| Tue 28 Sep 2004, 16:09 | | Results for the year ended 30 June 2004 |
|
Diamond Core - Abridged annual results for the year ended 30 June 2004;
a no change statement and details Annual General Meeting
DIAMOND CORE RESOURCES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013468/06)
Share code: DMR ISIN Number: ZAE000045688
(`Diamond Core` or `the company`)
Abridged annual results for the year ended 30 June 2004, a no change statement
and details of Diamond Core`s Annual General Meeting (`AGM`)
Abridged annual results for the 12 months ended 30 June 2004
CONSOLIDATED INCOME STATEMENT Audited Audited
30 June 30 June
2004 2003
R R
Revenue - -
Cost of sales - -
Other operating income 517,995 3,150,878
Exploration costs (1,145,992) (2,627,972)
Other operating expenses (4,957,520) (2,797,165)
Impairment losses - (2,006,671)
Preference share capital cancelled 7,200,000 -
Loans written off 498,350 (245,271)
Net income / (expenditure) before 2,112,833 (4,526,201)
finance charges
Investment income 79,276 58,051
Finance costs (227,976) (1,357,653)
Net profit / (loss) for the year 1,964,133 (5,825,803)
Number of shares in issue 563,425,467 437,425,467
Weighted average number of shares in 468,753,336 270,711,696
issue
Weighted average number of shares in 469,592,969 330,711,696
issue for diluted earnings
Headline loss per share (cents) (1.28) (1.92)
Earnings / (loss) per share (cents) 0.42 (2.15)
Diluted earnings per share (cents) 0.42 (1.76)
Reconciliation of profit / (loss)
and headline loss:
Net profit / (loss) for the year 1,964,133 (5,825,803)
Loans payable written off (498,350) 245,271
Impairment losses - 2,006,671
Preference share capital cancelled (7,200,000) -
Profit on disposal of mining assets (254,749) (1,619,979)
Headline loss (5,988,966) (5,193,840)
CONSOLIDATED BALANCE SHEET
ASSETS
Non-current assets 24,164,973 24,501,831
Mining assets 10,664,973 11,001,831
Intangible assets 13,500,000 13,500,000
Current assets 5,123,832 1,926,537
Accounts receivable 687,980 1,359,759
Cash and cash equivalents 4,435,852 566,778
Total assets 29,288,805 26,428,368
EQUITY AND LIABILITIES
Capital and reserves 24,493,391 19,729,172
Issued capital 58,592,468 55,792,468
Accumulated losses (34,099,077) (36,063,296)
Non-current liabilities 1,575,167 3,573,598
Interest bearing borrowings 1,075,167 1,075,167
Non-interest bearing borrowings - 1,998,431
Rehabilitation provision 500,000 500,000
Current liabilities 3,220,247 3,125,598
Trade and other payables 3,220,247 2,283,264
Bank overdraft - 842,334
Total equity and liabilities 29,288,805 26,428,368
Net asset value per share (cents) 4.35 4.51
CONSOLIDATED CASH FLOW STATEMENT
Cash flow from exploration and (5,758,749) (5,937,358)
maintenance activities
Cash flows from investing activities 470,157 2,306,210
Cash flows from financing activities 10,000,000 4,248,667
Increase in cash and cash 4,711,408 617,519
equivalents
Net cash and cash equivalents (275,556) (893,075)
beginning of period
Net cash and cash equivalents end of 4,435,852 (275,556)
period
STATEMENT OF CHANGES IN EQUITY
Balance at beginning of year 19,729,172 4,954,975
Issue of share capital 10,000,000 20,600,000
Reduction of preference share (7,200,000) -
capital
Net profit / (loss) for the year 1,964,133 (5,825,803)
Balance at end of year 24,493,391 19,729,172
1. GENERAL
The company`s suspension was lifted and trade began on the JSE Securities
Exchange South Africa with effect from 31 March 2004. Since that date the
company has utilised the investment of R10 million from RMB Asset Management
(`RMBAM`) to settle creditors, repay shareholder loans and continue with its
exploration program. The following report provides an update of the results of
the geological work conducted to date, commentary on the company`s prospects as
well as a review of the financial results. Full details appear in the annual
report for the year ended 30 June 2004 (`the 2004 annual report`).
2. GEOLOGICAL AND OPERATIONAL REVIEW
The company has rights over two properties - the Paardeberg East project near
Kimberley and the Skeyfontein project near Postmasburg, which is held in a joint
venture with the Skeyfontein Communal Property Association.
Paardeberg East
Several consultants have conducted exploration studies on the Paardeberg East
project. In June 2004, MSA Geoservices (Pty) Limited (`MSA`) was commissioned
to conduct a desk top study to summarise all the work carried out to date. MSA
concluded that much of the data previously presented to the company by the
consultants on the project was incomplete and will have to be re-verified in
order for the company to be able to report a resource in compliance with SAMREC.
Accordingly, in order to comply with SAMREC, the company has decided to withdraw
the resource estimates for Paardeberg East which were published on 9 December
2003. This does not alter the fact that Paardeberg East does contain
diamondiferous kimberlites. Management estimates a minimum grade of 9.5 cpht
based on the 200 000 tonnes mined and 19 000 carats reported sold between August
1998 and June 2002.
Skeyfontein
MSA has commenced a kimberlite exploration program on the farm Skeyfontein. The
program will continue into the 2005 year and envisages progress to a kimberlite
identification drilling campaign by that time. Stream sediment samples have
been collected across the whole farm and are currently being analysed.
Kimberlite indicator minerals have been recovered in a number of samples. A
kimberlite dyke outcrop has been located and rock chip samples are being
analysed to determine diamond potential.
3. FUTURE FUNDING OF THE COMPANY
As advised in the company`s previous results announcement dated 29 March 2004,
the company intends to sell certain of its moveable assets including its Dense
Medium Separation (`DMS`) plant. This plant is considered to be unsuitable for
the needs of the project in its current phase of development. In addition, the
company intends to raise capital through issuing new shares for cash. The
directors are of the view that the funds to be raised from this sale of assets
and issue of shares will be sufficient to fund the company`s exploration program
for another year.
4. FINANCIAL REVIEW
Audit, review and accounting policies
The results for the year ended 30 June 2004 have been audited by Charles Orbach
& Company. Their audit opinion is available for inspection at the registered
office of the company. Without qualifying their report, the auditors have drawn
attention to the going concern status of Diamond Core which is expected to be
rectified by the sale of assets and issue of shares for cash as detailed in
paragraph 3 above.
The accounting policies and methods of computation applied by the company are
consistent with those applied in the previous financial years and periods.
These policies are in compliance with South African Statements of Generally
Accepted Accounting Practice.
Commentary
Earnings for the year under review have increased by 120% to 0,42 cents (2003:
(2,15) cents) per share. The headline loss decreased by 33% to (1,28) cents
(2003: (1,95) cents) per share. Although the net asset value per share
decreased by 4% to 4,35 cents per share, the net tangible asset value per share
increased by 37% to 1,95 cents per share.
Factors that have resulted in the group`s improved performance include:
- the cancellation of the preference shares in the amount of R7,200,000;
reducing various costs within the group;
- the writing off of long term debt amounting to R1,998,431 by agreement with
the lenders.
Other income:
Other operating income during the period ended 30 June 2004 comprises profit on
sale of mining assets - 49% and discounts received on settlement of certain
creditors - 51%. In the year ended 30 June 2003, other operating income
comprised profit on the sale of mining assets - 50%, foreign exchange gains on
various long-term borrowings - 30%, discounts received on settlement of certain
creditors - 17% with the balance being an insurance claim received.
Share capital:
Issues of new shares: In March 2004, 126 million shares were issued to RMBAM for
R10 million. In July 2004, 5 037 800 shares were issued to QuestCo (Pty)
Limited in part payment of advisory fees and this issue is reflected in the
diluted earnings per share set out above.
Proposed consolidation of shares and reduction of par value: The company is
proposing to consolidate its shares on a ten for one basis as well as to reduce
the par value of the shares from 10 cents, on a consolidated basis, to 0.1 cents
on a consolidated basis. Details of these resolutions are set out in the notice
of AGM which forms part of the 2004 annual report.
5. FUTURE PROSPECTS
The exploration targets of the company have different time horizons and most of
them will not yield cash flow during the next twenty four months. The business
plan for 2004 and 2005 is therefore to continue to explore the kimberlite assets
of the company in a systematic and professional manner and to focus on acquiring
cash generative alluvial diamond deposits which can be brought to account in the
near future.
6. APPOINTMENT OF CHAIRMAN AND CONSULTING GEOLOGIST
As stated in a release on SENS on 2 September 2004, shareholders will be asked
to ratify the appointment of Mr Andre Louw as the new chairman of the company
with effect from the date of the AGM.
In addition, the company has recently appointed Mr Robert Cooke as its
consulting geologist. Mr Cooke was the exploration manager for Rio Tinto in
South Africa and now runs his own mineral consulting business with offices in
Kimberley and Cape Town. Robert will oversee Diamond Core`s other contractors
and consultants and will also advise the board on strategy.
7. NO CHANGE STATEMENT AND DETAILS OF AGM
The 2004 annual report will be posted to shareholders today. The financial
information presented in such report is unchanged from that presented above.
The AGM will be held in the boardroom at the company`s offices, 5th Floor, South
Wing, Hyde Park Corner, cnr Jan Smuts and William Nicol Ave, Hyde Park, Sandton,
Johannesburg on Thursday 21 October 2004 at 09h00.
For and on behalf of the board:
T Botoulas D Levithan
Managing director Non-executive director
29 September 2004
Directors: CP Dollery*, S Nachom**, D Levithan, T Botoulas *British, **American
Non-Executive
Company secretary: K Plekker
Registered address: 5th Floor, South Wing, Hyde Park Corner, cnr Jan Smuts and
William Nicol Ave, Hyde Park, Sandton
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited, 70
Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown, 2107)
Sponsor: Sasfin Corporate Finance, A division of Sasfin Bank Limited
Date: 28/09/2004 04:04:42 PM
Produced by the JSE SENS Department
