December 2005 Quarterly
January 31 2006 - 5:48AM
UK Regulatory
RNS Number:6795X
GVM Metals Ltd
31 January 2006
For immediate release 31 January 2006
GVM METALS LIMITED
("GVM" or the "Company")
REPORT FOR DECEMBER 2005 QUARTER
Highlights
*Shares commenced trading on the Alternative Investment Market ("AIM") of
the London Stock Exchange on 16 December 2005.
*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 quarter.
* 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 quarterly profit before interest and tax increased by 18%
compared to the September 05 quarter 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 quarter. 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 quarter and rutile is expected to commence in the current
quarter.
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 quarter, 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 quarter amounted to A$146,000
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 quarters 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 quarter.
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 quarter, were
received. Hole GVD137 returned a downhole intersection of 8m @ 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 sericite-carbonate 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 KRC0182-190) 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
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
GVM Metals Limited
ABN Quarter ended ("current quarter")
------------------- ------------------
98 008 905 388 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 6,853 16,415
debtors
1.2 Payments for (a) exploration and evaluation (7,461) (15,509)
(b) development (344) (625)
(c) production
(d) administration
1.3 Dividends received
1.4 Interest and other items of a similar nature 10 19
received
1.5 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 (15) (15)
(b) equity investments (68) (73)
(c) other fixed assets
1.9 Proceeds from sale of: (a) prospects 155 155
(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 72 67
----------- ------------
1.13 Total operating and investing cash flows (1,190) (134)
------ (carried forward) ----------- ------------
------------------------
1.13 Total operating and investing cash flows (1,190) (134)
------ (brought forward) ------------ ------------
----------------------
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 quarter/year to date 1,210 633
1.21 Exchange rate adjustments to item 1.20 55 55
------------ ------------
1.22 Cash at end of quarter (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
quarter
$A'000
-------------
-------------
1.23 Aggregate amount of payments to the parties included in 243
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
-------------------------------------------
-------------------------------------------
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
--------------------------------------------
--------------------------------------------
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 5,848 5,753
------------- -------------
3.2 Credit standby arrangements
----- ----------------------- ------------- -------------
Estimated cash outflows for next quarter
$A'000
------------------
4.1 Exploration and evaluation
------------------
4.2 Development
----- ----------------------------- ------------------
Total
----- ----------------------------- ------------------
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 1,323 1,663
------------ -------------
5.2 Deposits at call - -
------------ -------------
5.3 Bank overdraft (1,892) (453)
------------ -------------
5.4 Other (provide details) - -
----- ---------------------- ------------ -------------
Total: cash at end of quarter (item 1.22) (569) 1,210
----- ---------------------- ------------ -------------
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
tenements relinquished, -------------- --------- -------- --------
reduced or lapsed
Tenement Nature of Interest at Interest
reference interest beginning of at end of
quarter quarter
(note (2))
-------------- -------- --------
---------
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 Amount paid up
-------------- number quoted per security per security
---------- ---------- (see note 3) (see note 3)
(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 27,698,387 27,698,387
securities ---------- ---------- ---------- ------------
7.4 Changes during
quarter
(a) Increases
through issues
(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 75,000 - Exercise Expiry date
(description and price
conversion factor)
$1.92 30 September
---------- ---------- ---------- 2006
------------
7.8 Issued during
quarter ---------- ---------- ---------- ------------
7.9 Exercised during Nil Nil
quarter ---------- ---------- ---------- ------------
7.10 Expired during Nil Nil
------ 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 (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 quarterly report provides a basis for informing the market how the
entity's activities have been financed for the past quarter 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 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 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.
This information is provided by RNS
The company news service from the London Stock Exchange
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