1 st August 2016 QUARTERLY ACTIVITES AND CASH FLOW REPORT PERIOD ENDED 30 th JUNE 2016 CONTACTS: Collin Vost Telephone: 08 6436 2300 ISSUED CAPITAL: 298,271,112 Ordinary Shares Directors: Collin Vost (Executive Chairman) Justin Vost (Non Executive) Timothy Clark (Non Executive) Australian Securities Exchange (ASX) Code: CVS (Ordinary Fully Paid Shares) Company Secretaries: Cash (30 th June 2016) Timothy Clark $23,000 John Greeve
Cervantes has successfully transitioned itself from a lobster company to a Mining Exploration Entity over the last reporting periods and commenced its acquisition of strategically located exploration areas in attractive geographical areas covering Gold and Nickel. Shareholders should note the company now reports as a Mining Exploration Entity by definition under ASX listing rules. During the the company advised the Native Title agreement on its Albany Fraser Range permit had been executed. Since the successful execution the company has progressed to the collection of historical data on the permit to assist in the formulation of a suitable exploration program. The permit resides within the famous Fraser Range district that hosted the Nova Bollinger project sold to Independence Group for $1.8 billion and adjoins the boundaries of Mount Ridley Mines Ltd and is in the immediate vicinity of several other exploration companies seeking to replicate the success of the Nova Bollinger project. While the board continues to collect data it will continue to monitor the success of other companies exploration programs in the local vicinity to ensure full knowledge of the area before commencing expenditure on any exploration, in consultation with our exploration consultants.
As mentioned in previous reporting periods, the company successfully added to its exploration portfolio through the acquisition of acreage located in Meekatharra WA via its 100% owned subsidiary Cervantes Gold Pty Ltd. The permit is strategically located South West of Doray Mining s Andy Well project area and Mill (approx 10 km), North West of the Meekatharra Township (approx 10 km), North of Metals X s Bluebird operations and Mill, and adjoining Thundelarra s recently acquired (Garden Gully) ground which is currently undergoing an initial exploration program and today (29 th July) released exceptional gold grades on their project. The board believes the acquisition is an efficient and cost effective way to deliver value quickly for shareholders given the permits potential for exploration could lead to an
expeditious definition of resources, paving the way to supply ore feed to nearby production hubs. The company is currently waiting for Native Title to be finalised on this project which the company expects to occur early in the new financial year. Any commercial success in exploration on this permit could create early cash flow based on near mills available capacity, and a major cost savings of avoiding large Capex costs for a mill, or a tailings dam. In addition the board continues to assess projects introduced by New York Securities Pty Ltd and others in a range of commodities including but not limited to graphite, gold, nickel, copper, zinc, Phosphate and lithium. Whilst initial assessment offers submitted by the company on a number of projects have been unsuccessful, the Company remains in discussion with a number of vendors in pursuit of a favourable outcome for Cervantes shareholders, including the continued pursuit for a technical solution to the existing gold tailings venture in WA. In the immediate term, due to the recent change in Government in the Philippines, including the appointment of a new mining minister the ongoing assessment of the Iron Sands project has been put on temporary hold. We do continue to monitor the situation to ensure we are fully aware if the new Government brings about new changes to the Industry. Cervantes continues to be one of the least expensive run companies on the ASX with minimal directors fees, totalling some combined $71,000 per annum. This austerity will continue until the Directors and management are able to be adequately rewarded for their time, and for the ever increasing liabilities and responsibilities attached to being directors of a public company imposed on them by politicians, the ASX and the ASIC. Cervantes currently has access to sufficient cash, and current assets, which can be disposed of as and when required to meet ongoing expenditures, and when deemed appropriate, the Company will exchange assets from time to time for improving the medium to longer term goals, and to diversify the operations and assets. The Board retains its favourable stance towards a capital raise in due course for working capital, reduction of debts and pursuit of initial exploration programs on our newly acquired assets and possible acquisition of more advanced projects. Cervantes, based on its current assets and cash, has sufficient reserves to meet its costs and expenses for the next 2 s, as and when they fall due. The for the ended 30 June 2016 is attached. Forward-Looking Statements This press release may contain forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Cervantes, including, without limitation, statements pertaining to management's future plans and operations. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate and actual results and future events could differ materially from those anticipated in such information. Any forward-looking statements are made as of the date of this release and Cervantes does not assume any obligation to update or revise them to reflect new events or circumstances.
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013 Name of entity Cervantes Corporation Limited ABN Quarter ended ( current ) 79 097 982 235 30 June 2016 Consolidated statement of cash flows Cash flows related to operating activities 1.1 Receipts from product sales and related debtors Current Year to date ( 12 months) 1.2 Payments for (a) exploration & evaluation (11) (23) (b) development (c) production (d) administration (50) (226) 1.3 Dividends received 1.4 Interest and other items of a similar nature - 2 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 (61) (247) 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 (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) - (15) Net investing cash flows - (15) 1.13 Total operating and investing cash flows (carried forward) (61) (262) 01/05/2010 Page 5
1.13 Total operating and investing cash flows (brought forward) (61) (262) 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 (25) (25) 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows (25) (25) Net increase (decrease) in cash held (86) (287) 1.20 Cash at beginning of /year to date 109 310 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of 23 23 Payments to directors of the entity, associates of the directors, related entities of the entity and associates of the related entities Current $A'000 1.23 Aggregate amount of payments to the parties included in item 1.2 38 1.24 Aggregate amount of loans to the parties included in item 1.10 1.25 Explanation necessary for an understanding of the transactions Reference 1.23 Directors fees $18,300 (Bookkeeping and Serviced Office provided by a Director $19,500) 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 01/05/2010 Page 6
Financing facilities available Add notes as necessary for an understanding of the position. 3.1 Loan facilities Amount available Amount used 3.2 Credit standby arrangements 100 - Estimated cash outflows for next 4.1 Exploration and evaluation 22 4.2 Development 4.3 Production 4.4 Administration 50 Total 72 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 2 4 5.2 Deposits at call 5.3 Bank overdraft 21 105 5.4 Other (Details) Total: cash at end of (item 1.22) 23 109 01/05/2010 Page 7
Changes in interests in mining tenements and petroleum tenements 6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed Tenement reference and location Nature of interest (note (2)) Interest at beginning of Interest at end of 6.2 Interests in mining tenements and petroleum tenements acquired or increased 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 7.3 + Ordinary securities 7.4 Changes during (a) Increases through issues (b) Decreases through returns of capital, buybacks 7.5 + Convertible debt securities (description) Total number Number quoted Issue price per security (see note 3) (cents) 298,271,112 298,271,112 Amount paid up per security (see note 3) (cents) 01/05/2010 Page 8
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) Exercise price Expiry date 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 5). 2 This statement does give a true and fair view of the matters disclosed. Sign here: Date: 1 st August 2016 Print name: Timothy Clark (Non Executive Director/Company secretary) 01/05/2010 Page 9
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 and petroleum 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 or petroleum 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 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting 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. == == == == == Cervantes Corporation Limited Schedule of Tenements as at 30 June 2016 Project Tenement Nature of Company s Interest Mt Heywood,Fraser Range E63/1752 100% Abbotts, Meekatharra E51/1721 **100% **As announced 5 February 2016, Cervantes had secured E51/1721, however this remains subject to Native Title Approval. 01/05/2010 Page 10