Wrap Text
Final Results for the Year 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 September 2015
Ferrum Crescent Limited
("Ferrum Crescent", the "Company" or the "Group")
(ASX: FCR, AIM: FCR, JSE: FCR)
Final Results for the Year Ended 30 June 2015
Ferrum Crescent Limited, the ASX, AIM and JSE quoted iron ore developer in Northern South
Africa, today announces its final results for the year ended 30 June 2015. These will be posted to
Shareholders in due course.
Highlights
- Drilling campaign completed to investigate the extent of Zone D at Moonlight Deposit and
provide information to inform the location of the proposed future mine
- GBP 500,000 (AUD1.03 Million) before costs raising completed in May 2015
- Ed Aylmer appointed as study manager
- BFS planning review progressed
- Memorandum of understanding entered into with South African, BEE controlled entity
(Principle Monarchy Investments) for investment in Ferrum Iron Ore (Pty) Ltd, which holds
the Moonlight Iron Project
- Strand Hanson Limited appointed as nominated adviser and Beaufort Securities appointed
AIM broker
Financial Overview
- Cash at 30 June 2015 of D1,028,468 (2014: D738,345)
- Loss for year of D2,604,998 2015 2014
Earnings (2,604,998) (2,508,799)
Weighted average shares in issue 468,894,041 343,268,696
Basic profit / (loss) per share (cents) (0.50) (0.75)
Post Period
- Memorandum of understanding (MOU) with Principle Monarchy Investments (PMI) not yet
legally binding, as PMI has not made payments in accordance with the MOU
- Negotiations continue with investment parties to progress Moonlight BFS
A pdf copy of the full Accounts is available as a link to this announcement and on the Company’s
website (www.ferrumcrescent.com).
Commenting on the final results, Managing Director Tom Revy said:
“During 2015 the Company completed a drilling programme at Moonlight to investigate the
extent of Zone D at the Moonlight Deposit and provide information to inform the location of the
proposed mine. Work undertaken throughout the period has also allowed us to engage in
advanced development discussions with South African entities. In what was a difficult year for
exploration and mining companies in the iron ore sector, Ferrum remains confident that the
quality of the Moonlight Project and its importance to the local communities, Limpopo Province
and strategically to the South African government’s plans will result in a successful conclusion to
investment negotiations in the near future.”
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
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.
Extracts from the Company’s Full, audited Report and Accounts are set out below:
Company and Project Overview
Introduction to the Group
Ferrum Crescent Limited (“Ferrum”, “FCR” or the “Company”) is an Australian company listed on
the Australian Securities Exchange (ASX: FCR), the AIM market of the London Stock Exchange
(AIM: FCR) and on the JSE Limited (JSE: FCR).
2
Ferrum seeks to capitalise on the future demand for high quality iron products worldwide by
producing a premium material that can be used in the manufacture of steel in electric arc
furnaces.
The Moonlight Deposit (upon which the Moonlight Iron Ore Project or “Moonlight” or the
“Project” is based) is a magnetite deposit located on the farms Moonlight, Gouda Fontein and
Julietta in Limpopo Province in the north of South Africa (see below) and it is the main
operational focus for the Company. Iscor, which explored the Project in the 1980s and '90s,
reported mineralisation, capable of producing a concentrate grading 68.7% iron. At the time,
Iscor concluded that the deposit, which was described as 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 of Moonlight material, undertaken since by Ferrum, suggest that Iscor's
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 the industry standard (P80 of 75 microns).
Various key components of a BFS have already been concluded on the Project with significant
milestones achieved to date including:
- Definition and reporting of an independent JORC Code (2012) compliant Mineral Resource
estimate of 307.7Mt at 26.9% Fe of which the Inferred category is estimated to contain
172.1Mt at 25.3% Fe; the Indicated - 83Mt at 27.4% Fe and Measured - 52.6Mt at 31.3%
Fe (May 2012)
- 30 year Mining Right granted
- Environmental licence (EIA) in place for the Moonlight Project mining area (approved 4
April 2013)
- Metallurgical test work indicates high quality pellets in excess of 69% iron and low
deleterious elements possible
The Company is now seeking to progress with final stage BFS work such as engineering design,
connection to local infrastructure and permitting for the pelletising operation.
Moonlight has already had significant amounts of metallurgical process work undertaken on it and
determining the optimum process represents a critical path for the whole Project. As a potential
producer of a high-grade iron ore product, the final assessment of Moonlight’s capability to
operate and process ore at an industrial scale is all important.
Metallurgists continue to work closely with geologists to identify key areas for representative
sample selection for advanced metallurgical testing including a pilot test work programme.
Immediate test work will focus on financially optimising grind size vs iron recovery.
Future work will also focus on optimising the pelletising process including an assessment of
temperature profiling and treatment times.
Work to date on mine planning has been based on a contract mining model for site development,
overburden removal and general open pit mining activities. A low stripping ratio is expected:
1:1.5 during the early years of operations (relatively shallow dips with occurrence of up to 4
magnetite-bearing zones).
Feasibility requirements that still need to be completed include:
- geotechnical drilling, mine design, mine reserve estimation based on certain cut-off
estimates and economic criteria and final estimate of mining costs from an adjudicated
tender process for a contract mining will be concluded;
- finalising pipeline route for environmental impact study completion;
- optimising pipeline design and costing (finalising rheology / density and particle size
distribution)
- finalising negotiations with Eskom (power) for capital costs and tariffs once
mining/process demand/schedules are finalised for the anticipated 110-120MW needed;
and
- finalising negotiations with Transnet (rail and port) for planning and costing loading /
unloading facilities, wagon and locomotive requirements and port handling and storage
costs and Transnet reviewing Project infrastructure needs as part of feasibility component
and finalising commercial arrangements, as well as securing an area and connection at the
port (Richards Bay).
Moonlight Project Concept
Recognising that adding value within the country is a strategic preference for all mining
operations within South Africa, Ferrum has consistently planned for beneficiation and other
value-adding processes to take place within the country. Project concepts have previously
included the production of pig iron at or near the Moonlight site. However, the Company now
believes that the most sustainable development concept for the Project is likely to involve mining
at site and the production of an iron ore concentrate for transportation via a slurry pipeline to a
manufacturing facility near the Thabazimbi railhead. High quality iron ore pellets (which would
be a mixture of DR grade pellets suitable for use in electric arc steel furnaces, and blast furnace
pellets) would then be transported by rail to local users and to a suitable port facility for export
internationally.
Several pelletiser sites and rail and port combinations have been considered, and the Company
has continued to seek confirmation from infrastructure providers (including rail, port and power
suppliers) of an allocation of future capacity for the Company. During the 2012 financial year, the
South African Government announced that significant capital would be applied in upgrading the
rail and port facilities that service the Waterberg Region, which is close to where the Moonlight
Deposit is situated. These planned upgrades are strategically necessary to unlock the value of the
Waterberg Region, where the country’s most significant remaining coal reserves are situated.
Accordingly, rail, power, water and port facilities are all being upgraded as a matter of national
priority.
Proposed Rail Upgrades to Waterberg Coal Sources
The figure below contains a map showing the planned upgrades to the rail infrastructure that is
considered to be the most likely to be used for the Moonlight Project. The pelletising facility
would be situated near rail at Thabazimbi, and export product would be railed to Richards Bay
and shipped to customers in the Middle East and elsewhere.
[RNS team: insert image “propsoed rail updgrades’]
Figure showing Proposed Rail Upgrades to Waterberg Coal Sources
The above figure contains a map showing the planned upgrades to the rail infrastructure that is
considered to be the most likely to be used for the Moonlight Project. The pelletising facility
would be situated near rail at Thabazimbi, and export product would be railed to Richards Bay
and shipped to customers in the Middle East and elsewhere.
The Company in June 2011 entered into an offtake agreement with Swiss based Duferco SA, a
leading private company in the trading, mining, and end use of iron and steel products and raw
materials for the steel industry. Following due diligence on the mineral assets of the Company,
Duferco concluded that the Group should be able to produce direct reduction and/or blast
furnace pellets equal to or better than current world best product.
The offtake agreement with Duferco SA covers up to 6 Mpta of anticipated iron ore pellet
production from Ferrum Crescent’s Moonlight Project. Under the agreement, Ferrum Crescent
will sell Duferco all of their production available for export (in total 4.5 Mpta) and will give
Duferco a first right of refusal over an additional 1.5 Mpta per year to the extent that the product
is not sold domestically, thus allowing Ferrum Crescent to follow a growth strategy at its South
African projects.
Environmental
EIAs are currently being prepared for the other areas of the Project including the pellet plant site
and pipeline route. It should be emphasised that environmental approvals are in place for all
mining activities.
Geology and Mineral Resources
The Mineral Resources are currently located entirely on the farm Moonlight 111LR, with
significant potential to expand the resource base within the Project area once all current work is
financed and complete.
Mineral Corporation Consultancy Pty Ltd (“The Mineral Corporation”) undertook the update of
the Mineral Resource estimate, which was previously stated in terms of JORC (2004). The Mineral
Corporation updated all of the assumptions used in determining the previous estimate, with
respect to the requirements of JORC (2012). It determined that the Mineral Resource
classification criteria imposed in the previous estimate were still valid. Furthermore, the
additional reporting requirements contained in JORC (2012) have been complied with in the
updated Mineral Resource estimate report.
[RNS team: Insert ‘Moonlight geo plan’]
Figure of Moonlight Deposit Geological Plan
A summary of the information related to the updated Mineral Resource estimate prepared by
The Mineral Corporation is provided below (in accordance with the ASX Listing Rules, Section
5.8.1):
Magnetite mineralisation has been identified in five mineralised zones within Mount Dowe Group
rocks in the Central Zone of the Limpopo Mobile Belt. The mineralised zones are interpreted to
have been tightly-folded, parallel to the east-northeast to west-southwest orientation of the
Limpopo Mobile Belt.
Iron concentrations within the magnetite mineralised zones are interpreted to be parallel with
the contacts with the host rocks, and zones of unmineralised material are also found within the
mineralised zones.
The Project has been explored in the past by Kumba Iron Ore Limited (KIOL) and more recently by
Ferrum Crescent. Drilling data from KIOL and three phases of Ferrum Crescent exploration inform
the estimate. The drilling comprised open-hole percussion, reverse circulation (RC) percussion
and diamond core drilling and was all drilled in a vertical orientation.
Limited information on the drilling, sampling, sub-sampling or assaying for the historic KIOL data
is known, but the RC and diamond drilling portions of the KIOL data have been accepted for the
Mineral Resource estimate on the basis of successful borehole twinning analysis, by Ferrum
Crescent.
During the Ferrum Crescent exploration, industry standard diamond drilling and RC drilling
techniques were used to generate sampling information. Representivity was ensured by
appropriate sub-sampling protocols. RC samples (1m-2m) were riffle split on site and diamond
core samples were halved with a diamond saw. The Ferrum Crescent drilling, sampling and sub-
sampling protocols are considered acceptable for the style of mineralisation.
A total of 122 RC holes and 89 diamond core holes were employed in the Mineral Resource
estimate.
For the Ferrum Crescent samples, primary samples and analytical quality assurance and control
samples were submitted to Genalysis Laboratory Services (Johannesburg) for analysis by X-Ray
Fluorescence techniques, by Intertek Utama Services (Jakarta).The analytical protocols are
considered acceptable for the style of mineralisation at the Project.
Samples within each mineralised zone were composited parallel to the dip of the mineralised
zone and variograms were calculated and modelled to assess grade continuity. Vertical grade
continuity was assessed by downhole variograms. Variogram ranges of between 150m and 250m
were obtained in the plane of the mineralised zones and between 7m and 30m in the vertical
direction. Grade estimation was by means of Ordinary Kriging, using search parameters aligned
with the mineralised zones, into blocks of 50m x 50m x 5m
The drill spacing, surface mapping, structural interpretation, variography and kriging error
estimates informed the Mineral Resource classification, which included Inferred, Indicated and
Measured Mineral Resources. In areas of well-defined geological structure and modest grade
variability, a 100m x 100m drill spacing grid was deemed sufficient for Measured Mineral
Resources and the deemed maximum spacing for Inferred Mineral Resources is approximately
300m x 300m. Indicated Mineral Resources are informed by a drill spacing of approximately
200m x 200m.
A block cut-off grade of 16% Fe was selected, based on an Fe concentration which falls between
the Fe concentration of the mineralised and unmineralised zones. As the contacts between these
zones are generally sharp, the estimate is not sensitive to cut off grade. A geological loss of 5%
was applied.
The Mineral Corporation has considered the reasonable prospects for eventual economic
extraction of the deposit. This was performed by estimating a maximum stripping ratio which
would still provide an acceptable economic return, under a set of benchmarked operating cost
and price assumptions. These resulted in a maximum stripping ratio of 3:1 (waste tonne:
mineralised tonne). Applying a depth constraint of between 100m and 250m from surface,
(depending upon the dip and the number of mineralised zones present), ensured that all
mineralisation included in the Mineral Resource estimate is within this maximum stripping ratio
criterion.
The Mineral Resource estimate is provided in the table below in accordance with JORC (2012)
and Section 5.8.2 of the ASX Listing Rules..
Category Mineral Resource Mineral Resource Net Mineral Resource
Gross (attributable to Grade
Ferrum Crescent at
97%)
Tonne Contained Tonne Contained Fe SiO2 Al2O3
(Mt)* Fe (Mt)* (Mt)* Fe (Mt)* (%) (%) (%)
Inferred 172.1 43.5 166.9 42.2 25.3 51.2 4.8
Indicated 83.0 22.7 80.5 22.1 27.4 50.1 4.0
Measure 52.6 16.5 51.0 16.0 31.3
d 47.3 2.5
Total 307.7 82.8 298.5 80.3 26.9 50.3 4.2
*Tonnes are rounded
Valuation
As at 30 April 2014, The Mineral Corporation prepared an independent valuation for the Project.
This independent valuation can be viewed by accessing the following link and going to the
disclosures for July 2014: http://www.ferrumcrescent.com/irm/archive/asx-
announcements.aspx?RID=8
Recent Drilling
During the reporting period, the Company completed a drilling programme that was designed to
investigate the extent of Zone D and provide information to inform the location of the proposed
future mine. Its purpose was also to identify if, and the areas where, bulk sampling for the
requisite levels of metallurgical testwork should take place during the next stage of the
Moonlight BFS.
The drill programme comprised 10 reverse circulation drill holes (for a cumulative total of
1,396m) and was completed in Q1 2015 ahead of time and below budget. All holes intersected
mineralised magnetic zones across various depths.
The Zone D drilling confirmed comparable grades to those previously identified within the
Inferred Resource, and consequently enabled the Company to finalise its plans for the BFS with
respect to the location and design of the proposed open pit mine for the first 10 years of the
mine’s life, within primary Zones A, B and C, due to shallower intersections, higher grades and
better stripping economics. A new zone of mineralisation, Zone E, was also identified
representing future exploration potential.
Further infill drilling is required to establish a JORC (2012) Ore Reserve and for advanced
beneficiation work to be undertaken as part of the direct reduction iron (DRI) plant design
process. The success of such infill drilling will also determine whether bulk sampling is necessary
to complete the full mine design and plant costings.
Following the future completion of all mine plan, plant design and processing assessments, the
final stage of the BFS can then be progressed, utilising the stand-alone project economics to
establish optimal infrastructure agreements with the relevant local government agencies.
Infrastructure
Encouraging planning discussions relating to future rail, power, ports and water supply between
the Company, Transnet and other South African infrastructure suppliers have continued during
the reporting period. Further to such discussions and a desk top analysis of increasing rail
capacity within the Limpopo region, the Company has commissioned a full market study of South
African steel manufacturing. The Company continues to believe that there is a significant
opportunity to vend Moonlight’s potential high-grade end product to domestic steel users,
thereby potentially obviating the need to ship pellets through Richards Bay.
Community
A baseline socio-economic impact study of the areas occupied by both the Ga-Seleka and Ga-
Shongoane communities situated within a 50km radius of the mining right area is well advanced.
Monthly meetings are held with the Royal Council and Traditional Council of both communities as
well as updating the Lephalale Municipality on findings and proposed initiatives. Once the study
is included an announcement will be made on findings relating to current local skills
identification, future employment terms and training needs.
Project Schedule
The following sets out the schedule and significant factors with respect thereto for Moonlight:
- Feasibility study can be completed within 18 months work-time;
- 30 to 36 month construction period expected;
- Schedule coincides with Government infrastructure development plans; and
- Completion of the feasibility is expected to cost approximately AD10 -13m.
Corporate
On 6 November 2014 the Company announced the successful completion of a partially
underwritten non-renounceable rights issue to raise AUD1.03 million before expenses. The
additional funds were raised to progress the work-streams required to complete key components
of the BFS and satisfy corporate overheads whilst seeking to attract and secure new BEE and
other cornerstone investors. In May 2015 the Company conducted a private placing to raise
approximately a further AUD0.97 million (before expenses) from sophisticated investors in
London to, inter alia, augment its working capital.
Mr Ted Droste and Mr Kofi Morna resigned as non-executive directors with effect from 31
December 2014 to pursue their other business interests and the Board appreciates their
contribution to the Group’s development.
Mr Ed Aylmer was appointed as BFS Study Manager on 22 October 2014, based in Johannesburg,
South Africa. Mr Alymer has more than 30 years’ experience in the mining and mineral
processing industries and has acted as senior study manager for project developments on behalf
of Severstal, Vendanta, Goldfields and Ivanplats.
On 14 March 2015, the Company terminated the pre-existing investment agreement with Anvwar
Asian Investments (“AAI”) as a result of AAI’s breach of a material term of the agreement.
During the reporting period, the Company entered into agreements with Hume Capital Securities
plc and Beaufort Securities Limited for their services as the Company’s retained AIM broker.
Beaufort Securities Limited assumed the role of sole AIM broker on 23 March 2015. In addition,
the Company appointed Strand Hanson Limited as its financial and nominated adviser on 2 March
2015 and 29 May 2015 respectively. The Company granted, in aggregate, 10 million options to
the aforementioned professional advisers pursuant to their respective agreements. On the date
of grant, the options had an exercise period of three years and an exercise price of GBP0.0075 (as
to 4 million options) and GBP0.02 (as to 6 million options). Bravura Capital (Pty) Limited was also
appointed as the Company’s JSE Sponsor with effect from 19 January 2015.
In May 2015, the Company entered into a Memorandum of Understanding (“MOU”) with
Principle Monarchy Investments (Proprietary) Limited (“PMI”), whereby PMI would pay R142m
(USD12m) to acquire up to 39% of Ferrum Iron Ore (Proprietary) Limited (“FIO”). The incoming
funds would be used by FIO towards financing of the BFS costs for the Moonlight Project. In
return for an investment of USD12m, to be paid across three tranches, PMI would receive a total
of 39% of FIO’s equity.
As at the date of this announcement, the first payment due under the terms of the MOU has yet
to be received such that the MOU is not legally binding at this point.
Furthermore, the Company is at the date of this announcement at an advanced stage in relation
to an alternative BFS financing arrangement with another group.
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2015
2015 2014
Note D D
Revenue from continuing operations
Revenue 3(a) 23,753 35,844
Administration expenses 3(b) (1,478,102) (1,595,092)
Occupancy expenses (66,218) (58,191)
Exploration expenditure (456,595) (419,216)
Profit / (loss) on re-measurement of financial liability/asset 239,390 (304,660)
Foreign exchange loss (176,532) (29,345)
Share based payments 20 (90,851) (194,938)
Impairment of Minority Interest Obligation (447,765) -
Reclassification of net changes in fair value of available for
sale investments 137,597 -
Loss before taxation (1,315,323) (2,565,598)
Income tax benefit / (expense) 5 (30,537) 15,816
Loss for the year (2,345,860) (2,549,782)
Other comprehensive income
Other comprehensive income to be recycled through profit
and loss
Net exchange gain / (loss) on translation of foreign
(180,614) 4,098
operation
Net fair value gains on available-for-sale investment 28,536 51,251
Income tax effect (7,990) (14,352)
Reclassification of net changes in fair value relating to the (137,597) -
disposal of available for sale investments
Income tax effect 38,527 -
Other comprehensive income for the year, net of tax (259,138) 41,003
Total comprehensive loss for the year (2,604,998) (2,508,779)
Net loss for the year attributable to:
Equity holders of the Parent (2,345,860) (2,549,782)
(2,345,860) (2,549,782)
Total comprehensive loss for the period attributable to:
Equity holders of the Parent (2,604,998) (2,508,779)
(2,604,998) (2,508,779)
Loss per share Cents per share Cents per share
Basic loss for the year attributable to ordinary equity 7 (0.50) (0.75)
holders of the Parent
Diluted loss for the year attributable to ordinary equity
holders of the Parent 7 (0.50) (0.75)
Consolidated Statement of Financial Position
As at 30 June 2015
2015 2014
Note D D
Assets
Current assets
Cash and short term deposits 8 1,028,468 738,345
Trade and other receivables 9 21,928 34,210
Other current financial assets 11 34,325 240,517
Prepayments 76,983 54,408
Total current assets 1,161,704 1,067,480
Non-current assets
Plant and equipment 10 29,645 46,981
Non-current financial assets 11 187,048 772,429
Total non-current assets 216,693 819,410
Total assets 1,378,397 1,886,890
Liabilities and equity
Current liabilities
Trade and other payables 12 168,713 322,582
Payments received in advance 14 629,325 -
Loans and borrowings 13 - 515,999
Provisions 15 54,837 95,883
Total current liabilities 852,875 934,464
Total liabilities 852,875 934,464
Equity
Contributed equity 16 31,542,093 29,333,702
Accumulated losses 19 (22,850,764) (20,504,904)
Reserves 18 (8,165,807) (7,876,372)
Equity attributable to equity
holders of the Parent 525,522 952,426
Non-controlling Interest - -
Total equity 525,522 952,426
Total equity and liabilities 1,378,397 1,886,890
This Statement of Financial Position is to be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
For the year ended 30 June 2015
2015 2014
Note D D
Cash flows from operating activities
Interest received 10,635 19,918
Income from available for sale investment 13,118 15,926
Exploration and evaluation expenditure (458,777) (415,352)
Payments to suppliers and employees (2,140,761) (1,366,830)
Net cash flows used in operating activities 24 (2,575,785) (1,746,338)
Investing activities
Payments for plant and equipment 456 1,872
Purchase of available-for-sale financial assets (154,110) -
Sale of available-for-sale financial assets 937,688 -
Sale / (purchase) of available-for-sale financial assets - (89,355)
Proceeds from disposal of available-for-sale financial assets 99,070 52,721
Net cash flows from / (used in) investing activities 883,104 (34,762)
Financing activities
Proceeds from issue of shares 2,233,415 1,588,459
13 - 515,999
Proceeds from receipt of initial deposit from Third Party Investor
Transaction costs on issue of shares (269,780) (111,234)
Net cash flows from financing activities 1,963,635 1,993,224
Net increase in cash and cash equivalents held 270,954 212,124
Net foreign exchange difference 19,169 (22,044)
Cash and cash equivalents at 1 July 738,345 548,265
Cash and cash equivalents at 30 June 8 1,028,468 738,345
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
For the year ended 30 June 2015
Attributable to the equity holders of the Parent
Employee share
incentive Foreign exchange Available for
Issued capital Accumulated reserve Option reserve sale reserve Equity Total equity
losses D reserve D D reserve D
D D D D
At 1 July 2013 27,856,478 (17,939,306) 513,702 1,404,425 130,462 27,273 (10,126,072) 1,866,962
Loss for the period - (2,565,598) - - - - - (2,565,598)
Other Comprehensive Income (net of tax) - - - - 4,098 51,251 - 55,349
Total comprehensive loss (net of tax) - (2,565,598) - - 4,098 51,251 - (2,510,249)
Transactions with owners in their capacity as owners:
Shares issued during the year net of transaction costs 1,400,775 - - - - - - 1,400,775
Shares issued to KMPs under the Salary Sacrifice
Scheme 76,449 - (76,449) - - - - -
Options issued under Employee Option Plan - - - 23,856 - - - 23,856
Share based payments - - 171,082 - - - - 171,082
At 1 July 2014 29,333,702 (20,504,904) 608,335 1,428,281 134,560 78,524 (10,126,072) 952,426
Loss for the period - (2,345,860) - - - - - (2,345,860)
Other Comprehensive Income (net of tax) - - - - (180,614) (78,524) - (259,138)
Total comprehensive loss (net of tax) - (2,345,860) - - (180,614) (78,524) - (2,604,998)
Transactions with owners in their capacity as owners:
Shares issued during the year net of transaction costs 2,037,244 - - - - - - 2,037,244
Shares issued to market previously on the Employee
- - 54,389 - - - - 54,389
Share Incentive Plan
Directors and KMP salary sacrifice for shares issued 171,147 - (171,147) - - - - -
Options issued to Consultants and Brokers - - - 42,300 - - - 42,300
Options issued under Employee Option Plan - - - 44,161 - - - 44,161
At 30 June 2015 31,542,093 (22,850,764) 491,577 1,514,742 (46,054) - (10,126,072) 525,522
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Notes to the consolidated financial statements
For the year ended 30 June 2015
Selected notes from the full annual report for period end 30 June 2015
Note 1: Corporate information
The consolidated financial statements of Ferrum Crescent Limited and its subsidiaries
(collectively, the Group) for the year ended 30 June 2015 were authorised for issue in accordance
with a resolution of directors on 09 September 2015.
Ferrum Crescent Limited, the parent, is a for profit company limited by shares incorporated in
Australia whose shares are publicly traded on the Australian Stock Exchange (ASX), the London
Stock Exchange (AIM) and the JSE Limited (JSE).
Domicile:
Australia
Registered Office:
‘G South Mill Centre’ Suite 6, 9 Bowman Street, South Perth, WA, 6151
Note 2: Summary of significant accounting policies
(a) Basis of preparation
The Financial Report is a general purpose financial report, which has been prepared in accordance
with the requirements of the Corporations Act 2001, Australian Accounting Standards and
Interpretations and complies with other requirements of the law.
The accounting policies detailed below have been consistently applied to all of the years
presented unless otherwise stated. The financial statements are for the consolidated entity
consisting of Ferrum Crescent Limited and its subsidiaries.
The Financial Report has also been prepared on a historical cost basis, except for the forward
subscription agreement and the available-for-sale (AFS) investments which have been measured
at fair value.
All amounts are presented in Australian dollars, unless otherwise noted.
(b) Statement of compliance
The Financial Report complies with Australian Accounting Standards, as issued by the Australian
Accounting Standards Board, and complies with International Financial Reporting Standards
(IFRS), as issued by the International Accounting Standards Board.
(c) Adoption of new and revised standards
Ferrum Crescent Limited and its subsidiaries (‘the Group’) has adopted all new and amended
Australian Standards and Interpretations mandatory for reporting periods beginning on or after 1
July 2014, including:
- AASB 2012-3 Amendments to Australian Accounting Standards – Disclosures – Offsetting
Financial Assets and Financial Liabilities
- Interpretation 21 Levies
- AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-
Financial Assets
- AASB 1031 Materiality
- AASB 2013 – 9 Amendments to Australian Accounting Standards – Conceptual Framework,
Materiality and Financial Instruments
Note 2: Summary of significant accounting policies (continued)
(c) Adoption of new and revised standards (continued)
- AASB 2014-1 Part A – Annual Improvements 2010–2012 Cycle Amendments to Australian
Accounting Standards - Part A Annual Improvements to IFRSs 2010– 2012 Cycle
- AASB 2014-1 Part A – Annual Improvements 2011–2013 Cycle Amendments to Australian
Accounting Standards - Part A Annual Improvements to IFRSs 2011– 2013 Cycle
The adoption of these standards and interpretations did not have any material effect on the
financial position or performance of the Group.
(g) Going concern
The Annual Report has been prepared on a going concern basis and this basis is predicated on a
number of initiatives being undertaken by the Group with respect to ongoing cost reductions and
funding as set out below.
The Group incurred an operating loss after income tax of D1,898,095 for the year ended 30 June
2015 (2014: D2,549,782). In addition, the Group has net current assets of D756,594 as at 30 June
2015 (2014: D133,016), which includes the forward subscription agreement, and shareholders’
equity of D973,287 (2014: D952,426).
The Group’s forecast cash flow requirements for the 15 months ending 30 September 2016
reflect cash outflows from operating and investing activities, which take into account a
combination of committed and uncommitted but currently planned expenditure. The Group has
prepared two different forecasts.
The first depends upon whether the BFS continues as planned with PMI or another new investor
contributing towards the BFS expenses. This forecast shows sufficient cash will be available up to
the end of September 2016 and beyond.
The second is for a scaled down operation whilst the Group waits for another funding
opportunity. This indicates that the Group will need to raise additional working capital during the
2016 financial year 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 Annual 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 are satisfied
that they will be able to raise additional funds by either selling existing assets, through
implementation of strategic joint ventures or via a form of debt and/or equity raising. In addition,
the Directors have embarked on a strategy to reduce costs.
Note 3: Revenue and expenses
Revenue and expenses from continuing operations
2015 2014
Note D D
(a) Revenue
Finance revenue:
Interest received 23,753 35,844
(b) Profit and loss
Other expenses include the following:
Depreciation 18,580 23,058
Gain on disposal of plant and equipment - 180
Consulting services 238,053 221,719
Employment related
- Directors fees 404,228 327,471
- Wages 171,623 228,230
- Superannuation 41,595 17,258
Corporate 271,287 256,851
Travel 62,691 122,130
Other 270,045 398,195
1,478,102 1,595,092
Note 7: Earnings per share
2015 2014
D D
Basic loss per share (cents per share) (0.50) (0.75)
Diluted loss per share (cents per share) (0.50) (0.75)
Loss used in calculating basic loss per share (2,345,860) (2,549,782)
Adjustments to basic loss used to calculate dilutive loss
per share - -
Loss used in calculating dilutive loss per share (2,345,860) (2,549,782)
Number Number
Weighted average number of ordinary shares used in the 468,894,04 343,268,69
calculation of basic loss per share 1 6
Weighted average number of ordinary shares used in the 468,894,04 343,268,69
calculation of diluted loss per share 1 6
There have been no transactions involving ordinary shares or potential shares that would
significantly change the number of ordinary shares or potential ordinary shares outstanding
between the reporting date and the date of completion of these financial statements.
Note 1 – 13,000,000 share options outstanding at 30 June 2015 (30 June 2014: 3,400,000) have
not been included in the calculation of dilutive earnings per share as these are anti-dilutive.
Note 2 – 29,954,525 potential shares to be issued under the subscription agreement (note 11)
have not been included in the calculation of dilutive earnings per share as these are anti-dilutive.
Note 23: Related party transactions
Compensation of Key Management Personnel
2015 2014
D D
Short-term employee benefits 828,463 838,334
Post-employment benefits 37,539 14,287
Share based payments 85,675 194,937
Termination benefits - 2,715
951,678 1,050,273
Transactions between related parties are on normal commercial terms and conditions and no
more favourable than those available to other parties unless otherwise stated.
Subsidiaries
The consolidated financial statements include the financial statements of Ferrum Crescent
Limited and the subsidiaries listed in the following table.
% Beneficial Equity
Interest
Name Country of Incorporation 2015 2014
Ferrum Metals Pty Ltd Australia 100 100
Batavia Ltd Mauritius 100 100
Ferrum South Africa (Pty) Ltd South Africa 100 100
(“FIO”)
Ferrum Iron Ore (Pty) Ltd South Africa 100 100
Mkhombi Investments (Pty) Ltd South Africa 100 100
(“MI”)
Ferrum Crescent Limited is the ultimate Australian parent entity and the ultimate parent of the
Group. Transactions between Ferrum Crescent Limited and its controlled entities during the year
consisted of loan advances by Ferrum Crescent Limited. All intergroup transactions and balances
are eliminated on consolidation.
The Baphuting Bo Seleka Community Trust (“Trust”) has a 3% indirect interest in FIO, the project
Company, via its investment in MI. Until such time as FIO commences mining no expenses or
investments have been carried over to the Trust.
.
In May 2015, the Company entered into a Memorandum of Understanding (“MOU”) with
Principle Monarchy Investments (Proprietary) Limited (“PMI”), whereby PMI will pay R142m
(USD12m) to acquire up to 39% of Ferrum Iron Ore (Proprietary) Limited (“FIO”). The incoming
funds will be used by FIO towards financing of the BFS costs for the Moonlight Project. In return
for an investment of USD12m, to be paid across three tranches, PMI will receive a total of 39% of
FIO’s equity.
As at the date of this report, the first payment due under the terms of the MOU had yet to be
received such that the MOU was not legally binding at that point.
Furthermore, the Company is at the date of this report at an advanced stage in relation to an
alternative BFS financing arrangement with another group.
Loans to / (from) related parties
The following transactions were undertaken between the Company, executive officers and
director-related entities during 2014 and 2015.
2015 2014
D D
Consulting secretarial fees were paid or accrued to Athlone
International Consultants Pty Ltd, a company with which - 50,007
Andrew Nealon is associated
Consulting fees were paid or accrued to Camcove Pty Ltd, a
company of which Robert Hair is a director and shareholder 60,000 151,000
Consulting fees were paid to T.C. Droste Investments Pty Ltd,
a company of which Ted Droste is a director and shareholder - 34,313
Note 24: Cash flow information
2015 2014
D D
Reconciliation of cash flow from operations with loss from
ordinary activities after income tax
Loss from ordinary activities after income tax (1,898,095) (2,565,598)
Depreciation 18,580 23,058
Loss / (profit) on sale of plant and equipment - 180
Profit on sale of available for sale financial assets (107,060) -
Loss / (profit) on remeasurement of financial liability (239,390) 304,660
Share based payment compensation 98,773 23,856
Net foreign exchange differences (54,155) 122,173
Changes in assets and liabilities
(Increase) / decrease in receivables (174,766) 235,095
(Increase) / decrease in other operating assets (24,758) 1,006
Increase / (decrease) in payables and provisions (194,914) 109,233
Cash flows used in operations (2,575,785) (1,746,338)
Note 27: Subsequent events
In May 2015, the Company entered into a Memorandum of Understanding (“MOU”) with
Principle Monarchy Investments (Proprietary) Limited (“PMI”), whereby PMI will pay R142m
(USD12m) to acquire up to 39% of Ferrum Iron Ore (Proprietary) Limited (“FIO”). The incoming
funds will be used by FIO towards financing of the BFS costs for the Moonlight Project. In return
for an investment of USD12m, to be paid across three tranches, PMI will receive a total of 39% of
FIO’s equity.
As at the date of this report, the first payment due under the terms of the MOU had yet to be
received such that the MOU was not legally binding at that point.
Furthermore, the Company is at the date of this report at an advanced stage in relation to an
alternative BFS financing arrangement with another group.
ASX Requirements
Distribution schedules of shareholders and statements of voting rights are set out in Table 1,
whilst the Company’s top twenty shareholders are shown in Table 2. Substantial shareholder
notices that have been received by the Company are set out in Table 3 and the tenement
schedule as at 30 June 2015 is set out in Table 4.
Table 1
Shareholder spread
Ordinary shares, with right to attend meetings and vote personally or by proxy, through
show of hands and, if required, by ballot (one vote for each share held)
1-1,000 56
1,001-5,000 71
5,001-10,000 101
10,001-100,000 254
100,001 - and over 267
Total holders of ordinary shares 749
Total number of ordinary shares 618,787,353
Options, with no right to attend meetings or vote personally or by proxy
1-1,000 -
1,001-5,000 -
5,001-10,000 -
10,001-100,000 -
100,001 - and over 7
Total holders of options 7
Total number of options 13,000,000
Table 2
Top twenty shareholders
Shareholder Number of shares Percentage
Grassroots Exploration Pty Ltd 77,505,870 14,93%
Barclayshare Nominees Limited 74,606,093 12.06%
Rathbone Nominees Limited 31,340,486 5.06%
TD Direct Investing Nominees (Europe) Limited 27,687,074 4.47%
Mr Edward Francis Nealon 26,741,557 4.32%
Mkhombi Amamato (Proprietary) Ltd 25,281,620 4.09%
Citicorp Nominees Pty Limited 18,780,283 3.04%
SVS Nominees Limited -POOL- 18,034,150 2.91%
WB Nominees Limited 14,066,623 2.27%
HSDL Nominees Limited 12,672,111 2.05%
Peel Hunt Holdings Limited -PMPRINC- 11,788,445 1.96%
National Nominees Limited 11,472,440 1.85%
Hargreaves Lansdown (Nominees) Limited 10,872,256 1.76%
-HLNOM-
SVS Securities (Nominees) Isa Limited -ISA- 9,230,950 1.50%
Hargreaves Lansdown (Nominees) Limited 8,472,397 1.37%
-15942-
Sunshore Holdings Pty Ltd 8,034,361 1.30%
HSBC Client Holdings Nominee (UK) Limited 6,444,820 1.04%
-731504-
Pershing Nominees Limited -ABCLT- 5,250,757 0.85%
HSBC Marking Name Nominee (UK) Limited 5,225,000 0.80%
-689925-
Table 3
Substantial shareholders
Shareholder Number of shares Percentage
1. Grassroots Exploration Pty Ltd 77,505,870 14.93%
2. Barclayshare Nominees Ltd 74,606,093 12.06%
3. Rathbone Nominees Limited 31,340,486 5.06%
Voting Rights
The voting rights attached to each class of equity securities are set out below:
(a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one
vote and upon a poll each share shall have one vote.
Table 4
Tenement schedule as at 30 June 2015:
Project Tenement Number Tenement Holder Percentage
Status Interest
Moonlight 30/5/1/2/2/201 MR Mining Right Ferrum Iron 97%
Granted Ore (Pty) Ltd
Moonlight LP30/6/1/1/2/11868PR Prospecting Ferrum Iron 97%
Application Ore (Pty) Ltd
JSE Limited Requirements
Headline earnings reconciliation 2015 2014
D D
Loss attributable to ordinary equity holders of the
parent entity (2,345,860) (2,549,782)
Add back IAS 16 loss on the disposal of plant and
equipment - 180
Less profit on sale of available for sale investments (137,597) -
Total tax effects of adjustments 38,527 -
Headline loss 2,444,930) (2,549,602)
Basic loss per share (2,345,860) (2,549,782)
Weighted average shares in issue 468,894,041 343,268,696
Basic loss per share (cents) (0.50) (0.75)
Headline loss (2,444,930) (2,549,602)
Weighted average shares in issue 468,894,041 343,268,696
Headline loss per share (cents) (0.52) (0.75)
Date: 30/09/2015 09:24:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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