| Mon 2 Jun 2008, 14:38 | | KCM - KCM - Reviewed provisional report for the eleven months ended 29 February |
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KCM
KCM
KCM - KCM - Reviewed provisional report for the eleven months ended 29 February
2008
Kimberley Consolidated Mining Limited
(Incorporated in the Republic of South Africa)
(Registration number 2007/010470/06)
JSE share code: KCM
ISIN Number: ZAE0000119996
("KCM" or "the Company" or "the Group")
Reviewed provisional report for the eleven months ended 29 February 2008
Consolidated Group balance sheet
As at 29
February
2008
Reviewed
R`000
ASSETS
Non-current assets 183,095
Property, plant and equipment 68,014
Goodwill 29,840
Intangible assets 72,709
Other financial assets 2,488
Deferred tax 10,044
Current assets 5,761
Inventories 1,011
Loans to directors, managers and 187
employees
Trade and other receivables 3,814
Cash and cash equivalents 749
TOTAL ASSETS 188,856
EQUITY AND LIABILITIES
Equity and reserves 156,351
Non-Current liabilities 11,939
Current liabilities 20,566
TOTAL EQUITY AND LIABILITIES 188,856
Consolidated Group income statements
Eleven Eleven
months months
ended 29 ended 29
February February
2008 2008
Reviewed Estimate
R`000 R`000
Turnover 40,349 49,783
Other income 2,776 -
Operating costs (54,703) (68,917)
Loss from operations (11,578) (19,134)
Net finance costs (261) (222)
Loss before taxation (11,839) (19,356)
Taxation (4,429) 704
Loss after taxation (16,268) (18,652)
Cents Cents
Loss per share (4.29) (5.59)
Headline loss per share (4.29) (5.59)
Headline earnings per share before 0.59 0.16
IFRS adjustments
Below is a reconciliation of the reviewed and the estimated headline
earnings to the reviewed and estimated headline earnings before IFRS
adjustments.
Eleven Eleven
months months
ended 29 ended 29
February February
2008 2008
Reviewed Estimate
R`000 R`000
Net loss for the year (16,268) (18,652)
Add back
IFRS 3 amortisation of mining rights 1,812 2,506
Tax effect of amortisation (704) (704)
IFRS 2 payments to suppliers in lieu
of cash 17,386 17,386
Net profit (excluding IFRS
adjustments) 2,226 536
Consolidated Group statement of changes in equity
Ordinary Share Accumulat- Total
share premium ed profit
capital
R`000 R`000 R`000 R`000
4 172,961 -
Balance at 1 April 2007 172,965
Net loss for the year (16,268) (16,268)
Balance at 29 February 4 172,961 (16,268) 156,697
2008
Consolidated Group cash flow statement
As at 29
February
2008
Reviewed
R`000
Net cash flows from operating activities (8,889)
Net cash flows from investing activities (174,076)
Net cash flows from financing activities 183,714
Net increase/(decrease) in cash and cash 749
equivalents
COMMENTARY
1 Introduction
Set out above are the maiden reviewed financial results of KCM as a
listed company in respect of the eleven months ended 29 February 2008.
2 Basis of preparation
The reviewed results for the year ended 29 February 2008 have been prepared
in accordance with International Financial Reporting Standards and accounting
policies adopted by KCM on incorporation.
The Group`s financial results for the year ended 29 February 2008 include
those of the Company, together with all its subsidiaries and associate from
their respective dates of acquisition.
The provisional results for the year ended 29 February 2008 have been reviewed
by Moore Stephens and their unmodified review opinion is open for inspection
at the Company`s registered office.
3 Nature of the business
KCM is a diamond mining, exploration and development company with kimberlite
and alluvial diamond projects located primarily in the Kimberley and
surrounding regions of South Africa. The Group was established in 2007,
through the acquisition by KCM of the entire issued ordinary share capital of
each of Kimberley Consolidated Mining and Exploration (Proprietary) Limited
("KCME") and Channal Mining (Proprietary) Limited ("Channal")("the merger"),
two privately owned diamond exploration companies holding various prospecting
rights in the Northern Cape and North West Provinces of South Africa, both
directly and in terms of joint venture agreements, as follows:
- KCME is the holder of a new order prospecting right over the Carter Block
area in the Northern Cape Province; and
- Channal has entered into joint venture agreements ("the original joint
venture agreements") with each of Taung Giant Diamond Miners (Proprietary)
Limited, Teehmaneh Trading and Investments (Proprietary) Limited and
Batloung Mining Services CC which are companies representing certain
communities in the Taung and Barkly West regions ("the community
companies"), in respect of three new order prospecting rights in these
areas. In terms of the original joint venture agreements, Channal will
provide services to the community companies in respect of the prospecting
rights, and in terms of subsequent new joint venture agreements entered
into with the same parties, KCM will ultimately hold an effective 70%
interest in each of these rights, subject to the consent of the Department
of Minerals and Energy in terms of section 11 of the Minerals and Petroleum
Resources Development Act 28 of 2002, as amended. The original
joint venture agreements remain in place until such time as the new joint
venture agreements become unconditional.
Following the merger, KCM acquired 100% of the issued share capital in
Bo-Karoo Diamond Mining (Proprietary) Limited ("Bo-Karoo"), which is the
owner of the operating alluvial Bo-Karoo mine located on the middle Orange
River, and the mining and prospecting assets owned by Graven Mining CC, the
mining contractor at Bo-Karoo, including a cession of the rights of Graven to
conduct the prospecting and mining operations at the Bo-Karoo mine.
The Group, comprising Bo-Karoo, KCME and Channal, has the resources and
expertise to realise the maximum benefit and economic potential of projects
ranging from early stage exploration to operational mining and has, as a
result, established a diversified portfolio of diamond assets at various
stages of their life cycles.
4 Financial overview
The effective date of the Channal acquisition is considered to be
1 September 2007 for accounting purposes. This resulted in a difference
between the reviewed turnover in comparison to the estimated amount as the
income relating to Channal for the period April to August 2007 was included
in the estimate but was excluded from the reviewed results.
Exploration expenses were not capitalised in the estimated results. For
purposes of the reviewed results, where technical feasibility has not been
proven in accordance with International Financial Reporting Standard 6,
certain exploration expenses have accordingly been capitalised.
There was a difference in the treatment of deferred taxation between the
reviewed and the estimated results. This difference related to depreciation.
For taxation purposes mining assets are written off in full in the year they
are acquired versus the normal accounting treatment in terms of which assets
are depreciated over their useful lives. The forecast treated depreciation
over the useful lives of the assets.
5 Capital commitments
Included in Current liabilities are amounts due for Plant and Machinery
acquired. More than R 9 million of these liabilities have been settled
subsequent to the year-end. The majority of Capital comprise finance lease
liabilities in respect of Equipment and Motor Vehicles. These liabilities
are secured by a first right over the respective assets.
6 Prospects
The company is currently ahead on its turnover target due to good recoveries
in the first two months of the 2009 financial year. The due diligence on a
joint venture with the Trans Hex Group on Carters Block is in an advanced
stage and the final result is expected to be announced soon. The prospecting
licence for the adjacent area to the Bo Karoo operation on the farm Rietsdrift,
measuring approximately 3,400 hectares, was granted on 29 May 2008. This adds
a significant project to the company in the prime area on the Orange River.
Projects to expand into other African countries are at an advanced stage. The
management is confident that the forecast for the financial year ahead will
be achieved.
By order of the board
Hein le Riche Koos Pieterse
CEO FD
CORPORATE INFORMATION
Executive directors: HP le Riche, JJ Pieterse, POR Sehunelo, DJS van Tonder
and JJ Cilliers
Non-executive directors: RJ Rakgoale, AS Rodionov and TD Pikwane
Registration number: 2007/010470/06
Registered address: Unit 240B, 2nd Floor, The Colosseum, Century City
Postal address: Suite 04, Private Bag X4, Century City, 7446
Company Secretary: JJ Pieterse
Transfer Secretaries: Computershare Investor Services (Proprietary) Limited
Auditors: Moore Stephens BKV Inc.
Designated Advisor: QuestCo Sponsors (Proprietary) Limited
Date: 02/06/2008 14:38:00 Produced by the JSE SENS Department.
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