30 September 2013
Obtala Resources Limited
("Obtala" or the "Company")
(AIM: OBT)
Unaudited Interim Results
Obtala Resources Limited (AIM:OBT), the natural resource investment and development company, announces unaudited interim results for the 6 month period to 30 June 2013.
Highlights
Financials
· Strong balance sheet with net assets of £76.6 million (Dec 2012: £79.5 million)
· Group cash position of £2.2 million (Dec 2012: £2.0 million) with no debt
· Operating loss of £1.8 million for the period including all costs from Paragon and Montara.
Montara
· Development and investment in new sun dried tomato project on course for first sales in November 2013
· Off-take agreement in place with European buyer
· 22 hectares of seeds planted in nursery facility, 100 hectares cleared with phase 2 underway
· Indications are for monthly product yield estimates to exceed previous estimates of 100 tonnes per month of dried product
· Project will produce between 30-40 tonnes of final dried product for export on a weekly basis, 52 weeks a year.
· Heads of Agreement signed for control of a fruit and vegetable canning facility in Lesotho and entry into the branded goods market
· Railway sleeper contract completed, additional contacts pending
Investments
Paragon Diamonds
· Conclusion of bulk sampling activities by Paragon at the Lemphane Kimberlite
· Trial mining to process an additional 500,000 tonne per annum scheduled upon receipt of pending mining lease award
· Early indications are for an initial grade in the order of 2-3 cpht with average diamond values in excess of US$1,000-1,500 per carat
· Stones have been exported for valuation purposes, including an 8.86 carat yellow dodecahedron stone recovered in May, 2013.
Bushveld Minerals
· Positive results from metallurgical test-work and a highly encouraging Scoping Study reported
· JORC compliant 12,452 tons of contained tin at an average grade of 0.11% tin from the Zaaiplaats tin deposit
· Groenfontein and Zaaiplaats deposits now host a combined 18,447 tons of tin
· Acquisition of a 50% interest in new tin project
· Bushveld now a controlling shareholder in take-over target, Lemur Resources
Chairman's statement
I am pleased to present the interim report of Obtala Resources Limited ("Obtala" or "Company" and its subsidiaries (the "Group")) for the six months to 30 June 2013.
During the half year, Obtala continued to make good progress in developing its principal interest which comprises a self-sustainable forestry and agriculture business through Montara Continental Limited ("Montara") (75.0% owned subsidiary), with the focus being on building a significant horticultural project in Tanzania. The investments held by the Company in the diamond exploration and production company Paragon Diamonds Limited ("Paragon") (38.7% owned subsidiary), and the iron and tin developer Bushveld Minerals Limited ("Bushveld") (30.35% owned investment) have both performed well over the period with developments discussed below.
Financial results
Group Operating loss before tax for the six months to June 2013 was £1.8 million (2012: £2.2 million loss) comprising administration and operating costs of Montara and Paragon Diamonds. In addition there was a non cash loss of £4.9 million recognised in respect of buying back shares from Bushveld Minerals and share of losses from Bushveld of £0.3m. In the prior period there was £20.2 million of income arising from pre-IPO services provided to Bushveld.
Group net assets have stayed broadly consistent with the prior year end at £76.6 million, the only movement comprising the loss for the period offset by £1.4 million of funds raised by Paragon and foreign exchange gains arising on the retranslation of foreign assets of £2.2 million.
The Group held a cash balance of £2.2 million as at the 30 June 2013 period end (31 December 2012: £2.0 million).
Montara Continental
Since the beginning of the year, Montara has made good progress in developing its sustainable agricultural and forestry operations in Tanzania and Mozambique, respectively.
Agriculture
During the period, Montara has focused on the development and investment into its new horticultural business in Tanzania where the infrastructure is being created for a new sun-dried tomato farm. Land acquired under lease has been cleared and drip irrigation installed covering 30 hectares. In total over 100 hectares have been cleared which allows for the 30 hectares crop to be rotated three times a year. As of today, 22 hectares of seedlings have been planted in the nursery with an initial block of 4 hectares now being planted-out into the irrigated fields. Additional infrastructure completed includes the construction of the processing house, installation of 3 water boreholes, a 5,500m3 reservoir, nursery facility, workers accommodation block and connection to mainline electricity. Washing, processing and drying equipment manufacturing is in progress with installation and commissioning in October 2013. Once the farm is fully operational and running at capacity, the project will produce between 30-40 tonnes of final dried product for export on a weekly basis, 52 weeks a year.
First sales will be in November 2013 (initial production estimates have been exceeded) through our off-take agreement which was signed in April with a European based vegetable and fruit trading company. A significant post reporting event is the signing of a Head of Agreement with the Lesotho National Development Corporation which will lead to the Company managing and operating the only existing fruit and vegetable cannery in the Kingdom. The Company will hold a 70% interest in the new holding company and sees this as an excellent opportunity to enter into the branded goods market.
Forestry
The Company's main focus in Mozambique was directed towards the manufacture and supply of wooden railway sleepers to a private Mozambican entity which had been commissioned by Vale, the Brazilian mining conglomerate, to upgrade the railway infrastructure in Mozambique. The Company has successfully completed a contract for 7,500 units and has negotiated additional contracts which will start once the clients funding has been released from the main funding partner. These contracts will allow production to continue well into 2014.
The Company is also experiencing an upsurge in demand for timber from the domestic Mozambican market in response to the expected growth associated with recent oil and gas discoveries in the north of the country. Additional concessions awarded to the Company at the end of 2012 place the Company in a strong position to meet the increase in local demand.
Our forestry business is committed to working with high levels of sustainability. In terms of forestry this means obeying all local laws such as ensuring all timber is legally harvested and relevant taxes are paid. This also means the development and implementation of replanting and reforestation programmes, where we have focused on employing local women in this important role.
Paragon Diamonds
It has been a productive period for Paragon with steady progress being made on the flagship Lemphane Kimberlite project. There is currently strong demand for the type of stones that are being produced from Lemphane and with current global market supply constraints, this positions Paragon well to continue its' evaluation programme. Paragon has established a 1 million carat resource on the Motete Dyke project, and on the Lemphane Kimberlite has achieved valuations of individual stones in excess of $2,300 per carat from bulk sampling.
Lemphane Kimberlite - Lesotho
Lemphane is one of five major diamondiferous kimberlite pipes in Lesotho and Paragon has been undertaking an extensive evaluation programme in the pipe. The early indications are for an initial grade in the order of 2-3 cpht with average diamond values in excess of US$1,000-1,500 per carat with an initial tonnage estimate of 27 million tonnes, and the scope to increase this for the next mining stage. The high average stone size reported is populated with many high quality clear white, yellow and pink-brown diamonds.
Paragon completed the processing of 18,387 tonnes from pit samples taken across the pipe, producing 301.44 carats for an average grade of 1.87 cpht. These stones have been exported for valuation purposes and include an 8.86 carat yellow dodecahedron stone recovered in May, 2013. Deep delineation drilling was completed with favourable initial results. An independent report and a volumetric and tonnage estimate is expected from AMEC in due course.
Paragon expects to be awarded a mining lease imminently with trial mining to process an additional 500,000 tonne per annum to be scheduled upon receipt of the lease.
Bushveld Resources
Bushveld continues to make steady progress upgrading and expanding the known resource on both iron and tin projects, reporting a JORC compliant resource in excess of 770 million tonnes of iron ore and is on track to meet its 1 billion tonnes resource target. Positive results were returned from metallurgical test-work and a highly encouraging Scoping Study indicates that a small start-up operation of 5 million tonnes per annum, producing 2.2 million tonnes per annum of concentrate, will have an IRR of 34.2% and an NPV of $140 million at a 12.5% discount rate. The payback period from the start of mining is only 2 years. Well noted in the Study is that the project is located close to supportive bulk commodity infrastructure, and importantly, sufficient water resources have been identified.
Bushveld recently announced a JORC compliant 12,452 tons of contained tin at an average grade of 0.11% tin from the Zaaiplaats tin deposit. This represents a 208% resource upgrade in the overall tin inventory from the Groenfontein and Zaaiplaats deposits from 5,995 tons tin to 18,447 tons tin. A metallurgical test-work programme is underway on both targets and will be completed together with the resource definition work and consolidated into a Scoping Study towards the end of 2013. A post period event is the acquisition of a 50% interest in the Marble Hall tin deposit which is believed to contain an additional 12,000 tonnes of tin.
In April, Bushveld announced a take-over bid for ASX listed Lemur Resources which if successful will create a diversified African junior mining company with a portfolio of mineral assets in South Africa and Madagascar. At the time of reporting Bushveld holds 52% of Lemur and is the effective controller of Lemur.
Also in April, the Company entered into an agreement to sell part of its shareholding in Bushveld to a private unrelated entity. At the time of reporting the Company has been informed that the proposed purchaser is still seeking final approval from its funding partner.
Outlook
The outlook for the Group remains very positive with the development of the new horticultural project in Tanzania progressing on track for production and revenues this year. We remain extremely optimistic with development plans to re-position the Company as a self-sustainable, profitable agribusiness and timber trading company with the objective of utilising our current land holdings as a platform for the creation of a vertically integrated company. We continue to evaluate expansion opportunities elsewhere in Africa as we seek to grow the Company. An example of our determination is the recent signing of a Heads of Agreement to assume control over a cannery in Lesotho at zero cost and not taking on any debt in exchange for the operatorship of the cannery, thus allowing us to enter the branded goods market. Our investments, Paragon and Bushveld, have both performed well operationally over the period and have attractive futures presenting near term production opportunities. In the meantime, we will seek strategic partners for our investments who have strong balance sheets and who will actively develop the projects to achieve production goals and revenues. The growth and development that we have witnessed in Tanzania and Mozambique over the reporting period bodes well for the future of the Company with the business fundamentals of Montara remaining highly attractive in an exciting and growing investment sector. Finally, I would like to thank our shareholders for their continued support and also all of our employees across the Group for their hard work and commitment in the period.
Francesco Scolaro
Executive Chairman
27 September 2013
Obtala Resources Francesco Scolaro - Chairman www.obtalaresources.com |
+44 (0) 20 7099 1940
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Macquarie Capital (Europe) Limited (Nomad and Broker) |
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Nicholas Harland |
+44 (0) 20 3037 2000 |
Steve Baldwin |
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Consolidated condensed statement of comprehensive income
Continuing operations |
Notes |
Six months to 30 June 2013 (Unaudited) £'000 |
Six months to 30 June 2012 (Unaudited) £'000 |
Year to 31 December 2012 (Audited) £'000 |
Revenue |
|
148 |
175 |
929 |
Gain/(loss) on investments |
3 |
(125) |
130 |
(276) |
Operating costs |
|
(652) |
(634) |
(1,352) |
Administrative expenses |
|
(825) |
(1,605) |
(2,955) |
Impairment of intangible assets |
|
- |
- |
(961) |
Depreciation |
|
(211) |
(29) |
(251) |
Share based payment |
|
(124) |
(249) |
(306) |
Operating profit/(loss) |
|
(1,789) |
(2,212) |
(5,172) |
Share of losses of associate |
|
(308) |
|
(736) |
Provision of pre IPO services |
|
|
20,221 |
20,280 |
Loss on disposal of associate |
|
(4,904) |
|
|
Finance income |
|
|
- |
- |
Finance costs |
|
- |
(4) |
(11) |
Profit/(loss) before tax |
|
(7,001) |
18,005 |
14,361 |
Taxation |
5 |
- |
- |
155 |
Profit/(loss) for the period/year from continuing operations |
|
(7,001) |
18,005 |
14,516 |
Discontinued operations |
|
|
|
|
Loss for the year from discontinued operations |
|
- |
(479) |
(3,954) |
Total profit/loss for the period/year |
|
(7,001) |
17,526 |
10,562 |
|
|
|
|
|
Attributable to: |
|
|
|
|
Owners of the parent |
|
(6,536) |
18,269 |
13,475 |
Non-controlling interests |
|
(465) |
(743) |
(2,913) |
|
|
(7,001) |
17,526 |
10,562 |
Other comprehensive income: |
|
|
|
|
Exchange differences of re-translation of foreign operations |
|
2,244 |
(611) |
(3,916) |
Total comprehensive income for the period: |
|
(4,756) |
16,915 |
6,646 |
Attributable to: |
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|
|
|
Owners of the parent |
|
(4,656) |
17,707 |
10,989 |
Non-controlling interests |
|
(101) |
(792) |
(4,343) |
|
|
(4,757) |
16,915 |
6,646 |
|
|
|
|
|
Earnings/(loss) per share |
|
|
|
|
From continuing and discontinued operations |
|
|
|
|
Basic and diluted (pence) |
6 |
(2.59) |
7.28 |
4.34 |
From continuing operations |
|
|
|
|
Basic and diluted (pence) |
6 |
(2.59) |
7.48 |
5.97 |
The loss for the period arises from the Group's continuing operations.
Consolidated condensed statement of changes in equity
|
Share capital |
Share premium |
Merger reserve |
Foreign exchange reserve |
Share based payment reserve |
Revenue reserve/ (deficit) |
Total |
Non-controlling interests |
Total equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
At 1 January 2012 |
2,382 |
6,677 |
28,543 |
6,353 |
677 |
1,565 |
46,197 |
20,428 |
66,625 |
Profit/(loss) for the period |
- |
- |
- |
- |
- |
18,269 |
18,269 |
(743) |
17,526 |
Exchange differences on retranslation of foreign operations |
- |
- |
- |
(562) |
- |
- |
(562) |
(49) |
(611) |
Total comprehensive income for the period |
- |
- |
- |
(562) |
- |
18,269 |
17,707 |
(792) |
16,915 |
Issue of shares |
119 |
3,764 |
- |
- |
- |
- |
3,883 |
- |
3,883 |
Share based payment |
- |
- |
- |
- |
249 |
- |
249 |
- |
249 |
Transfer of share based payment on cancelled options |
- |
- |
- |
- |
(16) |
16 |
- |
- |
- |
Dilution of interest in subsidiary |
- |
- |
- |
- |
- |
528 |
528 |
997 |
1,525 |
At 30 June 2012 |
2,501 |
10,441 |
28,543 |
5,791 |
910 |
20,378 |
68,564 |
20,633 |
89,197 |
Profit/(loss) for the period |
- |
- |
- |
- |
- |
(4,796) |
(4,796) |
(2,170) |
(6,966) |
Exchange differences on retranslation of foreign operations |
- |
- |
- |
(1,924) |
- |
- |
(1,924) |
(1,381) |
(3,305) |
Total comprehensive income for the period |
- |
- |
- |
(1,924) |
- |
(4,796) |
(6,720) |
(3,551) |
(10,271) |
Issue of shares |
- |
- |
- |
- |
- |
- |
- |
- |
|
Share based payment |
- |
- |
- |
- |
59 |
- |
59 |
- |
59 |
Dilution of interest in subsidiary |
- |
- |
- |
- |
- |
11 |
11 |
464 |
475 |
At 31 December 2012 |
2,501 |
10,441 |
28,543 |
3,867 |
969 |
15,593 |
61,914 |
17,546 |
79,460 |
Profit/(loss) for the period |
- |
- |
- |
- |
- |
(6,536) |
(6,536) |
(465) |
(7,001) |
Exchange differences on retranslation of foreign operations |
- |
- |
- |
1,880 |
- |
- |
1,880 |
364 |
2,244 |
Total comprehensive income for the period |
- |
- |
- |
1,880 |
- |
(6,536) |
(4,656) |
(101) |
(4,757) |
Issue of shares |
131 |
1,084 |
- |
|
- |
- |
1,215 |
- |
1,215 |
Share based payment |
- |
- |
- |
|
124 |
- |
124 |
- |
124 |
Purchase of own shares |
- |
- |
- |
|
- |
(881) |
(881) |
- |
(881) |
Dilution of interest in subsidiary |
- |
- |
- |
|
|
(1,372) |
(1,372) |
2,782 |
1,410 |
At 30 June 2013 |
2,632 |
11,525 |
28,543 |
5,747 |
1,093 |
6,804 |
56,344 |
20,227 |
76,571 |
Consolidated condensed statement of financial position
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Notes |
30 June 2013 (Unaudited) |
30 June 2012 (Unaudited) |
31 December 2012 (Audited) |
|
|
£'000 |
£'000 |
£'000 |
ASSETS |
|
|
|
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Non-current assets |
|
|
|
|
Available for sale investments |
|
273 |
251 |
261 |
Investment in associate |
8 |
19,277 |
26,105 |
25,370 |
Intangible exploration and evaluation assets |
7 |
62,583 |
61,137 |
58,957 |
Plant and equipment |
|
2,904 |
6,455 |
2,830 |
Total non-current assets |
|
85,037 |
93,948 |
87,418 |
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Current assets |
|
|
|
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Trade and other receivables |
|
323 |
38 |
477 |
Inventory |
|
58 |
66 |
55 |
Financial investment assets |
|
- |
230 |
- |
Cash and cash equivalents |
|
2,169 |
5,433 |
1,994 |
Total current assets |
|
2,550 |
5,767 |
2,526 |
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|
|
|
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TOTAL ASSETS |
|
87,587 |
99,715 |
89,944 |
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|
|
|
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LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
(307) |
(239) |
(390) |
Financial investment liabilities |
|
(168) |
(9) |
(43) |
Current tax liabilities |
|
(2) |
- |
(2) |
Total current liabilities |
|
(477) |
(248) |
(435) |
|
|
|
|
|
Non-current liabilities |
|
|
|
|
Deferred tax |
5 |
(9,698) |
(9,450) |
(9,127) |
Loans |
|
(706) |
(359) |
(774) |
Site restoration provision |
|
(135) |
(461) |
(148) |
Total non-current liabilities |
|
(10,539) |
(10,270) |
(10,049) |
TOTAL LIABILITIES |
|
(11,016) |
(10,518) |
(10,484) |
|
|
|
|
|
NET ASSETS |
|
76,571 |
89,197 |
79,460 |
|
|
|
|
|
EQUITY |
|
|
|
|
Share capital |
10 |
2,632 |
2,501 |
2501 |
Share premium |
11 |
11,525 |
10,441 |
10441 |
Merger reserve |
|
28,543 |
28,543 |
28543 |
Foreign exchange reserve |
|
5,747 |
5,791 |
3,867 |
Share based payment reserve |
|
1,093 |
910 |
969 |
Revenue reserve/(deficit) |
12 |
6,804 |
20,378 |
15,593 |
Equity attributable to the owners of the parent |
|
56,344 |
68,564 |
61,914 |
Non-controlling interests |
14 |
20,227 |
20,633 |
17,546 |
TOTAL EQUITY |
|
76,571 |
89,197 |
79,460 |
Approved by the board and authorised for issue on 27 September 2013
F Scolaro P Cohen
Executive Chairman Finance Director
Consolidated condensed statement of cash flows
|
Notes |
Six months to 30 June 2013 (Unaudited) |
Six months to 30 June 2012 (Unaudited) |
Year to 31 December 2012 (Audited) |
|
||
|
|
£'000 |
£'000 |
£'000 |
|
||
OPERATING ACTIVITIES |
|
|
|
|
|
||
Operating profit/(loss) |
|
(7,001) |
18,005 |
14,361 |
|||
Adjustment for non-cash items: |
|
|
|
|
|||
Provision of pre-IPO services |
9 |
- |
(20,221) |
(20,280) |
|||
(Gains)/loss on investments |
|
125 |
(130) |
43 |
|||
Foreign exchange (gains)/losses |
|
(412) |
(136) |
(19) |
|||
Depreciation of plant and equipment |
|
211 |
29 |
251 |
|||
Share based payments |
|
124 |
249 |
306 |
|||
Impairment of assets |
|
4,904 |
- |
961 |
|||
Decrease/(increase) in trade and other receivables |
|
154 |
182 |
736 |
|||
(Decrease)/increase in trade and other payables |
|
(79) |
- |
248 |
|||
Decrease/(Increase) in inventory |
|
3 |
1 |
(55) |
|||
Finance expense/(income) |
|
- |
4 |
11 |
|||
Share of losses of associate |
|
308 |
- |
736 |
|||
Cash outflow from continuing operations |
|
(1,663) |
(2,017) |
(3,694) |
|||
Income taxes paid |
|
- |
(504) |
(502) |
|||
Net cash outflow from continuing operations |
|
(1,663) |
(2,521) |
(4,196) |
|||
Net cash outflow from discontinued operations |
|
|
(216) |
(281) |
|||
Net cash flow from operating activities |
|
(1,663) |
(2,737) |
(4,477) |
|||
|
|
|
|
|
|||
INVESTING ACTIVITIES |
|
|
|
|
|||
Purchases of property, plant and equipment |
|
(406) |
(583) |
(1,528) |
|||
Purchase of exploration licences |
|
|
- |
(62) |
|||
Expenditure on exploration licences |
7 |
(381) |
(535) |
(1,805) |
|||
Purchase of investments |
8 |
- |
(275) |
(126) |
|||
Disposal of investments |
8 |
- |
223 |
253 |
|||
Loans received/(advanced ) |
|
- |
- |
405 |
|||
Net cash inflow/(outflow) from investing activities |
|
(787) |
(1,170) |
(2,863) |
|||
|
|
|
|
|
|||
FINANCING ACTIVITIES |
|
|
|
|
|||
Proceeds from issue of share capital |
10 |
1,215 |
- |
- |
|||
Expenses of issue of share capital |
11 |
|
- |
- |
|||
Funds raised by subsidiary |
|
1,410 |
1,725 |
1,725 |
|||
Expenses of issue of subsidiary shares |
|
- |
- |
- |
|||
Finance income |
|
- |
- |
- |
|||
Finance expense |
|
- |
(4) |
(11) |
|||
Net cash inflow from financing activities |
|
2,625 |
1,721 |
1,714 |
|||
|
|
|
|
|
|||
(Decrease)/Increase in cash and cash equivalents |
|
175 |
(2,186) |
(5,626) |
|||
Cash and cash equivalents at start of period |
|
1,994 |
7,625 |
7,625 |
|||
Effect of foreign exchange rate variation |
|
|
(6) |
(5) |
|||
Net cash and cash equivalents at end of period |
|
2,169 |
5,433 |
1,994 |
|
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Note to the consolidated condensed interim financial statements
1. BASIS OF PREPARATION
The interim financial statements of Obtala Resources Limited are unaudited condensed consolidated financial statements for the six months to 30 June 2013. These include unaudited comparatives for the six month period to 30 June 2012 together with audited comparatives for the year to 31 December 2012.
2. SIGNIFICANT ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared under the historical cost convention except for the revaluation of certain financial investments, available for sale investments and financial assets and liabilities which are included at fair value.
The accounting policies adopted are consistent with those followed in the preparation of the Group's annual financial statements for the period ended 31 December 2012.
The condensed consolidated financial statements do not constitute statutory accounts. The statutory accounts for the period to 31 December 2012 have been reported on by the Company's auditors and were unqualified.
3. (Loss)/GAINs ON INVESTMENTS
|
Six months to 30 June 2013 |
Six months to 30 June 2012 |
Year to 31 December 2012 |
|
|
£000 |
£000 |
£000 |
|
Gain/(loss) on disposal of investments |
- |
(30) |
(233) |
|
(Decrease)/increase in fair value of financial investments |
(125) |
160 |
(43) |
|
Gain/(loss) from investing activities |
(125) |
130 |
(276) |
4. SEGMENTAL REPORTING
The Group is currently in the process of production of diamonds, as well as exploration and development of mineral projects, as well as agriculture and forestry. In addition, the Group undertakes investing activities, which are now based principally in Guernsey. These are the Group's primary reporting segments.
The following table shows the geographic segment analysis of the Group's loss after tax for the period and balance sheet net assets:
|
Six months to 30 June 2013 |
|||||
|
Production |
Exploration and development |
Agriculture and forestry |
Central costs and Investing activities |
Inter-group elimination |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Revenue |
- |
- |
148 |
- |
- |
148 |
Gain on investments |
- |
- |
- |
(125) |
- |
(125) |
Share of losses of associate |
- |
- |
- |
(308) |
- |
(308) |
Operating costs |
- |
- |
(649) |
- |
- |
(649) |
Administrative expenses |
- |
- |
- |
(824) |
- |
(824) |
Depreciation |
- |
- |
(211) |
- |
- |
(211) |
Share based payment charge |
- |
- |
- |
(124) |
- |
(124) |
Impairment of assets |
- |
- |
- |
(4,904) |
- |
(4,904) |
Segment profit/(loss) before interest |
- |
- |
(713) |
(6,286) |
- |
(7,001) |
Finance income |
- |
- |
- |
- |
- |
- |
Finance expense |
- |
- |
- |
- |
- |
- |
Profit/(loss) before tax |
- |
- |
(713) |
(6,286) |
- |
(7,001) |
Taxation |
- |
- |
- |
- |
- |
- |
Profit/(loss) after tax |
- |
- |
(713) |
(6,286) |
- |
(7,001) |
|
|
|
|
|
|
|
Balance sheet |
|
|
|
|
|
|
Assets |
|
64,590 |
2,386 |
32,735 |
(12,122) |
87,589 |
Liabilities: |
|
|
|
|
|
|
Current tax liability |
|
|
|
|
|
|
Deferred taxation |
|
(9,698) |
- |
- |
- |
(9,698) |
Other |
|
(7,664) |
(4,241) |
(1,537) |
12,122 |
(1,320) |
Net assets |
|
47,228 |
(1,855) |
31,198 |
- |
76,571 |
Other segment items: |
|
|
|
|
|
|
Depreciation |
|
- |
211 |
- |
- |
211 |
Foreign exchange |
|
2,385 |
(532) |
26 |
|
1,879 |
Capital expenditure |
|
|
|
|
|
|
Plant and equipment |
|
101 |
203 |
- |
- |
304 |
Intangible exploration and evaluation assets |
|
504 |
- |
- |
- |
504 |
|
Six months to 30 June 2012 |
|||||
|
Discontinued Operations - Production |
Exploration and development |
Agriculture and forestry |
Central costs and Investing activities |
Inter-group elimination |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Revenue |
- |
- |
175 |
- |
- |
175 |
Gain on investments |
- |
- |
- |
130 |
- |
130 |
Gain on acquisition of associate |
- |
- |
- |
20,221 |
- |
20,221 |
Management charge |
- |
- |
- |
- |
- |
- |
Operating costs |
(216) |
(25) |
(609) |
- |
- |
(850) |
Administrative expenses |
- |
- |
- |
(1,605) |
- |
(1,605) |
Depreciation |
(263) |
- |
(27) |
(2) |
- |
(292) |
Share based payment charge |
- |
- |
- |
(249) |
- |
(249) |
Impairment of assets |
- |
- |
- |
- |
- |
- |
Segment profit/(loss) before interest |
(479) |
(25) |
(461) |
18,495 |
- |
17,530 |
Finance income |
- |
- |
- |
- |
- |
- |
Finance expense |
(4) |
- |
- |
- |
- |
(4) |
Profit/(loss) before tax |
(483) |
(25) |
(461) |
18,495 |
- |
17,526 |
Taxation |
- |
- |
- |
- |
- |
- |
Profit/(loss) after tax |
(483) |
(25) |
(461) |
18,495 |
- |
17,526 |
|
|
|
|
|
|
|
Balance sheet |
|
|
|
|
|
|
Assets |
4,305 |
61,922 |
1,686 |
41,613 |
(9,811) |
99,715 |
Liabilities: |
|
|
|
|
|
|
Current tax liability |
- |
- |
- |
- |
- |
- |
Deferred taxation |
- |
(9,450) |
- |
- |
- |
(9,450) |
Other |
(1,986) |
(4,788) |
(2,526) |
(1,579) |
9,811 |
(1,068) |
Net assets |
2,319 |
47,684 |
(840) |
40,034 |
- |
89,197 |
Other segment items: |
|
|
|
|
|
|
Depreciation |
(263) |
- |
(27) |
(2) |
- |
(292) |
Foreign exchange |
49 |
(611) |
- |
- |
- |
(562) |
Capital expenditure |
|
|
|
|
|
|
Plant and equipment |
- |
35 |
548 |
- |
- |
583 |
Intangible exploration and evaluation assets |
- |
470 |
- |
- |
- |
470 |
Year ending 31 December 2012
|
Discontinued Operations - Production |
Exploration and development |
Agriculture and Forestry |
Central Costs and Investing activities |
Inter-group elimination |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Income statement |
|
|
|
|
|
|
Revenue |
- |
- |
929 |
- |
- |
929 |
Losses on investments |
- |
- |
- |
(276) |
- |
(276) |
Provision of pre IPO services |
- |
- |
- |
20,280 |
- |
20,280 |
Share of losses of associate |
- |
- |
- |
(736) |
- |
(736) |
Operating costs |
- |
(20) |
(1,332) |
- |
- |
(1,332) |
Administrative expenses |
- |
- |
- |
(2,955) |
- |
(2,955) |
Depreciation |
- |
- |
(247) |
(4) |
- |
(251) |
Share based payment |
- |
- |
- |
(306) |
- |
(306) |
Disposal |
(3,954) |
- |
- |
- |
- |
(3,954) |
Impairment of assets |
- |
(961) |
- |
- |
- |
(961) |
Segment loss before interest |
(3,954) |
(981) |
(650) |
16,003 |
- |
10,418 |
Finance income |
- |
- |
- |
- |
- |
- |
Finance expense |
- |
- |
- |
(11) |
- |
(11) |
Loss before tax |
(3,954) |
(981) |
(650) |
15,992 |
- |
10,407 |
Taxation |
|
|
|
|
|
155 |
Loss after tax |
|
|
|
|
|
10,562 |
|
|
|
|
|
|
|
Net Assets |
|
|
|
|
|
|
Assets |
- |
61,017 |
2,202 |
37,674 |
(10,950) |
89,942 |
Liabilities: |
|
|
|
|
|
|
Deferred tax liability |
- |
(9,127) |
- |
- |
- |
(9,127) |
Other |
- |
(7,274) |
(3,484) |
(1,547) |
10,950 |
(1,355) |
Net assets |
- |
44,616 |
(1,282) |
36,127 |
- |
79,460 |
Other segment items: |
|
|
|
|
|
|
Capital expenditure |
|
|
|
|
|
|
Plant and equipment |
- |
272 |
1,310 |
- |
- |
1,582 |
Intangible exploration and evaluation assets |
- |
2,103 |
- |
- |
- |
2,103 |
5. TAXATION
The accrued tax charge for the six month interim period is based on an estimated worldwide average effective tax rate of nil per cent. after allowance for utilisation of tax losses brought forward in UK based subsidiaries (six months to 31 June 2012: nil%)
The Group has recognised a deferred tax liability of £9,698,000 at 30 June 2013 (30 June 2012: £9,450,000 31 December 2012: £9,127,000) which arose on the difference between the book value and the fair value of assets acquired on the acquisition of a subsidiary.
6. EARNINGS PER SHARE
Basic earnings per share is based on the loss for the six months of £6,536,000 attributable to equity holders of the parent divided by the weighted average number of ordinary shares in issue during the period of 251,921,807 exclusive of ordinary shares purchased by the Obtala Resources Employee Share Trust and held jointly by the Trust and certain employees (period to 30 June 2012 : profit £17,526,000 divided by the weighted average of 240,855,158 shares; year to 31 December 2012: profit £10,562,000 divided by the weighted average of 243,330,709 shares).
Dilutive earnings per share is calculated by adjusting the weighted average number of shares in issue during the year to assume conversion of all dilutive potential ordinary shares, being share options and the shares held by the Trust and certain employees. There were no potentially dilutive shares in issue in the six months to 30 June 2013 (period to 30 June 2012: nil, year to 31 December 2012: nil).
7. INTANGIBLE EXPLORATION AND EVALUATION ASSETS
|
Renholn Licences |
Mindex Licences |
Paragon Licences |
Uragold Licences |
Montara Licences |
Total Licences |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Cost and book value at 1 January 2012 |
156 |
19,421 |
41,147 |
682 |
- |
61,406 |
Expenditure on exploration and evaluation |
- |
- |
470 |
- |
65 |
535 |
Foreign Exchange |
- |
(217) |
(361) |
(226) |
- |
(804) |
Cost and book value at 30 June 2012 |
156 |
19,204 |
41,256 |
456 |
65 |
61,137 |
Expenditure on exploration and evaluation |
- |
- |
1,571 |
- |
- |
1,571 |
Foreign Exchange |
- |
(964) |
(1,676) |
(147) |
(3) |
(2,790) |
Impairment charge |
(156) |
(496) |
- |
(309) |
- |
(961) |
Cost and book value at 31 December 2012 |
- |
17,744 |
41,151 |
- |
62 |
58,957 |
Expenditure on exploration and evaluation |
- |
- |
504 |
- |
- |
504 |
Foreign Exchange |
- |
1,092 |
2,026 |
- |
4 |
3,122 |
Cost and book value at 30 June 2013 |
- |
18,836 |
43,681 |
- |
66 |
62,583 |
Purchase of mining licences
The above values of intangible exploration assets acquired represent the cash and non-cash consideration paid by the Group at the time of their acquisition, together with any subsequent expenditure, net of any effects of foreign exchange and impairment charges.
Impairment
The Directors have considered the following factors when undertaking their impairment review of the intangible assets:
a) Geology and lithology on each licence as outlined in the most recent CPRs (Independent Competent Person's Reports)
b) The expected useful lives of the licences and the ability to retain the license interests when they come up for renewal
c) Comparable information for large mining and exploration companies in the vicinity of each of the licences
d) History of exploration success in the regions being explored
e) Local infrastructure
f) Climatic and logistical issues
g) Geopolitical environment
After considering these factors the Directors have chosen not to make an impairment charge to the carrying value of the intangible exploration and evaluation assets as at 30 June 2013.
8. INVESTMENTS IN ASSOCIATES
During the period the Group's interest in Bushveld was reduced from 46% to 30% as a result of disposing of 30,120,482 as consideration for buying back 11,949,378 shares in the Company. A non cash loss on this disposal has been recorded of £4.9 million in the current period.
9. SHARE CAPITAL
|
Number |
£'000 |
Authorised ordinary shares of £0.01 each: |
|
|
At 1 January 2012, 31 December 2012 and 30 June 2013 |
Unlimited |
Unlimited |
Allotted, issued and fully paid ordinary shares of £0.01 each: |
|
|
At 1 January 2012 |
238,179,974 |
2,382 |
Issued in the period |
11,949,378 |
119 |
At 30 June 2012 |
250,129,352 |
2,501 |
Issued in the period |
- |
- |
At 31 December 2012 |
250,129,352 |
2,501 |
Issued in the period |
13,131,312 |
131 |
At 30 June 2013 |
263,260,664 |
2,632 |
On 21 February 2013 the Company issued 4,377,104 new ordinary shares at a price of 14.85 pence per share for a cash consideration of £650,000.
On 6 April 2013 the Company purchased 11,949,378 of its own shares and disposed of 30,120,482 shares in Bushveld Minerals Limited as consideration. The market prices for the shares at completion date were 7.375p and 11.75 p respectively. The shares are currently held in treasury.
On 9 April 2013 the Company issued 4,377,104 new ordinary shares at a price of 6.75 pence per share for a cash consideration of £295,541.
On 22 May 2013 the Company issued 4,377,104 new ordinary shares at a price of 6.15 pence per share for a cash consideration of £269,192.
10. SHARE PREMIUM
|
£'000 |
At 1 January 2012 |
6,677 |
Premium on issue of shares |
3,764 |
At 30 June 2012 |
10,441 |
Premium on issue of shares |
- |
At 31 December 2012 |
10,441 |
Premium on issue of shares |
1,084 |
At 30 June 2013 |
11,525 |
|
|
See note 10 for details of shares issued in the six month period to 30 June 2013.
11. MOVEMENT IN REVENUE RESERVE AND OWN SHARES
|
Retained earnings/(deficit) |
Own shares |
Revenue Reserve |
|
£'000 |
£'000 |
£'000 |
At 1 January 2012 |
2,981 |
(1,416) |
1,565 |
Profit for the period |
18,269 |
- |
18,269 |
Transfer from share based payment reserve |
16 |
- |
16 |
Dilution of interest in subsidiary (see note 13) |
528 |
- |
528 |
At 30 June 2012 |
21,794 |
(1,416) |
20,378 |
Profit for the period |
(4,796) |
- |
(4,796) |
Dilution of interest in subsidiary (see note 13) |
11 |
- |
11 |
At 31 December 2012 |
17,009 |
(1,416) |
15,593 |
Profit for the period |
(6,536) |
|
(6,652) |
Purchase of own shares |
- |
(882) |
(882) |
Dilution of interest in subsidiary (see note 13) |
(1,372) |
- |
(1,372) |
At 30 June 2013 |
9,101 |
(2,298) |
6,804 |
Own shares held by the Trust represent the cost of Obtala Resources Limited shares purchased in the market and through subscription and held by the Obtala Resources Limited Employee Share Trust jointly with a number of the Group's employees. At 30 June 2013 4,350,000 shares were held by the trust (June 2012: 2,250,000 December 12: 4,350,000)
During the six month period to 30 June 2013 the Group acquired 11,949,378 Ordinary Shares in the in Obtala Resources Limited. Consideration was settled by way of transferring 30,120,482 shares the Group held in Bushveld Minerals Limited. The own shares have been included at the prevailing market price of the date of the transaction.
12. DEEMED PARTIAL DISPOSAL OF SUBSIDIARY UNDERTAKING
In the six months to 30 June 2013 the Company's listed subsidiary Paragon Diamonds Limited ("Paragon") issued 28,200,000 new shares to non-controlling interests raising gross cash proceeds of £1.41 million.
This diluted Obtala's interest in Paragon to 39.6% and created a deemed disposal for the Group resulting in a loss recognised in equity of £1.4 million.
After the reporting date Obtala subscribed for 2,000,000 new ordinary shares in Paragon Diamonds Limited - the effect of this has not been included in these condensed financial statements.
13. NON-CONTROLLING INTEREST
|
£'000 |
At 1 January 2012 |
20,428 |
Non-controlling interests in net assets on partial disposal (see note 12) |
997 |
Non-controlling interests in share of losses post acquisition |
(743) |
Non-controlling interests in foreign exchange gains |
(49) |
At 30 June 2012 |
20,633 |
Non-controlling interests in net assets on partial disposal (see note 12) |
464 |
Non-controlling interests in share of losses post acquisition |
(2,170) |
Non-controlling interests in foreign exchange gains |
(1,381) |
At 31 December 2012 |
17,546 |
Non-controlling interests in net assets on partial disposal (see note 12) |
2,782 |
Non-controlling interests in share of losses post acquisition |
(465) |
Non-controlling interests in foreign exchange gains |
364 |
At 30 June 2013 |
20,227 |
|
|
14. INTERIM FINANCIAL REPORT
A copy of this interim report will be distributed to shareholders and is also available on the Company's website at www.obtalaresources.com