Forte Energy NL
LSE : FTE

May 03, 2011 02:00 ET

Quarterly Cashflow and Activities Report

                                                                                                      
                                                                                       FORTE ENERGY NL
                                                                                       ACN 009 087 852
                                                                                     ASX/AIM CODE: FTE
                                                       Telephone: +618 9322 4071, Fax: +618 9322 4073
                                                                                                     
                                                                                                     
                                                                                         Quarterly Report
                                                                                               March 2011
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
Uranium Exploration - Mauritania (West Africa)
*   Estimation of a preliminary maiden JORC resource for A238 uranium prospect remains on track  for
    H1 2011, with all assay results received from 7,000m Reverse Circulation ("RC") component of resource
    drilling programme and final assays being processed from recently completed 1,500m diamond core drilling
    programme
*   Completion  of  additional  1200m  RC drilling programme in March  concentrating  on  previously
    identified high grade shoot at A238 aimed at increasing the size and confidence level of the potential
    resource.
        
*   7000m  RC drilling programme across other high priority targets within the Company's Mauritanian
    leases is nearing completion with initial assays expected shortly
    
Uranium and REE Exploration - Guinea (West Africa)
*    Programme of up to 15,000m of extension and infill RC drilling is currently underway  aiming  to
     increase the current Inferred JORC resource of 17.7Mt grading 296ppm U3O8 for 11.6 million pounds of
     contained U3O8 at Firawa
*    Samples have been prepared and dispatched for re-assaying for Rare Earth Elements (REE) from the
     7,000 samples stored at Firawa from previous drilling. First assay results are expected shortly with
     estimation of a JORC resource expected in Q3.
        
*    Pre-feasibility  studies  are  continuing  with  GBM  Engineering  carrying  out  comprehensive
     metallurgical testing to aid with process design for U3O8/REE recovery and preliminary field work well
     advanced for base line environmental and anthropological studies by SGS
        
Republic of Mauritania, West Africa
In  Mauritania, the main focus has been on the resource drilling programme at the A238 uranium  prospect,
located  55km south-east of the town of Bir Moghrein. The 7000m RC drilling component has been  completed
and  all  assay  results received. Some assays have also been received from the recently completed  1500m
diamond  core  drilling  component. The Company remains on target to  release  a  preliminary  JORC  code
compliant uranium resource during Q2 of 2011.
Table 1 - Highlights from drillhole assays obtained to date from A238
Hole              UTM           UTM         AZIM      DIP     From    To       metres    ppm U      est ppm
                  Easting       Northing                                                            U3O8
238RC73            284555     2771242        55      -50      35       44         9       310        366
238RC75            284420     2771390        55      -50      18       63        45       288        340
238RC81            283957     2772103        55      -50      13       30        17       325        383
238RC100           284186     2771711        55      -70      14       27        13       456        538
238RC101           284147     2771686        55      -70      74      118        44       555        654
238RC102           284203     2771726        55      -70       0       52        52       434        512
238RC104           284108     2771784        55      -70      29       84        55       476        561
238RC105           284080     2771764        55      -70      72      103        31       332        392
                                                             107      159        52       321        379
238RC107           284218     2771617        55      -70      53      133        80       369        435
238RC109           284272     2771532        55      -70     110      126        16       267        315
238RC110           284358     2771470        55      -70      84      114        30       362        427
238RC112           284424     2771393        55      -70      21       49        28       234        276
                                                              72      102        30       366        432
238RC115           284507     2771331        55      -70      31       35         4       546        644
238RC116           284068     2771878        55      -70      71       82        11       318        375
238DD01            284242     2771573        55      -60      71      119        48       311        367
238DD02            284301     2771491        55      -60      95      119        24       457        539
238DD03            284362     2771411        55      -60      70       76         6       512        604
                                                             105      136        31       413        487
238DD04            284434     2771340        55      -60      90      110        20       381        449
Note: Lengths reported do not represent true widths.
An additional 1200m RC drilling programme at A238 was completed in March, concentrating on the previously
identified  high grade shoot. This drilling is aimed at increasing the size of the potential resource  to
be  reported  as well as the confidence level, possibly enabling some Indicated Resource to be  reported.
After assessing modelling of results received so far, an RC rig has returned to A238 to carry out further
drilling before the end of the current field season in a few weeks time.
An  extensive programme of around 7000m of RC drilling within the Company's exploration licences  in  the
Zednes  region of northern Mauritania is nearing completion. This programme is investigating a number  of
other  high priority uranium prospects identified, including A29 anomaly, located approximately  20km  to
the south of A238 and the Temreikat prospect on the northern-most licence, permit 284. Further details of
these prospects will be announced shortly when initial assay results are received.
Field  surveys including mapping, trenching, radiometrics and radon sampling are continuing to assist  in
the identification and assessment of new prospects and in determining additional drill targets.
Republic of Guinea, West Africa
Forte  Energy  has  four  exploration permits in Guinea covering its Firawa and Bohoduo  prospects  which
include exploration for both uranium and REEs. The Firawa prospect has an initial JORC compliant Inferred
Resource of 17.7Mt at 296ppm for 11.6Mlbs U3O8 (100ppm cut-off), but remains open in all directions.
Extensive rehabilitation works on roads and bridges and clearing of local access tracks were carried  out
to  improve access for heavy vehicles transporting drilling equipment to the Firawa site. Construction of
a permanent base camp is also underway to support field activities.
A  programme  of up to 15,000m of extension and infill drilling is currently underway aiming to  increase
size  and  confidence  level of the current Inferred JORC U3O8 resource at Firawa.  After  completion  of
drilling and receipt of assay results, it is expected that a revised JORC code compliant resource will be
calculated for Firawa later this year.
Following  the  discovery  of  Rare Earth Elements within six randomly  selected  samples  from  previous
drilling  at  Firawa,  it  was  decided  to re-assay the 7000m of  drilling  samples  stored  at  Firawa.
Preparation and dispatch of these samples for re-assaying has now been completed. The first assay results
are  expected  shortly.  It is anticipated that all results will be received and  an  initial  JORC  code
compliant  REE  resource calculated during Q3 of 2011. A table showing the results for  the  initial  six
samples follows:
Table 2 - Firawa, REE assays
Element            Units      Original      FRW12:        FRW12:        FRW14:        FRW30:      FRW31:
                                Sample       44-45         46-47         42-43         32-33         4-5
Cerium                 ppm        5330       11650         13900         11600         10150        9740
Dysprosium             ppm         235         406           480           331           356         333
Erbium                 ppm          80         114         132.5           107           100       113.5
Europium               ppm         154         287           346           245           270         236
Gadolinium             ppm         448         550           672           477           590         444
Holmium                ppm        31.6        51.5          60.9          45.6          49.7        46.2
Lanthanum              ppm        2409        5070          6050          4510          4210        4160
Lutetium               ppm         5.6        8.52          8.28          7.91          6.76        7.23
Neodymium              ppm        2953        5770          6880          6080          5490        4890
Praseodymium           ppm         760        1450          1725          1530          1315        1230
Samarium               ppm         530        1050          1255           981           879         883
Terbium                ppm        54.8        82.9          99.7          67.9            71        66.4
Thulium                ppm           8        12.6          14.7            83            19        18.2
Ytterbium              ppm          44        68.5          71.8          61.4            55        62.8
Total REE                %       1.30%       2.66%         3.17%         2.61%         2.36%       2.22%
During  the  quarter, UK based mineral engineering consultants, GBM Engineering, commenced  comprehensive
metallurgical  testing as part of pre-feasibility work aimed at developing a full  Uranium/  REE  process
design for the Firawa Uranium Project.
Global engineering firm SGS also commenced preliminary field work during the March quarter for base  line
environmental  and  social  impact  surveys in the region of the Firawa  deposit  as  part  of  the  pre-
feasibility studies.
Conclusion
Forte  Energy  is  pleased with the progress made during the March quarter in advancing  its  exploration
programmes  in both Mauritania and Guinea and is excited by their potential for increasing  the  existing
uranium  resources  in  both countries and a maiden REE resource for Firawa during  2011.  As  previously
announced the Company completed a capital raising during the quarter (of which some of the funds from the
second tranche overlapped the quarter end) ensuring that the Company is in a strong financial position to
pursue these exploration programmes and progress pre-feasibility studie for the Firawa prospect.
Mark Reilly
Managing Director
30 April 2011
For further information contact:
Mark Reilly, Managing Director
Forte Energy N.L.                                Tel: +44 (0) 203 300 0187
Stuart Laing
RFC Corporate Finance                            Tel: +61 (0) 8 9480 2506
(AIM Nominated Adviser to the Company)
Robin Henshall/Tim Graham
Matrix Corporate Capital LLP                     Tel: +44 (0) 203 206 7000
Jos Simson/Emily Fenton
Tavistock Communications                         Tel: +44 (0) 207 920 3150
Nicholas Read/Paul Armstrong
Read Corporate                                   Tel: +61 (0) 8 9388 1474
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  full  time  Technical Director of Forte Energy NL and is responsible  for  exploration
activities  in Mauritania and Guinea. 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'.
The  information  in  this report that relates to the Mineral Resource at Firawa in Guinea  is  based  on
information compiled by Mr. Bosse Gustafsson of Forte Energy NL and Mr. Doug Corley of Coffey Mining Ltd.
Mr. Gustafsson and Mr. Corley have sufficient experience which is relevant to the style of mineralisation
and  type of deposit under consideration and to the activity which they have 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  and  Mr. Corley consent to the inclusion in this report of the matters  based  on  their
information in the form and context in which it appears.
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                                                          31 March 2011
                                                            Current quarter       Year to date
Cash flows related to operating activities                       A$'000            (9 months)
                                                                                     A$'000
1.1       Receipts from product sales and related debtors              -                   -
1.2       Payments for  (a)  exploration and evaluation          (1,850)             (3,843)
               (b)  development                                        -                   -
               (c)  production                                         -                   -
               (d)  administration                                 (636)             (1,880)
1.3       Dividends received                                           -                   -
1.4       Interest  and  other items of a  similar  nature                                  
          received                                                    28                 135
1.5       Interest and other costs of finance paid                     -                   -
1.6       Income taxes paid                                            -                   -
1.7       Other (provide details if material)                          -                   -
                                                                                            
          Net Operating Cash Flows                               (2,458)             (5,588)
                                                                                                 
          Cash flows related to investing activities                    
1.8       Payment for purchases of:                                                              
               (a) prospects                                           -                   -
               (b) equity investments                                  -                   -
               (c) other fixed assets                              (134)               (142)
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                                 (134)               (142)
1.13      Total   operating  and  investing   cash   flows       (2,592)             (5,730)
          (carried forward)
Consolidated statement of cash flows
1.13      Total   operating  and  investing   cash   flows       (2,592)             (5,730)
          (brought  forward)
                                                                                            
          Cash flows related to financing activities                                        
1.14      Proceeds from issues of shares, options, etc.           13,570              13,678
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                                13,570              13,678
                                                                                            
          Net increase (decrease) in cash held                    10,978               7,948
          
1.20      Cash at beginning of quarter/year to date                1,057               4,092
1.21      Exchange rate adjustments to item 1.20                     (1)                 (6)
1.22      Cash at end of quarter                                  12,034              12,034
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                   218
        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                                                   1,250
4.2     Development                                                                      -
4.3     Production                                                                       -
4.4     Administration                                                                 550
          Total                                                                      1,800
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                               3,534                 1,057
5.2     Deposits at call                                       8,500                     -
5.3     Bank overdraft                                             -                     -
5.4     Other (provide details)                                    -                     -
        Total: cash at end of quarter (item 1.22)             12,034                 1,057
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
                                                                       per security       paid up
                                                                       (see note 3)           per
                                                                            (cents)      security
                                                                                        (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          669,756,735        582,658,031                           
                                        2,250,000                -             25             1
7.4     Changes during quarter                                                                   
        (a) Increases through                                                                  
        issues                                                                                 
        Issue for cash                 87,098,704       87,098,704           12.5          12.5
         (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    26/11/13
                                                 
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 2011.
                    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.
                                                                                                         
                                                                                                         
                                                                                                         

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