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CMO
CMO
Chrometco Limited - Unaudited Consolidated Results for the Financial
Year Ended 28 February 2006
CHROMETCO LIMITED
(previously known as "Sweet Equity Investments (Pty) Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 2002/026265/06)
(JSE Code: CMO&ISIN: ZAE000070249)
("Chrometco" or "the company")
BALANCE SHEET Unaudited Audited
as at as at
28 Feb 28 Feb
2006 2005
R"000 R"000
ASSETS
Non-current assets 244 2 961
Motor vehicles and equipment 244 235
Intangible assets - 2 600
Other long-term receivables - 126
Current assets 2 128 256
Inventories 53 53
Trade and other receivables 248 5
Cash and cash equivalents 1 827 198
Total assets 2 372 3 217
EQUITY AND LIABILITIES
Capital and reserves 1 079 1 033
Issued capital 1 1
Share premium 11 946 2 013
Non-distributable reserves - -
Accumulated loss (10 868) (981)
Minority interests - -
Non-current liabilities 132 1 954
Long-term liabilities 32 1 819
Long-term finance leases 100 135
Current liabilities 1 161 230
Trade and other payables 1 071 167
Provisions 52 3
Current portion of long-term
borrowings 38 34
Taxation payable - 26
Total equity and liabilities 2 372 3 217
Net asset value per share 1.642 0.024
(cents)
Net tangible asset value per 1.64 0.03
share (cents)
Closing number of shares 144 442 133 520
(`000)
INCOME STATEMENT
Unaudited Audited
12 months 12 months
ended ended
28 Feb 28 Feb
2006 2005
R"000 R"000
Revenue - 172
Cost of sales - (125)
Gross profit - 47
Other income 11 2
Operating expenses (5 141) (1 074)
Fair value adjustment for
non-derivative financial liabilities (182) 182
Impairment of intangible assets (4 600) -
Net loss before interest
and taxation (9 912) (843)
Investment income 41 5
Finance charges (16) (19)
Net loss before taxation (9 887) (857)
Taxation - -
Attributable to minority interest 0.1 0.5
Net Loss for the period (9 887) (857)
Reconciliation between earnings and
headline earnings per share
Basic loss per share (cents) (8.08) (0.89)
Diluted loss per share (cents) (8.08) (0.89)
Headline loss per share for the year
ended 28February 2006
Loss for the year (9 887)
Adjustments:
Fair value adjustment 182
Impairment loss 4 600
Headline loss attributable
to ordinary shareholders (5 105)
Headline loss per share (cents) (4.17) (1.08)
Weighted average number of
shares (`000) 122 300 96 494
CASH FLOW STATEMENTS
Unaudited Audited
12 months 12months
ended ended
28 Feb 28 Feb
2006 2005
R"000 R"000
Cash flows from operating
activities (4 584) (875)
Cash flows from investing
activities (98) (702)
Cash flows from financing
activities 6 115 1 305
Net movement in cash and cash
equivalents 1 629 (272)
Cash and cash equivalents at
the beginning of the period 198 471
Cash and cash equivalents at
the end of the period. 1 827 198
STATEMENT IN CHANGES OF EQUITY
Capital Minority Retained
and Premium interest Reserve Earnings Total
R"000 R"000 R"000 R"000 R"000
Balance at 1
March 2004 2 015 - - (124) 1 891
Net loss for
the period - (0.5) - (857) (857)
Change in share
holding of - 0.5 - - 0.5
subsidiaries
Balance at 28
February 2005 2 015 - - (981) 1 034
Change in share
holding of
subsidiaries - 0.1 - - 0.1
Issue of
shares 9 932 - - - 9 932
Net loss for
the period - (0.1) - (9 887) (9 887)
Balance at 28
Feb 2006 11 947 - - (10 868) 1 079
COMMENTARY - Financial and operational overview.
1. The directors present the unaudited consolidated financial results for the
twelve months ended 28 February 2006
2. The audit is in process
3. Basis of preparation
The accounting policies of the group comply in all material respects with
("IFRS") International Financial Reporting Standards and the Companies Act of
1973. The accounting policies and methods of measurement and recognition is
consistent with those applied in the financial period ended 28 February 2005.
4. Investments are valued at cost.
5. Nature of business.
The company is involved in the exploration of chrome resources and the possible
benification thereof, as well as investigations into parallel activities in
copper, cobalt and nickel.
6. General review of operations.
Chrometco Limited was listed on the Alt"X sector of the JSE on 12th August 2005.
During the period under review, the group engaged in the following activities:-
Have negotiated with an offshore financial institution and have subsequently
signed a term sheet for this company to deliver sufficient funding for Chrometco
to commence the development of its Copper Cobalt Refinery and to carry out
feasibility studies on its Nickel and Chrome prospects.
Chrometco completed a scoping drilling activity on the chrome reserves located
on the farm Naboom 451KS. The results of this drilling programme, as tabled
below, were positively accepted by the company, and the board has agreed that a
feasibility study now be undertaken.
Table 1: Average Thickness, Concentration and Expected Recovery from
Diamond Drilling on the farm Naboom 451 KS
Unit Corrected Expected Average Average Average Comments
Thickness Recovery Cr2O3 FeO Cr/Fe
(m) (%) (%) (%)
MG4 3.5 45 30 - 33 20 - 22 1.35 Alternating Chromitite
and Pyroxenite (waste)
Layers
MG3 1.2 70 33 - 35 20 - 23 1.40 Two chromitite layers
with intercalated
pyroxenite middling
MG2 2.5 51 39 - 41 23 - 25 1.41 Three chromitite Layers
(A, B and C) with
intercalated Pyroxenite
layers
LG6 1.8 85 40 - 43 21 - 25 1.50 Fine to medium-grained
with numerous oikocrysts
LG5 0.3 85 38 - 39 21 - 24 1.50 Bottom layer of LG5 unit
( other layers too thin)
A total of seven (7) diamond drill boreholes (1256.12m) were
drilled and completed during February 2006 on the farm Naboom
451 KS.
Expected ROM recovery was determined from estimated mining and
geological losses for the investigated area.
Chrometco is in negotiations with two prospective partners, one of which will be
selected on the basis that they participate in the costs of this feasibility
exercise and subsequently invest in a Ferro Chrome beneficiation plant. This
company will also provide Chrometco with a marketing off-take agreement.
Chrometco has signed a Memorandum of Understanding with an Empowerment Minerals
Holding Company, Amber Mountain Investments 11 (Pty) Ltd, whereby the parties,
by way of a Joint Venture, will undertake a feasibility study on the Nickel ore
deposit situated on the farm Blaauwbank 515 KQ, Limpopo Province.
The feasibility study in the Ingonyama Copper/Cobalt refining project was
completed, and once the funding has been received the development of this
project will commence.
For and on behalf of the board of directors
S.H.Simons
Operations Director
30 May 2006
Dested Designated Advisor & Company Secretary
River Group
Parc Nouveau Building
225 Veale Street, Brooklyn.
Pretoria.
(P.O.Box 166, Groenkloof, 0027)
Directors.
B.A.Williamson (Chairman), S.H.Simons (COO), J.R.Francey (CFO), E.Bramley,
T.W.Scott.
Registered Office.
Office 8, Morgenster Building
3 Main Road
Irene,1675
(P.O.Box 460, Irene, 0062
www.chrometco.co.za
Transfer Secretaries
Computershare Investor Services 2004 (Proprietary) Limited
(Registration number 2004/003647/07)
70 Marshall Street
Johannesburg, 2001
(P.O.Box 61763 Marshalltown,2107)
Warning: Investors are warned that investing in companies listed on ALTx is
speculative in nature and the JSE does not guarantee the viability or success of
the company. In accordance with ALTx"s Listing Requirements, a Designated
Advisor has to be retained by the company. The Designated Advisor is required
to, inter alia, attend all board meetings held by the company to ensure that all
JSE Listing Requirements and applicable regulations are complied with, approve
the financial director of the company and guide the company in a competent,
professional and impartial manner. If the company fails to retain the Designated
Advisor it must make arrangements to appoint a new Designated Advisor within 10
business days, failing which the company
Date: 31/05/2006 07:31:36 AM Produced by the JSE SENS Department
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