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GVM
GVGVM
GVM - GVM Metals Limited - Report for the March 2007 Quarter
GVM Metals Limited
(previously, "Golden Valley Mines Limited")
(Incorporated and registered in Australia)
(Registration number ACN 008 905 388)
Share code on the JSE Limited: GVM & ISIN: AU000000GVM1
Share code on the Australian Stock Exchange Limited: GVM & ISIN:
AU000000GVM1
("GVM" or `the Company")
REPORT FOR THE MARCH 2007 QUARTER
Highlights
* Unaudited Group profit before interest and tax for the
quarter of A$1.8 million.
* Cash balance at the end of the quarter was A$10.1
million.
* Nimag (Pty) Ltd`s nickel magnesium alloy business again
operated well ahead of budget with earnings before
interest and tax (EBIT) for the quarter of A$2.1
million. The smaller FeSiMag business returned a small
profit for the nine month period after recording a loss
for the first half of the year.
* Negotiations to acquire a 70% interest in Coal of
Africa Limited (CoAL) were successfully completed. CoAL
owns the Mooiplaats coal project which is situated two
kilometers from the re-commissioned Camden Power
Station and is adjacent to the rail line to the
Richards Bay export coal terminal.
* Allotment of 12,200,000 GVM shares to Global Coal
Management plc (formerly Asia Energy plc) and an
invitation to Steve Bywater and Graham Taggart (Global
Coal Management`s CEO and CFO) to join the Board of
GVM.
* Placement of 8,333,333 GVM shares with professional
London based investors, raising GBP2.5 million (A$6.2
million). The funds are to be applied to the
acquisition of 50% of the Baobab JV.
Discussion of Results
Nimag Group of Companies (100%)
The Nimag Group`s unaudited profit before interest and tax for the first
nine months of the 2007 financial year was ZAR32 million (A$5.5 million).
The nickel magnesium business continued to outperform its budget and the
smaller FeSiMag business returned to profitability for the nine month
period. The Fibres business reported a profit of AU$41k for the quarter
and Management continue to identify means to improve the Fibres business.
Operational cash flow generated during the quarter combined with
favourable management of working capital resulted in an A$1.2 million
improvement in the cash position at the end of March. During the third
quarter, cash of A$382k was used to repay term loans.
Current exchange rate levels combined with high nickel prices suggest a
positive outlook for the remainder of the financial year.
Coal Activities
Holfontein Coal Project
(49% now - 100% on completion of Motjoli transaction)
The initial Holfontein drilling schedule was completed during the third
quarter. Analysis of the drilling results has identified metallurgical
and thermal coal deposits typical to the region. Additional in-fill
drilling to bring the coal resource to a `Measured` resource category
according to the JORC/ SAMREC code has commenced. Management envisages
that the in-fill drilling programme will be completed in the current
quarter. A mining feasibility study will be completed during the
September quarter.
Baobab Coal Project
(100% on completion of acquisitions)
The acquisition of Petmin`s 50% interest in the Baobab Coal Project
through the issue of 8,333,333 GVM shares to raise the required purchase
price of GBP 2.5 million (A$6.2 million) will be put to shareholders at
the May 2007 General Meeting. The proposed acquisition will allow GVM to
purchase 100% of Baobab Mining & Exploration (Pty) Ltd, a Petmin
subsidiary company. The purchase is subject to GVM shareholder approval,
ASX (if required) and South African Reserve Bank approval. Approval in
terms of Section 11 of the Mineral and Petroleum Resources Development Act
of South Africa was obtained in March 2007.
During the quarter, a Data Terrain Model of the Baobab Coal Project was
commissioned and completed. The model will provide guidance for the
proposed drilling project due to commence once shareholder approval of the
project is obtained.
Limpopo Coal Project
(74%)
Additional exploration of the Limpopo Coal area was commissioned during
the third quarter of the financial year in the form of a Data Terrain
Model. The data collected will be used to generate a geological model of
the project and to identify potential drilling targets.
Preliminary discussions with various infra-structure participants are
underway to ascertain the capacity for the export of coal mined in the
Limpopo Coal Project. Management have initiated consultations with the
current surface rights` owners and will continue these discussions in the
next quarter.
Mooiplaats Coal Project
(70% on completion of the Kelso transaction)
The Sale of Shares Agreement to purchase 70% of CoAL, which holds the
Mooiplaats project, was signed in March 2007. In-fill drilling activities
on the property continue and a feasibility study will commence during the
June quarter.
Kalbara Tenement
(GVM 21.31%)
No exploration work was conducted on the Kalbara tenement during the
quarter.
Kanowna West Tenements
(GVM 23.68%)
No exploration work was conducted on the Kanowna West tenements during the
quarter.
Authorised by
Simon Farrell
Managing Director
26 April 2007
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98,
30/9/2001.
Name of entity
GVM Metals Limited
ABN Quarter ended
("current quarter")
98 008 905 388 31 March 2007
Consolidated statement of cash flows
Current Year to date
Cash flows related to operating quarter (9 months)
activities $A`000 $A`000
1.1 Receipts from product sales and 11,580 34,020
related debtors
1.2 Payments for
(a) exploration and
evaluation (105) (310)
(b) development
(c) production (9,527) (30,414)
(d) administration (1,111) (4,203)
1.3 Dividends received
1.4 Interest and other items of a 97 254
similar nature received
1.5 Interest and other costs of (78) (406)
finance paid
1.6 Income taxes paid (598) (896)
1.7 Other
Net Operating Cash Flows 258 (1,955)
Cash flows related to investing
activities
1.8 Payment for purchases
of:(a)prospects
(b)equity investments (625) (625)
(c) other fixed assets (37) (126)
1.9 Proceeds from sale
of:(a)prospects
(b)equity investments
(c)other fixed assets 0 29
1.10 Loans to other entities
1.11 Loans repaid by other entities 74 423
1.12 Other (provide details if
material)
Net investing cash flows (588) (299)
1.13 Total operating and investing
cash flows (carried forward) (330) (2,254)
Cash flows related to financing
activities
1.14 Proceeds from issues of shares, 0 14,180
options, etc.(net) -see note
below
1.15 Proceeds from sale of forfeited
shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings (304) (1,645)
1.18 Dividends paid 0 (260)
1.19 Other (Exchange rate related
movements in foreign borrowings
and reserves)
Net financing cash flows (304) 12,275
Net increase (decrease) in cash (634) 10,021
held
1.20 Cash at beginning of 10,705 50
quarter/year to date
1.21 Exchange rate adjustments to 3 3
item 1.20
1.22 Cash at end of quarter 10,074 10,074
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related
entities
Current
quarter
$A`000
1.23 Aggregate amount of payments to the 107
parties included in item 1.2
1.24 Aggregate amount of loans to the -
parties included in item 1.10
1.25 Explanation necessary for an understanding of the
transactions
Non-cash financing and investing activities
2.1 Details of financing and investing transactions
which have had a material effect on consolidated
assets and liabilities but did not involve cash
flows
2.2 Details of outlays made by other entities to
establish or increase their share in projects in
which the reporting entity has an interest
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount Amount used
available $A`000
$A`000
3.1 Loan facilities 3,662 613
3.2 Credit standby
arrangements
Estimated cash outflows for next quarter
$A`000
4.1 Exploration and evaluation (500)
4.2 Development -
Total (500)
Reconciliation of cash
Reconciliation of cash at the Current Previous
end of the quarter (as shown quarter quarter
in the consolidated statement $A`000 $A`000
of cash flows) to the related
items in the accounts is as
follows.
5.1 Cash on hand and at 10,687 10,705
bank
5.2 Deposits at call - -
5.3 Bank overdraft (613) -
5.4 Other (provide details)
- -
Total: cash at end of 10,074 10,705
quarter (item 1.22)
Changes in interests in mining tenements
Tenement Nature Interest Interest
reference of at at end
interest beginning of
(note of quarter
(2)) quarter
6.1 Interests in
mining
tenements
relinquished,
reduced or
lapsed
Tenement Nature Interest Interest
reference of at at end
interest beginning of
(note of quarter
(2)) quarter
6.2 Interests in
mining
tenements
acquired or
increased
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion
rights together with prices and dates.
Total Number Issue price Amount paid
number quoted per up per
security security (see
(see note note 3)
3) (cents) (cents)
7.1 Preference
+securities
(description)
7.2 Changes
during
quarter
(a)
Increases
through
issues
(b)
Decreases
through
returns of
capital, buy-
backs,
redemptions
7.3 +Ordinary 93,559,228 93,559,228
securities
7.4 Changes
during
quarter 12,200,000 12,200,000
(a)
Increases
through
issues
(b)
Decreases
through
returns of
capital, buy-
backs
7.5 +Convertible
debt
securities
(description)
7.6 Changes
during
quarter
(a)
Increases
through
issues
(b)
Decreases
through
securities
matured,
converted
7.7 Options Exercise Expiry date
(description 9,000,000 - price See Note 6
and See Note 6
conversion
factor)
7.8 Issued during Nil Nil Exercise Expiry date
quarter price See Note 6
See Note 6
7.9 Exercised Nil Nil
during
quarter
7.10 Expired Nil Nil
during
quarter
7.11 Debentures
(totals only)
7.12 Unsecured
notes (totals
only)
Compliance statement
1 This statement has been prepared under accounting
policies which comply with accounting standards as
defined in the Corporations Act or other standards
acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the
matters disclosed.
Sign here: ..................Date: 26 April 2007
(Director)
Print name: Simon Farrell
Notes
1 The quarterly report provides a basis for informing
the market how the entity`s activities have been
financed for the past quarter and the effect on its
cash position. An entity wanting to disclose
additional information is encouraged to do so, in a
note or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes
options in respect of interests in mining tenements
acquired, exercised or lapsed during the reporting
period. If the entity is involved in a joint venture
agreement and there are conditions precedent which
will change its percentage interest in a mining
tenement, it should disclose the change of percentage
interest and conditions precedent in the list required
for items 6.1 and 6.2.
3 Issued and quoted securities: The issue price and
amount paid up is not required in items 7.1 and 7.3
for fully paid securities.
4 The definitions in, and provisions of, AASB 1022:
Accounting for Extractive Industries and AASB 1026:
Statement of Cash Flows apply to this report.
5 Accounting Standards. ASX will accept, for example,
the use of International Accounting Standards for
foreign entities. If the standards used do not
address a topic, the Australian standard on that topic
(if any) must be complied with.
6 Issued and Quoted Securities as at 31 March 2007:
Number Issued Number Exercise Expiry Date Lapsed
Quoted Price Since End
of
quarter
9,000,000 - 50.0 30 September 2011 -
30 April 2007
South African Sponsor to GVM
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 30/04/2007 07:59:01 Produced by the JSE SENS Department.
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