Bauxite Resources Limited (ASX:BAU) Quarterly Report For The Period Ending 30 September 2009
Perth, Nov 2, 2009 AEST (ABN Newswire) - Bauxite Resources Limited (ASX:BAU)(PINK:BXRDF) is pleased to present its September 2009 quarterly activities report.
MINING COMMENCED IN THE NORTH DARLING RANGE PROJECT AREA
Mining operations commenced on 6 August 2009, with the first load of bauxite fed through the crushing and processing plant following the grant of an Extractive Industries Licence (EIL) and Project Mine Plan (PMP) for the North Bindoon bauxite mine. The initial EIL is for the extraction of 130,000 tonnes of bauxite ore and the construction of a haul road from the mine site to the main access road.
DSO PROJECT CONTINUES TO ADVANCE
The Company continues to advance its business case of defining an economic >30 Million tonne (Mt) bauxite resource as Stage I necessary to support a >3Mt per annum Direct Shipping Ore (DSO) bauxite operation to take advantage of cost savings attributed to economies of scale. It is envisaged this will come from a series of pits throughout the Company's North Darling Range tenements. During the year China has emerged as the principal potential market buyer of bauxite ore. China is estimated to run out of bauxite in nine years and has defied the global economic downturn with government fuelled investments that have generated an enviable reported 7% GDP growth.
REFINERY AND PLACEMENT MOU WITH YANKUANG GROUP CORPORATION LTD (YANKUANG)
Following on from the MOU signed in June 2009, Yankuang have signed a further non-binding MOU summarised as follows:
- 50/50 Joint Venture for the development of an alumina refinery situated in the Darling Range.
- Yankuang to fund 75% of the total refinery construction costs.
- BRL to have a 25% free carried interest.
- BRL and Yankuang to fund the bauxite exploration on a 51/49 basis respectively, to prove up a 150Mt bauxite resource necessary to support an alumina refinery.
- BRL to manage the exploration, processing and operations of bauxite.
- BRL to commit funding for the BFS of the refinery.
- BRL and Yankuang to supply the bauxite to the refinery on a 51/49 cost plus 15% basis; BRL to operate the refinery.
EXTENDED TENEMENT HOLDINGS THROUGH THE DARLING RANGE NOW TOTALLING OVER 16,800KM2
BRL's Darling Range tenements now cover 16,800km2, totalling 85 tenement applications of which four have been granted. The Exploration Program has grown significantly in the South Darling Range and East Darling Range Project areas.
BRL's on-going mapping program was extended into the large block of tenements and application areas in the North Darling Range area. The drilling program has continued to focus on proving up resource definition for inaugural mining.
BAUXITE MARKETING - TRIAL REFINERY SAMPLE SPOT SHIPMENTS
BRL's marketing team continue to source potential buyers for bauxite ore and have a customer committed for the first three trial spot sample shipments. These are due for shipment in the fourth quarter and will help establish BRL as a credible source of bauxite supply. These trial shipments will also give the customer base in China sizable samples for testing to demonstrate the characteristics of premium Darling Range bauxite with its very low reactive silica and low boehmite translating to substantial refinery operating cost savings.
The third quarter was an extremely busy time for BRL in the North Darling Range Project Bindoon area. BRL's first EIL was passed by the Chittering Shire Council and August saw the first ground being broken on site, closely followed by the construction of the haul road to the Great Northern Highway.
The quarrying contractor mobilised equipment to site in August to construct the haul road and commenced quarrying operations, equipment mobilized included, track dozers, front end loaders, excavators, graders, dump trucks, water tankers and the contractors mobile gravel crusher and screening plant.
Primary focus for the quarter has been the construction of the haul road to the Great Northern Highway, construction was hampered due to unseasonal late rainfall slowing the progress, however the road was constructed allowing road haulage access to the quarry site.
Approvals granted in the quarter included the Refuelling Management Plan, Fire Management Plan, Project Management Plan, Safety Management Plan and Storm Water Management Plan, in addition to this permission from the Main Roads department for the haulage route from the quarry to the rail siding.
Planning for stage 2 EIL was a focus in this quarter, with spring flora and fauna surveys conducted. The EIL has been formulated using the above plans as templates; Stage 2 EIL will be submitted to the Shire of Chittering early in the next quarter.
The Extractive Industries Licence (EIL) was passed by the Shire of Chittering which allowed the quarrying operations to commence, topsoil and overburden removal/stockpiling commenced and overburden was removed to expose the ore body enabling detailed sampling and mine planning of the ore body prior to crushing and screening operations.
A rail agreement was signed with WNR and subsequently the rail siding pad and access road into the siding was constructed ready for bauxite stockpiling.
All infrastructure and processes are in place to allow for road haulage, rail operations and port handling to commence at the start of the next quarter.
CORPORATE SUMMARY
Capital Raised Exercise of Options
During the September quarter the Company raised A$170,000 the exercise of 605,000 options at 25/30c.
Cash Position and Issued Capital
The Company's issued capital increased by the above conversion of options. The cash position as at 30 September 2009 decreased over last quarter as a result of the operating, administration and capital expenditure. At 30 September 2009 BRL had A$14.5 million cash at bank and 152,043,228 shares on issue.
The company announced during the quarter a placement of 60 million shares at 95 cents each. The proposed placement was approved by shareholders on 26th October and the funds are expected to be received on 30th October.
Share Price and Market Capitalisation
During the quarter the Managing Director and CFO conducted a series of marketing presentations in Melbourne and Sydney to large institutional investors and fund managers. The marketing presentations were a resounding success and the share price improved significantly as a result of the increased investor interest and higher profile of the company. Following the presentations the Board resolved to raise capital and place 60 million shares at 95 cents each to raise A$57 million. The funds will be applied towards mining, rail and port improvements to reduce cash operating costs and to improve mining and shipping capacity. Part of the funds will also be used for the Bankable Feasibility Study into a proposed alumina refinery in the south west of Western Australia.
The Company's share price has firmed from 40 cents at 30 June 2009 to around its current level of approximately A$1.05. The market capitalisation has increased substantially from A$60 million at 30 June 2009 to around A$160 million as a result of the improved share price.
For the complete Bauxite Resources Quarterly Report for the period ending 30 September 2009, please click the link below:
http://www.abnnewswire.net/media/en/docs/61691-ASX-BAU-467430.pdf
About Bauxite Resources Limited
Bauxite Resources (ASX:BAU) (OTCMKTS:BXRDF) was established with a substantial tenement holding in Western Australia to develop new bauxite supply for the global alumina/aluminium industry. The Company listed on the Australian Securities Exchange (ASX) in October 2007.
The Darling Range in the south-west of Western Australia (WA) is the world's largest bauxite mining and alumina refining region producing around 20% of the world's alumina. This area has mined bauxite and refined alumina since the 1960s. These industries are leaders in sustainable resource development and represent the fifth largest sector of WA's resource industry.
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