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Qurterly report 30 September 2013
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 2013
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 2013.
HIGHLIGHTS:
Moonlight Iron Ore Project:
Ferrum Crescent signs conditional, legally binding letter of intent with Anvwar Asian
Investment (“AAI”) to progress Moonlight BFS development
- US$10m to acquire 35% shareholding in Ferrum Iron Ore (Pty) Ltd, which holds the
mining right over the three farms that contain the Moonlight Deposit
- US$3.5m additional funds to contribute to BFS costs
- First BFS payment scheduled by end of year
- AAI representative Anvwar Al Balushi will be invited to join the Ferrum Iron Ore
Board and Moonlight Iron Ore Project steering committee
Corporate:
Ferrum Crescent after the end of the quarter successfully raises GBP 873,600 (AU$1.5m)
before costs
- 48 million shares (3,386,844 of which are subject to shareholder approval) to be
issued at GBP 0.0182 (AU$0.0315) per share (“Placement Shares”)
- Proceeds to be used by the Company to fund corporate activities and to carry out
the feasibility study and mining right activities pending the AAI investment
- Funds from the private placement to be received in two tranches, with the second
tranche representing subscriptions by two directors of the Company and requiring
shareholder approval
Cash as at 30 September 2013 was approximately AUD$639,000
Annual General Meeting of shareholders convened at 4:30pm (Perth time) on Friday 29th
November 2013 at The Lake Monger Room, The Boulevard Centre, 99 The Boulevard, Floreat
WA 6014
Commenting today Ed Nealon, Chairman, said: "Our agreement with AAI is designed to bring
a new partner into Moonlight and progress the iron ore project to the development stage. Our
intention is to complete the Bankable Feasibility Study at Moonlight with our process
engineering partners, Danieli. Moonlight is located in northern South Africa, near existing
infrastructure, and represents a new source of high-grade iron ore product for domestic and
international markets.”
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 Sarah Wharry / Jen Boorer T: +44 (0) 20 3440 6800
Managing Director
Ferrum Crescent Limited
Laurence Read (UK representative)
T: +44 7557672432
South Africa enquiries: Sasfin Capital
Leonard Eiser T: +27 11 809 7500
During the quarter, Ferrum Crescent, the ASX, AIM and JSE quoted iron ore developer,
announced it had signed a legally binding letter of intent (“Agreement”) with Anvwar Asian
Investment (“AAI”) to facilitate the completion of the Company’s bankable feasibility study
(“BFS”) at the Moonlight Iron Ore Project in northern South Africa. Under the Agreement, AAI
will pay US$10m to Ferrum Crescent in return for a 35% shareholding in Ferrum Iron Ore Pty
Ltd., which holds the mining right over the three farms that contain the Moonlight Deposit.
AAI will also contribute US$3.5m to the on-going costs of the BFS. The Agreement is subject to
the fulfilment of certain conditions precedent regarding confirmation due diligence and the
receipt of applicable regulatory approvals.
The Ferrum Crescent interest in the Moonlight Iron Ore Project is held through the Group’s
direct and indirect shareholding in Ferrum Iron Ore (formerly named Turquoise Moon
Trading), the shares of which are currently held as to 74% by Ferrum South Africa (Pty) Ltd
(formerly named Nelesco) and as to 26% by Mkhombi Investments (Pty) Ltd. Subject to the
conditions precedent and following the investment, the shares of Ferrum Iron Ore will be held
39% by Ferrum South Africa (Pty) Ltd, 26% by Mkhombi Investments (Pty) Ltd and 35% by AAI.
AAI is an Oman based investment company chaired by Mr Anvwar Al Balushi, who will be
invited to join the Ferrum Iron Ore board and Moonlight Project steering committee upon
completion of the Agreement. The Moonlight Project provides AAI with potential exposure to
an iron ore project capable of producing high-grade pellet product, located within 200km of
established rail hubs. Ferrum Crescent has already undertaken extensive metallurgical
testwork as part of the Moonlight BFS and earlier this year appointed DANIELI C. Officine
MeccanicheS. p.A. (“Danieli”), a global leader in engineering services and equipment supply, as
the process engineer for the BFS.
Under the Agreement, subject to the satisfaction or waiver of the conditions precedent, an
initial acquisition payment of US$1 million will be made to Ferrum Crescent by the end of
November 2013, with the remaining US$9 million to be paid to the Company during Q1 2014.
Funds received under the Agreement will be used by the Company to progress the Moonlight
BFS and for working capital requirements. The additional US$3.5m AAI contributions to the
BFS costs will be made in prearranged tranches as work progresses.
Corporate
Subsequent to the reporting period, the Company announced that it had received
applications to subscribe for 48 million fully paid ordinary shares and raise up to GBP
873,600. The placement shares will rank equally with existing fully paid ordinary shares
from allotment.
The placement is being conducted in two tranches. The first tranche comprised
44,613,156 shares to raise approximately GBP 811,959. The second tranche, comprising
3,386,844 shares to raise approximately GBP 61,641, is subject to shareholder approval,
as these subscribers will be Mr Ed Nealon and Mr Robert Hair who are Directors and
hence related parties under the provisions of the Corporations Act 2001.
The first tranche of the Placement Shares were admitted to trading on the Australian
Securities Exchange Limited, the AIM market of the London Stock Exchange and on the JSE
Limited on 8 October 2013. Shareholder approval for the second tranche will be sought at
the Company’s annual general meeting.
Mr Robert Hair has indicated that he will subscribe for 480,769 Placement Shares and Mr
Ed Nealon has indicated that he will subscribe for 2,906,075 Placement Shares.
Funds received under the share placements will be used as working capital, including for
the funding of corporate costs and for feasibility and mining right activities.
Receipt of the proceeds of the issue means that the Company remains fully funded,
pending completion of the agreement with Anvwar Asian Investment, to facilitate
completion of the Company’s bankable feasibility study for the Moonlight Iron Ore Project.
Following the first tranche of the placement, the number of ordinary shares on issue is
372,814,541 and following the second tranche of the placement, the number of ordinary
shares on issue will be 376,201,385 shares.
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 2013
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 (179) (179)
(b) development
(c) production
(d) administration (115) (115)
1.3 Dividends received
1.4 Interest and other items of a similar nature
received 9 9
1.5 Interest and other costs of finance paid
1.6 R&D recoupment tax 125 125
1.7 Other – net income from restricted cash
investments (37) (37)
Net Operating Cash Flows (197) (197)
Cash flows related to investing activities
1.8 Payment for purchases of:
(a) prospects
(b) equity investments
(c) other fixed assets
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) 324 324
Net investing cash flows 324 324
1.13 Total operating and investing cash flows
(carried forward) 127 127
1.13 Total operating and investing cash flows
(brought forward) 127 127
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 (15) (15)
(15) (15)
Net financing cash flows
Net increase (decrease) in cash held 112 112
1.20 Cash at beginning of quarter/year to date 548 548
1.21 Exchange rate adjustments to item 1.20 (21) (21)
639 639
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 -
1.24 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 300
Total 500
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 639 548
5.2 Deposits at call
5.3 Bank overdraft
5.4 Other (provide details)
639 548
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
tenements acquired or
increased
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 2,150,000 - $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 / Exercise price Expiry date
cancelled (200,000) - $0.198 07 December 2013
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 October 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 October 2013
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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