TIDMBRD
RNS Number : 1306L
BlueRock Diamonds PLC
29 September 2016
29 September 2016
BLUEROCK DIAMONDS PLC
("BlueRock" or the "Company")
Interim results for the six months ended 30 June 2016
Introduction
BlueRock Diamonds (AIM: BRD) is pleased to announce its interim
results for the six months ended 30 June 2016. The interims will be
available today for download from www.bluerockdiamonds.co.uk.
Chairman's Statement
The first half of 2016 has been a period of consolidation.
Whilst production has been lower than that we would have hoped, we
have spent the period preparing for the recommencement of
operations following our operational review which has been delayed
by the unexpected and unwelcome closure by the Department of
Mineral Resources in July 2016.
We have been concentrating on a number of matters in the
period.
Personnel
It was recognised early on in the period that given the
increased size of our operations we would need to strengthen our
management team. The first step in this process was appointing Adam
Waugh as CEO. Adam was appointed with specific responsibility for
undertaking the strategic and operational review, which I will
discuss later. As part of his review, an experienced mine manager,
Johan Mihlo, was identified and subsequently appointed in July
2016. This process took longer than we had envisaged, but the board
was keen to ensure that the right person was selected for the task.
Johan has had many years of experience, most recently at Petra
Diamonds and previously with BHP Billiton and De Beers.
Following the end of the period, on 19 September 2016, Riaan
Visser resigned as a director of BlueRock. Riaan was instrumental
in building BlueRock in particular in identifying the Kareevlei
opportunity and establishing our trial mining operations. The Board
has decided not to replace him at present, because Adam Waugh and
Johan Mihlo, supported by our BEE partner, Willy van Wyk, had
already assumed a significant proportion of Riaan's
responsibilities and Riaan's remaining responsibilities, primarily
relating to the finance function will be assumed by other members
of the team.
Diacar
In 2015, we appointed Diacar as our subcontractor to process
oversized rocks that our plant configuration was unable to process,
in addition to the loading and hauling services that were already
being provided by Diacar. During the first half of 2016 it became
apparent that this commercial arrangement was not in the best
interests of BlueRock and following the DMR inspection of the
Diacar operations in July 2016 which resulted in a significant
proportion of the Diacar loading and hauling equipment failing, it
was mutually agreed that both the subcontracting and loading and
hauling agreements would be terminated. Since the end of the
period, as announced on 7 September 2016, BlueRock has entered into
an option with Diacar expiring on 31 December 2016 to buy the
Diacar plant at a price of ZAR 1.6 million for a down payment of
ZAR 100,000 and three monthly rental payments of ZAR 50,000.
It is our view that this is an excellent deal for BlueRock. It
is the belief of our new management team that operated correctly
the Diacar plant has the potential to be a valuable addition to our
capacity and the 4 month option period gives us the opportunity to
investigate this, alongside other options, before committing to any
capital cost.
Plant and processing
The new management team has been concentrating on identifying
bottlenecks and inefficiencies in the current configuration of our
plant and more recently the Diacar plant. This process has
benefitted enormously from Johan's experience and we have also been
reviewing best practice in the industry. Our initial conclusion is
that the basic design of our plant is suitable but we believe that
its performance can be enhanced by simplifying parts of the
process, adding to our pan capacity and by adjusting certain areas
of the configuration.
It is our target to process at least 30,000 tonnes per month of
ore through either a combination of the Kareevlei plant and the old
Diacar plant or through augmenting the Kareevlei plant. A decision
in relation to this will be made during the course of Q4 2016. We
anticipate that we will reach our target level gradually because we
wish to ensure that each of the steps that we plan to take achieve
the desired result.
Following the cancellation of the Diacar contract we have been
assessing the most cost effective way of operating in the future in
relation to, loading and hauling and crushing and screening, each
of which had been subcontracted to Diacar. Having put these
services out to tender we have decided to continue to subcontract
the loading and hauling from a new third party provider. We have
decided to acquire crushing and screening equipment in order to
operate these ourselves; the cost of these services is
disproportionate as the only crushing and screening equipment
available to subcontract is much larger than we require hence
attracting an unnecessarily high cost. As a result of these
measures we expect to reduce our combined per tonne of extracted
material cost for these services to reduce from around ZAR 80 per
tonne to less than ZAR 50 per tonne, a considerable saving.
Mining
During the period we have developed a life of mine plan for K2.
This has involved some remedial work as hitherto the strategy had
been to reach a lower level, where we expect to achieve higher
grades, rather than create a mine which could be exploited over the
medium to long term. The remedial work has begun and we are now in
a position to ensure constant supply of ore from all parts of the
mine, subject to completion of the financing discussed below.
Exploration of the other pipes
It is our intention to explore in more detail the other pipes at
Kareevlei. In particular we are proposing over the next few months
to begin to undertake some limited work on K5 where the test
results to date have been limited but encouraging.
Future plans and funding
Subject to financing, we intend to complete the modifications of
our plant, to acquire the crushing and screening equipment and to
commence our mine development and blasting programme by the end of
January 2017.
Events after the reporting period
Acquisition of Diamond Resources Limited
On 1 July 2016, the Group completed the acquisition of a 100%
shareholding in Diamond Resources Limited from Tawana Resources NL.
The Group agreed to acquire the entire share capital of Diamond
Recourses Pty Limited for a total consideration of GBP32,826 (ZAR
0.7m) on 29 January 2016; however the sales agreement only became
effective once the final payment was received on the 1 July
2016.
Due to the timing on the final acquisition payment to Tawana
Resources NL, Diamond Resources Limited has not been consolidated
in the current financial period. The final consideration is
currently shown as a cash deposit (see note 11).
This acquisition gives the group access to the mining right in
respect of the Kareevlei Tenements as well as speculative
exploration assets in the Northern Cape. This acquisition had been
envisaged at the time of the original acquisition and as a result
we now hold the rehabilitation guarantee required by the DMR
directly.
Paul Beck
Non-executive Chairman
Enquiries:
BlueRock Diamonds plc
Adam Waugh, CEO
www.bluerockdiamonds.co.uk
+27 (0) 84 431 0118
SP Angel Corporate Finance LLP
Nominated Adviser & Broker
David Facey/Stuart Gledhill
+44 (0) 20 3470 0470
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE
2016
Consolidated Statement of Financial Position
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
Note GBP GBP GBP
Assets
Non-current assets
Property, plant and equipment 5 517,367 548,430 477,735
Mining assets 164,449 125,659 141,364
681,816 674,089 619,099
------------ ------------ -------------
Current assets
Inventories 6 26,874 22,145 50,665
Trade and other receivables 7 41,953 15,752 7,623
Cash and cash equivalents 8 458,222 107,364 175,755
------------ ------------ -------------
527,049 145,261 234,043
------------ ------------ -------------
Total assets 1,208,865 819,350 853,142
------------ ------------ -------------
Equity and liabilities
Equity Attributable to
Equity Holders of the Parent
Share capital 10 388,046 315,250 321,604
Share premium 10 2,012,781 1,245,934 1,335,952
Retained losses (2,018,022) (1,234,836) (1,859,800)
Convertible loan note reserve 12 293,818 166,570 293,818
Foreign exchange reserve (9,689) 35,481 185,866
------------ ------------ -------------
666,934 528,399 277,440
Non-controlling interest (567,084) (268,658) (346,273)
99,850 259,741 (68,833)
------------ ------------ -------------
Liabilities
Current liabilities
Trade and other payables 11 387,716 190,253 244,134
Non-current liabilities
Borrowings 12 626,236 301,090 596,123
Provisions 13 95,063 68,266 81,718
------------ ------------ -------------
1,109,015 369,356 921,975
------------ ------------ -------------
Total equity and liabilities 1,208,865 819,350 853,142
------------ ------------ -------------
Consolidated Statement of Comprehensive Income
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
Note GBP GBP GBP
--------------------------------- ----- ----------- ----------- -------------
Revenue 206,072 33,042 264,372
Other income 58 86 231
Operating expenses (516,454) (361,403) (1,318,302)
Loss before taxation (310,324) (328,275) (1,053,699)
----------- ----------- -------------
Taxation - - 971
----------- ----------- -------------
Total loss for the period (310,324) (328,275) (1,052,728)
----------- ----------- -------------
Other Comprehensive Income:
Exchange differences on
translating foreign operations (264,264) 33,445 236,664
----------- ----------- -------------
Total comprehensive loss,
net of tax (574,588) (294,830) (816,064)
----------- ----------- -------------
Total comprehensive loss,
net of tax attributable
to:
Owners of the parent (353,777) (233,168) (676,787)
Non-controlling interest (220,811) (61,662) (139,277)
(574,588) (294,830) (816,064)
----------- ----------- -------------
Earnings per share - from
continuing activities
Basic and diluted 15 (0.01) (0.01) (0.02)
Consolidated Statement of Changes in Equity
Share Share Retained Foreign Total Non-controlling Total
Convertible capital premium losses exchange attributable interest equity
loan reserve to equity
note holders GBP
reserve GBP GBP GBP GBP of the GBP
Group
GBP GBP
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Balance at 1
January 2015
(as restated): 149,600 315,250 1,245,934 (1,007,879) 10,732 713,637 (206,996) 506,641
Loss for the
period - - - (257,917) - (257,917) (70,358) (328,275)
Other
comprehensive
income:
Foreign
exchange
movements - - - - 24,749 24,749 8,696 33,445
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
comprehensive
loss: - - - (257,917) 24,749 (233,168) (61,662) (294,830)
Transactions
with
shareholders:
Issue of
convertible
loan notes 16,970 - - - - 16,970 - 16,970
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
transactions
with
shareholders: 16,970 - - - - 16,970 - (277,860)
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Balance at 30
June 2015
(unaudited): 166,570 315,250 1,245,934 (1,265,796) 35,481 497,439 (268,658) 228,781
============ ======== ========== ============ ========== ============= ================ ==========
Balance at 30
June 2015
(unaudited): 166,570 315,250 1,245,934 (1,265,796) 35,481 497,439 (268,658) 228,781
Loss for the
period - - - (594,004) - (594,004) (130,449) (724,453)
Other
comprehensive
income:
Foreign
exchange
movements - - - - 150,385 150,385 52,834 203,219
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
comprehensive
loss: - - - (594,004) 150,385 (443,619) (77,615) (521,234)
Transaction
with
shareholders:
Issue of
convertible
loan notes 127,248 - - - - 127,248 - 127,248
Issue of shares - 6,354 90,018 - - 96,372 - 96,372
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
transactions
with
shareholders: 127,248 6,354 90,018 - - 223,620 - 223,620
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Balance at 31
December 2015
(audited): 293,818 321,604 1,335,952 (1,859,800) 185,866 277,440 (346,273) (68,833)
============ ======== ========== ============ ========== ============= ================ ==========
Balance at 1
January 2016: 293,818 321,604 1,335,952 (1,859,800) 185,866 277,440 (346,273) (68,833)
Loss for the
period - - - (158,222) - (158,222) (152,102) (310,324)
Other
comprehensive
income:
Foreign
exchange
movements - - - - (195,555) (195,555) (68,709) (264,264)
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
comprehensive
loss: - - - (158,222) (195,555) (353,777) (220,811) (574,588)
Transactions
with
shareholders:
Issue of shares - 66,442 676,829 - 743,271 - 743,271
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Total
transactions
with
shareholders: - 66,442 676,829 - - 743,271 - 168,683
------------ -------- ---------- ------------ ---------- ------------- ---------------- ----------
Balance at 30
June 2016
(unaudited): 293,818 388,046 2,012,781 (2,018,022) (9,689) 666,934 (567,084) 99,850
============ ======== ========== ============ ========== ============= ================ ==========
Consolidated Statement of Cash Flows
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP GBP GBP
------------------------------- --- ----------- ----------- -------------
Operating activities
Cash used in operations 14 (121,493) (61,754) (666,436)
Net cash used in operating
activities (121,493) (61,754) (666,436)
Investing activities
Purchase of property, plant
and equipment (51,692) (137,658) (227,543)
(Purchase) / Disposal of
non-current assets (23,085) 8,700 (7,004)
Net cash used in investing
activities (75,047) (128,868) (234,547)
Financing activities
Proceeds on share issue 700,000 - 91,373
Proceeds on convertible
loan notes issued - 50,000 450,000
Exercised share options 43,270 - -
Increase in short term
loan - - 50,715
Net cash received from
financing activities 743,270 50,000 592,088
Net increase / (decrease)
in cash and cash equivalents 546,730 (140,622) (308,895)
----------- ----------- -------------
Cash and cash equivalents
at the beginning of the
period 8 175,755 247,986 247,986
Foreign exchange differences (264,263) - 236,664
Cash and cash equivalents
at the end of the period 8 458,222 107,364 175,755
Notes to the Interim Consolidated Financial Statements
1. General information and basis of preparation
The condensed interim consolidated financial statements (the
"interim financial statements") are for the six month period ended
30 June 2016.
These interim financial statements have not been audited, but
have been reviewed by the auditors under ISRE 2410 of the Auditing
Practices Board. The financial information set out in this report
does not constitute statutory accounts as defined by the Companies
Act 2006. The comparative figures for the year ended 31 December
2015 were derived from the statutory accounts for the year to 31
December 2015 which have been delivered to the Registrar of
Companies. Those accounts received an unqualified audit report
which did not contain statements under sections 498(2) or (3)
(accounting records or returns inadequate, accounts not agreeing
with records and returns or failure to obtain necessary information
and explanations) of the Companies Act 2006.
The interim financial statements have been prepared on the basis
of the accounting policies set out in the December 2015 financial
statements of BlueRock Diamonds Plc and IAS 34 "Interim Financial
Reporting" on a going concern basis. They are presented in sterling
which is also the functional currency of the parent company. They
do not include all of the information required in annual financial
statements in accordance with IFRS and should be read in
conjunction with the consolidated financial statements of the Group
for the period ended 31 December 2015.
The interim financial statements have been approved for issue by
the Board of Directors on 30 September 2016.
2. Accounting policies
The following relevant new standards, amendments to standards
and interpretations have been issued by the IASB, but are not
effective for the financial year beginning on 1 January 2016, they
have not yet been adopted by the EU, and have not been early
adopted.
The Directors anticipate that the adoption of these standards
and interpretations in future periods will have no material impact
on the financial statements of the Company when the relevant
standards and interpretations come into effect. The principal
accounting policies applied in the preparation of these financial
statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated:
Standard Key requirements Effective date as adopted by the EU
IFRS 9 Financial Instruments - Replacement to IAS 39 and is built on a 1 January 2018
single classification and
measurement approach for financial assets which reflects both the
business model in which
they are operated and their cash flow characteristics.
IFRS 15 Revenue from contracts with customers - Introduces requirements for companies to recognise 1 January 2018
revenue for the transfer of goods or services to customers in amounts that reflect the
consideration
to which the company expects to be entitled in exchange for those goods or services. Also
results in enhanced disclosure about revenue.
IFRS 16 Leases - Introduces a single lessee accounting model and eliminates the previous 1 January 2019
distinction
between an operating and a finance lease.
The Group has not adopted these standards as it is not expected
to have a material effect on the Group.
3. Significant judgements and sources of estimation
uncertainty
In the application of the Group's accounting policies the
Directors are required to make estimates and assumptions about the
carrying amounts of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these
estimates.
The judgements, estimates and assumptions applied in the interim
financial statements including the key sources of estimation
uncertainty were the same as those applied in the financial
statements for the period ended 31 December 2015.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
4. Segmental reporting
Operating segments are identified on the basis of internal
reports about components of the Group that are regularly reviewed
by the chief operating decision maker in order to allocate
resources to the segments and to assess their performance.
The Group's operations relate to the exploration for, and
development of mineral deposits in the Kimberley region of South
Africa and as such the Group has only one reportable segment. The
non-current assets in the Kimberley region in June 2016 were
GBP681k (December 2015: GBP619k)
All revenue consists of sales of diamonds in South Africa
through auctions as is customary in the industry. The Company sells
its diamonds through auctions run by Flawless Diamonds.
5. Property, plant and equipment
Accumulated Carrying
Cost / depreciation value
Valuation GBP 30 June
GBP 2016
GBP
Unaudited
------------ -------------- -----------
Mine infrastructure 74,719 26,177 48,542
Motor vehicles 7,503 5,442 2,061
Plant and machinery 685,870 219,106 466,764
Total 768,092 250,725 517,367
Reconciliation of property, plant and equipment
Carrying Additions Depreciation Disposals FX revaluation Carrying
value GBP value
1 January GBP GBP GBP 30 June
2016 2016
GBP GBP
Unaudited
----------- ---------- ------------- ---------- --------------- -----------
Mine infrastructure 39,816 5,000 (7,139) - 10,865 48,542
Motor vehicles 2,946 - (1,005) - 120 2,061
Plant and
machinery 434,973 46,962 (71,761) (7,809) 64,399 466,764
----------- ---------- ------------- ---------- --------------- -----------
477,735 51,962 (79,905) (7,809) 75,384 517,367
----------- ---------- ------------- ---------- --------------- -----------
6. Inventories
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Diamonds on hand 26,874 22,145 50,665
----------- ----------- ------------
26,874 22,145 50,665
----------- ----------- ------------
7. Trade and other receivables
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Prepayments 6,690 5,963 2,016
VAT 35,263 9,789 5,591
Other receivables - - 16
----------- ----------- ------------
41,953 15,752 7,623
----------- ----------- ------------
The carrying value of all trade and other receivables is
considered a reasonable approximation of fair value.
8. Cash and cash equivalents
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Cash in bank and on hand 425,396 107,364 175,755
Deposit - Diamond Resources 32,826 - -
----------- ----------- ------------
458,222 107,364 175,755
----------- ----------- ------------
Cash on deposit of GBP32,826 relates to the acquisition of
Diamond Resources Limited from Tawana Resources NL (see note
17).
9. Share Based Payments
The Directors were granted share options under the share option
agreements dated 19 August 2013. There were no amendments to the
terms of the options granted during the period.
The share options held by current and former Directors as at 30
June 2016 and the exercise prices were as follows:
Tranche 1 Tranche 2 Tranche 3 Tranche
4
Number
of ordinary
shares
subject Exercise Exercise Exercise Exercise
to share price price price price
Director options Number (pence) Number (pence) Number (pence) Number (pence)
P. Beck 315,251 - - 157,625 40 157,626 55 - -
J. Kilham 472,876 157,625 14 157,625 22 157,626 40 - -
T. Leslie 472,876 157,625 18 157,625 40 157,626 55 - -
A. Markgraaff 372,876 57,625 18 157,625 40 157,626 55 - -
J.Quirk 945,750 315,250 18 315,250 40 315,250 55
R. Visser 1,261,002 - - 630,501 22 630,501 40 - -
A. Waugh 776,091 - - - - - - 776,091 11
Total 4,616,722 688,125 1,576,251 1,576,255 776,091
------------- -------- --------- ---------- --------- ---------- --------- -------- ---------
The following share options were exercised during the period to
30 June 2016:
On 12 January 2016 Andre Markgraaf exercised 100,000 share
options at an exercise price of 18p per Ordinary Share.
On 12 January 2016 Rian Visser exercised 180,500 share options
at an exercise price of 14p per Ordinary Share.
The following share options were granted during the period to 30
June 2016:
On 28 April 2016 776,091 share options were granted to Adam
Waugh with an exercise price of 11p per Ordinary Share.
Movements in the number of share options outstanding and their
related weighted average prices are as follows:
30 June 2016 31 December 30 June 2015
2015
Average Number Average Number Average Number
exercise of options exercise of options exercise of options
price price price
in pence in pence in pence
per share per share per share
Outstanding at
the beginning
of the period 34 4,121,131 32 4,728,756 32 4,728,756
Granted 11 776,091 - - - -
Exercised 15 280,500 15 607,625 - -
----------- ------------ ----------- ------------ ----------- ------------
Outstanding at
the period / year
end 30 4,616,722 34 4,121,131 32 4,728,756
Exercisable at
the period / year
end 30 4,616,722 34 4,121,131 32 4,728,756
Options are valued at date of grant using the Black-Scholes
option pricing model. There was no charge recorded for the period
relating to share based payments on the grounds of materiality.
10. Share capital and share premium issued
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Number of Ordinary shares 38,804,580 31,525,041 32,160,444
Ordinary share capital of
1p per share 388,046 315,250 321,604
Share premium 2,012,781 1,245,934 1,335,952
2,400,827 1,561,184 1,657,556
----------- ----------- ------------
In the period ended 30 June 2016 the following Ordinary share
issues occurred:
Date of issue Details of issue Number of ordinary Share capital Share premium
shares GBP GBP
At 1 January
2016 32,160,444 321,604 1,335,952
12 January
2016 Exercise of Share Options 280,500 2,805 40,466
28 April 2016 Placing and Equity Issue 6,363,636 63,637 636,363
------------------ ------------- -------------
At 30 June
2016 38,804,580 388,046 2,012,781
------------------ ------------- -------------
11. Trade and other payables
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Trade payables 174,304 107,462 24,657
Accrued expenses 182,460 79,848 168,762
Corporation tax payables - 2,943 -
Directors' current account 30,952 - 50,715
----------- ----------- ------------
387,716 190,253 244,134
----------- ----------- ------------
The carrying value of all trade and other payables is considered
a reasonable approximation of fair value.
The accrued expenses for 2016: GBP182,460 (2015: GBP79,848,
December 2015: 168,762) relate to plant development expenditure
which has not been invoiced by the year end and a share of costs
due for diamonds on hand which is payable to Diacar.
The Directors' current account 2016: GBP30,952 (2015: GBPnil,
December 2015: GBP50,715) is made up of Directors fees and share
option payments due to Riaan Visser.
12. Borrowings
The movement on each loan liability component can be summarised
as follows:
Convertible loan 1 Convertible loan 2 Convertible loan 3 Total
GBP GBP GBP GBP
Balance at 1 January 2015 255,255 - - 255,255
Additional discounted loan notes issued - 31,856 267,200 299,056
Finance charge: unwinding the discount
factor 32,001 2,736 7,075 41,812
Balance at 31 December 2015 287,256 34,592 274,275 596,123
------------------- ------------------- ------------------- --------
Balance at 1 January 2016 287,256 34,592 274,275 596,123
Finance charge: unwinding the discount
factor 13,538 1,857 14,718 30,113
Balance at 30 June 2016 300,794 36,449 288,993 626,236
------------------- ------------------- ------------------- --------
Equity Component 143,000 18,018 132,800 293,818
=================== =================== =================== ========
All convertible loan stock is repayable on the 16 October 2019
and carries a zero coupon (nil interest).
The loan note will be convertible:
-- at the note holder's option at any time up to the end of the
term at a conversion price of 11 pence per ordinary share; and
-- at the Company's option after the second anniversary of
initial subscription provided that the one month volume weighted
average price of the Company's ordinary shares is in excess of 120%
of the conversion price and the closing mid-market price on the
date prior to the Company opting to convert exceeds 120% of the
conversion price.
In addition if the Company sells its interest in its subsidiary
undertaking before the final repayment date for consideration
equivalent to or greater than 120% of the loan note outstanding
then the notes will become redeemable and a 20% premium will be
payable to the note holder.
A fair value exercise to determine the value of the three
components was undertaken by the Directors at the date the
convertible loan was initially drawn down.
The fair value of the host loan instrument (including the
embedded redemption feature) been valued as the residual of:
a) The fair value of the first draw down on 16 October 2014 is
discounted at a commercially applicable rate of 9.25%. The fair
values of the draw downs on 27 May 2016 and 2 October 2016 have
been discounted at a commercially applicable rate of 10.5%.
b) The residual amount between the transaction price of the loan
and the fair value of the liability has been allocated to an equity
reserve.
13. Provisions
Reconciliation of provisions - 2016
2016
Rehabilitation costs Group
GBP
Balance at 1 January 2015 72,993
Unwinding of discount (4,727)
Balance at 30 June 2015 68,266
--------
Balance at 1 June 2015 68,266
Unwinding of discount 13,452
Balance at 31 December 2015 81,718
--------
Balance at 1 January 2016 81,718
Unwinding of discount 13,345
Balance at 30 June 2016 95,063
--------
The provision for environmental rehabilitation closure cost was
independently assessed by Ndi Mudau of NDI Geological Consulting
Services. The closure cost assessment reports over the Remainder of
the Farm No. 113 (Skietfontein), Portion of Portion 2
(Kareeboompan) of the Farm 142, Portion 1 (Westhoek) of the Farm
113, and Portion 2 (Klipvlei) of the Farm 113. The financial
provision was calculated in accordance with Regulation 54 of the
Minerals and Petroleum Resources Development Act 2002 (Act 28 of
2002) and is dated 12 February 2016.
14. Cash used in operations
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Loss before taxation (310,324) (328,275) (1,053,699)
Adjustments for non-cash items:
Depreciation and amortisation 79,905 40,173 110,557
Shares issued in lieu of company
debt - - 5,000
Finance charges on convertible
loan notes 30,113 34,570 35,086
Foreign exchange revaluation
of fixed assets (75,384) 45,835 93,894
Movements in provisions 13,345 (4,727) 8,725
Loss on disposal of fixed
assets 7,809 - -
Tax credit - - 971
Changes in working capital:
(Increase) / decrease in trade
and other receivables (34,330) 19,977 28,106
Increase in trade and other
payables 143,582 129,209 131,960
Decrease / (Increase) in inventories 23,791 1,484 (27,036)
(121,493) (61,754) (666,436)
---------- ---------- -----------
15. EPS (Earnings per share)
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Unaudited Unaudited Audited
Loss attributable to ordinary
shareholders (152,102) (233,168) (676,787)
Weighted average number of
shares 35,009,972 31,525,041 31,787,878
Loss per share basic and
diluted (0.01) (0.01) (0.02)
Weighted average number of
shares after dilution 35,009,972 32,220,446 31,971,978
Fully diluted earnings per
share (0.01) (0.01) (0.02)
Share options granted to directors could potentially dilute EPS
in the future but are not included in a dilutive EPS calculation
because they are antidilutive for the period.
16. Related parties
Details of the Director's remuneration for the period ending
June 2016 were as follows:
During the period ending 30 June 2016, key management
compensation amounted to GBP24,000 of which GBP6,000 remains
outstanding to R Visser included in the Directors' current account
at the period end.
During the period R Visser and A Markgraaf exercised their share
options (see note 9) for a value of GBP25,270 and GBP18,000
respectively, which decreased the outstanding balance in the
Directors current account.
The outstanding balance at 30 June 2016 was GBP30,952 (year
ended 31 December 2015: GBP50,715, period ended 30 June 2015
GBPnil).
17. Events after the reporting period
Acquisition of Diamond Resources Limited
On the 1 July 2016, the Group completed the acquisition of a
100% shareholding in Diamond Resources Limited from Tawana
Resources NL. The Group agreed to acquire the entire share capital
of Diamond Recourses Pty Limited for a total consideration of
GBP32,826 (ZAR 0.7m) on 29 January 2016; however the sales
agreement only became effective once the final payment was received
on the 1 July 2016.
Due to the timing on the final acquisition payment to Tawana
Resources NL, Diamond Resources Limited has not been consolidated
in the current financial period. The accounting for the acquisition
has not been finalised due to the recent nature of the transaction.
The final consideration is currently shown as a cash deposit (see
note 11).
This acquisition gives the group access to the mining right in
respect of the Kareevlei Tenements as well as speculative
exploration assets in the Northern Cape. This acquisition had been
envisaged at the time of the original acquisition and as a result
we now hold the rehabilitation guarantee required by the DMR
directly.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EASNPASEKEFF
(END) Dow Jones Newswires
September 29, 2016 02:00 ET (06:00 GMT)
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