RNS Number : 6444V
River Diamonds PLC
30 May 2008
AIM: RVD
River Diamonds Plc
("River Diamonds" or "the Company" or "the Group")
Chairman's Statement and Interim Results to 28 February 2008
Highlights:
o Increased stake in the Vatukoula Gold Mine to 19%
o Mining commenced at the Vatukoula Gold Mine in November 2007
o First gold poured from the recommissioning of the processing plant
o Placed 250,000,000 new ordinary shares raising �3,750,000 (before expenses)
Post Period Highlights:
o Acquisition of the Vatukoula Gold Mine completed
o Placed 77,816,666 new ordinary shares raising �4,668,999 (before expenses)
o Mill commissioned in April 2008
o First gold pour from continuing operations totalling 641 ounces
Chairman's Statement:
The previous nine months have seen a major change in the Group's mineral and geographic focus. In the previous financial period River
Diamonds began investing in the Vatukoula Gold Mine in Fiji, eventually increasing its shareholding to 19% of the mine on 4 October 2007. On
14 December 2007 the Company entered into an agreement to acquire the remaining interest in the mine. The acquisition was completed on 1
April 2008.
With the completion of the acquisition, the Group has full control over the mine and has significantly expanded its interest in the gold
sector. Our change in focus with a view to becoming a more diversified mining and exploration Group has allowed us to secure an established
mine with a substantial resource.
Results Summary
The consolidated loss on ordinary activities for the period ended 29 February 2008 was �0.59 million; compared to a loss of �0.50
million for the period ending 28 February 2007. The increase in the loss on ordinary activities was a result of an increase in
administrative costs that were primarily attributable to increased expenditure associated with the acquisition of the Vatukoula Gold Mine.
Funding
During the period 250,000,000 ordinary shares of 0.1p each were issued for cash of 1.5p per share, generating proceeds of �3,750,000. In
addition, ordinary common shares were issued against warrant conversions which generated proceeds of �30,000.
Projects Review
Vatukoula Gold Mine - Fiji - (100% holding - as at 1 April 2008)
Stage - Mine Development / Production
The Vatukoula Gold Mine is one of the longest continuously operating high grade mines in the world with an operational history that
extends over 70 years. The mine commenced production in 1933 and has produced some 7 million troy ounces of gold and over 2 million troy
ounces of silver from the treatment of around 30 million tonnes of ore. In the last 10 years of full operation the plant has processed on
average 560,000 tonnes per annum at a mined grade of 7.8 grams of gold per tonne producing 122.1 thousand ounces of gold per annum.
The strategy is to bring the mine back to full production by the second half of 2009. The extraction of underground ore reserves
commenced in November 2007, and processing began in April 2008. The first gold pour occurred on 19 May 2008, This pour, which totalled 779.2
ounces of gold ore (comprising 641 ounces fine gold and 121 ounces of fine silver), was in-line with production targets and represents the
final step in the recommissioning of operations at the mine.
The mining operations are designed using conventional labour intensive stoping methods, together with trackless ground handling and
haulage followed by skip hoisting via the vertical shafts. Stoping will be a mixture of Long Wall Breast, Shrinkage and Cut and Fill. The
processing plant comprises a crushing circuit, flotation, roasting and calcines cyanidation circuit and tailings cyanidation.
The JORC-compliant gold resources at the mine total 16.84 million tonnes at an average grade of 9.49 grams of gold per tonne or 5.15
million ounces of gold. Currently, the mine employs approximately 700 personnel
Panguma Dykes Project - Sierra Leone - (100% holding)
Stage - Resource Definition / Test for Larger Stones
River Diamonds has a 100% interest in the Panguma Diamond Project in Sierra Leone, the License expired at the end of March 2008. However
the Company has reapplied for the area and is waiting for a response from the Mineral Department of Sierra Leone.
The Panguma area is about 230 km from Freetown and covers approximately 5,400 hectares in eastern Sierra Leone. In recent years Sierra
Leone appears to have stabilised politically and has a favourable mining law. New bedrock diamond discoveries, as well as the high value of
Sierra Leone diamonds, combine to make the country a prime target for diamond exploration.
Exploration by River Diamonds has demonstrated that a number of the Kimberlite dyke systems located at Panguma have a strike extent up
to 4-5km and the mini-bulk sampling programme confirms that most of the Panguma dykes are diamondiferous, with strongly anomalous values
within the widest reported (composite) dyke at 0.8m. Some of the other dykes/fissures sampled also contain interesting grades up to
0.77ct/t, although these dykes are narrower and may splay and pinch towards the southwest. Given the narrow dyke width the proposed
collection of a bulk sample of up to 1,000 tonnes will require shaft sinking and underground mining on one or more dykes.
Currently the Group is not expending any significant amounts in the development of this project until the status of the license has been
determined.
Rio Novo - Brazil - (100% holding)
Stage: Target Definition / Target Delineation
The site is located within the Tapajgold province, in central Brazil, and has undergone very little modern exploration. The
mineralisation in the area is associated to quartz veining and hydrothermal alteration related to the veins. Detailed exploration over the
area is limited with Rio Tinto undertaking a systematic mineral exploration across the province in the 1980's and the Brazilian geological
survey undertaking a regional mapping and geophysical survey in 2000. In November 2006 River Diamonds undertook a geological review of the
area focusing on historic and current artisanal workings of both alluvial and vein hosted origin. The work included mapping and grab
sampling.
The Company is currently assessing a strategy for the development of this project, and therefore currently only minimal expenditure is
being incurred in Brazil.
Kao Diamond Project -Lesotho - (0.5% holding)
Stage - Mine Development
Kao Diamond Project is a Kimberlite deposit with an indicated and measured resource of 147 million tonnes of Kimberlite at a grade of
6.9 carats per hundred tonnes. The Kao Diamond Mine was commissioned on the 22 November 2007, and during the first week 30 tonnes of
alluvial material was processed, producing the first diamonds including a 0.86 carat stone.
Outlook
With the acquisition of the Vatukoula Gold Mine we believe that we have secured an asset that has the potential to deliver substantial
cash flow to River Diamonds in the near future. Furthermore, we believe that the combination of stringent cost controls, management
expertise and strong gold prices, together with the fact that the operations are unburdened by any historical hedging obligations,
represents a significant opportunity to bring the mine back to profitability.
Lastly, I would like to reiterate the Board's appreciation of the senior management and operational staff, who have shown continuing
support and commitment to the Group. It is this commitment and support that has brought the company to the strong position it is in today,
and that will continue this success in the long term.
Enquiries:
River Diamonds plc Hichens, Harrison &
Co plc
David Lenigas + 44 20 7016 5100 Dave Paxton 020 7382 7785
Colin Orr Ewing + 44 20 7352 4117
John Ian Stalker + 27 11 269 4900
Neil Herbert + 27 11 269 4900
W.H. Ireland Limited Parkgreen
Communications
David Porter 020 7220 1666 Louise Goodeve 020 7851 7480
James Joyce Justine Howarth
RIVER DIAMONDS PLC
Consolidated income statement
For THE period ended 29 February 2008
Six Six Twelve
months months months
to 29 February to 28 February to 31 August 2007
2008 2007 (audited)
(unaudited) (unaudited) �
� �
Turnover 54,366 9,112 28,106
Cost of sales (7,962) (900) (4,116)
Gross profit 46,404 8,212 23,990
Administration expenses (646,371) (513,004) (1,001,117)
Operating loss (599,967) (504,792) (977,127)
Other interest receivable and 14,537 7,568 9,188
similar income
Interest payable and similar - (6,785) (14,172)
charges
Loss on ordinary activities (585,430) (504,009) (982,111)
before taxation
Taxation - - -
Loss for the financial period (585,430) (504,009) (982,111)
pence pence Pence
Loss per share
Basic (0.06) (0.11) (0.17)
Diluted (0.06) (0.11) (0.17)
RIVER DIAMONDS PLC
CONSOLIDATED BALANCE SHEET
AS AT 29 February 2008
As at As at As at
29 February 28 February 31 August
2008 2007 2007
(unaudited) (unaudited) (audited)
� � �
Non-current assets
Goodwill 1,213,091 - 1,213,091
Property, plant and equipment 398,194 462,908 434,268
Investments 4,650,250 271,857 2,900,250
Total non-current assets 6,261,535 734,765 4,547,609
Current assets
Investment 1 1 1
Trade and other receivables 1,592,156 84,513 56,561
Cash and cash equivalents 39,550 28,374 35,436
Total current assets 1,631,707 112,888 91,998
Total assets 7,893,242 847,653 4,639,607
Total equity and liabilities
Current liabilities
Trade and other payables 1,548,060 203,236 300,155
Non current liabilities
Convertible loan 88,555 - 88,555
Total liabilities 1,636,615 203,236 388,710
Shareholders' equity
Share capital 1,088,622 469,928 835,622
Share premium account 9,217,209 3,179,460 6,884,411
Merger reserve 2,166,528 2,166,528 2,166,528
Other reserve 154,092 - 154,092
Foreign exchange reserve 5,362 - -
Retained loss (6,375,186) (5,171,499) (5,789,756)
Total equity 6,256,627 644,417 4,250,897
Total equity and liabilities 7,893,242 847,653 4,639,607
RIVER DIAMONDS PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 29 FEBRUARY 2008
Six Six Twelve
months months months
to 29 February to 28 February to 31 August
2008 2007 2007
(unaudited) (unaudited) (audited)
� � �
Net cash flow from operating (553,115) (389,828) (768,029)
activities before changes in
working capital
Returns on investments and 14,537 (746) (5,253)
servicing of finance
Capital expenditure and (2,037,691) (101,313) (3,887,603)
financial investment
Net cash outflow from capital (2,576,269) (491,887) (4,660,885)
expenditure and financial
investment
Financing 2,585,798 - 4,170,645
Increase/ (decrease) in cash 9,529 (491,887) (490,240)
Reconciliation of net cash Six Six Twelve
flow to movement of net funds months months months
to 29 February to 29 February to 31 August
2008 2007 2007
(unaudited) (unaudited) (audited)
� � �
Increase / (decrease) in cash 9,529 (491,887) (490,240)
Net funds brought forward 30,021 520,261 520,261
Net funds carried forward 39,550 28,374 30,021
RIVER DIAMONDS
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE PERIOD ENDED 29 FEBRUARY 2008
Six Six Twelve
months months months
to 29 February to 28 February to 31 August
2008 2007 2007
(unaudited) (unaudited) (audited)
� � �
Loss for period (585,680) (504,009) (982,111)
Currency translation 5,561 9,829 (27,945)
differences
Total losses 580,119 (494,180) (1,010,056)
RIVER DIAMONDS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 FEBRUARY 2008
1. Basis of preparation
The interim financial information for the period 1 September 2007 to 29 February 2008 has been prepared on the basis of the accounting
policies set out in the August 2007 annual report and accounts.
The interim report is unaudited and does not constitute financial statements. The financial information for the period ended 29 February
2008 does not constitute statutory accounts, as defined in section 240 of the Companies Act 1985. The Group's financial statements for the
year ended 31 August 2007, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies.
The interim report for the six months ended 29 February 2008 was approved by the Directors on 30 May 2008.
2. Segmental information
Six Six Twelve
months months months
to 29 February to 28 February to 31 August
2008 2007 2007
(unaudited) (unaudited) (audited)
� � �
Turnover
United Kingdom - - -
Brazil 54,366 9,112 28,106
Sierra Leone - - -
54,366 9,112 28,106
Gross profit
United Kingdom - - -
Brazil 46,404 8,212 23,990
Sierra Leone - - -
Total gross profit 46,404 8,212 23,990
3. Called up share capital
a) Authorised
29 February 2008 31 August 2007
� �
Authorised
1,500,000,000 ordinary shares of 0.1p 1,500,000 1,500,000
each
(2006: 750,000,000 Ordinary shares of
0.1p each)
Allotted, issued and fully paid
835,622,055 ordinary shares of 0.1p 1,088,062 835,622
each
(2006: 469,927,966 Ordinary shares of
0.1p each)
b) Share issues during the period
Note Issue value per Shares Share Capital Share premium
share � �
�
Share issue (i) 0.01 3,000,000 3,000 27,000
Share issue (ii) 0.015 250,000,000 250,000 3,500,000
253,000,000 253,000 3,527,000
(i) On 11 October 2007, 250,000,000 ordinary shares of 0.1p were issued for cash of 1.5p per share, representing a premium of 1.4p per
share.
(ii) On 13 November 2007, 3,000,000 ordinary shares of 0.1p were issued for cash of 1p per share, representing a premium of 0.9p per
share.
4. Investments
Group: Unlisted Investment
�
Cost
Balance brought forward 2,900,250
Additions 1,750,000
At 29 February 2008 4,650,250
Provision for diminution in value
Charge for the year -
At 29 February 2008 -
Net book value
At 29 February 2008 4,650,250
In October 2007, the Company increased its stake in Viso Gero Inc. ("VGI") from 12.5% to 20% for a consideration of �1,750,000, which
represented an indirect holding of 19% in the Vakaloula Gold Mine. VGI indirectly owns a 94% equity interest in the Vatukoula Gold Mine.
Details of the Company's subsequent acquisition of the remaining issued share capital of VGI are detailed in note 6 below.
5. Basic and diluted loss per ordinary share
The calculation of basic loss per share is based on loss after taxation of �585,430 (28.02.2007: �504,009; 31.08.2007: �982,111) and on
1,031,183,593 ordinary shares (28.02.2007: 469,927,966; 31.08.2007: 583,857,497), being the weighted average number of shares in issue
during the period.
In accordance with IAS 33, and as the Group has reported a loss for the period, diluted earnings per share is not included.
6. Post balance sheet events
On 3 March 2008, the Company issued and allotted 8,333,333 ordinary shares of 0.1p each pursuant to an exercise of warrants at an
exercise price of 1.3p and 7,750,000 new ordinary shares of 0.1p each pursuant to an exercise of warrants at an exercise price of 2p.
On 12 March 2008, Anthony Balme and Nicholas Shaw-Hardie resigned as Directors. In addition, David Lenigas agreed to provide his
services in an executive capacity, and accordingly has ceased to be treated as a non-executive director. Donald Strang was appointed as a
non-executive director on 12 March 2008.
On 1 April 2008, the Company acquired the remaining 80% of VGI not already held by it from Viso Gero Global Inc. As a result of this
acquisition, and the acquisition by VGI of the remaining 6% of Westech Gold Pty Ltd ("Westech"), River Diamonds now owns 100% of VGI and
indirectly, through Westech and its indirect subsidiaries, holds a 100% interest in the Vatukoula Gold Mine.
Purchase consideration (see below) �
Cash 903,000
Shares 28,658,000
Total purchase consideration 29,561,000
Fair value of net assets acquired 8,282,623
Intangible fixed assets acquired (mining rights)* 21,278,377
Goodwill -
* The assets and liabilities arising on the post balance sheet acquisitions have been provisionally determined.
The consideration payable for the acquisition consists of the issue of 477,633,333 new ordinary shares in River Diamonds at 6p per share
("Consideration Shares") and the payment of A$ 2,100,000 in cash.
On 1 April 2008, the Company raised gross proceeds of �4,669,000 following a placing at 6p per share.
John Stalker and Neil Herbert were appointed as non-executive directors of the Company with effect from 1 April 2008.
On 22 May 2008, the Company issued and allotted 13,333,332 new Ordinary Shares of 0.1p each pursuant to an exercise of warrants at an
exercise price of 1.5p per share and 3,000,000 new Ordinary Shares of 0.1p each pursuant to an exercise of warrants at an exercise price of
1p per share.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SDEFDSSASEFI
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