27 Jan 2009 07:00
27 January 2009
West African Diamonds
Interim Results for the Six Months Ended 31 October 2008
West African Diamonds ('WAD'), the diamond and gold producing, exploration and development company today announces its interim results for the six months ended 31 October 2008.
Highlights:
Significant progress at Bomboko: Alluvial diamond mine development, upstream from the Aredor Diamond Mine, Guinea coming on stream March 2009
Advanced exploration work continues on the Droujba kimberlite pipes in Guinea and Pipe 3 in Sierra Leone
Follow-up sampling of the highly anomalous gold samples from the Nimini Hills Greenstone Belt in Sierra Leone nearing completion
Early stage JV discussions on certain properties in Sierra Leone
Discussions underway which could lead to a substantial change in the Company in West Africa
John Teeling, Chairman of West African Diamonds commented;
"We do not underestimate the difficult environment currently facing all natural resources companies, but we have a long history of being able to work to very tight budgets.
Diamonds are not dead. A diamond is not only an economic purchase. We believe that the current hiatus in sales and prices will pass and the fundamental shortage in diamond supply will once again fuel demand and prices."
Enquiries:
| West African Diamonds | |
| John Teeling, Chairman | + 353 1 833 2833 |
| James Campbell, Deputy Chairman | +27 83 457 3724
|
| Blue Oar Nick Lovering Toby Gibbs | +44 (0)20 7448 4400 |
| College Hill Paddy Blewer Nick Elwes | +44 (0) 20 7457 2020 |
www.westafdiamonds.com
Chairman's Statement
West African Diamonds continues to make progress on projects in Guinea and Sierra Leone.
In Guinea, the Bomboko alluvial diamond mine is on target to begin production in the coming months. All equipment is on site and being assembled. The Bomboko Project spans nine alluvial diamond licenses adjacent to Guinea's only diamond mine, Aredor. A 6,000 tpm operation is currently being brought on stream and an expansion to 18,000 tpm is already in the pipeline. The technology used is tried and tested and where possible, quality second hand equipment has been used.
Following the successful detailed ground geophysical survey over the Droujba cluster of kimberlite intrusives, a bulk sampling programme is in the advanced planning stage. A mobile 5 tph Dense Media Separator (DMS) plant has been moved to site and camp infrastructure has been developed. To supplement the bulk sampling programme, stab drilling will take place over the adjacent geophysical exploration targets to determine whether these are kimberlitic or not.
Most of the equipment on site at Bomboko came from the closed Plant 11 tailings project in Sierra Leone. Offers are on hand for the remaining equipment, mainly gold processing machinery.
Earlier work in the Kono area of Sierra Leone mapped 14km of kimberlite dykes and produced a grade of almost 20 carats per hundred tonnes of $200 plus a carat diamonds in the small Pipe 3 kimberlite. There are some very early stage expressions of interest in development possibilities for these properties. In the meantime, a programme of outline drilling is planned.
In prospecting for diamonds on our Nimini Hills concession, we found gold traces. Follow up sampling confirmed these indications. We are currently undertaking an extensive regional sampling exercise. Initial indications are positive.
For some months, we have been in discussions with parties interested in acquiring West African Diamonds or merging with our Company. Discussions with one party have gone a long way, but no definite conclusion has been reached.
The current investment climate is very difficult. Fear has replaced greed. Just as the boom saw exaggerated assumptions, so the bust sees unduly pessimistic beliefs. However, diamonds are not dead. A diamond is not only an economic purchase. The current hiatus in sales and prices will pass and the fundamental shortage in diamond supply will once again fuel demand and prices.
John Teeling
Chairman
27 January 2009
| West African Diamonds plc | |||||||||
| Financial Information (Unaudited) | |||||||||
| Six Months Ended | Year Ended | ||||||||
| Condensed Consolidated Income Statement | 31 Oct 08 | 31 Oct 07 | 30 April 08 | ||||||
| unaudited | unaudited | Audited | |||||||
| £'000 | £'000 | £'000 | |||||||
| Revenue | 27 | 0 | 0 | ||||||
| Cost of Sales | (27) | 0 | 0 | ||||||
| Gross Profit | 0 | 0 | 0 | ||||||
| Administrative Costs | (113) | (146) | (228) | ||||||
| Operating Loss | (113) | (146) | (228) | ||||||
| Interest Receivable | 0 | 7 | 10 | ||||||
| Interest Payable | (11) | 0 | (2) | ||||||
| Loss before taxation | (124) | (139) | (220) | ||||||
| Taxation | 0 | 0 | 0 | ||||||
| Loss for the period | (124) | (139) | (220) | ||||||
| Loss per share | (0.30p) | (0.39p) | (0.58p) | ||||||
| Condensed Consolidated Balance Sheet | 31 Oct 08 | 31 Oct 07 | 30 April 08 | ||||||
| unaudited | unaudited | audited | |||||||
| £'000 | £'000 | £'000 | |||||||
| Assets | |||||||||
| Intangible Assets | 7,158 | 5,988 | 6,609 | ||||||
| Property, Plant & Equipment | 1,314 | 1,070 | 1,293 | ||||||
| 8,472 | 7,058 | 7,902 | |||||||
| Current Assets | |||||||||
| Receivables and prepayments | 14 | 47 | 23 | ||||||
| Cash and cash equivalents | 1,578 | 731 | 79 | ||||||
|
| 1,592 | 778 | 102 | ||||||
| Total Assets | 10,064 | 7,836 | 8,004 | ||||||
| Liabilities | |||||||||
| Current Liabilities | |||||||||
| Trade and other payables | (775) | (211) | (324) | ||||||
| Net Current (Liabilities)/Assets | 817 | 567 | (222) | ||||||
| Net Assets | 9,289 | 7,625 | 7,680 | ||||||
| Equity | |||||||||
| Share Capital and Reserves | 9,289 | 7,625 | 7,680 | ||||||
| Total Equity | 9,289 | 7,625 | 7,680 | ||||||
| Condensed Consolidated Statement of Changes in Shareholders Equity | |||||||||
| Share based | |||||||||
| Share | Share | Payment | Retained | Total | |||||
| Capital | Premium | Reserves | Losses | Equity | |||||
| £'000 | £'000 | £'000 | £'000 | £'000 | |||||
| As at 1 May 2007 | 335 | 6,316 | 385 | (692) | 6,344 | ||||
| Share based payments | 20 | 20 | |||||||
| Shares issued | 66 | 1,347 | 1,413 | ||||||
| Share issue expenses | (13) | (13) | |||||||
| Loss for the period | (139) | (139) | |||||||
| As at 31 October 2007 | 401 | 7,650 | 405 | (831) | 7,625 | ||||
| Issue of shares under share | |||||||||
| based payment plan | (61) | 61 | 0 | ||||||
| Share based payments | 12 | 12 | |||||||
| Shares issued | 6 | 158 | 164 | ||||||
| Share issue expenses | (40) | (40) | |||||||
| Loss for the period | (81) | (81) | |||||||
| As at 30 April 2008 | 407 | 7,768 | 356 | (851) | 7,680 | ||||
| Shares issued | 174 | 174 | |||||||
| Share premium on shares issued | 1,566 | 1,566 | |||||||
| Share issue expenses | (7) | (7) | |||||||
| Loss for the period | (124) | (124) | |||||||
| As at 31 October 2008 | 581 | 9,327 | 356 | (975) | 9,289 | ||||
| Six Months Ended | Year Ended | ||||||||
| Condensed Consolidated Cash Flow | 31 Oct 08 | 31 Oct 07 | 30 April 08 | ||||||
| unaudited | unaudited | audited | |||||||
| £'000 | £'000 | £'000 | |||||||
| Cash flows from operating activities | |||||||||
| Operating Loss | (113) | (146) | (228) | ||||||
| Share based Payments | 0 | 0 | 11 | ||||||
| Movements in Working Capital | 460 | 278 | 394 | ||||||
| Exchange Movements | (16) | 5 | (1) | ||||||
| Net Cash Inflow from Operating Activities | 331 | 137 | 176 | ||||||
| Cash Flow from Investing Activities | |||||||||
| Returns on Investments and Servicing of Finance | (11) | 7 | 8 | ||||||
| Capital Expenditure | (570) | (1,358) | (2,181) | ||||||
| Net Cash used in Investing Activities | (581) | (1,351) | (2,173) | ||||||
| Cash Flow from Financing Activities | |||||||||
| Issue of Ordinary Share Capital | 1,733 | 1,400 | 1,525 | ||||||
| Net Increase/(Decrease) in Cash and Cash Equivalents | 1,483 | 186 | (472) | ||||||
| Cash and Cash Equivalents at beginning of the period | 79 | 550 | 550 | ||||||
| Effect of foreign rate changes on cash held | 16 | (5) | 1 | ||||||
| Cash and Cash Equivalents at end of the period | 1,578 | 731 | 79 | ||||||
Notes:
1. Information
The financial information for the six months ended October 31st, 2008 and October 31st, 2007 is unaudited. The financial information above does not constitute full statutory accounts within the meaning of section 240 of the Companies Act 1985.
The interim financial report has been prepared in accordance with IAS 34 Interim Financial Reporting and the accounting policies and methods of computation used in the interim financial statements are consistent with those used in the Group 2008 Annual Report, which is available at www.westafdiamonds.com.
The interim financial statements have not been audited or reviewed by the auditors of the Group pursuant to the Auditing Practices board guidance on Review of Interim Financial Information.
2. No dividend is proposed in respect of the period.
3. Earnings per share
Basic earnings per share is computed by dividing the profit or loss after taxation for the year available to ordinary shareholders by the sum of the weighted average number of ordinary shares in issue and ranking for dividend during the year.
Diluted earnings per share is computed by dividing the profit or loss after taxation for the year by the weighted average number of ordinary shares is issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the year.
The following table sets forth the computation for basic and diluted earnings per share (EPS):
| 31 Oct 08 | 31 Oct 07 | 30 Apr 08 | |
| £ | £ | £ | |
| Numerator | |||
| For basic and diluted EPS retained profit | (124,026) | (139,283) | (220,066) |
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| Denominator | |||
| For basic and diluted EPS | 41,110,099 | 35,943,625 | 38,102,064 |
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|
| |
| Basic and diluted EPS | (0.30p) | (0.39p) | (0.58p) |
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4. Intangible Assets
| | 31 Oct 08 | 31 Oct 07 | 30 Apr 08 |
| Exploration and evaluation assets: | £’000 | £’000 | £’000 |
| Cost | | | |
| Opening balance | 6,609 | 5,061 | 5,061 |
| Additions | 549 | 927 | 1,548 |
| | _________ | _________ | _________ |
| Closing balance | 7,158 | 5,988 | 6,609 |
| | | | |
Exploration and evaluation assets relate to prospecting, exploration and related expenditure in Guinea and Sierra Leone.
The group's activities are subject to a number of significant potential risks including:
- Price fluctuations
- Uncertainties over development and operational costs
- Operational and environmental risks
- Political and legal risks, including arrangements with governments for licences, profit sharing and taxation
- Funding developments
The realisation of these intangible assets is dependent on the successful discovery and development of economic reserves, including the ability to raise finance to develop future projects. Should this prove unsuccessful the value included in the balance sheet will be written off to the profit and loss account.
The directors are aware that by its nature there is an inherent uncertainty in such exploration and evaluation expenditure as to the value of the asset. Having reviewed the exploration and evaluation assets at 31 October 2008, the directors are satisfied that the value of the intangible asset is not less than net book value.
5. Property, Plant & Equipment
| Plant & Equipment | Assets in the course of construction Diamond Interests | Total | |
| £'000 | £'000 | £'000 | |
| Cost | |||
| At 1 May 2007 | 26 | 613 | 639 |
| Additions | 13 | 418 | 431 |
| _________ | _________ | _________ | |
| At 31 October 2007 | 39 | 1,031 | 1,070 |
| Additions | - | 223 | 223 |
| _________ | _________ | _________ | |
| At 30 April 2008 | 39 | 1,254 | 1,293 |
| Additions | 16 | 5 | 21 |
| _________ | _________ | _________ | |
| At 31 October 2008 | 55 | 1,259 | 1,314 |
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Property, Plant and Equipment relates to assets in the course of construction in Guinea and Sierra Leone. The carrying value of the above assets is dependent on the successful discovery and development of economic reserves, including the ability to raise finance to develop future projects. Should this prove unsuccessful the value included in the balance sheet will be written off to the profit and loss account. In the opinion of the directors, the carrying value is not less than net book value. No depreciation has been charged in respect of these assets as they are not in a condition necessary for them to be capable of operating in the manner intended by management.
6. The Interim Report for the six months to October 31st, 2008 was approved by the Directors on 27 January 2009.
7. Copies of this announcement will be sent to shareholders and will be available for inspection at the Companies Registered Office at 20-22 Bedford Row, London WC1R 4JS. The Interim Report may also be viewed at West African Diamonds plc's website at www.westafdiamonds.com.