| Fri 26 Oct 2007, 14:59 | | GVM - GVM Metals Limited - Report for the Septembe |
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GVM
GVGVM
GVM - GVM Metals Limited - Report for the September 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")
GVM METALS LIMITED
ABN 98 008 905 388
Level 1, Old Swan Brewery, 173 Mounts Bay Road, Perth WA 6000 Australia
Telephone: +61 8 9322 6776 Facsimile: +61 8 9322 6778 Website: www.gvm.com.au
Building 8, Pinewood Office Park, Riley Road, Woodmead, Sandton, South Africa
Telephone: +27 11 785 4510 Facsimile: +27 11 807 6654
REPORT FOR THE SEPTEMBER 2007 QUARTER
Highlights
Coal of Africa Limited was granted new order Mining Rights for portions 1 and
9 of the Mooiplaats Coal project.
27,000 metres of drilling were completed during the quarter on the Mooiplaats
coal project increasing the total amount drilled on the project to over 55,000
metres. The results of the drilling are in line with management expectations
and will be released in the current quarter.
Exploration expenditure for the quarter was A$1.03 million.
A further payment of GBP7 million was made as part consideration for the
Mooiplaats Coal Project.
Heads of Agreement concluded to acquire 60% of the Tshikunda coal project.
Tshikunda is contiguous with Exxaro Limited`s Tshikondeni coal project and
consists of 32k hectares located in the Pafuri coal field in South Africa.
Nimag (Pty) Ltd`s nickel magnesium alloy business experienced tougher trading
conditions accompanied by increased inventories due to reduced global nickel
prices and demand and generated an EBIT for the quarter of A$418k.
Cash balance at the end of the quarter was A$34 million.
Commenting on the results today, Simon Farrell, Managing Director of GVM, said,
"We are pleased to announce strong progress across the Company`s coal projects.
Drilling at Mooiplaats will be completed in the next quarter bringing the
project into the `Measured` status and negotiations with potential off takers
are at an advanced stage. The Bankable Feasibility Study at Holfontein is on
track and the drilling data acquired from Exarro gives us the possibility of
bringing two of the Baobab farms into production 18 months earlier than we
previously thought."
DISCUSSION OF RESULTS
Coal Activities
Mooiplaats Coal Project
(70% on completion of the Coal of Africa Limited transaction)
During the September quarter, Coal of Africa Limited was granted Mining Rights
for portions 1 and 9 in terms of Section 23 of the Mineral and Petroleum
Resources Development Act, encompassing some 940 hectares of the 22k hectare
project. Mining on these portions is expected to commence in the 2008 calendar
year.
The infill drilling programme continued at Mooiplaats during the quarter and
27,000 metres were drilled, bringing the total metres drilled on the project to
over 55,000. An additional 22 holes are required to complete phases 1 and 2 of
the project, bringing the whole of the area drilled to `Measured` status in
terms of the JORC/SAMREC codes. On completion of the drilling phases, an
additional 28 holes will be drilled to enable water monitoring. The independent
consultants` project reports on phases 1 and 2 of the drilling together with a
report on mining floor and roof support requirements is expected to be
finalised during the December quarter.
During the September quarter, an Environmental Rehabilitation deposit of ZAR11
million was invested in a Trust in compliance with the South African Department
of Minerals and Energy requirements. The Trust will be managed by GVM and the
funds used for future rehabilitation expenses incurred on completion of mining
on the Mooiplaats Coal Project.
A further GBP7 million was paid as part of the GBP35.5 million payable to
acquire
the Mooiplaats Coal Project, leaving a balance payable of GBP20 million in cash
and 13,333,333 shares.
Discussions with mining contractors and potential off take partners - including
Eskom - continued during the quarter under review.
As a result of the recent substantial increase in the price of export thermal
coal, the Company is now reviewing its earlier plans of supplying largely
unwashed thermal coal to the domestic market and is now focusing on the
possibility of concentrating on producing washed coals for the export market.
Holfontein Coal Project (100%)
During the September quarter, GVM engaged consultants to prepare the Mining
Work Programme as well as the Social and Labour Plan. The Company also
contracted independent parties to commence the application for the New Order
Mining Right and to prepare the Pre-feasibility study for the mining of the
Holfontein coal project.
Baobab Coal Project (100%)
East Coast Maritime (Pty) Ltd were mandated to assess railway, road and port
infrastructure required for GVM`s Baobab and Thuli coal projects. The study is
approximately 50% complete and should be finalised in November. The preliminary
report delivered to GVM was encouraging in terms of coal transport capacity and
the timing thereof. Discussions with transport infrastructure participants
commenced during the quarter.
Geomechanics have commenced drilling on the Baobab coal project, with two rigs
drilling on the farm Fripp. The drilling programme is expected to validate
exploration work previously performed by Iscor (now Exxaro Limited).
Thuli Coal Project (Limpopo) (74%)
LudikCore (Pty) Ltd have been contracted as drilling contractor for the Thuli
Coal Project and will commence in October on finalisation of the drilling work
programme. The data collected in the data terrain model completed earlier in
the year together with drilling completed by Utah Mining in the 1980`s will be
used in the identification of drilling targets.
Nimag Group of Companies (100%)
The Nimag Group`s profit before interest and tax for the first quarter of the
2008 financial year was ZAR2.6 million (A$418k). The nickel magnesium business
experienced tougher trading conditions in the form of thinner margins and
increased working capital requirements due to depressed global nickel demand
together with a strengthening of the South African rand. Nimag Group utilised
over A$5 million in working capital during the quarter to finance increased
nickel inventories. The smaller Metalloy business operated well ahead of
expectations contributing to the Group`s profitability.
Authorised by
Simon Farrell
Managing Director
26 October 2007
For more information contact:
Simon Farrell,
Managing Director GVM +61 417 985 383 or
+61 8 9322 6776
Nonkqubela Mazwai,
Deputy Managing Director, GVM +27 83 690 9079
Petronella Gorrie The Event Shop +27 82 827 8815
Jos Simson/Leesa Peters Conduit PR +44(0) 20 7429 6603
Olly Cairns/Romil Patel Blue Oar Securities Plc +44(0) 20 7448 4400
www.gvm.com.au
South African Sponsor to GVM
PricewaterhouseCoopers Corporate Finance (Pty) Limited
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 30 September 2007
Consolidated statement of cash flows
Current quarter Year to date
Cash flows related to operating activities $A`000 (3 months)
$A`000
1.1 Receipts from product sales and
related debtors 11,977 11,977
1.2 Payments for
(a) exploration and evaluation (1,033) (1,033)
(b) development
(c) production (17,124) (17,124)
(d) administration (1,227) (1,227)
1.3 Dividends received - -
1.4 Interest and other items of a similar
nature received 514 514
1.5 Interest and other costs of finance paid (28) (28)
1.6 Income taxes paid - -
1.7 Other - -
Net Operating Cash Flows (6,921) (6,921)
Cash flows related to investing activities
1.8 Payment for purchases of:
(a) prospects (20,010) (20,010)
(b) equity investments - -
(c) other fixed assets (236) (236)
1.9 Proceeds from sale of:
(a) prospects - -
(b) equity investments
(c) other fixed assets
1.10 Loans to other entities (410) (410)
1.11 Loans repaid by other entities - -
1.12 Other (provide details if material) - -
Net investing cash flows (20,656) (20,656)
1.13 Total operating and investing cash
flows (carried forward) (27,577) (27,577)
1.13 Total operating and investing cash flows
(brought forward) (27,577) (27,577)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options,
etc.(net)- see note below - -
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other (Exchange rate related movements in foreign
borrowings and reserves)
Net financing cash flows - -
Net increase (decrease) in cash held (27,577) (27,577)
1.20 Cash at beginning of quarter/year to date 61,530 61,530
1.21 Exchange rate adjustments to item 1.20 (26) (26)
1.22 Cash at end of quarter 33,927 33,927
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 parties included in item 1.2 110
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 available Amount used
$A`000 $A`000
3.1 Loan facilities - -
3.2 Credit standby arrangements 5,833 655
Estimated cash outflows for next quarter
$A`000
4.1 Exploration and evaluation (2,000)
4.2 Development -
Total (2,000)
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated
statement of cash flows) to the related items in the accounts is as follows.
Current quarter Previous quarter
$A`000 $A`000
5.1 Cash on hand and at bank 33,089 57,146
5.2 Deposits at call 1,493 4,384
5.3 Bank overdraft (655) -
5.4 Other (provide details) - -
Total: cash at end of quarter (item 1.22) 33,927 61,530
Changes in interests in mining tenements
6.1 Interests in mining tenements relinquished, reduced or lapsed
Tenement reference Nature of Interest at Interest at
interest beginning end of
(note (2)) of quarter quarter
6.2 Interests in mining tenements acquired or increased
Tenement reference Nature of Interest at Interest at
Prospecting Rights interest beginning end of
granted to Tshikunda (note (2)) of quarter quarter
Mining (Pty) Ltd by the Transfer of 0% 60%
South African Mineral
Department of Minerals Rights is
and Energy, subject to the
signing of a
Shareholder
Agreement
and South
African
Department of
Minerals and
Energy
approval.
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 Number quoted
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 securities 207,950,421 207,950,421
7.4 Changes during quarter
(a) Increases through issues 181,818 181,818
(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
(description and conversion factor) 21,842,326 -
7.8 Issued during quarter Nil Nil
7.9 Exercised during quarter Nil Nil
7.10 Expired during quarter Nil Nil
7.11 Debentures (totals only)
7.12 Unsecured notes (totals only)
Issue price per Amount paid up per
security (see note security (see 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 securities
7.4 Changes during quarter
(a) Increases through issues 11 pence 11 pence
(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 price Expiry date
(description and conversion
factor) See Note 6 See Note 6
7.8 Issued during quarter Exercise price Expiry date
See Note 6 See Note 6
7.9 Exercised during quarter
7.10 Expired 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 October 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 30 June 2007:
Number Issued Number Exercise Expiry Date Lapsed Since End of
Quoted Price quarter
13,500,000 - A$0.50 30 September 2011 -
555,575 - GBP0.54 31 May 2009 -
786,751 - GBP0.34 17 May 2009 -
7,000,000 - A$1.25 30 September 2012 -
Date: 26/10/2007 14:59:10 Produced by the JSE SENS Department.
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