| Fri 31 Jul 2009, 8:37 | | FSE - Firestone Energy Limited - June 2009 Quarterly Activities Report |
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FSE
FSE
FSE - Firestone Energy Limited - June 2009 Quarterly Activities Report
FIRESTONE ENERGY LIMITED
(formerly Centralian Minerals Limited)
(Registration number: ABN 058 436 794)
(SA company registration number: 200/023973/10
Share code on the JSE: FSE
Share code on the ASX: FSE
ISIN: AU000000FSE6
("FSE" or "the Company")
JUNE 2009 QUARTERLY ACTIVITIES REPORT
Waterberg Coal Field - South Africa
Olieboomsfontein 220LQ
Percussion drilling of the Olieboomsfontein property during the reporting period
has intersected considerable thicknesses of coal including the preferred coal
zones 5-11 close to surface. The drilling results at Olieboomsfontein are very
encouraging and suggest there is considerable exploration potential to add to
the Company`s total coal inventory. On-going feasibility studies will include
this resource upgrade and evaluate the likely improvements in project economics.
Vetleegte 304LQ
During the quarter, the Company announced that the recently completed diamond
drilling of the Vetleegte property has resulted in a 24% increase in the
resource to 629.3 Mt. The resource upgrade for the Vetleegte property represents
a significant increase over the 508Mt resource announced on 18 June 2008 and
provides greater confidence in the coal deposit and confirms the Company`s view
that the Waterberg project is capable of sustaining substantial, long term coal
production.
Coal Resource Estimate Gross Tonnes In Situ
Inferred Indicated Total Mt
Mt Mt
Vetleegte 170.4 458.9 629.3
304LQ
The resource has been estimated in accordance with the JORC code and is based on
a 29 diamond drill hole programme of some 3,340m of advance; all holes
intersected coal and have been utilised in the resource estimation. A breakdown
of the resource by zone and category, and averaged coal qualities is provided
below. Further drilling has been planned with the objective to establish a coal
resource to a measured category in those areas of the farm Vetleegte where the
preferred coal zones 5-11 inclusive occur lying close to ground surface.
Resource Estimation:
Information in this report that relates to exploration results, coal resources
or reserves relating to the property Vetleegte 304LQ is based on information
compiled by Mr Dawie van Wyk who is employed by GeoCoal (Pty) Ltd and is a
member of the South African Council for Natural Scientific Professions. Mr van
Wyk 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 the Reporting of Exploration Results, Mineral
Resources and Ore Reserves". Mr van Wyk consents to the inclusion in the report
of the matters based on his information in the form and context in which it
appears.
Northern Territory - Australia
The two exploration licenses (ELs 7810 and 10166) near Tennant Creek in the
Northern Territory continue to be managed by Emmerson Resources Ltd, on behalf
of the Company. The Company is currently reviewing all low value non-core assets
which will yield no benefit to shareholders.
Corporate
Revised JV Agreement finalised over four farms
On 30 June 2009 the Company and Sekoko Coal (Pty) Ltd agreed to revised
commercial terms in respect of their second Agreement over the farms Smitspan
306LQ, Hooikraal 315LQ, Minnasvlakte 258LQ, and Massenberg 305LQ, announced to
the ASX on 1 April 2009, following a 12% increase in the coal resource tonnage
from 995.9Bt to 1,122.8Bt of saleable coal after washing.
Coal Resource
The resource has been estimated in accordance with the SAMREC and JORC codes and
the SANS 10320:2004 (South African National Standard) method of classification
of thick inter-bedded coal deposits using some 136 boreholes of which 95 were
recently drilled by Sekoko. All recent boreholes intersected coal and were
logged and sampled by suitably qualified independent geologists. The recent
borehole data, together with the historic data, have been used to create
geological models and allow estimation of the coal resources. The total coal
resource estimate based on the data available at June 2009 (Venmyn Rand) is
tabled below whilst coal quality by resource category and farm is tabled at the
end of this announcement.
Farm GTIS GTIS GTIS GTIS
Zone Coal Coal Coal
Tonnage1 Tonnage2 Tonnage2 Tonnage2
Total Mt Inferred Indicated Total Mt
Mt Mt
Smitspan 1,850.3 150.2 541.2 691.4
306LQ
Hooikraal 136.5 74.3 21.0 95.3
315LQ
Minnasvlakte 736.6 225.9 51.1 277.0
258LQ
Massenberg 187.6 45.0 14.1 59.1
305LQ
TOTAL 2,910.9 495.4 627.4 1,122.8
1 Waterberg coal typically occurs interlaminated with shale which for the most
part cannot be mined separately from the coal and thus the zone gross in-situ
tonnage is the tonnage of coal and shale.
2In the interest of balanced reporting it is the Company`s intention to also
report the gross in-situ tonnage of coal rather than the tonnage of coal and
shale. In order to estimate the gross in-situ tonnage of coal in each zone,
rather than the zone tonnage including the rock, each zone tonnage was
discounted by the percent yield at a relative density of 1.9gm/cc (in effect
removing the influence of the shale) to derive an estimate of the coal tonnage.
Information in this report that relates to exploration results, coal resources
or reserves on the properties Smitspan 306LQ, Hooikraal 315LQ, Minnasvlakte
258LQ and Massenberg 305LQ is based on information compiled by Ms Catherine
Telfer who is employed by Venmyn Rand (Pty) Ltd and is a member of The
Australian Institute of Mining and Metallurgy and The South African Institute of
Mining and Metallurgy. Ms Telfer has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the
activity which she is undertaking to qualify as a Competent Person as defined in
the 2004 Edition of the "Australasian Code for the Reporting of Exploration
Results, Mineral Resources and Ore Reserves". Ms Telfer consents to the
inclusion in the report of the matters based on her information in the form and
context in which it appears.
Summary of revised Agreement
Under the terms of the revised Joint Venture Agreement, Firestone`s wholly owned
South African subsidiary, Lexshell 126 General Trading (Pty) Ltd , will
establish a joint venture whereby Lexshell can earn an initial 30% interest in
the Properties in consideration for:
- a reimbursement of expenses to Sekoko of up to ZAR32.99 million (approx
A$5.1 million) which has been spent by Sekoko in the exploration and
development of the Properties ;
- the issue to Sekoko of new shares in Firestone in the amount of ZAR293
million (approx A$43.4 million) at an issue price of A$0.05 per share,
which amounts to approximately 868,176,563 Firestone shares; and
- following the approval of the Bankable Feasibility Study ("BFS") and
decision to mine by the Management Board of the joint venture, a management
fee of ZAR50 million (approx A$7.7 million) be paid to Sekoko (or its
nominee) over a 7 year period from the date of commercial production.
Firestone can earn a further 30% interest (for a total of 60%) upon expenditure
of ZAR50 million (approx A$7.7 million) to complete the BFS to a level enabling
the establishment of a future commercial mining operation.
The transaction will be conditional on (amongst other things), Firestone
completing a legal and technical due diligence on the Properties.
Funding
During the reporting period, the Company undertook a placement to raise A$2.07
million. The funds are intended to be used toward agreed funding commitments in
relation to the transaction with Sekoko Coal (Pty) Ltd, which was announced to
ASX on 1 April 2009, and other working capital requirements.
Placement details:
- The purpose of the Placement was to raise A$2.07 million by way of the
issue of 51,750,000 ordinary shares in the Company at A$0.04 per share (a
premium of 18% to the closing price on 11 June 2009), plus one free
attaching unlisted option for every two shares allotted. The 25,875,000
options are exercisable at 6 cents each and have an expiry date of 30 June
2014.
- The shares issued pursuant to the Placement carried standard rights
applicable to ordinary shares in FSE and, from the date of issue, ranked
equally with fully paid ordinary shares .
- The Placement was made to a range of investors without disclosure in
accordance with section 708 of the Corporations Act 2001 (Cth).
- The Company did not seek shareholder approval prior to the issue of the
shares and options, and relied on its 15% placement capacity under Listing
Rule 7.1.
Board Restructure
During the reporting period, the Company announced the appointment of Messrs
John Dreyer and John Wallington, both former Anglo Group Mining Executives, to
its Board as non-executive Directors. The appointment significantly strengthens
the Company`s Board in the areas of corporate strategy, governance and coal mine
development and operations expertise as it moves forward on the Bankable
Feasibility Study at its South African Waterberg coal project.
John Dreyer, a lawyer by profession, has held a number of senior executive
positions through his career including the position of Executive Director of
Anglo Platinum, Business Development, In 2004 Mr. Dreyer retired from Anglo
Platinum and joined Pangea Diamond Fields as a director and shareholder. He was
instrumental in the listing of that company on AIM (LSE). Prior to joining
Anglo, Mr. Dreyer was Chief Executive Officer of Tavistock and Managing Director
of Shell Minerals Africa. He is also a former Director of the Richards Bay Coal
Terminal Company.
John Wallington, a mining engineer by profession, is an experienced high caliber
Mining Executive with a proven track record in delivering results and
transforming global organizations. Mr. Wallington was previously the Global
Chief Executive Officer (CEO) of Anglo Coal for 6 years; and in a career
spanning 27 years, he has held a number of other senior positions at Anglo.
While CEO of Anglo Coal, Mr. Wallington developed and implemented the Coal
Division strategy, which integrated the vision and direction of the business
unit with profit, safety, operational performance and strategic growth targets.
He was a major player in bringing together the Black Empowerment transaction in
2007 that enabled Anglo Coal to meet its Transformation Targets.
In addition, during the quarter, three Non-Executive Directors, Messrs Lee Boyd,
Malcolm Smartt, and Daryl Henthorn resigned from the Board.
Firestone Energy is an independent Australian exploration company focused on
developing coal projects in South Africa. The company is currently exploring the
richly endowed Waterberg coal field in the Limpopo Province of South Africa.
The Company is committed to value-added growth through becoming an independent
coal and energy producer at its projects in South Africa.
The Company has entered into a joint venture with Sekoko Resources, a South
African black empowerment company (BEE) and Sekoko has two directors on the
Board of Firestone Energy.
Pretoria
31 July 2009
Sponsor
River Group
Corporate Details
ASX: FSE
JSE: FSE
Issued Capital:
1,355 M Ordinary Shares
Substantial Shareholders:
Sekoko Resources (Pty) Ltd
Colbern Fiduciary Nominees Ltd
Vernon Finance Ltd
Directors and Officers:
Non Executive Directors:
John Dreyer
John Wallington
Timothy Tebeila
Amanda Matthee
Colin McIntyre
Chief Executive Officer
Garth Higgo
Company Secretary
Simon Storm
Contact:
Level 1, 63 Hay Street
Subiaco, Western Australia 6008
Tel: +61 (0)8 9381 2755
Web: www.firestoneenergy.com.au
For further information please contact:
Mr. Garth Higgo
Chief Executive Officer
Tel: +61 8 9381 2755
Fax: +61 8 9381 4799
Email: enquiries@firestoneenergy.net
Date: 31/07/2009 08:37:29 Produced by the JSE SENS Department.
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