28 Dec 2012 07:00
African Potash Limited / Index: AIM / Epic: AFPO / Sector: Mining
28 December 2012
African Potash Limited ('African Potash' or 'the Company')
Final Results
African Potash Limited, the AIM listed African exploration company, is pleased to announce it final results for the year ended 30 June 2012. Copies of the Annual Report and Accounts for the year ended 30 June 2012 will be posted to shareholders today and will also be available on the Company's website at www.africanpotash.com by 31 December 2012.
Chairman's Statement:
African Potash was established in 2011 as a dedicated vehicle focused on investing in or acquiring potash assets in Sub-Saharan Africa. The Board's plan is to take advantage of the long term growth fundamentals of potash and the increasing demand for potash from the agricultural sector. Following admission to trading on AIM in September 2011 and the raising of approximately $10.9m through two equity fundraisings, each at 5p per share, the Company has concentrated on its strategy to review, acquire and advance targeted assets that met the criteria of our investment policy.
In line with this strategy, on 3 February 2012 the Company entered into a conditional share purchase agreement ('SPA') to acquire the entire issued share capital of Patagonia Capital Limited ('Patagonia'), a Mauritian company which holds a 70% interest in La Societe des Potasses et des Mines S.A. ('SPM'), a company incorporated in the Republic of Congo for the purpose of mineral exploration. The SPA was conditional, inter alia, on shareholder approval and a permis de recherches (the 'Permis de Recherches') being granted to SPM by the Government of the Republic of Congo in respect of the Lake Dinga area of the Republic of Congo.
As shareholders will be aware there were significant, unexpected delays to the grant of the Permis de Recherches, despite preliminary approval and recommendation by the Minister of Mines. When, in October 2012, it became apparent that the Permis de Recherches would not be granted prior to the contractual long stop date, the SPA was terminated. As we announced in October, the principal factors which caused the delay were outside the control of SPM and Patagonia, including the Congo national Parliamentary elections which took place on 15 July 2012.
The Board is actively seeking to conclude an acquisition in the near term and I look forward to updating shareholders shortly. I'd like to thank shareholders for their patience. The Board continues to believe that potash is a commodity with attractive commercial attributes and we look forward to reporting on further progress towards the establishment of a dedicated potash business and the creation of long term significant shareholder value.
Edward Marlow
Chairman & CEO
27 December 2012
For further information visit www.africanpotash.com or contact the following:
Ed Marlow | African Potash Limited | +44 (0) 20 7408 9200 |
Jonathan Wright | Seymour Pierce Limited | +44 (0) 20 7107 8000 |
David Foreman | Seymour Pierce Limited | +44 (0) 20 7107 8000 |
Richard Greenfield | GMP Securities Europe LLP | +44 (0) 20 7647 2836 |
Susie Geliher | St Brides Media and Finance Ltd | +44 (0) 20 7236 1177 |
STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 June 2012
| Period ended 30 June | ||||
2012 | |||||
Note | $'000 | ||||
Operating expenses | (2,810) | ||||
Operating loss | (2,810) | ||||
Finance income | 16 | ||||
Loss before taxation | (2,794) | ||||
Income tax expense | - | ||||
Loss for the period and total comprehensive income for the period | (2,794) | ||||
Loss per share | |||||
- Basic and diluted (cents) | 4 | (1.6c) | |||
STATEMENT OF FINANCIAL POSITION
As at 30 June 2012
2012 | |||||
Note | $'000 | ||||
ASSETS | |||||
Non-current assets | |||||
Loans and receivables | 5 | - | |||
Total non-current assets | - | ||||
Current assets | |||||
Trade and other receivables | 33 | ||||
Cash and cash equivalents | 8,192 | ||||
Total current assets | 8,225 | ||||
TOTAL ASSETS | 8,225 | ||||
LIABILITIES | |||||
Current liabilities | |||||
Trade and other payables | (108) | ||||
NET ASSETS | 8,117 | ||||
EQUITY | |||||
Issued capital | 6 | 10,911 | |||
Retained earnings | (2,794) | ||||
TOTAL EQUITY | 8,117 | ||||
STATEMENT OF CHANGES IN EQUITY For the period ended 30 June 2012
| Share capital $'000 | Retained earnings $'000 | Total
$'000 | |
Balances at 11 August 2011 | - | - | - | |
Loss for the period | - | (2,794) | (2,794) | |
Total comprehensive income for the period
| - | (2,794) | (2,794) | |
Transactions with owners | ||||
Share issues | 10,911 | - | 10,911 | |
Total transactions with owners | 10,911 | - | 10,911 | |
Balances at 30 June 2012 | 10,911 | (2,794) | 8,117 | |
CASH FLOW STATEMENT
For the period ended 30 June 2012
Period ended 30 June | |||||
2012 | |||||
$'000 | |||||
Operating activities | |||||
Loss before tax | (2,794) | ||||
Adjustments for: | |||||
- Impairment of loans and receivables | 1,441 | ||||
- Interest income | (16) | ||||
Operating cash flow before movements in working capital | (1,369) | ||||
Working capital adjustments: | |||||
- Increase in receivables | (33) | ||||
- Increase in payables | 108 | ||||
Cash used in operations | (1,294) | ||||
Interest received | 16 | ||||
Net cash used in operating activities | (1,278) | ||||
Investing activities | |||||
Advance of loans and receivables | (1,441) | ||||
Net cash used in investing activities | (1,441) | ||||
Financing activities | |||||
Proceeds from issue of share capital | 10,911 | ||||
Net cash from financing activities | 10,911 | ||||
Net increase in cash and cash equivalents | 8,192 | ||||
Cash and cash equivalents at start of the period | - | ||||
Cash and cash equivalents at end of the period | 8,192 | ||||
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 30 June 2012
1. General Information
African Potash Limited is incorporated and domiciled in Guernsey. The nature of the Company's operations and its principal activities are set out in the Chairman's Statement.
The presentational currency of the Company is US Dollars as this reflects the Company's business activities in the resource exploration sector in sub-Saharan Africa and therefore the Company's financial position and financial performance.
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.
The financial statements for the year ended 30 June 2012 have been reported on by the Group's auditors and contain an unqualified opinion.
The full audit report is contained in the Company's Annual Report, which will be available on the Company's website by 31 December 2012.
2. Critical accounting estimates and judgments
The preparation of financial statements in conformity with IFRS as adopted in the EU requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below.
Loans and receivables
The Company has reviewed the recoverability of its loan receivable and considers, as the acquisition of Patagonia Capital Limited ("Patagonia") did not proceed, that, as at the date of these financial statements, there are indications of impairment. Accordingly an impairment provision for the loan balance has been made. .
Going concern
The board has prepared forecasts for the Company covering the period of 12 months from the date of approval of these financial statements.
The directors believe that, the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
3. Segment reporting
As set out in the operating review, the directors consider that the Company's is an investment company and operates in one geographical segment, Africa.
4. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
2012 | |||
$'000 | |||
Loss for the purposes of basic earnings per share | 2,794 | ||
Number of shares | |||
Weighted average number of ordinary shares for the purposes of basic and diluted loss per share | 174,357,632 | ||
Loss per share | (1.6c) |
No options or instruments which might give rise to dilution were in issue during the year.
5. Financial assets
Loans and Receivables |
Total | ||||
30 June 2012 | $'000 | $'000 | |||
Non-current assets | |||||
Loans and receivables | 1,441 | 1,441 | |||
Provision for impairment | (1,441) | (1,441) | |||
- | - | ||||
Current assets | |||||
Other receivables | 33 | 33 | |||
Cash and cash equivalents | 8,192 | 8,192 | |||
8,225 | 8,225 | ||||
The non-current asset is a loan to Patagonia which holds a 70% interest in Societe des Potasses et des Mines S.A. ("SPM"). On 3 February 2012, the Company entered into a conditional share purchase agreement ('SPA') to acquire the entire issued share capital of Patagonia. The SPA was conditional, inter alia, on a permis de recherches (the 'Permis de Recherches') being granted to SPM by the Government of the Republic of Congo. As shareholders will be aware, there were significant, unexpected delays to the grant of the Permis de Recherches. When, in October 2012, it became apparent that the Permis de Recherches would not be granted prior to the contractual long stop date, the SPA was terminated. The loan was to fund the working capital requirements of Patagonia and SPM up to the completion of the acquisition of Patagonia. Accordingly, as at the date of these financial statements, the Company considers the loan to be fully impaired.
Cash balances include $59,000 of restricted cash relating to cash held on deposit as security for credit card expenditure.
The directors consider that the carrying amount of financial assets approximates their fair value. There are no significant amounts past due.
6. Share capital
Allotted and fully paid | |||
Ordinary shares of no par value | Number | $'000 | |
At 11 August 2011 | |||
Issue of shares | 198,700,000 | 10,911 | |
At 30 June 201121 | 198,700,000 | 10,911 | |
The Company has one class of ordinary share which carries no right to fixed income.
Between incorporation and 23 September 2011, 40 million ordinary shares were issued for cash at a price of 0.1p per ordinary share and 35 million ordinary shares were issued for cash at a price of 2p per ordinary share.
On 30 September 2011, 83.7 million ordinary shares were issued for cash at a price of 5p per ordinary share.
On 4 November 2011, 40 million ordinary shares were issued for cash at a price of 5p per ordinary share.
No share options or warrants were issued during the period.
**ENDS**