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MIRANDA MINERAL HOLDINGS LIMITED - Condensed reviewed provisional results for th year ended 31 August 2013

Release Date: 28/11/2013 16:50
Code(s): MMH     PDF:  
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Condensed reviewed provisional results for th year ended 31 August 2013

MIRANDA MINERAL HOLDINGS LIMITED

Highlights
- Net asset value per share improved from (1.85) cents per share ("cps") at
  31 August 2012 to 5.56 cents per share at 31 August 2013

- Net tangible asset value improved from (9.37) cents per share at 31 August 2012
  to 1.77 cents per share at 31 August 2013

- Increase in net tangible asset value of the Group's previously published full
  year results by approximately R42 million is mainly due to the conversion of
  shareholders loans into equity

Condensed reviewed provisional results for the year ended 31 August 2013

Condensed Consolidated Statement of Financial Position
                                                         Reviewed         Audited
                                                             year            year
                                                            ended           ended
(Figures in R'000)                                    31 Aug 2013     31 Aug 2012
Assets
Non-current assets                                         43 111          41 645
Property, plant and equipment                              17 390          17 044
Intangible assets                                          24 601          24 601
Other financial assets                                      1 120               –
Current assets                                              1 388           8 432
Trade and other receivables                                   666           1 818
Other financial assets                                        575           3 322
Cash and cash equivalents                                     147           3 292

Total assets                                               44 499          50 077
Equity and liabilities
Equity                                                     33 225          (8 277)
Share capital                                             179 875         121 945
Share-based payment reserve                                 7 782               –
Accumulated loss                                         (151 568)       (128 004)
Equity attributable to equity holders of the parent        36 089          (6 059)
Non-controlling interest                                   (2 864)        (2 218)
Liabilities                                                11 274          58 354
Non-current liabilities                                     1 262             791
Finance lease obligation                                      233               –
Environmental rehabilitation provision                      1 029             791
Current liabilities                                        10 012          57 563
Loans from shareholders                                     1 475          41 698
Other financial liabilities                                 1 004               –
Finance lease obligation                                      59                –
Trade payables                                              5 764           4 114
Other payables                                              1 710          11 751

Total equity and liabilities                               44 499          50 077
Net asset value per share (cents)                            5.56           (1.85)*
Net tangible asset value per share (cents)                   1.77           (9.37)*
Shares in issue – closing number                          649 048         327 187


Condensed Consolidated Statement of Comprehensive
Income
                                                         Reviewed          Audited
                                                             year             year
                                                            ended            ended
(Figures in R'000)                                    31 Aug 2013      31 Aug 2012
Operating loss before interest and tax                    (24 177)         (26 147)
Investment revenue                                             44               48
Fair value adjustment                                          32              126
Finance costs                                                (109)          (1 994)
Loss before taxation                                      (24 210)         (27 967)
Taxation                                                        -              327
Loss for the year                                         (24 210)         (27 640)
Total comprehensive loss                                  (24 210)         (27 640)
Loss and total comprehensive loss
attributable to:
Equity holders of the parent                              (23 564)         (27 174)
Non-controlling interest                                     (646)            (466)
                                                          (24 210)         (27 640)
Reconciliation of headline loss
Basic loss for the year                                   (23 564)         (27 174)
Adjusted for:
 - Impairment of intangible assets                            600                -
 - Profit on sale of property, plant and equipment            (27)          (1 966)
 - Profit on sale of investment                                 -              (16)
 - Profit on sale of mining property                            -             (179)
 - Profit on sale of subsidiary                            (4 870)               -
Headline loss for the year                                (27 861)         (29 335)*
Weighted average number of shares in issue                521 789          287 317
Basic and diluted loss per share (cents)                    (4.52)           (9.46)
Basic and diluted headline loss per share (cents)           (5.34)          (10.21)*
* Restated, refer to note 3.             


Condensed Consolidated Statement of Cash Flows
                                                         Reviewed          Audited
                                                             year             year
                                                            ended            ended
(Figures in R'000)                                    31 Aug 2013      31 Aug 2012
Net cash from operating activities                        (18 087)         (33 160)
Net cash from investing activities                          2 927            3 229
Net cash from financing activities                         12 015           30 513
Total cash movement for the year                           (3 145)             582
Cash at the beginning of the year                           3 292            2 711
Total cash at end of the year                                 147            3 293
                                           


Condensed Consolidated Statement of Changes in Equity
                                                                   Share-                              Total
                                                                    based                    attributable to             Non-
                                                     Stated      payments     Accumulated     equity holders      controlling      Total
(Figures in R'000)                                   capital     reserve            loss          of group         interest     equity 
Balance at 1 Sep 2011                               115 051             –        (100 830)            14 221           (1 752)    12 469
Total comprehensive loss for the year                     –             –         (27 174)           (27 174)            (466)   (27 640)
Issue of shares                                       6 894             –               –              6 894                –      6 894
Total changes                                         6 894             –         (27 174)           (20 280)            (466)   (20 746)
Balance at 1 Sep 2012                               121 945             –        (128 004)            (6 059)          (2 218)    (8 277)
Total comprehensive loss for the year                     –             –         (23 564)           (23 564)            (646)   (24 210)
Share options issued                                      –         7 782               –              7 782                –      7 782
Issue of shares                                      57 930             –               –             57 930                –     57 930
Total changes                                        57 930         7 782         (23 564)            42 148             (646)    41 502
Balance at 31 Aug 2013                              179 875         7 782        (151 568)            36 089           (2 864)    33 225



Group Segmental Analysis
                                                                                       Base
                                                                                 metals and
                                                                                 industrial
(Figures in R'000)                                Coal     Diamonds      Gold      minerals        Other     Group
Reviewed year ended 31 Aug 2013                                                                               
Segment result: Loss before taxation            (6 928)         (10)        –             –      (17 272)   (24 210)
Taxation                                             –            –         –             –            –          –
Loss after taxation                             (6 928)         (10)        –             –      (17 272)   (24 210)
Segment assets                                  42 486          271        69           586        1 087     44 499
Mining properties                               16 822            –         –             –            –     16 822
Development properties                           3 920            –         –             –            –      3 920
Exploration and evaluation asset                11 026          271        69            75            –     11 441
Mineral rights                                   8 929            –         –           311            –      9 240
Other assets                                     1 789            –         –           200        1 087      3 076
Segment liabilities                             (7 130)           –         –             –       (4 144)   (11 274)
Depreciation on property, plant and equipment       84            –         –             –           65        149
Impairments                                      1 200            –         –             –            –      1 200
Additions                                          542            –         –             –            –        542
Audited year ended 31 Aug 2012
Segment result: Loss before taxation            (6 706)        (126)      (30)          (45)     (21 060)   (27 967)
Taxation                                           277           33         7            10            –        327
Loss after taxation                             (6 429)         (93)      (23)          (35)     (21 060)   (27 640)
Segment assets                                  44 030          271        69           586        5 121     50 077
Mining properties                               16 636            –         –             –            –     16 636
Development properties                           3 920            –         –             –            –      3 920
Exploration and evaluation asset                11 026          271        69            75            –     11 441
Mineral rights                                   8 929            –         –           311            –      9 240
Other assets                                     3 519            –         –           200        5 121      8 840
Segment liabilities                             (9 152)        (359)      (72)         (108)     (48 663)   (58 354)
Depreciation on property, plant and equipment      733           75        15            23          246      1 092
Impairments                                          –            –         –             –            –          –
Additions                                           41            –         –             –          108        149



1. Basis of preparation
   The group reviewed condensed provisional results for the year
   ended 31 August 2013 have been prepared in accordance with
   the Group's accounting policies, which comply with International
   Financial Reporting Standards as well as the SAICA Financial
   reporting guides as issued by the Accounting Practices Committee,
   IAS 34 – Interim Financial Reporting, the Listings Requirements
   of the JSE Limited and the Companies Act, 2008 (Act No. 71 of
   2008) of South Africa and are consistent with those of the previous
   period.

   They have been prepared under the supervision of the group's
   interim Chief Financial Officer, Adriaan Botha CA (SA). All monetary
   information is presented in the functional currency of the Company
   being South African Rand. The group's principal accounting
   policies and assumptions have been applied consistently over the
   current and prior financial period. Refer to note 7 for a statement
   on going concern.

   These results have been reviewed by Grant Thornton (Jhb) Inc
   and their unqualified review report is available for inspection at the
   group's registered office. The review report includes an emphasis
   of matter pertaining to going concern (refer to note 7) as well as
   impairment considerations on the Rozynenbosch prospecting right
   asset (refer to note 9.2)

2. Financial review
   The group reported a basic loss of 4.52 (2012: 9.46) cents per
   share, headline loss of 5.34 (2012: 10.21) cents per share, net
   asset value of 5.56 (2012: negative net asset value of 1.85) cents
   per share and a net tangible asset value of 1.77 (2012: negative
   9.37) cents per share. The change from a negative net asset value
   of R6 million at 31 August 2012 to a positive net asset value of
   R36 million is mainly due to the conversion of shareholders' loans
   into equity.

   Current liabilities excluding shareholders' loans of R8.5 million
   (2012: R15.8 million excluding shareholders' loans) exceed current
   assets of R1.4 million (2012: R8.4 million). Current liabilities consist
   of trade payables of R5.8 million (2012: R4.1 million) and other
   payables of R1.7 million (2012: R11.7 million). Other payables of
   R1.7 million were settled after year-end as disclosed in note 5.1.
   Shareholders are reminded that due to the nature of Miranda's
   business the trading statements are based on net asset value per
   share.

3. Prior period error

   Due to mathematical errors the following ratios were incorrectly
   disclosed in 31 August 2012:
                                 Corrected   Previously disclosed
   Net asset value per share         (1.85)                 (2.53)
   Net tangible asset value
   per share                         (9.37)                (10.05)
   Basic and diluted headline
   (loss) per share                 (10.21)                 (8.71)
   Headline loss for the year      (29 335)               (25 013)

4. Disposal of subsidiary
   Miranda Mineral Holdings Ltd has disposed 100% of its interest
   held in Miranda Support Services (Pty) Ltd on 31 July 2013. Miranda
   Support Services (Pty) Ltd was providing all the management
   services to the Miranda Group and will still provide these services
   until end of February 2014 per the management agreement
   between Miranda Support Services (Pty) Ltd and Miranda Mineral
   Holdings Ltd. Miranda Mineral Holdings Ltd sold Miranda Support
   Services (Pty) Ltd for R1. The transaction resulted in a profit of
   R4.9 million on sale of subsidiary for the group.

5. Subsequent events
   5.1.  Stefanutti Settlement
         Sesikhona Klipbrand Colliery (Pty) Ltd has, subsequent to
         year-end, paid the final amount outstanding to Stefanutti
         Stocks (Proprietary) Limited as per the settlement agreement
         concluded between Sesikhona and Stefanutti Stocks
         (Proprietary) Limited on 15 March 2013.

   5.2.  Framica
         Subsequent to the year-end, Framica (Pty) Ltd a 70%
         subsidiary of Miranda Coal (Pty) Ltd has concluded a
         transaction by which it has sold a prospecting right, situated
         in Mpumalanga, to Sasol Mining Ltd for a total consideration
         of R10 million. After tax and dividends paid this resulted in a
         net inflow to the group of R5.7 million.

6. 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.

7. Statement on going concern
   The financial statements set out in this report are the responsibility
   of the company's directors. They have been prepared by the
   directors on the basis of appropriate accounting policies which
   have been consistently applied. 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 Group's
   ability to continue as a going concern and are reviewed by the
   directors on a regular basis to evaluate and assess the Group's
   ability to function as a going concern:
     – Loss for the year – the group incurred a loss of R24 million (2012:
       R28 million). Included in the R24 million loss is a R7.8 million
       share-based payment expense;
     – Net current liability position – (excluding the shareholders' loans)
       is R7.1 million (2012: R7.4 million);
     – Production – the group has made progress with its negotiations
       to conclude an offtake agreement for the Sesikhona project.
     A memorandum of understanding has been entered into
     between Shanduka Coal Pty Limited ("Shanduka") and
     Sesikhona in terms whereof Shanduka will buy 1.2 million
     tonnes of raw material from the Sesikhona mine. Further details
     on the project are found in note 9.1;
     – The group's ability to continue as a going concern depends on
       the success of the following:
     - Funding negotiations to provide the following:

        – R1.6 million cash for general issue of shares subject to
          JSE approval December 2013 (Subscription agreements
          concluded and cash received into trust accounts)
        – R4 million cash for general issue of shares subject to
          JSE approval December 2013 (Subscription agreements
          concluded)
        – R14.4 million cash February 2014 (Planned)
     -  Litigious matters are largely resolved save for matters as
        disclosed under note 9.1.

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 Group's debt to equity ratio after year-end. It
is also of the view that upon execution of an offtake agreement
the group will be sufficiently self-funded. The outstanding litigious
matter is being vigorously defended and the Board is of the view
that the potential contingencies are not material to the group's
overall position.

8. Dividends
   No dividends were recommended or declared for the period under
   review (2012: nil).

9. Operational review
   During the year Management continued with the review of all
   projects and the consideration of the disposal of those projects
   that fall outside of the core focus areas. This has resulted in the sale
   of a prospecting right, situated in Mpumalanga, to Sasol Mining Ltd
   as disclosed in note 5.2.

   The Board and Management have entered into negotiations with
   Sentula Mining Ltd (Sentula), with regard to the acquisition of
   Sentula's share in Nkomati Anthracite Mine (Pty) Ltd. This has been
   reported on the Securities Exchange News Service (SENS).
   In keeping with the strategy to ensure long awaited cash flow,
   Management have identified other projects which can be brought
   into production in a relatively short period of time, which warranted
   immediate further investigation. Further studies are in progress on
   these projects.

   The development of the two core coal clusters in KZN, namely
   Sesikhona and Burnside, remains a focus of Management and
   environmental studies are ongoing so as to ensure compliance
   with the relevant Authorities.

   9.1         Sesikhona project
        Negotiations with Shanduka Coal Pty Limited ("Shanduka")
        and Sesikhona resulted in a memorandum of understanding
        being entered into, in terms whereof Shanduka will buy
        1.2 million tonnes of raw material from the Sesikhona mine,
        however, Osho SA Coal Resources (Pty) Limited, with whom
        a term sheet in respect of an offtake agreement was signed
        in December 2011, is alleging that they have purchased
        all of the Sesikhona anthracite and consequently applied
        for an interim interdict to stop Miranda from delivering
        anthracite from the Sesikhona mine to another off-taker.
        Miranda is opposing this application. The matter was heard
        in the Pietermaritzburg High Court on 4 March 2013. We are
        waiting on the Honourable Judge to hand down a ruling on
        this matter.

        Material losses are envisaged if this offtake agreement is
        enforced upon Sesikhona as detailed in the 2012 Annual
        Report.

   9.2  Rozynenbosch prospecting right
        Miranda Minerals (Pty) Ltd, a wholly owned subsidiary,
        has been granted a Prospecting Right over the farm
        Rozynenbosch 104, in terms of Section 17 (1) of the Mineral
        and Petroleum Resources Development Act 2002, pursuant
        to an appeal to the Minister of Mineral Resources dated
        17 July 2006.

        According to the Company's 2010 Annual Report, "the project
        involves a lead, silver, zinc and copper deposit located on the
        farm Rozynenbosch, in the Kenhardt district of the Northern
        Cape. Extensive exploration by Goldfields and Phelps Dodge
        in the 1970s and 1980s has resulted in a clearly defined ore
        body of about 14 million tonnes, which carries SAMREC
        indicated resource status."

        Background
        Shareholders are referred to the SENS dated 6 October
        2011, headed "Business update and Trading Statement", in
        which the then Board and executive management initiated
        a review of the company's assets. Following this review, the
        then Board and executive management took the decision to
        derecognise the asset and remove it from the balance sheet
        which had the effect of reducing the net asset value of the
        company by approximately R284 million.

        During January 2012, a review of the status of this Prospecting
        Right was affected. After such review, the appeal process,
        was pursued, this has now resulted in the granting of this
        Prospecting Right.

        Whilst a value of R284 million was placed on this project
        based on a royalty payment linked to discounted revenue
        participation, forecast commodity prices and exchange rates
        over the life of mine during February 2006
        Taking into account the above fact the current Board and
        executive management feels that the prospecting right was
        incorrectly derecognised but that a potential impairment
        existed during that period.

        The Board also believes that the value of this prospecting
        right will realise by means of selling the right rather than
        developing it and therefore Fair value less costs to sell will
        be the more appropriate value. Due to the fact that this is a
        unique asset and that no transactions are available relating
        to similar assets, the directors don't believe that they can
        determine a reasonable fair value at this stage and that any
        value indicated could only be misleading.

10. Strategic review and future prospects
    In keeping with the Board's focus of acquiring cash producing
    assets as well as bringing the group's assets to account, the
    executive management committee has been strengthened and the
    group now has the required expertise to ensure that the projects
    that are being acquired as well as current projects can be efficiently
    and effectively brought to account.

    The Board is reviewing the group's non-coal assets and considering
    their disposal which will result in the group being a coal-focused
    producer.

11. Changes to the Board
    During the financial period under review, Ms Carina de Beer has
    resigned as Financial Director of Miranda with effect from 12 April
    2013. Mr Adriaan Botha has been appointed as an interim Chief
    Financial Officer until a new Financial Director is appointed.
    Mr Nhlanhla Madalane and Mr Rudolph de Bruin were appointed as
    non-executive directors on the Miranda Board, effective 26 March
    2013 and 15 August 2013, respectively. Mr John Wallington was
    appointed as Managing Director to the Miranda Board, effective
    from 1 November 2013. Dr John Bristow was appointed as an
    alternative director to Mr Rudolph de Bruin, a non-executive
    director on the Miranda Board, effective from 19 November 2013.

For and on behalf of the Board

Dr L Mohuba                  M D Cook                  A Botha
Chairperson                  Managing Director           Chief Financial Officer

Centurion
28 November 2013


COMPANY SECRETARY
Fusion Corp Secretarial Services (Pty) Limited
PO Box 68528
Highveld, Centurion
0169

AUDITORS AND REPORTING ACCOUNTANTS
Grant Thornton (Jhb) Inc
42 Wierda Road West
Wierda Valley
2196

SPONSORS
PricewaterhouseCoopers Corporate Finance (Pty) Limited
2 Eglin Road,
Sunninghill
2157

COMPANY REGISTERED OFFICE
Pecanwood Building, The Greens Office Park, Charles de Gaulle Crescent
Highveld, Centurion
Tel: 012 665 4200
Fax: 012 665 4258
Email: info@mirandaminerals.com




Date: 28/11/2013 04:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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