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TRANS HEX GROUP LIMITED - Unaudited condensed consolidated interim financial statements for the six months ended 30 September 2015

Release Date: 04/11/2015 15:35
Code(s): TSX     PDF:  
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Unaudited condensed consolidated interim financial statements for the six months ended 30 September 2015

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 2015


HEADLINES
- Diamond prices declined by 30,3% compared to the corresponding previous period.
- Diamond grade declined by 23,6%.
- Sales were positively affected by a 14,6% weakening of the Rand against the 
  US dollar.
- Sales revenue totalled R268,7 million (September 2014: R414,1 million).
- South African land operations recorded a gross loss of R30,8 million (September 2014: 
  profit of R76,4 million).
- Equity accounted loss from West Coast Resources (Pty) Ltd amounted to R8,8 million 
  (September 2014: nil).
- Equity accounted profit from Somiluana Mine in Angola amounted to R7,1 million 
  (September 2014: nil).
- Group loss after tax from continuing operations amounted to R43,8 million 
  (September 2014: profit of R25,2 million).
- The Group's net cash position at the end of the period was R347,5 million 
  (September 2014: R351,1 million).
- Loss per share and headline loss per share were 30,3 cents (September 2014: 
  earnings of 34,1 cents).
- Net asset value per share increased to 575,0 cents (September 2014: 541,0 cents).


CONDENSED CONSOLIDATED INCOME STATEMENT
                                                 30/09/15      30/09/14      31/03/15
                                                Unaudited     Unaudited       Audited
                                      Notes         R'000         R'000         R'000
Continuing operations
Sales revenue                                     268 660       414 064       939 685 
Cost of goods sold                               (299 433)     (337 711)     (788 847)
Gross (loss)/profit                               (30 773)       76 353       150 838 
Share of results of associated 
  companies                               1        (1 704)            -       135 976 
Royalties                                          (1 335)       (8 343)      (20 656)
Selling and administration costs                  (41 637)      (43 649)      (75 899)
Mining (loss)/profit                              (75 449)       24 361       190 259 
Exploration costs                                  (1 139)       (2 943)       (2 171)
Other gains - net                         2        11 590         9 071        53 369 
Finance income                                     12 115        11 310        25 052 
Finance costs                                      (2 338)       (2 978)       (4 705)
Impairment                                3             -             -       (86 170)
(Loss)/profit before income tax                   (55 221)       38 821       175 634 
Income tax                                         11 449       (13 626)       (6 568)
(Loss)/profit for the period from 
  continuing operations                           (43 772)       25 195       169 066 
Discontinued operations
Profit for the period from discontinued 
  operations                              4        11 244        10 642        21 508 
(Loss)/profit for the period                      (32 528)       35 837       190 574 

Attributable to:
Continuing operations                             (43 772)       25 195       169 066 
- Owners of the parent                            (43 240)       25 370       169 950 
- Non-controlling interest                           (532)         (175)         (884)
Discontinued operations
- Owners of the parent                             11 244        10 642        21 508 
                                                  (32 528)       35 837       190 574


                                                 30/09/15      30/09/14      31/03/15
                                                Unaudited     Unaudited       Audited
                                      Notes         R'000         R'000         R'000
Earnings per share - basic and 
  diluted (cents) 
- Continuing operations                             (40,9)         24,0         160,8 
- Discontinued operations                            10,6          10,1          20,3 
- Total                                             (30,3)         34,1         181,1 

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

Headline earnings                         5
- Continuing operations                           (43 241)       25 370        61 668 
- Discontinued operations                          11 244        10 642        21 508 
- Total                                           (31 996)       36 012        83 176 

Headline earnings per share (cents)
- Continuing operations                             (40,9)         24,0          58,3 
- Discontinued operations                            10,6          10,1          20,3 
- Total                                             (30,3)         34,1          78,6 

Dividends per share (cents)
- Special                                               -          50,0          50,0 
- Ordinary                                              -             -          10,0 
- Total                                                 -          50,0          60,0 

Average Rand/US$ exchange rate                      12,75         10,60         11,05



CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                 30/09/15      30/09/14      31/03/15
                                                Unaudited     Unaudited       Audited
                                                    R'000         R'000         R'000
(Loss)/profit for the period                      (32 528)       35 837       190 574 

Other comprehensive income net of tax:
Items that may be subsequently reclassified 
  to profit or loss
Translation differences on foreign subsidiaries 
  before and after tax                            (14 998)       (9 469)      (17 529)
Reclassification of foreign currency differences 
  on repayment of long-term receivables from 
  foreign operations                                    -        (4 542)       (4 542)
Total comprehensive income for the period         (47 526)       21 826       168 503 

Attributable to:
- Owners of the parent                            (46 994)       22 001       169 387 
- Non-controlling interest                           (532)         (175)         (884)
                                                  (47 526)       21 826       168 503


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                 30/09/15      30/09/14      31/03/15
                                                Unaudited     Unaudited       Audited
                                      Notes         R'000         R'000         R'000
ASSETS
Non-current assets                                463 300       370 868       466 682 
Property, plant and equipment                     144 205       253 480       152 184 
Investments in associates                 6       253 500        61 509       253 635 
Investments held by environmental 
  trust                                            59 195        55 879        57 431 
Other financial assets                              3 000             -         3 000 
Deferred income tax assets                          3 400             -           432 

Current assets                                    499 270       607 295       553 003 
Inventories                               7       131 299       213 360       105 868 
Trade and other receivables                        20 173        42 860        37 205 
Current income tax                                    342             -         2 750 
Cash and cash equivalents                         347 456       351 075       407 180 
Total assets                                      962 570       978 163     1 019 685 

EQUITY AND LIABILITIES
Capital and reserves                              608 143       571 232       665 742 

Non-controlling interest                             (416)          825           116 

Non-current liabilities                           111 747       142 011       117 065 
Deferred income tax liabilities                         -        35 918         8 632 
Provisions                                        111 747       106 093       108 433 

Current liabilities                               243 096       264 095       236 762
Trade and other payables                          116 998       133 879       117 268 
Interest in joint ventures                4       126 006       122 043       119 450 
Current income tax liabilities                         92         7 735            44 
Borrowings                                              -           438             - 
Total equity and liabilities                      962 570       978 163     1 019 685 

Net asset value per share (cents)                     575           541           630


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                 30/09/15      30/09/14      31/03/15
                                                Unaudited     Unaudited       Audited
                                                    R'000         R'000         R'000
Balance at 1 April                                665 858       550 231       550 231 
Total comprehensive income for the period         (47 526)       21 826       168 503 
Dividends paid                                    (10 605)            -       (52 876)
Balance at end of period                          607 727       572 057       665 858


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                 30/09/15      30/09/14      31/03/15
                                                Unaudited     Unaudited       Audited
                                                    R'000         R'000         R'000

Cash (utilised in)/generated from operations      (38 202)       68 608       157 583 
Movements in working capital                       (8 987)      (89 630)       (6 783)
Net income tax received/(paid)                      2 297       (12 576)      (43 680)
Net cash (utilised in)/generated from 
  operating activities                            (44 892)      (33 598)      107 120 

Cash flows from investment activities              (7 235)      (12 813)      (45 936)
Property, plant and equipment
- Proceeds from disposal of property, 
  plant and equipment                                   -             -            19 
- Replacement of property, plant and 
  equipment                                       (23 019)      (14 950)      (38 263)
- Additions to property, plant and equipment       (4 130)       (6 106)       (9 657)
Proceeds from repayment of loan to associate        9 833             -         7 477 
Investment in associate                                 -             -       (57 200)
Investment in other financial assets                    -             -        (3 000)
Proceeds from disposal of investment                    -             -        35 000 
Interest received                                  10 081         8 243        19 688 
Cash flows from financing activities              (10 612)         (918)      (54 241)
Borrowings repaid                                       -          (843)       (1 281) 
Interest paid                                          (7)          (75)          (84)
Dividends paid                                    (10 605)            -       (52 876)
Effects of exchange rates on cash and 
  cash equivalents                                  3 015           854         2 687 
Net (decrease)/increase in cash and 
  cash equivalents                                (59 724)      (46 475)        9 630 
Cash and cash equivalents at beginning of 
  period                                          407 180       397 550       397 550 
Cash and cash equivalents at end of period        347 456       351 075       407 180


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 
                                                 30/09/15      30/09/14      31/03/15
                                                Unaudited     Unaudited       Audited
                                                    R'000         R'000         R'000
1. Share of results of associated companies
   Share of results of associated companies 
   consists of the following categories:
   - Somiluana - Sociedade Mineira, S.A.            7 095             -        12 715 

   The 33% investment in Somiluana is 
   accounted for as an investment in an 
   associate under the equity method.

   - West Coast Resources (Pty) Ltd                (8 799)            -       123 261 

   The 40% investment in West Coast Resources 
   is accounted for as an investment in an 
   associate under the equity method. 
   Included in the profit for the year 
   ended 31 March 2015 is a gain of 
   R132 million, being negative goodwill
   that arose as a result of the acquisition 
   of assets and liabilities relating to 
   Namaqualand Mines.
                                                   (1 704)            -       135 976

2. Other gains - net
   Other gains - net consist of the 
   following categories:
   - Net foreign exchange gains                    10 392         4 529        10 612 
   - Profit on sale of assets and investments           -             -        35 019 
   - Commission on sale of diamonds                   801             -         3 196 
   - Marketing and management fee                     396             -             - 
   - Foreign exchange gains on repayment of 
     long-term receivables from 
     foreign operation                                  -         4 542         4 542 
                                                   11 590         9 071        53 369

3. Impairment of assets
   Impairment of property, plant 
     and equipment
   - Mining plant and equipment                         -             -        82 867
   - Mine development costs                             -             -         3 303
                                                        -             -        86 170

   While conducting impairment reviews the 
   Group exercises judgement in making 
   assumptions about future rough diamond 
   prices, production volumes, ore reserves 
   and resources included in the current 
   life of mine plans, feasibility studies, 
   future development and production costs, 
   and macroeconomic factors such as 
   inflation and discount rates. Value-in-use 
   impairment models were prepared to assess 
   mining assets for impairment.

   The key assumptions used in performing 
   the impairment tests by cash-generating 
   unit ("CGU") were as follows:

   Discount rate (%)                                13,42           14,15           13,42
   Diamond price per carat (US$)              994 - 1 355   1 061 - 1 705   1 292 - 1 679
   Forecast US$/ZAR exchange rate           13,29 - 14,02   11,18 - 12,10   11,65 - 12,25

   The South African businesses consist of 
   a number of CGUs that are represented by 
   mining areas operated by the Group. 
   Baken and Reuning are two separate CGUs 
   that form part of the South African 
   reporting segment. The recoverable 
   values of these CGUs were derived from 
   the value-in-use calculations performed, 
   which were in excess of the fair value 
   less costs to sell. The Reuning CGU was 
   impaired during the 2015 financial year 
   and placed under care and maintenance.

                                                                             30/09/15
                                                                            Unaudited
                                                                  Baken         Total
                                                                  R'000         R'000
   Carrying value pre-impairment                                109 496       109 496 
   Recoverable amount                                          (114 671)     (114 671)
   Recoverable amount in excess of 
     carrying value                                              (5 175)       (5 175)

   As the recoverable amount is higher than 
   the carrying value no impairment charge 
   is required for the interim period. This 
   outcome is consistent with the 
   corresponding interim period.

                                                                             31/03/15 
                                                                              Audited
                                                    Baken       Reuning         Total
                                                    R'000         R'000         R'000
   Carrying value pre-impairment                  184 219        16 720       200 939 
   Recoverable amount                            (113 195)       (1 574)     (114 769)
   Impairment loss recognised                      71 024        15 146        86 170 

   For the year ended 31 March 2015 an 
   impairment charge of R86,2 million 
   was recognised.

4. 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 
   R11,2 million (31/03/2015: R21,5 million; 
   30/09/2014: R10,6 million) is included below.

   Angolan joint ventures
   Balance at beginning of period                 119 450       125 188       125 188 
   Profit for the period from discontinued 
   operations                                     (11 244)      (10 642)      (21 508) 
   Profit before income tax                       (11 244)      (10 642)      (21 508) 
   Taxation                                             -             -             - 
   Foreign exchange differences                    17 800         7 497        15 770 
   Closing balance at end of period               126 006       122 043       119 450 

5. Reconciliation of headline earnings
   Continuing operations
   (Loss)/profit for the period                   (43 241)       25 370       169 950 
   - Profit on sale of assets                           -             -           (19)
   - Taxation impact                                    -             -             5 
   - Profit on sale of investment                       -             -       (35 000)
   - Taxation impact                                    -             -             - 
   - Impairment of assets                               -             -        86 170 
   - Taxation impact                                    -             -       (24 128)
   - Foreign currency differences on repayment 
     of long-term receivables from foreign 
     operations reclassified to profit or loss          -             -        (4 542)
   - Taxation impact                                    -             -         1 272 
   - Negative goodwill on assets acquired 
     by associate                                       -             -      (132 040)
   Headline (loss)/earnings                       (43 241)       25 370        61 668

   Discontinued operations
   Profit for the period                           11 244        10 642        21 508 
   Headline earnings                               11 244        10 642        21 508

6. Investments in associates
   - Loan to associate: Somiluana - 
     Sociedade Mineira, S.A.                       57 767        61 509        59 276 
     Balance at beginning of period                59 276        59 580        59 580 
     Repayment of loan amount                      (9 833)            -        (7 477)
     Foreign exchange differences                   8 324         1 929         7 173 

     The loan to Somiluana represents a portion 
     of the exploration costs previously 
     incurred by the Group which is recoverable 
     from the newly formed mining company. 
     The loan does not form part of the net 
     investment in the associate as settlement 
     of the loan is considered likely to occur 
     in the foreseeable future.

   - Investment in associate: Somiluana - 
     Sociedade Mineira, S.A.                       24 071             -        13 898 
     Balance at beginning of period                13 898             -             - 
     Share of results of associated company         7 095             -        12 715 
     Foreign exchange differences                   3 078             -         1 183 

     The 33% investment in Somiluana is 
     accounted for as an investment in an 
     associate under the equity method. During 
     the first six months of 2014 the 
     investment's liabilities exceeded its 
     assets and, therefore, no equity accounted 
     profit or loss was accounted for in the 
     previous period.

   - Investment in associate: West Coast 
     Resources (Pty) Ltd                          171 662             -       180 461 
     Balance at beginning of period               180 461             -             - 
     Proportionate shareholder funding                  -             -        52 000 
     Preferential loan                                  -             -         5 200 
     Share of results of associated company        (8 799)            -       123 261 

     Effective 28 October 2014 West Coast 
     Resources (Pty) Ltd, in which the Group 
     holds a 40% interest, acquired assets 
     and liabilities relating to Namaqualand 
     Mines.
                                                  253 500        61 509       253 635 

7. Inventories
   Diamonds                                       126 834       193 250        99 456 
   Consumables                                      4 465        20 110         6 412 
                                                  131 299       213 360       105 868 

   Slow-moving consumable stock to the value 
   of R14,0 million for the year ended 
   31 March 2015 has been written off.

8. Capital commitments
   (including amounts authorised, but 
   not yet contracted)                             28 434        38 640        66 528

   These commitments will be financed from 
   the Group's own resources or with 
   borrowed funds.

9. Fair value estimation
   Items carried at fair value are classified according to the fair value hierarchy, 
   by valuation method. The different levels have been defined as follows:

   - Quoted prices (unadjusted) in active markets for identical assets or liabilities 
     (Level 1).

   - Inputs other than quoted prices included within Level 1 that are observable for 
     the asset or liability, either directly (that is, as prices) or indirectly (that 
     is, derived from prices) (Level 2).

   - Inputs for the asset or liability that are not based on observable market data 
     (that is, unobservable inputs) (Level 3).

   Financial assets are classified as Level 1 according to the fair value hierarchy. 
   Investments held by the environmental trust are the only financial assets carried 
   at fair value, however, this fund consists primarily of cash and cash equivalents 
   with the largest driver of the growth in the trust fund being attributable to 
   interest received.

10. Segment information
    Operating segments 
                                               Continuing                Discontinued
Six months ended 
  30 September 2015            South Africa        Angola         Total        Angola
Carats sold                          22 629             -        22 629             -
 
                                      R'000         R'000         R'000         R'000
Revenue                             268 660             -       268 660             - 
Cost of goods sold                 (299 433)            -      (299 433)            - 
Gross loss                          (30 773)            -       (30 773)            - 
Share of results of 
  associated companies               (8 799)        7 095        (1 704)            - 
Royalties                            (1 335)            -        (1 335)            - 
Selling and administration costs    (36 012)       (5 625)      (41 637)            - 
Mining (loss)/profit                (76 919)        1 470       (75 449)            - 
Exploration costs                    (1 139)            -        (1 139)            - 
Other gains - net                    11 674           (84)       11 590             - 
Profit for the period from 
  discontinued operations                 -             -             -        11 244
Finance income                       12 115             -        12 115             - 
Finance costs                        (2 338)            -        (2 338)            - 
(Loss)/profit before income tax     (56 607)        1 386       (55 221)       11 244

Depreciation included in the above  (35 125)           (7)      (35 132)            - 
Net assets/(liabilities)            645 802        87 931       733 733      (126 006)
Capital expenditure                  27 149             -        27 149             - 
Net asset value per share (cents)       611            83           694          (119)

                                               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
Twelve months ended 
  31 March 2015                South Africa        Angola         Total        Angola
Carats sold                          62 819             -        62 819             -

                                      R'000         R'000         R'000         R'000
Revenue                             939 685             -       939 685             - 
Cost of goods sold                 (788 847)            -      (788 847)            - 
Gross profit                        150 838             -       150 838             - 
Share of results of associated 
  companies                         123 261        12 715       135 976             - 
Royalties                           (20 656)            -       (20 656)            - 
Selling and administration costs    (66 368)       (9 531)      (75 899)            - 
Mining profit                       187 075         3 184       190 259             - 
Exploration costs                    (2 171)            -        (2 171)            - 
Other gains/(losses) - net           54 159          (790)       53 369             - 
Profit for the period from 
  discontinued operations                 -             -             -        21 508
Finance income                       25 052             -        25 052             - 
Finance costs                        (4 705)            -        (4 705)            - 
Impairment of assets                (86 170)            -       (86 170)            - 
Profit before income tax            173 240         2 394       175 634        21 508

Depreciation included in 
  the above                         (88 542)          (24)      (88 566)            - 
Net assets/(liabilities)            694 658        90 625       785 281      (119 422)
Capital expenditure                  47 920             -        47 920             - 
Net asset value per share (cents)       657            86           743          (113)

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 R35,7 million (31/03/2015: R0,0 million; 30/09/2014: 
R51,8 million).

11. Mineral resources and mineral reserves
    No adjustments have been made to the statement of mineral resources and mineral 
    reserves as contained in the 2015 Integrated Annual Report. Reconciliation of 
    production data takes place annually and an updated mineral resources and 
    reserves statement will be published in the 2016 Integrated Annual Report.

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

13. Events after the reporting period
    No events which may have a material effect on the Group occurred between the 
    reporting date and the issuing of this announcement.

14. 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 and 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.

15. 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 2015 financial 
year (in brackets).

Sales revenue from the South African operations decreased by 35,1% in Rand terms from 
R414,1 million to R268,7 million. The disposal of Remhoogte and the ending of 
operations at Reuning accounted for 22,9% of the decrease. Sales from the Lower Orange 
River ("LOR") Operations and Shallow Water Operations decreased by 15,0% due to a 
decline of 30,3% in US$ diamond prices. Revenue was, however, positively affected by 
a 14,6% weakening in the Rand.

South African production decreased by 26,2% to 23 940 carats (September 2014: 
32 450 carats) due to the removal of Reuning and Remhoogte (10,7%) and a 23,6% decrease 
in average grade at the remaining LOR Operations to 1,07 carats/100 cubic metres 
(September 2014: 1,40 carats/100 cubic metres) while volumes treated increased by 6,3%. 

The cost of goods sold decreased to R299,4 million (September 2014: R337,7 million), 
mainly due to the termination of the Reuning operations, a decrease in contractor 
fees in respect of Remhoogte (R64,5 million), lower depreciation, and a stock movement 
of R48,2 million. The LOR unit cost of production for current operations increased 
by 4,4% due to an 11% increase in operating costs, while volumes treated increased 
by 6,3%.

Gross loss for the South African operations amounted to R30,8 million (September 2014: 
profit of R76,3 million).

The South African operations recorded a loss before tax of R56,6 million 
(September 2014: profit of R44,5 million).
 
At West Coast Resources, in which Trans Hex holds a 40% stake, production from the 
Kleinzee tailings dumps amounted to 4 821 carats. Sales amounted to R7,2 million, at 
an average price of US$170 per carat. The equity accounted loss for the period amounted 
to R8,8 million.

In Angola production at Somiluana Mine, in which Trans Hex holds a 33% stake, amounted 
to 67 981 carats (September 2014: 44 400 carats), due to a 19,8% increase in gravel 
treated and a 27,8% increase in average grade. Total sales amounted to US$20,2 million 
at an average price of US$300 per carat (September 2014: sales of US$21,3 million at 
an average price of US$513 per carat). Repayments of US$750 000 were made to Trans Hex 
against the outstanding investment amount. The balance of cash generated was retained 
to develop the Mine. 

Profit from the Angolan continuing operations amounted to R1,4 million (September 2014: 
loss of R5,7 million), consisting of Somiluana's equity accounted profit of R7,1 million 
less head office costs of R5,7 million.

The Group reports an after-tax loss for the period from continuing operations of 
R43,8 million (September 2014: profit of R25,2 million). 

Profit from the discontinued Luarica and Fucauma operations amounted to R11,2 million 
(September 2014: R10,6 million).

The Group therefore reports a loss for the period of R32,5 million (September 2014: 
profit of R35,8 million).

Cash and cash equivalents at the end of the reporting period amounted to R347,5 million 
(September 2014: R351,1 million). 

OPERATING PERFORMANCE
Detailed project information 
                                           Six months ended 30 September 2015                          Six months ended 30 September 2014
                                                                              Average                                                      Average
                                                                                price                                                        price
Detailed project                    Average                     Average     per carat            Average                     Average     per carat
information                       grade per        Carats        carats      achieved          grade per        Carats        carats      achieved
(unaudited)                100 cubic metres      produced     per stone          (US$)  100 cubic metres      produced     per stone          (US$)
South Africa
Baken                                  1,11        18 566          1,37           923               1,42        22 731          1,35         1 379
Bloeddrif                              0,85         2 340          2,02         1 462               1,30         2 970          2,45         2 004
Reuning                                   -             -             -             -               0,33           563          2,59         2 453
Remhoogte                                 -             -             -             -                  -         2 900          3,35         3 643
Shallow water                             -         3 033          0,33           479                  -         3 286          0,30           457
Total South Africa                     1,07        23 940          0,99           932               1,31        32 450          1,08         1 557
West Coast Resources                 297,46         4 821          0,38           170                  -             -             -             -
Angola
Somiluana                             38,26        67 981          0,56           300              29,94        44 400          0,53           513

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 six months 
under review. The average grade decreased to 1,12 carats/100 cubic metres (September 
2014: 1,42 carats/100 cubic metres). 

Results at Bloeddrif Mine were negatively affected by a decrease in average grade 
from 1,34 carats/100 cubic metres in September 2014 to 0,85 carats/100 cubic metres 
in September 2015 and a decrease in average stone size from 2,46 carats per stone in 
September 2014 to 2,02 carats per stone in September 2015. 

Production from the South African operations decreased to 23 940 carats 
(September 2014: 32 450 carats), mainly as a result of the disposal of Remhoogte and 
the ending of operations at Reuning mine and a decrease in the average grade at the 
remaining LOR operations. 

West Coast Resources (Pty) Ltd, South Africa
Production from the Kleinzee tailings dumps for the period amounted to 4 821 carats 
and sales amounted to R7,2 million at an average price of US$170 per carat.
 
The initial drilling programme targeted areas to be stripped and mined in the first six 
to twelve months of production. The drill is currently targeting high-priority areas 
that may identify additional resources for mining.

A 10 ton/hour mobile sampling plant was commissioned in July and is currently treating 
samples from the scheduled production blocks to verify grade distribution in the blocks 
in preparation for production. 

Somiluana - Sociedade Mineira, S.A., Angola
Mining and exploration activities during the period remained focused on the east bank 
of the Luana River where the grades and diamond values continue to exceed resource 
estimations.
 

OUTLOOK 
Lower Orange River Operations
Production at the LOR is expected to improve during the second half of the year as 
higher grade gravels are accessed through overburden stripping.
 
South African production for the 2016 financial year is expected to be in the order of 
53 000 carats.

West Coast Resources (Pty) Ltd, South Africa
Construction of the production plant is progressing well and the 50 tons/hour DMS plant 
has been commissioned. The front-end of the plant will be commissioned before the end 
of the calendar year. 

Stripping operations have commenced. The first production gravel is scheduled to be 
treated before the end of the calendar year and full production is expected early 
in 2016.

Net revenue from the treatment of the small remaining tonnages of final recovery 
tailings and sampling production are not expected to cover project operational 
expenditure during the 2016 financial year. As this project is still in a start-up 
phase, a loss is expected for the 2016 financial year.

Somiluana - Sociedade Mineira, S.A., Angola
Somiluana Mine continues to increase 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 testing indicate that 
carat production for the 2016 financial year will surpass the 94 000 carats achieved 
in 2015.

Market
Sentiment in the rough market remains depressed, intensified by slowing growth figures 
in China and unstable stock markets. Weak demand and trading therefore continued, 
particularly in Asia, as consumer spending decreased significantly.

Demand in general continues to be low amid high stock levels and tight liquidity. 
The surplus polished and rough product is likely to keep prices under pressure.

Interest in the Trans Hex November sale is however healthy, confirming that demand for 
the Group's product remains strong. 

However, interest in Trans Hex's tender sales continues to be healthy, confirming that 
demand for the Company's product remains strong. 


DIVIDEND
The Board has resolved not to declare an interim dividend.



By order of the Board


BR van Rooyen           L Delport
Chairman                Chief Executive Officer

Parow
4 November 2015

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

JSE SPONSOR
One Capital

TRANSFER SECRETARIES
Computershare Investor Services (Pty) Ltd

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



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