TIDMAFCR
Ticker: AFCR / Index: AIM / Sector: Mining
4 December 2014
African Consolidated Resources plc
("AFCR" or "the Company")
African Consolidated Resources plc, the AIM listed resource and
development company, is pleased to announce its results for the six
months to 30 September 2014.
Highlights
30 September 2014 30 September 2013
$'000 $'000
Loss for the period 2,779 2,335
Dalny deal prepayment forfeited* 500 -
Zimra VAT refund** 180 117
Cash balance 260 5,087
* The balance of $500,000 is receivable over a period of 12 months
** Additional $177,000 received in October 2014 mainly in respect of the
VAT dispute with Zimra.
Post period-end
-- Cash Balance at 30 November 2014 $1.045 million
-- Ball mill disposed of post period end EUR540,000 ($672,840 receivable).
-- Joint venture agreed for funding development of Pickstone Peerless mine
at 10,000 tonnes per month.
-- Loan of $2,000,000 secured of which $1,000,000 received in connection
with opportunities in Romania.
Chief Executive Officer's report
Introduction
In both the Chairman's and my strategic reports in the 2014 Annual
Report the transformation of the Company from an exploration focus to a
mining and cash generation company was emphasised. This process is
ongoing and all exploration activities remain on hold. Wherever
possible, employees have been reassigned and inevitably some have had to
be regrettably retrenched.
The international resources sector remains extremely constrained and
securing funding for new mines remains an enormous challenge. Reducing
overheads and costs is still a major focus of management in order to
ensure that available resources are sufficient until cash generation,
which is expected in H2 2015.
The specific challenges faced in Zimbabwe and the international status
of gold has resulted in the transition process in AFCR incorporating a
wider development focus and a more significant presence in Romania.
The transition taking place in each of the regions where AFCR is now
active are detailed below.
Zimbabwe
As announced on 30 September 2014, the reluctance of investors outside
of Zimbabwe to fund the Dalny Mine/Pickstone-Peerless Mine Project
resulted in its postponement pending further evaluation of how it may be
resumed in the future. AFCR remains in contact with Falcon Gold Zimbabwe
Limited.
Funding for the development of the Pickstone-Peerless Mine, albeit at a
reduced volume of 10,000 tonnes per month, has been secured from a
Zimbabwean source. A new joint venture company Dallaglio Investments
(Pvt) Ltd ('Dallaglio') has been established whereby AFCR will hold a 50
per cent. interest in Dallaglio and the joint venture partner, Grayfox
Investments (Pvt) Limited ('Grayfox') the other 50 per cent. The joint
venture includes the Pickstone-Peerless Mine and the mining claims
surrounding the former Giant Mine.
Pursuant to an option Grayfox has the right to exchange its shareholding
in Dallaglio for 288,333,333 shares in AFCR, which if effected would
return these assets to 100 percent AFCR ownership (subject to
indigenisation regulations).
The current plant design for this joint venture is expected to suffice
for the oxide gold cap, which has an estimated life of six years. During
this period, expansion of the plant to treat the open cast sulphides, at
a rate at least double the current monthly volume will be evaluated,
including the Dalny Mine option.
Mine commissioning is planned for the beginning of H2 2105 with first
positive cash flows later in H2 2105.
Future Zimbabwe operations will be administered through the AFCR
Zimbabwe holding company - Canape Investments (Pvt) Limited - as
depicted in the diagram on the attached PDF document.
Zambia
AFCR has copper and rare earth prospects in Zambia. In view of current
limited funding and management time the Zambian assets are not currently
a focus while we still await the outcome of the two outstanding Zambian
Supreme Court cases on the Kalengwa copper mine. The Board continues to
review its options with regard to these assets in order to maximise
shareholder value.
Romania
The attitude towards investing in Zimbabwe and for AFCR's advantageous
position with securing good mining assets in Romania, with limited
competition, has prompted management to accelerate the evaluation and
acquisition of mining opportunities in that country.
The Company is advancing discussions regarding a number of opportunities
and will make further announcements, as appropriate, in due course.
Conclusion
Notwithstanding the very challenging resource sector market conditions,
AFCR has secured sufficient funding to commence development of its first
gold mine in Zimbabwe.
Roy Pitchford
Chief Executive Officer
For further information, please contact:
African Consolidated Resources plc www.afcrplc.com
Roy Tucker (Finance Director) +44 (0) 1622 816918
Roy Pitchford (Chief Executive Officer) +44 (0) 7920 189012
+263 (0) 7721 69833
+40 (0) 7411 11900
Strand Hanson Limited - Financial & Nominated Adviser www.strandhanson.co.uk
James Spinney +44 (0) 20 7409 3494
Ritchie Balmer
James Bellman
Daniel Stewart and Company - Broker www.danielstewart.co.uk
Martin Lampshire +44 (0) 20 7776 6550
Colin Rowbury
St Brides Media & Finance Ltd www.stbridesmedia.co.uk
Susie Geliher +44 (0) 20 7236 1177
Group statement of comprehensive income
for the six months ended 30 September 2014
For the six months ended 30 September 2014 For the six months ended 30 September 2013
Group Group
Notes $'000 $'000
Revenue - -
Share options expenses (37) (131)
Other administrative expenses (2,742) (2,206)
Administrative expenses (2,779) (2,337)
Operating loss (2,779) (2,337)
Finance income - 2
Loss before and after taxation attributable to the
equity holders of the parent company 3 (2,779) (2,335)
Other comprehensive income
Gain on available for sale financial assets 18 (7)
Total comprehensive loss attributable to the equity
holders of the parent company (2,761) (2,342)
Loss per share - basic and diluted (cents) 3 (0.34) (0.43)
Group statement of changes in equity
for the six months ended 30 September 2014
Share Share Share Foreign Available EBT Retained earnings/ Total
capital premium option currency for sale reserve (losses)
account account reserve translation reserve
reserve
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
At 31 March 2013 14,004 62,751 331 (1,843) 31 (3,944) (27,428) 43,902
Total comprehensive
loss for the year - - - - (62) - (11,650) (11,712)
Share option charges - - 173 - - - - 173
Shares issued:
- to settle
liabilities
(including
Directors) 71 142 - - - - - 213
At 31 March 2014 14,075 62,893 504 (1,843) (31) (3,944) (39,078) 32,576
Total comprehensive
loss for the period - - - - 18 - (2,779) (2,761)
Share option charges - - 37 - - - - 37
At 30 September 2014 14,075 62,893 541 (1,843) (13) (3,944) (41,857) 29,852
Group statements of financial position
As at 30 September 2014
30
September 31 March
2014 Group 2014 Group
Note $'000 $'000
Assets
Non-current assets
Intangible assets 4 28,768 28,710
Property, plant and equipment 1,099 2,683
29,867 31,393
Current assets
Inventory - 1
Receivables 1,505 1,180
Available for sale investments 24 6
Cash and cash equivalents 260 568
Total current assets 1,789 1,755
Total Assets 31,656 33,148
Equity and Liabilities
Capital and reserves attributable to equity holders
of the Company
Called-up share capital 14,075 14,075
Share premium account 62,893 62,893
Share option reserve 541 504
Foreign currency translation reserve (1,843) (1,843)
Available for sale reserve (13) (31)
EBT reserve (3,944) (3,944)
Retained earnings (41,857) (39,078)
Total equity 29,852 32,576
Current liabilities
Short term portion loan 5 1 200 -
Trade and other payables 604 572
Total current liabilities 1,804 572
Total Equity and Liabilities 31,656 33,148
Group statements of cash flow
for the six months ended 30 September 2014
For the six months ended
For the six months ended 30 September 2014 30 September 2013
Group Group
$'000 $'000
CASH FLOW FROM OPERATING ACTIVITES
Loss for the year (2,779) (2,335)
Adjustments for:
Depreciation 245 19
Impairment charge on intangible assets - -
Write off of revaluation reserve in subsidiary - -
Unrealised exchange loss/(gain) on cash and cash
equivalents 6 (43)
Finance income - (2)
Loss on sale of financial assets -
Loss on sale of property, plant and equipment (116)
Liabilities settled in shares - 177
Share option expense 37 131
(2,607) (2,053)
Changes in working capital:
(Increase)/decrease in receivables (324) 106
Decrease/(increase) in inventories 1 (20)
Increase/(decrease) in payables 1,233 (252)
910 (166)
Cash used in operations (1,697) (2,219)
Investing activities:
Payments to acquire intangible assets (54) (3,336)
Payments to acquire property, plant and equipment - (365)
Proceeds on disposal of property, plant and
equipment 1,449 -
Interest received - 2
1,395 (3,699)
Financing Activities:
Proceeds from the issue of ordinary shares, net of
issue costs - -
Decrease in cash and cash equivalents (302) (5,918)
Cash and cash equivalents at beginning of year 568 10,962
Exchange (loss)/gain on cash and cash equivalents (6) 43
Cash and cash equivalents at end of year 260 5,087
Interim report notes
1 Interim Report
The information relates to the period from 1 April 2014 to 30 September
2014.
The interim report was approved by the Directors on 3 December 2014.
The interim report, which is unaudited, does not include all information
required for full financial statements and should be read in conjunction
with the Group's consolidated annual financial statements for the period
ended 31 March 2014.
2 Basis of preparation
1. The unaudited condensed interim financial statements for the six months
ended 30 September 2014 do not constitute statutory accounts and have
been drawn up using accounting policies and presentation expected to be
adopted in the Group's full financial statements for the year ended 31
March 2014, which are not expected to be significantly different to those
set out in note 1 to the Group's audited financial statements for the
year ended 31 March 2014
2. These interim financial statements consolidate the financial statements
of the Company and all its subsidiaries.
3. After review of the Group's operations, the directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, the
directors continue to adopt the going concern basis in preparing the
unaudited condensed interim financial statements.
3 Loss per share
For the six months ended For the six months ended
30 September 2014 Group 30 September 2013 Group
Loss per ordinary share has been calculated using
the weighted average number of ordinary shares in
issue during the relevant financial year.
The weighted average number of ordinary shares in
issue for the period is: 818,897,396 547,342,776
Losses for the period: ($'000) (2,779) (2,335)
Loss per share basic and diluted (cents) (0.34) (0.43)
The effect of all potentially dilutive share options
is anti-dilutive.
4 Intangible assets
Deferred exploration
Group costs Mining options Total
$'000 $'000 $'000
Balance 31 March 2013 24,246 4,595 28,841
Additions during the year 6,581 - 6,581
Impairment loss (6,417) (295) (6,712)
Balance 31 March 2014 24,410 4,300 28,710
Additions during the year 58 - 58
Balance 30 September 2014 24,468 4,300 28,768
5 Short term portion loan
This loan is repayable on 30 June 2015 and is convertible at the
lender's election into new ordinary shares of the Company at an issue
price of 1.5p or the price at which the Company secures new funding
prior to the repayment date whichever is the lower.
6 Financial information
The financial information for the year ended 31 March 2014 has been
extracted from the statutory accounts for that period. While the
auditors' report for the year ended 31 March 2014 was unqualified, it
did include an emphasis of matters concerning going concern and the
political and economic stability in Zimbabwe, to which the auditors drew
attention by way of emphasis without qualifying their report. Full
details of these comments are contained in the report of the Auditors on
Pages 18 and 19 of the Final Results for the year to 31 March 2014,
released elsewhere on this website on 5 September 2014.
7 Events after the reporting date
The acquisition of the Dalny Mine did not proceed as a result of the
failure of the Company to raise $12.0 million which constituted a
condition precedent in the Purchase Agreement entered with Falcon Gold
Zimbabwe Limited.
In October 2014 the Company secured joint venture finance for its
Pickstone-Peerless Mine with Grayfox under which the Pickstone-Peerless
and the Giant Mines are being transferred to a jointly owned company
Dallaglio Investments (Pvt) Ltd into which Grayfox will contribute $4.0
million in cash and in addition plant equal to the carrying value of the
Company's own plant at Pickstone-Peerless, which is estimated to have a
carrying value of $1.0 million. Grayfox may at its election convert its
50 percent holding in the jointly owned company to 288,333,333 ordinary
shares in the Company.
The Company also secured a $2 million loan facility from Grayfox for use
as to $1 million for the Company's projects in Romania and as to $1
million for general corporate purposes.
In November 2014 the Company entered into an option to acquire, at its
own discretion, a 68 percent interest in Mineral Mining SA which company
owns the Baita Bihor polymetallic mine in Transylvania, Romania. The
acquisition price is EUR1,200,000 (approximately $1,630,000) of which
EUR950,000 (approximately $1,290,000) is payable on a deferred basis.
The Company is in advance stage discussions with the intention of
raising approximately $2.5 million by way of a placing of ordinary
shares in order to finance the acquisition of Mineral Mining SA and to
enable the Baita Bihor mine to be put back into production. It is
expected that the directors will participate in this placing.
Interim Results - PDF attachment:
http://hugin.info/138338/R/1877016/661586.pdf
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: African Consolidated Resources Plc via Globenewswire
HUG#1877016
http://www.acrplc.com/
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