Latest News

Interim Results

RNS Number : 0751B
African Potash Ltd
28 March 2013
 



African Potash Limited / Index: AIM / Epic: AFPO / Sector: Mining

28 March 2013

African Potash Limited ('African Potash' or the 'Company')

Interim Results

 

African Potash Limited, the AIM listed African exploration company, is pleased to announce its results for the six months ended 31 December 2012.

 

Chief Executive's Statement

 

I am delighted to report on the significant progress African Potash has made in establishing itself as an emerging potash exploration and development company in line with the Company's strategy to capitalise on the long term growth fundamentals of potash underpinned by the increasing demand for potash from the agricultural sector.  The Board's primary objective of acquiring either potash assets or acquiring or investing in businesses with potash assets or projects in sub-Saharan Africa was achieved post period end, following the acquisition of an indirect 70% interest in the Lake Dinga Project ('the Project') in the Republic of Congo, which is highly prospective for potash. 

 

The Board identified the Project as a compelling investment opportunity in early 2012.  The Project boasts good access to infrastructure, is located less than 60km from the port of Pointe-Noire, and is surrounded by numerous potash development projects including the Sintoukola Potash Project, owned by Elemental Minerals Limited and the Mengo Potash Project, owned by MagIndustries Corp, which is majority owned by Evergreen Resources Holdings (BVI) Ltd, a major Chinese investment company.

 

Utilising its extensive experience in the sub-Saharan African resource sector, the Board is now committed to proving up the resource potential of the Project whilst identifying additional assets that adhere to our investing policy. 

 

Lake Dinga Project 

On 3 February 2012 African Potash entered into an agreement to acquire Patagonia Capital Limited ('Patagonia') (the 'Original Agreement').  Patagonia holds a 70% interest in La Societe des Potasses et des Mines S.A. ('SPM'), a potash exploration company located in the Republic of Congo.  Completion of the Original Agreement was subject to certain conditions precedent which, it unfortunately transpired, could not be satisfied prior to the contractual long stop date and accordingly the Original Agreement was terminated on 8 October 2012.

 

Following the termination of the Original Agreement, SPM was granted a "permis des recherches" by the government of the Republic of Congo on 3 December 2012 (for potash and related minerals) and subsequently the owners of Patagonia re-approached the Board to enquire whether the Company would be interested in reprising the proposal to acquire Patagonia.

 

On 28 January 2013, the Company entered into a further acquisition agreement pursuant to which the Company agreed to acquire the entire issued share capital of Patagonia (for a maximum consideration of US$15 million).  This acquisition constituted a reverse takeover under the AIM rules and was approved by our shareholders at a General Meeting on 21 February 2013. 

 

A further key development for the Company, which occurred in tandem with the acquisition of Patagonia, was the appointment of Mr. Jean-Pierre Conrad as non-executive Chairman. Mr. Conrad brings a wealth of experience in the resources industry to the Company, in addition to considerable background in the financial markets. I am confident that his undoubted business acumen, and networks from his senior level positions at international resource companies including Glencore and Xstrata, will be invaluable to the Company as we move forward with the development of the Project.

 

Financial Results

Following completion of the acquisition of Patagonia, the Company has reversed the provision for impairment on loans made to Patagonia and consequently is reporting a profit before tax attributable to equity holders of US$1.2m for the six months ended 31 December 2012 (2011: loss US$1.0m).

 

Outlook

The outlook for commercial potash exploration in the Republic of Congo remains highly positive, with rising population and growing affluence in developing countries leading to ever increasing demand for agricultural produce.  With potash being a key constituent in fertiliser, the pressing need to develop quality potash assets is expected to continue for many years to come, creating a significant opportunity for an investing company such as African Potash to identify and develop projects, and in so doing delivering significant shareholder value.

 

We aim to capitalise on this strong potash outlook by proving up the resource potential of our newly acquired Project.  With an experienced Board and management team I am confident we will be able to rapidly advance the Project up the value development curve.  Furthermore, we will continue to look for additional potash assets that satisfy our stringent investment criteria. 

 

Finally, I would like to thank both our shareholders and our team for their support and look forward to providing updates on the Company's activities in due course as we look to affirm our position as an emerging potash exploration and development company.

 

Ed Marlow

Chief Executive

 

For further information visit www.africanpotash.com or contact the following:

Ed Marlow

African Potash Limited

+44 (0) 20 7408 9200      

David Foreman

Cantor Fitzgerald Europe

+44 (0) 20 7107 8000      

Rick Thompson

Cantor Fitzgerald Europe

+44 (0) 20 7107 8000      

Richard Greenfield

GMP Securities Europe LLP

+44 (0) 20 7647 2836      

Susie Geliher

St Brides Media and Finance Ltd

+44 (0) 20 7236 1177      

Charlotte Heap

St Brides Media and Finance Ltd

+44 (0) 20 7236 1177      

 

 

Unaudited Comprehensive Income Statement

For the period to 31 December 2012

 



Unaudited

6 months to

31 December

2012

Unaudited

period to

31 December

2011

Unaudited

period to

30 June

2012


Note

$'000

$'000

$'000





Operating expenses


(500)

(869)

(1,275)

Other income / (expenses)


1,581

(124)

(1,535)

Operating profit / (loss)


1,081

(993)

(2,810)

Net finance income


72

1

16

Profit / (loss) before taxation


1,153

(992)

(2,794)

Income tax expense


-

-

-

Profit / (loss) for the period attributable to equity holders


1,153

 

(992)

 

(2.794)






Earnings / (loss) per share: basic and diluted

 

5

0.6 cents

 

(0.7 cents)

 

(1.6 cents)

 

 

Unaudited Balance Sheet

As at 31 December 2012

 



Unaudited

31 December

2012

Unaudited

31 December

2011

Unaudited

30 June

2012


Note

$'000

$'000

$'000






Non current assets





Loans and receivables


1,583

839

-

Total non current assets


1,583

839

-






Current assets





Trade and other receivables


74

10

33

Cash and cash equivalents


7,807

9,145

8,192

Total current assets


7,881

9,994

8,225






Total assets


9,464

9,994

8,225






Current liabilities





Trade and other payables


(194)

(75)

(108)






Net assets


9,270

9,919

8,117






Equity





Issued capital

6

10,911

10,911

10,911

Retained earnings


(1,641)

(992)

(2,794)

Total equity attributable to equity holders


 

9,270

 

9,919

 

8,117











 

Unaudited Statement of Changes in Equity



Ordinary share capital

$'000

Retained earnings

$'000

 

Total

$'000

At 11 August 2011


-

-

-

Loss for the period


-

(992)

(992)

Total comprehensive income for the period


-

(992)

(992)






Transactions with owners





Issue of shares


10,911

-

10,911

Total transactions with owners


10,911

-

10,911






Balance at 31 December 2011


10,911

(992)

9,919






Loss for the period


-

(1,802)

(1,802)

Total comprehensive income for the period


-

(1,802)

(1,802)











Balance at 30 June 2012


10,911

(2,794)

8,117






Profit for the period


-

1,153

1,153

Total comprehensive income for the period


-

1,153

1,153






Balance at 31 December 2012


10,911

(1,641)

9,270






 

 

 

 

 

Unaudited Statement of Cash Flows

 

For the period to 31 December 2012

Unaudited

6 months to

31 December

2012

Unaudited

period to

31 December

2011

Unaudited

period to

30 June

2012

Operating activities


$'000

$'000

$'000

Profit / (loss) before tax


1,153

(992)

(2,794)

Adjustments for:





Impairment of loans and receivables

(1,441)

-

1,441

Net interest income


(72)

(1)

(16)

Operating cash flow before movements in working capital


(360)

(993)

(1,369)

Working capital adjustments:





- Increase  in receivables

(41)

(10)

(33)

- Increase in payables


87

75

108

Cash used in operations


(314)

(928)

(1,294)

Net interest received / (paid)


72

1

16

Net cash outflow from operating activities

(242)

(1,766)

(1,278)






Investing activities





Advance of loans and receivables


(143)

(839)

(1,441)

Net cash flow from investing activities

(143)

(839)

(1,441)

Financing activities





Proceeds from issue of share capital

-

10,911

10,911

Net cash flow from financing activities

-

10,911

10,911





Net increase in cash and cash equivalents

(385)

9,145

8,192

Cash and cash equivalents at start of the period

8,192

-

-

Cash and cash equivalents at end of the period


7,807

9,145

8,192

 

 

 

Notes to the Unaudited Interim Financial Statements

 

1.

General information

 

African Potash is a non-cellular company limited by shares incorporated and domiciled in Guernsey.  The Company was incorporated on 11 August 2011.  The address of its registered office is Richmond House, St Julians Avenue, St Peter Port, Guernsey GY1 1GZ.

 

The Company shares are listed on the AIM Market of London Stock Exchange plc.

 

The unaudited interim financial statements for the 6 months ended 31 December 2012 were approved for issue by the board on 27 March 2013.

 

The interim financial statements for the 6 months ended 31 December 2012 and the period ended 31 December 2011 are unaudited and do not constitute full accounts.  The comparative figures for the period ended 30 June are extracts from the annual report and do not constitute statutory accounts.

 

The unaudited interim financial statements have been prepared in US Dollars as this is the currency of the primary economic environment in which the Company operates.

 

2.

Basis of preparation

 

The basis of preparation and accounting policies set out in the Annual Report and Accounts for the period ended 30 June 2012 have been applied in the preparation of these unaudited interim financial statements.  These have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and with those of the Standing Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) of the International Accounting Standards Board (IASB). References to 'IFRS' hereafter should be construed as references to IFRSs as adopted by the EU

 

3.

Significant accounting policies

 

Basis of accounting

The unaudited interim financial statements have been prepared on the historical cost basis except for financial instruments measured at fair value.  The principal accounting policies adopted are consistent with those of the financial statements for the period ended 30 June 2012.

 

4.

Segment information

 

The directors consider that the Company operates in one geographical segment, Africa, however whilst it is evaluating investment opportunities it is unable to allocate expenditure to a business segment.

 

5.

Earnings per share

 

The calculation of basic and diluted earnings per share is based on the following data:

 



Unaudited

6 months to

31 December

2012

Unaudited

period to

31 December

2011

Unaudited

period to

30 June

2012



$'000

$'000

$'000

Profit / (loss) the purpose of calculating basic loss per share attributable to equity holders

 

1,153

 

(992)

 

(2,794)

Number of shares





Weighted average number of ordinary shares for the purposes of calculating basic and diluted loss per share

 

 

198,700,00

141,481,690

 

 

174,357,632





Basic and diluted earnings / (loss) per share (cents)

0.6c

(0.7c)

(1.6c)

 

6.

Share Capital

 




Ordinary shares of no par value




Allotted and fully paid




Number

$'000






At 31 December 2011, 30 June 2012 and 31 December 2012


198,700,000

10,911






 

Between incorporation and 23 September 2011, 40 million ordinary shares were issued for cash at a price of 0.1p per ordinary share and 35 million ordinary shares were issued for cash at a price of 2p per ordinary share.

 

On 30 September 2011, 83.7 million ordinary shares were issued for cash at a price of 5p per ordinary share.

 

On 31 October 2011, 40 million ordinary shares were issued for cash at a price of 5p per ordinary share.

 

 

7.

Subsequent Events

 

On 28 January 2013, the Company entered into an acquisition agreement pursuant to which the Company acquired the entire issued share capital of Patagonia Capital Limited ('Patagonia') for a maximum consideration of US$15 million.  Patagonia has a 70% interest in La Societe des Potasses et des Mines SA which holds a Permis des Recherches for potash and related minerals in the Lac Dinga area of the Republic of Congo.

 

The acquisition of Patagonia constituted a reverse takeover under the AIM rules and was approved by Shareholders at a General Meeting held on 21 February 2013.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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