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Quarterly Activities and Cash Flow Report for the period ended 30 June 2015
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
30 July 2015
Ferrum Crescent Limited
("Ferrum Crescent", the "Company" or the "Group")(ASX: FCR, AIM: FCR, JSE: FCR)
Quarterly Activities and Cashflow Report
For the period ended 30 June 2015
Highlights
Moonlight Iron Project Bankable Feasibility Study (“BFS”):
- The Moonlight Iron Project (“Moonlight” or “Project”) involves the proposed future
mining and beneficiation of the Moonlight Deposit to produce a high grade
concentrate for transport to a pellet manufacturing facility at or near the town of
Thabazimbi in Limpopo Province, South Africa for the production of direct reduction
(“DR”) and blast furnace grade iron pellets for export and domestic sale
- Marketing study instigated relating to the identification of potential South African
offtakers for products from the Project
- Planning activities ongoing with infrastructure suppliers (power, water, rail and port)
- Project on schedule to benefit from new regional/national infrastructure
developments
- Full assessment of domestic supply options will position Ferrum Crescent as an
economic development partner to the Republic of South Africa
- Planned next BFS phases:
o Full Ore Reserve, in terms of JORC (2012), to be established - Infill drilling
over Zones A, B and C for advanced mine design work and metallurgical
analysis
o Decision to be made on whether bulk sampling is needed
o Final beneficiation and pelletiser designs/costings to be completed
o In the final phase, negotiations and agreements to be concluded with
infrastructure providers
Corporate:
- Private placing completed in May 2015 to raise GBP0.5 million (AU$0.97 million)
before expenses
- Memorandum of understanding (“MOU”) entered into with Principle Monarchy
Investments (Proprietary) Limited (“PMI”), whereby PMI may acquire up to 39% of
the Project’s holding company by way of a 3 tranche subscription for ZAR142 million,
subject to the achievement of key milestones
- PMI is a BEE controlled South African company with extensive commercial interests
in South Africa (“BEE” is the term used within South Africa to describe entities that
meet relevant regulatory criteria as being controlled by historically disadvantaged
South Africans)
- First ZAR2m interim funding payment from PMI expected to be received shortly,
whereupon the MOU will become legally binding
- Cash balance at the end of the quarter: AU$1.029 million
Ferrum Crescent, the ASX, AIM and JSE quoted DR grade pellet project developer, today
submits its quarterly activities and cashflow report for the period ending 30 June 2015.
During the quarter, the Company entered into an MOU with PMI, under which PMI may
acquire up to 39% of Ferrum Iron Ore (Pty) Ltd (“FIO”), the Group’s Project holding company
for ZAR142 million. Under the terms of the MOU, payment of the first subscription tranche
of ZAR30 million must be made by 1 December 2015. In the meantime, PMI is required to
make interim payments to FIO of ZAR2 million per month, so that FIO’s operational team
can continue work on the BFS in close consultation with PMI. Such interim payments are to
continue until payment of the first subscription tranche of ZAR30 million, with the monthly
payments to be credited towards this first tranche.
Receipt of the first ZAR2 million interim payment from PMI is expected shortly. Upon receipt,
the MOU will become legally binding, and the parties will thereafter complete a new
shareholders’ agreement for FIO.
Commenting today Tom Revy, Managing Director, said:
“Following recommencement of the BFS at Moonlight in Q4 2014, we have confirmed the
location for open pit mining operations during the first 10 years of the mine’s life and have
begun advanced pit design work. Utilising the recent drilling data, we continue to progress
the economic model for both the mine and the associated DR pellet complex to be situated
at the Thabazimbi railhead.
“I cannot overemphasise the significance of securing a partner such as PMI for this Project.
In particular, PMI brings commercial and economic strength to Moonlight - through their
links with major engineering groups and South African institutions - and we are increasingly
doing more to align the Project with the infrastructure plans of the South African and
Limpopo governments and seek to address the aspirations and interests of such authorities
and those of the local communities and municipalities. We will, of course, make sure that
we can provide end product to users within South Africa, and to this end we have
commissioned a thorough South African market survey to ensure that domestic needs are
met. Overall, we continue to endeavour to maximise the value of Moonlight for the benefit
of all stakeholders.”
For further information on the Company, please visit www.ferrumcrescent.com or contact:
Australia enquiries: UK enquiries:
Ferrum Crescent Limited Ferrum Crescent Limited
Tom Revy T: +61 8 9474 2995 Laurence Read (UK representative)
Managing Director T: +44 7557672432
Strand Hanson Limited (Nominated Adviser)
Rory Murphy/Matthew Chandler
T: +44 20 7409 3494
Beaufort Securities (Broker)
Elliott Hance
T: +44 20 7382 8416
South Africa enquiries: Bravura Capital (Pty) Ltd (JSE Sponsor)
Doné Hattingh
T (direct): +27 11 459 5037
Notes to Editors:
Ferrum Crescent’s principal project is the Moonlight Iron Project located in Limpopo Province in the
north of South Africa. The Moonlight Deposit (upon which the Project is based) is a magnetite
deposit located on the Moonlight, Gouda Fontein and Julietta farms and is the main operational
focus for the Company. Iscor Limited (“Iscor”), which explored the Project in the 1980s and '90s,
reported mineralisation capable of producing a concentrate grading at 68.7% iron. At that time, Iscor
concluded that the deposit, which was described as being comparable to the world’s best, was easily
mineable due to its low waste-to-ore ratio. The beneficiation attributes of Moonlight ore are
extremely impressive, with low-intensity magnetic separation considered suitable for optimum
concentration.
Metallurgical tests on Moonlight material, undertaken since then by Ferrum Crescent, suggest that
Iscor’s historical results are conservative, that good metal recoveries can be achieved, and that the
resulting concentrates have a high iron content and only negligible impurities, at grind sizes
considered to be industry standard (P80 of 75 - 125 microns).
Key features of the Project to date are:
- JORC (2012) compliant Mineral Resource;
- Historical drilling, drilling by the Group, geological modelling and a high density geophysical
survey conducted by the Company in 2012 confirm 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
with low deleterious elements (DR grade pellets for use in direct reduction iron/electric arc
steel-making processes);
- Low stripping ratio; slurry pipeline planned to a pellet plant located at a rail head
(Thabazimbi); export through Richards Bay;
- Duferco offtake partner (4.5 Mtpa plus first right on a further 1.5 Mtpa if not sold
domestically);
- Independent valuation by The Mineral Corporation completed in June 2014;
- Located near Kumba railhead at Thabazimbi (Kumba operation depleting in grade), Limpopo
Province, northern South Africa;
- New Eskom power plant (4,800MW) commissioning first 800MW module;
- Richards Bay port expansion for iron ore products.
Appendix 5B
Mining exploration entity quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10
Name of entity
Ferrum Crescent Limited
ABN Quarter ended (“current quarter”)
58 097 532 137 30 June 2015
Consolidated statement of cash flows
Current quarter Year to date
Cash flows related to operating activities (12 months)
$A’000 $A’000
1.1 Receipts from product sales and related
debtors
1.2 Payments for (a) exploration & evaluation (180) (958)
(b) development
(c) production
(d) administration (321) (1,327)
1.3 Dividends received
1.4 Interest and other items of a similar nature
received 1 8
1.5 Interest and other costs of finance paid
1.6 R&D recoupment tax
1.7 Other – net income on restricted cash
investments - (43)
Net Operating Cash Flows (500) (2,320)
Cash flows related to investing activities
1.8 Payment for purchases of:
(a) prospects
(b) equity investments
(c) other fixed assets
1.9 Proceeds from sale of:
(a) prospects
(b) equity investments
(c) other fixed assets
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (restricted cash investments) - 772
Net investing cash flows - 772
1.13 Total operating and investing cash flows
(carried forward) (500) (1,548)
1.13 Total operating and investing cash flows
(brought forward) (500) (1,548)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, 1,029 2,062
etc.
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings
1.18 Dividends paid
1.19.1 Other
1.19.2 Other - First Tranche proceeds from Anvar
Asian Investment
1.19.3 Other – share issue costs (59) (270)
970 1,792
Net financing cash flows
Net increase (decrease) in cash held 470 244
1.20 Cash at beginning of quarter/year to date 592 738
1.21 Exchange rate adjustments to item 1.20 (33) 47
1,029 1,029
1.22 Cash at end of quarter
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related
entities
Current quarter
$A'000
1.23 Aggregate amount of payments to the parties included in item 1.2 92
1.24 Aggregate amount of loans to the parties included in item 1.10 -
1.25 Explanation necessary for an understanding of the transactions
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on
consolidated assets and liabilities but did not involve cash flows
2.2 Details of outlays made by other entities to establish or increase their share in projects in
which the reporting entity has an interest
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available Amount used
$A’000 $A’000
3.1 Loan facilities
3.2 Credit standby arrangements
Estimated cash outflows for next quarter
$A’000
4.1 Exploration and evaluation 300
4.2 Development
4.3 Production
4.4 Administration 200
Total 500
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as Current quarter Previous quarter
shown in the consolidated statement of cash flows) $A’000 $A’000
to the related items in the accounts is as follows.
5.1 Cash on hand and at bank 945 583
5.2 Deposits at call 84 9
5.3 Bank overdraft
5.4 Other (provide details)
1,029 592
Total: cash at end of quarter (item 1.22)
Changes in interests in mining tenements
Tenement reference Nature of interest Interest at Interest
(note (2)) beginning at end of
of quarter quarter
6.1 Interests in mining
tenements and
petroleum tenements
relinquished, reduced or
lapsed
6.2 Interests in mining
tenements and
petroleum tenements
acquired or increased
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number quoted Issue price per Amount paid up per
security (see security (see note
note 3) (cents) 3) (cents)
7.1 Preference
+securities
(description)
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buy-
backs,
redemptions
7.3 +Ordinary 618,787,353 616,487,353 Various Fully Paid
securities
7.4 Changes during 100,000,000 100,000,000 $0.0097 $0.0097
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buy-
backs
7.5 +Convertible
debt securities
(description)
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through
securities
matured,
converted
7.7 Options Exercise price Expiry date
(description and 500,000 - $0.03 21 November 2016
conversion 2,500,000 - $0.08 19 February 2017
factor) 2,000,000 - GBP0.0075 2 February 2018
3,000,000 - GBP0.02 2 February 2018
2,000,000 - GBP0.0075 1 March 2018
3,000,000 - GBP0.02 1 March 2018
7.8 Issued during
quarter
7.9 Exercised
during quarter
7.10 Expired /
cancelled
during quarter
7.11 Debentures
(totals only)
7.12 Unsecured
notes (totals
only)
Compliance statement
1 This statement has been prepared under accounting policies which comply with accounting
standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).
2 This statement does /does not* (delete one) give a true and fair view of the matters
disclosed.
Sign here: Date: 30 July 2015
(Company secretary)
Print name: Bob Hair
Notes
1 The quarterly report provides a basis for informing the market how the entity’s activities
have been financed for the past quarter and the effect on its cash position. An entity wanting to
disclose additional information is encouraged to do so, in a note or notes attached to this report.
2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining
tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a
joint venture agreement and there are conditions precedent which will change its percentage
interest in a mining tenement, it should disclose the change of percentage interest and conditions
precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in items
7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral
Resources and AASB 107: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Financial
Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian
standard on that topic (if any) must be complied with.
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