REG - Botswana Diamonds - Unaudited Interim Statement and Financial Results
31/03/2022 07:01
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RNS Number : 6594G Botswana Diamonds PLC 31 March 2022
31(st) March 2022
Botswana Diamonds PLC ("Botswana Diamonds" or the "the Company")
Unaudited Interim Statement and Financial Results for the Six Months Ended 31
December 2021
Botswana Diamonds (AIM: BOD) is pleased to announce its unaudited interim
results for the six months ended 31 December 2021 during which time the
Company has made significant progress on its diamond development projects at
Thorny River in South Africa and in the Kalahari of Botswana.
Highlights
· The Thorny River project is progressing. A mine development model
will be completed within a month. New gravity surveys have identified four new
targets, three close to existing discoveries.
· An agreement has been reached for the existing shareholders in Maibwe
to acquire 100% of the company.
· An extension to the long stop date of 31(st) March to 10(th) May 2022
to acquire the Ghaghoo Mine has been agreed to finalise discussions with
interested financiers.
Market
The diamond market has seen a rapid and dramatic recovery in recent months
with prices rising by upwards of 40%. Pent up demand and reductions in supply
have led to this rise. If sanctions impact on the supply from Alrosa, the
world's biggest producer then prices will rise further. The increased demand
has come from across the world and in most if not all categories of diamonds.
South Africa
Substantial and significant progress has been made on the Thorny River
project. Additional detailed ground geophysical surveys have identified four
new targets adjacent to the existing discoveries. Three of these are within
two hundred metres of the River and River Extension blows. These four targets
will be drilled in the dry season from June through August. Any discoveries
will add to the current resource. A mine plan for the complex will be
completed within a month.
The acquisition by BOD of the minority shareholding in Vutomi, the holders of
the Thorny River assets, is expected to be completed during Q2 2022 with only
regulatory approval for the transaction outstanding.
Botswana
Agreement has finally been reached with the liquidators of BCL to acquire the
remaining 51% of Maibwe. Following completion of the acquisition Maibwe will
be owned by Future Mineral (50%), Siseko (29%) and BOD (21%). BOD owns 51% of
Siseko so the net interest of BOD will be 36%.
A new work programme will be prepared including modelling of the current
diamond results to optimise a fresh drilling programme.
It has been agreed between Gem Diamonds and BOD to extend the long stop date
of 31(st) March 2022 for the acquisition of the Ghaghoo Mine to 10(th) May
2022 to enable BOD to finalise discussions with interested financiers.
Work continues on the Diamexstrat JV. One area in particular has been
identified which using the most modern evaluation techniques shows compelling
evidence for the presence of undiscovered kimberlites. The analysis is almost
complete after which an exploration programme will be launched.
Corporate
A Company-arranged placing was successfully completed in October 2021 with
existing and new investors to raise £550,000 via the issue of 55,000,000 new
ordinary shares at a placing price of 1p per Placing Share. Each Placing Share
has one warrant attached with the right to subscribe for one new ordinary
share at 2p per new ordinary share for a period of three years from 25 October
2021.
John Teeling
Chairman
30(th) March 2022
_______________
This release has been approved by James Campbell, Managing Director of
Botswana Diamonds plc, a qualified geologist (Pr.Sci.Nat), a Fellow of the
Southern African Institute of Mining and Metallurgy, the Institute of
Materials, Metals and Mining (UK) and the Geological Society of South Africa
and who has over 35-years' experience in the diamond sector.
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014. The person who arranged for the release of this
announcement on behalf of the Company was James Campbell, Director
A copy of this announcement is available on the Company's website, at
www.botswanadiamonds.co.uk (http://www.botswanadiamonds.co.uk)
ENDS
Enquiries:
Beaumont Cornish - Nominated Adviser +44 (0) 020 7628 3396
Michael Cornish
Roland Cornish
Beaumont Cornish Limited - Broker +44 (0) 207 628 3396
Roland Cornish
Felicity Geidt
First Equity Limited - Joint Broker +44 (0) 207 374 2212
Jason Robertson
BlytheRay - PR +44 (0) 207 138 3206
Megan Ray
Rachael Brooks +44 (0) 207 138 3553
Said Izagaren +44 (0) 207 138 3206
Naomi Holmes +44 (0) 207 138 3206
+44 (0) 207 138 3206
Teneo
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell +353 (0) 1 661 4055
Ciara Wylie +353 (0) 1 661 4055
www.botswanadiamonds.co.uk (http://www.botswanadiamonds.co.uk)
Botswana Diamonds plc
Financial Information (Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six Months Six Months Year
Ended Ended Ended
31 Dec 21 31 Dec 20 30 Jun 21
unaudited unaudited audited
£'000 £'000 £'000
Administrative expenses ( 228 ) ( 195 ) ( 402 )
Impairment of exploration and evaluation assets - - ( 70 )
OPERATING LOSS ( 228 ) ( 195 ) ( 472 )
LOSS BEFORE TAXATION ( 228 ) ( 195 ) ( 472 )
Income tax expense - - -
LOSS AFTER TAXATION ( 228 ) ( 195 ) ( 472 )
Exchange difference on translation of foreign operations ( 159 ) 48 ( 85 )
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ( 387 ) ( 147 ) ( 557 )
LOSS PER SHARE - basic and diluted (0.03p) (0.03p) (0.06p)
CONDENSED CONSOLIDATED BALANCE SHEET 31 Dec 21 31 Dec 20 30 Jun 21
unaudited unaudited audited
ASSETS: £'000 £'000 £'000
NON-CURRENT ASSETS
Intangible assets 8,126 8,287 8,194
Plant and equipment 207 - 207
8,333 8,287 8,401
CURRENT ASSETS
Other receivables 16 5 41
Cash and cash equivalents 318 39 165
334 44 206
TOTAL ASSETS 8,667 8,331 8,607
LIABILITIES:
CURRENT LIABILITIES
Trade and other payables ( 650 ) ( 486 ) ( 744 )
TOTAL LIABILITIES ( 650 ) ( 486 ) ( 744 )
NET ASSETS 8,017 7,845 7,863
EQUITY
Share capital - deferred shares 1,796 1,796 1,796
Share capital - ordinary shares 2,124 1,803 1,982
Share premium 11,383 10,734 10,984
Share based payments reserve 111 111 111
Retained Deficit ( 5,933 ) ( 5,427 ) ( 5,705 )
Translation Reserve ( 481 ) ( 189 ) ( 322 )
Other reserves ( 983 ) ( 983 ) ( 983 )
TOTAL EQUITY 8,017 7,845 7,863
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Capital Share Premium Share based payment Retained Deficit Translation Reserve Other Reserve Total
Reserves Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 30 June 2020 3,474 10,564 111 ( 5,232 ) ( 237 ) ( 983 ) 7,697
Issue of shares 125 175 - - - - 300
Share issue expenses - ( 5 ) - - - - ( 5 )
Total comprehensive loss ( 195 ) 48 - ( 147 )
At 31 December 2020 3,599 10,734 111 ( 5,427 ) ( 189 ) ( 983 ) 7,845
Issue of shares 179 250 - - - - 429
Total comprehensive loss - ( 278 ) ( 133 ) - ( 411 )
At 30 June 2021 3,778 10,984 111 ( 5,705 ) ( 322 ) ( 983 ) 7,863
Issue of shares 142 418 - - - - 560
Share issue expenses - ( 19 ) - - - - ( 19 )
Total comprehensive loss - - ( 228 ) ( 159 ) - ( 387 )
At 31 December 2021 3,920 11,383 111 ( 5,933 ) ( 481 ) ( 983 ) 8,017
CONDENSED CONSOLIDATED CASH FLOW Six Months Six Months Year
Ended Ended Ended
31 Dec 21 31 Dec 20 30 Jun 21
unaudited unaudited audited
£'000 £'000 £'000
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the period ( 228 ) ( 195 ) ( 472 )
Impairment of exploration and evaluation assets - - 70
Foreign exchange losses 2 1 ( 4 )
( 226 ) ( 194 ) ( 406 )
Movements in Working Capital ( 69 ) 73 95
NET CASH USED IN OPERATING ACTIVITIES ( 295 ) ( 121 ) ( 311 )
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to exploration and evaluation assets ( 91 ) ( 152 ) ( 263 )
NET CASH USED IN INVESTING ACTIVITIES ( 91 ) ( 152 ) ( 263 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue 560 300 729
Share issue costs ( 19 ) ( 5 ) ( 5 )
NET CASH GENERATED FROM FINANCING ACTIVITIES 541 295 724
NET INCREASE IN CASH AND CASH EQUIVALENTS 155 22 150
Cash and cash equivalents at beginning of the period 165 18 18
Effect of foreign exchange rate changes ( 2 ) ( 1 ) ( 3 )
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD 318 39 165
Notes:
1. INFORMATION
The financial information for the six months ended 31 December 2021 and the
comparative amounts for the six months ended 31 December 2020 are unaudited.
The financial information above does not constitute full statutory accounts
within the meaning of section 434 of the Companies Act 2006.
The Interim Financial Report has been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the European Union.
The accounting policies and methods of computation used in the preparation of
the Interim Financial Report are consistent with those used in the Group 2021
Annual Report, which is available at www.botswanadiamonds.co.uk
(http://www.botswanadiamonds.co.uk)
The interim financial statements have not been audited or reviewed by the
auditors of the Group pursuant to the Auditing Practices board guidance on
Review of Interim Financial Information.
2. DIVIDEND
No dividend is proposed in respect of the period.
3. LOSS PER SHARE
Basic loss per share is computed by dividing the loss after taxation for the
period available to ordinary shareholders by the weighted average number of
ordinary shares in issue and ranking for dividend during the period.
Diluted loss per share is computed by dividing the loss after taxation for the
period by the weighted average number of ordinary shares in issue, adjusted
for the effect of all dilutive potential ordinary shares that were outstanding
during the period.
The following table sets forth the computation for basic and diluted earnings
per share (EPS):
Six Months Ended Six Months Ended
31 Dec 21 31 Dec 20 Year Ended
30 Jun 21
£'000 £'000 £'000
Numerator
For basic and diluted EPS retained loss (228) (195) (472)
No. No. No.
Denominator
Weighted average number of ordinary shares 813,171,948 702,728,751 739,571,217
Loss per share - Basic and Diluted (0.03p) (0.03p) (0.06p)
The following potential ordinary shares are anti-dilutive and are therefore
excluded from the weighted average number of shares for the purposes of the
diluted earnings per share:
No. No. No.
Share options 11,410,000 11,410,000 11,410,000
4. INTANGIBLE ASSETS
31 Dec 21 31 Dec 20 30 June 21
Exploration and evaluation assets: £'000 £'000 £'000
Cost:
Opening balance 9,563 9,385 9,385
Additions 91 153 263
Exchange variance (159) 48 (85)
9,495 9,586 9,563
Impairment:
Opening balance 1,369 1,299 1,299
Provision for impairment - - 70
1,369 1,299 1,369
Carrying Value:
Opening balance 8,194 8,087 8,087
Closing balance 8,126 8,287 8,194
Regional Analysis 31 Dec 21 31 Dec 20 30 Jun 21
£'000 £'000 £'000
Botswana 6,925 7,130 7,043
South Africa 1,201 1,109 1,151
Zimbabwe - 48 -
8,126 8,287 8,194
Exploration and evaluation assets relate to expenditure incurred in
exploration for diamonds in Botswana and South Africa. The directors are aware
that by its nature there is an inherent uncertainty in exploration and
evaluation assets and therefore inherent uncertainty in relation to the
carrying value of capitalized exploration and evaluation assets.
During the prior year, the Group incurred expenditure of £58,815 on exploring
for new licences in Zimbabwe and £11,203 miscellaneous costs. As at year end
no licences had been granted. Therefore, the directors decided to impair the
costs. Accordingly, an impairment of £70,018 had been recorded by the Group
in the prior.
On 6 February 2017 the Group entered into an Option and Earn-In Agreement with
Vutomi Mining Pty Ltd and Razorbill Properties 12 Pty Ltd (collectively known
as 'Vutomi'), a private diamond exploration and development firm in South
Africa. Pursuant to the terms of the Agreement, Botswana Diamonds earned a 40%
equity interest in the project. More recently a separate agreement for funding
of exploration resulted in the Company's interest in Vutomi increasing from
40% to 45.94%.
On 29 September 2021 the Company exercised its pre-emptive right to acquire
the outstanding third-party interests in Vutomi Mining (Proprietary)
Limited and Razorbill Properties 12 (Proprietary) Limited. Vutomi holds the
mineral rights to the Thorny River Diamond Project as well as other
exploration assets.
The consideration for Vutomi comprises 56,989,330 new ordinary shares in
Botswana Diamonds plc which, at the closing mid-market price on 28 September
2021 of 1.10p per share, is valued at £626,883. There are no lock-in
arrangements, but the consideration shares will be issued in two equal
tranches (three months apart) following Completion. Completion is subject to
a number of conditions (with a long stop date of 22 September 2022 unless
otherwise agreed between the parties).
The Company expects the conditions to be fulfilled and the transaction to
complete during Q2 2022.
The Company has further agreed that, immediately on completion of the
acquisition, the Company will sell 26% of Vutomi for a deferred consideration
of US$316,333 to the Company's local South African Empowerment partner,
Baroville, in order to comply with South African requirements on empowerment
ownership, which will be funded by a loan from Botswana Diamonds.
On completion, the Company will own 74% of Vutomi.
The realisation of these intangible assets is dependent on the successful
discovery and development of economic diamond resources and the ability of the
Group to raise sufficient finance to develop the projects. It is subject to a
number of significant potential risks, as set out below:
· licence obligations;
· exchange rate risks;
· uncertainties over development and operational costs;
· political and legal risks, including arrangements with
governments for licenses, profit sharing and taxation;
· foreign investment risks including increases in taxes, royalties
and renegotiation of contracts;
· title to assets;
· financial risk management;
· going concern; and
· operational and environmental risks.
Included in additions for the period are £6,500 (June 2021: £14,225) of
wages and salaries and £35,831 (June 2021: £65,553) of directors
remuneration which has been capitalized. This is for time spent directly on
the operations rather than on corporate activities.
5. PLANT AND EQUIPMENT
31 Dec 21 31 Dec 20 30 Jun 21
£'000 £'000 £'000
At 1 July 207 - -
Additions - - 207
At 30 June 207 - 207
On 18 July 2020 the Group entered into an agreement to acquire the KX36
Diamond discovery in Botswana, along with two adjacent Prospecting Licences
and a diamond processing plant. These interests are part of a package held by
Sekaka Diamond Exploration (Pty) Ltd. The acquisition was completed on 20
November 2020. The diamond processing plant is a recently constructed,
fit-for-purpose bulk sampling plant on site. The sampling plant includes
crushing, scrubbing, dense media separation circuits and x-ray recovery
modules within a secured area.
6. SHARE CAPITAL
Deferred Shares - nominal value of 0.75p per share Number Share Capital Share Premium
£'000 £'000
At 1 July 2020 and 1 July 2021 239,487,648 1,796,157 -
At 30 June 2021 and 31 December 2021 239,487,648 1,796,157 -
Ordinary Shares - nominal value of 0.25p per share Number Share Capital Share Premium
£'000 £'000
At 1 July 2020 671,221,902 1,678 10,564
Issued during the period 50,000,000 125 175
Share issue expenses - - (5)
At 31 December 2019 721,221,902 1,803 10,734
Issued during the period 71,500,000 179 250
Share issue expenses - - -
At 30 June 2021 792,721,902 1,982 10,984
Issued during the period 56,683,333 142 418
Share issue expenses - - (19)
At 31 December 2021 849,405,235 2,124 11,383
Movements in share capital
On 7 September 2020, the Company raised £300,000 through the issue of
50,000,000 new ordinary shares of 0.25p each at a price of 0.60p per share to
provide additional working capital and fund development costs. Each placing
share has one warrant attached with the right to subscribe for one new
ordinary share at 0.6p per share for a period of two years from 7 September
2020.
On 22 January 2021, the Company raised £363,000 through the issue of
60,500,000 new ordinary shares of 0.25p each at a price of 0.60p per share to
provide additional working capital and fund development costs. Each placing
share has one warrant attached with the right to subscribe for one new
ordinary share at 0.6p per share for a period of two years from 23 January
2021.
On 13 May 2021, a total of 11,000,000 warrants
were exercised at a price of 0.60p per warrant for £66,000.
On 25 October 2021, the Company raised £550,000
through the issue of 55,000,000 new ordinary shares of 0.25p each at a price
of 1p per share to provide additional working capital and fund development
costs. Each placing share has one warrant attached with the right to subscribe
for one new ordinary share at 2p per share for a period of three years from 5
November 2021.
On 3 December 2021, a total of 1,683,333 warrants
were exercised at a price of 0.60p per warrant for £10,100.
7. SHARE BASED PAYMENTS
WARRANTS
Dec 2021 Jun 2021 Dec 2020
Number of Warrants Weighted average exercise price in pence Number of Warrants Weighted average exercise price in pence Number of Warrants Weighted average exercise price in pence
Outstanding at beginning of the period 139,166,667 0.60 155,939,394 0.60 105,939,394 0.60
Issued 55,000,000 2 60,500,000 0.60 50,000,000 0.60
Exercised (1,683,333) 0.60 (11,000,000) 0.60 - -
Expired - - (66,272,727) 0.60 - -
Outstanding at end of the period 192,483,334 1 139,166,667 0.60 155,939,394 0.60
Further information of the warrants are detailed in Note 6 above.
8. POST BALANCE SHEET EVENTS
On 20 January 2022 the Company announced pursuant to the receipt of conversion
notices from holders of 29,666,667 warrants exercisable at 0.60 pence each, it
had issued 29,666,667 ordinary shares of £0.0025 each at the exercise price
of 0.60 pence per new share. The proceeds of the exercise of £178,000 will be
used for additional working capital.
On 1 February 2022 the Company released a statement regarding a joint venture
with Vast Resources plc ("VAST") that was previously announced in August 2021.
The company had announced in August 2021 that Okwa Diamonds Pty Ltd ("Okwa"),
a joint venture with VAST in which the Company has an initial 10% carried
interest, had conditionally agreed to acquire Gem Diamonds Botswana Pty Ltd
("GDB"), a wholly owned subsidiary of Gem Diamonds Ltd ("Gem Diamonds"), for a
cash consideration of US$4 million.
Under the terms of the joint venture agreement, VAST was responsible for
funding Okwa with the first US$15 million of funding required for the purposes
of carrying out due diligence, acquiring GDB and placing the mine back into
production. Completion was subject to a number of conditions (with a long stop
date of 31 January 2022) including relevant regulatory and competition
authority approvals within Botswana which have now been fulfilled and written
approvals have been obtained from the Competition Authority and, most recently
in December 2021, the Ministry of Mineral Resources, Green Energy and
Technology of the Government of the Republic of Botswana.
On 1 February 2022 VAST informed the Boards of Botswana Diamonds and Gem
Diamonds that they did not intend to proceed with the transaction.
The Board of BOD has identified alternative potential partners to replace VAST
as its joint venture partner in Okwa and confirmed to Gem Diamonds its
commitment to conclude the transaction as originally envisaged as soon as
possible. BOD, VAST and Gem Diamonds have been working together towards a
mutually beneficial outcome and agreed initially to extend the long stop date
under the sale agreement from 31 January 2022 to 31 March 2022, and which has
now been extended further to DATE 2022, to allow BOD to secure an
alternative joint venture partner. The new partner replacing VAST in the Okwa
joint venture may require further approval from the relevant Government of
Botswana authorities.
9. APPROVAL
The Interim Report for the period to 31(st)
December 2021 was approved by the Directors on 30(th) March 2022.
10. AVAILABILITY OF REPORT
The Interim Statement will be available on the
website at www.botswanadiamonds.co.uk (http://www.botswanadiamonds.co.uk)
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