RNS Number : 4529X
Kiwara PLC
25 June 2008
KIWARA PLC
("Kiwara" or "the Company")
Preliminary Results
for the year ending 31 March 2008
The Board of Kiwara, the Zambian based mining exploration and development company, is pleased to announce preliminary results for the
year ending 31 March 2008.
Highlights
* Kiwara has focused its exploration activities at Kalumbila
* Kiwara's interest in Kalumbila increased from 55% to 75% by the exchange of 15,000,000 Kiwara ordinary shares of 1p each and a
consideration of US$150,000.
* Initial targets identified from historic work. At Kalumbila, nickel confirmed as deep-seated. Focus on copper with significant
intersections including a 96m run at 1.02% in drill hole L27.
* Early results suggest potential for near surface, bulk mining target.
* Initial drilling at Kawanga intersected Uranium including a 1.0 m section with a U3o8 grade of 0.87% in drill hole WR8 from 105m
and 0.51% in drill hole WR11 from 123m.
* An aggressive drilling programme continues with the objective of defining a resource statement
* Kiwara gains interest for Iron Ore rights in the Prospecting License 267 ("PL 267") licence area
CEO Peter Vivian-Neal commented: "The Board believes that the results of continued exploration of the copper mineralisation within
Kalumbila, which together with the presence of Nickel and Cobalt that make valuable secondary targets, will continue to add significant
shareholder value over the coming year."
For further information, please contact:
Kiwara Plc Tel: +44 (0)207 581 4477
Colin Bird, Chairman
Peter Vivian-Neal, Chief Executive Officer Tel: +260 (0) 211 293899
Investec Bank, Johannesburg
Robert Smith Tel: +27 (0) 11 286 7326
Investec Bank (UK) Limited
Gerard Kisbey-Green / Jan Bosch Tel: +44 (0) 20 7597 5000
Bishopsgate Communications Ltd
Nick Rome Tel: +44 (0)20 7562 3366
Financial Review
The loss for the year after taxation was �86,698 (2007: �71,742) equivalent to 0.08 pence (2007 - 0.28 pence) per share. Included in
this figure is a credit of �522,309 which resulted from the deemed disposal of a 25% stake in Kiwara (Zambia) Ltd ("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's ownership in Kiwara Zambia will revert to one hundred percent.
The operating loss for the year amounted to �801,165 and includes overheads and corporate costs of the business as well as one-off
professional fees amounting to �168,902 attributable to the Company's reverse takeover by Kiwara Resources Ltd in August 2007 and a
share-based charge of �200,886 in line with the requirements of IFRS2. The share-based charge relates to share options expensed in the year
and has been concurrently credited in reserves resulting in a nil net effect to the net assets of the group.
Exploration and evaluation expenses capitalised in the year amounted to �709,359. These costs primarily relate to the Company's
advancing exploration activities at its Kabompo dome project based in north western Zambia. The ongoing work programme is exploiting
advanced technological exploration tools such as ground geophysical surveys, geochem surveys and both reverse circulation and core drilling
to significantly increase the geological understanding of the licensed area. The Company anticipates reporting a resource estimate for the
Kalumbila deposit in the forthcoming year.
During the year, 15,550,000 ordinary shares of 1p each were issued raising �1,910,000 to fund ongoing drilling and exploration expenses
and a further 97,000,000 million ordinary shares of 1p each were issued in August 2007 as consideration for the acquisition of Kiwara
Resources Limited. 15,000,000 ordinary shares of 1p each were issued in October 2007, which along with a payment of US$150,000 increased
Kiwara's ownership in its joint venture subsidiary, Kalumbila Minerals Ltd, from 55% to 75%. The total number of ordinary shares of 1p each
outstanding at 31 March 2008 was 160,485,010.
On 3 April 2008, Kiwara's shares were admitted for trading on the main board of JSE Limited. This decision to dual list the Company's
shares was predicated by ongoing positive exploration results which continue to support the assertion that Kalumbila has the potential to
host a near surface bulk mining target and the Company's recognition that South African investors should be given the opportunity to invest
in the Company's evolving base metal and Uranium projects.
Operations Review
In its first reporting year, Kiwara's exploration operations have taken place within Prospecting Licence 267 ("PL267") in North West
Province, Zambia. The interest in this licence was acquired through the Company's joint venture with LM Engineering Ltd, a Zambian Company
which previously held the licence. During the reporting period, Kiwara has assessed the prospectivity of the Licence area and focused on two
specific targets - base metals at Kalumbila and uranium at Kawanga. Exploration, including drilling has taken place on both targets and in
both cases, historic findings confirmed. On the basis of current results, the intention is to establish a resource statement at Kalumbila
during the forthcoming year. These activities continue to add shareholder value and the results achieved so far support the board's
confidence that Kalumbila represents a significant base metals target.
The Joint Venture: Kiwara is the beneficiary of the November 2006 joint venture with LM Engineering Ltd of Zambia. The resulting joint
venture company, Kalumbila Minerals Ltd (Kalumbila Minerals") was initially held 55% by Kiwara Resources (Zambia) Ltd and 45% by LM
Engineering; Kiwara provides management and the funding. Kiwara is required to spend US$2.2 million on exploration over three years (from
November 2006) and to continue funding to the completion of a feasibility study. Thereafter further funding, including feasibility studies
on other targets will be provided pro-rata to the shareholding. Following the expenditure of US$2.2 million Kiwara will earn an additional
5% of Kalumbila Minerals. During the reporting period Kiwara acquired 20% of Kalumbila Minerals from LM Engineering for a consideration of
15,000,000 Kiwara plc ordinary shares and a payment of $150,000.
Prospecting Licence 267
Validity: Prospecting Licence 267 was issued to LM Engineering Ltd in September 2005 for an initial period of 2 years. In accordance
with the Mines and Minerals Act 1995, it was renewed in September 2007 for a further two years having dropped half the original area; at the
second renewal in September 2009, a further 50% reduction in surface area will be required. The Mines and Minerals Act was repealed in
April 2008 and was replaced by the Mines and Minerals Act 2008 which may involve changes to these procedures. At the first renewal, the
Licence was transferred to Kalumbila Minerals Ltd, the joint venture company. The licence covers Copper, Cobalt, Nickel, PGM group metals,
Uranium, Iron Ore and Limestone; Limestone is excluded from the joint venture and may be exploited independently by LM Engineering Ltd.
Location: PL 267 is within the giant metallogenic province of Africa, universally known as the Copperbelt. The licence area in North
West Province, Zambia, is 320Km west of the copperbelt city of Kitwe and 140km west of the provincial capital of Solwezi. The current
surface area of PL 267 is approximately 5,500km2 over and around the periphery of the northern and eastern part of the Kabompo Dome, the
most westerly of the three major mid-Proterozoic inliers that form what is now described as the "New Copperbelt". East of Kabompo, the
Solwezi and Mombezhi Domes already host significant new mines - Kansanshi (First Quantum Minerals plc) and Lumwana (Equinox Minerals Ltd)
respectively. The combined expected production targets of these two mines represent some 50% of Zambia's current national copper
production.
The geology of the region is that of variably deformed and metamorphosed late proterozoic metasedimentary and volcanic units of the
Katangan super group which overlies the basement rocks.
The Kabompo area is largely covered by Miombo woodlands and grasslands that are associated with the drainage lines; there is very little
rock outcrop. Historic work by Roan Selection Trust ("RST"), AGIP, Anglo American / ZamAnglo and others identified a number base metal and
radioactive targets, which, primarily due to logistics, technology and historic metal price fundamentals, have remained less explored or
understood than mineral targets on the domes to the east of Kabompo.
Following the inception of the joint venture with L M Engineering Ltd, Kiwara conducted an appraisal of the known mineral occurrences
and identified the following targets:
Kalumbila
Kalumbila is a base metals - nickel, cobalt and copper - target hosted in a carbonaceous phyllite (shale), originally identified by RST
in 1950's, who drilled 31 core drill holes; the physical core and supporting data which remain available at the Zambian Chamber of Mines in
Kalalushi have provided a valuable asset to the Company. The target was subsequently explored by Anglo American/ ZamAnglo in the mid-1990's.
Both historic campaigns focused on the nickel potential in the northern part of the unit.
At the end of the wet season, in May 2007, Kiwara commenced geo-chemistry and ground geo-physics surveys over the known outcropping and
sub-outcropping of the carbonaceous phyllite to determine the extent of the unit. The interpretation of the ground, fixed loop
electromagnetic survey ("EM") showed that south of the Kalumbila Fault, the mineralised carbonaceous phyllite unit may be continuous for a
strike length of about 10km and is open to the west, its position conforming to historic work. The survey also identified two flat lying
units running north of the Kalumbila fault for 4km and both open on strike. The northern extensions are yet to be investigated. Both
sections have a close correlation with mineral soil anomalies.
Drilling: Kiwara has conducted both Reverse Circulation ("RC") and Diamond Core Drilling. The objective of the first was to determine
the up-dip continuity of the nickel and copper zones.
The RC drilling in the copper zone (holes LR3 -LR5) intersected copper much nearer to surface than has previously been reported at
Kalumbila. LR3 intersected 36m 0.66% Cu from 24m.
The core drilling programme included two drill holes (L1 and L2) in the nickel zone (see table below). These results together with the
results of historic RST drilling show that the nickel is deep-seated at 180 - 300m at grades of generally around 0.3 - 0.5%. The copper is
deeper, at 250m - 400m at grades of 0.7% - 1.1%.
With the success of LR3, the Company drilled L27 down dip and intersected a most significant intersection of 224m at 0.59% Cu from 38m -
which includes 96m at 1.02% Cu from 163m.This zone and the up-dip potential will be the focus of the ongoing exploration programme. Using
metal prices at 31 March 2008 and cut off of $40/tonne the rock value of the upper section of L27 would be $83 per tonne and the lower
section from 136m, $127 per tonne, the enhancement being due to the cobalt credit.
Drill Holes
Intersections L1 L2 LR3 L27
Depth (m) 188 236 24 38
Thickness (m) 12 24 36 224
Grade 0.45% Ni 0.30% Ni 0.66% Cu 0.59% Cu
Intersection Including Including
Depth (m) 230 309 33 44
Thickness (m) 5 12 3 4
Grade 0.39% Ni 0.80% Cu 1.33% Cu 0.79% Cu
Intersection Including
Depth (m) 373 163
Thickness (m) 5 96
Grade 0.90% Cu 1.02% Cu
Drilling is ongoing and further assays results are awaited.
The drill results suggest that the western part of the copper target may be tectonically thickened and / or heavily folded; this could
explain the increased thickness of the L27 intersections. Whilst this gives the potential for greater volumes of near surface mineralisation
and thus greater bulk mining target potential, it will also require an increased concentration of drilling to enable a resource statement.
The board believes that the copper mineralisation should be the priority target
The Kalumbila carbonaceous phyllite unit may well be a part of a larger structure that includes Kawako, 12 km to the north-west of
Kalumbila and in a similar geological setting; historic work identified base metal soil anomalies over this unit. This is a priority
prospecting target during 2008.
Kawanga
Kawanga is a Uranium target identified by AGIP (Italy) during the 1970's. In the absence of their historic documentation, Kiwara
conducted a ground radiometric study, which identified a surface anomaly and the outline of potentially two mineralised zones. A 2,000m
drilling programme involving both reverse circulation and core drilling was conducted in order to verify the mineralisation and determine
strike potential. The assay results of this programme were as follows:
Drill Hole From metres Intersection %U3O8 Type of drilling
WR8 105 1 0.87 Reverse Circulation
WR11 123 1 0.51 Reverse Circulation
WR12 58 6 0.118 Reverse Circulation
Including 63 1 0.32
W2 224 0.22 0.11 Core
The drilling results confirm that the mineralisation occurs in at least two lenses, one of which is appears to measure some 700 x 550 m
and as suggested by drill hole WR12, is up to at least 6m thick. The uranium mineralisation has been identified as being autunite and
thorium-free pitcheblenbe and is found within and at the contact between the muscovite schist and the biotite schist, which Kiwara
correlates as the contact between the Lower and Upper Roan, rather than the contact with the basement which has previously been supposed. It
appears to be the result of structural controls and is seen in W2 to occur in a narrow veinlet.
Historic work in the region has identified a number of other Uranium anomalies within the current licence area, these include the
Kawanga anticline and Nyambwezu, on the western side of the Licence area. These targets are yet to be prospected.
Management: Kiwara's exploration work is overseen by a technical management committee comprising of Colin Bird (Kiwara Chairman), Neil
Gardyne (CEO NAMF), the Project Geologist (currently Maliro M Banda) and Peter Vivian-Neal (Kiwara CEO).
Kiwara maintains two exploration camps within the Licence area, employing an average work force of 8 technical and junior management,
and 50 local labourers. All operational staff are Zambian nationals.
Social and Environmental Issues: The Company is compliant with the requirements set by the Environmental Council of Zambia with regard
to minimising the impact on the environment of prospecting and exploration operations and has successfully submitted its Environmental
Protection Brief as required under the present Mines and Minerals Act. An environmental base line study will be commenced in 2008 so that
the resulting Environmental Impact Statement will be available to match the reporting time line for any preliminary feasibility studies.
Whilst drilling is necessarily energy intensive, many other aspects of exploration are not and the exploration camp runs many of its
ancillary activities, including computers and lighting on solar power.
The Kabompo region is dominated by subsistence farming, which is in the lowest strata of income within Zambia. The Company has
identified one local community school, Nusanda, close to Kawanga, with 300 enrolled children that has enthusiasm but only the most basic
facilities and no external support. The Company, together with the children's charity World Vision, is providing the skills to help the
community build classroom units. Larger projects will be appropriate as the Company completes viable feasibility studies. The Company also
maintains relationships with the traditional chiefs, who provide an essential local administrative role in the rural areas.
Summary
Kiwara's asset, its interest in Prospecting Licence 267, has at least two separate targets on which operations in the reporting year
have demonstrated as having potential and justifying ongoing exploration work. Drilling results at Kalumbila continue to support the
Board's assertion that there is the realistic potential for a near surface copper resource. The structural alterations that have taken place
have produced the thickening of parts of the mineralised zones which give rise to the significant copper intersections - 1.02% Cu over 96m
from 163m in drill hole L27 over the more usual 8-12m intersections (12m at 0.80% Cu from 309m in L2) found in the north eastern part of
Kalumbila. The Board believes that the results of continued exploration of the copper mineralisation within Kalumbila, which together
with the presence of Nickel and Cobalt that make valuable secondary targets, will continue to add significant shareholder value over the
coming year.
Peter Vivian-Neal
CEO
KIWARA PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2008
Notes Year ended Year ended 31 March 2007
31 March
2008
� �
Other revenue - 11,000
Administrative expenses (801,165) (89,274)
____________ ___________
Loss from operations (801,165) (78,274)
Finance income 44,463 6,567
Finance costs (41) (35)
Foreign exchange gain 88,146 -
Other income 522,309 -
____________ ___________
Loss before income tax (146,288) (71,742)
Provision for income tax (86) -
____________ ___________
Loss for the period after (146,374) (71,742)
income tax
Minority interests
Equity 59,676 -
____________ ___________
Loss attributable to members (86,698) (71,742)
of the company
Basic loss per share (pence) 3 (0.08) (0.28)
Diluted loss per share (pence) 3 (0.08) (0.28)
KIWARA PLC
CONSOLIDATED BALANCE SHEET
AT 31 MARCH 2008
Notes Year ended 31 March Year ended 31 March 2007
2008
� �
Assets
Non-current assets
Intangible assets 2 13,069,106 -
Property, plant and equipment 96,691 -
Total non-current assets 13,165,797 -
Current assets
Trade and other receivables 41,158 -
Cash and cash equivalents 1,824,099 771,843
Prepaid expenses and other 29,189 -
current assets
Total current assets 1,894,446 771,843
Total assets 15,060,243 771,843
Current liabilities
Trade and other payables 135,760 146,141
Total current liabilities 135,760 146,141
Total liabilities 135,760 146,141
Net current assets 1,758,686 625,702
Net assets 14,924,483 625,702
Equity
Called up share capital 6 6,223,752 4,948,252
Share premium account 14,605,204 2,310,704
Share based payment reserve 200,885 -
Currency translation reserve 12,744 -
Retained Earnings (6,719,952) (6,633,254)
Equity attributable to equity 14,322,633 625,702
holders of the company
Minority interests 601,850 -
Total equity 14,924,483 625,702
KIWARA PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AT 31 MARCH 2008
Attributable to Equity Holders of the Company Minority
Interest Total
Share Capital Share Premium Share based payment Currency translation Retained earnings
reserve reserve
� � � � �
�
4,862,000 1,701,741 - - (6,561,512)
2,229
Balance at 31 March 2006
-
Issue of share capital 86,252 - - - -
- 86,252
Premium on issue of share - 608,963 - - -
608,963
capital
-
Share-based payment charge - - - - -
-
Net loss for the year - - - - (71,742)
- (71,742)
Currency translation - - - - -
-
difference
-
Balance at 31 March 2007 4,948,252 2,310,704 - - (6,633,254)
- 625,702
Issue of share capital 1,275,500 - - - -
- 1,275,500
Premium on issue of share - 12,294,500 - - -
12,294,500
capital
-
Share-based payment charge - - 200,885 - -
- 200,885
Net loss for the year - - - - (86,698)
(59,676) (146,374)
Addition in minority interest - - - -
661,526 661,526
Currency translation - - - 12,744 -
12,744
difference
-
Balance at 31 March 2008 6,223,752 14,605,204 200,885 12,744 (6,719,952)
601,850 14,924,483
KIWARA PLC
CONSOLIDATED CASH FLOW STATEMENT
AT 31 MARCH 2008
Notes Year ended 31 March Year ended 31 March 2007
2008
� �
Cash flow from operations 5 (488,057) 76,814
Interest received (44,463) (6,567)
Net cash inflow (outflow) from (532,520) 70,247
operating activities
Cash flows utilised by
investing activities
Acquisition of subsidiaries, (102,189) -
net of cash acquired
Purchase of intangible fixed (709,359) -
assets
Purchase of property, plant (144,416) -
and equipment
Interest received 44,463 6,567
Net cash inflow (outflow) from (911,501) 6,567
investing activities
Cash flow from financing
activities
Issue of shares 2,496,277 695,215
Net cash inflow from financing 2,496,277 695,215
activities
Net increase in cash and cash 1,052,256 772,029
equivalents
Cash and cash equivalents at 771,843 (186)
the beginning of the year
Cash and cash equivalents at 1,824,099 771,843
the end of the year
KIWARA PLC
NOTES TO THE CONSOLIDATED PROVISIONAL RESULTS
FOR THE YEAR ENDED 31 MARCH 2008
1. Basis of preparation and accounting policies
The financial information for the year ended 31 March 2008 has been prepared on the historical cost basis and is in accordance with EU
Endorsed International Financial Reporting Standards (IFRS), IFRIC Interpretations and the Companies Act 1985 applicable to companies
reporting under IFRS, 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 year ended 31 March 2007 except for changes in relation to
compliance with IFRS. The adoption of IFRS did not result to the restatement of prior year figures.
2. Balance sheet
The Group's intangible assets consist of goodwill on consolidation which amounted to �12,359,747 and exploration and evaluation expenses
capitalized to date of �709,359.
3. Income statement
The headline loss for the financial year 2008 was 0.08 pence (2007: 0.28 pence) per share calculated on a weighted average number of
shares of 112,527,988 (2007: 25,554,178).
No dividends paid or declared in the year.
4. Segment reporting
Business segments
The Group's only business segment is the exploration and development of Nickel-Cobalt Copper and Uranium.
Geographical segments
An analysis of income/(loss) on ordinary activities before taxation, net assets and exploration expenditure by geographical area is
given below.
2008 2007
� �
2008 2007
� �
Income/(loss) on ordinary activities
United Kingdom 23,562 (71,742)
Zambia (169,850) -
(146,288) (71,742)
Total loss before minority interests (146,374) (71,742)
Net assets by location
United Kingdom 14,433,918 625,702
Zambia 490,565 -
14,924,483 625,702
Exploration expenditure
Zambia 709,359 -
Total exploration expenditure 709,359 -
5. Cash flow statement
2008 2007
� �
Net loss for the year before income tax (146,288) (71,742)
and minority interests
Depreciation 47,409 -
Negative Goodwill (522,309) -
(Increase) decrease in trade and other receivables (41,158) 10,800
(Increase) decrease in prepaid expenses and other (29,189) -
current assets
Increase (decrease) in trade and other payables (10,468) 137,756
Increase in currency translation reserves 13,060 -
Share based payments 200,886 -
Cash flow from operations (488,057) 76,814
6. Capital and reserves
Shares issued
During the year ended 31 March 2008, a total of 127,550,000 (2007: 8,625,000) ordinary shares of 1p each were issued. Included in this
total, 15,550,000 ordinary shares of 1p each were issued for a cash consideration of �1,910,000 (2007: �345,000). The balancing 112,000,000
ordinary shares of 1p each were issued for non-cash consideration.
Share options
The Company issued the following share options:
Date granted Period exercisable Exercise price per Number of options
share (pence)
3 August 2007 3 August 2007 - 3 10 3,000,000
August 2014
2 October 2007 2 October 2009 - 2 17 200,000
October 2014
2 October 2007 2 October 2009 - 2 20 250,000
October 2014
20 February 2008 20 February 2008 - 20 900,000
20 February 2015
Currency translation reserve
The currency translation reserve account comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations that do not have a UK� functional currency. Exchange differences arising are classified as equity and
transferred to
the Group's translation reserve.
7. Financial statements
The preliminary financial results have not been audited. Audited financial statements compliant with the Companies Act and IFRS will be
issued to shareholders on 15 July 2008 and any adjustments, if applicable will be released to SENS on that date.
8. Directorate
The directors who served during the year were as follows:
Principal occupation and function Date appointed
C Bird Executive Chairman 6 August 2007
P Vivian-Neal Chief Executive Officer 6 August 2007
R Samtani Financial Director 6 August 2007
R Wollenberg Non-Executive Director 3 August 2007
C Molefe Non-Executive Director 3 March 2008
S Kazenene Non-Executive Director 14 December 2007
H Blignault* Non-Executive Director 6 August 2007
*Hendrik Blignault resigned as a director of the Company on 3 March 2008.
Signed on behalf of the board
25 June 2008
This information is provided by RNS
The company news service from the London Stock Exchange
END
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