| Tue 29 Aug 2006, 10:39 | | Eland Platinum - Unaudited interim financial repor |
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ELD
ELD
Eland Platinum - Unaudited interim financial report June 2006
Eland Platinum Holdings Limited
Incorporated in the Republic of South Africa
(Reg no. 2005/029957/06)
(ISIN: ZAE000078655)
JSE code: ELD
Unaudited Interim Financial Report June 2006
Condensed Consolidated Income Statement
(R thousand) Note Six months From date of
ended 30 incorporation to
June 2006 31 December 2005
Revenue - -
Cost of sales - -
Gross profit - -
Other operating - -
income
Administrative and 2 (19 600) (3 245)
other operating
expenses
Operating loss (19 600) (3 245)
before financing
income/(costs) and
taxation
Net finance 11 172 (194)
income/(costs)
Loss before tax (8 428) (3 439)
Income tax expense 3 (4 854) (64)
Loss for the period (13 282) (3 503)
Attributable to:
Equity holders of (13 282) (3 503)
the parent
Minority interest - -
Loss for the period (13 282) (3 503)
Basic loss per 4 (25.9) (52.5)
share (cents)
Diluted loss per 4 (25.9) (52.5)
share (cents)
Headline loss per 4 (25.9) (52.5)
share (cents)
Net asset value per 1 076.1 305.7
share (cents)
Condensed Consolidated Balance Sheet
(R thousand) Note Six months From date of
ended 30 incorporation to
June 2006 31 December 2005
Assets
Non-current assets 5 151 415 123 895
Current assets 6 590 393 51 397
Total assets 741 808 175 292
Equity and
liabilities
Capital and 714 338 105 324
reserves
Non-current - -
liabilities
Current liabilities 7 27 470 69 968
Total equity and 741 808 175 292
liabilities
Condensed Consolidated Cash Flow Statement
(R thousand) Six months From date of
ended 30 incorporation
June 2006 to 31
December 2005
Cash flows from (41 704) (14 668)
operating
activities
Cash flows from (27 213) (62 394)
investing
activities
Cash flows from 619 777 111 346
financing
activities
Net increase in 550 860 34 284
cash and cash
equivalents
Cash and cash 34 284 -
equivalents at the
beginning of the
period
Cash and cash 585 144 34 284
equivalents at the
end of the period
Condensed Consolidated Statement of Changes
in Shareholders" Equity
(R thousand) Issued Share Accumulated Minority Total
Capital Premium Deficit
Shares issued 345 111 265 - - 111 610
Share issue - (2 783) - - (2 783)
expenses
Minority - - - - -
shareholders"
interest
Loss for the - - (3 503) - (3 503)
period
Balance at 31 345 108 482 (3 503) - 105 324
December 2005
Shares issued 319 649 115 - - 649 434
Share issue - (27 138) - - (27
expenses 138)
Minority - - - - -
shareholders"
interest
Loss for the - - (13 282) (13
period 282)
Balance at 30 664 730 459 (16 785) - 714 338
June 2006
Notes
1. The principal accounting policies used by Eland Platinum Holdings
Limited and its subsidiary companies (the group) are in accordance with
International Financial Reports Standards (IFRSs) of the International
Accounting Standards Board (IASB) and the South African Companies Act, 61
of 1973 (as amended), and are consistent with those applied in the
financial statements for the year ended 31 December 2005, except as noted
below. These interim financial statements have been prepared in accordance
with IAS 34 - Interim Financial Reporting, and have not been reviewed or
audited by the group"s auditors.
The comparative figures disclosed are those for the period from the date
of incorporation to the December 2005 year end. There are no comparative
figures for the corresponding period to June 2005.
During the year the group adopted IFRS 6, Exploration for and Evaluation
of Mineral Resources (IFRS 6). In accordance with this standard,
expenditure incurred in the exploration for and evaluation of mineral
resources has been capitalised to an intangible asset and the group will
continue with such treatment of costs until such time as the technical
feasibility and commercial viability of extracting the mineral resource is
demonstrable. The 2005 results have been restated to comply with IFRS 6
(see note 5).
2. Administrative and other operating expenses include:
- Audit, consulting and directors" fees totalling R1.5 million (2005:
R0.4 million)
- Employment costs of R6.2 million (2005: R0.7 million)
- Insurance of R1.2 million (2005: R Nil)
or relations costs of R1.7 million (2005: R Nil)
- Travel costs of R1.1 million (2005: R Nil)
- Security costs of R1.0 million (2005: R Nil)
l fees of R0.8 million (2005: R1.6 million)
3. Income tax expense comprises current taxation of R4.1 million (2005:
R0.02 million), deferred tax of R0.3 million (2005: R Nil) and secondary
tax on companies of R1.1 million (2005: R0.04 million).
4. Loss per share:
The calculation of basic, diluted and headline loss per share is based on
the loss for the period of R13.3 million (2005: R3.5 million).
The basic and diluted weighted average number of shares in issue increased
during the period to 51 345 087 (2005: 6 668 465).
5. Capital expenditure for the period under review amounted to R27.2
million (2005: R123.9 million) of which R19.4 million (2005: R123.8
million) has been capitalised to an intangible asset in term of IFRS 6.
6. Current assets include:
- Value-added tax recoverable of R2.8 million (2005: R17.1 million)
- Cash of R585.1 million (2005: R34.3 million)
7. Current liabilities include:
- Vendors for fixed property of R5.5 million (2005: R6.5 million)
- Vendors for surface and mineral rights of R2.9 million (2005: R55.0
million)
- Provision for STC on proposed preference share dividend of R1.1 million
(2005: R0.04 million)
- Trade payables of R11.4 million (2005: R5.9 million)
- Current taxation of R4.1 million (2005: R0.02 million)
8. No dividends have been declared nor are any proposed for the period
under review.
Commentary
The first 10 months
In the first 10 months of the group"s existence, much has been achieved.
The group"s primary asset, the Elandsfontein Platinum Project, located on
the Bushveld Igneous Complex (BIC) near Brits in South Africa"s North West
Province, was acquired in October 2005 from Anglo Platinum Limited (Anglo
Platinum) for R117.25 million by Eland Platinum Mines (Pty) Ltd (Eland
Mines), the 65% held subsidiary of Eland Platinum Holdings Ltd (the
company). The company"s Black Economic Empowerment (BEE) partner, the
Ngazana Consortium, holds a 26% interest in Eland Mines, making it fully
compliant at the operational level with the South African Mining Charter"s
10-year target for BEE ownership. Further, the boards of directors of the
company and Eland Mines are BEE-controlled. At both board and senior
management levels, the company is led by people experienced in building
and operating BIC platinum mines.
Eland Platinum"s initial capital raising initiatives have been uniformly
successful: R180 million in seed capital was raised through an initial
private placement with South African and overseas investors in December
2005; a further R525 million was raised in a 4.4 times subscribed private
placement at the time of the company"s listing on the JSE Limited in March
2006; and R55.8 million was raised through the subsequent exercise by the
company"s underwriter, Nedbank Capital, of its over-allotment option.
In February 2006 the Department of Minerals and Energy (DME) granted Eland
Mines a `new order" prospecting right over the Elandsfontein Platinum
Project, enabling Eland Mines, with RSG Global (Pty) Ltd (RSG), to
complete by May 2006 a 58-hole, 22 600-metre in-fill drilling programme.
Data from this augments the considerable body of information obtained from
Anglo Platinum as part of the Elandsfontein acquisition.
During April 2006, an application for a mining right was lodged with the
DME. In May 2006 orders were placed for the longest lead items for the
project, the mills for the concentrator plant, and in the course of June
2006 the resource model was updated to incorporate the new exploration
data.
Financial
As the Elandsfontein Platinum Project is in the development phase ahead of
production, no revenue was generated for the six months to 30 June 2006.
Administrative and other operating expenses amounted to R19.6 million.
After accounting for net finance income of R11.2 million and income tax of
R4.9 million, the group"s loss for the period was R13.3 million, equating
to a headline loss per share of 25.9 cents.
Looking ahead
Completion of a bankable feasibility study and the start of site
preparation activities are expected during the third quarter of 2006. As
announced on 3 August 2006, Nedbank Capital, a division of Nedbank
Limited, has been mandated to arrange the full project finance facility
required for the development of the Elandsfontein Platinum Mine and
Nedbank Capital has committed to achieve financial close by 31 December
2006. The company has also retained N M Rothschild & Sons to act as its
independent financial adviser with regard to the project"s financing
arrangements.
Mine construction is scheduled to begin in the fourth quarter of 2006 and
the start of opencast mining in the first quarter of 2007. Milling of the
first ore is scheduled for the fourth quarter of 2007.
The Elandsfontein Platinum Project
The UG2 and Merensky reefs - the two main platinum bearing reefs of
commercial interest in the BIC - both occur from surface at Elandsfontein.
On 4 August 2006 the group announced a 44% increase in the total UG2
resource of its Elandsfontein Platinum Project. The restated resource is a
SAMREC compliant estimate completed by RSG as part of the bankable
feasibility study. Previously, total UG2 resources of 14.98 million
ounces of 4E PGMs (platinum, palladium, rhodium and gold) were identified
in the Elandsfontein UG2 mineral resource statement forming part of the
competent person"s report, which is included in the company"s March 2006
prospectus. The updated RSG estimate includes:
the original Elandsfontein Platinum Project area, as acquired from Anglo
Platinum; and
- the so-called `triangle" state mineral rights area contiguous to the
eastern border of the original Elandsfontein project area, which forms
part of the Elandsfontein Mine right application accepted by the DME in
April 2006.
The UG2 resource is large (165.4 million tonnes, after 20% geological
losses, at 4.05 grams per tonne), shallow and is estimated to contain
21.58 million ounces of 4E PGMs.
The UG2 4E PGM metal split has been determined independently to be 63.4%
platinum, 26.0% palladium, 9.6% rhodium and 1.0% gold.
The Merensky resource is unquantified at this stage. Additional UG2 and
Merensky resources have been acquired on the contiguous Zilkaatsnek
property. Eland Mines is awaiting the cession and transfer of the
prospecting rights to these properties into its name.
It is estimated that some 4.9 million tonnes of the UG2 resource can be
mined quickly and inexpensively though open-pit mining, and the balance
from underground via similarly inexpensive declines, using conventional
mining methods.
The projected life of mine is in excess of 40 years.
On behalf of the board
Loucas Pouroulis
Chairman
David Salter
Managing Director
29 August 2006
Registered Office:
1st Floor, Eland Platinum House
The Braes
3 Eaton Avenue
Bryanston
South Africa
e: info@elandplats.com
Transfer Secretaries:
Link Market Services South Africa (Pty) Ltd (formerly Ultra Registrars
(Pty) Ltd)
5th Floor, 11 Diagonal Street
Johannesburg 2001
South Africa
(PO Box 4844, Johannesburg 2000)
Sponsor: Nedbank Capital
Directors:
LC Pouroulis (chairman)*, Dr JD Salter (managing director)**, JA Clark
(finance director), JM Jansen van Vuuren, GY Ditodi+, Dr PM Maduna+, SR
Makhaye+, LS Modise++, LX Mtumtum++
*Cypriot **British +non-executive, ++independent non-executive
Date: 29/08/2006 10:39:11 AM Produced by the JSE SENS Department
