| Fri 25 May 2007, 17:30 | | ELD-Eland- Audited condensed consolidated results: |
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ELD
ELD
ELD-Eland- Audited condensed consolidated results: 15 months ended 31 March 2007
Eland Platinum Holdings Limited
"Eland Platinum" or "the company"
Incorporated in the Republic of South Africa
(Reg no: 2005/029957/06)
(ISIN: ZAE000078655)
JSE code: ELD
Audited Condensed Consolidated Results
for the 15 months ended 31 March 2007
Condensed Income Statement
From date of
15 months incorporation
to
ended 31
31 March December
2007 2005
(R thousand) Note Audited Audited
Revenue - -
Cost of sales - -
Gross profit - -
Administrative expenses 2 (51 882) (3 246)
Operating loss before financing
income/(costs) and taxation (51 882) (3 246)
Net finance income/(costs) 38 200 (194)
Loss before tax (13 682) (3 440)
Income tax expense 3 (16 607) (64)
Loss for the period (30 289) (3 504)
Attributable to:
Equity holders of the parent (30 289) (3 503)
Minority interest - (1)
Loss for the period (30 289) (3 504)
Basic loss per share (cents) 4 (50.1) (52.5)
Diluted loss per share (cents) 4 (50.1) (52.5)
Headline loss per share (cents) 4 (50.1) (52.5)
Condensed Balance Sheet
31 December
31 March 2005
2007 Restated
(R thousand) Note Audited Audited
Assets
Total non-current assets 5 639 565 123 895
Total current assets 6 561 162 51 397
Total assets 1 200 727 175 292
Equity and liabilities
Total equity 7 1 067 742 105 324
Total non-current liabilities 8 26 502 39
Total current liabilities 7/9 106 483 69 929
Total equity and liabilities 1 200 727 175 292
Condensed Cash Flow Statement
From date of
incorporation
15 months to
ended 31 December
31 March 2005
2007 Restated
(R thousand) Audited Audited
Net cash flows from operating 17 495 (14 668)
activities
Net cash flows from investing (486 846) (62 394)
activities
Net cash flows from financing 965 277 111 346
activities
Net increase in cash and cash 495 926 34 284
equivalents
Cash and cash equivalents at the 34 284 -
beginning of the period
Cash and cash equivalents at the end of 530 210 34 284
the period
Condensed Statement of Changes in Equity
Share-
based
Payment
Audited Issued Share Trans-
(R thousand) Capital Premium actions
Shares issued 345 111 265 -
Share issue expenses - (2 783) -
Minority shareholders` interest - - -
Total recognised income and
expense for the period
(loss for the period) - - -
Balance at 31 December 2005 345 108 482 -
Shares issued 369 999 065 -
Share issue expenses - (27 347) -
Share based payment transactions - - 20 620
Minority shareholders` interest - - -
Total recognised income and - - -
expense for the period (loss for
the period)
Balance at 31 March 2007 714 1 080 200 20 620
Accumu-
Audited lated Minority
(R thousand) Deficit Interest Total
Shares issued - - 111 610
Share issue expenses - - (2 783)
Minority shareholders` interest - 1 1
Total recognised income and
expense for the period
(loss for the period) (3 503) (1) (3 504)
Balance at 31 December 2005 (3 503) - 105 324
Shares issued - - 999 434
Share issue expenses - - (27 347)
Share based payment transactions - - 20 620
Minority shareholders` interest - - -
Total recognised income and (30 289) - (30 289)
expense for the period (loss for
the period)
Balance at 31 March 2007 (33 792) - 1 067 742
Notes
1. The condensed consolidated results for the period ended 31 March 2007
incorporate extracts of the group`s unqualified audited annual
financial statements. The principal accounting policies used by Eland
Platinum Holdings Limited and its subsidiary companies (`the group`)
are in accordance with International Financial Reporting Standards
(`IFRS`) and the South African Companies Act, 61 of 1973 (as amended),
and are, except as noted below, consistent with those applied in the
annual financial statements for the period ended 31 December 2005. For
a better understanding of the group`s financial position and results
of operations, these condensed consolidated results are to be read in
conjunction with the group`s audited annual financial statements for
the period ended 31 March 2007, which include all disclosures required
by IFRS, and which are expected to be released on or about 15 June
2007.
The comparative figures are for the period from the date of
incorporation, 26 August 2005, to 31 December 2005.
During the period the group adopted IFRS 6 - Exploration for and
Evaluation of Mineral Resources (`IFRS 6`). In accordance with this
standard, expenditure incurred in the exploration for and evaluation
of mineral resources is capitalised as either tangible or intangible
exploration and evaluation assets until such time as the technical
feasibility and commercial viability of extracting the mineral
resource is demonstrable, after which the asset is transferred to
property, plant and equipment. The 2005 results have been restated to
comply with IFRS 6 (see note 5).
2. Administrative and other operating expenses for the 15-month period
include:
* Employee benefit expense of R19.7 million (2005: R0.7 million).
* Consulting, legal and professional fees of R8.3 million (2005:
R2.3 million).
* Investor relations costs of R3.1 million (2005: R Nil), which
mainly comprise that portion of the listing costs that were not
written off against share premium.
* Mining and exploration costs that were not capitalised of R4.9
million (2005: R0.3 million).
* Operating lease costs of R2.8 million (2005: R Nil).
* Insurance costs that were not capitalised of R2.4 million (2005:
R Nil).
3. Income tax expense comprises current taxation expenses of R11.5
million (2005: R0.02 million), deferred tax credits of R0.8 million
(2005: R Nil) and a provision for Secondary Tax on Companies (`STC`)
of R5.9 million (2005: R0.04 million).
4. Loss per share:
The calculation of basic, diluted and headline loss per share is based
on the loss for the 15-month period of R30.3 million (2005: R3.5
million). The basic weighted average number of shares in issue
increased during the period to 60 410 930 (2005: 6 668 465). The
diluted weighted average number of shares in issue increased during
the period to 60 696 645 (2005: 6 668 465), but as the group is in a
loss position, it has no dilutive effect on the basic loss per share.
5. Capital expenditure (including accruals but excluding environmental
rehabilitation provisions) for the 15-month period under review
amounted to R487.9 million (2005: R123.9 million) of which R96.3
million (2005: R117.3 million) has been capitalised to an intangible
asset in terms of IFRS 6. During the period, R142.1 million of the
total intangible asset of R213.6 million has been transferred to
mining assets as the technical feasibility and commercial viability of
extracting the mineral resource at the Elandsfontein mine is now
demonstrable. The remainder of the intangible asset (R71.5 million)
represents acquisition and exploration costs related to the Merensky
Reef and the `triangle area` (refer commentary) where the technical
feasibility and commercial viability of extracting the mineral
resource is not yet demonstrable.
6. Current assets include:
* Unrestricted cash of R530.2 million (2005: R34.3 million)
* Restricted cash of R8.9 million (2005: R Nil)
* Prepayments of R5.3 million (2005: R Nil)
* Value-added tax recoverable of R15.4 million (2005: R17.1
million)
* Inventory (ore stockpile) of R1.1 million (2005: R Nil)
7. The group purchased the 51% participation right of empowerment company
Waterberg Portion Property (Pty) Ltd in the triangle area, which forms
part of the Elandsfontein Platinum Mine. The group`s aggregate
interest in the triangle area is now 73.9%. The acquisition was
settled on 2 April 2007 by payment of R50 million in cash and the
issue of 285 715 Eland Platinum shares at R70/share, being the closing
share price of Eland Platinum on the effective date of the agreement,
for a consideration of R20 million. The 285 715 shares issued have
been accounted for as a share-based payment in terms of IFRS 2 - Share-
based Payment.
8. Non-current liabilities include an environmental rehabilitation
provision of R20.2 million (2005: R Nil) and a deferred STC provision
of R5.9 million (2005: R0.04 million).
9. Current liabilities include:
* Trade and other payables - R43.2 million (2005: R5.9 million)
* Amounts owing to vendors of mining rights and surface rights -
R50.0 million (refer note 7 above) (2005: R61.5 million)
* Current taxation - R9.1 million (2005: R0.02 million)
* Interest-bearing borrowings of R4.2 million (2005: R2.5 million)
10. No dividends have been declared nor are any proposed for the period
under review.
11. The net asset value per share (cents) at 31 March 2007 is 1 495.8
(2005: 305.7).
12. The annual financial statements for the period ended 31 March 2007
have been audited by KPMG Inc., and their unmodified audit report is
available for inspection at the company`s registered office.
Commentary
15 momentous months
The 15 months from January 2006 to March 2007 inclusive were momentous. In the
first quarter of 2006, a major focus of attention was the preparation for the
company`s listing on the JSE Limited on 29 March. The listing raised R525.0
million (before expenses) through the issue of 25 000 000 shares, and an
additional R55.8 million (before expenses) through the issue of 2 657 349 shares
when Nedbank Limited exercised its over-allotment option. Proceeds from these
issues augmented the R180.2 million (before expenses) raised from the private
placement of 11 224 084 shares during December 2005 to February 2006. The total
amount of equity raised during the private placement and listing, net of
expenses, was R731.1 million.
The 12-month period from April 2006 to March 2007 inclusive was punctuated with
a series of events marking steady progress by the board and management team in
addressing the ambitious development schedule for the Elandsfontein Platinum
Project. These included:
* a 44% increase in Elandsfontein`s UG2 resources;
* completion of the bankable feasibility study;
* the mandating of Nedbank Capital to arrange project financing;
* the placing of orders for long-lead items both to minimise shortages and
delays and to lock in prices;
* the awarding of key contracts, the emphasis being on placing the business
with companies with both the requisite track record and black economic
empowerment (BEE) credentials;
* the securing of a mining right from the South African Department of
Minerals and Energy, reflecting approval of both the company`s
Environmental Management Plan and Social and Labour Plan;
* the first blast - on schedule - to mark the start of open-pit production;
* the start of construction of the concentrator;
* the announcement of the UG2 mineral reserve estimate for Elandsfontein -
42.0Mt (4.6Moz 4E PGM (platinum, palladium, rhodium and gold));
* inclusion of the contiguous Zilkaatsnek area into Elandsfontein;
* acquisition of the balance of the so-called `triangle` area adjacent to
Elandsfontein;
* the placing of new shares at a premium to the ruling price raising R350
million; and
* agreement of the terms of an R800 million project finance facility with
Nedbank Capital.
This sustained track record of delivery was rewarded by an outstanding 524%
appreciation in the company`s market capitalisation, from R1.34 billion at the
time of listing to
R8.36 billion at 24 May 2007, and its rapid escalation in the investment market
to mid-tier PGM mining status.
Financial
After accounting for administrative and other operating expenses of R51.9
million, net finance income of R38.2 million and taxation of R16.6 million, the
loss for the period under review was R30.3 million, equating to a headline loss
per share of 50.1 cents. Revenue will be generated once concentrate production
begins.
Looking ahead
Immediate priorities, in terms of development at Elandsfontein, are:
* continued production build-up from the opencast operation, targeting a
stockpile of 600 000t of ore in readiness for the commissioning of the
concentrator in October 2007 and the production of first concentrates; and
* the start of site establishment of the underground mining operation during
the fourth quarter of calendar 2007.
In line with the company`s target to be a 1 million PGM ounce a year
producer by 2015, work continues to evaluate:
* the Zilkaatsnek and `triangle` areas, thus doubling production; and
* further growth opportunities.
On behalf of the board
Loucas Pouroulis David Salter
(Chairman) (Managing Director)
25 May 2007
Registered Office:
1st Floor, Eland Platinum House
The Braes
3 Eaton Avenue
Bryanston
South Africa
(Postnet Suite 433,
Private Bag X51, Bryanston 2021)
Transfer Secretaries:
Link Market Services South Africa (Pty) Ltd
(formerly Ultra Registrars (Pty) Ltd)
5th Floor, 11 Diagonal Street
Johannesburg 2001
South Africa
(PO Box 4844, Johannesburg 2000)
Auditors:
KPMG Inc.
1226 Schoeman Street
Hatfield, Pretoria
Directors:
LC Pouroulis (chairman)*, Dr JD Salter (managing
director)**, JA Clark, JM Jansen van Vuuren,
GY Ditodi+, Dr PM Maduna+, SR Ngwenya+,
LS Modise++, LX Mtumtum++
*Cypriot **British +non-executive,
++independent non-executive
telephone: +27 0(11) 996 3500
telefax: +27 0(11) 996 3525
email: info@elandplats.com
Date: 25/05/2007 17:30:01 Produced by the JSE SENS Department.
