| Tue 3 Jul 2001, 0:00 | | Otr Mining Limited: Interim Financial Statements |
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OTR MINING LIMITED
Registration number 1995/006508/06
("OTR" or "the company")
INTERIM FINANCIAL STATEMENTS
FOR THE 12 MONTHS ENDED 28 FEBRUARY 2001
INCOME STATEMENT REVIEWED
for the twelve months ended 28 February 2001
Unaudited Audited
February February
2001 2000
R'000 R'000
Revenue - -
Operating loss (4 638) (5 589)
Depreciation/amortisation (2 681) (1 159)
Interest received 96 9
Interest paid (85) (323)
Loss before taxation (7 308) (7 062)
Accumulated loss beginning of period (17 729) (10 667)
Accumulated loss end of period (25 037) (17 729)
CASH FLOW STATEMENT REVIEWED
for the twelve months ended 28 February 2001
Unaudited Audited
February February
2001 2000
R'000 R'000
Cash utilised in operating activities (4 586) (853)
Interest received 96 9
Interest paid (85) (323)
Net cash flow from operating activities (4 575) (1 167)
Property, plant and equipment acquired (4) -
Proceeds on disposal of fixed assets (180) 2 086
Subsidiaries acquired (31 335) -
Net cash flow from
investment activities (31 519) 2 086
Proceeds from issue of share capital 39 600 -
Proceeds from/(payment of)
Long-term liabilities 329 (786)
Proceeds from/(payment of)
Short-term liabilities (8) (303)
Net cash flow from financing activities 39 921 (1 089)
Decrease in cash and cash equivalents 3 827 (170)
Cash and cash equivalents at
beginning of period (108) 62
Cash and cash equivalents at
end of period 3 719 (108)
BALANCE SHEET REVIEWED
as at 28 February 2001
Unaudited Audited
February February
2001 2000
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 2 066 2 835
Intangible assets - Mineral rights 1 458 1 527
Intangible assets - Goodwill on
Consolidation 29 768 -
Total non-current assets 33 292 4 362
CURRENT ASSETS
Accounts receivable - 270
Loans receivable 8 -
Cash and cash equivalents 3 719 -
Total current assets 3 727 270
Total assets 37 019 4 632
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 58 945 19 345
Accumulated loss (25 037) (17 729)
Total capital and reserves 33 908 1 616
NON-CURRENT LIABILITIES
Long-term liabilities - 246
Total non-current liabilities - 246
CURRENT LIABILITIES
Short-term portion of
long-term liabilities 698 393
Accounts payable 2 129 2 269
Loans payable 284 -
Bank overdraft - 108
Total current liabilities 3 111 2 770
Total equity and liabilities 37 019 4 632
Issued ordinary shares 52 764 586 19 764 586
Weighted number of shares
issued 36 264 586 19 764 586
Headline earnings/(loss) per
share (cents) (20) (36)
Earnings/(Loss) per share (cents) (20) (36)
STATEMENT OF CHANGES IN EQUITY REVIEWED
for the period ended 28 February 2001
Accu-
Share Share mulated
capital premium loss Total
R'000 R'000 R'000 R'000
Balance at
1 March 1999 1 19 344 (10 667) 8 678
Net loss for
the period (7 062) (7 062)
Balance at
1 March 2000 1 19 344 (17 729) 1 616
Net loss for
the period (7 308) (7 308)
Issue of
share capital 2 39 598 39 600
Balance at
28 February 2001 3 58 942 (25 037) 33 908
NOTES TO THE FINANCIAL STATEMENTS
at February 2001
1. ACCOUNTING BASIS
the financial statements are prepared on the historical cost basis in
accordance with Statements of generally accepted accounting Practice using
the same accounting policies and methods of computation as those in prior
year's annual financial statements.
These statements comply with the south african statement of generally
accepted accounting Practice AC 127.
2. ACCOUNTS PAYABLE
The accounts payable totaling R2 129 000 shown under current liabilities in
the balance sheet include inter alia provision for audit fees of R105 000,
provision for the RK1 project circular costs of R700 000, accruals of R693
653, trade creditors of R161 639 and provision for repo losses on mechanical
equipment of R271 901.
REVIEW AND COMMENTS ON CURRENT OPERATIONS
1. Palmietfontein
The prospecting permit in terms of the Mining Act was approved and granted
early in January 2001, and meetings with the Bakubung Tribal Authority and
Land Commission were held and the necessary permission to commence with the
prospecting operations obtained.
The main objectives of the drilling programme are as follows:
- to determine whether the platinum group elements previously identified by
Gencor extends to near surface, where it would be amenable to open-cast
mining followed by shallow underground mining; and
- to evaluate the mineralisation in terms of widths, grades, dips, strike,
structural disturbances and metallurgical response.
Geoserve (Pty) Limited, the diamond drill contractors started drilling on 1
February 2001, and a total of 718.63 metres of diamond drilling on six sites
were completed during the reporting period. Percussion drilling of some
shallow holes varying in depth from six to 23 metres was carried out so as
to define the Bushveld/Transvaal contact.
2. Extension of the expiry date of the OTR Options
The delay in commencement of the exploration and drilling programme was a
result of the delay in obtaining the prospecting permit and the clearance by
the Land Commission has resulted in the need to extend the expiry date of
the OTR options that were granted to the OTR shareholders at the time of the
Britsaf Trading and Investment Company (Pty) Limited ("Britsaf")
acquisition. This issue is addressed in a circular being prepared for the
holders of the OTR Options and is to be tabled before a meeting of such
Option holders.
3. Kroondal Tailings Dump (The RK1 Project)
The RK1 project consortium led by GB Mining (Pty) Limited ("GB Mining")
has finalised the financial participation in the joint venture. The results
of the Mintek metallurgical test work on a 100 tonne bulk sample of the
500,000-ton tailings dump are positive. Additional tonnages are being
secured. The RK1 project phase 1 plan is to build a 25,000-ton per month
plant during the initial start up period and to expand to 50,000 tons per
month during the second phase. The details of the project is the subject of
a circular being prepared by the company and to be approved by a meeting of
it's shareholders which is expected to be held in August 2001.
4. Klein Letaba/Giyani area
The operations in the Klein Letaba area have been placed on a care and
maintenance programme. Arrangements with the Department of Minerals and
Energy for the redeployment of the mineral rights to interested parties are
underway.
5. Electronic STRATE environment
As of 27 August 2001 the OTR shares will be transferred to the STRATE
system on the JSE Securities Exchange South Africa ("JSE"). Documentation
with regard to the schedule of events and the effect on shareholders is
included with this review package.
6. General
This interim report has been the subject of a review by our auditors,
Moore Stephens, Registered Accountants and Auditors ("Moore Stephens"), who
have performed this review in accordance with the guideline entitled
"Guidance for Auditors on Review of Interim Financial Information", issued
by the South African Institute of Chartered Accountants.
The objective of the review was to enable Moore Stephens to report that
nothing came to their attention that caused them to believe that the interim
financial information needs modification, so as to fairly present, in
accordance with Statements of Generally Accepted Accounting Practice, the
financial position of the company at 28 February 2001 and the results of its
operations and cash flow information for the period then ended. It should be
recognised that their review did not constitute an audit where a high level
of assurance is expressed on the fair presentation of the interim financial
information. Accordingly, Moore Stephens expressed only a moderate level of
assurance on the fair presentation of the interim financial information.
Moore Stephens modified their report to include:
1. A qualification: "The statements have been prepared on the basis of
accounting principles applicable to a going concern. This basis presumes
that funds will be available to finance future operations and that the
realisation of assets and settlement of liabilities, contingent obligations
and commitments will occur in the ordinary course of business. The company's
ability to continue as a going concern is dependent on the resumption of
future profitable operations and the continuation of existing levels of
finance by major creditors and financiers, until the company is able to meet
its obligations in the ordinary course of business. Accordingly, the
financial statements do not include any adjustments relating to the
recoverability and classification of assets or to the amounts and
classification of liabilities, that might be necessary if the company is
unable to continue as a going concern."
2. An emphasis of matter: "Without further qualifying our opinion above, we
wish to draw attention to the fact that these interim financial statements
refer to 52 764 586 ordinary shares in issue. The company erroneously issued
a further 11 000 000 shares, for which adequate cash value was not received,
as required in the circular to shareholders, dated 25 July 2000 and as
approved by the members in special general meeting of 16 August 2000."
In terms of the acquisition approved by shareholders on 16 August 2000,
OTR acquired the entire issued share capital of Britsaf for the issue of 44
000 000 consolidated OTR shares. In terms of the agreement recording the
acquisition, the Britsaf vendors warranted that Britsaf would be possessed
of certain assets, including cash resources of approximately R21 884 000. As
a result of time delays in obtaining JSE approval for the transaction and
the circular convening the shareholders meeting to approve the transaction,
approximately R13 000 000 of such cash resources was withdrawn.
Notwithstanding such shortfall, the full amount of shares was issued. When
the shortfall became apparent, an amount of 11 000 000 shares (being the
value of the shortfall) was withheld and retained by OTR's attorneys in
trust pending remedy by the Britsaf vendors of the breach.
The Britsaf vendors have been unable to make good the shortfall, but have
arranged instead for OTR to acquire an interest participation in the
transaction referred to in paragraph 3 above. OTR may fund its
participation, in part, by the delivery to GB Mining of the said 11 000 000
shares. OTR will have to issue approximately a further 17 750 000 shares for
it's participation. OTR is satisfied that it will receive full value for the
11 000 000 shares and that the acquisition of its shareholding in RK1 fully
compensates OTR for the shortfall in the cash resources arising out of the
Britsaf transaction.
The directors of OTR are satisfied that OTR shareholders have not been
prejudiced by the said sequence of events. If OTR shareholders, at the
general meeting convened for that purpose, elect not to vote in favour of
the resolutions to ratify OTR's participation in the RK1 project, then the
said 11 000 000 shares will be cancelled.
The JSE have been informed of the company's intentions and are in
agreement therewith.
A copy of the qualified review report is available for inspection at the
registered office of the company.
7. DIVIDENDS
No dividend is recommended by the Directors.
3 July 2001
Board of Directors:
R A Holding, G J De Decker, A Gardner*, R van Zanten
*British
Physical address:
Tramore House, 3 Waterford Office Park, Fourways, 2055
Registered address:
PO Box 226, Mondeor, 2110
Transfer secretaries:
Mercantile Registrars, 11 Diagonal Street, Johannesburg, 2001
