Forte Energy NL

January 06, 2014 02:00 ET

Corporate Update

                                                                                          Forte Energy NL
6 January 2014
                                            Corporate Update

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.

As  previously announced, Forte Energy has initiated a strategic review and strict cost control programme
in  order  to  best  manage the business in the current challenging environment.  The Company  wishes  to
provide an update on the following measures and progress made:

    *       Review of cost base completed leading to a reduction in overheads, including restructuring of
            corporate head office and relocation of Management
    *       40% reduction in Chairman and 50% reduction in Managing Director fees

    *       Review and streamlining of Management team
    *       Focus on identifying and reviewing value-accretive transactions
    *       c.$750,000 cost saving per annum successfully implemented

In  keeping  with  Forte Energy's previously announced strict cost control programme and optimisation  of
working  capital, the Company has instigated a number of recent measures.  These include the  significant
reduction in overheads by rationalising Forte Energy's London presence, which has involved the closure of
the  corporate  head office in the UK and the relocation of Management to Australia.  In  line  with  the
Company's  aggressive  cost reduction efforts, Forte Energy's Chairman and Managing  Director  have  both
agreed to substantial reductions in their fees: 40% reduction for the Chairman and 50% reduction for  the
Managing Director, with effect from 1st July 2013.

Forte Energy has conducted a review of its Management team in order to ensure that its expertise is  best
suited to the Company's current requirements.  As a result, Scott Yelland, Forte Energy's Chief Operating
Officer,  has  left  to  pursue other opportunities.  Mr Yelland is a mining  engineer,  and  whilst  his
considerable  experience  has  proved  invaluable to date, the  Company's  temporary  focus  on  external
opportunities,  rather than developing Forte Energy's resource in the current depressed  uranium  market,
has meant that it has had to streamline its team.

The expected annualised savings from all these cost reduction initiatives is approximately $750,000.

As  previously  announced  the Board continues to explore a number of strategic opportunities  that  have
become available in the current depressed uranium environment, in consultation with the Company's largest
shareholders  and  recognised  industry  leaders, and an update  on  these  will  be  made  as  and  when
appropriate.   Forte Energy has been concentrating on the assessment of external strategic  opportunities
in  the market, with a view to building on the significant organic growth already achieved by the Company
to  date and diversifying its asset base.  The Board believes that this provisional strategic shift  from
further exploration to corporate activity is in the best interests of all stakeholders, given the current
market conditions, and it is pleased to have the full support of the Company's largest shareholders.

The  Company experienced delays in obtaining assay results from the 2,190m NQ Aircore drilling  programme
carried out during 2013 on its 100% owned Hassi Baida licence in Mauritania. These have now been received
and  are  being  processed, with results expected to be announced later this quarter. Forte  Energy  will
continue  to undertake low cost exploration and scoping related activities in relation to its Mauritanian
and  Guinean  projects,  including  consolidation of the exploration  results  to  date  and  high  level
consideration  of  priority  areas  to  target for increasing  its  resource  bases  in  what  have  been
demonstrated to be well mineralised prospects.

The  Company  is  pleased  to advise that it has received $100,000 in settlement  for  the  sale  of  its
Millenium  mining leases in Queensland to Element Minerals Australia Pty Ltd, a subsidiary  of  Elementos
Limited  (ASX: ELT). Assessable transfer applications have been lodged with the Queensland Department  of
Natural Resources and Mines.

Capital raising of approximately $1.5m was completed following shareholder approval at the EGM held on 31
October  2013. A Share Purchase Plan ("SPP") was also approved at the EGM. Documentation for the  SPP  is
being finalised and is expected to be dispatched to shareholders this month.

The  Company  has  £9.4 million ($17 million) available under its £10 million Equity  Financing  Facility
("EFF")  with  Darwin  Strategic  Limited, a majority owned subsidiary  of  Henderson  Global  Investors'
Volantis  Capital.   The  two  year  convertible loan facility  for  up  to  US$1,000,000  with  Dutchess
Opportunity Cayman Fund, Ltd ("Dutchess") has been settled and terminated.

Despite  the  continued  pressures  evident in the worldwide uranium market,  Forte  Energy  retains  its
confidence  in the compelling medium to long term supply/demand fundamentals, which indicate  a  sizeable
supply shortfall in coming years.  We believe that Forte Energy's robust organic growth and its potential
to  take  advantage of external opportunities will position the Company well to capitalise on the  strong
long term fundamentals of the uranium market.

Forte Energy will announce further updates on progress and developments in due course.

Commenting on developments, Mark Reilly, Managing Director of Forte Energy, said:

"The  Company has made rapid progress in its comprehensive cost reduction programme, which was instigated
as  a  result  of the continued poor sentiment in the uranium market and the mining sector  as  a  whole.
Forte  Energy is undertaking every measure to ensure that it is properly positioned to endure the current
environment  and to capitalise on suitable external opportunities as they become available, to  the  best
advantage of shareholders.

Scott  Yelland  has played a vital role in the growth and development of Forte Energy's  assets  and  the
Board would like to thank him for his considerable contribution over the past two years and wish him  the
very best for the future."

Mark Reilly
Managing Director

For further information contact:

Mark Reilly, Managing Director
Forte Energy NL                                  Tel: +61 (0) 8 9322 4071

Geoff Nash/Ben Thompson                          Tel: +44 (0) 207 220 0500
Elizabeth Johnson (broking)

Bobby Morse/ Cornelia Browne
Buchanan                                         Tel: +44 (0) 207 466 5000

Stuart Laing
RFC Ambrian Ltd                                  Tel: +61 (0) 8 9480 2506
(AIM Nominated Adviser to the Company)

Forte Energy NL

Suite 3, Level 3
1292 Hay Street
West Perth WA 6005
Ph: +61 (0)8 9322 4071
Fax: +61 (0)8 9322 4073

About Forte Energy

Forte  Energy  is  an  Australian-based minerals company focused on the exploration  and  development  of
uranium  and associated bi-products in Mauritania and Guinea in West Africa. The Company has an extensive
pipeline  of  assets and total JORC resources of 76.8Mt @ 266ppm U3O8for 44.9Mlbs contained U3O8  (100ppm

Its  flagship assets are the A238 prospect (23.4Mlbs U3O8) and the Bir En Nar project (2.06Mlbs U3O8)  in
Mauritania, and the Firawa Project in Guinea (19.5Mlb U3O8).

Forte Energy U3O8 JORC resources (all at a 100ppm cut-off):

Project            Resource Category        M tonnes         ppm U3O8         Contained U3O8 Mlbs
A238*                         Inferred             45.2              235                          23.4
Bir En Nar                   Indicated              0.5              886                           1.0
                              Inferred              0.8              575                           1.0
Firawa                        Inferred             30.3              295                          19.5
Total                        Indicated              0.5              886                           1.0
                              Inferred             76.3              262                          43.9
                                 Total             76.8              266                          44.9

        * A238NW Anomaly included in the A238 Inferred Resources
Forte  Energy's  strategy is to target high grade uranium ore bodies and build a low cost  West  African-
focused  uranium  producer. The Company is quoted on the Australian Stock Exchange  (ASX:  FTE)  and  AIM
market of the London Stock Exchange (AIM: FTE). For more information, visit

The information in this report that relates to the reporting of Mineral Resources is based on information
compiled  by  Mr.  Galen  White, who is a Fellow of the Australasian Institute of Mining  and  Metallurgy
(FAusIMM).  Mr White is the Principal Geologist of CSA Global (UK) Ltd. CSA Global have an on-going  role
as  geological consultants to Forte Energy NL. Mr. White 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'. The total JORC resources tabulated
here  are as at 6th of July 2012. There has been no change, material or otherwise to the resource figures
quoted  here, since this date, and as such the resources remain reportable to JORC 2004 under which  they
were  estimated. Any subsequent reporting of Exploration Results, Mineral Resources and Mineral  Reserves
to  the market that represent a material change will be reported under JORC 2012, currently in force. Mr.
White  consents to the inclusion in this report of the matters based on his information in the  form  and
context in which it appears.

Contact Information

  • Forte Energy NL