17th Sep 2008 11:39
RNS Number : 6287D
African Minerals Ltd
17 September 2008
17 September 2008
African Minerals Limited
(“African Minerals” or “the Company”)
2008 Interim Results
Exploration results continue to underline potential for world class iron ore deposit
African Minerals Limited (AIM: AMI), the mineral exploration company with significant interests in Sierra Leone, West Africa, is pleased to announce its interim financial results for the six months ended 30 June 2008 and an update on the Company’s progress.
Highlights
·; Tonkolili Iron Ore Project
– 28 km magnetite signature identified from aeromagnetic and ground mapping, up to 1.5 km wide;
– Magnetite iron ore mineralisation in banded iron formation ("BIF") at Tonkolili confirmed over significant strike lengths and widths by systematic drilling on three target areas;
– As at 30 August 2008, in excess of 38,000 metres of diamond drilling completed in a total of 114 diamond drill holes at the Numbara, Simbili and Marampon prospects, testing to approximately 400 metres vertical depth below surface with several holes terminating in mineralisation;
– High iron concentrate grades averaging approximately 68% Fe in magnetite concentrate iron ore product;
– Low levels of contaminants - silica (2,) alumina (2O3) and phosphorus (0.01% P);
– Capacity at Amdel Laboratories in Australia has now been expanded by the acquisition and commissioning of additional DTR equipment to expedite analysis of the Company's samples and with the expanded laboratory capacity, we expect to be able to update the market shortly with further metallurgical testwork results.
·; Marampa Iron Ore Project
– 20 km strike length of prospective BIF, with potentially large hematite deposits based on geophysical model;
– Disseminated and sub-massive specular hematite mineralisation intersected at Marampa, with significant intervals ranging from 23% to 30% Fe;
– Four diamond drill holes completed with results confirming extension of hematite mineralisation from the historical Marampa mine, where export records show 64% Fe product grades;
– Binding heads of terms signed on 1 September 2008 with ASX and AIM listed iron ore explorer, Cape Lambert Iron Ore Limited (“CLIO”). Under the terms, the Company will receive 44 million fully paid CLIO shares and CLIO will fund US$25 million towards the Marampa feasibility study for a 30% investment in Marampa Iron Ore Limited.
– As part of its due diligence exercise, CLIO prepared a bulk, composite sample from three of the four diamond drill holes. Summary results of a representative sub-sample taken from the bulk sample demonstrated that the Fe mineralisation could be upgraded to a premium product (+65% Fe & ≤2% SiO2).
·; Key Engineering Projects
– Survey work started on Pepel Port facilities after Government of Sierra Leone gave go-ahead in line with exclusive Memorandum of Understanding announced on 6 May 2008;
– RSG Global - Coffey Mining Pty Ltd appointed to undertake critical components of the definitive feasibility study for the Tonkolili Iron Ore Project;
– SENET commissioned to begin work on port infrastructure engineering;
– Scott Wilson Railways commissioned to carry out railway infrastructure engineering studies, including upgrade of existing Pepel to Marampa railway and extension from Marampa to Tonkolili at Standard Gauge.
·; Acquisition of White River Resources
– On 14 April 2008, the Company acquired the entire share capital of White River Resources Inc. (“WRR”), a privately held Canadian company conducting an exploration programme on nickel and platinum group element mineralisation. WRR owns significant mineral claim interests and rights to earn-in mineral claims in the Yukon, Canada;
– The property covers approximately 30 km of strike of the Kluane mafic-ultramafic belt, which is believed to be the second largest in North America;
– Historical sampling and drilling activities have indicated several zones of mineralisation with grades in grab samples of 4.69% nickel and 6.82g/t PGEs with some spectacular grades of 16.9% nickel and 18.1% copper.
·; Other Exploration Activities
– Gori Hills Nickel target – extensive nickel-cobalt anomalism identified by soil sampling programme, with over 100 samples featuring nickel values greater than 0.10%, with a maximum value of 0.78% nickel and 0.11% cobalt;
- Lovetta Uranium anomaly – priority target of approximately 160 km2 with encouraging scintillometer survey results received;
- Alluvial diamond bulk sampling programme – gross proceeds of US$2.5 million (US$2.2 million net) received in the period from the sale of rough diamonds produced during the programme. A total of 7,218.86 carats were sold at an average of US$345.84 per carat.
·; Investments and Finance
– On 13 May 2008, the Company announced that it had acquired 11,425,000 fully paid ordinary shares in Baobab Resources plc, an AIM-listed company (AIM: BAO) with a balanced portfolio of projects in the Republic of Mozambique. Baobab has exclusive licencing over projects at varying stages of development, ranging from advanced resource definition drill targets to brownfield exploration, and greenfield prospects targeting an array of commodities;
– Cash at bank and short term deposits as at 30 June 2008 was US$24.4 million.
·; Licencing
– On 7 May 2008, the Government of Sierra Leone confirmed the validity of all mineral licences held by companies in the African Minerals Limited group (“the Group”). Exploration work on certain licences has not revealed significant mineral anomalies and the Group is in the process of relinquishing licences over these less attractive areas;
– On 8 September 2008, the Company made an announcement with regards to a newspaper article and a London Mining plc (“London Mining”) press release dated 7 September 2008. The Government of Sierra Leone ("GoSL") has, on a number of occasions, confirmed to African Minerals and to London Mining that African Minerals' co-ordinates in respect of African Minerals' Exploration Licence EXPL 09/06 are both correct and valid and that London Mining's claims to land outside their Mining Lease (ML 02/05) are invalid. The most recent confirmation was contained in a letter to London Mining and African Minerals from the GoSL dated 5 September 2008 (received 8 September 2008). A copy of this letter was included with our announcement and can be found through our website.
·; Key Management Appointments
Mr. Mark Ashurst and Lord Truscott were appointed Non-Executive Directors of the Company effective 22 January 2008 and 8 April 2008, respectively.
These appointments reinforce the Company’s commitment to good corporate governance and independent representation on the Board.
Commenting on the results, Frank Timis, Executive Chairman said:
“Exploration results at Tonkolili further demonstrate that our flagship project has the potential to become a world-class iron deposit. At the Marampa project, where the Company has recently established a strategic agreement with Cape Lambert, early exploration results suggest the potential for significant iron mineralisation. In parallel with the rapid progress made at the iron ore projects, we are pleased to have engaged industry recognised engineering professionals essential for the Tonkolili feasibility study, scheduled for completion next year.”
“We are grateful to the Government of Sierra Leone for its recent licence review as it has brought clarity and certainty to licence holdings providing us with the confidence to expedite our exploration and development plans.”
ENQUIRIES:
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African Minerals Limited
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Tel: +44 (0) 20 7849 3002
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Frank Timis, Executive Chairman
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Roy Pitchford, Chief Executive Officer
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Canaccord Adams Limited
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Tel: +44 (0) 20 7050 6500
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Mike Jones
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Mirabaud Securities Limited
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Tel: +44 (0) 20 7878 3360
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Rory Scott
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Citigate Dewe Rogerson
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Tel: +44 (0) 20 7638 9571
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Media enquiries: Martin Jackson
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Analyst enquiries: George Cazenove
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Notes:
The information in this report relating to exploration results is based on information reviewed by Marcus Reston, who is a Member of the Australian Institute of Geoscientists. Mr. Reston, Manager: Project Evaluation, is a full-time employee of the Company and meets the requirements of a “Qualified Person” under the AIM Guidance Note on Mining, Oil and Gas dated March 2006. Mr. Reston has consented to the inclusion of this information in the form and context in which it appears in this report.
Some statements in this news release are forward looking and consequently involve uncertainties and risks that could cause actual results to differ materially from those anticipated from initial indications. Such forward looking statements include comments regarding exploration work.
It should be noted that potential quantities in this report are conceptual in nature and insufficient exploration has been undertaken to define a Mineral Resource and it is uncertain if further exploration activities will result in the determination of a Mineral Resource.
NOTES TO EDITORS
African Minerals (AIM: AMI) is a mineral exploration company operating in the West African country of Sierra Leone. Since 1996, African Minerals has assembled the largest portfolio of mineral rights in Sierra Leone. Since its admission to AIM in 2005, the Company’s activities in Sierra Leone have evolved into diversified mineral exploration. In addition to the iron ore projects at Tonkolili and Marampa, the Company has for the past two years been undertaking a country wide, multi-element analysis of stream and till sediments, primarily to determine sources of diamonds. As a result of this programme, the Company has located several sites which offer the potential for the discovery of base, precious and minor metals.
Chairman’s Statement
I am very pleased to report rapid exploration and development progress at our iron ore projects during the period, as we move towards the completion of a definitive bankable feasibility at Tonkolili during 2009. Our ability to engage such credible engineering consultants during a period of such high demand in the industry speaks volumes about the quality of the project. Exploration activities at our nickel / cobalt, uranium, diamond and gold prospects have progressed and we are currently assessing the best method to achieve maximum value from these prospects. The Company also acquired White River Resources Inc. (“WRR”), a privately held Canadian company undertaking nickel and platinum group element exploration activities in the highly prospective Kluane mafic-ultramafic belt in the Yukon. WRR also owns significant mineral claim interests and rights to earn-in mineral claims along the Kluane belt. I believe the potential exists to realise significant value by combining our Gori Hills nickel / cobalt project in Sierra Leone with WRR’s, to create a significant nickel company.
During the period, we strengthened the Board and management of the Company with the appointment of Mark Ashurst on 22 January 2008 and Lord Peter Truscott on 8 April 2008 as Non-Executive Directors. These appointments reinforce the Company’s commitment to good corporate governance and independent representation on the Board. The appointments coincided with Mr. David Gadd-Claxton, President of Diamond Exploration and Production, resigning from the Company effective 21 January 2008 and Mr. Mike Wittet, Non-Executive Director, resigning from Company effective 8 April 2008. I would like to thank both David and Mike for their respective contributions to the Company. Their commitment during the Company’s evolution has been considerable and I wish them both all the best in their future endeavours.
In 2007, we started the geological and metallurgical analysis of our Tonkolili iron ore mineralisation in earnest. Surface trenching and geophysical magnetic surveys were carried out and an indicative strike of 28 km was defined. Following the airborne magnetic survey, the first of its kind flown over Sierra Leone, more than 78,000 metres of trench sampling was carried out and initial core drilling using lightweight rigs started mid-2007. After engaging the services of a leading drilling contractor and creating our own internal drill team, we had completed over 38,000 metres of diamond core drilling at Tonkolili as at 30 August 2008. To date, metallurgical results from the independent laboratory in Australia demonstrate export product grades in excess of 68% Fe can be achieved, containing low levels of contaminants. The exploration and metallurgical results thus far further underpin the view of our technical consultants that a conceptual mineralised envelope potentially containing in excess of two billion tonnes of contained iron ore exists at Tonkolili. We anticipate that further technical updates will be made shortly as the backlog of metallurgical testwork results become available.
The newly-elected Government of Sierra Leone (“GoSL”) recently completed a review of all mineral rights holdings within the country. Following this review the Company received formal written confirmation from the GoSL that all the Company’s mineral rights are valid and are in good standing. We appreciate the licence review process undertaken by the GoSL, as it gives us the confidence to undertake further significant investment into Sierra Leone and to expedite the development of our existing projects.
Iron Ore
Tonkolili Iron Ore Project
The Tonkolili iron ore deposit, located in the Sula Mountains Greenstone Belt of Sierra Leone, approximately 180 km from the Pepel deep water port near Freetown, is the key area of focus for African Minerals. The exploration target at Tonkolili, defined via aeromagnetic survey and ground mapping, has the potential to be a large-tonnage magnetite resource hosted in a Banded Iron Formation (‘BIF’). This style of mineralisation can be upgraded by simple magnetic separation to produce a magnetite iron ore fines product with high iron content and low silica and alumina contaminants. The resulting high grade magnetite concentrate is suitable for producing high quality iron ore pellets.
During 2007, more than 78,000 metres of channel sampling was completed over portions of the prospective strike length, verifying BIF and iron mineralisation. A 3-D geophysical inversion model was then completed by independent consultants, Resource Potentials of Perth, using the available geophysical and geological data.
The iron ore exploration programme has progressed rapidly with the implementation of a major diamond drilling programme in March 2008, focussing on the Numbara and Simbili prospects located at the southern end of the defined 28 km aeromagnetic anomaly. Several key infrastructure projects were commissioned by April 2008, to support the expanded drilling programme. These included construction of a modern camp, upgrade of the project access roads and construction of a sample preparation laboratory on-site under the management of Amdel Limited, a major Australian analytical services company. Five diamond drill rigs have been in operation and two reverse circulation drill rigs recently mobilised to site have also begun drilling. The current drilling programme is designed to determine iron ore mineralisation grade, continuity and size potential.
At 30 August 2008, in excess of 38,000 metres of diamond drilling had been completed in 114 drill holes at Tonkolili. Initially, drilling had been focused on the Numbara prospect, with 71 holes completed or in progress to date, totalling 24,393 metres. This drill programme is testing an area of approximately 2,000 metres in length by 500 metres to 900 metres in width. Recently, drilling commenced on the previously untested Simbili prospect, with 39 diamond drill holes completed, totalling 13,469 metres over an area of approximately 2,900 metres in length and 400 metres to 600 metres in width. Drilling at both prospects has tested an average vertical interval of 400 metres below surface with localised deeper drilling to 500 metres. Mineralisation remains open at depth below 400 metres vertical depth at both the Numbara and Simbili prospects. Drilling is also underway on the Marampon prospect area and planning is well advanced, with ongoing engineering work creating further drill site access and drill pad preparation.
The second phase of drilling has further confirmed magnetite mineralisation in BIF at both Numbara and Simbili over significant widths and strike lengths. The average magnetic concentrate from the significant BIF intersections at Numbara contain high iron (approximately 68% Fe), low silica (2), low alumina (2O3), and low phosphorus (0.01% P). While the Tonkolili drilling programme and sampling has progressed rapidly, drill hole analyses on magnetic concentrates were delayed due to insufficient laboratory capacity in Australia. This situation has been resolved by the acquisition and commissioning of additional DTR equipment to expedite analysis of the Company's samples and with the expanded laboratory capacity, we expect to be able to update the market shortly with further metallurgical testwork results.
The Company has appointed RSG Global – Coffey Mining Pty Ltd (“Coffey”) to undertake critical components of the definitive feasibility study for Tonkolili. Coffey has provided technical advice to the exploration and drilling programmes at Tonkolili and Marampa, including metallurgical sampling to ensure all procedures comply with internationally accepted standards of best practice. Coffey's extensive experience in these areas will also facilitate the timely completion of the feasibility study. The definitive feasibility study in respect of Tonkolili is scheduled to be completed during 2009.
Marampa Iron Ore Project
The Company’s Marampa iron ore project, located approximately 75 km from the Pepel deep water port, is contiguous with the historical Marampa mine operated by Delco between 1920 and 1970. Marampa is defined by the EXPL 09/06 exploration licence covering an area of 319 km2 and surrounds the Marampa iron ore mine lease.
African Minerals conducted magnetic and gravity geophysical surveys and interpretations over the Marampa prospect area in 2007. Interpretation of aeromagnetic and ground gravity surveys by Resource Potentials has defined 20 km of prospective strike extending out from the historical Marampa mine. The follow-up diamond drilling was programmed to target the anomalous gravity geophysical highs, which were interpreted to correlate with hematite mineralisation.
To date, four NQ diamond holes have been drilled by African Minerals on the southern gravity anomalies, for a total advance of 941 metres. Disseminated to sub-massive specular hematite mineralisation was intersected with iron grades ranging from approximately 23% to 30% Fe over broad, continuous intervals. These results confirmed the southern extension of the specular hematite mineralisation from the former Delco mining area.
On 8 September 2008, the Company made an announcement with regards to a newspaper article and London Mining plc (“London Mining”) press release dated 7 September 2008. The Government of Sierra Leone ("GoSL") has, on a number of occasions, confirmed to African Minerals and to London Mining that African Minerals' co-ordinates in respect of African Minerals' Exploration Licence EXPL 09/06 are valid and that London Mining's claims to land outside their Mining Lease (ML 02/05) are invalid. The most recent confirmation was contained in a letter to London Mining and African Minerals from the GoSL dated 5 September 2008 and received 8 September 2008. A copy of this letter was included with our announcement.
The Company announced on 1 September 2008, that it had entered into a binding term sheet with Cape Lambert Iron Ore Limited (“CLIO”) in respect of the Marampa project. Under the terms, CLIO is to make a 30% investment in Marampa Iron Ore Company and in return, the Company is to receive 44 million fully paid ordinary shares in CLIO. CLIO is to fund US$25 million towards the Marampa feasibility study.
As part of its due diligence investigations, CLIO prepared a bulk, composite sample from diamond core from three of the four reconnaissance drill holes for metallurgical test work. A representative sub-sample from the bulk sample was tested at independent laboratory, AMDEL Ltd to assess the potential to upgrade the hematite mineralisation to a saleable product. Summary results demonstrated that the Fe mineralisation could be upgraded to a premium product (+65% Fe & ≤2% SiO2).
Iron mineralisation at Marampa consists of specular hematite schists. Historically, the specular hematite schists have been upgraded to saleable Fe concentrates using simple crushing, coarse grinding and gravity separation. Sampling by CLIO of historical concentrate stockpiles at Pepel (produced from tailings dredging operations) returned grades of approximately 63% Fe, 7% SiO2 and 0.9% Al2O3.
The Company is conducting a comprehensive ongoing exploration program to assess the extent of known mineralisation, and, to test the prospectivity of the greater lease area for new discoveries.
Key Engineering Projects
Tonkolili and Marampa are located approximately 180 km and 75 km respectively from the Pepel deep water port, where suitable stockpiling and ship-loading infrastructure, last operated in the 1970s and owned by the Government of Sierra Leone, already exists. A disused railway also extends from Pepel to the former iron ore mine at Marampa.
On 6 May 2008, the Company announced that it had entered into an exclusive Memorandum of Understanding (“MoU”) with the Government of Sierra Leone, in respect of the Pepel deep water port, Marampa railway and Bumbuna hydro-electric power facilities. In accordance with the MoU, surveying of the existing land and buildings at Pepel Port is underway, prior to the preparation of cost estimates for rebuilding these facilities. SENET, a South African company with extensive project and construction experience in Africa, has been commissioned by African Minerals to undertake a study to rehabilitate and upgrade Pepel Port and its related infrastructure to accommodate up to 40 million tonnes per annum of iron-based products for export.
African Minerals has now completed its own independent preliminary study to rehabilitate the Port and Railway and has appointed Scott Wilson Railways to undertake a detailed engineering study on the rehabilitation and upgrade of the Pepel to Marampa Railway and the construction of a new railway line from Marampa to Tonkolili. Scott Wilson Group plc is an international consultancy offering integrated professional services in the transportation, property, environment and natural resources sectors. Scott Wilson Railways has extensive experience in railway design and construction throughout Africa and will be working in close association with SENET to ensure an efficient and cost effective bulk mineral export facility for African Minerals and other mining companies in Sierra Leone.
The MoU and subsequent engineering studies underlines the Company’s strong working relationship with the Government of Sierra Leone and commitment to improving the country’s infrastructure whilst securing the rail, port and power capacity requirements for our iron ore projects.
Other Exploration Activities
The Gori Hills prospect is a 20 km2 target where a nickel-cobalt anomaly has been identified by reconnaissance stream sediment sampling. Results from the first surface trenches excavated over this anomaly returned an average grade of 0.73% nickel and 0.061% cobalt over an interval of 56 m between depths of 1 m and 3.2 m. Drilling has commenced to test the potential for the supergene enriched nickel-cobalt mineralisation below surface and to identify a primary ultramafic body as a source of nickel.
The Lovetta uranium anomaly, located in eastern Sierra Leone near the Liberian border, comprises an area of 160 km2. In the immediate project area, seven anomalies of over 10 ppm uranium and over 450 counts per minute uranium have been identified by a programme of soil and scintillometer sampling over a four kilometre strike length. A trenching programme has delineated up to 150 metre strike length and widths of 66 m of anomalous uranium and thorium and is open in both directions. Exploration work during 2008 has incorporated detailed mapping, trenching and further definition of the uranium anomaly using ground radiometric infill.
Follow-up kimberlite exploration sampling activities continued in 2008 and the compilation of these results along with aeromagnetic survey data is being used to refine potential drilling targets. 13 high priority aeromagnetic targets, with coincident positive kimberlite grains and 10 high priority drainage targets, have been defined to form the basis of future kimberlite drilling programmes.
The Company continued with a cost-effective bulk sampling programme at the Konama alluvial diamond project during 2008, in order to define a sustainable economic resource. The Company completed a sale of rough diamonds recovered from the bulk sampling programme during the period, fully compliant with the Kimberley Process Certification Scheme. A total of 7,218.86 carats were sold during the period at an average price of US$345.84 per carat, realising gross sales proceeds of approximately US$2.5 million (US$2.2 million net).
Acquisition of White River Resources
On 14 April 2008, the Company acquired 100% of the share capital of White River Resources Inc., a privately held Canadian exploration Company with mineral claims and rights to earn-in mineral claims in the Yukon province on the Kluane ultramafic belt.
The Company believes that the Kluane belt is an area of significant potential and despite being largely under-explored, encouraging mineralisation has already been identified along with a small non-compliant resource. With the additional benefit of the Company being able to draw on experienced local expertise to advance the exploration project, communicate with indigenous groups and acquire additional mineral claims in the project area, we will be well positioned to add further shareholder value. This acquisition also provides us with geographical diversification within the base metals sector and will not in any way distract the Company from realising the full potential of its strong portfolio of assets in Sierra Leone.
Strategic Investment in Baobab Resources
On 13 May 2008, the Company acquired 11,425,000 fully paid ordinary shares in Baobab Resources plc (“Baobab”), an AIM-listed company (AIM: BAO) with a balanced portfolio of projects in the Republic of Mozambique. Baobab has exclusive long term tenure of 3,799 km2 with projects at varying stages of development, ranging from advanced resource definition drill targets to brownfield exploration, and greenfield prospects targeting an array of commodities.
Principal assets include the Tete Project, featuring Iron-Titanium-Vanadium mineralisation with the potential for high grade magnetite mineralisation to extend over a strike length of 25km andthe Mundonguara Project, a Copper-Gold-Nickel-Silver deposit with historic production.
Financial Review
The financial performance of the Company for the six month period to 30 June 2008 reflects expenditure on the Company’s country-wide, multi-element exploration portfolio in Sierra Leone and funding exploration activities at the White River Resources project in the Yukon, Canada.
The Company completed a sale of rough diamonds during the period and generated total net revenue of US$2.2 million.
Loss after taxation for six month period ended 30 June 2008 was US$11.4 million (2007: US$8.0 million). Loss per share was 7.24 cents (2007: 6.15 cents).
The total assets of the Group amounted to approximately US$126 million (2007: US$84 million) as at the period end, which includes intangible assets amounting to approximately US$70 million. Intangible assets relate to accumulated deferred exploration and evaluation costs in respect of the Company’s licence interests in Sierra Leone and Canada. The Company’s accounting policy is to capitalise these costs pending determination of the feasibility of the project to which they relate.
As at 30 June 2008, the Company had cash at bank and short-term deposits of US$24.4 million (2007: US$9.0 million).
Outlook
We are focused on expediting the Tonkolili iron ore project into its next phase of development by producing an industry compliant resource within the first quarter of 2009 and implementing engineering works on key infrastructure based on the studies currently underway. The definitive feasibility study at Tonkolili has been scheduled for completion in 2009. The results from the Marampa iron ore project are encouraging and the potential synergies derived from both iron ore projects could be significant. I believe the next twelve months will unlock considerable shareholder value as we move towards our strategy of becoming a significant iron ore producer. Key appointments will be made shortly, to ensure that we have appropriately qualified and experienced personnel to achieve our targets.
We are pursuing value adding strategies with regard to our other exploration activities that may include alliances and joint ventures with suitors. We are well advanced in the process of relinquishing certain licences in Sierra Leone, which have not revealed any significant mineral anomalies. This will allow us to focus both funding and resources on project areas which have the potential to add the most value.
Frank Timis
Executive Chairman
16 September 2008
AFRICAN MINERALS LIMITED
INDEPENDENT REVIEW REPORT TO AFRICAN MINERALS LIMITED
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2008 which comprises the consolidated income statement, the consolidated balance sheet, the consolidated cash flow statement, the consolidated statement of changes in equity and the related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with International Standard on Review Engagements 2410 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors’ responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules for Companies.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2008 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules for Companies.
SHIPLEYS LLP
Chartered Accountants
London, UK
16 September 2008
AFRICAN MINERALS LIMITED
CONSOLIDATED INCOME STATEMENT
For the six month period ended 30 June 2008
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Period ended
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Period ended
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Year ended
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30 June
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30 June
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31 December
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2008
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2007
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2007
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Note
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US$
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US$
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US$
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Revenue
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2,213,904
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7,492,811
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7,492,811
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Cost of sales
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(3,309,495)
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(10,038,104)
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(16,535,455)
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Gross loss
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(1,095,591)
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(2,545,293)
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(9,042,644)
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Impairment of intangible fixed assets
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-
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-
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(15,969,396)
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Net operating expenses
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3/4
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(11,112,698)
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(5,930,703)
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(17,331,654)
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Operating loss
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(12,208,289)
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(8,475,996)
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(42,343,694)
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Interest receivable
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849,765
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472,862
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1,608,884
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Loss before tax
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(11,358,524)
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(8,003,134)
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(40,734,810)
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Tax
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-
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-
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(1,520,562)
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Loss for the period
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(11,358,524)
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(8,003,134)
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(42,255,372)
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Loss per share
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Basic and diluted loss per share - cents
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5
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7.24
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6.15
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30.05
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All activities are continuing operations.
There were no recognised gain and losses other than those stated above.
AFRICAN MINERALS LIMITED
CONSOLIDATED BALANCE SHEET
At 30 June 2008
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30 June
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30 June
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31 December
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2008
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2007
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2007
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Note
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US$
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US$
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US$
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Non-current assets
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Intangible fixed assets
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6
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69,687,833
|
|
38,059,848
|
|
42,463,439
|
|
Tangible fixed assets
|
|
20,566,765
|
|
32,007,657
|
|
22,830,262
|
|
Investments
|
|
4,253,243
|
|
-
|
|
-
|
|
Deferred tax asset
|
|
-
|
|
1,520,562
|
|
-
|
|
Total non-current assets
|
|
94,507,841
|
|
71,588,067
|
|
65,293,701
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Inventories
|
|
1,175,734
|
|
2,181,388
|
|
2,607,033
|
|
Trade and other receivables
|
|
5,387,891
|
|
1,157,116
|
|
3,582,248
|
|
Short term investments
|
|
17,299,317
|
|
8,901,968
|
|
41,158,671
|
|
Cash and cash equivalents
|
|
7,134,150
|
|
94,582
|
|
3,002,816
|
|
Total current assets
|
|
30,997,092
|
|
12,335,054
|
|
50,350,768
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
125,504,933
|
|
83,923,121
|
|
115,644,469
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Share capital
|
7
|
1,601,007
|
|
1,300,582
|
|
1,552,582
|
|
Share premium account
|
|
175,386,578
|
|
101,190,334
|
|
161,811,643
|
|
Shares to be issued
|
|
2,370,906
|
|
-
|
|
-
|
|
Equity reserves
|
|
8,546,252
|
|
2,966,677
|
|
5,999,876
|
|
Translation reserve
|
|
(311,744)
|
|
(311,744)
|
|
(311,744)
|
|
Profit and loss account
|
|
(69,732,944)
|
|
(24,459,117)
|
|
(58,657,095)
|
|
Total equity
|
|
117,860,055
|
|
80,686,732
|
|
110,395,262
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
Provisions
|
|
669,587
|
|
438,962
|
|
669,587
|
|
Total non-current liabilities
|
|
669,587
|
|
438,962
|
|
669,587
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Trade and other payables
|
|
6,975,291
|
|
2,797,427
|
|
4,579,620
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
7,644,878
|
|
3,236,389
|
|
5,249,207
|
|
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
125,504,933
|
|
83,923,121
|
|
115,644,469
|
|
|
|
|
|
|
|
|
AFRICAN MINERALS LIMITED
CONSOLIDATED CASH FLOW STATEMENT
For the six month period ended 30 June 2008
|
|
|
Period ended
|
|
Period ended
|
|
Year ended
|
|
|
|
30 June
|
|
30 June
|
|
31 December
|
|
|
|
2008
|
|
2007
|
|
2007
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
|
(11,358,524)
|
|
(8,003,134)
|
|
(40,734,810)
|
|
Share-based payments
|
|
3,316,043
|
|
1,160,954
|
|
4,209,991
|
|
Depreciation of tangible fixed assets
|
|
3,074,819
|
|
2,433,576
|
|
5,124,775
|
|
Amortisation of intangible fixed assets
|
|
1,384,000
|
|
-
|
|
2,768,000
|
|
Impairment of intangible fixed assets
|
|
-
|
|
-
|
|
15,969,396
|
|
Loss on disposal of tangible fixed assets
|
|
-
|
|
-
|
|
20,121
|
|
Loss on disposal of intangible fixed assets
|
|
-
|
|
-
|
|
209,267
|
|
Increase in provisions
|
|
-
|
|
-
|
|
230,625
|
|
Interest received
|
|
(849,765)
|
|
(472,862)
|
|
(1,608,884)
|
|
Operating loss before working capital changes
|
|
(4,433,427)
|
|
(4,881,466)
|
|
(13,811,519)
|
|
Decrease/(increase) in inventories
|
|
1,431,299
|
|
(205,279)
|
|
(630,924)
|
|
Increase in trade and other receivables
|
|
(1,805,643)
|
|
(897,199)
|
|
(3,322,331)
|
|
Increase in trade and other payables
|
|
2,395,671
|
|
1,591,758
|
|
3,373,951
|
|
Net cash flow from operating activities
|
|
(2,412,100)
|
|
(4,392,186)
|
|
(14,390,823)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
Interest received
|
|
849,765
|
|
472,862
|
|
1,608,884
|
|
Proceeds of sales of tangible assets
|
|
-
|
|
-
|
|
12,485
|
|
Payments to acquire tangible assets
|
|
(811,322)
|
|
(3,406,131)
|
|
(9,153,970)
|
|
Payments to acquire intangible assets
|
|
(19,915,072)
|
|
(7,312,186)
|
|
(18,461,011)
|
|
Decrease/(increase) in short term deposits with banks
|
|
23,859,354
|
|
12,636,467
|
|
(19,620,236)
|
|
Net cash inflow/(outflow) from investing activities
|
|
3,982,725
|
|
2,391,012
|
|
(45,613,848)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Proceeds of ordinary share issue
|
|
-
|
|
-
|
|
60,604,336
|
|
Proceeds of exercise of options
|
|
1,111,612
|
|
-
|
|
307,395
|
|
Proceeds of exercise of warrants
|
|
1,449,097
|
|
-
|
|
-
|
|
Net cash inflow from financing activities
|
|
2,560,709
|
|
-
|
|
60,911,731
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
4,131,334
|
|
(2,001,174)
|
|
907,060
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
3,002,816
|
|
2,095,756
|
|
2,095,756
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
7,134,150
|
|
94,582
|
|
3,002,816
|
|
|
|
|
|
|
|
|
AFRICAN MINERALS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 30 June 2008
|
|
|
Share
|
|
|
|
Profit and
|
|
|
|
Share
|
premium
|
Shares to
|
Equity
|
Translation
|
loss
|
|
|
|
capital
|
account
|
be issued
|
reserves
|
reserves
|
account
|
Total
|
|
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
|
As at 1 January 2008
|
1,552,582
|
161,811,643
|
-
|
5,999,876
|
(311,744)
|
(58,657,095)
|
110,395,262
|
|
Allotments during the period
|
48,425
|
13,087,943
|
2,370,906
|
-
|
-
|
-
|
15,507,274
|
|
Share-based payments
|
-
|
-
|
-
|
3,316,043
|
-
|
-
|
3,316,043
|
|
Reserves transfer - options
|
-
|
-
|
-
|
(241,725)
|
-
|
241,725
|
-
|
|
Reserves transfer - warrants
|
-
|
486,992
|
-
|
(527,942)
|
-
|
40,950
|
-
|
|
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
(11,358,524)
|
(11,358,524)
|
|
As at 30 June 2008
|
1,601,007
|
175,386,578
|
2,370,906
|
8,546,252
|
(311,744)
|
(69,732,944)
|
117,860,055
|
|
|
|
|
|
|
|
|
|
|
As at 1 January 2007
|
1,300,032
|
101,056,581
|
-
|
1,940,026
|
(311,744)
|
(16,455,983)
|
87,528,912
|
|
Allotments during the period
|
550
|
133,753
|
-
|
-
|
-
|
-
|
134,303
|
|
Share-based payments
|
-
|
-
|
-
|
1,026,651
|
-
|
-
|
1,026,651
|
|
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
(8,003,134)
|
(8,003,134)
|
|
As at 30 June 2007
|
1,300,582
|
101,190,334
|
-
|
2,966,677
|
(311,744)
|
(24,459,117)
|
80,686,732
|
AFRICAN MINERALS LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six month period ended 30 June 2008
1. ACCOUNTING POLICIES
The interim financial statements, which are unaudited, have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” adopted by the International Accounting Standards Board (IASB). This interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the Annual Report for the year ended 31 December 2007 and any public announcements made by the Company during the interim reporting period.
The unaudited interim financial statements for the six months ended 30 June 2008 do not constitute statutory accounts and have been drawn up using accounting policies and presentation consistent with those applied in the audited accounts for the year ended 31 December 2007.
The financial information for the year ended 31 December 2007 has been extracted from the statutory accounts for that period. The auditors report for the year ended 31 December 2007 was unqualified.
The financial information for the six months ended 30 June 2007 has been extracted from the interim results released to 30 June 2007.
2. DIVIDENDS
No dividends were paid or proposed during the period.
3. SEGMENT REPORTING
|
|
|
Gold and
|
|
|
|
|
Business Segments
|
Iron Ore
|
base metals
|
Diamonds
|
Corporate
|
Total
|
|
2008
|
US$
|
US$
|
US$
|
US$
|
US$
|
|
|
|
|
|
|
|
|
Revenue
|
-
|
-
|
2,213,904
|
-
|
2,213,904
|
|
Operating loss
|
(595,123)
|
(19,503)
|
(5,599,623)
|
(5,994,040)
|
(12,208,289)
|
|
|
|
|
|
|
|
|
Interest receivable
|
-
|
-
|
-
|
849,765
|
849,765
|
|
Tax
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Loss for the period
|
(595,123)
|
(19,503)
|
(5,599,623)
|
(5,144,275)
|
(11,358,524)
|
|
|
|
|
|
|
|
|
Segment assets
|
30,718,239
|
16,236,693
|
44,993,794
|
33,556,207
|
125,504,933
|
|
Segment liabilities
|
279,433
|
1,409,526
|
610,602
|
5,345,317
|
7,644,878
|
|
|
|
|
|
|
|
|
Cash utilised in operations
|
(704,935)
|
1,046,486
|
161,120
|
(2,914,771)
|
(2,412,100)
|
|
Cash flows from investing
|
(12,753,435)
|
(6,794,737)
|
(1,119,466)
|
24,650,363
|
3,982,725
|
|
Cash flows from financing
|
-
|
-
|
-
|
2,560,709
|
2,560,709
|
|
Net movement in cash and cash equivalents
|
(13,458,370)
|
(5,748,251)
|
(958,346)
|
24,296,301
|
4,131,334
|
|
|
|
|
|
|
|
|
Capital expenditure on tangible assets
|
532,490
|
217,154
|
2,922
|
58,756
|
811,322
|
|
Capital expenditure on intangible assets
|
12,220,945
|
6,577,583
|
1,116,544
|
-
|
19,915,072
|
|
|
|
|
|
|
|
|
Depreciation of tangible fixed assets
|
579,518
|
20,851
|
2,431,065
|
43,385
|
3,074,819
|
|
Amortisation of intangible fixed assets
|
-
|
-
|
1,384,000
|
-
|
1,384,000
|
|
Impairment of tangible fixed assets
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Geographical segments
|
Sierra Leone
|
Canada
|
Bermuda
|
UK
|
Total
|
|
2008
|
US$
|
US$
|
US$
|
US$
|
US$
|
|
|
|
|
|
|
|
|
Revenue
|
1,884,186
|
-
|
329,718
|
-
|
2,213,904
|
|
|
|
|
|
|
|
|
Segment assets
|
83,040,492
|
9,044,856
|
32,931,342
|
488,243
|
125,504,933
|
|
Segment liabilities
|
2,251,615
|
924,757
|
4,250,923
|
217,583
|
7,644,878
|
|
|
|
|
|
|
|
|
Cash utilised in operations
|
(1,292,416)
|
855,467
|
(422,203)
|
(1,552,948)
|
(2,412,100)
|
|
Cash flows from investing
|
(20,445,567)
|
(280,224)
|
24,703,866
|
4,650
|
3,982,725
|
|
Cash flows from financing
|
-
|
-
|
2,560,709
|
-
|
2,560,709
|
|
Net movement in cash and cash equivalents
|
(21,737,983)
|
575,243
|
26,842,372
|
(1,548,298)
|
4,131,334
|
|
|
|
|
|
|
|
|
Capital expenditure on tangible assets
|
810,719
|
-
|
-
|
603
|
811,322
|
|
Capital expenditure on intangible assets
|
19,634,848
|
280,224
|
-
|
-
|
19,915,072
|
|
|
|
|
|
|
|
|
Depreciation of tangible fixed assets
|
3,057,819
|
-
|
-
|
17,000
|
3,074,819
|
|
Amortisation of intangible fixed assets
|
1,384,000
|
-
|
-
|
-
|
1,384,000
|
|
Impairment of tangible fixed assets
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
3. SEGMENT REPORTING (continued)
Geographical analysis of net operating expenses
|
Six month period ended 30 June 2008
|
Sierra Leone
|
Bermuda
|
UK
|
Total
|
|
|
US$
|
US$
|
US$
|
US$
|
|
|
|
|
|
|
|
Depreciation of tangible fixed assets
|
3,057,819
|
-
|
17,000
|
3,074,819
|
|
Amortisation of intangible fixed assets
|
1,384,000
|
-
|
-
|
1,384,000
|
|
Employee costs
|
-
|
267,203
|
929,856
|
1,197,059
|
|
Foreign exchange differences
|
54,452
|
(15,156)
|
15,229
|
54,525
|
|
Other operating charges
|
25,569
|
1,419,179
|
641,504
|
2,086,252
|
|
Share-based payments
|
-
|
3,316,043
|
-
|
3,316,043
|
|
|
4,521,840
|
4,987,269
|
1,603,589
|
11,112,698
|
|
|
|
|
|
|
|
Six month period ended 30 June 2007
|
Sierra Leone
|
Bermuda
|
UK
|
Total
|
|
|
US$
|
US$
|
US$
|
US$
|
|
|
|
|
|
|
|
Depreciation of tangible fixed assets
|
2,414,547
|
-
|
19,029
|
2,433,576
|
|
Employee costs
|
195,313
|
447,601
|
330,479
|
973,393
|
|
Foreign exchange differences
|
6,671
|
(169,365)
|
(8,039)
|
(170,733)
|
|
Other operating charges
|
-
|
822,396
|
845,420
|
1,667,816
|
|
Share-based payments
|
-
|
1,026,651
|
-
|
1,026,651
|
|
|
2,616,531
|
2,127,283
|
1,186,889
|
5,930,703
|
|
|
|
|
|
|
|
Year ended 31 December 2007
|
Sierra Leone
|
Bermuda
|
UK
|
Total
|
|
|
US$
|
US$
|
US$
|
US$
|
|
|
|
|
|
|
|
Depreciation of tangible fixed assets
|
5,083,201
|
-
|
41,574
|
5,124,775
|
|
Amortisation of intangible fixed assets
|
2,768,000
|
-
|
-
|
2,768,000
|
|
Loss on disposal of tangible fixed assets
|
-
|
-
|
20,121
|
20,121
|
|
Loss on disposal of intangible fixed assets
|
209,267
|
-
|
-
|
209,267
|
|
Employee costs
|
-
|
715,556
|
814,419
|
1,529,975
|
|
Foreign exchange differences
|
46,698
|
(609,166)
|
(2,631)
|
(565,099)
|
|
Other operating charges
|
1,238,460
|
1,603,420
|
1,192,744
|
4,034,624
|
|
Share-based payments
|
-
|
4,209,991
|
-
|
4,209,991
|
|
|
9,345,626
|
5,919,801
|
2,066,227
|
17,331,654
|
4. NET OPERATING EXPENSES
|
|
Period ended
|
|
Period ended
|
|
Year ended
|
|
|
30 June
|
|
30 June
|
|
31 December
|
|
|
2008
|
|
2007
|
|
2007
|
|
|
US$
|
|
US$
|
|
US$
|
|
|
|
|
|
|
|
|
Depreciation of tangible fixed assets
|
3,074,819
|
|
2,433,576
|
|
5,124,775
|
|
Amortisation of intangible fixed assets
|
1,384,000
|
|
-
|
|
2,768,000
|
|
Loss on disposal of tangible fixed assets
|
-
|
|
-
|
|
20,121
|
|
Loss on disposal of intangible fixed assets
|
-
|
|
-
|
|
209,267
|
|
Employee costs
|
1,197,059
|
|
973,393
|
|
1,529,975
|
|
Foreign exchange differences
|
54,525
|
|
(170,733)
|
|
(565,099)
|
|
Other operating charges
|
2,086,252
|
|
1,667,816
|
|
4,034,624
|
|
|
7,796,655
|
|
4,904,052
|
|
13,121,663
|
|
Share-based payments:
|
|
|
|
|
|
|
Options
|
3,283,433
|
|
1,026,651
|
|
2,414,055
|
|
Warrants
|
32,610
|
|
-
|
|
-
|
|
Fully-paid shares
|
-
|
|
-
|
|
1,795,936
|
|
|
3,316,043
|
|
1,026,651
|
|
4,209,991
|
|
|
11,112,698
|
|
5,930,703
|
|
17,331,654
|
5. LOSS PER SHARE
The calculation of loss per share is based on the loss for the six month period ended 30 June 2008 of US$11,358,524 (six month period ended 30 June 2007: US$8,003,134) and on a weighted average, during the six month period ended 30 June 2008, of 156,849,630 (six month period ended 30 June 2007: 130,054,898) common shares of $0.01 each in issue during the period. The diluted loss per share is the same as the basic loss per share.
|
|
Period ended
|
|
Period ended
|
|
Year ended
|
|
|
30 June
|
|
30 June
|
|
31 December
|
|
|
2008
|
|
2007
|
|
2007
|
|
|
US$
|
|
US$
|
|
US$
|
|
|
|
|
|
|
|
|
Loss for the period
|
(11,358,524)
|
|
(8,003,134)
|
|
(42,255,372)
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Shares
|
|
Shares
|
|
Basic weighted average number of common shares in issue
|
156,849,630
|
|
138,054,898
|
|
140,590,557
|
|
|
|
|
|
|
|
|
Basic loss per share - cents
|
7.24
|
|
6.15
|
|
30.05
|
6. INTANGIBLE FIXED ASSETS
|
|
|
|
|
|
US$
|
|
Cost
|
|
|
|
|
|
|
At 1 January 2008
|
|
|
|
|
61,200,835
|
|
Additions
|
|
|
|
|
28,608,394
|
|
As at 30 June 2008
|
|
|
|
|
89,809,229
|
|
Amortisation
|
|
|
|
|
|
|
At 1 January 2008
|
|
|
|
|
18,737,396
|
|
Charge for the period
|
|
|
|
|
1,384,000
|
|
As at 30 June 2008
|
|
|
|
|
20,121,396
|
|
Net book value
|
|
|
|
|
|
|
At 30 June 2008
|
|
|
|
|
69,687,833
|
|
At 31 December 2007
|
|
|
|
|
42,463,439
|
|
|
|
|
|
|
|
Intangible fixed assets comprise of the cost of purchasing mineral exploration licences and certain deferred exploration expenditures on the Company’s mineral licences located in Sierra Leone and Canada. The directors regularly assess the potential of each mineral licence and write off any deferred exploration expenditure that they believe to be unrecoverable.
7. CALLED UP SHARE CAPITAL
|
|
Number of
|
Period ended
|
|
Number of
|
Period ended
|
|
|
shares
|
30 June
|
|
shares
|
30 June
|
|
|
|
2008
|
|
|
2007
|
|
|
|
US$
|
|
|
US$
|
|
Authorised
|
|
|
|
|
|
|
Common shares of US$ 0.01 each
|
250,000,000
|
2,500,000
|
|
250,000,000
|
2,500,000
|
|
Preference shares of US$ 0.01 each
|
100,000,000
|
1,000,000
|
|
100,000,000
|
1,000,000
|
|
|
|
|
|
|
|
|
Issued and fully paid
|
|
|
|
|
|
|
At 1 January
|
155,258,241
|
1,552,582
|
|
130,003,241
|
1,300,032
|
|
Allotments during the period
|
4,842,500
|
48,425
|
|
55,000
|
550
|
|
At 30 June
|
160,100,741
|
1,601,007
|
|
130,058,241
|
1,300,582
|
i. On 11 April 2008, 150,000 new common shares were issued for consideration of US$341,895 on the exercise of share purchase warrants.
ii. On 14 April 2008, 1,500,000 new common shares a value of US$4,741,812 were issued to Umbono Capital Partners LLC on the completion of the acquisition of 100% of the issued share capital of White River Resources Inc. A further 500,000 new common shares with a value of US$1,580,604 were issued to Umbono on the same day as part of a Management Agreement for Umbono to manage White River Resources on behalf of the Group. An additional 750,000 new common shares with a value as at 14 April 2008 of US$2,370,906 are expected to be issued to Umbono on confirmation that additional mineral rights interests will have been secured within six months of the completion of the acquisition.
iii. On 29 April 2008, 50,000 new common shares were issued for consideration of US$128,830 on the exercise of share purchase warrants.
iv. On 8 May 2008, 150,000 new common shares were issued for consideration of US$340,895 on the exercise of share purchase warrants.
v. On 13 May 2008, 1,142,500 new common shares were issued with a value of US$4,253,243 on the completion of the acquisition of 10% of the issued share capital of Baobab Resources plc.
vi. On 15 May 2008, 500,000 new common shares were issued for consideration of US$378,075 on the exercise of share purchase warrants.
vii. On 23 May 2008, 750,000 new common shares were issued for consideration of US$1,111,612 on the exercise of share options.
viii. On 16 June 2008, 100,000 new common shares were issued for consideration of US$259,402 on the exercise of share purchase warrants.
8. EQUITY RESERVES
a.) OPTIONS
The Group has issued share options under a share option scheme adopted by the Group on 5 November 2004. Movements in share options over US$ 0.01 common shares in the Company in the period were as follows:
|
|
|
|
|
Number of options
|
|
As at 1 January 2008
|
|
|
|
10,601,154
|
|
Options granted in the period
|
|
|
|
2,450,000
|
|
Options lapsed in the period
|
|
|
|
(1,671,666)
|
|
Options exercised in the period
|
|
|
(750,000)
|
|
|
As at 30 June 2008
|
|
|
|
10,629,488
|
The stock-based compensation recognised as an expense in the period to 30 June 2008 was US$3,283,433 (2007: US$1,026,651). A transfer of US$241,725 was made from the equity reserve to the profit and loss reserve during the period (2007: US$nil). This represented the reversal of the charge made through the Income Statement prior to 2008 for options exercised during the period.
b.) WARRANTS
Movements in warrants over US$ 0.01 common shares in the Company in the period were as follows:
|
|
|
|
|
Number of warrants
|
|
As at 1 January 2008
|
|
|
|
2,325,000
|
|
Warrants granted in the period
|
|
|
-
|
|
|
Warrants lapsed in the period
|
|
|
|
-
|
|
Warrants exercised in the period
|
|
|
(950,000)
|
|
|
As at 30 June 2008
|
|
|
|
1,375,000
|
The stock-based compensation recognised as an expense in the period to 30 June 2008 was US$32,610 (2007: US$nil), representing the charge arising on the revision of the expiry date of 300,000 warrants from June 2008 to November 2008. In the period, a transfer of US$486,992 (2007: US$nil) was made from the equity reserve to the share premium account representing the reversal of the charge made against the share premium account prior to 2008 for warrants exercised in the period. Also in the period a transfer of US$40,950 (2007: US$nil) was made from the equity reserve to the profit and loss account reserve, representing the charge previously expensed through the Income Statement on warrants exercised in the period.
9. ACQUISITION OF WHITE RIVER RESOURCES
On 14 April 2008, the Company finalised its acquisition of 100% of the issued share capital of White River Resources Inc. The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value to the Group:
|
|
|
Book
|
|
Fair
|
|
|
|
value at
|
Fair value
|
value to
|
|
|
|
acquisition
|
adjustments
|
Group
|
|
|
|
US$
|
US$
|
US$
|
|
Intangible assets
|
|
858,381
|
6,238,747
|
7,097,128
|
|
Current assets
|
|
30,531
|
|
30,531
|
|
Total assets
|
|
888,912
|
6,238,747
|
7,127,659
|
|
|
|
|
|
|
|
Current liabilities
|
|
(14,941)
|
-
|
(14,941)
|
|
Total liabilities
|
|
(14,941)
|
-
|
(14,941)
|
|
|
|
|
|
|
|
Net assets
|
|
873,971
|
6,238,747
|
7,112,718
|
|
|
|
|
|
|
|
Consideration satisfied by:
|
|
|
|
|
|
Shares issued
|
|
|
|
4,741,812
|
|
Shares to be issued
|
|
|
|
2,370,906
|
|
|
|
|
|
7,112,718
|
|
|
|
|
|
|
10. POST BALANCE SHEET EVENTS
On 1 September 2008, the Company announced that it had entered into a binding term sheet with Cape Lambert Iron Ore Limited (“CLIO”) in respect of the Marampa iron ore project. Under the terms, CLIO is to make a 30% investment in Marampa Iron Ore Limited and in return, the Company is to receive 44 million fully paid ordinary shares in CLIO. CLIO is to fund US$25 million towards the Marampa definitive feasibility study. CLIO has also been granted an exclusive option to invest further in the Marampa Project by acquiring from the Company the outstanding shares in Marampa, resulting in Marampa becoming a wholly-owned subsidiary of CLIO, at a price of US$200 million, less the aggregate of (i) US$25 million and (ii) the value of the CLIO Shares as at the date of closing of the transaction. The option may be exercised at any time during the feasibility study period and for a period of three months immediately after its finalisation.
11. REPORTING JURISDICTIONS
The Company is a reporting issuer in certain Canadian jurisdictions. However, the company is a "designated foreign issuer" as defined in Canadian National Instrument 71-102 and is subject to foreign regulatory requirements, including those of the AIM market of the London Stock Exchange. As such, the company is exempt from certain requirements otherwise imposed on reporting issuers in Canada. In particular, financial statements of the company may be prepared under International Financial Reporting Standards or accounting principles that meet the non-Canadian disclosure requirements to which the company is subject.
12. INTERIM REPORT
The Interim Report is being sent to shareholders. In addition, copies will be available from the Company’s office at Suite F5, Hirzel Court, St Peter Port, Guernsey, GY1 2NW.
This information is provided by RNS
The company news service from the London Stock Exchange
Related Shares:
AMI.L