Press releases

Wits Gold award

MDM Interim Financial Results

04 December 2013

MDM Engineering Group Limited (AIM: MDM), the minerals process and project management company focused on the mining industry, is pleased to announce its interim results for the six month period ended 30 September 2013.


  • Strong cash position of US$32.0 million (2012: US$20.1 million) with negligible gearing;
  • Revenue of US$53.6 million (2012: US$78.9 million);
  • Pre-tax profit of US$5.0 million (2012: US$8.1million);
  • Basic earnings per share of US8.70 cents per share (2012: US 15.94 cents);
  • Interim dividend of US4.35 cents per share (2012: US 8.00 cents);
  • Special dividend of US3.65 cents per share (2012: Nil) over and above the interim dividend;
  • Continued commitment to pay 50% of after-tax profits as a dividend to shareholders; and
  • Strong pipeline for continued growth at both feasibility and project levels.

 MDM's Chief Executive Officer, Mr. Martin Smith commented:
“I am very pleased that MDM has produced solid results for the six months ended 30 September 2013 despite the industry suffering a difficult year. We have a high-quality order book continuing through from FY2013 into FY2014 with large projects in execution, contributing to revenue and associated profits. The flagship project for MDM in FY2014 is African Barrick Gold’s (“ABG”) Bulyanhulu project in Tanzania which is due for completion in the first quarter 2014 calendar year.

During the first half of FY 2014, MDM saw a continuous demand for its services through multiple enquiries for study work and smaller brown-fields execution projects, with a high success rate in securing these opportunities. Our safety record remains a high priority for MDM and we are proud to have achieved a Lost Time Injury Frequency Rate of 0.15, well below the industry norm of 0.25”.

Financial Review
The gross profit margin for the first half is 19.9%, which is 4.1% lower than the gross profit margin of 24.0% for the full year ending 31 March 2013. MDM recorded a profit before tax of US$5.0 million for the first half of FY2014, which represents a 38% decrease from the comparable period’s profit before tax of US$8.1million. This decrease is primarily a result of cashflow from the Bulyanhulu project being timed to peak during the next half year, and the lower workload since 31 March 2013 following  the completion of the Tharisa 3.6 million tonne per annum (“Mtpa”) chrome and platinum project in FY2013.

The cash balance, since year end, has reduced by US$2.60 million to US$32.0 million, which is primarily associated with the movement of working capital between debtors and creditors and the full year 2013 dividend payment.

The MDM Board continues to believe that the Company has a robust business model, generates strong cash flow from operations and is well positioned with a growing project pipeline during the 2014 financial year. The MDM Board is pleased to declare an interim cash dividend of US 8.00 cents per share, which includes the special dividend of US 3.65 cents per share, payable on 22 January 2014 to all shareholders on the register on 13 December 2013. The interim dividend will have an ex-dividend date of 11 December 2013. The special dividend is as a result of MDM’s strong cash position and the anticipated increase in the forward project pipeline.

Detailed Operational Review

Highlights for the half year period ending September 2013:
In the first half of FY2014, MDM continued the execution of four projects secured in FY2013. These include the Bulyanhulu gold project for ABG in Tanzania, the Namoya gold project for Banro in the Democratic Republic of the Congo (“DRC”), the Kalagadi Umtu manganese project for Kalahari Resources in the Republic of South Africa and the DSF phosphate project for Foskor in South Africa. These projects are scheduled for completion in calendar year 2014.

MDM has also been successful in securing the execution of the GoGold Resources silver and gold tailings project in Parral, Mexico. Currently MDM has started the earthworks on site with most of the engineering and procurement underway. This project is very important for MDM as it demonstrates the Company’s capability outside of Africa. MDM expects, on completion of this project in 2014, to enter into more project negotiations in this region.

MDM has also completed studies which it anticipates will result in on-going work that may lead to early execution projects, including: the Gold One Sibanye West Rand Tailings Retreatment gold project and the BRPM Royal Bafokeng platinum project.

Outlook for the balance of FY2014:
The outlook for the second half of FY2014 is expected to be profitable and in-line with market expectations with some of the larger projects due for completion before year-end.
Further to those projects highlighted above, MDM is currently working on the following:

Anglo Gold Ashanti (“AGA”), completion of MWS Uranium Plant, South Africa
The AGA completion of the MWS Uranium Plant is the continuation of a project (built by MDM), which was suspended by First Uranium before it was sold to AGA. The project includes the de-mothballing and completion of the plant which was about 90% built in 2009. The plant is on-track for commissioning in 2013.

Harmony, Kalgold plant upgrade, South Africa
MDM is responsible for the engineering and procurement of the planned upgrade alongside the brown-fields modifications together with Harmony’s in-house construction teams, with the technical assistance from MDM.

Gold Fields International, Tarkwa CIL upgrade, Ghana
This project was originally one of the large projects targeted by MDM, but after completing the early design and initial earthworks on site in 2012, the project was suspended in the first quarter of 2013 due to the decline in the prevailing gold price. MDM, however, is currently working with the client on a reduced scale brown-fields plant modification to improve its throughput.

Early works on various execution projects
MDM has been successful in securing two further execution contracts with key clients for smaller expansion projects for existing facilities. These smaller expansion projects are approximately US$15 million in value.

Pre-Feasibility Studies (“PFS”) and Bankable Feasibility Studies (“BFS”):
MDM is involved in various studies which have the potential to develop into execution projects in the short to medium term. These studies include:

Gold One / Sibanye, West Rand Tailings Retreatment Project (“WRTRP”), South Africa
MDM completed the PFS in September 2013 to determine a viable strategy. The study concluded that the company should proceed in stages over the next few years to reclaim various historical tailings deposits in the most economical way and redeposit them into a new mega tailings dam. MDM continues to work with the client on this strategy.

Royal Bafokeng, BRPM 250 ktpm Merensky upgrade, South Africa
Located in the North West region of South Africa, this project involves upgrading an existing platinum processing plant to cater for an increase in throughput and capability to handle different ore reefs. Currently, a Definitive Feasibility Study (“DFS”) together with a PFS study will be undertaken with early brown-field execution work anticipated to commence in 2014.

Hummingbird Resources, Dugbe project, Liberia
MDM was appointed lead consultant for Hummingbird’s DFS and Front End Engineering and Design (“FEED”) in July 2013. The project is currently on track for completion by the end of 2014. MDM also managed to secure the project funding support from the Department of Trade and Industry (“DTI”) in South Africa.

Ivanhoe, Kipushi Rehabilitation and Re-development Project, DRC
MDM won the scoping study contract for Ivanhoe’s zinc project in August 2013. Currently metallurgical test work is taking place at Mintek and MDM anticipates proceeding to the next project phase in the near future.

Further studies

MDM continues to work on other smaller studies for potential projects located in the African region.

The current subdued commodities market and the weak gold price has resulted in a reduction of capital spending on new projects and rather optimising current operations. This means MDM will look to focus more on using its specialist know-how and experience to improve recoveries for clients on their existing facilities. MDM has a number of large projects in its pipeline, but its main focus for the short-to-medium-term will be on the smaller scale operations.

Click here for Financials (PDF)


MDM Engineering Group Limited

Martin Smith (CEO)
George Bennett (Executive Director)
Tel: +27 (0) 11 993 4300

Canaccord Genuity Limited
NOMAD and Broker

Neil Elliot
Chris Fincken
Joe Weaving
Tel: +44 (0)20 7523 8000

Tavistock Communications
Financial Public Relations and Investor

Emily Fenton
Jos Simson
Tel: +44 (0)20 7920 3150



Register for alerts

  • E-mail:
  • Remove me