on that date of the consolidated entity; and
(ii) comply with Accounting Standard AASB 1029 "Interim Financial Reporting" and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.


On behalf of the Board


D E Clarke
Director

28 February 2005




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