Final Results
29 June 2007 - 9:27PM
UK Regulatory
RNS Number:3102Z
Xceldiam Limited
29 June 2007
Xceldiam Limited
("Xceldiam" or the "Company")
Preliminary Statement of Results
For the Year Ended 31 December 2006
CHAIRMAN'S STATEMENT
Results
Group turnover for the year ended 31 December 2006 was #nil with the continued
focus on Kimberlite and Alluvial exploration on Projecto Luangue and the
associated spend. The Group's loss after tax for this period was US$4.2 million
(2005: US$4,3million).
The only income generated by the Group for the period was interest of US$297,648
accrued on the surplus funds on deposit.
There were no borrowings as at 31 December 2006.
Subsequent events - Disposal of Frannor Investments and Finance Ltd ("Frannor
BVI")
In February 2007, Xceldiam announced that it was in advanced stage negotiations
which could potentially lead to an offer for the Company or one of its
subsidiaries. On 19 March 2007, following shareholder approval at an
Extraordinary Meeting of Xceldiam shareholder's, the entire issued share capital
of Xceldiam's subsidiary, Frannor BVI, was sold to Petra Diamonds Limited ("
Petra"). Petra issued 19,674,584 new shares ("the Consideration Shares") to
Xceldiam, representing 12.18% of Petra's current issued share capital in
consideration of the deal. The Consideration Shares were, in turn, distributed
to shareholders of Xceldiam on record as at 9 March 2007 (excluding Petra) by
way of a dividend in specie ("the Dividend"). Through the deal Xceldiam
shareholders maintained their interest in Frannor BVI's Luangue project, as well
as having an interest in Petra's other operations.
Xceldiam Investing Strategy
Xceldiam's shares continued to trade on AIM following the disposal. The
directors of Xceldiam continue to pursue new investment opportunities in the
mining sector in accordance with Xceldiam's investing strategy.
For further information please contact:
Mark Summers, Xceldiam Limited +27 113 173 746
David Youngman, WH Ireland Limited +44 161 832 2174
BALANCE SHEET
At 31 December 2006
Group Group Company Company
Notes USD USD USD USD
Assets 2006 2005 2006 2005
Non-current assets 6 793 206 2 754 562 14 620 030 6 227 780
Plant and equipment 2 6 296 139 2 247 489 6 546 6 752
Intangible asset 3 497 067 507 073 -
Loans receivable 4 - - 14 613 384 6 220 913
Investments in subsidiaries 5 - - 100 115
Current assets 5 841 861 13 979 832 4 995 189 12 983 203
Trade and other receivables 323 858 46 401 70 403 -
Cash and cash equivalents 6 5 518 003 13 933 431 4 924 786 12 983 203
Total assets 12 635 067 16 734 394 19 615 219 19 210 983
Equity and liabilities
Capital and reserves 12 243 583 16 414 278 19 559 795 19 091 659
Issued share capital 7 32 955 32 955 32 955 32 955
Share premium 8 20 515 841 20 515 841 20 515 841 20 515 841
Other reserves 194 850 179 242 105 330 79 716
Accumulated loss (8 500 063) (4 313 760) (1 094 331) (1 536 853)
Non-current liability
Interest bearing liability 9 - 26 541 - -
Current liabilities
Trade and other payables 391 484 293 575 55 424 119 324
Total equity and liabilities 12 635 067 16 734 394 19 615 219 19 210 983
INCOME STATEMENT
Year ended 31 December 2006
Group Group Company Company
Note USD USD USD USD
2006 2005 2006 2005
Interest received 297 648 72 657 297 648 72 657
Interest paid - (35 345) - -
Operating costs 10 (4 473 281) (4 351 072) 144 873 (1 609 510)
(Loss)/gain for the year (4 175 633) (4 313 760) 442 521 (1 536 853)
STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2006
Share Share Revaluation Share Accumulated Total
capital premium reserve options loss
USD USD USD USD USD USD
Group
Issue of share capital 32 955 20 515 841 - - - 20 548 796
Revaluation of - - 89 520 - - 89 520
intangible asset
Share based payments - - - 105 330 - 105 330
Loss for the year - - - - (4 175 633) (8 862 455)
Balances at 31 December 32 955 20 515 841 89 520 105 330 (8 500 063) 12 243 583
2006
Company
Issue of share capital 32 955 20 515 841 - - - 20 548 796
Share based payments - - - 105 330 - 105 330
Loss for the year - - - - (1 094 331) (1 094 331)
Balances at 31 December 32 955 20 515 841 - 105 330 (1 094 331) 19 559 795
2006
CASH FLOW STATEMENT
Year ended 31 December 2006
Company Group Company Company
Note USD USD USD USD
2006 2005 2006 2005
Cash flows from operating activities (3 489 225) (3 630 812) 336 600 (1 052 085)
Cash absorbed by operations 12 (3 786 873) (3 668 124) 38 952 (1 124 742)
Net interest received 297 648 37 312 297 648 72 657
Cash flows from investing activities (2 726 094) (8 395 017) (6 228 508)
Acquisition of plant and equipment (4 899 642) (2 318 547) (2 562) (7 480)
Acquisition of intangible asset - (407 547) - -
Increase in loan receivable - - (8 392 470) (6 220 913)
Acquisition of investment - - 15 (115)
Cash flows from financing activities (26 561) 20 290 337 - 20 263 796
Issue of share capital - 20 263 796 - 20 263 796
Increase in interest bearing (26 561) 26 541 - -
liability
Net (decrease)/increase in cash and (8 415 428) 13 933 431 (8 058 417) 12 983 203
cash equivalents
Cash and cash equivalents at 13 933 431 - 12 983 203 -
beginning of year
Cash and cash equivalents at end of 5 518 003 13 933 431 4 924 786 12 983 203
year
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Year ended 31 December 2006
1. Accounting policies
The financial statements are prepared in conformity with International Financial
Reporting Standards on the historical cost basis except where otherwise stated.
1.1 Plant and equipment
Plant and equipment are reflected at cost less accumulated depreciation. Direct
costs and pre-production expenses relating to the erection, commissioning and
installation of major capital projects are capitalised until the projects are in
commercial operation.
Depreciation is charged on the straight-line basis over the estimated useful
lives of the assets. The estimated maximum useful lives of items of plant and
equipment are :
Computer equipment 3 years
Furniture and fittings 5 years
Motor vehicles 5 years
Earthmoving equipment, and over the life of exploration licence
Sampling equipment which is approximately 3 years
Carrying amounts of plant and equipment are impaired to the higher of value in
use or recoverable amount, where this is lower than the carrying amount. The
expected future cash flows attributable to such assets are considered in
determining the recoverable amount.
The assets residual values and useful lives are reviewed and adjusted if
appropriate at each balance sheet date.
1.2 Provisions
Provisions are recognised when the company has a present legal or
constructive obligation as a result of a past event and when it is probable that
an outflow of economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
1.3 Taxation
Where taxation is payable by the nature or situation of the
company's operations, the charge for current tax is based on the results for the
year adjusted for items which are tax exempt or are not tax deductible. Tax is
calculated using rates that have been enacted or substantively enacted by the
balance sheet date.
XCELDIAM LIMITED
NOTES TO THE annual FINANCIAL STATEMENTS
Year ended 31 December 2006
1.4 Deferred taxation
Deferred taxation is provided on the comprehensive basis and is
calculated at current rates using the balance sheet liability method. The
deferred taxation liability represents the amount of income tax payable in
future periods in respect of items of income and expenditure which are
recognised for income tax purposes in periods different from those in which they
are brought to account in the financial statements, allowing for the effect of
tax losses carried forward. A deferred tax asset is recognised when it is
probable that the related tax benefit will be realised.
Deferred tax is calculated at current tax rates and is charged or
credited in the income statement, except when it relates to items credited or
charged directly to equity, in which case the deferred tax is also dealt with in
equity.
1.5 Foreign currency translations
Transactions denominated in foreign currencies are translated at the
rates of exchange ruling on the transaction date. Monetary items denominated in
foreign currencies are translated at the rate of exchange ruling at the balance
sheet date. Gains or losses arising on translations are credited to or charged
against income.
Financial statements of foreign operations are restated in US
Dollars by translating monetary balances at rates of exchange ruling at the
balance sheet date, non-monetary balances and components of equity at historic
rates and income statement items at an average rate for the period. These
translation differences are taken to income for the period.
1.6 Exploration, evaluation and development expenditure
Development expenditure in respect of minerals, exploration and
evaluation expenditure is charged to the profit and loss account as incurred
except where :
* the expenditure is directly attributable to a particular project;
* it is expected that the expenditure will be recouped by future
exploitation or sale; or
* exploration and evaluation activities have identified a mineral
resource but these activities have not reached a stage which permits a
reasonable assessment of the existence of commercially recoverable reserves.
in which case the expenditure is capitalised.
Administrative costs and exploration costs not directly attributable to a
particular project are expensed in the period in which they are incurred.
Intangible assets are tested for impairment annually either individually or at
the cash generating unit level. Useful lives are also examined on an annual
basis and adjustments, where applicable, are made on a prospective basis.
XCELDIAM LIMITED
NOTES TO THE annual FINANCIAL STATEMENTS
Year ended 31 December 2006
1.7 Financial instruments
Financial instruments carried on the balance sheet include cash
resources and borrowings, other financial assets, receivables and payables.
Financial instruments are initially measured at cost, which includes transaction
costs and are generally carried at their estimated fair values.
Trade and other receivables are stated at cost less a provision for
doubtful debts.
Cash and cash equivalents and interest bearing liabilities are
measured at fair value.
Group Group Company Company
USD USD USD USD
2006 2005 2006 2005
2. Plant and equipment
Cost
Appliances 26 103 - - -
Computer equipment 135 592 33 966 10 043 7 480
Furniture and fittings 78 450 68 321 - -
Motor vehicles 665 924 125 000 - -
Equipment 341 139 219 510 - -
Earthmoving equipment 2 795 391 -
Sampling equipment 2 361 233 -
Equipment in progress 1 871 750 - -
Earthmoving equipment - 1 483 932 - -
Equipment 363 004 139 864 - -
Sampling equipment 451 353 247 954 - -
7 218 189 2 318 547 10 043 7 480
Accumulated depreciation
Appliances 8 288 -
Computer equipment 34 452 5 753 3 496 728
Furniture and fittings 23 737 5 742 - -
Motor vehicles 131 571 18 750 - -
Equipment 114 566 40 813 - -
Earthmoving equipment 465 899 - - -
Sampling equipment 143 537 - - -
Equipment in progress - - - -
922 050 71 058 3 496 728
XCELDIAM LIMITED
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Year ended 31 December 2006
Group Group Company Company
USD USD USD USD
2006 2005 2006 2005
Carrying amount at end of year
Appliances 17 815 - - -
Computer equipment 101 139 28 213 6 546 6 752
Furniture and fittings 54 713 62 579 - -
Motor vehicles 534 353 106 250 - -
Equipment 226 573 178 697 - -
Earthmoving equipment 2 329 492 - -
Sampling equipment 2 018 891 - -
Equipment in progress 814 357 1 871 750 - -
Earthmoving equipment - 1 483 932 - -
Equipment 363 004 139 864 - -
Sampling equipment 451 353 247 954 - -
6 296 139 2 247 489 6 546 6 752
Movements for the year
Carrying amount at beginning of 2 247 489 - 6 752 -
year
Appliances - - - -
Computer equipment 28 213 - 6 752 -
Furniture and fittings 62 579 - - -
Motor vehicles 106 250 - - -
Equipment 178 697 - - -
Earthmoving equipment - - - -
Sampling equipment - - -
Equipment in progress 1 871 750 - - -
-
Additions 4 899 642 2 318 547 2 563 7 480
Appliances 26 103 - - -
Computer equipment 101 626 33 966 2 563 7 480
Furniture and fittings 10 129 68 321 - -
Motor vehicles 540 924 125 000 - -
Equipment 121 629 219 510 - -
Earthmoving equipment 1370 401 - - -
Sampling equipment 1 914 473 - - -
Equipment in progress 814 357 1 871 750 - -
Earthmoving equipment - 1 483 932 - -
Equipment 363 004 139 864 - -
Sampling equipment 451 353 247 954 - -
XCELDIAM LIMITED
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Year ended 31 December 2006
Group Group Company Company
USD USD USD USD
2006 2005 2006 2005
Depreciation for year 850 992 71 058 2 769 728
Appliances 8 288 - - -
Computer equipment 28 699 5 753 - -
Furniture and fittings 17 995 5 742 2 769 728
Motor vehicles 112 821 18 750 - -
Equipment 73 753 40 813 - -
Earthmoving equipment 465 899 - - -
Sampling equipment 143 537 - - -
Equipment in progress - - - -
Carrying amount at end of year 6 296 139 2 247 489 6 546 6 752
3. Intangible asset
The intangible asset comprises amounts relating to exploration,
evaluation and development capitalised in respect of Project Luangue.
The exploration and evaluation activities have identified a kimberlitic
resource but activities have not reached a stage which permits a
reasonable assessment of the existence of a commercially viable
resource.
Included in intangible asset is US$100,000 in respect of a payment to
acquire the entire share capital of Frannor Investments and Financing
(Pty) Limited, a company incorporated in South Africa ("FIFL SA").
Group Company
USD USD
At the time of the acquisition, 497 067 -
FIFL SA had not traded and its
only assets were the rights to
a 40, 0% interest in the
alluvial concession and a 39,0%
interest in the kimberlite
concession of Project Luangue
in Angola.
XCELDIAM LIMITED
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Year ended 31 December 2006
Group Company
USD USD
4. Loan receivable
Subsidiary
Frannor Investments and Finance - 14 613 384
Ltd
The above loan is unsecured,
interest free and has no fixed
repayment terms.
5. Investments in subsidiaries %
Frannor Investments and Finance 100 - 100
Limited, at cost
Frannor Investments and 100 - 15
Financing (Pty) Ltd, at cost
- 115
Group Group Company Company
USD USD USD USD
2006 2005 2006 2005
6. Cash and cash equivalents
Cash and cash equivalents 5 518 003 13 933 431 4 924 786 12 983 203
Cash and cash equivalents are
held in the following
currencies:
Pound Sterling #1 659 751 #7 533 427 #1 517 925 #7 533 427
US Dollars $2 186 441 $869 104 $2 013 928 $22 427
South African Rands R672 288 R630 000 - -
7. Share capital
Authorised
250,000,000 shares of USD 0,0006 150 000 150 000 150 000 150 000
cents each
Issued
54,924,831 shares of USD 0,0006 32 955 32 955 32 955 32 955
each
XCELDIAM LIMITED
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Year ended 31 December 2006
Group Group Company Company
USD USD USD USD
2006 2005 2006 2005
8. Share premium
Share premium 20 515 841 21 424 408 20 515 841 21 424 408
Share issue expenses - (908 567) - (908 567)
20 515 841 20 515 841 20 515 841 20 515 841
During 2005 the following
commissions paid to W H Ireland
on the issue of shares were
written off to the share
premium account :
- June 2005 placing - 145 818 - 145 818
- November 2005 placing - 762 749 - 762 749
- 908 567 - 908 567
9. Interest bearing liability
Afgem Limited - 26 541 - -
The loan is unsecured, bears
interest at the average 12
month USD Libor rate over the
period of the loan plus 2,0%.
10. Loss before taxation
Loss before taxation is stated
after charging :
Administration fees 199 667 223 925 199 667 223 925
Audit fees 22 499 11 150 3 625 11 150
Camp supplies 582 918 139 406 - -
Consulting and listing fees 274 101 726 975 274 101 692 606
Depreciation 850 992 71 058 2 769 728
Directors' emoluments - 313 346 267 000 313 346 267 000
salaries
Security 185 869 181 534 - -
Travel - local and 332 119 428 404 107 006 7 043
international
XCELDIAM LIMITED
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Year ended 31 December 2006
Salaries Bonus Total Total
USD USD USD USD
2006 2005
11. Directors' emoluments
Executive directors 252 354 - 252 354 246 000
Non-executive directors 61 992 - 61 992 21 000
314 346 - 314 346 267 000
Group Group Company Company
USD USD USD USD
2006 2005 2006 2005
12. Note to the cash flow statement
Cash absorbed by operations
Gain for the period (4 186 282) (4 313 760) 442 521 (1 536 853)
Consulting and listing fees - 285 000 - 285 000
Depreciation 850 990 71 058 2 768 728
Net interest received (297 648) (37 312) (297 648) (72 657)
Share option expense 25 614 79 716 25 614 79 716
(3 607 326) (3 915 298) 173 255 (1 244 066)
Working capital changes (179 547) 247 174 (134 303) 119 324
Trade and other receivables (277 456) (46 401) (70 403) -
Trade and other payables 97 909 293 575 (63 900) 119 324
(3 786 873) (3 668 124) 38 952 (1 124 742)
13. Financial risk management
Foreign currency risk
The Company undertakes certain transactions denominated in foreign
currencies which therefore have exposure to exchange fluctuations.
Interest rate risk
The Company is exposed to interest rate risk as it borrows funds.
This risk is managed by utilising an appropriate mix between fixed and floating
rate borrowings and placing funds on short term deposit.
XCELDIAM LIMITED
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Year ended 31 December 2006
Credit risk
Credit risk relates to potential exposure on trade receivables,
loans and bank and call deposits.
At the balance sheet date, the Company did not consider there to be
any significant concentration of credit risk which has not been adequately
provided for.
Liquidity risk
The Company manages liquidity risk by monitoring forecast cash flows
and ensuring that adequate cash resources and unutilised borrowing facilities
are maintained.
14. Commitments
Concession Spending Requirements
The company is required to spend the following amounts to comply
with Concession Spending Requirements laid down by the Angolan Government.
* Alluvial - USD 1.2 million on operating expenditure
- USD 1.8 million on capital expenditure
* Kimberlite - USD 6.0 million to be split between operating and
capital expenditure
In order to comply with the Concession Spending Requirements, the above amounts
should be incurred over the three years following the grant of the initial
concession in April 2005.
To date USD 13.6 million has been expended on the concession area. The spend
requirements on the Alluvial areas have been fulfilled with the balance of the
expenditure being apportioned to the Alluvial and Kimberlite areas.
15. Share options
The company established a share option plan that entitles directors,
senior employees and consultants the opportunity to purchase shares in the
company. In accordance with the plan, options are exercisable over a period of
3 years and vest as follows:
Year 1 - 20% of total share options granted
Year 2 - 30% of total share options granted
Year 3 - 50% of total share options granted
XCELDIAM LIMITED
NOTES TO THE annual FINANCIAL STATEMENTS
Year ended 31 December 2006
The terms and conditions of the share option plan are as follows:
Grant date Number of share Vesting conditions Contractual life
options
11 August 2005 350 000 3 years of service 10 years
24 August 2005 350 000 3 years of service 10 years
16 November 2005 750 000 3 years of service 10 years
18 September 2006 1 275 000 3 years of service 10 years
20 November 2006 200 000 3 years of service 10 years
The options granted on 16 November 2005 are subject to the following conditions:
10% to be allotted on the signing of an employment contract within the Group
10% to be allotted on the establishment of an alluvial bulk sampling programme
15% to be allotted on the establishment of a kimberlite exploration programme
15% to be allotted on a 50% upliftment in the Xceldiam share price from the 45
pence listing price
20% to be allotted on the awarding of an alluvial mining permit
30% to be allotted on the date that an economically viable kimberlite is proven
up
A further bonus tranche of 750,000 is available subject on the confirmation of
an economically viable Kimberlite.
Included in the allotments above are share options granted to the directors of
the Company as follows:
T George (Chief Executive Officer)
An allocation of 250,000 share options in the Company at the private placing
price that took place on 11 August 2005 of 20 pence per share, which shall vest
3 years after the date of completion of the initial private placing of
22,500,000 shares by the Company.
An allocation of 250,000 share options in the Company at the private placing
price that took place on 24 August 2005 of 30 pence per share in accordance with
the normal share scheme of the Company.
An allocation of 300,000 share options in the Company on 16 November 2005 as
part of the options granted as detailed above.
An allocation of 400,000 share options in the Company on 18 September 2006 as
part of the options granted as detailed above.
XCELDIAM LIMITED
NOTES TO THE annual FINANCIAL STATEMENTS
Year ended 31 December 2006
R Kaplan (Chief Financial Officer)
An allocation of 100,000 share options in the Company at the private placing
price that took place on 11 August 2005 of 20 pence per share, which shall vest
3 years after the date of completion of the initial private placing of
22,500,000 shares by the Company.
An allocation of 100,000 share options in the Company at the price placing price
that took place on 24 August 2005 of 30 pence per share in accordance with the
normal share scheme of the company.
An allocation of 250,000 share options in the Company on 16 November 2005 as
part of the options granted as detailed above.
An allocation of 250,000 share options in the Company on 18 September 2006 as
part of the options granted as detailed above.
An allocation of 375 000 share options to the non-executive directors in the
Company on 18 September 2006 as part of the options granted as detailed above.
The above share options shall fall within the total of the overall share option
scheme of 10% of issued share capital.
The number and average weighted exercise price of share options are
as follows:
2006
Weighted average Number of Options
exercise price
(cents/share)
Outstanding at the beginning of the year 0,65 1 900 000
Forfeited during the year 0,88 450 000
Exercised during the year - -
Granted during the year 0,65 1 475 000
Outstanding at the end of the year 0,65 2 925 000
Exercisable at the end of the year - 440 000
The options outstanding as at 31 December 2006 have an exercise
price in the range of $0.39 cents to $0.88 cents and a weighted average
contractual life of 9.18 years. The fair value of services received in return
for the share options granted are measured by reference to the fair value of
share options granted. The estimate of the fair value of the share options
granted is calculated using the Black-Scholes model.
XCELDIAM LIMITED
NOTES TO THE annual FINANCIAL STATEMENTS
Year ended 31 December 2006
2006 2005
Fair value of share options and
assumptions
Fair value at measurement date $0.09 cents - $0.40 cents $0.13 cents - $0.47 cents
Share price $0.36 cents $0.45 cents
Exercise price $0,39 cents - $0.88 cents $0,38 cents - $0.77 cents
Expected volatility 35% 35%
Expected dividends - -
Risk free interest rate 7,50% 7,50%
Option life 1 - 3 years 1 - 3 years
Share options are granted under a 3 year service condition.
16. Related party transaction
a) 4,250,000 shares in the Company were issued at par and US$100,000 was
paid to E A B Booyse and F R Booyse for the claims, being a 40% interest in the
Alluvial prospecting contract and a 39% interest in the kimberlite prospecting
contract relating to the Luangue Concession in Angola, and 100% of the issued
share capital in Frannor Investments and Financing (Pty) Limited.
b) The Company has entered into a consultancy services agreement with
effect from 1 March 2005 with Amari Management Services (Pty) Ltd ("Amari"), a
company in which two non-executive directors of the company are beneficial
owners. Under this agreement, Amari had agreed to provide the following
services at a monthly fee based on usage, these services being terminable on six
months written notice:
- Logistical expertise and personnel;
- Human resources expertise and personnel;
- Corporate affairs resources and personnel;
- Administration services and personnel;
- Information technology services and personnel; and
- Office space and associated facilities management services.
17. Commitments
During the year the Group has entered into various contracts for
machinery and equipment to begin the drilling phase of the prospecting
programme.
At balance sheet date the following commitments existed for work
contracted for but not yet delivered.
USD
Kimberlite processing plant 225 676
RC Drill Rig 423 754
649 430
Annual Report and Accounts
Copies of the Annual Report and Accounts for the year ended 31 December 2006
will be posted to shareholders by 30 June 2007 and will be available, free of
charge, from the offices of the Company's Nominated Adviser, WH Ireland Limited,
11 St James's Square, Manchester, M2 6WH for a period of 14 days from the date
of their posting. The Company's Annual General Meeting will be convened in due
course by further notice to all shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAFKNAFSXEFE
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