| Fri 20 Nov 2009, 15:03 | | MMH - Miranda - Condensed Consolidated Abridged Audited and Restated Annual |
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MMH
MMH
MMH - Miranda - Condensed Consolidated Abridged Audited and Restated Annual
Financial Results for the year ended 31 August 2009
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")
CONDENSED CONSOLIDATED ABRIDGED AUDITED AND RESTATED ANNUAL FINANCIAL RESULTS
FOR THE YEAR ENDED 31 AUGUST 2009
Highlights
* Significant milestone achieved with awarding of first mining
right at Sesikhona anthracite colliery
* Completion of first phase, open cast mining plan for Sesikhona
* Granting of a second mining right on Uithoek coal project expected
by early-2010
* Application for a third coal mining right at Burnside accepted
* Further extension and consolidation of KwaZulu Natal coal interests
* Development plan for KZN coal assets targeting a mine a year for the
next 5 years
* Expansion of Botswana diamond interests through the Jwaneng project
* New Tete gold venture secured in Mozambique
* Successful completion of third capital raising of R17.2 million through
private placing with black-owned Yakani Resources
* Private placing simultaneously strengthening Group`s BEE credentials
CONDENSED CONSOLIDATED BALANCE SHEETS
Group Group Company Company
Audited Audited Audited Audited
Restated
2009 2008 2009 2008
R`000 R`000 R`000 R`000
ASSETS
Non-current assets 346,574 327,613 30,722 30,797
Property, plant and 9,157 6,639 7 81
equipment
Intangible assets 334,753 321,067 - -
Investments in - - 30,716 30,716
subsidiaries
Investments in 0 (92) - -
associates
Other financial assets 2,664 - - -
Current assets 16,323 21,387 52,968 37,639
Loans to group companies - - 37,574 17,343
Trade and other 1,193 905 324 -
receivables
Cash and cash 15,130 20,482 15,070 20,296
equivalents
Total Assets 362,897 349,000 83,690 68,436
EQUITY AND LIABILITIES
Equity (attributable to 348,778 341,579 83,566 66,344
equity holders of
parent)
Share capital 91,812 74,645 91,812 74,645
Reserves 2,050 - - -
Retained 255,085 266,990 (8,246) (8,301)
earnings/(Accumulated
loss)
Minority interest (169) (56) - -
Non-current liabilities 11,597 3,614 - -
Interest bearing 2,783 3,614 - -
obligations
Deferred tax 923 - - -
Environmental 7,892 - - -
rehabilitation
provisions
Current liabilities 2,522 3,808 124 2,092
Loans from group - - - 1,884
companies
Loans from shareholders 100 1,004 - -
Other financial 100 - - -
liabilities
Interest bearing 868 1,614 - -
obligations
Operating lease 22 - - -
liabilities
Trade and other payables 1,432 1,190 124 208
Total Liabilities 14,119 7,422 124 2,092
Total Equity and 362,897 349,000 83,690 68,436
Liabilities
Closing number of shares 247,400 215,131
in issue (`000)
Net asset value per 141.0 158.8
share (cents)
Net tangible asset value 5.7 9.5
per share (cents)
CONDENSED CONSOLIDATED INCOME STATEMENT
Group Group Company Company
Audited Audited Audited Audited
Restated
2009 2008 2009 2008
R`000 R`000 R`000 R`000
Revenue - 372 - -
Cost of sales - (298) - -
Gross profit - 74 - -
Other income - - - -
Operating expenses (11,933) (5,992) (1,760) (2,462)
Operating loss (11,933) (5,919) (1,760) (2,462)
Investment revenue 1,815 2,108 (1,815) 2,108
Income/(loss) from equity - (92) - -
accounted investments
Finance costs (630) (423) - (229)
Profit/(loss) before (10,748) (4,325) 55 (582)
taxation
Taxation (126) - - -
Profit/(loss) for the year (10,874) (4,325) 55 (582)
Less minority interest 6 (18)
Attributable to (10,868) (4,344) 55 (582)
shareholders
Loss on sale of assets 165 -
Headline earnings (10,703) -
Weighted average number of 240,042 201,131
shares in issue (`000)
Earnings/(loss) per share (4.5) (2.1)
(cents)
Headline earnings/(loss) (4.5) (2.1)
per share (cents)
There was no dilutive effect on earnings and headline earnings per share.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
Group Group Company Company
Audited Audited Audited Audited
Restated
2009 2008 2009 2008
R`000 R`000 R`000 R`000
Cash flows from operating
activities
Cash used in operations (10,197) (5,655) (2,162) (2,695)
Interest income 1,815 2,108 1,815 2,108
Finance costs (630) (423) - (229)
Net cash from operating (9,012) (3,969) (347) (816)
activities
Cash flows from investing
activities
Purchase of property, (1,266) (6,855) - (85)
plant and equipment
Purchase of other (13,857) (5,134) - -
intangible assets
Increase in investments in (1,000) (500) 0 -
subsidiaries
Loans advanced to group - - (22,046) (10,514)
companies
Sale of financial assets (2,664) 8 - 8
Net cash from investing (18,787) (12,481) (22,046) (10,591)
activities
Cash flows from financing
activities
Proceeds on share issue 17,167 19,684 17,167 19,684
Repayment of other (1,035) - - -
financial liabilities
Movement in environmental 7,892 - - -
rehabilitation provisions
Finance lease payments (1,577) 5,228 - -
Net cash from financing 22,447 24,912 17,167 19,684
activities
Total cash movement for (5,352) 8,462 (5,226) 8,277
the year
Cash at the beginning of 20,482 12,020 20,296 12,019
the year
Total cash at end of the 15,130 20,482 15,070 20,296
year
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Share Total Re-
share valuation
capital premium capital reserve
Group R`000 R`000 R`000 R`000
Opening balance as 1,871 53,090 54,961 284,522
previously reported
Adjustments
Prior year restatement - - - (284,522)
3.2
Balance at 01 September 1,871 53,090 54,961 -
2007 as restated
Changes in equity
Loss for the year - - - -
Issue of shares 280 20,440 20,720 -
Share issue costs - (1,036) (1,036) -
Business combinations - - - -
Total changes 280 19,404 19,684 -
Opening balance as 2,151 72,494 74,645 284,522
previously reported
Adjustments
Prior year restatement - - - (284,522)
3.2
Balance at 01 September 2,151 72,494 74,645 -
2008 as restated
Changes in equity
Revaluation gain/(loss) - - - 2,050
Loss for the year - - - -
Total recognised income - - - 2,050
and expenses for the
year
Issue of shares 323 16,845 17,167 -
Business combinations - - - -
Total changes 323 16,845 17,167 2,050
Balance at 31 August 2,474 89,338 91,812 2,050
2009
Total
attributable
to equity
Accumulated holders of
profit/ the group/ Minority Total
(loss) company interest equity
Group R`000 R`000 R`000 R`000
Opening balance as (11,679) 327,803 (73) 327,730
previously reported
Adjustments
Prior year restatement 283,513 (1,009) - (1,009)
3.2
Balance at 01 September 271,833 326,795 (73) 326,722
2007 as restated
Changes in equity
Loss for the year (4,344) (4,344) 18 (4,325)
Issue of shares - 20,720 - 20,720
Share issue costs - (1,036) - (1,036)
Business combinations (500) (500) (1) (502)
Total changes (4,844) 14,840 17 14,857
Opening balance as (20,799) 338,368 (551) 337,817
previously reported
Adjustments
Prior year restatement 287,788 3,267 495 3,762
3.2
Balance at 01 September 266,990 341,635 (56) 341,579
2008 as restated
Changes in equity
Revaluation gain/(loss) - 2,050 - 2,050
Loss for the year (10,868) (10,868) (6) (10,874)
Total recognised income (10,868) (8,818) (6) (8,824)
and expenses for the
year
Issue of shares - 17,167 - 17,167
Business combinations (1,037) (1,037) (107) (1,144)
Total changes (11,905) 7,312 (113) 7,199
Balance at 31 August 255,085 348,947 (169) 348,778
2009
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Share Total Re-
share valuation
capital premium capital reserve
Company R`000 R`000 R`000 R`000
Balance at 01 1,871 53,090 54,961 -
September 2007
Changes in equity
Loss for the year - - - -
Issue of shares 280 20,440 20,720 -
Share issue costs - (1,036) (1,036) -
Total changes 280 19,404 19,684 -
Balance at 01 2,151 72,494 74,645 -
September 2008
Changes in equity
Profit for the year - - - -
Issue of shares 323 16,845 17,167 -
Total changes 323 16,845 17,167 -
Balance at 31 August 2,474 89,338 91,812 -
2009
Total
attributable
to equity
Accumulated holders of
profit/ the group/ Minority Total
(loss) company interest equity
Company R`000 R`000 R`000 R`000
Balance at 01 (7,719) 47,242 - 47,242
September 2007
Changes in equity
Loss for the year (582) (582) - (582)
Issue of shares - 20,720 - 20,720
Share issue costs - (1,036) - (1,036)
Total changes (582) 19,102 - 19,102
Balance at 01 (8,301) 66,344 - 66,344
September 2008
Changes in equity
Profit for the year 55 55 - 55
Issue of shares - 17,167 - 17,167
Total changes 55 17,222 - 17,222
Balance at 31 August (8,246) 83,566 - 83,566
2009
No segmental reporting has been presented as the business has not advanced to a
stage where accurate and meaningful segmental reporting can be presented.
COMMENTARY
1. STATEMENT OF COMPLIANCE
These condensed financial statements for the year ended 31 August 2009 are
a summary of the Company`s unqualified audited financial statements.
2. AUDIT REPORT
The consolidated financial statements for the year have been audited by the
company`s independent auditors, PKF (Pretoria) Inc whose unqualified audit
report is available for inspection at the group`s registered address.
3. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The consolidated annual financial statements set out in this report have
been prepared in accordance and comply with the statements of International
Financial Reporting Standards and are presented in terms of disclosure
requirements set out in IAS34-Interim Financial Reporting, the Listings
Requirements of the JSE Limited and the South African Companies Act,1973.
The annual financial statements have been prepared on the historical cost
basis, other than aircrafts which are carried at a revalued amount, and
incorporate the principal accounting policies set out below. These
accounting policies are consistent with the previous period, other than the
policy relating to aircraft and mineral rights presented in these
consolidated financial statements by all group entities.
3.1 Changes in accounting policy
3.1.1 IAS 38 Intangible assets
During the year, the company changed its accounting policy with respect to
the treatment of intangible assets relating to mineral rights. The board
has decided to change to the historical cost basis to enhance industry
comparability. The change in accounting policy is applied retrospective.
The changes in accounting policy have no financial effect on the annual
financial statements for the year ended 31 August 2008.
3.1.2 IAS 16 Property, plant and equipment
During the year, the company changed its accounting policy with respect to
the accounting treatment of aircraft. The company has adopted the
revaluation model for all property, plant and equipment classified as
aircraft. The change in accounting policy is applied prospectively.
The aggregate effect of the changes in accounting policy on the annual financial
statements for the year ended 31 August 2009 is as follows:
Group Group Company Company
2009 2008 2009 2008
R`000 R`000 R`000 R`000
Balance Sheet
Property, plant and equipment 2 847 - - -
Reserves (2 050) - - -
Deferred taxation (797) - - -
3.2 Restatement
The group has reviewed its interpretation of IFRS 6 "Exploration for and
Evaluation of Mineral Resources", and as a result has amended the treatment
of exploration and evaluation expenses. According to IFRS 6 "Exploration
for and Evaluation of Mineral Resources", if the entity has obtained the
legal rights to explore a specific area it may capitalise all exploration
and evaluation expenses until technical feasibility and commercial
viability of extracting a mineral resource are demonstrable. In the past
exploration and evaluation cost was expensed.
The group also reviewed their accounting for business combinations and on
the basis of non-compliance with IFRS 3 and IAS 38 on the business
combinations in 2005 to 2008 the group restated its accounts.
The amendments resulted in the following adjustment to the financial statements:
Group Group Company Company
2009 2008 2009 2008
R`000 R`000 R`000 R`000
Balance Sheet
Intangible assets - 14,234 - -
Investments in associates - 136 - -
Goodwill - (10,609 - -
)
Reserves - 284,522 - -
Retained earnings - (287,78 - -
8)
Minority interest - (495) - -
Income Statement
Other income - 548 - -
Operating expenses - (5,682) - -
Income from equity accounted - (136) - -
investments
Minority interest - 495 - -
As a result of the above mentioned restatement, both the loss and headline
loss per share for 2008 declined from 4.5 cps to 2.1 cps. Net asset value
per share increased marginally from 157.0 cps to 158.8 post-restatement
(owing to the capitalisation of exploration expenses), while the effect on
the net tangible asset value of the Group for 2008 was negligible.
4. CORPORATE GOVERNANCE
The Company subscribes to and complies in all material aspects with the
Code on Corporate Governance Practices and Conduct as contained in the King
II Report on Corporate Governance.
5. BEE
It is a primary thrust of Miranda`s to achieve empowerment at project
level, in order to establish an enabling environment, as envisaged by the
Mining Charter and the MPRDA. Miranda`s Sesikhona coal project remains a
prime example of the Group`s approach in this regard. Leveraging the
Sesikhona Community Trust, which holds a 12% stake in the Sesikhona
project, the company consults with the local Verdriet community on all
related socio-economic development initiatives. Our contribution to the
Verdriet community includes technical skills development and training,
combined with social development initiatives. It is our goal to ensure that
each community impacted by our work reaps the resulting financial and
skills development benefits.
During the year, Miranda further strengthened its empowerment credentials
by welcoming Yakani on board as a 34.9% shareholder. The investment was
facilitated through an initial 15% private placing of shares (see paragraph
10.2) with Yakani Resources (Pty) Ltd, a wholly-owned subsidiary of Yakani
Group (Pty) Ltd, whereafter Yakani acquired the remainder of the Miranda
shares in the open market. Complementing the Group`s BEE initiatives, which
focus on implementing broad-based structures at operational subsidiary
level, the investment creates the platform for a strategic association
between two active players in mining and exploration with a similar
resource focus, namely coal, diamonds, precious and industrial minerals.
6. SUSTAINABILITY AND TRANSFORMATION
Miranda recognises that resources will be exploited through its business
activities, but the Company aims to leave behind fully rehabilitated areas
and communities from an environmental perspective. In terms of human
capital, the Group is committed to training people from within the
communities where it operates - building community skills development and
employment equity into contractual terms of agreement. Miranda considers it
as its responsibility to ensure that sustainable practices, in terms of
environmental and labour practices, downstream economic development and
other social responsibilities are applied.
7. BOARD OF DIRECTORS
During the period under review, Wayne Ison resigned as financial director
and Adriaan Botha was appointed in his stead. No further changes were made
to the board.
8. DIRECTORS` REMUNERATION
Total remuneration paid to non-executive directors for the year under
review amounted to R0.05 million (2008: R nil). Total remuneration paid to
executive directors for the year under review amounted to R1.48 million
(2008: R nil). In prior years, the company`s executive team was contracted
by virtue of a management company.
9. OPERATIONAL REVIEW
During the period under review, Miranda narrowly focused operational
activities on developing its KwaZulu Natal ("KZN") coal prospects. At the
same time, exploration programs were re-scheduled and cash conserved in the
Group`s other business divisions of diamonds, gold, and base and industrial
minerals. This was done partly in response to the challenging financial
market environment of the last 12 months, and partly because the KZN coal
projects were already the most advanced in the Group, with the shortest
route to cash flow generation.
As a consequence, the period under review has seen the Group advance
strongly towards commissioning its first coal mine, with the granting of
its first mining right at Sesikhona a significant milestone and highlight
for the board. In addition, all the groundwork has been completed for the
granting of a second mining right (Uithoek) by early-2010 and the Group`s
application for a third mining right at Burnside was accepted by the
Department of Mineral Resources ("DMR"). The development plan for the coal
project pipeline over the next three years has also become significantly
more evident as projects have progressed up the exploration and mining
value curve.
9.1 Coal Division
Miranda Coal, which houses all of the Group`s coal projects, has a great
deal of confidence in the investment opportunity presented by the
exploration, development and mining of coal in northern KZN. It has set
itself the exciting target of opening a new coal mine every year for at
least the next five years. Much of management`s efforts have gone into
building up critical mass through the drilling and development of existing
assets and through the acquisition of some significant new prospects.
Miranda Coal is today the holder of mining or prospecting rights over more
than 20 different coal projects covering about 58,000ha of land in KZN
alone. Including Mpumalanga and the Northern Province, Miranda Coal is
involved in exploration on land spanning more than 73,000ha. Management is
constantly considering further potential acquisitions of merit.
* Sesikhona, Dwala and Majestic Projects
Miranda Coal was granted a mining right for its first colliery, Sesikhona,
in April 2009. Mining operations are expected to commence during the first
quarter of 2010, subject to securing an off-take agreement. Mining
consultants, TWP Projects, have completed the first phase of the Sesikhona
mine plan design, including a production schedule and overburden profile.
Out of the mine`s SAMREC-compliant measured reserve of 5.4mt, a total of
1.6mt have been identified for the first phase of open-cast mining, giving
this phase a three-year life at a production rate of 40,000 saleable tons
per month. Interest has been received for selling the premium quality
anthracite unwashed on a free-on-truck, ex-pit basis, but more likely is
that the coal will be toll-washed for a SADC and/or overseas customer base.
Given that the first phase is opencast, Sesikhona has low upfront capex
requirements.
Management will be in a position to consider a number of development
options during the course of the next twelve months, subject to the
exploration results on Sesikhona itself, as well as on the adjacent Dwala
and nearby Majestic projects. The Sesikhona mining plan will be extended
into an underground operation depending on the results of the ongoing
drilling program. Developing the underground sections will not only extend
the life of the mine, but will also provide flexibility in terms of the
final product to be delivered as well as in maintaining Sesikhona`s
committed production targets.
The Dwala project extends Sesikhona in a western direction towards the
highly productive (and now closed) Durnacol colliery. Previously, 10
boreholes were drilled on one of the farms at Dwala and two seams
identified: the top seam of between 0.8m and 2.0m was intersected at depths
of 17m to 35m, while the bottom seam of 0.6m to 1.9m was located at depths
of between 19m and 37m. Miranda`s first phase exploration program has
commenced in the area and is aimed at confirming the continuation of the
coal seams. The results are expected during the first quarter of 2010.
In July 2009, exploration commenced at Majestic, located approximately 8km
south of Sesikhona. To date 17 holes have been drilled, of which 10
intersected both the Top and Bottom Seams (with the no-coal holes
apparently intersecting previously mined areas). Preliminary results
indicate an underground resource with the Top Seam starting at 62m and
reaching a maximum thickness of 1.1m with an average of 0.9m. The Bottom
Seam reaches a maximum thickness of 2.2m with an average of 1.5m. A CPR is
being prepared on Majestic and is expected before the end of 2009.
* Uithoek and Burnside Projects
With the Uithoek mining right application having been accepted by the DMR,
and the EIA completed and submitted by the Company, granting of the mining
right is expected by early-2010 at the latest. The project holds a SAMREC-
compliant measured reserve of 6.7mt of lean and bituminous coal, with the
latter having coking properties. An additional 10 holes is planned before
year-end to improve coal quality and washability data, with a view to
commissioning a pre-feasibility study to confirm management`s internal
assessment of the project`s viability. Production of a coking coal or
metallurgical export product, and of a middling product for local power
stations, is targeted for the second half of 2010. The exploration program
includes considering additional drilling to extend the resource in a
southwestern direction.
Burnside, which is contiguous to Uithoek, forms a significant focus for
Miranda Coal with its large 35.5mt SAMREC resource. The mining right
application was submitted and has been accepted during the year under
review. The Company has to submit its EIA by April 2010. Production is
targeted to commence about 12 months after Uithoek, and many of the
infrastructural decisions will be made with both projects in mind. Drilling
activities for the period under review fell short of the exploration plan
due to access problems in certain areas. These are being addressed and a
further 23 holes are planned for early in 2010 to bring the open-pittable
section to a measured resource status. This will also allow for more
detailed analysis to be done on determining the specific markets and other
mining modifying factors, and will lead into a pre-feasibility during the
latter part of 2010.
* Boschhoek and Wasbank Projects
Boschhoek is expected to represent the next significant step in the scaling
up of Miranda Coal`s operations. Boschhoek`s capital expenditure is likely
to exceed any of the projects already mentioned, with the coal resource
being both larger and deeper, and mining operations likely to be mostly
underground. A number of alternatives are being considered for optimal
development of the resource, including accessing it through decline shafts
from either or both of the adjacent Burnside and Uithoek projects. The
Company has experienced some delays with obtaining access to one farm, but
this is receiving management`s attention in anticipation of the next phase
of the exploration program. With 141 boreholes drilled previously, the
current in situ resource of 52.3mt holds SAMREC indicated status.
Boschhoek`s semi-soft and hard coking coal are of a premium quality and
highly sought after for industrial applications. The 2010 exploration
program will consist of a further 10 holes, which is being planned to
improve coal washability data. A fairly substantial infill drilling program
of up to 50 holes is also being planned to upgrade the resource to measured
status.
The timeline on the Wasbank project, which is adjacent to both Boschhoek
and Uithoek, is expected broadly to mirror that of Boschhoek. Although its
scale of operations will be significantly smaller, the viability of the
Wasbank project is expected to stem from its sharing of the infrastructure
and beneficiation capacity of the other Miranda Coal operations in the
area.
9.2 Diamond Division
Miranda Diamonds continued to develop the Group`s diamond exploration
interests during the 2009 financial year in spite of a generally
unfavourable trading and investment environment for the commodity. At a
time when the economic downturn and low price of diamonds made life
difficult for many of the junior diamond mining and exploration companies,
management took the decision to downscale immediate exploration activities
in this division without any significant opportunity cost. Whilst examining
the distressed diamond property landscape for opportunities to bulk up its
portfolio further, Miranda is pleased to have expanded its Botswana
interests through its exciting Bowa Joint Venture. Bowa has been granted
two prospecting licenses over two adjacent blocks covering 101,930ha in the
Kweneng Province about 2km north of Jwaneng Diamond mine. The area is a
foremost diamond address in Botswana and previously saw significant
exploration attention from various companies, with the majority of the work
undertaken by De Beers since the 1960s.
Albeit on at a somewhat muted level, exploration activities during the
period under review provided management with further evidence of the
significant potential of a number of prospects. Among these count the
Group`s prospecting rights to alluvial and potential kimberlite prospects
in the North West and Northern Cape provinces of South Africa (the
Turffontein, Blaaubank and Lauraville projects), along with the Jwaneng and
Mochudi prospects in Botswana.
9.3 Gold and Industrial Minerals
Although exploration by the gold division was also somewhat curtailed
during the period under review, Miranda managed to secure its first formal
venture into Mozambique through the Tete joint controlled operation. The
Tete project involves dredging on the banks of the Zambezi River to assess
river bank samples for alluvial sands containing gold and/or other
significant minerals. An application for a prospecting licensing is
planned, subject to the results of further desktop geological studies and
the analysis of the first sample concentrate that has been obtained. The
Group is looking to make further acquisitions in the current market
environment to develop the Miranda Gold brand towards critical mass.
In its base and industrial minerals division, the Group holds a number of
highly prospective properties ranging from clay and andalusite to the
Rozynenbosch lead, zinc, copper and silver project in the Northern Cape.
Management is currently evaluating a number of these prospects, including
with a view to getting certainty on the legal status of the mining titles
the Group holds (refer to the litigation statement). The Group`s model to
develop these assets remains entering into subcontracting and/ or joint
venture arrangements with appropriate partners.
10. FINANCIAL REVIEW
10.1 Financial results
As at 31 August 2009, the net asset value and net tangible asset value of
the Group amounted to R348.8 million and R14.0 million, respectively (2008:
R341.6 million restated and R20.5 million restated). This was equivalent to
141.0 cents per share ("cps") and 5.7 cps (2008: 158.8 cps restated and 9.5
cps restated).
With no projects yet in production, the Group showed no revenue for the
year (2008: R0.4 million). Operating expenses amounted to R11.9 million
(2008: R6.0 million restated). The resultant net loss for the period
increased to R10.9 million (2008: R4.3 million restated), equivalent to a
loss of 4.5 cps (2008: loss of 2.1 cps restated). These results are
consistent with management`s increased focus on developing, in particular,
the Group`s coal project portfolio.
10.2 Private placing
In line with its strategy of "just-in-time" capital raising, the company
completed its third capital raising exercise during the period under
review. Strategically, the issue of shares for cash to black-owned Yakani
Resources (Pty) Ltd simultaneously also strengthened the Group`s BEE
credentials. An amount of R17.2 million was raised through the issue of
32.3 million new Miranda shares at a price of 53.2 cents per share ("cps").
The shares were issued under the board`s general authority. The proceeds of
the private placing have enabled the company to continue with exploration
objectives on its coal projects and to fast-track targeted projects through
to eventual mining.
11. GROUP PROSPECTS
The board is very satisfied with the manner in which the Group has managed
its cash resources at a time when the financial markets are taking a
cynical view on the ability of junior mining and exploration companies to
survive the liquidity crunch. Not only should the decisions of 2009 enable
the Group to start generating its own cash flows during the 2010 financial
year from the Sesikhona colliery, but they have also placed management in a
position to consider opportunities resulting from the financial fall-out.
Management is further considering a number of options to unlock the
inherent value of Miranda Coal`s portfolio of coal assets, including by
pegging and benchmarking the value for Miranda shareholders by means of a
see-through transaction at the Miranda Coal level. Shareholders will be
advised in the event of progress in this regard.
12. LITIGATION STATEMENT AND POST-BALANCE SHEET EVENT
Miranda had applied for the conversion to "new order" rights of certain
mineral titles and rights previously acquired from Goldfields Limited, in
the manner prescribed by the Minerals and Petroleum Resources Development
of 2002 ("MPRDA"). The group was subsequently advised by the DMR that
certain of these applications had been refused. Consequently, the board of
Miranda exercised its right in terms of the MPRDA to appeal against these
decisions, which the board believes to be without foundation. The appeals
were lodged with the DMR and are at various stages in the legal process.
Some appeals are still being evaluated, during which time the DMR may not
grant any of the affected rights to third parties. In other instances, such
as Rozynenbosch, the appeals have been unsuccessful.
In the case of Rozynenbosch, the Company filed a claim in the amount of
R284 million regarding the potential loss of mineral rights on Rozynenbosch
and lodged an application for compensation. Summons was issued against
government on 18 November 2009 in this amount. The board has decided to
follow this course of action as it represents the only appropriate legal
means of protecting its rights and ensuring that it be compensated by
government in the event of the expropriation of its mining title.
At this point in time, the directors have assessed the most likely outcome
of the legal process to be either that the "new order" right is awarded to
Miranda Minerals or that it is awarded compensation for having been
expropriated. This view has been based on legal opinion obtained, the
judgment handed down in the Pretoria High Court on 6 March 2009 in the case
of Agri SA versus The Minister of Minerals and Energy, the intention and
substance of the MPRDA and other applicable legislation, as well as the
constitution of SA. As a consequence, a negligibly low probability has been
allocated to Miranda not being awarded either the right or the
compensation. The board is monitoring the situation on an ongoing basis and
will make the appropriate announcements to shareholders as soon as any of
the substantive facts related to the matter change. Should the board at a
later stage decide to impair the Rozynenbosch mineral right, it could
result in an impairment of up to R284 million.
13. 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 company will continue with its strategy of "just-in-time"
capital raising as and when required to fund the exploration program until
such time as cash flow requirements are being met from internally generated
funds.
14. DIVIDENDS
No dividends were recommended or declared for the financial year under
review (2008: nil).
15. EVENTS SUBSEQUENT TO THE REVIEW PERIOD
No material events have occurred since the accounting date and the date of
this report.
16. NOTICE OF THE ANNUAL GENERAL MEETING
Shareholders are advised that annual reports will be posted to shareholders
no later than 30 November 2009, and the Annual General Meeting of the
company is to be held in the boardroom at The Greens Office Park, Ground
Floor, Pecanwood Building, Charles de Gaulle Crescent, Highveld, Techno
Park, 0157 on 15 January 2010 at 10:00.
For and on behalf of the Board
AR Thompson RJ Nel AM Botha
Chairman Chief Executive Officer Financial Director
20 November 2009
CORPORATE INFORMATION:
www.mirandaminerals.com
Sponsor:
PricewaterhouseCoopers Corporate Finance (Proprietary) Ltd, 2 Eglin Road,
Sunninghill, 2157
(Private Bag X36, Sunninghill, 2157)
Corporate adviser:
Touchstone Capital (Proprietary) Ltd, Ground Floor, Pecanwood Building, The
Greens Office Park, Charles de Gaulle Crescent, Highveld Techno Park, Centurion
(PO Box 36254, Menlo Park, 0102)
Transfer secretaries:
Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Telephone number: 011 370 5000
Company secretary and place where registers are kept:
Fusion Corporate Secretarial Services (Pty) Ltd,
represented by Melinda van den Berg,
Nr 56 Regency Road, Route 21 Corporate Park,
Nellmapius Drive, Irene, Centurion
(PO Box 68528, Highveld, 0169)
Telephone number: 082 896 0548
Company registered office:
Ground Floor, Pecanwood Building, The Greens Office Park,
Charles de Gaulle Crescent, Highveld Techno Park, Centurion
Company Postal Address:
PO Box 1045, North Riding, 2162
Company Contact Numbers:
Telephone: 012 665 4200
Fax: 012 665 4258
Email: info@mirandaminerals.com
Date: 20/11/2009 15:03:02 Produced by the JSE SENS Department.
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