RNS Number:1435R
Braemore Resources PLC
31 March 2008
31 March 2008
Braemore Resources Plc
("Braemore" or "the Company")
Interim results for the six months to 31 December 2007
Braemore Resources Plc (AIM: BRR) announces its interim financial results for
the six months to 31 December 2007.
Highlights
* 6,115oz PGMs produced in first three months of production.
* Acquired remaining share capital of subsidiary Independence Platinum.
* Deals to acquire further sources of material completed.
Hamish Bohannan, CEO of Braemore Resources, said:
"We have had a very productive year, both in terms of our corporate efforts and
our metals output. We look forward to a year ahead as a platinum producer, and
to making progress toward becoming a nickel producer in the near future."
The Company's interim financial results follow, and are also available on the
Company's recently upgraded website, at www.braemoreresources.com.
Enquiries:
For further information, please contact:
Braemore Resources Plc Investec Bank (UK) Limited
Mr Hamish Bohannan Gerard Kisbey-Green
Managing Director Tel: +44 20 7597 5167
Tel (Office): +61 8 9218 8833
Tel (Mobile):+61 419 234 770
Mirabaud Securities Parkgreen Communications
Rory Scott Justine Howarth / Erica Nelson
Tel: +44 20 7878 3410 Tel +44 20 7851 7480
Notes to Editors:
Braemore Resources Plc is a public company listed on the Alternative Investment
Market of the London Stock Exchange. The Company operates through its two
subsidiaries, Western Consolidated Nickel Pty Limited ("WCN") and Independence
Platinum Limited ("Independence"). These subsidiaries have recently been renamed
Braemore Nickel Pty Limited and Braemore Platinum Limited, respectively.
Leinster Tailings Project
WCN has the sole right to conduct pilot plant test work and a definitive
feasibility study on the reclamation and processing of sulphide nickel tailings
at BHP Billiton's nickel operations at Leinster, in Western Australia, the
"Leinster Tailings Project".
Independent consultant to Braemore, CSA Australia (Pty) Limited ("CSA
Australia"), has completed a resource statement for three of the tailings
storage facilities making up the Leinster Tailings Project. A JORC compliant
Mineral Resource estimate of 29.6 million tonnes of sulphide nickel tailings at
an average grade of 0.46% nickel has been determined, containing 135,000 tonnes
of nickel. The Tailings Supply Agreement entered into between WMC Resources Ltd
(a subsidiary of BHP Billiton and Atomaer Australia Pty Limited (the Braemore
appointed Manager of the Leinster Tailings Project - see below) also provides
exclusive rights to BHP Billiton to purchase all nickel product from the
Leinster Tailings Project that complies with the product specifications.
The Leinster Tailings Project development program is managed by Atomaer
Australia Pty Limited ("Atomaer") under agreement with Braemore with the
objective of determining and optimising the technical and economic parameters
for the process for the exploitation of the tailings. Testwork programs at
Outotec in Pori, Finland, demonstrated high recoveries of nickel and associated
by-product metals could be achieved. Final testwork programs are now underway in
Finland combining Outotec and Atomaer technologies to optimise metal recoveries
and in South Africa to optimise acid recovery and recycling conditions. A final
test report detailing the results of the test programme is expected to be
completed by Atomaer in July.
ConRoast Technologies
Through Independence, Braemore is implementing plans to evaluate, establish and
operate independent base metals refining facilities for the smelting and
refining of sulphide concentrates containing platinum group metals ("PGMs") from
emerging platinum producers in South Africa.
This strategy is firmly founded on the Company's exclusive rights to the
ConRoast technology patented by Mintek, the state-owned minerals research
organisation in South Africa. ConRoast technology is not only more
cost-effective from a capital and operating cost point of view, but it is more
environmentally friendly than existing technology, and can deal with
concentrates with high chrome levels, which can adversely affect the process
used by current smelting technology.
Braemore commenced PGM production in October having secured a lease over a 3MW
DC arc furnace at Mintek to establish a demonstration facility for the ConRoast
technology process ("ConRoast Process"). Production to date has run smoothly
demonstrating both the economics and environmental credentials of the ConRoast
Process.
A feasibility study for the first 10MW ConRoast facility is currently being
undertaken in South Africa and is scheduled for completion in April 2008. This
first facility is being specifically designed to target high chrome UG2 PGM
concentrates which are more difficult to treat through conventional smelting
processes but are ideally suited to the ConRoast Process.
Chairman's Statement
On behalf of the Board, I am pleased to report the results and operating
activities of Braemore Resources Plc for the six months to 31 December 2007.
We have had a very productive year, both in terms of our corporate efforts and
our metals output. We began the period with high nickel yields from leach
testing at our Leinster tailings project in Western Australia ("Leinster Tailing
Project"), and commenced commercial production at our smelting facility through
our exclusively licensed ConRoast technology process at Mintek in Johannesburg,
South Africa.
The loss for the six months to 31 December 2007 was �1,015,000 (2006: �543,000).
The increased loss is due to increased administration expenses as the activity
in the company has changed from being development to operating. Net assets
increased by �1.6 million to �43.0 million reflecting the increased investments
in the development of the projects in Australia and South Africa which are near
completion. Current assets include Inventory of �4.4 million, being alloy
produced at the Mintek smelter, which has an estimated net realisable value of
�4.6 million net of refining charges. These revenue and cash flows will be
reflected in the second half of the year. Current liabilities increased to �2.5
million due to trade payments due in respect of the feed material purchased for
the smelter.
On the corporate side, in September the Board appointed Mark Rosslee to the post
of Chief Financial Officer, joining us from Central African Gold Plc. Mark has
previously held roles with Metallon Gold Pty Ltd, SouthernEra Diamonds Inc,
Southern Platinum Corp., and De Beers, and brings a dozen years of corporate and
operational experience to complement our already strong team.
In September, we became a member of the exclusive club of platinum group metal
("PGM") producers, with our first production of PGM alloys at Mintek. In our
first week we produced approximately 353 ounces of PGM content, an average
recovery of 98%. We maintained this level of production through the period, with
2,764 tonnes smelted between October and December, resulting in a total 4E
production of some 6,115 ounces by the end of 2007.
Total Oct Nov Dec
Tonnes Smelted 2,764 849 943 972
Production 4E (PGM) Oz 6,115 1,333 2,622 2,160
Recovery Build Up Recovery 4E % 98.4% 96.6% 99.1% 99.4%
In November, our testwork at Outotec's research facilities in Pori, Finland for
the extraction of nickel from our Leinster Tailings Project resulted in our
first production of nickel in solution which allowed production of nickel
sulphide as required under the Tailings Supply Agreement between WMC Resources
Ltd and Atomaer Australia Pty Limited (the Braemore appointed Manager of the
Leinster Tailings Project) and also the electro-plating of high grade nickel
metal. By-products of copper, cobalt, and zinc were also separated and recovered
into solution. The final development steps are currently underway with the
combination of Atomaer and Outotec technologies at Outotec's facilities in Pori,
Finland, to optimize leaching and recovery steps and through Atomaer in South
Africa to optimise acid recovery and recycling processes.
Braemore also made headway into securing future sources of material for its PGM
smelting project, signing a Memorandum of Understanding with Tharisa Minerals, a
South African PGM prospector, and Heads of Agreement with Pan Palladium Limited,
an Australian listed company with prospecting rights to the Grass Valley
Platreef Project in South Africa.
The Board recognizes the need to continue to secure sources of feed material for
use in the ConRoast technology process, and to this end continues to negotiate
potential deals to support its operations with established producers and
exploration companies.
Just prior to the end of 2007, we acquired the remaining 5% interest in our
subsidiary Independence Platinum Limited ("Independence"), in return for
Braemore shares. This establishes Braemore as the 100% owner of Independence
with no initial cash outlay, a move which the Board believes this presents good
value for Braemore's existing shareholders.
In the next twelve months, the Company will continue to actively pursue new
agreements for the supply of feed to the Company's ConRoast smelting facility,
as well as initiate construction of two new smelters to develop an enlarged PGM
smelting production capacity. Efforts are underway to accelerate progress on the
feasibility studies in Western Australia, and we look forward to reporting on
the results of our work in the near future.
I would like to take the opportunity to thank the Board and management team for
all of their efforts, and I look forward to working with them as we progress.
I'd also like to thank our shareholders for their continued support.
Over the next 18 months, we aim to become a leading producer of PGMs from
high-chrome concentrates with the commissioning of further smelters in South
Africa using our ConRoast technology, and to produce nickel from tailings at our
Leinster Tailings Project through our off-take agreement with BHP Billiton.
Already in 2008 we have made significant steps toward our goals and will
continue to do so in the coming months.
We look forward to a year ahead as a platinum producer, and to making progress
toward becoming a nickel producer in the near future.
David Humann
Chairman, Braemore Resources
31 March 2008
Independent Review Report to Braemore Resources Plc
Introduction
We have been engaged by the Company to review the accompanying Consolidated
Balance Sheet of Braemore Resources Plc as of 31st December 2007 and the related
Consolidated Statements of Income, Changes in Equity and Cash Flows for the
six-month period then ended and related notes. We have read the other
information contained in the interim financial report and considered whether it
contains any apparent misstatements or material inconsistencies with the
information in the financial statements.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the Directors. The Directors are
responsible for preparing the interim report in accordance with the AIM rules
for Companies which require that the financial information must be presented and
prepared in a form consistent with that which will be adopted in the next annual
financial statements.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the interim report based on our review. This
report, including the conclusion, has been prepared for and only for the Company
for the purpose of the AIM rules for Companies and for no other purpose. We do
not, in producing this report, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into whose hands
it may come save where expressly agreed by our prior consent in writing.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity", issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion herein.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying interim financial information is not prepared, in all
material respects, in accordance with the basis of preparation set out in the
Notes to the Interim Report and the AIM rules for Companies.
CHAPMAN DAVIS LLP
Chartered Accountants
London
31st March 2008
Consolidated Income Statement
For the half year ended 31st December 2007
Notes Reviewed Reviewed Audited
Half-year Half-year Year ended
ended ended 30 June 2007
31 Dec 2007 31 Dec 2006
�'000 �'000 �'000
Administration expenses (1,197) (362) (934)
Share options expensed - (257) (257)
---------- --------- ----------
Operating Loss (1,197) (619) (1,191)
Interest income 182 76 268
---------- --------- ----------
Loss on ordinary activities
before (1,015) (543) (923)
taxation
Income tax expense 4 - - -
---------- --------- ----------
Loss for the financial period (1,015) (543) (923)
---------- --------- ----------
Attributable to:
Equity holders of the parent (1,015) (543) (921)
Minority interests - - (2)
---------- --------- ----------
(1,015) (543) (923)
---------- --------- ----------
Notes Reviewed Reviewed Audited
Half-year Half-year Year ended
ended ended 30 June 2007
31 Dec 2007 31 Dec 2006
Loss per share: 6
Basic - expressed in pence (0.15p) (0.10p) (0.16p)
---------- --------- ----------
All of the operations are considered to be continuing.
Consolidated Balance Sheet
At 31st December 2007
Notes Reviewed Reviewed Audited
31 Dec 2007 31 Dec 2006 30 June 2007
�'000 �'000 �'000
ASSETS
Non-current assets
Intangible assets 7 36,974 31,443 33,191
Plant and equipment 103 5 36
Trade and other receivables 37 - 43
---------- --------- ----------
37,114 31,448 33,270
---------- --------- ----------
Current assets
Trade and other receivables 679 95 322
Cash and cash equivalents 3,358 3,044 8,570
Inventory 4,387 - -
---------- --------- ----------
8,424 3,139 8,892
---------- --------- ----------
TOTAL ASSETS 45,538 34,587 42,162
---------- --------- ----------
LIABILITIES
Current liabilities
Trade and other payable 2,547 216 792
---------- --------- ----------
---------- --------- ----------
NET ASSETS 42,991 34,371 41,370
---------- --------- ----------
EQUITY
Issued capital 993 848 977
Share premium 11,995 4,734 11,990
Merger reserve 31,835 29,395 29,395
Other reserves 812 814 814
Minority interest - 19 17
Foreign exchange reserve 188 - (6)
Retained losses (2,832) (1,439) (1,817)
---------- --------- ----------
TOTAL EQUITY 42,991 34,371 41,370
---------- --------- ----------
Consolidated Cash Flow Statement
For the half year ended 31st December 2007
Reviewed Reviewed Audited
Half-year Half-year Year ended
ended ended 30 June 2007
31 Dec 2007 31 Dec 2006
�'000 �'000 �'000
OPERATING ACTIVITIES
Operating loss (1,197) (619) (1,191)
Adjustment to reconcile profit before
tax
to net cash flows
Non-cash:
Depreciation 5 - 1
Foreign exchange adjustment 87 - (43)
Share options expensed - 257 257
Working capital adjustments
(Increase) in debtors (351) (22) (311)
Increase / (decrease) in creditors 1,771 (13) (67)
(Increase) in inventory (4,387) - -
---------- --------- ----------
Net cash inflows used in operating
activities (4,072) (397) (1,354)
INVESTING ACTIVITIES
Payments to acquire plant and equipment (72) - (27)
Payments to acquire intangible assets (1,253) (557) (1,643)
Interest received 182 76 268
---------- --------- ----------
Net cash outflow from investing
activities (1,143) (481) (1,402)
FINANCING ACTIVITIES
Net proceeds from issue of shares 3 - 7,404
---------- --------- ----------
Net cash inflow from financing 3 - 7,404
---------- --------- ----------
Net increase/(decrease) in cash (5,212) (878) 4,648
and cash equivalents
Cash and cash equivalents at beginning
of 8,570 3,922 3,922
period ---------- --------- ----------
Cash and cash equivalents at end of
period 3,358 3,044 8,570
---------- --------- ----------
Consolidated Statement of Changes in Equity
For the half year ended 31st December 2007
Issued Share Merger Share Foreign Minority Retained Total
capital Premium reserve based Exchange interest earnings share-
reserve payment reserve holders
reserve equity
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
Opening
balance at 1
July 2006 848 4,734 29,395 557 - - (896) 34,638
Share based
payments - - - 257 - - - 257
Minority
interests in
subsidiary - - - - - 19 - 19
Loss for the
period - - - - - - (543) (543)
----------------- ------ ------ ------ ------ -------- ------ ------- ------
Balance at 31
December 2006 848 4,734 29,395 814 - 19 (1,439) 34,371
Share capital
issued 129 7,572 - - - - - 7,701
Cost of share
issue - (316) - - - - - (316)
Currency
translation
reserve - - - - (6) - - (6)
Loss for the
period - - - - - (2) (378) (380)
----------------- ------ ------ ------ ------ -------- ------ ------- ------
Balance at 30
June 2007 977 11,990 29,395 814 (6) 17 (1,817) 41,370
----------------- ------ ------ ------ ------ -------- ------ ------- ------
Share capital
issued 16 3 2,440 - - - - 2,459
Options
exercised - 2 - (2) - - - -
Purchase of
minority
interests - - - - - (17) - (17)
Currency
translation
reverse - - - - 194 - - 194
Loss for the
period - - - - - - (1,015) (1,015)
----------------- ------ ------ ------ ------ -------- ------ ------- ------
Balance at 31
December 2007 993 11,995 31,835 812 188 - (2,644) 42,991
----------------- ------ ------ ------ ------ -------- ------ ------- ------
Notes to the Interim Report
For the half year ending 31st December 2007
1. PRESENTATION OF INTERIM RESULTS
This interim report was approved by the Directors on 31 March 2008. The interim
results have not been audited, but were the subject of an independent review
carried out by the Company's auditors, Chapman Davis LLP. Their review confirmed
that the figures were prepared using applicable accounting policies and
practices consistent with those adopted in the annual report. The financial
information contained in this interim report does not constitute statutory
accounts as defined by Section 240 of the Companies Act 1985. Shareholders can
receive a copy of this interim report from the Company's registered office at 55
Gower St London WC1E 6HQ.
The accounts have been prepared on a going concern basis. As is common with many
junior mining companies, the company raises money for exploration and capital
projects as and when required. There can be no assurance that the Group's
projects will be fully developed in accordance with current plans or completed
on time or to budget. Future work on the development of these projects, the
levels of production and financial returns arising there from may be adversely
affected by factors outside the control of the Group.
2. CHANGES IN ACCOUNTING POLICIES
In the current year, the Group has adopted all of the new and revised Standards
and Interpretations issued by the International Accounting Standards Board (the
IASB) and the International Financial Reporting Interpretations Committee
(IFRIC) of the IASB that are relevant to its operations and effective for
accounting periods beginning on 1 July 2006. The adoption of these new and
revised Standards and Interpretations had no material effect on the financial
performance or financial position of the Group.
3. NEW ACCOUNTING POLICIES
Inventories
Stocks of the three major platinum group elements and gold (3 PGEs + Au), either
in refined or concentrate form, are valued at the lower of cost of production or
net realisable value. Production costs include an appropriate portion of
overhead expenses. Cost is determined on the first-in, first-out basis.
4. TAXATION
No taxation has been provided due to losses in the period.
5. DIVIDENDS
The Directors do not recommend the payment of a dividend.
6. LOSS PER SHARE
The basic loss per share is derived by dividing the loss for the period
attributable to ordinary shareholders by the weighted average number of shares
in issue.
Reviewed Reviewed Audited
31 Dec 2007 31 Dec 2006 30 June 2007
�'000 �'000 �'000
Loss for the period (1,015) (543) (921)
---------- ----------- -----------
Basic loss per share - expressed in
pence (0.15p) (0.10p) (0.16p)
---------- ----------- -----------
Weighted average number of shares -
expressed in millions 672.5m 543.2m 592.2m
As the inclusion of the potential ordinary shares would result in a decrease in
the loss per share they are considered anti-dilutive and, as such, the diluted
loss per share calculation is the same as the basic loss per share.
7. INTANGIBLE ASSET
Reviewed Reviewed Audited
31 Dec 2007 31 Dec 2006 30 June 2007
�'000 �'000 �'000
Beginning carrying value 33,191 30,812 30,812
Costs of acquisitions 2,438 - 45
Deferred evaluation expenditure 229 258 502
Development costs 1,009 373 1,795
Exchange adjustment 107 - 37
------------ ------------- -------------
36,974 31,443 33,191
------------ ------------- -------------
Amortisation - - -
------------ ------------- -------------
36,974 31,443 33,191
------------ ------------- -------------
During the period, the Company acquired the minority interest of 5% in the
Company's subsidiary Independence Platinum Limited (IPT). The total purchase
price for acquiring this 5% interest in IPT was �2,456,640. This consideration
was settled via the issue of new shares in the Company on 20 December 2007. The
value of the shares was determined by the prevailing share price at a 10%
discount being 15p. This acquisition generated a goodwill of �2,437,652 being
the difference between the consideration paid for acquiring the additional 5%
interest in IPT and the fair value of the 5% stake acquired in IPT.
8. CALLED UP SHARE CAPITAL
Authorised
�'000
1,695,000,000 Ordinary shares of 0.1p each 1,695
305,000,000 Performance shares of 0.1p each 305
----------
Total 2,000
----------
The Performance shares do not entitle the holder to vote, receive dividends
declared by the Company, or receive any distribution on liquidation or
otherwise, and are not transferable.
The 305 million Performance shares will convert into 305 million Ordinary shares
on the achievement of the performance milestones specified in the agreement
dated 9 May 2005 between the Company and Atomaer Holdings Pty Ltd in respect to
the acquisition of Western Consolidated Nickel Pty Ltd.
Allotted, called up and fully paid
�'000
688,325,036 Ordinary shares of 0.1p each 688
305,000,000 Performance shares of 0.1p each 305
----------
Total 993
----------
Share options and warrants
The following equity instruments have been issued by the Company and have not
been exercised at 31 December 2007:
Number of Exercise Expires
ordinary shares price
Director options 5,000,000 �0.075 10/11/2008
Director options 5,000,000 �0.100 10/11/2008
Management options 10,125,000 �0.075 20/12/2008
Management options 10,125,000 �0.100 20/12/2008
IPO options 1,385,899 �0.010 10/03/2010
Director options 9,000,000 �0.150 08/09/2010
Other consultant/contractor options 8,200,000 �0.150 08/09/2010
9. TURNOVER AND SEGMENTAL INFORMATION
The Group has no turnover during the period.
The Group operates in one business segment, the evaluation of minerals
processing and production. The Group has material interests in three
geographical segments, Australia, South Africa and the United Kingdom. The Group
assets are substantially attributable to the evaluation of nickel activities in
Australia and nickel and platinum activities in South Africa. The parent Company
operates a head office based in the United Kingdom which incurred certain
administration and corporate costs.
By geographical area United South Australia Total
Kingdom Africa �'000 �'000
�'000 �'000
Loss for the period ended (142) (352) (521) (1,015)
31 December 2007
Other segment information:
Segment assets 2,656 11,248 31,634 45,538
DIRECTORS AUDITORS NOMINATED ADVISOR AND
David James Humann Chapman Davis LLP JOINT BROKER
(Chairman) 2 Chapel Court Investec Bank (UK)
Limited
Hamish John Lindsey LONDON SE1 1HH 2 Gresham Street
Bohannan
(Chief Executive Officer) SOLICITORS LONDON EC2V 7QP
Christopher Walter Lambert United Kingdom JOINT BROKER
(Non Executive) Ronaldsons Mirabaud Securities
Clayton John Dodd 55 Gower Street 21 St James Square
(Executive) LONDON WC1E 6HQ LONDON SW1Y 4JP
Anthony John Samaha Australia REGISTRARS
(Non Executive) Blakiston & Crabb Share Registrars Limited
Michael Elias 1202 Hay Street Craven House
(Non Executive) WEST PERTH WA 6005 West Street
SECRETARY South Africa Farnham
Stephen Frank Ronaldson Routledges Modise SURREY GU9 7EN
Attorneys
REGISTERED OFFICE 22 Fredman Drive
Third Floor Sandton
55 Gower Street Johannesburg 2123
LONDON WC1E 6HQ
This information is provided by RNS
The company news service from the London Stock Exchange
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