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FERRUM CRESCENT LIMITED - Interim results for 6 months ended 31 December 2013

Release Date: 13/03/2014 16:00
Code(s): FCR     PDF:  
Wrap Text
Interim results for 6 months ended 31 December 2013

FERRUM CRESCENT 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: AU000000FCR2
("Ferrum Crescent", the "Company")


INTERIM RESULTS FOR SIX MONTH PERIOD ENDED 31 DECEMBER 2013


Ferrum Crescent Limited today announces its results for the six month period ended 31 December 2013.

HIGHLIGHTS

Moonlight Iron Ore Project

- Legally binding letter of intent (“Agreement”) signed with Anvwar Asian Investment (“AAI”)
                 - US$10m to be paid for 35% shareholding in Ferrum Iron Ore (Pty) Limited
                 - US$1.5m to be additionally contributed to on-going costs of the BFS.
                 - The Moonlight Project provides AAI with exposure to an iron ore project capable of
                 producing high-grade pellet product, located within 200km of established rail hubs
         - Mineral Corporation Consultancy updated JORC compliant Mineral Resource estimate
                 - 52.6Mt @ 31.3% Fe in the Measured category, 83Mt @ 27.4% Fe in the Indicated
                 category and 172.1Mt @ 25.3% Fe in the Inferred category
                 - Phase 3 data and cut off assumed for the first time

Corporate
        - AUD 1,553,211 net loss after tax of (net loss of AUD 1,109,961).
        - AUD 1,612,202 Group assets (June 2013: AUD 1,418,161), incurred a net loss of $1,687,725
        - $486,088 cash in operations (2012: $2,277,707)
        - As at 30 June 2011, a financial liability was created in the accounting for the BEE share
        subscription agreement

Subsequent to reporting period
        - Appointment of Tom Revy as Managing Director to oversee BFS completion
        - Extension of AAI completion announced March 2014 due to administrative procedures with the
        Reserve Bank of South Africa needing finalisation

Commenting on the half yearly results, Chairman Ed Nealon said:

"The second half of last year saw us sign an agreement to allow Ferrum to complete the Moonlight Project’s
Bankable Feasibility Study. It was also satisfying to see our indicated resource increase with the inclusion
of a very conservative cut-off depth. Post period we have also appointed Tom Revy as Managing Director
of Ferrum to oversee the completion of the BFS..I look forward to 2014 and moving Moonlight towards
being a producer of a high quality iron ore product that is situated near established infrastructure."

Below is a summary of the Half-Yearly Financial Report, to obtain the full copy please visit the company's
website www.ferrumcrescent.com

 Australia and Company enquiries:
Ferrum Crescent Limited
Ed Nealon T: +61 8 9380 9653
Executive Chairman
Tom Revy T: +61 8 9380 9653
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


Directors’ report

Your directors present their report on Ferrum Crescent Limited (“Ferrum”, the “Company” or, together with its
controlled entities, the “Group”) for the half-year from 1 July 2013 to 31 December 2013.

Directors
The names of the Company’s directors in office during the half-year and until the date of this report are set out
below. Directors were in office for the entire period unless otherwise stated.

Ed Nealon
Tom Revy (appointed 19 February 2014)
Bob Hair
Klaus Borowski
Kofi Morna
Ted Droste
Grant Button


Review and results of operations

Operating Results

During the half-year 1 July 2013 to 31 December 2013, the Group recorded a net loss after tax of AUD
1,687,725 (1 July 2012 to 31 December 2012: net loss of AUD 1,011,900). As at 30 June 2011, a financial
liability was created in the accounting for the BEE share subscription agreement. Australian Accounting
Standards require this liability, which will be satisfied by the issue of the shares, to be re-measured each
reporting period to its fair value. The assessment of fair value is significantly impacted by the market value of the
shares to be issued in comparison with the subscription price denominated in RAND. As at 31 December 2013,
this liability had decreased as a result of a movement in the underlying Company share price and the
AUD/RAND exchange rates and the settlement of the first tranche of the BEE share subscription which
happened on 28 November 2012. The second tranche was due to be finalised within 120 days from 28
November 2012 as per the terms of the BEE share subscription agreement. However, this has been extended
until 31 January 2015.

Principal Activities during the half-year

Moonlight Iron Ore Project
Work during the past six months has focused on progressing the Moonlight Iron Ore Project (“Moonlight” or the
“Project”) to the development stage. To that end, the Company announced during the half year that 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 Moonlight. Under the Agreement, AAI will pay US$10m
to Ferrum Crescent in return for a 35% shareholding in Ferrum Iron Ore (Pty) Limited (“FIO”) (previously,
Turquoise Moon Trading 157 (Pty) Limited), which holds the mining right over the three farms Moonlight, Julietta
and Gouda Fontein, that contain the Moonlight Project. AAI will also contribute US$1.5m to the on-going costs of
the BFS. The Agreement was 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 (Pty) Limited, the shares of which are currently held as to 74% by Ferrum
SouthAfrica (Pty) Limited (“FSA”) (previously, Nelesco 684 (Pty) Limited) and as to 26% by Mkhombi
Investments (Pty) Limited (“MI”). Following the investment, the shares of FIO will be held 39% by FSA, 26% by
MI 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 mid-March 2014.

AAI is an Oman based investment company chaired by Mr Anvwar Al Balushi, who will be invited to join the FIO
board and Moonlight steering committee upon completion of the Agreement. The Moonlight Project provides AAI
with 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 in February 2013 appointed DANIELI C. Officine MeccanicheS. p.A. (“Danieli”), a global
leader in engineering services and equipment supply, as the process engineer for the BFS.

Mineral Resource

As previously reported, the Mineral Corporation Consultancy (Pty) Ltd (“The Mineral Corporation”) was
commissioned to carry out an updated JORC compliant Mineral Resource estimate taking into account the
results of the phase 3 drilling and assays on the Moonlight deposit (“the Report”). Phase 3 consisted of 11 holes
totalling 990m of diamond core drilling and 13 holes totalling 1,600m of reverse circulation (“RC”) drilling. The
Mineral Corporation has conducted a thorough re-interpretation of the geological structure of Moonlight, based
on historical South African Iron and Steel Industrial Corporation (“Iscor”) data collated and validated by Ferrum
and recent Ferrum exploration results. Within the constraints of having a cut-off grade of 16% iron, geological
losses of 5% and a depth constraint of between 100m and 250m, depending upon dip and the number of
mineralised zones present, the JORC compliant Mineral Resources at Moonlight are estimated to be as follows:

 Category                           Gross                     Net (attributable to Ferrum Crescent at 97%)
              Tonne       Fe       SiO2   Al2O3   Contained   Tonne       Fe     SiO2    Al2O3    Contained
               (Mt)      (%)       (%)     (%)     Fe (Mt)      (Mt)     (%)     (%)      (%)       Fe (Mt)
 Inferred     172.1      25.3      51.2    4.8      43.5       166.9     25.3    51.2     4.8         42.2
 Indicated     83.0      27.4      50.1    4.0      22.7        80.5     27.4    50.1     4.0         22.1
 Measured      52.6      31.3      47.3    2.5      16.5        51.0     31.3    47.3     2.5         16.0
 Total        307.7      26.9      50.3    4.2      82.8       298.5     26.9    50.3     4.2         80.3
              Tonnes are rounded
Note: Ferrum is the operator and owns 97% of the Moonlight Project

Based on these results, your directors believe that whilst the total average Fe grade has decreased slightly
(previously estimated to be a JORC compliant Mineral Resource of 74Mt @ 33% Fe in the Indicated Resource
category and 225Mt @ 29% Fe in the Inferred Resource category), the tonnage has increased proportionately
along with a substantial increase in the confidence and classification of the Mineral Resource. Furthermore, your
directors are of the opinion that the depth constraint of 250m (maximum) is conservative, particularly as the
previous estimation was not constrained in this way.

      Drilling Technique
      Drilling data from Iscor and three phases of Ferrum Crescent exploration inform the estimates. The drilling
      comprised open hole, RC and diamond core drilling and was all vertical. A total of 122 RC holes and 89
      diamond core holes were accepted for the estimates.

      Sampling Technique
      Limited information on the sampling techniques for the Iscor data is known. For the Ferrum Crescent
      exploration, industry standard sampling techniques were adopted. RC samples (1m-2m) were riffle split
      on site and diamond core samples were halved with a diamond saw. Primary samples and quality control
samples were submitted for analysis to Genalysis Laboratory Services (Johannesburg) for analysis by
Intertek Utama Services (Jakarta).

Drill Sample Recovery
Limited information on the sample recovery for the Iscor data is known. With the exception of surficial
rubble, the sample recovery through the mineralised zones for the Ferrum Crescent exploration was
acceptable.

Geological Logging
The Iscor data included electronic codes for the main lithological unit, certain sub-units, and the core
bedding angles. All geological information during Ferrum Crescent exploration was logged in acceptable
detail, and stored in an MS Access database. This included lithological, structural and geotechnical
information.

Quality of Assay Data / QAQC
No information on the quality of assay data for the Iscor data was obtained. The Ferrum Crescent
samples were analysed at an accredited laboratory (Genalysis / Intertek), and appropriate standards,
blanks and duplicates inserted in the sample stream. The Mineral Corporation has reviewed the results
from these control samples and considers the accuracy and reliability of the analyses to be acceptable.

Verification of sampling and assaying
The Iscor data was verified by means of the identification and re-surveying of borehole collars in the field,
and by means of twin-drilling. On the basis of the twinning, the open-hole data from Iscor (142 holes) was
considered unacceptable for Mineral Resource estimation. The remaining RC and diamond core drilling
showed reasonably good correlation of mineralisation depth and abundance, and was considered
acceptable.

Surveying
All Ferrum Crescent boreholes were surveyed by a registered surveyor. Of the Iscor holes, 127 collars
were re-surveyed by a registered surveyor, and good correlation between the historical and Ferrum
Crescent survey locations were found.

Auditing
No audits of the Iscor exploration results, with the exception of the verification described above have been
undertaken. The Mineral Corporation reviewed the results of the first two phases of Ferrum Crescent’s
drilling prior to carrying out the estimates. Phase 3 of Ferrum Crescent’s exploration was carried out by
The Mineral Corporation.

Database Integrity
The compiled database for the estimates was housed in an MS Access database. In addition to the
verification and QA/QC already described, validation of the sampling data for over-lapping sampling
intervals, duplicate samples and spurious data was carried out.

Geological Interpretation
A thorough re-interpretation of the geological structure and correlation between mineralised zones was
carried out. Magnetite is interpreted to be hosted in four zones (Zone A to D), which have been subjected
to folding, parallel to the regional (Limpopo Mobile Belt) orientation. Younger faulting, oriented parallel to
and orthogonal to this trend, is interpreted. The geological interpretation is considered appropriate for the
level of estimates, and the Mineral Resource classification takes the confidence in the interpretation into
account.

Dimensions
D Zone is approximately 200m x 400m x 30m
C Zone (West) is approximately 1400m x 250m x 35m
C Zone (East) is approximately 1100m x 700m x 30m
B Zone is approximately 1500m x 800m x 25m
A Zone is approximately 1600m x 1200m x 17m

Geological Modelling
Wireframes representing the geological interpretation were generated to constrain the block model.

Drillhole Compositing Procedures
5m vertical borehole composites were utilised, informed by an assumed minimum mining height. These
composites were not at right angles to the mineralised zones, but as the dips are shallow (7° to 30° and
typically less than 20°) and a 3-dimensional block model was used, the use of vertical composites is
unlikely to introduce any bias.

Variography
      Variograms parallel to the dip of the mineralised zones were calculated and modelled. Vertical grade
      distribution utilised downhole variograms. Variograms of between 150m and 250m were obtained in the
      plane of the mineralised zone and between 7m and 30m downhole.

      Drillhole spacing
      The combination of Ferrum Crescent’s exploration and the KIOL data has provided an acceptable drillhole
      spacing which ranges from 100m x 100m to 200m x 300m.

      Block Model
      Horizontal block dimensions were 50m x 50m and 5m in the vertical, informed by borehole spacing and a
      conceptual minimum mining unit. The block model was rotated to the average dip (12°).

      Grade Estimation Methodology
      Ordinary Kriging was employed for grade estimates. A three stage search strategy was employed. A
      minimum of 5 and a maximum of 20 samples was used within the range of the variogram for the first
      search. The second search was twice the volume of the first, and the third extended to the limits of the
      mineralised zones. The search and variogram ellipse were oriented to local dip and strike variations using
      “Dynamic Anisotropy” in Datamine Studio v3.

      Accuracy and confidence
      Plan and section plots were analysed to evaluate the adherence of the estimation methodology to the
      geological model. The methodology was found to honour the grade continuity trends, which are assumed
      to be parallel to the dip of the mineralised zones.

      Moisture
      Tonnage was calculated on a dry basis.

      Bulk Density
      The Iscor data included density measurements for all diamond core holes. No information was provided
      on the methodology used to obtain these density data. The diamond core data from Ferrum Crescent
      exploration included density measurements obtained by the ‘water immersion’ method. A strong
      correlation between density and Fe was observed, and used to estimate block density after grade
      estimation.

      Mining Factors
      A minimum mining unit of 50m x 50m x 5m aided in the selection of block size. Approximate stripping
      ratios were calculated to inform the maximum depth constraint for the Mineral Resources.

      Metallurgical Considerations
      On the basis of preliminary test work, The Mineral Corporation has assumed that the Fe can be extracted
      by means of comminution and magnetic separation to form a magnetite concentrate.

      Cut-off Parameters
      A cut-off of 16% Fe and a maximum depth of between 250m and 100m depending upon dip and the
      number of mineralised zones was applied.

      Resource classification
      The borehole spacing, surface mapping, structural interpretation, variography and kriging error estimates
      inform Mineral Resources which are classified as Inferred, Indicated and Measured. In areas of well-
      defined geological structure and modest grade variability, the 100m x 100m grid is sufficient for Measured
      Mineral Resources.

      Resource Reporting
      The Mineral Resource estimates have been compiled in accordance with the guidelines defined in the
      Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC
      Code, 2004 Edition).

In September 2012 the Company announced the completion of an aeromagnetic survey over the Moonlight,
Julietta and Gouda Fontein farms of its Moonlight Iron Ore Project. The survey consisted of 2,827 line kilometres
                                                2
on 50m line spacing over an area of 129 km . The Company, having had a close involvement in the coordination
of the survey, is confident that the results of this survey will greatly assist in the planning of future exploration on
the area covered by the Mining Right and in future mining operations.

The Mineral Corporation and its associates quality controlled the raw geophysical data, extracted and processed
geophysical results from the data, provided a geological interpretation of the results, integrated these with the
existing geological modelling and analysed the implication of these results for future exploration targets.

The magnetite-bearing quartzite, which comprises the Moonlight Deposit, provides high intensity magnetic
anomalies that have permitted a detailed interpretation.
With regard to the current Mineral Resource area on Moonlight Farm, The Mineral Corporation is of the view that
the geophysical results do not identify any significant inconsistencies in the existing structural interpretation,
which informs the current Mineral Resource estimate. The geophysical results and interpretation support the
existing structural interpretation with respect to the major interpreted fault orientations and with respect to Zone
A, Zone B and Zone C West. The geophysical results suggest that the interpreted western extent of Zone C
East and the sparsely drilled Zone D warrant review and further exploration to test the potential for additional
mineralised zones.

The Mineral Corporation concludes that these results have identified targets on Moonlight Farm which could
represent potential upside for the current Mineral Resources at a modest exploration cost. The geophysical data
interpretation on the adjacent Julietta Farm and Gouda Fontein Farm confirms and significantly enhances the
reconnaissance ground magnetic surveys that were carried out by Ferrum on these farms, and an important
anomaly close to, but outside, the previously planned exploration drilling area has been identified. The
improved understanding of the geology on Julietta and Gouda Fontein should enable the proposed exploration
drilling plans on these farms to be substantially optimised.

The Company had announced previously that it advanced plans to implement a drilling programme on the farms
Julietta and Gouda Fontein (which are covered by the granted Mining Right, along with the farm Moonlight) to
increase the total resource estimate on the Moonlight Iron Ore Project. Your directors determined, given that it
has sufficient resources on the Moonlight Farm to support mining for in excess of 20 years (for which the Group
has an existing Mining Right and associated mining environmental approvals), that management attention
should be focused on obtaining definitive answers to logistical and related infrastructure questions including rail,
power, water and port services to achieve the optimal infrastructure mix for the definitive feasibility study.

Infrastructure

Positive discussions at a high level relating to rail, power, ports and water between the Company, Transnet and
other South African infrastructure suppliers have been held prior to the reporting period. In addition, Ferrum has
been and continues discussing such infrastructure needs with other resources companies within the Waterberg
region (where the anticipated Moonlight Iron Ore Project is located). These companies, particularly those within
the coal mining sector, have similar infrastructure requirements to Ferrum, and initial discussions have led to a
potentially more optimal outcome than previously contemplated.

Corporate

During the half-year, the Company announced that it had received applications to subscribe for 48 million fully
paid ordinary shares to raise up to AUD1,588,459 (GBP 873,600) before costs. 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 AUD1,405,314 (GBP 811,959). The second tranche, comprising 3,386,844 shares to raise
approximately AUD106,686 (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 was admitted to trading on the Australian Securities Exchange, the
AIM market of the London Stock Exchange and on the JSE Limited on 8 October 2013, and the second tranche
was admitted on 19 December 2013 following shareholder approval at the Company’s Annual General Meeting
of shareholders.

Funds received under the share placements are being used as working capital, including for the funding of
corporate costs and for feasibility and mining right activities.

Five officers elected to participate in the Ferrum salary sacrifice plan, with the result that 4,401,392 shares were
issued to two of those officers during the half-year. In addition, 500,000 options with an exercise price of AUD
0.03 per option, were granted to two members of management.

Additionally, 200,000 options were cancelled in September 2013, and 23,646,727 options were cancelled during
December 2013.

Subsequent to the end of the reporting period, Mr Tom Revy assumed the role of Managing Director and Mr Bob
Hair resigned as Managing Director but remains as Executive Director.

Going Concern
The Group has current assets of AUD 1,612,202 as at 31 December 2013 (June 2013: AUD 1,418,161),
incurred a net loss of $1,687,725 (2012: $1,011,900) and had cash used in operations of $830,290 (2012:
$2,277,707) for the six months period then ended.

The Group’s forecast cash flow requirements for the 15 months ending 31 March 2015 reflects cash outflows
from operating and investing activities, which takes into account a combination of committed and uncommitted
but currently planned expenditure. The Group’s forecast indicates that the Group will need to raise capital to
enable it to settle its liabilities as and when they fall due and continue to meet its incurred, committed and
currently planned expenditure.

This financial report has been compiled on a going concern basis. In arriving at this position the directors are
satisfied that the Group will have access to sufficient cash as and when required to enable it to fund
administrative and other committed expenditure.

The directors have taken into consideration that once the Anvwar Asian Investment (“AAI”) transaction has been
completed, AAI will pay US$10m to Ferrum Crescent in return for a 35% shareholding in Ferrum Iron Ore (Pty)
Limited (“FIO”) (previously, Turquoise Moon Trading 157 (Pty) Limited), which holds the mining right over the
three farms Moonlight, Julietta and Gouda Fontein, that contain the Moonlight Project. AAI will also contribute
US$1.5m to the on-going costs of the BFS. Management has plans to significantly cut uncommitted project
expenditure and administrative costs, should the AAI funding not materialise.

The financial statements do not include any adjustments relating to the recoverability or classification of
recorded asset amounts, or to the amounts or classification of liabilities that might be necessary should the
Group not be able to continue as a going concern.

Events subsequent to reporting date

Subsequent to the end of the reporting period, Mr Tom Revy assumed the role of Managing Director and Mr Bob
Hair resigned as Managing Director but remains as Executive Director.

Apart from above and other events to the extent described elsewhere in this Directors’ Report, there has not
arisen in the interval between the end of the half year and the date of this report any item, transaction or event of
a material or unusual nature likely, in the opinion of the Directors of the Company, to affect:

      (i)      The Group’s operations in future financial periods; or

      (ii)     The results of those operations in future financial periods; or

      (iii)    The Group’s state of affairs in future financial periods.

Competent Person’s 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 Exploration Results,
Mineral Resources and Ore Reserves’ and as defined in the June 2009 Edition of the AIM Note for Mining and
Oil and Gas Companies. Mr. Nupen consents to the inclusion in this statement of the matters based on his
information in the form and context in which it appears.



Ferrum Crescent Limited
ACN 097 532 137
Consolidated Statement of Comprehensive Income
For the half-year from 1 July 2013 to 31 December 2013

                                                                             6 months to 31        6 months to 31
                                                                             December 2013         December 2012
                                                                  Note            AUD                   AUD

 Revenue from continuing operations
 Revenue                                                           3(a)                 19,669                73,354
                                                                                        19,669                73,354
 Fair value (loss) / gain on financial instrument                  3(b)                (642,742)               27,734
 Exploration expenditure                                                               (142,310)             (398,156)
 Foreign exchange gain                                                                   47,802                41,593
 Share based payments                                                                   (113,274)              (4,665)
 Other expenses                                                     3(c)                (856,870)             (953,403)
 (Loss) before income tax                                                             (1,687,725)            1,213,543)
 Income tax benefit                                                                            -               201,643

 Net (loss) for the period                                                             (1,687,725)           (1,011,900)

 Other comprehensive income
 Items that may be reclassified subsequently to profit and loss:
 Net exchange gain / (loss) on translation of foreign operation                            17,373                (98,061)
 Net fair value gains on available for sale investment (net of tax)                        29,297                     -
 Other comprehensive income/(loss) for the period, net of tax                              46,670                 (98,061)


 Total comprehensive (loss) for the period                                              (1,641,055)             (1,109,961)

 Net (loss) for the period is attributable to:
 Non-controlling interest                                                                         -                        -
 Owners of the parent                                                                    (1,687,725)              (1,011,900)
                                                                                         (1,687,725)              (1,011,900)

 Total comprehensive (loss) for the period attributable to:
 Non-controlling interest                                                                          -                        -
 Owners of the parent                                                                     (1,641,055)              (1,109,961)
                                                                                          (1,641,055)               (1,109,961)

(Loss) per share attributable to the ordinary
equity holders of the Company

 Loss per share                                                                           Cents per share            Cents per share

 - basic (loss) per share                                                                           (0.49)                      (0.34)


 - diluted (loss) per share                                                                         (0.49)                      (0.34)




The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes




Ferrum Crescent Limited
ACN 097 532 137
Consolidated Statement of Financial Position
As at 31 December 2013


                                                                                    31 December                 30 June
                                                                                       2013                          2013
                                                                      Note             AUD                           AUD
 Current Assets
 Cash and cash equivalents                                                               1,352,902                  548,265
 Trade and other receivables                                                                183,589                  269,305
 Financial assets                                                      4                      33,923                 549,043
 Prepayments                                                                                  41,788                  51,548
 Total Current Assets                                                                      1,612,202               1,418,161


 Non-current Assets
 Plant and equipment                                                                           58,801                  73,488
 Financial assets                                                      4                      506,308                 683,074
 Total Non-current Assets                                                                     565,109                 756,562


 Total Assets                                                                                2,177,311               2,174,723


 Current Liabilities
 Trade and other payables                                                                      277,049                 282,174
 Provisions                                                                                     31,868                  27,057
 Financial liability                                                  5                        129,707                
      -
 Total Current Liabilities                                                                     438,624                 309,231


 Total Liabilities                                                                              438,624                 309,231


 NET ASSETS                                                                                    1,738,687               1,865,492


 Equity
 Contributed equity                                                  6                        29,257,454              27,856,478
 Reserves                                                            8                        (7,891,736)             (8,051,680)
 Accumulated losses                                                                          (19,627,031)            (17,939,306)
 PARENT INTEREST                                                                               1,738,687                1,865,492
 NON-CONTROLLING INTEREST                                                                              -                        -
 TOTAL EQUITY                                                                                  1,738,687                1,865,492

The above consolidated statement of financial position should be read in conjunction with the accompanying
notes
      Ferrum Crescent Limited
ACN 097 532 137
Consolidated Statement of Changes in Equity

For the half-year from 1 July 2013 to 31 December 2013

                                                                Employee                                     Foreign        Available
                                                  Contributed Share Incentive Accumulated      Option        Exchange       For Sale
                                                                                                                                              Equity       Total
                                                    Equity       Reserve        Losses         Reserve        Reserve       Reserve          Reserve       Equity
                                                     AUD           AUD           AUD            AUD            AUD           AUD               AUD          AUD
  At 1 July 2012                                   26,882,823       343,785    (16,038,018)    1,404,425       125,724                  -   (10,126,072)    2,592,667
  (Loss) for the period                                     -              -    (1,011,900)              -              -               -              -   (1,011,900)
  Other comprehensive loss (net of tax)                     -              -               -             -     (98,061)                 -              -      (98,061)
  Total comprehensive loss (net of tax)                     -              -    (1,011,900)              -     (98,061)                 -              -   (1,109,961)
  Transactions with owners in their capacity as
  owners                                                    -              -               -             -              -               -              -              -
  Shares issued during the period net of
  transaction costs                                 1,027,158              -               -             -              -               -              -    1,027,158
  Options issued during the period                          -         4,644                -             -              -               -              -        4,644
  At 31 December 2012                              27,909,981       348,429    (17,049,918)    1,404,425        27,663                  -   (10,126,072)    2,514,508

  At 1 July 2013                                   27,856,478       513,702    (17,939,306)    1,404,425       130,462          25,803      (10,126,072)    1,865,492
  (Loss) for the period                                     -              -     (1,687,725)             -              -               -              -    (1,687,725)
  Other comprehensive income (net of tax)                   -              -               -             -       17,373          29,297                -        46,670
  Total comprehensive loss (net of tax)                     -              -     (1,687,725)             -       17,373          29,297                -    (1,641,055)
                                                                                                                                        -
  Directors salary sacrifice for shares                     -       101,274                -             -              -                              -      101,274
  Shares issued during the period net of
  transaction costs                                 1,400,976              -               -             -              -               -              -    1,400,976
  Options issued under employee option plan                 -              -               -     12,000                 -               -              -       12,000
  At 31 December 2013                              29,257,454       614,976    (19,627,031)    1,416,425       147,835          55,100      (10,126,072)    1,738,687
Ferrum Crescent Limited
ACN 097 532 137
Consolidated Statement of Cash Flows
For the period 1 July 2013 to 31 December 2013

                                                                         6 months to 31        6 months to 31
                                                                         December 2013         December 2012
                                                                Note            AUD                  AUD
 Cash flows from operating activities
 Interest received                                                                   12,167                51,260
 Income from available for sale financial assets                                      7,502                22,094
 Payments to suppliers and employees                                              (709,734)         (1,675,808)
 Payment for exploration and evaluation costs                                     (140,225)              (675,253)


 Net cash flows used in operating activities                                      (830,290)         (2,277,707)


 Cash flows from investing activities
 Payments for plant and equipment                                                          -                 (917)
 Payments for available for sale financial assets                                   206,063                      -


 Net cash flows from / (used in) investing activities                               206,063                  (917)


 Cash flows from financing activities
 Proceeds from issue of shares                                                    1,512,000               780,000
 Costs of capital raising                                                         (111,024)                (7,241)
 Net cash flows from financing activities                                         1,400,976               772,759
 Net increase / (decrease) in cash and cash
 equivalents                                                                        776,749         (1,505,865)
 Cash and cash equivalents at beginning of period                                   548,265          3,340,076
 Effect of foreign exchange on cash and cash equivalents                             27,888               (38,427)


 Cash and cash equivalents at end of period                                       1,352,902          1,795,784


The above consolidated statement of cash flows should be read in conjunction with the accompanying notes

NOTE 1: GENERAL INFORMATION AND BASIS OF PREPARATION AND ACCOUNTING POLICIES

Corporate information

The financial report of Ferrum Crescent Limited for the half-year ended 31 December 2013 was authorised for
issue in accordance with a resolution of the directors on 13 March 2014. Ferrum Crescent Limited is a company
incorporated in Australia and limited by shares, which are publicly traded on the Australian Securities Exchange
(ASX), Johannesburg Stock Exchange Limited (JSE) and London Stock Exchange (AIM).

The nature of operations and principle activities of the Group are described in the Directors’ Report.

Basis of preparation

The half-year financial report is a general purpose condensed financial report prepared in accordance with the
requirements of the Corporations Act 2001 and AASB 134: Interim Financial Reporting. Compliance with AASB
134 ensures compliance with IAS 34 ‘Interim Financial Reporting’.

This half-year financial report does not include full disclosures of the type normally included in an annual
financial report. Therefore, it cannot be expected to provide as full an understanding of the financial
performance, financial position and cash flows of the Company as in the full financial report.
It is recommended that this half-year financial report be read in conjunction with the annual financial report for
the year ended 30 June 2013 and any public announcements made by Ferrum Crescent Limited during the half-
year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the
ASX Listing Rules.

The half-year report has been prepared on a historical cost basis except for the forward subscription agreement
and the available-for-sale financial assets which are measured at fair value. The Company is domiciled in
Australia and all amounts are presented in Australian dollars, unless otherwise noted.

For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting
period.

The preparation of the half-year financial reports requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expense. Actual results may differ from these estimates.

In preparing this half-year financial report, the significant judgements made by management in applying the
Company’s accounting policies and the key sources of estimation uncertainty were the same as those applied to
the financial report for the year ended 30 June 2013.

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements
are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for
the year ended 30 June 2013, except for the adoption of new standards and interpretations effective as of 1
January 2013 detailed below:

- AASB 119 (Revised 2011) Employee Benefits
- AASB 10 Consolidated Financial Statements
- AASB 11 Joint Arrangements
- AASB 12 Disclosure of Interest in Other Entities
- AASB 13 Fair Value Measurement


NOTE 1: GENERAL INFORMATION AND BASIS OF PREPARATION AND ACCOUNTING POLICIES
(CONTINUED)

The nature and the impact of each new standard/amendment is described below:

AASB 119 (Revised 2011) Employee Benefits
The revised standard changes the definition of short term employee benefit. The distinction between short-term
and other long-term employee benefits is now based on whether the benefits are expected to be settled wholly
within 12 months after the reporting date.

The change in distinction between short-term and other long-term employee benefits did not have a significant
impact on the Group.

AASB 10 Consolidated Financial Statements
AASB 10 establishes a single control model that applies to all entities including special purpose entities. AASB
10 replaces the parts of previously existing AASB 27 Consolidated and Separate Financial Statements that dealt
with consolidated financial statements and SIC-12 Consolidation – Special Purpose Entities. AASB 10 changes
the definition of control such that an investor controls an investee when it is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect those returns through its power over
the investee. To meet the definition of control in AASB 10, all three criteria must be met, including: (a) an
investor has power over an investee; (b) the investor has exposure, or rights, to variable returns from its
involvement with the investee; and (c) the investor has the ability to use its power over the investee to affect the
amount of the investor’s returns.

AASB 10 had no impact on the consolidation of investments held by the Group.

AASB 11 Joint Arrangements
AASB 11 replaces AASB 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities — Non-monetary
Contributions by Venturers. AASB 11 removes the option to account for jointly controlled entities (JCEs) using
proportionate consolidation. Instead, JCEs that meet the definition of a joint venture under AASB 11 must be
accounted for using the equity method.
AASB 11 had no impact on the Group as the Group has no joint ventures.

AASB 12 Disclosure of Interests in Other Entities
AASB 12 sets out the requirements for disclosures relating to an entity’s interests in subsidiaries, joint
arrangements, associates and structured entities. None of these disclosure requirements are applicable for the
half-year financial report.

AASB 13 Fair Value Measurement
AASB 13 establishes a single source of guidance under AASB for all fair value measurements. AASB 13 does
not change when an entity is required to use fair value, but rather provides guidance on how to measure fair
value under AASB when fair value is required or permitted. AASB 13 also requires specific disclosures on fair
values, some of which replace existing disclosure requirements in other standards, including AASB 7 Financial
Instruments: Disclosures.

AASB 13 did not have a significant impact as the Group does not have significant assets or liabilities carried at
fair value. Additional disclosure requirements are detailed in Note 13 to the half-year financial statements.


NOTE 1: GENERAL INFORMATION AND BASIS OF PREPARATION AND ACCOUNTING POLICIES
(CONTINUED)

Going Concern

The Group has current assets of AUD 1,612,202 as at 31 December 2013 (June 2013: AUD 1,418,161),
incurred a net loss of $1,687,725 (2012: $1,011,900) and had cash used in operations of $830,290 (2012:
$2,277,707) for the six months period then ended.

The Group’s forecast cash flow requirements for the 15 months ending 31 March 2015 reflects cash outflows
from operating and investing activities which takes into account a combination of committed and uncommitted
but currently planned expenditure. The Group’s forecasts indicates that the Group will need to raise capital to
enable it to settle its liabilities as and when they fall due and continue to meet its incurred, committed and
currently planned expenditure.

This half-year financial report has been compiled on a going concern basis. In arriving at this position the
directors are satisfied that the Group will have access to sufficient cash as and when required to enable it to
fund administrative and other committed expenditure. The directors have taken into consideration that once the
Anvwar Asian Investment (“AAI”) transaction has been completed, AAI will pay US$10m to Ferrum Crescent in
return for a 35% shareholding in Ferrum Iron Ore (Pty) Limited (“FIO”) (previously, Turquoise Moon Trading 157
(Pty) Limited), which holds the mining right over the three farms Moonlight, Julietta and Gouda Fontein, that
contain the Moonlight Project. AAI will also contribute US$1.5m to the on-going costs of the BFS. Management
has plans to significantly cut uncommitted project expenditure and administrative costs should the AAI funding
not materialise.

The financial statements do not include any adjustments relating to the recoverability or classification of
recorded asset amounts, or to the amounts or classification of liabilities that might be necessary should the
Group not be able to continue as a going concern.

Comparatives
Comparatives for contributed equity and share based payments have been restated to better reflect the
underlying transaction for shares issued under the employee share plan.

NOTE 2: SEGMENT INFORMATION

For management purposes, the Group is organised into one main operating segment, which involves mining
exploration for iron ore in South Africa. All of the Group’s activities are interrelated, and discrete financial
information is reported to the Board (Chief Operating Decision Makers) as a single segment. Accordingly, all
significant operating decisions are based upon analysis of the Group as one segment. The financial results from
this segment are equivalent to the financial statements of the Group as a whole.


NOTE 3: REVENUE AND EXPENSES

The loss for the half-year includes the following items:
                                                                              Dec 2013            Dec 2012
                                                                                   AUD                  AUD
 (a) Revenue
 Interest received                                                               12,167              51,260
 Investment income                                                                7,502              22,094
 Total Revenue                                                                   19,669              73,354

 (b) Fair value (losses)/gains
 Fair value (loss)/gain on financial instrument (note 5)                      (642,742)              27,734
                                                                              (642,742)              27,734

 (c) Other expenses
 Other expenses include the following:
     - Depreciation                                                              12,475              15,286
      - Loss on disposal of plant and equipment                                     180                    -
      - Consulting services                                                    135,877             156,987
      - Employment related services                                            130,942             101,695
      - Other                                                                  577,396             679,435
                                                                               856,870             953,403

NOTE 4: FINANCIAL ASSETS
                                                                              Dec 2013             Jun 2013
                                                                                  AUD                 AUD
 Current
 Rental and other deposits                                                        5,697               6,868
 Rehabilitation trust                                                           28,226              29,140
 Financial asset at fair value through profit and loss –
 forward subscription agreement (Note 5)                                              -            513,035
                                                                                33,923             549,043
 Non-current
 Available for sale financial assets                                           506,308             683,074
                                                                               506,308             683,074


NOTE 5: FINANCIAL LIABILITY
                                                                            Dec 2013             Jun 2013
                                                                                AUD                 AUD
 Current
 Financial liability at fair value through profit and loss
 – forward subscription agreement                                              129,707                     -
                                                                               129,707                     -

In 2010, various agreements were entered into in respect of the minority interest in the Moonlight Iron Project.

A company, Mkhombi Investments (Pty) Ltd (“MI”), which met the requirements of applicable South African
legislation in respect of historically disadvantaged persons (referred to in South Africa as being “BEE controlled”),
entered into an agreement on 26 October 2010 with the then current holder of 26% of Ferrum Iron Ore Pty Ltd
(“FIO”) (formerly Turquoise Moon Trading 157 (Pty) Ltd) to purchase that holder’s right, title and interest in FIO
for ZAR30 million (approximately AUD4.4 million) (“FIO Sale Agreement”). The South African Department of
Mineral Resources expressed its support of the transaction.

Ferrum South Africa Pty Ltd (“FSA”) (formerly Nelesco 684 (Pty) Ltd), a wholly owned subsidiary of the Ferrum
Crescent Ltd, entered into agreements with MI and its holding company, Mkhombi AmaMato (Pty) Ltd (“MA”),
the terms of which provide for the following to take place:
a) FSA was issued shares in MI such that it holds an initial 32.17% interest in MI, with the remaining 67.83%
held by MA;
b) MA lent the sum of ZAR7.5 million to MI, to be applied as part of the purchase price under the FIO Sale
Agreement. The advance, which was made as at 31 December 2010, did not attract interest and was only
repayable in certain circumstances (namely, the failure of the conditions precedent set out in the Subscription
Agreement, as defined below);
c) FSA lent the sum of ZAR22.5 million to MI, to be applied as paying the balance of the purchase price under
the FIO Sale Agreement. The advance, which was made as at 31 December 2010, did not attract interest and
was repayable in certain circumstances (namely, the failure of the conditions precedent set out in the
Subscription Agreement, as defined below);
d) MI would issue shares and / or FSA will transfer some of its shares in MI so that 11.54% of MI’s shares on
issue are held by a trust representing the locally impacted community, with the resulting shareholdings being MA
60%, FSA 28.46%, and the locally impacted community 11.54%; and
e) MA would, subject to the conditions precedent to the Subscription Agreement, as defined below, sell its entire
right, title and interest in, and all of its claims against, MI to FSA for ZAR7.5 million (AUD 780,000).
The above transaction was completed in the previous financial year.

A subscription agreement was entered into between Ferrum Crescent Limited and MA on 4 November 2010 (the
“Subscription Agreement”). On completion of the Subscription Agreement (subject to the fulfilment of the
conditions precedent to that agreement), MA would subscribe for such number of shares in Ferrum Crescent
Limited as was equal to 7.8% of the issued shares at that time (the “First Subscription”). The price payable for
the subscription for the Shares under the First Subscription was set at ZAR7.5 million. This first tranche of the
Subscription Agreement has been completed.


NOTE 5: FINANCIAL LIABILITY (CONT.)

Under the subscription agreement, AmaMato was to, on or before the later of (i) the date falling 10 business
days after the Closing Date (as defined in the Subscription Agreement and extension to the Subscription
Agreement) and (ii) 30 November 2012 (the “Subscription Period”), which period will be extended by the
Company for a period of 1 year in the event that it raises not less than ZAR7.5 million in 2011, subscribe for a
further 7.8% of the issued shares of the Company (calculated by reference to the issued share capital of the
Company at the time of the First Subscription adjusted for any subsequent share splits, consolidations or bonus
capitalisations) for a further ZAR 7.5 million. This second tranche of the subscription agreement has been
extended by mutual consent until 31 January 2015.

The conditions precedent to the Subscription Agreement included no insolvency event occurring, the granting of
a mining right in respect of the Project, necessary South African Reserve Bank approvals and shareholder and
other approvals required under the Corporations Act and the AIM / ASX / JSE listing rules, including shareholder
approval. The shareholder approval was obtained on 8 August 2012. The conditions precedent to the
Subscription Agreement have been met.

Kofi Morna, is a Director of the Company, and a director of MA. He became a Director of the Company on 15
October 2010 for the purposes of the above transaction. He holds an (AUD1.45m) indirect non-controlling
interest in MA.

Upon completion of the first tranche of the Subscription Agreement which occurred during 2012, the Company
legally owned, directly and indirectly through its wholly owned subsidiary, MI, 97% of FIO, with the remaining 3%
held by the GaSeleka Community.

The forward subscription agreement will be settled in Ferrum Crescent Limited’s shares. Under the subscription
agreement, Ferrum Crescent Limited will issue shares to MA equal to 7.8% of the issued share capital of the
Company for ZAR7.5 million which is the “second subscription”. The above financial liability, measured at fair
value through profit and loss, represents the fair value of this contractual arrangement as at 31 December 2013.

The forward subscription agreement valuation is sensitive to the movement in Ferrum Crescent Limited’s share
price (31 December 2013: AUD0.032; 30 June 2013: AUD0.014) and the RAND / AUD exchange rate (31
December 2013: AUD9.8135; 30 June 2013: AUD9.5057), accordingly the large changes in these market rates
has seen a corresponding impact on the fair value movement at 31 December 2013.


NOTE 6: CONTRIBUTED EQUITY                Dec 2013          June 2013            Dec 2013           June 2013
                                        No. of Shares      No. of Shares           AUD                AUD

(a) Share Capital
     Ordinary Shares
     Ordinary Shares fully paid              380,602,777         328,201,385           29,767,359          28,366,383
     Less: Employee share plan                (6,595,000)         (6,595,000)           (509,905)           (509,905)
     shares
                                             374,007,777         321,606,385           29,257,454          27,856,478



(b) Movements in ordinary share capital
                                                                                         Half-Year
                                                                                    31 December 2013
                                                                                 Number            AUD
 At beginning of reporting period                                                328,201,385       28,366,383

                
 08 October – 1st tranche of private placing                                        44,613,156           1,405,314
 21 November – Salary sacrifice share scheme issue                                   4,401,392                   -
 19 December – 2nd tranche of private placing                                        3,386,844             106,686
 Costs associated with share issues                                                        -              (111,024)
 At reporting date                                                                 380,602,777          29,767,359

 Less: Employee share plan shares on issue                                        (6,595,000)          (509,905)
                                                                                 374,007,777          29,257,454




                                                                                 Number                AUD
(c) Movements in employee share plan shares issued with limited
recourse loans.
At beginning of reporting period                                                   6,595,000             509,905
At reporting date                                                                  6,595,000             509,905



Executive Share Incentive Plan
Under the plan, eligible employees are offered shares in the Company at prices determined by the Board. The
Board has the ultimate discretion to impose special conditions on the shares issued under the ESIP and can
grant a loan to a participant for the purposes of subscribing for plan shares. Shares issued under loan facilities
are held on trust for the benefit of the participant and will only be transferred into the participant’s name once the
loan has been fully repaid. ESIP participants receive all the rights associated with the ordinary shares.

Loans granted to participants are limited recourse and interest free unless otherwise determined by the Board.
The loans are to be repaid via the application of any dividends received from the shares and/or the sale of the
plan shares. Where the loan is repaid by the sale of shares, any remaining surplus on sale is remitted to the
participant while any shortfall is borne by the Group. The plan is accounted for as an in substance option award.

No new shares have been issued on the Executive Share Incentive Plan for the 6 months ended 31 December
2013.

NOTE 6: ISSUED CAPITAL (CONT.)

Salary Sacrifice Share Scheme
Shareholder approval was obtained on 8 August 2012 for the implementation of a salary sacrifice plan under
which directors and executives may forego agreed fees and salary and subscribe for shares in the Company.

Five individuals have elected during the six months to participate in the salary sacrifice plan, and the number of
shares rights that have been accrued (vested) or shares been issued (calculated on a monthly basis by way of
volume weighted average share prices for Ferrum shares as traded on the Australian Securities Exchange
during that month). The number of shares issued a result of such participation is as follows:

                                                               31 December                   30 June
Shares Issued                                                   2013                        2013
                                                            No of Shares                No of Shares

E Nealon                                                        1,039,532                    1,039,532
RW Hair                                                         2,650,808                    2,650,808
G Button                                                                -                            -
S Huntly                                                        1,267,065                            -
A Nealon                                                        4,166,460                      387,720

Total                                                           9,123,865                    4,078,060


Shares Rights Accrued                                       31 December                   30 June
                                                                2013                        2013
                                                            No of Shares                No of Shares

E Nealon                                                        4,575,763                    2,648,617
RW Hair                                                         2,777,186                    2,777,186
G Button                                                        1,025,455                      552,504
A Nealon                                                          297,493                    1,986,452
Total                                                           8,675,897                    7,964,759



NOTE 7: OPTIONS
                                                               31 December 2013         30 June 2013
                                                                 No. of Options         No. of Options
 Options
 At end of reporting period the following options were on
 issue:
 - 31 December 2013 Options exercisable at 40 cents per
 share                                                                           -             21,496,727
 - 07 December 2013 Options exercisable at 10 cents per
 share                                                                           -              2,350,000

 - 14 December 2015 Options exercisable at 10 cents per                    400,000                400,000
 share
 - 21 November 2016 Options exercisable at 03 cents per                    500,000                       -
 share
 Total Options                                                             900,000             24,246,727

NOTE 7: OPTIONS (CONT.)

                                                               31 December 2013         30 June 2013
                                                                 No. of Options         No. of Options
 Movement
 At beginning of the reporting period                                  24,246,727              24,446,727
 Options issued during the period                                         500,000                 400,000
 Options cancelled during the period                                 (23,846,727)               (600,000)

 At reporting date                                                         900,000             24,246,727

Options issued in consideration for services

Fair value of options granted

The fair value at grant date of options issued is determined using the binomial option pricing model that takes
into account the exercise price, the term of the option, the impact of dilution, the non-tradable nature of the
option, the share price at grant date and the expected price volatility of the underlying share, the expected
dividend yield and the risk-free interest rate for the term of the option.
The table below summarises the model inputs for options granted during the six months ended 31 December
2013:

Options granted for no consideration                                                        500,000
Exercise price (AUD)                                                                            0.03
Issue date                                                                        01 November 2013
Expiry date                                                                       01 November 2016
Underlying security spot price at grant date (AUD cents)                                     2 cents
Expected price volatility of the Company’s shares                                              100%
Expected dividend yield                                                                          0%
Expected life                                                                                3 years
Risk-free interest rate                                                                       3.08%
Binomial model valuation per option (AUD cents per share)                            2.4 cents/share

The expected price volatility is based on the historic volatility of the Company’s share price on the market.

NOTE 8: RESERVES
                                        Share
                                        based                        Foreign   Available
                                       payment       Option         exchange    for sale         Equity
                                       reserve       reserve         reserve    reserve         reserve            Total
                                         AUD           AUD           AUD        AUD            AUD                AUD
 At 1 July 2012                          343,785    1,404,425        125,724           -    (10,126,072)        (8,252,138)
 Currency translation differences
 on foreign operations                          -               -   (98,061)           -                -         (98,061)
 Options issued                            4,644                -          -           -                -            4,644
 At 31 December 2012                     348,429    1,404,425         27,663           -    (10,126,072)        (8,345,555)


 At 1 July 2013                          513,702    1,404,425        130,462     25,803     (10,126,072)        (8,051,680)
 Currency translation differences
 on foreign operations                          -               -     17,373           -                -           17,373
 Directors salary sacrifice for
 shares                                  101,274                -          -           -                -          101,274
 Fair value gain on available for
 sale financial assets                          -               -          -     29,297                 -           29,297
 Options issued                                 -          12,000          -           -                -           12,000
 At 31 December 2013                     614,976    1,416,425        147,835     55,100     (10,126,072)        (7,891,736)




Nature and purpose of reserves

Share based payments reserve
This reserve is used to record the value of equity benefits provided to employees, consultants and directors as part of
their remuneration.

Options reserve
This reserve is used to record the value of options issued, other than share-based payments.

Foreign Exchange Reserve
This reserve is used to record exchange differences arising from the translation of the financial statements of foreign
subsidiaries.

Equity Reserve
This reserve is used to record the acquisition of the non-controlling interest by the Group and to record differences
between the carrying value of non-controlling interests and the consideration paid / received, where there has been a
transaction involving non-controlling interests that do not result in a loss of control.

The reserve is attributable to the equity of the parent.

Available for Sale Reserve
This reserve is used to record the growth that is received on the available for sale investments.
NOTE 9: EARNINGS PER SHARE
                                                                                  December 2013       December 2012

     (a) Basic (loss) per share – cents per share                                           (0.49)            (0.34)

     (b) Diluted (loss) per share – cents per share*                                        (0.49)            (0.34)

     (c) Reconciliations

         Net (loss) / profit used in calculating basic and diluted earnings per        (1,687,725)       (1,011,900)
         share

     (d) Headline (Loss) / Earnings per share disclosed as required
         by the JSE Limited

         (Loss) / profit attributable to ordinary equity holders of the
         parent entity.                                                                (1,687,725)       (1,011,900)

         Adjusted net of tax:
         Profit on disposal of plant and equipment                                            180                   -

         Headline Earnings                                                             (1,687,545)       (1,011,900)


         Headline earnings per share

     (e) Basic (loss) per share – cents per share                                           (0.49)            (0.34)

     (f) Diluted (loss) per share – cents per share*                                        (0.49)            (0.34)



                                                                                     Number of          Number of
                                                                                      Shares             Shares



         Weighted average number of shares used in basis (loss) per
         share                                                                         343,268,696       297,184,522

         Weighted average number of shares used in diluted (loss) per
         share                                                                         343,268,696       297,184,522

         Note 1 - 900,000 share options outstanding at 31 December 2013 (2012: 24,246,727) have not been
         included in the calculation of dilutive earnings per share as these are anti-dilutive.
         Note 2 – 7.5 million potential shares to be issued under the subscription agreement (note 5) have not been
         included in the calculation of dilutive earnings per share as these are anti-dilutive.


NOTE 10: CONTINGENCIES AND COMMITMENTS

The Group has committed to rental payments on office premises in Perth and Johannesburg. The current
commitments to the end of the lease periods are as follows:-

                                                         Duration                          AUD Value

         Johannesburg                         Jan 2014 to March 2015                         39,545

There are no minimum expenditure requirements in South Africa in relation to mining tenements.


NOTE 11: RELATED PARTY TRANSACTIONS

Other than those transactions disclosed elsewhere in the financial report there have been no material related
party transactions with Directors, key management personnel or related parties in the current period.
NOTE 12: EVENTS OCCURRING SUBSEQUENT TO THE REPORTING DATE

Subsequent to the end of the reporting period, Mr Tom Revy assumed the role of Managing Director and Mr Bob
Hair resigned as Managing Director but remains as Executive Director.

Apart from the above, there has not arisen in the interval between the end of the half year and the date of this
report any item, transaction or event of a material or unusual nature likely, in the opinion of the Directors of the
Company, to affect:

(i) The Group’s operations in future financial periods; or

(ii) The results of those operations in future financial periods; or

(iii) The Group’s state of affairs in future financial periods.


NOTE 13: FINANCIAL INSTRUMENTS

The fair value of financial assets and financial liabilities of the consolidated Group approximated their carrying
amount.

Determination of fair values

The determination of fair values for the financial assets and financial liabilities have been performed on the
following basis:

Cash and cash equivalents, trade and other receivables and trade and other payables approximate their
carrying amounts largely due to the short term maturities of these instruments.

The fair value of the available for sale financial assets is determined by reference to their quoted bid price at the
reporting date.


NOTE 13: FINANCIAL INSTRUMENTS (CONT.)

The fair value of the subscription agreement has been determined by reference to the Company’s best estimate
of the fair value of the contractual arrangement taking into consideration the underlying price of the Company
and foreign exchange rate.

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement
as a whole:
? Level 1 — Quoted market prices in an active market (that are unadjusted) for identical assets or liabilities
? Level 2 — Valuation techniques (for which the lowest level input that is significant to the fair value
     measurement is directly or indirectly observable)
? Level 3 — Valuation techniques (for which the lowest level input that is significant to the fair value
     measurement is unobservable)

As at 31 December 2013, the Group held the following classes of financial instruments measured at fair value:

                                                                          Dec 2013            Jun 2013
                                                                            AUD                 AUD
 Level 1
 Available for sale financial assets                                           506,308             683,074


 Level 2
 Financial (liability)/asset at fair value through profit
 and loss – forward subscription agreement                                    (129,707)            513,035
For financial instruments that are recognised at fair value on a recurring basis, the Group determines whether
transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period.


13 March 2014
Johannesburg

Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)

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