| Mon 26 Mar 2007, 10:52 | | MMH - Miranda - Unaudited Interim Financial Result |
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MMH
MMH
MMH - Miranda - Unaudited Interim Financial Results for the six months ended 28
February 2007
MIRANDA MINERAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/001940/06)
Share code: MMH & ISIN: ZAE000074019
("MMH" or "the company" or "the group)
UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2007
Highlights
- Successful completion of maiden capital raising of R15.4 million through the
private placing of 24.4 million shares
- Third JV signed on NW diamond projects
- Completion of 100% acquisition of Molebogeng Mining and Investment Holdings.
BALANCE SHEETS
(Figures in R`000) Unaudited Reviewed Audited
28 Feb 28 Feb 31 Aug
2007 2006 2006
ASSETS
Non-current assets 316,447 307,875 308,347
Property, plant and 228 248 228
equipment
Goodwill 8 100 - -
Intangible assets 307 842 307,627 307,842
Loans receivable 277 - 277
Current assets 15,191 599 484
Loans receivable - 114 -
Receivables and deposits 623 318 459
Cash and cash equivalents 14,568 167 25
Total Assets 331,638 308,474 308,831
EQUITY AND LIABILITIES
Capital and reserves 328,172 307,504 306,039
Issued capital 1,871 1,537 1,537
Share premium 53,090 29,952 29,952
Accumulated loss (11,311) (8,308) (9,972)
Revaluation reserve 284,522 284,323 284,522
Non-current liabilities 1,367 - 873
Loans payable 1,367 - 873
Current liabilities 2,099 971 1,919
Accounts payable 2,099 971 1,919
Bank overdraft - - -
Total Equity and 331,638 308,475 308,831
Liabilities
Shares in issue - closing 187,131 153,731 153,731
(`000)
Net asset value per share 175.4 200.0 199.1
(cents)
Net tangible asset value 6.5 (0.1) (1.2)
per share (cents)
INCOME STATEMENTS
(Figures in R`000) Unaudited Reviewed Audited
Six months Six months Year ended
ended ended 31 Aug
28 Feb 28 Feb 2006
2007 2006
Revenue - - 1
Operating expenses (1,339) (1,675) (3,339)
Profit/(Loss) before (1,339) (1,675) (3,338)
interest and taxation
Net finance cost - - (1)
Net loss after taxation (1,339) (1,675) (3,339)
Shares in issue - weighted 163,669 153,731 153,731
average (`000)
Earnings/ loss (cents per (0.8) (1.1) (2.2)
share)
Headline earnings/ (loss) (0.8) (1.1) (2.2)
(cents per share)
STATEMENTS OF CHANGES IN EQUITY
(Figures in R`000) Share Share Accumu- Total
Capital Premium lated
and Profit/
Reserves (Loss)
Balance at 1 Sep 2005 307 5 866 (6 633) (460)
Issue of share capital 1 230 24 086 25 316
Revaluation of 284 522 284 522
intangible assets
Net loss for the (3 339) (3 339)
period
Balance at 1 Sep 2006 1,537 314,474 (9,972) 306,039
Issue of share capital 334 - - 334
Premium on issue of - 23,138 - 23,138
share capital
Net loss for the - - (1,339) (1,339)
period
Balance at 28 Feb 2007 1,871 337,612 (11,311) 328,172
CASH FLOW STATEMENTS
(Figures in R`000) Unaudited Reviewed Audited
Six months Six months Year ended
ended ended 31 Aug
28 Feb 28 Feb 2006
2007 2006
Cash flows from operating (1,323) (1,924) (2,775)
activities
Cash utilised in operating (1,323) (1,924) (2,774)
activities
Interest paid - - (1)
Cash flows from investing (8,100) (22,380) (22,544)
activities
Property, plant and - - (3)
equipment acquired
Decrease in loans - 236 75
receivable
Subsidiary acquired (8,100) (22,616) (22,616)
Cash flows from financing 23,966 24,472 25,345
activities
Capital raised 23,472 25,316 25,316
Loans raised 494 - 29
Loans repaid - (844) -
Movement in cash and cash 14,543 168 26
equivalents
Cash and cash equivalents 25 (1) (1)
at beginning of period
Cash and cash equivalents 14,568 167 25
at end of period
COMMENTARY
1. OPERATIONAL REVIEW
The six months under review have seen significant progress made by Miranda in
establishing itself as a new generation exploration group, in communicating
its business model to the market, in adding to its mineral assets
portfolio, as well as in prioritising and planning the group`s exploration
objectives for the next 12 months.
The process of finalising permits, and preparing and submitting the
Environmental Management Plans to the Department of Minerals and Energy
("DME") continued unabated during the period. The acquisition of
Molebogeng enabled Miranda to add selected strategic minerals to its
current vast mineral portfolio. Much time and effort has been spent
assessing the value-creating opportunities that arose as a result of
combining certain of the Molebogeng mineral assets with Miranda`s existing
assets, thereby producing larger, more feasible, individual projects with
greater critical mass. Through this process nine potentially economically
viable "projects" have thus far been identified and prioritised. These
projects will form the primary focus of Miranda`s activities over the next
12 months. The projects have been selected on the basis of demand in the
market-place, the extent of the existing geological information on hand,
the additional exploration work required and the expected time frame in
which these projects can be brought to account.
* The board is of the opinion that this program will move the identified
projects rapidly up the value curve to the point where decisions on further
development and/ or value extraction and/ or joint venture partnerships
could be concluded, in line with Miranda`s business model. These projects,
shown per operating division, are:
Base and Industrial Minerals Division:
* Rozynenbosch base metal project: One of the larger current projects with its
14 million tons ("mt") indicated resource, the objective over the next few
months will be to conduct a scoping study that will include further
drilling and metallurgical testing to confirm the metallurgical recoveries.
Management are currently in discussion with a number of potential joint
venture partners both locally and abroad.
* West Rand clay project: The group is working closely with one of its strategic
shareholders to unlock value from the group`s large clay deposits on the
West Rand. The objective will be to fast-track the development of these
clay deposits given the strong medium-term prospects for the regional gross
domestic fixed investment (GDFI) cycle and seen against the background of
the large and rising shortage of bricks. One of the clay deposits at
Turffontein outside Potchefstroom has already been identified as an
indicated resource with 18mt of recoverable brick-making clay.
Diamond Division:
* Mochudi kimberlite project (Botswana): The area has been extensively explored
at different times over the last 30 years. Two kimberlites have been
identified in the area. Based on an evaluation of the existing exploration
data, application has been made to the Botswana DME for additional
prospecting permits covering the area to the south of the existing
prospecting area. Preliminary geophysical work and drilling will commence
in the second quarter of this year.
* NorthWest alluvial project: Consisting of four farms covering an area of 9,838
hectares, three joint venture agreements have been signed and initial
exploration commenced in 2006 on two of the farms. Initial results to date
have proved very promising. Miranda will work in conjunction with these
contractors throughout the exploration program.
* Makganyene kimberlite project: The project was acquired through the Molebogeng
transaction. Historical exploration data shows the presence of three
kimberlites, two of which show positive indications of being
diamondifferous. A detailed geophysical survey and drilling program is
scheduled to begin in the second half of 2007.
* Lauraville alluvial project: Situated north-east of Kimberley on the 647 ha
farm Von Zoelenslaagte in the Barkley West district, Lauraville borders the
Vaal river in an area well-known for significant alluvial diamond
operations. Limited exploration will be conducted to confirm the grades
and quality of the diamonds. A joint venture agreement with Interstate
Mining and Exploration (Pty) Limited ("Interstate") was recently announced,
in terms of which Interstate will pay an upfront, non-refundable "option"
fee of R1 million for the rights to conduct further exploration and,
ultimately, to mine the property. Interstate has extensive experience in
the field of alluvial diamond mining in the Kimberley, and will pay
Lauraville an additional, ongoing 12.5% joint venture revenue share fee on
the gross sales value of all diamonds recovered and sold.
Precious Metals Division:
* Limpopo gold project: The exploration program will entail limited drilling and
bulk sampling. A comprehensive exploration plan is currently being
formulated and will be announced during the current financial year.
* Syferbult-Boons gold project: The project was acquired through the Molebogeng
transaction. Investigations have shown grades of between 6g/t and 8g/t,
and a detailed drilling program is current being planned for the third
quarter of 2007.
Coal Division:
* Sesikhona Kliprand Colliery: Another Molebogeng-related acquisition, analysis
of 49 drill logs showed a potential resource of 20mt of high quality
anthracite and coal on four adjacent farms. Approximately 11mt of the
deposit is open-castable, occurring close to the surface (2-5m). Miranda
will complete an additional drilling program during the second quarter of
the year, the objective being to upgrade the deposit to that of at least
indicated resource status.
2. FINANCIAL REVIEW
Private Placing
In line with its strategy of "just in time" capital raising, the company
successfully completed its first capital raising exercise, which was over-
subscribed by 2.5 times. An amount of R15.4 million was raised through the
issue of 24.4 million shares at a price of 63 cents per share ("cps"). The
shares were issued under the board`s general authority. The proceeds of
the private placing will enable the company to complete the exploration
objectives on the prioritised projects referred to above. The funds have
been allocated to these projects on the basis of each project`s planned
exploration program for the next twelve months.
Acquisition of Molebogeng
During the period, the company completed the acquisition of 100% of Molebogeng
Mining and Investment Holdings (Pty) Ltd ("Molebogeng"). Payment was
effected by the issue of 9 million new Miranda shares at a price of 90 cps.
The board considers the acquisition to be of strategic importance in view
of Molebogeng`s holdings of coal, diamond and gold exploration assets.
Certain of the coal and diamond assets acquired are at a fairly advanced
stage of exploration and the board is of the opinion that the value in
these projects could be unlocked in the short-term.
Financial Results
During the six months to 28 February 2007, operating expenses, and therefore the
loss for the period, were well contained and amounted to R1,339 million
(2006: R1,675 million). Prior to the private placing, all of the operating
activities of the company were funded by certain of the major shareholders.
A number of the prioritised projects will require that the exploration/ mining
partner make an upfront payment to Miranda based on an agreed percentage of
the project value. The quantum of the upfront payment is determined,
firstly, by the project`s economic viability, as well as by the value and
extent of the exploration data supplied by Miranda. As the business model
matures, the joint venture partnerships already entered into will become
operational and start to generate income. In certain cases, Miranda`s
share of the revenue generated, for instance by alluvial diamond
exploration activities, is expected to commence during the current
financial year, which will contribute towards funding further exploration.
Valuation of Rozynenbosch base metal project
In terms of International Financial Reporting Standards ("IFRS") the board is
required to test on a regular basis for any impairment or material change
in the value of the company`s assets. At the end of the current financial
reporting date, the two main variables affecting the value of the
Rozynenbosch asset, namely the exchange rate and commodity prices, have
both adjusted favourably. Incorporating these changes in the valuation
model has the effect of increasing the value of the project in Rand terms
to R388 million (2006: R284 million). However, the board is of the opinion
that recent market developments have not been sufficiently significant to
amend the long-term sustainable commodity prices and exchange rate that it
anticipates over the life of the project. As a consequence, the board has
decided not to adjust the previously reported value of R284 million for the
Rozynenbosch project at the reporting date.
3. STATEMENT OF GOING CONCERN
The funds raised by the private placement will be used to complete the
exploration program detailed above and to provide for the company`s
operational cash flow requirements for the next twelve months. The company
will continue with its strategy of "just in time" capital raising as and
when required. Additional cash flow requirements are expected to be funded
internally from future revenue generated from joint venture projects.
4. PROSPECTS
The board is satisfied with the financial results for the period under review
and excited about the outlook for the group. The success of the private
placing has positioned the group in a strong position to fast-track certain
projects, which should yield positive results in the next 12 to 18 months.
5. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The abridged interim financial statements have been prepared in accordance with
IFRS. The financial statements have been prepared under the historical
cost convention and the accounting policies are consistent with those of
the previous year except as modified by International Financial Reporting
Standards for the period ending 28 February 2007. The application of IFRS
to the financial statements required no adjustment to the historical
financial results as previously reported. The value of the Rozynenbosch
mineral resource is stated at fair value and is in accordance with IFRS 6
and its interpretation adopted by the International Accounting Standards
Board.
6. DIVIDENDS
No dividends were recommended or declared for the interim period.
For and on behalf of the Board
TV Mokgatlha RJ Nel
Chairman Chief Executive Officer
26 March 2007
Centurion
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Ltd
Registered Address
Mirkwood Estate
Klipkop JR 396, Gauteng
Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)
Corporate Adviser
Touchstone Capital (Pty) Limited
Date: 26/03/2007 10:52:51 Produced by the JSE SENS Department.
