20th Jun 2007 07:02
Mwana Africa PLC20 June 2007 Unaudited Results for the year ended 31st March 2007 London, 20th June 2007 - The Board ("The Board"), of Mwana Africa plc ("Mwana")the pan-African resource company, is pleased to announce its unaudited financialresults for the year ended 31st March 2007. Financial Highlights: • Group turnover: £121.9m • Group profit before tax: £41.7m • Group profit after tax and minority interests: £21.9m • Earnings per share (diluted) of 8.31p • Operational cashflow, prior to capital expenditure and acquisitions: £7.1m • Capital expenditure and financial investment: £22.7m • Net cash at bank as at 31st March 2007: £38.1m • Received three interim dividends from Bindura Nickel Corporation ("BNC"), totalling US$7.5 million, and the fourth dividend payment of US$5 million in May 2007. Fifth and final dividend has been declared by BNC on 15th of June, which at the current exchange rate amounts to US$6.3 million, and is expected to be paid to Mwana in mid July Operational Highlights: • Nickel: •Capital expenditure of US$22 million to extend life of mine at BNC in Zimbabwe and to increase processesing capacity •Two mines at BNC are being deepened and a new concentrator is planned to be commissioned in early 2008 •Feasibility study is ongoing for new production at the Hunters Road project • Gold: •Investment of US$5.0 million committed for Phase One of the refurbishment programme of the Freda Rebecca Mine in Zimbabwe. Phase One is expected to be completed and production increased to a rate of 48,000 oz per annum by the end of 2007 •Regional LANDSAT interpretation and airborne geophysical survey at Zani-Kodo in the DRC are completed and operational conditions remain stable. The drilling programme is well underway and results are expected shortly •Planned follow-up drilling at Banka in Ghana with the purpose of testing the potential for open-pit mining •Completed drilling campaign at Ahanta with assays awaited • Copper/ Zinc: •Work to prove up Kibolwe prospect in the Katanga copper belt is in progress, there are indications of substantial copper mineralisation. Pre-feasibility study is planned with the objective of establishing a 10,000 to 20,000 tonne per annum copper operation, commencing production by the end of 2008 •Work is underway on a number of copper-cobalt targets around Kibolwe. Trenching on Mwombe, a nickel cobalt anomaly, is complete •Evaluation work is continuing on the remainder of the SEMKHAT licence • Diamonds: •Commenced negotiations with DRC Government for re-financing and restructuring of Societe Miniere de Bakwanga (MIBA) in which Mwana is a 20% shareholder •Successful completion of the acquisition of Gravity Diamonds Ltd. ("Gravity") in May 2007 has permitted an acceleration of the exploration work at the Kasai Craton and integration of the Gravity and Mwana exploration teams •Mwana is in the final phases of completing its offer document in connection with its intended Offer for SouthernEra Diamonds Inc. ("SouthernEra"). The combined diamond concessions of MIBA, Gravity Diamonds and SouthernEra, which are contiguous in the highly prospective Kasai Craton, would make Mwana a substantial concession holder in the area The exploration team at Mwana headed up by Dr Charl du Plessis is responsiblefor 26 separate exploration projects. Kalaa Mpinga, Chief Executive Officer of Mwana Africa, commented on the resultsannouncement: "This past year has been the busiest yet for Mwana. We have raised money, pushedforward and expanded our exploration programmes, invested in production upgradesand very importantly achieved a substantial pre tax profit. We can be confidentthe future pace of activity will continue and our challenge is to be highlydiscriminating in deciding which projects we should support and ensure that westeadily develop our world class exploration properties and grow our portfolioof profitable producing assets". Enquiries: Oliver Baring, Executive Chairman Tel: 020 7654 5588Kalaa Mpinga, Chief ExecutiveMwana Africa plc Tom Randell / Maria Suleymanova Tel: 020 7653 6620Merlin CHAIRMAN'S STATEMENT Looking back at the past year, if I were to sum up our achievements, I would saythat we have diversified our resource base; advanced our exploration programmes;consolidated our operations; posted improved financial results; and establisheda strong team in the technical and financial fields to take the company forward. In respect of adding diversity to our resources, the most noteworthy developmenthas certainly been our entry into the diamond industry. It started in the secondmonth of the financial year with our taking a 20% stake in MIBA in theDemocratic Republic of Congo (DRC). This was followed shortly afterwards by theacquisition of a 14.99% interest in Gravity Diamonds. Six months later weproposed a merger of Mwana Africa and Gravity Diamonds, which became effectivepost year-end, in May 2007. In March 2007 - the last month of the financial year- we sought to further strengthen our position in the diamond sector byannouncing our intention to launch a bid for SouthernEra Diamonds. Should thissucceed, it would mean that Mwana Africa would have a vast and contiguouslandholding in the prolific Kasai craton in the DRC and Angola. We are making great strides with our exploration activities. In the DRC, we havehad promising results from our drilling campaign for copper-cobalt at Kibolwe;drilling for gold mineralisation has started at Zani-Kodo; and reached agreementin principle with the wholly-owned subsidiaries of Anglo American Plc on theprincipal terms of a joint venture agreement to conduct exploration on twoportions - the NorthWest Block and Lombe properties - of Mwana Africa's SEMKHATexploration licence area in the Katanga copper belt. Not only does Mwana Africaretain a significant interest in these two properties, but it will gain fromhaving exploration accelerated in this area. In Ghana we are continuing with drilling on our gold prospects with theexploration programme at Banka the most advanced. As our exploration projects develop, we will report on these to the market,particularly in the current environment where investors are rightly demanding tobe kept up to date on the result of development and exploration work. Work is well underway to increase production at our operations in Zimbabwe,following a disappointing decline in production. The two mines that make up theBindura Nickel Corporation are being deepened and a new concentrator is to bebuilt while the refurbishment of Freda Rebecca will see gold output doublingduring 2008. Given the current conditions in Zimbabwe, it is not surprising thatour shareholders ask about the wisdom of our making further investments in theseassets. From an operating and mining perspective Zimbabwe remains an attractiveplace in which to do business although the hyperinflationary financialenvironment does present serious challenges. Mwana Africa has benefited fromhealthy dividend payouts from these operations, and they have continued toprovide livelihoods for the many employees of these companies, and thecommunities they support. This brings me to our results for the 2007 financial year, which show a pre-taxprofit of £41.7 million. We knew from the outset that having the right people in place would be crucialif we were to build a successful pan-African resources group. Shortly after theformation of Mwana Africa, we appointed Ken Owen as Technical Director and, inApril 2006, Dr Charl du Plessis as Vice President: Exploration. A more recentappointment is that of Braam Jonker as Financial Controller, based in London.All three are highly skilled individuals with a wealth of experience in thetechnical and financial fields. We are looking forward to an exciting period in the history of our youngcompany. With our stake in MIBA, our acquisition of Gravity Diamonds andprogressing our proposed bid for SouthernEra, we have what is required to becomea substantial diamond miner in the DRC and we believe there is a largeropportunity to create a sizeable diamond exploration and production businessacross central and southern Africa. The refinancing of MIBA forms part of thisplan and our discussions with the Congolese government, our partner in this keyoperation, are ongoing. Our prospects in other resources are looking promising all the more so becausethe world's appetite for these commodities, whether for industrial or investmentpurposes, does not appear to be waning. Global demand for copper, nickel andother base metals looks set to remain robust. Mwana Africa is well on the way to becoming a serious resources company on theAfrican continent. This would not have been possible without the magnificentcontribution of our Board and management. I am sure that the year to come willsee further significant strides being made towards the achievement of this goal. REVIEW BY THE CHIEF EXECUTIVE OFFICER During the past year the foundations have been firmly laid for Mwana Africa tobecome a significant multi-commodity producer. This has happened through anumber of strategic acquisitions and by developing the resources we had when thecompany was restructured in September 2005. Growth and diversity DiamondsWhile gold and base metals remain core to our company, diamonds have become animportant and strategic part of Mwana Africa's portfolio. Our entry point camein May 2006 when we acquired a 20% interest in MIBA, currently the leadingdiamond producer in the DRC and historically one of the largest industrialdiamond operations in the world. The government of the DRC, our partner in thisventure, holds the balance. Two months later we acquired a 14.99% stake in Australian firm Gravity Diamondswith exploration interests in the DRC and Australia. This was concluded, in May2007, by a merger with that company, now a wholly owned subsidiary of MwanaAfrica. We are currently undergoing an integration process and will undertake astrategic review of each of the acquired assets during fiscal 2008. In March 2007 we announced our intention of making a share exchange take-overbid for SouthernEra, a Canadian-based company with diamond exploration projectsin the DRC, an 18% carried interest in the Camafuca kimberlite in Angola, a 57%interest in the Klipspringer diamond mine in South Africa and advanced diamondexploration projects in Canada. This process is still under way. The diamond concessions of MIBA, Gravity Diamonds and SouthernEra are contiguousin the highly prospective Angola - DRC Kasai Craton. By combining these assets,Mwana Africa would become a significant concession holder in the Kasai Cratonand an important player in the diamond industry on the African continent. We have also gained a strong exploration team from Gravity Diamonds that,together with our existing technical team, will complement our in-depthexperience in project development and construction in our core markets inAfrica. Developing assets We have made considerable progress in developing and consolidating ourexploration properties and operations during the financial year. Copper-cobaltWith regard to base metals, we have concentrated on two areas. The first is our100% owned Kibolwe prospect in the Katanga copper belt where we have continuedwith an infill drilling programme. The first assay results are encouraging,indicating a substantial copper mineralisation. A pre-feasibility study isplanned with the objective of establishing a 10,000 to 20,000 tonne per annumcopper operation to commence production by the end of 2008. The second has been the area surrounding Kibolwe where a number of promisingtargets have been identified and which we are currently preparing for drilling.In addition, some interesting Nickel and Cobalt anomalies have been identifiedand trenched at Mwombe some 40 km North-East from Kibolwe. A regional survey toidentify further targets on the remainder of the ground held through SEMKHAT isprogressing well. NickelAt the Bindura Nickel Corporation in Zimbabwe we are forging ahead with projectsto improve capacity and to extend the lives of the Trojan and Shangani mines.While the shaft at Trojan is being deepened to access new reserves, a conveyordecline is being developed at Shangani to access deeper ore. The construction ofa new concentrator at Trojan is progressing well and should be commissioned inearly 2008. We are also investigating the expansion of the nickel refinery totake advantage of historically high nickel prices and the re-establishment ofthe copper recovery circuit. Finally we are completing a feasibility study forthe Hunters Road Project. It is our intention to underpin the long termviability of BNC by both proving up reserves and enhancing long term productioncapacity. GoldTurning to gold, we have started the first phase of exploration at Zani-Kodo inthe DRC, part of the Kilo Moto Joint Venture, and have commenced a drillingprogramme to assess mineralisation at the old workings. We have also completedan airborne geophysical survey which is currently being interpreted. At Banka in Ghana, a drilling exercise has returned promising results and we arenow at the stage of planning follow-up drilling with the purpose of testing thepotential for open-pit mining. Also in Ghana, we have completed a drillingcampaign at Ahanta and are assessing the results, while at Konongo severaltargets are close to being drill-ready. Phase One of the rehabilitation programme to increase production at FredaRebecca mine in Zimbabwe to 48,000 ounces per annum is well underway and thecurrent schedule anticipates reaching that production rate by the end of 2007.Phase Two of the programme will seek to further increase production to 90,000ounces per annum by expanding ore processing from underground sources and fromsurface mining. Phase Two is expected to be completed by the second quarter of2008. DiamondsIn respect of diamonds, our stake in MIBA is a major focus of our attention.MIBA owns the Mbuji-Maya mine where historical production has been around 6million carats of diamonds per annum. Over the past year, MIBA has seen asignificant drop in its production and the operation is in need of significantinvestment. With refurbishment, additional capital investment and properexploration funding, we believe the mine has the potential to produce 8 to 10million carats of diamonds per annum and could become a major diamond producingoperation. Mwana Africa has started discussions with its partner in MIBA, theDRC government, on a re-financing and restructuring exercise. The negotiationsare complex so we anticipate that the process will take some time to complete. Going where the orebody is It is appropriate at this juncture to talk about country risk. Inevitably, ourpositioning of Mwana as a pan-African resources company attracts questions aboutthis issue. It is a fact, however, that mining companies must go where theorebodies are, and where the opportunity lies to develop them at a reasonableentry point on the value curve. It must be said, of course, that one's view ofrisk is also dependent on where one is sitting at the time. Our view continuesto be that the DRC and Zimbabwe are countries with enormous potential fordevelopment and positive change. The elections in the DRC in 2006 affected us directly as our drilling programmein Kibolwe was interrupted for about two months. Overall, however, the progressmade in the DRC has been remarkable and, in spite of the logistical difficultiesof holding elections in such a vast and underdeveloped country and the isolatedoutbreaks of unrest that occurred, it does appear that the way has been preparedfor the DRC to enter an era of greater peace and stability and economicdevelopment. It is also worth highlighting that all our exploration assets in the DRC, withthe exception of Kilo Moto joint venture, are 100% owned by Mwana, and hencethere is less uncertainty than with other concessions about the possible impactof the current licence review process, ongoing in the DRC. We cannot deny that the situation in Zimbabwe is challenging. Our biggestproblem is dealing with hyperinflation because of the vast mismatch betweenrevenues and costs. However, we maintain a good relationship with the ReserveBank of Zimbabwe and recognise that it has been doing its best to create thesort of environment for exporters in which the effects of hyperinflation can bemitigated to some extent. Another problem that we have encountered is the lossof skilled workers to other countries - to Zambia, the DRC, Botswana, SouthAfrica, the UK, New Zealand and other countries in the world, as a result ofboth the political uncertainties in Zimbabwe and the global mining boom. We understand the concerns of investors but we remain deeply committed todeveloping our assets in Africa. It is through companies such as ours -companies that provide employment opportunities and help to build up thecommunities surrounding their operations - that countries like the DRC andZimbabwe will be able to progress to the considerable benefit of their peopleand other stakeholders. The solution does not lie in simply pulling investmentout of areas when conditions become difficult. The point also needs to be made that we have put considerable effort intoassembling a team with vast experience of mining in African countries. Thisexperience is proving to be invaluable and enables us to make informedinvestment decisions and then put our development plans into action. Going forward We feel very positive about the next two years, a period we expect to be full ofactivity and, we hope, a time of significant achievement. During this period weexpect to start the construction of a copper mine at Kibolwe and very possiblyanother operation in the DRC where several exploration programmes are welladvanced as indicated above. We will complete the refurbishment of Freda Rebecca during this time frame andwill have started on the development of a nickel mine at the Hunters Roaddeposit - the concession area that Bindura holds in central Zimbabwe - whereexploration is progressing apace. It is also our intention to have progressed with our plans for MIBA and theSouthernEra diamond assets by the end of 2008, should our planned formal bid besuccessful. Unquestionably, we will continue to look for new opportunities across thecontinent of Africa where we see many opportunities. We also remain interestedin maintaining and even extending our geographical and commodity diversity. We have successfully concluded an exceptionally busy year and I would like tothank our dedicated workforce for their tireless efforts and enthusiasm. I knowthat I can count on their wholehearted support and commitment in the year ahead. Unaudited consolidated profit and loss account for the year ended 31 March 2007 2007 2006 £000 £000 GROUP TURNOVER 121,860 25,106 Cost of sales (63,737) (12,908) --------------- ---------------GROSS PROFIT 58,123 12,198 Administrative expenses (27,448) (9,710) --------------- ---------------OPERATING PROFIT 30,675 2,488 Interest receivable and similar income 11,106 225 Interest payable and similar charges (46) (948) --------------- ---------------PROFIT ON ORDINARY ACTVITIES BEFORE TAXATION 41,735 1,765 Tax on profit on ordinary activities (2,383) (700) --------------- ---------------PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 39,352 1,065 Minority interests (17,473) (1,165) --------------- ---------------PROFIT / (LOSS) FOR THE FINANCIAL YEAR 21,879 (100) =============== =============== EARNINGS/(LOSS) PER SHARE- Basic 9.03p (0.11p)- Diluted 8.31p (0.11p) The profit on ordinary activities after taxation for the current and prior yeararose on continuing operations. Unaudited consolidated balance sheet as at 31 March 2007 Note 2007 2006 £000 £000FIXED ASSETSIntangible assets 15,099 12,980Tangible assets 68,541 65,365Investments 12,009 - --------------- --------------- 95,649 78,345 --------------- ---------------CURRENT ASSETSStocks 12,211 8,773Debtors 22,891 9,455Short-term investments 2,369 -Cash at bank and in hand 38,086 14,311 --------------- --------------- 75,557 32,539CREDITORS: amounts falling due within (4,793) (14,037)one year --------------- ---------------NET CURRENT ASSETS 70,764 18,502 --------------- ---------------TOTAL ASSETS LESS CURRENT LIABILITIES 166,413 96,847Provision for liabilities (3,994) (3,356) --------------- ---------------TOTAL ASSETS LESS LIABILITIES 162,419 93,491 =============== =============== CAPITAL AND RESERVESCalled up share capital 4 24,917 17,938Share premium account 5 250 54,116Profit and loss account 5 98,461 (3,547) --------------- --------------- 123,628 68,507Minority interest 38,791 24,984 --------------- ---------------SHAREHOLDERS' FUNDS - EQUITY 162,419 93,491 =============== =============== Unaudited consolidated cash flow statement for the year ended 31 March 2007 2007 2006 £000 £000 Cash flow from operating activities 7,092 4,000Returns on investments and servicing of finance 11,060 (723)Taxation (3,398) (493)Dividends paid to minority shareholders (351) -Capital expenditure and financial investment (22,668) (4,414)Acquisitions and disposals (5,739) (4,366) ------------- ---------------Cash outflow before financing (14,004) (5,996)Financing 39,930 17,153 ------------- ---------------Increase in cash in the period 25,926 11,157 ============= =============== RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET CASH Increase in cash in the period 25,926 11,157Net cash at the start of the year 12,089 932Exchange rate movement in cash at the start of the 48 -year ------------- ---------------Net cash at the end of the year 38,063 12,089 ============= =============== Unaudited consolidated statement of total recognised gains and lossesfor the year ended 31 March 2007 2007 2006 £000 £000 Profit/(loss) for the financial year 21,879 (100)Net exchange differences on the retranslation (7,749) 941of net investments ---------------- ----------------Total recognised gains relating to the 14,130 841financial year ================ ================ Reconciliation of movements in shareholders' funds for the year ended 31 March 2007 Group 2007 2006 £000 £000 Profit/(loss) for the financial year 21,879 (100)Credit in relation to share based payments 1,062 674New share capital subscribed (net of issue 41,001 60,318costs)Net exchange differences on the retranslation (7,749) 941of net investmentsPurchase of own shares (1,072) - ---------------- ----------------Net addition to shareholders' funds 55,121 61,833Opening shareholders' funds 68,507 6,674 ---------------- ----------------Closing shareholders' funds 123,628 68,507 ================ ================ Notes to the unaudited financial statements 1. Basis of preparation The financial statements have been prepared under the historical costconvention, and in accordance with applicable laws and accounting standardsgenerally accepted in the United Kingdom. During the year, the Directors amended the estimate of the exchange rate forconsolidating balances and transactions originating in Zimbabwean dollars. Thischange in accounting estimate is described in more detail below and had nomaterial impact on either the balances as at 31 March 2006 or the results forthe year ended on that date. 2. Foreign currencies Transactions in foreign currencies are recorded using the rate of exchangeruling at the date of the transaction. Monetary assets and liabilitiesdenominated in foreign currencies are translated using the contracted rate orthe rate of exchange ruling at the balance sheet date and the gains or losses ontranslation are included in the profit and loss account. Other exchangedifferences are dealt with in the profit and loss account. The assets and liabilities of overseas subsidiary undertakings are translated atthe closing exchange rates. Profit and loss accounts of such undertakings areconsolidated at the average rates of exchange during the year. Gains and lossesarising on these translations are taken to reserves, net of exchange differencesarising on related foreign currency borrowings. 3. Foreign currencies - hyper-inflationary economies The Group has certain operations in Zimbabwe, which has a hyper-inflationaryeconomy. The Group's policy is to apply UITF 9 Accounting for Operations inHyper-Inflationary Economies in respect of these subsidiaries. In consolidating the Zimbabwean subsidiaries, the Group applies the stablecurrency method under UITF 9, whereby the transactions denominated in Zimbabweandollars and other currencies are translated into US dollars at the rateprevailing at the date of the transaction or the average exchange rate asappropriate. Monetary assets and liabilities are retranslated into US dollarswith the resulting exchange differences recorded in the profit and loss account. In translating Zimbabwean dollar transactions into US dollars, the Group haschanged the basis on which it estimates the exchange rate used. In the prioryear and for the interim accounts ending 30 September 2007, the officialexchange rate of US dollar 1 to Zimbabwean dollar 250 was used. In preparingthe 2007 annual financial statements, the Group used the Old Mutual rate, ratherthan the official rate, since the Old Mutual rate gives a more accuraterepresentation of the purchasing power of Zimbabwean dollars. The assets andliabilities and profit and loss accounts of overseas undertakings in Zimbabweare then translated into the reporting currency as described above. The Old Mutual rate is calculated by dividing the Old Mutual Plc share price onthe Harare Stock Exchange by the Old Mutual Plc share price on the London StockExchange. The Directors note that, since the official exchange rate is notfreely floating, it does not reflect the impact of the hyper-inflationaryeconomy on the value of the Zimbabwean dollar. The Group has applied an average of the Old Mutual rate during the year totransactions denominated in Zimbabwean dollars and recorded in the profit andloss account. The effective rate is Z$3,048 to US$1. The Group has applied a rate of Z$15,287 to US$1 to the assets and liabilitiesdenominated in Zimbabwean dollars. This rate reflects the market correction inthe Old Mutual rate during April 2007 and the movement in the official exportprice shortly after the financial year-end, in order to give the most accurateestimate of the value of the Zimbabwean dollar against the US$ for the periodunder review. This change in accounting estimate had no material impact on either the balancesas at 31 March 2006 or the results for the year ended on that date. 4. Called up share capital 2007 2006 £000 £000Authorised553,000,000 ordinary shares of 10p each (2006: 55,300 27,650276,500,000 ordinary shares of 10p) ========= ============== Allotted, called up and fully paidOpening balance 179,376,154 ordinary shares of 10p each 17,938 3,124(2006: 312,397,889 ordinary shares of 1p each) Issued during the previous year prior to the shareconsolidation5,000,000 ordinary shares of 1p each - 50 Issued during the year (previous year after the shareconsolidation)69,794,500 (2006: 147,636,366) ordinary shares of 10p 6,979 14,764each ________ ___________ Closing balance 249,170,654 (2006: 179,376,154) 24,917 17,938ordinary shares of 10p each ========= =========== At the Extraordinary General meeting on 25 October 2005, the shareholdersapproved a share consolidation. The share consolidation took effect followingthe close of business on 25 October 2005, with shareholders receiving one newordinary share of 10p for every 10 existing shares of 1p held at the close ofbusiness on 25 October 2005. Trading of the new ordinary shares of 10pcommenced on 26 October 2006. During the year, the Company issued 69,794,500 ordinary 10p shares (2006:5,000,000 1p shares and 147,636,366 10p shares) for a total consideration of£43,108,863 (2006: £60,318,000, of which £17,153,000 was settled in cash and theremainder issued for value). Movements in Issued Share Capital Date Event Issued price Number of shares Sterling £ 1 April 2006 Opening balance 179,376,15421 April 2006 Exercise of options 0.300 518,50026 April 2006 Exercise of options 0.388 1,099,0002 May 2006 Placing for cash 0.630 66,900,00020 June 2006 Exercise of options 0.156 27,00011 December 2006 Exercise of warrants 0.300 500,00018 December 2006 Exercise of warrants 0.300 750,000 -------------31 March 2007 Closing balance 249,170,654 ------------- 5. Share premium and reserves Group Share Profit & Loss premium account --------------------------------------------------------------- Treasury stock Share based Translation Retained Total payments earnings Profit & Loss Reserves £000 £000 £000 £000 £000 £000 At beginning of 54,116 - 674 940 (5,161) (3,547)yearProfit for the - - - - 21,879 21,879yearCredit in - - 1,062 - - 1,062relation toshare based payments Premium on share 34,022 - - - - -issues, less expensesTransfer of (87,888) - - - 87,888 87,888share premium toreservesPurchase of own - (1,072) - - - (1,072)sharesExchange - - - (7,749) - (7,749)adjustments At end of year 250 (1,072) 1,736 (6,809) 104,606 98,461 At an Extraordinary General Meeting of the Company held on 9 November 2006,shareholders approved a special resolution to cancel the share premium accountof the Company. The cancellation became effective on 16 December 2006 uponregistration of the order of the High Court with the Registrar of Companies, atwhich date the balance of £87,888,000 on the account became a distributablereserve of the Company. 6. Post Balance Sheet Events a) Gravity Diamonds On 4 August 2006, the Group announced that it acquired 14.99% of the ordinaryshares of Gravity Diamonds Limited for consideration of £2.1m. Gravity is anAustralian diamond exploration company operating in the Democratic Republic ofCongo and Australia. In March 2007, the Company increased its holding inGravity to 17.54% at a cost of £776,000. On 21 May 2007, the Company announcedthat it had completed the acquisition of Gravity. b) SouthernEra Diamonds Inc On 16 March 2007, the Company announced its intention to make a share exchangetakeover offer ("Offer") to acquire all of the outstanding common shares ofSouthernEra Diamonds, Inc. ("SouthernEra") on the basis of one Mwana ordinaryshare for every 2.3333 SouthernEra common shares held. Since this time, Mwanahas been working with its financial and legal advisors and its independentaccountants and geologists to prepare the formal offering documents incompliance with the various regulatory and legal regimes in a number ofjurisdictions. As noted in the announcement of 8 June 2007, the Company iscommitted to completing the offering documents and to commencing the Offerformally as soon as practicable on the terms described in Mwana's announcementdated 16 March 2007. c) Bindura Nickel During May 2007 the Group received a fourth interim dividend from Bindura Nickelof approximately US$5.3m (Z$20 per share) excluding withholding tax and on 15June 2007 the Group was informed by Bindura Nickel that it would receive a finaldividend in respect of the 2007 financial year of Z$25 per share, which at theprevailing official exchange rate of the Zimbabwean dollar would be equal toapproximately US$6.6m excluding withholding tax. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Asa Resources