Forte Energy NL 31st January 2014 Quarterly Report - December 2013 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 4th Quarter to 31st December 2013 * Increased focus on identifying and reviewing value-adding transactions * Review of cost base completed leading to a reduction in overheads, including restructuring of corporate head office and relocation of Management * 40% reduction in Chairman and 50% reduction in Managing Director fees * c. $750,000 cost saving per annum successfully implemented * Second tranche of placement completed raising more than £700,000 (approximately A$1.2 million ) before costs. * Completion of sale of Millenium mining leases in Queensland for $100,000 * Forte Energy U3O8 JORC resources (all at a 100ppm cut-off): Project Resource Tonnage Grade Contained Category (Mt) (ppm U3O8) U3O8 Mlbs A238* Inferred 45.2 235 23.4 Bir En Nar Indicated 0.5 886 1.0 Inferred 0.8 575 1.0 Firawa Inferred 30.3 295 19.5 Indicated 0.5 886 1.0 Total Inferred 76.3 262 43.9 Total 76.8 266 44.9 * A238NW Anomaly included in the A238 Inferred Resources Progress Commenting on the quarter, Mark Reilly , Managing Director of Forte Energy, said: "Forte Energy continues to investigate potential corporate opportunities which may complement the Company's strategic positioning. With indications of improving sentiment in the uranium market; we believe that we are well positioned, with adequate financing facilities available, to take advantage of any suitable value-accretive opportunities as they arise." Corporate During the quarter, Forte Energy has continued to focus on reviewing external opportunities that may complement the Company's strategic direction. In consultation with the Company's largest shareholders, Management continues to explore a number of strategic opportunities that have become available in the current depressed uranium market and looks forward to updating shareholders on these as and when appropriate. The Board believes that this strategic shift from further exploration to corporate activity is in the best interests of all stakeholders, given the current market conditions, and it is pleased to have the full support of the Company's largest shareholders. In keeping with its previously announced strict cost control programme and optimisation of working capital, the Company has implemented a number of measures to reduce its ongoing costs. These include the significant reduction in overheads by rationalising Forte Energy's London presence through the closure of the corporate head office in the UK and the relocation of Management to Australia . In line with the Company's aggressive cost reduction efforts, Forte Energy's Chairman and Managing Director have both agreed to substantial reductions in their fees: 40% reduction for the Chairman and 50% reduction for the Managing Director, with effect from 1st July 2013 . Following a review of Forte Energy's Management team to ensure that its expertise is best suited to the Company's current requirements, Scott Yelland , the Chief Operating Officer, has left to pursue other opportunities. Mr Yelland is a mining engineer, and whilst his considerable experience has proved invaluable to date, the Company's temporary focus on external opportunities, rather than developing Forte Energy's resource in the current depressed uranium market, has meant that it has had to streamline its team. The expected annualised savings from all these cost reduction initiatives is approximately $750,000 . During the quarter the Company received $100,000 cash in settlement for the sale of its Millenium mining leases in Queensland to Element Minerals Australia Pty Ltd , a subsidiary of Elementos Limited (ASX: ELT). The transfer applications have been processed by the Queensland Department of Natural Resources and Mines. Following shareholder approval at the general meeting held on 31 October 2013 , the second tranche of the capital raising was completed raising a further £739,500 (approximately A$1.25 million ) before costs at 0.4 pence (approximately 0.7 cents ) per share. The Company has £9.4 million ( $17 million ) available under its £10 million Equity Financing Facility ("EFF") with Darwin Strategic Limited, a majority owned subsidiary of Henderson Global Investors' Volantis Capital. The two year convertible loan facility for up to US$1,000,000 with Dutchess Opportunity Cayman Fund, Ltd ("Dutchess") has been settled and terminated. Exploration Forte Energy is one of the largest uranium exploration licence holders in Mauritania , with ten 100%-owned licences, covering over 7,000 km≤ in the vicinity of Bir Moghrein in the North West, close to the border with Western Sahara . Forte Energy also holds four 100%-owned uranium exploration licences in Guinea , West Africa , covering two separate project areas. The Firawa project consists of two licences, totalling 286km2, which are located approximately 25km to the east of Kissidougou. The Bohoduo project consists of two licences, covering an area of 294km2, situated approximated 120km north east of Firawa. No significant exploration works were carried out in Mauritania or Guinea during the quarter with the Company focussing instead on corporate activities and preserving its capital. Forte Energy will continue to undertake low cost exploration and scoping related activities in relation to its Mauritanian and Guinean projects, including consolidation of the exploration results to date and high level consideration of priority areas to target for increasing its resource bases in what have been demonstrated to be well mineralised prospects. Despite the continued pressures evident in the worldwide uranium market, Forte Energy remains confident in the compelling medium to long term supply/demand fundamentals, which indicate a sizeable supply shortfall in coming years. We believe that Forte Energy's existing uranium assets and its potential to take advantage of external opportunities will position the Company well to capitalise on the strong long term fundamentals of the uranium market. Mark Reilly Managing Director For further information contact: Mark Reilly , Managing Director Forte Energy NL Tel: +61 (0) 8 9322 4071 Geoff Nash/Ben Thompson Tel: +44 (0) 207 220 0500 Elizabeth Johnson (broking) finnCap Bobby Morse / Cornelia Browne Buchanan Tel: +44 (0) 207 466 5000 Stuart Laing RFC Ambrian Ltd Tel: +61 (0) 8 9480 2506 (AIM Nominated Adviser to the Company) Forte Energy NL Suite 3, Level 3 1292 Hay Street West Perth WA 6005 Ph: +61 (0)8 9322 4071 Fax: +61 (0)8 9322 4073 Email: email@example.com Web: www.forteenergy.com.au INTERESTS IN MINING TENEMENTS Forte Energy held the following interests in mining tenements at the end of the quarter: LOCATION TENEMENT NAME/PROJECT TENEMENT INTEREST NUMBER Republic of Kankan (Bohoduo) XP 107 100% Guinea Kankan (Bohoduo) XP 129 100% Kissidougou (Firawa) XP 110 100% Kissidougou (Firawa) XP 130 100% Republic of Steilet Zednes XP 281 100% Mauritania D' Adem Essder XP 282 100% Rhall Amane XP 283 100% Tisram XP 284 100% Gleibat Ten Ebdar XP 285 100% Legleya XP 286 100% Hassi Baida XP 948 100% Ouissuat XP 949 100% Bir Ould Ben Nassar XP 1173 100% Nord Tmeimichat Rhall Amane XP 1588 100% NOTE: XP = Exploration Permit During the quarter the Company sold its 100% interests in the following mining tenements: LOCATION TENEMENT NAME/PROJECT TENEMENT INTEREST NUMBER Queensland, Rita Margaret ML 2512 0% Australia This Time Maybe l ML 2761 0% Federal ML 2762 0% Millennium #1 ML 7506 0% Millennium #2 ML 7507 0% NOTE: ML = Mining Lease There were no other tenements acquired or disposed of during the quarter and no changes in the beneficial interests held by the Company. 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 76.8Mt @ 266ppm U3O8for 44.9Mlbs 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 (19.5Mlb U3O8). Forte Energy U3O8 JORC resources (all at a 100ppm cut-off): Project Resource Category M tonnes ppm U3O8 Contained U3O8 Mlbs A238* Inferred 45.2 235 23.4 Bir En Nar Indicated 0.5 886 1.0 Inferred 0.8 575 1.0 Firawa Inferred 30.3 295 19.5 Total Indicated 0.5 886 1.0 Inferred 76.3 262 43.9 Total 76.8 266 44.9 * 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 the reporting of Mineral Resources is based on information compiled by Mr. Galen White , who is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM). Mr White is the Principal Geologist of CSA Global (UK) Ltd. CSA Global have an on-going role as geological consultants to Forte Energy NL . Mr. White 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'. The total JORC resources tabulated here are as at 6th of July 2012 . There has been no change, material or otherwise to the resource figures quoted here, since this date, and as such the resources remain reportable to JORC 2004 under which they were estimated. Any subsequent reporting of Exploration Results, Mineral Resources and Mineral Reserves to the market that represent a material change will be reported under JORC 2012, currently in force. Mr. White consents to the inclusion in this report of the matters based on his 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 December 2013 Current quarter Year to date Cash flows related to operating activities A$'000 (6 months) A$'000 1.1 Receipts from product sales and related debtors - - 1.2 Payments for (a) exploration and evaluation (501) (669) (b) development - - (c) production - - (d) administration (533) (931) 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) - - Net Operating Cash Flows (1,034) (1,600) Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects - - (b) equity investments - - (c) other fixed assets - - 1.9 Proceeds from sale of: (a) prospects 100 100 (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 100 100 1.13 Total operating and investing cash flows (934) (1,500) (carried forward) Consolidated statement of cash flows 1.13 Total operating and investing cash flows (934) (1,500) (brought forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1,073 1,436 1.15 Proceeds from sale of forfeited shares - - 1.16 Proceeds from borrowings 87 87 1.17 Repayment of borrowings - - 1.18 Dividends paid - - 1.19 Other - Settlement of Guarantee Net financing cash flows 1,160 1,523 Net increase (decrease) in cash held 226 23 1.20 Cash at beginning of quarter/year to date 77 280 1.21 Exchange rate adjustments to item 1.20 - - 1.22 Cash at end of quarter 303 303 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 130 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 '000 '000 3.1 Loan facilities - - 3.2 Credit standby arrangements GBP 10,000 GBP 587 See also Note 6 for details of Discretionary Equity Financing Facility Estimated cash outflows for next quarter $A'000 4.1 Exploration and evaluation 100 4.2 Development - 4.3 Production - 4.4 Administration 150 Total 250 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 303 77 5.2 Deposits at call - - 5.3 Bank overdraft - - 5.4 Other (provide details) - - Total: cash at end of quarter (item 1.22) 303 77 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 ML2512 Sale of Millenium 100% 0% tenements ML2761 mining leases in 100% 0% relinquished, ML2762 Queensland 100% 0% reduced or lapsed ML7506 100% 0% ML7507 100% 0% 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 rights together with prices and dates. Total number Number quoted Issue price Amount paid up 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 securities 1,246,495,311 1,246,495,311 2,250,000 - 25 1 7.4 Changes during quarter (a) Increases through issues Issue for cash 184,875,000 184,875,000 0.68 cents 0.68 cents (b) Decreases through returns of capital, buy- backs 7.5 +Convertible debt 0 securities (description) (refer to Appendix 3B dated 6 June 2013 ) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through (1) securities matured, converted 7.7 Options (description and Exercise Expiry date conversion factor) price 1,000,000 - 6 pence 1/09/2016 4,000,000 - 12.5 cents 14/04/2015 5,000,000 - 3 pence 14/02/2015 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: 31 January 2014. 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. 6 Discretionary Equity Financing Facility On 15 February 2013 the Company announced that it had entered into a £10 million ( $17 million ) discretionary equity financing facility with Darwin Strategic Limited, a majority owned subsidiary of Henderson Global Investors' Volantis Capital. Forte Energy is under no obligation to make a draw down and may make drawdowns at its discretion. Further details of the facility are available in the Company's announcement of 15 February 2013 . At the end of the quarter the Company has drawn down a total of approximately £587,000 ( $893,000 ), leaving £9.4 million ( $16 million ) available to the Company under the facility.
Most Popular Stories
- Obama Administration Releases Proposal to Regulate For-Profit Colleges
- Some California Cities Seeking Water Independence
- Apple, HP, Intel May Take a Hit from Slowdown in Smartphone Sales Growth
- Chinese e-Commerce Giant Alibaba Gears for IPO in U.S.
- FDIC Files Lawsuit on Behalf of Banks Allegedly Hurt by Libor Scandal
- Motley Crue's Nikki Sixx Marries Model Courtney Bingham
- Will Missing Malaysian Jet Prompt Aviation System Change?
- SoCalGas Reaches Record Spend on Diversity Suppliers
- Keurig Adds Peet's coffee, Alters Starbucks deal
- Obama Seeks to Stay Neutral in CIA-Senate Conflict