MMiranda Mineral Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/001940/06)
Share code: MMH
ISIN: ZAE000074019
(“Miranda” or “the Group” or “the Company”)

Reviewed Abridged Provisional Consolidated Financial Results for the year ended 31 August 2011

Highlights
Shareholder loan facility available of up to R40 million
New and independent board members, and CEO with mining skills

SALIENT FEATURES
Comprehensive review concluded on all major assets, namely: Rozynenbosch, Boschhoek, Uithoek and Sesikhona
The Board and Management team now focused on maintaining an improved governance structure
All governance and compliance issues identified through the review process being resolved
Management and Board assessing the re-capitalisation of the Company

ABRIDGED PROVISIONAL CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

ABRIDGED PROVISIONAL CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

PROVISIONAL CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

ABRIDGED PROVISIONAL CONSOLIDATED CASH FLOW STATEMENT

GROUP SEGMENTAL ANALYSIS
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision-maker in order to allocate resources to the segments and to assess their performance. The chief operating decision-maker has been identified as the Executive Committee that makes strategic decisions. The Group has identified its operating segments based on its main exploration divisions and aggregated them into coal, diamonds, gold, base metals and industrial minerals and other.
The Group discloses its operating segments according to the entity components regularly reviewed by the Executive Committee. The components comprise of exploration divisions.  These values have been reconciled to the abridged consolidated financial statements. The measures reported on by the Group are in accordance with the accounting policies adopted for preparing and presenting the abridged consolidated financial statements.
Segment operating expenses comprise all operating expenses of the different reportable segments and are either directly attributable to the reportable segment, or can be allocated to the reportable segment on a reasonable basis. The segment assets and liabilities comprise all assets and liabilities of the different segments that are employed by the reportable segments and are either directly attributable to the reportable segments, or can be allocated to the reportable segment on a reasonable basis. The segment assets and liabilities comprise all assets and liabilities of the different segments that are employed by the reportable segments and are either directly attributable to the reportable segments, or can be allocated to the reportable segment on a reasonable basis.

1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The abridged provisional consolidated financial statements were prepared under the supervision of Ms EM Johnson CA(SA).

The abridged provisional consolidated financial statements of the Groupare prepared on a historical cost basis except for certain financial instruments, at amortised cost or fair value, and the valuation of certain elements of property, plant and equipment. The abridged provisional consolidated financial statements have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (“IFRS”), the AC 500 standards as issued by the Accounting Practices Board and the information as required by IAS 34: Interim Financial Reporting, Listing Requirements of the JSE Limited, and the Companies Act of South Africa (Act 71 of 2008).

The principal accounting policies, which comply with IFRS, have been consistently applied in all material respects in the current and comparative years. All new interpretations and standards were assessed and adopted with no material impact. The financial results were restated as detailed in section 3.

2. AUDIT REPORT
The abridged provisional consolidated financial statements for the year have been reviewed by the Company’s independent auditors, Deloitte & Touche, whose modified review report is available for inspection at the Group’s registered address.

An application was made to put the Company under Business Rescue proceedings as defined in the Companies Act of South Africa. Although the Group’s total assets exceed the total liabilities, the Group’s current liabilities exceed the current assets. Loan funding will mature in January 2012 unless converted to ordinary shares, and although the Company hopes to conclude a rights offer which will address the Group’s cash flow requirements, the outcome of such rights issue is unpredictable as it could be influenced by the outcome of the Business Rescue application and the decisions of shareholders.

The outcome of the Business Rescue application and unpredictability of the outcome of the planned rights issue could impact severely on the Group’s ability to obtain funding for its planned operations and its ability to service its debt.

These events indicate material uncertainties which may cast significant doubt on the Group’s ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business.

In addition, the Company’s directors are in the process to assess all non-current assets of the Group for impairment. This is a lengthy exercise and was not complete at the date of this announcement. The auditors were thus unable to satisfy themselves concerning the recoverable amounts  which are stated in the abridged consolidated statement of financial position at 31 August 2011.

Because of the significance of the matters described above, the auditors were unable to obtain sufficient appropriate evidence in order to express a conclusion on the abridged financial statements. Accordingly, they disclaimed from expressing a conclusion.

3. FINANCIAL REVIEW
The abridged financial statements of the Group have been restated for prior years to reflect the derecognition of the Rozynenbosch asset from the Group’s intangible assets (as discussed in paragraph 6.2). This has had the effect of reducing the net asset value of the Company by approximately R284.5 million in every year up to and including the 2010 financial year.
As at 31 August 2011, the net asset value and net tangible asset value of the Group amounted to R39.1 million and -R17.0 million, respectively (restated 2010: R68.8 million and R13.7 million). This was equivalent to 13.7 cents per share (cps) and -6.0 cps (restated 2010: 24.2 cps and 4.8 cps).
With no projects yet in production, the Group showed no revenue for the year (2010: Rnil). Operating expenses amounted to R27.9 million (2010: R17.6 million). The increase in operating expenses was mainly due to litigation cost (R3.2 million), capital raising cost (R2.5 million), and listing and compliance costs (R3.1 million).The resultant net loss and headline loss for the year increased to R27.5 million and R27.4 million, respectively (2010: R16.7 million and R16.7 million), equivalent to a loss and headline loss of 9.7 cps and 9.6 cps (2010: loss of 6.7 cps and 6.7 cps).
These results are consistent with management’s review and re-assessment of the assets of the Group during the period under review and with its focus on developing the Group’s worthwhile coal project portfolio.

The Group has negotiated loan funding facilities amounting to R40 million from its two largest shareholders, Global PS Mining Investments Company Limited (“Global PS”) (R32.5 million) and Yakani Resources Proprietary Limited (“Yakani”) (R7.5 million). The loan facilities are in the form of unsecured convertible loans, which bear interest at prime and mature in January 2012.  In accordance with the terms of the loan funding facilities, agreed upon after the end of the financial year, the loans can either be repaid in cash or converted into equity of Miranda. Any conversion of the loans to equity is subject to the Company obtaining all shareholder and regulatory approvals required to implement the conversion. The Board has approved a long-term financing plan in the form of a capital raising by way of a rights issue to all shareholders, which is anticipated to be effected in the foreseeable future. Further details on the rights issue to shareholders will be announced in due course.

3.1 Contingent liabilities
Management applies its judgement to the probabilities and advice it receives from its attorneys, advocates and other advisers in assessing if an obligation is probable, more likely than not or remote. This judgement application is used to determine if the obligation is recognised as a liability or disclosed as a contingent liability.
At year end the Company had the following major contingent liabilities:
1.Bank guarantees – R1,5 million
2.Claim for fees in respect of services rendered by Mr RJ Nel -
R0.2 million
3.SARS – PAYE investigation still ongoing – maximum R4.7 million
4.Stefanutti Stocks Mining Services – R70 million  (see paragraph 8.2)
5.Labour related claims – R0.3 million

The Company is defending all the matters listed above, and do not expect that any material liability will arise from the above contingencies.

4. SUSTAINABILITY AND TRANSFORMATION
Miranda has of late been entangled in legal dispute with the Department of Mineral Resources (“DMR”).  The board has resolved to follow an amicable resolution process and to repair the relationship with the DMR. The board believes a normal business relationship with the DMR is essential in ensuring sustainable growth in the asset portfolio of Miranda.

Miranda believes that sustainability requires a multi-faceted commitment, which extends from business practices, incorporates involvement with communities affected by mining operations and continues after mining operations have ceased.

5. BOARD OF DIRECTORS
The following changes occurred to the Board during the year under review:
Directors appointed during the year –
-Gilbert Phalafala (appointed 15 December 2010), non-executive director
-Daniel Lian (appointed 15 December 2010 ), non-executive director
-Parawut Kobboon (appointed 15 December 2010), non-executive director
-Moses Tshitangano (appointed 08 February 2011), non-executive director
-Pine Pienaar (appointed 18 July 2011), independent non-executive director
-Clive Knobbs (appointed 18 July 2011), independent non-executive director
-Andrew Johnson (appointed 01 August 2011), CEO
-Esther Johnson (appointed 02 September 2011), Financial Director

Directors resigning, retiring or suspended during the year –
-GW Poff (appointed 15 December), resigned 01 August 2011
-MD Cook (appointed 17 January 2008), resigned 01 August 2011
-AR Thompson (appointed 1 Jul 2007), retired by rotation and was not re-elected at the last Annual General Meeting of the Company
-AM Botha (appointed 15 May 2009), retired by rotation and was not re-elected at the last Annual General Meeting of the Company
-RJ Nel (appointed 7 December 2005), was suspended (please refer to paragraph 8.1).

6. OPERATIONAL REVIEW
6.1 Coal Division
During the period under review, Miranda Coal increased its stake in the following projects:

Management has embarked on a process of reviewing and re-assessing Miranda’s coal asset portfolio.

During the financial year, Venmyn Rand (Pty) Limited (‘’Venmyn”) was requested to update its independent SAMREC-compliant Resource Statements as well as SAMVAL-compliant Valuations of the six most advanced Mining and Prospecting Right areas. The SAMVAL-compliant valuations below are indicative only and have not been incorporated in the financial statements of the Group:

* The asset has been removed as Miranda does not own the asset.

A summary of the adjusted Resource Statements are given underneath (all resources and reserves stated in million tonnes (mt)):

Venmyn hereby confirms that it is an independent registered Competent Person/Valuator and have reviewed and approved this release. Information concerning all the above-mentioned coal projects is compliant with the Samrec and Samval Code.

SESIKHONA
In 2010, Venmyn estimated a resource of 4.4 mt in situ applying geological losses of 15% and a seam thickness cut-off of 0.5m. The resource was classed to be in the measured category. This valuation was based on a reserve and mine plan prepared by Stefanutti Stocks Mining Services, a division of Stefanutti Stocks (Pty) Limited (“SSMS”), as at June 2010. The valuation result was that the fair value of the Sesikhona project was R120.8 million with total saleable tonnes of 3.6 million tonnes. Miranda Coal's attributable value in the Sesikhona prospect was therefore R88.2 million, and the anticipated life of mine ("LOM") for the Sesikhona project was estimated at five years.

In 2011, the Board requested that Venmyn conduct an updated indicative and independent mineral asset valuation on the Sesikhona project. Venmyn has now estimated a resource of 2.8 mt (saleable: 2.6mt; previously: 3.6 mt saleable) and the resource is classified in the measured category. Due to a 25% lower assumed coal price and the reduced resource estimate, the fair value of the Sesikhona project is now R50.1 million. Miranda Coal’s attributable value has reduced to R36.6 million, and the anticipated LOM for the project is four years.

Miranda has capitalised the cost relevant to the Sesikhona asset in the Company’s statement of financial position. The adverse downward revision in terms of resources and valuation had not previously taken into account the mined out areas at Sesikhona; and now reflects the latest information made available to the Board by Venmyn. The Board is evaluating all options available to the Company on how best to optimally realise the current attributable value of the asset.

UITHOEK
Shareholders were previously advised that Miranda had received notification of the termination of a joint-venture and compensation access agreement in place with the Simpson family, regarding the Uithoek property. The mining rights have never been owned by Miranda and, therefore, in order for the Company to ensure tenure, a section 11 transfer in terms of the MPRDA should have been effected. In anticipation of the ceding of the prospecting right and/ or mining right to Miranda, the Company had previously made good faith monthly royalty payments to the Simpson family, which were supposed to be set-off against future royalties payable on mining. The Board is seeking legal advice on how best to proceed and therefore reserves its rights in this regard.

BOSCHHOEK
Shareholders have been advised that the Boschhoek Prospecting Right that was awarded to Applewood Trading 3 (Pty) Limited (“Applewood”), which is a 72%-owned subsidiary of Miranda Coal, is being challenged by the Minister of Defence. The Minister of Defence is seeking relief to interdict Applewood from proceeding with any prospecting activities and to have the DMR award of the Prospecting Right to Applewood, reviewed. It is uncertain whether Miranda will successfully defend the prospecting right and the Board has resolved to enter into direct negotiations with the Ministry of Defence in an attempt to settle the dispute.

6.2 Other Divisions
The review and re-assessment of the Group’s assets is still in progress and will extend to non-coal divisions. The following actions were undertaken during the period under review:
-Due to unsatisfactory exploration results, the Board decided to exit and/or abandon the Group’s two diamond assets in Botswana, namely the Jwaneng joint venture and the Mochudi project.
-The decision was also taken to end Miranda’s participation in the Tete gold dredging project in Mozambique.

ROZYNENBOSCH
On 6 October 2011 shareholders were informed that the Board had obtained material information regarding the Company's Prospecting Right for its Rozynenbosch lead, silver and zinc deposit located in the Northern Cape Province of South Africa. The original application for the conversion of the old order Prospecting Right was submitted on 28 April 2005 before Miranda listed on the JSE Limited on 19 December 2005. The DMR has informed the Company that the application was refused as far back as 5 July 2006.
In a letter sent by the DMR on 19 October 2011, the DMR unequivocally confirmed to the Company that it had previously advised the Company and its attorneys on numerous occasions that the appeal against the refusal of the Prospecting Right was finalised on 26 March 2007 and was unsuccessful, and that the appeal file was closed accordingly.
It was stated in the 2010 Annual Report that the asset could be impaired in the event of the Prospecting Right not being granted to Miranda. The Board has resolved to derecognise the Rozynenbosch intangible asset on its statement of financial performance with effect from the 2007 financial year.

7. GROUP PROSPECTS
The Board is not satisfied with the manner in which the Group has unavoidably applied its cash resources to defend litigations as opposed to developing the assets during a time when the financial market participants have remained mostly unaccommodating towards junior mining and exploration companies’ capital requirements.  The loan funding commitment from Global PS and Yakani is evidence of the support enjoyed by the Board for the continued assessment and expeditious development of Miranda’s asset base. If the implementation of the planned funding program (primarily the planned rights issue) succeeds, the Board believes that the Company will have sufficient funds to successfully continue trading in the normal course of business for at least the next 12-months.
The Board looks forward to achieving steady progress in 2012 towards achieving its set goals of stabilising its coal project pipeline.

8. LITIGATION STATEMENT
8.1 Business Rescue Application
Mr RJ Nel had served an application on Miranda in terms of which he, in his capacity as a shareholder and alleged creditor of Miranda, has made application to the North Gauteng High Court, Pretoria (the Court) in terms of Section 131 of the Companies Act to place Miranda under supervision and to commence business rescue proceedings (Business Rescue Application). The parties are still in the process of exchanging affidavits and have not as yet approached the Judge President for a court hearing date. The Board believes the application is not in the best interest of the Company or its stakeholders, and the Company will therefore vigorously defend the Business Rescue Application. Shareholders will be advised as soon as further information concerning the Business Rescue Application comes to the Company’s attention.

8.2 Mining Dispute
As was previously reported, Stefanutti Stocks Mining Services were engaged as subcontractors to mine the Sesikhona asset. During September 2010, mining activity was halted due to a mining dispute that arose, and the parties have referred the matter for arbitration. The pre-arbitration meeting was held on 3 November 2011, and the arbitration hearing has been set for 16 April 2012. Shareholders will be updated as soon as new information comes to light. SSMS claims an amount of R70 million, but the Company has a counterclaim.

8.3 Other Disputes
Shareholders are referred to the comments in the operational review pertaining to Uithoek and Boschhoek.
In addition, the Company is currently defending the following actions which it believes are without merit:
-A claim of R2.8 million for alleged commissions on the cancelled clawback. 
-Action by Mr RJ Nel as explained in paragraph 3.1.
-A claim by Investment Facility Company 44 (Pty) Limited (“IFC”) for management fees.
-The Prospecting Right that was awarded to Applewood Trading 3 (Pty) Limited (“Applewood”) is being challenged by the Minister of Defence. See paragraph 6.1 for further detail.

9. STATEMENT ON GOING CONCERN
The abridged financial statements have been prepared on the going-concern basis since the Directors believe that the Group will continue as a going concern. However, the matters referred to above and in paragraphs 2 and 3 may cast significant doubt on the Group’s ability to continue as a going concern and therefore the Group may not be able to realise its assets and discharge its liabilities in the normal course of business. The Board is committed to doing everything in its power to address the stated matters.
Miranda's main objective is that of exploration of mineral resources and to take up the worthwhile mineral resources up the value curve through further development. Following the review of assets which revealed lower scale assets, Miranda is clearly still at an initial exploration phase of its assets development. It is still dependent on shareholder funding until its assets are brought into production and start generating revenue and residual cash flow.
The ability of Miranda to continue as a going concern is dependent on the following factors:
1. Various litigation matters against the Group being successfully defended.
2. The Rights issue being successfully implemented. The low share price necessitates that the Company increase its authorised share capital in order to ensure a meaningful capital raising. The availability of additional shares and the related successful rights offer are subject to the shareholders' approval and shareholders participating respectively. It is uncertain whether the shareholders who are currently providing financial support through bridging loans will waive the conditions to the loans or terminate the funding following a breach of the loan terms (refer paragraph 3).
3. The Business rescue application being set aside. The Company currently enjoys the financial support from its two major shareholders through the approved loan facilities. The placing of the business under a business rescue practitioner will constitute a material adverse event and breach of the material conditions of the respective shareholders' loans.

10. DIVIDENDS
No dividends were recommended or declared for the financial year under review (2010: nil).
Approved for and on behalf of the Board on 29 November 2011

LP Mokhobo      A Johnson                   E Johnson
Chairman        Chief Executive Officer     Financial Director
30 November 2011
Centurion
CORPORATE INFORMATION: www.mirandaminerals.com

Company registered office:
Ground Floor, Pecanwood Building, The Greens Office Park, Charles de Gaulle Crescent, Highveld Techno Park, Centurion
Company Postal Address:
PO Box 9215, Centurion, 0046
Company Contact Numbers:
Telephone: 012 665 4200
Fax: 012 665 4258
Email: info@mirandaminerals.com

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