[miningmx.com] — IS SMALL DIAMOND miner Kimberley Consolidated Mining (KCM) hoping an early gem strike at its much vaunted Carter Block will prove a dazzling distraction for shareholders?
At this point Cape Town-headquartered KCM probably has more than a few frustrated shareholders after failing to timeously publish audited financial statements for the period ending February 2008.
KCM said earlier this month that the reason for not producing the audited annual financial statements on time was due to a “subsequent event” that took place late in August at subsidiary company Channal Mining.
KCM’s board felt the event should be addressed in the financial year to end-February 2008, meaning that adjustments needed to be made to the annual financial statements.
Excuses aside, making shareholders wait more than six months for a set of audited figures is not great form for a new listing.
It may explain KCM’s lacklustre share price of late, bid at 27c and offered at 35c on Wednesday afternoon.
But hopefully shareholders will welcome Wednesday’s news that the AltX-listed diamond company recovered of 128 stones from bulk sampling exercises at its Shone Kimberlite processing plant.
The stones, the biggest of which weighed 1.8 carats, were recovered from 750 tonnes of processed material taken from the Shone kimberlite pipe at the company’s Carter Block between Kimberley and Postmasburg.
In a press statement, KCM CEO Hein le Riche said the early find confirmed results of analysis that showed that core samples of the Shone kimberlite were optimistic in terms of diamond bearing potential.
Le Riche said KCM anticipated generating a recovered grade estimate shortly.
Perhaps more important for shareholders than a few valuable stones, is the performance of the group’s “diamond producing’ Bo-Karoo mine in Northern Cape.
Cash flows from this mine are needed to fund mining and exploration efforts at KCM, which did not raise capital when it listed in May this year.
Reviewed results for the 11 months to end-February 2008 showed turnover at R40m wiped out by operating costs of R55m. At that point cash on hand was stated at R750,000 – which is awfully scant for a mining company undertaking a fair bit of exploratory activity.
What will also be fascinating to glean from the audited financial statements is further detail on KCM’s balance sheet – which in reviewed form showed goodwill of R30m and intangible assets of R73m.
The exact nature of these assets are fairly critical to determine, considering KCM’s current assets of R5m were dwarfed by current liabilities of R20.5m as at the end of February.
Le Riche told Miningmx that KCM’s audited statements would be published this Friday.
