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MATODZI RESOURCES LIMITED - INTERIM REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER
2004
Matodzi Resources Limited
(Incorporated in the Republic of South Africa)
(Registration number 1933/004523/06)
Share code: MTZ
ISIN: ZAE000042412
(`Matodzi` or `the Company`)
Interim Report for the six months ended 30 September 2004
Highlights
Matodzi now controls Letseng
- Commercial production commenced during the second quarter of the financial
year
- 21 882 carats at a grade of 2,2 carats per 100 ton has been recovered to 11
November 2004
- The diamonds were sold for an average of $1 025 per carat
The exploration and mining programme is currently being revamped
The Orlyfunt Consortium is acquiring preference shares held by JCI Limited from
Matodzi
Abridged consolidated income statements (abridged)
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 30 September 31 March
September 2003 2004
Group Notes 2004 R`000 R`000
R`000
Revenue 141 679 88 153
Net profit/(loss) for the 1 32 912 (4 689) (20 152)
period
Fair value adjustments 2 (63 050) - 27 711
Net (loss)/profit before (30 138) (4 777) 7 712
taxation
Taxation 3 (86) - (317)
(Loss)/profit after taxation (30 224) (4 777) 7 395
Profit attributable to outside 458 - 4 167
shareholders
(Loss)/profit attributable to (30 682) (4 777) 3 228
shareholders
(Loss)/earnings per share 4
(cents)
- headline (loss)/earnings (20,6) (3,2) 2,2
- attributable (loss)/earnings (20,6) (3,2) 2,2
- diluted headline (8,8) (1,4) 0,9
(loss)/earnings
- diluted attributable (8,8) (1,4) 0,9
(loss)/earnings
Notes to the income statements
1.Profit/(loss) for the period
is stated after taking into
account the following:
- Interest received 363 2 851 3
- Depreciation (13 048) - (13)
- Finance costs (5 883) (2 136) (14 732)
2. Fair value adjustments
- Investments (63 050) - 27 711
3. Taxation
- Current year 86 - 5
- Prior year underprovision - - 312
86 - 317
4. (Loss)/earnings per share
are calculated as follows:
Attributable (loss)/profit for (30 682) (4 777) 3 228
year
Weighted number of ordinary 149 262 157 149 262 157 149 262 157
shares in issue
Weighted diluted number of 349 262 157 349 262 157 349 262 157
ordinary shares in issue
Cash flow statements (abridged)
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 September 30 September 31 March
2004 2003 2004
Group R`000 R`000 R`000
Cash flows from operating activities 48 606 4 037 (19 560)
Cash flows from investing activities (26 323) 63 420 (63 661)
Cash flows from financing activities 16 654 (67 835) 83 083
Net movement in cash and cash
equivalents 38 937 (378) (138)
Cash and cash equivalents
- at beginning of period 97 235 235
- cash of subsidiary acquired -
1 April 2004 9 850 - -
Cash and cash equivalents at end of
period 48 884 (143) 97
Statement of changes in equity
Accumu-
lated (loss)/
Share Share retained
capital premium earnings Total
Group R`000 R`000 R`000 R`000
Balance 31 March 2003 39 315 179 390 (89 800) 128 905
Change in accounting policy - 5 000 5 000
AC133 restatement
Net profit for the year 3 228 3 228
Balance 31 March 2004 39 315 179 390 (81 572) 137 133
Net loss for the period (30 682) (30 682)
Balance on 30 September 2004 39 315 179 390 (112 254) 106 451
Registered office
28 Harrison Street, Johannesburg, 2001. (PO Box 6966, Johannesburg, 2000)
Investor relations
Khangale Makhado
28 Harrison Street, Johannesburg, 2001. (PO Box 6966, Johannesburg, 2000)
Tel: + 27 11 688 5001, Fax: + 27 11 688 5101
Transfer secretaries
Computershare Investors Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg, 2001. (PO Box 61051, Johannesburg, 2107)
Sponsor
River Sponsors (Pty) Limited
Block C, 1st Floor, Parc Nouveau, 225 Veale Street, Brooklyn, Pretoria, 0181
(PO Box 1666, Groenkloof, 0027)
River Group Logo
Consolidated balance sheets (abridged)
Unaudited Unaudited Audited
30 September 30 September 31 March
2004 2003 2004
Group Notes R`000 R`000 R`000
Assets
Non-current assets
- Mining assets, property, 228 629 24 949 25 177
plant and equipment
- Goodwill 77 778 - -
- Investments and loans 2 75 155 262 622 248 661
381 562 287 571 273 838
Current assets 103 033 470 848
Total assets 484 595 288 041 274 686
Equity and liabilities
Capital and reserves
- Shareholders` interest 3 106 451 133 547 137 133
- Outside shareholders 62 447 71 000 52 500
Interest-bearing borrowings 4 282 916 65 655 78 067
451 814 270 202 267 700
Current liabilities
- interest bearing 7 784 - 73
- non-interest bearing 24 997 17 839 6 913
32 781 17 839 6 986
Total equity and liabilities 484 595 288 041 274 686
Number of shares in issue
- ordinary shares of 25 cents 149 262 157 149 262 157 149 262 157
each
- `B` preference shares of 1 200 000 000 200 000 000 200 000 000
cent each
Net asset value per share
(cents)
- ordinary shares 30,5 38,2 39,3
- `B` preference shares 30,5 38,2 39,3
Notes to the balance sheets
1. Basis of accounting
The consolidated results are prepared in accordance with South African
Statements of Generally Accepted Accounting Practice (`GAAP`) and Schedule 4 of
the Companies Act. These Accounting Policies are consistent with those used in
the annual financial statements for the year ended 31 March 2004, except for the
adoption of AC140: Business Combinations, in terms of which goodwill is no
longer amortised but is instead reviewed for impairment in terms of AC128:
Impairment of Assets.
2.Investments Unaudited Unaudited Audited
30 September 30 September 31 March
2004 2003 2004
R`000 R`000 R`000
Listed investments - at 69 355 176 988 163 029
market value
Unlisted investments 1 000 1 000 1 000
Directors` valuation of 1 000 3 500 1 000
unlisted investments
During the period 2 794 044 Energem shares (formerly Diamond Works Limited) were
disposed of.
3. During the period under review, the Company`s authorised share capital
remained unchanged at
250 000 000 ordinary shares of 25 cents each, 200 000 000 `B` preference shares
of 1 cent each, of which 149 262 157 ordinary shares and
200 000 000 `B` preference shares remained in issue throughout the period.
4. Interest-bearing borrowings includes a loan which was entered into to
acquire 126 834 740 ordinary shares in JCI Limited. The loan amount is stated at
outstanding capital and accrued interest. The initial loan amount was R64,6
million. Interest is calculated at the prime overdraft rate, is secured by a
pledge of the 126 834 740 JCI Limited shares and is repayable on 31 August 2006.
Over and above the interest the lender is also entitled to receive an amount
equal to 50% of any increase in the market value of the shares at the date of
repayment.
Commentary
Matodzi controls its 50% held subsidiary, Letseng Investment Holdings (South
Africa) (Pty) Limited which owns 76% of Lesotho`s newly established and
flourishing LetsGBPeng Diamonds Project.
Matodzi is revamping its exploration and mining programme and is busy converting
its diversified portfolio of mineral rights into new order rights. Matodzi is
also re-negotiating its option agreements.
The loss reflected in the income statement was mainly attributable to the fair
value adjustments in Matodzis` investment in JCI. The JCI shares are greatly
undervalued and the board of directors are of the opinion that this will improve
in the near future.
JCI has relinquished its preference shares in Matodzi through the `Orlyfunt` BEE
transaction currently taking place.
After start-up, the kimberlite processing plant passed the million tons treated
mark on 11 November. Headfeed was derived from the Satellite Pipe pit (85%),
and the main pipe stockpile (15%). During this period, 21 882 carats were
recovered at a grade of 2,2 carats per hundred tons. The diamonds were sold for
an average of US$1 025 per carat.
To date, alluvial production amounts to 6 175 carats, recovered from 375 000
tons of gravel, at a grade of 1,6 carats per hundred tons. Sales averaged US$1
860 per carat.
A 123 carat white stone was recovered from the gravels in early November and is
insured for US$2 million. The diamond was displayed at the official opening of
the mine, which was performed by His Majesty King Letsie III, on 26 November
2004.
For and on behalf of the board
Andrew Mlangeni Sello Rasethaba
Non-executive Chairman Executive Director
Johannesburg
22 December 2004
Date: 22/12/2004 05:30:11 PM
Produced by the JSE SENS Department
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