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KGL RESOURCES LIMITED Interim / Quarterly Report 2012

Jul 30, 2012

65179_rns_2012-07-30_9d5ac774-5741-4a6a-b0b1-d030b89d8340.pdf

Interim / Quarterly Report

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31 July 2012

Kentor Gold (ASX: KGL) is an Australian-based, emerging midtier gold company with advanced projects in Australia and the Kyrgyz Republic.

Formed in 1998 and listed on the ASX in 2005, the Company expects to commence high grade gold production at Burnakura in Western Australia in mid-2012, with potential additional goldcopper production from the neighbouring Gabanintha deposit. At Jervois in the Northern Territory, the Company is studying the feasibility of developing a large, high grade copper-silver resource with potential for the production of gold and other base metals.

In the Kyrgyz Republic, Kentor Gold is ready to proceed with the development of the Company’s 80% owned high grade, very low cost Andash Gold-Copper Project once site access has been obtained. Andash is targeted to produce 70,000 oz gold and 7,400 tonnes copper pa for an initial six years, with high potential for expansion.

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Issued capital:

1,062.1 million ordinary shares 27.4 million unlisted options

Market Capitalisation

26 April 2012: $115 million

Quarterly Activities Report Period Ending 30 June 2012

  • Murchison Gold Project, WA - Kentor’s first gold mining under way

  • High grade drill results support early production increase and cost reduction

  • Jervois Copper-Silver-Gold Project, NT - drill results enhance feasibility study

  • High grades near surface boost open pit potential

  • Further increase in Resource expected, including gold  Major mine potential confirmed

  • Andash Gold-Copper Project, Kyrgyz Republic - environmental review a step forward

  • Corporate: - $26.7M capital raising comprising $6.2M placement and $20.5M rights issue (July 2012)

Quarterly Overview

Kentor Gold (“Kentor Gold” or “the Company”) enjoyed multiple drilling successes across the Murchison Gold Project and the Jervois Copper-Silver-Gold Project during the quarter. The drilling programs totalling 35,000m continued to add value to the Company’s Australian assets.

At the Murchison Project, where gold mining and processing have commenced, the drilling results are expected to increase the planned scale of production and reduce the operating costs. In addition to having discovered high grade mineralisation, in one of the initial mining pits (Lewis), in the previous quarter, further high grade gold not included in the planned first phase of production, was discovered this quarter at other sites.

At Jervois, drill results continue to support and potentially upgrade the feasibility study that is now being fast tracked. This follows a preliminary scoping study that found the Jervois Project would produce strong financial returns.

In particular, exceptional near surface, high grade results confirmed the open pit potential of the Reward Deposit. Other high grade copper results 6km along strike to the south, at Bellbird, point to the potentially large scale of the overall project.

In the Kyrgyz Republic, slow but positive progress has been made towards final local approval for the low cost gold-copper Andash Project, with the appointment of an international environmental consultant to review the impact of the project.

Kentor Gold Limited

www.kentorgold.com.au

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Australia

Jervois Copper-Silver-Gold Project, NT (Kentor Gold 100%)

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The Company has now completed intensive drilling programs comprising approximately 5,000m of diamond drilling and 9,000m of RC drilling. The drilling was undertaken as part of the feasibility study being fast tracked following a scoping study that found Jervois would be a robust project producing strong financial returns.

The results featured exceptionally high grade, near surface intercepts that indicated the open cut potential at Jervois. Other high grade results indicated mineralisation at depth and along strike that reveal extended strike lengths.

Results at the Reward and Marshall Deposits included:

  • 33.8m @ 1.79% copper, 0.28% lead, 0.34% zinc, 28.48 g/t silver and 0.29 g/t gold from 17.6m including intervals of up to 9% copper (Hole RJ201)

  • 53.5m @ 1.08% copper, 24.9 g/t silver and 0.24 g/t gold from 105.1m (Hole RJ202)

  • 12m @ 3.72% copper, 40.7 g/t silver and 0.68 g/t gold from 63m, and 2.6m @ 1.61% copper, 13.1 g/t silver and 0.06 g/t gold from 77.4m (Hole RJ206)

  • 9.3m @ 2.12% copper, 14.9 g/t silver and 0.09 g/t gold from 60.9m (Hole RJ205).

Subsequent drilling at Reward designed to provide samples for metallurgical testing included assays of up to 19.4% copper, 37.6% lead, 14.2% zinc and 702 g/t silver. The results of several holes included:

  • 60m @ 1.7% copper, 3.81% lead, 1.15% zinc, 113.3 g/t silver and 0.21 g/t gold from 7.1m (Hole JMET11)

  • including 12.1% copper, 2.42% lead, 2.4% zinc, 217.3 g/t silver and 0.62 g/t gold in the first 3.35 metres

  • 16.3m @ 1.9% copper, 55.3 g/t silver and 0.59 g/t gold from 15.2m (Hole JMET3)

  • 10.3m @ 2.1% copper and 13.3 g/t silver from 17.4m (Hole JMET4)

  • 4.2m @ 6.6% copper, 0.3% lead, 0.2% zinc, 30 g/t silver and 0.19 g/t gold from 37.4m (Hole JMET2)

  • At Marshall, 21.4m @ 3.0% copper, 0.4% lead, 0.4% zinc, 40.1 g/t silver and 0.38 g/t gold from 94.5m (Hole JMET6)

Bellbird is also emerging as an increasingly important deposit within the Jervois Project. Drilling at Bellbird, 6km along strike south of Reward and Marshall, produced further high grade results, including:

  • 7.0m @ 2.3% copper, 23.4 g/t silver and 0.32 g/t gold from 42.6m (Hole JMET8)

  • 10m @ 4.6% copper, 23.5 g/t silver and 0.10 g/t gold from 67m (Hole RJ217)

  • 15.5m @ 1.6% copper, 19.9 g/t silver and 0.26 g/t gold from 129m (Hole RJ221)

  • 18.9m @ 2.4% copper, 16.3 g/t silver and 0.15 g/t gold from 84.7m (Hole RJ222)

Page 2 of 8

31 July 2012

Kentor Gold Limited

www.kentorgold.com.au

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In addition to the diamond drilling, seven shallow RC holes to the north of the current resource have intercepted mineralisation that could potentially define additional high grade copper resources which are amenable to open cut mining. While results are still pending, they are expected to extend the strike length at Bellbird to approximately 900 metres.

The drilling results at Jervois include good gold grades, increasing the expectation that, for the first time, gold will be included in an increased Mineral Resource later this year.

Jervois currently has an Inferred Copper Resource of 11.9 million tonnes @ 1.3% copper and 25.2 g/t

silver for a total of 150,500 tonnes copper and 9.7 million oz silver.

The positive results of the recent drilling program strengthen the potential of Jervois to become Kentor Gold’s largest project.

Murchison Gold Project, WA (Kentor Gold 100%)

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Mining and processing commenced during the quarter. At the same time, the 20,000m drilling program at Murchison was also completed.

Initial mining was undertaken at the Lewis and Reward pits, and high grade ore crushed in preparation for milling which commenced early in July. Construction of the upgraded CIL plant was completed and wet commissioning commenced. The first gold pour is planned for the end of July.

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As a result of the successful drilling program, the current Inferred Resource totalling 15.1 million tonnes @ 1.5g/t gold for a total of 719,000 oz gold at a 0.5g/t gold cut-off is being updated and a revised mining schedule prepared.

Drilling in the March quarter intercepted high grade gold within and adjacent to the Lewis pit shell, pointing to the potential for higher gold production and lower costs per ounce than provided in the initial mine plan.

Drill results in the June quarter were for drilling at Alliance, Federal North and NOA 7 & 8, deposits that are not included in the current mine plan. They therefore present the potential for further increases in Resources and future production; and also reduced production costs.

High grade gold intersections were also encountered at the historic Alliance pit which is now likely also to be added to the mine plan. Alliance is only 2km south of the Murchison processing plant. It is adjacent to the main haul road leading from the more distant Lewis and Reward pits from which initial production is being sourced.

Page 3 of 8

31 July 2012

Kentor Gold Limited

www.kentorgold.com.au

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Alliance drilling intercepts included:

  • 9m @ 4.1 g/t gold from 62m including 2m @ 14.4 g/t gold from 62m (Hole 12BNRC0103)

  • 11m @ 3.6 g/t gold from 50m including 4m @ 7.8 g/t gold from 51m (Hole 12BNRC0104)

  • 2m @ 12.7 g/t gold from 64m and 1m @ 23.0 g/t gold from 72m (Hole 12BNRC0100)

Drilling intercepts at Federal North, just to the south of Lewis/Reward, included:

  • 5m @ 5.10 g/t gold from 31m, including 1m @ 20.80 g/t gold (Hole 12BNRC0152)

  • 2m @ 12.10 g/t gold from 42m including 1m @ 22.30 g/t gold (Hole 12BNRC0154)

  • 2m @ 2.62 g/t gold from 4m, and 8m @ 2.61 g/t gold from 17m including 1m @ 10.8 g/t gold (Hole 12BNRC0158)

Intercepts at NOA 7 & 8, to the north of the processing plant, included:

  • 8m @ 9.9 g/t gold from 176m, including 1m @ 40.8 g/t gold (Hole 12BNRC0229)

  • 3m @ 13.9 g/t gold from 247m including 1m @ 36.1 g/t gold (Hole 12BNRC0223)

  • 1m @ 35.2 g/t gold from 226m, and 6m @ 8.3 g/t gold from 247m (Hole 12BNRC0222)

  • 4m @ 5.8 g/t gold from 63m (Hole 12BNRC0262)

  • 11m @ 4.0 g/t gold from 117m (Hole 12BNRC0260A)

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Resource updates for a number of pits are currently underway following completion of the drilling program. Pit optimisation and design work will then be completed to provide a revised mining schedule for the operation. This work is expected to be completed in October.

The four-phase growth strategy at Murchison comprises (1) production of 24,000 oz gold per year through the CIL plant for an initial three and a half years, (2) a parallel heap leaching operation, commencing in 2013, to increase production at minimal additional cost, (3) an expansion of the CIP plant from 260,000 to 500,000 tonnes a year, and

(4) flotation of copper-gold ore to produce a copper concentrate.

Planning for a heap leach operation continued during the quarter. Pit designs were created to assess the potential of the Alliance and Authaal resources. At Lewis and Reward, where high grade ore is being mined for initial gold production, stockpiles of low grade ore are being established. Costs of the heap leach are being kept low by:

  • the securing last year of a complete heap leaching circuit from the Indee gold project;

  • the fact that a lot of the circuit’s low grade ore needs to be mined anyway to access the high grade ore for the CIL plant:

  • and the leveraging off already established facilities at Murchison.

Further information on the heap leach was announced on 3 July.

Page 4 of 8

31 July 2012

Kentor Gold Limited

www.kentorgold.com.au

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Kyrgyz Republic

Andash Gold-Copper Project (Kentor Gold 80%)

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In order to advance negotiations with the local community at Andash, the Kyrgyz Government presented to parliamentary committee meetings in April and May, plans for an independent environmental review of the Andash project. A small minority group has used erroneous claims of environmental risk to raise anxiety in the local community about the proposed development. In early July, the Russian environmental auditing partnership EMAS was appointed to conduct the review. The lead consultant is a Russian mining

engineer who was formerly head of the environmental protection department of a major western gold producer working in the Russian Federation. The review is expected to be completed about the end of September. Kentor Gold is confident that reputable environmental auditors will endorse the Andash development plan, finding that the environmental impact will be minimal.

Despite the delays, the environmental review is a move forward. The Company continues to target first production in 2013 at the very low cost Andash project at an average 70,000 oz gold and 7,400 tonnes copper a year for an initial six years. When local approval is obtained and site access gained, the Company will commence a three month geotechnical investigation program and then proceed with a 12 month construction program.

Andash has an estimated JORC Ore Reserve of 539,730 oz gold and 63,486 tonnes copper, and a Resource of 19.2 million tonnes @ 1.1 g/t gold and 0.4% copper for 679,023 oz gold and 77,300 tonnes copper.

Bashkol Exploration Licence (Kentor Gold 80%)

The Bashkol exploration licence has now been extended to the 31st of December, 2017. A licence and a licence agreement have been issued by the State Agency for Geology and Mineral Resources, and the local municipality has endorsed the work programme.

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The delay in extending the exploration licence, caused by a restructuring process within the State Agency for Geology and Mineral Resources, has resulted in a reduced length of field season for 2012. The reduced length of field season will not allow for construction of the access road or for drilling. A reduced work programme consisting of geological mapping, surface sampling and geophysics has been submitted to the State Agency for approval.

The Company is negotiating with a third party, a potential

farm-in for the funding of exploration and development at Bashkol in exchange for part ownership of the project.

Corporate

At 30 June 2012, Kentor Gold had a cash balance of $9.9 million, having in the previous 18 months increased the Company’s number of advanced projects from one (Andash) to three (Murchison and Jervois) and brought Murchison to within a month of first gold.

On 17 July, Kentor Gold announced the successful completion of a placement of 10 million new shares at 62 cents per share to raise gross proceeds of $6.2 million.

In conjunction with the placement, the Company announced a 5 for 17 non-renounceable rights issue to raise $20.5 million.

Page 5 of 8

31 July 2012

Kentor Gold Limited

www.kentorgold.com.au

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The funds will be used predominantly to expand operations at the Murchison Gold Project through the heap leach phase, and to complete the feasibility study at the Jervois Copper-Silver-Gold Project. This will take the Company through to mid-2013 by which time Kentor Gold is expected to be cash positive.

Outlook

The Murchison Gold Project is scheduled to pour first gold during the current quarter. Production at phase one level will continue in parallel with development of the heap leach circuit that will see the project’s production increase in mid-2013.

As a result of the successful drilling this year, work will continue on a Resource update and a revised mining schedule to include other deposits not in the initial phase one production schedule.

Work will continue on the feasibility study for the Jervois Copper-Silver-Gold Project including an increased Resource.

In the Kyrgyz Republic, the Company will continue to cooperate fully with the environmental audit of the Andash Gold-Copper Project in order to expedite local approval and project development.

For further information contact:

Mr Simon Milroy Managing Director Phone: (07) 3071 9003 Email: [email protected]

Mr. David Waterhouse Investor Relations Phone (03) 9670 5008 Email: [email protected]

Page 6 of 8

31 July 2012

Kentor Gold Limited

www.kentorgold.com.au

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Appendix 1 KGL Group Resources

Tonnes (mt) Grade
Au g/t
Grade
Cu%
Grade
Ag g/t
Gold (oz) Copper (t) Silver (Oz)
Andash Sulphide
Jervois
Burnakura
Gabanintha
0.38
11.9
10.6
4.5
0.93
1.5
1.4
0.25
1.3
25.2 11,350
516,000
203,000
950
150,500
9,660,000
Total Inferred Resources 27.38 730,350 151,450 9,660,000
Andash Oxide
Andash Sulphide
0.81
14.31
0.85
1.11
0.43
0.38
22,136
510,507
3,510
54,260
Total Indicated Resources 15.12 532,643 57,770
Andash Oxide
Andash Sulphide
0.923
3.16
0.88
1.21
0.5
0.47
26,114
122,932
4,638
14,900
Total Measured Resources 4.08 149,046 19,538
Total Resources 46.58 1,412,039 228,758 9,660,000

Gabanintha and Burnakurra Resources as quoted at a cut-off grade of 0.5g/t Au. Jervois Resource is based on cut-off grades 0.2% to 0.5% Cu Kentor Gold own 80% of the Andash project

Page 7 of 8

31 July 2012

Kentor Gold Limited

www.kentorgold.com.au

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Competent Persons Statements

The information in this report that relates to mineral resource estimation for Gabanintha is based on work completed by Mr Jonathon Abbott. Mr Abbott is a full-time employee of MPR Geological Consultants Pty Ltd and a member of the Australian Institute of Geoscientists. Mr Abbott has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Abbott consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The data in this report that relates to Mineral Resource Estimates and Exploration Potential for Jervois is based on information evaluated by Mr Simon Tear who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Tear is a full-time employee of Hellman & Schofield Pty Ltd and he consents to the inclusion in the report of the Mineral Resource in the form and context in which they appear.

The Resource estimates for Andash in this report are based on information compiled by Dr. Phil Newall, who is a Chartered Engineer and Fellow of the Institute of Materials Minerals and Mining and a full time employee of Wardell Armstrong International. Dr. Newall has sufficient experience which is relevant to the style of the mineralisation and the type of deposit under consideration and to the activity to which he is undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr. Newall has consented to the inclusion of this information in the form and context in which it appears in this report.

The information in this report that relates to exploration results for Burnakura is based on work completed by Mr Keith Mayes who is a full-time employee of Kentor Gold Limited and a Fellow of the Geological Society of London. Mr Mayes has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Mayes has consented to the inclusion of this information in the form and context in which it appears in this report.

The data in this report that relates to exploration results for Jervois is based on information compiled by Rudy Lennartz, who is a member of the Australasian Institute of Mining and Metallurgy and a full time employee of Kentor Minerals (NT) Pty Ltd. Mr. Lennartz has sufficient experience which is relevant to the style of the mineralisation and the type of deposit under consideration and to the activity to which he is undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Lennartz has consented to the inclusion of this information in the form and context in which it appears in this report.

Page 8 of 8

31 July 2012

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 Quarter ended (“current quarter”)
30 Jun 2012
Quarter ended (“current quarter”)
30 Jun 2012
Kentor Gold Limited
ABN
52 082 658 080
Consolidated statement of cash flows
30 Jun 2012
Cash flows related to operating activities
1.1
Receipts from product sales and related debtors
1.2
Payments for
(a)exploration and
evaluation
(b) development
(c) production
(d) administration
1.3
Dividends received
1.4
Interest and other items of a similar nature
received
1.5
Interest and other costs of finance paid
1.6
Income taxes paid
1.7
Other (provide details if material)
Foreign Exchange differences
Net Operating Cash Flows
Current Quarter
$A’000
Year to date
(6 months)
$A’000
(3,983)
(6,936)
(997)
-
46
-
-
-
-
(4,916)
(7,347)
(2,032)
-
77
-
-
-
-
(11,870) (14,218)
Cash flows related to investing activities
1.8
Payment for purchases of: (a)prospects
(b)equity investments
(c) purchase options
(c) other fixed assets
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
1.12
Other (provide details if material)
Net investing cash flows
1.13
Total operating and investing cash flows
(carried forward)
-
-
(6,651)
-
-
-
-
-
-
-
(10,306)
-
-
-
-
-
(6,651) (10,306)
(18,521) (24,524)
  • See chapter 19 for defined terms.

Appendix 5B Page 1

30/06/2012

Appendix 5B Mining exploration entity quarterly

1.13
Total operating and investing cash flows
(brought forward)
(18,521) (24,524)
Cash flows related to financing activities
1.14
Proceeds from issues of shares, options, etc.
1.15
Proceeds from sale of forfeited shares
1.16
Proceeds from borrowings
1.17
Repayment of borrowings
1.18
Dividends paid
1.19
Other (Capital raising costs)
Net financing cash flows
-
-
-
-
-
-
-
-
-
-
-
-
- -
Net increase (decrease) in cash held
1.20
Cash at beginning of quarter/year to date
1.21
Exchange rate adjustments to item 1.20
1.22
Cash at end of quarter
(18,521)
27,389
1,064
(24,524)
34,135
321
9,932 9,932

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23
1.24
Aggregate amount of payments to the parties included in item 1.2
Aggregate amount of loans to the parties included in item 1.10
Current Quarter
$A'000
244
-
1.25 Explanation necessaryfor an understandingof the transactions
Remuneration and expenses paid to executive and non-executive directors for the quarter.

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
reportingentityhas an interest
  • See chapter 19 for defined terms.

Appendix 5B Page 2

30/06/2012

Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1
Loan facilities
3.2
Credit standby arrangements
Amount available
$A’000
Amount used
$A’000
- -
- -

Estimated cash outflows for next quarter

4.1
Exploration and evaluation
4.2
Investment
4.3
Operations
4.4
Admin
4.5
Asset Disposal
4.6
Capital Raising (net of costs)
$A’000
2,269
7,275
3,094
1,760
(5,691)
(25,000)
Total (16,293)

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as Current Quarter Previous Quarter
shown in the consolidated statement of cash flows) to $A’000 $A’000
the related items in the accounts is as follows.
5.1
Cash on hand and at bank
8,361 26,565
5.2
Deposits at call*
1,571 824
5.3
Bank overdraft
5.4
Other (provide details)
Total: cash at end of quarter(item 1.22) 9,932 27,389

*Deposits at call includes $747,000 provided as security against environmental bonds.

Changes in interests in mining tenements

6.1
Interests in
mining tenements
relinquished,
reduced or lapsed
6.2
Interests in
mining tenements
acquired or
increased
Tenement reference Nature of interest
(note (2)
Interest at
beginning
ofquarter
Interest at end
of quarter
P51/2395 Gabanintha 100% Expired
  • See chapter 19 for defined terms.

Appendix 5B Page 3

30/06/2012

Appendix 5B Mining exploration entity quarterly

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
security (see note
3) (cents)
Amount paid up per
security (see 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
securities
7.4
Changes during
quarter
(a) Increases
through issues
(b) Decreases
through share
consolidation
106,209,874
7.5
+Convertible
debt securities
(description)
7.6
Changes during
quarter
(a) Increases
through issues
(b) Decreases
through
securities
matured,
converted
7.7
Options
(description and
conversion
factor)
7.8
Issued during
quarter
7.9
Expired during
quarter
5,781,769 Unlisted
Options
Exercise price Expiry date
3,074,842 800,000
1,300,000
25,000
800,000
25,000
25,000
24,842
25,000
25,000
25,000
1.04
1.08
1.13
1.165
1.369
1.561
1.579
1.583
1.874
1.899
28/05/2017
28/05/2017
19/07/2016
28/05/2017
19/07/2016
16/02/2017
01/02/2015
01/03/2017
16/02/2017
01/03/2017
(30,000) Unlisted Options
  • See chapter 19 for defined terms.

Appendix 5B Page 4

30/06/2012

Appendix 5B Mining exploration entity quarterly report

7.10
Decrease
through
consolidation
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 / ~~does not*~~ (delete one) give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 31/07/2012..............

( ~~Director~~ /Company secretary)

Print name: ...Kylie Anderson......................................................

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.

  • == == == == ==

  • See chapter 19 for defined terms.

Appendix 5B Page 5

30/06/2012