Forte Energy NL

February 01, 2010 02:00 ET

Quarterly Activities & Cashflow Report

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

                                                                                            December 2009

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

*   Diamond  core  resource drilling program nearing completion at Bir En Nar Uranium Project  after
    decision to drill additional holes.

*   Maiden  JORC resource for Bir En Nar expected to be completed in first quarter of 2010,  subject
    to receipt of final assay results.
*   Detailed  radiometric  airborne surveys being carried out over 9  areas  within  Forte  Energy's
    Mauritanian licences.

*   Assay results received from trenching and grab samples from field exploration of calcrete-hosted
    uranium anomalies near the town of Bir Moghrein include 9,300ppm U3O8 from a trench at Anomaly 068.
*   6000m  R/C  drilling program around Bir Moghrein scheduled to commence February 2010, consisting
    of around 300 holes across 10 prospects.
*   The  Leg  Beija radiometric anomaly has now been defined over an area 10km long and  up  to  500
    metres wide. Sampling pits encountered hard calcrete with secondary uranium minerals down to more than 3
    metres depth.
Uranium Exploration - Guinea

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

*   Agreement  for  sale of 50% interest in Maroochydore JV Copper Project in Western  Australia  to
    Aditya Birla Minerals Ltd to raise $2M.

Republic of Mauritania, West Africa

During the Quarter, the Company's main exploration focus has been its uranium exploration permits at  Bir
En Nar and near Bir Moghrein in the Zednes region of northern Mauritania.

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

The planned initial program of around 4,600m of priority holes was completed in early January 2010 at the
Bir  En  Nar  prospect. However, it was decided to proceed with an additional 7 drillholes  in  order  to
complete a more extensive 35 x 35 metre sampling grid to enable a resource classification down to a depth
of 100 metres. Drilling of these additional holes is nearing completion.

The  samples  are transported to ALS Chemex in Mali for initial preparation before being shipped  to  ALS
Chemex  in  Canada for analysis. An initial JORC code-compliant resource for Bir En Nar, to be calculated
by  external consultants Coffey Mining, is expected to be published toward the end of the March  quarter,
subject to timing of assay results.

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

This  latest  drilling program follows on from the Company's initial 4,000m Reverse Circulation  drilling
campaign  completed  at Bir En Nar in December 2007 and recent geophysical ground surveys.  Results  from
2007  drilling  included  seven  holes containing intercepts exceeding 5,000ppm  eU3O8,  with  a  maximum
intercept of 1.55m at 18,280ppm eU3O8.

Field  observations from this recent diamond core drilling generally confirm what was  found  during  the
previous  R/C  drilling  program,  with  readings from the core samples  taken  on  site  using  handheld
instruments indicating similar high grades. From the core orientation control, the Company believes  that
the  steep  dipping mineralisation is displaced (but still within the 100 metre wide zone)  in  two  low-
dipping (3-5 degrees to the East) faults marked by thin mafic dykes. The mineralisation occurs in granite
of  different  mode,  both  as impregnation and as fissure fillings. Mostly  there  is  a  visible  vague
alteration  but  there is also high radiation mineralisation without any visible sign of alteration.  The
rock is hard with few crush zones and core recovery is good.

To view Fig.2 6,000m resource drilling program at Bir En Nar, please open the following link in a new

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  extensive field surveys, including vehicle-based radiometric surveys and VLF-EM  (Very  Low
Frequency Electromagnetic) surveys, geophysical surveying, geological study, trenching, and rock and  pit
sampling  were  undertaken at a number of uranium anomalies contained within Forte  Energy's  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.

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

Recent  activity has concentrated on the Leg Beija 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. Work with an
excavator is continuing around Leg Beija to obtain further calcrete pit samples.

Based  on  results from the 2009 field surveys, the Company will commence a 6,000m RC short-hole drilling
program  in  February  comprising around 300 holes to test ten of the most  prospective  anomalies.  More
detailed  results  from the field surveys are available in previous announcements  in  October  2009  and
January 2010.

Previous  airborne  surveys during the mid 1990s were carried out along E-W lines with  500  metres  line
spacing and at an altitude of 100 metres. Following the recent field surveys, it was recognised that  two
of  the prospects did not show up on the previous airborne survey. 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 and are expected to be completed
in February.

To view Fig.4 Airborne radiometric survey areas, please open the following link in a new window:

The  surveys are being carried out 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. Measurements are being carried out along lines with 200 metre  spacing  and  at  an
altitude of 60 metres.

Forte  Energy  has  also  decided  to relinquish two of its licensed  areas  in  Mauritania:  Permit  486
(Ghaliamane  Sud)  and  Permit 487 (Ghaliamane Nord). These permits covering a  total  of  2,910km2  were
located some distance to the south east from the rest of the Company's permits and were considered of low

Republic of Guinea, West Africa

Following  completion of a 5,850m resource drilling programme in January 2009, Forte Energy announced  an
initial  JORC-code compliant uranium resource for its 100%-owned Firawa Uranium Project in  Guinea  on  1
July 2009.

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. The resource, which was independently  estimated  and
verified by Coffey Mining Pty Ltd, is summarised below using a range of different cut-off grades:

                     Cut off                      Mt                       Grade                      U3O8
                    (U3O8 ppm)                                          (U3O8 ppm)                   (M lbs)
                       100                       17.7                       296                       11.6
                       200                       14.1                       329                       10.2
                       300                        7.7                       396                        6.7
                       400                        2.9                       475                        3.0

While  the Company is delighted with this substantial maiden resource for the Firawa Project, it is  also
encouraged  by  the significant scope for increases to this figure from further drilling which  has  been
recommended to test for extensions to the deposit - which remains open along strike and down dip.

A  report  received  from  Mineral  Engineering  Technical  Services  Pty  Ltd  ("METS")  on  preliminary
metallurgical testing of samples from Firawa indicated that the Firawa ore may be suitable  for  low-cost
leaching  extraction.  Mineralogical  analysis was undertaken using  both  X-ray  diffraction  (XRD)  and
Quantitative Evaluation of Minerals by Scanning Electron Microscope (QEMSCAN - carried out at  AMMTEC  in
Perth, Australia).

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.

The Company is undertaking further testwork to investigate the acid/alkaline leaching characteristics  of
the  Firawa  ore  in  order  to  advance pre-feasibility work on a possible uranium  leaching  extraction
operation  for  the  Firawa Project. Current testing includes examining the effect of acid  strength  and
temperature,  optimal  grind  size and potential for beneficiating the  ore  via  gravity  separation  or

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.

On 11 December 2009, the Company announced 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  will receive a cash payment of A$2,000,000 and be released from any current or future obligations
under the joint venture agreement.

The  formal  sale  agreement has been signed and is subject to obtaining Ministerial  Consent  under  the
Mining  Act and Foreign Investment Review Board (FIRB) approval, with settlement expected around the  end
of February 2010.

The  Company  announced  on  18  August 2009 that it had entered into an Option  Agreement  with  Element
Minerals Australia Pty Ltd ("Element") for the sale of the Millenium Copper-Cobalt Project in Queensland,

Under the terms of the agreement, Element paid A$20,000 to Forte Energy for a six-month option to acquire
the  mining leases of the Millenium Copper Project, with an option to extend the agreement for a  further
six months for an additional A$20,000.

The exercise price under the agreement is for a cash payment of A$20,000 (during the first option period)
and,  at Element's discretion, either ASX-listed shares to the value of A$160,000 in Elementos Ltd  (ASX:
ELT) or its parent company, Orocobre Ltd (ASX: ORE) or an additional cash payment of A$160,000.


During  the  quarter, the Company granted a total of 6,000,000 unlisted directors' options in  accordance
with  shareholder  resolutions  approved  at  its AGM. There were  also  6,500,000  consultants'  options
exercised during the quarter, raising additional funds of $437,500.

Mark Reilly
Managing Director
29 January 2010

RFC Corporate Finance - Nomad
Stuart Laing                       Tel: +618 9480 2506

Alastair Stratton
Matrix Corporate Capital LLP       Tel: +44 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
            FORTE ENERGY NL

            ABN                                                Quarter ended ("current quarter")
            59 009 087 852                                              31 December 2009

                                                            Current quarter       Year to date
Cash flows related to operating activities                       A$'000            (6 months)
1.1       Receipts from product sales and related debtors              -                        -
1.2       Payments for  (a)  exploration and evaluation          (1,917)                  (3,531)
               (b)  development                                        -                        -
               (c)  production                                         -                        -
               (d)  administration                                 (654)                  (1,391)
1.3       Dividends received                                           -                        -
1.4       Interest  and  other items of a  similar  nature                                       
          received                                                    43                       98
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                               (2,528)                  (4,824)
          Cash flows related to investing activities                    
1.8       Payment for purchases of:                                                              
               (a) prospects                                           -                        -
               (b) equity investments                                  -                        -
               (c) other fixed assets                               (48)                     (49)
1.9       Proceeds from sale of:                                                                 
               (a) prospects                                           -                       20
               (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                                  (48)                     (29)
1.13      Total   operating  and  investing   cash   flows       (2,576)                  (4,853)
          (carried forward)

Consolidated statement of cash flows

1.13      Total   operating  and  investing   cash   flows       (2,576)                  (4,853)
          (brought  forward)
          Cash flows related to financing activities                                             
1.14      Proceeds from issues of shares, options, etc.              421                    4,730
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                                   421                    4,730
          Net increase (decrease) in cash held                   (2,155)                    (123)
1.20      Cash at beginning of quarter/year to date                8,307                    6,299
1.21      Exchange rate adjustments to item 1.20                    (61)                     (85)
1.22      Cash at end of quarter                                   6,091                    6,091
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                   228
        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 Nil

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                               4,091                        6,307
5.2     Deposits at call                                       2,000                        2,000
5.3     Bank overdraft                                             -                            -
5.4     Other (provide details)                                    -                            -
        Total: cash at end of quarter (item 1.22)              6,091                        8,307

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  Mauritania:    Relinquished:                          
        relinquished,          486            Ghaliamane Sud          100%           0%
        reduced or lapsed      487            Gnaliamane Nord         100%           0%
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

                                       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           6,000,000                  -           20.0    23/12/12
7.9     Exercised during quarter        2,500,000                  -            5.5    30/06/10
                                        4,000,000                  -            7.5     3/05/10
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:  29  January 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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