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Quarterly Activities and Cashflow Report
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 31 December 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 31 December
2012.
HIGHLIGHTS:
Moonlight Iron Ore Project – 2012 Operational Summary:
-New JORC compliant resource at Moonlight Iron Ore Project of 307.8 million tonnes @
26.9% Fe.
-Advanced geological model of JORC compliant resource area and identified new
prospective areas following 2,827 line km (on 50m line) spacing and high resolution
airborne magnetic survey at Moonlight.
-Mining Right granted covering Moonlight, Julietta and Gouda Fontein areas
All requirements met under South African law, including environmental and
social and labour plans.
-Transnet and infrastructure provider model progressed towards completion of BFS
Detailed analysis of pellet plant location advanced following review of rail
capacity and power availability to supply internal steel industry
Potential water providers identified
Infrastructure conclusions being compiled to coincide - first production to
commence benefiting from current infrastructure initiatives undertaken for
Limpopo Province.
Corporate:
-Cash as at 31 December 2012 is approximately A$1.8m
Commenting today Ed Nealon, Chairman, said: “As a secure source of supply for export and
potentially to the South African steel industry Ferrum Crescent is working closely with its
offtake partners, alongside various industry heads and levels of Government, to ensure our
stated timeline for the development of the Moonlight Iron Ore project is maintained. Work
with Transnet is particularly advanced with final conclusions being made on how long-term
costs can be restricted en route to market. Ferrum Crescent is in a position where it believes it
can utilise large amounts of existing capacity to reach a final customer base located within a
few hundred kilometres.”
Moonlight Project overview
As announced on 19 December 2012, the Company is currently undertaking a bankable
feasibility study (“BFS”) in relation to the potential development of a deliverable, low cost
magnetite ore project that produces a high grade, low contaminant iron pellet product
following beneficiation. The current established JORC compliant resource is 307.8 million
tonnes Resource @ 26.9% Fe, a magnetite ore with metallurgy that demonstrates capability
for high grade product up to 69.7% Fe grade. Metallurgical testing phases have also shown that
the product is likely to contain extremely low contaminants - 2.05% SiO2, and 0.40% Al2O3, and
0.01% P.
It is anticipated that Moonlight will be developed as a contract, open-pit mine with onsite
concentrate production. A slurry concentrate pipeline to a pelletising plant near railhead will
be created, with return water to Moonlight (100 - 220km); current preferred sites are at
Lephalale and Thabazimbi. A pelletising plant to produce iron ore pellets (68.5% Fe) for
international and domestic markets is planned with production at 6Mtpa direct reduction iron
and blast furnace pellets. With a high grade, pure product near existing rail infrastructure and
producing steel mills, an offtake agreement for initial production has already been signed with
Duferco SA.
Strategic rationale for 2012 work programme
With extensive exploration already complete at Moonlight, Ferrum has prioritised increasing
the economic understanding of the existing mineralisation in order to provide the data needed
to complete a BFS for development of the project into near-term production. Focussed work
was also undertaken to examine the expansion potential of Moonlight outside of the existing
JORC delineation. With long lead times often involved in procuring relevant licensing for
development the Company also made it a clear objective to secure a full, granted mining
licence over all of the Moonlight area. The Group’s mining right has been granted, executed
and registered.
In addition to work being carried out directly at the Moonlight Deposit, detailed analysis of the
infrastructure solutions for both the Moonlight open pit mine and pelletising plant have been
underway with providers such as Transnet and Eskom. Located in the Limpopo Province of
Northern South Africa, Moonlight is located near two major rail hubs that potentially will have
the capacity to carry the project’s iron ore pellets for export and to local steel producers. Given
the high grade pellet product Ferrum is looking to produce, the last quarter saw a detailed
examination of the most efficient location for the plant in terms of power usage and ore versus
pellet transportation costs. Limpopo Province sits well to the north of traditional iron ore
mining operations in South Africa and is seeing a range of initiatives currently undertaken in
the region to promote the economy. Over the quarter, Ferrum and the infrastructure partners
it is in consultation with have modelled a series of scenarios that derive benefit from such
government infrastructure programmes.
2013
With an economic rationale established from current resource and metallurgical work at
Moonlight, the Company’s focus for the first part of the year is to finalise the infrastructure
model for power, water and transportation. As a secure source of supply of high grade
product to steel producers internationally and potentially within South Africa, Ferrum Crescent
is working closely with its offtake partners, alongside various industry heads and levels of
Government, to ensure our stated timeline to production is maintained. Work with Transnet is
advanced, with final conclusions being made on how long-term costs can be restricted on
route to market. Ferrum Crescent is in a position where it believes it can utilise large amounts
of existing capacity to reach a final customer base located within a few hundred kilometres.
Ferrum Crescent will continue to progress the Moonlight Iron Ore Project, with the intention
of having a BFS completed within the next 12 to 18 months.
Corporate
On the 14th December 2012, the Company issued 4,078,060 ordinary shares to Messrs Ed
Nealon, Robert Hair and Andrew Nealon under the terms and conditions of the Ferrum
Crescent Director and Senior Management Fee and Remuneration Sacrifice Share Plan (the
“Plan”). The shares were issued to Messrs Ed Nealon and Robert Hair in lieu of their salaries for
the period from 1 April 2012 to 30 November 2012 and to Andrew Nealon for the period from
1 September 2012 to 30 November 2012 at a weighted average price for the last 5 days prior
to each month end.
The purpose of the Plan is to help align the interests of Directors and Senior Managers with
those of shareholders by encouraging Director and Senior Manager share ownership and
(where such shares are newly issued) preserve cash in the Company. A breakdown of each
Company officer’s share issue is provided below:
Name No. of Shares Average Price Total % of Enlarged
Issued Shareholding Post Issued Share
Issue Capital
Ed Nealon 1,039,532 AUD$0.051 4,184,532 1.27
Robert Hair 2,650,808 AUD$0.051 7,696,118 2.34
Andrew Nealon 387,720 AUD$0.039 1,032,133 0.31
Following admission the Company has 328,201,385 fully paid ordinary shares in issue.
Additionally, on 14th December 2012 the Company granted 400,000 options to Mr Vernon
Harvey, Chief Operating Officer. The Options were granted under the terms and conditions of
the Ferrum Crescent Ltd Employee Option Plan. The Options are unquoted and granted for no
consideration but will be exercisable at AUD$0.10 on or before 14th December 2015.
For more 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
Ferrum Crescent Limited
Laurence Read (UK representative)
T: +44 7557672432
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 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 31 December 2012
Consolidated statement of cash flows
Current quarter Year to date
Cash flows related to operating activities (6 months)
$A’000 $A’000
1.1 Receipts from product sales and related
debtors
1.2 Payments for (a) exploration & evaluation (160) (366)
(b) development
(c) production
(d) administration (412) (907)
1.3 Dividends received
1.4 Interest and other items of a similar nature
received 17 36
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other – income from restricted cash 11 22
investments
Net Operating Cash Flows (544) (1,215)
Cash flows related to investing activities
1.8 Payment for purchases of:
(a) prospects
(b) equity investments
(c) other fixed assets - (1)
1.9 Proceeds from sale of:
(a) prospects
(b) equity investments
(c) other fixed assets
1.10 Loans to other entities (780) (780)
1.11 Loans repaid by other entities -- -
1.12 Other (restricted cash investments) (138) (279)
Net investing cash flows (918) (1,060)
1.13 Total operating and investing cash flows
(carried forward) (1,462) (2,275)
1.13 Total operating and investing cash flows
(brought forward) (1,462) (2,275)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 780 780
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 (7) (7)
Net financing cash flows 773 773
Net increase (decrease) in cash held (689) (1,502)
1.20 Cash at beginning of quarter/year to date 2,509 3,352
1.21 Exchange rate adjustments to item 1.20 (25) (55)
1.22 Cash at end of quarter 1,795 1,795
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 80
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 1,795 2,509
5.2 Deposits at call
5.3 Bank overdraft
5.4 Other (provide details)
Total: cash at end of quarter (item 1.22) 1,795 2,509
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% 97%
tenements acquired or
increased (Moonlight Mining Right)
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 per
security (see security (see note
note 3) (cents) 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 328,201,385 321,606,385 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) 400,000 - $0.100 14 December 2015
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.
31 January 2013
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.
31 January 2013
Johannesburg
Sponsor
Sasfin Capital
(A Division of Sasfin Bank Limited)
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