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MINE RESTORATION INVESTMENTS LTD - Unaudited interim financial results for the 6 months ended 31 August 2013

Release Date: 18/11/2013 11:40
Code(s): MRI     PDF:  
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Unaudited interim financial results for the 6 months ended  31 August 2013

MINE RESTORATION INVESTMENTS LIMITED
(formerly Capricorn Investment Holdings Limited)
(Registration Number 1987/004821/06)
("MRI" or "the Company")
Share code: MRI ISIN: ZAE000149951


UNAUDITED INTERIM RESULTS for the 6 months ended 31 August 2013


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


                                            6-months to   8-months to    14-months
                                            August 2013   August 2012   to February
                                                                            2013
                                               R’000         R’000         R’000
Other income                                          -            29         20 021
Operating (expenses)/recoveries                 (4 093)         3 985        (9 048)
Operating (loss)/profit                         (4 093)         4 014         10 973
Investment revenue                                    5            91            177
Interest expense                                (2 707)       (2 023)        (4 908)
(Loss)/Profit before taxation                   (6 795)         2 082          6 242
Taxation credit/(charge)                          1 550           244      (11 415)
(Loss)/Profit for the period                    (5 245)         2 326        (5 173)
Other comprehensive income                            -             -              -
Total comprehensive (loss)/income               (5 245)         2 326        (5 173)
(Loss)/Profit attributable to:
Equity holders                                  (4 283)         2 375       (5 095)
Non-controlling interests                         (962)          (50)          (78)
Total comprehensive (loss)/income
attributable to:
Equity holders                                  (4 283)         2 375       (5 095)
Non-controlling interests                         (962)          (50)          (78)
Basic and diluted earnings/(loss)
per share                                        (0.91)          0.01        (1.74)
Basic     and    diluted    headline
earnings/(loss) per share                        (0.91)          0.01        (1.74)
Weighted   average   number   of   shares
(‘000)                                          468 413       168 734       292 106
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                        31 August    31 August       28 February
                                           2013         2012             2013
                                          R’000        R’000            R’000
Assets
Non-Current Assets
Property, plant and equipment               14 404         2   950        10 798
Intangible assets                           91 284        92   144        92 411
Investment in associate                                    1   000
Deferred tax                                 1 550         6   380         7 173
                                           107 238       102   474       110 382

Current Assets
Trade and other receivables                    521           127             610
Cash and cash equivalents                    3 270        10 890             314
                                             3 791        11 017             924
Total Assets                               111 029       113 491         111 306

Equity and Liabilities
Equity
Amount attributable to equity holders       38 565        59 405          39 886
Equity loan                                  5 000                         5 000
Non-Controlling Interest                    16 390        16 380          17 352
                                            59 955        75 785          62 238

Liabilities
Non-Current Liabilities
Deferred tax                                18 464        13 177          25 626
Other financial liabilities                 25 768        24 213          22 002
                                            44 232        37 390          47 628

Current Liabilities
Other financial liabilities                  6 795             -               -
Trade and other payables                        31           316           1 407
Current tax payable                             16             -              33
                                             6 842           316           1 440
Total Equity and Liabilities               111 029       113 491         111 306
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                 Share       Retained        Amount        Non-          Total equity
                 capital,    earnings        attributable Controlling
                 Share                       to     Equity Interest
                 Premium and                 Holders
                 Reverse
                 Acquisition
                 Reserve
                    R’000        R’000          R’000        R’000          R’000
Group
Balance at 1               -        (952)           (952)      16 430          15 478
January 2012
Reverse               17 952             -         17 952            -         17 952
acquisition
Issue       of        40 028             -         40 028            -         40 028
additional
shares
Total                      -        2 376           2 376        (50)           2 326
comprehensive
profit/(loss)
for        the
period
Total changes         57 980        2 376          60 356        (50)          60 306
Balance at 31         57 980        1 424          59 404      16 380          75 784
August 2012
Reverse             (49 019)             -       (49 019)            -       (49 019)
acquisition
Issue       of        36 972             -         36 972       1 000          37 972
additional
shares
Total                      -      (7 471)         (7 471)        (28)         (7 499)
comprehensive
loss for the
period
Total changes       (12 047)      (7 471)        (19 518)         972        (18 546)
Balance at 28         45 933      (6 047)          39 886      17 352          57 238
February 2013
Issue       of         2 962             -          2 962            -          2 962
additional
shares
Total                      -      (4 283)         (4 283)       (962)         (5 245)
comprehensive
loss for the
period
Total changes          2 962      (4 283)         (1 321)       (962)         (2 283)
Balance at 31         48 895     (10 330)          38 565      16 390          54 955
August 2013
     CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                                               6 months to    8 months to       14 months
                                               August 2013    August 2012      to February
                                                                                   2013
                                                  R’000          R’000            R’000
     Cash flows utilised in operating
     activities
     Cash (utilised in)/from operations            (4 219)          4 910              386
     Interest income                                     5             91              177
     Finance costs                                 (2 707)        (2 023)          (4 908)
     Taxation refunded / (paid)                       (18)            (7)                8
     Cash (utilised in)/from operating             (6 939)          2 971          (4 337)
     activities

     Cash flows from investing activities
     Purchase of property, plant and               (3 627)        (2 948)         (10 814)
     equipment
     Net cash acquired on reverse                                   3 694
     acquisition
     Net cash available from/(utilised in)         (3 627)               746      (10 814)
     investing activities

     Cash flows from financing activities
     Proceeds on raising of new share                2 962         40 029           38 215
     capital
     (Repayment of)/Proceeds on advance of                -      (35 295)         (27 977)
     loans from Group companies
     Increase in other financial liabilities        10 560          1 855            4 643
     Net cash available from financing              13 522          6 589           14 881
     activities

     Total cash movement for the year                2 956         10 306            (270)
     Cash and cash equivalents at the                  314            584             584
     beginning of the year
     Cash and cash equivalents at end of the         3 270         10 890             314
     period


     COMMENTARY

1.   BASIS OF PREPARATION

     These condensed consolidated financial statements have been prepared under
     the supervision of A Meyer in accordance IFRS, SAICA Financial Reporting
     Guides  as   issued by  the    Accounting  Practices  Committee and  Financial
     Pronouncements as issued by    the Financial Reporting Standards Council, the
     Companies Act No 71 of 2008, as amended and the JSE Limited Listings
     Requirements and include the disclosures required by IAS34 Interim
     Financial Reporting.

     The financial statements have been prepared using accounting policies that
     comply with IFRS and which are consistent with those applied in the
     preparation of the financial statements for the 14 month period ended 28
     February 2013.
2.   REVERSE-ACQUISITION AND CHANGE IN FINANCIAL PERIOD

     During the previous financial year, MRI (formerly Capricorn Investment
     Holdings Limited) was, from an IFRS perspective, acquired by Western
     Utilities Corporation (Pty) Limited (“WUC”) by way of a reverse-
     acquisition. The acquisition is a reverse-acquisition in terms of IFRS 3
     Business Combinations. Accordingly, MRI is regarded as the legal parent
     and accounting acquired and WUC is regarded as the legal subsidiary
     company and the accounting acquirer. In accordance with this accounting
     treatment, the following has taken place:
        a) The identifiable assets and liabilities of MRI were brought into the
           books and measured at their fair-value;
        b) The condensed consolidated financial statements issued are those of
           MRI, the legal parent and accounting acquirer, but are described in
           the notes as a continuation of the financial statements of WUC, the
           legal subsidiary company and accounting acquirer. WUC’s results have
           been adjusted to retrospectively reflect the legal capital of MRI.
           As such, the financial statements reflect a continuation of the
           financial statements of WUC.
        c) The year-end of WUC was 31 December of every year. CIPC approved the
           change of the year-end of WUC to the last day of February every
           year, in line with the year-end of MRI. Accordingly, the prior year
           results for MRI are shown for a 14-month period to 28 February 2013.

3.   AUDITOR REVIEW

     These condensed consolidated financial statements have not been reviewed
     by the external auditor.

4.   COMMENTARY

     HISTORIC PERSPECTIVE

     MRI changed its name from Capricorn Investment Holdings Limited to reflect
     the new nature of its business and the new focus of the Company post the
     acquisition of WUC. The acquisition of WUC has created two strategic focus
     areas for the Company, namely Coal Fines Briquetting (“Coal Briquetting
     Project”) and Acid Mine Drainage (“AMD Project”). Both these projects are
     focused on reducing the environmental impact of mining, whilst at the same
     time aiming to produce a significant return on investment of shareholders.
     The Coal Briquetting Project was commissioned in the third quarter of the
     2013 calendar year and should take three months to reach full production.
     This project is expected to provide a significant return on capital
     invested. Revenues generated from this project will be used to repay
     existing debt within the Group, further capitalise the Company and will be
     used to provide the capital to invest and grow this part of our business.

     With regards the AMD Project, the South African government is currently
     drafting its findings of a pre-feasibility study conducted by the
     department on the various technologies available for AMD treatment. WUC
     has already completed a Bankable Feasibility Study for the project,
     including   documenting   engineering  and   environmental    authorisation
     processes. This project remains a strategic focus area of the Company and
     WUC intends to participate in the process should the department elect to
     engage in Public Private Partnerships or any other structure.
     The Company also intends to explore other potential applications for the
     Intellectual Property (“IP”) held by the company.

     RESULTS OF OPERATIONS

     The results of the operations of MRI, and its subsidiary company, WUC
     (“the Group”), for the 6-month period ended 31 August 2013 reflects the
     ongoing cost of the Group while it built and commissioned the Coal
     Briquetting Project’s plant. Revenue from the Coal Briquetting Project is
     expected during the fourth quarter of the 2013 calendar year.

     The value for the briquetting project is based on a discounted cash flow
     model of the resources that is included in the agreement with Leeuw Mining
     and Keaton and the plant being constructed at the Vaalkrantz Colliery
     site. Once this plant is operational the intention is to expand to the
     larger coal producers who produce significantly more fines although at
     lower grades.

     WUC intends to tender for the long term acid mine drainage solution and
     therefore according to the Bankable Feasibility Study the information we
     have generated over the past 5 years is well worth R44 million. This is
     not the only AMD project in the world and the technology and information
     generated has application in other areas like South and North America.

     Interest paid has been reduced and now only relates to the repayment of
     interest bearing loans raised pursuant to the reverse-listing of WUC into
     MRI.

     Taxation credits and charges primarily result from adjustments to deferred
     taxation.

     FUTURE PROSPECTS

     The Coal Briquetting Project has commenced operations in October 2013 and
     should contribute significantly to the overall profitability of the Group.

     The directors of MRI intend to continue to pursue the awarding of the
     water use licenses required by WUC for its AMD technology as well as for
     other potential applications of its IP.

5.   SEGMENT INFORMATION

     The group is not presently managed by segment. Accordingly, no segment
     information is provided. As operations become established, this will
     likely change.
6.   HEADLINE EARNINGS/(LOSS) PER SHARE

     Reconciliation of earnings to headline earnings attributable to equity
     holders of the parent:

                                           6-months to       8-months to       14-months to
                                           August 2013       August 2012       February
                                               R’000             R’000         2013
                                                                                   R’000
     Loss per share                               (0.91)              0.01            (1.74)
     Headline loss per share                      (0.91)              0.01            (1.74)

     HEPS Calculation

     (Loss)/Profit for the year                  (4 283)           (2 376)          (5 095)

     Adjustments
     Gain on bargain purchase price, net                 -                 -              -
     of tax
     Headline loss                               (4 283)           (2 376)          (5 095)

     Weighted average number of shares           468 413           168 733          292 106
     in issue (‘000)
     Actual number of share in issue             470 704           455 695          455 891
     (‘000)

7.   CHANGES IN SHARE CAPITAL

     During the year, the Company issued 14 812 520 new shares in order to
     raise cash for the completion of the briquetting plant. The proceeds of
     this issue amounted to R 2 962 504.

8.   RELATED PARTY TRANSACTIONS

     As the largest shareholders, Trinity Asset Management Proprietary Limited
     and Armadale Capital have committed to jointly bridge any shortfall in the
     working capital of MRI to the maximum value of R11 million for the period
     ending 31 December 2013.

     Other than mentioned above, and other than loans advanced or received in
     the normal course of business, there have been no significant changes in
     the related party relationships during the year.

9.   EVENTS AFTER THE END OF THE REPORTING PERIOD

     No significant transactions, which require disclosure, have occurred since
     the end of the period to the date of this announcement.

10. CHANGES TO THE COMPOSITION OF THE BOARD

     During the half year period, up to date of this report, the following
     resignations and appointments of directors occurred:

     Resignations:
     Charles Pettit – 18 April 2013;
     Sandile Swana – 31 July 2013;
     Steve Tredoux – 3 September 2013;
      James Herbst – 3 September 2013;
      Michelle van den Berg – 30 September 2013; and
      Jaco Schoeman – 15 November 2013

      Appointments:
      Richard Tait – 18 April 2013;
      Justin Lewis – 18 September 2013; and
      Syd Caddy – 18 November 2013

      Change of role:
      Anthon Meyer accepted the position of Financial Director as of 1 October
      2013.

      With the resignation of J Schoeman as CEO of the Company, Mr R Tait,
      current non-executive director will take over as Chief Executive Officer
      (“CEO”) with effect from 15 November 2013 until a suitable, permanent
      candidate is identified.

      The new board now consists of the following directors:

      Quinton George – Non-Executive Chairman
      Richard Tait – CEO
      Anthon Meyer – Financial Director
      Chris Roed – Independent Non-Executive Director
      Justin Lewis – Non-Executive Director
      Syd Caddy – Independent Non-Executive Director

11.     DIVIDENDS

      No dividend will be declared for the financial period ended 31 August
      2013. (2012: Nil).


      18 November 2013
      Johannesburg

      Q George                            Prepared by: A Meyer


      CORPORATE INFORMATION

      Mine Restoration Investments Limited

      Country of incorporation and domicilium:   South Africa

      Postal address

      PO Box 825, Irene, 0062, Pretoria

      Tel no:+27 (012) 345 4037
      Fax no:+27 (012) 345 4808
      Web: www.minerestoration.co.za

      Directors: Q George# (Chairman), A Meyer, C Roed*, J Lewis#, R Tait
      (CEO), S Caddy*
(#Non-Executive, * Independent Non-Executives)

Company Secretary: Neil Esterhuysen & Associates Inc

Registered Office: Units 23&24 Norma Jean Square, 244 Jean Avenue,
Centurion

Transfer Secretaries: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Marshalltown 2001, PO Box 61051, Marshalltown
2107

Auditor: Horwath Leveton Boner

Corporate Advisor: AfrAsia Corporate Finance Proprietary Limited
Designated Advisor: Sasfin Capital (a division of Sasfin Bank Limited)

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