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MVL - Mvelaphanda Resources Limited - Reviewed interim results for the six
months ended 31 December 2009
MVELAPHANDA RESOURCES LIMITED
(Registration number: 1980/001395/06
Incorporated in the Republic of South Africa
Share code: MVL
ISIN number: ZAE000050266
REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2009
FEATURES
- Debt reduced by 48% year-on-year to R2, 279 million
- Recovery in investments results in NAV rising to R58.13/share
- Group cash of R1.1 billion (Mvela Resources R116 million)
- Northam robust and Booysendal Project approved
Mvela Resources Indicative NAV table
Asset Shares Percentage Share Value Value
Price2
owned owned (R/share) (Rm) R/share)
(million)
Gold Fields1 33.72 4.8% 97.98 3,160 14.70
Northam 225.98 62.7% 48.04 10,856 50.50
Trans Hex 21.53 20.3% 3.90 84 0.39
Total listed assets 14,100 65.59
Unlisted assets3 648 3.01
Net (debt)/cash (2,253) (10.48)
Cash and cash equivalents4 25.7 0.12
Bridging loan (240) (1.11)
Preference share funding (2,039) (9.49)
TOTAL 12,495 58.13
Premium/(discount) to NAV (15.7%)
MVL share price2 (R/share) 49.00
MVL shares in issue5 (million) 214.961
Notes:
1. Adjusted for tax
2. Close of business on 31 December 2009
3. Management estimates
4. Includes dividends from Northam and Gold Fields and adjusted for liabilities
5. Undiluted
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at R`000 Notes Reviewed Unaudited Audited
31 December 31 December 30 June
2009 2008 2009
ASSETS
Non-current assets 10,162,524 14,526,049 10,148,157
Investment in
associates 210,676 53,775 180,056
GFI-SA loan 4,617,000
Deferred taxation 24,397 40,178 20,465
Property, plant
and equipment 9,757,609 9,715,971 9,800,901
Environmental and
social investments 169,842 99,125 146,735
Current assets 1,862,842 2,180,792 1,844,808
Inventories 490,841 680,944 468,254
Trade and other
receivables 208,448 181,811 227,689
Investment
in escrow 72,243
Cash and
cash equivalents 1,091,310 1,318,037 1,148,865
Non-current assets
classified as
held for sale 3,297,016 368 3,732,701
Listed investments 3 3,297,010 360 3,732,695
Unlisted investments 6 8 6
TOTAL ASSETS 15,322,382 16,707,209 15,725,666
EQUITY AND LIABILITIES
Total equity 10,777,89 10,320,040 10,616,804
Share capital
and share premium 4,796,295 4,796,295 4,796,295
Retained earnings 2,662,304 1,702,477 2,806,117
Equity compensation
reserve 269,683 239,161 251,833
Other reserves (607,573) (410) (874,070)
Mvelaphanda Resources
Shareholders`
equity 7,120,709 6,737,523 6,980,175
Minority Shareholders`
equity in Northam
Platinum Ltd 3,657,190 3,582,517 3,636,629
Non-current
liabilities 2,828,074 3,452,973 3,487,819
"A" ordinary shares
(held by Afripalm 2) 700 700 700
Preference share
funding (Booysendal
Transaction) 4 1,357,000 2,000,000 2,000,000
Long-term
provisions 111,320 76,801 100,440
Deferred taxation 5 1,359,054 1,375,472 1,386,679
Current liabilities 1,716,409 2,934,196 1,621,043
Short-term portion
of preference
share funding
(Booysendal
Transaction) 4 682,480 346,648 44,711
Bridging loan
(refinanced
mezzanine loan) 6 239,582 904,171
Short-term portion
of senior bank
loan (GFI-SA) 69,946
Short-term portion
of mezzanine finance
(GFI-SA) 1,959,892
Short-term
provisions 237,828 223,445 73,088
Current taxation
payable 25,811 105,554 989
Accounts payable
and accruals 530,708 228,711 598,084
TOTAL EQUITY AND
LIABILITIES 15,322,382 16,707,209 15,725,666
CONSOLIDATED INCOME STATEMENT
As at R`000 Notes Reviewed Unaudited Audited
6 months to 6 months to 12 months to
31 December 31 December 30 June
2009 2008 2009
Operating
mining
income derived
from
Northam
Platinum Ltd
Sales revenue 1,736,599 940,509 2,514,294
Cost of sales (1,597,351) (760,454) (2,192,034)
Operational mining
profit derived from
Northam Platinum Ltd
(Dec 2009: 6 months;
Dec 2008: 4 months;
June 2009: 10 months) 139,248 180,055 322,260
Other operating
(expenditure)/income (69,417) 70,959 (70,949)
Earnings from
associates 5,320 12,343 (65,532)
- Northam
Platinum Ltd
- (Dec 2008 and
- June 2009: equity
accounted results
for two months) 27,033 27,033
- Trans Hex Group Ltd 146 (14,690) (165,171)
- Pandora 5,174 72,606
Exploration and project
development costs (13,702) (6,235) (38,259)
Corporate expenses (19,655) (14,611) (49,066)
Share-based employee
incentive costs 7 (38,119) 52,015 76,893
Net other income (1,750) 41,135 18,606
Costs associated
with pursuing
transaction
opportunities (1,511) (13,688) (13,591)
Investment income 145,369 317,272 498,676
Interest received 114,969 317,272 498,673
- Interest earned
on GFI-SA loan 218,703 309,779
- Other interest
- earned 114,969 98,569 188,894
Dividends received 30,400 3
Finance costs (187,790) (283,870) (514,136)
- Senior bank loan
(GFI-SA) (12,160) (13,660)
- Mezzanine finance
(GFI-SA) (154,843) (218,551)
- Bridging loan
(refinanced
mezzanine loan) (32,185) (59,325)
- Bridging loan
(cost of options) 8 (75,705)
- Preference share
funding (Booysendal
Transaction) (79,881) (116,867) (221,899)
- Other (19) (701)
Other (expenses)
/income (44,706) (587,978) 850,977
Net effect of the
Booysendal
Transaction 328 328
Impairment write-back/
(write-down) 26,116 (125,306) 23,446
Net (loss)/gain on
revaluation of
financial instruments
- GFI-SA loan (463,000) 865,000
Fair value loss on
disposal of Gold
Fields shares 9 (70,822) (37,797)
NET (LOSS)/PROFIT
BEFORE TAXATION (17,296) (303,562) 1,086,828
TAXATION (70,399) 437,454 176,232
- Normal (144,077) (84,502) (248,880)
- Deferred 73,678 521,956 425,112
NET (LOSS)/PROFIT
FOR THE PERIOD (87,695) 133,892 1,263,060
Net (loss)/profit
attributable to:
- Owners of
Mvelaphanda
Resources Ltd (143,299) 487,781 1,591,421
- Minority
interest in
Northam
Platinum Ltd 55,604 (353,889) (328,361)
NET (LOSS)/PROFIT
FOR THE PERIOD (87,695) 133,892 1,263,060
(LOSS)/
EARNINGS PER
ORDINARY
SHARE (cents)
- Basic 10(a) (67) 228 742
- Headline 10(b) (51) 1,110 1,663
- Diluted 10(c) (67) 226 738
ABRIDGED CONSOLIDATED SEGMENTAL RESULTS*
As at R`000 Reviewed Unaudited Audited
6 months to 6 months to 12 months to
31 December 31 December 30 June
2009 2008 2009
Net (loss)/
profit after
taxation
- Gold (149,724) (348,377) 869,069
- Platinum (19,811) 574,074 493,365
- Diamonds 25,972 (145,785) (148,760)
- Other 55,868 53,980 49,386
NET (LOSS)/PROFIT
FOR THE PERIOD (87,695) 133,892 1,263,060
* A detailed segmental income statement is available on the company`s
website: www.mvelares.co.za.
CONSOLIDATED STATEMENT OF CASH FLOWS
As at R`000 Reviewed Unaudited Audited
6 months to 6 months to 12 months to
31 December 31 December 30 June
2009 2008 2009
CASH FLOWS
FROM
OPERATING
ACTIVITIES
Cash
Generated
by/(utilised
in)
operations 232,625 331,459 867,735
Interest
received 114,969 317,272 498,673
Finance
costs (117,317) (96,807) (1,223,114)
Income
taxation
paid (119,256) (176,503) (428,335)
Net cash
generated
by/
(utilised
in) operating
activities 111,021 375,421 (285,041)
CASH FLOWS FROM
INVESTING
ACTIVITIES
Dividends
received 30,400 1,078 1,080
Acquisition
of property,
plant and
equipment (141,993) (236,450) (333,174)
Acquisition of
Booysendal
(Booysendal
Transaction) (2,388,423) (2,390,994)
Acquisition of
Northam
Platinum Ltd
shares (1,596,864) (1,596,864)
GFI-SA loan
repaid 4,139,000
Acquisition of
50 million
Gold Fields shares (4,139,000)
Net proceeds on
disposal of
Gold Fields
Ltd shares 665,726 1,161,507
Additions to
township
development
(Northam
Platinum Ltd) (10,760) (11,280) (17,720)
Net investment in
associate
company (Pandora) 7,500
Cash contributionn
received from
associate company
(Pandora) 8,572
Proceeds on
disposal of
fixed assets
and non-
strategic
investments 2,344 3,659 5,336
Net cash
generated by/
(utilised in)
investing
Activities 554,289 (4,228,280) (3,163,329)
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from
preference share
funding 2,500,000 2,500,000
Bridging loan
(refinanced
mezzanine loan) 2,023,600
Capital
repayment
in respect
of loans (664,589) (380,790) (2,935,954)
- Preference share
funding (220,000) (500,000)
- Senior bank
loan
(GFI-SA) (160,790) (230,736)
- Mezzanine
finance (GFI-SA) (1,085,788)
- Bridging
finance
(refinanced
Mezzanine
debt) (664,589) (1,119,430)
Net proceeds
from shares
issued by
Northam
Platinum Ltd 7,754 3,774
Dividends paid to
Northam
Platinum Ltd
Minority
shareholders (53,683) (247,140) (298,443)
Increase in social
and development
investments
(Northam
Platinum Ltd) (12,347) 5,432
Net cash (utilised in)
/generated by
financing activities (722,865) 1,872,070 1,298,409
Net (decrease)/increase
in cash and cash
equivalents (57,555) (1,980,789) (2,149,961)
Take on cash balance
from Northam
Platinum Ltd 1,379,240 1,379,240
Cash and cash
equivalents
at beginning
of the year 1,148,865 1,919,586 1,919,586
CASH AND CASH
EQUIVALENTS AT
END OF THE PERIOD 1,091,310 1,318,037 1,148,865
Cash and cash
equavalents
comprises:
- Held by Mvelaphanda
Resources Ltd 116,431 587,346 227,962
- Held by Northam
- Platinum Ltd 974,879 730,691 920,903
CASH AND CASH
EQUIVALENTS AT
END OF THE PERIOD 1,091,310 1,318,037 1,148,865
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
As at Reviewed Unaudited Audited
6 months to 6 months to 12 months to
31 December 31 December 30 June
2009 2008 2009
(Loss)/profit
for the period (87,695) 133,892 1,263,060
Equity accounted
portion of:
- foreign currency
translation reserve
of associates 7,755 (254) (1,076)
- cash flow hedges
- of associates 1,299
Gain/(loss) on
revaluation of listed
investments 258,742 (23) (871,561)
Total comprehensive
income for the
period 178,802 134,914 390,423
Total comprehensive
income/(loss)
attributable to:
Owners of Mvelaphanda
Resources Ltd 123,198 488,803 718,784
Minority interest in
Northam Platinum Ltd 55,604 (353,889) (328,361)
Total comprehensive
income for the period 178,802 134,914 390,423
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Mvela
Resources Minority
Shareholders` Shareholders` Total
equity equity equity
Audited
balance
at 30 June
2008 6,093,342 6,093,342
Northam
purchase price
allocation 4,180,125 4,180,125
Comprehensive
income for the
period 488,804 (353,889) 134,915
Dividends paid
to minorities (247,616) (247,616)
Net proceeds from
shares issued 147,171 147,171
Equity compensation
Reserve 1,633 1,633
Shared base payments
of subsidiary 6,573 3,897 10,470
Unaudited balance
31 December
2008 6,737,523 3,582,517 10,320,040
Adjutment to
Northam purchase
price allocation 75,602 75,602
Purchase of
Northam shares (2,572) (2,572)
Comprehensive income
for the period 229,980 25,528 255,508
Dividends paid to
minorities (50,827) (50,827)
Equity compensation
Reserve 1,930 1,930
Shared base payments
of subsidiary 10,742 6,381 17,123
Audited balance at
30 June 2009 6,980,175 3,636,629 10,616,804
Comprehensive
income for the
period 123,198 55,604 178,802
Dilusion due to
additional shares
issued by Northam (535) 8,290 7,755
Dividend paid
to minorities (53,683) (53,683)
Equity compensation
reserve 499 499
Shared base
payments of
subsidiary 17,372 10,350 27,722
Reviewed balance
at 31 December
2009 7,120,709 3,657,190 10,777,899
NOTES
1. Basis of preparation
These condensed consolidated interim financial statements have been prepared on
the historical cost basis, except for financial instruments that are fair valued
in accordance with the group`s accounting policies which are consistent with
those adopted in the financial year ended 30 June 2009 and which are compliant
with International Financial Reporting Standards ("IFRS") and in accordance with
IAS 34:"Interim Financial Reporting", the South African Companies Act,1973, as
amended, and the JSE Listings Requirements.
The group applied all the relevant new and revised standards and interpretations
that were in issue and effective for the period ended 31 December 2009. This had
no material impact on the financial statements of the group.
The results as presented for the period ended 31 December 2009 are not directly
comparable to those ended December 2008 and 30 June 2009 as a result of the
Mvela Resources group ("the group") increasing its shareholding in Northam
Platinum Limited ("Northam") from 22% to 63%, resulting in Northam being a
subsidiary of the group and therefore being fully consolidated from the end of
August 2008, the effective date of acquisition. In line with previous practice,
Northam was equity accounted until the end of August 2008.
The financial results for the period ended 31 December 2008 and for the year
ended 30 June 2009 therefore reflect equity accounting of 22% of Northam for the
first two months of the period (resulting in Northam contributing R27 million to
equity accounted "Earnings from associates") and full consolidation of Northam`s
financial results for four months to 31 December 2008 and for ten months for the
period ended 30 June 2009 (resulting in fully consolidated "Operational mining
profit derived from Northam" of R180 million for the period 31 December 2008 and
R322 million for the period ended 30 June 2009 compared to the R139 million for
the six months ended 31 December 2009). As a result, like for like comparisons
with the previous financial periods are difficult.
2. Going concern
The underlying assets of the group primarily comprise mining assets. Mining
assets have a finite life that depends on geological and technical factors as
well as commodity prices and other economic factors. Taking into account the
outlook for these factors as well as the group`s present financial resources,
the directors believe that the group is a going concern. The group`s interim
financial statements have accordingly been prepared on this basis
3. Investment in Gold Fields Ltd
During the period ended 31 December 2009, approximately 6.2 million Gold Fields
shares were sold and the proceeds applied towards reducing the bridging finance
raised in March 2009 (refer to note 6). The remaining 33.7 million Gold Fields
shares were fair valued (using a closing share price of R97.98) at R3.3 billion
at 31 December 2009.
4. Preference share funding (Booysendal Transaction)
The preference share funding, originally amounting to R2.5 billion, was advanced
by Nedbank Limited pursuant to the Booysendal Transaction that was concluded in
August 2008. The preference shares are redeemable over a period of 5.5 years at
a dividend rate of 73.3% nacs of the South African Prime Overdraft lending rate.
At 31 December 2009 the funding comprised a capital balance of R2.0 billion and
accrued interest of R39.5 million.
5. Deferred tax
The deferred tax provision on the balance sheet mainly relates to the deferred
tax raised on the fair value adjustment on the Northam assets acquired pursuant
to the Booysendal Transaction as well as the fair value adjustment on the Gold
Fields shares
6. Bridging loan
The mezzanine funding that was raised pursuant to the GFI-SA transaction had
rolled up to approximately R2 billion as at 17 March 2009 and was fully
refinanced with a short-term bridging loan that is repayable at Jibar plus 250
basis points. As at 31 December 2009 the closing balance was R239.6 million
after the repayment from the proceeds from the sale of approximately 6.2 million
Gold Fields shares.
7. Share-based incentive costs
The cost is primarily attributable to the increase in the share price of Mvela
Resources from R30.51 (as at 30 June 2009) to R49.00 (as at 31 December 2009) as
well as the impact of the exercise of certain share appreciation rights.
8. Bridging loan - cost of options
In terms of the funding agreement certain call options were granted to the
financial institution over some of the Gold Fields shares as part of their
compensation. At 31 December 2009 these options were valued by taking into
account the volatility of the Gold Field`s shares (used 51%), a short term risk
free rate (used 7.2%) and the contractual strike prices (ranging from R98.86 to
R120.00) per share. The cost impact at 31 December 2009 was R75.7 million. These
options expire on 7 May 2010 and the contractual options excercise prices were
higher than the spot price on 31 December 2009.
9. Fair value loss on the disposal of the Gold Fields investment
Fair value adjustments on the Gold Fields investment have been taken to the
income statement until 17 March 2009, the date on which the GFI-SA loan
converted into Gold Fields shares. A realised profit of R153 million (30 June
2009: realised profit of R326 million) (which represents the difference between
the actual selling price realised and a cost price of R82.78 per share) was
recognised on the disposal of some 6.2 million Gold Fields shares between 1 July
2009 and 31 December 2009. From an
IFRS perspective, however, a fair value loss of R70.8 million (30 June 2009:
fair value loss of R37.8 million) on the sold shares has been recognised, being
the difference between the recorded fair vale of the shares on 17 March 2009 (at
R118.90 per share) and the actual price realised on disposal.
10. As at Reviewed Unaudited Audited
6 months to 6 months to 12 months to
31 December 31 December 30 June
2009 2008 2009
Earnings per ordinary
share are calculated
as follows:
(a) Basic (loss)/
earnings per
ordinary share
(cents) (67) 228 742
R`000
Attributable profit (143,299) 487,781 1,591,421
Weighted
average number
of shares in
issue 214,961,101 214,095,848 214,510,049
(b) Headline
(loss)/earnings
per ordinary
share (cents) (51) 1,110 1,663
R`000
Attributable
(loss)/profit (143,299) 487,781 1,591,421
Attributable
impairment
(write-back)/
write-downs (26,116) 1,884,679 1,973,445
Attributable
income from joint
venture in prior
periods (32,504)
Attributable loss
on sale
of assets 60,845 3,016 34,706
Headline (loss)
/earnings (108,570) 2,375,476 3,567,068
Weighted average
number of shares
in issue 214,961,101 214,095,848 214,510,049
(c) Diluted (loss)
/earnings per
ordinary share
(cents) (67) 226 738
R`000
Attributable
(loss)/profit (143,299) 487,781 1,591,421
Diluted weighted
average number of
shares in issue 215,989,911 215,667,297 215,538,859
Due to the reported loss for the period 31 December 2009 there is no dilusion,
accordingly, the basic loss per Ordinary share was used.
11. Reviewed Reviewed Audited
31 December 31 December 30 June
2009 2008 2009
Capital commitments
(Northam Platinum
Limited)
Authorised but
not contracted 149,684 129,862 191,504
Contracted 49,617 45,046
149,684 179,479 236550
12. Directorate
Ms NS Ntsaluba resigned as financial director effective from 31 December 2009.
13. Subsequent events
Northam Platinum Limited declared an interim dividend of 20 cents per share and
Gold Fields Limited declared an interim dividend of 50 cents per share. The
combined dividends will result in an additional cash inflow of R62.1 million for
Mvela Resources.
14. Audit review opinion
These interim financial results have been reviewed by the group`s external
auditors, PricewaterhouseCoopers Inc., and their unqualified review opinion is
available for inspection at the company`s registered office.
COMMENTARY
CORPORATE ACTIVITY
The Unbundling - Progress
Mvela Resources remains committed to its stated unbundling strategy in order to
realise value for its shareholders by unlocking the discount the share trades at
to its Net Asset Value (NAV) and to remove the pyramid holding company
structure, as required by the JSE Limited.
The unbundling strategy, as previously outlined, involves:
- Realising the value in the Gold Fields investment and applying the proceeds to
redeem the debt on the balance sheet before potentially applying any excess to
part capitalise Northam`s Booysendal Project;
- Unbundling the Northam shares to shareholders, giving them direct exposure to
the upside inherent in Booysendal and unlocking the NAV discount.
Despite the anticipated increase in the dollar price of gold, which rose 16%
from US$934/oz on 30 June 2009 to US$1,087/oz on 31 December 2009, continued
strength in the rand (which appreciated 4% against the dollar to R7.40/US$) and
uncertainty surrounding the electricity price increases in South Africa, weighed
heavily on the share prices of the South African gold producers, including Gold
Fields.
Gold Field`s share price rose only 5% to R97.98/share during the reporting
period and despite a brief spike to around R116/share in December 2009, provided
few trading opportunities. A further 6.2 million Gold Fields shares were sold,
bringing the total to 16.3 million shares sold to date, at an average realised
price of over R112/share.
Net proceeds from the Gold Fields share sales have been used to reduce the
bridging loan attributable to the Gold Fields Transaction to R240 million at 31
December 2009. The repayment date on the bridging loan has been extended to 30
April 2010 (previously 17 December 2009) and the exercise date on the call
options granted to the financial institution providing the loan, extended to 7
May 2010.
Khumama Platinum (Pty) Limited (Khumama Platinum) - Arbitration date set
As outlined in detail in the 2009 annual financial statements (accessible on
www.mvelares.co.za/ khumama_ platinum.php), Mvela Resources and the former
shareholders of Khumama Platinum are involved in a contractual dispute.
Mvela Resources is pleased to report that the arbitration hearing has been set
for the first two weeks of May 2010 and anticipate a resolution to this dispute
before the end of the current financial year. While Mvela Resources welcomes the
fact that the arbitration can now proceed, the unbundling process cannot,
unfortunately, be concluded until a ruling has been given. As such, the
unbundling strategy is likely to be delayed until the first half of financial
2011.
Mvela Resources has maintained an open dialogue with the JSE Limited regarding
the unbundling process and due to the delay originating from the outstanding
arbitration, the JSE Limited has granted Mvela Resources dispensation from the
Pyramid Company rules until the end of June 2010. Mvela Resources will continue
to keep the JSE Limited informed as to its progress with the unbundling
strategy.
FINANCIALS
Northam reported a solid operating performance, with 33% higher sales volumes
boosted by the inclusion of 32,569 4PGE oz of concentrate purchased from third
parties. A 21% decline in the rand basket price received from R322,814/kg to
R254,913/kg (4PGE) however, resulted in sales revenue rising only 8% period on
period, to R1,737 million. A 13% increase in total reported operating costs to R
1,503 million (including R305 million relating to the purchase of concentrate),
contributed to a 62% decline in reported operating profit, to R234 million (59.9
cents per share). Greater detail on Northam`s results for the period ended 31
December 2009 is available on Northam`s website: www.northam.co.za. Northam`s
cost of sales and operational mining profit as reflected in Mvela Resources`
consolidated income statement, differs from that reported by Northam due to an
additional amortisation charge of R94.8 million due to the fair valuing of
Northam`s assets at the time of acquiring the controlling stake.
Northam`s board has approved an initial R340 million of capital expenditure (of
approximately R3 billion for the first module) to fund the early works programme
at its Booysendal project. At this stage, Northam will fund its capex from
internal cash retentions pending a more detailed funding plan in due course.
Northam remains cash positive at its Zondereinde operation and declared a
dividend of 20 cents per share, amounting to a future inflow of R43 million to
Mvela Resources. Together with the 50 cents per share dividend declared by Gold
Fields, Mvela Resources` year-end cash balance of R116 million will be enhanced
by approximately R62 million.
Full consolidation of Northam for the period ended 31 December 2009 makes direct
comparisons of Mvela Resources` financial results for the period ended 31
December 2008 (during which two months were equity accounted and four months
consolidated) difficult. The change in the accounting treatment of the Gold
Fields Transaction from March 2009, adds further complexity. This is reflected
in the significant change in Mvela Resources earnings, from 228 cents per share
for the period ended 31 December 2008, to a loss of 67 cents per share for the
period ended 31 December 2009, which does not represent the financial position
of the company.
Of significance is the reduction of the bridging loan to R240 million following
the sale of further Gold Fields shares and the extension of the repayment date
to 30 April 2010. Other loan repayments scheduled in the next 12-month period,
include R643 million of the R2 billion capital portion of the outstanding
preference share funding, which is due for redemption on 30 September 2010.
Finance costs of R188 million incurred during the period ended 31 December 2009
(31 December 2008 - R283 million) include R32 million in interest paid and an
unrealised R76 million fair value loss on the revaluation of the Gold Fields
options relating to the bridging loan. The exercise date on these options has
been extended to 7 May 2010 and despite Gold Fields` year end share price of
R97.98, being below the exercise prices of the options, the extended term and
volatility of the share, resulted in a calculated fair value loss. Finance costs
relating to the preference shares (Booysendal Transaction) of R80 million, were
significantly lower than in the previous period (R117 million) due to favourable
movement in the South African Prime interest rate and a redemption of R500
million of the preference share funding.
The R71 million fair value loss on the disposal of the Gold Fields shares during
the period is a result of the selling price being less than the R118.90/share
accounting value attributed to the Gold Fields shares when Mvela Resources
received them on 17 March 2009. This despite the average selling price being
significantly higher than the R82.78 cost price per share, when the Transaction
was entered into in March 2004.
Financially, the Mvela Resources group remains robust, with the R3.3 billion
fair value of its Gold Fields shares at year end (at R97.98/share) exceeding its
liabilities by approximately R1 billion. In addition, the group had cash of R1.1
billion on 31 December 2009.
OUTLOOK
The outlook for global metals markets has improved significantly over the last
year and there are meaningful signs of a recovery in the global autocatalyst
market which should be positive for the PGM producers. Northam has approved the
initial expenditure on the Booysendal project and mine construction is
anticipated to begin in July 2010.
Mvela Resources will continue in its attempts to simplify the corporate
structure and unlock value for its shareholders in an as efficient and timeous
manner as is possible.
for and on behalf of the board
Chairman
PL Zim
Deputy Chairman
BR van Rooyen
Sponsor
J.P. Morgan Equities Limited
9 March 2010
Johannesburg
Directors
PL Zim (Chairman)
SW Mofokeng*
BR van Rooyen*
ME Beckett (British)**
PM Buthelezi
CK Chabedi**
YZ Cuba
R Moonsamy
MJ Willcox
MSMM Xayiya
(* Executive Directors)
(**Independent)
Registered Office
1A Albury Park
Dunkeld West, 2196
Magalieszicht Avenue
P O Box 413420, Craighall, 2024
Transfer Secretaries
Computershare Investor Services
(Pty) Limited
70 Marshall Street
P O Box 61051, Marshalltown, 2107
Date: 09/03/2010 08:00:17 Supplied by www.sharenet.co.za
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