| Tue 20 Nov 2007, 9:00 | | MMH - Miranda - Audited abridged annual financial |
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MMH
MMH
MMH - Miranda - Audited abridged annual financial results for the year ended 31
August 2007
Miranda Mineral Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/001940/06)
Share code: MMH ISIN: ZAE000074019
("Miranda" or "the company" or "the group")
Audited Abridged Annual Financial Results for the year ended
31 August 2007
Highlights
- Successful completion of maiden capital raising of R15.4 million through the
private placement of 24.4 million shares
- First revenue generated from participation in joint venture (JV) projects
- Attributable loss reduced to 0.97 cents per share (cps) (2006: loss of 2.17
cps)
- Net asset value (NAV) stabilised at 175 cps (2006: 199 cps), including a
tangible NAV of 5.77 cps (2006: (1.17 cps)
- Molebogeng acquisition finalised
- JV signed on the Sesikhona Kliprand coal project - bulk sampling and drilling
to quantify and extend resource have started and process to convert prospecting
permit to mining permit under way
- A further six potential KwaZulu-Natal coal projects in various stages of
development
- Rozynenbosch base mineral project - directors` valuation of R284 million
maintained
- In advanced negotiations to start unlocking value from one property in vast
West Rand clay resource portfolio
- JV signed on highly prospective Lauraville diamond property north-east of
Kimberley
- Exploration on North West Province diamond project commenced - initial results
positive and application made for conversion to a mining licence
- Geophysical and drilling programme started on Mochudi project in Botswana
BALANCE SHEETS
Audited Audited Audited Audited
Group Company Group Company
at at at at
31 Aug 31 Aug 31 Aug 31 Aug
(Figures in R`000) 2007 2007 2006 2006
ASSETS
Non-current assets 317 182 37 689 308 347 24 828
Property, plant and equipment 231 20 228 26
Intangible assets 316 942 - 307 842 -
Investment in subsidiaries and - 31 716 - 22 616
associates
Loans receivable 9 5 953 277 2 186
Current assets 12 182 12 104 484 1
Inventories 77 - - -
Receivables and deposits 85 85 459 -
Cash and cash equivalents 12 020 12 019 25 1
Total Assets 329 364 49 793 308 831 24 829
EQUITY AND LIABILITIES
Capital and Reserves 327 733 47 243 306 039 24 037
Share capital and share premium 54 962 54 962 31 489 31 489
Revaluation reserve 284 522 - 284 522 -
Retained earnings (11 678) (7 719) (9 972) (7 452)
Equity attributable to holders 327 806 47 243 306 039 24 037
of the parent
Minority interest (73) - - -
Non-current liabilities
Loans payable 1004 2 000 873 268
Current liabilities 627 550 1 919 524
Trade and other payables 627 550 1 919 524
Total equity and liabilities 329 364 49 793 308 831 24 829
Net asset value per share 175.14 199.07 - -
(cents)
Net tangible asset value per 5.77 (1.17) - -
share (cents)
INCOME STATEMENTS
Audited Audited Audited Audited
Group Company Group Company
12 months 12 months 12 months 12 months
ended ended ended ended
31 Aug 31 Aug 31 Aug 31 Aug
(Figures in R`000) 2007 2007 2006 2006
Gross revenue 2 000 - 1 -
Operating expenses 4 220 708 3 339 819
Operating loss (2 220) (708) (3 338) (819)
Interest received 441 441 - -
Interest paid - - 1 -
Net loss before taxation (1 779) (267) (3 339) (819)
Taxation - - - -
Net loss for the period (1 779) (267) (3 339) (819)
Attributable to:
Equity holders of parent (1 706) (267) (3 339) (819)
Minority Interest (73) - - -
Earnings / loss per share (0.97) - (2.17) -
(cents)
Headline earnings/(loss) (0.97) - (2.17) -
per share (cents)
Shares in issue - weighted 175 948 - 153 730 -
average number (`000)
CASH FLOW STATEMENTS
Audited Audited Audited Audited
Group Company Group Company
12 months 12 months 12 months 12 months
ended ended ended ended
31 Aug 31 Aug 31 Aug 31 Aug
(Figures in R`000) 2007 2007 2006 2006
Cash flows from operating (2 765) (319) (2 775) (286)
activities
Cash utilized in operating (2 765) (319) (2 774) (286)
activities
Interest paid - - (1) -
Cash flows from investing (8 844) (12 867) (22 544) (22 616)
activities
Property, plant and (12) - (3) -
equipment acquired
Decrease/(increase) in 268 (3 767) 75 -
loans receivable
Subsidiary acquired (9 100) (9 100) (22 616) (22 616)
Cash flows from financing 23 604 25 205 25 345 22 904
activities
Capital raised 23 473 23 473 25 316 25 316
Loan raised 131 2 000 29 -
Loan repaid - (268) - (2 412)
Increase in cash and cash 11 995 12 018 26 2
equivalents
Cash and cash equivalents 25 1 (1) (1)
at beginning of year
Cash and cash equivalents 12 020 12 019 25 1
at end of year
STATEMENTS OF CHANGES IN EQUITY
Attributable equity holders of the parent
Share Share Accumulated Revaluation
capital premium loss reserve
Group R`000 R`000 R`000 R`000
Balance at 1st 307 5 866 (6 633) -
September 2005
Net loss for the - - (3 339) -
year
Issue of share 1 230 24 086 -
capital
Revaluation of - 284 522
intangible assets
Balance at 31 August 1 537 29 952 (9 972) 284 522
2006
Net loss for the - - (1 706) -
year
Issue of share 334 23 138 - -
capital
Balance at 31 August 1 871 53 090 (11 678) 284 522
2007
Attributable equity holders of the parent
Minority Total
Total interest equity
Group R`000 R`000 R`000
Balance at 1st September 2005 (460) - (460)
Net loss for the year (3 339) - (3 339)
Issue of share capital 25 316 - 25 316
Revaluation of intangible assets 284 522 - 284 522
Balance at 31 August 2006 306 039 - 306 039
Net loss for the year (1 706) (73) (1 779)
Issue of share capital 23 472 23 472
Balance at 31 August 2007 327 806 (73) 327 733
COMMENTARY
1. Operational Review
During the 12 months under review. Miranda has made significant progress in the
following areas:
* establishing itself as a new generation exploration group,
* communicating its business model to the market,
* adding to its mineral assets portfolio,
* prioritising and planning the group`s exploration objectives, and
* kick-starting exploration and development work on certain of its projects.
The year has seen the group shift gears and move purposefully to the next level
in its business development plan. The year was characterised by a number of
firsts including:
* the first revenue being generated from two of its projects, and
* the group`s successful maiden capital raising exercise (see under financial
review).
The finalisation of the Molebogeng acquisition enabled Miranda to add selected
strategic minerals to its portfolio, particularly coal. As a result of the
company`s involvement in Sesikhona Kliprand Colliery ("Sesikhona"), it has been
able to identify and apply for a number of additional high-quality coal assets
in the Dundee/Dannhauser area, which will make a significant contribution to the
group`s strategy to develop coal assets in KwaZulu-Natal:
* Applications covering 19 farms and 24 000 hectares, have been submitted to the
Department of Minerals and Energy (the majority of these farms have been well
drilled in the past).
* Miranda has also succeeded in securing the rights to three rail sidings in the
area, which are expected to be of strategic importance once full-scale mining
commences.
* Miranda has opened regional offices in Newcastle.
Management has to date identified and prioritised 10 potentially economically
viable projects, which will be the primary focus of Miranda`s exploration
activities over the next 12 months. These projects have been selected on the
basis of:
* potential return,
* market demand for the mineral,
* the extent of the existing geological information on hand,
* the additional exploration work required, and
* the expected time frame in which these projects can be brought to account.
The capital raising exercise was successfully completed just before the middle
of the financial year, which left the group with only six months to mobilise its
various exploration initiatives. The board is nonetheless satisfied with the
progress made, particularly in relation to the coal and diamond projects. The
group concluded a joint venture agreement with Ihlosi Project Mining on its
Sesikhona project, and drilling results have so far confirmed a measured
resource of 5.4 million tonnes of high grade anthracite. Management is confident
that further drilling will increase the resource by at least another 16 million
tonnes. The process of converting the prospecting permit to a mining right has
started and management believes full-scale mining could start by March/April
next year.
2. Financial Review
2.1 Financial results
For the year ended 31 August 2007, the net asset value and net tangible asset
value of the company remained relatively stable at R327 million and R11 million,
respectively (2006: R306 million and (R1,8 million). This was equivalent to
175.14 cents per share ("cps") and 5.77 cps (2006: 199.07 cps) and (1.17) cps.
Revenue amounted to R2.0 million (2006: R1 000). Operating expenses amounted to
R4.22 million (2006: R3.33 million). The resultant net loss for the period was
R1.79 million (2006: R3.33 million). Prior to the private placing, operating
expenses were financed through shareholders` loans.
Certain of the prioritised projects require that the exploration/mining partner
make an upfront payment to Miranda based on an agreed percentage of the project
value. Revenue for the period consisted of:
* In the case of the Sesikhona anthracite project, the JV partner paid R1
million up front and will pay a further R5 million once the mining license has
been issued. A R5 million guarantee has been issued by the contractor. In
addition, the contractor will pay the company R50 per ton mined once mining has
commenced. The contractor has committed to a minimum monthly tonnage of 30 000
tons.
* A further upfront payment of R1 million has been received from the JV partner
on the group`s Lauraville diamond project. Prospecting is currently underway on
this project and management expects to convert to a mining permit during next
year.
2.2 Private placing
In line with its strategy of "just-in-time" capital raising, the company
successfully completed its maiden capital raising exercise during the period
under review. The private placing was over-subscribed by 2.5 times. An amount of
R15.4 million was raised through the issue of 24.4 million shares at a price of
63 cps. The shares were issued under the board`s general authority. The proceeds
of the private placing will enable the company to complete its exploration
objectives on the prioritised projects referred to above and detailed in the
annual report.
2.3 Acquisition of Molebogeng
During the period, the company completed the acquisition of of 100% of
Molebogeng Mining and Investment Holdings (Pty)Ltd ("Molebogeng"). Payment was
effected by the issue of 9 million new Miranda shares at a price of 90 cps. The
board considers the acquisition to be of strategic importance in view of
Molebogeng`s holdings in coal, diamonds and gold exploration assets.
2.4 Valuation of Rozynenbosch base metal project
In terms of International Financial Reporting Standards ("IFRS") the board is
required to test on a regular basis for any impairment or material change in the
value of the companies assets. At the end of the current financial reporting
date the two main variables affecting value, namely the exchange rate and
commodity prices, had shown an upward movement. Given these changes, the value
of the project in Rand terms has increased to R617 million (Feb 2007: R284
million). Consistent with the approach taken in the 2006 annual results, and
given the uncertainty of the long-term sustainability of current commodity
prices, the board is still of the opinion that the previously reported value of
R284 million is more realistically achievable over the life of the project. The
value of the project has therefore not been adjusted at the reporting date.
3. Prospects
The company is satisfied with the results and expenditure to date. The success
of the private placing and the potential revenue that will be generated from the
JV partnerships indicated above have placed the group in a position to fast
track certain coal and diamond projects, which are expected to yield positive
results in the next 12 to 18 months. At the same time, a number of challenges
still need to be overcome, one of which is the conversion of mining rights.
The board is satisfied, however, that the right building blocks have been put in
place on which future operational activities can be based. The group remains
focused on the task of unlocking the inherent value of its mineral assets
through sustainable JVs with its preferred mining partners. The directors are
excited at the number of opportunities being offered to the company, both in
terms of project development and corporate activity.
4. Statement on going concern
The financial statements have been prepared on the going-concern basis since the
directors have every reason to believe that the company has adequate resources
in place to continue in operation for the foreseeable future. The funds raised
by the private placement will be used to complete the exploration program
detailed in the annual report and to provide for the company`s operational cash
flow requirements for the next eighteen months. The company will continue with
its strategy of "just in time" capital raising as and when required. Additional
cash flow requirements will be funded internally from future revenue generated
from joint venture projects.
5. Basis of preparation and accounting policies
The annual financial statements have been prepared in accordance with IFRS and
IAS 34 on International Financial Reporting. The financial statements have been
prepared under the historical cost convention and the accounting policies are
consistent with those of the previous year except as modified by IFRS for the
period ending 28 February 2007. As previously reported, the application of IFRS
to the financial statements required no adjustment to the historical financial
results. The value of the Rozynenbosch mineral resource is stated at fair value,
and is in accordance with IFRS 6 and its interpretation adopted by the
International Accounting Standards Board.
6. Dividends
No dividends were recommended or declared for the financial year under review
(2006: nil).
7. AUDIT REPORT
The annual results have been audited by the company`s auditors PKF (Pretoria)
Inc whose unqualified audit report is available for inspection at the groups"
registered address.
For and on behalf of the Board
TV Mokgatlha RJ Nel
Chairman Chief Executive Officer
20 November 2007
Pretoria
Transfer secretaries
Computershare
Computershare Investor Services 2004 (Pty) Ltd
(Registration number 2004/003647/07)
Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)
Corporate adviser
Touchstone Capital (Pty) Ltd
Date: 20/11/2007 09:00:13 Produced by the JSE SENS Department.
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