WEST AFRICA’S NEWEST LARGE GOLD PRODUCER Notes to the Consolidated Financial Statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued  (n)  Exploration and evaluation expenditure (o)  Trade and other payables (p) Borrowings (q)  Borrowing Costs 54 Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is  required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the  liability for at least 12 months after the reporting period.  Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged,  cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or  transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed,  is recognised in profit or loss as other income or finance costs. Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured  at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is  recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the  establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probably that some  or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there  is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment  for liquidity services and amortised over the period of the facility to which it relates. These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year that  are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are  presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised  initially at their fair value and subsequently measured at amortised cost using the effective interest method.  Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant  exploration and evaluation asset is tested for impairment and the balance is then reclassified as ‘assets under construction’  (note 1(m)).  In the event that an area of interest if abandoned or, if facts and circumstances suggest that the carrying amount of an  exploration and evaluation asset is impaired (as outlined in 1(g)) then the accumulated costs carried forward are written  off in the year in which the assessment is made. Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,  exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of  assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement  of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest. Exploration and evaluation expenditures in relation to each separate area of interest with current tenure are carried  forward to the extent that: •  such expenditures are expected to be recouped through successful development and exploration of the  area of interest, or alternatively, by its sale; or •  exploration and evaluation activities in the area of interest have not at the reporting date reached a stage  which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves,  and active and significant operations in, or in relation to, the area of interest is continuing. For the year ended 30 June 2011