TIDMWAD
RNS Number : 1048B
West African Diamonds PLC
21 October 2009
21st October 2009
West African Diamonds plc
Preliminary Results for Year Ended 30 April 2009
In a period of global economic turbulence, exacerbated by political instability,
it is pleasing to be able to report significant progress in the development of
West African Diamonds (WAD). Recent highlights include:
* The start up of our Bomboko alluvial diamond mine in Guinea and the subsequent
decision to expand capacity;
* Initial diamond production of 433 carats at a value of $116 per carat;
* A joint venture on our kimberlite pipe and dyke system in the Koidu area of
Sierra Leone. This ensures rapid exploration and development, if justified;
* An agreement with local management in Sierra Leone whereby they have taken over
ownership of the non-core mining lease over Plant 11 in Koidu. They are in the
process of reopening the diamond recovery plant. WAD has a 5% net royalty on
production; and
* A rapid recovery in diamond prices after a catastrophic fall in 2007/2008. The
price recovery is most notable in the size and quality range produced in West
Africa.
Recent political instability in Guinea is a concern and the company is keeping a
close eye on developments. WAD has managed to continue development of its
operations in the country, though with some delays as a consequence of
interruption to supply lines and a prolonged rainy season. Bringing Bomboko into
production has been a considerable achievement. Investors in natural resources
for the most part are aware that you must go to where the resources can be found
before you can mine them. Some resources are widely distributed around the
world. Others, diamonds in particular, are old, up to 2,500 million years, rare,
scarce and incredibly difficult to find. Diamonds, for the most part, are
brought to the surface in small volcanoes known as kimberlite pipes. The
worldwide map of these pipes is fairly well known. For over a century, De Beers
dominated the industry. During this time, they explored most parts of the world
and, with some exceptions, controlled the hard rock kimberlite mines. The
alternative to hardrock mining is alluvial mining.
Over millennia, erosion took diamonds from kimberlite pipes and distributed
them in gravel on river beds and ultimately on seabeds. This opened up a second
type of mining - alluvial mining, where dredges are used to recover the stones.
In addition to being hard to find, one source suggests that diamond prospecting
has a 1 in 2,500 chance of commercial success; diamonds vary in quality and
size. Most diamond mines produce mainly small stones, often valueless, but some
of which are of industrial and/or consumer value. The bigger better quality
stones grow exponentially in value.
Guinea and Sierra Leone produce very old beautiful high quality, sometimes very
large, diamonds. Most of the diamonds are recovered from alluvial workings. The
kimberlite pipes which originally brought the diamonds to the surface are
significantly eroded, leaving smaller roots.
The outline above explains why WAD is in West Africa. For decades, Sierra Leone
operated the largest alluvial diamond mine in the world in the Koidu region.
Former management of the state owned mine approached WAD with a proposal to
rework some of the dumps. This led to Mining Lease 104 in the Koidu region where
we set up a gold and diamond recovery operation on a 7 million ton dump. The
operation failed due in part to using a new technology and in part due to a
focus on recovering gold prior to recovering diamonds. With our concentration on
production at Bomboko this project has become non-core for the company.
I am therefore particularly pleased that our local management in Sierra Leone
have formed a company, Pyramid Resources, acquired from WAD the lease and the
diamond recovery plant and are reopening the project. This is good for the local
area, for our former employees who have jobs, the state who will get revenue and
exports, and for WAD who have a 5% production royalty.
The original focus of WAD in Sierra Leone was on the known kimberlite pipes and
dykes in Koidu. We acquired licences over Pipe 3, the smallest of the known
pipes and over an extensive swarm of kimberlite dykes - fissures up to 1 metre
wide thought to contain high diamond grades. We mapped over 14 kilometres of
dykes and confirmed high grades, up to 65 carats per hundred tonnes (cpht) of
good quality diamonds. A diamond recovery operation on Pipe 3 was initially
frustrated by poor plant design and loss of stones. When these problems were
solved, we obtained a grade of 19 cpht, valued at over US$200 a carat. The pipe
is very small but subsequent work extended the size. There is a hardrock mine
adjacent to Pipe 3. Koidu Holdings mines Pipes 1 and 2.
While evaluating options for Pipe 3, we received an approach from Thunderball
Limited - a consortium of foreign and local investors keen to develop a mine on
Pipe 3 and the dykes. We have transferred our entire interest in the area to
this company, who have committed to intensive exploration, evaluation and, if
justified, development. WAD has a 20% interest in the venture and is fully
carried through to commercial production.
The net result of these developments is that our Sierra Leone operations will
continue, and will develop, at no further cost to WAD.
The focus of operations is now Guinea. Independent geological estimates suggest
that our licences on the Bomboko contain at least 750,000 carats of diamonds.
Despite infrastructure challenges our management team in Guinea shifted plant
and equipment from both operations in Sierra Leone to our new Bomboko alluvial
mine.
During 2008 and the first part of 2009, the Bomboko mine was constructed. It
came on stream in June 2009. The current grade is as we expected, averaging 6.5
cpht at a value of US$116 a carat, including a 16 carat gem that sold for over
$1,000 per carat. This price has probably risen in recent months. Given the
encouraging results a decision was made to increase production by installing
additional processing plant, namely a 16 foot pan plant. Large excavators are
also in use. It is expected that the mine will reach full capacity by the end of
2009. Monthly carat production is expected to rise to in excess of 2,000 carats
per month, providing the company with robust revenue.
The second significant operation in Guinea is the Droujba area where WAD has a
licence over a series of small kimberlites. Using a rig, we have been drilling
shallow holes on this licence. Our hope was to see the small pipes coalesce into
one. We also wanted to check grade and diamond quality. The grade is high, we
estimate in excess of 100cpht, the quality is as expected but further drilling
and testing of the diamond grade is required to establish the economics of the
pipes.
In addition to the hard rock project, we have been sampling the rivers in the
area where there appears to be significant hard rock and alluvial diamond
potential.
Future
If the world has weathered the economic storm and is poised for growth then the
future for diamonds is very bright. In recent years, there has been almost no
exploration success, apart from the Botswana discovery by African Diamonds.
Mines deplete. Most analysts agree that there will be a supply deficit of gem
quality diamonds in the coming years.
This impending shortage is the opportunity for WAD. We are a producer of high
quality stones. We have known reserves, we are experienced in the industry, but
we are too small. Investors, particularly institutional investors, rarely invest
in small market capitalisation companies.
Therefore, the future strategy for WAD is to grow by mergers and acquisition,
while continuing to develop our own reserves. Toward that end, we were in
discussions with a number of other companies. These early discussions came to
nothing. However, discussions of this nature continue and I am hopeful that a
good result will come from these talks. If positive, it would be a step toward
building an independent gem quality diamond producer, founded and focussed in
developing high grade and high value diamond resources in West Africa.
JOHN TEELING
CHAIRMAN
21st October 2009
Enquiries:
+------------------------------------+-------------------------+
| West African Diamonds plc | |
+------------------------------------+-------------------------+
| John Teeling, Chairman | + 353 1 833 2833 |
+------------------------------------+-------------------------+
| James Campbell, Deputy Chairman | +27 83 457 3724 |
+------------------------------------+-------------------------+
| Astaire Securities plc | +44 (0)20 7448 4400 |
| Lindsay Mair | |
+------------------------------------+-------------------------+
| College Hill | +44 (0) 20 7457 2020 |
| Nick Elwes | |
+------------------------------------+-------------------------+
www.westafdiamonds.com
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 APRIL 2009
+-----------------------------------------+--------------+--------------+
| | 2009 | 2008 |
+-----------------------------------------+--------------+--------------+
| | GBP | GBP |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| Continuing operations | | |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| Administrative expenses | (247,442) | (228,325) |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| OPERATING LOSS | (247,442) | (228,325) |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| Finance costs | (2,558) | (2,159) |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| Investment income | 3,535 | 10,418 |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| LOSS BEFORE TAXATION | (246,465) | (220,066) |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| Income tax expense | - | - |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| LOSS AFTER TAXATION | | |
+-----------------------------------------+--------------+--------------+
| FOR THE FINANCIAL YEAR | (246,465) | (220,066) |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| Loss per share - basic | (0.48p) | (0.58p) |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| Loss per share - diluted | (0.48p) | (0.58p) |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
| | | |
+-----------------------------------------+--------------+--------------+
CONSOLIDATED BALANCE SHEET
AS AT 30 APRIL 2009
+----------------------------------+-----------+-------------+-------------+
| | | 2009 | 2008 |
+----------------------------------+-----------+-------------+-------------+
| | | GBP | GBP |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| ASSETS: | | | |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| NON CURRENT ASSETS | | | |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| Intangible assets | | 9,468,387 | 6,608,768 |
+----------------------------------+-----------+-------------+-------------+
| Property, plant and equipment | | 2,066,417 | 1,293,173 |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| | | 11,534,804 | 7,901,941 |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| CURRENT ASSETS | | | |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| Receivables | | 7,192 | 23,043 |
+----------------------------------+-----------+-------------+-------------+
| Cash and cash equivalents | | 242,472 | 78,758 |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| | | 249,664 | 101,801 |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| TOTAL ASSETS | | 11,784,468 | 8,003,742 |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| LIABILITIES: | | | |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| CURRENT LIABILITIES | | | |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| Trade and other payables | | (196,305) | (323,423) |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| NET CURRENT ASSETS/(LIABILITIES) | | 53,359 | (221,622) |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| NET ASSETS | | 11,588,163 | 7,680,319 |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| EQUITY: | | | |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| Called-up share capital | | 682,809 | 407,508 |
+----------------------------------+-----------+-------------+-------------+
| Share premium | | 9,630,785 | 7,768,467 |
+----------------------------------+-----------+-------------+-------------+
| Share based payment reserve | | 355,396 | 355,396 |
+----------------------------------+-----------+-------------+-------------+
| Retained earnings - (deficit) | | (1,097,517) | (851,052) |
+----------------------------------+-----------+-------------+-------------+
| Translation reserve | | 2,016,690 | - |
+----------------------------------+-----------+-------------+-------------+
| TOTAL EQUITY | | | |
+----------------------------------+-----------+-------------+-------------+
| | | 11,588,163 | 7,680,319 |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
| | | | |
+----------------------------------+-----------+-------------+-------------+
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2009
+--------+--------+------------+-----------+----------+-------------+-------------+------------+
| | Called-up | Share | Share | Retained | | |
| | | | Based | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| | Share | Premium | Payment | Earnings | Translation | Total |
| | Capital | | Reserve | (Deficit) | Reserve | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| | GBP | GBP | GBP | GBP | GBP | GBP |
| | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| At 1 May 2007 | 335,700 | 6,315,581 | 384,900 | (692,260) | - | 6,343,921 |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| Share based | - | - | 31,770 | - | - | 31,770 |
| payments | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| Shares Issued | 71,808 | 1,505,708 | (61,274) | 61,274 | - | 1,577,516 |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| Share issue | - | (52,822) | - | - | - | (52,822) |
| expenses | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| Loss for the | - | - | - | (220,066) | - | (220,066) |
| period | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| At 30 April | 407,508 | 7,768,467 | 355,396 | (851,052) | - | 7,680,319 |
| 2008 | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| Shares issued | 275,301 | 1,869,903 | - | - | - | 2,145,204 |
| for cash | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| Share issue | - | (7,585) | - | - | - | (7,585) |
| expenses | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| Exchange | - | - | - | - | 2,016,690 | 2,016,690 |
| differences | | | | | | |
| arising on | | | | | | |
| translation of | | | | | | |
| foreign | | | | | | |
| operations | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| Loss for the | - | - | - | (246,465) | - | (246,465) |
| year | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| At 30 April | 682,809 | 9,630,785 | 355,396 | (1,097,517) | 2,016,690 | 11,588,163 |
| 2009 | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| | | | | | | |
+-----------------+------------+-----------+----------+-------------+-------------+------------+
| | | | | | | |
+--------+--------+------------+-----------+----------+-------------+-------------+
| | | | | | | |
+--------+--------+------------+-----------+----------+-------------+-------------+
| | | | | | | |
+--------+--------+------------+-----------+----------+-------------+-------------+------------+
Share premium
The share premium comprises of the excess of monies received in respect of share
capital over the nominal value of shares issued, less share issue costs.
Share based payment reserve
The share based payment reserve represents the cumulative charge to the
Consolidated Income Statement and intangible assets, of share based payments
issued which are not yet exercised and issued as shares. Upon issue of shares
under the share based payment plan, the relevant value is transferred to
retained earnings.
Translation reserve
Exchange differences relating to the translation from the functional currencies
of the Group's foreign subsidiaries into Sterling, the reporting currency of the
Group, and are recognised directly in the translation reserve. The US$:STGGBP
exchange rate at 30 April 2008 was 1.98:1 compared to 1.42:1 at 30 April 2009
which accounts for the movement in the translation reserve in the current year.
Retained earnings deficit
Retained earnings comprises accumulated losses in the current year and prior
years.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 APRIL 2009
+-----------------------------------------------+-------------+-------------+
| | 2009 | 2008 |
+-----------------------------------------------+-------------+-------------+
| | GBP | GBP |
+-----------------------------------------------+-------------+-------------+
| CASH FLOW FROM OPERATING ACTIVITIES | | |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| Loss for the year | (246,465) | (220,066) |
+-----------------------------------------------+-------------+-------------+
| Exchange movements | (3,686) | (583) |
+-----------------------------------------------+-------------+-------------+
| Share based payments | - | 10,970 |
+-----------------------------------------------+-------------+-------------+
| Finance cost | 2,558 | 2,159 |
+-----------------------------------------------+-------------+-------------+
| Investment revenue | (3,535) | (10,418) |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| OPERATING CASH OUTFLOW BEFORE | | |
+-----------------------------------------------+-------------+-------------+
| MOVEMENTS IN WORKING CAPITAL | (251,128) | (217,938) |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| (Decrease)/increase in trade and other | (127,118) | 128,834 |
| payables | | |
+-----------------------------------------------+-------------+-------------+
| Decrease in trade and other receivables | 15,851 | 265,407 |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| CASH (USED IN)/GENERATED BY OPERATIONS | (362,395) | 176,303 |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| Finance costs | (2,558) | (2,159) |
+-----------------------------------------------+-------------+-------------+
| Investment revenue | 3,535 | 10,418 |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| NET CASH (USED IN)/GENERATED BY | | |
+-----------------------------------------------+-------------+-------------+
| OPERATING ACTIVITIES | (361,418) | 184,562 |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| CASH FLOWS FROM INVESTING ACTIVITIES | | |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| Payments for intangible assets | (1,335,113) | (1,526,924) |
+-----------------------------------------------+-------------+-------------+
| Payment for tangible assets | (281,060) | (654,215) |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| NET CASH USED IN INVESTING ACTIVITIES | (1,616,173) | (2,181,139) |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| CASH FLOW FROM FINANCING ACTIVITIES | | |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| Proceeds from issue of equity shares | 2,145,204 | 1,577,516 |
+-----------------------------------------------+-------------+-------------+
| Share issue costs | (7,585) | (52,822) |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| NET CASH GENERATED FROM FINANCING ACTIVITIES | 2,137,619 | 1,524,694 |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| NET INCREASE/(DECREASE) IN CASH | 160,028 | (471,883) |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| Cash and cash equivalents at beginning of the | 78,758 | 550,058 |
| financial year | | |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| Effect of exchange rate changes on cash held | | |
| in | | |
+-----------------------------------------------+-------------+-------------+
| foreign currencies | 3,686 | 583 |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
| Cash and cash equivalents at end of the | 242,472 | 78,758 |
| financial year | | |
+-----------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------+-------------+-------------+
NOTES
1. Accounting Policies
There were no changes in accounting policies from those set out in the Group's
Annual Report for the financial year ended 30 April 2009. The financial
statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) and IFRSs as adopted by the European Union.
2. Loss per Share
Basic earnings or loss per share is computed by dividing the profit or loss
after taxation for the year available to ordinary shareholders by sum of the
weighted average number of ordinary shares in issue and ranking for dividend
during the year. Diluted earnings or loss per share is computed by dividing the
profit or loss after taxation for the year 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 year.
The following table sets forth the computation for basic and diluted loss
per share (EPS):
+----------------------------------+---+------------------+------------------+
| | | 2009 | 2008 |
+----------------------------------+---+------------------+------------------+
| | | GBP | GBP |
+----------------------------------+---+------------------+------------------+
| Numerator | | | |
+----------------------------------+---+------------------+------------------+
| Numerator for basic EPS - | | (246,465) | (220,066) |
| retained loss | | | |
+----------------------------------+---+------------------+------------------+
| | | | |
+----------------------------------+---+------------------+------------------+
| | | Number | Number |
+----------------------------------+---+------------------+------------------+
| Denominator | | | |
+----------------------------------+---+------------------+------------------+
| Denominator for basic EPS and | | 52,147,985 | 38,102,064 |
| diluted EPS | | | |
+----------------------------------+---+------------------+------------------+
| | | | |
+----------------------------------+---+------------------+------------------+
| | | | |
+----------------------------------+---+------------------+------------------+
| Basic and diluted EPS | | (0.48p) | (0.58p) |
+----------------------------------+---+------------------+------------------+
| | | | |
+----------------------------------+---+------------------+------------------+
Basic and diluted loss per share is the same as the effect of the outstanding
share options is anti dilutive and is therefore excluded.
3. Intangible Assets
+-------------------------------------+-------------------+-------------------+
| | 2009 | 2008 |
+-------------------------------------+-------------------+-------------------+
| | GBP | GBP |
+-------------------------------------+-------------------+-------------------+
| Exploration and evaluation assets: | | |
+-------------------------------------+-------------------+-------------------+
| Cost: | | |
+-------------------------------------+-------------------+-------------------+
| Opening balance | 6,608,768 | 5,061,044 |
+-------------------------------------+-------------------+-------------------+
| Additions during the year | 1,335,113 | 1,547,724 |
+-------------------------------------+-------------------+-------------------+
| Net foreign exchange differences | 1,524,506 | - |
+-------------------------------------+-------------------+-------------------+
| | | |
+-------------------------------------+-------------------+-------------------+
| Closing balance | 9,468,387 | 6,608,768 |
+-------------------------------------+-------------------+-------------------+
| | | |
+-------------------------------------+-------------------+-------------------+
| | | |
+-------------------------------------+-------------------+-------------------+
| Net Carrying Amount | 9,468,387 | 6,608,768 |
+-------------------------------------+-------------------+-------------------+
| | | |
+-------------------------------------+-------------------+-------------------+
| | | |
+-------------------------------------+-------------------+-------------------+
| | 2009 | 2008 |
+-------------------------------------+-------------------+-------------------+
| | GBP | GBP |
+-------------------------------------+-------------------+-------------------+
| Segmental analysis | | |
+-------------------------------------+-------------------+-------------------+
| Sierra Leone | 6,873,890 | 4,961,317 |
+-------------------------------------+-------------------+-------------------+
| Guinea | 2,594,497 | 1,647,451 |
+-------------------------------------+-------------------+-------------------+
| | | |
+-------------------------------------+-------------------+-------------------+
| | 9,468,387 | 6,608,768 |
+-------------------------------------+-------------------+-------------------+
| | | |
+-------------------------------------+-------------------+-------------------+
Exploration and evaluation assets relate to expenditure incurred in diamond and
gold exploration and related expenditure in Sierra Leone and Guinea.
The directors are aware that by its nature there is an inherent uncertainty in
exploration and evaluation, and therefore inherent uncertainty in relation to
the carrying value of capitalised exploration and evaluation assets.
The realisation of these intangible assets is dependent on the successful
discovery and development of economic resources, and is subject to a number of
significant potential risks including;
* Price fluctuations;
* Uncertainties over development and operational costs;
* Political and legal risks, including arrangements with governments for licences,
profit sharing and taxation; and
* Funding requirements.
Should these prove unsuccessful the value included in the balance sheet would be
written off to the income statement.
Having reviewed the deferred exploration and evaluation expenditure at 30 April
2009, the directors are satisfied that the value of the intangible asset is not
less than carrying value.
Included above is an amount of GBPNil (2008: GBP20,800) of capitalised expenses
related to equity-settled share-based payment transactions during the year.
4. Property, Plant and Equipment
+---------------------------+------------+---------------+--------------+
| Group | | Assets in the | |
+---------------------------+------------+---------------+--------------+
| | | Course of | |
+---------------------------+------------+---------------+--------------+
| | Plant | Construction | |
+---------------------------+------------+---------------+--------------+
| | and | - Diamond | |
+---------------------------+------------+---------------+--------------+
| | Equipment | Interests | Total |
+---------------------------+------------+---------------+--------------+
| | GBP | GBP | GBP |
+---------------------------+------------+---------------+--------------+
| Cost: | | | |
+---------------------------+------------+---------------+--------------+
| At 1 May 2007 | 25,526 | 613,432 | 638,958 |
+---------------------------+------------+---------------+--------------+
| Additions during the year | 13,304 | 640,911 | 654,215 |
+---------------------------+------------+---------------+--------------+
| | | | |
+---------------------------+------------+---------------+--------------+
| At 30 April 2008 | 38,830 | 1,254,343 | 1,293,173 |
+---------------------------+------------+---------------+--------------+
| Additions during the year | - | 281,060 | 281,060 |
+---------------------------+------------+---------------+--------------+
| Net foreign exchange | - | 492,184 | 492,184 |
| differences | | | |
+---------------------------+------------+---------------+--------------+
| | | | |
+---------------------------+------------+---------------+--------------+
| At 30 April 2009 | 38,830 | 2,027,587 | 2,066,417 |
+---------------------------+------------+---------------+--------------+
| | | | |
+---------------------------+------------+---------------+--------------+
| Net Carrying Amount | | | |
+---------------------------+------------+---------------+--------------+
| At 30 April 2009 | 38,830 | 2,027,587 | 2,066,417 |
+---------------------------+------------+---------------+--------------+
| | | | |
+---------------------------+------------+---------------+--------------+
GBP2,027,587 relates to assets in the course of construction in Sierra Leone and
Guinea. The carrying value of the above assets is dependent on the successful
discovery and development of economic reserves, including the ability to raise
finance to develop future projects. Should this prove unsuccessful the value
included in the balance sheet would be written down to their net recoverable
value.
In the opinion of the directors, the carrying value is not less than its
recoverable amount. No depreciation has been charged in respect of these assets
as they are not in a condition necessary for them to be capable of operating in
the manner intended by management.
During the year assets amounting to GBP539,430 were transferred from Sierra
Leone to Guinea.
+---------------------------------------+---------------+--------------+
| Segmental analysis - Group | 2009 | 2008 |
+---------------------------------------+---------------+--------------+
| | GBP | GBP |
+---------------------------------------+---------------+--------------+
| | | |
+---------------------------------------+---------------+--------------+
| Sierra Leone | 923,354 | 1,254,343 |
+---------------------------------------+---------------+--------------+
| Guinea | 1,143,063 | 38,830 |
+---------------------------------------+---------------+--------------+
| | | |
+---------------------------------------+---------------+--------------+
| | 2,066,417 | 1,293,173 |
+---------------------------------------+---------------+--------------+
| | | |
+---------------------------------------+---------------+--------------+
| | | |
+---------------------------------------+---------------+--------------+
5. General Information
The financial information set out above does not constitute the Company's
financial statements for the year ended 30 April 2009. The financial information
for 2008 is derived from the financial statements for 2008 which have been
delivered to the Companies Registration Office. The auditors have reported on
2008 statements; their report was unqualified with an emphasis of matter in
respect of considering the adequacy of the disclosures made in the financial
statements concerning the valuation of intangible assets, tangible assets and
amounts due by group undertakings. The financial statements for 2009 will be
delivered to the Companies Registration Office following the Company's Annual
General Meeting.
A copy of the Company's Annual Report and Accounts for 2009 will be mailed to
all shareholders shortly and will also be available for collection from the
Company's registered office, 20 - 22 Bedford Row, London, WC1R 4JS. The Annual
Report may also be viewed at West African Diamonds plc's website at
www.westafdiamonds.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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