Quarterly Activities and Cashflow Report
Sydney, April 30, 2015 AEST (ABN Newswire) - During the recent quarter Queensland Bauxite (
ASX:QBL) signed a Heads of Agreement ("HOA") with Far North Queensland Ports Corporation Limited ("Ports North").
Other Highlights:
- Heads of Agreement signed with Ports North for Mourilyan Port
- Environmental consultants progressing approvals
- Investment by China Bauxite Trading & Investments Company in Queensland Bauxite
- Rights Issue fully subscribed
- Drilling
- Optimising throughput of bauxite from Mine-to-Port
- Continuing discussions and negotiations with potential off takers
- Sea Transport Commodities Pty Ltd
- Well funded to continue development and drilling: $6.503M cash
The HOA gives a non-binding commitment of port capacity for product that is expected to be produced and exported from the South Johnstone Project ("South Johnstone" or "the Project") and confirms the availability of significant port capacity.
The Port of Mourilyan is located 15-24 kilometres west, by road, of the South Johnston mine site and has excellent road connections.
The Heads of Agreement confirms the parties will work together to finalise a commercial agreement for the utilisation of port infrastructure and the development of the designated Stock pile Facility and associated tenure over the site and a Port Operations and Access Agreement Lease Agreement to commence on completion of development of the Facility and prior to commencement of operations at the port.
Importantly, the facilities will initially allow for the shipment of up to 1.0m tonnes of product each year from 2015, with future potential to greatly expand that capacity as the project develops.
About Ports North
Ports North is a Queensland State Government Owned Corporation. Ports North have ownership and control of the Port of Mourilyan in Far North Queensland (the Port), including freehold landholdings designated as Strategic Port Land, including both developed and vacant land.
Environmental approvals
QBL retained Northern Resource Consultants Pty Limited ("NRC") to provide environmental consultancy services for the Company's environmental approvals, management, planning, rehabilitation, investigations and assessments (both on-site and off-site) for the South Johnstone Bauxite Project.
NRC has been engaged to obtain the statutory approvals for both the port and mining lease to facilitate the commencement of project mining and construction activities in 2015.
NRC is a Queensland based company that has specialist expertise and experience managing and obtaining environmental and mining approvals. NRC is currently working with other resource companies in the area (including at the Port of Mourilyan).
Based on discussions with the relevant Departments, landowners, local authorities and environmental experts, the Company has reasonable grounds to believe that the environmental approvals and mining lease will be granted to enable production to begin as planned in 2015.
Investment by China Bauxite Trading & Investments Company in Queensland Bauxite
During the Quarter, QBL accepted an investment of A$910,000 via a placement of 65,000,000 ordinary shares at $0.014 per share and a further 5 million options exerciseable at 3c per share expiring 28 February 2018 to China Bauxite Trading & Investments Company ("CBTIC").
The placement was made pursuant to shareholder approval received at the Company's recent AGM to issue up to 65 million Shares under ASX Listing Rules 7.1 and 7.
The Company has been approached by a number of groups for investment in QBL including CBTIC and the Directors decided that given the background of CBTIC's key executives and their extensive contacts and experience in Chinese state owned enterprises it could play a key role in assisting off take agreements with end users.
The funds raised will primarily be used for the continued expansion and development of the South Johnstone Bauxite Project.
CBTIC was founded by Mr. Yongjin Li who graduated from the University of Science and Technology in 1983 and spent 15 years working for China Non Ferrous Metal Corporation (CNNC), the former parent company of CHINALCO, CNMC, JNMC, Minmetals and many other Chinese non-ferrous majors.
Mr. Li spent 15 years working for CNNC and was a Project Manager in charge of importing and exporting of non-ferrous metal for their alumina refineries.
Subsequently, Mr. Li held the position of marketing manager with Sino Metal, which is CNNC's subsidiary in Sydney for four years.
Mr. Li has extensive experience working with Chinese State-owned companies and private sector alumina enterprises and bridging the divide between Australian mineral companies and Chinese end users.
Rights Issue
QBL lodged a prospectus with ASIC pursuant to which the Company proposed to undertake a non-renounceable entitlement issue of one (1) Share for every four (4) shares held by those shareholders registered at the record date at an issue price of $0.014 per share to raise up to $1,782,167, together with one free attaching option with an exercise price of $0.10 and an expiry date of 31 July 2016 for every two shares subscribed for and issued (Offer).
The closing date of the Offer was 5.00 pm (WST) on 10 March 2015.
The Board of QBL was pleased to advise that on the closing date the Company had received applications under the rights issue from eligible shareholders for 62,099,719 shares. Upon close of the rights issue 65,198,028 shares became available for subscription under the shortfall offer. Many shareholders have applied for significant oversubscriptions as part of the shortfall, and since closing the rights issue offer, the Company has placed all shortfall shares available to shareholders who have subscribed for the shortfall.
Drilling
Drilling is continuing at the South Johnstone Bauxite Project with the objective of increasing the level of JORC Indicated Resources. It was necessary to access a new drill rig from overseas capable of efficient and quick exploration at near surface. When drilling results are at hand, these will be released to the market.
Sea Transport Commodities Pty Ltd
The Company has engaged Sea Transport Commodities Pty Ltd to provide logistical support and to study in detail the loading operations and possible logistical solutions for the bauxite operation.
This could effectively envisage a significantly shorter lead time to develop a profitable export operation as it would entail a faster ship loading time.
The Company is also evaluating scenarios to materially reduce freight costs from the Port to Shandong, China.
Work is continuing on optimising the throughput of bauxite from Mine-to-Port. The Company is reviewing several options that could fast track extraction of bauxite from South Johnstone as well as deliver an optimised method of loading of the bauxite at Mourilyan Port.
Off take
As previously advised, the Company is in discussions with a number of groups for off take of bauxite from South Johnstone.
The Company has hosted another trip from a major Asian commodity group toward finalising an off take agreement.
This broadens the number of discussions and interest in South Johnstone bauxite. Good progress is being made with offtake partners and while ongoing they are not finalised. The Company will inform the market if these discussions leads to an off take agreement.
Corporate
QBL's cash position as at 31st March 2015 was $6.503 million. This is against a current market capitalisation for QBL of approximately $10 million.
For further information please visit the company's website at www.queenslandbauxite.com.au.
To view the report please visit:
http://media.abnnewswire.net/media/en/docs/ASX-QBL-718081.pdf
About Queensland Bauxite Ltd
Queensland Bauxite Limited (ASX:QBL) is an Australian listed company focused on the exploration and development of its bauxite tenements in Queensland and New South Wales. The Company's lead project is the South Johnstone Bauxite Deposit in northern Queensland which has rail running through the project area and is approximately 15-24 kilometres from the nearest deep water port. The Company intends to become a bauxite producer with a focus on commencing production at South Johnstone as early as possible. The Company also pursues additional investment opportunities, and has agreed to acquire a 100% shareholding in Medical Cannabis Limited, an Australian leader in the hemp and Cannabis industries, and a 100% shareholding in Medcan Australia Pty Ltd, a company with an ODC cultivation and production License and a DA approved Cannabis production and manufacturing facility.
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