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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 |
TIDMFDI
RNS Number : 9976I
Firestone Diamonds PLC
27 March 2018
27 March 2017
Firestone Diamonds plc
("Firestone", the "Group" or the "Company") (AIM: FDI)
Unaudited Interim Results for the six months to 31 December 2017
Firestone Diamonds plc, the AIM-quoted diamond mining company, is pleased to announce its unaudited interim results for the six months ended 31 December 2017 ("H1 2018" or the "Period").
HIGHLIGHTS FOR THE PERIOD
LIQHOBONG DIAMOND MINE ("Liqhobong", the "Project" or the "Mine")
-- Zero lost time injury record maintained, with over 5.3 million man hours worked -- Liqhobong commenced commercial production from 1 July 2017 -- Approval of a revised mining plan based on maximising cash flow in the near term
-- 1.9 million tonnes treated in the six months to 31 December, ahead of the 3.6 million tonne per annum target
-- 379,716 carats recovered, including the recovery of the largest diamond to date, a 134 carat gem-quality light yellow diamond
-- Average value per carat of US$74 achieved in the first half -- Cash operating cost per tonne treated (including waste) of US$11.97
-- 1.5 million waste tonnes stripped, slightly ahead of the 2.8 million tonnes required by the revised mine plan in 2018
FINANCIAL
-- Revenue of US$26 million -- Cash of US$8.8 million generated from operations -- Loss for the Period of US$7.8 million (H1 2017: US$8.8 million) -- Loss per share of 2.2 cents (H1 2017: 2.0 cents)
-- Successful US$25 million equity raise in December in conjunction with ABSA debt restructuring
-- Cash balance at 31 December 2017 of US$29.7 million
POST PERIOD
-- In February, subsequent to the period end, the Group held its first sale of 2018 when all 114,887 carats on offer were sold at an average value of US$82 per carat realising total sale proceeds of US$9.4 million.
-- ECIC approval in relation to the ABSA debt restructuring received subject to final documentation and signature.
Stuart Brown, Chief Executive Officer of Firestone, commented:
"In our first six months of full scale production at Liqhobong, processing rates were above expectations, while costs continued to remain below our targeted levels. To address the lower than expected diamond values, we announced a revised mine plan at the end of the period, which is designed to maximise cash flow in the shorter term while we address diamond value recoveries.
"The Company entered the second half of the financial year on a strong financial footing, having raised US$25.0 million at the end of the period, while also proposing revised terms on its credit facility, as it embarks on its revised mining plan.
"With the strong retail season and the conservative sales volumes from all the major producers towards the end of 2017, we have seen a very encouraging start to 2018 for the rough market, with our first sale of the calendar year realising an average value of US$82 per carat.
"We look forward to updating shareholders in the next quarter on our diamond recovery initiatives and the improving market conditions for the diamond sector."
For further information, please visit the Company's website or contact:
+44 (0)20 Firestone Diamonds plc 8741 7810 Stuart Brown Macquarie Capital (Europe) Limited +44(0)20 3037 (Nomad and Broker) 2000 Nick Stamp Nicholas Harland Guy de Freitas Tavistock (Public and Investor +44 (0)20 Relations) 7920 3150 Simon Hudson Jos Simson Gareth Tredway
Background information on Firestone
Firestone is an international diamond mining company with operations focused in Lesotho. Firestone commenced commercial production in July 2017 at the Liqhobong Diamond Mine in 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").
OPERATIONAL REVIEW FOR THE 6 MONTH PERIODING 31 DECEMBER 2017
Introduction
Once again, it was pleasing that we achieved all of our production performance targets without a single Lost Time Injury, which is an exceptional achievement.
It should be noted that the comparative figures provided in these unaudited interim financial statements are based on the accounting which applied to operations prior to commercial production being achieved. As a result all income and expenditure related to the operation in the comparative periods was capitalised to the cost of the asset in the statement of financial position. By contrast, since commercial production was established at Liqhobong on 30 June 2017, these interim results present all income and expenditure items in the consolidated statement of comprehensive income.
Summary
Q1 Q2 HY2018 Q1 Q2 HY2017 ----------------- ---------- ---------- ---------- -------- -------- ---------- Mining ----------------- ---------- ---------- ---------- -------- -------- ---------- Ore tonnes 944,582 963,213 1,907,795 - 343,618 343,618 ----------------- ---------- ---------- ---------- -------- -------- ---------- Waste tonnes 861,331 626,742 1,488,073 392,339 421,839 814,178 ----------------- ---------- ---------- ---------- -------- -------- ---------- Total tonnes mined 1,805,913 1,589,955 3,395,868 392,339 765,457 1,157,796 ----------------- ---------- ---------- ---------- -------- -------- ---------- Total tonnes treated 944,582 963,213 1,907,795 - 343,618 343,618 ----------------- ---------- ---------- ---------- -------- -------- ---------- Carat recovered (carats) 199,007 180,709 379,716 - 51,898 51,898 ----------------- ---------- ---------- ---------- -------- -------- ---------- Grade (carats per hundred tonnes) 21.1 18.8 19.9 - 15.1 15.1 ----------------- ---------- ---------- ---------- -------- -------- ---------- Revenue ----------------- ---------- ---------- ---------- -------- -------- ---------- Diamonds sold (carats) 195,330 156,942 352,272 - - - ----------------- ---------- ---------- ---------- -------- -------- ---------- Revenue (US$'m) 13.5 12.5 26.0 - - - ----------------- ---------- ---------- ---------- -------- -------- ---------- Price achieved (US$/ct) 69 80 74 - - - ----------------- ---------- ---------- ---------- -------- -------- ----------
Production
Commercial production commenced at Liqhobong from 1 July 2017. Consequently, this is the first complete reporting period during which the plant operated at steady state. During the period, a total of 3.4 million tonnes was mined, 1.9 million tonnes of ore and 1.5 million tonnes of waste. The Mine treated 1.9 million tonnes, 61% from the lower grade K2 material in the pit which included some dilution, 20% from K5, 17% from K4 and the remaining 2% from historic low grade stockpiles.
The production plant operated above expectation, achieving an average throughput rate of 522 tonnes per hour (tph) compared to an expected 500tph. The engineering department achieved a plant utilisation rate of 83%, ahead of the target of 81%.
During the period, 379,716 carats were recovered, 199,007 in Q1 and 180,709 in Q2. In the prior year, the grade increased steadily over the ramp-up period to the end of June 2017. During the half year to December 2017, the grade decreased as expected from 21.1 cpht in Q1 to 18.8 cpht in Q2 as a result of lower grade ore blocks that were scheduled to be mined for that period. An increase in grade is expected in the second half of FY2018 as mining moves to the higher grade ore.
Since commencement of the mining operations in late 2016, a combination of lower than expected average diamond values realised at sale, and earlier waste stripping prompted a revision of the original 15 year mine plan.
During the period, the Company approved a revised mine plan based on a shorter 9 year mine life aimed at maximising cash flow in the near term whilst retaining optionality to revert to the original longer life of mine plan should the average diamond values increase or should there be an improvement in market conditions. The revised mine plan requires 76.0 million fewer waste tonnes to be mined which will reduce costs significantly.
The Group was successful in raising US$25.0 million in December 2017 which, together with proposed revised terms from ABSA bank, provide the Group with sufficient resources to continue mining according to the revised mine plan. ABSA's proposed revised terms have been agreed and are only subject to final documentation and signature, both of which are expected to be concluded in Q4-FY2018.
Diamond sales
A total of 352,272 carats were sold during the four sales held in the period for total proceeds of US$26.0 million, and included Liqhobong's second >US$1 million stone. The first two sales achieved an average value of US$69 per carat due to the lower than expected occurrence of better quality diamonds recovered, and a generally weaker market. In the second quarter an improvement in market conditions, when very competitive bidding was seen on the lower category run of mine diamonds and particularly strong demand was experienced for the fancy yellow diamonds offered, resulted in a higher average diamond value achieved for the final two sales of US$80 per carat, increasing the average value realised for the period to US$74 per carat.
Operating costs
Cash operating costs of US$11.97 per tonne treated were lower than guidance of between US$12 and US$14 per tonne treated despite local currency strength, where the Lesotho Maloti appreciated 4% against the dollar from LSL12.89:US$1 to LSL12.34:US$1. The local currency strength resulted in higher than expected costs in US dollar terms, however, continued careful cost management throughout the period resulted in cost savings which offset the higher costs resulting from the stronger local currency.
HY2018 FY2017 ---------------------------------- ------- ------- Unit costs (US$) ---------------------------------- ------- ------- Direct cash costs (before waste) per tonne treated 9.21 10.05 ---------------------------------- ------- ------- Direct cash costs (including waste) per tonne treated 11.97 12.26 ---------------------------------- ------- ------- Operating costs per tonne treated (including depreciation and amortisation) 13.56 16.35 ---------------------------------- ------- ------- Unit costs (Maloti) ---------------------------------- ------- ------- Direct cash costs (before waste) per tonne treated 124.22 136.88 ---------------------------------- ------- ------- Direct cash costs (including waste) per tonne treated 158.26 167.03 ---------------------------------- ------- ------- Operating costs per tonne treated (including depreciation and amortisation) 178.32 222.70 ---------------------------------- ------- -------
Cashflow
During the period, the Group generated US$8.8 million from operations. An increase in working capital of US$4.7 million was due to lower creditor balances and a higher value of diamond inventory on hand at the end of the period. Liqhobong spent US$7.5 million on capital expenditure which comprised US$5.3 million on waste stripping, US$1.7 million on the residue tailings facility and US$0.5 million on stay in business expenditure. Total net expenditure of US$3.4 million was funded from opening cash.
During the period, the Group raised a net US$15.6 million which included net proceeds of US$24.0 million from the US$25 million capital raise and US$2.0 million from the Standby Facility which were offset by capital and interest payments of US$10.4 million in respect of the ABSA debt facility.
The Group ended the period with a cash balance of US$29.7 million.
Conclusion
During its first six months of commercial production, the Mine maintained its exemplary safety record which is an aspect that receives our constant attention. At the corporate level, Firestone completed its US$25 million capital raise in December in conjunction with a restructuring of the ABSA debt facility which has now received ECIC approval and remains subject only to final documentation and signature. The financial impact of the restructuring, as previously disclosed in the 1 December 2017 announcement, remains the same in all material respects.
The funds raised together with the revised debt terms place the Group on a sound financial footing, with the ability to realise its revised mine plan that maximises near term cashflows. With this financing completed, the Group has sufficient headroom from its cash on hand and available debt facilities to continue to operate for the foreseeable future which also takes into account the short-term strength in the local currency which has resulted in a 10% increase in operating costs for January .
Consolidated Statement of Comprehensive Income
For the six months ended 31 December 2017
(Unaudited)
6 months 6 months ended ended Year ended 31 December 31 December 30 June 2017 2016 2017 Unaudited Unaudited Audited Note US$'000 US$'000 US$'000 Revenue 2 24 953 - - Cost of sales (23 415) - - ------------ ------------ ----------- Gross Profit 1 538 - - Other income 443 408 1 232 Total administrative expenses (5 940) (3 560) (130 472) ------------ ------------ ----------- Selling and distribution (637) - - Other administrative expenses (957) (150) (518) Impairment charge - - (122 602) Amortisation and depreciation (1 252) (1 121) (2 316) Share-based payments (1 464) (467) (1 268) Care and maintenance - (245) (534) Corporate expenses (1 630) (1 577) (3 234) ------------ ------------ ----------- Loss before finance charges and income tax (3 959) (3 152) (129 240) Finance income 67 218 460 Finance costs 3 (6 427) (1 205) (1 235) ------------ ------------ ----------- Loss before tax (10 319) (4 139) (130 015) Taxation credit/(charge) 4 2 569 (4 636) (21 664) ----------- Loss after tax for the period (7 750) (8 775) (151 679) ------------ ------------ ----------- Loss after tax for the period attributable to: Owners of the parent (7 180) (6 253) (116 411) Non-controlling interest (570) (2 522) (35 268) ------------ ------------ ----------- Loss after tax for the period (7 750) (8 775) (151 679) ------------ ------------ ----------- Other comprehensive income: Items that may be reclassified subsequently to profit and loss Exchange gains on translating foreign operations net of tax 5 540 16 974 29 878 Profit on cash flow hedges 349 1 454 1 498 ------------ ------------ ----------- Other comprehensive income 5 889 18 428 31 376 ------------ ------------ ----------- Total comprehensive (loss)/income for the period (1 861) 9 653 (120 303) ------------ ------------ ----------- Total comprehensive (loss/)income for the period attributable to: Owners of the parent (2 790) 7 618 (92 475) Non-controlling interests 929 2 035 (27 828) ------------ ------------ ----------- Total comprehensive (loss)/income for the period (1 861) 9 653 (120 303) ------------ ------------ ----------- Loss per share Basic loss per share (US cents) 5 (2.2) (2.0) (36.9) Diluted loss per share Diluted loss per share (US cents) 5 (2.2) (2.0) (36.9)
Consolidated Statement of Financial Position
As at 31 December 2017
(Unaudited)
31 December 31 December 30 June 2017 2016 2017 Unaudited Unaudited Audited Note US$'000 US$'000 US$'000 ASSETS Non-current assets Property, plant and equipment 6 119 859 214 676 118 590 Deferred tax 7 6 627 18 057 3 761 Loan receivable - 3 002 - Total non-current assets 126 486 235 735 122 351 ------------ ------------ ---------- Current assets Inventories 8 9 961 6 859 6 420 Trade and other receivables 3 001 4 002 3 590 Other financial assets - 39 - Cash and cash equivalents 29 688 3 346 17 053 ------------ ------------ ---------- Total current assets 42 650 14 246 27 063 ------------ ------------ ---------- Total assets 169 136 249 981 149 414 ============ ============ ========== EQUITY Share capital 9 166 094 163 538 163 557 Share premium 190 056 166 469 167 349 Reserves (14 280) (31 727) (20 089) Accumulated losses (252 587) (135 294) (245 452) ------------ ------------ ---------- Total equity attributable to equity holders of the parent 89 283 162 986 65 365 Non-controlling interests (41 265) (12 823) (42 194) ------------ ------------ ---------- Total equity 48 018 150 163 23 171 ------------ ------------ ---------- LIABILITIES Non-current liabilities Borrowings 10 99 169 68 137 79 734 Provisions 4 566 3 588 4 233 ------------ ------------ ---------- Total non-current liabilities 103 735 71 725 83 967 ------------ ------------ ---------- Current liabilities Borrowings 10 285 14 610 23 057 Other financial liabilities 24 418 357 Trade and other payables 16 625 12 632 18 472 Provisions 449 433 390 Total current liabilities 17 383 28 093 42 276 ------------ ------------ ---------- Total liabilities 121 118 99 818 126 243 ------------ ------------ ---------- Total equity and liabilities 169 136 249 981 149 414 ============ ============ ==========
Consolidated Statement of Changes in Equity
For the six months ended 31 December 2017
(Unaudited)
Share-based Share Share Warrant Merger Hedging payment Translation Accumulated Non-con-trolling Total capital premium reserve reserve Reserve reserve reserve losses Total interest equity US$'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 2016 163 166 (42 (135 162 (12 150 (Unaudited) 538 469 7 609 (1 614) (478) 4 943 187) 294) 986 823) 163 -------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- -------- Profit for the (110 (110 (32 (142 period - - - - - - - 158) 158) 570) 728) Foreign currency translation differences - - - - - - 9 610 - 9 610 3 213 12 823 Profit on cash flow hedges - - - - 455 - - - 455 (14) 441 -------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- -------- Total comprehensive loss for the (110 (100 (29 (129 period - - - - 455 - 9 610 158) 093) 371) 464) -------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- -------- Contributions by and distributions to owners Issue of ordinary shares 19 880 - - - - - - 899 - 899 Share-based payment transactions - - - - - 1 573 - - 1 573 - 1 573 Total contributions by and distributions to owners 19 880 - - - 1 573 - - 2 472 - 2 472 -------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- -------- Balance at 30 June 163 167 (32 (245 (42 2017 (Audited) 557 349 7 609 (1 614) (23) 6 516 577) 452) 65 365 194) 23 171 -------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- -------- Loss for the period - - - - - - - (7 180) (7 180) (570) (7 750) Foreign currency translation differences - - - - - - 4 128 - 4 128 1 412 5 540 Profit on cash flow hedges - - - - 262 - - - 262 87 349 -------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- -------- Total comprehensive loss for the period - - - - 262 - 4 128 (7 180) (2 790) 929 (1 861) -------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- -------- Contributions by and distributions to owners Issue of ordinary shares 2 537 23 683 - - - - - - 26 220 - 26 220 Share issue expense - (976) - - - - - - (976) - (976) Share-based payment transactions - - - - - 1 464 - - 1 464 - 1 464 Share-based payment lapse/reversals - - - - - (45) - 45 - - - Total contributions by and distributions to owners 2 537 22 707 - - - 1 419 - 45 26 708 - 26 708 -------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- -------- Balance at 31 December 2017 166 190 (28 (252 (41 (Unaudited) 094 056 7 609 (1 614) 239 7 935 449) 587) 89 283 265) 48 018 -------- -------- -------- -------- -------- ------------ ------------ ------------ -------- ----------------- --------
Consolidated Statement of Cash Flows
For the six months ended 31 December 2017
(Unaudited)
6 months 6 months ended ended Year ended 31 December 31 December 30 June 2017 2016 2017 Unaudited Unaudited Audited Note US$'000 US$'000 US$'000 Cash flows from operating activities Loss before taxation (10 319) (4 139) (130 015) Adjustments for: Impairment charge - - 122 602 Depreciation, amortisation and impairment 11 222 1 121 2 316 Effect of foreign exchange movements - (250) - Equity-settled share-based payments 1 464 467 1 268 Changes in provisions 60 (88) (11) Finance cost 6 427 1 205 1 235 Finance income (67) (218) (460) Net cash flows from/(used) in operating activities before working capital changes 8 787 (1 902) (3 065) Increase in inventories (3 186) (6 589) (5 714) Decrease/(increase) in trade and other receivables 870 21 (648) (Decrease)/increase in trade and other payables (2 390) (2 106) 5 696 Net cash flows from/(used in) operating activities 4 081 (10 576) (3 731) Cash flows used in investing activities Additions to property, plant and equipment (7 545) (19 919) (31 158) Net cash used in investing activities (7 545) (19 919) (31 158) Cash flows from financing activities Proceeds from issue of ordinary shares 25 000 - - Share issue expense (976) - - Increase in borrowings 2 000 25 000 44 000 Repayment of borrowings (8 125) - (1 509) Finance cost (2 326) (1 583) (462) Finance income 67 32 73 Net cash from financing activities 15 640 23 449 42 102 Net increase/(decrease) in cash and cash equivalents 12 176 (7 046) (7 213) Cash and cash equivalents at beginning of period 17 053 10 282 10 282 Exchange rate movement in cash and cash equivalents at beginning of period 459 110 (442) ------------ ------------ ----------- Cash and cash equivalents at end of period 6 29 688 3 346 17 053 ============ ============ ===========
Notes to the condensed Group interim financial statements
For the six months ended 31 December 2017
(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. The unaudited condensed interim financial statements of the Company for the six months ended 31 December 2017 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 2017 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 2017 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 2017.
These 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 2017. 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 2016 and the year ended 30 June 2017.
Going concern
The board has considered the going concern assumption for a period of at least 12 month from the scheduled date of release of these interim results.
The directors have reviewed cashflow forecasts for the Group which have been prepared using a number of key assumptions, and which includes the impact of a restructuring of the ABSA debt facility as previously reported, which is currently only subject to final documentation and signature. The directors recognise that the cash flow forecasts are based on certain forward looking assumptions, which, if not achieved individually or in aggregate, could result in actual results being materially different to those forecast. The key assumptions include average diamond price, operating cost per tonne treated, and exchange rates, in particular, the Lesotho Maloti (pegged to the South African Rand) against the United States dollar. Having reviewed the key assumptions and the cash flow forecasts, which include the impact of the proposed ABSA debt restructuring, the Directors are confident that the existing cash resources together with the remaining balance of US$8.0 million available under the Standby Facility are sufficient to enable the Group to fund its operational requirements, for a period of at least twelve months from the date of approval of this Interim report. On this basis, the Directors have therefore concluded that it is appropriate to prepare the financial statements on a going concern basis.
The condensed group financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.
2. Revenue 31 December 31 December 30 June 2017 2016 2017 Unaudited Unaudited Audited US$'000 US$'000 US$'000 Diamond sales 25 990 - - Royalties (1 037) - - 24 953 - - ------------ ------------ -------- 3. Finance cost 31 December 31 December 30 June 2017 2016 2017 Unaudited Unaudited Audited US$'000 US$'000 US$'000 Interest paid on borrowings 5 675 294 394 Unwinding of discount on rehabilitation liability 155 86 278 Foreign exchange adjustments on cash balances 597 825 563 6 427 1 205 1 235 ------------ ------------ -------- 4. Taxation 31 December 31 December 30 June 2017 2016 2017 Unaudited Unaudited Audited US$'000 US$'000 US$'000 Current tax - - (2 998) Deferred tax credit/(charge) 2 569 (4 636) (18 666) 2 569 (4 636) (21 664) ------------ ------------ ---------
Factors affecting the tax charge for the year
The reasons for the difference between the actual tax charge and the standard rate of corporation tax of 20% (2016: 20%) in the United Kingdom applied to the loss for the year are as follows:
31 December 31 December 30 June 2017 2016 2017 Unaudited Unaudited Audited US$'000 US$'000 US$'000 (130 Loss before tax (10 319) (4 139) 015) Tax on loss at standard rate of 20% (2016: 20.00%) (2 064) (828) (26 003) Effect of tax in foreign jurisdictions 2 532 4 828 354 Foreign exchange adjustment on effective interest rate on borrowings 290 (231) 1 423 Recognition of previously unrecognised deferred tax assets - - 472 Withholding tax credits relinquished - - 1 273 Expenses not deductible
for tax purposes 67 10 - Adjustments to deferred tax not recognised (3 394) 857 44 145 (2 569) 4 636 21 664 ------------ ------------ --------- 5. Loss per share 31 December 31 December 30 June 2017 2016 2017 Unaudited Unaudited Audited US$'000 US$'000 US$'000 (116 Loss for the period (7 180) (6 253) 411) Weighted average number of shares used in basic loss per share 315 161 312 097 310 377 Opening balance 224 242 720 Effect of shares issued 7 557 4 783 during the Period 788 823 170 504 ------------ ------------ -------- 322 719 312 920 315 161 Closing balance 012 412 224 ------------ ------------ -------- Dilutive effect of potential ordinary shares - - - Weighted average number of ordinary shares in issue used in diluted 322 719 312 920 315 161 loss per share 012 412 224 ------------ ------------ -------- Basic loss per share (US cents) (2.2) (2.0) (36.9) Diluted loss per share (US cents) (2.2) (2.0) (36.9) ------------ ------------ -------- Non-dilutive potential 88 415 64 327 82 516 ordinary share 347 026 077 ------------ ------------ --------
As a result of the loss for the current and previous period all potentially issuable shares are considered anti-dilutive. The Company has a further 23 313 589 (H1 2017: 15 540 589) potentially issuable shares in respect of share options issued to employees and 65 101 758 (H1 2017: 48 786 437) potentially issuable shares in respect of warrants issued to strategic investors as at 31 December 2017.
6. Property, Plant and Equipment
Property, plant and equipment increased by US$1.3 million for the period. The increase is as a result of capitalised expenditure and additions of US$7.5 million, the movement in the ZAR:US$ exchange rate resulting in increase in value in US dollar terms of US$5.0 million, offset by a depreciation and amortisation charge of US$11.2 million.
The additions comprise capitalisation of waste stripping cost of US$5.3 million, capitalisation of cost in respect of the construction of the residual storage facility of US$1.7 million and US$0.5 million of other additions.
7. Deferred tax
The deferred tax included in the balance sheet is as follows:
31 December 31 December 30 June 2017 2016 2017 Unaudited Unaudited Audited US$'000 US$'000 US$'000 Opening balance 3 761 20 248 20 248 Movement in temporary differences recognised in income 2 569 (4 636) (18 666) Exchange differences 297 1 735 3 052 Income tax credits - 710 (873) 6 627 18 057 3 761 ------------ ------------ ---------
The deferred tax asset/(liability) comprises:
31 December 31 December 30 June 2017 2016 2017 Unaudited Unaudited Audited US$'000 US$'000 US$'000 Accelerated capital allowances (25 777) (47 882) (25 250) Provisions 758 567 698 Borrowings (1 527) (2 498) (1 980) Losses available for offsetting against future taxable income 36 063 69 427 33 185 Income tax credits available for offsetting against future taxable income - 1 583 - Temporary difference arising on acquisition of subsidiary (2 890) (3 140) (2 892) 6 627 18 057 3 761 ------------ ------------ ---------
The Directors, considered the financial projections of Liqhobong and determined that there is compelling evidence to support a deferred tax asset that is based on the value of the taxable profit which is expected to be generated over the next three years. No deferred tax asset was raised for assessed losses remaining to be utilised after the three-year period and these losses do not have an expiry date.
Deferred tax assets and deferred tax liabilities relating to the same tax authorities have been disclosed as a net asset or liability.
The Group has unrecognised tax losses of approximately US$199.5 million (H1 2017: US$52.2 million), of which US$152.2 million relates to the Liqhobong Mine, US$35.6 million to the BK11 Mine and US$11.7 million to the Group's corporate entities in the UK and South Africa.
8. Inventories 31 December 31 December 30 June 2017 2016 2017 Unaudited Unaudited Audited US$'000 US$'000 US$'000 Diamond inventory 6 883 5 577 4 237 Spares and consumables 3 078 1 282 2 183 9 961 6 859 6 420 ------------ ------------ -------- 9. Share capital Nominal value of Number of Shares shares 31 December 31 December 30 June 31 December 31 December 30 June 2017 2016 2017 2017 2016 2017 Unaudited Unaudited Audited Unaudited Unaudited Audited '000 '000 '000 US$'000 US$'000 US$'000 Allotted, called up and fully paid Ordinary shares 312 Opening balance 317 472 312 575 575 3 590 3 526 3 526 Issued during the period 187 642 3 312 4 897 2 537 45 64 ------------ ------------ -------- ------------ ------------ -------- 317 Closing balance 505 114 315 887 472 6 127 3 571 3 590 7 388 7 388 7 388 159 Deferred shares 642 642 642 159 967 159 967 967 7 893 7 704 7 706 163 TOTAL 756 529 114 166 094 163 538 557 ------------ ------------ -------- ------------ ------------ --------
Shares issued during the period ending 31 December 2017 were in respect of:
-- On 21 December 2017 the Company issued 184 842 884 new ordinary shares of 1 pence each at a premium of 9 pence per share. The funds were raised to sustain operations at a lower than initially expected average diamond value of US$75 per carat; and
-- During the period 1 096 208 and 1 702 986 new ordinary shares of 1 pence each was issued in respect of the quarterly interest due on the Series A Eurobonds.
10. Borrowings ABSA Series Series 31 December 2017 debt A B Other US$'000 facility Eurobonds Eurobonds loans Total ---------------------------------- ---------- ----------- ----------- ------- ------ Capital amount 117 At 1 July 81 007 30 000 5 000 1 551 558 Additions - - 2 000 - 2 000 Foreign exchange adjustments - - - 65 65 Interest capitalised - - 247 - 247 (8 Capital repayments (8 001) - - (124) 125) ---------------------------------- ---------- ----------- ----------- ------- ------ 111 At 30 December 73 006 30 000 7 247 1 492 745 ---------------------------------- ---------- ----------- ----------- ------- ------ Finance cost to be amortised over the life of the instrument (14
At 1 July (7 884) (6 583) (300) - 767) Finance cost 1 776 647 53 - 2 476 ---------------------------------- ---------- ----------- ----------- ------- ------ (12 At 30 December (6 108) (5 936) (247) - 291) ---------------------------------- ---------- ----------- ----------- ------- ------ 99 At amortised cost 66 898 24 064 7 000 1 492 454 ---------------------------------- ---------- ----------- ----------- ------- ------ 99 Non-current liabilities 66 898 24 064 7 000 1 207 169 Current liabilities - - - 285 285 ---------------------------------- ---------- ----------- ----------- ------- ------ 99 Total 66 898 24 064 7 000 1 492 454 ---------------------------------- ---------- ----------- ----------- ------- ------ ABSA Series Series 30 June 2017 debt A B Other US$'000 facility Eurobonds Eurobonds Loans Total ---------------------------------- ---------- ----------- ----------- ------- ------ Capital amount 30 98 At 1 January 68 400 000 - - 400 20 Additions 14 000 - 5 000 1 456 456 Foreign exchange adjustments - - - 212 212 (1 Capital repayments (1 393) - - (117) 510) ---------------------------------- ---------- ----------- ----------- ------- ------ 30 117 At 30 June 81 007 000 5 000 1 551 558 ---------------------------------- ---------- ----------- ----------- ------- ------ Finance cost to be amortised over the life of the instrument (7 (15 At 1 January (8 437) 216) - 653) Additions (10) - (300) - (310) Finance cost capitalised to property, plant and equipment 563 633 - - 1 196 ---------------------------------- ---------- ----------- ----------- ------- ------ (6 (14 At 30 June (7 884) 583) (300) - 767) ---------------------------------- ---------- ----------- ----------- ------- ------ 23 102 At amortised cost 73 123 417 4 700 1 551 791 ---------------------------------- ---------- ----------- ----------- ------- ------ 23 79 Non-current liabilities 50 307 417 4 700 1 310 734 23 Current liabilities 22 816 - - 241 057 ---------------------------------- ---------- ----------- ----------- ------- ------ 23 102 Total 73 123 417 4 700 1 551 791 ---------------------------------- ---------- ----------- ----------- ------- ------
Capital repayments on the ABSA debt facility excludes the December capital repayment of US$5.2 million, which cleared shortly after month end.
The Group is currently awaiting final documentation of the revised terms agreed by ABSA bank as well the revised facility agreement.
11. Commitments and contingent liabilities
At 31 December 2017 the Group had no capital commitments or contingent liabilities.
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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IR LFFVIVTIRFIT
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March 27, 2018 02:01 ET (06:01 GMT)
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