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Tbx - Thabex Limited - - Summarised Audited Group Results For The Year Ended

Release Date: 21/10/2011 15:44:02      Code(s): TBX
TBX - Thabex Limited - - Summarised Audited Group Results for the year ended    
28 February 2011 and Notice of Annual General Meeting                           
THABEX LIMITED                                                                  
("Thabex" or "the Company" or "the Group")                                      
Registration No 1988/000763/06                                                  
(Incorporated in the Republic of South Africa)                                  
JSE share code: TBX      ISIN Code: ZAE000013686                                
Young Lions Exploring Africa                                                    
SUMMARISED AUDITED GROUP RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2011 AND        
NOTICE OF ANNUAL GENERAL MEETING                                                
SUMMARISED CONSOLIDATED STATEMENT         As at      As at                      
OF FINANCIAL POSITION                                                           
                                         28         28                          
                                         February   February                    
                                         2011       2010                        
Audited    Audited                     
                                   Notes R`000      R`000                       
Assets                                                                          
Non-current assets                        17 476     18 448                     
Plant and equipment                     3 237      4 209                       
 Exploration and evaluation              14 239     14 239                      
assets                                                                          
Current assets                            1 601      2 088                      
Inventories                             666        1 516                       
 Short-term trading investments          24         33                          
 Trade and other receivables             855        486                         
 Cash and cash equivalents               56         53                          
Total assets                              19 077     20 536                     
Equity and liabilities                                                          
Capital and reserves                                                            
 Share capital                           2399        2 399                      
Share premium                           27 975     27 975                      
 Accumulated loss                        (23 477)   (21 493)                    
Total equity attributable to the          6 897      8 881                      
equity holders of the parent                                                    
Non-controlling shareholders`           2 026      2 431                       
interest                                                                        
Total equity                              8 923      11 312                     
Non-current liabilities                   1 937      1 937                      
Loans and borrowings                    1 937      1 937                       
Current liabilities                       8 217      7 287                      
 Bank overdraft                          196        -                           
 Trade and other payables                3 501      3 442                       
Short-term loans                  2     4 045      3 370                       
 Taxation payable                        475        475                         
Total equity and liabilities              19 077     20 536                     
                                                                                
Year       Year                        
                                         ended      ended                       
                                         28         28                          
                                         February   February                    
2011       2010                        
                                         Audited    Audited                     
SUMMARISED CONSOLIDATED STATEMENT                                               
OF COMPREHENSIVE INCOME                                                         
Revenue                                   409        421                        
Cost of sales                             (333)       (293)                     
Gross profit                              76         128                        
Other income                              544        4 490                      
Administrative expenses                   (1 163)    (2 579)                    
Other expenses                            (3 067)    (5 715)                    
Operating loss                            (3 610)    (3 676)                    
Finance income                            3          463                        
Finance expenses                          (26)       (6)                        
Loss before taxation                      (3 633)    (3 219)                    
Taxation                                  -          285                        
Loss for the year                         (3 633)     (2 934)                   
Other comprehensive income                                                      
Net change in fair value of                                                     
available for sale                                                              
financial assets                          -          82                         
Net change in fair value of                                                     
available for sale                                                              
financial assets reclassified to          -          (82)                       
profit or loss                                                                  
Other comprehensive income for            -          -                          
the year                                                                        
Loss/total comprehensive loss for         (3 633)    (2 934)                    
the year                                                                        
Attributable to:                                                                
 Equity holders of the parent            (3 017)    (1 431)                     
 Non-controlling shareholders`           (616)      (1 503)                     
interest                                                                        
Basic loss per share (cents)        3     (1.26)     (0.63)                     
Diluted loss per share (cents)      3     (1.26)     (0.63)                     
                                                                                
                                         Year       Year                        
ended      ended                       
                                         28         28                          
                                         February   February                    
                                         2011       2010                        
Audited    Audited                     
SUMMARISED CONSOLIDATED STATEMENT                                               
OF CASH FLOWS                                                                   
Net cash outflow from operating           (1 447)    (7 931)                    
activities                                                                      
Net cash inflow from investing            9          4 003                      
activities                                                                      
Net cash inflow from financing            1 244      3 933                      
activities                                                                      
Increase in cash and cash                 (194)      5                          
equivalents                                                                     
Cash at beginning of year                 53         48                         
Cash at end of year                       (141)      53                         
SUMMARISED CONSOLIDATED STATEMENT                                               
OF CHANGES IN EQUITY                                                            
Share Capital                             2 399       2 399                     
Issue of ordinary shares                -           120                        
 Share capital at the beginning          2 399       2 279                      
of the period                                                                   
Share Premium                             27 975      27 975                    
Share premium on issue of               -           720                        
ordinary shares                                                                 
 Share issue expenses                    -           (5)                        
 Share premium at the beginning          27 975      27 260                     
of the period                                                                   
Accumulated loss at end of the            (23 477)    (21 492)                  
period                                                                          
 Loss and total comprehensive            (3 017)     (1 431)                    
loss for the year                                                               
 Changes in ownership interests                                                 
in subsidiaries                                                                 
 that do not result in a loss of         1 032      -                           
control                                                                         
 Accumulated loss at the                 (21 492)    (20 061)                   
beginning of the period                                                         
Total equity attributable to the          6 897      8 882                      
equity holders of the parent                                                    
Non-controlling shareholders`             2 026      2 430                      
interest at end of the period                                                   
  Loss and total comprehensive           (616)       (1 503)                    
loss for the period                                                             
 Changes in ownership interests                                                 
in subsidiaries                                                                 
 that do not result in a loss of   1     212        3 933                       
control                                                                         
 Non-controlling shareholders`           2 430      -                           
interest at beginning of   the                                                  
period                                                                          
Total equity                              8 923      11 312                     
                                                                                
                                         Year       Year                        
                                         ended      ended                       
28         28                          
                                         February   February                    
                                         2011       2010                        
                                         Audited    Audited                     
SEGMENTAL ANALYSIS                                                              
Total segment assets                                                            
Thabex Limited                            15 656    16 377                      
Tradepost 121 (Pty) Limited -             7 173     4 791                       
Monastery Mine                                                                  
Salt River Resources (Pty) Limited        7 367     7 356                       
Angel Diamonds (Pty) Limited              2 030     1 824                       
Minnex Exploration (Pty) Limited          751       4 712                       
Reportable assets                         32 977    35 060                      
Assets not allocated to segments          57        110                         
Consolidation adjustments and             (13 957)  (14 634)                    
inter-company eliminations                                                      
Total assets                              19 077    20 536                      
Total segment liabilities                                                       
Thabex Limited                            7 234     6 708                       
Tradepost 121 (Pty) Limited -             3 161     2 349                       
Monastery Mine                                                                  
Salt River Resources (Pty) Limited        8 641     159                         
Angel Diamonds (Pty) Limited              2 657     413                         
Minnex Exploration (Pty) Limited          830       564                         
Reportable liabilities                    22 524    10 193                      
Liabilities not allocated to              3 088     134                         
segments                                                                        
Consolidation adjustments and             (15 458)  (1 103)                     
inter-company eliminations                                                      
Total liabilities                         10 154    9 224                       
External revenue                                                                
Thabex Limited                            372       421                         
Tradepost 121 (Pty) Limited               37        -                           
Total external revenue                    409       421                         
Finance income                                                                  
Thabex Limited                            2         353                         
Salt River Resources (Pty) Limited        1         3                           
Minnex Exploration (Pty) Limited          -         107                         
                                         3         463                          
Finance expense                                                                 
Thabex Limited                            8         5                           
Angel Diamonds (Pty) Limited              18        1                           
                                         26        6                            
Segment (loss)/profit                                                           
Thabex Limited                            (1 248)   (1 972)                     
Tradepost 121 (Pty) Limited -             (1 094)   (530)                       
Monastery Mine                                                                  
Salt River Resources (Pty) Limited        153       (661)                       
Angel Diamonds (Pty) Limited              (1 330)    (3 820)                    
Minnex Exploration (Pty) Limited          (54)       (18)                       
Reportable loss                           (3 573)   (7 001)                     
Other subsidiaries                        (245)     (342)                       
Consolidation adjustments and             185       4 124                       
inter-company eliminations                                                      
Loss before taxation                      (3 633)    (3 219)                    
Notes:                                                                          
1. Effect of disposal of 0.82% in Salt River Resources (Proprietary) Limited    
("SRR"), 8.00% in Tradepost 121 (Proprietary) Limited and 3.00% in Monastery    
Holdings (Proprietary) Limited has been recognised directly in equity.          
2. The short term loan advanced by Dr JA Cruise, a related party (Non-          
executive Chairman of SRR a subsidiary of Thabex), who has undertaken not to    
request repayment until such date that the Group`s current assets reasonably    
exceed its current liabilities.                                                 
3. On 23 April 2010 the Company`s shares were sub-divided from 1 to 10 as per   
the Special resolution approved on 19 February 2010. The weighted average       
number of shares in issue at 28 February 2011 is 239 868 870 (2010: 227 901     
747).                                                                           
Review of results                                                               
Operating loss                                                                  
The Group incurred a loss for the year of R3.63 million (2010: loss of R2.93    
million). The headline loss per share changed from 2.21 cents for the year      
ended 28 February 2010 to a headline loss of 1.26 cents per share for the       
year ended 28 February 2011. The net asset value per share of the Group         
decreased from 4.72 cents per share at 28 February 2010 to 2.88 cents per       
share as at 28 February 2011.                                                   
Headline loss per share                                                         
Year      Year ended                    
                                        ended                                   
                                        28        28                            
                                        February  February                      
2011      2010                          
                                        Audited   Audited                       
Headline loss per share (cents)          (1.26)    (2.21)                       
Diluted headline loss per share          (1.26)    (2.21)                       
(cents)                                                                         
RECONCILIATION OF HEADLINE LOSS          R`000     R`000                        
Reconciliation between loss and                                                 
headline loss                                                                   
Loss attributable to ordinary            (3 017)   (1 431)                      
shareholders                                                                    
Loss on disposal of plant and            -         45                           
equipment                                                                       
Profit on disposal of interest           -         (3 647)                      
in subsidiary                                                                   
Headline loss                            (3 017)   (5 033)                      
Net asset value per share                                                       
Number of shares in issue                239 868   239 868                      
                                        870       870                           
Net asset value per share                2.88      4.72                         
(cents)                                                                         
Net tangible asset value per             (3.06)    (1.22)                       
share (cents)                                                                   
Going concern                                                                   
The Group incurred a net loss of R3.63 million (2010: loss of R2.93 million)    
for the year ended 28 February 2011. At that date, the Group`s current          
liabilities exceeded its current assets by R6.61 million (2010: current         
liabilities exceeded current assets by R5.20 million) (see note 2 above).       
The board has considered the ability of the Company and its subsidiaries to     
continue as going concerns and based on reasonable and supportable              
assumptions, have concluded that the forecast levels of production and the      
future benefits of the continuing prospecting operations of Monastery Mine,     
an indirect subsidiary of Thabex, will produce sufficient cash flows to allow   
the Company and its subsidiaries to meet their obligations in the normal        
course of business for the foreseeable future.                                  
Should the operations of the subsidiary fail to achieve forecast cash flows,    
there will be a material uncertainty that may cast doubt on the ability of      
the Company and its subsidiaries to continue as going concerns. The cash flow   
assumptions are based on a production rate of 10 000 tons per month at an       
average grade of 25cpht (carats per hundred tons) and a conservatively          
modelled rough diamond price of US$150/ct and an exchange rate of R/US$7.00.    
Contingent liabilities                                                          
In the annual financial statements for the year ended 28 February 2010, the     
Group reported a contingent liability of R5.81 million against possible legal   
action from Mantle Diamonds Limited ("Mantle Diamonds") for expenditure         
incurred by that company for their own account and risk on the Kolo             
Kimberlite project in Angel Diamonds (Proprietary) Limited ("Angel              
Diamonds"). Thabex`s board do not consider there to be a likelihood of          
success by Mantle Diamonds should they institute a claim especially as Mantle   
Diamonds did not oppose the liquidation application of Angel Diamonds. This     
however remains a contingent liability to Angel Diamonds in the annual          
financial statements for the year ended 28 February 2011.                       
Basis of preparation                                                            
These Group financial results for the year ended 28 February 2011 constitute    
a summary (prepared in accordance with the JSE Listings Requirements, the       
South African Companies Act (Act 61 of 1973) as amended, and the recognition    
and measurement requirements of International Financial Reporting Standards     
and the presentation and disclosure requirements of International Accounting    
Standard 34 Interim Financial Reporting (IAS 34) and the AC 500                 
interpretations as issued by the Accounting Practices Board of the South        
African Institute of Chartered Accountants) of the Group`s audited financial    
statements. The Group has applied the IFRS`s applicable to the year ended on    
28 February 2011 and has not early adopted any new or revised standards         
applicable after that date.                                                     
The accounting policies applied by the Group in these summarised consolidated   
financial statements are consistent with those applied in the previous year,    
except for the following:                                                       
From 1 March 2010 the Group has applied IAS 27 Consolidated and Separate        
Financial Statements (2008) in accounting for changes in ownership interest     
in subsidiaries without loss of control. The change in accounting policy has    
been applied prospectively and has had no impact on the prior periods           
presented. The surpluses on disposal of shares in subsidiaries which do not     
result in a loss of control were previously credited/charged to the statement   
of comprehensive income whereas they are now recognised directly in equity in   
the consolidated annual financial statements.                                   
The amendments also require that losses (including negative `other              
comprehensive income` as detailed in the revised IAS 1 (AC 101) Presentation    
of Financial Statements (2007)) have to be allocated to the non-controlling     
interest even if doing so causes the non-controlling interest to be in a        
deficit position. In the past losses were allocated only until the non-         
controlling interests had a zero balance. The change in accounting policy was   
applied prospectively and the impact on earnings per share for the current      
year is shown above.                                                            
Dividends                                                                       
No dividend has been declared during the year under review (2010: nil).         
Directors` Responsibility for the Summary Financial Statements                  
The directors are responsible for the preparation of the summary financial      
statements on the basis determined by management.                               
Auditor`s Responsibility                                                        
Our responsibility is to express an opinion on the summary group annual         
financial statements based on our procedures, which were conducted in           
accordance with International Standard on Auditing 810, Engagements to Report   
on Summary Financial Statements.                                                
Denial of Opinion                                                               
In our auditor`s report dated 20 October 2011, we expressed a disclaimer of     
opinion on the group annual financial statements of Thabex Limited for the      
year ended 28 February 2011. The basis for our disclaimer of opinion was due    
to our inability to obtain sufficient appropriate audit evidence regarding      
the appropriateness of management`s use of going concern assumption in the      
preparation of the group annual financial statements, as well as regarding      
the necessity of impairment of a significant exploration and evaluation         
asset.                                                                          
Our disclaimer of opinion stated that "the going concern note in the            
director`s report indicates that the board has considered the ability of the    
company and its subsidiaries to continue as going concerns and, based on        
reasonable and supportable assumptions, has concluded that the forecast level   
of production and future benefits of the continuing prospecting operations of   
Monastery Mine (Pty) Ltd, a subsidiary, will produce sufficient cash flows to   
allow the company and its subsidiaries to meet their obligations in the         
normal course of business for the foreseeable future. We were unable to         
obtain sufficient appropriate audit evidence to satisfy ourselves that the      
assumptions applied by the board in preparing the going concern assessment      
are reasonable and supportable.                                                 
An exploration and evaluation asset held by the company through its             
subsidiary, Minnex Exploration Limited, is carried at R4 582 198 in the         
consolidated statement of financial position at 28 February 2011. We were       
unable to obtain sufficient appropriate audit evidence about whether the        
relative prospecting permit has been renewed and whether further exploration    
expenditure is planned. Consequently, we were unable to determine whether any   
impairment of this asset is necessary.                                          
The potential interaction and possible cumulative effects of these matters      
are considered material and pervasive to the financial statements of the        
company and its subsidiaries reflected in these financial statements".          
Disclaimer of Opinion                                                           
Because of the significance of the matters discussed in the preceding           
paragraphs above, it is inappropriate to express an opinion on the summary      
group annual financial statements of Thabex Limited for the year ended 28       
February 2011.                                                                  
Commentary                                                                      
Diamonds in the Kingdom of Lesotho                                              
Angel Diamonds submitted an application for a Mining License ("ML") to the      
Commissioner of Mines in Lesotho on 12 December 2008. The legal matters         
regarding Angel Diamonds have been reported in detail on SENS. Even though      
the Liquidation Application on 8 October 2010 by Mr TP Mosebo, a director of    
Angel Diamonds, was discharged with costs, it has come to the attention of      
the board that, on the very same day Mr Mosebo applied for liquidation of       
Angel Diamonds, a new company, Reskol Diamond Mining (Proprietary) Limited      
("Reskol") was registered in the Kingdom of Lesotho, with Messrs Mosebo and     
Engelbrecht as shareholders and directors. Any purported granting of a ML to    
Reskol is considered as sub judice.                                             
On 3 October 2011 the Company announced on SENS that Thabex and others have     
successfully obtained an interim interdict in the High Court of Lesotho         
against, inter alia, Reskol not to remove Angel Diamond`s plant and equipment   
from the Kolo Kimberlite site area.                                             
The most disturbing aspect of the legal route taken by three non-controlling    
shareholders is the fact that neither these non-controlling shareholders, the   
provisional liquidators nor the Commissioner of Mines and Geology of Lesotho    
are able or willing to account for the 1 000 carats produced during the         
period Mantle Diamonds was involved in the project. Furthermore, it appears     
that all fiduciary duties owing by Messrs Mosebo and Engelbrecht, as High       
Court appointed managers of Angel Diamonds to that company, at the time, were   
flouted by them. The theft of the rough diamonds was reported to the Diamond    
Theft Squad of the Royal Mounted Police of the Kingdom of Lesotho and also to   
the Kimberley Process Secretariat.                                              
Diamonds in South Africa                                                        
Minnex Exploration (Proprietary) Limited ("Minnex")                             
Minnex has a 2.5% royalty agreement on turnover with Steyn Diamante CC once     
alluvial diamond mining commences on the Farm Middelwater about 40km north of   
Prieska in the Northern Cape Province. As at the date of this report Minnex     
has not been able to obtain a copy of the renewal of the Prospecting Permit     
on this farm from Steyn Diamante CC.                                            
Monastery Mine (Proprietary) Limited ("Monastery")                              
Monastery is situated about 15km south of the town of Marquard in the Free      
State Province. Prospecting activities have so far consisted of sampling,       
analysis and metallurgical test.  Dry Harts Diamonds has commenced processing   
the oxidised dump south of the open pit area of the Monastery Kimberlite        
pipe. Since the commencement of the oxidised dump testing during July 2010 to   
date, a total of 842 carats rough diamonds have been produced, including the    
production by Dry Harts Diamonds. The largest rough diamond recovered was a     
23.93ct pure diamond and the second largest was a high quality 9.95ct pure      
diamond. The bottom cut-off screen size on the 14 Foot Gravity Rotary Pan       
utilised for the processing of the oxidised dump material is 3mm.               
Diamonds in Namibia                                                             
Minnex Exploration Namibia (Proprietary) Limited ("Minnex Namibia") (an 80%     
subsidiary of Minnex                                                            
Minnex Namibia has applied for an extension of the prospecting rights to the    
two Exclusive Prospecting License areas during July 2011.                       
Directorate                                                                     
The following changes to the board of Thabex occurred during the period under   
review, up to and including the date of this report, Mr Joseph Ratshedi was     
appointed as an executive director on 14 May 2010 and Mr CJ Engelbrecht         
resigned from the board as an executive director on 15 April 2010.              
Subsequent events                                                               
On 7 November 2010, a non-controlling shareholder of Angel Diamonds, Mr CV du   
Plessis ("the Applicant") holding 4.33% of the issued share capital, applied    
for the liquidation of Thabex. The matter was heard on 24 and 26 August 2011    
and judgment was reserved. Other than this matter and the information           
disclosed in the Commentary paragraph above relating to the diamonds in the     
Kingdom of Lesotho and the Monastery Mine, the board of Thabex is not aware     
of any material events or circumstances that have occurred between the end of   
the 2011 financial year and the date of this report, which may have a           
material impact on the Group.                                                   
Future prospects                                                                
Although production results from the oxidised dump at Monastery Mine confirms   
that the number of gem quality rough diamonds in the Monastery Kimberlite are   
at least 20% as previously reported, further metallurgical testing at           
Monastery is necessary to ensure the turning to account of this project. SRR    
is continuing to conduct a pre-feasibility study of the Salt River Base         
Mineral Project. SRR has not been able to secure funding to complete a          
Bankable Feasibility Study of its poly-metallic (Cu-Pb-Zn-Ag-Au) project in     
the Kenhardt district of the Northern Cape Province and is considering          
several funding options to proceed. Save for the litigation regarding the       
granting of the Mining License in the Kingdom of Lesotho, no other changes in   
the mineral information of the Company have occurred during year under          
review.                                                                         
Notice of annual general meeting                                                
Notice is hereby given that the annual general meeting of shareholders of       
Thabex will be held on Wednesday, 23 November 2011 at 10:00 at KPMG Forum,      
1226 Schoeman Street, Hatfield, Pretoria, 0083 to conduct the business stated   
in the notice of the annual general meeting, which is contained in the annual   
report.                                                                         
On behalf of the board                                                          
Jeffrey Raymond Rapoo                                                           
Chairman                                                                        
Marius Welthagen                                                                
Chief Executive                                                                 
Johannesburg                                                                    
21 October 2011                                                                 
Registered office:                                                              
51 Austin Street, Northcliff, Johannesburg, 2195                                
Auditors: KPMG Inc. KPMG Forum, 1226 Schoeman Street, Hatfield, Pretoria,       
0083                                                                            
Company secretaries: SA Mineral Investments (Proprietary) Limited               
51 Austin Street, Northcliff, Johannesburg, 2195                                
Transfer secretaries: Link Market Services South Africa (Proprietary) Limited   
11 Diagonal Street, Johannesburg, 2001                                          
Telephone number: +27 11 678 0791                                               
Website: www.thabex.com                                                         
E-mail: info@thabex.com                                                         
Sponsor: Merchantec Capital, 2nd Floor, North Block, Hyde Park Office Tower,    
Corner 6th Rd and Jan Smuts Ave, Hyde Park                                      
Directorate: JR Rapoo (Chairman), M Welthagen (CEO)*, Dr JW Kruger#, M          
Kamwanga (Financial Director)*##, RM Ratchedi*, Prof DL Reid**, AP Roux         
*Executive director, #Independent director, ** New Zealand, ##Democratic        
Republic of the Congo                                                           
Date: 21/10/2011 15:44:01 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
The SENS service is an information dissemination service administered by the    
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or            
implicitly, represent, warrant or in any way guarantee the truth, accuracy or   
completeness of the information published on SENS. The JSE, their officers,     
employees and agents accept no liability for (or in respect of) any direct,     
indirect, incidental or consequential loss or damage of any kind or nature,     
howsoever arising, from the use of SENS or the use of, or reliance on,          
information disseminated through SENS.                                          



                                        
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