| Tue 31 May 2011, 16:00 | | MMH - Miranda Mineral Holdings Limited - Reviewed condensed consolidated |
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MMH
MMH
MMH - Miranda Mineral Holdings Limited - Reviewed condensed consolidated
financial results for the six months ended 28 February 2011
Miranda Mineral Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/001940/06)
Share code: MMH ISIN: ZAE000074019
("Miranda" or "the Group")
Reviewed condensed consolidated financial results
for the six months ended 28 February 2011
* Capital raising is currently being reviewed
* Sesikhona mining and offtake partner has been conditionally appointed
* Uithoek Mining Right has been granted
* Miranda Coal`s shareholding in Glencoe coal properties increased
Condensed Consolidated Statement of Financial Position
(Figures in R `000) Reviewed Unaudited Audited
six months six months year
ended ended ended
28 Feb 2011 28 Feb 2010 31 Aug
2010
Assets
Non-Current Assets
Property, plant and equipment 18,792 8,018 14,368
Intangible assets 339,735 338,136 339,612
Other financial assets 2,541 2,664 2,468
361,068 348,818 356,448
Current Assets
Trade and other receivables 1,223 1,377 2,905
Cash and cash equivalents 4,137 5,503 24,553
5,360 6,880 27,458
Total Assets 366,428 355,698 383,906
Equity and Liabilities
Equity
Equity Attributable to Equity
Holders of Parent
Share capital 115,050 91,812 115,050
Reserves - 1,793 -
Retained income 228,139 248,249 239,139
343,189 341,854 354,189
Non-controlling interest (905) (382) (863)
342,284 341,472 353,326
Liabilities
Non-Current Liabilities
Finance lease obligation 1,294 2,316 1,815
Deferred tax 221 907 221
Environmental rehabilitation 8,280 8,164 9,220
provisions
9,795 11,387 11,256
Current Liabilities
Loans from shareholders 2,928 100 2,928
Finance lease obligation 1,012 912 964
Operating lease liability 22 35 22
Trade and other payables 10,387 1,792 15,410
14,349 2,839 19,324
Total Liabilities 24,144 14,226 30,580
Total Equity and Liabilities 366,428 355,698 383,906
Net asset value per share (cents) 120.3 138.0 124.2
Net tangible asset value per share 0.9 1.3 4.8
(cents)
Shares in issue - closing number 284,511 247,400 284,511
Condensed Consolidated Statement of Comprehensive Income
(Figures in R `000) Reviewed Unaudited Audited
six months six months year
ended ended ended
28 Feb 2011 28 Feb 2010 31 Aug
2010
Operating loss before interest and (11,203) (7,286) (17,593)
tax
Investment revenue 201 410 478
Fair value adjustment 73 - 131
Finance costs (113) (445) (319)
Loss before taxation (11,042) (7,321) (17,303)
Taxation - (84) (95)
Loss for the period (11,042) (7,405) (17,398)
Other comprehensive income:
Loss on aircraft revaluation - (357) (2,847)
Taxation related to components of - 100 797
other comprehensive income
Other comprehensive loss for the - (257) (2,050)
year net of taxation
Total comprehensive loss (11,042) (7,662) (19,448)
Loss attributable to:
Equity holders of the parent (11,000) (7,192) (16,704)
Non-controlling interest (42) (213) (694)
(11,042) (7,405) (17,398)
Total comprehensive loss
attributable to:
Equity holders of the parent (11,000) (7,449) (18,754)
Non-controlling interest (42) (213) (694)
(11,042) (7,662) (19,448)
Weighted average number of shares 284,511 247,400 247,502
in issue
Loss per share (cents) (3.87) (2.99) (7.03)
Headline loss per share (cents) (3.87) (2.99) (6.73)
No dilution effect
Condensed Consolidated Statement of Cash Flows
(Figures in R `000) Reviewed Unaudited Audited
six months six months year
ended ended ended
28 Feb 2011 28 Feb 2010 31 Aug
2010
Cash used in operations (13,496) (5,931) (2,562)
Interest income 201 410 478
Finance costs (113) (174) (319)
Net cash from operating activities (13,408) (5,695) (2,403)
Net cash from investing activities (6,534) (3,409) (13,269)
Net cash from financing activities (474) ( 523) 25,095
Total cash movement for the period (20,416) (9,627) 9,423
Cash at the beginning of the period 24,553 15,130 15,130
Total cash at end of the period 4,137 5,503 24,553
Condensed Consolidated Statement of Changes in Equity
(Figures in R `000) Share Share Re- Retain Non- Total
capital premi Valua- ed contro equity
um tion income l-
reser ling
ve intere
st
Balance at 31 2,474 (169) 348,778
August 2009 89,33 2,050 255,08
8 5
Total comprehensive loss - - (213) (7,662)
for the 6 months (257) (7,192
)
Revaluation reserve - - - 356 - 356
realised
Total changes - - (213) (7,306)
(257) (6,836
)
Balance at 28 2,474 (382) 341,472
February 2010 89,33 1,793 248,24
8 9
Balance at 31 2,474 (169) 348,778
August 2009 89,33 2,050 255,08
8 5
Total comprehensive loss - - (694)
for the year (2,05 (16,70 (19,448)
0) 4)
Issue of shares 371 - - - 23,238
22,86
7
Revaluation reserve - - - 758 - 758
realised
Total changes 371 (694) 4,548
22,86 (2,05 (15,94
7 0) 6)
Balance at 31 2,845 - (863) 353,326
August 2010 112,2 239,13
05 9
Balance at 31 2,845 - (863) 353,326
August 2010 112,2 239,13
05 9
Total comprehensive loss - - - (42)
for the 6 months (11,00 (11,042)
0)
Total changes - - - (11,00 (42)
0) (11,042)
Balance at 28 2,845 - (905) 342,284
February 2011 112,2 228,13
05 9
Group Segmental Analysis
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the chief
operating decision-maker in order to allocate resources to the segments and to
assess their performance. The chief operating decision-maker has been identified
as the Executive Committee that makes strategic decisions. The Group has
identified its operating segments based on its main exploration divisions and
aggregated them into coal, diamonds, gold, base metals and industrial minerals
and other. These values have been reconciled to the consolidated financial
results. The measures reported on by the Group are in accordance with the
accounting policies adopted for preparing and presenting the consolidated
annual financial statements.
Segment operating expenses comprise all operating expenses of the different
reportable segments and are either directly attributable to the reportable
segment, or can be allocated to the reportable segment on a reasonable basis.
The segment assets and liabilities comprise all assets and liabilities of the
different segments that are employed by the reportable segments and are either
directly attributable to the reportable segments, or can be allocated to the
reportable segment on a reasonable basis.
Reviewed six months 28 February 2011
Coal Diamond Gold Base Other Group
(Figures in s Metals &
R`000) Industria
l
Minerals
Segment result:
Loss before 4,392 1,532 382 688 4,048 11,042
taxation
Taxation - - - - - -
Loss after 4,392 1,532 382 688 4,048 11,042
taxation
Segment assets 53,692 637 143 307,238 4,718 366,428
Mining 14,882 - - - - 14,882
properties
Capital work-in- 13,153 - - - - 13,153
progress
Exploration and 10,388 282 72 79 - 10,821
evaluation asset
Mineral rights 8,929 - - 306,832 - 315,761
Other assets 6,340 355 71 327 4,718 11,811
Segment (17,638) (627) (126 (188) (5,565) (24,144)
liabilities )
Other material
non-cash items
included in
segment loss
Depreciation on 691 74 15 22 16 818
property, plant
and equipment
Unaudited six months 28 February 2010
Segment result:
Loss before 3,787 552 105 159 2,718 7,321
taxation
Taxation 71 8 2 3 - 84
Loss after 3,858 560 107 162 2,718 7,405
taxation
Segment assets 40,734 1,249 216 307,353 6,146 355,698
Mining - - - - - -
properties
Capital work-in- 12,791 - - - - 12,791
progress
Exploration and 8,960 487 64 72 - 9,583
evaluation asset
Mineral rights 8,929 - - 306,833 - 315,762
Other assets 10,054 762 152 448 6,146 17,562
Segment (11,871) (704) (141 (211) (1,299 (14,226)
liabilities ) )
Other material
non-cash items
included in
segment loss
Depreciation on 974 110 22 33 26 1,165
property, plant
and equipment
Audited for the year ended 31 August 2010
Segment result:
Loss before 10,373 1,576 367 659 4,328 17,303
taxation
Taxation 80 10 2 3 - 95
Loss after 10,453 1,586 369 662 4,328 17,398
taxation
Segment assets 50,245 927 155 307,256 25,323 383,906
Mining 9,665 - - - - 9,665
properties
Capital work-in- 13,153 - - - - 13,153
progress
Exploration and 10,042 506 71 78 - 10,697
evaluation asset
Mineral rights 8,929 - - 306,832 - 315,761
Other assets 8,456 421 84 346 25,323 34,630
Segment (22,236 (1,025) (205 (307) (6,807 (30,580)
liabilities ) ) )
Other material
non-cash items
included in
segment loss
Depreciation on 2,031 230 46 69 62 2,438
property, plant
and equipment
Commentary
The Board of Directors welcomes this opportunity to update the shareholders of
Miranda on some of the exciting developments impacting on their investment
during the first six months of the 2011 financial year.
The condensed consolidated interim financial results of the Group for the six
month period ended 28 February 2011 are a summary of the Group`s reviewed
interim financial statements and comprise the Company and its subsidiaries. As a
result of the restructured Board mentioned below, it was decided that in terms
of good corporate governance, the interim financial results would be reviewed.
The group`s auditors, Deloitte & Touche, have reviewed these results and a copy
of their unmodified review opinion on this set of condensed financial
information is available for inspection at the Group`s registered office.
1. PRESENTATION OF CONDENSED CONSOLIDATED INTERIM RESULTS
The condensed consolidated interim results have been prepared in accordance with
the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the AC 500 standards as
issued by the Accounting Practices Board and the information as required by IAS
34: Interim Financial Reporting, Listing Requirements of the JSE Limited, and
the Companies Act of South Africa (Act 61 of 1973), as amended. In the
preparation of these interim financial results, the Group has applied key
assumptions concerning the future and other indeterminate sources in recording
various assets and liabilities.
The Group`s principal accounting policies and assumptions have been applied
consistently over the current and prior financial period.
2. STRATEGIC AND CORPORATE REVIEW
At a strategic and corporate level, the period under review has largely been one
of consolidation, review and restructuring for Miranda.
Shareholders are referred to the SENS announcements dated 7, 19 and
21 April 2011, as well as 9 and 24 May 2011, in which it stated that
the Company is presently reviewing all possible implications
associated with the re-launch of the capital raising, which process
is expected to be conclude by no later than the first week of June
2011.
The plans to list the Group`s coal assets separately have been placed
on hold pending the capital raising.
The Board has been restructured to reflect the change in its
shareholder base and the new challenges the Company will face. This
process of establishing the right balance between expertise and
independence is ongoing. The Board and its sub committees are in the
process of reconstitution following the retirement of two directors
at the annual general meeting held on 7 April 2011.
3. OPERATIONAL REVIEW
The operational highlights of the Coal Division`s activities during the last six
months include:
* Miranda Coal has appointed its new preferred partner in its Sesikhona
Klipbrand Colliery (Pty) Ltd ("Sesikhona"), an approximately 3.7
million tonne ("mt") anthracite project, subject to the delivery of
acceptable financial guarantees. Miranda has returned to its original
model for Sesikhona, namely to outsource all mining, processing,
logistics and offtake to an outsider and to secure an annuity income
stream for the Group over the life of the project. An announcement on
the timeline and roll-out of the project will be made as soon as all
agreements have been concluded and the offtake becomes unconditional.
* The long-awaited Mining Right for Miranda Coal`s second coal
development property, Uithoek, has been granted and executed with the
Department of Mineral Resources ("DMR"). The open pit sections of
Uithoek and the adjacent Burnside property (whose Mining Right
application lags that of Uithoek by approximately six months), have
been targeted as the first mining phase in the Group`s larger Glencoe
complex of properties. Management has decided to fast-track the
development of this 13.5 mt open pit resource and has planned to
embark on an exploration programme designed to refine the resource
and obtain additional information sufficient for a pre-feasibility
study.
* During April 2011, Miranda Coal increased its stakes in the following
subsidiaries, which are all the holders of coal Prospecting Rights in
the KZN Klip River coal field. The transactions were funded out of
existing cash holdings.
Street Spirit Trading 54 (Pty) Ltd (Burnside project) - by 17% to
77%;
Applewood Trading 3 (Pty) Ltd (Boschhoek project) - by 20% to 72%;
Nungu Trading 695 (Pty) Ltd (Wasbank project) - by 12% to 74%; and
Point Blank Trading 104 (Pty) Ltd (Learydale project) - by 12% to
64%.
The first three projects all form part of Miranda Coal`s strategic
portfolio of coking coal properties in the Glencoe complex. Learydale
is adjacent to the Group`s Yarl underground project in its Newcastle
project area, which currently holds an approximately 16.9 mt SAMREC
inferred coal resource.
Management`s focus in the other operating divisions has been, and will continue
to be, to work towards a resolution with the Department of Mineral Resources in
respect of its disputed Prospecting Rights.
Other than as disclosed in these interim financial results, there have been no
material changes during the six months ended 28 February 2011 to the information
as disclosed in the 2010 Annual Report in respect of the Company`s exploration
activities and results.
Contingencies
As previously reported, Sesikhona is still involved in an arbitration process
with Stefanutti Stocks Mining Services ("SSMS") regarding outstanding amounts
and claims in respect of a mining contract with SSMS. Sesikhona rejected the
SSMS claim of R31.3 million in its entirety and has instituted a counterclaim
against SSMS for the damages suffered by Sesikhona at the mining site. The
Group`s legal advisers consider the likelihood of any action against the Company
in this matter being successful as unlikely, and the case should be resolved
within the foreseeable future.
The damage to the mining property of Sesikhona, with a capitalised value of
R15.8 million in Property, Plant and Equipment at February 2011 (2010: R nil),
became evident following rain in the Dannhauser area during the months of
December 2010 and early January 2011. The site establishment had been completed
at the time of the incident and Sesikhona is still investigating whether the
proper establishment and development of the site by the previous mining
contractors could have prevented or limited the damages.
The Board has received confirmation from the DMR that its appeal against the
refusal of a prospecting right for its Rozynenbosch lead, silver and zinc
deposit is part of a large inherited backlog and is receiving urgent attention.
As a consequence, the Company has put its appeal process against Government on
hold pending further information. The Board is monitoring the situation on an
ongoing basis and will make further announcements to shareholders as soon as any
of the facts related to the matter change. In the event of this right not being
granted to Miranda, it could result in a derecognition of the full mineral asset
value currently carried at R284 million.
Given the uncertainty on title, tenure and the current depressed market for clay
bricks, the board is currently reviewing information pertaining to the prospects
and potential economic benefits of the Rozynenbosch mineral asset and
Turffontein clay deposit, including the company`s strategic intents and intended
programmes to realise the embedded economic value within these assets, in order
to arrive at an informed view of whether to impair or not to impair these
assets. The Board expects to finalise the assessment for impairment on these
assets in the foreseeable future. In the unlikely event of these assets proving
to be impaired, it could result in a recognition of the full impairment loss of
up to R307 million.
4. Financial Review
On 28 February 2011, the net asset value and net tangible asset value of the
company amounted to R342.3 million and R2.5 million respectively (2010: R341.5
million and R3.3 million). This was equivalent to 120.3 cents per share ("cps")
and 0.9 cps (2010: 138.0 cps and 1.3 cps), which represents a decline of 13% and
31%, respectively. The group has incurred material expenditure in the period as
a direct result of its ongoing exploration program and the preparation of new
exploration and mining right applications. The resultant net loss for the period
was R11.0 million (2010: R7.4 million).
5. Events Subsequent to Balance Sheet Date
An extraordinary general meeting of shareholders was held on 9 May 2011.
Shareholders passed the requisite resolutions to facilitate the Group`s capital
raising activities by placing the authorised, unissued shares of the Company
under the control of the directors.
6. Changes to the Board
During the financial period reported on:
* Mr Parawut Kobboon and Mr Glen William Poff were appointed as Non-executive
Directors, and Mr Daniel Choon Beng Lian as an Independent Non-executive
Directors, all effective from 13 December 2010; and
* Mr Moses Tshitangano, was appointed as a Non-executive Director effective
14 February 2011.
Subsequent to 28 February 2011:
* Mr Glen Poff, previously a non-executive director was appointed as the
Chief Executive Officer effective 14 March 2011;
* Alan R Thompson, previously Non-executive Chairman, and Adriaan M Botha,
previously Financial Director, both retired from the board on 7 April 2011;
* Mr Daniel Lian`s designation changed to that of a Non-independent Non-
executive Director with effect from 20 April 2011; and
* Ms Lulama Mokhobo, previously an Independent Non-executive Director of the
Company, was appointed as the Chairperson of the Board with effect from 20
April 2011.
7. Group Prospects
The Board is focused on implementing its strategy of fast-tracking and bringing
to account Miranda Coal`s most advanced coal projects in KZN.
8. Statement on going concern
The condensed consolidated interim results have been prepared on the basis of
accounting policies applicable to a going concern. This basis presumes that
funds will be available to finance future operations and that the realisation of
assets and settlement of liabilities, contingent obligations and commitments
will occur in the ordinary course of business. The short to medium-term going
concern outlook of the Group will be enhanced by the ability of the company to
implement its stated policy of capital raising. Accordingly, the interim results
have been prepared on the basis of accounting policies applicable to going
concern.
9. Dividends
No dividends were recommended or declared for the period under review (2010:
nil).
For and on behalf of the Board
LP Mokhobo GW Poff
Chairperson Chief Executive Officer
Centurion
31 May 2011
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 PO Box 1045, North Riding, 2162
Telephone: 012 665 4200??Fax: 012 665 4258
Email: info@mirandaminerals.com
www.mirandaminerals.com
Date: 31/05/2011 16:00:00 Produced by the JSE SENS Department.
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