| Thu 6 May 2004, 17:35 | | FINANCIAL RESULTS FOR THE QUARTER ENDED 31 MARCH |
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THE AFRIKANDER LEASE LIMITED - FINANCIAL RESULTS FOR THE QUARTER ENDED 31 MARCH
2004
THE AFRIKANDER LEASE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1921/006955/06)
Share code: AFL (JSE) AFKDY (NASDAQ)
ISIN: ZAE000000253
("Aflease" or "the company")
The Afrikander Lease Limited Consolidated Financial Results for the quarter
ended 31 March 2004
Salient Features - March 2004 Quarter Results:
Modder East project"s mining authorization approved by DME.
Operating cash profit of R2,6 million achieved for the March quarter.
Capital expenditure program for organic growth to be funded via the placement
and underwriting of equity totaling R182,5 million.
Bonanza reef and waste development on target.
Bonanza reef sample grade results in line with expectation.
Outlook
Aflease has since the middle of last year prepared the company for the current
economic environment through its strategy of "Positioning for a Strong Rand". In
2003 Aflease suspended all marginal production and consequently is well
positioned to ride out the current macro-economic climate. Production from the
moth-balled operations can be restarted once economic conditions change. As such
it is pleasing to note that a cash operating profit of R2,6 million* was
achieved during the quarter under review. This marks a very significant
turnaround from the previous quarter"s cash operating loss of R9,7 million.
Under very difficult circumstances Aflease has been able to keep the development
of the Bonanza South project on schedule and within budget. During the quarter
under review 183 meters were developed on Reef and 481 meters of waste
development took place. The reef sampling is also in line with expectations and
is reflected elsewhere in this report.
The company has moved into a development phase in which it will remain until
Bonanza South comes into production by the middle of 2005. During this phase
Aflease will aggressively pursue the design and development of its existing
assets and will also continue to consider external opportunities. Aflease"s
projects include the design of the high margin Modder East gold project and the
exploitation of the exciting opportunities in the Uranium market. In line with
the development-phase of the company the executive has been refocused. As such,
Bruce Jones will assume the role of Technical Director.
On 2 May 2004, management was pleased to announce that the mining authorization
and the environmental rehabilitation management programme for Modder East was
approved by the Department of Minerals and Energy.
The company"s development activities will be funded through a R82,5 million
private placement and an additional R100 million underwritten rights offer as
announced on the 12 February 2004 and 19 March 2004 respectively. Further
details of the rights offer will be announced as soon as possible.
* - Included in revenue was the clean-up after the suspension of the CIL plant
in December 2003.
CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER ENDED 31 MARCH 2004
UNAUDITED UNAUDITED UNAUDITED REVIEWED
QUARTER TO QUARTER TO QUARTER TO YEAR TO
31 MAR 2004 31 DEC 2003 31 MAR 2003 31 DEC 2003
HIGHLIGHTS:-
GOLD PRODUCED AND SOLD
-KILOGRAMS 93 381 191 1,222
-OUNCES 2,985 12,249 6,137 39,288
CASH OPERATING COST PER
TON MINED (before
non-recurring items)* - 104.67 67.78 79.01
CASH OPERATING COST
-RAND / KG 79,785 109,599 134,280 122,258
-$ / OZ 369 504 503 518
CASH OPERATING PROFIT/
(LOSS) (R"000) 2,578 (9,682) (7,986) (48,435)
OPERATING LOSS
(R "000) (before
non-recurring items) (7,608) (36,894) (13,961) (107,839)
NET LOSS (R"000) (8,690) (333,211) (13,961) (409,622)
HEADLINE LOSS
PER SHARE (CENTS) (4.10) (49.85) (7.76) (95.16)
BASIC LOSS (4.10) (161.44) (7.76) (217.40)
PER SHARE (CENTS)
*Excluding underground tonnage and nett costs relating to underground for the
Dec 2003 quarterly results
OPERATING RESULTS:-
TONS MINED - OPEN PIT - 343,466 378,159 1,799,361
TONS MINED - UNDERGROUND - 26,492 - 91,405
TONS STACKED - CIS 341,091 481,031 247,776 1,341,956
TONS MILLED - CIL 21,557 500,823 - 1,262,518
REEF METERS DEVELOPED 183 - - -
- UNDERGROUND
WASTE METERS DEVELOPED 481 - - -
- UNDERGROUND
GOLD PRODUCED AND
SOLD (KG) 93 381 191 1,222
GRADE STACKED - CIS 0.33 0.15 1.03 0.47
GRADE MILLED - CIL 0.75 0.78 - 0.83
GOLD PRICE RECEIVED
-RAND/KG 88,704 84,186 92,439 87,338
-RAND / OZ 2,759 2,618 2,875 2,717
-$ / OZ 407 389 350 367
DEVELOPMENT SAMPLING RESULTS:-
MARCH 2004 QUARTER:
REEF METERS SAMPLED CMG/T CHANNEL WIDTH (CM)
UPPER REEF 110 204 28
LOWER REEF 30 343 82
SAMPLING COVERAGE = 77%
INCOME STATEMENT:-
UNAUDITED UNAUDITED UNAUDITED
REVIEWED
QUARTER TO QUARTER TO QUARTER TO YEAR TO
31 MAR 2004 31 DEC 2003 31 MAR 2003 31 DEC
2003 R"000 R"000 R"000 R"000
REVENUE 9,987 32,075 17,644 100,964
CASH OPERATING COSTS 7,409 41,757 32,559 160,629
CASH MOVEMENT IN LOCK-UP - - (6,929) (11,230)
CASH OPERATING PROFIT/(LOSS) 2,578 (9,682) (7,986) (48,435)
AMORTISATION AND
DEPRECIATION 295 4,112 3,645 15,563
NON-CASH MOVEMENT IN
LOCK-UP 4,071 - - 4,767
NET FINANCE COSTS 2,439 2,889 881 9,270
GENERAL AND ADMINISTRATIVE 2,490 3,117 530 9,165
EXPLORATION EXPENDITURE 891 2,012 919 5,557
REHABILITATION PROVISION - 15,082 - 15,082
(7,608) (36,894) (13,961) (107,839)
NON-RECURRING COSTS
DECOMMISSIONING - 4,142 - 6,744
FUNDING EXPENSES
AND LEGAL FEES 1,082 3,399 - 6,263
FAIR VALUE LOSS ON
INVESTMENTS - 301 - 301
IMPAIRMENT OF LONG LIFE
ASSETS - 230,325 - 230,325
WRITE DOWN OF HEAP LEACH
AND OTHER STOCK ITEMS - 58,557 - 58,557
OPERATING LOSS
BEFORE TAXATION (8,690) (333,618) (13,961) (410,029)
TAXATION - (407) - (407)
LOSS ATTRIBUTABLE
TO ORDINARY SHAREHOLDERS (8,690) (333,211) (13,961) (409,622)
RATIOS:-
(LOSS)/EARNINGS PER SHARE
(CENTS):-
- CASH OPERATING
PROFIT/(LOSS) 1.22 (4.69) (4.44) (25.71)
- OPERATING LOSS
(before non-recurring
items) (3.59) (17.88) (7.76) (57.23)
- HEADLINE (4.10) (49.85) (7.76) (95.16)
- BASIC (4.10) (161.44) (7.76) (217.40)
- FULLY DILUTED HEADLINE (3.94) (47.99) (7.64) (91.28)
- FULLY DILUTED BASIC (3.94) (155.41) (7.64) (208.53)
NET ASSET VALUE PER SHARE
(CENTS):- 53.18 54.14 211.00 54.14
WEIGHTED AVERAGE NUMBER
OF ORDINARY SHARES
IN ISSUE 212,111,373 206,393,754 179,946,779 188,421,148
NUMBER OF SHARES IN
ISSUE AT END OF PERIOD 213,192,739 210,952,406 188,292,090 210,952,406
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 2004 31 Dec 2003 31 MAR 2003
R"000 R"000 R"000
ABRIDGED BALANCE SHEET:-
ASSETS
NON-CURRENT ASSETS:-
-MINING ASSETS 219,142 214,708 348,946
-OTHER ASSETS 222 222 9,583
-LEACH PADS - - 39,221
-INVESTMENTS 13,110 12,513 14,213
232,474 227,443 411,963
CURRENT ASSETS:-
-INVENTORIES 9,743 14,698 20,629
-LEACH PADS - - 9,805
-RECEIVABLES AND
PREPAYMENTS 5,778 8,539 10,507
-AMOUNTS OWING BY RELATED
THIRD PARTIES 100 86 881
-BANK AND CASH BALANCES 5,129 12,482 21,585
20,750 35,805 63,407
TOTAL ASSETS 253,224 263,248 475,370
EQUITY AND LIABILITIES
CAPITAL AND RESERVES:-
-ORDINARY SHARE CAPITAL 4,264 4,219 3,766
-SHARE PREMIUM 502,871 495,050 382,938
-ACCUMULATED (LOSS)/EARNINGS (393,751) (385,061) 10,600
113,384 114,208 397,304
NON-CURRENT LIABILITIES:-
-INTEREST BEARING
BORROWINGS 51,247 63,391 28,462
-REHABILITATION AND
CLOSURE COST OBLIGATIONS 20,610 20,610 4,500
-AMOUNTS OWING TO RELATED
THIRD PARTIES 99 106 77
71,956 84,107 33,039
CURRENT LIABILITIES:-
-TRADE AND OTHER PAYABLES 24,495 17,145 27,016
-PROVISIONS 6,635 8,794 5,576
-CURRENT PORTION OF
INTEREST BEARING BORROWINGS 29,303 29,452 7,206
-BANK OVERDRAFT BALANCES 7,451 9,542 5,229
67,884 64,933 45,027
TOTAL EQUITY AND
LIABILITIES 253,224 263,248 475,370
ABRIDGED CASH FLOW STATEMENT:-
UNAUDITED UNAUDITED UNAUDITED REVIEWED
QUARTER TO QUARTER TO QUARTER TO YEAR TO
31 MAR 2004 31 DEC 2003 31 MAR 2003 31 DEC 2003
R"000 R"000 R"000 R"000
CASH FLOW GENERATED FROM
/(UTILISED BY):-
OPERATING ACTIVITIES 4,497 (44,813) 5,530 (102,791)
INVESTING ACTIVITIES (5,326) (17,787) (124,461) (146,697)
FINANCING ACTIVITIES (4,433) 74,440 66,160 183,300
NET (DECREASE)/INCREASE IN
CASH AND CASH EQUIVALENTS (5,262) 11,840 (52,771) (66,188)
CASH & CASH EQUIVALENTS
AT BEGINNING OF PERIOD 2,940 (8,900) 69,127 69,128
CASH & CASH EQUIVALENTS
AT END OF PERIOD (2,322) 2,940 16,356 2,940
SHARE SHARE ACCUM TOTAL
CAPITAL PREMIUM PROFIT EQUITY
R"000 R"000 R"000 R"000
STATEMENT OF CHANGES IN EQUITY:-
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
ISSUED DURING THE PERIOD 453 - - 453
SHARE PREMIUM - 112,112 - 112,112
NET LOSS AFTER TAXATION - - (395,661) (395,661)
BALANCE AT 31ST DECEMBER 2003 4,219 495,050 (385,061) 114,208
ISSUED DURING THE PERIOD 45 - - 45
SHARE PREMIUM - 7,821 - 7,821
NET LOSS AFTER TAXATION - - (8,690) (8,690)
BALANCE AT 31ST MARCH 2004 4,264 502,871 (393,751) 113,384
UNAUDITED UNAUDITED UNAUDITED REVIEWED
QUARTER TO QUARTER TO QUARTER TO YEAR TO
31 MAR 2004 31 DEC 2003 31 MAR 2003 31 DEC 2003
R"000 R"000 R"000 R"000
SUPPLEMENTARY INFORMATION:-
CAPITAL COMMITMENTS 500 2,000 30,000 2,000
CAPITAL EXPENDITURE 9,442 22,297 23,300 115,166
ASSET FINANCE LEASES:- 25,451 26,810 22,876 26,810
LESS:- SHORT-TERM PORTION (9,303) (9,452) (6,137) (9,452)
16,148 17,358 16,739 17,358
THE ABOVE FINANCE LEASES
ARE REPAYABLE OVER PERIODS
VARYING FROM ONE TO FIVE
YEARS AND BEAR INTEREST AT
AN AVERAGE RATE OF 10.85%.
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%.
LOAN-NEDBANK:- 45,000 54,799 - 54,799
LESS:- SHORT-TERM PORTION (20,000) (20,000) - (20,000)
25,000 34,799 - 34,799
THE ABOVE IS A THREE YEAR
FACILITY AND BEARS INTEREST
AT A RATE OF JIBAR PLUS A
MARGIN OF 4% DECREASING TO 3%.
DUE TO THE TEMPORARY SUSPENSION
OF THE KLERKSDORP OPERATIONS,
THE COMPANY IS IN BREACH OF THE
TERMS OF THE LOAN AGREEMENT. THE
BREACH IS HOWEVER, AN ONGOING SUBJECT
OF DISCUSSION AND ALTERNATIVE
FINANCING ARRANGEMENTS.
50,072 61,081 25,663 61,081
SECURITY:-
1. THE LOAN FOR THE HEAP-LEACH PLANT IS SECURED BY MOVABLE EQUIPMENT LIMITED TO
R8M, BOND OVER MINERAL RIGHTS FOR AN AMOUNT OF R11M AND BY A PLEDGE AND CESSION
OF ALL SHORT-TERM INSURANCE POLICIES COVERING THE HEAP LEACH PLANT.
2. THE NEDBANK LOAN FACILITY IS SECURED BY A BOND OVER MINERAL RIGHTS AND THE
CIL PLANT AS WELL AS SECURITY OVER CERTAIN MOVEABLE ASSETS.
Notes to the Financial Statements:-
1. The same accounting policies have been applied to the current year as were
used in the prior year"s annual financial statements.
2. These financial results have been compiled in accordance with South African
Statements of Generally Accepted Accounting Practice in South Africa.
3. No dividend has been proposed or declared for the period under review.
4. Funding arrangements:
An agreement was signed with Randgold and Exploration Limited for the placement
of 24 million shares raising R82,5 million at a share price of R3.44.
Shareholders are referred to the SENS announcement dated 12 February 2004 for
full details of the transaction.
On 19 March 2004, the company announced that it has received a rights offer
underwriting commitment from Randgold and Exploration Limited for R100 million.
The details of the rights offer will be announced shortly.
Randgold and Exploration Limited has advanced short-term loans to the amount of
R30 million to the company to fund short-term cash flow requirements. The loan
will be offset against the R82,5 million private placement detailed in note (i)
above.
5. Production from the CIS operation was stopped in light of the marginality and
risk profile of the operation.
Disclaimer
Statements made in this document with respect to Aflease"s current plans,
estimates, strategies and beliefs and other statements that are not historical
facts are forward-looking statements about the future performances of Aflease.
These statements are based on management"s assumptions and beliefs in light of
the information currently available to it. Aflease cautions you that a number of
risk and assumptions could cause actual results to differ materially from those
discussed in the forward-looking statements, and therefore you should not place
undue reliance on them. The potential risk and assumptions include, amongst
others, risks associated with fluctuations in the Rand-dollar exchange rate,
dollar market price of gold, gold production at operations, estimates of
reserves and resources. Aflease assumes no obligation to update information of
this release.
Date: 06/05/2004 05:30:33 PM Produced by the JSE SENS Department
