june 2018 quarterly activities report€¦ · infrastructure including the current relocation of a...

Newfield Resources Limited ASX:NWF ABN: 98 153 219 848 15 McCabe St North Fremantle WA 6159 T: +08 9389 8880 F: +08 9389 8890 E: [email protected]

ASX Announcement 31 July 2018

JUNE 2018 QUARTERLY ACTIVITIES REPORT

Newfield Resources (Newfield or the Company) advises of its activities during the June 2018 quarter.

1. Corporate

During the quarter the merger of Newfield and Stellar Diamonds plc (Stellar) was completed by way of a scheme of arrangement sanctioned by the High Court of Justice in England and Wales (Scheme). The Scheme involved the issue of some 95,500,000 Newfield shares to Stellar shareholders in consideration for 100% of the share capital and rights over shares of Stellar.

The projects acquired by the merger are situated in the major diamond producing areas of Sierra Leone and Liberia (Figure 1). The primary asset is the high-grade and high-value Tongo Diamond Project (Tongo Project). The Company also acquired a 90% interest in exploration licences situated in north-western Liberia, where high value diamonds and kimberlitic indicator mineral anomalies were delineated by previous exploration work.

A key aspect of the Scheme included the completion of an accompanying capital raising comprising:

A placement of A$10m by the issue of 50m Newfield shares at 20 cents each; and

An underwritten rights issue of A$30m by the issue of 200m Newfield shares at 15 cents each.

The purpose of this funding is primarily directed at the accelerated development of the Tongo Project.

Highlights

Completion of the merger with Stellar Diamonds plc

Commencement of a Front End Engineering & Design (FEED) program for Tongo

Commencement of a 9,000m mine development drilling program and associated Mineral Resource Update for Tongo

of 9

2. Tongo Diamond Project (Sierra Leone)

The Tongo Diamond Project combines the kimberlite dyke hosted historical Mineral Resources on adjacent Mining Licences in the Kenema District of Sierra Leone (Figure 2).

Front End Engineering and Design (FEED) Program

The FEED program for the Company’s flagship Tongo Project commenced in the March 2018 quarter and is being coordinated by independent consulting groups, Paradigm Project Management and SRK Consulting. The FEED will more precisely define the technical requirements of the Tongo Project and deliver an optimised underground mine design and treatment plant layout. This work will also refine the final capital expenditure estimate and operating cost budgets for the Tongo Project. The FEED program is on track for scheduled completion in the December 2018 quarter.

Figure 1: Newfield Resources’ diamond projects in West Africa

of 9

Figure 2: Map of the Tongo Mine Project

Activities completed to date include:

Drone surveys for detailed mapping of the planned mine layout were flown, and preliminary mine site, plant, office and accommodation layouts were prepared, based on the significant existing infrastructure which includes roads, offices, workshops, stores, accommodation and old plant site.

Design of the 50 tonnes per hour (tph) dense media separation (DMS) plant based on a second-hand plant acquired from Octea was completed. The plant will incorporate new scrubbing and crushing units, and a completely new recovery section, incorporating primary and secondary Debtech (De Beers) CDX118CD (dry feed) X-ray machines.

Geotechnical and geohydrological fieldwork was undertaken by SRK engineers, and preliminary selection of the underground portal sites for both the Kundu and Lando underground mines was done.

Commencement of Environmental monitoring and reporting

Stakeholder engagement and commencement of Community investment initiatives.

of 9

In addition, specific site activities included:

Upgrading of the gravel road between Mano Junction and the Tongo Project. This road is important to the logistical support for the mine, and travel time between the tarred road and the Tongo Project has been shortened from approximately 90 minutes to 35 minutes.

Refurbishment of a 5 tph DMS plant for bulk sampling work, and addition of a dual X-ray recovery system. This plant will be used for processing of existing bulk sample, as well as several thousand tonnes of uncontrolled kimberlite sample which is stockpiled at the Tongo Project. This material will be processed during the September 2018 quarter to deliver initial carats for updated Mineral Resource estimation, and to improve confidence in the diamond revenue model.

Dismantling and relocation of the 50 tph production plant from Kono to the Tongo Project is underway and is expected to be completed during the September 2018 quarter. Construction of the new plant will follow.

Detailed underground mine design will commence in the September 2018 quarter once the resource model has been updated.

Figure 3: Diamonds from the Tongo Project

of 9

Mine Development Drilling Campaign and Mineral Resource Update

Boart Longyear was appointed to undertake a 10,000 m mine development drilling program to complement the FEED. Drilling commenced in May 2018 and is expected to complete during July. This campaign is designed to more precisely delineate the geology and morphology of the Kundu, Lando and Tongo kimberlites (and associated country rock) within the first two levels of planned underground mining. This will facilitate more precise mine planning and thus assist in de-risking the initial phases of mining. The drill collars are at approximate 50 m intervals along the strike of the dykes, infilling previous Resource drilling work which was at 200 m intervals.

Independent geological consulting group, MPH Consulting of Canada (MPH), has been retained to update the Diamond Resource estimate for the Tongo Project. The additional geological information provided by the current drilling campaign is expected to bring some shallow portions of the previous Resource into the Indicated Resource category, and to bring some previous Exploration Target zones into the Inferred Resource category. The updated JORC-compliant Diamond Resource estimate is expected to completed in the December 2018 quarter, once an additional bulk sample has been completed and the diamonds recovered have been valued.

3. Allotropes Alluvial Diamond Project (Sierra Leone)

Rationalisation of the operational footprint continued and surrender of EL12/2014 was notified to the GoSL for execution before the licence anniversary in July 2018. Further relinquishments will be considered as the Company focuses its efforts within better delineated targets.

An extensive GPR survey was completed over selected dredge targets. Results of the survey are expected to be available in the September quarter 2018.

At Gboyieya, gravel extraction from the first of ten planned paddocks commenced, and the 10 tph DMS plant was relocated from Sumbuya. Commissioning of the plant is expected to be completed in the September 2018 quarter, after which it will be used to produce a gravel concentrate for X-ray recovery and sorting at Golu. Gravel extraction is being done using a dredge pump and classifier, which precludes the need for draining the bulk sample pits prior to gravel recovery, and greatly reduces the cost, and increases the security associated with the process.

of 9

Figure 4: Map of the Allotropes Alluvial Diamond Project

Infill auger drilling was completed at Tongiama, producing an Exploration Target of approximately 22,000 m2 of mostly undepleted river flat gravel adjacent to the Sewa River. The Exploration Target is expected to contain between 1,000 and 4,000 carats at an average value of between USD 160 per carat and USD 450 per carat. A decision on whether to bulk sample the target will be taken in due course.

Dredge sampling of the Sewa River in the Tongie area provided minimal results and the work was discontinued. Two dredges will be relocated to Kpatobu, adjacent to the current Gboyeiya sampling work.

4. Kumbgo Kimberlite Project (Liberia)

The Kumgbo kimberlite project comprises two exploration licences that cover a total of 670 square kilometres in the west of Liberia. The area has historically been known to yield large and high value diamonds from artisanal diamond diggings. A number of kimberlites are known in the area, mainly discovered in the 1970’s.

of 9

Figure 5: Historical sampling results from the Kumbgo Kimberlite Project in Liberia

The area remains relatively unexplored by modern methods, with the exception of some work conducted between 2005 through 2010, in which wide spaced reconnaissance stream sampling yielded significant numbers of kimberlitic ilmenite in areas of diamond diggings. This suggests the presence of, as yet, undiscovered kimberlites. These anomalies provide targets for further follow up work during the dry season.

of 9

Schedule of Tenements at 30 June 2018

PROJECT TENEMENT

NUMBER

TENEMENT NAME REGISTERED HOLDER(S) NEWFIELD'S

INTEREST

SIERRA LEONE

TONGO

KIMBERLITE MINE

APL752 Tongo Sierra Diamonds Limited 100%

ALLOTROPES

DIAMOND

PROJECT

EL15/2012 Baoma Allotropes Diamond Company Ltd 100%

EL/12/214 Sumbuya Allotropes Diamond Company Ltd 100%

EL19/2014 Hima Allotropes Diamond Company Ltd 100%

EL20/2014 Jomu Allotropes Diamond Company Ltd 100%

LIBERIA

KUMBGO

PROJECT

MEL1157/15 Kumgbo Stellar Diamonds (Liberia) Inc. 90%

MEL1158/14 Kumgbo Stellar Diamonds (Liberia) Inc. 90%

WESTERN AUSTRALIA

NEWFIELD GOLD

PROJECT

M77/0422 Newfield Newfield Resources Ltd 100%

M77/0846 Woongaring Hills Newfield Resources Ltd 100%

CREST YARD

GOLD PROJECT

P16/2722 Doyle Dam Newfield Resources Ltd 70%

Crest Metals Pty Ltd











of 9

For further details please contact: Anthony Ho Executive Director Newfield Resources E: [email protected] M: +61 422 862 829

About the Tongo Diamond Project The Tongo Diamond Project comprises two adjacent mining licences covering a combined area of 134 square kilometres in eastern Sierra Leone. These licences are subject to a tribute mining and revenue share agreement with Octea Mining. The key elements of these agreements are:

Consolidates two licences covering 11 diamondiferous kimberlites, only three of which have been established into resource

Certain plant and mining equipment acquired as part of the tribute mining agreement

Newfield to fund development of the project into production

In return Newfield investments are repaid from first revenues and US$5 million to Octea

10% revenue share to Octea after full project construction costs have been recovered

US$ 5.5 million bullet payment to Octea after Year-5

The Tongo Project consolidates 11 identified diamondiferous kimberlites, only three of which have been the subject of historic resource estimates by previous owners. It also benefits from considerable existing infrastructure including the current relocation of a 50 tph processing plant, an existing 5 tph bulk sample processing facility, certain mining vehicles and equipment, and significant associated building and camp facilities. Newfield is rapidly progressing a Front End Engineering Design (FEED) and mine development drilling program targeted at accelerated development of the Tongo Project to commence mining in 2019.

** ENDS **

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+ See chapter 19 for defined terms 1 September 2016 Page 1

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

Newfield Resources Limited

ABN Quarter ended (“current quarter”)

98 153 219 848 30 June 2018

Consolidated statement of cash flows Current quarter $A’000

Year to date (12 months)

$A’000

1. Cash flows from operating activities - 619 1.1 Receipts from customers

1.2 Payments for

(695) (2,729) (a) exploration & evaluation

(b) development (527) (527)

(c) production - -

(d) staff costs (837) (2,764)

(e) administration and corporate costs (466) (992)

1.3 Dividends received (see note 3) - -

1.4 Interest received 112 114

1.5 Interest and other costs of finance paid (1) (2)

1.6 Income taxes paid - -

1.7 Research and development refunds - -

1.8 Other (provide details if material) - 71

1.9 Net cash from / (used in) operating activities (2,414) (6,210)

2. Cash flows from investing activities

(66) (97)

2.1 Payments to acquire:

(a) property, plant and equipment

(b) tenements (see item 10) - -

(c) investments (9,881) (9,881)

(d) other non-current assets - -



Consolidated statement of cash flows Current quarter $A’000

Year to date (12 months)

$A’000

2.2 Proceeds from the disposal of:

- 5 (a) property, plant and equipment

(b) tenements (see item 10) - -

(c) investments - -

(d) other non-current assets - -

2.3 Cash flows from loans to other entities - (2,338)

2.4 Dividends received (see note 3) - -

2.5 Other (cash acquired on acquisition of subsidiary)

20 20

2.6 Net cash from / (used in) investing activities (9,927) (12,291)

3. Cash flows from financing activities 33,035 40,035 3.1 Proceeds from issues of shares

3.2 Proceeds from issue of convertible notes - -

3.3 Proceeds from exercise of share options - -

3.4 Transaction costs related to issues of shares, convertible notes or options

(371) (560)

3.5 Proceeds from borrowings - 30

3.6 Repayment of borrowings (9) (37)

3.7 Transaction costs related to loans and borrowings

- -

3.8 Dividends paid - -

3.9 Other (provide details if material) - -

3.10 Net cash from / (used in) financing activities 32,655 39,468

4. Net increase / (decrease) in cash and cash equivalents for the period

1,704

1,068

4.1 Cash and cash equivalents at beginning of period

4.2 Net cash from / (used in) operating activities (item 1.9 above)

(2,414) (6,210)

4.3 Net cash from / (used in) investing activities (item 2.6 above)

(9,927) (12,291)

4.4 Net cash from / (used in) financing activities (item 3.10 above)

32,655 39,468

4.5 Effect of movement in exchange rates on cash held

(7) (24)

4.6 Cash and cash equivalents at end of period 22,011 22,011



5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts

Current quarter $A’000

Previous quarter $A’000

5.1 Bank balances 15,011 1,704

5.2 Call deposits 7,000 -

5.3 Bank overdrafts - -

5.4 Other (provide details) - -

5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)

22,011 1,704

6. Payments to directors of the entity and their associates Current quarter $A'000

6.1 Aggregate amount of payments to these parties included in item 1.2 (96)

6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3

-

6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2

Directors’ remuneration (81)

Professional services (15)

7. Payments to related entities of the entity and their associates

Current quarter $A'000

7.1 Aggregate amount of payments to these parties included in item 1.2 -

7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3

-

7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

N/A



8. Financing facilities available Add notes as necessary for an understanding of the position

Total facility amount at quarter end

$A’000

Amount drawn at quarter end

$A’000

8.1 Loan facilities - -

8.2 Credit standby arrangements - -

8.3 Other (please specify) - -

8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

N/A

9. Estimated cash outflows for next quarter $A’000

9.1 Exploration and evaluation (600)

9.2 Development (3,190)

9.3 Production -

9.4 Staff costs (1,000)

9.5 Administration and corporate costs (300)

9.6 Other (purchase of property, plant and equipment) (805)

9.7 Total estimated cash outflows (5,895)

10. Changes in tenements (items 2.1(b) and 2.2(b) above)

Tenement reference and location

Nature of interest Interest at beginning of quarter

Interest at end of quarter

10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced

N/A

10.2 Interests in mining tenements and petroleum tenements acquired or increased

Sierra Leone APL752 Liberia

MEL1157/15 MEL1158/14

Diamond exploration

Diamond exploration Diamond exploration

- - -

100%

90% 90%



Compliance statement

1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

2 This statement gives a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 31 July 2018 (Company secretary)

Print name: Kim Hogg

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 that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

june 2018 quarterly activities report€¦ · infrastructure including the current relocation of a...

Documents