Queensland exploration leading the way

QUEENSLAND is set to become the leading Australian state for resource exploration investment, says Natural Resources and Mines Minister Andrew Cripps.

Speaking at the Queensland Exploration Council breakfast this morning, Cripps said that the Newman government was working alongside the resources sector to come good on its promise to grow resources as a pillar of its economy.

“We are committed, through our ResourcesQ partnership with industry, to develop a 30-year vision and action plan to grow a robust resources sector that will continue to deliver significant economic benefits for Queensland communities”, he said.

A report released by the Ministerial Advisory Committee on Exploration, a panel set up by Cripps in October, reported in order to enhance the state’s exploration, the Newman government needed to follow through with its election promises.

Cripps has vowed to reform the resources sector by cutting red tape in orderto attract big investment to the state.

Cripps said the report provided 18 recommendations across nine areas.

“The committee has advised the government to make more land available for exploration, deliver more high-level, world class geoscience and grow and expand incentives to support greenfield exploration,” he said.

“There were also strong messages to cut exploration costs by streamlining exploration permit regulations and examining further opportunities to minimise costs to industry and I’m pleased to say the government has already acted on some of the committee’s advice”.

The Association of Mining and Exploration Companies CEO Simon Bennison welcomed the news.

“Queensland now has an opportunity to promote itself as a destination for exploration investment. By showing support for the exploration sector, the Queensland Government is investing in a strong and prosperous future for the state’s mining sector,” he said.

“This will provide jobs and investment, and Government revenue streams for the benefit of all Queenslanders.”

The report was also welcomed by the Queensland Resources Council.

“With the minister now is a comprehensive reform agenda to reinvigorate investment confidence in Queensland exploration and we are looking forward to working closely with him and his department on its implementation,” QRC CEO Michael Roche said.

“In Andrew Cripps, the government has a Mines Minister who clearly ‘gets it’ with respect to the essential role that exploration plays in underwriting the economic future for Queensland.”

Sadie Davidson
Tuesday, 17 June 2014 – MiningNews

Posted in ActivEX news, Australian Exploration | Leave a comment

Cash crunch leads to exploration drought

A HIGHER number of junior explorers reduced or ceased exploration in the March quarter due to insufficient funding, according to BDO.

But BDO partner and natural resources specialist Bruce Gordon said the BDO Explorer Quarterly Cash Update showed some bright spots.

“This quarter’s update points to a continuation of the tough conditions we’ve seen over the last year or two for junior explorers,” he said.

“The median spend on exploration activity fell 27% from the December 2013 to March 2014 quarters, which is the largest periodic decrease since we started looking at these trends.

“Also concerning is that since the June 2013 quarter, the percentage of companies ceasing exploration expenditure has consistently risen from about 7% to 10%.”

Gordon said companies were using the tough times to get themselves into a better financial position by raising capital or reducing costs.

Still, only 58% of companies had enough cash to cover more than two quarters of net operating expenditure, though that was up from 54%.

And 94% of the companies that had two quarters or less of cash in the December quarter still only had two quarters or less of available cash in the March quarter.

“In addition, more than three quarters (76%) of explorers now have cash reserves sufficient to maintain administrative expenditure for more than two quarters, indicating greater financial capacity to operate for an extended period,” BDO corporate finance partner Dan Taylor said.

The number of companies with cash to cover only one quarter fell from 27% to 26%, or 220 explorers.

About 40% of junior explorers raised cash in the March quarter, including 123 that managed to raise more than $A1 million.

Gordon said BDO was keeping a close eye on those companies to see if the funds were being used for exploration or “lifestyle purposes”.

Leading the raisings was Tigers Realm Coal, which raised $56 million for its Russian projects.

The report looked at 856 mining, oil and gas explorers.

Source

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ASF Group invests in coking coal assets in Queensland

China-Australian investment house ASF Group (ASX:AFA) has added to its asset base by acquiring control of a coking coal portfolio of 27 Exploration Permits in Queensland.

The portfolio to be acquired includes prospective future hard coking, PCI and thermal coal projects ranging from potentially immediate to longer-term development timeframes.

ASF will acquire a 68.205% equity interest in private company Civil & Mining Resources Pty Ltd for $1,079,270.50 in a cash consideration.

Presently, the deal is at the Heads of Agreement stage, and will be funded by ASF out of internal resources, a final agreement is expected to close around November 15, 2013.

Note facility

ASF will also grant a convertible loan facility to CMR of up to $5 million over two years, which will be converted into shares of CMR at ASF’s option.

If ASF does not elect to convert upon maturity, the convertible loan will be repayable, together with interest of 10% per annum. An initial advance of $150,000 has been made to CMR in accordance with the terms of the HOA.

CMR background

CMR Coal has a significant coal tenement portfolio, with a massive ~14,182km2 base, located throughout all the major coal-bearing basins in Queensland and are situated in close proximity to operating mines, infrastructure and proven economic coal resources.

Further details were not disclosed.

ASF Buy-Back program

Meanwhile, ASF is continuing to soak up shares with a buy-back program.

In February this year, ASF extended its on-market share buyback program, which in the past 12 months, bought back 10.1 million ASF shares at an average price of $0.1793 per share.

ASF expanded the Buy-Back to 30.4 million ASF shares to be acquired over the next 12 months as part of the buyback.

Analysis

This is a significant portfolio, which adds to an already deep trove of assets in Australia.

That CMR’s portfolio of exploration permits is located throughout all the major coal-bearing basins in Queensland and are situated in close proximity to operating mines, infrastructure and proven economic coal resources is of interest.

ASF’s recent acquisition of a 19.89% stake in Rey Resources (ASX: REY), which holds a large tenement holding in the Canning Basin, Western Australia is an example of the type of investment from Rey that is already bearing fruit.

As Rey’s share price has been on the rise, up 121% since August, as it focuses on developing its oil, gas and coal interests in the Canning Basin.

Interestingly, Rey holds a 25% stake in the Fitzroy oil and gas Blocks which are located in the Canning Superbasin.Buru Energy (ASX:BRU) has a 37.5% holding.

The on-going buy-back of shares by ASF has tightened the capital structure, which we view positively. ASF had also $3.8 million in cash as at September 30 quarter end.

Source

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Metaliko one step closer to Bronzewing

Kristie Batten – Tuesday, 17 June 2014

METALIKO Resources should be able to complete the $A4 million purchase of the Bronzewing gold operation in Western Australia after director Dr Michael Ruane and ActivEX agreed to underwrite a $5.55 million rights issue.

Subject to obtaining shareholder approval on Thursday, the company will complete the acquisition – which comprises $3 million in cash and 33.3 million shares – as soon as possible.

The cash component will be paid using an unsecured and interest free loan from Ruane.

The company will then issue a prospectus for a 2:1 rights issue at 3c to raise $5.55 million to repay the loan and for working capital.

Ruane’s company Tyson Resources will underwrite the offer to the minimum subscription level of $4.37 million.

Brisbane-based ActivEX has agreed to sub-underwrite up to 83.75 million shares for $2.5 million if available.

ActivEX said it was finalising a funding facility to assist in completing the sub-underwriting.

An earlier $4.82 million deal to acquire Bronzewing collapsed when Metaliko was unable to secure funding.

Metaliko is planning to drill the project immediately to expand the nearly 1 million ounces in gold resources.

Bronzewing was operated until April last year, when previous owner Navigator Resources collapsed.

Included in the deal are the project tenements and gold resources, along with a 2 million tonne per annum mill and carbon-in-pulp facility, and associated infrastructure.

As part of the deal, Metaliko will arrange release of $7.08 million in bank deposits lodged by Navigator to cover environmental bonds.

Metaliko said future environmental obligations would be covered by paying an annual rehabilitation levy as required under WA’s recently legislated Mining Rehabilitation Fund.

Shares in Metaliko gained 12.5% to 1.8c yesterday, while ActivEX shares have been untraded at 2c for more than a month.

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