25 March 2024
Botswana Diamonds PLC ("Botswana Diamonds", "BOD" or the "the Company")
Unaudited Interim Statement and Financial Results for the Six Months Ended 31 December 2023
In turbulent mes I am pleased to share some posive developments in Botswana Diamonds.
• A gravity survey has discovered a high-grade anomaly similar in size or larger than BOD's KX36 high-grade kimberlite pipe in the Kalahari.
• Posive progress on the awarding of the Thorny River Mining Permits.
• There is renewed interest in the Ghaghoo diamond mine.
• A Prospecng Licence was granted over diamond properes in Eswani aſter a long applicaon period.
Market
While the diamond market was depressed throughout 2023, it is important to recognise that it is the long term trend which is important for the diamond industry, and parcularly for explorers. Meanwhile 2024 has started in more posive fashion with diamond sales taking place and a semblance of stability aſter a difficult last year.
We believe that the long-term outlook for mined diamonds remains strong. Over the next 20 years up to 3 billion people will enter the Middle Class. These new Asian and African consumers will want many of the products purchased in the West including diamonds. Lab grown diamonds will take a share of the overall growing market but there are strong indicaons that the rarity of natural mined diamonds will always prevail and be valued.
Any discovery by BOD in 2024 is unlikely to come into producon before 2032. But it is important to realise that the shareholder base for explorers differs radically from that of producers. A successful diamond find would be expected to ratchet up the share price and provide liquidity for shareholders wishing to cash out.
Botswana
The Kalahari is likely to become the third main diamond producing area in Botswana. It is the area where BOD is focused.
Earlier this year a gravity survey on a licence adjacent to our KX36 diamond discovery found a high-grade anomaly. Current indicators are that the anomaly is as big or bigger than KX36. Further work needs to be done on this anomaly. An Environmental Impact Study is underway. Follow-up drilling is likely. Kimberlites are found in clusters. The discovery of the new anomaly strongly indicates that more will be discovered in the surrounding area. BOD has applied for further ground in the area and is hopeful for expedious award of the licences.
The KX36 project is a 3.5 hectares ("Ha") kimberlite pipe in the Kalahari. The pipe has resources of 17.9 million tonnes ("Mt") at 35 carats per hundred tonnes ("cpht") (indicated) and 6.7Mt at 36 cpht (inferred) at $65 per carat ("/ct"). The modelled grade range is 57-76 cpht at an esmated diamond value of up to $107/ct.
The Board understands there is interest from a new investor in acquiring the Ghaghoo mine. Ghaghoo, which is currently on care and maintenance, together with KX36, and the new anomaly, if diamondiferous, and theMaibwe licences in which BOD is a joint venture partner, could provide the core for a new diamond-producing area in Botswana.
I have wrien before about the extensive diamond data base held by BOD. We are examining a proposal to use Data Analycs and Arficial Intelligence techniques to evaluate the data. We strongly believe that this approach will idenfy new targets.
South Africa
Our Africa diamond producing area in South Africa, Marsfontein, was placed on care and maintenance at the end of 2023 as a result of rising fuel prices and falling diamond prices. It is important to remember the purpose of mining the Marsfontein dumps and dykes is to provide informaon and experience prior to mining the adjacent Thorny River dyke deposits.
The operaons at Marsfontein and Thorny River are contracted out on a royalty basis thus there are no costs to BOD.
BOD applied for the necessary mining permits on Thorny River in 2022. Slow but good progress has been made with the outstanding hurdle being community support which is at an advanced stage of compleon. Further updates will be provided as and when appropriate.
Samples have been taken and submied for analysis on the Reivilo group of pipes, where BOD hold 100% of the ground. Previous work on their pipes discovered they were diamondiferous.
Other
The company has been awarded a Prospecng License in Eswani where, with our local partners, it is currently undertaking a desktop study with a view to commencing operaons.
The company is also of the view that Zimbabwe remains highly prospecve and thus connues to engage with various partners to gain a reasonable entry into the country.
Outlook
Junior mineral explorers are and have been friendless for the past number of years. The recent diamond price falls and the growth of the lab grown diamonds have exacerbated the gloom. But, without exploraon there will be no new mines. Producing diamond mines do not last forever. BOD is one of the only remaining acve junior explorers in the diamond producing area of Southern Africa. We remain focused on our task and are well posioned for an upturn in the market when it comes. We must last the course and take advantage of the rich potenal coming from the decline in exploraon acvity. Funding is crical, but with the right backing we have a great deal of work to do and remain opmisc of delivering shareholder returns in the long term.
John Teeling
Chairman
22 March 2024
This release has been approved by James Campbell, Managing Director of Botswana Diamonds plc, a qualified geologist (Pr.Sci.Nat), a Fellow of the Southern African Institute of Mining and Metallurgy, the Institute of Materials, Metals and Mining (UK) and the Geological Society of South Africa and who has over 35-years' experience in the diamond sector.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014. The person who arranged for the release of this announcement on behalf of the Company was James Campbell, Director
A copy of this announcement is available on the Company's website, atwww.botswanadiamonds.co.uk
ENDS
Enquiries: | |
Botswana Diamonds PLC | |
John Teeling, Chairman | +353 1 833 2833 |
James Campbell, Managing Director | +27 83 457 3724 |
Jim Finn, Director | +353 1 833 2833 |
Nominated & Financial Adviser | +44 (0) 20 7409 3494 |
Strand Hanson Limited | |
Ritchie Balmer | |
Rory Murphy | |
David Asquith | |
Broker | +44 (0) 207 374 2212 |
First Equity Limited | |
Jason Robertson | |
Public Relations | +44 (0) 207 138 3206 |
BlytheRay | +44 (0) 207 138 3553 |
Megan Ray | +44 (0) 207 138 3206 |
Said Izagaren | |
Teneo | |
Luke Hogg | +353 (0) 1 661 4055 |
Alan Tyrrell | +353 (0) 1 661 4055 |
Fia Long | |
Alan Reynolds | |
www.botswanadiamonds.co.uk |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six Months | Year | ||
Ended | Ended | Ended | |
31 Dec 23 | 31 Dec 22 | 30 Jun 2023 | |
unaudited | unaudited | audited | |
£'000 | £'000 | £'000 | |
REVENUE | |||
Royalties | 24 | - | 15 |
Operating expenses | (20) | - | (5) |
GROSS PROFIT | 4 | - | 10 |
Administrative expenses | (255) | (330) | (567) |
Impairment of exploration and evaluation assets | - | - | (3,124) |
OPERATING LOSS | (251) | (330) | (3,681) |
LOSS BEFORE TAXATION | (251) | (330) | (3,681) |
Income tax expense | - | - | - |
LOSS AFTER TAXATION | (251) | (330) | (3,681) |
Exchange difference on translation of foreign operations | - | (24) | 299 |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | (251) | (354) | (3,382) |
LOSS PER SHARE - basic and diluted | (0.02p) | (0.04p) | (0.38p) |
CONDENSED CONSOLIDATED BALANCE SHEET | |||
31 Dec 23 | 31 Dec 22 | 30 Jun 2023 | |
unaudited | unaudited | audited | |
ASSETS: | £'000 | £'000 | £'000 |
NON-CURRENT ASSETS | |||
Intangible assets | 5,509 | 8,764 | 5,442 |
Plant and equipment | 207 | 207 | 207 |
5,716 | 8,971 | 5,649 | |
CURRENT ASSETS | |||
Other receivables | 266 | 38 | 283 |
Cash and cash equivalents | 334 | 95 | 199 |
600 | 133 | 482 | |
TOTAL ASSETS | 6,316 | 9,104 | 6,131 |
LIABILITIES: | |||
CURRENT LIABILITIES | |||
Trade and other payables | (870) | (1,041) | (802) |
TOTAL LIABILITIES | (870) | (1,041) | (802) |
NET ASSETS | 5,446 | 8,063 | 5,329 |
EQUITY | |||
Share capital - deferred shares | 1,796 | 1,796 | 1,796 |
Share capital - ordinary shares | 2,800 | 2,392 | 2,610 |
Share premium | 12,398 | 11,844 | 12,220 |
Share based payments reserve | 111 | 111 | 111 |
Retained Deficit | (10,676) | (6,774) | (10,425) |
Translation Reserve | - | (323) | - |
Other reserves | (983) | (983) | (983) |
TOTAL EQUITY | 5,446 | 8,063 | 5,329 |
Six Months
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYShare Share Capital Premium £'000 £'000
Share based
Payment Reserves £'000
Retained
Deficit £'000
Translation
Reserve £'000
Other ReserveTotal Equity
£'000 £'000
As at 30 June 2022
Ordinary shares issued Share issue expenses Total comprehensive loss As at 31 December 2022
3,994 194 - - 4,188
11,487
111
(6,444)
(299)
(983) 7,866
357 - - - - 551
- - 11,844
-
-- (330)
- (24)
- -- (354)
111
(6,774)
(323)
(983)
8,063
Ordinary shares issued Transfer of reserves Total comprehensive loss As at 30 June 2023
218
376 - -
-
-
- (299)
- (3,352)
- 299 24
- -
594 -
- (3,328)
4,406
12,220
111
(10,425)
-(983) 5,329
Ordinary shares issued Share issue expenses Total comprehensive loss As at 31 December 2023
190 - - 4,596
- 12,398
CONDENSED CONSOLIDATED CASH FLOW
190 - - - - 380
(12) - - - - (12)
- (251) - - (251)
CASH FLOW FROM OPERATING ACTIVITIES Loss for the period
Impairment of exploration and evaluation assets Foreign exchange losses
111
(10,676)
-(983)
5,446
Six Months
Ended 31 Dec 23 unaudited £'000
(251)
-
-
Six Months
Ended 31 Dec 22 unaudited £'000
(330)
-
(2)
Year
Ended 30 Jun 2023 audited £'000
(3,681)
3,124
2
(251)
(332) (555)Movements in Working Capital
NET CASH USED IN OPERATING ACTIVITIES
85
(166)
76 82
(256) (473)
CASH FLOWS FROM INVESTING ACTIVITIES Additions to exploration and evaluation assets NET CASH USED IN INVESTING ACTIVITIES
(67) (67)
(105) (132)
(105) (132)
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from share issue
Share issue costs
NET CASH GENERATED FROM FINANCING ACTIVITIES
380 (12) 368
295 647
-
-295 647
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
135
(66) 42
Cash and cash equivalents at beginning of the period
Effect of foreign exchange rate changes
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD
199 - 334
159 159
2 (2)
95 199
Notes:
1. INFORMATION
The financial information for the six months ended 31 December 2023 and the comparative amounts for the six months ended 31 December 2022 are unaudited. The financial information above does not constitute full statutory accounts within the meaning of section 434 of the Companies Act 2006.
The Interim Financial Report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.
The accounting policies and methods of computation used in the preparation of the Interim Financial Report are consistent with those used in the Group 2023 Annual Report, which is available atwww.botswanadiamonds.co.uk
The interim financial statements have not been audited or reviewed by the auditors of the Group pursuant to the Auditing Practices board guidance on Review of Interim Financial Information.
2. DIVIDEND
No dividend is proposed in respect of the period.
3. LOSS PER SHARE
Basic loss per share is computed by dividing the loss after taxation for the period available to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the period.
Diluted loss per share is computed by dividing the loss after taxation for the period by the weighted average number of ordinary shares in issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the period.
The following table sets forth the computation for basic and diluted earnings per share (EPS):
Numerator
For basic and diluted EPS retained loss
Denominator
Weighted average number of ordinary shares
1,057,998,118
Loss per share - Basic and Diluted
Six Months | Six Months | |
Ended | Ended | Year Ended |
31 Dec 23 | 31 Dec 22 | 30 Jun 23 |
£'000 | £'000 | £'000 |
(251) | (330) | (3,681) |
No. | ||
977,271,808 | ||
(0.38p) |
No.
No.
924,921,167
(0.02p)
(0.04p)
The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of shares for the purposes of the diluted earnings per share:
No. | No. | No. | |
Share options | 11,410,000 | 11,410,000 | 11,410,000 |
4.
INTANGIBLE ASSETS
31 Dec 23 | 31 Dec 22 | 30 June 23 | |
£'000 | £'000 | £'000 | |
Exploration and evaluation assets: | |||
Cost: | |||
Opening balance | 10,188 | 9,807 | 9,807 |
Additions | 67 | 603 | 381 |
Exchange variance | - | (24) | - |
10,255 | 10,386 | 10,188 | |
Impairment: | |||
Opening balance | 4,746 | 1,622 | 1,622 |
Provision for impairment | - | - | 3,124 |
4,746 | 1,622 | 4,746 | |
Carrying Value: | |||
Opening balance | 5,442 | 8,185 | 8,185 |
Closing balance | 5,509 | 8,764 | 5,442 |
Regional Analysis | 31 Dec 23 | 31 Dec 22 | 30 Jun 23 |
£'000 | £'000 | £'000 | |
Botswana | 3,550 | 6,638 | 3,550 |
South Africa | 1,959 | 2,126 | 1,892 |
Zimbabwe | - | - | - |
5,509 | 8,764 | 5,442 |
Exploration and evaluation assets relate to expenditure incurred in exploration for diamonds in Botswana and South Africa. The directors are aware that by its nature there is an inherent uncertainty in exploration and evaluation assets and therefore inherent uncertainty in relation to the carrying value of capitalized exploration and evaluation assets.
In the prior year the Group incurred expenditure to date of £3,124,284 on certain licences held in Botswana, these licences lapsed and were not renewed. The directors decided to fully impair the expenditure and accordingly, an impairment charge of £3,124,284 was recorded in the prior year.
On 6 February 2017 the Group entered into an Option and Earn-In Agreement with Vutomi Mining Pty Ltd and Razorbill Properties 12 Pty Ltd (collectively known as 'Vutomi'), a private diamond exploration and development firm in South Africa. Pursuant to the terms of the Agreement, Botswana Diamonds earned a 40% equity interest in the project. A separate agreement for funding of exploration resulted in the Company's interest in Vutomi increasing from 40% to 45.94%.
On 28 September 2022 the Board announced that it had exercised its pre-emptive right to acquire the outstanding third-party interests in Vutomi and had increased its' interest from 45.94% to 74%.
The consideration for Vutomi comprised 56,989,330 new ordinary shares of £0.0025 each in the Company ("Consideration Shares"). The Consideration Shares were issued in two tranches. 28,464,665 Consideration Shares (First Tranche) were issued to the vendors on 28 September 2022 and the balance of 28,524,665 (Second Tranche) was issued on 27 January 2023.
The Company also agreed that immediately on completion of the Acquisition, the Company would sell 26% of Vutomi for a deferred consideration of US$316,333 to the Company's local South African Empowerment partner, Baroville Trade and Investments 02 Proprietary Limited ("Baroville"), in order to comply with South
African requirements on empowerment ownership, which will be funded by a loan from Botswana Diamonds (Note 6). On completion, the Company therefore owns 74% of Vutomi.
The realisation of these intangible assets is dependent on the successful discovery and development of economic diamond resources and the ability of the Group to raise sufficient finance to develop the projects. It is subject to a number of significant potential risks, as set out below:
• licence obligations;
• exchange rate risks;
• uncertainties over development and operational costs;
• political and legal risks, including arrangements with governments for licenses, profit sharing and taxation;
• foreign investment risks including increases in taxes, royalties and renegotiation of contracts;
• title to assets;
• financial risk management;
• going concern; and
• operational and environmental risks.
Included in additions for the period are £28,000 (June 2023: £71,521) of directors' remuneration which has been capitalized. This is for time spent directly on the operations rather than on corporate activities.
5.
SHARE CAPITAL
Deferred Shares - nominal value of 0.75p per share | Number | Share Capital | Share |
£'000 | |||
Premium | |||
£'000 | |||
At 1 July 2022 and 1 July 2023 | 239,487,648 | 1,796,157 | - |
At 30 June 2023 and 31 December 2023 | 239,487,648 | 1,796,157 | - |
Ordinary Shares - nominal value of 0.25p per share | Number | Share Capital | Share |
£'000 | |||
Premium | |||
£'000 | |||
At 1 July 2022 | 879,071,902 | 2,198 | 11,487 |
Issued during the period | 77,543,877 | 194 | 357 |
Share issue expenses | - | - | - |
At 31 December 2022 | 956,615,779 | 2,392 | 11,844 |
Issued during the period | 87,262,120 | 218 | 376 |
Share issue expenses | - | - | - |
At 30 June 2023 | 1,043,877,899 | 2,610 | 12,220 |
Issued during the period | 76,000,000 | 190 | 190 |
Share issue expenses | - | - | (12) |
At 31 December 2023 | 1,119,877,899 | 2,800 | 12,398 |
Movements in share capital |
On 27 November 2023 the Company raised £380,000 through the issue of 76,000,000 new ordinary shares at a placing price of 0.5p via a placing and subscription with existing and new investors. Each Placing Share has one warrant attached with the right to subscribe for one new Ordinary Share at 0.5p per new Ordinary Share for a period of two years from 27 November 2023.
6.
OTHER RECEIVABLES
7.
The carrying value of other receivables approximates to their fair value. |
TRADE AND OTHER PAYABLES |
31 Dec 22 | 30 Jun 23 | ||
£'000 | £'000 | ||
38 | 34 | ||
- | 249 | ||
38 | 283 | ||
31 Dec 23 | 31 Dec 22 | 30 Jun 23 | |
£'000 | £'000 | £'000 | |
Trade payables | 86 | 82 | 51 |
Petra Diamonds creditor | 123 | 123 | 123 |
Accruals | 661 | 594 | 628 |
Consideration due - Vutomi acquisition | - | 242 | - |
870 | 1,041 | 802 |
31 Dec 23 £'000
Prepayments
Debtor Baroville (Note 4)
17 249 266
It is the Company's normal practice to agree terms of transactions, including payment terms, with suppliers and provided suppliers perform in accordance with the agreed terms, payment is made accordingly. In the absence of agreed terms it is the Company's policy that the majority of payments are made between 30 - 40 days. The carrying value of trade and other payables approximates to their fair value.
8.
SHARE BASED PAYMENTS
WARRANTS
Dec 2023
Number of WarrantsWeighted average exercise price in pence
Jun 2023 Number of WarrantsDec 2022
Weighted average exercise price in penceNumber of WarrantsWeighted average exercise price in pence
Outstanding at beginning of period Issued
Exercised Expired
Outstanding at end of period
55,000,000 76,000,000 - - 131,000,000
2.0 113,737,455
1.28
162,816,667
1.07
0.50
-
- (58,737,455)
- 1.13
- 55,000,000
- 0.60 - 2.0
-
(49,079,212)
- 113,737,455
- 0.60 - 1.28
Further information on the warrants are detailed in Note 5 above.
9.
POST BALANCE SHEET EVENTS
There are no material post balance sheet events affecting the Group.
10.
APPROVAL
The Interim Report for the period to 31st December 2023 was approved by the Directors 22 March 2024.
11.
AVAILABILITY OF REPORT
The Interim Statement will be available on the website atwww.botswanadiamonds.co.uk
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Disclaimer
Botswana Diamonds plc published this content on 25 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 March 2024 06:02:01 UTC.