|
AEA
AEA
AEA - African Eagle Resources plc - Review Of Progress And Results For The
Half Year Ended 30 June 2009
African Eagle Resources plc
(Incorporated in England and Wales, registered number 3912362)
AIM share code: AFE AIM ISIN: GB0003394813
JSE share code: AEA JSE ISIN: GB0003394813
Half Year Results
25 September 2009
REVIEW OF PROGRESS AND RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2009
African Eagle Resources plc ("African Eagle" or the "Company", ticker AIM:
AFE, AltX: AEA) announces progress made so far in 2009 together with its
financial results for the half year to 30 June 2009.
African Eagle`s Half Year Report for the period ended 30 June 2009 can be
viewed at:
http://www.africaneagle.co.uk/downloads/InterimFinancialStatements30June2009.p
df
Bevan Metcalf
Company Secretary
African Eagle Resources plc
Chairman`s Statement
Report to shareholders, by African Eagle Chairman, John Park
- Comprehensive strategic review to deliver best return to shareholders
- Dutwa successes: metallurgical testwork, resource estimation and Ngasamo
Joint Venture
- Scoping study makes strong investment case for Dutwa project
- Successful and innovative fund-raising of GBP3.37 million
Dear Shareholder
In late 2008, on the basis of a comprehensive strategic review of our assets
and activities, African Eagle`s Board determined that the Company should
concentrate its efforts and resources on the Dutwa nickel laterite project in
Tanzania. We believe that Dutwa, of all our projects, for each dollar spent
would deliver the best return to shareholders.
Our adherence to this strategy has paid off, with the results of metallurgical
testwork announced in February and the Scoping Study completed in June showing
that Dutwa is likely to be a highly profitable operation, thanks to its
uniquely straightforward metallurgy. Our farm-in agreement over the adjacent
Ngasamo deposit, signed in April, should add at least 50% to the project
resource.
Our successes at Dutwa allowed us to raise GBP3.37 million new capital via a
highly successful Offer and Placing, completed early in August.
Dutwa
At the end of November 2008 and on completion of a Reverse Circulation (RC)
and diamond drilling programme the Company published an estimate for Dutwa
which showed there to be 340,000 tonnes of contained nickel and 11,000 tonnes
of contained cobalt in a resource of 31 million tonnes at 1.1% nickel and
0.034% cobalt. The resource report indicated the potential to increase both
the resource size and the confidence level.
The metallurgical characteristics of nickel laterites are of crucial
importance and Dutwa`s unique high silica, low iron and magnesium mineralogy
resulted in very positive results from the leach test work carried out on
drill core samples, showing that recoveries in excess of 80% nickel could be
achieved with very low acid consumptions. Coupled with the resource
determination we were encouraged, after a thorough and detailed bidding
process, to award a contract for a scoping study on Dutwa to GRD-Minproc in
March 2009.
To the 31 million tonnes resource at Dutwa, we added our share of the
negotiated option and joint venture agreement over the adjacent Ngasamo
deposit in April. This agreement with SAFINA a.s. has the potential to add up
to an additional 15 to 20 million tonnes of nickeliferous laterite, which we
believe to be very similar in mineralogy and nature to that at Dutwa. Under
the agreement with SAFINA, African Eagle is currently preparing to drill and
metallurgically test this potentially major increment to the global nickel
resource of a larger Dutwa project.
The draft Scoping Study prepared by GRD-Minproc was presented to African Eagle
in its final form in July. The study evaluated a number of potential
metallurgical processing routes and used modelling to optimize a mining plan
and cut-off grade for each process route using the resource determined
earlier, together with an upside component based on our expectations of the
input Ngasamo could make. Atmospheric tank leaching was determined to be the
most likely process route but heap leaching might also be viable.
Financial modelling of the technical outcomes showed that at today`s nickel
prices, the Dutwa project could be expected to generate a net cash-flow (EBIT)
of US$53 million to US$130 million per year over a mine life of 15 to 20
years, depending on the processing method.
In short, Dutwa would be profitable if it was in operation today.
With opportunities to improve the bottom line still further by optimising
revenue and reducing costs, there is a very clear case for further feasibility
study and the Company has commenced work on this. Initial focus will be
directed towards investigating ways to reduce costs, especially transport
costs, and increase revenues. We will also drill the adjacent Ngasamo deposit,
improve the resource model and refine the metallurgical information. A start
has been made on the additional metallurgical test work at Mintek Laboratories
in South Africa, including column and tank leach tests, sizing analysis and
physical test work to establish more definitively the optimum processing
routes.
Other Projects
Exploration on other projects has been limited to a VTEM helicopter
electromagnetic survey to search for "blind" copper zones at Mkushi. This was
co-funded by CGA Mining, our partner on the project. We also announced, in
May, an in-house deposit model showing potential for in excess of 700,000
ounces at Igurubi, based on interpretation of existing data on our most
advanced gold and copper projects.
The board is reviewing all alternatives with regard to these projects
including the outright sale, joint venture and other possible corporate
initiatives. The clear strategy is to realise value for the Company and its
shareholders from what are some very attractive properties.
Financing
The successful results from Dutwa, coupled with the recovery of metals prices
since January, encouraged us to raise new capital for the next stage of work.
More than half of our shares are held by private investors and we were very
keen to give as many shareholders as possible the opportunity to take part in
the capital raising, whilst keeping costs to a minimum. To do so, we
successfully worked through a raft of complex rules and regulations in Europe,
although we were not able to extend the Offer into South Africa. The Open
Offer to shareholders was in fact oversubscribed, and together with a small
Placing to institutional investors, we raised GBP3.37 million (gross).
The commitment of our shareholders to the company in supporting the financing
is a clear endorsement of the Board`s strategy to concentrate its effort on
the Dutwa nickel laterite project.
Together with the Company`s existing cash resources, (which, through our
effective cash conservation measures amounted to GBP1.5 million at June 30,
2009), the net proceeds of the Placing and Open Offer will, to a large extent,
be used to make a start on work leading to a feasibility study on Dutwa and
for general working capital.
In Conclusion
In summary then, 2009 to date has been about advancing Dutwa, with a resource
determined, metallurgical processing examined, additional potential resource
tonnage added, a positive scoping study completed and a full feasibility study
commenced. All these culminated in a successful placing and Open Offer to
shareholders completed in early August, which raised in excess of GBP3.3
million.
As I write this in mid September, the nickel price is up around $17,500, from
$11,000 at the end of April when I wrote the statement for the 2008 Annual
Report. With this rise, the feasibility study on Dutwa underway, and the
green shoots of a recovering global economy which I hoped for six months ago
now in evidence, I think we`re on track to deliver a much better 2009 than I
cautiously promised to shareholders in April.
For further information:
Mark Parker
Managing Director
African Eagle
+44 20 7248 6059
+44 77 5640 6899
Nicola Marrin
Seymour Pierce Limited, London
Nominated Adviser
+44 20 7107 8000
Charmane Russell
Russell & Associates, Johannesburg
+27 11 8803924
+27 82 8928052
Ed Portman / Leesa Peters
Conduit PR, London
+44 20 7429 6607
+44 77 3336 3501
Condensed Consolidated Statement of Comprehensive Loss
For the six months ended 30 June 2009
6 months to 6 months Year to 31
30 June to 30 December
2009 June 2008 2008
Unaudited Unaudited Audited
GBP GBP GBP
Depreciation expense (30,461) (40,914) (86,405)
Employee benefits expense (205,723) (545,192) (979,613)
Impairment of deferred exploration (145,071) (83,738) (4,442,563)
expenditure
Impairment of goodwill - - (103,188)
Other expenses (231,149) (252,760) (462,229)
Operating loss (612,404) (922,604) (6,073,998)
Finance costs:
Bank interest receivable 12,467 149,977 228,856
Foreign exchange (loss)/gain (14,037) (36,020) 363,183
Loss before tax (613,974) (808,647) (5,481,959)
Income tax expense - - -
Loss attributable to equity owners (613,974) (808,647) (5,481,959)
for the period
Other comprehensive (loss)/income:
Exchange differences on (1,751,419) 1,106,220 1,907,024
translation of foreign operations
Available for sale investments 617 (2,679) (4,495)
Other comprehensive (loss)/income (1,750,802) 1,103,541 1,902,529
for the period
Total comprehensive (loss)/income (2,364,776) 294,894 (3,579,430)
attributable to equity owners for
the period
Loss per share:
Basic/diluted loss per share from (0.3p) (0.4p) (2.6p)
total and continuing operations
Headline/diluted loss per share (0.2p) (0.4p) (1.0p)
from total and continuing
operations
All operations are continuing.
The accompanying notes form an integral part of these consolidated financial
statements.
Condensed Consolidated Statement of Financial Position
At 30 June 2009
30 June 2009 30 June 2008 31 Dec 2008
Unaudited Unaudited Audited
Note
GBP GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 78,538 160,798 122,246
Goodwill - 103,188 -
Available for sale 2,583 3,783 1,967
investments
Investment in associates 1,910,516 2,362,972 2,123,371
Investment in joint ventures 34,595 - 35,293
Deferred exploration costs 4 8,868,615 10,925,073 9,717,268
Total non-current assets 10,894,847 13,555,814 12,000,145
Current assets
Other receivables 140,393 747,774 137,636
Cash and cash equivalents 1,538,250 4,631,777 2,709,957
Total current assets 1,678,643 5,379,551 2,847,593
Total assets 12,573,490 18,935,365 14,847,738
LIABILITIES
Current liabilities
Other payables (350,546) (706,653) (269,218)
Total liabilities (350,546) (706,653) (269,218)
Net assets 12,222,944 18,228,712 14,578,520
EQUITY
Equity attributable to owners
of the parent:
Share capital 2,125,402 2,125,402 2,125,402
Share premium account 19,323,784 19,325,622 19,323,784
Merger reserve 705,723 705,723 705,723
Available for sale (13,077) (11,878) (13,694)
revaluation reserve
Foreign currency reserve (1,033,669) (83,054) 717,750
Retained losses (8,885,219) (3,833,103) (8,280,445)
Total equity 12,222,944 18,228,712 14,578,520
The accompanying notes form an integral part of these consolidated financial
statements.
Condensed Consolidated Statement of Changes in Equity
At 30 June 2009
Share Share Merger Availabl Foreign Retaine Total
capita premium reserv e for currenc d attribu
l account e sale y losses table
revaluat reserve to
ion owners
reserve Unaudit
ed
GBP GBP GBP GBP GBP GBP GBP
Balance at 31 2,123, 19,311, 705,72 (9,199) (1,189, (3,382, 17,560,
December 2007 402 622 3 274) 077) 197
Loss for - - - - - (808,64 (808,64
period 7) 7)
Other
comprehensive
income:
Exchange - - - - 1,106,2 - 1,106,2
differences on 20 20
translation of
foreign
operations
Available for - - - (2,679) - - (2,679)
sale
investments
Total - - - (2,679) 1,106,2 (808,64 294,894
comprehensive 20 7)
income for
the period
Transactions
with equity
owners for the
first half of
2008:
Issue of share 2,000 14,000 - - - - 16,000
capital
Share issue - - - - - - -
costs
Share based - - - - - 357,621 357,621
payments
Total 2,000 14,000 - - - 357,621 373,621
transactions
with equity
owners
Balance at 30 2,125, 19,325, 705,72 (11,878) (83,054 (3,833, 18,228,
June 2008 402 622 3 ) 103) 712
The accompanying notes form an integral part of these consolidated financial
statements.
Condensed Consolidated Statement of Changes in Equity (continued)
At 30 June 2009
Share Share Merger Available Foreign Retaine Total
Capit premium reserve for sale currenc d attribu
al account revaluation y Losses table
reserve reserve to
owners
Audited
GBP GBP GBP GBP GBP GBP GBP
Balance at 31 2,123 19,311, 705,723 (9,199) (1,189, (3,382, 17,560,
December 2007 ,402 622 274) 077) 197
Loss for year - - - - - (5,481, (5,481,
959) 959)
Other
comprehensive
loss:
Exchange - - - - 1,907,0 - 1,907,0
differences on 24 24
translation of
foreign
operations
Available for - - - (4,495) - - (4,495)
sale
investments
Total - - - (4,495) 1,907,0 (5,481, (3,579,
comprehensive 24 959) 430)
loss for the
year
Transactions
with equity
owners for
2008:
Issue of share 2,000 14,000 - - - - 16,000
capital
Share issue - (1,838) - - - - (1,838)
costs
Share-based - - - - - 583,591 583,591
payments
Total 2,000 12,162 - - - 583,591 597,753
transactions
with equity
owners
Balance at 31 2,125 19,323, 705,723 (13,694) 717,750 (8,280, 14,578,
December 2008 ,402 784 445) 520
The accompanying notes form an integral part of these consolidated financial
statements.
Condensed Consolidated Statement of Changes in Equity (continued)
At 30 June 2009
Share Share Merger Available Foreign Retain Total
Capit premiu reserve for sale currenc ed attribu
al m revaluation y Losses table
accoun reserve reserve to
t owners
Unaudit
ed
GBP GBP GBP GBP GBP GBP GBP
Balance at 31 2,125 19,323 705,723 (13,694) 717,750 (8,280 14,578,
December 2008 ,402 ,784 ,445) 520
Loss for - - - - - (613,9 (613,97
period 74) 4)
Other
comprehensive
loss:
Exchange - - - - (1,751, - (1,751,
differences on 419) 419)
translation of
foreign
operations
Available for - - - 617 - - 617
sale
investments
Total - - - 617 (1,751, (613,9 (2,364,
comprehensive 419) 74) 776)
loss for the
period
Transactions
with equity
owners for the
first half of
2009:
Issue of share - - - - - - -
capital
Share issue - - - - - - -
costs
Share based - - - - - 9,200 9,200
payments
Total - - - - - 9,200 9,200
transactions
with equity
owners
Balance at 30 2,125 19,323 705,723 (13,077) (1,033, (8,885 12,222,
June 2009 ,402 ,784 669) ,219) 944
The accompanying notes form an integral part of these consolidated financial
statements.
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2009
6 months 6 months to Year to 31
to 30 June 30 June December
2009 2008 2008
Unaudited Unaudited Audited
GBP GBP GBP
Operating activities
Loss before taxation (613,974) (808,647) (5,481,959)
Adjustments for:
Depreciation 30,461 40,914 86,405
Exchange (gain)/loss (24) 1,298 (8,141)
Loss on disposal of property, plant 150 - 1,839
and equipment
Interest received (12,467) (149,977) (228,856)
Impairment of deferred exploration 145,071 83,738 4,442,563
expenditure
Share-based payments 9,200 357,621 583,591
MCJV - Group share of the loss 7,634 - 15,385
Impairment of goodwill - - 103,188
Decrease/(Increase) in other (13,856) (320,049) 273,662
receivables
(Decrease)/Increase in other 66,682 (9,488) (116,230)
payables
Kujima - Group share of joint 762 - (1,540)
venture gain
Cash flows from operating activities (380,361) (804,590) (330,093)
Investing activities
Payments to acquire property, plant - (31,391) (43,892)
and equipment
Payments for deferred exploration (601,045) (1,571,051) (4,020,510)
expenditure
Interest received 12,467 149,977 228,856
Investments in associates (168,379) (194,519) (185,718)
Investments in joint ventures - - (33,753)
Cash flows used in investing (756,957) (1,646,984) (4,055,017)
activities
Financing activities
Proceeds from issue of share capital - 16,000 14,162
Cash flows from financing activities - 16,000 14,162
Net decrease in cash and cash (1,137,318) (2,435,574) (4,370,948)
equivalents
Cash and cash equivalents at 2,709,957 7,051,744 7,051,744
beginning of period
Exchange (gain)/loss (34,389) 15,607 29,161
Cash and cash equivalents at end of 1,538,250 4,631,777 2,709,957
period
The accompanying notes form an integral part of these consolidated financial
statements.
Notes to the Condensed Consolidated Half Year Financial Statements
For the six months ended 30 June 2009
1. Nature of Operations and General Information
African Eagle Resources plc ("African Eagle" or the "Company") is a public
limited company incorporated and domiciled in England. The Company is listed
on the Alternative Investment Market ("AIM") of the London Stock Exchange and
the Alternative Exchange of the Johannesburg Stock Exchange Limited (AltX),
and has consented to its shares being traded on the London PLUS Markets.
African Eagle is a holding company of a group of mineral exploration and
development companies (the "Group"). The principal activities of the Group are
the exploration and development of mineral deposits, especially nickel, gold,
and copper in Tanzania, Zambia and Mozambique.
The Group has sufficient financial resources following a successful fund
raising (see note 5) to finance its exploration activities and for this reason
the Directors continue to adopt the going concern basis in preparing the
financial statements.
African Eagle`s unaudited condensed consolidated half year financial
statements ("Financial Statements") are presented in pounds sterling (GBP),
which is also the functional currency of the parent company. The Financial
Statements were approved for issue by the Board of Directors on 23 September
2009.
2 Statement of Compliance and basis of preparation
The Financial Statements are for the six months ended 30 June 2009. They do
not include all the information required for full annual financial statements
and should be read in conjunction with the audited consolidated financial
statements of the Group for the year ended 31 December 2008, which were
prepared under International Financial Reporting Standards ("IFRS") as adopted
by the European Union ("EU").
The financial information is prepared under the historical cost convention and
in accordance with the recognition and measurement principles contained within
IFRS as endorsed by the EU.
The revised version of IASB`s key standard, IAS 1, Presentation of Financial
Statements, is mandatory for periods beginning on or after 1 January 2009 and
has been applied to these half year Financial Statements. The revised standard
introduces new terms for the individual Financial Statements. The adoption of
the standard does not affect the financial position of the Group. The
measurement and recognition of the Group`s assets, liabilities, income and
expenses is unchanged.
The comparative amounts in the Financial Statements include extracts from the
Company`s consolidated financial statements for the year ended 31 December
2008. These extracts do not constitute statutory accounts within the meaning
of Section 435 of the Companies Act 2006 (the "Act").
Notes to the Condensed Consolidated Half Year Financial Statements
For the six months ended 30 June 2009
3 Loss Per Share
(a) Basic loss per share
The basic loss per share is calculated as the loss for the period divided by
the weighted average number of shares in issue during the period. In
calculating the diluted loss per share potential ordinary shares such as share
options and warrants have not been included as they would have the effect of
decreasing the loss per share. Decreasing the loss per share would be anti-
dilutive.
Loss per share 6 months to 6 months to Year to
30 June 30 June 31 December
2009 2008 2008
GBP GBP GBP
Loss for the period (613,974) (808,647) (5,481,959)
Weighted average number of 212,540,128 212,394,524 212,467,525
shares in issue
Basic & diluted headline (0.3p) (0.4p) (2.6p)
loss per share
(b) Headline loss per share
Headline loss per share has been calculated in accordance with the Institute
of Investment Management and Research`s ("IIMR") Statement of Investment
Practice No.1 entitled `The Definition of Headline Earnings` and the South
African Institute of Chartered Accountants Circular 8/2007 entitled Headline
Earnings. The calculation of headline loss per share is net of tax at the UK
prevailing rate of 28%. No diluted headline loss per share has been calculated
as it would be anti-dilutive by reducing the headline loss per share.
Headline Loss
June 30, 2009 June 30, 2008 Dec 31, 2008
GBP GBP GBP GBP GBP GBP
Gross Net Gross Net Gross Net
Loss for (613,974) (808,647) (5,481,959)
the period
Adjusted
for:
(Less)/plus 150 108 83,738 60,291 1,839 1,324
profit/loss
on
sale of
fixed
assets
Plus 145,071 104,451 - 4,442,563 3,198,646
impairment
of
exploration
assets
Plus 7,634 5,344 - 15,385 11,077
Group share
of
associated
loss
Less 762 549 - (1,540) (1,109)
Group share
of Joint
Venture
Plus - - - 103,188 74,295
impairment
of Goodwill
Headline (503,522) (748,356) (2,197,725)
loss
Weighted 212,540,128 212,394,524 212,467,525
average
number of
shares in
issue
Basic & (0.2p) (0.4p) (1.0p)
undiluted
headline
loss per
share
Notes to the Condensed Consolidated Half Year Financial Statements
For the six months ended 30 June 2009
4 Intangibles
At 30 June 2009
Deferred Total
Exploration
costs
GBP GBP
Cost:
At 1 January 2009 9,717,268 9,717,268
Foreign currency exchange (1,326,422) (1,326,422)
differences
Additions 622,840 622,840
Impairment costs (145,071) (145,071)
At 30 June 2009 8,868,615 8,868,615
At 30 June 2008
Goodwill on Deferred Total
Consolidati Exploration
on costs
GBP GBP GBP
Cost:
At 1 January 2008 103,188 8,441,854 8,545,042
Foreign currency exchange - 694,451 694,451
differences
Additions - 1,872,506 1,872,506
Impairment costs - (83,738) (83,738)
At 30 June 2008 103,188 10,925,073 11,028,261
At 31 December 2008
Goodwill on Deferred Total
Consolidati Exploration
on costs
GBP GBP GBP
Cost:
At 1 January 2008 103,188 8,441,854 8,545,042
Foreign currency exchange - 1,758,217 1,758,217
differences
Additions - 3,959,760 3,959,760
Impairment costs (103,188) (4,442,563) (4,545,751)
At 31 December 2008 - 9,717,268 9,717,268
Notes to the Condensed Consolidated Half Year Financial Statements
For the six months ended 30 June 2009
5 Post-reporting date events
On August 7, 2009 the Company announced that the Open Offer to Eligible
Shareholders ("Open Offer") was oversubscribed. After scaling back, the Open
Offer raised Euro 2,499,939, equivalent to GBP2,136,700 at the then ruling
exchange rate of 1.17 Euro to GBP1, and accordingly, 53,417,500 Offer Shares
were issued at a price of 4p each. It also announced that a placing had been
completed by Seymour Pierce, of 30,804,500 new Ordinary Shares with new and
existing investors at a price of 4p each, raising gross proceeds of
approximately GBP1.2 million (the "Placing"). Following the issue of these new
Ordinary Shares there are 296,762,128 Ordinary Shares in issue.
The Directors subscribed for 1,222,500 shares in the Placing and 250,000
shares in the Open Offer.
Details of individual Directors` subscriptions and their consequent holdings
and percentages following the Placing and the Offer are as follows:
Subscription Subscription in Number of Percentage of
in Placing Offer Ordinary Enlarged Share
Shares held, Capital
Director after the
Placing and
Offer
John Park 250,000 - 6,926,801 2.33%
Euan 250,000 - 1,060,000 0.36%
Worthington
Mark Parker 312,500 225,000* 4,033,857 1.36%
Christopher 152,500 25,000 971,730 0.33%
Davies
Bevan 137,500 - 207,500 0.07%
Metcalf
Geoffrey 120,000 - 909,300 0.31%
Cooper
* to be held by Mr Mark Parker`s Self-Invested Personal Pension
25 September 2009
Sponsor
Nedbank Capital
Date: 25/09/2009 09:00:04 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.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
