The Nimag Group's reviewed profit before interest and tax for the first six months of the 2007 financial year is AUD3.5 million. The Nickel Magnesium business continued to outperform its budget, whilst the smaller FeSiMag and Fibres businesses reported a combined loss of AUD265 000 for the first six months of the financial year. GVM reported an net profit of AUD912 368 (loss of AUD141 447).
Contingent liabilities
The consolidated entity has potential contingent liabilities if the conditions precedent to purchase the remaining 51% in the Holfontein Coal Project and 50% of the Baobab Coal Project, are fulfilled. The purchase of the remaining portion of the Holfontein project will require the issue of 14 868 283 GVM shares, while the completion of the Baobab acquisition will entail the issue of 20 000 000 GVM shares.
Outlook
Management expect the FeSiMag and Fibres businesses to return to profitability in the second half of the financial year. Continued exchange rate levels and high nickel prices signify a positive outlook for the second half of the financial year. The Holfontein in-fill drilling programme will be completed by the end of the third quarter of the current financial year. Drilling results already analysed have identified metallurgical and thermal coal deposits typical to the region. Geo-hydrological studies commenced in late 2006 and will be completed prior to the bankable feasibility study which is anticipated hopefully no later than the end of March 2007.
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