31st Jan 2006 10:48
GVM Metals Ltd31 January 2006 For immediate release 31 January 2006 GVM METALS LIMITED ("GVM" or the "Company") REPORT FOR DECEMBER 2005 QUARTER Highlights •Shares commenced trading on the Alternative Investment Market ("AIM") of the London Stock Exchange on 16 December 2005. •Unaudited Group profit before interest and tax of A$680,000 for the first six months of the year, after incurring listing costs of A$125,000. •Nimag (Pty) Ltd's nickel magnesium alloy business continued to operate ahead of budget. Its smaller FeSi Mag business turned the corner and reported a profit for the quarter. • Following the completion of the scoping study, the Holfontein Coal Project (GVM 49%) is estimated to contain an indicated gross in situ resource of 56 million tons. The Project shows an IRR of 41% and an NPV of AUS$19million. Discussion of ResultsNimag Group of Companies (GVM-74% with option to acquire balance by share issue) The Nimag Group's quarterly profit before interest and tax increased by 18%compared to the September 05 quarter despite the continued strong performance ofthe Rand. The nickel magnesium business continued to outperform its budget,whilst both the smaller FeSi Mag and Fibres businesses turned the corner andreported profits compared to losses during the September 05 quarter. The tradingbusiness performed below expectations due to delays in the commissioning of theMalawi Rutile and Zircon project. Commercial production of Zircon commenced atthe end of the quarter and rutile is expected to commence in the currentquarter. Nimag traditionally earns about 60% of its annual profits during the second halfof its financial year. The inexplicably strong performance of the Rand continuesto adversely affect trading. However, this effect is off-set by the high nickelprice and the outlook for the rest of the year remains positive. During the quarter, debt levels were reduced significantly, which included areduction in trade creditors totalling $A1.45m and the repayment A$650,000 oflong term loans. Provisional tax paid during the quarter amounted to A$146,000 SA Mineral Resources Corporation ("Samroc") - GVM-30.19% The company was severely affected by the absence of orders from its majorcustomer during the first and second quarters of the year. The company commencedoperating at normal levels during January 2006 and is expected to be cash flowpositive during the remainder of the year. GVM recently announced its intentionto dispose of the Samroc investment. It is anticipated that the disposal willrealise approximately A$750,000. Holfontein Coal Project - GVM 49%The project is estimated to contain an indicated resource of 56 million tonsfollowing a scoping study. The study was based on mining of 140,000 tons per month yielding 870,000 tons ofsteaming coal and 420,000 tons of coking coal per annum. At current prices thisequates to annual revenue of A$40million. The Project shows an IRR of 41% and GVM's 49% interest has a NPV of A$19millionusing a 10% real discount rate (nominal 16%) and a Rand/A$ exchange rate of 5:1. The bankable feasibility study will commence once the "new mining titles" areissued. This is expected during the forthcoming quarter. Kanowna West Tenements (GVM 23.68% interest) and Kalbara Tenement (GVM 21.31%interest) Placer Dome Asia Pacific Limited, subject to the JV agreement, have the right toearn a 60% interest by spending $2 million in direct drilling costs over fiveyears. Results of diamond drill holes GVD137 and GVD140, drilled last quarter, werereceived. Hole GVD137 returned a downhole intersection of 8m @ 4.7g/t Au (1/2core, 1m intervals, 50g aliquot, fire assay/AAS analysis) from 123m. The mineralisation is characterised as a zone of silica-arsenopyrite-pyriteveins in bleached sericite-carbonate altered siltstone and arenite. Veinsgenerally strike to the northwest and dip to the southwest at between 45 and 70degrees. Bedding has a similar orientation. A broad (30m downhole) zone ofintensely foliated rock in the footwall to the mineralisation also has a similarorientation. Three fences of RC drill holes (namely, holes KRC0182-190) were completed for1,338m total, straddling the gross structural orientation of results indicatedfrom GVD137. The holes were drilled on 80m sections adjacent to, and alongstrike from, the mineralized intersection to test for oxide and primarypotential. Assay results are pending. Yours sincerely Simon FarrellManaging Director 31 January 2006 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 entityGVM Metals Limited ABN Quarter ended ("current quarter")------------------- ------------------98 008 905 388 December 2005------------------- ------------------ Consolidated statement of cash flows ----------- ------------Cash flows related to operating activities Current Year to quarter date $A'000 (6 months) $A'000 ----------- ------------ ------------ 1.1 Receipts from product sales and related 6,853 16,415 debtors 1.2 Payments for (a) exploration and evaluation (7,461) (15,509) (b) development (344) (625) (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature 10 19 received 1.5 Interest and other costs of finance paid (175) (356) 1.6 Income taxes paid (145) (145) 1.7 Other (provide details if material) ----------- ------------ Net Operating Cash Flows (1,262) (201)------ ------------------------ ----------- ------------ Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (15) (15) (b) equity investments (68) (73) (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects 155 155 (b) equity investments (c) other fixed assets1.10 Loans to other entities1.11 Loans repaid by other entities1.12 Other (provide details if material) ----------- ------------ Net investing cash flows 72 67 ----------- ------------1.13 Total operating and investing cash flows (1,190) (134)------ (carried forward) ----------- ------------ ------------------------ 1.13 Total operating and investing cash flows (1,190) (134)------ (brought forward) ------------ ------------ ---------------------- Cash flows related to financing activities1.14 Proceeds from issues of shares, options, etc. (net)1.15 Proceeds from sale of forfeited shares1.16 Proceeds from borrowings1.17 Repayment of borrowings (644) (1,123)1.18 Dividends paid1.19 Other (provide details if material) ------------ ------------ Net financing cash flows (644) (1,123)------ ---------------------- ------------ ------------ Net increase (decrease) in cash held (1,834) (1,257)1.20 Cash at beginning of quarter/year to date 1,210 6331.21 Exchange rate adjustments to item 1.20 55 55 ------------ ------------1.22 Cash at end of quarter (569) (569)------ ---------------------- ------------ ------------ 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 243 item 1.2 -------------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 5,848 5,753 ------------- -------------3.2 Credit standby arrangements----- ----------------------- ------------- ------------- Estimated cash outflows for next quarter $A'000 ------------------4.1 Exploration and evaluation ------------------4.2 Development----- ----------------------------- ------------------ Total----- ----------------------------- ------------------ Reconciliation of cash------------------------- ------------ -------------Reconciliation of cash at the end of the quarter (as Current Previousshown in the consolidated statement of cash flows) to quarter quarterthe related items in the accounts is as follows. $A'000 $A'000 ------------------------- ------------ ------------- -------------5.1 Cash on hand and at bank 1,323 1,663 ------------ -------------5.2 Deposits at call - - ------------ -------------5.3 Bank overdraft (1,892) (453) ------------ -------------5.4 Other (provide details) - ------ ---------------------- ------------ ------------- Total: cash at end of quarter (item 1.22) (569) 1,210----- ---------------------- ------------ ------------- Changes in interests in mining tenements -------------- --------- -------- -------- Tenement Nature of Interest at Interest reference interest beginning of at end of quarter quarter (note (2)) -------------- -------- -------- ---------6.1 Interests in mining tenements relinquished, -------------- --------- -------- -------- reduced or lapsed Tenement Nature of Interest at Interest reference interest beginning of at 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 Issue price Amount paid up -------------- number quoted per security per security ---------- ---------- (see note 3) (see note 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 27,698,387 27,698,387 securities ---------- ---------- ---------- ------------ 7.4 Changes during quarter (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 75,000 - Exercise Expiry date (description and price conversion factor) $1.92 30 September ---------- ---------- ---------- 2006 ------------ 7.8 Issued during quarter ---------- ---------- ---------- ------------ 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 withaccounting standards as defined in the Corporations Act or other standardsacceptable to ASX (see note 4). 2 This statement does give a true and fair view of the matters disclosed. Sign here: ............................................... Date: 31 January 2006(Director) Print name: Simon Farrell Notes 1 The quarterly report provides a basis for informing the market how theentity's activities have been financed for the past quarter and the effect onits 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 in respect ofinterests in mining tenements acquired, exercised or lapsed during the reportingperiod. If the entity is involved in a joint venture agreement and there areconditions precedent which will change its percentage interest in a miningtenement, it should disclose the change of percentage interest and conditionsprecedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities: The issue price and amount paid up is notrequired in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for ExtractiveIndustries and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of InternationalAccounting Standards for foreign entities. If the standards used do not addressa topic, the Australian standard on that topic (if any) must be complied with. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MCM.L