Trans-Siberian Gold TSG Half Yearly Report

  Trans-Siberian Gold (TSG) - Half Yearly Report

RNS Number : 2690N
Trans-Siberian Gold PLC
27 September 2012




Trans-Siberian Gold plc



Interim Results for the half year ended 30 June 2012

Highlights

· Asacha 1st half production 12,708 oz. gold, 15,372 oz. silver

· Asacha plant operating at planned 150,000 tonnes per annum from June 2012

· $6.4 million debt converted to equity in February 2012



Chief Executive Officer's Report



Trans-Siberian Gold plc ("TSG" or the "Company") (AIM:TSG.L) reports that its
results for the six months to 30 June 2012 were affected by operational
difficulties at the Asacha mine, principally the lower than expected grade of
ore delivered to the plant, however is pleased to report on more recent
progress towards the resolution of the dilution problem and other issues which
affected the performance of the mine during the reporting period.

Revenue from the sale of 12,708 oz. of refined gold and 15,372 oz. of refined
silver was $21.0 million and $456,000 respectively. Average realised prices
were $1,651 per oz. gold and $30 per oz. silver. Cost of sales per oz. gold,
net of the credit from silver sales revenue, was $1,663. Cash cost per oz.
gold, net of the silver credit and excluding royalty was $651. During the
first half of 2011, the Company was still in the exploration and development
phase of its gold projects and therefore received no operating income in that
period.

Administrative expenses for the half year amounted to $462,000 in UK and $3.4
million in Russia, in aggregate $3.8 million compared to $529,000 and $1.3
million respectively, in aggregate $1.8 million, for the corresponding period
of 2011 and $1.6 million and $4.2 million respectively, in aggregate $5.8
million, for 2011 as a whole. Russian administrative expenses in the first
half of 2012 included the write off of $439,000 non-recoverable Value Added
Tax (2011 full year $926,000).

Finance income was $3,000 (2011 first half: $6,000). Finance costs were $1.5
million (2011 first half: $193,000), net of interest capitalised $nil (2011
first half: $2.0m).

The loss for the period was $3.9 million (2011 first half: $1.0 million) net
of exchange gains of $29,000 (2011 first half: $1.0 million).

Cash and cash equivalents increased from $2.2 million to $3.7 million.

Borrowings reduced from $48.5 million to $39.8 million, principally reflecting
the conversion into equity of $6.4 million of short term loan facilities
provided by the Company's major shareholders UFG Asset Management (UFG) and
AngloGold Ashanti Limited (AGA), scheduled repayments under the first of the
two project finance facilities totalling $43 million provided by Sberbank for
the development of Asacha and repayment of another short term loan facility
provided by UFG.

In June 2011 UFG and AGA agreed to provide TSG with additional short term loan
facilities in aggregate $781,000 on commercial terms, repayable 90 days after
drawdown of the facilities. In September 2012 the term of these facilities was
extended to 1 March 2013. The revised facility agreements include an option
for the lenders, subject to the requisite approval of TSG's shareholders, to
convert any part of the outstanding loans into TSG shares at a price
equivalent to the volume weighted average price of TSG's shares for the period
of 60 business days prior to notice of such conversion.



Asacha Project, Kamchatka Krai

In the six months to 30 June 2012 mine development and preparation works,
by-product extraction works and exploration works comprised 2,070 metres with
more than 63,600 tonnes of ore extracted. The ore stockpile at the end of June
2012 comprised approximately 63,400 tonnes.



The main issue during this period was high dilution in the mine, reducing the
grade of the ore delivered to the plant. A comprehensive technical underground
mine audit concluded that the mining method prescribed in the design of the
Asacha mine, long hole blasting, was not appropriate for the fractured rock
enclosing the main stoping zone planned for mining in 2012. On the basis of
the mine auditor's recommendations, the adjacent blocks are now being mined by
shallow hole blasting with better results in terms of dilution. Due to the
measures taken, ore grades improved to 7.4-7.7 g/t in June and July.



Blending the ore extracted using shallow hole blasting with the ore from the
main stoping block is expected to lead to an increase in the average grade of
processed ore to 10-11 g/t in the fourth quarter. On this basis, TSG expects
2012 production of 31,000 oz. gold and 48,500 oz. silver.



Mine performance in the second half of the third quarter was affected by the
breakdown of some underground equipment. This reduced the amount of stoping
ore which could be delivered to the plant, necessitating blending the mined
ore with lower grade ore from the surface ore stockpile. The problem of
equipment breakdown is now being addressed. The necessary spare parts have
been ordered and some new machines have been purchased, including a new
underground truck which is expected at the site in October.



In the first quarter the Asacha plant processed an average 9,626 tonnes per
month, increasing to an average 10,968 tonnes per month in the second quarter.
By the end of the reporting period monthly plant throughput reached the level
of 12,500 tonnes, as envisaged by the design documentation. Gold recovery
consistently exceeded 95% during the period and also reached the levels
prescribed by the plant's design. Discussions have commenced with a design
institute in respect of the planned increase in the plant's annual capacity
from the current 150,000 tonnes to 200,000 tonnes.



Additional equipment for the site laboratory has increased its sample capacity
to more than 100 assays per day. An additional drilling rig, intended to
improve the quality of geologic sampling in the mine, was delivered to site in
July 2012.



Mining and production  at Asacha in  the first half  of 2012 is  shown in  the 
following table.



                                                      2012
                                    1^st    2^nd   1st July/  year   2011
                                   quarter quarter   half      August     to
                                                                         date
Mine                      (metres)   1,023   1,047     2,070        733  2,803  3,481
development
Ore extracted (mine
development and           (tonnes)  33,525  30,090    63,615     21,128 84,743 34,537
stoping)
Ore                       (tonnes)  28,877  32,963    61,840     25,104 86,944 30,308
processed
Average grade gold  (g/t)      7.03    6.33      6.66       6.86   6.72   9.35
Average grade silver  (g/t)     16.48   10.55     13.32      11.48  12.79  15.66
Recovery rate               (%)      95.14   95.48     95.39      95.48  95.43   94.2
gold
Recovery rate               (%)      48.19   73.67     59.54      76.99  64.04   61.8
silver
Gold in                    (oz.)     6,689   6,462    13,151      5,351 18,502  7,833
dore
Silver in                  (oz.)     7,320   8,991    16,311      7,314 23,625  8,596
dore
Gold                       (oz.)     6,281   6,427    12,708      5,800 18,508  6,539
refined
Silver                     (oz.)     6,975   8,397    15,372      7,903 23,275  7,189
refined



Rodnikova Project, Kamchatka Krai

The contract for the preparation of the pre-feasibility study on Rodnikova has
been signed and work is expected to start by the end of September.



Personnel

During the first half of 2012 personnel numbers at Kamchatka increased from to
445 to 457, with a further increase to 468 by the end of August.



Contacts:



TSG                                                 +44 (0) 1480 811871
Simon Olsen              
                                                   
                                                   
Seymour Pierce Ltd                                  +44 (0) 207 107 8000
Stewart Dickson / David Foreman (Corporate Finance) 
Jeremy Stephenson (Corporate Broking)               



The information in this report relating to Asacha's mineral resources is based
on information compiled by Michael O'Brien, a member of the Australasian
Institute of Mining and Metallurgy, who has sufficient experience relevant to
the styles of mineralisation and types of deposit under consideration and to
the activity he is undertaking to qualify as a Competent Person as defined in
the 2004 edition of the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves. Mr O'Brien is a Qualified Person
as defined by the AIM Rules and consents to the inclusion in the report of the
matters based on his information in the form and context in which it appears.





Condensed Consolidated Statement of Financial Position

at 30 June 2012



                                           30 June   30 June  31 December

                                              2012      2011              2011

                                         unaudited unaudited           audited

                                   Note       $000      $000              $000
Assets
Non-current assets
Mining properties                     6     29,512         -            34,224
Property, plant and equipment         7     80,247    87,670            84,894
Deferred exploration and              8      2,866    31,225             2,866
evaluation costs
Deferred tax asset                           7,066         -             6,009
Trade and other receivables                      -       826                 -
Total non-current assets                   119,691   119,721           127,993
Current assets
Inventories                           9     12,884       796            10,544
Trade and other receivables                  2,745     5,708             3,963
Cash and cash equivalents                    3,701     4,581             2,190
Total current assets                        19,330    11,085            16,697
Total assets                               139,021   130,806           144,690
Liabilities
Non-current liabilities
Loans and borrowings                 10     23,196    49,633            32,690
Deferred tax liabilities                       320         -               623
Provisions                           11        644       331               644
Total non-current liabilities               24,160    49,964            33,957
Current liabilities
Trade and other payables                     5,367     3,013             4,401
Borrowings                           10     16,450         -            15,808
Total current liabilities                   21,817     3,013            20,209
Total liabilities                           45,977    52,977            54,166
Total net assets                            93,044    77,829            90,524
Capital and reserves attributable to owners of the
Company
Share capital                        15     18,988    17,323            18,050
Share premium                        15     89,520    77,938            84,013
Retained deficit                          (15,464)  (17,432)          (11,539)
Total equity                                93,044    77,829            90,524





Condensed Consolidated Statement of Comprehensive Income - for the 6 months
ended 30 June 2012





                                         6 months to  6 months to 12 months to

                                        30 June 2012 30 June 2011  31 December
                                                                          2011
                                           unaudited    unaudited
                                                                       audited
                                                $000         $000
                                   Note                                   $000
Revenue                              12       21,441            -       11,930
Cost of sales                        13     (21,589)            -      (8,149)
Gross profit                                   (148)            -        3,781
Administrative expenses                      (3,818)      (1,836)      (5,806)
Other income                                      96            -          635
Net foreign exchange differences                  26        1,031        1,980
on operating activities
(Loss) profit from operations                (3,844)        (805)          590
Finance expense                              (1,529)        (193)      (1,465)
Finance income                                     3            6           12
Net foreign exchange differences                   3           42           54
on financing activities
Loss before tax                              (5,367)        (950)        (809)
Income tax credit (charge)                     1,442         (99)        5,393
(Loss) profit for the period                 (3,925)      (1,049)        4,584
Total comprehensive (expense)                (3,925)      (1,049)        4,584
income for the period
(Loss) profit for the period
attributable to:
Owners of the parent company                 (3,925)      (1,049)        4,584
(Loss) profit for the period                 (3,925)      (1,049)        4,584
Total comprehensive (expense)
income for the period attributable
to:
Owners of the parent company                 (3,925)      (1,049)        4,584
(Loss) profit for the period                 (3,925)      (1,049)        4,584
(Loss) profit per share
attributable to the owners

of the parent company (expressed
in cents)
- basic and diluted                  14       (3.59)       (1.05)         4.57





Condensed Consolidated Statement of Changes in Equity

for the 6 months ended 30 June 2012



                              Attributable to owners of the Company
                                  Share    Share  Retained    Total

                                capital  premium   deficit   equity

                                   $000     $000      $000     $000
At 1 January 2011                17,323   77,938  (16,462)   78,799
Loss for the period                   -        -   (1,049)  (1,049)
Value of share-based payments         -        -        79       79
At 30 June 2011                  17,323   77,938  (17,432)   77,829
Issue of share capital              727    6,075         -    6,802
Profit for the period                 -        -     5,633    5,633
Value of share-based payments         -        -       260      260
At 31 December 2011              18,050   84,013  (11,539)   90,524
Issue of share capital              938    5,507         -    6,445
Loss for the period                   -        -   (3,925)  (3,925)
Value of share-based payments         -        -         -        -
At 30 June 2012                  18,988   89,520  (15,464)   93,044



Condensed Consolidated Statement of Cash Flows

for the 6 months ended 30 June 2012



                                     6 months to  6 months to     12 months to

                                    30 June 2012 30 June 2011 31 December 2011

                                       unaudited    unaudited          audited

                                            $000         $000             $000
Cash flows from operating
activities
(Loss) profit for the period             (3,925)      (1,049)            4,584
Adjustment for:
Mining properties depletion                7,108            -            2,828
Mining properties depletion                (835)            -                -
charged to inventory
Depreciation                               6,378          805            3,303
Depreciation charged to inventory,
assets under construction, mining          (903)        (797)          (2,636)
properties and deferred
exploration and evaluation costs
Finance expenses - net                     1,523          145            1,399
Share based payments                           -           79              339
Corporation tax (credit) charge          (1,442)           99          (5,393)
Loss (gain) on sale of property,               1          (3)                1
plant and equipment
Cash flows from operating
activities before changes in               7,905        (721)            4,425
working capital and provisions
Increase in inventories                    (761)        (154)          (9,902)
Decrease in trade and other                1,217          603            3,204
receivables
(Decrease) increase in trade and           (495)        (475)            1,722
other payables
Cash generated from (used in)              7,866        (747)            (551)
operations
Corporation tax received (paid)              386         (68)                7
Interest paid on borrowings              (1,398)        (193)            (857)
Net cash flows generated from              6,854      (1,008)          (1,401)
(used in) operating activities
Investing activities
Purchase of mining properties              (860)            -                -
Purchase of property, plant and          (1,999)     (13,805)         (15,231)
equipment (PPE)
Proceeds from sale of PPE                     45            5                -
Purchase of exploration and
evaluation assets including                    -      (1,334)          (6,493)
capitalised interest
Interest received - third party                3            6               12
Net cash used in investing               (2,811)     (15,128)         (21,712)
activities
Financing activities
Proceeds from bank borrowings                  -       12,171           12,087
Repayment of bank borrowings             (1,478)            -          (3,000)
Proceeds from short term                     781            -            8,000
borrowings
Repayment of short term borrowings       (1,760)            -                -
Proceeds from long term borrowings             -        4,523            4,330
Repayment of finance leases                 (78)            -            (149)
Net cash (used in) generated from        (2,535)       16,694           21,268
financing activities
Net increase (decrease) in cash            1,508          558          (1,845)
and cash equivalents
Cash and cash equivalents at               2,190        3,981            3,981
beginning of the period
Exchange gains on cash and cash                3           42               54
equivalents
Cash and cash equivalents at end           3,701        4,581            2,190
of the period



Unaudited notes forming part of the condensed consolidated interim financial
information for the period ended 30 June 2012



1. General information

Trans-Siberian Gold plc (the Company) is a UK-based resources company, with
the objective of acquiring and developing a portfolio of quality gold-mining
assets in Russia.

The Company is a public limited company, incorporated and domiciled in the
United Kingdom and has subsidiaries based in the Russian Federation. The
Company's registered office is 39 Parkside Cambridge CB1 1PN United Kingdom.
The registered number of the Company is 1067991. The Company's shares are
traded on the AIM Market of the London Stock Exchange.

This condensed consolidated interim financial information was approved by the
Board on 26 September 2012.

The interim financial information for the six months ended 30 June 2012 and 30
June 2011 is unreviewed and unaudited and does not constitute statutory
accounts as defined in Section 435 of the Companies Act 2006. The comparative
financial information for the year ended 31 December 2011 has been derived
from the statutory financial statements for that period. Statutory accounts
for the year ended 31 December 2011 were approved by the Board of directors on
25 May 2012 and filed with the Registrar of Companies. The Independent
Auditors' Report on those accounts was unqualified and did not draw attention
to any matters by way of emphasis.

2. Going concern

Management tightly control the level of committed expenditure to ensure that
the Group has sufficient resources available to meet its liabilities as they
fall due. Regular cash forecasts are reviewed to assess the potential impact
of factors such as changes in commodity prices, production rates and the
timing of capital expenditure. These forecasts, taking account of reasonably
possible changes in commodity prices, trading performance and expenditure,
show that the Group has adequate resources to continue in operational
existence for the foreseeable future, wherefore the directors are confident
that the Group will continue as a going concern and have prepared the interim
financial information on that basis.



3. Principal accounting policies

The Group's principal accounting policies applied in the presentation of the
consolidated interim financial information are set out below. These policies
have been consistently applied to all periods presented, unless otherwise
stated, and are consistent with those that the directors intend to use in the
financial statements for the year ending 31 December 2012 which will be
prepared in accordance with IFRS as adopted by the EU.

Basis of preparation

The condensed consolidated interim financial information for the six months
ended 30 June 2012 has been prepared under the historical cost convention and
in accordance with the AIM Rules and complies with IAS 34 Interim financial
reporting as adopted by the EU. The interim condensed consolidated financial
report does not include all disclosures that would otherwise be required in a
complete set of financial statements and should be read in conjunction with
the annual report and accounts for 2011.




The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates. The areas_
involving a higher degree of judgement or complexity, or where assumptions and
estimates are significant to the consolidated financial statements, are
disclosed in Note 4.



The estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision only affects that period or in the period
of revision and future periods if the revision affects both current and future
periods.



The same accounting policies, presentation and methods of computation are
followed in this condensed consolidated interim financial information as were
applied in the Group's latest annual audited financial statements except that,
in the current financial year, the Group has adopted a number of new or
revised Standards and interpretations. However none of these has had a
material impact on the Group's reporting.



None of the IFRS and IFRIC amendments or interpretations issued by the IASB
since the publication of the latest annual report is expected to have a
material impact on the Group.



Basis of consolidation

The consolidated financial statements of the Group include the accounts of
Trans-Siberian Gold plc and its subsidiaries. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date on which control ceases. Inter-company
transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated but considered
an impairment indicator of the asset transferred. The accounting policies and
financial year ends of its subsidiaries are consistent with those applied by
the Company.



Foreign currency translation

a) Functional and presentation currency

Items included in the financial information of each of the Group's entities
are measured using the currency of the primary economic environment in which
the entity operates (the functional currency). The consolidated financial
information is presented in US dollars ($), which is the functional and
presentation currency of the Company and the functional currency of its
subsidiaries.

b) Transactions and balances

Foreign currency transactions are translated into the functional currency at
the average exchange rate ruling during the month in which the transactions
occur. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in
profit or loss. Foreign exchange gains and losses resulting from the
translation of cash, cash equivalents and borrowings denominated in foreign
currencies are shown as financing activities; all other foreign exchange gains
and losses are shown as operating activities.

Segment reporting

Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision makers. The chief operating
decision makers have been identified as the Chief Executive Officer, Finance
Director and the non-executive board members.



The operating results of each of the geographical segments are regularly
reviewed by the Group's chief operating decision makers in order to make
decisions about the allocation of resources and to assess their performance.
Russia has production, exploration and development activities, the United
Kingdom office is an administrative cost centre.



Property, plant and equipment

Property, plant and equipment are recorded at historical cost less
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Depreciation of property, plant
and equipment is calculated using the straight-line method to allocate their
cost to their residual values over their estimated useful lives, being:

Buildings - 3-20 years
Motor vehicles - 4-7 years
Plant and machinery - 4-7 years
Office furniture and equipment - 3-5 years

The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each reporting date. An asset's carrying amount is written
down immediately to its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount. Gains and losses on disposals
are determined by comparing the proceeds with the carrying amount and are
recognised within administrative expenses in profit or loss. Assets under
construction are not subject to depreciation until the date on which the Group
brings them into use.

Leases

Leases in which a significant portion of the risks and rewards of ownership
are retained by the lessor are classified as operating leases. Payments made
under operating leases (net of any incentives received from the lessor) are
charged to profit or loss on a straight-line basis over the period of the
lease.

Assets held under finance leases are capitalised as property, plant and
equipment at the estimated present value of the
underlying lease payments. The corresponding finance lease obligation is
included in creditors due within or after more
than one year. The interest element is allocated to accounting periods during
the lease term to reflect a constant rate of
interest on the remaining balance of the obligation for each accounting
period.

Exploration and evaluation costs

When the Group incurs expenditure on mining properties that have not reached
the stage of commercial production, the costs of acquiring the rights to such
mining properties and related exploration and evaluation costs, including
directly attributable employment costs, are deferred where the expected
recovery of costs is considered probable by the successful exploitation or
sale of the asset. General overheads are expensed immediately. Depreciation on
property, plant and equipment used on exploration and evaluation projects is
charged to deferred costs whilst the projects are in progress. The Group
capitalises borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset (one that takes a substantial
period of time to get ready for use or sale) as part of the cost of that
asset. Finance costs incurred in respect of the Group's general borrowings are
expensed in profit or loss as incurred. Exploration and evaluation costs are
not amortised.

Where a feasibility study indicates that the future recovery of costs is not
probable, full provision is made in respect of any deferred costs. Where
mining properties are abandoned, deferred expenditure is written off in full.

Deferred exploration and evaluation costs are assessed at each reporting date
to determine whether there are indicators that the asset may be impaired. If
any such indicator exists, a review for impairment is conducted.

The amounts shown as deferred exploration and evaluation expenditure represent
costs incurred and do not necessarily reflect present or future values.

In future a project's deferred exploration and evaluation expenditure will be
transferred to non-current mining assets when the decision to proceed to the
development stage of that project is taken.

Mining properties

Once a project reaches the stage of commercial production, the capitalised
exploration and evaluation expenditure, other than that on buildings, plant
and machinery and equipment, related to that project is transferred to
tangible assets as mining properties.



Mining properties are depleted over the estimated life of the reserves on a
'unit of production' basis.



Commercial reserves are proven and probable reserves. Changes in commercial
reserves affecting unit of production calculations are deal with prospectively
over the revised remaining reserves.



Impairment

The carrying amount of the Group's non-current assets is compared to the
recoverable amount of the assets whenever events or changes in circumstances
indicate that the net book value may not be recoverable. The recoverable
amount is the higher of value in use and the fair value less costs to sell.



Value in use is estimated by reference to the net present value of expected
future cash flows of the relevant cash generating unit. Individual mining
properties are considered to be separate income generating units for this
purpose, except where they would be operated together as a single mining
business.



If the recoverable amount is less than the carrying amount of an asset, an
impairment loss is recognised. The revised carrying amounts are amortised in
line with the Group's accounting policy.



A previously recognised impairment loss is reversed if the recoverable amount
increases as a result of a reversal of the conditions that originally resulted
in the impairment. The reversal is recognised in the income statement and is
limited to the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised in the prior reporting
periods.

Business combinations

The consolidated financial statements incorporate the results of the business
combinations using the acquisition method of accounting. In the consolidated
statement of financial position, the acquiree's identifiable assets,
liabilities and contingent liabilities are initially recognised at their fair
values at the acquisition date. The results of acquired operations are
included in the consolidated statement of comprehensive income from the date
on which control is obtained.



Financial instruments

Financial assets are recognised when the Group has rights or other access to
economic benefits. Such assets consist of cash, equity instruments,
contractual rights to receive cash or another financial asset, or contractual
rights to exchange financial instruments with another entity on potentially
favourable terms. Financial liabilities are recognised when there is an
obligation to transfer benefits and that obligation is a contractual liability
to deliver cash or another financial asset or to exchange financial
instruments with another entity on potentially unfavourable terms. When these
criteria no longer apply, a financial asset or liability is no longer
recognised. Compound financial instruments are split into their debt and
equity components.

If a legally enforceable right exists to set off recognised amounts of
financial assets and liabilities, which are in determinable monetary amounts,
and the Group intends to settle on a net basis, the relevant financial assets
and liabilities are offset.

The Group has no financial instruments that are classified as fair value
through profit or loss.

Interest costs are charged against income in the year in which they are
incurred. Premiums or discounts arising from the difference between the net
proceeds of financial instruments purchased or issued and the amounts
receivable or payable
at maturity are taken to net interest payable over the life of the instrument.

Inventories

Raw materials and consumables, which consist of tools for development
activities, spare parts, fuel and materials used in mining operations, are
initially recognised at cost, and subsequently valued at the lower of cost and
net realisable value.



Stockpiles comprise ore containing gold and are valued at the lower of
weighted average cost (including direct labour costs and related overheads)
and net realisable value (using assay data to estimate the amount of gold
contained in the stockpiles, adjusted for expected gold recovery rates.)



Finished goods (comprising refined gold and silver) and work in progress
(including gold in circuit and gold dore) are stated at the lower of weighted
average cost and net realisable value. Cost includes direct materials, direct
labour costs and production overheads, including depreciation and depletion of
relevant property, plant and equipment and mining properties.



Net realisable value represents the estimated selling price less all expected
costs to completion and costs to be incurred in selling and distribution.



Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with
banks and bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities in the statement of financial position.

Revenue

The Group has entered into contracts for the sale of refined gold and silver.
Revenue arising from sales under these contracts is recognised when the price
is determinable, the product has been delivered in accordance with the terms
of the contract, the significant risks and rewards have been transferred to
the customer and collection of the sale price is reasonably assured.



Taxation

Current tax is the expected tax payable or recoverable on the taxable profit
or loss for the year, using rates enacted at the reporting date and any
adjustments to the tax payable in respect of previous years.

Deferred tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. However, the
deferred income tax is not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor taxable
profit or loss. Deferred income tax is determined using tax rates (and laws)
that have been enacted or substantively enacted by the reporting date and are
expected to apply when the related deferred income tax asset is realised or
the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable
that future taxable profit will be available against which the temporary
differences can be utilised.

Deferred income tax is provided on temporary differences arising on
investments in subsidiaries and associates, except where the timing of the
reversal of the temporary difference is controlled by the Group and it is
probable that the temporary difference will not reverse in the foreseeable
future.

Share-based payment transactions

The Company makes equity-settled share-based payments to certain Group
employees under the terms of its employee share option scheme. In addition to
those granted under the Company's employee share option scheme, the Company
has granted share options to some advisers. The fair value of options granted
to employees is recognised as an employee expense and to advisers as
professional fees, with a corresponding increase in equity by way of a credit
to retained earnings.

The fair value is measured at grant date and expensed on a straight-line basis
over the expected vesting period. The fair value of the options granted is
measured using a Black-Scholes valuation model, taking into account the terms
and conditions upon which the options were granted. The amount recognised as
an expense is adjusted to reflect the actual number of share options that vest
or are likely to vest except where non-exercise is only due to the Company's
share price not achieving the threshold for vesting. Non-market based vesting
conditions are taken into account in estimating the number of options likely
to vest. The estimate of the number of options likely to vest is reviewed at
each reporting date up to the vesting date, at which point the estimate is
adjusted to reflect the actual options exercised. No adjustment is made after
the vesting date even if the options are not exercised.

Defined contribution personal pension plan

Contributions to employees' defined contribution personal pension plans are
recognised as an expense in profit or loss as the services giving rise to the
Group's obligations are rendered by the employees.

Provisions

Provisions for decommissioning, environmental restoration and legal claims are
recognised when the Group has a present legal or constructive obligation as a
result of past events, it is probable that an outflow of resources will be
required to settle the obligation and the amount has been reliably estimated.
Provisions are not recognised for future operating losses.

Group companies are generally required to restore mine and processing sites at
the end of their productive lives to a condition acceptable to the relevant
authorities and consistent with the Group's environmental policies. The
expected cost of any committed decommissioning or restoration programme,
discounted to its net present value where the effect of discounting is
material, is provided and capitalised at the beginning of each project. The
capitalised cost is amortised over the life of the operation and the increase
in the net present value of the provision for the expected cost is included
with interest and similar charges.

The costs of on-going programmes to prevent and control pollution and to
rehabilitate the environment are charged to profit or loss as incurred.

Determination of ore reserves

The Group estimates its ore reserves and mineral resources based on
information compiled by Competent Persons as defined in accordance with the
2004 edition of the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (the JORC code).

4. Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.

Use of estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results.

The more significant areas requiring the use of management estimates and
assumptions relate to mineral reserves that are the basis of future cash flow
estimates and unit-of-production depreciation, depletion and amortisation
calculations; decommissioning, site restoration, environmental costs and
closure obligations; estimates of recoverable gold and other
materials; asset impairments; the fair value and accounting treatment of
financial instruments and deferred taxation.

The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.

Critical judgements in applying the entity's accounting policies

a) Exploration and evaluation costs

The recoverability of the amounts shown in the Group statement of financial
position in relation to deferred exploration and evaluation expenditure (and
also the carrying value of the Company's investments in its subsidiaries) are
dependent upon the discovery of economically recoverable reserves,
continuation of the Group's interests in the underlying mining claims, the
political, economic and legislative stability of the regions in which the
Group operates, compliance with the terms of the relevant mineral rights
licences, the Group's ability to obtain the necessary financing to fulfil its
obligations as they arise and upon future profitable production or proceeds
from the disposal of properties.

b) De-commissioning, site restoration and environmental costs

The Group's mining and exploration activities are subject to various laws and
regulations governing the protection of the environment. The Group recognises
management's best estimate for asset retirement obligations in the period in
which they are incurred. Actual costs incurred in future periods could differ
materially from the estimates. Additionally, future changes to environmental
laws and regulations, life of mine estimates and discount rates could affect
the carrying amount of this provision. Such changes could similarly impact the
useful lives of assets depreciated on a straight-line basis, where those lives
are limited to the life of mine.

c) Recoverable Value Added Tax (VAT)

$1,836,067 Russian VAT was recovered in the first half of 2012 (2011 first
half: $1,520,583). The directors anticipate that all of the VAT receivable of
$2,446,499 (31 December 2011: $3,284,193) will be recovered during the second
half of 2012.

d) Share-based payments

The Company makes equity-settled share-based payments to certain Group
employees and advisers. Equity-settled
share-based payments are measured at fair value using a Black-Scholes
valuation model at the date of grant. The fair
value is expensed as services are rendered over the vesting period, based on
the Group's estimate of the shares that will eventually vest and adjusted for
the effect of non-market-based vesting conditions. The expected life used in
the model has been adjusted, based on management's best estimate, for the
effects of non-transferability, exercise restrictions and
behavioural considerations.

e) Contingencies

By their nature, contingencies will only be resolved when one or more future
events occur or fail to occur. The assessment of such contingencies inherently
involves the exercise of significant judgement and estimates of the outcome of
future events.

5. Segment information

The Group's operations are entirely focused on gold production and exploration
and development activities within the Russian Federation, with its corporate
head office in the UK. Operating segments have been identified on the basis of
internal reports about the components of the Group. The Group has two
reportable segments as set out below. The operating results of each of these
segments are regularly reviewed by the Group's chief operating decision makers
in order to make decisions about the allocation of resources and to assess
their performance.

The accounting policies of these segments are in line with those set out in
note 3.



                                             Head Office   Russia    Total

Reportable segments as at 30 June 2012              $000     $000     $000
Revenue                                                -   21,441   21,441
Cost of sales                                          - (21,589) (21,589)
Administration expenses                            (462)  (3,356)  (3,818)
Other income                                           -       96       96
Finance expenses                                    (71)  (1,458)  (1,529)
Finance income                                         1        2        3
Exchange differences                                   3       26       29
Taxation credit                                        -    1,442    1,442
Loss for the period after taxation                 (529)  (3,396)  (3,925)
Non-current assets                                     5  119,686  119,691
Inventories                                            -   12,884   12,884
Trade and other receivables (current assets)          86    2,659    2,745
Cash and cash equivalents                            461    3,240    3,701
Segment assets                                       552  138,469  139,021
Loans and borrowings                                 784   38,862   39,646
Trade and other payables (current)                   200    5,167    5,367
Deferred tax liability                                 -      320      320
Provisions                                             -      644      644
Segment liabilities                                  984   44,993   45,977
Segment net assets (liabilities)                   (432)   93,476   93,044





                                             Head Office  Russia   Total

Reportable segments as at 31 December 2011          $000    $000    $000
Revenue                                                -  11,930  11,930
Cost of sales                                          - (8,149) (8,149)
Administration expenses                          (1,564) (4,242) (5,806)
Other income                                           -     635     635
Finance expenses (net)                             (235) (1,218) (1,453)
Exchange differences                                  54   1,980   2,034
Taxation credit                                        -   5,393   5,393
Profit (loss) for the year after taxation        (1,745)   6,329   4,584
Non-current assets                                     7 127,986 127,993
Inventories                                            -  10,544  10,544
Trade and other receivables (current assets)          36   3,927   3,963
Cash and cash equivalents                          1,153   1,037   2,190
Segment assets                                     1,196 143,494 144,690
Loans and borrowings                               8,187  40,311  48,498
Trade and other payables (current)                   357   4,044   4,401
Deferred tax liability                                 -     623     623
Provisions                                             -     644     644
Segment liabilities                                8,544  45,622  54,166
Segment net assets (liabilities)                 (7,348)  97,872  90,524



                                             Head Office  Russia   Total

Reportable segments as at 30 June 2011              $000    $000    $000
Revenue                                                -       -       -
Cost of sales                                          -       -       -
Administration expenses                            (529) (1,307) (1,836)
Finance expenses (net)                             (190)       3   (187)
Exchange differences                                  42   1,031   1,073
Taxation credit                                        -    (99)    (99)
Loss for the period after taxation                 (677)   (372) (1,049)
Non-current assets                                     9 119,712 119,721
Inventories                                            -     796     796
Trade and other receivables (current assets)          80   5,628   5,708
Cash and cash equivalents                          4,231     350   4,581
Segment assets                                     4,320 126,486 130,806
Loans and borrowings                               6,572  43,061  49,633
Trade and other payables (current)                   219   2,794   3,013
Provisions                                             -     331     331
Segment liabilities                                6,791  46,186  52,977
Segment net assets (liabilities)                 (2,471)  80,300  77,829



· Finance income, finance costs and taxation have been analysed above in
line with the way the Group's business is structured.

· All material non-current assets other than financial instruments are
owned by a Russian subsidiary and are located in Russia.

· Share based payments of $nil (2011 first half: $78,902) relate solely to
Head Office.

· All revenue is generated in Russia from the sale of refined gold and
silver to one well established Russian bank.

· All material capital expenditure in the current and previous year
relates to the Russia segment.



6. Mining properties

Mining properties assets relate to the Asachinskoye (Asacha) mining licence
held by the Company's subsidiary ZAO Trevozhnoye Zarevo (TZ).

                                                      Asacha Rodnikova   Total

                                                        $000      $000    $000
At 1 January 2011                                          -         -       -
At 30 June 2011                                            -         -       -
Additions                                                  -         -       -
Transfers from Deferred exploration and evaluation    37,052         -  37,052
costs
Amortisation                                         (2,828)         - (2,828)
At 31 December 2011                                   34,224         -  34,224
Additions                                              2,396         -   2,396
Amortisation                                         (7,108)         - (7,108)
At 30 June 2012                                       29,512         -  29,512







7. Property, plant and equipment

                                                  Office       Assets
                                               equipment    under
                           Plant and    Motor
                                                     and construction
                 Buildings machinery vehicles furniture           ^a    Total

                       $000      $000     $000      $000         $000     $000
Cost
At 1 January 2011     1,167     7,395    2,089       408       67,421   78,480
Additions                 -       452        -         6       14,942   15,400
Disposals                 -       (2)        -         -            -      (2)
At 30 June 2011       1,167     7,845    2,089       414       82,363   93,878
Depreciation
At 1 January 2011     (940)   (2,836)  (1,356)     (271)            -  (5,403)
Charge for year        (44)     (526)    (206)      (29)            -    (805)
^b
Disposals                 -         -        -         -            -        -
At 30 June 2011       (984)   (3,362)  (1,562)     (300)            -  (6,208)
Net book value
At 1 January 2011       227     4,559      733       137       67,421   73,077
At 30 June 2011         183     4,483      527       114       82,363   87,670


Cost
At 1 July 2011        1,167     7,845    2,089       414       82,363   93,878
Additions                 -        22        -       (6)        (295)    (279)
Disposals              (12)     (307)     (44)         -            -    (363)
Re-classification    71,455     8,408      294        88     (80,245)        -
At 31 December       72,610    15,968    2,339       496        1,823   93,236
2011
Depreciation
At 1 July 2011        (984)   (3,362)  (1,562)     (300)            -  (6,208)
Charge for year     (1,590)     (685)    (194)      (29)            -  (2,498)
^b
Disposals                12       308       44         -            -      364
At 31 December      (2,562)   (3,739)  (1,712)     (329)            -  (8,342)
2011
Net book value
At 1 July 2011          183     4,483      527       114       82,363   87,610
At 31 December       70,048    12,229      627       167        1,823   84,894
2011
Cost
At 1 January 2012    72,610    15,968    2,339       496        1,823   93,236
Additions                 -         -        -         -        1,777    1,777
Disposals                 -      (79)        -      (10)            0     (89)
Re-classification         -       121        -         -        (121)        0
At 30 June 2012      72,610    16,010    2,339       486        3,749   94,924
Depreciation
At 1 January 2012   (2,562)   (3,739)  (1,712)     (329)            -  (8,342)
Charge for year     (5,174)   (1,057)    (113)      (34)            -  (6,378)
^b
Disposals                 -        34        -         9            -       43
At 30 June 2012     (7,736)   (4,762)  (1,825)     (354)            - (14,677)
Net book value
At 1 January 2012    70,048    12,229      627       167        1,823   84,894
At 30 June 2012      64,874    11,248      514       132        3,479   80,247

a. Assets under construction at 30 June 2012 comprise $2,509,164 (31 December
2011: $798,727) for building construction and infrastructure, and $969,545 (31
December 2011: $1,023,727) for plant and equipment at Asacha.

b. $157,572 (2011 first half: $794,493) of the depreciation charge related to
property, plant and equipment used on exploration and evaluation projects or
assets under construction and was capitalised in exploration and evaluation
costs or property, plant and equipment in accordance with the Group's
accounting policy.

c. The net carrying amount of property, plant and equipment includes the
following amounts in respect of assets held under finance leases:

                               30 June 2012 30 June 2011 30 December 2011

                                       $000         $000             $000
Plant and machinery                     469            -              437
Motor Vehicles                            -            -                -
Office equipment and furniture            -            -                -
                                        469            -              437



8. Deferred Exploration and evaluation costs

Movements on deferred exploration and evaluation expenditure, by location of
the property, are as follows:

                                 Asacha Rodnikova    Total

                                   $000      $000     $000
At 1 January 2011                27,027     2,848   29,875
Additions ^i                      1,332        18    1,350
At 30 June 2011                  28,359     2,866   31,225
At 1 July 2011                   28,359     2,866   31,225
Additions ^i                      8,693         -    8,693
Transfers to mining properties (37,052)         - (37,052)
At 31 December 2011                   -     2,866    2,866
At 1 January 2012                     -     2,866    2,866
Additions ^i                          -         -        -
At 30 June 2012                       -     2,866    2,866

i Additions include capitalised PPE depreciation (see Note 7^b).



9. Inventories

                             30 June 2012 30 June 2011 31 December 2011

                                     $000         $000             $000
Finished goods                          -            -                -
Gold in progress                    2,844            -            1,246
Silver in progress                     92            -               40
Ore stocks                          6,280            -            4,700
Fuel                                1,314          652            1,838
Other materials and supplies        2,354          144            2,720
At end of period                   12,884          796           10,544



10. Borrowings

                                 30 June 2012 30 June 2011 31 December 2011

                                         $000         $000             $000
Non-current:
Bank borrowings                        23,000       43,061           32,500
Related party - convertible debt            -        6,572                -
Finance lease obligations                 196            -              190
At end of period                       23,196       49,633           32,690

Current:

Bank borrowings             15,500      -  7,477
Related party - other loans    784      -  8,187
Finance lease obligations      166      -    144
At end of period            16,450      - 15,808
                            39,646 49,633 48,498



Movement in borrowings is analysed
as follows:
                                     6 months to  6 months to     12 months to

                                    30 June 2012 30 June 2011 31 December 2011

                                            $000         $000             $000
At beginning of period                    48,498       32,939           32,939
Increase in borrowings                       781       16,452           24,417
Interest on related party loans               71          242              610
Repayment of loans                       (3,288)            -          (3,000)
Conversion of loans to equity            (6,445)            -          (6,802)
Finance leases                                29            -              334
At end of period                          39,646       49,633           48,498



In 2009 ZAO Trevozhnoye Zarevo (TZ) refinanced its initial borrowing for the
Asacha project with a five year $25 million loan facility from Sberbank at an
annual interest rate of 11.75%, reduced to 10.5% in May 2010. Repayments were
scheduled to commence in December 2011, however TZ prepaid the first
instalment in November 2011 and paid the second instalment due in March 2012
in December 2011. In 2010 TZ agreed a further four year loan facility of $18
million for the Asacha project with Sberbank at an annual interest rate of
10.5%. Repayments are scheduled to commence in September 2012.



On 26 October 2010 and 8 April 2011 UFG Asset Management (UFG), a related
party by virtue of its then 53.6% holding in the shares of the Company,
provided TSG with two loan facilities, each of $2 million, on commercial
terms. On 18 April 2011 AngloGold Ashanti Limited (AGA), also a related party
by virtue of its then 30.7% holding in the shares of the Company, agreed to
provide TSG with a loan facility of $2.3 million on commercial terms.



Each of the three loan facilities provided by UFG and AGA in 2010 and 2011 was
repayable in two equal tranches, respectively on the fourth and fifth
anniversaries of the commencement of gold production at Asacha and each
facility agreement included an option for the lender, subject to the requisite
approval of TSG's shareholders, to convert any part of the outstanding loan
into TSG shares at a price equivalent to the volume weighted average price of
TSG's shares for the period of 60 business days prior to notice of such
conversion.



On 8 November 2011, as discussed in Note 15, 4,541,313 ordinary shares were
issued to UFG and AGA in consideration of the conversion of the outstanding
amounts of the above three loan facilities, in aggregate $6,802,279 including
accrued interest.



In September 2011 UFG provided TSG with short term loan facilities amounting
to $5 million on commercial terms, each with the same conversion option as
their previous loans, exercisable prior to scheduled repayment 180 days after
drawdown, comprising loans of $1 million on 1 September 2011, $2 million on 14
September 2011, $1 million on 15 September 2011 and $1 million on 19 September
2011. On 23 September 2011 AGA agreed to provide a short term loan facility of
$3 million on commercial terms, with the same conversion option as the UFG
loans, exercisable prior to scheduled repayment 180 days after drawdown.



In February 2012, as discussed in Note 15, three of the short term loan
facilities provided by UFG and part of the short term facility provided by
AGA, in aggregate $6,445,099 including accrued interest, were converted into
TSG ordinary shares. The fourth UFG facility and the remaining part of the AGA
facility were repaid in March 2012 and April 2012 respectively.



In June 2012 UFG and AGA agreed to provide additional short term facilities,
in aggregate $781,000 million, on commercial terms. The terms of these
facilities were extended to 1 March 2013 as discussed in Note 15, the revised
agreements also including the same lender's conversion option as the
facilities provided in 2010 and 2011.



In consideration of an earlier loan facility provided by UFG in 2009, the
Company also agreed, subject to obtaining the necessary shareholder approvals,
to issue warrants to subscribe for additional TSG shares to UFG on terms to be
agreed and considered as fair and reasonable by the Company's Board (excluding
those directors connected to UFG) after consultation with TSG's Nominated
Adviser. No warrants were issued in 2010, 2011 or 2012 or after the reporting
date.



11. Provisions

                       6 months ended 6 months ended       Year ended

                         30 June 2012   30 June 2011 31 December 2011

                                 $000           $000             $000
At beginning of period            644            331              331
Additions                           -              -              313
Charges                             -              -                -
At end of period                  644            331              644



The above provision relates entirely to site restoration at the Asacha mine,
which is expected to be utilised by 2018 based on the current mineable
resource. The amount of $643,595 (31 December 2011: $643,595) is included in
Mining Properties and is calculated based on regional data from the Monitoring
Ecological Centre of Kamchatka.

12. Revenue

              6 months ended 6 months ended       Year ended

               30 June 2012   30 June 2011 31 December 2011

                       $000           $000             $000
Gold                  20,985              -           11,707
Silver                   456              -              223
Total revenue         21,441              -           11,930



13. Cost of sales

                           6 months ended 6 months ended       Year ended

                            30 June 2012   30 June 2011 31 December 2011

                                    $000           $000             $000
Wages and salaries                  3,752              -            2,996
Energy and materials                2,212              -            2,840
Depreciation and depletion         11,700              -              623
Other costs                         3,925              -            1,690
Total cost of sales                21,589              -            8,149



14. Earnings per share

The calculation of basic and diluted loss per share has been based on the loss
for the period of $3,925,387(2011 first half: $1,049,153) and the weighted
average number of shares being 109,322,774 ordinary shares issued for the
period ended 30 June 2012 (2011 first half: 99,669,370).

15. Share capital and premium

                   Number of       Number of
                                                    Share        Share
                      shares shares allotted      capital      premium   Total

                  authorised  and fully paid         $000         $000    $000
At 1 January     150,000,000      99,669,370       17,323       77,938  95,261
2011
At 30 June 2011  150,000,000      99,669,370       17,323       77,938  95,261
Shares issued
Placing for cash           -       4,541,313          727        6,075   6,802
At 31 December   150,000,000     104,210,683       18,050       84,013 102,063
2011



                 Number of       Number of

                    shares shares allotted Share capital Share premium   Total

                authorised  and fully paid          $000          $000    $000
At 1 January   150,000,000     104,210,683        18,050        84,013 102,063
2012
Shares issued
 Placing for            -       5,842,390           938         5,507   6,445
cash
At 30 June     150,000,000     110,053,073        18,988        89,520 108,508
2012

All shares are ordinary shares with a par value of 10 pence.

On 8 November 2011, 4,541,313 ordinary shares were issued to UFG Asset
Management (UFG) and AngloGold Ashanti Limited (AGA) in settlement of the
Company's indebtedness, in aggregate $6,802,279 including accrued interest.
2,938,890 ordinary shares were issued to UFG, at 93.4 pence per share, and
1,602,423 ordinary shares were issued to AGA, at 93.6 pence per share, in
consideration of the conversion of the outstanding amounts of three loan
facilities as discussed in Note 10.



In February 2012, 5,842,390 ordinary shares were issued to UFG and AGA in
settlement of the Company's indebtedness, in aggregate $6,445,099 including
accrued interest. 3,738,665 ordinary shares were issued to UFG, 2,808,151
ordinary shares on 1 February 2012 at 69.94 pence per share and 930,514
ordinary shares on 3 February 2012 at 69.98 pence per share, and 2,103,725
ordinary shares to AGA, 1,578,620 ordinary shares on 1 February 2012 at 69.98
pence per share and 525,105 ordinary shares on 3 February 2012 at 69.75 pence
per share, in consideration of the conversion of the outstanding amounts of
four loan facilities as discussed in Note 10.



Retained earnings represents the cumulative net gains and losses recognised in
the statement of comprehensive income less any amounts reflected directly in
other reserves.

The share premium account represents the amounts received by the Company on
the issue of its shares which were in excess of the nominal value of the
shares.

16. Related party transactions

There are no related party transactions other than those relating to major
shareholders AngloGold Ashanti Limited (AGA) and UFG Asset Management (UFG) as
detailed below:



                                        Purchases during the 6 Amount owing at
                                                        months
                                                                  30 June 2011
                                               to 30 June 2011
                                                                          $000
Related party Nature of transaction                       $000
AGA           Loan                                       2,330           2,330
              Loan interest                                  7               7
                                                         2,337           2,337
UFG           Loan                                       2,000           4,000
              Loan interest                                186             235
                                                         2,186           4,235
Total                                                    4,523           6,572



                                       Purchases during the 6  Amount owing at
                                                       months
                                                              31 December 2011
                                          to 31 December 2011
                                                                          $000
Related party Nature of transaction                      $000
AGA           Loan                                      3,000            3,000
              Loan interest                               128               61
                                                        3,128            3,061
UFG           Loan                                      5,000            5,000
              Loan interest                               289              126
                                                        5,289            5,126
Total                                                   8,417            8,187



                                        Purchases during the 6 Amount owing at
                                                        months
                                                                  30 June 2012
                                              to 30 June 2012
                                                                          $000
Related party Nature of transaction                       $000
AGA           Loan                                         281             281
              Loan interest                                 24               -
                                                           305             281
UFG           Loan                                         500             500
              Loan interest                                 47               3
                                                           547             503
Total                                                      852             784

Loan facilities provided by UFG and AGA and the conversion of several of those
loan facilities are discussed in Notes 10 and 15 respectively.



The directors of the Company consider that there are no key management
personnel, as defined by IAS 24, Related party transactions, other than the
directors themselves.



17. Events after the reporting date

In September 2012 UFG Asset Management (UFG) and AngloGold Ashanti Limited
(AGA) agreed to extend the term of their two 90 day loan facilities, in
aggregate $781,000, provided to TSG in June 2012, to 1 March 2013. The revised
facility agreements include an option for the lender, subject to the requisite
approval of TSG's shareholders, to convert any part of the outstanding loans
into TSG shares at a price equivalent to the volume weighted average price of
TSG's shares for the period of 60 business days prior to notice of such
conversion.

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR ZMGZLNVGGZZM -0- Sep/27/2012 06:01 GMT