Wrap Text
Reviewed Condensed Consolidated Interim Financial Statements For The Six Months Ended 31 August 2023
Mantengu Mining Limited
Incorporated in the Republic of South Africa
(Registration number 1987/004821/06)
Share Code: MTU
ISIN Code: ZAE000320347
("Mantengu" or "the Company" or "the Group")
REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE
SIX MONTHS ENDED 31 AUGUST 2023 ("RESULTS" or "INTERIM FINANCIAL
RESULTS")
The board of directors of the Group ("the Board") hereby present the
Condensed Consolidated Interim Financial Results for the six months
ended 31 August 2023.
CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Restated Audited
Reviewed Reviewed 12-months
6-months ended 6-months ended ended 28 Feb
31 Aug 2023 31 Aug 2022 2023
R'000 R'000 R'000
Revenue 13 087 330 4 492
Cost of Sales (11 617) (315) (5 503)
Gross (Loss)/Profit 1 470 15 (1 011)
Other Income 2 257 2 558 5 617
Administration
expenses (6 781) (3 363) (9 395)
Depreciation (2 357) (50) (243)
Directors'
Remuneration (2 774) (2 103) (3 478)
Employee benefits (1 119) (465) (240)
Other operating
expenses (6 096) (1 602) (7 041)
Operating Loss (15 400) (5 010) (15 791)
Finance Costs (12 736) (2 423) (6 311)
Loss before Taxation (28 136) (7 433) (22 102)
Taxation 12 103 - 5 196
Loss for the period (16 033) (7 433) (16 906)
Other Comprehensive
Income - - -
Total Comprehensive
loss for the period (16 033) (7 433) (16 906)
Basic (loss) per share (10) (5) (12)
(cents)
Diluted basic (loss)per share (10) (5) (12)
(cents)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST
2023
Restated Restated
Reviewed Reviewed Audited
31 Aug 31 Aug 28 Feb
2023 2022 2023
R'000 R'000 R'000
ASSETS
Non-Current Assets
Property, plant, and
equipment 240 365 147 533 202 171
Right-of-use assets 7 672 - 8 083
Goodwill 39 195 39 195 39 195
Environmental
rehabilitation funds - 1 158 854
287 232 187 886 250 303
Current Assets
Inventories 17 399 - -
Trade and other receivables 7 937 2 196 9 258
Prepayments 4 904 - 4 899
Cash and cash equivalents 85 56 17 976
30 325 2 252 32 133
Total Assets 317 557 190 138 282 436
EQUITY AND LIABILITIES
Equity
Share capital 99 970 79 008 99 189
Accumulated loss (36 506) (13 040) (20 473)
63 464 65 968 78 716
Liabilities
Non-Current Liabilities
Other financial liabilities 96 390 26 340 77 368
Lease liability 7 868 - 8 053
Deferred taxation 17 788 35 087 29 891
122 046 61 427 115 312
Current Liabilities
Trade and other payables 48 217 26 376 17 600
Other financial liabilities 83 007 35 513 69 254
Lease liability 50 - 41
Current taxation 625 854 1 513
Bank overdraft 148 - -
132 047 62 743 88 408
Total Liabilities 254 093 124 170 203 720
Total Equity and
Liabilities 317 557 190 138 282 436
CONDENSED STATEMENT OF CHANGES IN EQUITY
Group Share Accumulated Total
capital loss equity
R'000 R'000 R'000
Balance at 1 March 2022 50 320 (3 567) 46 753
Loss for the year - (9 473) (9 473)
Issue of shares 28 688 - 28 688
Total comprehensive loss for the period - (9 473) (9 473)
Balance at 31 August 2022 79 008 (13 040) 65 968
Loss for the period - (7 433) (7 433)
Acquisition of Langpan 5 181 - 5 181
Rights issue 15 000 - 15 000
Balance at 28 February 2023 99 189 (20 473) 78 716
Loss for the period - (16 033) (16 033)
Total comprehensive loss for the period - (16 033) (16 033)
Issue of Shares 780 - 780
Balance at 31 August 2023 99 970 (36 506) 63 464
CONDENSED STATEMENT OF CASH FLOWS
Reviewed Reviewed Audited
6-months 6-months 12-months
ended ended ended
31 Aug 31 Aug 28 Feb
2023 2022 2023
R'000 R'000 R'000
Cash flows from operating
activities (5 475) (4 735) (29 820)
Cash flows from investing
activities (31 916) (31) (21 869)
Cash flows from financing
activities 19 352 4 792 69 472
Total cash movement for the
period (18 039) 26 17 783
Cash and cash equivalents at
the beginning of the period
17 976 - 192
Cash and cash equivalents
acquired on reverse
acquisition - - 1
Business Combination
- 30 -
Total Cash and cash
equivalents at end of the
period (63) 56 17 976
COMMENTARY
1. BASIS OF PREPARATION
The reviewed condensed consolidated interim financial statements
are prepared in accordance with the requirements of the JSE Limited
Listings Requirements and the requirements of the Companies Act,
2008 (Act 71 of 2008), as amended. The Listings Requirements
require condensed financial statements to be prepared in
accordance with the framework concepts and all the measurement and
recognition requirements of International Financial Reporting
Standards (IFRS) and Financial Pronouncements as issued by
Financial Reporting Standards Council and the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee
and as a minimum contain the information required by IAS 34 Interim
Financial Reporting.
The preparation of the Mantengu Mining Limited Group reviewed
condensed consolidated interim financial statements for the six
months ended 31 August 2023 was supervised by the Chief Financial
Officer, Mr M Naidoo CA(SA).
2. INTERIM FINANCIAL RESULTS AND FUTURE PROSPECTS
At the beginning of the interim period and up to the end of May
2023, Langpan Mining Co Proprietary Limited ("Langpan") was still
in a preproduction phase. First deliveries of chrome concentrate
to RWE Supply and Trading GMBH ("RWE") commenced on 7 June 2023.
As at 31 August 2023, revenue consisted of 4 757 tonnes of chrome
concentrate. After the half year end and to the date of approval
of these interim financial statements, Langpan has dispatched a
further 8 132 metric tonnes of chrome concentrate evidencing the
significant ramp up of production. Production continues to ramp up
monthly and will be boosted significantly by the commissioning of
a brand-new MG Chrome Processing Plant at Langpan during the first
quarter of calendar 2024.
Operating expenditure was negatively impacted by significantly
higher energy costs and continued inflationary pressures stemming
from high interest rates in the macroeconomic environment. The
working capital cycle was also negatively impacted by continuous
logistical delays in the transport of chrome concentrate from
Langpan to the Durban Port. The significant and continual decay of
South Africa's rail system and network has only served to
exacerbate logistical challenges on the country's roads.
Langpan is currently Mantengu's sole operating asset. Mantengu
being a resource investment company is constantly exploring new
mining opportunities and evaluating strategic acquisitions that we
believe will enhance long term shareholder returns. The Board are
continuously looking for strategic acquisitions and will announce
these as and when they are concluded.
The Board's immediate priority is the completion of the build of
the new MG Chrome Processing Plant at Langpan and the continued
ramp up of production in a sustainable manner. The Board strongly
believes in operational excellence and will not hesitate to make
changes to ensure that Langpan's operations at all times are
aligned with Mantengu's vision, strategy and corporate governance
with the ultimate aim of providing shareholders with the best long
term returns.
Mantengu has demonstrated its resilience in navigating some of the
most challenging market conditions during the start up of
operations and is well positioned to continue its growth journey.
3. INVENTORIES
Reviewed Reviewed Audited
6-months 6-months 12-months
ended ended ended
31 Aug 31 Aug 28 Feb
2023 2022 2023
Raw materials 6 545 - -
Work in progress 5 908 - -
Finished goods 4 946 - -
17 399 - -
OTHER FINANCIAL LIABILITIES
Held at amortised cost.
Reviewed Reviewed Audited
6-months 6-months 12-months
ended ended ended
31 Aug 31 Aug 28 Feb
2023 2022 2023
RWE 66 071 - 64 435
IDC 42 228 - 39 513
Trade finance 27 343 5 702 -
Other 43 755 56 151 42 644
179 397 61 853 146 622
Current 83 007 35 513 69 254
Non current 96 390 26 340 77 368
179 397 61 853 146 622
RWE Supply
The Group entered into a contract with RWE to deliver 240 000
metric tonnes of chrome concentrate over a period of 2 years. The
amount bears interest at the secured overnight financing rate plus
5% and is repayable over the duration of 2 years beginning 1 July
2023.
IDC loan
The loan with the IDC is secured by the assets that formed part of
agreement. Legal title to these assets remains with the IDC until
paid off by Langpan. The loan bears interest at prime plus 2.8%.
The loan is repayable in monthly instalments over the 5-year period
which commenced late in calendar 2022.
4. EARNINGS AND HEADLINE EARNINGS PER SHARE
Reviewed Reviewed Audited
31 Aug 31 Aug 28 Feb
2023 2022 2023
Earnings
Net loss attributable to ordinary (16 033 180) (7 434 350) (16 905 722)
shareholders
Number of shares
Number of shares in issue at beginning of 153 362 856 902 137 500 000 000 55 753 424 658
period
Numbers of shares issued for acquisition of - 27 218 961 266 82 259 678 144
Langpan
Number of shares cancelled - - (196 500)
Number of shares issued - Rights issue - - 3 452 054 864
153 362 856 902 164 718 961 266 141 464 961 166
Adjusted for the effect of 1 000: 1 share 153 362 857 164 718 961 141 464 961
consolidation
Number of share issued - Performance share 125 087 - -
awards
Weighted average number of shares in issue 153 487 944 164 718 961 141 464 961
Basic loss per share (cents) (10) (5) (12)
Diluted basic loss per share cents (10) (5) (12)
Headline loss and diluted loss per share (10) (5) (12)
cents
5. REVENUE
Reviewed Reviewed Audited
6-months 6-months 12-months
ended ended ended
31 Aug 31 Aug 28 Feb
2023 2022 2023
Sale of Chrome 13 087 - -
Other ad hoc - 330 4 492
13 087 330 4 492
At the end of May 2023, the Board announced the successful
commissioning of the Langpan LG Chrome Processing Plant. First
deliveries of chrome concentrate to RWE (Langpan's sole contracted
off taker) commenced on 7 June 2023. The risks and rewards of
ownership of the chrome concentrate pass to RWE upon collection at
Langpan.
As at 31 August 2023, the sale of chrome concentrate consisted of
4 757 tonnes. Langpan is in the process of ramping up production to
steady state levels. Production continues to increase monthly and
subsequent to 31 August 2023, and to the date of these interim
financial statements, Langpan has dispatched 8 132 tonnes of chrome
concentrate.
6. RESTATEMENT
The February 2023 numbers have been restated because the mineral
reserve disclosed as a category of property, plant, and equipment of
R94 865 012 was recorded net of deferred taxation. The mineral reserve
should have been recorded at R129 952 071 with a corresponding
deferred taxation liability of R35 087 059. The error arose in prior
years on the purchase price allocation relative to Langpan's
acquisition of Memor Mining Proprietary Limited ("Memor").
Accordingly, both property, plant and equipment and deferred taxation
have been restated in the statement of financial position.
The August 2022 interim numbers have been restated for the following:
• The mineral reserve was not disclosed as a category of property,
plant, and equipment and rather as a separate line item on the
statement of financial position together with the value of
R94 865 012 being recorded net of deferred taxation. The mineral
reserve should have been recorded at R129 952 071 as a category of
property, plant, and equipment with a corresponding deferred
taxation liability of R35 087 059. The error arose in prior years
on the purchase price allocation relative to Langpan's acquisition
of Memor. Accordingly, both property, plant and equipment and
deferred taxation have been restated in the statement of financial
position with no value being disclosed as a mineral reserve as a
separate line item on the statement of financial position.
• Goodwill has been restated to R39.2 million from R37.3 million.
The error arose from an incorrect purchase price allocation during
Mantengu's acquisition of Langpan which was accounted for as a
reverse takeover.
• Certain line items on the Statement of Profit or Loss and Other
Comprehensive Income have been reallocated. The previous disclosure
did not comply with IAS 34 Interim Financial Reporting.
Management have chosen not to present the statement of financial
position for 3 years as sufficient information is presented in this
note to enable the users of financial statements to make informed
decisions.
The restatement affected the following line items of the financial
statements:
31 Aug 2022 - R'000
Statement of Financial Position As reported Restated Change
Property, plant, and equipment 17 581 147 533 (129 952)
Goodwill 37 285 39 195 (1 910)
Exploration for and evaluation of 94 865 - 94 865
mineral resources
Share Capital 82 316 79 008 3 308
Accumulated loss (15 362) (13 040) (2 322)
Deferred tax - 35 087 (35 087)
Trade and other payables 23 480 26 376 (2 896)
28 Feb 2023 - R'000
Statement of Financial Position As reported Restated Change
Property, plant, and equipment 167 084 202 171 (35 087)
Deferred taxation asset 5 196 - 5 196
Deferred taxation liability - 29 891 (29 891)
7. COMMITMENTS
On 14 April 2022, the Group entered into a contract with RWE to
deliver 240 000 metric tonnes of chrome over a period of 2 years,
commencing on 1 July 2023. During September 2023, the Group signed
an amendment to this contract increasing its delivery obligation over
the same period to 270 000 metric tonnes.
The only other commitment outstanding at the date of approval of these
interim financial statements relates to approximately R20 million
that is required to be incurred to complete the capitalisation of the
Langpan mining and processing operation.
8. GOING CONCERN
The financial position of the Group, its cash flows, liquidity
position and borrowing facilities are set out in the Group's reviewed
condensed consolidated interim financial statements for the six
months ended 31 August 2023. The Board has considered the Group's
cash flow forecast for the period to the end of 29 February 2024 under
the wider macroeconomic environment and the Group's operations. The
Board is satisfied that the Group's forecasts and projections,
indicate that the Group has sufficient resources and access to
resources to continue to operate as a going concern. The Group has
access to multiple funding lines and recently concluded a share
subscription facility agreement with GEM Global Yield LLC SCS and GEM
Yield Bahamas Limited for R500 million, as announced on SENS on
26 October 2023. Accordingly, the Board believes that it is
appropriate to prepare the results on a going concern basis.
9. EVENTS AFTER THE REPORTING PERIOD
On 15 September 2023, the group's 100% held subsidiary Langpan entered
into an amendment to the Chrome Marketing Contract with RWE where
Langpan drew down $1 160 000 of a prepayment facility to expedite the
completion of the build of the MG Chrome processing plant. Langpan
committed to increasing its delivery obligations to RWE by 30 000
metric tonnes to a total of 270 000 metric tonnes because of this
amendment. Langpan executed a special and general notarial bond to
the value of $6 million over its assets to secure its indebtedness
to RWE.
On 25 October 2023, the group concluded a share subscription facility
agreement with GEM Global Yield LLC SCS ("the Investor") and GEM Yield
Bahamas Limited ("GYBL") for R500 million. In terms of the Agreement,
the Investor will make available to Mantengu a share subscription
facility of up to a maximum of R500 million ("the Facility") pursuant
to which Mantengu will (i) be entitled to draw down from the Facility
against the issuance to the Investor of ordinary shares in Mantengu
("Ordinary Shares") ("Consideration Shares"); (ii) issue warrants to
the Investor ("Warrants") to subscribe for up to 20 million Ordinary
Shares ("Warrant Shares"); (iii) pay GYBL a commitment fee in an
amount of R10 million, which fee will be payable in cash or Ordinary
Shares ("Commitment Fee Shares"), or a combination of both; and (iv)
issue a promissory note in favour of GYBL in relation to such
commitment fee ("Promissory Note") ("Proposed Transaction"). For the
avoidance of doubt, the Facility is not a debt facility as there are
no repayment obligations on Mantengu. Rather, it is a commitment by
the Investor to subscribe for equity in Mantengu of up to a maximum
value of R500 million against the delivery of subscription notices
by Mantengu to the Investor, and the issue of Consideration Shares
to the Investor by Mantengu during the "Commitment Period", being the
period of three years from the Signature Date, such that Mantengu
controls the timing and amount of any draw down under the Facility.
The proceeds of the subscription monies from the issue of the
Consideration Shares and the Warrants will be used by Mantengu
primarily for working capital and capital expenditure purposes.
10. DIVIDENDS
No dividend was declared for the interim financial period ended
31 August 2023 (31 August 2022: Nil).
11. CHANGES TO THE BOARD
There have been no further changes to the Board other than those
disclosed in the Group's consolidated financial statements for the
year ended 28 February 2023.
12. AUDITOR REVIEW CONCLUSION
The condensed consolidated interim financial statements for the six
months ended 31 August 2023 have been reviewed by the Company's
auditor, HLB CMA South Africa Inc. ("HLB"), who expressed an
unmodified conclusion thereon.
A copy of the review conclusion on the condensed consolidated interim
financial statements for the six months ended 31 August 2023 is
available for inspection at the Company's registered office, together
with the interim financial statements identified in the report.
HLB's unmodified review conclusion does not necessarily report on all
of the information contained in this Results announcement.
Shareholders are therefore advised that in order to obtain a full
understanding of the nature of HLB's engagement, they should obtain
a copy of HLB's unmodified review conclusion together with the
accompanying financial information, which is available at the
Company's registered office and on Mantengu's website at:
www.mantengu.com.
No forward looking statements in this announcement have been reviewed
or reported on by the Company's auditor.
13. RESERVES AND MINERAL RESOURCES
There were no material changes to the reserves and mineral resources
as disclosed in the latest Competent Person's Report available on
Mantengu's website at http://www.mantengu.com/cpr.
14. Important Information
This short-form announcement is the responsibility of the Board and
is only a summary of the information contained in the full
announcement.
Any investment decisions by investors and/or shareholders should be
based on consideration of the full announcement as a whole, which is
available at:
https://senspdf.jse.co.za/documents/2023/jse/isse/mtue/interims23.pdf
and the Group's website at https://www.mantengu.com/investor-
relations.
Johannesburg
29 November 2023
Designated Advisor
Merchantec Capital
CORPORATE INFORMATION
Postal address: POSTNET Suite 446, Private Bag X21,
Bryanston,2021
Registered and Physical address: 5 Saint Michael's Lane,
Bryanston, Gauteng, 2021
Web: www.mantengu.com
Board of Directors: MJ Miller (CEO), M Naidoo (CFO), A Collins#
(Chairman), V Madlela*, Jonas Tshikundamalema*.
(#Non-Executive, *Independent Non-Executive)
Company Secretary: Neil Esterhuysen & Associates Inc
Transfer Secretaries: Computershare Investor Services
Proprietary Limited, Rosebank Towers, 15 Biermann Avenue,
Rosebank, 2196, PO Box 61763, Marshalltown 2107
Auditor: HLB CMA South Africa Inc.
Date: 29-11-2023 12:06:00
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
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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,
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