Wrap Text
Condensed reviewed provisional results for the year ended 31 August 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 Company" or "the Group")
Highlights
* Agreement reached, subject to shareholder approval, for the conversion of R41.7 million debt to equity after year end
* General issue of shares for cash raising R8.5 million
* Significant progress made in settling litigation matters
Condensed reviewed provisional results for the year ended 31 August 2012
Condensed statement of financial position as at 31 August 2012
Restated Restated
Reviewed audited audited
year ended year ended year ended
31 August 31 August 31 August
2012 2011 2010
Notes R000 R000 R000
Assets
Non-Current Assets 41 645 46 976 63 431
Property, plant and
equipment 17 044 19 711 15 093
Other financial assets - 2 438 2 468
Intangible assets 11 24 601 24 827 45 870
Current Assets 8 433 6 022 27 458
Trade and other receivables 1 818 3 311 2 905
Other financial assets 3 323 - -
Cash and cash equivalents 3 292 2 711 24 553
Total Assets 50 078 52 998 90 889
Equity and Liabilities
Equity (8 277) 12 468 68 804
Total capital 121 945 115 051 115 051
Accumulated loss (128 004) (100 830) (45 384)
Equity attributable to
equity holders of the parent (6 059) 14 221 69 667
Non-controlling interest (2 218) (1 753) (863)
Liabilities 58 355 40 530 22 086
Non-Current Liabilities 791 1 832 2 760
Finance lease obligation - 755 1 815
Deferred tax - 327 221
Provision for rehabilitation 791 750 724
Current Liabilities 57 564 38 698 19 325
Loans from shareholders 5 41 698 16 268 2 928
Finance lease obligation - 1 056 965
Operating lease liability - 27 22
Trade payables 4 117 7 715 7 329
Other payables 6 11 749 13 632 8 081
Total Equity and Liabilities 50 078 52 998 90 889
Net asset value per share
(cents) 2 (2,53) 4,38 24,18
Net tangible asset value
per share (cents) 2 (10,05) (4.34) 8,06
Number of shares in issue
(000) 327 187 284 511 284 511
Condensed consolidated statement of comprehensive income for the year ended 31 August 2012
Reviewed Audited
year ended year ended
31 August 31 August
2012 2011
Notes R000 R000
Operating loss before
interest and tax (26 147) (54 494)
Investment revenue 48 268
Fair value adjustment 126 (30)
Finance costs (1 994) (774)
Loss before taxation (27 967) (55 030)
Taxation 327 (106)
Loss for the year (27 640) (55 136)
Total comprehensive loss (27 640) (55,136)
Loss and total comprehensive
loss attributable to:
Equity holders of the parent (27 174) (54 063)
Non-controlling interest (466) (1 073)
(27 640) (55 136)
Reconciliation of headline loss
Basic loss for the year (27 174) (54 063)
Adjusted for
- Profit on sale of non-current asset 1 966 -
- Profit on sale of investment 16
- Profit on sale of mining property 179 -
- Impairments (net of non
controlling interest) - 22 114
(25 013) (31 949)
Weighted average number of shares
in issue (000) 287 317 284 511
Loss per share (cents) 2 (9,46) (19,00)
Headline loss per share (cents) 2 (8,71) (11,23)
Condensed consolidated statement of cash flow and for the year ended
31 August 2012
Reviewed Audited
year ended year ended
31 August 31 August
2012 2011
Notes R000 R000
Net cash from operating activities (33 160) (25 387)
Net cash from investing activities 3 228 (8 393)
Net cash from financing activities 30 513 11 938
Total cash and cash equivalents
movement for the year 581 (21 842)
Cash and cash equivalents at the
beginning of the year 2 711 24 553
Total cash and cash equivalents
at the end of the year 3 292 2 711
Condensed consolidated statement of changes in equity as at
31 August 2012
Stated Share Total Accumulated
capital premium capital loss
Balance at
01 Sep 2010 - audited 2 845 112 206 115 051 (45 383)
Total comprehensive
loss for the year - - - (54 063)
Business combinations - - - (1 384)
Total changes - - - (55 447)
Balance at
01 Sep 2011 - audited 2 845 112 206 115 051 (100 830)
Total comprehensive
loss for the year - - (27 174)
Conversion of par
value ordinary shares
to no par value
ordinary shares 112 206 (112 206)
Share issue 6 894 - 6 894 -
Total changes 119 100 (112 206) 6 894 (27 174)
Balance at 31 August
2012 - reviewed 121 945 - 121 945 (128 004)
Total
attributable Non
to equity controlling Total
holders interest after
of parent ("NCI") NCI
Balance at 01 Sep 2010 - audited 69 668 (863) 68 805
Total comprehensive loss for the
year (54 063) (1 073) (55 136)
Business combinations (1 384) 184 (1 200)
Total changes (55 447) (889) (56 336)
Balance at 01 Sep 2011 - audited 14 221 (1 752) 12 469
Total comprehensive loss for the
year (27 174) (466) (27 640)
Conversion of par value ordinary
shares to no par value ordinary
shares - -
Share issue 6 894 - 6 894
Total changes (20 280) (466) (20 746)
Balance at 31 August 2012 - reviewed (6 059) (2 218) (8 277)
1. Basis of preparation
The Group reviewed condensed provisional results for the year ended 31 August 2012 have been prepared in accordance with the groups accounting policies, which comply with International Financial Reporting Standards as well as the AC 500 standards as issued by the Accounting Practices Board, IAS 34 - Interim Financial Reporting, the Listings Requirements of the JSE Limited and the Companies Act of South Africa and are consistent with those of the previous period. They have been prepared under the supervision of the Groups Finance Director, Carina de Beer CA (SA). All monetary information is presented in the functional currency of the Company being South African Rand. The Groups principal accounting policies and assumptions have been applied consistently over the current and prior financial period. Refer to note 8 for a statement on going concern.
2. Financial review
The Group reported a basic loss of 9.46 (2011: 19.00) cents per share, headline loss of 8.71 (2011: 11.23) cents per share, negative net asset value of 2.53 (2011: net asset value of 4.34) cents per share and a net negative tangible asset value of 10.05 (2011: negative 7.58) cents per share. The negative net asset value of 2.53 cents per share is mainly due to a provision for a PAYE of R4.7 million and increased costs in relation to the companys current operational and litigious matters.
Current liabilities (excluding the loan conversion amount of R41.7 million) of R15.8 million (2011: R38.7 million) exceed current assets of R8.4 million (2011: R6 million). Current liabilities consist of trade payables of R4.1 million and other payables of R11.7 as detailed in note 6.
3. Prior period restatement
In prior years the provision for rehabilitation was recorded using the value of the rehabilitation guarantee required by the Department of Mineral Resources. This amount required was determined based on expected levels of mining activities. To date, only site establishment has occurred resulting in an estimated rehabilitation liability as at the reporting date of R0.8 million. As a result, the comparative figures have been restated by reducing the rehabilitation liability from R9.2 million in 2010 to R0.8 million in 2012 as well as the corresponding reduction in intangible assets and property, plant and equipment. As the restatement only affects tangible net asset value, a restatement is only required on the consolidated statements of financial position which now reflect the correct liability for rehabilitation.
4. Auditors review opinion
These provisional results have been reviewed by the Groups auditors, PKF (JHB) Inc. and their review report, with an emphasis of matter, is available for inspection at the Companys registered office.
The emphasis of matter paragraph relates to the going concern assumption which is dependent on the successful outcome of the various matters detailed under note 8 - statement on going concern.
PKF (JHB) Inc was appointed as auditors during the current year.
5. Subsequent events
5.1 Loan conversion - Incubex loan
On 9 November 2012 Miranda reached agreement with Incubex in terms of which existing debt will be converted into shares. Incubex
agreed to the conversion of their full outstanding debt amounting to R38.9 million into equity. The price at which the outstanding loans will be converted is 18.16 cents resulting in 214 165 508 new Miranda shares to be issued in terms of a specific issue of shares. The above mentioned conversion is subject to regulatory approvals and shareholder approval. A terms announcement will be released in due course.
5.2 Loan conversion - Satiolor loan
On Friday, 9 November 2012, Miranda signed a convertible loan agreement with Satiolor (Proprietary) Limited ("Satiolor") for a loan of R2, 5 million in order to settle part of a claim against the Company by Yakani.
The above mentioned conversion is subject to regulatory approvals and shareholder approval and a terms announcement will be released in due course.
6. Other payables
6.1 SSMS
As previously reported, the arbitration proceedings between SSMS, regarding outstanding amounts and claims in respect of a mining contract with SSMS, remain on hold pending the outcome of settlement negotiations. The parties are currently in the process of negotiating a settlement. R7 million has been accrued for in the year end results and is included in other payables.
6.2 SARS
Included in other payables is an amount of R4.8 million claimed by the South African Revenue Services ("SARS") in relation to PAYE that was not deducted by the Company and paid over to SARS. The Groups legal counsel is of the view that Miranda has a strong case to succeed with its objection to the claim.
7. Group Segmental Analysis
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by Management in order to allocate resources to the segments and to assess their performance. 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 annual 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 R000) Coal Diamonds Gold
Reviewed year ended 31 August 2012
Segment result: Loss before taxation (6,706) (126) (30)
Taxation 277 33 7
Loss after taxation (6,429) (93) (23)
Segment assets 44,030 271 69
Mining properties 16,636 - -
Development properties 3,920 - -
Exploration and evaluation asset 11,026 271 69
Mineral rights 8,929 - -
Other assets 3,519 - -
Segment liabilities (9,152) (359) (72)
Restated audited year ended
31 August 2011
Segment result: Loss before taxation (6,686) (1,599) (344)
Taxation (90) (11) (2)
Loss after taxation (6,776) (1,610) (346)
Segment assets 47,710 643 144
Mining properties 16,595 - -
Capital work-in-progress 3,920 - -
Exploration and evaluation asset 11,218 293 74
Mineral rights 8,929 - -
Other assets 7,048 350 70
Segment liabilities (10,439) (348) (70)
Base
Metals &
Industrial
(Figures in R000) Minerals Other Group
Reviewed year ended
31 August 2012
Segment result:
Loss before taxation (45) (21,060) (27,967)
Taxation 10 - 327
Loss after taxation (35) (21,060) (27,640)
Segment assets 586 5 122 50,078
Mining properties - - 16,636
Development properties - - 3,920
Exploration and evaluation asset 75 - 11 441
Mineral rights 311 - 9 240
Other assets 200 5,122 8 841
Segment liabilities (108) (48,664) (58,355)
Restated audited year ended
31 August 2011
Segment result:
Loss before taxation (22,592) (23,809) (55,030)
Taxation (3) - (106)
Loss after taxation (22,595) (23,809) (55,136)
Segment assets 718 3,783 52,998
Mining properties - - 16,595
Capital work-in-progress - - 3,920
Exploration and evaluation asset 82 - 11,667
Mineral rights 311 - 9,240
Other assets 325 3,783 11,576
Segment liabilities (104) (29,569) (40,530)
8. Statement on going concern
The financial statements set out in this report are the responsibility of the Companys directors. They have been prepared by Management on the basis of appropriate accounting policies which have been consistently applied and which are supported by prudent judgments and estimates. The financial statements have been prepared in accordance with International Financial Reporting Standards and on the basis of accounting policies applicable to going concern. The following matters are impacting on the Groups ability to continue as a going concern and are reviewed by the directors on a regular to basis to evaluate and assess the Groups ability to function as a going concern:
* Loss for the year - the Group incurred a loss of R27.6 million (2011: R55 million);
* Net current liability position - (excluding the loan conversion amount of R41.7 million) is R7.4 million (2011: R32.7 million);
* Cash flow - on 15 October 2012 the Company concluded a subscription agreement with Russell Stone Green Investments (Proprietary) Limited, to subscribe for 46 806 167 new Miranda Shares at a price of 18.16 cents per share. The shares will be listed on the JSE on 10 December 2012] after receipt of the subscription proceeds of R8.5 million which will be used to ensure that the Group is sufficiently funded until it generates production revenue;
* Loans - agreement has been reached to convert outstanding loans in amount of R47.1 million into equity;
* SSMS claim - the parties agreed a settlement of R8 million in full and final settlement of all disputes, subject to a formal settlement agreement being concluded on or before 23 November 2012; refer to paragraph 10 for details of the original dispute;
* Production - the Group has made progress with its negotiations to conclude an off take agreement for the Sesikhona project;
* The Group has been granted a R15 million insurance guarantee facility which can potentially free up a further R3.5 million in cash from existing cash guarantees in favour of the DMR, subject to execution of an off take agreement mentioned above; and
* Litigious matters are largely resolved save for matters as disclosed under paragraph 6.
In view of all of the above, the Board of Miranda is satisfied with the progress made in terms of all of the above as well as the improvement of the Groups debt to equity ratio after year end. It is also of the view that upon execution of an off take agreement the Group will be sufficiently self-funded. The litigious matters are being vigorously defended and the board is of the view that the potential contingencies are not material to the Groups overall position.
9. Dividends
No dividends were recommended or declared for the period under review (2011: nil).
10. Contingent liability
Management applies its judgment to the probabilities and advice it receives from its advisers in assessing if an obligation is probable, more likely than not or remote. At year end the Group had the following contingent liabilities:
10.1 A possible claim by SSMS for damages in an amount of R70 million. Sesikhona Kliprand Colliery (Proprietary) Limited has instituted a counter claim for damages for R10.6 million. The parties have however, subsequent to year end, agreed a settlement, subject to a formal agreement being concluded by 23 November 2012 as detailed above. The settlement agreed amounts to the liability included in the financial statements as detailed in paragraph 6.1 plus approximately R1 million worth of costs incurred after year end.
10.2 Yakani has instituted action against the Company (and former directors and Management of the Company) for the amount of R36.5 million arising out of alleged misrepresentations pertaining to the prospecting right application made by Miranda Minerals (Proprietary) Limited, a subsidiary of the Company, in respect of the Rozynenbosch farm. This claim is currently being vigorously defended by the Company and it strongly denies that there was any misrepresentation.
11. Operational review
During the past months Management completed the review of all the projects in this Division. This exercise resulted in the consolidation of various Prospecting Rights and Mining Rights into two focus project areas, namely the Sesikhona and Burnside Projects. Management has concentrated on ensuring that all compliance issues are resolved so as to ensure that mining can commence in 2013 on both Projects. Consideration is being given to the disposal of those rights that fall outside of the main project areas as well as the rights over properties that are too small to exploit as stand-alone projects.
11.1 Sesikhona project
Negotiations with a preferred Mining Contractor have reached an advanced stage and it is anticipated the discussions will be finalised during 2012. A Buyer for the Sesikhona anthracite has been identified and a Coal Sale Agreement will be concluded subject to all compliance issues being in place. Mining is scheduled to commence during the third quarter of 2013.
11.2 Burnside project
The Mining Right over the Burnside property has been executed. A scoping study has been commissioned which will be completed by mid-November 2012 and environmental studies are being undertaken to ensure the issuing of the Integrated Water Use Licence. Early stage discussions with interested off-takers are being held.
11.3 Uithoek project
Several attempts have been made to renegotiate the JV agreement with the Simpson family, who are the holders of the mining right, but these have been unsuccessful. Management is now in the process of assessing the situation and exploring avenues in order to recover both costs incurred to-date and potential earnings lost.
11.4 Boschhoek project
Discussions with representatives of the SANDF are on-going in respect of access onto the Farm Boschhoek. Although entry to the underground mining operations on this farm can be gained from Burnside it will be necessary to have very limited surface access in order to sink ventilation shafts. Further information regarding the progress of the discussions will be provided when available.
11.5 Acquisitions
Prospecting Rights over 10 farms in the Dannhauser, Vryheid and Newcastle districts have been acquired. These properties will complement the existing rights which are already held in the respective areas. The rights are held in four companies all of which are now subsidiaries of Miranda Coal.
No material change occurred during the six months period from 29 February 2012 to 31 August 2012.
12. Changes to the board
Ms. C de Beer was appointed Financial Director with effect 8 October 2012, after the resignation of Ms. M vd Merwe on 26 June 2012. Mr. M Yates, an independent non-executive director of the Company, has been appointed as Lead Independent Director of the Board with effect 9 October 2012.
13. Strategic review and future prospects
The Boards main focus is to bring the Groups assets to account and is of the view that the Group is well positioned to fast track its projects to generate production revenue. The strengthening of the executive committee and recent additions to the Board facilitated a process of reviewing the Groups current assets and defining a strategy going forward that will enhance shareholder value and bring the Groups assets to account. The Board is also continuously seeking new investment opportunities and potential acquisitions that will progress its strategy and vision.
With most litigious matters resolved and a potential off take on Sesikhona, the Group is set to commence production Q3-2013.
14. Cautionary announcement
Further to the advanced discussions referred to in paragraph 11.1 supra, which if successfully concluded, may have a material effect on the price of Miranda ordinary shares. Shareholders are therefore advised to exercise caution when dealing in the securities of the Company until a further announcement is made in this regard.
For and on behalf of the Board
M Gous
Company Secretary
Centurion
14 November 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 Gous, Nr 56 Regency Road,
Route 21 Corporate Park, Nellmapius Drive, Irene, Centurion
(PO Box 68528, Highveld, 0169)
Tel: 082 896 0548
Company registered office:
Ground Floor, Pecanwood Building, The Greens Office Park,
Charles de Gaulle Crescent, Highveld Techno Park, Centurion
Postal address:
PO Box 1045, North Riding, 2162
Tel: 012 665 4200
Fax: 012 665 4258
Email: info@mirandaminerals.com
Web: www.mirandaminerals.com
Date: 14/11/2012 01:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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