Wrap Text
Audited condensed consolidated financial statements
Rockwell Diamonds Inc.
(A company incorporated in accordance with
the laws of British Columbia, Canada)
(Incorporation number BCO354545)
(South African registration number: 2007/031582/10)
Share code on the JSE Limited: RDI
ISIN: CA77434W2022 Share code on the TSX: RDI
CUSIP Number: 77434W103
("Rockwell" or "the Group")
28 May 2015
Audited condensed consolidated financial statements
for the years 28 February 2015 and 28 February 2014
Consolidated Statements of Financial Position
Amounts in Canadian Dollars ('000)
As at As at
28 Feb 28 Feb
2015 2014
Assets
Non-current assets
Mineral property interests 16 518 26 642
Investment in associates 396 233
Property, plant and equipment 27 001 30 719
Investments and deposits 1 502 5 386
Rehabilitation deposits 3 376 1 701
Total non-current assets 48 793 64 681
Current assets
Inventories 2 177 4 608
Loans to related parties 8 186
Current tax receivable 37 36
Trade and other receivables 4 889 8 501
Cash and cash equivalents 576 1 325
Assets held for sale 13 525 -
Total current assets 21 212 14 656
Total assets 70 005 79 337
Equity and liabilities
Equity
Share capital 147 435 147 073
Reserves (8 575) (10 009)
Retained loss (102 076) (88 096)
Total equity attributable
to the equity holders
of the Group 36 784 48 968
Non-controlling interest (2 369) (1 737)
Total equity 34 415 47 231
Liabilities
Non-current liabilities
Loans and borrowings 3 844 3 241
Finance lease obligation 1 276 110
Deferred tax 2 995 5 926
Rehabilitation obligation 5 987 6 459
Total non-current liabilities 14 102 15 736
Current liabilities
Loans from related parties 162 4
Loans and borrowings 2 296 1 954
Finance lease obligation 708 165
Trade and other payables 10 902 11 162
Bank overdraft - 3 085
Liabilities held for sale 7 420 -
Total current liabilities 21 488 16 370
Total liabilities 35 590 32 106
Total equity and liabilities 70 005 79 337
Consolidated Statements of Financial Performance
Amounts in Canadian Dollars ('000)
For the year For the year
ended ended
28 Feb 28 Feb
2015 2014
Sale of diamonds 56 948 41 107
Beneficiation income 11 050 4 063
Cost of sales before
amortisation and depreciation (68 827) (39 200)
Gross (loss) profit before
amortization and depreciation (829) 5 970
Amortization of mineral
property interests (793) (928)
Depreciation of property,
plant and equipment (6 273) (5 009)
Rehabilitation obligation recognized (993) (743)
Gross loss (8 888) (710)
Other income 1 619 1 703
General, administration and
business development expenses (5 895) (4 440)
Realized foreign exchange with
sale of subsidiary - (6 609)
Impairments (3 643) (55)
Loss before net finance costs (16 807) (10 111)
Finance income 449 699
Finance costs (1 308) (1 137)
Loss after net finance costs (17 666) (10 549)
Share of profit from equity
accounted investments 149 59
Loss before taxation (17 517) (10 490)
Taxation 2 991 63
Loss for the year (14 526) (10 427)
(Loss) profit attributable to :
Owners of the parent (13 980) (10 618)
Non-controlling interest (546) 191
(14 526) (10 427)
Loss per share
Basic and diluted loss
per share (cents) (25.89) (21.30)
Consolidated Statements of Comprehensive Income
Amounts in Canadian Dollars ('000)
For the year For the year
ended ended
28 Feb 28 Feb
2015 2014
Loss for the year (14 526) (10 427)
Other comprehensive income net
of taxation
Items that are or may be
reclassified to profit or loss
Exchange differences on
translating foreign operations 1 108 (5 160)
Reversal of realized foreign
exchange with sale of subsidiary - 6 609
Other comprehensive income for the
year net of taxation 1 108 1 449
Total comprehensive loss (13 418) (8 978)
Total comprehensive income
attributable to:
Owners of the Group (12 786) (9 378)
Non-controlling interest (632) 400
Total comprehensive income
for the year (13 418) (8 978)
Consolidated Statements of Changes in Equity
Amounts in Canadian Dollars ('000)
Share Foreign Share- Total
capital currency based net
trans- payment reserves
lation reserve**
reserve*
Balance at
01 March 2013 146 862 (20 039) 8 164 (11 875)
Total comprehensive
income for the year
(Loss) profit for the year - - - -
Other comprehensive income - 1 240 - 1 240
Total comprehensive income
for the year - 1 240 - 1 240
Share-based payment expense - - 626 626
Shares issued to employees 205 - - -
Shares issued to consultants 29 - - -
Share issue costs (23) - - -
Total changes 211 1 240 626 1 866
Balance at
28 February 2014 147 073 (18 799) 8 790 (10 009)
Total comprehensive income
for the year
Loss for the year - - - -
Other comprehensive income - 1 194 - 1 194
Total comprehensive income
for the year - 1 194 - 1 194
Share-based payment expense - - 240 240
Share options excercised 16 - - -
Shares issued to employees 347 - - -
Share issue costs (1) - - -
Total changes 362 1 194 240 1 434
Balance at
28 February 2015 147 435 (17 605) 9 030 (8 575)
Amounts in Canadian Dollars (000’s)
Retained Total Non- Total
loss equity control- equity
attri- ling
butable interest
to equity
holders of
the Group
Balance at
01 March 2013 (77 478) 57 509 (2 137) 55 372
Total comprehensive
income for the year
(Loss) profit for
the year (10 618) (10 618) 191 (10 427)
Other comprehensive
income - 1 240 209 1 449
Total comprehensive
income for the year (10 618) (9 378) 400 (8 978)
Share-based payment expense - 626 - 626
Shares issued to employees - 205 - 205
Shares issued to consultants - 29 - 29
Share issue costs - (23) - (23)
Total changes (10 618) (8 541) 400 (8 141)
Balance at
28 February 2014 (88 096) 48 968 (1 737) 47 231
Total comprehensive
income for the year
Loss for the year (13 980) (13 980) (546) (14 526)
Other comprehensive income - 1 194 (86) 1 108
Total comprehensive income
for the year (13 980) (12 786) (632) (13 418)
Share-based payment expense - 240 - 240
Share options excercised - 16 - 16
Shares issued to employees - 347 - 347
Share issue costs - (1) - (1)
Total changes (13 980) (12 184) (632) (12 816)
Balance at
28 February 2015 (102 076) 36 784 (2 369) 34 415
* Currency translation differences arising on the conversion of the
results and financial position of foreign operations from their
functional currency to the Company's presentation currency are
accumulated in the foreign currency translation reserve.
** Equity settled share-based payment transactions are accumulated in
the share-based payment reserve.
Consolidated Statements of Cash Flows
Amounts in Canadian Dollars ('000)
For the year For the year
ended ended
28 Feb 28 Feb
2015 2014
Cash flows from operating activities
Cash receipts from customers 68 301 41 999
Cash paid to suppliers and employees (67 644) (39 328)
Cash generated from operations 657 2 670
Finance income 263 373
Finance costs (469) (484)
Net cash inflow from operating
activities 451 2 559
Cash flows from investing activities
Purchase of property, plant
and equipment (4 070) (8 707)
Proceeds from sale of property,
plant and equipment 367 975
Purchase of mineral property interests (663) (199)
Sale of mineral property interests - 2 098
Proceeds from sale of subsidiary - 1 679
Movement in related party loans 328 (143)
Movement in investments and
deposits 2 575 (2 383)
Increase in rehabilitation deposits (1 623) (65)
Net cash outflow from investing
activities (3 086) (6 745)
Cash flows from financing activities
Proceeds on share issue 16 -
Share issue costs (1) (23)
Proceeds from (repayment of) loans
and borrowings 4 126 (10)
Proceeds from (repayment of)
finance lease obligations 1 606 (272)
Net cash inflow (outflow) from
financing activities 5 747 (305)
Net movement in cash and cash
equivalents for the year 3 112 (4 491)
Cash and cash equivalents at the
beginning of the year (1 760) 2 731
Cash and cash equivalents included
in assets held for sale (776) -
Total cash and cash equivalents at
end of the year 576 (1 760)
Assets and liabilities held for sale
On March 30, 2015, the Company announced that it had reached an
agreement to sell its non-core Tirisano Project ("Tirisano") in the
North West Province of South Africa for a cash consideration of
ZAR60 million ($6.4 million). The property had previously been
identified as a non-core asset and a sale process was initiated. After
evaluating a number of proposals as part of the sale process, the
Company reached an agreement with a consortium made up of the royalty
miners ("the Consortium"), who have operated at Tirisano for the past
two years. The Consortium will acquire the entire issued share
capital, together with claims on loan account in Rockwell's 100%
owned subsidiary, Etruscan Diamonds Proprietary Limited including the
Tirisano mining right and its associated infrastructure. Accordingly
these assets and liabilities are presented as a disposal group held
for sale.
The sale is expected to close within 12 months, after the
successful completion of conditions precedent, including required
regulatory approvals. The cash consideration will be settled by way
of two initial payments totaling ZAR20 million ($2.1 million),
already received in Q1 2016, followed by 20 equal monthly instalments
of ZAR2 million ($0.21 million).
As at 28 February 2015 the disposal group was stated at the impaired
carrying amount being the lower of carrying amount or fair value less
costs to sell (Level 1 of the fair value hierarchy) and was included
within the North West for operating segment reporting purposes. An
impairment of $2.6 million was calculated on the mineral property
value based on the difference between the selling price of
ZAR60 million ($6.4 Million) and the net carrying value.
The disposal of the Tirisano Project is not considered to be a
discontinued operation. Although regarded as a seperate segment it is
not considered to represent a seperate line of business or
geographical area.
Amounts in Canadian Dollars ('000)
As at
28 Feb
2015
Assets and liabilities
Assets held for sale
Mineral property interests 8 000
Property, plant and equipment 1 448
Investments and deposits 1 664
Rehabilitation deposits 84
Inventory 457
Trade and other receivables 1 096
Cash and cash equivalents 776
13 525
Liabilities held for sale
Loans and borrowings 3 697
Rehabilitation obligation 2 117
Trade and other payables 1 606
7 420
Acquisition of subsidiary
Gumrock Proprietary Limited ("Gumrock") is an unlisted entity in
which the Group has a 50% interest.
Gumrock is structured as a separate vehicle in which the Group has
a residual interest. Rockwell has certain voting rights which
effectively give it the ability to control the relevant activities,
and management has concluded that Gumrock should be consolidated
from incorporation.
Gumrock was incorporated in March 2014, and Rockwell paid
ZAR1million for its 50% interest. A prospecting and contract mining
agreement was concluded between Gumrock and the Group's subsidiary,
Saxendrift Mining Proprietary Limited, in order to mine on the
Group's Kwartelspan prospecting right.
A loss of $0.6 million was allocated to non-controlling interest
during the year ended 28 February 2015, representing 50% of
Gumrock's total loss for the year.
Loss per share
Amounts in Canadian Dollars ('000)
For the year For the year
ended ended
28 Feb 28 Feb
2015 2014
Basic and diluted loss per share
Cents per share (25.89) (21.30)
Basic loss per share was calculated
based on a weighted average number
of common shares of 54 001 354
(2014:49 839 859).
Reconciliation of loss for the year
to basic loss
Loss for the year (14 526) (10 427)
Adjusted for:
Loss attributable to non-controlling
interest 546 (191)
Basic loss attributable to owners
of the Group (13 980) (10 618)
At 28 February 2015 and 28 February 2014 the impact of share-based
payment options were excluded from the weighted average number of
shares, for the purpose of the diluted loss per share calculation,
as the effect would have been anti- dilutive.
Basic and diluted headline loss per share
Cents per share * (19.81) (8.68)
Reconciliation between basic loss and
headline loss
Basic loss attributable to owners
of the Group (13 980) (10 618)
Adjusted for:
Profit on disposal of mineral
properties - (482)
Loss (profit) on disposal of
property, plant and equipment 266 (72)
Impairment of mineral property interests 2 576 -
Impairment of property, plant and
equipment 438 36
Share of profit from equity accounted
investment - (59)
Loss on sale of subsidiary - 259
Realized foreign exchange with
sale of subsidiary - 6 609
Non-controlling interest portion of
above adjustments - -
Headline loss attributable to owners
of the Group (10 700) (4 327)
The basic and diluted headline loss per share disclosure is provided
based on the listing requirements of the Johannesburg Stock Exchange
(Group's secondary listing). The disclosure of basic and diluted
headline loss per share is provided in accordance with
Circular 2/2013 as issued by the South African Institute of Chartered
Accountants. Headline loss represents the basic loss attributable to
the owners of the Group excluding certain re-measurements.
At 28 February 2015 and 28 February 2014 the impact of share-based
payment options were excluded from the weighted average number of
shares, for the purpose of the diluted headline loss per share
calculation, as the effect would have been anti-dilutive.
Segmental information
The Group has three reportable operating segments, as described
below, which are the Group's operating divisions. These divisions
offer different diamond product characteristics, qualities,
geological characteristics, processes and services, and are managed
separately because they require different technology and profit or
cost strategies. For each of the divisions the Group executive
committee (chief operating decision making body) reviews internally
managed reports on at least a monthly basis. The following describes
the operations in each of the Group's reportable segments:
- Northern Cape operation is associated with the mining of Paleo
Channels and Rooikoppie gravels and the recovery of high value and
larger carat size diamonds;
- North West operation is associated with the mining of potholes and
the recovery of lower value and smaller carat size diamonds; and
- Corporate represents the corporate management and administrative
function of the Group.
The reconciliation column represents the inter group transactions
eliminated on consolidation. All reportable segments are located in
the same geographical jurisdiction.
Information regarding the results of each of the reportable segments
is included below.
For the year ended 28 February 2015
Northern North Corporate Reconciling Total
Cape West
Property, plant and
equipment 26 999 - 2 - 27 001
Mineral property
interests 16 518 - - - 16 518
Total assets 47 415 13 525 65 672 (56 607) 70 005
Total liabilities 63 578 22 007 6 612 (56 607) 35 590
External revenue (51 504) (16 494) - - (67 998)
Other material non-cash
items
- Depreciation on
property, plant
and equipment 6 021 248 4 - 6 273
- Amortization on mineral
property interests 568 225 - - 793
- Rehabilitation
obligation recognised 1 406 (413) - - 993
- Impairment of mineral
property interests - 2 576 - - 2 576
- Impairment of property,
plant and equipment 438 - - - 438
- Write down mine supplies 48 - - - 48
- Impairment of sundry
receivables 578 3 - - 581
- Share of profit from
equity accounted
investment - - (149) - (149)
Finance income (347) (93) (9) - (449)
Finance costs 809 374 125 - 1 308
Taxation (2 991) - - - (2 991)
Loss for the year 10 892 2 362 1 272 - 14 526
For the year ended 28 February 2014
Northern North Corporate Reconciling Total
Cape West
Property, plant and
equipment 29 079 1 627 13 - 30 719
Mineral property
interests 16 265 10 376 - - 26 642
Total assets 57 739 13 988 71 698 (64 088) 79 337
Total liabilities 72 156 21 589 2 449 (64 088) 32 106
External revenue (36 445) (8 725) - - (45 170)
Other material non-cash
items
- Depreciation on
property, plant and
equipment 4 764 241 3 - 5 009
- Amortization on
mineral property
interests 785 143 - - 928
- Rehabilitation
obligation (revised)
recognised 1 167 (424) - - 743
- Impairment of property,
plant and equipment 36 - - - 36
- Write down of mine
supplies 19 - - - 19
- Share of profit from
equity accounted
investment - - (59) - (59)
Finance income (514) (93) (92) - (699)
Finance cost 533 505 99 - 1 137
Taxation (63) - - - (63)
Loss for the year 2 294 (688) 8 821 - 10 427
Subsequent events
- On 5 January 2015 the Company signed an agreement to acquire certain
assets of Bondeo 140 cc (Steyn transaction) for $29.0 million
(ZAR284 million) (subsequently amended on 12 May 2015 to $21.9 million
(ZAR214.95 million)). This transaction was subject to a number of
conditions precedent including regulatory approvals. At the date of
signature of the financial statements, the required approvals and
bridging finance had been secured to the end of August 2015; it is
envisaged that the Group will take control of this operation on
1 June 2015. Refinancing of the acquisition debt and the Daboll loan
will need to take place during Q2 of fiscal 2016.
- On 30 March 2015, the Group announced that it had reached an
agreement to sell its non-core Tirisano property on the North West
Province of South Africa for a cash consideration of $6.4 million
(ZAR60 million). This transaction is subject to a number of conditions
precedent, including regulatory approvals which have been applied for
but not yet satisfied at the date of signing the financial statements.
The consideration will be settled by way of two initial payments totaling
$2.1 million (ZAR20 million), already received in Q1 2016, followed by
20 equal monthly instalments of $0.21 million (ZAR2 million).
- The Group’s overdraft expires at the end of May 2015. Negotiations were
under way to renew this facility at the date of signing these financial
statements.
- On the date of signature of these financial statements the Group and
Gump Mining CC concluded an agreement to liquidate Gumrock Mining
Proprietary Limited. This has no impact on the amount disclosed in the
financial statements.
Apart from the above, management is not aware of any matter or circumstance
arising since the end of the financial year requiring amendment to the
amounts and disclosures included in these financial statements.
Consolidated statements of financial performance
Amounts in Canadian Dollars ('000)
For the year For the year
ended ended
28 Feb 28 Feb
2015 2014
For the year ended 28 February 2015,
rehabilitation obligation expense
has been reclassified to be included
in gross loss. In the year ended
28 February 2014, rehabilitation
obligation expense was classified
below the gross loss total.
Gross profit as previously stated - 33
Rehabilitation obligation recognized - (743)
Gross loss as currently stated - (710)
Non-controlling interest
The following table summarises the information relating to each of
the Group's subsidiaries that has material non-controlling interest
("NCI"), before any intra-group eliminations.
28 February 2015
Blue Gum Gumrock Intra-group Total
Diamonds Mining Pty eliminations
Pty Limited Limited
NCI percentage 26% 50%
Non-current assets - 29
Current assets 3 670 91
Non-current liabilities - (1 251)
Current liabilities (24 484) (83)
Net assets (20 814) (1 214)
Carrying amount of NCI (5 412) (607) 3 650 (2 369)
Revenue 16 494 472
Profit (loss) 340 (1 268)
Other comprehensive income 464 (23)
Total comprehensive income 804 (1 291)
Profit (loss) allocated to NCI 88 (634) - (546)
Other comprehensive income
allocated to NCI (60) (26) - (86)
28 February 2014
Blue Gum Gumrock Intra-group Total
Diamonds Mining Pty eliminations
Pty Limited Limited
NCI percentage 26% 50%
Non-current assets 1 709 -
Current assets 1 627 -
Non-current liabilities (18 836) -
Current liabilities (4 681) -
Net assets (20 181) -
Carrying amount of NCI (5 247) - 3 510 (1 737)
Revenue 8 725 -
Profit 734 -
Other comprehensive income (1 621) -
Total comprehensive income (887) -
Profit allocated to NCI 191 - - 191
Other comprehensive income
allocated to NCI 209 - - 209
Corporate information
Registered office – South Africa:
Level 1, Wilds View, Isle of Houghton, Corner Carse O’Gowrie and
Boundary Roads, Houghton Estate, Johannesburg 2198
PO Box 3011, Houghton 2041, South Africa
Telephone: +27 11 484 0830 Facsimile: +27 86 262 2838
Corporate address – Canada:
2900–550 Burrard Street, Vancouver, British Columbia,
Canada V6C 0A3
Telephone: +1 604 631 3131 Facsimile: +1 604 631 3232
Toll Free: 1 866 635 3131
Corporate advisor: Allan Hochreiter Proprietary Limited
4 Fricker Road, Illovo, Sandton 2196, South Africa
JSE sponsor: PSG Capital
First Floor, Building 8 Inanda Greens Business Park,
54 Wierda Road West, Wierda Valley, Sandton 2196
International broker: Northland Capital Partners Limited
60 Gresham Street, London, EC2V 7BB United Kingdom
Auditors: KPMG Inc Chartered Accountants
KPMG Crescent, 85 Empire Road, Parktown 2193, South Africa
Transfer agents - South Africa:
Computershare Investor Services Proprietary Limited
(Registration number 2004/0036471/07)
Ground Floor, 70 Marshall Street Johannesburg 2001, South Africa
Transfer agents - Canada: Computershare Investor Services Inc.
3rd Floor, 510 Burrard Street, Vancouver, British Columbia,
Canada V6C 3B9
Lawyers - South Africa: Brink Falcon Hume Inc Attorneys
Second Floor, 8 Melville Road, Illovo, Sandton 2196, South Africa
Lawyers - Canada: Fasken Martineau DuMoulin LLP
333 Bay Street, Suite 2400, Bay Adelaide Centre, Toronto, Ontario,
Canada, M5H 2T6
Date: 29/05/2015 07:05:00 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.