TIDMBOD
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 GBP550,000 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
S
Enquiries:
Beaumont Cornish - Nominated Adviser
Michael Cornish
Roland Cornish +44 (0) 020 7628 3396
Beaumont Cornish Limited - Broker
Roland Cornish
Felicity Geidt +44 (0) 207 628 3396
First Equity Limited - Joint Broker
Jason Robertson +44 (0) 207 374 2212
BlytheRay - PR +44 (0) 207 138 3206
Megan Ray +44 (0) 207 138 3553
Rachael Brooks +44 (0) 207 138 3206
Said Izagaren +44 (0) 207 138 3206
Naomi Holmes +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
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
GBP'000 GBP'000 GBP'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: GBP'000 GBP'000 GBP'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 based payment Total
Share Capital Share Premium Reserves Retained Deficit Translation Reserve Other Reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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 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
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. DIVID
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 Six Months
Ended Ended Year Ended
31 Dec 31 Dec 30 Jun
21 20 21
GBP'000 GBP'000 GBP'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 31 Dec 30 June
21 20 21
Exploration and evaluation assets: GBP'000 GBP'000 GBP'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 31 Dec 30 Jun
21 20 21
GBP'000 GBP'000 GBP'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
GBP58,815 on exploring for new licences in Zimbabwe and GBP11,203
miscellaneous costs. As at year end no licences had been granted.
Therefore, the directors decided to impair the costs. Accordingly,
an impairment of GBP70,018 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
GBP626,883. 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 GBP6,500 (June 2021:
GBP14,225) of wages and salaries and GBP35,831 (June 2021:
GBP65,553) 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 31 Dec 30 Jun
21 20 21
GBP'000 GBP'000 GBP'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
GBP'000 GBP'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
GBP'000 GBP'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 GBP300,000 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 GBP363,000 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 GBP66,000.
On 25 October 2021, the Company raised GBP550,000 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 GBP10,100.
7. SHARE BASED PAYMENTS
WARRANTS
Dec 2021 Jun 2021 Dec 2020
Number of Warrants Weighted average Number of Warrants Weighted average Number of Warrants Weighted average
exercise price in exercise price in exercise price in
pence pence 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 GBP0.0025 each at the exercise price of 0.60 pence per
new share. The proceeds of the exercise of GBP178,000 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
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IR GZGFFVGFGZZM
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