RNS Number:2817X
Elkedra Diamonds NL
23 January 2006
ELKEDRA DIAMONDS NL
Level 1 , 130 Hay St, Subiaco, Western Australia
Telephone: +61-8-6380 2855; Facsimile: +61-8-6380 1644
E-mail: elkedra@elkedra.com.au Web Site: www.elkedra.com.au
QUARTERLY REPORT FOR 31 DECEMBER 2005
FOR HIGHLIGHTS & FIGURES/DIAGRAMS PLEASE REFER TO OUR WEBSITE www.elkedra.com.au
1.0 BRAZIL
CHAPADA DIAMOND PROJECT - Elkedra 100%
DEVELOPMENT OF CHAPADA DIAMOND RECOVERY PLANT & QUILOMBO MINE
Significant construction milestones for the new diamond recovery plant at the
Chapada project site were achieved during the December quarter.
At the end of December concrete foundations were 95% complete and all
manufactured mechanical equipment was delivered to the plant site. The only item
of manufactured equipment now outstanding for delivery is the x-ray diamond
sorting machine. This machine is ready for shipment from South Africa and
awaiting finalisation of the Brazilian import licenses.
The erection of the Feed Preparation plant structural steelwork and mechanical
equipment installation was completed and the stockpile recovery chamber and
conveyor tunnel were installed. The electrical and piping installation in the
Feed Preparation area has commenced.
Fig 1 Feed Preparation Plant Fig. 2 Stock pile recovery chamber
Fig. 3 Stockpile Stacker - HMS plant feed Fig. 4 Concrete pour in progress
(heavy media separation area)
Construction of the security gatehouses on the site access road has been
completed and the mine administration office, to accommodate the process plant
and mine management personnel, is well advanced and due for completion by the
end of January 2006. The site electrical power substation has been energised and
the site is now operating on grid power supply. On completion of the site
administration office all mine and plant site infrastructure requirements will
be essentially completed.
Fig. 5 Site administration building under construction Fig. 6 Security Gate
House at the mine site entry
The structural steel fabrication contractor engaged for the Heavy Media/Magnetic
Separation/Diamond Recovery building failed to perform to requirements and a
replacement contractor has been engaged. Steel fabrication work for this
building is now progressing however this process has caused a 4-5 week delay in
the construction schedule.
Unfortunately a number of cumulative delays during the quarter have pushed the
remaining construction activities into the December to March wet season, which
in turn has been further slowed construction progress. Based on the latest
project schedule update commencement of commissioning and first gravel feed to
the diamond recovery plant in now expected to be achieved by the end of March
2006.
All relevant statutory permits for the project are current and in good standing.
The only outstanding permit required for project start up is the issue of the
Operation License which will occur on completion of the construction activities.
An application for this final permit was made in December 2005.
A final review and refinement of the project mine planning was undertaken in
November 2005. A letter of intent was also issued to the preferred mining
contractor and site establishment of the mining contractor's site facilities
commenced in January.
Fig 7. Mine planning model of the gravel terraces in the Quilombo Ore Reserves
In parallel with the construction activities, recruitment of the project
operations management team has progressed over the December 2005 quarter. Almost
all senior management positions have been filled and supervisor level personnel
are now being recruited. The company now has 23 personnel on the Brazilian
payroll out of the estimated 70 personnel required for the full operation of the
project (the mining contractor is expected to provide an additional 70
personnel). It is not anticipated that there will be any problems recruiting the
remaining operations personnel.
In terms of the Brazilian currency budget the project development costs are
currently been contained within budget. However the Brazilian currency (Real)
has over the last 12 months strengthened in the order of 20% against most world
major currencies hence causing some erosion of project contingency provisions.
This has been addressed by a share placement to UK investors in December 2005
and Elkedra will continue to closely monitor its cash position to ensure an
efficient start-up of operations during the next quarter.
BRAZILIAN TENEMENTS AND RESERVES
The Chapada Project Tenements in Brazil currently cover a total area of
approximately 291km2.
Fig 8: Brazilian Tenements
Current Reserves
As previously advised the Chapada Project has a current probable reserve of 5.4
million bcm of diamondiferous gravels at a grade of 0.05 carats per bcm. This
reserve is sufficient to sustain a mine life of 9 years based on the proposed
initial rate of gravel processing of 600,000 bcm (1.5 million tonnes) per annum,
with expected annual diamond production of more than 30,000 carats. The diamonds
recovered during bulk sampling are of a high gemstone quality with an average
size of 0.5 carats. Based on an independent assessment of the sales data from
previous sales an average selling price of above US$400 per carat is expected to
be realised.
This current probable reserve of gravels is contained on two tenements,
"Quilombo North" and "Quilombo South", for which mining licences have been
granted, and the adjacent "Peba Lagoinha" tenement for which a development
installation licence is being progressed. These three tenements together give an
expected mine life of 9 years and cover an area of only 17km2.
Exploration Tenements
Elkedra holds a further seven granted exploration tenements covering some 274km2
within the surrounding Chapada basin region. Historical exploration activities
have shown these areas to also contain diamondiferous gravel deposits. If
ongoing exploration work indicates economic resources in these tenements then
low capital cost satellite mining operations can be established at these
tenements providing a gravel concentrate back to the Chapada process plant for
final diamond recovery.
2.0 AUSTRALIA
AUSTRALIAN TENEMENTS
A summary of the tenement position at the end of December 2005 for the Northern
Territory and Queensland is shown in Figure 9.
Fig 9. Tenement Plan showing Altjawarra and Thorntonia project areas, current at
31 December 2005.
During the quarter one tenement (Marqua EL23202) was partially relinquished and
the relinquished area was replaced by parts of two Substitute Exploration
licences (SEL24768 and SEL24769). Field River tenement (EL24693) was granted
during the quarter. In Queensland, across the NT border, application was made
for Cravens Peak North tenement (EPM15230), which covers diamond prospective
ground of the Poodyea Target Area located in the Toko Range. Hundreds of diamond
indicator minerals have been reported by previous explorers but little or no
work has been undertaken on the tenement since the late 1980's and early 1990's.
Following rationalisation of tenement holdings the total tenement holding in the
NT and Queensland is now 5,780 km2, including both granted tenements and
applications.
Figure 9. Map showing current primary exploration target areas for the
Altjawarra region.
Diamond Exploration - Elkedra 100%
Indicator Mineral Sampling Results
In the Poodyea Target Area, abundant diamond indicator minerals, mainly
picroilmenite and chromite, have been recovered from modern drainages by both
Elkedra and previous explorers. It has been suggested that a rock unit known as
the Poodyea Formation conglomerate is the source of indicator minerals. A study
of heavy minerals from two 50 kg samples of Poodyea Formation conglomerate was
undertaken to test this theory. The study confirmed the presence of
picroilmenite in the conglomerate but chromite was not found. The results
indicate that the source of chromite is either restricted to a localised area of
the Poodyea Formation or has another source. The present results provide support
for the presence of an undiscovered primary kimberlite or lamproite source
within the Poodyea Target Area that should be traceable using indicator
minerals. In addition, detrital rutile separated from the Poodyea conglomerate
was dated by U-Pb methods. The results indicate the Poodyea Formation is of late
Devonian age (about 360 million year old), much older than previously supposed
but within the time window of known kimberlite volcanism in the Northern
Territory. These results will assist in focussing Elkedra's exploration efforts
in the 2006 field exploration season.
Diamond Sampling Activities
In December 2005 three mini-bulk samples from the Toko Range tenement (EL22531)
of approximately 4.5 tonnes each were shipped to laboratories for diamond and
heavy mineral separation with results expected to become available in the next
quarter. These samples comprise -10mm gravel and stream sediment from three
carefully selected sites in modern drainages (Craigie East, Poodyea Creek and
Bloodwood Creek) with laboratory testwork aimed at recovery of +0.3 mm diamonds.
Base Metals and Uranium Exploration - Elkedra 100%
A small exploration program targeting base metal, quartz vein and radiometric
anomalies in the southern Altjawarra Project Area on the Marqua and Field River
tenements was undertaken in September. As a result of this work base metal
anomalies at Christmas Dam, located 2 km southwest of Boat Hill, have been
delineated. The following more significant assays for lead (Pb) and copper (Cu)
were obtained from grab samples from surface gossans and ferruginous veins
located within the core of folded rocks of the Field River Anticline.
Christmas Dam Prospect (Marqua SEL)
O Ferruginous veins and fluorite-bearing gossans are
associated with a shear zone in basement granite over an outcrop distance of
about 1 km.
O Peak assays of: 9.6% Pb, 0.92 % Cu and 7.5 g/t Ag were
recorded from a ferruginous vein.
O Other significant assay results from samples in this
prospect are: 6.9, 3.5 and 2.7% Pb; 0.25% Cu; 0.46% Zn; 0.89 kg/t Ce2O3; 7.5 g/t
Ag
O About 2 km further west values of 0.3% Pb, 1.2% Cu, 35.3 g/t
Ag and 23 ppb Au were recorded from a ferruginous outcrop that appears to be
part of the same mineralized system.
The Pb, Cu and Ag assays obtained from the Christmas Dam Prospect are the
highest values ever recorded from the southern Altjawarra region and provide
significant encouragement for follow-up exploration work .
Desert Syncline Prospect (Field River EL)
O Ferruginous rocks representing weathered black shales and
shelly, phosphatic deposits of the Red Heart Dolomite are associated with a
radiometric anomaly.
O Peak assays of: 0.20 kg/t U3O8 and 0.16% Zn from a rock chip
sample were recorded.
O Also of interest: 170 ppm Ni and 63 ppm Co
Mt Dobbie Prospect (Field River EL)
O Sulphide-bearing ferruginous veins cut weathered granite
O Peak assay of: 1.3% Pb
O Also of interest: 12 ppb Au, 470 ppm Cu, 0.79 kg/t Ce2O3,
0.10 kg/t U3O8
Boat Hill Prospect (Marqua SEL)
Surface sampling
O Surficial ferruginous breccia and phosphatic limestone was
sampled.
O The ferruginous breccia recorded: 0.68% Zn, 218 ppm Ni and
155 ppm Co
O High grade phosphorite containing 32% P2O5 is associated with
0.12 kg/t U3O8, 5.8 g/t Ag and 0.20% Zn
O Other phosphate assays include three samples with 23, 19 and
16% P2O5
Drill Core Geochemical Assays
During the quarter the following peak assay results were received from old drill
chips and drill core material from the Boat Hill Prospect. The assayed samples
come from three shallow percussion holes of 25-35m depth (MQ-4, MQ-11, MQ-13)
and two deeper diamond core holes (BHD-2, BHD-5) drilled in the late 1980's and
early 1990's by other exploration companies. Previous explorers only assayed for
a few elements and the aim of this exercise was to identify the extent of metal
anomalism in a range of elements.
Peak assays from the percussion holes:
O Zinc (Zn) 0.38% over 4 metres and 0.35% over 2 metres
in two separate holes
O Lead (Pb) 0.15% over 2 metres in one hole
O Silver (Ag) 3.4 g/t over 2 metres with an additional 4
meters of 2.2-2.8 g/t in two holes
O Nickel (Ni) 212 ppm over 2 metres with additional
170-120 ppm over 8 metres in one hole
O Cobalt (Co) 85 ppm over 2 metres with additional >40
ppm over 3 meters in two holes
O Vanadium (V) 498 ppm V over 2 metres with additional
480-250 ppm over 6 meters in two
holes
O Phosphate 13.7wt% P2O5 over 2 metres with an
additional 6-8 wt% P2O5 over 8 metres in one
hole
O Uranium Oxide 0.08 kg/t U3O8 over 2 metres in one hole
O Cerium Oxide 0.59 kg/t Ce2O3 over 2 metres in one hole
with 0.35-0.50 kg/t Ce2O3 over 6
metres in another hole
Peak assays from the cored holes:
O In spot samples of drill core values of 0.30% Zn and 4.1 g/t
Ag were recorded
While there are no outstanding values in an economic sense from these initial
shallow holes, the results are indicative of significant anomalism in a range of
elements that highlight the metal prospectively of the stratigraphic package in
the Boat Hill area.
CORPORATE
The total issued capital of the company is 69,209,893 shares of which 61,855,978
shares are listed and 7,353,915 are subject to ASX escrow until 20/12/2006.
During the quarter 8,333 unlisted convertible notes were converted into 83,330
new shares at 36 cents per share. The number of unlisted convertible notes on
issue at 31 December 2005 therefore reduced to 555,612.
3,117,059 new shares were issued at 17p (A$0.40) to UK investors in December
2005.
As at 31 December 2005 a total of 17,531,676 unlisted options exercisable at
between 10 pence and A$1.05 are on issue, in addition to 23,487,247 options
exercisable at 12 pence listed on AIM in the UK.
The following unlisted options are due to expire on 14 March 2006:
* 6,092,950 exercisable at A$0.75
* 166,667 exercisable at A$1.05
* 81,667 exercisable at 10p (A$0.24)
The Company retained $4.08 million in cash as at 31 December 2005.
The Company regularly updates its Web Site at www.elkedra.com.au
For and on behalf of the Board
M.D.J. Cozijn
Director/Company Secretary
23 January 2006
The geological information on the Australian diamond projects is based on
information compiled by and reported upon by Dr. Wayne Taylor, Chief
Mineralogist, who is a member of the Australian Institute of Geoscientists.
The resource information on the Brazilian Chapada Alluvial Diamond Project is
based on data compiled by and reported upon by Mr Hugh Durey of Hugh Durey &
Associates Pty Ltd. Mr Durey is a member of the Australasian Institute of Mining
& Metallurgy and qualifies as a competent person as defined in the September
1999 edition of the Australasian Code for Reporting of Mineral Resources and Ore
Reserves (The JORC Code). He has consented to the inclusion of the information
in the form and context in which it is presented in this report. Mr. Durey holds
no interest in the share capital of either Elkedra Diamonds NL or Chapada
Diamonds Ltd.
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
ELKEDRA DIAMONDS NL
ABN Quarter ended ("current quarter")
------------------- ------------------
ABN 42 092 334 220 31 December 2005
------------------- ------------------
Consolidated statement of cash flows
----------- -----------
Cash flows related to operating activities Current Year to
quarter date
$A'000 (6 months)
$A'000
----------- -----------
-----------
1.1 Receipts from product sales and related - -
debtors
1.2 Payments for (a) exploration and evaluation (109) (228)
(net)
(b) development (2,163) (3,892)
(c) production - -
(d) administration (net) (462) (994)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature 179 300
received
1.5 Interest and other costs of finance paid (191) (264)
1.6 Income taxes paid - -
1.7 Other (provide details if material) - -
----------- -----------
Net Operating Cash Flows (2,746) (5,078)
------ -------------------------- ----------- -----------
Cash flows related to investing activities
1.8 Payment for purchases of: (a)prospects - -
(b)equity investments - -
(c) other fixed assets (108) (152)
1.9 Proceeds from sale of: (a)prospects - -
(b)equity investments - -
(c)other fixed assets 2 2
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other (provide details if material) - Chapada/ - -
RFC ----------- -----------
Net investing cash flows (106) (150)
----------- -----------
1.13 Total operating and investing cash flows (2,852) (5,228)
------ (carried forward) ----------- -----------
--------------------------
1.13 Total operating and investing cash flows (2,852) (5,228)
------ (brought forward) ------------ ------------
-----------------------
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 1,197 1,197
(net)
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings - 5,000
1.17 Repayment of borrowings (24) (38)
1.18 Dividends paid - -
1.19 Other - Trade Creditors/etc.. 78 75
------------ ------------
Net financing cash flows 1,251 6,234
------ ----------------------- ------------ ------------
Net increase (decrease) in cash held (1,601) 1,006
1.20 Cash at beginning of quarter/year to date 5,742 2,564
1.21 Exchange rate adjustments to item 1.20 (62) 509
------------ ------------
1.22 Cash at end of quarter 4,079 4,079
------ ----------------------- ------------ ------------
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 included in 117
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
-------------------------------------------
1.23 Being Executive Directors salaries and non-executive Director's fees
and superannuation.
-------------------------------------------
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
--------------------------------------------
None
--------------------------------------------
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
--------------------------------------------
None
--------------------------------------------
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 - 5,000
------------- -------------
3.2 Credit standby arrangements - -
----- ----------------------- ------------- -------------
* On 2 September2005, the Company executed Loan Agreements with the LinQ
Resources Fund covering a $5 million project debt facility to be used for the
completion of construction of the Chapada Diamond Project and provide working
capital.
Estimated cash outflows for next quarter
$A'000
------------------
4.1 Exploration and evaluation 132
------------------
4.2 Development 3,692
----- ----------------------------- ------------------
Total 3,824
----- ----------------------------- ------------------
Reconciliation of cash
------------------------- ------------ -------------
Reconciliation of cash at the end of the quarter (as Current Previous
shown in the consolidated statement of cash flows) to quarter quarter
the related items in the accounts is as follows.
$A'000 $A'000
------------------------- ------------ -------------
-------------
5.1 Cash on hand and at bank 1,037 237
------------ -------------
5.2 Deposits at call 3,042 5,505
------------ -------------
5.3 Bank overdraft - -
------------ -------------
5.4 Other (provide details) - -
----- ---------------------- ------------ -------------
Total: cash at end of quarter (item 1.22) 4,079 5,742
----- ---------------------- ------------ -------------
Changes in interests in mining tenements
-------- --------------- -------- --------
Tenement Nature of Interest at Interest
reference interest beginning of at end of
quarter quarter
(note (2))
-------- --------------- -------- --------
6.1 Interests in mining Refer covering
tenements -------- quarterly report -------- --------
relinquished, reduced attached hereto
or lapsed ---------------
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 Issue price per Amount paid up
-------------- number quoted security (see per security
---------- ---------- note 3) (cents) (see note 3)
(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 69,209,893 61,855,978
securities ---------- ---------- ------------ ------------
7.4 Changes during 83,330 83,330 Conversion of 36cents
quarter 8,333
convertible
notes
(a) Increases 3,117,059 3,117,059 17p (A$0.40) 17p (A$0.40)
through issues
(b) Decreases
------ through returns ---------- ---------- ------------ ------------
of capital,
buy-backs
-----------
7.5 +Convertible debt 555,612 - $3.60/
securities (1) ---------- ---------- convertible ------------
for (3) into 10 shares
consolidation @ 36c
------------
7.6 Changes during - - Converted into
quarter 83,330 shares
(a) Increases 8,333 8,333
through issues
(b) Decreases
------ through ---------- ---------- ------------ ------------
securities
matured,
converted
-----------
7.7 Options 6,092,950 - Exercise price Expiry date
166,668 - Exercisable @ Expire
75c Exercisable 14/03/2006
@ 75c
166,667 - Exercisable @ Expire
$1.05 31/12/2006
Expire
14/03/2006
1,540,390 - Exercisable @ Expire
75c 14/03/2007
81,667 - Exercisable @ Expire
10p 14/03/2006
1,250,000 - Exercisable @ Expire
40c 30/11/2009
1,250,000 - Exercisable @ Expire
60c 30/11/2009
333,334 - Exercisable @ Expire
45c 3/09/2008
23,487,247 - Exercisable @ Expire
12p 31/8/2007
6,250,000 - Exercisable @ Expire
40c 30/9/2008
400,000 - Exercisable @ Expire
---------- ---------- 35c 30/11/2009
------------ ------------
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.
2 This statement does give a true and fair view of the matters disclosed.
Sign here: Date: 23 January 2006
(Director/Company Secretary)
Print name: Max D.J. Cozijn
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGGGZMLFGGVZG
Elkedra (LSE:EDN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Elkedra (LSE:EDN)
Historical Stock Chart
From Jul 2023 to Jul 2024
