Wrap Text
Reviewed Interim Results
PGL - Pallinghurst Resources Limited
Pallinghurst Resources Limited
(Incorporated in Guernsey)
(Guernsey registration number: 47656)
(South African external company registration number 2009/012636/10)
Share code on the BSX: PALLRES
ISIN: GG00B27Y8Z93
Share code on the JSE: PGL
(Pallinghurst or the Company)
Interim Results for the six months ended 30 June 2012
NAV per share: ZAR 4.98
Pallinghursts four platforms continue to develop their value propositions in line with strategy. The successful
ZAR640 million Rights Offer will enable the Company to further support its investments.In addition, in these testing
markets, unique value opportunities can be secured for the benefit of all shareholders.
Arne H.Frandsen, Chief Executive
Investment Managers Report
The Company successfully completed a rights offer (the Rights Offer) to shareholders in July 2012 raising
ZAR637.6 million (US$80 million) at ZAR2.24 per share. The funds were raised to enable the Company to continue
to support its existing investments and potentially to create significant shareholder value by participating in
identified new investment opportunities. Since completion of the Rights Offer, the Company has invested a further
AUD13 million in Jupiters capital raising and committed an incremental US$25 million to Faberge.
Platinum Group Metals
In May 2012, the Department of Mineral Resources (DMR) gave its approval to the Pallinghurst Co-Investors
acquisition of a 49.9% stake in Sedibelo from the Bakgatla. The Pallinghurst Co-Investors also increased their
aggregate interest in Magazynskraal to 40% (an additional 6.6%) and acquired key water and electricity rights
and entitlements necessary for the development of the three contiguous properties (the Consolidation). Platmin
has also received the DMR approvals necessary for the completion of its acquisition of Sedibelo West. Sedibelo
West will increase Platmins 4E PGM (platinum, palladium, rhodium and gold) resources, extend the life of mine,
provide operational flexibility and provide access to non-oxidised material at depth. These transactions are
significant steps towards the completion of the African Queen strategy and effecting the Consolidation, with
potential for significant synergies.
On 31 March 2012, the Industrial Development Corporation of South Africa Limited (IDC) agreed to invest, upon
the Consolidation, ZAR3.24 billion, in return for 16.2% of the Consolidation vehicle and to establish a PGM
beneficiation joint venture with Pallinghurst. Although completion of the IDCs investment is subject to various
conditions, it is likely to have a positive effect on the Groups Net Asset Value (NAV). The introduction of the
IDC as a cornerstone investor is a significant step in the PGM strategy to create a low cost producer of industry
significance. It also provides a significant equity injection which will be used to fund the further development
and growth strategy of the Consolidation vehicle.
On 21 May 2012, Platmin announced a marked improvement in performance due to higher feed grades and better recoveries,
contributing to record PGM sales of 22,458 ounces in Q1. Following the reorganisation of its mining contracts last year,
on 30 June 2012 Platmin took direct control of the operation of its concentrator, increasing management control of
its beneficiation process.
Steel Making Materials
Pre-stripping and construction of the 2.4mtpa Tshipi Borwa manganese mine has progressed significantly and remains on
track for the mining of first ore before the end of the year. The rail siding has been completed and was used recently
by Transnet to compile a trial 208-wagon distributed power train, double the length typically used by manganese trains
to Port Elizabeth. The technology is the same as is used on the heavy haul Sishen-Saldanha iron ore line, and could
significantly increase manganese rail capacity from the Kalahari Manganese Field. Formal negotiations with Transnet
to secure rail allocation to Port Elizabeth have progressed well and Tshipi is confident that rail entitlement will
be provided ahead of production.
On 4 September 2012, Jupiter announced a 132% increase in the Mount Ida JORC-compliant resource to 1.2 billion tonnes
at 29.8% Fe, with 86% of the resource being in the measured/indicated category, underlining the potential for a robust,
long-life operation. The increased resource relates only to the central section of Mount Ida and a further increase is
expected when the results of the recent drilling on the surrounding zones are available. Work on the Mount Ida feasibility
study is due to be completed by the end of the year, with the feasibility study due to be delivered by mid-2013.
Jupiter continued with mine optimisation analysis on the Mount Mason Direct Shipping Ore (DSO)/hematite project
feasibility study. The focus of port access has been on the Port of Esperance following the West Australian Government
announcing its commitment in January 2012 to expand Esperances iron ore handling capacity by up to 20 million tonnes
per annum. The expansion is expected to unlock the Yilgarn regions potential to emerge as Australias second-largest
iron ore producing area outside the Pilbara.
Following the end of the period, the Group invested AUD13 million of the Rights Offer proceeds in Jupiters capital
raising, which raised AUD76 million, including AUD45 million from the Netherlands-based institutional investor Stichting
Pensioenfonds ABP. Jupiter will use the funds to complete the feasibility studies and optimisation work on Mount Ida and
Mount Mason and provide working capital to Tshipi as it moves into the production phase.
Coloured Gemstones
Gemfields robust sales performance continued during the period. An auction of higher quality emerald and beryl rough was
held in Singapore in March 2012. A total of 0.69 million carats were sold for US$26.2 million, representing an average price
of US$38 per carat. Gemfields also hosted an auction of lower grade rough emerald and beryl in Jaipur in June 2012. A total
of 3.47 million carats were sold for US$9.0 million, another healthy auction outcome. The Jaipur auction did however see some
weakness in demand and prices for the lowest grades of beryl, with these lots not being sold. These auction results contributed
to Gemfields receiving a total of US$134 million in revenues across the ten auctions that have been held since July 2009, a
significant endorsement of Gemfields auction formula and its approach to the coloured gemstone sector. Gemfields next auction
of higher quality rough emeralds is scheduled to take place in Singapore between 29 October and 3 November 2012.
Production during the year ending 30 June 2012 was 21.1 million carats, a 36% decrease from the record breaking 33.0 million
carats in the prior year. The decrease resulted from the short term focus on waste mining to push back the high wall and open
up new areas of ore.
For the half year ending on 31 December 2011, Gemfields announced unaudited net profits after tax of US$22.0 million, higher
than the record full year profits posted for the 12 months to 30 June 2011. At 30 June 2012, Gemfields held cash balances of
US$36.7 million, and its full year results (to 30 June 2012) are due to be released in October 2012.
In February 2012, Gemfields completed the acquisition of 75% of a potentially world class ruby deposit in the Montepuez district
of the Cabo Delgado province in northern Mozambique. The deposit comprises mining and exploration rights covering approximately
34,000 hectares and is believed to be one of the largest ruby concessions in private hands in the world. Since acquisition,
development has been accelerated with the construction of the temporary base-camp and the commencement of bulk sampling. The
project management team is in place and all work streams are progressing to develop the project into a fully operational
business unit.
Luxury Brands
Faberge has continued to expand its global retail presence, opening a new boutique at 694 Madison Avenue in New York in May 2012.
Faberge also opened a concession within Lane Crawford, Hong Kongs leading speciality store for luxury brands. The total number
of directly operated retail outlets now stands at five. The Hong Kong and New York openings attracted significant publicity and
quickly established Faberges presence in those markets. Faberge also participated in BaselWorld 2012 in Switzerland, the worlds
largest jewellery and watch trade fair.
As a profile-raising initiative, Faberge collaborated with two charities in bringing the largest and most interactive egg hunt
ever held to the streets of central London. Called The Faberge Big Egg Hunt, and running for 40 days to Easter 2012, participants
searched for over 200 designer eggs, each measuring some 75 centimetres in height, in high profile locations around central London.
Each of the 200 eggs had been uniquely designed and decorated by a leading designer or artist, including Candy & Candy, Diane von
Furstenberg, Theo Fennell, Zaha Hadid, Nicky Haslam and Vivienne Westwood. These eggs were sold at auction raising in excess of
GBP 1 million for the charities. The funds were split equally between Action for Children, the leading UK provider of family and
community centres, and the Elephant Family, an organisation for the protection of the endangered Asian elephant. The Faberge Big
Egg Hunt reached more than six million people, set two world records and achieved tremendous publicity for Faberge.
During June 2012, the Company entered into a new loan facility with Faberge, increasing the original facility by a further
US$25 million to US$50 million and securing a further US$375,000 structuring fee for the Company.
Pallinghurst (Cayman) GP L.P.
September 2012
CONDENSED CONSOLIDATED INCOME STATEMENT
1 January 2012 1 January 2011 1 January 2011
to 30 June 2012 to 30 June 2011 to 31 December 2011
US$ US$ US$
INCOME Notes (reviewed) (reviewed) (audited)
Investment Portfolio
Unrealised fair value gains 4 23,478,958 6,453,081 14,533,179
Unrealised fair value losses 4 (38,990,401) (117,767,426) (150,362,622)
Unrealised foreign exchange gains 4 412,653 11,547,769 -
Unrealised foreign exchange losses 4 (398,049) - (1,395,079)
Net loss on Platmin Note - (180,033) (180,033)
Realised foreign exchange gain on Jupiter
forward contract - 429,330 429,330
Realised fair value loss on acquisition
of Jupiter shares - (1,478,098) (1,478,098)
(15,496,839) (100,995,377) (138,453,323)
Investment Portfolio revenue
Accrued interest and structuring fee 4 576,608 497,403 893,057
576,608 497,403 893,057
Net losses on investments and income
from operations (14,920,231) (100,497,974) (137,560,266)
EXPENSES
Investment Managers Benefit (2,313,887) (2,313,887) (4,627,775)
Performance Incentive accrual reversal - 32,512,233 32,512,233
Operating expenses (388,168) (324,024) (773,239)
Foreign exchange gains 4,211 14,235 14,364
Foreign exchange losses (354,508) (17,078) (17,984)
(3,052,352) 29,871,479 27,107,599
Loss from operations (17,972,583) (70,626,495) (110,452,667)
Finance income 253,781 55,982 136,228
Finance costs - - -
Net finance income 253,781 55,982 136,228
Loss before share in profit/(loss) of associates (17,718,802) (70,570,513) (110,316,439)
Share in profit/(loss) of associates 3,134,545 (2,218,884) (4,105,703)
Loss before tax (14,584,257) (72,789,397) (114,422,142)
Tax credit - 26,066,890 42,113,518
NET LOSS AFTER TAX (14,584,257) (46,722,507) (72,308,624)
Basic and diluted loss per ordinary share* 8 (0.03) (0.10) (0.15)
NET LOSS FOR THE PERIOD/YEAR (14,584,257) (46,722,507) (72,308,624)
Items of other comprehensive income - - -
TOTAL COMPREHENSIVE EXPENSE FOR THE PERIOD/YEAR (14,584,257) (46,722,507) (72,308,624)
*Headline Loss Per Share is equal to Loss Per Share.
All elements of profit and loss for the period and all comparative periods are attributable to owners of the parent company.
There are no non-controlling interests. The accompanying notes form part of these Interim Financial Statements.
All elements of total comprehensive expense for the period and all comparative periods are attributable to owners of the parent.
There are no non-controlling interests.
CONDENSED CONSOLIDATED BALANCE SHEET
30 June 2012 30 June 2011 31 December 2011
US$ US$ US$
Notes (reviewed) (reviewed) (audited)
ASSETS
Non-current assets
Investments in associates 3,824,226 22,954,645 21,067,826
Investment Portfolio
Quoted investments 4 109,963,001 216,105,236 125,191,591
Unquoted investments 4 210,566,459 137,000,863 190,456,562
Loans and receivables 4 36,137,699 11,040,437 22,436,091
356,667,159 364,146,536 338,084,244
Total non-current assets 360,491,385 387,101,181 359,152,070
Current assets
Trade and other receivables 1,426,402 25,314 1,179,732
Cash and cash equivalents 38,034,988 20,215,504 5,274,327
Total current assets 39,461,390 20,240,818 6,454,059
Total assets 399,952,775 407,341,999 365,606,129
LIABILITIES
Non-current liabilities
Deferred tax liability - 16,046,628 -
Current liabilities
Trade and other payables 729,587 306,767 203,642
Total current liabilities 729,587 306,767 203,642
Total liabilities 729,587 16,353,395 203,642
Net assets 399,223,188 390,988,604 365,402,487
Capital and reserves attributable to equity holders
Share capital 6,637 4,760 4,760
Share premium 348,629,339 300,226,258 300,226,258
Retained earnings 50,587,212 90,757,586 65,171,469
EQUITY 399,223,188 390,988,604 365,402,487
NAV and tangible NAV per share 8 0.60 0.82 0.77
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
1 January 2012 1 January 2011 1 January 2011
to 30 June 2012 to 30 June 2011 to 31 December 2011
US$ US$ US$
Notes (reviewed) (reviewed) (audited)
Cash outflows from operations 6 (2,422,780) (1,423,987) (5,457,643)
Additions to investments (20,378,146) (14,571,379) (5,568,750)
Disposal of Platmin convertible note 4 - 9,002,629 -
Loans extended to investments 4 (13,125,000) (7,500,000) (18,500,000)
Loan repayments from investments 4 - 28,821,690 28,821,690
Finance income received 253,781 42,972 136,228
Net cash (outflows)/inflows from operating activities (35,672,145) 14,371,925 (568,475)
Cash flows from investing activities
Decrease/(increase) in investments in associates 20,378,146 (23,559,037) (23,559,037)
Net cash from/(used in) investing activities 20,378,146 (23,559,037) (23,559,037)
Cash flows from financing activities
Rights Offer- Pre-placement monies 50,638,596 - -
Rights Offer- costs (2,184,255) - -
Rights Offer- net foreign exchange losses (49,384) - -
Net cash from financing activities 48,404,957 - -
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 33,110,958 (9,187,112) (24,127,512)
Cash and cash equivalents at the beginning of the period/year 5,274,327 29,405,459 29,405,459
Foreign exchange gain on cash 4,211 14,235 14,364
Foreign exchange loss on cash (354,508) (17,078) (17,987)
CASH AND CASH EQUIVALENTS AT THE END OF THE
PERIOD/YEAR 38,034,988 20,215,504 5,274,327
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Share premium Retained earnings Total equity
US$ US$ US$ US$
Balance at 1 January 2011 4,760 300,226,258 137,480,093 437,711,111
Total comprehensive loss for the period - - (46,722,507) (46,722,507)
Balance at 30 June 2011 (reviewed) 4,760 300,226,258 90,757,586 390,988,604
Total comprehensive loss for the period - - (25,586,117) (25,586,117)
Balance at 31 December 2011 (audited) 4,760 300,226,258 65,171,469 365,402,487
Rights Offer- Pre-placement monies 1,877 50,636,720 - 50,638,597
Rights Offer- costs - (2,184,255) - (2,184,255)
Rights Offer- net foreign exchange losses - (49,384) - (49,384)
Total comprehensive loss for the period - - (14,584,257) (14,584,257)
Balance at 30 June 2012 (reviewed) 6,637 348,629,339 50,587,212 399,223,188
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. General information
These financial statements within the Interim Report are for the interim period from 1 January 2012 to 30 June 2012 (the Interim
Financial Statements). The financial information for the year ended 31 December 2011 included in these Interim Financial Statements
does not constitute statutory Financial Statements as defined in The Companies (Guernsey) Law, 2008.
The information included in this document for the comparative year was derived from the Annual Report and Financial Statements
for the year ended 31 December 2011 (the Annual Financial Statements), a copy of which has been delivered to the Guernsey
Financial Services Commission, the Johannesburg Stock Exchange and the Bermuda Stock Exchange. The auditors report on the
Annual Financial Statements was unqualified, did not draw attention to any matters by way of emphasis, and stated that the
Annual Financial Statements had been properly prepared in accordance with The Companies (Guernsey) Law, 2008.
2. Accounting policies
Basis of accounting
These Interim Financial Statements have been prepared in accordance with IAS34 Interim Financial Reporting (IAS34) and applicable
legal and regulatory requirements of The Companies (Guernsey) Law, 2008. They do not include all of the information required for
full financial statements and are to be read in conjunction with the Groups Annual Financial Statements, which were prepared under
International Financial Reporting Standards (IFRS) and the AC500 Accounting Standards issued by the Accounting Practices Board of
South Africa.
The Financial Statements have been prepared on the historic cost basis, except for the valuation of certain equity investments held
within the Investment Portfolio. These equity investments are measured at fair value not historic cost. Historic cost is generally
based on the fair value of the consideration given in exchange for the assets. Other than information contained within the Condensed
Consolidated Statement of Cash Flows, the Financial Statements have been prepared on the accruals basis.
As the Group is an investment holding company, materially all of the Groups results are related to the valuations of the Groups
investments. As such, the Groups interim results are not directly affected by seasonality or the cyclicality of operations.
The investees most recent financial results do not usually directly impact the fair value of that investee as the Groups
nvestments are at an early stage of their development and other factors are more relevant in determining fair value.
The principal accounting policies applied are consistent with those adopted and disclosed in the Groups Annual Financial Statements.
3. Segmental reporting
The Groups segmental reporting is based around its four investment platforms (PGMs, Steel Making Materials, Coloured
Gemstones and Luxury Brands) each of which is categorised as an operating segment.
The Chief Operating Decision Maker (CODM) is Mr Gilbertson, the Chairman, who measures the performance of each operating
segment by assessing the fair value of the Groups Investment Portfolio on a regular basis.
The Income Statement segmental information provided to the CODM for the six months ended 30 June 2012 was as follows:
Steel Making Coloured Luxury
PGMs Materials Gemstones Brands Unallocated Total
US$ US$ US$ US$ US$ US$
30 June 2012 (reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
Income
Unrealised fair
value gains - - 23,478,958 - - 23,478,958
Unrealised fair
value losses - (38,990,401) - - - (38,990,401)
Unrealised foreign
exchange gains - - 412,653 - - 412,653
Unrealised foreign
exchange losses (268,249) (129,800) - - - (398,049)
Loan interest
income - - - 576,608 - 576,608
Net segmental
(expense)/income (268,249) (39,120,201) 23,891,611 576,608 - (14,920,231)
Other income - -
Net losses on
investments and
income from
operations (14,920,231)
Expenses, net
finance income,
share of loss
of associates
and taxation 335,974 335,974
Net segmental
(loss)/profit (268,249) (39,120,201) 23,891,611 576,608 335,974 (14,584,257)
The Income Statement segmental information provided to the CODM for the six months ended 30 June 2011 is as follows:
Steel Making Coloured Luxury
PGMs Materials Gemstones Brands Unallocated Total
US$ US$ US$ US$ US$ US$
30 June 2011 (reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
Income
Unrealised fair
value gains - - 6,453,081 - - 6,453,081
Unrealised fair
value losses (22,427,876) (95,339,550) - - - (117,767,426)
Unrealised foreign
exchange gains 1,168,236 9,498,687 880,846 - - 11,547,769
Unrealised foreign
exchange losses - - - - - -
Net unrealised
loss on Platmin
Note (180,033) - - - - (180,033)
Realised loss
on Jupiter shares - (1,048,768) - - - (1,048,768)
Loan interest
income 343,506 - - 153,897 - 497,403
Net segmental
(expense)/income (21,096,167) (86,889,631) 7,333,927 153,897 - (100,497,974)
Other income 13,010 13,010
Net losses on
investments and
income from
operations (100,484,964)
Expenses, net
finance income,
share of loss
of associates
and taxation 53,762,457 53,762,457
Net segmental
(loss)/profit (21,096,167) (86,889,631) 7,333,927 153,897 53,775,467 (46,722,507)
The Income Statement segmental information provided to the CODM for the year ended 31 December 2011 is as follows:
Steel Making Coloured Luxury
PGMs Materials Gemstones Brands Unallocated Total
US$ US$ US$ US$ US$ US$
31 December 2011 (reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
Income
Unrealised fair
value gains - - 14,533,179 - - 14,533,179
Unrealised fair
value losses (5,211,360) (145,151,262) - - - (150,362,622)
Unrealised foreign
exchange gains - - - - - -
Unrealised foreign
exchange losses (1,317,174) (49,059) (28,846) - - (1,395,079)
Net unrealised
loss on Platmin
Note (180,033) - - - - (180,033)
Realised foreign
exchange gain on
Jupiter forward
contract - 429,330 - - - 429,330
Realised loss on
Jupiter shares - (1,478,098) - - - (1,478,098)
Loan interest
income 343,506 - - 549,551 - 893,057
Net segmental
(expense)/income (6,365,061) (146,249,089) 14,504,333 549,551 - (137,560,266)
Other income - -
Net losses on
investments and
income from
operations (137,560,266)
Expenses, net
finance income,
share of loss
of associates
and taxation 65,251,642 65,251,642
Net segmental
(loss)/profit (6,365,061) (146,249,089) 14,504,333 549,551 65,251,642 (72,308,624)
The segmental information provided to the CODM for the reportable segments for the period ended 30 June 2012 is as follows:
Steel Making Coloured Luxury
PGMs Materials Gemstones Brands Total
US$ US$ US$ US$ US$
30 June 2012 (reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
Investment Portfolio
Listed investments - 46,635,577 63,327,424 - 109,963,001
Unlisted investments 123,560,255 - - 87,006,204 210,566,459
Loans and receivables - - - 36,137,699 36,137,699
Total segmental assets 123,560,255 46,635,577 63,327,424 123,143,903 356,667,159
Investments in associates,
current assets and liabilities 42,556,029
Net assets 399,223,188
The comparative segmental information provided for the period ended 30 June 2011 was as follows:
Steel Making Coloured Luxury
PGMs Materials Gemstones Brands Total
US$ US$ US$ US$ US$
30 June 2011 (reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
Investment Portfolio
Listed investments 38,724,593 145,115,236 32,265,407 - 216,105,236
Unlisted investments 49,994,659 - - 87,006,204 137,000,863
Loans and receivables - - - 11,040,437 11,040,437
Total segmental assets 88,719,252 145,115,236 32,265,407 98,046,641 364,146,536
Investments in associates,
current assets and liabilities 26,842,068
Net assets 390,988,604
The comparative segmental information provided for the year ended 31 December 2011 is as follows:
Steel Making Coloured Luxury
PGMs Materials Gemstones Brands Total
US$ US$ US$ US$ US$
30 December 2011 (audited) (audited) (audited) (audited) (audited)
Investment Portfolio
Listed investments - 85,755,778 39,435,813 - 125,191,591
Unlisted investments 103,450,358 - - 87,006,204 190,456,562
Loans and receivables - - - 22,436,091 22,436,091
Total segmental assets 103,450,358 85,755,778 39,435,813 109,442,295 338,084,244
Investments in associates,
current assets and liabilities 27,318,243
Net assets 365,402,487
4. Investments
The reconciliation of the Investment Portfolio from 1 January 2012 to 30 June 2012 is as follows:
Accrued Renego-
Unrealised Unrealised interest tiation of
Unrealised Unrealised foreign foreign Additions & struc- Faberge Closing at
Opening at 1 fair value fair value exchange exchange and turing loan 30 June
January 2012 gains losses gains losses disposals fee facility 2012
US$ US$ US$ US$ US$ US$ US$ US$ US$
(reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
Listed
equity
investments
Jupiter 85,755,778 - (38,990,401) - (129,800) - - - 46,635,577
Gemfields 39,435,813 23,478,958 - 412,653 - - - - 63,327,424
125,191,591 23,478,958 (38,990,401) 412,653 (129,800) - - - 109,963,001
Unlisted
equity
investments
Platmin 53,455,699 - - - (268,249) - - - 53,187,450
Moepi Group 13,373,315 - - - - - - - 13,373,315
Magazyns-
kraal (2) 36,621,344 - - - - 1,855,949 - - 38,477,293
Sedibelo (1) - - - - - 18,522,197 - - 18,522,197
Faberge 87,006,204 - - - - - - - 87,006,204
190,456,562 - - - (268,249) 20,378,146 - - 210,566,459
Loans and
receivables
Faberge
US$25
million
loan (3) 22,436,091 - - - - 3,125,000 505,970 (26,067,061) -
Faberge
US$50
million
loan (4) - - - - - 10,000,000 70,638 26,067,061 36,137,699
22,436,091 - - - - 13,125,000 576,608 - 36,137,699
Total
Investment
Portfolio 338,084,244 23,478,958 (38,990,401) 412,653 (398,049) 33,503,146 576,608 - 356,667,159
(1) The Group acquired its Sedibelo interest in May 2012. During March 2011, a suite of transactions was announced that
included the acquisition by the Pallinghurst Co-Investors of a 49.9% stake in Sedibelo, an additional interest in
Magazynskraal and interests in various other assets. Funds were contributed to Ivy Lane, one of the Groups associates,
during 2011, allocated as the consideration for these acquisitions. The Group acquired its indirect 9.26% interest
in May 2012.
Completion of the suite of transactions was subject to various conditions including approval from the DMR.The approvals
were received during May 2012, enabling the completion of the suite of transactions soon afterwards.
(2) The Group acquired an incremental 1.23% interest in Magazynskraal as part of the completion of the Sedibelo suite
of transactions during May 2012. The additional interest acquired has been valued at cost. The Groups revised cost of
investment for Magazynskraal is US$38,477,293.
(3) The Group previously provided a commitment to loan Faberge up to US$25,000,000 (excluding interest). At 31 December
2011, Faberge had drawn down US$21,500,000. The loan was fully drawn down on 19 April 2012. The loan, including interest,
was due for repayment by 31 August 2012.On 15 June 2012, a new loan facility was entered into with Faberge, the
US$25,000,000 loan was subsumed into the new loan arrangement, see below.
(4) The Group entered into a new loan facility with Faberge on 15 June 2012. The original facility (US$25,000,000
excluding interest) was replaced by a new facility to loan Faberge up to US$50,000,000 (including the original
US$25,000,000, excluding interest).
The key terms of the revised loan facility are as follows:
- A further US$375,000 structuring fee accrued upon drawdown of the loan.
- The loan earns interest at three month US$ LIBOR plus 4% until 1 July 2013.
- The balance of the loan, including interest, must be repaid by 31 August 2013.
- The Group may be able to convert the loan into new Faberge equity shares at US$35 per share.
This conversion would only occur in certain circumstances; if the loan is not repaid by 31 August 2013,
or if a transaction or corporate event occurs affecting more than 30% of Faberges shares in issue, such as a sale
of shares or issue of new shares.
On 15 June 2012, US$10,000,000 was drawn down. On 20 July 2012, a further US$14,625,000 was drawn down and a
US$375,000 structuring fee accrued to the Company; the loan facility is accordingly fully utilised.
Net
realised
loss on
acquisition
of Jupiter Accrued
Unrealised shares and interest
Unrealised Unrealised foreign loss on Additions & struc- Platmin Closing at
Opening at 1 fair value fair value exchange Platmin and turing reclassifi- 30 June
January 2011 gains losses gains Note disposals fee cation 2011
US$ US$ US$ US$ US$ US$ US$ US$ US$
Investment (reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
Platmin 50,981,604 - (22,427,876) 1,168,236 - 9,002,629 - - 38,724,593
Jupiter 226,436,117 - (95,339,550) 9,498,687 (1,048,768) 5,568,750 - - 145,115,236
Gemfields 24,931,480 6,453,081 - 880,846 - - - - 32,265,407
302,349,201 6,453,081(117,767,426) 11,547,769 (1,048,768) 14,571,379 - - 216,105,236
Unlisted
equity
investments
Moepi Group 13,373,315 - - - - - - - 13,373,315
Magazyns-
kraal 36,621,344 - - - - - - - 36,621,344
Faberge 87,006,204 - - - - - - - 87,006,204
137,000,863 - - - - - - - 137,000,863
Loans and
receivables
Platmin 28,478,184 - - - - (28,821,690) 343,506 - -
Faberge
US$25
million
loan 3,386,540 - - - - 7,500,000 153,897 - 11,040,437
31,864,724 - - - - (21,321,690) 497,403 - 11,040,437
Platmin Note
Platmin Note 9,182,662 - - - (180,033) (9,002,629) - - -
9,182,662 - - - (180,033) (9,002,629) - - -
Total
Investment
Portfolio 480,397,450 6,453,081 (117,767,426) 11,547,769 (1,228,801)(15,752,940) 497,403 - 364,146,536
The reconciliation of the Investment Portfolio from 1 January 2011 to 31 December 2011 is as follows:
Net
realised
Realised loss on
foreign acquisition
exchange of Jupiter Accrued
Unrealised gain on shares and interest Closing at
Unrealised Unrealised foreign Jupiter loss on Additions & struc- Platmin 31
Opening at 1 fair value fair value exchange forward Platmin and turing reclassifi- December
January 2011 gains losses losses contract Note disposals fee cation 2011
US$ US$ US$ US$ US$ US$ US$ US$ US$ US$
Investment (audited) (audited) (audited) (audited) (audited) (audited) (audited) (audited) (audited) (audited)
Listed
equity
investments
Platmin 50,981,604 - (5,211,360) (1,317,174) - - 9,002,629 - (53,455,699) -
Jupiter 226,436,117 - (145,151,262) (49,059) 429,330 (1,478,098) 5,568,750 - - 85,755,778
Gemfields 24,931,480 14,533,179 - (28,846) - - - - - 39,435,813
302,349,201 14,533,179 (150,362,622) (1,395,079) 429,330 (1,478,098) 14,571,379 - (53,455,699) 125,191,591
Unlisted
equity
investments
Platmin - - - - - - - - 53,455,699 53,455,699
Moepi Group 13,373,315 - - - - - - - - 13,373,315
Magazyns-
kraal 36,621,344 - - - - - - - - 36,621,344
Faberge 87,006,204 - - - - - - - - 87,006,204
137,000,863 - - - - - - - 53,455,699 190,456,562
Loans and
receivables
Platmin 28,478,184 - - - - - (28,821,690) 343,506 - -
Faberge
US$25
million
loan 3,386,540 - - - - - 18,500,000 549,551 - 22,436,091
31,864,724 - - - - - (10,321,690) 893,057 - 22,436,091
Platmin Note
Platmin Note 9,182,662 - - - - (180,033) (9,002,629) - - -
9,182,662 - - - - (180,033) (9,002,629) - - -
Total
Investment
Portfolio 480,397,450 14,533,179 (150,362,622) (1,395,079) 429,330 (1,658,131) (4,752,940) 893,057 - 338,084,244
The valuation methodologies and other relevant details for the each of the Groups investments were detailed in the Annual
Financial Statements. Other than as detailed below, the valuation methodologies employed by the Group are in line with those
employed at 31 December 2011.
Richtrau No 123 (Pty) Ltd - Magazynskraal
Nature of investment: Richtrau is the company which owns the prospecting right over the Magazynskraal property. Magazynskraal
is located on the Western Limb of the Bushveld Complex in close proximity to the Pilanesberg Platinum Mine ("PPM") and Sedibelo.
Studies suggest that Magazynskraal has an estimated resource of 23 million 4E PGM ounces.
The Group owns an effective 7.42% interest in the equity shares of Richtrau.
Fair value methodology: Acquisition cost. The Groups revised cost of investment is US$38,477,293. The Groups initial investment was
made in December 2008.The suite of transactions including the acquisition of an incremental 1.23% of Magazynskraal completed during
May 2012. The additional interest has been valued at cost. Richtrau is an unlisted company, with platinum reserves but no operations.
Using similar companies to value Richtrau is relatively difficult as no prospect/company is exactly the same. Valuation is therefore
relatively difficult and subjective. The Directors have assessed the investment for any indicators of impairment, based mainly on PGM
prices and do not believe that any such indicators exist. The Directors believe that the fair value of each of the Groups PGM assets
is appropriate in the context of the anticipated Consolidation and investment by the IDC.
Sedibelo
Nature of investment: Sedibelo is located on the Western Limb of the Bushveld Complex contiguous to PPM and Magazynskraal with
PGM reserves.
Fair value methodology: Price of recent investment acquisition cost. The suite of transactions including the acquisition of the
Groups interest in Sedibelo completed during May 2012 and the interest has been valued at cost. The Groups cost of investment is
US$18,522,197. Sedibelo is an unlisted company, with platinum reserves but no operations. Using similar companies to value Sedibelo
is difficult as no prospect/company is exactly the same. Valuation is therefore relatively subjective. As the Groups investment
was so recent, cost is the best current approximation to fair value. The Directors believe that the fair value of each of the Groups
PGM assets is appropriate in the context of the anticipated Consolidation and investment by the IDC.
Faberge Limited
Nature of investment: Faberge is a luxury brand. The Group currently owns an effective 49.1% interest in the equity shares of Faberge.
The Groups cost of investment is US$60,976,074. The Groups initial investment was made in September 2007.
Fair value methodology: Price of recent investment. Faberge completed a capital raising during September 2009 to both existing and new
investors, including the Group. The Directors valued the investment in Faberge in line with the price per share of this capital raising
in September 2009 and the same valuation has been used subsequently.
Faberge is unlisted, there have been relatively few transactions in Faberge shares and determining the fair value of the Groups
investment is difficult. The Directors have applied the price of recent investment methodology consistently since September 2009,
but acknowledge that the September 2009 capital raising price becomes less recent and relevant as time passes, and that using this
event for valuation becomes more difficult. The Directors have concluded that the current valuation methodology continues to be
reasonable, but stress its subjectivity.
The Directors have considered using other valuation methodologies and in particular whether to use a valuation based on discounted
cash flow (DCF) analysis. DCF analysis is based on various assumptions, including projected cash inflows and outflows, and the
discount rate that should be used. Accordingly, depending on what assumptions are used, DCF analysis could imply a materially higher
or lower valuation for Faberge. The Valuation Guidelines therefore recommend extreme caution in the use of DCF analysis for
aluation of unlisted investments, and note that the use of another methodology, such as the price of a recent investment, is more
likely to be appropriate in most circumstances.
After having considered the relevant evidence, the Directors have concluded that there is no conclusive evidence to either increase
or decrease the Faberge valuation and that the fair value at the previous reporting date remains the best estimate of fair value,
and have continued to use this valuation. This treatment complies with IFRS and is required by the Valuation Guidelines.
Faberges most recent audited annual report for the year to 31 March 2012 was issued on 20 September 2012. The audit opinion,
from BDO LLP, was positive, and did not draw attention to any emphases of matter. Faberges net assets at 31 March 2012 were
US$42 million (audited).
The Groups 49.1% share of Faberges net assets at 31 March 2012 would have been approximately US$20 million, whereas the fair
value of the Groups investment at 30 June 2012 is US$86,633,377. This difference equates to the incremental value added to the
Faberge brand since the initial acquisition during 2007 because, in line with the requirements of IAS38 Intangible Assets,
this internally generated goodwill is not capitalised on Faberges own balance sheet.
In light of continuing difficulty in valuing Faberge, the Directors have agreed to commission a valuation of the Faberge brand
and company. Once this valuation is completed it will help the Directors to determine the fair value of Faberge in future
reporting periods.
5. Completion of Rights Offer
The Company completed a rights offer (the Rights Offer) to shareholders on 25 July 2012. Shareholders had the right to subscribe
for new shares, in relation to their existing shareholdings, at ZAR2.24 per share. The Company has issued 284,648,771 new shares on
25 July 2012, raising ZAR637,613,247 (dollar equivalent is US$79,965,886 before foreign exchange and transaction costs).
The Company formally announced the terms of the Rights Offer on 11 June 2012. Certain existing shareholders agreed to participate
in a pre-placing of their allocation of shares in advance of the completion of the Rights Offer the Pre-placement). The participants
(the Pre-placement Participants) subscribed for 187,647,650 shares between 2 May 2012 and 15 May 2012, for consideration of
ZAR420,330,736 or US$53,363,390 (before foreign exchange and transaction costs). The Pre-placement Participants each received a
fee of 3% of the cost of the shares they had subscribed for (the Pre-placement Fee). The Pre-placement Participants were not able
to sell their Pre-placement shares until after the Rights Offer had completed.
The JSE gave formal approval to the terms of the Rights Offer and the content of the Companys Rights Offer Circular to shareholders
on 8 June 2012. The funds received from Pre-placement Participants were therefore credited to share capital and share premium on
8 June 2012. Previously, Pre-placement Participants were treated as creditors rather than equity holders, to reflect the economic
reality of their position.
Those participating Rights Offer shareholders who subscribed for new shares outside of the Pre-placement paid for their shares
between 16 July and 20 July 2012, the date the Rights Offer completed.
Impact of the Rights Offer on share capital and share premium
Share Share
capital premium
US$ US$
Balance at 30 June 2012 6,637 348,629,339
Rights Offer - issue of shares 970 26,601,526
Rights Offer - costs - (3,448)
Rights Offer - net foreign exchange loss - (272)
Balance at 25 July 2012 7,607 375,227,145
Rights Offer costs
The costs associated with the Rights Offer can be broken down as follows:
Costs (1) US$
Pre-placement Fee 1,519,158
Investment bank fee 500,000
Legal fees 49,009
Stock exchange costs 39,834
Bank costs 35,640
Independent reporting accountant's fee 6,055
Printing, publication, distribution and advertising expenses 38,007
2,187,703
(1) Costs are provisional and subject to change. The total Rights Offer costs of US$2,187,703 includes US$2,184,255 costs incurred
prior to 30 June 2012 and US$3,448 incurred subsequent to 30 June 2012.
Impact of the Rights Offer on interests held by Directors and Partners of the Investment Manager
Following completion of the Rights Offer, interests in the Company held by the Directors were as follows:
Excess Post
Interest Reall- Rights completion
Number of in the Rights offer ocation of Offer of Rights Interest in the
shares held Company at entitlement - Rights shares Offer - Company post
31 December 31 December number of Offer applied number of completion of
2011 2011 shares shares for shares Rights Offer
The Brian Gilbertson
Discretionary Settlement (1) 13,858,985 2.91% 10,402,684 - - 24,261,669 3.19%
Arne H. Frandsen 2,425,821 0.51% 1,820,844 (519,205) - 3,727,460 0.49%
Andrew Willis 1,092,554 0.23% 820,081 519,205 14,214 2,446,054 0.32%
Clive Harris 250,000 0.05% 187,652 - - 437,652 0.06%
17,627,360 3.70% 13,231,261 - 14,214 30,872,835 4.06%
(1) A discretionary trust of which Brian Gilbertson is a beneficiary.
Following completion of the Rights Offer, interests in the Company held by the other Partners of the Investment Manager were as follows:
Post
Interest completion
Number of in the of Rights Interest in the
shares held Company at Rights offer Offer - Company post
31 December 31 December entitlement number of completion of
2011 2011 and takeup shares Rights Offer
Sean Gilbertson 2,385,190 0.50% 1,790,346 4,175,536 0.55%
Priyank Thapliyal 2,385,190 0.50% 1,790,346 4,175,536 0.55%
4,770,380 1.00% 3,580,692 8,351,072 1.10%
6. Cash flows from operations
1 January to 1 January to 1 January to
30 June 2012 30 June 2011 31 Dec 2011
US$ US$ US$
Notes (reviewed) (reviewed) (audited)
Net loss for the period/year (14,584,257) (46,722,507) (72,308,624)
Accrued interest and
structuring fee (576,608) (497,403) (893,057)
Unrealised fair value gains 3 (23,478,958) (6,453,081) (14,533,179)
Unrealised fair value losses 3 38,990,401 117,767,426 150,362,622
Unrealised foreign exchange gains 3 (412,653) (11,547,769) -
Unrealised foreign exchange losses 3 398,049 - 1,395,079
Net loss on Platmin Note - 180,033 180,033
Realised foreign exchange gain on
Jupiter forward contract - - (429,330)
Realised fair value loss on acquisition
of Jupiter shares - 1,048,768 1,478,098
Foreign exchange gain on cash (4,211) (14,235) (14,364)
Foreign exchange loss on cash 354,508 17,078 17,984
Finance income received (253,781) (42,972) (136,228)
Share in (profit)/loss of associates (3,134,545) 2,218,884 4,105,703
Decrease/(increase) in trade and
other receivables (246,670) 1,187,648 33,230
Increase/(decrease) in trade and
other payables 525,945 (32,498,967) (32,602,092)
Deferred tax credit - (26,066,890) (42,113,518)
Net cash outflows from operations (2,422,780) (1,423,987) (5,457,643)
7. Related parties
The Groups subsidiaries, joint ventures and associates are related parties. The Groups Investment Portfolio,
which consists of investments held at fair value through the profit and loss account ("FVTPL") and loans to portfolio
companies, are also considered to be related parties. Related party transactions include the entering into and exiting
from equity investments and loan transactions and are detailed in Note 4 Investments. The Group has completed the
acquisition of an indirect 9.26% interest in Sedibelo during the period, which is now a related party.
The Investment Manager, Administrator and Secretary are all related parties of the Group. The Non-Executive Directors
each receive a Directors fee of US$25,000 per annum from the Company. In addition, certain amounts are payable by the
Company to the Investment Manager, as disclosed in the most recent Annual Report.
As a result of the Rights Offer, the Directors shareholdings have changed, see Note 5 Completion of Rights Offer for
detail. In addition, the amount payable to the Investment Manager as Investment Managers Benefit increased in line with
the increase in amounts subscribed for in the Company. The calculation of the Investment Managers Benefit has subsequently
changed again as a result of the ending of the Investment Period. See Note 12 Events occurring after the end of the period
for more detail.
There have been no other material changes to these relationships or the Companys related parties since the year end.
Transactions entered into with related parties were under terms no more favourable than those with third parties.
The Directors interests in the Company
At 30 June 2012, the Directors interests in the Company had not changed. On 25 July 2012 the Directors interests changed
as a result of their participation in the Rights Offer, see Note 5 Completion of Rights Offer for details.
8. Loss, Diluted Loss and Headline Loss Per Share and NAV per share
There are no reconciling items between headline loss per share (HLPS) and loss per share (LPS). There are no dilutive
items to LPS is equal to Diluted Loss Per Share.
The Company completed its Rights Offer on 20 July 2012 and issued new shares on 25 July 2012. Funds relating to the
Rights Offer were received from the Pre-placement participants between 2 May 2012 and 15 May 2012 and credited to share
capital/share premium on 8 June 2012. This was the date the Rights Offer became unconditional subsequent to the receipt
of approval of the terms of the Rights Offer from the JSE, which was the final outstanding condition. These shares were
issued on 25 July 2012. The 187,647,650 allotted (but unissued) new shares have been included in the number of shares
in issue for the purposes of both Loss Per Share (increasing the weighted average number of shares for the period) and
NAV per share (increasing the number of shares at 30 June 2012).
For more detail on the Companys Rights Offer, see Note 5 Completion of Rights Offer.
30 June 2012 30 June 2011 31 December 2011
US$ US$ US$
(reviewed) (reviewed) (audited)
Loss for the period/year (14,584,257) (49,722,507) (72,308,624)
Weighted average number of shares (1) 498,611,862 475,803,860 475,803,860
Headline Loss Per Share (1) (0.03) (0.10) (0.15)
(1) The weighted average number of shares for the period ending 30 June 2012 is as follows:
Weighted
average
number of
shares for
Period Number of shares Number of days period
Shares in issue 1 January 2012 to 7 June 2012 475,803,860 159 417,971,347
Shares in issue 8 June 2012 to 30 June 2012 663,451,510 22 80,640,515
181 498,611,862
The Groups US$ NAV per share is as follows:
30 June 2012 30 June 2011 31 December 2011
US$ US$ US$
(reviewed) (reviewed) (audited)
Net assets 399,223,192 390,988,604 365,402,487
Number of shares 663,451,5102 475,803,860 475,803,860
NAV per share 0.60 0.82 0.77
A further 97,001,121 shares were issued on 25 July 2012, the date of completion of the Rights Offer.
The issue of these new shares has not affected the Groups calculation of HLPS or NAV per share at
30 June 2012.
(2) The number of shares for the purposes of calculating NAV per share at 30 June 2012 is as follows:
Shares at 1 January 2012 475,803,860
Shares allotted on 8 June 2012 187,647,650
Number of shares at 30 June 2012 663,451,510
The Directors believe that additional disclosure of the impact of the Rights Offer on the Groups NAV per
share would also be helpful to shareholders, accordingly this is presented below. This additional disclosure
is not required by IFRS.
IFRS Non-IFRS
compliant compliant
NAV per
share at
30 June 2012
NAV per Impact of assuming
share at completion of completion of
30 June 2012 Rights Offer Rights Offer
(reviewed) (reviewed) (reviewed)
Net assets in US$ 399,223,192 25,749,4443 424,972,636
Number of shares 663,451,510 97,001,1214 760,452,631
Revised NAV per share in US$ 0.56
(3) The impact of the Rights Offer on net assets is an increase in cash (less attributable costs) received
from shareholders.
(4) A further 97,001,121 new shares (not including shares issued to Pre-placement Participants) were issued
on 25 July 2012 as part of the Rights Offer. This share issue increased the Companys number of shares for
the purposes of calculating NAV per share to 760,452,631.
9. Financial instruments
The Groups only financial instruments that are measured at fair value subsequent to initial recognition are
the equity investments within the Investment Portfolio. The following table provides an analysis of these
financial instruments, grouped into Levels 1 to 3 based on the degree to which fair value is observable:
- Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities;
- Level 2 fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices); and
- Level 3 fair value measurements are those derived from valuation techniques that include inputs for the
asset or liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 Total
30 June 2012 US$ US$ US$ US$
Financial assets at FVTPL
Equity investments (1) 109,963,001 - 210,566,459 320,529,460
109,963,001 - 210,566,459 320,529,460
Level 1 Level 2 Level 3 Total
30 June 2011 US$ US$ US$ US$
Financial assets at FVTPL
Equity investments (1) 216,105,236 - 137,000,863 353,106,099
216,105,236 - 137,000,863 353,106,099
Level 1 Level 2 Level 3 Total
30 December 2011 US$ US$ US$ US$
Financial assets at FVTPL
Equity investments (1) 125,191,591 - 190,456,562 315,648,153
125,191,591 - 190,456,562 315,648,153
(1) On 23 December 2011, Platmin delisted from the JSE. Further detail on the delisting and on the revised
valuation methodology being used were included in the Companys last Annual Report. The investment in Platmin
has been reclassified from listed to unlisted investments in the balance sheet at 31 December 2011, and for the
purposes of IFRS13 Fair value measurement, has been reclassified from Level 1 to Level 3.
IFRS requires the presentation of a reconciliation of the Groups Level 3 financial assets from the beginning
to the end of the period. A reconciliation of the Groups equity investments, from 1 January 2012 to 30 June 2012
is provided below:
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Financial assets at FVTPL - equity investments
Balance at 1 January 2012 125,191,591 - 190,456,562 315,648,153
Fair value gains 23,478,958 - - 23,478,958
Fair value losses (38,990,401) - - (38,990,401)
Foreign exchange gains 412,653 - - 412,653
Foreign exchange losses (129,800) - (268,249) (398,049)
Additions - - 20,378,146 20,378,146
Balance at 30 June 2012 109,963,001 - 210,566,459 320,529,460
The comparative reconciliation of the Groups equity investments, from 1 January 2011 to 30 June 2011 is provided below:
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Financial assets at FVTPL - equity investments
Balance at 1 January 2011 02,349,201 - 137,000,863 439,350,064
Fair value gains 6,453,081 - - 6,453,081
Fair value losses (117,767,426) - - (117,767,426)
Foreign exchange gains 11,547,768 - - 11,547,768
Foreign exchange losses (1,048,768) - - (1,048,768)
Additions 14,571,379 - - 14,571,379
Balance at 30 June 2011 216,105,235 - 137,000,863 353,106,098
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Financial assets at FVTPL - equity investments
Balance at 1 January 2011 302,349,201 - 137,000,863 439,350,064
Fair value gains 14,533,179 - - 14,533,179
Fair value losses (150,362,622) - - (150,362,622)
Foreign exchange gains - - - -
Foreign exchange losses (1,395,079) - - (1,395,079)
Realised foreign exchange gain on Jupiter
forward contract 429,330 - - 429,330
Realised fair value loss on acquisition
of Jupiter shares (1,478,098) - - (1,478,098)
Additions 14,571,379 - - 14,571,379
Platmin reclassification (53,455,699) - 53,455,699 -
Balance at 31 December 2011 125,191,591 - 190,456,562 315,648,153
10. Contingent liabilities and contingent assets
On 31 August 2011, the Company agreed to act as a limited guarantor for the lease of Faberges New York
retail outlet at 694 Madison Avenue. The circumstances relating to the guarantee have not changed since
31 December 2011. The Directors assessment is that the maximum amount of the Groups contingent liability
continues to be US$219,000.
The Group had no other significant contingent liabilities or contingent assets at 30 June 2012 or 31 December
2011. The Groupd had no significant contingent liabilities or contingent assets at 30 June 2011.
11. Commitments
Faberge loan commitment US$50 million
The Group entered into a new loan facility with Faberge on 15 June 2012. The original facility (US$25,000,000
excluding interest) was replaced by a new facility to loan Faberge up to US$50,000,000 (including the original
US$25,000,000, excluding interest).
On 15 June 2012, US$10,000,000 was drawn down. The outstanding amount of the commitment at the balance sheet
date was therefore US$15,000,000. On 20 July 2012, a further US$14,625,000 was drawn down and a US$375,000
structuring fee accrued to the Company; accordingly the loan facility is now fully utilised.
No other commitments existed at the date of signature of these Interim Financial Statements.
12. Events occurring after the end of the period
Completion of the Companys Rights Offer
The Companys Rights Offer to shareholders completed after the end of the period. See Note 5 Completion of
Rights Offer for more detail.
Further drawdown of Faberge loan commitment
The Group entered into a new loan facility with Faberge on 15 June 2012. The original facility (US$25,000,000
excluding interest) was replaced by a new facility to loan Faberge up to US$50,000,000 (including the original
US$25,000,000, excluding interest).
The outstanding amount of the commitment at the balance sheet date was US$15,000,000.
On 20 July 2012, a further US$14,625,000 was drawn down and a US$375,000 structuring fee accrued to the Company;
accordingly the loan facility is now fully utilised.
Participation in Jupiter capital raising - August 2012
On 19 July 2012, Jupiter announced that it would undertake a capital raising to support the development of its
manganese and iron ore assets in South Africa and Australia. The first element of the equity raising was an AUD40
million private placement at AUD0.16 per share to Stichting Pensioenfonds ABP (ABP), the Netherlands-based
institutional investor, and another Pallinghurst Co-Investor). The private placement increased the number of
Jupiter shares in issue and therefore decreased PRLs percentage interest in Jupiter from 16.66% to 14.64%.
On 13 August 2012, Jupiter announced the second element of the equity raising, a rights offer to existing shareholders
(the Jupiter Rights Offer). The terms of the Jupiter Rights Offer were that each Jupiter shareholder was entitled
to subscribe for five new ordinary shares for every 19 shares held (as at 8 August 2012). The issue price was AUD0.16
per share. The Jupiter Rights Offer completed on 27 August 2012. The Group subscribed for all of its entitlement
of 79,216,009 shares, at a cost of AUD12,674,561. The Groups new Jupiter shareholding is 380,236,843 of the
2,281,835,383 shares in issue. Following its participation in the Jupiter Rights Offer, the Groups interest
in Jupiter increased to 16.66%.
End of the Investment Period on 14 September 2012
The Investment Period commenced on 14 September 2007 and ended on 14 September 2012, the fifth anniversary of
the Initial Closing Date.
The Investment Manager is entitled to an Investment Managers Benefit each accounting period. Prior to the end of
the Investment Period, this was calculated as 1.5% per annum of the amount subscribed for shares in the Company.
With effect from the end of the Investment Period, the basis for calculation changed to be 1.5% per annum of the
lesser of the aggregate acquisition cost or fair value of the Companys unrealised investments per the Companys
most recent financial statements. The change in the basis of the calculation currently has the effect of reducing
the Investment Managers Benefit.
It is not possible to calculate the future annualised Investment Managers Benefit as the amount will fluctuate
with the valuation of the Companys investments and would also be affected by any asset acquisitions or disposals.
Independent Review Report
The Interim Report has been reviewed by the Companys auditor, Saffery Champness. The Independent Review Report
from the auditor is available from the registered office of the Company. The report confirms that nothing has
come to the auditors attention that might cause them to believe that the Interim Report was not prepared,
in all material respects, in accordance with IAS34 and the AC500 accounting standards.
Pallinghurst Resources Limited
(Incorporated in Guernsey)
(Guernsey registration number: 47656)
(South African external company registration number 2009/012636/10)
Share code on the BSX: PALLRES
ISIN: GG00B27Y8Z93
Share code on the JSE: PGL
(Pallinghurst or the Company)
EXECUTIVE DIRECTORS: Brian Gilbertson, Arne H. Frandsen, Andrew Willis INDEPENDENT NON-EXECUTIVE DIRECTORS:
Stuart Platt-Ransom (1), Clive Harris, Martin Tolcher, Patricia White(1) ,Brian OMahoney(1) ADMINISTRATOR, SECRETARY
AND REGISTERED OFFICE: Legis Fund Services Limited, 11 New Street, St Peter Port, Guernsey, GY1 3EG, Channel Islands
TRANSFER SECRETARIES: Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001, South
Africa AUDITOR: Saffery Champness, PO Box 141, La Tonnelle House, Les Banques, St Sampson, Guernsey, GY1 3HS, Channel
Islands JSE SPONSOR: Investec Bank Limited, 100 Grayston Drive, Sandown, Sandton, 2196, South Africa BSX SPONSOR:
Capital G BSX Services Limited, 25 Reid Street, 4th Floor, Hamilton, HM11, Bermuda
(1) Ms White acted as Permanent Alternate to Mr Platt-Ransom and Mr Tolcher until 29 February 2012. On the same date,
Ms White was appointed as a Director, and Mr OMahoney was appointed as Permanent Alternate to Mr Platt-Ransom and Ms White
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