RNS Number:1656B
GVM Metals Ltd
31 July 2007
GVM METALS LIMITED
QUARTERLY REPORT
GVM Metals Limited ('GVM' or 'the Company') is pleased to announce its
operational report for the 4th quarter ended 30 June 2007. A full copy of this
report, as released today on the ASX, is available at the Company's website,
www.gvm.com.au.
Highlights
* Unaudited Group profit before interest and tax (EBIT) for the fourth
quarter was A$1.4 million and for the full year A$6.4 million.
* Cash balance at the end of the quarter was A$62 million. All borrowings
associated with the Nimag acquisition have now been repaid.
* Nimag (Pty) Ltd's nickel magnesium alloy business again operated well
ahead of budget with EBIT for the quarter of A$2.5 million. The full year
EBIT was A$8.2 million.
* GBP24.7 million was raised by the issue of 37,352,941 GVM shares @ 34p and
a further 22,223,000 GVM shares @ 54p to various institutional investors in
London and South Africa. The funds will be used in the acquisition of 70% of
Coal of Africa Limited (CoAL) - the entity owning the Mooiplaats coal
project situated two kilometres from the re-commissioned Camden Power
Station and adjacent to the rail line to the Richards Bay export coal
terminal - and project development.
* Issue of 11,250,000 GVM shares in June comprising the first equity payment
in the acquisition of 70% of CoAL.
* Placing of 8,333,333 GVM shares @ 30p to raise GBP2.5 million to purchase
50% of the Baobab Joint Venture.
* Allotment of 34,868,283 shares to Motjoli Resources resulting in GVM
acquiring the remaining 50% of the Baobab Joint Venture and the remaining
51% of the Holfontein coal project.
* Election of Nonkqubela Mazwai as Deputy Managing Director and Nchakha
Moloi, Steve Bywater and Graham Taggart as Non-Executive Directors of GVM.
* A total of 26,646 metres of drilling were completed during the quarter on
Holfontein and Mooiplaats. 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$2.7 million.
For more information contact:
Simon Farrell, Managing Director - GVM - +61 417 985 383 or +61 8 9322 6776
Leesa Peters / Jos Simson - Conduit PR - +44(0) 20 7429 6606
Romil Patel - Blue Oar Securities Plc - +44(0) 20 7448 4400
Discussion of Results
Nimag Group of Companies (100%)
The Nimag Group's unaudited profit before interest and tax for the 2007
financial year was ZAR45 million (A$8.2 million). The nickel magnesium business
outperformed its budget and the smaller FeSiMag business and Metalloy business
also contributed to the Group's profitability. Trading conditions continue to be
buoyant.
During the quarter, the remaining long term banking debt of A$1.5 million used
to finance GVM's original acquisition of Nimag was repaid.
Coal Activities
Mooiplaats Coal Project
(70% on completion of the Coal of Africa Limited transaction)
The major drilling programme continued at Mooiplaats during the quarter and
23,867 metres (164 holes) were drilled. Seven thousand of the twenty-three
thousand hectares have now been drilled on 'inferred' spacing densities. Infill
drilling has commenced on measured and indicated spacings. The goal of the
programme is to bring a minimum of 60 million tonnes of the resource into
measured and indicated categories. This tonnage represents ten years consumption
at the adjacent Camden Power Station.
SRK consultants are overseeing the drilling programme and a resource statement
will be released during the current quarter. The results of the drilling
programme to date are in line with management expectations.
Holfontein Coal Project
(was 49% - now 100% on completion of the Motjoli transaction)
During the fourth quarter, GVM acquired Motjoli Resources' majority stake in the
Holfontein coal project through the issue of 14,868,283 GVM shares. The final
contractual payment of ZAR18 million (A$3 million) was made to the project's
vendors.
The Holfontein exploration programme, which started towards the end of 2006 to
confirm the structure, tonnage and quality of the Holfontein coal resource, was
completed during the fourth quarter. The geological model based on these results
is currently being updated and the laboratory analysis of the samples is
expected in August. Mine feasibility studies will commence once the laboratory
results have been received.
Having drilled a total of 67 boreholes in the Holfontein resource area at a
drilling density of just less than 14 boreholes per hectare for the 5 seam
resource, and 12 boreholes per hectare for the 4 seam resource, once modeling is
completed, resources will be in the measured category.
Geotechnical tests were conducted on the diamond drill cores to establish the
competence of the roof and floor conditions of both the 5 Seam and 4 Seam
resources. Initial perusal of the results has confirmed the low phosphorus
metallurgical qualities of the 5 Seam with no change in expected yields. The 4
seam resource still needs to be modelled analytically but the indications are
that the coal is suitable for SASOL or Eskom feedstock. Composite samples of the
5 Seam are to be reconstituted to test for certain metallurgical properties.
Similarly, 4 Seam samples are to be reconstituted to test for the suitability of
the coal for Eskom Feedstock.
Baobab Coal Project
(was 50% - now 100% on completion of the Motjoli transaction)
The acquisition of Petmin's 50% interest in the Baobab Coal Project was
completed during the fourth quarter through the issue of 8,333,333 GVM shares to
raise the required purchase price of GBP2.5 million (A$6 million). During June,
GVM acquired the remaining 50% of the Joint Venture held by Motjoli Resources
with the issue of 20,000,000 GVM shares.
Consultants have been mandated to assess railway and related transport
infrastructure from GVM's Baobab and Thuli coal projects to the Richards Bay and
Maputo coal terminals. Management envisage that the consultants will complete
the project during the first quarter of the 2008 financial year. During the 2007
fourth quarter, drilling companies performed site visits and the approved
drilling contractor is expected to commence drilling in August.
Thuli Coal Project (Limpopo)
(74%)
Potential drilling contractors have performed site inspections and drilling on
the Thuli coal project is expected to start in August. Data collected in the
data terrain model completed earlier in the year will be used in the
identification of drilling targets.
Preliminary discussions with various infrastructure participants are underway to
ascertain the export capacity of the coal to be mined in the Thuli Coal Project.
Management have received surface right valuations from independent third parties
mandated to assess the value the surface rights comprising the Thuli coal
project. Preliminary consultations with the current surface rights owners on
GVM's potential acquisition of these rights have been undertaken. GVM will
continue these discussions together with the Thuli coal project drilling
programme during the next quarter.
Authorised by
Simon Farrell
Managing Director
31 July 2007
ASX 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 June 2007
Consolidated statement of cash flows
Current quarter Year to date
Cash flows related to operating activities $A'000 (12 months)
$A'000
1.1 Receipts from product sales and related debtors 20,098 54,118
1.2 Payments for (a) exploration and (2,731) (2,954)
evaluation
(b) development
(c) production (13,387) (43,853)
(d) administration (817) (5,020)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature 296 550
received
1.5 Interest and other costs of finance paid (424) (830)
1.6 Income taxes paid (65) (960)
1.7 Other -
Net Operating Cash Flows 2,970 1,051
Cash flows related to investing activities
1.8 Payment for purchases of: (a)prospects
(b)equity (9,312) (9,937)
investments
(c) other fixed assets (74) (200)
1.9 Proceeds from sale of: (a)prospects -
(b)equity
investments
(c)other fixed assets
1.10 Loans to other entities
1.11 Loans repaid by other entities 0 422
1.12 Other (provide details if material) -
Net investing cash flows (9,386) (9,715)
1.13 Total operating and investing cash flows (6,416) (8,664)
(carried forward)
1.13 Total operating and investing cash flows (6,416) (8,664)
(brought forward)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 60,036 74,216
(net) -see note below
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings (1,593) (3,239)
1.18 Dividends paid (0) (260)
1.19 Other (Exchange rate related movements in
foreign borrowings and reserves)
Net financing cash flows 58,443 70,717
Net increase (decrease) in cash held 52,027 62,053
1.20 Cash at beginning of quarter/year to date 10,074 50
1.21 Exchange rate adjustments to item 1.20 3 1
1.22 Cash at end of quarter 62,104 62,104
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 60
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 3,662 -
3.2 Credit standby arrangements
Estimated cash outflows for next quarter
$A'000
4.1 Exploration and evaluation (2,500)
4.2 Development -
Total (2,500)
Reconciliation of cash
Reconciliation of cash at the end of the quarter Current quarter Previous quarter
(as shown in the consolidated statement of cash
flows) to the related items in the accounts is as $A'000 $A'000
follows.
5.1 Cash on hand and at bank 57,672 10,687
5.2 Deposits at call 4,384 -
5.3 Bank overdraft - (613)
5.4 Other (provide details) - -
Total: cash at end of quarter (item 1.22) 62,056 10,074
Changes in interests in mining tenements
Tenement reference Nature of Interest at Interest at
interest beginning of end of
quarter quarter
(note (2))
6.1 Interests in mining
tenements relinquished,
reduced or lapsed
6.2 Interests in mining Tenement reference Nature of Interest at Interest at
tenements acquired or interest beginning of end of
increased quarter quarter
(note (2))
Holfontein 138 IS Transfer of 0% 100%
Mineral Rights
is subject to
South African
Department of
Minerals and
Energy approval.
The South
African
Department of
Minerals and
Energy has
approved the
transfer of the
Mineral Rights
Tanga 648 MS to GVM. 0% 100%
Wildgoose 577 MS 0% 100%
Ancaster 501 MS 0% 100%
Voorburg 503 MS 0% 100%
Cavan 508 MS 0% 100%
Jutland 536 MS 0% 100%
Cohen 591 MS 0% 100%
Enfield 521 MS 0% 100%
(consolidation of remainng
extent of Enfield 474 MS,
Brosdoorrn 682 MS and R/E
of Grootvlei 684 MS)
Albert 686 MS 0% 100%
Jolfre 584 MS 0% 100%
Kleinenberg 636 MS 0% 100%
Castle Koppies 652 MS 0% 100%
Fanie 578 MS 0% 100%
Chase 576 MS 0% 100%
Fripp 645 MS 0% 100%
Bekaf 650 MS O% 100%
Overvlakte 125 MS 0% 74%
Bergen Op Zoom 124 MS 0% 74%
Semple 119 MS 0% 74%
Almond 120 MS 0% 74%
Voorspoed 836 MS 0% 74%
Stayt 183 M8 0% 74%
Riet 182 MS 0% 74%
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 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 207,768,703 207,768,703
securities
7.4 Changes during
quarter
(a) Increases
through issues 37,352,941 37,352,941 34 pence 34 pence
8,333,333 8,33,333 30 pence 30 pence
22,223,000 22,223,000 50 pence 50 pence
34,868,283 34,868,283 30 cents 30 cents
10,000,000 10,000,000 30 pence 30 pence
1,250,000 1,250,000 40 pence 40 pence
(b) Decreases 181,818 181,818 11 pence 11 pence
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 See Note 6 See Note 6
conversion 21,842,326 -
factor)
7.8 Issued during 12,842,326 Nil Exercise price Expiry date
quarter See Note 6 See Note 6
7.9 Exercised during Nil Nil
quarter
7.10 Expired during Nil Nil
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.
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 Quoted Exercise Price Expiry Date Lapsed Since End of
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 -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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