RNS Number:9029S
Petra Diamonds Ld
05 December 2003
5th December 2003
PETRA DIAMONDS LIMITED
PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 30 JUNE 2003
Highlights of 2003
* Exploration operations recommenced in Angola and three further
diamondiferous kimberlites discovered on the Alto Cuilo concession
* The Petra-led consortium selected as a short-listed bidder in the Alexkor
privatisation process
* Option agreement signed with Rio Tinto on the Limpopo properties;
prospecting underway by Rio Tinto and kimberlitic indicator minerals found
* Acquisition of Pakwe (formerly Falcon) kimberlite exploration project in
South Africa
* Raising of #2m of debt finance to finance development of Alto Cuilo
Adonis Pouroulis, Chairman, said;
"Petra Diamonds is now poised for growth and I believe that we are in a position
to extract maximum value out of our existing asset base for our shareholders. At
the same time, the Company is now well placed to strengthen its existing
portfolio by acquiring income producing assets."
Summary of Results - unaudited
2003 2002
Loss for the year #875,370 #2,282,696
Loss per share - pence 1.81p 5.21p
For further information, please contact:
Justine Howarth / Cathy Malins
Parkgreen Communications
Tel: 020 7287 5544
Chairman's Statement
Dear Shareholder,
I am proud to present the annual results for Petra's sixth year of operation.
The overriding objectives of the Company are completion of the exploration and
evaluation programmes on its existing projects and maturing them to realise a
positive cash flow as well as the acquisition of a successful revenue-producing
diamond mine.
Results
The loss for the year amounted to #875,370 (2002 #2,282,696) equating to a loss
per share of 1.81 pence (2002 5.21 pence). The Group operating loss stated
before net financing costs was #1,755,114 (2002 #729,502), this increase being
due to the recommencement of operations in Angola and the costs of preparing the
Alexkor bid. Net financing revenues of #879,744 (2002 loss of #1,553,194)
occurred due to the strengthening of the rand during the year relating to the
borrowings between Petra Diamonds Limited and its overseas subsidiaries.
Strategy
The priorities for the next twenty four months are to achieve rapid progress on
the Alto Cuilo concession and on the South African exploration properties whilst
actively looking for suitable acquisition opportunities. The Company has been
preparing itself for some time to move beyond pure exploration to include
production of diamonds and, where appropriate, of precious metals with a
specific focus on platinum and gold.
While pursuing organic growth, the Company is also actively investigating the
acquisition of new projects which are either in or near positive cash flow.
During the period under review considerable time and effort was spent both on
the process of tendering for a 51% shareholding in the South African state-owned
diamond mine, Alexkor Limited, and on looking at other existing mining
operations in the diamond sector. Several such opportunities are under review at
the date of this statement. None of the projects on which analysis has been
completed has fully met Petra's investment criteria, although the Board is
confident that these activities will eventually bear fruit.
Angola
The Company's primary focus in the past year has been on our concessions in
North Eastern Angola, and in particular Alto Cuilo, on which we discovered a
kimberlite shortly before the declaration of force majeure in 1998 forced us to
suspend operations. Within weeks of returning to the concession in May this
year, we discovered three further diamondiferous kimberlites in close proximity
to the original discovery. The new discoveries have since been verified by
independent consultants and a drilling programme will commence in December 2003.
A trial mining and bulk sampling work programme has been scheduled for the
coming year, commencing in the first quarter of 2004.
I would like to thank Endiama, the Angolan Government diamonds agency, and
Moyoweno, our Angolan partner, for their support during Petra's first year back
in Angola following the end of hostilities and look forward to working with them
in achieving our common goals over the next few years.
I believe Alto Cuilo offers the Company a very strong possibility of proving up
a large and successful diamond resource in the short-term. It is too early to
determine the size and magnitude of such a diamond resource, but indications at
this time are that any future operation on Alto Cuilo has the potential of being
of significant size.
Alexkor
Your Company, with its consortium partners, continues to pursue its bid to
become a 51% shareholder in the Alexkor diamond mine in South Africa. The
privatisation of Alexkor by the South African Government, which was due to be
completed during the period under review, has unfortunately been delayed. We are
currently awaiting the outcome of the Land Claim Court and the conclusion of
negotiations between the Richtersveld community and the South African
Government. Privatisation remains a realistic prospect, however, and Petra
retains its commitment to securing the 51% shareholding on offer. Alexkor is a
large producer of gemstone quality diamonds and I believe that with further
investment in proving up new diamond reserves, Alexkor can have a long and
profitable future.
Nabera
Petra is a 29.5% shareholder in Nabera Mining (Pty) Ltd ("Nabera"), which
managed the Alexkor diamond mine between 1999 and 2001. In terms of the
management agreement under which Nabera managed the mine, Nabera is entitled to
one third of the "value added" to the mine during its management period. The
opening and closing valuation reports have been completed by Snowden Mining
Industry Consultants in accordance with the principles contained in the
management agreement and have been submitted to Alexkor, Nabera and the South
African Government. It is Petra's objective that the Nabera value-add claim be
finalised with the Government and Alexkor in the financial year ending 30 June
2004 . It should be noted that the Government has the right to elect to satisfy
Nabera's value add payment either in cash or in the form of shares in Alexkor
Limited.
Exploration in South Africa
During the year under review, the Company continued its exploration activities
in South Africa, submitting new prospecting permits for the Syferfontein and
Pakwe kimberlites. Bulk sampling and drilling are planned for both kimberlites
as soon as the prospecting permits are issued.
On the Limpopo properties, Rio Tinto commenced exploration in terms of the
option agreement with Petra. By July 2003 kimberlitic indicator minerals had
been successfully recovered from three of the seven properties under licence.
Petra also made its first excursion out of the diamond arena by applying for a
prospecting permit over an area known to host platinum group metals.
Funding
In August this year the Company secured debt funding of #2 million which is
largely being applied to the development of the Alto Cuilo concession. In
addition, the Company continues to have access to the equity line of credit from
Cornell Capital. The cost of developing a project such as Alto Cuilo is
substantial and therefore the Company is considering other funding alternatives
best suited to its needs.
Corporate Governance
As noted in my Chairman's Statement that accompanied the 2002 Report, it is the
stated objective of the Board that the roles of Chairman and CEO be held by
different individuals, not only to take account of accepted corporate governance
good practice but also to ensure that the group is properly structured with the
best individuals to ensure that it delivers on its projects and opportunities.
Whilst interviews have been held with candidates for the role of CEO during the
year, a suitable individual has not yet been identified. The search process will
continue and the Board, taking account of input from its advisers, will move
forward to meet the stated objective.
People
The rapid developments in Petra's Angolan projects more than offset the
frustration felt over the delays in the Alexkor privatisation process. The Petra
team has remained totally committed and focused for which I am grateful and
thank them.
I am pleased to welcome David Abery as the new finance director. During David's
short time with us he has already added significant value and his presence on
the Board is most welcome
Conclusion
I also wish to thank all shareholders who have supported the company and
continue to believe in what we are aiming to achieve.
The Company is well placed for growth from its existing projects and through the
future acquisition of income producing assets.
Adonis Pouroulis
Chairman
5 December 2003
Petra Diamonds Limited
Consolidated Income Statement
for the year ended 30 June 2003
2003 2002
# #
Other operating income 2,739 127,395
Other operating charges (1,757,853) (856,897)
Group operating loss (1,755,114) (729,502)
Net financing revenue/(costs) 879,744 (1,553,194)
Loss before and after taxation for the financial year (875,370) (2,282,696)
Basic loss per share - pence (1.81) (5.21)
The Group's income and expenses all relate to continuing operations in the
current and previous year.
Consolidated Statement of Total Recognised Gains and Losses
for the year ended 30 June 2003
2003 2002
# #
Loss for the financial year (875,370) (2,282,696)
Exchange adjustments on translation of subsidiary and (541,295) 1,527,619
branch undertakings recognised directly in equity
Total recognised gains and losses relating to the financial (1,416,665) (755,077)
year
Petra Diamonds Limited
Consolidated Balance Sheet
at 30 June 2003
2003 2002
# #
Assets
Property, plant and equipment 130,319 12,972
Intangible assets 77,341 55,479
Investment in associates - 27,542
Total non-current assets 207,660 95,993
Other receivables 166,983 473,246
Cash at bank and in hand 263,949 139,615
Total current assets 430,932 612,861
Total assets 638,592 708,854
Equity and liabilities
Equity
Issued capital 5,163,849 4,623,561
Share premium account 12,878,603 12,347,332
Foreign currency translation reserve 1,485,984 2,027,279
Accumulated loss (19,358,262) (18,482,892)
Total equity 170,174 515,280
Minority interests - -
Liabilities
Trade and other payables 90,210 -
Total non-current liabilities -
90,210
Trade and other payables 378,208 193,574
Total current liabilities 378,208 193,574
Total liabilities 468,418 193,574
Total equity, minority interests and liabilities 638,592 708,854
Petra Diamonds Limited
Consolidated Cash Flow Statement
for the year ended 30 June 2003
2003 2002
# #
Loss before and after taxation for the financial year (875,370) (2,282,696)
Depreciation of tangible fixed assets 9,775 9,323
Amortisation of intangible assets 5,290 3,733
Loss on sale of fixed assets 1,396 70,428
Provision for write down of investment in associates 27,542 -
Write down of minority interests - (2,211)
Foreign exchange (gain)/loss (560,313) 1,541,694
Interest received (785) (9,479)
Interest paid 11,870 9,478
Operating loss before working capital changes (1,380,595) (659,730)
Decrease / (increase) in debtors 306,263 (383,753)
Increase / (decrease) in creditors 274,844 (640,302)
Cash utilised in operations (799,488) (1,683,785)
Interest paid (11,870) (9,478)
Net cash utilised by operating activities (811,358) (1,693,263)
Cash flows from investing activities
Purchase of property, plant and equipment (128,694) (7,672)
Purchase of intangible assets (10,122) -
Additions to investments - (1)
Proceeds from sale of property, plant and equipment 2,164 -
Interest received 785 9,479
Net cash (utilised by) / generated from investing activities (135,867) 1,806
Cash flows from financing activities
Net proceeds from the issue of share capital 1,071,559 1,728,198
Net cash generated from financing activities 1,071,559 1,728,198
Net increase in cash and cash equivalents 124,334 36,741
Cash and cash equivalents at beginning of the year 139,615 102,874
Cash and cash equivalents at end of the year 263,949 139,615
Notes to the Financial Statements
for the year ended 30 June 2003
1. Other operating charges
2003 2002
# #
Auditors' remuneration - audit services 46,510 48,634
- other services 3,138 3/4
Amortisation of mineral rights 5,290 3,733
Depreciation of tangible assets 9,775 9,323
Operating lease rentals 59,727 21,913
Staff costs 611,690 338,979
Bid expenditure (Alexkor / Dimeng) 282,030 19,829
Provision for potentially irrecoverable loan to associate 27,542 5,250
Other charges 712,151 409,236
1,757,853 856,897
2. Net financing revenue/(costs) # #
On bank loans and overdrafts (315) (755)
Other debt finance costs (11,555) (8,723)
Interest paid (11,870) (9,478)
Foreign exchange gains /(losses) 890,829 (1,553,195)
Interest received 785 9,479
879,744 (1,553,194)
3. Loss per share
The calculation of basic loss per share is based on the loss for the
financial year of #875,370 (2002: loss of #2,282,696) and on a weighted
average of 48,405,126 (2002: 43,809,493) ordinary shares of 10p each in
issue during the year.
# #
Loss for the financial year 875,370 2,282,696
Shares Shares
Basic weighted average number of ordinary shares in issue 48,405,126 43,809,493
Pence Pence
Basic loss per share - pence (1.81) (5.21)
Due the Company's loss for the year the diluted loss per share is the
same as the basic loss per share.
This information is provided by RNS
The company news service from the London Stock Exchange
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