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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Braemore Res | LSE:BRR | London | Ordinary Share | GB00B06GJQ01 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.10 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMBRR RNS Number : 9347Z Braemore Resources PLC 30 September 2009 Braemore Resources Plc ("Braemore" or "the Company") PRELIMINARY AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2009 POSTING OF ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING Braemore Resources plc ("Braemore" or "the Company"; JSE: BRE; AIM: BRR), the international group focused on mid-stream processing of platinum and nickel, announces its audited results for the year ended 30 June 2009. * The processing technologies employed, particularly ConRoast, address key challenges in the metals processing stream and provide cost-effective, environmentally-friendly, and independent solutions to processing nickel and PGM ores, particularly high chrome ores. * Braemore is working towards establishing the first, independent, black-empowered PGM smelting operation in South Africa, and is in discussions with various black empowerment groups to facilitate this process. * The ConRoast technology has been developed by Mintek, a South African government-funded institution and it is an integral part of the agreement that the technology does not only benefit the corporate landscape but the wider community through partnership with a broad-based empowerment entity. * Braemore has a highly skilled and entrepreneurial team, focused on delivery and operating. Technical and metallurgical studies have been conducted in South Africa and Australia and delivery on the key milestones will be reported on in due course. * Braemore is a geographically and metallurgically diversified emerging precious and base metals company that has made significant progress towards achieving its key objectives in the year under review. Highlights * Braemore and Jubilee Platinum propose to enter into a Scheme of Arrangement that will result in the merging of the two companies, creating a new force in the South African PGM sector. * Successfully renegotiated the ConRoast Agreement with Mintek, ensuring its sole, global exclusive licence for the technology over the life of the patent. * Braemore completed a successful placement for GBP6.5m in a difficult market. * The inward dual listing of the Company on the JSE (Code: BRE) was completed. * Expanded the ConRoast demonstration smelter capacity. * Completed various smelter trials demonstrating to industry the safety and robustness of the process * Completed Research programme on hydrometallurgical refining of the smelted alloy. * Entered into agreement with Jubilee Platinum over chrome tailings with PGMs. * Completed and formally presented detailed studies as requested by BHP Billiton on the Leinster and Kambalda Nickel Tailings projects. * Restructuring of the Company ahead of the merger with Jubilee Platinum plc ("Jubilee") to realise a significant reduction in overhead costs which will flow through into the next reporting period. * An implementation agreement with Jubilee on 3 July 2009, whereby Jubilee made available to Braemore a working capital facility whilst the offer is being implemented. Challenges impacting the financial results * Endured a small smelter break out which was safely contained and importantly resulted in no injuries to any of our personnel. * Encountered sharply decreasing smelter margins as a result of declining PGM prices resulting from the fast appreciating South African Rand. * Negotiating the conclusion of non-profitable smelting contracts due to the depressed metal prices and appreciating South African Rand. * Extended shutdown of smelter at year end to review process options to address operating margins and facilitate completion of hydrometallurgical refining process reviews. The Annual Report for the year ended 30 June 2009 is expected to be posted to shareholders by 30 September 2009. A Copy will be available on the same date on the Company's website: www.braemoreresources.com CHAIRMAN'S STATEMENT As anticipated in last year's review, the resources sector has experienced a period of uncertainty as the global economic crisis unfolds, negatively affecting commodities, equity markets and financial markets alike. The recession arrived with a vengeance that resulted in, amongst other things, significant drops in demand for nickel and platinum group metals ('PGM'). With the major demand sector for PGMs in autocatalysts in decline, the PGM prices retracted sharply. Demand for steel produced in China contracted sharply as did the associated demand for nickel, with record price falls. In this climate Braemore has proceeded to advance its projects with determination, applying improved metallurgical alternatives to both nickel and PGM processing. I will briefly summarise progress made in both the PGM and nickel projects during the year. Towards year end our competitive advantage has been confirmed. At the time of writing Braemore had been approached by two parties regarding the potential for corporate activity. This led to a formal offer received from Jubilee Platinum to merge the two entities Braemore and Jubilee into an enlarged Platinum and Nickel Group comprising of both short term cashflow potential and world class medium term assets. The proposed merger of Jubilee's PGM and nickel exploration assets with the smelting technology package and nickel assets of Braemore presents a compelling investment opportunity that should appeal to investors in the metals community. The skills of the combined management team and the enhanced ability to fully fund and relaunch smelting operations will create an enlarged and liquid South African mining group. This fits directly with Braemore's stated 'mine to metal' strategy. The significant PGM processing ability, with its patented technology is bolstered by the as yet unrealised nickel potential of Braemore in Australia, and Jubilee in Madagascar. The new entity has the potential to become a sustainable force in the South African platinum industry, which will be well positioned to participate in any further consolidation in the platinum industry. FINANCING AND CORPORATE ACTIVITIES The highlight of the year was the announcement of the proposed transaction between Braemore and Jubilee Platinum that will lead to a merger of the two companies. The start of the financial year was heralded by a placement that raised GBP6.5m (before expenses). The extremely difficult market conditions made this fund raising challenging and it was led by the strong support of major shareholders Atomaer and Best Asset Class (BAC), which both followed their rights. Completion was important at this time as the full impact of the global financial crisis started to become evident across equity and commodity markets alike. In July 2008, Braemore completed its pre-listing statement to meet JSE listing requirements and subsequently listed, on 16 July 2008, on the main board of the JSE, in the Platinum Sector. This listing was conducted to fulfil terms in our ConRoast Agreement with Mintek. Pan Palladium vote against JV with Braemore In late July 2008, Braemore was advised by Pan Palladium Limited that its shareholders had voted against proceeding in a venture with Braemore over its Platreef Project in South Africa. Corporate Activity Braemore completed the research program of the PGM refining process during the third Quarter of the financial year which enabled the marketing of this significant component of its technology offering to the Platinum Industry. The PGM industry acknowledged this significant achievement which led to an increased interest and to the potential for important strategic and corporate initiatives. The proposed merger with Jubilee Platinum confirms this interest. CONROAST PGM CONCENTRATE SMELTING OPERATIONS During the year we continued to produce under our unique ConRoast process, PGMs in alloy that was sold to refiners in Japan, Europe and South Africa. However, this material proved problematic to sell given few refiners were geared to accept an iron alloy containing PGM, and consequently less attractive PGM price terms were on offer. Initially some positive cash flow was generated from this activity but as metal prices fell sharply and the South African Rand appreciated strongly, margins were constrained. We were pleased to be able to announce specific off-take agreements with Northam Platinum and Anglo Platinum, the world's largest producer, relating to processing high chrome concentrates and other difficult to smelt material. This certainly added credibility to ConRoast as a commercial smelting technology able to process material on behalf of global PGM producers. In August 2008, we announced that the planned smelter expansion programme had commenced at Mintek. This was to replace the existing 1.5MW smelter with a new 3.2MW smelter and associated concentrate handling infrastructure. This expansion of smelting capacity was completed by early September 2008 and the commissioning programme commenced without any problems. In March 2009 we had an operational incident when molten matte came into contact with water. The resulting instant vaporisation of water created a loud explosion but little real damage. Our safety procedures were immediately implemented, worked seamlessly and an evacuation of the facility was successfully undertaken. The smelter was repaired at nominal cost and back on line after a few weeks, in April 2009. The limited cash flow generated earlier from smelting materials declined sharply as PGM prices fell, and the decision was taken, in May 2009, to temporarily halt smelting operations. The smelter operations have been an unqualified success in terms of physically proving and commercialising the ConRoast smelting process. We have demonstrated its ability to process a range of difficult to process high chrome concentrates, revert tailings and other materials. As discussed, the margins in the demonstration smelter operation have been under increasing pressure during the course of the financial year from escalating costs and declining metal prices. In the run up to the 2010 World Cup the South African Rand has become one of the strongest performing currencies in the world, appreciating 24% against the US$ from its lows during the year, adversely affecting an already lower US$ platinum price. The platinum price fell 40% from highs of US$2000/oz to US$1200/oz (after touching US$780/oz). With smelting margins contracting sharply it was concluded that there was little more for Braemore to learn from the smelting demonstration that has been under way since September 2007. The smelter was in the process of being ramped up at the time of the operational incident, operating at less than rated capacity and hence subject to higher unit costs. For all the reasons set out above, the decision was subsequently taken to put the smelter on temporary standby. HYDROMETALLURGICAL REFINING OF SMELTED ALLOY During the year Braemore was able to complete metallurgical work on the development of the hydrometallurgical leaching of smelted alloy. This step removes the iron, extracts base metals for sale and leaves a residual high value PGM concentrate suitable as direct feed to a PGM refinery. This refining step increases margins as the value of the product increases significantly. The high grade PGMs concentrates are an internationally sought after product The temporary closure of the smelter gives Braemore the opportunity to finalise its hydrometallurgical refining process with a view to installing a commercially viable facility in the near future. The planned refining plant will have the capacity to process smelted material from both the existing smelter at Mintek and the new smelter under review. The proposed merger with Jubilee will enhance the terms and availability of funds to complete the proposed new smelter. In August 2009 Jubilee, with support from Braemore, successfully raised GBP 13.25 million towards funding the expansion and ongoing operations of the new enlarged merged entity. In September 2009, Jubilee successfully raised an additional GBP 1.95 million for application to Braemore's operations. NICKEL TAILINGS PROJECTS On the nickel side of Braemore's business there has been significant progress. Progress has been made in metallurgical testwork, scoping studies and preparation and formal presentation of detailed reports on the Leinster and Kambalda nickel tailings projects, as requested by BHP Billiton. In January 2009 we were able to update shareholders on the progress made on the Leinster Nickel Project following on from the preliminary results from the independent consultants who examined all aspects of the project. This work was described in a scoping study and presented to BHP Billiton. Given the environment of lower nickel prices and sharply higher sulphur prices that prevailed during the course of the studies, a focus was kept on reducing both operating and capital costs where possible. Braemore has been complimented on the high quality of the technical work presented and we await BHP Billiton's final review shortly. THE WAY FORWARD Such innovative thinking has been at the heart of Braemore's nickel and PGM projects. The Company is proud of its achievements in these fields. In conjunction with its technology partner Mintek, the Company has achieved its stated research and development programme objectives of developing a proven, industry leading technology for the smelting of high chrome PGM concentrates. In light of this Braemore has cemented its relationship with Mintek by renegotiating and extending its global exclusive licence over the patented ConRoast technology. It is this technology that is now being recognised by our peers in the PGM sector. We have received numerous advances seeking access to the ConRoast smelting technology due to its proven ability to deal with difficult concentrates efficiently. Off-take agreements increasingly become more onerous and less available from traditional larger smelters. This was the original thinking that saw Braemore enter into agreements with Tharisa Minerals and Jubilee Resources' Maude project over PGM containing chrome concentrates. It did not take long for cashed up companies with synergies with Braemore to realise the potential offered by its smelting technology to achieve full vertical integration of similar projects. Several approaches have been made, due diligence conducted and offers negotiated. In the closing weeks of June 2009, Braemore announced that it was in discussions with Jubilee which could lead to a merger proposal being undertaken of superior long term strategic and current economic benefit to our shareholders. We strive to attain the goal of becoming a significant mid-stream processor of PGM and nickel and to build a vertically integrated mining and processing company. It has been a year of maximum effort from all concerned. I would like to thank our Board of directors and management for all their endeavours on behalf of Braemore shareholders. Mathews Phosa Non-Executive Chairman 29 September 2009 Enquiries: +----------------------------------------+----------------------------------------+ | Braemore Resources Plc | | +----------------------------------------+----------------------------------------+ | Leon Coetzer, Chief Executive Officer | +27 (0)11 465 1913 | | | | +----------------------------------------+----------------------------------------+ | | | +----------------------------------------+----------------------------------------+ | WH Ireland: (Nomad and Joint Broker) | | +----------------------------------------+----------------------------------------+ | James Joyce | +44 207 220 1666 | +----------------------------------------+----------------------------------------+ | | | +----------------------------------------+----------------------------------------+ | Mirabaud Securities: (Joint Broker) | | +----------------------------------------+----------------------------------------+ | Rory Scott | +44 207 878 3360 | +----------------------------------------+----------------------------------------+ | | | +----------------------------------------+----------------------------------------+ | Qinisele Resources: (RSA Corporate | | | Advisers) | | +----------------------------------------+----------------------------------------+ | Dennis Tucker | +27 82 492 4957 | +----------------------------------------+----------------------------------------+ | | | +----------------------------------------+----------------------------------------+ | Russell and Associates: (RSA Public | | | Relations) | | +----------------------------------------+----------------------------------------+ | Nicola Taylor / Charmane Russell | +27 11 880 3924 | +----------------------------------------+----------------------------------------+ | | | +----------------------------------------+----------------------------------------+ | Walbrook PR: (UK Public Relations) | | +----------------------------------------+----------------------------------------+ | Louise Goodeve / Leah Kramer | +44 207 933 8780 | +----------------------------------------+----------------------------------------+ | | | +----------------------------------------+----------------------------------------+ | Sasfin: (RSA Corporate Sponsor) | | +----------------------------------------+----------------------------------------+ | Sharon Owens | +27 11 809 7762 | +----------------------------------------+----------------------------------------+ Notes to Editors: Braemore Resources offers investors an attractive opportunity to enter into the PGMs and nickel business, initially through the mid-stream processing of these metals and, in time, through mine-to-market production opportunities. Braemore Resources is principally involved in evaluating, establishing and operating independent facilities for the roasting, smelting and refining of concentrates containing PGM and associated base metals and for the reclamation and processing of sulphide nickel tailings. Diversified both geographically and in terms of product, the Company is located in two key mining regions - Braemore Nickel in Western Australia and Braemore Platinum in South Africa. Braemore's access to proprietary technology, and in particular the Mintek ConRoast technology, which has successfully operated at test plant level, makes the Company well-positioned to become a significant player in the burgeoning South African PGMs sector, offering a more cost-effective, environmentally friendly and accessible smelting option to many junior mining companies. Unlike conventional smelters, ConRoast is unaffected by the high-chrome content ores, which are increasingly being mined. Braemore's management team, in South Africa and Australia, bring with them impressive credentials in their respective sectors, combined with a Board that has experience in metals processing, financial and commodities markets. CONSOLIDATED INCOME STATEMENT For the year ended 30 June 2009 +----------------------------------+------------+----------+-------------+--------------+ | | | | Group | Group | +----------------------------------+------------+----------+-------------+--------------+ | | | | 2009 | 2008 | | | | | GBP'000 | GBP'000 | +----------------------------------+------------+----------+-------------+--------------+ | Revenue | | | 3,558 | 8,963 | +----------------------------------+------------+----------+-------------+--------------+ | Cost of sales | | | (6,670) | (7,451) | +----------------------------------+------------+----------+-------------+--------------+ | Gross (loss)/profit | | | (3,112) | 1,512 | +----------------------------------+------------+----------+-------------+--------------+ | | | | | | +----------------------------------+------------+----------+-------------+--------------+ | Administrative expenses | | | (4,310) | (2,896) | +----------------------------------+------------+----------+-------------+--------------+ | Loss from operations | | | (7,422) | (1,384) | +----------------------------------+------------+----------+-------------+--------------+ | | | | | | +----------------------------------+------------+----------+-------------+--------------+ | Finance income | | | 78 | 236 | +----------------------------------+------------+----------+-------------+--------------+ | Finance costs | | | (74) | (261) | +----------------------------------+------------+----------+-------------+--------------+ | Loss before income tax expense | | | (7,418) | (1,409) | +----------------------------------+------------+----------+-------------+--------------+ | Income tax expense | | | - | - | +----------------------------------+------------+----------+-------------+--------------+ | Loss for the year | | | (7,418) | (1,409) | +----------------------------------+------------+----------+-------------+--------------+ | | | | | | +----------------------------------+------------+----------+-------------+--------------+ | | | | | | +----------------------------------+------------+----------+-------------+--------------+ | Loss per share expressed in | | | (0.94p) | (0.21p) | | pence | | | | | | - Basic,diluted and headline | | | | | +----------------------------------+------------+----------+-------------+--------------+ | | | | | | +----------------------------------+------------+----------+-------------+--------------+ | | | | | | +----------------------------------+------------+----------+-------------+--------------+ All the Group's activities are classed as continuing BALANCE SHEET As at 30 June 2009 +----------------------------------------------+----------+--------------+-------------+ | | | | Restated | +----------------------------------------------+----------+--------------+-------------+ | | | Group | Group | | | | 2009 | 2008 | | | | GBP'000 | GBP'000 | +----------------------------------------------+----------+--------------+-------------+ | ASSETS | | | | +----------------------------------------------+----------+--------------+-------------+ | Non-current assets | | | | +----------------------------------------------+----------+--------------+-------------+ | Intangible assets | | 46,797 | 43,382 | +----------------------------------------------+----------+--------------+-------------+ | Plant and equipment | | 2,881 | 91 | +----------------------------------------------+----------+--------------+-------------+ | Investment in subsidiaries | | - | - | +----------------------------------------------+----------+--------------+-------------+ | Other receivables | | 46 | 36 | +----------------------------------------------+----------+--------------+-------------+ | Total non-current assets | | 49,724 | 43,509 | +----------------------------------------------+----------+--------------+-------------+ | Current assets | | | | +----------------------------------------------+----------+--------------+-------------+ | Trade and other receivables | | 1,257 | 1,776 | +----------------------------------------------+----------+--------------+-------------+ | Inventory | | 907 | 4,257 | +----------------------------------------------+----------+--------------+-------------+ | Cash and cash equivalents | | 302 | 974 | +----------------------------------------------+----------+--------------+-------------+ | Total current assets | | 2,466 | 7,007 | +----------------------------------------------+----------+--------------+-------------+ | TOTAL ASSETS | | 52,190 | 50,516 | +----------------------------------------------+----------+--------------+-------------+ | | | | | +----------------------------------------------+----------+--------------+-------------+ | LIABILITIES | | | | +----------------------------------------------+----------+--------------+-------------+ | Current liabilities | | | | +----------------------------------------------+----------+--------------+-------------+ | Trade and other payables | | 6,846 | 5,527 | +----------------------------------------------+----------+--------------+-------------+ | | | | | +----------------------------------------------+----------+--------------+-------------+ | NET ASSETS | | 45,344 | 44,989 | +----------------------------------------------+----------+--------------+-------------+ | | | | | +----------------------------------------------+----------+--------------+-------------+ | EQUITY | | | | +----------------------------------------------+----------+--------------+-------------+ | Share capital | | 1,094 | 994 | +----------------------------------------------+----------+--------------+-------------+ | Share premium | | 18,001 | 12,079 | +----------------------------------------------+----------+--------------+-------------+ | Merger reserve | | 34,885 | 34,885 | +----------------------------------------------+----------+--------------+-------------+ | Share based payments reserve | | 758 | 717 | +----------------------------------------------+----------+--------------+-------------+ | Foreign exchange reserve | | 1,003 | (545) | +----------------------------------------------+----------+--------------+-------------+ | Retained losses | | (10,397) | (3,141) | +----------------------------------------------+----------+--------------+-------------+ | TOTAL EQUITY | | 45,344 | 44,989 | +----------------------------------------------+----------+--------------+-------------+ CASH FLOW STATEMENT For the year ended 30 June 2009 +----------------------------------------------+-----------+-------------+-------------+ | | | Group | Group | | | | 2009 | 2008 | | | | GBP'000 | GBP'000 | +----------------------------------------------+-----------+-------------+-------------+ | Cash flows from operating activities | | | | +----------------------------------------------+-----------+-------------+-------------+ | Loss for the period | | (7,418) | (1,409) | +----------------------------------------------+-----------+-------------+-------------+ | Interest expense | | 74 | 261 | +----------------------------------------------+-----------+-------------+-------------+ | Interest income | | (78) | (236) | +----------------------------------------------+-----------+-------------+-------------+ | Depreciation | | 534 | 31 | +----------------------------------------------+-----------+-------------+-------------+ | Share based payment | | 203 | - | +----------------------------------------------+-----------+-------------+-------------+ | Foreign exchange on loans to controlled | | - | - | | entities | | | | +----------------------------------------------+-----------+-------------+-------------+ | Decrease / (Increase) in inventory | | 3,350 | (4,257) | +----------------------------------------------+-----------+-------------+-------------+ | Decrease / (Increase) in receivables | | 509 | (1,447) | +----------------------------------------------+-----------+-------------+-------------+ | Increase/(decrease) in payables | | 2,990 | 3,678 | +----------------------------------------------+-----------+-------------+-------------+ | Net cash used in operating activities | | 164 | (3,379) | +----------------------------------------------+-----------+-------------+-------------+ | | | | | +----------------------------------------------+-----------+-------------+-------------+ | Cash flows from investing activities | | | | +----------------------------------------------+-----------+-------------+-------------+ | Payments to acquire plant and equipment | | (2,485) | (86) | +----------------------------------------------+-----------+-------------+-------------+ | Payment for investments | | - | (37) | +----------------------------------------------+-----------+-------------+-------------+ | Loan to controlled entities | | - | - | +----------------------------------------------+-----------+-------------+-------------+ | Payments to acquire intangible assets | | (4,377) | (4,146) | +----------------------------------------------+-----------+-------------+-------------+ | Interest received | | 78 | 236 | +----------------------------------------------+-----------+-------------+-------------+ | Net cash used in investing activities | | (6,784) | (4,033) | +----------------------------------------------+-----------+-------------+-------------+ | | | | | +----------------------------------------------+-----------+-------------+-------------+ | Cash flows from Financing activities | | | | +----------------------------------------------+-----------+-------------+-------------+ | Proceeds from issue of shares | | 6,501 | 77 | +----------------------------------------------+-----------+-------------+-------------+ | Issue costs paid | | (479) | - | +----------------------------------------------+-----------+-------------+-------------+ | Interest payable | | (74) | (261) | +----------------------------------------------+-----------+-------------+-------------+ | Net cash generated from / (used in) | | 5,948 | (184) | | financing activities | | | | +----------------------------------------------+-----------+-------------+-------------+ | | | | | +----------------------------------------------+-----------+-------------+-------------+ | Net increase/(decrease) in cash and cash | | (672) | (7,596) | | equivalents | | | | +----------------------------------------------+-----------+-------------+-------------+ | Cash and cash equivalents at beginning of | | 974 | 8,570 | | year | | | | +----------------------------------------------+-----------+-------------+-------------+ | Cash and cash equivalents at 30 June | | 302 | 974 | +----------------------------------------------+-----------+-------------+-------------+ | | | | | +----------------------------------------------+-----------+-------------+-------------+ | | | | | +----------------------------------------------+-----------+-------------+-------------+ STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2009 +---------------------------+--------------+-------------------+------------------+ | | Share | Share premium | Merger reserve | | | capital | reserve | | +---------------------------+--------------+-------------------+------------------+ | Group | GBP'000 | GBP'000 | GBP'000 | +---------------------------+--------------+-------------------+------------------+ | As at 1 July 2007 | 977 | 11,990 | 29,395 | +---------------------------+--------------+-------------------+------------------+ | Correction of prior | - | - | 3,050 | | period adjustment (refer | | | | | note 24) | | | | +---------------------------+--------------+-------------------+------------------+ | | 977 | 11,990 | 32,445 | +---------------------------+--------------+-------------------+------------------+ | Loss for the period | - | - | - | +---------------------------+--------------+-------------------+------------------+ | Currency translation | - | - | - | | differences | | | | +---------------------------+--------------+-------------------+------------------+ | Total recognised income | - | - | - | | and expense for the year | | | | +---------------------------+--------------+-------------------+------------------+ | Share capital issued | 16 | - | 2,440 | +---------------------------+--------------+-------------------+------------------+ | Acquisition of minority | - | - | - | | interests in subsidiary | | | | +---------------------------+--------------+-------------------+------------------+ | Exercise of options | 1 | 89 | - | +---------------------------+--------------+-------------------+------------------+ | Cancellation of options | - | - | - | +---------------------------+--------------+-------------------+------------------+ | Balance at 30 June 2008 | 994 | 12,079 | 34,885 | +---------------------------+--------------+-------------------+------------------+ | | | | | +---------------------------+--------------+-------------------+------------------+ | Currency translation | - | - | - | | differences | | | | +---------------------------+--------------+-------------------+------------------+ | Loss for the period | - | - | - | +---------------------------+--------------+-------------------+------------------+ | Total recognised income | - | - | - | | and expense for the year | | | | +---------------------------+--------------+-------------------+------------------+ | Share capital issued | 100 | 6,401 | - | +---------------------------+--------------+-------------------+------------------+ | Share issue expenses | - | (479) | - | +---------------------------+--------------+-------------------+------------------+ | Expiry of options | - | - | - | +---------------------------+--------------+-------------------+------------------+ | Issue of options | - | - | - | +---------------------------+--------------+-------------------+------------------+ | Balance at 30 June 2009 | 1,094 | 18,001 | 34,885 | +---------------------------+--------------+-------------------+------------------+ | | | | | +---------------------------+--------------+-------------------+------------------+ +---------------------------+-------------+-----------+-----------+------------+-----------+ | | Share based | Foreign | Minority | Retained | Total | | | payment | exchange | interest | earnings | equity | | | reserve | reserve | | | | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Group | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +---------------------------+-------------+-----------+-----------+------------+-----------+ | As at 1 July 2007 | 814 | (6) | 17 | (1,817) | 41,370 | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Correction of prior | - | - | - | - | 3,050 | | period adjustment (refer | | | | | | | note 24) | | | | | | +---------------------------+-------------+-----------+-----------+------------+-----------+ | | 814 | (6) | 17 | (1,817) | 44,420 | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Loss for the period | - | - | - | (1,409) | (1,409) | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Currency translation | - | (539) | - | - | (539) | | differences | | | | | | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Total recognised income | - | (539) | - | (1,409) | (1,948) | | and expense for the year | | | | | | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Share capital issued | - | - | - | - | 2,456 | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Acquisition of minority | - | - | (17) | - | (17) | | interests in subsidiary | | | | | | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Exercise of options | (12) | - | - | - | 78 | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Cancellation of options | (85) | - | - | 85 | - | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Balance at 30 June 2008 | 717 | (545) | - | (3,141) | 44,989 | +---------------------------+-------------+-----------+-----------+------------+-----------+ | | | | | | | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Currency translation | - | 1,548 | - | - | 1,548 | | differences | | | | | | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Loss for the period | - | - | - | (7,418) | (7,418) | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Total recognised income | - | 1,548 | - | (7,418) | (5,870) | | and expense for the year | | | | | | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Share capital issued | - | - | - | - | 6,501 | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Share issue expenses | - | - | - | - | (479) | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Expiry of options | (162) | - | - | 162 | - | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Issue of options | 203 | - | - | - | 203 | +---------------------------+-------------+-----------+-----------+------------+-----------+ | Balance at 30 June 2009 | 758 | 1,003 | - | (10,397) | 45,344 | +---------------------------+-------------+-----------+-----------+------------+-----------+ | | | | | | | +---------------------------+-------------+-----------+-----------+------------+-----------+ COMMENTARY NOTE These consolidated financial statements were authorised for issue by the Board of Directors on 30 September 2009. These results are extracted from the full annual report which include all the notes to the accounts. The full audited accounts are available at the Company's website www.braemoreresources.com 1. BASIS OF PREPARATION The financial statements are presented in pounds sterling, rounded to the nearest thousand. The accounts have been prepared on a going concern basis. On 3 July 2009 Braemore and Jubilee entered into the Scheme whereby Braemore shareholders will receive 1 New Jubilee Share for every 15.818 Scheme Shares held. The Scheme is subject to various conditions including, inter alia, acceptance at a court meeting and a subsequent shareholder general meeting, currently expected to occur on 7 October 2009. Jubilee has undertaken to fund the operating costs of the Group whilst the Scheme is being implemented up to ZAR 7.0 million (GBP0.58 million1), and to settle some of the Group's current liabilities to a maximum of ZAR 43.0 million (GBP3.58 million1). At the date of this report, the Group has received ZAR 34.51 million (GBP2.88 million1) in funding under this arrangement, with ZAR 15.49 million (GBP1.29 million1) in funding still available. These amounts will be repayable by the Company if the Scheme is not completed. The Directors are confident that the shareholders will accept their recommendation to vote in favour of the Scheme and certain Braemore shareholders have given irrevocable undertakings to vote in favour of the Scheme resolutions in respect of shares representing 50.0% of the existing share capital of Braemore. However, there can be no guarantee that the vote will result in the acceptance of the Scheme resolutions, whereupon alternative funding for the Group will need to be sought, and therefore there exists a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern. Notwithstanding this uncertainty, the Directors are confident that based on the irrevocable undertakings received and enquiries with some of the Company's other significant shareholders, the Scheme will be approved, and therefore these financial statements have been prepared on a going concern basis. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern. 1 Applying the ZAR:GBP exchange rate at 24 September 2009. These financial statements have been prepared in accordance with IFRS as adopted for use in the European Union (EU), IAS 34, the JSE Listings Requirements and with those parts of the South African Companies Act 2006 applicable to companies reporting under IFRS. In addition, the Group also complied with IFRS as issued by the International Accounting Standards Board (IASB). The accounting policies applied are consistent with those of the previous financial year. THE AUDIT REPORT The audited results for the year ended 30 June 2009 have been audited by BDO Spencer Steward (Johannesburg) Incorporated and their opinion is available for inspection at the Company's registered office Stoney Ridge Office Park, Cnr Witkoppen and Waterford rd, Kleve Hill Park, Fourways Segment revenue and segment result +---------------------------------------+----------+----------+----------+----------+ | | Segment revenue | Segment result | +---------------------------------------+---------------------+---------------------+ | Continuing operations | 2009 | 2008 | 2009 | 2008 | | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +---------------------------------------+----------+----------+----------+----------+ | Nickel (Australia) | - | - | (946) | (1,226) | +---------------------------------------+----------+----------+----------+----------+ | PGM Smelters (South Africa) | 3,558 | 8,963 | (4,720) | 873 | +---------------------------------------+----------+----------+----------+----------+ | Administration and Corporate (United | - | - | (1,756) | (1,031) | | Kingdom) | | | | | +---------------------------------------+----------+----------+----------+----------+ | | 3,558 | 8,963 | (7,422) | (1,384) | +---------------------------------------+----------+----------+----------+----------+ | Interest revenue | | | 78 | 236 | +---------------------------------------+----------+----------+----------+----------+ | Finance costs | | | (74) | (261) | +---------------------------------------+----------+----------+----------+----------+ | Loss before tax | | | (7,418) | (1,409) | +---------------------------------------+----------+----------+----------+----------+ | Income tax expense | | | - | - | +---------------------------------------+----------+----------+----------+----------+ | Loss after tax | | | (7,418) | (1,409) | +---------------------------------------+----------+----------+----------+----------+ Revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the year (2008: Nil). The share based payment charge is included within the United Kingdom segment result. Segment assets and liabilities +--------------------------------------+-----------+-----------+----------+----------+ | | Total | Total | | | Assets | Liabilities | +--------------------------------------+-----------------------+---------------------+ | | 2009 | Restated | 2009 | 2008 | | | GBP'000 | 2008 | GBP'000 | GBP'000 | | | | GBP'000 | | | +--------------------------------------+-----------+-----------+----------+----------+ | Nickel (Australia) | 36,035 | 35,596 | 238 | 544 | +--------------------------------------+-----------+-----------+----------+----------+ | PGM Smelters (South Africa) | 16,029 | 14,542 | 6,432 | 4,782 | +--------------------------------------+-----------+-----------+----------+----------+ | Administration and Corporate (United | 126 | 378 | 176 | 201 | | Kingdom) | | | | | +--------------------------------------+-----------+-----------+----------+----------+ | Total of all segments | 52,190 | 50,516 | 6,846 | 5,527 | +--------------------------------------+-----------+-----------+----------+----------+ Other segment information +---------------------------------------+----------+------------+----------+------------+ | | Depreciation and | Capital expenditure | | | amortisation | | +---------------------------------------+-----------------------+-----------------------+ | Continuing operations | 2009 | 2008 | 2009 | 2008 | | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +---------------------------------------+----------+------------+----------+------------+ | Nickel (Australia) | 6 | 1 | 469 | 1,158 | +---------------------------------------+----------+------------+----------+------------+ | PGM Smelters (South Africa) | 508 | 10 | 5,110 | 6,004 | +---------------------------------------+----------+------------+----------+------------+ | Administration and Corporate (United | 20 | 20 | - | 58 | | Kingdom) | | | | | +---------------------------------------+----------+------------+----------+------------+ | | 534 | 31 | 5,579 | 7,220 | | | | | | | +---------------------------------------+----------+------------+----------+------------+ NOTES TO THE FINANCIAL STATEMENTS 1. LOSS PER SHARE The loss for the year attributed to shareholders is GBP7,418,000 (2008: loss GBP1,409,000). This is divided by the weighted average number of ordinary shares in issue calculated to be 788.8 million (2008: 680.8 million) to give a basic loss per share of 0.94p (2008: loss per share of 0.21p). The headline loss per share calculation is the same as the basic loss per share. As inclusion of the potential ordinary shares would result in a decrease in the loss per share they are considered to be non-dilutive and, as such, the effect of the dilution has not been applied in the calculation. The potential future share issues that may dilute the loss per share relate to 305,000,000 performance shares (2008: 305,000,000) and 29,285,899 options on issue (2008: 37,835,889). 2. POST BALANCE SHEET EVENTS On 3 July 2009, the Group received a notice of firm intention from Jubilee Platinum Plc ('Jubilee') to make an Offer to acquire the entire issued and to be issued share capital of the Company. Jubilee has undertaken to fund the operating costs of the Group whilst the Scheme is being implemented up to ZAR 7.0 million (GBP0.58 million1), and to settle some of the Group's current liabilities to a maximum of ZAR 43.0 million (GBP3.58 million1). These amounts will be repayable by the Company if the Offer does not proceed. Additionally, a 1% compensation fee will be payable by Braemore to Jubilee if the Offer does not proceed for reasons relating to Braemore. Similarly, a 1% compensation fee will be payable by Jubilee to Braemore if the Offer does not proceed for reasons relating to Jubilee. As part of the outcome of this transaction will be the delisting of Braemore Resources from both the JSE and AIM. At the date of this report, Jubilee has advanced the Group ZAR 34.51 million (GBP2.88 million1). 1 Applying the ZAR:GBP exchange rate at 24 September 2009. 3. PRIOR PERIOD ADJUSTMENT - PERFORMANCE SHARES AND BUSINESS COMBINATIONS On 28 July 2005, the Group completed the acquisition of Braemore Nickel Pty Ltd ('Braemore Nickel') (formerly Western Consolidated Nickel Pty Ltd) with a component of the consideration being 305 million Performance Shares. The Directors originally valued the Performance Shares at GBPNil, on the grounds that it was inherently difficult to measure reliably their fair value at the date of issue. However, following discussion with the Financial Reporting Review Panel, the Directors have re-visited this issue as equity instruments issued as consideration must be measured at their fair value at the date of acquisition and there is no exemption on the grounds that such fair value could not be measured reliably. As such, the Directors have used the Black-Scholes Model to value the Performance Shares. The Directors have assessed the fair value of the Performance Shares as GBP3,050,000, as at the date of their issue on 28 July 2005. The key inputs applied to the Black-Scholes Model included the assessed fair value of ordinary shares issued for the acquisition of WCN on 28 July 2005 of 10p; risk free interest rate of 4.20%; and expected volatility of 50%. In assessing the fair value of the Performance Shares, a discount of 90% has been applied to the theoretical value calculated by the Black-Scholes Model to take into account the estimated probability of the Performance Milestones being achieved of 10%. This applied estimated probability of the Performance Milestones being achieved, took into account the level of the scoping and desk top technical and economic studies, including conceptual flow sheet and process, undertaken to the date of the acquisition of WCN. This applied probability of the achievement of the Performance Milestone is as at the 28 July 2005, and does not represent the Director's current assessment. As a result of this restatement the intangible assets and merger reserve of the Consolidated Group, and investments and merger reserve of the Company, are increased by GBP3,050,000. The Income Statement and Statement of Cash Flows in the current period are unaffected by this restatement. DIVIDEND No dividend has been declared for the period. BOARD CHANGES Leon Coetzer and Dr Mathews Phosa were appointed to the Board on 1st July 2008 and 2nd of October 2008 respectively. POSTING OF ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING The annual report will be posted to shareholders on 30 September 2009. Notice is hereby given that the annual general meeting of shareholders will be held at the offices of Braemore Resources Plc 18-19 Pall Mall London SW1Y5LU on the 2nd December 2009 at 11:00 Am to transact the business as stated in the notice of annual general meeting forming part of the annual financial statements. This information is provided by RNS The company news service from the London Stock Exchange END FR URUWRKURKORR
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