HIGHLIGHTS OF THE QUARTER
Luiri Hill Gold Project, Zambia
-- Negotiations with the Zambian Government continued during the quarter
culminating in the Zambian Ministry of Mines and Mineral Development
reinstating the Company's Large Scale Mining License, LML 48.
-- Exploration work progressed with trenching to expose extensions to known
mineral resources and to delineate drilling targets.
-- Maxwell GeoServices engaged to reorganize, validate and maintain the
Company's exploration database.
-- Coffey Associates contracted to produce a new resource estimate.
-- An agreement was reached with Senior Chief Shakumbila to establish and
fund a Community Development Trust for the benefit of the communities in
the vicinity of the Company's area of operations.
-- Recruitment of two experienced Zambian geologists to oversee exploration
activities at Luiri Hill well advanced.
Corporate
-- Completion of a private placement of 10,000,000 common shares at an
issue price of A$0.115 to raise A$1.15 million.
-- Cash on hand at end of Quarter: A$2.7 million.
Luiri Gold Limited (ASX:LGM)(TSX VENTURE:LGL), ("Luiri" or the
"Company) an East African gold exploration and development company,
is pleased to announce its Quarterly Activities Report for the 3
months ended 31 October 2011.
LUIRI HILL GOLD PROJECT
Mining License Reinstatement
With the reinstatement of the large-scale mining license, the
Company is gearing up to recommence full-scale exploration
activities and development studies in Zambia. The mining license
8074-HQ-LML (previously called LML 48) contains the Matala and
Dunrobin gold deposits in the Company's Luiri Hill Gold
Project.
Under the terms of the settlement reached with the Government of
Zambia and other agreements with relevant stakeholders:
-- The Government of Zambia has extinguished the Cancellation Notice issued
on 15 June 2010 in respect of LML 48, and the Company has discontinued
its appeal against the decision of the Honourable Minister of Mines.
Accordingly, the Government of Zambia has confirmed that LML 48 is once
again valid and effective as if the Cancellation Notice had never been
issued. Under the new naming system, this license is now known as 8074-
HQ-LML.
-- As a key part of the settlement, the Company has agreed to continue
project development activities and to be in a position to commence
construction of a mining project prior to December 31, 2013. The
timeframe allows for two complete dry seasons in which to progress and
complete field exploration and development studies. The directors of
Luiri believe this provides the Company with sufficient time to complete
the necessary exploration activities prior to commencing possible mine
development.
-- The Company has also made meaningful commitments to the local community
with the initial funding of a community development trust and the
facilitation and funding of a community development committee, each as
further described below.
The agreements are the result of extensive negotiations by the
management team of Luiri with the relevant Zambian Government
departments and stakeholders to resolve the various issues that had
caused the Cancellation Notice. During the negotiations, Luiri
demonstrated good faith by continuing to employ 29 full time
workers and taking on 15 additional personnel on short-term
contracts to progress exploration trenching in preparation for a
new drilling program.
Other Tenement Matters
During the quarter, negotiations with the Zambian government
also considered future access to the ground previously covered by
the Company's two prospecting licenses. The following outcomes have
been established at the date of this report as a result of these
negotiations:
-- PL209 and PL 173 were due to expire on 1 October 2011 and 31 July 2011
respectively which was, in both cases, earlier than Company records had
indicated;
-- Both licenses had previously been renewed by the former management for
the maximum number of times so further renewals were not possible;
-- The former management of the Company had applied for a new mining
license on the part of PL173 that was to the east of 8074-HQ-LML (LML48)
and prospective for gold mineralisation. However, this application had
not progressed due to the suspension of LML48.
Negotiations are continuing with the Zambian Government in
regard to these license issues.
As a result of these outcomes, the Company has sharpened its
strategic focus onto the development of a gold project. These
outcomes have also resulted in the Nambala Iron Ore prospect no
longer being held by the Company.
The Company had reviewed the Nambala Iron Ore prospect and
considered it as a possible source of iron ore for a small-scale
Zambian steelmaking operation. Regional transport infrastructure
constraints added to the limited known geological potential of the
project contributed to the Company placing little immediate value
on the Nambala Iron Ore prospect. The new management has focused on
ensuring the Company regained access to its gold prospective areas
as the source of future shareholder value.
Exploration Activities
During the quarter, the Company initiated work in preparation
for the resumption of full-scale exploration activities.
Discussions were held with Coffey Associates, Perth Office,
("Coffey") who had been responsible for the major part of previous
resource estimates. Following recommendations from Coffey, Maxwell
GeoServices ("Maxwell") were engaged to reorganize, validate and
maintain the Company's geological database. The information
comprising the geological database has been collected and provided
to Maxwell. Coffey Associates will be in Zambia during November
2011, for site visits to the Luiri Hill Project, and to the
Company's Lusaka office. Core samples from previous exploration are
kept on the project site whilst hard copies of exploration records
are kept in the Lusaka office.
The Company also updated its geological mapping hardware and
software. Local copies of the geological database will be used in
planning and coordination of field activities.
Recruitment of Local Geologists
During the quarter, geologists and other technical staff from
Caracle Creek International Consulting (CCIC) supported the
Company's exploration activities. The Company has entered a
consulting agreement with CCIC, who will supply long term support
to the exploration work.
The Company also plans to engage two experienced local
geologists to oversee exploration work on the Luiri Hill Gold
Project. Recruitment activities were commenced and at the time of
publication of this report, two suitable candidates had been
engaged.
Community and Environment
A key plank in the Company's negotiations in securing a
reinstatement of its mining lease was reaching agreements with the
local community and Senior Chief. These agreements will form a
stable base from which the Company can develop strong local
alliances into the future. The Company has agreed to:
-- pay US150,000 to establish and fund a community development trust fund
(the "Community Fund"), which has been established by His Royal
Highness, Senior Chief Shakumbila.
-- issue (or transfer) to the Community Fund shares in Luiri Gold having a
value equivalent to 5% of the market value of the project, based on an
independent valuation of the project at the date of issue.
-- Facilitate and fund a local community development committee drawn from
the Shakumbila Chiefdom. This committee will monitor and administer the
funding of social development projects and activities within the Luiri
Gold project area.
-- Engage Senior Chief Shakumbila as a consultant to advise on issues
concerning the Company's interaction with the local community as well as
the Government of Zambia.
The Company has reviewed previous environmental studies and
plans to actively revalidate these in the forthcoming quarter. This
will include continuation of the previous base line environmental
assessments so that any development activities are in line with
international best practices.
On behalf of the Board of Directors of the Company,
Mike Langoulant, Director and Corporate Secretary
Cautionary Note Regarding Forward Looking Statements: Certain
disclosure in this release, including statements regarding the
exploration and study program in relation to the area comprising
LML 48 and the Company's plans and intentions with respect to the
Company's exploration activities and obligations pursuant to the
settlement agreement with the Zambian government, constitute
forward-looking statements. In making the forward-looking
statements in this release, the Company has applied certain factors
and assumptions that are based on the Company's current beliefs as
well as assumptions made by and information currently available to
the Company, including that 8074-HQ-LML remains in good standing,
that the Company is able to obtain any other required government or
other regulatory approvals and adequate financing to complete the
planned exploration activities, that the Company is able to procure
equipment and supplies in sufficient quantities and on a timely
basis, and that actual results of exploration activities are
consistent with management's expectations. Although the Company
considers these assumptions to be reasonable based on information
currently available to it, they may prove to be incorrect, and the
forward-looking statements in this release are subject to numerous
risks, uncertainties and other factors that may cause future
results to differ materially from those expressed or implied in
such forward-looking statements. Such risk factors may include,
among others, actual results of the Company's exploration
activities being different than those expected by management,
delays in obtaining required government or other regulatory
approvals or financing, inability to procure equipment and supplies
in sufficient quantities and on a timely basis, and general market
conditions. Readers are cautioned not to place undue reliance on
forward-looking statements. The Company does not intend, and
expressly disclaims any intention or obligation to, update or
revise any forward-looking statements whether as a result of new
information, future events or otherwise, except as required by
law.
Appendix 5B
Mining exploration entity quarterly report
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98,
30/9/2001.
Name of entity
LUIRI GOLD LIMITED
Quarter ended ("current
ACN quarter")
-------------------------- --------------------------------
139 588 926 31 October 2011
-------------------------- --------------------------------
Consolidated statement of cash flows
--------------------------------
Current quarter Year to date
(12 months)
Cash flows related to operating activities $A'000 $A'000
--------------------------------
1.1 Receipts from product sales and
related debtors
1.2 Payments for (a)exploration and
evaluation (658) (1,361)
(b)development
(c)production
(d)administration (131) (1,598)
1.3 Dividends
received
1.4 Interest and other items of a
similar nature received 25 122
1.5 Interest and other costs of
finance paid
1.6 Income taxes
paid
1.7 Other (provide details if
material)
--------------------------------
Net Operating
Cash Flows (764) (2,837)
----------------------------------------------------------------------------
Cash flows related to investing
activities
1.8 Payment for
purchases of: (a)prospects
(b)equity
investments
(c)other fixed
assets (22) (22)
1.9 Proceeds from
sale of: (a)prospects
(b)equity
investments
(c)other fixed
assets
1.10 Loans to other
entities
1.11 Loans repaid by other entities
1.12 Other (provide details if
material)
Tenement Expenditure Guarantee
(refundable)
--------------------------------
Net investing
cash flows (22) (22)
--------------------------------
1.13 Total operating and investing
cash flows (carried forward) (786) (2,859)
----------------------------------------------------------------------------
1.13 Total operating and investing
cash flows
(brought forward) (786) (2,859)
----------------------------------------------------------------------------
Cash flows related to financing
activities
1.14 Proceeds from issues of shares,
options, etc. 1,150 2,031
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 (provide details if
material)
--------------------------------
Net financing cash flows 1,150 2,031
----------------------------------------------------------------------------
Net increase (decrease) in cash
held 364 (828)
1.20 Cash at beginning of quarter/year
to date 2,353 3,545
1.21 Exchange rate adjustments to item
1.20 2 2
--------------------------------
1.22 Cash at end of quarter 2,719 2,719
----------------------------------------------------------------------------
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 1.2 118
----------------
1.24 Aggregate amount of loans to the parties included
in item 1.10
----------------------------------------------------------------------------
1.25 Explanation necessary for an understanding of the
transactions
-----------------------------------------------------------------
-----------------------------------------------------------------
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
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
Financing facilities available
Add notes as necessary for an
understanding of the position.
----------------------------------------
Amount available Amount used
$A'000 $A'000
----------------------------------------
3.1 Loan facilities
----------------------------------------
3.2 Credit standby
arrangements
----------------------------------------------------------------------------
Estimated cash outflows for next
quarter
$A'000
4.1 Exploration and
evaluation 500
4.2 Development
4.3 Production
4.4 Administration 150
----------------------------------------------------------------------------
Total 650
----------------------------------------------------------------------------
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 Current quarter Previous quarter
accounts is as follows. $A'000 $A'000
----------------------------------------
5.1 Cash on hand and at
bank 951 603
----------------------------------------
5.2 Deposits at call 1,768 1,750
----------------------------------------
5.3 Bank overdraft
----------------------------------------
5.4 Other (provide
details)
------------------------------------------------------------------------
Total: cash at end of quarter
(item 1.22) 2,719 2.353
----------------------------------------------------------------------------
Changes in interests in mining
tenements
----------------------------------------
Nature of Interest at Interest
Tenement interest beginning of at end of
reference (note (2)) quarter quarter
--------------------------------------------------
6.1 Interests in mining PL 209 & Expired 100% 0%
tenements PL 173
relinquished, reduced
or lapsed
--------------------------------------------------
6.2 Interests in mining 8074-HQ-LML Licence 100% 100%
tenements acquired or (formerly LML48) reinstated
increased by
agreement
with
Zambian
government
--------------------------------------------------
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.
----------------------------------------------------
Total number Number quoted Issue Amount paid up
price per per security
security (see note 3)
(see note (cents)
3) (cents)
---------------------------------------------------------------------------
7.1 Preference
+securities
(description)
----------------------------------------------------
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
---------------------------------------------------------------------------
7.3 +Ordinary 127,431,905 127,431,905
securities
----------------------------------------------------
7.4 Changes during
quarter
(a) Increases
through issues
- Placement 10,000,000 10,000,000 11.5 11.5
(b) Decreases
---------------------------------------------------------------------------
7.5 +Convertible debt
securities
(description)
----------------------------------------------------
7.6 Changes during
quarter
(a) Increases
(b) Decreases
---------------------------------------------------------------------------
Exercise
7.7 Options price Expiry date
1,000,000 AUD$0.20 13/05/2012
100,000 AUD$0.45 01/04/2015
100,000 AUD$0.60 01/04/2015
100,000 AUD$0.85 01/04/2015
8,800,000 AUD$0.17 30/06/2015
----------------------------------------------------
7.8 Issued during
quarter: 800,000 AUD$0.17 30/06/2015
----------------------------------------------------
7.9 Exercised during
quarter
----------------------------------------------------
7.10 Expired during
quarter
----------------------------------------------------------------------------
7.11 Debentures
(totals only)
----------------------------------------------------------------------------
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
4).
2. This statement does give a true and fair view of the matters
disclosed.
Sign here: Michael Langoulant (Company Secretary) Date: November
25, 2011
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 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 1022: Accounting for
Extractive Industries and AASB 1026: Statement of Cash Flows apply to
this report.
5. Accounting Standards ASX will accept, for example, the use of
International Accounting 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.
Corporate Structure
Shares on issue 127.43m
Options 10.1m
52 week high A$0.27
52 week low A$0.09
Cash (as at 31 Oct) A$2.7m
Company Directors
Melissa Sturgess, Chairman
Evan Kirby, Managing Director
Mike Langoulant, Executive Director
Robert Brown, Non-Executive Director
See chapter 19 for defined terms.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Luiri Gold +61 8 6313 5155 +61 8 9324 2977
(FAX)info@luirigold.comwww.luirigold.com Media and Investor
Inquiries: Karen Oswald / Greg Galton Purple Communications +61 8
6314 6300KOswald@purplecom.com.au
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