To view the PDF file, sign up for a MySharenet subscription.

FIRESTONE ENERGY LIMITED - Quarterly Report

Release Date: 31/10/2012 12:40
Code(s): FSE     PDF:  
Wrap Text
Quarterly Report

  
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")




                                                                                         About Firestone Energy
   31 October 2012
                                                                                           Firestone Energy Limited is an
                                                                                           independent, Australian exploration and
                                                                                           development company listed on the
                                                                                           Australian Stock Exchange Ltd (ASX) and

      Quarterly Activities Report for the
                                                                                           the Johannesburg Stock Exchange (JSE).
                                                                                           Firestone Energy has entered into a Joint
                                                                                           Venture with Sekoko Resources (Pty) Ltd
        Period to 30 September 2012                                                        through which Firestone Energy has
                                                                                           acquired the right to 60% participation
                                                                                           interests in the Waterberg Coal Project
                                                                                           located in Lephalale area, Limpopo Province,
The Board of Firestone Energy Limited (ASX/JSE: FSE) (“Firestone” or the                   South Africa.
“Company”) is pleased to provide shareholders with its Quarterly Activities Report
for the 3 month period ended 30 September 2012.                                            The first stage of the project is to develop the
                                                                                           Smitspan mine which has a substantial
                                                                                           measured thermal coal resource and to
During the quarter the Company issued a notice of General Meeting together with            develop the Vetleegte mine which is a
                                                                                           substantial metallurgical coal deposit.
an explanatory memorandum to shareholders which outlined, inter alia, a suite of
transactions which, if approved and implemented, would significantly improve               Firestone Energy is committed to becoming a
                                                                                           profitable independent coal and energy
Firestone’s financial position and greatly assist in positioning the Company to
                                                                                           producer at its projects in South Africa,
become a major producer of coal in Southern Africa through its participation in            thereby making a substantial contribution to
the development of the Waterberg Coal project with its joint venture partner,              the social and economic development of the
                                                                                           Lephalale area and South Africa.
Sekoko Resources (Pty) Ltd.
                                                                                           Corporate Details
Subsequent to the quarter end, on 5 October 2012 shareholders in a general                                                      ASX: FSE
                                                                                                                                JSE: FSE
meeting approved resolutions, the subject of the notice of meeting. The most
                                                                                                                           Issued Capital:
salient and commercially important of these resolutions related to the acquisition                          3,114 million ordinary shares
of a 25.7% interest in Firestone by Ariona Company SA (and its associates) from
                                                                                                                    Major Shareholders:
Sekoko Resources Pty Ltd; and the approval to issue new convertible notes to                                 Sekoko Resources (Pty) Ltd
                                                                                                                         Linc Energy Ltd
Ariona in an amount up to $40.7 million. The result of the proposed issue of the                                 BBY Nominees Pty Ltd
new convertible notes to Ariona is that it provides Firestone with a greatly                                   Bell Potter Nominees Ltd

enhanced balance sheet and significant funding and much needed working capital                                   Directors and Officers
enabling Firestone to continue to meet its obligations under the Waterberg Joint                             Non Executive Directors:
Venture, including funding the completion of the Bankable Feasibility Study (“BFS”)                          Mr Tim Tebeila (Chairman)
                                                                                                       David Perkins (Deputy Chairman)
which is due for completion in late December 2012. In addition to funding the BFS                                        Dr Pius Kasolo
                                                                                                                        Ben Mphahlele
and related activities, it is forecast that Firestone will have sufficient cash reserves                              Kobus Terblanche
through to project start-up which is estimated for Q3, 2013. The outcome of these                                           Officers:
resolutions is that Ariona will emerge as the Company’s major shareholder, on                                     Mr David Knox CEO
                                                                                                              Ms Amanda Matthee CFO
terms as set out in the explanatory memorandum.                                                     Mr Jerry Monzu Company Secretary

As at the date of writing this quarterly report, the Company and Ariona are                                                    Contact:
working through the completion process. As soon as completion has occurred, the                            Suite B9, 431 Roberts Road
                                                                                                      Subiaco, Western Australia 6008
market will be advised accordingly.                                                                            Tel: +61 (08) 9287 4600
                                                                                                     Web: www.firestoneenergy.com.au
The Waterberg Coal Project: Technical Update

During the quarter, the Waterberg Joint Venture Partners continued the BFS process for the proposed
development of an opencast mining operation, providing 10 million tonnes of coal (product) per
annum to Eskom for an initial term of 30 years. The formal Bankable Feasibility Study is being
undertaken by SRK consultants. During the period, various specialist study groups were appointed to
incorporate environmental work, rail studies, infrastructure and hydrology studies into the BFS.
Furthermore a drilling contractor has been appointed, and the Waterberg Joint Venture partners have
commenced a program to delineate the faults on Smitspan, and to upgrade the resource status on
Smitspan and Massenberg. The drilling to delineate the fault-line on Smitspan is expected to be
completed by the end of Nov 2012.

Currently the Waterberg Joint Venture have two geologists on site, overseen by an experienced coal
exploration consulting geologist. Pursuant to the MOU with Eskom Holdings, the technical team have
regular update meetings with Eskom and are also working closely with Transnet Freight Rail towards
an integrated rail plan for the Waterberg. The study team are also engaging with the Department of
Water Affairs for the supply of water to the project on a timely basis.




Yours sincerely,



David Knox
Chief Executive Officer
www.firestoneenergy.com.au
Tel:    Australia (+61 08 9287 4600)
     South Africa (+27 11 706 3548)



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.




                                                                                             2
                                                                                                    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 September 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                                              (411)                      (411)
                             (b) development                                                             -                          -
                             (c) production                                                              -                          -
                             (d) administration                                                      (353)                      (353)
1.3           Dividends received                                                                         -                          -
1.4           Interest and other items of a similar nature
              received                                                                                   -                         -
1.5           Interest and other costs of finance paid                                                   -                         -
1.6           Income taxes paid                                                                          -                         -
1.7           Other (GST receipts)                                                                      49                        49

              Net Operating Cash Flows                                                               (715)                      (715)

              Cash flows related to investing activities
1.8           Payment for purchases of: (a) prospects                                                     -                            -
                                         (b) equity investments                                           -                            -
                                         (c) properties                                                   -                            -
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)                                                         -                            -
                                                                                                          -                            -
              Net investing cash flows
1.13          Total operating and investing cash flows (carried                                      (715)                      (715)
              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                       (715)                      (715)
            forward)

            Cash flows related to financing activities
  1.14      Proceeds from issues of shares, options, Convertible
            Notes etc.
  1.15      Proceeds from sale of forfeited shares
  1.16      Proceeds from borrowings                                                 717                        717
  1.17      Repayment of borrowings
  1.18      Capital raising costs
  1.19      Other – Interest paid
                                                                                     717                        717
            Net financing cash flows

            Net increase (decrease) in cash held                                        2                         2

  1.20      Cash at beginning of quarter/year to date                                169                        169
  1.21      Exchange rate adjustments to item 1.20 Gain / (Loss)                     (10)                       (10)
                                                                                     161                        161
  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                              663


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 - $567K

           Payments to Directors of the Company - $96K

  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                         977

        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                                             134                           102
                                                                                   27                          67
  5.2    Deposits at call
                                                                                                                -
  5.3    Bank overdraft
                                                                                                                -
  5.4    Other (provide details)
                                                                              161                           169
         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 quoted            Issue price        Amount paid
                                                                                       per security       up per
                                                                                       (see note 3)       security (see
                                                                                       (cents)            note 3)
                                                                                                          (cents)
7.1    Preference                                       Nil                      Nil
       +securities

       (description)
7.2    Changes                                          Nil                      Nil
       during
       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




+ See chapter 19 for defined terms.

30/9/2001                                                                                   Appendix 5B Page 5
Appendix 5B
Mining exploration entity quarterly report


7.5    +Convertible      Unlisted Convertible          Conversion
       debt              Notes                         number-
       securities                                      Variable per Note
       (description)                                   Repayment dates –
                         Con Note 1 – 12 FSEAQ         2 October 2012
                         Con Note 2 – 3 FSEAS          16 November 2012
                         Con Note 3 – 3 FSEAU          18 December 2012
                         Con Note 4 – 3 FSEAY          21 January 2013
                         Con Note 5- 3 FSEAW           23 February 2013
                         Con Note 6 – 3 FSEAZ          23 March 2013
                         Con Note 7 – 3 FSEAA          30 April 2010
                         Con Note 8 - 1 x ($500k)      04 June 2013
                                      4 x ($100k)      04 June 2013
                         Con Note 9 - 9 x ($100k)      13 July 2013
                         Con Note 13 - 6 x ($100k)     8 November 2013
                         Con Note 14 – 6 x ($100k)     23 November 2013
                         Con Note 15 – 6 x ($100k)     22 December 2013
                         Con Note 16 – 6 x ($100k)     24 January 2014
                         Con Note 17 – 9 x ($100k)     22 February 2014
                         Con Note 20 – 6 x ($100k)     24 May 2014
                         Con Note 21 – 3 x ($100k)     22 June 2014
                         Con Note 22 – 3 x ($100k)     19 October 2014

7.6    Changes
       during
       quarter
       (a) Increases
       through
       issues
       (b) Decreases
       through
       securities
       matured,
       converted
7.7    Options                                                              Exercise      Expiry date
       FSEAK                                                                    price
       FSEAM                              30,000,000                  Nil   5.0 Cents    30 Nov 2012
       FSEAO                             110,000,000                  Nil   6.0 Cents    31 May 2013
       FSEAI                              96,904,767                  Nil   6.0 Cents    30 Jun 2013
       FSEO                               25,875,000                  Nil   6.0 Cents    30 Jun 2014
                                          48,395,000          48,395,000    4.0 Cents    31 May 2014
7.8    Issued during
       quarter
       FSEAA                              40,000,000                  Nil   2.5 Cents   19 Sept 2014
7.9    Exercised
       during
       quarter
7.10   Expired
       during
       quarter
7.11   Debentures
       (totals only)
7.12   Unsecured
       notes (totals
       only)




+ See chapter 19 for defined terms.

Appendix 5B Page 6                                                                      30/9/2001
                                                                                            Appendix 5B
                                                               Mining exploration entity quarterly report



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 October 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.

30/9/2001                                                                                      Appendix 5B Page 7

River Group


Johannesburg

31 October 2012

Date: 31/10/2012 12:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story