Quarterly Report March 2015

Transcription

1 Quarterly Report March April 2015 ABOUT ALTONA Altona Mining Limited (ASX: AOH) is an ASX listed company which recently sold its successful Outokumpu mine in Finland and is now focussed on a major copper development project in Australia. The Cloncurry Copper Project near Mt Isa in Queensland is one of Australia s largest undeveloped copper projects. Total resources contain some 1.65Mt of copper and 0.41Moz of gold. The first development envisaged is the 7 Mtpa Little Eva open pit copper-gold mine and concentrator. Little Eva is fully permitted with proposed annual production of 38,800t of copper and 17,200oz of gold for a minimum of 11 years. A Definitive Feasibility Study was published in March Altona is engaged in discussions with potential partners to enable the funding of this major development. As at 31/03/2015: Shares on issue: 534,678,592 Share rights on issue: 7,854,667 Cash: A$47.6M Market capitalisation at 10.5 cents per share (As at 31/03/2015) A$56M Altona Mining Limited ACN: Ground Floor, 1 Altona Street West Perth Western Australia 6005 T: E: admin@altonamining.com W: altona@altonamining.com ASX: Frankfurt: Oslo: AOH A20 ALTM A$80 Million Dividend and Return of Capital Completed; Focus Now on Delivery of Value at Cloncurry Cash Balance - At 31 March 2015 the cash balance was A$47.6 million representing cash backing of 8.9 cents per share. Return of Capital - 12 cents per share return of capital was paid on 12 February Special Dividend - 3 cents per share unfranked special dividend was paid at the same time as the return of capital for a total 15 cent per share return to shareholders. Turkey Creek - A maiden resource of 21 million tonnes at 0.59% copper for 123,300 tonnes of contained copper at 0.3% lower cut-off grade was declared. This discovery within 2 kilometres of the proposed Little Eva plant will require an update of the March 2014 mine plan and feasibility study. Substantial Global Resource - The Cloncurry Project now contains 1.65 million tonnes of copper and 0.41 million ounces of gold. Exploration - The Turkey Creek discovery has resulted in the Company embarking on a programme to re-evaluate existing targets and anomalies with the aim of generating new drill targets later this year. Strategy - Following the cash return to shareholders, Altona s strategy is: To focus on a transaction at Cloncurry to demonstrate and realise value To consider a joint venture, sale or corporate transaction To conserve cash To undertake only low key activities which add value and shorten lead time at Cloncurry Partnering and M&A discussions - Altona remains engaged with a number of parties covering a range of potential transactions relating to the Company and the Cloncurry Project. However, there is no certainty that a transaction will occur.

2 Corporate Sale of Finnish Assets to Boliden Altona completed the sale of its Finnish operations and most of its exploration assets in Finland to Boliden Mineral AB (Publ) ( Boliden ), a Swedish base metal miner and smelter in late The consideration for the sale amounted to US$98.3 million for the assets together with adjustments for working capital, net debt and net capital expenditure during the settlement period. Capital Return and Special Dividend The Board determined to return the bulk of the proceeds to shareholders and 12 cents per share was paid as a return of capital and a special unfranked dividend of 3 cents per share was paid at the same time as the return of capital. In total, Altona returned A$80 million of the value released from the sale of the Finnish operations to shareholders. Strategy Building on a record of success Altona was formed from the merger of Vulcan Resources and Universal Resources in The Outokumpu Project in Finland was financed and built on time and budget in 2012, the mine outperformed and Altona was able to pay back project debt 2 years early. The sale of Outokumpu for A$112 million in 2014 (market cap pre deal ~A$80 million) resulted in A$80 million (15 cents) returned to shareholders in February In parallel with developing Outokumpu, the Cloncurry Definitive Feasibility Study ( DFS ) and permitting was completed. It is not well appreciated that Altona is a successful explorer. Resources increased 142% since 2010 including the recent Turkey Creek discovery. Altona is now focussed on a transaction to realise and demonstrate value from the Cloncurry asset, a transaction could take many forms. Joint venture Corporate transaction Project sale A key part of our strategy is that if Cloncurry is to be financed, the financing should avoid aggressive debt and dilution while maximising shareholder return and conserving cash. At Cloncurry, Altona will continue with low-key, low-cost activities that add value and shorten lead times. In summary Altona has: A record of operational and financial success A record of exploration success A record of shareholders returns A strong cash backing A robust and development-ready project at Cloncurry A project of growing and material scale at Cloncurry Leverage to a deal on Cloncurry 2.

3 Cash Balance Altona had A$47.6 million of funds on deposit at 31 March 2015 following the return of approximately A$80 million to shareholders in February This provides Altona with a strong cash position to conduct its business. Cash movements for the quarter are tabulated below: A$ (millions) Opening cash (1 st January) Dividend and Return of Capital (80.2) Exploration and evaluation (0.8) Overheads/Corporate/transaction costs (1.0) Interest received and other 0.9 Closing cash (31 March) 47.6 Overheads include $400,000 of costs associated with the sale of our Finnish assets and the subsequent return of funds to shareholders and costs relating to the evaluation of corporate and sale transactions related to the Cloncurry Project. Share Price Activity on ASX Please note the share prices below are not adjusted for the 15 cent return to shareholders. Quarter open 0.24 High 0.24 Low 0.10 Quarter close 0.11 Average daily volume 683,608 The share price performance is pleasing as it represents an increase of 22% on a share price of 9 cents adjusted for the capital return. Half Year Profit The statutory accounts for the half year ended 30 December 2014 were published during this quarter. Hightlights are: Profit after tax from Outokumpu operations for 3 months of A$7.7 million until operations sold Disposal of Finnish assets gave rise to a gain of A$31.5 million Cloncurry Copper Project The Little Eva Copper-Gold Project is planned to be the first mine development at the Cloncurry Copper Project 90 kilometres north-east of Mt Isa and 11 kilometres north of MMG s $1.2 billion Dugald River zinc mine. The project sits within granted mining licences and native title agreements and environmental authority are in place. A DFS on the Little Eva Project was released in May 2012 and was updated in March

4 Partnering process continues Maiden resource The process to sell, partner or finance the Little Eva Project continues. A number of parties are active in the data room, have visited site and conducted due diligence studies. Dialogue with these parties continues. Turkey Creek is located 1.5 kilometres east of the planned Little Eva open pit mine and processing plant which lies within the granted Mining Leases. During the quarter Altona announced the first Resource Estimate for Turkey Creek. 21 million tonnes at 0.59% copper for 123,300 tonnes of contained copper. The resource is reported at a 0.3% lower cut-off grade and a full tabulation at different cut-off grades and ore types is given in Tables 1 and 2 and a detailed summary of the supporting data and methodology is given in Table 1 of the JORC Code 2012 Edition is provided in Appendix 1. Cloncurry represents a major strategic mineral inventory in the Mt Isa region The global Mineral Resource for the Cloncurry Project is now: million tonnes at 0.57% copper, 0.4g/t gold for 1.65 million tonnes of contained copper and 0.4 million ounces contained gold. The Turkey Creek Mineral Resource estimate is based on RC drilling and geological mapping. Geological modelling was conducted by Altona and the block modelling was undertaken by independent resource consultancy Optiro Pty Ltd. The majority of the Mineral Resource is sulphide ore from 25 metres to 160 metres below surface. An oxide cap ranging from surface to depths of 25 to 45 metres is included in the resource estimate. The Turkey Creek deposit will be included in the mining inventory for the Little Eva development. To enable the estimation of an Ore Reserve, Altona will complete a limited programme of diamond drilling to collect samples for definitive metallurgical testwork. It is expected that the incorporation of Turkey Creek will increase mine life by at least 1-2 years from the current 11 year schedule. Key to the impact of Turkey Creek is to determine if shallow oxide ore can be treated through the proposed Little Eva flotation circuit via sulphidisation. The amenability of oxide mineralisation to sulphidisation at Bedford and Little Eva will also be determined. Initial metallurgical testwork indicates high recoveries from sulphide ore following the proposed Little Eva flotation scheme. Given the location of Turkey Creek at the site of the proposed Tailings Storage facility and the implications for prospectivity in the immediate area of Little Eva and Turkey Creek, it is likely that the development will now revert to the fully permitted tailings storage facility located some 4 kilometres to the south west of the proposed plant site. See ASX announcement of 31 March 2013 for full details. 4.

5 Roseby South Joint Venture Chinalco Yunnan Copper Resources Ltd ( CYU ) continued exploration activities to earn an interest in the Roseby South Project. Exploration work by CYU concentrated on completing and analysing a mobile metal ion (MMI) soil geochemistry survey comprising 1,105 samples covering the Pilgrim Fault corridor and Companion/Brolga prospect (EPM and 11611). Polymetallic anomalies were identified by the MMI soil geochemical survey associated with the Pilgrim Fault and at Native Companion. In 2014, CYU completed an initial six hole exploration drilling program at the Native Companion prospect identifying a mineralised zone, at least 5km in strike length, highlighted by: An anomalous zinc zone to the north of Native Companion; and strong copper mineralisation intersected in drilling (best intersection 0.68% copper and 0.25g/t gold from 63m; including 1.15% copper and 0.41g/t gold. Please refer to CYU ASX release of 3 December As a consequence of these results, CYU propose more extensive, drilling and further exploration activities to be undertaken to test the identified MMI anomalies and at Native Companion in Competent Persons Statement and ASX Compliance Competent Persons Statement: The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr Alistair Cowden, BSc (Hons), PhD, MAusIMM, MAIG. Dr Cowden is a full time employee of the Company and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Cowden consents to the inclusion in the report of the matters based on their information in the form and context in which it appears. Little Eva Project production target and forecast financial information: Information in this release refers to a production target and the forecast financial information derived from a production target as disclosed to the market in the ASX release Cost Review Delivers Major Upgrade to Little Eva dated 13 March 2014, which is available to be viewed at or The Company confirms that all the material assumptions underpinning the production target and the forecast financial information derived from the production target referred to in the above-mentioned release continue to apply and have not materially changed. Copper equivalence: When used, copper equivalent refers to copper in concentrate produced, or planned to be produced. It does not refer to metal contained within insitu resources, reserves or drill results. The copper equivalent grade is calculated by factoring the copper grade by resource from all metals (NSR) being copper, zinc, gold and silver. 5.

6 Please direct enquiries to: Alistair Cowden James Harris Managing Director Professional Public Relations Tel: Tel: altona@altonamining.com james.harris@ppr.com.au Jochen Staiger Swiss Resource Capital AG - Germany Tel: js@resource-capital.ch 6.

7 Table 1: Resource Estimates for the Cloncurry Project DEPOSIT CONTAINED TOTAL MEASURED INDICATED INFERRED METAL Tonnes Grade Copper Gold Tonnes Grade Tonne Grade Tonnes Grade million Cu % Au g/t tonnes ounces million COPPER GOLD DEPOSITS Little Eva , , Ivy Ann A ,000 17, Lady Clayre A ,000 85, Bedford A ,000 11, Sub-total , , COPPER ONLY DEPOSITS Blackard A , Scanlan A , Turkey Creek , Longamundi A , Legend A , Great Southern A , Caroline A , Charlie Brown A , Sub-total , TOTAL ,647, , A This information was prepared and first disclosed under the JORC Code 2004 Edition. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. All other resources classified and reported in accordance with JORC Code 2012 edition. Note: Tonnages are dry metric tonnes and have been rounded, hence small differences may be present in the totals. See ASX release of 23 October 2007 and 26 July 2011 (Longamundi, Great Southern, Caroline and Charlie Brown), 23 April 2012 (Bedford, Ivy Ann and Lady Clayre), 03 July 2012 (Blackard and Scanlan), 22 August 2012 (Legend), 27 May 2014 (Little Eva) and 18 March 2015 (Turkey Creek) for full details of resource estimation. Little Eva is reported above a 0.2% copper lower cut-off grade, all other deposits are above 0.3% lower copper cut-off grade. Cu % Au g/t million Cu % Au g/t million Cu % Au g/t 7.

8 The ASX releases referenced in Table 1 is on the Altona website at The Company confirms that it is not aware of any new information or data that materially affects the information included in the most recent market announcement for each deposit and, in the case of Mineral Resources and Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person s findings are presented have not materially modified from the original market announcement. 8.

9 APPENDIX 5B Mining Exploration entity quarterly report Name of entity ALTONA MINING LIMITED ABN Quarter ended ( current quarter ) March 2015 Consolidated statement of cash flows Cash flows related to operating activities Current Quarter (3 months) A$ 000 Year to Date (9 months) $A Receipts from product sales and related debtors - 24, Payments for (a) exploration and evaluation (801) (3,398) (b) development - (2,918) (c) production - (14,928) (d) administration and corporate activities (1,035) (5,392) 1.3 Dividends received Interest and other items of a similar nature received 924 1, Interest and other costs of finance paid (1) (619) 1.6 Income taxes rebate Other* 21 1,574 Net Operating Cash Flows (892) 760 Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects - - (b) equity investments - - (c) other fixed assets 3 (2,087) 1.9 Proceeds from sale of: (a) prospects - 111,118 (b) equity investments - - (c) other fixed assets Loans to other entities Loans repaid by other entities Other - - Net investing cash flows 3 109, Total operating and investing cash flows (carried forward) (889) 109,791 * Includes VAT/GST and other income received, offset with a security deposit payment. 9.

10 Cash flows related to financing activities 1.14 Proceeds from issues of shares (net of costs) Proceeds from sale of forfeited shares Proceeds from borrowings Repayment of borrowings Dividends paid (16,040) (16,040) 1.19 Other** (64,161) (64,161) Net financing cash flows (80,201) (80,201) Net increase (decrease) in cash held (81,090) 29, Cash at beginning of quarter/year 128,668 18, Exchange rate adjustments to 1.20 (13) (101) 1.22 Cash at end of quarter 47,565 47,565 ** Return of capital paid to shareholders on 12 February 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 Aggregate amount of payments to the parties included in item Aggregate amount of loans to the parties included in item 1.10 Current quarter $A Explanation necessary for an understanding of the transactions Payment of executive and non-executive directors fees, salaries and superannuation; and $266,000 in drilling costs paid to Tulla Drilling during the quarter. Tulla Drilling is part owned by Chairman, Mr Kevin Maloney. 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 N/A 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 N/A 10.

11 Financing facilities available Add notes as necessary for an understanding of the position. Amount available $A 000 Amount used $A Loan facilities Credit standby arrangements - - Estimated cash outflows for next quarter (excluding any proceeds from concentrate sales and other income) $A Evaluation/Exploration Development Production Administration and corporate activities 402 Total 1,097 Reconciliation of Cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current quarter $A 000 Previous quarter $A Cash on hand and at bank Deposits at call 47, , Bank overdraft Other (provide details) - - Total: cash at end of quarter (item 1.22) 47, ,668 Changes in interests in mining tenements 6.0 See attached Schedule A. 11.

12 Issued and quoted securities at end of current quarter 7.1 Preference securities (description) Total number Number quoted Issue price per security Amount paid up per security Changes during quarter Ordinary securities 534,678, ,678, Changes during quarter - Issued Converting debt Securities (description and conversion factor) Changes during quarter Options (description and conversion factor) 7,854,667^ Issued during quarter Exercised during quarter Expired during quarter Debentures (totals only) Unsecured notes (totals only) ^ Share rights issued pursuant to approved Employee Share Scheme. These Share Rights form part of the Long Term Incentive Scheme in compliance with Altona s Remuneration Policy. The Share Rights have various expiry dates and performance hurdles. 12.

13 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. 2. This statement does give a true and fair view of the matters disclosed. Sign here: Date: 21 April 2015 Company Secretary Print Name: Eric Hughes 13.

14 SCHEDULE A AUSTRALIAN MINING TENEMENTS Interests in mining tenements relinquished, reduced or lapsed during the quarter A mandatory partial relinquishment of five sub blocks of EPM14370 Malakof was granted during the quarter. Interests in mining tenements acquired or increased during the quarter Renewal applications for nine EPMs were granted during the quarter by the Queensland DNRM (EPM8506, EPM14822, EPM12121, EPM12492, EPM12493, EPM12529, EPM13429, EPM1161, and EPM14370) The area under granted EPMs within Queensland presently totals km². Interests in mining tenements at end of the quarter Cloncurry Project: Mining Leases (ML) Number Name Holder Beneficial Interest Held Scanlan Altona Mining Ltd / Roseby Copper Pty Ltd 100% Longamundi Altona Mining Ltd / Roseby Copper Pty Ltd 100% Blackard Altona Mining Ltd / Roseby Copper Pty Ltd 100% Little Eva Altona Mining Ltd / Roseby Copper Pty Ltd 100% Village Altona Mining Ltd / Roseby Copper Pty Ltd 100% Cloncurry Project: Exploration Permit for Minerals (EPM) Number Name Holder Beneficial Interest Held 8059 Cameron River Roseby Copper Pty Ltd 100% 8506 Mt Roseby Roseby Copper Pty Ltd 100% Highway Roseby Copper Pty Ltd 100% Gulliver East Roseby Copper Pty Ltd 100% Queen Sally Roseby Copper Pty Ltd 100% Quamby Roseby Copper Pty Ltd 100% Cabbage Tree Roseby Copper Pty Ltd 100% Lilliput Roseby Copper Pty Ltd 100% Bannockburn Roseby Copper Pty Ltd 100% Coolullah Roseby Copper Pty Ltd 100% River Gum Roseby Copper Pty Ltd 100% Roseby East Roseby Copper Pty Ltd 100% Coolullah North Roseby Copper Pty Ltd 100% 14.

15 Chinalco Yunnan Joint Venture (EPM) Number Name Holder 9056* Pinnacle Roseby Copper (South) Pty Ltd 100% Highway Roseby Copper Pty Ltd 100% 10833* Cameron Roseby Copper (South) Pty Ltd 100% 11004* Ogorilla Roseby Copper (South) Pty Ltd 100% 11611* Gulliver Roseby Copper (South) Pty Ltd 100% 14365* Corella Roseby Copper (South) Pty Ltd 100% 14535* Roseby Infill Roseby Copper (South) Pty Ltd 100% Beneficial Interest Held * These tenements are subject to a Farm-in agreement with Chinalco Yunnan Copper Resources Ltd. Details of the Farm-in terms are set out in ASX announcement of 17 September At 28 March 2015, Chinalco Yunnan Copper Resources Ltd has not expended sufficient funds to earn a beneficial interest in these tenements. Regional Projects: Exploration Permit for Minerals (EPM) Number Name Holder 9611 Happy Valley Roseby Copper (South) Pty Ltd 100% Malakoff Roseby Copper (South) Pty Ltd 100% Mt. Angelay Roseby Copper (South) Pty Ltd 100% Beneficial Interest Held 15.