Platfields seeks cash as auditor flags riskComment on this story
Platfields was continuing to raise capital towards its Leeuwkop project in Limpopo, the exploration firm said on Friday as it released audited results for the year to February 2013.
The suspended platinum junior said it had recently entered into new negotiations after an international funder pulled out of talks last year amid fears of labour instability in the platinum belt.
“Platfields is continuing to raise capital and has been involved in negotiations since November 2012,” chief executive Bongani Mbindwane said.
Mbindwane said directors and employees of the group had resolved to forfeit their salaries for the period under review as part of the strategy to sustain itself during the “cash crisis”.
“These will be paid as and when cash adequacy is achieved by the group.”
Platfields posted a loss of 81c a share and a headline loss of 62c a share for the year to February 2013. On both measures, it had lost R1.44 in 2012.
Grant Thornton, the group’s auditor, issued an adverse audit opinion on the results and noted reportable irregularities.
Platfields said that due to the adverse audit opinion, the unaudited interim report for the next period would require review by the auditor, unless the JSE decided otherwise.
“Shareholders are advised that the JSE may consider the continued listing, suspension and possible subsequent termination of the listing of Platfields,” the company said.
“The board of Platfields is working towards resolving the matters which gave rise to the adverse opinion.”
According to the auditors, a loan from Majestic Silver Trading 222, stated at slightly over R32 million in the financial statements, was incorrectly classified as a non-current liability at the reporting date.
Platfields entered into an agreement with Majestic Silver Trading 222 to acquire the claim over Leeuwkop in January 2011 for a cash consideration of up to R40m.
In terms of International Financial Reporting Standards, Platfields did not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period, it said.
“The group and company defaulted on its repayment terms with respect to this loan at the reporting date and therefore the amount outstanding is payable on demand and must be recognised as a current liability,” Platfields quoted Grant Thornton as saying.
“This indicates the existence of a material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern and therefore it may not be able to realise its assets and discharge its liabilities in the normal course of business.”
The financial statements did not disclose this fact.
“Du to the fact that the group and company have cash constraints, the group and company may not be able to settle liabilities,” Platfields quoted the auditors as saying.