Petra Diamonds Regulatory News (PDL)

1 Nov 2006 07:01

Petra Diamonds Ld01 November 2006 Petra Diamonds Limited QUARTERLY ACTIVITIES REPORT FOR THE THREE MONTH PERIOD ENDED 30 September 2006 (dateline 31 October 2006) Petra Diamonds Limited ("Petra" or "the Company" or "the Group"), the AIM-quotedand ASX-listed diamond mining group (AIM and ASX: PDL), announces its quarterlyactivities report (unaudited) for the three month period ended 30 September2006. Highlights • Alto Cuilo - bulk sampling commences; 62 kimberlites now identified; analysis of further drill core gives more highly encouraging indicator mineral chemistry results, in some cases potentially more prospective than results from previous samples • Botswana - Kukama project area identified, hosting 24 kimberlites, within Petra's licence areas, a very positive and important development for the Kalahari exploration programme • Kono project - highly encouraging diamond recoveries from mini samples of 224 diamonds totaling 23.91 carats • South Africa - production from the South African mines of 35,602 carats for the quarter (quarter to June 2006: 43,378 carats); although production for the quarter was affected by unexpected labour and power interruptions outside of Petra's control, these factors are not long term in nature and action has been taken to address the issues • Corporate - Petra issues a US$20 million unsecured, interest free bond, convertible at 130 pence per share; the financing strengthens Petra's treasury on an interest free basis, giving Petra the flexibility to act quickly on potential growth opportunities • Proposed transaction - Petra announces that it is in advanced and exclusive discussions with De Beers with regards to the acquisition of the Koffiefontein mine and associated assets in South Africa; it is expected that a formal sale agreement will be signed in the near future Angola - Project Alto Cuilo • Bulk sampling has commenced with the large diameter drill rig; priority targets have been ranked for large diameter drilling according to mineral chemistry analysis, surface area and logistical considerations; initial results are expected by December 2006 • 62 kimberlitic occurrences now confirmed (June Quarterly Activities Report: 50) out of 70 targets drilled, an exceptional success rate of 89% • Laboratory analysis of drill core from an additional 13 kimberlites records indicator mineral chemistry results that are, in some cases, even more encouraging than results returned on previous core samples; the indicator mineral results are comparable to some of the world's leading economic kimberlite deposits • Approximately 32,000 metres of core drilling has now been completed, illustrating the effectiveness of the three drills now working on site; a total of 208 holes have been drilled to date Botswana - Kalahari Diamonds • Botswana - the delineation of the Kukama project area hosting 24 kimberlites (some diamondiferous) is a significant advance in Petra's exploration of the Kalahari; the "known" kimberlite indicator mineral ("KIM ") halo cannot be explained by the 24 known kimberlites alone; this development means Petra has identified another highly prospective and relatively unexplored target area, further illustrating the quality of the Kalahari ground • Further modelling of Falcon gravity and magnetics over the Mabutsane 306 ("Mab 306") anomaly suggests an intrusive, pipe-like model; further drilling on Mab 306 planned for October 2006 Sierra Leone - Kono project • Encouraging diamond recoveries made from mini sample treatment; 224 diamonds totaling 23.91 carats recovered (June Quarterly Activities Report; 44 diamonds totaling 5.6 carats), the largest diamonds being stones of 1.6, 1.4, 1.34, 1.1 and 0.85 carats • Shaft sinking at the two bulk sampling shafts proceeding well South Africa Helam, Sedibeng and Star mines • Production from the South African mines of 35,602 carats for the quarter (quarter to June 2006: 43,378 carats); production was affected by unexpected labour and power interruptions outside of Petra's control (refer Review of Operations for detail); action has been taken to address the issues and production is returning to that of the June 2006 quarter • EBITDA on mine of US$490,691 delivered for the quarter, despite these external interruptions • The current US$/Rand exchange rate provides an underpin for sales revenue • Management remain confident that the capacity and engineering improvements being put in place at Helam, Sedibeng and Star will, over the medium term, lead to improved production and cash flow generation Acquisition of Koffiefontein mine • The Company is aware of speculation in respect of Petra and the Koffiefontein mine and associated assets ("Koffiefontein") currently owned by De Beers. Petra confirms that it is, with BEE partners, in advanced and exclusive negotiations with De Beers in respect of the acquisition of Koffiefontein and expects to be in a position to update shareholders of progress in this respect in the near future. On the successful completion of the proposed transaction, Petra would expectKoffiefontein to add a significant level of production to the Group. The proposed acquisition of Koffiefontein will be funded out of Petra's existingresources and will be subject to the completion of a formal sale agreement,issue of a new order mining licence to Petra by the South African Department ofMinerals and Energy and approval from the South African Competition Commission. DIAMOND SALES SUMMARYQuarter to; Carats sold Price/carat (average) US$ Sales US$M 30 September 2006 33,916 133.5 4.530 June 2006 37,387 151.6 6.012 Months to;30 June 2006 160,856 130.9 21.7 DIAMOND PRODUCTION SUMMARYQuarter to; Tonnes Carats Grade CPHT * Treated Recovered 30 September 2006: ROM 70,228 32,147 45.830 September 2006: Tailings 49,757 3,455 6.930 June 2006: ROM 72,295 37,566 51.9630 June 2006: Tailings 56,518 5,812 10.2812 Months to:30 June 2006: ROM 288,397 155,614 53.930 June 2006: Tailings 192,086 19,398 10.1 * CPHT - carats per hundred tonnes CORPORATE On 19 September 2006 Petra announced the issue of a US$20 million unsecured,interest free convertible bond ("the Convertible") to Al Rajhi Holdings W.L.L,and on 5 October 2006 Petra drew down the US$20 million under the terms of theConvertible. As stated in the announcement of 19 September 2006, the Company is currentlyevaluating opportunities that the board of Petra believe may have the potentialto grow revenue and cash flow, and the Company will provide further informationshould any of these opportunities progress to formal agreements. One of theopportunities is the proposed acquisition of Koffiefontein. In the meantime, theproceeds of the Convertible will be held by Petra and accrue bank depositinterest and any acquisitions or other business developments will be subject tothe Company's demanding review criteria. SUMMARY OF TRADING RESULTS (UNAUDITED) 3 months to 3 months to 30 September 2006 30 June 2006 US$ US$Revenue 4,528,487 5,975,338EBITDA on mine - South African operations 490,691 1,129,600Exploration expenses * (137,860) (568,482)Administration expenses * (853,958) (1,231,431)Net finance costs (104,188) (28,413)Loss before depreciation, amortisation and foreign (605,315) (698,726)exchange movementsLoss for the quarter ** (6,434,022) (12,920,750)CAPEX 606,680 984,164 * Expenses before depreciation, amortisation,interest and foreign exchange movements.** Loss after non-cash flow items; unrealisedforeign exchange of US$3.5m, depreciation andamortisation of US$2.3m CASH AND STOCK SUMMARY 30 September 2006 30 June 2006 US$ million US$ millionCash balance 5.3 *** 7.0Diamond stock 2.3 1.9(recorded at production cost)Total 7.6 8.9 Note; *** on 5 October 2006 Petra drew down the US$20 million Convertible,taking Group cash balances to US$25 million. REVIEW OF OPERATIONS ANGOLA, PROJECT ALTO CUILO Kimberlite Exploration Core drilling Ongoing core drilling of the anomalies identified by the Midas low levelhelicopter aeromagnetic survey has now resulted in the discovery of 62kimberlites, a significant advance on the 50th kimberlite which was a milestonefor the project in July 2006, and again illustrating the solid progress beingmade on a regular basis. The third core rig which arrived on site during the quarter to 30 June hasaccelerated the programme significantly; core drilling now totals 32,000 metreson 208 holes (June Quarterly Activities Report; 26,000 metres on 190 holes). Onecore rig is focused on drilling additional holes into the large AC98 kimberliteclose to the main camp at Mussenuige (this kimberlite delivered highlyencouraging indicator mineral chemistry), while the other two rigs continuedrilling in the Luxinga area of north eastern Alto Cuilo, where they haverecorded 12 further kimberlite discoveries since the June Quarterly ActivitiesReport. The success rate of this accelerated drilling programme continues to surpass thenorms for global kimberlite exploration with 70 of the 249 magnetic anomaliesnow having been drilled, and 62 confirmed as kimberlitic. Bulk Sampling The RB40 Prakla Bohrtechnic large diameter drill ("LDD") rig has commencedoperation. The LDD rig will take mini bulk samples of approximately 200 tonnesfrom selected anomalies to give an indication of grade and value per carat.Priority targets have been identified and ranked for LDD drilling according tomineral chemistry, surface area and logistical considerations. The LDD rig hasthe capacity to drill holes with a diameter starting at 17 inches (43cm) andreducing to 12 inches (30cm) down to depths of 350 metres. It was decided to start the large diameter drilling programme on AC 16 which,although ranked at number 5 in the original ranking process, has the leastoverburden cover in the top 5 kimberlites. This approach will allow for testingof the rig and conditioning of the crew under favourable logistical conditions,resulting in improved performance and substantial cost savings down the line. The LDD rig is now drilling at full capacity and the initial technicalassessment of the bulk sampling programme is very encouraging. The explorationteam is stockpiling material recovered by the LDD rig for treatment by the 10tonne per hour dense media separation ("DMS") sample plant. The DMS plant, whichis a custom made closed circuit unit designed specifically for kimberlite bulksampling, is currently under construction on site and is expected to becommissioned in November 2006. It will commence treatment of the samplesimmediately and initial results are expected in December 2006. Indicator Mineral Chemistry Core from a further 13 kimberlites was analysed during the quarter with regardsto indicator mineral chemistry and the results are again highly encouraging.Diamond stability field G10 garnets and high-sodium eclogitic garnets were foundin a number of these samples in abundances that are comparable to, and in somecases surpass, the previous diamond indicator mineral results announced fromAlto Cuilo. Analyses of these latest samples also indicate a mantle geothermfavourable to the kimberlites having sampled material derived from the earth'sdiamond stability field at conditions favourable for the formation of diamonds. Results from mineral chemistry analysis continue to guide the explorationprogramme and particularly assist in the selection and prioritising of thekimberlites from where mini bulk samples will be taken. A kimberlite re-rankingexercise will be undertaken in the near future utilising the ongoing mineralchemistry results. Alluvial Exploration The alluvial exploration programme continues to further evaluate the potentialfor economically viable alluvial deposits. All of the project partners,including Endiama and Moyoweno, have decided to delay the trial mining of thealluvial block on the Luangue river as it was decided that, at this stage, sucha programme would have incurred significant costs and not produced aproportional increase in data. The alluvial trenching and pitting programme will now be extended to other areasin order to obtain additional data. The programme is focused on the Mussunuigeriver to the west of the Luangue river and has already started yielding resultsthat will be used to further assess the characteristics of the nearbykimberlitic bodies as well as the feasibility of alluvial deposits. BHP Billiton Joint Venture As at 30 September 2006, BHP Billiton had advanced funding of US$28.2 million(30 June 2006: US$22.8 million) in respect of exploration at Alto Cuilo. Theadvances for the quarter were largely for capital and operating costs associatedwith the commencement of the bulk sampling programme. BOTSWANA, KALAHARI DIAMONDS Kukama kimberlite field Petra has identified a further 24 kimberlites, all located within KalahariDiamond's licence areas, known as the Kukama project area. The kimberlites lie beneath approximately 50 metres of Kalahari sand cover,which previously hampered exploration to the extent that assessment of theirdiamond potential was limited to indicator mineral chemistry and micro diamondsampling, with no significant bulk sampling having been carried out to date.Kimberlites were first discovered in this area by Falconbridge during the late1970's and subsequent discoveries were made by De Beers and other companies inthe early 1990's. The Kukama project area is comprised of the Kikau pipes, the Khutse pipes and 4other pipes discovered in close proximity to the village of Kukama (there islittle further information available on Khutse kimberlites at this stage). Historical exploration drilling by other exploration companies of Kikau 1kimberlite (diameter approx. 800 metres) intersected crater facies kimberlite toa depth of 180 metres before the hole was stopped without intersectingtufficitic kimberlite. Micro-diamond sampling produced 6 micro-, and 1 macro-diamonds from 839 kilogrammes of material. Historical micro-diamond sampling ofthe smaller Kikau 5 kimberlite produced 13 micro-diamonds from 717 kilogrammesof material. Historical micro-diamond sampling of Go211 (near Kukuma) recovered 8 micro- and1 macro-diamonds from 601 kilogrammes of material, with a reported grade of 3.8cpht. Similarly, Go173N (also near Kukuma) produced 36 micro- and 3macro-diamonds from 628 kilogrammes of material with a reported grade of 5.8cpht, which is a significant result at the prospecting phase. The presence of these diamondiferous kimberlites is very significant in that itindicates that fractures exist in this area that tapped the mantle within thediamond stability field. The area lies within very magnetically noisy Karoobasalts under 50 metres of Kalahari sand cover. The extent of the KIM halocannot be explained by the location of the 24 known kimberlites alone; this isan excellent, relatively unprospected target area for which an explorationprogramme will be drawn up in the coming months. Mabutsane anomaly Further modelling and processing of Falcon geophysical data over Mab 306, thevery prominent circular gravity anomaly of 70 Eos (a measure of gradientgravity) and with a diameter of 1.5 kilometres that was drilled during thequarter to December 2005, has detected a subtle magnetic anomaly co-incidentwith the gravity anomaly. Further modelling of the magnetic data will allow the accurate positioning of 1borehole to intersect this body where it lies closest to surface (about 200metres), to test the possibility of a pre-Karoo kimberlite situated at depth. Gope 78 magnetic anomalies have been identified from the Xcalibur aeromagnetic surveyin the Gope area to date. In addition to this a further 14 magnetic anomalieshave been identified from the Gope West Falcon block A, and a further 3 from theGope Falcon Test Block, bringing the total number of magnetic anomaliesidentified in the Gope area to 95. Of the anomalies selected in the Gope area,a total of 60 have been investigated by ground geophysical follow-up. A drilling programme is due to commence in the Gope and Mabutsane areas byNovember 2006. 15 anomalies have been selected for drilling at Gope, all ofwhich lie within or adjacent to historical KIM halos. With recent developments in Falcon technology, a high-resolutionhelicopter-borne Falcon gravity survey is being considered over the unexplainedhistorical KIM halo to the south and west of the Gope kimberlite cluster. Thesystem will first be tested over Gope kimberlites with a known gravity response.If the system proves successful it will remove the need for ground follow-upgeophysical surveys in this area, accelerating significantly the explorationprogramme. Orapa South Fieldwork has continued in the Orapa south area. Ground follow-up has producedsome interesting co-incident magnetic and gravity anomalies, 8 of which arecurrently being tested by anomaly-specific heavy mineral and geochemical soilsampling. One anomaly has so-far been earmarked for drilling as a continuationto the Gope drilling campaign. BHP Billiton's Orion Geophysical Unit has just completed a neo-neural networkinggeophysical processing exercise over the entire Orapa South Falcon survey, whichwas designed to enhance kimberlite-style anomalies not immediately obvious onthe airborne gravity and magnetic Falcon data. If this exercise provessuccessful in finding previously unidentified anomalies, this processingtechnique may be applied to all historical Falcon data. SIERRA LEONE, KONO PROJECT Sample Treatment To date, 224 diamonds totaling 23.91 carats have been recovered (June Report; 44diamonds totaling 5.6 carats), the largest diamonds being stones of 1.6, 1.4,1.34, 1.1 and 0.85 carats. The samples processed to date comprise mixed materialfrom the various exploration activities and the results, whilst veryencouraging, are not large enough to arrive at a representative grade. Exploration Development Since the implementation of a rolling exploration trenching method in December2005, 28 rolling exploration trenches have been excavated with a combined lengthof 336 metres. In order to reach the fissure at depths of between 8 and 12metres, a total of 5,241 tonnes of overburden has been stripped manually,samples extracted and the trench area rehabilitated. The combined length ofknown diamondiferous fissure strikes now exceeds 17 kilometres. According to Petra's knowledge no other company has conducted such comprehensiveanalysis of the multiplicity of fissures in the Koidu, Simbakaoro, Yengema,Bumpe and Yendema areas up to date. The integrated result of the explorationprogramme is providing Petra with a sound understanding of the diamondiferousfissures available, their potential and the project strategy ahead. While manyother companies operating in the area ceased activities during the monsoon rainperiod, Petra continued with exploration work indicating its commitment toachieving results and moving to full production. Bulk shafts and test trenches Shaft sinking at the two bulk sampling shafts, both of which are on kimberlitefissure, are on track in reaching the applicable stoping depth, whereafterstopes will be prepared to access production test tons of fissure. At a depth ofover 24 metres and on both shafts the width of the fissure remains narrower thanthe normal mining width. The situation will be reviewed once the mini stopingdepth of 30 metres has been reached by November 2006 and the results of the coredrilling programme known. At Yendema, the 'Lion 2 Original' fissure was intersected with two explorationtrenches. A 7 tonne mini sample returned 22 transparent diamonds totaling 2.42carats, the largest being a transparent diamond of 1.34 carats. The width of thefissure at the point it was intersected was 1 metre. A test shaft wasestablished and shaft sinking is well underway at a depth of over 7 metres. Thefirst 11 tonne (ROM) mini sample extracted from the test shaft delivered 37transparent diamonds totaling 5.35 carats, the largest being stones of 1.6,0.85, 0.75, 0.6 and 0.55 carats. Sample extraction and processing is ongoing asthe shaft sinking progresses. SOUTH AFRICA- HELAM, SEDIBENG & STAR The combined operations produced a total of 35,602 carats for the quarter(Quarter to June; 43,378 carats). Production was lower than projected due to: (i) a shortage of skilled labour, due to contract staffing operators in theHelam area recruiting a substantial number of the skilled workers from the mine.Whilst this practice is not encouraged, it is a result of the shortage andcompetition for skilled labour in the South African mining environment. Suitablereplacement labour has now been hired at Helam and training to the requiredstandards is progressing well: (ii) the national electricity provider providing an irregular power supply tothe Helam mine, affecting the operation and efficiency of plant and machinery.This problem is of a seasonal nature due to higher demand on the power supplyduring the winter and is not expected to adversely impact operations now thatwinter demand has passed: and (iii) ventilation complications at Star mine. Despite these interruptions, EBITDA on mine of US$490,691 for the combinedoperations was recorded for the quarter. Management remain confident that thecapacity and engineering improvements being put in place at Helam, Sedibeng andStar will, over the medium term, lead to improved production and cash flowgeneration Helam Mine A total of 27,766 ROM fissure tonnes were delivered to the plant for 21,187carats, yielding a grade of 76 cpht for the quarter. In addition 1,078 caratswere produced from the tailings operation. This resulted in a total of 22,265carats for the combined operation. The slyping and equipping of John main shaft to 21 Level and the pilot raisingof the main shaft between 22 and 21 Level will commence during the quarter toDecember 2006. The break-away from the west-sub shaft to the 22 Level main shaftstation position is now 8 metres short of being vertically beneath John mainshaft. The sinking of John main shaft to 23 Level will commence during thequarter to December 2006 once the main shaft position is reached. The Second Lease incline project has progressed well and the production build upfrom this shaft system has commenced. The focus during the next quarter will bedirected to the establishment of multiple stopes and the continuous deepening ofthe shaft to 18 Level which is already 16 metres below the bank elevation of 17Level. The development projects at Second Lease, John main shaft and to 25 Level atEdward shaft will open-up the required resources to maintain the production. Sedibeng Mine A total of 33,585 ROM fissure tonnes were delivered from the mining operation,which yielded 8,014 carats at a ROM grade of 24 cpht. In addition 1,638 caratswere produced from the Dancarl tailings operation at a grade of 5 cpht. Thisresulted in a total of 9,652 carats for the Sedibeng operation. At Sedibeng production is going well and the difficult ground conditions thatdelayed proper stope development on 23 Level have been successfully rectified.The continuous stope establishment will assist in increasing production fromunderground operations as planned. The deepening of the west sub shaftprogressed well and is on 24 Level. The 20 South drive into the Dancarl section is now vertically beneath Dancarlmain shaft. The planning to initiate a raise-bore holing to the bottom ofDancarl main shaft is progressing as scheduled and development will commenceduring the quarter to March 2007. The construction of the new DMS diamond recovery plant is progressing well andis on schedule to be commissioned during the quarter to March 2007. This plantwill cater for all production (present and future) from the Sedibeng mining andtailings. It is anticipated that when this plant is commissioned it will resultin a significant reduction in operating cost and a significant improvement indiamond security. Star Mine A total of 8,877 ROM fissure tonnes were delivered to the plant for 2,946carats, yielding a grade of 33 cpht for the quarter. In addition 7,200 tonnesof tailings were processed for 739 carats. This resulted in a total of 3,685carats for the Star operations. Although the sealing and support of the 1.4 metre diameter raise-boreventilation shaft was completed during the previous quarter, problems wereexperienced in the area where the shaft intersects the shale formations. Thisdelayed the establishment of the ventilation districts in the Burns operationalsections, which resulted in the persistence of the poor underground ventilationconditions. Mechanical support will now be installed during the next quarterimproving ventilation to assist in increasing production from undergroundoperations. The Wynandsfontein section is producing well, with an anticipated productionincrease once the replacement 14 Level haulage development is complete. Thedevelopment of the 14 Level haulage is on schedule and will be fast-tracked assoon as the ventilation condition has improved. The deepening of the main shaft between 12 and 14 Levels has reached 8 metresbelow 13 level and is planned to extend below 15 Level to cater for futureproduction. JOHAN DIPPENAARCHIEF EXECUTIVE OFFICER Notes 1. The information in this update that relates to Exploration Results, MineralResources or Ore Reserves is based on information compiled by Jim Davidson, Pr.Sci Nat (reg No 400031/06), who is a Member of the Geological Society of SouthAfrica, a 'Recognised Overseas Professional Organisation' ('ROPO'), included ina list promulgated by the ASX from time to time. Jim Davidson is a full-timeemployee of the Company and has sufficient experience which is relevant to thestyle of mineralisation and type of deposit under consideration and to theactivity which he is undertaking to qualify as a Competent Person as defined inthe 2004 Edition of the 'Australasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves'. Jim Davidson has given his written consentto the inclusion in this announcement of the matters based on his information inthe form and context in which it appears. Jim Davidson is the Qualified Personfor the purposes of the AIM Guidance Note on Mining, Oil and Gas Companies datedMarch 2006 2. It should be noted that the potential quantity in this report is conceptualin nature, there has been insufficient exploration to define a Mineral Resourceand it is uncertain if further exploration will result in the determination of aMineral Resource. For further information, please contact: Cathy Malins / Annabel Leather Telephone: +44 (0) 20 7493 3713Parkgreen Communications, London Kevin Skinner Telephone: +61 (0) 8 8234 9555Field PR, Adelaide Mobile: +61 (0) 414 822 631 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 entityPetra Diamonds Limited ACN or ARBN Quarter ended ("current quarter") 114474574 30 September 2006 Consolidated statement of cash flows* Current quarter Year to dateCash flows related to operating activities US$'000 US$'000 3 Months1.1 Net loss before taxation (4,724) (4,724)1.2 Adjustments for: - Depreciation and amortisation 1,326 1,326 - Foreign exchange loss/(gain) 2,949 2,949 - Other non cash items 127 1271.3 Operating (loss)/profit before working capital changes (322) (322)1.4 (Increase)/Decrease in trade and other receivables (61) (61)1.5 (Decrease)/Increase in trade payables (701) (701)1.6 (Increase)/Decrease in inventories (774) (774) Cash (utilised)/generated in operations (1,858) (1,858)1.7 Interest paid (170) (170) Net Operating Cash Flows (2,028) (2,028) Cash flows related to investing activities 1.8 Payment for a) development expenditure (1,259) (1,259) b) property plant and equipment (607) (607)1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets - -1.10 Interest received 73 731.11 Other (60) (60) Net investing cash flows (1,853) (1,853) 1.12 Total operating and investing cash flows (carried forward) (3,881) (3,881) 1.12 Total operating and investing cash flows (brought (3,881) (3,881) forward) Cash flows related to financing activities 1.13 Proceeds from issue of shares - net of costs 1,745 1,7451.14 Proceeds from Joint Venture partner 783 7831.15 Proceeds from borrowings - -1.16 Repayment of borrowings (501) (501)1.17 Dividends paid1.18 Transaction deal costs Net financing cash flows 2,027 2,027Net (decrease) increase in cash held (1,854) (1,854)1.19 Cash at beginning of quarter/year to date 7,020 7,0201.20 Exchange rate adjustments to item 1.20 137 1371.21 Cash at end of quarter 5,303 5,303 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities Current quarter US$'000 1.22 Aggregate amount of payments to the parties included in item 1.1 N/A 1.23 Aggregate amount of loans to the parties included in item 1.17 N/A 1.24 Explanation necessary for an understanding of the transactions N/A 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 N/A 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 N/A Financing facilities available Add notes as necessary for an understanding of the position. Amount available Amount used US$'000 US$'0003.1 Loan facilities 1,375 6993.2 Credit standby arrangements Nil Nil Estimated cash outflows for next quarter US$'000 4.1 Exploration and evaluation 7804.2 Development 580 Total 1,360 Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) Current quarter Previous quarterto the related items in the accounts is as follows. US$'000 US$'000 5.1 Cash on hand and at bank 852 625.2 Deposits at call 5,150 7,2265.3 Bank overdraft (699) (268)5.4 Other (provide details) Total: cash at end of quarter (item 1.22) 5,303 7,020 Changes in interests in mining tenements Tenement Nature of interest Interest at Interest at reference (note (2)) beginning of end of quarter quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed N/A 6.2 Interests in mining tenements acquired or increased N/A 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 Number quoted Issue price per Amount paid up per security security (see note 3) (pence) (see note 3) (pence)7.1 Preference +securities (description)7.3 +Ordinary securities 150,491,764 150,491,764 - -7.4 Changes during quarter 1,666,666 1,666,666 (a) Increases through new issue - - (b) Decreases through returns of capital, buy-backs - - 7.5 +Convertible debt - - - - securities 7.6 Changes during quarter (a) Increases through issues (b) Decreases through conversion and repayment - - - - 7.7 Options (description and conversion factor - see details below) 6,646,375 - See below 7.8 Issued during quarter - - Various 7.9 Exercised during - - Various quarter 7.10 Expired during quarter - - Various Options 238,875 Employee Incentive Options expiring various dates, exercisable at $A1.12 each 72,500 Employee Incentive Options expiring various dates, exercisable at $A1.36 each 400,000 Director incentive Options expiring 11 April 2007 with exercise prices from 30p to 45p each 1,500,000 Director incentive Options expiring 5 September 2013 with exercise price of 44p each 2,000,000 Director incentive Options expiring 16 June 2015 with exercise price of 85p each 385,000 Employee incentive Options expiring 5 September 2013 with exercise price of 44p each 50,000 Employee incentive Options expiring 13 September 2014 with exercise price of 56.75p each 500,000 Employee incentive Options expiring 27 November 2015 with an exercise price of 65.75p 1,000,000 Director incentive Options expiring 31 May 2016 with an exercise price of 79.5p 500,000 Employee incentive Options expiring 31 May 2016 with an exercise price of 79.5p Warrants over ordinary shares Exercise Expiry Price 1,500,000 30p 31 December 2007 1,000,000 100p 31 December 2007 200,843 85p 17 June 2008 This information is provided by RNS The company news service from the London Stock Exchange