Wrap Text
Interim Report for the six months ended 30 June 2014
Pallinghurst Resources Limited
(Incorporated in Guernsey)
(Guernsey registration number: 47656)
(South African external company registration number 2009/012636/10)
Share code on the BSX: PALLRES
ISIN: GG00B27Y8Z93
Share code on the JSE: PGL
(“Pallinghurst” or the “Company”)
Interim Report for the six months ended 30 June 2014
I am pleased to report that the significant progress made in each of our Investment Platforms has led to a material
increase in the underlying value of Pallinghurst’s assets and a net profit for the Company of over US$100 million for the
six months ended 30 June 2014. These solid results are primarily attributable to increases in Gemfields’ share price and
the valuation of Jupiter. The Company’s share price has also risen, doubling in the past 12 months, making it one of the
best performing stocks on the JSE for the year. I expect further value to be unlocked as we start seeing the fruits of
the past seven years of effort.
Some of the key milestones achieved this year include:
PGM production of 71,800 ounces for the first six months of the year;
Acquisition of 45 million PGM ounces at Kruidfontein, boosting SPM’s resource base to over 100 million PGM ounces;
SPM has retained its strong balance sheet and is set to report improved production and financial results;
In challenging markets, Tshipi was profitable in its first full financial year of operations;
Over one million tonnes of manganese ore has been produced at Tshipi in the six months to 31 August 2014;
Gemfields’ inaugural ruby auction realised US$33.5 million in revenues, a strong debut for its second major gemstone
revenue stream;
Gemfields achieved revenues of US$160 million and EBITDA of US$59 million for the year to 30 June 2014; and
Continued integration of Gemfields and Faberge (following their merger which was awarded “AIM transaction of the year”).
These significant achievements are the result of our focus on building the long-term sustainability of each business and
I expect to be able to report further progress as we seek to realise the inherent value in our Investment Portfolio.
Arne H. Frandsen
Chief Executive
Investment Manager’s Report
Platinum Group Metals (“PGM”)
Sedibelo Platinum Mines Limited (“SPM”) has continued to develop well in 2014 despite a difficult industry backdrop. The
historic five month labour strike at the three largest platinum producers - Anglo American Platinum, Impala Platinum and
Lonmin - ended in June 2014 after a wage agreement was reached with the Association of Mineworkers and Construction
Union. The strikes were the longest and most costly in South African mining history with lost revenues estimated to be
over US$2 billion for those three producers. The strikes are likely to put pressure on producers to close or sell high-
cost operations and to move to increased mechanisation.
Despite the significant reduction in supply caused by the strikes, the platinum price did not respond as might have been
expected. This may have been attributable to larger than expected above-ground platinum stocks held by industrial users
and built up by producers in advance of the strikes. However, these reserves will now have been reduced and with the long
and costly post-strike return to production that these three producers are still experiencing, PGM prices should be
stronger in the medium-term.
Production at SPM’s Pilanesberg Platinum Mine (“PPM”) continues to improve, with 71,800 4E PGM ounces dispatched in the
first six months of 2014. This represents a 9% production increase compared to the first six months of 2013 and was
achieved despite unseasonably heavy rainfall in January and February. A key focus for SPM’s development is the
establishment of a secondary ore source to PPM which will increase production volumes and improve operational
flexibility. In June 2014, SPM approved the development of the “East Pit”, the ore body previously known as Sedibelo
Central. The first reef is expected to be mined from this open-pit operation within the next six to nine months.
As a debt-free company with a strong balance sheet, SPM remains alert to potential opportunities triggered by current
low PGM prices. In January 2014, SPM agreed to acquire the prospecting right on Kruidfontein, a property contiguous to
and directly down-dip of its Magazynskraal ore body. Kruidfontein contains an estimated 45 million PGM ounces and was
acquired for US$30 million (US$0.75 per ounce). The significant increase in resources to over 100 million ounces is
expected to improve SPM’s attractiveness in an IPO and further cement its position as a long-life mining operation.
In April 2014, SPM invested in the Kell technology, an innovative hydrometallurgical alternative to the smelting of PGM
concentrates. Kell is an environmentally friendly process, requiring only a small amount of electricity as compared to
traditional smelting, and has the potential to increase recoveries. Initial test results have been positive and analysis
is ongoing as to whether the process can be applied to SPM’s current operations and potentially to other industry
producers.
In July 2014, certain shareholders agreed to invest a further US$65 million into SPM. This investment will boost SPM’s
balance sheet and enable it to develop the East Pit whilst still maintaining a prudent capital structure.
Although preparations for the listing of SPM continue, the timing of an IPO remains subject to equity market and PGM
industry conditions. Despite the well-publicised strikes having ended, many publicly listed PGM producers have seen
significant pressure on their share prices. However, supply challenges persist and there are signs of steady demand
increases, which should provide support for future PGM price increases. SPM with its large, sustainable and relatively
shallow resource base is well-positioned to benefit once market conditions are more favourable.
Steel Making Materials
Manganese production at Tshipi Borwa has increased in line with its ramp-up plan and its rail allocation from Transnet,
the South African state rail operator. In the financial year to 28 February 2014, Tshipi Borwa produced and sold nearly
one million tonnes of manganese ore, recording a profit in its first full year of operations, a significant achievement
for a newly established mine.
Over one million tonnes of manganese ore were produced in the six months to 31 August 2014 and Tshipi remains profitable,
despite the weak manganese price environment. Target production for the financial year to 28 February 2015 has been
raised to between 1.7 and 2 million tonnes. Commissioning of the rapid load-out station has reduced loading times
significantly, improving overall capacity and reducing costs.
Jupiter Mines Limited (“Jupiter”) completed its delisting from the Australian Securities Exchange (“ASX”) on 10 January
2014 following approval from its shareholders and the ASX.
In the Central Yilgarn region of Western Australia, Jupiter has been issued a mining right over Mount Mason. To optimise
the capital and operating expenditure at Mount Mason, tenders for construction and operation of the mine have been
sought and the initial proposals are at significantly reduced costs compared to prior estimates.
During May 2014, the Government of Western Australia announced that it had selected the Yilgarn Esperance Solution
consortium (“YES consortium”) as the preferred proponent to design, build and operate the Esperance Port Multi-User Iron
Ore Facility. The selection of the YES consortium to expand the port was a significant step forward and should Jupiter
secure access to the Esperance facility, Mount Mason has the potential to start generating profits by 2017 and establish
Jupiter as an iron ore producer in the Central Yilgarn region.
Coloured Gemstones
Gemfields plc (“Gemfields”) successfully established its second major gemstone revenue stream at the inaugural auction of
rough ruby and corundum realising revenues of US$33.5 million at an average price of US$18.43 per carat. The auction was
held in Singapore in June 2014 and comprised high and low quality material from the Montepuez deposit in Mozambique, in
which Gemfields has a 75% interest. The revenues from this auction were equivalent to the total acquisition and
development cost of Montepuez to that point, a significant achievement for any new operation. Gemfields invited its
existing emerald customers to the auction, some of whom were successful in bidding for ruby and corundum parcels. The
ability of Gemfields to attract buyers to a range of different coloured gemstones is an important development for the
industry and is expected to increase demand for all of Gemfields’ gemstones. It is anticipated that a second rough ruby
and corundum auction will take place before the end of 2014.
Gemfields held a high quality rough emerald and beryl auction in Lusaka, Zambia in February 2014. Auction revenues were
US$36.5 million, a record revenue figure for any Gemfields auction, accompanied by the highest average price achieved at
any Gemfields auction of US$59.31 per carat.
In May 2014, Gemfields held an auction of traded rough emeralds in Jaipur, India. The emeralds sold at the auction were
predominantly of higher quality and comprised Zambian and Brazilian gemstones obtained by Gemfields in the open market.
Revenues achieved from the auction were US$13.5 million, at an average price of US$50 per carat.
In August 2014, a lower quality emerald and beryl auction was held in Lusaka, Zambia. Revenues achieved from the auction
were US$15.5 million, the second highest at any lower quality auction, representing an average price of US$1.34 per carat.
The auction saw the sale of 1.5 million tonnes of low grade beryl, material that had not been sold in the three prior
lower quality auctions. On a comparable basis therefore, excluding this low grade beryl, the average per carat price
realised was a record US$3.61, representing a 9% increase on the US$3.32 per carat achieved at the most recent lower
quality auction in November 2013.
Gemfields has now held 17 auctions since July 2009 (including its inaugural ruby and corundum auction) which have
generated almost US$310 million in aggregate revenues. Gemfields continues to achieve increases in per carat prices (on
a quality-for-quality basis) underpinned by solid demand for its ethically sourced and transparently supplied gemstones.
The strong auction results boosted Gemfields revenues to a record US$160 million for the financial year to 30 June 2014,
EBITDA of US$59 million and a net profit of US$16 million.
Emerald and beryl production at Kagem decreased by one-third to 20 million carats in the year to 30 June 2014 and grade
fell 11% to 253 carats per tonne. The reduced production was a result of unusually high rainfall and characteristic
grade volatility in coloured gemstone mining, and is expected to improve in the near-term. Production of ruby and
corundum at Montepuez increased more than threefold to 6.5 million carats in the year to 30 June 2014, with total cash
operating costs increasing to US$11 million.
During April 2014, the Company extended a US$15 million unsecured 12 month working capital facility to Gemfields. US$10
million of the facility has been drawn to date, helping Gemfields smooth its cash flow, given the intermittent nature of
revenues from its gemstone auctions and the ongoing development of its ruby, rough gemstone trading and Faberge
businesses.
Faberge continued to expand its product range in line with its strategic plan. Faberge has seen its sales margins
improve and the brand has increased the profile of Gemfields and boosted demand and aspiration for its coloured
gemstones.
Faberge collaborated over the Easter period with Harrods, one of the world’s most famous department stores, to host a
‘Faberge Easter’ involving considerable areas of the Harrods store. Faberge had an exclusive salon and exhibition space,
in addition to its existing concession in Harrods’ "Fine Jewellery Room”, which saw record monthly sales.
Following the success of The Faberge Big Egg Hunt in London in 2012, a similar initiative took place in New York during
the 2014 Easter period. Almost 300 giant egg sculptures designed by globally renowned artists, designers, architects and
brands were placed throughout the five boroughs of New York City. The event culminated in two auctions where US$2.7
million was raised for the charities ‘Elephant Family’ and ‘Studio-in-a-School’.
Gemfields’ success in applying its proven mining, grading and auction system to the new ruby deposit gives confidence
that additional gemstones can be added to the portfolio and quickly developed into profitable assets. Gemfields continues
to evaluate acquisition opportunities as well as potential expansions and improvements at its existing Kagem and
Montepuez operations. In September 2014, Gemfields announced a joint venture to progress opportunities in the Sri Lankan
sapphire and gemstone sector and the acquisition of 75% of a variety of exploration licences in the country.
In the past year Gemfields has developed into a sizeable multi-gemstone producer and is well-positioned to deliver
further consolidation in the gemstone industry. The existing revenue streams continue to be refined and developed and
also represent a significant opportunity for continued growth.
Pallinghurst (Cayman) GP L.P.
September 2014
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2013
1 January 2014 1 January 2013 1 January 2013
to 30 June 2014 to 30 June 2013 to 31 December 2013
US$ 000 US$ 000 US$ 000
INCOME Notes (reviewed) (reviewed) (audited)
Investment Portfolio
Unrealised fair value gains 3 106,426 - 51,458
Unrealised fair value losses 3 - (52,709) (10,503)
Realised fair value loss on disposal of
Faberge equity shares 4 - (7,952) (7,952)
Realised loss on conversion of Faberge
loan to Gemfields shares 4 - (12,027) (12,027)
106,426 (72,688) 20,976
Investment Portfolio revenue
Loan interest income 3 135 - -
135 - -
Net gain/(loss) on investments and
income from operations 106,561 (72,688) 20,976
EXPENSES
Investment Manager’s Benefit (2,574) (2,732) (5,220)
Operating expenses (382) (449) (895)
Foreign exchange gains - - 24
Foreign exchange losses - (26) -
(2,956) (3,207) (6,091)
Net gain/(loss) from operations 103,605 (75,895) 14,885
Finance income 6 18 32
Net finance income 6 18 32
Profit before share in profit/(loss)
of associates 103,611 (75,877) 14,917
Share in profit/(loss) of associates 7 (474) (224)
Profit/(loss) before tax 103,618 (76,351) 14,693
Tax - - (4)
NET PROFIT/(LOSS) AFTER TAX 103,618 (76,351) 14,689
Other comprehensive income - - -
TOTAL COMPREHENSIVE INCOME/(EXPENSE) 103,618 (76,351) 14,689
Basic and diluted earnings/(loss)
per ordinary share - US$ 8 0.14 (0.10) 0.02
All elements of total comprehensive expense for the period and all comparative periods are attributable to owners of the
parent. There are no non-controlling interests. The accompanying notes form part of these Financial Statements.
CONDENSED CONSOLIDATED BALANCE SHEET
as at 30 June 2014
30 June 2014 30 June 2013 31 December 2013
US$ 000 US$ 000 US$ 000
Notes (reviewed) (reviewed) (audited)
ASSETS
Non-current assets
Investments in associates 1,260 1,011 1,253
Investment Portfolio
Listed equity investments 3 208,090 117,968 174,618
Unlisted equity investments 3 288,191 176,202 215,237
496,281 294,170 389,855
Total non-current assets 497,541 295,181 391,108
Current assets
Investment Portfolio
Loans and receivables 3 9,935 - -
Trade and other receivables 1,515 1,515 1,152
Cash and cash equivalents 10,934 28,314 23,907
Other investments 29 59 58
Total current assets 22,413 29,887 25,117
Total assets 519,954 325,069 416,225
LIABILITIES
Current liabilities
Trade and other payables 289 62 178
Total current liabilities 289 62 178
Total liabilities 289 62 178
Net assets 519,665 325,007 416,047
Capital and reserves attributable
to equity holders
Share capital 8 8 8
Share premium 375,227 375,227 375,227
Retained earnings/(losses) 144,430 (50,228) 40,812
EQUITY 519,665 325,007 416,047
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2014
1 January 2014 1 January 2013 1 January 2013
to 30 June 2014 to 30 June 2013 to 31 December 2013
US$ 000 US$ 000 US$ 000
Notes (reviewed) (reviewed) (audited)
Net cash used in operating activities 6 (12,973) (3,999) (8,464)
Investing activities
Amounts invested in associates - (71) (63)
Amounts returned from associates - 434 434
Net cash from investing activities - 363 371
Financing activities
Net cash (used in)/from financing activities - - -
NET DECREASE IN CASH AND CASH EQUIVALENTS (12,973) (3,636) (8,093)
Cash and cash equivalents at the beginning
of the period/year 23,907 31,976 31,976
Foreign exchange gain on cash - - 24
Foreign exchange loss on cash - (26) -
CASH AND CASH EQUIVALENTS AT THE END OF
THE PERIOD/YEAR 10,934 28,314 23,907
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2014
Share Share Retained Total equity
capital premium earnings/losses
US$ 000 US$ 000 US$ 000 US$ 000
Balance at 1 January 2013 (audited) 8 375,227 26,123 401,358
Total comprehensive loss for the period - - (76,351) (76,351)
Balance at 30 June 2013 (reviewed) 8 375,227 (50,228) 325,007
Total comprehensive income for the period - - 91,040 91,040
Balance at 31 December 2013 (audited) 8 375,227 40,812 416,047
Total comprehensive income for the period - - 103,618 103,618
Balance at 30 June 2014 (reviewed) 8 375,227 144,430 519,665
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the six months ended 30 June 2014
1. General information
The financial statements within the Interim Report are for the period from 1 January 2014 to 30 June 2014 (the “Interim
Financial Statements”). The financial information for the year ended 31 December 2013 included in these Interim Financial
Statements does not constitute statutory Financial Statements as defined in The Companies (Guernsey) Law, 2008.
The information included in this document for the comparative year was derived from the Annual Report and Financial
Statements for the year ended 31 December 2013 (the “Annual Financial Statements”), a copy of which has been delivered
to the Guernsey Financial Services Commission, the Johannesburg Stock Exchange (“JSE”) and the Bermuda Stock Exchange.
The auditor’s report on the Annual Financial Statements was unqualified, did not draw attention to any matters by way of
emphasis, and stated that the Annual Financial Statements had been properly prepared in accordance with The Companies
(Guernsey) Law, 2008.
2. Accounting policies
Basis of accounting
These Interim Financial Statements have been prepared in accordance with IAS34 Interim Financial Reporting (“IAS34”) and
applicable legal requirements of The Companies (Guernsey) Law, 2008. They do not include all of the information required
for full financial statements and are to be read in conjunction with the Group’s most recent Annual Financial Statements.
The Group’s Annual Financial Statements were prepared under International Financial Reporting Standards (“IFRS”), the
financial reporting guides issued by the Accounting Practices Committee of the South African Institute of Chartered
Accountants (the “SAICA Reporting Guides”) and the financial reporting pronouncements issued by the Financial Reporting
Standards Council of South Africa (the “FRSC Pronouncements”).
The Interim Financial Statements have been prepared on the historic cost basis, except for the valuation of certain
equity investments held within the Investment Portfolio. These equity investments are measured at fair value not
historic cost. Historic cost is generally based on the fair value of the consideration given in exchange for the assets.
Other than information contained within the Condensed Consolidated Statement of Cash Flows, the Interim Financial
Statements have been prepared on the accruals basis.
As the Group is an investment holding company, materially all of the Group’s results are related to the Group’s
investment valuations. As such, the Group’s interim results are not directly affected by seasonality or the cyclicality
of operations. An investment’s most recent financial results do not necessarily directly impact upon the fair value of
that investment and other factors are usually more relevant in determining fair value than seasonality or the cyclicality
of operations.
The principal accounting policies applied are consistent with those adopted and disclosed in the Annual Financial
Statements, except for new standards and interpretations effective 1 January 2014 (which had not been early adopted).
Adoption of new accounting standards
Investment entities
The Group has adopted the Investment Entities (Amendments to IFRS10, IFRS12 and IAS27) (the “Investment Entities
Amendments”), effective 1 January 2014. These amendments provide an exception to the consolidation requirement for
entities that meet the definition of an investment entity under IFRS10 Consolidated Financial Statements (“IFRS10”).
The exception instead requires investment entities to account for certain subsidiaries at fair value through profit or
loss.
The Directors have concluded that the Company is an investment entity in the context of IFRS10. In order to reach this
conclusion, the Directors gave consideration to and agreed that the Company meets the following requirements of an
investment entity:
The Company invests solely to provide returns from capital appreciation, investment income or both.
The Company measures the performance of all its investments on a fair value basis.
The Company does not plan to hold its investments indefinitely and has an exit strategy for each investment.
In addition, the Directors also note that the Company holds a number of investments and has a large number of
shareholders, both of which are considered typical characteristics of an investment entity.
In consequence, the Group is required to measure investments in subsidiaries at fair value through profit or loss rather
than consolidating such interests (other than subsidiaries providing investment-related services, which should be
consolidated as previously).
The adoption of the Investment Entities Amendments has not had an impact in the current or comparative periods as the
Group does not currently hold any subsidiaries which form part of the Investment Portfolio. If the Group holds any such
subsidiaries in the future, these would be accounted for at fair value.
Amendments to IAS32 Financial Instruments: Presentation – offsetting financial assets and financial liabilities
These amendments clarify the meaning of “legally enforceable right to set-off” and are relevant to clearing houses and
similar organisations. The amendments have had no impact on the Group.
Amendments to IAS39 Financial Instruments: Recognition and Measurement – novation of derivatives
These amendments relate to hedge accounting when novation of a derivative designated as a hedging instrument meets
certain criteria. The amendments have had no impact on the Group as it does not hold any such derivatives.
Amendments to IAS36 Impairment of Assets – recoverable amount disclosures
These amendments require disclosure of the recoverable amounts for the assets or cash-generating units for which an
impairment loss has recognised or reversed during the period. The amendments have had no impact on the Group.
Adoption of IFRIC21 Levies
IFRIC21 is effective for annual periods beginning on or after 1 January 2014 and is applicable to all levies imposed by
a government other than those outflows within the scope of another standard (usually IAS12 Income Taxes). The Group is
not subject to any such levies and the amendments have had no impact.
Presentation
Amounts have been rounded to the nearest thousand (or million) as appropriate, for ease of presentation. The rounding of
figures may cause some computational discrepancies.
3. Investments
The reconciliation of the Investment Portfolio from 1 January 2014 to 30 June 2014 is as follows:
Accrued
Unrealised Unrealised interest and Additions
Opening at 1 fair value fair value structuring and Closing at 30
January 2014 gains (1)(2) losses fee (3) disposals (3) June 2014
US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000
(reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
Investment
Listed equity investments
Gemfields 144,361 63,729 - - - 208,090
144,361 63,729 - - - 208,090
Unlisted equity investments
Jupiter 30,257 42,697 - - - 72,954
Sedibelo
Platinum Mines 215,237 - - - - 215,237
245,494 42,697 - - - 288,191
Total
non-current 389,855 106,426 - - - 496,281
Loans and receivables
Gemfields loan - - - 135 9,800 9,935
- - - 135 9,800 9,935
Total current - - - 135 9,800 9,935
Total Investment
Portfolio 389,855 106,426 - 135 9,800 506,216
(1) The unrealised fair value gain on Gemfields of US$63.729 million includes an unrealised foreign exchange gain of
US$4.653 million.
(2) The unrealised fair value gain on Jupiter of US$42.697 million does not include any foreign exchange as the valuation
is denominated in US$.
(3) The Group has committed to provide a loan to Gemfields of up to US$15 million for general working capital purposes.
The loan can be drawn in two tranches, US$10 million which could be drawn before 30 November 2014, and US$5 million which
can be drawn between 15 July 2014 and 30 November 2014. At 30 June 2014, Gemfields had drawn down US$9.8 million (US$10
million less an arrangement fee of US$0.2 million or 2%). Interest is payable on the loan, calculated at three month US$
LIBOR plus 4.5%, on each tranche. The outstanding balance of the loan at 30 June 2014 is US$9.935 million and includes
interest and a pro-rated element of the arrangement fee. The balance of the loan, including interest, is due for
repayment by 30 April 2015.
The reconciliation of the Investment Portfolio from 1 January 2013 to 30 June 2013 is as follows:
Realised
Unrealised Unrealised loss on Additions
Opening at 1 fair value fair value Gemfields/ and Closing at 30
January 2013 gains losses (1)(2)(3) Faberge Merger disposals June 2013
US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000
(reviewed) (reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
Investment
Listed equity investments
Gemfields 59,569 - (32,049) - 64,075 91,595
Jupiter 38,106 - (12,366) - 632 26,373
97,675 - (44,415) - 64,707 117,968
Unlisted equity investments
Faberge 33,456 - - (7,952) (25,503) -
Sedibelo
Platinum Mines 184,495 - (8,293) - - 176,202
217,951 - (8,293) (7,952) (25,503) 176,202
Loans and receivables
Faberge US$50
million loan 50,599 - - (12,027) (38,572) -
50,599 - - (12,027) (38,572) -
Total non-current366,226 - (52,708) (19,980) 632 294,170
Total current - - - - - -
Total Investment
Portfolio 366,226 - (52,708) (19,980) 632 294,170
(1) The unrealised fair value loss on Gemfields of US$32.049 million includes an unrealised foreign exchange loss of
US$5.701 million.
(2) The unrealised fair value loss on Jupiter of US$12.366 million includes an unrealised foreign exchange loss of
US$4.558 million.
(3) The unrealised fair value loss on SPM of US$8.293 million includes an unrealised foreign exchange loss of
US$26.08 million.
The reconciliation of the Investment Portfolio from 1 January 2013 to 31 December 2013 is as follows:
Realised
Unrealised Unrealised loss on Additions
Opening at 1 fair value fair value Gemfields/ and Closing at 31
January 2013 gains (1) losses (2) Faberge Merger disposals December 2013
US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000
(audited) (audited) (audited) (audited) (audited) (audited)
Investment
Listed equity investments
Gemfields 59,569 20,717 - - 64,075 144,361
Jupiter 38,106 - (10,503) - 2,654 30,257
97,675 20,717 (10,503) - 66,729 174,618
Unlisted equity investments
Faberge 33,456 - - (7,952) (25,503) -
Sedibelo
Platinum Mines 184,495 30,742 - - - 215,237
217,951 30,742 - (7,952) (25,503) 215,237
Loans and receivables
Faberge US$50
million loan 50,599 - - (12,027) (38,572) -
50,599 - - (12,027) (38,572) -
Total non-current366,226 51,458 (10,503) (19,980) 2,654 389,855
Total current - - - - - -
Total Investment
Portfolio 366,226 51,458 (10,503) (19,980) 2,654 389,855
(1) The unrealised fair value gain on Gemfields of US$20.717 million includes an unrealised foreign exchange gain of
US$4.412 million.
(2) The unrealised fair value loss on Jupiter of US$10.503 million includes an unrealised foreign exchange gain of
US$5.433 million.
The JSE requires certain further information to be disclosed on the Group’s ten largest investments. Fewer than ten
separate investments were held at the current and comparative balance sheet dates, therefore the relevant details for
each of the Group’s investments at 30 June 2014 are detailed below.
Sedibelo Platinum Mines Limited- equity
Nature of investment
The Group holds an equity interest in SPM, a producer of PGMs with interests in the Bushveld Complex in South Africa.
Fair value methodology: Directors’ estimate
The Directors have estimated that the value of SPM is US$3.2 billion; the Group’s indirect 6.73% interest has therefore
been valued at US$215 million.
The Directors have considered a range of sources in determining the valuation of SPM. The primary source was a competent
person’s report prepared by an independent third party as at 31 December 2013. The competent person’s report includes
discounted cash flow (“DCF”) analysis to value Sedibelo Platinum Mines’ key assets and includes a range of valuations.
The Directors then utilised more recent forecasts for PGM prices over the life of the asset resulting in a discount to
the competent person’s valuation. The DCF analysis is based on a large number of predictions and uncertainties including
forecast PGM prices, costs, exchange rates and the consolidated mine plan. Changing any of these assumptions may
materially affect the implied valuation. The Directors have also considered the recent financial results from SPM.
These factors will have an impact on the likely valuation of SPM for its IPO, which is expected to occur once market
conditions are favourable.
The Directors note that long-term PGM price forecasts are either in line with or slightly below forecasts made around
31 December 2013, which imply a small reduction in valuation. The Directors also note the increase in the mining reserves
and production levels of SPM during the period, which imply a small increase in valuation. The Directors have therefore
determined that a valuation of SPM at US$3.2 billion continues to be reasonable. The valuation methodology complies with
IFRS and the IPEVC Valuation Guidelines but should be treated with caution due to its subjective nature.
Other considerations
The consolidation of three contiguous properties, the PPM, Sedibelo and Magazynskraal, was completed on 3 December 2012.
The completion of the consolidation and the investment by the IDC gave an implied fair value for the Group’s indirect
interest of US$176 million, which was used to value the Group’s interest at 30 June 2013. The Directors note that the
Group’s valuation at 31 December 2013 was similar to the current valuation and consider US$215 million to reasonably
represent fair value.
The Group’s cash cost of investment for SPM is approximately US$123 million. The Group’s first PGM investment was the
acquisition of an interest in the Moepi Group made in August 2008.
Gemfields plc- equity
Nature of investment
The Group holds an equity interest in Gemfields, the world’s largest producer of coloured gemstones. Gemfields
specialises in the production of Zambian emeralds and also produces Zambian amethysts and rubies from Mozambique.
Gemfields is listed on AIM.
The Group owns a see-through interest of approximately 48% in Gemfields at 30 June 2014, valued at US$208 million.
Fair value methodology: Listed share price
The Group’s interest in Gemfields is valued at the 30 June 2014 mid-price of GBP0.4713 per share, translated at the
closing rate of US$1/GBP0.5864.
Other considerations
The Group’s cost of investment is approximately US$119 million and the Group’s initial investment was made in October
2007.
Jupiter Mines Limited- equity
Nature of investment
The Group holds an equity interest in Jupiter. Jupiter is based in Perth, Western Australia and its main asset is a
49.9% interest in the Tshipi manganese joint venture in South Africa.
Fair value methodology: Directors’ estimate
Each of Jupiter’s material assets has been valued separately to determine an appropriate valuation for 100% of Jupiter.
The Directors have estimated that the fair value of Jupiter at 30 June 2014 is US$395 million; the implied valuation of
the Group’s 18.45% interest is US$72.954 million.
Jupiter’s 49.9% interest in Tshipi Borwa has been valued based on an independent valuation report, prepared as at 30
April 2014. The independent valuation report includes a DCF analysis to value Tshipi Borwa and includes a range of
valuations. The DCF analysis is based on a large number of predictions and uncertainties including forecast manganese
prices, costs and exchange rates. Changing any of these assumptions may materially affect the implied valuation. The
valuation is based on the “preferred valuation” contained in the independent valuation report, less an adjustment to
take into account more recent manganese prices.
Jupiter’s other assets have been valued using a range of different valuation methodologies. Tshipi also holds exploration
rights in Tshipi Bokone, another manganese prospect located in the Kalahari Manganese Field. The Directors have used
the “preferred valuation” contained within the independent valuation report, referred to above, to value Tshipi Borwa.
Jupiter has made certain shareholder loans to Tshipi, these have been valued at cost, including accrued interest.
Jupiter’s interest in Mount Mason has been valued based on the exploration expenditure capitalised on Jupiter’s balance
sheet. Jupiter’s interest in Mount Ida has been valued at a discount to the exploration expenditure capitalised on
Jupiter’s balance sheet. Jupiter’s cash has been included at cost.
Jupiter has no material liabilities.
Other considerations
Jupiter’s net assets per its most recent audited balance sheet at 28 February 2014 were US$430 million. After making
certain adjustments (mostly foreign exchange), Jupiter’s net assets at 30 June 2014 were US$450 million. This compares
with the Directors’ valuation of Jupiter of US$395 million which implies that the Directors’ valuation is not materially
misstated.
The Directors note that the valuation of Jupiter is sensitive to various key inputs, in particular the manganese price
for Tshipi Borwa and Tshipi Bokone. The independent valuation report uses recent manganese prices as a proxy for likely
future prices throughout the life of mine. The Directors believe that recent prices represent a reasonable estimate for
the future manganese price throughout the life of mine, but note that any deviation in price will have a material impact
on the valuation. Iron ore prices will have a significant impact on the future valuations of Mount Ida and Mount Mason.
The Group owned an effective 18.45% interest in Jupiter at 30 June 2014. The Group’s cash cost of investment is
approximately US$29 million and the Group’s initial investment into Jupiter was made in May 2008.
4. Realised loss on Gemfields/Faberge Merger
Gemfields completed its merger with Faberge on 28 January 2013. The shareholders of Faberge (including the Group) vended
their equity interests in Faberge in return for 213,999,999 new shares in Gemfields representing approximately 40% of
Gemfields’ fully diluted enlarged share capital; the Group’s 49% interest in Faberge was vended into Gemfields as part
of this element of the transaction. The Group had also made certain loans to Faberge totalling US$50 million (excluding
interest, including structuring fees). The Group exercised its right to convert its US$50 million loan to Faberge into
equity (conditional upon completion of the transaction) and immediately vended these new Faberge shares into Gemfields
in return for new Gemfields shares, also effective 28 January 2013.
In the six months ended 30 June 2013 (and the year ended 31 December 2013), the Group realised a loss for accounting
purposes on completion of the Gemfields/Faberge Merger, as follows:
US$’000
Realised fair value loss on disposal of Faberge equity shares
Fair value of 60,290,905 Gemfields shares receivable 25,503
Fair value of Faberge equity interest at previous reporting date (33,455)
(7,952)
Realised loss on conversion of Faberge loan to Gemfields shares
Fair value of 91,184,694 Gemfields shares receivable 38,572
Previous carrying value of Faberge loan at previous reporting date (50,599)
(12,027)
The Group has owned approximately 48% of the enlarged Gemfields since the completion of the Gemfields/Faberge Merger.
The fair value of the Gemfields shares acquired at 28 January 2013 was US$64.075 million. There are no equivalent
transactions or amounts in the six months ended 30 June 2014.
5. Segmental reporting
The Chief Operating Decision Maker (“CODM”) is Mr Gilbertson, the Chairman, who measures the performance of each
operating segment by assessing the fair value of the Group’s Investment Portfolio on a regular basis.
The Group’s segmental reporting is based around three Investment Platforms, PGMs, Steel Making Materials, and Coloured
Gemstones, each of which is categorised as an operating segment.
The Consolidated Statement of Comprehensive Income segmental information provided to the CODM for the period ended
30 June 2014 is as follows:
Steel Making Coloured
PGMs Materials(1) Gemstones(2) Unallocated Total
US$ 000 US$ 000 US$ 000 US$ 000 US$ 000
(reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
Unrealised fair value gains - 42,697 63,729 - 106,426
Unrealised fair value losses - - - - -
Loan interest income - - 135 - 135
Net segmental income - 42,697 63,864 - 106,561
Other income - -
Net gains on investments and income from operations 106,561
Expenses, net finance income,
share of loss of associates
and taxation (2,943) (2,943)
Net segmental profit/(loss) - 42,697 63,864 (2,943) 103,618
(1) The unrealised fair value gain on the Steel Making Materials segment of US$42.697 million does not include any
foreign exchange as the valuation of Jupiter is denominated in US$.
(2) The unrealised fair value gain on the Coloured Gemstones segment of US$63.729 million includes an unrealised
foreign exchange gain of US$4.653 million.
The Consolidated Statement of Comprehensive Income segmental information provided to the CODM for the period ended
30 June 2013 was as follows:
Steel Making Coloured
PGMs(1) Materials(2) Gemstones(3) Unallocated Total
US$ 000 US$ 000 US$ 000 US$ 000 US$ 000
(reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
Unrealised fair value gains - - - - -
Unrealised fair value losses (8,293) (12,366) (32,049) - (52,708)
Realised fair value loss on
disposal of Faberge equity shares - - (7,952) - (7,952)
Realised loss on conversion of
Faberge loan to Gemfields shares - - (12,027) - (12,027)
Net segmental expense (8,293) (12,366) (52,028) - (72,687)
Other income - -
Net losses on investments and income from operations (72,687)
Expenses, net finance income,
share of loss of associates
and taxation (3,664) (3,664)
Net segmental loss (8,293) (12,366) (52,028) (3,664) (76,351)
(1) The unrealised fair value loss on the PGMs segment of US$8.293 million includes an unrealised foreign exchange loss
of US$26.080 million.
(2) The unrealised fair value loss on the Steel Making Materials segment of US$12.366 million includes an unrealised
foreign exchange loss of US$4.558 million.
(3) The unrealised fair value loss on the Coloured Gemstones segment of US$32.049 million includes an unrealised
foreign exchange loss of US$5.701 million.
The Consolidated Comprehensive Statement of Income segmental information provided to the CODM for the year ended
31 December 2013 was as follows:
Steel Making Coloured
PGMs(1) Materials(2) Gemstones(3) Unallocated Total
US$ 000 US$ 000 US$ 000 US$ 000 US$ 000
(audited) (audited) (audited) (audited) (audited)
Unrealised fair value gains 30,742 - 20,717 - 51,458
Unrealised fair value losses - (10,503) - - (10,503)
Realised fair value loss on
disposal of Faberge equity shares - - (7,952) - (7,952)
Realised loss on conversion of
Faberge loan to Gemfields shares - - (12,027) - (12,027)
Net segmental expense 30,742 (10,503) 737 - 20,976
Other income - -
Net losses on investments and income from operations 20,976
Expenses, net finance income,
share of loss of associates and
taxation (6,287) (6,287)
Net segmental profit/(loss) 30,742 (10,503) 737 (6,287) 14,689
(1) The unrealised fair value gain on the PGMs segment of US$30.742 million does not include any foreign exchange as
the valuation of SPM is denominated in US$.
(2) The unrealised fair value loss on the Steel Making Materials segment of US$10.503 million includes an unrealised
foreign exchange loss of U$5.433 million.
(3) The unrealised fair value gain on the Coloured Gemstones segment of US$20.717 million includes an unrealised
foreign exchange gain of US$4.412 million.
The segmental information provided to the CODM for the reportable segments at 30 June 2014 is as follows:
Steel Making Coloured
PGMs Materials Gemstones Total
US$ 000 US$ 000 US$ 000 US$ 000
30 June 2014 (reviewed) (reviewed) (reviewed) (reviewed)
Investment Portfolio
Listed investments - - 208,090 208,090
Unlisted investments 215,237 72,954 - 288,191
Loans - - 9,935 9,935
Total segmental assets 215,237 72,954 218,025 506,216
Investments in associates,
current assets and liabilities 13,449
Net assets 519,665
The comparative segmental information provided to the CODM for the reportable segments at 30 June 2013 was as follows:
Steel Making Coloured
PGMs Materials Gemstones Total
US$ 000 US$ 000 US$ 000 US$ 000
30 June 2013 (reviewed) (reviewed) (reviewed) (reviewed)
Investment Portfolio
Listed investments - 26,373 91,595 117,968
Unlisted investments 176,202 - - 176,202
Total segmental assets 176,202 26,373 91,595 294,170
Investments in associates,
current assets and liabilities 30,837
Net assets 325,007
The comparative segmental information provided to the CODM for the reportable segments at 31 December 2013 was as
follows:
Steel Making Coloured
PGMs Materials Gemstones Total
US$ 000 US$ 000 US$ 000 US$ 000
31 December 2013 (audited) (audited) (audited) (audited)
Investment Portfolio
Listed investments - 30,257 144,361 174,618
Unlisted investments 215,237 - - 215,237
Total segmental assets 215,237 30,257 144,361 389,855
Investments in associates,
current assets and liabilities 26,192
Net assets 416,047
6. Net cash used in operating activities
1 January 2014 to 1 January 2013 to 1 January 2013 to
30 June 2014 30 June 2013 31 December 2013
US$ 000 US$ 000 US$ 000
Notes (reviewed) (reviewed) (audited)
Net profit/(loss) after tax 103,618 (76,351) 14,689
Adjustments for:
Unrealised fair value gains 3 (106,426) - (51,458)
Unrealised fair value losses 3 - 52,708 10,503
Realised fair value loss on disposal of
Faberge equity 4 - 7,952 7,952
Realised loss on conversion of Faberge
loan to Gemfields shares 4 - 12,027 12,027
Unrealised fair value loss on Other investments 29 29 30
Tax expense - - 4
Accrued interest (135) - -
Foreign exchange gain on cash balances - - (24)
Foreign exchange loss on cash balances - 26 -
Share in (profit)/loss of associates (7) 474 224
Additions to investments 3 - (632) (2,654)
Loans extended to investments 3 (9,800) - -
Operating cash flows before movements in working capital (12,721) (3,767) (8,707)
(Increase)/decrease in trade and other receivables (363) (135) 228
Increase/(decrease) in trade and other payables 111 (97) 19
Cash used in operations (12,973) (3,999) (8,460)
Tax paid - - (4)
Net cash used in operating activities (12,973) (3,999) (8,464)
7. Related party transactions
The Group’s subsidiaries, joint ventures and associates are related parties. Investments within the Group’s Investment
Portfolio are also usually related parties; the Investment Portfolio consists of investments held at fair value and loans
to portfolio companies. Related party transactions within the Investment Portfolio include acquiring and disposing of
equity investments and loan transactions. The relevant related party transactions in the current and comparative periods
are detailed in Note 3 Investments.
Certain individuals act as both Directors of the Company and as directors of the Group’s investments. Mr Gilbertson is
the Chairman of SPM and Jupiter, and Mr Frandsen is a director of Sedibelo Platinum Mines.
The Investment Manager is a related party to the Group. Certain amounts are payable by the Group to the Investment
Manager as disclosed in the most recent Annual Report. The Investment Manager acts through its general partner,
Pallinghurst (Cayman) GP Limited. The directors of Pallinghurst (Cayman) GP Limited are Mr Gilbertson, Mr Frandsen,
Mr Willis, Mr Harris and Mr Tolcher.
Legis acts as the Group’s administrator, company secretary and registrar. Mr Platt-Ransom, Mr O’Mahoney and Ms White
are directors of Legis and/or certain entities within the Legis group. The Group’s relationship with Legis is at arm’s
length.
The table below sets out the amounts paid by the Company to the Non-Executive Directors for services during 2014, as
determined by the Remuneration Committee.
Directorship Directorship Lead
of the of other Group Audit Independent
Company companies Committee Director Total
US$ US$ US$ US$ US$
1 January 2014 to (reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
30 June 2014
Stuart Platt-Ransom 15,000 - 1,500 1,000 17,500
Clive Harris 15,000 2,500 1,500 - 19,000
Martin Tolcher 15,000 - 2,500 - 17,500
Dr Christo Wiese 15,000 - - - 15,000
Total 60,000 2,500 5,500 1,000 69,000
Directorship Directorship Lead
of the of other Group Audit Independent
Company companies Committee Director Total
US$ US$ US$ US$ US$
1 January 2013 to (reviewed) (reviewed) (reviewed) (reviewed) (reviewed)
30 June 2013
Stuart Platt-Ransom 12,500 - 1,500 1,000 15,000
Clive Harris 12,500 2,500 1,500 - 16,500
Martin Tolcher 12,500 - 2,500 - 15,000
Dr Christo Wiese (1) 9,692 - - - 9,692
Patricia White (2) 5,139 - - - 5,139
Total 52,331 2,500 5,500 1,000 61,331
(1) Relates to the period 11 February 2013 – 30 June 2013.
(2) Relates to the period 1 January 2013 – 15 March 2013.
Directorship Directorship Lead
of the of other Group Audit Independent
Company companies Committee Director Total
US$ US$ US$ US$ US$
1 January 2013 to (audited) (audited) (audited) (audited) (audited)
31 December 2013
Stuart Platt-Ransom 25,000 - 3,000 2,000 30,000
Clive Harris 25,000 5,000 3,000 - 33,000
Martin Tolcher 25,000 - 5,000 - 30,000
Dr Christo Wiese (1) 22,192 - - - 22,192
Patricia White (2) 5,139 - - - 5,139
Total 102,331 5,000 11,000 2,000 120,331
(1) Relates to the period 11 February 2013 – 31 December 2013.
(2) Relates to the period 1 January 2013 – 15 March 2013.
8. Net Asset Value, Earnings/(Loss) Per Share and Headline Earnings/(Loss) Per Share
NAV per share
The Group’s US$ NAV per share is as follows:
30 June 2014 30 June 2013 31 December 2013
US$ US$ US$
(reviewed) (reviewed) (audited)
Net assets 519,664,822 325,006,514 416,046,887
Number of shares 760,452,631 760,452,631 760,452,6311
NAV per share 0.68 0.43 0.55
Headline Earnings/(Loss) Per Share
There are no reconciling items between Headline Earnings/(Loss) Per Share (“HEPS” or “HLPS”) and Earnings/ (Loss) Per Share
(“EPS” or “LPS”). There are no dilutive items to EPS/(LPS), which is equivalent to Diluted Earnings/(Loss) Per Share.
The Group’s Headline Earnings/(Loss) Per Share is as follows:
30 June 2014 30 June 2013 31 December 2013
US$ US$ US$
(reviewed) (reviewed) (audited)
Loss for the period/year 103,617,933 (76,351,398) 14,688,975
Weighted average number of shares in issuw 760,452,631 760,452,631 760,452,631
Headline Earnings /(Loss) Per Share 0.14 (0.10) 0.02
9. Financial instruments
The Group’s only financial liabilities at 30 June 2014 were US$0.289 million of trade and other payables. These
liabilities are all current liabilities and their fair values approximate to their carrying amounts. Set out below is an
overview of financial assets, other than cash and short-term deposits, held by the Group as at 30 June 2014:
30 June 2014 Loans and Fair value -
Receivables profit or loss
US$ 000 US$ 000
(reviewed) (reviewed)
Financial assets
Trade and other receivables 1,515 -
Loans and receivables
Loans extended to investments 9,935 -
Investments at FVTPL
Quoted equity investments - 208,090
Unquoted equity investments - 288,191
Other investments - 29
Total 11,450 496,310
Total current 11,450 29
Total non-current - 496,281
The Group’s only financial liabilities at 30 June 2013 were US$0.062 million of trade and other payables, all of which
were current liabilities. Set out below is an overview of financial assets, other than cash and short-term deposits,
held by the Group as at 30 June 2013:
30 June 2013 Loans and Fair value -
Receivables profit or loss
US$ 000 US$ 000
(reviewed) (reviewed)
Financial assets
Trade and other receivables 1,515 -
Loans and receivables
Loans extended to investments - -
Investments at FVTPL
Quoted equity investments - 117,968
Unquoted equity investments - 176,202
Other investments - 59
Total 1,515 294,229
Total current 1,515 59
Total non-current - 294,170
The Group’s only financial liabilities at 31 December 2013 were US$0.178 million of trade and other payables, all of
which were current liabilities. Set out below is an overview of financial assets, other than cash and short-term
deposits, held by the Group as at 31 December 2013:
31 December 2013 Loans and Fair value -
Receivables profit or loss
US$ 000 US$ 000
(audited) (audited)
Financial assets
Trade and other receivables 1,152 -
Loans and receivables
Loans extended to investments - -
Investments at FVTPL
Quoted equity investments - 174,618
Unquoted equity investments - 215,237
Other investments - 58
Total 1,152 389,913
Total current 1,152 58
Total non-current - 389,855
The Group owns certain financial instruments that are measured at fair value subsequent to initial recognition. The
equity investments held within the Investment Portfolio fall into this category. The Group also extends loans to
investments within the Investment Portfolio on occasion, which are categorised as Loans and receivables. The Group also
owns certain other equity investments which do not form part of the Investment Portfolio, held within Other investments
on the balance sheet.
The following table provides an analysis of the Group’s equity investments, grouped into Levels 1 to 3 based on the
degree to which fair value measurements are observable:
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets
or liabilities.
Level 2 fair value measurements are those derived from inputs (other than quoted prices included within Level 1) that
are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or
liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 Total
US$ 000 US$ 000 US$ 000 US$ 000
30 June 2014 (reviewed) (reviewed) (reviewed) (reviewed)
Financial assets at FVTPL
Equity investments 208,090 - 288,191 496,281
Other investments 29 - - 29
208,119 - 288,191 496,310
Level 1 Level 2 Level 3 Total
US$ 000 US$ 000 US$ 000 US$ 000
30 June 2013 (reviewed) (reviewed) (reviewed) (reviewed)
Financial assets at FVTPL
Equity investments 117,968 - 172,202 294,170
Other investments 59 - - 59
118,027 - 176,202 294,229
Level 1 Level 2 Level 3 Total
US$ 000 US$ 000 US$ 000 US$ 000
31 December 2013 (audited) (audited) (audited) (audited)
(restated) (restated) (restated) (restated)
Financial assets at FVTPL
Equity investments 174,618 - 215,237 389,855
Other investments 58 - - 58
174,676 - 215,237 389,913
At 31 December 2013, certain Other investments were omitted from the Level 1 balance and the total in error; these
assets have now been included within the balance as disclosed above.
Reconciliation of recurring fair value measurements categorised within Level 3 of the fair value hierarchy:
Unquoted equity investments US$ 000
As at 1 January 2013 (audited) 217,951
Realised fair value loss on disposal of Faberge equity (7,952)
Unrealised fair value gains 30,742
Unrealised fair value losses -
Additions -
Disposals (25,503)
As at 31 December 2013 (audited) 215,237
Jupiter reclassification upon delisting 30,257
Unrealised fair value gains 42,697
Unrealised fair value losses -
As at 30 June 2014 (reviewed) 288,191
The investment in Jupiter has been reclassified from a Level 1 to a Level 3 investment, effective 10 January 2014, the
date of delisting.
Jupiter’s valuation is based on a number of different valuation methodologies, with each of Jupiter’s material assets
valued separately. Some of these valuation methodologies would be relevant to Level 1 assets, however, the investment in
Jupiter has been categorised as Level 3 as the most significant input to the valuation is a Level 3 input.
10. Contingent liabilities and contingent assets
The Group has acted as a limited guarantor for the lease of Faberge’s New York retail outlet at 694 Madison Avenue since
31 August 2011. One of the conditions of the Gemfields/Faberge Merger, which completed 28 January 2013, was that
Gemfields either take over as guarantor from the Company, or that Gemfields indemnify the Group against any potential
liability to the landlord. Gemfields have provided an indemnity to the Group against any loss from this guarantee. The
Directors’ assessment is that the maximum amount of the contingent liability continues to be US$0.2 million, although
any such loss should be recoverable from Gemfields under the terms of the indemnity.
The Group had no other significant contingent liabilities or contingent assets at 30 June 2014, 30 June 2013 or 31
December 2013.
11. Commitments
The Group committed to loan Gemfields up to US$15 million on 16 April 2014. The commitment can be drawn upon by
Gemfields between 17 April 2014 and 30 November 2014. Gemfields had drawn down US$10 million by 30 June 2014. The
Group’s outstanding commitment is US$4.9 million (excluding an arrangement fee of US$0.1 million). The terms of the loan
agreement are that any amounts drawn down including interest are due for repayment by 30 April 2015.
No further commitments have been entered into at the date of signature of these Interim Financial Statements.
12. Events occurring after the end of the period
Interim Review Report
The Interim Report has been reviewed by the Group’s auditor, Saffery Champness, who have provided a report to the
Company (the “Independent Review Report”). The Independent Review Report confirms that nothing has come to the auditor’s
attention that might cause them to believe that the Interim Report was not prepared, in all material respects, in
accordance with IAS34, the SAICA Reporting Guides and the FRSC Pronouncements. The Independent Review Report does not
necessarily report on all of the information contained in this Interim Report. Any reference to future financial
information included in the Interim Report has not been reviewed or reported on by the auditors. Shareholders are
advised that in order to obtain a full understanding of the nature of the auditors’ engagement they should obtain a
copy of the Independent Review Report together with the accompanying financial information. The Independent Review Report
is available from the Company’s registered office.
Directors
Brian Gilbertson
Arne H. Frandsen
Andrew Willis (1)
Dr Christo Wiese
Stuart Platt-Ransom (2)
Martin Tolcher
Clive Harris
Chris Powell (1)
Brian O’Mahoney (2)
(1) Mr Powell acts as Permanent Alternate to Mr Willis.
(2) Mr O’Mahoney acts as Permanent Alternate to Mr Platt-Ransom.
Investment Manager Administrator, Company Secretary and Registrar
Pallinghurst (Cayman) GP L.P. Legis Fund Services Limited
190 Elgin Avenue 11 New Street
George Town St Peter Port
Grand Cayman Guernsey
KY1-9005 GY1 2PF
Cayman Islands Channel Islands
Investment Advisor (London) Registered Office
Pallinghurst Advisors LLP 11 New Street
54 Jermyn Street St Peter Port
London Guernsey
SW1Y 6LX GY1 2PF
United Kingdom Channel Islands
Legal Advisor (Guernsey) Investment Advisor (South Africa)
Mourant Ozannes Pallinghurst Advisors (Pty) Limited
1 Le Marchant Street PO Box 12160
St Peter Port Die Boord
Guernsey Western Cape, 7613
GY1 4HP South Africa
Channel Islands
Legal Advisor (Bermuda) Legal Advisor (South Africa)
Appleby Global Edward Nathan Sonnenbergs Inc
Canon’s Court 150 West Street
22 Victoria Street Sandton, 2196
Hamilton HM12 South Africa
Bermuda
Investment Bank and JSE Sponsor BSX Sponsor
Investec Bank Limited Clarien Investments Limited
100 Grayston Drive 25 Reid Street, 4th Floor
Sandton, 2196 Hamilton HM11
South Africa Bermuda
South African Transfer Secretary Auditor
Computershare Investor Services Saffery Champness Chartered Accountants
(Proprietary) Limited PO Box 141
Ground Floor St Sampson
70 Marshall Street Guernsey
Johannesburg, 2001 GY1 3HS
South Africa Channel Islands
Date: 22/09/2014 11:30:00 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.
Sharenet Sites 
