25 January 2012
QUARTERLY ACTIVITIES REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2011
St George Mining Limited (ASX: SGQ) ("St George Mining"), a
gold and nickel focused exploration company, presents its
Quarterly Activities Report for the period ended 31 December
2011:
EAST LAVERTON PROPERTY
GOLD EXPLORATION - ACTIVITIES
Overview
During the quarter, St George Mining completed the 2011 gold
exploration programme for its 100% owned East
Laverton Property, a dominant regional landholding of over
1,800 sq km on the eastern edge of the North Eastern
Goldfields of Western Australia.
The East Laverton Property includes the southern extension of
the nickel-rich Duketon Belt and is also in proximity to
major recent gold discoveries by the Tropicana Joint Venture
(6+ MozAu) and by Gold Road Resources Limited (ASX: GOR) at
its Yamarna Gold Project.
Exploration during the 2011 field season, from August to
December 2011, involved a large multi-phase exploration
programme at East Laverton focused on:
(i) drill testing the high priority gold prospects at Desert
Dragon and Balmoral;
(ii) completing an airborne magnetic survey covering the Red
Dragon and Balmoral prospects; and
(iii) extending the MMI multi element soil sampling programme
to include some areas located along the extension of known
gold trends, including the Golden Dragon area (north of Red
Dragon).
Drilling
A total of 30 drill holes were completed during the 2011
drill programme. Of these holes, 9 were aircore drill holes
and the remainder were deeper RC drill holes. 22 holes
(comprising 2,062m of drilling) tested the Desert Dragon
prospect and 8 holes (a total of 637m of drilling) were
drilled at the Balmoral prospect.
Drilling intersected significant lengths of altered intervals
with disseminated sulphide mineralisation towards the base of
the holes. Our technical team has noted that this kind of
mineralisation and alteration is often an indicator of gold
mineralisation in the Laverton region.
Preliminary drill results were received and
reported by the Company in its ASX Release dated
14
November 2011. All remaining drill samples were delivered to
SGS Australia during November/December
2011 and assay results are expected from SGS Australia
shortly. There have been ongoing delays in the completion of
assay results from the laboratory due to a backlog of samples
having being sent to the laboratory by numerous mining
companies.
The drilling campaign was suspended in December 2011 due to
adverse ground conditions following heavy rains at site.
1
Airborne Magnetic Survey
A detailed airborne magnetic survey covering the Red Dragon
and Balmoral gold prospects was completed by Fugro Airborne
Surveys during the quarter. Approximately 4,800 kilometres
were flown as part of this survey. Survey data is currently
being processed and modelled.
The survey will supplement the Company's existing geophysical
database and will assist in developing new drill targets
ahead of the 2012 field season.
MMI Programme
The MMI programme primarily focused on the Golden Dragon area
(north of Red Dragon), a newly acquired tenement area where
no modern gold exploration has been conducted. A zone of
anomalous gold was detected in the Golden Dragon area, at the
edge of the previous MMI soil sampling programme conducted by
the Company at Red Dragon.
The other MMI soil geochemical surveys conducted during 2011
have focused on areas that are located along the extension of
the known Desert Dragon gold trend. Assay results for the MMI
geochemical surveys are expected to be received from SGS
Australia shortly. Again, there have been delays in receiving
assay results from the laboratory.
NICKEL EXPLORATION - PROJECT DRAGON
St George Mining, through its wholly own subsidiary Desert
Fox Resources Pty Ltd, has entered into a Farm-in Agreement
with BHP Billiton Nickel West Pty Ltd ("Nickel West") in
regard to the nickel rights at certain of the tenements at
the East Laverton Property.
Activities during Q4 2011 comprised:
• Completed site archaeological and ethnographical surveys;
• Completed a desktop botanical review;
• Planned a comprehensive RC program to test 8 high-ranked Prospects across the Farmin tenure;
• Program of Work (PoW) approval was received for ~25% of the planned RC program;
• Program of Work (PoW) application was submitted for the remaining ~75% of the planned RC
program; and,
• Site reconnaissance completed.
Proposed activities for Q1 2012 include:
• Site specific botanical surveys to be undertaken;
• Receive PoW approval for the remaining ~75% of the planned RC program;
• Complete all earthworks and site preparation for the drill program; and
• Commence the RC drill program late-Q1/early-Q2 2012.
Under the Farm-in Agreement, Nickel West will have the right to earn up to a 70% interest in the nickel rights by sole funding a bankable feasibility study. Further details on the Project Dragon farm-in arrangement are contained in the ASX Release dated 6 April 2011 issued by St George Mining and on our website at www.stgm.com.au/project-dragon .
2
EAST LAVERTON TENEMENTS
St George Mining has 100% ownership of 24 tenements at the
East Laverton Property. Of these, 23 are granted Exploration
Licences and 1 is an application for Exploration Licence.
During the quarter, St George Mining applied for E39/1677 and
E39/1678. These tenements are in the
Lake Minigwal area and in proximity to the East Laverton
Property.
PINE CREEK PROPERTY
EXPLORATION ACTIVITIES - PINE CREEK
Overview
The Company completed a multi-phase exploration programme at
Pine Creek during the quarter.
A combination of orientated diamond drilling and a
multi-element MMI soil geochemical survey have been completed
with the intention of:
• Confirming the high grade mineralisation detected in the
existing discovery hole (FEND18);
• Gaining a better understanding on the local orientation of
the gold mineralisation; and,
• Testing for vertical and lateral extensions from the higher
grade zone (FEND18).
The previous explorer at the Pine Creek Property, Homestake
Gold of Australia Limited ("HGAL"), carried out a successful
regional diamond drilling programme over a broad area of the
Fenton shear zone that included EL27732, a tenement that now
forms part of St George Mining's Pine Creek Property. HGAL
was part of the Homestake Group, one of the largest global
gold miners during the 1990's, and now merged with Barrick
Gold Corporation. FEND18, which is located within EL27732,
was the discovery hole in HGAL's drilling programme.
Drilling
The first diamond drill hole planned under the 2011 drilling
programme, named PCDD001, was completed to a depth of 550
metres. Due to the unusually early onset of wet weather at
site, the balance of the drilling programme was suspended
until the 2012 field season.
Visual inspection of the drill core indicates that the marker
unit and the target formation for mineralisation were
intersected at a higher elevation than encountered with the
older angled discovery hole (FEND18). This is consistent with
the moderate folding in the area being an important local
control on the distribution of mineralised zones.
In December 2011, the core was taken to Darwin for analysis
by the CSIRO HyLogger - a hyperspectral logging unit. Results
from the HyLogger analysis are currently being reviewed and
processed.
The drill core has now been brought to Perth and is
undergoing structural logging. Following that, the drill core
will be cut and sampled with samples to be submitted to SGS
Australia for assaying
MMI Programme
The Company has completed an MMI multi element soil
geochemical survey over the discovery area, which covers the
FEND18 drill hole and now includes the newly drilled PCDD001.
3
HGAL, after making the initial gold discovery at the Pine
Creek Property, reported successfully completing an MMI soil
geochemical orientation survey, which identified a prominent
gold anomaly over the area of the higher-grade drill
intersection (FEND18) at Pine Creek.
The intention of the survey completed by St George Mining was
to confirm HGAL's gold geochemical results over the discovery
area, and to test for possible extensions to the known area
of gold mineralisation by expanding the St George geochemical
survey to areas to the east and south.
PINE CREEK TENEMENTS
There are seven tenements comprising the Pine Creek Property
in which St George Mining has an 80%
interest. All tenements have been granted.
No tenements, in part or whole, were relinquished,
surrendered or otherwise divested during the quarterly period
ended 31 December 2011.
CORPORATE ACTIVITIES
Loyalty Option Issue
During the quarter, the Company completed a 1 for 2
non-renounceable entitlements issue of options at
$0.01 per option ("Loyalty Option Issue").
Shareholders on the registry at the record date on 10
November 2011, were offered the opportunity to purchase one
(1) new option for every two (2) shares held by them at a
price of $0.01 per option. The key terms of the options
are:
• an exercise price of $0.20;
• the options are quoted on the ASX;
• the expiry date of each option is 28 November 2014;
and,
• options are exercisable at any time prior to expiry.
A total of 31,509,000 options were offered under the Loyalty
Option Issue. The Company received applications under the
entitlement offer for 24,057,099 options and these were
allotted to shareholders on 8 December 2011. The options are
trading on the ASX under the code SGQO.
The Company has received applications and expressions of
interest in respect of the shortfall of
7,451,901 options and the Board is currently reviewing the
placement of the shortfall.
Incentive Options
At the Company's Annual General Meeting on 30 November 2011,
the shareholders approved the issue of certain unlisted
incentive options to Tim Hronsky and Andrew Hawker. These
options were issued on
22 December 2011.
Details of the incentive options are contained in the Notice
of Annual General Meeting dated 24 October
2011.
4
Capital Structure
As at the end of the quarter, the capital structure of the
Company was:
Fully Paid Ordinary Shares (SGQ) 63,018,000
Listed Options (SGQO) | 40,589,099 |
Unlisted Options | |
Class A Options Class B Options Class C Options | 450,000 450,000 600,000 |
Performance Shares | 100 |
For further information, please contact: John Prineas
Executive Chairman
St George Mining Limited
(+61) 411 421 253
John.prineas@stgm.com.au
David Brook
Professional Public Relations
(+61) 08 9388 0944 mob 0415 096 804
David.Brook@ppr.com.au
C O M P E T E N T P E R S O N S TAT E M E N T:
The information in this announcement that relates to Exploration Results and Mineral Resources is based on information compiled by Andrew Hawker of Hawker Geological Services Pty Ltd. Mr Hawker is a member of the Australasian Institute of Mining and Metallurgy has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking. This qualifies Mr Hawker as a "Competent Person" as defined in the 2004 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Hawker consents to the inclusion of information in this announcement in the form and context in which it appears.
5
Appendix 5B Mining exploration entity quarterly report
Appendix 5B
Mining 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
Name of entity
St George Mining Limited
Rule 5.3
ABN Quarter ended ("current quarter")
21 139 308 973 31 December 2011
Consolidated statement of cash flows
Cash flows related to operating activities
1.1 Receipts from product sales and related debtors
1.2 Payments for (a) exploration & evaluation
(b) development
(c) production
(d) administration
1.3 Dividends received
1.4 Interest and other items of a similar nature
received
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other - GST
Net Operating Cash Flows
+ See chapter 19 for defined terms.
17/12/2010 Appendix 5B Page 1
Appendix 5B
Mining exploration entity quarterly report
1.13 Total operating and investing cash flows (brought forward) | (1,549) | (1,962) |
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 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 - Cost of issue Net financing cash flows | 244 - - - - (106) | 1,819 - - - - (106) |
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 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 - Cost of issue Net financing cash flows | 138 | 1,713 |
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter | (1,411) 2,276 - | (249) 1,114 - |
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter | 865 | 865 |
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 1.2 151
1.24 Aggregate amount of loans to the parties included in item 1.10 -
1.25 Explanation necessary for an understanding of the transactions
$'000
Directors fees and remuneration 115
Accounting, bookkeeping and secretarial services 36
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
+ See chapter 19 for defined terms.
Appendix 5B Page 2 17/12/2010
Appendix 5B Mining exploration entity quarterly report
Financing facilities available
Add notes as necessary for an understanding of the position.
3.1 Loan facilities
3.2 Credit standby arrangements
Estimated cash outflows for next quarter
4.1 Exploration and evaluation
4.2 Development
4.3 Production
4.4 Administration
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.
Changes in interests in mining tenements
6.1 Interests in mining tenements relinquished, reduced or lapsed
+ See chapter 19 for defined terms.
17/12/2010 Appendix 5B Page 3
Appendix 5B
Mining exploration entity quarterly report
6.2 Interests in mining tenements acquired or 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.
7.7 Options
- Options
- Class A Options
- Class B Options
- Class C Options
+ See chapter 19 for defined terms.
Appendix 5B Page 4 17/12/2010
Appendix 5B Mining exploration entity quarterly report
7.8 Issued during quarter
- Options
- Class A Options
- Class B Options
- Class C Options
7.9 Exercised during quarter
- Options
7.10 Expired during quarter
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 5).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: Marcus Michael Date: 25 January 2012
Director/Company secretary
Print name: Marcus Michael
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
+ See chapter 19 for defined terms.
17/12/2010 Appendix 5B Page 5
Appendix 5B
Mining exploration entity quarterly report
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 6: Exploration for and Evaluation of
Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Financial
Reporting 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.
== == == == ==
+ See chapter 19 for defined terms.
Appendix 5B Page 6 17/12/2010
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