| Mon 14 Apr 2008, 8:30 | | BCD - BRC Diamondcore Ltd - Abridged annual result |
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BCD
BCD
BCD - BRC Diamondcore Ltd - Abridged annual results for the year ended 31
December 2007
BRC DIAMONDCORE LTD.
(Incorporated in Canada)
(Corporation number 627115-4)
Share code: BCD & ISIN Number: CA05565C1095
("BRC DiamondCore" or "the Company")
Abridged annual results for the year ended 31 December 2007
FINANCIAL RESULTS
CONSOLIDATED BALANCE SHEETS
Audited Audited
year year
ended ended
December 31 December 31
2007 2006
C$ `000 C$ `000
ASSETS
Current assets 1 335 385
Cash 932 373
Prepaid expenses and other assets 403 2
Due from related parties - 10
Non-current assets 16 982 7 713
Investment - 92
Deferred transaction costs 2 200 -
Mineral properties and deferred exploration
costs 14 189 7 460
Capital assets 593 161
Total assets 18 317 8 098
EQUITY AND LIABILITIES
Total equity 12 695 7 821
Capital stock 15 827 10 212
Warrants - 112
Contributed surplus 2 757 1 553
Deficit (5 889) (4 056)
Accumulated other comprehensive income - -
Current liabilities 5 622 277
Accounts payable and accrued liabilities 2 599 277
Debt 3 023 -
Total equity and liabilities 18 317 8 098
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
Audited Audited
year year
ended ended
December 31 December 31
2007 2006
C$ `000 C$ `000
Operating expenses (1 778) (1 034)
Write down of mineral properties (16) (414)
Loss on sale of investment (16) -
Operating loss (1 810) (1 448)
Interest expense (23) -
Net loss before taxation (1 833) (1 448)
Taxation - -
Net loss for the year (1 833) (1 448)
Number of shares in issue (`000) 13 652 12 424
Weighted average number of shares in issue (`000) 13 244 12 019
Loss per share (cents) (0.14) (0.12)
Diluted loss per share (cents) (0.14) (0.12)
CONSOLIDATED CASH FLOW STATEMENTS
Cash flow from operations (1 581) (362)
Net change in non-cash working capital items 1 954 (67)
Cash flow from investment activities (8 257) (5 067)
Cash flow from financing activities 8 443 5 792
Increase in cash 559 296
Cash at beginning of period 373 77
Cash at end of period 932 373
COMMENTARY
GENERAL
All dollar amounts in this document are expressed in Canadian dollars unless
otherwise specified.
BRC DiamondCore (formerly BRC Diamond Corporation), is a Canadian based diamond
exploration company with extensive assets in the Democratic Republic of Congo
(the "DRC").
In July 2007, the Company announced that it had entered into an agreement with
Diamond Core Resources Limited (Diamond Core) to combine the two companies by
way of a court-sanctioned scheme of arrangement under the provisions of Section
311 of the Companies Act, 1973 (South Africa), pursuant to which the Company
would acquire all of the outstanding shares of Diamond Core in exchange for the
issuance by the Company of common shares.
On February 11, 2008, the Company completed the acquisition of all of the
outstanding shares of Diamond Core, thereby effecting the merger of the
Company`s business with Diamond Core`s business. Diamond Core is a South
African based diamond exploration company with extensive assets in known
diamond producing regions of South Africa.
As at December 31, 2007, the Company had deferred transaction costs of
$2 200 165 in relation to the acquisition of Diamond Core. Such deferred
transaction costs will be included as part of the purchase price equation
and are currently recorded as an asset under deferred transaction costs in
the Company`s consolidated balance sheet.
This document should be read in conjunction with the audited consolidated
financial statements of the Company as at and for the year ended December 31
2007 and the related Management`s Discussion and Analysis, both of which have
been filed on SEDAR at www.sedar.com. Additional information relating to the
Company is also available on SEDAR.
OPERATIONAL REVIEW
During 2007, the Company`s diamond exploration programmes continued at its
Kwango River, Tshikapa, Candore and Lubao projects. The Company also commenced
field exploration at the Zongo and Businga projects in northern DRC.
The Company conducted the following activities in respect of its kimberlite
exploration programmes:
565 reconnaissance stream samples covering 7 622 kmSquared;
540 follow-up samples over various heavy mineral anomalies;
29 196 line kilometers of regional airborne magnetic covering 5 068 kmSquared;
3 235 line kilometers high-resolution follow-up helicopter-borne magnetic
data over 90 blocks; and
at this stage, selected 83 targets for drilling
The alluvial exploration programmes included 104 holes drilled to a cumulative
depth of 2 283 m and 608 holes dug to a cumulative depth of 5 008 m. The
cumulative gravel volume is estimated by the Company to be around 12 million
tons.
Ground holdings were increased substantially around the Tshikapa project and in
the northern DRC. Option agreements were signed for 68 prospecting permits
("PR") covering 22 109.5 kmSquared. The Company`s Congolese subsidiary added a
further 12 PR`s, covering an area of 3 930 kmSquared.
At the end of 2007, the DRC Mining Registry Office was notified of the
Company`s intention to relinquish 16 complete PR`s and a portion of several
others. This relinquishment will result in the ground holding being reduced
from 38 890 kmSquared to 27 404 kmSquared. The total number of PRs to which the
Company has
access (either owned or through option agreements) will be reduced to 99.
Dr. Michiel C.J de Wit, the Company`s President, is the "qualified person" (as
such term is defined in Canadian National Instrument 43-101) responsible for
the technical information in this "Operational Review" section.
Additional information with respect to the Company`s DRC projects is contained
in the technical report prepared by Venmyn Rand (Pty) Limited, dated July 31,
2007 and entitled "National Instrument 43-101 Technical Report on the Kwango,
Lubao and Tshikapa Projects of BRC Diamond Corporation in the Democratic
Republic of Congo". A copy of this report can be obtained from SEDAR at
www.sedar.com.
FINANCIAL REVIEW
Audit and annual report
The results of the Company as set out above have been audited by Deloitte &
Touche LLP, Chartered Accountants, Licensed Public Accountants. Their
unqualified audit report on the annual financial statements is available for
inspection at the registered office of the Company, as well as on SEDAR at
www.sedar.com.
Statement of compliance
The financial statements have been prepared in accordance with Canadian
generally accepted accounting principles.
Basis of preparation
The financial statements are prepared in accordance with Canadian generally
accepted accounting principles. The financial statements incorporate principal
accounting policies that are consistent with the prior year. Effective January
1, 2007 the Company adopted retrospectively without adjustment a number of new
standards issued by the Canadian Institute of Chartered Accountants. Adoption
of the new standards did not have a material effect on the financial statements
of the Company.
Commentary
The loss for 2007 amounted to $1 832 891 or 14 cents per share compared with
$1 448 359, or 12 cents per share for 2006.
The main contributing factor that gave rise to the change in performance is the
increase in expenses (including professional fees) related to the transaction
with Diamond Core.
The Company incurred cash exploration costs of $5 564 310 (2006: $5 034 286)
which have been capitalized to mineral properties. Mineral properties, which
include deferred exploration expenditures, increased by $6 729 097 (2006:
$4 707 119).
BRC DiamondCore is an exploration company and does not generate operating
revenue at present.
At December 31, 2007, the Company had cash of $931 845 (2006: $373 093) and a
working capital deficit of $4 287 694 (2006: working capital of $108 269).
In March 2007 the Company received $5 000 000 from a private placement of
1 000 000 common shares at a price of $5.00 per share, which have been used
primarily to fund the exploration activities in the DRC. A further $399,000
was received from the exercise of 114 000 broker warrants and $73 560 from the
exercise of stock options.
During the fourth quarter of 2007, the Company obtained a $3 000 000 credit
line from a Canadian financial institution, of which $3 000 000 was utilized as
at December 31, 2007. Subsequent to the year end, the loan facility was
increased from $3 000 000 to $6 000 000. The loan facility is guaranteed by
Banro Corporation, a significant shareholder of the Company. The Company has
agreed with Banro Corporation to pay all amounts outstanding under the loan
facility and to terminate the loan facility by July 28, 2008. Management
expects the loan facility to fund the Company`s exploration activities until
the second quarter of 2008. The Company will need to raise additional capital
in 2008 to fund its exploration programmes for 2008 and to repay the loan
facility.
LITIGATION
There are currently no legal or arbitration proceedings against the Company or
its subsidiaries (including any proceedings which are pending or threatened) of
which the Company is aware which may have, or have had in the 12 months
preceding the date of this report, a material effect on the consolidated
position of the Company.
OUTLOOK
The Company has relied primarily on equity financings to fund its activities.
Although the Company has been successful in completing equity financings in the
past, there is no assurance that the Company will secure the necessary
financings in the future.
All of the Company`s DRC properties are in the exploration stage and none of
these bodies contain a known body of commercial ore. The Company currently
operates at a loss and does not generate any revenue from its DRC operations.
The anticipated benefits of the Diamond Core acquisition will depend in part on
whether Diamond Core`s operations can be integrated into the Company`s
operations in an efficient and effective manner.
For and on behalf of the Board:
AT Kondrat MCJ de Wit
Director Director
14 April 2008
Directors: SFW Village (UK)*, T Botoulas, CI Campbell, MCJ de Wit (Dutch),
GG Farr*(Cdn), GD Hunter*, AT Kondrat (Cdn) *, SC Thomson (UK) * (* non-
executive)
Company secretary: GG Farr
Registered address: 1 First Canadian Place, 100 King Street West, Suite 7070,
Toronto, Ontario, M5X 1E3, Canada
Canadian Transfer agent: Equity Transfer & Trust Company, Suite 400, 200
University Avenue, Toronto, Ontario, M5H 4H1, Canada
Transfer secretaries in South Africa: Computershare Investor Services
Limited, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051,
Marshalltown, 2107)
Sponsor: River Group
Website: www.brc-diamondcore.com
Date: 14/04/2008 08:30:01 Produced by the JSE SENS Department.
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