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Mvelaphanda Resources - Reviewed group interim results for the six months ended
31 March 2003
MVELAPHANDA RESOURCES LIMITED
(Registration number 1980/001395/06)
(Incorporated in the Republic of South Africa)
(Share code: MVL
ISIN number: ZAE000037610)
Reviewed group interim results for the six months ended 31 March 2003
Directors: T M G Sexwale (Chairman), E Molobi, R B Shead, W J D I Scott, B R van
Rooyen, M J Willcox, M S M Xayiya, C A Massey (Alternate)
Issued share capital: 68 970 613 linked units
HIGHLIGHTS
30 cents per linked unit paid to linked unitholders on 29 April 2003.
Finalised the acquisition of a 22,4% stake in Northam Platinum Limited with a
final payment of R179,5 million to Anglo Platinum Limited over seven years ahead
of schedule.
An agreement in principle has been reached in terms of which the company will
acquire 15% of the South African gold mining assets of Gold Fields Limited,
subject to the fulfilment of certain conditions precedent.
Significant investments in associated companies
Northam Platinum Limited
Mvelaphanda Platinum (Pty) Limited, a wholly owned subsidiary of Mvelaphanda
Resources Limited ("Mvela" or "the company"), effectively owns 51 728 305 shares
in Northam Platinum Limited which constitutes a 22,4% equity accounted interest
in that company.
Trans Hex Group Limited
The company owns 2,5 million Trans Hex Group Limited shares and will acquire
another 16 million shares due for delivery on 28 February 2008. In addition, the
company has an option to acquire 5 million Trans Hex Group Limited shares from
Remgro Limited at an option price of R7,50 escalating at 8,94% per annum
compounded monthly in arrears from 1 January 2000 to date of payment.
6L13 Joint venture
During the period under review agreement was reached with Impala Platinum
Limited whereby Mvela sold its interest in the dryer plant and the remaining
material stockpiled at the 6L13 dryer plant for a consideration of R2,75
million.
Projects
SouthernEra Resources Limited
The company entered into a formal agreement with SouthernEra Resources Limited
on 9 October 2002 whereby the company acquired a 50% participating interest in
the exploitation of the platinum group metals on certain properties, which
adjoin the Messina Platinum Mines Limited, (the "Dwaalkop properties") and which
is estimated to contain 7,8 million ounces of pgm"s resources. The joint
venture, which has been waiting for the issue of the exploration permit to
enable the joint venture to undertake and complete the feasibility study over
the properties concerned, has now formally been advised by the Department of
Minerals and Energy that the issue of the relevant permit would be forthcoming
in the near future.
De Beers Consolidated Mines Limited
In terms of the Shareholders" Agreement signed on 17 July 2002, the company
secured a 33,3% interest in a joint venture with De Beers Consolidated Mines
Limited to undertake primary kimberlite exploration in a defined area of the
Limpopo and Mpumalanga Provinces. During the period under review the company
funded R704 000 as its contribution to its 33,3% share in the joint venture
expenditure.
GFL Mining Services Limited ("Gold Fields")
Mvela acquired, in terms of an agreement which became effective on 1 March 2002,
the right but not the obligation to acquire an interest of between 5% and 15% in
the beneficial interest and a corresponding share of the obligations, of Gold
Fields in the development, financing or construction of any precious metal mine
which is developed by Gold Fields in Africa after 1 March 2002.
In addition to the initial grant of options to subscribe for 380 102 linked
units in Mvela at a strike price of R26,30, Gold Fields was, in terms of its
agreement with Mvela, granted an additional 373 435 options to subscribe for
linked units in Mvela at a strike price of R19,34 on 5 May 2003. The number of
options was calculated with reference to one half of the exploration costs
incurred by Gold Fields on those projects in Africa, which are covered by the
agreement during the 12-month period to 28 February 2003.
Dividend and Debenture Interest payment
On 31 March 2003, the company declared a payment of 30 cents per linked unit
(comprising one ordinary share and one unsecured variable rate debenture)
representing an interest payment of 1 cent and a dividend payment of 29 cents
payable to linked unitholders on 29 April 2003. (March 2002 interest payment of
39,996 cents per debenture and a dividend of 0,004 cents per share.)
Employees" Share Incentive Scheme
Due to a change in the rules governing the JSE Listings Requirements, the
Mvelaphanda Share Incentive Scheme was obliged to sell 3 672 441 linked units in
the open market, which it did during the period under review.
Prospects
Management continues to investigate opportunities that will provide the company
with strong cash flow in the short to medium term as well as enhancing
shareholder value. In this connection a number of projects are at various stages
of evaluation.
Further Cautionary Notice
Shareholders are referred to the Cautionary Notice, which appeared in the press
on 10 June 2003 announcing that an agreement in principle has been reached in
terms of which the company will acquire 15% of the South African gold mining
assets of Gold Fields Limited, subject to the fulfilment of certain conditions
precedent.
For and on behalf of the board
T M G Sexwale (Chairman)
R B Shead (Director)
Transfer Secretaries Registered Office
Computershare Investor Services Limited 1 Albury Park
70 Marshall Street First Floor, South Wing
Johannesburg, 2001 Magalieszicht Avenue
(PO Box 61051, Johannesburg, 2000) Dunkeld West, 2196
(PO Box 413420,
Craighall, 2024)
Johannesburg
13 June 2003
CONDENSED GROUP INCOME 6 months to 6 months to 12 months to
STATEMENT 31 March 31 March 30 Sept
2003 2002 2002
Notes R"000 R"000 R"000
Revenue 5 739 3 243 10 318
Costs 15 261 47 777 72 166
Administration and
other costs 5 903 4 183 8 017
Debenture interest 690 26 117 26 117
Financing costs 2 8 668 17 477 38 032
Loss before income of
associate companies (9 522) (44 534) (61 848)
Attributable profit of
associate companies 81 387 53 061 151 533
Amortisation of
goodwill - net 4 616 6 770 11 385
Profit before
unrealised loss on
financial instruments 76 481 15 297 101 070
Unrealised loss on
financial instruments 3 (125 239) - -
(Loss)/profit before
taxation (48 758) 15 297 101 070
Taxation (12 079) (24 613) (61 196)
Attributable (loss)/
profit for the year (60 837) (9 316) 39 874
Basic earnings per (91,36) (19,26) 70,13
ordinary share (cents)
Diluted earnings per
ordinary share (cents) (90,23) (19,26) 69,80
Headline
(loss)/earnings per
share (cents) 4 (98,28) (33,25) 50,11
Dividends per share
(cents) 29,00 0,004 0,004
Net earnings/(loss)
excluding goodwill
amortisation and gains
and losses on financial
assets 61,56 (33,25) 50,11
Net (loss)/earnings per
share excluding
goodwill amortisation
and including gains and
losses on
financial instruments
(cents) (98,28) 167,71 489,11
CONDENSED GROUP BALANCE 31 March 31 March 30 Sept
SHEET 2003 2002 2002
Notes R"000 R"000 R"000
Goodwill 129 461 136 336 132 898
Property, plant and equipment 241 258 265
Investment in associate
companies 426 456 435 892 415 734
Financial instruments 3 242 827 74 414 74 414
Other investments 1 384 3 640 3 835
Current assets 139 769 164 453 114 305
940 138 814 993 741 451
Shareholders equity before
linked debentures 5 677 (242 360) (193 545)
Linked debentures and
debenture premium 793 484 751 505 751 422
Shareholders" equity and
linked debentures 799 161 509 145 557 877
Long-term liabilities 45 467 264 496 -
Deferred taxation 25 262 - -
Current liabilities 70 248 41 352 183 574
940 138 814 993 741 451
CONDENSED Accu- Acquisition
GROUP Share Share mulated Equity Other
STATEMENT
OF CHANGES capital premium Profit adjustment reserves Total
IN EQUITY R"000 R"000 R"000 R"000 R"000 R"000
Balance 1
October 2002
as previously
Reported 653 67 924 160 188 (421 947) (363) (193 545)
Effect of
adoption of
AC133,
Financial
Instruments:
Recognition
and
Measurements
(note 3) 249 604 (519) 249 085
Balance 1
October 2002 653 67 924 409 792 (421 947) (882) 55 540
restated
Sale of linked
units in Mvela
Share
Scheme 37 18 191 18 228
Profit on sale
of linked
units in
Mvela Share 15 306 15 306
Scheme
Unrealised
loss on
revaluation of
listed
investments (1 738) (1 738)
(note 3)
Equity portion
of foreign
currency
translation (787) (787)
reserve
Equity portion
of fair value
adjustment on
available-for-
sale
financial (34) (34)
assets
Dividends (20 001) (20 001)
declared
Net loss (60 837) (60 837)
Balance 31 690 86 115 344 260 (421 947) (3 441) 5 677
March 2003
Balance 1 177 2 384 120 317 (52 058) - 70 820
October 2001
Linked units
issued in
connection
with reverse
acquisition 415 525 124 (369 889) 155 650
Conversion of
share premium
to debenture
Premium (516 012) (516 012)
Linked units
issued for 61 56 440 56 501
cash
Dividends (3) (3)
declared
Net loss (9 316) (9 316)
Balance 31 653 67 936 110 998 (421 947) - (242 360)
March 2002
Linked units
issued to
Mvela Share
Scheme 37 18 179 18 216
Equity portion
of foreign
currency
translation (59) (59)
reserve
Equity portion
of fair value
adjustment
on available-
for-sale (304) (304)
financial
assets
Elimination of
linked units
held by
Mvela Share (37) (18 191) (18 228)
Scheme
Net profit 49 190 49 190
Balance at 30
September 2002 653 67 924 160 188 (421 947) (363) (193 545)
LINKED DEBENTURES AND Debenture
DEBENTURE PREMIUM Debentures premium Total
R"000 R"000 R"000
Balance 1 October 2002 653 750 769 751 422
Sale of linked units in Mvela
Share Scheme 37 42 025 42 062
Balance 31 March 2003 690 792 794 793 484
Balance 1 October 2001 177 49 330 49 507
Linked units issued in connection
with reverse acquisition 415 117 176 117 591
Linked units issued for cash 61 68 334 68 395
Conversion of share premium to
debenture premium 516 012 516 012
Balance 31 March 2002 653 750 852 751 505
Linked units issued to Mvela
Share Scheme 37 41 942 41 979
Elimination of linked units held
by Mvela Share Scheme (37) (42 025) (42 062)
Balance 30 September 2002 653 750 769 751 422
CONDENSED GROUP 6 months to 6 months to 12 months to
CASH FLOW 31 March 31 March 30 September
STATEMENT 2003 2002 2002
R"000 R"000 R"000
Cash flow from operating
activities (5 661) 38 316 (44 629)
Cash flow from investment
activities 42 642 12 141 139 844
Cash flow from financing
activities (12 144) 104 215 18 208
Net increase in cash and
equivalents 24 837 154 672 113 423
Cash and equivalents at
beginning of period/year 113 855 432 432
Cash and equivalents at end
of period/year 138 692 155 104 113 855
NOTES
The financial information has been prepared on the historical cost basis in
accordance with South African Statements of Generally Accepted Accounting
Practice and incorporate the accounting policies which are consistent with those
adopted in the previous period except as detailed in note 3 below.
2. Financing costs have decreased due to the repayment of the Anglo Platinum
Limited loan during the period.
3. On 1 October 2002, the group adopted AC133, Financial Instruments:
Recognition and Measurement. AC133 establishes principles for recognising,
measuring and disclosing information about financial assets and financial
liabilities. The effect of adopting AC133 is presented below:
Financial instruments Trans Hex Trans Hex
debentures options Other Total
R"000 R"000 R"000 R"000
1 October 2002
Book value before adopting
AC133 74 414 - 3 640 78 054
Fair value 294 288 73 778 3 121 371 187
Unrealised gain/(loss) 219 874 73 778 (519) 293 133
Deferred taxation 44 048
Unrealised gain as reflected
in condensed group statement
of changes in equity 249 085
Six months to 31 March 2003
Fair value 199 620 43 207 1 383 244 210
Unrealised loss (94 669) (30 571) (1 738) (126 977)
Unrealised loss as reflected
in condensed group statement
of changes in equity (1 738)
Unrealised loss as reflected
in condensed group income
statement before taxation (125 239)
Deferred taxation (18 786)
Unrealised loss as reflected
in condensed group income
statement after taxation (106 453)
4. Headline earnings per share is calculated using the following:
6 months to 6 months to 12 months to
31 March 31 March 30 September
2003 2002 2002
R"000 R"000 R"000
(Loss)/profit after
taxation (60 837) (9 316) 39 874
Net goodwill amortised (4 616) (6 770) (11 385)
Headline (loss)/earnings (65 453) (16 086) 28 489
Weighted average number of
shares in issue 66 597 487 48 383 157 56 856 885
5. The company has guaranteed the Trans Hex Group Limited debenture coupon
payments under the debenture issue agreement. The maximum potential contingent
liability as at 31 March 2003 is R72 380 021. This amount reduces to Rnil over
the six-year term of the debenture, in accordance with each semi-annual coupon
payment made by Trans Hex Group Limited.
6. Where necessary, comparative figures have been adjusted to conform with
changes reflected in the audited 30 September 2002 financial statements.
7. Post balance sheet events:
* Northam Platinum Limited announced the repayment of share premium to
shareholders of 20 cents per share, payment received on Monday, 12 May 2003
* Trans Hex Limited declared a final dividend of 48 cents per share to be paid
on 7 July 2003.
The interim financial results have been reviewed by the company"s auditors
PricewaterhouseCoopers Inc. This review opinion is available for inspection at
the Companys registered address.
Sponsor
PricewaterhouseCoopers
Corporate Finance (Pty) Limited
(Registration number 1970/003711/07)
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