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Audited Abridged Condensed Consolidated Financial Statements for the Year Ended 30 June 2014 and Notice of AGM
Bauba Platinum Limited
(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
Share code: BAU ISIN No: ZAE000145686
(“Bauba Platinum” or “the Company” or “the Group”)
Audited Abridged Condensed Consolidated Financial Statements for the year ended 30 June 2014
and Notice of Annual General Meeting
AUDITED ABRIDGED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2014
2014 2013
Audited Audited
R'000 R'000
Assets
Non-current assets 28 343 30 907
Intangible assets 28 057 30 555
Property, plant and equipment 286 352
Current assets 1 278 5 460
Trade and other receivables 363 235
Cash and cash equivalents 915 5 225
TOTAL ASSETS 29 621 36 367
EQUITY AND LIABILITIES
Capital and reserves 25 072 35 561
Issued capital 127 062 123 274
Share premium 274 532 276 320
Reverse asset acquisition reserve (282 988) (282 988)
Retained (loss) (89 324) (79 686)
Non-controlling interest (4 210) (1 359)
Current liabilities 4 549 806
Trade and other payables 4 549 806
TOTAL EQUITY AND LIABILITIES 29 621 36 367
AUDITED ABRIDGED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
2014 2013
Audited Audited
R'000 R'000
Operating expenditure (345) -
Impairment of intangible assets (4 108) -
General and administrative expenses (8 144) (10 445)
Finance income 108 872
Loss before taxation (12 489) (9 573)
Income tax expense - -
Comprehensive loss for the year (12 489) (9 573)
Loss for the year (12 489) (9 573)
Attributable to:
- Equity holders of the company (9 638) (9 202)
- Non-controlling interest (2 851) (371)
Total comprehensive loss for the year (12 489) (9 573)
Attributable to:
- Equity holders of the company (9 638) (9 202)
- Non-controlling interest (2 851) (371)
Basic loss per share (cents) (7.7) (7.5)
Loss per share (cents) - Continued operations (7.7) (7.5)
Profit per share (cents) - Discontinued operations - -
Diluted loss per share (cents) (7.7) (7.5)
Loss per share (cents) - Continued operations (7.7) (7.5)
Profit per share (cents) - Discontinued operations - -
Weighted average shares in issue ('000) 125 162 123 274
Number of shares in issue at end of period ('000) 127 061 123 274
AUDITED ABRIDGED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2014
30 June 2014 30 June 2013
Audited Audited
R'000 R'000
Net (decrease) from operating activities (4 795) (10 428)
Net (decrease) from investing activities (1 515) (12 389)
Net increase from financing activities 2 000 -
Total cash movement of the year (4 310) (22 817)
Cash and cash equivalents at beginning of year 5 225 28 042
Cash and cash equivalents at end of year 915 5 225
AUDITED ABRIDGED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2014
Non- Reverse
Share Share Retained controlling acquisition
capital premium loss interest adjustment Total
R'000 R'000 R'000 R'000 R'000 R'000
Balance at 1 July 2012 123 274 276 320 (70 484) (988) (282 988) 45 134
Comprehensive loss for the year - - (9 202) (371) - (9 573)
Balance as at 30 June 2013 123 274 276 320 (79 686) (1 359) (282 988) 35 561
Comprehensive loss for the year - - (9 638) (2 851) - (12 489)
Issue of shares 3 788 (1 788) - - - 2 000
Balance at 30 June 2014 127 062 274 532 (89 324) (4 210) (282 988) 25 072
AUDITED ABRIDGED CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS
Segmental Information
2014 Corporate Exploration Total
Finance income 108 - 108
Operating expenditure - (345) (345)
General and administrative expenses (5 390) (2 675) (8 065)
Impairment of intangible assets - (4 108) (4 108)
Depreciation and Amortisation (42) (37) (79)
Comprehensive loss for the year (5 324) (7 165) (12 489)
Total Segment Assets 1 271 28 350 29 621
Total Segment Liabilities 522 4 027 4 549
2013 Corporate Exploration Total
Finance income 872 - 872
General and administrative expenses (9 408) (930) (10 338)
Depreciation and Amortisation (48) (59) (107)
Comprehensive loss for the year (8 584) (989) (9 573)
Total Segment Assets 5 620 30 747 36 367
Total Segment Liabilities 451 355 806
Commentary
The primary focus of the Group during the year under review was the raising of funding in a financial
climate not conducive to capital raising for exploration miners. The main objective being to continue
the exploration activities in order to develop the platinum assets (“Bauba Project”). Due to these
challenges, the Group decided to complete the drilling activities it started in the previous financial
year and suspend all new exploration drilling activities until sufficient cash is secured. These audited
abridged condensed consolidated financial statements reflect the Group expenditure of R1.6 million
cash on exploration related activities and in support of the exploration programme and pursuing the
chrome asset acquisition. In compliance with all regulatory requirements, the Group expended R8.4
million on operational, general and administration costs during the year under review.
Exploration
The Group’s exploration activities were constrained to the completion of the drilling activities
commenced in the previous financial year. After the completion of the exploration activities the
Group re-assessed the total resource and declared a total inferred resource of 16.9 Moz (attributable
10.1 Moz) PGM. The total target resource is 109.9 Moz (attributable 65.9 Moz).
The exploration planning for the next year includes continued drilling of planned holes in the Northern
Cluster. The number of drill rigs in operation will depend on the economic climate and the ability of the
Group to raise capital when required. Currently all drilling activities are on hold.
Notes to the audited abridged condensed consolidated financial
statements:
Summary of significant accounting policies
Basis of preparation
The directors present the audited abridged condensed consolidated results for the year ended 30
June 2014 which have been prepared in accordance with the framework concepts and the
measurement and 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 (“JSE”) 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 audited abridged condensed consolidated financial statements have been prepared under the
supervision of Willem Moolman, the Financial Director of Bauba Platinum, are derived from the
Group annual financial statements and are consistent in all material respects with the Group annual
financial statements.
The Group annual financial statements are available for inspection at the company’s registered office
and are available on the Company website: www.bauba.co.za.
No dividends were declared by Bauba Platinum during this reporting period.
Issue of shares
During the year under review the Company issued 3 787 879 shares at R0.66 per share in terms of
the general authority granted to the board of directors (“Board”) at the Annual General Meeting of the
Company held on 5 December 2013.
Headline Loss
2014 2013
Audited Audited
Headline loss per share (cents) (4.4) (7.5)
Diluted headline loss per share (cents) (4.4) (7.5)
Adjustment to arrive at headline earnings:
Net loss before taxation for the year (9 638) (9 202)
Impairment of intangible assets 4 108 -
Headline loss (5 530) (9 202)
Headline earnings per share have been calculated in accordance with the SAICA Circular 2/2013 entitled ‘Headline
Earnings’ which forms part of the Listings Requirements of the JSE Limited.
Segmental information
The Group has classified two segments namely, (1) Corporate expenses, being administration,
regulatory and corporate expenses incurred and (2) Exploration, being activities associated with the
Bauba Project, platinum exploration and costs incurred in evaluating the acquisition as described in
the circular to shareholders dated 22 August 2014.
Going concern
The annual 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 exploration and mining
companies, the Group raises capital for exploration and other projects as and when required. There
can be no assurance that the Group’s projects will be fully developed in accordance with current plans
or completed on time or to budget. Future work on the development of these projects may be
adversely affected by factors outside the control of the Group.
Following the successful acquisition of beneficial ownership of the chrome prospecting right
subsequent to the financial year-end (refer note 23 of the Integrated Annual Report), the Board has a
reasonable expectation that the Group will have adequate resources to continue in operational
existence for at least the next 12 months.
Contingent liabilities
The Group is involved in two litigation matters. The details are as follows:
- A review application was lodged by Rustenburg Platinum Mines Limited with regards the
prospecting rights held over the farms Genokakop 285 KT and Groot Vygenboom 284 KT, and
- A previous employee of the Company has lodged a claim for compensation due to his
resignation for alleged good cause.
The Company has taken senior council advice on both these matters and was informed that the
Company has a strong case in both instances and the judicial system should find in the Company’s
favour. The potential financial effect of the outcomes is uncertain in light of the outcome being
subjected to the judicial process.
The non-executive directors of the Company agreed to postpone payment of 50% of their fees until
such time that the Company is in a cash position to pay the outstanding fees. The amount of
R877 000 will become due and payable only if sufficient cash becomes available in the future.
As at 30 June 2014 the Company was in the process of finalising the acquisition of chrome assets
transaction (“Chrome Asset Acquisition”) as described in note 23 of the Integrated Annual Report.
Certain costs will be incurred once approval is received from the JSE to conclude the Chrome Asset
Acquisition and at present the expected costs amounts to R1 000 000.
To the best of the Board’s knowledge and belief there are no other contingent liabilities to third parties
and/or contingent assets not set out or referred to in this report which may materially affect the
financial position of the Group as at 30 June 2014.
Changes to the board of directors
There were no changes to the board of directors during the financial year under review.
Subsequent events
- In the Chrome Asset Acquisition the Company acquired 60% of the beneficial rights over the
prospecting rights held over the farms Moeijelijk 412KS and Waterkop 113KT. The remaining
40% of the beneficial rights resides with the minority shareholders in Bauba’s subsidiary, Bauba
A Hlabirwa Mining Investments Proprietary Limited (“Hlabirwa”);
- The farms Moeijelijk 412KS and Waterkop 113KT are located approximately 50 km’s north west
of Steelpoort in the Limpopo Province of South Africa, an area where significant mining
operations exist with the corresponding infrastructure to support the mining activities;
- The chrome ore body on the farm Moeijelijk 412KS sub-outcrops very near surface and thus
lends itself to open cast mining that provides for a low-cost mining operation and a relatively
quick start-up process. The expected life of mine of the open cast operation is five to six years
based on a mining plan of 20 000 tons per month. The initial focus will be to develop the open
cast operations with underground operations to be considered once the open cast operations
have reached planned milestones;
- Hlabirwa have entered into a lease and option agreement with the surface rights owners, a turn-
key mining arrangement to deliver run-of-mine ore and an off take agreement for the sale of the
chrome ore that were all subject to the approval of the Chrome Asset Acquisition and the
awarding of a mining permit by the Department of Mineral Resources (“DMR”); and
- Bauba Platinum shareholders approved the amendment of the Memorandum of Incorporation to
convert its authorised ordinary shares of R1 each into ordinary shares of no par value, to
increase its authorised share capital from 200 million to 750 million ordinary shares, to issue the
Houtbosch payment shares in terms of the acquisition of the prospecting right granted over farm
Houtbosch 323KT and to cancel the claw back provision relating to the 2010 Assets for Shares
Agreement.
In addition, the following events also occurred:
- The notarial execution of the farm Houtbosch 323KT was completed on 27 August 2014;
- A rehabilitation guarantee of R5.1million was obtained from ASA Metals Proprietary Limited
(“ASA Metals”) and lodged with the DMR in support of the mining permit application; and
- Hlabirwa entered into a pre-emptive agreement with ASA Metals granting them the pre-emptive
right to acquire the mineral rights over the farm Moeijelijk 412KS should the Group decide to sell
these rights.
The Board are not aware of any subsequent events other than those disclosed above that occurred
between the Company’s year-end and the date of authorisation of the annual financial statements and
that require any adjustments or additional disclosure in the annual financial statements.
Audit opinion
The independent auditors, BDO South Africa Inc., have issued their opinion on the Group’s financial
statements for the year ended 30 June 2014. The audit was conducted in accordance with
International Standards on Auditing. They have issued an unqualified audit opinion with an emphasis
of matter on going concern. These audited abridged condensed consolidated financial statements
have been derived from the Group annual financial statements and are consistent in all material
respects with the Group annual financial statements. A copy of their audit report is available for
inspection at the Company’s registered office.
The emphasis of matter extract of the report is as follows: “EMPHASIS OF MATTER - Without
qualifying our opinion, we draw attention to the consolidated and separate annual financial statements
which indicate that the Group incurred a net loss of R12 489 000 for the year ended 30 June 2014
and, as at the date of this report, the Group’s cash resources will not be sufficient to sustain the
operations of the Group for more than 12 months subsequent to year end. The note 22 also indicates
that these conditions, along with other matters, indicate the existence of a material uncertainty which
may cast significant doubt on the Company’s ability to continue as a going concern.”
Notice of Annual General Meeting
The Annual General Meeting of shareholders of the Company is to be held at 10:00 on 7 November
2014 at First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways,
Gauteng, for the purpose of considering, and, if deemed fit, passing, with or without modification, the
resolutions set out in the Notice of Annual General Meeting, which is contained in the Integrated
Annual Report.
The board of directors of the Company has determined that, in terms of section 62(3)(a), as read with
section 59 of the Companies Act, 2008 (Act 71 of 2008), as amended, the record date for the
purposes of determining which shareholders of the Company are entitled to participate in and vote at
the Annual General Meeting is 31 October 2014. Accordingly, the last day to trade Bauba Platinum
shares in order to be recorded in the Register to be entitled to vote will be 24 October 2014.
The Integrated Annual Report will be posted to shareholders on or before 30 September 2014 and is
available on the Company website: www.bauba.co.za.
On behalf of the Board
J Best SJM Caddy
Chairman Chief Executive Officer
Johannesburg
22 September 2014
Registered Office
First Floor, Building 816/5, Hammets Crossing Office Park,
2 Selbourne Road, Fourways, Gauteng, 2055.
Company Secretary
Merchantec Proprietary Limited,
2nd Floor, North Block, Hyde Park Office Tower,
Cnr 6th Road and Jan Smuts Avenue,
Hyde Park, 2196, P O Box 41480, Craighall, 2024
Directors
J Best# (Chairman), K Dicks# , S Dolamo# , KW Mzondeki# , Dr NM Phosa*, D Smith*,
King T Thulare (Alt)* SJM Caddy (CEO), WA Moolman (FD).
# - Independent non-executive
* - Non-executive
Sponsor Transfer Secretaries
Merchantec Capital Computershare Investor Services Proprietary Limited
Date: 22/09/2014 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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