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FERRUM CRESCENT LIMITED - Quarterly Activities and Cashflow Report for the period ended 30 September 2012

Release Date: 31/10/2012 08:00
Code(s): FCR     PDF:  
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Quarterly Activities and Cashflow Report for the period ended 30 September 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 September 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 September 2012.

HIGHLIGHTS:

Moonlight Iron Ore Project:

    -   Interpretation of the results of a high resolution airborne magnetic survey at Moonlight has
        further increased the Group’s confidence in the geological interpretation of the Moonlight
        Deposit
            - The survey covered the area of the Group’s New Order Mining Right at Moonlight
                (which covers the farms Moonlight, Julietta and Gouda Fontein)
            - A report on this survey was prepared by Mineral Corporation Consultancy (Pty) Ltd
                and its associates
            - This report highlighted several magnetic targets, including targets that indicate the
                strong possibility of an extension of the iron ore mineralisation within Moonlight
                Farm itself and a target on Julietta Farm outside of the area previously planned to be
                drilled
    -   Continued assessment of logistical solutions (rail, power, water and port services) required
        for progressing the detailed feasibility study
    -   Moonlight Mining Right (granted in May 2012) executed and submitted for registration
    -   The Moonlight Mineral Resource estimate currently has sufficient resources to support over
        20 years of magnetite concentrate production, for which the Company has a granted Mining
        Right and associated environmental approval
Corporate:

    -   Shareholder approvals obtained on 8 August 2012 for the BEE “flip” (effectively the swap of
        Black Economic Empowerment interest in the Moonlight Iron Ore Project from the
        Turquoise Moon or project level for shares in Ferrum) and for the implementation of a salary
        sacrifice plan under which directors and executives may forego fees and salary and subscribe
        for shares in the Company
    -   Cash as at 30 September 2012 is approximately A$2.5m

Moonlight Iron Ore Project

During the quarter, Ferrum Crescent announced that it had received from Mineral Corporation
Consultancy (Pty) Ltd of South Africa (“The Mineral Corporation”) a detailed report on the high
resolution aeromagnetic survey conducted earlier in the year at and around the Company’s
Moonlight Iron Ore Deposit in Limpopo Province, South Africa. The Mineral Corporation, which
carried out the most recent Mineral Resource estimate at Moonlight, was engaged to provide
interpretation of the geophysical data generated through the survey.

The current Moonlight Mineral Resource, estimated by The Mineral Corporation, is only based on
the exploration of the farm Moonlight to date and consists of 307.8 Mt at 26.9% Fe, including 172.1
Mt at 25.3% in the Inferred category, 83.0 Mt at 27.4% in the Indicated category and 52.6 Mt at
31.3% in the Measured category. The Group has been granted a New Order Mining Right in respect
of the Moonlight Iron Ore Deposit, and this right covers the farms Moonlight, Julietta and Gouda
Fontein.

Drilling on the farms Julietta and Gouda Fontein to increase the total resource estimate on the
Moonlight Iron Ore Project has been postponed as the Company 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), whilst management attention is
focused 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.
The Report

The Mineral Corporation and its associates have quality controlled the raw geophysical data,
extracted and processed geophysical results from the data, provided a geological interpretation of
the results, integrated these with the existing geological modelling and analysed the implication of
these results for future exploration targets.

The magnetite-bearing quartzite, which comprises the Moonlight Deposit, provides high intensity
magnetic anomalies that have permitted a detailed interpretation.

With regard to the current Mineral Resource area on Moonlight Farm, The Mineral Corporation is of
the view that the geophysical results do not identify any significant inconsistencies in the existing
structural interpretation, which informs the current Mineral Resource estimate. The geophysical
results and interpretation support the existing structural interpretation with respect to the major
interpreted fault orientations and with respect to Zone A, Zone B and Zone C West. The geophysical
results suggest that the interpreted western extent of Zone C East and the sparsely drilled Zone D
warrant review and further exploration to test the potential for additional mineralised zones. The
Mineral Corporation concludes that these results have identified targets on Moonlight Farm which
could represent potential upside for the current Mineral Resources at a modest exploration cost.

The geophysical data interpretation on the adjacent Julietta Farm and Gouda Fontein Farm confirms
and significantly enhances the reconnaissance ground magnetic surveys that were carried out by
Ferrum on these farms, and an important anomaly close to, but outside, the previously planned
exploration drilling area has been identified. The improved understanding of the geology on Julietta
and Gouda Fontein should enable the proposed exploration drilling plans on these farms to be
substantially optimised.

Mining Right Execution

Subsequent to the end of the quarter, the Moonlight Mining Right (which was granted in May 2012)
was executed under applicable South African law and has been submitted for registration. The
mining right covers the areas of the three farms, Moonlight, Julietta and Gouda Fontein.

Corporate

Shareholder approvals were obtained on 8 August 2012 for the BEE “flip” (effectively the swap of
Black Economic Empowerment interest in the Moonlight Iron Ore Project from the Turquoise Moon
or project level for shares in Ferrum) and for the implementation of a salary sacrifice plan under
which directors and executives may forego fees and salary and subscribe for shares in the Company.

Three individuals have elected at this stage to participate in the salary sacrifice plan, and the shares
that have “accrued” (calculated on a monthly basis by way of volume weighted average share prices
for Ferrum shares as traded on the Australian Securities Exchange during that month) as a result of
such participation are as follows:
                April 2012   May 2012   June 2012   July 2012    Aug 2012      Sept 2012   Total

Ed Nealon       111,111      133,333    182,891     95,238       95,238        133,333     751,145
($6,667 per
month)
Bob Hair        283,333      340,000    466,372     242,857      242,857       340,000     1,915,419
($17,000 per
month)
Andrew          -            -          -           -            -             100,000     100,000
Nealon
($5,000 per
month)
VWAP            $0.06        $0.05      $0.036      $0.07        $0.07         $0.05



The shares will be issued at a time that is not a “close period” under the Company’s share trading
policy.

For further information, please visit www.ferrumcrescent.com or contact:

Australia and Company enquiries:                    UK enquiries:
Ferrum Crescent Limited                             Ocean Equities Limited (Broker)
Ed Nealon T: +61 8 9380 9653                        Guy Wilkes T: +44 (0) 20 7786 4370
Executive Chairman
                                                    RFC Ambrian Limited (Nominated Adviser)
Bob Hair T: +61 414 926 302                         Richard Morrison T: +44 (0) 20 3440 6800
Managing Director                                   Jen Boorer T: +44 (0) 20 3440 6800

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.



About Ferrum Crescent Limited

Ferrum Crescent Limited is an Australian company listed on the Australian Securities Exchange (ASX:
FCR), the AIM market of the London Stock Exchange (AIM: FCR) and the Johannesburg Stock
Exchange (JSE: FCR).

The Company seeks to capitalise on the future demand for iron and steel worldwide by producing iron
products in the Republic of South Africa, for both the domestic and the export markets. South Africa, a
relatively under developed market, which was dominated historically by Iscor (part of which is now
Kumba Iron Ore Limited) and now by Arcelor Mittal, has been largely overlooked, and FCR wishes to
develop its Moonlight Iron Ore Project and pursue other opportunities in Southern Africa.

Within the constraints of having 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 JORC compliant Mineral Resources on the Moonlight farm section of the granted Mining
right are estimated to be 307.8 million tonnes @ 26.9% and are shown 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)       (Mt)         (%)     (%)        (%)        Metal (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 subsidiary is the operator and owns 81.4% (the beneficial ownership interest as accounted for at 30 June 2012 is
97%) of the Moonlight Iron Ore Project

The Moonlight Deposit (upon which the Moonlight Iron Ore Project or “Moonlight” is based) is a
magnetite deposit located on the farms Moonlight, Gouda Fontein and Julietta in Limpopo Province
in the north of South Africa and it is the main operational focus for the Company. Iscor, which
explored the Project in the 1980s and '90s, reported mineralisation, capable of producing a
concentrate grading 68.7% iron. At the time, Iscor concluded that the deposit, which was described
as comparable to the world's best, was easily mineable due to its low waste-to-ore ratio. The
beneficiation attributes of Moonlight ore are extremely impressive, with low-intensity magnetic
separation considered suitable for optimum concentration.
                                                                            
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 September 2012


      Consolidated statement of cash flows
                                                                               Current quarter                 Year to date
Cash flows related to operating activities                                                                     (3 months)
                                                                               $A’000                          $A’000
1.1           Receipts from product sales and related
              debtors

1.2           Payments for (a) exploration & evaluation                                                (206)                     (206)
                             (b) development
                             (c) production
                             (d) administration                                                        (495)                     (495)
1.3           Dividends received
1.4           Interest and other items of a similar nature
              received                                                                                    19                        19
1.5           Interest and other costs of finance paid
1.6           Income taxes paid
1.7           Other – income from restricted cash                                                         11                         11
              investments

              Net Operating Cash Flows                                                                 (671)                     (671)

              Cash flows related to investing activities
1.8           Payment for purchases of:
                             (a) prospects
                             (b) equity investments
                             (c) other fixed assets                                                      (1)                        (1)
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)                                                      (141)                      (141)

              Net investing cash flows                                                                 (142)                     (142)
1.13          Total operating and investing cash flows
              (carried forward)                                                                        (813)                     (813)

1.13     Total operating and investing cash flows
         (brought forward)                                                   (813)                      (813)

         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                                                -                          -
                                                                                  -                          -
         Net financing cash flows

         Net increase (decrease) in cash held                                (813)                      (813)

1.20     Cash at beginning of quarter/year to date                           3,352                      3,352
1.21     Exchange rate adjustments to item 1.20                                (30)                       (30)
                                                                             2,509                      2,509
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                                78

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




3.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                                                2,509                       3,352

  5.2    Deposits at call

  5.3    Bank overdraft

  5.4    Other (provide details)
                                                                                2,509                        3,352
         Total: cash at end of quarter (item 1.22)



  Changes in interests in mining tenements

                                        Tenement reference         Nature of interest     Interest at   Interest
                                                                   (note (2))             beginning     at end of
                                                                                          of quarter    quarter
  6.1    Interests in mining
         tenements relinquished,
         reduced or lapsed


  6.2    Interests in mining            30/5/1/1/2/0402/PR         Mining Right granted   81.4%         81.4%
         tenements acquired or
         increased                      (Moonlight Mining Right)




7. 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                2,350,000                   -               $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                                                       Exercise price            Expiry date
        quarter                          600,000            2,350,000               $0.198       07 December 2013
7.11    Debentures
        (totals only)


+ See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 10
                                                                                               Appendix 5B
                                                                  Mining exploration entity quarterly report



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.



                                                                                        31 October 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.

Johannesburg
31 October 2012


Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)





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