| Mon 28 Nov 2011, 15:14 | | PLL - Platfields Limited - Unaudited Condensed Consolidated Interim Results for |
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PLL
PLL
PLL - Platfields Limited - Unaudited Condensed Consolidated Interim Results for
the six months ended 31 August 2011
Platfields Limited
Incorporated in the Republic of South Africa
(Registration number 2002/005851/06)
Share code: PLL ISIN: ZAE000151825
("Platfields" or "the Company" or "the Group")
Unaudited Condensed Consolidated Interim Results for the six months ended 31
August 2011
COMMENTARY
Introduction
Subsequent to the listing of Platfields in December 2010 on the JSE main board,
the Company has largely focused itself on external growth opportunities and
leveraging of its listed status through systematic assessment and evaluation of
potential acquisitions of operational assets to improve its performance and
enhance shareholder returns.
Listing and share price performance
Since listing, the share price has declined to levels well below the Company`s
intrinsic value. The current share price levels are not representative of the
value in Platfields and management is hopeful that as the markets improve, so
will the market valuation of the Company. This decline is in line with sector
sentiment and the performance of most platinum stocks in the wake of the
financial turmoil in the European Union, the volatility of metal prices and the
Japanese earthquake and its effects on auto catalytic converter demand.
Whilst the Platfields share price decline is not unique for the sector, it is
particularly challenging for the Platfields fund-raising strategy due to its
dilutive potential.
Exploration and resources
Platfields has commissioned Minxcon (Proprietary) Limited to carry out desktop
mine design and life of mine plan for its Leeuwkop Project located in Limpopo
Province.
The preliminary key results:
- toll treatment agreements will be negotiated with near operators so that no
concentrator will be commissioned on site;
- an underground design with a production rate of 100 000 tonnes per month is
potentially viable;
- a twin decline system will be developed from surface with access cross-cuts
developed on the levels to access the ore body; and
- the mining method will be conventional scattered breast stoping.
The profile for life of mine evidences the following:
- a total of 8,545 kt of Merensky reef tonnes are planned at an average grade of
4.06 g/t;
- a total of 13,442 kt of UG2 reef tonnes are planned at an average of 3.53 g/t;
- a total of 34,722 kg Merensky content and 47,398 kg of UG2 content is planned;
and
- a grand total of 21,988 kt of reef tonnes are planned at an average grade of
3.73 g/t, resulting in 82,120 kg of content.
Focus for the period will be on firming up the mine plans and raising capital to
further the understanding of the extent of the ore body over Leeuwkop.
Financial and operational review
Platfields as an exploration group, is not yet cash-generative, and therefore no
cash revenue is reported for the current year and no revenue is expected for the
next financial year.
The Group made a net loss for the period of R6 million compared to a loss of R78
million for the same period 2010. The major decrease in the reported loss is
that there has been no further material impairments to Platmile portion of the
Berg Project. Also, the Group`s BEE share scheme has been finalised and
implemented.
Funding and going concern
As the Group is not yet in a cash-generating position, its exploration programme
is still funded by equity. The Group is currently raising capital in order to
complete its exploration programme on the Leeuwkop Project. Directors draw your
attention to the fact that the Company`s future prospects and stability relies
on its ability to raise capital for the ensuing year.
Subsequent events
As published on SENS dated 26 September 2011, Platfields and Anglo American
Platinum Limited settled the pending litigation over "competing" prospecting
right on the basis that the Department of Mineral Resources will execute a
prospecting right in favour of Platfields over a portion of Farm Tigerpoort
which excludes the competing area.
Mineral assets
The Platfields Mineral Resource Statement prepared by the Independent Competent
Person is contained in the 2011 Annual Report. No material changes have occurred
since the date of that report.
Mineral assets valuation
Over the past 12 months, the prices of Platinum Group Metals ("PGM") continued
to rise, but started stabilising in the second quarter of 2011. The platinum
price rose steadily month on month, rising above USD1,800/oz. in February 2011.
Thereafter, the price returned to average USD1,770/oz. over the second quarter
of 2011.
The price of palladium has risen sharply over the last 12 months reaching
consecutive record highs, peaking in February 2011. The price of rhodium also
peaked in February 2011, and has remained fairly steady in the first quarter of
2011.
Although the Rand remained stable for the first half of the year, it started to
weaken towards the end of 2011.
The USD basket price increased between 13% to 18% year on year, depending on the
PGM prill splits of the specific area of both Berg and Liger. Due to the
stronger Rand/USD exchange rate, the Rand basket price remained subdued. These
elements have influenced the updated valuation estimates.
Platfields` prospects are valued at highly conservative levels. Liger Project
value is currently estimated at R88 million compared to R112 million the
previous reported period. Berg Project value is currently estimated at R101
million compared to R116 million the previous reported period. The current
understanding of the nature and extent of the Berg poses development uncertainty
at current economic studies whilst Liger remains a viable prospect.
Prospects
Platfields is confident that it will raise sufficient capital to complete its
exploration programmes.
Platfields` primary focus in the immediate future will be on raising capital,
and conducting additional exploration in relation to the Liger Project, and in
particular the Leeuwkop portion of Liger, in respect of which it holds a valid
new order prospecting right. Thereafter it intends to conduct mining studies
over certain portions of Leeuwkop, with the goal of proceeding to potential
mining applications in the short to medium term. A mining right application is
currently being considered in the short term. As noted above, the Tigerpoort
portion of the Liger Project is a longer-term extension, enhancing Leeuwkop as
it forms a natural extension to the mineralised area.
Naturally as a listed company with tradable shares, Platfields is currently
embarking on seeking strategic alliances and acquisitions of cash-generative
junior prospects in the metals sector.
The Berg Project is a secondary consideration, with the future focus in respect
of this project being on the Aquidus and Draaikraal properties that border
Northam Platinum Limited`s Booysendal mine. Platfields also applied for an
additional prospecting right over portions 4, 5 and 39 of portion 27 of the Farm
Kliprivier 73 JT, which, if granted, will enhance the Berg Project and its
pipeline. Platfields is working to improve this project to enable a potential
standalone future mining operation.
Signed on behalf of the board:
JT Motlatsi DB Mbindwane
Chairman Chief Executive Officer
Cape Town 28 November 2011
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 August 2011 31 August 2010 28 February 2011
Figures in Rand (Unaudited) (Unaudited) (Audited)
ASSETS
Non-current assets
Exploration assets 56,690,146 16,690,147 56,690,146
Current assets
Other receivables 98,646 1,029,410 132,786
Cash and cash
equivalents 12,562,392 27,623,713 19,574,675
12,661,038 28,653,123 19,707,461
TOTAL ASSETS 69,351,184 45,343,270 76,397,607
EQUITY AND LIABILITIES
Equity
Share capital 7,896 6,542 7,896
Share premium 235,752,629 236,012,629 235,752,629
Share-based payments
reserve 65,605,904 72,575,301 65,605,904
Accumulated
comprehensive loss (267,349,140) (266,550,522) (261,486,864)
34,017,289 42,043,950 39,879,565
Non-current liability
Long-term liability 33,423,113 - 31,983,840
Current liabilities
Current portion of
long-term liability - - 2,000,000
Trade and other payables 1,910,782 3,299,320 2,534,202
1,910,782 3,299,320 4,534,202
TOTAL EQUITY AND
LIABILITIES 69,351,184 45,343,270 76,397,607
Net asset value per
share (cents) 4 9 5
Net tangible asset value
per share (cents) (3) 6 (2)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share-based
Total share payments
capital reserve
Figures in Rand
Balance at 28 February 2010 236,017,175 48,423,898
Changes in equity:
Issue of shares 1,496 -
Share-based payments 500 (500)
BEE share scheme (fair value) - 24,151,903
Total comprehensive loss for the period - -
Total changes 1,996 24,151,403
Balance at 31 August 2010 236,019,171 72,575,301
Changes in equity:
Issue of shares 1,354 -
Share issue expenses (260,000) -
BEE share scheme (fair value) - (7,291,327)
Share-based payments (fair value) - 321,930
Conversion to ordinary shares - -
Total comprehensive loss for the period - -
Total changes (258,646) (6,969,397)
Balance at 28 February 2011 235,760,525 65,605,904
Changes in equity:
Total comprehensive loss for the period - -
Balance at 31 August 2011 235,760,525 65,605,904
Total
attributable
Accumulated to equity
loss holders
Figures in Rand
Balance at 28 February 2010 (188,455,782) 95,985,291
Changes in equity:
Issue of shares - 1,496
Share-based payments - -
BEE share scheme (fair value) - 24,151,903
Total comprehensive loss for the period (78,094,740) (78,094,740)
Total changes (78,094,740) (53,941,341)
Balance at 31 August 2010 (266,550,522) 42,043,950
Changes in equity:
