TIDMBOD
RNS Number : 7794T
Botswana Diamonds PLC
25 March 2019
25(th) March 2019
Botswana Diamonds PLC ("Botswana Diamonds" or the "the
Company")
Interim Statement and Financial Results for the Six Months Ended
31(st) December 2018
Botswana Diamonds (AIM: BOD) is on track to commence bulk
sampling and become a diamond producer by mid-2019.
Highlights
-- The Thorny River project is on target to commence bulk
sampling and produce diamonds. Agreements have been finalised with
a mining contractor and a diamond processor. Delineation drilling
is completed. Assuming final permits are obtained, bulk sampling
will commence in May.
-- A study of the Heritage Concession in the Marange Diamond
Fields in Zimbabwe yielded positive results. Botswana Diamonds has
a joint venture agreement with Vast Resources plc ('Vast') to
develop Heritage.
-- A report on the Maibwe prospect in Botswana has been
completed and sent to BCL, the 51% owner of the licences. We expect
that BCL will offer their stake for sale.
Botswana
1. Heavy mineral sampling over the eight previously discovered
and announced geophysical anomalies in the Gope Region of the
Kalahari Desert was completed. A total of 267 kimberlitic indicator
minerals were discovered, which included 41 garnets, 13 chromites,
139 ilmenites, 4 chrome diopsides and 70 olivines. A grain analysis
by Remote Exploration Services of Cape Town concluded that the
sources were likely to be local due to the abundance, size and
fresh surface textures of the indicator minerals.
2. Botswana Diamonds now holds 100% of the equity in Sunland
Minerals, having acquired for a nominal sum the 50% previously held
by Alrosa as part of the Company's joint venture with Alrosa. A
potential new investor, itself a large diamond producer with new
ideas and keen to find new kimberlites in Botswana, is interested
in acquiring 50% of Sunland.
3. A report has been completed on the Maibwe licences in the
Gope region of the Kalahari. The report was prepared for the
liquidator of BCL which holds a 51% interest in Maibwe. Botswana
Diamonds holds a net 15% interest in the company. It is expected
that the liquidator will offer the BCL stake for sale.
South Africa
(A) The development of the Thorny River diamond dyke project is
underway. A mining contractor has been appointed. Agreement to
process the kimberlites at a nearby processing plant is finalised.
Refurbishment of the plant is ongoing, with wet testing expected to
commence within weeks.
A drilling programme to delineate the dyke in order to optimise
bulk sampling is completed.
We expect bulk sampling to commence by mid 2019, ramping up to
20,000 tons a month.
(B) Following the re-discovery of eight kimberlite pipes in the
Free State of South Africa close to the iconic Koffiefontein and
Jagersfontein diamond mines, whole rock geochemistry, mineral
chemistry and detailed ground geophysics work was completed. A
phased drilling programme has been proposed and is in a planning
phase.
(C) Desktop study work continues on the Palmietgat
kimberlites.
Zimbabwe
Botswana Diamonds signed a Memorandum of Understanding ('MoU')
with Vast, to develop diamond projects in Zimbabwe. Following the
signing of this MoU, an agreement was concluded to develop the
Heritage Concession in the Marange Diamond Fields. The concession
contains several targets for modern alluvial diamond placer
deposits; Grades of the known modern alluvial placers draining the
Marange Diamond Fields range in grade from 50 to 500 carats per
hundred tonne of ore (cpht), most typically 100-200 cpht. The next
step will be to investigate the potential of the modern alluvial
diamond deposits, as well as the older conglomerates on the
property. Assuming positive results, the field work will be closely
followed by drilling, pitting and bulk sampling, which will form
part of a pre-feasibility study, which may justify capital beyond
the initial US$1 million committed to the programme by Vast
Resources.
Corporate
Botswana Diamonds appointed Beaumont Cornish as the Nominated
Advisor in December 2018. We raised GBP370,000 at a placing price
of 0.55p per share, in January 2019.
John Teeling
Chairman
22(nd) March 2019
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014. The person who arranged for
the release of this announcement on behalf of the Company was John
Teeling, Director.
S
Enquiries:
Botswana Diamonds PLC
John Teeling, Chairman +353 1 833 2833
James Campbell, Managing Director +27 83 457 3724
Jim Finn, Director +353 1 833 2833
Beaumont Cornish - Nominated Adviser
Michael Cornish
Roland Cornish +44 (0) 020 7628 3396
SVS Securities Plc - Broker
Tom Curran
Ben Tadd +44 (0) 20 3700 0100
Blytheweigh - PR +44 (0) 20 7138 3206
Julia Tilley +44 (0) 207 138 3553
Fergus Cowan +44 (0) 207 138 3208
Teneo
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell +353 (0) 1 661 4055
www.botswanadiamonds.co.uk
Botswana Diamonds plc
Financial Information (Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
Six Months Six Months Year
Ended Ended Ended
31 Dec 31 Dec 30 Jun
18 17 18
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
REVENUE - - -
Cost of sales - - -
-------------------- -------------------- ---------------
GROSS PROFIT - - -
( 190 ( 178 ( 378
Administrative expenses ) ) )
Impairment of exploration ( 180
and evaluation assets - - )
-------------------- -------------------- ---------------
( 190 ( 178 ( 558
OPERATING LOSS ) ) )
( 190 ( 178 ( 558
LOSS BEFORE TAXATION ) ) )
Income tax
expense - - -
-------------------- -------------------- ---------------
( 190 ( 178 ( 558
LOSS AFTER TAXATION ) ) )
Exchange difference on translation ( 72
of foreign operations - 1 )
TOTAL COMPREHENSIVE INCOME FOR THE ( 190 ( 177 ( 630
PERIOD ) ) )
==================== ==================== ===============
LOSS PER SHARE - basic and
diluted (0.04p) (0.04p) (0.12p)
==================== ==================== ===============
CONDENSED CONSOLIDATED BALANCE 31 Dec 31 Dec 30 Jun
SHEET 18 17 18
unaudited unaudited audited
ASSETS: GBP'000 GBP'000 GBP'000
NON-CURRENT ASSETS
Intangible
assets 8,364 8,155 8,234
Financial
assets - 1 -
-------------------- -------------------- ---------------
8,364 8,156 8,234
-------------------- -------------------- ---------------
CURRENT ASSETS
Trade and other receivables 12 50 25
Cash and cash equivalents 39 230 260
-------------------- -------------------- ---------------
51 280 285
TOTAL ASSETS 8,415 8,436 8,519
-------------------- -------------------- ---------------
LIABILITIES:
CURRENT
LIABILITIES
( 386 ( 237 ( 300
Trade and other payables ) ) )
-------------------- -------------------- ---------------
TOTAL ( 386 ( 237 ( 300
LIABILITIES ) ) )
NET ASSETS 8,029 8,199 8,219
==================== ==================== ===============
EQUITY
Share capital - deferred
shares 1,796 1,796 1,796
Share capital - ordinary
shares 1,273 1,148 1,273
Share premium 10,099 9,751 10,099
Share based payments
reserve 104 104 104
Retained ( 4,260 ( 3,690 ( 4,070
deficit ) ) )
Translation
reserve - 73 -
( 983 ( 983 ( 983
Other reserves ) ) )
-------------------- -------------------- ---------------
TOTAL EQUITY 8,029 8,199 8,219
==================== ==================== ===============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
Share based
Share Share Payment Retained Translation Other Total
Capital Premium Reserves Deficit Reserve Reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 30 June ( 3,512 ( 983
2017 2,745 9,085 97 ) 72 ) 7,504
Issue of
shares 199 670 - - - 869
Share issue ( 4
expenses - ( 4 ) - - - )
Share based
payment - - 7 - - - 7
Total
comprehensive ( 178 ( 177
income ) 1 - )
------------------ ---------------- -------------------- ---------------- -------------------- -------------------- ---------------
At 31 December ( 3,690 ( 983
2017 2,944 9,751 104 ) 73 ) 8,199
Issue of
shares 125 377 - - - 502
Share issue ( 29 ( 29
expenses - ) - - - )
Total
comprehensive ( 380 ( 453
income - ) ( 73 ) - )
------------------ ---------------- -------------------- ---------------- -------------------- -------------------- ---------------
At 30 June ( 4,070 ( 983
2018 3,069 10,099 104 ) - ) 8,219
Total
comprehensive ( 190 ( 190
income - - ) - - )
--------------------
At 31 December ( 4,260 ( 983
2018 3,069 10,099 104 ) - ) 8,029
================== ================ ==================== ================ ==================== ==================== ===============
CONDENSED CONSOLIDATED CASH
FLOW Six Months Six Months Year
Ended Ended Ended
31 Dec 31 Dec 30 Jun
18 17 18
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
CASH FLOW FROM OPERATING
ACTIVITIES
Loss for the ( 190 ( 178 ( 558
period ) ) )
Impairment of exploration and evaluation
assets - - 180
Exchange ( 68
movements - 4 )
-------------------- -------------------- ---------------
( 190 ( 174 ( 446
) ) )
Movements in Working ( 182 ( 109
Capital 99 ) )
-------------------- -------------------- ---------------
NET CASH USED IN OPERATING ( 356 ( 555
ACTIVITIES ( 91 ) ) )
-------------------- -------------------- ---------------
CASH FLOWS FROM INVESTING
ACTIVITIES
Exploration costs ( 130 ( 382 ( 625
capitalised ) ) )
-------------------- -------------------- ---------------
NET CASH USED IN INVESTING ( 130 ( 382 ( 625
ACTIVITIES ) ) )
-------------------- -------------------- ---------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from share
issue - 869 1,371
Share issue ( 33
costs - ( 4 ) )
-------------------- -------------------- ---------------
NET CASH GENERATED IN INVESTING ACTIVITIES - 865 1,338
-------------------- -------------------- ---------------
NET (DECREASE)/INCREASE IN CASH AND ( 221
CASH EQUIVALENTS ) 127 158
Cash and cash equivalents at beginning
of the period 260 106 106
Effect of foreign exchange ( 4
rate changes - ( 3 ) )
CASH AND CASH EQUIVALENT AT THE
OF THE PERIOD 39 230 260
==================== ==================== ===============
Notes:
1. INFORMATION
The financial information for the six months ended 31 December
2018 and the comparative amounts for the six months ended 31
December 2017 are unaudited. The financial information above does
not constitute full statutory accounts within the meaning of
section 434 of the Companies Act 2006.
The Interim Financial Report has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the European
Union.
The accounting policies and methods of computation used in the
preparation of the Interim Financial Report are consistent with
those used in the Group 2018 Annual Report, which is available at
www.botswanadiamonds.co.uk
The interim financial statements have not been audited or
reviewed by the auditors of the Group pursuant to the Auditing
Practices board guidance on Review of Interim Financial
Information.
2. DIVID
No dividend is proposed in respect of the period.
3. LOSS PER SHARE
Basic loss per share is computed by dividing the loss after
taxation for the period available to ordinary shareholders by the
weighted average number of ordinary shares in issue and ranking for
dividend during the period.
Diluted loss per share is computed by dividing the loss after
taxation for the period by the weighted average number of ordinary
shares in issue, adjusted for the effect of all dilutive potential
ordinary shares that were outstanding during the period.
The following table sets forth the computation for basic and
diluted earnings per share (EPS):
Six Months Six Months
Ended Ended Year Ended
31 Dec 31 Dec 30 Jun
18 17 18
GBP'000 GBP'000 GBP'000
Numerator
For basic and diluted EPS retained
loss (190) (178) (558)
============== ============== ==============
No. No. No.
Denominator
Weighted average number of ordinary
shares 509,282,508 444,239,174 470,397,102
============== ============== ==============
Loss per share - Basic and Diluted (0.04p) (0.04p) (0.12p)
============== ============== ==============
The following potential ordinary shares are anti-dilutive and
are therefore excluded from the weighted average number of shares
for the purposes of the diluted earnings per share:
No. No. No.
Share options 11,410,000 11,410,000 11,410,000
============== ============== ==============
4. INTANGIBLE ASSETS
31 Dec 31 Dec 30 June
18 17 18
GBP'000 GBP'000 GBP'000
Exploration and evaluation assets:
Cost:
Opening balance 9,063 8,415 8,415
Additions 130 389 648
9,193 8,804 9,063
======== ======== ========
Impairment:
Opening balance 829 649 649
Provision for impairment - - 180
-------- -------- --------
829 649 829
======== ======== ========
Carrying Value:
Opening balance 8,234 7,766 7,766
======== ======== ========
Closing balance 8,364 8,155 8,234
======== ======== ========
Exploration and evaluation assets relate to expenditure incurred
in exploration for diamonds in Botswana and South Africa. The
directors are aware that by its nature there is an inherent
uncertainty in exploration and evaluation assets and therefore
inherent uncertainty in relation to the carrying value of
capitalized exploration and evaluation assets.
On 11 November 2014 the Brightstone block was farmed out to BCL
Investments (Proprietary) Limited, a Botswana Company, who assumed
responsibility for the work programme. Botswana Diamonds retain a
15% carried interest.
On 16 August 2013 the Group entered into a joint venture
agreement with Alrosa Overseas SA a wholly owned subsidiary of OJSC
Alrosa of Russia to explore for diamonds in Botswana. On 15
November 2018 the director announced that the company now holds
100% of the equity in Sunland Minerals having acquired for a
nominal sum the 50% previously held by Alrosa as part of the
Company's joint venture with Alrosa.
On 6 February 2017 the Group entered into an Option and Earn-In
Agreement with Vutomi Mining Pty Ltd and Razorbill Properties 12
Pty Ltd (collectively known as 'Vutomi'), a private diamond
exploration and development firm in South Africa.
Pursuant to the terms of the Agreement, Botswana Diamonds has
agreed to pay Vutomi a total of GBP942,000 in cash, of which
GBP581,000 will be used to fund exploration activities. In
addition, the Company will issue 100 million ordinary shares of
0.25p each ("Ordinary Shares") to Vutomi shareholders. The
Agreement will be executed in three Phases after which the Company
will own 72% of Vutomi. The remaining 28% will continue to be held
by Vutomi's Black Economic Empowerment ('BEE') partners. The three
Phases are summarised below:
Exclusivity and Option Fee
Botswana Diamonds paid Vutomi an exclusivity and option fee of
GBP122,000, with GBP61,000 paid in cash and GBP61,000 paid in the
Company's Ordinary Shares at a price of 1.9p. The shares were
issued on 3 April 2017. Upon completion of this payment Phase 1 of
the earn-in commenced.
Phase 1
Phase 1 will last for a further 12 months, during which period
the Company will, subject to available funding, have the option to
pay Vutomi GBP215,000 to fund exploration activities to earn an
initial 15% of Vutomi. During Phase 1 Vutomi will grant the Company
the sole and exclusive right to fund exploration activities in, on
and under the Vutomi Prospecting Rights Area in order to prepare a
conceptual mining and development plan. The required mining permits
are in place.
On 29 September 2017, the company moved into Phase 2 of the
Option and Earn-In Agreement.
Phase 2
Phase 2 lasted until 5 January 2019 and the company extended
their option for a further 90 days, during which period the Company
will, subject to available funding, have the option to pay Vutomi
GBP366,000 to fund exploration activities to earn an additional 25%
of Vutomi.
Phase 3
Phase 3 will commence within 90 days of the successful
completion of Phase 2. Pursuant to the Agreement, the Company will
have the option to issue the outstanding balance of 96.8m Ordinary
Shares, priced at VWAP, to Vutomi and, subject to available
funding, settle Vutomi's shareholders loan accounts of
approximately GBP300,000 in cash to earn a further 32% of
Vutomi.
Termination
At any point the Agreement will lapse if the Company does not
exercise its option regarding a specific Phase.
The directors believe that there were no facts or circumstances
indicating that the carrying value of intangible assets may exceed
their recoverable amount and thus no impairment review was deemed
necessary by the directors. The realisation of these intangible
assets is dependent on the successful discovery and development of
economic diamond resources and the ability of the Group to raise
sufficient finance to develop the projects. It is subject to a
number of significant potential risks, as set out below:
-- licence obligations;
-- exchange rate risks;
-- uncertainties over development and operational costs;
-- political and legal risks, including arrangements with
governments for licenses, profit sharing and taxation;
-- foreign investment risks including increases in taxes,
royalties and renegotiation of contracts;
-- title to assets;
-- financial risk management;
-- going concern; and
-- operational and environmental risks.
Included in additions for the period are GBPNil (June 2018:
GBP6,951) of share based payments, GBP7,791 (June 2018: GBP15,516)
of wages and salaries and GBP44,969 (June 2018: GBP90,443) of
directors remuneration.
5. SHARE CAPITAL
Deferred Shares Number Share Capital Share Premium
GBP'000 GBP'000
At 1 July 2017 and 1 July 2018 239,487,648 1,796,157 -
At 30 June 2018 and 31 December 2018 239,487,648 1,796,157 -
============ ============== ==============
Ordinary Shares Number Share Capital Share Premium
GBP'000 GBP'000
At 1 July 2017 379,562,908 949 9,085
Issued during the period 79,484,300 199 670
Share issue expenses - - (4)
At 31 December 2017 459,047,208 1,148 9,751
------------ -------------- --------------
Issued during the period 50,235,300 125 377
Share issue expenses - (29)
------------ -------------- --------------
At 30 June 2018 509,282,508 1,273 10,099
------------ -------------- --------------
Issued during the period - - -
At 31 December 2018 509,282,508 1,273 10,099
============ ============== ==============
Movements in share capital
On 3 August 2017, the Company raised GBP603,000 through the
issue of 48,240,000 new ordinary shares of 0.25p each at a price of
1.25p per share to provide additional working capital and fund
development costs. In addition, 31,244,300 warrants were also
exercised at a price of 0.85p per warrant for GBP265,577
On 20 December 2017, 235,300 warrants were exercised at a price
of 0.85p per warrant for GBP2,000.
On 14 February 2018, the Company raised GBP500,000 through the
issue of 50,000,000 new ordinary shares of 0.25p each at a price of
1p per share to provide additional working capital and fund
development costs.
6. POST BALANCE SHEET EVENTS
On 23(rd) January 2019 the Company announced that they had
raised GBP370,000 via the placing of 67,272,727 new ordinary shares
at a placing price of 0.55p per share. Each placing share has one
warrant attached with the right to subscribe for one new ordinary
share at 0.6p per new ordinary share for a period of two years from
23(rd) January 2019.
The net proceeds of the placing will fund ongoing diamond
exploration in South Africa and Botswana and will also provide the
Company with additional working capital.
7. APPROVAL
The Interim Report for the period to 31(st) December 2018 was
approved by the Directors on 22(nd) March 2019.
8. AVAILABILITY OF REPORT
The Interim Statement will be available on the website at
www.botswanadiamonds.co.uk
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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