TIDMKENV
RNS Number : 1704S
Kennedy Ventures PLC
19 December 2016
19 December 2016
Kennedy Ventures plc
Preliminary Results for the Year Ended 30 June 2016
Kennedy Ventures plc ("Kennedy Ventures" or the "Company"), the
AIM quoted investment company, who through its stake in African
Tantalum (Pty) Limited ("Aftan", together the "Group") has an
interest in the Tantalite Valley Mine ("TVM") in Namibia, is
pleased to announce its audited preliminary results for the full
year ended 30 June 2016 ("the Period").
Highlights
Operational
-- Long term Offtake agreement signed by Aftan with a major
leading manufacturer of electronic components, for the full
production of tantalite from the TVM.
-- Aftan obtained full explosives magazine licence to enable it
to take delivery of, and store, explosives at the TVM.
-- Recommissioned the TVM processing plant within budget,
processing 10,500 tonnes per month and delivering its first
shipment to its offtake partner.
Financial
At 30 June 2016:
-- The group's loss for the year amounted to GBP788,000.
-- Cash at bank amounted to GBP60,000 and, with the investment
in TVM, development costs and property plant & equipment
amounted to GBP674,000 and GBP466,000 respectively.
-- Overall Net Assets at 30 June 2016 amounted to GBP1,405,000,
up from the 30 June 2015 balance of GBP646,000.
Post Period
-- Kennedy Ventures successfully raised GBP2 million gross (July
2016) through a placing with the net proceeds being invested in
Aftan, to go towards upgrading and expanding the TVM plant, in
addition to opening up the lepidolite orebody, which has exciting
lithium potential.
-- Post upgrade, Aftan resumed production, with full production
capacity expected to be reached in Q2 2017. The upgrade of plant
equipment and reorganisation of modules at the Homestead deposit of
the TVM has been completed, which will result in a higher recovery
rate of fine tantalite.
-- Final stage of Aftan's upgrade programme reached, with a
milling circuit forecast to be installed in December 2016.
-- In November 2016, first shipment post upgrade containing 1.6
tonnes of tantalite concentrate was delivered to Aftan's long-term
offtake partner. Deliveries are scheduled to occur twice per month
following the installation of the final items of capital equipment
that are currently being commissioned. TVM's lithium potential
continues to be explored with both geological and metallurgical
test studies being conducted, with entrance into the lithium market
a strong possibility in the medium term.
-- TVM's increased mining face availability has allowed for
flexibility in ore sourcing and consistent grade selection for
higher grade feed to the plant.
-- Aftan's upgraded plant is expected to consistently deliver
improved recoveries and allows for re-processing of all tailings
and micaceous ores.
Outlook
-- We expect throughput rate at the TVM of 15,000 tonnes per month in Q2 2017.
-- Aftan is expected to be cash flow positive for 2017,
generating a healthy margin from Q2 2017 upon reaching full
production.
-- JORC compliant resource report for the lepidolite deposit is
expected in the first half of next year.
-- Opportunity for Aftan to enter lithium market through
processing of lithium bearing micaceous ore.
Caroline McLeod, Director and Country Representative for Kennedy
and Aftan, said:
"With Kennedy's investment Aftan has successfully recommissioned
TVM and as a result gained a better understanding of the ore body
and the plant's processing capabilities. The result was the fast
tracking of the plant expansion and upgrade to enable the efficient
and material extraction of fine tantalite from the ore. Post
Period, Aftan has delivered the upgrade on budget and schedule and
it is now on the cusp of being cash flow positive, producing at
significantly higher production levels.
With stable production at the higher rate anticipated from Q2
next year and with guaranteed payment of goods through our offtake
partner, we can now look to the exciting lepidolite deposit where
lithium potential exists. Aftan anticipates producing a JORC
resource report during the first half of next year on this deposit
and anticipates being able to process these lithium bearing ores
during next year, producing lithium-rich concentrate.
Kennedy Ventures, through its investment in Aftan, has taken
large steps forward during the Period and Aftan will very soon
represent a cash generative business. We see exciting upside
potential both near TVM and regionally where we see significant
opportunities for further investments. We look forward to further
crystallising and growing the value of our investments."
Posting of accounts and notice of AGM
The Report and Accounts for the period ended 30 June 2016 will
shortly be available on the Company's website and will be sent to
registered shareholders by post shortly together with notice of the
Group's AGM.
For further information on the Company, visit:
www.kvplc.com:
Kennedy Ventures plc
Peter Hibberd (CEO), c/o Tel: +44 (0)203 757
Camarco 4983
Grant Thornton UK LLP (Nominated Tel: +44 (0)20 7383
Adviser) 5100
Colin Aaronson
Richard Tonthat
Daniel Bush
Shore Capital (Broker) Tel: +44 (0) 207
Mark Percy / Toby Gibbs 408 4090
(Corporate Finance)
Jerry Keen (Corporate Broking)
Camarco (PR) Tel: +44 (0) 203
Gordon Poole / Billy Clegg 757 4980
CHAIRMAN'S STATEMENT
YEAR TO 30 June 2016
The last twelve months have seen our African investment make
significant progress, achieving commercial production levels of
tantalum, a rare and valuable metal used in the production of
electronic components and alloys, whilst unearthing an opportunity
to diversify into the lucrative lithium market.
Since Kennedy Ventures' investment in Afrcan Tantalum (Pty)
Limited ("Aftan") in 2015, our main aim has been to facilitate the
re-opening of the Tantalite Valley Mine ("TVM") and recommission
the processing plant in order to extract the inherent and
significant value from the TVM and surrounding ore bodies. The
Company is delighted to say that Aftan's development programme has
remained within budget, on schedule, and has now reached its final
stage, with the installation of a milling circuit forecast to
complete in December 2016.
Upon its completion, the TVM is expected to be cash flow
positive and have an increased recovery rate of fine tantalite. In
November 2016 and on schedule, Aftan delivered its first shipment
containing 1.6 tons of tantalite concentrate under an agreement
with its long-term offtake partner, a leading manufacturer of
electronic components. This agreement ensures Aftan receives
security of payment and a sustainable source of income going
forward.
In July 2016, we successfully raised GBP2.0 million through the
issue of 66,666,665 new ordinary shares at 3p per share, with the
proceeds invested in Aftan to allow it to upgrade and expand its
current plant at the TVM, in addition to opening up the lepidolite
orebody, which through its association with tantalite, has exciting
lithium potential.
Aftan is in the process of assessing the potential value of the
lepidolite lithium deposit by conducting both geological and
metallurgical test studies, which are advancing in line with
expectations. Its plant upgrade programme is scheduled to complete
in Q1 2017 with the installation of an additional flotation
circuit. This final step will allow for the removal of mica to
create a lithium-rich concentrate, which may enable the Group to
become the first and only AIM quoted company with investments in
lithium producing operations.
The strong progress of Aftan's plant upgrade programme has
enabled the production of Tantalum to resume. We forecast that
production will ramp up to full capacity in Q2 2017 and achieve the
targeted throughput rate of 15,000 tonnes per month and 15 tonnes
of tantalite concentrate per month with improved ore sourcing and
grades.
Tantalite is predominantly used in tantalum capacitors, a key
component required by a wide range of electronic equipment and
mobile devices, resulting in high, sustained levels of demand for
the mineral. Additionally, Tantalum's chemical inertness and high
resistance to corrosion allows it to be used as a minor component
in alloys.
We remain fully aware that tantalum is a conflict mineral and we
are dedicated to ensuring that all tantalum produced by Aftan is
conflict-free. TVM, located in Southern Namibia near Warmbad in the
Karas District, represents a fully traceable source of tantalum.
Aftan has established good relationships with the local community
which provides many of the workforce. It has also provided
educational assistance and will seek to build up an appropriate CSR
programme. Caroline McLeod plays a key role in this.
Financials
The Company recorded a loss before tax of GBP788,000, compared
to GBP219,000 in 2015, and had cash balances of GBP60,000 at the
end of the period. The Group continues to maintain operations on a
low cash cost basis and administrative expenses for the year of
GBP788,000 included a share based payment charge of GBP197,000. The
Company does not plan to pay a dividend for the twelve months to 30
June 2016.
Board and management team
The Group has continued to strengthen its management team
through the addition of Renier Swieger as General Manager of
Operations for Aftan. Renier is an experienced engineer and project
manager with a history of successfully delivering mining projects
on time and in budget. In addition to his sector experience,
Renier, a Namibian citizen, has vast regional expertise having
worked across Africa in managerial roles for MDM Engineering, Anglo
Gold Ashanti Ltd and Manhattan Corporation.
Outlook
Aftan is close to achieving full production levels at the TVM,
has already secured a long-term offtake partner, and operates in a
stable mining friendly country and commodity market. This provides
the Group with confidence that Aftan can become a leading tantalum
producer with significant potential to enter the lithium
market.
As previously stated, the Group is very excited by the TVM's
significant lithium potential, and has already committed the
resources to enable further exploration. It is viewed as a viable
opportunity to achieve near-term production of lithium concentrate,
which would enhance Aftan's growth prospects substantially,
particularly when considering the rising demand and value of
lithium. Aftan is currently working towards producing a JORC
compliant resource report for the lepidolite deposit, expected in
the first half of next year.
Moving forward, we will assist Aftan to continue to identify
ways to improve its current operations, whilst actively seeking to
identify and evaluate prospective complementary investment
opportunities that will enhance shareholder value.
Giles Clarke
Chairman
18 December 2016
GROUP INCOME STATEMENT
Year to 30 June 2016
2016 2015
GBP'000 GBP'000
------------------------------------- -------- --------
Administrative expenses
Administrative expenses (788) (219)
Operating loss and loss before
tax (788) (219)
Taxation - -
Loss for the year and total
comprehensive loss (788) (219)
Loss attributable to owners
of the Company (676) (199)
Loss attributable to non-controlling
interests (112) (20)
--------------------------------------- -------- --------
(788) (219)
------------------------------------- -------- --------
Earnings per share attributable
to owners of the Company
From continuing operations:
Basic and diluted(pence) (0.6)p (0.3)p
GROUP STATEMENT OF COMPREHENSIVE INCOME
Year to 30 June 2016
2016 2015
GBP'000 GBP'000
------------------------------------- -------- --------
Loss for the year attributable
to owners of the Company (676) (199)
Other comprehensive income:
Items that may be subsequently
reclassified to profit and loss:
Exchange differences on translation
of foreign operations 21 (4)
Other comprehensive income/(expense)
for the period 21 (4)
Total comprehensive loss for the
year attributable to equity holders
of the parent (655) (203)
GROUP STATEMENT OF FINANCIAL POSITION
As at 30 June 2016
GROUP
2016 2015
Notes GBP'000 GBP'000
------------------------------- ------ --------- ---------
Non-Current assets
Goodwill 11 571 442
Other intangible assets 12 674 10
Property, plant and equipment 13 466 395
Investment in subsidiaries 14 - -
------------------------------- ------ --------- ---------
1,711 847
------------------------------- ------ --------- ---------
Current assets
Trade and other receivables 16 70 13
Cash and cash equivalents 17 60 26
------------------------------- ------ --------- ---------
130 39
------------------------------- ------ --------- ---------
Current liabilities
Trade and other payables 18 286 98
Short term borrowings 19 150 142
------------------------------- ------ --------- ---------
436 240
------------------------------- ------ --------- ---------
Net assets 1,405 646
------------------------------- ------ --------- ---------
Equity
Share capital 20 1,084 763
Share premium account 20 9,125 7,849
Capital redemption reserve 2,077 2,077
Currency translation reserve 17 (4)
Retained earnings (10,773) (10,182)
------------------------------- ------ --------- ---------
Equity attributable to owners
of the Company 1,530 503
Non-controlling interests (125) 143
------------------------------- ------ --------- ---------
Total equity 1,405 646
------------------------------- ------ --------- ---------
These financial statements were approved by the Board of
Directors on 18 December 2016.
Signed on behalf of the Board by:
Nick Harrison Giles Clarke
Director Director
Company number: 005697574
GROUP STATEMENT OF CHANGES IN EQUITY
Year to 30 June 2016
Share Capital Currency Equity
Share premium redemption translation Retained shareholders' Non-controlling
capital account reserve reserve earnings funds interests Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================ ======== ======== ============ ============ ========= ============= ================ ========
Balance at
1 July 2014 711 7,673 2,077 - (9,983) 478 - 478
Comprehensive
income Loss
for the year - - - - (199) (199) (20) (219)
Other
comprehensive
income - - - (4) - (4) - (4)
---------------- -------- -------- ------------ ------------ --------- ------------- ---------------- --------
Total
comprehensive
income - - - (4) (199) (203) (20) (223)
---------------- -------- -------- ------------ ------------ --------- ------------- ---------------- --------
Issue of
share capital 52 176 - - - 228 - 228
Acquisition
of subsidiary
undertakings - - - - - - 163 163
Balance at
30 June 2015 763 7,849 2,077 (4) (10,182) 503 143 646
---------------- -------- -------- ------------ ------------ --------- ------------- ---------------- --------
Comprehensive
income Loss
for the year - - - - (676) (676) (112) (788)
Other
comprehensive
income - - - 21 - 21 - 21
---------------- -------- -------- ------------ ------------ --------- ------------- ---------------- --------
Total
comprehensive
income - 21 (676) (655) (112) (767)
---------------- -------- -------- ------------ ------------ --------- ------------- ---------------- --------
Issue of
share capital 321 1,276 - - - 1,597 - 1,597
Acquisition
of
non-controlling
interests - - - - - - (156) (156)
Share based
payment expense - - - - 85 85 - 85
Balance at
30 June 2016 1,084 9,125 2,077 17 (10,773) 1,530 (125) 1,405
================ ======== ======== ============ ============ ========= ============= ================ ========
GROUP STATEMENT OF CASH FLOWS
Year to 30 June 2016
GROUP
2016 2015
GBP'000 GBP'000
---------------------------------------- -------- --------
OPERATING ACTIVITIES
Net cash used in operating activities (423) (186)
INVESTING ACTIVITIES
Purchases of property, plant
and equipment (88) -
Development costs (664) -
Advances to subsidiary undertakings - -
Acquisition of non-controlling
interests (336) -
Acquisition of subsidiary undertakings - (464)
Net cash used in investing activities (1,088) (464)
----------------------------------------- -------- --------
FINANCING ACTIVITIES
Net proceeds from share issues 1,365 7
Loans from associates 108 142
Net cash from financing activities 1,473 149
Net (decrease)/increase in cash
and cash equivalents (38) (501)
Exchange rate translation adjustment 72 (4)
Cash and cash equivalents at
beginning of year 26 531
Cash and cash equivalents at
end of year 60 26
----------------------------------------- -------- --------
NOTES TO THE ANNOUNCEMENT
Year to 30 June 2016
1 BASIS OF PREPARATION
The summary accounts do not constitute statutory
accounts as defined in section 435 of the Companies
Act 2006, but has been extracted from the statutory
accounts for the period ended 30 June 2016 on
which an unqualified audit report has been issued.
The statutory financial statements for the period
ended 30 June 2016 were approved by Directors
on 18 December 2016, but have not yet been delivered
to the Registrar of Companies.
The consolidated financial statements have been
prepared in accordance with applicable International
Financial Reporting Standards ("IFRS") including
standards and interpretations issued by both
the International Accounting Standards Board
("IASB") and the International Financial Reporting
Interpretation Committee ("IFRIC") as adopted
and endorsed by the European Union ("EU"), further
to IAS Regulation (EC 1606/2002).
The consolidated financial statements have been
prepared on the basis of historical cost, except
for the revaluation of financial instruments.
Cost is based on the fair values of the consideration
given in exchange for assets.
The Group's consolidated financial statements
incorporate the financial statements of Kennedy
Ventures Plc (the "Company") and entities controlled
by the Company (its subsidiaries). Subsidiaries
are entities over which the Group has the power
to govern the financial and operating policies
generally accompanying a shareholding of more
than one half of the voting rights. The existence
and effect of potential voting rights that are
currently exercisable or convertible are considered
when assessing whether the Group controls another
entity.
Inter-company transactions, balances and unrealised
gains on transactions between Group companies
are eliminated. Profits and losses resulting
from inter-company transactions that are recognised
in assets are also eliminated. Accounting policies
of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted
by the Group.
Where necessary, adjustments are made to the
financial statements of subsidiaries to bring
the accounting policies used into line with those
used by the Group.
All intra-group transactions, balances, income
and expenses are eliminated on consolidation.
In the application of IFRS management is required
to make judgments, estimates and assumptions
about carrying values of assets and liabilities
that are not readily apparent from other sources.
The estimates and associated assumptions are
based on historical experience and various other
factors that are believed to be reasonable under
the circumstances, the results of which form
the basis of making judgments. Actual results
may differ from these estimates.
The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which
the estimate is revised if the revision affects
only that period, or in the period of the revision
and future periods if the revision affects both
current and future periods.
Judgments made by management in the application
of IFRS that have significant effects on the
financial statements and estimates with a significant
risk of material adjustment in the next year
are disclosed, where applicable, in the relevant
notes to the financial statements.
2 POSTING OF ACCOUNTS
The Report and Accounts for the period ended
30 June 2016 will shortly be available on the
Company's website and will be sent to shareholders
by post in due course.
3 RELATED PARTY TRANSACTION
On 1 June 2015 the Company entered into an agreement
with Westleigh Investments Holdings Limited ("WIHL")
under which it agreed to pay WIHL for the recharge
expenditure in respect of accounting, administration
and office accommodation services provided to
the Company. Recharges are based on an apportionment
of costs and the level of services provided.
During the year, WIHL received GBP48,000 (2015:
GBP12,500) under this agreement.
WIHL is a company in which Giles Clarke and Nick
Harrison, both of whom are directors of Kennedy
Ventures, hold beneficial interests of 73.28%
and 26.72% respectively, and as such this agreement
is classified as a related party transaction
pursuant to Rule 13 of the AIM Rules for Companies.
The independent directors consider, having consulted
with the Company's nominated adviser, that the
terms of this transaction are fair and reasonable
insofar as its shareholders are concerned.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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