TIDMSBLM
RNS Number : 5502N
Sable Mining Africa Limited
10 September 2013
Sable Mining Africa Ltd/ Index: AIM / Epic: SBLM / Sector:
Metals & Mining
10 September 2013
Sable Mining Africa Ltd ('Sable Mining' or 'the Company')
Final Results
Sable Mining Africa Ltd, the AIM listed exploration company,
announces its results for the year ended 31 March 2013.
HIGHLIGHTS
-- Heightened focus on the high grade, high margin, low capital
expenditure 123.5km(2) Nimba Iron Ore Project in Guinea ('Nimba')
and rationalised investment strategy for wider asset portfolio
-- Significant progress made towards defining resource potential
at Nimba - project already the second largest undeveloped on- or
near-rail DSO project to be held outside the major mining companies
in West Africa and drilling on-going to test resource extension
area
-- Maiden JORC Resource at Nimba of 121.5Mt at an in-situ grade
of 57.8% iron and a resource exploration target of 45-80Mt on a
200m extension to the original licence area
-- Simple "crush and screen" process only with no beneficiation
demonstrating low cost production during early years of production
at Nimba
-- Existing nearby under-utilised, standard gauge railway
infrastructure to facilitate low capital expenditure development at
Nimba
-- Rapid development of Nimba to continue with receipt of mining
and export licences targeted before the end of 2013
-- Strategic review of additional iron ore and coal assets to
ensure prioritised development of Nimba - expenditure minimised and
write down of value of the non-core projects at the end of the
period to reflect market and investment sentiment
Sable Mining CEO Andrew Groves said, "The outstanding discovery
that Sable Mining has made at the Nimba Iron Ore Project in Guinea
remains the focus of our attention and activities, and in line with
this, we have made significant headway during the period to
delineate its resource potential and advance towards production.
Coupling both operational successes, including the declaration of a
maiden JORC Resource of 121.5Mt at an in-situ grade of 57.8% iron,
with the considerable progress made with regards to a mining
licence application and Preliminary Feasibility Study, we are well
positioned to continue development during the remainder of
2013.
"Nimba continues to differentiate itself from its West African
iron ore peers; with a significant high grade direct shipping ore
('DSO') resource already demonstrated, combined with simple
metallurgical properties and existing rail infrastructure nearby,
we are confident that we can develop this project into a
world-class, low cost mine. With this in mind, we are targeting
obtaining mining and export-licences before the end of the year,
ahead of expediting production."
CHAIRMAN'S STATEMENT
Introduction
As investors in the resource sector will know, the past 12
months have been a tumultuous time for commodities, and in turn,
for mining companies, explorers and resource developers. With this
in mind, it falls to the Board to identify the most prospective
assets, with the most attractive economic fundamentals, through
which to generate meaningful value for shareholders. In this vein,
our flagship project, the 123.5 km(2) MountNimba iron ore project
in south-east Guinea ('Nimba', or the 'Nimba Project'), stands out
as a world class DSO mining asset, requiring modest capital
expenditure and located close to infrastructure. Consequently, the
Board have identified Nimba as an absolute priority project for the
Company, its shareholders and the region.
In accordance with Sable Mining's primary focus on and
commitment to the development of Nimba, and in light of the
macro-economic conditions affecting both coal and iron ore, the
Board has undertaken a strategic review of the Company's additional
projects. As a result of this, expenditure on the Company's other
projects has been minimised whilst we implement a strategy to
realise value from these investments.
In this context and given prevailing global economic conditions,
the Board has prudently decided to write down the value of many of
its non-core projects at the end of the period under review,
reflecting both the new world coal market environment and the lack
of investment appetite for projects with exposure to political
sensitivities or large capital expenditure and infrastructure
requirements.
The period under review has therefore seen us accelerate
development of the Nimba Project, which we believe has the
potential to become a world-class DSO production asset. The
intensive work programme carried out on site, together with the
input of our consultants in Guinea and overseas, has culminated in
the release of a maiden JORC Resource of 121.5 million tonnes
('Mt') at an in-situ grade of 57.8% iron and a resource exploration
target of 45-80Mt on the 200m extension to the original licence
area. These achievements underpin and reinforce the potential
ultimate scale of the Nimba Project.
Together with anticipated low capital expenditure requirements
due to the existence of nearby rail and expected low operating
costs because of the high DSO grades, Nimba's status as a globally
significant iron ore project with considerable strategic value is
clearly evident.
The Company's immediate focus is therefore on finalising the
environmental and mining plans for the Nimba Project in order to
expedite the granting of the mining licence and an export licence
via Liberia. Discussions regarding rail and port allocations to
facilitate export via Port Buchanan in Liberia are also being
prioritised.
Further detail on the Company's projects follows below.
Nimba Iron Ore Project
After acquiring our interest in Nimba in February 2012, the
Sable Mining team quickly began to understand the scale and
potential commercial value of this significant DSO asset. With this
in mind, for the past year the bulk of our efforts have been
focussed on the development of Nimba and I am extremely encouraged
with the volume of work, and high standard of results that we have
achieved since beginning our exploration programme.
The Nimba Project stretches over three plateaux of Mount Nimba
in south-east Guinea, with a total combined delineated aerial
extent of approximately 35km(2) , and is adjacent to the 600Mt
EuroNimba iron ore project. The Nimba Project is located
approximately 30km from the existing, and under-utilised, standard
gauge railway in Liberia, which runs the majority of the 260km from
Nimba to the deep water port on the Liberian coast at Port
Buchanan.
The Sable Mining team made a landmark achievement during the
year, with the declaration of a maiden JORC resource of 121.5Mt at
an in-situ grade of 57.8% iron. This was a tremendous achievement
for the team, putting us in the enviable position of being the
second largest undeveloped on- or near-rail DSO project to be held
outside the major mining companies in West Africa. The importance
of this resource statement is further enhanced by the fact that the
resource was calculated from drilling results from Plateau 2 and a
portion of Plateau 3 only (based on only 82 of 151 holes drilled),
and excludes the greater area of Plateau 3.
To better understand the wider resource potential of Nimba, our
exploration team has commenced drill-testing on an extension to the
area covered by the declared JORC Resource. The extension area is
approximately 200m wide and up to 3.9km in length and is believed
to consist of thick and high grade iron mineralisation, providing
the Company with an exploration target of between 45Mt and 80Mt
over this extension area. A 37 borehole programme is now underway
to test the quantity and quality of the extension area.
Further metallurgical work which has been completed on the Nimba
Project has indicated that the early years of production should
benefit from a simple "crush and screen" process. The high lump
fraction should enable production to be commenced with a simple dry
plant before moving to a simple wet plant, with no beneficiation
required.
The most recent metallurgical test work, announced in July 2013,
demonstrated an increase in lump fraction from 15% to 40%, and also
confirmed a fines DSO yield of 84% from a simple crush and screen.
This is an impressive result in itself, however, when combined with
results from work on the tailings material in the fines fraction,
which we had previously thought of as waste, it shows that this
material has a 75% yield to a beneficiated 65% iron concentrate,
thereby clearly demonstrating considerable further upside to the
Nimba Project.
Other Iron Ore Projects
Due to the continuing uncertainty regarding the timing of
development of the Trans-Guinean rail link, the Board decided not
to forcefully pursue a renewal of the Company's Kissidougou licence
in Guinea, and has therefore written off the Company's investment
in this project. The re-establishment of the rail link, which now
appears unlikely within the short term, would have been necessary
to enable economic development of this project by the Company and
as such the Board has determined that it is not currently
commercially or economically viable to continue expenditure on this
project.
The Board has also decided to take a conservative view and write
off the investment and exploration costs incurred in respect of the
Timbo project in Liberia in recognition of the disappointing
drilling results obtained from this project.
The Board has decided to maintain a watching brief on the
Company's Kpo and Bopolu iron ore projects in Liberia, and will
continue to provide limited funding in the short term for initial
exploration works. The Company obtained encouraging initial results
from a ground mapping and sampling programme at the 60% owned
532km(2) Kpo iron ore project (which lies only 10km north-east of
the existing Bong Mine rail link in Liberia, which connects
directly to the port of Monrovia) and have commenced a regional
ground mapping programme at the Bopolu iron ore project following
completion of airborne geological surveys over the project
area.
Coal Projects
The Board is currently evaluating strategic opportunities
through which to realise the value of the Rietkuil coal project in
South Africa, held through our 63.5% interest in Delta Mining
Consolidated Ltd ('DMC'). The project has a current SAMREC
compliant mineable tonnage in-situ ('MTIS') resource of 163.92Mt of
coal (149.46Mt in Measured and 14.46Mt in Indicated categories) and
a Bankable Feasibility Study was completed in May 2011. However,
due to the very substantial decrease in the seaborne thermal coal
price up to the end of the period (now trading at approximately
US$60/tn compared with approximately US$120/tn previously) the
Board believes that commercial development of this asset is now
likely to be restricted to the local market. As such, the Board has
decided to write down the value of DMC at this time whilst
exploring other options for realising value.
In Zimbabwe, where we have to date delineated a total coal
resource in excess of 1.75Bt, the Board remains confident of the
long term value of our assets, which are significant in terms of
quantity whilst also being of high quality. At present, the Group's
Zimbabwean interests are going through a renewal process and the
Board is confident that the process will be completed
satisfactorily in the near future. However, the market realities
have required the Board to take prudent write downs of 50% on the
value of two of the three concessions to reflect the fact that they
are at the end of the development spectrum.
Financial Review
Sable Mining is reporting for the year ended 31 March 2013 a
pre-tax loss on continuing activities of US$87.6 million (2012:
US$43.0 million). The Group has an adequate treasury and as at 31
March 2013 cash balances were US$15.9 million (2012: US$37.9
million).
The pre-tax loss on continuing activities includes an impairment
of intangible assets of US$71.2 million which is explained in more
detail in Note 4.
Outlook
Since beginning work at Nimba a little over 18 months ago, we
have demonstrated this to be one of West Africa's premier high
grade iron ore deposits, with significant strategic and commercial
value.
With this is mind, and in the context of continued turbulent
macro-economic conditions, our exploration and development
activities will continue at pace at Nimba over the coming months.
We remain focussed and motivated on achieving the three key
development catalysts; obtaining a mining licence, receiving
environmental approvals and being granted an export licence and
rail allocation, which we believe will prompt a significant
valuation re-rating for our Company.
As the second largest West African deposit on- or near-
accessible rail held outside the major mining companies, we believe
that by virtue of its high-margin, low-capital nature, our Nimba
project is one of the best undeveloped DSO iron ore assets
currently known in the region. I look forward to being able to
report to you on the enhanced value of the Nimba Project in the
year to come.
Phil Edmonds
Chairman
10 September 2013
For further information please visit www.sablemining.com or
contact:
Andrew Groves Sable Mining Africa Ltd Tel: 020 7408 9200
David Foreman Cantor Fitzgerald Europe Tel: 020 7894 7000
Stewart Dickson Cantor Fitzgerald Europe Tel: 020 7894 7000
Richard Greenfield GMP Securities Tel: 020 7647 2836
Andy Cuthill MC Peat & Co LLP Tel: 020 7104 2332
John Beaumont MC Peat & Co LLP Tel: 020 7104 2335
Susie Geliher St Brides Media & Finance Tel: 020 7236 1177
Ltd
Charlotte Heap St Brides Media & Finance Tel: 020 7236 1177
Ltd
CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2013
Year ended Year ended
31 March 31 March
2013 2012
Note $'000 $'000
---------------- -------------
Continuing Operations
Operating expenses 6 (14,703) (19,045)
Impairment of available for sale
investment 15 - (5,703)
Impairment of plant and equipment 14 (817) -
Impairment of available for sale
investment 15 - (416)
Impairment of intangible assets 13 (71,229) (5,227)
Impairment of goodwill 13 - (13,705)
Impairment of other receivables 16 (790) (140)
Operating loss 6 (87,539) (44,236)
Other gains and losses 8 144 236
Finance income 9 526 1,413
Finance cost 9 (686) (393)
Loss before taxation (87,555) (42,980)
Income tax credit 10 12,480 213
Loss for the year from continuing
operations (75,075) (42,767)
Discontinued Operations
Gain / (Loss) for the year from
discontinued operations 11 158 (2)
---------------- -------------
Loss for the year (74,917) (42,769)
---------------- -------------
Loss for the year attributable
to owners of the parent company (58,541) (40,012)
Loss for the year attributable
to non-controlling interests (16,376) (2,757)
Loss for the year (74,917) (42,769)
---------------- -------------
Loss per share
- Basic and diluted 12 (6.3 cents) (4.3 cents)
Loss per share from continuing
operations
- Basic and diluted 12 (6.3 cents) ( 4.3 cents)
(Loss) / earnings per share from
discontinued operations
- Basic and diluted 12 - -
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2013
2013 2012
$'000 $'000
---------- -----------------
Loss for the year (74,917) (42,769)
Foreign exchange translation differences (10,122) 2,768
Other comprehensive income for the year (10,122) 2,768
Total comprehensive income for the year (85,039) (40,001)
========== =================
Attributable to the owners of the parent
company (68,663) (37,244)
Attributable to non-controlling interests (16,376) (2,757)
---------- -----------------
Total comprehensive income for the year (85,039) (40,001)
========== =================
CONSOLIDATED BALANCE SHEET
As at 31 March 2013
2013 2012
Note $'000 $'000
---------- ----------
ASSETS
Non-current assets
Intangible assets 13 67,583 141,279
Property, plant and equipment 14 9,473 11,721
Available for sale investment 15,16 1,137 980
Loans and other receivables 16,17 42 131
----------
Total non-current assets 78,235 154,111
---------- ----------
Current assets
Inventory 18 4 4
Trade and other receivables 16 994 4,356
Cash and cash equivalents 16 15,899 37,889
----------
Total current assets 16,897 42,249
---------- ----------
TOTAL ASSETS 95,132 196,360
---------- ----------
LIABILITIES
Non-current liabilities
Long-term borrowings 19 (8,244) -
Deferred tax liability 20 (1,110) (15,886)
---------- ----------
Total non-current liabilities (9,354) (15,886)
---------- ----------
Current liabilities
Short-term borrowings 19 (4,769) (14,821)
Trade and other payables 19 (3,905) (4,136)
---------- ----------
Total current liabilities (8,674) (18,957)
---------- ----------
TOTAL LIABILITIES (18,028) (34,843)
---------- ----------
NET ASSETS 77,104 161,517
========== ==========
EQUITY
Issued capital 21 248,798 248,623
Share based payment reserve 1,064 1,064
Warrant reserve 7,484 7,033
Translation reserve (7,378) 2,744
Retained earnings (176,578) (118,037)
---------- ----------
Total equity attributable to the
owners of the parent company 73,390 141,427
Non-controlling interests 3,714 20,090
TOTAL EQUITY 77,104 161,517
========== ==========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the equity holders of the parent
------------------------------------------------------------------------
Share-based Non-controlling
Share payment Warrant Translation Retained interests
capital reserve reserve reserve earnings Total $'000 Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
--------- ------------ --------- ------------- ---------- --------- ---------------- ---------
Balances at 01
April 2011 248,623 1,048 944 (24) (78,025) 172,566 5,861 178,427
Loss for the
year - - - - (40,012) (40,012) (2,757) (42,769)
Other
comprehensive
income
Exchange
translation
differences
on foreign
operations - - - 2,768 - 2,768 - 2,768
Total
comprehensive
income
for the year - - - 2,768 (40,012) (37,244) (2,757) (40,001)
Transactions
with owners
Share-based
payment charge - 16 6,089 - - 6,105 - 6,105
On acquisition
of subsidiary - - - - - - 17,685 17,685
On consolidation
of subsidiary - - - - - - (503) (503)
Non-controlling
interest on
asset
acquisitions - - - - - - (196) (196)
--------- ------------ --------- ------------- ---------- --------- ---------------- ---------
Total
transactions
with owners - 16 6,089 - - 6,105 16,986 23,091
Balances at 31
March 2012 248,623 1,064 7,033 2,744 (118,037) 141,427 20,090 161,517
Loss for the
year - - - - (58,541) (58,541) (16,376) (74,917)
Other
comprehensive
income
Exchange
translation
differences
on foreign
operations - - - (10,122) - (10,122) - (10,122)
--------- ------------ --------- ------------- ---------- --------- ---------------- ---------
Total
comprehensive
income
for the year - - - (10,122) (58,541) (68,663) (16,376) (85,039)
Transactions
with owners
Share issues -
cash received 17 - - - - 17 - 17
Chare issues -
warrants
exercised 158 - - - - 158 - 158
Share based
payment charge - - 451 - - 451 - 451
Total
transactions
with owners 175 - 451 - - 626 - 626
Balance at 31
March 2013 248,798 1,064 7,484 (7,378) (176,578) 73,390 3,714 77,104
========= ============ ========= ============= ========== ========= ================ =========
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March 2013
2013 2012
$'000 $'000
--------- ---------
OPERATING ACTIVITIES
Loss before tax (87,555) (42,980)
Adjustments for:
- Depreciation of property, plant and equipment 1,328 912
- Amortisation of intangible assets 29 11
- Share based payment charge 768 1,508
- Other gains and losses (144) -
- Loss/(gain) on foreign exchange 2,031 (618)
- Net interest income 160 (1,020)
- Re-measurement of available for sale investment - 5,703
- Impairment of available for sale investment - 416
- Write off of plant and equipment 817 -
- Impairment of intangible assets 71,229 5,227
- Impairment of goodwill - 13,705
- Impairment of other receivables 790 140
Operating cash flow before movements in working
capital (10,547) (16,996)
Working capital adjustments:
- Decrease/(Increase) in receivables 3,362 (1,260)
- Increase in payables (2,037) (140)
Cash used in operations (9,222) (18,396)
Finance cost (686) (393)
Interest received 526 1,413
Net cash used in continuing operating activity (9,382) (17,376)
Net cash used in discontinued operating activity - -
--------- ---------
Net cash used in operating activities (9,382) (17,376)
--------- ---------
INVESTING ACTIVITIES
Purchase of intangible assets (11,370) (18,389)
Purchase of property, plant and equipment (665) (6,813)
Proceeds from disposal of property, plant
and equipment 94 -
Purchase of subsidiary, net of cash received - (24,419)
Purchase of investment (321) (145)
Decrease/(Increase) in loans and other long
term receivables 82 (3,920)
--------- ---------
Net cash used in investing in continuing
activities (12,180) (53,686)
Net cash used in investing in discontinued
activities - -
Net cash used in investing activities (12,180) (53,686)
--------- ---------
FINANCING ACTIVITIES
Proceeds from issue of share capital 17 -
Net cash flow from financing activities 17 -
--------- ---------
Net decrease in cash and cash equivalents (21,545) (71,062)
Cash and cash equivalents at start of the
year 37,889 108,989
Effect of foreign exchange rate changes (445) (38)
Cash and cash equivalents at end of the year 15,899 37,889
========= =========
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
1. General information
Sable Mining Africa Limited is incorporated in the British
Virgin Islands under the British Virgin Islands Business Companies
Act 2004. The nature of the Group's operations and its principal
activities are set out in the Chairman's Statement above.
These financial statements have been presented in US Dollars
because this is the currency of the primary economic environment in
which the Group operates. The financial statements have been
prepared in accordance with International Financial Reporting
Standards ('IFRS') as adopted by the European Union ('EU').
The non statutory financial statements for the year ended 31
March 2013 have been reported on by Sable Mining's auditors and
contain an unqualified opinion (31 March 2012: unqualified
opinion).
The full audit report is contained in the Company's Annual
Report, which will be available on the Company's website by 30
September 2013.
The financial information contained in this document does not
constitute statutory financial statements.
2. Income tax expense
2013 2012
$'000 $'000
--------- ---------
Loss before tax: (87,555) (42,980)
========= =========
Expected tax at the weighted average tax
rate 24.96% (2012:8.51%) (21,854) (3,658)
Tax effect of expenses that are not deductible
in determining taxable profit 28 9
Tax effect of losses not allowable 2,401 1,723
Tax effect of losses recognised (note
20) - 221
Tax effect of losses not recognised in
overseas subsidiaries 3,020 1,492
Write-off of deferred tax asset 2,710 -
Attributable to profits taxed at higher
rates (1,649) -
Attributable to non-deductible impairments 2,864 -
--------- ---------
Tax credit for the period (12,480) (213)
========= =========
The tax reconciliation has been prepared using the weighted
average tax rates of the jurisdictions where the principal assets
of its continuing activities are located.
The Group has operations in a number of overseas jurisdictions
where it has incurred taxable losses on continuing operations of
$40,086,000 (2012: $28,107,000).
The Company is resident for taxation purposes in the British
Virgin Islands and its income is subject to BVI income tax,
presently at a rate of zero.
3. Earnings/ (loss) per share
The calculation of the basic and diluted loss per share is based
on the following data:
2013 2012
$'000 $'000
------------ ------------
Loss for the purposes of basic earnings
per share (loss for the year attributable
to equity holders of the parent) (58,541) (40,012)
------------ ------------
Loss for the purposes of basic earnings
per share on continuing activities (loss
for the year on continuing activities
attributable to equity holders of the
parent) (58,699) (40,010)
Profit for the purposes of basic earnings
per share on discontinued activities
(loss for the year on discontinued activities
attributable to equity holders of the
parent) 158 (2)
Number of shares
Weighted average number of ordinary
shares for the purposes of basic loss
per share 928,177,584 927,473,474
------------ ------------
Basic and diluted loss per share (6.3 cents) (4.3 cents)
------------ ------------
Basic and diluted loss per share on (6.3 cents) (4.3 cents)
continuing activities
------------ ------------
Basic and diluted earnings per share -
on discontinued activities -
------------ ------------
No dilution arises as a result of the total loss and the loss on
continuing activities for the year (2012: nil).
4. Intangible assets Evaluation
and exploration Computer
costs Goodwill software Total
$'000 $'000 $'000 $'000
At 1 April 2011 35,347 - - 35,347
Additions 11,482 - - 11,482
Reallocation (3,750) - - (3,750)
Asset acquisitions during
the year 6,907 - - 6,907
Acquisition of subsidiary
(note 24) 88,077 13,122 18 101,217
Capitalised warrants (note
22) 4,598 - - 4,598
Exchange differences 3,838 583 - 4,421
Impairment of exploration
costs (a) (5,227) - - (5,227)
Impairment of goodwill (b) - (13,705) - (13,705)
Amortisation - - (11) (11)
At 31 March 2012 141,272 - 7 141,279
Additions 11,370 - 2 11,372
Exchange differences (13,832) - - (13,832)
Impairment of exploration
costs (a) (71,229) - - (71,229)
Impairment of goodwill (b) - - - -
Amortisation - - (7) (7)
At 31 March 2013 67,581 - 2 67,583
================= ========= ========== =========
The reallocation in the prior year represents a lease for which
an exploration licence is not held at 31 March 2013.
Asset acquisitions in the prior year comprise exploration
licences acquired by the Group during that year through the
acquisition of subsidiaries. Further amounts relating to these
assets acquired may become payable if certain levels of resources
are met. Refer to note 28.
(a) During the year, capitalised costs relating to the following
exploration assets were impaired:
2013 2012
$'000 $'000
------- ------
Southern Cross Investments Limited
(Timbo) 2,357 3,243
Guinea Development Mineral Resources
SA (Kissidougou) 6,133 -
Liberation Mining (Pvt) Limited (Lubimbi) 5,331 -
Apex Petroleum Company (Pvt) Limited
(Lusulu) 3,158 -
Delta Mining Consolidated Limited (Rietkuil) 54,250 -
Kakoulima Base Metals SARL (Kakoulima) - 1,984
------- ------
71,229 5,227
======= ======
Southern Cross Investments Limited
The Group has decided to take a conservative view and write off
the investment and exploration costs incurred in respect of the
Timbo project in Liberia in recognition of the disappointing
drilling results obtained from this project.
Kakoulima Base Metals SARL
The drill program conducted by Kakoulima Base Metals SARL in
Guinea to date has not resulted in identifying the possibility of
an economically viable resource. Consequently, the subsidiary has
no definite plans to continue drilling and the Group has taken the
decision to impair all costs capitalised in relation to this
concession.
Guinea Development Mineral Resources SA
Due to the continuing uncertainty regarding the timing of
development of the Trans-Guinean rail link, the Group decided not
to forcefully pursue a renewal of the Group's Kissidougou licence
in Guinea, and has therefore written off the Group's investment in
this project. The re-establishment of the rail link, which now
appears unlikely within the short term, would have been necessary
to enable economic development of this project by the Group and as
such the Group has determined that it is not commercially or
economically viable to continue expenditure on this project.
Liberation Mining (Pvt) Limited and Apex Petroleum Company (Pvt)
Limited
In Zimbabwe, where the Group has to date delineated a total coal
resource in excess of 1.75Bt, the Board remain confident of the
long term value of the Group's assets, which are significant in
terms of quantity whilst also being of high quality. However,
market realities have required the Board to take prudent write
downs of 50% on the value of these long term assets at the end of
the period to reflect the fact that they are at the end of the
development spectrum.
The Group's Special Grants held by Apex Petroleum Company (Pvt)
Limited, Liberation Mining (Pvt) Limited and Monaf Investments
(Pvt) Limited expired in February 2013. Applications have been
submitted to the Zimbabwean Mining Affairs Board to extend each of
the Special Grants for an additional three year period. At this
date each Special Grant has not been formally extended, however the
Board is confident of being granted an extension on each Special
Grant in due course.
Delta Mining Consolidated Limited
The Group is currently evaluating strategic opportunities
through which to realise the value of the Rietkuil coal project in
South Africa held through the Group's 63.5% interest in Delta
Mining Consolidated Ltd ('DMC'). The project has a current SAMREC
compliant mineable in-situ (MTIS) tonnage resource of 163.92Mt of
coal (149.46Mt in Measured and 14.46Mt in Indicated categories) and
a Bankable Feasibility Study was completed in May 2011. However,
due to the very substantial decrease in the seaborne thermal coal
price up to the end of the period (now trading around US$60/tn as
opposed to around US$120/tn previously) the Group believe that
commercial development of this asset is now likely to be restricted
to the local market. As such, the Group has decided to write down
the value of DMC at this time to $25million whilst exploring other
avenues for realising value.
(b) Goodwill arose due to the provision for a deferred tax
liability on the fair value adjustment of Delta Mining Consolidated
Limited's ("DMC") intangible assets on acquisition of DMC in the
prior year, as is required by IFRS 3 Business Combinations and IAS
12 Income Taxes (see note 25). The fair value adjustment was
calculated by reference to the Bankable Feasibility Study of the
Rietkuil Coal Project held by DMC, which incorporates all future
cash flows expected from an operating mine. The impairment of the
goodwill reflects the absence of any unidentified intangible assets
attributable to DMC.
5. Share capital
Ordinary shares of
no par value
Allotted and fully
paid
Number $'000
At 1 April 2012 927,473,474 248,623
Issue of shares on exercise of
warrants 550,000 175
------------ --------
At 31 March 2013 928,023,474 248,798
------------ --------
On 29 May 2012, 50,000 ordinary shares were issued pursuant to
the exercise of warrants under the block admission dated 29 May
2012 with an exercise price of 2p. GBP1,000 cash was received for
these shares.
On 5 October 2012, 50,000 ordinary shares were issued pursuant
to the exercise of warrants under the block admission dated 29 May
2012 with an exercise price of 2p. GBP1,000 cash was received for
these shares.
On 16 October 2012, 100,000 ordinary shares were issued pursuant
to the exercise of warrants under the block admission dated 29 May
2012 with an exercise price of 2p. GBP2,000 cash was received for
these shares.
On 7 January 2013, 150,000 ordinary shares were issued pursuant
to the exercise of warrants under the block admission dated 29 May
2012 with an exercise price of 2p. GBP3,000 cash was received for
these shares.
On 8 February 2013, 200,000 ordinary shares were issued pursuant
to the exercise of warrants under the block admission dated 29 May
2012 with an exercise price of 2p. GBP4,000 cash was received for
these shares.
The Company has one class of ordinary share which carries no
right to fixed income.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSAFDUFDSEEU
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