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Messina Limited - Unaudited Interim Results for the six months ended 30 June
2003
Messina Limited
and its subsidiary
(Incorporated in the Republic of South Africa)
(Registration number 1950/035912/06)
Share code: MES ISIN: ZAE000004438
("Messina" or "the company")
Unaudited Interim Results for the six months ended 30 June 2003
Abridged Consolidated Income Statements
For the period ended 30 June 2003
6 months to 6 months to 12 months to
June June December
2003 2002 2002
R"000 R"000 R"000
Income 221 1 893 2 528
Operating Expenses (727) (26) (785)
Loss before tax (506) 1 867 1 743
Taxation - - -
Net loss (506) 1 867 1 743
Earnings per share
(cents):
Basic (3.26) 14.50 13.13
Headline (3.26) 14.50 13.13
Abridged Consolidated Balance Sheets
at 30 June 2003
6 months to 6 months to 12 months to
30 June 30 June 31 December
2003 2002 2002
R"000 R"000 R"000
Assets
Non-current Assets 1 035 954 619 150 881 099
Property, plant and 218 661 171 383 223 607
equipment
Mining Assets 816 615 447 090 656 815
Investments 678 677 677
Current Assets 48 167 74 153 43 113
Inventory 18 990 817 8 903
Receivables and 29 125 34 607 34 030
prepayments
Cash and cash 52 38 729 180
equivalents
1 084 121 693 303 924 212
Equity and Liabilities
Capital and Reserves 231 995 78 846 232 501
Share capital 7 779 6 482 7 779
Share premium 175 293 22 811 175 293
Reserves 48 923 49 553 49 429
Non-current Liabilities 624 937 536 680 468 606
Shareholders" loan 220 740 155 970 53 852
(interest bearing)
Long-term loans 395 753 372 966 406 310
(interest bearing)
Environmental obligation 8 444 7 744 8 444
provision
Current Liabilities 227 189 77 777 223 105
Current portion of long- 58 891 3 833 29 437
term loans (interest
bearing)
Trade and other payables 74 736 57 541 97 771
Bank overdraft (interest 93 562 16 403 95 897
bearing)
1 084 121 693 303 924 212
Net asset value per 14.91 6.08 14.94
share (Rand)
Number of ordinary 15 558 12 965 15 558
shares in issue ("000)
Consolidated Statements of Changes in Equity
for the period ended 30 June 2003
Reserves
Capital Total
Share Share Redemption Retained
Capital Premium reserve Earnings
R"000 R"000 R"000 R"000 R"000
Balance at 7 779 175 293 2 002 47 427 49 429
1 January
2003
Profit for (506) (506)
the period
Balance at 7 779 175 293 2 002 46 921 48 923
30 June
2003
Consolidated Cash Flow Statements
for the period ended 30 June 2003
6 months to 6 months to 12 months to
June June December
2003 2002 2002
R"000 R"000 R"000
Cash flows from
operating activities
Profit/(loss) before tax (506) 1 867 1 743
Adjustment for:
Finance income (120) (1 745) (2 180)
Loss from operations (626) 122 (437)
Changes in working (28 217) (9 897) 32 024
capital
Inventory (10 087) 668 (7 418)
Receivables & pre- 4 905 (20 461) (19 884)
payments
Trade & other payables (23 035) 9 896 59 326
Finance income 120 1 745 2 180
Taxation paid - - -
Net cash flow from (28 723) (8 030) 33 767
operating activities
Cash outflows for (154 855) (258 863) (520 112)
investment activities
Purchase of property, (5 054) (90 048) (152 318)
plant and equipment
Increase in mining (149 800) (168 815) (367 794)
assets
Purchase of non-current (1) - -
investment
Cash inflows for 185 785 256 490 357 899
financing activities
Ultimate shareholders"
loan
Increase during the 166 888 71 534 83 558
year
Converted to ordinary - - (114 142)
shares
Proceeds from issue of - - 153 779
ordinary shares
Increase/(decrease) in 18 897 184 956 234 704
long term loans
Net (decrease)/increase 2 207 (10 403) (128 446)
in cash and cash
equivalents
Cash and cash (95 717) 32 729 32 729
equivalents at beginning
of period
Cash and cash (93 510) 22 326 (95 717)
equivalents at end of
period
Notes to the interim results
Accounting policies adopted by the company in preparing the interim results are
consistent with the policies adopted in the preparation of the Company"s
previous year"s financial statements and comply with statements of Generally
Accepted Accounting Practice in South Africa.
Progress continued at Messina Platinum"s Phase 1 Mine (Voorspoed Section) which
remains under development. During the first six months of this year, Messina"s
now fully commissioned Main Shaft hoisted 327 052 tonnes, of which 157 293 were
development waste and 169 759 were reef tonnes from both production and
development levels. Production during the six months came principally from the
150 and 200-metre levels. During the six months high levels of development
continued from the 275 and 350-levels to support the production build up.
Production from these levels have now commenced.
Although still under development, Messina produced 16.5 thousand ounces of
3PGE"s plus gold, 157 tonnes of nickel and 114 tonnes of copper during the six
month period, the average fully diluted head grade was 3.66 grams per tonne
(3PGE"s plus gold) and is expected to continue improving as the mine builds up
to steady state production.
The activities described above have been funded by extended advances made and
guarantees given by the Company"s ultimate holding company, SouthernEra
Resources Limited of Canada, which holds a 71,9% equity interest in the Company.
Long-term liabilities are principally made up of structured long-term borrowings
advanced by the Company"s bankers and are secured over the assets of the
company, other debt, including the shareholders" loan to SouthernEra, being
subordinate to bank debt. Overdraft facilities advanced to the Company are
secured by issue of guarantees, supported by cash on deposit, in favour of the
Company"s bankers, made by SouthernEra Resources Limited.
During the foreseeable period of production build up at Voorspoed section, the
Company is and will continue to remain dependent upon the financial support of
SouthernEra Resources Limited and the Company"s bankers, SouthernEra having
warranted such support as may be necessary to preserve the going concern status
of the Company.
In May 2003, shareholders were advised that the company was to proceed with a
rights offer. The proceeds of the rights offer will be used to repay the loan
advanced to the Company by SouthernEra, provide cash to repay short-term debt
and increase liquidity within Messina.
During the period under review, Messrs R R Mphahlele and T C Dawson were
appointed to the board and Mr J H R Karlson retired from the board.
Subsequent to the period ended 30 June 2003 it was reported that the company had
restated its guidance with respect to the build-up target of 80 000 tonnes per
month which will now be achieved during the fourth quarter of 2003 rather than
the end of the third quarter. The full production rate of 120 000 tonnes per
month remains on track to be achieved during the second quarter of 2004.
This interim report will be posted to shareholders with the rights offer
circular on 22 September 2003.
For and on behalf of the Board
CMH Jennings WM Eksteen
Director Director
9 September 2003
Directors:
Dr. CMH Jennings - Chairman (Canadian)*, PC Evans - CEO, WM Eksteen - COO, T C
Dawson (Canadian)*, LJ Fox (USA)*, RR Mphahlele* (* non-executive)
Date: 16/09/2003 08:00:07 AM Produced by the JSE SENS Department
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