TIDMLRL
RNS Number : 3189C
Leyshon Resources Limited
30 April 2012
LEYSHON RESOURCES LIMITED
30 April 2012
MARCH 2012 QUARTERLY REPORT
Leyshon Resources Limited (AIM/ASX: LRL) (the "Company")
announcesthat during the quarter it has continued to progress its
interest in a thermal coal project in Xinjiang, commenced due
diligence on another energy asset in China and has completed a
review of the rehabilitation and potential redevelopment of its
wholly owned Mt Leyshon Gold Project in Queensland.
China Energy Assets
The Company has previously advised that it has completed a
preliminary technical and legal due diligence review on a PRC
entity that holds an exploration licence over a thermal coal
project in the Western Chinese province of Xinjiang.
Management, together with its advisors, has completed the
extensive regulatory and other consents which form the
preconditions for the proposed transaction and is now engaged in
commercial negotiations which it is aiming to bring to a conclusion
in the near future.
Discussions and negotiations on joint venture arrangements have
continued with a large state owned enterprise which, in the event
of successful completion of the transaction, would become the
Company's joint venture partner on the project.
Whilst the Company believes that the asset is attractive, in
that it has the potential to meet its demanding internal investment
criteria, it can give no assurance that these due diligence
investigations, approval processes and/or commercial discussions
will lead to the successful completion of the transaction.
In the course of the due diligence and extensive consultation
and negotiations with various regulatory authorities and other
influential organisations management has formed a very positive
view on the country's growing energy demands, particularly from
Central China.
The revised GDP growth target of 7% for the world's second
biggest economy is best viewed in the context of the once in a
decade leadership change scheduled for later in the year.
Management has had the benefit of discussions with senior
economists, including one of the country's most prominent
economists and a member of the People's Bank of China's Monetary
Policy Committee, who regard this as a target which has been set to
be exceeded. China has a recent history of this. It exceeded its
GDP growth targets for the last two Five Year Plans and also for
each year during this ten year period.
Whilst the rate of growth in the major centres of the coastal
provinces has slowed since they topped US$10,000 GDP per capita,
the major urban centres of the provinces which make up Central
China typically have a GDP per capita a fraction of this and are
now experiencing the double digit growth rates their coastal
counterparts previously enjoyed.
Chongqing, a metropolis of over 70 million people, experienced
over 17% GDP growth in 2011 and is among a large number of fast
emerging cities in Central China that are home to 500 million
people that make up the world's fastest growing major economy.
The Company remains firmly of the view that in light of the
expanding demand for all types of energy within Central China over
the next ten years, high quality energy assets located close to
infrastructure and within transport distance to this market will
become increasingly valuable over time.
In light of this, management has expanded its search for energy
assets in China and has commenced due diligence on an emerging
energy asset which it believes has potentially significant merit in
its own right but has the ability to complement the Company's
potential coal acquisition in Xinjiang.
The Board is well aware that the process to complete an energy
acquisition in China is taking time to reach a conclusion.
Management has advised the Board that, based on its eight years of
experience operating in the country, acquisitions of this nature
are sensitive and that a conservative and patient approach is best
advised until all aspects of the potential transaction have been
materially finalized. It has also advised that in the current
competitive environment the acquisition of high quality assets can
be expected to take time to complete.
Mt Leyshon Gold Project
During the quarter management completed a detailed review of its
wholly owned Mt Leyshon Gold Project. The project operated between
1987 and 2002 as an open pit gold mine producing over 2.5 million
ounces of gold and 2.3 million ounces of silver and paid over $300
million in dividends to its shareholders.
The site has been significantly rehabilitated. A Closure and
Rehabilitation Plan was submitted during the quarter to the
Department of Environment and Resource Management (DERM). Newmont
is performing the rehabilitation on behalf of the company.
Newmont is one of the Company's largest shareholders and has a
world class reputation for social responsibility. It became the
first gold company to be admitted to the Dow Jones Sustainability
World Index in 2007 and has remained there for the past four
years.
The Mt Leyshon site has a stockpile of approximately 12-15
million tonnes of highly mineralised ball mill scats which as part
of the closure plan are able to be reprocessed. A study in 2007 by
consultants to Newmont concluded that treatment of the scats could
produce over 100,000 ounces of gold and at a gold price of US$780
per ounce would generate an operating surplus of $25 million before
capital.
Management has commissioned a review of the scats retreatment in
light of current gold prices and conducted a review of the status
of exploration of the 25 km(2) mining licence at the time of the
mine's closure in 2002. The results show that although extensive
work was done there was no follow up on some very interesting
results due to the prevailing gold price of around US$300 per
ounce.
As a possible complement to the scats retreatment, management
has identified three targets based on previous results that are
worthy of follow up and one potentially large untested cross
cutting structure. The targets include:
1. Mine Porphyry North: based largely on previous drilling which
intersected 72 metres at 2.44 g/t Au.
2. Mine Porphyry South: which has a previously articulated
Exploration Target(1) of 7 million tonnes at 2.4 g/t and a nine
hole drill programme designed to test steeply dipping high grade
shoots located due south of existing high grade shoots.
3. Golden Star: Previous drilling intersected gold
mineralisation in veins and vein sets over intervals 30-100 metres
with grades averaging around 1.1 g/t Au.
4. Mount Mawe East: A large untested cross-cutting structure
with coincident geology, geochemistry and Induced Polarisation
anomaly.
The Company has received a number of approaches from parties
wishing to further test these targets with a view to developing
additional economic resources at the project.
Management is mindful that any redevelopment will need take into
account the Closure and Rehabilitation Plan and the requirements of
DERM.
Cash Reserves
Whilst ensuring that adequate resources are applied at all times
to the evaluation of every opportunity management is mindful of
preserving cash reserves. At quarter end the Company had A$52.0
million in cash, and is due A$0.4 million in term deposit interest
for a total of A$52.4 million (GPB 33.6 million). This is
equivalent to A$ 21 cents per share (14 pence per share).
The Company has not purchased any shares under the previously
announced on- market share buy-back.
For further information contact:
Leyshon Resources Limited
Paul Atherley - Managing Director Tel: +86 137 1800 1914
patherley@leyshonresources.com
Seymour Pierce
Jonathan Wright (Nominated adviser)
Richard Redmayne (Corporate broking)
Tel: +44 (0)207 107 8000
http://www.leyshonresources.com
Background
Leyshon was on the ground in 2003when China opened its mining
sector to foreign investment. It has been fully engaged in China
since then and has its main operating office located in
Beijing.
China's latest Five Year Plan emphasizes the planned
urbanisation of a large number of Central China's rural population
into second and third tier cities lifting the urbanization rate by
4% to 51.5% of the overall population.
This will result in significant increases in infrastructure
spending and power consumption. The Company is planning to invest
in high quality energy assets in China to meet this growing
demand.
Managing Director Paul Atherley is an Executive Committee member
of the China Britain Business Council and serves on a number of
European Union Chamber Working Groups including Energy,
Environment, Carbon and Government Affairs.
COMPETENT PERSON'S STATEMENT
Comments relating to the exploration results and targets have
been compiled by Mr Henry Tebar who is a member of the Australian
Institute of Geoscientists. Mr Tebar was engaged as Exploration
Manager at Leyshon Resources Limited at the time of compilation of
this work and 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 Tebar consents to the inclusion in the report of the matters
based on his information in the form and context in which it
appears.
Note 1: Exploration Target refers to a target for which the
potential quantity and grade is conceptual in nature, that there
has been insufficient exploration to define a Mineral Resource, and
that it is uncertain if further exploration or test work will
result in the determination of a Mineral Resource.
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98,
30/9/2001, 01/06/10.
Name of entity
LEYSHON RESOURCES LIMITED
-------------------------
ABN Quarter ended ("current
quarter")
75 010 482 274 31 March 2012
--------------- -----------------------
Consolidated statement of cash flows
Current quarter Year to date
Cash flows related to operating $A'000 (9 months)
activities
$A'000
---------------- -------------
1.1 Receipts from product sales - -
and related debtors
Payments for (a) exploration
& evaluation
(b) development (333) (1,036)
(c) production - -
(d) administration & Beijing - -
1.2 office (346) (1,360)
1.3 Dividends received - -
Interest and other items
1.4 of a similar nature received 842 2,603
1.5 Interest and other costs - -
of finance paid
1.6 Income taxes paid (53) (152)
Other Mt Leyshon holding
1.7 costs (243) (935)
Net Operating Cash Flows (133) (880)
----- --------------------------------- ---------------- -------------
Cash flows related to investing
activities
Payment for purchases of:
(a) prospects - -
(b) equity investments - -
1.8 (c) other fixed assets (2) (7)
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 - -
Net investing cash flows (2) (7)
---------------- -------------
Total operating and investing
1.13 cash flows (carried forward) (135) (887)
----- --------------------------------- ---------------- -------------
Total operating and investing
1.13 cash flows (brought forward) (135) (887)
----- ---------------------------------- -------
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 - Share buy-back costs - -
------- -------
Net financing cash flows
- -
----- ---------------------------------- -------
Net increase (decrease) in
cash held (135) (887)
-------
Cash at beginning of quarter/year
1.20 to date 52,151 52,902
Exchange rate adjustments
1.21 to item 1.20 (1) -
------- -------
1.22 Cash at end of quarter 52,015 52,015
----- ---------------------------------- ------- -------
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
----------------
Aggregate amount of payments to the parties
1.23 included in item 1.2 137
----------------
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 managing director's remuneration and
non-executive directors' fees.
---------------------------------------------------------------------------
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 400
-------
4.2 Development
-
-------
4.3 Production
-
-------
4.4 Administration 400
-------
Total 800
---- --------------------------- -------
Reconciliation of cash
Reconciliation of cash at the Current quarter Previous quarter
end of the quarter (as shown $A'000 $A'000
in the consolidated statement
of cash flows) to the related
items in the accounts is as follows.
---------------------------------------- ---------------- -----------------
5.1 Cash on hand and at bank 1,281 570
---------------- -----------------
5.2 Deposits at call 50,734 51,581
---------------- -----------------
5.3 Bank overdraft
- -
---------------- -----------------
5.4 Other (provide details)
- -
---------------- -----------------
Total: cash at end of quarter
(item 1.22) 52,015 52,151
----- --------------------------------- ---------------- -----------------
Changes in interests in mining tenements
Tenement Nature of interest Interest Interest
reference (note (2)) at beginning at end
of quarter of quarter
----------- ------------------- -------------- ------------
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 Number quoted Issue price Amount paid
per security up per security
(see note (see note 3)
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
----- --------------------- ------------- -------------- --------------- -----------------
+Ordinary
7.3 securities 246,525,724 246,525,724 Not Applicable Not 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 (description Exercise Expiry date
and conversion price
factor)
------------- -------------- --------------- -----------------
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.
Sign here:
............................................................ Date:
..30 April 2012.
(Director/Company secretary)
Print name: . MURRAY WYLIE.
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 andAASB 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
END
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