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Samroc -
SA Mineral Resources Corporation Limited
Registration number 1993/000460/06 - Incorporated in the Republic of South
Africa
JSE Share code : SAM ISIN number : ZAE000012019
("Samroc")
Reviewed Provisional Group Results for the 18 months ended 30 June 2003
Balance Sheet
(R000"s)
Reviewed Audited
ASSETS 30 June 03 31 Dec 01
Non-current 16,361 15,620
assets
Property, plant 16,361 15,620
and equipment
Current assets 3,162 1,860
Inventory 1,622 438
Trade 1,454 1,119
receivables
Cash and cash 86 303
equivalents
Total assets 19,523 17,480
EQUITY AND LIABILITIES
Capital and 9,061 6,821
reserves
Share capital 3,743 2,844
Share premium 27,152 21,150
Accumulated (21,834) (17,173)
loss
Non-current 4,568 2,942
liabilities
Long term 4,568 2,942
liabilities
Current 5,894 7,717
liabilities
Trade and other 5,894 7,717
payables
Total Equity 19,523 17,480
and liabilities
Income Reviewed Audited
Statement
(R000"s) Jan 02 - Jun 03 Jan 01 - Dec 01
Revenue 14,045 8,772
Costs and 17,100 12,093
expenses
Loss from 3,055 3,321
operating
activities
Net finance 1,606 775
costs
Loss for the 4,661 4,096
period
Cash Flow Reviewed Audited
Statement
(R000"s) 30 June 03 31 Dec 01
Net cash flows from (6,845) (1,698)
operating
activities
Net cash flows from (1,900) (256)
investment
activities
Net cash flows from 8,528 1,722
financing
activities
Net in/(-de)crease (217) (232)
in cash and cash
equivalents
Cash and cash 303 535
equivalents at
the
beginning of
the period
Cash and cash 86 303
equivalents at end
of period
Ordinary shares in 374,275 284,419
issue at end of
period (000"s)
Weighted average 339,004 284,419
ordinary shares in
issue (000"s)
Net asset value 2,42 2,40
per share
(cents)
Net loss per share 1,37 1,44
(cents) - basic and
diluted
Headline loss per 1,37 1,44
share (cents) -
basic and diluted
Statement of Share Share Accum- Total
Changes in
Equity
(R000"s) capital premium ulated
deficit
Balance at 31 2,844 21,150 (17,173) 6,821
December 2001
Shares issued 899 6,002 6,901
Net loss for the period (4,661) (4,661)
Jan 2002 - Jun 2003
Balance at 30 3,743 27,152 (21,834) 9,061
Jun 2003
Comment
Samroc completed an upgrade to its Greenhills manganese sulphate plant
in January 2003 and subsequent
to the upgrade the plant has shown itself capable of operating at full
capacity and producing a superior grade
of product. Since then the focus has been on developing the market
for the plant"s products and managing a
tight cash
situation.
In addition to ongoing sales to existing customers, 680 tonnes of
product have been delivered to two potential
major users of Samroc"s manganese sulphate for testing. Should these
tests be satisfactory and subject to the
conclusion of acceptable supply agreements, the potential exists for
Samroc to have demand for up to five times
its current production capacity. A new or expanded plant would be
required and Samroc would become one of
the largest producers of
manganese sulphate in world
terms.
The implementation of testing by these potential customers took
considerably longer than initially indicated
and this has contributed to the plant not operating at full capacity.
Furthermore, deliveries to Samroc"s existing
European customers have been affected by poor Rand prices and by
changes in product specifications. In
addition a major local customer has purchased materially less product
than it forecast but has advised that it
intends to resume
full monthly orders
soon.
Financial
Despite the above factors, which meant that sales did not achieve
budget in the six months to June 2003, the
Greenhills plant achieved a marginal operating profit for that period,
which was reduced to a loss after interest
and head office expenses. Samroc has had the support and
encouragement of the Industrial Development
Corporation (IDC) which has
assisted with working
capital finance.
When operating at or near full capacity the Greenhills plant has
demonstrated that it will generate profits, even at
the present high value of the Rand. It is therefore critical to the
company"s success to increase sales and volume
offtake. Samroc"s directors are confident that the minimum future
sales referred to under prospects given below
will be achieved, barring unforeseen factors. There is real potential
that future orders during the current financial
year will exceed the Greenhills plant capacity, in which case the
company will have to consider the options
available, including combining with a strong partner or raising
further capital to expand the existing production facility.
Prospects
Samroc"s results have disappointed in the period under review but
should the expected future orders eventuate
the company will see a realisation of its potential. The going
concern status of Samroc is dependent on the grant
of a six-month moratorium on capital repayments by the IDC, the
achievement of a minimum of R16,3 million in
sales in the current financial year and the
Rand not appreciating materially above
Euros 8,28.
Accounting
policies
The accounting policies adopted by Samroc comply with South African
Statements of Generally Accepted Accounting
Practice and are consisted with those applied in the previous period.
The financial results have been prepared
on the going concern basis. This is dependant on the achievement of
the factors as set out under prospects.
Review opinion
The financial information set out in the reviewed results has been
reviewed by Samroc"s auditors, Ernst & Young.
Their review opinion is modified with respect to going concern . This
review opinion is available for inspection
at Samroc"s
registered
office.
Dividend
No dividend has been declared or recommended for this period.
For and on behalf of the board
BH Christie NR Kaner
Chairman Managing Director
30 September 2003
Directors : BH Christie*(Chairman), NR
Kaner*(Managing), KJJ de Rooster**, RJ
Linnell, SJ Farrell***
(*British, **Belgian, ***Australian)
Registered office : Block 3, Southern
Implants Office Park, 1 Albert Road,
Irene 0062
Registered postal address :
PO Box 7798, Centurion 0046
Transfer Secretaries : Ultra
Registrars, PO Box 4844,
Johannesburg 2000
Company Secretary :
Elsa Taylor and
Associates
Date: 30/09/2003 05:15:09 PM Produced by the JSE SENS Department
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