Highlands Natural Resources Regulatory News (HNR)

21 Jul 2006 07:00

Hardman Resources Limited21 July 2006 STOCK EXCHANGE / MEDIA RELEASE RELEASE DATE: 21 July 2006 AUSTRALIAN CONTACT: Simon Potter, CEO/MD Hardman Resources Ltd +61 8 9261 7600 Peter Thomas, CFO Hardman Resources Ltd +61 8 9261 7600 LONDON CONTACT: Patrick Handley, UK Media Relations Brunswick Group +44 207 404 5959 RE: JUNE 2006 QUARTERLY REPORT Please find attached the June 2006 Quarterly Activities and Cash Flow Report forHardman Resources Ltd. SIMON POTTERMANAGING DIRECTOR and CEO HARDMAN RESOURCES LTD ABN 98 009 210 235 REPORT TO SHAREHOLDERS FOR THE QUARTER ENDED 30 JUNE 2006 This report summarises the activities of Hardman Resources Ltd (the "Company")and its controlled entities (together, "Hardman" or "the group") during thequarter ended 30 June 2006. ACTIVITY HIGHLIGHTS • Production: Hardman's net production for the quarter was 621,700 barrels (bbls) or 6,832 barrels of oil per day (bopd) (provisional estimate subject to profit sharing adjustment); • Revenue: sales revenue for the quarter from three crude liftings amounted to A$73.9 million. Average realised price of US$63.90 per barrel; • Exploration, Mauritania: high potential impact campaign about to commence with the spudding of Colin-1 prospect; • Exploration, Uganda: Mputa-2 successful appraisal well. Test results from Waraga-1 highly positive for commercialisation of Ugandan discoveries, with aggregate flow rate of over 12,000 bopd achieved; • Chinguetti: production has stabilised in recent weeks at around 37,000 bopd gross when facilities are fully operational, with around 5,000 bopd lost in June due to operational issues; Average daily production in the April-June quarter was 41,500 bopd (gross;Hardman net economic share 6,832 bopd); which was below expectation dueprincipally to unpredicted decline in well deliverability and also gas handlingissues. Production for June averaged 32,361 bopd gross after operational losses. Remediation plans, including optimising reservoir development and accelerated infill drilling, are being intensively worked; • Tiof development: progress towards Tiof field development with concept selected for detailed engineering studies preparatory to declaration of commerciality; • Capital structure: successful equity placing raised A$153.3 million and broadened investor base; ended June quarter with net cash of A$135.7 million; • Outlook: additional Chinguetti production well drilling anticipated starting around October 2006 to increase field deliverability; Accelerating exploration and Uganda appraisal programme for second half, and newventure opportunities in progress. Mr. Simon Potter, Hardman's CEO and Managing Director, commented: "The unexpectedly poor production performance of the Chinguetti field sinceApril has been disappointing. However, production appears to have stabilised inrecent weeks. The extent to which this will remain the case depends on theeffectiveness of pressure support from continuing water injection, which to dateis maintaining voidage replacement, with no injected water breakthrough seen sofar. Our priority now is to work with the field operator and our joint venturepartners to improve the reservoir performance, optimise the development plan andconsequently clarify the recoverable reserves position as soon as feasible. Our operated exploration results in Uganda continue to excite, with better thanexpected flow rates achieved in the recent tests and a successful appraisalwell. We are actively planning aggressive further exploration to follow-up thesediscoveries, which have opened up a new potential African oil province. Our finances are very strong and Hardman remains well-positioned to add materialvalue through our growth strategy and high impact exploration." CORPORATE On 27 April 2006, Hardman placed 65,918,810 new fully paid ordinary shares ofthe Company, representing 10% of the then issued share capital, at a placingprice of UK£0.98 pence (A$2.33) per share. The shares were placed by theCompany's joint London brokers, Oriel Securities Limited and JPMorgan CazenoveLimited, to institutional funds in London. The issue price represented a 2%discount to the previous night's close. The gross proceeds of the placing amounted to approximately UK £64.6 million(A$153.3 million). The primary purpose of the placing was to provide additionalfunding for Hardman's active appraisal and exploration programme, includingfollow up to the Ugandan oil discoveries of the first quarter. On 18 May, the Company held its Annual General Meeting in Perth, WesternAustralia. At the meeting the Company adopted a new constitution, the maximumaggregate fees payable per annum to Non-Executive Directors was increased toA$900,000, and the Hardman Long-Term Incentive Plan (and the CEO & ManagingDirector's participation in it) was approved. On 30 June, the Company announced that Mr. RA (Bob) Carroll was appointed asChairman to succeed the founding Chairman of the Company, Mr. Alan Burns, whohad elected to retire and ceased to be the Chairman and Director with effectfrom 3 July 2006. Mr. Peter Mansell and Mr. John Conlin joined the Board of theCompany as Independent, Non-executive Directors effective 18 May 2006. FINANCE June Quarter 2006 March Quarter 2006PRODUCTION & SALES DATA Crude oil production ('000 barrels) - Gross 3,832 2,140- Hardman share 622 353 Hardman oil liftings ('000 barrels) 856 - REVENUE DATA Sales revenue from operations (A$million) 73.9 -Cash revenue from operations (A$million) 50.0 - Realised oil price (US$ per barrel) 63.90 - Cash (A$ million) 223.7 76.4Debt (A$ million) 88.0 88.4Net cash/(debt) (A$ million) 135.7 (12.0) Operating cash flow for the quarter was A$37.5 million following thecommencement of Chinguetti production in February 2006. Hardman participated inthree oil liftings by the pooled marketing group in which it participates;although cash revenues for the quarter related to the proceeds from sale of justthe first two liftings, with the proceeds from the third lifting receivedsubsequent to the end of the quarter. The average oil price realised for thethree liftings in the quarter was US$63.90 per barrel. Cash expenditure for the quarter included A$17.5 million spent on explorationand appraisal activities and A$4.3 million on development of the Chinguettifield. Offsetting this development expenditure is an amount received from theMauritanian Government for its back-in to the Chinguetti project amounting toA$5.2 million. In aggregate, exploration, appraisal and development cash spendfor the quarter was in line with the amount forecast for the quarter in theprevious report (A$23 million). Following the signing of the revised productionsharing contract for PSC Area B (see below), Hardman paid A$29.3 million(US$21.6 million) to the Mauritanian Government, being its proportion of the$US$100 million agreed Chinguetti Project Bonus, which has been treated as acapital item. The net cash outflow before financing for the quarter ended 30 June 2006 was A$(6.6) million. The equity placing in April, equivalent to 10% of then issuedshare capital, provided additional cash of A$153.3 million before costs. As a result, net cash at the end of the quarter was A$135.7 million (31 March:net debt of A$12 million). Forecast cash expenditure for the quarter ended 30September 2006 is approximately A$20 million for exploration and appraisal andA$5 million for development. During the quarter Hardman amended its hedging contracts currently in place,with the result that the hedging agreements as at 30 June were as set out in thetables below. Purchased and sold options Period Put options at Sold call options at Purchased call US$42.00 - US$68.84 - US$76.25 options at US$46.00 US$85.00 (barrels per day) (barrels per day) (barrels per day)July-December2006 4,200 1,900 500January-June2007 3,400 2,550 500July-December 3,400 3,400 -2007January-June2008 2,600 2,600 - There have been no further changes to hedging contracts since 30 June. Thechanges were made to manage exposures in light of the twin circumstances ofreduced Chinguetti production levels and oil price strength. The realised lossof A$3.8 million on cancelling certain call options will be accounted forinitially through equity and then through revenue in the income statement overthe periods to which the original forecast transactions related. REVIEW OF OPERATIONS MAURITANIA - WEST AFRICA Chinguetti Field (Hardman 19.008% working interest, Woodside operated) Following Chinguetti first oil on 25 February 2006 (WST), and production ramp-upto capacity being rapidly achieved in March, production rates declined throughto May. Average daily production was 52 thousand barrels of oil per day ("mbopd") in April; 40 mbopd in May and 32 mbopd in June (gross), making the dailyaverage for the quarter 42 mbopd (gross). Chinguetti field production potential appears to have stabilised in recent weeksat around 37,000 bopd gross, with actual rates dependent on daily facilitiesavailability; around 5,000 bopd was lost in June to operational issues. On a net economic basis, Hardman entitlement to production for the quarter,reflecting the revised production sharing contract terms from the date of theirimplementation, was 621,700 bbls or 6,832 bopd (provisional estimate subject toprofit sharing adjustment). A number of factors have contributed to the unexpectedly poor field performance.Production from the two producer wells in the northern sector of the field hasbeen below expectation, contributing only around 2 mbopd to daily production.The four southern producer wells have been variously impacted by the need tomanage oil production rates to prevent excessive gas coning in the reservoir andby some aquifer water incursion in two wells from perforations below thereservoir section. Earlier problems with delayed commissioning of the gas compression facilitieshave been largely rectified, albeit with some further unplanned disruptions,although there remain outstanding repairs to earlier damage limiting fullcompression availability. Consequently, gas flaring has now been reduced andsurplus gas production is being re-injected into the nearby Banda reservoir,while gas lift capability is now available to support oil production. Several initiatives are being intensively worked to improve and optimisereservoir performance. An infill drilling campaign (phase 2a) is planned to commence in the fourthquarter 2006, comprising up to three wells to be drilled by the Atwood Hunterrig. This is the maximum number for which equipment is expected to be availablein the time frame. The new wells should each contribute at initial rates ofaround 10,000 bopd (gross). A further phase of infill drilling (phase 2b), isanticipated to commence in 2007 and long lead items have been ordered sufficientfor four producers and two injectors. High resolution seismic will be acquiredin early 2007 to optimise subsequent well locations. Given reserves were last reviewed in 2004 prior to development drilling, and wenow have nearly five months' production history, the reserves for this field areunder review. This will be completed once the operator has delivered the resultsof its current work on the reservoir model and development plan. An independentreview of Hardman's reserve estimates by Netherland, Sewell & Associates Inc.was commissioned earlier this year. Tiof (Hardman 21.6% equity, Woodside operated) During the quarter, the operator presented its conceptual plans for a phaseddevelopment of the Tiof field. The joint venture approved taking the projectforward to the next phase, involving an engineering contract for pre FEED (frontend engineering and design) studies. This will lead to a planned decision toadopt the basis of design, a contracting strategy and a declaration ofcommerciality by end 2006 with a view to final investment decision in first half2007. The current concept is based on a dry tree unit, either a tension leg platform(TLP) or possibly a spar platform, with a light-weight integral drillingfacility. This allows lower cost development wells compared with the subseawells drilled for Chinguetti. With the TLP or similar design, initialdevelopment would cover the central area of the Tiof field, with subsequentphased development based on satellite tiebacks to the platform. Whilst this concept carries a higher initial facilities capital cost than aleased FPSO, the flexibility and reduced drilling cost more than compensate forthis. Given the nature of the Tiof reservoir reducing costs per well will be akey determinant of ultimate economic recovery. At this stage the concept is provisionally for phase 1 to access reserves of40-60 million barrels, based on the current estimates of drilling reach from theTLP. Indicative first oil is by 2009. The facility would have additional wellslots to allow for future expansion, and there would be considerable potentialfor additional reserves to be accessed from further development drilling,including from subsea tie backs from other areas of the field. The first phasewould be designed for oil production of approximately 50,000bopd, producingthrough a tie back to the Chinguetti FPSO or via a dedicated floating storageand offtake vessel. Tevet, Labeidna and Banda Appraisal (Hardman 21.6%/ 24.3% equity, Woodsideoperated) Evaluation of the Tevet and Labeidna discoveries and the oil leg of the Bandagas field as tie-backs to the Chinguetti facilities is continuing, with Tevetbeing fast tracked. Key decisions on development of the core part of the Tevetreservoir are scheduled for the second half of 2006. Mauritania Exploration PSC A and B (Hardman 24.3% and 21.6% equity respectively, Woodside operated) Exploration drilling offshore Mauritania will resume following the arrival thisweek of the Atwood Hunter semi-submersible rig, which is preparing to spud thefirst well pending receipt of required environmental approvals.The drilling sequence will commence with the PSC Area A Colin-1 Mioceneobjective, with mean potential reserves of 170 million barrels. Kibaro-1 isexpected to be the second PSC A well drilled after two Dana-operated wells inBlocks 8 & 7 respectively, although this depends on the timing of the Chinguettiproduction wells referred to above. Kibaro-1 will be drilled to a Cretaceousobjective with mean potential reserves of 130 million barrels. The PSC B 25%relinquishment was finalised and submitted during this quarter. Block 1 (Hardman 18% equity, Dana operated) The evaluation of the Faucon-1 results has been finalised during the quarter.The operator is updating the prospect ranking for Block 1 and is now focusingits efforts towards the forward exploration programme, with considerations forfurther seismic acquisition in the south of the block to firm up possible leads. PSC C 2 (Hardman 28.8% equity, Woodside operated) The results of the Faucon-1 well (drilled in Block 1) have been integrated intothe charge / maturity modelling of southern offshore Mauritania, including Block2. The presence of a mature Albo-aptian source rock in the southern Mauritanianoffshore region has been confirmed. PSC C 6 (Hardman 22.422% equity, Woodside operated) Studies have concentrated on defining the remaining prospectivity within thepermit following the results of the Zoule-1 well earlier in 2006. There are anumber of inboard features covered by 3D that require further study. Theupcoming Block 7 well Aigrette-1 (see below) will also influence the view ofBlock 6 prospectivity. Block 7 (Hardman 16.2% equity, Dana operated) Data from a new 1,540 sq km 3D survey was merged with previous data to mature aprospect for the commitment well to be drilled during the upcoming 2006 / 2007campaign. Several candidates were identified and the joint venture has selectedAigrette-1 as the lead candidate for drilling after the Flamant-1 well in Block 8. Aigrette-1 is primarily a gas prospect on trend fromthe Pelican-1 gas discovery. The primary targets are stacked Cretaceoussandstones. Block 8 (Hardman 18% equity, Dana operated) Flamant-1 will be drilled in the upcoming Atwood Hunter campaign, in August2006. Flamant-1 is considered a key well to identifying significant resourcepotential in northern offshore Mauritania and is the best test of a largeregional high with both primary and deeper secondary objectives. Significantfollow up potential exists within the permit for this new play type targetingCretaceous carbonate platform/reefs. The Flamant prospect has the potential tocontain about 5 TCF of gas recoverable. Mauritania Commercial On 6 June 2006 Hardman and its co-venturers signed revised production sharingcontracts (PSCs) for Areas A, B, C Block 2 and C Block 6 offshore Mauritania,bringing to a close the dispute earlier this year over amendments to theoriginal PSCs. In summary, the major elements of the resolutions are: exploration periodssecured in line with previous arrangements; a Chinguetti production bonus ofUS$100 million gross (Hardman share 21.6%) payable by the Area B participantsfollowing the approval of the revised contract; a modest increase in the shareof revenue to the Mauritanian Government during periods when the realised oilprice exceeds US$55 per barrel; and establishment of an Environmental Commissionfunded through a total annual payment of US$1 million by the joint venturersduring the life of production from the revised PSCs. Five cargoes have been successfully lifted by all participants through to end ofthe second quarter with Hardman and its pooling group lifting three cargoes todate. UGANDA - EAST AFRICA (Hardman 50% equity and operator) During the quarter Hardman drilled the Mputa-2 well to appraise the Mputa-1 oildiscovery made earlier this year. The appraisal well was drilled 3 km from anddowndip of Mputa-1, to test the extent of the oil-bearing reservoirs. Mputa-2 confirmed the lateral extent of both the upper and lower targetsandstones which were oil bearing in Mputa-1. The upper zone was water wet inMputa-2, whilst the lower zone contained oil which was correlated to similar oilbearing zones in both Mputa-1 and Waraga-1. The presence of oil saturated sandsin these basal units in all wells drilled to date implies an extensivestratigraphic trapping mechanism at this level. The well was cased and suspendedpending completion over the lower zone at a future date. The Dafora F200 rig was then demobilised. Hardman mobilised the smaller EagleDrill rig to conduct well testing operations on the Waraga-1 and Mputa-1discoveries. Three oil bearing zones were perforated and successfully flowed 12,000 bopd fromthe Waraga-1 well. The results have exceeded expectations and are tabulatedbelow. The tests indicate excellent reservoir quality with high permeability anddeliverability, and the oil has good natural flow characteristics. Analysis ofthe test results and the oil samples is ongoing. Waraga-1 has been plugged andsuspended ready for completion and potential future production. Test Perforated Interval Depth Main test Maximum flow (1" choke) Oil quality (36/64" choke)#1. 1,888-1,894 metres 1,500 bopd 4,200 bopd 33.8degreesLower APIZone#2. 1,782 to 1,792.5 metres 2,400 bopd 4,200 bopd 33.8degreesMiddle APIZone#3. 1,680 to 1,710 metres 2,100 bopd 3,650 bopd 18.6degreesUpper APIZone TOTAL 6,000 bopd 12,050 bopd The rig and testing equipment will now be relocated to the Mputa-1 location forflow testing of similar oil bearing intervals to those tested at Waraga. Inaddition a flow test will be attempted from fractured basement lithologies wherehydrocarbons were encountered during the drilling of the Mputa well - anadditional play type to those already tested at Waraga. The programme at Mputais expected to commence in early August. The joint venture is currentlydeveloping a future exploration and appraisal strategy and assessing the optionsfor commercialising these discoveries. Planning is well advanced for the acquisition of onshore 2D seismic at thenorth-eastern region of Lake Albert, which should commence in the Q4 2006. Thisarea to the East of Butiaba has not been explored previously. However there arenumerous oil seeps within the area and oil shows were noted in the 1938 Waki-1well. A gravity survey recently completed by the Ugandan Government's PetroleumExploration and Production Department suggests the potential for structuraltraps. This gravity survey has been used in the planning of the layout of the 2Dseismic. The joint venture is also planning a further onshore exploration and appraisaldrilling programme in the second half of 2006, likely including the Nziziprospect, as well as evaluating options for future drilling of the large Ngassaprospect offshore Lake Albert. TANZANIA - EAST AFRICA (Hardman 50% equity and Operator, subject to farm inobligations) The Tanzanian Government approved Hardman's farm-in to the Mtwara & Lindilicences announced in March 2006. Planning is underway for a marine-to-shoretransition 2D seismic survey in the Lindi licence, to be operated by Hardman.The transition survey is targeting a large prospect which straddles the coastline. This prospect was initially mapped on vintage seismic data. The marine 2Dseismic data acquired in late 2005 supports the original interpretation. Planning is also underway for a land 2D seismic survey in the Mtwara Licence,again addressing structures mapped on vintage data. A scouting trip to the areain March 2006 discovered a previously unknown gas seep in the vicinity of one ofthe structures. Hardman plans to mature the prospects for drilling in late 2007. GUYANE - SOUTH AMERICA (Hardman 97.5% equity and Operator) The permit has now progressed into the second exploration period as at 1st June2006, following an application for a second five year permit term, which issubject to official rendering of title by the Government authorities. Hardman'sproposed farm-out of equity in this very large permit is progressing;discussions are currently underway with a number of potential farmout partnersto take this project forward to the drilling phase. Preparation continued during this quarter for the first exploration well inGuyane, with well designs and costings reviewed. Hardman is actively pursuingseveral options to secure a drilling rig capable of executing a programme in thewaters of offshore Guyane in 2007, with the regional structural high, known asthe Matamata prospect, the likely first drilling candidate. SURINAME - SOUTH AMERICA (Hardman 40%, subject to farm in obligations.Staatsolie operated) Discussions continued with the State oil company, Staatsolie, to concludeHardman's farm-in to acquire a 40% working interest in the onshore Uitkijk andCoronie concessions in Suriname. The concessions are both large and prospective,covering a total area of approximately 3,300 square kilometres, and lyingdirectly adjacent to Suriname's main producing oil fields, Tambaredjo andCalcutta, which collectively have over 1 billion barrels of oil in place andproduce approximately 13,000 bopd. Hardman will earn its interest via the funding of an initial explorationcampaign of up to 25 wells capped at a maximum expenditure of US$8.5 million.Proposed use of a new rig may delay the commencement of the drilling programmeto early 2007, from the previously announced Q4 2006. Hardman also lodged anapplication for an offshore block this quarter. FALKLAND ISLANDS - OFFSHORE SOUTH AMERICA (Hardman 22.5% equity, FOGL operated) During the quarter, seismic data acquisition was interrupted by bad weatherleading to curtailment of the 2D seismic survey that was underway. About 4,000kms had been acquired prior to this. The initial results of the seismic surveyhave confirmed the diversity of leads and the overall good prospectivity of thelicence area. However, drillable prospects will need to be of a sufficient sizeto be potentially commercial in this remote area. Drilling is not expected tocommence before 2008. NEW VENTURES Hardman continues to pursue new acreage opportunities and is in advancednegotiations for a further two Atlantic Margin frontier exploration blocksexpected to be announced by the end of 2006. The Company also intends to bid forat least one block in the upcoming licensing round in Trinidad, which has beendelayed until August 2006. SIMON POTTERCEO & MANAGING DIRECTOR Note: In accordance with Australian Stock Exchange Limited and / or AIM listingrequirements, the oil and gas reserves statements included in this Report arebased upon information compiled and reviewed by Hardman's Technical Manager,Andrew Patterson, B. Eng. SPE a practising petroleum engineer with in excess offive years' technical upstream petroleum experience. 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 30 JUNE 2006------------------- ------------------ 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 49,974 49,974 debtors 1.2 Payments for (a) production (3,571) (5,110) (b) administration (3,526) (7,204) (c) other (2,166) (2,166) 1.3 Dividends received - - 1.4 Interest and other items of a similar nature 2,309 3,272 received 1.5 Interest and other costs of finance paid (355) (355) 1.6 Income taxes paid (910) (910) 1.7 Other (Income tax refund) - 988 (Payment of hedging contracts) (4,227) (4,227) ------------ ------------ Net Operating Cash Flows 37,528 34,262 ----- ----------------------- ------------ ------------ Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects - - (b) equity investments - - (c) other fixed assets (830) (1,162) 1.9 Proceeds from sale of: (a) prospects - 1,350 (b) equity investments 1,907 4,693 (c) other fixed assets - -1.10 Loans to other entities - -1.11 Loans repaid by other entities - -1.12 Other (a) exploration and evaluation (17,534) (39,932) (b) development 857 (23,147) (c) other licence payments (29,300) (29,300) (c) other 778 564 ------------ ------------ Net investing cash flows (44,122) (86,934) ------------ ------------ ----- ----------------------- ------------ ------------ ----- ----------------------- ------------ ------------1.13 Total operating and investing cash flows (6,594) (52,672) (brought forward) ----- ----------------------- ------------ ------------ Cash flows related to financing activities1.14 Proceeds from issues of shares, options, etc. 149,959 150,356 (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) (363) (363) ------------ ------------ Net financing cash flows 149,596 149,993 ----- ----------------------- ------------ ------------ Net increase (decrease) in cash held 143,002 97,3211.20 Cash at beginning of quarter/year to date 76,372 120,8241.21 Exchange rate adjustments to item 1.20 4,313 5,542 ------------ ------------1.22 Cash at end of quarter 223,687 223,687 ----- ----------------------- ------------ ------------ 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 662 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 137,005 88,022 ------------- -------------3.2 Credit standby arrangements - ------ ----------------------- ------------- ------------- Estimated cash outflows for next quarter $A'000 ------------------4.1 Exploration and evaluation 19,700 ------------------4.2 Development 5,000----- ----------------------------- ------------------ Total 24,700----- ----------------------------- ------------------ 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 44,843 25,332 ------------- -------------5.2 Deposits at call - - ------------- -------------5.3 Bank overdraft - - ------------- -------------5.4 Other (provide details) 178,844 51,040----- ---------------------- ------------- ------------- Total: cash at end of quarter (item 1.22) 223,687 76,372----- ---------------------- ------------- ------------- Other cash balances comprise amounts held on 30 day deposit. Changes in interests in mining tenements ------------- ---------- -------- -------- Tenement Nature of Interest at Interest reference interest beginning of at end of (note (2)) quarter quarter ------------- ---------- -------- -------- 6.1 Interests in mining - - - - tenements relinquished, reduced or lapsed ------------- ---------- -------- --------6.2 Interests in mining Tanzania (Lindi Working Nil- 50%- tenements acquired or and Mtwara) increased ------------- ---------- -------- -------- 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 725,906,905 725,906,905 - - securities ----- ----------- ---------- ---------- ----------- --------- 7.4 Changes during quarter (a) Increases 850,000 850,000 $1.10 $1.10 through issues (b) Decreases 65,918,810 65,918,810 $2.33 $2.33 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 1,595,000 - Exercise price Expiry date (description and $1.10 31/12/06 conversion factor) ---------- ---------- ----------- --------- 7.8 Issued during - - - - quarter ---------- ---------- ----------- --------- 7.9 Exercised during 850,000 - $1.10 31/12/06 quarter - ---------- ---------- ----------- ---------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 1). 2 This statement gives a true and fair view of the matters disclosed. Sign here: ................................ Date: ............................Chief Executive Officer & Managing Director Print name: SIMON POTTER Notes 1 The definitions in, and provisions of, AASB 6: Exploration for and Evaluationof Mineral Resources and AASB 107: Cash Flow Statements apply to this report. == == == == == This information is provided by RNS The company news service from the London Stock Exchange