| Mon 31 Mar 2008, 10:15 | | MMH - Miranda Mineral Holdings Limited - Unaudited financial results for the six |
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MMH
MMH
MMH - Miranda Mineral Holdings Limited - Unaudited financial results for the six
months ended 29 February 2008
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")
Unaudited Financial Results for the six months ended 29 February 2008
Highlights
* Successful completion of second capital raising of R20.7 million through the
private placement of 28 million shares.
* Six prospecting permits granted on Miranda`s KwaZulu-Natal coal prospects.
* A further two prospecting permits granted adjacent to the group`s Mochudi
diamond project in Botswana.
* Acceptance by the DME of Miranda`s application to have the mining right of the
group`s Sesikhona coal project converted.
* First diamonds recovered from North West diamond project.
* Strategic review of assets underway.
* Coal, diamonds and gold the key commodity classes undergoing immediate
development and increased focus.
CONSOLIDATED BALANCE SHEETS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
(Figures in R`000) 29 Feb 2008 28 Feb 2007 31 Aug 2007
ASSETS
Non-current assets 317 271 316 447 317 182
Property, plant and 321 228 231
equipment
Intangible assets 316 942 315 942 316 942
Investment in subsidiaries 0 0 0
and associates
Loans receivable 8 277 9
Current assets 28 711 15 191 12 182
Inventories - - 77
Receivables and deposits 330 623 85
Cash and cash equivalents 28 381 14 568 12 020
Total Assets 345 982 331 638 329 364
EQUITY AND LIABILITIES
Capital and Reserves 344 931 328 172 327 733
Share capital and share 75 681 54 961 54 962
premium
Revaluation reserve 284 522 284 522 284 522
Retained earnings (15 272) (11 311) (11 678)
Non-current liabilities
Loans payable 1 004 1 367 1004
Current liabilities
Trade and other payables 47 2 099 627
Total equity and 345 982 331 638 329 364
liabilities
Net asset value per share 160.3 175.4 175.1
(cents)
Net tangible asset value 13.0 6.5 5.8
per share (cents)
Shares in issue - closing 215 131 187 131 187 131
number (`000)
CONSOLIDATED INCOME STATEMENTS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
(Figures in R`000) 29 Feb 2008 28 Feb 2007 31 Aug 2007
Gross revenue 263 - 2 000
Operating expenses (4 370) (1 339) 4 220
Operating loss (4 107) (1 339) (2 220)
Interest received 817 - 441
Interest paid (229) - -
Net loss before taxation (3 519) (1 339) (1 779)
Taxation - - -
Net loss for the period (3 519) (1 339) (1 779)
Loss per share (cents) (1.8) (0.8) (0.97)
Headline loss per share (1.8) (0.8) (0.97)
(cents)
Shares in issue - weighted 192 053 163 669 187 131
average number (`000)
CONSOLIDATED CASH FLOWS STATEMENTS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
(Figures in R`000) 29 Feb 2008 28 Feb 2007 31 Aug 2007
Cash flows from operating (4 267) (1 323) (2 765)
activities
Cash utilised in operating (4 855) (1 323) (2 765)
activities
Interest paid 588 - -
Cash flows from investing (91) (8 100) (8 844)
activities
Property, plant and (90) - (12)
equipment acquired
Decrease/(increase) in (1) - 268
loans receivable
Subsidiary acquired - (8 100) (9 100)
Cash flows from financing 20 719 23 966 23 604
activities
Capital raised 20 719 23 473 23 473
Loan raised - 494 131
Increase in cash and cash 16 361 14 543 11 995
equivalents
Cash and cash equivalents 12 020 25 25
at beginning of year
Cash and cash equivalents 28 381 14 568 12 020
at end of year
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Share Accumulated
(Fiures in R`000) capital premium loss
Balance at 1 Sep 2005 307 5 866 (6 633)
Net loss for the year - - (3 339)
Issue of share capital 1 230 24 086 -
Revaluation of intangible assets - - -
Balance at 1 Sep 2006 1 537 29 952 (9 972)
Net loss for the year - - (1 706)
Issue of share capital 334 23 138 -
Balance at 1 Sep 2007 1 871 53 090 (11 753)
Net loss for the period - - (3 519)
Issue of share capital 280 20 440 -
Balance at 29 Feb 2008 2 151 73 530 (15 272)
Revaluation
(Fiures in R`000) reserve Total
Balance at 1 Sep 2005 - (460)
Net loss for the year - (3 339)
Issue of share capital - 25 316
Revaluation of intangible assets 284 522 284 522
Balance at 1 Sep 2006 284 522 306 039
Net loss for the year - (1 706)
Issue of share capital - 23 472
Balance at 1 Sep 2007 284 522 327 733
Net loss for the period - -
Issue of share capital - -
Balance at 29 Feb 2008 284 522 344 931
COMMENTARY
1. Operational Review
During the six months under review Miranda has continued to establish itself as
a new generation exploration group, adding to its significant portfolio of
mineral assets and communicating its business model to the market.
The group has followed a strategic direction that has positioned Miranda as a
significant coal player in KwaZulu-Natal ("KZN"). As a result, Miranda has been
granted prospecting permits over substantial coal and anthracite resources in
the Glencoe/ Dannhauser area. Until recently this area had been largely
neglected by the larger coal operators. The group is continuing to identify
potentially economically viable coal resources in the area and to apply for the
necessary permits to the Department of Mineral and Energy ("DME") to explore
these prospects further. Management is confident it has achieved a significant
"first mover" advantage in KZN and will be able to progress these projects
rapidly up the value curve.
1.1 Coal Division
To date the group has been granted six prospecting permits in KZN covering an
area of 18 520 hectares. Analysis of the historical borehole data by PC Meyer, a
SAMREC-registered Competent Person, has shown estimated in-situ resources of
approximately 120 million tons (for further details see the relevant SENS
announcements). The quality of the coal ranges from Anthracitic to Bitumous coal
with excellent coking properties. The majority of the farms held under these
prospecting permits are contiguous and Miranda has commenced with a detailed
drilling program to prove up the resources to that of a measured resource and to
confirm the quality and distribution of the coal.
Sesikhona Kliprand Colliery
The first phase drilling program on this project has been completed, resulting
in a measured resource of 5.3 million tons of high grade anthracite. Management
is confident that further drilling will prove the resource up to an estimated 22
million tons. Based on these results, an application has been made to, and has
been accepted by, the DME to convert the prospecting permit to a mining permit.
The company is currently completing the environmental impact assessment and mine
plan, which is expected to be submitted for approval to the DME during the
second quarter of this calendar year.
1.2 Diamond Division
Northwest alluvial project
Prospecting activities have continued during the period yielding promising
results. A total of 106.43 carats have been recovered with an average grade of
3.2 carats per hundred tons. The value of the diamonds recovered has ranged from
USD180 to USD587 per carat. The company is currently conducting geophysical
testing of the area to determine possible potholes and paeleo channels.
Mochudi project (Botswana)
The group has been granted a further two prospecting licenses, adjacent to the
existing Mochudi prospect, that cover a total area of 1022.9 km2. The prospects
were extensively explored by De Beers in the late 1960`s and as recently as
2000. A number of potential Kimberlite anomalies were identified, but at the
time these did not meet De Beers` development criteria. It is the group`s
intention to focus on these anomalies to determine the diamondiferous potential
of these targets.
1.3 Precious Metals Division
Geophysical testing on the group`s Syferbult-Boons gold project has recently
been completed and a number of targets warranting further investigation have
been identified. Management is currently reviewing the data and plans to begin
with a detailed drilling program during the second quarter of this year.
1.4 Base and industrial minerals division
Rozynenbosch base metal project
The group has completed a thorough analysis of all of the existing geological
information in its possession and is now planning to undertake additional work,
which will include a limited drilling program to confirm existing results. As
part of this next phase Miranda plans to conduct a scoping study in the next
quarter whilst metallurgical consultants have already been appointed in this
regard.
West Rand clay project
An agreement in principal has been reached with a large JSE-listed brick
producer to enter into a joint venture once a mining right has been granted by
the DME. In terms of this agreement the group will earn a "JV fee" of R25 per
thousand bricks produced. Once full scale production begins it is anticipated
that between 8-10 million bricks will be produced per month.
2. Financial Review
2.1 Financial results
On 29 February 2008 the net asset value and net tangible asset value of the
company amounted to R345 million and R28 million respectively (2007: R328
million and R12 million). This was equivalent to 160.3 cents per share ("cps")
and 13.0 cps (2007: 175.4 cps and 6.5 cps).
Total income including interest received, amounted to R1.08 million (2007: R
nil). Operating expenses and interest paid amounted to R4.60 million (2007:
R1.34 million). The resultant net loss for the period was R3.52 million (2007:
R1.34 million).
The increase in operating expenses is reflective of the group`s stepped-up
exploration activities. The group has incurred material expenditure in the
period as a direct result of its ongoing exploration program, the preparation of
the mining right application for Sesikhona and the capital raising fees.
2.2 Private placing
In line with its strategy of "just-in-time" capital raising, the group
successfully completed its second capital raising exercise during the period
under review. The private placing was 2.7 times over-subscribed. R20.72 million
was raised through the issue of 28 million shares at a price of 74 cps. The
shares were issued under the board`s general authority and the proceeds of the
private placing will enable the company to complete its exploration objectives
on the coal projects discussed above.
Prior to the first capital raising, completed in February 2007, the group`s
activities had been funded by a number of the major shareholders from their
personal resources. These loans totaling approximately R1 million will be repaid
by the group during the course of the next six months.
2.3 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 company`s 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. The price of silver has
increased substantially from USD7.6 per ounce to the current level of USD17.9
per ounce. Lead, which constitutes a significant proportion of the in-situ
resource, has also increased significantly. Given these changes, the value of
the project in Rand terms has increased to in excess of R600 million (Feb 2007:
R284 million). Consistent with the approach taken in the 2007 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 exploration results and expenditure on certain
key assets to date. The success of the private placing and the potential revenue
that will be generated from current and future JV partnerships has placed the
group in a position to focus on fast tracking the development of certain coal
projects within its fledgling coal business, Miranda coal, and Miranda diamonds,
which houses the company`s diamond interests, including the highly prospective
Botswana diamond projects. Miranda is further developing its emerging gold
business, Miranda Gold, which will form the basis of a three pronged thrust into
mine development.
The impact of this strategy is expected to yield positive results in the next 12
to 18 months. The remainder of the asset base is undergoing a strategic review
with the company`s advisors to further streamline the focus of the executive
team. Announcements will follow in due course.
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
planned for the KZN coal prospects. 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
IAS34 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 29 February 2008. 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 IFRS6 and its interpretation adopted by the
International Accounting Standards Board.
6. Dividends
No dividends were recommended or declared for the financial year under review
(2007: nil).
For and on behalf of the Board
AR Thompson RJ Nel 31 March 2008
Chairman Chief Executive Officer Pretoria
Transfer secretaries
Computershare Investor Services
Sponsor
Sasfin Capital
Corporate adviser
Qinisele Resources
Date: 31/03/2008 10:15:01 Produced by the JSE SENS Department.
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