Sable Mining Africa Regulatory News (SBLM)

 Sable Mining Africa Ltd/ Index: AIM / Epic: SBLM / Sector: General Financial

23 December 2010

Sable Mining Africa Ltd ('Sable' or 'the Company')

Interim Results

Sable Mining Africa Ltd, the AIM listed company focussed in the mining sector in sub-Saharan Africa, announces its results for the six months ended 30 September 2010.

Chairman's Statement

This has been a very busy six months during which we have focussed on building value through the acquisition of resource assets primarily centred on coal and iron ore in sub-Saharan Africa. We now have exposure to highly prospective iron ore interests in world class mineral districts in Liberia, South Africa and Guinea, as well as metallurgical and thermal coal assets in Zimbabwe, Botswana and South Africa. Our focus is on rapid growth and as such, we have initiated development programmes across the portfolio to prove up resource numbers and advance the assets up the value curve towards production. Additionally, we remain active in evaluating further projects primarily in west and southern Africa to create value for investors.

Iron Ore Assets

Our iron ore portfolio now consists of three projects: a 51% interest in the 477 sq km Bopolu (MRL 13002) and the 486 sq km Timbo (MRL 13001) iron ore reconnaissance licences in Liberia; a 1,107 sq km iron ore prospecting licence covering three permits in the highly prospective Kissidougou area of south east Guinea; and 61% of the Gulukwane iron ore project ('Gulukwane'), which comprises approximately 25,000 hectares in the Thabazimbi area in the Limpopo Province of South Africa. 

In Liberia, New Resolution Geophysics is conducting geophysical work in the form of a combination of detailed aeromagnetic and radiometric surveys on both Bopolu and Timbo. As soon as the geophysical surveys are completed and the reconnaissance licences transferred to exploration licences, the Group intends to commence an intensive geological drilling programme.

In Guinea, our permits are located between Bellzone Mining plc's multi-billion tonne Kalia Project and Rio Tinto's world class Simandou Iron Ore Project, the latter of which is expected to commence production in 2013. Preliminary work has included high level aeromagnetic surveys and spectrometry, the results of which are expected in Q1 2011.

Drilling at Gulukwane has commenced with a 12 hole reverse circulation ('RC') drilling programme, aimed at confirming the presence of haematite and to determine initial grades.

Coal Assets

Our interest in Delta Mining Consolidated Limited ('DMC'), provides exposure to four major coal interests in South Africa, including the flagship Rietkuil Coal Project ('Rietkuil'), the 9,548 hectare Limpopo Coal Project and 12 greenfield concession blocks covering 8,682 sq km and straddling known coal bearing sediments in eastern Botswana. The Bankable Feasibility Study ('BFS') for Rietkuil, which has a SAMREC compliant gross in-situ metallurgical and thermal coal resource estimate of 199.9 million tonnes, of which 145.6 million tonnes is in the Measured category and 54.3 million tonnes in the Indicated category, is being finalised. This is based on the feasibility study finalised by DMC in September 2009, which was completed to a +20% -20% accuracy for a 3 million tonne per annum Run of Mine operation.

In Botswana, work has focussed on the 628 sq km Dukwe Coal Project ('Dukwe'), one of six prospecting licence areas covering 4,625 sq km in north eastern Botswana. Ten boreholes have been completed on the property and the carbonaceous sequence has been intersected, with thickness varying from 11m to 60m. Approximately 200 samples have already been submitted to Witlab (pty) Ltd, a leading coal analytics service provider in South Africa, for analysis. The results and their interpretation will form the basis for the creation of a regional geological model and will determine the ongoing exploration work. 

In Zimbabwe, Sable controls the Lubu Coal Concession ('Lubu') which covers 19,236 hectares of the highly prospective Karro Mid-Zambezi coal basin in the established Hwange (Wankie) mining district in North Eastern Zimbabwe. A 36 hole first phase drilling programme has been completed by drilling contractor African Mining and Exploration plc and the drill cores are currently being analysed. We expect to receive the results in Q1 2011, at which point we plan to immediately commence the second phase of drilling. It has been estimated by the Company's independent consultants Behre Dolbear & Company that, with further exploration and drilling, there is the potential to increase the coal resource at Lubu from 334 to 515 million tonnes. 

Corporate Review

In August we strengthened the Board through the appointment of Andrew Burns as Finance Director and Jeremy Sanford as Executive Director, both of whom bring to Sable significant experience and expertise of developing resource companies in Africa. 

Financial Review

Sable is reporting for the six months ended 30 September 2010 a pre-tax loss on continuing activities of US$3.7 million (2009: profit on continuing activities of US$1.3 million) and a loss from continuing and discontinued activities of US$3.7 million (2009: US$47.7 million). Following the fundraising in April 2010 of US$125m, the Group has a strong treasury and as at 30 September cash balances were $132.2 million (2009: $12 million).

Outlook

These are exciting times for Sable. We have assembled a portfolio of highly prospective projects and have defined development plans in place to advance our assets up the value curve. With this in mind we potentially have a highly active news pipeline in conjunction with our intensive drilling programmes across our portfolio. We are also examining additional opportunities that we believe will add further value, in particular iron ore and manganese in west Africa and coal in southern Africa, updates on which we hope to provide in the near future. With a strong treasury of US$132.2 million in cash, and the contact base needed to succeed, I believe Sable is well on its way to achieving its objectives of building a substantial African based resource company.

It remains for me to thank the whole Sable team for their tremendous efforts during the past six months, as well as our shareholders, both old and new, for their continued support. 

Phil Edmonds

Chairman

22 December 2010

** ENDS **

For further information please visit www.sablemining.com or contact:

Condensed Consolidated Income Statement

For the six month period ended 30 September 2010

Condensed Consolidated Statement of Comprehensive Income

For the six month period ended 30 September 2010

Condensed Consolidated Balance Sheet

As at 30 September 2010

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statement of Cash Flows

For the six months to 30 September 2010

Notes to the Unaudited Interim Consolidated Financial Statements

Sable Mining Africa Limited is incorporated in the British Virgin Islands under the British Virgin Islands Business Companies Act 2004. The address of the registered office is Romasco Place, Wickhams Cay 1, PO Box 3140, Road Town, Tortola, British Virgin Islands. The Company was incorporated on 27 April 2007. 

The Company is listed on the AIM Market of London Stock Exchange plc.

The unaudited interim consolidated financial statements for the six months ended 30 September 2010 were approved for issue by the board on 22 December 2010.

The figures for the six months ended 30 September 2010 and 30 September 2009 are unaudited and do not constitute full accounts. The comparative figures for the period ended 31 March 2010 are extracts from the annual report and do not constitute statutory accounts.

The interim consolidated financial statements have been prepared in US Dollars as this is the currency of the primary economic environment in which the Group operates.

The basis of preparation and accounting policies set out in the Annual Report and Accounts for the year ended 31 March 2010 have been applied in the preparation of these interim condensed consolidated financial statements. These are in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRSs") as adopted by the European Union ("EU") and with those of the Standing Interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") of the International Accounting Standards Board ("IASB"). References to "IFRS" hereafter should be construed as references to IFRSs as adopted by the EU

The accounting policies and methods of calculation adopted are consistent with those of the financial statements for the year ended 31 March 2010.

The calculation of basic and diluted loss per share is based on the following data:

Due to the loss incurred in the current period, there is no dilutive effect of share options.

On incorporation on 27 April 2007, the company had an authorised share capital of 500,000,000 ordinary shares of no par value.

Between incorporation and 18 February 2008 20,000,000 ordinary shares were issued for nil consideration to Ely Place Nominees Limited to be held in trust to be allocated at the discretion of the Board as incentives to employees or in connection with future transactions by the Company. These shares were still all held at 30 September 2010.

Between 21 February 2008 and 12 August 2008, a further 58,425,600 ordinary shares were issued fully paid for cash at a price of 12.5 pence per ordinary share constituting the pre IPO funding round.

On 21 July 2008 at an extraordinary general meeting the authorised share capital was increased to 1,000,000,000 ordinary shares of no par value.

On 12 August 2008, 185,180,000 ordinary shares were issued fully paid in consideration for the acquisition of 94% of the issued share capital of Procana Limitada.

On 1 September 2008, 68,825,600 ordinary shares were issued fully paid for cash at 12.5 pence per ordinary share.

On 15 December 2009, 270,000,000 ordinary shares were issued fully paid for cash at 10 pence per ordinary share.

On 22 January 2010, 25,334,822 ordinary shares were issued fully paid for cash at 11 pence per ordinary share.

On 16 April 2010, 299,707,452 ordinary shares were issued fully paid for cash at 28 pence per ordinary share.

The Company has one class of ordinary share which carries no right to fixed income.

On 4 October 2010, the Company entered into heads of agreement through its wholly owned subsidiary, African Iron Ore Investment Limited ("AIOL") to acquire 61% of each of two companies which together hold the prospecting rights for the Gulukwane iron ore project ("Gulukwane"). The heads of agreement are conditional upon AIOL completing to its satisfaction legal and financial due diligence on the companies owning Gulukwane and upon it being confirmed that substantial iron ore resources exist at Gulukwane. An exploration plan has been implemented starting with a ground magnetic and gravity survey. Once all the magnetic interpretations are complete AIOL intends to implement a twelve hole drilling programme, to determine whether it wishes to proceed with the acquisition.

On 26 October 2010 the Company acquired a 51% interest in Southern Cross Investments Limited, a company which holds the 477 sq km Bopolu and the 486 sq km Timbo iron ore reconnaissance licences in Liberia, for a cash consideration of $1,500,000.

On 16 November 2010, the Company acquired the total issued share capital of Guinea Development Mineral Resources SA ("GDMR") for a cash consideration of $6,000,000. GDMR owns a 1,107 sq km iron ore prospecting licence, covering three permits in the highly prospective Kissidougou area of south east Guinea.