| Thu 22 Sep 2011, 8:00 | | DMC - DiamondCorp plc - Interim Results (unaudited) for the six month period |
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DMC
DMC
DMC - DiamondCorp plc - Interim Results (unaudited) for the six month period
ended 30 June 2011
DiamondCorp plc
JSE share code: DMC
AIM share code: DCP
ISIN: GB00B183ZC46
(Incorporated in England and Wales)
(Registration number 05400982)
(SA company registration number 2007/031444/10)
(`DiamondCorp` or `the Company` or `the Group`)
Interim Results (unaudited) for the six month period ended 30 June 2011
DiamondCorp plc, a southern Africa focussed diamond mine development and
exploration company, releases its interim results for the six month period ended
30 June 2011. The results are unaudited.
HIGHLIGHTS
* After a year`s development activity, the decline at the Lace mine near
Kroonstad in the Free State province of South Africa successfully accessed
kimberlite at the 26 level for bulk testing (260m below surface).
* Mining to recover the bulk sample continues in a northeast direction across
the pipe and remains in kimberlite with a lower amount of surrounding rock
incorporated compared to the kimberlite initially encountered, with the
latest two sub-samples of 837 tonnes and 630 tonnes returning recovered
grades of 22 carats and 30 carats per hundred tonnes ("cpht") respectively.
* Ground conditions in this higher grade kimberlite are significantly better
than the lower grade `stony ground` on the western side of the pipe on this
level, allowing a better mining advance towards completion of the bulk
sample.
* To date, a total of 14,211 tonnes of kimberlite have been processed for the
recovery of 1,837 carats of diamonds.
* Management are encouraged that the diamond quality remains consistent with
the initial parcel which was valued last month by the SA Diamond Exchange
at an average of $205 per carat.
* Approximately 40% of the diamonds are larger than one-third of a carat, and
more than 80% of the diamonds are gem quality. The largest gem diamond
recently recovered is 20.54 carats. The Company has also just recovered a
1.01 carat pink diamond.
* The average recovered grade of all kimberlite processed to date is 13 cpht.
This should not be considered indicative of either the whole pipe at this
level or the grade of the kimberlite which will be incorporated into the
mining plan.
* In Botswana, core drilling has commenced on kimberlite J-01, a 10ha
diamondiferous kimberlite, approximately 10km southeast of De Beers Jwaneng
mine. A large diameter drilling rig is currently being mobilised on J-05,
1.5ha diamondiferous kimberlite, approximately 5km southeast of the Jwaneng
mine. The current drilling programme aims to better define the contact
margins of J-01 and provide an indicative diamond grade of both kimberlite
pipes by the end of the year.
* GBP3.48 million of new equity has been raised during 2011 to the date of
this announcement, allowing the bulk test at the Lace mine to continue and
the next phase of exploration in Botswana to commence.
* Net loss for the six months ended 30 June 2011 was GBP1,168,179 (30 June
2010 GBP1,609,114).
* The loss was determined after charging administrative overhead costs of
GBP663,568 (2010 GBP653,983) and interest charges of GBP99,861 (2010
GBP201,537). Non-cash charges for the period, including depreciation and
amortisation, were GBP491,194 (2010 GBP611,461) and a foreign exchange gain
on the loan payable of GBP109,076 (2010 GBP168,960 loss).
Commenting on the results, DiamondCorp CEO Paul Loudon said: "The period under
review saw us make significant steps towards our goal of being a long-term
diamond producer. Having successfully re-accessed the Lace mine below any of the
old workings, we are now determining the grade and carat value at the top of the
first mining block and expect to have this information next month. At the same
time, we have commenced our mini bulk testing programme on our two
diamondiferous kimberlites in Botswana and expect to have these results before
the end of 2011."
22 September 2011
London
The Competent Person responsible for the technical information with respect to
Botswana contained in this announcement is Mr Paul Zweistra (Pr. Sci. Nat.,
Registration number 400016/93) a full-time employee of VP3 Geoservices (Pty)
Limited. VP3 and Mr Zweistra have given their permission for their work to be
quoted in this announcement.
CONSOLIDATED INCOME STATEMENT
Six months ended 30 June 2011
Six months Six months
ended ended
30 June 30 June
2011 2010
GBP GBP
Administrative expenses (663,568) (653,983)
Depreciation and amortisation (491,194) (611,461)
expense
OPERATING LOSS (1,154,762) (1,265,444)
Investment revenues - interest 5,120 26,827
on bank deposits
Interest expense (99,861) (201,537)
Foreign exchange gain / (loss) 109,076 (168,960)
on loan payable
LOSS BEFORE TAX (1,140,427) (1,609,114)
Tax (27,752) -
LOSS FOR THE FINANCIAL PERIOD (1,168,179) (1,609,114)
ATTRIBUTABLE TO:
EQUITY HOLDERS OF THE PARENT (1,046,064) (1,467,808)
NON CONTROLLING INTEREST (122,115) (141,306)
(1,168,179) (1,609,114)
BASIC & DILUTED LOSS PER SHARE GBP0.006 GBP0.025
HEADLINE LOSS PER SHARE GBP0.006 GBP0.026
All of the activities of the Group are classed as continuing.
STATEMENT OF CHANGES IN EQUITY
Six months Six months
ended ended
30 June 30 June
2011 2010
GBP GBP
Opening balance 18,006,470 10,442,525
Loss for the financial period (1,168,179) (1,609,114)
New equity share capital 590,817 3,040,426
subscribed
Premium on new equity share 1,823,378 3,516,236
capital subscribed
Translation reserve (733,054) 285,489
Value attributed to warrants granted - (49,160)
Closing balance 18,519,431 15,626,402
CONSOLIDATED BALANCE SHEET
30 June 31 December
2011 2010
GBP GBP
NON-CURRENT ASSETS
Goodwill 4,606,026 4,606,026
Other intangible assets 7,001,104 4,947,778
Property, plant and equipment 5,671,543 6,260,302
17,278,673 15,814,106
CURRENT ASSETS
Inventories 340,666 355,349
Other receivables 431,190 398,266
Cash and cash equivalents 2,382,583 4,293,185
3,154,439 5,046,800
TOTAL ASSETS 20,433,112 20,860,906
CURRENT LIABILITIES
Obligations under finance leases - (25,718)
Other payables (741,990) (627,028)
Loan payable (1,154,951) (2,184,950)
Provisions (16,740) (16,740)
(1,913,681) (2,854,436)
NET ASSETS 18,519,431 18,006,470
EQUITY
Share capital 6,107,026 5,516,209
Share premium 25,026,394 23,203,016
Warrant reserve 505,876 505,876
Share option reserve 402,583 402,583
Translation reserve 2,180,942 2,913,996
Retained losses (15,703,390) (14,535,211)
EQUITY ATTRIBUTABLE TO EQUITY 19,052,983 18,417,907
HOLDERS OF THE PARENT
NON CONTROLLING INTEREST (533,552) (411,437)
TOTAL EQUITY 18,519,431 18,006,470
CONSOLIDATED CASH FLOW STATEMENT
Six months Six months
ended ended
30 June 30 June
2011 2010
GBP GBP
Net loss for the period (1,173,299) (1,635,941)
Depreciation and amortisation 491,194 611,461
Foreign exchange (gain) / loss (109,076) 168,960
on long term loan
Gain on disposal of property, (2,071) (43,555)
plant and equipment
Other non-cash charges - 51,056
(Increase) / Decrease in receivables (32,924) 47,441
Decrease / (Increase) in inventories 14,683 (9,516)
Increase / (Decrease) in other payables 89,244 (329,124)
NET CASH USED IN OPERATING (722,249) (1,139,218)
ACTIVITIES
INVESTING ACTIVITIES
Purchase of intangible assets (2,330,615) (368,837)
Disposal of property, plant and 86,492 152,358
equipment
Purchase of property, plant and (340,435) (24,218)
equipment
Interest received 5,120 26,827
NET CASH USED IN INVESTING (2,579,438) (213,870)
ACTIVITIES
FINANCING ACTIVITIES
Proceeds on issue of ordinary 2,414,195 6,542,847
shares
Repayment of capital on long (1,029,999) (423,333)
term loan
Interest payment on long term (99,861) (201,537)
loan
NET CASH FROM FINANCING ACTIVITIES 1,284,335 5,917,977
NET (DECREASE) / INCREASE IN CASH (2,017,352) 4,564,889
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT 4,293,185 288,188
BEGINNING OF PERIOD
Effect of foreign exchange 106,750 (86,990)
rate changes
CASH AND CASH EQUIVALENTS AT 2,382,583 4,766,087
END OF PERIOD
NOTES TO THE FINANCIAL STATEMENTS
Six months ended 30 June 2011
1. ACCOUNTING POLICIES
These interim financial statements have been prepared using accounting policies
consistent with International Financial Reporting Standards (IFRSs). The same
accounting policies, presentation and methods of computation are followed in the
condensed interim financial information as applied in the Group`s latest annual
audited financial statements. The financial figures included in this half-yearly
report have been computed in accordance with IFRSs applicable to interim
periods.
These interim financial statements were approved by the Board on 21 September
2011 and do not constitute statutory financial statements within the meaning of
Section 435 of the Companies Act 2006. A copy of the statutory accounts for the
year ended 31 December 2010 has been delivered to the Registrar of Companies.
The auditors` report on those accounts was not qualified and did not contain
statements under Section 498 (2) or (3) of the Companies Act 2006.
These interim financial statements have been prepared using the accounting
policies set out in the Group`s 2010 statutory accounts.
Results for the six-month period ended 30 June 2011 have not been audited.
The comparative information presented in the income statement has been prepared
for the period 1 January 1010 - 30 June 2010. This has been performed in order
to comply with the AIM rules and is presented solely for this purpose.
2. LOSS PER SHARE
IAS required presentation of diluted earnings per share when a company could be
called upon to issue shares that would decrease net profit or increase net loss
per share. For a loss-making company with outstanding share options, net loss
per share would only be decreased by the exercise of out-of-money options. Since
it seems inappropriate to assume that option holders would exercise out-of-money
options, no adjustment has been made to basic loss per share for out-of-money
share options.
The calculation of basic and diluted loss per ordinary share is based on the
loss attributable to equity holders of the parent of GBP1,046,064 for the six
months ended 30 June 2011 (30 June 2010: GBP1,467,808) and on 184,852,905
ordinary shares (30 June 2010: 57,955,303) being the weighted-average number of
ordinary shares in issue.
3. LOAN PAYABLE
The loan payable at 30 June 2011 of GBP1,154,951 (30 December 2010 -
GBP2,184,950) is with Africa Opportunity Fund L.P. ("AOF"). The loan is secured
by the Company`s equity interest in Lace Diamond Mines (Pty) Ltd and by the
assets of the Company`s subsidiaries. At 30 June 2011, the amount of capital and
interest due for the final payment on 16 October 2011 is US$1.961M.
4. SHARE CAPITAL
30 June 31 December
2011 2010
Called up, allotted and fully paid
No. GBP No. GBP
Ordinary shares
of 3 pence each 203,567,533 6,107,026 183,873,651 5,516,209
In June 2011, 19,693,882 ordinary shares were issued at 13 pence per share for
gross proceeds of GBP2.56 million (see note 5).
5. GOING CONCERN
In determining the appropriate basis of presentation of the interim financial
statements, the Directors are required to consider whether the Group can
continue in operational existence for the foreseeable future, this being a
period of not less than 12 months from the date of the approval of the financial
statements. During the next 12 months the Group will be in a mine-development
phase and forecasts indicate that the Group will have insufficient financial
resources to accomplish all its development goals and meet all its financial
obligations over the next 12 months. The raising of additional finance is deemed
to be a material uncertainty which casts significant doubt over the ability of
the Group to continue as a going concern.
If its financial resources were insufficient, then the Group would be required
to (i) supplement its current cash resources by accessing the equity markets in
2011-2012 or by sale of assets or, alternatively, (ii) to modify its development
plan to preserve cash.
After making enquiries, given the successful GBP3.48 million fundraising in 2011
which was well-supported by the existing shareholder base, assuming that the
Group adheres to its development plan, the Directors have a reasonable
expectation that additional funds will be available within the next 12 months.
Accordingly the Directors continue to adopt the going concern basis of
presentation of the financial statements.
The financial statements therefore do not include the adjustments that would
result if the Group were not able to continue as a going concern.
6. POST BALANCE SHEET EVENTS
In June 2011, the Company announced that it had placed 26,794,397 ordinary
shares at 13 pence per share to raise approximately GBP3.48 million before
expenses. This placing comprised of:
* 19,693,882 ordinary shares issued in June 2011 (see note 3); and
* a further 7,100,515 ordinary shares at 13 pence per share which were placed
conditionally, subject to obtaining shareholder approval. At the annual general
meeting of the Company, held on 25 July 2011, the requisite shareholder approval
was obtained and these shares were admitted to trading on AIM and AltX on 26
July 2011.
AIM Nomad: Fairfax I.S. plc
AIM Brokers: Ocean Equities Limited
JSE Sponsor: PSG Capital (Pty) Limited
DiamondCorp plc, Paul Loudon +44 20 3151 0970
Ewan Leggat, Fairfax I.S. plc +44 207 598 5368
Ocean Equities Limited, Guy Wilkes +44 207 4370
John-Paul Dicks, PSG Capital (Pty) Limited +27 21 887 9602
Charmane Russell/Marion Brower, Russell & Associates +27 11 880 3924
Date: 22/09/2011 08:00:01 Produced by the JSE SENS Department.
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