Wrap Text
Unaudited condensed consolidated financial results for the six months ended 28 February 2014
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”)
Highlights
- Pending acquisition by the Group of an effective 50% participation in
Benicon Coal (Pty) Ltd
- Net tangible asset value increased from previously reported 1.24 cents
per share ("cps") at 28 February 2013 to 1.78 cps
- Headline loss per share down 42% to 1.70 cps (2013: 2.93)
- Operating loss down by 89% to R1.4 million (2013: R12.7 million)
Unaudited condensed consolidated financial results for the six months ended 28 February 2014
Condensed Consolidated Statement of
Financial Position
Unaudited Unaudited Audited
(Figures in R'000) 28 Feb 14 28 Feb 13 31 Aug 13
Assets
Non-current assets 43 099 42 147 43 111
Property, plant and equipment 17 329 17 546 17 390
Intangible assets 24 601 24 601 24 601
Other financial assets 1 169 – 1 120
Current assets 2 183 6 766 1 388
Trade and other receivables 982 3 189 666
Other financial assets 905 3 378 575
Cash and cash equivalents 296 199 147
Total assets 45 282 48 913 44 499
Equity and liabilities
Equity 34 210 29 825 33 225
Share capital 186 798 172 466 179 875
Share based payment
reserve 7 782 – 7 782
Accumulated loss (157 315) (140 337) (151 568)
Equity attributable to equity
holders of parent 37 265 32 129 36 089
Non-controlling interest (3 055) (2 304) (2 864)
Liabilities 11 072 19 088 11 274
Non-current liabilities 1 303 1 292 1 262
Finance lease obligation 201 263 233
Environmental rehabilitation
provision 1 102 1 029 1 029
Current liabilities 9 769 17 796 10 012
Loans from shareholders 1 767 – 1 475
Other financial liabilities 1 572 – 1 004
Current tax payable 1 854
Finance lease obligation 62 56 59
Trade payables 4 514 5 040 5 764
Other payables – 12 700 1 710
Total equity and liabilities 45 282 48 913 44 499
Net asset value per
share (cents) 5.24 5.31 5.56
Net tangible asset value
per share (cents) 1.78 1.24 1.77
Shares in issue – closing number 711 154 605 196 649 048
Condensed Consolidated Statement of
Comprehensive Income
Unaudited Unaudited Audited
six months six months year
ended ended ended
(Figures in R'000) 28 Feb 14 28 Feb 13 31 Aug 13
Operating loss before interest
and tax (1 387) (12 741) (24 537)
Investment revenue – 279 44
Fair value adjustment 49 56 32
Finance costs (317) (12) (109)
Loss before taxation (1 655) (12 418) (24 570)
Taxation (1 854) – –
Loss for the year (3 509) (12 418) (24 570)
Total comprehensive loss (3 509) (12 418) (24 570)
Loss and total comprehensive
loss attributable to:
Equity holders of the parent (5 748) (12 333) (23 565)
Non-controlling interest 2 239 (85) (1 005)
(3 509) (12 418) (24 570)
Reconciliation of headline loss
Basic loss for the year (5 748) (12 333) (23 565)
Adjusted for:
– Impairment of mining right – 959 959
– Profit on sale of property, plant
and equipment – – (27)
– Profit/(loss) on sale of right (10 000) – –
– Profit on sale of subsidiary – – (4 870)
– Total tax effects of adjustments 1 854 – –
– Total non-controlling
interest effects of adjustments 2 444 (359) (359)
Headline loss for the year (11 450) (11 733) (27 862)
Weighted average number
of shares in issue 674 676 400 874 521 789
Basic and diluted loss per share
(cents) (0.85) (3.08) (4.52)
Basic and diluted headline loss
per share (cents) (1.70) (2.93) (5.34)
No dilution effect.
Condensed Consolidated Statement of Cash Flows
Unaudited Unaudited Audited
six months six months year
ended ended ended
(Figures in R'000) 28 Feb 14 28 Feb 13 31 Aug 13
Net cash from operating activities (4 224) (9 437) (18 087)
Net cash from investing activities (330) (295) 2 927
Net cash from financing activities 4 703 6 639 12 015
Total cash movement for the year 149 (3 093) (3 145)
Cash at the beginning of the year 147 3 292 3 292
Total cash at end of the year 296 199 147
Condensed Consolidated Statement of Changes in Equity
Total
Share based attributable to
Stated payments Accumulated equity holders Non-control- Total
(Figures in R'000) capital reserve loss of group ling interest equity
Balance at 1 September 2012 121 945 – (128 004) (6 059) (2 218) (8 277)
Total comprehensive loss for the year – – (23 565) (23 565) (1 005) (24 570)
Share options issued – 7 782 – 7 782 – 7 782
Issued shares 57 930 – 57 930 – 57 930
Subsidiary acquired – – – – 359 359
Balance at 1 September 2013 179 875 7 782 (151 569) 36 088 (2 864) 33 224
Total comprehensive loss for the six months – – (5 748) (5 748) 2 239 (3 509)
Issued shares 6 923 – 6 923 – 6 923
Dividends – – – – (2 430) (2 430)
Balance at 28 February 2014 186 798 7 782 (157 317) 37 263 (3 055) 36 638
Group Segmental Analysis
Base Metals
and Industrial
(Figures in R'000) Coal Diamonds Gold Minerals Other Group
Unaudited six months ended 28 February 2014
Segment result: Loss before taxation 5 422 (3) – – (7 074) (1 655)
Taxation (1 854) – – – – (1 854)
Loss after taxation 3 568 (3) – – (7 074) (3 509)
Segment assets 43 193 271 69 586 1 163 45 282
Mining properties 16 822 – – – – 16 822
Development properties – – – – – –
Exploration and evaluation asset 11 026 271 69 75 – 11 441
Mineral rights 8 929 – – 311 – 9 240
Other assets 6 416 – – 200 1 163 7 779
Segment liabilities (4 727) – – – (6 345) (11 072)
Unaudited six months ended 28 February 2013
Segment result: Loss before taxation (4 905) – – – (7 513) (12 418)
Taxation – – – – – –
Loss after taxation (4 905) – – – (7 513) (12 418)
Segment assets 44 511 271 69 586 3 476 48 913
Mining properties 16 874 – – – – 16 874
Development properties 3 920 – – – – 3 920
Exploration and evaluation asset 11 025 271 69 75 – 11 440
Mineral rights 8 929 – – 311 – 9 240
Other assets 3 763 – – 200 3 476 7 439
Segment liabilities (11 246) – – – (7 842) (19 088)
Audited year ended 31 August 2013
Segment result: Loss before taxation (6 928) (10) – – (17 632) (24 570)
Taxation – – – – – –
Loss after taxation (6 928) (10) – – (17 632) (24 570)
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)
1. Basis of preparation
The condensed consolidated interim results have been prepared in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial
Reporting Guide and the information as required by IAS 34: Interim Financial Reporting, Listings Requirements of the
JSE Limited, and the Companies Act of South Africa (Act 71 of 2008), as amended. In the preparation of these interim
financial results, the group has applied key assumptions concerning the future and other indeterminate sources in
recording various assets and liabilities.
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 6 for a statement on going concern.
2. Financial review
The group reported a basic loss of 0.85 (2013: 3.08) cents per share, headline loss of 1.70 (2013: 2.93) cents per share,
net asset value of 5.24 (2013: 5.31) cents per share and a net tangible asset value of 1.78 (2013: 1.24) cents per share.
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 28 February 2013:
Corrected Previously disclosed
Net asset value per share 5.31 4.93
Net tangible asset value per share 1.24 0.86
4. Subsequent events
Sesikhona Klipbrand Colliery (Pty) Ltd
Shareholders are referred to the company announcement of 26 March 2013, inter alia, regarding the dispute with Osho
SA Coal Resources (Pty) Ltd ("Osho") ("the Dispute"). Pursuant to the Dispute, an interim interdict sought by Osho to
stop Miranda from delivering coal from its Sesikhona mine to another off taker, in this case, Shanduka Coal Proprietary
Limited, was heard in the KwaZulu-Natal, Pietermaritzburg division of the High Court of South Africa ("Court"), on
4 March 2013. The presiding judge, Honourable Judge van Zyl, handed down judgment on 24 April 2014 whereby,
inter alia, the interim interdict sought by Osho has been granted and a costs award deferred pending a trial court
outcome.
The Dispute under Case Number 10786/2012 will now be tried in Court on a date still to be finalised. In this regard,
Miranda is presently preparing for trial and shareholders will be kept apprised of developments as and when they occur.
5. 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.
6. 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 six months – the group incurred a loss of R3.5 million (2013: R12.4 million).
- Net current liability position – (excluding the shareholders' loans) is R5.8 million (2013: R11 million).
- Production – the group has made progress with its negotiations to conclude an offtake agreement for the Sesikhona
project. This is subject to litigation being successful as disclosed on note 4.
- The board has approved a capital raising strategy to fund proposed income-generating acquisitions and shares are
available for general issue for cash in the short term if necessary.
- At the date of this report Miranda had R231,266 cash available
- The estimated monthly cash burn at date of this report was between R1.2 million and R1.5 million per month that
includes executive and non-executive remuneration.
- The directors of Miranda will in the short term procure or provide the necessary funds through loan advances or
deferral of fees to sustain the operations until the abovementioned capital raise is finalised.
The ability of the group to continue as a going concern is dependent on a number of factors. The most significant of
these in the short term, from March 2014 until June 2014, is that the directors continue to procure funding for the current
monthly expenses. Beyond June 2014 the directors believe that the company will have raised enough capital to be
sufficiently self-funded.
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 and
the necessary capital raise 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.
7. Dividends
No dividends were recommended or declared for the period under review (2013: nil).
8. Operational review
8.1 Burnside Mine project
The Burnside mine project is situated near Glencoe in KwaZulu-Natal, South Africa and consists of four contiguous
farms being, Burnside, Boschhoek, Boschkloof and Wasbank which cover a total area of 13,280 ha. The project
falls in the Klip River Coalfield and is one of the last major projects in this coalfield. On 27 September 2012, the
DMR awarded a Mining Right to Street Spirit Trading Proprietary Limited ("Burnside") for a period of 30 years.
During January 2014, Sound Mining Solution (Pty) Limited completed a scoping study with the report showing
that on Burnside alone there is a mineable tonnage profile of 40mt. Further studies are to be undertaken and the
environmental studies to ensure compliance are progressing.
8.2 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 off take
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. The matter was heard in the Pietermaritzburg High Court on 4 March 2013. The interim interdict
sought by Osho has been granted and a costs award deferred pending a trial court outcome. Refer note 4.
No material change occured during the six-month period from 31 August 2012 to 28 February 2013.
9. 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.
Acquisition by the Group of an effective 50% participation in Benicon Coal (Pty) Ltd
Shareholders are referred to the various announcements regarding the proposed acquisition by the Company of an
effective 50% participation in Benicon Coal (Pty) Ltd ("the Benicon Acquisition" or "Benicon"), the most recent being that
of 3 March 2014. Subject to various Conditions Precedent, the Benicon Acquisition will result in Miranda having secured,
through Kutlwano Investment Holdings (Pty) Limited ("Kutlwano"), a special purpose company owned 50:50 by Miranda
and Mochiba Investments (Pty) Ltd, an indirect beneficial interest in Nkomati Anthracite (Pty) Ltd ("Nkomati"), which owns
and operates an anthracite mine in the vicinity of Komatipoort, eastern Mpumalanga, South Africa.
Nkomati operates an anthracite mine located in close proximity to Komatipoort in eastern Mpumalanga, South Africa.
Operations at the mine were placed under care and maintenance by its management at the end of May 2011 due,
inter alia, to environmental and community issues and to breaches of its existing water usage licence. Since such time,
following extensive consultation with the DMR, the environmental issues have been resolved and the various community
issues have been successfully addressed through, inter alia, implementing a royalty and share participation scheme with
the three affected local tribal authorities of the area.
10. Changes to the board
Mr. Rudolph de Bruin, who was appointed on the 15 August 2013, resigned on the 25 February 2014. Mr. John Bristow
(appointed as alternate Director to Rudolph de Bruin on 19 November 2013) also resigned on the 25 February 2014
COMPANY SECRETARY AUDITORS AND REPORTING SPONSORS COMPANY REGISTERED OFFICE
Fusion Corp Secretarial Services ACCOUNTANTS PricewaterhouseCoopers Pecanwood Building
(Pty) Limited Grant Thornton (Jhb) Inc Corporate Finance (Pty) Limited The Greens Office Park
PO Box 68528 42 Wierda Road West 2 Eglin Road Charles de Gaulle Crescent
Highveld Wierda Valley Sunninghill Highveld, Centurion
Centurion 2196 2157 Tel: 012 665 4200 Fax: 012 665 4258
0169 Email: info@mirandaminerals.com
For and on behalf of the board
Dr L Mohuba J N Wallington A Botha
Chairperson Chief Executive Interim Chief Financial Officer
Centurion
9 May 2014
Date: 09/05/2014 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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