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Audited provisional consolidated results for the year ended 28 February 2014 and renewal of cautionary announcement
PLATFIELDS LIMITED
Incorporated in the Republic of South Africa
(Registration number 2002/005851/06)
Share code: PLL ISIN: ZAE000151825
(“Platfields”, “the Group” or “the Company”)
AUDITED PROVISIONAL CONSOLIDATED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2013 AND
RENEWAL OF CAUTIONARY ANNOUNCEMENT
PROVISIONAL CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 28 February 2013 Audited Audited
Figures in Rand 2013 2012
Assets
Non-current assets
Exploration assets 55 190 146 56 690 146
Current assets
Other receivables 102 558 431 007
Cash and cash equivalents 485 141 7 026 254
587 699 7 457 261
TOTAL ASSETS 55 777 845 64 147 407
Equity and liabilities
Shareholders’ Equity 19 440 184 28 539 439
Non-current liability
Long-term liability 35 023 041 34 862 386
Current liabilities
Trade and other payables 1 314 620 745 582
TOTAL EQUITY AND LIABILITIES 55 777 845 64 147 407
Net asset value per share 3 4
Net tangible asset value per share (4) (4)
PROVISIONAL CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 28 February 2013 Audited Audited
Figures in Rand 2013 2012
Exploration expenditure (399 478) (521 977)
General and administration expenses (7 319 930) (8 765 119)
Operating loss (7 719 408) (9 287 096)
Interest and investment income received 280 808 825 516
Loss from operations (7 438 600) (8 461 580)
Impairment (1 500 000) -
Notional interest (160 655) (2 878 546)
Loss for the year/Total comprehensive loss for the year (9 099 255) (11 340 126)
Loss per share (cents) 0.81 1.44
Add back : Impairment of exploration assets (cents) (0.19) -
Headline loss per share (cents) 0.62 1.44
Diluted loss per share (cents) 0.81 1.44
Diluted headline loss per share (cents) 0.62 1.44
Reconciliation of headline loss and loss
The calculation of the headline loss per
share is based on a loss of:
- loss after taxation (9 099 255) (11 340 126)
- impairment of exploration assets 1 500 000 -
Headline loss (7 599 255) (11 340 126)
PROVISIONAL CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 28 February 2013 Audited Audited
Figures in Rand 2013 2012
Balance beginning of year 28 539 43 39 879 565
Total comprehensive loss for the year (6 381 918) (11 340 126)
Total Shareholders’ Equity 19 440 184 28 539 439
PROVISIONAL CONSOLIDATED CASH FLOW STATEMENT
for the year ended 28 February 2013 Audited Audited
Figures in Rand 2013 2012
Operating activities (6 541 113) (10 548 421)
Investing activities - -
Financing activities - (2 000 000)
Total movement (6 541 113) (12 548 421)
Cash and cash equivalents at the beginning of the year 7 026 254 19 574 675
Total cash and cash equivalents at end of the year 485 141 7 026 254
NOTES
for the year ended 28 February 2013
Figures in Rand
1. Basis for preparation and accounting policies
The audited provisional consolidated results have been prepared in accordance with International
Financial Reporting Standards (IFRS), IAS 34: Interim Financial Reporting, and the Companies Act,
2008 of South Africa, the JSE Listing Requirements and the SAICA Financial Reporting Guides issued
by the Accounting Practices Committee. The audited provisional consolidated results have been
prepared on the historical cost basis, unless otherwise stated.
The accounting policies applied in preparing this report, which are based on reasonable
judgements and estimates, are in accordance with International Financial Reporting Standards
("IFRS") and are consistent with those applied in the previous year. During the current year the
Group applied for the first time the amendment to IAS 1 effective 1 July 2012, and the amendment
to IAS 12 effective 1 January 2012. Neither amendment had an impact on the accounting policies
currently adopted by the Group.
A segmental analysis has not been presented as the Company does not operate in different
segments at present. An analysis of the various projects is set out in paragraph 2. below.
These audited results have been prepared by Annelise Cilliers, CA(SA), the Financial Director.
Auditor’s report
The Group’s audited provisional consolidated results for the year ended 28 February 2013 have
been audited by the group’s auditors, Grant Thornton. The auditors’ report on the Group’s audited
provisional consolidated results will be available for inspection at the auditor’s offices.
The auditors have issued an adverse audit opinion details of which are extracted below. In
addition, the auditors have noted Reportable Irregularities, details of which are also extracted
below.
Due to the issue of the adverse audit opinion, the unaudited interim report for the six months
ended will require review by the auditor, issuer’s last annual financial statements, unless the JSE
otherwise decides. In addition, shareholders are advised that the JSE may consider the continued
listing, suspension and possible subsequent termination of the listing of Platfields. The board of
Platfields is working towards resolving the matters which gave rise to the adverse opinion as set
out under section 5 below.
Adverse Opinion
The text of the auditors adverse opinion on the group is extracted from their opinion as follows:
“Basis for adverse opinion – group and company
The group capitalises all exploration costs as they are incurred in terms of IFRS 6. Subsequent to
year end, some of the rights have expired and sufficient appropriate audit evidence could not be
obtained regarding the likelihood of these rights being renewed. The group has not impaired these
exploration assets.
We have not been able to verify the statutory information disclosed in the financial statements
and could furthermore also not verify the existence of the contingent liability relating to forfeited
salaries as disclosed in note 19 to the financial statements.
The loan from Majestic Silver Trading 222 Proprietary Limited, stated at R32 305 703 in the
financial statements is incorrectly classified as a non-current liability at the reporting date. In terms
of International Financial Reporting Standards, specifically the requirement of IAS1, Platfields
Limited does not have an unconditional right to defer settlement of the liability for at least twelve
months after the reporting period. The group and company defaulted on its repayment terms with
respect to this loan at the reporting date and therefore the amount outstanding is payable on
demand and must be recognised as a current liability. This indicates the existence of a material
uncertainty which may cast significant doubt on the company’s ability to continue as a going
concern and therefore it may not be able to realise its assets and discharge its liabilities in the
normal course of business. The financial statements do not disclose this fact.
The group incurred a net loss for the year ended 28 February 2013 of R9 099 255 and the
company incurred a net loss for the year ended 28 February 2013 of R8 837 087. Due to the
matters mentioned above and the fact that the group and company have cash constraints, the
group and company may not be able to settle liabilities as they fall due. The financial statements
are prepared on the going concern basis which, in our judgement, is inappropriate in these
circumstances.
Basis for adverse opinion – company
The company carried its investments in subsidiaries at cost less accumulated impairment and its
loans to subsidiaries at amortised cost in terms of IAS 39. Based on the inappropriate applicability
of the going concern assumption, it is our opinion that the investments in subsidiaries and loans to
subsidiaries should be impaired. The company has not impaired these investments in subsidiaries
and loans to subsidiaries.
Adverse opinion
In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion
paragraph, the financial statements do not present fairly the financial position of Platfields Limited
as at 28 February 2013, and its financial performance and cash flows for the year then ended in
accordance with International Financial Reporting Standards, and the requirements of the
Companies Act of South Africa.”
Reportable Irregularities
The text of the auditors letter is extracted from their opinion as follows:
“Report on Other Legal and Regulatory Requirements
In accordance with our responsibilities in terms of sections 44(2) and 44(3) of the Auditing
Profession Act, we report that we have identified certain unlawful acts or omissions committed by
persons responsible for the management of Platfields Limited which constitute reportable
irregularities in terms of the Auditing Profession Act, and have reported such matters to the
Independent Regulatory Board for Auditors.
This has not been disclosed to the financial statements. Particulars if of the reportable
irregularities are contraventions of the Companies Act No 71 of 2008 Section 30(1) – annual
financial statements have not been prepared within 6 months after the year-end and
Contravention of Section 61(7) – where no annual general meeting has taken place within 15
months of the previous meeting.”
2. Projects
The Leeuwkop Project
The Leeuwkop Project consists of a single new order prospecting right over the farm Leeuwkop
425 KS which is situated in the Sekhukhune Magisterial District in the Limpopo Province, South
Africa. The prospecting right is for Platinum Group Metals ("PGM") at the north-western end of the
Eastern Limb of the Bushveld Complex. The current value of the Leeuwkop Project is estimated at
R44 million (2012: R60 million). The reduction in the estimated value is due to the lower basket
price for PGM. The Group is in the process of restructuring its inter-company rights and will make
the appropriate applications for that purpose to the DMR (Department of Mineral Resources).
The Berg Project
Prospecting rights for PGM in the Eastern Limb of the Bushveld Complex in Mpumalanga, South
Africa. The Berg Project comprises portions of the farms Kliprivier and Draaikraal. The current
value of the Berg Project as a whole is estimated at R32 million (2012: R38 million). The reduction
in the estimated value is due to the lower basket price for PGM.
The Marula Project (formerly the Grootfonteinberg Project)
The Marula Project is a gold target in the Transvaal Drakensberg Goldfield. The Project consists of
a new order prospecting right for gold over four farms in the Magisterial District of Pilgrims Rest in
Mpumalanga Province, South Africa. The four properties are Lisbon 531 JT, Ceylon 197 JT, Little
Joker 157 JT and Grootfonteinberg 561 KT. There is an overlapping right over the Grootfonteinberg
561 KT portion of the prospecting area and a provision for impairment has been made accordingly.
3. Loss per share
The loss per share is based on 789,519,813 (2012: 789,597,005) weighted average number of
shares in issue and a loss for the year of R9,1 million (2012: R11,3 million).
The headline loss per share is based on 789,519,813 (2012: 789,597,005) weighted average
number of shares in issue and a loss for the year of R7,6 million (2012: R11,3 million).
4. Contingent liability
Salaries (excluding performance bonuses) which would have been due to directors in terms of
current employment contracts, accrual and payment of which are deferred and subject upon
adequate working capital by the Company, amounts to R3,549,839 (2012 : nil).
5. CEO Commentary
Platfields Operational Review
Platfields exploration activity has largely been on maintenance during the current year. The
turbulence in the South African mining industry, particularly in the platinum sector, has had a
negative effect on attracting investments in junior miners. Platfields is continuing to raise capital
and has been involved in negotiations since November 2012 as set out in the cautionary
announcements and updates thereon to date. All negotiations during 2013 were terminated but
recently the Company has entered into new negotiations.
The auditors view on the Majestic Silver loan differs from company’s view in that in our control,
the loan remains contingent upon two important factors i.e. financial adequacy by group and the
right being fully confirmed by the DMR and remaining for company to exploit.
The directors and employees of the group resolved not to receive salaries for the period under
review as part of the group’s strategy to sustain itself during the cash crisis, these will be paid as
and when cash adequacy is achieved by the group.
The group has some of its rights under re-application due to expiry thereof. The applications are in
the form of rights retention application and we await the response from DMR in this regard and
are confident that the application will be granted as is the norm under the circumstances and
economics considerations.
Annual financial statements have not been prepared within 6 months after the year-end and
Contravention of Section 61(7) – where no annual general meeting has taken place within 15
months of the previous meeting. This is due to lack of funding to undertake the audit on time or
funding to call such a meeting in time. This matter is in the process of being regularised.
The group incurred a net loss for the year ended 28 February 2013 of R9 099 255 and the
company incurred a net loss for the year ended 28 February 2013 of R8 837 087 due to in the
main group cash constraints. The group cash constraints have also led to the company not able to
appoint the requisite number of directors required to serve in its board. The board aims to
regularise these matters in due course and shareholders are referred to the prospects paragraph
below.
Financial Commentary
As Platfields is still in the exploration phase of its development it does not yet generate any cash
from its activities. The Group made a net loss for the current period of R6,4 million compared to a
loss of R11,3 million for the previous year, mainly due to an adjustment in the notional interest
charge due to the extension of the long term liability. No bonuses were paid to executive
directors. No dividends were declared or paid to shareholders during the year.
Mineral assets
There has been no change in the mineral assets of the Company for the year under review.
Share Capital
The Company currently has 789,597,005 shares in issue. No shares were issued during the current
period.
Funding and Going Concern
The provisional results 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. There can be no assurance that the
Group’s projects will be fully developed in accordance with current plans or completed on time or
within budget. As the Group is not yet in a cash-generating position, its exploration programme is
still funded by equity. The Group is currently raising capital in order to complete its exploration
programme on the Leeuwkop Project. The directors draw your attention to the fact that the
Company’s future prospects and stability relies on its ability to raise capital for the ensuing
financial year.
Future work on the development of the Group's projects and the sustainability of the Company
may also be adversely affected by factors outside the control of the Group such as the Marikana
Massacre as well as the continued woes of the European economies.
Subsequent events and renewal of cautionary announcement
Certain of the group’s prospecting rights have lapsed subsequent to the year end and petitions
have been made to the Minister of Mineral Resources for their validity and security of tenure.
The directors wish to advise that, as announced separately on 20 May 2014, it has been
approached by a third party and has commenced negotiations for the acquisition of substantial
mining assets, which will result in a reverse listing, a change in control and in the board as well as
cash flow being injected into the group, if successful.
Accordingly, shareholders are advised to continue to exercise caution when dealing in the
Company’s securities until a further announcement is made.
Prospects
Platfields currently offers a highly discounted entry into the platinum sector with a shallow
prospect targeting some 5m/oz 4PGE (Platinum Group of Elements) and other prospects in South
Africa. Platfields remains hopeful that it will raise sufficient cash to progress the next phase of its
exploration programme, albeit with caution under prevailing market conditions. Platfields’ primary
focus in the immediate future is on raising capital and conducting additional exploration in relation
to the Leeuwkop Project. It intends to continue conducting mining studies over Leeuwkop, a
shallow stand-alone portion of the Liger Project, with the goal of proceeding to a mining right
application in the short-to-medium term.
Platfields is also investigating investment into other mineral assets and continues its efforts to raise
capital for its projects.
Signed on behalf of the Board
11 July 2014
JT Motlatsi DB Mbindwane
Chairman Chief Executive Officer
PLATFIELDS LIMITED
Registered office:
2nd Floor, North Block, Hyde Park Office Tower, Cnr 6th Road and Jan Smuts Avenue, Hyde Park, 2196
P.O. Box 51949, Waterfront, 8002
Website : www.platfields.co.za
Directors:
JT Motlatsi*, DB Mbindwane (CEO), A Cilliers (FD), ND Ntombela*, ZN Kubukeli*
* - Independent non-executive
Sponsor:
Arcay Moela Sponsors Proprietary Limited
Date: 11/07/2014 02:53:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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