CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 2008
(Expressed in Canadian Dollars, unless otherwise stated) (unaudited)
ANOORAQ RESOURCES CORPORATION
Consolidated Balance Sheets
(Expressed in Canadian Dollars) June 30 2008 (unaudited) Assets Current assets Cash and equivalents Amounts receivable Prepaid expenses December 31 2007
$
1,140,359 337,630 40,436 1,518,425 1,330,949 408,061 9,126,896
$
7,131,821 167,779 101,409 7,401,009 368,146 105,494 9,078,714
Deferred acquisition costs Equipment (note 4) Mineral property interests (note 5) $
12,384,331
$
16,953,363
Liabilities and Shareholders' Equity Current Liabilities Accounts payable and accrued liabilities Due to related parties (note 8) Current portion of term loan (note 6)
$
549,408 101,294 767,022 1,417,724 8,931,210 10,348,934
$
475,102 45,609 1,892,197 2,412,908 9,806,636 12,219,544
Term loan (note 6)
Shareholders' equity Share capital Contributed surplus Deficit
52,722,340 18,188,166 (68,875,109) 2,035,397
51,855,350 13,254,905 (60,376,436) 4,733,819
Nature of operations (note 1) Commitments (note 7(c)) Proposed transaction (note 10 ) $ See accompanying notes to consolidated financial statements Approved by the Board of Directors /s/ Philip Kotze Philip Kotze Director /s/ Iemrahn Hassen Iemrahn Hassen Director 12,384,331 $ 16,953,363
ANOORAQ RESOURCES CORPORATION
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited - Expressed in Canadian Dollars)
Three months ended June 30 2008 2007 Expenses Accounting, audit and legal Accretion on term loan Conference and travel Consulting Exploration (schedule) Foreign exchange loss (gain) Gain on disposal of fixed assets Interest expense Interest income Office and administration Salaries and benefits Stock-based compensation - office and administration Stock-based compensation - exploration Shareholders communications Trust and filing Loss before the following Future income tax recovery Loss for the period Other comprehensive loss Total Comprehensive Loss Basic and diluted loss per share Weighted average number of common shares outstanding
See accompanying notes to consolidated financial statements
Six months ended June 30 2008 2007 $ 114,546 $ 44,385 241,138 128,890 128,468 (612,815) (5,736) 906,493 (135,459) 464,353 1,705,087 5,232,693 – 98,451 189,179 8,499,673 (1,000) 8,498,673 – 8,498,673 $ 0.05 $ 140,242 51,959 122,276 85,434 81,888 (327,346) – 959,292 (432,039) 202,437 963,220 1,044 401 131,981 199,001 2,179,790 (2,000) 2,177,790 – 2,177,790 0.01
$
$ $
35,117 $ 20,483 188,412 106,908 70,098 299,021 (5,736) 463,873 (40,734) 287,981 689,525 5,110,375 – 53,986 26,332 7,305,641 – 7,305,641 – 7,305,641 $ 0.04 $
37,457 26,011 19,154 6,705 48,868 (65,098) – 516,116 (212,261) 111,225 633,466 – – 73,614 57,403 1,252,660 (1,000) 1,251,660 – 1,251,660 0.01
$ $
185,253,743
154,821,467
185,235,828
151,542,901
ANOORAQ RESOURCES CORPORATION
Consolidated Statements of Shareholders' Equity
(Expressed in Canadian Dollars) Six months ended June 30, 2008 (unaudited) Share capital Balance at beginning of the period Share purchase options exercised at $1.40 per share Share purchase options exercised at $0.95 per share Share purchase options exercised at $2.97 per share Fair value of stock options allocated to shares issued on exercise Common shares issued Balance at end of the period Contributed surplus Balance at beginning of the period Stock-based compensation Fair value of stock options allocated to shares issued on exercise Balance at end of the period Deficit Balance at beginning of the period Loss for the period Balance at end of the period
Number of shares Number of shares
Year ended December 31, 2007
185,208,607 360,000 – 21,400 – – 185,590,007
$
$
51,855,350 504,000 – 63,558 299,432 – 52,722,340
148,220,407 883,200 100,000 5,000 – 36,000,000 185,208,607
$
$
50,207,363 1,236,480 95,000 14,850 301,657 – 51,855,350
$
$
13,254,905 5,232,693 (299,432) 18,188,166
$
$
4,849,043 8,707,519 (301,657) 13,254,905
$ $
(60,376,436) (8,498,673) (68,875,109)
$ $
(46,080,305) (14,296,131) (60,376,436)
TOTAL SHAREHOLDERS' EQUITY See accompanying notes to consolidated financial statements
$
2,035,397
$
4,733,819
ANOORAQ RESOURCES CORPORATION
Consolidated Statements of Cash Flows
(Unaudited - Expressed in Canadian Dollars)
Three months ended June 30 2008 2007 Operating activities Loss for the period Items not involving cash Amortization included in exploration expenses Accretion on term loan Future income tax recovery Accrued interest on term loan (note 6) Stock-based compensation Gain on disposal of equipment Unrealized foreign exchange gain Equity loss from interest in Ga-Phasha project (note 5) Changes in non-cash operating working capital Amounts receivable Amounts due to and from related parties Prepaid expenses Accounts payable and accrued liabilities Cash and equivalents used by operating activities Investing activities Purchase of equipment Proceeds received on disposal of equipment Deferred acquisition costs Equity investment Cash and equivalents used by investing activities Financing activities Issuance of common shares Payment of term loan interest Cash and equivalents provided by (used by) financing activities Effect of exchange rate changes on cash and equivalents Decrease in cash and equivalents Cash and equivalents, beginning of period Cash and equivalents, end of period $ (7,305,641) $ 10,287 20,483 – 408,455 5,110,375 (5,736) 249,860 91,001 (88,078) (224,739) 21,066 253,073 (1,459,594) (1,251,660) 4,534 26,011 (1,000) 439,852 – – 61,000 17,667 (27,749) 16,176 41,353 (34,556) (708,372)
Six months ended June 30 2008 2007 $ (8,498,673) $ 18,118 44,385 (1,000) 799,430 5,232,693 (5,736) (563,249) 11,818 (169,851) 55,685 60,973 74,306 (2,941,101) (2,177,790) 9,268 51,959 (2,000) 851,760 1,445 – (102,000) 36,470 2,948 (7,942) 65,069 (830,671) (2,101,484)
(131,340) 23,724 (623,823) – (731,439)
(4,864) – – (12,194) (17,058)
(338,673) 23,724 (962,803) – (1,277,752)
(7,420) – – (24,907) (32,327)
504,000 – 504,000 75,238 (1,611,795) 2,752,154 1,140,359 $
416,300 – 416,300 (524,659) (833,789) 10,954,055 10,120,266
567,558 (1,777,979) (1,210,421) (562,188) (5,991,462) 7,131,821 $ 1,140,359 $
535,300 – 535,300 (1,056,369) (2,654,880) 12,775,145 10,120,266
$
Supplementary information Interest paid Interest received Taxes paid Non-cash operating, financing and investing activities Fair value of options allocated to shares issued on exercise
See accompanying notes to consolidated financial statements
$ $ $
– $ (40,734) $ – $
– (212,261) –
$ $ $
1,777,979 $ (135,459) $ – $
– (432,039) –
$
40,232
$
65,292
$
299,432
$
122,135
ANOORAQ RESOURCES CORPORATION
Consolidated Schedules of Exploration Expenses
(Unaudited - Expressed in Canadian Dollars) Republic of South Africa Northern Limb of the Bushveld Complex Amortization Assays and analysis Engineering Geological and consulting Graphics Property fees and assessments (recovery) Property option payments Site activities Transportation $ Three months ended June 30 2008 2007 10,287 $ – 6,426 54,816 1,348 (9,219) (126) 23,396 (25,719) 61,209 4,534 (2,227) 11,407 21,436 100 (22,599) 26,940 3,348 3,358 46,297 $ Six months ended June 30 2008 2007 18,118 $ – 11,354 56,661 3,286 (10,664) 10,406 25,292 9,358 123,811 9,268 200 19,784 26,561 2,084 (22,599) 32,548 5,429 3,358 76,633
Eastern Limb of the Bushveld Complex Geological and consulting Graphics Property fees and assessments
12 (454) 9,331 8,889 70,098 – 70,098 26,040,433 26,110,531
2,571 – – 2,571 48,868 – 48,868 23,646,735 23,695,603
4,657 – – 4,657 128,468 – 128,468 25,982,063 26,110,531
5,255 – – 5,255 81,888 401 82,289 23,613,314 23,695,603
Exploration expenses before the following Stock-based compensation Exploration expenses Cumulative expenditures, beginning of period Cumulative expenditures, end of period
$
$
$
$
See accompanying notes to consolidated financial statements