1st May 2007 09:56
GVM Metals Ltd01 May 2007 GVM METALS LIMITED QUARTERLY REPORT GVM Metals Limited ("GVM" or "the Company") is pleased to announce itsoperational report for the 1st quarter ended 31 March 2007. A full copy of thisreport, 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 for the quarter of A$1.8 million. • Cash balance at the end of the quarter was A$10.1 million. • Nimag (Pty) Ltd's nickel magnesium alloy business again operated well ahead of budget with earnings before interest and tax (EBIT) for the quarter of A$2.1 million. The smaller FeSiMag business returned a small profit for the nine month period after recording a loss for the first half of the year. • Negotiations to acquire a 70% interest in Coal of Africa Limited (CoAL) were successfully completed. CoAL owns the Mooiplaats coal project which is situated two kilometres from the re-commissioned Camden Power Station and is adjacent to the rail line to the Richards Bay export coal terminal. • Allotment of 12,200,000 GVM shares to Global Coal Management plc (formerly Asia Energy plc) and an invitation to Steve Bywater and Graham Taggart (Global Coal Management's CEO and CFO) to join the Board of GVM. • Placement of 8,333,333 GVM shares with professional London based investors, raising GBP2.5 million (A$6.2 million). The funds are to be applied to the acquisition of 50% of the Baobab JV. Discussion of Results Nimag Group of Companies (100%) The Nimag Group's unaudited profit before interest and tax for the first ninemonths of the 2007 financial year was ZAR32 million (A$5.5 million). The nickelmagnesium business continued to outperform its budget and the smaller FeSiMagbusiness returned to profitability for the nine month period. The Fibresbusiness reported a profit of AU$41k for the quarter and Management continue toidentify means to improve the Fibres business. Operational cash flow generated during the quarter combined with favourablemanagement of working capital resulted in an A$1.2 million improvement in thecash position at the end of March. During the third quarter, cash of A$382k wasused to repay term loans. Current exchange rate levels combined with high nickel prices suggest a positiveoutlook for the remainder of the financial year. Coal Activities Holfontein Coal Project (49% now - 100% on completion of Motjoli transaction) The initial Holfontein drilling schedule was completed during the third quarter.Analysis of the drilling results has identified metallurgical and thermal coaldeposits typical to the region. Additional in-fill drilling to bring the coalresource to a 'Measured' resource category according to the JORC/ SAMREC codehas commenced. Management envisages that the in-fill drilling programme will becompleted in the current quarter. A mining feasibility study will be completedduring the September quarter. Baobab Coal Project (100% on completion of acquisitions) The acquisition of Petmin's 50% interest in the Baobab Coal Project through theissue of 8,333,333 GVM shares to raise the required purchase price of GBP 2.5million (A$6.2 million) will be put to shareholders at the May 2007 GeneralMeeting. The proposed acquisition will allow GVM to purchase 100% of BaobabMining & Exploration (Pty) Ltd, a Petmin subsidiary company. The purchase issubject to GVM shareholder approval, ASX (if required) and South African ReserveBank approval. Approval in terms of Section 11 of the Mineral and PetroleumResources Development Act of South Africa was obtained in March 2007. During the quarter, a Data Terrain Model of the Baobab Coal Project wascommissioned and completed. The model will provide guidance for the proposeddrilling project due to commence once shareholder approval of the project isobtained. Limpopo Coal Project (74%) Additional exploration of the Limpopo Coal area was commissioned during thethird quarter of the financial year in the form of a Data Terrain Model. Thedata collected will be used to generate a geological model of the project and toidentify potential drilling targets. Preliminary discussions with various infra-structure participants are underwayto ascertain the capacity for the export of coal mined in the Limpopo CoalProject. Management have initiated consultations with the current surfacerights' owners and will continue these discussions in the next quarter. Mooiplaats Coal Project (70% on completion of the Kelso transaction) The Sale of Shares Agreement to purchase 70% of CoAL, which holds the Mooiplaatsproject, was signed in March 2007. In-fill drilling activities on the propertycontinue and a feasibility study will commence during the June quarter. Kalbara Tenement (GVM 21.31%) No exploration work was conducted on the Kalbara tenement during the quarter. Kanowna West Tenements (GVM 23.68%) No exploration work was conducted on the Kanowna West tenements during thequarter. 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 Olly Cairns / Romil patel - Blue Oar Securities Plc* - +44(0) 20 7448 4400 * Blue Oar Securities was formerly Corporate Synergy Plc and acts as NominatedAdvisor and Joint Broker for the Company. 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 entityGVM Metals Limited ABN Quarter ended ("current quarter")98 008 905 388 31 March 2007 Consolidated statement of cash flows Current quarter Year to dateCash flows related to operating activities $A'000 (9 months) $A'0001.1 Receipts from product sales and related debtors 11,580 34,020 1.2 Payments for (a) exploration and (105) (310) evaluation (b) development (c) production (9,527) (30,414) (d) administration (1,111) (4,203)1.3 Dividends received1.4 Interest and other items of a similar nature 97 254 received1.5 Interest and other costs of finance paid (78) (406)1.6 Income taxes paid (598) (896)1.7 Other Net Operating Cash Flows 258 (1,955) Cash flows related to investing activities1.8 Payment for purchases of: (a)prospects (b)equity investments (625) (625) (c) other fixed assets (37) (126)1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets 0 29 1.10 Loans to other entities1.11 Loans repaid by other entities 74 4231.12 Other (provide details if material) Net investing cash flows (588) (299)1.13 Total operating and investing cash flows (carried forward) (330) (2,254) 1.13 Total operating and investing cash flows (brought forward) (330) (2,254) Cash flows related to financing activities1.14 Proceeds from issues of shares, options, etc. 0 14,180 (net) -see note below1.15 Proceeds from sale of forfeited shares1.16 Proceeds from borrowings1.17 Repayment of borrowings (304) (1,645)1.18 Dividends paid 0 (260)1.19 Other (Exchange rate related movements in foreign borrowings and reserves) Net financing cash flows (304) 12,275 Net increase (decrease) in cash held (634) 10,0211.20 Cash at beginning of quarter/year to date 10,705 501.21 Exchange rate adjustments to item 1.20 3 31.22 Cash at end of quarter 10,074 10,074 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities Current quarter $A'0001.23 Aggregate amount of payments to the parties included in item 1.2 1071.24 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 availableAdd notes as necessary for an understanding of the position. Amount available Amount used $A'000 $A'0003.1 Loan facilities 3,662 6133.2 Credit standby arrangements Estimated cash outflows for next quarter $A'0004.1 Exploration and evaluation (500) 4.2 Development - Total (500) Reconciliation of cash Reconciliation of cash at the end of the quarter Current quarter Previous quarter(as shown in the consolidated statement of cashflows) to the related items in the accounts is as $A'000 $A'000follows. 5.1 Cash on hand and at bank 10,687 10,7055.2 Deposits at call - -5.3 Bank overdraft (613) -5.4 Other (provide details) - - Total: cash at end of quarter (item 1.22) 10,074 10,705 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 Tenement reference Nature of Interest at Interest at interest beginning of end of quarter quarter (note (2))6.2 Interests in mining tenements acquired or increased Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rightstogether 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, redemptions7.3 +Ordinary 93,559,228 93,559,228 securities 7.4 Changes during quarter (a) Increases through issues 12,200,000 12,200,000 (b) Decreases through returns of capital, buy-backs7.5 +Convertible debt securities (description)7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted7.7 Options Exercise price Expiry date (description and conversion 9,000,000 - See Note 6 See Note 6 factor)7.8 Issued during Nil Nil Exercise price Expiry date quarter See Note 6 See Note 67.9 Exercised during Nil Nil quarter7.10 Expired during Nil Nil quarter7.11 Debentures (totals only)7.12 Unsecured notes (totals only) Compliance statement 1 This statement has been prepared under accounting policies whichcomply with accounting standards as defined in the Corporations Act or otherstandards acceptable to ASX (see note 4). 2 This statement does give a true and fair view of the mattersdisclosed. Sign here: ...............................................Date: 26 April 2007 (Director) Print name: Simon Farrell Notes 1 The quarterly report provides a basis for informing the market howthe entity's activities have been financed for the past quarter and the effecton its cash position. An entity wanting to disclose additional information isencouraged 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 inrespect of interests in mining tenements acquired, exercised or lapsed duringthe reporting period. If the entity is involved in a joint venture agreementand there are conditions precedent which will change its percentage interest ina mining tenement, it should disclose the change of percentage interest andconditions precedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities: The issue price and amount paid upis not required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting forExtractive Industries and AASB 1026: Statement of Cash Flows apply to thisreport. 5 Accounting Standards ASX will accept, for example, the use ofInternational Accounting Standards for foreign entities. If the standards useddo not address a topic, the Australian standard on that topic (if any) must becomplied with. 6 Issued and Quoted Securities as at 31 March 2007: Number Issued Number Quoted Exercise Price Expiry Date Lapsed Since End of quarter 9,000,000 - 50.0 30 September 2011 - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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