RNS Number:3346K
Kiwara PLC
20 December 2007
20 December 2007
KIWARA PLC
("Kiwara" or "the Company")
Chairman's Statement and Interim Results
for the period ending 30 September 2007
The Board of Kiwara, the Zambian based mining exploration and development
company, is pleased to announce interim results for the period ending 30
September 2007.
Highlights:
* The reverse takeover by Wadharma Investments plc of Kiwara Resources
Limited ("Kiwara Resources") was approved by shareholders at an EGM on 3 August
2007;
* The restructured company commenced trading as Kiwara plc on 6 August
2007 with 141,935,010 shares in issue of which 73% was held by management;
* The Company, through its subsidiary Kiwara Resources (Zambia) Limited
("Kiwara Zambia") increased its interest in Kalumbila Minerals Limited ("
Kalumbila") - the joint venture company from 55% to 75%;
* The interpretation of a ground EM survey at Kalumbila (Ni Co Cu)
suggests a 8 km extension to the historically identified 10 km strike;
* Drilling programmes, which confirm historic results, are investigating
up-dip potential and infill are underway at both Kalumbila and Kawanga, assay
results are awaited;
* Licence 267 has been transferred to the JV company Kalumbila and
renewed for a second two year period to September 2009;
Chairman Colin Bird commented: "I am pleased to report a positive start to the
Company's operations with an extensive exploration programme on the highly
prospective Kalumbila and Kawanga prospects.
"The Company will continue drilling at Kalumbila and Kawanga, and conduct
geo-chemical and geo-physics surveys at other potential targets and interpret
the results in order to plan an extensive exploration programme during 2008 as
the first step towards determining the economic viability of these deposits."
Enquiries:
Kiwara plc +44 (0) 20 7581 4477
Colin Bird, Chairman
Investec Bank (UK) Limited +44 (0) 20 7597 5000
Gerard Kisbey-Green / Jan Bosch
Bishopsgate Communications Ltd +44 (0) 20 7562 3366
Nick Rome
Dear shareholder
The interim accounts for the six months ended 30 September 2007 have been
prepared under International Financial Reporting Standards now being adopted for
all AIM quoted companies. Pre-tax profit for the six month period was �265,078
compared to a profit of �4,667 in the six months to 30 September 2006. The
above profit includes a credit of �522,309 following the deemed disposal of a
25% stake in Kiwara (Zambia) to the New Africa Mining Fund (NAMF) which diluted
the Group's interest in the Zambian subsidiary from a fully owned subsidiary to
a seventy five percent owned subsidiary. The NAMF interest in Kiwara Zambia is
convertible into Kiwara shares between the first and third anniversary from the
date of the NAMF investment. Following exercise of this option, Kiwara
Resources' ownership in Kiwara Zambia will revert back to one hundred percent.
Following shareholders' approval of the acquisition of Kiwara Resources at the
EGM on 3 August 2007, the restructured Company is now a mining exploration
company, focused on Zambia, which together with the Democratic Republic of Congo
hosts Africa's largest and potentially one of the most productive mineralised
zones, the Copper-belt.
Zambia is a stable democracy which has a long history of mining and is fully
committed to the ongoing development of the mining sector. The country is
actively encouraging joint ventures between experienced international groups and
local stakeholders, which is the model your Company continues to pursue through
its investment in Kalumbila.
Kalumbila was initially owned 55% by Kiwara Zambia and 45% by LM Engineering.
In October 2007, LM Engineering exchanged 20% of their holding in Kalumbila for
15 million Kiwara ordinary shares, together with a cash payment of US $150,000.
Kalumbila holds Licence 267 which covers a significant portion of the Kabompo
Dome in North Western Zambia, a complex poly-metallic geological feature
(created by the upward thrust of the basement granites through the more recent
sedimentary rocks); this is within the area considered to be the western
extension of the Copper-belt - an increasingly significant area that contains
the new Kansanshi and Lumwana mines.
I am pleased to report a positive start to the Company's operations with an
extensive exploration programme on the highly prospective Kalumbila and Kawanga
prospects.
Kalumbila
Historic exploration identified at least two distinct nickel/cobalt zones and
genetically unrelated copper zones, which are generally closer to the hanging
wall, together hosted in a graphilic phyllite unit. The core from this historic
drilling is still available and is to be re-logged and sampled.
The interpretation of the Company's ground EM survey suggests a previously
unidentified 8km extension to the historically known strike, which is open at
potentially one of the most interesting parts where a near surface, flat lying
conductor has a close correlation with a historic copper soil anomaly (which is
now being re-sampled).
A drilling programme incorporating both RC drilling and core drilling to
determine up-dip potential and verify historic results continues and assay
results are awaited.
Kawanga
The known mineralisation is in two lenses hosted in a mica schist in macroscopic
folds between the quartzites and a biotite schist. The target had previously
been extensively drilled by AGIP of Italy, but few details of their work are
available. A ground radiometric spectrum survey, together with RC and core
drilling programmes have been completed.
There are further fold structures both in the proximity of Kawanga and also on
the western side of the Kabompo Dome that have the potential to host Uranium;
these are being investigated.
The Company will continue drilling at Kalumbila and Kawanga, and conduct
geo-chemical and geo-physics surveys at other potential targets and interpret
the results in order to plan an extensive exploration programme during 2008 as
the first step towards determining the economic viability of these deposits.
Colin Bird
Chairman
20 December 2007
Consolidated Income Statement Notes Six months ended Six months Year ended
ended
30 September 30 31 March
2007 September 2007
Unaudited 2006 * Audited
� Unaudited �
�
Revenue
Other income - 11,000 11,000
Administration expenditure (274,122) (6,303) (89,274)
Loss from operations (274,122) 4,697 (78,274)
Other income 3 522,309 - -
Finance cost - (35) (35)
Finance income 16,891 5 6,567
Profit/(loss) before income tax 265,078 4,667 (71,742)
expense
Income tax expense - - -
Profit/(loss) for the period after 265,078 4,667 (71,742)
income tax expense
Loss attributable to minority 20,310 - -
interest
Profit/(loss) attributable to 285,388 4,667 (71,742)
members of Kiwara Plc
Number of shares in issue 6 141,935,010 24,310,010 32,935,010
Weighted average number of shares in 68,077,087 24,310,010 25,554,178
issue
Diluted weighted average number of 69,778,328 24,310,010 25,554,178
shares in issue
Basic profit/(loss) per share 4 0.42 0.02 (0.28)
(pence)
Diluted profit/(loss) per share 4 0.41 0.02 (0.28)
(pence)
* See note 2
Consolidated Balance Sheet
Notes 30 September 30 September 31 March
2007 2006 2007
Unaudited Unaudited * Audited
� � �
Assets
Non-current assets
Property, plant and equipment 92,170 - -
Exploration, evaluation and mining 408,573 - -
properties
Intangibles 5 7,759,951 - -
Total non-current assets 8,260,694 - -
Current assets
Trade and other receivables 166,401 10,800 -
Cash and cash equivalent 1,612,378 42,683 771,843
Total current assets 1,778,779 53,483 771,843
Total assets 10,039,473 53,483 771,843
Current liabilities
Trade and other payables 22,876 46,585 146,141
Total current liabilities 22,876 46,585 146,141
Total liabilities 22,876 46,585 146,141
Net assets 10,016,597 6,898 625,702
Minority interests: (154,078) - -
9,862,519 6,898 625,702
Equity
Share capital 6 6,038,252 4,862,002 4,948,252
Share premium 10,180,704 1,701,741 2,310,704
Currency translation reserves (8,571) - -
Accumulated loss (6,347,866) (6,556,845) (6,633,254)
Total equity 9,862,519 6,898 625,702
* See note 2
Statement of Changes in Equity
Share Share Accumulated Total
Capital Premium loss
� � � �
Balance at 1 April 2006 4,862,000 1,701,741 (6,561,512) 2,229
Issue of share capital 2 - - 2
Premium on issue of share - - - -
capital
Net profit/(loss) for the period - - 4,667 4,667
Balance at 30 September 2006 4,862,002 1,701,741 (6,556,845) 6,898
Issue of share capital 86,250 - - 86,250
Premium on issue of share - 608,963 - 608,963
capital
Net profit/(loss) for the period - - (76,409) (76,409)
Balance at 31 March 2007 4,948,252 2,310,704 (6,633,254) 625,702
Issue of share capital 1,090,000 - - 1,090,000
Premium on issue of share - 7,870,000 - 7,870,000
capital
Net profit/(loss) for the year - - 285,388 285,388
Currency translation difference - - (8,571) (8,571)
Balance at 30 September 2007 6,038,252 10,180,704 (6,356,437) 9,862,519
Cash flow statement Six months ended Year ended
30 September 30 September 31 March
2007 2006 2007
Unaudited Unaudited * Audited
� � �
Cash flow from operating activities
Profit/(loss) before taxation 265,078 4,667 (71,742)
Depreciation 6,695 - -
(Increase)/decrease in debtors (58,481) - 10,800
Increase/(decrease) in creditors (126,443) 38,200 137,756
Interest received (16,891) (5) (6,567)
Other income (522,309) - -
Net cash outflow from operating activities (452,351) 42,862 70,247
Cash flows utilised by investing activities
Increase in loans and investments (51,704) - -
Purchase of intangible fixed assets (359,713) - -
Purchase of tangible fixed assets (98,865) - -
Interest received 16,891 5 6,567
Net cash outflow from investing activities (493,391) 5 6,567
Cash flow from financing activities
Issue of shares 1,786,277 2 695,215
Net cash inflow from financing activities 1,786,277 2 695,215
Net increase in cash and cash equivalents 840,535 42,869 772,029
Cash and cash equivalents at the beginning of the 771,843 (186) (186)
year
Cash and cash equivalents at the end of the year 1,612,378 42,683 771,843
* See note 2
Principal Accounting Policies
The financial information for the period ended 30 September 2007 has been
prepared under the historical cost basis and is in accordance with the
recognition and measurement criteria of International Financial Reporting
Standards, which have been adopted for the first time in the current financial
year. The accounting policies have been applied consistently throughout the
Group and are consistent with those for the financial period ended 30 September
2006 except for changes in relation to compliance with IFRS.
Basis of consolidation
The Group financial statements consolidate those of the Company and of its
entities controlled by the Company for the period to 30 September 2007. Control
is recognised where the Company has the power to govern the financial and
operating policies of an investee entity so as to obtain benefit from its
activities.
Goodwill arising on consolidation, representing the excess of the fair value of
the consideration given over the fair values of the identifiable net assets
acquired, is capitalised and is reviewed for impairment on an ongoing basis.
Depreciation
Depreciation is calculated to write down the cost less estimated residual value
of all tangible fixed assets by equal annual instalments over their expected
useful economic lives. The rates applicable are:
Plant and equipment 25% on cost
Exploration expenditure
In accordance with the full cost method as set out in the SORP 'Accounting for
Oil and Gas Exploration, Development, Production and Decommissioning Activities'
and International Financial Reporting Standard 6, expenditure including related
overheads on the acquisition, exploration and evaluation of interests in
licences not yet transferred to a cost pool is capitalised under intangible
assets. Cost pools are established on the basis of geographic area. When it
is determined that such costs will be recouped through successful development
and exploitation or alternatively by sale of the interest, expenditure is
transferred to tangible assets and depreciated over the expected productive life
of the asset.
Impairment reviews for deferred exploration and evaluation costs are carried out
on a project by project basis, with each project representing a potential single
cash generating unit. An impairment review is undertaken when indicators of
impairment arise but typically when one or more of the following circumstances
apply:
* Unexpected geological occurrences that render the resource uneconomic.
* Title to the asset is compromised.
* Fluctuations in metal prices that render the project uneconomic.
* Variation in the currency of operations.
* Threat to political stability in the country of operation.
Financial Assets
The group classifies its financial assets in the following categories: at fair
value through profit or loss, loans and receivables, and available for sale. The
classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at
initial recognition.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held
for trading. A financial asset is classified in this category if acquired
principally for the purpose of selling in the short-term. Derivatives are also
categorised as held for trading unless they are designated as hedges. Assets in
this category are classified as current assets.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are included
in current assets, except for maturities greater than 12 months after the
balance sheet date. These are classified as non-current assets.
(c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either
designated in this category or not classified in any of the other categories.
They are included in non-current assets unless management intends to dispose of
the investment within 12 months of the balance sheet date.
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at
the date of the transaction. Monetary assets and liabilities in foreign
currencies are translated at the rates of exchange ruling at the balance sheet
date. The financial statements of foreign subsidiaries are translated at the
rate of exchange ruling at the balance sheet date. The exchange differences
arising from the retranslation of the opening net investment in subsidiaries and
certain long-term loans are taken directly to reserves. All other exchange
differences are dealt with through the income statement.
Deferred taxation
Deferred tax is recognised on all differences where the transactions or events
that give the Group an obligation to pay more tax in the future, or a right to
pay less tax in the future, have occurred by the balance sheet date. Deferred
tax assets are recognised when it is more likely than not that they will be
recovered. Deferred tax is measured using rates of tax that have been enacted
or substantively enacted by the balance sheet date.
Financial instruments
The Group has adopted IFRS 7 which provides more clarity and guidance on the
classification of financial instruments.
Interest receivable and payable is accrued and credited/charged to the income
statement in the period to which it relates.
Liquid resources
Liquid resources comprise funds on deposit at not less than 24 hours notice.
Operating leases
Rentals payable under operating leases are charged on a straight line basis over
the term of the lease.
Notes to the Financial Statements
1. The financial information for the six months ended 30 September 2007 and 30
September 2006 is unaudited. In the opinion of the directors the financial
information for these periods presents fairly the financial position,
operations and cash flows for the period in conformity with generally
accepted accounting principles. The interim statement for the six months
ended 30 September 2007 was approved by the directors on 18 December 2007.
2. The interim accounts have been prepared in accordance with International
Financial Reporting Standard (IFRS). The date of transition to IFRS was 1
April 2006. The interim accounts to 30 September 2006 and the audited
accounts for the year ending 31 March 2007 were prepared in accordance with
UK GAAP and have now been presented in this interim statement in accordance
to IFRS. There was no financial impact in reclassifying both the interim
accounts to 30 September 2006 and the Financial Statements to 31 March 2007
to ensure compliance with IFRS.
3. Other income of �522,039 represents the deemed disposal of a 25% stake in
Kiwara (Zambia) Ltd following the New African Mining Fund (NAMF)
subscription for 25% of Kiwara (Zambia) Ltd. This transaction diluted the
Group's interest in Kiwara (Zambia) Ltd from 100% to 75% ownership. The
NAMF interest in Kiwara (Zambia) Limited is convertible into Kiwara Plc
shares between the first and third anniversary from the date of the NAMF
investment at the Sterling equivalent 10,000,000 South African Rands at the
time the option is exercised. Following exercise of this option, Kiwara
Resources Limited will own a one hundred percent interest in Kiwara (Zambia)
Limited.
4. The calculation of profit per ordinary share is based on the reported profit
of �285,388 for the six months ended 30 September 2007 and the weighted
average number of ordinary shares outstanding during the same period of
68,077,087.
5. Kiwara Plc acquired a 100% interest in Kiwara Resources (BVI) for a
consideration of 97,000,000 shares in Kiwara Plc valued at 8p per share.
This acquisition generated a goodwill of �7,759,951 being the difference
between the consideration paid for acquiring a 100% interest in Kiwara
Resources (BVI) and the fair value of the assets acquired.
6. Share Capital
30 September 30 September 2006
2007
Alloted, called up and fully paid
� �
141,935,010 ordinary shares of 1p each 1,419,350 -
24,310,010 deferred shares of 19p each 4,618,902 -
24,310,010 ordinary shares of 20p each - 4,862,002
6,038,252 4,862,002
7. Copies of the interim report are available to the public free of charge from
the Company at 3rd Floor, 24 Ives Street, London, SW3 2ND, during normal
office hours for 30 days from the date of this report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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