Wrap Text
Results for the Half Year Ended 31 December 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
Australian ISIN: AU000000WRL8
South African ISIN: AU000000FCR2
15 March 2016
Ferrum Crescent Limited
("Ferrum Crescent", the "Company" or the "Group") (ASX: FCR, AIM: FCR, JSE: FCR)
Results for the Half-Year Ended 31 December 2015
Ferrum Crescent, the ASX, AIM and JSE quoted metals project developer, today announces its
unaudited results for the half-year ended 31 December 2015.
Highlights:
- BFS Farm-in Agreement concluded with BVI/Ovation Capital in respect of the Moonlight
Project
o Phased investment to progress the major BFS stages up to the logistics negotiation
stage
- Agreement signed following termination of the memorandum of understanding with Principle
Monarchy Investments (Proprietary) Ltd
- Justin Tooth appointed, following Ed Nealon’s resignation, as Non-Executive Chairman
Financial Overview
- Current assets as at 31 December 2015 of AUD408,126 (2014: AUD1,862,671)
- Loss for the half-year of AUD727,485 (2014: AUD463,690)
Post Period End
- Further to entering into the BFS Farm-in Agreement, cost-cutting measures undertaken at
Group level
- Company is focusing on identifying and driving near-term value from additional non-ferrous
projects
- Option secured over certain promising Spanish lead-zinc assets
- Successful fundraising concluded to assist with staged option payments and provide working
capital
- General meeting convened to seek share capital headroom to allow the Company to raise
additional funds to potentially exercise the option and then progress resource delineation
and process testing on the Spanish assets
A pdf copy of the full half-year 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 set out below.
Commenting on the half-year interim results, Tom Revy, Managing Director of Ferrum Crescent
said:
“During the period we secured an agreement with Ovation Capital over Moonlight that effectively
allows an equity earn in, at asset level, structured in relation to project spend. Following signature
of this agreement, we have consequently refocused our operations, making changes to reduce
costs and progress the identification of value for shareholders from new projects. The Board’s
view is that whilst the Moonlight BFS progresses and remains an important value driver for the
Company, we should evaluate how near-term, low cost work could be undertaken on potential
new projects. With that in mind, we signed the option over the Spanish lead-zinc assets in
February 2016.”
Justin Tooth, Non-Executive Chairman of Ferrum Crescent, said:
“Having joined the board during the period, I am very positive about the work that has been, and
is being, undertaken in South Africa at the Moonlight Project. My time spent on the ground in
South Africa talking to major stakeholders in respect of Moonlight has reinforced my view that
our flagship project is an important and valuable asset and at the right stage of development to
provide a potential rapid new source into a depleting domestic iron ore supply. The nature
of our funding partnership in South Africa enables the BFS at Moonlight to progress whilst
allowing us to reduce corporate costs and still deliver on our strategy to build shareholder
value across a highly focused portfolio.
“Our recent option over the Spanish assets allows us to potentially pursue two new resources
with process testing and other key delineation goals at minimum cost. The key opportunity at this
time for companies such as Ferrum is to avoid spending large amounts of capital on increasing
defined resources and instead ultilise our team's previous experience and abilities to acquire
undervalued, quality projects and then build value based on the historic work already
performed. I very much look forward to the next twelve months and thank our shareholders for
their continued support and interest as we move forward into a new era for the Company.”
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 7557 672 432
Strand Hanson Limited (Nominated
Adviser)
Rory Murphy / Matthew Chandler
T: +44(0)20 7409 3494
Beaufort Securities Limited (Broker)
Jon Belliss / Elliot Hance
T: +44(0)20 7382 8300
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 review 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 the date of release of this announcement.
Summary
Ferrum’s interest in the Moonlight Iron Project is held through the Group’s direct and indirect
shareholding in Ferrum Iron Ore (Pty) Limited (“FIO”), the shares of which are currently held as to
74% by Ferrum South Africa (Pty) Limited (“FSA”) (previously, Nelesco 684 (Pty) Limited) and as to
26% by Mkhombi Investments (Pty) Limited (“MI”).
In October 2015, the Company announced that FSA and FIO had entered into a farm-in and joint
venture agreement (the “Farm-in Agreement”) with Business Venture Investments No. 1709
(Proprietary) Limited (“BVI”) in South Africa for the completion of the bankable feasibility study
(“BFS”) at the Moonlight Iron Project. BVI is a sister company of South African BEE investment house
Ovation Capital.
During the reporting period, the Company had investigated a number of scenarios with respect to
various potential smaller scale start up options, including the potential development of a
concentrate-only producing project. This initial review work concluded that as well as potentially
significant capital cost savings, there are also possible development time benefits and seemingly
sufficient local demand for a high quality concentrate product.
Corporate
Mr Ed Nealon resigned during the reporting period, and Mr Justin Tooth joined the board as a non-
executive director and chairman. The remaining members of the board thanked Mr Nealon for his
contributions to the Company and wished him every success in his future endeavours. Mr Nealon
continues to be a strong supporter of the Company.
Going Concern
The Group has current assets of AUD 408,126 as at 31 December 2015 (30 June 2015: AUD
1,161,704), incurred a net loss of AUD 727,485 (31 December 2014: AUD 463,690) and had cash used
in operations of AUD 764,737 (31 December 2014: AUD 1,465,637) for the six month period then
ended.
The Group’s forecast cash flow requirements for the 12 months ending 31 March 2017 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 31 March 2016 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 Group’s Directors are aware of the possibility that Anvwar Asian Investment (“AAI”) may pursue
further legal recourse to claim the USD 500,000 received from it in terms of the Letter of Intent
(“LOI’) signed by both parties. The Group will however put forward a counter claim to recoup
expenses incurred in subsequently having to find additional funding after the agreement was
terminated on 14 March 2015.
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 and are confident they will
successfully raise the necessary funding for the Company to continue as a going concern.
In the event that the Group is unable to raise additional funds to meet the Group’s planned
expenditure when required there is a material uncertainty that may raise significant doubt as to
whether the Group will be able to meet its debts as and when they fall due and thus continue as a
going concern. Should the Company not continue as a going concern, it may be unable to realise it
assets and discharge its liabilities at the amounts stated in the financial report.
Events subsequent to reporting date
On 15 February 2016, Ferrum Crescent Limited (“the Company”) entered into an option and sale
agreement (the “Option and Sale Agreement”) for a staged option fee of up to £22,500, with TH
Crestgate GmbH (“Crestgate”), a private Swiss-based company, in respect of the potential acquisition
of GoldQuest, its indirect wholly-owned subsidiary. The Option and Sale Agreement affords the
Company an exclusive option, valid until 31 July 2016, to acquire 100 per cent of GoldQuest’s issued
share capital (the “Option”), for an aggregate consideration of approximately £465,000 (based on the
Company’s closing mid-market share price on 12 February 2016 of 0.145 pence per Ordinary Share),
to be satisfied principally in cash and partly by the issue of new Ordinary Shares. The Option is
exercisable entirely at Ferrum Crescent’s discretion.
GoldQuest holds licences covering 2,024ha in the Province of Le?n (the “Toral Project”) and in the
Province of Galicia (the “Lago Project”), all such licence areas being located in northern Spain and
having high prospectivity for lead and zinc.
In light of the Moonlight Iron Project now being progressed pursuant to the terms of the bankable
feasibility study farm-in and joint venture funding arrangement with Business Venture Investments
No. 1709 (Proprietary) Limited, Ferrum Crescent has been seeking to identify attractive new project
opportunities, in the current conducive market conditions, whereby cost effective and targeted
exploration expenditure has the potential to create visible and meaningful medium to long term
value for the Company’s shareholders.
The Company believes that the prevailing market prices for lead and zinc will strengthen further,
underpinned by an anticipated fall in market supply. Accordingly, it believes that the more advanced
Toral Project, in particular, with significant exploration data already available and being located within
a politically stable and historic mining region, represents a cost effective opportunity to enter this
market sector.
On 17 February 2016, the Company issued 4,515,041 fully paid ordinary shares at GBP0.00144 per
share as part of the consideration payable for the grant of the option to acquire the above
exploration assets in Spain resulting in 623,302,394 ordinary shares being issued.
On 25 February 2016, the Company announced a subscription for 149,681,797 fully paid new ordinary
shares at GBP0.0012 per share to raise £179,618 before expenses (the “Subscription”) and that it will
hold a general meeting of shareholders at 11.00 a.m. (Perth time) on 6 April 2016 for the purpose of
considering and, if thought fit, passing resolutions covering the following matters:
1. Ratification of the issue of shares that have been issued as part of the Subscription referred to
above, in order to restore the Company’s placement capacity that is accorded it under ASX
Listing Rule 7.1;
2. Shareholder approval to issue up to a further 500,000,000 shares to investors at an issue
price (to be calculated by reference to market price) for working capital purposes and the
potential exercise of the Company’s option to acquire GoldQuest and conduct exploration
activities in relation to the Iberian Projects;
3. Shareholder approval to issue a further 100,000,000 shares in the event that the Company
exercises its option to acquire GoldQuest; and
4. Shareholder approval for Mr Tom Revy (the Company’s Managing Director) to participate in
the proposed private placing referred to in point 2 above.
On 29 February 2016, the Company issued 149,681,797 fully paid ordinary shares at GBP0.0012 /
AUD0.0024 per share as part of the Company’s working capital requirements and to pay the option
fee in relation to the above Spanish assets resulting in 772,984,191 ordinary shares being in issue.
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 Profit or Loss and Other Comprehensive
Income
For the half-year from 1 July 2015 to 31 December 2015
6 months to 6 months to
31 December 31 December
2015 2014
AUD AUD
Revenue from continuing operations
Revenue 20,320 19,749
20,320 19,749
Fair value (loss) / gain on financial instrument 21,368 327,961
Exploration expenditure (143,320) (204,194)
Foreign exchange gain 71,313 107,897
Share based payments (17,133) (31,438)
Other expenses (659,314) (790,725)
Gain on disposal of available for sale investment 649 137,597
Impairment of minority interest obligation (21,368) -
(Loss) before income tax (727,485) (433,153)
Income tax (expense)/benefit - (30,537)
Net (loss) after income tax (727,485) (463,690)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Net exchange gain / (loss) on translation of foreign operation (131,205) (139,769)
Net fair value gains on available for sale investment 649 28,536
Income tax effect (182) (7,990)
Reclassification adjustment relating to the disposal of available-
for-sale investments included in the income statement - (137,597)
Income tax effect - 38,527
Growth on investment unrealised 524 -
Other comprehensive (loss) for the period, net of tax (130,214) (218,293)
Total comprehensive (loss) for the period (857,699) (681,983)
Net (loss) for the period is attributable to:
Non-controlling interest - -
Owners of the parent (727,485) (463,690)
(727,485) (463,690)
Total comprehensive (loss) for the period attributable to:
Non-controlling interest - -
Owners of the parent (857,699) (681,983)
(857,699) (681,983)
(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 (0.13) (0.11)
- diluted (loss) per share (0.13) (0.11)
Ferrum Crescent Limited
ACN 097 532 137
Consolidated Statement of Financial Position
As at 31 December 2015
31 December 30 June
2015 2015
AUD AUD
Current Assets
Cash and cash equivalents 287,191 1,028,468
Trade and other receivables 7,397 21,928
Other current financial assets 28,123 34,325
Prepayments 85,415 76,983
Total Current Assets 408,126 1,161,704
Non-current Assets
Plant and equipment 16,779 29,645
Non-current financial assets 60,371 187,048
Total Non-current Assets 77,150 216,693
Total Assets 485,276 1,378,397
Current Liabilities
Trade and other payables 118,471 168,713
Payments received in advance 657,881 629,325
Provisions 24,435 54,837
Total Current Liabilities 800,787 852,875
Total Liabilities 800,787 852,875
NET ASSETS / (LIABILITIES) (315,511) 525,522
Equity
Contributed equity 31,542,093 31,542,093
Reserves (8,279,355) (8,165,807)
Accumulated losses (23,578,249) (22,850,764)
PARENT INTEREST (315,511) 525,522
NON-CONTROLLING INTEREST - -
TOTAL EQUITY (315,511) 525,522
Ferrum Crescent Limited
ACN 097 532 137
Consolidated Statement of Changes in Equity
For the half-year from 1 July 2015 to 31 December 2015
Employee Foreign Available
Contributed Accumulated Share Incentive Option Exchange For Sale
Equity Total
Equity Losses Reserve Reserve Reserve Reserve Reserve Equity
AUD AUD AUD AUD AUD AUD AUD AUD
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 - (463,690) - - - - (463,690)
Other comprehensive income (net of tax) - - - - (139,769) (78,524) - (218,293)
Total comprehensive loss (net of tax) - (463,690) - - (139,769) (78,524) - (681,983)
Transaction with owners in their capacity
as owners’
Directors and KMP salary sacrifice for
-
shares - - 49,999 - - - 49,999
Directors and KMP salary sacrifice for shares
issued 171,147 - (171,147) - - - - -
Shares issued during the period net of
transaction costs 835,611 - - - - - - 835,611
Options issued under employee option plan - - - 27,299 - - - 27,299
At 31 December 2014 30,340,460 (20,968,594) 487,187 1,455,580 (5,209) - (10,126,072) 1,183,352
At 1 July 2015 31,542,093 (22,850,764) 491,577 1,514,742 (46,054) - (10,126,072) 525,522
(Loss) for the period - (727,485) - - - - (727,485)
Other comprehensive income (net of tax) - - - - (130,214) - - (130,214)
Total comprehensive loss (net of tax) - (727,485) - - (130,214) - - (857,699)
Transaction with owners in their capacity
as owners’
Options issued under employee option plan - - - 17,133 - - - 17,133
Net growth on investment portfolio (991) 524 (467)
At 31 December 2015 31,542,093 (23,578,249) 491,577 1,531,875 (177,259) 524 (10,126,072) (315,511)
Ferrum Crescent Limited
ACN 097 532 137
Consolidated Statement of Cash Flows
For the period 1 July 2015 to 31 December 2015
6 months to 31 6 months to 31
December 2015 December 2014
Note AUD AUD
Cash flows from operating activities
Interest received 4,883 4,634
Income from available for sale financial assets 4,795 15,115
Payments to suppliers and employees (647,939) (1,279,400)
Payment for exploration and evaluation costs (137,118) (205,986)
Receipts from customers 10,642 -
Net cash flows used in operating activities (764,737) (1,465,637)
Cash flows from investing activities
Payments for plant and equipment - 216
Purchase of available for sale financial assets (30,360) (282,694)
Proceeds from disposal of available for sale financial
assets 92,699 1,036,758
Net cash flows from / (used in) investing activities 62,339 754,280
Cash flows from financing activities
Proceeds from issue of shares - 1,204,224
Costs of capital raising - (196,597)
Net cash flows from financing activities - 1,007,627
Net increase / (decrease) in cash and cash
equivalents (702,398) 296,270
Cash and cash equivalents at beginning of period 1,028,468 738,345
Effect of foreign exchange on cash and cash equivalents (38,879) 32,930
Cash and cash equivalents at end of period 287,191 1,067,545
Date: 15/03/2016 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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