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FIRESTONE ENERGY LIMITED - FSE response to ASX query

Release Date: 13/05/2014 10:00
Code(s): FSE     PDF:  
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FSE response to ASX query

 FIRESTONE ENERGY LIMITED
(Incorporated in Australia)
(Registration number ABN 058 436 794)
Share code on the JSE Limited: FSE  
Share code on the ASX: FSE
ISIN: AU000000FSE6
(SA company registration number 2008/023973/10)
("FSE" or "the Company") 



                                                                                       ASX Compliance Pty Limited
                                                                                                ABN 26 087 780 489
                                                                                               Level 40, Central Park
                                                                                         152-158 St Georges Terrace
                                                                                                   PERTH WA 6000

                                                                                                      GPO Box D187
                                                                                                    PERTH WA 6840

                                                                                          Telephone 61 8 9224 0000
                                                                                          Facsimile 61 8 9221 2020

9 May 2014


Mr Jonathan Hart
Company Secretary
Firestone Energy Limited
Level 1/330 Churchill Avenue
Subiaco WA 6008



Dear Mr Hart,

                                   Firestone Energy Limited (“Company”)

I refer to the Company’s Quarterly Cash Flow Report in the form of an Appendix 5B for the period ended 31
March 2014, released to ASX Limited ("ASX") on 30 April 2014, (the “Appendix 5B”).

ASX notes that the Company has reported the following.

1.       Receipts from product sales of $0.

2.       Net negative operating cash flows for the quarter of $205,000.

3.       Cash at end of quarter of $46,000.

4.       Estimated cash outflows for the next quarter of $100,000.

In light of the information contained in the Appendix 5B, please respond to each of the following questions.

1.       Is it possible to conclude on the basis of the information provided that if the Company were to continue
         to expend cash at the rate for the quarter indicated by the Appendix 5B, the Company may not have
         sufficient cash to fund its activities? Is this the case, or are there other factors that should be taken
         into account in assessing the Company’s position?

2.       Does the Company expect that in the future it will have negative operating cash flows similar to that
         reported in the Appendix 5B for the quarter and, if so, what steps has it taken to ensure that it has
         sufficient funds in order to continue its operations at that rate?

3.       What steps has the Company taken, or what steps does it propose to take, to enable it to continue to
         meet its business objectives?

4.       Can the Company confirm that it is in compliance with the listing rules, and in particular, listing rule
         3.1?
5.       Please comment on the Company’s compliance with listing rule 12.2, with reference to the matters
         discussed in the note to the rule.

Listing rule 3.1

Listing rule 3.1 requires an entity to give ASX immediately any information concerning it that a reasonable
person would expect to have a material effect on the price or value of the entity’s securities. The exceptions to
this requirement are set out in the rule.

In responding to this letter you should consult listing rule 3.1 and Guidance Note 8 Continuous Disclosure:
Listing Rules 3.1 – 3.1B.

If the information requested by this letter is information required to be given to ASX under listing rule 3.1 your
obligation is to disclose the information immediately.

Your responsibility under listing rule 3.1 is not confined to, or necessarily satisfied by, answering the questions
set out in this letter.

This letter and your response will be released to the market. If you have any concerns about your response
being released, please contact me immediately. Your response should be sent to me on facsimile number +61
8 9221 2020 or email fiona.murphy@asx.com.au. It should not be sent to ASX Market Announcements.

Unless the information is required immediately under listing rule 3.1, a response is requested as soon as
possible and, in any event, not later than 5.00 pm (WST) on Monday, 12 May 2014.

If you are unable to respond by the time requested you should consider a request for a trading halt in the
Company’s securities.

If you have any queries please let me know.

Yours sincerely,

[sent electronically without signature]

Fiona Murphy
Senior Adviser, Listings Compliance (Perth)
Company Announcements Office
Australian Securities Exchange Limited
Exchange Plaza
2 The Esplanade
PERTH WA 6000

Dear Fiona,

Firestone Energy Limited (FSE or the Company)

Further to your letter dated 8 May 2014 we respond as follows, using the same numbering as your
letter:

1.   No, this is not the case and there are other factors which should be taken into account.

     The Company will continue to expend funds in line with its forecast as stipulated in item 4 of the
     recently released March Quarterly Report. These funds will be predominantly used to conclude the
     Bankable Feasibility Study (BFS) for the development of the Waterberg project and the funding
     arrangements thereto.

     As announced to the market on 4 September 2013, The Waterberg Coal Company Limited (WCC)
     granted a loan facility of up to $3,000,000 to the Company to be used toward project financing
     related expenses (Loan Agreement). Given the Company has now used the full facility, WCC and
     FSE are in the process of amending the Loan Agreement where WCC will provide FSE with another
     loan facility of up to a further $3,000,000 to be used towards project related expenses.

2.   The Company is an exploration company and as such it expects, in the ordinary course, that
     negative cashflows from operating activities will continue throughout the exploration phase of
     development. The Company is a party to the Waterberg Coal Project Joint Venture (WCPJV). The
     WCPJV is in the process of finalizing arrangements accruing from the BFS and attending to funding
     arrangements for the prospective development of The Waterberg Coal Project.

3.   See above.

4.   The Company can confirm that it is in compliance with the listing rules and in particular with listing
     rule 3.1.

5.   Given the responses above, the Company can confirm that it is in compliance with listing rule 12.2,
     and that the Company’s financial position warrants continued quotation of its securities on the ASX.

If you should require any further information please contact the undersigned.

Yours faithfully
Stephen Miller
Executive Director

13 May 2014

Johannesburg

River Group

Date: 13/05/2014 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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