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Petmin delists from AIM, takes write-down

Miningmx | Mon, 09 Sep 2013 14:02
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[] – PETMIN reported mixed news in a full-year operational update saying its flagship anthracite mine, Somkhele, had lifted earnings 91% in the second half of its financial year, but that the company had written down its Veremo pig-iron project by R200m.

The company also announced it intended to de-list from London's Alternative Investment Market where its listing was administratively time consuming and expensive.

Including the impairment, which is a non-cash item, share earnings from continuing operations were expected to come in at a 19.42 cents loss which compares to a 9.71 cents profit in the previous financial year.

On a like-for-like basis, however, earnings were expected to be up 18% to R88m. The performance was based on a strong second half performance at the Somkhele mine in which installed capacity was increased 1.2 milliton tonnes/year (mpta) of saleable metallurgical anthracite, and 480ktpa of energy product.

Somkhele lifted production for the year to 822,431t from 637,220t in the previous year. Second half anthracite production was 528,666t, an 80% increase on output in the first half of the financial year.

This was owing to the newly-commissioned third plant which became fully operational in February/March 2013, the company said in an announcement to the JSE. Petmin also issued a cautionary announcement.

Commenting on its Veremo pig iron investment, Petmin said the controlling shareholders of the project were supposed to pay Petmin the larger of R65m or 25% of taxed profit on February 28.

The payment was not made however.

While Petmin had entered into discussions with the controlling shareholders regarding the payment due to Petmin, it had decided to write down the investment by R200m giving it a carrying value of R297m, still more than the R95m initial investment.

"Significant progress has been made at Veremo and development capital of R112m has been invested to date by the controlling shareholders and the previous owners," Petmin said in its announcement.

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