FORTE ENERGY NL
ACN 009 087 852
ASX/AIM CODE: FTE,
Telephone: +618 9322 4071, Fax: +618 9322 4073
Quarterly Report
December 2009
Forte Energy NL ('Forte Energy' or 'the Company') (ASX/AIM: FTE) is an emerging international uranium
company focused on the exploration and development of a portfolio of uranium assets in the Republics of
Mauritania and Guinea, West Africa.
Highlights
Uranium Exploration - Mauritania
* Diamond core resource drilling program nearing completion at Bir En Nar Uranium Project after
decision to drill additional holes.
* Maiden JORC resource for Bir En Nar expected to be completed in first quarter of 2010, subject
to receipt of final assay results.
* Detailed radiometric airborne surveys being carried out over 9 areas within Forte Energy's
Mauritanian licences.
* Assay results received from trenching and grab samples from field exploration of calcrete-hosted
uranium anomalies near the town of Bir Moghrein include 9,300ppm U3O8 from a trench at Anomaly 068.
* 6000m R/C drilling program around Bir Moghrein scheduled to commence February 2010, consisting
of around 300 holes across 10 prospects.
* The Leg Beija radiometric anomaly has now been defined over an area 10km long and up to 500
metres wide. Sampling pits encountered hard calcrete with secondary uranium minerals down to more than 3
metres depth.
Uranium Exploration - Guinea
* Encouraging metallurgical test results from Firawa Project indicate potential for economic
recovery from leaching, with further pre-feasibility optimisation studies currently underway.
Copper-Cobalt Projects - Australia
* Agreement for sale of 50% interest in Maroochydore JV Copper Project in Western Australia to
Aditya Birla Minerals Ltd to raise $2M.
Republic of Mauritania, West Africa
During the Quarter, the Company's main exploration focus has been its uranium exploration permits at Bir
En Nar and near Bir Moghrein in the Zednes region of northern Mauritania.
The Bir En Nar prospect is a 900 metre long radioactive zone averaging 50-70 metres in width and
following a tectonic structure in a north-west to south-east direction. A smaller parallel zone occurs a
few hundred metres to the south-west.
The planned initial program of around 4,600m of priority holes was completed in early January 2010 at the
Bir En Nar prospect. However, it was decided to proceed with an additional 7 drillholes in order to
complete a more extensive 35 x 35 metre sampling grid to enable a resource classification down to a depth
of 100 metres. Drilling of these additional holes is nearing completion.
The samples are transported to ALS Chemex in Mali for initial preparation before being shipped to ALS
Chemex in Canada for analysis. An initial JORC code-compliant resource for Bir En Nar, to be calculated
by external consultants Coffey Mining, is expected to be published toward the end of the March quarter,
subject to timing of assay results.
To view Fig.1 Forte Energy's exploration permits in Mauritania, please open the following link in a new
window: http://media3.marketwire.com/docs/ftefig1a.pdf
This latest drilling program follows on from the Company's initial 4,000m Reverse Circulation drilling
campaign completed at Bir En Nar in December 2007 and recent geophysical ground surveys. Results from
2007 drilling included seven holes containing intercepts exceeding 5,000ppm eU3O8, with a maximum
intercept of 1.55m at 18,280ppm eU3O8.
Field observations from this recent diamond core drilling generally confirm what was found during the
previous R/C drilling program, with readings from the core samples taken on site using handheld
instruments indicating similar high grades. From the core orientation control, the Company believes that
the steep dipping mineralisation is displaced (but still within the 100 metre wide zone) in two low-
dipping (3-5 degrees to the East) faults marked by thin mafic dykes. The mineralisation occurs in granite
of different mode, both as impregnation and as fissure fillings. Mostly there is a visible vague
alteration but there is also high radiation mineralisation without any visible sign of alteration. The
rock is hard with few crush zones and core recovery is good.
To view Fig.2 6,000m resource drilling program at Bir En Nar, please open the following link in a new
window: http://media3.marketwire.com/docs/ftefig2a.pdf
The Company's exploration permits in Mauritania consist mainly of stony desert terrain with a thin
weathered cover underlain by granites and gneisses of the Archaean Reguibat shield complex of the West
African craton. They predominantly comprise north-north-west to south-south-east tectonic structures.
Significant calcrete deposits occur in places, as well as some sebkhet (dry lake beds) in the northern
part of the concessions.
During 2009 extensive field surveys, including vehicle-based radiometric surveys and VLF-EM (Very Low
Frequency Electromagnetic) surveys, geophysical surveying, geological study, trenching, and rock and pit
sampling were undertaken at a number of uranium anomalies contained within Forte Energy's Mauritanian
exploration licences. Assay results confirmed the presence of bedrock uranium mineralisation at Beso,
Anomaly 040, Anomaly 068 and Anomaly 245, including 9,300ppm U3O8 from a trench at Anomaly 068.
To view Fig.3 Forte Energy's licence areas and major anomaly locations, please open the following link in
a new window: http://media3.marketwire.com/docs/ftefig3a.pdf
Recent activity has concentrated on the Leg Beija and the nearby Anomalies 237 and 238. The Leg Beija
anomaly has been found to extend more than 10 kilometres and is up to 500 metres wide. Sampling pits
encountered hard calcrete down to more than 3 metres depth with secondary uranium minerals. In the bottom
of some back-hoe pits (3-4 metres depth), the calcrete contained quartz and feldspar fragments of granite
type. Yellow uranium minerals occur frequently in the calcrete as in the brecciated granite. Work with an
excavator is continuing around Leg Beija to obtain further calcrete pit samples.
Based on results from the 2009 field surveys, the Company will commence a 6,000m RC short-hole drilling
program in February comprising around 300 holes to test ten of the most prospective anomalies. More
detailed results from the field surveys are available in previous announcements in October 2009 and
January 2010.
Previous airborne surveys during the mid 1990s were carried out along E-W lines with 500 metres line
spacing and at an altitude of 100 metres. Following the recent field surveys, it was recognised that two
of the prospects did not show up on the previous airborne survey. In order to more carefully investigate
the more promising areas and make sure no uranium prospect is missed, new airborne radiometric surveys
were commissioned over selected parts of the Forte Energy licence areas and are expected to be completed
in February.
To view Fig.4 Airborne radiometric survey areas, please open the following link in a new window:
http://media3.marketwire.com/docs/ftefig4a.pdf
The surveys are being carried out by the German company Terrascan Airborne, using a light-weight remote
controlled aircraft equipped with a 4 litre Cs crystal multichannel spectrometer and a GEM potassium
GSMP40 magnetometer. Measurements are being carried out along lines with 200 metre spacing and at an
altitude of 60 metres.
Forte Energy has also decided to relinquish two of its licensed areas in Mauritania: Permit 486
(Ghaliamane Sud) and Permit 487 (Ghaliamane Nord). These permits covering a total of 2,910km2 were
located some distance to the south east from the rest of the Company's permits and were considered of low
significance.
Republic of Guinea, West Africa
Following completion of a 5,850m resource drilling programme in January 2009, Forte Energy announced an
initial JORC-code compliant uranium resource for its 100%-owned Firawa Uranium Project in Guinea on 1
July 2009.
Using a cut-off grade of 100ppm U3O8, the initial Inferred Resource estimate is 17.7Mt grading 296ppm
U3O8 for 11.6 million pounds of contained U3O8. The resource, which was independently estimated and
verified by Coffey Mining Pty Ltd, is summarised below using a range of different cut-off grades:
Cut off Mt Grade U3O8
(U3O8 ppm) (U3O8 ppm) (M lbs)
100 17.7 296 11.6
200 14.1 329 10.2
300 7.7 396 6.7
400 2.9 475 3.0
While the Company is delighted with this substantial maiden resource for the Firawa Project, it is also
encouraged by the significant scope for increases to this figure from further drilling which has been
recommended to test for extensions to the deposit - which remains open along strike and down dip.
A report received from Mineral Engineering Technical Services Pty Ltd ("METS") on preliminary
metallurgical testing of samples from Firawa indicated that the Firawa ore may be suitable for low-cost
leaching extraction. Mineralogical analysis was undertaken using both X-ray diffraction (XRD) and
Quantitative Evaluation of Minerals by Scanning Electron Microscope (QEMSCAN - carried out at AMMTEC in
Perth, Australia).
The mineral crandallite, a calcium aluminium phosphate which made up 27% of the composite samples tested,
was identified as the host of 99.99% of the contained uranium. Goethite (41%) and hematite (15%) were the
other major components identified. Carbonates were not detected so the ore is not expected to show
excessive acid consumption in a moderately acidic leach and may also be amenable to alkaline leaching.
The Company is undertaking further testwork to investigate the acid/alkaline leaching characteristics of
the Firawa ore in order to advance pre-feasibility work on a possible uranium leaching extraction
operation for the Firawa Project. Current testing includes examining the effect of acid strength and
temperature, optimal grind size and potential for beneficiating the ore via gravity separation or
screening.
A decision on whether to conduct further drilling will be considered once the results of leach-testing
are known.
Sale of Australian Copper-Cobalt Projects
Forte Energy remains focussed on the exploration and development of its portfolio of uranium projects in
West Africa as the basis for the establishment of a substantial long-term uranium business. Accordingly
the Company has entered into agreements for the sale of its two copper-cobalt projects in Australia.
On 11 December 2009, the Company announced the sale of its 50% interest in the Maroochydore Copper-Cobalt
project to the joint venture exploration manager and joint venture partner, Birla Maroochydore Pty Ltd a
wholly owned subsidiary of Aditya Birla Minerals Ltd (ASX: ABY). Under the terms of the agreement, Forte
Energy will receive a cash payment of A$2,000,000 and be released from any current or future obligations
under the joint venture agreement.
The formal sale agreement has been signed and is subject to obtaining Ministerial Consent under the
Mining Act and Foreign Investment Review Board (FIRB) approval, with settlement expected around the end
of February 2010.
The Company announced on 18 August 2009 that it had entered into an Option Agreement with Element
Minerals Australia Pty Ltd ("Element") for the sale of the Millenium Copper-Cobalt Project in Queensland,
Australia.
Under the terms of the agreement, Element paid A$20,000 to Forte Energy for a six-month option to acquire
the mining leases of the Millenium Copper Project, with an option to extend the agreement for a further
six months for an additional A$20,000.
The exercise price under the agreement is for a cash payment of A$20,000 (during the first option period)
and, at Element's discretion, either ASX-listed shares to the value of A$160,000 in Elementos Ltd (ASX:
ELT) or its parent company, Orocobre Ltd (ASX: ORE) or an additional cash payment of A$160,000.
Corporate
During the quarter, the Company granted a total of 6,000,000 unlisted directors' options in accordance
with shareholder resolutions approved at its AGM. There were also 6,500,000 consultants' options
exercised during the quarter, raising additional funds of $437,500.
Mark Reilly
Managing Director
29 January 2010
RFC Corporate Finance - Nomad
Stuart Laing Tel: +618 9480 2506
Alastair Stratton
Matrix Corporate Capital LLP Tel: +44 20 3206 7000
Conduit PR
Jos Simson/Emily Fenton Tel: +44 (0) 207 429 6603
Note:
The information in this report that relates to exploration results in West Africa is based on information
compiled by Mr. Bosse Gustafsson of Forte Energy NL and Mr. Doug Corley of Coffey Mining Ltd. Mr.
Gustafsson and Mr. Corley have sufficient experience which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which they have undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Mineral
Resources and Reserves". Mr. Gustafsson is a member of the European Federation of Geologists a Recognised
Overseas Professional Organisation ("ROPO"). Mr Bosse Gustafsson is a full time Technical Director of
Forte Energy NL and is responsible for exploration activities in Mauritania and Guinea. Mr. Gustafsson
and Mr. Corley consent to the inclusion in this report of the matters based on their information in the
form and context in which it appears.
Downhole gamma logging/probing of drill holes provides a powerful tool for uranium companies to explore
for, and evaluate, uranium deposits. Such a method measures the natural gamma rays emitted from material
surrounding a drill hole out to around 0.5 metre from its centre - the gamma probe is therefore capable
of sampling a much larger volume than that which would normally be recovered from a core or RC hole.
These measurements are used to estimate uranium concentrations with the commonly accepted initial
assumption being that the uranium is in (secular) equilibrium with its daughter products (or radio-
nuclides) which are the principal gamma emitters. If uranium is not in equilibrium (viz. in
disequilibrium) - as a result of the redistribution (depletion or enhancement) of uranium and/or its
daughter products - then the true uranium concentration in the holes logged using the gamma probe will be
higher or lower than those reported in the announcement.
Total count gamma logging does not account for energy derived from thorium and potassium but is
calibrated on the uranium band and factor applied to account for the average effect of thorium and
potassium and thus the result is expressed as an equivalent value or ppm eU308. The logging programme was
undertaken by Poseidon Geophysics (Pty) Ltd utilising an Auslog Logging System using instruments
calibrated at Pelindaba, South Africa, an IAEA accepted and approved standard facility. Data was
converted from raw counts per second of natural gamma rays to eU3O8 using the calibration constant
obtained from measurements made at the Pelindaba calibration borehole. Poseidon Geophysics carried out
regular checks to validate the accuracy of probe data using a test hole, BNR14, located on site. Uranium
mineralisation grades through this report annotated with a sub-prefix 'e' have been reported as uranium
equivalent grades derived from downhole gamma ray logging results and should be regarded as
approximations only.
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
FORTE ENERGY NL
ABN Quarter ended ("current quarter")
59 009 087 852 31 December 2009
Current quarter Year to date
Cash flows related to operating activities A$'000 (6 months)
A$'000
1.1 Receipts from product sales and related debtors - -
1.2 Payments for (a) exploration and evaluation (1,917) (3,531)
(b) development - -
(c) production - -
(d) administration (654) (1,391)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature
received 43 98
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 (2,528) (4,824)
Cash flows related to investing activities
1.8 Payment for purchases of:
(a) prospects - -
(b) equity investments - -
(c) other fixed assets (48) (49)
1.9 Proceeds from sale of:
(a) prospects - 20
(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) - -
Net investing cash flows (48) (29)
1.13 Total operating and investing cash flows (2,576) (4,853)
(carried forward)
Consolidated statement of cash flows
1.13 Total operating and investing cash flows (2,576) (4,853)
(brought forward)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 421 4,730
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 - Settlement of Guarantee
Net financing cash flows 421 4,730
Net increase (decrease) in cash held (2,155) (123)
1.20 Cash at beginning of quarter/year to date 8,307 6,299
1.21 Exchange rate adjustments to item 1.20 (61) (85)
1.22 Cash at end of quarter 6,091 6,091
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
Aggregate amount of payments to the parties included in item 228
1.2
Aggregate amount of loans to the parties included in item 1.10 0
Explanation necessary for an understanding of the transactions
Salaries and rental of office premises
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
Nil
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 Nil
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 Nil N/A
3.2 Credit standby arrangements Nil N/A
Estimated cash outflows for next quarter
$A'000
4.1 Exploration and evaluation 1,500
4.2 Development 0
Total 1,500
Reconciliation of cash
Reconciliation of cash at the end of the quarter Current quarter Previous quarter
(as shown in the consolidated statement of cash $A'000 $A'000
flows) to the related items in the accounts is as
follows.
5.1 Cash on hand and at bank 4,091 6,307
5.2 Deposits at call 2,000 2,000
5.3 Bank overdraft - -
5.4 Other (provide details) - -
Total: cash at end of quarter (item 1.22) 6,091 8,307
Changes in interests in mining tenements
Tenement Nature of interest Interest at Interest at
reference (note (2)) beginning of end of
quarter quarter
6.1 Interests in mining Mauritania: Relinquished:
tenements
relinquished, 486 Ghaliamane Sud 100% 0%
reduced or lapsed 487 Gnaliamane Nord 100% 0%
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.
Total number Number quoted Issue price Amount
per security paid up
(see note 3) per
(cents) security
(see note
3) (cents)
7.1 Preference +securities
(description)
7.2 Changes during quarter
(a) Increases through
issues
(b) Decreases through
returns of capital, buy-
backs, redemptions
7.3 +Ordinary securities 571,158,031 571,158,031
2,250,000 - 25 1
7.4 Changes during quarter
(a) Increases through
issues
Issue for cash
(b) Decreases through
returns of capital, buy-
backs
7.5 +Convertible debt
securities (description)
7.6 Changes during quarter
(a) Increases through
issues
(b) Decreases through
securities matured,
converted
7.7 Options (description and Exercise Expiry
conversion factor) price date
(cents)
7,500,000 - 5.5 19/5/10
2,000,000 - 5.5 29/11/10
2,000,000 - 7.5 3/05/10
5,000,000 - 11.0 21/12/12
3,000,000 - 10.0 17/12/13
6,000,000 - 20.0 23/12/12
7.8 Issued during quarter 6,000,000 - 20.0 23/12/12
7.9 Exercised during quarter 2,500,000 - 5.5 30/06/10
4,000,000 - 7.5 3/05/10
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: ......................................................... Date: 29 January 2010.
Company Secretary
Print name: ....Murray Wylie...............................
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.
Forte Energy NL