REG - Botswana Diamonds - Unaudited Interim Statement and Financial Results
25/03/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240325:nRSY0432Ia&default-theme=true
RNS Number : 0432I Botswana Diamonds PLC 25 March 2024
25 March 2024
Botswana Diamonds PLC ("Botswana Diamonds", "BOD" or the "the Company")
Unaudited Interim Statement and Financial Results for the Six Months Ended 31
December 2023
In turbulent times I am pleased to share some positive developments in
Botswana Diamonds.
• A gravity survey has discovered a high-grade anomaly
similar in size or larger than BOD's KX36 high-grade kimberlite pipe in the
Kalahari.
• Positive progress on the awarding of the Thorny River
Mining Permits.
• There is renewed interest in the Ghaghoo diamond mine.
• A Prospecting Licence was granted over diamond properties
in Eswatini after a long application period.
Market
While the diamond market was depressed throughout 2023, it is important to
recognise that it is the long term trend which is important for the diamond
industry, and particularly for explorers. Meanwhile 2024 has started in more
positive fashion with diamond sales taking place and a semblance of stability
after a difficult last year.
We believe that the long-term outlook for mined diamonds remains strong. Over
the next 20 years up to 3 billion people will enter the Middle Class. These
new Asian and African consumers will want many of the products purchased in
the West including diamonds. Lab grown diamonds will take a share of the
overall growing market but there are strong indications that the rarity of
natural mined diamonds will always prevail and be valued.
Any discovery by BOD in 2024 is unlikely to come into production before 2032.
But it is important to realise that the shareholder base for explorers differs
radically from that of producers. A successful diamond find would be expected
to ratchet up the share price and provide liquidity for shareholders wishing
to cash out.
Botswana
The Kalahari is likely to become the third main diamond producing area in
Botswana. It is the area where BOD is focused.
Earlier this year a gravity survey on a licence adjacent to our KX36 diamond
discovery found a high-grade anomaly. Current indicators are that the anomaly
is as big or bigger than KX36. Further work needs to be done on this
anomaly. An Environmental Impact Study is underway. Follow-up drilling is
likely. Kimberlites are found in clusters. The discovery of the new anomaly
strongly indicates that more will be discovered in the surrounding area. BOD
has applied for further ground in the area and is hopeful for expeditious
award of the licences.
The KX36 project is a 3.5 hectares ("Ha") kimberlite pipe in the Kalahari. The
pipe has resources of 17.9 million tonnes ("Mt") at 35 carats per hundred
tonnes ("cpht") (indicated) and 6.7Mt at 36 cpht (inferred) at $65 per carat
("/ct"). The modelled grade range is 57-76 cpht at an estimated diamond value
of up to $107/ct.
The Board understands there is interest from a new investor in acquiring the
Ghaghoo mine. Ghaghoo, which is currently on care and maintenance, together
with KX36, and the new anomaly, if diamondiferous, and the Maibwe licences in
which BOD is a joint venture partner, could provide the core for a new
diamond-producing area in Botswana.
I have written before about the extensive diamond data base held by BOD. We
are examining a proposal to use Data Analytics and Artificial Intelligence
techniques to evaluate the data. We strongly believe that this approach will
identify new targets.
South Africa
Our Africa diamond producing area in South Africa, Marsfontein, was placed on
care and maintenance at the end of 2023 as a result of rising fuel prices and
falling diamond prices. It is important to remember the purpose of mining the
Marsfontein dumps and dykes is to provide information and experience prior to
mining the adjacent Thorny River dyke deposits.
The operations at Marsfontein and Thorny River are contracted out on a royalty
basis thus there are no costs to BOD.
BOD applied for the necessary mining permits on Thorny River in 2022. Slow but
good progress has been made with the outstanding hurdle being community
support which is at an advanced stage of completion. Further updates will be
provided as and when appropriate.
Samples have been taken and submitted for analysis on the Reivilo group of
pipes, where BOD hold 100% of the ground. Previous work on their pipes
discovered they were diamondiferous.
Other
The company has been awarded a Prospecting License in Eswatini where, with our
local partners, it is currently undertaking a desktop study with a view to
commencing operations.
The company is also of the view that Zimbabwe remains highly prospective and
thus continues to engage with various partners to gain a reasonable entry into
the country.
Outlook
Junior mineral explorers are and have been friendless for the past number of
years. The recent diamond price falls and the growth of the lab grown diamonds
have exacerbated the gloom. But, without exploration there will be no new
mines. Producing diamond mines do not last forever. BOD is one of the only
remaining active junior explorers in the diamond producing area of Southern
Africa. We remain focused on our task and are well positioned for an upturn in
the market when it comes. We must last the course and take advantage of the
rich potential coming from the decline in exploration activity. Funding is
critical, but with the right backing we have a great deal of work to do and
remain optimistic of delivering shareholder returns in the long term.
John Teeling
Chairman
22 March 2024
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:
Botswana Diamonds PLC
John Teeling, Chairman
+353 1 833 2833
James Campbell, Managing Director
+27 83 457 3724
Jim Finn, Director
+353 1 833 2833
Nominated & Financial Adviser +44 (0) 20 7409 3494
Strand Hanson Limited
Ritchie Balmer
Rory Murphy
David Asquith
Broker +44 (0) 207 374 2212
First Equity Limited
Jason Robertson
Public Relations +44 (0) 207 138 3206
BlytheRay +44 (0) 207 138 3553
Megan Ray
Said Izagaren +44 (0) 207 138 3206
Teneo
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell +353 (0) 1 661 4055
Fia Long
Alan Reynolds
www.botswanadiamonds.co.uk (http://www.botswanadiamonds.co.uk)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six Months Six Months Year
Ended Ended Ended
31 Dec 23 31 Dec 22 30 Jun 2023
unaudited unaudited audited
£'000 £'000 £'000
REVENUE
Royalties 24 - 15
Operating expenses (20) - (5)
GROSS PROFIT 4 - 10
Administrative expenses (255) (330) (567)
Impairment of exploration and evaluation assets - - (3,124)
OPERATING LOSS (251) (330) (3,681)
LOSS BEFORE TAXATION (251) (330) (3,681)
Income tax expense - - -
LOSS AFTER TAXATION (251) (330) (3,681)
Exchange difference on translation of foreign operations - (24) 299
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (251) (354) (3,382)
LOSS PER SHARE - basic and diluted (0.02p) (0.04p) (0.38p)
CONDENSED CONSOLIDATED BALANCE SHEET
31 Dec 23 31 Dec 22 30 Jun 2023
unaudited unaudited audited
ASSETS: £'000 £'000 £'000
NON-CURRENT ASSETS
Intangible assets 5,509 8,764 5,442
Plant and equipment 207 207 207
5,716 8,971 5,649
CURRENT ASSETS
Other receivables 266 38 283
Cash and cash equivalents 334 95 199
600 133 482
TOTAL ASSETS 6,316 9,104 6,131
LIABILITIES:
CURRENT LIABILITIES
Trade and other payables (870) (1,041) (802)
TOTAL LIABILITIES (870) (1,041) (802)
NET ASSETS 5,446 8,063 5,329
EQUITY
Share capital - deferred shares 1,796 1,796 1,796
Share capital - ordinary shares 2,800 2,392 2,610
Share premium 12,398 11,844 12,220
Share based payments reserve 111 111 111
Retained Deficit (10,676) (6,774) (10,425)
Translation Reserve - (323) -
Other reserves (983) (983) (983)
TOTAL EQUITY 5,446 8,063 5,329
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Capital Share Premium Share based Payment Reserves Retained Deficit Translation Reserve Other Reserve Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 30 June 2022 3,994 11,487 111 (6,444) (299) (983) 7,866
Ordinary shares issued 194 357 - - - - 551
Share issue expenses - - - - - - -
Total comprehensive loss - - - (330) (24) - (354)
As at 31 December 2022 4,188 11,844 111 (6,774) (323) (983) 8,063
Ordinary shares issued 218 376 - - - - 594
Transfer of reserves - - (299) 299 - -
Total comprehensive loss - - (3,352) 24 - (3,328)
As at 30 June 2023 4,406 12,220 111 (10,425) - (983) 5,329
Ordinary shares issued 190 190 - - - - 380
Share issue expenses - (12) - - - - (12)
Total comprehensive loss - - - (251) - - (251)
As at 31 December 2023 4,596 12,398 111 (10,676) - (983) 5,446
CONDENSED CONSOLIDATED CASH FLOW
Six Months Six Months Year
Ended Ended Ended
31 Dec 23 31 Dec 22 30 Jun 2023
unaudited unaudited audited
£'000 £'000 £'000
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the period (251) (330) (3,681)
Impairment of exploration and evaluation assets - - 3,124
Foreign exchange losses - (2) 2
(251) (332) (555)
Movements in Working Capital 85 76 82
NET CASH USED IN OPERATING ACTIVITIES (166) (256) (473)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to exploration and evaluation assets (67) (105) (132)
NET CASH USED IN INVESTING ACTIVITIES (67) (105) (132)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue 380 295 647
Share issue costs (12) - -
NET CASH GENERATED FROM FINANCING ACTIVITIES 368 295 647
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 135 (66) 42
Cash and cash equivalents at beginning of the period 199 159 159
Effect of foreign exchange rate changes - 2 (2)
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD 334 95 199
Notes:
1. INFORMATION
The financial information for the six months ended 31 December 2023 and the
comparative amounts for the six months ended 31 December 2022 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 2023
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 23 31 Dec 22 Year Ended
30 Jun 23
£'000 £'000 £'000
Numerator
For basic and diluted EPS retained loss (251) (330) (3,681)
No. No. No.
Denominator
Weighted average number of ordinary shares 1,057,998,118 924,921,167 977,271,808
Loss per share - Basic and Diluted (0.02p) (0.04p) (0.38p)
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 23 31 Dec 22 30 June 23
Exploration and evaluation assets: £'000 £'000 £'000
Cost:
Opening balance 10,188 9,807 9,807
Additions 67 603 381
Exchange variance - (24) -
10,255 10,386 10,188
Impairment:
Opening balance 4,746 1,622 1,622
Provision for impairment - - 3,124
4,746 1,622 4,746
Carrying Value:
Opening balance 5,442 8,185 8,185
Closing balance 5,509 8,764 5,442
Regional Analysis 31 Dec 23 31 Dec 22 30 Jun 23
£'000 £'000 £'000
Botswana 3,550 6,638 3,550
South Africa 1,959 2,126 1,892
Zimbabwe - - -
5,509 8,764 5,442
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.
In the prior year the Group incurred expenditure to date of £3,124,284 on
certain licences held in Botswana, these licences lapsed and were not renewed.
The directors decided to fully impair the expenditure and accordingly, an
impairment charge of £3,124,284 was recorded in the prior year.
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. A separate agreement for funding of
exploration resulted in the Company's interest in Vutomi increasing from 40%
to 45.94%.
On 28 September 2022 the Board announced that it had exercised its pre-emptive
right to acquire the outstanding third-party interests in Vutomi and had
increased its' interest from 45.94% to 74%.
The consideration for Vutomi comprised 56,989,330 new ordinary shares of
£0.0025 each in the Company ("Consideration Shares"). The Consideration
Shares were issued in two tranches. 28,464,665 Consideration Shares (First
Tranche) were issued to the vendors on 28 September 2022 and the balance of
28,524,665 (Second Tranche) was issued on 27 January 2023.
The Company also agreed that immediately on completion of the Acquisition, the
Company would sell 26% of Vutomi for a deferred consideration of US$316,333 to
the Company's local South African Empowerment partner, Baroville Trade and
Investments 02 Proprietary Limited ("Baroville"), in order to comply with
South African requirements on empowerment ownership, which will be funded by a
loan from Botswana Diamonds (Note 6). On completion, the Company therefore
owns 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 £28,000 (June 2023: £71,521) of
directors' remuneration which has been capitalized. This is for time spent
directly on the operations rather than on corporate activities.
5. SHARE CAPITAL
Deferred Shares - nominal value of 0.75p per share Number Share Capital Share Premium
£'000 £'000
At 1 July 2022 and 1 July 2023 239,487,648 1,796,157 -
At 30 June 2023 and 31 December 2023 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 2022 879,071,902 2,198 11,487
Issued during the period 77,543,877 194 357
Share issue expenses - - -
At 31 December 2022 956,615,779 2,392 11,844
Issued during the period 87,262,120 218 376
Share issue expenses - - -
At 30 June 2023 1,043,877,899 2,610 12,220
Issued during the period 76,000,000 190 190
Share issue expenses - - (12)
At 31 December 2023 1,119,877,899 2,800 12,398
Movements in share capital
On 27 November 2023 the Company raised £380,000
through the issue of 76,000,000 new ordinary shares at a placing price of 0.5p
via a placing and subscription with existing and new investors. Each Placing
Share has one warrant attached with the right to subscribe for one new
Ordinary Share at 0.5p per new Ordinary Share for a period of two years from
27 November 2023.
6. OTHER RECEIVABLES
31 Dec 23 31 Dec 22 30 Jun 23
£'000 £'000 £'000
Prepayments 17 38 34
Debtor Baroville (Note 4) 249 - 249
266 38 283
The carrying value of other receivables
approximates to their fair value.
7. TRADE AND OTHER PAYABLES
31 Dec 23 31 Dec 22 30 Jun 23
£'000 £'000 £'000
Trade payables 86 82 51
Petra Diamonds creditor 123 123 123
Accruals 661 594 628
Consideration due - Vutomi acquisition - 242 -
870 1,041 802
It is the Company's normal practice to agree terms of transactions, including
payment terms, with suppliers and provided suppliers perform in accordance
with the agreed terms, payment is made accordingly. In the absence of agreed
terms it is the Company's policy that the majority of payments are made
between 30 - 40 days. The carrying value of trade and other payables
approximates to their fair value.
8. SHARE BASED PAYMENTS
WARRANTS
Dec 2023 Jun 2023 Dec 2022
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 period 55,000,000 2.0 113,737,455 1.28 162,816,667 1.07
Issued 76,000,000 0.50 - - - -
Exercised - - (58,737,455) 0.60 (49,079,212) 0.60
Expired - - - - - -
Outstanding at end of period 131,000,000 1.13 55,000,000 2.0 113,737,455 1.28
Further information on the warrants are detailed in Note 5 above.
9. POST BALANCE SHEET EVENTS
There are no material post balance sheet events affecting the Group.
10. APPROVAL
The Interim Report for the period to 31(st)
December 2023 was approved by the Directors 22 March 2024.
11. AVAILABILITY OF REPORT
The Interim Statement will be available on the
website at www.botswanadiamonds.co.uk (http://www.botswanadiamonds.co.uk)
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BRGDXBXDDGSDRecent news on Botswana Diamonds
See all newsREG - Botswana Diamonds - Second significant anomaly discovered in Kalahari
AnnouncementREG - Botswana Diamonds - AI to be applied to our Botswana database
AnnouncementREG - Botswana Diamonds - Unaudited Interim Statement and Financial Results
AnnouncementREG - Botswana Diamonds - Granting of Prospecting License in Eswatini
AnnouncementREG - Botswana Diamonds - Results of Annual General Meeting
Announcement