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Reviewed Condensed Consolidated Interim Financial Statements for the Six Months Ended 31 December 2013
BAUBA PLATINUM LIMITED
Incorporated in the Republic of South Africa
(Registration number 1986/004649/06)
Share code: BAU ISIN: ZAE000145686
(“Bauba” or “the Company” or “the Group”)
REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX
MONTHS ENDED 31 DECEMBER 2013
Commentary
Results
The focus of the Group during the period under review has been the ongoing
exploration of its platinum assets, and the raising and preservation of cash.
The Group did not generate any revenue and in line with the Group’s dividend
policy, no dividend was declared. The Group raised R2.5 million cash at a cost
of R0.5 million during the period under review. R1.1 million was spent on
exploration activities, which was capitalised in line with the Group’s
accounting policies, and R3.4 million on general and administration costs.
Exploration
The third borehole (“BAU-042”) on the Northern Cluster was completed during the
period under review, after which the drilling program was suspended until
sufficient cash is raised. BAU-042 had pleasing assay results indicating 3PGE+Au
grades of 5.82g/t over a width of 1.22 metres on the Merensky reef and 6.97 g/t
over a width of 1.20 metres on the UG2 reef.
Interim condensed consolidated statement of financial position
Reviewed Reviewed Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2013 2012 2013
R’000 R’000 R’000
Assets
Non-current assets 31 927 24 803 30 907
Intangible assets 31 668 24 420 30 555
Property, plant and equipment 259 383 352
Current assets 2 936 15 996 5 460
Trade and other receivables 232 799 235
Cash and cash equivalents 2 704 15 197 5 225
Total assets 34 863 40 799 36 367
Equity and liabilities
Capital and reserves 33 592 39 577 35 561
Share capital 127 062 123 274 123 274
Share premium 274 532 276 320 276 320
Reverse asset acquisition
reserve (282 988) (282 988) (282 988)
Retained loss (83 465) (75 629) (79 686)
Non-controlling interest (1 549) (1 400) (1 359)
Current liabilities 1 271 1 222 806
Trade and other payables 1 271 1 222 806
Total equity and liabilities 34 863 40 799 36 367
Net asset value per share
(cents) 26.4 32.1 28.8
Tangible net asset value per
share (cents) 1.5 12.3 4.1
Interim condensed consolidated statement of comprehensive income
Reviewed Reviewed Audited
Six months Six months Year
ended ended Ended
31 Dec 31 Dec 30 Jun
2013 2012 2013
R’000 R’000 R’000
General and administrative
expenses (4 042) (6 171) (10 445)
Finance income 73 614 872
Loss before taxation (3 969) (5 557) (9 573)
Taxation - - -
Comprehensive loss for the
period (3 969) (5 557) (9 573)
Loss for the period –
attributable to: (3 969) (5 557) (9 573)
– Equity holders of the
company (3 779) (5 145) (9 202)
– Non-controlling interest (190) (412) (371)
Headline loss for the period* (3 779) (5 145) (9 202)
Undiluted and diluted
earnings per share
Loss per share (cents) (3.1) (4.2) (7.5)
Undiluted and diluted headline
earnings per share
Headline loss per share
(cents) (3.1) (4.2) (7.5)
Weighted average number of 123 294 123 274 123 274
shares in issue (000’s)
Total number of shares in issue
at the end of the period (000’s) 127 061 123 274 123 274
* There is no adjustment required to the loss for the period to
arrive at headline loss for the period.
Interim condensed consolidated statement of cash flows
Reviewed Reviewed Audited
Six months Six months Year
ended ended Ended
31 Dec 31 Dec 30 Jun
2013 2012 2013
R’000 R’000 R’000
Net cash outflow from
operating activities (3 481) (6 366) (10 428)
Net cash outflow from
investing activities (1 040) (6 479) (12 389)
Net cash inflow from
financing activities 2 000 – –
Net decrease in cash and cash
equivalents (2 521) (12 485) (22 817)
Cash and cash equivalents at
beginning of period 5 225 28 042 28 042
Cash and cash equivalents at
end of period 2 704 15 197 5 225
Interim condensed consolidated statement of changes in equity
Share Share Retained
capital premium loss
R’000 R’000 R’000
Balance at 31 December 2012 123 274 276 320 (75 629)
Comprehensive loss for the
period – – (4 057)
Balance at 30 June 2013 123 274 276 320 (79 686)
Shares issued 3 788 (1 288) –
Cost for the period – (500) –
Comprehensive loss for the
period – – (3 779)
Balance at 31 December 2013 127 062 274 532 (83 465)
Non- Reverse
Control- Acqui-
ling sition
interest reserve Total
R’000 R’000 R’000
Balance at 31 December 2012 (1 400) (282 988) 39 577
Comprehensive loss for the
period 41 – (4 016)
Balance at 30 June 2013 (1 359) (282 988) 35 561
Shares issued – – 2 500
Cost for the period – – (500)
Comprehensive loss for the
period (190) – (3 969)
Balance at 31 December 2013 (1 549) (282 988) 33 592
Notes to the reviewed interim financial statements
Basis of preparation
The board of directors (“Board”) present the reviewed condensed consolidated
interim financial results for the six months ended 31 December 2013 which have
been prepared in accordance with the framework concepts and the measurement
recognition requirements of International Financial Reporting Standards (“IFRS”)
and the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council and its successor, the Companies Act, 2008, (Act 71
of 2008) as amended and the Listings Requirements of JSE Limited and contains
the information required by IAS 34: Interim Financial Reporting. The accounting
policies are in terms of IFRS and are supported by reasonable and fair
judgements and estimates.
These condensed consolidated interim financial results have been prepared under
the supervision of Mr Willem Moolman, the Financial Director of Bauba.
Review opinion
These condensed consolidated interim financial results for the six months ended
31 December 2013 have been reviewed by the Company’s auditors, BDO South Africa
Incorporated. A copy of their unqualified review opinion is available for
inspection at the registered office of the Company.
Segmental information
The Group has classified two segments namely:
- Exploration, being activities associated with the Bauba Project and platinum
exploration; and
- Corporate expenses, being administration, regulatory and corporate expenses
incurred.
Exploration Corporate Total
R’000 R’000 R’000
31 December 2013
External interest received – 73 73
General and administrative
expenses (475) (3 473) (3 948)
Depreciation and
amortisation (72) (22) (94)
Comprehensive loss for the
period (547) (3 422) (3 969)
Total segment assets 31 743 3 120 34 863
Total segment liabilities (950) (321) (1 271)
Exploration Corporate Total
R’000 R’000 R’000
31 December 2012
External interest received – 614 614
General and administrative
expenses (1 016) (5 112) (6 128)
Depreciation and
amortisation (19) (24) (43)
Comprehensive loss for the
period (1 035) (4 522) (5 557)
Total segment assets 24 928 15 871 40 799
Total segment liabilities (795) (427) (1 222)
Capital raising
The Company successfully raised R2.5 million under its General Authority by way
of issuing 3 787 789 shares for cash during December 2013 at an issue price of
R0.66 per share. This cash will be utilised as bridging finance until the chrome
project becomes cash generative.
Legal Tenure
The Group’s two prospecting rights were renewed in July 2012 for a further
period of three years.
Legal
There is currently a review application pending in the North Gauteng High Court
of South Africa, Pretoria brought by Rustenburg Platinum Mines Limited and ARM
Mining Consortium Limited (“the Applicants”) against a decision of the
Department of Mineral Resources to grant the prospecting rights in respect of
two farms, namely Genokakop 285KT and Groot Vygenboom 284KT. Bauba’s subsidiary,
Bauba A Hlabirwa Mining Investments Proprietary Limited (“Hlabirwa”), the legal
holder of the prospecting rights, was cited as a party against whom relief is
sought. After taking legal advice on the matter, Hlabirwa is confident of a
positive outcome. Hlabirwa decided to progress the determination of the
application by requesting the High Court to dismiss this matter as the
applicants have failed to take any meaningful steps to advance the review
application since the onset date.
Going concern
The condensed consolidated interim financial statements have been prepared on
the basis of accounting policies applicable to a going concern. This basis
presumes that funds will be available to finance future operations and that the
realisation of assets and settlement of liabilities, contingent obligations and
commitments will occur in the ordinary course of business. As is common with
many junior mining companies, the Group raises capital for exploration and other
projects as and when required. Future work on the development of these projects
may be adversely affected by factors outside of the control of the Group.
Subsequent events
Assets for Shares Agreement
The Board released a cautionary announcement on SENS on 25 September 2013
advising shareholders that Bauba had entered into negotiations with certain
existing shareholders to raise funding to enable the Group to continue with its
drilling programme. The initial cautionary announcement was followed up with a
number of renewal of cautionary announcements and a terms announcement which was
released on SENS on 19 March 2014 advising shareholders of the details of the
outcome of the negotiations.
The negotiations resulted in the Company entering into an Assets For Shares
agreement (“Acquisition Agreement”), which is subject to approval by
shareholders at a general meeting of the Company. In terms of the Acquisition
Agreement, the Company will:
- acquire 60% of the beneficial ownership of the farms Moeijelik 412KS and
Waterkop 113KT;
- cancel the claw back conditions over 37 033 200 ordinary shares previously
issued for the farms subject to the review application brought by the
Applicants; and
- issue 21 189 600 ordinary shares for the acquisition of the farm Houtbosch
323KT which notarial execution was delayed due to the same review application.
The Venmyn Deloitte competent person report and the Board declared the chrome
resource on the farm Moeijelik 412KS to be 9.3 million metric tonnes of which
approximately 1.3 million metric tonnes have been identified as suitable for
open cast mining operations up to a high wall of 50 metres.
Chrome Ore Supply Agreement
On 27 March 2014, Bauba released a detailed announcement on SENS advising
shareholders of the chrome ore supply agreement (“Chrome Ore Supply Agreement”)
entered into between Hlabirwa, the legal holder of the prospecting rights, and
ASA Metals Proprietary Limited (“ASA”). The Chrome Ore Supply Agreement has for
the time being been capped by Hlabirwa at a run of mine off-take total of 480
000 metric tons which will continue over an approximate period of 24 months with
ASA having expressed an interest to materially increase the aforesaid quantity,
should Hlabirwa be agreeable thereto at some future date. The Chrome Ore Supply
Agreement further makes provision for a prepayment of up to R5.6 million over
the next seven months until the mining operations commence.
Lease Agreement
Hlabirwa has also entered into a lease and option agreement (“Lease and Option
Agreement”) with Jibeng Investment Proprietary Limited, the land owners of the
farm Moeijelik 412KS, to facilitate access to the chrome mining area. The Lease
and Option Agreement also provides for an option to acquire the portion of the
farm on which the mining operations will be established.
Bulk Sample Authorisation and Mining Permit
Hlabirwa has applied for both a bulk sample authorisation and a mining permit
over the farm Moeijelik 412KS. The company has been advised that the issuance of
the bulk sample authorisation is now imminent and furthermore anticipates the
mining permit to be awarded by the Department of Mineral Resources during June
2014. This will allow for site establishment to commence in July 2014 and
resulting cash flow by the delivery of run of mine chrome ore to ASA by mid-
August 2014.
Conclusion
The acquisition of the beneficial rights over the chrome assets, which has a low
cost open-cast exploitation potential, and the signing of the Chrome Ore Supply
Agreement with ASA, secures the potential of a steady cash flow stream, which
may satisfy all of the Company’s financial requirements to advance its projects
for the foreseeable future. With a major portion of the net cash proceeds
from the chrome operation being diverted into the exploration programme, it will
place the Group in a favourable position to apply for a mining right over its
platinum project and to further develop and exploit its platinum resources.
Directorate
There was no change to the Board during the period under review.
On behalf of the Board
JG Best SJM Caddy
Chairman Chief Executive Officer
31 March 2014
Board of Directors:
Non-executive: Mr JG Best* (Chairman), Mr KV Dicks*, Mr SM Dolamo*
Ms KW Mzondeki*, Dr NM Phosa, Mr D Smith, King TV Thulare
(Alt to Dr NM Phosa) (*Independent)
Executive: Mr SJM Caddy (CEO), Mr WA Moolman (FD)
Sponsor: Merchantec Capital
Registered Office: 1st Floor, Building 816/5, Hammets Crossing Office
Park 2 Selbourne Road, Fourways, Johannesburg, Gauteng, South Africa
Company Secretary
Merchantec Proprietary Limited
2nd Floor, North Block, Hyde Park Office Tower, Cnr 6th Road and Jan
Smuts Avenue, Hyde Park, 2196 (PO Box 41480, Craighall 2024)
Auditor: BDO South Africa Incorporated
Date: 31/03/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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