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EXT - Extract Resources Limited - Prelisting Statement
Extract Resources Limited
("the Company" or "Extract ") with a primary listing on the Australian Stock
Exchange was granted permission by the Namibian Stock Exchange ("NSX") on 23
October 2009, subject to all regulatory approvals, to dual list 237,260,636
ordinary shares of no par value on the Development Board ("DevX") on 29 October
2009. Extract plc ticker on DevX will be EXT.
ISIN code: AU000000EXT7
The reasons for Extract wanting to dual list on the NSX are:
1. Extract is currently exploring, through its wholly owned subsidiary Swakop
Uranium (Pty) Ltd, for Uranium and wishes to increase public awareness of
Extract in Southern Africa
2. To provide a platform for raising future funds within Namibia and elsewhere
for uranium exploration
3. To facilitate Namibians being able to share wealth generation by facilitating
the trading of Extract shares on the NSX and to broaden Extract`s investor base
and international exposure.
4. To demonstrate Extract`s commitment towards Namibia and Extract`s
Namibianisation strategy.
5. To provide a platform for the trading of Extract`s shares locally by staff
and contractors who have or will receive options and / or shares in the Company.
Principal Activities
The Company`s primary business focus is in Namibia, in which it has over
2,500km2 under Exploration Licenses (EPL). While the projects have various
mineral occurrences, Extract`s main objective is the uranium (U3O8) EPL`s within
the alaskite belt that hosts the world class Rossing Mine to the north east of
Swakopmund.
Extract`s aim is to explore, evaluate, develop and produce U3O8 from its
advanced projects, as a source of fuel conversion for low-cost, environmentally
friendly nuclear power. In doing so, Extract maintains a policy of quality
environmental management and social and corporate responsibility in meeting its
business objectives.
Review of Operations
Extract`s Husab project, located in one of the world`s most prolific uranium
regions, has two defined uranium resources, being Rossing South and Ida Dome.
Recent focus has centred on the world class Rossing South, which from discovery
in February 2008, already has a 43-101 and JORC compliant resource of 267
million pounds of U3O8 at a grade of 487 ppm from 249 million tonnes within
Zones 1 and 2, which are both open along strike and down-dip. This has defined
it as the highest grade granite-hosted uranium deposit in Namibia (the grade is
more than 50% higher than Rio Tinto`s operating Rossing Mine) and ranks it as
the seventh top global uranium deposit by contained metal.
Preliminary cost estimates indicate that Zones 1 and 2 could support a
profitable, long life, low cost, low technical risk uranium mine producing 14.8M
lbs U3O8 per year, making it one of the world`s largest uranium mines.
Ongoing drilling is expected to define a much larger resource with 9 km of the
prospective 15 km R?ssing South trend still to be explored. Current drilling is
focussed on exploring mineralisation south of Zone 2, referred to as the newly
emerging Zone 3, and is yielding exceptional results. A drilling programme is
also underway at the Salem prospect, which is 10 km south of Zone 2 and is also
demonstrating highly encouraging intersections.
Ida Dome, the second key area within Husab, has a current JORC resource of
25.1million pounds U3O8 within the Garnet Valley, New Camp and Ida Central
zones. These areas have not as yet been closed off and are expected to continue
to grow along with future resource drilling on Holland`s Dome, which is also
within Ida Dome.
Tenements
The following tenements are 100% held by Swakop Uranium (Pty) Ltd and by Extract
Resources (Namibia) (Pty) Ltd, both of which are 100% owned subsidiaries of
Extract:
EPL 3439 expiring date 2 November 2009 (1)
EPL 3327 expiring date 2 November 2009 (2)
EPL 3328 expiring date 2 October 2010
EPL 3138 expiring date 19 April 2011
(1 & 2) - The substantive application for renewal of these licence were
submitted to the Minister of Mines and Energy on 30 July 2009 and 31 July 2009
respectively, and are still pending.
Investor risk factors
Any investment in the Securities of an exploration Company are subject to many
risks and uncertainties.
Some of the more significant risks, which will be included in the prelisting
statement in bold print, which affect an investment in the Company are:
- The continued ability of the Company to raise sufficient funds to meet the
needs of the Company in the future and to comply with the EPL continuing
expenditure requirements;
- renewal of tenement title in Namibia;
- political and sovereign risk in Namibia;
- public perception of nuclear power generation and competition from other
power sources;
- possible water and power limitations / restrictions on mining operations.
And
environmental regulations imposed by mining operations
Interests in minerals (referred to as "tenements" in Australia and Canada) in
Namibia are governed by legislation and are evidenced by the granting of
licences. Each licence is for a specific term and carries with it annual
expenditure and reporting commitments, as well as other statutory and ancillary
terms and conditions requiring compliance.
In July 2009, Coffey Mining Pty Ltd (Coffey Mining) was commissioned by Extract
to prepare an Independent Technical 43-43-101 Report ("Report`) on the uranium
resources of the R?ssing South - Zone 2 Prospect in Namibia, Southern Africa.
Extract has also revised the Rossing South - Zone 1 Resource estimate and the
detail for this estimate has been included in the Report which is available on
the Company website under http://www.extractresources.com.
As at 22 October 2009, the top 5 shareholders were as follows:
Entity Holding
Kalahari Uranium Limited, a 100% owned
subsidiary of Kalahari Minerals Plc 40.20%
Rio Tinto International Holdings Australia Pty Ltd 15.07%
Zero Nominees Pty Ltd 8.55%
SGJ Investments Pty Ltd 3.14%
National Nominees Limited 3.11%
Total 70.07%
As at 22 October 2009 the board of directors, including their holding in the
Company, were as follows:
Director Shares
Stephen Galloway
(Non-Executive Chairman) NIL
Neil MacLachlan
(Non-Executive Director) 220,000
John Main
(Non-Executive Director) 20,571
Inge Zaamwani-Kamwi
(Non-Executive Director) NIL
Stephen Dattels
(Non-Executive Director) NIL
Chris McFadden
(Non-Executive Director) NIL
Table for informational purposes
Date AUD - ZAR - USD - ZAR - USD - AUD
NAD NAD
20 October 6.78098 7.36567 1.08623
2009
30 June 6.34330 7.88213 1.24259
2009
31 December 6.53742 9.46492 1.44781
2008
30 June 7.65786 7.96449 1.04004
2008
Source: www.oanda.com
NOTE:
The abridged financial statements, in Australian Dollars, prepared for this
press release have been prepared from the full-year audited IFRS compliant
financial statements for the year ended 30 June 2009 with notation of subsequent
share issues. The full set of the aforementioned report is readily available for
inspection on the Company website.
INCOME STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009
Consolidated entity Parent entity
2009 2008 2009 2008
Revenue from 1,153,739 1,099,014 1,080,152 473,603
continuing
operations
Gain (loss) on 418,714 - - -
sale of assets
Employee 2 (4,534,206) (4,587,261) (2,601,197) (4,086,775)
benefits
expense
Administration 2 (2,849,070) (1,590,225) (2,288,016) (2,184,521)
and corporate
costs
Depreciation (191,673) (99,995) (43,817) (32,023)
expense
Amortisation (146,714) (318,119) - -
expense
Exchange rate - - 3,342,369 -
gain (loss)
Corporate costs - 2,429,873 -
recharged to
subsidiary
Exploration and 2 (19,776,969) (8,154,741) (43,159) (195,147)
development
costs written
off
Diminution in - - (28,061,570) (8,584,724)
subsidiaries
loans
(Loss) before (25,926,179) (13,651,327) (26,185,365) (14,609,587)
income tax
(expense)/
benefit
Income tax 14,186,666 - - -
benefit
(Loss) from (11,739,513) (13,651,327) (26,185,365) (14,609,587)
continuing
operations
(Loss) from - (475,947) - -
discontinued
operations
(Loss) for the 3 (11,739,513) (14,127,274) (26,185,365) (14,609,587)
year
attributable to
equity holders.
The above balance sheets should be read in conjunction with the accompanying
notes as per the Company website.
BALANCE SHEETS
AS AT 30 JUNE 2009
Consolidated Parent entity
2009 2008 2009 2008
ASSETS
Current assets
Cash and cash 28,940,8 32,394, 26,725, 31,107,
equivalents 20 138 042 233
Trade and other 1,248,17 1,724,0 19,916 74,520
receivables 8 88
Total current assets 30,188,9 34,118, 26,744, 31,181,
98 226 958 753
Non-current assets
Receivables - - 1,556,3 5,239,4
75 64
Available for sale - 2,786,1 - -
financial assets 26
Other financial - 777,625 62,752, 63,016,
assets 314 687
Property, plant and 977,618 484,137 175,353 124,450
equipment
Exploration, 4 99,662,4 99,737, - -
evaluation and 82 212
development
expenditures
Total non-current 100,640, 103,785 64,484, 68,380,
assets 100 ,100 042 601
Total assets 130,829, 137,903 91,229, 99,562,
098 ,326 000 354
LIABILITIES
Current liabilities
Trade and other 3,311,72 1,655,2 1,347,4 832,214
payables 2 90 99
Provisions 265,173 196,261 228,406 177,586
Total current 3,576,89 1,851,5 1,575,9 1,009,8
liabilities 5 51 05 00
Non-current
liabilities
Deferred tax 23,045,0 37,231, - -
liabilities 86 752
Rehabilitation 367,356 267,469 - -
provision
Total non-current 23,412,4 37,499, - -
liabilities 42 221
Total liabilities 26,989,3 39,350, 1,575,9 1,009,8
37 772 05 00
Net assets 103,839, 98,552, 89,653, 98,552,
761 554 095 554
EQUITY
Contributed equity 5 191,357, 175,346 191,357 175,346
880 ,734 ,880 ,734
Reserves 6 4,301,07 3,285,4 5,020,4 3,745,6
2 98 39 78
Accumulated (losses) 6 (91,819, (80,079 (106,72 (80,539
191) ,678) 5,224) ,858)
Total equity 103,839, 98,552, 89,653, 98,552,
761 554 095 554
The above balance sheets should be read in conjunction with the accompanying
notes as per the Company website.
STATEMENTS OF CHANGES IN EQUITY
FORT EH YEAR ENDED 30 JUNE 2009
Economic Entity
Issued Accumulated Option Available Foreign Total
Capital Losses Premium for sale Currency
Reserve financial Reserve
asset
Revaluation
Reserve
Balance 144,435,5 (65,952,404 790,106 - 22,132 79,295,41
at 1 82 ) 6
July
2007
Shares 30,911,15 - - - - 30,911,15
issued 2 2
during
the
year
(net of
costs)
Issue - - 2,955,5 - - 2,955,573
of 73
options
Asset - - - 235,596 - 235,596
revalua
tion
Foreign - - - - (717,909) (717,909)
currenc
y
gain/(l
oss)
Loss - (14,127,274 - - - (14,127,2
attribu ) 74)
table
to
members
Total 30,911,15 (14,127,274 2,955,5 235,596 (717,909) 19,257,13
recogni 2 ) 73 8
sed
income
and
expense
s for
the
year
Balance 175,346,7 (80,079,678 3,745,6 235,596 (695,777) 98,552,55
at 30 34 ) 79 4
June
2008
Shares 16,011,14 - - - - 16,011,14
issued 6 6
during
the
year
(net of
costs)
Issue - - 1,569,0 - - 1,569,080
of 80
options
Asset - - - (940,963) - (940,963)
revalua
tion
Foreign - - - - 387,457 387,457
currenc
y
gain/(l
oss)
Loss - (11,739,513 - - - (11,739,5
attribu ) 13)
table
to
members
Total 16,011,14 (11,739,513 1,569,0 (940,963) 387,457 5,287,207
recogni 6 ) 80
sed
income
and
expense
s for
the
year
Balance 191,357,8 (91,819,191 5,314,7 (705,367) (308,320) 103,839,7
at 30 80 ) 59 61
June
2009
Parent Entity
Balance at 1 144,435,5 (65,930,272) 790,106 - - 79,295,416
July 2007 82
Shares issued 30,911,15 - - - - 30,911,152
during the year 2
(net of costs)
Issue of - - 2,955,573 - - 2,955,573
options
Loss - (14,609,587) - - - (14,609,587)
attributable to
members
Total 30,911,15 (14,609,587) 2,955,573 - - 19,257,138
recognised 2
income and
expenses for
the year
Balance at 30 175,346,7 (80,539,859) 3,745,679 - - 98,552,554
June 2008 34
Shares issued 16,011,14 - - - 16,011,146
during the year 6
(net of costs)
Issue of - - 1,274,760 - - 1,274,760
options
Loss - (26,185,365) - - - (26,185,365)
attributable to
members
Total 16,011,14 (26,185,365) 1,274,760 - - (8,899,459)
recognised 6
income and
expenses for
the year
Balance at 30 191,357,8 (106,725,224 5,020,439 - - 89,653,095
June 2009 80 )
The above balance sheets should be read in conjunction with the accompanying
notes as per the Company website.
CASHFLOW STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009
Consolidated Parent entity
2009 2008 2009 2008
CASHFLOWS FROM
OPERATING
ACTIVITIES
Cash receipts 901,388 28,955 61,370 7,212
from operating
activities
Payments to (24,731,047) (11,802,978) (25,200,661) (11,918,091)
suppliers and
employees
Loan payments - - 3,502,913 -
received
Interest 1,146,974 504,803 1,073,387 473,603
received
Net cash (11,269,220) (20,562,991) (11,437,276)
(outflow)
inflow from (22,682,685)
operating
activities
CASHFLOWS FROM
INVESTING
ACTIVITIES
Payments for (605,428) (140,224) (94,720) (56,609)
property, plant
and equipment
Sale of assets 2,956,818 2,666,271 - -
Purchase of - - - -
tenements
Funds to bond 655,300 (14,329) 264,373 (14,329)
deposits
Intra-group - - - 862,474
loans
Forex gain - (1,065,674) - -
(loss) on intra-
group loans
Net cash inflow 3,006,690 1,446,044 169,653 791,536
/ (outflow)
from investing
activities
CASHFLOWS FROM
FINANCING
ACTIVITIES
Proceeds from 16,119,235 31,743,471 16,119,235 31,743,471
issue of shares
and other
equity
securities
Share issue (108,088) (305,511) (108,088) (305,511)
costs
Net cash inflow 16,011,147 31,437,960 16,011,147 31,437,960
from financing
activities
Net increase/ (3,664,848) 21,614,784 (4,382,191) 20,792,220
(decrease) in
cash held
Cash and cash 32,394,138 10,911,097 31,107,233 10,315,013
equivalents at
beginning of
period
Effects of 211,530 (131,743) - -
exchange rate
changes on the
balance of cash
held in foreign
currencies
Cash and cash 28,940,820 32,394,138 26,725,042 31,107,233
equivalents at
end of
reporting
period
The above balance sheets should be read in conjunction with the accompanying
notes as per the Company website.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009
Summary of significant accounting policies
The principal accounting policies adopted in the preparation of the financial
report are set out below. These policies have been consistently applied to all
the years presented, unless otherwise stated. The financial report includes
separate financial statements for Extract Resources Limited as an individual
entity and the consolidated entity consisting of Extract Resources Limited and
its subsidiaries.
Basis of preparation
This general purpose financial report has been prepared in accordance with
Australian Accounting Standards, other authoritative pronouncements of the
Australian Accounting Standards Board, Urgent Issues Group Interpretations and
the Corporations Act 2001.
Compliance with IFRS
The financial report of Extract Resources Limited also complies with
International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
Historical cost convention
These financial statements have been prepared under the historical cost
convention as modified by the revaluation of selected non-current assets, and
financial assets and liabilities for which the fair value basis of accounting
has been applied.
Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group`s accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial
statements.
Consolidated Parent Entity
2009 2008 2009 2008
Expenses
Loss for the year includes the following items that are
unusual because of their nature, size or incidence:
Employee options 967,426 378,922 679,572 378,922
Director fees 459,837 189,450 459,837 189,450
Director options 595,189 2,576,651 595,189 2,576,651
Legal fees 754,939 214,481 752,565 214,481
Major exploration
costs:
Contract geologists 79,879 541,971 - 3,952
Field support costs 904,083 341,586 683 3,229
and consumables
Drilling 11,545,953 5,353,199 - 55,762
contractors
Sample treatment 2,726,898 626,597 - 16,300
Earnings per share
Basic earnings per share Consolidated
2009 2008
Cents Cents
Loss from continuing operations (5.38) (7.31)
attributable to the ordinary equity
holders of the company
Loss from discontinued operation - (0.26)
Loss attributable to the ordinary (5.38) (7.57 )
equity holders of the company
Diluted earnings per share
The company`s potential ordinary shares, being its options
granted are not considered dilutive as the conversion of
these options would result in a decrease in the net loss per
share.
Reconciliations of earnings used in calculating earnings per share
Consolidated
2009 2008
Cents Cents
Basic and diluted earnings per share
Loss attributable to the ordinary (11,739,513) (13,651,327)
equity holders of the company used in
calculating basic and diluted
earnings per shares
Loss from discontinued operation - (475,947)
Loss attributable to the ordinary (11,739,513) (14,127,274)
equity holders of the company used in
calculating basic and diluted
earnings per share
Weighted average number of shares used as the denominator
Weighted average number of ordinary 218,072,392 186,612,598
shares used as the denominator in
calculating basic earnings per share
Adjustments for calculation of
diluted earnings per share:
Options 2,721,000 18,692,441
Weighted average number of ordinary 220,793,392 205,305,039
shares and potential ordinary shares
used as the denominator in
calculating diluted earnings per
share
Information concerning the classification of securities
Options
Options granted to employees under the Extract Resources Limited Employee
Option Plan are considered to be potential ordinary shares and have been
included in the determination of diluted earnings per share to the extent to
which they are dilutive. The options have not been included in the determination
of basic earnings per share.
Non-current assets - Exploration and evaluation expenditure
Consolidated Parent entity
2009 2008 2009 2008
A$ A$ A$ A$
Acquisition costs 99,284, 99,284, - -
671 671
Exploration costs 1,184,7 981,353 - -
30
Amortisation of exploration (853,55 (575,45 - -
licences 7) 0)
Foreign exchange differences 46,638 46,638 - -
Closing balance 99,662, 99,737, - -
482 212
Contributed equity
Consolidated Parent entity
2009 2008 2009 2008
A$ A$ A$ A$
Share capital
Ordinary shares - Fully 191,357 175,346, 191,357 175,346
paid ,880 734 ,880 ,734
Movements in ordinary share capital:
Date Details Number of Issue A$
shares price
1 July Opening Balance 212,720,41 175,346,734
2008 4
January Exercise of options 1,600,400 1,600,400
2009
February Exercise of options 2,637,176 2,409,020
2009
March 2009 Exercise of options 6,339,615 6,339,615
April 2009 Exercise of options 5,039,000 5,040,950
May 2009 Exercise of options 235,000 254,250
June 2009 Exercise of options 410,000 475,000
Less: Transaction costs - (108,089)
arising on share issue
30 June Balance 228,981,60 191,357,880
2009 5
Movements
after year
end
July to Exercise of options
October 1,724,000
2009
October Issued in relation to a
2009 non-renounceable pro-rata 6,555,031
offer of 1 to 35 which
closed on 24/9/2009
237,260,63
6
Employee options scheme
Information relating to the Extract Resources Ltd employee options scheme,
including details of options issued, exercised and lapsed (if applicable) during
the financial year and options outstanding at the end of the financial year as
available on the Company website.
Reserves and retained profits
Movement in reserves
Total (i) Asset (ii)Share (iii)Foreign
Revaluation Based Currency
reserve Payments Translation
reserve reserve
Balance at 1
July 2008 3,285,498 235,596 3,745,679 (695,777)
Movements
Assets re-
valued/sold (940,963) (940,963) - -
Options expense
1,569,080 - 1,569,080
Gain / (loss)
on translation 387,457 - - 387,457
of
foreign
controlled
entities
4,301,072 (705,367) 5,314,759 (308,320)
Retained
profits
Movements in
retained
profits were as
follows:
Balance 1 July (80,079,678) (65,952,404) (80,539,859) (65,930,272)
Net loss for (11,739,513) (14,127,274) (26,185,365) (14,609,587)
the year
Balance 30 June (91,819,191) (80,079,678) (106,725,224) (80,539,859)
Nature and purpose of reserves
The asset revaluation reserve is used to recognise:
the fair value of available for sale assets held by the group.
The share-based payments reserve is used to recognise:
the fair value of options issued to employees but not exercised
in the parent entity - the fair value of shares and options issued to employees
of subsidiaries.
(iii)Exchange differences arising on translation of the foreign controlled
entity are taken to the foreign currency translation reserve. The reserve is
recognised in profit and loss when the net investment is disposed of.
Matters subsequent to the end of the financial year since 30 June 2009
Included in the annual report and later announcements
Included in annual report
Two new directors have been appointed to represent significant stakeholders Rio
Tinto International Holdings Australia Pty Ltd (15.07%) and Polo Resources Ltd.
Kalahari Minerals plc has also been invited to appoint an additional director
subject to board approval.
Mr Peter McIntyre has tendered his resignation as Managing Director, with effect
15 September 2009.
Mr Peter Ironside has tendered his resignation, with effect 10 September 2009.
Capital raising for gross proceeds of A$91M by way of a non-renounceable rights
issue and an institutional placement was announced in August 2009.
The company announced an increase to Zone 1 resources, and announced a maiden
resource for Zone 2 at Rossing South.
Except for these items no other matter or circumstance has arisen since 30 June
2009 that has significantly affected, or may significantly affect:
The group`s operations in future financial years, or
The results of those operations in future financial years, or
The group`s state of affairs in future financial years.
Later announcements (*)
CEO for Swakop Uranium Norman Green appointed
(*) - for full announcements please refer to Company website
Corporate Information
ISIN code
AU000000EXT7
Australia
Office
Extract Resources Limited, 30 Charles Street, SOUTH PERTH WA 6151,
Phone: +61 (8) 9367 2111, Facsimile: +61 (8) 9367 2144
http://www.extractresources.com/
Auditor
BDO Kendalls Audit & Assurance (WA) Pty Ltd, 128 Hay Street, SUBIACO WA 6008
Phone: +61 (8) 9380 8499, Fax: +61 (8) 9380 8499
Share Registry
Link Market Services, Locked Bag A14, SYDNEY SOUTH NSW 1235,
Phone: +2 8280 7111, Facsimile: +2 9287 0303
Namibia
Offices
Extract Resources Limited,12th Floor Sanlam Building, Independence Avenue,
Windhoek, Namibia
Phone: +264 61 381 200, Fax: +264 61 227 879
Auditor
Grant Thornton Neuhaus, 12th Floor Sanlam Building, Independence Avenue
Windhoek, Namibia
Phone: +264 61 381 200, Fax: +264 61 227 879
Sponsor
IJG Securities (Pty) Ltd, Member of the NSX, 100 Robert Mugabe Avenue, Windhoek,
Namibia,
Phone: +264 61 383 500, Fax: +264 61 304 671
Date: 30/10/2009 17:48:17 Produced by the JSE SENS Department.
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