| Mon 14 Apr 2003, 10:12 | | The Afrikander Lease Limited - AFLEASE CONSOLIDATE |
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The Afrikander Lease Limited
(Incorporated in the Republic of South Africa)
AFL (JSE) AFKDY (NASDAQ)
(Registration Number 1921/006955/06) Share Code: AFL
ISIN Code: ZAE000000253 ("Aflease" or "the company" or "AFL")
AFLEASE CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 AND
CHANGES TO THE BOARD
Financial and Operational Overview
* Unhedged profile realises the full benefit of a 38% increase in the gold price
during the 2002 financial year.
* Cash operating profit of R28.02 million (2001: R 29.23 million)
* Headline earnings per share of 10.53cps (2001: 13.05cps)
* Cash cost averaging US$ 233/oz (2001: US$184/oz)
* Earnings decrease marginally from R16.1million to R15.6million in 2002. The
increased gold price largely off-set the impact of increased cash costs.
* The 54% increase in the cash cost per kg of production is attributed to
unacceptably high failure rate of equipment during 2002, which resulted in
increased mining costs and reduced gold production. Management is confident that
this issue has been addressed through the increase in the capacity of equipment
and increased recoveries expected from the new metallurgical plant.
* Additional open cast mining equipment of R45 million and metallurgical plant
and equipment of R50 million mainly resulted in the increase in mining assets of
approximately R110 million.
* The current mine plan has resulted in a reclassification of the deferred leach
pad cost from current assets to long term assets. This resulted in an increase
in the long term leach pads asset of approximately R40 million. The carrying
value of the leach pads was confirmed by an independent survey.
New Acquisitions
* The New Kleinfontein acquisition, approved by Aflease shareholders on the 20th
of February 2003, was completed with 100% of minority shareholders accepting the
Aflease offer.
Management changes
The Board is pleased to announce that Bruce Jones will be joining AFL as Chief
Operating Officer, on 14 April 2003. Bruce, a mining engineer, has significant
experience of both underground and surface operations having held senior and
executive positions in South Africa and Internationally. Neal Froneman and Bruce
Jones were jointly responsible for the turnaround of Elandskraal in 2001.
Board Changes
* In an attempt to further enhance corporate governance, the board has resolved
to reconstitute itself adhearing to following principles.:
* A split in the roles of Chief Executive Officer and Chairman.
* The Chairman will be a non-executive position.
* The board will be constituted by a majority of non-executive directors.
* Board committees will be appointed to ensure adherence to acceptable
corporate governance practices.
* Jean Nortier will remain on the board and assume the role of non-executive
Chairman
* The executive board members will consist of the following members:
* Neal Froneman (Chief Executive Officer)
* Bruce Jones (Chief Operating Officer)
* Marais Steyn (Chief Financial Officer)
* In light of the above the board is pleased to announce that the following
individuals accepted an invitation to join the board as non-executive directors
with effect from 14 April 2003:
* Ken Dicks
* Ferdinand Lips (Swiss)
* John Sibley (Canadian)
* In order to facilitate the changes to the board, Peter Walters and Hulme
Scholes have tendered their resignations as directors of the company. Peter
Walters will remain a valued employee of the Aflease Group. Aflease will retain
the services of Werksmans, and specifically Hulme Scholes with regards to mining
legislation. We would like to thank them for their valued contribution.
Chairman resignation
As a result of breaches of acceptable corporate governance practices, Peter
Skeat offered his resignation to the board of Afrikander Lease. These breaches
did not lead to enrichment on the part of Peter Skeat and also were not material
in their quantum. With Mr Skeat"s assistance, these issues have been addressed
and incorrect accounting treatment has been rectified in the December 2002
quarter results.
Outlook
* Organic growth
* The group expects to continue to grow organically and is confident that
there is significant value to be realised in developing the existing high
quality asset base.
* The board of directors is confident that the new management will be key
in unlocking the value of the assets that it currently has.
* Exploration
Aflease intends on increasing the rate of exploration in the Bonanza property.
Initial focus has been on proving up reserves required for mining in the next
five years. An appropriate drilling strategy is being prepared to explore the
full extent of the Bonanza Basin.
* The successful exploration program at Modder East*, has increased its
reserves by 250% since acquisition from 200"000 to beyond 700"000oz;
*Continued drilling is aimed at increasing the resource base
.
In line with the resources and reserves (R & R) required of the anticipated ADR
Listing, new R & R statements will be declared with the completion of the
Competent Person"s report in June 2003
* Production and CIL plant
* The new CIL metallurgical plant is expected to be in full production by
the quarter ended September 2003 with gold recoveries increasing from 54%
to 95%.
* The Bonanza decline is nearing completion which will lead to the start of
production from Bonanza West mine. Production will coincide with the
commissioning of the new CIL metallurgical plant.
* ADR listing
* As a result of the delay in the financial statements and the geological
requirements of industry guide 7 in the United States, the company expects
a delay in the filing of its ADR Level II listing. The company expects
that the submissions will be filed with the SEC by September 2003 quarter
* NKMC consists of Modder East; UC Prospecting; Turnbridge and Kleinfontein.
The Afrikander Lease Limited
Consolidated Financial Results For The Year Ended 31st December 2002
Reviewed Audited Unaudited Unaudited Unaudited
Year Year Quarter Quarter Quarter
To To To To To
31 Dec 2002 31 Dec 2001 31 Dec 2002 30 Sep 2002 31 Dec 2001
Highlights:-
Gold Produced And
Sold:-
-kilograms 1,075 1,206 226 355 253
-ounces 34,562 38,774 7,266 11,414 8,134
Cash Operating
Cost Stacked
(Rands per ton) 48.21 41.63 51.31 57.00 54.72
Cash Operating
Cost:-
-Rand / kg 77,533 50,709 94,646 72,639 68,166
-$ / oz 233 184 311 219 205
Cash Operating
Profit(R"000) 28,019 29,320 868 11,352 6,584
Net Earnings
(R"000) 15,591 16,057 (749) 7,044 3,784
Headline And Basic
Earnings Per Share
(cents) 10.53 13.05 (0.45) 4.79 2.84
Operating Results:-
Tonnage Stacked
(tons) 1,728,943 1,468,857 416,903 452,376 315,173
Gold Produced
And Sold (kg) 1,075 1,206 226 355 253
Average Grade
Stacked (gms/ton) 1.08 1.26 0.99 0.92 1.15
Gold Price Received:-
-Rand / kg 103,597 75,021 98,487 104,617 94,190
-Rand / oz 3,222 2,333 3,063 3,254 2,930
-$ / oz 312 270 324 315 277
Reviewed Audited Unaudited Unaudited Unaudited
Year Year Quarter Quarter Quarter
To To To To To
31 Dec 2002 31 Dec 2001 31 Dec 2002 30 Sep 2002 31 Dec 2001
Income Statement:-
R"000 R"000 R"000 R"000 R"000
Revenue 111,367 90,475 22,258 37,139 23,830
Cash Operating
Costs 102,892 72,921 25,413 28,842 20,384
Cash Movement
In Lock-up (19,544) (11,766) (4,023) (3,055) (3,138)
Cash Operating
Profit 28,019 29,320 868 11,352 6,584
Amortisation
And Depreciation 8,868 7,551 1,497 2,565 2,014
Non-cash Movement
In Lock-up (1,777) (837) (189) (5) (228)
Net Finance Costs 1,638 3,193 (897) 818 217
Corporate Costs /
Other 1,603 783 583 367 328
Exploration
Expenditure 2,096 2,573 623 563 469
Profit / (Loss)
Before Taxation 15,591 16,057 (749) 7,044 3,784
Taxation - - - - -
Net Profit /
(Loss) For The
Period 15,591 16,057 (749) 7,044 3,784
Ratios:-
Earnings Per
Share (Cents):-
-Cash Operating
Earnings 18.92 23.83 0.52 7.71 4.94
-Headline And
Basic 10.53 13.05 -0.45 4.79 2.84
-Fully Diluted 10.31 12.68 -0.44 4.69 2.79
Weighted Average
Number
Of Ordinary
Shares In Issue 148,098,027 123,029,857 167,320,971 147,150,863 133,194,805
Number Of Shares
In Issue
At End Of
Period 173,329,123 137,762,456 173,329,123 150,829,123 137,762,456
The fully diluted earnings per share is based upon the dilutive effect of
employee share options.
The Afrikander Lease Limited
Consolidated Financial Results For The Year Ended 31st December 2002
Reviewed Audited
Year Year
Ended Ended
31 Dec 2002 31 Dec 2001
Abridged Balance Sheet:- R"000 R"000
Assets
Non-current Assets:-
-Mining Assets 225,986 115,548
-Other Assets 6,843 1,923
-Leach Pads 39,221 -
-Investments 10,130 8,379
282,180 125,850
Current Assets:-
-Inventories 13,342 8,478
-Leach Pads 9,805 24,898
-Receivables And Prepayments 22,265 10,484
-Amounts Owing By Related Third Parties 768 114
-Bank And Cash Balances 76,209 17,940
122,389 61,914
Total Assets 404,569 187,764
Equity And Liabilities
Capital And Reserves:-
-Ordinary Share Capital 3,467 2,755
-Share Premium 315,604 118,763
-Accumulated Earnings 24,561 8,970
343,632 130,488
Non-current Liabilities:-
-Interest Bearing Borrowings 26,747 23,877
-Rehabilitation And Closure
Cost Obligations 4,500 4,500
-Amounts Owing To Related Third Parties - 4,056
31,247 32,433
Current Liabilities:-
-Trade And Other Payables 13,597 13,024
-Provisions 3,008 604
-Current Portion Of Interest
Bearing Borrowings 6,003 5,217
-Bank Overdraft Balances 7,082 5,998
29,690 24,843
Total Equity And Liabilities 404,569 187,764
Reviewed Audited Unaudited Unaudited
Year To Year To Qtr To Qtr To
31 Dec 2002 31 Dec 2001 31 Dec 2002 31 Dec 2001
Abridged Cash Flow
Statement:- R"000 R"000 R"000 R"000
Cash Flow Generated
From / (Utilised By) :-
Operating Activities 25,884 4,266 (61,571) (956)
Investing Activities (157,540) (15,992) (54,204) (6,263)
Financing Activities 188,841 26,614 137,144 19,092
Net Increase In Cash And
Cash Equivalents 57,185 14,888 21,369 11,873
Cash & Cash Equivalents
At Beginning Of Period 11,942 (2,946) 47,758 69
Cash & Cash Equivalents
At End Of Period 69,127 11,942 69,127 11,942
Statement Of Changes In Equity:-
Accum
Share Share (Loss)/ Total
Capital Premium Profit Equity
Balance At 31st December 2000 2,369 89,854 (7,087) 85,136
Issued During The Period 386 - - 386
Share Premium - 28,909 - 28,909
Net Profit After Taxation - - 16,057 16,057
Balance At 31st December 2001 2,755 118,763 8,970 130,488
Issued During The Period 712 - - 712
Share Premium - 196,841 - 196,841
Net Profit After Taxation - - 15,591 15,591
Balance At 31st December 2002 3,467 315,604 24,561 343,632
Reviewed Audited Unaudited Unaudited Unaudited
Year Year Qtr Qtr Qtr
Ended Ended Ended Ended Ended
31 Dec 2002 31 Dec 2001 31 Dec 2002 30 Sep 2002 31 Dec 2001
R"000 R"000 R"000 R"000 R"000
Supplementary
Information:-
Capital
Commitments 50,000 4,250 50,000 79,143 4,250
Capital
Expenditure 119,306 26,633 35,982 75,703 18,148
Long Term Borrowings:-
Finance Leases:-
Excavator 984c 4,045 5,361 4,045 4,239 5,361
Excavator 984c 3,425 4,778 3,425 3,746 4,778
Excavator 994c 1,544 2,686 1,544 1,872 2,686
Elution Plant - 376 - - 376
Excavator 974b
X 2 6,160 7,089 6,160 6,687 7,089
Excavator R984c 8,652 - 8,652 - -
23,826 20,290 23,826 16,544 20,290
Less:- Short-term
Portion (6,003) (5,217) (6,003) (5,290) (5,217)
17,823 15,073 17,823 11,254 15,073
The Above Finance Leases Are Repayable
Over Periods Varying From One To Five Years.
Loan-heap
Leach Plant: 8,924 8,804 8,924 8,924 8,804
The Above Loan Is Repayable In 2005 And Bears
Total Long-term
Borrowings 26,747 23,877 26,747 20,178 23,877
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:-
1. Accounting Policies
The preliminary consolidated financial statements are prepared on the historical
cost basis.
Accounting policies used in this report comply with South African Statements of
Generally Accounting Practice and are consistent with the accounting policies
applied in the previous year. Where necessary, comparative figures have been
adjusted to conform with changes in presentation in the current year.
2. Audit Review
The year end financial results have been reviewed in terms of Rule 3.23 of the
listing requirements of the JSE Securities Exchange SA by the company"s
auditors, PricewaterhouseCoopers. This review opinion is available on request
from the company secretary.
