RNS Number:7625I
Reefton Mining N.L.
14 March 2003
REEFTON MINING NL
INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2002
DIRECTORS' REPORT
Your directors present their report on the company and its controlled entities
for the financial half year ended 31 December 2002.
REVIEW OF OPERATIONS
SKELETON COAST DIAMOND PROJECT (100%) - NAMIBIA
EPL 2698 - 2700
During the 6 months Storm Diamond Mining Company (Pty) Ltd ("Storm") - a wholly
owned Namibian subsidiary of Reefton - completed an initial exploration
programme to test for diamonds in northern Namibia over a 22 kilometre long
section of the 220 kilometres covered by Exclusive Prospecting Licenses.
The programme culminated in the completion of bulk sample concentrate processing
in December and the recovery of a substantial amount of diamonds. A high level
of success was demonstrated with eight of the 13 trench sites containing
diamonds, yielding a total of 264 stones weighing 63.76 carats. The largest
diamond weighed 1.48 carats. In all, 7 stones larger than 0.99 carats were
found, accounting for 8.95 carats, almost 14% of the total weight of the parcel.
The diamonds are of uniformly high quality, being very clear with very few
inclusions. With few exceptions they are white (colourless) with very few very
pale yellow or pale brown varieties present although rare grey and green
varieties were noted. They are predominantly well-formed dodecahedral forms,
with a few impressive flat-faced octahedra.
The results exceeded expectations in recovering an abnormal quantity of larger
diamonds and returning an average stone size of 0.24 carats. Also the presence
of diamonds over the entire 22 kilometres of coast first tested is significant.
Equipment and camp facilities from Australia, Johannesburg, United Kingdom and
Walvis Bay (Namibia) were mobilised to site and assembled at Mowe Bay. This
field work began in July with company owned earthmoving equipment, trucks, a
large dry screening plant, a 10 tph gravel washing and Dense Media Separation
plant together with camp and support facilities being mobilised to the field
base at the Westies site approximately 23 kilometres north of Mowe Bay. A
programme of trenching and bulk sampling began in September. The aim of the
programme was to gain an understanding of the distribution and geology of
diamond bearing beaches across the coastal plain of up to 3 kilometres width.
The +2mm to -12mm product from dry screening was be further concentrated by the
Company's DMS plant on site. A jig classified and graded the heavy minerals for
hand sorting. The volume extracted to date is a statistically significant volume
to determine the presence and distribution of diamonds. Further detailed work
will be required to determine diamond grade and distribution for individual
beach deposits.
The geological logging of the beach deposits has determined several layers of
gravels of different ages overlying each other. Locally a 0.5 to 1.0 metre thick
gravel layer lies on the basement and one to four younger deposits are separated
vertically by heavy mineral sands of 0.1 to 1.5 metre thickness. The gravels
contain abundant cobbles and boulders up to 0.5 metre in thickness and variable
sand and pebble content. Commonly the +2mm to -12mm size fraction is 4% by
volume. The deposits locally contain an abundance of heavy pebbles and cobbles
composed of ironstone, jasper, pyroxenite, garnet, ilmenite, zircon and iron
oxides. Some of the gravel layers have been exposed to chemical and aeolian
weathering over long periods of time before other beach deposits accumulated on
top.
The Company's geologists have identified gravel beach deposits at various
elevations:
Beach Elevation Comment
Modern beach 0 - 3 metres Close to shoreline
Recent beach 3 - 5 metres Separates modern and fossil deposits
Fossil beaches 5 & 7 metres Oldest beaches overlain by younger
Fossil beach 10 metres Multiple complex beaches
Fossil beach 20 - 25 metres Oldest and farthest inland.
The exploration philosophy is to gain a statistically representative sample of
the various beach gravel deposits at several points along strike. The Modern
beach at Mowe Bay EPL 2699 is well developed for both gravel potential and for
heavy minerals over a distance of at least 20 kilometres. The 5, 7 and 10 metre
beaches have been mapped from 5 to 20 kilometres north of Mowe Bay and again
mapped from 25 to 30 kilometres north of Mowe Bay. The 20 - 25 metre elevated
beaches have been mapped from 5 to 20 kilometres north of Mowe Bay and from 1.5
to 2 kilometres inland from the coastline. All the gravel deposits are similar
in composition varying primarily in sand content. Well packed beaches lying on
bedrock has up to 70% sand while overlying beaches contains up to 85% sand.
The Phase I programme consisted of the excavation of 31 samples from 13 trench
sites over a variety of raised fossil beach terraces to test these deposits for
the presence of diamonds. No overburden exists in the area. The 31 bulk samples
(totalling 11,977 tonnes of raw beach material) were processed through the DMS
and sorted for the recovery of diamonds. Twenty (20) samples aggregating 7544
tonnes of beach material reduced to 467 tonnes of concentrate were positive,
yielding a total of 264 diamonds weighing in aggregate 63.76 carats. The largest
stone recovered was 1.48 carats.
Diamonds were recovered from samples spread over the entire length of the Phase
I exploration area within the beach terrace deposit system. The most southerly
trench to yield diamonds and the most northerly positive sample are separated by
a distance of 22 kilometres. This represents only a small part of the 220
kilometre long belt of prospective coastline held under mineral title by the
Company.
No attempt has been made to determine the diamond grade of the gravel units
tested in the program. The objectives of this program were to determine the
presence of diamonds in a range of geological units and to gain some insights
into the relative frequency of their occurrence between these units. Economic
criteria cannot be considered until the basic facts are established regarding
the diamond potential of the area under investigation. Storm's Phase I program
has established the process of systematic investigation of only a small part of
the area under title.
Also in this Phase I exploration programme excavation of the trenches did not
penetrate into the gullies and potholes of the bedrock. Now that the presence of
significant diamonds is established the undulating jointed and fissured surface
of the bedrock can be fully excavated. It is well known that along the diamond
bearing coast deposits of Namibia and Namaqualand, significant diamond
concentrations have been recorded from non-basal gravels however generally the
diamonds are located immediately above upon or within joints and fissures in the
bedrock surface. The presence of joint systems in the bedrock facilitates the
development of gullies and potholes where local extreme turbulence concentrates
the diamonds. The richness of some such potholes and gullies is legendary.
ERONGO PROJECT (100%) - NAMIBIA
EPL 2805 - 2811
EUREKA RARE EARTH DEPOSIT - NAMIBIA
Reefton holds 100% of a 7,000 square kilometre group of exploration licenses in
Central Namibia covering the majority of 2 extensively mineralised pegmatite
belts containing tantalite, tin, rutile, monazite and gemstones. Resources of
gold, tin and graphite also exist within the leases. Important prospects for
industrial minerals (rutile, tungsten) occur. Prospects for precious and base
metals exist in several geological environments. Work is continuing to evaluate
this extraordinary mineralised geological environment.
Consistent with the scale of deep seated geological structures the tenements
have world class mines in close proximity. The mines are the worlds largest hard
rock tin mine (Uis); the worlds largest Uranium mine (Rossing); and the Navachab
gold Mine (reserves 5.7 million tonnes @ 1.7 g/t Au, resources 81.6 million
tonnes grading 1.06 g/t Au for 2.8 million ounces of gold). The main geological
structures within Reefton's tenements are reported as auriferous mega shears and
controlled the majority of the mineralisation emplacement.
Present research suggests that four possible genetic associations of gold
mineralisation occur within the tenement area. These include a Bi-graphite
association in specific marble horizons, pyrrhotite-skarn mineralisation (often
associated with magnetic anomalies), shear zones (usually in Kuiseb schists) and
sheeted quartz vein arrays. The latter appear to be very important at Navachab
and were not recognised during the early development and mining. It now appears
that similar mineralisation is present at some of the other prospects. This
style of mineralisation may occur with any of the other styles, and there fore
have been easily overlooked at other prospects including the Sandamap Gold
Prospect. The Navachab gold mine has also just been given an extended life for
another 7 years.
A carbonatite hosted monazite (rare earth) occurrence has been located on the
Eureka tenement located 2 kilometres north of the highway and railway to Walvis
Bay the country's port city. The coarse grained deposit is exposed over a 400
metre strike length and is up to 20 metres in true width. Microscopic thin
section work on surrounding rock types shows strong alteration possibly due to a
large mineralised intrusive at depth.
Monazite is a primary ore of rare earth metals notably thorium, cerium,
lanthanum and neodymium. All of these metals have various industrial uses and
are considered valuable. Monazite concentrate is listed as trading at US$400 per
metric tonne from 1997 to 2000. The wide variety of uses are based on the rare
earths catalytic activity, electrical and magnetic properties and the ability to
enhance metallurgical properties of alloys over a range of temperatures. Cerium
is also used in glass manufacture for television and computer screens and in
automotive catalytic converters.
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
containing high levels of tantalite, tin and other rare metals.
COOLGARDIE GOLD PROJECT (100%) - WESTERN AUSTRALIA
E15/284 (Bonnievale)
P16/1410-1412, P15/3037 (Star of Fremantle)
(Goldfields Exploration Pty Ltd earning a 90% interest)
The Company is seeking a joint venture partner to evaluate of potential gold and
nickel targets.
On Star of Fremantle, P16/1410-1412, P15/3037, joint venture operators Kundana
Gold Pty Ltd (a wholly owned subsidiary of Goldfields Exploration Pty Limited)
are continuing exploration.
STATEMENT OF FINANCIAL PERFORMANCE
FOR THE HALF YEAR ENDED 31 DECEMBER 2002
Economic Entity
31 December 31 December
2002 2001
$ $
Revenue from ordinary activities 34,958 53,294
Administrative expenses (511,087) (376,709)
Depreciation expense (40,971) (40)
Exploration and development written off (2,115) (19,790)
Other 143,430 (185,161)
_____________ _____________
Loss from ordinary activities before income tax expense (375,785) (528,406)
Income tax expense relating to ordinary activities - -
______________ _____________
Net loss from ordinary activities after related income
tax expense attributable to members of the parent entity (375,785) (528,406)
______________ ______________
Increase in asset revaluation reserve - -
Total revenues, expenses and valuation adjustments
attributable to members of the parent entity and
recognised directly in equity. - -
Total changes in equity other than those resulting from (375,785) (528,406)
transactions with owners as owners
______________ _____________
Basic earnings per share (cents per share) (0.25) (0.43)
Diluted earnings per share (cents per share) (0.22) (0.06)
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2002
Economic Entity
31 December 30 June
2002 2002
$ $
CURRENT ASSETS
Cash assets 257,492 1,576,249
Receivables 416,686 502,210
Other financial assets 36,953 54,125
______________ ______________
TOTAL CURRENT ASSETS 743,873 2,132,584
______________ ______________
NON-CURRENT ASSETS
Other financial assets 62,000 50,000
Property, plant and equipment 619,262 407,648
Other 9,070,607 8,323,477
______________ ______________
TOTAL NON-CURRENT ASSETS 9,751,869 8,781,125
______________ _____________
TOTAL ASSETS 10,495,742 10,913,709
______________ _____________
CURRENT LIABILITIES
Payables 95,091 137,273
_____________ ______________
TOTAL CURRENT LIABILITIES 95,091 137,273
_____________ ______________
TOTAL LIABILITIES 95,091 137,273
______________ ______________
NET ASSETS 10,400,651 10,776,436
______________ _____________
EQUITY
Contributed equity 12,572,679 12,572,679
Reserves 7,551,990 7,551,990
Accumulated losses (9,724,018) (9,348,233)
______________ ______________
TOTAL EQUITY 10,400,651 10,776,436
______________ ______________
STATEMENT OF CASH FLOWS
FOR THE HALF YEAR ENDED 31 DECEMBER 2001
Economic Entity
31 December 31 December
2002 2001
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (427,165) (460,775)
Interest received 25,598 57,073
Payment for exploration and development (749,080) (368,352)
______________ ______________
Net cash provided by (used in) operating activities (1,150,647) (772,054)
______________ _____________
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for purchase of property, plant and equipment (258,485) (965)
Purchase of equity investments - (35,192)
______________ _____________
Net cash provided by (used in) investing activities (258,485) (36,157)
______________ ______________
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares - 2,978,726
Commission on capital raising - (136,240)
Proceeds from borrowings 1,765 -
Loans to other entities - (250,000)
Repayment from borrowings 88,610 -
_____________ ____________
Net cash provided by (used in) financing activities 90,375 2,592,486
_____________ ____________
Net increase/(decrease) in cash held (1,318,757) 1,784,275
Cash at 1 July 2002 1,576,249 1,190,132
_____________ _____________
Cash at 31 December 2002 257,492 2,974,407
_____________ _____________
NOTES
NOTE 1: BASIS OF PREPARATION
The half-year consolidated financial statements are extracted from a general
purpose financial report prepared in accordance with the requirements of
Corporations, Act, 2001, Accounting Standard AASB 1029: Interim Financial
Reporting, Urgent Issues Group Concensus Views and other authorative
pronouncements of the Australian Accounting Standards Board.
It is recommended that this financial report be read in conjunction with the
annual financial report for the year ended 30 June 2002 and any public
announcements made by Reefton Mining NL and its controlled entities during the
half-year in accordance with continuous disclosure requirements arising under
the Corporations Act, 2001.
The accounting policies have been consistently applied by the entities in the
economic entity and are consistent with those applied in the 30 June 2002 annual
report.
The half-year report does not include full disclosures of the type normally
included in an annual financial report.
NOTE 2:
Copies of this interim report are available from the Company's registered
office.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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