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ROX RESOURCES LIMITED Interim / Quarterly Report 2006
65741_rns_2006-07-30_4881d41f-95a1-4792-8256-58279dbf3003.pdf
Interim / Quarterly Report
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Quarterly Report
For the period ended 30 June 2006
HIGHLIGHTS
Pha Luang Project, Laos
- Discovery of lead-zinc sulphides at the Nam Yen prospect, with RC drill intercepts including 33 metres at $11.4%$ lead+zinc, 27 metres at $10.5%$ lead+zinc and 19 metres at 8.6% lead+zinc.
- A large secondary blanket of oxide mineralisation discovered at the Bon Noi prospect with up to 9 metres at 8.3% lead+zinc in drilling.
Corporate
Capital raising of $5.3 million completed at an average price of $0.40 per share.
PHA LUANG LEAD-ZINC PROJECT, LAOS
The quarter has been very successful, with the discovery of lead-zinc sulphide mineralisation in drilling at the Nam Yen prospect over an area of $200 \times 70$ metres, up to 30 metres thick, and importantly still open in all directions.
These drill results, together with the large number of other prospects still to be tested over the project area, leads Rox to believe that it has discovered a new district of Mississippi Valley Type (MVT) lead-zinc deposits. Such districts commonly contain many millions of tonnes of ore, with examples being the Lennard Shelf in NW Australia (40 Mt) and the Tennesee Valley in the USA (100 Mt).
The galena, sphalerite, pyrite and barite mineralisation in limestone breccias that has been discovered is typical of MVT deposits, with thick high-grade drill intercepts such as 33 metres grading 11.4% Pb+Zn, 19 g/t Ag indicating potential for large tonnages (Figures 1 $&$ 2). MVT deposits typically average between 7.5% and 8.5% Pb+Zn. Mineralisation is also relatively shallow and flat lying.
Rox has also defined five major soil anomalies greater than 2% Pb+Zn to date (Figure 3) and a further 12 known occurrences of outcropping mineralisation have yet to be mapped and soil sampled (Figure 4). Rock outcrops grade up to 50% Zn, 60% Pb and 480 g/t Ag, and Pb and Zn values in soils grade over 20% in places. Given the success of testing one of these soil anomalies at Nam Yen, the company's confidence in the project to host more sulphide deposits is well-founded.
By the end of June some 1,360 metres of RC drilling and 360 metres of diamond drilling had been completed at Nam Yen. Results of three recently completed diamond drill holes at Nam Yen (holes 39 - 41) are awaited, and these holes contained visible lead and zinc sulphides.
Drilling at the Bon Noi prospect discovered an extensive blanket of secondary Pb-Zn mineralisation. Intersections included 9 metres grading 6.9% Zn, 1.4% Pb and 25 g/t Ag in hole PLR034. Individual assays values at Bon Noi were recorded up to 3.8% Pb, 22.0% Zn and $73$ g/t Ag.
The high-grade soil anomalies can be displaced from their primary source because of the steep and incised terrain. This suggests that the initial RC drilling at Bon Noi is very proximal to the sulphide mineralisation source.
To the south of Bon Noi a new large 500 x 300 metre lead-zinc soil anomaly with high-grade mineralisation was delineated within the Switchback prospect. Values from soil samples taken from the Switchback anomaly were exceptionally high, ranging up to 5.5% Pb, 14.4% Zn and 71 ppm Ag. Recent drilling at Switchback (Figure 3) comprised two diamond holes and assays are awaited.
Figure 1: Nam Yen RC Drill Plan and Soil Contours
SOUTH AFRICA - DIAMONDS
The company has sought expressions of interest for the South African diamond projects.
CORPORATE
Dr Alistair Cowden, the Company's Chairman, recently announced his intention to focus on a full-time role as Managing Director of Vulcan Resources Limited and as a consequence will resign all other directorships.
A date for Dr Cowden's departure from the Rox Board has not yet been determined, however a suitable replacement is being sought and the Company is confident an orderly handover of the Chair will be achieved.
FINANCIAL
After completion of the second tranche of the recent share placement in early July, Rox will have 56,357,333 shares and 12,550,000 unlisted options on issue together with cash of $5.7 million. Settlement of the $1.2 million Menzies project sale is expected during August 2006.
Dated this 31st day of July 2006.
Signed on behalf of the Board of Rox Resources Limited.
Mulholland
IAN MULHOLLAND Managing Director
FOR FURTHER INFORMATION CONTACT:
Ian Mulholland, Managing Director Tel: (08) 9486 4537
The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Ian Mulholland BSc (Hons), MSc, FAusIMM, FAIG, FSEG, who is a Fellow of The Australasian Institute of Mining and Metallurgy and a Fellow of the Australian Institute of Geoscientists. Mr Mulholland 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 Mulholland is a full time employee of the Company and consents to the inclusion in the report of the matters based on his information in the form and context in which if appears.
Figure 2: Nam Yen RC Drill Cross Section
Figure 3: Pha Luang Project, showing soil anomalies at Bon Noi, Switchback, Pha Luang 1, Nam Yen and Pha Daeng
| HOLENUMBER | FROM | TО | INTERVAL | Pb % | $Zn%$ | Ag ppm | Pb+Zn %* |
|---|---|---|---|---|---|---|---|
| PLR008 | $\mathbf 0$ | $\overline{4}$ | 4 | 20.9 | 5.3 | 23 | 26.2 |
| PLR009 | 4 | 16 | $12,$ | 4.7 | 3.6 | 9.4 | 8.3 |
| incl. | 4 | 10 | 6 | 6.4 | 5.2 | 11 | 11.6 |
| PLR010 | 10 | 24 | $14,$ | 4.0 | 2.6 | 9.9 | 6.6 |
| incl. | 16 | 24 | 8 | 5.6 | 3.1 | 14 | 8.7 |
| PLR011 | NSR | ||||||
| PLR012 | 23 | 25 | $\overline{c}$ | 0.04 | 3.2 | 4.8 | 3.3 |
| PLR013 | $_{\rm NSR}$ | ||||||
| PLR014 | NSR | ||||||
| PLR015 | $\overline{4}$ | 37 | 33 | 8.7 | $2.7,$ | 19 | 11.4 |
| incl. | ${\bf 10}$ | 35 | 25 | 11.0 | 3.1 | $2\sqrt{4}$ | 14.1 |
| PLR016 | 3 | 30 | 27 | 7.3 | 3.2 | 23 | 10.5 |
| $\rm PLR017$ | 7 | 15 | 8 | 2.6 | 2.2 | 6 | $4.8,$ |
| incl. | 10 | 15 | 5 | 3.5 | 2.8 | 8 | 6.3 |
| 31 | 34 | 3 | $1.3,$ | 1.9 | 5 | 3.2 | |
| PLR018 | 39 | 41 | $\overline{c}$ | $2.8,$ | $0.5,$ | 13 | 3.3 |
| 69 | 73 | 4 | 2.4 | 1.9 | 10 | 4.3 | |
| 80 | 84 | 4 | $1.7,$ | 1.6 | 9 | 3.3 | |
| PLR019 | 26 | 26 | $\overline{2}$ | 2.0 | 3.6 | $\bar{2}$ | 5.6 |
| PLR020 | 12 | 14 | $\overline{c}$ | $1.5,$ | 5.1 | 19 | 6.6 |
| 19 | 32 | 13 | 2.0 | $2.4,$ | 13 | 4.4 | |
| PLR021 | 8 | 17 | 9 | 2.2 | 2.7 | 8 | 4.9 |
| incl. | 9 | 14 | 5 | 3.2 | 3.7 | 11 | 6.9 |
| 39 | 42 | 3 | $1.5,$ | $2.5,$ | 9 | 4.0 | |
| PLR022** | 17 | 19 | $\overline{2}$ | $1.7,$ | 3.0 | 8 | 4.7 |
| PLR023 | 46 | 49 | 3 | 3.3 | $3.5,$ | 20 | 6.8 |
| 55 | 60# | 5 | 2.9 | 4.9 | $\pmb{17}$ | 7.8 | |
| PLR024 | 19 | 28 | 9 | 3.8 | $2.0,$ | 26 | 5.8 |
| PLR025 | 17 | 36 | 19 | 4.8 | $3.8,$ | 36 | 8.6 |
| 39 | 41 | $\overline{2}$ | 4.9 | 4.7 | 32 | 9.6 | |
| PLR026 | $31,$ | 42 | 11 | $1.5,$ | 3.1 | $10,$ | 4.6 |
Nam Yen Drill Results
* Above 3% Pb+Zn cut-off** Hole abandoned at 21m# End of hole
| HOLENUMBER | FROM | TO. | INTERVAL | $Pb%$ | $\mathbb{Z}$ n % | Ag $g/t$ | $Pb+Zn$ % |
|---|---|---|---|---|---|---|---|
| PLR027 | $\Omega$ | 4 | 4 | 1.7 | 3.7 | 13 | 5.4 |
| PLR028 | No Significant Results | ||||||
| PLR029 | $2^{\star}$ | 4 | 2 | 3.6 | 2.2 | 61 | 5.8 |
| 14 | 16 | $\overline{2}$ | 0.7 | 2.6 | 20 | 3.3 | |
| 21 | 24 | 3 | 0.6 | 2.3 | 14 | 2.9 | |
| PLR030 | $2^*$ | 6 | 4 | 2.5 | 1.6 | 4 | 4.1 |
| PLR031 | No Significant Results | ||||||
| PLR032 | No Significant Results | ||||||
| PLR033 | No Significant Results | ||||||
| PLR034 | 3. | 12 | 9 | 1.4 | 6.9 | 25 | 8.3 |
| PLR035 | No Significant Results | ||||||
| PLR036 | No Significant Results |
Bon Noi RC Drilling Results
Above 3% Pb+Zn cut-off *Interval 0-2m not sampled.
Figure 4: Pha Luang Project, Prospect Locations
APPENDIX 5B
Mining Exploration Entity Quarterly Report
Name of entity
ROX RESOURCES LIMITED
$\rm{ACN}$ or $\rm{ARBN}$
107 202 602
Quarter ended ("current quarter") June 2006
Consolidated statement of cash flows
| Cash flows related to operating activities | CurrentQuarterA$'000 | Year to Date$(12$ months)$A'000 |
|---|---|---|
| 1.1Receipts from product sales and related debtors | ||
| Payments for: (a) exploration and evaluation1.2 | (419) | (1,511) |
| (b) development | ||
| (c) production | ||
| (d) administration | (279) | (843) |
| Dividends received1.3 | ||
| Interest and other items of a similar nature1.4 | 26 | 89 |
| received | ||
| 1.5Interest and other costs of finance paid | ||
| 1.6Income taxes paid | ||
| 1.7Other - Security bonds | ||
| Net Operating Cash Flows | (672) | (2,265) |
| Cash flows related to investing activities | ||
| Payment for purchases of:1.8 | ||
| (a) prospects | ||
| (b) equity investments | ||
| other fixed assets(c) | (3) | (3) |
| Proceeds from sale of:1.9(a) prospects | ||
| (b) equity investments | ||
| other fixed assets(c) | ||
| 1.10 Loans to other entities | ||
| 1.11 Loans repaid by other entities | ||
| 1.12 Other | ||
| Net investing cash flows | (3) | (3) |
| 1.13 Total operating and investing cash flows (carried | ||
| forward) | (675) | (2,268) |
| 1.13 Total operating and investing cashflows | ||
|---|---|---|
| (brought forward) | (675) | (2,268) |
| Cash flows related to financing activities | ||
| 1.14 Proceeds from issues of shares (net of costs) | 3,736 | 4,671 |
| 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 | ||
| Net financing cash flows | 3,736 | 4,671 |
| Net increase (decrease) in cash held | 3,061 | 2,403 |
| 1.20 Cash at beginning of quarter/year to date | 1,233 | 1.891 |
| 1.21 Exchange rate adjustments to 1.20 | ||
| 1.22 Cash at end of quarter | 4.294 | 4.294 |
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 |
| 85 |
- 1.23 Aggregate amount of payments to the parties included in 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
$N/A$
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
$Nil$
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
$NiI$
Financing facilities available
Add notes as necessary for an understanding of the position.
| Amount available$A'000 | Amount used$A'000 | |
|---|---|---|
| 3.1 Loan facilities | $\overline{ }$ | |
| 3.2 Credit standby arrangements |
Estimated cash outflows for next quarter
| $A'000 | ||
|---|---|---|
| -4.1 | Exploration and evaluation | 414 |
| 4.2 | Development | $\blacksquare$ |
| Total | 414 |
Reconciliation Of Cash
| Reconciliation of cash at the end of the quarter (asshown in the consolidated statement of cash flows) tothe related items in the accounts is as follows. | Currentquarter$A'000 | Previousquarter$A'000 | |
|---|---|---|---|
| 5.1 | Cash on hand and at bank | 3,378 | 328. |
| 5.2 | Deposits at call | 916 | 905 |
| 53 | Bank overdraft | ||
| 5.4 | Other (provide details) | $\overline{\phantom{a}}$ | |
| Total: cash at end of quarter (item 1.22) | 4.294 | 1,233 |
Changes in interests in mining tenements
No changes during the quarter. See attached Schedule A for list of tenements.
| Total number | Numberquoted | Issue price persecurity (cents) | Amount paid upper security(cents) | ||
|---|---|---|---|---|---|
| 7.1 Preferencesecurities(description) | |||||
| 7.2 Changes duringquarter | |||||
| 7.3 Ordinarysecurities | 49,442,000 | 49,442,000 | |||
| 7.4 Changes duringquarter- Issued | 6,400,000 | 6,400,000 | $0.45 | $0.45 | |
| 7.5 Convertible debtsecurities(description andconversion factor) | |||||
| 7.6 Changes duringquarter | |||||
| 7.7 | Options | Exercise Price | Expires | ||
| (description andconversion factor) | 5,250,000 | Nil | $0.20 | 31 January 2009 | |
| 800,000 | Nil | $0.20 | 30 April 2007 | ||
| 4,000,000 | Nil | $0.20 | 30 June 2007 | ||
| 7.8 Issued duringquarter | |||||
| 7.9 Exercised duringquarter | |||||
| 7.10 Expired duringquarter | |||||
| 7.11 Debentures(totals only) | |||||
| 7.12 Unsecured notes(totals only) |
Issued and quoted securities at end of current quarter
Compliance statement
- This statement has been prepared under accounting policies which comply with $1.$ accounting standards as defined in the Corporations Law or other standards acceptable to ASX.
- $\overline{2}$ . This statement does give a true and fair view of the matters disclosed.
Sign here:
.Eventoj
Date: 31 July 2006
Company Secretary
Print Name: Brett Dickson
SCHEDULE A
Interests in mining tenements relinquished, reduced or lapsed during the quarter
$Nil$
| Tenement Reference | Nature of Interest | Interest at beginningof quarter | Interest at end ofquarter |
|---|---|---|---|
| M29/14 | Owned | 100% | 100% |
| M29/88 | Owned | 100% | 100% |
| M29/153 | Owned | 100% | 100% |
| M29/154 | Owned | 100% | 100% |
| M29/184 | Owned | 100% | 100% |
| M29/212 | Owned | 100% | 100% |
| MLA29/223 | Owned | 100% | 100% |
| MLA29/225 | Owned | 100% | 100% |
| L29/41 | Owned | 100% | 100% |
| L29/42 | Owned | 100% | 100% |
| L29/43 | Owned | 100% | 100% |
| L29/44 | Owned | 100% | 100% |
| L29/58 | Owned | 100% | 100% |
Interests in mining tenements held
Glossary
- Mining Lease $\overline{\rm M}$
- Mining Lease ApplicationMiscellaneous Licence $\rm MLA$
- $\mathbf{L}$