TIDMBOD
RNS Number : 5344U
Botswana Diamonds PLC
29 March 2023
29(th) March 2023
Botswana Diamonds PLC ("Botswana Diamonds" or the "the
Company")
Unaudited Interim Statement and Financial Results for the Six
Months Ended 31 December 2022
Botswana Diamonds PLC (AIM:BOD) is a diamond explorer in
Sub-Saharan Africa with startup diamond production in South Africa.
We are one of the most active players in this field and offer one
of the few high-potential opportunities to invest in junior diamond
exploration in Africa, or elsewhere.
Highlights:
- The first diamonds have now been produced from the Marsfontein
dumps and gravels project in South Africa.
- Plans to begin production on the nearby Thorny River hard rock
kimberlite dyke system are well advanced.
- In Botswana, we expanded our additional stake in the prospective Maibwe concession.
Despite global political and economic turbulence, diamond prices
have been resilient. The United States stands-out with growing
diamond jewellery sales. Expected growth in Asian markets has been
disrupted, but long-term trends remain positive.
Supply disruptions support prices. Alrosa - the world's largest
diamond producer by volume - continues to supply - though more
smaller stones could hit the market. Diamonds from Botswana and
South Africa, where we operate, tend on average to be bigger and of
higher quality.
The industry is in a period of adjustment, as lab grown diamonds
find their market niche as an entry-level "value" diamond for those
not yet able to afford the real thing. But the re-sale value of
non-natural stones shows that they constitute a separate segment.
Consider the automotive industry, which offers excellent economy
and mid-priced cars but luxury car sales grow. There will be
(consumer) room for both.
Natural diamonds are more than compressed carbon. Owning them
represents a mix of human emotions, aspirations and feelings.
Diamonds are forever.
Operations: South Africa
Our recent focus has been bringing two operations into
production: Marsfontein dumps and gravels and the adjacent Thorny
River Dyke system. Diamonds are now being produced from
Marsfontein, which is a proof-of-concept trial project. We have
contracted out all production operations in return for a 15%
production royalty on Run-of-Mine goods, and 25% on special
diamonds. This plant, plus operational experience gained, will
facilitate operations this year on the larger Thorny River
project.
Teething issues at Marsfontein, along with plant delivery delays
and adverse weather delayed the first production by a month.
Current operations are processing 500 tons of dumps and gravels per
day. Diamonds are now being produced although as yet we do not have
a true representation of the average grade and quality.
Over the past two years we conducted drilling campaigns on the
Thorny River kimberlite dyke system and have identified several
areas where dykes have expanded, making mining more commercial. We
plan to mine these hot-spots using the same operational approach as
at Marsfontein - for a 15% production royalty agreement using the
same plant and equipment. These projects will thus deliver cash to
BOD with no further capital expenditure.
BOD is obtaining two full mining permits over the Thorny River
licences. Once the permits have been issued and the gravels mined
out at Marsfontein, the plant and equipment will move to Thorny
River. Production at Thorny River is expected to commence in the
second half of 2023.
Botswana:
Current Botswanan activities are in the under-explored Kalahari.
Negotiations with the receiver of BCL (a former Botswana copper
producer), allowed Siseko (of which BOD owns 51%) and our local
partner Future Minerals, to acquire 50% each of the ten Prospecting
Licenses in the central Kalahari. Diamonds were confirmed in
earlier drilling. Given the Kalahari's potential, we allowed
certain low potential licences to expire.
Prevailing circumstances during 2022 complicated our efforts to
secure a new joint venture partner to acquire the Ghaghoo mine,
which is close to our KX36 project. This fully equipped diamond
mine was placed on care and maintenance by the owner, Gem
Diamonds.
There now seems reviewed market interest in Ghaghoo, and we will
report as appropriate.
Outlook:
In January 2023, we raised GBP350,000 new capital via the
exercise of outstanding warrants. The cash came from a small group
of investors, including directors. Assuming operational success,
royalties from the Marsfontein /Thorny River operations are
expected to fully fund ongoing activities by end 2023.
Recent years have been difficult for junior diamond explorers
with little new cash available. But without exploration there can
be no new mines. And most new greenfield discoveries are made by
juniors.
Botswana Diamonds has raised money and prospected for ten years
with some limited success to date; most of our early-stage
investors continue to support new funding efforts and I hope that
their loyalty can be rewarded shortly.
John Teeling
Chairman
29(th) March 2023
_______________
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:
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
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
+44 (0) 207 138 3206
BlytheRay - PR +44 (0) 207 138 3553
Megan Ray +44 (0) 207 138 3206
Said Izagaren +44 (0) 207 138 3206
Teneo
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell +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 22 31 Dec 21 30 Jun 2022
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Administrative expenses (330) (228) (486)
Impairment of exploration and evaluation
assets - - (253)
---------------------- ------------------- --------------------
OPERATING LOSS (330) (228) (739)
LOSS BEFORE TAXATION (330) (228) (739)
Income tax expense - - -
---------------------- ------------------- --------------------
LOSS AFTER TAXATION (330) (228) (739)
Exchange difference on translation of foreign
operations (24) (159) 23
---------------------- ------------------- --------------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (354) (387) (716)
====================== =================== ====================
LOSS PER SHARE - basic and diluted (0.04p) (0.03p) (0.09p)
====================== =================== ====================
CONDENSED CONSOLIDATED BALANCE SHEET 31 Dec 22 31 Dec 21 30 Jun 2022
unaudited unaudited audited
ASSETS: GBP'000 GBP'000 GBP'000
NON-CURRENT ASSETS
Intangible assets 8,764 8,126 8,185
Plant and equipment 207 207 207
---------------------- ------------------- --------------------
8,971 8,333 8,392
---------------------- ------------------- --------------------
CURRENT ASSETS
Other receivables 38 16 49
Cash and cash equivalents 95 318 159
---------------------- ------------------- --------------------
133 334 208
---------------------- ------------------- --------------------
TOTAL ASSETS 9,104 8,667 8,600
---------------------- ------------------- --------------------
LIABILITIES:
CURRENT LIABILITIES
Trade and other payables (1,041) (650) (734)
---------------------- ------------------- --------------------
TOTAL LIABILITIES (1,041) (650) (734)
NET ASSETS 8,063 8,017 7,866
====================== =================== ====================
EQUITY
Share capital - deferred shares 1,796 1,796 1,796
Share capital - ordinary shares 2,392 2,124 2,198
Share premium 11,844 11,383 11,487
Share based payments reserve 111 111 111
Retained Deficit (6,774) (5,933) (6,444)
Translation Reserve (323) (481) (299)
Other reserves (983) (983) (983)
---------------------- ------------------- --------------------
TOTAL EQUITY 8,063 8,017 7,866
====================== =================== ====================
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share based
Share Share Payment Retained Translation Other Total
Capital Premium Reserves Deficit Reserve Reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 30 June
2021 3,778 10,984 111 (5,705) (322) (983) 7,863
Ordinary
shares issued 142 418 - - - - 560
Share issue
expenses - (19) - - - - (19)
Total
comprehensive
loss (228) (159) - (387)
------------------ ------------------ ------------------- ------------------ ------------------- ------------------- --------------------
As at 31
December 2021 3,920 11,383 111 (5,933) (481) (983) 8,017
Ordinary
shares issued 74 104 - - - - 178
Total
comprehensive
loss - (511) 182 - (329)
------------------ ------------------ ------------------- ------------------ ------------------- ------------------- --------------------
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
================== ================== =================== ================== =================== =================== ====================
CONDENSED CONSOLIDATED CASH FLOW Six Months Six Months Year
Ended Ended Ended
31 Dec 22 31 Dec 21 30 Jun 2022
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the period (330) (228) (739)
Impairment of exploration and evaluation assets - - 253
Foreign exchange losses (2) 2 16
------------------- ------------------- ------------------
(332) (226) (470)
Movements in Working Capital 76 (69) (17)
------------------- ------------------- ------------------
NET CASH USED IN OPERATING ACTIVITIES (256) (295) (487)
------------------- ------------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to exploration and evaluation assets (105) (91) (222)
------------------- ------------------- ------------------
NET CASH USED IN INVESTING ACTIVITIES (105) (91) (222)
------------------- ------------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue 295 560 738
Share issue costs - (19) (19)
------------------- ------------------- ------------------
NET CASH GENERATED FROM FINANCING ACTIVITIES 295 541 719
------------------- ------------------- ------------------
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS (66) 155 10
Cash and cash equivalents at beginning of the
period 159 165 165
Effect of foreign exchange rate changes 2 (2) (16)
CASH AND CASH EQUIVALENT AT THE OF THE PERIOD 95 318 159
=================== =================== ==================
Notes:
1. INFORMATION
The financial information for the six months ended 31 December
2022 and the comparative amounts for the six months ended 31
December 2021 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 2022 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
22 21 22
GBP'000 GBP'000 GBP'000
Numerator
For basic and diluted EPS retained
loss (330) (228) (739)
============== ============== ==============
No. No. No.
Denominator
Weighted average number of ordinary
shares 924,921,167 813,171,948 844,141,491
============== ============== ==============
Loss per share - Basic and Diluted (0.04p) (0.03p) (0.09p)
============== ============== ==============
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
22 21 22
Exploration and evaluation assets: GBP'000 GBP'000 GBP'000
Cost:
Opening balance 9,807 9,563 9,563
Additions 603 91 222
Exchange variance (24) (159) 22
10,386 9,495 9,807
======== ======== ========
Impairment:
Opening balance 1,622 1,369 1,369
Provision for impairment - - 253
-------- -------- --------
1,622 1,369 1,622
======== ======== ========
Carrying Value:
Opening balance 8,185 8,194 8,194
======== ======== ========
Closing balance 8,764 8,126 8,185
======== ======== ========
Regional Analysis 31 Dec 31 Dec 30 Jun
22 21 22
GBP'000 GBP'000 GBP'000
Botswana 6,638 6,925 6,636
South Africa 2,126 1,201 1,549
Zimbabwe - - -
8,764 8,126 8,185
========= ========= =========
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 recorded an impairment charge
of GBP253,380 on expenditure incurred exploring for new licences in
Botswana and South Africa and expenditure incurred on the Ghaghoo
diamond mine as the Group was unsuccessful in securing a joint
venture partner to complete the acquisition.
On 11 November 2014 the Brightstone block was farmed out to BCL
Investments (Proprietary) Limited, a Botswana Company, who assumed
responsibility for the work programme. Botswana Diamonds will
retain a 15% equity interest in the project.
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 Group increased its' interest from
45.94% to 74%. The consideration for Vutomi comprised 56,989,330
new ordinary shares of GBP0.0025 each in the Company. There are no
lock-in arrangements, but the Consideration Shares were issued in
two equal tranches (three months apart) following Completion.
Accordingly, 28,464,665 Consideration Shares ("First Tranche
Consideration Shares") were issued to the vendors of Vutomi on 28
September 2022. 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, in order to comply with South African
requirements on empowerment ownership, which was to be funded by a
loan from Botswana Diamonds. 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 GBP35,854 (June 2022:
GBP71,768) 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
22 21 22
GBP'000 GBP'000 GBP'000
Opening balance 207 207 207
Additions - - -
Closing 207 207 207
========= ========= =========
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 2021 and 1 July 2022 239,487,648 1,796,157 -
At 30 June 2022 and 31 December 2022 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 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
------------ -------------- --------------
Issued during the period 29,666,667 74 104
Share issue expenses - - -
At 30 June 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
============ ============== ==============
Movements in share capital
On 4 July 2022, a total of 1,666,667 warrants were exercised at
a price of 0.60p per warrant for GBP10,000.
On 8 September 2022, a total of 47,000,000 warrants were
exercised at a price of 0.60p per warrant for GBP282,000.
On 28 September 2022, a total of 28,464,665 shares were issued
at a price of 0.90p per share totalling GBP256,182 to Vutomi Mining
Pty Ltd and Razorbill Properties 12 Pty Ltd (collectively known as
'Vutomi'), as part consideration for the acquisition of the
company. Further information is detailed in Note 4 above.
On 6 October 2022, a total of 412,545 warrants were exercised at
a price of 0.60p per warrant for GBP2,475.
7. TRADE AND OTHER PAYABLES
31 Dec 31 Dec 30 Jun
22 21 22
GBP'000 GBP'000 GBP'000
Trade payables 82 25 48
Petra Diamonds creditor 123 104 123
Accruals 594 521 563
Consideration due - Vutomi acquisition 242 - -
1,041 650 734
========= ========= =========
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.
The Company was due to issue a total of 28,524,665 ordinary
shares of GBP0.0025 each in the Company at a price of 0.85p per
share as part consideration of the acquisition of Vutomi. These
shares were issued after the period end on 27 January 2023. Further
information is detailed in Notes 4 and 9.
8. SHARE BASED PAYMENTS
WARRANTS
Dec 2022 Jun 2022 Dec 2021
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 162,816,667 1.07 192,483,334 1.07 139,166,667 0.60
Issued - - 0.60 55,000,000 2.00
Exercised (49,079,212) 0.60 (29,666,667) 0.60 (1,683,333) 0.60
Expired - - - - - -
Outstanding
at end of
the period 113,737,455 1.28 162,816,667 1.07 192,483,334 1.07
Further information of the warrants are detailed in Note 6
above.
9. POST BALANCE SHEET EVENTS
On 27 January 2023, the Company issued 28,524,665 ordinary
shares of GBP0.0025 each in the Company in respect of the second
tranche of consideration shares due following completion of the
acquisition of Vutomi. Further information is detailed in Notes 4
and 7 above.
On 27 January 2023 the Company announced that it had raised
GBP352,425 pursuant to the receipt of conversion notices from
holders of 58,737,455 warrants exercisable at 0.60 pence each.
10. APPROVAL
The Interim Report for the period to 31(st) December 2022 was
approved by the Directors on 28(th) March 2023.
11. AVAILABILITY OF REPORT
The Interim Statement will be available on the website at
www.botswanadiamonds.co.uk
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IR MZGZFNRLGFZM
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