Financial Statements December 2011
Sydney, Mar 13, 2012 AEST (ABN Newswire) - Carpentaria Exploration (
ASX:CAP) provide the financial statments for the half-year ended 31 December 2011
REVIEW OF OPERATIONS
Exploration
Upgrading the Hawsons pre-feasibility study through optimising the potential mining procedures has added value to the project. Additional projects have been added to the pipeline and drilling commenced on the Koonenberry nickel project.
A preliminary concept study has also shown that the Yanco Glen tungsten resource could provide short term cash flow.
Hawsons Iron Project
The results of a pre-feasibility study (PFS) were released to the ASX on 23rd May 2011 with an NPV at 9% of $2.7 billion on production of 5 million tonnes of concentrate per annum start up and then 20 million tonne per annum.
An independent due diligence review of the PFS was completed this half-year and concluded that the PFS has been conducted based on data and cost estimates that are reasonable and appropriate for a PFS and that mining and process methods are conventional and consistent with modern practice. The review identified issues to be prioritised during the early phases of the detailed feasibility study (DFS), including increasing the resource base and further optimising the production schedule.
A mining option study was commissioned and showed a significant rise in the estimated net present value (NPV 9%) of the project to $3.2 billion. The increase was based on modelling of revised production schedules, reduced stockpiles and in-pit crushing and conveying, which together significantly reduced mining cost estimates compared to previous studies.
Mining cost estimates of $15.04 per tonne (t) concentrate in the latest study is down 23% over the PFS, contributing to a 5% fall in operating costs to $33.97/t concentrate at the mine gate and an improvement in the internal rate of return (IRR) to 23%.
The PFS evaluated a 20 million tonne per annum (mtpa) concentrate production option with a three year, 5 mtpa startup period. This and all other assumptions were unchanged.
Under the terms of the joint venture (JV) with Bonython Metal Group (BMG), at completion of the PFS BMG may elect to pay A$25m cash to Carpentaria and undertake sole funding of the DFS, in order to immediately increase its equity from 40% to 51% of the project. The DFS is expected to cost approximately A$20m. Should BMG not progress to 51% by 15 May 2012, BMG's share of the project may be acquired for $13 million. BMG is currently in an internal court dispute the elements of which are described later in this report.
Braemar JV (CAP earning in)
Carpentaria has strengthened its position as a leading tenement holder in the magnetite rich, Braemar Iron Province, completing a joint venture agreement with Maosen Australia Pty Ltd, executed on 4th January 2012, giving CAP opportunity to earn a 100% interest in EL3998, located along the highly prospective Braemar Iron Formation. tenement, which is contiguous to Carpentaria's South Dam JV, covers over 20 line kms of Braemar Iron Formation which hosts Carpentaria's flagship $3.2 billion Hawsons Iron Project to the east in NSW. The deal elements are reported below.
The EL hosts over 20km of Braemar Iron Formation, of which 10km is exposed at surface. The Braemar Formation in the Braemar JV links with that formation known to be in the adjacent South Dam JV, giving Carpentaria interests in 30km of strike length of geology highly prospective for magnetite iron ore resource analogous to those already known along the Braemar Iron Province including Hawsons, Razorback Ridge, Maldorky and Muster Dam.
Koonenberry
During the half-year, Carpentaria commenced a 1,500m reverse circulation drill program. A total of 523m was completed in three holes in the Mt Arrowsmith area before a comprehensive drill rig breakdown suspended drilling until January 2012. No results have been received for the drilling to date. A further 8 holes were planned.
Broken Hill Tin and Tungsten/Base Metal Project (100% CAP)
During the half-year, exploration continued at Yanco Glen, and two new licence applications were made consistent with the strategy of securing outcropping mineralisation that enables rapid and low cost assessment. Carpentaria has added the Kantappa and Corona Exploration Licence Applications to this project area.
At Yanco Glen, surface reconnaissance sampling and resampling of historical drill core from the known resource at Yanco Glen were sent for analysis. Results are awaited. In addition, preliminary results of a mining option study demonstrated that the known resource at Yanco Glen has potential for open pit mining subject to metallurgical characteristics.
A 1,500 metre RC drill program has been designed to confirm and extend the existing resource. Land access and environmental approvals have been granted and this program is scheduled for next year.
Temora Project (100% CAP) - Gold - Copper
Ministerial consent under the Native Title Act was granted to allow access to Crown Land at the Mother Shipton Prospect in June 2011. However, attempts to enter into an access agreement with the NSW Department of Lands, which is responsible for administering the block of land on which Carpentaria wishes to drill at Mother Shipton, have not progressed. Upon receipt of approvals, detailed work will commence with drill testing of porphyry or related Au-Cu mineralisation beneath an historic gold field and anomalous weathered bedrock geochemistry defined by previous explorers.
McDougalls/Torrowangee - (100% CAP) - Iron Ore Project
Over 90 hematite targets have been checked on the McDougalls EL but unfortunately no high value iron prospects were located that could have been of value as a direct shipping ore.
The Torrowangee licence was granted and covers similar Neo-Proterozoic sediments to the rest of the McDougalls project, which correlate to the strata hosting the Hawsons Magnetite Project. A high amplitude magnetic anomaly and historic drill hole PD81YA2 indicated potential for magnetite mineralisation in this.
Land access and environmental approvals have been received to redrill PD81YA2, which contained significant magnetite mineralisation over 40m, based on magnetic susceptibility. This will be drill tested next year to establish its true magnetite iron potential.
Barellen (100% CAP)
A new application called Barellen has been made based on known surface gold occurrences on open ground in the highly prospective Lachlan Fold Belt. The occurrence is hosted by stock work quartz veining in an interpreted granite roof zone. This highly prospective geological setting is similar to that of the major tin occurrences at Ardlethan 20km to the east.
In the 1980s Aberfoyle generated a surface trench rock traverse result of 60m at 1.5g/t Au (incl. 10m at 4.5 g/t Au) within a 400m x 100m, plus 50ppb weathered bedrock gold anomaly. This very encouraging surface result is inadequately tested by drilling. A single, misdirected drill hole intersected 12m at 0.43g/t from 48m. The grant of the licence is expected in the first half of the 2012 calendar year.
Hughenden Coal Project
The Hughenden Coal Project, located in the northern Galilee Basin, Queensland, and centred on the town of Hughenden, includes 11,000 km2 of granted tenure. The project consists of tenements owned by FTB (formerly a wholly owned subsidiary of Carpentaria) which form part of a bigger project owned and managed by Guildford Coal Ltd in the area. During the half-year Carpentaria realised the value by selling its 20% stake in FTB to majority owner Guildford Coal Ltd. Carpentaria had been contributing pro-rata funding to exploration activities.
Total consideration for the sale comprised $1.5 million cash, 2.2 million shares (approx. $2.5 million) and retention of a $0.50 per tonne royalty on coal production from the tenements, capped at 10 million tonnes per year for 20 years with a potential royalty value of up to $100m.
Glen Isla (100% CAP) - Gold
During the half-year, Ramelius Resources Ltd formally withdrew from the JV following the disappointing drill results.
The licence has now reverted to 100% Carpentaria, and divestment is being actively pursued.
South Dam (BMG earning in)
No field work was reported by our JV partners this half-year.
Mount Agate - Copper, Gold (ActivEX earning 75%)
Exploration by our JV partner is targeting Ernest Henry style copper gold. During the half-year soil sampling, geological mapping and rock chip sampling were undertaken. The results were encouraging. Rock chip sampling from the newly located breccia zones returned values of up to 0.5 g/t gold and 6% copper. Analysis of this data will continue and drill targets will be prioritised.
For the full financial report including all data, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-CAP-240449.pdf
About Carpentaria Resources Ltd
Carpentaria Resources Ltd (ASX:CAP) is focussed on delivering the best quality iron concentrates into the growing premium end of the iron ore market.
The Company aims to build a long term, low cost premium quality iron ore business from the development of its flagship asset, the Hawsons Iron Project, utilising existing infrastructure.
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