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KWR
KWR
KWR - Kiwara plc - Chairman`s Statement and Interim Results for the period ended
30 September 2009
Kiwara plc
Registration number: 01760458
JSE: KWR
AIM:KIW
ISIN:GB0007702953
("Kiwara" or "the Company" or "the Group")
Chairman`s Statement and Interim Results for the period ended 30 September 2009
Highlights
- Optimal open pit resource statement - 340MT at 0.78% copper
- IFC investment of US$6M with option to invest a further US$9M
- Further high grade Ni results at Kawako
- Offer from First Quantum Minerals Ltd to acquire Kiwara for GBP157.6M
Operations
During the reporting period the Company has continued to make significant
advances with the exploration of both Kalumbila and Kawako, the Company`s base
metals targets within its prospecting licence area. These projects are located
on the periphery of the Kabompo Dome in North West Province, Zambia, an area
which is now considered to be the highly prospective extension of the historic
Zambian copper-belt.
Kalumbila: Following the 2008 drill programme, the Company engaged Snowden, the
independent mining consultants to model Kalumbila and produce a resource
statement on the optimal open pit area for copper mineralisation. Their SAMREC
code compliant estimation is of an Inferred Category Resource of 340MT at 0.78%
copper, using an economically viable cut off of 0.55% Cu. This open pit target
is in the central part of the known mineralisation, reports to surface and
remains open on strike and dip. The Company is currently engaged in both in-fill
drilling necessary to increase the resource from Inferred to Indicated Category,
and also to increase confidence in the previously determined mineralised areas
along strike from the targeted pit area so that additional tonnage may be
brought into the resource. The current drill programme is the first step towards
a pre-feasibility study. The Board believes that Kalumbila has the potential to
be a very significant copper mine.
Kawako: The Company`s initial drilling programme identified very high grade
nickel mineralisation in two boreholes. During the reporting period the Company
drilled a further 8 core boreholes to determine both continuity and structure of
what is believed to be a complex hydrothermal system. Results continue to report
high nickel grades over considerable intersections (KW3 intersected 17.7m
grading 1.04% Ni from 22.3m, which includes 6.04m at 2.26% Ni from 25.2m. KW4
intersected 12.2m at 3.03% Ni from 87.5m and 9.6m at 0.94% Ni from 128.4m);
ongoing geo-chemistry and analytical work continues to suggest that Kawako has
significant potential as a nickel target.
Financial and Corporate Review
The pre-tax loss for the six months to 30 September 2009 was GBP999,138 (2008 -
GBP172,483). The consolidated income statement includes an exchange loss of
GBP491,217 (2008 - exchange gain of GBP466,155) which relates to the GBP
denominated inter-company loan due to Kiwara from its 100% owned Zambian based
subsidiary, Kiwara Resources (Zambia) Limited ("Kiwara Zambia"). These exchange
differences are unrealised and have arisen due to the different reporting
currencies of the parent company, Kiwara (GBP) and its 100% owned subsidiary,
Kiwara Zambia (US$).
Cumulative exploration expenditure incurred to 30 September 2009 amounted to
GBP2,675,979 at 30 September 2009. During the period under review, Kiwara
increased its interest in Kalumbila Minerals Ltd ("Kalumbila"), the joint
venture company by 5% for a consideration of GBP1M plus 800,000 Kiwara ordinary
shares of 1p each. This additional interest increases Kiwara`s holding in
Kalumbila to 85% effective from 23 September 2009.
On 27 August 2009, the International Finance Corporation (the "IFC") committed
to an equity investment of US$15 million in the Company. The initial US$6
million was executed through its investment in 19,510,403 million Kiwara
ordinary shares of 1p each at a price of 18.97 pence per share. As part of the
US$6 million initial investment, the IFC was granted the right to invest a
further US$9 million at a price of 37 pence per share for a period of 3 years
from the date of the initial investment. This investment by the IFC provides the
Company with a highly credible strategic investor necessary for the progression
of the Company`s rapidly emerging projects in an environmentally and socially
sustainable manner.
Post the reporting period, Kiwara received and the directors unanimously
supported an offer from First Quantum Minerals Ltd ("First Quantum") to purchase
the entire share capital of Kiwara for approximately GBP157.6 million by way of
a cash and equity transaction. The terms of the First Quantum offer consist of
a cash payment of 37.5 pence plus 0.0085 First Quantum share per Kiwara ordinary
share. The Scheme circular relating to this transaction was posted to
shareholders on 18 December 2009 and a copy is available on the Company`s
website. It is currently estimated that the transaction will complete in early
February 2010.
Colin Bird
Chairman
23 December 2009
Consolidated Income Statement
Notes
Six months Six months Year ended
ended ended 31/03/2009
30/09/2009 30/09/2008 Audited
Unaudited Unaudited
GBP GBP GBP
Revenue
Other income - -
Administration expenditure -529,319 -662,007 -1,142,013
Loss from operations -529,319 -662,007 -1,142,013
Finance income 2,060 22,969 34,586
Finance cost -103 - -4
Foreign exchange (loss)/gain -491,217 466,555 1,745,740
Other income 19,441 - 309,900
Profit/(loss) before income tax -999,138 -172,483 948,209
expense
Income tax expense - - -
Profit/(loss) for the period -999,138 -172,483 948,209
after income tax expense
Loss attributable to minority 19,807 25,448 -218,129
interest
Profit/(loss) attributable to -979,331 -147,035 730,080
members of Kiwara Plc
Number of shares in issue 4 198,551,210 165,485,010 174,365,806
Weighted average number of 179,419,572 160,594,300 165,540,875
shares in issue
Diluted weighted average number 180,131,949 161,105,130 166,036,916
of shares in issue
Basic profit/(loss) per share 3 -0.55 -0.09 -0.44
(pence)
Headline profit/(loss) per share 3 -0.55 -0.09 -0.44
(pence)
Diluted profit/(loss) per share 3 -0.55 -0.09 -0.44
(pence)
Diluted headline profit/(loss) 3 -0.55 -0.09 -0.44
per share (pence)
Consolidated Balance Sheet
30/09/2009 30/09/2008 31/03/09
Unaudited Unaudited Audited
Notes GBP GBP GBP
Assets
Non-current assets
Property, plant and equipment 65,948 78,017 97,376
Intangible assets 16,852,431 14,224,160 15,554,420
Total non-current assets 16,918,379 14,302,177 15,651,796
Current assets
Trade and other receivables 10,260 100,655 31,793
Cash and cash equivalents 3,905,200 1,292,989 472,643
Prepaid expenses and other 24,107 24,018 35,396
current assets
Total current assets 3,939,567 1,417,662 539,832
Total assets 20,857,946 15,719,839 16,191,628
Current liabilities
Trade and other payables 282,985 340,284 75,746
Total current liabilities 282,985 340,284 75,746
Total liabilities 282,985 340,284 75,746
Net current assets 3,656,582 1,077,378 464,086
Net assets 20,574,961 15,379,555 16,115,882
Equity
Share capital 4 6,604,414 6,273,752 6,362,560
Share premium 4 13,875,671 8,738,664 8,738,665
Share based payment reserve 343,325 207,474 343,325
Currency translation reserves -1,194,814 -397,192 -1,358,502
Other reserves 7,411,656 6,790,000 7,411,656
Retained earnings -6,945,179 -6,866,987 -5,965,848
Equity attributable to equity 20,095,073 14,745,711 15,531,856
holders of the company
Minority interests 479,888 633,844 584,026
Total equity 20,574,961 15,379,555 16,115,882
Consolidated Statement of Changes in Equity
Attributable to Equity Holders of the Company
Share Share Share Currency
Capital Premium based translation
payment reserves
reserve
GBP GBP GBP GBP
Balance at 1 April 2008 6,223,752 7,815,204 200,885 12,744
Issue of share capital 50,000 - - -
Premium on issue of share - 950,000 - -
capital
Costs on issue of shares - -26,540 - -
Net profit/(loss) for the period - - - -
Addition in minority interest - - - -
Share based payment charge - - 6,589 -
Currency translation adjustment - - - -409,936
Balance at 30 September 2008 6,273,752 8,738,664 207,474 -397,192
Issue of share capital 88,808 - -
Net profit/(loss) for the period - - -
Addition /Deduction in minority - - -
interest
Share based payment charge - 135,851
Currency translation adjustment - 1 - -961,310
Other reserves - - - -
Balance at 31 March 2009 6,362,560 8,738,665 343,325 -1,358,502
Issue of share capital 241,854 - - -
Premium on issue of share - 5,137,006 - -
capital
Net profit/(loss) for the period - - - -
Addition/Deduction in minority - - - -
interest
Share based payment charge - - - -
Currency translation adjustment - - - 163,688
Balance at 30 September 2009 6,604,414 13,875,671 343,325 -1,194,814
Consolidated Statement of Changes in Equity
Attributable to Equity Holders of the Company
Other Retained Minority Total
reserves earnings Interests
GBP GBP GBP GBP
Balance at 1 April 2008 6,790,000 -6,719,952 601,850 14,924,483
Issue of share capital - - - 50,000
Premium on issue of share - - - 950,000
capital
Costs on issue of shares - - - -26,540
Net profit/(loss) for the period - -147,035 -25,448 -172,483
Addition in minority interest - - 57,442 57,442
Share based payment charge - - - 6,589
Currency translation adjustment - - - -409,936
Balance at 30 September 2008 6,790,000 -6,866,987 633,844 15,379,555
Issue of share capital - - - 88,808
Net profit/(loss) for the period - 877,115 243,577 1,120,692
Addition /Deduction in minority - 24,024 -293,395 -269,371
interest
Share based payment charge 135,851
Currency translation adjustment - - - -961,309
Other reserves 621,656 - - 621,656
Balance at 31 March 2009 7,411,656 -5,965,848 584,026 16,115,882
Issue of share capital - - - 241,854
Premium on issue of share - - - 5,137,006
capital
Net profit/(loss) for the period - -979,331 -19,807 -999,138
Addition/Deduction in minority - - -84,331 -84,331
interest
Share based payment charge - - - -
Currency translation adjustment - - - 163,688
Balance at 30 September 2009 7,411,656 -6,945,179 479,888 20,574,961
Consolidated Cash flow statement
Six months Six months Year ended
ended ended 31/03/2009
30/09/2009 30/09/2008 Audited
Unaudited Unaudited
GBP GBP GBP
Cash flow from operating activities
(Loss)/profit before income tax and -999,139 -172,483 948,209
minority interest
Depreciation 22,547 17,120 39,885
Profit on disposal of property, plant - -5,014 -
and equipment
Decrease/(increase) in trade and other 21,535 -59,497 9,366
receivables
(Increase)/decrease in prepaid expenses -12,204 5,171 -6,207
and other current assets
Increase/(decrease) in trade and other 230,731 204,524 -60,014
payables
Increase/(decrease) in currency 378,027 -429,722 -1,401,520
translation reserves
Share based payments - 6,589 142,440
Interest received -2,060 -22,969 -34,586
Gain from bargain purchase - - -309,900
Net cash outflow from operating -360,563 -456,281 -672,327
activities
Cash flows utilised by investing
activities
Acquisition of additional interest in -1,000,000 - -197,845
subsidiaries
Purchase of intangible fixed assets -250,228 -1,086,103 -1,953,545
Purchase of property, plant and -1,572 -881 -25,194
equipment
Proceeds from disposal of property, - 15,726 14,898
plant and equipment
Interest received 2,060 22,969 34,586
Net cash outflow from investing -1,249,740 -1,048,289 -2,127,100
activities
Cash flow from financing activities
Decrease in minority interest - - -235,954
Consolidated Cash flow statement
Six months Six months Year ended
ended ended 31/03/2009
30/09/2009 30/09/2008 Audited
Unaudited Unaudited
GBP GBP GBP
Issue of shares, net of costs of 5,042,860 973,460 1,683,925
issuance
Net cash inflow from financing 5,042,860 973,460 1,447,971
activities
Net increase/(decrease) in cash and 3,432,557 -531,110 -1,351,456
cash equivalents
Cash and cash equivalents at the 472,643 1,824,099 1,824,099
beginning of the year
Cash and cash equivalents at the end of 3,905,200 1,292,989 472,643
the year
Notes to the Financial Statements
1. The unaudited interim financial statements for the six months ended 30
September 2009 have been prepared and are presented in accordance with
International Accounting Standards 34, Interim Financial Reporting,
International Financial Reporting Standard ("IFRS"), the Companies Act and the
JSE Limited Listings Requirements. 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 2009.
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 Six months Year ended
ended ended 31/03/2009
30/09/2009 30/09/2008
GBP GBP GBP
Profit/(loss) on ordinary activities
before income tax and minority
interest
United Kingdom -210,751 -93,436 -615,672
Zambia -788,387 -79,047 1,563,881
-999,138 -172,483 948,209
Net assets by location
United Kingdom 19,426,169 13,551,772 13,516,788
Zambia 1,148,792 1,827,783 2,599,093
20,574,961 15,379,555 16,115,881
Exploration expenditure
Zambia 2,675,979 1,864,413 1,953,545
Total exploration expenditure 2,675,979 1,864,413 1,953,545
3. The calculation of the basic loss per share and headline loss per share is
based on the loss of GBP979,331 for the period ended 30 September 2009 divided
by the weighted average number of shares being 179,419,572 in issue during the
period.
The diluted loss per share and diluted headline loss per share is based on the
loss of GBP979,331 for the period ended 30 September 2009 divided by the
weighted average number of shares and potential shares being 180,131,949 in
issue during the period.
4. On 31 July 2009, The Group issued 3,875,001 ordinary shares of 1 p each at a
price of 36p, raising the Group GBP1,395,000 before costs. On 26 August 2009,
The Group issued 19,510,403 new ordinary shares to IFC raising US$6million.
On 23 September 2009, Kiwara Plc (Kiwara) entered into an agreement with LM
Engineering Ltd (LM) for the acquisition of 5% of LM`s shareholding in Kalumbila
Minerals Ltd, an 80% subsidiary of Kiwara, for purchase consideration of GBP1
million plus 800,000 ordinary Kiwara shares. Kiwara was also granted the option
to acquire, within two years of the date of the agreement, a further 5% of the
shares in Kalumbila Minerals Ltd for a purchase consideration of GBP3 million
plus 2.4 million Kiwara ordinary shares.
5. 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.
Sponsor
Sasfin Capital
(A division of Sasfin Bank)
23 December2009
Date: 23/12/2009 15:00:01 Produced by the JSE SENS Department.
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