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Quarterley Report and cash flow report for period ended 30 June 2012
Ferrum Crescent Limited
(Previously Washington Resources Limited)
(Incorporated and registered in Australia and registered as an external company in the Republic of South Africa)
(Registration number A.C.N. 097 532 137)
(External company registration number 2011/116305/10)
Share code on the ASX: FCR
Share code on AIM: FCR
Share code on the JSE: FCR ISIN: AU000000WRL8
(“Ferrum Crescent” or “the company” or “the group”)
Quarterly Activities and Cashflow Report
For the period ended 30 June 2012
Ferrum Crescent Limited, the ASX, AIM and JSE quoted iron ore developer in Northern South Africa,
today announces its quarterly results for the three month period ending 30 June 2012.
HIGHLIGHTS:
Moonlight Iron Ore Project:
- New JORC compliant resource at Moonlight Iron Ore Project of 307.8 million tonnes @
26.9% Fe
- Inferred category of 172.1 Mt @ 25.3% Fe, Indicated of 83.0 Mt @ 27.4% Fe,
Measured of 52.6 Mt @ 31.3% Fe
- Substantial increase in the confidence and classification of the Mineral Resource
- The Mineral Corporation has also identified several prospective targets south, east and west
of the Moonlight Deposit
- Mining right covering the farms “Moonlight”, “Julietta” and “Gouda Fontein” granted
- Aeromagnetic survey over the Julietta and Gouda Fontein farms consisting of 2,827 line km
on 50m line spacing completed in June 2012 and currently being analysed by The Mineral
Corporation
- Discussions to confirm logistical solutions (rail, power, water and port services) required for
progressing detailed feasibility study continuing
Corporate:
- Cash as at 30 June 2012 is approximately A$3.4m
Moonlight Iron Ore Project
As announced in the Company’s quarterly report for the period ended 31 March 2012, The Mineral
Corporation was commissioned by Ferrum Crescent to carry out an updated JORC compliant Mineral
Resource estimate taking into account the results of the Phase 3 drilling and assays on the Moonlight
deposit (“the Report”). Phase 3 consisted of 11 holes totalling 990m of diamond core drilling and 13
holes totalling 1,600m of RC drilling.
The Mineral Corporation has conducted a thorough re-interpretation of the geological structure of
Moonlight, based on historical South African Iron and Steel Industrial Corporation (“Iscor”) data
collated and validated by Ferrum Crescent and recent exploration results. Within the constraints of a
cut off grade of 16% iron, geological losses of 5% and a depth constraint of between 100m and
250m, depending upon dip and the number of mineralised zones present, the Mineral Resources at
Moonlight are now estimated to be as follows:
Category Gross Net (attributable to Ferrum Crescent at
81.4%)
Tonne Fe (%) SiO2 (%) Al2O3 Contained Tonne Fe (%) SiO2 (%) Al2O3 Contained
(Mt) (%) Metal (Mt) (%) Metal (Mt)
(Mt)
Inferred 172.1 25.3 51.2 4.8 43.5 140.1 25.3 51.2 4.8 35.4
Indicated 83.0 27.4 50.1 4.0 22.7 67.6 27.4 50.1 4.0 18.5
Measured 52.6 31.3 47.3 2.5 16.5 42.8 31.3 47.3 2.5 13.4
Total 307.8 26.9 50.3 4.2 82.8 250.5 26.9 50.3 4.2 67.4
Tonnes are rounded
Note: Ferrum Crescent is the operator and owns 81.4% of the Moonlight Project
Based on these results, the Board believes that whilst the total average Fe grade has decreased
slightly (previously estimated to be a JORC compliant resource of 74Mt @ 33% Fe in the Indicated
Resource category and 225Mt @ 29% Fe in the Inferred Resource category), the tonnage has
increased proportionately along with a substantial increase in the confidence and classification of
the Mineral Resource. Furthermore, the Board is of the opinion that the depth constraint of 250m
(maximum) is conservative, particularly as the previous estimation was not constrained in this way.
The revised structural interpretation presented by The Mineral Corporation has also identified
several targets south, east and west of the Moonlight Deposit, which the Company believes warrants
additional exploration by the commissioning of a high-resolution airborne magnetic survey and
drilling. Given that the size of resource is sufficient for in excess of 20 years, management attention
is primarily focused on finding definitive answers to logistical questions rather than on continued
exploration. A summary of the estimate parameters is appended.
Mining Right Application
During the quarter, the Company announced the grant of its new order mining right in respect of the
Moonlight Iron Ore Project for the iron ore deposit located within the farms Moonlight, Julietta and
Gouda Fontein. The Company received written confirmation from the South African Department of
Mineral Resources of the grant of the new order mining right in terms of the Minerals and
Petroleum Resources Development Act 28 of 2002, effective for a term of thirty years.
The grant of the Moonlight mining right represents the fulfilment of one of the principal conditions
precedent to the completion of the Company’s BEE transaction by completion of the “flip”. The flip
is the process whereby the interest of Mkhombi AmaMato (Pty) Ltd, the BEE controlled company
that holds an effective 15.6% interest of the Moonlight Iron Ore Project through its indirect
shareholding in Turquoise Moon Trading 157 (Pty) Ltd (holds the Moonlight Project), will effectively
swap that project interest for shares in Ferrum Crescent. The other substantive conditions
precedent to the completion of the flip is Ferrum Crescent shareholder approval, and the Company
plans to hold a shareholders’ meeting for this purpose on 8th August 2012 (please refer to the
Company’s Notice of General Meeting of Shareholders announcement on 6th July 2012 for further
detail). Ferrum Crescent currently owns 81.4% of the Moonlight Project and at the completion of
the flip, will hold an effective 97% of Moonlight, with the remaining 3% being held by a trust
representing the local community that will be directly affected by Moonlight mining activities.
Aeromagnetic Survey
Following the end of the reporting period, the Company announced the completion of an
aeromagnetic survey over the Julietta and Gouda Fontein farms of its Moonlight Iron Ore Project.
The survey consisted of 2,827 line kilometres on 50m line spacing over an area of 129 km2 with all
data currently being analysed by the Company’s independent geological consultants The Mineral
Corporation Consultancy (Pty) Limited. The Company, having had a close involvement in the
coordination of the survey, is confident that the results of this survey will greatly assist in the
planning of future exploration on the area covered by the Mining Right and in future mining
operations.
The Company has announced previously that it advanced plans to implement a drilling programme
on the farms Julietta and Gouda Fontein (which are covered by the granted Mining Right, along with
the farm Moonlight) to increase the total resource estimate on the Moonlight Iron Ore Project. The
Company has now determined, given that it has sufficient resources on the Moonlight farm to
support mining for in excess of 20 years (for which the Group has an existing Mining Right and
associated mining environmental approvals), that management attention is best focused at this time
on obtaining definitive answers to logistical questions including rail, power, water and port services
to achieve the optimal infrastructure mix for the definitive feasibility study. The Company continues
to have discussions with Transnet and other infrastructure providers and industry peers to ensure
that these answers are obtained as soon as possible.
In respect of the De Loskop prospect, Ferrum Crescent continues to work with local communities to
enable those communities to obtain a preferential prospecting right under the Mineral and
Petroleum Resources Development Act. Upon the grant of a prospecting right, the Group would be
able to “farm into” that area (up to an agreed majority percentage) by carrying out of prospecting
activities. No such prospecting activities are currently planned.
For further information, please visit www.ferrumcrescent.com or contact:
Australia and Company enquiries: UK enquiries:
Ferrum Crescent Limited Ocean Equities Limited (Broker)
Guy Wilkes T: +44 (0) 20 7786 4370
Ed Nealon T: +61 8 9380 9653
Executive Chairman RFC Ambrian Limited (Nominated Adviser)
Richard Morrison T: +44 (0) 20 3440 6800
Bob Hair T: +61 414 926 302 Jen Boorer T: +44 (0) 20 3440 6800
Managing Director
Newgate Threadneedle (Financial PR)
Graham Herring/Beth Harris T: +44 (0) 20 7653 9850
South Africa enquiries: Sasfin Capital
Leonard Eiser T: +27 11 809 7500
Competent Persons’ Statement:
The information that relates to Exploration Results and Mineral Resources in the report of which this statement
is a summary, is based on information compiled by Stewart Nupen, who is registered with the South African
Council for Natural Scientific Professionals (Reg. No. 400174/07) and is a member of the Geological Society of
South Africa. Mr Nupen is employed by The Mineral Corporation, which provides technical advisory services to
the mining and minerals industry. Mr Nupen has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as
a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Mr Nupen consents to the inclusion in the report of the matters
based on his information in the form and context in which it appears.
Appendix I: Mineral Resource estimation details
Drilling Technique
Drilling data from Iscor and three phases of Ferrum Crescent exploration inform the estimates. The drilling
comprised open hole, RC and diamond core drilling and was all vertical. A total of 122 RC holes and 89
diamond core holes were accepted for the estimates.
Sampling Technique
Limited information on the sampling techniques for the Iscor data is known. For the Ferrum Crescent
exploration, industry standard sampling techniques were adopted. RC samples (1m-2m) were riffle split on site
and diamond core samples were halved with a diamond saw. Primary samples and quality control samples
were submitted for analysis to Genalysis Laboratory Services (Johannesburg) for analysis by Intertek Utama
Services (Jakarta).
Drill Sample Recovery
Limited information on the sample recovery for the Iscor data is known. With the exception of surficial rubble,
the sample recovery through the mineralised zones for the Ferrum Crescent exploration was acceptable.
Geological Logging
The Iscor data included electronic codes for the main lithological unit, certain sub-units, and the core bedding
angles. All geological information during Ferrum Crescent exploration was logged in acceptable detail, and
stored in an MS Access database. This included lithological, structural and geotechnical information.
Quality of Assay Data / QAQC
No information on the quality of assay data for the Iscor data was obtained. The Ferrum Crescent samples
were analysed at an accredited laboratory (Genalysis / Intertek), and appropriate standards, blanks and
duplicates inserted in the sample stream. The Mineral Corporation has reviewed the results from these control
samples and considers the accuracy and reliability of the analyses to be acceptable.
Verification of sampling and assaying
The Iscor data was verified by means of the identification and re-surveying of borehole collars in the field, and
by means of twin-drilling. On the basis of the twinning, the open-hole data from Iscor (142 holes) was
considered unacceptable for Mineral Resource estimation. The remaining RC and diamond core drilling
showed reasonably good correlation of mineralisation depth and abundance, and was considered acceptable.
Surveying
All Ferrum Crescent boreholes were surveyed by a registered surveyor. Of the Iscor holes, 127 collars were re-
surveyed by a registered surveyor, and good correlation between the historical and Ferrum Crescent survey
locations were found.
Auditing
No audits of the Iscor exploration results, with the exception of the verification described above have been
undertaken. The Mineral Corporation reviewed the results of the first two phases of Ferrum Crescent’s drilling
prior to carrying out the estimates. Phase 3 of Ferrum Crescent’s exploration was carried out by The Mineral
Corporation.
Database Integrity
The compiled database for the estimates was housed in an MS Access database. In addition to the verification
and QA/QC already described, validation of the sampling data for over-lapping sampling intervals, duplicate
samples and spurious data was carried out.
Geological Interpretation
A thorough re-interpretation of the geological structure, and correlation between mineralised zones was
carried out. Magnetite is interpreted to be hosted in four zones (Zone A to D), which have been subjected to
folding, parallel to the regional (Limpopo Mobile Belt) orientation. Younger faulting, oriented parallel to and
orthogonal to this trend are interpreted. The geological interpretation is considered appropriate for the level
of estimates, and the Mineral Resource classification takes the confidence in the interpretation into account.
Dimensions
D Zone is approximately 200m x 400m x 30m
C Zone (West) is approximately 1400m x 250m x 35m
C Zone (East) is approximately 1100m x 700m x 30m
B Zone is approximately 1500m x 800m x 25m
A Zone is approximately 1600m x 1200m x 17m
Geological Modelling
Wireframes representing the geological interpretation were generated to constrain the block model.
Drillhole Compositing Procedures
5m vertical borehole composites were utilised, informed by an assumed minimum mining height. These
composites were not at right angles to the mineralised zones, but as the dips are shallow (7° to 30° and
typically less than 20°) and a 3-dimensional block model was used, the use of vertical composites is unlikely to
introduce any bias.
Variography
Variograms parallel to the dip of the mineralised zones were calculated and modelled. Vertical grade
distribution utilised downhole variograms. Variograms of between 150m and 250m were obtained in the plane
of the mineralised zone and between 7m and 30m downhole.
Drillhole spacing
The combination of Ferrum Crescent’s exploration and the KIOL data has provided an acceptable drillhole
spacing which ranges from 100m x 100m to 200m x 300m.
Block Model
Horizontal block dimensions were 50m x 50m and 5m in the vertical, informed by borehole spacing and a
conceptual minimum mining unit. The block model was rotated to the average dip (12°).
Grade Estimation Methodology
Ordinary Kriging was employed for grade estimates. A three stage search strategy was employed. A minimum
of 5 and a maximum of 20 samples was used within the range of the variogram for the first search. The second
search was twice the volume of the first, and the third extended to the limits of the mineralised zones. The
search and variogram ellipse were oriented to local dip and strike variations using “Dynamic Anisotropy” in
Datamine Studio v3.
Accuracy and confidence
Plan and section plots were analysed to evaluate the adherence of the estimation methodology to the
geological model. The methodology was found to honour the grade continuity trends, which are assumed to
be parallel to the dip of the mineralised zones.
Moisture
Tonnage was calculated on a dry basis.
Bulk Density
The Iscor data included density measurements for all diamond core holes. No information was provided on the
methodology used to obtain these density data. The diamond core data from Ferrum Crescent exploration
included density measurements obtained by the ‘water immersion’ method. A strong correlation between
density and Fe was observed, and used to estimate block density after grade estimation.
Mining Factors
A minimum mining unit of 50m x 50m x 5m aided in the selection of block size. Approximate stripping ratios
were calculated to inform the maximum depth constraint for the Mineral Resources.
Metallurgical Considerations
On the basis of preliminary test work, The Mineral Corporation has assumed that the Fe can be extracted by
means of comminution and magnetic separation to form a magnetite concentrate.
Cut-off Parameters
A cut-off of 16% Fe and a maximum depth of between 250m and 100m depending on dip and the number of
mineralised zones was applied.
Resource classification
The borehole spacing, surface mapping, structural interpretation, variography and kriging error estimates
inform Mineral Resources which are classified as Inferred, Indicated and Measured. In areas of well-defined
geological structure and modest grade variability, the 100m x 100m grid is sufficient for Measured Mineral
Resources.
Resource Reporting
The Mineral Resource estimates have been compiled in accordance with the guidelines defined in the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code,
2004 Edition)
Appendix 5B
Mining exploration entity quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10
Name of entity
Ferrum Crescent Limited
ABN Quarter ended (“current quarter”)
58 097 532 137 30 June 2012
Consolidated statement of cash flows
Current quarter Year to date
Cash flows related to operating activities (12 months)
$A’000 $A’000
1.1 Receipts from product sales and related
debtors
1.2 Payments for (a) exploration & evaluation (186) (2,046)
(b) development
(c) production
(d) administration (531) (2,611)
1.3 Dividends received
1.4 Interest and other items of a similar nature
received 34 207
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other (provide details if material) - 2
Net Operating Cash Flows (683) (4,448)
Cash flows related to investing activities
1.8 Payment for purchases of:
(a) prospects
(b) equity investments
(c) other fixed assets (5) (23)
1.9 Proceeds from sale of:
(a) prospects
(b) equity investments
(c) other fixed assets
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (restricted cash investments) (155) (155)
Net investing cash flows (160) (178)
1.13 Total operating and investing cash flows
(carried forward) (843) (4,626)
1.13 Total operating and investing cash flows
(brought forward) (843) (4,626)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc.
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other – share issue costs - (17)
- (17)
Net financing cash flows
Net increase (decrease) in cash held (843) (4,643)
1.20 Cash at beginning of quarter/year to date 4,194 8,114
1.21 Exchange rate adjustments to item 1.20 1 (119)
3,352 3,352
1.22 Cash at end of quarter
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the
related entities
Current quarter
$A'000
1.23 Aggregate amount of payments to the parties included in item 1.2 131
1.24 Aggregate amount of loans to the parties included in item 1.10
1.25 Explanation necessary for an understanding of the transactions
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on
consolidated assets and liabilities but did not involve cash flows
2.2 Details of outlays made by other entities to establish or increase their share in projects in
which the reporting entity has an interest
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available Amount used
$A’000 $A’000
3.1 Loan facilities
3.2 Credit standby arrangements
Estimated cash outflows for next quarter
$A’000
4.1 Exploration and evaluation 200
4.2 Development
4.3 Production
4.4 Administration 400
Total 600
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as Current quarter Previous quarter
shown in the consolidated statement of cash flows) $A’000 $A’000
to the related items in the accounts is as follows.
5.1 Cash on hand and at bank 3,352 4,194
5.2 Deposits at call
5.3 Bank overdraft
5.4 Other (provide details)
3,352 4,194
Total: cash at end of quarter (item 1.22)
Changes in interests in mining tenements
Tenement reference Nature of interest Interest Interest at
(note (2)) at end of
beginnin quarter
g of
quarter
6.1 Interests in mining 30/5/1/1/2/0402/PR Prospecting right 81.40% 81.40%
tenements relinquished, lapsing
reduced or lapsed
6.2 Interests in mining 30/5/1/1/2/0402/PR Mining right 81.40% 81.40%
tenements acquired or application pending
increased (application granted
but not yet executed)
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number quoted Issue price per Amount paid up
security (see per security (see
note 3) (cents) note 3) (cents)
7.1 Preference
+securities
(description)
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buy-
backs,
redemptions
7.3 +Ordinary 298,841,705 292,246,705 Various Fully Paid
securities
7.4 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buy-
backs
7.5 +Convertible
debt
securities
(description)
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through
securities
matured,
converted
7.7 Options Exercise price Expiry date
(description and 2,950,000 - $0.198 07 December 2013
conversion 21,496,727 21,496,727 $0.400 31 December 2013
factor)
7.8 Issued during
quarter
7.9 Exercised
during quarter
7.10 Expired during
quarter
7.11 Debentures
(totals only)
7.12 Unsecured
notes (totals
only)
Compliance statement
1 This statement has been prepared under accounting policies which comply with
accounting standards as defined in the Corporations Act or other standards acceptable to ASX
(see note 5).
2 This statement does give a true and fair view of the matters disclosed.
30 July 2012
Sign here: ............................................................ Date: ............................
(Company secretary)
Print name: Andrew Nealon................... .............
Notes
1 The quarterly report provides a basis for informing the market how the entity’s
activities have been financed for the past quarter and the effect on its cash position. An entity
wanting to disclose additional information is encouraged to do so, in a note or notes attached
to this report.
2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in
mining tenements acquired, exercised or lapsed during the reporting period. If the entity is
involved in a joint venture agreement and there are conditions precedent which will change its
percentage interest in a mining tenement, it should disclose the change of percentage interest
and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in
items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral
Resources and AASB 107: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Financial
Reporting Standards for foreign entities. If the standards used do not address a topic, the
Australian standard on that topic (if any) must be complied with.
30 July 2012
Johannesburg
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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