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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Gvm Metals | LSE:GVM | London | Ordinary Share | AU000000GVM1 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 72.81 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:8374E
GVM Metals Ltd
01 October 2007
GVM METALS LIMITED
Annual Report and Accounts for the year ended 30 June 2007
GVM Metals Limited ("GVM" or "the Company") is pleased to announce its
operational report together with the consolidated financial report for the year
ended 30 June 2007. A full copy of this report is available at the Company's
website, www.gvm.com.au.
Highlights
* Acquisition of a 74% interest in the Limpopo (Thuli) coal project in
November 2006.
* Acquisition of 50% of the Baobab coal project, some 50km's south of the
Limpopo coal project.
* Completion of the merger of the GVM and Motjoli Resources (Pty) Ltd coal
projects. Motjoli are GVM's Black Economic Empowerment partner in South
Africa. The merger increased the Company's interest in the Holfontein coal
project from 49% to 100% and in the Baobab coal project from 50% to 100%.
Discussion of the Results
Nimag Group ("NiMag")
GVM Metals Limited acquired a controlling interest in the Nimag Group of
Companies (Nimag Group) in December 2003, and acquired the remaining 26% in
December 2006.
Nimag Group is engaged principally in the manufacture and distribution of nickel
magnesium alloys, ferro silicon magnesium alloys and metal fibres and began
producing alloys in 1962 and currently manufactures specialised master alloys of
nickel and magnesium for the specialised foundry industry including aerospace,
aeronautical, motor, steel mill roll and associated industries.
Ductile iron (also called spheroidal graphite iron or nodular cast iron) was
discovered in the 1940s. The introduction of magnesium into the melt results in
nodular rather than flaky graphite in the resultant cast iron, giving the cast
iron properties approaching those of steel, while maintaining the advantages of
the casting process. The magnesium is usually added as a nickel alloy, making
it easier to add and contribute to product quality. NiMag supplies the ductile
iron market as a specialist supplier with a world market share of about 35% in
its core product line. 95% of sales are exported through 35 distributors world
wide. Demand for NiMag's alloys is proportional with world demand for ductile
iron, principally for automotive parts and industrial machinery. Demand for
NiMag products has grown gradually to meet current capacity of 287 tonnes per
month (all products). Potential for expansion of the core nickel-magnesium
alloy product is presently limited by the size of end markets. NiMag is
increasing the penetration of a variety of other products developed for
alternative markets. NiMag produces approximately 300 tonnes of cast and slit
fibres which are used in reinforced concrete by domestic mining and tunnelling
operations.
NiMag's competitive advantages include low electricity and labour costs. The
main input cost is locally sourced nickel raw material, which is matched with
sales to minimise nickel price exposure.
GVM acquired 74% of NiMag from a management group in January 2004. The
consideration was R37 Million (A$8 million) comprising ZAR7.5 million in cash up
front, R20 million borrowed against the business and R9.5 million in vendor
finance. On GVM's listing on the JSE, the Company exercised its option to
acquire the balance of NiMag for 4,620,557 GVM shares.
Depreciation of the Rand and strengthening of Nickel prices widened NiMag's
profit margins resulting in NiMag generating substantially higher operational
cash flows over the 2006/07 financial year. NiMag traded profitably,
contributing approximately A$4,6m in surplus funds and repaying the remaining
bank financed acquisition costs. At the end of June 2007, GVM's acquisition
loans comprised $506,278 to the NiMag vendors.
Magberg Manufacturing
A specialised producer of ferro silicon magnesium alloys used to manufacture
Ductile Iron. Capacity is limited and the production is split equally between
local and export markets. This is a commodity product and almost all costs are
Rand denominated.
Metalloy Fibres (Pty) Ltd
The only specialised cast fibre reinforcing manufacturer in Africa. A weakening
of the Rand and the "go ahead" of the Gautrain rail project and the general
increase in construction expenditure promises to substantially improve this
business both in terms of volumes and margins.
Metal Alloy Traders Limited ("MATS")
MATS is incorporated in Jersey in the Channel Islands and it trades various
metals purchased from Nimag in South Africa.
SA Mineral Resources Corporation Limited ("Samroc")
Samroc is a Johannesburg Stock Exchange listed company which produces manganese
sulphate chemicals. During the latter half of 2005 GVM stated its intention to
dispose of its entire investment in Samroc.
As a result of its intended disposal, the Samroc investment has been
reclassified as a Non-current Investment Held for Sale.
Holfontein Coal Project
GVM acquired Motjoli Resources' 51% stake in the Holfontein coal project through
the issue of 14,868,283 GVM shares and paid ZAR 21 million (A$ 3.5 million) for
the initial 49% acquisition.
Holfontein is situated in the traditional coal mining area south and west of
Witbank where coal mining has taken place for over a hundred years. It is on
the main road between Kinross and Trichard in Mpumalanga, South Africa, and a
main line railway siding is situated on the property at Leven which can be
upgraded for export purposes.
Currently the resources are in the inferred category and stand at 55 million
tonnes. It is planned to produce 400,000 tpa of soft coking coal from the 5
seam and 800,000 tpa of thermal coal from the 4 seam. The Holfontein
exploration program undertaken at the end of 2006 to confirm the structure,
tonnage and quality of the Holfontein coal resource was completed during the
2007. An additional 37 boreholes were completed constituting 5,557 metres
drilled and yielding 150 samples for analysis. The geological model based on
these results is currently being updated with Mine feasibility planning done
once the laboratory results have been received. There are now 67 boreholes in
the Holfontein resource area resulting in a drilling density of just less than
14 boreholes per hectare for the 5 seam resource and 12 boreholes per hectare
for the 4 seam resource. Once modelling is completed, this will bring the
Holfontein property into a measured resource category.
Geotechnical tests were conducted on the diamond drill cores to establish the
competence of the roof and floor conditions of both the 5 Seam and 4 Seam
resources. Initial perusal of the results has confirmed the low phosphorus
metallurgical qualities of the 5 Seam with no change in expected yields. The 4
Seam resources still need to be modelled analytically but the indications are
that the coal is suitable for SASOL or Eskom feedstock. Composite samples of
the 5 Seam are to be reconstituted to test for certain metallurgical properties.
Similarly, 4 Seam samples are to be reconstituted to test for the suitability
of the coal for Eskom.
Baobab Coal Project
The acquisition of Petmin Ltd's 50% interest in the Baobab Coal Project was
completed during 2007 through the issue of 8,333,333 GVM shares to raise the
required purchase price of GBP2.5 million (A$ 6.2 million). During June, GVM
acquired the remaining 50% of the Joint Venture held by Motjoli Resources with
the issue of 20,000,000 GVM shares.
Consultants have been mandated to assess railway and related transport
infrastructure from GVM's Baobab and Thuli coal projects to the Richards Bay and
Maputo coal terminals. Management envisage this project will be completed later
in 2007. Drilling on the Baobab coal project is expected to commence early in
2008 financial year.
Thuli Coal Project (Limpopo)
GVM acquired its 74% interest in the project by the issue of 20,812,500 shares
in December 2006. Potential drilling contractors have performed site
inspections, and drilling on the Thuli Coal Project started in August. Data
collected in the terrain model completed earlier in the year will be used in the
identification of drilling targets.
Preliminary discussions with various infra-structure participants are underway
to ascertain the export capacity of the coal mined. Management have received
valuations from independent third parties mandated to assess the value of the
surface rights comprising the Thuli Coal Project. Preliminary consultations
with the current surface rights owners on GVM's potential acquisition of these
rights have been undertaken. GVM will continue these discussions together with
the Thuli Coal Project drilling program during the first quarter of the 2008
financial year.
Mooiplaats Coal Project
70% on Completion of the CoAL Acquisition
The major drilling programme continued at Mooiplaats during the fourth quarter
of the 2007 financial year and 23,867 metres (164 holes) were drilled. Seven
thousand of the total twenty-three thousand hectares have now been drilled on
'inferred' spacing densities and during the period infill drilling commenced on
'measured' and 'indicated' spacings. The goal of the programme is to bring a
minimum of 60 million tonnes of the resource into measured and indicated
categories. The tonnage represents ten years consumption at the adjacent Camden
Power Station.
SRK Consultants are overseeing the drilling programme and a resource statement
will be released during the first quarter of the 07/08 financial year. The
results of the drilling program to date are in line with management
expectations.
Simon Farrell
Managing Director
28 September 2007
For more information contact:
Simon Farrell, Managing Director, GVM +61 417 985 383 or +61 8 9322 6776
Nonkqubela Mazwai, Deputy Managing Director, GVM +27 83 690 9079
Petronella Gorrie, The Event Shop +27 82 827 8815
Jos Simson/Leesa Peters, Conduit PR +44(0) 20 7429 6603/ +44 (0) 7899 870 450
Olly Cairns/Romil Patel, Blue Oar Securities Plc +44(0) 20 7448 4400
www.gvm.com.au
Group profit and loss account for the year ended 30 June 2007
Consolidated Entity Parent Entity
2007 2006 2007 2006
$ $ $ $
REVENUE 62,595,362 32,340,604 1,105,766 380,250
Changes in inventories of finished goods
and work in progress
- (367,491) - -
Raw materials and consumables used (48,078,842) (23,529,689) - -
Consulting expenses (328,744) (400,187) (328,744) (342,066)
Employee expenses (6,410,948) (3,516,128) (4,026,233) (970,187)
Borrowing costs (800,799) (669,044) - -
Depreciation expenses (175,532) (242,768) (12,923) (16,043)
Office rental , outgoings and parking (425,164) (204,865) (5,380) (60,385)
Decrease/(increase) diminution in value of (1,666,792) (4,325)
investments
(1,666,792) (4,325)
Loss on investments disposed of (40,197) - (40,197)
Bad debt expense (306,066) (1,159) - (1,159)
Provision for non-recoverability of loans/ (664,067) - (375,000) -
debtors
Diminution in value of control entities (6,488) - (6,488) -
Other expenses from ordinary activities (5,062,962) (2,932,530) (1,162,894) (658,856)
Share of net profit/(losses) of associate - (98,630)
accounted for using the equity method
- -
Profit/(Loss) before income tax (expense)/ (1,331,042) 333,591
benefit
(6,478,688) (1,712,968)
Income tax (expense) / benefit (2,216,264) (566,732) - -
Profit/(Loss) after tax (3,547,306) (233,141) (6,478,688) (1,712,968)
Outside equity interest (478,742) (353,870) - -
Net profit/(loss) attributable to members (6,478,688) (1,712,968)
of the parent entity
(4,026,048) (587,011)
Basic earnings/(loss) per share (in cents) (4.72) (2.04)
Headline earnings/(loss) per share (in (1.96) (1.54)
cents)
Group balance sheet as at 30 June 2007
Consolidated Entity Parent Entity
2007 2006 2007 2006
$ $ $ $
CURRENT ASSETS
Cash assets 61,530,490 985,333 52,909,170 78,191
Receivables 8,984,168 6,374,684 4,809,348 722,916
Inventory 5,519,744 3,245,656 - -
TOTAL CURRENT ASSETS 76,034,402 10,605,673 57,718,518 801,107
NON CURRENT ASSETS
Receivables - - 12,097,685 4,522,652
Assets held for sale 94,596 94,596 - -
Intangibles 3,964,042 7,441,280 - -
Other financial assets 12,928,598 699,992 82,942,434 4,465,409
Property, plant and equipment 1,648,834 1,803,312 29,134 27,845
Deferred tax assets 239,686 36,669 - -
Mining assets 67,852,973 - - -
Exploration expenditure 1,123,850 - - -
TOTAL NON CURRENT ASSETS 87,852,579 10,075,849 95,069,253 9,015,906
TOTAL ASSETS 163,886,981 20,681,522 152,787,771 9,817,013
CURRENT LIABILITIES
Payables 9,319,361 5,940,126 218,856 328,915
Interest bearing liabilities - 2,451,628 - -
Provisions 95,355 125,790 232 212
Current tax liability 1,711,840 459,586 (7,776) -
TOTAL CURRENT LIABILITIES 11,126,555 8,977,130 211,312 329,127
NON CURRENT LIABILITIES
Payables 1,375,608 1,340,777 7,046,990 6,601,208
Interest bearing liabilities 506,261 2,702,261 - -
TOTAL NON CURRENT LIABILITIES 1,881,869 4,043,038 7,046,990 6,601,208
TOTAL LIABILITIES 13,008,424 13,020,168 7,258,302 6,930,335
NET ASSETS 150,878,557 7,661,354 145,529,468 2,886,678
EQUITY
Contributed equity 177,189,359 35,396,353 177,189,359 35,396,353
Reserves 5,310,652 426,521 8,016,118 687,645
Accumulated losses (34,692,704) (30,666,656) (39,676,009) (33,197,320)
TOTAL PARENT EQUITY INTEREST 147,807,306 5,156,218 145,529,468 2,886,678
OUTSIDE EQUITY INTEREST 3,071,250 2,505,136 - -
TOTAL EQUITY 150,878,557 7,661,354 145,529,468 2,886,678
Cash Flow Statements for the year ended 30 June 2007
Consolidated Entity Parent Entity
2007 2006 2007 2006
$ $ $ $
Cash flows from operating activities
Interest received 555,353 84,578 474,576 30,280
Cash receipts in the course of operations 59,382,997 31,482,520 241,337 312,266
Interest paid (800,799) (669,044) - -
Payments to suppliers and employees (56,475,498) (30,499,820) (1,717,433) (1,327,010)
Net cash generated by /(used in) 2,662,053 398,234 (1,001,520) (984,464)
operating activities
Cash flows from investing activities
Payments for property, plant and (198,163) (148,489) (14,212) -
equipment
Proceeds from the sale of property, plant 3,350 - - -
and equipment
Mineral assets acquired (10,516,450) - - -
Proceeds from sale of equity investments - 226,511 - 226,511
Payments for equity investments - (47,576) (10,516,450) (47,576)
Loans (made to)/from other entities - - - 34,084
Net cash received/ (paid) on acquisition (75,000)
of subsidiary
- - -
Exploration costs (477,667) - - -
Net cash generated by / (used in) (11,263,930)
investing activities
30,446 (10,530,662) 213,019
Cash flows from financing activities
Loans from controlled entities - - - 175,391
Proceeds from issue of shares 78,334,038 543,750 78,334,038 543,750
Transaction costs from issue of shares (2,778,509) (57,707) (2,778,509) (57,707)
Loans to controlled entities - - (10,563,335) -
Loans repaid to other entities (4,647,628) (1,892,452) - -
Loans from other entities 34,831 - - -
Net cash generated by financing 70,942,732 64,992,194
activities
(1,406,409) 661,434
Net increase/(decrease) in cash held 62,340,855 (977,729) 53,460,012 (110,011)
Effect of exchange rates of cash holdings
in foreign currencies
(820,129) - (629,033) -
Cash at beginning of financial year 49,764 1,027,493 78,191 188,202
Cash at end of financial year 61,530,490 49,764 52,909,170 78,191
Statement of changes in equity as at 30 June 2007
Ordinary Capital Foreign Share Accumulated Total Outside
share capital profits currency options losses Equity
reserve translation reserve interests
reserve
$ $ $ $ $ $ $
Consolidated entity
Balance at 1 July 2006 35,396,353 136,445 (261,124) 551,200 (30,666,656) 5,156,218 2,505,136
Shares issued during
the year 144,571,514 - - - - 144,571,514 -
Capital raising costs (2,778,509) - - - - (2,778,509) -
incurred
Adjustments from - - (2,444,342) - - (2,444,342) -
translation of foreign
controlled entities
Share based payments - - - 7,328,473 - 7,328,473 -
Loss attributable to - - - - (4,026,048) (4,026,048) -
members of parent entity
Profit attributable to
minority shareholders - - - - - - 478,742
Minority interest in - - - - - - (31,133)
reserves
100% acquisition of a - - - - - - (2,952,745)
controlled entity
Minority interest in a - - - - - - 3,071,251
controlled entity
Balance at 30 June
2007 177,189,359 136,445 (2,705,466) 7,879,673 (34,692,704) 147,807,306 3,071,251
Parent entity
Balance at 1 July 2006 35,396,353 136,445 (33,197,320) 2,886,678 -
-
551,200
Shares issued during
the year 144,571,514 - - - - 144,571,514 -
Transaction costs (2,778,509) - - - - (2,778,509) -
Share based payments - - - 7,328,473 - 7,328,473 -
Loss attributable to - - - - (6,478,688) (6,478,688) -
members of parent entity
Balance at 30 June
2007 177,189,359 136,445 - 7,879,673 (39,676,008) 145,529,468 -
Ordinary Capital Foreign Accumulated Total Outside
share capital profits currency losses Equity
reserve translation interests
reserve
Share
options
$ $ $ $ $ $ $
Balance at 1 July 2005 34,500,935 136,445 1,108,117 - (30,079,645) 5,665,852 3,306,117
Shares issued during
the year 953,125 - - - - 953,125 -
Capital raising costs (57,707) - - - - (57,707) -
incurred
Adjustments from - - (1,369,241) - - (1,369,241) -
translation of foreign
controlled entities
Share based payments - - - 551,200 - 551,200 -
Loss attributable to - - - (587,011) (587,011) -
members of parent entity
Loss attributable to - - - - - - (353,870)
minority shareholders
Minority interest in - - - - - - - 221,480
reserves
Preference shares - - - - - - (668,591)
acquired by parent entity
Balance at 30 June 2006 35,396,353 136,445 (261,124) 551,200 (30,666,656) 5,156,218 2,505,136
Parent entity
Balance at 1 July 2005 34,500,935 136,445 - - (31,484,352) 3,153,028 -
Shares issued during the 953,125 - - - - 953,125 -
year
Transaction costs (57,707) - - - - (57,707) -
Share based payments - - - 551,200 - 551,200 -
Loss attributable to - - - - (1,712,968) (1,712,968) -
members of parent entity
Balance at 30 June
2006 35,396,353 136,445 - 551,200 (33,197,320) 2,886,678 -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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