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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bluerock Diamonds Plc | LSE:BRD | London | Ordinary Share | GB00BKKJK954 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.00 | 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
TIDMBRD
RNS Number : 1306L
BlueRock Diamonds PLC
29 September 2016
29 September 2016
BLUEROCK DIAMONDS PLC
("BlueRock" or the "Company")
Interim results for the six months ended 30 June 2016
Introduction
BlueRock Diamonds (AIM: BRD) is pleased to announce its interim results for the six months ended 30 June 2016. The interims will be available today for download from www.bluerockdiamonds.co.uk.
Chairman's Statement
The first half of 2016 has been a period of consolidation. Whilst production has been lower than that we would have hoped, we have spent the period preparing for the recommencement of operations following our operational review which has been delayed by the unexpected and unwelcome closure by the Department of Mineral Resources in July 2016.
We have been concentrating on a number of matters in the period.
Personnel
It was recognised early on in the period that given the increased size of our operations we would need to strengthen our management team. The first step in this process was appointing Adam Waugh as CEO. Adam was appointed with specific responsibility for undertaking the strategic and operational review, which I will discuss later. As part of his review, an experienced mine manager, Johan Mihlo, was identified and subsequently appointed in July 2016. This process took longer than we had envisaged, but the board was keen to ensure that the right person was selected for the task. Johan has had many years of experience, most recently at Petra Diamonds and previously with BHP Billiton and De Beers.
Following the end of the period, on 19 September 2016, Riaan Visser resigned as a director of BlueRock. Riaan was instrumental in building BlueRock in particular in identifying the Kareevlei opportunity and establishing our trial mining operations. The Board has decided not to replace him at present, because Adam Waugh and Johan Mihlo, supported by our BEE partner, Willy van Wyk, had already assumed a significant proportion of Riaan's responsibilities and Riaan's remaining responsibilities, primarily relating to the finance function will be assumed by other members of the team.
Diacar
In 2015, we appointed Diacar as our subcontractor to process oversized rocks that our plant configuration was unable to process, in addition to the loading and hauling services that were already being provided by Diacar. During the first half of 2016 it became apparent that this commercial arrangement was not in the best interests of BlueRock and following the DMR inspection of the Diacar operations in July 2016 which resulted in a significant proportion of the Diacar loading and hauling equipment failing, it was mutually agreed that both the subcontracting and loading and hauling agreements would be terminated. Since the end of the period, as announced on 7 September 2016, BlueRock has entered into an option with Diacar expiring on 31 December 2016 to buy the Diacar plant at a price of ZAR 1.6 million for a down payment of ZAR 100,000 and three monthly rental payments of ZAR 50,000.
It is our view that this is an excellent deal for BlueRock. It is the belief of our new management team that operated correctly the Diacar plant has the potential to be a valuable addition to our capacity and the 4 month option period gives us the opportunity to investigate this, alongside other options, before committing to any capital cost.
Plant and processing
The new management team has been concentrating on identifying bottlenecks and inefficiencies in the current configuration of our plant and more recently the Diacar plant. This process has benefitted enormously from Johan's experience and we have also been reviewing best practice in the industry. Our initial conclusion is that the basic design of our plant is suitable but we believe that its performance can be enhanced by simplifying parts of the process, adding to our pan capacity and by adjusting certain areas of the configuration.
It is our target to process at least 30,000 tonnes per month of ore through either a combination of the Kareevlei plant and the old Diacar plant or through augmenting the Kareevlei plant. A decision in relation to this will be made during the course of Q4 2016. We anticipate that we will reach our target level gradually because we wish to ensure that each of the steps that we plan to take achieve the desired result.
Following the cancellation of the Diacar contract we have been assessing the most cost effective way of operating in the future in relation to, loading and hauling and crushing and screening, each of which had been subcontracted to Diacar. Having put these services out to tender we have decided to continue to subcontract the loading and hauling from a new third party provider. We have decided to acquire crushing and screening equipment in order to operate these ourselves; the cost of these services is disproportionate as the only crushing and screening equipment available to subcontract is much larger than we require hence attracting an unnecessarily high cost. As a result of these measures we expect to reduce our combined per tonne of extracted material cost for these services to reduce from around ZAR 80 per tonne to less than ZAR 50 per tonne, a considerable saving.
Mining
During the period we have developed a life of mine plan for K2. This has involved some remedial work as hitherto the strategy had been to reach a lower level, where we expect to achieve higher grades, rather than create a mine which could be exploited over the medium to long term. The remedial work has begun and we are now in a position to ensure constant supply of ore from all parts of the mine, subject to completion of the financing discussed below.
Exploration of the other pipes
It is our intention to explore in more detail the other pipes at Kareevlei. In particular we are proposing over the next few months to begin to undertake some limited work on K5 where the test results to date have been limited but encouraging.
Future plans and funding
Subject to financing, we intend to complete the modifications of our plant, to acquire the crushing and screening equipment and to commence our mine development and blasting programme by the end of January 2017.
Events after the reporting period
Acquisition of Diamond Resources Limited
On 1 July 2016, the Group completed the acquisition of a 100% shareholding in Diamond Resources Limited from Tawana Resources NL. The Group agreed to acquire the entire share capital of Diamond Recourses Pty Limited for a total consideration of GBP32,826 (ZAR 0.7m) on 29 January 2016; however the sales agreement only became effective once the final payment was received on the 1 July 2016.
Due to the timing on the final acquisition payment to Tawana Resources NL, Diamond Resources Limited has not been consolidated in the current financial period. The final consideration is currently shown as a cash deposit (see note 11).
This acquisition gives the group access to the mining right in respect of the Kareevlei Tenements as well as speculative exploration assets in the Northern Cape. This acquisition had been envisaged at the time of the original acquisition and as a result we now hold the rehabilitation guarantee required by the DMR directly.
Paul Beck
Non-executive Chairman
Enquiries:
BlueRock Diamonds plc
Adam Waugh, CEO
www.bluerockdiamonds.co.uk
+27 (0) 84 431 0118
SP Angel Corporate Finance LLP
Nominated Adviser & Broker
David Facey/Stuart Gledhill
+44 (0) 20 3470 0470
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2016
Consolidated Statement of Financial Position
Hot Features
Premium
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
Note GBP GBP GBP
Assets
Non-current assets
Property, plant and equipment 5 517,367 548,430 477,735
Mining assets 164,449 125,659 141,364
681,816 674,089 619,099
------------ ------------ -------------
Current assets
Inventories 6 26,874 22,145 50,665
Trade and other receivables 7 41,953 15,752 7,623
Cash and cash equivalents 8 458,222 107,364 175,755
------------ ------------ -------------
527,049 145,261 234,043
------------ ------------ -------------
Total assets 1,208,865 819,350 853,142
------------ ------------ -------------
Equity and liabilities
Equity Attributable to
Equity Holders of the Parent
Share capital 10 388,046 315,250 321,604
Share premium 10 2,012,781 1,245,934 1,335,952
Retained losses (2,018,022) (1,234,836) (1,859,800)
Convertible loan note reserve 12 293,818 166,570 293,818
Foreign exchange reserve (9,689) 35,481 185,866
------------ ------------ -------------
666,934 528,399 277,440
Non-controlling interest (567,084) (268,658) (346,273)
99,850 259,741 (68,833)
------------ ------------ -------------
Liabilities
Current liabilities
Trade and other payables 11 387,716 190,253 244,134
Non-current liabilities
Borrowings 12 626,236 301,090 596,123
Provisions 13 95,063 68,266 81,718
------------ ------------ -------------
1,109,015 369,356 921,975
------------ ------------ -------------
Total equity and liabilities 1,208,865 819,350 853,142
------------ ------------ -------------
Consolidated Statement of Comprehensive Income
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
Note GBP GBP GBP
--------------------------------- ----- ----------- ----------- -------------
Revenue 206,072 33,042 264,372
Other income 58 86 231
Operating expenses (516,454) (361,403) (1,318,302)
Loss before taxation (310,324) (328,275) (1,053,699)
----------- ----------- -------------
Taxation - - 971
----------- ----------- -------------
Total loss for the period (310,324) (328,275) (1,052,728)
----------- ----------- -------------
Other Comprehensive Income:
Exchange differences on
translating foreign operations (264,264) 33,445 236,664
----------- ----------- -------------
Total comprehensive loss,
net of tax (574,588) (294,830) (816,064)
----------- ----------- -------------
Total comprehensive loss,
net of tax attributable
to:
Owners of the parent (353,777) (233,168) (676,787)
Non-controlling interest (220,811) (61,662) (139,277)
(574,588) (294,830) (816,064)
----------- ----------- -------------
Earnings per share - from
continuing activities
Basic and diluted 15 (0.01) (0.01) (0.02)
Consolidated Statement of Changes in Equity
Share Share Retained Foreign Total Non-controlling Total
Convertible capital premium losses exchange attributable interest equity
loan reserve to equity
note holders GBP
reserve GBP GBP GBP GBP of the GBP
Group
GBP GBP
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Balance at 1
January 2015
(as restated): 149,600 315,250 1,245,934 (1,007,879) 10,732 713,637 (206,996) 506,641
Loss for the
period - - - (257,917) - (257,917) (70,358) (328,275)
Other
comprehensive
income:
Foreign
exchange
movements - - - - 24,749 24,749 8,696 33,445
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
comprehensive
loss: - - - (257,917) 24,749 (233,168) (61,662) (294,830)
Transactions
with
shareholders:
Issue of
convertible
loan notes 16,970 - - - - 16,970 - 16,970
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
transactions
with
shareholders: 16,970 - - - - 16,970 - (277,860)
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Balance at 30
June 2015
(unaudited): 166,570 315,250 1,245,934 (1,265,796) 35,481 497,439 (268,658) 228,781
============ ======== ========== ============ ========== ============= ================ ==========
Balance at 30
June 2015
(unaudited): 166,570 315,250 1,245,934 (1,265,796) 35,481 497,439 (268,658) 228,781
Loss for the
period - - - (594,004) - (594,004) (130,449) (724,453)
Other
comprehensive
income:
Foreign
exchange
movements - - - - 150,385 150,385 52,834 203,219
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
comprehensive
loss: - - - (594,004) 150,385 (443,619) (77,615) (521,234)
Transaction
with
shareholders:
Issue of
convertible
loan notes 127,248 - - - - 127,248 - 127,248
Issue of shares - 6,354 90,018 - - 96,372 - 96,372
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
transactions
with
shareholders: 127,248 6,354 90,018 - - 223,620 - 223,620
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Balance at 31
December 2015
(audited): 293,818 321,604 1,335,952 (1,859,800) 185,866 277,440 (346,273) (68,833)
============ ======== ========== ============ ========== ============= ================ ==========
Balance at 1
January 2016: 293,818 321,604 1,335,952 (1,859,800) 185,866 277,440 (346,273) (68,833)
Loss for the
period - - - (158,222) - (158,222) (152,102) (310,324)
Other
comprehensive
income:
Foreign
exchange
movements - - - - (195,555) (195,555) (68,709) (264,264)
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
comprehensive
loss: - - - (158,222) (195,555) (353,777) (220,811) (574,588)
Transactions
with
shareholders:
Issue of shares - 66,442 676,829 - 743,271 - 743,271
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
transactions
with
shareholders: - 66,442 676,829 - - 743,271 - 168,683
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Balance at 30
June 2016
(unaudited): 293,818 388,046 2,012,781 (2,018,022) (9,689) 666,934 (567,084) 99,850
============ ======== ========== ============ ========== ============= ================ ==========
Consolidated Statement of Cash Flows
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP GBP GBP
------------------------------- --- ----------- ----------- -------------
Operating activities
Cash used in operations 14 (121,493) (61,754) (666,436)
Net cash used in operating
activities (121,493) (61,754) (666,436)
Investing activities
Purchase of property, plant
and equipment (51,692) (137,658) (227,543)
(Purchase) / Disposal of
non-current assets (23,085) 8,700 (7,004)
Net cash used in investing
activities (75,047) (128,868) (234,547)
Financing activities
Proceeds on share issue 700,000 - 91,373
Proceeds on convertible
loan notes issued - 50,000 450,000
Exercised share options 43,270 - -
Increase in short term
loan - - 50,715
Net cash received from
financing activities 743,270 50,000 592,088
Net increase / (decrease)
in cash and cash equivalents 546,730 (140,622) (308,895)
----------- ----------- -------------
Cash and cash equivalents
at the beginning of the
period 8 175,755 247,986 247,986
Foreign exchange differences (264,263) - 236,664
Cash and cash equivalents
at the end of the period 8 458,222 107,364 175,755
Notes to the Interim Consolidated Financial Statements
1. General information and basis of preparation
The condensed interim consolidated financial statements (the "interim financial statements") are for the six month period ended 30 June 2016.
These interim financial statements have not been audited, but have been reviewed by the auditors under ISRE 2410 of the Auditing Practices Board. The financial information set out in this report does not constitute statutory accounts as defined by the Companies Act 2006. The comparative figures for the year ended 31 December 2015 were derived from the statutory accounts for the year to 31 December 2015 which have been delivered to the Registrar of Companies. Those accounts received an unqualified audit report which did not contain statements under sections 498(2) or (3) (accounting records or returns inadequate, accounts not agreeing with records and returns or failure to obtain necessary information and explanations) of the Companies Act 2006.
The interim financial statements have been prepared on the basis of the accounting policies set out in the December 2015 financial statements of BlueRock Diamonds Plc and IAS 34 "Interim Financial Reporting" on a going concern basis. They are presented in sterling which is also the functional currency of the parent company. They do not include all of the information required in annual financial statements in accordance with IFRS and should be read in conjunction with the consolidated financial statements of the Group for the period ended 31 December 2015.
The interim financial statements have been approved for issue by the Board of Directors on 30 September 2016.
2. Accounting policies
The following relevant new standards, amendments to standards and interpretations have been issued by the IASB, but are not effective for the financial year beginning on 1 January 2016, they have not yet been adopted by the EU, and have not been early adopted.
The Directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial statements of the Company when the relevant standards and interpretations come into effect. The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated:
Standard Key requirements Effective date as adopted by the EU
IFRS 9 Financial Instruments - Replacement to IAS 39 and is built on a 1 January 2018
single classification and
measurement approach for financial assets which reflects both the
business model in which
they are operated and their cash flow characteristics.
IFRS 15 Revenue from contracts with customers - Introduces requirements for companies to recognise 1 January 2018
revenue for the transfer of goods or services to customers in amounts that reflect the
consideration
to which the company expects to be entitled in exchange for those goods or services. Also
results in enhanced disclosure about revenue.
IFRS 16 Leases - Introduces a single lessee accounting model and eliminates the previous 1 January 2019
distinction
between an operating and a finance lease.
The Group has not adopted these standards as it is not expected to have a material effect on the Group.
3. Significant judgements and sources of estimation uncertainty
In the application of the Group's accounting policies the Directors are required to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The judgements, estimates and assumptions applied in the interim financial statements including the key sources of estimation uncertainty were the same as those applied in the financial statements for the period ended 31 December 2015.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
4. Segmental reporting
Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance.
The Group's operations relate to the exploration for, and development of mineral deposits in the Kimberley region of South Africa and as such the Group has only one reportable segment. The non-current assets in the Kimberley region in June 2016 were GBP681k (December 2015: GBP619k)
All revenue consists of sales of diamonds in South Africa through auctions as is customary in the industry. The Company sells its diamonds through auctions run by Flawless Diamonds.
5. Property, plant and equipment
Accumulated Carrying
Cost / depreciation value
Valuation GBP 30 June
GBP 2016
GBP
Unaudited
------------ -------------- -----------
Mine infrastructure 74,719 26,177 48,542
Motor vehicles 7,503 5,442 2,061
Plant and machinery 685,870 219,106 466,764
Total 768,092 250,725 517,367
Reconciliation of property, plant and equipment
Carrying Additions Depreciation Disposals FX revaluation Carrying
value GBP value
1 January GBP GBP GBP 30 June
2016 2016
GBP GBP
Unaudited
----------- ---------- ------------- ---------- --------------- -----------
Mine infrastructure 39,816 5,000 (7,139) - 10,865 48,542
Motor vehicles 2,946 - (1,005) - 120 2,061
Plant and
machinery 434,973 46,962 (71,761) (7,809) 64,399 466,764
----------- ---------- ------------- ---------- --------------- -----------
477,735 51,962 (79,905) (7,809) 75,384 517,367
----------- ---------- ------------- ---------- --------------- -----------
6. Inventories
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Diamonds on hand 26,874 22,145 50,665
----------- ----------- ------------
26,874 22,145 50,665
----------- ----------- ------------
7. Trade and other receivables
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Prepayments 6,690 5,963 2,016
VAT 35,263 9,789 5,591
Other receivables - - 16
----------- ----------- ------------
41,953 15,752 7,623
----------- ----------- ------------
The carrying value of all trade and other receivables is considered a reasonable approximation of fair value.
8. Cash and cash equivalents
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Cash in bank and on hand 425,396 107,364 175,755
Deposit - Diamond Resources 32,826 - -
----------- ----------- ------------
458,222 107,364 175,755
----------- ----------- ------------
Cash on deposit of GBP32,826 relates to the acquisition of Diamond Resources Limited from Tawana Resources NL (see note 17).
9. Share Based Payments
The Directors were granted share options under the share option agreements dated 19 August 2013. There were no amendments to the terms of the options granted during the period.
The share options held by current and former Directors as at 30 June 2016 and the exercise prices were as follows:
Tranche 1 Tranche 2 Tranche 3 Tranche
4
Number
of ordinary
shares
subject Exercise Exercise Exercise Exercise
to share price price price price
Director options Number (pence) Number (pence) Number (pence) Number (pence)
P. Beck 315,251 - - 157,625 40 157,626 55 - -
J. Kilham 472,876 157,625 14 157,625 22 157,626 40 - -
T. Leslie 472,876 157,625 18 157,625 40 157,626 55 - -
A. Markgraaff 372,876 57,625 18 157,625 40 157,626 55 - -
J.Quirk 945,750 315,250 18 315,250 40 315,250 55
R. Visser 1,261,002 - - 630,501 22 630,501 40 - -
A. Waugh 776,091 - - - - - - 776,091 11
Total 4,616,722 688,125 1,576,251 1,576,255 776,091
------------- -------- --------- ---------- --------- ---------- --------- -------- ---------
The following share options were exercised during the period to 30 June 2016:
On 12 January 2016 Andre Markgraaf exercised 100,000 share options at an exercise price of 18p per Ordinary Share.
On 12 January 2016 Rian Visser exercised 180,500 share options at an exercise price of 14p per Ordinary Share.
The following share options were granted during the period to 30 June 2016:
On 28 April 2016 776,091 share options were granted to Adam Waugh with an exercise price of 11p per Ordinary Share.
Movements in the number of share options outstanding and their related weighted average prices are as follows:
30 June 2016 31 December 30 June 2015
2015
Average Number Average Number Average Number
exercise of options exercise of options exercise of options
price price price
in pence in pence in pence
per share per share per share
Outstanding at
the beginning
of the period 34 4,121,131 32 4,728,756 32 4,728,756
Granted 11 776,091 - - - -
Exercised 15 280,500 15 607,625 - -
----------- ------------ ----------- ------------ ----------- ------------
Outstanding at
the period / year
end 30 4,616,722 34 4,121,131 32 4,728,756
Exercisable at
the period / year
end 30 4,616,722 34 4,121,131 32 4,728,756
Options are valued at date of grant using the Black-Scholes option pricing model. There was no charge recorded for the period relating to share based payments on the grounds of materiality.
10. Share capital and share premium issued
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Number of Ordinary shares 38,804,580 31,525,041 32,160,444
Ordinary share capital of
1p per share 388,046 315,250 321,604
Share premium 2,012,781 1,245,934 1,335,952
2,400,827 1,561,184 1,657,556
----------- ----------- ------------
In the period ended 30 June 2016 the following Ordinary share issues occurred:
Date of issue Details of issue Number of ordinary Share capital Share premium
shares GBP GBP
At 1 January
2016 32,160,444 321,604 1,335,952
12 January
2016 Exercise of Share Options 280,500 2,805 40,466
28 April 2016 Placing and Equity Issue 6,363,636 63,637 636,363
------------------ ------------- -------------
At 30 June
2016 38,804,580 388,046 2,012,781
------------------ ------------- -------------
11. Trade and other payables
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Trade payables 174,304 107,462 24,657
Accrued expenses 182,460 79,848 168,762
Corporation tax payables - 2,943 -
Directors' current account 30,952 - 50,715
----------- ----------- ------------
387,716 190,253 244,134
----------- ----------- ------------
The carrying value of all trade and other payables is considered a reasonable approximation of fair value.
The accrued expenses for 2016: GBP182,460 (2015: GBP79,848, December 2015: 168,762) relate to plant development expenditure which has not been invoiced by the year end and a share of costs due for diamonds on hand which is payable to Diacar.
The Directors' current account 2016: GBP30,952 (2015: GBPnil, December 2015: GBP50,715) is made up of Directors fees and share option payments due to Riaan Visser.
12. Borrowings
The movement on each loan liability component can be summarised as follows:
Convertible loan 1 Convertible loan 2 Convertible loan 3 Total
GBP GBP GBP GBP
Balance at 1 January 2015 255,255 - - 255,255
Additional discounted loan notes issued - 31,856 267,200 299,056
Finance charge: unwinding the discount
factor 32,001 2,736 7,075 41,812
Balance at 31 December 2015 287,256 34,592 274,275 596,123
------------------- ------------------- ------------------- --------
Balance at 1 January 2016 287,256 34,592 274,275 596,123
Finance charge: unwinding the discount
factor 13,538 1,857 14,718 30,113
Balance at 30 June 2016 300,794 36,449 288,993 626,236
------------------- ------------------- ------------------- --------
Equity Component 143,000 18,018 132,800 293,818
=================== =================== =================== ========
All convertible loan stock is repayable on the 16 October 2019 and carries a zero coupon (nil interest).
The loan note will be convertible:
-- at the note holder's option at any time up to the end of the term at a conversion price of 11 pence per ordinary share; and
-- at the Company's option after the second anniversary of initial subscription provided that the one month volume weighted average price of the Company's ordinary shares is in excess of 120% of the conversion price and the closing mid-market price on the date prior to the Company opting to convert exceeds 120% of the conversion price.
In addition if the Company sells its interest in its subsidiary undertaking before the final repayment date for consideration equivalent to or greater than 120% of the loan note outstanding then the notes will become redeemable and a 20% premium will be payable to the note holder.
A fair value exercise to determine the value of the three components was undertaken by the Directors at the date the convertible loan was initially drawn down.
The fair value of the host loan instrument (including the embedded redemption feature) been valued as the residual of:
a) The fair value of the first draw down on 16 October 2014 is discounted at a commercially applicable rate of 9.25%. The fair values of the draw downs on 27 May 2016 and 2 October 2016 have been discounted at a commercially applicable rate of 10.5%.
b) The residual amount between the transaction price of the loan and the fair value of the liability has been allocated to an equity reserve.
13. Provisions
Reconciliation of provisions - 2016
2016
Rehabilitation costs Group
GBP
Balance at 1 January 2015 72,993
Unwinding of discount (4,727)
Balance at 30 June 2015 68,266
--------
Balance at 1 June 2015 68,266
Unwinding of discount 13,452
Balance at 31 December 2015 81,718
--------
Balance at 1 January 2016 81,718
Unwinding of discount 13,345
Balance at 30 June 2016 95,063
--------
The provision for environmental rehabilitation closure cost was independently assessed by Ndi Mudau of NDI Geological Consulting Services. The closure cost assessment reports over the Remainder of the Farm No. 113 (Skietfontein), Portion of Portion 2 (Kareeboompan) of the Farm 142, Portion 1 (Westhoek) of the Farm 113, and Portion 2 (Klipvlei) of the Farm 113. The financial provision was calculated in accordance with Regulation 54 of the Minerals and Petroleum Resources Development Act 2002 (Act 28 of 2002) and is dated 12 February 2016.
14. Cash used in operations
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Loss before taxation (310,324) (328,275) (1,053,699)
Adjustments for non-cash items:
Depreciation and amortisation 79,905 40,173 110,557
Shares issued in lieu of company
debt - - 5,000
Finance charges on convertible
loan notes 30,113 34,570 35,086
Foreign exchange revaluation
of fixed assets (75,384) 45,835 93,894
Movements in provisions 13,345 (4,727) 8,725
Loss on disposal of fixed
assets 7,809 - -
Tax credit - - 971
Changes in working capital:
(Increase) / decrease in trade
and other receivables (34,330) 19,977 28,106
Increase in trade and other
payables 143,582 129,209 131,960
Decrease / (Increase) in inventories 23,791 1,484 (27,036)
(121,493) (61,754) (666,436)
---------- ---------- -----------
15. EPS (Earnings per share)
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Loss attributable to ordinary
shareholders (152,102) (233,168) (676,787)
Weighted average number of
shares 35,009,972 31,525,041 31,787,878
Loss per share basic and
diluted (0.01) (0.01) (0.02)
Weighted average number of
shares after dilution 35,009,972 32,220,446 31,971,978
Fully diluted earnings per
share (0.01) (0.01) (0.02)
Share options granted to directors could potentially dilute EPS in the future but are not included in a dilutive EPS calculation because they are antidilutive for the period.
16. Related parties
Details of the Director's remuneration for the period ending June 2016 were as follows:
During the period ending 30 June 2016, key management compensation amounted to GBP24,000 of which GBP6,000 remains outstanding to R Visser included in the Directors' current account at the period end.
During the period R Visser and A Markgraaf exercised their share options (see note 9) for a value of GBP25,270 and GBP18,000 respectively, which decreased the outstanding balance in the Directors current account.
The outstanding balance at 30 June 2016 was GBP30,952 (year ended 31 December 2015: GBP50,715, period ended 30 June 2015 GBPnil).
17. Events after the reporting period
Acquisition of Diamond Resources Limited
On the 1 July 2016, the Group completed the acquisition of a 100% shareholding in Diamond Resources Limited from Tawana Resources NL. The Group agreed to acquire the entire share capital of Diamond Recourses Pty Limited for a total consideration of GBP32,826 (ZAR 0.7m) on 29 January 2016; however the sales agreement only became effective once the final payment was received on the 1 July 2016.
Due to the timing on the final acquisition payment to Tawana Resources NL, Diamond Resources Limited has not been consolidated in the current financial period. The accounting for the acquisition has not been finalised due to the recent nature of the transaction. The final consideration is currently shown as a cash deposit (see note 11).
This acquisition gives the group access to the mining right in respect of the Kareevlei Tenements as well as speculative exploration assets in the Northern Cape. This acquisition had been envisaged at the time of the original acquisition and as a result we now hold the rehabilitation guarantee required by the DMR directly.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EASNPASEKEFF
(END) Dow Jones Newswires
September 29, 2016 02:00 ET (06:00 GMT)
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