African Consolidated Resources Plc ('African Consolidated' or the 'Company')
Final Results
African Consolidated is pleased to announce its final results for the year ended 29 February 2008.
The Company's Annual Report is available for download from the Company's website www.acrplc.com. Copies will be distributed to shareholders shortly.
Chief Executive Officer's report
Considerable progress has been made with our on-going exploration since the publication of our interim report in November. I will not dwell on this in any detail in this report however in view of our recent technical 'Exploration Update' which was published on 8 April 2008 and is available to download from the Investor Relations section of our website (www.acrplc.com).
ZIMBABWE
General
Politics continues to be the overriding factor affecting the perception of Zimbabwe particularly following the recent events associated with the Parliamentary and Presidential elections. We have no control over this factor and it is a reality we have lived with to date. As always I will point out that we work with the Government of the day.
The lead-up to the elections, while initially quiet, created some unrest and violent activity in parts of Zimbabwe although our latest information is that this is subsiding in most areas. These problems had the effect of disrupting some of our operations particularly in the north of the country where we suspended exploration and infrastructural work in the interests of employee and contractor safety as well as the security of company assets. We have now reviewed the situation on the ground and I am pleased to say that as of this week we now feel secure to return to all areas.
More specifically the problems created a delay in the road-development work taking place at the Snakes Head PGE project which was being prepared for the development of a sample-gathering decline adit for metallurgy testing purposes. Likewise, considering its proximity, sampling work at the Horseshoe nickel laterite project was postponed. We are now returning to site.
In Chakari, electromagnetic survey of the Perseverance Nickel project was suspended for 10 days in early May. It was possible to re-commence work for several weeks but work was suspended again until very recently. Geochemical sampling for gold and base metals in southern Zimbabwe near Zaka was also postponed.
The hyper-inflationary environment presents difficulties and the company is making every effort to minimise the negative effects thereof on the company and its staff. However the bulk of the Company's expenditure is incurred by reference to Sterling, United States dollars or other hard currencies. Therefore the on-going inflation-driven devaluation of the Zimbabwe dollar has only a modest effect on the Sterling budget of ACR and the risk is being satisfactorily managed by our financial department.
I commend all our staff and management for their stoically successful effort to retain the highest possible degree of normality and morale in trying circumstances.
We continue to support the local communities in which we work in terms of infrastructural development and practical assistance.
Exploration
As noted above an 'Exploration Update' was published in April. Since then reverse circulation ("RC") drilling has commenced and continues at the Blue Rock gold prospect while rotary air blast ("RAB") exploration drilling continues elsewhere on the Gadzema gold belt.
In-fill electromagnetic survey over the five already-defined conductors at Perseverance should be complete within two to four weeks. Post interpretation, these results will enable final drill-target definition for the exploratory intersection of these conductors and we hope to commence diamond-core drilling in late July. Negotiations for the contracting of a suitable drill-rig are under way. Detailed, closely-spaced airborne magnetic survey lines will most likely be flown over the Perseverance region in a July/August timeframe. This will provide additional data for further target definition.
Discussions continue on the resumption of activities in the Marange diamond field and I remain hopeful of an outcome that satisfies both national and corporate interests. The related legal dispute over claim ownership still awaits a court hearing date.
Throughput at both in-house and independent assay / sorting labs has improved and we are processing some 5,000 samples per month. In addition, we have increased our sampling teams and hence are constantly looking for ways to improve throughput even further.
ZAMBIA & MOZAMBIQUE
It remains the Company's philosophy to ameliorate political risk by being active in other regional countries.
Progress has been made on the application for significant exploration ground in Zambia and ACR is hopeful of a successful outcome on several of these applications. Legalities for formation in Mozambique are nearing finality and the company anticipates imminent discussions with the Mozambique Government at a high level.
First-pass evaluation is complete over large tracts of ground in both countries, much of which is unallocated or due for relinquishment in the not too distant future. This is very much a work-in-progress which I expect will gather momentum in the second half of the year.
GENERAL
The Company's cash resources remain adequate at current spend rates especially since our exploration expenditure is discretionary. However, should the political situation allow and the Board elects to commence further drilling programmes, we would expect to need to raise further funds before the end of 2008.
We hope for a sustainable and equitable solution to the current political impasse in Zimbabwe.
Andrew N. Cranswick
CEO
Consolidated income statement
for the year ended 29 February 2008
|
|
Notes |
2008
Group
£ |
|
2007
Group
£ |
|
Revenue |
|
- |
|
- |
|
Administrative expenses |
|
(1,152,861) |
|
(1,809,334) |
|
Operating loss |
|
(1,152,861) |
|
(1,809,334) |
|
Finance income |
|
160,813 |
|
102,077 |
|
Loss before and after taxation |
|
(992,048) |
|
(1,707,257) |
|
Loss attributable to the equity holders of the parent company |
|
(992,048) |
|
(1,707,257) |
|
Loss per share - basic and diluted |
2 |
(0.48) pence |
|
(0.96) pence |
All amounts above relate to continuing operations.
Group Statement of Changes in Equity
for the year ended 29 February 2008
|
Group |
Share capital account |
Share premium account |
Share option reserve |
Available for sale reserve |
Retained earnings/
(losses) |
Total
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
At 28 February 2006 |
1,456,270 |
2,442,790 |
53,000 |
- |
(340,719) |
3,611,341 |
|
Available for sale investments
- valuation losses |
- |
- |
- |
(10,866) |
- |
(10,866) |
|
Net income recognised directly in equity |
- |
- |
- |
(10,866) |
- |
(10,866) |
|
Loss for the year |
- |
- |
- |
- |
(1,707,257) |
(1,707,257) |
|
Total recognised income and expense for the year |
- |
- |
- |
(10,866) |
(1,707,257) |
(1,718,123) |
|
Share options |
- |
- |
434,194 |
- |
- |
434,194 |
|
Issue of share capital
(net of issue costs of £336,831) |
443,671 |
3,991,863 |
- |
- |
- |
4,435,534 |
|
At 28 February 2007 |
1,899,941 |
6,434,653 |
487,194 |
(10,866) |
(2,047,976) |
6,762,946 |
|
Available for sale investments
- valuation gain |
- |
- |
- |
16,157 |
- |
16,157 |
|
Net income recognised directly in equity |
- |
- |
- |
16,157 |
- |
16,157 |
|
Loss for the year |
- |
- |
- |
- |
(992,048) |
(992,048) |
|
Total recognised income and expense for the year |
|
|
|
16,157 |
(992,048) |
(975,891) |
|
Share options |
- |
- |
244,458 |
- |
- |
244,458 |
|
Issue of share capital
(net of issue costs of £135,000) |
310,345 |
4,054,655 |
- |
- |
- |
4,365,000 |
|
At 29 February 2008 |
2,210,286 |
10,489,308 |
731,652 |
5,291 |
(3,040,024) |
10,396,513 |
Group balance sheet
As at 29 February 2008
|
|
Note |
29 February 2008
Group
£ |
28 February 2007
Group
£ |
|
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Available for sale investments
Investment in subsidiaries |
3
|
5,841,604
403,419
34,655
- |
4,962,150
372,749
6,606
- |
|
|
|
6,279,678 |
5,341,505 |
|
Current assets
Inventory
Receivables
Available for sale investments
Cash and cash equivalents |
|
25,499
162,945
37,038
4,142,105 |
32,608
84,632
20,891
1,514,548 |
|
Total current assets |
|
4,367,587 |
1,652,679 |
|
Total Assets |
|
10,647,265 |
6,994,184 |
|
|
|
|
|
|
Equity and Liabilities
Capital and reserves attributable to equity holders of the company
Called-up share capital
Share premium account
Available for sale reserve
Share option reserve
Retained earnings |
4
4
|
2,210,286
10,489,308
5,291
731,652
(3,040,024) |
1,899,941
6,434,653
(10,866)
487,194
(2,047,976) |
|
Total equity |
|
10,396,513 |
6,762,946 |
|
Current liabilities
Trade and other payables |
|
250,752 |
231,238 |
|
Total current liabilities |
|
250,752 |
231,238 |
|
Total Equity and Liabilities |
|
10,647,265 |
6,994,184 |
Group cash flow statement
for the year ended 29 February 2008
|
|
2008
Group
£ |
2007
Group
£ | |
|
CASH FLOW FROM OPERATING ACTIVITES |
|
| |
|
Loss for the year |
(992,048) |
(1,707,257) | |
|
Adjustments for: |
|
| |
|
|
Depreciation |
116,861 |
59,910 |
|
|
Write-off of deferred expenditure/intangible assets |
31,984 |
- |
|
|
Finance income |
(160,813) |
(102,077) |
|
|
Profit on sale of available for sale investments |
2,186 |
(38,607) |
|
|
Profit on sale of property, plant and equipment |
(353) |
- |
|
|
Share option charges |
244,458 |
409,461 |
|
|
234,323 |
328,687 | |
|
Changes in working capital: |
|
| |
|
|
Increase in receivables |
(78,313) |
(30,647) |
|
|
Decrease in inventories |
7,109 |
18,167 |
|
|
Increase/(Decrease) in payables |
19,514 |
(752,207) |
|
|
(51,690) |
(764,687) | |
|
Cash generated from operations |
(809,415) |
(2,143,257) | |
|
Investing activities: |
|
| |
|
|
Payments to acquire intangible assets |
(911,438) |
(2,632,939) |
|
|
Payments to acquire property, plant and equipment |
(152,248) |
(305,279) |
|
|
Payments to acquire available for sale investments |
(59,432) |
(120,000) |
|
|
Payments to acquire investment in subsidiaries |
- |
- |
|
|
Proceeds on disposal of property, plant and equipment |
5,070 |
14,996 |
|
|
Proceeds on disposal of available for sale investments |
29,207 |
163,517 |
|
|
Interest received |
160,813 |
102,077 |
|
|
(928,028) |
(2,777,628) | |
|
Financing Activities: |
|
| |
|
|
Proceeds from the issue of ordinary shares, net of issue costs |
4,365,000 |
4,460,267 |
|
(Decrease)/Increase in cash and cash equivalents |
2,627,557 |
(460,618) | |
|
Cash and cash equivalents at beginning of year |
1,514,548 |
1,975,166 | |
|
Cash and cash equivalents at end of year |
4,142,105 |
1,514,548 | |
Notes to preliminary report
|
1 |
Basis of preparation |
|
|
The financial information for the year ended 29 February 2008 and for the year ended 28 February 2007 contained in this statement do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. It is, however, derived from the statutory accounts for those years. The auditors' report for both 2007 and 2008 was unqualified, but draws attention by way of emphasis without qualifying to the political and economic instability in Zimbabwe, and did not contain statements under section 235 or sections 237 (2) or (3) of the Companies Act 1985. Statutory accounts for the year ended 28 February 2007 have been approved by members in General Meeting and delivered to the Registrar of Companies. |
|
2 |
Loss per share |
2008
Group |
2007
Group |
|
|
Loss per Ordinary Share has been calculated using the weighted average number of Ordinary Shares in issue during the relevant financial period.
The weighted average number of Ordinary Shares in issue for the year is.
|
208,614,788
|
177,289,260
|
|
|
Losses for the Group for the year are (£) |
(992,048) |
(1,707,257) |
|
|
|
|
|
|
|
Loss per share basic and diluted |
(0.48p) |
(0.96p) |
|
|
The effect of all potentially dilutive share options is anti-dilutive. |
|
|
|
3 |
Intangible assets
Group |
Deferred exploration costs |
Mining options
|
Licence acquisition costs |
Total
|
|
|
|
£ |
£ |
£ |
£ |
|
|
Cost at 28 February 2007 |
2,882,595 |
47,661 |
2,031,894 |
4,962,150 |
|
|
Additions during the year |
891,041 |
- |
20,397 |
911,438 |
|
|
Disposals during the year |
(1,873) |
(30,111) |
- |
(31,984) |
|
|
Cost at 29 February 2008 |
3,771,763 |
17,550 |
2,052,291 |
5,841,604 |
|
|
Group |
|
|
|
|
|
|
Cost at 28 February 2006 |
554,689 |
14,178 |
1,760,344 |
2,329,211 |
|
|
Additions during the year |
2,327,906 |
33,483 |
271,550 |
2,632,939 |
|
|
Cost at 28 February 2007 |
2,882,595 |
47,661 |
2,031,894 |
4,962,150 |
|
4 |
Share capital |
|
Number of shares |
Nominal value |
Share premium |
|
|
|
|
|
£ |
£ |
|
|
Authorised |
|
|
|
|
|
|
Ordinary shares of £0.01 each |
|
1,000,000,000 |
10,000,000 |
- |
|
|
Issued |
|
|
|
|
|
|
Called up, allotted and fully paid |
|
|
|
|
|
|
As at 28 February 2006 |
|
145,626,980 |
1,456,270 |
2,442,790 |
|
|
Issued during the year |
|
44,367,118 |
443,671 |
3,991,863 |
|
|
As at 28 February 2007 |
|
189,994,098 |
1,899,941 |
6,434,653 |
|
|
Issued during the year |
|
31,034,482 |
310,345 |
4,054,655 |
|
|
As at 29 February 2008 |
|
221,028,580 |
2,210,286 |
10,489,308 |
|
5 |
Contingent liabilities and capital commitments |
|
|
There is a contingent liability, which in the opinion of the directors is not likely to exceed £63,650, in respect of the Giant acquisition made in the period to 28 February 2006 relating to resource ounces still in the process of being quantified. |
|
6 |
Litigation |
|
|
|
|
|
Amongst intangible assets for the Group is included £256,314 (2007 : £95,307) representing costs of title acquisition and of exploration over a diamond deposit near Marange. On 28 September 2006, the Group received notification from the Zimbabwe Minister of Mines that he intended to challenge the group's legal title with respect to Marange. The Group has initiated proceedings in the Zimbabwe High Court in order to confirm this title. Counsel has advised that in his opinion the Group's title is good and therefore no provision against loss of this asset has been made.
There is no other litigation involving any group company. | |||
Enquiries:
|
African Consolidated Resources plc
Andrew Cranswick
Roy Tucker
|
+44 7920 189010
+44 1622 816918 / +44 7920 189012 |
|
Ambrian Partners Limited
Richard Brown
Richard Greenfield
|
+44 20 7634 4700 |