| Fri 30 Mar 2007, 12:15 | | DMR - Diamond Core Resources Limited - Interim res |
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DGC DMRO
DGC
DMR - Diamond Core Resources Limited - Interim results for the six month
period ended 31 December 2006
Diamond Core Resources Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/013468/06)
Share code: DMR & ISIN Number: ZAE000076956
Option code: DMR & ISIN Number: ZAE000078945
("Diamond Core" or "the Company")
Interim results for the six month period ended 31 December 2006
FINANCIAL RESULTS
CONSOLIDATED INCOME STATEMENT
Unaudited Reviewed Audited
6 months 6 months year
ended ended ended
31 December 31 December 30 June
2006 2005 2006
R `000 R `000 R `000
Revenue - - -
Cost of sales - - -
Gross loss - - -
Other operating income 3 19 19
Exploration costs (240) (734) (1,315)
Other operating expenses (15,340) (3,200) (9,681)
Impairment losses - - 1,233
Impairment of excess goodwill /
investment on acquisition of
subsidiary - - (53,296)
Operating loss (15,577) (3,915) (63,040)
Investment income 7,521 157 2,714
Finance costs (14) (5) (7)
Net loss before taxation (8,070) (3,763) (60,333)
Taxation - - -
Net loss for the period (8,070) (3,763) (60,333)
Attributable to:
Minorities (668) - -
Ordinary shareholders (7,402) (3,763) (60,333)
(8,070) (3,763) (60,333)
Number of shares in issue (`000) 294,340 66,340 294,276
Weighted average number of shares
in issue (`000) 294,335 65,275 126,719
Weighted average number of shares
in issue for diluted earnings
(`000) 319,250 71,557 134,446
Headline loss per share (cents) (2.51) (5.76) (6.53)
Loss per share (cents) (2.51) (5.76) (47.61)
Diluted loss per share (cents) (2.32) (5.26) (44.88)
Reconciliation of loss and
headline loss:
Attributable loss for the period (7,402) (3,763) (60,333)
Impairment of mining assets - - (1,233)
Impairment of excess goodwill on
acquisition of subsidiary - - 53,296
Headline loss (7,402) (3,763) (8,269)
CONSOLIDATED BALANCE SHEET
ASSETS
Non-current assets 194,355 17,396 109,194
Mining assets 88,263 3,896 7,004
Mineral rights 101,864 13,500 101,864
Exploration costs 4,228 - 326
Current assets 131,943 4,729 220,217
Inventories 1,204 - -
Trade and other receivables 15,361 1,961 514
Cash and cash equivalents 115,378 2,768 219,703
Total assets 326,298 22,125 329,411
EQUITY AND LIABILITIES
Total equity 289,241 17,235 285,415
Share capital 3 6,634 3
Share premium 319,198 60,511 319,198
Shares to be issued 48,366 - 48,366
Share based payments reserve 24,826 491 24,826
Accumulated loss (114,380) (50,401) (106,978)
Shareholders` interest 278,013 17,235 285,415
Minority interest 11,228 - -
Non-current liabilities 28,518 3,975 29,593
Non-interest bearing borrowings - 1,075 1,075
Rehabilitation provision 2,900 2,900 2,900
Deferred taxation 25,618 - 25,618
Current liabilities 8,539 915 14,403
Obligation to minorities - - 11,895
Short term portion of non-interest
bearing borrowings 1,075 - -
Trade and other payables 7,464 915 2,508
Total equity and liabilities 326,298 22,125 329,411
Net asset value per share (cents) 94.45 25.98 96.99
Net tangible asset value per share
(cents) 67.11 5.63 70.97
CONSOLIDATED CASH FLOW STATEMENT
Cash flow from exploration and mining
activities (16,741) (5,201) (6,887)
Cash utilised by exploration and
mining activities (24,248) (5,353) (9,594)
Investment income 7,521 157 2,714
Finance costs (14) (5) (7)
Cash flows from investment activities (87,584) (293) (2,024)
Mining assets acquired (83,682) (293) (2,144)
Exploration costs capitalised (3,902) - (326)
Proceeds on disposal of mining assets - - 446
Cash flow from financing activities - 968 221,320
Net proceeds from shares issued - 968 223,544
Loans settled - - (2,224)
Net increase / (decrease) in cash and
cash equivalents (104,325) (4,526) 212,409
Net cash and cash equivalents at
beginning of period 219,703 7,294 7,294
Net cash and cash equivalents at end
of period 115,378 2,768 219,703
STATEMENT OF CHANGES IN SHAREHOLDERS`
EQUITY
Share capital and share premium 319,201 67,145 319,201
Shares to be issued 48,366 - 48,366
Share-based payments reserve 24,826 491 24,826
Accumulated loss at beginning
of period (106,978) (46,638) (46,645)
Net loss for the period (7,402) (3,763) (60,333)
278,013 17,235 285,415
COMMENTARY
1. GENERAL
Subsequent to the capital raise in March 2006 and the appointment of
operational and technical staff, the Company has commenced with the
implementation of the first phase of its growth path. The focus for the
period under review has been to bring to account the projects for which the
capital has been raised and allocated. In addition, it has conducted a
parallel strategy to identify and evaluate targets for acquisition which
are in line with our strategy and operating philosophy and are value
accretive for shareholders.
Infrastructure and administrative functions have been developed to support
the development of the Company`s portfolio of projects. The Company
subscribes to the Kimberley Process and has engaged an independent
consultant to ensure compliance therewith and to implement the Chain of
Custody documents required.
The Company has a total of 2 Mining Rights and 7 Prospecting Rights
covering 106,761 hectares. Integration with the Northern Cape communities
in which we operate continues via numerous initiatives. A surface use
agreement for Sandstraat Eksplorasie (Edms) Bpk has been concluded.
2. OPERATIONAL REVIEW
2.1 Paardeberg East
The commissioning of the 50 tonne per hour Dense Media Separation (DMS)
plant and final recovery unit has been completed and the Company is poised
to commence with the bulk sampling of PK1. Independent verification and
auditing of the bulk sampling plant and process has been initiated as the
Company wishes to report results that are SAMREC compliant. Further
drilling and geological work on PK3 is scheduled for the second quarter of
2007.
2.2 Silverstreams
Construction of the processing plant continues. The capital spend for the
project increased by 14% but is expected to yield an increase in front end
capacity in excess of 400%. Commissioning of the plant is scheduled for the
middle of April 2007 and bulk sampling operations are scheduled to commence
in the beginning of May 2007.
2.3 Parallel strategy
Development of the Uitdraai and De Kalk projects will be the focus during
the second quarter of 2007 upon completion of the Paardeberg East and
Silverstreams projects.
The Company recently announced the conclusion of an agreement to acquire
the Sanddrift project from SouthernEra Management Services (Pty) Ltd and
Minex Projects (Pty) Ltd. Sanddrift is adjacent to the Silverstreams
project and has the potential to add significantly to the alluvial gravel
resources of the Company.
Additional exploration work has been performed on the Skeyfontein
kimberlite project, results of which will be reported Further exploration
work is planned for the `blue sky` projects, which include the Koa Valley
and Kuiljiespan projects.
3. FINANCIAL REVIEW
3.1 Statement of compliance and basis of preparation
The consolidated interim financial statements for the half year ended 31
December 2006 have been prepared in accordance with International Financial
Reporting Standards and are in compliance with IAS 34, Interim Financial
Reporting . These results have not been reviewed or audited by the
Company`s auditors. The accounting policies have been applied consistently
to all periods presented in the interim financial statements.
3.2 Commentary
Diamond Core is an exploration company and does not generate mining revenue
at present. Operating expenses increased to R15,339,664 (2005: R3,199,714)
as the Company began to operationalise its assets. Exploration costs of
R4,141,533 (2005: R733,899) were incurred during the period of which the
largest proportion relate to the Paardeberg East project.
Investment income generated for the period amounted to R7,520,969 (2005:
R157,195). Capital expenditure of R83,6 million was incurred during the
period which includes earthmoving plant (R38,5 million) and processing
plant (R42,6 million) for the Paardeberg East and Silverstreams projects.
Cash resources available to the Company at the end of the period amount to
R115,378,465. Trade and other receivables is comprised mainly of VAT
recoverable from SARS arising from the acquisition of the earthmoving and
processing plant.
4. LITIGATION
There are currently no legal or arbitration proceedings against the Company
or its subsidiaries (including any proceedings which are pending or
threatened) of which the Company is aware which may have, or have had in
the 12 months preceding the date of this report, a material effect on the
consolidated position of the Company.
5. OUTLOOK
Exploration for, and mining of diamonds is a long-term, high risk business
activity which needs to be planned and implemented optimally. Nevertheless,
the board is satisfied that the exploration capital with regards to the
financial results for the period under review has been optimally applied
and remains positive regarding the sustainability and future prospects of
the Company.
For and on behalf of the Board:
AR Davids T Botoulas
Non-executive Chairman Chief Executive Officer
30 March 2007
Directors: AR Davids*, T Botoulas, CI Campbell, S Nachom*(USA), MJ
Prinsloo*, GD Hunter*, JK Barker*(UK) (* non-executive)
Company secretary: J Marshall
Registered address: Block C St Andrews Office Park, Meadowbrook Lane,
Epsom Downs, Bryanston
Transfer secretaries: Computershare Investor Services 2004 Limited,
70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown,2107)
Sponsor: River Group
Website: www.diamondcore.co.za
Date: 30/03/2007 12:15:53 Produced by the JSE SENS Department.
