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UNION ATLANTIC MINERALS LIMITED - Unaudited Group Interim Results for the Six Months Ended 28 February 2019

Release Date: 12/07/2019 10:45
Code(s): UAT     PDF:  
 
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Unaudited Group Interim Results for the Six Months Ended 28 February 2019

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 2019

COMMENTARY

FINANCIAL POSITION

For the period under review, the net asset value per share of the Union Atlantic Minerals Group ("Union Atlantic Minerals or
the Company") decreased by 17.23% from 2.96 cents per share (February 2018) to 2.45 cents per share (February 2019).
The net tangible asset value decreased by 728.57% from (0.07) cents per share (February 2018) to (0.58) cents per share
(February 2019).

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 0.22 cents per share for the six-month period ended 28 February 2019.
In the six months ending 28 February 2018, the reported basic and headline loss was 0.29 cents per share.


2017 TO THE PRESENT

The publication of the Integrated Report for 2018 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 require to be resolved to complete the restructuring process. There is no doubt that Union Atlantic Minerals 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 2018 as published on the Company website www.unionatlanticminerals.com.


OUTLOOK

While we expect market and operating conditions in the coming year to remain challenging as sentiment and policies change,
management remains 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) in the coming months 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 2019                                                                 28 February 2019        28 February 2018
ASSETS
Non-current assets                                                                           39,781,976              40,181,699
Intangible assets                                                                            39,000,000              39,000,000
Other financial assets                                                                          781,976               1,181,699
Current assets                                                                                2,249,052               1,322,421
Other financial assets                                                                          105,006                 105,006
Trade and other receivables                                                                      69,309                 896,157
Cash and cash equivalents                                                                     2,074,737                 321,258
Non-current assets held for sale and assets of disposal group                                         -               7,241,834
Total assets                                                                                 42,031,028              48,745,954
EQUITY AND LIABILITIES
EQUITY
Share capital                                                                               209,586,425             209,586,425
Retained income                                                                            (178,080,605)           (171,508,763)
Equity attributable to owners of parent                                                      31,505,820              38,077,662
Non-controlling interest                                                                       (138,258)             (9,212,820)
Total shareholders' interest                                                                 31,367,562              28,864,842
LIABILITIES
Current liabilities                                                                          10,663,466              16,530,644
Loans to/from shareholders                                                                            -                 151,146
Other financial liabilities                                                                     1,405,553               1,469,553
Trade and other payables                                                                        9,257,913              14,909,945
Liabilities of disposal group                                                                           -               3,350,468
Total liabilities                                                                              10,663,466              19,881,112
Total equity and liabilities                                                                   42,031,028              48,745,954
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)                                                                    2.45                    2.96
Net tangible asset value per share (cents)                                                          (0.58)                  (0,07)


CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME

                                                                                            6 months ended          6 months ended
For the period ended 28 February 2019                                                     28 February 2019        28 February 2018
Operating expenses                                                                              (2,871,747)             (3,749,433)
Operating loss                                                                                  (2,871,747)             (3,749,433)
Investment revenue                                                                                  48,288                   8,604
Fair value adjustments                                                                              41,124                  54,264
Finance costs                                                                                            -                  (1,731)
(Loss)/profit before taxation                                                                   (2,782,335)             (3,688,296)
Taxation                                                                                                 -                       -
(Loss)/profit from continuing operations                                                        (2,782,335)             (3,688,296)
Loss from discontinued operations                                                                        -                  (2,073)
Total comprehensive (loss)/profit for the year                                                  (2,782,335)             (3,690,369)
Total comprehensive (loss)/profit attributable to:
Owners of the parent - continued                                                                (2 782 335)             (3,688,296)
Owners of the parent - discontinued                                                                      -                  (2,073)
Non-controlling interest - continued                                                                     -                       -
Non-controlling interest - discontinued                                                                  -                       -
Basic and diluted (loss)/earnings per share (cents)                                                  (0.22)                  (0.29)
Headline and diluted headline loss per share (cents)                                                 (0.22)                  (0.29)
Basic and diluted (loss)/earnings per share - continued (cents)                                      (0.22)                  (0.29)
Headline and diluted headline loss per share - continued (cents)                                     (0.22)                  (0.29)
Basic and diluted loss per share - discontinued (cents)                                                  -                       -
Headline and diluted headline loss per share - discontinued (cents)                                      -                       -


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
                                                                                            6 months ended         6 months ended
For the period ended 28 February 2019                                                     28 February 2019       28 February 2018
Net cash from operating activities                                                              (4,161,185)               (65,006)
Net cash from investing activities                                                               2,916,650                 33,676
Net cash from financing activities                                                                 (64,000)                  (290)
Total cash movement for the period                                                              (1,260,247)               (31,620)
Cash at the beginning of the period                                                              3,017,987                 36,431
Cash disclosed as part of disposal group                                                                 -                   (552)
Total cash at end of the period                                                                  1,757,740                  4,259
Restricted cash and cash equivalents                                                               316,999                316,999


CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS

For the   period ended 28 February 2019                                                   28 February 2019       28 February 2018
Segment   assets                                                                                42,031,024             48,745,954
Segment   assets - Coal                                                                                  -              7,241,834
Segment   assets - Base metals and industrial minerals                                          39,073,030             39,073,030
Segment   assets - Other                                                                         2,957,994              2,431,090
Segment   liabilities                                                                          (10,663,466)           (19,881,112)
Segment   liabilities - Coal                                                                             -             (3,350,468)
Segment   liabilities - Other                                                                  (10,663,466)           (16,530,644)

Segment   result                                                                                 2,782,336              3,690,369
Segment   result - Coal                                                                                  -              2,084,934
Segment   result - Base metals and industrial minerals                                                   -                136,820
Segment   result - Other                                                                         2,782,336              1,468,615



CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                                                               Total attributable to
For the period ended                                           Share       Share based                         equity holders of the    Non-controlling         Total
28 February 2019                                             capital   payment reserve     Accumulated loss            Group company           interest        equity
Balance at 1 September 2017                              209,586,425         1,794,939         (169,613,333)              41,768,031         (9,212,820)   32,555,211
Loss for the year                                                  -                 -           (7,479,876)              (7,479,876)                 -    (7,479,876)
Options lapsed                                                     -        (1,794,939)           1,794,939                        -                  -            -
Disposal of subsidiary                                          -                  -                    -                        -    9,074,562     9,074,562
Balance at 31 August 2018                             209,586,425                  -          (175,298,270)             34,288,155     (138,258)   34,149,897
Loss for the period                                             -                  -            (2,782,335)             (2,782,335)           -    (2,782,335)
Balance at 28 February 2019                           209,586,425                  -          (178,080,605)             31,505,820     (138,258)   31,367,562


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 FEBRUARY 2019

1. BASIS OF PREPARATION

The unaudited condensed consolidated interim financial statements for the six months ended 28 February 2019 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.

The accounting policies applied in the preparation of these interim financial statements are consistent with those applied in
the interim financial statements for the period ended 28 February 2018.

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

2. LOSS PER SHARE

                                                                                                    2019                     2018
Weighted average number of ordinary shares outstanding                                     1,288,086,443            1,288,086,443
Basic and diluted (loss)/earnings per share (cents)                                                (0.22)                   (0.29)
Headline and diluted headline loss per share (cents)                                               (0.22)                   (0.29)
Basic and diluted loss per share - continued (cents)                                               (0.22)                   (0.29)
Headline and diluted headline loss per share - continued (cents)                                   (0.22)                   (0.29)
Basic and diluted loss per share - discontinued (cents)                                                -                        -
Headline and diluted headline loss per share - discontinued (cents)                                    -                        -

Reconciliation between basic loss and headline loss
Basic and headline loss                                                                       (2,782,336)             (3,688,296)

3. SIGNIFICANT EVENTS AFTER THE REPORTING DATE

ROZYNENBOSCH - RIGHT TO SILVER

It has come to the attention of the Company's management that the prospecting rights for gold and silver at Rozynenbosch
have been awarded to an unknown third party. Management has advised the DMR that the award for silver is contrary to
the documents filed by the Company, which have always included silver in its prospecting rights applications, and that due
process and consultation was not followed by the third party.

Management originally acquired various prospecting rights including silver, under the old order prospecting rights. Upon
conversion into the new order prospecting rights, silver was not included as a material right in the new order prospecting
right awarded. Management has in the past, submitted applications and appeals to the DMR to amend their prospecting
right to include the silver right as management believes that the Rozynenbosch prospecting right documentation
erroneously omitted silver from the new order prospecting right and that administrative issues had to be rectified by the
DMR. The historic content of the documentation between the Company and the DMR reflect silver as being part of the
Rozynenbosch right and therefore management has taken steps to have the awarding of the silver right to a third party
set aside.

Management has directed the appropriate appeals to the DMR and has taken legal steps to ameliorate the risk and to
secure the rights of the Company. Management is confident of a positive resolution and has valued the Rozynenbosch
prospecting right as at 28 February 2019, including the silver right as per the competent persons report published in
2018. Management has valued the right including silver because management believes that they are entitled to the rights
and that administrative issues will be duly resolved. Should an unfavourable outcome result from the appeal to the DMR,
management may take legal steps to recover the value of the silver right through compensation for exploration of the silver
on behalf of the third party on the Rozynenbosch property. The full effects of the exclusion of silver, on the basis that it will
not be mined specifically by any party, can be obtained in the competent persons report.

4. GOING CONCERN

The Group recorded a comprehensive loss, net of tax of R2,782,336 during the 6 months ended 28 February 2019
(6 months ended 28 February 2018: R3,688,296). As of 28 February 2019, the Group was in a net current liability position
of R8,414,414 (28 February 2018: R15,208,223). As at 28 February 2019, the Group was in a net asset position of
R31,505,820 (28 February 2018: R38,077,662).

The Group currently does not generate revenue and is in the final stage of a restructuring process. The Company currently
remains suspended on the JSE. In line with the revised strategy, the Group will pursue brownfields projects in known
mineral producing areas. The initial area of focus will include projects in proximity to the Rozynenbosch project in the
Northern Cape province and will be expanded to other jurisdictions in due course. In respect of the planned development
of the Rozynenbosch project and as disclosed in Significant events after reporting date, it has come to the attention of
the Company's management that during September 2018, the DMR awarded the gold and silver prospecting rights at
Rozynenbosch to another party unrelated to Union Atlantic Minerals.

The directors believe that the conditions above indicate the existence of a material uncertainty which may cast significant
doubt on the Group's ability to continue as a going concern and therefore may be unable to realise its assets and discharge
its liabilities in the normal course of business as it is dependent on the successful outcome of future events which are
discussed below.

The most significant aspects of management's plans to deal with the uncertainty include:
- Raising an additional R30 million in capital, necessary for developing the Rozynenbosch prospecting right
- With reference to Significant events after reporting date, management has advised the DMR that the award for silver is
  contrary to the documents filed by the Company which have always included silver in its prospecting rights applications.
  Management has directed the appropriate appeals to the DMR and has taken legal steps to ameliorate the risk and
  secure the rights of the Company. Management is confident of a positive resolution and has valued the Rozynenbosch
  prospecting right as at 28 February 2019, including the silver right as per the competent persons report published in
  2018. Management has valued the right including silver because management believes that they are entitled to the
  rights and that administrative issues will be duly resolved
- Uplifting the suspension of the Union Atlantic Minerals Limited shares on the JSE
- Funding continued operational expense requirements

The summarised financial statements set out in this report are the responsibility of the Company's directors. 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 IFRS and on the basis of accounting policies applicable
to going concern. IFRS was considered most appropriate as the Group and Company do not intend on liquidating or ceasing
to trade. This basis presumes that funds will be available to fund future operations and that the realisation of assets and
settlement of liabilities will occur in the ordinary course of business.

Johannesburg
12 July 2019

SPONSOR AND CORPORATE ADVISER                              MEDIA AND INVESTOR RELATIONS
River Group                                                James Duncan, R&A Strategic Communications
                                                           james@rasc.co.za, +27 11 880 3924

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