| Wed 30 Nov 2011, 11:11 | | MMH - Miranda Mineral Holdings Limited - Reviewed Abridged Provisional |
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MMH
MMH
MMH - Miranda Mineral Holdings Limited - Reviewed Abridged Provisional
Consolidated Financial Results for the year ended 31 August 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" or "the Company")
Reviewed Abridged Provisional Consolidated Financial Results for the year
ended 31 August 2011
Highlights
Shareholder loan facility available of up to R40 million
New and independent board members, and CEO with mining skills
SALIENT FEATURES
Comprehensive review concluded on all major assets, namely: Rozynenbosch,
Boschhoek, Uithoek and Sesikhona
The Board and Management team now focused on maintaining an improved
governance structure
All governance and compliance issues identified through the review process
being resolved
Management and Board assessing the re-capitalisation of the Company
ABRIDGED PROVISIONAL CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(R`000) Reviewed Restated Restated
2011 2010 2009
ASSETS
Non-current assets 78,141 71,927 62,052
Property, plant and equipment 19,656 14,368 9,157
Intangible assets 56,047 55,091 50,231
Other financial assets 2,438 2,468 2,664
Current assets 6,022 27,458 16,323
Trade and other receivables 3,311 2,905 1,193
Cash and cash equivalents 2,711 24,553 15,130
Total Assets 84,163 99,385 78,375
EQUITY AND LIABILITIES
Equity attributable to equity holders 40,816 69,667 64,425
of parent
Share capital 115,051 115,051 91,812
Reserves - - 2,050
Accumulated loss (74,235) (45,384) (29,437)
Non-controlling interest (1,753) (863) (169)
Non-current liabilities 10,997 11,256 11,597
Finance lease obligations 755 1,815 2,782
Deferred tax 327 221 923
Environmental rehabilitation 9,915 9,220 7,892
provisions
Current liabilities 34,103 19,325 2,522
Loans from shareholders 16,268 2,928 100
Other financial liabilities - - 100
Finance lease obligations 1,056 965 868
Operating lease liabilities 27 22 22
Trade and other payables 16,752 15,410 1,432
Total Liabilities 45,100 30,581 14,119
Total Equity and Liabilities 84,163 99,385 78,375
Closing number of shares in issue 284,511 284,511 247,400
(`000)
Net asset value per share (cents) 13.7 24.2 26.0
Net tangible asset value per share (6.0) 4.8 5.7
(cents)
ABRIDGED PROVISIONAL CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(R`000) Reviewed Restated Restated
2011 2010 2009
Revenue - - -
Operating loss (27,899) (17,593) (11,933)
Investment revenue 268 478 1,815
Fair value adjustment (30) 131 -
Finance costs (774) (319) (630)
Loss before taxation (28,435) (17,303) (10,748)
Taxation (106) (95) (126)
Loss for the year (28,541) (17,398) (10,874)
Other comprehensive income:
Realisation of revaluation - (758) -
reserve
(Losses)/ gains on property, - (2,089) 2,847
plant and equipment revaluation
Taxation related to components of - 797 (797)
other comprehensive income
Other comprehensive (loss)/ - (2,050) 2,050
income for the year, net of
taxation
Total comprehensive loss (28,541) (19,448) (8,824)
Loss attributable to:
Owners of the parent (27,468) (16,704) (10,868)
Non-controlling interest (1,073) (694) (6)
(28,541) (17,398) (10,874)
Total comprehensive loss
attributable to:
Owners of the parent (27,468) (18,754) (8,818)
Non-controlling interest (1,073) (694) (6)
(28,541) (19,448) (8,824)
Reconciliation between loss
attributable to ordinary
shareholders and headline loss
Loss attributable to ordinary (27,468) (16,704) (10,868)
shareholders
Impairment of exploration and 228 - -
evaluation asset
Total non-controlling interest (114) - -
effects of adjustments
Loss on sale of property, plant - - 165
and equipment
Impairment of property, plant and - 37 -
equipment
Headline loss (27,354) (16,667) (10,703)
Weighted number of shares in 284,511 247,502 239,688
issue (`000)
Loss per share (cents) 9.7 6.7 4.5
Headline loss per share (cents) 9.6 6.7 4.5
PROVISIONAL CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(R`000) Share Share Revalua- Accumu- Non-con- Total
capital pre- tion lated trolling equity
Group mium reserve loss interest
Balance at 2,474 89,338 2,050 (29,437) (169) 64,256
01
September
2009
Total - - (2,050) (16,704) (694) (19,448)
comprehensi
ve loss for
the year
Issue of 371 22,868 - - - 23,239
shares
Realisation - - - 757 - 757
of
revaluation
reserve
Total 371 22,868 (2,050) (15,947) (694) 4,548
changes
Balance at 2,845 112,206 - (45,384) (863) 68,804
01
September
2010
Total - - - (27,468) (1,073) (28,541)
comprehensi
ve loss for
the year
Business - - - (1,383) 183 (1,200)
combination
s
Total - - - (28,851) (890) (29,741)
changes
Balance at 2,845 112,206 - (74,235) (1,753) 39,063
31 August
2011
ABRIDGED PROVISIONAL CONSOLIDATED CASH FLOW STATEMENT
(R`000) Reviewed Restated Restated
2011 2010 2009
(25,314) (2,562) (10,197)
Cash used in operations
Interest income 268 478 1,815
Finance costs (341) (319) (630)
Net cash from operating (25,387) (2,403) (9,012)
activities
Net cash from investing (8,393) (13,269) (10,895)
activities
Net cash from financing 11,938 25,095 14,555
activities
Total cash movement for the year (21,842) 9,423 (5,352)
Cash and cash equivalents at the 24,553 15,130 20,482
beginning of the year
Total cash and cash equivalents 2,711 24,553 15,130
at end of the year
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.
The Group discloses its operating segments according to the entity components
regularly reviewed by the Executive Committee. The components comprise of
exploration divisions. These values have been reconciled to the abridged
consolidated financial statements. The measures reported on by the Group are
in accordance with the accounting policies adopted for preparing and
presenting the abridged consolidated 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. 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.
31 August 2011 Coal Dia- Gold Base Other Group
monds Metals
&
Industr
ial
Mineral
s
Segment result: (6,687) (1,599) (344) (592) (19,213) (28,435)
Loss before
taxation
Taxation (90) (11) (2) (3) - (106)
Loss after (6,777) (1,610) (346) (595) (19,213) (28,541)
taxation
Segment assets 56,875 643 144 22,718 3,783 84,163
Mining 16,539 - - - - 16,539
properties
Capital work-in- 13,140 - - - - 13,140
progress
Exploration and 11,218 293 74 82 - 11,667
evaluation asset
Mineral rights 8,929 - - 22,311 - 31,240
Other assets 7,049 350 70 325 3,783 11,577
Segment (19,603) (349) (70) (104) (24,974) (45,100)
liabilities
Other material
non-cash items
included in
segment loss
Depreciation on 1,355 151 30 45 62 1,643
property, plant
and equipment
31 August 2010 Coal Dia- Gold Base Other Group
monds Metals
& Indus-
trial
Mine-
rals
Segment result: (10,374) (1,576) (367) (658) (17,303)
Loss before (4,327)
taxation
Taxation (81) (10) (2) (3) - (95)
Loss after (10,455) (1,586) (369) (661) (4,327) (17,398)
taxation
Segment assets 50,245 927 155 22,735 25,323 99,385
Mining properties 9,665 - - - - 9,665
Capital work-in- 13,153 - - - - 13,153
progress
Exploration and 10,043 506 71 78 - 10,698
evaluation asset
Mineral rights 8,929 - - 22,311 - 31,240
Other assets 8,455 421 84 346 25,323 34,629
Segment (22,237) (1,025) (205) (307) (6,807) (30,581)
liabilities
Other material
non-cash items
included in
segment loss
Depreciation on 2,031 230 46 69 62 2,438
property, plant
and equipment
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The abridged provisional consolidated financial statements were prepared under
the supervision of Ms EM Johnson CA(SA).
The abridged provisional consolidated financial statements of the Groupare
prepared on a historical cost basis except for certain financial instruments,
at amortised cost or fair value, and the valuation of certain elements of
property, plant and equipment. The abridged provisional consolidated financial
statements 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 71 of 2008).
The principal accounting policies, which comply with IFRS, have been
consistently applied in all material respects in the current and comparative
years. All new interpretations and standards were assessed and adopted with no
material impact. The financial results were restated as detailed in section 3.
2. AUDIT REPORT
The abridged provisional consolidated financial statements for the year have
been reviewed by the Company`s independent auditors, Deloitte & Touche, whose
modified review report is available for inspection at the Group`s registered
address.
An application was made to put the Company under Business Rescue proceedings
as defined in the Companies Act of South Africa. Although the Group`s total
assets exceed the total liabilities, the Group`s current liabilities exceed
the current assets. Loan funding will mature in January 2012 unless converted
to ordinary shares, and although the Company hopes to conclude a rights offer
which will address the Group`s cash flow requirements, the outcome of such
rights issue is unpredictable as it could be influenced by the outcome of the
Business Rescue application and the decisions of shareholders.
The outcome of the Business Rescue application and unpredictability of the
outcome of the planned rights issue could impact severely on the Group`s
ability to obtain funding for its planned operations and its ability to
service its debt.
These events indicate material uncertainties which may cast significant doubt
on the Group`s ability to continue as a going concern and therefore it may be
unable to realise its assets and discharge its liabilities in the normal
course of business.
In addition, the Company`s directors are in the process to assess all non-
current assets of the Group for impairment. This is a lengthy exercise and was
not complete at the date of this announcement. The auditors were thus unable
to satisfy themselves concerning the recoverable amounts which are stated in
the abridged consolidated statement of financial position at 31 August 2011.
Because of the significance of the matters described above, the auditors were
unable to obtain sufficient appropriate evidence in order to express a
conclusion on the abridged financial statements. Accordingly, they disclaimed
from expressing a conclusion.
Any reference to future financial performance included in this announcement
has not been reviewed or reported on by the Group`s auditors.
3. FINANCIAL REVIEW
The abridged financial statements of the Group have been restated for prior
years to reflect the derecognition of the Rozynenbosch asset from the Group`s
intangible assets (as discussed in paragraph 6.2). This has had the effect of
reducing the net asset value of the Company by approximately R284.5 million in
every year up to and including the 2010 financial year.
As at 31 August 2011, the net asset value and net tangible asset value of the
Group amounted to R39.1 million and -R17.0 million, respectively (restated
2010: R68.8 million and R13.7 million). This was equivalent to 13.7 cents per
share (cps) and -6.0 cps (restated 2010: 24.2 cps and 4.8 cps).
With no projects yet in production, the Group showed no revenue for the year
(2010: Rnil). Operating expenses amounted to R27.9 million (2010: R17.6
million). The increase in operating expenses was mainly due to litigation cost
(R3.2 million), capital raising cost (R2.5 million), and listing and
compliance costs (R3.1 million).The resultant net loss and headline loss for
the year increased to R27.5 million and R27.4 million, respectively (2010:
R16.7 million and R16.7 million), equivalent to a loss and headline loss of
9.7 cps and 9.6 cps (2010: loss of 6.7 cps and 6.7 cps).
These results are consistent with management`s review and re-assessment of the
assets of the Group during the period under review and with its focus on
developing the Group`s worthwhile coal project portfolio.
The Group has negotiated loan funding facilities amounting to R40 million from
its two largest shareholders, Global PS Mining Investments Company Limited
("Global PS") (R32.5 million) and Yakani Resources Proprietary Limited
("Yakani") (R7.5 million). The loan facilities are in the form of unsecured
convertible loans, which bear interest at prime and mature in January 2012.
In accordance with the terms of the loan funding facilities, agreed upon after
the end of the financial year, the loans can either be repaid in cash or
converted into equity of Miranda. Any conversion of the loans to equity is
subject to the Company obtaining all shareholder and regulatory approvals
required to implement the conversion. The Board has approved a long-term
financing plan in the form of a capital raising by way of a rights issue to
all shareholders, which is anticipated to be effected in the foreseeable
future. Further details on the rights issue to shareholders will be announced
in due course.
3.1 Contingent liabilities
Management applies its judgement to the probabilities and advice it receives
from its attorneys, advocates and other advisers in assessing if an obligation
is probable, more likely than not or remote. This judgement application is
used to determine if the obligation is recognised as a liability or disclosed
as a contingent liability.
At year end the Company had the following major contingent liabilities:
1.Bank guarantees - R1,5 million
2.Claim for fees in respect of services rendered by Mr RJ Nel -
R0.2 million
3.SARS - PAYE investigation still ongoing - maximum R4.7 million
4.Stefanutti Stocks Mining Services - R70 million (see paragraph 8.2)
5.Labour related claims - R0.3 million
The Company is defending all the matters listed above, and do not expect that
any material liability will arise from the above contingencies.
4. SUSTAINABILITY AND TRANSFORMATION
Miranda has of late been entangled in legal dispute with the Department of
Mineral Resources ("DMR"). The board has resolved to follow an amicable
resolution process and to repair the relationship with the DMR. The board
believes a normal business relationship with the DMR is essential in ensuring
sustainable growth in the asset portfolio of Miranda.
Miranda believes that sustainability requires a multi-faceted commitment,
which extends from business practices, incorporates involvement with
communities affected by mining operations and continues after mining
operations have ceased.
5. BOARD OF DIRECTORS
The following changes occurred to the Board during the year under review:
Directors appointed during the year -
-Gilbert Phalafala (appointed 15 December 2010), non-executive director
-Daniel Lian (appointed 15 December 2010 ), non-executive director
-Parawut Kobboon (appointed 15 December 2010), non-executive director
-Moses Tshitangano (appointed 08 February 2011), non-executive director
-Pine Pienaar (appointed 18 July 2011), independent non-executive director
-Clive Knobbs (appointed 18 July 2011), independent non-executive director
-Andrew Johnson (appointed 01 August 2011), CEO
-Esther Johnson (appointed 02 September 2011), Financial Director
Directors resigning, retiring or suspended during the year -
-GW Poff (appointed 15 December), resigned 01 August 2011
-MD Cook (appointed 17 January 2008), resigned 01 August 2011
-AR Thompson (appointed 1 Jul 2007), retired by rotation and was not re-
elected at the last Annual General Meeting of the Company
-AM Botha (appointed 15 May 2009), retired by rotation and was not re-elected
at the last Annual General Meeting of the Company
-RJ Nel (appointed 7 December 2005), was suspended (please refer to paragraph
8.1).
6. OPERATIONAL REVIEW
6.1 Coal Division
During the period under review, Miranda Coal increased its stake in the
following projects:
Holder of Right Project Previous New
sShareholding shareholding
Street Spirit Trading Burnside 60% 77%
54 (Pty) Ltd
Applewood Trading 3 Boschhoek 52% 72%
(Pty) Ltd
Nungu Trading 695 Wasbank 62% 74%
(Pty) Ltd
Point Blank Trading Learydale 52% 64%
104 (Pty) Ltd
Management has embarked on a process of reviewing and re-assessing Miranda`s
coal asset portfolio.
During the financial year, Venmyn Rand (Pty) Limited (``Venmyn") was requested
to update its independent SAMREC-compliant Resource Statements as well as
SAMVAL-compliant Valuations of the six most advanced Mining and Prospecting
Right areas. The SAMVAL-compliant valuations below are indicative only and
have not been incorporated in the financial statements of the Group:
Holder of Project Valuation Valuation Change
Right (Sep 2010) (Oct 2011) in
Fair
Value
(R million) Fair Valua- Fair Valuation
value tion Value Approach
approach
With mine
plan
Sesikhona Sesikhona 88.2 Dis- 36.6 Mean of -51.6
Kliprand counted discounte
Collieries cash flow d cash
(Pty) Ltd flow &
market
approache
s
Other 173.7 130.8 -42.7
projects
Majestic Majestic 5.5 Market 6.8 Mean +1.3
Silver approach of
(Pty) Ltd used market
and
cost
approache
s
Simpson JV Uithoek 0.0 0.0 0.0
*
Street Burnside 94.6 68.4 -26.1
Spirit
Trading 54
(Pty) Ltd
Applewood Boschhoek 65.2 46.2 -18.9
Trading 3
(Pty) Ltd
Dartingo Yarl 8.4 9.4 +1.0
Trading 217
(Pty) Ltd
Total 261.9 167.4 -94.3
* The asset has been removed as Miranda does not own the asset.
A summary of the adjusted Resource Statements are given underneath (all
resources and reserves stated in million tonnes (mt)):
Holder of Project SAMREC Per 2010 Per Venmyn Change
Right category Ann Report (Oct 2011) (mt)
(mt) (mt)
Sesikhona Sesikho Measured - 2.8 +2.8
Kliprand na
Collieries
(Pty) Ltd
- 2.8 +2.8
Majestic Majesti Inferred 5.4 3.5 -1.9
Silver (Pty) c Indicated - 2.6 2.6
Ltd Measured - - -
5.4 6.1 0.7
Simpson JV Uithoek Inferred - - -
Indicated - -
Measured - -
- - -
Street Spirit Burnsid Inferred 16.6 3.1 -13.5
Trading 54 e Indicated 18.9 23.3 4.4
(Pty) Ltd Measured - 4.3 4.3
35.5 30.7 -4.8
Applewood Boschho Inferred - 3.2 3.2
Trading 3 ek Indicated 52.3 42.1 -10.2
(Pty) Ltd Measured - - -
52.3 45.3 -7.0
Dartingo Yarl Inferred 16.9 16.8 -0.1
Trading 217 Indicated - - -
(Pty) Ltd Measured - - -
16.9 16.8 -0.1
TOTAL 110.1 101.7 -8.4
Venmyn hereby confirms that it is an independent registered Competent
Person/Valuator and have reviewed and approved this release. Information
concerning all the above-mentioned coal projects is compliant with the Samrec
and Samval Code.
SESIKHONA
In 2010, Venmyn estimated a resource of 4.4 mt in situ applying geological
losses of 15% and a seam thickness cut-off of 0.5m. The resource was classed
to be in the measured category. This valuation was based on a reserve and mine
plan prepared by Stefanutti Stocks Mining Services, a division of Stefanutti
Stocks (Pty) Limited ("SSMS"), as at June 2010. The valuation result was that
the fair value of the Sesikhona project was R120.8 million with total saleable
tonnes of 3.6 million tonnes. Miranda Coal`s attributable value in the
Sesikhona prospect was therefore R88.2 million, and the anticipated life of
mine ("LOM") for the Sesikhona project was estimated at five years.
In 2011, the Board requested that Venmyn conduct an updated indicative and
independent mineral asset valuation on the Sesikhona project. Venmyn has now
estimated a resource of 2.8 mt (saleable: 2.6mt; previously: 3.6 mt saleable)
and the resource is classified in the measured category. Due to a 25% lower
assumed coal price and the reduced resource estimate, the fair value of the
Sesikhona project is now R50.1 million. Miranda Coal`s attributable value has
reduced to R36.6 million, and the anticipated LOM for the project is four
years.
Miranda has capitalised the cost relevant to the Sesikhona asset in the
Company`s statement of financial position. The adverse downward revision in
terms of resources and valuation had not previously taken into account the
mined out areas at Sesikhona; and now reflects the latest information made
available to the Board by Venmyn. The Board is evaluating all options
available to the Company on how best to optimally realise the current
attributable value of the asset.
UITHOEK
Shareholders were previously advised that Miranda had received notification of
the termination of a joint-venture and compensation access agreement in place
with the Simpson family, regarding the Uithoek property. The mining rights
have never been owned by Miranda and, therefore, in order for the Company to
ensure tenure, a section 11 transfer in terms of the MPRDA should have been
effected. In anticipation of the ceding of the prospecting right and/ or
mining right to Miranda, the Company had previously made good faith monthly
royalty payments to the Simpson family, which were supposed to be set-off
against future royalties payable on mining. The Board is seeking legal advice
on how best to proceed and therefore reserves its rights in this regard.
BOSCHHOEK
Shareholders have been advised that the Boschhoek Prospecting Right that was
awarded to Applewood Trading 3 (Pty) Limited ("Applewood"), which is a 72%-
owned subsidiary of Miranda Coal, is being challenged by the Minister of
Defence. The Minister of Defence is seeking relief to interdict Applewood from
proceeding with any prospecting activities and to have the DMR award of the
Prospecting Right to Applewood, reviewed. It is uncertain whether Miranda will
successfully defend the prospecting right and the Board has resolved to enter
into direct negotiations with the Ministry of Defence in an attempt to settle
the dispute.
6.2 Other Divisions
The review and re-assessment of the Group`s assets is still in progress and
will extend to non-coal divisions. The following actions were undertaken
during the period under review:
-Due to unsatisfactory exploration results, the Board decided to exit and/or
abandon the Group`s two diamond assets in Botswana, namely the Jwaneng joint
venture and the Mochudi project.
-The decision was also taken to end Miranda`s participation in the Tete gold
dredging project in Mozambique.
ROZYNENBOSCH
On 6 October 2011 shareholders were informed that the Board had obtained
material information regarding the Company`s Prospecting Right for its
Rozynenbosch lead, silver and zinc deposit located in the Northern Cape
Province of South Africa. The original application for the conversion of the
old order Prospecting Right was submitted on 28 April 2005 before Miranda
listed on the JSE Limited on 19 December 2005. The DMR has informed the
Company that the application was refused as far back as 5 July 2006.
In a letter sent by the DMR on 19 October 2011, the DMR unequivocally
confirmed to the Company that it had previously advised the Company and its
attorneys on numerous occasions that the appeal against the refusal of the
Prospecting Right was finalised on 26 March 2007 and was unsuccessful, and
that the appeal file was closed accordingly.
It was stated in the 2010 Annual Report that the asset could be impaired in
the event of the Prospecting Right not being granted to Miranda. The Board has
resolved to derecognise the Rozynenbosch intangible asset on its statement of
financial performance with effect from the 2007 financial year.
7. GROUP PROSPECTS
The Board is not satisfied with the manner in which the Group has unavoidably
applied its cash resources to defend litigations as opposed to developing the
assets during a time when the financial market participants have remained
mostly unaccommodating towards junior mining and exploration companies`
capital requirements. The loan funding commitment from Global PS and Yakani
is evidence of the support enjoyed by the Board for the continued assessment
and expeditious development of Miranda`s asset base. If the implementation of
the planned funding program (primarily the planned rights issue) succeeds, the
Board believes that the Company will have sufficient funds to successfully
continue trading in the normal course of business for at least the next 12-
months.
The Board looks forward to achieving steady progress in 2012 towards achieving
its set goals of stabilising its coal project pipeline.
8. LITIGATION STATEMENT
8.1 Business Rescue Application
Mr RJ Nel had served an application on Miranda in terms of which he, in his
capacity as a shareholder and alleged creditor of Miranda, has made
application to the North Gauteng High Court, Pretoria (the Court) in terms of
Section 131 of the Companies Act to place Miranda under supervision and to
commence business rescue proceedings (Business Rescue Application). The
parties are still in the process of exchanging affidavits and have not as yet
approached the Judge President for a court hearing date. The Board believes
the application is not in the best interest of the Company or its
stakeholders, and the Company will therefore vigorously defend the Business
Rescue Application. Shareholders will be advised as soon as further
information concerning the Business Rescue Application comes to the Company`s
attention.
8.2 Mining Dispute
As was previously reported, Stefanutti Stocks Mining Services were engaged as
subcontractors to mine the Sesikhona asset. During September 2010, mining
activity was halted due to a mining dispute that arose, and the parties have
referred the matter for arbitration. The pre-arbitration meeting was held on 3
November 2011, and the arbitration hearing has been set for 16 April 2012.
Shareholders will be updated as soon as new information comes to light. SSMS
claims an amount of R70 million, but the Company has a counterclaim.
8.3 Other Disputes
Shareholders are referred to the comments in the operational review pertaining
to Uithoek and Boschhoek.
In addition, the Company is currently defending the following actions which it
believes are without merit:
-A claim of R2.8 million for alleged commissions on the cancelled clawback.
-Action by Mr RJ Nel as explained in paragraph 3.1.
-A claim by Investment Facility Company 44 (Pty) Limited ("IFC") for
management fees.
-The Prospecting Right that was awarded to Applewood Trading 3 (Pty) Limited
("Applewood") is being challenged by the Minister of Defence. See paragraph
6.1 for further detail.
9. STATEMENT ON GOING CONCERN
The abridged financial statements have been prepared on the going-concern
basis since the Directors believe that the Group will continue as a going
concern. However, the matters referred to above and in paragraphs 2 and 3 may
cast significant doubt on the Group`s ability to continue as a going concern
and therefore the Group may not be able to realise its assets and discharge
its liabilities in the normal course of business. The Board is committed to
doing everything in its power to address the stated matters.
Miranda`s main objective is that of exploration of mineral resources and to
take up the worthwhile mineral resources up the value curve through further
development. Following the review of assets which revealed lower scale assets,
Miranda is clearly still at an initial exploration phase of its assets
development. It is still dependent on shareholder funding until its assets are
brought into production and start generating revenue and residual cash flow.
The ability of Miranda to continue as a going concern is dependent on the
following factors:
1. Various litigation matters against the Group being successfully defended.
2. The Rights issue being successfully implemented. The low share price
necessitates that the Company increase its authorised share capital in order
to ensure a meaningful capital raising. The availability of additional shares
and the related successful rights offer are subject to the shareholders`
approval and shareholders participating respectively. It is uncertain whether
the shareholders who are currently providing financial support through
bridging loans will waive the conditions to the loans or terminate the funding
following a breach of the loan terms (refer paragraph 3).
3. The Business rescue application being set aside. The Company currently
enjoys the financial support from its two major shareholders through the
approved loan facilities. The placing of the business under a business rescue
practitioner will constitute a material adverse event and breach of the
material conditions of the respective shareholders` loans.
10. DIVIDENDS
No dividends were recommended or declared for the financial year under review
(2010: nil).
Approved for and on behalf of the Board on 29 November 2011
LP Mokhobo A Johnson E Johnson
Chairman Chief Executive Officer Financial Director
30 November 2011
Centurion
CORPORATE INFORMATION: www.mirandaminerals.com
Company registered office:
Ground Floor, Pecanwood Building, The Greens Office Park, Charles de Gaulle
Crescent, Highveld Techno Park, Centurion
Company Postal Address:
PO Box 9215, Centurion, 0046
Company Contact Numbers:
Telephone: 012 665 4200
Fax: 012 665 4258
Email: info@mirandaminerals.com
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 30/11/2011 11:11:23 Produced by the JSE SENS Department.
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