RNS Number:2622U
Kenmare Resources PLC
9 April 2002
Kenmare Resources plc ("Kenmare" or "the Company")
Kenmare Preliminary Results
For the year ended 31st December 2001
9th April 2002
Chairman's Statement
Dear Shareholder,
In my last statement, contained in the 2001 Interim Report, I stated that the
focus of our activities in the coming period would be on financing and
development of the Moma Titanium Minerals Project in Mozambique and on marketing
of the minerals which will be produced at Moma. These tasks are "two sides of
the same coin" as completion of financing requires that a substantial component
of our production be locked up in off-take contracts. Moreover, our potential
customers are keen to see progress in funding prior to committing to off-take
arrangements. We have therefore been engaged in a process of moving both aspects
of this situation forward concurrently.
In January, Kenmare and the Government of Mozambique signed an Implementation
Agreement and a modified Mineral Licensing Agreement. These documents regulate
the operation of the Moma Project through its life and describe precisely the
ongoing relationship with the Government. The signing of these agreements
allowed Kenmare, accompanied by our financial advisors, N. M. Rothschild, to
approach development finance institutions and commercial banks with a financing
plan and a proposal that they participate in the debt funding package.
The responses to these contacts were positive and we have so far received
Expressions of Interest to provide loans totalling US$130 million. These
Expressions have been provided by a group of development finance institutions
which will shortly begin their due diligence processes and commence detailed
negotiations. Kenmare is still awaiting responses from a number of similar
institutions, which are expected to join these processes.
While the global economic slowdown in 2001 was a difficult environment for
market negotiations with customers, substantial progress has been made in
advancing long term product offtake commitments. We anticipate being able to
convert this progress into signed agreements as our financial arrangements firm
up.
The loss for 2001 arises largely from the provision for the remaining value of
the Niassa Gold Mineral Interest. As outlined in the 2001 Interim Report, this
was due the low gold price and the decision to focus Company resources on the
Moma Project.
I would like to welcome Peter McAleer, who joined the board in October 2001.
Peter has extensive experience in financing, development, and running of major
resources projects in several countries and we expect he will make a major
contribution to the Company.
Finally, I see the Placing commitments for €13 million, announced earlier this
week as part of the proposed Placing and Open Offer, as a strong endorsement of
our strategy for Moma. Together with the Expressions of Interest by the
development finance institutions, these are important steps in advancing the
financing of the Moma Project and in advancing project implementation later this
year. I look forward to presenting further detail in the Listing Particulars,
which will be posted to shareholders shortly, and urge you to support the
Placing and Open Offer.
Charles Carvill
Chairman
For further information:
Kenmare Resources plc
Michael Carvill
Managing Director
Tel: +353-1-671 0411 or +353-87-6740110
Tony McCluskey
Financial Director
Tel: +353-1-671 0411 or +353-87-6740346
Murray Consultants
Tom Byrne
Tel: +353-1-632 6400 or +353-86-8104224
Blackstone Business Communications
Tim Blackstone
Tel: +44-207-2512544
www.kenmareresources.com
KENMARE RESOURCES PLC
PRELIMINARY UNAUDITED RESULTS
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31st DECEMBER 2001
2001 2000
€ €
Turnover - -
========== ==========
Operating Expenses (1,116,142) (973,004)
__________ __________
Operating Loss (1,116,142) (973,004)
Interest Receivable 125,732 104,785
__________ __________
Loss On Ordinary Activities Before Taxation (990,410) (868,219)
Taxation - -
__________ __________
Loss On Ordinary Activities After Taxation (990,410) (868,219)
========== ==========
Loss and Fully Diluted Loss Per Share ( 0.53c) ( 0.58c)
========== ==========
KENMARE RESOURCES PLC
PRELIMINARY UNAUDITED RESULTS
CONSOLIDATED BALANCE SHEET
AS AT 31st DECEMBER 2001
Notes 2001 2000
€ €
FIXED ASSETS
Mineral Interests 4 12,637,388 9,095,938
Tangible Assets 5 47,248,301 44,764,682
__________ __________
59,885,689 53,860,620
__________ __________
CURRENT ASSETS
Debtors 87,175 63,435
Cash at Bank and In Hand 1,406,505 1,584,177
__________ __________
1,493,680 1,647,612
CREDITORS:
Amounts falling due within one year (1,684,168) (4,124,286)
__________ __________
NET CURRENT LIABILITIES (190,488) (2,476,674)
__________ __________
TOTAL ASSETS LESS CURRENT LIABILITIES 59,695,201 51,383,946
CREDITORS:
Amounts falling due after one year (1,565,411) (1,215,011)
PROVISION FOR LIABILITIES AND CHARGES (1,447,331) (1,489,215)
__________ __________
56,682,459 48,679,720
========== ==========
CAPITAL AND RESERVES
Called Up Share Capital 23,470,869 23,025,358
Share Premium Account 18,499,848 14,113,837
Profit and Loss Account - (Deficit) (26,076,491) (25,086,081)
Revaluation Reserve 35,799,751 34,905,209
Other Reserve 4,132,696 1,721,397
Capital Reserve 855,786 -
__________ __________
Shareholders' Funds 56,682,459 48,679,720
========== ==========
KENMARE RESOURCES PLC
PRELIMINARY UNAUDITED RESULTS
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31st DECEMBER 2001
Notes 2001 2000
€ €
Net cash (outflow)/inflow from operating activities 6 (71,685) 1,360,651
__________ __________
Returns on Investments & Servicing of Finance
Interest received 125,732 104,785
__________ __________
Net cash inflow from Returns on Investment & 125,732 104,785
Servicing of Finance
__________ __________
Capital expenditure & financial investment
Addition of Mineral Interests (3,973,937) (3,983,834)
Purchase of Tangible Fixed Assets - (9,259,278)
__________ __________
Net cash outflow from capital expenditure & (3,973,937) (13,243,112)
financial investment
__________ __________
Net cash outflow before use of liquid resources &
financing (3,919,890) (11,777,676)
__________ __________
Financing
Issue of Ordinary Share Capital 6,138,132 9,107,024
Cost of share issues (450,824) (826,480)
Finance Lease (17,481) 37,842
Debt due within one year (2,294,621) 3,572,940
Debt due beyond a year 367,012 1,192,579
__________ __________
Net cash inflow from financing 3,742,218 13,083,905
__________ __________
(Decrease)/Increase in cash (177,672) 1,306,229
========== ==========
KENMARE RESOURCES PLC
PRELIMINARY UNAUDITED RESULTS
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31st DECEMBER 2001
2001 2000
€ €
Loss attributable to Group shareholders (990,410) (868,219)
Revaluation of Tangible Fixed Assets - 34,905,209
Currency Translation Movement 3,305,841 471,392
__________ __________
Total Recognised Gains and Losses for the year 2,315,431 34,508,382
========== ==========
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
FOR THE YEAR ENDED 31st DECEMBER 2001
2001 2000
€ €
Total Recognised Gains and Losses for the year 2,315,431 34,508,382
Issue of Shares- at par 1,301,297 3,172,627
Share premium, net of costs 4,386,011 5,107,916
__________ __________
Net change in Shareholders' funds 8,002,739 42,788,925
Opening Shareholders' funds 48,679,720 5,890,795
__________ __________
Closing Shareholders' funds 56,682,459 48,679,720
========== ==========
KENMARE RESOURCES PLC
PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31st DECEMBER 2001
NOTES TO THE PRELIMINARY ACCOUNTS
Note 1. Basis of Accounting
The preliminary accounts have been prepared in euro under the historical cost
convention, as modified by the revaluation of certain fixed assets, and in
accordance with the accounting policies set out on page 22 of the 2000 Annual
Report and Accounts.
Note 2. Basis of Preparation
The financial information presented above does not constitute statutory accounts
within the meaning of the Companies Acts, 1963 to 2001. An audit report has not
yet been issued on the accounts for the year ended 31st December 2001, nor have
they been delivered to the Registrar of Companies. The comparative financial
information for the year ended 31st December 2000 has been derived from the
statutory accounts for the year. Those statutory accounts, upon which the
auditors have issued an unqualified opinion, have been filed with the Registrar
of Companies.
Note 3. Earnings Per Ordinary Share
The calculation of the loss and fully diluted loss per share is based on the
loss after taxation of €990,410 (2000 - €868,219) and the weighted average
number of shares in issue during 2001 of 187,405,370 (2000 - 149,961,746
shares).
Note 4. Mineral Interests
The recovery of deferred development expenditure is dependent upon the
successful development of economic ore reserves, which in turn depends on the
availability of adequate funding. A full provision of €1,328,570 has been made
for the remaining value of the Niassa Gold deferred development expenditure. The
Directors are satisfied that deferred expenditure is worth not less than cost
less any amounts written off and that the exploration projects have the
potential to achieve mine production and positive cash flows.
Note 5. Tangible Assets
Tangible Assets are stated at cost or valuation less accumulated depreciation.
GRD Minproc Limited, an independent Australian engineering group, has appraised
the Mining and Processing Plant on a depreciated replacement cost basis of
valuation as at 30 June 2000. An inspection of the Mining and Processing Plant
was carried out by GRD Minproc Limited in March 2002 concluding that no material
alteration to the plants had taken place. The recovery of the plant valuation is
dependent upon the successful development of the Moma Titanium Minerals Project,
which in turn depends on the availability of adequate funding being made
available. The historical cost net book value of these assets at 31 December
2001 is €9,211,789. The surplus arising on revaluation amounts to €35,799,751.
KENMARE RESOURCES PLC
PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31st DECEMBER 2001
NOTES TO THE PRELIMINARY ACCOUNTS
Note 6. Reconciliation of Operating Loss to Net Cashflow from Operating Loss to
Net Cashflow from Operating Activities
2001 2000
€ €
Operating Loss (1,116,142) (973,004)
Depreciation 13,058 40,707
(Increase)/Decrease in debtors (23,740) 1,552
Decrease in operating creditors (144,628) (47,942)
(Decrease)/Increase in Provision for Liabilities & Charges (41,884) 1,489,215
Impairment/Write off of Mineral Interests 1,328,570 971,027
Exchange (Gain) on translation of Fixed Assets (3,392,760) (592,295)
Exchange Loss on translation of Revaluation Reserve 894,542 -
Exchange Loss on translation of Subsidiaries 2,411,299 471,391
__________ __________
Net Cash Flow from Operating Activities (71,685) 1,360,651
========== ==========
Note 7. Analysis of Net Debt
At 1 Jan 2001 Cash Flow At 31 Dec 2001
€ € €
Cash at Bank and in hand 1,584,177 (177,672) 1,406,505
Debt due after 1 year (1,192,579) (367,011) (1,559,590)
Debt due within 1 year (3,572,940) 2,294,621 (1,278,319)
__________ __________ __________
(3,181,342) 1,749,938 (1,431,404)
========== ========== ==========
Note 8. Reconciliation of Net Cashflow to Movement in Net Debt
2001 2000
€ €
(Decrease)/Increase in cash during the year (177,672) 1,306,229
Outflow/(Inflow) from movements in debt & lease financing 1,927,610 (4,765,519)
__________ __________
Movement in net debt in the year 1,749,938 (3,459,290)
Net debt at start of year (3,181,342) 277,948
__________ __________
Net debt at end of year (1,431,404) (3,181,342)
========== ==========
Note 9. 2001 Annual Report and Accounts
The Annual Report and Accounts will be posted to shareholders in due course.
END
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