RNS Number:4511J
Kenmare Resources PLC
5 September 2001
KENMARE RESOURCES PLC ("Kenmare")
Chairman's Statement & Results for Six Months Ended 30th June, 2001
Chairman's Statement
The current focus of our activities is the arranging of product off-take
agreements and project finance for our Moma Titanium Project. To this end, in
June 2001 we appointed N.M. Rothschild & Sons Ltd. as financial advisor.
Rothschild is an investment bank with a leading position in the natural
resources sector. We are very pleased to have it as part of the team.
Rothschild is working on various aspects of Moma's legal and fiscal framework,
which will enhance the Project's bankability, and is also holding initial
discussions with funding institutions. In the autumn, Rothschild expects to
issue an Information Memorandum to a short list of banks and funding
institutions which have expressed an interest in funding Moma.
Despite the backdrop of a slowing world economy our marketing negotiations
have been progressing positively. We anticipate being able to sign off-take
agreements as our financial discussions progress.
As an addition to the Project concept, which was based on the initial usage of
diesel powered generators at site, Kenmare commissioned a Definitive
Feasibility Study on the connection of Moma to the national electrical grid of
Mozambique. The Study is nearing completion and this infrastructure link is
now an integral part of the overall Project. This link does not have a
material effect on the Project's rate of return but makes it a more robust
overall proposition. Detailed design testwork on the tailings disposal system
is underway at site. So far, results from testwork indicate that we may be
able to make some capital cost savings on this aspect of the operation from
those set out in the Project Definitive Feasibility Study. Our Environmental
Impact Assessment has been fully approved by the Government of Mozambique.
Kenmare will now move towards preparing an Environmental Management Plan.
The Government of Mozambique is also working with us to create a framework
which offers the most attractive possible financing environment. The
investment world's perception of Mozambique as an investment location
continues to improve. The first investment that the newly combined entity
BHP-Billiton announced in July 2001 was a circa US$1 billion doubling of
capacity at the Mozal Aluminium Smelter in Mozambique. Such investments
improve the climate for Moma's funding negotiations by demonstrating investor
confidence in the country.
In this Interim Report full provision has been made for the remaining value of
our Niassa Gold Mineral Interest. This is due to the continued low price of
gold and our decision to focus all our own resources on the development of the
Moma Titanium Project.
Since the AGM, Ken Judge has retired from the Board and is pursuing his own
interests in natural resources. I would like to thank Ken for the very
valuable contribution he made to Kenmare during his time on the Board and wish
him every success in his own ventures.
Charles Carvill, Chairman
5th September 2001
For more information :
Deirdre Corcoran
Financial Controller & Company Secretary
+353-1-671 0411 or +353-87-6383742
Deirdre Walsh
Murray Consultants
+353-1-663 3315
Jim Milton
Murray Consultants
+353-86- 2558400
Tim Blackstone
Blackstone Business Communications
+44-207-2512544
www.kenmareresources.com
AUDITORS' REVIEW REPORT
TO THE BOARD OF DIRECTORS OF KENMARE RESOURCES PLC
Interim Financial Information - Six months ended 30th June 2001
Introduction
We have been instructed by the Company to review the financial information set
out on pages 4 to 8 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the Directors. The Listing
Rules of the Irish Stock Exchange and of the UK Listing Authority require that
the accounting policies and presentation applied to the interim figures should
be consistent with those applied in preparing the preceding annual accounts
except where any changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board. A review consists principally
of making enquiries of management and applying analytical procedures to the
financial information and underlying financial data and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed in
accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly we do not express an audit opinion on the
financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30th June 2001.
Deloitte & Touche
Chartered Accountants
and Registered Auditors
Deloitte & Touche House
Earlsfort Terrace
Dublin 2
5th September 2001
KENMARE RESOURCES PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30th JUNE 2001
6 Months 6 Months 12 Months
30-06-01 30-06-00 31-12-00
Unaudited Unaudited Audited
E E E
Turnover - - -
===============================================
Operating Expenses (1,032,594) (375,630) (973,004)
-----------------------------------------------
Operating Loss (1,032,594) (375,630) (973,004)
Interest Receivable 81,502 22,520 104,785
-----------------------------------------------
Loss On Ordinary Activities
Before Taxation (951,092) (353,110) (868,219)
Taxation - - -
-----------------------------------------------
Loss On Ordinary Activities
After Taxation (951,092) (353,110) (868,219)
===============================================
Loss per share (E 0.51) (E 0.25) (E 0.58)
===============================================
KENMARE RESOURCES PLC
CONSOLIDATED BALANCE SHEET
AS AT 30th JUNE 2001
6 Months 6 Months 12 Months
30-06-01 30-06-00 31-12-00
Unaudited Unaudited Audited
E E E
Fixed Assets
Mineral Interests 11,472,616 7,184,319 9,095,938
Tangible Assets 49,104,719 43,590,156 44,764,682
-----------------------------------------------
60,577,335 50,774,475 53,860,620
-----------------------------------------------
Current Assets
Debtors 112,503 2,533,601 63,435
Cash at Bank and In Hand 2,834,100 613,813 1,584,177
-----------------------------------------------
2,946,603 3,147,414 1,647,612
Creditors: Amounts falling
due within one year (1,577,491) (5,100,311) (4,124,286)
-----------------------------------------------
Net Current Assets/
(Liabilities) 1,369,112 (1,952,897) (2,476,674)
-----------------------------------------------
Total Assets Less Current
Liabilities 61,946,447 48,821,578 51,383,946
Creditors: Amounts falling
due after one year (1,190,621) (4,246,931) (1,215,011)
Provision for liabilities
and charges (1,494,761) - (1,489,215)
-----------------------------------------------
59,261,065 44,574,647 48,679,720
===============================================
Capital and Reserves
Called Up Share Capital 24,281,020 22,032,847 23,025,358
Share Premium Account 18,413,009 12,325,059 14,113,837
Profit and Loss Account
- (Deficit) (26,037,174) (24,570,972) (25,086,081)
Other Reserve 6,486,571 1,237,023 1,721,397
Revaluation Reserve 36,117,639 33,550,690 34,905,209
-----------------------------------------------
Shareholders' Funds 59,261,065 44,574,647 48,679,720
===============================================
KENMARE RESOURCES PLC
GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30th JUNE 2001
6 Months 6 Months 12 Months
30-06-01 30-06-00 31-12-00
Unaudited Unaudited Audited
E E E
Net cash inflow from
operating activities 214,563 1,680,168 389,624
-----------------------------------------------
Returns on investment
and servicing of finance
Interest received 81,502 22,520 104,785
-----------------------------------------------
Net cash inflow from returns
on investment & servicing
of finance 81,502 22,520 104,785
-----------------------------------------------
Capital expenditure
& financial investment
Addition of Mineral
Interests (2,376,678) (1,087,348) (3,012,807)
Addition of Tangible
Fixed Assets - (10,025,661) (9,259,278)
-----------------------------------------------
Net cash outflow from capital
expenditure & financial
investment (2,376,678) (11,113,009) (12,272,085)
-----------------------------------------------
Net cash outflow before use of
liquid resources &
financing (2,080,613) (9,410,321) (11,777,676)
-----------------------------------------------
Financing:
Issue of Ordinary Share
Capital 6,001,509 6,112,664 9,107,024
Cost of share issue (446,675) (613,409) (826,480)
(Decrease)/Increase in
debt due within a year (2,199,908) - 3,610,782
(Decrease)/Increase in
debt due beyond a year (24,390) 4,246,931 1,192,579
-----------------------------------------------
Net cash inflow from
financing 3,330,536 9,746,186 13,083,905
-----------------------------------------------
Increase in cash 1,249,923 335,865 1,306,229
===============================================
KENMARE RESOURCES PLC
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE SIX MONTHS ENDED 30th JUNE 2001
6 Months 6 Months 12 Months
30-06-01 30-06-00 31-12-00
Unaudited Unaudited Audited
E E E
Loss attributable to
Group shareholders (951,092) (353,110) (868,219)
Revaluation of Tangible
Fixed Assets - 33,550,690 34,905,209
Currency Translation
Movement 5,977,604 (12,982) 471,392
-----------------------------------------------
Total Recognised Gains and
Losses for the period 5,026,512 33,184,598 34,508,382
===============================================
KENMARE RESOURCES PLC
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
FOR THE SIX MONTHS ENDED 30th JUNE 2001
6 Months 6 Months 12 Months
30-06-01 30-06-00 31-12-00
Unaudited Unaudited Audited
E E E
Total Recognised Gains
and Losses for the period 5,026,512 33,184,598 34,508,382
Issue of Shares - at par 1,255,662 2,060,377 3,172,627
Share Premium, net of costs 4,299,171 3,438,877 5,107,916
--------------------------------------------
Net Change in Shareholders'
funds 10,581,345 38,683,852 42,788,925
Opening Shareholders' funds 48,679,720 5,890,795 5,890,795
--------------------------------------------
Closing Shareholders' funds 59,261,065 44,574,647 48,679,720
============================================
KENMARE RESOURCES PLC
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30th JUNE 2001
1. Basis of Preparation of Interim Financial Statements. The Interim
Statement has been prepared applying the accounting policies set out on page
22 of the 2000 Annual Report and Accounts.
The unaudited interim financial information in this statement has been
reviewed by the auditors in respect of the six months ended 30th June 2001
only and their Report to the Directors is set out on page 3.
2. Loss and Fully Diluted Loss per Share
The calculation of the loss and fully diluted loss per share is based on the
loss after taxation of E 951,092 (2000: E 353,110) and the weighted average
number of shares in issue during the six months ended 30th June 2001 of
187,201,875 (2000: 139,014,117 shares).
3. Mineral Interests
The recovery of deferred development expenditure is dependent upon the
successful development of economic ore reserves, which in turn depends on the
availability of adequate funding from a joint venture party or other source.
A provision of E 1,328,570 has been made for the remaining value of the Niassa
Gold deferred development expenditure. The Directors are satisfied that
deferred expenditure is worth not less than cost less any amounts written off
and that the exploration projects have the potential to achieve mine
production and positive cash flows.
4. Tangible Assets
Tangible Assets are stated at cost or valuation less accumulated depreciation.
GRD Minproc Limited, an independent Australian engineering group, has valued
the Mining and Processing Plant on a depreciated replacement cost basis as at
30th June 2000. The recovery of this amount is dependent upon the successful
development of the Moma Titanium Minerals Project, which in turn depends on
the availability of adequate funding from a joint venture party or other
source. The historical cost net book value of these assets at 30th June 2001
is E 9,211,789. The surplus arising on revaluation amounts to E 36,117,639.
5. Non-Consolidation of Subsidiary Undertaking
As set out in detail in Note 8 of 2000 Annual Report, Grafites de Ancuabe,
S.A.R.L., a subsidiary company, has been excluded from consolidation from 31st
December 1999.
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