RNS Number:2262G
Finders Resources Limited
23 October 2007
Quarterly Activities Report For The Period Ended 30 September 2007
HIGHLIGHTS
Wetar Copper Project
* Preliminary design and capital cost estimate of test heap and pilot
completed.
* Estimated capital cost US$6.25m, including indirect costs
* Targeting production of 5t per day copper cathode from July 2008
* Laboratory test work confirms higher copper recoveries and faster
leaching rates at temperatures of 45-50degreesC.
* Amenability tests, using site bacteria, indicate 83% and 67% Cu
recovery from Kali Kuning and Lerokis respectively.
* Ongoing 2m column tests show up to 75% Cu recovery after 11 weeks
* First pass exploration in South Coast tenements returns significant assay
results from a 2km x 1km district around the Pantai Merah prospect.
Ojolali Gold-Silver Project
* Highly encouraging Au values have been obtained in soil and rock channel
samples from Belida, Kencur, Cugah and extensions to the Jambi prospect in
ongoing surface follow up to IP geophysical targets
* The new Reverse Circulation rig has landed in Indonesia, and will be
mobilized to site by early November to commence 5,000m of definition
drilling at Jambi oxide gold prospect, as well as initial drill testing of
the above newly defined oxide gold targets.
* Floatation test work on composites from the Tambang Ag-Zn vein system
resulted in 75-80% recovery of Ag, and 80% recovery of Zn into bulk and
zinc concentrates, but further testing will be required to produce saleable
concentrates:
Corporate
* On 28th September 2007, Trafigura Beheer BV ("Trafigura") and a wholly
owned subsidiary purchased 2,000,000m shares on the ASX market to become a
significant shareholder. Subsequent to the reporting date, Trafigura
purchased a further 700,000 shares on the market, bringing their holding to
approximately 4.12% of the Company's issued capital.
* 20,800 options were exercised at a price of 50c during the period. The
Company now has 65,595,836 fully paid shares on issue.
* Cash held at 30 September 2007 totalled A$3.4 million.
1. Wetar Copper Project, Indonesia
Finders Resources Limited 72% and earning through expenditure
Background Information
At the Wetar Copper Project, Finders has previously announced Measured,
Indicated and Inferred Resources at a 0.5% copper cut-off grade, of 9.8 million
tonnes at 2.5% copper for 248,000 tonnes contained copper in two deposits, Kali
Kuning and Lerokis.
For further information on results previously reported and a full resource
statement please visit our website www.findersresources.com
Leach Test Work
During the period, the Company received encouraging results from laboratory
scale test work being undertaken at HRL in Brisbane and Ammtec Ltd. in Perth
under the supervision of Bioheap Ltd. The test work is ongoing.
At HRL, using non-proprietary bacteria, two amenability tests were run over a 40
day period to assess copper recoveries at elevated (50degreesC) temperatures.
Copper recoveries of 83% and 67% were obtained from Kali Kuning and Lerokis
samples respectively. Two additional 2m column tests at elevated (45degreesC)
temperatures have now been running for 11 weeks with approximately 60% and 75%
copper recovery. Copper is still leaching into solution and the tests will
continue to run for a number weeks.
The copper recoveries from the high temperature columns occur at a faster rate
than previous leach tests undertaken at room temperature, e.g. for comparison an
earlier 2m column using Kali Kuning material had 40% Cu recovery after 11 weeks.
Tests to assess the permeability characteristics of the columns have been taken
at different crush sizes and flow rates. The columns perform exceptionally well
with little washing of fine material and remain stable at over 300 times the
normal irrigation rates.
Tests at Ammtec are underway with a series of 1m columns and two of
approximately 3m in height to assess the performance of Bioheap(TM) proprietary
bacteria. Bioheap(TM) have reported 30-40% Zn recovery in solutions thus far
which indicates that sphalerite is leaching preferentially. This is not
considered unusual, and copper leaching is expected to accelerate when zinc
leaching approaches completion. After 50 days the most advanced columns are
those with Kali Kuning material crushed at 6.5mm and 12mm sizes, these show
approximately 30-35% Cu recovery at this stage. In each of the columns, the
iron leaching rate continued to be very slow, indicating preferential leaching
of copper minerals and not pyrite.
Trial Heaps and Pilot Plant
The Company has completed preliminary cost estimates for the pilot plant phase
of the project and expects to complete detailed design of vendor specific
components of the SX-EW plant in order to place orders for within the next
month.
The initial cost estimate of approximately US$6.25m provides for the
construction of test heaps and associated infrastructure to permit the
installation of a pilot plant with 5t/day Cu cathode production capacity.
The main elements of the estimate which is based on indicative quotes and
current material prices in Indonesia is as follows:-
US $m
Capital Equipment 3.22
Infrastructure 1.09
EPCM & Owners costs 1.25
Contingency 0.69
Total 6.25
The design allows for the trial processing of up to 100,000 tonnes of ore from
the Kali Kuning pit. The initial phase of approximately 66,000 tonnes will
target run of the mine average grade material to optimise copper recovery using
three main parameters, varying crush size, heap height and heap temperature.
Once optimised there is flexibility to confirm the optimal parameters with
higher grade feed.
The pilot plant is expected to run for approximately 12-18 months after which
the Company will decide whether to use the equipment in the full scale operation
or transfer the plant to the zinc rich Lerokis deposit where further test work
of a similar tonnage would focus on optimising the zinc recovery circuit.
Feasibility Study
Much of the process design work being undertaken for the pilot study is directly
relevant to the design of the feasibility study.
In addition, preliminary designs for the commercial scale leach pads were
completed by SRK Consultants during the quarter and a further six SPT holes and
three geotechnical holes completed as part of the geotechnical study.
Topographic surveys have now also been completed of the entire project area.
Draft environmental impact studies are underway which have also included a site
visit by ERM to assist with social and community empowerment programs.
Exploration
The Company has completed the first phase of exploration in the tenements on the
southern coast of Wetar Island.
Pantai Merah Prospect
Within the Exploration KP surrounding the Pantai Merah prospect, detailed stream
mapping, float and outcrop sampling and stream geochemistry has been completed
over an area of 1,500 hectares (Appendix 1).
This work has successfully identified a tuff sequence with barite mineralisation
which appears to be a similar stratigraphic unit to that observed adjacent to
the gold-copper mineralisation at the Kali Kuning deposit.
This unit can be traced for 2km north of the Pantai Merah prospect providing a
greatly enlarged target area which is characterised by a thin cover sequence
(estimated to be a maximum of 50m thick) and strong stream geochemistry. Within
the expanded mineralised district, float assays from baritic rocks are
frequently greater than 1 g/t Au and reach a maximum of 16 g/t Au.
Grids are currently being prepared with view to conducting electromagnetic (EM)
surveys. EM surveys are designed to explore for sulphide conductors, which in
the context of the stratigraphy on Wetar, would help explore for intact
gold-copper systems in the Pantai Merah district, similar to those at Kali
Kuning and Lerokis.
Regional Exploration
Regional stream sediment and float sampling has been completed within a 20,000
hectare area covering the General Survey tenements surrounding the known Bati
Duri (J91) and Ilwaki (W6) prospects. Both these prospects have had previous
scout drilling with significant gold, silver and copper intersects.
Four new areas have been identified for more advanced exploration (Appendix 2):
* Upper Arnau: 2.5km NE of Batu Duri with strong stream geochemistry and
float recording assays of 4.3 g/t Au and 140 g/t Ag
* Lawair: Strong steam geochemistry and baritic rock floats with assays
of up to 8 g/t Au, also significant base metal anomalism with float
assaying up to 0.3% Cu and 1.25% Zn
* Lasi: Strong geochemistry in a drainage 1km east of the Ilwaki prospect.
* Dirkuun: Similar geochemical signature to the known prospects.
Both the Upper Arnau and Lasi areas may represent previously unknown lateral
extensions to the known mineralisation systems at Batu Duri and Ilwaki,
respectively.
2. Ojolai Project, Indonesia
Finders Resources Limited 72% with option
Background Information
At the Ojolali Project, Finders has previously announced Inferred Resources at
the Jambi Oxide gold deposit (3.2 Mt @ 1.0 g/t Au, 6.9 g/t Ag at a 0.5 g/t Au
cut-off, and including mining dilution) and Inferred Resources at the Tambang
Prospect (7.9 Mt @ 167g/t Ag and 0.7 g/t Au at a 1 g/t Au equivalent cut-off
using drilling data from a previous explorer).
Finders believes that the Ojolali project has strong potential to generate
short-term cash flow through open pit CIL/CIP development of the gold resource
at the Jambi Oxide gold deposit. Other prospects have outstanding potential for
the discovery of additional resources using modern geophysical techniques to
optimize drill targeting.
For further information on results previously reported and a full resource
statement please visit our website www.findersresources.com
Prospect Evaluation
Geophysical Surveys
To better define structural controls for the vein systems a program of
approximately 15 sq. km of detailed (50m x10m) ground magnetics has been
implemented, of which about 7.5 sq. km or 150 line km has been completed to
date. Preliminary results show a good correlation between known structures and
zones of de-magnetization.
Soils and Channel Sampling
A major program of auger soil geochemistry has been implemented to assist in
ranking IP geophysical targets, supported by channel sampling of available
outcrops and local miner workings. To date 1330 composite soil samples and 600
channel samples have been collected, with assays currently received for about
60% of the total samples.
This preliminary data shows strong soil anomalies associated with the Way Umpu,
Kencur, Belida and Jambi extended and Cugah targets, supported by significant
clusters of channel sample results in the 1 to 10 g/t Au range (Appendix 3.)
Drilling
No drilling activities were undertaken during the quarter, awaiting mobilization
of a new track mounted multipurpose drilling rig from Korea. This rig is now in
customs in Jakarta, and mobilization to site should be completed by the first
week in November
The planned drilling program for the 4th quarter includes 5,000m of reverse
circulation drilling for resource definition at the Jambi oxide deposit, plus an
additional 2,000m of reverse circulation drilling as initial follow up of
geophysical/geochemical targets on the Way Umpu, Kencur, Belida and Cugah
prospects.
Tambang Metallurgy
A report outlining the results of the first phase of metallurgical results from
the Tambang deposit has been received from G & T Metallurgical Services, Canada.
The G&T report assessed the preliminary flotation performance of two Tambang
polymetallic sulphide composites prepared from drill core intervals from 3 drill
holes. The two composites represent silver-rich (Mo1) and zinc-rich (Mo2)
samples of the Tambang deposit. Target products were a bulk silver-lead cleaner
concentrate and separate zinc cleaner concentrate.
A range of metal recoveries were observed from the test work.
In rougher test work, 70-80% of the silver reported to a rougher bulk
concentrate and 60-80% of the zinc reported to the rougher zinc concentrates.
In the cleaner circuit tests, between 60-70% of the silver in both composites
was recovered into a low quality bulk concentrate with high copper and low lead
grades; these concentrates assayed about 2500 g/t Ag for the M01 composite and
4000 g/t Ag for the M02 composite. The zinc circuit produced a cleaner
concentrate that recovered between 70-75% of the zinc. The concentrate produced
from M01 and M02 assayed about 50 and 60 percent zinc respectively. Elevated
levels of arsenic, antimony, cadmium and bismuth in these concentrates could
affect their saleablility.
In summary, a two-product flotation flowsheet for the Tambang material produces:
* a low quality bulk concentrate with significant silver grades as a
result of the presence of copper sulphides and relatively poor sulphide
liberation characteristics at the test grind size (P80/95um).
* A moderate grade zinc concentrate with elevated silver, antimony, arsenic
and cadmium.
A significant program of additional test work and flowsheet development work is
required in order to confirm whether three separate marketable concentrates can
be produced for a three-product flotation flowsheet. This program would include
a copper-lead separation stage, individual copper, lead and zinc flotation
stages and finer grinding.
The next stage of work at Tambang will also include a definitive mineralogical
evaluation of the silver mineralogy and an assessment of alternative processes
available to win the silver from the bulk concentrate.
3. Corporate
Following the on-market purchase of 2,000,000 ordinary shares at a price of 80c
on the Australian Stock Exchange ("ASX") on 26th September 2007, and a
subsequent purchase of 700,000 ordinary shares at a price of 87c on the 8th
October 2007, the Company is pleased to welcome Trafigura Beheer B.V. as a new
significant shareholder holding approximately 4.12% of the issued Ordinary Share
capital of the Company.
Entity No. of shares held
Trafigura Beheer B.V. 1,700,000
Galena Asset Management - Special Situations Fund* 1,000,000
* Note: a wholly owned subsidiary of Trafigura
On 27th September 2007, 20,800 options were exercised at a price of 50c,
resulting in the following change to the capital structure of the Company:
Type of Security Exercise Price Expiry Date Number in Issue
Fully Paid Ordinary Shares 65,595,836
Options
A$0.50 20 March 2009 3,181,067
24p 22 March 2009 1,322,881
A$0.6875 13 June 2010 500,000
5,003,948
The Company's cash held at 30 June 2007 totalled A$3.4 million. The mining
exploration entity quarterly report (Appendix 5b) is appended.
Chris Farmer
Managing Director
Further details for all projects including location maps, tenement schedules and
technical descriptions may be found on the Finders website at
www.findersresources.com
4. Statements from Finders
The Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves (the 'JORC Code') sets out minimum standards, recommendations
and guidelines for Public Reporting in Australasia of Exploration Results,
Mineral Resources and Ore Reserves. The information contained in this
announcement has been presented in accordance with the JORC Code and references
to "Indicated" and "Inferred Resources" are to those terms as defined in the
JORC Code.
Geological information in this announcement is based on information compiled by
Dr R Fountain who is a Fellow of the Australasian Institute of Geoscientists and
a Director of Finders. Dr Fountain has sufficient experience that is relevant to
the styles of mineralisation and types of deposits under consideration and to
the activity that he is undertaking to qualify as Competent Person as defined in
the JORC Code. He consents to the inclusion in this announcement of the matters
based on his information in the form and context in which they appear.
All assaying of Ojolali samples was undertaken by the ITS laboratory in Jakarta.
ITS is one of the world's largest product and commodity testing, inspection and
certification organizations. The Jakarta laboratory is ISO 17025 accredited and
employs a Laboratory Information Management System (LIMS) for sample tracking,
quality control and reporting.
Statements in this document that are forward-looking and involve numerous risks
and uncertainties that could cause actual results to differ materially from
expected results are based on the Company's current beliefs and assumptions
regarding a large number of factors affecting its business. Actual results may
differ materially from expected results. There can be no assurance that (i) the
Company has correctly measured or identified all of the factors affecting its
business or the extent of their likely impact, (ii) the publicly available
information with respect to these factors on which the Company's analysis is
based is complete or accurate, (iii) the Company's analysis is correct or (iv)
the Company's strategy, which is based in part on this analysis, will be
successful.
23rd October 2007
For further information please contact:
Finders Resources Ltd:
Russell Fountain, Executive Chairman, +61 (0) 2 9211 8299
Chris Farmer, Managing Director, cbf@findersresources.com
Financial PR:
Doug Macdonald, +61 (0) 424 255 959, Capital Group (in Australia)
Paddy Blewer or Nick Elwes, 020 7457 2020, College Hill (in the UK)
RFC Corporate Finance Ltd - Nomad and Corporate Adviser:
Rob Adamson, +61 (0) 2 9250 0000 or Stuart Laing, + 61 (0) 8 9480 2500
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Name of entity
FINDERS RESOURCES LIMITED
ABN Quarter ended ("current quarter")
82 108 547 413 30 SEPTEMBER 2007
Consolidated statement of cash flows
Current quarter Year to date
(.3.months)
Cash flows related to operating activities $A'000
$A'000
1.1 Receipts from product sales and related debtors
1.2 Payments for (a) exploration and evaluation (1,078) (1,078)
(b) development
(c) production
(d) administration (663) (663)
1.3 Dividends received
1.4 Interest and other items of a similar nature 78 78
received
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other (provide details if material)
(1,663) (1,663)
Net Operating Cash Flows
Cash flows related to investing activities
1.8 Payment for purchases of: (a)prospects
(b)equity investments
(c) other fixed assets
(5) (5)
1.9 Proceeds from sale of: (a)prospects
(b)equity investments
(c)other fixed assets
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (provide details if material)
(5) (5)
Net investing cash flows
1.13 Total operating and investing cash flows (carried (1,668) (1,668)
forward)
1.13 Total operating and investing cash flows (brought (1,668) (1,668)
forward)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 10 10
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 10 10
Net increase (decrease) in cash held (1,658) (1,658)
1.20 Cash at beginning of quarter/year to date 5,157 5,157
1.21 Exchange rate adjustments to item 1.20 (70) (70)
1.22 Cash at end of quarter 3,429 3,429
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
Current quarter
$A'000
1.23 Aggregate amount of payments to the parties included in item 1.2 174
NIL
1.24 Aggregate amount of loans to the parties included in item 1.10
1.25 Explanation necessary for an understanding of the transactions
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
NONE
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
NONE
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 NIL NIL
3.2 Credit standby arrangements NIL NIL
Estimated cash outflows for next quarter
$A'000
4.1 Exploration and evaluation 1,825
4.2 Development NIL
Total 1,825
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as Current quarter Previous quarter
shown in the consolidated statement of cash flows) $A'000 $A'000
to the related items in the accounts is as follows.
5.1 Cash on hand and at bank 3,429 5,157
5.2 Deposits at call
5.3 Bank overdraft
5.4 Other (provide details)
Total: cash at end of quarter (item 1.22) 3,429 5,157
Changes in interests in mining tenements
Tenement Nature of interest Interest at Interest at
reference beginning of end of
(note (2)) quarter quarter
6.1 Interests in mining No tenements disposal or
tenements relinquished, reduction
reduced or lapsed
6.2 Interests in mining No tenements disposal or
tenements acquired or reduction
increased
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights
together with prices and dates.
Total number Number quoted Issue price per Amount paid up per
security (see note security (see note 3)
3) (cents) (cents)
7.1 Preference N/A
+securities
(description)
7.2 Changes during N/A
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital,
buy-backs,
redemptions
7.3 +Ordinary
securities 65,595,836 47,458,257
7.4 Changes during
quarter
(a) Increases
through issues NIL -
(b) Decreases
through returns
of capital, NIL
buy-backs
7.5 +Convertible debt N/A
securities
(description)
7.6 Changes during N/A
quarter
(a) Increases
through issues
(b) Decreases
through
securities
matured,
converted
7.7 Options Exercise price Expiry date
(description and
conversion 3,181,067 NIL 50c 20.03.2009
factor) 1,322,881 NIL 24p 22.03.2009
500,000 NIL 68.75c 13.06.2010
7.8 Issued during NIL NIL
quarter
7.9 Exercised during NIL NIL
quarter
7.10 Expired during NIL NIL
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
with accounting standards as defined in the Corporations Act or other
standards acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: ............................................................ Date: ....23...October..2007........
(Director/Company secretary)
Print name: ....Christopher Ben Farmer...........................
Notes
1 The quarterly report provides a basis for informing the market how the
entity's activities have been financed for the past quarter and the effect
on its cash position. An entity wanting to disclose additional information
is encouraged to do so, in a note or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of
interests in mining tenements acquired, exercised or lapsed during the
reporting period. If the entity is involved in a joint venture agreement
and there are conditions precedent which will change its percentage interest
in a mining tenement, it should disclose the change of percentage interest
and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not
required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive
Industries and AASB 1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International
Accounting Standards for foreign entities. If the standards used do not
address a topic, the Australian standard on that topic (if any) must be
complied with.
This information is provided by RNS
The company news service from the London Stock Exchange
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