Interim Statement and Financial Results

Botswana Diamonds plc
Financial Information (Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
									Six Months		Six Months		Year
									Ended		Ended		Ended
									31 Dec 19		31 Dec 18		30 Jun19
									unaudited	unaudited			audited
									£'000		£'000		£'000
REVENUE									-		-		-
Cost of sales									-		-		-
GROSS PROFIT									-		-		-
Administrative expenses									( 194 )		( 190 )		( 337 )
Impairment of exploration and evaluation assets									-		-		( 435 )
OPERATING LOSS									( 194 )		( 190 )		( 772 )
LOSS BEFORE TAXATION									( 194 )		( 190 )		( 772 )
Income tax expense									-		-		-
LOSS AFTER TAXATION									( 194 )		( 190 )		( 772 )
Exchange difference on translation of foreign operations									-		-		( 133 )
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD									( 194 )		( 190 )		( 905 )
LOSS PER SHARE - basic and diluted									(0.03p)		(0.04p)		(0.14p)
CONDENSED CONSOLIDATED BALANCE SHEET									31 Dec 19		31 Dec 18		30 Jun19
									unaudited		unaudited		audited
ASSETS:									£'000		£'000		£'000
NON-CURRENT ASSETS
Intangible assets									8,267		8,364		8,035
Financial assets									-		-		-
									8,267		8,364		8,035
CURRENT ASSETS
Trade and other receivables									21		12		40
Cash and cash equivalents									13		39		14
									34		51		54
TOTAL ASSETS									8,301		8,415		8,089
LIABILITIES:
CURRENT LIABILITIES
Trade and other payables									( 425 )		( 386 )		( 398 )
TOTAL LIABILITIES									( 425 )		( 386 )		( 398 )
NET ASSETS									7,876		8,029		7,691
EQUITY
Share capital - deferred shares									1,796		1,796		1,796
Share capital - ordinary shares									1,569		1,273		1,441
Share premium									10,418		10,099		10,300
Share based payments reserve									111		104		111
Reserves									( 5,035 )		( 4,260 )		( 4,974 )
Other reserves									( 983 )		( 983 )		( 983 )
TOTAL EQUITY									7,876		8,029		7,691
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
					Share based
	Share		Share		Payment		Retained		Translation		Other		Total
	Capital		Premium		Reserves		Deficit		Reserve		Reserve		Equity
	£'000		£'000		£'000		£'000		£'000		£'000		£'000
As at 30 June 2018	3,069		10,099		104		( 4,070 )		-		( 983 )		8,219
Total comprehensive loss							( 190 )		-		-		( 190 )
As at 31 December 2018	3,069		10,099		104		( 4,260 )		-		( 983 )		8,029
Ordinary shares issued	168		201		7		-		-		-		376
Total comprehensive loss					-		( 581 )		( 133 )		-		( 714 )
As at 30 June 2019	3,237		10,300		111		( 4,841 )		( 133 )		( 983 )		7,691
Ordinary shares issued	128		128		-		-		-		-		256
Share issue expenses	-		( 10 )		-		-		-		-		( 10 )
Total comprehensive loss	-				-		( 194 )		133		-		( 61 )
As at 31 December 2019	3,365		10,418		111		( 5,035 )		-		( 983 )		7,876
CONDENSED CONSOLIDATED CASH FLOW									Six Months		Six Months		Year
									Ended		Ended		Ended
									31 Dec 19		31 Dec 18		30 Jun19
									unaudited		unaudited		audited
									£'000		£'000		£'000
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the period									( 194 )		( 190 )		( 772 )
Impairment of exploration and evaluation assets									-		-		435
Exchange movements									( 4 )		-		( 132 )
									( 198 )		( 190 )		( 469 )
Movements in Working Capital									46		99		66
NET CASH USED IN OPERATING ACTIVITIES									( 152)		( 91 )		( 403 )
CASH FLOWS FROM INVESTING ACTIVITIES
Exploration costs capitalised									( 99 )		( 130 )		( 214 )
NET CASH USED IN INVESTING ACTIVITIES									( 99 )		( 130 )		( 214 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue									256		-		370
Share issue costs									( 10 )		-		-
NET CASH GENERATED IN INVESTING ACTIVITIES									246		-		370
NET DECREASE IN CASH AND CASH EQUIVALENTS									( 5 )		( 221 )		( 247 )
Cash and cash equivalents at beginning of the period									14		260		260
Effect of foreign exchange rate changes									4		-		1
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD									13		39		14

 

Notes:

 

1.             INFORMATION

 

The financial information for the six months ended 31 December 2019 and the comparative amounts for the six months ended 31 December 2018 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 2019 Annual Report, which is available at www.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):

 

 

	Six Months Ended  31 Dec 19		Six Months Ended  31 Dec 18		Year Ended 30 Jun 19
	£'000		£'000		£'000
Numerator
For basic and diluted EPS retained loss	(194)		(190)		(772)
	No.		No.		No.
Denominator Weighted average number of ordinary shares	621,741,536		509,282,508		537,481,761
Loss per share - Basic and Diluted	(0.03p)		(0.04p)		(0.14p)
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 19		31 Dec 18		30 June 19
	£'000		£'000		£'000
Exploration and evaluation assets:
Cost:
Opening balance	9,299		9,063		9,063
Additions	99		130		369
Exchange variance	133		-		(133)
	9,531		9,193		9,299
Impairment:
Opening balance	1,264		829		829
Provision for impairment	-		-		435
	1,264		829		1,264
Carrying Value:
Opening balance	8,035		8,234		8,234
Closing balance	8,267		8,364		8,035

 

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.

 

During the prior year, some licences held by the Group in its subsidiary company Sunland Minerals (Pty) Ltd were relinquished. Therefore, the directors decided to impair the costs of exploration on these licences. Accordingly, an impairment allowance of £435,139 (2018: £179,524) had been recorded by the Group in the prior year.

 

On 11 November 2014 the Brightstone block was farmed out to BCL Investments (Proprietary) Limited, a Botswana Company, who assumed responsibility for the work programme. Botswana Diamonds will retain a 15% equity interest in the associate.

 

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.

 

As at December 31^st 2019 the group has earned a 40% interest in Vutomi.

 

The directors believe that there were no facts or circumstances indicating that the carrying value of intangible assets may exceed their recoverable amount and thus no impairment review was deemed necessary by the directors. 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 year are £Nil (Jun 2019: £6,951) of share based payments, £7,529 (Jun 2019: £15,754) of wages and salaries and £37,642 (Jun 2019: £74,620) of directors remuneration. The remaining balance pertains to the amounts capitalised to the respective licenses held by the entity.

 

 

5.             SHARE CAPITAL

 

Deferred Shares	Number		Share Capital £'000		Share Premium £'000
At 1 July 2018 and 1 July 2019	239,487,648		1,796,157		-
At 30 June 2019 and 31 December 2019	239,487,648		1,796,157		-

 

 

Ordinary Shares	Number		Share Capital £'000		Share Premium £'000
At 1 July 2018	509,282,508		1,273		10,099
Issued during the period	-		-		-
At 31 December 2018	509,282,508		1,273		10,099
Issued during the period	67,272,727		168		201
At 30 June 2019	576,555,235		1,441		10,300
Issued during the period	51,000,000		128		128
Share issue expenses	-		-		(10)
At 31 December 2019	627,555,235		1,569		10,418

 

Movements in share capital

 

On 28 January 2019, the Company raised £370,000 through the issue of 67,272,727 new ordinary shares of 0.25p each at a price of 0.55p per share to provide additional working capital and fund development costs. Each placing share has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per share for a period of two years from 23 January 2019.

 

On 18 July 2019, the Company raised £250,000 through the issue of 50,000,000 new ordinary shares of 0.25p each at a price of 0.50p per share to provide additional working capital and fund development costs.        

 

On 18 November 2019 a total of 1,000,000 warrants were exercised at a price of 0.60p per warrant for £6,000.

 

 

6.             SHARE BASED PAYMENTS

 

The Group issues equity-settled share-based payments to certain directors and individuals who have performed services for the Group. Equity-settled share-based payments are measured at fair value at the date of grant.

 

The Group plan provides for a grant price equal to the average quoted market price of the ordinary shares on the date of grant.

 

Warrants

	Dec 2019		Jun 2019		Dec 2018
	Number of Options	Weighted average exercise price in pence	Number of Options	Weighted average exercise price in pence	Number of Options	Weighted average exercise price in pence
Outstanding at beginning of the period	67,272,727	0.60	-	-	28,298,700	0.85
Issued	-	-	67,272,727	0.60
Exercised	1,000,000	0.60	-
Expired	-	-	-	-	(28,298,700)	0.85
Outstanding at end of the period	66,272,727	0.60	67,272,727	0.60	-	-

 

 

In the period to 31 December 2018 the 28,298,700 warrants that were granted on 22 December 2015 expired.

 

As part of the placing on 28 January 2019, the Company issued 67,272,727 warrants to each subscriber of the placing shares. Each placing share has one warrant attached with the right to subscribe for one new ordinary share at 0.60p per share for a period of two years from 23 January 2019.

 

On 18 November 2019 a total of 1,000,000 warrants were exercised at a price of 0.60p per warrant.

 

 

7.            POST BALANCE SHEET EVENTS

 

On 28 January 2020 the Company announced that it had raised £250,000 via the placing of 41,666,667 new ordinary shares at a placing price of 0.60p per share. Each placing share has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from 28 January 2020.

 

The net proceeds of the placing will fund ongoing diamond exploration in South Africa and Botswana and will also provide the Company with additional working capital.

 

8.            APPROVAL

 

               The Interim Report for the period to 31^st December 2019 was approved by the Directors on 25^th March 2020.

 

 

9.            AVAILABILITY OF REPORT

 

               The Interim Statement will be available on the website at www.botswanadiamonds.co.uk