Quarterly Report • Nov 6, 2013
Quarterly Report
Open in ViewerOpens in native device viewer
| Key figures | |
|---|---|
| SEK million | |||||
|---|---|---|---|---|---|
| Q3 2012 | YTD 2012 | Q3 2011 | YTD 2011 | 2011 | |
| Sales | - | - | - | 5.9 | 5.8 |
| EBITDA | -4.9 | -18.8 | -8.1 | -53.9 | -62.5 |
| Impairment losses and depreciation | -0.2 | -1.9 | -0.4 | -168.5 | -168.9 |
| Net result | -4.6 | -19.9 | -11.6 | -177.3 | -181.2 |
| Investments in period | 8.3 | 11.9 | 1.9 | 18.4 | 21.6 |
| Cash at end of period | 81.5 | 81.5 | 18.0 | 18.0 | 11.0 |
| Interest bearing long term debt | 5.0 | 5.0 | 6.4 | 6.4 | 6.3 |
IGE Resources' main activities in the third quarter were mainly related to geologicalmetallurgical and end-product studies for Rönnbäcken, the renewed appeal process and continued evaluation work related to the Group's diamond concessions in South Africa (SA) and the Democratic Republic of Congo (DRC).
IGE had no income in the third quarter, while the Group's costs and investments mainly reflect the increased activity in the subsidiary Nickel Mountain Resources AB related to the Rönnbäcken project. Furthermore, some small scale evaluation work related to DRC diamond projects was done during the quarter. The financial effect is a negative cash flow in the third quarter.
EBITDA for the quarter amounted to SEK -4.9 million, compared to SEK -8.1 million for the same period in 2011.
Operating expenses during the quarter were reduced from SEK -8.1 million in the third quarter last year to SEK -4.9 million in this year's third quarter, a reduction of 40 per cent.
Cash flow during the first nine months of 2012 amounted to SEK 70.5 million (SEK -22.1 during the same period last year). The cash flow for 2012 is affected positively by the equity issue completed in the second quarter.
Cash and cash equivalents at the end of the third quarter were SEK 81.5 million (SEK 18.0 million end of third quarter last year).
IGE Resources' total assets at the end of September 2012 were SEK 423.6 million, compared to SEK 351.6 million at the end of third quarter 2011.
Net investments during the third quarter amounted to SEK 8.3 million (SEK 1.9 million in third quarter last year), reflecting the current activity level in the Rönnbäcken nickel project.
The Board's process of assessing IGE's assets and operations and defining the Company's strategy going forward, including a demerger of the Group, was not completed in the third quarter. The Board expects to present its proposed solution and call for an Extraordinary General Meeting to resolve the issue during the fourth quarter 2012.
In October, the Swedish Chief Mine Inspector granted the Exploitation Concession Rönnbäcken K nr 3 encompassing the Sundsberget deposit. The concession gives the right to extract and market nickel, cobalt, iron, chrome, gold, silver, platinum and palladium metals. The accompanying Environmental Impact Assessment (EIA), focusing on land use aspects, was also approved. The concession was granted with the condition that the concession holder holds annual consultations with Vapstens sameby, the Vapsten Reindeer Husbandry Cooperative ("Vapsten") in order to minimize the impact of the mining activity on the reindeer husbandry. An exploitation concession is granted for a mineral deposit if there is a probability for an economic exploitation of the deposit and if the nature and location of the deposit does not make it inappropriate that the concession is granted. An exploitation concession is valid for 25 years, with extensions available if mining is on-going.
Nickel Mountain's new office in Tärnaby was opened in August. It is staffed by two locallybased employees whose focus will be to provide information about the project and to engage in direct dialogue with the inhabitants in the region. The office arranged a project site visit by officials from the Storuman municipality to review and identify needs for improvement of the infrastructure leading to the site. The discussions helped improve the understanding of the local infrastructure with identification of weaknesses and areas needing improvement, and provided
possibilities for expansion of Tärnaby village to be able to accommodate new workers. The Tärnaby office also arranged a field trip to the project site for various labour union representatives from Norrbotten and Västerbotten, which had invited Nickel Mountain to present on the Rönnbäcken project at their two-day seminar. The meeting was well attended and good discussions resulted.
During the third quarter of 2012, Nickel Mountain Resources AB (Nickel Mountain) received the results of a number of activities focussed on the Rönnbäcken Nickel Project which were launched in the previous quarters.
Nickel Mountain has retained external experts to assess the viability of recovering a magnetite by-product and to investigate the saleability of such a concentrate. While a 66% iron containing concentrate could be produced, the occurrence of higher levels of nickel (~0.6%), chrome (~2.2%) and zinc (~0.04%) and the fine particle size of the concentrate indicated that the product would not be attractive for carbon steel applications. However, it was recommended that Nickel Mountain consider conversion of the Nickel Mountain concentrate to direct reduced iron/hot briquetted iron (DRI/HBI) for use as a scrap substitute or supplement in low alloy and stainless steel manufacture. A potential target market for sales of a high chrome/nickel DRI/HBI product is in relative proximity with a number of low alloy and stainless steel producers located in Sweden or within the European region.
It was also identified that the magnetite concentrate could potentially be suitable as dense medium separation (DMS) in coal processing applications. While we understand that DMS constitutes a limited market, some initial testwork indicated that the magnetic properties were promising and that the size distribution of the concentrate was acceptable. Further dedicated testwork and market research are required to assess the potential of a DMS application
Similarly, Nickel Mountain is assessing the production of ferronickel, a value-added product, from further processing of the Ronnbacken nickel concentrate. An initial desktop study has indicated the possibility of producing either an intermediate calcine product for sale to ferronickel smelters, or a final ferronickel product for sale to stainless steel mills.
All of these recent desktop studies on end products are encouraging. However, further technical-economic studies will be required later on to generate more detailed opex and capex estimates and to confirm the viability of such process routes.
Complementary to these end-product studies, Nickel Mountain has also undertaken a program of technical studies aimed at building upon the existing data and knowledge of its resources. The greater understanding of the characteristics of the resources provided by these studies will aid in enhancing the performance of corresponding metallurgical testwork for the evaluation of mineral processing routes and end-products.
Significant focus on the geological model of Rönnbäcken was provided in the last quarter. Recognizing the high concentration ratio planned for processing the Rönnbäcken deposits, a greater understanding of the constituents within the various rock types is important in order to best control and predict project economics. Specifically, the program is aimed at 1) investigating the range and type of ultramafic rocks types and their alteration and verifying how these relate to the nickel mineralization species which allow Rönnbäcken to produce much higher grade nickel concentrate than is typically produced, 2) investigating the stratigraphic and structural controls of some minor elements that need to be accounted for in our concentrate marketing strategy, and 3) investigating which geochemical elements provide guides to the distribution of such minor elements.
Nickel Mountain has launched a program to develop geological-metallurgical domains within the outlined mineral resource that will increase the robustness of the predictability of the project production plan. To this end, a worldwide renowned mineral processing testing facility in Finland is carrying out domaining testwork on samples representing distinct domains, in order to characterise their lithologies. Once characterised, flotation kinetics from the domains will be applied in metallurgical testwork to predict flotation performance based on lithology (the foundation of a Geological-Metallurgical model).
These activities are aimed at better defining technical aspects required for the pre-feasibility study (PFS).
The company is awaiting the renewed decision by the Swedish Government on appeals filed by Vapsten against the awarding of previous concessions relating to the Rönnbäcken Nickel Project, K nr 1 for the Vinberget deposit and K nr 2 for the Rönnbäcknäset deposit. The newly awarded concession K nr 3 has also been appealed to the Government by Vapsten and other parties.Vapsten has requested time until 5 December 2012 to submit the grounds for their appeal. The company has requested that these three appeals by Vapsten should be handled together and will submit its response to the Government three weeks after Vapsten has submitted the grounds for their appeal.
As a result of the renewed appeal process, the Rönnbäcken project schedule has been delayed and launch of the PFS as well as studies required for the Environmental Permit application have been put on hold pending a positive Government decision to uphold the granting of the two concessions. Once a decision is made by the company to launch these activities, the timing required for preparation and filing of a final application for an Environmental Permit is estimated to take at least 18 months, after which the environmental court is estimated to require a further 18 months for reviewing the application. This period of 3 years would also be required to complete prefeasibility and feasibility studies. Once an Environmental Permit and a Building Permit have been granted, construction activity can commence and is planned to occur over a period of two years.
Nickel Mountain Resources sold its remaining 10% interest in the Stekenjokk zinc-copperlead project to Vilhelmina Mineral AB for an undisclosed cash payment.
IGE's approach to developing its diamond assets is still under consideration. While awaiting the Board's new diamond strategy, minor work has been undertaken to further clarify the commercial and operational options available.
The status of the Bakerville diamond project in South Africa remains relatively unchanged from the second quarter 2012. The cooperation with the contract miner Frontier, who has operated the mine since the beginning of 2012, has been terminated. Frontier is currently in the process of removing its equipment from the area. Some of IGE's
equipment on the premises has been acquired by Frontier for a minor cash amount.
IGE will not suffer any financial loss or carry any costs related to the termination of the cooperation.
IGE is currently reviewing alternative production scenarios for Bakerville, including bringing in a new mining contractor. IGE's previously announced position that the Company will not carry further investments in Bakerville remains firm. Future production in Bakerville is therefore dependent on new partners financing necessary investments and operational costs.
Bakerville is proving a challenging project under the current economic climate; the project represents some uncertainties, but it also includes a significant upside potential.
The Harts River diamond project is currently on hold, following bulk sampling and test mining undertaken by a small scale contractor in the third quarter.
Diamond content in the surface level was again confirmed. 24,000 tonnes of gravel were treated in this operation, yielding an average grade of 0.27 cts per 100 tonne. Samples taken from sections of an identified calcrete channel were encouraging and indicted grades in the order of 2.5 cts per hundred tonne in this area.
IGE's costs related to the activities in the third quarter were marginal. The results of the bulk sampling give grounds for cautious optimism. IGE considers the project to be interesting if suitable financing of production can be found. Due to Hart River's low overall low grades, a larger plant and mining will be necessary in order to process enough material.
In order to verify the commercial viability of Harts River, exploration into the deeper levels is essential. This is however not a priority in the near future.
In the Democratic Republic of Congo (DRC), the work towards finding a solution to get the two river based projects Longatshimo and Tshikapa are on-going. An independent geologist verified the quality of IGE's partner's processes and output in the area during a visit in October.
IGE's dialogue with the Company's local partners is well advanced and is conducted in a positive atmosphere.
The two DRC projects both include rivers, where dredging for diamonds is the main production method. Dredging and processing of river gravel is far less expensive that traditional surface mining. There is less need for equipment and nature itself has along the rivers produced gravel which generally has a higher diamond content.
The grades from the existing operation run by the local partner on the Tshikapa license are very encouraging. According to an independent geologist report in October 2012, the grades from the gravel in the river averaged to around 88 carats per tonne. By comparison, grades from previous surface mining carried out by IGE in Angola and South Africa have averaged somewhere in the range of 0.01-0.02 carats per tonne.
The work carried out by the local partner in Tshikapa since beginning of the 1990s gives comfort to the project; he has successfully recovered diamonds for many years.
The feasibility of the project is currently being assessed, along with calculation exercises aiming to understand the magnitude of an investment required to get a mine commissioned based on this project.
The Longatshimo project is a similar project to Tshikapa. The potential of the project is significant, but it is less analysed and worked through than its sister project Tshikapa.
Clarifying Tshikapa's potential is, consequently a key priority. Furthermore, a small scale dredging operation on the Longatshimo license, similar to the one operated by the local partner in Tshikapa, is being considered.
Cash and cash equivalents at the end of the third quarter 2012 amounted to SEK 81.5 million, compared to SEK 18.0 million at the end of third quarter 2011. Total equity amounted to SEK 346.5 million (SEK 268.3 million on 30 September 2011) at the end of the reporting period, representing an equity ratio of 82 per cent (76 per cent at the end of third quarter the previous year).
The Company's interest bearing long term debt is limited to SEK 5.0 million, which is a
convertible loan granted by Norrlandsfonden for the development of Rönnbäcken (interest bearing long term debt was SEK 5 million at the end of third quarter 2011).
IGE considers the financial position, cost structure and flexibility to be satisfactory. Until the permitting issue related to the sami appeal process in Rönnbäcken is resolved, the level of activity will remain relatively low. The Company is awaiting the renewed decision by the Swedish Government. It is impossible to predict when such a decision will come, but IGE expects a decision no later than the beginning of 2013.
not cost much at present to uphold. The current strategy implies finding appropriate alternatives to get these projects developed as soon as possible, alternatively to sell/relinquish them.
The Parent Company's business activity is to manage the Group's operations. The result before tax during the third quarter of 2012 amounted to SEK -2.9 million (-1.3). Cash and cash equivalents amounted to SEK 80.2 million (14.1). Investments in the Parent Company during the reporting period amounted to SEK 0 million (0).
In addition to the low level of activities related to Rönnbäcken, the Group's concessions do
The shares of IGE Resources AB (publ.) are listed on the Oslo Stock Exchange, ticker symbol IGE. This Interim report has not been subject to review by the Company's auditors.
Stockholm, 15th of November 2012
Thomas Carlsson CFO and acting CEO IGE Resources AB (publ)
| (TSEK) | Note | Q3 2012 | Q3 2011 | Jan-Sept 2012 |
Jan-Sept 2011 |
2011 |
|---|---|---|---|---|---|---|
| Revenue from sales | 6 | - | - | - | 5,848 | 5,848 |
| Work performed by the entity and capitalized | - | - | - | 356 | 629 | |
| Other external expenses | 13 | -1,702 | -6,123 | -10,819 | -38,760 | -43,176 |
| Personnel expenses | -2,455 | -1,955 | -7,175 | -21,220 | -25,559 | |
| Results from equity accounted participations | 7 | -696 | -54 | -772 | -166 | -273 |
| Operating result before depreciation and | ||||||
| impairment losses | -4,853 | -8,132 | -18,766 | -53,942 | -62,531 | |
| Depreciation/amortization and impairment loss on | ||||||
| property, plant and equipment, intangible assets | 3 | -167 | -383 | -1,878 | -168,544 | -168,850 |
| Financial revenue | 4 | 247 | 297 | 471 | 800 | 900 |
| Financial expenses | 4 | -23 | -3,865 | -220 | -5,174 | -5,094 |
| Total financial items | 224 | -3,568 | 251 | -4,374 | -4,194 | |
| Result before tax | -4,796 | -12,083 | -20,353 | -226,860 | -235,575 | |
| Income tax | 9 | - | - | - | 49,631 | 49,631 |
| Result for the period | -4,796 | -12,083 | -20,353 | -177,229 | -185,944 | |
| Result for the period attributable to: Equity holders of the Parent Company |
-4,618 | -11,625 | -19,857 | -172,710 | -181,197 | |
| Non controlling interest | -178 | -458 | -536 | -4,519 | -4,747 | |
| Result for the period | -4,796 | -12,083 | -20,393 | -177,229 | -185,944 | |
| Result per share before and after dilution Average number of shares (Millions) |
-0.04 127 |
-0.004 2,210 |
-0.16 127 |
-0.06 2,210 |
-0.06 2,868 |
|
| Jan-Sept | Jan-Sept | ||||
|---|---|---|---|---|---|
| TSEK | Q3 2012 | Q3 2011 | 2012 | 2011 | 2011 |
| Result for the period | -4,796 | -12,083 | -20,393 | -177,229 | -185,944 |
| Other comprehensive income | |||||
| Exchange differences during the period | -1,108 | 317 | -942 | -437 | 10,315 |
| Total other comprehensive income | -5,904 | -11,766 | -21,335 | -177,666 | -175,629 |
| Total comprehensive income for the period attributable to: | |||||
| Equity holders of the Parent Company | -5,276 | -11,308 | -20,799 | -173,147 | -170,882 |
| Non controlling interest | -178 | -458 | -536 | -4,519 | -4,747 |
| (TSEK) Note |
30/09/2012 | 30/09/2011 | 31/12/2011 | |
|---|---|---|---|---|
| ASSETS | ||||
| Fixed assets | ||||
| Intangible fixed assets | ||||
| Mineral interests | 336,594 | 325,695 | 326,991 | |
| Tangible fixed assets | ||||
| Plant and machinery | 769 | 1,662 | 1,335 | |
| Long-term financial assets | ||||
| Participation in equity accounted companies | 662 | 1,175 | 1,433 | |
| Long-term receivables | 31 | 30 | 31 | |
| Total fixed assets | 338,057 | 328,562 | 329,790 | |
| Current Assets | ||||
| Other receivables | 3,127 | 4,377 | 4,433 | |
| Prepaid expenses | 957 | 588 | 452 | |
| Cash and cash equivalents | 81,484 | 18,045 | 10,977 | |
| Total current assets | 85,568 | 23,010 | 15,862 | |
| TOTAL ASSETS | 423,624 | 351,572 | 345,652 | |
| EQUITY | 14 | |||
| Equity attributable to equity holders of the parent company | ||||
| Share capital | 45,437 | 207,713 | 12,982 | |
| Other paid in capital | 1,176,004 | 912,313 | 1,107,044 | |
| Reserves | 8,632 | 3,699 | 9,574 | |
| Retained earnings and profit for the period | -868,319 | -839,190 | -848,462 | |
| 361,754 | 284,535 | 281,138 | ||
| Non controlling interest | -16,263 | -16,284 | -15,727 | |
| Total equity | 345,491 | 268,251 | 265,411 | |
| Liabilities | ||||
| Deferred tax liabilities | 10 | 63,119 | 63,119 | 63,119 |
| Other provisions | 10 | 1,017 | 1,979 | 2,996 |
| Long term liabilities | ||||
| Convertible loan | 11 | 5,000 | 5,000 | 5,000 |
| Other long term liabilities | 12 | 1,203 | 1,376 | 1,276 |
| Total long term liabilities | 70,339 | 71,474 | 72,391 | |
| Current liabilities | ||||
| Accounts payable | 4,920 | 3,819 | 3,984 | |
| Other liabilities | 179 | 418 | 352 | |
| Accrued expenses and prepaid income | 2,695 | 7,610 | 3,514 | |
| Total current liabilities | 7,794 | 11,847 | 7,850 | |
| TOTAL EQUITY AND LIABILITIES | 423,624 | 351,572 | 345,652 | |
| Pledged assets | 15 | 9,750 | 8,173 | 8,431 |
| (TSEK) | Equity related to the shareholders of the parent company | ||||||
|---|---|---|---|---|---|---|---|
| Share capital |
Other paid in capital |
Exchange differences |
Retained earnings and profit for the year |
Total | Non controlling interest |
Total Equity |
|
| Balance at 1 January 2011 | 90,281 | 984,120 | -741 | -666,480 | 407,180 | -11,765 | 395,415 |
| Net result for the period | -172,710 | -172,710 | -4,519 | -177,229 | |||
| Other comprehensive income: | |||||||
| Exchange differences | 4,440 | 4,440 | 4,440 | ||||
| Transactions with shareholders: | |||||||
| Costs referable to fundraising | -9,498 | -9,498 | -9,498 | ||||
| New share issue Reallocation of equity from share premium reserve to |
55,123 | 55,123 | 55,123 | ||||
| share capital | 62,309 | -62,309 | 0 | 0 | |||
| Closing balance at 30 September 2011 | 207,713 | 912,313 | 3,699 | -839,190 | 284,535 | -16,284 | 268,251 |
| Balance at 1 October 2011 | 207,713 | 912,313 | 3,699 | -839,190 | 284,535 | -16,284 | 268,251 |
| Net result for the period | -8,998 | -8,998 | 283 | -8,715 | |||
| Bonus issue | 46,736 | -46,736 | 0 | 0 | |||
| Reduction of share capital without redemption of shares | -241,467 | 241,467 | 0 | 0 | |||
| Other comprehensive income: | |||||||
| Exchange differences | 5,875 | 5,875 | 5,875 | ||||
| Transactions with shareholders: Change of accounting principle related to reporting of non controlling interest |
-274 | -274 | 274 | 0 | |||
| Closing balance at 31 December 2011 | 12,982 | 1,107,044 | 9,574 | -848,462 | 281,138 | -15,727 | 265,411 |
| Balance at 1 January 2012 | 12,982 | 1,107,044 | 9,574 | -848,462 | 281,138 | -15,727 | 265,411 |
| Net result for the period Reallocation of paid premium related to warrants issued by the company |
-510 | -19,857 | -18,840 -510 |
-536 | -20,393 -510 |
||
| Other comprehensive income: | |||||||
| Exchange differences | -942 | -942 | -942 | ||||
| Transactions with shareholders: | |||||||
| New share issue | 32,455 | 82,003 | 114,458 | 114,458 | |||
| Costs referable to fundraising | -12,533 | -12,533 | -12,533 | ||||
| Closing balance at 30 September 2012 | 45,437 | 1,176,004 | 8,632 | -868,319 | 361,754 | -16,263 | 345,491 |
The total number of outstanding shares amounts to 181,749,225 as per September 30th 2012.
| (TSEK) | Jan-Sept 2012 | Jan-Sept 2011 | Jan-Dec 2011 |
|---|---|---|---|
| Cash flow from operations | |||
| Result after financial items | -20,393 | -226,859 | -235,575 |
| Adjustments for non cash items* | -1,412 | 177,740 | 191,106 |
| Income tax paid | - | - | - |
| Total cash flow from operations before change in working | |||
| capital | -21,806 | -49,119 | -44,469 |
| Change in working capital | |||
| Increase/decrease in inventories | - | 1,356 | 1,375 |
| Increase/decrease receivables | 803 | 5,511 | 11,448 |
| Increase/decrease in short term liabilities | -129 | -1,666 | -17,914 |
| Total cash flow from operations | -21,132 | -43,918 | -49,560 |
| Cash flow used for investments | |||
| Sale of associated company | - | 500 | 500 |
| Purchase of intangible assets | -11,887 | -14,972 | -21,580 |
| Sale of intangible assets | 2,072 | 500 | 500 |
| Purchase of tangible assets | 39 | -5,211 | - |
| Total cash flow used for investments | -9,776 | -19,183 | -20,580 |
| Financial activities | |||
| New share issue net of transaction costs | 101,925 | 45,625 | 45,625 |
| Transfer of paid premium related to warrants issue by the | |||
| company | -510 | 1,396 | - |
| Raised credits | - | - | 1,276 |
| Amortization of debt | - | -5,976 | -5,956 |
| Total cash flow from financial activities | 101,415 | 41,045 | 40,945 |
| Change in cash and bank | 70,507 | -22,056 | -29,195 |
| Cash and bank at 1 January | 10,977 | 40,157 | 40,157 |
| Currency exchange difference | - | -55 | 15 |
| Cash and bank at the end of reporting period | 81,484 | 18,046 | 10,977 |
| *Adjustments for non cash items | |||
| Depreciations and impairment losses on intangible assets | - | 143,658 | 148,565 |
| Depreciations and impairment losses of tangible assets | 527 | 24,929 | 20,327 |
| Exchange loss | -943 | 4,504 | 16,805 |
| Capital gain | - | - | -366 |
| Capital loss | 212 | - | - |
| Writedown of long term financial asset | - | 4,433 | 4,433 |
| Share of loss on equity accounted companies | 771 | - | 231 |
| Dissolution of provision related to mine site rehabilitation | -1,979 | - | 1,112 |
| Others | - | 216 | 0 |
| Total | -1,412 | 177,740 | 191,106 |
| Jan-Sept | Jan-Sept | |||||
|---|---|---|---|---|---|---|
| (TSEK) | Note | Q3 2012 | Q3 2011 | 2012 | 2011 | 2011 |
| Other operating income | - | - | - | - | - | |
| Other external expenses | 13 | -1,729 | -2,012 | -5,019 | -12,942 | -15,879 |
| Personnel expenses | -1,436 | 397 | -3,801 | -5,700 | -6,527 | |
| Depreciation/amortization tangible assets | 3 | 0 | -7 | -10 | -30 | -38 |
| Operating result | -3,165 | -1,622 | -8,830 | -18,672 | -22,444 | |
| Result from financial items | ||||||
| Result from participations in group | ||||||
| companies | - | - | - | -104,000 | -104,000 | |
| Financial revenue | 244 | 311 | 466 | 380 | 470 | |
| Financial expenses | -20 | -37 | -111 | -1,043 | -1,047 | |
| Total financial items | 224 | 274 | 355 | -104,663 | -104,577 | |
| Result before tax | -2,941 | -1,348 | -8,475 | -123,335 | -127,021 | |
| Income tax | 9 | 0 | 0 | 0 | 0 | 0 |
| Result for the period | -2,941 | -1,348 | -8,475 | -123,335 | -127,021 |
| TSEK | Q3 2012 | Q3 2011 | Jan-Sept 2012 |
Jan-Sept 2011 |
2011 |
|---|---|---|---|---|---|
| Result for the period | -2,941 | -1,348 | -8,475 | -123,335 | -127,021 |
| Other comprehensive income | - | - | - | - | - |
| Total other comprehensive income | -2,941 | -1,348 | -8,475 | -123,335 | -127,021 |
| (TSEK) | Note | 30/09/2012 | 30/09/2011 | 31/12/2011 |
|---|---|---|---|---|
| ASSETS | ||||
| Tangible fixed assets | ||||
| Plant and machinery | - | 18 | 10 | |
| Long-term financial assets | ||||
| Shares in subsidiaries | 102,635 | 100,635 | 102,635 | |
| Receivables from subsidiaries | 263,215 | 241,051 | 241,357 | |
| Total fixed assets | 365,850 | 341,704 | 344,002 | |
| Current Assets | ||||
| Other receivables | 239 | 162 | 149 | |
| Prepaid expenses | 622 | 309 | 203 | |
| Cash and cash equivalents | 80,255 | 14,114 | 9,315 | |
| Total current assets | 81,116 | 14,585 | 9,667 | |
| TOTAL ASSETS | 446,966 | 356,289 | 353,669 | |
| SHAREHOLDERS EQUITY | 14 | |||
| Restricted equity | ||||
| Share capital | 45,437 | 207,713 | 12,982 | |
| Statutory reserve | 2,300 | 49,036 | 243,767 | |
| Total restricted equity | 47,737 | 256,749 | 256,749 | |
| Non restricted equity | ||||
| Share premium reserve | 1,149,839 | 839,412 | 839,412 | |
| Retained earnings | -749,536 | -622,515 | -622,515 | |
| Result for the period | -8,475 | -123,335 | -127,021 | |
| Total non restricted equity | 391,828 | 93,562 | 89,876 | |
| Total shareholders equity | 439,565 | 350,311 | 346,625 | |
| Long term liabilities | ||||
| Convertible loan | 5,000 | 5,000 | 5,000 | |
| Total long term liabilities | 11 | 5,000 | 5,000 | 5,000 |
| Current liabilities | ||||
| Accounts payable | 981 | - | 100 | |
| Interest bearing loans and borrowings | - | 107 | 47 | |
| Other liabilities | 44 | - | - | |
| Accrued expenses | 1,376 | 871 | 1,897 | |
| Total current liabilities | 2,401 | 978 | 2,044 | |
| TOTAL SHAREHOLDERS EQUITY AND LIABILITIES | 446,966 | 356,289 | 353,669 |
| (TSEK) | Restricted Equity | Non restricted Equity | ||||
|---|---|---|---|---|---|---|
| 2011 | Share capital |
Statutory reserve |
Share premium reserves |
Retained earnings |
Result for the period |
Total Equity |
| Balance at 1 January 2011 | 90,281 | 111,345 | 848,910 | -119,047 | -503,468 | 428,021 |
| Result for the period | -123,335 | -123,335 | ||||
| Transactions with shareholders: | ||||||
| Costs referable to fundraising | -9,498 | -9,498 | ||||
| New share issue | 55,123 | 55,123 | ||||
| Reallocation of equity from share premium reserve to share capital | 62,309 | -62,309 | 0 | |||
| Closing balance at 30 September 2011 | 207,713 | 49,036 | 839,412 | -119,047 | -626,803 | 350,311 |
| Balance at 1 October 2011 | 207,713 | 49,036 | 839,412 | -119,047 | -626,803 | 350,311 |
| Transfer of prior year's net result | -503,468 | 503,468 | 0 | |||
| Result for the period | -3,686 | -3,686 | ||||
| Bonus issue | 46,736 | -46,736 | 0 | |||
| Reduction of share capital without redemption of shares | -241,467 | 241,467 | 0 | |||
| Closing balance at 31 December 2011 | 12,982 | 243,767 | 839,412 | -622,515 | -127,021 | 346,625 |
| Balance at 1 January 2012 | 12,982 | 243,767 | 839,412 | -622,515 | -127,021 | 346,625 |
| Transfer of prior year's net result | -127,021 | 127,021 | 0 | |||
| Result for the period | -8,475 | -8,475 | ||||
| Reallocation of paid premium related to warrants issued by the company | -510 | -510 | ||||
| Reallocation of restricted equity to non restricted equity | -241,467 | 241,467 | 0 | |||
| Transactions with shareholders: | ||||||
| New share issue | 82,003 | 114,458 | ||||
| Costs referable to fundraising | -12,533 | -12,533 | ||||
| Closing balance at 30 September 2012 | 45,437 | 2,300 | 1,149,839 | -749,536 | -8,475 | 439,565 |
A reduction of restricted Equity, decided on the EGM held on the 22nd of November 2011 was registered by the Swedish Companies registration office and thereby came in to force, in February 2012. As a consequence of the reallocation, the share premium reserve increased with SEK 241.5 million during the first nine months of 2012.
| 30/09/2012 | 30/09/2011 | 2011 | 2010 | 2009 | ||
|---|---|---|---|---|---|---|
| Number of outstanding shares at beginning of reporting period | Number | 51,928,350 | 1,805,618,810 | 1,805,618,810 | 795,709,953 | 418,161,828 |
| New share issue | Number | 129,820,875 | 2,348,649,150 | 2,348,649,150 | 1,009,908,857 | 377,548,125 |
| Number of outstanding shares at the end of reporting period* | Number | 181,749,225 | 4,154,267,960 | 51,928,350 | 1,805,618,810 | 795,709,953 |
| Average number of shares | Number | 127,062,776 | 2,867,691,771 | 2,930,566,085 | 1,346,291,141 | 538,509,297 |
| Operating result | TSEK | -18,766 | -53,942 | -62,531 | -149,987 | -39,190 |
| Result after tax | TSEK | -20,393 | -177,229 | -185,944 | -477,330 | -44,858 |
| Operating result per share | SEK | -0.36 | -0.02 | -0.02 | -0.11 | -0.07 |
| Result after financial items per share | SEK | -0.39 | -0.08 | -0.08 | -0.41 | -0.08 |
| Result per share after tax | SEK | -0.39 | -0.06 | -0.06 | -0.35 | -0.08 |
| Shareholders equity per share before dilution* | SEK | 1.90 | 0.06 | 21.57 | 0.22 | 0.37 |
| Dividend | TSEK | - | - | - | - | - |
| Price per share at the end of reporting period | SEK | 0.53 | 0.02 | 1.66* | 0.23 | 0.58 |
* A reversed split of 1:80 was executed on the 7th of December 2011
In calculating income and cash flow per share the average number of shares during the reporting period has been used, whereas in calculating shareholders' equity the number of outstanding shares has been used.
IGE possesses none of its own shares at the end of the reporting period.
Further information regarding key ratio definitions can be obtained from the annual report for the financial year 2011.
Total number of shares amounts to 181,749,225 as per September 30 th 2012.
This interim report has been prepared according to Annual Accounts Act and IAS 34 Interim Reporting. The interim report has also been prepared in accordance with the rules in the Swedish Financial Accounting Standard RFR2.
The Interim report does not contain all the information and disclosures available in the annual report and the interim report should be read together with the annual report for 2011.
The operations of IGE involve certain significant risks, including but not limited to credit risk, foreign exchange risk, and political risk. For a complete discussion of the aforementioned risks, refer to the Company's
2011 annual report is available on the IGE website, www.ige.se. The management of IGE does not consider that any additional risk has become current since the expiration of the previous year of operation.
Impairments during the quarter are related to a claim on a drilling contractor assigned for a drilling programme in Kenya that never was delivered. After a litigation process the contractor has now been declared in bankruptcy resulting in a need of an impairment of IGE's claim.
Impairments during the comparative periods are mainly related to the Group's withdrawal from the Angolan diamond projects.
| Financial revenue | Group | ||
|---|---|---|---|
| (TSEK) | 30/09/2012 | 30/09/2012 | 31/12/2011 |
| Interests | 424 | 178 | 269 |
| Exchange gains | 47 | 622 | 631 |
| Total financial revenue | 471 | 800 | 900 |
| Financial expenses | |||
| (TSEK) | 30/09/2012 | 30/09/2012 | 31/12/2011 |
| Interest | -3 | -48 | -52 |
| Exchange losses | -217 | -5,126 | -5,042 |
| Total financial expenses | -220 | -5,174 | -5,094 |
| Jan - September 2012 | |||||
|---|---|---|---|---|---|
| (TSEK) | Gold | Diamonds | Nickel | Other | Total |
| Revenue from sales | - | - | - | - | 0 |
| Operating result before depreciation and impairment losses | - | -4,318 | -8,663 | -5,785 | -18,766 |
| Depreciation of mineral interests | -1,352 | - | - | - | -1,352 |
| Depreciation according to plan | - | -412 | -104 | -10 | -526 |
| Result before tax | -1,352 | -3,714 | -8,664 | -5,646 | -19,376 |
| Fixed assets | - | 239,175 | 98,219 | 662 | 338,056 |
| Current assets | 67 | 3,141 | 1,243 | 81,117 | 85,568 |
| Long term liabilities | - | 1,203 | 5,000 | - | 6,203 |
| Short term liabilities | - | 76 | 5,316 | 2,402 | 7,794 |
| Investments (gross amounts) | - | - | 11,887 | - | 11,887 |
| Jan - September 2011 | |||||
| (TSEK) | Gold | Diamonds | Nickel | Other | Total |
| Other revenues | - | 5,874 | - | - | 5,874 |
| Operating result before depreciation and impairment losses | -305 | -22,894 | -11,935 | -18,808 | -53,942 |
| Depreciation of mineral interests | - | -165,530 | - | - | -165,530 |
| Depreciation according to plan | - | -2,983 | - | -31 | -3,014 |
| Result before tax | -302 | -194,914 | -12,309 | -19,335 | -226,860 |
| Fixed assets | - | 240,569 | 87,998 | 18 | 328,585 |
| Current assets | 1,265 | 6,534 | 625 | 14,586 | 23,010 |
| Long term liabilities | - | 1,376 | 5,000 | - | 6,376 |
| Short term liabilities | - | 6,254 | 4,615 | 978 | 11,847 |
| Investments (gross amounts) | - | 5,711 | 12,705 | - | 18,416 |
Revenue from sales during 2011 is related to sales of rough diamonds recovered from IGE projects.
Result from participations in group companies during the period is attributable to the Group's interest in Nordic Iron Ore and Tasman Metals.
Other operating expenses are referable to a capital loss from sales of exploration permits in Nickel Mountain Resources AB (former IGE Nordic AB)
The positive amount reported is a reversal of a provision related to deferred tax liabilities. The reversal occurs as a result of impairments of the assets that the provision is related to.
The reversals of the deferred tax reported in the comparative periods are a result of the
impairment of the Cassanguidi project that has been made historically.
The recognition of carrying amount of an asset will be recovered in the form of economic benefits that flow to the entity in future periods. When the carrying amount of the asset exceeds its tax base, the amount of taxable economic benefits will exceed the amount that will be allowed as a deduction for tax purposes. This difference is a temporary difference and the obligation to pay the resulting income taxes in future periods is a deferred tax liability. As the entity recovers the carrying amount of the asset, the taxable temporary difference will reverse and the entity will have taxable profit. This makes it probable that economic benefits will flow from the entity in the form of tax payments.
The deferred tax liabilities are calculated as the local tax rate of each project times the surplus value referable to each acquired project.
Other Provisions is constituted by an accrued cost related to the MRG option. If MRG
decides to exercise the option, a provision of SEK 1.02 million will be deducted from the price to be paid for the shares. If they waive their right to exercise the option, the above provision will be set to zero and removed from the balance sheet of Nickel Mountain Resources.
Other provisions have historically included even a provision for mine site rehabilitation related to the former mining operations in Angola. As a consequence of the Group's withdrawal from the projects and loss of its rights to these licenses the provision has been dissolved during the quarter improving the Group result with SEK 2.0 million.
In June 2010, IGE issued a convertible loan that provided the Company with an amount of totally SEK 5 million to Norrlandsfonden. The convertible loan was issued based on the following conditions:
If fully converted the convertible loan will result in an additional 89,286 shares will be issued (a dilution of about 0.05% based on 181,749,225 shares outstanding).
Other long term liabilities are referable to outstanding accounts with the statutory Black Economic Empowerment partner for Bakerville, Tranter. Tranter initially owed IGE about SEK 8 million. At present SEK 1.3 of this amount has been paid. The amount reported in the Balance Sheet of IGE has been entered as duty of care. If the BEE partner fails to fulfil its obligations according to the contract, and thereby fails to pay the remaining SEK 6.7 million, IGE could
end up in a situation where Tranter claim their first part payment refunded.
The Extra General Meeting held on the 22nd of November 2011 decided to execute a reverse split of the company's shares at a ratio of 1:80. The first day of trading with the new number of shares was the 8th of December 2011. As a result of the reversed split the number of shares at the time was reduced from 4,154,267,960 to 51,928,350.
Nickel Mountain Resources AB entered into an agreement with Mitchell River Group Pty Ltd. ("MRG") of Australia to form a strategic partnership with MRG of Australia. Pursuant to the MRG Agreement, MRG agreed to provide experienced personnel, systems and technical resources for the development of the Rönnbäcken Nickel Project for a term of 18 months, commencing June 2010. MRG will absorb the majority of its own costs, thereby accepting project risk and having an incentive to build value in the project. As a result of the agreement, MRG was entitled to accrue costs incurred during the term of the MRG Agreement and offset such costs against the cash payment. Such costs not paid by NMR would accrue as a loan to the Company to a maximum amount of USD 500,000 to be offset against the cash payment to exercise the option. If MRG waives their right to exercise the option, the above accrued expenses/loan will be set to zero and removed from the balance sheet of Nickel Mountain Resources.
To secure this loan, NMR agreed to grant MRG a fixed and floating charge of 10% over the mineral licences related to Rönnbäcken held by its subsidiary Nickel Mountain AB. This agreement has not yet resulted in a formal pledge.
As part of the above agreement, MRG has secured an option with a 24 month duration, which was vested on the 2nd of December 2011, for 10 per cent of the Rönnbäcken project in exchange for a USD 3 million cash payment.
IGE Resources subsidiary Nickel Mountain Resources has during the period received claims from Paul Sagberg, former Board member of Nickel Mountain Resources AB. The claim in question corresponds to approximately SEK 200 thousand. As ground for its claim, Paul Sagberg cites that he is entitled to a Board fee for his directorship in the company during the period July 2011 to May 2012. The company is of the opinion that the consultancy agreement with Environmental Consultant Paul Sagberg (see note 14 above), corresponding to a consideration of NOK 540 thousand in total, replaced Sagberg's right to Board remuneration. Nickel Mountain Resources has contested the claim and notified Paul Sagberg that the claim is unfounded. The claim presented consequently does not give rise to any reservation on the part of IGE Group. The claim is not subject to legal review at the present situation.
Kungsgatan 44 SE-111 35 Stockholm Sweden Telephone +46 8 402 28 00 Org. Reg. No 556227-8043
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.