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THE AFRIKANDER LEASE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1921/006955/06) Share Code: AFL
ISIN Code: ZAE000000253 ("Aflease" or "AFL" or "the company")
AFL UPDATE
2001 OPEN CAST PIT AND PROCESS PLANT UPGRADE
- Q.2 RESULTS
The Afrikander Lease Limited open cast pit and process plant upgrade plan
commissioned in March 2002 assumed full operational status in Q2 of 2002.
All operational parameters relating to the 165 000 tpm ROM through-put were
achieved and exceeded from the open cast pit, through the process plant and onto
pad 3 for each month of the quarter. However, percolation rates through pad 3
proved to be disappointing for the months of April and May but improved by June
and July to produce 4 758 oz (148 kg) for the month of July. This upgrade can
now be considered complete. Gold production is anticipated to continue improving
until March 2003 when the new CIL plant will be commissioned.
2002 CIL PLANT UPGRADE
The implementation of the new 2002 CIL plant upgrade plan has commenced and is
proceeding to schedule. The major items of capital equipment associated with the
upgrade have been secured which will enable the final design parameters of the
plant to be frozen and the consequential final designs concluded. The CIL plant
is scheduled to be operational in Q2 of 2003, which will have numerous benefits
for AFL as summarised:
* Increased monthly through-put exceeding 200 000 tpm - initial estimates are
230 000 tpm.
* Increased recovery from historically 75% to approximately 95%.
* Reduced cycle times from 6 months to 96 hours.
* Increased plant head grades as a consequence of facilitating the commencement
of mining the high grade underground reserves.
* Resolve the historical heap leach lock-up inventory by re-treating the 3,8
million tons on pads 1, 2 & 3 to recoup the gold lock-up on these pads.
* Recover a further estimated 20% or 900 kilograms of gold on pads 1, 2 & 3 (by
re-treatment of these pads), being the unrecovered gold in these pads.
* More than 200% increase in gold produced as a consequence of all of the above.
METALLURGICAL TEST WORK
Additional ongoing metallurgical test work undertaken by Metallurgical Design &
Management (Pty) Ltd (MDM), in conjunction with Lakefield Research Africa (Pty)
Ltd, continue to confirm the suitability of the Aflease ore for treatment by a
CIL plant. Results confirm a higher than anticipated percentage of free gold
for gravity separation. All test work indicates that 95% recovery should be
achievable.
Unaudited Consolidated Financial Results for the Six Months Ended
30th June 2002.
UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED
QUARTER TO QUARTER TO 6 MONTHS TO 6 MOTNHS TO YEAR TO
30 JUN 2002 31 MAR 2002 30 JUN 2002 30 JUN 2001 31 DEC 2001
Highlights:-
GOLD PRODUCED
AND SOLD:-
-KILOGRAMS 255 239 494 637 1206
-OUNCES 8,198 7,684 5,882 20,480 38,774
CASH OPERATING
COST STACKED
(RANDS PER
TON) 37.03 48.93 42.08 35.64 41.63
CASH OPERATING
COST:-
-RAND / KG 71,933 74,594 73,221 45,411 50,709
-US$ / OZ
218 205 212 178 184
CASH OPERATING
PROFIT
(R`000) 8,114 7,685 15,799 14,546 29,320
NET EARNINGS
(R`000) 4,821 4,475 9,296 7,708 16,057
HEADLINE AND BASIC EARNINGS
PER SHARE
(CENTS) 3.46 3.23 6.69 6.49 13.05
OPERATING RESULTS:-
TONNAGE
STACKED
(TONS) 495,298 364,366 859,664 811,622 1,468,857
GOLD PRODUCED
AND SOLD
(KG) 255 239 494 637 1206
AVERAGE GRADE
STACKED
(GMS/TON) 1.23 1.25 1.24 1.32 1.26
GOLD PRICE
RECEIVED:-
-RAND / KG
103,753 106,749 105,202 68,246 75,021
-RAND /
OZ 3,227 3,320 3,272 2,123 2,333
-US$ /
OZ 315 293 304 265 270
R`000 R`000 R`000 R`000 R`000
INCOME STATEMENT:-
REVENUE
26,457 25,513 51,970 43,473 90,475
CASH OPERATING
COSTS 26,471 22,166 48,637 36,112 72,921
CASH MOVEMENT IN
LOCK-
UP (8,128) (4,338) (12,466) (7,185) (11,766)
CASH OPERATING
PROFIT 8,114 7,685 15,799 14,546 29,320
AMORTISATION
AND
DEPRECIATION 2,487 2,319 4,806 3,596 7,551
NON-CASH MOVEMENT IN LOCK
-UP (961) (622) (1,583) (535) (837)
NET FINANCE
COSTS 934 783 1,717 1,998 3,193
CORPORATE COSTS /
OTHER 363 290 653 304 783
EXPLORATION
EXPENDITURE 470 440 910 1,475 2,573
PROFIT BEFORE
TAXATION 4,821 4,475 9,296 7,708 16,057
TAXATION - - - - -
NET PROFIT
FOR THE YEAR 4,821 4,475 9,296 7,708 16,057
RATIOS:-
EARNINGS PER
SHARE (CENTS):-
-CASH OPERATING
EARNINGS 5.82 5.56 11.38 12.24 23.83
-HEADLINE AND
BASIC 3.46 3.23 6.69 6.49 13.05
-FULLY
DILUTED 3.37 3.16 6.53 6.30 12.68
WEIGHTED AVERAGE
NUMBER OF
ORDINARY SHARES
IN ISSUE 139,473,901 138,295,333 138,887,830 118,868,930 123,029,857
The fully diluted earnings per share is based upon the dilutive effect of
employee share options.
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
30 JUN 2002 31 MAR 2002 31 DEC 2001 30 JUN 2001
R`000 R`000 R`000 R`000
ABRIDGED BALANCE SHEET:-
ASSETS
NON-CURRENT ASSETS:-
-MINING
ASSETS 118,363 117,245 115,548 98,322
-OTHER
ASSETS 3,351 2,501 1,923 0
-INVESTMENTS
9,216 8,857 8,379 7,329
130,930 128,603 125,850 105,651
CURRENT ASSETS:-
-INVENTORIES 49,225 40,299 33,376 26,977
-RECEIVABLES AND
PREPAYMENTS 12,321 5,518 10,484 6,685
-AMOUNTS OWING BY RELATED
THIRD PARTIES - - 114 -
-BANK AND CASH
BALANCES 19,738 18,235 17,940 2,883
81,284 64,052 61,914 36,545
TOTAL ASSETS 212,214 192,655 187,764 142,196
EQUITY AND LIABILITIES
CAPITAL AND RESERVES:-
-ORDINARY SHARE
CAPITAL 2,829 2,755 2,755 2,390
-SHARE
PREMIUM 130,481 118,763 118,763 90,797
-ACCUMULATED EARNINGS
/ (LOSSES) 18,266 13,445 8,970 621
151,576 134,963 130,488 93,808
NON-CURRENT LIABILITIES:-
-INTEREST BEARING
BORROWINGS 21,554 22,662 23,877 21,225
-REHABILITATION AND CLOSURE
COST OBLIGATIONS 4,500 4,500 4,500 4,500
-AMOUNTS OWING TO RELATED
THIRD PARTIES 3,094 3,269 4,056 1,979
29,148 30,431 32,433 27,704
CURRENT LIABILITIES:-
-TRADE AND OTHER
PAYABLES 19,713 11,496 13,024 13,279
-PROVISIONS 1,096 983 604 762
-CURRENT PORTION OF INTEREST
BEARING
BORROWINGS 4,942 4,815 5,217 3,031
-BANK OVERDRAFT
BALANCES 5,739 9,967 5,998 3,612
31,490 27,261 24,843 20,684
TOTAL EQUITY AND
LIABILITIES 212,214 192,655 187,764 142,196
UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED
QUARTER TO QUARTER TO 6 MONTHS TO 6 MOTNHS TO YEAR TO
30 JUN 2002 31 MAR 2002 30 JUN 2002 30 JUN 2001 31 DEC 2001
R`000 R`000 R`000 R`000 R`000
ABRIDGED CASH FLOW STATEMENT:-
CASH FLOW
GENERATED FROM /
(UTILISED BY) :-
-OPERATING
ACTIVITIES
(91) 3,688 3,597 4,855 4,266
-INVESTING
ACTIVITIES (4,814) (5,072) (9,886) (2,393) (15,992)
-FINANCING
ACTIVITIES
10,636 (2,290) 8,346 (245) 26,614
NET INCREASE
IN CASH AND
CASH
EQUIVALENTS
5,731 (3,674) 2,057 2,217 14,888
CASH & CASH
EQUIVALENTS
-AT BEGINNING
OF
PERIOD 8,268 11,942 11,942 (2,946) (2,946)
CASH & CASH
EQUIVALENTS
-AT END OF
PERIOD 13,999 8,268 13,999 (729) 11,942
STATEMENT OF
CHANGES IN
EQUITY:-
SHARE SHARE ACCUM TOTAL
CAPITAL PREMIUM (LOSS)/PROFIT EQUITY
BALANCE AT 31ST
DECEMBER 2000 2,369 89,853 -7,087 85,135
ISSUED DURING THE
PERIOD 21 - - 21
SHARE PREMIUM - 944 - 944
NET PROFIT FOR THE
PERIOD - - 7,708 7,708
BALANCE AT 3OTH JUNE 2001
2,390 90,797 621 93,808
ISSUED DURING THE
PERIOD 365 - - 365
SHARE
PREMIUM - 27,966 - 27,966
NET PROFIT FOR THE
PERIOD - - 8,349 8,349
BALANCE AT 31ST
DECEMBER 2001
2,755 118,763 8,970 130,488
ISSUED DURING THE
PERIOD - - - -
SHARE PREMIUM - - - -
NET PROFIT FOR
THE PERIOD - - 4475 4,475
BALANCE AT 3IST
MARCH 2002 2,755 118,763 13,445 134,963
ISSUED DURING THE
PERIOD 74 - - 74
SHARE PREMIUM - 11,718 - 11,718
NET PROFIT FOR THE PERIOD - - 4,821 4,821
BALANCE AT 30TH
JUNE 2002 2,829 130,481 18,266 151,576
UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED
QUARTER TO QUARTER TO 6 MONTHS TO 6 MOTNHS TO YEAR TO
30 JUN 2002 31 MAR 2002 30 JUN 2002 30 JUN 2001 31 DEC 2001
R`000 R`000 R`000 R`000 R`000
SUPPLEMENTARY INFORMATION:-
CAPITAL
COMMITMENTS
600 1,000 600 4,250 -
CAPITAL
EXPENDITURE
3,794 5,986 9,780 26,633 7,318
LONG TERM BORROWINGS:-
-FINANCE LEASES:-
-EXCAVATOR
984C 4,417 4,615 4,417 5,361 5,882
-EXCAVATOR
984C 4,059 4,314 4,059 4,778 5,081
-EXCAVATOR
994C 2,192 2,504 2,192 2,686 3,281
-ELUTION PLANT - - - 376 1,088
-EXCAVATOR
974B x 2 6,904 7,120 6,904 7,089 -
17,572 18,553 17,572 20,290 15,332
LESS:-
SHORT-TERM
PORTION
(4,942) (4,815) (4,942) (5,217) (3,031)
12,630 13,738 12,630 15,073 12,301
THE ABOVE FINANCE
LEASES ARE
REPAYABLE OVER
PERIODS VARYING
FROM ONE TO FIVE
YEARS.
LOAN-HEAP LEACH
PLANT:-
8,924 8,924 8,924 8,804 8,924
THE ABOVE LOAN IS REPAYABLE IN
2005 AND BEARS INTEREST AT A RATE
OF 15.25% UNTIL 31/03/2002,
THEREAFTER THE INTEREST WILL BE
RE-NEGOTIATED.
TOTAL LONG-TERM
BORROWINGS
21,554 22,662 21,554 23,877 21,225
SECURITY:-
The loan for the heap-leach plant is secured by R8m of the Afrikander Lease
Limited`s equipment,cession of mineral rights for an amount of R11m and by a
pledge and cession of all short-term insurance policies covering the heap leach
plant.
Notes to the financial statements:-
- The same accounting policies have been applied to the current year as were
used in the prior year`s annual financial statements.
- These financial results have been compiled in accordance with South African
statements of generally accepted accounting practise.
- No dividend has been proposed or declared for the period under review.
OPERATIONAL AND FINANCIAL HIGHLIGHTS
1 Profit before tax increased by 7,5% from R4 474 million (Q1, 2002) to R4 819
million (Q2, 2002).
2 Tons stacked and leached for the quarter increased by 36% from 364 366 tons
(Q1, 2002) to 495 298 tons (Q2, 2002).
3 Gold produced and sold for the quarter increased by 7% from 239 kilograms (Q1
2002) to 255 kilograms (Q2 2002).
4 The raising of approximately R140 million cash to fund the 2002 CIL upgrade
plan has been concluded, irrevocable letters of commitment received from the
Jipangu Inc (Tokyo, Japan) and the upgrade plan implemented.
OPERATIONAL CHALLENGES
1 The average Rand gold price for the quarter decreased by 3% from R106 837/kg
(Q3, 2002) to R103 728/kg (Q2, 2002).
2 First indications suggest that as a consequence of the finer crush percolation
rates on pad 3 are lower than expected. These percolation rates improved towards
the end of the quarter but unfortunately reduced the gold poured for the
quarter.
3 Management is pleased to announce that retreatment of the 12mm sulphide ore
alluded to during the previous quarterly results commenced in June. Initial
indications are that the process of retreatment will be successful. Full
details with regards to the success of the retreatment process will be announced
during the third quarter results.
OUTLOOK
1 All production parameters relating to the now completed and commissioned 2001
upgrade auger well for improved performance for the future. Gold produced during
the month of July achieved 4 758 oz (148 kg).
2 The 2002 CIL plant upgrade plan has been initiated and is scheduled to be
commissioned in the Q2 of 2003.
3 The implementation of the 2002 plan includes numerous improved operational
parameters which will result in a greater than 200% increase in gold production
by Q2, 2003.
4 The underground mining development of Bonanza has commenced and is proceeding
to schedule.
5 The upgrading of the AFL ADR listing from level 1 to level 2 on the NYSE, has
commenced and should be completed by Q1 2003.
6 The successful negotiations with Jipangu have made The Afrikander Lease Ltd
shares indirectly accessible on the Tokyo Stock Exchange, which will have a
positive influence on the share.
7 Conclusion of ongoing metallurgical test work undertaken by Metallurgical &
Design Management (Pty) Ltd (MDM), in conjunction with Lakefield Research Africa
(Pty) Ltd, confirms that recoveries of 95% in the CIL plant are anticipated.
DIVIDEND POLICY
The board of directors has adopted a dividend policy in terms of which one third
of all annual profits will be declared as a dividend.
On behalf of the Board
P E Skeat J Nortier
Houghton
27 August 2002
Corporate Sponsor
Gensec Bank
Date: 27/08/2002 05:20:04 PM Produced by the JSE SENS Department
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