RNS Number:5173U
BDI Mining Corp
05 April 2007
5 April 2007
BDI Mining Corp ("BDI" or "the Company")
Preliminary Results for the year ended 31 December 2006
BDI announces today preliminary results for the year ended 31 December 2006.
Highlights during 2006:
* Successful completion of the construction and commissioning of the
process plant expansion project at Cempaka
* Initial diamond production from the Cempaka Main Channel
* Increased resources discovered at Danau Seran
* Recovery of rare blue diamond from Cempaka
* +1 million oz JORC compliant resource delineated at the 100%-owned
Woodlark Island gold project in Papua New Guinea; and,
* Internal Woodlark scoping study completed with positive results.
David Lenigas, Chairman said: "I am pleased to announce these significant
achievements during 2006 for BDI Mining Corp. They will underpin the future
growth of the Company, and as 2007 progresses, it is hoped that this success
will continue."
For further information, please contact:
BDI Mining Corp.
David Lenigas (Chairman) Tel: +44 (0) 788 182 5378
Martin Horgan (Director) Tel: +44 (0) 777 867 0342
Corporate Affairs Tel: +61 (0) 448 812 128
General email info@bdiminingcorp.com
Website www.bdiminingcorp.com
Ruegg & Co. (AIM Nominated Advisor)
Brett Miller Tel: +44 (0) 20 7584 3663
Hichens, Harrison & Co. (Joint AIM Broker)
Dave Paxton/Adam Wilson Tel: +44 (0) 20 7382 4473
WH Ireland Ltd. (Joint AIM Broker)
Philip Haydn-Slater Tel: +44 (0) 20 7220 1690
Parkgreen Communications
Justine Howarth / Clare Irvine Tel: +44 (0) 20 7851 7480
Chairman's Statement
A total of 50,821 carats of high-value gem diamonds from the Cempaka mine were
sold in the year under review, generating revenues of US$10.5 million.
The expansion of Cempaka's processing plant capacity from 28,000 bank cubic
meters (BCM's) per month to 50,000 BCM's was successfully completed on time and
budget during 2006. This modular expansion allows greater operating flexibility
and has been designed to enable future increases in production capacity to be
implemented quickly and easily.
Further, during 2006 initial diamond production from the Main Channel was
completed and over 700 carats were recovered and sold - the diamonds recovered
appeared to be of larger stone size and generally whiter in colour when compared
to those recovered from the Danau Seran channel. As at the date of this report
an additional 1,300 carats have been recovered from the Main Channel further
increasing confidence in the long term potential of Cempaka's operations.
Exploration drilling in late 2006 confirmed a previously undiscovered extension
to the Danau Seran channel - the evaluation of which is continuing. Operations
at Danau Seran were scheduled to be completed in early 2007, but with this
exploration success diamond production at Danau Seran could continue into early
2008.
Of particular interest during 2006 was the recovery of a rare blue diamond from
the Danau Seran channel. The diamond was christened the "Chelsea Blue" and
further underpinned Cempaka's growing reputation as a producer of high quality
fancy coloured stones.
While many of the planned improvements and expansions at Cempaka were
successfully implemented, the current diamond market conditions are weaker than
those enjoyed during 2005. This resulted in an average price received for
diamonds sold of US$207/ct compared to US$299/ct in 2005 - It is management's
belief that the diamond market will improve in the medium to longer term. Given
the short term conditions in the diamond market, management is focused on
further expanding operations at Cempaka to optimise the mining of the resource
and maximise profit through delivering operating cost savings. Accordingly, 2007
will see further expansion planning to fully deliver the long term potential of
the Cempaka Main Channel.
The Company's continued exploration efforts at the advanced Woodlark Island gold
project in Papua New Guinea, culminated in a JORC compliant resource of over 1
million ounces being announced. The Company subsequently completed a strategic
review of the Woodlark Project with a view to determining the next phase of its
development - the resulting positive Scoping Study underpinned management's
belief in the Woodlark Project.
Management is now evaluating a further drilling program which would add to the
existing identified resource base in the open pittable category which in turn
would significantly add to the economic robustness of the project.
Given the future expansion requirements of Cempaka and the continued exploration
expenditure at Woodlark, the Board is currently evaluating several funding
options for the Company.
With a successful 2006 completed, BDI Mining Corp is focused on building on the
operational knowledge gained during the first full calendar year of operations
at Cempaka to realise its full potential.
I would like to use this opportunity to thank all Directors, staff, consultants,
advisers and stakeholders, whose backing and hard work during 2006 were the
driving force behind your Company's success. Without this support, the continued
progress and growth of BDI Mining Corp would definitely not be possible.
On behalf of the Board of Directors and management, let me say that we look
forward to the challenging but exciting period ahead, and be assured that your
Company is well-positioned to create value for you, its shareholders, through
these two exciting projects.
David Lenigas
Non-Executive Chairman
5 April 2007
Consolidated Income Statement
For the Year Ended 31 December 2006
Notes Year Year
Ended Ended
2006 2005
US$ US$
Continuing Operations
Revenue 10,914,388 5,793,645
Selling expenses (1,145,582) (591,437)
Net Revenue 9,768,806 5,202,208
Cost of Sales (11,023,416) (4,581,103)
Gross (Loss)/Profit (1,254,610) 621,105
Operating expenses
General and administrative - Corporate 1,723,873 1,375,165
General and administrative - Cempaka 872,608 892,445
Depreciation of fixtures and equipment 310,965 4,562
Write-down of diamond inventory - 58,637
Stock-based employee compensation costs 415,820 36,572
(3,323,266) (2,367,381)
Operating loss (4,577,876) (1,746,276)
Other
Investment revenue 92,739 98,582
Financing cost - (1,129,944)
Foreign exchange gain/(loss) 356,641 (1,290,127)
Loan Waiver 849,325 -
Loss for the year from continuing operations (3,279,171) (4,067,765)
Deficit, beginning of the year (45,904,636)(42,291,432)
Foreign exchange on opening net assets 240,597 454,561
Lapsing of stock based employee compensation 119,953 -
Deficit, end of year (48,823,257)(45,904,636)
Earnings per share
From continuing operations:
Basic 2 (0.03) (0.05)
Diluted 2 (0.03) (0.05)
Consolidated Balance Sheet
At 31 December 2006
2006 2005
US$ US$
Assets
Non-current assets
Property, plant and equipment 3,368,827 1,385,971
Intangible assets 13,337,115 8,061,584
16,705,942 9,447,555
Current assets
Inventories 2,187,745 4,045,308
Trade and other receivables 701,608 988,119
Cash and cash equivalents 2,134,469 2,368,483
5,023,822 7,401,910
Total assets 21,729,764 16,849,465
Equity and liabilities
Capital and reserves
Share capital - -
Share premium 63,988,138 55,073,296
Share warrants reserve 1,252,762 1,168,742
Share options reserve 2,439,821 2,227,974
Retained earnings (48,823,257)(45,904,636)
Total equity 18,857,464 12,565,376
Non-current liabilities
Long term loan 979,550 2,500,000
Provision for project rehabilitation 180,843 229,171
1,160,393 2,729,171
Current liabilities
Trade and other payables 1,711,907 1,554,918
Total liabilities 2,872,300 4,284,089
Total equity and liabilities 21,729,764 16,849,465
Consolidated Statement of Recognised Income and Expense
For the Year Ended 31 December 2006
2006 2005
US$ US$
Exchange differences on translation of foreign operations 240,597 454,561
Net income recognised directly in equity 240,597 454,561
Lapsing of stock based employee compensation 119,953 -
Loss for the year (3,279,171) (4,067,764)
Total recognised income and expense for the year (2,918,621) (3,613,203)
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2006
Share Share
Share warrants Options Retained
capital reserve reserve earnings Total
US$ US$ US$ US$ US$
At 1 January 2006 55,073,296 1,168,742 2,227,974 (45,904,636) 12,565,376
Exchange differences - - - 240,597 240,597
arising on translation
of foreign operations
at 1 January 2006
Loss for the year - - - (3,279,171) (3,279,171)
Share capital issued 8,914,842 - - - 8,914,842
Share-based payments - 84,020 211,847 119,953 415,820
At 31 December 2006 63,988,138 1,252,762 2,439,821 (48,823,257) 18,857,464
In January 2006, 250,000 warrants were issued to Ocean Resources Capital
Holdings Plc exercisable at GB#0.35 (USD0.62) on or before 31 January 2009. The
cost of the warrants which have been expensed in 2006 has been calculated using
the Black-Scholes valuation method as USD84,020 (GB#47,536).
In March 2006 the Company completed a placement of 16,000,000 common shares at
GB#0.28, raising USD7,264,167.
In July 2006, the Company granted options to purchase 1,960,000 shares to
directors and certain senior management. Half the options are exercisable at
GB#0.35 per share with the remainder exercisable at GB#0.50 per share on or
before 14 July 2011. The cost of the options which have been expensed in 2006
has been calculated using the Black-Scholes valuation model as USD314,905
(GB#171,284).
In December 2006 the Company issued 2,900,000 common shares at GB#0.29 per share
to Ocean Resources Capital Holdings Plc, in exchange for the cancellation of a
US$2.5 million non-interest bearing loan to Ashton-MMC Pte Ltd, a Singapore
registered subsidiary of BDI Mining Corp.
In December 2006, 950,000 options which had been previously issued to staff and
service providers were cancelled as they ceased to provide services to the
Company. The amount credited to retained profit was calculated as US$119,953.
During the year 150,000 options which had previously been incorrectly recorded
as having expired in 2005 were correctly adjusted. The amount debited to the
income statement was calculated as US$16,895.
Consolidated Cash Flow Statement
For the Year Ended 31 December 2006
As restated
2006 2005
US$ US$
Operating Activities
Loss for the year (3,279,171) (4,067,765)
Adjustments for:
Foreign exchange on shareholder loan - (83,162)
Finance costs - share based payment - 1,129,944
Depreciation of property, plant and equipment 199,260 109,408
Amortisation of intangible assets 201,746 123,160
Share based payment expense 415,820 36,577
Write down of diamond inventory - 58,637
Investment revenue 92,739 98,582
Investment revenue relating to operating activities (92,739) (98,582)
Loss on disposal of fixed assets - 6,268
Loan waiver (849,325) -
Operating cash flows before movement in
working capital (3,311,670) (2,686,933)
Decrease/(increase) in inventories 1,857,563 (3,159,630)
Decrease/(increase) in receivables 286,511 (696,111)
Increase in payables 108,661 884,742
Net cash from operating activities (1,058,935) (5,657,932)
Investing Activities
Capitalised expenditure on intangible assets (5,477,277) (4,741,458)
Acquisition of property, plant and equipment (2,182,116) (540,589)
Net cash used in investing activities (7,659,393) (5,282,047)
Financing activities
Proceeds on issue of shares 7,264,167 11,726,138
Share issuance costs - (792,232)
Share based payments for share issuance costs - 35,995
Proceeds on issue of warrants - 508,392
Proceeds on issue of options - 303,284
Proceeds on issue of convertible loan 979,550 -
Net cash from financing activities 8,243,717 11,781,577
Net increase/(decrease) in cash and cash equivalents (474,611) 841,598
Cash and cash equivalents at the beginning of the year 2,368,483 1,072,324
Effect of foreign exchange rate changes 240,597 454,561
Cash and cash equivalents 2,134,469 2,368,483
Notes:
1. Basis of preparation
The financial information set out in this announcement does not constitute the
company's statutory accounts for the years ended 31 December 2006 and 2005.
Except as shown below, the financial information for the year ended 31 December
2006 has been prepared using the accounting policies which are consistent with
those adopted in the audited accounts for the year ended 31 December 2005. The
financial information for the year ended 31 December 2005 is derived from the
statutory accounts for that year. The auditors have reported on the 2005
accounts; their report was unqualified. The auditors have yet to sign their
report on the 2006 accounts. However, as in the previous year the auditors are
intending to include the following paragraph at the end of their report:
"In formulating our opinion, which is not qualified, we have considered the
adequacy of the disclosure made in the financial statements concerning the
Group's ability to continue as a going concern. The Group incurred a net loss
of USD 3,279,171 for the year ended 31 December 2006. In order to finance the
Group's continued operations, the Group may need to return to the market for
further financing, which could be seen to cast doubt over the Group's ability to
continue as a going concern. The financial statements do not include the
adjustments that would result if the Group was unable to continue as a going
concern."
The statutory accounts for the year ended 31 December 2006 will be finalised on
the basis of the financial information presented by the Directors in this
preliminary announcement. The financial information set out in this announcement
was approved by the Board of Directors on 5 April 2007.
The Company has adopted the following accounting policy in respect of foreign
currencies:
The individual financial statements of each group entity are presented in the
currency of the primary economic environment in which the entity operates (its
functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each entity are expressed in US dollars,
which is the functional currency of the Company, and the presentation currency
for the consolidated financial statements.
In preparing the financial statements of the individual entities, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary items denominated in foreign
currencies are retranslated at the rates prevailing on the balance sheet date.
Non-monetary items carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing on the date when the fair
value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not translated.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in profit or loss for the period.
Exchange differences arising on the retranslation of non-monetary items carried
at fair value are included in the income statement for the period except for
differences arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such non-monetary
items, any exchange component of that gain or loss is also recognised directly
in equity.
For the purpose of presenting consolidated financial statements, the assets and
liabilities of the Group's foreign operations (including comparatives) are
expressed in US dollars using exchange rates prevailing on the balance sheet
date. Income and expense items (including comparatives) are translated at the
average exchange rates for the period, unless exchange rates fluctuated
significantly during that period, in which case the exchange rates at the dates
of the transactions are used. Exchange differences arising, if any, are
classified as equity and transferred to the Group's translation reserve. Such
translation differences are recognised in the income statement in the period in
which the foreign operation is disposed of.
2. Earnings per share
The calculation of the basic earnings per share attributable to the common
equity holders of the parent Company is based on the following data:
Earnings 2006 2005
US$ US$
Earnings for the purposes of basic and (3,279,171) (4,067,065)
diluted earnings per share; loss for the year
attributable to equity holders of the parent
company
Number of shares 2006 2005
# #
Weighted average number of common shares for 94,054,917 74,672,880
the purposes of basic earnings per share
Effect of dilutive potential common shares - 14,110,000 12,200,000
share options and warrants
Weighted average number of common shares for 108,164,917 86,872,880
the purposes of diluted earnings per share
This information is provided by RNS
The company news service from the London Stock Exchange
END
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