Petmin's financial strength could allow the coal and silica mining firm to make acquisitions worth more than R235 million, chief operating officer Bradley Doig said on Monday.
Doig said the prices of mining assets were looking more realistic and Petmin would be on the prowl for "good value" in the prevailing market.
The company ended December 2008 with cash holdings of R75 million, from R67 million at the end of December 2007.
The group has unused debt facilities of R160 million.
Doig said Petmin was looking to buy mining assets that were cash producing or projects that could be producing within 18 months.
Petmin was looking at assets in bulk commodities or industrial minerals. Doig said it could issue shares to help fund any acquisition.
Dark Capital, Petmin's key empowerment shareholder, increased its stake in Petmin by acquiring seven million of the company's shares after exercising share options in October.
Doig said Dark Capital now owned about 30 percent.
In the six months to December 2008 Petmin's revenue increased 54 percent to R490 million while gross profit increased 69 percent to R115 million.
Profit attributable to Petmin equity holders fell 12 percent to R81.5 million, however. Cash from operating activities rose 81 percent to R165 million.
Petmin's anthracite sales added 14 percent to 85 795 tons. Profit from the anthracite division increased 70 percent despite an impairment charge of R14.7 million.
Capital spending was R170 million in the six months to December 2008. This included R106 million on exploration and the removal of waste material from the Somkhele open pits, R18 million on the construction of the destoning plant and workshops at Somkhele and R42 million on plant, equipment and additional projects.
Planned capital spending in the six months to June 2009 was expected to be R30 million, the group said.
SamQuarz, the biggest producer of high-quality silica in South Africa, increased production by 32 percent in the half-year. Revenue at SamQuarz rose 47 percent to R101 million due to improved prices and higher sales volumes to the construction sector.
Petmin said the economic downturn had a severe impact on the metallurgical sector and the company forecast that its sales to this sector would be affected at both its silica and anthracite divisions.
© 2009 Petmin Limited