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TRANS HEX GROUP LIMITED - Interim financial statements for the six months ended 30 September 2014 and special dividend declaration

Release Date: 03/11/2014 07:30
Code(s): TSX     PDF:  
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Interim financial statements for the six months ended 30 September 2014 and special dividend declaration

TRANS HEX GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1963/007579/06
Share code: TSX
ISIN: ZAE000018552
("Trans Hex" or the "Group")

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
AND SPECIAL DIVIDEND DECLARATION

FINANCIAL HEADLINES

- Sales revenue increased by 59,4% to R414,1 million (September 2013: R259,7 million).
- Group profit after tax from continuing operations amounted to R25,2 million 
  (September 2013: loss of R69,0 million).
- Profit after tax from discontinued operations totalled R10,6 million (September 2013: R15,2 million).
- Group net profit for the period amounted to R35,8 million (September 2013: loss of R53,9 million).
- The Group's net cash position at the end of the period increased by R56,5 million to R351,1 million 
  (September 2013: R294,6 million).
- Earnings per share amounted to 34,1 cents (September 2013: loss per share of 51,0 cents) and headline 
  earnings per share amounted to 34,1 cents (September 2013: headline loss per share of 51,0 cents).
- Net asset value per share increased by 91,0 cents to 541,0 cents (September 2013: 450,0 cents).
- In Angola, Somiluana total sales increased to US$21,3 million (September 2013: US$16,9 million).


CONDENSED CONSOLIDATED INCOME STATEMENT
                                                        30/09/14            30/09/13            31/03/14
                                       Notes           Unaudited           Unaudited             Audited
                                                           R'000               R'000               R'000
Continuing operations
Sales revenue                                            414 064             259 747             695 730 
Cost of goods sold                                      (337 711)           (320 285)           (653 736)
Gross profit/(loss)                                       76 353             (60 538)             41 994 
Royalties                                                 (8 343)             (3 069)             (4 629)
Selling and administration costs                         (43 649)            (37 787)            (71 620)
Mining profit/(loss)                                      24 361            (101 394)            (34 255)
Exploration costs                                         (2 943)             (2 104)             (3 762)
Other gains - net                          1               9 071               6 795              21 407 
Finance income                                            11 310               8 040              15 378 
Finance costs                                             (2 978)             (3 612)             (4 995)
Profit/(loss) before income tax                           38 821             (92 275)             (6 227)
Income tax                                               (13 626)             23 232               1 112 
Profit/(loss) for the period from 
continuing operations                                     25 195             (69 043)             (5 115)

Discontinued operations
Profit for the period from 
discontinued operations                    2              10 642              15 186              27 854 
Profit/(loss) for the period                              35 837             (53 857)             22 739 

Attributable to:
Continuing operations                                     25 195             (69 043)             (5 115)
 - Owners of the parent                                   25 370             (69 090)             (5 991)
 - Non-controlling interest                                 (175)                 47                 876 
Discontinued operations 
 - Owners of the parent                                   10 642              15 186              27 854 
                                                          35 837             (53 857)             22 739 

Earnings per share - basic and diluted 
(cents)
 - Continuing operations                                    24,0               (65,4)               (5,7)
 - Discontinued operations                                  10,1                14,4                26,4 
Total                                                       34,1               (51,0)               20,7 

Shares in issue adjusted for 
treasury shares ('000)                                   105 699             105 699             105 699 

Headline earnings                          3
 - Continuing operations                                  25 370             (69 138)            (17 459)
 - Discontinued operations                                10 642              15 186              27 854 
Total                                                     36 012             (53 952)             10 395 
 
Headline earnings per share (cents)
 - Continuing operations                                    24,0               (65,4)              (16,6)
 - Discontinued operations                                  10,1                14,4                26,4 
Total                                                       34,1               (51,0)                9,8 
 
Average US$ exchange rate                                  10,60                9,69               10,20 


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                        30/09/14            30/09/13            31/03/14
                                                       Unaudited           Unaudited             Audited
                                                           R'000               R'000               R'000
Profit/(loss) for the period                              35 837             (53 857)             22 739 

Other comprehensive income net of tax:

Items that will not be reclassified 
to profit or loss

Remeasurements of post-employment benefit obligations          -                   -               2 061 
 - Before-tax amount                                           -                   -               2 863 
 - Tax (expense)/benefit                                       -                   -                (802)

Items that may be subsequently reclassified 
to profit or loss

Translation differences on foreign subsidiaries 
before and after tax                                      (9 469)             (4 871)             (8 560)

Fair value adjustment on available-for-sale financial 
assets before and after tax                                    -                 (37)                  - 

Reclassification of fair value adjustment on 
available-for-sale financial assets on disposal 
before and after tax                                           -                   -                 (37)

Reclassification of foreign currency differences 
on repayment of long-term receivables from 
foreign operations                                        (4 542)                  -                   -

Total comprehensive income for the period                 21 826             (58 765)             16 203 

Attributable to:
 - Owners of the parent                                   22 001             (58 812)             15 327 
 - Non-controlling interest                                 (175)                 47                 876 
                                                          21 826             (58 765)             16 203 


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                        30/09/14            30/09/13            31/03/14
                                                       Unaudited           Unaudited             Audited
                                                                            Restated
                                                           R'000               R'000               R'000
Assets
Non-current assets                                       370 868             432 380             391 393 
Property, plant and equipment                            253 480             319 984             279 000 
Investment in associates                                  61 509              60 877              59 580 
Investments held by environmental trust                   55 879              51 519              52 813 
Current assets                                           607 295             437 404             560 378 
Inventories                                              213 360             121 774             137 305 
Trade and other receivables                               42 860              21 020              21 670 
Current income tax                                             -                  58               3 853 
Cash and cash equivalents                                351 075             294 552             397 550 
Total assets                                             978 163             869 784             951 771 

Equity and liabilities
Capital and reserves                                     571 232             475 092             549 231 
Non-controlling interest                                     825                 171               1 000 
Non-current liabilities                                  142 011             133 493             148 488 
Borrowings                                                     -                 438                   - 
Deferred income tax liabilities                           35 918              30 325              46 138 
Provisions                                               106 093             102 730             102 350 
Current liabilities                                      264 095             261 028             253 052 
Trade and other payables                                 133 879             120 845             126 263 
Interest in joint ventures                               122 043             130 421             125 188 
Current income tax liabilities                             7 735                   -                 320 
Borrowings                                                   438               9 762               1 281 
Total equity and liabilities                             978 163             869 784             951 771
 
Net asset value per share (cents)                            541                 450                 521 


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                        30/09/14            30/09/13            31/03/14
                                                       Unaudited           Unaudited             Audited
                                                           R'000               R'000               R'000
Balance at 1 April                                       550 231             534 028             534 028 
Total comprehensive income for the period                 21 826             (58 765)             16 203 
Balance at end of period                                 572 057             475 263             550 231 

 
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                                                        30/09/14            30/09/13            31/03/14
                                                       Unaudited           Unaudited             Audited
                                                           R'000               R'000               R'000

Cash generated from/(utilised in) operations              77 630             (36 591)             72 302 
Movements in working capital                             (89 630)            (15 568)            (11 404)
Income tax paid                                          (12 576)             (2 666)            (13 252)
Net cash (utilised in)/generated from 
operating activities                                     (24 576)            (54 825)             47 646 
Cash employed                                            (21 899)            (34 019)            (33 472)
Property, plant and equipment
 - Proceeds from disposal                                      -                  80              25 298 
 - Replacement                                           (14 950)            (15 940)            (31 638)
 - Additional                                             (6 106)             (8 725)            (11 634)
Investments and loans                                          -               7 584              10 283 
Borrowings repaid                                           (843)            (17 018)            (25 781) 

Net (decrease)/increase in cash and cash equivalents     (46 475)            (88 844)             14 174 
Cash and cash equivalents at beginning of period         397 550             383 396             383 376 
Cash and cash equivalents at end of period               351 075             294 552             397 550 

 
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

                                                        30/09/14            30/09/13            31/03/14
                                                       Unaudited           Unaudited             Audited
                                                           R'000               R'000               R'000

1.  Other gains - net

    Other gains - net consists of the 
    following categories:
     - Net foreign exchange gains                          4 529               6 729               9 846 
     - Profit on sale of assets and investments                -                  66              11 561 
     - Foreign exchange gains on repayment of
       long-term receivables from foreign operation        4 542                   -                   - 
                                                           9 071               6 795              21 407 

2.  Discontinued operations

    On 5 October 2011, the Angolan Ministry of Geology, 
    Mines and Industry revoked the mining rights of the 
    Luarica and Fucauma joint ventures as no mining 
    activities had been performed at the sites for a 
    period of three years as a result of the projects 
    being placed under care and maintenance.

    The prescription of unclaimed debts of R10,6 million 
    (31/3/2014: R27,9 million; 30/9/2013: R15,2 million) 
    is included below.

    Share of income from joint ventures                   10 642              15 186              27 854 
    Profit before income tax                              10 642              15 186              27 854 
    Taxation                                                   -                   -                   - 
    Profit for the period                                 10 642              15 186              27 854 

3.  Reconciliation of headline earnings

    Continuing operations
    Profit/(loss) for the period                          25 370             (69 090)             (5 991)
     - Profit on sale of assets                                -                 (66)            (11 561)
     - Taxation impact                                         -                  18                  93 
    Headline earnings/(loss)                              25 370             (69 138)            (17 459)

    Discontinued operations 
    Profit for the period                                 10 642              15 186              27 854 
    Headline earnings                                     10 642              15 186              27 854 

4.  Capital commitments
    (including amounts authorised, but not 
    yet contracted)                                       38 640              46 524              62 655 
    These commitments will be financed from the 
    Group's own resources or with borrowed funds.

5.  Segment information

    Operating segments

                                                                            CONTINUING                          DISCONTINUED
    Six months ended 30 September 2014              South Africa              Angola               Total              Angola
    Carats sold                                           25 073                   -              25 073                   - 
                                                           R'000               R'000               R'000               R'000 
    Revenue                                              414 064                   -             414 064                   - 
    Cost of goods sold                                  (337 711)                  -            (337 711)                  - 
    Gross profit                                          76 353                   -              76 353                   - 
    Royalties                                             (8 343)                  -              (8 343)                  - 
    Selling and administration costs                     (38 888)             (4 761)            (43 649)                  - 
    Mining profit/(loss)                                  29 122              (4 761)             24 361                   - 
    Exploration costs                                     (2 943)                  -              (2 943)                  - 
    Other gains - net                                      9 970                (899)              9 071                   - 
    Profit for the period from discontinued
    operations                                                 -                   -                   -              10 642
    Finance income                                        11 310                   -              11 310                   - 
    Finance costs                                         (2 978)                  -              (2 978)                  - 
    Profit/(loss) before income tax                       44 481              (5 660)             38 821              10 642

    Depreciation included in the above                   (46 594)                (16)            (46 610)                  - 
    Net assets/(liabilities)                             627 590              66 510             694 100            (122 043)
    Capital expenditure                                   21 056                   -              21 056                   - 
    Net asset value per share (cents)                        593                  63                 656                (115)
 
                                                                            CONTINUING                          DISCONTINUED
    Six months ended 30 September 2013              South Africa              Angola               Total              Angola
    Carats sold                                           26 076                   -              26 076                   - 
                                                           R'000               R'000               R'000               R'000 
    Revenue                                              259 747                   -             259 747                   -  
    Cost of goods sold                                  (320 285)                  -            (320 285)                  -
    Gross loss                                           (60 538)                  -             (60 538)                  -
    Royalties                                             (3 069)                  -              (3 069)                  -
    Selling and administration costs                     (34 150)             (3 637)            (37 787)                  -
    Mining loss                                          (97 757)             (3 637)           (101 394)                  -
    Exploration costs                                     (2 104)                  -              (2 104)                  -
    Other gains - net                                      6 795                   -               6 795                   -
    Profit for the period from discontinued 
    operations                                                 -                   -                   -              15 186
    Finance income                                         8 040                   -               8 040                   -
    Finance costs                                         (3 612)                  -              (3 612)                  -
    (Loss)/profit before income tax                      (88 638)             (3 637)            (92 275)             15 186

    Depreciation included in the above                   (44 096)               (220)            (44 316)                  -
    Net assets/(liabilities)                             533 307              73 656             606 963            (131 700)
    Capital expenditure                                   24 665                   -              24 665                   -
    Net asset value per share (cents)                        505                  70                 574                (125)
 
                                                                            CONTINUING                          DISCONTINUED
    Twelve months ended 31 March 2014               South Africa              Angola               Total              Angola
    Carats sold                                           55 083                   -              55 083                   - 
                                                           R'000               R'000               R'000               R'000 
    Revenue                                              695 730                   -             695 730                   - 
    Cost of goods sold                                  (653 736)                  -            (653 736)                  - 
    Gross profit                                          41 994                   -              41 994                   - 
    Royalties                                             (4 629)                  -              (4 629)                  - 
    Selling and administration costs                     (63 059)             (8 561)            (71 620)                  - 
    Mining loss                                          (25 694)             (8 561)            (34 255)                  - 
    Exploration costs                                     (3 762)                  -              (3 762)                  - 
    Other gains - net                                     10 176              11 231              21 407                   - 
    Profit for the period from discontinued 
    operations                                                 -                   -                   -              27 854
    Finance income                                        15 378                   -              15 378                   - 
    Finance costs                                         (4 995)                  -              (4 995)                  - 
    (Loss)/profit before income tax                       (8 897)              2 670              (6 227)             27 854

    Depreciation included in the above                   (90 379)               (334)            (90 713)                  - 
    Net assets/(liabilities)                             588 500              86 919             675 419            (125 188)
    Capital expenditure                                   43 261                  11              43 272                   - 
    Net asset value per share (cents)                        562                  77                 639                (118)

    Revenue from transactions with certain customers can amount to 10% or more of total revenue. During the period under review, 
    such individual customers were responsible for aggregate sales of R51,8 million (31/03/2014: R0,0 million; 
    30/09/2013: R68,7 million).

6.  Change in accounting policy and reclassifications

    The following table summarises the Group's retroactive restatements to its consolidated financial statements resulting from 
    the adoption of IFRS 11, "Joint Arrangements", and the change in methods of presentation of certain financial assets, 
    including the impact of reclassification.

    In the 2014 financial year, the Group decided to reclassify financial assets that were previously reported as 
    available-for-sale investments, investments in associates and investments in environmental rehabilitation trusts on the 
    face of the statement of financial position.

    There was no impact on the income statements and the statements of comprehensive income as a result of the reclassifications 
    and the change in accounting policy.

    The impacts on the consolidated statement of financial position are as follows, as at:

    30 September 2013

                                                                                   CONSOLIDATED
                                                                               Joint                                    2013
                                                     As reported        arrangements   Reclassifications            Restated
                                                           R'000               R'000               R'000               R'000
    Assets
    Non-current assets                                   432 380                   -                   -             432 380
    Property, plant and equipment                        319 984                   -                   -             319 984
    Investment in associates                                   -                   -              60 877              60 877
    Investments held by environmental trust                    -                   -              51 519              51 519
    Financial assets                                     112 396                   -            (112 396)                  - 
    Current assets                                       437 426                 (22)                  -             437 404
    Inventories                                          121 774                   -                   -             121 774
    Trade and other receivables                           21 020                   -                   -              21 020
    Current income tax                                        58                   -                   -                  58
    Cash and cash equivalents                            294 574                 (22)                  -             294 552
    Total assets                                         869 806                 (22)                  -             869 784

    Equity and liabilities
    Capital and reserves                                 475 092                   -                   -             475 092
    Non-controlling interest                                 171                   -                   -                 171
    Non-current liabilities                              133 493                   -                   -             133 493
    Borrowings                                               438                   -                   -                 438
    Deferred income tax liabilities                       30 325                   -                   -              30 325
    Provisions                                           102 730                   -                   -             102 730
    Current liabilities                                  261 050                 (22)                  -             261 028
    Trade and other payables                             206 176             (85 331)                  -             120 845
    Interest in joint ventures                                 -             130 421                   -             130 421
    Current income tax liabilities                             -                   -                   -                   -  
    Borrowings                                            54 874             (45 112)                  -               9 762
    Total equity and liabilities                         869 806                 (22)                  -             869 784

7.  Mineral resources and mineral reserves

    No adjustments have been made to the statement of mineral resources and mineral reserves as contained in the 2014 Integrated 
    Annual Report. Annual reconciliation of production data will take place and an updated resource and reserve statement will be 
    published in the 2015 Integrated Annual Report.

8.  Contingent liabilities

    There have been no material changes to contingent liabilities previously reported in the Integrated Annual Report.

9.  Accounting policies

    The condensed consolidated interim financial statements are prepared in accordance with International Financial Reporting 
    Standard (IAS) 34, "Interim Financial Reporting"; the SAICA Financial Reporting Guides as issued by the Accounting Practices 
    Committee; Financial Pronouncements as issued by the Financial Reporting Standards Council; and the requirements of the 
    Companies Act of South Africa. The accounting policies applied in the preparation of these interim financial statements are in 
    terms of International Financial Reporting Standards and are consistent with those applied in the previous consolidated annual 
    financial statements.

10. Impact of change in accounting policy

    IFRS 11 focuses on the rights and obligations of a joint arrangement rather than its legal form as was the case under IAS 31. 
    IFRS 11 classifies joint arrangements into two types: joint ventures and joint operations. Joint ventures are arrangements 
    whereby the parties have rights to net assets, while joint operations are arrangements whereby the parties have rights to 
    the assets and obligations for the liabilities. The standard eliminates choices in the reporting of joint arrangements by 
    requiring the use of the equity method to account for interests in joint ventures, and by requiring joint operators to 
    recognise assets and liabilities in relation to their interests in the arrangements. The change has been accounted for 
    retroactively in accordance with the transition rules of IFRS 11.

    A part of the Group's investments in joint arrangements qualifies as joint ventures and is now accounted for using the equity 
    method of accounting. These investments were previously accounted for using the proportionate consolidation method. Under the 
    equity method of accounting, the Group's share of net assets, net income and other comprehensive income of joint ventures are 
    presented as one-line items on the consolidated statement of financial position, the consolidated statement of income and the 
    consolidated statement of comprehensive income respectively. In addition, the consolidated statement of cash flows under the 
    equity method of accounting includes the cash flows between the Group and its joint ventures and not the Group's proportionate 
    share of the joint ventures' cash flows. The impact of the change in accounting policy is contained in Note 6.

11. Preparation of financial statements

    The preparation of the unaudited condensed consolidated interim financial statements was supervised by the Financial Director, 
    IP Hestermann CA(SA).


OVERVIEW

In this commentary, results are compared with the first six months of the 2014 financial year (in brackets).

Sales revenue from the South African operations increased by 59,4% in Rand terms from R259,7 million in September 2013 to 
R414,1 million in September 2014 as a result of a 51,4% increase in average prices, partly offset by a 1,6% decrease in carats 
sold. Revenue was also positively affected by a 13,8% weakening in the Rand. The average price increased from US$1 028 per carat 
(September 2013) to US$1 557 per carat due to an increase in average stone size. 

South African production increased by 48,5% to 32 450 carats (September 2013: 21 849 carats). Average grade at the Lower Orange 
River operations ("LOR") increased by 67,9% to 1,31 carats/100 m3 (September 2013: 0,78 carats/100 m3) due to mining of more 
favourable scour areas at both Baken and Bloeddrift mines. The increase was partly offset by a 12,4% decrease in volumes treated.

In South Africa, the cost of goods sold increased by 5,4% to R337,7 million (September 2013: R320,3 million), mainly due to an 
increase in contractors' fees, in particular R64,5 million in respect of Remhoogte, as well as maintenance and other inflationary 
increases, offset by a positive stock movement of R88,4 million. The LOR unit cost of production increased by 29,0% as a result 
of the 12,4% drop in volume and an increase in operating costs.

Gross profit for the South African operations amounted to R76,3 million (September 2013: loss of R60,5 million). 

The South African operations achieved a profit before tax of R44,5 million (September 2013: loss of R88,6 million).

In Angola, production at Somiluana Mine, in which Trans Hex holds a 33% stake, increased to 44 400 carats (September 2013: 
35 779 carats) due to a 40,1% increase in grade, partly offset by a decrease of 11,4% in volumes treated. Total sales increased 
to US$21,3 million at an average price of US$513 per carat (September 2013: sales of US$16,9 million at an average price of 
US$484 per carat). Somiluana's operating margin was 37% (September 2013: 35%) and the Mine generated net profit of US$7,9 million 
(September 2013: US$5,9 million). No repayments were made to Trans Hex against the outstanding investment amount and the cash 
generated was retained to develop the Mine. 

The investment in Somiluana is accounted for as an investment in an associate under the equity method. As the investment's 
liabilities exceed its assets, no equity accounted profit or loss was accounted for. 

The Group reports an after-tax profit for the period from continuing operations of R25,2 million 
(September 2013: loss of R69,0 million). 

Profit from the discontinued Luarica and Fucauma operations amounted to R10,6 million (September 2013: R15,2 million).

The Group therefore reports a profit for the period of R35,8 million (September 2013: loss of R53,9 million).

Cash and cash equivalents at the end of the reporting period increased by R56,5 million to R351,1 million 
(September 2013: R294,6 million).

 
OPERATING PERFORMANCE

Detailed project information

                            Six months ended 30 September 2014              Six months ended 30 September 2013
                                                           Average                                         Average
                                                         price per                                       price per
Detailed project       Average                 Average       carat     Average                 Average       carat 
information          grade per      Carats  carats per    achieved   grade per      Carats  carats per    achieved
(unaudited)             100 m3    produced       stone       (US$)      100 m3    produced       stone       (US$)

South Africa
 - Baken                  1,42      22 731        1,35       1 379        0,79      14 157        1,17       1 100
 - Richtersveld 
   Operations             0,89       3 533        2,48       2 125        0,72       3 626        1,85       1 778
 - Remhoogte                 -       2 900        3,35       3 643           -           -           -           -
 - Shallow water             -       3 286        0,30         457           -       4 066        0,29         377

Total South Africa        1,31      32 450        1,08       1 557        0,78      21 849        0,78       1 028

Angola
 - Somiluana             29,94      44 400        0,53         513       21,37      35 779        0,56         484

Note: Average grade in South Africa is calculated excluding Remhoogte and shallow water production.

South Africa 

Stripping of overburden in the main channel at Baken continued during the first six months of the financial year with encouraging 
results, including increases in the average grade to 1,42 carats/100 m3 (September 2013: 0,79 carats/100 m3), the average stone 
size to 1,35 carats (September 2013: 1,17 carats) and the average price of Baken stones to US$1 379 (September 2013: US$1 100). 

The Richtersveld Operations were positively affected by an increase in average grade and stone size at Bloeddrift Mine. 
 
Angola

Mining activities during the period continued to focus on the east bank of the Luana River where the grades and diamond values 
continue to exceed resource estimations. 


OUTLOOK 

Namaqualand

The transaction between Emerald Panther Investments 78 (Pty) Ltd and De Beers Consolidated Mines Proprietary Limited involving the 
acquisition of assets and liabilities relating to Namaqualand Mines, has been concluded. The acquisition's effective date was 
28 October 2014, as announced on SENS on 29 October 2014. 

Operations at the Namaqualand project will commence with the construction of a final recovery plant at Kleinzee which is expected 
to be operational by early January 2015. At Mitchell's Bay, drilling, bulk sampling and the construction of a production plant is 
planned for the first quarter of the 2015 calendar year.

Lower Orange River

Stripping operations in the Baken central channel will continue until the economically viable gravel in the main channel has been 
exhausted. Due to the encouraging results during the period under review, stripping operations are expected to continue until the 
end of the 2016 financial year, after which mining activities will focus on shallow deposits and lower grade stockpiles.

At the Richtersveld Operations, steady performance at Bloeddrift Mine is expected to continue in the next six months. Due to 
disappointing exploration results at the Jakkelsberg mining area, relocation of the plant and mining equipment is planned.

South African production for the 2015 financial year is now expected to be in the order of 57 000 carats.

Angola

In Angola, Somiluana Mine is increasing its production capacity through the reinvestment of surplus internal cash flows. Due to 
the encouraging results and in order to speed up the expansion of the production footprint, external funding is being considered. 
Production results and geological work through drilling and bulk sampling indicate that carat production for the 2015 financial 
year will surpass the 72 000 carats achieved in 2014.

Market

The short-term sentiment in the rough diamond market remains steady but cautious. Demand for high-quality alluvial goods continues 
to be solid and interest in Trans Hex production is expected to remain high.

The long-term market outlook remains positive due to natural production constraints and indications that diamond mines world-wide 
will struggle to keep up with demand. Established markets such as the USA and emerging markets such as China and India continue 
to show strong demand.

 
SPECIAL DIVIDEND DECLARATION

Notice is hereby given of a once-off special cash dividend of 50 cents per share (the "Dividend").

The Dividend has been declared by the Board following the successful conclusion of the acquisition of Namaqualand Mines, as more 
fully described in the related SENS announcements, the most recent of which was dated 29 October 2014.

In accordance with the JSE Limited Listings Requirements the following additional information is disclosed:
 - the Dividend has been declared out of income reserves;
 - the local dividend tax rate is 15%;
 - the gross local dividend amount is 50 cents per ordinary share for shareholders exempt from dividend tax;
 - the net local dividend amount is 42,5 cents per ordinary share for shareholders liable to pay dividend tax;
 - the Group currently has 106 051 275 shares in issue; and
 - the Group's income tax reference number is 4030127338.

No STC credits have been utilised.

The final dividend will be paid on Monday, 1 December 2014, to shareholders recorded in the register of the Group at the close 
of business on the record date being Friday, 28 November 2014.

The salient dates relating to the Dividend are as follows:

Last day to trade cum dividend          Friday, 21 November 2014
Shares commence trading ex-dividend     Monday, 24 November 2014
Record date                             Friday, 28 November 2014
Payment date of the Dividend            Monday, 1 December 2014

Share certificates may not be dematerialised or rematerialised between Monday, 24 November 2014 and Friday, 28 November 2014, 
both days inclusive.


DIVIDEND

The Board has resolved that it would not be prudent to recommence ordinary dividend payments until there is a greater degree 
of confidence that the Group has achieved a growing flow of new earnings. Accordingly, no ordinary interim dividend is declared.


CHANGES TO THE BOARD OF DIRECTORS

Shareholders are advised of the following changes to the Board of Directors:

Mr DR Wolstenholme has been appointed to the Board of Directors as a Non-executive Director, with effect from 31 October 2014. 
Mr Wolstenholme served as Chief Financial Officer of Northam Platinum Limited from 1999 until 2010 and currently heads up their 
corporate finance activities.

Mr T de Bruyn's designation as Independent Non-executive Director has changed to Non-executive Director, with effect from 
31 October 2013, and accordingly, he resigns from the Audit and Risk Committee with immediate effect. 

Ms BP Lekubo has been appointed to the Board of Directors as an Independent Non-executive Director, with effect from 
31 October 2013 and replaces Mr T de Bruyn as a member of the Audit and Risk Committee. Ms Lekubo has been an Alternate Director 
for Mr BR van Rooyen since August 2013. Ms Lekubo is a chartered accountant and Chief Financial Officer at Atlatsa Resources. 


By order of the Board

BR van Rooyen                           L Delport
Chairman                                Chief Executive Officer 

Parow
3 November 2014


REGISTERED OFFICE
405 Voortrekker Road, Parow 7500 
PO Box 723, Parow 7499

JSE SPONSOR
One Capital

TRANSFER SECRETARIES
Computershare Investor Services (Pty) Ltd
PO Box 61051, Marshalltown 2107

DIRECTORATE
BR van Rooyen (Chairman), L Delport (Chief Executive Officer), IP Hestermann (Financial Director), T de Bruyn, BP Lekubo, 
AR Martin, DR Wolstenholme, GM van Heerden (Company Secretary)

Date: 03/11/2014 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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