Wrap Text
Reviewed Condensed Interim Consolidated and Separate Financial Statement for the six months ended 31 August 2022
Mantengu Mining Limited
(formerly Mine Restoration Investments Limited)
Incorporated in the Republic of South Africa
(Registration number 1987/004821/06)
Share Code: MTU
ISIN Code: ZAE000302360
(“Mantengu” or “the Company" or “the Group”)
REVIEWED CONDENSED INTERIM CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENT FOR THE SIX MONTHS ENDED 31 AUGUST 2022 (“RESULTS” or
“INTERIM FINANCIAL RESULTS”)
The board of directors of the Group (”the Board”) hereby present the
Interim Financial Results for the six months ended 31 August 2022.
Shareholders are advised that with the conclusion of the acquisition
of Langpan Mining Co (Pty) Ltd (“Langpan”) effective 27 July 2022,
from these Results onwards, Mantengu will report consolidated group
results.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Group Company Company Company
Reviewed Reviewed Reviewed Audited
6-months to 6-months to 6-months to 12-months
August 2022 August 2022 August 2021 to February
2022
R’000 R’000 R’000 R’000
Revenue 330 - - -
Cost of Sales (315) - - -
Gross loss 15 - - -
Other operating income 2 558 3 058 266 758
Other operating expense (7 583) (6 033) (1 788) (5 591)
Operating (Loss)/Profit (5 010) (2 975) (1 522) (4 833)
Finance costs (2 471) (1 933) (1 430) (3 004)
Loss for the period (7 433) (4 908) (2 952) (7 837)
Other Comprehensive
Income:
- - - -
Total Comprehensive
(Loss)/ Income for the (7 433) (4 908) (2 952) (7 837)
period
Total Comprehensive
(Loss)/ Income
Attributable to:
Owners of the parent (7 433) (4 908) (2 952) (7 837)
Non-controlling interest - - - -
Basic Loss per Share
(cents) (0.0054) (0.02) (0.34) (0.91)
Diluted Loss per Share
(cents) (0.0054) (0.02) (0.34) (0.91)
Headline Loss per Share (0.0054) (0.02) (0.34) (0.91)
Weighted average number of
Shares in issue (‘000) 137 645 373 24 028 617 863 053 863 053
Actual number of Shares in
issue (‘000) 138 362 857 138 362 857 863 053 863 053
CONDENSED STATEMENT OF FINANCIAL POSITION
Group Company Company Company
Reviewed Reviewed Reviewed Audited
as at 31 as at 31 as at 31 as at 28
August August August February
2022 2022 2021 2022
R’000 R’000 R’000 R’000
Assets
Non-Current Assets
Property, Plant & Equipment 17 581 - - -
Goodwill 37 285 - - -
Exploration Mineral Resource 94 865 - - -
Investment in subsidiary - 3 306 - -
Environmental rehabilitation 1 158 - - -
150 889 3 306 - -
Current Assets
Trade and other receivables 2 196 194 362 57
Cash and cash equivalents 56 4 5 12
2 252 198 367 69
Total Assets 153 141 3 504 367 69
Equity and Liabilities
Equity
Share Capital 82 316 88 327 85 020 85 020
Accumulated Loss (15 362) (120 131) (110 338) (115 223)
66 954 (31 804) (25 318) (30 203)
Liabilities
Non-Current Liabilities
Other financial liabilities 26 340 - - -
26 340 - - -
Current Liabilities
Trade and other payables 23 480 10 568 5 829 7 393
Other financial liabilities 35 513 24 740 19 856 22 879
Current tax payable 854 - - -
59 847 35 308 25 685 30 272
Total Liabilities 86 187 35 308 25 685 30 272
Total Equity and Liabilities 153 141 3 504 367 69
CONDENSED STATEMENT OF CHANGES IN EQUITY
GROUP Share capital Total Share Accumulated Total equity
Capital earnings (loss)
R’000 R’000 R’000 R’000
Total comprehensive
earnings/(loss) for the - - (7 433) (7 433)
period
Business Combination 82 316 82 316 (7 929) 74 387
Balance at 31 August
2022 82 316 82 316 (15 206) 67 110
COMPANY
Share capital Total Share Accumulated Total equity
Capital earnings (loss)
R’000 R’000 R’000 R’000
Balance at
28 February 2021 85 020 85 020 (107 386) (22 366)
Total comprehensive
earnings/(loss) for the - - (2 952) (2 952)
period
- - - -
Balance at
31 August 2021 85 020 85 020 (110 338) (25 318)
Total comprehensive
earnings/(loss) for the - - (4 885) (4 885)
period
Balance at
28 February 2022 85 020 85 020 (115 223) (30 203)
Total comprehensive
earnings/(loss) for the - - (4 908) (4 908)
period
Issue of Shares 3 306 3 306 - 3 306
Balance at
31 August 2022 88 326 88 326 (120 131) (31 805)
CONDENSED STATEMENT OF CASH FLOWS
Group Company Company Company
Reviewed Reviewed Reviewed Audited
6-months 6-months 6-months 12-months
to 31 to 31 to 31 to 28
August August August February
2022 2022 2021 2022
R’000 R’000 R’000 R’000
Net Cash flows from operating
activities (4 735) (1 869) (1 138) (2 588)
Net Cash flows from investing
activities (31) - - 1 125
Net Cash flows from financing
activities 4 792 1 861 1 139 1 471
Total cash movement for the
period 26 (8) 1 8
Cash and cash equivalents at
the beginning of the period - 12 4 4
Business Combination 30 - - -
Cash and cash equivalents at
end of the period 56 4 5 12
COMMENTARY
1. BASIS OF PREPARATION
These Interim 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 Companies Act (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 Financial
Director, Mr TA Makgolane.
Further, the directors are satisfied that the Company will still be
able to settle its obligations and realise its assets as measured in
terms of IFRS as applicable to a going concern.
Shareholders are advised that the information contained in the
announcement is also available at:
https://senspdf.jse.co.za/documents/2022/jse/isse/mtue/interim22.pdf
2. INTERIM FINANCIAL RESULTS AND FUTURE PROSPECTS
Mantengu operated as a cash shell for much of the period. On 27 July
2022, having obtained the requisite shareholder, legislative and
regulatory approvals, Mantengu completed the 100% acquisition of
Langpan Mining Co Proprietary Limited (“the Acquisition” or “the
Transaction”). The Acquisition was for an aggregate purchase
consideration of R550 million, which purchase consideration was
settled through the issue by Mantengu of 137 500 000 000 (one hundred
and thirty seven billion five hundred million) shares following the
increase in authorised share capital.
The Acquisition recapitalised Mantengu and allowed for Mantengu's
successful reinstatement on the Alternative Exchange of the JSE.
Langpan owns the plant and infrastructure as well as the chrome and
platinum mining rights on the farm Langpan 371KQ through its 100%
held subsidiary, Memor Mining Proprietary Limited ("Memor"). With
the Transaction now concluded, Mantengu is focused on delivering the
plant refurbishment project on time and within budget, and ultimately
commencing production.
The Interim Financial Results for the six months ended 31 August 2022
contain other operating income of R2.6 million owing largely to pre-
combination management fees earned. Admin and other operating
expenses increased by R5.8 million owing largely to Transaction costs
incurred for the Acquisition. Finance costs increased by R1.0 million
due to the business combination and the interest charge for the
period under review.
The Board has satisfied itself that the Group is in a position to
continue as a going concern and that it has access to sufficient
borrowing facilities to meet its foreseeable cash requirements.
3. LOSS PER SHARE AND HEADLINE LOSS PER SHARE (“HLPS”)
Group Company Company Company
Reviewed Reviewed Reviewed Audited
6-months to 6-months to 6-months to 12-months to
31 August 31 August 31 August 28 February
2022 2022 2021 2022
(Loss)/Earnings per
share (cents) (0.0054) (0.02) (0.34) (0.91)
Diluted
(loss)/earnings per (0.0054) (0.02) (0.34) (0.91)
share (cents)
Headline loss per
share (cents) (0.0054) (0.02) (0.34) (0.91)
Diluted headline loss
per share (0.0054) (0.02) (0.34) (0.91)
Weighted average
number of shares in 137 645 373 24 028 617 863 053 863 053
issue (‘000)
Actual number of
shares in issue 138 362 857 138 362 857 863 053 863 053
(‘000)
The loss and headline loss for the period under review are equal
therefore, there are no reconciling items between the loss and
headline loss balances.
The weighted average number of shares in issue was determined in line
with the IFRS 3 business combination guidance for reverse
acquisitions. Applying this guidance, the consideration shares issued
to Langpan of 137.5 billion are deemed to have been issued at the
beginning of the reporting period hence the resulting weighted
average number of shares in issue.
4. BUSINESS COMBINATION AND CHANGES IN SHARE CAPITAL
Business Combination Approach
In line with the Transaction circular, Mantengu’s acquisition of
Langpan has been recognised, measured and disclosed as a reverse
acquisition in accordance with IFRS 3.
• A reverse acquisition occurs when the entity that issues
securities (legal acquirer) is identified as the acquiree for
the accounting purpose and the entity whose equity interests
are acquired (legal acquiree), is the acquirer for accounting
purposes.
• As defined in accordance with IFRS 3, Mantengu has no preceding
control over Langpan, thus the Transaction has been categorised
as a reverse acquisition in terms of IFRS 3 where the legal
acquirer (Mantengu) becomes the accounting acquiree and the
legal subsidiary (Langpan) becomes the accounting acquirer.
• In accordance with IFRS 3, as Mantengu is the accounting
acquiree, the assets and liabilities of Mantengu are to be re-
measured at fair value on acquisition date in accordance with
the acquisition method with all the recognition and measurement
principles of IFRS being applied, including the requirement to
recognise goodwill, if applicable.
Further to this, IFRS 3 requires that both the accounting acquirer
and acquiree must meet the definition of a business. IFRS 3 defines
a business combination as a transaction or other event in which an
acquirer obtains control of one or more businesses.
The accounting acquirer in the Transaction is Langpan due to the fact
that the share swap results in a reverse takeover due to Langpan
having significantly more value than Mantengu. This then results in
Mantengu being the accounting acquiree.
IFRS 3 requires that the accounting acquiree is a business. Although
Mantengu, pre-acquisition, was a cash shell per the JSE Listings
Requirements, this did not preclude it from being classified as a
business in terms of IFRS. An assessment of the requirements of IFRS
3 B7 – B11 was performed which deemed Mantengu to be a business.
Aggregated Business Combination Group
27 July 2022
R ‘000
Property, Plant & Equipment 17 590
Exploration Mineral Resource 94 865
Environmental rehabilitation fund 1 127
Trade and other receivables 1 070
Cash and cash equivalents 30
Other financial liabilities (56 739)
Trade and other payables (19 987)
Current tax payables (854)
Total identifiable assets 37 102
Goodwill 37 285
Business combination per Statement 74 387
of Changes in Equity
Net cash inflow on acquisition
Cash acquired 30
Deemed Market Value – IFRS 3 B21
The Acquisition-date fair value of Langpan was perceived to be value
of the mining right at R550 million plus the current Net Asset Value
of Langpan to arrive at a total value of Langpan of R530 million
(R550 million less R95 million cost of mining right already accounted
for plus R75 million net asset value of Langpan) at 100%.
Post-Transaction, Mantengu shareholders will hold 0.6% (863 million
shares divided by 138 billion post-transaction shares) of the
combined entity therefore, 0.6% of R530 million equates to
R3 million.
Changes in Share Capital
To effect the Transaction, Mantengu had issued 137.5 billion shares
and has total shares issued of 138 billion as at 31 August 2022. In
line with IFRS 3 B, the share capital value reflects the share capital
of Langpan as the deemed acquirer plus Mantengu’s fair value arriving
at a share capital value of R82 million.
5. EVENTS AFTER THE END OF THE REPORTING PERIOD
Conclusion of IDC Funding:
Langpan concluded and has fully drawn down on a R41 million
(R36 million capital + VAT) asset-based facility with the IDC (“IDC
Facility”). The funds have been utilised to purchase long-lead items
required for the chrome plant refurbishment project. The IDC Facility
is priced at prime + 2.8%, repayable over 60 months and provided for
a 6 months capital and interest moratorium.
Commitments – Plant Refurbishment
Langpan has embarked on its plant refurbishment project which is now
designed to be able to efficiently process MG material and to be able
to tag-on PGM processing optimisation in future phases (previously
not considered in project design).
The project is estimated to cost around R75 million of which
R36 million has already been raised and fully drawn to pay deposits
on long-lead items, with the balance to be funded from the US$3.5
million RWE pre-payment facility.
Rights Offer:
Following JSE and other requisite approvals, on 17 November 2022
Mantengu released an announcement to shareholders of its intention
to raise R15 million by way of a fully underwritten renounceable
rights offer (“Rights Offer”) in terms of which the Company will
offer 15 000 000 302* new Mantengu Shares to qualifying shareholders
at a subscription price of 0.1 cents per Rights Offer Share in the
ratio of 10.84106 Rights Offer Shares for every 100 Mantengu Shares
held. The Company intends on utilising the majority of the proceeds
to settle long-standing creditors.
The Circular was distributed to qualifying shareholders on
21 November 2022 and the Rights Offer closes 12:00 on Friday,
9 December 2022.
*Adjusted as per the announcement released on SENS on 25 November
2022.
6. OTHER FINANCIAL LIABILITIES
Total liabilities of R86 million is made up of R62 million of other
financial liabilities (loans) and R24 million of trade and other
payables.
Summary and nature of significant new loans is as follows:
• LNDR, Dev Maharaj – Total loan value of R5.5 million used to
support Langpan commodity trades as and when opportunities
arise. The loan is repayable within a 30 day cycle in line with
the expected trade cycle.
• Gillian Gamsy, Kianalily – Total loan value of R3.5 million used
to support the working capital requirements of the business.
The loans have subsequently been considered for conversion to
equity as part of the Rights Offer process.
A summary of the nature of the loans in Langpan and Mantengu is as
follows:
• Langpan acquired Memor to take control of its chrome and
platinum mining right. As part of the acquisition, Langpan and
Memor entered into a creditor compromise with the creditors of
Memor which resulted in i.) the creditor amounts being fixed
which accrue no interest and ii.) the creditors waive any right
to legal recourse whilst the operations are ongoing. The
creditor compromise value formed the majority of the acquisition
price. The acquisition of Memor affords Langpan the ability to
control the mining operations to generate sufficient cash to
settle the creditors and make a return on the investment.
• In early 2017, an angel investor re-capitalised Mantengu through
a subordinated debt facility in order to settle claims, cover
working capital and transaction related costs for the
Transaction, providing support so as to maintain the Company’s
solvency and to ensure that the Company was able to continue
operating as a going concern. The majority of this facility is
expected to be settled through the Rights Offer, as noted above.
7. COMMITMENTS
There are no contractual commitments during the period under review.
Subsequent to the period, the Group has commitments relating to the
plant refurbishment project. Please refer to note 5 on events after
reporting date for details on commitments.
8. LEGAL SETTLEMENTS
Langpan, through its subsidiary Memor, had previously disclosed a
legal matter with ASB, the mining contractor that was assisting with
the LG mining project, to the value of R18 million. Langpan has
lodged a counter-claim for R69 million and has laid criminal charges
against all of the relevant directors and role players with the South
African Police Service. Management, supported by legal guidance, has
concluded the matter resolved and no claim or consideration for
contingent liability is warranted.
9. RELATED PARTY TRANSACTIONS
Mantengu provides management services to Langpan and its
subsidiaries, proceeds of which enable Mantengu to cover its
operating costs. Total fees for the period under review amounted to
R3 million, with the appropriate amount eliminated as part of
consolidated group presentation.
Total remuneration to key management (the CEO and FD) totalled
R1.4 million for the period under review.
10. GOING CONCERN
The Interim Financial Results have been prepared on the basis of
accounting policies applicable to a going concern. This basis
presumes that funds will be available to finance future operations
and that the realisation of assets and settlement of liabilities,
contingent liabilities and commitments will occur in the ordinary
course of business.
We draw attention to the fact that as at 31 August 2022 the group
and separate company had operating losses of R15 million (Company
R120 million) and that the group and separate company’s current
liabilities exceeded its current assets by R57 million (Company R35
million). This may indicate existence of a material uncertainty
related to events or conditions that may cast significant doubt on
the entity’s ability to continue as a going concern.
Following the implementation of the Langpan acquisition, the Board
has a reasonable expectation, having regard to the current status
(including the imminent draw down of the US$3.5 million pre-payment
facility), the continued support of its major shareholders, creditors
and the future strategy of the Group, that the Group will have
sufficient resources to continue as a going concern and have
therefore concluded that it is appropriate to prepare the Results on
a going concern basis. The solvency and liquidity of the Company will
be further strengthened through the Rights Offer.
Accordingly, the Results do not include the adjustments that would
result if the Group was unable to continue as a going concern.
11. DIVIDENDS
No dividend was declared for the interim financial period ended
31 August 2022 (28 February 2022: Nil).
12. CHANGES TO THE BOARD
The Board appointed Jonas Tshikundamalema as an independent non-
executive Director on 25 April 2022.
13. AUDITOR REVIEW CONCLUSION
The condensed interim consolidated and separate financial statements
for the six months ended 31 August 2022 have been reviewed by the
Company’s auditor, Ngubane & Co (JHB) Inc. (“Ngubane and Co”), who
expressed an unmodified conclusion thereon, however contains an
Emphasis of Matter paragraph as below.
Emphasis of Matter – Material Uncertainty Related to Going Concern
“We draw attention to Note 8 in the financial statements, which
indicates that the Group and separate Company had net losses of
R15 million and R120 million respectively and that the Group and
separate Company’s total liabilities exceeded its total assets by
R57 million and R35 million respectively as at 31 August 2022. As
stated in Note 8, these events, or conditions, indicate that a
material uncertainty exists that may cast significant doubt on the
Company’s ability to continue as a going concern. Our conclusion is
not modified in respect of this matter.”
A copy of the review conclusion on the condensed interim consolidated
and separate financial statements for the six months ended 31 August
2022 is available for inspection at the Company’s registered office,
together with the interim financial statements identified in the
report.
Ngubane & Co’s unmodified review conclusion does not necessarily
report on all of the information contained in this Results
announcement. Shareholders are therefore advised that in order to
obtain a full understanding of the nature of Ngubane & Co’s
engagement, they should obtain a copy of Ngubane & Co’s unmodified
review conclusion together with the accompanying financial
information from the Financial Director, thato@mantengu.com, which
is also available at the Company’s registered office and on
Mantengu’s website at: www.mantengu.com.
No forward looking statements in this announcement have been reviewed
or reported on by the Company’s auditor.
14. RESERVES AND MINERAL RESOURCES
There were no material changes to the reserves and mineral resources
as disclosed in the latest Competent Person’s Report available on
Mantengu’s website at http://www.mantengu.com/cpr.
CORPORATE INFORMATION
Postal address: PO Box 866, Rivonia, 2128
Registered and Physical address: Lower Ground Floor Block F,
Pinmill, 164 Katherine Street, Sandton, Gauteng, 2196
Tel no:+27 (0) 11 036 3100
Fax no:+27 (0) 86 654 6818
Web: www.mantengu.com
Board of Directors: V Madlela*, J Tshikundamalema*, MJ Miller#
(Chairman), MW Movundlela (CEO), TA Makgolane (FD).
(#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: Ngubane & Co (JHB) Inc.
Johannesburg
29 November 2022
Designated Adviser
Merchantec Capital
Date: 29-11-2022 01:34:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
