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SAM
SAM
Samroc - Reviewed Provisional Results for the year ended 30 June 2006
SA Mineral Resources Corporation Limited
Registration number 1993/000460/06
Incorporated in the Republic of South Africa
JSE share code: SAM
ISIN: ZAE000012019
("Samroc" or "the company")
REVIEWED PROVISIONAL RESULTS FOR THE YEAR ENDED 30 JUNE 2006
BALANCE SHEET
Group
30 June 30 June
2006 2005
Reviewed Audited
R"000 R"000
ASSETS
NON-CURRENT ASSETS
Plant and equipment 11 377 14 784
11 377 14 784
CURRENT ASSETS
Inventories 319 316
Accounts receivable 1 594 1 958
Cash and cash equivalents 162 1 188
2 075 3 462
TOTAL ASSETS 13 452 18 246
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
Issued share capital 3 743 3 743
Share premium 27 152 27 152
Accumulated loss (28 940) (23
867)
1 955 7 028
NON-CURRENT LIABILITIES
Long term liabilities 9 140 8 888
Provision for environmental 526 486
rehabilitation
9 666 9 374
CURRENT LIABILITIES
Short term portion of long 8 44
term liabilities
Accounts payable 1 690 1 663
Provisions 133 137
1 831 1 844
TOTAL EQUITY AND 13 452 18 246
LIABILITIES
Net asset value per share 0.52 1.88
(cents per share)
Tangible net asset value 0.52 1.88
per share (cents per share)
INCOME STATEMENT
Group
30 June 30 June
2006 2005
Reviewed Audited
R"000 R"000
REVENUE 9 144 14 208
Cost of sales (5 337) (8 205)
GROSS PROFIT 3 807 6 003
Operating costs (5 625) (5 110)
OPERATING PROFIT (LOSS) (1 818) 893
Impairment loss (2 600) -
Interest received - 4
Interest paid (655) (538)
NET PROFIT (LOSS) FOR (5 073) 359
THE YEAR
Profit/(Loss) per share (1.36) 0.1
(cents per share)
Headline profit/(loss)
per share (cents per (1.36) 0.1
share)
Shares in issue at year 374.27 374.27
end (millions)
CASH FLOW STATEMENT
Group
30 June 30 June
2006 2005
Reviewed Audited
R"000 R"000
CASH FLOW FROM
OPERATING ACTIVITIES
Cash generated
by/(utilized in) (653) 1 281
operating activities
Interest received - 4
Interest paid (331) (538)
Net cash flow from (984) 747
operating activities
CASH FLOW FROM
INVESTING ACTIVITIES
Plant and equipment (30) (89)
acquired
Proceeds from disposal
of plant and equipment - 20
Net cash used in (30) (69)
investing activities
CASH FLOW FROM
FINANCING ACTIVITIES
Long term liability (12) 382
raised / (repaid)
Net cash generated by (12) 382
financing activities
Increase/(decrease) in
cash and cash (1 026) 1 060
equivalents
Cash and cash
equivalents at 1 188 128
beginning of year
Cash and equivalents 162 1 188
at end of year
CHANGES IN EQUITY
Group Share Share Accumulate Total
capital premium d loss R"000
R"000 R"000 R"000
Balance - 30 June 2004 3 743 27 152 (24 226) 6 669
Net loss for the year 359 359
Balance 30 June 2005 3 743 27 152 (23 867) 7 028
Net loss for the year (5 073) (5 073)
Balance 30 June 2006 3 743 27 152 (28 940) 1 955
COMMENTARY
Samroc"s major customer, Namzinc, temporarily closed its operations during
the first half of the financial year due to an operational setback, which
severely affected Samroc"s turnover and profit and substantially eradicated
its working capital. Namzinc resumed purchases from Samroc during January
2006. The continued strength of the Rand prevented Samroc from doing
export business during the year, however, this could change in the light of
the recent devaluation of the Rand.
Samroc is dependant on the continued support of its major customer,
Namzinc. It is continuously investigating ways to restructure the business
in order to reduce operational risk and to ensure future sustainability and
value for its shareholders. Such restructuring might include disposing of
the business and/or acquiring other operating assets.
GREENHILLS PLANT
The plant operated below capacity due to the absence of orders during the
first six months of the financial year. Costs were reduced as far as
possible to accommodate the reduction in operating activities, though
certain large cost contributors such as labour remained unavoidable.
MARKETING
There were no significant changes in the local market during the year and
none are anticipated during the coming year. As previously reported, no
significant overseas sales can occur unless the rand devalues to R7.5 : 1
US$. The company will investigate the possibility of resuming overseas
sales in the light of the recent devaluation of the rand.
Sales to Namzinc are expected to be at normal levels during the 2007
financial year.
FINANCIAL
The company was severely impacted by the lack of sales to Namzinc during
the first half of the financial year and working capital was reduced to
critically low levels. It obtained a R500,000 working capital loan from
Namzinc during December 2005 to enable it to continue operations after
sales to Namzinc were resumed. The loan was repaid in full prior to the
financial year-end. The company is slowly recovering from the operational
problems experienced, though working capital levels remain under pressure
due to the repayment of the working capital loan. Samroc remains
critically dependant on the continued uninterrupted support of Namzinc.
Management is continuously investigating ways to restructure the business
to ensure financial sustainability.
GOING CONCERN
As a result of Samroc"s dependency on the uninterrupted sales to its major
client, combined with its low level of working capital, the auditors have
expressed a concern, by way of an emphasis of matter in the review report,
about the sustainability of the business. The directors believe that
provided the company continues to enjoy the support of its major customer
Namzinc the going concern would remain applicable.
ACCOUNTING POLICY
The accounts set out herein are prepared in accordance with International
Financial Reporting Standards and are consistent with Samroc"s accounting
policies applied in the corresponding reporting period. No restatement of
prior period results was necessary.
REVIEW OPINION
The financial information set out in these results has been reviewed by
Samroc"s auditors Moore Stephens MWM Inc who issued a modified review
opinion that:
- The going concern status of Samroc is subject to the continued
uninterrupted support from Samroc"s major customer. This matter
indicates the existence of a material uncertainty which may cast
significant doubt about the group"s ability to continue as a going
concern.
- Certain unauthorized borrowings were made from the company in
contravention of section 226 of the Companies Act. A report in this
regard was sent to the company and the matter was reported to the
Public Accountants and Auditors Board. The amounts were repaid to the
company and steps were introduced to prevent a recurrence of the
incident.
The auditor"s review opinion is available for inspection at the company"s
registered office.
DISPOSAL AND GRANT OF OPTION BY DIRECTORS
It was reported on SENS on 30 June 2006 that GVM Metals Limited, a company
registered in Australia and listed on the Australian Stock Exchange,
disposed of 15 000 000 of its holding of 113 000 000 ordinary shares in
Samroc (30% interest) for 2 cents per share. It also granted an option to
the purchaser to acquire its remaining shares at 2 cent per share. Messrs R
Linnell and S Farrell who are directors of Samroc, are directors of GVM
Metals Limited and as such have an indirect interest in the Samroc shares
disposed of.
DIVIDEND
No dividend has been declared or recommended for this period.
For and on behalf of the Board
RJ Linnell AH Jonker
Chairman Managing Director
Johannesburg
28 September 2006
Directors: RJ Linnell (Chairman), AH Jonker (Managing), BH Christie*, SJ
Farrell** (*British, **Australian)
Registered office: Nimag House, Pinewood Office Park, Riley Road, Woodmead
Registered postal address: PO Box 7798, Centurion 0046
Transfer secretaries: Ultra Registrars (Pty) Ltd, PO Box 4844, Johannesburg
2000
Company Secretary: EM Taylor
Date: 28/09/2006 04:47:10 PM Produced by the JSE SENS Department
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