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PLL - Platfields Limited - Unaudited Condensed Consolidated Interim Results for
the six months ended 31 August 2011
Platfields Limited
Incorporated in the Republic of South Africa
(Registration number 2002/005851/06)
Share code: PLL ISIN: ZAE000151825
("Platfields" or "the Company" or "the Group")
Unaudited Condensed Consolidated Interim Results for the six months ended 31
August 2011
COMMENTARY
Introduction
Subsequent to the listing of Platfields in December 2010 on the JSE main board,
the Company has largely focused itself on external growth opportunities and
leveraging of its listed status through systematic assessment and evaluation of
potential acquisitions of operational assets to improve its performance and
enhance shareholder returns.
Listing and share price performance
Since listing, the share price has declined to levels well below the Company`s
intrinsic value. The current share price levels are not representative of the
value in Platfields and management is hopeful that as the markets improve, so
will the market valuation of the Company. This decline is in line with sector
sentiment and the performance of most platinum stocks in the wake of the
financial turmoil in the European Union, the volatility of metal prices and the
Japanese earthquake and its effects on auto catalytic converter demand.
Whilst the Platfields share price decline is not unique for the sector, it is
particularly challenging for the Platfields fund-raising strategy due to its
dilutive potential.
Exploration and resources
Platfields has commissioned Minxcon (Proprietary) Limited to carry out desktop
mine design and life of mine plan for its Leeuwkop Project located in Limpopo
Province.
The preliminary key results:
- toll treatment agreements will be negotiated with near operators so that no
concentrator will be commissioned on site;
- an underground design with a production rate of 100 000 tonnes per month is
potentially viable;
- a twin decline system will be developed from surface with access cross-cuts
developed on the levels to access the ore body; and
- the mining method will be conventional scattered breast stoping.
The profile for life of mine evidences the following:
- a total of 8,545 kt of Merensky reef tonnes are planned at an average grade of
4.06 g/t;
- a total of 13,442 kt of UG2 reef tonnes are planned at an average of 3.53 g/t;
- a total of 34,722 kg Merensky content and 47,398 kg of UG2 content is planned;
and
- a grand total of 21,988 kt of reef tonnes are planned at an average grade of
3.73 g/t, resulting in 82,120 kg of content.
Focus for the period will be on firming up the mine plans and raising capital to
further the understanding of the extent of the ore body over Leeuwkop.
Financial and operational review
Platfields as an exploration group, is not yet cash-generative, and therefore no
cash revenue is reported for the current year and no revenue is expected for the
next financial year.
The Group made a net loss for the period of R6 million compared to a loss of R78
million for the same period 2010. The major decrease in the reported loss is
that there has been no further material impairments to Platmile portion of the
Berg Project. Also, the Group`s BEE share scheme has been finalised and
implemented.
Funding and going concern
As the Group is not yet in a cash-generating position, its exploration programme
is still funded by equity. The Group is currently raising capital in order to
complete its exploration programme on the Leeuwkop Project. Directors draw your
attention to the fact that the Company`s future prospects and stability relies
on its ability to raise capital for the ensuing year.
Subsequent events
As published on SENS dated 26 September 2011, Platfields and Anglo American
Platinum Limited settled the pending litigation over "competing" prospecting
right on the basis that the Department of Mineral Resources will execute a
prospecting right in favour of Platfields over a portion of Farm Tigerpoort
which excludes the competing area.
Mineral assets
The Platfields Mineral Resource Statement prepared by the Independent Competent
Person is contained in the 2011 Annual Report. No material changes have occurred
since the date of that report.
Mineral assets valuation
Over the past 12 months, the prices of Platinum Group Metals ("PGM") continued
to rise, but started stabilising in the second quarter of 2011. The platinum
price rose steadily month on month, rising above USD1,800/oz. in February 2011.
Thereafter, the price returned to average USD1,770/oz. over the second quarter
of 2011.
The price of palladium has risen sharply over the last 12 months reaching
consecutive record highs, peaking in February 2011. The price of rhodium also
peaked in February 2011, and has remained fairly steady in the first quarter of
2011.
Although the Rand remained stable for the first half of the year, it started to
weaken towards the end of 2011.
The USD basket price increased between 13% to 18% year on year, depending on the
PGM prill splits of the specific area of both Berg and Liger. Due to the
stronger Rand/USD exchange rate, the Rand basket price remained subdued. These
elements have influenced the updated valuation estimates.
Platfields` prospects are valued at highly conservative levels. Liger Project
value is currently estimated at R88 million compared to R112 million the
previous reported period. Berg Project value is currently estimated at R101
million compared to R116 million the previous reported period. The current
understanding of the nature and extent of the Berg poses development uncertainty
at current economic studies whilst Liger remains a viable prospect.
Prospects
Platfields is confident that it will raise sufficient capital to complete its
exploration programmes.
Platfields` primary focus in the immediate future will be on raising capital,
and conducting additional exploration in relation to the Liger Project, and in
particular the Leeuwkop portion of Liger, in respect of which it holds a valid
new order prospecting right. Thereafter it intends to conduct mining studies
over certain portions of Leeuwkop, with the goal of proceeding to potential
mining applications in the short to medium term. A mining right application is
currently being considered in the short term. As noted above, the Tigerpoort
portion of the Liger Project is a longer-term extension, enhancing Leeuwkop as
it forms a natural extension to the mineralised area.
Naturally as a listed company with tradable shares, Platfields is currently
embarking on seeking strategic alliances and acquisitions of cash-generative
junior prospects in the metals sector.
The Berg Project is a secondary consideration, with the future focus in respect
of this project being on the Aquidus and Draaikraal properties that border
Northam Platinum Limited`s Booysendal mine. Platfields also applied for an
additional prospecting right over portions 4, 5 and 39 of portion 27 of the Farm
Kliprivier 73 JT, which, if granted, will enhance the Berg Project and its
pipeline. Platfields is working to improve this project to enable a potential
standalone future mining operation.
Signed on behalf of the board:
JT Motlatsi DB Mbindwane
Chairman Chief Executive Officer
Cape Town 28 November 2011
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 August 2011 31 August 2010 28 February 2011
Figures in Rand (Unaudited) (Unaudited) (Audited)
ASSETS
Non-current assets
Exploration assets 56,690,146 16,690,147 56,690,146
Current assets
Other receivables 98,646 1,029,410 132,786
Cash and cash
equivalents 12,562,392 27,623,713 19,574,675
12,661,038 28,653,123 19,707,461
TOTAL ASSETS 69,351,184 45,343,270 76,397,607
EQUITY AND LIABILITIES
Equity
Share capital 7,896 6,542 7,896
Share premium 235,752,629 236,012,629 235,752,629
Share-based payments
reserve 65,605,904 72,575,301 65,605,904
Accumulated
comprehensive loss (267,349,140) (266,550,522) (261,486,864)
34,017,289 42,043,950 39,879,565
Non-current liability
Long-term liability 33,423,113 - 31,983,840
Current liabilities
Current portion of
long-term liability - - 2,000,000
Trade and other payables 1,910,782 3,299,320 2,534,202
1,910,782 3,299,320 4,534,202
TOTAL EQUITY AND
LIABILITIES 69,351,184 45,343,270 76,397,607
Net asset value per
share (cents) 4 9 5
Net tangible asset value
per share (cents) (3) 6 (2)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share-based
Total share payments
capital reserve
Figures in Rand
Balance at 28 February 2010 236,017,175 48,423,898
Changes in equity:
Issue of shares 1,496 -
Share-based payments 500 (500)
BEE share scheme (fair value) - 24,151,903
Total comprehensive loss for the period - -
Total changes 1,996 24,151,403
Balance at 31 August 2010 236,019,171 72,575,301
Changes in equity:
Issue of shares 1,354 -
Share issue expenses (260,000) -
BEE share scheme (fair value) - (7,291,327)
Share-based payments (fair value) - 321,930
Conversion to ordinary shares - -
Total comprehensive loss for the period - -
Total changes (258,646) (6,969,397)
Balance at 28 February 2011 235,760,525 65,605,904
Changes in equity:
Total comprehensive loss for the period - -
Balance at 31 August 2011 235,760,525 65,605,904
Total
attributable
Accumulated to equity
loss holders
Figures in Rand
Balance at 28 February 2010 (188,455,782) 95,985,291
Changes in equity:
Issue of shares - 1,496
Share-based payments - -
BEE share scheme (fair value) - 24,151,903
Total comprehensive loss for the period (78,094,740) (78,094,740)
Total changes (78,094,740) (53,941,341)
Balance at 31 August 2010 (266,550,522) 42,043,950
Changes in equity:
Issue of shares - 1,354
Share issue expenses - (260,000)
BEE share scheme (fair value) - (7,291,327)
Share-based payments (fair value) - 321,930
Conversion to ordinary shares - -
Total comprehensive loss for the period 5,063,658 5,063,658
Total changes 5,063,658 (2,164,385)
Balance at 28 February 2011 (261,486,864) 39,879,565
Changes in equity:
Total comprehensive loss for the period (5,862,276) (5,862,276)
Balance at 31 August 2011 (267,349,140) 34,017,289
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months Six months Year
ended ended ended
31 August 2011 31 August 2010 28 February 2011
Figures in Rand (Unaudited) (Unaudited) (Audited)
Operating activities (5,012,283) (10,288,132) (18,078,524)
Investing activities - - (40,000,000)
Financing activities (2,000,000) 1,496 39,742,850
Total movement (7,012,283) (10,286,636) (18,335,674)
Cash at the beginning
of the period 19,574,675 37,910,349 37,910,349
Total cash at the end
of the period 12,562,392 27,623,713 19,574,675
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months Six months
ended ended Year ended
31 August 2011 31 August 2010 28 February 2011
Figures in Rand (Unaudited) (Unaudited) (Audited)
Exploration expenditure (392,107) (2,037,639) (1,721,946)
Administration
expenditure (4,636,073) (5,941,151) (14,776,501)
Operating loss (5,028,180) (7,978,790) (16,498,447)
Interest and investment
income received 605,177 1,431,585 2,189,034
Loss from operations (4,423,003) (6,547,205) (14,309,413)
Impairment - (47,395,632) (47,395,633)
BEE share transaction
(fair value) - (24,151,903) (17,020,266)
Notional interest (1,439,273) - 6,016,160
Share-based payments
(fair value) - - (321,930)
Loss for the period/Total
comprehensive loss for
the period (5,862,276) (78,094,740) (73,031,082)
Loss per ordinary share
(cents) 0.74 14.11 10.97
Headline loss per
ordinary share (cents) 0.74 5.55 3.85
Diluted loss per
ordinary share (cents) 0.74 13.84 10.96
Diluted headline loss
per ordinary share (cents) 0.74 5.44 3.85
NOTES
1. Basis for preparation and accounting policies
This report has been prepared in compliance with International Accounting
Standards (IAS 34: Interim Financial Reporting), the AC 500 Standards, the
Companies Act, 2008 (71 of 2008) and the Listings Requirements of JSE Limited.
The accounting policies applied in preparing this report, which are based on
reasonable judgements and estimates, are in accordance with International
Financial Reporting Standards ("IFRS") and are consistent with those applied in
the previous audited annual financial statements for the year ended 28 February
2011. The condensed consolidated financial statements have been prepared on the
historical cost basis, unless otherwise stated.
These interim financial statements have been prepared by Annelise Cilliers,
CA(SA).
The interim results have not been reviewed by the Company`s auditors.
31 August 2011 31 August 2010 28 February 2011
Figures in Rand (Unaudited) (Unaudited) (Audited)
2. Exploration assets
The Berg Project
(at fair value) 12,830,255 60,225,888 12,830,255
The Leeuwkop Project
(at cost) 42,359,891 2,359,891 42,359,891
The Marula Project
(at cost) 1,500,000 1,500,000 1,500,000
56,690,146 64,085,779 56,690,146
Impairments - The Berg
Project - (47,395,632) -
56,690,146 16,690,147 56,690,146
Projects
2.1 The Berg Project
Prospecting rights for Platinum Group Metals ("PGM") in the Eastern Limb of the
Bushveld Complex in Mpumalanga, South Africa.
The Berg Project comprises three contiguous farms, Kliprivier, Klipbankspruit
and Hoek van Holland. Platfields holds its propecting rights directly and under
its subsidiary Platinum Mile Investments 359 (Proprietary) Limited ("Platmile")
and through a prospecting contract with Aquidius CC.
The current value of the Berg Project as a whole is estimated at R101 million.
2.2 The Leeuwkop Project
The Leeukop Project consists of a single order prospecting right over the Farm
Leeuwkop 425 KS which is situated in the Sekhukhune Magisterial District in
Limpopo Province, South Africa. The prospecting right is for PGM at the north-
western end of the Eastern Limb of the Bushveld Complex. The current value of
the Leeuwkop Project is estimated at R88 million.
2.3 The Marula Project (formerly the Grootfonteinberg Project)
The Marula Project is a gold target in the Transvaal Drakensberg Goldfield.
The Marula Project consists of a new order prospecting right over four farms in
the Magisterial District of Pilgrim`s Rest in Mpumalanga Province, South Africa.
The four properties are Lisbon 531 JT, Ceylon 197 JT, Little Joker 157 JT and
Grootfonteinberg 561 KT. There is an overlapping right over the Grootfonteinberg
561 KT portion of the prospecting area. Platfields remains confident that the
dispute will be resolved with the DMR and the third party concerned.
The current value of the Marula Project is estimated at R1,5 million.
2.4 Impairment
There have been no futher impairments during the period under review.
3. Six months Six months
ended ended Year ended
31 August 2011 31 August 2010 28 February 2011
Loss per share (Unaudited) (Unaudited) (Audited)
The reconciliation of
headline loss and loss:
The calculation of
headline loss per share
is based on a loss of:
Attributable loss
after tax 5,862,276 78,094,740 73,031,082
Impairment of
exploration assets - (47,395,632) (47,395,633)
Headline loss 5,862,276 30,699,108 25,635,449
The headline loss per
share as reported
in 2010 did not take
into account the
impairment of the
exploration assets in
terms of IFRS 6. As a
result of this omission
the headline loss
per share for 2010 has
been restated.
The calculation of loss
per share is based on:
Weighted number of
ordinary shares in issue 789,519,813 553,407,693 665,608,856
The diluted loss and
diluted headline
loss per share is based on:
Weighted number of
ordinary shares in issue 790,279,443 564,407,693 666,291,294
4. Dividends
No dividends were declared or paid to shareholders during the interim period.
Directors
The directors in office during the financial period under review were: James
Thokoana Motlatsi, Derrick Bongani Mbindwane, Annelise Cilliers, Neville
Hawthorn Cornish (retired 4 March 2011), Roy Stavely Traviss, Ulrich
Schackermann (resigned 29 March 2011), Seth Malefetsane Radebe (appointed 5 May
2011).
Registered Office
7th Floor, Reserve Bank Building, 60 St Georges Mall, Cape Town, 8001 (PO Box
51949, Waterfront, 8002).
Transfer Secretaries
Computershare Investor Services (Proprietary) Limited, 70 Marshall Street,
Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
Sponsor
Merchantec Capital was appointed as sponsor on 7 July 2011.
Company Secretary
Merchantec (Proprietary) Limited was appointed on 31 July 2011 as the Company
Secretary. Probity Business Services (Proprietary) Limited resigned on the same
date.
www.platfields.co.za
Date: 28/11/2011 15:14:09 Supplied by www.sharenet.co.za
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