News
Focus Starts Major New Exploration Program
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FOCUS SETS OUT PLAN TO REBUILD HIGH-GRADE RESOURCES IN COOLGARDIE; POSITION OPERATION FOR A RETURN TO PRODUCTION
Key points:
|
Focus Minerals Ltd. (ASX: FML) said today that it is initiating a major new exploration programme at its Coolgardie Gold Project focusing on two primary systems that host multiple high-grade targets, with the aim of extending Coolgardie’s mine life to three years.
The 24 month programme has been devised following a change in exploration strategy after the closure of operations in Coolgardie that has enabled the business to focus on a longer-term exploration horizon.
The programme will focus on four priority target areas ranging from resource extensional drilling to conceptual exploration that are all in close proximity to the Three Mile Hill mill.
“Following the closure of the Coolgardie operations, we were able to take a clean sheet approach to our exploration programmes,” said Focus Minerals Chairman and Acting CEO, Don Taig.
“Ever since we went into production at the high-grade underground Perseverance orebody in 2008, we have essentially been chasing our tail on the exploration front with a constant need to weight the focus of our exploration programmes to short-term tonnes to feed the mill.
“We’ve now had our exploration team start afresh with a remit of looking to target high-grade targets that have scale, continuity and underground potential.
“We now have a four phase plan over the next 24 months that will see a really concentrated focus on an area that has had proven, high-grade underground mining success.
Four Initial target areas in the first phase of drilling are:
1. Brilliant Deeps
The Brilliant trend contains existing resources and known mineralisation along a 2.6km corridor from Brilliant to King Solomon. A number of initial holes have been designed in a programme to extend the Brilliant resource at depth including testing beneath the State Battery. Historic drill intercepts include: 8m @ 20.7g/t Au and 7m @ 3.7g/t Au.
2. Bayleys to Hanover
Bayley’s Reward was the first gold discovery on the Coolgardie field, in 1892. The Bayleys Line extends over 2.5km with reef-style lodes that have produced over 300,000oz @ 16.1g/t Au. There has been little exploration beyond the immediate mine area. The initial programme will therefore test the Bayleys Line between Bayleys and Hanover where historic RC drilling has returned 7m @ 19.64g/t and 7m @ 94.76g/t. Subsequent drilling is then planned along this line at Cosgrove and Golden Bar to test other positions.
3. Perseverance North
The Perseverance deposit has been successfully mined underground producing in excess of 100,000oz @ 11.7g/t Au. The drill targets that will be tested north of Perseverance have been less well-defined by previous drilling. The exploration programme represents an excellent conceptual model for a style of high-grade mineralisation that remains under-explored in the area.
4. Kings Cross analogues: Redemption & Lady Luck
The historic Kings Cross mine was developed on a structured that splayed off the Bayleys line, producing 100,000oz at 5.64g/t. There are multiple parallel structures to Kings Cross that also cross-cutting the Bayleys Line, some of which host old workings and anomalous gold in drill results. A small drilling program will therefore test two of the areas rated as having high potential: Redemption and Lady Luck.
Strategic Update
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FOCUS MINERALS STRATEGIC UPDATE
The Chairman and the Board of Directors of Focus Minerals Ltd would like to provide Shareholders with an update on the company’s restructuring post the suspension of its Laverton and Coolgardie operations, and its plans for growing shareholder value moving forward:
Changing Market Conditions
The resources industry has been experiencing a period of intense turmoil due to the steep fall in the price of gold and other metals in a rising cost environment. This has led to a number of major international gold producers recalibrating their Australian assets and, unfortunately, many smaller operators facing significant funding cash constraints.
Focus has acted decisively during the course of these global headwinds, taking the strategic decision to suspend mining at all operations in order to preserve cash and shareholder value. Our actions over recent months have enabled the Board and management to plan comprehensively for a profitable future rather than trying to reset the business on the run.
Focus has unique strengths; having a large bank balance and the strategic support of major international gold producer Shandong Gold as a cornerstone investor. Shandong Gold understands the industry challenges first hand and maintains its long-term view on its investment in Focus. The company is supporting Focus’ need to make necessary changes and encouraging new growth opportunities.
We expect the price of gold to go through what many will interpret as signs of recovery. In Australian dollar terms, the exchange rate will also have an impact from time to time. This being said, we are of the very strong view that irrespective of what the gold price does in the next year or two, Focus needs to concentrate on the margin it makes from mining and processing its gold resource to maximise the end result for the Company and its shareholders. We have spent a considerable amount of time since my domicile in Perth, restructuring the business to achieve this aim and locking in a business model with a much lower fixed cost base and with people that can manage this new business environment.
The group’s vision is for Focus to become a low cost, high value gold producer. To achieve this we are pursuing a Three Point Plan:
1. Establish a new, low cost operating structure
Focus is establishing an outsourced business model for its operations moving forward. This is possible because of our recent actions allowing us to take a clean sheet approach and restructure the business.
Importantly, we will not be outsourcing management control of the business. We have the opportunity to establish a framework that enables the company to achieve a more stable, predictable cost base, both now and moving forward.
To this end, the business has made further changes to its organisational structure to ensure it is resourced appropriately for this stage of its re-development. This recognises that the immediate future will be built on exploration and business development and we have retained a small and committed group of core leaders and technical experts who can continue to pursue these goals, whilst having the capability to gear the business for future growth.
This team will be supported by a number of outsourced functions. We have already arranged to outsource the payroll system, company secretarial function, human resources capability and investor relations. We intend to outsource as much of our operations as is logical which will include all mining services on a future return to production.
When not undertaking mining and processing activities, the biggest single expense for the business is salaries and wages and on-costs. During the mining boom, this expense grew very fast for all industry participants in an effort to both attract and retain the right staff.
We have moved to arrest this. In addition to the savings made through outsourcing, we have put in place a salary freeze, the Board has volunteered a 10% reduction in remuneration and I have volunteered a 33% reduction in my per diem rate as Acting CEO.
When I took over as Acting CEO in March, group salaries were $22 million per annum. Suspending operations at Laverton and Coolgardie and placing them on to care and maintenance, coupled with this final restructure work in the Head Office, has resulted in Group salaries of less than $5 million per annum. With this new model, it is my expectation that very few additions will be required in the business going forward and this cost will largely move in line with market realities.
We have also acted to ensure our balance sheet appropriately reflects the underlying values for our assets. The market has endured some significant impairment charges from major gold companies and miners this reporting season. Australia’s accounting standards require Focus to undergo a similar review each year. The Company has undertaken an independent review by BDO Corporate of our carrying values, and we expect to book write-downs for the fiscal year ended June 30 2013 of $84.9 million. The operating loss for the year will be in the region of $67 million, plus takeover costs for the acquisition of the remaining minority interests in Laverton of circa $4 million and shutdown and restructuring costs for the operations of $10.5 million. This will take the full year loss to circa $166 million (unaudited). The bulk of these profit and loss matters are non-cash. The annual audit is almost completed.
Allowing for the majority of shutdown costs associated with Coolgardie having now flowed through, our cash in the bank as at 31 July 2013 was $101 million (excluding $15 million in DMP security deposits), which ensures a significant war chest remains in place for the business.
The business is now lean, with low capital expenditure. It has a strong, unencumbered balance sheet moving forward and the right people and support structure in place to enable us to pursue our vision of returning to production as a low cost, high grade gold producer.
2. Business Development
The second pillar in our Three Point Plan is to leverage our financial strength to pursue targeted business development opportunities.
Focus has removed all financial encumbrances from its asset base in order to have the option to offer first ranking priority on any future financing should it choose.
Our strategic partnership with Shandong Gold enhances our access to international capital markets, and Focus has a flexible remit in its business development strategy contemplating a full suite of options including acquisitions, divestments, mergers, and joint ventures.
The most important principle for any business development opportunity is that it must create sustainable value for shareholders. Over the last few years, Focus has not consistently created value. Investment timing, some internal resource allocation decisions, and the massive fall in the gold price have contributed to this.
Moving forward, I and the new management team have recommended to the Board a set of stringent criteria for assessing projects in that they must be:
• High grade assets that can be economic across a range of potential gold prices especially against the consensus view from time to time of the long term gold price and exchange rate position;
• Synergistic to Focus’ existing operations – either adjacent to and releasing value in Focus’ current ground, or within economic trucking distance;
• Australian assets that are in, or very close to, production outside of our immediate footprint; or
• Overseas assets that are in, or close to production.
Importantly, with a well-managed cost base and a strong balance sheet, Focus can act on opportunities with patience, not haste. Indeed, we have already reviewed a number of adjacent opportunities to our current operations. Being careful not to over-extend our financial resources, we have chosen not to acquire any of these opportunities. We remain confident that the current environment will continue to present opportunities that are capable of being value accretive in the short term.
3. Asset Development
Thirdly, Focus will leverage its capital to develop its current assets for a return to production, or for potential sale:
Coolgardie > Targeting a long term, high grade reserve to return to production
In Coolgardie we have reset our exploration goals. With the suspension of mining, we have been able to shift our focus from short-term tonnes to feed the mill, to high-grade targets on which we can build our future.
Coolgardie has a history of proven, high-grade underground mining success. We have developed a three year exploration plan goaled with building a solid, sustainable reserve base that provides at least three years of mining confidence (see Appendix 1).
Critically, we are targeting future Ore Reserves at Coolgardie that are of sufficiently high grade to safeguard the operation against future down-turns in the gold price.
Our exploration plan has been designed with a view to re-starting operations within two years.
Delivering on this would also enable us to lock in highly competitive commercial contracting arrangements before any restart is contemplated to ensure the business has a predictable, sustainable cost base going forward.
As a part of this exploration plan we are kicking off Phase One with four new programmes (approved at the August Board meeting) focusing on targets that range from resource extension to advanced greenfields (see separate ASX announcement 20 September 2013).
During this exploration phase, the Three Mile Hill mill remains a key asset that can continue to be monetised for shareholders. It is one of the only operating mills within a 100km radius around the Coolgardie/Kalgoorlie gold belt with significant spare capacity for processing, and there are a number of developers in the region who have a need to process their ore. We will explore this potential as long as it is economically viable.
Laverton > Multi-option approach: Pursuing business development opportunities in parallel with greenfields methodology to exploration
The Laverton district is one of the best gold endowed regions in Australia. Over 28 million ounces of gold have been produced in recent history and it is home to three world class producing mines.
We mined over 100,000oz of gold in Laverton last year but without full control over our processing arrangements the economics of mining in Laverton have not stacked up and were made worse by the gold price collapse.
Given the exploration potential, and sheer scale of resources in the region, we are pursuing a multi-option approach to how we can best unlock this value in the ground.
On the exploration front, this has seen us return to first principles in the area. We have developed a conceptual model based on the regional stratigraphy, geology and past mapping to develop a set of priority targets where our exploration geologists believe there are the best opportunities for discovering large scale, high-grade deposits.
As a part of this work, we have determined to rationalise our tenement holding. We have, over recent months, removed a lot of the encumbrances that we inherited across some of our Laverton tenements and this has in turn allowed us to drop a number of unprospective tenements to rationalise our minimum expenditure commitments.
This now means we are in a position to steadily pursue nine priority target areas in Laverton that are not exposed to extraneous royalty constraints and, we believe, are highly prospective for discovery (Appendix 2).
In parallel, we are continuing to pursue an active business development path looking to the potential for either pursuing strategic acquisitions in the region, or entering into ventures that would enable us to unlock the value we have in our assets across Laverton.
The Board is pleased with the progress being made so far on this Three Point Plan to set the business up to drive to become a low cost, high value gold producer. The Board has asked me to commit to continue to lead these changes beyond the original date of September 2013 in an unchanged capacity. Accordingly I have given my commitment to the Board and the team to remain in the dual role of Chairman and Acting CEO based in Perth until we have delivered the foundations for the changes we are driving towards as a team and re-established the path for value and growth for our shareholders.
I have discussed with the Board the impact this extension could have upon our Corporate Governance principles. Whilst I know how to handle the two roles and which hat is being worn at different times, we must also be seen to be doing the correct thing as well.
As a result, we have made significant changes to our Committee structure (Appendix 3) which underpins the board’s Governance activities in order to improve the transparency – especially in the key area of Audit and Risk – of this approach. Included as an appendix is the Board structure for your information and the Committee Structure supporting the Board and the responsibilities of each.
With a low cost operating model moving forward, some smart acquisitions, a high-grade focus at Coolgardie, multiple options around our Laverton business, a strong cash balance and the support of our corner stone investor, Focus is well positioned to pursue its vision of returning to production as a low cost, high value gold producer.
The road ahead will still be influenced by market volatility, but we have put the company in the best possible state to seize opportunities that will arise. We are clearly focussed on building a strong and stable platform for future growth. I know this has been a concerning time for shareholders, but the Company remains very sound, well-funded, and well supported through Shandong Gold. The Board thanks its staff, shareholders and partners for their patience, understanding and support.
DON TAIG
Chairman & Acting CEO
Quarterly Cashflow Report
Rule 5.3
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 |
FOCUS MINERALS LIMITED |
ABN | Quarter ended (“current quarter”) | |
56 005 470 799 |
|
30 JUNE 2013 |
Consolidated statement of cash flows
Cash flows related to operating activities
|
Current quarter $A’000 |
Year to date $A’000 |
|
1.1 |
Receipts from product sales and related debtors |
26,788 |
214,768 |
1.2 | Payments for (a) exploration & evaluation |
(3,746) |
(15,343) |
(b) development |
(4,332) |
(14,419) |
|
(c) production |
(52,958) |
(235,379) |
|
(d) administration (e) royalties paid |
(5,364) (15,721) |
(18,927) (23,431) |
|
1.3 |
Dividends received |
– |
– |
1.4 |
Interest and other items of a similar nature received |
1,906 |
3,581 |
1.5 |
Interest and other costs of finance paid |
– |
– |
1.6 |
Income taxes paid |
– |
– |
1.7 |
Other (provide details if material) |
962 |
2,264 |
Net Operating Cash Flows |
(52,465) |
(86,886) |
|
Cash flows related to investing activities |
|
|
|
1.8 |
Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets |
– – (1,738) |
– – (7,475) |
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) – Bonds – Takeover costs |
(170) – |
(12,165) – |
Net investing cash flows |
– |
– |
|
1.13 |
Total operating and investing cash flows (carried forward) |
(1,908) |
(19,640) |
1.13 |
Total operating and investing cash flows (brought forward) |
(54,373) |
(106,526) |
Cash flows related to financing activities |
|
|
|
1.14 |
Proceeds from issues of shares, options, etc. Share issue costs |
– |
218,091 |
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 (provide details if material) |
– |
– |
Net financing cash flows |
– |
218,091 |
|
Net increase (decrease) in cash held
|
(54,373) |
111,565 |
|
1.20 |
Cash at beginning of quarter/year to date |
168,541 |
2,603 |
1.21 |
Exchange rate adjustments to item 1.20 |
– |
– |
1.22 |
Cash at end of quarter |
114,168 |
114,168 |
Gold on hand – At 30 June 2013 the Company held 1,314 ounces of gold in its metal account with the Perth Mint.
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 |
||
1.23 |
Aggregate amount of payments to the parties included in item 1.2 |
149 |
1.24 |
Aggregate amount of loans to the parties included in item 1.10 |
– |
1.25 |
Explanation necessary for an understanding of the transactions |
|
|
Director fees & superannuation expense.
|
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 $A’000 |
Amount used $A’000 |
||
3.1 |
Loan facilities |
10,000 |
8,000 |
3.2 |
Contingent Instrument Facility
|
18,000 |
7,037 |
Estimated cash outflows for next quarter
$A’000 |
||
4.1 |
Exploration and evaluation |
1,305 |
4.2 |
Development |
0 |
4.3 |
Production |
12,372 |
4.4 |
Administration |
2,817 |
Total |
16,494 |
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. |
Current quarter $A’000 |
Previous quarter $A’000 |
|
5.1 |
Cash on hand and at bank |
114,159 |
168,542 |
5.2 |
Deposits at call |
– |
– |
5.3 |
Bank overdraft |
– |
– |
Available cash (item 1.22) |
114,159 |
168,542 |
|
5.4 |
Other (provide details) – Bonds |
25,431 |
25,200 |
Total: cash at end of quarter |
139,590 |
193,742 |
Changes in interests in mining tenements
|
|
Tenement reference |
Nature of interest (note (2)) |
Interest at beginning of quarter |
Interest at end of quarter |
6.1 |
Interests in mining & prospecting tenements relinquished, reduced or lapsed
|
P38/3766
P38/3702 P38/3708 P38/3709 P39/4648 P39/4782 E38/1930 E39/1296 M38/372 M38/694 P38/3496 P38/3497 P38/3499 P38/3717 P38/3718 P38/3719
|
Lapsed Lapsed Lapsed Lapsed Transferred Transferred Transferred Transferred Transferred Transferred Transferred Transferred Transferred Transferred Transferred Transferred |
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% |
0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
|
6.2 |
Interests in mining * prospecting tenements acquired or increased
|
P38/3974
P38/3975 P38/3976 P15/5716 P15/5730 P15/5749 P15/5750 P15/5756
|
Acquired Acquired Acquired Acquired Acquired Acquired Acquired Acquired
|
0% 0% 0% 0% 0% 0% 0% 0%
|
100% 100% 100% 100% 100% 100% 100% 100%
|
|
|
|
|
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 per security (see note 3) (cents) |
Amount paid up per security (see note 3) (cents) |
||
7.1 | Preference +securities (description) |
N/a |
|||
7.2 |
Changes during quarter (a) Increases (b) Decreases |
N/a |
|||
7.3 | +Ordinary securities |
9,137,375,877 |
9,137,375,877 |
|
|
7.4 |
Changes during quarter (a) Increases through issues
(b) Decreases through returns of capital, buy-backs |
300,694,977 13,909,548 |
300,694,977 13,909,548 |
1.7 cents 1.6 cents |
|
7.5 |
+Convertible debt securities (description) |
N/a |
|
|
|
7.6 |
Changes during quarter (a) Increases (b) Decreases |
N/a |
|
||
7.7 |
Options (description and conversion factor) |
13,500,000 15,000,000 |
– – |
Exercise price 12.3 cents 5.0 cents |
Expiry date 30 June 2014 28 February 2016 |
7.8 |
Issued during quarter |
15,000,000 |
– |
5.0 cents |
28 February 2016 |
7.9 |
Exercised during quarter |
– |
– |
– |
– |
7.10 |
Expired/cancelled during quarter
|
10,000,000
|
– |
12.3 cents
|
30 June 2014 |
7.11 |
Debentures (totals only) |
N/a |
|||
7.12 |
Unsecured notes (totals only)
|
N/a |
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: Paul Fromson Date 17 July 2013
Company Secretary
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.
== == == == ==Quarterly Cashflow Report
Quarterly Report for June 2013
QUARTERLY ACTIVITIES REPORT: APRIL – JUNE 2013
GROUP SUMMARY |
Key Points
- Focus remains in a strategically strong position with one of the largest bank balances of any gold miner on the ASX ($114.2M in cash and equivalents at 30 June) and the support of a major world gold producer in Shandong Gold
- Production for the period was 25,172oz of gold comprising 13,179oz from the Laverton operations and 11,993oz from the Coolgardie operations
- Exploration and resource development work across Coolgardie delivered some very positive intercepts from follow-up programmes across a suite of near mill targets
- As foreshadowed in the March Quarterly report, Laverton operations transitioned to care and maintenance following the completion of Campaign 15 through the Barrick Granny Smith Mill
- Coolgardie operations achieved a solid turnaround in mining, ramping-up at Greenfields, to increase production by 49% on the March quarter and deliver a reduction in C1 cash costs for the month of June of 21.14% over the March quarter
- Further to a strategic review announced in February, and subsequent to the end of the Quarter, Focus has taken the decision to suspend all mining activity at its Coolgardie operations following a further fall in the gold price (see ASX announcement dated 17 July, 2013)
- The Company remains focused on a strategy for creating long-term wealth for shareholders through the development of larger scale, higher grade ore bodies where it has full control over mining and processing
- This can be achieved either within its existing tenements through a continued focus on resource development and exploration or through the acquisition of synergistic assets that could add value to its existing landholdings
Group Results |
Jun-12 |
Sep-12 |
Dec-12 |
Mar-13 |
Jun-13 |
Mining | |||||
Ore Mined (tonnes) |
778,495 |
790,648 |
326,363 |
454,043 |
276,137 |
Grade (g/t) |
2.31 |
2.02 |
2.26 |
1.50 |
1.86 |
Gold In Ore (oz) |
57,936 |
51,410 |
23,682 |
21,924 |
16,537 |
Processing | |||||
Ore Processed (tonnes) |
751,186 |
796,407 |
717,222 |
744,398 |
651,975 |
Head Grade (g/t) |
2.11 |
1.91 |
1.78 |
1.03 |
1.20 |
Gold Produced (oz) |
48,222 |
48,959 |
41,097 |
24,592 |
25,172 |
Sales | |||||
Average price received |
1,593 |
1,553 |
1,654 |
1,596 |
1,374 |
Total Revenue ($ ‘000s) |
77,292 |
76,670 |
68,951 |
39,189 |
34,210 |
Attributable Revenue ($ ‘000s) |
70,415 |
69,406 |
61,083 |
34,316 |
34,210 |
OPERATIONS REVIEW |
LAVERTON OPERATIONS
Key Points
- As foreshadowed in the March Quarterly report, Laverton operations transitioned to care and maintenance following the completion of Campaign 15 through the Barrick Granny Smith Mill
- A core exploration and resource development group has been maintained along with a care and maintenance team at the operation
- The operation will now focus on steadily developing greenfield opportunities and rebuilding the reserve base at targets of a high enough grade and quality to enable the operation to determine potential future restart strategies.
Laverton Results |
Jun-12 |
Sep-12 |
Dec-12 |
Mar-13 |
Jun-13 |
Mining | |||||
Ore Mined (tonnes) |
477,238 |
524,493 |
181,694 |
341,747 |
85,005 |
Grade (g/t) |
1.89 |
1.79 |
1.93 |
1.35 |
1.45 |
Gold In Ore (oz) |
29,020 |
30,238 |
11,262 |
14,814 |
3,956 |
Processing | |||||
Ore Processed (tonnes) |
455,237 |
492,146 |
444,060 |
516,066 |
402,895 |
Grade (g/t) |
1.76 |
1.83 |
1.80 |
1.00 |
1.08 |
Gold Produced (oz) |
23,456 |
25,782 |
25,674 |
16,556 |
13,179 |
Safety
Laverton Operations experienced one lost time injury.
Production
As foreshadowed in the March quarterly report, the Laverton operations finished production on 30 May moving to a care and maintenance position, with a continuing focus on exploration and resource development.
The decision to close followed lengthy discussions with Barrick in regards to improving the terms of the processing agreement at its Granny Smith Mill. Given the current gold price and increasing processing fees faced, the decision was taken to cease mining operations from the close of Campaign 15 in order to protect shareholder value.
Mining ceased on the 18th of May and Milling for campaign 15 completed on 30th May with the operations producing 13,179oz of gold for the quarter.
Costs associated with the closure of Laverton included:
Redundancies $899,000
Break fees on contracts $698,000
Other costs $52,000
Total $1,649,000
Moving forward the Laverton operation is focused on its rebuilding its reserve base with a view to positioning the operation to be able to make a decision on returning to production based on having sufficient reserves at a high enough grade, and the ability to fully control its processing operations.
COOLGARDIE OPERATIONS
Key Points
- Coolgardie operations achieved a solid turnaround in mining, ramping-up at Greenfields and delivering a reduction in C1 cash costs for the month of June by 21.14% over the March quarter
- Mining at Coolgardie’s small underground operation, The Mount, was suspended in mid-June with the operation proving to be economically unsustainable in its existing guise
- Further to a strategic review announced in February, and subsequent to the end of the Quarter, Focus has taken the decision to suspend all mining activity at its Coolgardie operations following a further fall in the gold price (see ASX announcement dated 17 July, 2013)
Safety
Coolgardie Operations experienced three lost time injuries.
Production
Production continued to steadily ramp up at the new Greenfields open pit with the operations delivering a 49% improvement on the March quarter to deliver 11,993oz of gold.
The ramp up in mining was heavily weighted to the second half of the quarter, with the month of June showing a reduction in C1 cash costs over the March quarter of 21.14% (down to $1,899/oz). Tonnes mined improved notably over the March quarter with the additional return to mining at Big Blow.
A decision was reached during the quarter to suspend mining at The Mount. Significant work had been undertaken by management and personnel on site in increasing production levels whilst reducing site operating costs and improving operational efficiencies. However, their efforts notwithstanding, the recent low gold price compounded by the fixed cost components in running the operation led to the decision to suspend operations.
The Mount will remain suspended until a profitable, long-term operational model is developed from the significant information that has been collected during the initial exploration mining activities and the site is being left in the best possible condition for a future restart.
Subsequent to the end of the Quarter, Focus also took the decision to suspend all other mining activity across its Coolgardie operations given the recent gold price instability and based on the Coolgardie operations having insufficient high-grade ore available to ensure profitability at these gold prices.
The operations will be transitioned to care and maintenance with the assistance of Como Engineers to ensure the mill is left in the best possible position for a future restart.
A focus will remain on exploration across the prioritised targets at Coolgardie where the business is pursuing opportunities to develop higher-grade, larger scale ore bodies that can be more resilient to sensitivity changes in the gold price.
Coolgardie Results |
Jun-12 |
Sep-12 |
Dec-12 |
Mar-13 |
Jun-13 |
Mining | |||||
Ore Mined (tonnes) |
301,257 |
266,155 |
144,669 |
112,296 |
191,132 |
Grade (g/t) |
2.99 |
2.47 |
2.67 |
1.97 |
2.05 |
Gold In Ore (oz) |
28,916 |
21,172 |
12,420 |
7,110 |
12,581 |
Processing | |||||
Ore Processed (tonnes) |
295,949 |
304,261 |
273,162 |
228,332 |
249,080 |
Head Grade (g/t) |
2.75 |
2.42 |
1.86 |
1.18 |
1.67 |
Contained Gold (oz) |
26,166 |
23,685 |
16,353 |
8,684 |
13,392 |
Recovery % |
95% |
98% |
94% |
93% |
89% |
Gold Produced (oz) |
24,766 |
23,177 |
15,423 |
8,036 |
11,993 |
Cost Summary ($/Oz Produced): | |||||
Mining (see Note 1) |
839 |
855 |
1,108 |
1,092 |
976 |
Processing |
250 |
331 |
411 |
942 |
666 |
Haulage |
40 |
74 |
67 |
123 |
100 |
Site Admin, Safety & Environment |
60 |
48 |
83 |
251 |
157 |
Cash Cost (excl. Royalties) |
1,189 |
1,308 |
1,670 |
2,408 |
1,899 |
Royalties |
82 |
43 |
53 |
54 |
62 |
EXPLORATION & RESOURCE DEVELOPMENT |
The June quarter saw a primary focus on a number of resource development projects at Coolgardie intended to firm up ore reserves for the medium-term mining schedule, and follow-up on some key regional exploration work near Lancefield in Laverton (Mt Crawford).
Coolgardie
Regional Exploration
Exploration at Coolgardie during the quarter continued to work through priority near-mill targets which included follow-up drilling programs at Jolly Briton and Patricia Jean in the northern area of the Coolgardie tenement package, and also at Melanie Anne in the Tindals area – a total of 42 RC holes for 4,222m. (See ASX announcements dated 28 March 2013 and 27 June 2012)
Highlights from the drilling included a number of high-grade intersections:
Australasian: 8m @ 3.78g/t from 62m in AUSC002;
Jolly Briton: 4m @ 5.87g/t from 101m in PJJBC028;
Melanie Anne: 11m @ 4.84g/t from 161m in MAC087;
5m @ 6.50g/t from 29m in MAC088;
8m @ 4.53g/t from 91m in MAC094; and
2m @ 35.93g/t from 29m in MAC105.
Full details of significant intersections are listed in Table 1 to Table 3.
Figure 1: Melanie Anne drill collars
Resource Development
Resource development drilling at Coolgardie during the quarter consisted of 69 RC holes and two diamond holes for 7,654m. Drill programs included additional definition drilling at Dreadnought, an infill drilling program at CNX (
Table 5) and extensional drilling programs at Brilliant (Table 4) and Cookes Pit (Table 6) deposits. An underground resource development program was also completed at The Mount, consisting of 11 diamond holes for 2,206m.
The two development programs at Dreadnought and CNX were broadly in line with expectations, with both programs designed to improve confidence in the existing resource. The Brilliant drilling (Figure 2) was intended to infill and extend the existing mineral resource beneath the southern half of the current pit, and there were a number of outstanding intersections, including:
- 8m @ 20.68g/t from 142m in BRC103;
- 7m @ 3.66g/t from 142m in BRC121;
- 11m @ 6.63g/t from 27m in BRC109; and
- 12m @ 3.30g/t from 76m in BRC129.
Results of this width and tenor provide great encouragement for the potential of Brilliant to host a future underground operation. Further drilling is being planned, initially to better define near-surface ounces for a potential pit cutback but also to test the orebody at depth.
The small drilling program at Cookes Pit proved inconclusive, and some follow-up drilling is likely in the coming quarter.
Figure 2: Brilliant RC drill collar locations.
Figure 3: Brilliant long section.
At The Mount underground mine the final 11 holes of an underground infill diamond drilling program were completed during the quarter, for a total of 2,206m. The results from this program are now being compiled into a revised resource model, which is due to be completed during the September 2013 quarter. No further drilling is planned at The Mount following the suspension of mining in June.
Laverton
Regional Exploration
15 RC holes were drilled at the Mt Crawford project during the quarter for a total of 1,440m. Seven of these were the last holes of a program started in March, which resulted in an intersection of 3m @ 36.97g/t from 105m in hole CFRC025. The latter eight holes were drilled in late June on M38/159, and no assay results have yet been received.
Full details of significant intersections from the earlier drilling at Mt Crawford are listed in Table 7.
Resource Development
During April the final 20 RC holes of the Burtville resource development program were drilled, for a total of 2,486m. Three diamond holes (244m) were also drilled to gain structural information within specific high-grade mineralisation zones. Upon completion of this drilling the rigs were demobilised and drill sites rehabilitated in preparation for the cessation of mining operations.
Figure 2: Priority exploration target areas at Laverton.
CORPORATE |
Focus remains in a strategically strong position with $114.2M in cash and equivalents at 30 June and the support of its major shareholder Shandong Gold, a major world gold producer.
Revenue
The Focus Group sold 24,903 ounces of gold at an average price of A$1,374/oz, to generate revenue of A$34.2M for the quarter.
Expenditure
The following major expenditure items were incurred this quarter:
Payment of third party Royalty at Laverton | $12.7 M |
Laverton closure costs operations | $1.6 M |
Exploration | $3.7 M |
Mine development | $4.3 M |
Net Operating Cashflows for the quarter were an outflow $52.5M (including the above items) being a reflection of the loss for the quarter plus a further significant reduction in creditors.
Focus Minerals (Laverton) ownership
During the quarter Focus completed the acquisition of the minority interest in Focus Minerals (Laverton) and is now the 100% owner. The company was then converted to a Pty Ltd company on 30 June in order to reduce administration costs.
Administration
As a further cost cutting measure the head office was moved to less expensive premises during the quarter resulting in a 40% reduction in rental costs per annum.
Cash
At 30 June 2013, the Focus Group held cash, deposits and bullion comprising:
Cash at Bank and Deposits | $114.2 million |
Bullion on Hand | $1.7 million |
Cash held on bond | $25.4m |
Total Cash and Equivalents | $141.3 million |
The Company has commenced the process to replace its environmental bonds with an annual fee in line with the proposed changes by DMP. It is expected that this process will be completed by December 2013 for both Coolgardie and Laverton and this will free up in excess of $15m cash from the above “Cash held on bond”.
ENDS
Competent Person’s Statement
The information in this announcement that relates to Exploration Results is based on information compiled by Andrew Paterson who is a member of the Australian Institute of Mining and Metallurgy. Mr Paterson is employed by Focus Minerals Limited and has sufficient experience that 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 Paterson consents to the inclusion in this announcement of the matters based on the information compiled by him in the form and context in which it appears.
Note for Drill Results Tables below:
All RC drill holes are sampled to 1m intervals. Assay method is by a 40 gram fire assay at Bureau Veritas or ALS in Kalgoorlie for Coolgardie drilling, and Bureau Veritas in Leonora for the Laverton drilling All mineralised intersections are quoted as down-hole lengths with uncut gold values, hence the true thicknesses of mineralised intervals may vary. All gold grades are reported with a nominal cut-off grade of 1g/t Au. NSR = “no significant result” (above 1g/t).
Table 1: Melanie Anne significant intersections, June quarter 2013.
Hole ID |
Northing |
Easting |
RL |
Depth |
Dip |
Azimuth |
From |
To |
Interval |
Grade |
|
(GDA94) |
(GDA94) |
(GDA94) |
(m) |
(°) |
(Grid) |
(m) |
(m) |
(m) |
(ppm Au) |
MAC076 |
6570134 |
327378 |
448 |
68 |
-50 |
0 |
15 |
17 |
2 |
5.45 |
23 |
27 |
4 |
1.50 |
|||||||
MAC077 |
6570133 |
327392 |
449 |
57 |
-60 |
0 |
17 |
21 |
4 |
1.00 |
MAC078 |
6570146 |
327393 |
448 |
53 |
-50 |
0 |
26 |
30 |
4 |
1.07 |
40 |
42 |
2 |
1.43 |
|||||||
MAC083 |
6570001 |
327206 |
445 |
131 |
-50 |
155 |
46 |
50 |
4 |
1.47 |
102 |
104 |
2 |
1.71 |
|||||||
MAC084 |
6570025 |
327190 |
444 |
167 |
-50 |
155 |
60 |
63 |
3 |
1.17 |
106 |
114 |
8 |
1.90 |
|||||||
MAC085 |
6570069 |
327220 |
442 |
217 |
-55 |
155 |
158 |
160 |
2 |
1.11 |
MAC086 |
6570096 |
327254 |
443 |
251 |
-58 |
155 |
234 |
235 |
1 |
7.41 |
MAC087 |
6570105 |
327282 |
444 |
227 |
-52 |
155 |
80 |
82 |
2 |
4.11 |
161 |
172 |
11 |
4.84 |
|||||||
MAC088 |
6569975 |
327028 |
457 |
56 |
-50 |
335 |
21 |
23 |
2 |
2.86 |
29 |
30 |
1 |
2.33 |
|||||||
33 |
34 |
1 |
30.00 |
|||||||
MAC090 |
6569939 |
327045 |
453 |
110 |
-50 |
335 |
25 |
29 |
4 |
2.51 |
MAC092 |
6569956 |
327082 |
453 |
113 |
-60 |
335 |
31 |
32 |
1 |
2.02 |
102 |
104 |
2 |
1.31 |
|||||||
MAC094 |
6569971 |
327109 |
452 |
107 |
-60 |
335 |
91 |
99 |
8 |
4.53 |
MAC095 |
6569989 |
327151 |
449 |
125 |
-60 |
335 |
15 |
17 |
2 |
1.07 |
109 |
114 |
5 |
4.70 |
|||||||
MAC096 |
6570070 |
327156 |
446 |
29 |
-50 |
335 |
12 |
14 |
2 |
1.40 |
MAC097 |
6570065 |
327159 |
445 |
35 |
-60 |
335 |
8 |
23 |
15 |
1.91 |
MAC098 |
6570014 |
327177 |
445 |
125 |
-60 |
335 |
49 |
57 |
8 |
3.78 |
84 |
90 |
6 |
3.11 |
|||||||
MAC099 |
6570085 |
327193 |
442 |
59 |
-60 |
335 |
30 |
38 |
8 |
1.86 |
MAC100 |
6570068 |
327201 |
442 |
83 |
-60 |
335 |
58 |
61 |
3 |
1.49 |
MAC102 |
6570113 |
327224 |
440 |
59 |
-60 |
335 |
44 |
48 |
4 |
1.77 |
MAC103 |
6570095 |
327232 |
441 |
77 |
-60 |
335 |
62 |
66 |
4 |
2.88 |
MAC104 |
6570076 |
327240 |
443 |
113 |
-60 |
335 |
19 |
21 |
2 |
4.59 |
103 |
105 |
2 |
2.55 |
|||||||
MAC105 |
6570148 |
327379 |
447 |
47 |
-50 |
0 |
29 |
31 |
2 |
35.93 |
MAC106 |
6570116 |
327378 |
449 |
59 |
-50 |
0 |
17 |
20 |
3 |
1.70 |
MAC107 |
6570153 |
327410 |
449 |
50 |
-50 |
0 |
25 |
28 |
3 |
1.39 |
Table 2: Jolly Briton significant intersections, June quarter 2013
Hole ID |
Northing |
Easting |
RL |
Depth |
Dip |
Azimuth |
From |
To |
Interval |
Grade |
|
(GDA94) |
(GDA94) |
(GDA94) |
(m) |
(°) |
(Grid) |
(m) |
(m) |
(m) |
(ppm Au) |
PJJBC024 |
6578274 |
324541 |
445 |
83 |
-55 |
295 |
28 |
31 |
3 |
1.26 |
69 |
70 |
1 |
27.29 |
|||||||
PJJBC025 |
6578266 |
324559 |
443 |
86 |
-55 |
295 |
69 |
74 |
5 |
1.61 |
PJJBC027 |
6578247 |
324550 |
444 |
106 |
-55 |
295 |
30 |
32 |
2 |
3.06 |
63 |
64 |
1 |
5.17 |
|||||||
PJJBC028 |
6578251 |
324642 |
445 |
151 |
-54 |
295 |
101 |
105 |
4 |
5.87 |
PJJBC033 |
6578254 |
324585 |
445 |
119 |
-55 |
295 |
45 |
57 |
12 |
1.62 |
75 |
79 |
4 |
1.36 |
Table 3: Australasian significant intersections, June quarter 2013.
Hole ID |
Northing |
Easting |
RL |
Depth |
Dip |
Azimuth |
From |
To |
Interval |
Grade |
|
(GDA94) |
(GDA94) |
(GDA94) |
(m) |
(°) |
(Grid) |
(m) |
(m) |
(m) |
(ppm Au) |
AUSC001 |
6570255 |
326640 |
444 |
112 |
-50 |
90 |
66 |
71 |
5 |
1.14 |
AUSC002 |
6570232 |
326633 |
445 |
100 |
-50 |
90 |
23 |
26 |
3 |
1.86 |
62 |
70 |
8 |
3.78 |
|||||||
67 |
70 |
3 |
8.48 |
Table 4: Brilliant resource development drilling significant intercepts, June Quarter 2013
Hole ID |
Northing |
Easting |
RL |
Depth |
Dip |
Azimuth |
From |
To |
Interval |
Grade |
|
(GDA94) |
(GDA94) |
(GDA94) |
(m) |
(°) |
(Grid) |
(m) |
(m) |
(m) |
(ppm Au) |
BRC101 |
6572560 |
326488 |
413 |
231 |
-53 |
249 |
18 |
27 |
9 |
1.22 |
155 |
158 |
3 |
6.14 |
|||||||
213 |
217 |
4 |
3.40 |
|||||||
BRC103 |
6572528 |
326499 |
414 |
231 |
-51 |
247 |
142 |
150 |
8 |
20.68 |
BRC107 |
6572479 |
326502 |
409 |
222 |
-57 |
255 |
32 |
42 |
10 |
2.38 |
BRC109 |
6572447 |
326508 |
410 |
195 |
-50 |
246 |
27 |
38 |
11 |
6.63 |
BRC110 |
6572432 |
326555 |
416 |
200 |
-58 |
252 |
97 |
103 |
6 |
1.91 |
179 |
186 |
7 |
2.73 |
|||||||
BRC113 |
6572300 |
326534 |
415 |
80 |
-72 |
250 |
30 |
33 |
3 |
6.78 |
BRC114 |
6572276 |
326531 |
416 |
146 |
-69 |
251 |
16 |
21 |
5 |
2.82 |
BRC116 |
6572271 |
326586 |
420 |
100 |
-52 |
243 |
84 |
86 |
2 |
11.02 |
BRC119 |
6572162 |
326555 |
420 |
131 |
-48 |
249 |
78 |
85 |
7 |
1.91 |
BRC121 |
6572118 |
326617 |
422 |
157 |
-53 |
251 |
142 |
149 |
7 |
3.66 |
BRC122 |
6572032 |
326578 |
421 |
147 |
-45 |
254 |
87 |
96 |
9 |
2.30 |
BRC123 |
6571983 |
326573 |
419 |
105 |
-50 |
270 |
76 |
88 |
12 |
3.30 |
BRC124 |
6571960 |
326587 |
421 |
192 |
-60 |
270 |
131 |
137 |
6 |
3.82 |
BRC125 |
6571904 |
326484 |
417 |
55 |
-59 |
270 |
31 |
38 |
7 |
1.55 |
42 |
47 |
5 |
3.28 |
|||||||
BRC126 |
6571843 |
326451 |
417 |
43 |
-60 |
270 |
39 |
41 |
2 |
5.76 |
BRC128 |
6571824 |
326473 |
416 |
75 |
-61 |
270 |
52 |
54 |
2 |
7.86 |
BRC129 |
6571742 |
326438 |
416 |
61 |
-60 |
270 |
19 |
20 |
1 |
23.90 |
Table 5: CNX significant intersections, June quarter 2013.
Hole ID |
Northing |
Easting |
RL |
Depth |
Dip |
Azimuth |
From |
To |
Interval |
Grade |
|
(GDA94) |
(GDA94) |
(GDA94) |
(m) |
(°) |
(Grid) |
(m) |
(m) |
(m) |
(ppm Au) |
CNXC019 |
6577721 |
327252 |
418 |
90 |
-60 |
50 |
45 |
48 |
3 |
2.14 |
56 |
60 |
4 |
2.12 |
|||||||
CNXC020 |
6577709 |
327229 |
416 |
114 |
-55 |
50 |
43 |
54 |
11 |
2.30 |
60 |
88 |
28 |
1.88 |
|||||||
93 |
96 |
3 |
2.84 |
|||||||
CNXC021 |
6577708 |
327275 |
420 |
72 |
-60 |
50 |
2 |
8 |
6 |
4.42 |
12 |
21 |
9 |
1.43 |
|||||||
38 |
41 |
3 |
1.75 |
|||||||
49 |
64 |
15 |
2.05 |
|||||||
CNXC022 |
6577695 |
327258 |
417 |
110 |
-60 |
50 |
63 |
66 |
3 |
1.72 |
71 |
74 |
3 |
1.42 |
|||||||
80 |
84 |
4 |
1.62 |
|||||||
CNXC023 |
6577704 |
327290 |
421 |
75 |
-60 |
50 |
6 |
11 |
5 |
1.07 |
28 |
30 |
2 |
2.34 |
|||||||
CNXC024 |
6577694 |
327279 |
420 |
110 |
-60 |
50 |
38 |
42 |
4 |
1.50 |
47 |
51 |
4 |
1.81 |
|||||||
71 |
72 |
1 |
8.67 |
|||||||
85 |
88 |
3 |
3.08 |
|||||||
CNXC025 |
6577679 |
327293 |
421 |
110 |
-59 |
50 |
35 |
42 |
7 |
1.77 |
56 |
58 |
2 |
1.05 |
|||||||
CNXC026 |
6577682 |
327331 |
425 |
60 |
-60 |
50 |
40 |
43 |
3 |
1.44 |
CNXC027 |
6577669 |
327314 |
423 |
90 |
-60 |
50 |
72 |
77 |
5 |
0.96 |
CNXC029 |
6577655 |
327348 |
426 |
60 |
-60 |
50 |
10 |
17 |
7 |
1.33 |
CNXC031 |
6577638 |
327372 |
427 |
78 |
-68 |
50 |
2 |
6 |
4 |
1.37 |
40 |
54 |
14 |
1.28 |
|||||||
60 |
62 |
2 |
3.15 |
|||||||
70 |
72 |
2 |
4.65 |
|||||||
CNXC032 |
6577601 |
327357 |
421 |
113 |
-62 |
50 |
65 |
76 |
11 |
3.61 |
82 |
93 |
11 |
1.83 |
Table 6: Cookes Pit significant intersections, June quarter 2013.
Hole ID |
Northing |
Easting |
RL |
Depth |
Dip |
Azimuth |
From |
To |
Interval |
Grade |
|
(GDA94) |
(GDA94) |
(GDA94) |
(m) |
(°) |
(Grid) |
(m) |
(m) |
(m) |
(ppm Au) |
CKC001 |
6571227 |
326791 |
419 |
-58 |
270 |
130 |
51 |
54 |
3 |
5.5 |
CKC002 |
6571239 |
326779 |
419 |
-50 |
270 |
119 |
105 |
106 |
1 |
11.9 |
CKC004 |
6571279 |
326760 |
419 |
-60 |
270 |
120 |
40 |
42 |
2 |
3.3 |
47 |
57 |
10 |
2.1 |
|||||||
CKC006 |
6571339 |
326791 |
422 |
-60 |
270 |
90 |
68 |
71 |
3 |
2.7 |
CKC008 |
6571380 |
326774 |
423 |
-55 |
270 |
138 |
73 |
75 |
2 |
1.6 |
93 |
95 |
2 |
3.4 |
|||||||
CKC009 |
6571407 |
326757 |
424 |
-62 |
270 |
149 |
99 |
103 |
4 |
1.8 |
TTC001 |
6571434 |
326637 |
423 |
-60 |
270 |
89 |
64 |
70 |
6 |
1.3 |
TTC002 |
6571459 |
326651 |
424 |
-60 |
270 |
107 |
63 |
65 |
2 |
2.2 |
68 |
71 |
3 |
1.2 |
Table 7: Mt Crawford significant intersections, June quarter 2013.
Hole ID |
Y |
X |
Z |
Hole Depth (m) |
From (m) |
To (m) |
Down hole Interval (m) |
Grade g/t Au |
CFRC001 |
6839000 |
441879 |
472 |
120 |
41 |
42 |
1 |
1.54 |
CFRC002 |
6839000 |
441959 |
474 |
120 |
6 85 |
7 87 |
1 2 |
2.52 3.98 |
CFRC006 |
6838799 |
442179 |
469 |
100 |
30 |
31 |
1 |
2.56 |
CFRC009 |
6838402 |
442019 |
464 |
96 |
25 39 |
27 41 |
2 2 |
1.06 0.98 |
CFRC011 |
6838402 |
442180 |
468 |
138 |
14 21 |
17 22 |
3 1 |
1.17 1.11 |
CFRC013 |
6838400 |
442340 |
471 |
78 |
33 |
35 |
2 |
1.53 |
CFRC015 |
6838200 |
441479 |
460 |
78 |
27 45 |
28 49 |
1 4 |
1.07 1.23 |
CFRC017 |
6838200 |
442400 |
468 |
128 |
9 17 |
10 18 |
1 1 |
2.12 3.7 |
CFRC020 |
6838000 |
442079 |
462 |
78 |
39 |
43 |
4 |
1.07 |
CFRC024 |
6838000 |
442480 |
465 |
48 |
6 13 27 |
9 15 28 |
3 2 1 |
1.19 2.02 1.71 |
CFRC025 |
6838000 |
442558 |
464 |
150 |
105 |
108 |
3 |
36.97 |
CFRC028 |
6837800 |
442119 |
466 |
126 |
52 89 |
54 90 |
2 1 |
1.09 0.99 |
CFRC031 |
6837603 |
442119 |
469 |
84 |
70 |
71 |
1 |
1.05 |
CFRC033 |
6837600 |
442279 |
470 |
108 |
3 17 27 |
10 18 28 |
7 1 1 |
2.05 1.51 1.95 |
CFRC034 |
6838000 |
442474 |
465 |
114 |
13 36 |
17 37 |
2 1 |
1.20 4.25 |
Suspension of Coolgardie Mining Operations
FOCUS TO CEASE PRODUCTION AT COOLGARDIE OPERATION
– PRIORITY ON PRESERVING STRONG CASH POSITION TO CAPITALISE ON OPPORTUNITIES IN CURRENT ENVIRONMENT –
Key points:
|
Focus Minerals Ltd. (ASX: FML) said today that it will suspend its Coolgardie operations at the end of July due to further recent declines in the gold price. The decision follows a strategic review of the Coolgardie operations that started in February.
“Despite some significant improvements in mining and processing performance in recent months that the new management team at Coolgardie achieved, the Coolgardie operations in their current guise are unviable in the current economic environment,” said Chairman and Acting Chief Executive Officer Don Taig.
“Given the recent gold price instability we are simply in a position where there is currently insufficient high-grade ore available at Coolgardie to ensure profitability at these gold prices.
“We cannot jeopardise or risk our strong cash position by continuing to operate mines that cannot be profitable on a sustaining basis.”
Preserving Cash to Capitalise on Opportunities in Current Environment
Mr Taig said whilst it was disappointing to be suspending the Coolgardie operations, Focus remained in a strategically strong position with one of the largest bank balances of any gold miner on the ASX and the support of a major international gold producer in Shandong Gold.
“Our goal is to ensure that we use our capital wisely, leveraging our strong financial position in a market that is already presenting growth opportunities,” said Mr Taig.
“We aim to create long-term wealth for shareholders by identifying larger scale, higher grade ore bodies where Focus has full control over mining and processing and the ability to deliver significant mine life and sustainable reinvestment in tenement holdings.
“This is something we can achieve by ensuring we preserve the cash in our business to enable us to explore our current assets or pursue any synergistic acquisition opportunities that could add value to our existing land holdings,” Mr Taig said.
The suspension of mining activities will impact 65 roles in the business with the majority of the roles impacted at Coolgardie. “I would like to recognise the significant work undertaken by the management and personnel on site both past and present,” said Mr Taig. “As stated in our last quarterly, we changed the management at the mine and they have made a difference but unfortunately the external factors have required us to make this change. The improvements already identified will be recorded to be leveraged from in the future. We will be offering our fullest support to all our employees impacted by this transition.”
Focus Minerals Limited – Focus owns two large gold projects in Western Australia’s Eastern Goldfields. The company is the largest landholder in the Coolgardie Gold Belt, 35km west of the ‘Super Pit’ in Kalgoorlie, where it has produced from a mix of open pit and underground operations, processing through its own 1.2Mtpa processing plant, Three Mile Hill. 250km to the northeast Focus has 100% controlling interest in the Laverton Gold Project which comprises a significant portfolio of large scale open pit mines, adjacent to Barrick’s Granny Smith operation where it has historically processed ore. Focus also owns the 1.5Mtpa Barnicoat mill in Laverton which has been on care and maintenance since 2009.
For further information please contact:
Don Taig
Executive Chairman & Acting CEO Focus Minerals Ltd Phone: +61 8 9215 7888 |
Neil Le Febvre
Investor Relations Manager Focus Minerals Ltd Phone: +61 8 9215 7888 |
Michael Mullane
Media – Cannings Communications Phone: +61 2 8284 9990 |
Business Update
FOCUS STARTS TRANSITION TO LOW COST, HIGH VALUE GOLD PRODUCER; CEASES OPERATIONS IN LAVERTON DUE TO RISING COSTS AND REDUCING MARGINS
Key points:
|
Focus Minerals Ltd. (ASX: FML) said today that, as part of its strategic review of operations initiated two months ago, it will cease mining at its Laverton Gold operations for the immediate future due to the increasing costs it is incurring and the significant effect on revenue from the dramatic fall in the gold price.
These costs have also made the existing campaign processing arrangement commercially unviable.
Focus’ Chairman and Acting CEO, Don Taig, said the Board is currently evaluating options around moving the operations to an exploration only focus to rebuild reserves and drill a number of its highly prospective green fields targets, as well as exploring a number of other synergistic opportunities that are available to it in the region given the Company’s very strong cash balance and cornerstone shareholder.
“The long-term outlook for the gold price, campaign nature of processing, and the escalating processing costs we have been faced with over the past six months at the Granny Smith mill made this a necessary decision for us in protecting the value of the Laverton assets for all shareholders,” said Mr Taig.
“We have a significant, highly prospective landholding in the Laverton region surrounding four major mines with over 20Moz between them. We are not about to deplete our current reserves base just to break even.
“The high cost base in the Australian mining industry and rising mining inflation of the past few years has seen all of the reductions and operational improvements we have been delivering continue to be consumed. These are pressures that are being felt right across the industry and impacting the competitiveness of Australian mining. A sharp fall in commodity prices always provides a clear lens for the industry on just how bad this has become. The high Australian dollar is not assisting business either and it is my view that unless all industry participants – capital, labour and government work quickly and earnestly together – the industry is in for a lean time.”
A New Direction to Boost Shareholder Wealth
Mr Taig said despite the Group’s disappointment in having to cease operations in Laverton he believes the business is in a strategically strong position.
“We have one of the largest bank balances of any gold miner on the ASX and the backing of a major world gold producer in Shandong Gold,” said Mr Taig.
“To that end we have invested in removing a number of encumbrances during the quarter to ensure we are able to offer first ranking priority on any future financing.
“Our collective goal is to ensure we deliver on the most efficient use of capital and that we can leverage our strong financial position in a market which is already presenting growth opportunities for Focus to evaluate. Burning cash in a negative margin environment is not sensible and the Company must look at all options available to exploit the Group’s strong cash position to create long-term wealth for its shareholders.
“Our strategic review is ongoing and the remit of this is such that we are exploring opportunities for continued organic growth through exploration on our assets, and opportunities for acquisitions that could underpin and improve the existing operations and enable Focus to move to a lower cost base with improved scale and productivity.
“A framework for this review is our drive to focusing on opportunities for larger scale, higher grade ore bodies where we have full control over mining, and processing and the ability to deliver significant mine life and sustainable reinvestment in our tenement holdings in good gold bearing addresses.”
Group Operational Restructure & Dealing with Rising Costs
Mr Taig said that on his stepping into the role of Acting CEO at the beginning of February, the team commenced a review of the business both at an operational and strategic level with a goal of optimising current operations, and ensuring the business could use its strong cash position to transition Focus into being the lowest cost, highest value producer it can be.
“Earlier in the March Quarter, in addition to the decisions we have now reached at Laverton, we implemented a group-wide restructuring to right size the workforce, change the role and remit of some departmental areas, and change the leadership at our Coolgardie operation. The Laverton decision has added further to this restructuring.
“We have also prioritised our energies into increased resource definition to help improve our mid-term planning and to identify future mineable reserves to enable us to make the right decisions on future plant expansion and commissioning. This has always been a clearly stated opportunity through the investment from Shandong Gold.”
Coolgardie Operational Focus
Mr Taig said the March quarter in Coolgardie had been an aberration in terms of production and costs and compounded by the effects of the gold price fall. “This has been a very disappointing Quarter for Coolgardie and we have taken strong actions to rectify production,” said Mr Taig.
“Our strategic review is continuing in order to determine our best path forward in driving value from this asset for shareholders. The opportunity we have at Coolgardie is to determine the best economic outcomes for our operations in this current environment and that may mean changes in how we use the processing plant and where we focus our resources.
“In the immediate term we now have a new Resident Manager, Mining Manager and Chief Mine Geologist. We have performed a detailed review of operations through an independent consultancy group and that has helped us highlight significant areas for improvements and we are gathering resources to commence an eight week programme to improve the operational planning and workflow with the goal of increasing recovery and output, whilst also improving cost efficiencies.
“We believe we will be able to get Coolgardie back on track providing the existing operations deliver the further productivity improvements required. We have already invested in mine development, pre-strip and tailings dam expansion projects in order to exploit our planned mining activities and we therefore believe it could sub-optimise the outcome for the business if we did not give these changes a chance to deliver their results.
“As part of this process we are looking to achieve a 20% improvement in productivity in the medium term, translating to fundamental savings at an operating cost level. The Strategic review therefore at Coolgardie is less black and white compared to Laverton and will be best reviewed in phases to ensure we maximise the outcome with a mind’s eye to our ongoing cash position as a priority focus for the business overall,” Mr Taig said.
Focus Closes Successful Laverton Takeover
Download full announcement here
FOCUS CLOSES THE SUCCESSFUL TAKEOVER OF FOCUS LAVERTON
Focus Minerals Ltd (“Focus”) [ASX: FML] is pleased to announce that at 7.00pm (Melbourne time) on Monday, 22 April 2013, the unconditional recommended off-market takeover offer by Focus announced on 15 March 2013 for all of the remaining Focus Minerals (Laverton) Limited (“Focus Laverton”) shares it did not currently own (“Offer”) closed.
Focus has received acceptances for the Offer which give Focus a total relevant interest in Focus Laverton of 99.185%.
Issue of Focus shares under the Offer
Focus intends to commence issuing the new Focus shares to Focus Laverton holders who have validly accepted the Offer (and who are not Ineligible Foreign Shareholders as defined in Focus’ bidder’s statement dated 19 March 2013) from Friday, 26 April 2013.
Issue of Focus shares following compulsory acquisition
Focus announced on 2 April 2013 that it would commence the compulsory acquisition process under the Corporations Act to acquire all outstanding shares it has not acquired under the Offer. Focus Laverton shareholders whose shares are compulsorily acquired will receive their consideration at the end of the compulsory acquisition period, which is likely to be approximately four weeks from today.
Focus Reaches 98.9% Interest in Laverton
Focus Reaches 98 per cent interest in Laverton
FOCUS REACHES 98.90% INTEREST IN FOCUS LAVERTON AND WILL PROCEED WITH COMPULSORY ACQUISITION
Focus Minerals Ltd (“Focus”) [ASX: FML] and Focus Minerals (Laverton) Limited (“Focus Laverton”) on 15 March 2013 announced an unconditional recommended off-market takeover offer by Focus for all of the remaining Focus Laverton shares it does not currently own (“Offer”).
Focus is pleased to announce that it now has received acceptances for its unconditional recommended off-market takeover of Focus Laverton which give Focus a total relevant interest in Focus Laverton of 98.90%.
Compulsory Acquisition
Focus will now commence the compulsory acquisition process under the Corporations Act to acquire all outstanding shares it has not acquired under the Offer, in order to move to 100% ownership of Focus Laverton.
Issue of Focus shares under the Offer
Focus Laverton shareholders are free to accept the Offer until its closing date (7.00pm (Melbourne time) on 22 April 2013), and, in doing so, may benefit from receiving their consideration earlier than if those shares are compulsorily acquired. Focus intends to commence issuing the new Focus shares to Focus Laverton holders who have validly accepted the Offer (and who are not Ineligible Foreign Shareholders as defined in Focus’ bidder’s statement dated 19 March 2013) from Friday, 26 April 2013.
Issue of Focus shares following compulsory acquisition
Focus Laverton shareholders whose shares are compulsorily acquired will receive their consideration at the end of the compulsory acquisition period, which is likely to be approximately four weeks after the Offer Close Date.
Other
The consideration being offered to Focus Laverton shareholders is 1 Focus share for every 0.725 Focus Laverton shares. At the closing price of Focus shares on 14 March 2013 of 2.0 cents per share, the Offer represents an implied offer price of 2.8 cents per Focus Laverton share.[1]
The independent expert appointed by Focus Laverton, BDO Corporate Finance, has opined that the transaction is fair and reasonable to Focus Laverton shareholders.
The Independent Director of Focus Laverton, Mr Geoff Stanley, recommends that all Focus Laverton shareholders accept the Offer, in the absence of a superior proposal.
The transaction will consolidate the Laverton assets into Focus, creating an Australian gold producer with targeted annual gold production of 200,000oz per annum from 2014, a combined Mineral Resource base of 4.3Moz of gold, and outstanding growth potential across two major Western Australian mining regions.
[1] The value of the Offer may change as a consequence of changes in the market price of Focus shares.