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pe Diamonds - Reviewed Results For The Year Ended 30 June 2005
Good Hope Diamonds (Kimberley) Limited
(Registration number 1983/013789/06)
Share Code: GDH ISIN: ZAE000050381
(`Good Hope` or `the company`)
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2005
All figures in R000`s
Consolidated Income Statement
Year ended Year ended
30 June 2005 30 June 2004
(reviewed) (audited)
Revenue 2144 1617
Operating loss 1645 5093
Depreciation 1069 3067
Loss on discontinued operations 3759 0
Net Interest paid 1217 766
Goodwill amortised 2374 2374
Attributable loss 10064 11300
Number of shares in issue 122000 122000
Headline loss per share (cents) 3.22 7.11
Loss per share (cents) 8.25 9.26
Reconciliation between loss 2374 2374
and headline loss
Attributable loss 10064 11300
Goodwill amortised (2374) (2374)
Loss on discontinued operations (3759) 0
Loss on disposal of property,
plant and equipment 0 (247)
Headline loss 3931 8679
Consolidated Balance Sheet
30 June 2005 30 June 2004
(reviewed) (audited)
Assets
Non-current assets 94027 116835
Property, plant and equipment 92306 115114
Investments 1721 1721
Current assets 8997 2738
Operating assets 8978 2681
Cash and cash equivalents 19 57
Total Assets 103024 119573
Equity and Liabilities
Capital and reserves 76854 88725
Share capital and premium 125955 125955
Non-distributable reserves 8276 10083
Accumulated loss (57377) (47313)
Non-current liabilities
Interest bearing borrowings 22531 25810
Current liabilities 3639 5038
Operating liabilities 3265 4423
Interest bearing liabilities 374 615
Total Equity and Liabilities 103024 119573
Net asset value per share (cents) 63.00 72.73
Statement of Changes in Equity
Year ended Year ended
30 June 2005 30 June 2004
(reviewed) (audited)
Balance at beginning of year 88725 25
Realisation of premium on
acquisition of subsidiaries (1807) 0
Issue of shares 0 100000
Net loss for the year (10064) (11300)
Balance at end of year 76854 88725
Consolidated Cash Flow Statement
Year ended Year ended
30 June 2005 30 June 2004
(reviewed) (audited)
Cash flow from operating
activities (10907) (1683)
Net interest paid (1217) (766)
(12124) (2449)
Cash flow from investing
activities 15606 (109950)
Cash flow from financing
activities (3279) 111801
Net increase in cash and cash
equivalents 203 (598)
Cash and cash equivalents at
beginning of year (558) 40
Cash and cash equivalents at end
of year (355) (558)
Commentary
Since the acquisition of the Loxton and Frank Smith diamond mines in November
2003, the company`s intention was to dispose of its equine interests and to
focus on the diamond mining industry. As announced on 13 September 2004, the
company sold its equine interests for R10,4 million, resulting in a loss on
disposal of R3,7 million.
The group is being funded by a trust owned by a material shareholder in the
company, and in April 2004, mortgage and notarial bonds were registered over the
properties owned by Don Diamonds (Pty) Ltd (`Don`) and Good Hope Diamonds &
Estates (Pty) Ltd (`Estates`), and the shares in the two companies were pledged
in favour of the trust in order to secure the funding given and also the
continued funding of the group`s operation. Thereafter, on 15 July 2004, in
terms of a further agreement with the trust, the company acquired directly the
shareholding in Don and Estates, the owners of the Loxton and Frank Smith mines
respectively. Subsequently, after protracted litigation, which was opposed by
the company, an Order was granted placing Diamond Land Mining (Pty) Ltd (`DLM`)
into liquidation. This liquidation should not have any financial impact on the
operations of the company and/or the mines.
As previously stated, the seller of the Frank Smith mine failed to disclose that
the mine did not have an approved mining licence at the time that the company
acquired the shares in DLM. As a result, no mining has taken place at this mine
and this has had a major impact on the group`s results for 2005. An application
is pending with the Department of Minerals and Energy for the mining licence.
However, final approval of the licence is dependent on the group finalizing and
concluding an agreement with a BEE partner. Negotiations are presently taking
place with a BEE group that will add value to the company, and shareholders will
be advised thereof in due course.
Operations at the Loxton mine have only recently commenced with limited
underground mining and the stockpiling of rough diamonds. It is expected that
the mine will be fully operational in the forthcoming year, together with the
Frank Smith mine once the mining licence is approved. Limited diamond sales were
made from diamonds obtained from the processing of the dumps.
Dividend
No dividend has been declared nor is one recommended in respect of the financial
year under review.
Board of Directors
On 15 October 2004, Pieter Keeve resigned as a non-executive director of the
company, and Joe Kossowsky and Yosef Kossowsky were appointed as non-executive
directors.
Auditors
The appointment of RA Hellmann & Co. as the group`s auditors was terminated on
21 January 2005 by the shareholders of the company at its annual general
meeting. Ashton Chartered Accountants Inc. were reappointed in their stead.
Accounting Policies and Review
The accounting policies comply with International Financial Reporting Standards,
and have been consistently applied.
The financial information set out above has been reviewed, but not audited, by
the group`s auditors, Ashton Chartered Accountants Inc. The review report is
available for inspection at the registered office of the company.
On behalf of the board of directors
G Schauder
Company Secretary
Hyde Park
27 September 2005
