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THE AFRIKANDER LEASE LIMITED - CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER
AND SIX MONTHS ENDED 30 JUNE 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`)
Consolidated Financial Results for the Quarter and Six Months ended 30 June 2004
SALIENT FEATURES
- Cash operating profit of R4,3 million for the 6 months ended 30 June 2004
improved from a R28,2 million loss for the 6 months ended 30 June 2003.
- Attributable loss reduced from R46,4 million for the 6 months ended 30 June
2003 to R15 million for the 6 months ended 30 June 2004.
- Attributable loss for the June 2004 quarter reduced to R6,5 million from R8,7
million in the March 2004 quarter.
- All conditions other than shareholder approval fulfilled in relation to the
Randgold Share Swap and Loan agreements.
- Randgold and JCI jointly and irrevocably undertake to make an offer to
shareholders in the event that their shareholding extends beyond 50%.
- Capital raising agreements concluded with Randgold facilitating the retirement
of Nedcor debt and continued development of high margin Gold and Uranium assets.
- Irrevocable commitments received from 41% of shareholders to support the
Randgold agreements.
OUTLOOK
- Uranium prospects improved with U3O8 price breaking through 17 year highs.
- Bonanza South mine on schedule and below budget.
- Bonanza mine development confirms the geological model.
- Resumption of gold production scheduled from the Second Quarter 2005.
- Exploration work on Bonanza Central will commence in September 2004.
- Exploration to resume in September 2004 at Modder East.
Unaudited Unaudited Unaudited
Quarter To Quarter To Quarter To
Highlights:- 30 June 2004 31 Mar 2004 30 June 2003
Gold Produced And Sold:-
- Kilograms 35 93 129
- Ounces 1,111 2,985 4,150
Cash Operating
Cost Per Ton Mined
(Before Non-recurring
Items) N/A N/A 64.09 Cash
Operating Cost:-
- Rand / Kg 81,159 79,785 243,280
- US$ / Oz 372 369 985
Cash Operating
Profit/(Loss) (R`000) 1,685 2,578 (20,217)
Operating Loss (R `000)
(Before Non-recurring
Items) (4,969) (7,608) (28,504)
Net Loss (R`000) (6,343) (8,690) (32,435)
Headline Loss Per Share
(Cents) (2.97) (4.10) (17.21)
Basic Loss Per Share
(Cents) (2.97) (4.10) (17.21)
Audited Unaudited Unaudited
Year To 6 Months Ended 6 Months Ended
Highlights:- 31 Dec 2003 30 June 2004 30 June 2003
Gold Produced And Sold:-
- Kilograms 1,222 127 320
- Ounces 39,288 4,097 10,287
Cash Operating
Cost Per Ton Mined
(Before Non-recurring
Items) 79.01 N/A 65.70
Cash Operating Cost:-
- Rand / Kg 122,258 80,159 178,180
- US$ / Oz 518 366 722
Cash Operating
Profit/(Loss) (R`000) (48,435) 4,263 (28,203)
Operating Loss (R `000)
(Before Non-recurring
Items) (107,839) (12,577) (42,465)
Net Loss (R`000) (409,622) (15,033) (46,396)
Headline Loss Per Share
(Cents) (95.16) (7.06) (25.29)
Basic Loss Per Share
(Cents) (217.40) (7.06) (25.29)
Operating Results:-
Tons Mined
- Open Pit - - 471,854
Tons Mined
- Underground - - 18,070
Tons Stacked - CIS - 341,091 185,484
Tons Milled - CIL - 21,557 140,696
Reef Metres Developed
- Underground 183 183 -
Waste Metres Developed
- Underground 531 481 -
Gold Produced And
Sold (Kg) 35 93 129
Grade Stacked - CIS - 0.33 0.49
Grade Milled - CIL - 0.75 0.91
Gold Price Received:-
- Rand / Kg 79,280 88,704 86,645
- Rand / Oz 2,466 2,759 2,695
- US$ / Oz 384 407 356
Operating Results:-
Tons Mined
- Open Pit 1,799,361 - 850,013
Tons Mined
- Underground 91,405 - 18,070
Tons Stacked - CIS 1,341,956 341,091 433,260
Tons Milled - CIL 1,262,518 21,557 140,696
Reef Metres Developed
- Underground - 366 -
Waste Metres Developed
- Underground - 1,012 -
Gold Produced And
Sold (Kg) 1,222 127 320
Grade Stacked - CIS 0.47 0.33 0.76
Grade Milled - CIL 0.83 0.75 0.91
Gold Price Received:-
- Rand / Kg 87,338 86,147 90,065
- Rand / Oz 2,717 2,679 2,801
- US$ / Oz 367 399 352
Development Sampling Results:-
March 2004 Quarter:
Reef Metres Sampled Cmg/t Cw (Cm)
Upper Reef 110 204 28
Lower Reef 30 343 82
Sampling Coverage = 77%
June 2004 Quarter:
Reef Metres Sampled Cmg/t Cw (Cm)
Upper Reef 67 247 22
Lower Reef 82 319 40
Sampling Coverage = 82%
Unaudited Unaudited Unaudited
Quarter To Quarter To Quarter To
30 June 2004 31 Mar 2004 30 June 2003
Income Statement:- R`000 R`000 R`000
Revenue 4,491 9,987 11,183
Gold 2,741 8,237 11,183
Sundry 1,750 1,750 -
Cash Operating Costs 2,806 7,409 35,702
Cash Movement
In Lock-up - - (4,302)
Cash Operating
Profit/(Loss) 1,685 2,578 (20,217)
Amortisation
And Depreciation 289 295 3,696
Non-cash Movement
In Lock-up - 4,071 -
Net Finance Costs 3,318 2,439 1,262
General And
Administrative 2,284 2,490 1,352
Exploration Expenditure 763 891 1,977
Rehabilitation
Provision - - -
(4,969) (7,608) (28,504)
Audited Unaudited Unaudited
Year To 6 Months Ended 6 Months Ended
31 Dec 2003 30 June 2004 30 June 2003
Income Statement:- R`000 R`000 R`000
Revenue 100,964 14,478 28,827
Gold 100,964 10,978 28,827
Sundry - 3,500 -
Cash Operating Costs 160,629 10,215 68,261
Cash Movement
In Lock-up (11,230) - (11,231)
Cash Operating
Profit/(Loss) (48,435) 4,263 (28,203)
Amortisation
And Depreciation 15,563 584 7,341
Non-cash Movement
In Lock-up 4,767 4,071 -
Net Finance Costs 9,270 5,757 2,143
General And
Administrative 9,165 4,774 1,882
Exploration Expenditure 5,557 1,654 2,896
Rehabilitation
Provision 15,082 - -
(107,839) (12,577) (42,465)
Non Recurring Costs
Decommissioning 576 - 2,602
Funding Expenses
And Legal Fees 798 1,082 1,329
Fair Value Loss
On Investments - - -
Impairment Of
Long Life Assets - - -
Write Down Of Heap
Leach And Other
Stock Items - - -
Operating Loss
Before Taxation (6,343) (8,690) (32,435)
Taxation - - -
Loss Attributable
To Ordinary Shareholders (6,343) (8,690) (32,435)
Earnings/(Loss)
Per Share (Cents):-
- Cash Operating
Profit/(Loss) 0.79 1.22 (10.73)
- Operating Loss
(Before Non-recurring
Items) (2.32) (3.59) (15.13)
- Headline (2.97) (4.10) (17.21)
- Basic (2.97) (4.10) (17.21)
- Fully Diluted Headline (2.65) (3.94) (16.32)
- Fully Diluted Basic (2.65) (3.94) (16.32)
Net Asset Value Per Share
(Cents):- 51.13 53.18 193.72
Weighted Average Number
Of Ordinary Shares
In Issue 213,848,508 212,111,373 188,438,191
Number Of Shares
In Issue At End
Of Period 214,684,614 213,192,739 188,569,073
Non Recurring Costs
Decommissioning 6,744 576 2,602
Funding Expenses
And Legal Fees 6,263 1,880 1,329
Fair Value Loss
On Investments 301 - -
Impairment Of
Long Life Assets 230,325 - -
Write Down Of Heap
Leach And Other
Stock Items 58,557 - -
Operating Loss
Before Taxation (410,029) (15,033) (46,396)
Taxation (407) - -
Loss Attributable
To Ordinary Shareholders (409,622) (15,033) (46,396)
Earnings/(Loss)
Per Share (Cents):-
- Cash Operating
Profit/(Loss) (25.71) 2.00 (15.37)
- Operating Loss
(Before Non-recurring
Items) (57.23) (5.91) (23.14)
- Headline (95.16) (7.06) (25.29)
- Basic (217.40) (7.06) (25.29)
- Fully Diluted Headline (91.28) (6.27) (23.94)
- Fully Diluted Basic (208.53) (6.27) (23.94)
Net Asset Value Per Share
(Cents):- 54.14 51.13 193.72
Weighted Average Number
Of Ordinary Shares
In Issue 188,421,148 212,979,940 183,488,113
Number Of Shares
In Issue At End
Of Period 210,952,406 214,684,614 188,569,073
The fully diluted earnings per share is based upon the dilutive effect of
employee share options. The possible dilutive effect of the Randgold loan
conversion has been calculated based on the assumption that Randgold elects to
convert the loan in terms of Method 1 as described in the notes to the long term
liabilities.
Unaudited Unaudited Unaudited Audited
As At As At As At As At
30 June 2004 31 Mar 2004 30 June 2003 31 Dec 2003
Abridged Balance Sheet:- R`000 R`000 R`000 R`000
Assets
Non-current Assets:-
- Mining Assets 228,916 219,142 397,550 214,708
- Other Assets 222 222 10,161 222
- Leach Pads - - 39,221 -
- Investments 13,364 13,110 12,818 12,513
242,502 232,474 459,750 227,443
Current Assets:-
- Inventories 9,152 9,743 24,813 14,698
- Leach Pads - - 9,805 -
- Receivables
And Prepayments 6,107 5,778 12,647 8,539
- Amounts Owing By
Related Third Parties 113 100 835 86
- Bank And Cash
Balances 2,730 5,129 18,943 12,482
18,102 20,750 67,043 35,805
Total Assets 260,604 253,224 526,793 263,248
Equity And Liabilities
Capital And Reserves:-
- Ordinary Share
Capital 4,294 4,264 3,772 4,219
- Share Premium 505,576 502,871 383,364 495,050
- Accumulated Loss (400,094) (393,751) (21,835) (385,061)
109,776 113,384 365,301 114,208
Non-current Liabilities:-
- Interest Bearing
Borrowings 59,772 51,247 78,261 63,391
- Rehabilitation And
Closure Cost Obligations 20,659 20,610 4,500 20,610
- Amounts Owing To
Related Third Parties - 99 71 106
80,431 71,956 82,832 84,107
Current Liabilities:-
- Trade And Other
Payables 11,653 9,495 32,264 17,145
- Provisions 5,207 6,635 5,224 8,794
- Short Term Loan 44,226 15,000 - -
- Current Portion Of
Interest Bearing
Borrowings 9,217 29,303 32,622 29,452
- Bank Overdraft
Balances 94 7,451 8,550 9,542
70,397 67,884 78,660 64,933
Total Equity And
Liabilities 260,604 253,224 526,793 263,248
Unaudited Unaudited Unaudited
Quarter To Quarter T Quarter To
30 June 2004 31 Mar 2004 30 June 2003
Abridged Cash Flow Statement:- R`000 R`000 R`000
Cash Flow (Utilised By)/
Generated From :-
Operating Activities (5,074) 4,497 (2,592)
Investing Activities (10,319) (5,326) (53,595)
Financing Activities 20,351 (4,433) 50,224
Net Increase/(Decrease)
In Cash And Cash Equivalents 4,958 (5,262) (5,963)
Cash & Cash Equivalents
At Beginning Of Period (2,322) 2,940 16,356
Cash & Cash Equivalents
At End Of Period 2,636 (2,322) 10,393
Audited Unaudited Unaudited
Year To 6 Months To 6 Months To
31 Dec 2 30 June 2004 30 June 2003
Abridged Cash Flow Statement:- R`000 R`000 R`000
Cash Flow (Utilised By)/
Generated From :-
Operating Activities (44,813) (15,576) 6,529
Investing Activities (17,787) (15,645) (184,911)
Financing Activities 74,440 30,917 119,648
Net Increase/(Decrease)
In Cash And Cash Equivalents 11,840 (304) (58,734)
Cash & Cash Equivalents
At Beginning Of Period (8,900) 2,940 69,127
Cash & Cash Equivalents
At End Of Period 2,940 2,636 10,393
Statement Of Changes In Equity:-
Share Share Accum Total
Capital Premium Profit/ Equity
(Loss)
R`000 R`000 R`000 R`000
Balance At 31st December 2002 3,467 315,604 24,561 343,632
Issued During The Period 305 - - 305
Share Premium - 67,760 - 67,760
Net Loss After Taxation - - (46,396) (46,396)
Balance At 30th June 2003 3,772 383,364 (21,835) 365,301
Issued During The Period 447 - - 447
Share Premium - 111,686 - 111,686
Net Loss After Taxation - - (363,226) (363,226)
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
Issued During The Period 30 - - 30
Share Premium - 2,705 - 2,705
Net Loss After Taxation - - (6,343) (6,343)
Balance At 30th June 2004 4,294 505,576 (400,094) 109,776
Unaudited Unaudited Unaudited
Quarter To Quarter To Quarter To
30 June 2004 31 Mar 2004 30 June 2003
Supplementary Information:-R`000 R`000 R`000
Capital Commitments 1,100 500 8,000
Capital Expenditure 10,736 9,442 52,301
Asset Finance Leases:- 24,489 25,451 30,977
Less:- Short-term
Portion (9,217) (9,303) (6,553)
15,272 16,148 24,424
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:- 8,515 8,924 8,924
The above loan is repayable in 2005 and bears interest at a rate of 15.25%.
Loan - Nedbank:- 44,226 45,000 67,400
Less: - Short-term
Portion (44,226) (20,000) (25,000)
- 25,000 42,400
The above is a three year facility and bears interest at a rate of jibar plus a
margin of 4% decreasing to 3%. A new facility agreement has been negotiated with
Nedcor.
Loan - Randgold:- 35,985 - -
Audited Unaudited Unaudited
Year To 6 Months Ended 6 Months Ended
31 Dec 2003 30 June 2004 30 June 2003
Supplementary Information:-R`000 R`000 R`000
Capital Commitments 2,000 1,100 8,000
Capital Expenditure 115,166 20,178 78,906
Asset Finance Leases:- 26,810 24,489 30,977
Less:- Short-term
Portion (9,452) (9,217) (6,553)
17,358 15,272 24,424
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 8,515 8,924
The above loan is repayable in 2005 and bears interest at a rate of 15.25%.
Loan - Nedbank:- 54,799 44,226 67,400
Less: - Short-term
Portion (20,000) (44,226) (25,000)
34,799 - 42,400
The above is a three year facility and bears interest at a rate of jibar plus a
margin of 4% decreasing to 3%. A new facility agreement has been negotiated with
Nedcor.
Loan - Randgold:- - 35,985 -
Interest is at 1.5% above prime overdraft rate, and will be repaid by Aflease on
the last day of the twelve month period following the closure of the Randgold
share swap transaction (as announced on 2 August 2004) by one of the following
methods at the election of Randgold:
1. Conversion of the loan at a share price of R2.75 per Aflease ordinary share
plus a three year option with an exercise price of R3.50 per Aflease ordinary
share.
2. Conversion of the loan at an Aflease ordinary share price equal to 90% of the
30-day trade weighted average share price. Randgold has committed not to trade
in Aflease shares for a period of 60 days leading up to conversion date.
The loan will be secured by way of pledge of approximately 5 million Randgold
swap shares. Randgold has agreed to release the pledge on instruction of Aflease
for purposes of raising funds to satisfy Aflease`s cash flow requirements. The
transaction is subject to shareholders approval anda detailed circular was
posted on 1 September 2004. Shareholders are also referred to the announcement
made on 2 August 2004.
59,772 50,072 75,748
62,459 59,772 75,748
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 interim financial results have been compiled in accordance with South
African Statements of Generally Accepted Accounting Practice in South Africa,
including accounting standard AC127, ` Interim Financial Reporting`.
3. No dividend has been proposed or declared for the period under review.
4. Segmental Reporting - The Group operates in two geographical areas, the East
Rand, Gauteng, South Africa, and Klerksdorp, North West Province, South Africa.
The bulk of the capital expenditure was incurred on the Bonanza South
development project. The other areas of activity include the corporate office
and maintaining the New Kleinfontein property in the East Rand. Gold revenue was
generated from the Klerksdorp operations, whereas the sundry revenue consisting
of royalties received originated from the East Rand area.
5. Subsequent Events - Aflease entered into the share swap and loan agreements
to facilitate the continuation and funding of its high margin gold and extended
uranium assets. In terms of the share swap agreement, Aflease acquires 9,4
million Randgold shares of R0,01 each, fully paid up, against the issue and
allotment to Randgold of 94 million ordinary shares of R0,02 each, fully paid
up, in the issued share capital of Aflease. The transaction is subject to
shareholders approval and a detailed circular was posted on 1 September 2004.
Shareholders are also referred to the announcement made on 2 August 2004.6.
Sundry revenue consists of royalties received from the Grootvlei Mines
(Proprietary) Limited.
On Behalf of the board
D J Nortier N J Froneman
Chairman Chief Executive Officer
Johannesburg
2 September 2004
Date: 03/09/2004 08:34:11 AM
Produced by the JSE SENS Department
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