| Mon 29 Sep 2008, 7:05 | | DMC - DiamondCorp Plc - Interim Results (Unaudited) for the period |
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DMC
DMC
DMC - DiamondCorp Plc - Interim Results (Unaudited) for the period
ended 30 June 2008
DiamondCorp plc
JSE share code: DMC & AIM share code: DCP
ISIN: GB00B183ZC46
(Incorporated in England and Wales)
(Registration number 05400982)
(SA company registration number 2007/031444/10)
(`DiamondCorp` or `the Company`)
Interim Results (Unaudited) for the period ended 30 June 2008
DiamondCorp plc, the South African diamond mine development and exploration
company, releases its interim results for the period ended 30 June 2008. The
results are unaudited and should be read in conjunction with the market
update released on 3 July 2008.
Commenting on the results, DiamondCorp CEO Paul Loudon said: "Operations
achieved our first period of positive gross profit despite issues with power,
bad weather and problems in the re-crush circuit.
"This is a testament to management`s ability to resolve commissioning stage
operational challenges, as well as a careful attention to cost control.
Successful commissioning of a new VSI crusher will shortly be supplemented by
a new primary crushing circuit to handle higher value kimberlite from
underground.
"The year ahead is very exciting for DiamondCorp as we join the very small
group of diamond mining companies operating a long-life kimberlite resource."
Highlights
- 27,103 carats of diamonds were recovered from Lace tailings re-treatment in
the first six months of 2008 (same period in 2007 nil), including a 34.84
carat non-gem diamond. Recoveries averaged 6.1 carats per hundred tonnes and
approximately 70% of diamonds recovered were gem quality.
- 19,214 carats of gem diamonds sold at tender in Johannesburg for revenue of
GBP578,847 (2007 nil), at an average price of US$61 per carat.
- Gross profit from operations of GBP20,902 (2007 nil).
- Net Loss for the period of GBP1,340,920 (2007 GBP1,251,920) after overheads
of GBP667,000, one-off costs associated with the company`s listing on the JSE
Limited of GBP271,000, non-cash items (depreciation, amortisation and share
option expenses) of GBP407,000 and income tax expense of GBP17,000.
- Accelerated development of Phase Two underground mining at the Lace Diamond
mine is now 14 months ahead of original schedule.
- A new 4m x 4m decline is advancing towards the Lace Satellite kimberlite
pipe, with progress of 150m having now been achieved to date. Initial
advances have been slowed by poor ground conditions associated with the
proximity of the decline to surface, which have required significant roof and
side wall reinforcement. The decline is now entering competent basalt and
initial kimberlite is expected to be mined in October 2008.
- Connection to a second Eskom power supply from a new power line servicing
the nearby De Beers Voorspoed diamond mine was completed, and as a result,
the impact of power outages and load shedding has been minimised.
- The Company`s shares were successfully listed on the main board of the JSE
Limited.
- R26 million (GBP1.8 million) of new equity was raised with a placement of
shares to South African institutional investors.
Post Period Highlights
- Agreement was reached with Africa Opportunity Fund LP for a US$5 million
loan facility, which, when documentation is finalised, will complete the
funding requirements for Phase Two at the Lace mine.
- Testwork using a vertical spindle impact crusher has demonstrated that it
can successfully liberate the 2-3 cpht of diamonds locked up in the re-crush
stockpile and a commercial scale unit has been installed and successfully
commissioned. As a result, diamond recoveries from the tailings have
increased to in excess of 8cpht, and processing of the 280,000 tonne re-crush
stockpile has started.
CONSOLIDATED INCOME STATEMENT
Six months ended 30 June 2008
Six months Six months
ended ended
30 Jun 30 Jun
2008 2007
GBP GBP
Revenue 578,847 -
Cost of sales (557,946) -
GROSS PROFIT 20,902 -
Administrative expenses (1,381,701) (1,320,220)
OPERATING LOSS (1,360,799) (1,320,220)
Investment revenues - interest 2,880 68,300
on bank deposits
LOSS BEFORE TAX (1,357,920) (1,251,920)
Tax 17,000 -
LOSS FOR THE FINANCIAL PERIOD (1,340,920) (1,251,920)
ATTRIBUTABLE TO THE EQUITY (1,340,920) (1,251,920)
HOLDERS OF THE PARENT
LOSS PER SHARE GBP 0.038 GBP 0.038
All of the activities of the Group are classed as continuing.
The Group has no recognised income or expense other than the loss for the
period shown above in the consolidated income statement. Accordingly, a
statement of recognised income and expense is not presented.
STATEMENT OF CHANGES IN EQUITY
Six months Six months
ended ended
30 Jun 2008 30 Jun 2007
GBP GBP
Opening balance 13,264,924 9,018,355
Loss for the financial period (1,340,920) (1,251,921)
New equity share capital subscribed 69,498 280,500
Premium on new equity share capital 1,670,818 5,246,536
subscribed
Translation reserve (1,000,954) (183,668)
Value attributed to warrants granted (7,333) 273,148
Value of share option reserve 162,000 365,370
Closing Balance 12,818,034 13,748,320
CONSOLIDATED BALANCE SHEET
30 June 2008
30 Jun 31 Dec
2008 2007
GBP GBP
NON-CURRENT ASSETS
Goodwill 4,606,026 4,606,026
Other intangible assets 1,822,828 1,445,567
Property, plant and 4,556,664 4,958,689
equipment
10,985,517 11,010,282
CURRENT ASSETS
Inventories 1,071,680 986,049
Other receivables 254,500 136,495
Cash and cash 1,148,374 1,330,707
equivalents
2,474,554 2,453,251
TOTAL ASSETS 13,460,071 13,463,533
CURRENT LIABILITIES
Other payables (642,038) (198,609)
TOTAL LIABILITIES (642,038) (198,609)
NET ASSETS 12,818,034 13,264,924
EQUITY
Share capital 1,112,610 1,043,112
Share premium 15,787,124 14,116,306
Warrant reserve 733,616 740,949
Stock option reserve 444,790 282,790
Translation reserve (918,417) 82,537
Retained losses (4,341,690) (3,000,770)
EQUITY ATTRIBUTABLE TO 12,818,034 13,264,924
EQUITY HOLDERS OF THE
PARENT
CONSOLIDATED CASH FLOW STATEMENT
Six months ended 30 June 2008
Six months Six months ended
ended 30 Jun
30 Jun 2007
2008
GBP
GBP
Operating loss (1,343,800) (1,320,220)
Depreciation and amortisation 244,998 97,884
Share option expense 162,000 365,370
Other non cash movements - 71,850
Change in receivables (118,005) 122,122
Change in inventories (85,631) (35,851)
Change in payables 443,429 (423,403)
NET CASH USED IN OPERATING (697,009) (1,122,248)
ACTIVITIES
INVESTING ACTIVITIES
Purchase of intangible assets (424,316) -
Purchase of property, plant and (796,871) (1,110,538)
equipment
Interest received 2,880 68,300
NET CASH USED IN INVESTING (1,218,307) (1,042,238)
ACTIVITIES
FINANCING ACTIVITIES
Proceeds on issue of ordinary 1,712,984 2,032,335
shares
Proceeds on exercise of warrants 19,999 29,999
NET CASH FROM FINANCING 1,732,983 2,062,334
ACTIVITIES
NET INCREASE IN CASH AND CASH (182,333) (102,152)
EQUIVALENTS
CASH AND CASH EQUIVALENTS AT 1,330,707 2,822,089
BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS AT END 1,148,374 2,719,937
OF PERIOD
NOTES TO THE FINANCIAL STATEMENTS
Six months ended 30 June 2008
1. ACCOUNTING POLICIES
These interim financial statements are IAS 34 compliant and were approved by
the Board on 26 September 2008 and do not constitute statutory financial
statements within the meaning of Section 240 of the Companies Act 1985. A
copy of the statutory accounts for the year ended 31 December 2007 has been
delivered to the Registrar of Companies. The auditors` report on those
accounts was not qualified and did not contain statements under Section
237(2) or (3) of the Companies Act 1985.
These interim financial statements have been prepared using the accounting
policies set out in the Group`s 2007 statutory accounts.
Results for the six-month period ended 30 June 2008 have not been audited.
The comparative information presented in the income statement has been
prepared based on the period 1 January 2007 - 30 June 2007. This has been
performed in order to comply with the AIM rules and is presented solely for
this purpose.
2. LOSS PER SHARE
IAS requires presentation of diluted earnings per share when a company could
be called upon to issue shares that would decrease net profit or increase net
loss per share. For a loss making company with outstanding share options, net
loss per share would only be increased by the exercise of out-of-money
options. Since it seems inappropriate to assume that option holders would
exercise out-of-money options, no adjustment has been made to diluted loss
per share for out-of-money share options.
The calculation of basic and diluted loss per ordinary share is based on the
loss of GBP1,340,920 for the six months ended 30 June 2008 (30 June 2007:
GBP1,251,920) and on 35,498,771 ordinary shares (30 June 2006: 32,478,739)
being the weighted average number of ordinary shares in issue.
3. EXCEPTIONAL ITEMS
Six months Six months
ended ended
30 Jun 30 Jun
2008 2007
GBP GBP
Operating loss is after
charging
Auditors` remuneration
- as auditors - 16,500
IPO Costs - 109,748
Listing costs 271,426 -
4. SHARE CAPITAL
30 Jun 30 Jun
2008 2007
GBP GBP
Authorised share capital
166,666,666 ordinary 5,000,000 5,000,000
shares of 3 pence each
No. GBP No. GBP
Called up, allotted and
fully paid
Ordinary shares of 37,086,984 1,112,610 34,087,067 1,022,612
3 pence each
In May 2008, the Company placed 2,249,923 ordinary shares at an issue price
of R11.59 per share on the JSE Limited (JSE) for gross proceeds of ZAR
26,076,608; the equivalent of 77.7 pence at the prevailing exchange rate.
This represents a 10% discount to the 30 day volume weighted average price of
83.6 pence per share on AIM as at 6 May 2008. The placement equates to 6.5
percent of the Company`s issued share capital. The new shares rank pari passu
with the existing shares of the Company.
During the six months ending 30 June 2008, 66,664 warrants were exercised for
proceeds of GBP19,999 and the same number of ordinary shares were issued.
5. SUBSEQUENT EVENTS
The Company has arranged a loan facility in an amount of US$5 million with
Africa Opportunity Fund LP (`AOF`). The AOF loan comprises cumulative,
redeemable, secured bonds which bear interest at a rate of 12 per cent per
annum. The bonds are to be repaid over three years, with principal payments
of US$500,000 due after 18 months, US$1 million after 24 months, US$1.5
million after 30 months and the balance of US$2 million after 36 months. On 1
September 2008 the Company received shareholder approval at a general meeting
of shareholders to issue AOF at closing 1.65 million warrants to purchase
ordinary shares in the Company at 72p per share at any time from six months
to 36 months after the issue date. When finalised, this loan will supplement
the R26 million of new equity placed and completes the funding requirements
for accelerated development of Phase Two underground mining at the Company`s
74%-owned Lace diamond mine. At the date hereof, the Company is awaiting the
registration of a special notorial bond and a mortgage in the South African
Deeds Office before the project loan is drawn down, which registration is
expected during the month of October.
29 September 2008
London
Sponsor: Investec Bank Limited
For further information, please contact:
Paul Loudon DiamondCorp plc +44 20 7256 2651
Joe Nally/Liz Bowman, Cenkos Securities plc +44 20 7397 8900
Robert Smith/Tanis Crosby, Investec Bank Limited +27 11 286 7662
Charmane Russell/Matthew Ross, Russell & Associates +27 11 880 3924
Jane Stacey/Jos Simson, Conduit PR +44 20 7429 6606/+44 7922 923 306
Date: 29/09/2008 07:05:01 Produced by the JSE SENS Department.
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