Wrap Text
JUNE 2012 QUARTERLY RESULTS
FIRESTONE ENERGY LIMITED
(Incorporated in Australia)
(Registration number ABN 058 436 794)
Share code on the JSE Limited: FSE
Share code on the ASX: FSE
ISIN: AU000000FSE6
(SA company registration number 2008/023973/10)
("FSE" or "the Company")
31 July 2012
Quarterly Activities Report
for the Period to 30 June 2012
The Board of Firestone Energy Limited (ASX/JSE: FSE) (“Firestone” or the
“Company”) is pleased to provide shareholders with its Quarterly
Activities Report for the 3 month period ended 30 June 2012.
Highlights
• Signed Funding Agreement - A$40.7m
• Undertaking to procure project funding up to US$400m
• Increased Technical Resources
• Appointment of SRK Consulting to complete a Feasibility
Study
• Amended Eskom MoU
Funding Facility
On 7 May 2012 the Board announced that it had entered into a
conditional termsheet for the provision of A$30.7million of funding by
Ariona Company SA (Ariona). Firestone has now executed an Investment
Agreement with Ariona to provide funding to the Company for the
increased amount of A$40.7million. Firestone has been actively engaged
in carrying out the necessary works required to negotiate the terms and
complete the documentation, which remains a primary focus of the
Company.
Through the execution of the agreement and subject to certain
conditions precedent, Ariona will provide A$40.7million to the Company
under a secured convertible note facility replacing the current convertible
notes.
With this increased facility, and based on current budgeted expenditure,
Firestone is fully funded up to and including the completion of the
Feasibility Study. Post the finalisation of the feasibility Study, project
funding will be required to undertake development and operation of the
Waterberg Coal Project and Ariona have undertaken to procure funding
of up to US$400m for this purpose.
1
Technical Update
The technical team has recently been increased to provide further resources to assist in
completing the feasibility study. Further drilling and assessments are required to
re-model and scope the resource for the increased production rate. In addition, the
integrated water use licence requirements will be aligned to the proposed production
levels. This will be addressed in the current Feasibility Study.
SRK Consulting (SRK) have been appointed to carry out the necessary works to complete
a feasibility study to a bankable level. The technical teams from both SRK and the
Sekoko Joint-Venture are fully engaged and working closely.
Corporate
During the quarter the short-term Funding Facility for A$2.2m announced to the market
on 22 March 2012 was partially drawn down by the Company.
On 3 April 2012, the Company announced to the market that it decided to reject the
offer from Tata Power Company Ltd, for reasons including that in the opinion of the
directors the offer materially undervalued the inherent value in the project.
During the period, the Company announced that Sekoko Coal (Pty) Ltd, it’s South African
black-owned Joint Venture Partner, signed a memorandum of understanding with
Eskom Holdings Limited to supply thermal coal from it’s Waterberg Coal Project. Under
the MoU, the parties will enter into a coal supply agreement enabling the Firestone /
Sekoko joint –venture to supply a minimum of 10 million tonnes per annum of thermal
coal for a minimum period of 30 years. The production of coal is estimated to
commence in 2014 and will ramp up over a 5 year period to 10 million tonnes per
annum. This MoU replaces the earlier MoU with Eskom which was announced to the
market on 2 February 2011.
Outlook
The Company has continued to make good progress in securing funding to advance the
development of the project and is committed to delivering a feasibility study to a
bankable level for the proposed increased production rate. Firestone remains confident
that following the successful completion of the initiatives carried out to-date it will
unlock the value of the Waterberg Project.
FOR FURTHER INFORMATION:
David Knox
CEO
david.knox@firestoneenergy.com.au
www.firestoneenergy.com.au
2
About Sekoko Resources
Sekoko Resources (Pty) Ltd is a South African-based black-owned energy and minerals company
developing the coal, magnetite iron ore and PGMs Projects in the Limpopo Province of South Africa.
This includes a significant exploration program and development of the Waterberg Coal Joint Venture
Project based on significant Coal Zone Resources.
3
Appendix 5B
Mining exploration entity quarterly report
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.
Name of entity
Firestone Energy Limited
ABN Quarter ended (“current quarter”)
71 058 436 794 30 June 2012
Consolidated statement of cash flows
Current quarter Year to date
Cash flows related to operating activities
$A’000 $A’000
1.1 Receipts from product sales and related debtors
1.2 Payments for (a) exploration & evaluation (389) (1,096)
(b) development - -
(c) production - -
(d) administration (283) (1,409)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature
received 1 31
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Other - 68
(671) (2,406)
Net Operating Cash Flows
Cash flows related to investing activities
1.8 Payment for purchases of: (a) prospects - (418)
(b) equity investments - -
(c) properties (105) (2,031)
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 (provide details if material) - -
(105) (2,449)
Net investing cash flows
1.13 Total operating and investing cash flows (carried (776) (4,855)
forward)
+ See chapter 19 for defined terms.
30/9/2001 Appendix 5B Page 1
Appendix 5B
Mining exploration entity quarterly report
1.13 Total operating and investing cash flows (brought (776) (4,855)
forward)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, Convertible - 2,030
Notes etc.
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings 642 1,360
1.17 Repayment of borrowings - -
1.18 Capital raising costs - (90)
1.19 Other – Interest paid - (173)
642 3,127
Net financing cash flows
Net increase (decrease) in cash held (134) (1,728)
1.20 Cash at beginning of quarter/year to date 309 1,892
1.21 Exchange rate adjustments to item 1.20 Gain / (Loss) (6) 5
169 169
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 1.2 421
1.24 Aggregate amount of loans to the parties included in item 1.10 -
1.25 Explanation necessary for an understanding of the transactions
Payments to wholly owned subsidiary, Lexshell Pty Limited, of which amounts are paid to third
parties to make payments on behalf of Firestone Energy pursuant to its JV agreement with Sekoko
Resources - $388K
Payments to Directors of the Company - $33K
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
N/A
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
N/A
+ See chapter 19 for defined terms.
Appendix 5B Page 2 30/9/2001
Appendix 5B
Mining exploration entity quarterly report
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 $2,200 260
The Company has in place a further financing
facility (convertible notes) with its existing
convertible noteholders.
3.2 Credit standby arrangements - -
Estimated cash outflows for next quarter
$A’000
4.1 Exploration and evaluation 150
4.2 Development -
4.3 Production -
4.4 Administration 250
400
Total
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 102 56
67 253
5.2 Deposits at call
- -
5.3 Bank overdraft
- -
5.4 Other (provide details)
169 309
Total: cash at end of quarter (item 1.22)
+ See chapter 19 for defined terms.
30/9/2001 Appendix 5B Page 3
Appendix 5B
Mining exploration entity quarterly report
Changes in interests in mining tenements
Tenement Nature of interest Interest at Interest at
reference (note (2)) beginning end of
of quarter quarter
6.1 Interests in mining Nil
tenements relinquished,
reduced or lapsed
6.2 Interests in mining Nil
tenements acquired or
increased
+ See chapter 19 for defined terms.
Appendix 5B Page 4 30/9/2001
Appendix 5B
Mining exploration entity quarterly report
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 Issue price per Amount paid up
quoted security (see note per security (see
3) (cents) note 3) (cents)
7.1 Preference Nil Nil
+securities
(description)
7.2 Changes during Nil Nil
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buy-
backs,
redemptions
7.3 +Ordinary
securities 3,113,878,641 3,113,878,641 Fully paid
FSE
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
FSEAK 30,000,000 Nil 5 Cents 30 Nov 2012
FSEAM 111,000,000 Nil 6 Cents 31 May 2013
FSEAO 96,904,767 Nil 6 Cents 30 Jun 2013
FSEAI 25,875,000 Nil 6 Cents 30 Jun 2014
FSEO 42,382,500 42,382,500 4 Cents 31 May 2014
7.8 Issued during
quarter 42,382,500 42,382,500 4 Cents 31 May 2014
7.9 Exercised
during quarter
7.10 Expired during
quarter
+ See chapter 19 for defined terms.
30/9/2001 Appendix 5B Page 5
Appendix 5B
Mining exploration entity quarterly report
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 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: ............................................................ Date: 31 July 2012
Company Secretary
Print name: Mr Jerry Monzu
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 1022: Accounting for Extractive
Industries and AASB 1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International
Accounting 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.
+ See chapter 19 for defined terms.
Appendix 5B Page 6
About Firestone Energy
Firestone Energy Limited is an independent, Australian exploration and development company listed on the Australian Stock Exchange Ltd (ASX) and the Johannesburg Stock Exchange (JSE). Firestone Energy has entered into a Joint Venture with Sekoko Resources (Pty) Ltd through which Firestone Energy has acquired the right to 60% participation interests in the Waterberg Coal Project located in Lephalale area, Limpopo Province, South Africa.
The first stage of the project is to develop the Smitspan mine which has a substantial measured thermal coal resource and to develop the Vetleegte mine which is a substantial metallurgical coal deposit.
Firestone Energy is committed to becoming a profitable independent coal and energy producer at its projects in South Africa, thereby making a substantial contribution to the social and economic development of the Lephalale area and South Africa.
Corporate Details
ASX: FSE
JSE: FSE
Issued Capital:
3,114 million ordinary shares
Major Shareholders:
Sekoko Resources (Pty) Ltd
Linc Energy Ltd
BBY Nominees Ltd
Bell Potter Nominees Ltd
Directors and Officers
Non Executive Directors:
Tim Tebeila (Chairman)
David Perkins (Deputy Chairman)
Dr Pius Kasolo
Mr Ben Mphahlele
Mr Kobus Terblanche
Officers:
Mr David Knox CEO
Mr Jerry Monzu Company Secretary
Contact:
Suite B9, 431 Roberts Road
Subiaco, Western Australia 6008
Tel: +61 (0)8 9287 4600
Web: www.firestoneenergy.com.au
SPONSOR
RIVER GROUP
JOHANNESBURG
31 JULY 2012
30/9/2001
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