Forte Energy NL

May 04, 2010 02:00 ET

Quarterly Activities and Cashflow Report

                                                                                       FORTE ENERGY NL
                                                                                       ACN 009 087 852
                                                                                     ASX/AIM CODE: FTE,
                                                        Telephone: +618 9322 4071, Fax: +618 9322 4073
                                                                                      Quarterly Report

                                                                                            March 2010

Forte  Energy  NL  ('Forte Energy' or 'the Company') (ASX/AIM: FTE) is an emerging international  uranium
company  focused on the exploration and development of a portfolio of uranium assets in the Republics  of
Mauritania and Guinea, West Africa.


Uranium Exploration - Mauritania

-   High-grade  assay results received from 5,400m diamond core resource drilling program  completed
    at Bir En Nar Uranium Project with assays of up to 6,310ppm U3O8 received

-   5,000m  R/C  drilling program at nine prospects across the northern and southern  licence  areas
    completed ahead of schedule with encouraging preliminary field results observed. All radioactive 
    samples have been sent for analysis
-   Maiden  JORC resource for Bir En Nar Uranium Project expected to be announced shortly  following
    receipt of final assay results

-   Bir En Nar site visited by representative of Coffey Mining in preparation for estimation of  the
    initial JORC code-compliant resource

Uranium Exploration - Guinea

-    Encouraging  metallurgical  test  results from Firawa Project indicate  potential  for  economic
     recovery from leaching, with further pre-feasibility optimisation studies continuing
Copper-Cobalt Projects - Australia

-    Sale  of  50%  interest in Maroochydore JV Copper Project in Western Australia to  Aditya  Birla
     Minerals Ltd completed, raising A$2M

-    A$20,000  received  in  February from Elementos Ltd for a 6-month extension  of  its  option  to
     acquire the Millenium Copper/Cobalt project in Queensland, Australia

Republic of Mauritania, West Africa

During  the  Quarter,  the Company continued to focus its exploration efforts on its uranium  exploration
permits at Bir En Nar and near Bir Moghrein in the Zednes region of northern Mauritania.

To view Fig.1 Forte Energy's exploration permits in Mauritania, please open the following link in a 
new window:

The  Bir  En  Nar  prospect is a 900 metre long radioactive zone averaging 50-70 metres  in  width  which
follows  a tectonic structure in a north-west to south-east direction. A smaller parallel zone  occurs  a
few hundred metres to the south-west.

A  5,400 metre program comprising 50 holes of resource diamond core drilling was completed at Bir En  Nar
during  the  Quarter,  following  on  from an initial 4,000 metre Reverse  Circulation  drilling  program
undertaken in 2007 and recent geophysical ground surveys.

Drilling  of  around  4,600m of priority holes in the latest Bir En Nar program was  completed  in  early
January 2010. However, an additional 7 holes were then drilled in order to complete a more extensive 35 x
35 metre sampling grid to enable the resource classification to be undertaken to a depth of 100 metres.

After  experiencing delays in obtaining customs clearance and transporting of the samples  for  analysis,
the Company decided to send samples from the remaining 21 of the 50 holes to Perth, Australia to expedite
processing.  An  initial  JORC  code-compliant resource for Bir En Nar,  to  be  calculated  by  external
consultants Coffey Mining, is expected to be published shortly.

To view Fig.2 Resource drilling program at Bir En Nar, please open the following link in a 
new window:

The  area  is dominated by granites of different modes in an early proterozoic domain. The best parts  of
the mineralisation occur in the vicinity of a characteristic fine-medium grained granite.

The  mineralisation occurs on both sides of a North-West trending fracture zone. Orientated in-fill  core
drilling  has given a better understanding of the mineralisation where the best part is composed  of  5-6
separate  bodies within a 100m wide steeply dipping zone. Two near horizontal faults slightly offset  the
bodies by about 10 metres.

Results  from 2007 drilling included seven holes containing intercepts exceeding 5,000ppm eU3O8,  with  a
maximum intercept of 1.55m at 18,280ppm eU3O8.

A  summary  of  the best assays announced to date from the 2009/10 diamond drilling program  is  provided
Drillhole       from        to  length m       U ppm                 from        to  length m       U ppm
BNRD001           26        33         7         516  including        26        27         1       1,810
BNRD002           22        38        16       1,617  including        27        35         8       2,470
BNRD003            7        12         5       1,038  including         7         8         1       1,870
BNRD004           89        98         9         607  including        90        91         1       1,740
BNRD005           88        92         4       1,711  including        90        91         1       4,410
BNRD006          100       108         8         430  including       103       105         2       1,175
BNRD007          151       156         5       2,326  including       154       155         1       4,890
BNRD012          129       137         8         580  including       134       135         1       1,600
BNRD016           82        85         3       1,729  including        83        84         1       4,160
BNRD017           73        78         5       3,096  including        75        76         1       6,310
BNRD021           43        48         5       1,334  including        45        46         1       5,430
BNRD023           31        50        19         576  including        33        40         7       1,129
BNRD023           67        85        18         525  including        70        71         1       3,690
BNRD027           39        42         3       2,290  including        40        41         1       5,030
BNRD029           88       100        12         374  including        91        92         1       4,120

The  Company's  exploration  permits in Mauritania consist mainly of stony desert  terrain  with  a  thin
weathered  cover underlain by granites and gneisses of the Archaean Reguibat shield complex of  the  West
African  craton.  They  predominantly comprise north-north-west to south-south-east tectonic  structures.
Significant  calcrete deposits occur in places, as well as some sebkhet (dry lake beds) in  the  northern
part of the concessions.

During  2009, Forte Energy carried out extensive field surveys at a number of uranium anomalies contained
within  its  Mauritanian exploration licences. Assay results confirmed the presence  of  bedrock  uranium
mineralisation at Beso, Anomaly 040, Anomaly 068 and Anomaly 245, including 9,300ppm U3O8 from  a  trench
at Anomaly 068.

Later  activity concentrated on the Leg Beija anomaly and the nearby Anomalies 237 and 238. The Leg Beija
anomaly  has  been  found to extend more than 10 kilometres and is up to 500 metres wide.  Sampling  pits
encountered hard calcrete down to more than 3 metres depth with secondary uranium minerals. In the bottom
of some back-hoe pits (3-4 metres depth), the calcrete contained quartz and feldspar fragments of granite
type. Yellow uranium minerals occur frequently in the calcrete as in the brecciated granite.

It  was  recognised from the field surveys that two of the prospects did not show up on previous airborne
surveys.  In  order  to  more carefully investigate the more promising areas and  make  sure  no  uranium
prospect  is missed, new airborne radiometric surveys were commissioned over selected parts of the  Forte
Energy licence areas.

The  surveys  were  completed in February by the German company Terrascan Airborne using  a  light-weight
remote  controlled  aircraft  equipped  with a 4 litre Cs crystal multichannel  spectrometer  and  a  GEM
potassium GSMP40 magnetometer.

Based  on results from the 2009/10 field surveys, the Company commenced an RC short-hole drilling program
in  February  to test nine of the most prospective anomalies. The drilling campaign, which comprised  300
holes totalling 5,000 metres, has been completed successfully and ahead of schedule.

Assay  samples  have  been  despatched for analysis to follow up promising initial  field  readings  from
handheld scintillometers and observations of uranium mineralisation.

To view Fig.3 Forte Energy's licence areas and major anomaly locations, please open the following link in
a new window:

The  RC  drilling  program is used to test promising surface uranium occurrences. Results  from  chemical
analyses  will  identify  those  prospects  that  may  be  dismissed  and  those  that  justify   further
investigation, including follow-up RC drilling.

New  RC  drill  targets  are  also expected to be identified after further  detailed  ground  surveys  on
remaining anomalies is completed.

Republic of Guinea, West Africa

In  July  2009, Forte Energy announced an initial JORC-code compliant uranium resource for its 100%-owned
Firawa  Uranium  Project in Guinea. Using a cut-off grade of 100ppm U3O8, the initial  Inferred  Resource
estimate is 17.7Mt grading 296ppm U3O8 for 11.6 million pounds of contained U3O8. There is potential  for
the resource to be increased as the deposit remains open along strike and down dip.

The  Company has been undertaking initial metallurgical testing to assess the deposit for potential  heap
leach recovery. Following the encouraging results received to date, Forte Energy has forwarded additional
Firawa  samples to Mineral Engineering Technical Services Pty Ltd ("METS") which is carrying out  further
leach testing as a precursor to prefeasibility studies.

The  investigation  has  so  far shown that almost all uranium is associated  with  crandallite.  Further
testing is investigating the effects of acid concentration, temperature and grind size and potential  for
upgrading the ore with gravity separation, to optimise the uranium extraction from the crandallite.

The mineral crandallite, a calcium aluminium phosphate which made up 27% of the composite samples tested,
was identified as the host of 99.99% of the contained uranium. Goethite (41%) and hematite (15%) were the
other  major  components  identified. Carbonates were not detected so the ore is  not  expected  to  show
excessive  acid  consumption in a moderately acidic leach and may also be amenable to alkaline  leaching.
Reducing the iron content with gravity separation before leaching will further improve the recovery.

A  decision  on  whether to conduct further drilling will be considered once the results of leach-testing
are known.

Sale of Australian Copper-Cobalt Projects

Forte Energy remains focussed on the exploration and development of its portfolio of uranium projects  in
West  Africa  as the basis for the establishment of a substantial long-term uranium business. Accordingly
the Company has entered into agreements for the sale of its two copper-cobalt projects in Australia.

In  February  2010, the Company completed the sale of its 50% interest in the Maroochydore  Copper-Cobalt
project to the joint venture exploration manager and joint venture partner, Birla Maroochydore Pty Ltd, a
wholly owned subsidiary of Aditya Birla Minerals Ltd (ASX: ABY).

Under  the  terms of the agreement, Forte Energy received a cash payment of A$2,000,000 and was  released
from any current or future obligations under the joint venture agreement.

Forte  Energy entered into an Option Agreement in August 2009 for the sale of its Millenium Copper/Cobalt
project  near Cloncurry in Queensland, Australia. In February 2010 the Company received A$20,000 in  cash
from  Elementos Ltd (ASX: ELT) for a six month extension to the Option Agreement for the purchase of  the
Millenium project until 7 August 2010.

Under  the terms of the agreement, should Elementos elect to exercise its option to purchase the project,
Forte  Energy will receive a further A$160,000 either in shares in Elementos or in cash, at the  election
of Elementos.

The  June  Quarter promises to be a significant period for Forte Energy, with the imminent JORC  resource
announcement  expected  for  Bir En Nar uranium prospect and assay results  to  come  from  the  recently
completed drilling of nine other uranium prospects in Mauritania.

Mark Reilly
Managing Director
30 April 2010

For further information contact:

Mark Reilly, Managing Director
Forte Energy N.L.                                Tel: +44 (0) 207 887 1557

RFC Corporate Finance - Nomad
Stuart Laing                                     Tel: +61 (0) 8 9480 2506

Alastair Stratton/Tim Graham
Matrix Corporate Capital LLP                     Tel: +44 (0) 20 3206 7000

Conduit PR
Jos Simson/Emily Fenton                          Tel: +44 (0) 207 429 6603


The information in this report that relates to exploration results in West Africa is based on information
compiled  by  Mr.  Bosse  Gustafsson of Forte Energy NL and Mr. Doug Corley of  Coffey  Mining  Ltd.  Mr.
Gustafsson and Mr. Corley have sufficient experience which is relevant to the style of mineralisation and
type  of  deposit  under consideration and to the activity which they have undertaking to  qualify  as  a
Competent  Person  as  defined in the 2004 Edition of the "Australasian Code  for  Reporting  of  Mineral
Resources and Reserves". Mr. Gustafsson is a member of the European Federation of Geologists a Recognised
Overseas  Professional  Organisation ("ROPO"). Mr Bosse Gustafsson is a full time Technical  Director  of
Forte  Energy  NL and is responsible for exploration activities in Mauritania and Guinea. Mr.  Gustafsson
and  Mr. Corley consent to the inclusion in this report of the matters based on their information in  the
form and context in which it appears.

Downhole  gamma logging/probing of drill holes provides a powerful tool for uranium companies to  explore
for,  and evaluate, uranium deposits. Such a method measures the natural gamma rays emitted from material
surrounding  a drill hole out to around 0.5 metre from its centre - the gamma probe is therefore  capable
of  sampling  a much larger volume than that which would normally be recovered from a core  or  RC  hole.
These  measurements  are  used  to estimate uranium concentrations with  the  commonly  accepted  initial
assumption  being  that  the uranium is in (secular) equilibrium with its daughter  products  (or  radio-
nuclides)  which  are  the  principal  gamma  emitters.  If  uranium  is  not  in  equilibrium  (viz.  in
disequilibrium)  -  as a result of the redistribution (depletion or enhancement) of  uranium  and/or  its
daughter products - then the true uranium concentration in the holes logged using the gamma probe will be
higher or lower than those reported in the announcement.

Total  count  gamma  logging  does  not account for energy derived from  thorium  and  potassium  but  is
calibrated  on  the  uranium band and factor applied to account for the average  effect  of  thorium  and
potassium and thus the result is expressed as an equivalent value or ppm eU308. The logging programme was
undertaken  by  Poseidon  Geophysics  (Pty)  Ltd utilising an Auslog  Logging  System  using  instruments
calibrated  at  Pelindaba,  South  Africa, an IAEA accepted and  approved  standard  facility.  Data  was
converted  from  raw  counts  per second of natural gamma rays to eU3O8 using  the  calibration  constant
obtained  from measurements made at the Pelindaba calibration borehole. Poseidon Geophysics  carried  out
regular  checks to validate the accuracy of probe data using a test hole, BNR14, located on site. Uranium
mineralisation grades through this report annotated with a sub-prefix 'e' have been reported  as  uranium
equivalent  grades  derived  from  downhole  gamma  ray  logging  results  and  should  be  regarded   as
approximations only.

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

ABN                                                            Quarter ended ("current quarter")
59 009 087 852                                                           31 March 2010
                                                         Current quarter             Year to date
Cash flows related to operating activities                        A$'000                (9 months)
1.1       Receipts from product sales and related debtors              -                        -
1.2       Payments for  (a)  exploration and evaluation           (1,991)                  (5,650)
               (b)  development                                        -                        -
               (c)  production                                         -                        -
               (d)  administration                                  (452)                  (1,875)
1.3       Dividends received                                           -                        -
1.4       Interest  and  other items of a  similar  nature                                       
          received                                                   114                      252
1.5       Interest and other costs of finance paid                     -                        -
1.6       Income taxes paid                                            -                        -
1.7       Other (provide details if material)                          -                        -
          Net Operating Cash Flows                                (2,329)                  (7,273)
          Cash flows related to investing activities                    
1.8       Payment for purchases of:                                                              
               (a) prospects                                           -                        -
               (b) equity investments                                  -                        -
               (c) other fixed assets                                (11)                     (75)
1.9       Proceeds from sale of:                                                                 
               (a) prospects                                       2,000                    2,000
               (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                                 1,989                    1,925
1.13      Total   operating  and  investing   cash   flows          (340)                  (5,348)
          (carried forward)

Consolidated statement of cash flows

1.13      Total   operating  and  investing   cash   flows          (340)                  (5,348)
          (brought  forward)
          Cash flows related to financing activities                                             
1.14      Proceeds from issues of shares, options, etc.                -                    4,399
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 - Settlement of Guarantee                                                        
          Net financing cash flows                                     -                    4,399
          Net increase (decrease) in cash held                      (340)                    (949)
1.20      Cash at beginning of quarter/year to date                5,945                    6,628
1.21      Exchange rate adjustments to item 1.20                     (27)                    (101)
1.22      Cash at end of quarter                                   5,578                    5,578
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
        Aggregate  amount of payments to the parties included  in  item                   229
        Aggregate amount of loans to the parties included in item 1.10                      0
        Explanation necessary for an understanding of the transactions
        Salaries and rental of office premises
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                                  Nil                    N/A
3.2       Credit standby arrangements                      Nil                    N/A

Estimated cash outflows for next quarter
4.1       Exploration and evaluation                                                  1,500
4.2       Development                                                                     0
          Total                                                                       1,500

Reconciliation of cash
Reconciliation  of cash at the end of  the  quarter  Current quarter             Previous quarter
(as  shown  in the consolidated statement  of  cash           $A'000                       $A'000
flows) to the related items in the accounts  is  as
5.1     Cash on hand and at bank                               2,024                        4,091
5.2     Deposits at call                                       3,554                        2,000
5.3     Bank overdraft                                                                          -
5.4     Other (provide details)                                                                 -
        Total: cash at end of quarter (item 1.22)              5,578                        6,091

Changes in interests in mining tenements
                               Tenement       Nature of interest      Interest   at  Interest  at
                               reference      (note (2))              beginning  of  end       of
                                                                      quarter        quarter
6.1     Interests  in  mining                                                        
        reduced or lapsed
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    Number quoted    Issue price        Amount
                                                                       per security       paid up
                                                                       (see note 3)           per
                                                                            (cents)      security
                                                                                        (see note
                                                                                       3) (cents)
7.1     Preference     +securities                                                               
7.2     Changes during quarter                                                                   
        (a)  Increases through                                      
        (b)  Decreases through
        returns of capital, buy-
        backs, redemptions

7.3     +Ordinary securities          571,158,031        571,158,031                             
                                        2,250,000                  -             25             1
7.4     Changes during quarter                                                                   
        (a) Increases through                                                                    
        Issue for cash                                                                           
         (b)  Decreases through                                                                  
        returns of capital, buy-                                                                 
7.5     +Convertible          debt                                                               
        securities (description)
7.6     Changes during quarter                                                                   
        (a)  Increases through
        (b)  Decreases through
        securities matured,
7.7     Options  (description  and                                         Exercise      Expiry
        conversion factor)                                                    price        date
                                        7,500,000                  -            5.5     19/5/10
                                        2,000,000                  -            5.5    29/11/10
                                        2,000,000                  -            7.5     3/05/10
                                        5,000,000                  -           11.0    21/12/12
                                        3,000,000                  -           10.0    17/12/13
                                        6,000,000                  -           20.0    23/12/12
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 2010.
               Company Secretary

Print name:....Murray Wylie...............................


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

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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