Earnings Release • Aug 22, 2012
Earnings Release
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| SEK million | Q4 2011 | 2011 | Q4 2010 | 2010 |
|---|---|---|---|---|
| Sales | - | 5.8 | 4.3 | 20.9 |
| Other income | - | - | 0.1 | 0.2 |
| Total revenues | - | 5.8 | 4.4 | 21.1 |
| EBITDA | -8.6 | -62.5 | -87.9 | -150.0 |
| Impairment losses and depreciation | -0.3 | -168.9 | -356.6 | -401.8 |
| Net result attributable to shareholders of parent company |
-8.5 | -181.2 | -369.5 | -465.6 |
| Investments in period | 2.1 | 21.6 | 17.7 | 630.0 |
| Cash at end of period | 11.0 | 11.0 | 40.2 | 40.2 |
| Interest bearing long term debt at end of period | 6.3 | 6.3 | 5.3 | 5.3 |
The fourth quarter was marked by continued minimal development of the Rönnbäcken Nickel Project and the commissioning of the Bakerville Alluvial Diamond mine in combination with additional cost reduction measures.
The negative cash flow has been significantly reduced throughout the group; compared to the fourth quarter last year, the negative cash flow was reduced almost 90 per cent last quarter.
IGE Resources had no sales during the fourth quarter of 2011. Sales in the same quarter last year amounted to SEK 4.3, entirely attributable to diamond sales from the Cassanguidi, Angola mine
EBITDA for the fourth quarter amounted to SEK -8.6 million, compared to SEK -87.9 million for the same period in 2010.
Operating expenses in the fourth quarter were reduced from SEK 92.3 million in the fourth quarter of last year to SEK 8.6 million for 2011, a reduction of more than 90 per cent. A large part of the cost reductions were related to overheads and organization and have been executed during the fourth quarter. The main part of the benefits are shown in the results for Q4 2011, the full effect will appear during end of Q1 2012.
For the full year, accumulated sales were SEK 6.0 million, against SEK 16.7 million last year. EBITDA for the full year was -62.5 million against SEK -150.0 million last year.
Cash flow during the fourth quarter amounted to SEK -7.1 million (SEK 57.5 in the fourth quarter last year).
Cash and cash equivalents at the end of the fourth quarter was SEK 11.0 million.
A reverse split of IGE's outstanding shares as conducted in December, following an EGM resolution in November. The new number of outstanding shares in the Company amounts to 51.9 million.
The EGM also mandated the Board of Directors to issue 150 million new IGE shares in a contemplated equity offering directed towards existing shareholders. The new equity will provide financing of the Rönnbäcken Prefeasibility Study (PFS).
IGE Resources' total assets per the 31st of December 2011 amounted to SEK 345.7 million, compared to SEK 478.9 million at the end of 2010.
Net investments during the fourth quarter amounted to SEK 2.1 million (SEK 17.7 million in fourth quarter last year). The investments made during the fourth quarter and the entire 2011 were mainly related to the advancement of the Rönnbäcken nickel project.
The completion of an updated Preliminary Economic Assessment established significant value growth for the Rönnbäcken Nickel project. The updated Preliminary Economic Assessment incorporated the production of high-grade magnetite iron concentrate byproduct from nickel flotation tailings. In addition, an increase in tonnage and the upgrade of the Sundsberget resource to an Indicated category placed the majority of the Rönnbäcken project's resources in the Measured and Indicated category.
Following a review of available geological data from the Rönnbäcken Nickel Project, SRK Consulting (Sweden) AB of Skellefteå, Sweden (SRK) updated the Mineral Resource Statement of the project's deposits in October 2011. The Mineral Resource of the Sundsberget deposit was upgraded from the Inferred to the Indicated category. In addition, the resource estimate for the Sundsberget deposit was increased by 111 million tonnes (Mt) to 296.9 Mt with an average total nickel content of 0.170% of which 0.088% is nickel in sulphide (Ni-AC). The ensuing Mineral
Resource for the Project as a whole included a total of Measured and Indicated Mineral Resources of 573.9 Mt with an average total nickel content of 0.174% of which 0.097% is nickel in sulphide (Ni-AC) and 5.66% iron (Fe); and Inferred Mineral Resources of 93.2 Mt with an average total nickel content of 0.177% of which 0.103% is nickel in sulphide (Ni-AC) and 5.55% Fe. With the Sundsberget resource upgrade, Measured and Indicated resources accounted for 86% of the resource estimate for the Project.
Nickel Mountain Resources engaged SRK to update the economic analysis presented in the Preliminary Economic Assessment (PEA) dated April 2011 to include production of a magnetite concentrate along with the updated Minerals Resources Statement.
Metallurgical test-work by Outotec in collaboration with the Geological Survey of Finland achieved a magnetite concentrate grade of 66.4% iron with a recovery of 90%. The test-work aimed at the recovery of magnetite from the Rönnbäcken nickel flotation tailings, was performed on tailings samples from mini-pilot plant test-work in March 2010, and demonstrated that a high grade concentrate can be produced using low intensity magnetic separation and concentrate regrinding.
In the Preliminary Economic Assessment (PEA) dated December 2011, SRK confirmed the positive economics of recovering a magnetite concentrate from the tailings of nickel sulphide concentrate production. Approximately 1.6 million tonnes per annum of magnetite iron concentrate are planned to be produced for the life-of mine (LOM).The impact of the magnetite iron concentrate by-product revenues, is to reduce the Project's C1 cash cost from US\$5.55/lb (US\$12,236/tonne) to US\$3.55/lb (US\$7,826/tonne) of payable nickel net of by-product credits (mainly from the magnetite iron concentrate and cobalt).
Pre-tax NPV ranges from US\$1,045 million to US\$2,301 million between nickel prices of US\$9.00/lb (US\$19,800/tonne) to US\$12.00/lb (US\$26,500/tonne), generating an Internal Rate of Return (IRR) and cash flow ranges from 19.9% to 31.6% and from US\$3,467 million to US\$6,264 million, respectively.
The estimated start-up capital cost for the Project is US\$1,260 million, including working capital, of which \$87 million is for the magnetite concentrate circuit.
The updated Preliminary Economic Assessment has been posted on Nickel Mountain Resources' website (www.nickelmountain.se). Further test-work is planned during the Prefeasibility Study (PFS) to optimize the process flow sheet, to improve the metallurgical performance, and to further reduce the net operating costs. Specific areas requiring further study with regard to the magnetite concentrate include dewatering; optimization of the particle size (currently less than 20 micron) from a handling and transportation point of view; and further reduction of impurities, in particular chrome which will be evaluated as to the potential for producing a chrome by-product. The need for a pelletizing facility will be part of the evaluation and could further add to operating and capital expenditures. Further market research is also planned to be undertaken.
Nickel Mountain Resources submitted to the Mining Inspectorate of Sweden its application for Exploitation Concession for the Sundsberget deposit at the Rönnbäcken Nickel Project. The application for Exploitation Concession for the Sundsberget deposit, named Rönnbäcken K nr 3, including Environmental Impact Assessment was submitted on December 23, 2011; the application review process is estimated to take four to nine months. An Exploitation Concession is granted if there is a probability for economic exploitation of the deposit and if the site is considered appropriate from an environmental point of view, and it grants the right to carry out mineral exploitation for a 25 year period. In June 2010, the Swedish Chief Mining Inspector granted Exploitation Concessions Rönnbäcken K nr 1 and K nr 2, covering the Vinberget and Rönnbäcknäset deposits.
A further update of the resource estimate incorporated results from drilling of the down dip extension of the Rönnbäcknäset deposit, raising the amount of resources in the Measured and Indicated categories to 97%.
In the Preliminary Economic Assessment produced in April 2010, SRK Consulting (Sweden) AB (SRK) noted that the Rönnbäcknäset deposit was open down dip of existing drill data. Pit optimization studies undertaken by SRK, at the time, identified the potential to add to resources from this direction. The Company therefore drilled six drill holes according to a plan recommended by SRK, five of which were drilled on the down dip extension of the Rönnbäcknäset South mineralisation. This extension drilling was completed in March 2011. Assaying of these results was carried out in the latter part of 2011. Positive results from the five down dip drill holes confirmed the continuation of the mineralization in the down dip extension which remains open at depth
Based on these assay results, SRK prepared a Mineral Resource Statement which resulted in a conversion of 86.5 Mt from the Inferred to the Indicated category. Further, an additional 8 Mt of Indicated plus 12 Mt of Inferred were defined at Rönnbäcknäset as a result of this drilling campaign. The entire Mineral Resource for the Project as a whole now includes a total of 668.3 Mt in the Measured and Indicated categories, with an average total nickel content of 0.176% of which 0.099% is nickel in sulphide (Ni-AC); and Inferred Mineral Resources of 19.0 Mt with an average total nickel content of 0.172% of which 0.104% is nickel in sulphide (Ni-AC).
The entire Mineral Resource for the Project as a whole now includes a total of 668.3 Mt in the Measured and Indicated categories containing 1,174,000 tonnes of total nickel, of which 657,000 tonnes of nickel is in sulphide (Ni-AC), and account for 97% of Mineral Resources. This is an important milestone for the Company which plans to convert these Mineral Resources to Reserves, as part of the forthcoming Prefeasibility Study (PFS).
At the beginning of February, Nickel Mountain Resources sold its remaining interest in the Solvik Gold Project to Agnico-Eagle Sweden AB for a cash payment of USD 300,000.
In line with IGE's cost cutting programme the IGE Diamond's office in Johannesburg was closed down at the end of the quarter. The remaining members of IGE's diamond team will from January 2012 contribute on a consultancy basis as and when required.
At the Bakerville diamond mine in South Africa the mining contractor, Frontier Mining Projects, progressed satisfactorily with start-up preparations following the agreement signed in Q3 2011. During plant equipment trials in November, recovery tailings from the surface deposits bulk sampling conducted in 2008/9 were re-processed.
Commissioning of the initial plant was completed ahead of schedule in December. The 120 tons per hour processing capacity now installed at Bakerville is primarily focussed on processing material from the potholes (vertical geological structures) found on the Bakerville license through scrubbing, preconcentration pans, dense medium separation (DMS) and X-ray sorting.
During late December, 32.5 carats valued at an average of \$355/carat were recovered from the upper layers of the initial pothole target ahead of the Christmas operational shutdown. This included an attractive gemstone quality diamond of 4.4 carats valued at \$1,700/carat. The upper 3 meter layers mined thus far and excavations to date indicate the pothole extends further than previously established by the drilling program. Initial activity has been focussed on the early months of production in 2012
In the next phase, further processing plants totalling 250,000 tons per month in capacity will be erected to treat surface deposits at an expected grade of three carats per hundred tons with one plant remaining dedicated to pothole processing (which have a potential for significantly higher grades) based on results from the first phase. with full capacity expected in April 2013 At this treatment rate, revenue projections from the surface deposits alone stand at USD 3.75 million per month at a current average diamond price of USD 500 per carat.
No significant work or activity was undertaken on the Harts River project.
An option for IGE to purchase the 19 per cent shareholdings in Bakerville and Harts River, bringing IGE's ownership in these two projects to 74 per cent, has been extended until end of September 2012. The option enables IGE to buy these Bakerville and Harts Rivers shares for a total consideration of USD 2.5 million. DRC
Both the Longatshimo and Tshikapa concessions have continued on care and maintenance during the quarter, pending availability of development capital.
A sale agreement for the Longatshimo project to Jindal DRC, a subsidiary of Indian multinational conglomerate Jindal Steel and Power Ltd, was signed in August 2011. In accordance with the agreement, all on-site
equipment was inspected and re-enabled and the cession of control of the project negotiated with the local partners. Jindal DRC fulfilled the first part of the contract by initially paying a non refundable deposit of USD 100 thousand. After failing to perform in accordance with the remaining payment schedule stipulated in the contract, Jindal was served with notice of breach of contract at the end of Q4.
At Bakerville, excavation and processing of an additional pothole has also yielded diamondiferous material in the upper layers. Both potholes are now at a depth of approximately 10m (of the 45m depths indicated by drill holes) but are still in the upper layers which contain significant dilution by sand and clay lenses within the ore body. As a consequence, grades have fluctuated significantly during January.
Production for the month ending 31st January 2012:
No Bakerville diamond parcels have been sold pending processing of sufficient material to establish representative grades and optimise diamond valuations.
Jindal DRC failed to remedy the default situation under the agreement for the sale of the Longatshimo project and IGE has terminated the purchase agreement. IGE will now resume discussions with alternative parties who have expressed interest in the project area alongside Tshikapa which have undergone an extensive bulk sampling exercises to verify indicated and inferred resources of over 3.5m carats on each project.
In 2011, IGE Kenya Ltd focused on realizing value from its Kenyan portfolio without investing further in the country.
the part of Special License 91 covering the project to Kilimapesa Gold (Pty) Ltd.
Cash and cash equivalents at the end of 2011 amounted to SEK 11.0 million, compared to SEK 40.2 million at the end of 2010. Total equity amounted to SEK 265.4 million (SEK 395.4 million 31st of December 2010) at the end of the reporting period, representing an equity ratio of 77 per cent (73 per cent at the end of previous year).
The Company's interest bearing long term debt is limited to SEK 6.3 million at end of the reporting period, of which SEK 5 million is a convertible loan granted by Norrlandsfonden for the development of Rönnbäcken (interest bearing long term was SEK 5.3 million at the end of 2010).
The situation of the Group has continued to improve during the latest quarter. The reduction of the negative cash flow has continued during the latest quarter and management feels that the financial situation of the Group is under control.
The main priorities for IGE are now to secure adequate financing for the completion of the Rönnbäcken Prefeasibility Study. Based on the recent improvements in the project's value, IGE feels confident that the funding of the completion of the PFS will be solved in a beneficial way for the shareholders. The financing of the Rönnbäcken PFS will be announced as soon as the Board has made a decision.
The Parent Company's business activity is to manage the Group's operations. The result before tax during the fourth quarter of 2011 amounted to SEK -3.7 million (-491.4). Cash and cash equivalents amounted to SEK 9.3 million (32.4). Investments in the Parent Company during the reporting period amounted to SEK 0 million (0).
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, 16th of February 2012
Thomas Carlsson CFO and acting CEO IGE Resources AB (publ)
| (TSEK) | Note | Q4 2011 | Q4 2010 | 2011 | 2010 |
|---|---|---|---|---|---|
| Revenue from sales | 6 | - | 4,229 | 5,848 | 20,909 |
| Other operating income | - | 143 | - | 143 | |
| Work performed by the entity and capitalized | 273 | 4,850 | 629 | 18,331 | |
| Other external expenses | -4,416 | -16,194 | -43,176 | -61,644 | |
| Personnel expenses | -4,339 | -20,304 | -25,559 | -61,841 | |
| Results from equity accounted participations | 7 | -107 | -15,564 | -273 | -15,887 |
| Other operating expenses | 8 | - | -45,075 | - | -49,998 |
| Operating result before depreciation and | |||||
| impairment losses | -8,589 | -87,915 | -62,531 | -149,987 | |
| Depreciation/amortization and impairment loss on | |||||
| property, plant and equipment, intangible assets | 3 | -306 | -356,567 | -168,850 | -401,753 |
| Financial revenue | 5 | 100 | 159 | 900 | 3,255 |
| Financial expenses | 5 | 80 | -755 | -5,094 | -4,741 |
| Total financial items | 180 | -596 | -4,194 | -1,486 | |
| Result before tax | -8,715 | -445,078 | -235,575 | -553,226 | |
| Income tax | 9 | 0 | 75,594 | 49,631 | 75,896 |
| Result for the period | -8,715 | -369,484 | -185,944 | -477,330 | |
| Result for the period attributable to: | |||||
| Equity holders of the Parent Company | -8,487 | -357,719 | -181,197 | -465,565 | |
| Non controlling interest | -228 | -11,765 | -4,747 | -11,765 | |
| Result for the period | -8,715 | -369,484 | -185,944 | -477,330 | |
| Result per share before and after dilution | -0.003 | -0.27 | -0.06 | -0.35 |
| TSEK | Q4 2011 | Q4 2010 | 2011 | 2010 |
|---|---|---|---|---|
| Result for the period | -8,715 | -369,484 | -185,944 | -477,330 |
| Other comprehensive income | ||||
| Exchange differences during the period | 5,874 | 18,729 | 10,315 | -9,060 |
| Total other comprehensive income | -2,841 | -350,755 | -175,629 | -486,390 |
| Total comprehensive income for the period attributable | ||||
| to: | ||||
| Equity holders of the Parent Company | -2,613 | -338,990 | -170,882 | -474,625 |
| Non controlling interest | -228 | -11,765 | -4,747 | -11,765 |
| ASSETS Fixed assets Intangible fixed assets Mineral interests 326,991 399,317 Tangible fixed assets Plant and machinery 1,335 22,369 Mine and other development assets - 55,218 Long-term financial assets Participation in equity accounted companies 1,433 1,840 Long-term receivables 31 112 Total fixed assets 329,790 478,856 Current Assets Inventory - 1,437 Other receivables 4,433 20,318 Prepaid expenses 452 564 Cash and cash equivalents 10,977 40,157 Total current assets 15,862 62,476 TOTAL ASSETS 345,652 541,332 EQUITY 11, 16, 17, 18 Equity attributable to equity holders of the parent company Share capital 12,982 90,281 Other paid in capital 1,107,044 984,120 Reserves 9,574 -741 Retained earnings and profit for the period -848,462 -666,480 281,138 407,180 Non controlling interest -15,727 -11,765 Total equity 265,411 395,415 Liabilities Deferred tax liabilities 63,119 112,750 9 Other provisions 2,996 1,884 10 Long term liabilities Convertible loan 5,000 5,000 12 Interest bearing loans and borrowings - 284 Other long term liabilities 1,276 - Total long term liabilities 72,391 119,918 Current liabilities Accounts payable 3,984 7,537 Interest bearing loans and borrowings - 5,672 Other liabilities 352 3,643 Accrued expenses and prepaid income 3,514 9,147 Total current liabilities 7,850 25,999 |
(TSEK) Note |
31/12/2011 | 31/12/2010 |
|---|---|---|---|
| TOTAL EQUITY AND LIABILITIES | 345,652 | 541,332 | |
| Pledged assets 8,431 97,357 17 |
| (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 2010 | 39,785 | 451,041 | 8,318 | -200,915 | 298,229 | 298,229 | |
| Net result for the period | -465,565 | -465,565 | -11,765 | -477,330 | |||
| Other comprehensive income: | |||||||
| Exchange differences | -9,059 | -9,059 | -9,059 | ||||
| Transactions with shareholders: | |||||||
| Costs referable to fundraising | -7,678 | -7,678 | -7,678 | ||||
| New share issue | 50,496 | 540,757 | 591,253 | 591,253 | |||
| Closing balance at 31 December 2010 | 90,281 | 984,120 | -741 | -666,480 | 407,180 | -11,765 | 395,415 |
| Balance at 1 January 2011 | 90,281 | 984,120 | -741 | -666,480 | 407,180 | -11,765 | 395,415 |
| Net result for the period | -181,708 | -181,708 | -4,236 | -185,944 | |||
| 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 | 10,315 | 10,315 | 10,315 | ||||
| Transactions with shareholders: | |||||||
| Correction of non controlling interest | -274 | -274 | 274 | 0 | |||
| 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 31 December 2011 | 12,982 | 1,107,044 | 9,574 | -848,462 | 281,138 | -15,727 | 265,411 |
A reversed split was of executed on the 8th of December 2011 (1:80), 80 old shares gave right to one new share. The total number of outstanding shares amounts to 51,928,350 as per December 31st 2011.
| (TSEK) | Jan-Dec 2011 | Jan-Dec 2010 |
|---|---|---|
| Cash flow from operations | ||
| Result after financial items | -235,575 | -553,226 |
| Adjustments for non cash items* | 191,106 | 467,406 |
| Income tax paid | - | - |
| Total cash flow from operations before change in | ||
| working capital | -44,469 | -85,820 |
| Change in working capital | ||
| Increase/decrease in inventories | 1,375 | 718 |
| Increase/decrease receivables | 11,448 | -4,274 |
| Increase/decrease in short term liabilities | -17,914 | 7,862 |
| Total cash flow from operations | -49,560 | -81,514 |
| Cash flow used for investments | ||
| Acquisition of subsidiary,net of cash acquired | - | 1,922 |
| Sale of associated company | 500 | - |
| Purchase of intangible assets | -21,580 | -59,250 |
| Sale of intangible assets | 500 | 2,076 |
| Purchase of tangible assets | - | -2,146 |
| Sale of tangible assets | - | 36 |
| Acquisition of shares in associated companies | - | -51 |
| Total cash flow used for investments | -20,580 | -57,414 |
| Financial activities | ||
| New share issue net of transaction costs | 45,625 | 139,428 |
| Convertible loan | - | 5,000 |
| Raised credits | 1,276 | - |
| Amortization of debt | -5,956 | -6,109 |
| Total cash flow from financial activities | 40,945 | 138,318 |
| Change in cash and bank | -29,195 | -609 |
| Cash and bank at 1 January | 40,157 | 40,807 |
| Currency exchange difference | 15 | -41 |
| Cash and bank at the end of reporting period | 10,977 | 40,157 |
| *Adjustments for non cash items | ||
| Depreciations and impairment losses on intangible assets | 148,565 | 335,311 |
| Depreciations and impairment losses of tangible assets | 20,327 | 66,207 |
| Exchange loss | 16,805 | - |
| Capital gain | -366 | - |
| Writedown of long term financial asset | 4,433 | - |
| Other operating expenses | - | 50,000 |
| Share of loss on equity accounted companies | 231 | 15,888 |
| Liability increase due to discounting of value of other provisions | 1,112 | - |
| Total | 191,106 | 467,406 |
| (TSEK) | Note | Q4 2011 | Q4 2010 | 2011 | 2010 |
|---|---|---|---|---|---|
| Other operating income | - | - | - | - | |
| Other external expenses | -2,937 | -6,494 | -15,879 | -13,137 | |
| Personnel expenses | -827 | -3,509 | -6,527 | -8,575 | |
| Depreciation/amortization tangible assets | 3 | -8 | -17 | -38 | -63 |
| Operating result | -3,772 | -10,020 | -22,444 | -21,775 | |
| Result from financial items | |||||
| Result from participations in group | |||||
| companies | - | -481,333 | -104,000 | -481,336 | |
| Financial revenue | 90 | 218 | 470 | 2,136 | |
| Financial expenses | -4 | -234 | -1,047 | -2,493 | |
| Total financial items | 86 | -481,349 | -104,577 | -481,693 | |
| Result before tax | -3,686 | -491,369 | -127,021 | -503,468 | |
| Income tax | 9 | 0 | 0 | 0 | 0 |
| Result for the period | -3,686 | -491,369 | -127,021 | -503,468 |
| TSEK | Q4 2011 | Q4 2010 | 2,011 | 2,010 |
|---|---|---|---|---|
| Result for the period | -3,686 | -491,369 | -127,021 | -503,468 |
| Other comprehensive income | - | - | - | - |
| Total other comprehensive income | -3,686 | -491,369 | -127,021 | -503,468 |
| (TSEK) Note |
31/12/2011 | 31/12/2010 |
|---|---|---|
| ASSETS | ||
| Tangible fixed assets | ||
| Plant and machinery | 10 | 48 |
| Long-term financial assets | ||
| Shares in subsidiaries | 102,635 | 100,635 |
| Receivables from subsidiaries | 241,357 | 299,997 |
| Total fixed assets | 344,002 | 400,680 |
| Current Assets | ||
| Other receivables | 149 | 10,505 |
| Prepaid expenses | 203 | 297 |
| Cash and cash equivalents | 9,315 | 32,362 |
| Total current assets | 9,667 | 43,164 |
| TOTAL ASSETS | 353,669 | 443,844 |
| SHAREHOLDERS EQUITY 11, 16, 17, 18 |
||
| Restricted equity | ||
| Share capital | 12,982 | 90,281 |
| Statutory reserve | 243,767 | 111,345 |
| Total restricted equity | 256,749 | 201,626 |
| Non restricted equity | ||
| Share premium reserve | 839,412 | 848,910 |
| Retained earnings | -622,515 | -119,047 |
| Result for the period | -127,021 | -503,468 |
| Total non restricted equity | 89,876 | 226,395 |
| Total shareholders equity | 346,625 | 428,021 |
| Long term liabilities | ||
| Convertible loan 12 |
5,000 | 5,000 |
| Total long term liabilities | 5,000 | 5,000 |
| Current liabilities | ||
| Accounts payable | 100 | 1,633 |
| Interest bearing loans and borrowings | 47 | 5,672 |
| Other liabilities | - | 446 |
| Accrued expenses | 1,897 | 3,072 |
| Total current liabilities | 2,044 | 10,823 |
| TOTAL SHAREHOLDERS EQUITY AND LIABILITIES | 353,669 | 443,844 |
| (TSEK) | Restricted Equity | Non restricted Equity | |||
|---|---|---|---|---|---|
| 2010 | Share capital |
Statutory reserve |
Share premium reserves |
Retained earnings and result for the year |
Total Equity |
| Balance at 1 January 2010 | 39,785 | 111,345 | 315,831 | -119,047 | 347,914 |
| Result for the period | -503,468 | -503,468 | |||
| Transactions with shareholders: | |||||
| Costs referable to fundraising | -7,678 | ||||
| Acquisition of subsidiary | 50,496 | 540,757 | 591,253 | ||
| Closing balance at 31 December 2010 | 90,281 | 111,345 | 848,910 | -622,515 | 428,021 |
| Balance at 1 January 2011 | 90,281 | 111,345 | 848,910 | -622,515 | 428,021 |
| Result for the year | -127,021 | -127,021 | |||
| Bonus issue | 46,736 | -46,736 | 0 | ||
| Reduction of share capital without redemption of shares | -241,467 | 241,467 | 0 | ||
| 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 31 December 2011 | 12,982 | 243,767 | 839,412 | -749,536 | 346,625 |
| 2011 | 2010 | 2009 | 2008 | 2007 | ||
|---|---|---|---|---|---|---|
| Number of outstanding shares at beginning of reporting period | Number | 1,805,618,810 | 795,709,953 | 418,161,828 | 341,000,000 | 341,000,000 |
| New share issue | Number | 2,348,649,150 | 1,009,908,857 | 377,548,125 | 77,161,828 | - |
| Number of outstanding shares at the end of reporting period* | Number | 51,928,350 | 1,805,618,810 | 795,709,953 | 418,161,828 | 341,000,000 |
| Average number of shares | Number | 2,930,566,085 | 1,346,291,141 | 538,509,297 | 364,988,889 | 341,000,000 |
| Operating result | TSEK | -62,531 | -149,987 | -39,190 | -92,573 | -55,730 |
| Result after tax | TSEK | -185,944 | -477,330 | -44,858 | -98,311 | -58,986 |
| Operating result per share | SEK | -0.02 | -0.11 | -0.07 | -0.25 | -0.16 |
| Result after financial items per share | SEK | -0.08 | -0.41 | -0.08 | -0.27 | -0.17 |
| Result per share after tax | SEK | -0.06 | -0.35 | -0.08 | -0.27 | -0.18 |
| Shareholders equity per share before dilution* | SEK | 5.11 | 0.22 | 0.37 | 0.56 | 0.72 |
| Dividend | TSEK | - | - | - | - | - |
| Price per share at the end of reporting period | SEK | 1.66* | 0.23 | 0.58 | 0.65 | 2.34 |
* 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 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 2010.
Total number of shares amounts to 51,928,350 as per December 31st 2011.
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 2010.
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
2010 annual report, 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.
IGE decided during second quarter 2011 to put further financing of the alluvial diamond project, Cassanguidi, in Angola on hold. Insufficient financing for major equipment replacement caused persistent operational interruptions, having significant adverse effect on revenue generation from the Cassanguidi project. The main part of the impairment losses reported in the income statement of the IGE Group during 2011 is related to the withdrawal of the Cassanguidi project in Angola.
| Financial revenue | Group | |
|---|---|---|
| (TSEK) | 31/12/2011 | 31/12/2010 |
| Interests | 269 | 84 |
| Exchange gains | 631 | 3,171 |
| Total financial revenue | 900 | 3,255 |
| Financial expenses | ||
| (TSEK) | 31/12/2011 | 31/12/2010 |
| Interest | -52 | -1,773 |
| Exchange losses | -5,042 | -2,968 |
| Total financial expenses | -5,094 | -4,741 |
| Jan - Dec 2011 | |||||
|---|---|---|---|---|---|
| (TSEK) | Gold | Diamonds | Nickel | Other | Total |
| Revenue from sales | - | 5,848 | - | - | 5,848 |
| Operating result before depreciation and impairment losses | -304 | -26,547 | -13,258 | -22,422 | -62,531 |
| Depreciation of mineral interests | - | -165,267 | - | - | -165,267 |
| Depreciation according to plan | - | -3,382 | -163 | -38 | -3,583 |
| Result before tax | -301 | -198,600 | -13,637 | -23,037 | -235,575 |
| Fixed assets | - | 239,909 | 89,881 | - | 329,790 |
| Current assets | 1,498 | 4,245 | 453 | 9,666 | 15,862 |
| Long term liabilities | - | 1,276 | 5,000 | - | 6,276 |
| Short term liabilities | - | 1,430 | 4,375 | 2,045 | 7,850 |
| Investments (gross amounts) | - | 6,828 | 14,752 | - | 21,580 |
| Jan - Dec 2010 | |||||
| (TSEK) | Gold | Diamonds | Nickel | Other | Total |
| Other revenues | - | 20,909 | |||
| - | - | 20,909 | |||
| Operating result before depreciation and impairment losses | -11,685 | -388,146 | - | -1,225 | -401,056 |
| Depreciation of mineral interests | -199 | -435 | - | -63 | -697 |
| Depreciation according to plan | -1,588 | -96,728 | -32,566 | -19,105 | -149,987 |
| Result before tax | -14,561 | -416,111 | -15,324 | -107,230 | -553,226 |
| Fixed assets | - | 403,254 | 69,479 | 6,123 | 478,856 |
| Current assets | 1,694 | 11,196 | 6,433 | 43,153 | 62,476 |
| Long term liabilities | 284 | 114,634 | 5,000 | - | 119,918 |
| Short term liabilities | - | 10,225 | 10,623 | 5,151 | 25,999 |
Revenue from sales is related to sales of rough diamonds recovered from IGE projects.
Result from participations in group companies during the period constitutes of write downs related to receivables held on the subsidiary IGE Diamond AB. The write down is a result of the impairment of the Cassanguidi project during the first and second quarter.
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 reversal of the deferred tax is a result of the impairment of the Cassanguidi project that has been made during the first quarter. The positive tax effect of the impairment amounts to SEK 49.6 million.
Other Provisions are related to an estimated cost of mine site restoration and accrued costs 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 they are paying 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.
For information about currently outstanding share warrants and call options the Company refers to the latest annual report of the Group (2010).
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 0.2%).
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.
by way of its owner Paul Sagberg. Paul is a member of the Board of Nickel Mountain Resources AB since July 2011. ECPS has invoiced IGE SEK 227 thousands during 2011.
Incorrect accounting related to previously reported results from share of profit/loss from equity accounted companies has been corrected in this report. This has affected the result and balance sheet stated in this report for the comparative period during the previous year. The previously reported results from equity accounted companies held by Nickel Mountain Resources have been corrected. In addition the foreign exchange rate differences arising from intercompany lending, previously reported as other external expenses, are from the Year End report 2010 and onwards recorded in exchange differences, as a separate component of equity. Further information can be obtained from the annual report of IGE for the financial year 2010.
A share issue in the form of a rights issue directed towards existing shareholders in combination with an oversubscription part was carried out during second quarter of 2011. The share issue provided the Company with SEK 55.1 gross of
transaction costs. 2,348,649,150 new shares were subscribed for and issued at a price of NOK 0.02 per share.
The total amount of outstanding shares after the rights issue amounts to 4,154,267,960. The share capital increased to SEK 207,713,398. As the subscription price of the shares (SEK 0.023) was lower than the face value of the IGE share (SEK 0.05) the difference between the subscription price and the face value was covered by transfer from the company's share premium account according to the regulations of the Swedish Companies Act in order for the share capital, by the rights issue and the transfer from the share premium account, to increase with SEK 0.05 per subscribed, allocated and paid share.
The Extra General Meeting held on the 22nd of November decided to do 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 was reduced from 4,154,267,960 to 51,928,350.
The November EGM also resolved to reduce the company share capital with SEK 241,466,827.50 by allocation to a nonrestricted reserve to be used in accordance with the shareholders' decision. The reduction of the share capital was made without redemption of shares by changing the share quota value from SEK 4.9 to SEK 0.25 per share. After the share capital reduction, the share capital amounts to SEK 12,982,087.50 distributed on 51,928,350 shares with a quota value of SEK 0.25 per share.
The decision was taken to increase the flexibility between non-restricted and restricted capital in the company.
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 and would either be offset against the cash payment to exercise the option or be repaid by NMR.
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. The agreement was re-negotiated during second quarter 2011. Prior to this renegotiation, MRG held a 100% pledge over all the assets of Nickel Mountain Resources AB: This is the explanation to the substantially higher amount reported as pledged assets during the comparative periods stated in this report.
As a part of the above agreement, MRG has secured an option with a 24 month duration, which vested on the 2nd of December 2011, for 10 per cent of the Rönnbäcken project in exchange for a USD 3 million cash payment.
Kungsgatan 44 SE-111 35 Stockholm Sweden Telephone +46 8 402 28 00 Org. Reg. No 556227-8043
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