Forte Energy NL

April 30, 2014 09:56 ET

Quarterly Activities & Cashflow Report

                                                                                          Forte Energy NL
30th April 2014
                                      Quarterly Report - March 2014

Forte  Energy  NL ("Forte" 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 1st Quarter to 31st March 2014

    *   Agreement to acquire Slovakian uranium assets from European Uranium Resources Ltd ("European
        Uranium") announced
    *   Acquisition  includes NI 43-101 compliant estimated mineral resources of 57.6Mlbs  U3O8,  to
        significantly boost Forte's uranium resources
    *   CAD$100,000  Share Subscription in European Uranium completed in accordance  with  terms  of
        acquisition agreement post quarter end
    *   Issue of 170m shares to Global Resources Investment Trust Plc ("GRIT") @ 0.4 pence under share
        exchange agreement
    *   Continued focus on expenditure reduction
    *   Forte's existing 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


Commenting on the quarter, Mark Reilly, Managing Director of Forte, said:
"The  Acquisition of European Uranium's Slovakian uranium assets represents a significant opportunity  to
increase  Forte's  uranium  resources  and complements the Company's  existing  African  uranium  assets.
Following the Acquisition, Forte will be well positioned to take advantage of other opportunities and for
when the anticipated improvement in the uranium market occurs."


On  the  4th of April, 2014, the Company announced that it had entered into a binding term sheet for  the
acquisition of the uranium assets of European Uranium, a company listed on the Ventures Exchange  of  the
Toronto Stock Exchange (as well as on the OTCQX and Frankfurt exchanges).

The  Acquisition will be effected by a purchase by Forte of European Uranium's Slovakian  uranium  assets
for a sale price equivalent to approximately CAD$ 8,500,000 on the following terms:

    1.  Forte will issue 854,875,000 fully paid ordinary shares @ AUD$0.008 per share (approximately
        0.44 pence) with an approximate value of CAD$ 7,000,000 to be distributed on a pro-rata basis to the
        shareholders of European Uranium;
    2.  Forte will issue 61,062,500 fully paid shares@ AUD$0.008 per share (approximately 0.44 pence)
        with an approximate value of CAD$ 500,000  to European Uranium;
    3.  Forte will pay CAD$ 1,000,000 to European Uranium upon completion; and
    4.  Forte will grant European Uranium a 1% production royalty over the licences in perpetuity.

In  addition,  on 23rd of April 2014, Forte announced the completion of a private subscription  for  CAD$
100,000 in the capital of European Uranium for 1,111,111 shares (based on a price of CAD$ 0.09 each)  and
555,555 attaching warrants with a two year term and exercise price of CAD$ 0.15.

The  acquisition  is subject to a number of conditions including obtaining regulatory  consents  and  the
approval of shareholders of both companies. Final acquisition documentation including a Notice of Meeting
for  shareholders is being prepared and the Company will notify shareholders of the indicative time frame
in due course. Please refer to the announcement of 4 April 2014 for further details.

About European Uranium's assets

European  Uranium  has  two  project areas in Slovakia, namely Kuriskova and  Novoveska  Huta,  of  which
Kuriskova  is  the  most  advanced. The projects are held in two wholly owned  subsidiaries  of  European
Uranium that are registered in the Slovak Republic.

The  Kuriskova project consists of 32 square kilometres of mineral licenses situated approximately 10  km
northwest of the city of Kosice, a regional industrial centre in East-Central Slovakia.

The  summary  results of a preliminary feasibility study prepared for Kuriskova released in January  2012
are as follows:

        - IRR 30.8%
        - 1.9 year payback on CAPEX of $US 225m
        - NPV $US 276m at 8% discount.
        - Base case price $US 68/lb U3O8
        - First 4 year operating costs $US 16.68/lb U3O8
        - Life of Mine operating costs $US 22.98/lb U3O8

The Novoveska Huta uranium deposit is located at the western end of the Carpathian uranium belt, about 50
kilometres northwest of Kuriskova and near the town of Spisska Nova Ves. The deposit consists of a mining
license over one square kilometre and a surrounding fifteen square kilometre exploration license.

European Uranium Slovakian U3O8 NI 43-101 mineral resource estimates ***

Project                  Resource Category        M tonnes         ppm U3O8         Contained U3O8 Mlbs
Kuriskova **                 Indicated              2.3            5,550                          28.5
                              Inferred              3.1            1,850                          12.7
Novoveska                     Measured              0.8            1,080                           2.0
Huta **                      Indicated              0.8              970                           1.7
                              Inferred              4.7            1,230                          12.7
Total                         Measured              0.8            1,080                           2.0
                             Indicated              3.1            4,352                          30.2
                              Inferred              7.8            1,477                          25.4
                                 Total             11.7            2,141                          57.6

        **  Kuriskova calculated at 500ppmU cut-off, Novoveska Huta at 600ppmU cut-off
        *** These  mineral  resource estimates are reported in this announcement  as  "foreign  estimates
            under ASX Listing Rule 5.10
              *       The foreign estimates are not reported in accordance with the JORC Code.
              *       A competent person has not yet undertaken sufficient work to classify the foreign estimates as
                      mineral resources or ore reserves in accordance with the JORC Code.
              *       It is uncertain that, following evaluation and/or further exploration work, it will be possible
                      to report these estimates as mineral resources or ore reserves in accordance with the JORC Code.
                      ASX  Listing Rule 5.12 specifies that additional information must be provided to  the  market
                      in  any  announcement  containing  foreign estimates.  Forte  has  previously  provided  that
                      information in the Accompanying Notes in its announcement of 4 April 2014.


Forte  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.

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

No  significant  exploration works were carried out in Mauritania or Guinea during the quarter  with  the
Company focussing instead on acquisition activities and preserving its capital.

In  the event that the acquisition of European Uranium's Slovakian assets is completed successfully,  the
Company intends to undertake a review of its exploration priorities and objectives.


During the quarter, Forte has continued to focus on corporate and acquisition activities. The Company has
maintained  its  strict cost control focus to minimise overheads and optimise its working  capital,  with
expected annual savings of approximately $750,000.

Despite the continued lethargy in the worldwide uranium market, Forte remains confident in the compelling
medium  to  long  term supply/demand fundamentals, which indicate a sizeable supply shortfall  in  coming
years.  Upon the successful completion of the European Uranium acquisition, Forte's expanded portfolio of
uranium assets will enhance the Company's prospects to capitalise on the strong long term fundamentals of
the uranium market.

The Company announced on 10th March 2014 that it had entered into a share exchange agreement with GRIT, a
company listed on the London Stock Exchange. Under the agreement, Forte issued 170,000,000 shares to GRIT
at  0.4  pence in return for 680,000 shares in GRIT at a price of £1 each. Forte still holds its original
allocation but may sell its GRIT shares in the future in order to raise additional working capital.

Forte  is pleased to announce that the Company yesterday entered into a short-term loan agreement.  Under
the  agreement Forte has issued a Loan Note for £437,500, repayable by 10 July 2014. The loan  funds  are
being utilised whilst the Company monetises its GRIT shares. If the loan is not repaid by this date, then
the  loan amount will increase to £481,250, the repayment period will be extended until January 2016  and
the lender may elect to convert all or part of the loan at the lower of 0.4 pence per share or 80% of  an
average  market price calculated during the twenty days prior to conversion. The agreement also  requires
that,  subject  to  shareholder approval, Forte issue 164,062,500 warrants with a 5-year  expiry  and  an
exercise  price of 0.4 pence per share to the lender. Further details will be included in the  Notice  of
Meeting and its associated announcement that is currently being prepared.

The Company also has £9.4 million ($17 million) available under its £10 million Equity Financing Facility
("EFF") with Darwin as announced on 15 February 2013.

Mark Reilly
Managing Director

For further information contact:

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

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

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

Oliver Morse / Trinity McIntyre
RFC Ambrian Ltd                                  Tel: +61 (0) 8 9480 2500
(AIM Nominated Adviser to the Company)

Forte Energy NL

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


Forte held the following interests in mining tenements at the end of the Quarter:

LOCATION             TENEMENT NAME/PROJECT                        TENEMENT               INTEREST
Republic of          Kankan (Bohoduo)                              XP 107                  100%
Guinea               Kankan (Bohoduo)                              XP 129                  100%
                     Kissidougou (Firawa)                          XP 110                  100%
                     Kissidougou (Firawa)                          XP 130                  100%
Republic of          Steilet Zednes                                XP 281                  100%
Mauritania           D' Adem Essder                                XP 282                  100%
                     Rhall Amane                                   XP 283                  100%
                     Tisram                                        XP 284                  100%
                     Gleibat Ten Ebdar                             XP 285                  100%
                     Legleya                                       XP 286                  100%
                     Hassi Baida                                   XP 948                  100%
                     Ouissuat                                      XP 949                  100%
                     Bir Ould Ben Nassar                           XP 1173                 100%
                     Nord Tmeimichat Rhall Amane                   XP 1588                 100%
NOTE:           XP = Exploration Permit

There  were  no  tenements acquired or disposed of during the Quarter and no changes  in  the  beneficial
interests held by the Company.

About Forte Energy

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

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

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

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

        * A238NW Anomaly included in the A238 Inferred Resources
The  Company  is  quoted on the Australian Stock Exchange (ASX: FTE) and AIM market of the  London  Stock
Exchange (AIM: FTE). For more information, visit

The information in this report that relates to the reporting of Mineral Resources is based on information
compiled  or  reviewed 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

The  information in this announcement that relates to the reporting of foreign mineral resource estimates
is  provided  under  ASX listing rule 5.12 and is an accurate representation of the  available  data  and
studies for the Kuriskova and Novoveska Huta uranium deposits and is based on information reviewed by  Mr
Dorian  (Dusty) Nicol. Mr Nicol is President and CEO of European Uranium Resources Ltd.  Mr  Nicol  is  a
Fellow  of  the AusIMM, a Registered Member of the SME, a Certified Professional Geologist, a  Registered
Geologist in the state of Wyoming, USA and is a Qualified Person under NI 43-101.

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

ABN                                                           Quarter      ended      ("current
59 009 087 852                                                          31 March 2014

                                                            Current quarter       Year to date
Cash flows related to operating activities                       A$'000            (9 months)
1.1       Receipts from product sales and related debtors              -                   -
1.2       Payments for  (a)  exploration and evaluation            (101)               (770)
               (b)  development                                        -                   -
               (c)  production                                         -                   -
               (d)  administration                                 (147)             (1,078)
1.3       Dividends received                                           -                   -
1.4       Interest  and  other items of a  similar  nature                                       
          received                                                     2                   2
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                                 (246)             (1,846)
          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                                           -                 100
               (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                                     -                 100
1.13      Total   operating  and  investing   cash   flows         (246)             (1,746)
          (carried forward)

Consolidated statement of cash flows

1.13      Total   operating  and  investing   cash   flows         (246)             (1,746)
          (brought  forward)
          Cash flows related to financing activities                                        
1.14      Proceeds from issues of shares, options, etc.                -               1,436
1.15      Proceeds from sale of forfeited shares                       -                   -
1.16      Proceeds from borrowings                                     -                  87
1.17      Repayment of borrowings                                      -                   -
1.18      Dividends paid                                               -                   -
1.19      Other - Settlement of Guarantee                                                        
          Net financing cash flows                                     -               1,523
          Net increase (decrease) in cash held                     (246)               (223)
1.20      Cash at beginning of quarter/year to date                  303                 280
1.21      Exchange rate adjustments to item 1.20                       -                   -
1.22      Cash at end of quarter                                      57                  57
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                    57
        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
        in which the reporting entity has an interest

Financing facilities available
Add notes as necessary for an understanding of the position.

                                                   Amount available             Amount used
                                                         '000                      '000
3.1       Loan facilities                                  -                         -
3.2       Credit standby arrangements                 GBP 10,000                  GBP 587
See also Note 6 for details of Discretionary Equity Financing Facility

Estimated cash outflows for next quarter
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
5.1     Cash on hand and at bank                                  57                   303
5.2     Deposits at call                                           -                     -
5.3     Bank overdraft                                             -                     -
5.4     Other (provide details)                                    -                     -
        Total: cash at end of quarter (item 1.22)                 57                   303

Changes in interests in mining tenements

                               Tenement       Nature of interest      Interest   at  Interest  at
                               reference      (note (2))              beginning  of  end       of
                                                                      quarter        quarter
6.1     Interests  in  mining                                                              
        reduced or lapsed
6.2     Interests  in  mining                                                        
        tenements    acquired
        or increased

Issued and quoted securities at end of current quarter
Description  includes rate of interest and any redemption or conversion rights together with  prices  and

                                       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                                                                  
7.2     Changes during quarter                                                                      
        (a)  Increases through                                      
        (b)  Decreases through
        returns of capital, buy-
        backs, redemptions
7.3     +Ordinary securities          1,416,495,311   1,416,495,311                               
                                          2,250,000               -            25                1
7.4     Changes during quarter                                                                    
        (a) Increases through                                                                     
        Issue to GRIT under share                                                                 
        exchange agreement              170,000,000     170,000,000    0.75 cents       0.75 cents
         (b)  Decreases through                                    
        returns of capital, buy-
7.5     +Convertible          debt                0                                               
        securities   (description)
        (refer   to  Appendix   3B
        dated 6 June 2013)
7.6     Changes during quarter                                                                    
        (a)  Increases through
        (b)  Decreases through
        securities matured,
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                                                                    
7.11    Debentures                                                                                  
        (totals only)
7.12    Unsecured notes                                                                             
        (totals only)

Compliance statement

1     This  statement has been prepared under accounting policies, which comply with accounting  standards
      as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

2     This statement does give a true and fair view of the matters disclosed.

Sign  here:        ..............................................         Date:   30  April 2014.
                   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.

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