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GVM
GVGVM
GVM - GVM Metals Limited - Report for the December 2006 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 DECEMBER 2006 QUARTER
Highlights
Unaudited Group profit before interest and tax of A$2 million for the first six
months of the year.
* Cash at the end of the quarter was A$10.7 million.
* Nimag Pty Ltd`s nickel magnesium alloy business continued to operate well
ahead of budget while the smaller FeSiMag and Fibre businesses reported
losses for the quarter of A$265,000.
* 12,200,000 GVM shares to raise GBP2.44 million (A$6.1 million) placed with
Asia Energy Plc. This was completed on 2 January 2007. As a result, Steve
Bywater and Graham Taggart (Asia Energy`s CEO and CFO) have been invited to
join the Board of GVM Metals Ltd as non-executive Directors. The funds
raised will be utilised to further develop GVM`s expanding coal interests
in South Africa.
* GVM executed a binding Sale of Shares and Claims Agreement to acquire 100%
of Baobab Mining and Exploration (Pty) Ltd which owns the remaining 50% of
the Baobab J.V. coal project. The remaining 50% is currently held by
Motjoli Resources, which GVM has previously agreed to acquire.
* Granting of Section 11 approval in terms of the South African Mineral and
Petroleum Resources Development Bill satisfying the last remaining
condition to acquire the Limpopo Coal project. As a result, 20,812,500 GVM
shares were issued to the Limpopo Coal vendors in November 2006.
* GVM exercised its call option to acquire the outstanding 26% of Nimag (Pty)
Ltd by the allotment of 4,620,557 GVM shares and a cash payment of
AU$75,000.
Discussion of Results
Nimag Group of Companies (100%)
The Nimag Group`s unaudited profit before interest and tax for the first six
months of the 2007 financial year is ZAR19 million (A$3.4 million). The nickel
magnesium business continued to outperform its budget, whilst the smaller
FeSiMag and Fibres businesses reported a combined loss of A$265,000 for the
quarter opposed to profits recorded in the first quarter of the financial year.
Management expect the FeSiMag and Fibres businesses to return to profitability
in the second half of the financial year.
Operational cash flow generated during the quarter of A$1.6 million combined
with favourable management of working capital resulted in an A$3.2 million
improvement in the cash position at the end of December. During the second
quarter, cash of A$1.1 million was used in the repayment of long term loans.
Continued exchange rate levels and high nickel prices signify a positive outlook
for the second half of the financial year.
Coal Activities
Holfontein Coal Project (49% now - 100% on completion of Motjoli acquisition)
The in-fill Holfontein drilling programme continued during the December quarter
and the programme is expected to be completed in the next quarter of the current
financial year. Drilling result analysis identifies metallurgical and thermal
coal typical to the region. Geo-hydrological studies commenced in November 2006
and are expected to be completed in the near term. The bankable feasibility
study is expected to be completed shortly thereafter and hopefully no later than
the end of March 2007.
Baobab Coal Project (100% on completion of acquisitions)
GVM executed an agreement with Petmin Ltd to acquire Petmin`s 50% interest in
the Baobab coal project. The acquisition will take the form of GVM acquiring
100% of Baobab Mining & Exploration (Pty) Ltd, a Petmin subsidiary company. The
purchase consideration is GBP2.5 million (A$6 million) cash and the acquisition
is subject the following conditions precedent:
* obtaining GVM shareholder approval at a general meeting to be convened and
held on or before the 31 March 2007;
* requisite South African Reserve Bank approval;
* necessary approval in terms of Section 11 of the Mineral and Petroleum
Resources Development Bill of South Africa (by 30 April 2007); and
* ASX approval if so required.
Limpopo Coal Project (74%)
During December, GVM secured Section 11 approval in terms of the Mineral and
Petroleum Resources Development Bill of South Africa, satisfying the last of the
conditions precedent of the Limpopo Coal transaction. As a result, GVM issued
the required share consideration and the acquisition was settled and completed
at the end of November 2006.
Additional exploration of the Limpopo Coal area was commissioned during the
quarter, together with the collection of geo-scientific data. The data collected
will be captured and used to generate a geological model. The model will focus
the prospecting programme and identify potential drilling targets.
Preliminary discussions with various infra-structure participants are underway
to ascertain capacity for possible coal exports. Consultations with surface
right owners commenced in 2006 and will continue in 2007 in conjunction with the
Aeromag and geological surveys.
Kalbara Tenement (GVM 21.31%)
Diamond hole GVD145 was completed on M27/181 during the December 2006 quarter to
follow up on anomalous and interpreted mineralised trends resulting from the
previous campaign of aircore drilling.
GVD 145 was drilled at the southern end of the Kalbara area and intersected a
wide zone of moderate carbonate-sericite-pyrite-albite-fuschite alteration and
quartz-carbonate veining, with restricted zones of greater intensity. Samples
have been submitted for analysis, results are pending.
No exploration work was conducted on P27/1158.
Authorised by
Simon Farrell
Managing Director
30 January 2007
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Appendix 5B
Mining exploration entity quarterly report
-Rule 5.3
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 December 2006
Consolidated statement of cash flows
Current Year to date
Cash flows related to operating quarter (6 months)
activities $A`000 $A`000
1.1 Receipts from product sales 10,317 23,005
and related debtors
1.2 Payments for
(a) exploration and
evaluation (151) (205)
(b) development
(c) production (9,412) (20,937)
(d) administration (1,649) (3,100)
1.3 Dividends received
1.4 Interest and other items of 82 157
a similar nature received
1.5 Interest and other costs of (136) (268)
finance paid
1.6 Income taxes paid (20) (297)
1.7 Other
Net Operating Cash Flows (969) (1,647)
Cash flows related to
investing activities
1.8 Payment for purchases
of:(a)prospects
(b)equity investments
(c)other fixed assets (53) (89)
1.9 Proceeds from sale
of:(a)prospects
(b)equity investments
(c)other fixed assets 29 29
1.10 Loans to other entities
1.11 Loans repaid by other
entities 303 349
1.12 Other (provide details if
material)
Net investing cash flows 279 289
1.13 Total operating and
investing cash flows
(carried forward) (690) (1,358)
1.13 Total operating and
investing cash flows
(brought forward) (690) (1,358)
Cash flows related to
financing activities
1.14 Proceeds from issues of
shares, options, etc.(net) 6,121 13,614
-see note below
1.15 Proceeds from sale of
forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings (1,111) (1,339)
1.18 Dividends paid (260) (260)
1.19 Other (Exchange rate
related movements in
foreign borrowings and
reserves)
Net financing cash flows 4,750 12,015
Net increase (decrease) in 4,060 10,657
cash held
1.20 Cash at beginning of
quarter/year to date 6,642 50
1.21 Exchange rate adjustments
to item 1.20 3 (2)
1.22 Cash at end of quarter 10,705 10,705
Note: The 12,200,000 issued to Asia Energy Plc were issued prior to the 31st of
December 2006 but not allotted until 2nd of January 2007, increasing the number
of issued GVM Metals Ltd shares to 93,559,328 in January 2007.
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 1.2 186
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 1,844
3.2 Credit standby
arrangements
Estimated cash outflows for next quarter
$A`000
4.1 Exploration and evaluation (900)
4.2 Development -
Total (900)
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 bank 10,705 7,698
5.2 Deposits at call - -
5.3 Bank overdraft - (1,056)
5.4 Other (provide details)
- -
Total: cash at end of
quarter (item 1.22) 10,705 6,642
Changes in interests in mining tenements
Tenement Nature Interest at Interest at
reference of beginning of end of
interest quarter quarter
(note
(2))
6.1 Interests in
mining
tenements
relinquished,
reduced or
lapsed
Tenement Nature Interest at Interest at
reference of beginning of end of
interest quarter quarter
(note
(2))
6.2 Interests in Acquired 0% 74%
mining Limpopo Coal
tenements (Pty) Ltd
acquired or comprising
increased the farms
Overvlakte
125MS, Bergen
Op Zoom
124MS, Simple
155MS and
Voorspoed
836MS.
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 security up per
(see note 3) security (see
(cents) note 3)
(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 81,359,328 81,359,328
securities
7.4 Changes
during
quarter 25,433,057 25,433,057
(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 1,000,000 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: 29 January 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.
Issued and Quoted Securities as at 31 December 2006:
Number Issued Number Quoted Exercise Price Expiry Date Lapsed
Since End
of quarter
9,000,000 - 50.0 30 September 2011 -
Date: 30/01/2007 11:16:01 Produced by the JSE SENS Department.
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