Wrap Text
Unaudited Interim Consolidated Financial Statements For The Period Ended 30 November 2016
Rockwell Diamonds Inc.
(A company incorporated in accordance with the laws of British Columbia, Canada)
(Incorporation number BC0354545)
(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")
16 January 2017
Unaudited Interim Consolidated Financial Statements
for the period ended 30 November 2016
Consolidated Statements of Financial Position
As at As at
30 November 28 February
Amounts in Canadian Dollars ('000) 2016 2016
Assets
Non-current assets
Mineral property interests 12 275 23 871
Investment in associates 399 452
Property, plant and equipment 23 273 25 506
Investments and deposits 1 670 1 344
Rehabilitation deposits 106 1 103
Total non-current assets 37 723 52 276
Current assets
Inventories 1 538 2 100
Trade and other receivables 3 538 4 083
Cash and cash equivalents 154 58
Assets held for sale 15 689 -
Total current assets 20 919 6 241
Total assets 58 642 58 517
Equity and liabilities
Equity
Share capital 147 472 147 472
Reserves (14 363) (13 607)
Retained loss (135 872) (130 358)
Total equity (2 763) 3 507
Liabilities
Non-current liabilities
Loans and borrowings 28 497 26 573
Finance lease obligation - 430
Deferred tax 1 499 4 867
Rehabilitation obligation 2 041 7 753
Total non-current liabilities 32 037 39 623
Current liabilities
Loans from related parties 1 222 1 218
Finance lease obligation 650 594
Trade and other payables 16 342 12 185
Bank overdraft 1 132 1 390
Liabilities held for sale 10 022 -
Total current liabilities 29 368 15 387
Total liabilities 61 405 55 010
Total equity and liabilities 58 642 58 517
Consolidated Statements of Financial Performance
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 November 30 November 30 November 30 November
Dollars ('000) 2016 2016 2015 2015
Sale of diamonds 2 419 25 092 6 913 27 459
Beneficiation income 1 087 4 295 155 9 814
Cost of sales before
amortization and depreciation (6 935) (27 825) (12 156) (36 296)
Gross (loss) profit before
amortization and depreciation (3 429) 1 562 (5 088) 977
Amortization of mineral
property interests (221) (1 153) (391) (1 247)
Depreciation of property,
plant and equipment (556) (2 851) (1 505) (4 364)
Rehabilitation obligation
reversed (recognized) 505 (51) (56) (121)
Gross loss (3 701) (2 493) (7 040) (4 755)
Other income 164 434 126 641
General, administration
and business development
expenses (754) (2 462) (734) (3 996)
Loss on sale of
subsidiary - - (79) (1 853)
Realized foreign exchange
with sale of subsidiary - - - 1 276
Impairment of mineral
property interests (1 265) (1 265) - -
Loss before net finance
costs (5 556) (5 786) (7 727) (8 687)
Finance income - 19 78 127
Foreign exchange profit
(loss) on US$ loans 763 2 395 (1 995) (4 818)
Finance costs (709) (2 217) (875) (2 216)
Loss after net finance
costs (5 502) (5 589) (10 519) (15 594)
Share of profit from equity
accounted investment 6 75 31 122
Loss before taxation (5 496) (5 514) (10 488) (15 472)
Taxation - - 1 162 2 112
Loss for the period (5 496) (5 514) (9 326) (13 360)
Loss attributable to:
Owners of the parent (5 496) (5 514) (9 346) (13 297)
Non-controlling interest - - 20 (63)
(5 496) (5 514) (9 326) (13 360)
Loss per share
Basic and diluted loss
per share (cents) (10.00) (10.03) (17.13) (24.37)
Other comprehensive income net of taxation
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 November 30 November 30 November 30 November
Dollars ('000) 2016 2016 2015 2015
Loss for the period (5 496) (5 514) (9 326) (13 360)
Other comprehensive
income net of taxation
Items that are or may be
reclassified to profit
or loss
Exchange differences on
translating foreign operations (676) (827) (1 521) (2 672)
Realized foreign exchange
differences with sale
of subsidiary - - - (1 276)
Other comprehensive
income for the period net
of taxation (676) (827) (1 521) (3 948)
Total comprehensive income
for the period (6 172) (6 341) (10 847) (17 308)
Total comprehensive income
attributable to:
Owners of the Group (6 172) (6 341) (10 917) (17 378)
Non-controlling interest - - 70 70
Total comprehensive income
for the period (6 172) (6 341) (10 847) (17 308)
Consolidated Statements of Changes in Equity
Foreign Share-
currency based
Share translation payment
Amounts in Canadian Dollars ('000) capital reserve* reserve**
Balance at 01 March 2015 147 435 (17 605) 9 030
Total comprehensive income
for the period
Loss for the period - - -
Other comprehensive income - (4 081) -
Total comprehensive income for the
period - (4 081) -
Share-based payment expense - - 59
Sale of subsidiary - (1 275) -
Total changes - (53 586) 59
Balance as at 30 November 2015 147 435 (22 961) 9 089
Balance at 01 March 2016 147 472 (22 706) 9 099
Total comprehensive income
for the period
Loss for the period - - -
Other comprehensive income - (827) -
Total comprehensive income for the period - (827) -
Share-based payment expense - - 20
Reclassification - - -
Total changes - (827) 20
Balance at 30 November 2016 147 472 (23 533) 9 119
Convertible Total
instruments net Retained
Amounts in Canadian Dollars ('000) reserve reserve loss
Balance at 01 March 2015 - (8 575) (102 076)
Total comprehensive income
for the period
Loss for the period - - (13 297)
Other comprehensive income - (4 081) -
Total comprehensive income
for the period - (4 081) (13 297)
Share-based payment expense - 59 -
Sale of subsidiary - (1 275) -
Total changes - (5 297) (13 297)
Balance as at 30 November 2015 - (13 872) (115 373)
Balance at 01 March 2016 - (13 607) (130 358)
Total comprehensive income
for the period
Loss for the period - - (5 514)
Other comprehensive income - (827) -
Total comprehensive income
for the period - (827) (5 514)
Share-based payment expense - 20 -
Reclassification 51 51 -
Total changes 51 (756) (5 514)
Balance at 30 November 2016 51 (14 363) (135 872)
Total equity
attributable
to equity Non-
holders of controlling Total
Amounts in Canadian Dollars ('000) the Group interest equity
Balance at 01 March 2015 36 784 (2 369) 34 415
Total comprehensive income
for the period
Loss for the period (13 297) (63) (13 360)
Other comprehensive income (4 081) 133 (3 948)
Total comprehensive income
for the period (17 378) 70 (17 308)
Share-based payment expense 59 - 59
Sale of subsidiary (1 275) - (1 275)
Total changes (18 594) 1 748 (16 846)
Balance as at 30 November 2015 18 190 (621) 17 569
Balance at 01 March 2016 3 507 - 3 507
Total comprehensive income
for the period
Loss for the period (5 514) - (5 514)
Other comprehensive income (827) - (827)
Total comprehensive income
for the period (6 341) - (6 341)
Share-based payment expense 20 - 20
Reclassification 51 - 51
Total changes (6 270) - (6 270)
Balance at 30 November 2016 (2 763) - (2 763)
* Currency translation differences arising on the conversion of the net
investment in foreign operations from the 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
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 November 30 November 30 November 30 November
Dollars ('000) 2016 2016 2015 2015
Cash flows from
operating activities
Cash receipts from customers 5 408 30 422 11 899 38 239
Cash paid to suppliers and
employees (7 052) (28 417) (11 504) (39 142)
Cash (utilised by) generated
from operations (1 644) 2 005 395 (903)
Finance income - 19 33 125
Finance costs (227) (309) 13 (210)
Net cash (outflow) inflow from
operating activities (1 871) 1 715 441 (988)
Cash flows from investing
activities
Purchase of property, plant
and equipment - (2 805) (450) (1 357)
Proceeds from sale of property,
plant and equipment 4 226 2 87
Purchase of mineral property
interests 84 63 (13) -
Proceeds from sale of mineral
property interests - - - 502
Proceeds from sale of subsidiary - - 543 3 410
Acquisition of subsidiary and
business combination - - - (1 708)
Advances from related party loans (144) (180) - 30
Repayment of related party loans - - (2) -
(Increase) decrease in
investments and deposits 1 018 (176) 62 (22)
Decrease in rehabilitation
deposits (1 074) 59 1 343 1 625
Repayment of loan from buyers
of subsidiary - 1 712 - -
Net cash (outflow) inflow from
investing activities (112) (1 101) 1 485 2 567
Cash flows from financing
activities
Advances from loans and
borrowings 1 882 3 393 - -
Repayment of loans and borrowings (103) (3 071) (775) (3 752)
Repayment of finance lease
obligations (237) (582) (171) (580)
Net cash inflow (outflow) from
financing activities 1 542 (260) (946) (4 332)
Net movement in cash and cash
equivalents for the period (441) 354 980 (2 753)
Cash and cash equivalents at the
beginning of the period (537) (1 332) (2 381) 576
Cash and cash equivalents
released from assets held for
sale - - - 776
Total net cash and cash
equivalents at end of the period (978) (978) (1 401) (1 401)
Sale and acquisition of subsidiaries
Sale of subsidiary
An acquisition consortium assumed control of Tirisano on March 28, 2015,
and therefore the Group accounted for the sale as of that date. The cash
consideration was to be settled by way of two initial payments totaling
ZAR20 million ($1.8 million), followed by 20 equal monthly instalments of
ZAR2 million ($0.17 million), of which 12 have been received to date.
Therefore as at 29 February 2016, ZAR22 million ($1.8 million) was outstanding
on the sale price. This was received in the period under review, after
agreement of an early settlement discount of ZAR 2 million.
Carrying value of assets sold
Property, plant and equipment 1 417
Mineral property interests 8 000
Rehabilitation obligation (2 072)
Rehabilitation deposits 1 739
Trade and other receivables 1 142
Trade and other payables (238)
Loans and borrowings (3 720)
Loan to related party 8
Outside shareholders 1 678
Total net assets sold 7 954
Net assets sold 7 954
Loss on sale of subsidiary 1 774
6 180
Consideration
Cash received 2 098
Deferred consideration - outstanding at year end 2 770
Deferred consideration - received since acquisition 1 312
6 180
Business combination
On May 25, 2015, Rockwell announced the closing of the Bondeo 140 cc
acquisition ("Steyn Transaction"), and assumed control on May 28, 2015.
All required approvals and long term acquisition credit facilities
were secured.
The acquisition was accounted for as an acquired business in terms of
IFRS 3: Business Combinations. It included the purchase of 100% of the
issued share capital in Pioneer Minerals Proprietary Limited which owns the
Remhoogte property, from Bondeo 140 cc, the Holsloot and Bo-Karoo properties
and certain earthmoving equipment and plant.
The movable assets acquired have been included in a first security charge
securing the two long term acquisition credit facilities from Diacore and
Emerald as disclosed in note 9.
The following summarises the fair value of assets and liabilities acquired
Mineral property interests 13 130
Property, plant and equipment 13 385
Deferred tax (3 368)
Rehabilitation obligation (994)
Other liabilities (99)
Total identifiable net assets 22 054
The Group financed the purchase consideration through
Cash (513)
Bridging finance - Diacore (paid directly by vendor to seler) (20 346)
Bridging finance - Mark Bristow (1 195)
(22 054)
Net cash outflow on acquisition
Cash consideration paid (1 708)
Assets and liabilities held for sale
The Company announced that it was going out to tender for the sale of parts
of Saxendrift Mine and Remshoogte/Holsloot complex. Interested parties were
identified and negotiations concluded with the execution of a contract with
Nelesco 318 (Pty) Ltd "the Purchaser", pursuant to which the Company will
sell certain of the diamond prospecting, mining, recovery, sorting and
processing business carried on by it in the Northern Cape for a cash
consideration of R45.5 million (CAD 4.1 million).
At near final draft of the Sale Agreement is available. The sale is subject
to the successful completion of conditions precedent, including regulatory
requirements. The cash consideration of ZAR45 million will be settled in
three tranches, the first being ZAR20 million (CAD 1.9 million) upon
completion of certain suspensive conditions, the second being ZAR15 million
(CAD1.4 million) due on completion of the registration of Saxendrift farm
in the name of Nelesco and the balance of ZAR10 million (CAD0.95 million)
upon completion of and consents to assign certain contracts, the Section 11
transfer of the mineral properties to the name of Nelesco as well as the
consent of the Takeover Regulation Panel of South Africa. The sale is
expected to be concluded by the end of Januaury 2017, with the initial
tranche received at such time.
The disposal of the sale of the Saxendrift and Remhoogte/Holsloot complex
is not considered to be discontinued operations. Although regarded as a
separate segment, it is not considered to represent a separate line of
business or geographical area.
Assets held for sale
3 months 9 months
ended ended
30 November 30 November
Amounts in Canadian Dollars ('000) 2016 2016
Mineral property interests 10 796 10 796
Property, plant and equipment 3 832 3 832
Rehabilitation deposits 1 061 1 061
15 689 15 689
Liabilities held for sale
Provision for rehabilitation (6 654) (6 654)
Provision for deferred tax (3 368) (3 368)
(10 022) (10 022)
Net book value 5 667 5 667
Indicated impairment of mineral
property interests (1 265) (1 265)
Net proceeds 4 402 4 402
Loss per share
Basic and diluted loss per share
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 November 30 November 30 November 30 November
Dollars ('000) 2016 2016 2015 2015
Basic loss per share
Cents per share (10.00) (10.03) (17.13) (24.37)
Basic loss per share was calculated based on a weighted average number of
ordinary common shares of 54 983 244 for the 9 months ended 30 November 2016
(3 months ended 30 November 2016: 54 983 244) and 54 558 244 for the 9 months
ended30 November 2015 (3 months ended 30 November 2015: 54 558 244).
Reconciliation of loss for the period to basic loss
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 November 30 November 30 November 30 November
Dollars ('000) 2016 2016 2015 2015
Loss for the period (5 496) (5 514) (9 326) (13 360)
Adjusted for:
Loss attributable to non-
controlling interest - - (20) 63
Basic loss attributable to
owners of the Group (5 496) (5 514) (9 346) (13 297)
Diluted loss per share is equal to loss per share because there are no dilutive
potential ordinary shares in issue.
At 30 November 2016 and 30 November 2015 the impact of share-based payment
options were excluded from the weighted average number of shares as the effect
would have been anti-dilutive.
Basic and diluted headline loss per share
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 November 30 November 30 November 30 November
Dollars ('000) 2016 2016 2015 2015
Headline loss per share (cents) (10.01) (10.41) (17.14) (23.77)
Reconciliation between basic loss
and headline loss
Basic loss attributable to owners
of the Group (5 496) (5 514) (9 346) (13 297)
Adjusted for:
Profit on disposal of assets (6) (210) (11) (11)
Loss (profit) on disposal of
mineral property - - 4 (161)
Realized foreign exchange with
sale of subsidiary - - - (1 276)
Loss on sale of subsidiary - - - 1 774
Non-controlling interest portion
of above adjustment - - - -
Headline loss attributable to
owners of the Group (5 502) (5 724) (9 353) (12 971)
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 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 remeasurements.
At 30 November 2016 and 30 November 2015 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;
- Corporate represents the corporate management and administrative function of
the Group; and
- A third segment, North West operation is associated with the mining of
potholes and the recovery of lower value and smaller carat size diamonds
was sold in April 2015.
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 9 months ended 30 November 2016
Amounts in Canadian Northern North Corpo- Recon-
Dollars ('000) Cape West rate ciling Total
Total assets 57 549 - 1 093 - 58 642
Total liabilities (38 444) - (22 961) - (61 405)
External revenue (29 387) - - - (29 387)
Inter segment revenue - - 1 846 - 1 846
(Loss)/profit for the
period (6 578) - 1 064 - (5 514)
For the year ended 29 February 2016
Amounts in Canadian Northern North Corpo- Recon-
Dollars ('000) Cape West rate ciling Total
Total assets 56 394 - 4 504 (2 081) 58 817
Total liabilities (25 523) - (27 406) (2 081) (55 010)
External revenue (46 274) (1 065) - - (47 339)
Inter-segment revenue - - - - -
Loss for the year (18 350) (4 027) (5 304) - (27 681)
For the 9 months ended 30 November 2015
Amounts in Canadian Northern North Corpo- Recon-
Dollars ('000) Cape West rate ciling Total
Total assets 58 243 - 58 817 (46 677) 70 383
Total liabilities 71 637 - 27 854 (46 677) 52 814
External revenue 36 208 1 065 - - 37 273
Loss for the period (5 708) (14) (7 638) - (13 360)
The Group's primary listing is on the TSX and the Group's secondary listing
is on the JSE.
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
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: PriceWaterhouseCoopers
Roylglen Office Park PricewaterhouseCoopers Building
Cnr Welgevonden Avenue and Memorial Road
Kimberley 8301, 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: 17/01/2017 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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