Ivanplats’ total comprehensive loss for Q2 2013 of US$3.3 million is lower than for the same period in 2012.This is according to the company’s financial results for the second quarter ended 30 June 30, 2013 which stated that the decrease mainly was due to a decrease in finance costs of $8.8 million and an increase of exploration and project expenditure of $6.6 million. The decrease in finance costs was attributable to the conversion of the convertible bonds issued by the company in late 2011 and early 2012 (Pre-IPO Bonds) into Common Shares on 23 October, 2012, as a result, and upon completion of the initial public offering (IPO), as well as the settlement in full of the Kipushi purchase consideration during 2012.
The increase in exploration and project expenditures by $6.6 million was due to an increase in expenditure of $11.3 million at the Kipushi Project following its acquisition in 2011, which was partially set off by decreased expenditure at the Kamoa and Platreef projects by $1.9 million and $3.8 million respectively. There also was an increase in expenditure on regional exploration in Q2 2013 compared to the same period in 2012. The decrease in drilling at the Platreef Project was as a result of the Section 93 directive from the DMR received during Q4 2012, which halted all exploration activity. The directive was lifted in Q2 2013 and drilling has resumed.
Salaries and benefits for Q2 2013 increased by $1.6 million compared to Q2 2012 due to the increase in executive and administrative staff during the past year, which also resulted in an increase in office and administration expenditure. Legal fees were $2.4 million higher in Q2 2012 than in Q2 2013 due to the legal expenditure incurred in preparation for the IPO in 2012. Financial position as at 30 June, 2013 vs. 31 December, 2012
The company’s total assets decreased to $642.4 million as at 30 June, 2013, from $726.7 million as at 31 December, 2012. This mainly was due to a decrease in cash and cash equivalents of $101.3 million. The company utilised $90.2 million of its cash resources in its operations and earned interest income of $0.7 million on cash balances. A total of $9.7 million was spent to acquire property, plant and equipment and other non-current assets. The company’s total liabilities increased from $113.1 million as at December 31, 2012, to $135.8 million as at June 30, 2013. This was due to an increase in non-current borrowings of $19.1 million, as well as an increase in trade and other payables of $3.4 million.
The company had $158.6 million in cash and cash equivalents and $80.1 million in short-term deposits as at June 30, 2013. Certain of the company’s cash and cash equivalents and short-term deposits, having an aggregate value of $188.6 million, are subject to contractual restrictions as to their use. As at June 30, 2013, the company had consolidated working capital of approximately $229.6 million, compared to $324.3 million at December 31, 2012. The Platreef Project working capital is restricted and amounted to $188.9 million at June 30, 2013, and $204.2 million at December 31, 2012. Excluding the Platreef Project working capital, the resultant working capital is $40.7 million at June 30, 2013, and $120.1 million at December 31, 2012.Ivanplats, with offices in Canada, South Africa and the United Kingdom, is advancing and developing its three principal projects:
- Kamoa, 95% owned by Ivanplats, is the company’s 2008 world-scale copper discovery in a previously unknown extension of the Central African Copperbelt in the Democratic Republic of Congo (DRC).
- Platreef, 90% owned by Ivanplats, is a discovery of platinum-group elements, nickel, copper and gold on the Northern Limb of South Africa’s Bushveld Complex, which contains the Flatreef Deposit. Discovered in 2010, Flatreef is a zone of high-grade mineralization that lies within a flat, to gently dipping, portion of the Platreef and that Ivanplats believes is amenable to highly mechanised underground mining methods.
- Kipushi, 68% owned by Ivanplats, the historic, high-grade zinc-copper mine, also on the Copperbelt in the DRC, acquired in 2011 and now being dewatered and upgraded to support a future return to production of zinc, copper and other metals following the end of an 18-year care-and-maintenance program in 2011.
Ivanplats has obtained regulatory approval for a novel transaction structure that the company contemplates would simultaneously provide locked up shareholders with a right to release and sale of locked up shares to a designated purchaser; would provide additional funding for the on-going project development of the company and would secure a strategic investor who would help to advance the overall development of the company’s key projects. The company is in the process of discussion and negotiation with potential third party participants in the transaction, with any such transaction subject to finalisation of definitive commercial terms with one or more of those third parties. Ivanplats added to its mine-building team with the hiring of Brock Gill as MD of the Kamoa Project and Vice President of DRC Operations, effective 1 June, 2013. South African business leader Cyril Ramaphosa resigned from Ivanplats’ Board of Directors in May after more than a decade of service. This is in line with his decision to review his business interests following his election as Deputy President of South Africa’s ruling party, the African National Congress, in December 2012. In August, Ivanplats appointed Peter Brokenshire as Vice President, Technical Services. HIGHLIGHTS
- On June 10, Ivanplats announced that it had filed a Mining Right Application for its Platreef platinum-group metals (PGM), nickel, copper and gold project on the Northern Limb of South Africa’s Bushveld Complex. This marks the culmination of years of successful exploration and engineering to define high-grade mineralization that Ivanplats believes are amenable to safe, efficient, large-scale, mechanized underground mining methods.
- In conjunction with the Mining Right Application, and in compliance with South African ownership requirements under the Mining Charter, Ivanplats also announced that the Platreef Project ownership structure has been modified to include a Broad-Based Black Economic Empowerment (BBBEE) partner that will represent local communities, women, children and employees. The BBBEE partner will acquire a 26% interest in the Platreef Project through a private company incorporated in South Africa — BBBEE SPV. Ivanplats will finance the transaction, to take effect upon Ivanplats’ receipt of the Mining Right, and retain a 49% minority share in BBBEE SPV.
- On 6 August, Ivanplats announced that key elements have been established for a new study to help set the stage for the cost-effective development of a mine and processing plant at the company’s Kamoa copper discovery in the DRC’s Katanga province. The refocused Kamoa development study, to be prepared in conformance with the requirements set out in Canada’s National Instrument 43-101, is expected to result in the declaration of the first mineral reserves at Kamoa and to report on the establishment of an appropriately phased approach to achieving first production and progressive expansion of the Kamoa Project.
- At the Kipushi Zinc-Copper Project, dewatering of the existing mine workings is continuing. The water level was 1 016 metres below surface in early August, a reduction of 30 metres since the end of June. The company expects that the mine will be dewatered to the bottom of the ramp decline, at 1 270 metres below surface, during Q1 2014.