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UNION ATLANTIC MINERAL LIMITED - Union Atlantic Minerals Interim Results

Release Date: 05/11/2018 16:15
Code(s): UAT     PDF:  
 
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Union Atlantic Minerals Interim Results

UNION ATLANTIC MINERALS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1998/001940/06
Share code: UAT
ISIN: ZAE000254314
("Union Atlantic Minerals")

UNAUDITED GROUP INTERIM RESULTS
for the six months ended February 2018

UNION ATLANTIC MINERALS INTERIM RESULTS

COMMENTARY

FINANCIAL POSITION

For the period under review, the net asset value per share of the Union Atlantic Minerals Group ("Union Atlantic or
the Company") decreased by 8.64% from 3.24 cents per share (August 2017) to 2.96 cents per share (February
2018). The net tangible asset value decreased by 133.32% from 0.21 cents per share (August 2017) to 0.07 cents
per share (February 2018).

Shareholders are reminded that, due to the nature of the business of the Company, the trading statements
presented are based on the net asset value per share.

FINANCIAL PERFORMANCE

The Company reported a basic and headline loss of 0.29 cents per share for the six-month period ended
28 February 2018. In the 12 months ending 31 August 2017, the reported headline loss was 1.26 cents per share,
the basic earnings per share was 4.07 cents. In the 12 months ending 31 August 2017 the group had positive
earnings, principally as a consequence of the reversal of the impairment on the Rozynenbosch prospecting right.

2017 TO THE PRESENT

The publication of the Integrated Report for 2017 (which included a completion of the outstanding financial audits
for the 2014, 2015, 2016 and 2017 financial years) was the culmination of work done by executive management
to resolve several outstanding issues which had affected the Company for the years since the voluntary suspension
of the share in September 2014.

The systematic presentation of this information in proper format has clarified for the executive management the
remaining issues which are required to be resolved to complete the restructuring process. There is no doubt that
Union Atlantic finds itself in a stable position which will enable it to move forward with the stated regeneration
strategy of conducting brownfields exploration for base and technology metals, mine development, mining of ores
and production of polymetallic concentrates. Acquisition of projects and application for new prospecting rights
will also be considered. The strategy is more fully described in the Integrated Report of 2017 as published on the
Company's website www.unionatlanticminerals.com.

The process of resolving the remaining issues which have been identified by executive management is well
underway. A project to systematically sift through, evaluate and sort both the hardcopy as well as electronic data
files is currently being undertaken. New information has been recovered which has allowed management to refine,
optimise and restructure the turnaround plan and, as a consequence, to better plan the resources required to bring
the restructuring exercise to a successful conclusion.

This restructuring exercise, launched in February 2017, is now in its final stages. Management has targeted the
first quarter of 2019 to apply to the JSE to re-instate the listing of the Union Atlantic share on the JSE and to
re-finance the Company.

During the period under review, management has specifically dealt with the following:

- Milnex 189 (Pty) Ltd ("Milnex"), a mineral rights consultancy, is together with management reviewing the
  status of the mineral rights held in the remaining subsidiary companies with a view to optimising, focusing and
  renewing the mineral rights portfolio of the Company, and rebuilding the Company database and files. This
  review includes an exercise to recover financial guarantees provided to the Department of Mineral Resources in
  the past on prospecting rights which have either lapsed, been sold or expired;

- Management has noted the positive statements made by the Honourable Minister of Minerals Resources of
  South Africa, Gwede Mantashe, regarding amendments to the Mining Charter and regarding the minerals sector
  in general. As a consequence, applications for additional prospecting rights have been made for lead, copper,
  zinc and silver in the Northern Cape province. The new applications have been made in newly established
  subsidiary companies;

- Development of a strategy to ensure the future sustainability of the Company as a "junior" in the African minerals
  sector, including the creation of subsidiaries in African jurisdictions to enable this strategy is being actively
  pursued, with projects in several African jurisdictions being considered;
- During the project undertaken in August and September 2018 to systematically sort the hardcopy and electronic
  data physically held in storage in box files and on various hard drives, additional geological data was recovered
  relating to the Rozynenbosch asset. The data included inter alia geological field notes, cross section plans,
  drill logs representing several thousand metres of drilling, airborne helicopter geophysical work and notes
  referencing orebody grades. This new data could possibly allow the "gaps" in the previous data set, on which
  the Minxcon Competent Persons' Report of 2018 was completed, to be filled and the known resource to be
  upgraded. The data recovered during this exercise would require substantial capital amounts to recreate in the
  field, and the recovery of this data is a substantial windfall for the Company;

- Minxcon has been mandated to evaluate the additional data for possible inclusion into an updated geological
  model and SAMREC-compliant Competent Persons' Report for Rozynenbosch;

- Minxcon has been mandated to assist management in formulating a development plan, and compiling the
  associated budgets, for additional field work for the Rozynenbosch Project based on the new data recovered;

- The continued compilation by management of internal budgets for the regeneration of the Company, and
  evaluation of additional exploration properties in the Northern Cape province, whether by farm-in, acquisition,
  or new mineral rights application. As stated previously, applications for additional prospecting rights have been
  made for lead, copper, zinc and silver in the Northern Cape. The new applications have been made in newly
  established subsidiary companies;

- The sale of the Company's 73% equity stake in the Sesikhona Klipbrand Colliery Proprietary Limited ("Sesikhona")
  to Osho Resources SA Proprietary Limited ("Osho") for R7.5 million has been partially concluded. Management is
  actively assisting Osho management in the administration of the documents and information required to obtain the
  requisite Section 11 Ministerial Consent in order for the sale of Sesikhona to be finally concluded;

- Post the period under review, an agreement to dispose of the 100% interest in Miranda Coal on a "voetstoots" basis
  to Siafa Resources (Pty) Ltd ("Siafa") for a cash consideration of R8 million (eight million rand), was concluded;

- Negotiations have commenced with certain creditors of the Company whose claims arose during the period
  September 2014 the effective date of the suspension of the share and February 2017 (the initiation of the
  turnaround project and the appointment of new management) with a view to ring fencing the debt and coming
  to commercially sensible agreement terms on payment of the outstanding historic amounts, considering that the
  Company is in a restructuring process.

OUTLOOK

Whilst we expect market and operating conditions in the coming year to remain challenging as sentiment and
policies change, management remain confident that we will be able to deliver on our strategy initiated in
February 2017. We would like to thank our fellow board members and shareholders for their continued support and
look forward to unsuspending the Company share (JSE: UAT) during the first quarter of 2019, and refinancing the
Company in the near future for it to be able to meet the new growth strategy.


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 28 February 2018                                                  28 February 2018           31 August 2017
ASSETS
Non-current assets                                                             40   181   699          40   328   342
Intangible assets                                                              39   000   000          39   000   000
Other financial assets                                                          1   181   699           1   328   342
Current assets                                                                  1   322   421           1   107   512
Other financial assets                                                              105   006               105   006
Trade and other receivables                                                         896   157               649   722
Cash and cash equivalents                                                           321   258               352   784

Non-current assets held for sale and assets
of disposal group                                                               7 241 834               7 276 197
Total assets                                                                   48 745 954              48 712 051
EQUITY AND LIABILITIES
EQUITY
Share capital                                                                 209 586 425             209   586   425
Reserves                                                                                -               1   794   939
Retained income                                                              (171 508 763)           (169   613   333)
Equity attributable to owners of parent                                        38 077 662              41   768   031
Non-controlling interest                                                       (9 212 820)             (9   212   820)
Total shareholders' interest                                                   28 864 842              32   555   211
LIABILITIES
Current liabilities                                                            16 530 644              12 806 082
Loans from shareholders                                                           151 146                 151 146
Other financial liabilities                                                     1 469 553               1 670 460
Trade and other payables                                                       14 909 945              10 983 883
Bank overdraft                                                                          -                     593
Liabilities of disposal group                                                   3 350 468               3 350 758
Total liabilities                                                             19 881 112              16 156 840
Total equity and liabilities                                                  48 745 954              48 712 051
Net asset and net tangible asset value per share
Ordinary shares in issue                                                   1 288 086 443           1 288 086 443
Net asset value per share (cents)                                                   2.96                    3.24
Net tangible asset value per share (cents)                                         (0.07)                   0.21


CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME

                                                                          6 months ended          12 month ended
For the period ended 28 February 2018                                   28 February 2018          31 August 2017
Operating expenses                                                            (3 749 433)             (8 911 921)
Operating loss                                                                (3 749 433)             (8 911 921)
Investment revenue                                                                 8 604                  18 477
Reversal of impairment on mining right                                                 -              42 293 968
Fair value adjustments                                                            54 264                       -
Finance costs                                                                     (1 731)                      -
(Loss)/profit before taxation                                                 (3 688 296)             33 400 524
Taxation                                                                               -                       -
(Loss)/profit from continuing operations                                     ( 3 688 296)             33 400 524
Loss from discontinued operations                                                 (2 073)             (1 098 843)
Total comprehensive (loss)/profit for the year                                (3 690 369)             32 301 681
Total comprehensive (loss)/profit attributable to:
Owners of the parent - continued                                              (3 688 296)             33 400 524
Owners of the parent - discontinued                                               (2 073)             (1 076 334)
Non-controlling interest - continued                                                   -                       -
Non-controlling interest - discontinued                                                -                 (22 509)
Basic and diluted (loss)/earnings per share (cents)                                 (0.29)                  4.07
Headline and diluted headline loss per share (cents)                                (0.29)                 (1.26)
Basic and diluted (loss)/earnings per share - continued (cents)                     (0.29)                  4.21
Headline and diluted headline loss per share - continued (cents)                    (0.29)                 (1.12)
Basic and diluted loss per share - discontinued (cents)                                 -                  (0.14)
Headline and diluted headline loss per share -
discontinued (cents)                                                                       -               (0.14)


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

                                                                           6 months ended         12 month ended
For the period ended 28 February 2018                                    28 February 2018         31 August 2017
Net cash from operating activities                                                (65 006)              (583 669)
Net cash from investing activities                                                 33 676                (14 870)
Net cash from financing activities                                                   (290)               546 865
Total cash movement for the year                                                  (31 620)               (51 674)
Cash at the beginning of the year                                                  36 431                 88 105
Cash disclosed as part of disposal group                                             (552)               (34 915)
Total cash at end of the year                                                       4 259                  1 516
Restricted cash and cash equivalents                                              316 999                350 675


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                                                                    Total attributable
                                                                                                                     to equity holders
                                                                Share       Share based                                   of the Group    Non-controlling            Total
For the period ended 28 February 2018                         capital   payment reserve        Accumulated loss                company           interest           equity
Balance at 1 September 2016                             186   797 593         1 909 382            (202 051 966)           (13 344 991)        (9 190 311)   (22   535 302)
Profit for the year                                                 -                 -              32 324 190             32 324 190            (22 509)    32   301 681
Issue of shares                                         22    788 832                 -                       -             22 788 832                  -     22   788 832
Options lapsed                                                      -          (114 443)                114 443                      -                  -                -
Balance at 31 August 2017                               209   586 425         1 794 939            (169 613 333)            41 768 031         (9 212 820)   32    555 211
Loss for the period                                                 -                 -              (3 690 369)            (3 690 369)                 -    (3    690 369)
Options lapsed                                                      -        (1 794 939)              1 794 939)                     -                  -                -
Balance at 28 February 2018                             209   586 425                 -            (171 508 763)           (38 077 662)        (9 212 820)   (28   864 842)



CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS

For the period ended 28 February 2018                                   28 February 2018          31 August 2017
Segment assets                                                                48 745 954              48 712 051
Segment assets - Coal                                                          7 241 834               7 276 197
Segment   assets - Base metals and industrial minerals                         39    073   030         39    073   623
Segment   assets - Other                                                        2    431   090          2    362   231
Segment   liabilities                                                         (19    881   112)       (16    156   840)
Segment   liabilities - Coal                                                   (3    350   468)        (3    350   758)
Segment   liabilities - Other                                                 (16    530   644)       (12    806   082)
Segment   result                                                                3    690   369        (32    301   681)
Segment   result - Coal                                                         2    084   934          6    698   319
Segment   result - Base metals and industrial minerals                               136   820        (39    000   000)
Segment   result - Other                                                           1 468   615                       -


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the period ended 28 February 2018

1. BASIS OF PREPARATION

The unaudited condensed consolidated interim financial statements for the six months ended 28 February 2018
have been prepared in accordance with the Framework concepts and the recognition and measurement criteria
of International Financial Reporting Standards ("IFRS") and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting
Standards Council, and as a minimum, contains the information required by IAS 34: Interim Financial Reporting and
comply with the Listings Requirements of the JSE Limited and the Companies Act of South Africa, 2008.
No comparative interim financial statements for the six months ended 28 February 2018 have been prepared.

The accounting policies applied in the preparation of these interim financial statements are consistent with those
applied in the annual financial statements for the year ended 31 August 2017.

This report was prepared under the supervision of the Group Financial Director, A M Botha, CA(SA) and has not
been reviewed or audited by the Group's external auditors.

2. LOSS PER SHARE

                                                                                      2018                    2017
Weighted average number of ordinary shares outstanding                       1 288 086 443             793 957 670
Basic and diluted (loss)/earnings per share (cents)                                  (0.29)                   4.07
Headline and diluted headline loss per share (cents)                                 (0.29)                  (1.26)
Basic and diluted loss per share - continued (cents)                                 (0.29)                   4,21
Headline and diluted headline loss per share - continued (cents)                     (0.29)                  (1.12)
Basic and diluted loss per share - discontinued (cents)                                  -                   (0.14)
Headline and diluted headline loss per share - discontinued (cents)                      -                   (0.14)
Reconciliation between earnings (loss)
and headline earnings (loss)
Basic (loss)/earnings                                                              (3 688 296)          33 400 524
Adjusted for:
Reversal of impairment of mining right                                                      -          (39 000 000)
Fair value disposal Group                                                                   -           (3 293 968)
Headline earnings (loss)                                                           (3 688 296)          (8 893 444)

3. EVENTS AFTER THE REPORTING DATE

The Company held its Annual General Meeting on 6 August 2018 and the following transactions as approved by
shareholders have been executed or are being concluded:

CHANGE OF COMPANY NAME

The company's name changed from Miranda Mineral Holdings Limited to Union Atlantic Minerals Limited and the
record date in respect of new name was 31 August 2018.

DISPOSAL OF 100% OF THE SHARES HELD IN MIRANDA COAL (PTY) LTD

All the conditions precedent with respect to the sale of Miranda Coal, have been satisfied and therefore, the
transaction has been implemented on 16 August 2018 and the company received the total consideration of
R8 million.

DISPOSAL OF THE ENTIRE EQUITY INTEREST IN SESIKHONA KLIPBRAND COLLIERY (PTY) LTD

As at the publication of these interim results, Ministerial Consent had not been granted for the disposal of the
Remaining Shares 37 shares (37% interest) in Sesikhona. Management are actively assisting Osho management in
the administration of the documents and information required to obtain the requisite Section 11 Ministerial Consent
for the sale to be finally concluded.

B-BBEE TRANSACTION IN RESPECT OF ROZYNENBOSCH
All the conditions precedent with respect to the B-BBEE Transaction, have been satisfied and therefore, the
transaction has been implemented on 14 August 2018.

4. GOING CONCERN

The Group recorded a comprehensive loss, net of tax of R3 690 369 during the six months ended 28 February
2018 (profit 12 months ended 31 August 2017: R32 301 681). As of 28 February 2018, the Group was in a net
current liability position of R15 208 223 (31 August 2017: net current liability R11 698 570). As at 28 February
2018, the Group is in a net asset position of R38 077 662 (31 August 2017 net asset position of R41 768 031).

The financial statements set out in this report are the responsibility of the directors of the Company. They have been
prepared by the directors on the basis of appropriate accounting policies which have been consistently applied.
The financial statements have been prepared in accordance with International Financial Reporting Standards and
on the basis of accounting policies applicable to going concern. This basis presumes that the realisation of assets
and settlement of liabilities will occur in the ordinary course of business. The Directors do believe that a material
uncertainty exists which may cast significant doubt on the Group ability to continue as a going concern, as it is
dependent on the successful outcome of a number of future events. Therefore, the Group may be unable to realise
its assets and discharge its liabilities in the normal course of business. The most significant of these factors are:

- The successful conclusion of the sale of Sesikhona Kliprand Colliery (Pty) Limited for the total consideration of
  R5 million and a R2.5 million production bonus; and

- Raising an additional R30 million in capital, necessary for developing the Rozynenbosch prospecting right,
  uplifting the suspension of the Union Atlantic Minerals Limited's shares on the JSE and funding continued
  operational expense requirements.

www.unionatlanticminerals.com

Sponsor and Corporate Adviser
River Group

Johannesburg
5 November 2018

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