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Quarterly Activities &;; Cashflow Report March 2012


Published on 2012-04-30 23:41:13 - Market Wire
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May 01, 2012 02:00 ET

Quarterly Activities & Cashflow Report March 2012

 Forte Energy NL ACN 009 087 852 30th April 2012 Quarterly Report - March 2012 Forte Energy NL ("Forte Energy" or "the Company") (ASX/AIM: FTE) is an emerging international uranium company focused on the exploration and development of a portfolio of uranium assets in the Republics of Mauritania and Guinea, West Africa. Highlights of 1st Quarter to 31 March 2012 Overview * JORC compliant resources increased by 30% during the quarter - from 28.5Mlbs U308 to 37Mlbs * Further assay results and resource upgrade from assets in Guinea still to come * Over 13,300m of exploration holes drilled during the quarter Uranium Exploration - Mauritania (West Africa) * A238 Inferred Resource increased to 23.4Mlbs from 14.9Mlbs at a cut-off grade of 100ppm U308 * A238NW anomaly located 800m to the north west of the A238 Main zone included in the resource and has added over 1.4Mlbs of uranium * A238 remains open at depth and along strike and is currently undergoing further drilling * Forte Energy's JORC compliant Resource Statement for A238 as at 5th April 2012 (100ppm U308 cut- off) --------------------------------------------------------------------------------- Area Resource Tonnage Grade Contained U3O8 Category (Mt) (ppm U3O8) (Mlbs) --------------------------------------------------------------------------------- A238 Prospect Inferred 42.8 233 22.0 --------------------------------------------------------------------------------- A238NW Inferred 2.4 266 1.4 --------------------------------------------------------------------------------- A238 Total Inferred 45.2 235 23.4 --------------------------------------------------------------------------------- Uranium Exploration - Guinea (West Africa) * The Firawa drilling programme completed in February comprised 63 holes totalling 4,712m of which 38 holes have been assayed. * Notable intersections include: - FRW 200: 32m @ 359ppm U308 and 11m @ 246ppm U308 - FRW 201: 17m @ 364ppm U308 - FRW 203: 9m @ 402ppm U308 - FRW 216: 16m @ 628ppm U308 - FRW 217: 18m @ 334ppm U308 * A follow-up programme of RC drilling at Bohoduo consisting of 17 holes totalling 1,277m was completed in February. The holes were drilled over a strike length of 8km and 9 of the holes have identified mineralisation from surface down to 80m, with assay results expected in May. Corporate On 26 April the Company announced the appointment of Mr James Leahy to the Board as a Non-Executive Director. Mr. Leahy has more than 26 years experience in the mining sector as a senior mining analyst and as a specialist corporate broker with expertise in international institutional and hedge funds, foreign capital and private equity markets. Progress Commenting on the quarter Mark Reilly, Managing Director of Forte Energy, said: "The first quarter has been another period of excellent progress for Forte Energy, with a substantial increase in its Mauritanian uranium resources. The Company looks forward to further advances this quarter with the remaining assays from Guinea and a revised JORC resource calculation expected for its Firawa project. With over 37Mlbs of U308 identified to date, the Company is also making progress on the next stage of monetising this growing resource base". Republic of Mauritania, West Africa To view Figure 1: Mauritania Licences and Resources, please open the following link in a new window: [ http://media3.marketwire.com/docs/forte_ukreg_0501_fig1.pdf ] Following the completion of the first phase of the RC drilling programme at the A238 prospect and NW anomaly and the receipt of chemical assay results from 33 holes and gamma survey results for 6 holes, CSA Global (UK) Ltd (CSA) have completed a JORC compliant resource update. Table 1: A238 JORC Compliant Resource Statement (April 2012) --------------------------------------------------------------------------------------- Area Resource Tonnage Grade Contained U3O8 Category (Mt) (ppm U3O8) (Mlbs) --------------------------------------------------------------------------------------- A238 Prospect Inferred 42.8 233 22.0 --------------------------------------------------------------------------------------- A238NW Inferred 2.4 266 1.4 --------------------------------------------------------------------------------------- A238 Total Inferred 45.2 235 23.4 --------------------------------------------------------------------------------------- Note: Figures have been rounded and are stated at a100ppm U308 cut off. To view Figure 2: A238 and NW Holes used in resource compilation, please open the following link in a new window: [ http://media3.marketwire.com/docs/forte_ukreg_0501_fig2.pdf ] The resource model has identified a main zone of mineralisation over a strike length of 1.75km with mineralisation extending down to over 250m from surface with widths of over 60m within 50m of the surface. The latest model indicates a significant increase in the total tonnes of ore of over 18.7Mt; however the grades have dropped from an average grade of 256ppm U3O8 to 233ppm U3O8. The slight drop in grade is due to: a) Additional resource tonnage incorporated into the model from northerly extensions of the main zone. Drilling results from this area have returned lower grades than those within the main zone; b) Refinement of the geological model which forms the basis for interpreting the geometry of mineralised zones. In 2011 near vertical mineralised zones of mixed higher and lower grades were interpreted. In 2012 a refined interpretation of shallow dipping higher grade zones has constrained higher grade data which has resulted in a lowering of grade within the resource volume that falls outside of these zones and which makes up a significant proportion of the resource volume. The Company believes the refined interpretation is more robust than that used in 2011 and additional drilling will target extensions to these higher-grade zones. The latest interpretation suggests both sub-vertical shear related mineralisation, together with possible high grade mineralisation controlled by 20-350 west dipping zones developed between the sub parallel bounding structures (See Figure 3). Grade interpretation and limited surficial structural data also suggest rolling to shallow northerly plunging shoots and lenses of uranium mineralisation over a strike length of 1.5km in the main zone (See Figure 4). This mineralisation is open, particularly to the south where thin alluvial cover has masked any radiometric surface expression. To view Figure 3: A238 Main Zone - Section L52, please open the following link in a new window: [ http://media3.marketwire.com/docs/forte_ukreg_0501_fig3.pdf ] To view Figure 4: A238 Main Zone Long Section, please open the following link in a new window: [ http://media3.marketwire.com/docs/forte_ukreg_0501_fig4.pdf ] From a mining perspective the high grade wide sections near to surface over a strike length of 1.75km is likely to result in low strip ratios in the early stages of a mining operation. The model has identified that 46% of the inferred mineral resources in the main zone are between surface and 150m vertical depth. In addition to the A238 main zone, the April resource model also includes the A238NW anomaly, which was a small surface outcrop situated 800m to the North West of A238. A total of 21 holes were drilled in the 238NW anomaly of which 16 holes were sampled and assayed. The results indicate a zone of mineralisation trending north west - south east shallow dipping to the west from surface down to over 150m in depth. Interpretation of the resource model has identified a number of areas in the main zone where the recent drilling programme has not been drilled deep enough to intersect the north plunging shoots of uranium mineralisation. A small campaign is now being planned to drill these areas in May. The current drilling at site is concentrated on the area between the main zone and the North West anomaly and will then switch to the south of the main zone testing the potential extensions of the mineralisation to the south under the thin alluvial cover. In addition to the A238 deposit, preliminary exploration work by Forte Energy has identified numerous other prospects on its extensive Mauritanian tenement package that covers the main regional shear zones that Forte Energy believes are prospective for mineralisation. These other prospects are being prioritised for follow up exploration and drill testing to assess their resource potential. Environmental base line and social impact studies have been completed on the 286 Leglaya licence, which covers the A238 prospect, by Mauritanian Consulting and Contracting, which will provide the basis for the pre-feasibility studies. ANSTO Minerals, Sydney, Australia are currently conducting a number of standard leach tests, supported by mineralogical examination to determine the conditions required to extract uranium from the A238 prospect. Republic of Guinea, West Africa To view Figure 5: Guinea Licences, please open the following link in a new window: [ http://media3.marketwire.com/docs/forte_ukreg_0501_fig5.pdf ] Firawa The RC drilling program at the Firawa Project was completed in February with a total of 63 holes drilled, totalling 4,712m. The programme included 14 holes in the central section, which had not been accessible previously, 24 holes to the east and 25 holes to the west to test the potential extensions along strike. To view Figure 6: Firawa RC Drill hole locations, please open the following link in a new window: [ http://media3.marketwire.com/docs/forte_ukreg_0501_fig6.pdf ] Assay results have been received from the first 16 holes drilled, predominantly in the central area and are summarised below in table 1. Table 2: Summary of Firawa Assay Results -------------------------------------------------------------------------------------------------------- Hole Id East North Inclination From To Interval Average WGS84 WGS84 (Degrees) (m) (m) (m) U308 (ppm) -------------------------------------------------------------------------------------------------------- FRW200 411450 1017880 50 14 26 1 485 27 28 1 265 30 31 1 248 36 68 32 359 70 83 13 347 88 89 1 262 -------------------------------------------------------------------------------------------------------- FRW201 411550 1017910 50 10 11 1 207 12 13 1 245 14 15 1 202 17 34 17 364 76 78 2 265 80 81 1 254 -------------------------------------------------------------------------------------------------------- FRW202 411600 1017950 50 10 11 1 247 13 14 1 316 26 34 8 585 48 50 2 332 60 62 2 413 71 75 4 445 83 84 1 265 89 92 3 419 -------------------------------------------------------------------------------------------------------- FRW203 411700 1017975 50 26 27 1 255 29 38 9 402 58 61 3 346 62 63 1 331 -------------------------------------------------------------------------------------------------------- FRW204 411800 1018025 50 48 54 6 292 56 57 1 322 -------------------------------------------------------------------------------------------------------- FRW205 411900 1018025 7 8 1 205 121 127 6 480 -------------------------------------------------------------------------------------------------------- FRW207 412310 1018000 50 35 36 1 461 59 60 1 206 -------------------------------------------------------------------------------------------------------- FRW209 412200 1018060 50 26 27 1 213 51 52 1 250 54 55 1 203 58 59 1 236 -------------------------------------------------------------------------------------------------------- FRW213 413700 1018150 50 5 13 8 347 -------------------------------------------------------------------------------------------------------- FRW216 411600 1017955 80 32 37 5 357 41 42 1 461 43 46 3 461 47 49 2 322 51 52 1 221 62 78 16 628 79 80 1 232 81 83 2 303 -------------------------------------------------------------------------------------------------------- FRW217 411550 1017930 50 26 44 18 334 -------------------------------------------------------------------------------------------------------- The assay results from the 8 holes drilled in the central area have confirmed the continuity of the mineralisation over 1km. The two holes FFW 202 and 203 have both confirmed mineralisation to the north east of the central area with intermittent mineralisation from 10m below surface down to 92m. Encouraging assay results were found in hole FRW 213, approximately 1.5km to the east of the central area, where mineralisation was identified from 5m below surface down to 13m, grading 8m at 347ppm U308. Further assay results are expected in May from the remaining 22 sampled holes at Firawa and the 9 sampled holes at Bohoduo. During this period CSA Global consultants will be upgrading the Firawa resource model and are scheduled to complete the revised JORC resource calculation by the end of the second quarter. The current resource at Firawa is 17.7Mt @ 296ppm U3O8 for 11.6Mlbs contained U3O8 (100ppm cut off). Bohoduo The Company has two licences covering an area of over 338km2 at Bohoduo, which is situated approximately 120km north east of Firawa. The results of the field studies, conducted by the Company, coupled with the airborne geophysical data, indicate a 12 km long extension of the anomaly to the east. To view Figure 7: Bohoduo RC Drill hole locations, please open the following link in a new window: [ http://media3.marketwire.com/docs/forte_ukreg_0501_fig7.pdf ] The Company completed 17 RC holes at Bohoduo totalling 1,277m over a strike length of 8km. This follows up the initial core drilling programme of 15 holes in 2008. A total of 9 holes in the current programme intersected mineralisation from surface down to 80m, with the mineralisation confirmed by elevated scintillometer readings on the RC chip samples. Of significant interest is the area immediately to the east of the previous drilling where mineralisation was identified in 9 holes, with RC 030 intersecting mineralisation from surface down to 120m. This extends the previously identified mineralised zone to over 3 km strike length. Corporate On 26 April the Company announced the appointment of Mr James Leahy to the Board as a Non-Executive Director. Mr. Leahy has more than 26 years experience in the mining sector as a senior mining analyst and as a specialist corporate broker with expertise in international institutional and hedge funds, foreign capital and private equity markets. As a founding partner of the natural resources team at Mirabaud Securities, one of the leading UK based stockbroking firms, Mr. Leahy has advised a number of natural resource focused funds in the UK, raised more than US$2 billion in equity for resource companies and participated in over 30 IPO's. The Company also advised that Lady Barbara Judge and Mr. Bosse Gustafsson have resigned from their positions as directors. They will continue to be involved with the Company as external consultants. The Company is grateful for the significant contributions they have provided over the years and look forward to continuing to receive their valuable advice going forward. Mark Reilly Managing Director For further information contact: Mark Reilly, Managing Director Forte Energy NL Tel: +44 (0) 203 3849555 Rob Collins/Tarica Mpinga Canaccord Genuity Limited Tel: +44 (0) 207 050 6500 Bobby Morse/Louise Hadcocks Buchanan Tel: +44 (0) 207 466 5000 Stuart Laing RFC Corporate Finance Ltd Tel: +61 (0) 8 9480 2506 (AIM Nominated Adviser to the Company) Forte Energy NL Australia United Kingdom Suite 3, Level 3 3C Princes House 1292 Hay Street 38 Jermyn Street West Perth WA 6005 London SW1Y6DN Ph: +61 (0)8 9322 4071 Ph: +44 (0)203 3847474 Fax: +61 (0)8 9322 4073 Fax: +44 (0)207 2878387 Email: [ info@forteenergy.com.au ] Email: [ info@forteenergy.co.uk ] Web: [ www.forteenergy.com.au ] About Forte Energy Forte Energy is an Australian-based minerals company focused on the exploration and development of uranium and associated bi-products in Mauritania and Guinea in West Africa. The Company has an extensive pipeline of assets and total JORC resources of 64.2Mt @ 262ppm U3O8for 37.0Mlbs contained U3O8 (100ppm cut-off). Its flagship assets are the A238 prospect (23.4Mlbs U3O8) and the Bir En Nar project (2.06Mlbs U3O8) in Mauritania, and the Firawa project in Guinea (11.6Mlb U3O8). Forte Energy U3O8 JORC resources (all at a 100ppm cut-off): --------------------------------------------------------------------------------- Project Resource M tonnes ppm U3O8 Contained Category U3O8 Mlbs --------------------------------------------------------------------------------- A238* Inferred 45.2 235 23.4 --------------------------------------------------------- Total 45.2 235 23.4 --------------------------------------------------------------------------------- Bir En Nar Indicated 0.55 886 1.0 --------------------------------------------------------- Inferred 0.78 575 1.0 --------------------------------------------------------- Total 1.33 704 2.0 --------------------------------------------------------------------------------- Firawa Inferred 17.7 296 11.6 --------------------------------------------------------- Total 17.7 296 11.6 --------------------------------------------------------------------------------- Total Indicated 0.5 886 1.0 --------------------------------------------------------- Inferred 63.7 256 36.0 --------------------------------------------------------- Total 64.2 262 37.0 --------------------------------------------------------------------------------- * A238NW Anomaly included in the A238 Inferred Resources Forte Energy's strategy is to target high grade uranium ore bodies and build a low cost West African- focused uranium producer. The Company is quoted on the Australian Stock Exchange (ASX: FTE) and AIM market of the London Stock Exchange (AIM: FTE). For more information, visit [ www.forteenergy.com.au ] Note: The information in this report that relates to Exploration Results is based on information compiled by Mr. Bosse Gustafsson, who is a Member of the European Federation of Geologists, a 'Recognised Overseas Professional Organisation' ('ROPO') included in a list promulgated by the ASX from time to time. Mr Gustafsson is a full time Technical Director of Forte Energy NL and is responsible for exploration activities in Mauritania and Guinea. Mr. Gustafsson 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. Gustafsson consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. The information in this report that relates to the Mineral Resource at the A238 prospect in Mauritania is based on information compiled by Mr. Bosse Gustafsson of Forte Energy NL and Mr Galen White BSc (Hons) FGS, FAUSIMM, Principal Geologist of CSA Global Inc (UK). The information in this report that relates to the Mineral Resource at Bir En Nar in Mauritania is based on information compiled by Mr. Bosse Gustafsson of Forte Energy NL and Mr. Neil Inwood of Coffey Mining Ltd. Neil Inwood is the Competent Person responsible for the resource estimation and classification. Mr Inwood is a Fellow of the AusIMM. As Mr Inwood is now no longer employed by Coffey Mining, Coffey Mining has reviewed this information release and consent to the inclusion, form and context of the relevant information herein as derived from the original resource reports for which Mr Inwood's consent has previously been given. The information in this report that relates to the Mineral Resource at Firawa in Guinea is based on information compiled by Mr. Bosse Gustafsson of Forte Energy NL and Mr. Doug Corley BSc (Hons) MAIG, R.P. Geo (Mining) of Coffey Mining Ltd. Mr. Gustafsson, Mr. Corley, Mr. Inwood and Mr. White have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they have undertaken 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. Gustafsson, Mr. Corley and Mr. White consent to the inclusion in this report of the matters based on their information in the form and context in which it appears. Appendix 5B Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10. Name of entity FORTE ENERGY NL ABN Quarter ended ("current quarter") 59 009 087 852 31 March 2012 Current quarter Year to date Cash flows related to operating activities A$'000 (9 months) A$'000 1.1 Receipts from product sales and related debtors - - 1.2 Payments for (a) exploration and evaluation (2,248) (5,004) (b) development - - (c) production - - (d) administration (458) (1,979) 1.3 Dividends received - - 1.4 Interest and other items of a similar nature received 55 422 1.5 Interest and other costs of finance paid - - 1.6 Income taxes paid - - 1.7 Other (provide details if material) - - Net Operating Cash Flows (2,651) (6,561) Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects - - (b) equity investments - - (c) other fixed assets (2) (28) 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 (2) (28) 1.13 Total operating and investing cash flows (2,653) (6,589) (carried forward) Consolidated statement of cash flows 1.13 Total operating and investing cash flows (2,653) (6,589) (brought forward) 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 - Settlement of Guarantee Net financing cash flows - - Net increase (decrease) in cash held (2,653) (6,589) 1.20 Cash at beginning of quarter/year to date 4,782 8,717 1.21 Exchange rate adjustments to item 1.20 (1) - 1.22 Cash at end of quarter 2,128 2,128 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 Aggregate amount of payments to the parties included in item 208 1.2 Aggregate amount of loans to the parties included in item 1.10 0 Explanation necessary for an understanding of the transactions Salaries and rental of office premises 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 Nil 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 Nil N/A 3.2 Credit standby arrangements Nil N/A Estimated cash outflows for next quarter $A'000 4.1 Exploration and evaluation 900 4.2 Development - 4.3 Production - 4.4 Administration 450 Total 1,350 Reconciliation of cash Reconciliation of cash at the end of the quarter Current quarter Previous quarter (as shown in the consolidated statement of cash $A'000 $A'000 flows) to the related items in the accounts is as follows. 5.1 Cash on hand and at bank 628 1,782 5.2 Deposits at call 1,500 3,000 5.3 Bank overdraft - - 5.4 Other (provide details) - - Total: cash at end of quarter (item 1.22) 2,128 4,782 Changes in interests in mining tenements Tenement Nature of interest Interest at Interest at reference (note (2)) beginning of end of quarter quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining 1588 Uranium exploration 0% 100% tenements acquired permit covering 1000 or increased km2 in the Republic of Mauritania 1173 Uranium exploration 0% 100% permit covering 375 km2 in the Republic of Mauritania 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 Amount per security paid up (see note 3) per (cents) 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 695,589,311 695,589,311 2,250,000 - 25 1 7.4 Changes during quarter (a) Increases through issues Issue for cash (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 (description and Exercise Expiry conversion factor) price date 5,000,000 - 11.0 cents 21/12/12 3,000,000 - 10.0 cents 17/12/13 6,000,000 - 20.0 cents 23/12/12 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during 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 with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4). 2 This statement does give a true and fair view of the matters disclosed. Sign here: Date: 30 April 2012. Company Secretary Print name: Murray Wylie 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. 


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