| Thu 15 Mar 2012, 10:51 | | FCR - Ferrum Crescent Limited - Interim results for six month period ended 31 |
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FCR
FCR
FCR - Ferrum Crescent Limited - Interim results for six month period ended 31
December 2011
Ferrum Crescent Limited
(Previously Washington Resources 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 ISIN: AU000000WRL8
("Ferrum Crescent" or "the company" or "the group")
INTERIM RESULTS FOR SIX MONTH PERIOD ENDED 31 DECEMBER 2011
Ferrum Crescent Limited today announces its results for the six month period
ended 31 December 2011.
HIGHLIGHTS
Moonlight Iron Ore Project
- JORC compliant resource of 74Mt in the Indicated Resource category and 225Mt
in the Inferred Resource category delineated.
- Appointment of South African geological advisory firm Mineral Corporation
Consultancy (Pty) Ltd to carry out an updated JORC compliant resource estimate
- Mining right application expected to be granted in Q1 2012
- Positive discussions at high level relating to rail, power, ports and water
between the Company, Transnet and other South African infrastructure suppliers
Corporate
- Successful admission to the Johannesburg Stock Exchange on 11 November 2011
- Mr Bob Hair appointed as Managing Director
Commenting on the half yearly results, Chairman Ed Nealon said:
"Ferrum Crescent has continued in the past six months to work towards
progressing the Definitive Feasibility Study for the Moonlight iron ore project.
We are confident that an updated Moonlight resource will be announced by the end
of April 2012 whilst planning for a drilling programme to establish a total
resource estimate for the deposit of all three farms; Moonlight, Julietta and
Gouda Fontein, is well advanced."
Below is a summary of the Half-Yearly Financial Report, to obtain the full copy
including the notes please visit the company`s website www.ferrumcrescent.com
Australia and Company enquiries
Ferrum Crescent Limited
Ed Nealon
+61893809653
UK and press enquiries
Ambrian Partners Limited (Nominated Adviser)
Richard Morrison
+44(0)2076344764
Jen Boorer
+44(0)2076344859
Ocean Equities Limited (Broker)
Guy Wilkes
+44(0)2077864370
Newgate Thereadneedle
Graham Herring/Beth Harris
+44(0)2076539855
South African enquiries
Leonar Eiser/Sarah Williams
+27118097500
Review and results of operations
Operating Results
During the half-year 1 July 2011 to 31 December 2011, the Group recorded a net
profit after tax of $5,160,255 (1 July 2010 to 31 December 2010: net loss of
$3,471,317). As at 30 June 2011, a financial liability was created in the
accounting for the BEE share subscription agreement Australian Accounting
Standards require this liability, which will be satisfied by the issue of the
shares, to be re-measured each reporting period to its fair value. The
assessment of fair value is significantly impacted by the market value of the
shares to be issued in comparison with the subscription price denominated in
RAND. As at 31 December 2011, this liability had decreased as a result of a
movement in the underlying Company share price and the AUD/RAND exchange rates.
Principal Activities
Moonlight Iron Ore Project
During the half-year, the Company continued to develop and define the resource
potential of the Moonlight Iron Ore Project ("Moonlight" or "the Project")
(Ferrum interest approximately 81.5%) in Limpopo Province of South Africa. It is
located on three farms (Moonlight, Julietta and Gouda Fontein) and has a JORC
compliant resource of 74Mt in the Indicated Resource category and 225Mt in the
Inferred Resource category at a grade of 30% iron. Beneficiation testwork of
Moonlight mineralisation indicates that a simple process of low intensity
magnetic separation is suitable for optimum concentration and that the level of
impurities (such as SiO2, and Al2O3) is very low.
To date, the work has focused on various aspects of the project including the
pipeline route, plant location and pipeline access at Lephalale and
beneficiation processes. The Company has also identified pipeline engineering
and mining contractors and received expressions of interest from suppliers of
processing plant equipment.
Drilling
During the half year, The Mineral Corporation Consultancy (Pty) Ltd ("The
Mineral Corporation") was commissioned to carry out an updated JORC compliant
resource estimate taking into account the results of the phase 3 drilling and
assays on the Moonlight deposit ("the Report"). Phase 3 consisted of 11 holes
totalling 990m of diamond core drilling and 13 holes totalling 1,600m of reverse
circulation ("RC") drilling. The Mineral Corporation plans to complete the
Report by the end of April 2012 (assuming that no material adjustments to the
work programme are required due to unforeseen circumstances).
The proposed drilling at the Julietta and Gouda Fontein farms adjacent to the
Moonlight deposit, will seek to confirm the magnetite mineralisation previously
drilled by South African Iron and Steel Industrial Corporation ("Iscor"). Iscor
was the South African government-owned integrated iron and steel company which
is now owned by ArcelorMittal. It is anticipated that around 14,000m of drilling
will be carried out, consisting of both RC and core drilling. The purpose of the
drilling is to establish a total resource estimate for the deposit on all three
farms. Planning for this drilling program is well advanced. It is anticipated
that a further report, including the Julietta and Gouda Fontein exploration
results and resource estimate, will be completed by the end of calendar year
2012.
Infrastructure
Positive discussions at a high level relating to rail, power, ports and water
between the Company, Transnet and other South African infrastructure suppliers
were held during the half year. In addition, Ferrum has been and continues
discussing such infrastructure needs with other resources companies within the
Waterberg region (where the anticipated Moonlight Iron Ore Project is located).
These companies, particularly those within the coal mining sector, have similar
infrastructure requirements to Ferrum, and initial discussions have led to a
potentially more optimal outcome than being contemplated in the ongoing
Definitive Feasibility Study ("DFS"). To allow the Board time to consider
current infrastructure development programmes planned across Southern Africa,
certain DFS activities have been deferred until we are satisfied all logistical
options have been received. This means that the full completion of the DFS will
be likely delayed from Q4 2012 into 2013.
Mining Right Application
In conjunction with the DFS, supporting plans and studies in order to progress
the Group`s mining right application were advanced. Under the Mineral and
Petroleum Resources Development Act (Act No. 28 of 2002) of South Africa and the
National Environmental Management Act (Act 107 of 1998) of South Africa, the
Company completed and submitted an environmental impact assessment report within
180 days of the mining right application. The report was submitted during the
half year, following the incorporation of comments arising from the public
consultation process which was held in August.
The Company`s subsidiary, Turquoise Moon Trading 157 (Pty) Ltd ("Turquoise
Moon"), has been the holder of Ferrum`s interests in both the Moonlight Deposit
and the De Loskop prospect. Previously, these were both held under a single
prospecting right and mining right application. The Department of Mineral
Resources ("DMR") allowed the submission of an amended mining right application
with De Loskop excluded from the mining right application, with the result that
Turquoise Moon can concentrate wholly on developing Moonlight as a mining
project while allowing De Loskop to be treated as a prospecting area.
Administratively and practically, due to the distance between the project areas,
it was considered advantageous to deal with the two areas separately. The mining
right application for the Moonlight deposit, which was submitted in January
2011, is expected to be completed in the near future.
Turquoise Moon`s prospecting right under which it held the Moonlight Deposit and
the De Loskop prospect expired on 8th March 2012. The Moonlight Deposit is the
subject of the mining right application, covering the farms Moonlight, Julietta
and Gouda Fontein. In respect of De Loskop, the Group has entered into an
agreement with local communities who hold approximately 60% of the area
previously the subject of Turquoise Moon`s prospecting right, whereby the Group
will assist those communities to obtain a preferential prospecting right under
the Mineral and Petroleum Resources Development Act and the Group will have a
right to "farm into" that area (up to an agreed majority percentage) by the
carrying out of prospecting activities.
Corporate
On the 11th November 2011, the Company announced its successful admission to the
Johannesburg Stock Exchange Limited ("JSE").
The JSE inward listing was a necessary condition precedent to facilitate the
Company`s Black Economic Empowerment ("BEE") share exchange and investment at a
listed company level, complying with the objectives of the South African
Government`s Mineral and Petroleum Resources Development Act ("MPRDA") and the
revised Mining Charter. Ferrum Crescent`s BEE partner, Mkhombi Investments (Pty)
Limited ("Mkhombi"), owns a 26% stake in the Company`s South African operating
subsidiary, Turquoise Moon. Mkhombi is a partner with significant industry
experience and also includes two women`s organisations and a community trust
representing local Limpopo communities affected by the Company`s Moonlight Iron
Ore Project. Mr Kofi Morna, who is a director of Mkhombi, is also a director of
Ferrum Crescent.
The JSE granted the Company a secondary listing of 298,691,705 shares,
representing the entire issued ordinary share capital of Ferrum Crescent, in the
"Basic Materials - Basic Metals - Industrial Metals & Iron - Iron & Steel"
sector under the abbreviated name "Ferrum" and share code "FCR". No funds were
raised through the JSE listing process.
During the half-year there were several changes to the composition of the Board
and Management of the Company. Mr Bob Van Der Laan resigned as Chief Financial
Officer with his duties being covered by Mr Grant Button, Beverley Gardner,
Senior Accountant, in South Africa and an accounting firm in Australia.
Mr Bob Hair joined the Board as Managing Director in July 2011 having been an
executive member of the Ferrum Crescent team as Joint Company Secretary since
January 2010. Mr Hair is a lawyer with over 23 years experience in the resources
sector and has extensive international experience in the legal, commercial,
financial and organisational aspects of exploration, mining and processing
operations. From 2008, Mr Hair was a director of what is now the Company`s
subsidiary, Ferrum Metals Pty Ltd, and in that capacity was a key member of the
team that was responsible for the acquisition of Ferrum Crescent`s interest in
the Moonlight Iron Ore Project.
EVENTS SUBSEQUENT TO REPORTING DATE
Apart from other events to the extent described elsewhere in this Directors`
Report, there has not arisen in the interval between the end of the half year
and the date of this report any item, transaction or event of a material or
unusual nature likely, in the opinion of the Directors of the Company, to
affect:
- The Company`s operations in future financial periods; or
- The results of those operations in future financial periods; or
- The Company`s state of affairs in future financial periods.
COMPETENT PERSON`S STATEMENT
The information in this report is based on information compiled by Lindsay
Cahill, who is a Member of the Australasian Institute of Mining and Metallurgy.
Mr Cahill has sufficient experience relevant to the style of mineralisation and
type of deposit under consideration and to the activity being undertaken to
qualify as a Competent Person as defined in the 2004 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves". Mr Cahill is a consultant to Ferrum Crescent Limited and the
mining industry. This report is issued with Mr Cahill`s consent as to the form
and context in which the exploration results appear
Ferrum Crescent Limited
ACN 097 532 137
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the half-year from 1 July 2011 to 31 December 2011
6 months to 6 months to
31 December 31 December
2011 2010
$ $
Revenue from continuing operations
Revenue 128,032 16,956
128,032 16,956
Other income 7,458,910 1,265,242
Exploration expenditure (964 515) (440,663)
Foreign exchange loss (16,654) (854,059)
Share based payments - (1,375,177)
Other expenses (1,445,518) (2,083,616)
Profit / (Loss) before income tax 5,160,255 (3,471,317)
Income tax benefit / (expense) - -
Net Profit / (Loss) for the period 5,160,255 (3,471,317)
Other comprehensive income
Net exchange gain / (loss) on 23,561 786,380
translation of foreign operation
Net fair value gains on available - 665,242
for sale investments
Income tax on items of other - (199,573)
comprehensive income
Release of unrealised gains reserve - (465,669)
on disposal of available for sale
investments (net of tax)
Other comprehensive income / (loss) 23,561 786,380
for the period, net of tax
Total comprehensive profit / (loss) 5,183,816 (2,684,937)
for the period
Net profit/ (loss) for the period
is attributable to:
Non-controlling interest - -
Owners of the parent 5,160,255 (3,471,317)
5,160,255 (3,471,317)
Total comprehensive profit / (loss)
for the period attributable to:
Non-controlling interest - -
Owners of the parent 5,183,816 (2,684,937)
5,183,816 (2,684,937)
Profit / (Loss) per share attributable to the ordinary
equity holders of the Company
Cents per Cents per
Earnings per share share share
basic profit / (loss) per share 2.11 (1.47)
diluted profit / (loss) per share
2.11 (1.47)
The above consolidated statement of comprehensive income should be read in
conjunction with the accompanying notes included in the Half Yearly Report which
is available on the Company`s website www.ferrumcrescent.com
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2011
31 December 30 June 31 December
2011 2011 2010
$ $ $(i)
Current Assets
Cash and cash 4,671,638 8,116,009 11,415,384
equivalents
Trade and other 191,854 283,725 255,610
receivables
Other financial - 42,842 -
assets
Prepayments 216,175 31,580 -
Total Current Assets 5,079,667 8,474,156 11,670,994
Non-current Assets
Plant and equipment 123,941 146,913 60,530
Total Non-current 123,941 146,913 60,530
Assets
Total Assets 5,203,608 8,621,069 11,731,524
Current Liabilities
Trade and other 964,183 2,099,756 1,606,809
payables
Provisions - 6,794 7,474
Financial liabilities 957,713 8,416,623 8,444,675
Total Current 1,921,896 10,523,173 10,058,958
Liabilities
Total Liabilities 1,921,896 10,523,173 10,058,958
NET ASSETS / 3,281,712 (1,902,104) 1,672,566
(LIABILITIES)
Equity /
(Shareholders`
Deficit)
Contributed equity 27,392,728 27,392,728 27,576,238
Reserves (8,753,537) (8,777,098) (11,148,980)
Accumulated losses (15,357,479) (20,517,734) (15,847,257)
PARENT INTEREST 3,281,712 (1,902,104) 580,001
NON-CONTROLLING - - 1,092,565
INTEREST
TOTAL EQUITY / 3,281,712 (1,902,104) 1,672,566
SHAREHOLDERS`
DEFICIT)
(i) These figures have been extracted without adjustment from the Company`s 2010
Interim Financial Report and are included in this notification in order to
satisfy the Company`s obligations under the AIM Rules for Companies. Whilst
these figures were reviewed by the auditors at that time, they have not been
reviewed or included in the 2011 Interim Financial Report.
The above consolidated statement of financial position should be read in
conjunction with the accompanying notes included in the Half Yearly Report which
is available on the Company`s website www.ferrumcrescent.com.Ferrum Crescent
Limited
ACN 097 532 137
Consolidated Statement of Changes in Equity
For the half-year from 1 July 2011 to 31 December 2011
Employee Foreign
Issued Share Accumu Opti Exchang Equity Total
Incentive lated on e
Capital Reserve Losses Rese Reserve Reserv Equity
rve e
$ $ $ $ $ $ $
At 1 July 12,146,9 - (12,37 1,13 109,455 - 1,016,527
2010 50 5,940) 6,06
2
Loss for - - (3,471 - - - (3,471,317)
the period ,317)
Other - - - - 786,380 - 786,380
comprehensi
ve income
(net of
tax)
Total - - (3,471 - 786,380 - (2,684,937)
comprehensi ,317)
ve loss
(net of
tax)
Transaction
s with
owners in
their
capacity as
owners
Shares 16,619,4 - - - - - 16,619,411
issued 11
Shares 579,150 (564,901) - - - - 14,249
issued
under
employee
share
incentive
plan
Transaction (1,769,2 - - - - - (1,769,273)
costs on 73)
shares
issued
Acquisition - - - - - (11,21 (11,218,637)
of non 8,637)
controlling
interest
Options - - - 268, - - 268,363
issued 363
under
Employee
Option plan
Share based - - - - - 1,092, 1,092,565
payment to 565
locally
impacted
community
At 31 27,576,2 (564,901) (15,84 1,40 895,835 (10,12 3,338,268
December 38 7,257) 4,42 6,072)
2010 5
At 1 July 27,392,7 (169,303) (20,51 1,40 113,852 (10,12 (1,902,104)
2011 28 7,734) 4,42 6,072)
5
Profit for - - 5,160, - - - 5,160,255
the period 255
Other - - - - 23,561 - 23,561
comprehensi
ve income
Total - - 5,160, - 23,561 - 5,183,816
comprehensi 255
ve loss
(net of
tax)
Transaction
s with
owners in
their
capacity as
owners
At 31 27,392,7 (169,303) (15,35 1,40 137,413 (10,12 3,281,712
December 28 7,479) 4,42 6,072)
2011 5
Ferrum Crescent Limited
ACN 097 532 137
Consolidated Statement of Cash Flows
For the period 1 July 2011 to 31 December 2011
6 months to 6 months
31 December to 31
2011 December
2010
Note $ $
Cash flows from operating
activities
Interest received 128,032 16,956
Proceeds received from sale of - 600,000
tenements
Payments to suppliers and employees (2,193,931) (2,370,414
)
Exploration and evaluation costs (965,199) (440,663)
Net cash flows used in operating (3,031,098) (2,194,121
activities )
Cash flows from investing
activities
Proceeds from the sale of available 3(b) - 1,574,820
for sale investments (i)
Payments for plant and equipment (4,568) (59,557)
Payment to acquire non-controlling - (3,237,830
interest )
Net cash flows (used in) / from (4,568) (1,722,567
investing activities )
Cash flows from financing
activities
Proceeds from issue of shares - 16,619,411
Costs of capital raising - (1,769,273
)
Net cash flows from financing - 14,850,138
activities
Net increase in cash and cash (3,035,666) 10,933,450
equivalents
Cash and cash equivalents at 8,116,009 529,225
beginning of period
Effect of foreign exchange on cash (408,705) (47,291)
Cash and cash equivalents at end of 4,671,638 11,415,384
period
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes included in the Half Yearly Report which is
available on the Company`s website www.ferrumcrescent.com
Sponsor: Sasfin Capital
15 March 2012
Date: 15/03/2012 10:51:02 Produced by the JSE SENS Department.
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