1st Quarter Results
30 October 2003 - 9:31PM
UK Regulatory
RNS Number:4753R
Reefton Mining N.L.
30 October 2003
REEFTON MINING NL
QUARTERLY ACTIVITIES REPORT
FOR THE PERIOD ENDED 30 SEPTEMBER 2003
SKELETON COAST DIAMOND PROJECT - NAMIBIA
EPL's 2698, 2699, 2700
Highlights
Diamond Bulk Sampling - Skeleton Coast - Namibia
*Recovery of an impressive 216 diamonds for 50.44 carats of high quality
diamonds of up to 2.3 carats in size this quarter from early sorting of
processed concentrate.
*Recovery includes several fancy yellow diamonds with the largest 0.78
carats.
*Grades of up to 15.22 carats per hundred tonnes (chpt) now returned from
fossil beaches.
*Grades of up to 9.4 cpht returned from the modern beach where the dynamic
system of marine processes are still actively depositing diamonds in the
concession area.
*Reefton to acquire an 80% interest in a strategic 90 kilometre length of
the Skeleton Coast, taking coverage to 310 kilometres of the coastline.
*Exploration has located extensive substantial fossil beach deposits, 40
to 60 kilometres north of the current sampling sites.
Stage 2 Bulk Sampling Programme
Following the success of the first bulk sampling programme, the Stage 2
programme was formulated to determine the diamond content in the areas where
diamonds were previously recovered as well as other identified target areas.
The samples are currently recovered from trenches with a 20 tonne excavator.
Trenches up to 10 metres wide are being excavated. The Stage 1 programme
trenches were excavated up to 0.75 metres in width with a backhoe and did not
always reach bedrock. The material is screened, generating a sized product of
2mm to 14mm, which is being trucked to the DMS stockpile ore pad. Wet processing
of the concentrate advances through a trommel for minor scrubbing to a 10 tonne
per hour Dense Media Separation (DMS) plant utilising ferro-silicon as the
media. The wet concentrate is separated by a jig into sized fractions for hand
sorting under the company's security system.
The purchase of additional equipment, consisting of the wheel mounted 20 tonne
excavator and customised industrial vacuum unit has enabled the Company to
excavate trenches up to 10 metres wide which are sampled in 20 metre long
sections (termed "cells"), and fully excavate the oldest "conglomerate" lying
directly on the basement. This layer of oxidised beach gravel contains abundant
pebbles and heavy minerals with boulders and cobbles.
The operation has been supervised by a team of experienced Australians including
Bruce Michelly who has 28 years of experience in diamond deposit evaluation,
particularly with Ashton Diamonds for 20 years.
Sample Site Trench T2
DMS (dense media separation) processing and sorting of samples is complete for
the T2 trench site located on the extensive 10 metre elevated fossil beach. The
60 metre width of fossil beach gravel tested was diamondiferous throughout,
returning an in-situ grade of up to 15.22 carats per hundred tonnes. This sample
contained a total of 9.51 carats of diamonds recovered from 62.5 tonnes
(specific gravity is 1.8). The 60 metres width of fossil beach was sampled in
three cell divisions of 10 metres width.
To date a total of 178 diamonds have been recovered from the T2 trench site
totalling 41.22 carats. The diamonds are of good size and very high gem quality,
averaging 0.23 carats per stone. The largest diamond was 1.24 carats. Several
fancy yellow diamonds have been recovered with the largest being 0.78 carats.
Modern Beach Sampling Result
Todays beach, termed a "modern beach", located above the surf zone is
continually forming and depositing diamonds. An initial bulk sample of 10.8
tonnes of gravel from the modern beach was taken and 5 diamonds recovered.
The sample, being wet, was processed directly through the scrubber and Dense
Media Separation Plant (DMS) and returned 1.02 carats equating to a grade of 9.4
carats per hundred tonnes (cpht).
It is significant that diamonds lying on the ocean floor are still being
transported by marine processes. The dynamic system of diamond deposition is
still active along the current shoreline as it has been in the past where it
built stacked fossil beach deposits up to 2 kilometres inland.
Continuing Stage 2 sampling
In all to date, 216 diamonds totalling 50.44 carats have been recovered.
Processing and hand sorting is continuing for the trench T 3, T 4 and T 15
sites.
A larger diamond, 2.3 carats, was recovered from the sample site(T3).
Exploration
Continuing mapping of additional beaches has determined extensive deposits which
are not yet tested:
*the modern beach at the existing shoreline
*the Recent beach at 3 metres above sea level
*a series of beaches between the 3 metre and the 10 metre beach
*the oldest exposed fossil beaches at 15 to 30 metres elevation (1500 to
2500 metres from the coast)
*Beaches located 50 to 90 metres above sea level covered by shallow sand
along the interpreted continental cliff within the company's concessions
inland from the modern shoreline.
Northern Target Areas
Field examination to the north covering the coast 20 to 60 kilometres north of
the current bulk sampling activities has located sites previously prospected
from the 1950's to 1970, from Rocky Point through to Sarusas. The Namibian
Ministry of Mines and Energy records state that 20 carats were recovered from
the Rocky Point area and 16.4 carats were recovered from the remote location at
Sarusas, some 60 kilometres to the north of the current sampling site. Extensive
fossil gravel beaches occur both along strike from these localities and further
inland at greater elevations. Sampling sites have been selected during mapping.
Acquisition of EPL 2742 - Kunene River, Skeleton Coast Namibia
Subsequent to the end of the quarter the company announced that it has entered
into an agreement to acquire an 80% interest in EPL 2742 - an important diamond
concession covering 90 kilometres of the diamond bearing Skeleton Coast. The
concession is up to 8 kilometres wide and diamonds are expected from the modern
beach on the shoreline, and fossil beaches from various geological periods with
the oldest being located up to 2 kilometres inland.
This concession adjoins the company's existing concessions, to the north,
bringing the total coverage of the diamond bearing beach deposits held by the
company to a substantial 310 kilometres.
Further to the north in Angola, a corridor of diamondiferous kimberlites trend
south east into this concession area. This corridor contains kimberlites and
extensive rich alluvial diamond deposits.
Diamond bearing rivers draining this corridor include the Kunene River on the
BORDER="0" of Namibia and one of its ancient outlets - the Angra-Fria River
System. This reaches the coast within the southern portion of this concession,
and is most likely to have also been a transport corridor for diamonds in the
past. The strong north flowing Benguela Current distributes the diamonds
emerging from the river outlets, along the coast. The marine processes then
concentrate the diamonds into beach gravels.
The Company's Current Objective
Along with the Stage 2 trenching and bulk sampling the Company has recruited
suitably qualified and experienced professionals to plan for, and implement the
evaluation and development of a strategy aimed toward resource definition within
the Skeleton Coast leases, and the production of a conceptual mine development
plan. This will culminate in a study of the capital and operating costs of a
minimum one million tonne per annum operation to process the diamondiferous
beach sand and gravels.
Upon the completion of the Stage 2 programme the Company will have an indication
of the grades of various beach deposits from which it will be in a position to
progress toward the delineation of a resource of an initial 3-5 million tonnes,
increase the knowledge on the presence of diamonds in new target areas, and
improve the understanding of the relationship between gravel, conglomerate, sand
profiles and the diamond content.
ERONGO PROJECT - NAMIBIA
EPL's 2805 - 2811 (100%)
The project comprises of a group of exploration licenses in Central Namibia with
a 150 kilometre strike length and 50 kilometre width resources of gold, tin and
important prospects for industrial minerals (rutile, tungsten). Prospects for
precious and base metals exist in several geological environments.
The tenements have world class mines in close proximity; the world's largest
open cut hard rock tin mine (Uis), the world's largest Uranium mine (Rossing)
and the Navachab gold Mine (reserves 5.7 million tonnes grading 1.7 g/t Au,
resources 81.6 million tonnes containing 2.8 million ounces of gold).
Work during the quarter continued assessments of the mineralised targets, with
aeromagnetic data evaluation and comparisons of early exploration data.
The Eureka monazite prospect is also attractive because of its indication of
large resources at depth and the low concentration of ThO2 (0.7%mass). Monazite
is a primary ore of rare earth metals notably thorium, cerium, lanthanum and
neodymium. Of economic interest is the rather high concentration of Eu2O3 at
0.073% mass in the monazite. During the separation and enrichment process the
other rare earths will report to the final product.
Tantalite
Exploration has delineated several zones of tantalite bearing rare metal
pegmatites including the Sandamap-Erongo belt of 50 kilometres length and 2
kilometres width containing numerous large rare metal pegmatite bodies. Grades
of up to 8 pounds per tonne Ta2O5 have been returned during exploration
sampling. Joint venture partners for the project are being sourced.
COOLGARDIE GOLD PROJECT (100%) - WESTERN AUSTRALIA
E15/284 (Bonnievale)
P16/1410-1412, P15/3037 (Star of Fremantle)
The tenements were surrendered during the quarter.
For and on behalf of
REEFTON MINING N.L.
B S MOORE
Chairman
This report accurately reflects information compiled by Mr G.R. Hemming,
MAusIMM.,MAIG., a Director of Roscoria Pty Ltd, who is a competent person as
defined by the Australasian Code for Reporting of Identified Minerals Resources
and Ore Reserves and accurately reflects the information compiled by the
competent person.
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98.
Name of entity
Reefton Mining N.L.
ACN or ARBN Quarter ended ("current quarter")
------------------- ------------------
010 546 675 30 September 2003
------------------- ------------------
Consolidated statement of cash flows
------------ ------------
Current Year to
quarter date
Cash flows related to operating activities $A'000 (3 months)
$A'000
------------ ------------
1.1 Receipts from product sales and
related debtors
1.2 Payments for (a) exploration and (214) (214)
evaluation
(b) development
(c) production
(d) administration (351) (351)
1.3 Dividends received
1.4 Interest and other items of a 7 7
similar nature received
1.5 Interest and other costs of finance (8) (8)
paid
1.6 Income taxes paid
1.7 Other (provide details if material)
----- ------------ ------------
-----------------------
Net Operating Cash Flows (566) (566)
Cash flows related to investing
activities
1.8 Payment for purchases of:
(a) prospects
(b)equity investments
(c) other fixed assets (18) (18)
1.9 Proceeds from sale of: (a) 10 10
prospects
(b)equity investments 7 7
(c)other fixed assets
1.10 Loans to other entities
1.11 Loans repaid by other entities 65 65
1.12 Other (provide details if material)
------------ ------------
Net investing cash flows 64 64
----- ----------------------- ------------ ------------
1.13 Total operating and investing cash
flows (carried forward)
(502) (502)
----- ----------------------- ------------ ------------
1.13 Total operating and investing cash (502) (502)
flows (brought forward) ------------ ------------
Cash flows related to financing
activities
1.14 Proceeds from issues of shares, 528 528
options, etc.
1.15 Proceeds from sale of forfeited
shares
1.16 Proceeds from borrowings 123 123
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other (provide details if material) (31) (31)
Share issue costs ------------ ------------
Net financing cash flows 620 620
------------ ------------
Net increase (decrease) in cash 118 118
held
1.20 Cash at beginning of quarter/year to 20 20
date
1.21 Exchange rate adjustments to item
1.20 ------------ ------------
1.22 Cash at end of quarter 138 138
----- ----------------------- ------------ ------------
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 281
------ 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
-------------------------------------------
N/A
-------------------------------------------
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
--------------------------------------------
N/A
--------------------------------------------
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
--------------------------------------------
N/A
--------------------------------------------
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 500 282
------------- -------------
3.2 Credit standby arrangements NIL
----- ----------------------- ------------- -------------
Estimated cash outflows for next quarter
$A'000
------------------
4.1 Exploration and evaluation 250
------------------
4.2 Development -
----- ----------------------------- ------------------
250
Total
----- ----------------------------- ------------------
Reconciliation of cash
------------------------- ------------ -------------
Reconciliation of cash at the end of the Current Previous
quarter (as shown in the consolidated quarter quarter
statement of cash flows) to the related
items in the accounts is as follows.
$A'000 $A'000
------------------------- ------------ -------------
-------------
5.1 Cash on hand and at bank 22 20
------------ -------------
5.2 Deposits at call 116
------------ -------------
5.3 Bank overdraft
------------ -------------
5.4 Other (provide details)
----- ---------------------- ------------ -------------
Total: cash at end of quarter (item 138 20
----- 1.22) ------------ -------------
----------------------
Changes in interests in mining tenements
----------- ------------- -------- --------
Tenement Nature of Interest Interest
reference interest at at end of
beginning quarter
of
quarter
(note (2))
----------- ------------- -------- --------
6.1 Interests in E15/284 100 Nil
mining tenements
relinquished,
reduced or
lapsed
M15/1324-5 100 Nil
(Applic.)
M16/265 100 Nil
(Applic.)
P15/3037 100 Nil
P16/ 100 Nil
1410-12
----------- ------------- -------- --------
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
-------------- number quoted security (see up per
---------- ---------- note 3) (cents) security
(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 153,312,101 153,312,101
securities
39,595,454 39,595,454 7 cents 1 cent
5,000,000 NIL 25 cents 17 cents
---------- ---------- ---------- ------------
7.4 Changes
during
quarter
(a) Increases
through
issues
(b) Decreases 9,595,454 9,595,454 4.5 cents 4.5 cents
through
returns of
capital,
buy-backs
9,595,454 9,595,454 7.0 cents 1.0 cents
----- ----------- ---------- ---------- ---------- ------------
7.5 +Convertible
debt ---------- ---------- ---------- ------------
securities
(description)
7.6 Changes
during
quarter
(a) Increases
through
issues
(b) Decreases
through ---------- ---------- ---------- ------------
securities
matured,
converted
7.7 Options Exercise price Expiry date
(description
and
conversion
factor)
106,920,392 106,920,392 20 cents 30/11/2003
---------- ---------- ---------- ------------
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 Law 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 October 2003
(Director/Company secretary)
Print name: BRADLEY STEVEN MOORE
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.
== == == == ==
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The company news service from the London Stock Exchange
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