| Wed 21 Sep 2011, 7:30 | | PGL - Pallinghurst Resources Limited - Interim results for the six months ended |
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PGL
PGL
PGL - Pallinghurst Resources Limited - Interim results for the six months ended
30 June 2011
Pallinghurst Resources Limited
(Previously Pallinghurst Resources (Guernsey) Limited)
(Incorporated in Guernsey)
(Guernsey registration number: 47656)
(South African external company registration number 2009/012636/10)
Share code on the BSX: PALLRES
ISIN: GG00B27Y8Z93
Share code on the JSE: PGL
("Pallinghurst" or the "Company")
NAV per share ZAR6.33 up 4%*
* Rate at 19 September 2011 was US$1:ZAR7.70.
Condensed consolidated income statement
1 Jan 2011 to 1 Jan 2010 to 1 Jan 2010 to
30 June 2011 30 June 2010 31 Dec 2010
(reviewed) (reviewed) (audited)
US$`000 US$`000 US$`000
Income
(Losses)/gains on investments
Unrealised fair value movements (111,314) 57 135,831
Unrealised foreign exchange 11,548 (1,451) 10,770
gains/(losses)
Net (loss)/gains on Platmin (180) 863 47
convertible note
Net realised loss on Jupiter (1,049) - -
capital raising
Net realised gain on Tshipi - - 46,005
Jupiter transaction
Net realised gain on POSCO - - 7
transaction
(100,995) (531) 192,660
Portfolio Income
Loan interest income 497 564 1,704
Structuring fee and other 13 1,040 1,549
income
510 1,604 3,253
Net (losses)/gains on (100,485) 1,073 195,913
investments and income from
operations
Expenses
Investment Manager`s benefit (2,314) (2,312) (4,626)
Performance Incentive 32,512 - (32,512)
reversal/(accrual)
Operating expenses (324) (384) (909)
Other (losses)/gains including (3) 65 76
foreign exchange
29,871 (2,631) (37,971)
(Loss)/profit from operations (70,613) (1,558) 157,942
Finance income 43 299 494
Net finance income 43 299 494
(Loss)/profit before share in (70,571) (1,259) 158,436
loss of associates
Share in loss of associates (2,219) (70) (292)
(Loss)/profit before tax (72,789) (1,329) 158,144
Income tax credit/(expense) 26,067 - (42,114)
Net (loss)/profit after tax (46,723) (1,329) 116,030
Basic and diluted (0.10) (0.00) 0.24
(loss)/earnings per share*
* Headline earnings per share
is equal to earnings per share.
Condensed consolidated balance sheet
30 June 2011 30 June 2010 31 Dec 2010
(reviewed) (reviewed) (audited)
US$`000 US$`000 US$`000
Assets
Non-current assets
Investments in associates 22,955 1,837 1,614
Investment portfolio - - -
Quoted investments 216,105 84,293 302,349
Unquoted investments 137,001 163,225 137,001
Loans and receivables 11,040 29,154 31,865
Platmin convertible note - 9,999 9,183
364,147 286,671 480,397
Total non-current assets 387,101 288,508 482,012
Current assets
Trade and other receivables 25 1,181 1,213
Cash and cash equivalents 20,216 30,972 29,405
Total current assets 20,241 32,152 30,618
Total assets 407,342 320,660 512,630
Liabilities
Non-current liabilities
Deferred tax liability 16,047 - 42,114
Current liabilities
Performance Incentive accrual - - 32,512
Trade and other payables 307 309 294
Total current liabilities 307 309 32,806
Total liabilities 16,353 309 74,919
Net assets 390,989 320,352 437,711
Capital and reserves
attributable to equity holders
Share capital 5 5 5
Share premium 300,226 300,226 300,226
Retained earnings 90,758 20,121 137,480
Equity 390,989 320,352 437,711
NAV and tangible NAV per share 0.82 0.67 0.92
Condensed consolidated statement of cash flows
1 Jan 2011 to 1 Jan 2010 to 1 Jan 2010 to
30 June 2011 30 June 2010 31 Dec 2010
(reviewed) (reviewed) (audited)
US$`000 US$`000 US$`000
Cash outflows from operations (1,424) (2,840) (5,643)
Additions to investments (14,571) (11,843) (14,731)
Loans extended to investments (7,500) (26,278) (28,845)
Disposal/(acquisition) of 9,003 (9,136) (9,136)
Platmin convertible note
Loan repayments from 28,822 - -
investments
Proceeds from disposal of - - 6,868
investment
Finance income received 43 299 494
Net cash inflows/(outflows) 14,372 (49,797) (50,993)
from operating activities
Cash flows from investing
activities
Net (increase)/decrease in (23,559) 298 (30)
investments in associates
Net cash (used in)/from (23,559) 298 (30)
investing activities
Cash flows from financing
activities
Net cash generated from - - -
financing activities
Net decrease in cash and cash (9,187) (49,499) (51,023)
equivalents
Cash and cash equivalents at 29,405 80,406 80,406
the beginning of the
period/year
Exchange (loss)/gain on cash (3) 65 22
Cash and cash equivalents at 20,216 30,972 29,405
the end of the period/year
Condensed consolidated statement of comprehensive income
1 Jan 2011 to 1 Jan 2010 to 1 Jan 2010 to
30 June 2011 30 June 2010 31 Dec 2010
(reviewed) (reviewed) (audited)
US$`000 US$`000 US$`000
Net (loss)/profit for the (46,723) (1,329) 116,030
period
Items of other comprehensive - - -
income
Total comprehensive (46,723) (1,329) 116,030
(expense)/income for the
period/year
Segmental information
Luxury Steel Coloured PGMs Total
Brands Making Gemstones (reviewed) (reviewed)
(reviewed) Materials (reviewed) US$`000 US$`000
US$`000 (reviewed) US$`000
US$`000
30 June 2011
Investment
portfolio
Quoted investments - 145,115 32,265 38,725 216,105
Unquoted 87,006 - - 49,995 137,001
investments
Loan and 11,040 - - - 11,040
receivables
Total segmental 98,047 145,115 32,265 88,719 364,147
assets
Investments in 26,842
associates,
current assets,
and liabilities
Net assets 390,989
Luxury Steel Coloured PGMs Total
Brands Making Gemstones (reviewed) (reviewed)
(reviewed) Materials (reviewed) US$`000 US$`000
US$`000 (reviewed) US$`000
US$`000
30 June 2010
Investment
portfolio
Quoted investments - 16,888 7,286 60,119 84,293
Unquoted 86,633 29,940 - 46,651 163,225
investments
Loan and - 1,805 - 27,350 29,154
receivables
Platmin - - - 9,999 9,999
convertible note
Total segmental 86,633 48,633 7,286 144,119 286,671
assets
Investments in 33,681
associates,
current assets,
and liabilities
Net assets 320,352
Luxury Steel Coloured PGMs Total
Brands Making Gemstones (audited) (audited)
(audited) Materials (audited) US$`000 US$`000
US$`000 (audited) US$`000
US$`000
31 December 2010
Investment
portfolio
Quoted investments - 226,436 24,931 50,982 302,349
Unquoted 87,006 - - 49,995 137,001
investments
Loan and 3,387 - - 28,478 31,865
receivables
Platmin - - - 9,183 9,183
convertible note
Total segmental 90,393 226,436 24,931 138,637 480,397
assets
Investments in (42,686)
associates,
current assets,
and liabilities
Net assets 437,711
Fair valuation of investments
Investment Opening Unreali Unreali Net Additio Accrued Closing
fair sed sed realise ns and interes fair
value fair foreign d loss disposa t & value
at value exchang on ls structu at
31 adjustm e Jupiter (review ring 30 June
Decembe ents gains/ transac ed) fee 2011
r 2010 (review (losses tion US$`000 (review (review
(review ed) ) (review ed) ed)
ed) US$`000 (review ed) US$`000 US$`000
US$`000 ed) US$`000
US$`000
Quoted
equity
investments
Platmin 50,982 (22,428 1,168 - 9,003 - 38,725
Limited )
Gemfields 24,931 6,453 881 - - - 32,265
plc
Jupiter 226,436 (95,340 9,499 (1,049) 5,569 - 145,115
Mines Ltd )
302,349 (111,31 11,548 (1,049) 14,571 - 216,105
4)
Unquoted
equity
investments
Faberge Ltd 87,006 - - - - - 87,006
Moepi Group 13,373 - - - - - 13,373
(Boynton)
Richtrau No 36,621 - - - - - 36,621
123 Ltd
(Magazynskr
aal)
137,001 - - - - - 137,001
Loans and
receivables
Faberge Ltd 3,387 - - - 7,500 154 11,040
Platmin 28,478 - - - (28,822 344 -
)
31,865 - - - (21,322 497 11,040
)
Total 471,215 (111,31 11,548 (1,049) (6,750) 497 364,147
investment 4)
portfolio
Investment Opening Unreali Unreali Net Additio Accrued Closing
fair sed sed realise ns and interes fair
value fair foreign d loss disposa t & value
at 31 value exchang on ls structu at 30
Decembe adjustm e Jupiter (review ring June
r 2009 ents gains/ transac ed) fee 2010
(review (review (losses tion US$`000 (review (review
ed) ed) ) (review ed) ed)
US$`000 US$`000 (review ed) US$`000 US$`000
ed) US$`000
US$`000
Quoted
equity
investments
Platmin 58,776 (9,957) (215) - 11,514 - 60,119
Limited
Gemfieldspl 8,330 (810) (563) - 329 - 7,286
c
Jupiter 15,845 1,668 (625) - - - 16,888
Mines Ltd
82,952 (9,098) (1,403) - 11,843 - 84,293
Unquoted
equity
investments
Faberge Ltd 86,633 - - - - - 86,633
Moepi Group 10,030 - - - - - 10,030
(Boynton)
Richtrau No 27,466 9,155 - - - - 36,621
123 Ltd
(Magazynskr
aal)
Tshipi 29,940 - - - - - 29,940
154,069 9,155 - - - - 163,225
Loans and
receivables
Faberge Ltd - - - - -
Tshipi 1,321 - (48) - 432 100 1,805
Platmin - - - 25,845 1,504 27,350
1,321 - (48) - 26,278 1,604 29,154
Total 238,342 57 (1,451) - 38,121 1,604 276,672
investment
portfolio
Investment Opening Unreali Unreali Net Additio Accrued Closing
fair sed sed realise ns and interes fair
value fair foreign d loss disposa t & value
at 31 value exchang on ls structu at 31
Decembe adjustm e Jupiter (audite ring Decembe
r 2009 ents gains/ / POSCO d) fee r 2010
(audite (audite (losses transac US$`000 (audite (audite
d) d) ) tion d) d)
US$`000 US$`000 (audite (audite US$`000 US$`000
d) d)
US$`000 US$`000
Quoted
equity
investments
Platmin 58,776 (22,465 3,156 - 11,514 - 50,982
Limited )
Gemfields 8,330 16,621 (349) - 329 - 24,931
plc
Jupiter 15,845 129,177 8,011 74,886 (1,483) - 226,436
Mines Ltd
82,952 123,333 10,818 74,886 10,360 - 302,349
Unquoted
equity
investments
Faberge Ltd 86,633 - - - 373 - 87,006
Moepi Group 10,030 3,343 - - - - 13,373
(Boynton)
Richtrau No 27,466 9,155 - - - - 36,621
123 Ltd
(Magazynskr
aal)
Tshipi 29,940 - - (29,933 (7) - -
)
154,069 12,499 - (29,933 366 - 137,001
)
Loans and
receivables
Faberge Ltd - - - - 3,000 387 3,387
Tshipi 1,321 - (48) 1,058 (2,431) 100 -
Platmin - - - - 25,845 2,633 28,478
1,321 - (48) 1,058 26,415 3,119 31,865
Total 238,342 135,831 10,770 46,012 37,141 3,119 471,215
investment
portfolio
All figures are rounded to US$000s, meaning some casting differences may be in
evidence.
"Despite a turbulent period, NAV has been protected, even increasing in ZAR
terms. To further broaden the shareholder base and stimulate demand for the
Company`s shares, we are exploring a potential additional listing on the London
Stock Exchange."
Chairman`s statement
The year 2011 has thus far been a turbulent one. When we were making our New
Year`s resolutions, few could have imagined the pending devastation by
earthquakes, the Japanese tsunami, political and military uprising across much
of the Middle East, further crises in the banking sector, and member states at
risk of exiting the Euro as a results of their possible insolvency.
These events have taken their toll on markets in general and Pallinghurst and
its portfolio companies have not been immune, with a portion of the gains in
Jupiter and Platmin achieved during 2010 being reversed. Despite these
fluctuations, the Company remains focused on delivering long-term value for
shareholders. Gemfields has again delivered two record breaking auction results;
an important set of transactions necessary for the consolidation of our platinum
initiatives has been concluded; Jupiter successfully raised AUD150 million to
fund the construction of a new manganese mine at Tshipi Borwa, which has now
commenced; and Faberge released four new collections and has plans to open
retail outlets in London and New York.
These positive developments notwithstanding, the Board is very much aware of the
gap between the Company`s net asset value and its market capitalisation on the
Johannesburg Stock Exchange, and also that this gap has widened recently. A
valuation gap is not uncommon for investment holding companies, and is generally
attributable to the lack of control over the underlying investments. However,
while our Company does not hold over 50% of any of its portfolio investments,
our strategic equity partners, the Pallinghurst Co-Investors, collaborate under
the guidance of the Investment Manager, and accordingly, there is collectively
control over each investment. To further broaden the shareholder base and
stimulate demand for the Company`s shares, the Board is exploring a potential
additional listing on the London Stock Exchange.
I am confident in the value inherent in each investment platform and remain of
the view that each is uniquely placed to benefit as markets stabilise,
developing economies continue to grow and as our strategies for each progresses
to its logical outcome.
Chief executive`s statement
Notwithstanding the volatile markets and macro-economic crises that have
characterised 2011 to date, the Company`s net asset value has been protected,
and whilst slightly lower than that at the beginning of the year, the NAV has
increased from one year ago. This is the result of all four of our investment
platforms having benefitted from many positive and constructive developments,
and I can report continued progress in realising the strategy and vision for all
our businesses.
Platinum Group Metals
A series of transactions was announced during March 2011 that will provide the
platform for the consolidation of the three contiguous properties of Platmin`s
Pilanesberg Platinum Mine ("PPM"), Sedibelo and Magazynskraal. The transactions
include providing loan funding to our Black Economic Empowerment partner, the
Bakgatla Ba Kgafela Tribe (the "Bakgatla"), to acquire Barrick Platinum South
Africa (Pty) Limited`s ("BPSA") 10% interest in Sedibelo. The loan funding also
facilitates the Bakgatla`s participation in a new vehicle jointly owned with
Platmin and the Pallinghurst Co-Investors, to acquire certain of BPSA`s long
lead infrastructure items, including important strategic water and electricity
rights necessary for the consolidation. Platmin will also acquire the area
contiguous to PPM, its operating mine, known as the Sedibelo West property for
US$75 million. This transaction will lead to a significant increase in Platmin`s
resource base and an extension of the life of mine, as well as providing
operational flexibility. This acquisition has been funded using part of the cash
raised from the conversion of Platmin`s US$135 million bond.
In addition, the Pallinghurst Co-Investors have agreed to acquire a 49.9%
interest in the Sedibelo property, and to increase their aggregate interest in
Magazynskraal to 40% (an additional 6.6%). These transactions represent an
important development in the African Queen vision and provide the platform for
the planned consolidation of the last known shallow PGM resource on the Western
Limb of the Bushveld Complex, with the potential for significant synergies.
Consistent with the African Queen consolidation vision, the feasibility study on
the Magazynskraal property has been extended to include the area of the Sedibelo
property known as Sedibelo East. During March 2011, Platmin
repaid in full the US$26 million short-term loan facility. The loan facility was
on arm`s length commercial terms and I am pleased to report that it has
generated fees and interest for the Company of approximately US$3 million.
With effect from 1 January 2011, Platmin declared commercial production at PPM.
On 23 June 2011, a small group of employees of MCC Contracts (Proprietary)
Limited ("MCC"), the mining contractor at PPM, engaged in an illegal riot,
damaging MCC-owned and leased vehicles, and disrupting operations at the mine.
The situation was resolved by MCC and senior Platmin management, allowing the
recommencement of mining operations on 11 July 2011. Processing of ore
stockpiles continued during these disruptions and PPM`s production for the six
months to 30 June 2011 was 37,823 4E PGM ounces, an increase of over 50%
compared with 24,941 4E PGM ounces produced in the prior corresponding period.
However, as a direct consequence of the equipment damage and the unrest, the
production ramp-up to 12,000 4E PGM ounces per month previously expected by the
end of 2011, will be delayed by up to six months.
Platmin and MCC are constructively working with the National Union of
Mineworkers ("NUM") to secure stable long-term industrial relations with MCC`s
workforce. Platmin intends to appoint an additional contractor and to allocate
the drilling, blasting and load and haul activities between the parties in order
to optimise mineral resource management and improve pit conditions.
Steel Making Materials
In order to fund the next developmental phases of Jupiter`s three key projects -
Tshipi Borwa, Mount Ida and Mount Mason - Jupiter announced an AUD150 million
new equity capital raising on 31 January 2011. AUD98.5 million was placed with
new third party blue chip institutions and following shareholder approval on 6
April 2011, the balance was placed with the Pallinghurst Co-Investors. In order
to minimise dilution, the Group invested AUD5.5 million in the successful AUD150
million capital raising and the Company`s current see through interest in
Jupiter is 16.5%.
Tshipi Borwa
The capital raising enabled Jupiter to approve its 49.9% share of the projected
AUD200 million capital expenditure required to build a 2.4 million tonne per
annum open pit manganese mine at Tshipi Borwa. The mine is expected to create
permanent employment for approximately 500 people, creating benefits in South
Africa`s most impoverished province. Tshipi`s Board gave its final consent for
the project on 4 February 2011, following the approval of Jupiter`s broad based
Black Economic Empowerment partner Ntsimbintle Mining (Pty) Limited, which will
contribute their proportionate share of the funding necessary to build the mine.
With the requisite funding and approvals in place, the project team has been
rapidly expanded, long lead time items ordered and key supplier contracts
finalised. Additional assay results have improved the understanding of the
deposit and independent geological consultants have been engaged to update
Tshipi Borwa`s mineral resource estimate. The design of the mine and its
associated surface infrastructure, including the crushing and screening plant,
the rail siding and rapid load-out station have all been completed and in June
2011, the bulk earth moving works commenced. The project remains within budget
and on track for the commencement of production during the third quarter of
2012.
Central Yilgarn Iron Ore projects
On 19 January 2011, Jupiter announced an inferred magnetite resource in the
central section of its Mount Ida Magnetite Project of 530 million tonnes at
31.9% Fe, exceeding the initial objective of 400 million tonnes. The central
section represents only 30% of the target length of the strike and supports the
initial conceptual expectation of 1.1-1.3 billion tonnes of magnetite iron ore.
Subsequently, Jupiter announced the completion of its Mount Ida scoping study
based on the assumption of extracting 25 million tonnes per annum of ore to
produce ten million tonnes per annum of high grade magnetite concentrate. This
study indicated an average operational cash cost of AUD63 per tonne to produce
an estimated iron concentrate grade in excess of 68% containing low levels of
impurities. The total capital expenditure for the establishment of such an
operation has been estimated at AUD1.6 billion, generating an NPV of AUD1.7
billion and an IRR of 20%. A scoping study on the Mount
Mason DSO haematite project was also completed during the first half of 2011.
The study was based on the inferred mineral resource of 5.75 million tonnes of
haematite iron ore grading 59.9% Fe and indicated a robust operation producing a
Direct Shipping Ore ("DSO") at a rate of 1.5 million tonnes per annum. The Mount
Mason project has the potential to generate significant cash flow in the near
term and to establish Jupiter as a producer in the Central Yilgarn region prior
to the development of the flagship Mount Ida magnetite project.
Approximately AUD40 million of Jupiter`s AUD150 million capital raising has been
allocated to completing feasibility studies on both Mount Ida and Mount Mason.
An exploration camp has been established between the projects, which can service
both areas and a 120,000 metre drilling programme is well underway with the
intention to bring the Mount Ida inferred resource into measured/indicated
status and to finalise the feasibility studies on both projects.
Coloured Gemstones - Gemfields
Gemfields held its second lower grade rough emerald and beryl auction in Jaipur
during March 2011. The auction realised total revenues of US$10 million from 13
million carats sold, an average price of US$0.77 per carat, representing an
impressive 148% increase compared to the first lower grade auction held in March
2010. Subsequently, at the auction of higher quality rough emeralds held in
Singapore from 11 to 15 July 2011, 0.74 million carats were sold, generating
record revenues of US$32 million. When compared with the prior higher quality
auction held in December 2010 in Johannesburg, per carat prices improved by 63%,
from US$26 to US$43. Gemfields has now completed seven auctions in the past two
years, generating total revenue of US$88 million. The next auction is scheduled
to take place during November 2011.
Kagem`s total production of 14.3 million carats for the six months ended 30 June
2011 contributed substantially to a record annual production of 33 million
carats. This was a 90% year-on-year increase from the 17.4 million carats
produced in the prior twelve month period. These record production figures, when
combined with efficient cost control, saw per carat production costs fall 41%
from US$0.73 to US$0.43 per carat for the year to 30 June 2011.
Gemfields has also continued to raise its brand profile through the appointment
of a Mumbai-based public relations agency and by sponsoring the Retail Jeweller
India Awards in August 2011, where it launched - in conjunction with selected
Indian jewellers - the "Emeralds for Elephants" collection with a fashion show.
Gemfields also launched its first ever emerald advertising campaign, entitled
"Uniquely You", in the Indian market in April 2011 with advertisements placed in
twelve fashion and lifestyle magazines. Further advertisements were placed
during August 2011 to coincide with the Indian wedding and festival season. The
Indian advertising campaign is primarily targeted at end consumers and is
designed to increase retail demand, so increasing price tension in the emerald
supply chain, a strategy that has been successfully implemented by De Beers in
the diamond market. Another significant development was Gemfields`
announcement on 8 June 2011 that it had entered into a conditional agreement to
acquire 75% of a ruby deposit in the Montepuez district of the Cabo Delgado
province in northern Mozambique for US$2.5 million. Although mining to date has
only taken place on a relatively small and informal scale, its production has
been likened in quality to both that produced in Burma and at Winza in Tanzania.
Gemfields` expansion into rubies, in addition to its current strong positions in
emeralds and amethysts, is part of its stated aim to become the world`s leading
coloured gemstone producer.
Luxury Brands - Faberge
Faberge has expanded significantly this year with the release of four new
collections. In March 2011, its third High Jewellery collection, the
Constructivist collection, was launched at BaselWorld 2011, the world`s largest
and most important jewellery and watch trade fair. The collection consists of
important jewellery pieces influenced by the powerful modernist Russian art
movement of the same name. Faberge also unveiled three ranges of handcrafted
timepieces from the Faberge Horlogerie collection.
During Paris Couture week in July 2011, Faberge unveiled the first couture egg
pendants since 1917, collectively named Les Fameux de Faberge. The eggs pave the
way for private commissions, following Peter Carl Faberge`s passion for creating
personalised gifts. Faberge also launched Les Frissons de Faberge during July
2011. This is a broader collection of fine jewellery egg pendants, but at a
lower price point than the Fameux de Faberge collection, with a repertoire of
approximately 60 different designs.
Faberge`s strategy of engaging directly and personally with its customers
continued with carefully tailored events held across Europe and Asia, including
recent exclusive viewings at Gstaad in Switzerland, Courchevel in France, the
Hong Kong Club and at the Ritz in Paris.
Brian Dolan, a former sales advisor at Graff, has been appointed to head
Faberge`s sales initiatives in America and a new boutique is to be opened at 694
Madison Avenue in New York. Faberge will also open a boutique at 14a Grafton
Street in Mayfair, London, which will be the first Faberge store in London since
its Bond Street store closed in 1915. It is anticipated that both boutiques will
be open for business in advance of the Christmas retail season.
In summary, we continue to develop our four exciting platforms, and remain
confident that they will generate significant value and that the Company is well
set to provide shareholders with attractive returns.
Accounting policies
The Group`s interim report for the six months ended 30 June 2011 has been
prepared in accordance with IAS34 Interim Financial Reporting ("IAS34"),
applicable legal and regulatory requirements of The Companies (Guernsey) Law,
2008, and the listing requirements of the JSE Limited.
The information contained on this press release is based on the information
contained in the Group`s Interim Report. A copy of the Interim Report will be
sent to shareholders before 30 September 2011, and will be included on the
Company`s website www.pallinghurst.com
The accounting policies applied in the Interim Financial Statements are
consistent with those adopted and disclosed in the Group`s Annual Report for the
year ended 31 December 2010. There have been various new accounting standards,
amendments and new interpretations issued by the International Accounting
Standards Board during the period; none of these changes has had a material
impact on the Group.
Contingent liabilities
The Group has signed an agreement to act as a limited guarantor for the lease of
Faberge`s New York retail outlet at 694 Madison Avenue. The Directors believe
that there is a very low likelihood that this guarantee will be called upon. The
maximum amount of the liability is estimated to be US$219,000.
Commitments
Commitment to invest in Sedibelo
The Company has a commitment to take up its share of the investment in Sedibelo.
It is anticipated that the cash outflows will be material to the Group.
Faberge loan commitment - US$25 million
The Company has a commitment to loan Faberge up to US$25 million, which can be
drawn upon by Faberge until 31 July 2012. The outstanding commitment is US$4.125
million.
Events occurring after the end of the period
The US$25 million loan agreement with Faberge was extended on 27 July 2011 until
31 July 2012.
Additionally, the Group has entered into a contingent liability relating to the
rent on Faberge`s new retail outlet at 694 Madison Avenue in New York since the
balance sheet date.
Faberge has drawn down US$10 million since the end of the period, meaning that
the balance of the loan has increased to US$20.5 million (excluding interest and
structuring fee).
The Jupiter share price has fallen since the balance sheet date meaning that the
current fair value of the Company`s equity investment is lower than the
valuation at the balance sheet date.
Independent review report
The Interim Financial Information has been reviewed by the Company`s auditor,
Saffery Champness. The Independent Review Report from the auditor is available
from the registered office of the Company. The report confirms that nothing has
come to the auditor`s attention that might cause them to believe that the
Interim Financial Information was not prepared, in all material respects, in
accordance with IAS34.
On behalf of the Board
Brian Gilbertson Arne H. Frandsen
Chairman Chief Executive
www.pallinghurst.com
Pallinghurst Resources Limited
(Previously Pallinghurst Resources (Guernsey) Limited)
(Incorporated in Guernsey)
(Guernsey registration number: 47656)
(South African external company registration number 2009/012636/10)
Share code on the BSX: PALLRES
ISIN: GG00B27Y8Z93
Share code on the JSE: PGL
("Pallinghurst" or the "Company")
Executive directors: Brian Gilbertson, Arne H. Frandsen, Andrew Willis
Independent non-executive directors: Stuart Platt-Ransom, Clive Harris, Martin
Tolcher, Patricia White 1 Administrator, secretary and registered office: 11 New
Street, St Peter Port, Guernsey, GY1 3EG, Channel Islands Transfer secretaries:
Computershare Investor Services (Proprietary) Limited, 70 Marshall Street,
Johannesburg, 2001 Auditor: Saffery Champness, PO Box 141, La Tonnelle House,
Les Banques, St Sampson, Guernsey, GY1 3HS, Channel Islands Sponsor: Investec
Bank Limited, 100 Grayston Drive, Sandown, Sandton, 2196, South Africa
1 Appointed Permanent Alternate to Stuart Platt-Ransom and Martin Tolcher on 7
September 2010.
Date: 21/09/2011 07:30:01 Produced by the JSE SENS Department.
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