Wrap Text
Provisional Condensed Consolidated Results for the Year Ended 30 June 2019
Bauba Resources Limited
Incorporated in the Republic of South Africa
(Registration number 1986/004649/06)
JSE share code: BAU
ISIN: ZAE000145686
("Bauba" or "the company" or "the group")
Short form: provisional condensed consolidated results
for the year ended 30 June 2019
Highlights
- Revenue increased by 29,0% to R302,122 million (2018: 234,261 million)
- Basic earnings and headline earnings per share of 4,73 cents, down 53,1%
(2018: 10,09 cents)
- Investment in property, plant and equipment decreased by 14,7% to
R62,215 million (2018: R72,908 million)
- 12-month offtake agreement concluded with an advance R73,500 million as
part-payment received
- Moeijelijk chrome ore spiral wash plant successfully commissioned in
November 2018
- Entered into Foundry Chrome - Commodity Purchase Contract with leading
foundry chrome trader in February 2019
- Community projects completed:
- Water provision project
- Street/high mast lighting
- Morwasi High School renovation
Commentary
Financial and operational review
Bauba's performance for the financial year was adversely impacted by
administrative delays by the Department of Water and Sanitation (DWS) in
processing an amended water use licence application and by the Department of
Mineral Resources (DMR) in approving amendments to Moeijelijk's environmental
authorisation in terms of section 102 of the Mineral and Petroleum Resources
Development Act. This resulted in a loss of two months opencast production
and three months of wash plant concentrate sales in the first half of the
current period.
The wash plant only commenced full shift production from 1 November 2018 and
operated for two-thirds of a month in December 2018 due to the festive season.
During November and December 2018, the wash plant was still in the "ramp-up"
phase and produced approximately 29 000 tonnes of chrome concentrate.
As a result of these delays, a loss attributable to equity holders of the parent
of R9,666 million (loss per share of 2,55 cents) was incurred in the first half
of the financial year.
The chrome ore market was weak during the financial period, with chrome ore
prices for 44% metallurgical concentrate averaging US$187 CIF per tonne as
published by FerroAlloyNet, compared to US$222 CIF per tonne in the prior year.
The above factors, together with a higher volume of lower grade underground
development tonnes being processed through our wash plant, negatively impacted
our gross profit margin, which decreased from 65,2% in the prior financial
period to 37,0%. The lower grades and consequently lower wash plant yields are
expected to continue until April 2020, when the proportion of stoping material
to development material improves.
Despite the challenges noted, revenue of R211,759 million was realised during
the six-month period ended 30 June 2019, aided by the Foundry Chrome - Commodity
Purchase Contract entered into in February 2019. In addition, we continued to
invest in our underground operations to ensure a sustainable future for Bauba,
investing R62,215 million in property, plant and equipment.
Outlook
In line with our vision of being an expanding and diversifying mining company,
in June 2019 Bauba reported that the DMR accepted the group's application for
a prospecting right in respect of chrome and platinum group metals (PGMs) over
the farm Hartebeesfontein 445JQ situated in the Brits area of South Africa's
North West Province, and that the prospecting right was expected to be granted
imminently.
Furthermore, Bauba reported in July 2019, that it had entered into a Sale of
Shares and Claims Agreement with Ms DC Butler to acquire her shares in Nuco
Chrome Bophuthatswana Proprietary Limited (Nuco). Bauba is currently finalising
our due diligence investigation before a decision is made whether to proceed with
this acquisition. Nuco is the holder of various chrome and PGM mineral rights in
the Rustenburg area of South Africa's North West Province.
Global market uncertainties, driven by increasing international trade conflicts
and the possible Brexit date approaching, will continue to have a negative impact
on short-term chrome ore pricing. This, together with higher local supply chain
costs, will keep Bauba's chrome ore revenue generated per tonne subdued. Bauba is,
however, optimistic that its future profit margins will be cushioned by the
continued sales of premium speciality chrome ore concentrates.
Changes to the board
On 8 February 2019, Ms Thabile Makgala was appointed as an independent
non-executive director. Thabile holds a Bachelor of Science in Mining Engineering
from the University of the Witwatersrand as well as a Master of Business
Administration from the University of Stellenbosch Business School. She has
dedicated almost two decades of service to the Mining Industry. Her diverse
professional experience includes general management, strategy, business
development and business planning.
Short-form announcement
This short-form announcement is the responsibility of the directors and is only a
summary of the information in the full announcement. The full announcement is
available at https://senspdf.jse.co.za/documents/2019/JSE/ISSE/BAU/YE19.pdf and
can be found on the company's website www.bauba.co.za.
This short-form does not contain the complete or full announcement details.
Any investment decision should be based on consideration of the full announcement,
copies of which are available for inspection at no charge from Monday to Friday,
during office hours, at the company's registered office and the office of the
sponsor.
Board of Directors
NPJ van der Hoven# (Chairman), M Luyt*, SM Dolamo*, DS Smith*, Dr NM Phosa#,
King TV Thulare (Alternate), Ms T Makgala*, NW van der Hoven, JA Knowlden
#Non-executive *Independent non-executive
Sponsor
Merchantec Capital
13th Floor, Illovo Point, 68 Melville Road, Illovo, Sandton, 2196
(PO Box 41480, Craighall, 2024)
Registered Office
Cube Workspace, 1 Wedgewood Link, Bryanston, Johannesburg, 2191,
South Africa
(PO Box 1658, Witkoppen, 2068)
Company Secretary
Merchantec Proprietary Limited
Transfer Secretaries
Computershare Investor Services Proprietary Limited,
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)
Auditors
BDO South Africa Incorporated
22 Wellington Road, Parktown, 2193
Date: 18/09/2019 04:55:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
