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FERRUM CRESCENT LIMITED - Results for the half-year ended 31 December 2017

Release Date: 16/03/2018 14:07
Code(s): FCR     PDF:  
Wrap Text
Results for the half-year ended 31 December 2017

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


16 March 2018

                           Ferrum Crescent Limited
              (“FCR”, the “Company” or the “Group”)(ASX, AIM, JSE: FCR)

             Results for the Half-Year Ended 31 December 2017

FCR, the European lead-zinc explorer, announces its unaudited results for the half-year
ended 31 December 2017.

The Company’s full half-year report, with images, can be found on the Companies website.

For further information on the         Company,     please   visit   www.fcrexploration.com   or
www.ferrumcrescent.com or contact:

Ferrum Crescent Limited
Daniel Smith, Non-Executive Director and Company Secretary (Australia)
T: +61 8 9486 4036
Laurence Read, Executive Director (UK) T: + 44 (0)20 3289 9923

Strand Hanson Limited (Nominated Adviser)
Rory Murphy / Matthew Chandler
T: +44 (0)20 7409 3494

Peterhouse Corporate Finance Limited (Broker)
Lucy Williams / Duncan Vasey / Heena Karani
T: +44 (0)20 7469 0930
Bravura Capital (Pty) Ltd (JSE Sponsor)
Melanie De Nysschen
T (direct): +27 11 459 5052

The information contained within this announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.




                                                                                               1
          Review and results of operations

          Operating Results

          During the half-year 1 July 2017 to 31 December 2017, the Group recorded a net loss after tax of
          AUD 712,548 (1 July 2016 to 31 December 2016: net loss of AUD 688,661).

          Spanish lead-zinc portfolio

          The Company announced in July 2017 that the 1,046.9 metres exploration drill programme at its
          wholly owned Toral Project, located in the province of León, Spain, to determine the presence of near
          surface mineralisation had returned core containing visible lead-zinc from every one of the 6 drill
          holes completed. The Assays from the holes were sent to laboratories, where the results confirmed
          the presence of lead-zinc anomalies at the intersections in all 6 holes in September 2017.

          The results of the key intersections encountered (all widths given along the core) are as below:
             • Hole TOR17009 1 metre grading at 1.22%Pb, 9.77%Zn (10.99% combined Pb/Zn);
             • Hole TOR17012 3 metres grading at 0.64%Pb, 6.46%Zn (7.10% combined Pb/Zn);
             • Hole TOR17012 1 metre grading at 0.67%Pb, 16.10%Zn (16.77% combined Pb/Zn);
             • Hole TOR17013 1 metre grading at 6.51%Pb, 6.50%Zn (13.01% combined Pb/Zn); and
             • Hole TOR 17013 3 metres grading at 6.03%Pb, 5.49%Zn (11.52% combined Pb/Zn).

          The tables below contain the Toral Project Drilling Results:

                                              Table 11: Drill-hole information

Hole ID       Hole         Depth     Dip          Azimuth      Grid        East        North        RL          EPM
              Type         (m)

TOR17008      DDR          108.5     -45          211.5        ETRS89      680958.59   4710012.46   468.44      Toral 15.199

TOR17009      DDR          235.3     -45          196.7        ETRS89      680982.73   4710058.36   456.25      Toral 15.199

TOR17010      DDR          120.0     -45          197.5        ETRS89      680936.14   4710048.76   441.60      Toral 15.199

TOR17011      DDR          83.2      -45          208.0        ETRS89      680867.59   4710054.13   416.54      Toral 15.199

TOR17012      DDR          259.0     -50          28.0         ETRS89      680716.93   4709924.96   416.54      Toral 15.199

TOR17013      DDR          240.9     -50          190.2        ETRS89      681038.30   4710093.19   458.07      Toral 15.199


                                              Table 2: Significant Intercepts1

               Drillhole      from           to           length         Pb %          Zn %         Pb+Zn %
                                                            (m)
               TOR17009      140.35        141.35           1.0           1.22          9.77         10.99
               TOR17009      141.35        142.35           1.0           3.26          1.45          4.71
               TOR17009      140.35        142.35           2.0           2.24          5.61          7.85
               TOR17009      134.35        144.35          10.0       continuous anomaly zone of Pb+Zn >0.05%
               TOR17012       176.3         177.3            1.0          0.67         16.10         16.77
               TOR17012       177.3         178.3            1.0          0.54          1.33          1.87
               TOR17012       178.3         179.3            1.0          0.72          1.95          2.66

                                                                                                                 2
     TOR17012          176.3       179.3        3.0          0.64          6.46          7.10
     TOR17012          175.3       185.3        10.0      continuous anomaly zone of Pb+Zn >0.05%
           1
               The above tables can be viewed in the Company’s market announcement of 7 September 2017



In October 2017, the Company announced a revised exploration strategy for the Toral project. The
new strategy is led by newly appointed Executive Director – Myles Campion, and Executive Director
– Laurence Read. Working directly with the independent resource consultancy, Addison Mining
Services Limited (AMS), by December 2017, the Company completed data location checks, data
collection and analytical review procedures, including check sampling for the purpose of verification
and validation of the project’s new database for use in the preparation of a JORC 2012 compliant
resource estimation. Quality control data assessment and check sample analytical results were still
pending at the end of the period.
During the site audit, AMS conducted review, observation and discussion on geological setting,
structural architecture and controls on mineralisation. Work was underway during December 2017
for the development of a new deposit model, based on FCR’s views at the time on controls and
mechanisms of mineral deposition incorporating the identification and interpretation of thrust repeat
and parallel mineralisation zone development.

Data Verification

Following the review of mineralised intersections and associated multi-element data, and the
previous 2013 NI43-101 resource model at Toral, the presence of precious metals has been identified
as being part of the mineralised system, typical of a carbonate hosted, structurally controlled Pb-Zn
deposit of this nature. Silver grades have been historically recorded but at the period end, had not
been verified through normal Quality Assurance/Quality Control procedures. Accordingly, the
Company, in association with AMS, undertook further data verification and analysis in order to verify
the silver (Ag) grades present within the Toral system. FCR intended to incorporate the silver data
sets into the JORC (2012) resource estimate following agreement with AMS. If the silver data could
be verified and is of sufficient certainty to be reported on under JORC (2012), then the resource could
be expanded and remodelled with completion expected in early 2018.

The Company announced on the 22 November 2017 that following a formal application to the Director
General of Mines in the Province of León, the exploration licence in respect to Toral had been
renewed for a further 3 year term to November 2020.

The Moonlight project – South Africa

During June 2017, the Company entered into a legally binding agreement for the sale of Batavia Ltd
(“Batavia”), its wholly-owned Mauritian subsidiary which was the investment holding company for all the
Group’s South African Assets, including the Moonlight iron ore project in Limpopo Province, northern
South Africa (the “Moonlight Project”), to NPSPL Africa Holdings Limited and its BEE partner, Ngwenya
Capital (Pty) Limited. The Board had decided to terminate all activities and expenditures in South Africa
due to the depressed iron ore market and the project’s high capital cost and infrastructure requirements.




                                                                                                         3
Competent person’s statement
The information above that relates to Exploration Results is based on information compiled by Mr
Juki Laurikko who is a Member of the European Federation of Geologists which is a Recognised
Professional Organisation for the purposes of the 2012 JORC Code. Mr Laurikko is a Technical
Consultant to the Company, and 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 2012 Edition of the ‘Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves’. Mr Laurikko consents to the inclusion
in this announcement of the matters based on his information in the form and context in which they
appear. Mr Laurikko has also reviewed and approved the technical information in his capacity as a
qualified person under the AIM Rules.


Corporate
On 8 September 2017, the Company announced that it had conditionally raised in aggregate,
GBP193,304 (approximately AU$321,590) before expenses through a placement via Peterhouse
Corporate Finance Limited, as agent to the Company, of 214,782,526 new ordinary shares of no par
value each in the capital of the Company at a price of 0.09 pence per new ordinary share. The
placement was completed on 14 September 2017.

On 26 September 2017, the Company announced that Mr Justin Tooth, Executive Chairman has
resigned from the Board of Directors of the Company with immediate effect, in order to pursue his
other business interests. Additionally, Mr Laurence Read, previously a Non-executive Director,
become an Executive Director.

Following a comprehensive operational review subsequent to the Board changes in September 2017,
the Company announced that the Board believed it is possible to pursue a strategy to build value at
the Toral lead-zinc asset for a cost lower than originally planned, and therefore, the full A$2.7million
which the Board originally envisaged would be required to be raised in a placing, may not be required.
As a result, the Board decided to withdraw Resolution 1, seeking shareholder approval to raise up to
A$2.7million by way of private placement, from the upcoming general meeting held on 18 October
2017.

On 17 October 2017 the Company announced the appointment of Mr Myles Campion as an Executive
Director. Mr Campion has a comprehensive background in all technical and financial facets of the
resources sector, specialising internationally in resource evaluation and project assessment. This
follows a 10-year career as an exploration and mine site geologist in Australia covering base metals
and gold. He holds a BSc (Hons) in Geology from University of Wales College, Cardiff and an MSc
(MinEx) from the Royal School of Mines in London, and also holds a Graduate Diploma of Business
(Finance). Mr Campion’s financial experience ranges from Australian and UK equities research
through to project and debt financing in London, covering the entire spectrum of mining companies
with an extensive knowledge of the global resources market covering the three main bourses, the
Toronto Stock Exchange, AIM and the ASX. This knowledge was applied effectively as a Fund
Manager at Oceanic Asset Management, where he successfully managed the Australian Natural
Resources Fund, an Open Ended Investment Company (OEIC) traded in London.

At a General Meeting held on 18 October 2017, shareholders approved resolution 2 relating to the
ratification of a previous capital raising.

On 2 November 2017, the Company announced that it had raised £185,250 before expenses through
a placement via Beaufort Securities of 370,499,858 new ordinary shares of no par value each in the
capital of the Company at a price of 0.05 pence per new ordinary share together with the issue of
185,249,929 options (the “Placing Options”) exercisable at a price of 0.075 pence per new ordinary
share for a period of thirty months from the date of issue. In addition to the abovementioned issue
of 185,249,929 Placing Options, the Company had agreed to issue a further 50,000,000 options to
Beaufort Securities Limited, exercisable at a price of 0.075 pence per new ordinary share, for a period
                                                                                                      4
of thirty months from their date of issue (the “Broker Options”). The issue of both the Placing Options
and the Broker Options is subject to shareholder approval at a General Meeting of the Company.


Events subsequent to reporting date
On 12 January 2018, the Company announced the appointment of Mr Colin Bird as a Non-Executive
Director and Chairman of the Company. Mr Bird is a chartered mining engineer with extensive multi-
commodity mine management experience in Africa, Europe, Latin America and the Middle East. Mr
Bird’s operational and corporate experience, includes the development of the Jubilee Metals Group
production portfolio, concentrating on Platinum Group Metals in South Africa, in addition to the
successful sale of Kiwara plc. Kiwara plc was sold to First Quantum Minerals (TSX: FM) for US$260
million in November 2009, whilst its project was undertaking infill drilling at the Kalumbila copper-
nickel deposit in north-western Zambia.

On 16 January 2018, the Company announced the resignation of Mr Grant Button as Company
Secretary and the appointment of Mr Daniel Smith as a Non-Executive Director and Company
Secretary. Mr Smith is a member of the Australian Institute of Company Directors and the
Governance Institute of Australia and has over 10 years’ primary and secondary capital markets
expertise. As a director of Minerva Corporate, he has advised on, and been involved in, over a dozen
IPOs, RTOs and capital raisings on both the ASX and NSX. His key focus is on corporate governance
and compliance, commercial due diligence and transaction structuring, as well as ongoing investor
and stakeholder engagement. Mr Smith is also currently Company Secretary for Taruga Gold Limited
and Love Group Global Limited, both listed on the ASX. He holds a BA in International Relations from
Curtin University, Western Australia.

The Company advised the change of its Australian Principal and Registered office address, as well
as its mailing and contact details on 23 January 2018.
On 1 February 2018 the Company announced the resignation of Mr Grant Button as a Non-Executive
Director.

On 30 January 2018 and 6 February 2018, the Company released to the market a Maiden Inferred
Mineral Resource estimate completed in accordance with JORC (2012) in respect of the Toral
Project, Spain. A new block model combined with an initial digital geological model has increased
the level of understanding of the mineralogical and geological controls at Toral, and the Company is
therefore confident of being able to enhance and potentially expand the resource going forwards,
subject to undertaking additional drilling and exploration activities.

Maiden JORC Resource, Toral Project
The Inferred source for the Toral Pb-Zn-Ag mineralisation located on the Toral property has been
estimated at various cut-offs (see Table 3 below). The Company reviewed the new model with AMS,
and concluded that a 4% cut-off was appropriate utilising estimated mining parameters typical for
similar types of projects and mineralogy, and a historical three-year trailing average for metal prices.
Zn Price Used: US$ 2,400/t                   US$c/lb1.09
Pb Price Used: US$ 2,400/t                   US$c/lb0.91
Ag Price Used:                               US$ 17/oz

The maiden resource successfully identified potentially economic mineralisation ranging from surface
to approximately 1,100m below surface. The block model currently extends for a strike length of
3,300m and is still open to the east long strike and also at depth where it has not yet been closed off.

  Cut Off                                                                           Zn         Pb           Ag Troy
              Tonnes                 Zn_Eq        Zn Eq    Zn     Pb      Ag
   Zn Eq                  Density                                                Tonnes     Tonnes            Oz
             (Millions)              (Pb)%      (PbAg)%    %      %       g/t
 (PbAg)%                                                                         (1000’s)   (1000’s)       (Millions)
    6.0          9          2.65       8.8         9.5     5.0    4.3     31       470        400               9
                                                                                                       5
    5.0         12        2.57       7.8       8.4      4.6    3.7    28       580        470         11
    4.0         16        2.52       6.9       7.5      4.0    3.3    25       670        540         13
    3.0         20        2.50       6.2       6.7      3.7    2.9    23       750        600         15
Table 3: Summary of Inferred mineral resources for the Toral property reported at a 4.0% Zn
equivalent

The Company announced on 9 February 2018 the expiry of 2,000,000 unlisted options exercisable
at GBP0.0075 and 3,000,000 unlisted options exercisable at GBP0.002 on or before 2 February
2018, which had lapsed unexercised.

On 6 March 2018, the Company announced that Peterhouse Corporate Finance Limited is now sole
broker to the Company, pursuant to the AIM Rules, following an announcement made on 2 March
2018 regarding Beaufort Securities Limited (“BSL”) and Beaufort Asset Clearing Services Limited
(“BACSL”) being placed into administration and that the Financial Conduct Authority (the “FCA”) has
imposed requirements on BSL and BACSL to cease all regulatory activity. BSL was a joint broker to
the Company, however due to the requirements imposed by the FCA, BSL will no longer be able to
provide broking services to the Company.

Competent Persons Statement
The Toral maiden resource estimate was prepared by Mr. J.N. Hogg, MSc. MAIG Principal Geologist
for AMS, who is an independent Competent Person within the meaning of the JORC (2012) code.
The maiden resource estimate was aided by Mr R. J. Siddle, MSc, MAIG under the guidance of the
competent person. Mr. Hogg has reviewed and verified the technical information that forms the basis
of and has been used in the preparation of the current mineral resource estimate and this news
release, including all analytical data, diamond drill hole logs, QA/QC data, density measurements,
and sampling, diamond drilling and analytical techniques. Mr Hogg consents to the inclusion in the
report of the matters based on the information, in the form and context in which it appears.




                                                                                                 6
      Consolidated Statement of Profit or Loss and Other Comprehensive Income

                                                                     6 months to     6 months to
                                                                     31 December     31 December
                                                                         2017            2016
                                                                         AUD             AUD

Revenue from continuing operations
Revenue                                                                          8          11,409
Other Income                                                                71,294         184,378
                                                                            71,302         195,787

Fair value gain on financial instrument                                          -          102,523
Exploration expenditure                                                  (180,019)        (174,645)
Foreign exchange gain                                                       25,787           64,165
Share based payments                                                             -           (7,733)
Other expenses                                                           (629,618)        (766,235)
Impairment of minority interest obligation                                       -        (102,523)
Loss before income tax                                                   (712,548)        (688,661)
Income tax (expense)/benefit                                                     -                 -

Net loss after income tax                                                (712,548)        (688,661)

Other comprehensive income
Items that may be reclassified subsequently to profit or
loss:
Net exchange gain / (loss) on translation of foreign operation              71,813        (141,136)
Other comprehensive (loss) for the period, net of tax                       71,813        (141,136)


Total comprehensive (loss) for the period                                (640,735)        (829,797)


Net (loss) for the period is attributable to shareholders of
the Company:                                                             (712,548)        (688,661)
                                                                         (712,548)        (688,661)

Total comprehensive (loss) for the period attributable to
shareholders of the Company:                                             (640,735)        (828,797)
                                                                         (640,735)        (829,797)

      (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                                                (0.026)                (0.05)

        - diluted (loss) per share                                              (0.026)                (0.05)




                                                                                            7
Consolidated Statement of Financial Position

As at 31 December 2017


                                               31 December            30 June
                                                  2017                 2017
                                                  AUD                  AUD
  Current Assets
  Cash and cash equivalents                           364,404                 503,891
  Trade and other receivables                         101,000                  96,147
  Other current financial assets                              -                14,344
  Total Current Assets                                465,404                 614,382


  Non-current Assets
  Plant and equipment                                    19,758                21,865
  Capitalised Exploration                           1,262,066             1,180,488
  Total Non-current Assets                          1,281,824              1,202,353


  Total Assets                                      1,747,228             1,816,735


  Current Liabilities
  Trade and other payables                            221,466                 242,804
  Provisions                                                  -                 3,538
  Total Current Liabilities                           221,466                 246,342


  Total Liabilities                                   221,466                 246,342


  NET ASSETS                                        1,525,762             1,570,393


  Equity
  Contributed equity                               36,527,836           35,931,732
  Reserves                                          2,194,138             2,122,325
  Accumulated losses                              (37,196,212)         (36,483,664)
  TOTAL EQUITY                                      1,525,762             1,570,393




                                                                  8
Consolidated Statement of Changes in Equity

For the half-year from 1 July 2017 to 31 December 2017
                                                                                   Employee
                                                                                     Share                         Foreign
                                                  Contributed      Accumulated      Incentive       Option        Exchange         Equity        Total
                                                    Equity           Losses         Reserve         Reserve        Reserve        Reserve       Equity
                                                     AUD              AUD             AUD            AUD            AUD             AUD          AUD
   At 1 July 2016                                   33,049,490      (24,424,297)      491,577        1,548,840       179,121     (10,126,072)     718,659
   (Loss) for the period                                       -      (688,661)                               -              -              -   (688,661)
   Other comprehensive income (net of tax)                     -               -                -             -     (141,136)               -   (141,136)
   Total comprehensive loss (net of tax)                       -      (688,661)                 -             -     (141,136)               -   (829,797)
   Transaction with owners in their capacity
   as owners’
   Options issued under employee option plan                   -               -                -       7,733                -              -       7,733
   Options issued as part of purchase of
   Goldquest Iberica                                           -               -                -      49,173                -              -      49,173
   Shares issued net of transaction costs            2,562,467                 -                -             -              -              -   2,562,467
   At 31 December 2016                              35,611,957      (25,112,958)      491,577        1,605,746        37,985     (10,126,072)   2,508,235


   At 1 July 2017                                   35,931,732      (36,483,664)      491,577        1,609,070        21,678                -   1,570,393
   (Loss) for the period                                       -      (712,548)                 -             -              -              -   (712,548)
   Other comprehensive income (net of tax)                     -               -                -             -       71,813                -      71,813
   Total comprehensive loss (net of tax)                       -       (712,548)                -             -       71,813                -   (640,735)
   Transaction with owners in their capacity
   as owners’
   Shares issued net of transaction costs                596,104               -                -             -              -              -     596,104
   At 31 December 2017                              36,527,836      (37,196,212)      491,577        1,609,070        93,491                -   1,525,762
Consolidated Statement of Cash Flows

For the period 1 July 2017 to 31 December 2017

                                                            6 months to 31         6 months to 31
                                                            December 2017          December 2016
                                                                 AUD                       AUD
  Cash flows from operating activities
  Interest received                                                          8                   2,305
  Payments to suppliers and employees                              (598,894)               (852,709)
  Payment for exploration and evaluation costs                     (122,484)               (179,456)
  Receipts from customers                                                      -                 9,104

  Net cash flows used in operating activities                      (721,370)           (1,020,756)


  Cash flows from investing activities
  Payments for plant and equipment                                  (22,186)                     (444)
  Payment for acquisition of Goldquest assets                                  -           (937,157)

  Net cash flows from / (used in) investing activities              (22,186)               (937,601)


  Cash flows from financing activities
  Proceeds from issue of shares                                     638,777                2,833,467
  Costs of capital raising                                          (42,672)               (271,000)
  Net cash flows from financing activities                          596,105                2,562,467
  Net increase / (decrease) in cash and cash
  equivalents                                                      (147,452)                604,110
  Cash and cash equivalents at beginning of period                  503,891                 743,264
  Effect of foreign exchange on cash and cash equivalents              7,965                (62,887)
  Cash and cash equivalents at end of period                        364,404                1,284,487




                                                                                      10

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