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SIM: Simmers - Reviewed provisional results for...
Simmers - Reviewed provisional results for the year ended 31 March 2005 and
further cautionary announcement
SIMMER & JACK MINES LIMITED
Incorporated in the Republic of South Africa
(Registration number 1924/007778/06)
Share code SIM ISIN ZAE000006722
(the Group) or
(the Company) or
(Simmers)
Reviewed provisional results for the year ended 31 March 2005 and further
cautionary announcement
- Fully underwritten rights issue to raise R129 million
- BEE company acquires 50,9% of Simmers
- Prospecting and mining rights applications accepted
- Simmers has preferable bidder status for the Hartebeestfontein
and Buffelsfontein mines
- Comprehensive board restructuring
CONDENSED GROUP INCOME STATEMENTS
Reviewed Audited
Year ended Year ended
31 March 31 March
2005 2004
R000 R000
Revenue 30 887 38 335
Cost of sales (37 552) (43 593)
Loss from mining activities (6 665) (5 258)
Corporate expenses (7 695) (14 447)
Operating loss (14 360) (19 705)
Loss on disposal of subsidiary (14 497) -
Income from investments 65 95
Amortisation and depreciation (3 047) (4 233)
Finance charges (8 665) (5 775)
Loss before taxation (40 504) (29 618)
Taxation - -
Loss for the year (40 504) (29 618)
Ordinary shares in issue (000) 224 942 215 442
Treasury shares - Share Incentive (21 500) (12 000)
Trust (000)
Adjusted shares in issue at year-end 203 442 203 442
(000)
Net asset value per share (cents) (17,2) 2,7
Headline loss per share (cents)* (12,8) (14,6)
Loss per share (cents)* (19,9) (14,6)
* Based on weighted average number of
shares
in issue (000) (excluding Treasury 203 442 203 442
shares)
Reconciliation between loss and
headline loss:
Basic loss for the year (40 504) (29 618)
Add back:
Loss on disposal of subsidiary 14 497 -
Headline loss for the year (26 007) (29 618)
CONDENSED GROUP BALANCE SHEETS
Reviewed Audited
Year ended Year ended
31 March 31 March
2005 2004
R000 R000
ASSETS
Non-current assets 45 554 62 207
Mining assets 45 352 61 879
Other assets 108 -
Environmental Rehabilitation Trust 94 328
Fund
Current assets 3 606 6 562
Inventories 1 565 2 807
Trade and other receivables 1 520 2 436
Cash and cash equivalents 521 1 319
Total assets 49 160 68 769
EQUITY AND LIABILITIES
Equity capital and accumulated loss (34 921) 5 583
Shareholders interest (34 922) 5 582
Minority shareholders interest 1 1
Non-current liabilities 1 071 56 357
Environmental rehabilitation provision 1 000 800
Long-term loans payable 71 -
Shareholders loan - 53 853
Obligations under instalment sale - 1 704
Current liabilities 83 010 6 829
Shareholders loan 76 081 -
Trade and other payables 6 913 6 052
Obligations under instalment sale 16 777
Total equity and liabilities 49 160 68 769
CONDENSED GROUP STATEMENTS OF CHANGES IN EQUITY
Treasury
shares -
Share Accumu-
Share Share Incentive lated
capital premium Trust loss Total
R000 R000 R000 R000 R000
Balance as at 1 4 307 106 543 (1 200) (74 451) 35 199
April 2003
Net loss for the - - - (29 618) (29 618)
year
Treasury shares - - 1 - 1
sold
Balance as at 31 4 307 106 543 (1 199) (104 069) 5 582
March 2004
Net loss for the - - - (40 504) (40 504)
year
Shares issued - 192 2 186 (2 378) - -
Treasury
Balance as at 31 4 499 108 729 (3 577) (144 573) (34 922)
March 2005
CONDENSED GROUP CASH FLOW STATEMENTS
Reviewed Audited
Year ended Year ended
31 March 31 March
2005 2004
R000 R000
Cash utilised in operations (9 821) (9 774)
Investment income received 65 95
Finance charges paid (149) (166)
Cash flows to operating activities (9 905) (9 845)
Cash flows to investing activities (4 676) (13 413)
Cash flows from finance activities 13 783 23 562
Net (decrease)/increase in cash and (798) 304
cash equivalents
Cash and cash equivalents at beginning 1 319 1 015
of year
Cash and cash equivalents at end of 521 1 319
year
NOTES TO THE FINANCIAL STATEMENTS
1 Commitments
Authorised capital expenditure
- contracted 1 325 -
- not yet contracted for 7 916 5 973
Total commitments 9 241 5 973
2 Related parties and related party transactions
Related parties
Related parties where control existed during the year were as
follows:
Directors: M McChesney
Shareholders: Consolidated Mining Management Services Limited
Companies: Cheston Minerals (Pty) Limited
During the year, the Group entered into the following transactions
with related parties:
Interest Management Amounts owed to
Paid fee paid related parties
R000 R000 R000 R000 R000 R000
31/03/05 31/03/04 31/03/05 31/03/04 31/03/05 31/03/04
Consolidated
Mining
Management
Services
Limited 8 517 5 608 - - 76 081 53 852
Cheston
Minerals
(Pty) - - 2 000 4 200 - -
Limited
Until 30 November 2004, the Company and its subsidiaries were managed by Cheston
Minerals (Pty) Limited (Cheston). M McChesney, a former director of the
Company, has a 100% interest in Cheston.
On 31 August 2004, Simmers sold Makonjwaan Imperial Mining Company (Pty) Ltd
(Mimco) to Orlyfunt Holdings (Pty) Limited (Orlyfunt) for R3 million.
Cheston purchased Mimco from Orlyfunt for R3 million, which was settled through
the delivery of 11 334 600 Simmers shares.
3 Comparative figures
The comparative figures have been reclassified in certain cases.
Further cautionary announcement
Shareholders are referred to the cautionary announcement published on SENS on 26
April 2005 and are advised to continue to exercise caution when dealing in
Simmers shares as negotiations continue.
Financial review
The provisional results for the year ended 31 March 2005 have been prepared in
terms of South African Statements of Generally Accepted Accounting Practice and
in accordance with the Groups accounting policies which are consistent with
those used in the audited financial statements for the year ended 31 March 2004.
The provisional results have been reviewed by our auditors, Grant Thornton, and
a copy of their unmodified review report on the condensed financial statements
contained in the provisional report is available for inspection at the Companys
registered office.
The loss for the 2005 year increased by 37% from the previous year. The loss
from mining activities includes the R3,7 million loss incurred by the Lily mine
during the first five months of the year.
Shareholders are referred to the announcement published on 22 July 2005 and the
interim results announcement published on 24 November 2004. It was advised in
these announcements that the Company had sold Mimco, a wholly owned subsidiary
of the Company, which operated the loss- making Lily Mine, for R3 million to
Orlyfunt Holdings (Pty) Ltd (Orlyfunt) with effect from 1 September 2004 (the
disposal). The disposal has now been ruled a related party transaction by the
JSE. As such, full details of the disposal, including an independent fair and
reasonable opinion on the terms and conditions of the disposal will be included
in the 2005 annual report. Shareholders will be requested to ratify the disposal
in the upcoming annual general meeting of the Company. Shareholders holding in
excess of 75% of the Companys securities that are allowed to cast their votes
have signed irrevocable undertakings to vote in favour of the disposal.
Comments
Simmers proposed a fully underwritten renounceable rights offer on 31 January
2005, whereby the Company raised R129 million. The purpose of the rights offer
was to enlarge the Companys capital base in order to repay indebtedness to its
major shareholder and to provide working capital in order to revitalise and
expand its mining operations under the new operational management team and
restructured board of directors. These initiatives, together with a range of
actions taken at operational level as well as the development of additional gold
resources, should return Simmers to profitability. On completion of the rights
offer Simmers has no interest-bearing debt and cash resources of approximately
R50 million.
Jaganda (Pty) Limited, a BEE company, has acquired 50,9% of the issued share
capital of Simmers which will assist Simmers in becoming compliant with the
Mining Charter and the MPRD Act, which at the same time will fulfil the
Companys vision for broad-based socio-economic upliftment. This will also make
Simmers the first black-controlled gold producer listed on the JSE. On 23 June
2005 Mr HC Buitendag resigned as a director and Ms BJ Njenje and Mr AV Mkele
were appointed as directors.
Prospects
The Company has embarked on a growth strategy by building on the base of its
Mpumalanga assets as it searches for gold mining opportunities in the
Witwatersrand. The Company has had its applications for prospecting and mining
rights in the Sabie and Pilgrims Rest goldfields, as well as the mining right
for the Randfontein No 4 Shaft, accepted by the Department of Minerals and
Energy. The Company is meeting the obligations required to secure the mining
rights over these deposits.
Following the liquidation of DRDGolds North-West operations Simmers has
submitted an offer to the liquidators to acquire the mining assets of the
Buffelsfontein and Hartebeestfontein operations. If the Company succeeds in
these two acquisitions then it will meet its objective of becoming a 400 000 oz
producer within three years. The Company will continue to seek out new
opportunities to turn selected marginal producers into profitable operations.
The Groups strategy is to attain low-cost producer status through the
application of sound engineering principles and short interval controls. To this
end, strong hands-on project management and disciplined technical reviews with a
hurdle rate driven filter process is essential while turn-around strategies and
skills requirements will be tailored to suit the individual needs of each
operation. This will be underpinned with strong relationships with labour,
regulators and the communities in which the Group operates.
By order of the Board
Consolidated Mining Management Services Limited
Secretaries
25 July 2005
Johannesburg
Transfer secretaries
South Africa
Computershare Investor Services 2004 (Pty) Ltd
Ground Floor 70 Marshall Street
Johannesburg 2001
Republic of South Africa
United Kingdom
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Investor relations
Gail Strauss
Tel +2784 777 4060
Fax +2711 884 2074
E-mail gailstrauss@mweb.co.za
Registered office
5 Press Avenue Selby Johannesburg
Republic of South Africa
www.simmers.co.za
Sponsor
Sasfin Corporate Finance
A division of Sasfin Bank Limited
Sasfin Place North Block
13 - 15 Scott Street
Waverley 2090
Directors RAR Kebble (Non-executive Chairman) BJ Njenje (Non-executive
Vice-chairperson) GT Miller (CEO)
J de V Berry GP Wanblad AV Mkele
(Non-executive) JP Schumacher
(Non-executive Swiss) E Oosthuizen (Alternate director to JP Schumacher)
