| Wed 25 Jun 2008, 8:14 | | KWR - Kiwara Plc - Preliminary Results for the year ending 31 March 2008 |
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KWR
KWR
KWR - Kiwara Plc - Preliminary Results for the year ending 31 March 2008
Kiwara plc
Share codes: JSE - KWR
AIM - KIW
ISIN - GB0007702953
(`Kiwara" or the "Company`
Preliminary Results
for the year ending 31 March 2008
The Board of Kiwara, the Zambian based mining exploration and development
company, is pleased to announce preliminary results for the year ending 31
March 2008.
Highlights
* Kiwara has focused its exploration activities at Kalumbila
* Kiwara`s interest in Kalumbila increased from 55% to 75% by the exchange
of 15,000,000 Kiwara ordinary shares of 1p each and a consideration of
US$150,000.
* Initial targets identified from historic work. At Kalumbila, nickel
confirmed as deep-seated. Focus on copper with significant intersections
including a 96m run at 1.02% in drill hole L27.
* Early results suggest potential for near surface, bulk mining target.
* Initial drilling at Kawanga intersected Uranium including a 1.0 m section
with a U3o8 grade of 0.87% in drill hole WR8 from 105m and 0.51% in drill
hole WR11 from 123m.
* An aggressive drilling programme continues with the objective of defining
a resource statement
* Kiwara gains interest for Iron Ore rights in the Prospecting License 267
("PL 267") licence area
CEO Peter Vivian-Neal commented: "The Board believes that the results of
continued exploration of the copper mineralisation within Kalumbila, which
together with the presence of Nickel and Cobalt that make valuable secondary
targets, will continue to add significant shareholder value over the coming
year."
For further information, please contact:
Kiwara Plc Tel: +44 (0)207 581 4477
Colin Bird, Chairman
Peter Vivian-Neal, Chief Executive Officer Tel: +260 (0) 211 293899
Investec Bank, Johannesburg
Robert Smith Tel: +27 (0) 11 286 7326
Investec Bank (UK) Limited Tel: +44 (0) 20 7597 5000
Gerard Kisbey-Green / Jan Bosch
Bishopsgate Communications Ltd Tel: +44 (0)20 7562 3366
Nick Rome
Financial Review
The loss for the year after taxation was GBP86,698 (2007: GBP71,742) equivalent
to 0.08 pence (2007 - 0.28 pence) per share. Included in this figure is a
credit of GBP522,309 which resulted from the deemed disposal of a 25% stake in
Kiwara (Zambia) Ltd ("Kiwara Zambia") to the New Africa Mining Fund ("NAMF")
which diluted the Group`s interest in the Zambian subsidiary from a fully owned
subsidiary to a seventy five percent owned subsidiary. The NAMF interest in
Kiwara Zambia is convertible into Kiwara shares between the first and third
anniversary from the date of the NAMF investment. Following exercise of this
option, Kiwara`s ownership in Kiwara Zambia will revert to one hundred percent.
The operating loss for the year amounted to GBP801,165 and includes overheads
and corporate costs of the business as well as one-off professional fees
amounting to GBP168,902 attributable to the Company`s reverse takeover by
Kiwara Resources Ltd in August 2007 and a share-based charge of GBP200,886 in
line with the requirements of IFRS2. The share-based charge relates to share
options expensed in the year and has been concurrently credited in reserves
resulting in a nil net effect to the net assets of the group.
Exploration and evaluation expenses capitalised in the year amounted to
GBP709,359. These costs primarily relate to the Company`s advancing
exploration activities at its Kabompo dome project based in north western
Zambia. The ongoing work programme is exploiting advanced technological
exploration tools such as ground geophysical surveys, geochem surveys and both
reverse circulation and core drilling to significantly increase the geological
understanding of the licensed area. The Company anticipates reporting a
resource estimate for the Kalumbila deposit in the forthcoming year.
During the year, 15,550,000 ordinary shares of 1p each were issued raising
GBP1,910,000 to fund ongoing drilling and exploration expenses and a further
97,000,000 million ordinary shares of 1p each were issued in August 2007 as
consideration for the acquisition of Kiwara Resources Limited. 15,000,000
ordinary shares of 1p each were issued in October 2007, which along with a
payment of US$150,000 increased Kiwara`s ownership in its joint venture
subsidiary, Kalumbila Minerals Ltd, from 55% to 75%. The total number of
ordinary shares of 1p each outstanding at 31 March 2008 was 160,485,010.
On 3 April 2008, Kiwara`s shares were admitted for trading on the main board of
JSE Limited. This decision to dual list the Company`s shares was predicated by
ongoing positive exploration results which continue to support the assertion
that Kalumbila has the potential to host a near surface bulk mining target and
the Company`s recognition that South African investors should be given the
opportunity to invest in the Company`s evolving base metal and Uranium
projects.
Operations Review
In its first reporting year, Kiwara`s exploration operations have taken place
within Prospecting Licence 267 ("PL267") in North West Province, Zambia. The
interest in this licence was acquired through the Company`s joint venture with
LM Engineering Ltd, a Zambian Company which previously held the licence. During
the reporting period, Kiwara has assessed the prospectivity of the Licence area
and focused on two specific targets - base metals at Kalumbila and uranium at
Kawanga. Exploration, including drilling has taken place on both targets and
in both cases, historic findings confirmed. On the basis of current results,
the intention is to establish a resource statement at Kalumbila during the
forthcoming year. These activities continue to add shareholder value and the
results achieved so far support the board`s confidence that Kalumbila
represents a significant base metals target.
The Joint Venture: Kiwara is the beneficiary of the November 2006 joint venture
with LM Engineering Ltd of Zambia. The resulting joint venture company,
Kalumbila Minerals Ltd (Kalumbila Minerals") was initially held 55% by Kiwara
Resources (Zambia) Ltd and 45% by LM Engineering; Kiwara provides management
and the funding. Kiwara is required to spend US$2.2 million on exploration
over three years (from November 2006) and to continue funding to the completion
of a feasibility study. Thereafter further funding, including feasibility
studies on other targets will be provided pro-rata to the shareholding.
Following the expenditure of US$2.2 million Kiwara will earn an additional 5%
of Kalumbila Minerals. During the reporting period Kiwara acquired 20% of
Kalumbila Minerals from LM Engineering for a consideration of 15,000,000 Kiwara
plc ordinary shares and a payment of $150,000.
Prospecting Licence 267
Validity: Prospecting Licence 267 was issued to LM Engineering Ltd in September
2005 for an initial period of 2 years. In accordance with the Mines and
Minerals Act 1995, it was renewed in September 2007 for a further two years
having dropped half the original area; at the second renewal in September 2009,
a further 50% reduction in surface area will be required. The Mines and
Minerals Act was repealed in April 2008 and was replaced by the Mines and
Minerals Act 2008 which may involve changes to these procedures. At the first
renewal, the Licence was transferred to Kalumbila Minerals Ltd, the joint
venture company. The licence covers Copper, Cobalt, Nickel, PGM group metals,
Uranium, Iron Ore and Limestone; Limestone is excluded from the joint venture
and may be exploited independently by LM Engineering Ltd.
Location: PL 267 is within the giant metallogenic province of Africa,
universally known as the Copperbelt. The licence area in North West Province,
Zambia, is 320Km west of the copperbelt city of Kitwe and 140km west of the
provincial capital of Solwezi. The current surface area of PL 267 is
approximately 5,500km2 over and around the periphery of the northern and
eastern part of the Kabompo Dome, the most westerly of the three major mid-
Proterozoic inliers that form what is now described as the "New Copperbelt".
East of Kabompo, the Solwezi and Mombezhi Domes already host significant new
mines - Kansanshi (First Quantum Minerals plc) and Lumwana (Equinox Minerals
Ltd) respectively. The combined expected production targets of these two mines
represent some 50% of Zambia`s current national copper production.
The geology of the region is that of variably deformed and metamorphosed late
proterozoic metasedimentary and volcanic units of the Katangan super group
which overlies the basement rocks.
The Kabompo area is largely covered by Miombo woodlands and grasslands that are
associated with the drainage lines; there is very little rock outcrop. Historic
work by Roan Selection Trust ("RST"), AGIP, Anglo American / ZamAnglo and
others identified a number base metal and radioactive targets, which, primarily
due to logistics, technology and historic metal price fundamentals, have
remained less explored or understood than mineral targets on the domes to the
east of Kabompo.
Following the inception of the joint venture with L M Engineering Ltd, Kiwara
conducted an appraisal of the known mineral occurrences and identified the
following targets:
Kalumbila
Kalumbila is a base metals - nickel, cobalt and copper - target hosted in a
carbonaceous phyllite (shale), originally identified by RST in 1950`s, who
drilled 31 core drill holes; the physical core and supporting data which remain
available at the Zambian Chamber of Mines in Kalalushi have provided a valuable
asset to the Company. The target was subsequently explored by Anglo American/
ZamAnglo in the mid-1990`s. Both historic campaigns focused on the nickel
potential in the northern part of the unit.
At the end of the wet season, in May 2007, Kiwara commenced geo-chemistry and
ground geo-physics surveys over the known outcropping and sub-outcropping of
the carbonaceous phyllite to determine the extent of the unit. The
interpretation of the ground, fixed loop electromagnetic survey ("EM") showed
that south of the Kalumbila Fault, the mineralised carbonaceous phyllite unit
may be continuous for a strike length of about 10km and is open to the west,
its position conforming to historic work. The survey also identified two flat
lying units running north of the Kalumbila fault for 4km and both open on
strike. The northern extensions are yet to be investigated. Both sections have
a close correlation with mineral soil anomalies.
Drilling: Kiwara has conducted both Reverse Circulation ("RC") and Diamond Core
Drilling. The objective of the first was to determine the up-dip continuity of
the nickel and copper zones.
The RC drilling in the copper zone (holes LR3 -LR5) intersected copper much
nearer to surface than has previously been reported at Kalumbila. LR3
intersected 36m 0.66% Cu from 24m.
The core drilling programme included two drill holes (L1 and L2) in the nickel
zone (see table below). These results together with the results of historic
RST drilling show that the nickel is deep-seated at 180 - 300m at grades of
generally around 0.3 - 0.5%. The copper is deeper, at 250m - 400m at grades of
0.7% - 1.1%.
With the success of LR3, the Company drilled L27 down dip and intersected a
most significant intersection of 224m at 0.59% Cu from 38m - which includes 96m
at 1.02% Cu from 163m.This zone and the up-dip potential will be the focus of
the ongoing exploration programme. Using metal prices at 31 March 2008 and cut
off of $40/tonne the rock value of the upper section of L27 would be $83 per
tonne and the lower section from 136m, $127 per tonne, the enhancement being
due to the cobalt credit.
Drill Holes
Intersections L1 L2 LR3 L27
Depth (m) 188 236 24 38
Thickness (m) 12 24 36 224
Grade 0.45% Ni 0.30% Ni 0.66% Cu 0.59% Cu
Intersection Including Including
Depth (m) 230 309 33 44
Thickness (m) 5 12 3 4
Grade 0.39% Ni 0.80% Cu 1.33% Cu 0.79% Cu
Intersection Including
Depth (m) 373 163
Thickness (m) 5 96
Grade 0.90% Cu 1.02% Cu
Drilling is ongoing and further assays results are awaited.
The drill results suggest that the western part of the copper target may be
tectonically thickened and / or heavily folded; this could explain the
increased thickness of the L27 intersections. Whilst this gives the potential
for greater volumes of near surface mineralisation and thus greater bulk mining
target potential, it will also require an increased concentration of drilling
to enable a resource statement. The board believes that the copper
mineralisation should be the priority target
The Kalumbila carbonaceous phyllite unit may well be a part of a larger
structure that includes Kawako, 12 km to the north-west of Kalumbila and in a
similar geological setting; historic work identified base metal soil anomalies
over this unit. This is a priority prospecting target during 2008.
Kawanga
Kawanga is a Uranium target identified by AGIP (Italy) during the 1970`s. In
the absence of their historic documentation, Kiwara conducted a ground
radiometric study, which identified a surface anomaly and the outline of
potentially two mineralised zones. A 2,000m drilling programme involving both
reverse circulation and core drilling was conducted in order to verify the
mineralisation and determine strike potential. The assay results of this
programme were as follows:
Drill From Intersection %U3O8 Type of
Hole metres drilling
WR8 105 1 0.87 Reverse
Circulation
WR11 123 1 0.51 Reverse
Circulation
WR12 58 6 0.118 Reverse
Circulation
Including 63 1 0.32
W2 224 0.22 0.11 Core
The drilling results confirm that the mineralisation occurs in at least two
lenses, one of which is appears to measure some 700 x 550 m and as suggested by
drill hole WR12, is up to at least 6m thick. The uranium mineralisation has
been identified as being autunite and thorium-free pitcheblenbe and is found
within and at the contact between the muscovite schist and the biotite schist,
which Kiwara correlates as the contact between the Lower and Upper Roan, rather
than the contact with the basement which has previously been supposed. It
appears to be the result of structural controls and is seen in W2 to occur in a
narrow veinlet.
Historic work in the region has identified a number of other Uranium anomalies
within the current licence area, these include the Kawanga anticline and
Nyambwezu, on the western side of the Licence area. These targets are yet to be
prospected.
Management: Kiwara`s exploration work is overseen by a technical management
committee comprising of Colin Bird (Kiwara Chairman), Neil Gardyne (CEO NAMF),
the Project Geologist (currently Maliro M Banda) and Peter Vivian-Neal (Kiwara
CEO).
Kiwara maintains two exploration camps within the Licence area, employing an
average work force of 8 technical and junior management, and 50 local
labourers. All operational staff are Zambian nationals.
Social and Environmental Issues: The Company is compliant with the requirements
set by the Environmental Council of Zambia with regard to minimising the impact
on the environment of prospecting and exploration operations and has
successfully submitted its Environmental Protection Brief as required under the
present Mines and Minerals Act. An environmental base line study will be
commenced in 2008 so that the resulting Environmental Impact Statement will be
available to match the reporting time line for any preliminary feasibility
studies. Whilst drilling is necessarily energy intensive, many other aspects of
exploration are not and the exploration camp runs many of its ancillary
activities, including computers and lighting on solar power.
The Kabompo region is dominated by subsistence farming, which is in the lowest
strata of income within Zambia. The Company has identified one local community
school, Nusanda, close to Kawanga, with 300 enrolled children that has
enthusiasm but only the most basic facilities and no external support. The
Company, together with the children`s charity World Vision, is providing the
skills to help the community build classroom units. Larger projects will be
appropriate as the Company completes viable feasibility studies. The Company
also maintains relationships with the traditional chiefs, who provide an
essential local administrative role in the rural areas.
Summary
Kiwara`s asset, its interest in Prospecting Licence 267, has at least two
separate targets on which operations in the reporting year have demonstrated as
having potential and justifying ongoing exploration work. Drilling results at
Kalumbila continue to support the Board`s assertion that there is the realistic
potential for a near surface copper resource. The structural alterations that
have taken place have produced the thickening of parts of the mineralised zones
which give rise to the significant copper intersections - 1.02% Cu over 96m
from 163m in drill hole L27 over the more usual 8-12m intersections (12m at
0.80% Cu from 309m in L2) found in the north eastern part of Kalumbila. The
Board believes that the results of continued exploration of the copper
mineralisation within Kalumbila, which together with the presence of Nickel and
Cobalt that make valuable secondary targets, will continue to add significant
shareholder value over the coming year.
Peter Vivian-Neal
CEO
KIWARA PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2008
Note Year Year
s ended ended 31
31 March March
2008 2007
GBP GBP
Other revenue - 11,000
Administrative expenses (89,274)
(801,165
)
Loss from operations (801,165 (78,274)
)
Finance income 44,463 6,567
Finance costs (41) (35)
Foreign exchange gain 88,146 -
Other income 522,309 -
Loss before income tax (146,288 (71,742)
)
Provision for income tax (86) -
Loss for the period after income (146,374 (71,742)
tax )
Minority interests
Equity 59,676 -
Loss attributable to members of (86,698) (71,742)
the company
Basic loss per share (pence) 3 (0.08) (0.28)
Diluted loss per share (pence) 3 (0.08) (0.28)
KIWARA PLC
CONSOLIDATED BALANCE SHEET
AT 31 MARCH 2008
Note Year ended Year ended
s 31 March 31 March
2008 2007
GBP GBP
Assets
Non-current assets
Intangible assets 2 13,069,106 -
Property, plant and equipment 96,691 -
Total non-current assets 13,165,797 -
Current assets
Trade and other receivables 41,158 -
Cash and cash equivalents 1,824,099 771,843
Prepaid expenses and other current 29,189 -
assets
Total current assets 1,894,446 771,843
Total assets 15,060,243 771,843
Current liabilities
Trade and other payables 135,760 146,141
Total current liabilities 135,760 146,141
Total liabilities 135,760 146,141
Net current assets 1,758,686 625,702
Net assets 14,924,483 625,702
Equity
Called up share capital 6 6,223,752 4,948,252
Share premium account 14,605,204 2,310,704
Share based payment reserve 200,885 -
Currency translation reserve 12,744 -
Retained Earnings (6,719,952 (6,633,254)
)
Equity attributable to equity 14,322,633 625,702
holders of the company
Minority interests 601,850 -
Total equity 14,924,483 625,702
KIWARA PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AT 31 MARCH 2008
Attributable to Equity Holders of the Company Minori Total
ty
Intere
st
Share Share Share Currency Retained
Capital Premium based translati earnings
payment on
reserve reserve
GBP GBP GBP GBP GBP GBP
4,862,00 1,701,74 - - (6,561,5 2,229
0 1 12)
Balance at -
31 March
2006
Issue of 86,252 - - - - - 86,252
share
capital
Premium on - 608,963 - - - 608,963
issue of -
share
capital
Share-based - - - - - -
payment
charge
Net loss - - - - (71,742) - (71,742
for the )
year
Currency - - - - - -
translation -
difference
Balance at 4,948,25 2,310,70 - - (6,633,2 - 625,702
31 March 2 4 54)
2007
Issue of 1,275,50 - - - - - 1,275,5
share 0 00
capital
Premium on - 12,294,5 - - - 12,294,
issue of 00 - 500
share
capital
Share-based - - 200,885 - - - 200,885
payment
charge
Net loss - - - - (86,698) (59,67 (146,37
for the 6) 4)
year
Addition in - - - - 661,52 661,526
minority 6
interest
Currency - - - 12,744 - 12,744
translation -
difference
Balance at 6,223,75 14,605,2 200,885 12,744 (6,719,9 601,85 14,924,
31 March 2 04 52) 0 483
2008
KIWARA PLC
CONSOLIDATED CASH FLOW STATEMENT
AT 31 MARCH 2008
Not Year Year
es ended 31 ended 31
March March
2008 2007
GBP GBP
Cash flow from operations 5 (488,057 76,814
)
Interest received (44,463) (6,567)
Net cash inflow (outflow) from (532,520 70,247
operating activities )
Cash flows utilised by investing
activities
Acquisition of subsidiaries, net of (102,189 -
cash acquired )
Purchase of intangible fixed assets (709,359 -
)
Purchase of property, plant and (144,416 -
equipment )
Interest received 44,463 6,567
Net cash inflow (outflow) from (911,501 6,567
investing activities )
Cash flow from financing activities
Issue of shares 2,496,27 695,215
7
Net cash inflow from financing 2,496,27 695,215
activities 7
Net increase in cash and cash 1,052,25 772,029
equivalents 6
Cash and cash equivalents at the 771,843 (186)
beginning of the year
Cash and cash equivalents at the 1,824,09 771,843
end of the year 9
KIWARA PLC
NOTES TO THE CONSOLIDATED PROVISIONAL RESULTS
FOR THE YEAR ENDED 31 MARCH 2008
1 Basis of preparation and accounting policies
The financial information for the year ended 31 March 2008 has been prepared on
the historical cost basis and is in accordance with EU Endorsed International
Financial Reporting Standards (IFRS), IFRIC Interpretations and the Companies
Act 1985 applicable to companies reporting under IFRS, which have been adopted
for the first time in the current financial year. The accounting policies have
been applied consistently throughout the Group and are consistent with those
for the financial year ended 31 March 2007 except for changes in relation to
compliance with IFRS. The adoption of IFRS did not result to the restatement of
prior year figures.
2 Balance sheet
The Group`s intangible assets consist of goodwill on consolidation which
amounted to GBP12,359,747 and exploration and evaluation expenses capitalized
to date of GBP709,359.
3 Income statement
The headline loss for the financial year 2008 was 0.08 pence (2007: 0.28 pence)
per share calculated on a weighted average number of shares of 112,527,988
(2007: 25,554,178).
No dividends paid or declared in the year.
4 Segment reporting
Business segments
The Group`s only business segment is the exploration and development of Nickel-
Cobalt Copper and Uranium.
Geographical segments
An analysis of income/(loss) on ordinary activities before taxation, net assets
and exploration expenditure by geographical area is given below.
2008 2007
GBP GBP
Income/(loss) on ordinary activities
United Kingdom 23,562 (71,742)
Zambia (169,850) -
(146,288) (71,742)
Total loss before minority interests (146,374) (71,742)
Net assets by location
United Kingdom 14,433,918 625,702
Zambia 490,565 -
14,924,483 625,702
Exploration expenditure
Zambia 709,359 -
Total exploration expenditure 709,359 -
5 Cash flow statement
2008 2007
GBP GBP
Net loss for the year before income tax (146,288) (71,742)
and minority interests
Depreciation 47,409 -
Negative Goodwill (522,309) -
(Increase) decrease in trade and other (41,158) 10,800
receivables
(Increase) decrease in prepaid (29,189) -
expenses and other current assets
Increase (decrease) in trade and other (10,468) 137,756
payables
Increase in currency translation 13,060 -
reserves
Share based payments 200,886 -
Cash flow from operations (488,057) 76,814
6 Capital and reserves
Shares issued
During the year ended 31 March 2008, a total of 127,550,000 (2007: 8,625,000)
ordinary shares of 1p each were issued. Included in this total, 15,550,000
ordinary shares of 1p each were issued for a cash consideration of GBP1,910,000
(2007: GBP345,000). The balancing 112,000,000 ordinary shares of 1p each were
issued for non-cash consideration.
Share options
The Company issued the following share options:
Date granted Period exercisable Exercise Number of
price per options
share
(pence)
3 August 2007 3 August 2007 - 3 August 10 3,000,000
2014
2 October 2007 2 October 2009 - 2 17 200,000
October 2014
2 October 2007 2 October 2009 - 2 20 250,000
October 2014
20 February 20 February 2008 - 20 20 900,000
2008 February 2015
Currency translation reserve
The currency translation reserve account comprises all foreign exchange
differences arising from the translation of the financial statements of foreign
operations that do not have a UKGBP functional currency. Exchange differences
arising are classified as equity and transferred to
the Group`s translation reserve.
7 Financial statements
The preliminary financial results have not been audited. Audited financial
statements compliant with the Companies Act and IFRS will be issued to
shareholders on 15 July 2008 and any adjustments, if applicable will be
released to SENS on that date.
8 Directorate
The directors who served during the year were as follows:
Principal occupation and Date appointed
function
C Bird Executive Chairman 6 August 2007
P Vivian- Chief Executive Officer 6 August 2007
Neal
R Samtani Financial Director 6 August 2007
R Wollenberg Non-Executive Director 3 August 2007
C Molefe Non-Executive Director 3 March 2008
S Kazenene Non-Executive Director 14 December 2007
H Blignault* Non-Executive Director 6 August 2007
*Hendrik Blignault resigned as a director of the Company on 3 March 2008.
Signed on behalf of the board
25 June 2008
Date: 25/06/2008 08:14:37 Produced by the JSE SENS Department.
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