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Audited Summarised Annual Financial Results for the year ended 28 February 2023
Mantengu Mining Limited
Incorporated in the Republic of South Africa
(Registration number 1987/004821/06)
Share Code: MTU
ISIN Code: ZAE000320347
(“Mantengu” or “the Company” or “the Group”)
AUDITED SUMMARISED ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED
28 FEBRUARY 2023
The Board of Directors of Mantengu (”the Board”) is pleased to
announce the audited summarised annual financial results for the year
ended 28 February 2023 (“Results”).
On 27 July 2022, Mantengu acquired 100% of the issued share capital
of Langpan Mining Co Proprietary Limited (“Langpan”)(“Acquisition of
Langpan”), obtaining control. Langpan mines and processes chrome ore
to produce chrome concentrate, with Platinum Group Metals (“PGMs”)
as a by-product. Mantengu will therefore be reporting Company and
Group results going forward, as opposed to having only reported
Company results for the prior year ended 28 February 2022.
The acquisition of Langpan constitutes a reverse takeover in
accordance with IFRS 3, paragraph B19. A reverse acquisition occurs
when the entity that issues securities (the legal acquirer) is
identified as the acquiree for accounting purposes. The entity whose
equity interests are acquired (the legal acquiree) must be the
acquirer for accounting purposes for the transaction. This means that
although Mantengu acquired Langpan, the transaction had to be
accounted for as Langpan acquiring Mantengu. Langpan therefore needed
to fair value the assets and liabilities of Mantengu at acquisition
date.
As the Langpan transaction was accounted for as a reverse takeover
in accordance with IFRS3, paragraph B19, Mantengu have presented the
Group’s 2022 financial results for the prior year ended 28 February
2022 under the reverse takeover principles dictated by IFRS3 Paragraph
B21 and B22, even though Mantengu did not report any Group results
for this prior period. This announcement therefore contains the
audited Group and Company results for the 12 months ended 28 February
2023, with comparatives.
SUMMARISED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited Audited Audited
Group Group Company Company
12-months 12-months 12-months 12-months
to February to February to February to February
2023 2022 2023 2022
R’000 R’000 R’000 R’000
Revenue 4 492 - - -
Cost of Sales (5 503) (5 686) - -
Gross Loss (1 011) (5 686) - -
Other Income 5 617 22 968 6 094 758
Administrative
expenses (9 395) (5 034) (4 298) -
Depreciation (243) (84) (5) -
Directors’
Remuneration (3 478) (1 560) (4 653) (2 954)
Employee
benefits (240) - (378) -
Other operating
expenses (7 041) (2 057) (685) (2 637)
Operating Loss (15 791) 8 547 (3 925) (4 833)
Finance Costs (6 311) (383) (1 836) (3 004)
Loss before
Taxation (22 102) 8 164 (5 761) (7 837)
Taxation 5 196 (514) - -
Loss for the
Year (16 906) 7 650 (5 761) (7 837)
Other
Comprehensive - - - -
Income
Total
Comprehensive (16 906) 7 650 (5 761) (7 837)
Loss for the
Year
Basic and
diluted basic (12) 6* (7) (908)*
loss per share
Headline and
diluted headline (12) 6* (7) (908)*
loss per share
*Adjusted for the consolidation of the authorised and issued ordinary
share capital of Mantengu on a 1 000 to 1 basis (“Share
Consolidation”) as detailed in the announcements released on SENS on
10 March 2023 and 31 March 2023.
SUMMARISED STATEMENT OF FINANCIAL POSITION
Audited Audited Audited Audited
Group Group Company Company
as at 28 as at 28 as at 28 as at 28
February February February February
2023 2022 2023 2022
R’000 R’000 R’000 R’000
Assets
Non-Current Assets
Property, plant, and
equipment 167 084 112 497 209 -
Right-of-use assets 8 083 - - -
Goodwill 39 195 - - -
Investment in
subsidiary - - 550 000 -
Deferred taxation 5 196 - - -
Environmental
rehabilitation funds 854 976 - -
220 412 113 473 550 209 -
Current Assets
Related party loan - 1 471 - -
Trade and other
receivables 9 258 2 682 - 57
Prepayments 4 899 - - -
Cash and cash
equivalents 17 976 192 1 136 12
32 133 4 345 1 136 69
Total Assets 252 545 117 818 551 345 69
Equity and
Liabilities
Equity
Share capital 99 189 50 320 650 020 85 020
Accumulated loss (20 473) (3 567) (120 984) (115 223)
78 716 46 753 529 036 (30 203)
Liabilities
Non-Current
Liabilities
Other financial
liabilities 77 368 - - -
Lease liability 8 053 - - -
85 421 - - -
Current Liabilities
Loan from group
company - - 3 173 1 471
Other financial
liabilities 69 254 60 693 12 464 21 408
Trade and other
payables 17 600 9 004 6 672 7 393
Lease liability 41 - - -
Current taxation 1 513 1 368 - -
88 408 71 065 22 309 30 272
Total Liabilities 173 829 71 065 22 309 30 272
Total Equity and
Liabilities 252 545 117 818 551 345 69
SUMMARISED STATEMENT OF CHANGES IN EQUITY
Group Share Accumulated Total
capital loss equity
R’000 R’000 R’000
Balance at 1 March 2021 48 391 (11 218) 37 173
Profit for the year - 7 650 7 650
Total comprehensive income - 7 650 7 650
Issue of shares 1 929 - 1 929
Balance at 1 March 2022 50 320 (3 567) 46 753
Loss for the year - (16 906) (16 906)
Total comprehensive loss for the year - (16 906) (16 906)
Issue of Shares 28 688 - 28 688
Acquisition of Langpan 5 181 - 5 181
Rights Offer 15 000 - 15 000
Balance at 28 February 2023 99 189 (20 473) 78 716
Company
Share Accumulated Total
capital loss equity
R’000 R’000 R’000
Balance at 1 March 2021 85 020 (107 386) (22 366)
Loss for the year - (7 837) (7 837)
Total comprehensive loss for the year - (7 837) (7 837)
Balance at 1 March 2022 85 020 (115 223) (30 203)
Loss for the year - (5 761) (5 761)
Total comprehensive loss for the year - (5 761) (5 761)
Acquisition of Langpan 550 000 - 550 000
Rights Offer 15 000 - 15 000
Balance at 28 February 2023 650 020 (120 984) 529 036
SUMMARISED STATEMENT OF CASH FLOWS
Group Group Company Company
Audited Audited Audited Audited
12- 12-months 12- 12-
months to 28 months months
to 28 February to 28 to 28
February 2022 February February
2023 2023 2022
R’000 R’000 R’000 R’000
Cash flows from operating
activities (29 820) 10 240 (6 420) (2 588)
Cash flows from investing
activities (21 869) (23) (214) 1 125
Cash flows from financing
activities 69 472 (10 029) 7 758 1 471
Total cash movement for
the year 17 783 188 1 124 8
Cash and cash equivalents
at the beginning of the
period
192 4 12 4
Cash and cash equivalents
acquired on reverse
acquisition 1 - - -
Cash and cash equivalents
at end of the period 17 976 192 1 136 12
COMMENTARY
1. BASIS OF PREPARATION
These summarised audited annual financial results have been prepared
in accordance with IAS 34 – Interim Financial Reporting, the framework
concepts and the recognition requirements of International Financial
Reporting Standards (“IFRS”), the South African Institute of
Chartered Accountants (“SAICA”) Financial Reporting Guides, as issued
by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by the Financial Reporting Standards
Council, International Financial Reporting Interpretations Committee
(“IFRIC”) and the requirements of the South African Companies Act,
2008 (Act 71 of 2008), as amended, and the Listings Requirements of
the JSE Limited (“JSE”).
The Results have been prepared using accounting policies that comply
with IFRS and which are consistent with those applied in the
preparation of the audited financial statements for the year ended
28 February 2022.
These Results have been prepared by the Chief Financial Officer, Mr
M Naidoo.
Shareholders are advised that the information contained in the audited
summarised financial results announcement is also available at:
https://senspdf.jse.co.za/documents/2023/jse/isse/mtue/ye23.pdf
2. FINANCIAL RESULTS AND FUTURE PROSPECTS
Mantengu is a resource investment company which is focused on
unlocking new value in the mining, mining services and energy sectors.
Mantengu intends to be a “Next Generation” conglomerate because its
funding, empowerment and business models transcend the typical
extractive models by creating and introducing new growth into
financially unchartered parts of South Africa. On 27 July 2022, the
Acquisition of Langpan became effective and Mantengu obtained control
of Langpan.
During the year, the Group incurred significant regulatory, legal and
compliance costs with respect to its listing reinstatement and in
completing the Acquisition of Langpan. Having recently commissioned
the Langpan Chrome Processing Plant, the Group is well positioned to
drive growth and deliver a return to shareholders through its Chrome
beneficiation operations.
Mantengu is currently canvassing the market to identify suitable
investment opportunities to support its strategy of investing in
mining, mining services and energy investments.
The Board has satisfied themselves that the Group and Company has
access to adequate funding and facilities to meet its foreseeable
cash requirements and is able to continue as a going concern.
3. EARNINGS AND HEADLINE EARNINGS PER SHARE
Audited Audited Audited Audited
Group Group Company Company
12-months 12-months 12-months 12-months
to February to February to February to February
2023 2022 2023 2022
R’000 R’000 R’000 R’000
Net loss
attributable to
Ordinary
shareholders
(R’000) (16 906) 7 650 (5 761) (7 837)
Number of shares (‘000)
Number of shares in
issue at beginning
of period 55 753 425 137 500 000 863 053 863 053
Acquisition of
Langpan (2) 82 259 678 - 81 746 575 -
Cancelled shares (197) - (197) -
Rights Offer (3) 3 452 055 - 3 452 055 -
Weighted average number of
shares in issue (1) 141 259 137 500 85 856 863
Basic & diluted loss per
share (cents) (4) (12) 6 (7) (908)
Headline & diluted
headline loss per
share (cents)(4&5) (12) 6 (7) (908)
(1) On 31 March 2023, Mantengu consolidated its authorised and issued
share capital on a 1 000 to 1 basis. As the Share Consolidation
occurred prior to the date of approval of the annual financial
statements of Mantengu for the year ended 28 February 2023, the
weighted average number of shares has been adjusted
retrospectively in accordance with International Accounting
Standard 33 - Earnings per Share.
(2) As the Acquisition of Langpan occurred on 27 July 2022, the number
of shares issued as consideration, being 137 500 000 000 shares,
has been adjusted for being outstanding for 217 of 365 days.
(3) As the Rights Offer occurred on 7 December 2022, the number of
shares issued in respect thereof, being 15 000 000 302 shares,
has been adjusted for being outstanding for 84 of 365 days.
(4) There are no dilutive potential ordinary shares.
(5) There are no adjustments that arise out of the SAICA Headline
Earnings Circular 1/2021 to Headline Earnings.
4. BUSINESS COMBINATIONS
On 27 July 2022, the Acquisition of Langpan became effective and
Mantengu obtained control of Langpan. Langpan mines and processes
chrome ore to produce chrome concentrate, with PGMs as a by-product.
The acquisition of Langpan constitutes a reverse takeover in
accordance with IFRS 3, paragraph B19. A reverse acquisition occurs
when the entity that issues securities (the legal acquirer) is
identified as the acquiree for accounting purposes. The entity whose
equity interests are acquired (the legal acquiree) must be the
acquirer for accounting purposes for the transaction. This means that
although Mantengu acquired Langpan, the transaction had to be
accounted for as Langpan acquiring Mantengu. Langpan therefore needed
to fair value the assets and liabilities of Mantengu at acquisition
date.
The fair value of assets and liabilities acquired are presented below:
(R’000)
Trade and other receivables 615
Cash and cash equivalents 1
Other financial liabilities (24 410)
Trade and other payables (10 220)
Total identifiable assets acquired and liabilities assumed (34 014)
Goodwill 39 195
Total consideration 5 181
Cash -
Deemed Equity instruments 5 181
Deemed consideration transferred 5 181
IFRS 3, paragraph B20 requires that the acquisition date fair value
of the consideration transferred by the accounting acquirer (Langpan)
for its interest in the accounting acquiree (Mantengu) is based on
the number of equity interests the legal subsidiary (Langpan) would
have had to issue to give the owners of the legal parent (Mantengu)
the same percentage equity interest in the combined entity that
results from the reverse acquisition. This application results in the
following calculation of the deemed consideration:
CPR valuation of Langpan 851 000
Mineral reserve already on books of Langpan
at 31 July 2022 94 865
Langpan equity at 31 July 2022 74 440
Deemed value of Langpan equity at 31 July 2022 830 575
No. of Mantengu shares issues to Langpan
shareholders as consideration (99.38%) 137 500 000 000
Number of shares held by Mantengu shareholders
prior to Lngpan acquisition (0.62%) 863 053 100
138 363 053 100
Deemed cost of Mantengu investment in
Langpan (R830 574 668 multiplied by 0.62%) 5 180 791
The preparation and presentation of consolidated financial statements
under reverse takeover principles are dictated by IFRS 3 paragraph
B21 and B22. Application of these paragraphs mean that these
consolidated financial statements prepared need to be issued under
the name of the legal parent (accounting acquiree) (Mantengu) but are
actually a continuation of the financial statements of the legal
subsidiary (accounting acquirer) (Langpan), with one adjustment,
which is to adjust retroactively the accounting acquirer’s (Lanpan's)
legal capital to reflect the legal capital of the accounting acquiree
(Mantengu). That adjustment is required to reflect the capital of the
legal parent (the accounting acquiree) (Mantengu). It also means that
comparative information presented in these consolidated financial
statements is retroactively adjusted to reflect the legal capital of
the legal parent (accounting acquiree) (Mantengu).
Because the consolidated financial statements represent the
continuation of the financial statements of the legal subsidiary
(Langpan) except for its capital structure, the consolidated
financial statements need to reflect the following:
(a) the assets and liabilities of the legal subsidiary (the
accounting acquirer) (Langpan) recognised and measured at their
precombination (prior to transaction) carrying amounts.
(b) the assets and liabilities of the legal parent (the accounting
acquiree) (Mantengu) recognised and measured at fair value in
accordance with IFRS 3.
(c) the retained earnings and other equity balances of the legal
subsidiary (accounting acquirer) Langpan before the business
combination.
(d) the amount recognised as issued equity interests in the
consolidated financial statements is determined by adding the
issued equity interest of the legal subsidiary (the accounting
acquirer) (Langpan) outstanding immediately before the business
combination to the fair value of the legal parent (accounting
acquiree) (Mantengu). However, the equity structure (ie the
number and type of equity interests issued) reflects the equity
structure of the legal parent (the accounting acquiree)
(Mantengu), including the equity interests the legal parent
issued to effect the combination. Accordingly, the equity
structure of the legal subsidiary (the accounting acquirer)
(Langpan) is restated using the exchange ratio established in
the acquisition agreement to reflect the number of shares of the
legal parent (the accounting acquiree) (Mantengu) issued in the
reverse acquisition.
5. CHANGES IN SHARE CAPITAL
Audited Audited Audited Audited
Group Group Company Company
12-months 12-months 12-months 12-months
to February to February to February to February
2023 2022 2023 2022
R’000 R’000 R’000 R’000
Opening balance 50 320 48 391 85 020 85 020
Issue of shares 28 688 1 929 - -
Acquisition of Langpan 5 181 - 550 000 -
Rights Offer 15 000 - 15 000 -
Closing balance 99 189 50 320 650 020 85 020
Number of shares (‘000)
Opening balance 863 053 863 053 863 053 863 053
Cancelled shares (197) - (197) -
Acquisition of Langpan 137 500 000 - 137 500 000 -
Rights Offer 15 000 000 - 15 000 000 -
Closing balance 153 362 857 863 053 153 362 857 863 053
6. OTHER FINANCIAL LIABILITIES
Held at amortised cost
RWE 64 435 - - -
IDC 39 513 - - -
Other 42 674 60 693 12 464 21 408
146 622 60 693 12 464 21 408
On 14 April 2022, the Group entered into a contract with RWE Supply
& Trading GMBH (“RWE”) to deliver 240 000 metric tonnes of chrome
concentrate over a period of 2 years. The amount bears interest at
the secured overnight financing rate plus 5% and is repayable over
the duration of 2 years beginning 31 July 2023.
The loan with the Industrial Development Corporation of South Africa
Limited (“IDC”) is secured by the assets that formed part of
agreement. Legal title to these assets remains with the IDC until
paid off by Langpan. The loan bears interest at prime plus 2.8%. The
loan is repayable in monthly instalments over the 5-year period which
commenced late in calendar 2022.
7. FAIR VALUE OF MINERAL RESERVE
A Competent Persons Report (CPR) was performed by Bara Consulting
Proprietary Limited in accordance with (1) The South African Code for
the Reporting of Exploration Results, Mineral Resources and Mineral
Reserves (SAMREC Code) 2016 Edition and (2) The South African Code
for the Reporting of Mineral Asset Valuation (SAMVAL Code) 2016
Edition. The total reserves indicated in the CPR are 2.17 million
tonnes and the value indicated was R851 million.
The Group was unable to record the mineral reserve at the fair value
of R851 million on acquisition. This is because the mineral reserve
had to be recorded at the pre-combination value of R94 865 012 in
accordance with IFRS 3, paragraph B22(a) because of the Langpan
acquisition being classified as a reverse takeover in accordance with
IFRS 3, paragraph B19. The Group does not consider the value of the
mineral reserve recorded in the statement of financial position of
R94 865 012 to be indicative of the value of the 2.17 million tonnes
of ore at Langpan. The fair value is R851 million.
The mineral reserve will be amortised on a units of production basis
over the useful life of the mine.
The CPR is available at www.mantengu.com
8. EVENTS AFTER THE END OF THE REPORTING PERIOD
On 1 March 2023, the Board took the decision to terminate the services
of Ngubane & Co (JHB) Inc. as Mantengu's external auditor with
immediate effect. On 2 March 2023, the Board took the decision to
appoint HLB CMA South Africa Inc. as Mantengu's external auditor.
Following the resignation of Mahlatsi Movundlela as Chief Executive
Officer on 28 February 2023, Michael Miller was appointed as the
Company's Chief Executive Officer and Magen Naidoo was appointed as
Chief Financial Officer (replacing Michael Miller as Financial
Director) respectively with effect from 2 March 2023.
On 31 March 2023, the Company consolidated its authorised and issued
share capital on a 1 000 to 1 basis. The result of the Share
consolidation was that the authorised and issued share capital was
reduced from 155,000,000,000 and 153,362,856,902 to 155,000,000 and
153,362,857, respectively. This was done to simplify and neaten the
legacy balance sheet and share register effects of the Acquisition
of Langpan on 27 July 2022.
On 30 May 2023, Mantengu released an announcement on SENS outlining
the commissioning of the first Langpan chrome beneficiation plant
(“Chrome Plant”). The successful commissioning of the Chrome Plant
has enhanced the production capacity of the plant to a throughput of
36,000 tonnes per month or 100 tonnes per hour. The Chrome Plant is
expected to produce approximately 18,000 tonnes of chrome
concentrate, with a chrome content of between 42% and 44%, per month.
9. GOING CONCERN
At 28 February 2023, the Group had accumulated losses totalling
R20.5 million but the Group's total assets of R252.5 million exceeded
its liabilities of R173.8 million. For the period ended 28 February
2023, the Company experienced a net loss after tax of R5.8 million
(28 February 2022: R7.8 million) and the Company's total assets of
R551.3 million exceeded its liabilities of R22.3 million. The Group
and Company financial results and financial position for the period
ended 28 February 2023 are mainly due to the following:
1. The Company completed the Acquisition of Langpan on 27 July 2022
for a consideration of R550 million.
2. The Company was non-operational, thus incurred primarily
operational and listings related costs.
3. Given that the Company was suspended on 26 July 2016, the Company
has incurred significant historical losses related to maintaining
the listing, catching up of outstanding financial compliance and
canvassing the market for investment opportunities, thus, the
significant accumulated losses.
4. As at 28 February 2023, the Group has access to significant
funding to deploy throughout its operations.
Given the fact that the Company has been fully reinstated on the JSE,
the Acquisition of Langpan completed, the Group being fully funded
and the successful commissioning of the Chrome Plant, the Board is
confident that the Group and Company will have sufficient resources
to operate as a going concern. As a result of these facts, the Board
believes that it is appropriate to prepare the results on a going
concern basis. Accordingly, the audited results do not include the
adjustments that would result if the Group or Company were unable to
continue as a going concern.
10. DIVIDENDS
No dividend was declared for the year ended 28 February 2023 (2022:
Nil).
11. AUDITOR’S OPINION
The annual financial statements for the year ended 28 February 2023
have been audited by the Company’s auditor, HLB CMA South Africa Inc.,
who expressed an unmodified opinion thereon.
A copy of the audit opinion on annual financial statements for the
year ended 28 February 2023 is available for inspection at the
Company’s registered office, together with the annual financial
statements identified in the opinion.
HLB CMA South Africa Inc’s unmodified audit opinion does not
necessarily report on all the information contained in this audited
summarised financial results announcement. Shareholders are therefore
advised that in order to obtain a full understanding of the nature
of HLB CMA South Africa Inc’s engagement, they should obtain a copy
of HLB CMA South Africa Inc’s unmodified audit opinion, together with
the accompanying annual financial statements from the Chief Financial
Officer, at the Company's registered office, which is also available
on Mantengu’s website at: www.mantengu.com.
No forward looking statements contained in this announcement have
been reviewed, audited or reported on by the Company’s auditor.
12. REPORTING
This audited summarised financial results announcement has been
extracted from the audited annual financial statements of Mantengu
for the year ended 28 February 2023 but is not itself audited. The
Directors take full responsibility for the preparation of this audited
summarised financial results announcement and confirm that the
financial information contained herein has been correctly extracted
from the audited annual financial statements of Mantengu for the year
ended 28 February 2023.
CORPORATE INFORMATION
Postal address: Postnet Suite 446, Private Bag X21, Bryanston, 2021
Registered and Physical address: 5 Saint Michaels Lane, Bryanston,
2021
Tel no:+27 (0) 11 036 3100
Web: www.mantengu.com
Board of Directors: MJ Miller, M Naidoo, A Collins# (Chairman),
V Madlela*, J Tshikundamalema*
(#Non-Executive, *Independent Non-Executive)
Company Secretary: Neil Esterhuysen & Associates Inc
Transfer Secretaries: Computershare Investor Services Proprietary
Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, PO
Box 61763, Marshalltown 2107
Auditor: HLB CMA South Africa Inc.
Johannesburg
14 June 2023
Designated Adviser
Merchantec Capital
Date: 14-06-2023 12:33:00
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