Company Announcements ASX Limited
By Electronic Lodgement 28 April 2017
Highlights QUARTERLY UPDATE- Tropical Cyclone Debbie disrupts coal shipments
- Foxleigh produced 781t of saleable production and shipped 698kt in the March quarter
- March Quarter 2017 Benchmark low-volatile PCI coal price set at US$180/t (vs. US$133/t in December quarter).
- Realm's cash on hand as at 31st March 2017 was A$88 million.
Importantly, the focus on occupational health and safety (OH&S) and environmental, social and governance issues (ESG) continues. During the March quarter, there was one lost time injury (LTI) across the business.
Figure 1: - Foxleigh Safety Performance Production and SalesKey operating results for the March quarter 2017 and since acquisition on 29 August 2016 are shown in Table 1.
Table 1: - Foxleigh Coal Mine (100%) Operating ResultsThousands of tonnes | March Quarter | Since acquisition* |
ROM coal produced | 997 | 2,300 |
ROM strip ratio (bcm waste / ROM t) | 5.6:1 | 6.7:1 |
Saleable coal produced | 781 | 1,906 |
Total coal sales | 698 | 1,679 |
Note: - Realm acquired its share in Foxleigh Mine on 29 August 2016
Impact of Tropical Cyclone DebbieRealm previously advised that Aurizon Holdings announced that the Goonyella rail system would re-open on 26th April, following repairs as a result of ex tropical cyclone Debbie. The system is initially operating with some speed restrictions, which will be reviewed as the rail network is further utilised.
While the rail network has been unserviceable, Foxleigh mine produced and stockpiled run of mine coal, while undertaking maintenance works in the coal handling and preparation plant. Washing of coal will resume as product stockpiles reduce with the recommencement of railing coal to Dalrymple Bay Coal Terminal for shipment to customers.
The Company is pleased to announce that during the hiatus in railing, the company's port stockpile was been shipped. Proceeds from this and an earlier shipment have delivered revenue during the stoppage period.
Creek DiversionAs part of ongoing operations, the mine needed to undertake civil works to complete a 4.1km creek diversion which includes the realignment of a public road and the construction of 5.6km of flood protection levees. This work was award to the AE Group and the expected total cost is $15.6m and is planned to be completed in the June quarter 2017. This will extend the life of the Foxleigh Plains pit.
Exploration and DevelopmentThe Company commenced an initial three stage exploration program on the existing mining leases costing circa $1.5m. Stages 1 and 2 were completed in early December and consisted of 35 boreholes including:
28 chip holes - defining coal structure;
6 × 4C cored holes - defining coal quality; and
1 × HQ cored hole - defining geotechnical properties.
The third stage commenced in December and is expected to be completed during H2. This stage includes a further 33 holes as follows:
20 chip holes - defining coal structure;
12 × 4C cored holes - defining coal quality; and
1 × HQ cored hole - defining geotechnical properties.
The results will be used to update the existing JORC resources and reserve statement. In addition, the Company has also commenced a review of existing drilling information on its 100% owned EPC's 855 and 1669 adjacent to the Foxleigh mine.
Coal Market UpdateThe quarterly benchmark price for low-volatile PCI coal ("LV PCI") for the period January to March 2017 (i.e. JFY Q4) has increased by 35% to US$180/t (vs. US$133/t for the December quarter) (Source IHS 16/12/16) (Figure 2).
Foxleigh's premium high quality LV PCI coal is sold to longstanding customers in key export markets including South Korea, Japan, and Taiwan, and the majority of sales are at the benchmark price.
US$/t
Figure 2: - Quarterly Benchmark Coal Prices - for premium LV PCI Coals (Japanese FY) ULV PCI BM300
250
200
150
100
50
ULV PCI BM
0
JFY10Q1
JFY10Q2 JFY10Q3 JFY10Q4 JFY11Q1 JFY11Q2 JFY11Q3 JFY11Q4 JFY12Q1 JFY12Q2 JFY12Q3 JFY12Q4 JFY13Q1 JFY13Q2 JFY13Q3 JFY13Q4 JFY14Q1 JFY14Q2 JFY14Q3 JFY14Q4 JFY15Q1 JFY15Q2 JFY15Q3 JFY15Q4 JFY16Q1 JFY16Q2 JFY16Q3 JFY16Q4
Note: Japanese financial year starts 1st April
Discussions for the quarterly benchmark price for low-volatile PCI coal ("LV PCI") for the period April to June 2017 (i.e. JFY Q1), have not finalised, negotiations have been hampered by ex tropical cyclone Debbie.
Katingan Ria Coal ProjectThe Company continues to engage with PLN (Indonesian State owned Electricity Corporation) and other potential partners/buyers in order to progress its power station strategy. The Katingan Ria thermal coal project (Realm 51%) is ideally suited to supply a proposed mine mouth power station in the region.
At the time of writing the expected price for Katingan Ria coal is US$40.00/t. This together with the downward revision of the forecast production costs for the project has encouraged management to reassess the viability of an export driven operation in addition to its power station strategy.
South African Projects Aluminium Waste Toll Treating Business Health and SafetyThere were no disabling injuries during the quarter. The focus on safety training and monitoring continues. The disabling injury frequency rate (DIFR) for the March quarter 2017 was 0.0% (0.0% in the prior quarter).
Smelting and recovery performance comparisonAlumicor | Q3 2015 | Q4 2015 | Q1 2016 | Q2 2016 | Q3 2016 | Q3 2016 | Q4 2016 | Q1 2017 | % change Q4 2016 |
Tonnes smelted Average recovery | 4,364 53% | 5,412 56% | 4,868 57% | 4,473 57% | 5,083 60% | 5,083 60% | 4,391 59% | 5,182 59% | 18% 0% |
Alumicor continues to operate profitably and deliver cash flow with management's attention focussed on running the business safely and efficiently.
The Company is pleased to announce that constructive discussions with Hulamin are continuing with the aim of securing a mutually beneficial long term processing agreement in the near term.
The Company continues to engage with Hulamin and other parties and will make further announcements when additional information becomes available.
Platinum Group MetalsChrometco (JSE:CMO), in which Realm owns 45m shares, and the Sail Group of Companies "Sail" have entered into conditional agreements that could result in Sail acquiring just less than 90% of Chrometco. In return, Chrometco will receive: cash, a controlling stake in two fully financed chrome projects and a stake in Sail Minerals. By joining the respective strengths of Sail and Chrometco as well as the potential of two exceptionally good chrome projects, the new entity will be well placed to become a significant player in the chrome market (Refer http://www.chrometco.co.za/).
The Company continues to keep its mineral rights situated in the Eastern Limb of the Bushveld Igneous Complex in good standing.
Platinum prices remain subdued with recent prices with the quarter ending at US$950/oz. At the time of writing the platinum price was US$954/oz.
Business DevelopmentOn the business development front, numerous coal opportunities continue to be reviewed, with the focus directed at projects or mines with near term cash generation capacity, largely in first world jurisdictions.
Financial resultsReferring to the attached 5B schedule, net operating cash inflows were AUD$29,788,00 for the quarter (inflow of AUD$7,395,000 in the prior quarter).
Realm's cash on hand as at 31st March 2017 was A$88 million.
About RealmInformation on Realm Resources Limited is available on the Company's website at
www.realmresources.com.au.
For further information, please contact:
Gemma Yeates
Financial & Corporate Relations (FCR) T: +61 2 8264 1005
g.yeates@fcr.com.au
Appendix 1: - Foxleigh MineRealm's 99.9% held subsidiary, Middlemount South Pty Ltd ("Middlemount") owns 70% of the Foxleigh Mine ("Foxleigh").
Foxleigh Mine is located in Queensland's Bowen Basin coalfield, 12km south of Middlemount and 272km northwest of Rockhampton (see Figure 1). The mine was established in 1999 as an open cut operation producing benchmark quality, LV PCI coal for the export market. Saleable production in CY 2016 (100% basis) was ~3.1 million tonnes.
Mining is undertaken using the truck and shovel method with raw coal delivered to Foxleigh's coal handling and preparation plant ("CHPP") for washing. The CHPP has processing capacity in excess of 4Mtpa of raw coal.
Product coal is hauled 27km on a private haul road to a dedicated train loading facility located alongside the Capcoal rail loop and is then railed 280km to the Dalrymple Bay Coal Terminal ("DBCT") at the Port of Hay Point near Mackay, Queensland.
Figure 1: Foxleigh Location and Infrastructure MapSource: Queensland Government - Department of Mines and Energy
Appendix 2: - Interests in mining tenementsPROJECT/LOCATION | TENEMENT | INTEREST AT THE BEGINNING OF THE QUARTER | INTEREST AT THE END OF THE QUARTER |
Marikat District, Katingan Regency, Central Kalimantan Province, Indonesia | IUP Operasi Produksi No. 545/222/KPTS/VIII/2011 In Prinsip Izin Pinjam Pakai No. S.515/Menhut- VII/2012 | 51% | 51% |
Mpumalanga province, South Africa | Prospecting right renewal reference number MP 30/5/1/1/2/ 1021 PR. | 74% | 74% |
Mpumalanga province, South Africa | Prospecting right renewal reference number MP 30/5/1/1/2/ 1028 PR. | 74% | 74% |
Mpumalanga province, South Africa | Prospecting right renewal reference number MP 30/5/1/1/2/ 1030 PR. | 70.3% | 70.3% |
Mpumalanga province, South Africa | Prospecting right renewal reference number MP 30/5/1/1/2/ 1020 PR. | 74% | 74% |
Mpumalanga province, South Africa | Prospecting right renewal reference number MP 30/5/1/1/2/ 958 PR. | 74% | 74% |
Mpumalanga province, South Africa | Prospecting right renewal reference number MP 30/5/1/1/2/ 1105 PR. | 74% | 74% |
Mpumalanga province, South Africa | Prospecting right renewal reference number MP 30/5/1/1/2/ 1029 PR. | 74% | 74% |
Mpumalanga province, South Africa | Prospecting right renewal reference number MP 30/5/1/1/2/ 1060 PR. | 74% | 74% |
Central Queensland Australia | ML 70171 | 0% | 70% |
Central Queensland Australia | ML 70309 | 0% | 70% |
Central Queensland Australia | ML 70310 | 0% | 70% |
Central Queensland Australia | ML 70429 | 0% | 70% |
Central Queensland Australia | ML 70430 | 0% | 70% |
Central Queensland Australia | ML 70431 | 0% | 70% |
Central Queensland Australia | ML 70470 | 0% | 70% |
Central Queensland Australia | EPC 855 | 0% | 100% |
Central Queensland Australia | EPC 1669 | 0% | 100% |
Further; Realm did not have any interest in any farm-in or farm-out agreements at the end of the quarter. Realm did not acquire or dispose of any farm-in or farm-out interests during the quarter
Appendix 5B+Rule 5.5
Mining exploration entity and oil and gas exploration entity quarterly reportIntroduced 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 | ||
Realm Resources Limited | ||
ABN | Quarter ended ("current quarter") | |
98 008 124 025 | 31 March 2017 |
Consolidated statement of cash flows | Current quarter $A'000 | Year to date (3.months) $A'000 | |
1. | Cash flows from operating activities | 94,312 | 94,312 |
1.1 | Receipts from customers | ||
1.2 | Payments for | (886) | (886) |
(a) exploration & evaluation | |||
(b) development | (1,858) | (1,858) | |
(c) production | (41,389) | (41,389) | |
(d) staff costs | (17,518) | (17,518) | |
(e) administration and corporate costs | (623) | (623) | |
1.3 | Dividends received (see note 3) | 121 | 121 |
1.4 | Interest received | ||
1.5 | Interest and other costs of finance paid | (2,244) | (2,244) |
1.6 | Income taxes paid | (127) | (127) |
1.7 | Research and development refunds | ||
1.8 | Other (provide details if material) | ||
1.9 | Net cash from / (used in) operating activities | 29,788 | 29,788 |
- Cash flows from investing activities
Payments to acquire:
property, plant and equipment
tenements (see item 10)
investments
other non-current assets (8,086) (8,086)
Consolidated statement of cash flows
Current quarter
$A'000
Year to date (3.months)
$A'000
2.2
Proceeds from the disposal of:
-
-
(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
-
-
2.4
Dividends received (see note 3)
-
-
2.5
Other (provide details if material)
-
-
2.6
Net cash from / (used in) investing
-
-
activities
Cash flows from financing activities
Proceeds from issues of shares
Proceeds from issue of convertible notes
Proceeds from exercise of share options
Transaction costs related to issues of shares, convertible notes or options
Proceeds from borrowings
Repayment of borrowings
Transaction costs related to loans and borrowings
Dividends paid
Other (provide details if material)
3.10 Net cash from / (used in) financing activities
Net increase / (decrease) in cash and cash equivalents for the period
Cash and cash equivalents at beginning of period
Net cash from / (used in) operating activities (item 1.9 above)
Net cash from / (used in) investing activities (item 2.6 above)
Net cash from / (used in) financing activities (item 3.10 above)
Effect of movement in exchange rates on cash held
4.6 Cash and cash equivalents at end of period
- Payments to directors of the entity and their associates
Aggregate amount of payments to these parties included in item 1.2
Aggregate amount of cash flow from loans to these parties included in item 2.3
Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
Current quarter
$A'000
- Payments to related entities of the entity and their associates
Aggregate amount of payments to these parties included in item 1.2
Aggregate amount of cash flow from loans to these parties included in item 2.3
Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2
Total facility amount at quarter end
$A'000
Amount drawn at quarter end
$A'000
76,164
48,000
102,694
63,000
- Financing facilities available Add notes as necessary for an understanding of the position
Loan facilities
Credit standby arrangements
Performance Guarantee Facility
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.
9.
Estimated cash outflows for next quarter
$A'000
9.1
Exploration and evaluation
(614)
9.2
Development
(1,800)
9.3
Production
(42,234)
9.4
Staff costs
(6,523)
9.5
Administration and corporate costs
(675)
9.6
Other (provide details if material)
9.7
Total estimated cash outflows
51,846
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
10.2
Interests in mining tenements and petroleum tenements acquired or increased
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
69,160 29,788 (8,086) (2,669) | 69,160 29,788 (8,086) (2,669) | |
88,193 | 88,193 |
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 | 87,481 | 68,433 |
5.2 | Call deposits | 190 | 190 |
5.3 | Bank overdrafts | 522 | - |
5.4 | Other (provide details) | 542 | |
5.5 | Cash and cash equivalents at end of quarter (should equal item 4.6 above) | 88,193 | 69,165 |
Current quarter $A'000 |
42 |
Realm Resources Limited published this content on 28 April 2017 and is solely responsible for the information contained herein.
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