REPORT FOR DECEMBER 2005 QUARTER

Transcription

1 G V M M E T A L S L I M I T E D ABN Level 1, Old Swan Brewery, 173 Mounts Bay Road, Perth WA 6000 Australia Telephone: Facsimile: Website: REPORT FOR DECEMBER 2005 QUARTER Highlights Shares commenced trading on the Alternative Investment Market ( AIM ) of the London Stock Exchange on 16 December 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. 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 Results Nimag Group of Companies (GVM-74% with option to acquire balance by share issue) The Nimag Group s ly profit before interest and tax increased by 18% compared to the September 05 despite the continued strong performance of the Rand. The nickel magnesium business continued to outperform its budget, whilst both the smaller FeSi Mag and Fibres businesses turned the corner and reported profits compared to losses during the September 05. The trading business performed below expectations due to delays in the commissioning of the Malawi Rutile and Zircon project. Commercial production of Zircon commenced at the end of the and rutile is expected to commence in the current. Nimag traditionally earns about 60% of its annual profits during the second half of its financial year. The inexplicably strong performance of the Rand continues to adversely affect trading. However, this effect is off-set by the high nickel price and the outlook for the rest of the year remains positive. During the, debt levels were reduced significantly, which included a reduction in trade creditors totalling $A1.45m and the repayment A$650,000 of long term loans. Provisional tax paid during the amounted to A$146,000 Page 1 of 2

2 SA Mineral Resources Corporation ( Samroc ) - GVM-30.19% The company was severely affected by the absence of orders from its major customer during the first and second s of the year. The company commenced operating at normal levels during January 2006 and is expected to be cash flow positive during the remainder of the year. GVM recently announced its intention to dispose of the Samroc investment. It is anticipated that the disposal will realise approximately A$750,000. Holfontein Coal Project GVM 49% The project is estimated to contain an indicated resource of 56 million tons following a scoping study. The study was based on mining of 140,000 tons per month yielding 870,000 tons of steaming coal and 420,000 tons of coking coal per annum. At current prices this equates to annual revenue of A$40million. The Project shows an IRR of 41% and GVM s 49% interest has a NPV of A$19million using a 10% real discount rate (nominal 16%) and a Rand/A$ exchange rate of 5:1. The bankable feasibility study will commence once the new mining titles are issued. This is expected during the forthcoming. 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 to earn a 60% interest by spending $2 million in direct drilling costs over five years. Results of diamond drill holes GVD137 and GVD140, drilled last, were received. Hole GVD137 returned a downhole intersection of 4.7g/t Au (1/2 core, 1m intervals, 50g aliquot, fire assay/aas analysis) from 123m. The mineralisation is characterised as a zone of silica-arsenopyrite-pyrite veins in bleached sericitecarbonate altered siltstone and arenite. Veins generally strike to the northwest and dip to the southwest at between 45 and 70 degrees. Bedding has a similar orientation. A broad (30m downhole) zone of intensely foliated rock in the footwall to the mineralisation also has a similar orientation. Three fences of RC drill holes (namely, holes KRC ) were completed for 1,338m total, straddling the gross structural orientation of results indicated from GVD137. The holes were drilled on 80m sections adjacent to, and along strike from, the mineralized intersection to test for oxide and primary potential. Assay results are pending. Yours sincerely Simon Farrell Managing Director 31 January 2006 Page 2 of 2

3 Rule 5.3 Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001. Name of entity GVM Metals Limited ABN Quarter ended ( current ) December 2005 Consolidated statement of cash flows Cash flows related to operating activities Current Year to date (6 months) 1.1 Receipts from product sales and related debtors 6,853 16, Payments for (a) exploration and evaluation (b) development (c) production (7,461) (15,509) (d) administration (344) (625) 1.3 Dividends received 1.4 Interest and other items of a similar nature received 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 (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) (c) other fixed assets (15) (68) (15) (73) Net investing cash flows Total operating and investing cash flows (carried forward) (1,190) (134) 30/9/2001 Page 1

4 1.13 Total operating and investing cash flows (brought forward) (1,190) (134) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc.(net) 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings (644) (1,123) 1.18 Dividends paid 1.19 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 /year to date 1, Exchange rate adjustments to item Cash at end of (569) (569) 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 $A' Aggregate amount of payments to the parties included in item Aggregate amount of loans to the parties included in item 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 Page 2 30/9/2001

5 Financing facilities available Add notes as necessary for an understanding of the position. 3.1 Loan facilities 3.2 Credit standby arrangements Amount available Amount used 5,848 5,753 Estimated cash outflows for next 4.1 Exploration and evaluation 4.2 Development Total Reconciliation of cash Reconciliation of cash at the end of the (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current Previous 5.1 Cash on hand and at bank 1,323 1, Deposits at call Bank overdraft (1,892) (453) 5.4 Other (provide details) - - Total: cash at end of (item 1.22) (569) 1,210 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 Tenement reference Nature of interest (note (2)) Nature of interest (note (2)) beginning of beginning of end of end of 30/9/2001 Page 3

6 Issued and quoted securities at end of current Description includes rate of interest and any redemption or conversion rights together with prices and dates. 7.1 Preference + securities (description) 7.2 Changes during (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemptions Ordinary securities Total number Number quoted Issue price per security (see note 3) (cents) 27,698,387 27,698,387 Amount paid up per security (see note 3) (cents) 7.4 Changes during (a) Increases through issues (b) Decreases through returns of capital, buybacks Convertible debt securities (description) 7.6 Changes during (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options (description and conversion factor) 7.8 Issued during 7.9 Exercised during 7.10 Expired during 7.11 Debentures (totals only) 7.12 Unsecured notes (totals only) 75,000 - Exercise price $1.92 Expiry date 30 September 2006 Page 4 30/9/2001

7 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 2006 (Director) Print name: Simon Farrell Notes 1 The ly report provides a basis for informing the market how the entity s activities have been financed for the past 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 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. 30/9/2001 Page 5