31 Mar 2011 09:25
MAGHREB MINERALS plc
INTERIM REPORT AND ACCOUNTS FOR THE SIX MONTHS ENDED
31 DECEMBER 2010
MAGHREB MINERALS plc
Interim Results for the six months to 31 December 2010
Maghreb Minerals plc ("Maghreb" or "the Company"), the AIM-quoted mineral exploration company focussed on acquiring interests in fluorspar operations globally as well as exploring and developing base metals and industrial minerals in Tunisia, announces its un-audited results for the six-month period ended 31 December 2010.
Highlights and Outlook
·; Raising £4,323,056 during the period under review to develop its current and proposed portfolio through the issue of 273,603,215 new ordinary shares.
·; Raising an additional £3,160,556 in January 2011 through the issue of 180,603,215 new ordinary shares
·; The purchase of an 11.4% stakes in Sallies Ltd for a consideration of £776,448.
·; Maghreb entered into two transactions on 24 December 2010 (that are conditional on shareholder approval) to acquire Firebird's 66.9% shareholding in Sallies Ltd ("Sallies") and its 20% stake in Kenya Fluorspar Company Ltd ("KFC"). The transactions represent a significant step towards the Company's stated strategy of acquiring significant fluorspar assets internationally.
·; The Company continues to work with its advisers on the preparation of an AIM admission document in respect of the proposed acquisitions from Firebird which constitute a reverse takeover. The company expects to be able to publish this document in the second quarter of 2011.
ENQUIRIES:
Maghreb Minerals plc Tel +27 (0) 83 258 9062
Dunbar Dales, CEO
Westhouse Securities Limited Tel +44 (0) 20 7601 6100
Tim Feather / Martin Davison
CHAIRMAN'S STATEMENT
Operations
Set out below is a review of Maghreb Minerals Plc's activities and unaudited financial results for the six months ended 31 December 2010.
During the period under review, the Company raised £4,323,056 to develop its current and proposed portfolio. The monies were raised in two tranches as follows
·; £1,162,500 through subscriptions for 93,000,000 new ordinary shares of 0.6 pence each in the Company at a price of 1.25 pence per share.
·; £3,160,556 through subscriptions for 180,603,215 new ordinary shares of 0.6 pence each in the Company at a price of 1.75 pence per share.
In addition, the Company raised an additional £3,160,556 through subscriptions for 180,603,215 new ordinary shares of 0.6 pence each in the Company at a price of 1.75 pence per share in January 2011 comprising the settlement of half of the £6,321,112 .5 placing announced on 24 December 2010 (the "Placing"). Importantly, the Placing was supported by Macquarie Bank Ltd whose participation resulted in it acquiring a 28.48% interest in the Company on the 4 January 2011. This represents an important vote of confidence in Maghreb and its stated strategy by a major institutional investor.
Maghreb entered into two conditional transactions on 24 December 2010 to acquire interests in two fluorspar companies representing a significant step towards the Company's stated strategy of acquiring significant fluorspar assets internationally:
·; The Company has conditionally agreed to purchase, from Firebird Global Master Fund, Ltd and Firebird Global Master Fund II, Ltd (together "Firebird"), their total equity stake in Sallies of 484,958,606 ordinary shares, which equates to a 66.9% shareholding in Sallies (which provides an aggregate holding for Maghreb of 78.3% given its existing 11.4% stake in Sallies). The consideration for the acquisition of the shares in Sallies is the issue of 335,636,268 Maghreb shares. The Company has also conditionally agreed to purchase, from Firebird, their holdings in Sallies debentures. Firebird will sell its 83,412,850 debentures for an aggregate consideration of 134,701,973 Maghreb shares.
·; The Company has conditionally agreed to purchase, from Firebird Global Master Fund II, Ltd ("Firebird II"), its total equity stake in KFC of 1,000,000 ordinary shares, which equates to a 20% shareholding in KFC. These shares will be acquired for a consideration of 100,291,929 Maghreb shares. The prior consent of KFC's 80% shareholder has been obtained. The Company has also conditionally agreed to purchase, from Firebird II, its holding of 500,000 KFC convertible debentures for a consideration of 15,802,781 Maghreb shares. The arrangements for the acquisition of KFC debentures are contained in the KFC Agreement and are therefore subject to the same conditions as for the acquisition of KFC shares.
The completion of the transaction requires the approval of the Maghreb shareholders at an EGM called for that purpose. A circular explaining the details of the proposed Sallies and KFC acquisitions is currently being prepared by the Company in conjunction with its advisers and this is expected to be posted to the shareholders during the second quarter of 2011. The successful completion of this transaction will trigger a mandatory offer to the Sallies minorities under the rules of the Johannesburg Stock Exchange Limited.
Financial
The Group made a consolidated loss for the six months ended 31 December 2010 of £859,000 (six months ended 31 December 2009 - £366,000).
The financial highlights are tabled below:
Unaudited Six months to 31 December 2010 | Unaudited Six months to 31 December 2009 | Audited 12 months to 30 June 2010 | |
(£'000) | (£'000) | (£'000) | |
Interest income | - | - | - |
Fixed assets purchased | (1) | - | (2) |
Trade investment made | (776) | ||
Total exploration expenditure incurred in Tunisia | (124) | (103) | (747) |
Administration expenses | (735) | (263) | (704) |
Loss for the period | (859) | (366) | (1,453) |
Cash and Cash Equivalents | 3,272 | 207 | 461 |
The debtors at 31 December 2010 included an amount of £3.2 million in respect of subscription monies owing for the shares issued in January 2011. These funds were received in January 2011.
Outlook
The acquisitions of interests in Sallies and KFC transactions will represent a major step in the implementation of Maghreb's stated strategy of acquiring significant assets in the fluorspar sector internationally. It will place the Company in a strategically powerful position from which to proactively further pursue its stated strategy and acquire additional interests in the international fluorspar industry.
The Company continues to pursue ways to advance its Tunisian Pb/Zn and fluorspar projects. Exploration activities are scheduled to restart next month on the Bou Jabeur Pb/Zn project and move to the Fej Lahdoum project later in the year.
Nicholas Davidoff
Chairman
31 March 2011
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
For the six months ended 31 December 2010
Un-audited 6 months ended 31 December 2010 | Un-audited 6 months ended 31 December 2009 | Audited 12 months ended 30 June 2010 | |||
£'000 | £'000 | £'000 | |||
Revenue | - | - | - | ||
Exploration expenses | (124) | (103) | (275) | ||
Gross loss | (124) | (103) | (275) | ||
Administrative expenses | (735) | (263) | (639) | ||
Operating loss | (859) | (366) | (914) | ||
Investment income | - | - | - | ||
Total loss for the period attributable to the equity holders of the parent | (859) | (366) | (914) | ||
Other comprehensive income | - | - | - | ||
Total comprehensive loss for the period attributable to the equity holders of the parent | (859) | (366) | (914) | ||
Earnings per share | |||||
Basic and diluted loss per share (pence) | (0.35) | (0.38) | (0.79) | ||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
As at 31 December 2010
Un-audited 31 December 2010 | Un-audited 31 December 2009 | Audited 30 June 2010 | |||
£'000 | £'000 | £'000 | |||
Non-current assets | |||||
Intangible assets | - | 82 | - | ||
Property, plant and equipment | 40 | 65 | 43 | ||
Investments | 776 | - | - | ||
816 | 147 | 43 | |||
Current assets | |||||
Trade and other receivables | 3,211 | 38 | 44 | ||
Cash and cash equivalents | 3,272 | 207 | 461 | ||
6,483 | 245 | 505 | |||
Current liabilities | |||||
Trade and other payables | (151) | (37) | (74) | ||
(151) | (37) | (74) | |||
Net current assets | 6,332 | 208 | 431 | ||
Net assets | 7,148 | 355 | 474 | ||
| |||||
Equity | |||||
Share capital | 2,721 | 666 | 1,079 | ||
Shares to be issued | 3,161 | - | - | ||
Share premium account Share option reserve | 10,122 97 | 7,021 117 | 7,441 48 | ||
Retained loss | (8,953) | (7,582) | (8,094) | ||
Total equity | 7,148 | 355 | 474 | ||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2010
| Ordinary share capital | Shares to be issued | Preference share capital | Share premium | Share Option Reserve | Retained earnings | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 30 June 2009 | 546 | - | - | 6,474 | 229 | (7,362) | (113) | |
Ordinary equity subscription | 120 | - | - | 180 | - | - | 300 | |
Preference share subscription | - | - | 133 | 367 | - | - | 500 | |
Total comprehensive loss for the period | - | - | - | - | - | (366) | (366) | |
Share based payments | - | - | - | - | 34 | - | 34 | |
Transfer from share option reserve | - | - | - | - | (146) | 146 | - | |
Balance at 31 December 2009 | 666 | - | 133 | 7,021 | 117 | (7,582) | 355 | |
Ordinary equity subscription | 280 | - | - | 420 | - | - | 700 | |
Conversion of preference shares in the period | 133 | - | (133) | - | - | - | - | |
Total comprehensive loss for the period | - | - | - | - | - | (548) | (548) | |
Share based payments | - | - | - | - | (33) | - | (33) | |
Transfer from share option reserve | - | - | - | - | (36) | 36 | - | |
Balance at 30 June 2010 | 1,079 | - | - | 7,441 | 48 | (8,094) | 474 | |
Total comprehensive loss for the period | - | - | - | - | - | (859) | (859) | |
Ordinary equity subscription | 1,642 | - | - | 2,681 | - | - | 4,323 | |
Shares to be issued | - | 3,161 | - | - | - | - | 3,161 | |
Share based payments | - | - | - | - | 49 | - | 49 | |
Balance at 31 December 2010 | 2,721 | 3,161 | - | 10,122 | 97 | (8,953) | 7,148 | |
CONSOLIDATED STATEMENT OF CASH FLOWS |
For the six months ended 31 December 2010
Un-audited 6 months ended 31 December 2010 | Un-audited 6 months ended 31 December 2009 | Audited 12 months ended 30 June 2010 | ||||
£'000 | £'000 | £'000 | ||||
Cash flows from operating activities | ||||||
Operating loss before interest and tax | (859) | (366) | (914) | |||
Add : Depreciation charges for the period Add : Share option charge for the period | 4 49 | 19 34 | 41 1 | |||
Add: Write-off of intangibles/investments | - | - | 82 | |||
Operating loss before working capital changes | (806) | (313) | (790) | |||
(Increase) in other trade and other receivables | (5) | (12) | (18) | |||
Increase / (Decrease) in trade and other payables | 77 | (5) | 32 | |||
Net cash flow from operating activities | (734) | (330) | (776) | |||
Cash flows from investing activities | ||||||
Purchases of plant and equipment | (1) | - | - | |||
Trade investments made | (776) | |||||
Interest income received | - | - | - | |||
Net cash from investing activities | (777) | - | - | |||
Cash flows from financing activities | ||||||
Proceeds of issue of share capital | 4,322 | 300 | 1,000 | |||
Net cash from financing activities | 4,322 | 300 | 1,000 | |||
Net increase / (decrease) in cash and cash equivalents | 2,811 | (30) | 224 | |||
Cash and cash equivalents at the beginning of the period | 461 | 237 | 237 | |||
Cash and cash equivalents at the end of the period | 3,272 | 207 | 461 | |||
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
1. Statement of Compliance
The consolidated interim financial information for the six months ended 31 December 2010 has been prepared using accounting policies consistent with International Financial Reporting Standards ("IFRS") as adopted by the European Union applied in accordance with the provisions of the Companies Act 2006 and in accordance with IAS 34, Interim Financial Reporting.
The results for the year ended 30 June 2010 have been audited whilst the results for the six months ended 31 December 2009 and 31 December 2010 are un-audited. The interim report is un-audited and does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The statutory accounts for the year ended 30 June 2010, which were prepared under IFRS, have been delivered to the Registrar of Companies.
The auditors' opinion on the statutory accounts for the year ended 30 June 2010 was unqualified and did not contain a statement made under s495 of the Companies Act 2006. However, it did contain an emphasis of matter paragraph in relation to the Group's ability to continue as a going concern. The auditors considered the adequacy of the disclosure made in the notes to those financial statements concerning the Group's ability to continue as a going concern. In the year ended 30 June 2010, the Group incurred a net loss of £914,000 and at that date the Group's net current assets were £431,000. As explained in the notes to the financial statements, for the year ended 30 June 2010, the Group was reliant on future funding from existing investors. This condition indicated the existence of a material uncertainty, which may cast significant doubt about the Group and the Company's ability to continue as going concerns. The financial statements did not include the adjustments that would result if the Group was unable to continue as a going concern.
However since that date and as disclosed in the interim report for the 6 months ended 31 December 2010, the Company has successfully raised £7.4 million of which £4.2 million was received in the 6 months ended 31 December 2010 and £3.2 million was received in January 2011.
Similarly the consolidated interim financial information for the six months ended 31 December 2010 do not include the adjustments that would result if the Group was unable to continue as a going concern. See note 2.
The principal risks and uncertainties for the next twelve months of the financial year are essentially the Group's and the Company's ability to continue as going concerns, the validity of which depends principally on the completion of the transactions to acquire Firebird's 66.9% shareholding in Sallies Ltd together with its holding of Sallies debentures as well as Firebird's 20% shareholding in Kenya Fluorspar Company Ltd together with its holding of 500,000 convertible debentures.
The completion of the transaction requires the approval of the Maghreb shareholders at an EGM called for that purpose. A circular explaining the details of the proposed Sallies and KFC acquisitions is currently being prepared by the Company in conjunction with its advisers and will be posted to the shareholders during the second quarter of 2011. The financial information in the interim report does not include the adjustments that would result if the Group was unable to continue as a going concern.
There is no material seasonality associated with the Group's activities.
2. Accounting Policies
The interim financial information has been prepared using accounting policies consistent with IFRS, as set out in the last annual report to 30 June 2010, except as described below:
The International Accounting Standards Board has issued a number of international financial reporting standards which are effective for future accounting periods of the Group. The Directors do not anticipate that the adoption of any of these would have a material impact on the financial statements.
3. Dividends
No dividends were paid or proposed in the 6 months ended 31 December 2010 (for year ended 30 June 2010 - £ NIL).
4. Operating Segments
The Group's operations are located in Tunisia and the United Kingdom. The Group's exploration activities are located in Tunisia, and its administration and management is based in the United Kingdom.
The segments presented in this note reflect the separate segments and companies within the Group and is how management information is presented to the Chief Operating Decision Maker.
Segment operating loss and loss for the period by geography are reconciled to entity operating loss and entity loss for the period as follows:
Segment Operating Loss
|
Loss For Period
| ||||||
Un-audited 6 months ended 31 December 2010 £'000 | Un-audited 6 months ended 31 December 2009 £'000 | Audited 12 months ended 30 June 2010 £'000 | Un-audited 6 months ended 31 December 2010 £'000 | Un-audited 6 months ended 31 December 2009 £'000 | Audited 12 months ended 30 June 2010 £'000 | ||
Tunisia | (181) | (194) | (258) | (181) | (194) | (258) | |
United Kingdom | (857) | (247) | (962) | (857) | (247) | (962) | |
Consolidation adjustment | 179 | 75 | 306 | 179 | 75 | 306 | |
Total Entity operating loss and entity loss | (859) | (366) | (914) | (859) | (366) | (914) | |
Segment Total Assets
| |||
Un-audited 6 months ended 31 December 2010 £'000 | Un-audited 6 months ended 31 December 2009 £'000 | Audited 12 months ended 30 June 2010 £'000 | |
Tunisia | 49 | 75 | 49 |
United Kingdom | 7,331 | 367 | 38 |
Unallocated | - | - | 461 |
Consolidation adjustment | (81) | (50) | - |
Group Assets | 7,299 | 392 | 548 |
In accordance with IFRS 8, Operating Segments, the information presented in this note is the same as that reported to the Chief Operating Decision Maker for the purposes of making decisions about allocating resources to the segment and assessing its performance.
There has been no alteration from the last annual financial statements in the basis of segmentation.
5. Taxation
No liability in respect of income tax has arisen during the period, as a result of trading losses in each of the Group companies. No deferred tax liability or asset has been recognised in the period.
The deferred tax asset has not been recognised in the accounts as there is not sufficient evidence that there will be taxable profits in the near future against which the deductible temporary differences can be utilised within the meaning of IAS 12.
6. Earnings per ordinary share (basic and diluted)
The calculation of the basic loss per share attributable to the ordinary equity holders of the parent has been calculated on the net loss after tax of £859,000 (2009 - £366,000) using the weighted average number of ordinary shares of 244,889,527 (2009 -96,033,981).
All share options in issue decrease the loss per share for the period, and as such are deemed anti-dilutive. Therefore the diluted loss per share is the same as the basic loss per share.
7. Ordinary Share Capital & Shares to be issued
During the period the Company issued 93,000,000 ordinary shares in September 2010 and 180,603,215 ordinary shares in December 2010. Following these issues the current called up allotted and fully paid ordinary shares of 0.6 pence each is set out in the table below:
Called up, allotted and fully paid Ordinary shares of 0.6 pence each | Share Capital 2010 Number | Shares to be issued | Nominal Value 2010 |
'000 | '000 | £'000 | |
Balance at 30 June 2010/30 June 2009 | 179,923 | - | 1,079 |
Shares issued during the period | 273,603 | - | 1,642 |
Shares to be issued | - | 180,603 | 1,084 |
Balance on 31 December 2010 | 453,526 | 180,603 | 3,805 |
In January 2011 an additional 180,603,215 new ordinary shares were issued of 0.6 pence, the issue of these shares were classified as shares to be issued at the 31 December 2010 due to the issue of these shares being contingent on the cash being received.
8. Share Option Reserve
Share Option Reserve | |||
Un-audited 6 months ended 31 December 2010 £'000 |
Un-audited 6 months ended 31 December 2009 £'000 |
Audited 12 months ended 30 June 2010 £'000 | |
Balance on 1 July 2010/2009 | 48 | 229 | 229 |
Share based payments - share option scheme | 54 | 34 | 34 |
Decrease for expired share options | - | - | (33) |
Reserve transfer for expired share options | (5) | (146) | (182) |
Balance at 31 December 2010/2009 | 97 | 117 | 48 |
The share option reserve arises as a result of the expense recognised in the income statement for the cost of share-based employee compensation arrangements. The decrease represents the amount previously charged to the Share Option Reserve Account and now no longer required due to options having lapsed either through the expiry of the exercise dates thereof or as a result of the employees leaving the Group.
9. Availability of report
Copies of this report are available from the Company's business address at Blackwell House, Guildhall Yard, London, EC2V 5AE.