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SAM
SAM
SAM - Samroc - Reviewed preliminary results for the year ended 30 June 2007
SA Mineral Resources Corporation Limited
Registration number 1993/000460/06
Incorporated in the Republic of South Africa
JSE share code: SAM
ISIN: ZAE000012019
("Samroc" or "the company")
REVIEWED PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2007
BALANCE SHEET
Reviewed Audited
30 June 2007 30 June 2006
R`000 R`000
ASSETS
NON-CURRENT ASSETS
Plant and equipment 10,539 11,377
10,539 11,377
CURRENT ASSETS
Inventories 472 318
Accounts receivable 1,790 1,428
Other assets 808 166
Cash and cash equivalents 165 165
3,235 2,077
TOTAL ASSETS 13,774 13,454
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
Issued share capital 3,743 3,743
Share premium 27,152 27,152
Accumulated loss (29,783) (28,938)
1,112 1,957
NON-CURRENT LIABILITIES
Long term liabilities 9,778 9,140
Provision for environmental 526 526
rehabilitation
10,304 9,666
CURRENT LIABILITIES
Short term portion of long term - 8
liabilities
Accounts payable 2,127 1,690
Provisions 176 133
Other current liabilities 55 -
2,358 1,831
TOTAL EQUITY AND LIABILITIES 13,774 13,454
INCOME STATEMENT
Reviewed Audited
30 June 2007 30 June 2006
R`000 R`000
REVENUE 15,390 9,144
Cost of sales (10,923) (6,352)
GROSS PROFIT 4,467 2,792
Other income 49 -
Operating costs (4,717) (4,608)
OPERATING PROFIT (LOSS) (201) (1,816)
Impairment loss - (2,600)
Interest paid (644) (655)
NET PROFIT (LOSS) FOR THE YEAR (845) (5,071)
Number and weighted number of 374,275 374,275
shares for the year (`000)
Earnings/ (Loss) per share (0.2) (1.4)
(cents)
Headline earnings/ (loss) per (0.2) (0.7)
share (cents)
HEADLINE EARNINGS RECONCILIATION
Reviewed Audited
30 June 2007 30 June 2006
R`000 R`000
Headline earnings are determined
as follows:
Earnings for the year (845) (5,071)
Adjusting for Impairment loss - 2,600
Headline loss for the year (845) (2,471)
CASHFLOW STATEMENT
Reviewed Audited
30 June 2007 30 June 2006
R`000 R`000
CASH FLOW FROM OPERATING
ACTIVITIES
Cash generated by/(utilised in) 14 (613)
operating activities
Net interest received/ (paid) (644) (332)
Net cash flow from operating (630) (945)
activities
CASH FLOW FROM INVESTING
ACTIVITIES
Plant and equipment acquired - (29)
Net cash used in investing - (29)
activities
CASH FLOW FROM FINANCING
ACTIVITIES
Long term liability raised 638 (12)
Lease repayments (8) (36)
Net cash generated by financing 630 (48)
activities
Increase/(decrease) in cash and - (1,022)
cash equivalents
Cash and cash equivalents at 165 1,187
beginning of year
Cash and equivalents at end of 165 165
year
STATEMENT OF CHANGES IN EQUITY
Share Share Accumulated Total
capital premium loss
R`000 R`000 R`000 R`000
Balance - 30 June 2005 3,743 27,152 (23,867) 7,028
Net loss for the year - - (5,071) (5,071)
Balance - 30 June 2006 3,743 27,152 (28,938) 1,957
Net loss for the year - - (845) ( 845)
Balance - 30 June 2007 3,743 27,152 (29,783) 1,112
Samroc`s business is the sourcing, extraction and beneficiation of mineral
resources. It has a manganese chemical processing plant at Greenhills near
Graskop, Mpumalanga. It has been manufacturing manganese sulphate powder,
manganese sulphate solution and manganese oxide since 2000. The company has
expressed its intention to acquire access to additional mineral resources.
COMMENTARY
Turnover in the second half of the financial year improved significantly on
stronger orders from Namzinc, Samroc`s principal customer. Local orders were
also improved, and the company has demonstrated its capability of operating on a
cash positive basis. The challenge for the company is now to reduce its
production costs to a level where its product is once again competitive in
overseas markets.
GREENHILLS PLANT
Production for the financial year amounted to 3 942 tonnes (2006: 2 647 tonnes)
of manganese sulphate powder and 238 tonnes (2006: 1 258 tonnes) of manganese
oxide. The plant still has capacity to increase production, subject to the
receipt of acceptable orders.
The plant has been operating since 2000, and a certain measure of maintenance
capex will be required within the current financial year, estimated at
approximately R1.0 - 1.5 million. In addition, management is investigating the
possibility of introducing improvements to increase throughput and reduce unit
costs in order to enable the company to export competitively. Preliminary
estimates put this cost at R1.5 million. No decision has yet been taken about
the financing of this expansion, which will be dependent on the return potential
of the expenditure.
The company has undertaken a review of the status of its environmental
management at Greenhills and is in the process of evaluating its financial
provisions arising therefrom.
FIRE AT THE GREENHILLS PLANT
It was announced on 1 August 2007 the Greenhills plant was partially damaged by
fire on Tuesday, 31 July 2007. Among other things the fire destroyed all the
recent financial records of the company and a number of other critical
documents. This led to a delay in finalising the preliminary results
announcement. Full production at the plant resumed within two weeks after the
fire, causing negligible disruption in supplying customers` orders.
FINANCIAL
The company recorded a loss of R845 000 for the twelve month period ended 30
June 2007. Trading improved significantly during the second half of the year and
given the current trading conditions, the company is expected to return to
profitability in the next financial year.
CAPITAL RESTRUCTURE
In an announcement released on SENS on 8 June 2007 Samroc shareholders were
advised inter alia that:
* GVM, the principal shareholder of Samroc, has agreed, subject to the
implementation of the proposals, to dispose of its 26.2% shareholding (98
million shares) in Samroc to a black-owned company at a price of 1 cent per
share;
* Proposals would be put before the shareholders of Samroc for the
restructure of Samroc`s capital, the appointment of new directors and
expanding the management team;
* Further proposals will be placed before shareholders in due course for the
acquisition of new mineral resources assets; and
* Samroc will issue new ordinary shares following the restructure by way of a
specific issue of new ordinary shares for cash to raise approximately R10
million.
Discussions regarding the proposals are ongoing and further announcements will
be made shortly. The company is under a cautionary announcement with regard to
the proposals.
GOING CONCERN
The directors are of the opinion that the company remains a going concern,
subject to the continued support from its major customer and to the
implementation of the capital restructure referred to above.
ACCOUNTING POLICY
The accounts set out herein are prepared in accordance with International
Financial Reporting Standards and IAS 34, and are consistent with Samroc`s
accounting policies applied in the corresponding reporting period.
REVIEW OPINION
The financial information set out in these results has been reviewed by Samroc`s
auditors Moore Stephens MWM who issued a modified review opinion that the going
concern status of Samroc is subject to the continued support from Samroc`s major
customer. This matter indicates the existence of a material uncertainty which
may cast significant doubt about the group`s ability to continue as a going
concern. The review opinion is available for inspection at the company`s
registered office.
DIVIDEND
No dividend has been declared or recommended for this period.
For and on behalf of the Board
BH Christie SR Rowse
Non-Executive Director Executive Director
Johannesburg
12 October 2007
Directors: RJ Linnell (Chairman), SR Rowse (Executive), BH Christie*, SJ
Farrell** (*British, **Australian)
Registered office: 7 West Street, Houghton
Registered postal address: PO Box 7798, Centurion 0046
Transfer secretaries: Ultra Registrars (Pty) Ltd, PO Box 4844,
Johannesburg, 2000
Company Secretary: EM Taylor
Date: 12/10/2007 16:38:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
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employees and agents accept no liability for (or in respect of) any direct,
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howsoever arising, from the use of SENS or the use of, or reliance on,
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