1st Quarter Results
October 18 2001 - 7:13AM
UK Regulatory
RNS Number:7973L
AuIron Energy Ld
18 October 2001
AUIRON ENERGY LIMITED
QUARTERLY REPORT FOR THE PERIOD ENDED 30 SEPTEMBER 2001
SOUTH AUSTRALIAN STEEL AND ENERGY (SASE) PIG IRON PROJECT (AuIron Energy 90%)
SASE
During July, SASE progressed the Ingomar coal-washing program in step with the
operational requirements of the SASE demonstration plant. On 10 September 2001
preparation of approximately 2,400 tonnes of washed minus 50 millimetre coal
product was completed.
Washed coal drying trials conducted during July and August indicated that the
capacity of the installed drying equipment at the SASE plant was insufficient.
Work needed to increase the capacity was commenced during August as Phase 1 of
the announced demonstration plant expansion plan.
Smelting trials during July and August were limited by a shortage of oxygen
from a third party supplier. SASE reduced the impact of this shortage by
supplementing its oxygen supply with purchases from BOC (the former British
Oxygen Company).
Steady state iron smelting with ore feed rates of up to 3250 kilograms per
hour (the nominal design rate is 2000 kilograms per hour) were achieved while
reductant and fuel coal consumptions per tonne of pig iron were reduced.
The demonstration plant was shut down on 3 September and will resume
operations in late-November 2001. The shutdown coincides with work being
carried out by SASE's oxygen supplier to double its oxygen supply capability.
A new 150 millimetre diameter pipeline to provide up to 115 tonnes per day of
nitrogen to the SASE plant is also being installed.
During the period of the current shut down, the coal drying equipment capacity
upgrade will be completed. This upgrade will remove a significant constraint
to achieving effective and safe drying of high volatile coal.
The Phase 2 expansion, which involves an upgrade of the off-gas handling
equipment will follow completion of the Ingomar coal demonstration phase and
is expected to commence in the first quarter of 2002. This expansion is
expected to allow the smelting intensity and efficiency limits of the
demonstration plant, now higher than previously expected, to be determined.
Iron Resources
SASE has been granted a 2.5 square kilometres mineral claim (MC 3258) covering
the Peculiar Knob hematite deposit situated approximately 50 kilometres to the
northeast of SASE's Hawks Nest iron ore deposits.
The iron mineralisation at Peculiar Knob occurs in the form of a steeply
dipping zone of 15 to 36 metres wide extending for approximately 1,100 metres.
The dominant mineral in the ore zone is coarse, massive, high grade, specular
hematite. An Inferred Resource of 14 million tonnes averaging 63 per cent Fe
(iron) has been estimated by the SA Department of Minerals and Energy (MESA)
from drilling carried out in 1995 by MESA and previous drilling by CRAE (Rio
Tinto).
INGOMAR COAL (AuIron Energy 100%)
Samples of the Ingomar coal bulk sample have been tested to determine the
required commercial washing process to prepare the coal for suitability as a
thermal coal for power station markets (in addition to the requirements of
SASE). Laboratory testing and bulk testing at the Whyalla coal wash plant have
demonstrated that the required thermal coal specifications can readily be
obtained at reasonable cost. Further work is planned for testing the coal in
combustion test boilers to verify burning characteristics of low ash Ingomar
coal. Also a pilot scale coal-washing program will be carried out in the
fourth quarter 2001.
MineConsult has assessed the mining data gained from the trial pit and
undertaken computer analyses that will be used to develop a commercial mine
plan and costings. The pre-feasibility analysis has demonstrated that Ingomar
coal can be produced economically for both SASE and thermal coal applications.
BALLYMONEY NORTHERN IRELAND MINE AND POWER PROJECT (AuIron Energy 100%)
The Project continues to be taken forward within the time frames detailed in
AuIron's Rights Offer Prospectus.
Financial Advisers
The Board, after receiving a number of proposals, will consider an appointment
of a Financial Adviser in the fourth quarter 2001.
Power Generation Advisers
The pre-feasibility study undertaken by Private Energy Partners has been
completed.
The Electricity Market
The attractiveness for a new entrant in the electricity generating market
continues to grow in line with the forecasts on which the viability of the
Project is being assessed.
New Drilling Program
A drilling program commenced at Ballymoney on 25 September is scheduled to be
completed by the end of October 2001. The primary objective of the program is
to upgrade the geological, geotechnical, hydrogeological and analytical data
pertaining to an area containing approximately 150 million tonnes of lignite
to enable a mine feasibility study to be undertaken. Two large diameter
boreholes will be drilled for geotechnical purposes. It is also intended to
conduct extended pump tests to better define the hydrogeological
characteristics of the formations to be mined.
As at 9 October, eight of the eighteen boreholes had been drilled and this is
in line with the planned schedule of work.
Mine Planning and Costing
The studies and costing were completed during the September quarter of 2001.
They are to be reviewed when the drilling program referred to above has been
completed.
FINANCE
Net proceeds received from the fully underwritten pro rata 1 for 4
non-renounceable rights offer totalled $52 million. Pursuant to the rights
offer 65,157,846 shares were issued in July 2001.
COMPETENT PERSON
All technical information in respect of iron ore was compiled by Mr C J
Robinson ARMIT (Geol), FAusIMM, MAIG, CPGeo and accurately reflects the
information compiled by him. Mr Robinson has consented and not withdrawn his
consent to include herein the information in the form and context in which it
appears.
All technical information in respect of the coal, pig iron and electricity
related projects was prepared by Eur Ing Mr N F Arthur, B E (Chem) Hons, C
Eng, FIChem, FAusIMM, FAICD, Managing Director & Chief Executive Officer and
accurately reflects the information compiled by him. Mr Arthur has consented
and not withdrawn his consent to include herein the information in the form
and context in which it appears.
Mining exploration entity quarterly report
Name of entity
AUIRON ENERGY LIMITED
ABN Quarter ended ("current quarter")
000 754 174 30 SEPTEMBER 2001
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows related to operating Current quarter Year to date (3 months)
activities $A'000 $A'000
1.1 Receipts from product sales - -
and related debtors
1.2 Payments for
(a) exploration and (1,118) (1,118)
evaluation
(b) development (4,587) (4,587)
(c) production - -
(d) administration (1,539) (1,539)
1.3 Dividends received - -
1.4 Interest and other items of 470 470
a similar nature received
1.5 Interest and other costs of (4) (4)
finance paid
1.6 Income taxes paid - -
1.7 Other (provide details if - -
material)
Net Operating Cash Flows (6,778) (6,778)
Cash flows related to investing activities
1.8 Payment for purchases of:
(a) prospects - -
(b) equity investments - -
(c) other fixed assets (9) (9)
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 (9) (9)
1.13 Total operating and (6,787) (6,787)
investing cash flows
CASH FLOWS RELATED TO FINANCING ACTIVITIES
1.14 Proceeds from issues 52,017 52,017
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 (provide - -
details if material)
Net financing cash 52,017 52,017
flows
Net increase 45,230 45,230
(decrease) in cash
held
1.20 Cash at beginning of 6,180 6,180
quarter/year to date
1.21 Exchange rate 1 1
adjustments to item
1.20
1.22 Cash at end of 51,411 51,411
quarter
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
1.23 Aggregate amount of payments to the parties 249
included in item 1.2
1.24 Aggregate amount of loans to the parties included -
in item 1.10
1.25 Explanation necessary for an understanding of the transactions
1.14 Net proceeds of Rights Offer received during the quarter.
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 -
3.2 Credit standby arrangements NIL -
ESTIMATED CASH OUTFLOWS FOR NEXT QUARTER
$A'000
4.1 Exploration and evaluation 1,000
4.2 Development 10,000
Total 11,000
RECONCILIATION OF CASH
Reconciliation of cash at the end of the Current Previous quarter
quarter (as shown in the consolidated quarter $A'000
statement of cash flows) to the related $A'000
items in the accounts is as follows.
5.1 Cash on hand and 397 563
at bank
5.2 Deposits at call 51,014 5,617
5.3 Bank overdraft - -
5.4 Other (provide - -
details)
Total: cash at 51,411 6,180
end of quarter
(item 1.22)
CHANGES IN INTERESTS IN MINING TENEMENTS
Tenement Nature of Interest at Interest
reference interest beginning at end of
(note (2)) of quarter quarter
6.1 Interests in As per
mining attached
tenements Schedule 1
relinquished,
reduced or
lapsed
6.2 Interests in As per
mining attached
tenements Schedule 1
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.
Category of securites Number Number Issue Paid up
issued quoted Price value
(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 326,539,232 326,539,232 - -
securities
7.4 Changes
during quarter
(a) Increases
through issues 65,157,846 65,157,846 - -
(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 As per Exercise Expiry
(description attached price date
and Schedule 2 (cents)
conversion
factor)
7.8 Issued during As per
quarter attached
Schedule 2
7.9 Exercised As per
during quarter attached
Schedule 2
7.10 Expired As per
during quarter attached
Schedule 2
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.
J FONTANA Date: 18 OCTOBER 2001
(Company secretary)
SCHEDULE 1
TENEMENT REFERENCE NATURE OF INTEREST AUIRON ENERGY INTEREST HELD
SOUTH AUSTRALIA
Arckaringa Basin EL's 2797, 2809 91.66%
Sub-Bituminous coal 2,759 sqkm
Phillipson EL 2717 100%
Sub-Bituminous coal 1,367 sqkm
Robins Rise EL 2249
Sub-Bituminous coal 308 sqkm 100%
Hawks Nest EL 2587 90%
Iron Ore & other minerals 2,278 sqkm
Watson EL 2586 90%
Limestone 104 sqkm
Peculiar Knob MC 3258 90%
Iron ore 2.50 sqkm
NORTHERN IRELAND
Ballymoney PL MM 9/98 100%
Lignite 91 sqkm
INDONESIA
South Sumatra (Kukusan) COW 70%
Zeolite 66 sqkm
SCHEDULE 2
7.7 OPTIONS
Number And Class Of All Securities Not Quoted On Exchange
REF NUMBER CLASS EXERCISE PRICE EXERCISE DATE ASX CODE
1 7,500,000 Unlisted Various 31/12/2004 AUYAQ
options
2 500,000 Unlisted 0.30 30/11/2003 AUYAS
options
3 1,060,000 Unlisted 0.30 18/10/2005 AUYAU
options
5 5,500,000 Unlisted 0.77 08/09/2005 AUYAI
options
6 150,000 Unlisted $1.10 08/09/2005 AUYAK
options
7.8 ISSUED DURING THE QUARTER
NIL
7.9 EXERCISED DURING THE QUARTER
NIL
7.10 EXPIRED DURING THE QUARTER
NIL
END
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