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MMH - Miranda Mineral Holdings Limited - MMH- Reviewed condensed consolidated

Release Date: 29/05/2012 15:11
Code(s): MMH
Wrap Text

MMH - Miranda Mineral Holdings Limited - MMH- Reviewed condensed consolidated financial results for the six months ended 29 February 2012 Miranda Mineral Holdings Limited (Incorporated in the Republic of South Africa) (Registration number 1998/001940/06) Share code: MMH' ISIN: ZAE000074019 ("Miranda" or "the Group" or "the Company") Reviewed condensed consolidated financial results for the six months ended 29 February 2012 Condensed Consolidated Statement of Financial Position (Figures in R `000) Reviewed Restated Audited 29 Feb 2012 28 Feb 2011 31 Aug 2011
Assets Non-Current Assets 55,708 76,546 56,141 Property, plant and 19,556 18,792 19,656 equipment Intangible assets 33,821 55,213 34,047 Other financial assets 2,331 2,541 2,438 Current Assets 4,608 5,360 6,022 Trade and other receivables 1,835 1,223 3,311 Cash and cash equivalents 2,773 4,137 2,711 Total Assets 60,316 81,906 62,163 Equity and Liabilities Equity (4,048) 57,762 12,468 Share capital 115,051 115,051 115,051 Accumulated loss (116,998) (56,384) (100,830) Equity Attributable to (1,947) 58,667 14,221 Equity Holders of Parent Non-controlling interest (2,101) (905) (1,753) Liabilities 64,364 24,144 49,695 Non-Current Liabilities 11,363 9,795 10,997 Finance lease obligation 386 1,294 755 Deferred tax 380 221 327 Environmental rehabilitation 10,597 8,280 9,915 provisions Current Liabilities 53,001 14,349 38,698 Loans from shareholders 32,012 2,928 16,268 Finance lease obligation 909 1,012 1,056 Operating lease liability - 22 27 Trade and other payables 20,080 10,387 21,347 Total Equity and Liabilities 60,316 81,906 62,163 (1.4) 20.3 4.4 Net asset value per share (cents) Net tangible asset value per (13.3) 0.9 (7.6) share (cents) Shares in issue - closing 284,511 284,511 284,511 number Condensed Consolidated Statement of Comprehensive Income (Figures in R `000) Reviewed Restated Audited six months six months year ended ended ended
29 Feb 2012 28 Feb 2011 31 Aug 2011 Operating loss before (15,387) (11,203) (54,494) interest and tax Investment income 26 201 268 Fair value adjustment 62 73 (30) Finance costs (1,164) (113) (774) Loss before taxation (16,463) (11,042) (55,030) Taxation (53) - (106) Loss for the period (16,516) (11,042) (55,136) Total comprehensive loss (16,516) (11,042) (55,136) Loss and total comprehensive loss attributable to: Equity holders of the parent (16,168) (11,000) (54,063) Non-controlling interest (348) (42) (1,073) (16,516) (11,042) (55,136) Weighted average number of 284,511 284,511 284,511 shares in issue Loss per share (cents) (5.7) (3.9) 19.0 No dilution effect as losses were incurred (5.7) (3.9) 11.3 Headline loss per share (cents)
Reconciliation : Loss after taxation (16,168) (11,000) (54,063) attributable to equity holders of the parent Impairments - - 22,228 Non-controlling interest - - (114) effect of adjustment Headline earnings (16,168) (11,000) (31,949) Condensed Consolidated Statement of Cash Flows (Figures in R `000) Reviewed Restated Audited six months six months year ended ended ended
29 Feb 2012 28 Feb 2011 31 Aug 2011 Cash used in operations (10,646) (13,496) (25,314) Interest income 26 201 268 Finance costs (67) (113) (341) Net cash from operating (10,687) (13,408) (25,387) activities Net cash from investing 127 (6,534) (8,393) activities Net cash from financing 10,622 (474) 11,938 activities Total cash movement for the 62 (20,416) (21,842) period Cash at the beginning of the 2,711 24,553 24,553 period Total cash at end of the 2,773 4,137 2,711 period Restated Condensed Consolidated Statement of Changes in Equity REVIEWED Share Share Re- Retained Non- Total capital premium valua- income control- equity tion ling
(Figures in R reserve interest `000) Opening balance 2,845 112,206 115,051 239,138 (863) 353,326 as previously reported Prior year - - - (284,522) - (284,522) adjustments Balance at 01 2,845 112,206 115,051 (45,384) (863) 68,804 Sep 2010 as restated Total - - - (54,063) (1,073) (55,136) comprehensive loss for the year Business - - - (1,383) 183 (1,200) combinations Total changes - - - (55,446) (890) (56,336) Balance at 01 2,845 112,206 115,051 (100,830) (1,753) 12,468 Sep 2011 Total - - - (16,168) (348) (16,516) comprehensive loss for the year Balance at 29 2,845 112,206 115,051 (116,998) (2,101) (4,048) Feb 2012 Group Segmental Analysis IFRS 8: Operating Segments requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision-maker in order to allocate resources to the segments and to assess their performance. The chief operating decision-maker has been identified as the Executive Committee that makes strategic decisions. The Group has identified its operating segments based on its main exploration divisions and aggregated them into coal, diamonds, gold, base metals and industrial minerals and other. These values have been reconciled to the consolidated financial results. The measures reported on by the Group are in accordance with the accounting policies adopted for preparing and presenting the consolidated financial statements. Segment operating expenses comprise all operating expenses of the different reportable segments and are either directly attributable to the reportable segment, or can be allocated to the reportable segment on a reasonable basis. The segment assets and liabilities comprise all assets and liabilities of the different segments that are employed by the reportable segments and are either directly attributable to the reportable segments, or can be allocated to the reportable segment on a reasonable basis. (Figures in R`000) Coal Diamonds Gold Base Other Group Metals & Industrial Minerals
Reviewed six months ended 29 Feb 2012 Segment result: (5,108) (76) (20) (30) (11,229) (16,463) Loss before taxation Taxation (45) (5) (1) (2) - (53) Loss after (5,153) (81) (21) (32) (11,229) (16,516) taxation Depreciation on 693 75 15 23 12 818 and impairment of property, plant and equipment
Segment assets 55,686 456 106 642 3,426 60,316 Mining properties 17,222 - - - - 17,222 Development 13,140 - - - - 13,140 properties Exploration and 11,025 271 69 75 - 11,440 evaluation asset Mineral rights 8,929 - - 311 - 9,240 Other assets 5,370 185 37 256 3,426 9,274 Segment (20,181) (225) (45) (68) (43,845) (64,364) liabilities
Restated six months ended 28 Feb 2011 Segment result: 4,392 1,532 382 688 4,048 11,042 Loss before taxation Taxation - - - - - - Loss after 4,392 1,532 382 688 4,048 11,042 taxation Depreciation on 691 74 15 22 16 818 property, plant and equipment Segment assets 53,692 637 143 22,716 4,718 81,906 Mining properties 14,882 - - - - 14,882 Capital work-in- 13,153 - - - - 13,153 progress Exploration and 10,388 282 72 79 - 10,821 evaluation asset Mineral rights 8,929 - - 22,310 - 31,239 Other assets 6,340 355 71 327 4,718 11,811
Segment (17,638) (627) (126) (188) (5,565) (24,144) liabilities Audited year ended 31 Aug 2011 Segment result: (6,686) (1,599) (344) (22,592) (23,809) (55,030) Loss before taxation Taxation (90) (11) (2) (3) - (106) Loss after (6,776) (1,610) (346) (22,595) (23,809) (55,136) taxation Depreciation on 1,355 151 30 45 63 1,644 property, plant and equipment Segment assets 56,875 643 144 718 3,783 62,163 Mining properties 16,539 - - - - 16,539 Capital work-in- 13,140 - - - - 13,140 progress Exploration and 11,218 293 74 82 - 11,667 evaluation asset Mineral rights 8,929 - - 311 - 9,240 Other assets 7,049 350 70 325 3,783 11,577 Segment (19,604) (348) (70) (104) (29,569) (49,695) liabilities Commentary The Board of Directors welcomes this opportunity to update the shareholders of Miranda on some of the exciting developments impacting on their investment during the first six months of the 2012 financial year. The reviewed condensed consolidated interim financial results of the Group for the six month period ended 29 February 2012 comprise the results of the Company and its subsidiaries. In light of recent changes in directorships and management, the Board decided it prudent to have the Group`s interim financial results reviewed on a voluntary basis. The Group`s auditors, Deloitte & Touche, have reviewed these results and a copy of their modified review report is available for inspection at the Group`s registered office. Their report includes an emphasis of matter paragraph on going concern as the matters detailed in paragraph 8 below indicate the existence of a material uncertainty which may cast significant doubt on the Group`s ability to continue as a going concern. Their review was conducted in terms of ISRE 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity. 1. PRESENTATION OF CONDENSED CONSOLIDATED INTERIM RESULTS The condensed consolidated interim results have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the AC 500 standards as issued by the Accounting Practices Board and the information as required by IAS 34: Interim Financial Reporting, Listing Requirements of the JSE Limited, and the Companies Act of South Africa (Act 71 of 2008). In the preparation of these interim financial results, the Group has applied key assumptions concerning the future and other indeterminate sources in recording various assets and liabilities. The Group`s principal accounting policies and assumptions applicable to the financial year end 31 August 2011 have been applied consistently over the interim results. The interim financial information was prepared under the supervision of the CFO, Ms Mari-Alet van der Merwe CA(SA). 2. STRATEGIC AND CORPORATE REVIEW The reconstituted Board and management team have made good progress in formulating and implementing a refocused strategy for Miranda with the sole objective of realising maximum value for all shareholders. This will be attained by clearly defining Miranda`s identity and positioning within the mining sector, in general, and the (junior) coal mining subsector, in particular. To these ends, the Board has mandated the executive management to pursue a number of initiatives, including reviewing the current portfolio of both coal and non-coal assets, defining core and non-core assets, considering potential acquisition opportunities and re-examining the capitalisation of the Group. 3. OPERATIONAL REVIEW Management`s operational focus during the period under review was evident in a number of important areas. Good progress was made on the internal review being conducted of all the projects in the Coal Division. Management also maintained their focus on resolving the outstanding operational and contingent matters as previously disclosed. Lastly, the executive team continued laying the foundation for Miranda`s long-awaited move into active coal mining. Sesikhona project Once discussions regarding mining sub-contracting and off-take agreements for Sesikhona have been finalised, mining of Sesikhona`s anthracite coal deposit is expected to commence during calendar year 2012. Uithoek project The re-negotiation of the JV agreement with the Simpson family (who holds the Mining Right), is considered a matter of priority. Agreement in principle has been reached to restore the relationship and term sheets are in the process of being drawn up. Further information will be provided as soon as available. Burnside project A decision by the Department of Mineral Resources in respect of the Company`s application for a Mining Right is understood to be imminent. Boschhoek project The Board is pleased to report that the SA National Defense Force has agreed to enter into discussions with a view to discuss their concerns in an attempt to settle the dispute relating to one of the farms where there is possible unexploded ordnance.
Other projects - as part of management`s ongoing review, the following projects were exited and sold back to the original joint venture partners, with Miranda recovering its costs: Dannhauser project area: Hillside project (co. Socratime (Pty) Ltd); Dannhauser project area: Solmar project (co. Matlotlo Trading 174 (Pty) Ltd); Klipriver South project area: Spetskop project (co. Sangriblox (Pty) Ltd); and Vryheid East project area: Uitkomst project (co. Turnover Trading 225 (Pty) Ltd). Management`s focus in the other, non-coal operating divisions has been, and will continue to be, to work towards a resolution with the DMR in respect of its overdue and/or disputed Prospecting Rights. Other than as disclosed in these interim financial results, there were no material changes during the six months ended 29 February 2012 from the information as disclosed in the 2011 Annual Report in respect of the Company`s exploration activities and results. Contingencies As previously reported, the arbitration proceedings between Sesikhona and Stefanutti Stocks Mining Services ("SSMS"), regarding outstanding amounts and claims in respect of a mining contract with SSMS, remain on hold pending the outcome of settlement negotiations. Other contingencies relate to the status of the Uithoek and Boschhoek projects, as reported on above, as well as the claim regarding the alleged commission on the cancelled claw back transaction, as mentioned under `Other Disputes` in the Directors` Report to the 2011 Integrated Report. 4. FINANCIAL REVIEW The comparative February 2011 financial results of the Group have been restated to reflect the derecognition of the Rozynenbosch asset from the Group`s intangible assets. This has had the effect of reducing the net asset value of the Group by approximately R284.5 million, equivalent to a decline of 100 cents per share ("cps") from 120.3 cps to 20.3 cps as at 28 February 2011. On 29 February 2012, the net asset value and net tangible asset value of the Company amounted to -R4.0 million and -R37.9 million respectively (restated 2011: R57.8 million and R2.5 million). This was equivalent to -1.4 cps and -13.3 cps (restated 2011: 20.3 cps and 0.9 cps), which represents a decline of 21.7 cps and 14.2 cps, respectively. Incubex Minerals Limited, a shareholder, have subordinated its loan and the conversion thereof, and agreed to support the Group until such time as projects are operational and generating sufficient cash flow. Current liabilities of R53 million exceed current assets of R4.6 million by R48.4 million. Current liabilities include the amount of R7 million invoiced by SSMS (as disclosed under contingencies) and the shareholder loans yet to be converted. With no projects yet in production, the Group showed no revenue for the period (2011: Rnil). The increase in operating expenses for the six months (R15.4 million; 2011: R11.2 million) was mainly due to significant consulting, legal and compliance costs incurred as a consequence of the Company`s focus on securing existing assets and claims in order to build sustainability. The resultant net loss for the period was R16.5 million (2011: R11.0 million). 5. EVENTS SUBSEQUENT TO BALANCE SHEET DATE An annual general meeting of shareholders was held on 2 April 2012. Shareholders passed the requisite resolutions to facilitate the Group`s capital raising activities by placing the authorised, unissued shares of the Company under the control of the directors. Other subsequent events include the sale of the helicopter for an amount of R3.7 million. 6. CHANGES TO THE BOARD During the financial period under review, Ms Esther Johnson resigned as Financial Director of Miranda on 30 March 2012 and was replaced by Ms Mari- Alet van der Merwe effective same date. 7. GROUP PROSPECTS The benefits of having the collective attention of the management team dedicated to operational issues and the exploitation of assets are expected to begin unlocking value in the Company for shareholders during calendar year 2012. The Board will be focusing both on opportunities to grow by acquisition and on implementing its strategy of fast-tracking and bringing to account Miranda Coal`s most advanced coal projects in KZN. 8. STATEMENT ON GOING CONCERN The following conditions are impacting on the Group`s ability to continue as a going concern: * Losses incurred and the net liability and net current liability position - as disclosed in the financial review paragraph; * Cash flow - factors taken into consideration include the available Incubex funding, and the Group`s focus on generating operational cash flow from existing resources before the end of calendar year 2012; and * Litigation matters - as disclosed under the contingencies paragraph. Management has the following plans in place to address the above conditions affecting the Group`s ability to continue as a going concern: * The stringent control of expenditure to ensure efficient and cost effective delivery by service providers in line with our Group strategy; * Focus is placed on the signing of off-take agreements for our Sesikhona and Uithoek projects to deliver operational cash flow in line with our cash flow forecast; * Reaching settlement on all litigation matters to enable the Group to proceed with our emphasis on core business; and * Continue the relationship with Incubex for its continuous support. The directors realise that the conditions referred to in the preceeding paragraphs indicate the existence of a material uncertainty which may cast significant doubt on the Group`s ability to continue as a going concern. The directors are confident that the plans put in place will address those concerns and will result in consistency enabling the Group to deliver on shareholder expectations. 9. DIVIDENDS No dividends were recommended or declared for the period under review (2011: nil). For and on behalf of the Board Dr L Mohuba A Johnson M van der Merwe Chairperson Chief Executive Officer Chief Financial Officer Centurion 29 May 2012 Sponsor: PricewaterhouseCoopers Corporate Finance (Proprietary) Ltd, 2 Eglin Road, Sunninghill, 2157 (Private Bag X36, Sunninghill, 2157) Transfer Secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) Tel: 011 370 5000 Company Secretary and place where registers are kept: Fusion Corporate Secretarial Services (Pty) Ltd, represented by Melinda van den Berg, Nr 56 Regency Road, Route 21 Corporate Park, Nellmapius Drive, Irene, Centurion (PO Box 68528, Highveld, 0169) Tel: 087 550 1123 Company registered office: Ground Floor, Pecanwood Building, The Greens Office Park, Charles de Gaulle Crescent, Highveld Techno Park, Centurion (PO Box 1045, North Riding, 2162) Tel: 012 665 4200 Fax: 012 665 4258 Email: info@mirandaminerals.com www.mirandaminerals.com Date: 29/05/2012 15:11:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. 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