Wits Gold - Summarised audited results for the ten months ended 31 December 2011

Witwatersrand Consolidated Gold Resources Limited
("Wits Gold" or the "Company")
(Registration Number 2002/031365/06)
JSE Share Code: WGR          ISIN: ZAE000079703
TSX Share Code: WGR  CUSIP Number: S98297104

All figures quoted in South African Rand unless otherwise stated.
Bank of Canada noon rate at 26 March 2011: R7.66 = CAD$1; 31 December 2011: R7.94 = CAD$1; (28 February 2011: R7.14 = CAD$1)

JOHANNESBURG, March 30, 2012 /PRNewswire/ - The financial statements have been prepared under the supervision of the financial director, Mr DM Urquhart (CA (SA)).

Statement of financial position as at 31 December 2011

Statement of comprehensive income for the ten months ended 31 December 2011

Statement of changes in equity for the ten months ended 31 December 2011

*Additional expenses relating to the capital raised in the prior year.

Statement of cash flows for the ten months ended 31 December 2011

Nature of business
Witwatersrand Consolidated Gold Resources Limited (registration number 2002/031365/06) is a company domiciled in the Republic of South Africa. The Company's shares are publicly traded in South Africa on the JSE Limited securities exchange (primary listing), and in Canada on the Toronto Stock Exchange (secondary listing). The Company carries on the business of acquiring, preserving, evaluating, trading and developing Prospecting Rights for exploration and investment purposes. In addition, the Company has submitted a Mining Right application to the Department of Mineral Resources (DMR) with the intention of undertaking mining operations in due course.

The Company has been granted 14 Prospecting Rights by the DMR under the Mineral and Petroleum Resources Development Act of 2002. One of these Rights has been impaired in total and is being handed back to the State. Three renewal applications for Prospecting Rights were granted during the period under review. A further renewal application was submitted to the DMR in November 2011 and is being processed in terms of the abovementioned Act. The Company has submitted a Mining Right application for its combined De Bron - Merriespruit Project (DBM Project) to the DMR and they have accepted the application subject to Wits Gold complying with obligations in terms of feasibility studies, environmental compliance and social and labour plan commitments. Wits Gold has not, and does not in the near future, expect to generate any operating income from its projects. Mineral exploration is highly speculative due to a number of significant risks, including the possible failure to discover mineral deposits that are sufficient in quantity and quality to justify the completion of feasibility studies. Additional work will be undertaken in order to determine if any economic deposits occur on any of the Company's properties.

The ongoing exploration of the Company's Prospecting Rights is dependent upon the Company's ability to obtain additional financing through the joint venturing of projects, debt financing, equity financing or other means. In future, such sources of financing may not be available on acceptable terms, if at all. The Company has, however, been successful in the past in raising the required capital from its shareholders to fund its operating and exploration activities.  Wits Gold intends raising additional capital during the course of its 2012 financial year in order to be able to settle its obligations with respect to the planned purchase of Evander Gold Mines Limited (Evander), as discussed below under subsequent events, and to fast track the development of its DBM Project.

Operational review*
During the period under review, the Company continued to focus its exploration efforts predominantly in the southern Free State goldfield, however some additional studies were initiated in the Potchefstroom and Klerskdorp goldfields in order to better plan the future exploration activities in these areas. The Company complies with the rehabilitation procedures agreed to at the time the DMR grants the relevant Prospecting Right and has provided bank guarantees in the amount of R320 000 (February 2011: R310 000) to the DMR as security to cover these obligations.

The directors are not aware of any legal proceedings or other material conditions that may impact on the Company's ability to continue its exploration activities, other than the ability to raise additional financing as noted above.

Southern Free State goldfield
Between March 2011 and September 2011, nine diamond drill boreholes were completed within the DBM Project, achieving a total of some 9 500 metres at a total cost of some R12 million.  In addition a single borehole within the Bloemhoek Project, drilled at a cost of just over R2 million was completed to a depth of 1 860 metres in December 2011, the assay results of which are awaited. In February, Snowden Mining Industry Consultants Inc, published a NI43-101 and Samrec compliant Independent Technical Report dated February 24, 2012, incorporating the results from the abovementioned DBM drilling into a revised Resource Estimate for DBM including the Merriespruit area. This increased the Indicated Resource by 27% to 41.8Mt at 5.5g/t Au (7.5Moz), and the Inferred Resource consequently decreased to 19.5Mt at 5.4g/t Au (3.4Moz). In addition to gold, the uranium resource was also updated to reflect an Indicated Resource of 21.7Mt at 0.17Kg/t U₃0₈ (8.2Mlb) and an Inferred Resource of 12.5Mt at 0.17Kg/t U₃0₈ (4.6Mlb).  These resources were estimated using all available borehole data and sample widths corrected for dip. No metal equivalent calculations were made.  Analyses of borehole core were undertaken at SGS South Africa (Proprietary) Limited, an accredited laboratory (accreditation number T0169), during which the Company's standard sampling and QA/QC policies were adopted.

Exploration in this area has continued to be concentrated on the shallow DBM Project where gold mineralisation is associated with the Beatrix, Kalkoenkrans, B and Leader Reefs at depths of between 500 and 1 450 metres below surface. The recent drilling programme at DBM was aimed at more precisely locating both the De Bron Fault, which serves as the western limit of the project area and the eastern subcrop position of the reefs, as well as infilling sparsely drilled areas in order to upgrade resources from the Inferred Category to the Indicated Category.

The resultant DBM Indicated gold Resource has now been defined from the results of 97 boreholes drilled over an area of some 22.0 km² and is considered representative of the mineralisation in this area. The Company has therefore contracted Turgis Consultanting (Proprietary) Limited to undertake a Pre-feasibility Study (PFS), based on the relevant Indicated Resources, to assess the viability of establishing a mine.  The results of this study are expected to become available during the second quarter of 2012 and will provide guidance for any future exploration requirements in this area. The Section 102 application to include the Merriespruit South area, acquired from Harmony Gold Mining Company Limited (Harmony), has been lodged with the DMR in order to complete the consolidation of the DBM Project area. As at the date of this report, the DMR had not yet completed the process of transferring the Merriespruit property to Wits Gold and the R51 million balance of the purchase price remains outstanding to Harmony, until such time as the transfer has been finalised.

The Potchefstroom goldfield 
No further diamond drilling was undertaken in this area during the period under review.   A 3-dimensional structural analysis of the Boskop Project has been initiated in order to optimally position boreholes planned for late 2012.

The Klerksdorp goldfield
A desk-top study of the Klerksdorp goldfield is in progress, in order to highlight areas where the Vaal Reef is shallower than 5 000 metres below surface.

Mineral Resources
The Company's declared Mineral Resources are estimated by qualified independent geologists or Competent Persons.  These Resource Estimates are dependent on geological interpretation and statistical inferences drawn from drilling and sampling that may prove to be unreliable.  The Inferred or Indicated Resources outlined in the Company's properties have been calculated from widely-spread borehole data.  No assurance can be given that future exploration will be successful in the improvement of the confidence levels or that any particular level of recovery of minerals will in fact be realised.  It is uncertain whether the identified Mineral Resources will ever qualify as a viable orebody that can be economically exploited.  In addition, the grade and tonnages of any orebody that may ultimately be mined may differ from the Mineral Resources currently estimated and such differences could be material.

For further information concerning the locality of the Company's Mineral Resources, including information concerning the geology, mineral occurrences, nature of mineralisation, geological controls, rock types, historical work including data density, the application of quality assurance and quality control measures, sampling and analytical procedures, the names of analytical laboratories employed and the key assumptions, parameter and methods used to estimate the Mineral Resources at the Company's various projects, please see the Company's NI43-101 and Samrec compliant Independent Technical Reports dated November 2007, June 2008, May 2009, June 2009,  October 2009, May 2010, August 2011 and February 2012 which can be viewed at www.sedar.com and on the Company's web site, www.witsgold.com. The information referred to in this paragraph has not changed materially except as stated above.

Despite the historic exploration work on the Company's remaining Prospecting Rights, other than the DBM and Bloemhoek Projects, no other known bodies of commercial ore or economic deposits have been determined. Additional work will be required in order to determine if any economic deposits occur on these properties.

Qualified Person
The technical and scientific information contained in this release was reviewed by Qualified Person, Dirk Jacobus Muntingh, who is a full time employee of the Company.  Mr Muntingh (MSc Geology) is a registered Professional Natural Scientist (Pr.Sci.Nat) with the South African Council for Natural Scientific Professionals (SACNASP) and has 21 years of experience in gold exploration.

* - The information in the section "Operational review" has not been audited by KPMG Inc.

Financial Review
The Company changed its year end to 31 December 2011 and accordingly the current financial results relate to the ten months then ended, whilst the comparative figures relate to the year ended 28 February 2011.

Results from operating activities
The loss from operating activities for the ten months under review increased by R10.5 million compared to the prior year. This increase results mainly from the impairment of one of its Prospecting Rights to the amount of R1.1 million (February 2011: Rnil) and the increase in employment related expenditure (R9.3 million). The latter has mainly arisen from an increase in the non-cash cost entries required to account for the employee share scheme (R5.6 million) and an increase in the cash cost element of employee remuneration (R3.8 million) which included the severance benefit paid to the outgoing Chief Executive Officer.

Loss before income tax
The loss before taxation increased by R9.8 million which results from the increased loss from operating activities mentioned above, offset by the increase in interest received of R0.8 million. Interest income increased compared to the previous year, due to the increased funds invested during the ten months under review.

Non-current assets
During the ten months under review, the Company incurred direct exploration expenditure in the amount of R23.8 million (February 2011: R316.1 million) which has been capitalised to intangible exploration and evaluation assets. This expenditure included Rnil (February 2011: R285 million) on the acquisition of Rights. The Company impaired the entire carrying amount of one of its low priority Prospecting Rights amounting to R1.1 million (February 2011: Rnil).

Current assets
The Company's cash and cash equivalents decreased by R34.6 million (February 2011: R60.5 million increase) which reflects the normal operational and exploration outflows offset by interest received.

Current liabilities
The main contributor to the R1.5 million increase in current liabilities was the R2 million incorrect refund of taxation paid, offset by a R0.2 million reduction in provisions for rehabilitation.

Commitments
The Company has committed to spend approximately R9.4 million (February 2011: R1.4 million) on professional consultants during the next year. Furthermore the Company has also committed to spend R55.5 million (February 2011: R55.5 million) on the acquisition of exploration properties and R15.5 million (February 2011: R17.6 million) on exploration activities during the next five years. All of these commitments will be funded out of existing cash resources.

Litigation
There are no legal or arbitration proceedings in which the Company is or has been engaged, which may have or have had, a material effect on the Company's financial position.

Dividends
No dividends were declared or paid by the Company during the period under review (February 2011: nil).

Basis of preparation
These summarised  financial results for the ten months ended 31 December 2011 comply with the recognition and measurement requirements of International Financial Reporting Standards, the presentation and disclosure requirements of IAS 34, Interim Financial Reporting, AC500 series and the South African Companies Act of 2008.  The accounting policies are consistent with those applied in the previous financial year.  They do not include all the information required for full annual financial statements and should be read in conjunction with the financial statements for the ten months ended 31 December 2011.

The Company consists of only one segment and there have been no changes to the composition of the entity.  There has been no reclassification or correction of errors and no changes in accounting estimates. The Company does not have any contingent assets or liabilities.  No material related party transactions have been identified, apart from those disclosed under "subsequent events".

Subsequent events
On 30 January 2012 the Company together with Pan African Resources Plc (PAR), signed an agreement to jointly acquire Evander from Harmony for R1.7 billion. The agreement is conditional on the fulfilment of a number of conditions precedent, including the approvals from shareholders, the Department of Mineral Resources as well as the Competition Commission and raising bank debt. The purchase price will be settled by means of bank debt at the Evander level as well as cash to be provided by Wits Gold and PAR. The two Joint Venture partners will effectively each acquire 50% of Evander and the partners will jointly manage Evander

The valuation date of the transaction is 31 March 2012 and any dividends distributed to Harmony from profits generated from this date to the date of the fulfilment of the last condition precedent, will reduce the R1.7 billion purchase price.  Harmony disclosed in its half year results to 31 December 2011 that Evander produced just over 54 000 ounces of gold and had an operating profit of R338 million for the six months.

Mr KV Dicks was appointed as a non-executive director with effect from 5 March 2012.

Mr Dicks, a mining engineer of background, has 39 years' experience working in the South African mining industry, having held a number of senior positions within Anglo Gold.  He presently also serves on the boards of Harmony Gold Mining Limited and Bauba Platinum Limited.

Going concern
Due to the inherent risk in the nature of exploration activities, there may be uncertainty regarding the recoverability of the Company's exploration expenditure. To meet its ongoing obligations and maintain its operations, the Company will periodically seek to raise additional equity funding which will be premised on the exploration results and the contingent further exploration plans. This will generally be in the form of the issuance of additional Company shares, both to local and international markets. In this regard the Company currently intends to undertake a capital raising during 2012 in order to obtain the required funds to settle its potential obligations for the Evander acquisition and to enable it to fast track its DBM Project. Should the Company fail to raise the required funds, the Evander acquisition will not take place and the management of Wits Gold will make the appropriate adjustments to the Company's planned future expenditure until such time as further funding is obtained. These adjustments will ensure that the Company can continue as a going concern for the foreseeable future.

After making enquiries, the directors have reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the annual report and financial statements.

Audit report
These summarised financial statements have been extracted from the complete set of financial statements on which the auditors, KPMG Inc. have expressed an unqualified audit opinion. KPMG has also issued an unqualified audit report on these summarised financial statements stating that these summarised results are consistent, in all material respects, with the complete financial statements. A copy of the auditor's report is available for inspection at the Company's registered office.

Forward-looking information
Certain statements in this release may constitute forward-looking information within the meaning of securities laws. In some cases, forward looking information can be identified by use of terms such as "may", "will", "should", "expect", "believe", "plan", "scheduled", "intend", "estimate", "forecast", "predict", "potential", "continue", "anticipate" or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management's future outlook and anticipated events or results, and may include statements or information regarding the future plans or prospects of the Company. Without limitation, statements about the timing of a preliminary economic assessment are forward-looking information. Without limitation, statements about the timing of a pre-feasibility study, the anticipated period in which the grant of a Mining Right may be expected, and the effective date of the Evander transaction are forward-looking information.

Forward looking information involves known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward looking information. Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa; decreases in the market price of gold; hazards associated with underground and surface gold mining; the ability to attract and retain qualified personnel; labour disruptions; changes in laws and government regulations, particularly environmental regulations and Mineral Rights legislation including risks relating to the acquisition of the necessary licences and permits; changes in exchange rates; currency devaluations and inflation and other macro-economic factors; risk of changes in capital and operating costs, financing, capitalisation and liquidity risks, including the risk that the financing required to fund all currently planned exploration and related activities, potential obligations for the Evander acquisition and to fast track the DBM Project may not be available on satisfactory terms, or at all; and the ability to maximise the value of any economic resources. These forward-looking statements speak only as of the date of this release.

You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The Company undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events except where required by applicable laws.

For and on behalf of the Board

Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd

Business and Registered Office
12^th Floor, 70 Fox Street, Johannesburg, 2001
PO Box 61147, Marshalltown, 2107
Tel (011) 832 1749   Fax (011) 838 3208

Directors
Mr Adam Fleming (Chairman)*, Prof Taole Mokoena (Deputy Chairman)*, Dr Humphrey Mathe (Director)*, Mrs Gayle Wilson (Director)*, Mr K Dicks (Director)*, Mr P Kotze (Chief executive officer), Mr Derek Urquhart (Financial director)
* Non-Executive

Company Secretary
Mr Brian Dowden
7 Pam Road, Morningside Ext 5, Sandton, Johannesburg 2057
PO Box 651129, Benmore, 2010. South Africa

Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Limited
2 Eglin Rd, Sunninghill 2157
Private Bag X37, Sunninghill 2157, South Africa

Transfer Secretaries
JSE: Link Market Services SA (Pty) Limited
TSX: CIBC Mellon Trust Company

SOURCE Wits Gold