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TBX - Thabex Limited - Summarised audited results for the year ended 28 February
2010 and notice of the Annual General Meeting
THABEX LIMITED
Incorporated in the Republic of South Africa
(Registration No 1988/000763/06)
Share code: TBX
ISIN: ZAE000013686
("Thabex" or "the Company")
Young Lions Exploring Africa
SUMMARISED AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2010 AND NOTICE OF THE
ANNUAL GENERAL MEETING
Year ended Year ended
STATEMENT OF FINANCIAL POSITION
28 February 28 February
2010 2009
Audited Audited
Notes R`000 R`000
Assets
Non-current assets
18 448 19 403
Plant and equipment
4 209 5 164
Exploration and evaluation
assets 14 239 14 239
Current assets
2 088 1 853
Inventories
1 516 1 215
Short-term trading
investments 33 65
Trade and other receivables
486 493
Short-term loans
- -
Cash and cash equivalents
53 80
Total assets
20 536 21 256
Equity and liabilities
Capital and reserves
Share capital 1
2 399 2 279
Share premium
27 975 27 260
Accumulated loss
(21 493) (20 061)
Equity attributable to equity
holders of the group 8 881 9 478
Non-controlling shareholders`
interest 2 431 -
Total equity
11 312 9 478
Non-current liabilities
1 937 1 968
Loans and borrowings
1 937 1 968
Current liabilities
7 287 9 810
Bank overdraft
- 32
Trade and other payables
3 442 3 029
Short-term loans 2
3 370 5 877
Taxation payable
475 872
Total equity and liabilities
20 536 21 256
Shares in issue 3
239 868 870 227 868 870
Net asset value per share
(cents) 4.72 4.16
Net tangible asset value per
share (cents) (1.22) (2.09)
STATEMENT OF COMPREHENSIVE
INCOME
Revenue
421 282
Cost of sales
(293) (301)
Gross profit/(loss)
128 (19)
Other operating income
4 490 1 070
Administration expenses
(2 579) (1 291)
Other operating expenses
(5 715) (8 028)
Operating loss
(3 676) (8 268)
Finance income
463 5
Finance expenses
(6) (548)
Loss before taxation
(3 219) (8 811)
Taxation
285 -
Loss for the year
(2 934) (8 811)
Other comprehensive income
Net change in fair value of
available for sale
financial assets
82 500
Net change in fair value of
available for sale
financial assets reclassified
to profit or loss (82) (500)
Other comprehensive income for
the year - -
Total comprehensive income and
loss for the year (2 934) (8 811)
Attributable to:
Equity holders of the parent
(1 431) (8 811)
Non-controlling shareholders`
interest (1 503) -
Weighted average of number of
shares in issue 227 901 747 219 303 938
Basic and diluted loss per
share (cents) (0.63) (4.02)
Headline and diluted headline
loss per share (cents) (2.21) (4.18)
RECONCILIATION OF HEADLINE LOSS
Loss attributable to equity
holders of the parent (1 431) (8 811)
Profit on disposal of unlisted
investment - (500)
Profit on disposal of interest
in subsidiaries (3 647) -
Impairment of unlisted
investments - 103
Loss on disposal of plant and
equipment 45 49
Headline loss 4
(5 033) (9 159)
STATEMENT OF CASH FLOWS
Net cash outflow from operating
activities (7 931) (533)
Net cash inflow/(outflow) from
investing activities 4 003 (59)
Net cash inflow from financing
activities 3 933 777
Increase in cash and cash
equivalents 5 185
Cash at beginning of the year
48 (137)
Cash at end of the year
53 48
STATEMENT OF CHANGES IN EQUITY
Share Capital
2 399 2 279
Issue of ordinary shares
120 178
Share capital at the
beginning of the year 2 279 2 101
Share Premium
27 975 27 260
Share premium on issue of
ordinary shares 720 2 602
Share issue expenses
(5) (7)
Share premium at the
beginning of the year 27 260 24 665
Accumulated Loss at the end of
the year (21 492) (20 061)
Loss for the year
(1 431) (8 811)
Accumulated Loss at the
beginning of the year (20 061) (11 250)
Total equity attributable to
the equity holders of the 8 882 9 478
parent
Non-controlling shareholders`
interest 2 430 -
Non-controlling shareholders`
interest 2 430 -
Non-controlling shareholders` - -
interest at the beginning of
the
year
Total equity and liabilities
11 312 9 478
SEGMENTAL ANALYSIS
Total segment assets
Thabex Ltd - exploration and
management services 16 377 20 659
Tradepost 121 (Pty) Ltd -
Monastery kimberlite project 4 791 4 063
Salt River Resources Ltd - base
mineral project 7 356 7 344
Angel Diamonds (Pty) Ltd - Kolo
kimberlite project 1 824 4 726
Minnex Exploration (Pty) Ltd -
alluvial and kimberlite 4 712 4 709
projects
Reportable assets
35 060 41 501
Assets not allocated to
segments 110 284
Consolidation adjustments and
inter-company eliminations (14 634) (20 528)
Total assets
20 536 21 257
Total segment liabilities
Thabex Ltd - exploration and
management services 6 708 9 853
Tradepost 121 (Pty) Lld -
Monastery kimberlite project 2 349 4 616
Salt River Resources Ltd - base
mineral project 159 8 302
Angel Diamonds (Pty) Ltd - Kolo
kimberlite project 413 10 203
Minnex Exploration (Pty) Ltd -
alluvial and kimberlite 564 916
projects
Reportable liabilities
10 193 33 890
Liabilities not allocated to
segments 134 2 676
Consolidation adjustments and
inter-company eliminations (1 103) (24 788)
Total liabilities
9 224 11 778
External revenue
Thabex Ltd
421 282
Finance income
Thabex Ltd
353 1
Salt River Resources Ltd
3 2
Minnex Exploration (Pty) Ltd
107 2
463 5
Finance expense
Thabex Ltd
5 560
Tradepost 121 (Pty) Ltd
- 167
Angel Diamonds (Pty) Ltd
1 -
Minnex Exploration (Pty) Ltd
- 247
Inter-company elimination
- (427)
6 547
Segment loss
Thabex Ltd
(2 319) (7 480)
Tradepost 121 (Pty) Ltd
(530) (516)
Salt River Resources Ltd
(664) (788)
Angel Diamonds (Pty) Ltd
(3 820) (3 242)
Minnex Exploration (Pty) Ltd
(125) (113)
Reportable loss
(7 458) (12 139)
Other subsidiaries
(342) (645)
Consolidation adjustments and
inter-company eliminations 4 124 3 973
Loss before interest and
taxation (3 676) (8 811)
Notes:
1. Thabex issued 12 million ordinary shares at 7 cents per share for the
acquisition of Monastery Holdings (Pty) Ltd for a total consideration of R840
000, effective 28 February 2010. This was not a business combination but an
acquisition of assets and therefore IFRS 3 is not applicable.
2. Short term loans decreased from R5.88 million in 2009 to R3.37 million as a
result of the capitalisation of directors and shareholders loans in Angel
Diamonds (Pty) Ltd ("Angel Diamonds") on 26 February 2010, as approved by the
board of Angel Diamonds on 17 December 2009. The shareholders, represented in
person and by proxy, also approved the special resolution to increase the
authorised share capital of Angel Diamonds on 27 January 2010 during the Annual
General Meeting. The remaining short term loan has been advanced by Dr JA
Cruise, a related party (Non-executive Chairman of Salt River Resources Ltd
("SRR") a subsidiary of Thabex.), who has undertaken not to request repayment
for a period of twelve months from the date of the publication of these
financial results or until such date that the Group`s current assets reasonably
exceed its current liabilities.
3. On 23 April 2010 the Company`s shares were sub-divided in 1 to10 as per the
Special resolution approved on 19
February 2010. The Annual Report for the period under review will contain a
surrender form for non-dematerialised shareholders to exchange their present
share certificates for the new sub-divided share certificate.
4. The decrease in the headline loss of the Group from R9.16 million in 2009 to
R5.03 million in 2010 is due mainly to the sale of the 13.33% of the Company`s
interest in Angel Diamonds to a related party Mantle Diamonds Ltd and the sale
of a 2% interest in SRR to a related party CAJ Trust, of which JA Cruise is a
trustee and he is also director SRR - see note 2 above.
5. The Group has five operating segments, as described below. For each of the
segments the Group`s Chief Executive reviews internal management reports on at
least a monthly basis. The five segments are listed in order of priority for the
Group`s overall operations namely;
Thabex Ltd: Includes exploration and management services to the Group`s
companies.
Tradepost 121 (Pty) Ltd: Includes Monastery Mine (Pty) Ltd and Monastery
Holdings (Pty) Ltd and these companies are involved in the prospecting and
development of Monastery Kimberlite pipe in the district of Marquard in the Free
State Province.
Salt River Resources Ltd: Includes the Salt River base mineral project in the
Northern Cape Province.
Angel Diamonds (Pty) Ltd : Includes the Kolo Kimberlite project in the Mafateng
district of the Kingdom of Lesotho.
Minnex Exploration (Pty) Ltd: Includes the Middelwater alluvial diamonds
project, with a 2,5% royalty agreement on commencement of mining operations, and
the search for primary kimberlite deposits in Northern Namibia.
Review of results
Operating results
The Group incurred a loss for the year of R2.93 million (2009: loss of R8.81
million). The headline loss per share decreased from 4.18 cents per share to
2.21 cents per share and the net asset value of the Group increased from 4.16
cents per share in 2009 to 4.72 cents per share.
Going concern
The Group incurred a net loss of R2.93 million (2009: loss of R8.81 million) for
the year ended 28 February 2010. At that date, the Group`s current liabilities
exceeded its current assets by R5.20 million (2009: current liabilities exceeded
current assets by R7.96 million) (see note 2 above).
The board has considered the ability of the Company and its subsidiaries to
continue as going concerns and based on reasonable and supportable assumptions,
have concluded that the forecast levels of production and the future benefits of
the continuing prospecting operations of Monastery Mine, an indirect subsidiary
of Thabex, will produce sufficient cash flows to allow the Company and its
subsidiaries to meet their obligations in the normal course of business for the
foreseeable future.
Should the operations of the subsidiary fail to achieve forecast cash flows,
there will be a material uncertainty that may cast doubt on the ability of the
Company and its subsidiaries to continue as going concerns. The cash flow
assumptions are based on a production rate of 10 000 tons per month at an
average grade of 25cpht (carats per hundred tons) and a conservatively modelled
rough diamond price of US$150/ct and an exchange rate of R/US$7.00.
Contingent liabilities
During the period ended 28 February 2009, the Company reported a contingent
liability of R5.81 million against possible legal action from Mantle Diamonds
Ltd ("Mantle Diamonds") for expenditure incurred by that company for their own
account and risk on the Kolo Kimberlite project in Angel Diamonds (Pty) Ltd
("Angel Diamonds"). Since Mantle Diamonds withdrew from the Kolo Kimberlite
project on 14 November 2009 and also declined to respond to the legal disputes
between the major and minority shareholders of Angel Diamonds in which they were
cited as respondents, the possibility for a liability has diminished to such an
extent that Thabex`s board do not consider there to be a likelihood of success
by Mantle Diamonds should they institute a claim especially as Mantle Diamonds
did not oppose the liquidation application of Angel Diamonds.
As approved by the board of Angel Diamonds on 17 December 2009, the company was
re-capitalised utilising loan account balances and other amounts owing to the
shareholders of Angel Diamonds by both Angel Diamonds and Thabex. Certain of the
minorities representing R1.3 million of the amounts capitalised are disputing
the re-capitalisation.
Basis of preparation
These Thabex Limited Group ("the Group") financial results for the year ended 28
February 2010 constitute a summary (prepared in accordance with the JSE Listings
Requirements, the South African Companies Act (Act 61 of 1973) as amended, and
the recognition and measurement requirements of International Financial
Reporting Standards and the presentation and disclosure requirements of
International Accounting Standard 34 Interim Financial Reporting (IAS 34) and
the AC 500 interpretations as issued by the Accounting Profession Council of the
South African Institute of Chartered Accountants) of the Group`s audited
financial statements. The Group has applied the IFRS`s applicable to the year
ended on 28 February 2010 and have not early adopted any new or revised
standards applicable after that date.
These summarised consolidated financial statements do not include all of the
information required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group as at and
for the year ended 28 February 2010.
The accounting policies applied by the Group in these summarised consolidated
financial statements are consistent with those applied in the previous year.
Dividends
No dividend has been declared in the 2010 financial year (2009: nil).
Audit opinion
This announcement has been audited by the Company`s auditors, KPMG Inc., The
Company`s auditors have expressed a disclaimer of opinion on the going concern
assumption on the consolidated financial statements of the Group as at and for
the year ended 28 February 2010, from which these results have been derived. The
audit reports on the consolidated annual financial statements and these summary
results are available for inspection at the Company`s registered office. The
disclaimer of opinion on the consolidated annual financial statements is set out
below:
"Basis for Disclaimer of Opinion
The going concern note in the director`s report indicates that the board has
considered the ability of the company and its subsidiaries to continue as going
concerns and, based on reasonable and supportable assumptions, have concluded
that the forecast level of production and future benefits of the continuing
prospecting operations of Monastery Mine (Pty) Ltd, a subsidiary, will produce
sufficient cash flows to allow the company and its subsidiaries to meet their
obligations in the normal course of business for the foreseeable future. We were
unable to obtain sufficient appropriate audit evidence to satisfy ourselves that
the assumptions applied by the board in preparing the going concern assessment
are reasonable and supportable. The possible effects of this matter are
considered material and pervasive to the financial position, financial
performance and cash flows of the company and its subsidiaries reflected in
these financial statements.
Disclaimer of Opinion
Because of the significance of the matter described in the Basis for Disclaimer
of Opinion paragraph, we have not been able to obtain sufficient appropriate
audit evidence to provide a basis for an audit opinion. Accordingly, we do not
express an opinion on the financial statements."
Commentary
Diamonds in the Kingdom of Lesotho
Angel Diamonds submitted an application for a Mining License ("ML") to the
Commissioner of Mines in Lesotho on 12 December 2008. As in the case of many
exploration projects, when value is unlocked and prior to mining operations
commencing, the expectations of possible vast amounts to be made from such a
project overcomes the agreed process to achieve the gains for shareholders and
personal greed takes over. Having reported the legal matters regarding Angel
Diamonds in detail on SENS. The Liquidation Application on 8 October 2010 by Mr
TP Mosebo, a director of Angel Diamonds, was today discharged with costs and
Thabex has requested a meeting with the provisional liquidators to re-take
control of Angel Diamonds.
The most disturbing aspect of the legal route taken by three minority
shareholders is the fact that neither these minority shareholders, the
provisional liquidators nor the Commissioner of Mines and Geology of Lesotho are
able or willing to account for the 1 000 carats produced during the period
Mantle Diamonds was involved in the project. Mantle Diamonds terminated their
involvement in the project on 14 November 2009. However, their 10 tph (tons per
hour) DMS (Dense Medium Separator) prospecting plant remains on site at Kolo Ha
Petlane to date. Mantle Diamonds, as a respondent in all the High Court cases in
the Kingdom of Lesotho, have not opposed any of these cases, including the
application to liquidate Angel Diamonds.
Diamonds in South Africa
Minnex Exploration (Pty) Ltd ("Minnex")
Minnex has curtailed all exploration of the alluvial diamondiferous gravels on
the Farm Middelwater Remaining Extent about 40km north of Prieska in the
Northern Cape Province.
Monastery Mine (Pty) Ltd ("Monastery")
Monastery is situated about 15km south of the town of Marquard in the Free State
Province. Prospecting activities have so far consisted of sampling, analysis and
metallurgical test work to decrease the amount of ilmenite in the concentrate of
the kimberlite with a Dense Medium Separator plant. Monastery is also operating
a 10 Foot Rotary Gravity Pan processing operation on various diamondiferous
dumps around the open pit and plant areas Shareholders are also referred to the
SENS announcements relating to the acquisition of the Monastery Holdings, dated
25 February 2010 and the appointment of a processing contractor on 21 February
2011, respectively.
Diamonds in Namibia
Minnex Exploration Namibia (Pty) Ltd ("Minnex Namibia") (an 80% subsidiary of
Minnex Exploration (Pty) Ltd)
Minnex will re-evaluate the unresolved anomalies of the percussion drilling
results reported by Namdeb prior to the prospecting rights to the two Exclusive
Prospecting License areas expiring in July 2011.
Directorate
The following changes to the board of Thabex occurred during the period under
review, up to and including the date of this report:
Mr Johannes Cornelius Engelbrecht was appointed as an executive director on 23
June 2009, and resigned on 15 April 2010;
Mr Masankisi Kamwanga was appointed as the executive financial director on 29
June 2009; and
Mr Joseph Ratchidi was appointed as an executive director on 14 May 2010.
Subsequent events
On 7 November 2010, a minority shareholder of Angel Diamonds, Mr CV du Plessis
("the Applicant") holding 4.33% of the issued share capital, applied for the
liquidation of Thabex. Refer to the SENS announcements in this regard for
further detail. Other than this matter and the information disclosed in the
Commentary paragraph above relating to the diamonds in the Kingdom of Lesotho
and the Monastery Mine, the board of Thabex is not aware of any material events
or circumstances that have occurred between the end of the 2010 financial year
and the date of this report, which may have a material impact on the Group.
Future prospects
Further metallurgical testing at Monastery is necessary to ensure the turning to
account of this project. SRR is conducting a pre-feasibility study of the Salt
River Base Mineral Project. SRR has not been able to secure funding to complete
a Bankable Feasibility Study of its poly-metallic (Cu-Pb-Zn-Ag-Au) project in
the Kenhardt district of the Northern Cape Province and is considering several
funding options to proceed. Save for the termination of prospecting of
diamondiferous alluvials in the Northern Cape and the litigation regarding the
granting of the Mining License in the Kingdom of Lesotho, no other changes in
the mineral information of the Company have occurred during year under review.
Notice of annual general meeting
Notice is hereby given that the annual general meeting of shareholders of Thabex
will be held on Wednesday, 27 July 2011 at 10:00 at KPMG Forum, 1226 Schoeman
Street, Hatfield, Pretoria, 0083 to conduct the business stated in the notice of
the annual general meeting, which is contained in the annual report.
On behalf of the board
Jeffrey Raymond Rapoo
Chairman
Marius Welthagen
Chief Executive
Johannesburg
19 May 2011
Registered office:51 Austin Street, Northcliff, Johannesburg, 2195
Auditors: KPMG Inc. KPMG Forum, 1226 Schoeman Street, Hatfield, Pretoria, 0083
Company secretaries: SA Mineral Investments (Pty) Ltd
51 Austin Street, Northcliff, Johannesburg, 2195
Transfer secretaries: Link Market Services South Africa (Pty) Ltd
11 Diagonal Street, Johannesburg, 2001
Telephone number: +27 11 678 0791
Website: www.thabex.com
E-mail: info@thabex.com
Sponsor:
Merchantec Capital, 2nd Floor, North Block, Hyde Park Office Tower, Corner 6th
Rd and Jan Smuts Ave, Hyde Park
Directorate: JR Rapoo (Chairman), M Welthagen (CEO)*, Dr JW Kruger#, M Kamwanga
(Financial Director)*##, RM Ratchidi*, Prof DL Reid**, AP Roux
*Executive director, #Independent director, ** New Zealand, ##Democratic
Republic of the Congo
Date: 19/05/2011 17:40:15 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department.
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