SOLOMON GOLD PLC
HALF YEAR FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
Corporate Information
DIRECTORS
Cameron Wenck (Non-Executive Chairman)
Nicholas Mather (Chief Executive Officer)
Brian Moller (Non-Executive Director)
Robert Weinberg (Non-Executive Director)
John Bovard (Non-Executive Director)
COMPANY SECRETARY
Karl Schlobohm
REGISTERED OFFICE
7 Pilgrim Street
London EC4V 6LB
United Kingdom
Registered Number 5449516
AUSTRALIAN OFFICE
Level 5, 60 Edward Street, Brisbane QLD 4000
Phone: + 61 7 3303 0660 Fax: +61 7 3303 0681
Email: info@solomongold.com
Web Site: www.solomongold.com
AUDITORS
PKF (UK) LLP
Farringdon Place, 20 Farringdon Road
London EC1M 3AP
United Kingdom
NOMINATED ADVISOR
RFC Corporate Finance Ltd
Level 14, 19-31 Pitt Street
Sydney NSW 2000
Australia
BROKER
Fairfax IS Plc
46 Berkeley Square, Mayfair
London W1J 5AT
United Kingdom
BANKERS
Macquarie Bank Ltd (Brisbane Branch)
345 Queen Street
Brisbane QLD 4000
Australia
SOLICITORS
Faegre & Benson LLP
7 Pilgrim Street, London EC4V 6LB
United Kingdom
AUSTRALIAN SOLICITORS
Hopgood Ganim
1 Eagle Street
Brisbane QLD 4000
Australia
REGISTRARS
Computershare Investor Services plc
The Pavilions, Bridgwater Road
Bristol BS99 7NH
United Kingdom
DIRECTORS' REPORT
Your Directors present their report on the company and its controlled entities for the half year ended 31 December 2010. Solomon Gold plc is a public limited company incorporated in England and Wales.
DIRECTORS
The names of the Directors in office at any time during or since the end of the period are:
Cameron Wenck (Non-Executive Chairman)
Nicholas Mather (Chief Executive Officer)
Brian Moller (Non-Executive Director)
Robert Weinberg (Non-Executive Director)
John Bovard (Non-Executive Director)
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
PRINCIPAL ACTIVITIES
The principal activities of Solomon Gold plc (the "Company") and its subsidiaries (together "Solomon Gold" or the "Group") are gold and mineral exploration in the Solomon Islands and Queensland, Australia.
Review and results of operations
During the reporting period further ground based surface sampling commenced over the Fauro Island Project (100% owned by Solomon Gold), which identified seven prospects. The best results were up to 169g/t gold, 0.35% copper and 0.43% molybdenum. Drilling commenced at Fauro on 23 December 2010 on the Meriguna Prospect. Drilling will continue through 2011, as part of a 9,900m drilling program.
At the Guadalcanal Joint Venture Project (Newmont will earn into 51% of the Project by spending US$6million by 4 March 2012, and can elect to increase this to 70% by spending a further US$6.0million in a further two-years) ground based exploration continued over the five Projects. Drilling commenced at Koloula, part of a 3,000m program which was completed before Christmas 2010.
Resource definition drilling continues on the Rannes Project (100% owned by Solomon Gold), with encouraging results, which will enhance the 201,648oz Inferred Resource that was announced in June 2010. At the Mt Perry Project (100% owned by Solomon Gold), drilling continued on known prospects and it is envisaged that a maiden resource will be announced in 2011.
Matters subsequent to the half yearly financial period
The Directors are not aware of any significant change in the state of affairs of the Company after the balance date that is not covered in this report.
Auditors independence declaration
The Auditor's Independence Declaration under s307c of the Corporations Act 2001 forms part of the Directors' Report and can be found on page 14.
Signed in accordance with a resolution of the board of Directors.
Nicholas Mather
Director
Brisbane
18 March 2011
Consolidated Statement of Comprehensive Income
for the half year ended 31 December 2010
|
|
|
|
|
|
2010 |
2009 |
|
Notes |
A$ |
A$ |
|
|
|
|
Revenue |
|
54,193 |
152,198 |
|
|
|
|
Administration and consulting expenses |
|
603,253 |
434,545 |
Borrowing cost expenses |
|
39,285 |
- |
Depreciation and amortisation expense |
|
34,007 |
23,783 |
Employee benefit expenses |
|
325,336 |
115,443 |
Exploration expenditure written-off |
|
85,379 |
- |
Legal expenses |
|
44,583 |
15,670 |
Share based payments expense |
|
- |
143,796 |
Other expenses |
|
- |
333,307 |
Operating loss before income tax |
|
(1,077,650) |
(914,346) |
Income tax expense |
|
- |
- |
Loss for the period |
|
(1,077,650) |
(914,346) |
Other comprehensive income |
|
- |
- |
Total comprehensive loss for the period |
|
(1,077,650) |
(914,346) |
|
|
|
|
|
|
2010 |
2009 |
|
Notes |
cents |
cents |
Basic and diluted loss per ordinary share |
|
|
|
- basic and diluted |
4 |
(0.4) |
(1.0) |
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Consolidated Statement of Financial Position
at 31 December 2010
|
|
31 December |
30 June |
|
|
|
2010 |
2010 |
|
|
Notes |
A$ |
A$ |
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
5 |
19,883,354 |
219,811 |
|
Other receivables and prepayments |
|
274,946 |
188,669 |
|
Other current assets |
|
127,693 |
9,005 |
|
Total current assets |
|
20,285,993 |
417,485 |
|
Non-current assets |
|
|
|
|
Other financial assets |
|
70,660 |
63,160 |
|
Receivables |
|
327,786 |
126,056 |
|
Investments in available-for-sale securities |
|
8,000 |
- |
|
Property, plant and equipment |
|
343,303 |
247,648 |
|
Intangible assets |
6 |
37,165,304 |
33,406,506 |
|
Total non-current assets |
|
37,915,053 |
33,843,370 |
|
Total assets |
|
58,201,046 |
34,260,855 |
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
742,899 |
2,159,778 |
|
Lease liabilities |
|
37,538 |
24,069 |
|
Total current liabilities |
|
780,437 |
2,183,847 |
|
Non-current liabilities |
|
|
|
|
Lease liabilities |
|
130,103 |
34,327 |
|
Total non-current liabilities |
|
130,103 |
34,327 |
|
Total liabilities |
|
910,540 |
2,218,174 |
|
Net assets |
|
57,290,506 |
32,042,681 |
|
Equity |
|
|
|
|
Issued capital |
7 |
63,459,244 |
37,133,769 |
|
Reserves |
|
427,393 |
1,070,805 |
|
Accumulated losses |
|
(6,596,131) |
(6,161,893) |
|
Total equity |
|
57,290,506 |
32,042,681 |
|
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
for the half year ended 31 December 2010
|
Notes |
Share capital A$ |
Share option reserve A$ |
Accumulated losses A$ |
Total A$ |
Balance at 1 July 2009 |
|
21,952,793 |
1,411,570 |
(4,396,800) |
18,967,563 |
Total comprehensive loss for the period |
|
- |
- |
(914,346) |
(914,346) |
Transactions with owners in their capacity as owners |
|
|
|
||
New share capital subscribed |
|
11,053,871 |
- |
- |
11,053,871 |
Share Issue costs |
|
(80,826) |
- |
- |
(80,826) |
Employee share option scheme: |
|
|
|
|
|
- value of services provided |
|
- |
72,482 |
- |
72,482 |
Balance 31 Dec 2009 |
|
32,925,838 |
1,484,052 |
(5,311,146) |
29,098,744 |
Total comprehensive loss for the period |
|
|
|
(1,278,644) |
(1,278,644) |
Transactions with owners in their capacity as owners |
|
|
|
||
New share capital subscribed |
|
4,124,116 |
- |
- |
4,124,116 |
Value of shares and options issued to Directors, employees and consultants |
|
83,815 |
14,650 |
- |
98,465 |
Reserve transfers on expiration |
|
- |
(427,897) |
427,897 |
- |
Balance 30 June 2010 |
|
37,133,769 |
1,070,805 |
(6,161,893) |
32,042,681 |
Total comprehensive loss for the period |
|
- |
- |
(1,077,650) |
(1,077,650) |
Transactions with owners in their capacity as owners |
|
|
|
||
New share capital subscribed |
|
27,038,829 |
- |
- |
27,038,829 |
Share Issue Costs |
|
(1,221,487) |
- |
- |
(1,221,487) |
Exercise of share options |
|
508,133 |
- |
- |
508,133 |
Reserve transfers on expiration |
|
- |
(643,412) |
643,412 |
- |
Balance 31 December 2010 |
|
63,459,244 |
427,393 |
(6,596,131) |
57,290,506 |
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
for the half year ended 31 December 2010
|
|
|
|
|
|
2010 |
2009 |
|
Notes |
A$ |
A$ |
Cash flows from operating activities |
|
|
|
Receipts from customers |
|
- |
135,285 |
Payments to suppliers and employees |
|
(1,163,156) |
(1,365,230) |
Interest received |
|
54,193 |
16,913 |
Interest paid |
|
(39,285) |
- |
Net cash outflow from operating activities |
|
(1,148,248) |
(1,213,032) |
Cash flows from investing activities |
|
|
|
Acquisition of property, plant and equipment |
|
(10,297) |
(14,144) |
Investments in available-for-sale securities |
|
(8,000) |
- |
Refund of (payment for) security deposits |
|
(10,702) |
3,200 |
Acquisition of intangible assets |
|
(4,357,160) |
(290,407) |
Net cash acquired with subsidiary |
|
- |
12,607 |
Net cash (outflow)/inflow from investing activities |
|
(4,386,159) |
(288,744) |
Cash flows from financing activities |
|
|
|
Proceeds from the issue of ordinary share capital |
|
27,038,829 |
4,362,902 |
Payment of issue costs |
|
(1,221,487) |
(80,826) |
Proceeds from the exercise of share options |
|
508,133 |
- |
Loans to third parties |
|
(117,405) |
- |
Repayment of convertible notes |
|
(1,000,000) |
- |
Repayment of loan from Director related entity |
|
- |
(200,000) |
Net repayment of finance leases |
|
(10,121) |
(656) |
Net cash inflow from financing activities |
|
25,197,949 |
4,081,420 |
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
|
19,663,542 |
2,579,644 |
Cash and cash equivalents at beginning of period |
|
219,811 |
1,449,697 |
Cash and cash equivalents at end of period |
|
19,883,353 |
4,029,341 |
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
NOTE 1 summary of significant accounting policies
Basis of preparation
This general purpose condensed financial report for the half year ended 31 December 2010 has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001.
The consolidated financial statements are presented in Australian dollars ("A$") and have been prepared on the historical cost basis.
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 activities of the consolidated entity as the full financial report.
It is recommended that the half year financial report be read in conjunction with the annual report for the year ended 30 June 2010 and considered together with any public announcements made by Solomon Gold plc and its controlled entities during the half year ended 31 December 2010 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.
Apart from the changes in accounting policy noted below, the accounting policies and methods of computation are the same as those adopted in the most recent annual financial report.
Changes in accounting policy
The following amending Standards have been adopted from 1 July 2010. Adoption of these Standards did not have any effect on the financial position or performance of the Group:
· AASB 5 Non-Current Assets Held for Sale and Discontinued Operations: clarifies that the disclosures required in respect of non-current assets and disposal groups classified as held for sale or discontinued operations are only those set out in AASB 5. The disclosure requirements of other Accounting Standards only apply if specifically required for such non-current assets or discontinued operations.
· AASB 107 Statement of Cash Flows: States that only expenditure that results in recognising an asset can be classified as a cash flow from investing activities. This amendment did not have an impact on the Group's statement of cash flows.
· AASB 136 Impairment of Assets: The amendment clarifies that the largest unit permitted for allocating goodwill, acquired in a business combination, is the operating segment as defined in AASB 8 before aggregation for reporting purposes. The amendment has no impact on the Group as the annual impairment test is performed before aggregation.
· AASB Interpretation 17 Distribution of Non-cash Assets to Owners: This interpretation provides guidance on accounting for arrangements whereby an entity distributes no-cash assets to shareholders either as a distribution of reserves or as dividends. The interpretation has no effect on either the financial position or the performance of the Group.
The Group has elected not to early adopt any other new Standards or amendments that are issued but not yet effective.
Basis of consolidation
The half year consolidated financial statements comprise the financial statements of Solomon Gold plc and its controlled entities as at 31 December 2010.
NOTE 2 OPERATING SEGMENTS
The Group determines and separately reports operating segments based on information that is internally provided to the Board of Directors, who are the Group's chief operating decision makers.
The Group has outlined below the separately reportable operating segments, having regard to the quantitative threshold tests provided in AASB 8 Operating Segments, namely that the relative revenue, asset or profit / (loss) position of the operating segment equates to 10% or more of the Group's respective total. The Group reports information to the Board of Directors along company lines. That is, the financial position of Solomon Gold and each of its subsidiary companies is reported discreetly, together with an aggregated Group total. Accordingly, each company within the Group that meets or exceeds the threshold tests outlined above is separately disclosed below.
|
31 December 2010 |
||||||
|
Finance Income $ |
Other Income $ |
Result $ |
Share Based Payments $ |
Depreciation $ |
Assets $ |
Liabilities $ |
Solomon Gold |
53,974 |
- |
(846,428) |
- |
1,474 |
58,595,164 |
242,605 |
Australian Resource Management |
170 |
- |
(170,094) |
- |
23,415 |
21,732,175 |
21,914,688 |
Central Minerals |
10 |
- |
(2,266) |
- |
6,062 |
188,476 |
362,014 |
Acapulco Mining |
30 |
- |
(56,977) |
- |
3,056 |
2,420,119 |
48,087 |
Solomon Operations |
9 |
- |
(1,885) |
- |
- |
4,138 |
57,732 |
Consolidation/Elimination |
- |
- |
- |
- |
- |
(24,739,026) |
(21,714,586) |
Total |
54,193 |
- |
(1,077,650) |
- |
34,007 |
58,201,046 |
910,540 |
|
31 December 2009 |
30 June 2010 |
|||||
|
Finance Income $ |
Other Income $ |
Result $ |
Share Based Payments $ |
Depreciation $ |
Assets $ |
Liabilities $ |
Solomon Gold |
8,834 |
134,934 |
(873,106) |
143,796 |
1,045 |
34,309,186 |
1,339,581 |
Australian Resource Management |
8,079 |
351 |
(21,511) |
- |
22,580 |
19,699,749 |
19,712,169 |
Central Minerals |
- |
- |
- |
- |
- |
2,854,790 |
3,026,062 |
Acapulco Mining |
- |
- |
(346) |
- |
158 |
3,412,204 |
983,195 |
Solomon Operations |
- |
- |
(19,383) |
- |
- |
34,071 |
85,781 |
Consolidation/Elimination |
- |
- |
- |
- |
- |
(26,049,145) |
(22,928,614) |
Total |
16,913 |
135,285 |
(914,346) |
143,796 |
23,783 |
34,260,855 |
2,218,174 |
Acapulco Mining Pty Limited and Central Minerals Pty Limited joined the Group on 21 December 2009 and 19 February 2010 respectively.
|
31 December 2010 |
31 December 2009 |
|
A$ |
A$ |
NOTE 3 Expenses
|
|
|
Administration and consulting expenses include |
|
|
Foreign exchange losses |
1,858 |
23,138 |
|
|
|
Note 4 Loss per share
Calculation of basic and diluted loss per share is in accordance with AASB 133 Earnings per Share.
Loss per ordinary share |
|
|
Basic loss per share (cents per share) |
(0.4) |
(1.0) |
Diluted loss per share (cents per share) |
(0.4) |
(1.0) |
Net loss used in calculating basic and diluted loss per share |
(1,077,650) |
(914,346) |
|
|
|
|
Number |
Number |
Weighted average number of ordinary share used in the calculation of basic loss per share |
|
|
The options are non-dilutive as the company is incurring losses. |
|
|
Note 5 cash and cash equivalents
|
31 December 2010 |
30 June |
|
A$ |
A$ |
For the purposes of the consolidated cash flow statement, cash and cash equivalents comprise the following: |
|
|
Cash at bank and on hand |
19,883,354 |
219,811 |
Note 6 intangible assets
Intangible assets represent deferred exploration and evaluation costs.
Carrying amount at the beginning of the period |
33,406,506 |
18,021,422 |
Additions |
3,844,177 |
2,609,189 |
Additions - business combinations |
- |
13,343,310 |
Exploration expenditure written off |
(85,379) |
(567,415) |
Carrying amount at the end of the period |
37,165,304 |
33,406,506 |
Note 7 issued capital
|
31 December 2010 |
30June 2010 |
|
A$ |
A$ |
a) Issued capital |
|
|
Ordinary shares fully paid up |
63,459,244 |
37,133,769 |
|
|
|
b) Movement in ordinary shares |
|
|
At the beginning of the reporting period |
37,133,769 |
21,952,793 |
Shares issued during the period |
27,038,829 |
15,261,802 |
Transaction costs on share issue |
(1,221,487) |
(80,826) |
Exercise of share options |
508,133 |
- |
At reporting date |
63,459,244 |
37,133,769 |
|
|
|
c) Movement in number of ordinary shares on issue |
|
|
Shares at the beginning of the reporting period |
193,266,272 |
76,231,126 |
- 8 July 2009 (1) |
- |
8,310,378 |
- 17 July 2009 (2) |
- |
400,000 |
- 13 November 2009 (3) |
- |
21,428,571 |
- 21 December 2009 (4) |
- |
49,600,000 |
- 19 February 2010 (5) |
- |
37,200,000 |
- 27 April 2010 (6) |
- |
96,197 |
- 12 July 2010 (7) |
33,089,099 |
- |
- 22 October 2010 (8) |
54,017,153 |
- |
- 8 November 2010 (9) |
500,000 |
- |
- 23 December 2010 (10) |
250,000 |
- |
- 24 December 2010 (11) |
650,000 |
- |
Shares at the reporting date |
281,772,524 |
193,266,272 |
|
|
|
(1) On 8 July 2009, 8,310,378 $0.164 ordinary shares were issued for cash pursuant to a share placement.
(2) On 17 July 2009, 400,000 $0.178 ordinary shares were issued to an employee as a bonus payment.
(3) On 13 November 2009, 21,428,571 $0.14 ordinary shares were issued for cash pursuant to a share placement.
(4) On 21 December 2009, 49,600,000 $0.123 ordinary shares were issued to the vendors of Acapulco Mining Pty Ltd as consideration for a scrip based acquisition.
(5) On 19 February 2010, 37,200,000 $0.126 ordinary shares were issued to the vendors of Central Minerals Pty Ltd as consideration for a scrip based acquisition.
(6) On 27 April 2010, 96,197 $0.13 ordinary shares were issued to a vendor as part consideration for services received.
(7) On 12 July 2010, 33,089,099 $0.086 ordinary shares were issued for cash pursuant to a share placement.
(8) On 22 October 2010, 54,017,153 $0.448 ordinary shares were issued for cash pursuant to a share placement.
(9) On 8 November 2010, 500,000 $0.322 options expiring on 8/11/10 were exercised into ordinary shares for cash.
(10) On 23 December 2010, 250,000 $0.384 options expiring on 31/12/10 were exercised into ordinary shares for cash.
(11) On 24 December 2010, 650,000 $0.389 options expiring on 31/12/10 were exercised into ordinary shares for cash.
NOTE 8 RELATED PARTIES
Transactions with Directors and Director-Related Entities
(i) Solomon Gold Plc has a standing Administration and Services Agreement with D'Aguilar Gold Ltd, an entity associated with Nicholas Mather (a Director) and Brian Moller (a Director) whereby D'Aguilar Gold Ltd has agreed to provide certain services including the provision by D'Aguilar Gold Ltd of its premises (for the purposes of conducting the Company's business operations), use of existing office furniture, equipment and certain stationery, together with general telephone, reception and other office facilities (''Services''). In consideration for the provision of the Services, the Company shall reimburse D'Aguilar Gold Ltd for any expenses incurred by it in providing the Services. The Administration Services Agreement may be terminated upon the occurrence of an insolvency event of the other party, a failure to remedy a material breach of the Administration Services Agreement by the other party or upon three months written notice to the other party. D'Aguilar Gold Ltd was paid $119,861 (2009: $78,011) for the provision of administration, management and office facilities to the Company during the half year. The total amount outstanding at half year end is $33,195 (2009: $46,587)
(ii) Mr Brian Moller (a Director), is a partner in the Australian firm Hopgood Ganim Lawyers. Hopgood Ganim were paid $106,769 (2009: $184,845) for the provision of legal services to the Company during the half year. These services were based on normal commercial terms and conditions. The total amount outstanding at half year end is $72,796 (2009: $52,077).
NOTE 9 COMMITMENTS AND CONTINGENT LIABILITIES
There are no significant changes to commitments and contingencies disclosed in the most recent annual financial report.
In the directors' opinion:
· the attached financial statements and notes thereto comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;
· the attached financial statements and notes thereto give a true and fair view of the consolidated entity's financial position as at 31 December 2010 and of its performance for the financial half-year ended on that date; and
· there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of directors made pursuant to section 303(5) of the Corporations Act 2001.
On behalf of the directors
Nick Mather
Director
Brisbane
18 March 2011
Auditor's Independence Declaration
As lead auditor for the review of Solomon Gold plc for the half year ended 31 December 2010, I declare that to the best of my knowledge and belief there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
(b) no contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of Solomon Gold plc and the entities it controlled during the half year.
PKF
Albert Loots
Partner
Dated at Brisbane this 15th day of March 2011
Tel: 61 7 3226 3555 160;001
The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
INDEPENDENT AUDITOR'S REVIEW REPORT
To the members of Solomon Gold plc
Report on the Half-Year Financial Report
We have reviewed the accompanying consolidated half-year financial report of Solomon Gold plc which comprises the consolidated statement of financial position as at 31 December 2010, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statements of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity. The consolidated entity comprises Solomon Gold plc and the entities it controlled at 31 December 2010 or from time to time during the half-year ended on that date.
Directors' Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's financial position as at 31 December 2010 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Solomon Gold plc, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
Tel: 61 7 3226 3555 n> Australia
GPO Box 1078 Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Solomon Gold plc, would be in the same terms if given to the directors as at the time of this auditor's report.
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of the consolidated entity is not in accordance with the Corporations Act 2001 including:
(a) giving a true and fair view of the consolidated entity's financial position as at 31 December 2010 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001
PKF
Albert Loots
Partner
Dated this 18th day of March 2011
Brisbane