TIDMFLOR
RNS Number : 4059A
Fluormin PLC
30 March 2012
Fluormin plc
("Fluormin" or the "Company")
INTERIM REPORT AND ACCOUNTS FOR THE SIX MONTHS ENDED
31 DECEMBER 2011
CHAIRMAN'S STATEMENT
Chairman's Statement
Recent months have proven to be challenging for the Company,
with the Company's Witkop mine in South Africa facing operational
and cost pressures at a time where acid grade fluorspar prices have
declined substantially from the time of the Company's listing on
the AIM Market.
Management is actively considering a variety of options to
reduce costs and, in particular, an upgrade of ore feed into the
Witkop mill through the use of ore sorting technology. Subsequent
to the period end, the Company has disposed of its 20% interest in
Kenya Fluorspar Company Limited in order to secure additional
funding for the Company pending the outcome of ongoing sorting
technology trials. These trials, if effective, would lower the
operational costs of the Witkop mine by increasing the ore feed
head grade to the milling circuit. The economic viability of the
mine will be determined by the outcome of these trials.
Financial
For the six months to 31 December 2011, the Group recorded an
attributable loss of GBP4,323,000. This compares to an attributable
loss of GBP2,796,000 for the year ended 30 June 2011. After
accounting for attributable losses, net assets as at 31 December
2011 increased to GBP15,545,000 (from GBP5,976,000 as at 30 June
2011).
The net loss for the six months to 31 December 2011 includes an
impairment charge of GBP8,434,000 against the non-current assets of
Witkop. The impairment decision reflects the reduction in the fair
value of the assets of Witkop in light of the operational
challenges at the Witkop mine and the weaker outlook for Fluorspar
prices.
As at 31 December 2011, the Company had cash and cash equivalent
holdings of GBP8,197,000, trade and other receivables of
GBP1,249,000 and inventories of GBP4,172,000 (as compared to
GBP1,280,000, GBP89,000 and nil, respectively, as at 30 June 2011).
The Company also had loans to associates (Fluorone Trading Limited)
of GBP1,253,000 as at 31 December 2011.
Operational
Witkop produced 46,687 wmt of acid grade Fluorspar for the six
months ended 31(st) December 2011. 50,936 wmt of acid grade
Fluorspar were transported to Durban by rail and exported at
average prices in excess of US$429 per dmt.
Substantial efforts were made during the period to overcome
several challenges, including water shortages, power outages,
unplanned plant maintenance, lower than expected feed grade and
higher than expected stripping ratios. Water supply is now steady
and Eskom, the South Africa state supplier of electricity, has
undertaken efforts to improve the reliability of power supply to
the mine.
With respect to feed grade, the Company is undertaking a
substantial infill drill programme to reduce grade variability and
dilution. With respect to stripping, mining contractors were
retained during the period of December to March and have aided the
Company in removing substantial quantities of waste and
overburden.
Fluorspar Market
The global weakness in growth, accentuated by particular
weakness in aluminium consumption, contributed to the failure to
deplete inventory after a rapid restocking of inventory in the
summer of 2011. As a result, the immediate and mid-term market
outlook is negative with substantial inventory reported at Chinese
ports.
Fluormin plc
Interim Results for the six months to 31 December 2011
Operational Update
Witkop faced several operational challenges in achieving its
targeted name plate production. These have included water
shortages, power outages and lower ore grade to the plant, each of
which impacted on production. In addition, production was
interrupted by its annual shutdown for maintenance.
The outlook for further water shortages and power outages has
improved since 31 December 2011. In relation to the lower ore grade
to the plant, the Company has embarked on an extensive infill RC
drill programme to improve mine planning and grade control.
Whilst plant performance has been satisfactory, plant
availability has continued to impact production post 31 December
2011. Recent changes in the management of the engineering and
maintenance function are anticipated to improve plant
availability.
Operational Highlights for Fluormin to 31 December 2011
Ore Mined 794 kt
Waste Mined 1,059 kt
Produced tonnes 46,687 wmt
Shipped tonnes 50,936 wmt
Average price of shipped tonnes* US$429
Cost of sales US$367 Per
tonne
Product inventory as at December
31 2011 8,859
Mill Feed Grade 8.45%
Plant recovery 78.78%
---------------------------------- -----------
Production for January and February averaged 6,176 dmt per
month. Reflecting the RC drill programme and improved plant
availability production improved to 7,604 dmt in March 2012.
* Note: average prices of shipped tonnage are typically
negotiated and settled between three to nine months in advance of
shipment and reflect weighted average prices (FOB Durban).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 December 2011
Un-audited Un-audited Audited
6 months 6 months 12 months
ended 31 ended 31 ended 30
December December June
2011 2010 2011
GBP'000 GBP'000 GBP'000
Continuing Operations
Revenue 10,588 - -
Exploration expenses - (124) (116)
Cost of sales (9,544) - -
Net foreign exchange gain 180 - -
Profit/(loss) from mining activities 1,224 (124) (116)
Depreciation (579) - -
Operating profit/(loss) from
mining activities 645 (124) (116)
Administrative expenses (2,338) (735) (2,614)
Impairment Charge (8,434) - -
Operating (loss) (10,127) (859) (2,730)
Investment income (361) - 61
Share in (loss) of joint venture (164) - (4)
Total (loss) for the period
from continuing operations (10,652) (859) (2,673)
Other comprehensive income - - -
Discontinued Operations
Profit on disposal of subsidiaries 6,329 - -
(Loss) for the period from discontinued
operations - - (123)
Total comprehensive income/(loss)
for the period attributable
to the equity holders of the
parent (4,323) (859) (2,796)
Earnings per share
Basic and diluted (loss) per
share (pence) (7.98) (8.7)* (15.31)
*restated
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2011
Un-audited Un-audited Audited
31 December 31December 30 June
2011 2010 2011
GBP'000 GBP'000 GBP'000
Non-current assets
Mineral rights 711 - -
Property, plant and equipment 6,072 40 38
Investments 2,600 776 776
Share in assets of joint
venture 139 - 311
--------------------------- --------------------------- -----------------------
9,522 816 1,125
Current assets
Inventories 4,172 -
Trade and other receivables 1,249 3,211 89
Loans to affiliated companies 1,253 - 3,864
Cash and cash equivalents 8,197 3,272 1,280
--------------------------- --------------------------- -----------------------
14,871 6,483 5,233
Current liabilities
Trade and other payables (1,704) (151) (382)
--------------------------- --------------------------- -----------------------
(1,704) (151) (382)
Non-current liabilities
Environmental Rehabilitation (3,912) - -
Debentures (3,232) - -
--------------------------- --------------------------- -----------------------
(7,144) - -
--------------------------- --------------------------- -----------------------
Net current assets 13,167 6,332 4,851
Net assets 15,545 7,148 5,976
Equity
Share capital 8,364 2,721 3,805
Shares to be issued - 3,161 -
Share premium account 780 10,122 12,199
Share option reserve 582 97 862
Retained reserves 5,819 (8,953) (10,890)
--------------------------- --------------------------- -----------------------
Total equity 15,545 7,148 5,976
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2011
Ordinary Shares Share
share to be Preference Share Option Retained
capital issued share capital premium Reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31
December
2010 2,721 3,161 - 10,122 97 (8,953) 7,148
================== ========= ======== ============== ========= ================= ========== =================
Ordinary equity
subscription 1,084 (3,161) - 2,077 - - -
Conversion of
preference
shares in the
period - - - - - - -
Total
comprehensive
loss for the
period - - - - - (1,937) (1,937)
Share based
payments - - - - - - -
Transfer from
share
option reserve - - - - 765 - 765
Balance at 30
June
2011 3,805 - - 12,199 862 (10,890) 5,976
================== ========= ======== ============== ========= ================= ========== =================
Total
comprehensive
profit/ (loss)
for the period - - - - - (4,323) (4,323)
Ordinary equity
subscription 4,559 - - 9,613 - - 14,172
Capital reduction - - - (21,032) - 21,032 -
Share option
charge
reversed for
options
bought out - - - - (280) - (280)
Balance at 31
December
2011 8,364 - - 780 582 5,819 15,545
================== ========= ======== ============== ========= ================= ========== =================
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 December 2011
Un-audited Un-audited Audited
6 months 6 months 12 months
ended 31 ended 31 ended 30
December December June
2011 2010 2011
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Operating loss from continued and
discontinued operations before
interest and tax (10,652) (859) (2,853)
Add : Depreciation charges for
the period 579 4 7
Add : Share option charge reversed
for options bought out (280) 49 814
Add: Share in loss of joint venture 164 - -
Add: Impairment Charge 8,434 - -
Add: Sale of Subsidiary 6,329 - -
Less: Foreign Exchange gain (218) - (127)
Operating profit/( loss) before
working capital changes 4,356 (806) (2,159)
(Increase) in other trade and other
receivables (1,160) (5) (45)
(Increase) Decrease in loans to
affiliated companies (755) - (3,864)
Increase in loan taken by subsidiary 1,539
Increase / (Decrease) in trade
and other payables 1,322 77 308
Net cash flow from operating activities 5,302 (734) (5,760)
Cash flows from investing activities
Purchases of plant and equipment - (1) (1)
Trade investments made (2,992) (776) (1,079)
Investment income received 22 - 175
----------------------------------------- -------------------- ------------------- -----------------------
Net cash from investing activities (2,970) (777) (905)
Cash flows from financing activities
Proceeds of issue of share capital 4,585 4,322 7,484
Net cash from financing activities 4,585 4,322 7,484
Net increase in cash and cash equivalents 6,917 2,811 819
Cash and cash equivalents at the
beginning
of the period 1,280 461 461
Cash and cash equivalents at the
end
of the period 8,197 3,272 1,280
----------------------------------------- -------------------- ------------------- -----------------------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Statement of Compliance
The consolidated interim financial information for the six
months ended 31 December 2011 has been prepared using accounting
policies consistent with International Financial Reporting
Standards ("IFRS") as adopted by the European Union applied in
accordance with the provisions of the Companies Act 2006.
The financial figures included in this interim report do not
contain sufficient information to constitute an interim financial
report as that term is defined in IAS 34.
The consolidated interim financial information is un-audited and
does not constitute statutory accounts as defined in section 434 of
the Companies Act 2006. The statutory accounts for the year ended
30 June 2011, which were prepared under IFRS, have been delivered
to the Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under S498(2) or
S498(3) of the Companies Act 2006.
There is no material seasonality associated with the Group's
activities.
2. Accounting Policies
The interim financial information has been prepared using
accounting policies consistent with IFRS, as set out in the last
annual report to 30 June 2011, except as described below:
The International Accounting Standards Board has issued a number
of international financial reporting standards which are effective
for future accounting periods of the Group. The Directors do not
anticipate that the adoption of any of these would have a material
impact on the financial statements.
3. Dividends
No dividends were paid or proposed in the 6 months ended 31
December 2011 (for year ended 30 June 2011 - GBP NIL).
4. Operating Segments
The Group's operations are located in Tunisia, South Africa and
the United Kingdom. The Group's exploration activities are located
in Tunisia, it's operating mine in South Africa and its
administration and management is based in the United Kingdom.
The segments presented in this note reflect the separate
segments and companies within the Group and is how management
information is presented to the Chief Operating Decision Maker.
Segment operating profit/(loss) and profit/(loss) for the period
by geography are reconciled to entity operating profit/(loss) and
entity profit/(loss) for the period as follows:
Segment Operating Profit/ Profit/(Loss) For Period
(Loss) from continued and
discontinued operations
---------------- ------------------------------------- -------------------------------------
Un-audited Un-audited Audited Un-audited Un-audited Audited
6 months 6 months 12 months 6 months 6 months 12 months
ended 31 ended 31 ended ended 31 ended 31 ended
December December 30 June December December 30 June
2011 2010 2011 2011 2010 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ----------- ----------- ----------- ----------- ----------- -----------
Tunisia (24) (181) (350) (24) (181) (350)
---------------- ----------- ----------- ----------- ----------- ----------- -----------
United Kingdom (9,647) (857) (2,850) (3,843) (857) (2,793)
---------------- ----------- ----------- ----------- ----------- ----------- -----------
South Africa (576) - - (576) - -
---------------- ----------- ----------- ----------- ----------- ----------- -----------
Consolidation
adjustment 120 179 347 120 179 347
---------------- ----------- ----------- ----------- ----------- ----------- -----------
Total Entity
operating
/(loss) and
entity(loss) (10,127) (859) (2,853) (4,323) (859) (2,796)
---------------- ----------- ----------- ----------- ----------- ----------- -----------
Segment Total Assets
-------------------------- ---------------------------------------------------
Un-audited Un-audited Audited
6 months ended 6 months ended 12 months
31 December 31 December ended 30 June
2011 2010 2011
GBP'000 GBP'000 GBP'000
-------------------------- ---------------- ---------------- ---------------
Tunisia 25 49 47
-------------------------- ---------------- ---------------- ---------------
United Kingdom 11,612 7,331 5,031
-------------------------- ---------------- ---------------- ---------------
South Africa 14,758 - -
-------------------------- ---------------- ---------------- ---------------
Consolidation adjustment (2,002) (81) 1,280
-------------------------- ---------------- ---------------- ---------------
Group Assets 24,393 7,299 6,358
-------------------------- ---------------- ---------------- ---------------
In accordance with IFRS 8, Operating Segments, the information
presented in this note is the same as that reported to the Chief
Operating Decision Maker for the purposes of making decisions about
allocating resources to the segment and assessing its
performance.
5. Taxation
No liability in respect of income tax has arisen during the
period. No deferred tax liability or asset has been recognised in
the period.
The deferred tax asset has not been recognised in the accounts
as there is not sufficient evidence that there will be taxable
profits in the near future against which the deductible temporary
differences can be utilised within the meaning of IAS 12.
6. Earnings per ordinary share (basic and diluted)
The calculation of the basic loss per share attributable to the
ordinary equity holders of the parent has been calculated on the
net loss after tax of GBP4,323,000 (2010 - GBP859,000) using the
weighted average number of ordinary shares of 54,170,013 (2010
-9,869,437 restated post share capital consolidation). All share
options in issue decrease the loss per share for the period, and as
such are deemed anti-dilutive. Therefore the diluted loss per share
is the same as the basic loss per share.
7. Ordinary Share Capital
During the period the Company issued 40,000,000 ordinary shares
up to August 2011. On 31(st) August 2011 the share capital was
consolidated on a 25 to 1 basis. 28,798,000 new ordinary shares
were issued up to December 2011. Following these issues the current
called up allotted and fully paid ordinary shares of 15 pence each
is set out in the table below:
Called up, allotted and fully Shares to
paid be
Ordinary shares of 15 pence issued Nominal Value
each Share Capital 2011
-------------------------------------- -------------- ------------- --------------
Number '000 Number '000 GBP'000
-------------------------------------- -------------- ------------- --------------
Balance at 30 June 2011 634,129 - 3,805
-------------------------------------- -------------- ------------- --------------
Shares issued during the period
up to 31(st) August 40,000 - 240
-------------------------------------- -------------- ------------- --------------
Share Capital Consolidation 25-1 (647,164) - -
-------------------------------------- -------------- ------------- --------------
Shares issued during the period
up to 31(st) December 28,798 - 4,319
-------------------------------------- -------------- ------------- --------------
Balance on 31 December 2011 55,763 - 8,364
-------------------------------------- -------------- ------------- --------------
8. Share Option Reserve
Share Option Reserve
---------------------------------- ---------------------------------- ---------------
Un-audited Un-audited Audited
6 months ended 6 months ended 12 months
31 December 31 December ended 30 June
2011 2010 2011
GBP'000 GBP'000 GBP'000
---------------------------------- ---------------- ---------------- ---------------
Balance on 1 July 2011/2010 862 48 48
---------------------------------- ---------------- ---------------- ---------------
Share based payments - share
option scheme - 54 814
---------------------------------- ---------------- ---------------- ---------------
Decrease for cancelled share (280) - -
options
---------------------------------- ---------------- ---------------- ---------------
Reserve transfer for expired - (5) -
share options
---------------------------------- ---------------- ---------------- ---------------
Balance at 31 December 2011/2010 582 97 862
---------------------------------- ---------------- ---------------- ---------------
The share option reserve arises as a result of the expense
recognised in the income statement for the cost of share-based
employee compensation arrangements. The decrease represents the
amount previously charged to the Share Option Reserve Account and
now no longer required due to options having lapsed either through
the expiry of the exercise dates thereof or as a result of the
employees leaving the Group.
9. Impairment Charge
The net loss for the six months to 31 December 2011 includes an
impairment charge of GBP8,434,000 against the non-current assets of
Witkop (excluding restricted cash). The impairment decision
reflects the reduction in the fair value of the assets of Witkop in
light of the operational challenges at the Witkop mine and the
weaker outlook for Fluorspar prices.
The carrying value of the property, plant and equipment and
mineral rights before impairment was GBP14,401,000.
10. Investments
On 8 September 2011 Fluormin's aggregate shareholding in Sallies
increased to 78.29 % and to 58% of the Sallies debenture in issue.
The consideration for this purchase was GBP5.135 million for the
shares, satisfied by the issue of 13,125,449 ordinary shares. The
consideration for the debentures was GBP2.06 million, satisfied by
the issue of 5,338,078 ordinary shares to Firebird. The completion
of the Sallies transaction initiated a mandatory offer by the
Company to the minority holders of Sallies' shares and debentures
and any holder of options to subscribe for Sallies shares.
On 16 December 2011, the mandatory offer for Sallies closed
where the Company purchased the remaining 21.71% of Sallies shares
for the consideration of ZAR 38,870,813 and 1,734,969 ordinary
Fluormin shares.
The investment in Sallies has been subsequently impaired (refer
to note 9).
On 8 September, Fluormin acquiring 1,000,000 shares in Kenya
Fluorspar Company, equating to a 20% holding, and a USD 500,000
loan. The consideration for this was GBP1.8 million which was
satisfied by the issue of 4,643,788 ordinary Shares to Firebird.
The loan has subsequently been repaid.
11. Availability of report
Copies of this report are available from the Company's business
address at Blackwell House, Guildhall Yard, London, EC2V 5AE.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR JLMFTMBJTBBT
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