Highlights in Brief Report on the First Quarter Financial Statements for the Period Ending March 2012
August 12th, 2011
- Gold prices rose to the mid $1,500 per ounce range. The exchange rate remained at the 80 yen level.
- An increase in net assets through a debt-equity swap
1. Qualitative Information Regarding Consolidated Management Performance
The situation of the world economy during the cumulative consolidated first quarter from April 1st, 2011 to June 30th, 2011 (for the five North America’s consolidated subsidiaries, the performance from January 1st, 2011 to March 31st, 2011 is included due to their different account closing dates) became extremely severe, reflecting growing concerns about sovereign risk in European countries, Standard & Poor’s lowering of its outlook on the U.S. long-term credit rating, and speculation about the possibility of a third round of quantitative easing by the U.S. Federal Reserve Board.
These changes in the world economy have been relatively favorable for gold prices. The blue line in the chart below shows that gold prices in the first quarter consolidated results moved though the mid $1,300 per ounce range in early January and pushed through the mid $1,400 range in March. April saw gold prices in the low the $1,400 range, followed by a rise to the mid $1,500 range in June.
The red line on the chart below indicates that the yen to US dollar currency exchange rate started at 83 yen in early January. It temporarily fell below 80 yen in mid-March in part due to the aftermath of the Great East Japan Earthquake, but subsequently remained mostly at the 80 yen level.
In this environment, our gold production entered a recovery phase. Also, the average yen-dollar exchange rate was lower than our initial projection of 80 yen in the consulted first quarter results of its affiliates in North America (from January 1st, 2011 to March 31st, 2011). As a consequence, earnings were as follows:
2. Qualitative Information Regarding Consolidated Financial Situation
The total net asset value amounted to 2.178 billion yen, a 1.407 billion yen increase from the end of the previous consolidated accounting period. This result is due to an increase in capital and capital surplus of 750 million yen through a debt equity swap and an increase of 149 million yen in foreign currency translation adjustment.
Qualitative Information Regarding Consolidated Earnings Forecast
In the gold mining segment, the commencing of operations at Standard Mine are about two months behind the plan, but mining activities have been proceeding as planned. Moreover, processing work at Florida Canyon Mine is expected to continue, allowing us to maintain stable production.
The consolidated earnings forecast for the full business year and the accumulated period for first half has not been changed since the earning forecast disclosed on May 13th, 2011.