METALLICA MINERALS LIMITED
MLM - Sale of Coal Subsidiaries Contributes to $10.5M Profit - Mr John Haley, Director and CFO
Mon, 29 Sep 2008 10:00AM
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Mr John Haley
Mon, 29 Sep 2008
10:00AM Australia/NSW
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METALLICA MINERALS LIMITED (MLM)
ASX code: MLM
Website: http://www.metallicaminerals.com.au
Industry: Materials
Principal Activities:
Mining exploration
Address:
, 1 Potts Street, Unit 3,
EAST BRISBANE
QLD
Phone: (07) 3891 9611
Fax: (07) 3891 9199
Executives & Directors
Mr David Barwick , Chairman
Mr Andrew Gillies , Managing Director
Mr Peter Bruce Nicholson , Director
Mr John Haley , Non Exec. Director
Mr John Haley , Company Secretary
Company Podcasts
Company ASX Announcements
Company ASX announcements can be viewed on the ASX website.
Announcements from the preceding six months are shown below.
Please refer to the relevant stock exchange if any of the above information is incorrect
METALLICA MINERALS LIMITED (MLM) Events
Australia/NSW
METALLICA MINERALS LIMITED (MLM)
| Appendix 3Y | Wed, 1 Jul 2009 |
| Appendix 3B and Listing Rule 3.4 notices after QOL bid close | Tue, 23 Jun 2009 |
| Response to ASX query | Mon, 22 Jun 2009 |
| Appendix 3X Mr Shu | Thu, 18 Jun 2009 |
| Appendix 3Z Mark Ashley | Thu, 18 Jun 2009 |
| Letter to Shareholders | Wed, 17 Jun 2009 |
| MLM - BRR Company presentation | Wed, 17 Jun 2009 |
| QOL: Letter to Shareholders | Wed, 17 Jun 2009 |
| MLM - Presentation Gold Coast Resources Showcase | Thu, 11 Jun 2009 |
| MLM increases holding in QOL to 70.92% | Wed, 10 Jun 2009 |
Please note: This company appears on this website as a result of its listing on the Australian Securities Exchange. Boardroom Radio does not claim any association with any company listed on this site.
INTERVIEW WITH MR. JOHN HALEY, DIRECTOR AND CHIEF FINANCIAL OFFICER OF METALLICA MINERALS LIMITED (MLM)
“Sale of Coal Subsidiaries Contributes to $10.5M Profit”
http://www.brr.com.au/event/51819
MONDAY, SEPTEMBER 29, 2008, 10:00 AM.
BRR Welcome to Boardroomradio. Today we’re joined by Mr. John Haley, Director and Chief Financial Officer of Metallica Minerals. Thanks for joining us today,
10 John.
MLM No problem.
BRR John, Metallica Minerals has released its financial result for 2008, could you give us a brief overview of some of the key aspects and highlights?
15 MLM Yes, undoubtedly the key highlights of the year’s results was the fact that we’ve actually reported an after tax profit of approximately $10.5 million. Now most people would be aware that its hardly unusual for an exploration and ore development company, and Metallica sees itself as more of a development company than an explorer, to ever report a profit prior to going into
20 production. So we see that as being slightly unusual and we think it’s a testament to the progress we’ve made over the last couple of years that we were able to achieve that result. The primary reason for being able to report that after-tax profit was the sale of two coal subsidiaries to Cockatoo Coal back in July 2007 and as most people would be aware, I hope from our ASX
25 announcements, we have since subsequently sold those Cockatoo shares realizing gross proceeds of $20 million. So that was undoubtedly the key highlight of the year.
Other smaller highlights, I guess, included raising of $1.5 million in seed
30 capital for our coal subsidiary, Metrocoal Limited. This has resulted in Metrocoal being now 84% approximately owned by Metallica but Metrocoal has its own funding now in place and is able to move forward independently of any funding being acquired from Metallica. The last other, I guess, is that we’ve continued to advance our nickel projects thru the feasibility study stage
35 and in addition, we’ve continued to progress the Cape Alumina Pisolite Hills Project and we’ve also continued to progress Cape Alumina Limited towards a possible public listing late in 2008 or early 2009.
BRR And John, you mentioned the good result with the after-tax profit of $10.5
40 million, can you give us a bit more detail about what the key contributing factors. What are these?
MLM The key contributing factor to being able to report an after-tax profit was the sale of two coal subsidiaries to Cockatoo Coal, a transaction consummated in July 2007. As I mentioned before, we received $5 million in cash and 25
45 million of Cockatoo shares as a result of that transaction. Those shares were escrowed for a year until July of 2008, at which point we took the opportunity to sell those shares at a price of $0.80 each which compares favourably to the current market price for Cockatoo Coal, and that effectively to me means that we have not only booked to profit on the result from the sale of the subsidiaries but we have actually converted that profit result into cold, hard cash which currently sits in our bank account. So that’s really the reason for the after-tax profit.
5 I should just add that we have provided for some tax on that transaction but due to the expenditure we’ll incur in the current year, we expect that some of that tax revision will be reversed and we will ….and obtain little or no tax on that transaction. So, we expect to have our reversals, as I said, on that tax revision in the current year.
10
BRR And lastly John, I had noted that in the financial result Metallica had approximately $7.5 million in cash at bank and as you’ve mentioned this position has been strengthened with a cash injection from the sale of Cockatoo Coal Limited shareholding in July to take it to approximately $23
15 million cash at bank. What are the plans for these funds?
MLM Okay. The plans for the funds at the moment, we are…based to the conserving our cash in a fairly difficult market, we will be expanding a couple of million dollars of those funds in completing the feasibility study on the NORNICO Nickel Project and that feasibility study is now slated to be
20 completed in early 2009. Apart from that we have no major expenditure commitments at this stage apart from obviously ongoing administration and a little bit of exploration and development. We have actually put $15 million of the funds received on a six-month term deposit which was clearly indicated. We have no plans to spend that money in the relatively short term. All the
25 funds, I might add, are on the deposit with big four Australian banks and Metallica has never placed any funds with any second rank institutions or any other parties.
We note that the cash on hand at the present time of approximately $23
30 million equates to approximately 21 cents per Metallica share. So, as I said, we’re opt really plan to do anything dramatic of those funds in the short term. The interest earnings alone on that $22 million are basically enough to cover our administration, expenditure, our listing fees and all the other costs that cannot….being a listed company. We will be spending, as I said, a few million
35 dollars on the completion of NORNICO Nickel Project, but apart from that Metrocoal is now separately funded as I’ve indicated in response to the earlier question. So we basically plan to hang on to those funds and if appropriate opportunities come up, we will investigate them but our primary focus remains on the development of NORNICO Nickel Project. We’re listing
40 Cape Alumina so that it is longer a loan on Metallica for any funding as it progresses its project, and the progression of Metrocoal, which again just to add, is now separately funded and should not require any further funding from Metallica.
45 BRR John, we thank you for taking your time out today to discuss the financial result and we look forward to speaking to Metallica in the future.
MLM No problem, Eddie. Thanks very much.
BRR That was John Haley, Director and Chief Financial Officer of Metallica Minerals, and if you have any questions about this broadcast or any other broadcast please feel free to contact us on brr@brr.com.au. I’m Eddie Saade and thank you for listening to Boardroomradio.
INTERVIEW CONCLUDED
Contact brr@brr.com.au for more information
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