31st Jul 2007 08:29
GVM Metals Ltd31 July 2007 GVM METALS LIMITED QUARTERLY REPORT GVM Metals Limited ('GVM' or 'the Company') is pleased to announce itsoperational report for the 4th quarter ended 30 June 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 (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 2007financial year was ZAR45 million (A$8.2 million). The nickel magnesium businessoutperformed its budget and the smaller FeSiMag business and Metalloy businessalso contributed to the Group's profitability. Trading conditions continue to bebuoyant. During the quarter, the remaining long term banking debt of A$1.5 million usedto 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 and23,867 metres (164 holes) were drilled. Seven thousand of the twenty-threethousand hectares have now been drilled on 'inferred' spacing densities. Infilldrilling has commenced on measured and indicated spacings. The goal of theprogramme is to bring a minimum of 60 million tonnes of the resource intomeasured and indicated categories. This tonnage represents ten years consumptionat the adjacent Camden Power Station. SRK consultants are overseeing the drilling programme and a resource statementwill be released during the current quarter. The results of the drillingprogramme 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 theHolfontein coal project through the issue of 14,868,283 GVM shares. The finalcontractual payment of ZAR18 million (A$3 million) was made to the project'svendors. The Holfontein exploration programme, which started towards the end of 2006 toconfirm the structure, tonnage and quality of the Holfontein coal resource, wascompleted during the fourth quarter. The geological model based on these resultsis currently being updated and the laboratory analysis of the samples isexpected in August. Mine feasibility studies will commence once the laboratoryresults have been received. Having drilled a total of 67 boreholes in the Holfontein resource area at adrilling density of just less than 14 boreholes per hectare for the 5 seamresource, and 12 boreholes per hectare for the 4 seam resource, once modeling iscompleted, resources will be in the measured category. Geotechnical tests were conducted on the diamond drill cores to establish thecompetence of the roof and floor conditions of both the 5 Seam and 4 Seamresources. Initial perusal of the results has confirmed the low phosphorusmetallurgical qualities of the 5 Seam with no change in expected yields. The 4seam resource still needs to be modelled analytically but the indications arethat the coal is suitable for SASOL or Eskom feedstock. Composite samples of the5 Seam are to be reconstituted to test for certain metallurgical properties.Similarly, 4 Seam samples are to be reconstituted to test for the suitability ofthe 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 wascompleted during the fourth quarter through the issue of 8,333,333 GVM shares toraise 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 Resourceswith the issue of 20,000,000 GVM shares. Consultants have been mandated to assess railway and related transportinfrastructure from GVM's Baobab and Thuli coal projects to the Richards Bay andMaputo coal terminals. Management envisage that the consultants will completethe project during the first quarter of the 2008 financial year. During the 2007fourth quarter, drilling companies performed site visits and the approveddrilling contractor is expected to commence drilling in August. Thuli Coal Project (Limpopo) (74%) Potential drilling contractors have performed site inspections and drilling onthe Thuli coal project is expected to start in August. Data collected in thedata terrain model completed earlier in the year will be used in theidentification of drilling targets. Preliminary discussions with various infrastructure participants are underway toascertain the export capacity of the coal to be mined in the Thuli Coal Project.Management have received surface right valuations from independent third partiesmandated to assess the value the surface rights comprising the Thuli coalproject. Preliminary consultations with the current surface rights owners onGVM's potential acquisition of these rights have been undertaken. GVM willcontinue these discussions together with the Thuli coal project drillingprogramme 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 dateCash 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 relatedentities 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 cashflows) to the related items in the accounts is as $A'000 $A'000follows. 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 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, 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 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. 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 up isnot 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 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 ExchangeRelated Shares:
MCM.L