| Mon 2 Apr 2001, 0:00 | | Messina - Audited Preliminary Results |
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Messina Limited
and its subsidiaries
(Incorporated in the Republic of South Africa)
(Registration number 1950/035912/06)
("Messina")
Audited Preliminary Results For The Year Ended 31 December 2000
Audited Consolidated Income Statement
FOR THE PERIOD ENDED 31 DECEMBER 2000
Company Group
1999 2000 2000 1999
(12 Months) (18 Months) (18 Months) (12 Months)
to 30 June to 31 December to 31 December to 30 June
R R R R
9 957 838 8 491 550 Income 9 074 505 9 957 838
(1 724 046) (1 122 871) Operating expenses (2 107 119) (2 861 203)
- - Exceptional item 4 905 232 -
8 233 792 7 368 679 Profit before tax 11 872 618 7 096 635
(2 470 138) (2 246 424) Taxation (2 342 277) (2 470 138)
5 763 654 5 122 255 Net profit 9 530 341 4 626 497
Earnings per
share (cents)
basic 74 36
headline 36 36
Audited Consolidated
Balance Sheet At 31
December 2000
Company Group
1999 2000 2000 1999
R R R R
Assets
16 288 528 16 288 528 Non-current assets 51 088 229 15 107 771
Property, Plant and
- - Equipment 15 349 181 15 107 751
- - Development costs 35 062 028 -
16 288 528 16 288 528 Interest in
subsidiaries - -
- - Investments 677 020 20
59 801 892 65 397 485 Current Assets 34 887 693 59 809 567
- Receivables and
265 909 prepayments 4 336 218 7 675
- Current loan
account to
40 232 580 subsidiaries - -
- 720 058 Current tax assets 720 058 -
59 801 892 24 178 938 Cash and cash
equivalents 29 831 417 59 801 892
76 090 420 81 686 013 85 975 922 74 917 338
Equity and Liabilities
74 660 039 79 782 294 Capital and 76 750 567 72 118 301
Reserves
6 482 447 6 482 447 Ordinary shares 6 482 447 6 482 447
22 811 027 2 2 811 027 Share premium 2 811 027 22 811 027
45 366 565 50 488 820 Reserves 47 457 093 42 824 827
Non-current
liabilities
- - Environmental 2 005 000 1 328 000
obligations
1 430 381 1 903 719 Current 7 220 355 1 471 037
liabilities
524 953 1 903 719 Trade and other 7 202 485 565 609
905 428 - payables
Current tax
liabilities 17 870 905 428
76 090 420 81 686 013 85 975 922 74 917 338
Audited Consolidated Statement of Changes in Equity
for the period ended 31 December 2000
Reserves
Share Share Capital Retained
capital premium redemption earnings Total
R R R R R
Balance at
1 July 1998 6 482 447 22 811 027 6 899 825 31 298 505 67 491 804
Net Profit/(Loss)
for the year 4 626 497 4 626 497
Balance at
30 June 1999 6 482 447 22 811 027 6 899 825 35 925 002 72 118 301
Balance at
1 July 1999 6 482 447 22 811 027 6 899 825 35 925 002 72 118 301
Net Profit/(Loss)
for the year 9 530 341 9 530 341
Exceptional item (4 898 075)
Balance at
31 December
2000 6 482 447 22 811 027 2 001 750 45 455 343 76 750 567
Audited Consolidated Cash Flow Statement
for the period ended 31 December 2000
Company Group
1999 2000 2000 1999
(12 Months) (18 Months) (18 Months) (12 Months)
R R R R
Cash flow from
operating activities
8 233 792 7 368 679 Profit before tax 11 872 618 7 057 000
Less: Profit on sale
- - of subsidiary (4 905 232) -
(9 957 838) (8 491 550) Less: Finance income (8 811 060) (9 958 000)
(1 724 046) (1 122 871) Profit from (1 843 674) (2 901 000)
operations
(102 607) (39 119 723) Changes in working 2 315 490 (103 000)
capital
20 500 (40 498 489) Trade and other (4 328 543) 24 000
receivables
(123 107) 1 378 766 Payables 6 644 033 (127 000)
9 957 838 8 491 550 Plus: Finance income 8 811 060 9 958 000
(1 817 467) (3 871 910) Less: Taxation paid (3 949 892) (1 818 000)
- - Plus: Depreciation 30 430 -
Net cash flows from
6 313 718 (35 622 954) operating activities 5 363 414 5 136 000
- - Cash flows from (36 010 889) (9 800 000)
investment activities
Purchase of property,
- - plant and equipment (271 861) -
Increase in
- - development costs (35 062 028) -
Purchase of
non-current
- - investment (677 000) -
Net cash effect
- - of sale of Premier - (9 800 000)
Cash flows from
8 821 900 - activities financing 677 000 -
8 821 900 - Increase in loan - -
from subsidiary
Increase in
environmental
- - obligations 677 000 -
Net increase/
(decrease) in
15 135 618 (35 622 954) cash and cash (29 970 475) (4 664 000)
equivalents
Cash and cash
equivalents
44 666 274 59 801 892 at beginning of 59 801 892 64 465 892
period
Cash and cash
equivalents
59 801 892 24 178 938 at end of year 29 831 417 59 801 892
Explanatory Notes to the Financial Statements
for the period ended 31 December 2000
Company Group
1999 2000 2000 1999
(12 Months) (18 Months) (18 Months) (12 Months)
R R R R
1. Principal accounting
policies
The preliminary financial
statements are prepared
on the historical cost
basis.
The principal accounting
policies used by the
group are consistent
with those of the
previous period except
for the method in which
environmental obligations
were provided for.
Environmental obligations
are now provided for in
accordance with AC 133.
The effect of this change
in accounting policy is
immaterial.
The preliminary financial
statements have been
compiled in compliance
with AC 127.
2. Exceptional item
When SouthernEra Resources
Limited acquired Messina
Limited, certain non-core
subsidiaries were
not acquired.
This has resulted in a
release of group
provisions of
R4,9 million against
certain underlying assets
in these subsidiaries which
are no longer required.
3. Earnings per share
Basic earnings per share
are calculated by dividing
the net profit attributable to
shareholders by the
weighted average number of
ordinary shares in issue
during the year.
Net profit attributable
to shareholders 9 530 341 4 626 497
Weighted average number of
ordinary shares in issue 12 964 894 12 964 894
Basic earnings per share
(cents) 73,5 35,7
The calculation for
headline earnings per share
is based on the basic
earnings per share
calculation except for the
following adjustments:
Net profit attributable
to shareholders 9 530 341 4 626 497
Exceptional items (4 905 232) -
Headline earnings 4 625 109 4 626 497
Headline earnings per
share (cents) 35,7 35,7
MESSAGE TO STAKEHOLDERS
Change in financial year-end.
The company's financial year-end was changed from end June to end December to
coincide with that of SouthernEra Resources Limited and accordingly, audited
results for the 18 months ended December 2000 are reported against the twelve
months ended June 1999.
Financial
Income of R9 million for the year ended 31 December 2000 consisted mainly of
interest income on cash balances held by the company. The decline in interest
received was due to the lower average interest rates during the period and cash
balances being reduced as expenditure was incurred in developing the Voorspoed
property. When SouthernEra International Limited acquired its 70.4% interest in
Messina Limited, certain non-core subsidiaries were not acquired. This has
resulted in a release of group provisions of R4.9 million against certain
underlying assets in these subsidiaries which are no longer required.
Non-current assets increased by R36 million whilst current assets decreased by
R25 million, as a result of the costs incurred during the latter half of 2000
in recommissioning and developing of the Voorspoed Property.
Non-current liabilities increased by R677 000 as a result of additional
environmental obligations associated with current activities. Current
liabilities increased by R6.6 million largely as a result of an increase in
trade creditors offset by a reduction in tax liabilities at the end of the
period.
Operations
Messina Limited's wholly owned subsidiary, Messina Platinum Mines Limited holds
three mineral lease areas, namely Voorspoed, Doornvlei and Zebediela which
comprise the Messina Project, situated in the vicinity of Lebowakgoma. These
lease areas cover 16 kilometres of non-contiguous strike length of both the UG2
and Merensky platinum reefs.
In February 2000 SouthernEra Resources Limited obtained an independent bankable
feasibility study which projected for the Voorspoed project area a 36.3% IRR
and a net present value of R742 million at a 10% discount rate, assuming an
average platinum price of US$448 per ounce and a palladium price of US$498 per
ounce. The feasibility study also predicted an average annual production rate
of 159,000 ounces of 5PGMs + gold with an average operating cost of US$147 per
ounce of payable metal (net of nickel and copper by-product credits) and a mine
life of 16 years, down to the 575 metre level.
A budget of R31.5 million was approved in May 2000 to commence project
development and to satisfy three main objectives: (1) a reduction of the
overall project development schedule; (2) to remove a bulk sample for
additional testwork; and (3) to evaluate alternative mining methods to those
proposed in the feasibility study.
The results of the bulk sampling exercise positively confirmed the feasibility
study parameters in terms of head grade and recovery rates. The testwork also
confirmed the opportunity to replace the milling circuit in the process plant
with a run-of-mine ball mill which will not only reduce capital and operating
costs but will also enhance recoveries. The concentrator is in the process of
being redesigned to accommodate these recent developments.
Following the extraction of the bulk sample, underground development continued
and production stopes were being established.
In December 2000, Messina Limited awarded a mandate to Rand Merchant Bank to
arrange and structure a non-recourse loan for the construction and start-up of
the feasibility contemplated operation. Peak funding requirements for the
project, exclusive of the financing costs, are estimated to reach R495 million.
This senior debt was not yet finalised at the end of the financial year. It can
however be reported that final credit committee approval is expected in April
from Rand Merchant Bank.
Prospects
In March 2001, the Board approved the immediate implementation of a new
Accelerated Production Initiative ("API"). The API is expected to generate
saleable PGM concentrate as early as August 2001, approximately one year
earlier than originally planned. Financing for the API has been obtained by way
of an unsecured loan up to R46 million which is independent of the project
financing being arranged by Rand Merchant Bank. Interest payments on the loan
at JIBAR plus 6% commence from first drawdown. Capital repayments will commence
in January 2002, as if amortizing the loan over a five-year period, with the
outstanding amount being repaid by no later than June 30, 2003 by means of a
lump sum settlement.
The API financing will be used to purchase a concentrator plant capable of
processing approximately 20,000 tons of ore per month and is estimated to
generate approximately R8 million per month in cash flow before debt service.
Upon completion of the full-scale operation at Voorspoed, the API concentrator
can be used to process bulk samples from the adjacent Doornvlei property.
In addition to the above, it can be reported that SouthernEra Resources
Limited, through a bought deal equity financing proposal on the Toronto Stock
Exchange is to raise C$ 8.25 million (R41.66 million) which will be utilised to
maintain the momentum of the Voorspoed project.
Dividend
No dividend has been declared for the 18 months ended December 2000.
Strate
The Company has been selected by STRATE (Share Transactions Totally Electronic)
to commence dematerialisation, the conversion of share certificates into an
electronic record, on 2 July 2001. Further correspondence in this regard will
be circulated to shareholders in the near future.
For and on behalf of the board
C.M.H. JENNINGS P.C. EVANS
Chairman Director
30 March 2001
