Platinum Mining Corporation of India PLC
("PMCI" or the "Company)
Preliminary unaudited results for the 17 month period ended 31 December 2007
("Unaudited Results")
Chairman's Statement
The financial period under review comprises the seventeen-month period from
1 August 2006 to 31 December 2007. This change in the reporting year end was
announced in April 2007, and brings PMCI's accounting period in line with that
of SUN Group. PMCI was acquired by SPI Partners Limited, a subsidiary of SUN
Group, on 8 December 2006.
Financial Results
There has been little operational activity in this period, and no revenue has
accrued. The only source of income has been interest from the Group's cash
balances amounting to some �686,000. At 31 December 2007, the cash position of
the Group was �9.29m. Administrative expenses in the period were approximately
�1.9m, of which �0.44m was for legal and financial advice in relation to the
takeover by SPI Partners Limited, and a further �0.2m was for legal advice over
the re-negotiation of contracts with Ferro Alloys Corporation Limited ("FACOR"),
PMCI's joint venture partner in India.
India
On 8 August 2007, PMCI announced that the Indian federal authorities had ordered
a suspension of mining activities at the Boula mine, because they asserted that
the mine lay in a designated wildlife zone.
FACOR has disputed this and the matter is currently sub-judice with the
Honourable Court of Anandpur in the state of Orissa. The court has granted the
status-quo order and has permitted FACOR to continue mining operations without
hindrance, and FACOR has continued to mine Chromite. FACOR is diligently
pursuing the case and PMCI is engaged in an on-going dialogue with FACOR to
understand and monitor the situation. Based on its assessment of the position,
PMCI is optimistic that a court decision in favour of FACOR may be reached.
However, in the event the court rules against FACOR, there can be no assurance
that PMCI would be able to derive value from the Boula mine, the Group's
principal asset. The Board have reviewed the carrying value of assets in the
balance sheet in respect of Boula amounting to �0.7 million (comprising
intangible fixed assets of �0.3million, equipment of �0.2 million and a
prepayment to FACOR of �0.2m) and have concluded it is appropriate to carry this
forward in the light of expectations of a favourable outcome.
As a result of the ongoing court process, the sampling and exploration programme
for platinum, which had been planned to commence after entering into the New
Contracts (referred to below), has been deferred pending a successful resolution
between FACOR and the Indian federal authorities.
The New Contracts refer to contracts intended to replace the Joint Operating
Agreement ("JOA") between FACOR and PMCI's 70%-owned subsidiary Boula Platinum
Mining Private Limited ("BPM") dated 5 February 2005 The Joint Venture Agreement
between FACOR, PMCI and BPM is the primary agreement setting out the terms of
the joint venture in relation to the Boula mine, and remains in full force and
effect. Both parties have agreed to suspend negotiations, which were at an
advanced stage, over the New Contracts until there has been a resolution of the
dispute in relation to the wildlife zone.
The Board
It was announced on 16 January 2008 that Keith Rumble had accepted the Board's
invitation to become a non-executive director. He brings enormous experience in
the platinum sector and as Chief Executive Officer of SUN Mining will help to
drive the Company's development in the platinum industry. Two Directors have
retired from the Board. Vijay Tandon joined the Board in June 2006 at a
difficult time in the Company's development, and his steadfast and practical
advice has been of great benefit to the Company ever since and the Board wishes
him well in pursuing his future business interests. Sheldon Kirkpatrick, who
joined the Board in February 2007 following SUN's takeover, has also decided to
step-down from the Board. The Company is seeking to appoint another independent
non-executive director.
Recent Developments
The Board is resolved to look for other investment opportunities in platinum and
related sectors. PMCI announced on 19 October 2007 it had entered into an
agreement, subject to completion of due diligence and necessary Government
approvals, to acquire 20% of the share capital of Majormatic167 (Proprietary)
Limited ("Majormatic") for US$1 million with the right to increase its interest
to 51% by investing a further US$3.5 million. Majormatic has been granted the
prospecting rights over the Naboom Platinum Deposit in South Africa. Government
approvals were received in November 2007 and the Company has completed its due
diligence. The Company is now providing funding to Majormatic for its drilling
campaign and once it has funded US$1 million, it will complete the acquisition
of its 20% interest, provided the suspensive conditions of the agreement, as
outlined in Note 6 to these unaudited results, have been met. Should these
conditions not be met, all of PMCI's funding will be re-imbursed. The drilling
campaign at Naboom commenced in January 2008 and is expected to be completed at
the end of March 2008. Preliminary results will be made known as soon as
available.
Outlook
The delays at Boula are disappointing, especially as the Company was close to
concluding the New Contract negotiations. PMCI is determined to maintain the
right to mine at Boula. In the meantime, however, your Board, strengthened by
the appointment of Keith Rumble, is looking at other platinum opportunities and
awaits the results from the drilling campaign at Naboom. With the Group's strong
cash resources and the backing of SUN Mining, the Company is well positioned to
take advantage of other opportunities.
Philip Adeane
Chairman
20 February 2008
Preliminary Results (Unaudited)
Consolidated profit and loss account for the 17 months ended 31 December 2007
Note
Unaudited Re-stated
17 months to 31 12 months to
December 2007 31 July
2006
� �
Administrative expenses (1,856,682) (1,594,872)
_______ _______
Operating Loss (1,856,682) (1,594,872)
Other interest receivable 686,177 474,458
and similar income
_______ _______
Loss on ordinary activities (1,170,505) (1,120,414)
before taxation
Tax on loss on ordinary - -
activities
_______ _______
Loss on ordinary activities (1,170,505) (1,120,414)
after taxation
Minority interests 22,717 6,702
_______ _______
Loss for the financial (1,147,788) (1,113,712)
period ======= =======
pence pence
Basic and diluted loss per 4 (0.7) (0.6)
ordinary share ======= =======
Loss on ordinary activities after taxation for the current period and prior year
arose on continuing operations.
Preliminary Results (Unaudited)
Consolidated balance sheet at 31 December 2007
Note
Unaudited Re-stated
31 December 31 July
2007 2006
� �
Fixed Assets
Intangible assets 2 282,020 260,364
Tangible assets 2 189,248 197,409
________ ________
471,268 457,773
======== ========
Current Assets
Debtors 2 397,305 431,327
Cash at bank and in hand 3 9,295,728 10,455,942
________ ________
9,693,033 10,887,269
Creditors: amounts falling (160,445) (246,711)
due within one year ________ ________
Net current assets 9,532,588 10,640,558
Total assets less current 10,003,856 11,098,331
liabilities
Creditors: amounts falling (9,141) (8,288)
due after more than one year ________ ________
Net assets 9,994,715 11,090,043
======== ========
Capital and reserves
Called up share capital 79,036 79,036
Share premium account 12,153,129 12,153,129
Merger reserve 1,014,980 1,014,980
Profit and loss account (3,229,997) (2,136,737)
________ ________
Shareholders' funds - 10,017,148 11,110,408
Equity
Minority interests - equity (22,433) (20,365)
________ ________
9,994,715 11,090,043
======== ========
Preliminary Results (Unaudited)
Consolidated cash flow statement for the 17 months ended 31 December 2007
Note Unaudited Re-stated
17 months to 12 months to
31December 31 July
2007 2006
� �
Reconciliation of
operating loss to net
cash flow
from operating activities
Operating loss (1,856,682) (1,594,872)
Depreciation charges 37,700 28,382
Loss on disposal of fixed 4,129 11,550
assets
Foreign exchange loss 10,494 26,560
Decrease in debtors 34,022 67,095
(Decrease) in creditors (85,413) (247,195)
Fair value of share based 5,186 107,183
payments ________ ________
Net cash outflow from (1,850,564) (1,601,297)
operating activities ======== ========
Cash flow statement
Cash flow from operating (1,850,564) (1,601,297)
activities
Returns on investments
and servicing of finance
Interest received 698,668 474,458
Capital expenditure and
financial investment
Purchase of tangible (20,496) (211,119)
fixed assets
Investment in intangible - (196,784)
assets
Proceeds from sale of
fixed assets 4,294
________ ________
Cash outflow before (1,168,098) (1,534,742)
financing ======== ========
Financing
Share issue costs - (56,591)
________ ________
(Decrease) in cash in 3 (1,168,098) (1,591,333)
the period ======== ========
Preliminary Results (Unaudited)
Reconciliation of net cash flow to movement in net funds
Note Unaudited Re-stated
17 months to 31 12 months to
December 31 July 2006
2007
� �
(Decrease) in cash in the (1,168,098) (1,591,333)
period
Repayment of debt due after - -
more than one year __________ __________
Change in net (debt) resulting (1,168,098) (1,591,333)
from cash flows
Exchange movement 7,884 (7,340)
__________ __________
Movement in net (debt) in the (1,160,214) (1,598,673)
period
Net funds at the start of the 10,455,942 12,054,615
period __________ __________
Net funds at the end of the 3 9,295,728 10,455,942
period ========== ==========
Preliminary Results (Unaudited)
Consolidated Statement of Total Recognised Gains and Losses for the 17 month
period ended 31 December 2007
Unaudited Re-stated
17 months to 12 months
31 December to 31 July
2007 2006
� �
Loss for the financial period (1,147,788) (1,113,712)
Net exchange differences on the 49,342 12,104
retranslation of net investments and __________ __________
related borrowings
Total recognised gains and losses (1,098,446) (1,101,608)
relating to the financial period ========== ==========
Reconciliation of Movements in Shareholders' Funds for the 17 month period ended
31 December 2007
Unaudited Re-stated
17 months to 12 months
31 December to 31 July
2007 2006
� �
Loss for the financial period (1,147,788) (1,113,712)
Other recognised gains and losses (net) 49,342 12,104
Share issue costs - (56,591)
Fair value of share based payments 5,186 107,183
__________ __________
Net reduction in shareholders' funds (1,093,260) (1,051,016)
Opening shareholders' funds 11,110,408 12,161,424
__________ __________
Closing shareholders' funds 10,017,148 11,110,408
========== ==========
1. Basis of financial information
The Company changed its year end from July to December in April 2007 and the
Unaudited Preliminary Results presented here relate to the period from 1 August
2006 to 31 December 2007.
The financial information in this announcement does not constitute the
Company's statutory accounts for the 17 months ended 31 December 2007 or the 12
months ended 31 July 2006. The financial information for 2006 is derived from
the statutory accounts for 2006 which have been delivered to the Registrar of
Companies. The auditors have reported on the 2006 accounts; their report was
unqualified and did not contain statements under Section 237(2) or (3) of the
Companies Act 1995. The financial information is prepared using the same
accounting policies as in the year ended 31 July 2006, with the exception of
adoption of FRS 20 Share-based Payment, the effect of which is disclosed in Note 5.
The statutory accounts for the 17 month period ended 31 December 2007 will be
finalised on the basis of the financial information presented by the Directors
in this unaudited preliminary announcement and will be delivered to the
Registrar of Companies.
2. Basis of Preparation
Boula assets
In light of the suspension of mining activities at Boula the Board have reviewed
the carrying value of assets on the balance sheet relating to Boula amounting to
�0.7 million (comprising intangible fixed assets of �0.3million, equipment of
�0.2 million and a long-term prepayment to FACOR of �0.2m) and have concluded it
is appropriate to carry this forward in the light of expectations of a
favourable outcome.
FRS 20 Share-based Payment
The Company has adopted FRS 20 Share-based Payment, under which an expense is
recognised in the profit and loss account for share based payments, calculated
at their fair value at the date of grant. The adoption of FRS 20 has given rise
to a charge of �5,186 for the 17 month period ended 31 December 2007. Prior year
comparatives have been restated, resulting in an additional expense of �107,183
for the 12 months ended 31 July 2006. There is no overall impact on the Group's
net assets with a corresponding credit booked in the Company's profit and loss
reserve.
Other new standards which are adopted in the financial period are:
* FRS23 `The effects of changes in foreign exchange rates'
* FRS24 `Financial reporting in hyperinflationary economies'
* FRS26 `Financial instruments: measurement'
* FRS29 `Financial instruments: disclosures'
3. Analysis of net funds
At 31 July Cash Flow Exchange At 31 December
2006 Movement 2007
� � � �
Cash in hand, at bank 10,455,942 (1,168,098) 7,884 9,295,728
Total 10,455,942 (1,168,098) 7,884 9,295,728
4. Loss per Share
The calculation of loss per ordinary share, is based on losses of �1,147,788
(2006: �1,113,712) and the weighted average number of ordinary shares
outstanding of 175,636,364 (2006: 175,636,364). There is no difference between
the diluted loss per share and the basic loss per share presented as the share
options were anti-dilutive.
5. Dividends
No dividend is proposed (2006: �nil).
6. Commitments as at 31 December 2007 and Post balance sheet events
In October 2007 it was announced that the Group had, via a wholly-owned
subsidiary Indoplats Holding Limited, entered into an agreement to become a
shareholder in Majormatic 167 (Proprietary) Limited ("Majormatic"). For commercial
reasons, the contractual party to this agreement was changed to Sarplat
Investments Limited ("Sarplat") and on 2 February 2008, Sarplat, a wholly-owned
subsidiary of the Group, signed a Subscription Agreement and an Interim Funding
and Pledge Agreement concerning its investment in the Naboom Platinum Project.
This commits the Group to subscribing for shares in Majormatic up to a level
of 20% in return for an investment of US$1 million.
This investment will pay for a drilling programme which commenced in January
this year. The Subscription Agreement also provides that Sarplat may, at its
option, increase its stake to 51% of Majormatic in return for a further
investment of US$ 3.5million.
The Interim Funding and Pledge Agreement contains certain suspensive conditions
which, if they are not met, provide for the re-imbursement of all of PMCI's
funding. The prime suspensive condition is that the vendors, Daros Proprietary
Limited ("Daros") procure an Extraordinary General Meeting of shareholders in
Centurion Gold Holdings Inc., ("Centurion") a company incorporated in Florida.
This EGM must pass a resolution to approve the transfer of shares in Majormatic
from Centurion to Daros.
7. Report and Accounts
Copies of the Report and Accounts for the 17 month period ended 31 December 2007
will be posted to all shareholders. Further copies will be available from the
Company at 42, Queen Anne's Gate, London SW1H 9AP, UK from the date of posting.
Enquiries:
PMCI: Charles Zorab 020 7340 0970
WH Ireland: James Joyce 020 7220 1698
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