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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Firestone Diamonds Plc | LSE:FDI | London | Ordinary Share | GB00BKX59Y86 | 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% | 0.20 | 0.15 | 0.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMFDI
RNS Number : 6712A
Firestone Diamonds PLC
28 March 2017
28 March 2017
Firestone Diamonds plc
("Firestone", the "Group" or the "Company") (AIM: FDI)
Unaudited Interim Results for the six months to 31 December 2016
Firestone Diamonds plc, the AIM-quoted diamond mining company, is pleased to announce its unaudited interim results for the six months ended 31 December 2016 ("H1 2017" or the "Period").
HIGHLIGHTS FOR THE PERIOD
LIQHOBONG DIAMOND MINE ("Liqhobong", the "Project" or the "Mine")
-- Zero lost time injury record continued, with over 3.6 million man hours worked -- Project completed on time and within the US$185.4 million budget -- Commissioning commenced in October 2016
-- 37 carat white diamond recovered, alongside a further 20 special stones larger than 10.8 carats as well as several fancy yellow diamonds
-- Nameplate capacity achieved on multiple occasions and 402,440 tonnes treated
FINANCIAL
-- Loss for the Period of US$8.8 million (H1 2016: US$4.6 million) -- Loss per share of 2.0 cents (H1 2016: 1.5 cents) -- Total available debt facilities of US$29.0 million -- Cash of US$3.3 million
POST PERIOD HIGHLIGHTS
-- First two diamond sales completed in February and March 2017 in Antwerp
-- Total sale proceeds of US$13.7 million, all 127,590 carats offered for sale were sold, achieving an average price of US$107 per carat
-- Mine commissioning progressing with continued good recovery of special stones and steadily increasing grade
Stuart Brown, Chief Executive Officer of Firestone, commented:
"Finishing the construction of the Liqhobong Diamond Mine and commencing production in October 2016 are two momentous milestones for the Company and I would like to sincerely thank all of the team that has made our vision possible.
This has been a very successful Project from a construction and commissioning perspective. To have completed the Project within the budget in a very difficult environment and without any lost time injuries, makes us all very proud.
We look forward to the continued trend of over achievement that we have demonstrated throughout as we continue with our ramp-up phase. Importantly we are now working towards achieving commercial production in the coming months."
ANALYST CONFERENCE CALL
Firestone will be hosting an analyst conference call today, Tuesday 28 March 2017, at 10:00 BST. Participants may access the call by dialling one of the following numbers below approximately 10 minutes prior to the start of the call:
From UK (toll free): 0808 237 0030
From the rest of the world: +44 (0)20 3139 4830
Participant PIN code: 22140509#
For further information, please visit the Company's website or contact:
Hot Features
Premium
+44 (0)20 8741
Firestone Diamonds plc 7810
Stuart Brown
+44 (0)20 7409
Strand Hanson Limited (Nomad) 3494
Stuart Faulkner
Richard Tulloch
James Dance
Macquarie Capital (Europe)
Limited (Joint Broker)
+44(0)20 3037
Raj Khatri 2000
Nick Stamp
Mirabaud Securities LLP (Joint
Broker)
+44 (0)20 7878
Rory Scott 3360
+44 (0)20 7878
Ed Haig-Thomas 3447
Tavistock (Public and Investor +44 (0)20 7920
Relations) 3150
Emily Fenton +44 (0)7788
Jos Simson 554 035
Barney Hayward
Background information on Firestone
Firestone is an international diamond mining company with operations focused on Lesotho. Firestone is currently in the process of commencing commercial production at the Liqhobong Diamond Mine. Liqhobong is owned 75% by Firestone and 25% by the Government of Lesotho.
Lesotho is emerging as one of Africa's significant new diamond producers, hosting Gem Diamonds' Letseng Mine, Firestone's Liqhobong Mine and Namakwa Diamonds' Kao Mine.
For more information please visit: www.firestonediamonds.com
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
CHIEF EXECUTIVE'S REVIEW
The completion of the Project to a state such that production ramp-up could commence in late October 2016 was very pleasing. This milestone was the culmination of a tremendous amount of hard work and co-operation from many parties. Our sincere thanks go to all our employees and contractors who have worked tirelessly to ensure the Project construction was completed within the revised schedule and commissioning could commence earlier than expected. In addition, the support from our partner, the Government of Lesotho, is greatly appreciated.
By the end of October 2016 we had seen our first carats which were recovered from mixed stockpiled and diluted ore sources. The remainder of the Period was devoted to getting the plant up and running and steadily increasing the daily tonnes treated. By the end of the Period we had successfully treated over 400,000 tonnes and recovered over 57,000 carats. Despite starting our production on treating lower grade ore and old mixed stockpile material, we recovered some high value diamonds that have encouragingly achieved very good prices at our first two sales in Antwerp in February and March 2017.
The Mine's ramp-up process has not been without its challenges. Substantial rain, and some plant and equipment teething problems were experienced initially, but pleasingly these have largely been resolved and the mine and plant have been operating at, and close to, nameplate capacity on a number of occasions since commencing production in October 2016. Initially, grades were impacted by the under recovery of the lower value finer diamonds. The grade is steadily increasing as minor modifications are continuing to be made to the plant, and are expected to improve as we begin treating the better quality ore. The waste stripping is on schedule and we are now in the process of dewatering the south-eastern side of the main pit, to begin accessing better quality ore later in the financial year. We expect the Mine to improve steadily as it reaches commercial production in the coming months.
The Group's finances are well managed with sufficient cash and debt facilities available to fund the Group for the foreseeable future.
The overall diamond market remains fairly difficult although prices for the larger and better quality diamonds continue to be strong. The impact of the Indian demonetisation event towards the end of the Period has negatively affected the lower quality, high volume, end of the diamond market. The impact of this has meant that prices for these goods have weakened and in some cases the very poor quality goods have remained unsold. It is not certain how long this situation will continue for, but there are some signs that pricing is improving in these categories. Pleasingly, Firestone sold all its goods offered at its first two diamond sales in the first quarter of 2017, generating revenues of, in aggregate, US$13.7 million.
BK11 in Botswana remains under care and maintenance after the termination of the sale process with Tango Mining Limited. We are currently negotiating a bulk sampling exercise with an external partner, the results of which will enable us to assess our options with BK11.
I am particularly pleased with our safety record. To have continued throughout the Project with no lost time injuries has been simply outstanding and I would like to congratulate all our employees and contractors.
We have maintained our strong relationship with the local communities, continuing the crop loss compensation payments as well as commencing loss of grazing payments. Recently we completed and handed over a new crèche facility at the Liqhobong Village and have commenced other community enhancement projects.
Finally, I would like to thank everyone involved to date in the successful completion of the Project and I look forward to bigger, and better, diamonds as we move to the higher grade ore and reach commercial production.
Stuart Brown
Chief Executive Officer
27 March 2017
FINANCIAL REVIEW
Summary
The first half of the financial year saw the Company complete the construction of the Liqhobong Mine and commence the ramp-up of production in October 2016.
A total of 402,440 tonnes were treated recovering 57,723 carats at a total cost of US$5.6 million. A cost of sales section is excluded from the statement of comprehensive income as production costs are capitalised to the cost of the Project until such time as commercial production is achieved, in line with the applicable accounting standard. Commercial production will be established once certain operating parameters and criteria, as determined by management, have been consistently achieved over a continuous 3 month period.
Administrative expenses for the Period were US$1.1 million higher than the prior Period at US$3.6 million (H1 2016: US$2.5 million) as a result of a depreciation charge of US$0.6 million related to the BK11 mine and US$0.5 million to the grid power line which provides electricity to the Liqhobong Mine. No depreciation charge was recognised in the prior period for either of these assets as the BK11 mine was classified as 'held for sale' and the Grid power line was in the process of being commissioned.
Physical Project construction was complete by the end of December 2016 and from a funding perspective, US$173.8 million had been spent against the original Project budget of US$185.4 million, leaving a balance of US$11.6 million to be paid in the second half of the year as scheduled final payments become due. During the Period, US$25.0 million was drawn against the ABSA Debt Facility to fund Project costs.
At the end of December, the Group had access to total debt facilities of US$29.0 million, comprising US$14.0 million from the ABSA Debt Facility, which has now been fully drawn, and the US$15.0 million standby facility.
Statement of comprehensive income
The Group's loss before tax for the six month Period ended 31 December 2016 of US$4.1 million was slightly lower than the prior year loss for the same Period of US$4.6 million. However, due to a deferred tax charge during the Period of US$4.6 million, the Group's loss after tax is US$8.8 million (H1 2016: US$4.6 million).
The deferred tax charge resulted from foreign currency translation gains in Liqhobong. The Maloti, Liqhobong's functional currency strengthened against the US dollar by 7.9% during the Period. This resulted in a lower value of debt in Maloti currency terms at the end of the Period and taxable foreign currency translation gains for the Period. Although a deferred tax charge is recognised for the Period, no cash tax payment is payable until Liqhobong's assessed loss of Maloti 3.7 billion is utilised.
Total comprehensive income for the Period of US$9.6 million compares favourably to the loss of US$31.5 million incurred in the prior comparative Period. This was mainly as a result of gains on currency revaluations due to a weaker US Dollar.
The loss incurred of 2.0 cents per share is 0.5 cents per share more than the loss in the prior comparative Period of 1.5 cents per share, largely as a result of the deferred tax charge.
Statement of financial position
The Group's total assets increased by US$35.8 million to US$250.0 million (FY 2016: US$214.2 million) mainly as a result of the continued expenditure on the Project, offset by a decrease in the value of the deferred tax asset. The value of property, plant and equipment increased by US$37.6 million to US$214.7 million (FY2016: US$177.1 million), and includes capitalised Project costs of US$25.3 million and translation gains on assets held in currencies other than the US dollar of US$14.9 million, offset by depreciation of US$2.6 million. The deferred tax balance decreased by US$2.1 million during the Period to US$18.1 million (FY2016: US$20.2 million) as a result of foreign currency translation gains for Liqhobong as discussed above. The value of current assets of $14.2 million includes cash balances of US$3.3 million.
Total equity for the Group increased by US$10.5 million to US$150.2 million (FY 2016: US$139.7 million) and includes a US$12.8 million foreign currency translation gain.
The Group's total liabilities increased by US$25.3 million to US$99.8 million (FY 2016: US$74.5 million) mainly as a result of accessing debt funding from the ABSA Debt Facility of US$25.0 million, which was used to fund Project costs.
Cash Flow
The Group began the Period with cash of US$10.3 million, drew down US$25.0 million from the ABSA debt facility and spent US$1.9 million on operations, US$19.9 million on the Project, US$8.7 million on working capital and incurred net finance costs of US$1.5 million, resulting in a closing cash balance of US$3.3 million.
Cash flows used in operating activities of US$1.9 million during the Period compare favourably with US$2.3 million in H1 2016 as costs continued to be well managed and completion of the Project was achieved.
Conclusion
The Group had a successful six months which culminated in the completion of the Project in late October and the start of the ramp up in production.
The Group ended the Period with sufficient cash and debt facilities to complete the Project within the original budget, and to fund other Group operating costs for the foreseeable future.
Post Period events
Two sales took place subsequent to the Period end, the first in February and the second in March 2017. Total sales proceeds of US$13.7 million were received from the sale of 127,590 carats at an average price of US$107 per carat.
The ABSA Debt Facility was fully drawn in January 2017, when the remaining US$14 million of the US$82.4 million facility was received.
Consolidated Statement of Comprehensive Income
For the six months ended 31 December 2016
(Unaudited)
6 months 6 months
ended ended Year ended
31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited
Note US$'000 US$'000 US$'000
Total administrative
expenses (3,560) (2,456) (7,396)
----------- ----------- -----------
Other administrative
expenses (150) (133) (290)
Amortisation and depreciation (1,121) - (2,464)
Care and maintenance (245) (258) (518)
Share-based payments (467) (379) (775)
Corporate expenses (1,577) (1,686) (3,349)
----------- ----------- -----------
Other income 408 66 450
Loss before finance charges
and income tax (3,152) (2,390) (6,946)
Finance income 218 27 111
Finance costs (1,205) (2,260) (2,198)
----------- ----------- -----------
Loss from operations
before tax (4,139) (4,623) (9,033)
Taxation (charge)/credit 2 (4,636) 63 22,641
-----------
Loss after tax for the
period (8,775) (4,560) 13,608
----------- ----------- -----------
Loss after tax for the
period attributable to:
Owners of the parent (6,253) (4,683) 7,884
Non-controlling interest (2,522) 123 5,724
----------- ----------- -----------
Loss after tax for the
period (8,775) (4,560) 13,608
----------- ----------- -----------
Other comprehensive loss:
Items that may be reclassified
subsequently to profit
and loss
Exchange gains/(losses)
on translating foreign
operations net of tax 16,974 (26,507) (20,337)
Profit/(loss) on foreign
exchanges hedges 1,454 (429) 344
----------- ----------- -----------
Other comprehensive income/(loss) 18,428 (26,936) (19,993)
----------- ----------- -----------
Total comprehensive income/(loss)
for the period 9,653 (31,496) (6,385)
----------- ----------- -----------
Total comprehensive income/(loss)
for the period attributable
to:
Owners of the parent 7,618 (25,369) (7,541)
Non-controlling interests 2,035 (6,127) 1,156
----------- ----------- -----------
Total comprehensive income/(loss)
for the period 9,653 (31,496) (6,385)
----------- ----------- -----------
Profit/(loss) per share
Basic profit/(loss) per
share (cents) 8 (2.0) (1.5) 2.5
Diluted profit/(loss)
per share
Diluted profit/(loss)
per share (cents) 8 (2.0) (1.5) 2.5
Consolidated Statement of Financial Position
As at 31 December 2016
(Unaudited)
31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited
Note US$'000 US$'000 US$'000
ASSETS
Non-current assets
Property, plant and
equipment 3 214,676 144,394 177,141
Deferred tax 4 18,057 - 20,248
Loan receivable 3,002 - 2,816
Total non-current assets 235,735 144,394 200,205
----------- ----------- -----------
Current assets
Inventories 5 6,859 242 248
Trade and other receivables 4,002 8,455 3,420
Other financial assets 39 - -
Cash and cash equivalents 6 3,346 14,225 10,282
----------- ----------- -----------
Total current assets 14,246 22,922 13,950
----------- ----------- -----------
Total assets 249,981 167,316 214,155
=========== =========== ===========
EQUITY
Share capital 7 163,538 163,447 163,493
Share premium 166,469 163,758 164,680
Reserves (31,727) (51,784) (46,065)
Accumulated losses (135,294) (138,933) (129,041)
----------- ----------- -----------
Total equity attributable
to equity holders of
the parent 162,986 136,488 153,067
Non-controlling interests (12,823) (25,606) (13,402)
----------- ----------- -----------
Total equity 150,163 110,882 139,665
----------- ----------- -----------
LIABILITIES
Non-current liabilities
Borrowings 9 68,137 34,227 50,097
Deferred tax 4 - 2,697 -
Other payables 5,215 5,197 5,255
----------- ----------- -----------
Provisions 3,588 2,888 3,306
----------- ----------- -----------
Total non-current liabilities 76,940 45,009 58,658
----------- ----------- -----------
Current liabilities
Borrowings 9 14,610 - 4,680
Other financial liabilities 418 2,302 1,688
Trade and other payables 7,417 9,006 8,943
Provisions 433 117 521
Total current liabilities 22,878 11,425 15,832
----------- ----------- -----------
Total liabilities 99,818 56,434 74,490
----------- ----------- -----------
Total equity and liabilities 249,981 167,316 214,155
=========== =========== ===========
Consolidated Statement of Changes in Equity
For the six months ended 31 December 2016
(Unaudited)
Share-based
Share Share Warrant Merger Hedging payment Translation Accumulated Non-con-trolling Total
capital premium reserve reserve Reserve reserve reserve losses Total interest equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 31
December
2015
(Unaudited) 163,447 163,758 7,609 (1,614) (2,163) 4,019 (59,635) (138,933) 136,488 (25,606) 110,882
-------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- --------
Profit for the
period - - - - - - - 12,567 12,567 5,601 18,168
Foreign currency
translation
differences - - - - - - 4,667 - 4,667 1,504 6,171
Profit on cash
flow
hedges - - - - 595 - - - 595 178 773
-------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- --------
Total
comprehensive
loss for the
period - - - - 595 - 4,667 12,567 17,829 7,283 25,112
-------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- --------
Contributions by
and
distributions
to owners
Issue of
ordinary
shares 46 922 - - - - - - 968 - 968
Minority
Investment
in subsidiary - - - - - - - (2,749) (2,749) 5,086 2,337
Dividends paid
to
minorities - - - - - - - - - (165) (165)
Share-based
payment
transactions - - - - - 531 - - 531 - 531
Share-based
payment
lapse/reversals - - - - - (74) - 74 - - -
-------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- --------
Total
contributions
by and
distributions
to owners 46 922 - - - 457 - (2,675) (1,250) 4,921 3,671
-------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- --------
Balance at 30
June
2016 (Audited) 163,493 164,680 7,609 (1,614) (1,568) 4,476 (54,968) (129,041) 153,067 (13,402) 139,665
-------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- --------
Loss for the
period - - - - - - - (6,253) (6,253) (2,522) (8,775)
Foreign currency
translation
differences - - - - - - 12,781 - 12,781 4,193 16,974
Profit on cash
flow
hedges - - - - 1,090 - - - 1,090 364 1,454
-------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- --------
Total
comprehensive
loss for the
period - - - - 1,090 - 12,781 (6,253) 7,618 2,035 9,653
-------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- --------
Contributions by
and
distributions
to owners
Issue of
ordinary
shares 45 1,789 - - - - - - 1,834 (1,456) 378
Share-based
payment
transactions - - - - - 467 - - 467 - 467
Total
contributions
by and
distributions
to owners 45 1,789 - - - 467 - - 2,301 (1,456) 845
-------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- --------
Balance at 31
December
2016
(Unaudited) 163,538 166,469 7,609 (1,614) (478) 4,943 (42,187) (135,294) 162,986 (12,823) 150,163
-------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- --------
Consolidated Statement of Cash Flows
For the six months ended 31 December 2016
(Unaudited)
6 months 6 months
ended ended Year ended
31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited
Note US$'000 US$'000 US$'000
Cash flows from operating
activities
Loss before taxation (4,139) (4,623) (9,033)
Adjustments for:
Depreciation, amortisation
and impairment 1,121 16 2,464
Effect of foreign exchange
movements (250) 1,929 (2,615)
Equity-settled share-based
payments 467 379 775
Changes in provisions (88) (65) 157
Profit on sale of assets - - (3)
Finance cost 1,205 79 2,198
Finance income (218) (27) (111)
Net cash flows used
in operating activities
before working capital
changes (1,902) (2,312) (6,168)
Increase in diamond
inventory (5,531) - -
Increase in spares and
consumables (1,058) - -
Decrease in trade and
other receivables 21 2,723 7,853
(Decrease)/increase
in trade and other payables (2,106) 65 (1,307)
Net cash flows (used
in)/from operating activities (10,576) 476 378
Cash flows used in investing
activities
Additions to property,
plant and equipment (19,919) (45,969) (68,209)
Proceeds on disposal
of property, plant and
equipment - - 16
Net cash used in investing
activities (19,919) (45,969) (68,193)
Cash flows from financing
activities
Proceeds from borrowings 25,000 52,400 73,400
Dividends paid to minorities - - (165)
Finance cost (1,583) (8,231) (12,062)
Finance income 32 27 111
Net cash from financing
activities 23,449 44,196 61,284
Net decrease in cash
and cash equivalents (7,046) (1,297) (6,531)
Cash and cash equivalents
at beginning of period 10,282 17,628 17,628
Exchange rate movement
in cash and cash equivalents
at beginning of period 110 (2,106) (815)
----------- ----------- -----------
Cash and cash equivalents
at end of period 6 3,346 14,225 10,282
=========== =========== ===========
Notes to the condensed Group interim financial statements
For the six months ended 31 December 2016
(Unaudited)
1. Accounting Policies
Basis of preparation
Firestone Diamonds plc (the "Company") is a company domiciled in the United Kingdom and is quoted on the AIM market of the London Stock Exchange plc. The unaudited condensed consolidated interim financial statements of the Company for the six months ended 31 December 2016 comprise the Company and its subsidiaries (together referred to as the "Group"). The Group is primarily involved in diamond mining and exploration in southern Africa. The audited consolidated financial statements of the Group for the year ended 30 June 2016 are available upon request from the Company's registered office at The Triangle, 5-17 Hammersmith Grove, London W6 0LG or at www.firestonediamonds.com.
Statement of compliance
These unaudited condensed interim financial statements of the Group for the six months ended 31 December 2016 have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards as adopted by the European Union (IFRSs) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The same accounting policies, presentation and methods of computation are followed in these financial statements as were applied in the Group's latest audited financial statements for the year ended 30 June 2016.
These unaudited condensed interim financial statements have not been audited, do not include all of the information required for full annual financial statements, and should be read in conjunction with the Group's consolidated annual financial statements for the year ended 30 June 2016. The auditors' opinion on those statutory Annual Report and Accounts was unqualified. The auditor's report did not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006.
The comparative figures presented are for the six months ended 31 December 2015 and the year ended 30 June 2016.
Going concern
The Group currently operates the Liqhobong mine which is situated in Lesotho and was under construction since 2014. The mine commenced operations in October 2016 when the first ore was processed. Construction was complete by the end of December 2016. The Group also holds a 90% interest in the BK11 mine, which is situated in Botswana and which remains on care and maintenance.
Funding for the construction phase of the Project was made available by an equity raise of US$110.7 million, a Eurobond facility of US$30.0 million and the ABSA Debt Facility of US$82.4 million. Funds received from the equity raise and Eurobond facility were used to fund Project costs prior to the ABSA Debt Facility being accessed and the final drawdown against the ABSA Debt Facility took place subsequent to the Period end in January 2017. In future, the Group is reliant on proceeds from the sale of diamonds recovered from its Liqhobong Mine for its cash generation together with the US$15 million standby facility that has not yet been drawn.
The Directors have prepared cash flow forecasts for the Group based on certain assumptions, and the Directors are aware that various uncertainties might affect the validity of their forecasts. These uncertainties include currency risk, operational risks and the risk of change in general market conditions. The Directors are monitoring the working capital requirements of the Group on a regular basis to ensure that action will be taken at the appropriate time to ensure that the Group has adequate funding, or access to additional funds to enable it to fund its operating costs as they fall due.
The Directors are confident that the existing cash resources together with the standby facility of US$15 million are sufficient to fund the Group for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis of preparation for the financial statements.
2. Taxation
31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Current tax - 63 -
Deferred tax (charge)/credit (4,636) - 22,641
(4,636) 63 22,641
----------- ----------- -----------
Factors affecting the tax charge for the year
The reasons for the difference between the actual tax credit and the standard rate of corporation tax of 20% (2015: 20.75%) in the United Kingdom applied to the loss for the year are as follows:
31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Loss before tax (4,139) (4,623) (9,033)
Tax on loss at standard rate of 20% (2015: 20.75%) (828) (959) (1,807)
Effect of tax in foreign jurisdictions 4,828 (9) (1,397)
Effect of the change in the standard tax rate - - 126
Foreign exchange adjustment on effective interest rate on borrowings (231) - 307
Recognition of previously unrecognised deferred tax assets - - (19,871)
Expenses not deductible for tax purposes 10 (145) 1
Adjustments to deferred tax not recognised 857 1,050 -
4,636 (63) (22,641)
----------- ----------- -----------
3. Property, Plant and Equipment
Motor
vehicles
Mining Plant and and other
property equipment assets Total
US$'000 US$'000 US$'000 US$'000
Cost
At 31 December
2015 143,695 16,256 2,218 162,169
Additions 25,540 - 169 25,709
Disposals - - (45) (45)
Exchange difference 9,550 (435) (77) 9,038
At 30 June 2016 178,785 15,821 2,265 196,871
Additions 24,976 12 302 25,290
Exchange difference 15,193 1,810 206 17,209
---------- ----------- ----------- --------
At 31 December
2016 218,954 17,643 2,773 239,370
---------- ----------- ----------- --------
Accumulated depreciation
At 31 December
2015 8,218 8,233 1,324 17,775
Charge for the
period 652 1,599 197 2,448
Disposals - - (32) (32)
Exchange difference 383 (717) (127) (461)
At 30 June 2016 9,253 9,115 1,362 19,730
Charge for the
period 1,968 597 49 2,614
Exchange difference 917 1,357 76 2,350
At 31 December
2016 12,138 11,069 1,487 24,694
---------- ----------- ----------- --------
Net book value
at 31 December
2016 206,816 6,574 1,286 214,676
Net book value
at 30 June 2016 169,532 6,706 903 177,141
Net book value
at 31 December
2015 135,477 8,023 894 144,394
4. Deferred tax
The deferred tax included in the balance sheet is as follows:
31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Opening balance 20,248 (3,480) (3,480)
Movement in temporary
differences recognised
in income (4,636) - 22,641
Exchange differences 1,735 783 214
Income tax credits 710 - 873
18,057 (2,697) 20,248
----------- ----------- -----------
The deferred tax asset/(liability) comprises:
31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Accelerated capital
allowances (47,882) - (37,718)
Provisions 567 - 502
Borrowings (2,498) - (2,471)
Losses available
for offsetting
against future
taxable income 69,427 - 61,954
Income tax credits
available for offsetting
against future
taxable income 1,583 - 873
Temporary difference
arising on acquisition
of subsidiary (3,140) (2,697) (2,892)
18,057 (2,697) 20,248
----------- ----------- -----------
The Liqhobong Mine Development Project was completed during the Period. The Directors considered Liqhobong's financial model which provides convincing evidence that sufficient taxable profit will be generated from operations in the foreseeable future to offset unused tax losses. Based on current forecasts the Group expects to deplete the tax losses over the next four years.
Deferred tax assets have been recognised in respect of all tax losses and other temporary differences giving rise to deferred tax assets where the Directors believe it is probable that these assets will be recovered. Deferred tax assets and deferred tax liabilities relating to the same tax authorities have been disclosed as a nett asset or liability.
The Group has unrecognised tax losses of approximately US$52.2 million (full year June 2016: US$61.4 million), and unrecognised accelerated capital allowances of US$13.4 million (full year June 2016: US$13.4 million).
5. Inventories
31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Finished goods 5,577 62 62
Spares and consumables 1,282 180 186
6,859 242 248
----------- ----------- -----------
6. Cash and cash equivalents
31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Cash and cash equivalents 3,346 14,225 10,282
3,346 14,225 10,282
----------- ----------- -----------
Net cash and cash equivalents were represented by the following currencies:
United States Dollar 2,836 9,094 7,380
Pound Sterling 311 2,052 549
Lesotho Maloti 74 2,916 2,130
South African Rand 43 78 146
Botswana Pula 82 85 77
Total Cash and
Cash Equivalents 3,346 14,225 10,282
------ ------- -------
The following significant exchange rates applied against the US Dollar during the Period:
6 months ended 6 months Year ended
ended
31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited
Average Balance Average Balance Average Balance
rate sheet rate sheet rate sheet
rate rate rate
South African
Rand 13.9720 13.6050 13.5952 15.5293 14.4926 14.7737
Lesotho Maloti 13.9720 13.6050 13.5952 15.5293 14.4926 14.7737
Botswana
Pula 10.5322 10.5862 10.3074 11.0738 10.6395 10.7880
Pound Sterling 1.2624 1.2284 1.5335 1.4804 1.4819 1.3394
7. Share capital
Nominal value of
Number of shares shares
31.12.2016 31.12.2015 30.06.2016 31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited Unaudited Unaudited Audited
'000 '000 '000 US$'000 US$'000 US$'000
Allotted, called
up and fully paid
Ordinary shares
Opening balance 312,575 308,993 308,993 3,526 3,474 3,474
Issued during
the period 3,312 443 3,582 45 6 52
----------- ----------- ----------- ----------- ----------- -----------
Closing balance 315,887 309,436 312,575 3,571 3,480 3,526
Deferred shares 7,388,642 7,388,642 7,388,642 159,967 159,967 159,967
TOTAL 7,704,529 7,698,078 7,701,217 163,538 163,447 163,493
----------- ----------- ----------- ----------- ----------- -----------
During the Period, the Group issued 3,312,728 (H1 2016: 442,962) new ordinary shares of 1 pence each in respect of the quarterly interest due on the Eurobonds.
8. Loss per share
The calculation of the basic loss per share is based upon the net loss after tax attributable to ordinary shareholders of US$6.2 million (H1 2016: US$4.7 million loss, after the reallocation of US$0.3 million from discontinued operations) and a weighted average number of shares in issue for the year of 312,920,412 (H1 2016: 309,077,713).
The diluted loss per share in H1 2017 and H1 2016 is the same as the basic loss per share as the potential ordinary shares to be issued have no dilutive effect.
The Company has a further 15,540,589 (H1 2016: 15,133,671) potentially issuable shares in respect of share options issued to employees that do not have a dilutive effect as at 31 December 2016 and 48,786,437 (H1 2016: 48,786,437) potentially issuable shares in respect of warrants issued to strategic investors.
9. Borrowings
31.12.2016 31.12.2015 30.06.2016
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Series A Eurobonds
Capital amount
Opening balance 30,000 - -
Additions - 20,000 30,000
----------- ----------- -----------
Closing balance 30,000 20,000 30,000
----------- ----------- -----------
Finance cost to be amortised over the life of the instrument
Opening balance (7,860) - -
Additions - (8,959) (8,959)
Finance cost capitalised to Property, plant and equipment 644 462 1,099
----------- ----------- -----------
Closing balance (7,216) (8,497) (7,860)
----------- ----------- -----------
Series A Eurobonds at amortised cost 22,784 11,503 22,140
----------- ----------- -----------
ABSA Debt Facility
Capital amount
Opening balance 43,400 - -
Additions 25,000 32,400 43,400
Closing balance 68,400 32,400 43,400
----------- ----------- -----------
Finance cost to be amortised over the life of the loan
Opening balance (10,763) - -
Additions (221) (10,712) (11,243)
Finance cost capitalised to Property, plant and equipment 967 1,036 480
----------- ----------- -----------
Closing balance (10,017) (9,676) (10,763)
----------- ----------- -----------
ABSA Debt Facility at amortised cost 58,383 22,724 32,637
----------- ----------- -----------
Other loans (previously included in Non-controlling interests) 1,580 - -
Borrowings at amortised cost 82,747 34,227 54,777
----------- ----------- -----------
Non-current liabilities 68,137 34,227 50,097
Current liabilities 14,610 - 4,680
----------- ----------- -----------
82,747 34,227 54,777
----------- ----------- -----------
The ABSA Debt Facility incurs interest at a variable rate, based on LIBOR, which was 0.91% as at 31 December 2016, plus a weighted average margin of 8.29%. The facility is repayable in 18 quarterly instalments commencing 31 March 2017.
The ABSA Debt Facility is secured by a first ranking general notarial bond, over all movable assets for a total capital amount of US$165 million.
The Eurobonds have a coupon rate of 8.00% per annum payable quarterly. The effective interest rate is, in aggregate 12.47%. The interest can be settled in cash or through the issue of ordinary shares at market value based on the volume-weighted average price of the share for the 20 days preceding the interest calculation date. The bonds are repayable on the final maturity date, which is August 2022.
Other loans relate to the power project in Lesotho which was part funded by Lesotho based investors. The loans bear interest at the prime rate of interest in Lesotho, currently 11.75%, plus 1%, and are unsecured. The loans are repayable in quarterly instalments commencing 31 March 2017.
10. Discontinued operations
The Company decided not to recognise the Group's BK11 Mine as held for sale as at 30 June 2016 as disclosed in the Annual Report and Accounts of 30 June 2016.
The Group's Botswana operations remain under care and maintenance whilst the Company is focused on the commissioning of its Liqhobong Diamond Mine in Lesotho. The Company remains committed to seeking ways of unlocking shareholder value from the Group's Botswana assets.
As required by accounting standards certain comparative figures have been reclassified. The effect of the reclassification was disclosed in the 30 June 2016 Annual Report and Accounts.
11. Commitments and contingent liabilities
Capital Commitments
As at 31 December 2016, the Group had contracted capital commitments of US$7.0 million (H1 2015: US$26.6 million) relating to the Project. The total budget for the Project is US$185.4 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEEFWWFWSESD
(END) Dow Jones Newswires
March 28, 2017 02:00 ET (06:00 GMT)
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