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FERRUM CRESCENT LIMITED - Final Results for the Half-Year Ended 31 December 2014

Release Date: 16/03/2015 09:00
Code(s): FCR     PDF:  
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Final Results for the Half-Year Ended 31 December 2014

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: AU000000WRL8

16 March 2015
                                  Ferrum Crescent Limited
                      ("Ferrum Crescent", the "Company" or the "Group")
                                (ASX: FCR, AIM: FCR, JSE: FCR)

                    Final Results for the Half-Year Ended 31 December 2014

Ferrum Crescent Limited, the ASX, AIM and JSE quoted iron ore developer in Northern South
Africa, today announces its results for the half-year ended 31 December 2014.

Project Highlights
- JORC (2012) compliant Mineral Resource
- Historical drilling, drilling by the Group, geological modelling and high density geophysical
  survey conducted by the Company in 2012 confirm huge tonnage upside potential
- 30 year Mining Right granted
- Environmental licence (EIA) in place for the Moonlight mining area (approved 4 April 2013)
- Metallurgical test work indicates the potential for high quality pellets in excess of 69% iron
  and low deleterious elements possible (DR grade pellets for use in direct reduction
  iron/electric arc steel-making processes)
- Low stripping ratio; slurry pipeline> pellet plant at rail head (Thabazimbi); export through
  Richards Bay
- Duferco offtake partner (4.5 mtpa plus first right on 1.5 mtpa if not sold domestically)
- Independent valuation 2014 – The Mineral Corporation's independent valuation of the
  Project released to the market on 11 June 2014
- Located near Kumba railhead at Thabazimbi (Kumba operation depleting in grade), Limpopo
  Province, northern South Africa
- New Eskom power station (4,800MW) commissioning first 800MW module
- Richards Bay port expansion for iron ore products

Developments during Half-Year
- AUD$1.03m raised as partially underwritten rights issue completed
- Moonlight BFS progressed
- Drilling programme for mine design and plant final costings
- New mineralisation intersected
- BEE partners for expanded BFS participation engaged with
- Mr Ed Aylmer appointed as Moonlight BFS Study Manager
- Mr Ted Droste and Mr Kofi Morna resign as directors

Financial Overview
- Current assets as at 31 December 2014 of AUD$1,862,671 (2013: AUD$1,612,202)
- Loss for half-year of AUD$463,690 (2013:AUD$1,687,725)
- 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
  2014, 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 July 2016.

Post Period
- Drill core samples currently undergoing analysis- results expected Q1 2015
       o Results all intersected mineralisation
       o Next stage of BFS will be for bulk samples to be taken in order to complete all mining
         cost components of BFS
- New advisers appointed in UK and South Africa as BFS restarts
- Site visits with potential investors conducted
- First stage work on domestic supply model underway with South African steel producers
- Updated CSR report in final stages as part of funding programme with specific partners
- Agreements with Anvwar Asian Investment terminated following its breach of contract

A pdf copy of the full accounts is available on the Company’s website (www.ferrumcrescent.com)
and on the ASX website (www.asx.com.au). A summary of the material financial information
(including a statement on going concern) is included below in this announcement.

Commenting on the final results, Managing Director Tom Revy said:
“The recommencement of the Moonlight BFS at the end of the period should allow us to start the
process of completing final mine design costings. My belief is that while public markets and
commodity markets are still very challenging we have made the right decision in progressing our
high-grade iron resource at this time. With sub-major iron ore companies unable to progress
exploration or development due to grade or infrastructure issues, the future of supply to
international steel markets is interesting. The BRICS economies have dramatically slowed in
growth, as is well publicised, but now have in place much higher levels of core infrastructure that
need to be maintained. Ferrum does not just have the potential to provide high grade product to
a consumer looking to unlock low grade iron ore stocks - being located near the Kumba rail hubs,
we have access to a fully operating infrastructure route to domestic and international buyers.
While securing financing is difficult in these markets, recent advances in our negotiations show
that groups with a real interest in securing physical metal supply to feed their industries are once
again looking at viable routes to create vertically integrated supply. I look forward to updating
the market shortly on our operational and corporate work.”


For more information, please visit www.ferrumcrescent.com or contact:

 Australia enquiries:                               UK enquiries:
 Ferrum Crescent Limited                            Ferrum Crescent Limited
 Tom Revy T: +61 8 9367 5681                        Laurence Read (UK representative)
 Managing Director                                  T: +44 7557 672 432

                                                    RFC Ambrian Limited (Nominated Adviser)
                                                    Andrew Thomson/Oliver Morse
                                                    T: +61 8 9480 2500

                                                    Hume Capital Securities (Broker)
                                                    Jon Belliss
                                                    T: +44(0)20 3693 1470

 South Africa enquiries:                            Bravura Capital (Pty) Ltd
                                                    Doné Hattingh
                                                    T (direct): +27 11 459 5037




The directors accept full responsibility for the information contained in this announcement. The auditor’s unqualified
report is available for inspection at the Company’s registered office in Australia and at the Company’s office at Block
B, Regent Hill Office Park, cnr Leslie & Turley Rds, Lonehill, 2062 for 28 business days from release of this
announcement.


 Ferrum Crescent Limited
 ACN 097 532 137
 Consolidated Statement of Comprehensive Income
 For the half-year from 1 July 2014 to 31 December 2014
                                                                                            6 months to           6 months to
                                                                                            31 December           31 December
                                                                                                2014                  2013
                                                                             Note               AUD                   AUD

Revenue from continuing operations
Revenue                                                                       3(i)                     19,749              19,669
                                                                                                       19,749              19,669

Fair value (loss) / gain on financial instrument                          3(ii) & 4(i)                327,961           (642,742)
Exploration expenditure                                                                             (204,194)           (142,310)
Foreign exchange gain                                                                                 107,897              47,802
Share based payments                                                                                 (31,438)           (113,274)
Other expenses                                                               3(iii)                 (790,725)           (856,870)
Gain on disposal of available for sale investment                                                     137,597                  -
(Loss) before income tax                                                                            (433,153)         (1,687,725)
Income tax (expense)/benefit                                                                         (30,537)                  -

Net (loss) for the period                                                                           (463,690)         (1,687,725)

Other comprehensive income
Items that may be reclassified subsequently to profit and loss:
Net exchange gain / (loss) on translation of foreign operation                                      (139,769)              17,373
Net fair value gains on available for sale investment                                                  28,536              40,690
Income tax effect                                                                                      (7,990)           (11,393)
Reclassification adjustment relating to the disposal of available-
for-sale investments included in the income statement                                               (137,597)                  -
Income tax effect                                                                                      38,527                  -
Other comprehensive income/(loss) for the period, net of
tax                                                                                                 (218,293)              46,670


Total comprehensive (loss) for the period                                                           (681,983)         (1,641,055)

Net (loss) for the period is attributable to:
Non-controlling interest                                                                                   -                   -
Owners of the parent                                                                                (463,690)         (1,687,725)
                                                                                                    (463,690)         (1,687,725)

Total comprehensive (loss) for the period attributable to:
Non-controlling interest                                                                                   -                   -
Owners of the parent                                                                                (681,983)         (1,641,055)
                                                                                                    (681,983)         (1,641,055)

 (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                                                   9                       (0.11)                 (0.49)

  - diluted (loss) per share                                                 9                       (0.11)                 (0.49)

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 2014


                                                                      31 December               30 June
                                                                          2014                   2014
                                                          Note            AUD                    AUD
 Current Assets
 Cash and cash equivalents                                                  1,067,545                   738,345
 Trade and other receivables                                                  141,724                    34,210
 Other current financial assets                             4a                570,270                   240,517
 Prepayments                                                                   83,132                    54,408
 Total Current Assets                                                       1,862,671                 1,067,480


 Non-current Assets
 Plant and equipment                                                           39,364                    46,981
 Non-current financial assets                               4b                128,584                   772,429
 Total Non-current Assets                                                     167,948                   819,410


 Total Assets                                                               2,030,619                 1,886,890


 Current Liabilities
 Trade and other payables                                                     165,238                   322,582
 Loans and Borrowings                                       5                 593,063                   515,999
 Provisions                                                                    88,966                    95,883
 Total Current Liabilities                                                    847,267                   934,464


 Total Liabilities                                                            847,267                   934,464


 NET ASSETS                                                                 1,183,352                   952,426


 Equity
 Contributed equity                                         6              30,340,460                29,333,702
 Reserves                                                   8              (8,188,514)              (7,876,372)
 Accumulated losses                                                       (20,968,594)             (20,504,904)
 PARENT INTEREST                                                            1,183,352                   952,426
 NON-CONTROLLING INTEREST                                                           -                         -
 TOTAL EQUITY                                                               1,183,352                   952,426

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 Cash Flows
For the period 1 July 2014 to 31 December 2014

                                                                 6 months to 31      6 months to 31
                                                                 December 2014       December 2013
                                                          Note         AUD               AUD
Cash flows from operating activities
Interest received                                                            4,634           12,167
Income from available for sale financial assets                            15,115             7,502
Payments to suppliers and employees                                    (1,279,400)        (709,734)
Payment for exploration and evaluation costs                             (205,986)        (140,225)


Net cash flows used in operating activities                            (1,465,637)        (830,290)


Cash flows from investing activities
Payments for plant and equipment                                              216                -
Purchase of available for sale financial assets                          (282,694)        (203,137)
Proceeds from disposal of available for sale financial
assets                                                                  1,036,758           409,200


Net cash flows from / (used in) investing activities                      754,280           206,063


Cash flows from financing activities
Proceeds from issue of shares                                           1,204,224         1,512,000
Costs of capital raising                                                 (196,597)        (111,024)
Net cash flows from financing activities                                1,007,627         1,400,976
Net increase / (decrease) in cash and cash
equivalents                                                               296,270           776,749
Cash and cash equivalents at beginning of period                          738,345           548,265
Effect of foreign exchange on cash and cash equivalents                    32,930            27,888


Cash and cash equivalents at end of period                              1,067,545         1,352,902


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


Going Concern

The Group has current assets of AUD 1,862,671 as at 31 December 2014 (30 June 2014: AUD 1,067,480),
incurred a net loss of AUD 463,690 (31 December 2013: AUD 1,687,725) and had cash used in operations
of AUD 1,465,637 (31 December 2013: AUD 830,290) for the six months period then ended.

The Group’s forecast cash flow requirements for the 12 months ending 31 March 2016 reflects cash
outflows from operating and investing activities, which take 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 during the quarter ending 30 June 2015 to enable it to settle its liabilities as and when they fall
due and continue to meet its incurred, committed and currently planned expenditure.

The Directors have been in discussions with a number of interested parties in relation to funding the
Group’s working capital requirements via investments in the Group.

In the event that the Group is unable to raise additional funds to meet the Group’s planned expenditure
when required there is a significant uncertainty as the whether the Group will be able to meet its debts as
and when they fall due and thus continue as a going concern.

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