3rd Quarter Results
October 31 2005 - 11:21AM
UK Regulatory
RNS Number:4071T
Leyshon Resources Limited
31 October 2005
LEYSHON RESOURCES LIMITED
SEPTEMBER 2005 QUARTERLY REPORT
Leyshon Resources Limited ("Leyshon" or "the Company") (ASX : LRL) is pleased to
present its Quarterly Report for the period ending 30 September 2005.
During the quarter an expanded diamond drilling programme was completed at the
Zheng Guang gold project in Heilongjiang, northeast China and assay results are
expected within the next few weeks.
Leyshon's strategy is to target underexplored gold and other projects in
Heilongjiang and elsewhere in the region with a view to building an inventory of
resources through the application of the latest exploration techniques designed
to fully test the potential of each project.
Following last year's highly successful 4,500 metre diamond drilling programme
at Zheng Guang, a 10,000 metre follow up programme commenced in August designed
to delineate the project's immediate resource potential. The overall programme,
which is now complete, increased to around 12,100 metres.
Two additional rigs with shallow angle drilling and larger core capacity were
mobilised to test a large proportion of the higher grade mineralization
comprised in steeply east-dipping veins within the west dipping faults. These
angled holes, drilled both across and down the dip of the primary west dipping
faults, have confirmed the presence of zones, dense vein netweorks and
intersected new east-west striking mineralized veins not recognized in previous
work. Assay results on this drilling are expected within the next few weeks.
The drilling has confirmed the overall size of the Zheng Guang system and
highlighted areas for potential expansion, particularly to the north-west. The
results will be used as the basis for Feasibility Studies due to commence
shortly.
The Company lodged the necessary documentation for its admission onto the London
Stock Exchange's AIM market and trading in the Company's securities commenced on
26 October.
Leyshon has its main operational office in Beijing and uses this base to review
opportunities for exploration and potential project development elsewhere in
China and neighbouring Mongolia.
For further information contact: Paul Atherley - Managing Director
Tel: +86 10 8528 9256
China Mob: +86 137 1824 3763
International: +61 417 475 038
SEPTEMBER 2005 QUARTERLY REPORT
Zheng Guang Gold Project
Diamond drilling of the Zheng Guang gold project commenced in early August. The
programme was designed to infill drill mineralized blocks defined in the 2004
drill programme, test for extensions at depth and along strike and to gain a
better understanding of the complex geometry of the mineralized system.
An initial programme of 10,000 metres of diamond drilling was planned and by the
end of the quarter 8,270 metres of drilling in 52 holes has been completed by 6
rigs from the Heilongjiang Bureau of Geology and Mineral Resources ("HLJBGMR").
Productivity from these rigs has been substantially better than planned with
good core recoveries and no safety issues recorded.
During the early part of the programme it was recognised that a large proportion
of high-grade zones were associated with north-south striking, steeply dipping
quartz-sulphide veins, generally confined by shallowly west dipping faults. As
the HLJBGMR rigs are limited to drilling near vertical holes, they cannot
adequately define either the geometry or the density of the steeply dipping
veins. This resulted in holes often drilling almost parallel to high-grade veins
which may skew the interpreted grade and thickness of the predicted mineralized
blocks. The HLJBGMR holes may have also drilled between the high-grade veins
thereby potentially underestimating the block grades and size.
To investigate this, two additional rigs with shallow-angle drilling capacity
were mobilized late in the quarter from a Beijing based group, Sinorex Resources
and Environmental Engineering to drill approximately 2,000 metres of oriented
diamond core into key areas.
The angled holes have been drilled down and across the dip of the primary west
dipping faults into zones where steeply dipping veins have been previously
recorded. Preliminary logging and core orientations have confirmed a high
density of generally thin veins in some areas (at times almost stockwork in
nature), confirmed the complexity and significant pinching and swelling of high
grade blocks, particularly to the west, at depth, and defined a new, previously
unrecognised set of high-grade, steeply dipping, east-west oriented veins that
appear associated with the previously announced high-grade breccia intersection
in ZGD0029 (24m @ 28.6 gpt Au).
This expanded programme totaling in excess of 12,100 metres has been completed
subsequent to quarter end. Whilst assay results are yet to be received from the
angled drilling, it is clear that the newly intersected east-west veins may form
an important new style of mineralization that has not yet been tested and may
repeat in other parts of the Zheng Guang mineralized system.
Assays have been received for 637 samples, or less than one quarter of that
expected from the programme. A summary of results received to date are provided
in Table 1. High grade intersections have been recorded, but it is too early in
the programme to define the significance of these.
Table 1. Selected drilling results from Zheng Guang
Hole Co-ordinate Co-ordinate From To Interval Gold Grade
Number (northing) (easting) (m) (m) (m) (gpt Au)
-------- -------- -------- ----- ----- -------- --------
ZGD032 9,900 49,200 46.0 49.0 3.0 2.6
ZDG034 9,840 49,300 147.0 149.0 2.0 3.8
164.0 166.0 2.0 9.1
ZGD035 9,860 49,200 62.0 70.0 8.0 1.6
ZGD036 9,855 49,250 54.0 58.0 4.0 2.9
62.0 64.0 2.0 6.9
135.0 141.0 6.0 1.7
ZGD037 9,900 49,150 107.0 110.0 3.0 4.1
ZGD038 9,800 49,300 107.0 118.0 11.0 3.7
121.0 127.0 6.0 1.8
158.0 167.0 9.0 3.7
ZGD039 9,840 49,200 56.0 68.0 12.0 9.1
ZGD040 9,815 49,250 121.0 126.0 5.0 2.9
160.0 165.0 5.0 6.4
ZGD045 9,695 49,250 253.0 257.0 4.0 4.0
413.0 415.0 2.0 4.3
ZGD047 9,840 49,100 147.0 149.0 2.0 10.1
Note - These are preliminary results.
Cutting and assaying the large amount of mineralized core now currently being
logged is continuing. Commencement of 3D geological modeling, completion of
metallurgical domaining and sampling in preparation for metallurgical test work
is currently underway.
Feasibility Studies will commence once the final assays and the metallurgical
testwork results are received.
Background to the Zheng Guang Gold Project
Leyshon became one of the first foreign mining companies to establish a formal
presence in the mineral rich province of Heilongjiang when it established the
Sino foreign Joint Venture Company Black Dragon Mining Company Limited (Black
Dragon) with the HLJBGMR. Leyshon is earning 70% of Black Dragon and has the
right to increase its equity to 90%.
Duobaoshan Copper Project
The Company has a joint venture agreement with the HLJBGMR for the development
of Duobaoshan. The Company is aware that during this period of strong copper
prices and demand for copper concentrates in China, two Chinese companies have
also made a development proposal for the project.
It is the Company's view that the work it has undertaken on the project over the
past two years and its relationship with the HLJBGMR (the same partner it has
for the Zheng Guang gold project) puts the Company in a strong position for it
to be considered to participate in the development of the project, preferably as
a member of a consortium made up of the Chinese companies, the HLJBGMR and
Leyshon. The Company has commissioned Ausenco to undertake a scoping study on
the project to enable it to determine whether to proceed with a development
proposal.
New Business Opportunities
The Company continues to evaluate a number of acquisition and development
opportunities both within China and its neighbouring countries taking advantage
of its operating base in Beijing and knowledge gained operating in the country
over the past two years.
Corporate
The Company lodged the necessary documentation for its admission onto the London
Stock Exchange's AIM market and trading in the Company's securities commenced on
26 October.
Leyshon has the majority of its institutional shareholders based in London and
expects that its future capital requirements will be met from this market. This
provides a further competitive advantage for attracting and completing new
business opportunities in China, which are often seeking access to European
capital markets.
Future changes to the Board are expected which will reflect the orientation of
the Company to London and China. In line with this, Non Executive Director Mr
Gary Pearce resigned during the quarter and his contribution to the Company's
recent achievements is noted and appreciated.
The Company has appointed Seymour Pierce as its nominated advisor and broker, a
leading provider of corporate broking and corporate finance to listed companies.
Geological Information
The information in this report relating to Exploration Results, Mineral
Resources or Ore Reserves is based on information compiled by Mr Greg Jones, a
full time employee of the Company, who is a member of the Australasian Institute
of Mining and Metallurgy.
Mr Jones has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which
he is undertaking to qualify as a Competent Person as defined in the 2004
Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves'. Mr Jones consents to the inclusion in the report of
the matters based on his information in the form and context in which it
appears.
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: Leyshon Resources Limited
ABN Quarter ended ("current quarter")
75 010 482 274 30 September 2005
Consolidated statement of cash flows
Cash flows related to operating activities Current Year to date
quarter (3.months)
$A'000 $A'000
1.1 Receipts from product sales and related - -
debtors
1.2 Payments for (a) exploration and (1,411) (1,411)
evaluation
(b) development - -
(c) production - -
(d) administration (387) (387)
1.3 Dividends received
1.4 Interest and other items of a similar 112 112
nature received
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Other - Business development (69) (69)
Net Operating Cash Flows (1,755) (1,755)
Cash flows related to investing
activities
1.8 Payment for purchases of: - -
(a) prospects - -
(b) equity investments (3) (3)
(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 2 2
- Security bonds
Net investing cash flows (1) (1)
1.13 Total operating and investing cash flows (1,756) (1,756)
(carried forward)
1.13 Total operating and investing cash flows (brought (1,756) (1,756)
forward)
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 - -
1.18 Dividends paid - -
1.19 Other - capital raising costs - -
Net financing cash flows - -
Net increase (decrease) in cash held (1,756) (1,756)
1.20 Cash at beginning of quarter/year to date 9,489 9,489
1.21 Exchange rate adjustments to item 1.20
1.22 Cash at end of quarter 7,733 7,733
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 102
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
Payments include executive remuneration, director's fees, company
secretarial services and provision of a fully serviced office.
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
Not Applicable.
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
Not Applicable.
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 - -
3.2 Credit standby arrangements - -
Estimated cash outflows for next quarter
$A'000
4.1 Exploration and evaluation 750
4.2 Development -
Total 750
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown Current Previous
in the consolidated statement of cash flows) to the related quarter quarter
items in the accounts is as follows.
$A'000 $A'000
5.1 Cash on hand and at bank 1,209 1,571
5.2 Deposits at call 6,524 7,918
5.3 Bank overdraft - -
5.4 Other (provide details) - -
Total: cash at end of quarter (item 1.22) 7,733 9,489
Changes in interests in mining tenements
Tenement Nature of Interest at Interest at
reference interest beginning of end of
quarter quarter
(note (2))
6.1 Interests in mining None - - -
tenements relinquished,
reduced or lapsed
6.2 Interests in mining None - - -
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
number quoted per security up per
(see note 3) security (see
(cents) note 3)
(cents)
7.1 Preference 1,000 - Not Not
+securities Applicable Applicable
(description)
7.2 Changes during quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital,
buy-backs,
redemptions
7.3 +Ordinary 131,466,558 131,466,558 Not Not
securities Applicable Applicable
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 10,000,000 - Exercise Expiry date
(description and price
conversion
factor)
8,500,000 - $0.20 each 30 June
2007
2,700,000 - $0.30 each 30 June 2007
31 Dec 2007
$0.35 each
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 (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
Date: 31 October 2005
(Company secretary)
Print name: MARK PEARCE
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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