PHOSCO LTD
ACN 139 255 771
ABN 82 139 255 771
Level 4, 100 Albert Road
South Melbourne VIC 3205
Contact:
Phone: +61 (0)3 9692 7222
Fax: +61 (0)3 9077 9233 info@celamin.com
Investor Relations:
Stephen Nossal
Board of Directors:
Martin Broome, Chairman
Nic Clift, Managing Director
Russell Luxford, Non-Exec Director Sue-Ann Higgins, Alternate Director Tim Markwell, Non-Exec Director
Company Secretary
Melanie Leydin
Securities on Issue
CNL:993,671,986 ordinary shares
CNLCA: 14,887,796 partly paid shares
ASX Announcement 1 May 2015
Quarterly Activity & Cashflow Reports for Quarter ending 31 March 2015Summary:
• Celamin and its joint venture partner Tunisian Mining Services are currently in dispute with legal actions both underway and pending
• Technical work on the Chaketma Phosphate project has been suspended
• Current cash balance (30 April 2015) of A$2.69 m*
• Shares remain suspended from trading on ASX
Phosphate exploration and development company Celamin Holdings NL (ASX: CNL) (Celamin, the Company) presents details of its activities for the Quarter ending 31 March 2015.
Celamin has been focused on the exploration and development of the Chaketma Phosphate Project in Tunisia. The Chaketma Project is a potential large scale phosphate development asset, which comprises six prospects over a total area of 56km2. It hosts a total JORC compliant Inferred Resource of 130Mt @
20.5% P₂O₅, confirmed from drilling at only two of the project's six prospects.
Results from metallurgical test work conducted to date have confirmed the potential for the project to produce a saleable high-grade phosphate concentrate. The project is also well positioned relative to major infrastructure requirements, such as rail, road and ports.
The Chaketma Phosphate Permit is held by Chaketma Phosphates SA ("CPSA"). CPSA is the operating company responsible for development of the Chaketma Project. Celamin's wholly-owned subsidiary, Celamin Limited, is currently in dispute with its joint venture partner, Tunisian Mining Services ("TMS"), regarding ownership and control of CPSA and has engaged Tunisian legal advisers and commenced legal actions to resolve this situation.
(*includes US$2m held in a USD account, at a USD exchange rate of 0.793)
Celamin Holdings Limited 2
The following is a summary of events regarding the dispute:
Celamin has been the sole funder of the Chaketma Phosphate Project providing US$8.6M of funding to December 2014. Celamin's partner, TMS, has been beneficiary of 50% of this project expenditure, as the largest service provider.
On 21 October 2014, the Director General of CPSA, without Board approval, made a US$3.3M cash call directed to Celamin Limited for funding of the Chaketma feasibility study. CPSA already held an excess of funds above requirements at that time, and, in Celamin Limited's view, no cash call was justified.
Celamin Limited objected to this cash call and, after negotiations, TMS and Celamin Limited entered into an agreement dated 10 December 2014 to reduce the cash call to US$2M and extend the due date for payment until 15 January 2015, in the expectation of agreement being reached in the first quarter of 2015 on the choice of engineering contractor and the terms of their engagement for conducting the feasibility study for the Chaketma Phosphate Project.
Celamin deposited US$2M into CPSA's Tunisian bank account on behalf of Celamin Limited in payment of the cash call, receipt of which was confirmed by CPSA's bank and the Director General of CPSA on 13 January 2015.
On 19 January 2015 the Director General issued a notice of default to Celamin Limited for failure to pay the US$2M cash call by the due date ("alleged default"), rejecting payment by Celamin on Celamin Limited's behalf. Celamin Limited objected to the default notice and the action by the Director General and called a Board meeting scheduled for 9 March 2015 for the purpose of reversing these actions. Due to subsequent events this Board meeting was not held.
Within 24 hours after receipt of the default notice, TMS indicated that it would not be acting on that notice and the Director General and TMS continued working collaboratively with Celamin in progressing the Chaketma Phosphate Project.
On 3 March 2015 the Company was advised by the then Chairman of CPSA, Mr David Regan, that he had received notice from the Director General of CPSA to the effect that Celamin Limited's shares in CPSA had been transferred to TMS on 13 February 2015. Celamin requested a voluntary trading halt on its shares from trading on ASX on 4 March 2015. The shares remain suspended from trading on ASX.
Following initial legal investigations, the Company understands that the Director General (without Celamin's knowledge and without any authority from the CPSA Board) has purported to transfer Celamin Limited's shares to TMS on the basis of the alleged default.
The Company disputes the existence of any default on the part of Celamin Limited and is of the view that Celamin Limited's shares in CPSA have been transferred without any legal basis.
Celamin Limited has engaged legal advisors and has commenced the following actions in the
Tunisian Courts, with additional actions being considered:
- An Application for reversal of the share transfer against the Director General of CPSA, TMS, and Kais Mansouri of TMS;
- An application for appointment of a trustee under supervision of the court to manage the business of CPSA and preserve the rights of all parties until a final decision is made regarding the share transfer; and
Celamin Holdings Limited 3
- An application for recovery of AUD$160,000 owed by TMS to Celamin Limited which is unrelated to the share transfer and alleged default.
The US$2M deposited by Celamin for the cash call, which remained in a Tunisian bank account in CPSA's name for a period of over three months, was received back into Celamin's bank account in Australia on 27 April 2015, transferred from the Tunisian bank of CPSA. Celamin has received no communications from TMS or CPSA in relation to the transferred funds and has retained them in a US dollar account pending resolution of the legal actions.
Previous cash calls totalling US$1.7m were provided as loan funds from Celamin Limited to CPSA prior to 31 December 2014, for the purpose of funding the Chaketma Phosphate Project feasibility study. As at 31 January 2015 US$1.4m of these loan funds remained in CPSA's Tunisian bank account. Celamin understands the loan funds can be recalled from CPSA regardless of the outcome of the legal dispute.
Funding Facilities Secured
On 23 April 2015, Celamin announced it had secured short term funding facilities from its two major shareholders, African Lion 3 Ltd and Polo Resources Limited. At the time of securing the facilities, Celamin required immediate funds to provide it with the liquidity to continue the legal actions in Tunisia and for general working capital purposes. The facilities are based on commercial terms and have been undertaken on an arm's length basis; each for a principal amount of up to $250,000, for a total of $500,000. The terms of each of the facilities are similar and are detailed in a release to the ASX dated 23 April 2015.
Chaketma Project update
Prior to the commencement of the legal dispute, a number of activities were in progress on the
Chaketma Project, including:
• Final bids were received from the two shortlisted engineering contractor, Jacobs and
Lycopodium with a decision pending;
• Progress on the geology and geological modelling of the Chaketma Project deposits was continuing, including:
- the appointment of a geologist to take over management of activities on the ground;
- the re-opening of the CPSA Rouhia office;
- the appointment of Arethuse (a French geological service consulting company) to continue progressing the geological modelling and resource estimation of the deposits; and
- downhole surveying of the Kef El Louz deposit.
• Continuing negotiation with the Environmental Social Impact Assessment (ESIA) contractor
(ERM/EAM, a Spanish/Tunisian Consortium) to finalise terms of their appointment.
Appointment of Directors
During the Quarter, Tim Markwell and Sue-Ann Higgins were appointed to the board as Non- executive Director and Alternate Director, respectively.
Mr Markwell is the Investment Manager of prominent resources investment fund African Lion, and has previously sat on the Board of Celamin. African Lion is a major shareholder in Celamin, with a
Celamin Holdings Limited 4
33% shareholding. He is a qualified geologist with over 20 years' experience in the resources sector, including senior technical roles with BHP Billiton, Golder Associates and Minara Resources.
Ms Higgins was appointed as an Alternate Director to Non-Executive Director Russell Luxford. She is an experienced company executive with more than 25 years in the mining industry. Ms Higgins has a diversified skill-set with global corporate experience, having held senior legal and commercial roles with ARCO Coal Australia Inc., WMC Resources Limited, Oxiana Limited and Citadel Resource Group Limited.
ENDS
For further information or enquiries, please contact:
Nic Clift Stephen Nossal Managing Director Corporate Relations Celamin Holdings NL. Celamin Holdings NL T: +61 (0)3 9692 7222 T: +61 (0)3 9692 7222
E: nic.clift@celamin.com E: stephen.nossal@celamin.com
Lists of Tenements Held
Mining Tenement | Location | Beneficial Percentage held | Interest acquired/farm-in during the quarter | Interest Disposed/farm- out during the quarter |
Chaketma | Tunisia | - %* | - * (see below) | |
Wedderburn EL5471 | Victoria, Australia | 100% |
* The Chaketma Phosphate Permit is 100% held by CPSA. Prior to 13 February 2015, Celamin held 51% of CPSA and the transfer of its interest in CPSA to TMS is the subject of legal actions summarised in this Report.
Appendix 5B Mining exploration entity quarterly report
Appendix 5B Mining exploration entity quarterly reportIntroduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
CELAMIN HOLDINGS NL
Rule 5.3
ABN Quarter ended ("current quarter")
82 139 255 771 31 MARCH 2015
Consolidated statement of cash flowsCash flows related to operating activities
1.1 Receipts from product sales and related debtors
1.2 Payments for
(a) exploration and 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 (provide details if material)
Net Operating Cash Flows
* Loan payments advanced to Chaketma Phosphate SA as at 31 March 2015 amount to $US 3.7m
+ See chapter 19 for defined terms.
30/06/2014 Appendix 5B Page 1
Appendix 5B
Mining exploration entity quarterly report
1.13 Total operating and investing cash flows (brought forward) | (3,077,860) | (7,323,402) |
Cash flows related to financing activities 1.14 Proceeds from issues of shares 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 - Capital raising costs Net financing cash flows | - - - - - - | 4,351,254 - 2,500,000 - - (215,228) |
Cash flows related to financing activities 1.14 Proceeds from issues of shares 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 - Capital raising costs Net financing cash flows | - | 6,636,026 |
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 | (3,077,860) 3,120,768 1,673 | (687,376) 736,297 (4,340) |
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 | 44,581* | 44,581* |
*US$3.7m of loan funds (including the above cash call) were held in CPSA accounts as at 31 January 2015 (A$4.32m, at the exchange rate at the time of deposit). Subsequent to the end of the Quarter, US$2m of these loan funds were returned to Celamin's bank account.
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entitiesCurrent Quarter
$A
1.23 Aggregate amount of payments to the parties included in item 1.2 315,309
1.24 Aggregate amount of loans to the parties included in item 1.10 -
1.25 Explanation necessary for an understanding of the transactions
Payments made to directors of the consolidated entity during the March 2015 quarter. In addition
$110,245 was paid to David Regan (Former Director) as a termination payment.
Non-cash financing and investing activities2.1 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
On 3 March 2015 the Company was advised by the then Chairman of CPSA, Mr David Regan, that he had received notice from the Director General of CPSA to the effect that Celamin Limited's shares in CPSA representing 51% shareholding had been transferred to TMS on 13 February 2015. CPSA holds 100% of the Chaketma permit. Celamin disputes the legality of this purported transfer - see the Company's Quarterly Activity Report for more information.
+ See chapter 19 for defined terms.
Appendix 5B Page 2 30/06/2014
Financing facilities availableAdd notes as necessary for an understanding of the position.
Appendix 5B Mining exploration entity quarterly report
3.1 Loan facilities
3.2 Credit standby arrangements
Estimated cash outflows for next quarter4.1 Exploration and evaluation
4.2 Development
4.3 Production
4.4 Administration
Reconciliation of cashReconciliation 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 tenements6.1 Interests in mining tenements relinquished, reduced or lapsed
6.2 Interests in mining tenements acquired or increased
**: Currently the subject of a legal dispute. Refer to the Company's Quarterly Activities report for further information.
+ See chapter 19 for defined terms.
30/06/2014 Appendix 5B Page 3
Appendix 5B
Mining exploration entity quarterly report
Issued and quoted securities at end of current quarterDescription includes rate of interest and any redemption or conversion rights together with prices and dates.
7.12 Unsecured notes
(totals only)
+ See chapter 19 for defined terms.
Appendix 5B Page 4 30/06/2014
Compliance statementAppendix 5B Mining exploration entity quarterly report
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:
(Company Secretary)
Print name: MELANIE LEYDIN Date: 1 May 2015
Notes1 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.
== == == == ==
+ See chapter 19 for defined terms.
30/06/2014 Appendix 5B Page 5
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