TIDMSBLM
RNS Number : 2749L
Sable Mining Africa Limited
30 September 2016
Sable Mining Africa Ltd, the AIM listed company focused in the
mining sector in sub-Saharan Africa, announces its results for the
year ended 31 March 2016.
Chief Executive Officer's Statement
As announced in the circular to shareholders dated 14 September
2016 (the "Circular"), in recent months, the long term effects of
factors including political instability, public health emergencies,
the impact of the depressed bulk commodities markets,
unpredictability of legal systems together with unsubstantiated and
irresponsible allegations and adverse press speculation have caused
significant harm to the Company's long term prospects as a mineral
exploration and development business.
Against this background, the Board believes it is in the best
interest of the Company and Shareholders as a whole to seek the
cancellation of the AIM listing (the "Cancellation") at the
earliest opportunity for a variety of key factors, including:
-- the considerable cost, management time and the legal and
regulatory burden associated with maintaining the Company's
admission to trading on AIM which, in the Directors' opinion, are
disproportionate to the benefits to the Company at the present
time; and
-- as a consequence of the depressed market capitalization of
the Company, continuing admission to trading on AIM no longer
sufficiently provides the Company with the benefits typically
associated with public listings including providing access to
capital or enabling the Company's shares (the "Ordinary Shares") to
be used to effect acquisitions; and
- the bid-offer spread of the Company's share price is prohibitive in providing:
- a real introduction point for new investors; and
- a true and stable price.
Following Cancellation the Board intends to realise maximum
value from the Company's existing asset base. The Company has a
strong cash position and the potential to realise further value
from its existing asset base, which will enable the Board to invest
the Company's resources into a revenue generating project/asset
portfolio, with a geographic focus on southern and central
Africa.
The Board will consider a wide range of opportunities, but given
the prevailing market conditions it is not anticipated that the
Company will look to invest in or acquire any interest in mineral
exploration, extraction or development businesses or assets;
instead, at this stage in the world economic cycle the Board
believes that a strong focus on short-term revenue generation
investments will offer better value to shareholders than long-term,
capital intensive projects.
Following the Cancellation, the Company intends to consider
putting in place a "Matched Bargain Facility" to assist
Shareholders to trade in the Ordinary Shares. The Company will also
continue to communicate information about the Company (including
annual accounts) to its Shareholders such as annual and interim
financial reports, general announcements and updates. Such
information will be made available to shareholders via the
Company's website.
Full details of the proposed Cancellation are set out in the
Circular.
Operations Review
During the period under review the mining sector has experienced
an exceptionally turbulent time, and, despite spot prices having
recovered slightly over the past few months in both of our
commodities, continued price fluctuation is forecast to continue
over the mid- to long-term. The consequence of this is that
investment appetite for the development of iron ore and coal assets
remains muted.
Nimba Iron Ore Project ('Nimba')
Nimba was discovered by the Company's geologists in early 2012
and has been proven to be a high-grade, low-capital asset. Despite
a resurgence in the iron ore spot price during the first few months
of the year, many analysts forecast that long term supply/demand
fundamentals will result in pricing which will pivot at around
US$50 per tonne. At these pricing levels, the investment
environment for new iron ore development plays remains stagnant.
Accordingly, the Board has taken the decision to discuss
opportunities of disposing of some or all of the Company's interest
in Nimba. Any such transaction will only be contemplated if it
represents best value for shareholders as a whole and if
negotiations are successful, the Board anticipate that a
transaction would be concluded in the current financial year. As a
consequence of this background the Board have opted to impair this
asset. See Financial Review.
Lubu and Lubimbi Coal Projects ('Lubu' and 'Lubimbi')
The Lubu and Lubimbi coal projects are located in the highly
prospective Karro Mid Zambezi coal basin in the established Hwange
mining district in north-western Zimbabwe. Work completed at Lubu
has enabled the Company to model in-situ seam tonnage of 786Mt from
the initial blocks drilled, with potential for expansion to the
resource tonnage through additional drilling on further blocks.
Additional resource potential is also derived from Lubimbi, which
has suggested in-situ seam tonnage of 550 million tonnes.
Importantly, results from each of Lubu and Lubimbi have
demonstrated good quality and continuity, with shallow coal and
high calorific values across multiple seams.
In September 2015, a memorandum of understanding was signed with
CITIC Construction Co., Ltd, a subsidiary of CITIC Group, a Chinese
based construction and services provider with a view to developing
a 600MW coal-fired power plant at Lubu. Although this relationship
has not developed further due to changes in governmental policy
regarding the use of reconditioned power stations in Zimbabwe, the
Company continues to explore the opportunities for partnership with
similar groups so as to maximise complementary expertise to develop
a commercial coal-fired power station at Lubu, with the coal mine
at Lubu supplying the station.
The Company is currently evaluating opportunities to move
forward other development plans whilst also assessing additional
means through which to generate shareholder value from the
Company's coal assets.
Financial Review
Sable Mining is reporting for the year ended 31 March 2016 a pre
-tax loss on continuing activities of $3.1m (2015 : $10.6m) and a
total loss of $42.5m (2015 : $11.2m). The total loss was after
providing for $30.7m for the impairment of the Nimba Project
assets. As at 31 March 2016 cash balances were $3.0m (2015:
$6.2m)
Outlook
Shareholders will no doubt be aware of media speculation and
legal proceedings arising from a report published earlier this
year. As previously stated, the Company is investigating these
matters and taking appropriate legal advice. The Board would like
to reassure investors that protecting shareholder value remains
their absolute priority. The Company is looking to reach a
resolution of these matters as possible and will keep the market
appraised of developments.
Andrew Groves
Chief Executive Officer
30 September 2016
For further information please visit www.sablemining.com or
contact:
Andrew Groves Sable Mining Africa Tel: 020
Ltd 7408 9200
Ben Brewerton FTI Consulting Tel: 020
3727 1000
CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2016
Year ended Year ended
31 March 31 March
2016 2015
Note $'000 $'000
------------ ------------
Continuing Operations
Operating expenses (3,185) (5,390)
Impairment of plant (562) -
and equipment
Impairment of intangible
assets (265) (6,511)
Impairment of other
receivables - (70)
Operating loss (4,012) (11,971)
Other gains and losses 883 1,296
Finance income 23 58
Finance cost - -
Loss before taxation (3,106) (10,617)
Income tax expense - -
Loss for the year from
continuing operations (3,106) (10,617)
Discontinued Operations
(Loss) for the year
from discontinued operations (39,356) (631)
------------ ------------
Loss for the year (42,462) (11,248)
------------ ------------
Loss for the year attributable
to owners of the parent
company (42,084) (10,339)
Loss for the year attributable
to non-controlling interests (378) (909)
Loss for the year (42,462) (11,248)
------------ ------------
Loss per share
- Basic and diluted (3.8 cents) (1.0
cents)
Loss per share from
continuing operations
- Basic and diluted (0.3 cents) (0.9
cents)
Loss per share from
discontinued operations
- Basic and diluted (3.5 cents) (0.1 cents)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2016
2016 2015
$'000 $'000
---------- ---------------
Loss for the year (42,462) (11,248)
Items that may be subsequently
reclassified to profit or loss
Foreign exchange translation
differences (2,517) (1,184)
Other comprehensive income
for the year (2,517) (1,184)
Total comprehensive loss for
the year (44,979) (12,432)
========== ===============
Attributable to the owners
of the parent company (44,601) (11,523)
Attributable to non-controlling
interests (378) (909)
---------- ---------------
Total comprehensive loss for
the year (44,979) (12,432)
========== ===============
The notes on pages 18 to 49 form part of the financial
statements.
CONSOLIDATED BALANCE SHEET
As at 31 March 2016
2016 2015
Note $'000 $'000
---------- ----------
ASSETS
Non-current assets
Intangible assets - 29,910
Property, plant and
equipment 1,348 3,418
Loans and other receivables - -
----------
Total non-current
assets 1,348 33,328
---------- ----------
Current assets
Trade and other receivables 1,060 1,021
Cash and cash equivalents 3,043 6,249
----------
Total current assets 4,103 7,270
---------- ----------
Disposal group assets - 12,448
TOTAL ASSETS 5,451 53,046
---------- ----------
LIABILITIES
Non-current liabilities
Long-term borrowings - -
Deferred tax liability - -
---------- ----------
Total non-current - -
liabilities
---------- ----------
Current liabilities
Trade and other payables (1,430) (1,640)
Total current liabilities (1,430) (1,640)
---------- ----------
Disposal group liabilities - (11,379)
TOTAL LIABILITIES (1,430) (13,019)
---------- ----------
NET ASSETS 4,021 40,027
========== ==========
EQUITY
Issued capital 274,754 274,754
Share based payment
reserve 1,194 1,194
Warrant reserve - 7,462
Translation reserve (3,938) (10,391)
Retained earnings (268,433) (233,811)
---------- ----------
Total equity attributable
to the owners of
the parent company 3,577 39,208
Non-controlling interests 444 819
TOTAL EQUITY 4,021 40,027
---------- ----------
The notes on pages 18 to 49 form part of the financial
statements. The financial statements on pages 13 to 49 were
approved and authorised for issue by the Board of Directors on 30
September 2016 and were signed on its behalf.
Andrew Burns
Chief Financial Officer
30 September 2016
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the equity holders of
the parent
------------------------------------------------------------------------
Share Share-based Warrant Translation Retained Total Non-controlling Total
capital payment reserve reserve earnings $'000 interests $'000
$'000 reserve $'000 $'000 $'000 $'000
$'000
--------- ------------ --------- ------------- ---------- --------- ---------------- ---------
Balances at
01 April
2014 274,754 1,096 8,395 (9,207) (224,405) 50,633 1,728 52,361
Loss for the
year - - - - (10,339) (10,339) (909) (11,248)
Other
comprehensive
income
Exchange
translation
differences
on foreign
operations - - - (1,184) - (1,184) - (1,184)
Total
comprehensive
income for
the year - - - (1,184) (10,339) (11,523) (909) (12,432)
Transactions
with owners
Share issues -
cash
received - - - - - - - -
Share issues -
warrants
lapsed - - (933) - 933 - - -
Share based
payment
charge - 98 - - - 98 - 98
--------- ------------ --------- ------------- ---------- --------- ---------------- ---------
Total
transactions
with
owners - 98 (933) - 933 98 - 98
Balances at
31 March
2015 274,754 1,194 7,462 (10,391) (233,811) 39,208 819 40,027
Loss for the
year - - - - (42,084) (42,084) (378) (42,462)
Other
comprehensive
income
Exchange
translation
differences
on foreign
operations - - - (2,520) - (2,520) 3 (2,517)
--------- ------------ --------- ------------- ---------- --------- ---------------- ---------
Total
comprehensive
income for
the year - - - (2,520) (42,084) (44,604) (375) (44,979)
Transactions
with owners
Share issues -
warrants
lapsed - - (7,462) - 7,462 - - -
Share based
payment
charge - - - - - - - -
Exchange
translation
differences
on sale
of foreign
operations - - - 8,973 - 8,973 - 8,973
Total
transactions
with
owners - - (7,462) 8,973 7,462 8,973 - 8,973
Balance at 31
March
2016 274,754 1,194 - (3,938) (268,433) 3,577 444 4,021
--------- ------------ --------- ------------- ---------- --------- ---------------- ---------
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March 2016
2016 2015
$'000 $'000
-------- ---------
OPERATING ACTIVITIES
Loss before tax (3,106) (10,617)
Adjustments for:
- Depreciation of property,
plant and equipment 644 857
- Amortisation of intangible - -
assets
- Share based payment charge - 98
- Other gains (883) (1,296)
- (Gain)/loss on foreign exchange (341) 960
- Net interest income (23) (58)
- Write off of plant and equipment 562 -
- Impairment of intangible assets 265 6,511
- Impairment of other receivables - 70
Operating cash flow before movements
in working capital (2,882) (3,475)
Working capital adjustments:
- Decrease in inventories - -
- Increase in receivables (39) (1,573)
- Decrease in payables (210) (1,900)
Net cash used in continuing
operating activity (3,131) (6,948)
Net cash used in discontinued
operating activity (1,798) (6,540)
-------- ---------
Net cash used in operating activities (4,929) (13,488)
-------- ---------
INVESTING ACTIVITIES
Purchase of intangible assets
arising from exploration and
evaluation of mineral resources (178) (118)
Purchase of property, plant
and equipment (47) (7)
Proceeds from disposal of property,
plant and equipment 70 3
Proceeds from sale of subsidiaries 1,975 -
Net cash used in investing in
continuing activities 1,820 (122)
Net cash used in investing activities 1,820 (122)
-------- ---------
Proceeds from issue of share - -
capital
Share issue costs - -
Net decrease in cash and cash
equivalents (3,109) (13,610)
Cash and cash equivalents at
start of the year 6,249 20,075
Effect of foreign exchange rate
changes (97) (216)
Cash and cash equivalents at
end of the year 3,043 6,249
======== =========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2016
1. General information
Sable Mining Africa Limited is incorporated and domiciled in the
British Virgin Islands under the British Virgin Islands Business
Companies Act 2004. The nature of the Group's operations and its
principal activities are set out in the Chief Executive Officers
Statement.
These financial statements have been presented in US Dollars
because this is the currency of the primary economic environment in
which the Group operates.
The financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union ("EU").
The non statutory financial statements for the year ended 31
March 2016 have been reported on by Sable Mining's auditors and
contain an unqualified opinion (31 March 2015: unqualified
opinion).
The full audit report is contained in the Company's Annual
Report, which will be available on the Company's website from 30
September 2015.
The financial information contained in this document does not
constitute statutory financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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