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KWR
KWR
KWR - Kiwara Plc - Chairman`s statement and interim results for the period ended
30 September 2008
Kiwara plc
Share codes: JSE - KWR
AIM - KIW
ISIN - GB0007702953
(`Kiwara" or the "Company`)
Chairman`s Statement and Interim Results
for the period ended 30 September 2008
The Board of Kiwara, the AIM quoted and JSE listed mining exploration and
development company, is pleased to announce interim results for the period ended
30 September 2008.
Highlights
* Dual listed on the main board of the Johannesburg Stock Exchange on 3 April
2008.
* Rand 15 million (GBP1 million) raised through the issue of 5 million
ordinary shares of 1p each at Rand 3 per share to New Africa Mining Fund
("NAMF").
* Kiwara increased its interest in joint venture company, Kalumbila Minerals
Limited ("Kalumbila Minerals") from 75% to 80%.
* Kawako Project ("Kawako") - initial drilling intersected exceptional nickel
grades. Follow up programme initiated.
* Kalumbila Project ("Kalumbila") - results of ongoing drill programme
continue to show the potential for a major open pittable bulk copper target
with important nickel and cobalt credits.
* Resource estimation is in progress that will culminate in the publication
of a SAMREC compliant Mineral Resource estimate.
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 / Gavin Hall 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
Chairman`s Statement
Dear Shareholders,
Operations
During the six month period to 30 September 2008, the Company has made very
significant progress, achieving exceptional results from its exploration
activities within the Zambian prospecting licence 267 ("PL267") in North West
Zambia.
The Company is particularly pleased with the initial results obtained from
Kawako; which include a 53.50m intersection assaying at 1.07% nickel ("Ni")
starting 29.50m from surface in borehole KW1, and two zones, 5.58m assaying
3.20%Ni from 89.20m and 10.80m assaying 6.73%Ni from 104.30m in borehole KW2.
These grades are very high by industry norms and if deposit strike length and
down-dip continuity are confirmed, this project may result in a significant
nickel discovery. Soil geochemistry also shows the presence of copper
mineralisation which will be further investigated.
Results of the drill programme at Kalumbila continue to report geological
continuity along the so-far determined 8.2km strike. Typical intersections
include 46.00m assaying 1.39% copper ("Cu") from 140m (borehole L33) and 42.40m
assaying 0.86%Cu from 164m (borehole L35). Nickel, cobalt and uranium
mineralisation have also been reported. The continuing programme has focused on
near surface potential, which if realised, could make Kalumbila an open pittable
multi base metal deposit, a preferred target of the mining industry. A SAMREC
compliant Mineral Resource estimate by an independent Competent Person is in
preparation and will be published shortly.
The Company clearly has outstanding prospects since its initial discoveries
indicate significant mineralised strike length and proximity to surface which
may provide Kiwara with the opportunity to report considerable, easy to mine
base metal mineral resources. Both Kawako and Kalumbila show potential for
world class mining opportunities.
Financial Review
The Pre-tax loss for the six months to 30 September 2008 was GBP172,483 (2007 -
profit of GBP265,078). This figure includes a one-off charge of GBP336,347
attributable to Kiwara`s listing on the full board of the Johannesburg Stock
Exchange. The consolidated income statement also includes an exchange gain of
GBP466,555 which relates to the US$ denominated inter-company loan due to Kiwara
from its Zambian based subsidiary, Kiwara Zambia Limited ("Kiwara Zambia").
Cumulative exploration expenditure incurred on Prospecting Licence 267 amounted
to GBP1,864,413 at 30 September 2008. This figure exceeds the Company`s
commitment to have spent a cumulative US$2.2 million prior to November 2009 and
accordingly, Kiwara has exercised its earn-in right to an additional 5% of the
joint venture company, Kalumbila Minerals, which holds PL267. This additional
interest increases Kiwara`s holding in Kalumbila Minerals from 75% to 80%
effective from 16 October 2008.
The Company raised Rand 15 million through the issue of 5 million ordinary
shares of 1p each at Rand 3 per share to New Africa Mining Fund ("NAMF"), one
of the original investors in Kiwara. This transaction included the issue of a
two year option to NAMF to subscribe for a further 2.5 million ordinary shares
of 1p each at Rand 4 per share. The placement was approved by shareholders at
an Extraordinary General Meeting held on 19 September 2008.
The global economic slowdown had led to a significant decline in both the
price of base metals and in the market capitalisation of almost all mining
and exploration companies. This is based on an anticipated Chinese economic
slowdown, which I believe should be short lived. The Kiwara mission is to
identify major deposits of nickel and copper and we appear to be making good
progress towards this objective.
The location, favourable geology and exploration results to date make Kiwara
an exciting emerging base metal company, with many value add possibilities
for our shareholders.
Colin Bird
Chairman
10 December 2008
Consolidated Income Notes Six months ended Year ended
Statement
30 30 31 March
September September 2008
2008 2007 Audited
Unaudited Unaudited GBP
GBP GBP
Revenue
Other income - - -
Administration expenditure 4 (662,007) (274,122) (801,165)
Loss from operations (662,007) (274,122) (801,165)
Finance income 22,969 16,891 44,463
Finance cost - - (41)
Foreign exchange gain 466,555 - 88,146
Other income - 522,309 522,309
Profit/(loss) before (172,483) 265,078 (146,288)
income tax expense
Income tax expense - - (86)
Profit/(loss) for the (172,483) 265,078 (146,374)
period after income tax
expense
Loss attributable to 25,448 20,310 59,676
minority interest
Profit/(loss) attributable (147,035) 285,388 (86,698)
to members of Kiwara Plc
Number of shares in issue 5 165,485,010 141,935,010 160,485,010
Weighted average number of 160,594,300 68,077,087 111,815,611
shares in issue
Diluted weighted average 161,105,130 69,778,328 112,527,988
number of shares in issue
Basic profit/(loss) per 3 (0.09) 0.42 (0.08)
share (pence)
Headline profit/(loss) per 3 (0.09) 0.42 (0.08)
share (pence)
Diluted profit/(loss) per 3 (0.09) 0.41 (0.08)
share (pence)
Diluted headline 3 (0.09) 0.41 (0.08)
profit/(loss) per share
(pence)
Consolidated Balance
Sheet
Notes 30 30 31
September September March 2008
2008 2007 Audited
Unaudited Unaudited GBP
GBP GBP
Assets
Non-current assets
Property, plant and 78,017 92,170 96,691
equipment
Intangible assets 14,224,160 8,168,524 13,069,106
Total non-current 14,302,177 8,260,694 13,165,797
assets
Current assets
Trade and other 100,655 164,133 41,158
receivables
Cash and cash 1,292,989 1,612,378 1,824,099
equivalents
Prepaid expenses and 24,018 2,268 29,189
other current assets
Total current assets 1,417,662 1,778,779 1,894,446
Total assets 15,719,839 10,039,473 15,060,243
Current liabilities
Trade and other 340,284 22,876 135,760
payables
Total current 340,284 22,876 135,760
liabilities
Total liabilities 340,284 22,876 135,760
Net current assets 1,077,378 1,755,903 1,758,686
Net assets 15,379,555 10,016,597 14,924,483
Equity
Share capital 5 6,273,752 6,038,252 6,223,752
Share premium 5 8,738,664 3,390,704 7,815,204
Share based payment 207,474 - 200,885
reserve
Currency translation (397,192) (8,571) 12,744
reserves
Other reserves 6,790,000 6,790,000 6,790,000
Retained earnings (6,866,987) (6,347,866) (6,719,952)
Equity attributable
to equity holders of 14,745,711 9,862,519 14,322,633
the company
Minority interests 633,844 154,078 601,850
Total equity 15,379,555 10,016,597 14,924,483
Statement of Changes in Equity
Minori
Attributable to Equity Holders of the Company ty Total
Intere
sts
Share
based Currency
Share Share payment translat Other Retaine
Capita Premiu reserve ion reserves d
l m reserves earning
s
GBP GBP GBP GBP GBP GBP GBP GBP
Balance 4,948, 2,310, - - - (6,633, - 625,702
at 1 252 704 254)
April
2007
Issue of 1,090, - - - - - - 1,090,0
share 000 00
capital
Premium
on issue - 1,080, - - - - - 1,080,0
of share 000 00
capital
Net - - - - - 285,388 (20,31 265,078
profit/( 0)
loss)
for the
period
Addition - - - - - - 174,38 174,388
in 8
minority
interest
Currency - - - (8,571) - - - (8,571)
translat
ion
adjustme
nt
Other - - - - 6,790,000 - - 6,790,0
reserves 00
Balance 6,038, 3,390, - (8,571) 6,790,000 (6,347, 154,07 10,016,
at 30 252 704 866) 8 597
Septembe
r 2007
Issue of 185,50 - - - - - - 185,500
share 0
capital
Premium
on issue - 4,424, - - - - - 4,424,5
of share 500 00
capital
Net - - - - - (372,08 (39,36 (411,45
profit/( 6) 6) 2)
loss)
for the
period
Addition - - - - - - 487,13 487,138
in 8
minority
interest
Share - - 200,885 - - - - 200,885
based
payment
charge
Currency - - - 21,315 - - - 21,315
translat
ion
adjustme
nt
Other - - - - - - - -
reserves
Balance 6,223, 7,815, 200,885 12,744 6,790,000 (6,719, 601,85 14,924,
at 31 752 204 952) 0 483
March
2008
Issue of 50,000 - - - - - - 50,000
share
capital
Premium
on issue - 950,00 - - - - - 950,000
of share 0
capital
Costs on - (26,54 - - - - - (26,540
issue of 0) )
shares
Net - - - - - (147,03 (25,44 (172,48
profit/( 5) 8) 3)
loss)
for the
period
Addition - - - - - - 57,442 57,442
in
minority
interest
Share - - 6,589 - - - - 6,589
based
payment
charge
Currency - - - (409,936 - - - (409,93
translat ) 6)
ion
adjustme
nt
Other - - - - - - - -
reserves
Balance 6,273, 8,738, 207,474 (397,192 6,790,000 (6,866, 633,84 15,379,
at 30 752 664 ) 987) 4 555
Septembe
r 2008
Cash flow statement Six months ended Year
ended
30 30 31 March
September September 2008
2008 2007 Audited
Unaudited GBP
GBP Unaudited
GBP
Cash flow from operating activities
Profit/(loss) before income tax and (172,483) 265,078 (146,288)
minority interest
Depreciation 17,120 6,695 47,409
Profit on disposal of property, (5,014) - -
plant and equipment
(Increase)/decrease in trade and (59,497) (56,213) (41,158)
other receivables
(Increase)/decrease in prepaid
expenses and other current 5,171 (2,268) (29,189)
assets
Increase/(decrease) in trade and 204,524 (126,443) (10,468)
other payables
Increase/(decrease) in currency (429,722) - 13,061
translation reserves
Share based payments 6,589 - 200,885
Interest received (22,969) (16,891) (44,463)
Negative goodwill - (522,309) (522,309)
Net cash outflow from operating (456,281) (452,351) (532,520)
activities
Cash flows utilised by investing
activities
Acquisition of subsidiaries, net of - (51,704) (102,189)
cash acquired
Purchase of intangible fixed assets (1,086,103) (359,713) (709,359)
Purchase of property, plant and (881) (98,865) (144,416)
equipment
Proceeds from disposal of property, 15,726 - -
plant and equipment
Interest received 22,969 16,891 44,463
Net cash outflow from investing (1,048,289) (493,391) (911,501)
activities
Cash flow from financing activities
Issue of shares, net of costs of 973,460 1,786,277 2,496,277
issuance
Net cash inflow from financing 973,460 1,786,277 2,496,277
activities
Net increase/(decrease) in cash and (531,110) 840,535 1,052,256
cash equivalents
Cash and cash equivalents at the 1,824,099 771,843 771,843
beginning of the year
Cash and cash equivalents at the 1,292,989 1,612,378 1,824,099
end of the year
Notes to the Financial Statements
1 The unaudited interim financial statements for the six months ended 30
September 2008 have been prepared and are presented in accordance with
International Accounting Standards 34, Interim Financial Reporting. The
accounting policies and methods of computation have been applied
consistently throughout the Group and are consistent with those for the
financial year ended 31 March 2008.
2 Segmental Analysis
Business segments
The Group`s only business segment is the exploration and development of
nickel-cobalt copper and uranium.
Geographical segments
An analysis of the profit/(loss) on ordinary activities before taxation and
minority interest, net assets and exploration expenditure by geographical
area is given below.
Six months ended Year
ended
30 30 31
September Septembe March
2008 r 2007 2008
GBP GBP GBP
Profit/(loss) on
ordinary activities
before income tax and
minority interest
United Kingdom (93,436) 316,764 23,562
Zambia (79,047) (51,686) (169,85
0)
(172,483) 265,078 (146,28
8)
Net assets by location
United Kingdom 13,551,77 9,161,13 14,433,
2 3 918
Zambia 1,827,783 855,463 490,565
15,379,55 10,016,5 14,924,
5 97 483
Exploration expenditure
Zambia 1,864,413 359,713 709,359
Total exploration 1,864,413 359,713 709,359
expenditure
3 The calculation of the basic loss per share and headline loss per share is
based on the loss of GBP147,035 for the period ended 30 September 2008
divided by the weighted average number of shares being 160,594,300 in issue
during the year.
The diluted loss per share and diluted headline loss per share is based on
the loss of GBP147,035 for the period ended 30 September 2008 divided by
the weighted average number of shares and potential shares being
161,105,130 in issue during the year.
4 On 3 April 2008, Kiwara Plc was listed on the full board of the
Johannesburg Stock Exchange (JSE Ltd). Total costs associated with the
listing on the Johannesburg Stock Exchange amounted to GBP336,347 and are
included in the consolidated income statement for the period ended 30
September 2008.
5 The Group issued 5,000,000 ordinary shares of 1 p each at a strike price of
Rand 3 per share to New Africa Mining Fund ("NAMF") in accordance with the
agreement entered into with NAMF on 8 July 2008. The Group raised
GBP973,460 net of cost of issuance of GBP26,540.
6 Under the terms of its Joint Venture agreement with LM Engineering Ltd on
Prospecting Licence 267 and following exploration expenditure of US$2.2
million, the Company exercised its option to increase its shareholding in
Kalumbila Minerals Ltd by 5% to an 80% holding in its Zambian based
subsidiary on 16 October 2008.
7 Copies of the interim report are available to the public free of charge
from the Company at 4th Floor, 2 Cromwell Place, South Kensington, London,
SW7 2JE, during normal office hours for 30 days from the date of this
report.
11 December 2008
Sponsor: Investec Bank Limited
Date: 11/12/2008 09:03:01 Produced by the JSE SENS Department.
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