Beaconsfield Gold - Australia's Richest Gold Resource.

High Grade, Low Cost Gold Producer

Interim March 2004 Quarter


Interim Report on Activities to 30 March 2004

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This report has been prepared to update Beaconsfield Gold shareholders ahead of the recommencement of trading on the ASX of the Company's fully-paid ordinary shares (ASX code "BCD"). The December 2003 quarterly report for the Company can be seen on the Company's web site: www.beaconsfieldgold.com.au . The March 2004 quarterly report will be released on or before 30 April 2004.

HIGHLIGHTS

  • New BMJV underground ore reserve drilling program underway with better intersections to date including: 3.9 metres estimated horizontal thickness @ 57.1 g/t gold; 2.3 m @ 86.5 g/t; 3.3 m @ 22.1 g/t; 7.2 m @ 8.3 g/t; 2.2 m @ 23.4 g/t; 1.8 m @ 26.1 g/t and 0.9 m @ 50.0 g/t.

  • BMJV ore reserves at 31 December 2003 of 352,000 ounces. Net increase in ore reserves over the six months from 30 June 2003, allowing for mining depletion, of approximately 66,708 ounces. Average gold per vertical metre for the Tasmania Reef now estimated to be around 1,500 ounces.

  • Beaconsfield Gold profit for the 6 months ending 31 December 2003 (no tax payable) was $4.9 million after providing for depreciation and amortisation of $3.3 million and borrowing costs of $1.4 million.

  • The Receiver and Manager for Beaconsfield Gold, who was appointed on 25 June 2001, retired on 12 March 2004 following the completion of fund raisings totalling $14.5 million ($5.5 million in equity funding and $9.0 million in convertible note debt funding) and the restructuring of the debt facilities with BankWest. BankWest secured debt less cash directly-held by Beaconsfield Gold (which peaked at around $35 million in October 2002) dramatically reduced to less than $6 million.

  • Beaconsfield Gold gold hedging reduced to approximately 34% of current ore reserves. Marked-to-market value of the hedge book at 29 February 2004 of positive $1.1 million.

BEACONSFIELD MINE JOINT VENTURE (BMJV) (Beaconsfield Gold Direct Interest 48.49%)

The participants in the unincorporated BMJV, which operates the Beaconsfield Mine at Beaconsfield in north-east Tasmania, are 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 30% of the fully paid shares in Allstate.

Joint Administrators (Michael Ryan and Tony Woodings of chartered accounting firm, Taylor Woodings, based in Perth, Western Australia) were appointed to Allstate on 8 June 2001. A Receiver and Manager (Garry Trevor of Ferrier Hodgson, Perth office) was appointed to Beaconsfield Gold on 25 June 2001 and retired on 12 March 2004.

UNDERGROUND DIAMOND DRILLING OF THE TASMANIA REEF

The first hole, F1, in the current BMJV underground diamond drilling program (F series) was commenced on 11 December 2003 and completed before the Christmas break. Drilling recommenced on 13 January 2004 and, by the end of January, two LM75 contract diamond drilling rigs were established underground. A total of 42 holes are planned to be be drilled in the current program which is scheduled to be completed in September 2004.

Allstate, as Manager of the BMJV, has to date received assay results for the first 11 holes, F1 through to F10 and F12.

Underground Diamond Drilling Intersections

Hole/
Intersection
(1)
Easting
(m)
Depth
(m)
(2)
Intersection
Length
(m)
E.H.T.
(m)
(3)
Grade
(g/t Au)
F1
2,635
899
2.3
1.4
1.3
F1/FW
2,673
899
0.3
0.2
20.5
F2
2,641
949
0.3
0.1
0.0
F2/FW
2,660
939
1.1
0.9
50.0
F3
2,751
1,070
2.9
2.1
0.8
F4
2,702
946
3.7
2.2
23.4
F4/FW
2,705
942
5.4
3.9
57.1
F5
2,702
898
0.8
0.7
16.5
F5/FW
2,703
898
1.9
1.8
26.1
F6
2,739
1,008
8.7
7.2
8.3
F7
2,738
1,119
3.3
2.7
4.8
F8
2,764
980
2.4
2.2
7.6
F9
2,816
1,119
2.2
1.5
12.9
F9/FW
2,811
1,145
2.3
1.6
6.4
F10
2,793
1,057
4.4
3.3
22.1
F12
2,797
1,004
2.5
2.3
86.5

(1) FW refers to ore splays in the footwall of the reef.
(2) Estimated depth below surface (Hart Shaft collar 2046.5m RL).
(3) E.H.T is the estimated horizontal thickness of the reef intersection.

Holes F1, F2, F4 and F5 were drilled from a cuddy located in the footwall of the Tasmania Reef. They all intersected the reef on the western side of the orebody and they all intersected footwall (FW) splay reef mineralisation in addition to intersecting the main reef. All of these intersections were above the base of the current ore reserves at 1050 mRL (996.5 metres below surface). Holes F1 and F2 were designed to test the western limit of the reef.

Holes F3 and F6 through to F10 and F12 were drilled from two cuddies located in the hangingwall of the Tasmania Reef and intersected the orebody in western positions. The F8 intersection was above the base of the current ore reserves (996.5 metres depth). The balance of these intersections were all below the base of the current ore reserves.

The drilling to date is indicating that the stratigraphy affecting the Tasmania Reef mineralisation is flattening and trending eastwards. While the current drilling program is scheduled to be completed in September 2004, it may be necessary to develop an additional drilling cuddy further to the east in the hangingwall in order to carry out additional drilling to the east and at depth. If the orebody in fact is shifting eastwards at depth, it would result in additional capital costs to establish the necessary fresh air and return air ventilation rises in a more easterly position than previously assumed.

Allstate, as Manager, will next calculate and report BMJV reserves and resources as at 30 June 2004.

ORE RESERVES / RESOURCES

As at 30 June 2003
The BMJV reserves and resources as at 30 June 2003 (as calculated and reported by Allstate as Manager of the BMJV) were:

Ore Reserve

Proven Reserve 162,000 tonnes @ 16.3 g/t Au ( 85,000 ounces contained gold)
Probable Reserve 478,000 tonnes @ 18.5 g/t Au ( 284,000 ounces contained gold)
Total Reserve 640,000 tonnes @ 17.9 g/t Au ( 369,000 ounces contained gold)

Identified Mineral Resource (including Ore Reserve)

Measured Resource 116,000 tonnes @ 25.1 g/t Au ( 94,000 ounces contained gold)
Indicated Resource 376,000 tonnes @ 26.0 g/t Au ( 314,000 ounces contained gold)
Inferred Resource 216,000 tonnes @ 11.4 g/t Au ( 79,000 ounces contained gold)
Total Resource 708,000 tonnes @ 21.4 g/t Au ( 487,000 ounces contained gold)

As at 31 December 2003

The BMJV reserves and resources as at 31 December 2003 (as calculated and reported by Allstate as Manager of the BMJV) were:

Ore Reserve

Proven Reserve 167,000 tonnes @ 16.7 g/t Au ( 90,000 ounces contained gold)
Probable Reserve 492,000 tonnes @ 16.6 g/t Au ( 262,000 ounces contained gold)
Total Reserve 659,000 tonnes @ 16.6 g/t Au ( 352,000 ounces contained gold)

Identified Mineral Resource (including Ore Reserve)

Measured Resource 108,000 tonnes @ 28.5 g/t Au ( 99,000 ounces contained gold)
Indicated Resource 347,000 tonnes @ 25.7 g/t Au ( 287,000 ounces contained gold)
Inferred Resource 188,000 tonnes @ 10.9 g/t Au ( 66,000 ounces contained gold)
Total Resource 643,000 tonnes @ 21.9 g/t Au ( 452,000 ounces contained gold)

The Proven and Probable Reserves were calculated from the Measured and Indicated Resources.

Measured Resource 108,000 tonnes @ 28.5 g/t Au ( 99,000 ounces contained gold)
Indicated Resource 347,000 tonnes @ 25.7 g/t Au ( 287,000 ounces contained gold)
Total Resource 455,000 tonnes @ 26.4 g/t Au ( 386,000 ounces contained gold)

After allowances had been made for mine design parameters and cut-off grade (6 g/t gold), the in-situ ore grade was reduced from 26.4 g/t gold to the diluted reserve grade of 16.6 g/t gold (a reduction of 9.8 g/t or 37%).

Reconciliation between 30 June 2003 and 31 December 2003 Ore Reserves

Total gold milled by the BMJV in the six months to 31 December 2003 was estimated to be 83,708 ounces. Subtracting this total from the ore reserves at 30 June 2003 (369,000 ounces) gives 285,292 ounces.

As the ore reserves at 31 December 2003 were 352,000 ounces, there was a net increase in ore reserves over the six months, allowing for the mining depletion, of approximately 66,708 ounces. The majority of the increase is understood by Beaconsfield Gold to have come from a reef splay in the footwall of the Tasmania Reef on the western side of the orebody. Holes F1, F2, F4 and F5 of the current drilling program (refer earlier section) intersected this reef splay with the best result being in F4 (3.9 metres estimated horizontal thickness at 57.0 g/t gold).

ESTIMATE OF GOLD PER VERTICAL METRE

The following table summarises the actual production figures for the Beaconsfield Mine up to 31 December 2003, the date as at which the current ore reserves were calculated by Allstate.

Quarter
Ending
Ore
Mined
(t)
Ore
Milled
(t)
Head
Grade
(g/t) (1)
Gold
Milled
(oz)
Gold
Recovery
(%) (2)
Gold
Produced
(oz)
1999 September
17,470
7,343
10.8
2,550
N/A
451
1999 December
28,684
30,986
12.3
12,254
69.4
8,501
2000 March
34,015
51,103
12.9
21,195
66.4
14,083
2000 June
44,159
49,699
13.3
21,252
69.4
14,754
2000 September
51,185
51,987
12.3
20,558
83.0
17,062
2000 December
51,790
50,107
16.0
25,776
71.4
18,406
2001 March
46,689
45,899
13.9
20,512
88.9
18,245
2001 June
55,007
53,503
12.9
22,190
83.9
18,620
2001 September
49,763
51,760
14.7
24,513
86.4
21,174
2001 December
52,891
51,984
14.6
24,318
98.4
23,931
2002 March
47,308
46,819
15.4
23,293
98.7
22,990
2002 June 50,471 52,985 13.0 22,194 100.8 22,374
2002 September 55,551 55,454 13.0 23,216 89.9 20,880
2002 December 52,908 57,367 16.6 30,617 86.9 26,618
2003 March 56,062 58,783 15.7 29,672 89.6 26,582
2003 June 56,800 56,304 18.6 33,670 94.0 31,656
2003 September 55,661 60,378 20.9 40,571 95.1 38,578
2003 December 64,364 60,987 22.0 43,137 93.0 40,104




441,488


Ore Reserves at 31 December 2003


352,000

Total Gold 460m - 1,000m Depth


793,488

Gold per Vertical Metre (540m)


1,469

1. Mill reconciled head grade.
2. Gold recovery excluding changes in gold in circuit.

Total gold milled to 31 December 2003 is calculated at 441,488 ounces.

The current mining phase at Beaconsfield commenced under the deepest historical level at 455 metres depth. Assuming an average 5 metre pillar has been left below the 455 metre level, total gold mined to date in the current phase plus current gold ore reserves (a total of conservatively 793,488 ounces) fit in the interval approximately 460 metres depth to approximately 1,000 metres depth, that is a vertical depth of approximately 540 metres.

The average gold per vertical metre is therefore approximately 1,469 ounces. Each 100 metre vertical extension of the Tasmania Reef could therefore potentially yield some 147,000 ounces if the current tenor of the orebody continued at depth.

UPDATED BEACONSFIELD MINE PERFORMANCE

Mill Throughput

Mill throughput for the December 2003 quarter was a record 60,987 tonnes (241,959 tpa rate).
Total mill throughput for the months of January and February 2004 was 37,360 tonnes (227,300 tpa rate), reflecting a slow start in January.

Head Grade

Average head grade for the December 2003 quarter was a quarterly record 22.0 g/t gold.
Average head grade for the months of January and February 2004 was 20.5 g/t gold.

Gold Recovery

Average gold recovery in the ore treatment plant, excluding changes in gold in circuit, for the December 2003 quarter was 93.0%.
Average gold recovery for the months of January and February 2004 was 94.3%.

Gold Production

Gold production for the December 2003 quarter was a quarterly record at 40,104 ounces (159,108 ounces per year rate).

Total gold production for the months of January and February 2004 was 23,239 ounces (141,371 ounces per year rate).

BMJV Expenditure per Ounce

Total direct operating expenditure per ounce of gold production for the December 2003 quarter was A$231 per ounce. Total capital expenditure per ounce for the quarter was A$29 per ounce. Total expenditure (direct operating plus capital) per ounce for the quarter was A$260 per ounce.

Average total direct operating expenditure per ounce of gold production for the months of January and February 2004 was A$274 per ounce. Average total capital expenditure per ounce for the two months was A$76 per ounce. Total expenditure (direct operating plus capital) per ounce for the two months was A$350 per ounce, reflecting principally the lower rate of gold production at the start of the calendar year and the increased capital costs including the underground diamond drilling program.

EXPLORATION JOINT VENTURE BETWEEN DDV AND THE BMJV

The exploration joint venture between Diamond Ventures NL (DDV) and the BMJV has been outlined in previous quarterly reports.

DDV has not released any exploration information subsequent to the December 2003 quarter.

BEACONSFIELD GOLD CORPORATE

RETIREMENT OF THE RECEIVER AND MANAGER

The Receiver and Manager for Beaconsfield Gold, Mr Garry Trevor of Ferrier Hodgson, who was appointed on 25 June 2001, retired on 12 March 2004 following completion of fund raisings totalling $14.5 million.

Fund Raisings Completed

On 12 March 2004, the Company completed $5.5 million of equity funding provided by "sophisticated investor" clients of Tolhurst Noall Limited. The first $0.431 million of funding had been provided to pay for all the corporate costs necessarily incurred by the Beaconsfield Gold board up until the retirement of the Receiver and Manager and this high-risk funding was converted into Beaconsfield Gold fully-paid ordinary shares at $0.10 per share. A total of approximately 4.312 million shares were issued to cover this initial funding.

The balance of the agreed funding, $5.069 million, was subscribed at $0.23 per Beaconsfield Gold fully-paid ordinary share to facilitate the necessary restructuring of the company's finances with BankWest. A total of approximately 22.038 million shares were issued to cover this secondary funding. For the total agreed equity funding of $5.5 million, approximately 26.350 million shares were issued.

On 12 March 2004, the Company also raised $9 million through the issue of 30 million unlisted convertible notes to Gold Investors Pty Ltd, each note convertible into a fully paid Beaconsfield Gold share for $0.30 by 30 June 2006.

Principal terms of the convertible notes include the following:

  • Interest of 9.0% per annum, interest payable each six months in arrears until conversion or redemption;
  • Notes secured by a second ranking charge (behind BankWest) over the fixed and floating assets of Beaconsfield Gold;
  • Beaconsfield Gold must redeem the notes in full on 30 June 2006 unless the notes have been converted; and
  • Notes can be converted at any time during their life.

Restructuring of Debt Facilities with BankWest

Net secured debt for Beaconsfield Gold (being BankWest secured debt plus accrued interest less cash held by the Receiver and Manager) had been reduced to $22.7 million at 31 December 2003, having been $32.8 million on 25 June 2001, when the Receiver and Manager was appointed, and having peaked at around $35.0 million in October 2002. $4.5 million of the secured debt was in the form of a convertible note which could be converted into a maximum of 9.0 million fully paid Beaconsfield Gold shares at $0.50 per share by 31 December 2004.

Following the fund raisings of 12 March 2004 and the restructure of the BankWest facililities, Beaconsfield Gold was directly holding a total of approximately $2.5 million in cash and secured debt with BankWest had been dramatically reduced to approximately $8.3 million.

Under the restructuring, the $4.5 million convertible note with BankWest was cancelled and Beaconsfield Gold issued 6.5 million unlisted options to BankWest with an exercise price of $0.30 each on or before 30 June 2006. If BankWest exercises all of the options in the future, the additional funds raised by Beaconsfield Gold would be $1.95 million.

CONVERSIONS OF CONVERTIBLE NOTES

On 29 March 2004, the Company received conversion notices for 22,866,667 of the convertible notes on issue with a total face value of $6,860,000. The resultant 22,866,667 fully-paid ordinary shares in Beaconsfield Gold were issued on 30 March 2004.

GOLD HEDGING FOR BEACONSFIELD GOLD

The Company initially sold forward 240,000 ounces of gold in October 1998 in a hedging arrangement with BankWest. The remaining hedge book at 29 February 2004 was as follows.

Beaconsfield Gold Hedge Book at 29 February 2004

Maturity
Ounces
A$ Price
@ 1.5% p.a.
Lease Rate
A$ Value of
Hedging
Hedging
31-Mar-04
1,211.948
536.550
650,270.70
30-Apr-04
5,800.000
536.550
3,111,990.00
31-May-04
5,800.000
536.550
3,111,990.00
30-Jun-04
6,400.000
536.550
3,433,920.00
30-Jul-04
8,000.000
485.690
3,885,522.71
31-Aug-04
1,929.068
567.000
1,093,781.56
30-Sep-04
1,800.000
567.000
1,020,600.00
29-Oct-04
1,800.000
567.000
1,020,600.00
30-Nov-04
1,800.000
567.000
1,020,600.00
31-Dec-04
4,225.000
567.500
2,397,687.50
31-Jan-05
4,150.000
571.000
2,369,650.00
28-Feb-05
4,150.000
571.000
2,369,650.00
31-Mar-05
4,200.000
572.870
2,406,054.00
29-Apr-05
4,200.000
571.410
2,399,922.00
31-May-05
2,680.863
574.180
1,539,297.92
Total/Average
58,146.88
547.433
31,831,536.39

The marked-to-market value of the hedge book at 29 February 2004, when the spot price of gold was A$512.26, was positive $1.1 million.

Gold Hedging as a Percentage of Ore Reserves

The current BMJV ore reserves (as at 31 December 2003) are 352,000 ounces so that Beaconsfield Gold's 48.49% direct interest is approximately 170,700 ounces. As a percentage of ore reserves therefore, Beaconsfield Gold is currently approximately 34% hedged.

BBR CLAIMS

In August 2000, Allstate (as Manager of the BMJV) lodged claims in respect of losses suffered by the BMJV participants associated with the design, procurement, construction and commissioning of the ore treatment plant at Beaconsfield by Batepro Australia Pty Ltd and Bateman Brown & Root Engineering and Construction Pty Ltd (BBR).

The final arbitration hearing was scheduled to commence on 12 May 2003. On 30 April 2003, the solicitors for BBR notified Allstate that QBE, the professional indemnity insurer, was considering withdrawing indemnity over the claims. Subsequently, the solicitors for BBR advised that neither QBE nor BBR were prepared to continue funding the defence of the arbitration. Furthermore, the solicitors advised that BBR no longer trades nor has any assets.

After a short delay, the arbitration commenced on 13 May 2003 and proceeded on 20 May 2003 on an ex parte basis. The BMJV participants tendered their final submission to the arbitrator.
On 27 January 2004, the ASX released the following announcement by Allstate Explorations NL (subject to deed of company arrangement):

"Interim Arbitration Award in Favour of the Beaconsfield Mine Joint Venturers

"Allstate Explorations NL (subject to deed of company arrangement) ("ALX"), as manager of the Beaconsfield Mine Joint Venture, today announces that an interim arbitration award was made in favour of the Beaconsfield Mine Joint Venturers (ALX, Beaconsfield Operations Pty Limited, Beaconsfield Tasmania Pty Limited, Beaconsfield Gold NL, Allstate Prospecting Pty Limited and ACN 070 164 653 Pty Limited) on 22 January 2004.

"As reported in ALX's financial report for the year ended 30 June 2003 (released to ASX on 22 October 2003), arbitration proceedings were brought by the Beaconsfield Mine Joint Venturers ("Claimants") in relation to a dispute with Batepro Australia Pty Limited and Brown & Root Engineering & Construction Pty Limited (now renamed A.C.N. 005 585 795 Pty Ltd) ("Respondents"). The dispute arose in connection with a contract between the Claimants and the Respondents under which the Respondents undertook to design, supply, construct and commission a gold treatment plant and backfill plant at the Beaconsfield Mine, Tasmania. The Claimants alleged amongst other things, delay, unsatisfactory design and construction, major defects and omissions in the works and failure to satisfy performance tests.

"The arbitrator, Mr J Tyrill, found that the Respondents are jointly and severally liable to the Claimants for $60,366,785 together with interest after 17 January 2004 at the rate of $29,292 per week. The Arbitrator also found that Respondents' cross claims against the Claimants fail. The Arbitrator reserved his award on the question of costs and has invited the parties' submissions on this.

"As reported in ALX's 2003 financial report, the Respondents have asserted that they have no funds to meet the cost of any award. The Respondents' professional indemnity insurer has withdrawn coverage with respect to the claim. The insurer has also indicated that, in any event, any claim would be capped at $20 million.

"It is currently unclear the extent to which the award will be able to be successfully enforced. ALX will seek legal advice on its position and will then determine the appropriate course of action in consultation with the other Beaconsfield Mine Joint Venturers."

BOARD CHANGES

On 10 March 2004, Mr John Miedecke retired as a non-executive director of the Company after 11 years of service. He had been one of the founding directors of Beaconsfield Gold when it listed on the ASX in March 1993 and first became involved with the Beaconsfield Mine while working for Amax Exploration (Australia) as an environmental engineer in late 1979.

Following the retirement of John Miedecke, three additional non-executive directors were appointed to the Board, Mr Bede Noonan, Mr Bill Tsingos and Miss Elizabeth Parkin.

Mr Bede Noonan

Mr Noonan obtained a BA degree, majoring in Economics, from the University of Melbourne in 1989. After a period travelling and working overseas, he has worked for the last 12 years with Geotech Pty Ltd, one of Australia's leading civil engineering design and construction companies, specialising in ground works, tunnels, bridges and dams. Commencing with Geotech as the Company Accountant in 1992, he became General Manager in 1996 and Managing Director, his current position, in 2000. Mr Noonan is also a Director and Company Secretary of Coleman Rail Pty Ltd, an associated company that specialises in railway construction and maintenance. He is also responsible for the general business development of Coleman Rail, including reviewing overseas expansion projects.

Both the Geotech and Coleman Rail businesses involve Mr Noonan in the financial, legal and administrative management of diverse and complex projects, clients and contracts as well as managing over 150 employees and an extensive fleet of civil construction equipment. Total turnover for the two businesses has grown to around $40 million per year.

Mr William Tsingos

Mr Tsingos has for the past 26 years been running his own international trading business dealing in electrical and engineering products predominantly to government utilities and public companies involved in the mining, transport, heavy engineering and construction industries. He was previously appointed to the board of Beaconsfield Gold NL during the Company's period of receivership on 10 September 2001 and retired on 5 August 2002.

Ms Elizabeth Parkin

Ms Parkin holds a Bachelor of Business (Accounting) degree and is a member of the Institute of Chartered Accountants, the Securities Institute of Australia and the Australian Institute of Company Directors. She has over 20 years experience in a range of corporate finance, business analyst and business advisory roles. She has operated her own corporate finance and general business advisory company since 1997. Prior to its establishment, she was a director with KPMG Corporate Finance.

Ms Parkin is a director of Port of Melbourne Corporation and chair of its Audit and Risk Committee; a director of Yarra Valley Water and a member of its Audit and Risk Committee; a board member of North East Region Water Authority and chair of its Audit, Risk and Finance Committee; a director of First Samuel and a member of its Audit and Risk Committee; a director and treasurer of 3MBS, a volunteer-operated, not-for-profit broadcaster of classic music; and a trustee of the Northcote Trust, a philanthropic organization that helps young people further their education. She is also employed part time by KPMG.

Remuneration

As part of their remuneration packages as directors, shareholders will be asked to approve at the next general meeting the issue of 400,000 partly paid shares to each of Mr Noonan, Mr Tsingos and Ms Parkin at a price of $0.35, payable as to $0.01 on allotment.

ACCOUNTS FOR THE HALF YEAR ENDING 31 DECEMBER 2003

The reviewed accounts and report for the half year ending 31 December 2003 were released to the ASX by the Company on 15 March 2004. The summary consolidated statements, as follows, clearly illustrate the turnaround in the operating performance for the Company.

Consolidated Statement of Financial Performance

HALF-YEAR ENDED 31 DECEMBER 2003
CONSOLIDATED

2003
$'000
2002
$'000
Revenue from operating activities
20,556
12,584
Other revenue from ordinary activities
0
54
Total revenue from ordinary activities
20,556
12,638
Costs of production
9,599
8,711
Depreciation and amortisation
3,327
2,588
Administration
1,373
914
Borrowing costs
1,383
1,845
Total expenses from ordinary activities
15,682
14,058
PROFIT / (LOSS) FROM ORDINARY ACTIVITIES BEFORE
4,874
(1,420)
INCOME TAX EXPENSE


INCOME TAX EXPENSE RELATING TO ORDINARY ACTIVITIES
0
0
PROFIT / (LOSS) FROM ORDINARY ACTIVITIES AFTER INCOME
4,874
(1,420)
TAX EXPENSE


NET PROFIT ATTRIBUTABLE TO OUTSIDE EQUITY INTEREST
0
0
NET PROFIT ATTRIBUTABLE TO MEMBERS OF BEACONSFEILD GOLD NL
4,874
(1,420)
Net increase/(decrease) in asset revaluation reserve
0
0
Net exchange difference on translation of financial statements of foreign controlled entity
0
0



TOTAL REVENUES, EXPENSES AND VALUATION ADJUSTMENTS ATTRIBUTABLE TO MEMBERS OF BEACONSFEILD GOLD NL AND RECOGNISED DIRECTLY IN EQUITY
0
0



TOTAL CHANGES IN EQUITY OTHER THAN THOSE RESULTING FROM TRANSACTIONS WITH OWNERS
0
0
Basic earnings per share (cents per share)
6.4
(1.9)
Diluted earnings per share (cents per share)
6.4
(1.9)
Franked dividends per share (cents per share)
0
0
Weighted average number of shares
76,417,843
75,677,102

Consolidated Statement of Financial Position

HALF-YEAR ENDED 31 DECEMBER 2003
CONSOLIDATED

AS AT
31-Dec-03
$'000
AS AT
30-Jun-03
$'000
CURRENT ASSETS


Cash assets
3,733
2,966
Receivables
997
459
Inventories
1,095
1,667
TOTAL CURRENT ASSETS
5,825
5,092
NON-CURRENT ASSETS


Other financial assets
162
162
Property, plant & equipment
10,370
11,539
Exploration, evaluation & development
11,698
12,694
Other
106
122
TOTAL NON-CURRENT ASSETS
22,336
24,517
TOTAL ASSETS
28,161
29,609
CURRENT LIABILITIES


Payables
4,671
6,265
Interest bearing liabilities
26,572
31,533
Provisions
649
505
TOTAL CURRENT LIABILITIES
31,892
38,303
NON-CURRENT LIABILITIES


Interest-bearing liabilities
154
210
Provisions
348
303
Other
329
329
TOTAL NON-CURRENT LIABILITIES
831
842
TOTAL LIABILITIES
32,723
39,145
NET ASSETS
(4,562)
(9,536)
EQUITY


Share capital
60,636
60,536
Accumulated losses
(65,198)
(70,072)
TOTAL EQUITY
(4,562)
(9,536)

Consolidated Statement of Cash Flows

HALF-YEAR ENDED 31 DECEMBER 2003
CONSOLIDATED

2003
$'000
2002
$'000
CASH FLOWS FROM OPERATING ACTIVITIES


Cash receipts in the course of operations
20,574
12,584
Cash payments in the course of operations including borrowing costs
(12,745)
(10,154)
Interest
0
54
NET CASH FLOWS FROM OPERATING ACTIVITIES
7,829
2,484
CASH FLOWS FROM INVESTING ACTIVITIES


Purchase of Plant & Equipment
0
(232)
Mine Development Expenditure
(1,162)
(686)
Other


NET CASH FLOWS USED IN INVESTING ACTIVITIES
(1,162)
(918)



CASH FLOWS FROM FINANCING ACTIVITIES


Proceeds from issue of shares
100
0
Repayment of Borrowings
(6,000)
(2,000)
NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
(5,900)
(2,000)
NET INCREASE / (DECREASE) IN CASH HELD
767
(434)
Add opening cash brought forward
2,966
3,088
CLOSING CASH CARRIED FORWARD
3,733
2,654

PRO-FORMA STATEMENT OF FINANCIAL POSITION

The equity funding, the convertible notes funding (and the subsequent conversions) and the restructure of the BankWest facililities of 12 March 2004 will have a significant impact on the audited accounts for the year ending 30 June 2004. The following pro-forma statement of financial position has been prepared to illustrate the impact on the financial position of the Beaconsfield Group as at 31 December 2003 after taking into account the fund raisings and the restructure of the BankWest facilities as if they had occurred on 31 December 2003.

The pro-forma statement of financial position also takes into account the conversions of a total of 22,866,667 of the convertible notes into 22,866,667 fully-paid ordinary Beaconsfield Gold shares, which took place on 30 March 2004, as if those conversions had occurred on 31 December 2003.

Pro-Forma Statement of Financial Position


CONSOLIDATED
Actual
31 Dec 2003
Reviewed
$'000
Adjustments
(1)
$'000
Pro- Forma
31 Dec 2003
Reviewed
$'000
CURRENT ASSETS



Cash assets
3,733

3,733
Receivables
997

997
Inventories
1,095

1,095
TOTAL CURRENT ASSETS
5,825

5,825
NON-CURRENT ASSETS



Other financial assets
162

162
Property, plant & equipment
10,370

10,370
Exploration, evaluation & development
11,698

11,698
Other
106

106
TOTAL NON-CURRENT ASSETS
22,336

22,336
TOTAL ASSETS
28,161

28,161




CURRENT LIABILITIES



Payables
4,671
(50)
4,621
Interest bearing liabilities
26,572
(19,969)
6,603
Provisions
649

649
TOTAL CURRENT LIABILITIES
31,892
(20,019)
11,873
NON-CURRENT LIABILITIES



Interest-bearing liabilities
154
4,640
4,794
Provisions
348

348
Other
329

329
TOTAL NON-CURRENT LIABILITIES
831
4,640
5,471
TOTAL LIABILITIES
32,723
(15,379)
17,344
NET ASSETS
(4,562)
15,379
10,817
EQUITY



Share capital
60,636
12,260
72,896
Accumulated losses
(65,198)
3,119
(62,079)
TOTAL EQUITY
(4,562)
15,379
10,817

(1) Basis of Preparation of the Pro-Forma Statement of Financial Position
The pro-forma statement of financial position has been prepared in accordance with the measurement and recognition requirements, but not all of the disclosure requirements, of Accounting Standards and other mandatory financial reporting requirements in Australia, and the accounting policies as set out in the Annual Financial Report of Beaconsfield Gold NL for the year ended 30 June 2003. The pro-forma statement of financial position as at 31 December 2003 has been prepared to include the effects of the following transactions as if they had occurred on 31 December 2003:

  • Share capital increased by $5.4 million as a result of the completion of the $5.5 million of equity funding announced on 12 March 2004 ($0.1 million of the funding having been completed pre 31 December 2003). The proceeds from this equity raising have been applied to the reduction of the BankWest debt ($5.069 million) and the payment of costs associated with the restructure of the Beaconsfield Group;
  • Commissions paid to Tolhurst Noall amounting to $0.35 million in respect of the total $5.5 million equity funding have been settled via the issue of 1,521,700 fully paid Beaconsfield Gold shares at $0.23 each on 30 March 2004;
  • Non-current interest-bearing liabilities increased by $9.0 million as a result of the issue of 30 million convertible notes announced on 12 March 2004. The proceeds from the issue of the convertible notes have been applied to the reduction of the BankWest debt;
  • Non-current interest-bearing liabilities decreased by $6.86 million as a result of the conversion of 22,866,667 convertible notes into fully paid Beaconsfield Gold shares at $0.30 per share announced on 30 March 2004;
  • As a result of the restructure of the BankWest secured debt, $4.0 million in accrued interest payable has been restructured such that the payment is contingent and only payable to the extent of any further recoveries by Beaconsfield from the claims made against Batepro Australia Pty Ltd and Bateman, Brown & Root Engineering and Construction Ltd (BBR);
  • The recovery of $0.65 million from a bank guarantee that had been provided by BBR, the proceeds of which were applied against the payment of fees payable in relation to the restructure;
  • In accordance with the terms of the restructured financing facility with BankWest, $2.5 million of the outstanding debt has been reclassified to non-current; and
  • Accumulated losses decreased as a result of the reversal of the $4.0 million interest payable to BankWest and the recovery from the BBR bank guarantee, offset by approximately $1.25 million of costs incurred post 31 December 2003 by Beaconsfield Gold as a direct result of the pro-forma transactions (including BankWest fees and legal fees).

The pro-forma statement of financial position has been reviewed by Ernst & Young and their unqualified review statement is attached.

Independent Review Report on the Pro-Forma Statement of Financial Position

Scope

The financial report and directors' responsibility

The statement of financial position comprises the pro-forma Consolidated Statement of Financial Position of the Beaconsfield Group, which comprises Beaconsfield Gold NL (the company) and its controlled entities, as at 31 December 2003.

The directors of the company are responsible for preparing the pro-forma Consolidated Statement of Financial Position that presents fairly the financial position of the Beaconsfield Group, in accordance with the basis of preparation and the measurement and recognition requirements, but not all of the disclosure requirements, of Accounting Standards and other mandatory financial reporting requirements in Australia, as if the pro-forma transactions set out in the Interim Report had occurred. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial information.

Review approach

The pro-forma Consolidated Statement of Financial Position has been prepared for inclusion in an Interim Report dated 31 March 2004 to be lodged by the company with the Australian Stock Exchange. We conducted an independent review of the pro-forma Consolidated Statement of Financial Position in order to make a statement about it. Our review was conducted in accordance with Australian Auditing Standards applicable to review engagements, in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the pro-forma Consolidated Statement of Financial Position of the Beaconsfield Group, does not present fairly the Beaconsfield Group's financial position as at 31 December 2003 as if the pro-forma transactions set out in Interim Report had occurred at that date.

A review is limited primarily to inquiries of company personnel and analytical procedures applied to the financial data. We have also determined whether the pro-forma transactions described in the Interim Report form a reasonable basis for the preparation of the pro-forma Consolidated Statement of Financial Position. These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Independence

We are independent of the company, and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Statement

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the pro-forma Consolidated Statement of Financial Position of the Beaconsfield Group, comprising Beaconsfield Gold NL and its controlled entities, does not present fairly the Beaconsfield Group's financial position at 31 December 2003 as if the pro-forma transactions set out in the Interim Report had occurred at that date, in accordance with the basis of preparation and the measurement and recognition requirements, but not all of the disclosure requirements, of Accounting Standards and other mandatory financial reporting requirements in Australia.

Ernst & Young
Melbourne
31 March 2004

CURRENT BEACONSFIELD GOLD ISSUED SECURITIES

The issued securities for Beaconsfield Gold following the fund raisings are as follows:

Type of Securities Number of Securities ASX Code
Fully-Paid Ordinary Shares
126,415,744
BCD
Unlisted Convertible Notes ($0.30 each by 30/6/2006)
7,133,333

BankWest Unlisted Options ($0.30 each by 30/6/2006)
6,500,000

Unlisted Partly-Paid Shares ($0.35 paid to $0.01)
3,850,000

Drysdale Metals Pty Ltd, David McLauchlan and Frank Hudson have each given Beaconsfield Gold substantial holder notices disclosing voting power in respect of the numbers of fully paid ordinary shares of Beaconsfield Gold set out below. Based on the total number of issued fully paid ordinary shares at 31 March 2004 of 126,415,744, Beaconsfield Gold has calculated that those numbers of shares represent the following voting power percentages. Following the issue of fully paid ordinary shares on 30 March 2004, Beaconsfield Gold expects that Acorn Capital Limited will give Beaconsfield Gold a substantial holder notice disclosing voting power in respect of 9,333,333 fully paid ordinary shares representing voting power of 7.38%.

Substantial Holder
Number of Shares
%Voting Power
Drysdale Metals Pty Ltd
9,106,883
7.20%
David McLauchlan
6,358,429
5.03%
Frank Hudson
5,534,782
Now less than 5%
Acorn Capital Limited
9,333,333
7.38%

Graphs 1 and 2 show the Beaconsfield Gold share price and market capitalisation respectively since listing on the ASX in March 1993. Both graphs show the commencement of gold production in September 1999 which heralded the protracted commissioning problems in the ore treatment plant and, to a lesser extent, in the mine. They also show the point at which trading in the shares on the ASX was suspended. The market capitalisation graph has been adjusted for the shares issued up until 30 March 2004, based on the last sale price for the shares on the ASX in June 2001 of $0.23.

TENEMENTS

Beaconsfield Gold has interests in the following tenements in the Beaconsfield area.

BMJV Tenements (Beaconsfield Gold 48.49% Direct Interest)

Description
Licence Number
Area
% Interest
Beaconsfield Lease *
1669P/M
554 hectares
48.49
Beaconsfield Lease *
6M/2000
29 hectares
48.49
Beaconsfield Lease Application *
1758 P/M
2 hectares
48.49
Beaconsfield Lease Application *
1M/2004
18 hectares
48.49
Beaconsfield Lease Application
1767 P/M
594 hectares
48.49
Beaconsfield Retention Licence
RL 01/1999
2 sq km
48.49
Anderson's Creek Exploration Licence
EL 02/2001
55 sq km
48.49
Salisbury Hill Exploration Licence
EL 20/1994
21 sq km
48.49

* To be incorporated into Lease 1767P/M when it is granted.

Beaconsfield Gold 100% Owned Exploration Licences

Description
Licence Number
Area
% Interest
Beaconsfield Exploration Licence
EL 12/1999
8 sq km
100.0
Beaconsfield Exploration Licence
EL 27/2000
3 sq km
100.0
Beaconsfield Exploration Licence
EL 30/1997
5 sq km
100.0
Beaconsfield Exploration Licence
EL 07/2000
19 sq km
100.0

INTERNET

Shareholders are reminded that ASX releases (including all quarterly, half-yearly and annual reports), can be seen on the company's web site:

www.beaconsfieldgold.com.au

Shareholders who wish to receive Beaconsfield Gold ASX releases by e-mail are encouraged to contact the company on: beaconsfieldgold@bigpond.com


Yours faithfully
Mike Trumbull
B.E. (Mining, First Class Honours), M.B.A., F.AusIMM
Managing Director




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