TIDMZIOC
RNS Number : 5330O
Zanaga Iron Ore Company Ltd
20 September 2011
20 September 2011
ZANAGA IRON ORE COMPANY LIMITED
("ZIOC" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2011
Zanaga Iron Ore Company Limited (AIM:ZIOC) is pleased to
announce its unaudited interim results for the six months ended 30
June 2011.
Highlights
-- Xstrata exercised its first call option moving to a 50% plus
one share interest in the Zanaga Project
o Xstrata is obliged to fund completion of a feasibility study
in accordance with international best practice standards and
Xstrata internal guidelines
o Zanaga Project now managed by Xstrata
-- The Pre-Feasibility Study ("PFS") work streams completed in
Q1 2011, and the Value Engineering Exercise ("VEE") is completing
on schedule. ZIOC expects to announce the outcomes of the VEE in
October 2011
-- JORC Mineral Resource expansion to 4 Bt at 33.9% Fe (1.7 Bt
Indicated - 2.3 Bt Inferred)
-- Drilling update - Total of 98,663m / 803 holes drilled to 8
May 2011
-- Over US$140m spent on the Zanaga Project to 30 June 2011
-- Appointment of Citigroup as Joint Corporate Broker with
Liberum Capital with immediate effect
-- ZIOC cash balance of US$48.5m as at 30 June 2011
Clifford Elphick, Non-Executive Chairman of Zanaga Iron Ore
Company Limited, commented:
"A significant amount of work has been completed on the Zanaga
Project in the first half of 2011. ZIOC is pleased with the
transition to operating a Joint Venture Partnership with Xstrata on
the Zanaga project. Since Xstrata's exercise in February 2011 of
its first option to acquire a majority interest in the Zanaga
Project, the project work streams continue to progress at a rapid
rate. ZIOC's strategy of partnering with a major diversified mining
company on the project has thus far proved to be significantly
beneficial to our operations and ultimately is expected to add
substantial value to the project. The project now progresses
further along the path to completion of a Feasibility Study and the
Board looks forward to announcing the outcomes of the Value
Engineering Exercise in October"
Copies of the unaudited interim results for the six months ended
30 June 2011 will be available on the Company's website at
www.zanagairon.comtoday.
For further information please contact:
Zanaga UK Services Limited
Corporate Development and Andrew Trahar Investor Relations
Manager +44 20 7399 1105
Liberum Capital Limited
Nominated Adviser, Financial Chris Bowman, Christopher Britton
Adviser and Joint Corporate Broker and Christopher Kololian
+44 20 3100 2000
Citigroup Global Markets Limited
Joint Corporate Broker Alex Carter
+44 20 7986 4000
Pelham Bell Pottinger
Financial PR James MacFarlane and Philippe Polman
+44 20 7861 3232
Chairman's Statement
In the first half of 2011 ZIOC has achieved a number of
significant milestones and the Company continues to focus on the
Zanaga Project as it takes the first steps toward the development
and construction of a world-class iron ore project capable of
mining, processing, transporting and exporting iron ore concentrate
from the Republic of Congo. The key developments in H1 2011 are set
out below:
Xstrata's exercise of its First Call Option
We are very pleased to have Xstrata, a global diversified mining
group with a stated strategy to enter the iron ore market, as
ZIOC's joint venture partner on the Zanaga Project. Xstrata has
been closely aligned to the Zanaga Project since October 2009 when
it entered into a call option agreement for the acquisition of a
50% plus one share majority stake in the Zanaga Project ("First
Call Option"). In February 2011 Xstrata exercised its First Call
Option and now retains a 50% plus one share majority controlling
shareholder interest in the Zanaga Project as well as taking
management control of the Zanaga Project. In consideration for the
majority stake Xstrata is obliged to fund the costs of the
Feasibility Study ("FS") in respect of the Zanaga Project in
accordance with international best practice and Xstrata's internal
guidelines. Xstrata must use reasonable efforts to deliver the FS
no later than three months prior to the expiration of the licences
in May 2014, assuming a second extension of the Zanaga Project
exploration licences in May 2012 and no material adverse
change.
The exercise of the First Call Option by Xstrata has triggered
the implementation of the Joint Venture Agreement ("JVA") between
ZIOC and Xstrata governing the working relationship between the two
companies. The JVA stipulates that within 90 days of completion of
the FS, Xstrata has the right to exercise a further call option
("Second Call Option") to acquire all (but not part of) ZIOC's
remaining 50% less one share minority stake in Jumelles Limited
("JVCo") in consideration for an agreed price, failing which a net
present value based price determined by an independent expert in
accordance with the JVA's agreed valuation terms of reference.
It is important to note that when the FS is complete, if Xstrata
does not exercise the Second Call Option, ZIOC will have a number
of future funding options including (i) dilution at NPV (as defined
in the JVA) during construction; or (ii) a right to fund ZIOC's pro
rata equity share of construction capital expenditure. Furthermore,
should ZIOC fund its share of construction capital expenditure ZIOC
would retain marketing nomination rights over its pro rata share of
production.
Value Engineering Exercise
Significant progress has also been made on the Zanaga Project in
H1 2011. After the exercise of Xstrata's First Call Option in
February 2011 a Value Engineering Exercise ("VEE") was commissioned
as an initial phase to the FS. The VEE's aim is to review and
refine options and opportunities that could positively impact on
the net present value ("NPV") of the Zanaga Project, either through
added value or the reduction of risk. The VEE work streams are
completing on schedule. ZIOC expects to announce the outcomes of
the VEE in October 2011.
Increased JORC Resource
In addition, an updated mineral resource estimate was announced
and reported by ZIOC in accordance with the JORC code on 5 April
2011. The Zanaga mineral resource estimate has now grown to 4
billion tonnes at 33.9% Fe further supporting the long life
potential of the Project. To date only 25km of the known 47km
strike length of mineralisationhas been drilled to define the
current mineral resource, leaving potential upside to expand the
resource size and annual production.
Jointly, ZIOC and Xstrata have expended over US$140m on the
Zanaga Project to 30 June 2011. Further details of the forward work
programme will be outlined shortly.
ZIOC's objective remains to maximise the value of ZIOC's 50%
less one share minority stake in the Zanaga Project pending the
possible exercise by Xstrata of its Second Call Option. ZIOC's
strategy of partnering with a major diversified mining company on
the project has thus far proved to be significantly beneficial to
our operations and ultimately is expected to add substantial value
to the project. The project now progresses further along the path
to completion of a Feasibility Study and the Board looks forward to
announcing the outcomes of the VEE in October.
Clifford Elphick
Non-Executive Chairman
Business Review - Operations
Due to the fact that the VEE results are in the process of being
verified and collated, the Company will not be providing a detailed
operational update at this stage. ZIOC expects to announce the
outcomes of the VEE in October 2011.
Pre-Feasibility Study ("PFS")
The PFS commenced in September 2009 and was conducted in line
with what the directors believe are internationally accepted best
practice standards. The PFS work streams for Phase I were completed
in June 2010 and Phase II in the course of Q1 2011, save for the
processing of its results into a finalised PFS report. Total PFS
related expenditure to 31 March 2011 totaled US$105.45m. During
this period the PFS project work programs covered a number of work
streams. These work streams included mineral resource definition
which resulted in the announcement of an increase in the JORC
Mineral Resources of 4 Bt at 33.9% Fe on 5 April 2011. In addition,
the PFS work programs included an assessment of the economic and
technical viability of the various options for the development of
the iron ore body including mining methods, processing, product
range, waste disposal and management, tailings storage and
containment, mine site infrastructure location and design, rail or
pipeline options, port sites, product marketing, environmental and
social aspects, commercial aspects, legal framework and government
relations.
Value Engineering Exercise
Following the exercise of Xstrata's First Call Option in
February 2011 and its assumption of majority control of the Zanaga
Project, Xstrata and ZIOC jointly announced the commencement of a
Value Engineering Exercise ("VEE") including a scope and options
review to take place during Q2 and Q3 2011 as an initial phase to
the Feasibility Study work program.
The VEE further builds and expands on the opportunities to
re-assess capex and opex options recognised as part of the PFS work
undertaken by the JVCo. A team of internal and external experts was
assembled by the JVCo to conduct the VEE and investigate a broader
range of long-term development opportunities for the Zanaga Project
before the final options and scope for the full FS are
finalised.
The VEE commenced on 16 March 2011 with initial workshops
generating and prioritising specific ideas and opportunities for
the Zanaga Project that have the potential to impact positively on
NPV, either through added value or reduced risk. A selection of
specific opportunities were outlined, forming the basis of the VEE.
The VEE work streams are completing on schedule and the outcomes of
the VEE will be announced in October 2011.
Drilling Update
Significant further drilling continues on the Zanaga Project. To
date only 25km of the known 47km strike length of magnetic
mineralisationhas been drilled to define the current mineral
resource, leaving potential upside to expand the resource size and
annual production.
Project Team
Since exercising its option to acquire a majority interest in
the Zanaga Project Xstrata has recruited a number of employees and
consultants for the Zanaga Project team with specific expertise in
working on exploration stage development projects and evaluation of
iron ore projects. The Zanaga Project is already a significant
employer in the Republic of Congo with 850 people employed by the
Zanaga Project, of which 88% are Congolese nationals.
ZIOC Consultants
Following exercise of the Xstrata's First Call Option in
February 2011, the Company has continued to require significant
technical, managerial and legal services to maintain and regulate
its relationship with Xstrata and oversee the development of the
Zanaga Project. Consequently the Company has agreed to enter into
consultancy contracts with:
1. Harris GeoConsult Limited for technical services to be
provided by Colin Harris, a director of the Company and Harris
GeoConsult Limited, at an annual budgeted cost of c. UKGBP155,000
(provided on a day rate basis);
2. Wardrop Engineering Inc and Carl Wilson of Wilson Campbell
& Associates. This dedicated technical team monitors the
technical aspects of the Zanaga Project and provides independent
expertise to ZIOC in the key areas of rail, port and mine site
development appropriate for a large scale mining and infrastructure
project such as the Zanaga Project; and
3. Strata Capital UK LLP, an FSA regulated partnership in the
UK, for (a) management and consultancy services to be provided by
Mike Haworth, a director of the Company and of Strata Limited
(General Partner of Strata Capital UK LLP), at an annual budgeted
cost of c. UKGBP155,000; and (b) for company legal and
administrative services to be provided by Francois du Plessis at an
annual budgeted cost of c. UKGBP135,000 (provided on a day rate
basis).
Both contracts (1) and (3) constitute related party transactions
under Rule 13 of the AIM Rules and, as such, for the purposes of
the AIM Rules, the Directors (excluding Colin Harris in relation to
(1) and excluding Mike Haworth in relation to (3)), not being
related parties in relation to the relevant contracts, having
consulted Liberum Capital Limited, the Company's nominated adviser,
consider that the terms of both contracts (1) and (3) are fair and
reasonable insofar as Shareholders are concerned.
Financial review
The principal business currently comprises managing ZIOC's 50%
less one share minority interest in the Zanaga Project and
monitoring the preparation of the Feasibility Study.
Results from operations
The financial statements contain the results for ZIOC for the
first half of 2011. ZIOC made a loss in the half-year of US$3.8m
compared to a loss of US$13.2m in the year to 31 December 2010. The
loss for the half-year comprised:
1 January to 1 January to 1 January to
30 June 30 June 31 December
2011 2010 2010
Unaudited Unaudited Audited
US$000 US$000 US$000
------------------------------------ ------------ ------------ ------------
General expenses (1,781) (556) (2,755)
------------------------------------ ------------ ------------ ------------
Net foreign exchange profit/
(loss) 1593 - (1,343)
------------------------------------ ------------ ------------ ------------
Share-based payments (707) - (964)
------------------------------------ ------------ ------------ ------------
Share of loss of associate (2,996) (6,947) (8,805)
------------------------------------ ------------ ------------ ------------
Interest income 87 - 17
------------------------------------ ------------ ------------ ------------
Loss before tax (3,804) (7,503) (13,850)
------------------------------------ ------------ ------------ ------------
Share of other comprehensive
income of associate - foreign
exchange 2 602 621
------------------------------------ ------------ ------------ ------------
Total comprehensive loss (3,802) (6,901) (13,229)
------------------------------------ ------------ ------------ ------------
General expenses of US$1.8m consist of staff costs of US$0.1m,
Directors fees of US$0.3m, professional fees of US$0.9m and US$0.5m
of other general operating expenses.
The foreign exchange profit of US$1.6m can be attributed to the
impact of the weakening of the US Dollar against UK Sterling during
the half-year on the cash balances that are held in UK
Sterling.
The share-based payment charge reflects the expense associated
with the grant of options to ZIOC's directors under ZIOC's
long-term incentive plan ("LTIP") and to the expense associated
with the grant of share options to one of ZIOC's consultants.
The share of loss of associate reflected above relates to ZIOC's
investment in Jumelles Limited, the joint venture company in
respect of the Zanaga Project, which generated a profit of US$3.0m
in the six months to 30 June 2011, together with a charge of
US$6.0m made for equity accounting purposes for share options
provided to employees of Jumelles Limited. The profit comprised of
US$6.1m of foreign currency revaluations less US$3.1m of
administrative expenses.
During the year, Jumelles Limited spent US$47.6m on exploration,
increasing its capitalised exploration assets to US$126.6m.
Financial position
ZIOC's net asset value ("NAV") of US$244.1m comprises of a
US$195.8m investment in Jumelles Limited, US$48.5m of cash balances
and US$0.2m of net current liabilities.
June 2011 June 2010 December 2010
Unaudited Unaudited Audited
US$000 US$000 US$000
-------------------------------- ---------- ---------- -------------
Investment in associate 195.8 192.1 192.8
-------------------------------- ---------- ---------- -------------
Cash 48.5 7.4 49.3
-------------------------------- ---------- ---------- -------------
Other net current liabilities (0.2) (0.1) (0.9)
-------------------------------- ---------- ---------- -------------
Net assets 244.1 199.4 241.2
-------------------------------- ---------- ---------- -------------
Cost of investment
The investment in associate relates to the value of the
investment in Jumelles Limited which as at 30 June 2011 owned 50%
less one share of the Zanaga Project. The value of this investment
has increased by US$3.0m due to the US$3.0m profit made by Jumelles
Limited during the half-year net of US$6.0m of additions. The
additions relate to the share-based payments made to the employees
of Jumelles Limited which have augmented the value of the
investment.
As at 30 June 2011, Jumelles Limited had aggregated assets of
US$228.1m (June 2010: US$61.8m) and aggregated liabilities of
US$16.0m (June 2010: US$30.5m). Assets consisted of US$126.6m (June
2010: US$40.6m) of capitalised exploration assets and US$15.1m
(June 2010: US$8.8m) of other fixed assets including property,
plant and equipment. A total of US$47.6m of exploration costs were
capitalised during the six month period. Cash balances totaled
US$7.1m (June 2010: US$8.4m) and other current assets had increased
from US$4.2m to US$79.3m during the half-year.
Cash flow
Cash balances have decreased by US$0.8m since 31 December 2010.
Operating activities utilised US$2.4m and foreign exchange
differences generated a cash profit of US$1.6m as the value of the
US Dollar weakened against the UK Sterling thereby increasing the
US Dollar value of the UK Sterling denominated cash balances.
Statement of comprehensive income
for the six months ended 30 June 2011
1 January 1 January 1 January
to to to
30 June 30 June 31 December
2011 2010 2010
Unaudited Unaudited Audited
Note US$000 US$000 US$000
---------------------------------- ---- ---------- ---------- ------------
Administrative expenses (895) (556) (5,062)
Share of loss of associate (2,996) (6,947) (8,805)
---------------------------------- ---- ---------- ---------- ------------
Operating(loss (3,891) (7,503) (13,867)
Interest income 87 - 17
---------------------------------- ---- ---------- ---------- ------------
Loss before tax (3,804) (7,503) (13,850)
Taxation 5 - - -
---------------------------------- ---- ---------- ---------- ------------
Loss for the period (3,804) (7,503) (13,850)
Share of other comprehensive
income of associate - foreign
exchange translation 2 602 621
---------------------------------- ---- ---------- ---------- ------------
Total comprehensive loss (3,802) (6,901) (13,229)
---------------------------------- ---- ---------- ---------- ------------
Loss per share (basic and
diluted) (cent) 7 (0.01) (0.03) (0.05)
The loss for the period is attributable to the equity holders of
the parent company.
Statement of changes in equity
for the six months ended 30 June 2011
Foreign
currency
Share Retained translation Total
capital earnings reserve equity
US$000 US$000 US$000 US$000
------------------------------------- ------- -------- ----------- -------
Balance at 1 January 2010 207,967 (1,572) (85) 206,310
Loss for the period - (7,503) - (7,503)
Other comprehensive income - - 602 602
Balance at 30 June 2010 207,967 (9,075) 517 199,409
------------------------------------- ------- -------- ----------- -------
Issue of shares - listing 44,114 - - 44,114
Consideration for share-based
payments - share issue costs 481 - - 481
Consideration for share-based
payments - other services 3,508 - - 3,508
Loss for the period - (6,347) - (6,347)
Other comprehensive income - - 19 19
------------------------------------- ------- -------- ----------- -------
Total comprehensive loss - (6,347) 19 (6,328)
------------------------------------- ------- -------- ----------- -------
Balance at 31 December 2010 256,070 (15,422) 536 241,184
------------------------------------- ------- -------- ----------- -------
Consideration for share-based
payments - other services 6,674 - - 6,674
Loss for the period - (3,804) - (3,804)
Other comprehensive income - - 2 2
------------------------------------- ------- -------- ----------- -------
Total comprehensive loss - (3,804) 2 (3,802)
------------------------------------- ------- -------- ----------- -------
Balance at 30 June 2011 262,744 (19,226) 538 244,056
------------------------------------- ------- -------- ----------- -------
Balance sheet
as at 30 June 2011
December
June 2011 June 2010 2010
Unaudited Unaudited Audited
Note US$000 US$000 US$000
-------------------------------------- ---- ---------- ---------- --------
Non-current asset
Investment in associate 6 195,771 192,094 192,799
Current assets
Other receivables 96 6 80
Cash and cash equivalents 48,471 7,353 49,318
-------------------------------------- ---- ---------- ---------- --------
48,567 7,359 49,398
-------------------------------------- ---- ---------- ---------- --------
Total Assets 244,338 199,453 242,197
Current liabilities
Trade and other payables (282) (44) (1013)
-------------------------------------- ---- ---------- ---------- --------
Net assets 244,056 199,409 241,184
-------------------------------------- ---- ---------- ---------- --------
Equity attributable to equity
holders of the parent
Share capital 262,744 207,967 256,070
Retained earnings (19,226) (9,075) (15,422)
Foreign currency translation reserve 538 517 536
-------------------------------------- ---- ---------- ---------- --------
Total equity 244,056 199,409 241,184
-------------------------------------- ---- ---------- ---------- --------
These financial statements set out on pages 6 to 10 were
approved by the Board of Directors on 19 September 2011 and were
signed on its behalf by:
Mr D Elzas Mr C Elphick
Director Director
Cash flow statement
for the six months ended 30 June 2011
1 January 1 January 1 January
to to to
30 June 30 June 31 December
2011 2010 2010
Unaudited Unaudited Audited
Note US$000 US$000 US$000
---------------------------------- ----- ---------- ---------- -----------
Cash flows from operating
activities
Total comprehensive loss for the period (3,802) (6,901) (13,229)
Adjustments for:
(Increase)/decrease in other
receivables (16) 5 (69)
(Decrease) Increase in trade and other
payables (731) (202) 532
Net exchange (profit)/loss (1,593) (602) 1,343
Share of loss of associate 2,996 6,947 8,184
Share-based payments 706 - 964
----------------------------------------- ---------- ---------- -----------
Net cash from operating activities (2,440) (753) (2275)
----------------------------------------- ---------- ---------- -----------
Cash flows from financing
activities
Proceeds from the issue of share
capital - - 49,507
Share issue costs - - (4,912)
Net cash from financing activities - - 44,595
----------------------------------------- ---------- ---------- -----------
Net increase/(decrease) in cash and
cash equivalents (2,440) (753) 42,320
Effect of exchange rate difference 1,593 (1,108)
Cash and cash equivalents at beginning
of period 49,318 8,106 8,106
----------------------------------------- ---------- ---------- -----------
Cash and cash equivalents at end of
period 48,471 7,353 49,318
----------------------------------------- ---------- ---------- -----------
The notes on pages 12 to 14 form an integral part of the
financial statements.
Notes to the financial statements
1 Business information and going concern basis of
preparation
In common with many exploration and development companies in the
mining sector, the Company raises funding in phases as its projects
develop.
Following exercise of the Xstrata First Call Option, Xstrata is
required to fund and implement the FS in accordance with the
Xstrata Joint Venture Agreement. Xstrata has undertaken to use its
reasonable endeavours to complete the FS at least three months
prior to the expiration of the Zanaga Exploration Licences in May
2014, assuming renewal of the Zanaga Exploration Licences in May
2012 and subject to there being no adverse change. The directors
have a reasonable expectation that the Company has adequate
financial resources to continue in operational existence for the
foreseeable future. For these reasons, the financial statements of
the Company have been prepared on a going concern basis.
In the event that a decision is taken to develop a mine at
Zanaga (and assuming that Xstrata Projects has not acquired the
Company's interest in Jumelles Limited), the Company will need to
raise further funds.
2 Accounting policies
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the periods presented, unless
otherwise stated.
3 Basis of preparation
The condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU.
In accordance with the AIM Rules for Companies, the condensed
set of financial statements has been prepared in applying the
accounting policies and presentation that were applied in the
preparation of the Company's published consolidated financial
statements for the year ended 31 December 2010. The comparative
figures for the financial year ended 31 December 2010 are not the
Company's statutory accounts for that financial year. The accounts
have been reported on by the Company's auditors. The report of the
auditors was (i) unqualified and (ii) did not include a reference
to any matter to which the auditors drew attention by way of
emphasis without qualifying their report.
4 Segmental reporting
The Company has one operating segment, being its investment in
the Zanaga Project, held through Jumelles Limited. Financial
information regarding this segment is provided in note 6.
5 Taxation
The Company is exempt from most forms of taxation in the British
Virgin Islands ("BVI"), provided the Company does not trade in the
BVI and does not have any employees working in the BVI. All
dividends, interest, rents, royalties and other expense amounts
paid by the Company, and capital gains realised with respect to any
shares, debt obligations or other securities of the Company, are
exempt from taxation in the BVI.
The effective tax rate for the Company is therefore US$nil
(2010: US$nil).
6 Investment in associate
US$000
------------------------------------------------- -------
Balance at 1 January 2010 198,439
Share of post acquisition comprehensive loss (6,345)
------------------------------------------------- -------
Balance at 30 June 2010 192,094
------------------------------------------------- -------
Additions 2,544
Share of post acquisition comprehensive income (1,839)
------------------------------------------------- -------
Balance at 31 December 2010 192,799
------------------------------------------------- -------
Balance at 1 January 2011 192,799
Additions 5,968
Share of post acquisition comprehensive income (2,996)
------------------------------------------------- -------
Balance at 30 June 2011 195,771
------------------------------------------------- -------
The investment represents a 50% less one share holding in
Jumelles Limited for the entire share capital of 2,000,000 shares
(2010: 100%). The shares were acquired in exchange for shares in
the Company and have been recorded at fair value of the interest
acquired.
On 11 February 2011 Xstrata exercised the First Call Option and
from that date owns 50% plus one share of Jumelles Limited and
Jumelles Limited is controlled at both a shareholder and director
level by Xstrata. However, as the shares issued on exercise of the
option are not considered to vest until provision of the services
relating to the FS has been completed, the Company will continue to
account for a 100% interest in Jumelles Limited. Only at that time
will the Company account for a reduction in its interest in
Jumelles Limited. As at 30 June 2011, Jumelles Limited had
aggregated assets of US$228.1m (June 2010: US$61.8m) and aggregated
liabilities of US$16.0m (June 2010: US$30.5m). For the 6 months
ended 30 June 2011, it incurred administrative expenses of US$3.1m
(June 2010: US$6.5m) and incurred a tax charge of US$26k (June
2010: US$430k). A summarised consolidated balance sheet of Jumelles
Limited for the 6 months ended 30 June 2011, including adjustments
made for equity accounting, is included below:
June 30 June 30 December 31
2011 2010 2010
Unaudited Unaudited Audited
US$000 US$000 US$000
----------------------------------------- ---------- ---------- -----------
Non-current assets
Property, plant and equipment 15,095 8,766 13,623
Exploration and other evaluation assets 126,588 40,608 78,954
----------------------------------------- ---------- ---------- -----------
141,683 49,374 92,577
Current assets 86,434 12,436 9,206
Current liabilities (15,998) (30,496) (30,846)
----------------------------------------- ---------- ---------- -----------
Net current assets/(liabilities) 70,436 (18,060) (21,640)
----------------------------------------- ---------- ---------- -----------
Net assets 212,119 31,314 70,937
----------------------------------------- ---------- ---------- -----------
Share capital 9,031 519 3,063
Share option reserve 227,131 50,000 88,918
Translation reserve (55) (71) (52)
Retained earnings (23,988) (19,134) (20,992)
----------------------------------------- ---------- ---------- -----------
212,119 31,314 70,937
----------------------------------------- ---------- ---------- -----------
June 30 June 30 December 31
2011 2010 2010
7 Loss per share Unaudited Unaudited Audited
----------------------------------------- ---------- ---------- -----------
Loss (Basic and diluted) (3,804) (7,503)) (13,850)
Weighted average number of shares
(thousands)
Basic and diluted
Issued shares at beginning of period 280,416 101,974 101,974
Effect of shares issued - - 33,788
Effect of own shares (5,574) - (657)
Effect of share split - 152,960 122,229
----------------------------------------- ---------- ---------- -----------
Weighted average number of shares at
end of period - basic 274,842 254,934 257,334
----------------------------------------- ---------- ---------- -----------
Loss per share (cent)
Basic and diluted (0.01) (0.03) (0.05)
----------------------------------------- ---------- ---------- -----------
8 Related parties
The following transactions occurred with related parties during
the period:
Transactions for the
period Closing balance
--------- ----------------------- --------- -------------------
June 30 December 31 June 30 December
2011 June 2010 2010 2011 June 2010 31 2010
Unaudited Unaudited Audited Unaudited Unaudited Audited
US$000 US$000 US$000 US$000 US$000 US$000
--------------- --------- --------- ------------ --------- --------- --------
Intercompany
payable
Jumelles
Limited 234 - 298 64 - 298
Intercompany
payable
Jumelles
Technical
Services UK
Limited 27 - 38 11 - 38
Strata
Capital UK
LLP 57 - 57 - - 57
--------------- --------- --------- ------------ --------- --------- --------
In addition to the transactions above, the Company has also
issued share options to Strata Capital UK LLP. In this regard see
page 49, note 15 in the Company's 2010 Annual Report.
Board of Directors
Clifford Thomas Elphick
Non-Executive Chairman
50 years
Clifford Elphick is the founder and CEO of Gem Diamonds Limited,
a diamond mining company listed on the Main Market of the London
Stock Exchange. Mr Elphick joined Anglo American Corporation in
1986 and was seconded to E Oppenheimer & Son as Harry
Oppenheimer's Personal Assistant in 1988. In 1990 he was appointed
Managing Director of E Oppenheimer & Son, a position he held
until his departure from the company in December 2004. During that
time, Mr Elphick was also a Director of Central Holdings, Anglo
American and DB Investments. Following the buy-out of De Beers in
2000, Mr Elphick served on the De Beers executive committee until
2004. Mr Elphick formed Gem Diamonds Limited in July 2005.
Colin John Harris
Non-Executive Director
64 years
Colin Harris has been working as an exploration geologist for
over 40 years and has a wealth of experience in the generation,
exploration and evaluation of projects covering a variety of
commodities and deposit styles in over 25 countries mainly in
Africa and Europe. He has worked for major international mining
companies including Anglo American, Cominco and more recently Rio
Tinto. During his 18 years at Rio Tinto Mr Harris managed
multi-million dollar programmes which in the past 15 years included
the evaluation of iron ore deposits in Greenland, Scandinavia,
Mali, Mauritania, Algeria, Morocco, Liberia, Senegal, Sierra Leone
etc and more importantly between 1998 and 2008 heading up the team
evaluating the world class Simandou iron ore project in the
Republic of Guinea. Mr Harris resigned from Rio Tinto in 2008 and
joined the Zanaga team later in the year as Project Director. Mr
Harris stepped down as Project Director of the Zanaga Project after
the exercise of the Xstrata Call Option (see page 27 for further
details). Mr Harris is also a Non-Executive Director of AIM listed
Ncondezi Coal Company Limited and AIM and Oslo AXESS listed London
Mining plc.
Clinton James Dines
Non-Executive Director
53 years
Clinton Dines has been involved in business in China since 1980,
including senior positions with the Jardine Matheson Group, Santa
Fe Transport Group and Asia Securities Venture Capital. In 1988 he
joined BHP as their senior executive in China and, following the
merger of BHP and Billiton in 2001, he became President, BHP
Billiton China, a position from which he retired in 2009. Mr Dines
is currently a non-executive director of Kazakhmys plc, which is
listed on the Main Market of the London Stock Exchange.
Michael John Haworth
Non-Executive Director
45 years
Michael Haworth is a director of Strata Limited, Garbet Limited
and is the Managing Partner of Strata Capital UK LLP. Mr Haworth
has 12 years investment banking experience, predominantly in
emerging markets and natural resources. Prior to establishing
Strata Limited in 2006, Mr Haworth was a Managing Director at J.P.
Morgan and Head of Mining and Metals Corporate Finance in London.
During his 10 years at J.P. Morgan, Mr Haworth held a number of
other positions, including Head of M&A for Central Eastern
Europe, Middle East and Africa and, before that, Head of M&A in
South Africa.
Dave John Elzas
Non-Executive Director
45 years
Dave Elzas has over 15 years' experience in international
investment banking. Between 1994 and 2000, Mr Elzas served as a
senior executive and subsequently Managing Director of the Beny
Steinmetz Group. Mr Elzas is currently the Senior Partner and CEO
of the Geneva Management Group, an international wealth management
and financial services company. Mr Elzas has been a non-executive
director of Gem Diamonds Limited since October 2005.
Advisors
Nominated Advisor and Joint Corporate Broker Liberum Capital
Limited Ropemaker Place, Level 12 25 Ropemaker Street London EC2Y
9LY
Joint Corporate Broker Citigroup Global Markets Limited
Citigroup Centre 33 Canada Square, Canary Wharf London E14 5LB
Auditors and Reporting Accountants
KPMG Audit Plc 15 Canada Square London E14 5GL
Legal Berwin Leighton Paisner LLP Adelaide House London Bridge
London EC4R 9HA
Registrars Computershare Investor Services (BVI) Limited
Woodbourne Hall PO Box 3162 Road Town Tortola British Virgin
Islands
Financial PR Pelham Bell Pottinger 5th Floor Holborn Gate 330
High Holborn London WC1V 7QD United Kingdom
This information is provided by RNS
The company news service from the London Stock Exchange
END
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