RNS Number:2765O
Zambezi Nickel Ltd
19 December 2006
19 December 2006
ZAMBEZI NICKEL LIMITED
Interim Results for the 6 months ended 30 September 2006
Zambezi Nickel Limited ("Zambezi Nickel" or the "Company") (AIM Code: ZNI), the
AIM-quoted African nickel exploration company, today announces its audited
interim results for the 6 months ended 30 September 2006.
Following admission to AIM in October 2005 Zambezi Nickel aggressively pursued
an exploration strategy to develop the Company's two main Zambian nickel
projects; Mitaba and Paulwi. During the period, 20 holes totalling 5,138m of
diamond drilling were completed at Mitaba. The Company announced on 6 November
2006 that it had downgraded Mitaba's prospectivity to contain significant
bedrock-hosted disseminated or massive nickel sulphide mineralisation.
Subsequently, the Company has elected to carry out further studies to assess the
potential for economic development of the near surface nickel-bearing lateritic
material. These studies are expected to be completed within the next six
months. At Paulwi, rock chip sampling has been completed over the area
considered most prospective for platinum group elements, and results are
awaited.
On 20 September 2006, the Company announced that a contract has been signed with
BHP Billiton Plc for the acquisition by Zambezi Nickel of the Mavita Nickel
Project in Mozambique. The Mavita Nickel Project comprises two prospecting
licences located in the Manica province of central western Mozambique, and
includes significant aeromagnetic and stream sediment geochemical nickel
anomalies, coincident with mapped ultramafic lithologies. None of these
anomalies have been drill tested to date. During November, further stream
sediment sampling was completed, and assays are expected in the first quarter of
2007. In addition, an aeromagnetic survey was completed during December at the
project. The results of the recent work will be used for targeting the 2007
exploration programmes to commence after the wet season.
Zambezi Nickel is currently assessing new acquisitions and potential joint
ventures in the SADC region, and looks forward to announcing the outcome of
these activities in the coming months. The Company is pleased to announce the
recruitment of Jim Kerr as Managing Director to commence in January 2007 to
oversee this task.
Commenting on the results, Julian Ford, acting Managing Director of Zambezi
Nickel said: "The Company remains focused on SADC region nickel opportunities,
and looks forward to adding to the project portfolio in the coming months. We
anticipate a busy and productive field season in 2007".
The Half Yearly Report is available on the Zambezi Website at
www.zambezinickel.com
For more information, please contact:
Julian Ford Jeremy Wrathall
Zambezi Nickel Limited (Australia) Zambezi Nickel Limited (London)
Tel: +61 (08) 9216 9000 Mob: +44 771 277 6100
Mob: +61 (0) 418 949 580
David Youngman Laurence Read/Abigail Singleton
WH Ireland Limited Conduit PR
Tel: +44 161 832 2174 Tel: +44 20 7429 6666
Mob: +44 797 995 5923
Zambezi Nickel Limited
Condensed Consolidated Income Statement
For the Half Year ended 30 September 2006
Audited Unaudited Audited
Note Half Year Ended Half Year Ended Full Year Ended
30 September 2006 30 September 2005 31 March 2006
# # #
Operating income 3 12,878 3 13,981
Expenses 3 (212,726) (7,731) (148,585)
Group operating loss 3 (199,848) (7,728) (134,604)
Income Tax Expense 3 - - -
Loss after tax 3 (199,848) (7,728) (134,604)
Basic and diluted loss per share 4 (0.006) (0.001) (0.01)
Zambezi Nickel Limited
Condensed Consolidated Balance Sheets
At 30 September 2006
Audited Unaudited Audited
Note 30 September 2006 30 September 2005 31 March 2006
# # #
ASSETS
Non-current assets
Property plant and equipment 5 24,636 - 3,579
Mineral Interests 6 1,804,426 980,797 1,161,754
Total non current assets 1,829,062 980,797 1,165,333
Current assets
Trade and other receivables 53,495 1,909 12,253
Cash and cash equivalents 296,733 211,619 1,156,873
Total current assets 350,228 213,528 1,169,126
Total assets 2,179,290 1,194,325 2,334,459
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables 31,448 56,315 17,200
Accruals and provisions 24,543 39,598 6,486
Borrowings - 18,929 -
Total current liabilities 55,991 114,842 23,686
Total liabilities 55,991 114,842 23,686
Equity
Share capital 8 335,692 166,336 335,347
Preference shares - 9,000 -
Share premium account 9 2,071,596 911,452 2,068,485
Options and Warrants Reserve 9 50,353 - 50,353
Translation reserve 9 110 423 (8,808)
Accumulated loss 9 (334,452) (7,728) (134,604)
Total equity 2,123,299 1,079,483 2,310,773
Total equity and liabilities 2,179,290 1,194,325 2,334,459
Zambezi Nickel Limited
Condensed Consolidated Cash Flow Statement
For the Half Year ended 30 September 2006
Audited Unaudited Audited
Half Year Ended Half Year Ended Full Year Ended
30 September 2006 30 September2005 31 March 2006
# # #
Cash flows from operating
activities (205,562) (7,559) (113,065)
Payments to suppliers and employees
12,878 3 13,981
Interest received
Net cash utilised by operating (192,684) (7,556) (99,084)
activities
Cash flows from investing
activities (642,672) (2,165) (183,124)
Payments for mineral interests
(26,883) - (3,671)
Purchase of property, plant and
equipment
Net cash utilised by investing (669,555) (2,165) (186,795)
activities
Cash flows from financing
activities 2,099 221,340 1,461,004
Net proceeds from issue of share
capital - - (18,252)
Loan repayment
Net cash generated from financing 2,099 221,340 1,442,752
activities
Net increase/(decrease) in cash and (860,140) 211,619 1,156,873
cash equivalents
Cash and cash equivalents at
beginning of the period 1,156,873 - -
Cash and cash equivalents at end of 296,733 211,619 1,156,873
the period
Zambezi Nickel Limited
Condensed Statement of Changes in Equity
Half Year ended 30 September 2006
Audited
30 September 2006
#
Share Capital
Opening balance as at 1 April 2006 335,347
Issued during the period 345
Closing balance as at 30 September 2006 335,692
Share Premium Reserve
Opening balance as at 1 April 2006 2,068,485
Premium on shares 3,111
Closing balance as at 30 September 2006 2,071,596
Options & Warrants Reserve
Opening balance as at 1 April 2006 50,353
Charged during the period -
Closing balance as at 30 September 2006 50,353
Accumulated Losses
Opening balance as at 1 April 2006 (134,604)
Loss for the period (199,848)
Closing balance as at 30 September 2006 (334,452)
Translation Reserve
Opening balance as at 1 April 2006 (8,808)
Gain for the period 8,918
Closing balance as at 30 September 2006 110
Total 2,123,299
Notes to the Interim Financial Statements
1. Accounting Policies
Zambezi Nickel Limited is a company registered and domiciled in Bermuda. The
condensed financial statements have been prepared under the historical cost
convention. The accounting policies of the subsidiaries are consistent with
those of the holding company.
1.1 Basis of preparation
The condensed Group financial statements have been prepared in accordance with
International Accounting Standard (IAS 34), Interim Financial Reporting.
The same accounting policies and methods of computation are followed in the
interim financial statements as compared with most recent annual financial
statements.
2. Segmental Information
The economic entity operates predominately in one business and geographical
segment, being exploration for nickel in sub-Saharan Africa, namely Zambia and
Mozambique.
3. Reconciliation of Loss
The loss before and after tax was after charging expenses and receiving income
as follows:
Audited Unaudited Audited
Half Year Ended Half Year Ended Full Year Ended
30 September 2006 30 September 2005 31 March 2006
# # #
Interest income 12,878 3 13,981
Total income 12,878 3 13,981
Auditors' remuneration
- audit services (6,600) - (3,000)
-other services - - -
Depreciation of fixed assets (5,826) - (92)
Share based payments - - (14,760)
Travel (12,364) - (8,681)
Consultants (9,214) (1,782) (9,134)
Legal costs (83) (5,980) (5,594)
Personnel costs (32,500) - (34,124)
Share registry costs (13,823) - (15,584)
Public relations (14,507) - (8,346)
Management charge (44,868) - (29,519)
Foreign exchange gain/(loss) (47,552) 3,131
Other costs (25,389) (3,100) (19,751)
Total expenses (212,726) (7,731) (148,585)
Loss for period (199,848) (7,728) (134,604)
In the view of the Group's loss position for the period, there is no requirement
for a reconciliation of prima facie tax payable on accounting profit to tax
expense.
4. Loss Per Share
The calculation of loss per share is based on the loss for the financial period
of #199,848 and on a weighted average number of ordinary shares of 33,549,043.
Shares Audited Unaudited Audited
Half Year Ended Half Year Ended Full Year Ended
30 September 2006 30 September2005 31 March 2006
Basic weighted average number of ordinary
shares on issue 33,549,043 8,198,175 24,452,568
# # #
Basic loss per share - pence (0.006) (0.001) (0.01)
The diluted loss per share is the same as the basic loss per share.
The share options are anti dilutive.
The weighted average number of ordinary shares on issue during the year ended 31
March 2006 was misstated as 33,534,697 shares in the previous annual report.
This has been correctly stated as 24,452,568 in the above calculation of loss
per share for that period; however there is no effect on the loss per share
amount.
5. Property, Plant and Equipment
Plant and Computers and Total
Equipment Office Equipment
# # #
Depreciation rates 33.33% 33.33%
Cost
As at 1 April 2006 3,320 351 3,671
Additions 26,883 - 26,883
As at 30 September 2006 30,203 351 30,554
Depreciation
As at 1 April 2006 (92) - (92)
Provided in the period (5,766) (60) (5,826)
As at 30 September 2006 (5,858) (60) (5,918)
Carrying Amount as at 30 September 2006 24,345 291 24,636
6. Mineral Interests
Audited Unaudited Audited
Half Year Ended Half Year Ended Full Year Ended
30 September 2006 30 September 2005 31 March 2006
# # #
Costs
As at 1 April 2006 1,161,754 - -
Additions 642,672 980,797 1,161,754
As at 30 September 2006 1,804,426 980,797 1,161,754
The Company policy is to accumulate exploration and evaluation expenditure in
respect of each separate area of interest and carry forward this expenditure
where the right of tenure is current and where a reasonable assessment of the
existence of economically recoverable reserves cannot yet be made. Exploration
expenditure that cannot be attributed to specific areas of interest is written
off.
Where an area of interest is abandoned or the Directors decide that it is not
commercially viable, any accumulated costs in respect of that area will be
written off in the financial period in which the decision was made.
7. Investment in Subsidiaries
As at the 30 September 2006, the Company had interests in the following
subsidiaries:
Company Country of Holding Company Class of % Held Nature of Investment
Incorporation Share Business Cost
Capital Held
#
MR Nickel (Bermuda) Bermuda Zambezi Nickel Ordinary 100 Exploration 7,490
Limited Limited
MR Nickel Limited Zambia MR Nickel (Bermuda) Ordinary 100 Exploration 10
Limited
Zambezi Niquel Mozambique MR Nickel (Bermuda) Ordinary 100 Exploration 422
Mozambique Limitada Limited
Loans by the company to its subsidiaries do not have a fixed term. The company
will not call on them within 12 months of the date of this report and the loans
are non-interest bearing. The balance owing by subsidiaries at 30 September 2006
was #670,998.
8. Issued Capital
Authorised 302 million ordinary shares of par #0.01 each.
Number of Share Issued Capital Share Premium
# #
Issued and fully paid
As at 1 April 2006 33,534,697 335,347 2,068,485
April 2006 Exercise of Options 3,815 38 343
June 2006 Exercise of Options 16,000 160 1,440
August 2006 Exercise of Options 1,000 10 90
September 2006 Exercise of Options 13,749 137 1,238
Balance as at 30 September 2006 33,569,261 335,692 2,071,596
The following changes to the issued share capital of the Company have occurred
during the period:
(i) Between April and September 2006, a total of 34,564 shareholder
options were exercised and the same number of ordinary fully paid shares of par
value #0.01 were issued. The exercise price of the options was #0.10.
Shareholder options
(i) During the period 34,564 options were exercised.
Notes
1. There were 4,709,413 share options outstanding at the
beginning of the period.
2. No share options were forfeited during the period.
3. 34,564 options were exercised during the period.
4. No share options expired during the period.
5. The total of share options outstanding at the end of the
period was 4,674,849.
6. The weighted average price of the share options outstanding
at the end of the period was #0.10.
9. Reserves
Share Premium Accumulated Loss Translation Reserve Options and
Reserve Warrants Reserve
# # # #
As at 1 April 2006 2,068,485 (134,604) (8,808) 50,353
Movement during the period 3,111 (199,848) 8,918 -
As at 30 September 2006 2,071,596 (334,452) 110 50,353
10. Financial Instruments
Exposure to currency, credit and interest rate risk arise in the normal course
of the Company's business. The Group may from time to time use financial
instruments to help manage these risks. The Directors review and agree policies
for managing each of these risks.
Currency risk
The Group has overseas subsidiaries operating in Africa, whose expenses are
denominated in US dollars, Australian Dollars and Zambian Kwacha. Foreign
exchange differences on retranslation of these assets and liabilities are taken
to the translation reserve. At the end of the period the Group has # 46,273 of
monetary assets held in US dollars, #17,158 in Australian Dollars and # 33,430
in Zambian Kwacha, the remainder being held by the Parent Company in Pounds
Sterling. The maximum exposure to credit risk is represented by the carrying
amount of each financial asset in the balance sheet.
Interest rate risk
The Group's financial exposure to interest rate risk and the effective weighted
interest rate for classes of financial assets and liabilities is as follows:
Floating One Year or Over One to 5 Non Interest Total
Interest rate Less Years Bearing
30 September 2006 # # # # #
Financial Assets
Cash and cash equivalents 296,733 - - - 296,733
Trade and other receivables - - - 53,495 53,495
296,733 - - 53,495 350,228
Weighted average interest rate 4%
Financial Liabilities
Trade and other payables - - - 31,448 31,448
Accruals and provisions - - - 24,543 24,543
Borrowings - - - - -
- - - 55,991 55,991
Weighted average interest rate -
Floating One Year or Less Over One to 5 Non Interest Total
Interest Years Bearing
rate
30 September 2005 # # # # #
Financial Assets
Cash and cash equivalents - - - 211,619 211,619
Trade and other receivables - - - 1,909 1,909
- - - 213,528 213,528
Weighted average interest rate -
Financial Liabilities
Trade and other payables - - - 56,315 56,315
Accruals and provisions - - - 39,598 39,598
Borrowings - - - 18,929 18,929
- - - 114,842 114,842
Weighted average interest rate -
Floating One Year or Less Over One to 5 Non Interest Total
Interest Years Bearing
rate
31 March 2006 # # # # #
Financial Assets
Cash and cash equivalents 1,156,873 - - - 1,156,873
Prepayments and receivables - - - 12,253 12,253
1,156,873 - - 12,253 1,169,126
Weighted average interest rate 4%
Financial Liabilities
Trade and other payables - - - 17,200 17,200
Accruals and provisions - - - 6,491 6,491
Borrowings - - - - -
- - - 23,691 23,691
Weighted average interest rate -
Credit risk
Due to the current nature of the Group's operations there is no significant
concentration of credit risk.
Liquidity risk
The Group manages liquidity risk by monitoring forecast cashflows.
11. Capital Commitments
The Group had no contracted capital commitments at 30 September 2006.
The Group had no contingent liabilities at 30 September 2006.
12. Post-balance Sheet Events
The Company issued 1,804,859 ordinary shares of 1 pence each following the
exercise of options at 10 pence on 31 October 2006. Following the exercise of
these options, the enlarged issued share capital of the Company is 35,374,120.
The remaining 2,869,990 options not exercised on or before 31 October 2006 have
automatically lapsed and no longer trade on AIM.
The Company announced on 6 November 2006 that it had downgraded Mitaba's
prospectivity to contain significant bedrock-hosted disseminated or massive
nickel sulphide mineralisation. The Directors have decided to carry out further
studies to assess the potential for economic development of the near surface
nickel-bearing lateritic material and therefore wish to carry forward the
exploration and evaluation costs accumulated in respect of the Mitaba tenement.
These studies are expected to be completed within the next six months.
Paul Rankine resigned from his position of CEO on 7 November 2006.
Jim Kerr has been recruited for the Managing Director role and will commence 15
January 2007.
13. Related Parties
The subsidiaries of the Group are identified in Note 7. The Directors are listed
in the Directors' Report.
Related party transactions
During the period Zambezi Nickel Limited paid a total of #44,868 to Zambezi
Resources Limited pursuant to an agreement dated 31 August 2005 whereby Zambezi
Resources Limited supplies administrative services to Zambezi Nickel Limited.
In addition, Zambezi Nickel Limited paid Zambezi Resources Limited #8,709 for
reimbursement of expenditure incurred on its behalf, at cost.
MR Nickel Limited (a wholly owned subsidiary of Zambezi Nickel Limited) paid a
total of #46,402 to Mwembeshi Resources Limited (a wholly owned subsidiary of
Zambezi Resources Limited) for reimbursement of expenditure incurred on its
behalf, at cost.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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