Forte Energy NL
LSE : FTE

November 01, 2013 03:00 ET

Quarterly Activities & Cashflow Report

                                                                                                        
                                                                                          Forte Energy NL
                                                                                                         
                                                                                          ACN 009 087 852
                                                                                                        
31st October 2013
                                    Quarterly Report - September 2013

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 2013

    *   Scout drilling was completed in early July to test the potential extensions of the Zednes shear
        zone to the south of the A238 prospect
        
    *   Review of cost base completed leading to reduction in ongoing overheads.
        
    *   Shareholder approval obtained for placement to raise more than £900,000 (approximately A$1.5
        million).
        
    *   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:
"Forte  Energy  continues  to  investigate potential corporate opportunities  which  may  complement  the
Company's  strategic  positioning.  Poor sentiment in the uranium market  and  the  wider  mining  sector
remains; however we believe that we are well positioned, with adequate financing facilities available, to
take advantage of any suitable value-accretive opportunities as they arise."


During  the  quarter, Forte Energy has concentrated 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 the instigation of a strict cost control programme, alongside the optimisation of  working
capital management.

Given the Company's aggressive cost reduction measures, minimal expenditure has been incurred during this
quarter  and  this  is expected to continue until the commencement of the next exploration  field  season
later this year.

In  light  of  the challenging conditions being experienced by the mineral exploration industry  and  the
worldwide  uranium market, management continues to explore a number of strategic opportunities that  have
become  available  in  the depressed environment and we will update shareholders on  these  as  and  when
appropriate.

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.


Republic of Mauritania, West Africa

Forte Energy is one of the largest uranium exploration licence holders in Mauritania, with ten 100%-owned
licences, covering over 7,000 km² in the vicinity of Bir Moghrein in the North West, close to the  border
with Western Sahara.

To view the figures associated with this press release, please visit the following links: 

http://media3.marketwire.com/docs/fortfig11101.pdf

http://media3.marketwire.com/docs/fortfig21101.pdf

Figure 1: Mauritanian Licences

Recent exploration work in Mauritania has mainly been focussed on better understanding the areas close to
the  A238  prospect  and  at  Hassi Baida.  Hassi Baida is a highly prospective  calcrete  area  situated
approximately 50km north-east of the existing Forte Energy licences and covers over 800km2.

Results are expected shortly from the NQ Aircore drilling programme completed in July in the areas  close
to  the  A238 prospect and at Hassi Baida.  The NQ Aircore drilling programme concentrated on the central
and  southern  areas  and comprised of 214 holes averaging 10m in depth and totalled  2,190m.   This  was
followed  by  a targeted scout drilling programme in the covered area 7km to the south east of  the  A238
prospect and to a prospective area to the north east of the A238 prospect.

                                                    
Republic of Guinea, West Africa

Firawa and Bohoduo

The Firawa project consists of two licences, totalling 286km2, which are located approximately 25km to
the east of Kissidougou.   The Bohoduo project consists of two licences, covering an area of 294km2,
situated approximated 120km north east of Firawa.

To view the figure associated with this press release, please visit the following link: 
http://media3.marketwire.com/docs/fortfig31101.pdf

Figure 2: Guinea Licences

No significant works were carried out in Guinea during the quarter with the Company focussing instead on
work in Mauritania and corporate activities.

Forte Energy holds four 100%-owned uranium exploration licences in Guinea, West Africa, covering two
separate project areas.



Corporate

In light of the continuing challenging market conditions being experienced, management has carried out  a
programme  of strict cost control and working capital optimisation. An extensive review of overheads  and
other areas of expenditure was undertaken that will result in significant cost reductions going forward.

A  general  meeting was held on the 31st October 2013 at which shareholder approval was  obtained  for  a
placement to raise up to £918,000 (approximately $1,539,000) before costs at 0.4 pence (approximately 0.7
cents)  per share. The placement was carried out in two tranches. £168,000 (approximately A$285,000)  was
raised  before  expenses  in  the  first tranche completed on 16 August  2013  with  a  further  £739,500
(approximately  A$1.25  million)  before  expenses raised in the  second  tranche  following  receipt  of
shareholder  approval  at the general meeting held today. Approval was also obtained  to  offer  a  share
purchase plan to shareholders. Further details of the share purchase plan will be provided shortly.

In  September 2013 the Company announced an agreement with Elementos Ltd (ASX: ELT) to vary the terms  of
an  Option  To  Purchase  agreement in relation to its Millenium mining leases in Queensland.  Under  the
revised  agreement,  Forte  Energy will receive $100,000 cash instead of the  previous  consideration  of
$160,000  in cash or scrip. The terms were renegotiated partly in an effort to achieve settlement,  which
is expected to occur in the quarter to December 2013.

During  the quarter, the Company announced the proposed acquisition of Leo Mining and Exploration Limited
("Leominex"),  an  unlisted company with interests in uranium and rare earth elements ("REE")  assets  in
Africa.  However the proposed acquisition did not proceed because the parties could not agree on  certain
proposed  material amendments to the agreed terms including the withdrawal by Leominex  of  some  of  the
assets. Forte Energy believed that going ahead with the Acquisition was not in the best interests of  the
Company and its shareholders as a whole.  The Company is continuing to assess potential corporate actions
that may add value.

The  Company  still  has  £9.4  million ($16 million) available under its £10  million  Equity  Financing
Facility  ("EFF")  with  Darwin  Strategic  Limited, a majority  owned  subsidiary  of  Henderson  Global
Investors'  Volantis  Capital.   In June 2013, Forte announced that  it  had  entered  into  a  two  year
convertible  loan facility for up to US$1,000,000 with Dutchess Opportunity Cayman Fund, Ltd ("Dutchess")
and that it had received an initial drawdown of US$600,000.  Dutchess subsequently elected to convert the
amount  drawn down into shares and was issued a total of 117,475,000 shares in accordance with the  terms
of the loan agreement. An amount of US$400,000 remains available to the Company under this facility.

The  Company  only draws down on its financing facilities as and when required. However  with  additional
funds  to be received from the placement approved at today's general meeting and with minimal expenditure
planned going forward, the Company has no current plans to draw on its financing facilities.




Mark Reilly
Managing Director




For further information contact:

Mark Reilly, Managing Director
Forte Energy NL                                  Tel: +44 (0) 203 384 7474

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

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

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 U3O8for 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 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'.  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.

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 2013
----------------------------------                           ------------------------------------

                                                           --------------------------------------
                                                            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            (168)               (168)
               (b)  development                                        -                   -
               (c)  production                                         -                   -
               (d)  administration                                 (398)               (398)
1.3       Dividends received                                           -                   -
1.4       Interest  and  other items of a  similar  nature                                  
          received                                                     -                   -
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                                 (566)               (566)
--------------------------------------------------------------------------------------------------

          Cash flows related to investing activities                                        
1.8       Payment for purchases of:                                                              
               (a) prospects                                           -                   -
               (b) equity investments                                  -                   -
               (c) other fixed assets                                  -                   -
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                                     -                   -       
                                                            ---------------------------------------
1.13      Total   operating  and  investing   cash   flows         (566)                    (566)
          (carried forward)
---------------------------------------------------------------------------------------------------


Consolidated statement of cash flows

---------------------------------------------------------------------------------------------------
1.13      Total   operating  and  investing   cash   flows         (566)               (566)
          (brought  forward)
---------------------------------------------------------------------------------------------------

          Cash flows related to financing activities                                        
1.14      Proceeds from issues of shares, options, etc.              363                 363
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                                   363                 363
---------------------------------------------------------------------------------------------------

          Net increase (decrease) in cash held                     (203)                (203)
          
1.20      Cash at beginning of quarter/year to date                  280                 280
1.21      Exchange rate adjustments to item 1.20                       -                   -
                                                           ----------------------------------------
1.22      Cash at end of quarter                                      77                  77
---------------------------------------------------------------------------------------------------

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                    53
        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
                                                         '000                      '000
                                               -----------------------------------------------
3.1       Loan facilities                              USD 1,000                  USD 600
                                               -----------------------------------------------
3.2       Credit standby arrangements                 GBP 10,000                   GBP 6
----------------------------------------------------------------------------------------------
See also Note 6 for details of Discretionary Equity Financing Facility

Estimated cash outflows for next quarter
                                                                            ------------------
                                                                                     $A'000

                                                                            ------------------
4.1     Exploration and evaluation                                                     100
                                                                            ------------------
4.2     Development                                                                      -
                                                                            ------------------
4.3     Production                                                                       -
                                                                            ------------------
4.4     Administration                                                                 150
----------------------------------------------------------------------------------------------
          Total                                                                        250
----------------------------------------------------------------------------------------------

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                                  77                   280
                                                         ----------------------------------------
5.2     Deposits at call                                           -                            -
                                                         ----------------------------------------
5.3     Bank overdraft                                             -                            -
                                                         ----------------------------------------
5.4     Other (provide details)                                    -                            -
-------------------------------------------------------------------------------------------------
        Total: cash at end of quarter (item 1.22)                 77                   280
-------------------------------------------------------------------------------------------------

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 up
                                                                       per security     per security
                                                                       (see note 3)     (see note 3)
                                                                            (cents)          (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          1,061,620,311   1,061,620,311                               
                                          2,250,000               -            25                1
                                   ------------------------------------------------------------------
7.4     Changes during quarter                                                                      
        (a) Increases through                                                                     
        issues                                                                                    
        Issue for conversion of         113,752,047     113,752,047    0.79 cents       0.79 cents
        loan amounts                                                                              
        Issue for cash                   42,000,000      42,000,000    0.68 cents       0.68 cents
        (b)  Decreases through                                    
        returns of capital, buy-
        backs
------------------------------------------------------------------------------------------------------
7.5     +Convertible          debt                1                                                 
        securities   (description)
        (refer   to  Appendix   3B
        dated 6 June 2013)
                                    ------------------------------------------------------------------
7.6     Changes during quarter                                                                    
        (a)  Increases through                     
        issues
        (b)  Decreases through
        securities matured,
        converted
------------------------------------------------------------------------------------------------------
7.7     Options  (description  and                                         Exercise    Expiry date
        conversion factor)                                                    price               
                                                                                                  
                                          1,000,000               -         6 pence      1/09/2016
                                          4,000,000               -      12.5 cents     14/04/2015
                                          5,000,000               -         3 pence     14/02/2015
                                    ------------------------------------------------------------------
7.8     Issued during quarter                                                                     
                                    ------------------------------------------------------------------
7.9     Exercised during quarter                                                                  
                                    ------------------------------------------------------------------
7.10    Expired during quarter         88,625,000                  -        3 pence      2/08/2013
------------------------------------------------------------------------------------------------------
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 2013.
                           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.

6     Discretionary  Equity  Financing Facility  On 15 February 2013 the Company announced  that  it  had
      entered  into  a  £10  million ($17 million) discretionary equity financing  facility  with  Darwin
      Strategic  Limited,  a majority owned subsidiary of Henderson Global Investors'  Volantis  Capital.
      Forte  Energy is under no obligation to make a draw down and may make drawdowns at its  discretion.
      Further  details of the facility are available in the Company's announcement of 15  February  2013.
      At  the end of the quarter the Company has drawn down a total of approximately £587,000 ($893,000),
      leaving £9.4 million ($16 million) available to the Company under the facility.


Contact Information

  • Forte Energy NL