| Fri 1 Dec 2006, 9:12 | | Miranda - Abridged audited consolidated financial |
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Miranda - Abridged audited consolidated financial results for the year
ended 31 August 2006
Miranda Minerals Holdings Limited
(Previously Proper Group Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1998/001940/06)
Share code MMH ISIN ZAE000074019
("Miranda" or "the Company" or "the Group")
Abridged audited consolidated financial results for the year ended 31
August 2006
Highlights
- Listed on Main Board of JSE on 19 December 2005
- First prospecting rights granted on the diamond and gold properties
- SAMREC compliant CPR completed on Rozynenbosch base metal and silver
resource
- First diamonds discovered on Turffontein
- Acquisition of first exploration property outside South Africa
- Group"s net asset value rises to 199.7 cents per share
INCOME STATEMENTS
(Figures in Audited Audited
R"000) Year ended Year ended
31 August 2006 31 August
2005
Revenue - -
Cost of Sales - -
Gross Profit - -
Other Income 2 -
Operating (3 340) (498)
Expenses
Loss before (3 338) (498)
interest and
taxation
Net Finance (1)
Cost
Loss for the (3 339) (498)
year
Attributable
to:
Equity holders (3 339) (498)
of the parent
Minority - -
interest
(3 339) (498)
Loss for the year (cents (0.02) (1.62)
per share)
Headline loss (0.02) (1.62)
Shares in issue - 153 730 30 746
weighted average ("000)
STATEMENTS OF CHANGES IN EQUITY
(Figures in Share Share Accumulated Revaluation Total
R"000) Capital premium loss reserve
Balance at 01 307 5 866 (6 135) - 38
September 04
Net loss for - - (498) - (498)
the year
Balance at 01 307 5 866 (498) - (460)
September 06
Net loss for - - (3 339) - (3 339)
the year
Issue of 1 230 24 086 - - 25 316
share capital
Revaluation - - - 284 522 284 522
of intangible
assets
Balance at 31 1 537 29 952 9 972 284 522 306 039
August 2006
BALANCE SHEETS
(Figures in R"000) Audited Audited
at At
31 August 31
2006 August
2005
ASSETS
Non-current assets 308 347 383
Property, plant and equipment 228 33
Intangible assets 307 842 -
Loans receivable 277 350
Current assets 484 2
Other current assets 459 2
Cash and cash equivalents 25 -
Total Assets 308 831 385
EQUITY AND LIABILITIES
Capital and Reserves 306 039 (460)
Share capital 31 489 6 173
Revaluation reserve 284 522 -
Accumulated loss (9 972) (6 633)
Non-current liabilities 873 844
Loans payable 873 844
Current liabilities 1 919 1
Trade and other payables 1 919 -
Bank overdraft - 1
Total Equity and liabilities 308 831 385
Net asset value per share (cents 199.70 (1.50)
per share)
Net tangible asset value per (0.01) (1.50)
share (cents per share)
Shares in issue - closing 153 730 30 746
(`000)
CASH FLOW STATEMENTS
Audited Audited
Year Year
ended ended
31 31 Aug
August 2005
2006
(Figures in R"000)
Cash flows from operating
activities (2 254) (498)
Cash utilised in operating (2 253) (498)
activities
Interest paid (1) -
Cash flows from investing (22 619) (5)
activities
Property, plant and equipment (3) (33)
acquired
Decrease in loans receivable - 28
Intangible assets acquired (22 616) -
Cash flows from financing 24 899 503
activities
Capital raised 25 316 -
Loans raised 29 -
Loans repaid (446) 503
Increase in cash and cash 26 0
equivalents
Cash and cash equivalents at (1) (1)
beginning of the year
Cash and cash equivalents at 25 (1)
end of year
OPERATIONAL REVIEW
The year under review was a noteworthy one for the group and its
shareholders and was characterised by change, challenge and achievement.
The biggest event for the year under review was the successful reverse
listing of Miranda"s portfolio of assets on the JSE on 19 December 2005,
utilising the shell of Proper Group Holdings Limited. The reverse listing
transaction included:
- the change of the company"s name to Miranda Mineral Holdings Limited;
- the acquisition of Miranda Minerals (Pty)Ltd for R22.6 million, settled
by the issue of 78 million shares in Miranda at a price of 29 cents per
share;
- the issue of 45 million shares to its Black Economic Empowerment (BEE)
partner, Realeboga (Pty)Limited; and
- the transfer of the company"s listing to the "Other Mineral Extractors
and Mines" sector on the Main Board of the JSE.
Operationally ,Competent Persons" reports( CPRs) and internal pre
feasibility exercises have been carried out on two projects, namely the
Rozynenbosch base metal project and the Turffontein clay deposit which
forms part of the group"s West Rand clay projects. The Board expects to
bring at least another three projects to account in this way during the
2007 financial year.
Miranda acquired a 40% stake in Firefox Investments which holds a
prospecting right to some 38,100 hectares in the highly prospective Mochudi
district in Botswana. In 1966 De Beers identified two kimberlites on the
property and Miranda is currently negotiating with Debswana to acquire
these geological results.
The acquisition of Molebogeng brings with it a number of exciting
opportunities for Miranda to consolidate its diamond holdings and expand
its coal and gold holdings. The acquisition has had the effect of
strengthening the group"s already sound empowerment credentials.
FINANCIAL REVIEW
Much of the year has been spent laying the foundation for growth by
identifying and prioritising the vast data base of geological information
acquired from Gold Fields of South Africa Limited (Goldfields) by Miranda
Minerals. Potentially viable projects have been identified on 74 of the
original farms in the portfolio and 54 applications to convert these old
order rights to new order rights have been submitted to the Department of
Minerals and Energy (DME). The conversion process represents one of the
major challenges for the company and the industry as a whole. The
conversion process has been considerably more prolonged than originally
anticipated and shareholders are refered to the annual report for more
detail in this regard.
The Board has spent R3,3 million thus far establishing both the operational
capacity of the company and evaluating the geological data. As a result the
board has indentified and prioritised a number of projects on which to
focus in the next financial year. These projects have been prioritised in
terms of the depth of available geological information and the potential to
become cash generative in the short term.
NOTES TO THE ANNUAL RESULTS
1. DIRECTORS MEASUREMENT OF ROZYNEBOSCH VALUATION
At the beginning of the current financial year, the board commissioned a
Competent Persons" Report (CPR) on the Rozynenbosch deposit, using in part
an extensive data base of geological information produced by Goldfields and
Phelps Dodge dating back to the mid 1970"s. The report proved an indicated
resource with an estimated in-situ value of R3.6 billion. Furthermore, an
internal project pre-feasibility study was completed to establish the
economic viability of the project, and therefore the future cash flows on
which Miranda would earn royalty income.
In terms of International Financial Reporting Standards, the Board placed a
value of R284m on the fee income that would be earned from Miranda"s
anticipated share of the projects revenues.
This value has been arrived at by discounting the future cash flows
attributable to Miranda based on a royalty income of 15.00% appropriately
adjusted for risk at a discount factor of 15.25%.
The board is further pleased to announce that the initial queries raised by
the JSE regarding the valuation were ultimately accepted by both the JSE
and the South African Mineral Resources Committee (SAMREC) Readers panel
without any adjustments. The cautionary notice pertaining to these queries
was lifted on 16 October 2006.
2. REPORTING ACCOUNTANTS" REPORT ON THE VALUATION OF A RESOURCE ESTIMATE
FROM COST TO FAIR VALUE.
The report has been prepared by the company"s auditors and is available for
inspection at the company"s offices.
3. STATEMENT ON GOING CONCERN
Miranda"s primary activity is that of exploration and exploration companies
by their very nature are not cash generative in the short term. The
business of Miranda is to establish the commercial viability of mineral
resources within its portfolio of mineral assets by entering into joint
venture projects with contractors who assume partial financial
responsibility for the exploration costs in return for the option to
participate when the project moves to the final mining phase. This model
reduces the risk and the internal capital requirement of the company and so
the success of the funding model is based on both internal sources of
capital (cash flow generated from joint venture projects) and external
sources capital (capital raised in the market when required and when the
timing is appropriate).The Board is managing its cash flow requirements
very carefully and has obtained a commitment to extend interest free loans
from its main shareholders if required. The reason for this approach is for
the company to establish the value of its major assets and determine the
possibility of cash generation from its diamond projects. This information
would enable the directors to place an accurate value on the company who
may then decide to issue further shares or look at other funding
alternatives that may be available to the Board at that time.
4. PROSPECTS
The company is satisfied with the results and expenditure to date and is
confident it will continue to attract joint venture partners capable of
further developing its mineral prospects, in particular the Rozynenbosch
base metal and silver resource and the alluvial diamond projects on the
farms Turffontein and Blaauwbank.
Strategically, the entries into Botswana, through the investment in Firefox
Invstments (the Mochudi diamond project), and the Mozambique tantilite
project, through the acquisition of Molebogeng, mark the first steps in
positioning Miranda as a regional Southern African player.
The process of realising shareholder value in any exploration company is
almost always a long term exercise. Miranda"s diversified portfolio of
exploration assets, the fact that significant geological work has been done
on many of its properties and clearly defined business and revenue model,
is what sets it apart from most other exploration juniors.
During the 2006 financial year, the Board set in motion processes to start
unlocking value for shareholders, both from the portfolio of exploration
assets initially acquired and listed, as well as by utilising the groups
public company status to assess a number of other projects in South and
Southern Africa. The group remains focused on the task of unlocking the
inherent value of its mineral assets through sustainable joint ventures
with its preferred mining partners.
5. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The group is reporting under International Financial Reporting Standards
(IFRS) for the first time for the year ended 31 August 2006. The annual
financial statements are prepared on the historical cost basis, except for
the following assets and liabilities which are stated at fair value:
certain financial instruments and intangible assets. The accounting
policies have been consistently applied to the periods presented in these
consolidated abridged financial statements. The application of IFRS to the
financial statements required no adjustment to the historical financial
results as previously reported given that the company was effectively a
"shell" company at the comparative reporting dates.
The value of the Rozynenbosch mineral resource is stated at fair value
(note1) and is in accordance with International Financial Reporting
Standards (IFRS 6) and its interpretation adopted by the International
Accounting Standards Board.
6. DIVIDENDS
No dividends were recommended or declared for the year.
7. AUDIT REPORT
The annual results have been audited by the company"s auditors Compendium
(Pretoria) Inc whose unqualified audit report is available for inspection
at the groups" registered address.
For and on behalf of the Board
TV Mokgatlha
Chairman
RJ Nel
Chief Executive Officer
1 December 2006
Pretoria
Transfer Secretaries
Computershare
Investor Services 2004 (Pty) Limited
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Corporate Advisor
Radagast Capital
Date: 01/12/2006 09:12:57 AM Produced by the JSE SENS Department
