| Tue 1 Apr 2008, 15:14 | | SAM - Samroc - Reviewed Interim Group Results For The Six Months |
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SAM
SAM
SAM - Samroc - Reviewed Interim Group Results For The Six Months
Ended 31 December 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 INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
BALANCE SHEET
(`000)
Reviewed Reviewed Audited
31 December 31 December 30 June 2007
2007 2006
ASSETS
Non-current
assets
- Property, 10,487 10,937 10,539
plant and
equipment
Current assets 18,949 3,387 3,235
- Inventory 787 388 472
- Trade 6,407 2,724 2,599
receivables
- Loans 0 31 0
receivable
- Cash and cash 11,755 275 165
equivalents
Total assets 29,436 14,324 13,775
EQUITY AND
LIABILITIES
Capital and 23,470 1,245 1,112
reserves
- Share capital 3,965 3,743 3,743
- Share premium 49,113 27,152 27,152
- Accumulated (29,608) (29,650) (29,783)
loss
Non-current 526 10,305 10,304
liabilities
- Long-term 0 9,779 9,778
liabilities
- Provision for 526 526 526
environmental
rehabilitation
Current 5,440 2,774 2,358
liabilities
- Trade and 5,252 2,774 2,182
other payables
- Provisions 188 180 176
- Current 0 - 0
portion of long-
term liabilities
Total equity and 29,436 14,324 13,775
liabilities
INCOME STATEMENT
(`000)
Reviewed Reviewed Audited
31 31 30 June
December December 2007
2007 2006
Revenue 8,574 6,997 15,390
Costs and expenses (8,400) (7,068) (15,591)
Profit / (loss) from 175 (71) (201)
operating activities
Net finance cost (1) (641) (644)
Impairment loss 0 - 0
Profit / (loss) for the 174 (712) (845)
period
CASH FLOW STATEMENT
(`000)
Reviewed Reviewed Audited
31 31 30 June
December December 2007
2007 2006
Net cash flow from 542 (542) (684)
operating activities
Net cash flow from 344 52 52
investing activities
Net cash flow from 10,705 600 631
financing activities
Net increase / (decrease) 11,591 109 (1)
in cash and cash
equivalents
Cash and cash equivalents 165 166 166
at beginning of period
Cash and cash equivalents 11,755 275 165
at end of period
Ordinary shares in issue 272,427 374,275 374,275
at end of period (`000)
Weighted average number of 37,427 374,275 374,275
shares in issue
Net asset value per share 8.73 0.33 3.36
(cents)
Net profit / (loss) per 0.05 (0.19) (0.44)
share (cents)
Headline profit / (loss) 0.05 (0.19) (0.44)
per share (cents)
CHANGES IN EQUITY
(`000)
Share Share Accumulated Total
capital premium profit /
(deficit)
Balance at 31 December 3,743 27,152 (25,472) 5,423
2006
Net profit for the (4,311) (4,311)
period January 2007 to
June 2007
Balance as at 30 June 3,743 27,152 (29,783) 1,112
2007
Conversion of loan to 98 9,681 9,779
equity
Capital raising 125 12,280 12,705
Net profit for the 174 174
period July 2006 to 31
December 2007
Balance at 31 December 3,965 49,113 (29,609) 23,770
2007
COMMENTARY
There have been significant changes to Samroc since the end of the period
under review: The company underwent a capital restructure and a change of
control. It announced the acquisition of significant oil exploration assets,
and further announced that it intended distributing shares in its subsidiary
Bushveld Pioneer (Pty) Limited ("Bushveld Pioneer"), together with the
Greenhills Manganese Sulphate plant ("Greenhills") to Samroc shareholders by
way of a dividend in specie, following which Bushveld Pioneer would acquire
further exploration assets and apply for a separate listing on the JSE
Limited.
Greenhills had to overcome the effects of a fire in July 2007, but traded
satisfactorily under the circumstances and managed to record a small profit
for the period. The plant is showing the potential to become an exporter in
addition to dominating the local market with its product. It will, however,
require some expenditure on capital expansion and replacement.
The directors of Samroc are committed to a bold process of creating value for
shareholders by entering and exploiting the areas of the commodity cycle that
are presenting outstanding value propositions, both at the present time and
for the longer term. The board is pleased to announce that Mr Robin Vela was
appointed a director on 29 January 2008 to help drive the new process.
GREENHILLS
The fire referred to above impacted sales significantly, although management
did well to resume limited production within two weeks after the event. The
plant was insured and payment of the insurance amount has been received,
permitting full restoration of the plant.
Production for the period amounted to 1 766 tonnes (12 months to 30 June
2007: 2 180 tonnes) of manganese sulphate powder and 276 tonnes of manganese
oxide (12 months to 30 June 2007: 238 tonnes). A small export order of 20
tonnes was processed and despatched to Portugal during the period. During
January 2008, a further export order was received for 150 tonnes, and it is
anticipated that with the weaker Rand, the company should be able to resume
exports to Europe, enabling it to increase production to full capacity in due
course.
A measure of maintenance and replacement capex will be necessary for the
plant during the current financial year, and further capex is planned to
reduce bottlenecks in production and enable the plant to improve output and
lower costs, particularly if it is to resume exports. The quantum of
expenditure has not yet been determined, but is not significant and will be
provided for as soon as it has been properly evaluated.
FINANCIAL
Turnover of R8.574 million is 23% ahead of that of the prior comparative
period, and enabled the plant to realise a small profit of R174 000 versus a
loss of R712 000 for the prior period, despite the adverse impact of the
fire.
Regrettably, management at the plant made a series of unauthorised loans to
third parties, which process continued during the period to March 2008. The
appropriate financial controls have been instituted and disciplinary steps
are being taken. The directors are satisfied that no financial loss will
occur because the amount involved has been fully underwritten by a third
party.
PROSPECTS FOR GREENHILLS
Subject to the Rand not strengthening, export orders have once again become
viable, and the plant is expected to be profitable for the balance of the
financial year.
If, as is planned, it is included in the distribution in specie of Bushveld
Pioneer, it is expected that the new board of Bushveld Pioneer will evaluate
the future options for the plant, which could include a process of expanded
capacity, the acquisition of related businesses, or the sale of the plant.
CAPITAL RESTRUCTURE AND CHANGE OF CONTROL
In terms of the circular to shareholders posted on 8 November 2008, the
following became effective at the end of the financial year:
The existing shares in the company were consolidated on a 1-for-10 basis,
converted into no par value shares, and the authorised share capital was
increased to 10 billion no par value shares;
A total of 235 million new ordinary shares (post consolidation) were issued
for cash at 10 cents per share, raising R23.5 million before costs, and
enabling the company to settle its long term liabilities; and
Encha Group Limited ("Encha"), a company controlled by the Moseneke family,
became the new controlling shareholder of Samroc.
FURTHER TRANSACTIONS POST 31 DECEMBER 2007
On 6 March 2008 it was announced that Samroc had issued 40 864 120 new
ordinary shares for cash at 75 cents per share to raise approximately R30.65
million before expenses.
On 26 March 2008 it was announced that Samroc had, subject to certain
conditions precedent, agreed to acquire the entire issued share capital of
South Africa Congo Oil Company (Pty) Limited which will, on acquisition, be
the holder of oil interests situated in the Albertine Graben area of the
Democratic Republic of the Congo. The cost of the acquisition is
approximately R516.9 million, to be settled by the payment of USD5.318
million and the issue of 451 360 000 Samroc shares. The suspensive conditions
include Samroc shareholder approval in general meeting. A circular and notice
of general meeting is in the course of preparation, and will be posted to
shareholders once approved.
The 26 March announcement included a cautionary announcement relating to the
proposed acquisition of other mineral exploration assets by Bushveld Pioneer.
It is expected that an announcement in this respect will be released shortly.
GOING CONCERN
The directors are of the opinion that the company remains a going concern.
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 an unmodified review opinion.
Their review opinion letter 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
31 March 2008
Directors: RJ Linnell (Chairman), SR Rowse (Executive), BH Christie*, RT
Vela* (appointed 29 January 2008) (*British)
SJ Farrell (Australian) resigned on 29 January 2008
Registered office: 7 West Street, Houghton
Registered postal address: PO Box 7798, Centurion 0046
Transfer secretaries: Linked Market Services SA (Pty) Ltd, PO Box 4844,
Johannesburg 2000
Company Secretary: Melinda van den Berg - Fusion Corporate Secretarial
Services (Pty) Ltd
Date: 01/04/2008 15:14:01 Produced by the JSE SENS Department.
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