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Quarterlly activities and cashflow report for the period ended 31 December 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 31 DECEMBER 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 31 December
2013.
HIGHLIGHTS:
Moonlight Iron Ore Project:
- Ferrum Crescent signs conditional, legally binding letter of intent with Anvwar Asian
Investment (“AAI”) to progress the bankable feasibility study (“BFS”) on the development
of the Moonlight Iron Ore Project
- 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
- Initial payment of US$10m expected 28 February 2014
- AAI internal due diligence process complete and the Company has been informed all key
conditions have been met or waived
- Structuring and shareholders’ agreements now underway between Company and AAI
- 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 successfully raises GBP 873,600 (AU$1.5m) before costs:
- 48 million shares (3,386,844 of which were subject to shareholder approval) 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 BFS
study and mining right activities pending the AAI investment
- Funds from the private placement received in two tranches, with the second tranche
representing subscriptions by two directors of the Company which required shareholder
approval
Cash as at 31 December 2013 was approximately AU$1.35m
Commenting today Ed Nealon, Chairman, said: "The last quarter of 2013 saw Ferrum
Crescent sign the AAI agreement to allow for completion of the Bankable Feasibility Study at
the Moonlight Iron Ore Project. The BFS is investigating the feasibility of developing an open
pit mine and related processing facilities to produce 6Mtpa of high grade (DRI and BF) iron ore
pellets mainly for the export market from the magnetite ore at the Moonlight Deposit. AAI
represents a strategic partner with the depth to support the creation of a new high-grade iron
ore production hub, located near existing infrastructure.”
For more information, please visit www.ferrumcrescent.com or contact:
Australia and Company enquiries:
Ferrum Crescent Limited
Ed Nealon T: +61 8 9380 9653
Executive Chairman
Bob Hair T: +61 414 926 302
Managing Director
UK enquiries:
Ocean Equities Limited (Broker)
Guy Wilkes T: +44 (0) 20 7786 4370
RFC Ambrian Limited (Nominated Adviser)
Sarah Wharry/Stuart Laing
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
During the September 2013 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 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.
On 29 November 2013, the Company announced that the confirmation due diligence
undertaken by AAI had concluded and both parties were working towards finalising the
structure of the transaction and conclude the relevant shareholders’ agreement. The
parties are obliged to carry out certain administrative procedures with the Reserve Bank
of South Africa, with regard to the issue of shares by a South African company to a non-
resident, in order to finalise the structure and in so doing, the Company and AAI agreed to
extend the completion of the transaction to 28 February 2014.
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 test work 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.
Corporate
During the quarter, the Company announced that it had received applications to subscribe for
48 million fully paid ordinary shares to raise up to GBP 873,600. The placement shares rank
equally with existing fully paid ordinary shares from allotment.
The placement was 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, was subject to shareholder approval at the Company’s Annual
General Meeting of shareholders, as these subscribers were Mr Ed Nealon (as to 2,906,075
shares) and Mr Robert Hair (as to 480,769 shares) 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 and the second tranche were admitted on 19 December 2013
following shareholder approval at the Company’s Annual General Meeting of shareholders.
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 BFS study for the Moonlight Iron Ore Project.
Following the placement, the number of ordinary shares on issue is 376,201,385 shares.
It should be noted that various board members and members of staff elected in the
September quarter to reduce or cancel their remuneration packages whilst the Company
secured funding for the Moonlight BFS. Administration costs during the December quarter
were higher than normal as some expenses previously incurred by board members and staff
were reimbursed and staff received previously accrued remuneration.
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 2013
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 (87) (266)
(b) development
(c) production
(d) administration (463) (578)
1.3 Dividends received
1.4 Interest and other items of a similar nature
received 3 12
1.5 Interest and other costs of finance paid
1.6 R&D recoupment tax - 125
1.7 Other – net income on restricted cash
investments 7 (30)
Net Operating Cash Flows (540) (737)
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 (41) (41)
1.11 Loans repaid by other entities
1.12 Other (restricted cash investments) (147) 177
Net investing cash flows (188) 136
1.13 Total operating and investing cash flows
(carried forward) (728) (601)
1.13 Total operating and investing cash flows
(brought forward) (728) (601)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 1,420 1,420
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 29 29
1
1.19. Other – share issue costs (95) (110)
2
1,354 1,339
Net financing cash flows
Net increase (decrease) in cash held 626 738
1.20 Cash at beginning of quarter/year to date 639 548
1.21 Exchange rate adjustments to item 1.20 88 67
1,353 1,353
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 1.2 104
1.24 Aggregate amount of loans to the parties included in item 1.10 41
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 200
Total 400
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 1,353 639
5.2 Deposits at call
5.3 Bank overdraft
5.4 Other (provide details)
1,353 639
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
and of quarter quarter
location
6.1 Interests in mining
tenements and
petroleum tenements
relinquished, reduced or
lapsed
6.2 Interests in mining
tenements and
petroleum 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 380,602,777 374,007,777 Various Fully Paid
securities
7.4 Changes during
quarter
(a) Increases 44,613,156 44,613,156 $0.0315 Fully Paid
through issues 1,267,065 1,267,065 $0.01693 Fully Paid
3,134,327 3,134,327 $0.01755 Fully Paid
3,386,844 3,386,844 $0.0315 Fully paid
(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 400,000 - $0.10 14 December 2015
conversion 500,000 - $0.03 21 November 2016
factor)
7.8 Issued during 500,000 - $0.03 21 November 2016
quarter
7.9 Exercised
during quarter
7.10 Expired / 2,150,000 - $0.40 31 December 2013
cancelled 21,496,727 21,496,727 $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 January 2014
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 and petroleum 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 or petroleum 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 2014
Johannesburg
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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