| Wed 17 Apr 2002, 0:00 | | S A Mineral Resources Corporation Limited - Review |
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Results for the year ended 31 December 2001
S A Mineral Resources Corporation Limited
Registration number 1993/000460/06 - Incorporated in the Republic of South
Africa
JSE share code : SAM ISIN number : ZAE000012019
Reviewed Provisional Group Results for the year ended 31 December 2001
Balance Sheet
(R000's)
Reviewed Audited
ASSETS 31 Dec 01 31 Dec 00
Non-current assets 15 610 16 085
Property, plant and equipment 15 610 16 085
Current assets 1 902 1 847
Inventory 452 560
Trade and other receivables 1 149 752
Cash and cash equivalents 301 535
Total assets 17 512 17 932
EQUITY AND LIABILITIES
Capital and reserves 6 822 10 917
Share capital 2 844 2 844
Share premium 21 150 21 150
Accumulated loss (17 172) (13 077)
Non-current liabilities
Long term liabilities 7 319 4 870
Current liabilities
Trade and other payables 3 371 2 145
Total equity and liabilities 17 512 17 932
Income Statement Reviewed Audited
(R000's) 2001 2000
Revenue 8 772 1 298
Costs and expenses (11 978) (3 837)
Loss from operating activities (3 206) (2 539)
Net finance cost (889) ( 337)
Loss for the period (4 095) (2 876)
Cash Flow Statement Reviewed Audited
(R000's) 2001 2000
Net cash flows from operating activities (2 437) (3 336)
Net cash flows from investment activities ( 246) (3 524)
Net cash flows from financing activities 2 449 3 852
Net decrease in cash and cash equivalents ( 234) (3 008)
Cash and cash equivalents at the
beginning of the period 535 3 543
Cash and cash equivalents at end of
period 301 535
Ordinary shares in issue (000's) 284 419 284,419
Net asset value per share (cents) 2,40 3,84
Net loss per share (cents) 1,44 1,01
Headline loss per share (cents) 1,44 1,01
Statement of Changes in Equity
(R000's)
Share Share Accum- Total
capital premium ulated
deficit
Balance at 31 December 1999 2 844 21 150 (10 201) 13 793
Net loss for the year 2000 (2 876) (2 876)
Balance at 31 December 2000 2 844 21 150 (13 077) 10 917
Net loss for the year 2001 (4 095) (4 095)
Balance at 31 December 2001 2 844 21 150 (17 172) 6 822
Commentary
Nature of business
Samroc is a resources company engaged in the beneficiation of local
manganese ores into manganese chemicals. It owns the rights to an extensive
manganese deposit near Graskop, Mpumalanga and operates the Greenhills
manganese chemicals plant, which is located adjacent to the mineral deposit.
Comment on results
As projected in Samroc's annual report for 2000, the Company made a loss for
the year under review during the build up of production from the Greenhills
plant that was commissioned in mid 2000. However, the second half of the
year showed a considerable improvement over the first half with sales
revenue increasing by 87%. Sales volumes of sulphate products increased
by 58% and oxide products by 251%. This resulted in the Greenhills plant
breaking even on an operating level for the second half of the year.
Export sales during the year were lower than planned. This resulted in
working capital strain throughout the year and into the first quarter of
2002. This was offset in part by the introduction of additional loan
capital in mid 2001 by major shareholders and in part by the issue of 8
million new ordinary shares at 5 cents each to a UK investor in March 2002.
Operational review
The Greenhills plant was originally designed to produce 5 160 tonnes per
year of manganese sulphate powder. During 2001 Samroc found that it was
able to sell significant quantities of manganese sulphate solution and
manganous oxide, both of which are interim products in the process to
produce the sulphate powder. The plant is accordingly being reconfigured
and upgraded to take account of the new sales mix. It is expected that
sales from the reconfigured plant will reach capacity during 2003, at which
stage it may become necessary to expand the plant.
Product quality throughout the year was excellent chemically but some export
orders experienced compaction en route resulting in claims from two
customers. A provision has been allowed for the settling of these claims.
No such problems were experienced with products sold locally.
Markets
Following extensive testing during 2001 by Dow Agrosciences South Africa of
Samroc's manganese sulphate solution, an agreement was concluded in February
2002 between the companies for Samroc to be sole supplier to Dow of this
product. This equates to approximately 45% of Greenhills' reconfigured
capacity.
This agreement is welcome to Samroc as it provides a stable monthly income
and facilitates planning and production scheduling. Similar agreements with
other potential customers are under discussion. In addition to its
established markets in Scandinavia and the UK, Samroc has taken steps to
open new markets in Namibia, Japan and the USA.
Prospects
The directors are confident that the Greenhills plant will show a profit in
the year ending 31 December 2002. The longer term prospects for the
Greenhills plant are extremely good with potential demand from customers
exceeding capacity.
Establishment of precious metals joint venture
In order to position itself to take advantage of the coming changes to
minerals legislation in South Africa and as part of a strategy for future
diversification, Samroc has signed a letter of intent with Geo Active (Pty)
Limited to examine junior mining opportunities, initially within
the gold sector.
EMD project
During 2001 a prefeasibility study into the production of electrolytic
manganese dioxide was
completed and progress was made towards funding a bankable study and pilot
plant.
Accounting Policy and Review by Auditors
The financial statements have been prepared in accordance with the South
African Statements of Generally Accepted Accounting Practice, which are
consistent with those of the previous year and have been reviewed by the
Groups' auditors, Ernst and Young, in accordance with the requirements of
the South African Auditing Standards SAAS 910 on Engagements to review
financial statements.
In their review report the auditors state that for the company to continue
as a going concern, it is dependant upon the continued financial support of
its major shareholders. The review report of the auditors is available for
inspection at the company's registered office.
Registered office : Block 3, Southern Implants Office Park, 1 Albert Road,
Irene 0062 Transfer Secretaries : Mercantile Registrars, PO Box 1053,
Johannesburg 2000
Company Secretary : J M Walkenshaw
Directors : B H Christie*(Chairman), N R Kaner*(Managing), KJJ de
Rooster,** PJ Cronshaw, JJ Byrne.*** (*British, **Belgian, ***Australian)
For and on behalf of the board
B H Christie N R Kaner
Executive Chairman Managing Director
17 April 2002
