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Aflease - Quarterly Results
Release Date: 08/05/2003 17:20:57 Code(s): AFL
Aflease - Quarterly results
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")
MAY 2003 UPDATE
-------------------------
CIL Plant Construction Progress
--------------------------------
The upgrade to the crushing section is now complete and has been commissioned.
In line with this, heap leach operations will now recommence to supplement
revenue during the commissioning and build up phase of the new CIL plant.
The first phase commissioning of the milling and leaching facilities of the CIL
plant will start in May 2003. We expect that full commissioning of the plant
will be completed during the June quarter with full-scale treatment being
achieved during the September quarter. The full benefits of this expansion
project will be realised during the December quarter.
Recommencement of Heap Leach processing
---------------------------------------
Contrary to previous plans where heap leach operations were to be terminated,
heap leach operations have recommenced with the stacking of stock piled
material. This stock piled material will be treated to off set 250 kg of gold
lock-up in the CIL plant.
In addition, production from the Big Pebble Basin is set to commence. The Big
Pebble Basin has a reserve of 200 000 ounces, is mainly free dig down to 5
metres and is conducive to heap leach processing. The Big Pebble Basin will
initially be exploited at a rate of 60 000 tpm adding 400kg"s to the annual gold
production.
EXPLORATION
-----------
Bonanza West
------------
Drilling at the Bonanza West Mine continues to produce encouraging results. This
phase of drilling at Bonanza West is aimed at proving up 5 years of mining in
the Bonanza decline area. The program is within the budget of R15 million. The
Bonanza West mine will commence production in the June quarter.
Drilling results from the Bonanza West mine are presented in the table below:
BONANZA EXPLORATION RESULTS AS AT 31 MARCH 2003
-----------------------------------------------
BHID FROM TO WIDTH REEF AU G/T CMG/T
___________________________________________________________
NB1AV 79.60 80.13 0.53 BUR 5.65 299
NB2AAV 54.53 55.41 0.88 BBOSR 5.76 507
NB3AV 62.31 62.94 0.63 BUR 7.08 446
NB7AV 62.45 62.96 0.51 BBOSR 5.95 304
NB7AV 70.96 72.14 1.18 BUR 7.46 876
NB10AV 69.84 70.35 0.51 BUR 4.80 247
NB10AV 82.93 83.74 0.81 BIR 5.34 433
NB10AV 84.30 85.48 1.18 BLR 16.56 1954
NB12AV 95.74 96.40 0.66 BBOSR 5.67 371
NB12AV 99.25 99.66 0.41 BUR 8.04 330
NB30AV 138.01 138.47 0.46 BUR 1.71 79
NB30AV 153.11 154.05 0.94 BIR 3.57 334
NB52AV 73.83 74.57 0.74 BUR 5.84 434
NB54AV 64.81 65.06 0.25 BBOSR 3.26 82
NB102AV 53.58 54.35 0.77 BBOSR 13.40 1032
NB102AV 62.87 63.67 0.80 BUR 7.84 627
NB102AV 74.96 75.76 0.80 BIR 54.93 4394
NB108AV 105.32 106.31 0.99 BBOSR 1.50 148
NB108AV 118.10 118.90 0.80 BIR 7.76 597
NB108AV 120.46 121.26 0.80 BLR 2.72 216
NB202AV 195.47 196.86 1.39 BIR 8.82 1226
Notes
BHID= bore hole number (AV indicates average of mother hole and deflections)
From/to = depth below surface in meters
Width=channel width in metres
Reef type
BBOSR= Bonanza base of shale reef
BUR= Bonanza upper reef
BIR= Bonanza intermediate reef
BLR =Bonanza lower reef
AU G/T= Grade over channel width (expected mining width is minimum 80cm to
channel + 10cm at these depths)
CMG/T= centimetre gram per ton of channel
Above table excludes additional holes drilled for structural purposes
Further to the announcement regarding the fast tracking of the larger Bonanza
Basin exploration we are pleased to advise that an exploration target of 10
million ounces has been identified. The target is an extension of the current
Bonanza West mine. This phase of drilling, costing R28 million, is expected to
commence in the near future.
Modder East
-----------
Exploration results at Modder East are encouraging and are tabulated below. As
reported previously, reserves have increased to over 700 000 ounces. Most
significant is that continuity between current mining on the black reef
shoreline from Grootvlei 8 shaft to Modder East has been proven. This will
greatly enhance the viability of the project and potentially result in earlier
than expected cash flow. The ore body remains open ended to the east and the
second phase of drilling in this area, due to commence in the June quarter, will
be aimed at delineating the extent of the shoreline.
DRILLING RESULTS AT MODDER EAST AS AT MARCH 2003
------------------------------------------------
KIMBERLEY REEF
--------------
Borehole cmg/t Stoping g/t Reef Type
No. Width
-----------------------------------------------
1838 1057 85 12.4 UK9A
1895 585 85 6.9 UK9A
2873 35 85 0.4 UK9A
2897 76 85 0.9 UK9A
2944 122 85 1.4 UK9A
2954 1 85 0.0 UK9A
2974 0 85 0.0 UK9A
3111 816 85 9.6 UK9A
DD7 307 203 1.5 UK3
DD7 143 50 2.9 UK7
DD7 12 8 1.5 UK9A
DD7 91 260 0.4 MK2
BLACK REEF
----------
Accepted
Value
Borehole cmg/t Stoping g/t Reef Type
No. Width
-----------------------------------------------
DD1 2256 100 22.6 BPLZ
DD2 1329 100 13.3 BPLZ
DD3 704 100 7.0 BPLZ
DD4 WOC n/a n/a BPLZ
DD5 WOC n/a n/a BPLZ
DD6 WOC n/a n/a BPLZ
DD7 260 100 2.6 BPLZ
DD8* 756 100 7.6 BPLZ
DD9* 1405 100 14.1 BPLZ
DD10 Nil n/a n/a Faulted Out
2873 999 100 10.0 BPLZ
2954 616 100 6.2 BPLZ
3064 314 100 3.1 BPLZ
1838 50 100 0.5 BPLZ
1895 49 100 0.5 BPLZ
2897 47 100 0.5 BPLZ
3111 10 100 0.1 BPLZ
DD1 634 323 2.0 Blanket/Channel
DD2 300 264 1.1 Blanket/Channel
DD3 65 133 0.5 Blanket/Channel
DD8* 663 515 1.3 Blanket/Channel
DD9* 531 247 2.1 Blanket/Channel
2873 254 307 0.8 Blanket/Channel
2954 283 307 0.9 Blanket/Channel
3064 929 307 3.0 Blanket/Channel
1838 175 307 0.6 Blanket/Channel
1895 532 307 1.7 Blanket/Channel
2897 Not de n/a n/a Blanket/Channel
3111 velop n/a n/a Blanket/Channel
*Results for motherhole only - assays for defections awaited.
Notes
Cmg/t = centimetre grams per ton of channel (average of mother hole and
deflections)
Stoping width = estimated mining stoping width
G/t= estimated blasted grade
Reef type
UK =Upper Kimberley Reef
MK=Middle Kimberley Reef
BPLZ= Buckshot Pyrite Leader Zone
Blanket/channel= Black Reef blanket or channel facies
Geophysical work has begun on the opencast opportunities on the northern extent
of the Modder East property. Together with the underground targets, this will
result in a total exploration target, including the Kimberley Reefs of 5 million
ounces.
UNAUDITED QUARTERLY RESULTS FOR MARCH 2003
------------------------------------------
Financial and Operational Review
------------------------------------
The group reported a loss of R14.0m for the quarter (December 2002 quarter:
R0.7m) mainly as a result of a reduction in gold output caused by the
commissioning and construction of the upgraded crushing plant and an increase in
operating costs.
Operating costs increased by R4.2m to R25.6m, largely as a result of a more
conservative estimate for lock up on the heap leach pad.
The 15.5% reduction in gold produced from the March quarter resulted in the R/Kg
cost of gold produced increasing by 41.9%.
The R52.8m movement in cash balances is principally the result of payments made
to contractors for the construction of the CIL plant. (R14.0m of the increase
in trade and other payables was also directly related to the construction of the
CIL plant).
Inventory increased by R7.3m as a result of the stockpile created to facilitate
the process of commissioning the CIL plant.
The cashflow investing and financing activities include the share portion of the
acquisition price paid for New Kleinfontein Mining Company Limited ("NKMC").
The decision to terminate heap leach operations was reversed during the quarter.
Production from the heap leach operation will increase to 60,000tpm by June.
This will reduce the expected losses for the June 2003 quarter.
With the completion of the NKMC deal, the number of shares in issue increased by
15m (7.9% of issued shares) and mining assets increased to R349.0m for the
quarter. The latter was largely due to the acquisition of NKMC"s assets for
R101.4m and metallurgical plant and sundry mining equipment of R23.3m.
Approximately R33.8m cash was paid to shareholders of NKMC.
The revenue has been negatively affected by the poor Rand gold price during the
quarter.
Unaudited Unaudited Unaudited Reviewed
Quarter Quarter Quarter Year
To To To To
31 Mar 2003 31 Dec 2002 31 Mar 2002 31 Dec 2002
Highlights
Gold Produced
And Sold:-
-Kilograms 191 226 239 1,075
-Ounces 6,137 7,266 7,684 34,562
Cash Operating
Cost Stacked
(Rands Per Ton) 103.44 51.31 48.93 48.21
Cash Operating
Cost:-
-Rand/Kg 134,280 94,646 74,594 77,533
-$ /Oz 503 311 205 233
Cash Operating
(Loss)/Profit
(R"000) (7,986) 868 7,685 28,019
Net (Loss) /
Earnings (R"000) (13,961) (749) 4,475 15,591
Headline And
Basic (Loss)/
Earnings Per
Share (Cents) (7.76) (0.45) 3.24 10.53
Operating Results
Tonnage Stacked
(Tons) 247,776 416,903 364,366 1,728,943
Gold Produced
And Sold (Kg) 191 226 239 1,075
Average Grade
Stacked (Gms/Ton) 1.03 0.99 1.25 1.08
Gold Price
Received:-
-Rand / Kg 92,439 98,487 106,749 103,597
-Rand / Oz 2,875 3,063 3,320 3,222
-$ / Oz 350 324 293 312
Unaudited Unaudited Unaudited Reviewed
Quarter Quarter Quarter Year
To To To To
31 Mar 2003 31 Dec 2002 31 Mar 2002 31 Dec 2002
R"000 R"000 R"000 R"000
Income Statement
Revenue 17,644 22,258 25,513 111,367
Cash Operating
Costs 32,559 25,413 22,166 102,892
Cash Movement
In Lock-up (6,929) (4,023) (4,338) (19,544)
Cash Operating
(Loss)/Profit (7,986) 868 7,685 28,019
Amortisation
And Depreciation 3,645 1,497 2,319 8,868
Non-cash Movement
In Lock-up - (189) (622) (1,777)
Net Finance Costs 881 (897) 783 1,638
Corporate Costs /
Other 530 583 290 1,603
Exploration
Expenditure 919 623 440 2,096
(Loss)/Profit
Before Taxation (13,961) (749) 4,475 15,591
Taxation - - - -
Net (Loss) /
Profit For The
Period (13,961) (749) 4,475 15,591
Ratios:-
(Loss)/Earnings
Per Share (Cents):-
-Cash Operating
(Loss)/Earnings (4.44) 0.52 5.56 18.92
-Headline And
Basic (7.76) (0.45) 3.24 10.53
-Fully Diluted (7.64) (0.44) 3.16 10.31
Weighted Average
Number
Of Ordinary
Shares In Issue 179,946,779 167,320,971 138,295,333 148,098,027
Number Of
Shares In
Issue At End
Of Period 188,292,090 173,329,123 138,562,457 173,329,123
The fully diluted earnings per share is based upon the
dilutive effect of employee share options.
Unaudited Reviewed Unaudited
As At As At As At
31 Mar 2003 31 Dec 2002 31 Mar 2002
R"000 R"000 R"000
Abridged Balance Sheet:-
Assets
Non-current Assets:-
-Mining Assets 348,946 225,986 117,245
-Other Assets 9,583 6,843 2,501
-Leach Pads 39,221 39,221 28,360
-Investments 14,213 10,130 8,857
411,963 282,180 156,963
Current Assets:-
-Inventories 20,629 13,342 4,849
-Leach Pads 9,805 9,805 7,090
-Receivables
And Prepayments 10,507 22,265 5,518
-Amounts Owing
By Related
Third Parties 881 768 -
-Bank And Cash
Balances 21,585 76,209 18,235
63,407 122,389 35,692
Total Assets 475,370 404,569 192,655
Equity And
Liabilities
Capital And
Reserves:-
-Ordinary Share
Capital 3,766 3,467 2,755
-Share Premium 382,938 315,604 118,763
-Accumulated
Earnings 10,600 24,561 13,445
397,304 343,632 134,963
Non-current
Liabilities:-
-Interest Bearing
Borrowings 28,462 26,747 22,662
-Rehabilitation
And Closure
Cost
Obligations 4,500 4,500 4,500
-Amounts Owing
To Related
Third Parties 77 - 3,269
33,039 31,247 30,431
Current Liabilities:-
-Trade And
Other Payables 27,016 13,597 11,496
-Provisions 5,576 3,008 983
-Current Portion
Of Interest
Bearing
Borrowings 7,206 6,003 4,815
-Bank Overdraft
Balances 5,229 7,082 9,967
45,027 29,690 27,261
Total Equity
And Liabilities 475,370 404,569 192,655
Unaudited Unaudited Unaudited Reviewed
Quarter To Quarter To Quarter To Year To
31 Mar 2003 31 Dec 2002 31 Mar 2002 31 Dec 2002
R"000 R"000 R"000 R"000
Abridged Cash
Flow Statement:-
Cash Flow
(Utilised By) /
Generated From :-
-Operating
Activities 5,530 (61,571) 3,688 25,884
- Investing
Activities (124,461) (54,204) (5,072) (157,540)
- Financing
Activities 66,160 137,144 (2,290) 188,841
Net (Decrease)/
Increase In
Cash And Cash
Equivalents (52,771) 21,369 (3,674) 57,185
Cash & Cash
Equivalents
At Beginning
Of Period 69,127 47,758 11,942 11,942
Cash & Cash
Equivalents
At End Of Period 16,356 69,127 8,268 69,127
Statement Of Changes In Equity
Share Share Accum Total
Capital Premium Profit Equity
R"000 R"000 R"000 R"000
Balance At 31st
December 2001 2,755 118,763 8,970 130,488
Issued During
The Period - - - -
Share Premium - - - -
Net Profit
After Taxation - - 4,475 4,475
Balance At 31st
March 2002 2,755 118,763 13,445 134,963
Issued During
The Period 712 - - 712
Share Premium - 196,841 - 196,841
Net Profit
After Taxation - - 11,116 11,116
Balance At 31st
December 2002 3,467 315,604 24,561 343,632
Issued During
The Period 299 - - 299
Share Premium - 67,334 - 67,334
Net Loss After
Taxation - - (13,961) (13,961)
Balance At
31st March 2003 3,766 382,938 10,600 397,304
Unaudited Unaudited Unaudited Reviewed
Quarter Ended Quarter Ended Quarter Ended Year Ended
31 Mar 2003 31 Dec 2002 31 Mar 2002 31 Dec 2002
R"000 R"000 R"000 R"000
Supplementary
Information
Capital Commitments 30,000 50,000 1,000 50,000
Capital Expenditure 23,300 35,982 5,986 119,306
Finance Leases:-
Excavator 984C 3,819 4,045 4,615 4,045
Excavator 984C 3,088 3,425 4,314 3,425
Excavator 994C 1,337 1,544 2,504 1,544
Elution Plant - - - -
Excavator
974B X 2 5,714 6,160 7,120 6,160
Excavator
R984C 8,508 8,652 - 8,652
Other 410
22,876 23,826 18,553 23,826
Less:- Short-term
Portion (6,137) (6,003) (4,815) (6,003)
16,739 17,823 13,738 17,823
The above finance
leases are repayable
Over periods varying
from one to five years.
Loan-Heap Leach
Plant:- 8,924 8,924 8,924 8,924
The above loan
is repayable in
2005 and bears
Interest at a
rate of 15.25%.
Total Leases 25,663 26,747 22,662 26,747
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 the generally accepted accounting policies in
South Africa. No dividend has been proposed or declared for the period under
review.
By order of the board
NJ Froneman DJ Nortier
8 May 2003
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