RNS Number:1650Q
Kenmare Resources PLC
31 August 2000
Kenmare Resources plc ("Kenmare" or "the Company")
Interim Results for the Six Months Ended 30 June, 2000
* Separator Plant for Moma Titanium Project purchased from BHP
* Definitive Feasibility Study for Moma on schedule for completion in 2000
* Stg#3.0 million raised in share placing
* Dismantling of Moma Concentrator Plant nearing completion
* Balance Sheet boosted by purchase of Separator and Concentrator
At our EGM on 9 August shareholders voted to ratify the purchase of a minerals
processing plant from BHP and the second tranche of a placing, which in total
raised circa Stg#3m net of placing expenses. In doing so, you have taken
Kenmare another significant step closer to the development of the Moma
Titanium Mine. The purchase, like the earlier purchase of a minerals
concentrator plant from BHP, arose from a highly unusual set of circumstances;
BHP had no further use for these plants and due to their highly specific
nature no real alternative market existed. Assisted by BHP allowing us to
stage the payments, two of the three essential mining and processing elements
required for the project have now been procured.
The dismantling, transporting to the port of Bunbury and packing for export of
the Concentrator Plant is almost complete. The Definitive Feasibility Study
(DFS) is progressing well and is on schedule to finish before the end of the
year. Work to date suggests that the majority of the findings in the
Pre-Feasibility Study will be confirmed by the DFS and indeed some should be
improved on. Over the coming months, in addition to completing the DFS, we
will be focusing our efforts on securing marketing contracts and commencing
funding discussions.
In the balance sheet included with this interim report, the combined carrying
value of the Concentrator Plant and Minerals Separation Plant is stated at
A$69 million (IR#34 million). This valuation was calculated from first
principles by an independent engineering group on the basis of depreciated
replacement cost. It is stated in accordance with Financial Reporting Standard
15, which is the relevant accounting standard. In addition, our auditors have
reviewed the financial information included for the six months to 30 June,
2000, as set out in their report on page 7. The Directors consider that it is
appropriate to use this valuation as it reflects the worth of these assets to
Kenmare.
In summary, between now and the end of the year, we plan to complete the
dismantling of the Concentrator Plant, make progress on developing marketing
arrangements with customers and complete our DFS on Moma.
Charles Carvill
Chairman
31 August, 2000
CHAIRMAN'S STATEMENT
The Group's Consolidated Profit & Loss Account for the six months ended 30
June 2000 is as follows:
6 Months 6 Months 12 Months
30-06-00 30-06-99 31-12-99
Unaudited Unaudited Audited
IR# IR# IR#
Turnover - 1,429,920 2,130,633
Cost of Sales - (1,405,365) (2,351,573)
-----------------------------------------------
Gross Profit/(Loss) - 24,555 (220,940)
Other Operating Expenses (295,833) (1,016,665) (2,976,072)
Other Operating Income - 8,409 8,409
-----------------------------------------------
Operating Loss (295,833) (983,701) (3,188,603)
Interest Receivable 17,736 1,740 2,031
Interest Payable - (55,352) (113,388)
-----------------------------------------------
Loss On Ordinary Activities
Before Taxation (278,097) (1,037,313) (3,299,960)
Taxation - - -
-----------------------------------------------
Loss On Ordinary Activities
After Taxation (278,097) (1,037,313) (3,299,960)
===============================================
Loss per share (0.20p) (0.95p) (2.93p)
===============================================
CONSOLIDATEDPROFIT AND LOSS ACCOUNT
The Group's Consolidated Balance Sheet as at 30 June 2000 is as follows:
6 Months 6 Months 12 Months
30-06-00 30-06-99 31-12-99
Unaudited Unaudited Audited
IR# IR# IR#
FIXED ASSETS
Mineral Interests 5,658,111 4,384,335 4,801,755
Tangible Assets 34,330,038 9,534,526 27,381
-----------------------------------------------
39,988,149 13,918,861 4,829,136
-----------------------------------------------
CURRENT ASSETS
Stock - 828,963 -
Debtors 1,995,373 391,979 51,181
Cash at Bank and In Hand 483,417 87,993 218,902
-----------------------------------------------
2,478,790 1,308,935 270,083
CREDITORS: Amounts falling due
within one year (4,016,821) (1,340,792) (459,841)
-----------------------------------------------
NET CURRENT LIABILITIES (1,538,031) (31,857) (189,758)
-----------------------------------------------
TOTAL ASSETS LESS CURRENT
LIABILITIES 38,450,118 13,887,004 4,639,378
CREDITORS: Amounts falling due
after one year (3,344,730) (8,080,204) -
-----------------------------------------------
35,105,388 5,806,800 4,639,378
===============================================
CAPITAL AND RESERVES
Called Up Share Capital 17,352,277 15,063,273 15,635,296
Share Premium Account 9,706,773 6,700,186 7,092,739
Profit and Loss Account
- (Deficit) (19,351,213) (16,810,469) (19,073,117)
Other Reserve 974,235 853,810 984,460
Revaluation Reserve 26,423,316 - -
-----------------------------------------------
Shareholders' Funds 35,105,388 5,806,800 4,639,378
===============================================
CONSOLIDATED
BALANCE SHEET
The Group's Cash Flow Statement for the six months ended 30 June 2000 is as
follows:
CASH FLOW STATEMENT
6 Months 6 Months 12 Months
30-06-00 30-06-99 31-12-99
Unaudited Unaudited Audited
IR# IR# IR#
Net cash inflow/(outflow) from
operating activities 1,323,240 (1,105,463) (1,926,027)
-----------------------------------------------
Returns on investment and servicing of finance
Interest received 17,736 1,740 2,031
Interest payable - (55,352) (113,388)
-----------------------------------------------
Net cash inflow/(outflow)
from returns on Investment
& servicing of finance 17,736 (53,612) (111,357)
-----------------------------------------------
Capital expenditure & financial investment
Addition of Mineral Interests (856,356) (260,812) (363,265)
Addition of Tangible Fixed
Assets (7,895,850) (3,344) (3,344)
Fixed Assets of Excluded
Subsidiary - - 8,227,298
Disposal of Tangible Fixed
Assets - 10,675 10,675
-----------------------------------------------
Net cash (outflow)/inflow
from capital expenditure
& financial investment (8,752,206) (253,481) 7,871,364
-----------------------------------------------
Net cash (outflow)/inflow
before use of liquid
resources & financing (7,411,230) (1,412,556) 5,833,980
-----------------------------------------------
Financing:
Issue of Ordinary Share
Capital 4,814,114 - 993,095
Cost of share issue (483,099) (6,950) (35,468)
Debt due beyond a year 3,344,730 1,119,172 (6,961,032)
-----------------------------------------------
Net cash inflow/(outflow)
from financing 7,675,745 1,112,222 (6,003,405)
-----------------------------------------------
Increase/(Decrease) in cash 264,515 (300,334) (169,425)
===============================================
STATEMENT OF TOTAL
RECOGNISED
The Group's Statement of Recognised Gains and Losses for the six months ended
30 June 2000 is as follows:
GAINS AND LOSSES
6 Months 6 Months 12 Months
30-06-00 30-06-99 31-12-99
Unaudited Unaudited Audited
IR# IR# IR#
Loss attributable to Group
shareholders (278,097) (1,037,313) (3,299,960)
Currency Translation Movement (10,224) 312,187 442,836
Movement on Revaluation
Reserve 26,423,316 - -
-----------------------------------------------
Total Recognised Gains and
Losses for the period 26,134,995 (725,126) (2,857,124)
===============================================
Notes to the Interim Financial Statements
1. Basis of Preparation of Interim Financial Statements
The Interim Statement has been prepared applying the accounting policies set
out on page 22 of the 1999 Annual Report and Accounts, save that Mining &
Processing Plant is stated at valuation on the basis of depreciated
replacement cost. The surplus arising on revaluation has been taken to
revaluation reserve.
The following is the accounting policy note in respect of Tangible Assets:
Tangible Assets are stated at cost or valuation less accumulated depreciation.
Depreciation is calculated by equal annual instalments so as to provide for
their cost or valuation over the period of their expected useful lives at the
following annual rates:
Plant & Equipment 5% - 25%
Buildings 5%
Motor Vehicles 20%
Office Equipment and Fixtures 10% - 33.3%
Mining & Processing Plant Unit of production basis
The unaudited interim financial information in this statement has been
reviewed by the auditors in respect of the six months ended 30th June 2000
only and their Report to the Directors is set on page 7.
2. Loss and Fully Diluted Loss per Share
The calculation of the loss and fully diluted loss per share is based on the
loss after taxation of IR#278,097 (1999: IR#1,037,313) and the weighted
average number of shares in issue during the six months ended 30th June 2000
of 139,014,117 (1999: 109,190,842 shares).
3.Tangible Assets
Tangible Assets are stated at cost, with the exception of Mining & Processing
Plant, comprising a Minerals Concentrator Plant and Minerals Separation Plant.
The cost of these assets amounts to IR#7,644,439 (A$14,787,361). GRD Minproc
Limited, an independent Australian engineering group, has valued the Mining &
Processing Plant on a depreciated replacement cost basis as at June 2000. This
valuation amounts to IR#34,330,038 (A$69,204,200).The recovery of this amount
is dependent upon the successful development of the Moma Project, which in
turn depends on the availability of adequate funding being made available.
4. Non - Consolidation of Subsidiary Undertaking
As set out in detail in Note 8 of 1999 Annual Report, Grafites de Ancuabe,
S.A.R.L., a subsidiary company, has been excluded from consolidation from 31st
December 1999.
Review Report to the Board of Directors of Kenmare Resources Plc
Interim Financial Information - Six months ended 30th June 2000
Introduction
We have been instructed by the company to review the financial information set
out on pages 3 to 6 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the Directors.The Listing
Rules of the Irish Stock Exchange and of the UK Listing Authority require that
the accounting policies and presentation applied to the interim figures should
be consistent with those applied in preparing the preceding annual accounts
except where any changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board. A review consists principally
of making enquiries of management and applying analytical procedures to the
financial information and underlying financial data and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed in
accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly we do not express an audit opinion on the
financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2000.
Deloitte & Touche
Chartered Accountants
Deloitte & Touche House
Earlsfort Terrace
Dublin 2
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