| Fri 3 Mar 2006, 15:40 | | Barplats - Condensed consolidated interim results |
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BPL
BPL
Barplats - Condensed consolidated interim results for the six months ended 31
December 2005
Barplats Investments Limited
Incorporated in the Republic of South Africa
(Reg. no. 1987/004830/06)
(ISIN: ZAE000028692)
JSE code: BPL
("Barplats")
Condensed consolidated interim results for the six months ended 31 December 2005
- Strong operational improvement
- 1 167 kg PGMs produced in six months
- Revenue increases to R167.3 million
- Unit costs down
- R36 million capex
- 10 new order prospecting rights granted
Income Statement
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
(R thousand) Notes 2005 2004 2005
Revenue 167 324 - 40 177
Cost of sales 109 158 1 831 36 723
Gross profit/(loss) 58 166 (1 831) 3 454
Other operating income 824 - 1 471
Foreign exchange loss (1 852) - -
relating to concentrate sales
Foreign exchange gain on 4 623 6 140 -
foreign loan
Reversal of impairment - - 56 000
Other expenses 2 (37 989) (8 329) (14 169)
Profit/(loss) before share 23 772 (4 020) 46 756
based payments, net finance
costs and taxation
Share based payments 6 (405 111) - -
(Loss)/profit before net (381 339) (4 020) 46 756
finance costs and taxation
Net finance costs (14 159) (7 167) (21 806)
(Loss)/profit before taxation (395 498) (11 187) 24 950
Income tax - - -
Net (loss)/profit (395 498) (11 187) 24 950
Basic and diluted 7 (136) (5) 11
(loss)/earnings per share
(cents)
Headline and diluted headline 7 (136) (5) (14)
loss per share (cents)
Condensed Balance Sheet
31 Dec 31 Dec 30 June
(R thousand) Notes 2005 2004 2005
Assets
Non-current assets 3 420 478 266 614 391 367
Current assets 141 115 18 617 46 974
Total assets 561 593 285 231 438 341
Equity and liabilities
Capital and reserves 270 572 49 000 83 065
Non-current liabilities 4 100 650 106 134 108 067
Current liabilities 5 190 371 130 097 247 209
Total equity and liabilities 561 593 285 231 438 341
Statement of Changes in Shareholders" Equity
(R Share Share Retained
thousand) capital premium Options earnings Total
Balance at 31 Dec 2 225 1 049 928 - (1 003 153) 49 000
2004
Share issue expenses (2 072) (2 072)
Net profit for the 36 137 36 137
six months ended
30 June 2005
Balance at 30 June 2 225 1 047 856 - (967 016) 83 065
2005
Share issue 782 172 018 172 800
Share issue expenses (958) (958)
BEE transaction 397 986 397 986
Employee related 6 052 6 052
share based payments
Financing related 7 125 7 125
share based payments
Net Loss (395 498) (395 498)
Balance at 31 Dec 3 007 1 218 916 411 163 (1 362 514) 270 572
2005
Condensed Consolidated Cash Flow Statement
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
(R thousand) 2005 2004 2005
Cash flows from operating activities 1 260 (3 762) (23 443)
Cash flows from investing activities (38 602) (59 703) (132 139)
Cash flows from financing activities 106 335 64 683 154 774
Net increase in cash and cash 68 993 1 218 (808)
equivalents
Cash and cash equivalents at the 72 880 880
beginning of the period
Cash and cash equivalents at the end of 69 065 2 098 72
the period
Nature of business
Barplats is a platinum group metals ("PGMs") mining company whose core business
is PGM mining and processing in South Africa"s Bushveld Igneous Complex ("the
BIC"). Barplats" two assets are:
- the Crocodile River Mine on the Western Limb of the BIC near Brits in the
North West Province; and
- the Kennedy"s Vale Project on the Eastern Limb of the BIC near Steelpoort in
Mpumalanga.
Notes
1. The principal accounting policies used by Barplats and its subsidiary
companies ("the group") are in accordance with the International Financial
Reporting Standards ("IFRS") of the International Accounting Standards Board and
the Companies Act, 61 of 1973 (as amended) and are consistent with those applied
in the financial statements for the year ended 30 June 2005.
The financial statements, which have been prepared in accordance with the IFRS
applicable to interim reporting, have been reviewed by KPMG Inc., whose modified
opinion, which includes an emphasis of matter regarding the group"s funding
requirements for the six month period as at 31 December 2005, is available for
inspection at the group"s registered office.
At 31 December 2005 the group"s current liabilities exceeded its current assets
by R49.2 million. Barplats is in the process of raising long-term funding to
continue the growth and expansion of the company"s mining operations and is
optimistic that it will be able to accomplish this optimization of its
portfolio.
As indicated in note 5, Barplats is required to repay loans in the next six
months. The company"s budgets and projected cash flow forecasts, which are based
upon reasonable and supportable assumptions, indicate that the company will
generate positive cash flows during the next six months.
Should the company not be successful in its initiative to meet the forecast cash
outflows and raise long-term funding, there is significant doubt that the
company will be able to meet its obligations in the normal course of business,
and therefore a material uncertainty exists which may cast significant doubt
about the company"s ability to meet its obligations in the normal course of
business and to continue as a going concern.
The directors are confident that the budgets and forecasts and projected cash
flows will be achieved, that the company will meet its obligations as they fall
due and that the company will be a going concern in the year ahead. Accordingly,
the directors continue to adopt a going concern basis in the preparation of the
interim financial statements.
2. Other expenses include:
- Audit, consulting and directors" fees total R3.1 million
- Employee share options of R6.0 million
- Employment costs of R15.9 million
- Insurance of R2.6 million
3. Capital expenditure for the period under review amounted to R36.5 million
(2004: R62.0 million).
4. Non-current liabilities include:
- a provision of R31.4 million for environmental rehabilitation.
- the long-term portion of the interest bearing loan from Impala Platinum
Limited of R36.2 million.
- the interest bearing loan outstanding from Eagle Worldwide Investments Ltd.
("Eagle") of R33.0 million (US$5.9 million).
5. Current liabilities include:
- the portion of the interest bearing loan from Impala that is repayable in June
2006 of R36.2 million.
- the interest bearing loan from Nedbank that is repayable in May 2006 of R103.2
million.
6. Share-based payments include:
During the period ended 31 December 2005, the company had share-based payment
arrangements, which are described below.
6.1 Black Economic Empowerment (BEE) transaction
On 5 July 2005, Barplats shareholders voted in favour of resolutions to
introduce Gubevu Consortium Investment Holdings (Pty) Ltd as a 26% shareholder
in Barplats Investments Limited through the issue of 78 189 851 ordinary shares
on 22 July 2005 for consideration of R172 799 570.71. The share based payment
effect of this transaction is brought about by the fact that the share issue
price paid was below the market value at the time of the transaction. In terms
of IFRS2, Barplats is required to expense the price difference (a non-cash
entry) of R397 986 342 in the period of the transaction.
6.2 Executive share incentive scheme and financing related options
In terms of IFRS2, Barplats is required to expense the value of consideration
(options) granted over the period from grant date to full vesting:
Type of arrangement Employee share Financing related
options options
Date of grant 15 September 2005 5 July 2005
Number granted 3 250 000 2 884 615
share options share options
Vesting conditions One third vested Vested
immediately.
The remaining options
vest
equally on 15 July
2006 and
15 July 2007,
provided the
employees are still
in the
employ of the
company.
Exercise price R3.80 R5.20
7. Earnings per share
The calculation of basic, diluted and headline loss per share is based on a net
loss of R395.498 million (2004: loss of R11.187 million).
The basic and diluted weighted average number of shares in issue increased
during the period to 291 708 289 and 297 842 904 respectively (2004: 222 540
344).
The net asset value per share at 31 December 2005 was 88 cents (2004: 22 cents).
Commentary
Safety
Safety and training of new employees and contractors on site continues to be a
company-wide focus in order to maintain the group"s fatality free record.
People
The number of full time employees increased to 574 from 509 during the period
with the proportion of Historically Disadvantaged South Africans (HDSAs) in
management positions remaining at 31%. The company currently employs 8% women.
The group"s social and labour plan addresses the initiative to support the
Mining Charter.
The number of contractors on site increased to 773 from 501. Contractors are
primarily involved in capital development and construction.
Production
There have been significant improvements in all areas of production. The
Maroelabult section is building up to a steady state production level of 40 000
tonnes per month while the Zandfontein section continues its production build up
phase, with an emphasis on development in this section of the mine.
The unit cost of production continues to be reduced as production levels
increase with capital project commissioning.
Capital projects
Key capital projects are on budget and due for commissioning in the June 2006
quarter. These include the new mill installation, new surface ventilation fans,
chrome separation plant, a dense media separation plant and the decline conveyor
at Zandfontein. In total R36.5m was spent during the period and this is expected
to increase during the next period in line with the production build up.
Mining and Prospecting Rights
Ten new order prospecting rights were granted on 14 February 2006.
Business Development
Comprehensive drilling programmes in the shallower De Goedeverwachting portion
of the Kennedy"s Vale Project and the area to the north of Maroelabult are being
developed as part of the company"s strategic business plan.
The issuing of new order prospecting rights on 14 February 2006 some of which
cover the Crocodile River Mine"s Crocette area allows the drilling and
subsequent mine development to proceed and full production is anticipated in
2007.
Statistics
31 Dec 30 June
Units 2005 2005
Operations
Stoping
Underground tonnage broken tonnes 184 106 43 103
Development
Total metres developed metres 3 127 1 640
Concentrator
Tonnes processed tonnes 577 559 210 403
Recoveries - Hard rock % 74 65
PGM"s sold kg 1 167 312
Revenue
Revenue Rm 167.3 40.2
R/kg sold R/kg 146 468 125 355
Costs
Total cost Rm 147.1 94.4
R/ton milled R/ton 254.8 449.0
R/kg sold R/kg 128 850 302 564
Capital expenditure Rm 36.5 172.1
On behalf of the board
ALLEN PALMIERE WAYNE ROBINSON
Chairman Managing Director 3 March 2006
Directors:
AJ Palmiere (chairman) +, WDR Robinson (managing director),
DWJ McAdam (finance director) +, JB Ahbe #, JE Andrews *,
PJ Botha, PJ Gard *, JR Hawkrigg +
+ Canadian * British # USA
Sponsor: Nedbank Capital
Registered Office:
1st Floor Platinum Place, Turnberry Office Park,
48 Grosvenor Road, Bryanston, Johannesburg, South Africa.
Postnet Suite 177, Private Bag X51, Bryanston, 2021, South Africa. Tel: +27 (0)
11 463 0050. Telefax: +27 (0) 11 463 0090.
Transfer Secretaries:
Computershare Investor Services 2004 (Pty) Ltd
Ground Floor, 70 Marshall Street, Johannesburg, South Africa
PO Box 61051, Marshalltown 2107, South Africa
Tel: +27 (0) 11 370 5000. Telefax: +27 (0) 11 370 5018
www.barplats.net e-mail: info@barplats.net
Date: 03/03/2006 03:40:08 PM Produced by the JSE SENS Department
