Forte Energy NL
LSE : FTE

November 01, 2012 03:00 ET

Quarterly Activities & Cashflow Report

                                                                                          Forte Energy NL
                                                                                                         
                                                                                         ACN 009 087 852
                                                                                                        
1st November 2012
                                    Quarterly Report - September 2012

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.

                            Highlights of 3rd Quarter to 30th September 2012


    *  Exploration works recommenced in Mauritania, following seasonal summer stoppages

    *  High  resolution ground magnetic and radiometric survey completed over the A238 prospect  in
       Mauritania totalling over 470 line km. The survey confirmed the following:
        
                - Structural control of the A238 prospect in the Zednes shear zone;
                - Extension of the main shear zone to the south of over 3.5km below the sedimentary cover; and
                - The structure continues to the north over 2km, near to surface and outcropping.
                
    * A  Reverse Circulation (RC) drilling program is scheduled to start in November to test these
      highly prospective areas along strike to the south and north of the A238 prospect
    * As part of the preliminary economic assessment (PEA) study, environmental base line and social
      impact assessments were completed on the 286 Legleya licence in Mauritania.
    * Preparatory works started in Guinea for ground studies at the Bohoduo project.
    * Forte Energy U3O8 JORC resources (all at a 100ppm cut-off):
    
         ----------------------------------------------------------------------------------------
         Project                Resource           Tonnage            Grade            Contained
                                Category             (Mt)           (ppm U3O8)         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
         ----------------------------------------------------------------------------------------
                                Indicated            0.5               886                1.0
                                -----------------------------------------------------------------
         Total                  Inferred             76.3              262                43.9
                                -----------------------------------------------------------------
                                  Total              76.8              266                44.9
         ----------------------------------------------------------------------------------------
        
        * A238NW Anomaly included in the A238 Inferred Resources



Progress

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

"The  quarter  saw  further  progress in evaluating the potential size of our  assets,  predominantly  in
Mauritania,  where  a  high  resolution  ground magnetic and  radiometric  survey  has  shown  noteworthy
continuations  to  the  existing A238 structure.  We will continue to make progress  at  our  Mauritanian
assets, with an intensive drilling campaign commencing this month on the extensions of A238.  Forte is on
track to maintain and build on the positive momentum generated in 2012 to date."

Corporate

At  a  general meeting held on 2nd August, shareholders ratified the issue of 98,325,000 shares  at  1.25
pence for the first tranche of the placing announced on the 8th June. Approval was also received for  the
second  tranche of placing shares and the grant of attaching unlisted options. Approximately 173  million
shares  and 86 million options were issued under the placing raising £2.16 million (approximately  A$3.17
million) before expenses.

Consistent  with  Forte  Energy's  focus on uranium and energy-related projects  worldwide,  the  Company
continues to consider opportunities which may complement its strategic positioning. The Company has noted
an  increase  in potential deals in the current economic climate and will keep investors informed  should
meaningful discussions be entered into.

Republic of Mauritania, West Africa

Forte Energy has ten 100% owned licences over 9,200km2 in Mauritania.

To view the Figure: Mauritanian Licences, please open the links in a new window:

http://media3.marketwire.com/docs/Forte11011.jpg

http://media3.marketwire.com/docs/Forte11012.jpg


A238 Prospect

The  A238  mineralisation  is  hosted within metasomatised granite. Previous  mapping  and  drilling  has
identified   a  strong  structural  control  on  the  uranium  mineralisation  at  A238.  The  recognised
mineralisation  is controlled within a north-westerly striking, sub-vertically orientated  ductile  shear
zone.

The latest interpretation suggests both sub-vertical shear related mineralisation, together with possible
high  grade  mineralisation controlled by 20-35 degrees west dipping zones developed between  the  sub  parallel
bounding  structures. Grade interpretation and limited surficial structural data also suggest rolling  to
shallow northerly plunging shoots and lenses of uranium mineralisation over a strike length of 1.75km  in
the  main  zone. This mineralisation is open, particularly to the south where thin sedimentary cover  has
masked any radiometric surface expression.

To  test  the  structural  control along strike to the north west and south east  of  the  existing  A238
prospect,  Geophysical  consultants SEMS Exploration Ltd of Accra, Ghana were  instructed  to  execute  a
combined high resolution ground magnetic and radiometric survey. The  survey was started on the 20th September
and covered an area of over 21km2 at a line spacing of  50m approximately  470km of ground line surveys 
were completed. Traverse lines were walked by  two  surveyors working on 50m line spacing on a north south traverse.

To view Figure 2: Sun Shaded magnetic field over the A238 Prospect, please open the link in a new window:

http://media3.marketwire.com/docs/Forte11013.jpg


The  survey  was  completed  on the 28th September with the collected data  compiled  into  one  database
utilising the WGS84 projection system.

Following  compilation and interpretation of the high resolution ground magnetic and radiometric  surveys
it  has been confirmed that the A238 prospect is structurally controlled within the Zednes shear zone. To
the  north  of  the  existing A238 prospect the structure continues to over  2km,  near  to  surface  and
outcropping. To the south of the A238 prospect the surveys have confirmed that the structure  extends  to
the south under quaternary cover to over 3.5km.

Preparation  is  now underway to start a RC drilling program that is scheduled to start  in  November  to
explore the highly prospective areas to the north and south of the A238 prospect.

As  part  of  the  preliminary economic assessment (PEA) of the A238 prospect, Mauritanian  Consulting  &
Contracting have completed their environmental base line and social impact assessments of the 286 Legleya
licence area.

The report covered the following:

    * Project requirements and regulatory framework
    * Description of the works (Geographical area, resources and water supply, physical and biological
      environment, socio-economic and cultural environment)
    * Conditions (Human environment, flora and fauna)
    * Potential impacts (air, noise, vibration, environmental and water)
    * Archaeological and cultural heritage
    * Environmental management programme

Republic of Guinea, West Africa

Firawa

The  Firawa  Project  consists  of  two  100% owned licences totalling  over  509km2  which  are  located
approximately 25km to the east of Kissidougou.

To view Figure 3: Guinea Licences, please open the links in a new window:

http://media3.marketwire.com/docs/Forte11014.jpg

http://media3.marketwire.com/docs/Forte11015.jpg

Exploratory works in Guinea stopped in May due to the rainy season and access to the sites was re-
established in late September.

Preparatory ground works are planned in November at the Bohoduo project to conduct  ground radiometric
surveys to test the continuity of the mineralisation.





Mark Reilly
Managing Director

For further information contact:

Mark Reilly, Managing Director
Forte Energy NL                               Tel: +44 (0) 203 384 9555


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

Bobby Morse/Louise Hadcocks/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

Australia                                        United Kingdom

Suite 3, Level 3                                 3C Princes House
1292 Hay Street                                  38 Jermyn Street
West Perth WA 6005                               London SW1Y6DN
Ph: +61 (0)8 9322 4071                           Ph: +44 (0)203 3847474
Fax: +61 (0)8 9322 4073                          Fax: +44 (0)207 2878387
Email: info@forteenergy.com.au                   Email: info@forteenergy.co.uk
Web: www.forteenergy.com.au


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 U3O8 for 44.9Mlbs contained U3O8  (100ppm
cut-off).

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 www.forteenergy.com.au

Note:

The  information in this report that relates to Exploration Results is based on information  compiled  by
Mr.  Bosse  Gustafsson, who is a Member of the European Federation of Geologists, a 'Recognised  Overseas
Professional  Organisation' ('ROPO') included in a list promulgated by the ASX  from  time  to  time.  Mr
Gustafsson  is a former Technical Director of Forte Energy NL. He has an ongoing role as a consultant  to
the  Company.  Mr. Gustafsson 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'. Mr. Gustafsson consents to the inclusion in this report  of
the matters based on his information in the form and context in which it appears.

The  information in this report that relates to the Mineral Resources at the A238 prospect in  Mauritania
and  at Firawa in Guinea is based on information compiled by Mr. Bosse Gustafsson of Forte Energy NL  and
Mr Galen White BSc (Hons) FGS, FAUSIMM, Managing Director and Principal Geologist of CSA Global (UK) ltd.

The  information in this report that relates to the Mineral Resource at Bir En Nar in Mauritania is based
on  information compiled by Mr. Bosse Gustafsson of Forte Energy NL and Mr. Neil Inwood of Coffey  Mining
Ltd.  Neil Inwood is the Competent Person responsible for the resource estimation and classification.  Mr
Inwood  is a Fellow of the AusIMM. As Mr Inwood is now no longer employed by Coffey Mining, Coffey Mining
has  reviewed  this information release and consent to the inclusion, form and context  of  the  relevant
information  herein  as  derived from the original resource reports for which  Mr  Inwood's  consent  has
previously been given.

Mr.  Gustafsson, Mr. Inwood and Mr. White have sufficient experience which is relevant to  the  style  of
mineralisation and type of deposit under consideration and to the activity which they have undertaken  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". Mr. Gustafsson, Mr. White and Coffey Mining  on
behalf of Mr. Inwood consent to the inclusion in this report of the matters based on their information in
the form and context in which it appears.


Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96.  Origin:  Appendix 8.  Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity
FORTE ENERGY NL

ABN                                                                     Quarter ended
                                                                     ("current quarter")
59 009 087 852                                                        30 September 2012

                                                            Current quarter       Year to 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 evaluation            (505)               (505)
               (b)  development                                        -                   -
               (c)  production                                         -                   -
               (d)  administration                                 (635)               (635)
1.3       Dividends received                                           -                   -
1.4       Interest  and  other items of a  similar  nature                                  
          received                                                     3                   3
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                               (1,137)             (1,137)
                                                                                                 
          Cash flows related to investing activities                                        
1.8       Payment for purchases of:                                                         
               (a) prospects                                           -                   -
               (b) equity investments                                  -                   -
               (c) other fixed assets                               (12)                (12)
1.9       Proceeds from sale of:                                                                 
               (a) prospects                                           -                   -
               (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                                  (12)                (12)
1.13      Total   operating  and  investing   cash   flows       (1,149)             (1,149)
          (carried forward)


Consolidated statement of cash flows

1.13      Total   operating  and  investing   cash   flows       (1,149)             (1,149)
          (brought  forward)
                                                                                            
          Cash flows related to financing activities                                        
1.14      Proceeds from issues of shares, options, etc.            1,395               1,395
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                                 1,395               1,395
                                                                                            
          Net increase (decrease) in cash held                       246                 246
          
1.20      Cash at beginning of quarter/year to date                1,763               1,763
1.21      Exchange rate adjustments to item 1.20                       -                   -
1.22      Cash at end of quarter                                   2,009               2,009

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
                                                                                             
        Aggregate  amount of payments to the parties included  in  item                 197
        1.2
                                                                                             
        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
        Nil

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
                                                                                     $A'000
4.1     Exploration and evaluation                                                     400
4.2     Development                                                                      -
4.3     Production                                                                       -
4.4     Administration                                                                 450
          Total                                                                        850

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
follows.
5.1     Cash on hand and at bank                               1,908                 1,663
5.2     Deposits at call                                         101                   100
5.3     Bank overdraft                                             -                     -
5.4     Other (provide details)                                    -                     -
        Total: cash at end of quarter (item 1.22)              2,009                 1,763

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                                                        
        tenements
        relinquished,
        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 paid
                                                                       per security         up per
                                                                       (see note 3)       security
                                                                            (cents)   (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 securities          868,994,311      868,994,311                              
                                        2,250,000                -             25              1
7.4     Changes during quarter                                                                    
        (a) Increases through          75,080,000       75,080,000     1.85 cents     1.85 cents
        issues                                                                                  
        Issue for cash                                                                          
         (b)  Decreases through                                                                 
        returns of capital, buy-                                                                
        backs                                                     
7.5     +Convertible          debt                                                              
        securities (description)
7.6     Changes during quarter                                                                  
        (a)  Increases through
        issues
        (b)  Decreases through
        securities matured,
        converted
7.7     Options  (description  and                                         Exercise       Expiry
        conversion factor)                                                    price         date
                                                                                                
                                        5,000,000                -       11.0 cents     21/12/12
                                        3,000,000                -       10.0 cents     17/12/13
                                        6,000,000                -       20.0 cents     23/12/12
                                        1,000,000                -          6 pence      1/09/16
                                        4,000,000                -       12.5 cents     14/04/15
                                       86,702,500                -          3 pence      3/08/13
7.8     Issued during quarter          86,702,500                -          3 pence      3/08/13
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:  31  October 2012.
                       Company Secretary

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


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.

Contact Information

  • Forte Energy NL