| Mon 24 Nov 2008, 15:27 | | MMH - Miranda - Abridged Audited Annual Financial Results for the year ended 31 |
|
MMH
MMH
MMH - Miranda - Abridged Audited Annual Financial Results for the year ended 31
August 2008 Highlights
Miranda Mineral Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/001940/06)
Share code: MMH ISIN: ZAE000074019
(`Miranda` or `the company` or `the group`)
Abridged Audited Annual Financial Results for the year ended 31 August 2008
Highlights
- Successful completion of second capital raising of R20.7 million through the
private placement of 28 million shares
- Completed an upgrade of group coal resources to 158 million tones,
incorporating issue of 5 CPR`s
- Further consolidation of KwaZulu Natal coal interests
- Imminent granting of mining right on Sesikhona coal project
- Awarded Amajuba coal tender consisting of 4 coal prospecting permits
- Maintained director`s valuation of R284 million for Rozynenbosch base mineral
project
- Exploration on diamond project in North West Province intensified
- Award of two additional exploration permits in Botswana adjacent to existing
Mochudi diamond project
- First phase drilling completed on Uitval clay project in the North West
Province
- Attributable loss for the year at 4.5 cents per share (cps) (2007: loss of 1.0
cps)
-Net asset value (`NAV`) at 157 cps (2007: 175 cps), including tangible NAV of
9.5 cps (2007: 5.8 cps)
BALANCE SHEETS
Group Group Company Company
2008 2007 2008 2007
R`000 R`000 R`000 R`000
ASSETS
Non-current assets 323,852 317,180 30,797 31,744
Property, plant and 6,639 231 81 20
equipment
Goodwill 10,609 10,109 - -
Intangible assets 306,832 306,832 - -
Investment in subsidiaries - - 30,716 31,716
Investment in associates (228) - - -
Other financial assets - 8 - 8
Current assets 21,387 12,182 37,639 18,049
Inventories - 77 - -
Loans to group companies - - 17,343 5,945
Trade and other 905 85 - 85
receivables
Cash and cash equivalents 20,482 12,020 20,296 12,019
Total Assets 345,239 329,362 68,436 49,793
EQUITY AND LIABILITIES
Equity (attributable to 337,817 327,731 66,344 47,242
equity holders of parent)
Share capital 74,645 54 961 74,645 54,961
Reserves 284,522 284,522 - -
Retained earnings (20,799) (11,679) (8,301) (7,719)
Minority interest (551) (73) - -
Non-current liabilities
Finance lease obligations 3,614 - - -
Current liabilities 3,808 1,631 2,092 2,551
Loans from group companies - - 1,884 2,001
Other financial 1,004 1,004 - -
liabilities
Finance lease obligation 1,614 - - -
Trade and other payables 1,190 627 208 550
Total Equity and 345,239 329,362 68,436 49,793
Liabilities
Closing number of shares 215,131 187,131
in issue (`000)
Net asset value per share 157.0 175.1
(cents)
Net tangible asset value 9.5 5.8
per share (cents)
INCOME STATEMENT
Group Group Company Company
2008 2007 2008 2007
R`000 R`000 R`000 R`000
Revenue 372 2,000 - -
Cost of sales (298) - - -
Gross profit 74 2,000 - -
Other income 548 - - -
Operating expenses (11,674) (4,220) (2,462) (707)
Operating loss (11,052) (2,220) (2,462) (707)
Investment revenue 2,108 441 2,109 441
Income from equity (229) - - -
accounted investments
Finance costs (423) - (229) -
Loss for the year (9,596) (1,779) (582) (266)
Attributable to:
Equity holders of the (9,119) (1,706) (582) (266)
parent
Minority interest (477) (73) - -
Weighted average number of 203,547 175,948
shares in issue (`000)
Earnings/(loss) per share (4.5) (1.0)
(cents)
Headline earnings/(loss) (4.5) (1.0)
per share (cents)
CASH FLOW STATEMENT
Group Group Company Company
2008 2007 2008 2007
R`000 R`000 R`000 R`000
Cash flows from operating
activities
Cash used in operations (10,789) (3,206) (2,695) (760)
Interest income 2,108 440 2,108 440
Finance costs (422) - (229) -
Net cash from operating (9,103) (2,766) (816) (320)
activities
Cash flows from investing
activities
Purchase of property, (6,854) (13) (85) -
plant and equipment
Acquisition of businesses (500) (1,000) - (1,000)
(incl subs JVs & assoc)
Loans advanced to group - - (10,514) (2,555)
companies
Sale of financial assets 8 269 8 520
Net cash from investing (7,346) (744) (10,591) (3,035)
activities
Cash flows from financing
activities
Proceeds on share issue 19,684 15,373 19,684 15,373
Repayment of shareholders - 132 - -
loan
Finance lease payments 5,227 - - -
Net cash from financing 24,911 15,505 19,684 15,373
activities
Total cash movement for 8,462 11,995 8,277 12,018
the year
Cash at the beginning of 12,020 25 12,019 1
the year
Total cash at end of the 20,482 12,020 20,296 12,019
year
STATEMENT OF CHANGES IN EQUITY
Share Share Total share Revaluation
capital premium capital reserve
Group R`000 R`000 R`000 R`000
Balance at 01 1 537 29 952 31 489 -
September 2006
Financial assets - - - 284 522
Loss for the year - - - -
Issue of shares 334 23 138 23 472 -
Balance at 01 1 871 53 090 54 961 284 522
September 2007
Loss for the year - - - -
Issue of shares 280 20 440 20 720 -
Share issue costs - (1 036) (1 036) -
Business - - - -
combinations
Balance at 31 2 151 72 494 74 645 284 522
August 2008
Accumulated Total Minority Total
loss attributable to interest equity
equity holders
of the
group/company
Group R`000 R`000 R`000
Balance at 01 (9 974) 21 515 - 21 515
September 2006
Financial assets - 284 522 - 284 522
Loss for the year (1 705) (1 706) (73) (1 779)
Issue of shares - 23 472 - 23 472
Balance at 01 (11 679) 327 803 (73) 327 730
September 2007
Loss for the year (9 119) (9 119) (477) (9 596)
Issue of shares - 20 720 - 20 720
Share issue costs - (1 036) - (1 036)
Business - - (1) (1)
combinations
Balance at 31 (20 798) 338 368 (551) 337 817
August 2008
COMMENTARY
1. Operational Review
The year under review has seen the group mature and move aggressively into full
scale advanced exploration mode on its prioritised coal projects. The submission
of the group`s first Mining Right application to the Department of Minerals and
Energy (`DME`) during the financial year represented a significant milestone for
the group. The anticipated successful granting of the mining right, on the KZN
Sesikhona Kliprand coal project, in the last quarter of the 2008 calendar year
will be the culmination of nearly 18 months of work.
Strategically, the group has refocused its exploration assets into four resource
classes, namely Coal, Diamonds, Gold and Industrial Minerals. This has enabled
management to co-ordinate the group`s exploration strategy in a focused and
disciplined manner, allocating resources to each project based on that
particular project`s merits.
Coal Division
The company completed a detailed core drilling programme on the KwaZulu-Natal
(`KZN`) properties which resulted in the publication of four Competent Persons
Reports* (`CPR`s`) confirming a resource of 120 million tonnes (`mt`) of
anthracite and bituminous coal with excellent coking properties. The first phase
drilling programme was conducted on the Amajuba project and an initial CPR has
been completed identifying a resource of approximately 38 mt. This brought
Miranda`s total coal resources in KZN under CPR to 158 mt. *(PC Meyer:
Pr.Sci.Nat. (Reg. no. 40025/03), MGSSA, MFFF).
The production lead time on Sesikhona is not expected to be more than six weeks
and, depending on the timing of the execution of the Sesikhona mining permit,
production should kick off during the first quarter of calendar year 2009. The
group has also commenced with the preparation of mining right applications on
the Amajuba and Uithoek projects, respectively.
Diamond Division
Diamond exploration remains an important part of the group`s strategy and will
make a significant contribution to the group`s future earnings once these
projects come on line. During the period under review, the group was awarded two
additional prospecting permits adjacent to the existing Mochudi project in
Botswana.
The group recently completed a closely spaced electro-magnetic survey on the
Turffontein and Blaaubank diamond properties in the North West Province. The
initial results have been very encouraging and have also identified nine blocks
as potential target areas that will require further exploration.
Gold and Industrial Minerals
Although the primary focus has been to develop the group`s coal assets, the
company will continue to conduct further work on identified projects in its gold
and industrial mineral portfolio. Exploration conducted during the period under
review include the completion of first phase drilling at the Uitval clay project
in the North West Province, where the results have been encouraging. The
strategy is to develop a number of these projects further up the value curve so
as to allow the group to subsequently enter into a joint venture with a partner
seeking to develop these projects further.
2. FINANCIAL REVIEW
Financial results
For the year ended 31 August 2008, the net asset value and net tangible asset
value of the company increased to R338 million and R20 million, respectively
(2007: R327 million and R11 million). This was equivalent to 157 cents per share
(`cps`) and 9.5 cps (2007: 175.1 cps and 5.8 cps).
Revenue amounted to R372,000 (2007: R2 million). Operating expenses amounted to
R11.7 million (2007: R4.2 million). The resultant net loss for the period was
R9.6 million (2007: R1.8 million), equivalent to a loss of 4.5 cps (2007: loss
of 1.0 cps). This was a direct result of the increased expenditure on the coal
exploration. The board is confident that the imminent cash flows from the
Sesikhona project will enable the company to speed up the transition from
prospecting to mining on at least two of the most advanced projects.
Private placing
In line with its strategy of `just-in-time` capital raising, the company
successfully completed its second capital raising exercise during the period
under review. An amount of R20.7 million was raised through the issue of 28
million shares at a price of 74 cps. The shares were issued under the board`s
general authority. The proceeds of the private placing will enable the company
to significantly advance its exploration objectives on the coal projects
referred to above and detailed in the annual report.
Valuation of Rozynenbosch base metal project
In terms of International Financial Reporting Standards (`IFRS`) the board is
required to regularly test for any impairment or material change in the value of
the company`s assets. At the end of the current financial reporting date, the
two main variables affecting value, namely the exchange rate and commodity
prices, had shown an upward movement. Given these short-term changes, the
indicative value of the project in Rand terms had increased to R462 million.
Consistent with the approach taken in the 2007 annual results, and given the
uncertainty of the long-term sustainability of current commodity prices, the
board is still of the opinion that the previously reported value of R284 million
is more realistically achievable over the life of the project. The value of the
project was therefore not adjusted at the reporting date (2007: R284 million).
At the time of publication of these results the new order prospecting permit had
not yet been granted by the DME, however the company has lodged a formal appeal
with the department and the board is confident that this permit will be granted
shortly.
3. PROSPECTS
The company is satisfied with the results and expenditure to date. The success
of the private placing and the potential revenue that will be generated from the
Sesikhona project have placed the group in a position to fast-track certain coal
and diamond projects, which are expected to yield positive results in the next
12 to 18 months.
With regard to the current financial market turmoil, the board is of the opinion
that Miranda has sufficient resources to continue with it`s exploration
programme. The development of the core coal assets is not expected to be
materially affected (even if a worst case scenario were to force a delay in the
exploration activities on some non-core prospects). At an operational level, the
group is therefore simply continuing to lay the building blocks of its business
development plan. Market crises deliver their own opportunities and Miranda is
certainly viewing its future in this light.
4. STATEMENT ON GOING CONCERN
The financial statements have been prepared on the going-concern basis since the
directors have every reason to believe that the company has adequate resources
in place to continue in operation for the foreseeable future. The funds raised
by the private placement will be used to complete the exploration program
detailed in the annual report and to provide for the company`s operational cash
flow requirements for the next twelve months. The company will continue with its
strategy of `just-in-time` capital raising as and when required. Additional cash
flow requirements will be funded internally from future revenue generated from
joint venture projects.
5. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The abridged financial statements have been prepared in accordance with
International Financial Reporting Standards, IAS 34, the Companies Act, 1973
(Act 61 of 1973) as amended and the disclosure requirements of the listing
requirements of the JSE Limited. The financial statements have been prepared
under the historical cost convention and the accounting policies are consistent
with those of the previous year.
6. DIVIDENDS
No dividends were recommended or declared for the financial year under review
(2007: nil).
7. AUDIT OPINION
The abridged results have been audited by the company`s auditors PKF (Pretoria)
Inc whose unqualified audit report is available for inspection at the groups`
registered address.
For and on behalf of the Board
AR Thompson Chairman
RJ Nel Chief Executive Officer
Pretoria
24 November 2008
Sponsor
Sasfin Capital (A division of Sasfin Bank Limited)
Transfer secretaries
Computershare
Computershare Investor Services 2004 (Pty) Ltd
(Registration number 2004/0036447/07)
Sponsor
Sasfin capital
Corporate adviser
Qunisele Resources
Metals & Minerals Management
Date: 24/11/2008 15:27:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
