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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Baobab Res. | LSE:BAO | London | Ordinary Share | GB00B19HQ991 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMBAO
RNS Number : 5235A
Baobab Resources PLC
23 December 2014
BAOBAB RESOURCES PLC
FINAL RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2014
23 DECEMBER 2014
Baobab Resources plc (AIM: BAO) ('Baobab' or the 'Company') is pleased to announce its final results for the 12 months ended 30 June 2014.
The Company's Annual Report, along with copies of the Notice of Annual General Meeting for 30 June 2014 is available on the Company's website www.baobabresources.com.
Highlights
-- Delivery of measured resource spanning the first 25 years of mine life;
-- A 25 year mining concession was granted by the Minister of Mines during December 2014 with the mining contract expected to be completed before end of December 2014;
-- Confirmation of the pre-feasibility rotary kiln and smelting flow sheet through metallurgical pilot scale and bench scale test work at FLSmidt and Mintek laboratories respectively;
-- 450 tonne bulk sample is on route to China for full beneficiation, rotary kiln reduction and electric arc furnace ("EAF") smelt pilot scale test work;
-- MOU signed with national power utility company EDM and draft term sheet received paving the way for negotiation of a Power Purchase Agreement;
-- MOU executed with Cornelder de Moçambique, S.A. ("CdM"), which is the sole concessionaire of the Container and General Cargo Terminals at the Port of Beira. Under the terms of the MOU, the Company and CdM will form a joint project team before 31 January 2015, to study and work towards the completion of a definitive handling agreement no later than 1 July 2015; and
-- Letter of Interest signed with two Tete coal companies, one in production and one in development, with draft coal off-take term sheets in circulation.
The Annual General Meeting will be held at The Wrench Room, Over-Seas House, Park Place, St James's Street, London SW1A 1LR United Kingdom on Thursday 29 January 2015 at 14.00pm (GMT).
Extracts from the Company's audited Report and Accounts are set out below.
ENQUIRIES
Baobab Resources Ben James: Managing Director +258 21 486 404 Jeremy Dowler: Chairman +44 1372 450529 Frank Eagar: Finance Director +27 76 753 5377 Canaccord Genuity Limited Neil Elliot +44 207 523 8000 Chris Fincken Tavistock Financial Public Relations Emily Fenton / Nuala Gallagher +44 207 920 3150
ABOUT BAOBAB RESOURCES PLC
Baobab Resources is an exploration and development company focused on the Tete pig iron and ferro-vanadium project in Mozambique, in which the International Finance Corporation holds a 15% participatory interest. The Company has been listed on the AIM market of the London Stock Exchange (ticker BAO) since 2007.
The information in this release that relates to Exploration Results is based on information compiled by Managing Director Ben James (BSc). Mr James is a Member of the Australasian Institute of Mining and Metallurgy, is a Competent Person as defined in the Australasian Code for Reporting of exploration results and Mineral Resources and Ore Reserves, and consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.
CHAIRMAN'S STATEMENT
2014 has been a watershed year for Baobab Resources. Moving from an exploration junior to a development junior is a challenging experience and one, which I believe the Company has embraced with enthusiasm and determination.
Combining the slowing Chinese economy and the impact it has had on global mining investment and the commodity markets, we find ourselves in a near perfect storm through which management and the board have to steer the Company towards the execution of its Pig Iron and Vanadium project.
Under these trying prevailing global market conditions and tough local operating environment, the Company's management has achieved a number of successes over the last 12 months.
-- Delivery of measured resource spanning the first 25 years of mine life;
-- A 25 year mining concession was granted by the Minister of Mines during December 2014 with the mining contract expected to be completed before end of December 2014;
-- Confirmation of the pre-feasibility rotary kiln and smelting flow sheet through metallurgical pilot scale and bench scale test work at FLSmidt and Mintek laboratories respectively;
-- 450 tonne bulk sample is on route to China for full beneficiation, rotary kiln reduction and electric arc furnace ("EAF") smelt pilot scale test work;
-- MOU signed with national power utility company EDM and draft term sheet received paving the way for negotiation of a Power Purchase Agreement;
-- MOU executed with Cornelder de Moçambique, S.A. ("CdM"), which is the sole concessionaire of the Container and General Cargo Terminals at the Port of Beira. Under the terms of the MOU, the Company and CdM will form a joint project team before 31 January 2015, to study and work towards the completion of a definitive handling agreement no later than 1 July 2015; and
-- Letter of Interest signed with two Tete coal companies, one in production and one in development, with draft coal off-take term sheets in circulation.
Cornerstone investor African Mineral Exploration & Development fund (AMED) has demonstrated confidence in the project and the Company's management through increasing its interest from 27.5% to 35% through a private placement in December 2013 at a premium to the share price prevailing at that time.
AMED provided a further interest free bridge facility of US$1 million in October 2014. This combined financial support of GBP4.6m by our cornerstone investor has played a significant role in the Company being able to progress the Definitive Feasibility Study.
The Company is continuing its strategy of de-risking the project in line with our objectives of securing a strategic and industrial partner and accessing lower development capital expenditure and export financing. I am pleased to inform shareholders that the Company is in discussions with three large Chinese EPC providers to the global steel industry. The nature of the discussions include the verification and completion of the ongoing Definitive Feasibility study; performance of pilot scale test work; completion of basic engineering; providing process guarantees and ultimately providing Baobab with a project execution plan through an EPC proposal.
I am confident that the positive conclusion with one or two of these Chinese entities will assist the Company to attract Chinese financing and co-operation with potential strategic partners.
Although this step will push out our time frame for completion of the Definitive Feasibility study, it should enable us to reduce project risk more rapidly and shorten the ultimate route to execution.
The growing relationship between China and Mozambique is very important for Baobab. The confidence that one of the largest Chinese state owned entities has in our project and the potential to build industrial capacity in Mozambique over the next 50 years, encapsulates the wider cooperation between host and investing nations.
The persistent high economic growth in Mozambique and the extraordinary interest and activity in the construction sector as well as power, gas and petroleum industries place Baobab's pig iron and vanadium project in the right place at the right time. In October this year Mozambique concluded free and fair presidential elections, confirming its low sovereign risk reputation and status as a destination of choice for international investment.
Two recent major developments reflect this; in July, ICVL of India acquired Rio Tinto's coking and thermal coal assets in Tete. This was followed in December with the announcement that Mitsui & Co.Ltd of Japan had secured a 15% stake in the Moatize coal project and 50% stake in the Nacala Corridor rail and port infrastructure project for a total investment of $763 million ($450m and $313m respectively).
Baobab has the potential to establish a high margin, large scale, long life operation delivering impressive investor returns, accompanied by unparalleled socio-economic benefits. In addition we have managers and employees who understand that this is not just another mining project. I am confident that during the coming financial year we will remain on the right path towards execution of the project.
I thank all of our dedicated employees for their continued hard work and commitment. I also thank our shareholders for their continued support. I look forward to presenting further news on project economics, finalisation of the Definitive Feasibility Study and our execution strategy in the coming months.
Jeremy Dowler
Chairman
22 December 2014
STRATEGIC REPORT
BUSINESS REVIEW
Work during the reporting period has focused almost exclusively on the Company's flagship pig iron and ferro-vanadium project in Mozambique's Tete Province where, due to the project's strategic access to core iron and steel making raw materials, the Company has identified a unique opportunity to establish a vertically integrated, large scale, long life, high margin operation that will deliver impressive investor returns along side unprecedented socio-economic benefits.
Mozambique continues as an investment destination of choice with free and fair presidential elections this year confirming the country's low sovereign risk. A consistent real growth rate of c.7% per annum over the past 3 years makes Mozambique one of the fastest developing economies in Africa with the Tete Province becoming a regionally significant hub of logistics, mining and heavy industry. Baobab is poised to play a central role in the rapid development of this part of Africa, supplying the region's unrelenting demand for iron and steel.
Management recognises that the key to the success of the project is not simply a matter of defining a technical solution, but also a commercially viable solution. The PFS returned robust economics, however the capex, at US$1.1bn for 1Mtpa of pig iron production, remains a significant challenge, particularly in current risk averse capital markets. The Company's focus going forward into the definitive feasibility study has therefore been on identifying mechanisms by which to reduce the up-front capital expenditure while maintaining strong economic fundamentals.
Phased production scenarios, which will reduce the required start up capital, are being investigated. The processing technology is modular, enabling the smooth up-scaling of production once flow sheets are bedded down and revenue streams are established. Baobab also opened discussions with Chinese technology and EPC (engineering, procurement and construction) providers in an effort to further reduce capital costs and gain access to Chinese financing. The Company believes that a process guarantee from a Chinese EPC will not only deliver enhanced project economics through improved capital efficiencies, but will also, by way of accessing associated financial instruments, significantly reduce the time frame to financial close and subsequent project execution.
The additional work required to firm up and finalise a lower capex solution and bed down a project execution strategy with process guarantees in place, will push study completion time lines out into H2 2015. The Company recognises that this is not in line with earlier expectations, but firmly believes that a project, which is both technically sound and readily financeable will carry more weight with potential strategic investors.
The Company enjoys firm support from its cornerstone investor, the African Mineral Exploration & Development fund ('AMED') which joined the register in July 2013 and, through investments totaling c.GBP13m, now holds 35.4% of Baobab Resources' issued capital. On 5 November, the Company announced that it had agreed a US$1m unsecured and interest free bridging finance facility AMED, further underlining the fund's commitment to the successful development of the Tete project.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
BAOBAB RESOURCES PLC
We have audited the financial statements of Baobab Resources PLC for the year ended 30 June 2014 which comprise the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity, the company statement of comprehensive income, the company statement of financial position, the company cash flow statement, the company statement of changes in equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council's (FRC's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the FRC's website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion:
-- the financial statements give a true and fair view of the state of the group's and the parent company's affairs as at 30 June 2014 and of the group's and the parent company's loss for the year then ended;
-- the financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
-- the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Emphasis of matter - availability of funding
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures made in note 2 to the financial statements concerning the Group and the Company's ability to continue as going concerns. The Group has identified a requirement to raise additional funds from existing or potential investors in order to undertake continued evaluation and development of the Tete pig iron project in Mozambique, to provide it with additional working capital for its operations and to meet its liabilities as they fall due. These conditions, along with the other matters explained in note 2 to the financial statements, indicate the existence of a material uncertainty which may cast doubt about the Group's and the Company's ability to continue as going concern. The financial statements do not include the adjustments that would result if the Group and the Company were unable to continue as going concerns.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the strategic report and directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-- the parent company financial statements are not in agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or -- we have not received all the information and explanations we require for our audit.
Scott Knight
For and on behalf of BDO LLP, statutory auditor
London
United Kingdom
Date:
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
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Premium
Note 2014 2013
GBP GBP
Continuing operations
Exploration and evaluation expenses (3,083,075) (5,308,407)
Administrative expenses (2,333,732) (2,821,078)
---------------- ------------
Loss from operations before tax 4 (5,416,807) (8,129,485)
---------------- ------------
Interest received 12,498 129,802
Other income 31,081 24,677
---------------- ------------
Loss before tax (5,373,228) (7,975,006)
---------------- ------------
Income tax expense 6 - -
Loss for the period attributable to
equity holders (5,373,228) (7,975,006)
---------------- ------------
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences (25,122) (216,305)
---------------- ------------
Total comprehensive loss for the period
Attributable to equity holders (5,398,350) (8,191,311)
================ ============
Loss per share (basic and diluted) 7 (1.70) (3.08)
================ ============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014
Company Number 5590467
Year end Year end
30 June 30 June
Note 2014 2013
GBP GBP
Non-current assets
Property, plant and equipment 8 147,898 242,201
Loans 9 148,550 154,675
Total non-current assets 296,448 396,876
============= =============
Current assets
Trade and other receivables 10 617,638 506,658
Cash and cash equivalents 11 2,153,087 1,425,582
------------- -------------
Total current assets 2,770,725 1,932,240
Total assets 3,067,173 2,329,116
============= =============
Equity attributable to the
equity
holders of the parent
Share capital 13 3,423,384 3,011,134
Share premium 13 27,304,703 23,229,741
Reserves - warrants and options 14 2,289,023 1,257,938
Reserves - foreign currency
translation (52,406) (27,284)
Retained earnings (30,971,848) (25,610,594)
------------- -------------
Total equity 1,992,856 1,860,935
============= =============
Current liabilities
Trade and other payables 12 1,074,317 468,181
------------- -------------
Total liabilities 1,074,317 468,181
============= =============
Total equity and liabilities 3,067,173 2,329,116
============= =============
The financial statements were approved by the Board of Directors and authorised for issue on 22 December 2014. They were signed on its behalf by:
Ben James
Director
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2014
30 June
30 June 2014 2013
Note GBP GBP
Cash flows from operating activities
Net loss for the year (5,373,228) (7,975,006)
Movement in trade and other receivables (110,980) (503,083)
Movement in trade and other payables 606,136 (555,804)
Interest received (12,498) (129,802)
Depreciation 84,961 97,894
Exchange difference 104,603 (32,231)
Share based payments 521,017 1,219,622
Net cash used in operating activities (4,179,989) (7,878,410)
------------- ------------
Cash flows from investing activities
Acquisition of property, plant and equipment (12,593) (190,310)
Repayment of loan balances 6,125 -
Interest received 12,498 129,802
------------- ------------
Net cash flows used in investing activities 6,030 (60,508)
------------- ------------
Cash flows from financing activities
Proceeds from issues of shares, options and warrants 5,251,561 8,579,268
Share issue costs (242,307) (206,336)
Net cash flows from financing activities 5,009,254 8,372,932
------------- ------------
Net increase/(decrease) in cash and cash equivalents 835,295 434,014
Cash and cash equivalents at beginning of the period 1,425,582 1,178,959
Exchange differences (107,790) (187,391)
------------- ------------
Cash and cash equivalents at end of the period 11 2,153,087 1,425,582
============= ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Foreign
Warrants Currency
Share Share and Option Translation Retained Total
Capital Premium Reserve Reserve Earnings Equity
LIR LIR LIR LIR LIR LIR
Balance at
1 July 2012 2,141,378 15,842,742 2,203,023 189,021 (19,916,472) 459,692
Loss for the
year - - - - (7,975,006) (7,975,006)
---------- ----------- ------------ ------------- ------------- ------------
Foreign exchange
translation
differences - - - (216,305) - (216,305)
Total other
comprehensive
loss - - - (216,305) - (216,305)
---------- ----------- ------------ ------------- ------------- ------------
Total comprehensive
loss for the
year - - - (216,305) (7,975,006) (8,191,311)
---------- ----------- ------------ ------------- ------------- ------------
Shares and
warrants issued 869,756 7,593,335 116,177 - - 8,579,268
Share issue
expenses - (206,336) - - - (206,336)
Share based
payments - - 1,219,622 - - 1,219,622
Share options
and warrants
exercised/forfeited - - (2,280,884) - 2,280,884 -
30 June 2013 3,011,134 23,229,741 1,257,938 (27,284) (25,610,594) 1,860,935
========== =========== ============ ============= ============= ============
Balance at
1 July 2013 3,011,134 23,229,741 1,257,938 (27,284) (25,610,594) 1,860,935
Loss for the
year - - - - (5,373,228) (5,373,228)
---------- ----------- ---------- --------- ------------- ------------
Foreign exchange
translation
differences - - - (25,122) - (25,122)
Total other
comprehensive
loss - - - (25,122) - (25,122)
---------- ----------- ---------- --------- ------------- ------------
Total comprehensive
loss for the
year - - - (25,122) (5,373,228) (5,398,350)
---------- ----------- ---------- --------- ------------- ------------
Shares and
warrants issued 412,250 4,317,269 522,042 - - 5,251,561
Share issue
expenses - (242,307) - - (242,307)
Share based
payments - - 521,017 - - 521,017
Share options
and warrants
exercised/forfeited - - (11,974) - 11,974 -
30 June 2014 3,423,384 27,304,703 2,289,023 (52,406) (30,971,848) 1,992,856
========== =========== ========== ========= ============= ============
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1. General information
Baobab Resources plc is a Company incorporated in the United Kingdom and is listed on the AIM market of the London Stock Exchange. The address of the registered office is given on page 1. The nature of the Group's operations and its principal activities are set out in the Director's Report. These financial statements are presented in pounds sterling which is also the currency of the primary economic environment in which the parent Company operates. The functional currency in Mozambique and Australia which is the economic environment of the trading subsidiaries is the US Dollar and Australian Dollar respectively. Foreign operations are included in accordance with the policies set out in Note 2.
2. Significant accounting policies
The significant policies which have been adopted in the preparation of this financial report are:
Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") and their interpretations as issued by the International Accounting Standards Board ("IASB") as adopted by the European Union and implemented in the UK. They have also been prepared in accordance with those parts of the Companies Act 2006 applicable to those companies reporting under IFRSs. The principal accounting policies are set out below.
Going concern
The financial statements have been prepared in accordance with the going concern basis of accounting.
The Group meets its day-to-day working capital requirements through a positive cash balance. The Group entered into a bridge loan facility on 31 October 2014 with AMED in order to further support cash resources. The Group has incurred losses in the year. Similar to other junior mining companies, Baobab Resources plc is reliant on raising funds periodically through equity finance or debt facilities. The nature of the Group's business is such that there can be considerable unpredictable variation in the timing of cash flows.
During the year the Company raised a total of GBP5,251,561 before costs by way of equity placements and issues of shares from exercise of warrants and options to fund its planned project development programme and exploration activities. The Group plans to continue with the evaluation and subsequent development of its Tete pig iron property in Mozambique and additional funding will be required in the next twelve months for the project to be progressed through the definitive feasibility study and for working capital purposes. Given the encouraging results from the ongoing definitive feasibility study and the definition of a measured resource at its Tenge license, the directors are of the opinion that the Company will be successful in raising the funds required to progress the project as planned.
On 31 October 2014, the Company entered into a bridging loan facility African Minerals Exploration & Development Fund Sicar SCA ("AMED") for the sum of GBP621,000. The loan is unsecured, carries no interest and is repayable 9 months after the execution date or any time after 19 December 2014, if at the discretion of AMED the Company's financial position can sustain the repayment. There is no certainty as to whether AMED may call on this loan earlier than its repayment date.
On 10 December, the Company entered into a convertible loan agreement with Topaz EX B.V. ('Topaz'), a wholly owned subsidiary of Baobab's cornerstone shareholder, the African Mineral Exploration & Development fund ('AMED').
Under the terms of the agreement, Topaz will:
-- advance an amount of up to GBP200,000 to progress the Monte Muande JV (the 'Exploration Funds') and;
-- provide an unsecured and unsubordinated loan for GBP500,000 (the 'Loan') to be used at Baobab's discretion to advance its flagship Tete Project.
Topaz may elect to convert the Loan into a 65% share of the Company's interest in the Monte Muande Joint Venture. Topaz may then earn an additional 15% share through an investment of not less than US$2m.
Should Topaz elect not to convert, the Loan and 50% of Exploration Funds are to be repaid after 18 months.
The directors have prepared cash flow forecasts which also indicate that, even with the aforementioned secured funding, the Group will require additional funding within the next 6 to 12 months in order to meet its existing commitments such as loan repayments as they fall due.
The Group is currently involved in discussions with external investors and advisors to secure future financing arrangements in the form of debt, bond or equity instruments . The Directors believe that based on ongoing discussions the outcome will be positive.
With the expectation of the Group formally agreeing new funding from financial investors, the Directors have a reasonable expectation that the Group will have adequate resources to continue trading for the foreseeable future and have therefore concluded that it is appropriate to prepare the financial statements on a going concern basis. However, the Directors appreciate that the current lack of formal agreements mean there can be no certainty that the additional funding will be secured within the necessary timescale or that loans will not be recalled.
These conditions indicate the existence of a material uncertainty which may cast doubt about the Group's and the Company's ability to continue as a going concern.
**ENDS**
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FEMFWEFLSEDE
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