| Wed 29 Sep 2004, 18:32 | | results for the six months ended 30 June 2004 |
|
Messina - Unaudited interim results for the six months ended 30 June 2004
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 2004
Abridged Consolidated Income Statements
FOR the period ended 30 June 2004
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6 months to 6 months to 12 months to
June June December
2004 2003 2003
R`000 R`000 R`000
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Revenue 112 776 - 65 747
Cost of sales (127 880) - (72 255)
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Gross loss (15 104) - (6 508)
Other operating income 6 575 101 1 881
Distribution expenses (3 398) - (2 031)
Administrative expenses (18 731) (727) (14 126)
Other operating expenses (49 652) - (29 313)
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Loss from operations (80 310) (626) (50 097)
Net finance cost (41 226) 120 (23 090)
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Loss before tax (121 536) (506) (73 187)
Taxation - - -
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Net loss (121 536) (506) (73 187)
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Earnings per share
(cents)
- basic (605.56) (3.26) (437.12)
- headline (610.08) (3.26) (433.39)
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Reconciliation of 6 months to 6 months to 12 months to
headline earnings June 2004 June 2003 December 2003
R`000 R`000 R`000
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Basic (loss) (121 536) (506) (73 187)
attributable to
shareholders
Adjustments (907) - 625
(Profit)/loss on
disposal of assets
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Headline earnings (122 444) (506) (72 562)
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Headline earnings per (610.08) (3.26) (433.39)
share (cents)
Weighted average number 20 070 15 557 16 743
of ordinary shares in
issue (`000)
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Abridged Consolidated Balance Sheets
at 30 June 2004
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6 months to 6 months to 12 months to
June June December
2004 2003 2003
R`000 R`000 R`000
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Assets
Non-current assets 1 115 243 1 035 954 1 128 105
Property, plant and 196 848 218 661 208 699
equipment
Mining assets 885 838 816 615 902 236
Exploration projects 26 207 - 16 492
Investments 6 350 678 678
Current assets 57 388 48 167 70 133
Inventories 18 137 18 990 7 960
Receivables and 39 122 29 125 61 036
prepayments
Cash and cash 129 52 1 137
equivalents
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1 172 631 1 084 121 1 198 238
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Equity and liabilities
Capital and reserves 307 125 231 995 428 661
Ordinary shares 10 035 7 779 10 035
Share premium 442 384 175 293 442 384
Reserves (145 294) 48 923 (23 758)
Non-current liabilities 452 560 624 937 435 244
Ultimate shareholders` 115 661 220 740 53 914
loan
Interest bearing 327 325 395 753 372 127
borrowings
Environmental obligation 9 574 8 444 9 203
provision
Current liabilities 412 946 227 189 334 333
Trade and other payables 115 388 74 736 110 393
Current portion of 109 105 58 891 106 852
borrowings
Bank overdraft 188 453 93 562 117 088
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1 172 631 1 084 121 1 198 238
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Net asset value per 15.30 14.91 21.36
share (rand)
Number of shares in 20 070 15 558 20 070
issue (000`s)
Consolidated Statements of Changes in Equity
for the period ended 30 June 2004
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Capital Reserves
Share Share Redemption Retained
Capital Premium reserve Earnings Total
R`000 R`000 R`000 R`000 R`000
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Balance at 10 035 442 384 2 002 (25 760) (23 758)
1 January 2004
Loss for the (121 536) (121 536)
period
Balance at 10 035 442 384 2 002 (147 296) (145 294)
30 June 2004
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Consolidated Cash Flow Statements
for the period ended 30 June 2004
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6 months to 6 months to 12 months to
June June December
2004 2003 2003
R`000 R`000 R`000
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Cash flows from
operating activities
Loss before tax (121 536) (506) (73 187)
Adjustment for:
Net finance cost 41 226 (120) 23 090
Depreciation 10 206 - 4 629
Amortisation 32 614 - 19 554
Profit/(loss) on (908) - 169
disposal of assets
Assets written-off - - 456
Loss from operations (38 398) (626) (25 289)
Changes in working 16 732 (28 217) (13 441)
capital
Inventories (10 177) (10 087) 943
Receivables and pre- 21 914 4 905 (27 006)
payments
Trade and other payables 4 995 (23 035) 12 622
Net finance cost (41 226) 120 (23 090)
Net cash flow from (62 892) (28 723) (61 820)
operating activities
Cash outflows for (29 051) (154 855) (271 814)
investment activities
Increase in property, (65) (5 054) (9 808)
plant and equipment
Proceeds from disposal
of property, plant and
equipment
2 616 - 804
Increase in mining
assets and development
cost
(16 215) (149 800) (246 317)
Increase in exploration (9 715) - (16 492)
projects
Increase in non-current (5 672) (1) (1)
investment
Cash inflows for fund 19 570 185 785 313 400
raising activities
Ultimate shareholders
loan
Increase during the 61 747 166 888 207 871
period
Converted to ordinary - - (207 809)
shares
Proceeds from issue of - - 269 347
ordinary shares
Increase/(decrease) in
long-term borrowings
(42 548) 18 897 43 232
Increase in 371 - 759
environmental obligation
Net (decrease)/increase
in cash and cash
equivalents
(72 373) 2 207 (20 234)
Cash and cash
equivalents at beginning
of period
(115 951) (95 717) (95 717)
Cash and cash
equivalents at end
of period
(188 324) (93 510) (115 951)
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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.
At the Messina Platinum Phase I Mine (Voorspoed Section) steady progress
continued during the period under review, with production coming from the 150,
200, 275 and 350 metre levels. Messina produced approximately 39 500 ounces of 5
PGE`s plus gold from approximately 328 500 tonnes milled.
The average head grade for the period was 4,22 grams per tonne (5PGE`s + Au) and
the plant recoveries were 88,65 percent.
The results for the half year reflect a loss per share of 610 cents, this is
primarily due to the continued strength of the Rand and the mine still being in
a build up stage to full production.
Production during the period under review was below expectations as a
consequence of a number of human resources related factors, including illegal
industrial action in late May, the impact of the implementation of continuous
operations and continuing labour inefficiencies as a result of the relative
inexperience of the workforce.
Over the past three and a half years since production at the mine commenced, the
mine`s management team has sought continuous improvements as its knowledge of
the orebody has improved. The materially lower levels of faulting of the reefs
compared to what was anticipated in the 2000 feasibility study, resulted in a
decision to trial conventional long-hole stoping which was undertaken on the
Merensky reef on the 275 meter level. Based on this experience, Messina is now
implementing mechanised long-hole stoping on the lower levels of the mine.
Compared to conventional down-dip stoping, which is the primary mining method on
the four upper levels, mechanised long-hole stoping is a safer, more efficient
and less costly mining method.
Development to support the build-up to full production is progressing well on
the new 370 and 390-meter levels. These levels have been designed to support
mechanised long-hole stoping. During the period under review, the first long
hole blast was taken on the UG2 reef between the 350 and 370 meter levels.
Results from this blast exceeded expectation with the hanging and footwalls
holding up well and very satisfactory fragmentation being achieved. The long-
hole drilling and blasting on these new levels are now continuing.
The activities described above have been funded by extended advances made and
guarantees given by the company`s ultimate holding company, Southern Platinum
Corporation (previously SouthernEra Resources Limited) of Canada, which holds a
91.5% 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 from Southern Platinum
Corporation, 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 Southern Platinum Corporation.
During the foreseeable period of production build up at the Voospoed section,
the company is and will continue to remain dependent upon the continued
financial support of Southern Platinum Corporation and the company`s bankers;
Southern Platinum Corporation having warranted such support as may be necessary
to preserve the going concern status of the company.
During the period under review Mr WM Eksteen retired from the board.
Subsequent to the period ended 30 June 2004, Southern Platinum advanced the
necessary funds to repay all overdraft facilities and meet the second repayment
due to the consortium of lenders, by way of a shareholder`s loan.
The group`s auditors reviewed the interim results and their report containing an
emphasis of matter regarding the continued financial support from the group`s
ultimate holding company and its bankers is available for inspection at the
company`s registered office.
For and on behalf of the Board
CMH Jennings PC Evans
Chairman Director
27 September 2004
Directors:
Dr. CMH Jennings - Chairman (Canadian)*, PC Evans - CEO, TC Dawson (Canadian)*,
LJ Fox (USA)*, RR Mphahlele*
(* non-executive)
Secretary and registered office Transfer secretaries
MA Kritzinger Computershare Investor Services
Taariq Crescent 2004 (Pty) Limited
30 Jellicoe Avenue 70 Marshall Street
Rosebank 2196, Johannesburg Marshalltown 2001
(PO Box 2668, Saxonwold, 2132) (PO Box 61051, Marshalltown, 2107)
