Wrap Text
March 2013 Queretrly Activities Report and 5 B
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
Firestone Energy Limited is an
30 April 2013 independent, Australian exploration and
development company listed on the
Australian Stock Exchange Ltd (ASX) and
the Johannesburg Stock Exchange (JSE).
Quarterly Activities Report for the Firestone Energy has entered into a Joint
Venture with Sekoko Resources (Pty) Ltd
Period to 31 March 2013
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 Board of Firestone Energy Limited (ASX/JSE: “FSE”) (“Firestone” or
the “Company”) is pleased to provide Shareholders with its Quarterly The first stage of the project is to develop the
Activities Report for the 3 month period ended 31 March 2013. Smitspan mine which has a substantial
measured thermal coal resource and to
develop the Vetleegte mine which is a
substantial metallurgical coal deposit.
Technical Activities: The Waterberg Coal Project
Firestone Energy is committed to becoming a
The technical team of the Waterberg Joint Venture continue to progress the profitable independent coal and energy
producer at its projects in South Africa,
Bankable Feasibility Study for the proposed coal mine to supply 10 million
thereby making a substantial contribution to
tons of thermal coal to Eskom per annum. the social and economic development of the
Lephalale area and South Africa.
During the quarter, Eskom requested a change in the plant process design
in order to accommodate the different burn characteristics of the top and Corporate Details
ASX: FSE
bottom coal seams. As a result, the request has been included in the JSE: FSE
current BFS which is now expected to be finalised in June 2013. Issued Capital:
3,549 million ordinary shares
The various specialist studies required for the completion of the Bankable
Major Shareholders:
Feasibility Study, namely environmental, rail, infrastructure, geo-technical Sekoko Resources (Pty) Ltd
and hydrology studies, commenced during the quarter, and are currently Linc Energy Ltd
BBY Nominees Pty Ltd
well underway. The Geology and Resources chapters of the Feasibility Bell Potter Nominees Ltd
Study are complete. During the quarter, environmental consultants Directors and Officers
commenced with the Public Involvement Process required in order to
Non Executive Directors:
amend the Existing Environmental Right Management Program. Mr Tim Tebeila (Chairman)
David Perkins (Deputy Chairman)
Drilling to delineate the faults on Smitspan was completed during the Dr Pius Kasolo
Ben Mphahlele
quarter, and drilling commenced on Massenberg in order to upgrade the Kobus Terblanche
Oren Zohar
resource status of the property. The Company is currently awaiting the Jack James
results of further drill analysis and as part of the Feasibility Study, the
Officers:
overall data will be integrated to produce an interim report that is expected Mr David Knox CEO
to be published prior to the finalisation of the BFS. Ms Amanda Matthee CFO
Mr Jerry Monzu Company Secretary
The Waterberg Joint Venture technical team continue to actively engage
Contact:
with all stakeholders including Eskom, Transnet Freight Rail, and all Suite B9, 431 Roberts Road
relevant Regulatory Authorities. Subiaco, Western Australia 6008
Tel: +61 (08) 9287 4600
Corporate Activities
During the quarter, the company has experienced an increase in corporate activity following
the ASX announcement made in December 2012 by Range River Gold Limited (“RNG”), now
renamed as The Waterberg Coal Company Limited (“WCC”) whereby, WCC announced its
intention to make a unsolicited, conditional proposal to acquire all the shares in Firestone.
In January 2013, the Firestone board received a formal Bidders Statement from WCC
announcing an unsolicited, conditional proposal to acquire all of the ordinary shares in
Firestone by way of an off market takeover offer. In summary, Firestone shareholders were
offered (1) WCC share for every (2) Firestone shares. The Firestone board were unanimous in
their view that, Firestone shareholders should take no action until the board reviewed the offer
and would advise shareholders accordingly. In addition, WCC announced that it had signed an
agreement to acquire the entire shares of Ariona Company SA (“Ariona”).
On 5 February 2013, the Company announced that the First Stage Settlement had occurred,
in accordance with the Restated Investment Agreement (“RIA”) between the Company, Ariona,
BBY Nominees and Jaguar Funds Management Limited. Under the terms of the RIA, the
Company has issued A$27.145 million of new secured convertible notes whereby, the
Company received A$5million in cash, less costs, for interim funding, which was rolled into the
new convertible notes together with the redemption and replacement of A$21.3 million of
Existing Convertible Notes and accrued interest of A$845k. Successfully achieving the first
completion greatly assisted the Company in continuing its development in the Joint-Venture
Waterberg Project.
Also, in accordance with the RIA, following the completion of the First Stage Settlement,
Ariona nominated and Firestone appointed three persons to the Board of Firestone; Mr Jack
James, Mr Oren Zohar and Mr David Hillier. Subsequently on 4 March 2013 Mr David Hillier
tendered his resignation from the Firestone Board.
On 21 February 2013, the Company announced the release of an Independent Specialist
Valuation Report carried out by VenmynDeloitte in relation to the coal assets of the Company’s
Waterberg Coal Project Joint Venture with Sekoko Resources.
Furthermore, Deloitte Corporate Finance Pty Limited (Deloitte) was separately engaged to
prepare an Independent Expert’s Report, in relation to the off-market takeover offer from WCC
and consider whether the Offer is fair and reasonable. In summary, the opinion formed by
Deloitte was that the Offer is neither fair nor reasonable to the non-associated Firestone
Shareholders. Both reports are available on the FSE company website.
On 4 March 2013, Firestone announced that the Second Stage Settlement had not occurred,
in accordance with the RIA, but that the Company was in discussions with Ariona to
reschedule the completion date. Subsequently, the Company requested a trading halt and on
15 March 2013, the Company announced the voluntary suspension of its shares pending the
outcome of Second Stage Settlement Date.
On 18 March 2013, Firestone lodged the Target Statement with ASIC and the Bidder WCC. A
copy is available on the FSE company website. In summary, the FSE board unanimously
recommended to shareholders to reject the offer by WCC. Following this, on 25 March 2013,
the FSE Board, having received a Supplementary Bidders Statement from WCC, reaffirmed
it’s recommendation to shareholders to reject WCC’s Offer.
On 2 April 2013, Firestone announced that negotiations failed to resolve a revised date for the
second stage completion and as a result, the RIA was terminated. The termination has
allowed Firestone to seek alternative sources of investment from interested parties. The
Company is currently in the process of negotiating alternative funding from other third parties
and will provide an update once negotiations are concluded. During this period, the Company
requested that the shares remain suspended.
Yours sincerely,
David Knox
Chief Executive Officer
www.firestoneenergy.com.au
Tel: Australia (+61 08 9287 4600)
South Africa (+27 11 706 3548)
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 31 March 2013
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 (1,665) (2,983)
(b) development - -
(c) production - -
(d) administration (708) (1,505)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature
received 3 3
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Other (GST receipts) 23 103
Net Operating Cash Flows (2,347) (4,382)
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 (2,347) (4,382)
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 (2,347) (4,382)
forward)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, Convertible 3,641 5,000
Notes etc.
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings - 706
1.17 Repayment of borrowings - -
1.18 Capital raising costs (501) (501)
1.19 Other – Interest paid - -
3,140 5,205
Net financing cash flows
Net increase (decrease) in cash held 793 823
1.20 Cash at beginning of quarter/year to date 165 169
1.21 Exchange rate adjustments to item 1.20 Gain / (Loss) (46) (80)
912 912
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 1,948
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 - $1,813k
Pmts to Directors as directors fees - $135k
+ See chapter 19 for defined terms.
Appendix 5B Page 2 30/9/2001
Appendix 5B
Mining exploration entity quarterly report
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
During the quarter 435,820,082 shares were issued to BBY Nominees Pty Ltd (“BBY”) to
extinguish the outstanding amount payable on the A$2.2milion BBY Finance Facility and in
lieu of interest repayments to BBY on their Existing Convertible Notes, shares were issued at
an average price of 0.73 cents per share.
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
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 Nil
The Company has in place a further financing
facility (Share Purchase Agreement) with its
existing convertible noteholders BBY Nominees
Pty Ltd.
3.2 Credit standby arrangements - -
Estimated cash outflows for next quarter
$A’000
4.1 Exploration and evaluation 1,000
4.2 Development -
4.3 Production -
4.4 Administration 500
1,500
Total
+ See chapter 19 for defined terms.
30/9/2001 Appendix 5B Page 3
Appendix 5B
Mining exploration entity quarterly report
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 162 144
750 21
5.2 Deposits at call
- -
5.3 Bank overdraft
- -
5.4 Other (provide details)
912 165
Total: cash at end of quarter (item 1.22)
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 per Amount paid
security (see up per security
note 3) (cents) (see 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 3,549,698,723 3,549,698,723 Fully paid
FSE
7.4 Changes
during
quarter
(a) Increases
through 435,820,082 435,820,082
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 Repayment dates
debt Notes number into shares
securities
(description)
Ariona
Company SA Con Note 2 – $5million 200,000,000 30 January 2017
BBY
Nominees Pty
Ltd Con Note 3 – $22.145million 885,800,000 30 January 2017
7.6 Changes
during
quarter
(a) Increases
through
issues
Ariona
Con Note 2 – $5million 200,000,000 30 January 2017
Company SA
Unlisted Convertible Conversion
Notes number into
(b) Decreases shares- Variable per
through note
securities
matured, Original repayment
dates
converted
These notes Con Note 1 – 12 FSEAQ
2 October 2012
originally Con Note 2 – 3 FSEAS
16 November 2012
issued to BBY Con Note 3 – 3 FSEAU
18 December 2012
Nominees Pty Con Note 4 – 3 FSEAY
21 January 2013
Ltd were Con Note 5 - 3 FSEAW
23 February 2013
redeemed on Con Note 6 – 3 FSEAZ
23 March 2013
31 Jan 2013 Con Note 7 – 3 FSEAA
30 April 2013
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
+ See chapter 19 for defined terms.
Appendix 5B Page 6 30/9/2001
Appendix 5B
Mining exploration entity quarterly report
7.7 Options Exercise price Expiry date
FSEAM 110,000,000 Nil 6.0 Cents 31 May 2013
FSEAO 96,904,767 Nil 6.0 Cents 30 Jun 2013
FSEAI 25,875,000 Nil 6.0 Cents 30 Jun 2014
FSEO 48,395,000 48,395,000 4.0 Cents 31 May 2014
FSEAA 40,000,000 Nil 2.5 Cents 19 Sept 2014
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 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: Date: 30 April 2013
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.
+ See chapter 19 for defined terms.
30/9/2001 Appendix 5B Page 7
Appendix 5B
Mining exploration entity quarterly 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 8 30/9/2001
Johanesburg
2 May 2013
Sponsor
River Group
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