Highlands Natural Resources Regulatory News (HNR)

31 Jan 2005 09:30

Hardman Resources Limited31 January 2005 STOCK EXCHANGE / MEDIA RELEASE RELEASE DATE: 31 January 2005 CONTACT: Simon Potter TELEPHONE: Within Australia: 08 9261 7600International: +61 8 9261 7600 RE: DECEMBER 2004 QUARTERLY REPORT Please find attached December 2004 Quarterly Activities and Cash Flow Report forHardman Resources Ltd. SIMON POTTERMANAGING DIRECTOR HARDMAN RESOURCES LTD ABN 98 009 210 235 REPORT TO SHAREHOLDERS FOR THE QUARTER ENDED 31 DECEMBER 2004 This report summarises the activities of Hardman Resources Ltd and itscontrolled entities ("Hardman" or "the Company") during the quarter ended 31December 2004. ACTIVITY HIGHLIGHTS • Chinguetti Field Development: The development project continues to be on track for first oil production in the first quarter of 2006. During the quarter the development drilling programme commenced, involving both drilling rigs and the FPSO, "Berge Helene", arrived in Singapore for the start of conversion works. Fabrication and supply of other equipment such as the FPSO process modules; the subsea flow lines, risers and umbilicals other subsea hardware is progressing. The joint venture partners agreed to include a sixth water injector in the development plan to ensure effective recovery increasing the expected capital investment to $625 million, including contingency amounts for capital cost overruns. • Chinguetti Project Financing: Negotiations on the commercial terms and conditions of a loan facility continued throughout the quarter. Hardman announced on January 27, 2005, that it had entered into an agreement with the Australia and New Zealand Banking Group Limited ("ANZ") which establishes a US$100 million project loan facility. The funds will be applied to cover most (approximately 80%) of Hardman's share of the development costs of the Chinguetti oilfield. The facility is fully underwritten by ANZ. • Chinguetti - Government Participation: The Government of the Islamic Republic of Mauritania exercised its right to participate in the Chinguetti Oil Field development, effective from 9 November 2004. The government participation will comprise a 12% equity position to be provided pro rata by the Joint Venture participants, such that Hardman's interest in the development will decrease from 21.6% to 19.008%. Hardman's interest in the balance of PSC Area B and in particular Tiof will remain at 21.6%. • Exploration Drilling Programme: Four wells were drilled during the quarter, resulting in a new oil discovery at Tevet-1, in PSC B. The Dorade-1 (PSC2) and Capitaine-1 and Merou-1 (PSC B) wells were unsuccessful. • Tiof Appraisal Programme: Four wells were drilled on the Tiof discovery during the quarter. The 2004/2005 Tiof appraisal programme is designed to evaluate the field by drilling representative wells in various parts of the field and different reservoir types. - Tiof-3 encountered a gross oil column of 134 metres containingseveral individual sands of variable thickness. The well was then sidetracked(as planned) and successfully cored the reservoir intervals but because ofmechanical problems the well could not be flow tested to its potential and wassuspended for potential future use as the rig was required for the Chinguettidevelopment programme. - Tiof-4 encountered oil over a gross interval of 113 metres inseveral individual sands of variable thickness while Tiof-5 encountered an oilcolumn of at least 23 metres. These wells were not planned for flow testing. - Tiof-6, commencing in late December 2004, encountered oil overa gross interval of at least 123 metres. It is interpreted that no gas or waterhas been intersected by the well and the interval comprises several good qualitysands of varying thickness. The well was temporarily suspended (as planned) sothat the rig could return to Chinguetti development drilling but will be testedin the near future. • Mauritania (Tevet Oil Discovery): The Tevet-1 exploration well tested a structural/stratigraphic trap in sands of the same Miocene channel fairway that comprise the reservoir at Chinguetti and Banda. Tevet-1 has intersected a gross hydrocarbon column of 114 metres, comprising a 70 metre gas leg and a 44 metre oil leg. An oil water contact is inferred to have been intersected on the basis of pressure data. The pre-drill prediction of contacts and fluid types has been confirmed by the well. • Mauritania (3D Seismic): A 3,050 square kilometre 3D seismic survey in PSC Area A was completed on 14 November 2004. The survey vessel then moved to PSC 6 in the north where it commenced recording a 3,100 square kilometre survey, which was still in progress at the time of writing. In Block 8 a survey comprising 1,816 square kilometres of 3D seismic was also completed during the quarter. • Australia, Timor Sea: - AC/P25: The Rufus 2D seismic survey comprising 425 kilometreswas processed and is being interpreted. - AC/P26: Preparations are continuing to drill the Marloo-1exploration well using the Ocean Bounty semi-submersible rig with operationsexpected to commence in March 2005. • Eritrea: News was received that the Eritrean Cabinet had decided not to proceed with award of the Massawa Block in the Red Sea. The partners are seeking clarification of this situation. • Falklands: The joint venture comprising Hardman (22.5%) and the newly listed UK company, Falklands Oil & Gas plc began shooting a 2D seismic survey comprising approximately 4,000 line kilometres over the defined leads and prospects during the quarter. The acquisition is expected to be completed in the first quarter 2005. • Guyane (French Guiana): Discussions with potential farmin partners to fund the drilling of the first exploration well in the permit continued. • New Zealand: Hardman has notified the operator and the government of its intention to withdraw from the project. • Uganda: During the quarter Hardman commenced activities leading toward the acquisition of a 2D seismic survey of the onshore area and the extension of some of those lines into the adjacent Lake Albert. Acquisition of the survey is expected to commence in early February 2005 with an objective of delineating a drilling location for potential drilling in late 2005. CORPORATE ACTIVITY Mr Ted Ellyard stepped down as Managing Director for personal and medicalreasons on 29 October 2004 and resigned from the Board on 16 December 2004. TheCompany announced the appointment of Mr Simon Potter as Chief Executive Officerand Managing Director on 19 January 2005. Supplemental information required inaccordance with schedule 2 (f) to the AIM rules of the London Stock Exchange isas follows: within the past five years Mr Potter was a director ofSartovneftgas, Orenburgneftgas, Orenburggeologia, Saratovskiy and Onako, each ofwhich are subsidiaries of the TNK-BP joint venture between BP and the AlfaGroup. Mr Potter was also a director of Virginia Indonesia Company and PT Badak. FINANCE REPORT Cash during the quarter decreased by $44.3 million to $243.8 million. The totalcash spent on exploration, evaluation and development activities for the periodwas $38.3 million which was well down on the forecasted $91.3 million. The $38.3 million was due predominantly to the development costs in Chinguetti,Mauritania and exploration and evaluation costs in Area B, Mauritania. Anadditional significant outlay was made for tax of $11.7 million. The reduction in forecasted spend was due to the rescheduling of two explorationwells in Area B, Mauritania; one exploration well in Block1, Mauritania; oneexploration well in Area A, Mauritania and yet to be billed project costs forChinguetti development in Mauritania. Inflows of cash during the quarter consisted of $5.4 million received from ARCEnergy NL for the sale of Hardman's remaining 12% interest in EP 413. A further$5.5 million was received from the conversion of employee share options whichexpired on the 31 December 2004. Interest totaling $2.9 million from short terminvestments with various financial institutions was received during the period. REVIEW OF OPERATIONS MAURITANIA - WEST AFRICA Overview: Hardman has interests in Production Sharing Contracts ("PSCs") ineight offshore blocks in Mauritania, with the first PSC being signed in 1996.These blocks cover over 60,000 square kilometres, extend along 540 kilometres ofcoastline and include the majority of the prospective offshore basin area. In the 2001 to 2003 drilling programmes eleven wells were drilled includingseven exploration wells. These exploration wells included four discoveries beingChinguetti in 2001, Banda in 2002, Tiof and Pelican in 2003. Three explorationwells targeting older Cretaceous aged sandstones did not result in commercialdiscoveries of hydrocarbons. Overall, the success rate for initial explorationdrilling exceeded 50% which was high by industry standards. The 2004/2005 drilling programme has included four exploration wells resultingin one discovery. The overall exploration success rate of 45% (five successesfrom eleven wells) is still very good by industry standards. The drilling programme currently underway includes the Chinguetti developmentprogramme and appraisal on the Tiof Field. It is expected that furtherexploration and appraisal drilling will be undertaken as the current drillingprogramme continues throughout 2005. Chinguetti Oil Field: The Chinguetti Oil Field lies in the deep water part ofBlock 4 in PSC Area B. Chinguetti is a typical salt dome structure with avertical relief at the oil reservoir level of over 300 metres. The primary oilzone at Chinguetti is contained within Miocene-aged deep water turbiditesandstones which were deposited prior to the salt uplift. The proven andprobable (2P) recoverable reserve has been independently estimated at 123million barrels. The initial Chinguetti field development will include six production wells andsix water injection wells for reservoir pressure support, with flowlines to aleased floating production, storage and offtake vessel ("FPSO") moored over thefield in about 800 metres of water. Surplus gas not required for fuel will bereturned to a nearby reservoir via a gas injection well. During the quarter the joint venture agreed to include a sixth water injector inthe development plan to ensure effective recovery. The inclusion of this wellhas increased the expected capital investment to $625 million, includingcontingency amounts for capital cost overruns. The Chinguetti Project continues to be on track for first oil production in thefirst quarter of 2006. The development drilling programme has now commenced,involving both drilling rigs - the "Stena Tay" and "West Navigator". The FPSO,"Berge Helene", arrived in Singapore during the quarter for the start ofconversion works while fabrication of the topsides modules and the mooringturret progressed. Engineering continued and fabrication commenced on the subseaflow lines, risers and umbilicals which connect the subsea production andinjection wells to the FPSO. The supply of the subsea hardware is well advanced. The Government of the Islamic Republic of Mauritania exercised its right toparticipate in the Chinguetti Oil Field development, effective from 9 November2004. The government participation will comprise a 12% equity position to beprovided pro rata by the Joint Venture participants, such that Hardman'sinterest in the development will decrease from 21.6% to 19.008%. Hardman'sinterest in the balance of PSC Area B and in particular Tiof will remain at21.6%. The election by the Government to participate is governed and the termsof the participation are covered by the terms of the PSC and include payment ofcosts from the effective date of participation and reimbursement of past costsassociated with the area of the Chinguetti Exclusion Exploitation Authorisation.The government has a similar right to participate in future developments. Chinguetti Development Financing: Negotiations on the commercial terms andconditions of a loan facility were continued during the quarter and the loanagreements were in near final form. Subject to completing final loandocumentation and obtaining the required joint venture and governmentagreements, the ANZ Banking Group was to underwrite and syndicate the loan. On27 January 2005 the Company announced that it has secured a loan facility withANZ of US$100 million. Tiof Oil Discovery: The Tiof-1 oil discovery was made in November 2003 and thesignificance of the discovery was confirmed by the Tiof West step out/appraisalwell in December 2003. The Tiof Prospect is an independent structural closurewithin a Miocene channel sandstone system and is located approximately 25kilometres north of the Chinguetti Oil Field. The 2004/2005 Tiof appraisal programme was designed to evaluate the field bydrilling representative wells in various parts of the field and differentreservoir types, as predicted from 3D seismic. The appraisal programme includedplans for coring of representative reservoir intervals, as well as flow testingof a well to be completed and tested in a similar manner to the successfulChinguetti 4-5 Early Development Well drilled in 2003. The first well to evaluate the target interval, Tiof-3 encountered a gross oilcolumn of 134 metres containing several individual sands of variable thickness.The well was then sidetracked (as planned) so that the reservoir intervals couldbe cored, which was successful. Operations then commenced to complete the wellfor flow testing, however mechanical problems meant that while some samples andpressure measurements were obtained the well could not flow to its potential.The well was suspended for potential future use as the West Navigator wasrequired to commence work on the Chinguetti development programme. The Stena Tay drilled the Tiof-4 and -5 wells during the quarter prior tocommencing work on Chinguetti. Tiof-4 encountered oil over a gross interval of113 metres in several individual sands of variable thickness while Tiof-5encountered an oil column of at least 23 metres. The West Navigator drilled the Tiof-6 well, commencing in late December 2004,and encountered oil over a gross interval of at least 123 metres. It isinterpreted that no gas or water has been intersected by the well and as theinterval comprises several good quality sands of varying thickness it meets thecriteria for flow testing. The well was temporarily suspended (as planned) sothat the rig could return to Chinguetti development drilling (which has thehighest priority in this programme). The well will be flow tested once the WestNavigator completes its current phase of work at Chinguetti. The Tiof appraisal drilling and test results will be integrated with the resultsof other studies, including seismic reprocessing and interpretation, reservoirmodelling and simulation and development studies to determine the field reserverange and likely development plan. 2004 Exploration Drilling Programme: Four exploration wells were drilling duringthe quarter: Tevet-1 (PSC Area B) was drilled to total depth of 2,715 metres bythe Stena Tay during October. Following wireline logging the well was declared anew oil discovery (see below) and was then plugged and abandoned as planned. TheStena Tay then drilled the Dorade-1 well in PSC Block 2, targeting a younger,previously untested Miocene channel at a location approximately 85 kilometressouthwest of the Chinguetti Field. Wireline data indicated that the wellencountered some good quality Late Miocene sands but they were water bearingwith no hydrocarbon shows and the well was plugged and abandoned. Capitaine-1 (PSC Area B), located 30 kilometres southwest of Chinguetti was atest of a Miocene channel sand system in a structural trap formed by anunderlying salt dome. Wireline data indicated that the good quality EarlyMiocene channel sands were water bearing. Merou-1 (PSC Area B), located 35 kilometres northwest of Chinguetti and 25kilometres west of Tiof was a test of a structural / stratigraphic trap ofMiocene channel sands draped over a large salt diapir. The well encountered thinhydrocarbon bearing sands, most likely containing gas and considered to besub-commercial. With the drilling rigs now focussed on the priority Chinguetti developmentprogramme and the Tiof appraisal work the results of the 2004 explorationdrilling programme and the extensive 2004 seismic programmes will be used toupdate the existing prospect portfolio and identify new prospects for 2005. Joint Venture participants in the 2004 drilling programme were as follows: Company PSC B PSC Block 2No. of Exploration Wells 3 1Woodside Energy (Operator) 53.846% 48.0%Hardman Resources Ltd 21.600% 28.8%BG Group 11.630% -Premier 9.231% -Premier (Sterling Energy) - -ROC Oil Company 3.693% 3.2%Energy Africa - 20.0% Tevet Oil Discovery (PSC Area B): The Tevet-1 exploration well tested astructural/stratigraphic trap in sands of the same Miocene channel fairway thatcomprise the reservoir at Chinguetti and Banda. The Tevet Prospect is locatedapproximately 80 kilometres southwest of Nouakchott, the Mauritanian capital, 10kilometres northeast of the Chinguetti Field and 10 kilometres west of the Bandaoil and gas discovery. The Tevet-1 well lies within potential tie-back distanceto the Chinguetti field. Tevet-1 was drilled to a total depth of 2,715 metres ina water depth of 489 metres. Evaluation of the wireline data, including reservoir pressures and oil and gassamples indicate that Tevet-1 has intersected a gross hydrocarbon column of 114metres, comprising a 70 metre gas leg and a 44 metre oil leg. An oil watercontact is inferred to have been intersected on the basis of pressure data. Thewell was not drilled in a crestal location but was located to intersectpredicted fluid contacts. The pre-drill prediction of contacts and fluid typeshas been confirmed by the well. 3D Seismic Surveys: A 3,050 square kilometre 3D seismic survey in PSC Area A wascompleted on 14 November 2004. The survey vessel then moved to PSC 6 in thenorth where it commenced recording a 3,100 square kilometre survey, which wasstill in progress at the time of writing. These surveys are in addition to the2,000 square kilometre survey acquired in PSC B in the first half of 2004. Dana Joint Venture Areas: The Dana joint venture areas comprise three PSC areascovering Block 1 which is situated immediately to the south of the Woodsidejoint venture areas, and Blocks 7 and 8 which are north of the Woodside jointventure areas. In each PSC, Dana Petroleum plc ("Dana") is operator and Hardmanhas an 18% interest in Blocks 1 and 8 and 16.2% in Block 7. • Block 1: A number of prospects have been identified from the 3D seismic acquired in late 2002. The first well in this block will be drilled in 2005. • Block 7 and the Pelican-1 Gas Discovery: In December 2003 the Pelican-1 well was drilled to a total depth of 3,825 metres in 1,700 metres water depth. Evaluation of the wireline logs and pressure data indicated that the Pelican-1 well intersected gas bearing sands, interpreted to be Upper Cretaceous in age and therefore older and geologically distinct, compared to the Miocene aged sandstone systems that host the Chinguetti, Tiof and Banda discoveries located approximately 150 kilometres to the south. During 2004 the joint venture incorporated the results of the Pelican-1 wellinto the interpretation of the 3D and 2D seismic. Interpretation and computerenhancement of the 3D seismic data indicate that the channel sand systems whichform the trap at Pelican extend further to the east into shallower water depths.Available 2D data also suggest a continuation of this play concept to the east.The joint venture is therefore planning to shoot an additional 3D seismic surveyto the east of the existing 3D data to delineate potential prospects fordrilling in 2005/2006. This survey will be acquired immediately after the PSC 6survey. • Block 8: This Block is geologically different from the other offshore Mauritanian blocks, and the most prospective area is a carbonate platform with seismically mapped large structural closures. A request for a twelve month extension of the PSC has been approved by theGovernment. This extension allowed the acquisition of a large 3D seismicprogramme over the identified carbonate leads. This survey comprising 1,816square kilometres of 3D seismic was completed during the quarter and preliminaryresults are expected in the first quarter of 2005. GABON - WEST AFRICA Hardman holds a 12.86% working interest in two PSCs offshore Gabon which wereawarded in November 1999 and are known as Iris Marin and Themis Marin. The PSCscover a combined area of approximately 2,000 square kilometres and are locatedin a proven and well established petroleum province. 3D seismic was acquired over the two blocks in early 2003. Detailed processingof this data to produce depth image maps of the reservoir targets beneathshallow salt layers has now been completed. The prospects identified from thiswork are generally smaller than expected (less than 20 million barrels); butsome are still considered to lie within economic limits. The drilling of thefirst well in the Iris Marin Block is expected inmid-2005. In the Themis Marin Block the joint venture acquired an additional 210square kilometres of 3D seismic in the southern portion of the Block during thequarter. UGANDA - EAST AFRICA Hardman is operator and holds a 50% interest in Block 2 which is located in thenorthwest of the country. The licence covers the northern part of Lake Albertand the surrounding onshore area. A marine 2D seismic survey comprising approximately 1,000 line kilometres in theBlock 2 portion of Lake Albert was completed in 2003 and has successfullyidentified several highly ranked prospects within the lake area. A largeprospect trend lies adjacent to the shoreline and could potentially be drilledwith an onshore drilling rig situated at the lake edge. The structural trendcontinues onshore. During the quarter Hardman commenced activities leading toward the acquisitionof a 2D seismic survey of the onshore area and the extension of some of thoselines into the lake. Acquisition of the survey is expected to commence in earlyFebruary 2005. ERITREA - NORTHEAST AFRICA In January 2004 Hardman signed a Memorandum of Understanding ("MOU") with theGovernment of Eritrea over the 11,550 square kilometres Massawa Block offshoreEritrea. This MOU was subsequently extended and negotiations on the terms of theProduction Sharing Contract (PSC) were completed. At the end of the quarter,however, advice was received that the Eritrean Cabinet had decided not toproceed with award of the PSC. No explanation for this decision was given andthe partners are seeking clarification of this situation. GUYANE (FRENCH) - SOUTH AMERICA Hardman was awarded an Exclusive Exploration Licence ("EEL") offshore Guyane inJune 2001 and holds a 97.5% interest. The EEL covers a large area ofapproximately 65,000 square kilometres and includes the major part of theoffshore basin of Guyane. It extends from the twelve mile territorial waterslimit to the 3,000 metre water depth contour. The EEL provides for a five yearexploration programme with a well commitment due by June 2006. Acquisition of 7,500 kilometres of new 2D seismic was completed in mid February2003. The new seismic is of excellent quality and has confirmed the existence ofa thick sedimentary section in the basin and identified a number of hydrocarbonleads. Of particular interest is a large structure with multiple objectives referred toas the "Matamata Prospect". The Guyane project is currently being presented to aselected group of potential farmin partners and several are reviewing theproject. FALKLANDS - SOUTH ATLANTIC Hardman is a member of a consortium which in July 2002 was awarded severalcontiguous offshore exploration licences covering an area of over 30,000 squarekilometres to the south and south east of the Falklands.The existing joint venture partners have reached agreement with a UK basedfinance company to restructure the joint venture interests and provide fundingfor a large 2D seismic survey to be shot over the permit area in 2005. Under theterms of the agreement, a new UK company, Falklands Oil and Gas Limited, hasbeen formed which will hold 77.5% equity in the project. Hardman will retain a22.5% interest but be required to fund only 20% of the seismic survey, whichcommenced acquisition on 20 December 2004. Acquisition is expected to becompleted in first quarter 2005. NEW ZEALAND Hardman holds a 55% interest in Petroleum Exploration Permit 38215 which wasawarded in August 2001. During the year a 2,000 kilometre 2D seismic survey wascompleted to define potential drilling prospects, however this data is yet to bereceived by the joint venture parties. Hardman is in the process of withdrawing from the project. AUSTRALIA Hardman has interests in the Timor Sea area, situated in Commonwealth watersoffshore northern Western Australia. Timor Sea Permits:In the fourth quarter 2003, Hardman purchased for a total payment of $150,000 aninterest in three permits and now holds the following equity: • AC/RL1 (Talbot) 100% • AC/P25 95% • AC/P26 98.75% AC/RL1: AC/RL1 encompasses the Talbot Oil Field which was discovered in 1989 bySantos Limited with the Talbot-2 appraisal well drilled in 1990. Hardman'scurrent internal estimate of recoverable reserves ranges from 2 to 4 millionbarrels which has previously been considered to be uneconomic for a stand-alonedevelopment. However, the potential for development is currently beingre-assessed in view of the current high oil price. AC/P25: During the quarter a 2D seismic survey comprising 425 kilometres wascompleted over several leads in the permit. The new seismic will furtherdelineate potential drilling candidates for drilling a well in 2005. AC/P26: Hardman has agreed to increase its interest in the permit to 100%working interest (98.75% final equity), following the withdrawal of the otherjoint venture partners. Preparation work is continuing for the drilling of a well to test the JoeysProspect which is to be named the Marloo-1 exploration well. The Ocean Bountysemi-submersible rig is to be contracted to drill the well in early 2005. Anoption to drill a second well is also being negotiated with the contractor butwould only be drilled following success in the Marloo-1 well. HARDMAN RESOURCES LTD SIMON POTTERMANAGING DIRECTOR 31 January 2005 Note: In accordance with Australian Stock Exchange Limited listing requirements,the geological information supplied in this report has been based on informationprovided by geologists who have had in excess of five years experience in theirfield of activity. FOR FURTHER INFORMATION PLEASE CONTACT HARDMAN RESOURCES LTD Level 1, 50 Kings Park Road West Perth Western Australia 6005 TELEPHONE FACSIMILE +61 (0) 8 9261 7600 EMAIL +61 (0) 8 9321 2375 WEB SITE office@hdr.com.au www.hdr.com.au 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. Name of entityHARDMAN RESOURCES LTD ABN Quarter ended ("current quarter")------------------- ------------------98 009 210 235 31 DECEMBER 2004------------------- ------------------ Consolidated statement of cash flows ------------ ------------Cash flows related to operating activities Current Year to quarter date $A'000 (6 months) $A'000 ------------ ------------ ------------ 1.1 Receipts from product sales and related (1,103) 154 debtors 1.2 Payments for (a) exploration and evaluation (20,769) (26,525) (b) development (17,603) (37,776) (c) production 315 101 (d) administration (6,670) (9,320) 1.3 Dividends received - - 1.4 Interest and other items of a similar nature 2,850 5,444 received 1.5 Interest and other costs of finance paid - - 1.6 Income taxes paid (11,682) (13,459) 1.7 Other (provide details if material) - - ------------ ------------ Net Operating Cash Flows (54,662) (81,381) ----- ----------------------- ------------ ------------ Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects - - (b) equity investments - - (c) other fixed assets (368) (674) 1.9 Proceeds from sale of: (a) prospects 5,400 5,400 (b) equity investments - - (c) other fixed assets 4 41.10 Loans to other entities - -1.11 Loans repaid by other entities - -1.12 Other (provide details if material) (108) (155) ------------ ------------ Net investing cash flows 4,928 4,575 ----- ----------------------- ------------ ------------1.13 Total operating and investing cash flows (49,734) (76,806) (carried forward) ----- ----------------------- ------------ ------------ ----- ----------------------- ------------ ------------1.13 Total operating and investing cash flows (49,734) (76,806) (brought forward) ----- ----------------------- ------------ ------------ Cash flows related to financing activities1.14 Proceeds from issues of shares, options, etc. 5,469 9,830 (Net)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 5,469 9,830 ----- ----------------------- ------------ ------------ Net increase (decrease) in cash held (44,265) (66,976)1.20 Cash at beginning of quarter/year to date 299,190 328,6951.21 Exchange rate adjustments to item 1.20 (11,122) (17,916) ------------ ------------1.22 Cash at end of quarter 243,803 243,803 ----- ----------------------- ------------ ------------ Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities ------------- Current quarter $A'000 ------------- -------------1.23 Aggregate amount of payments to the parties included in 1,833 item 1.2 -------------1.24 Aggregate amount of loans to the parties included in item ------- 1.10 ------------- --------------------------------1.25 Explanation necessary for an understanding of the transactions ------------------------------------------- Payments in item 1.23 are consulting and related costs (excluding GST) paid during the quarter to directors of the entity and their associates. ------------------------------------------- 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 - - ------------- -------------3.2 Credit standby arrangements - ------ ----------------------- ------------- ------------- Estimated cash outflows for next quarter ------------------ $A'000 ------------------4.1 Exploration and evaluation 54,000 ------------------4.2 Development 38,200----- ----------------------------- ------------------ Total 92,200----- ----------------------------- ------------------ Reconciliation of cash------------------------- ------------- -------------Reconciliation of cash at the end of the quarter (as Current Previousshown in the consolidated statement of cash flows) quarter quarterto the related items in the accounts is asfollows. $A'000 $A'000 ------------------------- ------------- ------------- -------------5.1 Cash on hand and at bank 10,385 2,497 ------------- -------------5.2 Deposits at call 233,418 296,693 ------------- -------------5.3 Bank overdraft - - ------------- -------------5.4 Other (provide details) - ------ ---------------------- ------------- ------------- Total: cash at end of quarter (item 1.22) 243,803 299,190----- ---------------------- ------------- ------------- Changes in interests in mining tenements ------------- ---------- -------- -------- Tenement Nature of Interest at Interest reference interest beginning at end of of quarter quarter (note (2)) ------------- -------- -------- ----------6.1 Interests in mining Mauritania - Working 21.6% 21.6% * tenements Chinguetti relinquished, reduced Exclusive or lapsed Exploitation Authority ------------- ---------- -------- --------6.2 Interests in mining - - - - tenements acquired or ------------- ---------- -------- -------- increased * Subject to adjustment to 19.008% following exercise of bank-in rights by theGovernment of Mauritania on 9 November 2004. Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rightstogether with prices and dates. ---------- ---------- ----------- ----------- Total Number Issue price per Amount paid -------------- number quoted security (see up per ---------- ---------- note 3) (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 655,278,095 655,278,095 - - securities ----- ----------- ---------- ---------- ----------- ----------- 7.4 Changes during 4,927,176 4,927,176 $1.10 $1.10 quarter (a) Increases through issues (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 6,305,000 - Exercise price Expiry date (description and conversion factor) $1.10 31/12/06 ---------- ---------- ----------- ----------- 7.8 Issued during - - - - quarter ---------- ---------- ----------- ----------- 7.9 Exercised during 2,972,176 - $1.10 31/12/04 quarter 2,000,000 - $1.10 31/12/06 ---------- ---------- ----------- -----------7.10 Cancelled 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 withaccounting standards as defined in the Corporations Act or other standardsacceptable to ASX (see note 4). 2 This statement does give a true and fair view of the matters disclosed. Sign here: ............................................................ Date:............................Company Secretary andChief Financial Officer Print name: KATHRYN DAVIES Notes 1 The quarterly report provides a basis for informing the market how theentity's activities have been financed for the past quarter and the effect onits cash position. An entity wanting to disclose additional information isencouraged 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 ofinterests in mining tenements acquired, exercised or lapsed during the reportingperiod. If the entity is involved in a joint venture agreement and there areconditions precedent which will change its percentage interest in a miningtenement, it should disclose the change of percentage interest and conditionsprecedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities The issue price and amount paid up is notrequired in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for ExtractiveIndustries and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of InternationalAccounting Standards for foreign entities. If the standards used do not addressa topic, the Australian standard on that topic (if any) must be complied with. == == == == == This information is provided by RNS The company news service from the London Stock Exchange