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PETRA MINING LIMITED - PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2004 PETRA MINING LIMITED (Incorporated in the Republic of South Africa) (Registration number 1972/001062/06) Share code: PET ISIN: ZAE000010237 ("Petmin" or "the company") PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2004 Abridged Income Statements Reviewed Audited Year ended Year ended 30 June 2004 30 June 2003 R"000 R"000
Turnover 2 514 14 966 Net operating (loss)/profit (22) 11 416 Profit on sale of subsidiary - 514 271 Net (loss)/profit before taxation (22) 525 687 Taxation (216) 67 499 Net (loss)/profit after taxation (238) 458 188 Shares in issue ("000) 97 000 80 000 Weighted average share in issue ("000) 87 083 80 000 Earnings per ordinary share: Net (loss)/profit attributable to ordinary shareholders (238) 458 188 (Loss)/Earnings per share (cents) (0.27) 572.70 Headline (loss)/earnings per share: Net (loss)/profit attributable to ordinary shareholders (238) 458 188 Exceptional item - (514 271) Capital Gains Taxation - 6 428 Secondary Taxation on Companies - 57 647 (238) 7 992 Headline (loss)/earnings per share (cents) (0.27) 10.00 Dividends per ordinary share: Dividends paid - 472 000 Dividends paid per ordinary share (cents) - 590 Abridged Balance Sheets Reviewed Audited 30 June 2004 30 June 2003 R"000 R"000 ASSETS Non-current assets Investments - - Current assets 32 230 37 478 Receivables and pre-payments 759 673 Cash resources 31 471 36 805 Total assets 32 230 37 478 EQUITY AND LIABILITIES Capital and reserves 25 104 26 392 Issued share capital 24 250 20 000 Share premium 937 87 Non-distributable reserve - 6 000 Fair value reserve (6 150) - Retained earnings 6 067 305 Current liabilities 7 126 11 086 Trade and other payables 976 1 233 FEC liability 6 150 - Taxation (note 3) - 9 853 Total equity and liabilities 32 230 37 478 Abridged Cash Flow Statements Reviewed Audited
Year ended Year ended 30 June 2004 30 June 2003 R"000 R"000 Net cash flows from operating activities (581) (612 442) Cash generated from sale of subsidiary - 514 271 Decrease in other investments - 141 404 Proceeds from share issue 5 100 - Taxation paid (9 853) (6 428) Net movement in cash (5 334) 36 805 Cash at beginning of year 36 805 - Cash at end of year 31 471 36 805 Abridged Statements of Changes in Equity Share Share R"000 capital premium Reserves Balance at 1 July 2002 20 000 101 287 6 000 - Net profit for year - - - - Dividends paid - - - - Reduction in share premium - (101 200) - Balance at 30 June 2003 20 000 87 6 000 Balance at 1 July 2003 20 000 87 6 000 - Shares issued during year 4 250 850 - - Transfer to retained earnings - - (6 000) - Cash flow hedges, net fair value gains, net of taxes - - - - Net loss for year - - - Balance at 31 December 2003 24 250 937 - Fair value Retained
R"000 reserve earnings Total Balance at 1 July 2002 - 14 117 141 404 - Net profit for year - 458 188 458 188 - Dividends paid - (472 000) (472 000) - Reduction in share premium - - (101 200) Balance at 30 June 2003 - 305 26 392 Balance at 1 July 2003 - 305 26 392 - Shares issued during year - - 5 100 - Transfer to retained earnings - 6 000 - - Cash flow hedges, net fair value gains, net of taxes (6 150) - (6 150) - Net loss for year - (238) (238) Balance at 31 December 2003 (6 150) 6 067 25 104 COMMENTS 1. Accounting policy This report has been prepared in terms of South African Statements of Generally Accepted Accounting Practice (GAAP) and is consistent with those applied in the financial statements for the year ended 30 June 2003. 2. Review of results The preliminary results of the company as set out above have been reviewed by the company"s auditors, PricewaterhouseCoopers Inc., as required by the JSE Securities Exchange South Africa ("JSE"). The review report is available for inspection at the company"s registered address. The comparative figures show the sale of Petmin"s operating subsidiaries, which were sold effective 30 September 2002, as an exceptional item. The current period results disclose the results of the operations of Petmin as a cash company with the turnover being only interest earned, and which has resulted in the large decrease in earnings per share between the current year and the comparative year. On 13 May 2004 the company entered into a Forward Exchange Contract ("FEC") to buy 7,5 million at a forward rate of R8.40 to the Euro, amounting to R63 million. The contract was entered into in fulfilment of one of the conditions precedent to the acquisition of SamQuarz (see 3.3 below). The FEC was fair valued on 30 June 2004 and a corresponding liability of R6,150 million was raised against fair value reserves. The full amount of R6,150 million will be transferred from the fair value reserves and will be capitalised against the cost of SamQuarz once the transaction has been closed. 3. Review of operations 3.1 Change in control and strategic positioning On 20 November 2003 the company announced that Midnight Storm Investments 34 (Pty) Limited ("Storm") acquired a 41.69% interest in the company at 30 cents per share. This acquisition of shares constituted an affected transaction in terms of the Securities Regulation Code on Mergers and Acquisitions and, as a result, Storm was required to make a mandatory offer to all shareholders of the company at 30 cents per share. The offer opened on Monday, 15 December 2003 and closed on Wednesday, 21 January 2004 and details of the offer were sent to shareholders in a circular dated 12 December 2003. Following the offer to shareholders and the annual general meeting held on 30 January 2004, four new directors were appointed to the board of Petmin, Storm became a major shareholder of Petmin and PSG Capital Limited acquired a 20% interest in the company. As stated in the announcement to shareholders on 18 November 2003, the company refocused its business to create shareholder value by pursuing mining exploration and development projects in Southern Africa which: * emerging previously disadvantaged entrepreneurs participate in a substantial and meaningful way; * the full set of criteria contained in the Mining Charter Scorecard are pursued progressively;
* access to international equity capital is optimally leveraged to enhance project economics. 3.2 Specific issue of shares for cash At the annual general meeting of the company held on 30 January 2004, the requisite majority of shareholders approved an ordinary resolution authorising the directors to issue 20 million shares to PSG Capital Limited in accordance with the Listings Requirements of the JSE. A final number of 17 million par value ordinary shares at 30 cents each were issued to PSG Capital Limited, which amounted to cash proceeds of R5,1 million to Petmin. The 17 million new shares represented a 21.25% increase in the issued share capital of the company and the requisite disclosure was made in Petmin"s interim results for the six months to 31 December 2003. The JSE granted a listing of the new shares with effect from the commencement of business on Monday, 23 February 2004. 3.3 Acquisition of SamQuarz (Pty) Limited ("SamQuarz") In pursuit of its newly stated objectives as detailed in 3.1 above, Petmin entered into agreement with Quarzwerke GmBH for the acquisition of SamQuarz who owns the largest high quality and cash generative silica mine in South Africa. The transaction was announced in the press on 25 March 2004 and at year-end the only condition precedent still outstanding is formal approval from the Petmin shareholders in general meeting. A majority of Petmin shareholders have already given their irrevocable undertaking to Petmin to vote in favour of the transaction. A circular to shareholders containing full details of the acquisition of SamQuarz is currently being finalised and will be sent to shareholders within the next two weeks. 4. Future prospects Having gone through a year of restructuring, the board is looking forward to continue expanding on Petmin"s newly stated strategy. The acquisition of SamQuarz represents the first significant step in this direction and, once the transaction has closed, the board intends to pursue a number of opportunities to enhance shareholder value. On behalf of the board P J Nel D H Warmenhoven Non-Executive Chairman Chief Executive Officer 18 August 2004 Pretoria Directors P J Nel (Non-executive Chairman) D H Warmenhoven (Chief Executive Officer) J A Strijdom, J P Mabena, L Mogotsi, E de V Greyling Registered Office Parc Nouveaux, First Floor, Block C 225 Veale Street, Brooklyn, Pretoria, 0002 (PO Box 899, Groenkloof, 0027) Secretary and Sponsor River Sponsors (Pty) Limited Transfer Secretaries Computershare Investor Services 2004 (Proprietary) Limited Auditors: PricewaterhouseCoopers Inc. Date: 19/08/2004 04:49:19 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
