SNU - Sentula Mining Limited - Trading statement

SNU - Sentula Mining Limited - Trading statement                                
Sentula Mining Limited                                                          
Incorporated in the Republic of South Africa                                    
(Registration number 1992/001973/06)                                            
Share code: SNU     ISIN: ZAE000107223                                          
("Sentula" or "the Company" or "the Group")                                     
TRADING STATEMENT                                                               
In terms of the Listings Requirements of JSE Limited, companies are required to 
publish a trading statement as soon as they become reasonably certain that the  
financial results for the period to be reported on next will differ by more than
20% from the previous corresponding period.                                     
A review of the financial results for the year ended 31 March 2011 by the       
Company, has indicated that earnings per share ("EPS") is expected to be at     
least 6 cents, and headline earnings per share ("HEPS") is expected to be at    
least 16 cents. EPS and HEPS for the 2010 financial year were 55.8 cents and 0.6
cents, respectively.                                                            
The substantial increase in Group HEPS for the 2011 financial year resulted from
Megacube Mining returning to operational profitability in the second half of the
financial year and most of the Group`s subsidiaries experiencing real growth in 
business volumes.                                                               
The reduction in EPS, relative to the prior year, is primarily as a result of:  
1    Inclusion of the profits realised on the sale of the Company`s interest in 
    the Koornfontein mine in the 2010 comparative figures; and                  
2    A pre-tax impairment charge of R71 million, included in the 2011 results.  
Results for the financial year ended 31 March 2011 were also adversely impacted 
by the following:                                                               
1    With the Group`s new debt facility becoming effective in February 2011,    
unamortised pre-tax fees of R29 million had to be expensed in the year      
    under review. These fees were incurred in September 2009 when the Group`s   
    senior debt facility of R1.5 billion was rescheduled;                       
2    The persistently strong exchange rate impacted Geosearch`s foreign         
operations, and pre-tax foreign currency losses of R17 million were         
    recognised, of which R14 million remained unrealised at year end;           
3    Political unrest in the Ivory Coast, which resulted in Geosearch suspending
    mobilisation on a substantial drilling contract;                            
4    Operating losses still being incurred by Megacube Mining during the first  
    half of the financial year as this business terminated loss making          
    contracts;                                                                  
5    The suspension of opencast mining operations at Nkomati Anthracite due to  
regulatory and environmental issues; and                                    
6    Forensic and legal fees of R7 million, pre-tax, associated with the civil  
    and criminal actions instituted against members of previous management.     
Operations                                                                      
The year was characterised by tough trading conditions as the opencast mining   
businesses experienced margin pressures. Megacube Mining however returned to    
operational profitability in the second half of the financial year as the       
business terminated loss making contracts and improved operational efficiencies.
Margins are expected to improve in the 2012 financial year as contracts are     
renegotiated based on an improving demand for mining services.                  
The persistently strong exchange rate impacted adversely on Geosearch`s revenue 
and margins, and political unrest in the Ivory Coast resulted in the suspension 
of operations in that jurisdiction. With stability returning to the Ivory Coast,
drilling operations will recommence in the second quarter of the 2012 financial 
year.                                                                           
Despite a new order mining right being granted to Nkomati Anthracite during the 
past year and the mine commencing opencast operations in September 2010, these  
operations were suspended in March 2011 as a result of further regulatory and   
environmental issues. While these issues are being resolved, the underground    
operations have been placed on care and maintenance with effect from the end of 
May 2011.                                                                       
Impairment charge:                                                              
The Group`s fleet of plant and equipment is independently valued on an annual   
basis and the fleet of CAT 785 dump trucks were impaired by R62 million, pre-   
tax, as a consequence of the large variance between the carrying value of these 
items of plant and their market value. These items of plant and equipment were  
acquired in 2007 at the peak of the commodity cycle and at a time when the      
exchange rate was materially weaker than the prevailing rates in the period     
under review. The intention is to refurbish this fleet over the next twelve to  
eighteen months in support of the Group`s generic growth aspirations. The       
remainder of the impairment charge of R9 million related to the impairment of   
certain items of non-core plant and equipment.                                  
Progress on legal matters:                                                      
Following the announcement on 26 November 2010 of the civil judgment of R88     
million against Casper Scharrighuisen, a second judgment for R171 million and   
interest thereon of R124 million was obtained in a civil action against         
Scharrighuisen on 6 May 2011, bringing the total civil judgments against him to 
R383 million. An order for the provisional sequestration of Scharrighuisen`s    
estate was granted on 20 May 2011 in the Western Cape High Court. The Company   
continues to support the National Prosecuting Authority in the criminal actions 
against Scharrighuisen and Jason Holland as a consequence of the                
misappropriation of funds from Megacube Mining in the 2008 financial year.      
With the granting of the provisional sequestration order against Scharrighuisen,
the Company`s legal and forensic fees should reduce materially in the 2012      
financial year. During the financial year under review, interim distributions of
R10 million were received from Mr Holland`s sequestrated estate.                
The financial information, on which this trading statement is based, has not    
been reviewed or reported on by Sentula`s auditors. Sentula`s financial results 
are expected to be released on or about 15 June 2011.                           
Johannesburg                                                                    
31 May 2011                                                                     
Sponsor                                                                         
Merchantec Capital                                                              
Financial Communications                                                        
College Hill                                                                    
Date: 31/05/2011 15:14:02 Supplied by www.sharenet.co.za                     
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