Interim Results
Premier African Minerals Limited / Ticker: PREM / Index: AIM / Sector: Mining
16 September 2013
Premier African Minerals Limited (`Premier' or `the Company')
Unaudited Interim Results for the six months ended 30 June 2013
Premier African Minerals Limited, the AIM quoted multi-commodity natural
resource company with mineral projects located in Africa, announces its
unaudited interim results for the six months ended 30 June 2013.
Highlights
* Completed a maiden resource statement and mining study on RHA Tungsten
Project in Zimbabwe
* Received final approval from the TSX Venture Exchange for sale of Togo and
Mali subsidiaries to AgriMinco Corp (`AgriMinco') for consideration of 120
million new shares in AgriMinco, representing 42% of the share capital in
AgriMinco
Executive Chairman and CEO Statement
Shortly after the reporting period ended 30 June 2013, Premier achieved two
significant milestones: the completion of a maiden resource statement and
mining study outlining the robust economics of its near-term RHA Tungsten
Project in Zimbabwe; and approval of the sale of our Togo and Mali subsidiaries
from the TSX Venture Exchange (`TSX-V') to take a 42% shareholding in AgriMinco
Corp. (formerly known as Ethiopian Potash Corp). Both of these achievements
have potential to deliver value to our shareholders in the near-term.
Projects
RHA Tungsten Project - Zimbabwe
In August 2013, Premier published a maiden SAMREC code compliant resource of
1,093,000 tonnes at a grade of 8.7 kg/t tungsten trioxide ('WO3') in the
Inferred category, and 147,000 tonnes at 4.7 kg/t WO3 in the Indicated
category. Importantly, this grade compares most favourably to industry
standards and was calculated over one lode, `Lode 2A', of a seven lodes
identified at RHA to date.
The Preliminary Economic Assessment (`PEA') and Mining Study announced on 18
August 2013, illustrated robust economics and indicated a Capex of US$13.5m, a
pre-tax IRR of 316%, positive cash flow of US$118 million, an undiscounted
pre-tax NPV of US$118 million, and a lead time to first production of saleable
product of approximately 10 months from the commencement of development. For
the full details of the PEA and Mining Study, please visit the Company's
website www.premierafricanminerals.com.
There is potential to increase and upgrade RHA's resource in the future as
further exploration is conducted on the known remaining mineralised lodes
described in the PEA. Additionally, as announced earlier this month, Premier
extended its option over the dormant historic Tung tungsten mine (`Tung'). The
Tung mine, which is approximately 5 km to the North of RHA, has 2 km of
untested strike, which we believe could add to the resource base of RHA and in
turn increase the life of mine.
Premier is actively engaged in discussions with potential off-take partners and
funders to advance the development of the project targeting production by late
2014.
Corporate Transaction
On 5 July 2013 we received final approval from the TSX-V for the sale of one of
our Togo subsidiaries and our Mali subsidiary which hold exploration permits
for phosphates, clays and potash to AgriMinco (formerly Ethiopian Potash
Corp.). The Company now holds 120 million new shares in AgriMinco, representing
approximately 42% of the issued shares. 100 million of the shares become
tradeable on 1 November 2013 while 20 million remain in escrow pending the
fulfilment of certain technical requirements imposed by the TSX-V.
Through our shareholding in AgriMinco, we gain exposure to its highly
prospective Danakil potash property in Ethiopia in which it has a 30% interest.
AgriMinco has a free carry to scoping study and a total spend of $7 million.
The operators and 70% owners of the Danakil property, Circum Resources Ltd.,
plan to rapidly advance exploration on the property.
Financial Review
In the six months to 30 June 2013 the Group incurred a loss of US$1,186,807.
The loss includes a US$288,714 share based payment charge for options issued on
Admission to AIM and excessive professional fees, partly related to the
AgriMinco transaction. The Company invested US$587k in its exploration
properties, mainly on its RHA Tungsten Project resource work and mining study.
Cash at the end of June 2013 was US$157k with the £300k (US$465k) facility
being drawn down from the month of July. As mentioned in our annual report
issued in June 2013, the Company needs to secure further funding to advance RHA
and to fund operations and is currently in negotiations with several parties.
It is noted that 100 million of the Company's shares in AgriMinco will be free
trading from 1 November 2013. Subject to regulatory approval, I have provided
an undertaking to Premier that additional drilling, metallurgical test work and
early EPCM work necessary at RHA to facilitate early exploitation may commence
immediately and that associated overheads will be met pending conclusion of the
negotiations presently underway.
Corporate Review
Following the period end, two new board members were appointed Alexander du
Plessis and Neil Herbert (see announcement dated 20 August 2013). Both bring
valuable skills to Premier; Alexander du Plessis in regard to mine development
with special reference to Premier's RHA Tungsten Project and Neil Herbert in
corporate affairs, market communication and deal structuring. In line with
these appointments, Bruce Cumming and Leslie Goodman have stepped down from the
Board.
Outlook
I am delighted with the progress that we have made these past six months in
regard particularly to our RHA Tungsten Project and our investment in
AgriMinco. I particularly look forward to seeing the Company transition from
exploration to exploitation. I believe we are in a fortunate position in that
our leading project is concerned with Tungsten, currently a favoured and
desireable commodity.
George Roach
Executive Chairman and CEO
16 September 2013
For further information please visit www.premierafricanminerals.com or contact
the following:
Pamela Hueston Premier African Minerals Limited Tel: +44 (0) 755 778 3855
Tony Rawlinson Cairn Financial Advisers LLP (Nomad) Tel: +44 (0) 207 148 7900
Jerry Keen Shore Capital Stockbrokers Limited Tel: +44 (0) 207 408 4090
(Broker)
Edward Mansfield Shore Capital Stockbrokers Limited Tel: +44 (0) 207 408 4090
(Broker)
Felicity Edwards St Brides Media & Finance Ltd (PR) Tel: +44 (0) 20 7236 1177
Charlotte Heap St Brides Media & Finance Ltd (PR) Tel: +44 (0) 20 7236 1177
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
Continuing operations Notes Six months Six months Year to 31
to 30 June to 30 June December
2013 2012 2012
(Unaudited) (Unaudited) (Audited)
$ $ $
Administrative expenses 5 (1,180,753) (468,909) (2,040,721)
Depreciation and amortization expense (6,054) (14,253) (25,581)
Exploration expenses - (9,947) (36,279)
Operating loss (1,186,807) (493,109) (2,102,581)
Finance costs - - 4,312
Loss before tax (1,186,807) (493,109) (2,098,269)
Income tax expense 6 - - -
Loss for the period (1,186,807) (493,109) (2,098,269)
Other comprehensive income:
Exchange differences on (125,431) (25,307) 31,408
re-translation of foreign operations
Total comprehensive income for the (1,312,238) (518,416) (2,066,861)
period attributable to the owners of
the parent
Loss per share attributable to the
owners of the parent (expressed in US
cents)
Basic loss per share 7 (0.4c) (1.0c) (3.0c)
Diluted loss per share 7 (0.4c) (1.0c) (3.0c)
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
Notes 30 June 30 June 31 December
2013 2012 2012
(Unaudited) (Unaudited) (Audited)
$ $ $
ASSETS
Non-current assets
Intangible exploration and
evaluation assets 8 7,287,276 3,806,606 6,724,099
Property, plant and 42,154 58,392 48,301
equipment
Total non-current assets 7,329,430 3,864,998 6,772,400
Current assets
Trade and other 9 129,635 1,195,133 179,973
receivables
Cash and cash equivalents 156,934 87,737 1,517,784
Total current assets 286,569 1,282,870 1,697,757
TOTAL ASSETS 7,615,999 5,147,868 8,470,157
LIABILITIES
Current liabilities
Trade and other payables 10 (339,690) (889,785) (170,324)
Borrowings 11 - (5,638,567) -
Shares to be issued 12 (1,500,000) - (1,500,000)
TOTAL CURRENT LIABILITIES (1,839,690) (6,528,352) (1,670,324)
AND TOTAL LIABILITIES
NET ASSETS/(LIABILITIES) 5,776,309 (1,380,484) 6,799,833
EQUITY
Share capital 13 11,006,728 1,562,000 11,006,728
Merger reserve (176,495) (176,495) (176,495)
Foreign exchange reserve (94,023) (25,307) 31,408
Share based payment 592,352 19,604 303,638
reserve
Retained earnings (5,552,253) (2,760,286) (4,365,446)
TOTAL EQUITY ATTRIBUTABLE
TO THE OWNERS OF THE PARENT 5,776,309 (1,380,484) 6,799,833
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
Notes Six months Six months Year to 31
to 30 June to 30 June December
2013 2012 2012
(Unaudited) (Unaudited) (Audited)
$ $ $
Net cash outflow from operating 14 (672,335) (836,333) (1,759,712)
activities
Investing Activities
Exploration and evaluation 8 (586,664) (1,290,314) (1,825,596)
expenditures
Purchases of property, plant and - (30,000) (30,862)
equipment
Net cash used in investing (586,664) (1,320,314) (1,856,458)
activities
Financing Activities
Proceeds from borrowings 11 - 2,205,106 3,766,385
Proceeds from issue of share 13 - - 1,291,272
capital
Net cash inflow from financing - 2,205,106 5,057,657
activities
Net (decrease)/increase
in cash and cash equivalents
(1,258,999) 48,459 1,441,487
Cash and cash equivalents at 1,517,784 68,448 68,448
start of period
Net exchange (losses)/gains (101,851) (29,170) 7,849
on cash and cash equivalents
Net cash and cash equivalents 156,934 87,737 1,517,784
at end of period
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
Attributable to the owners of the parent
Share Merger Foreign Share Retained Total
capital reserve exchange based Earnings
reserve payment
reserve
$ $ $ $ $ $
At 1 January 2012 1,562,000 (176,495) - 19,604 (2,267,177) (862,068)
Loss for the period - - - - (493,109) (493,109)
Exchange - - (25,307) - - (25,307)
differences on
re-translation of
foreign operations
Total comprehensive - - (25,307) - (493,109) (518,416)
income for the
period
At 30 June 2012 1,562,000 (176,495) (25,307) 19,604 (2,760,286) (1,380,484)
At 1 January 2012 1,562,000 (176,495) - 19,604 (2,267,177) (862,068)
Loss for the year - - - - (2,098,269) (2,098,269)
Exchange - - 31,408 - - 31,408
differences on
re-translation of
foreign operations
Total comprehensive - - 31,408 - (2,098,269) (2,066,861)
income for the year
Transactions with
owners
Issue of equity 10,843,510 - - - - 10,843,510
shares
Share issue costs (1,398,782) - - - - (1,398,782)
Share based payment - - - 284,034 - 284,034
At 31 December 2012 11,006,728 (176,495) 31,408 303,638 (4,365,446) 6,799,833
Loss for the period - - - - (1,186,807) (1,186,807)
Exchange - - (125,431) - - (125,431)
differences on
re-translation of
foreign operations
Total comprehensive - - (125,431) - (1,186,807) (1,312,238)
income for the
period
Transactions with
owners
Share based payment - - - 288,714 - 288,714
At 30 June 2013 11,006,728 (176,495) (94,023) 592,352 (5,552,253) 5,776,309
1. GENERAL INFORMATION
Premier African Minerals Limited (`Premier' or `the Company'), together with
its subsidiaries (the `Group'), was incorporated in the Territory of the
British Virgin Islands under the BVI Business Companies Act, 2004. The address
of the registered office is Craigmuir Chambers, PO Box 71, Road Town, Tortola,
British Virgin Islands. Premier's shares were admitted to trading on the London
Stock Exchange's AIM market on 10 December 2012.
The Group's operations and principal activities are the exploration, evaluation
and development of mineral reserves, primarily on the African continent. The
presentational currency of the condensed consolidated interim financial
statements is US Dollars.
2. BASIS OF PREPARATION
These unaudited condensed consolidated interim financial statements for the six
months ended 30 June 2013 were approved by the board and authorised for issue
on 16 September 2013.
The basis of preparation and accounting policies set out in the Annual Report
and Accounts for the year ended 31 December 2012 have been applied in the
preparation of these condensed consolidated interim financial statements. These
are in accordance with the recognition and measurement principles of the
International Financial Reporting Standards (`IFRS') as endorsed by the EU that
are expected to be applicable to the consolidated financial statements for the
year ending 31 December 2013 and on the basis of the accounting policies
expected to be used in those financial statements.
The figures for the six months ended 30 June 2013 and 30 June 2012 are
unaudited and do not constitute full accounts. The comparative figures for the
year ended 31 December 2012 are extracts from the 2012 audited accounts and do
not constitute full accounts. The independent auditor's report on the 2012
accounts was not modified, but included an emphasis of matter on going concern.
3. GOING CONCERN
These unaudited condensed consolidated interim financial statements were
prepared on the going concern basis. The going concern basis assumes that the
Group will continue in operation for the foreseeable future and will be able to
realise its assets and discharge its liabilities and commitments in the normal
course of business.
The Group has incurred significant operating losses and negative cash flows
from operations as the Group is an exploration stage resource Group. The
recoverability of the underlying value of exploration and evaluation assets is
entirely dependent on the existence of economically recoverable reserves,
securing and maintaining title and beneficial interest in the properties, the
ability of the Group to obtain the necessary financing to complete development,
and future profitable production.
The Group had cash reserves at 13 September 2013 of approximately $40k, and has
an undrawn loan facility from the Chairman of $157k available to it. The
Directors have prepared detailed cash flow forecasts for the period ending 30
September 2014, taking into account forecast expenditure, available working
capital and the existing loan facility. These forecasts indicate that the Group
will need to obtain additional loan finance or equity to fund its operations
for that period.
As set out in the Chairman's Statement, the Chairman is currently in
negotiations with several parties to provide funds to the Group. The Chairman
also states 100 million AgriMinco shares will be free trading from 1st November
2013 and that ongoing overheads and exploration and development on RHA to
facilitate early exploitation will be met pending conclusion of negotiations
with potential funders.
After careful consideration of those matters set out above, the Directors are
of the opinion that the Group will be able to obtain adequate resources to
enable it to undertake its planned activities for the period to 30 September
2014 and have prepared these condensed consolidated interim financial
statements on the going concern basis. These condensed consolidated interim
financial statements do not include any adjustments to the amounts and
classification of assets and liabilities that might be necessary should the
Group be unable to continue in business.
4. SEGMENTAL REPORTING
Segmental information is presented in respect of the information reported to
the Directors. Currently the Group is in the exploration phase and no revenue
is being generated. The main business segment is that of an exploration group
and a corporate administrative entity.
An analysis of the Group's non-current assets by geographic location is set out
below.
30 June 30 June 31 December
2013 2012 2012
(Unaudited) (Unaudited) (Audited)
Non-current assets $ $ $
Zimbabwe 5,288,932 2,556,607 4,848,553
Togo 2,040,498 1,308,391 1,923,847
7,329,430 3,864,998 6,772,400
5. ADMINISTRATIVE EXPENSES
Six months Six months Year to
to to 31 December
30 June 30 June 2012
2013 2012
(Unaudited) (Unaudited) (Audited)
$ $ $
Staff costs 136,233 84,255 391,393
Consulting and advisory fees 196,922 83,170 235,727
Directors' fees 22,606 - 2,868
Audit, accounting and legal fees 242,172 23,036 79,115
Marketing and public relations 40,498 26,100 36,961
Travel 116,016 123,643 219,661
Vehicle 39,212 24,061 36,433
Donations - 25,380 25,088
Office and administration 98,561 62,750 218,444
Realized foreign exchange (gain) loss (181) 16,514 48,037
Aborted listing costs - - 372,240
Share based payment 288,714 - 374,754
1,180,753 468,909 2,040,721
6. TAXATION
There is no taxation charge in the period to 30 June 2013 (June 2012: nil, Dec
2012: nil). As an International Business Group, the British Virgin Islands
imposes no corporate taxes or capital gains tax. However, the Group may be
liable for taxes in the jurisdictions of the underlying operations.
To date, the Group has incurred tax losses however a deferred tax asset has not
been recognised in the accounts due to the unpredictability of future profit
streams.
7. LOSS PER SHARE
The calculation of loss per share is based on the loss after taxation divided
by the weighted average number of shares in issue during each period.
Six months Six months Year to
to to 31 December
30 June 30 June 2012
2013 2012
(Unaudited) (Unaudited) (Audited)
$ $ $
Net loss after taxation (1,186,807) (493,109) (2,098,269)
Weighted average number of Ordinary 335,567,591 47,300,002 69,413,680
Shares in calculating basic earnings
per share
Basic loss per share (expressed in US (0.4c) (1.0c) (3.0c)
cents)
Weighted average number of Ordinary 335,567,591 47,300,002 69,413,680
Shares used in calculating fully
diluted earnings per share
Diluted loss per share (expressed in US (0.4c) (1.0c) (3.0c)
cents)
As the Group incurred a loss for each period, there is no dilutive effect of
share options or warrants.
8. EXPLORATION AND EVALUATION ASSETS
Total
$
Cost
At 1 January 2012 2,512,136
Expenditure on exploration and evaluation 1,290,314
Foreign exchange 4,156
At 30 June 2012 3,806,606
Expenditure on exploration and evaluation 2,898,162
Foreign exchange 19,331
At 31 December 2012 6,724,099
Expenditure on exploration and evaluation 586,664
Foreign Exchange (23,487)
At 30 June 2013 7,287,276
Exploration costs not specifically related to a license or project or on
speculative properties are expensed directly to profit or loss in the period
incurred.
9. TRADE AND OTHER RECEIVABLES
30 June 30 June 31 December
2013 2012 2012
(Unaudited) (Unaudited) (Audited)
$ $ $
Sundry receivables 80,000 50,000 151,287
Prepayments 49,635 1,145,133 28,686
129,635 1,195,133 179,973
10. TRADE AND OTHER PAYABLES
30 June 30 June 31 December
2013 2012 2012
(Unaudited) (Unaudited) (Audited)
$ $ $
Trade payables 253,850 821,244 107,037
Accruals 85,840 68,541 63,287
339,690 889,785 170,324
11. BORROWINGS
Borrowings comprised loans from related and connected parties and were
capitalised as equity on Premier's Admission to AIM.
12. SHARES TO BE ISSUED
On 27 November 2012, the Group entered into an agreement to acquire the Zulu
claims from Mr Richard Dollar, a consultant to the Group. The consideration for
this acquisition was satisfied through the issue of $500,000 ordinary shares on
Admission to AIM (refer note 13) and $1,500,000 in ordinary shares due to be
issued. The quantity of shares to be issued is dependent on the exchange rate
at date subsequently this obligation is accounted for as a liability.
On 16 September 2013, the Company approved, pursuant to the exercise of its
option dated 27 November 2012 to acquire the Zulu claims, the issue and
allotment of 48,877,500 new ordinary shares at a price of 2 UK pence per share,
being the same price as the placing shares issued on Admission to AIM (refer
note 15).
13. SHARE CAPITAL
Issued share capital
Number of $
Shares
On incorporation 50,000 50,000
Subdivision of shares into 14 ordinary shares 650,000 -
Issue of shares to acquire ZimDiv Holdings 47,250,002 1,512,000
Limited
As at 1 January 2012* and 30 June 2012 47,950,002 1,562,000
Share issues on 4 December 2012:
* Shares issued for capitalisation of 2011 56,000,000 3,409,692
loans
* Shares issued for services received 14,175,000 453,600
* Shares issued to Admission Placees 75,000,000 2,420,815
* Shares issued for Zulu option, first 15,625,000 500,000
tranche of shares
* Shares issued for capitalisation of 2012 118,442,589 3,790,163
loans
* Shares issued for advisor fees 8,375,000 269,240
As at 31 December 2012 and 30 June 2013 335,567,591 12,405,510
Reconciliation to balance as stated in the
condensed consolidated interim statement of
financial position
Issued share capital (before issue costs) as at 31 12,405,510
December 2012
Share issue costs - year ended 31 December 2012 (1,398,782)
Issued share capital (net of issue costs) as at 31 11,006,728
December 2012 and 30 June 2013
* Premier acquired the ZimDiv Group in a Share Exchange Agreement in advance of
the Initial Public Offering. The transaction has been accounted for as a merger
of entities under common control and presented in the condensed consolidated
interim financial statements as if the Group has been one since from 1 January
2012.
14. NOTES TO THE CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT
Six months Six months Year to
to to 31 December
30 June 30 June 2012
2013 2012
(Unaudited) (Unaudited) (Audited)
$ $ $
Loss before tax (1,186,807) (493,109) (2,098,269)
Adjustments for:
Depreciation and amortisation 6,054 14,253 25,581
Finance costs - - (4,312)
Share based payments 288,714 - 374,754
Operating cash flows before movements (892,039) (478,856) (1,702,246)
in working capital
Decrease/(increase) in receivables 50,338 (1,093,696) (78,536)
Increase in payables 169,366 736,219 21,070
Net cash outflow from operating (672,335) (836,333) (1,759,712)
activities
15. EVENTS AFTER THE BALANCE SHEET DATE
On 5 July 2013, the Company received final approval from the TSX Venture
Exchange (`TSX-V') for the acquisition by AgriMinco Corp. (`AgriMinco')
(formerly Ethiopian Potash Corp.) of its Togo and Mali subsidiaries. The
Company now holds 120 million new shares in AgriMinco, representing
approximately 42% of the issued and outstanding shares. These shares, except as
mentioned below, are subject to a four month holding period and will be
tradeable from 31 October 2013. Of these shares, 20 million shares relating to
the sale of its Mali subsidiary will be held in escrow pending TSX-V approval
of technical and legal reports being satisfactorily submitted prior to 30 June
2014. If approval is not forthcoming the Mali subsidiary transaction will be
unwound. As part of the approval of the transactions, the Company has appointed
two representatives to AgriMinco's board.
On 17 March 2011, the ZimDiv Group entered into an Option Agreement with Mr C
Liebenberg and Ms C Correia (`Liebenberg Option') for the right to initially
prospect for base minerals and precious metals with an option to purchase a
block of mineral claims located in Zimbabwe. The purchase price was $150,000
less any claim maintenance costs paid by the Group and the agreement was for a
term of 12 months with the right to extend for a further 12 months under the
same terms and conditions. On 17 February 2013 the Liebenberg Option was
extended for a further 6 months at a monthly option fee of $4,000. On 28 August
2013 the option agreement was extended for a further 6 months expiring 28
February 2014 at the same option payment price with an increase in the exercise
price to $156,000.
On 16 September 2013, the final share payment consideration due to Richard
Dollar in respect of the exercise of the Zulu option was settled. The
consideration is US$1.5m (£978k) satisfied by the issue of 48,877,500 new
ordinary shares at an issue price of 2 UK pence per share to Alpha
International Business Limited, a nominee elected by Richard Dollar, a director
of the Company's Zimbabwean subsidiaries.
Tuesday, 14th May 2024
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