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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