FORTE ENERGY NL
ACN 009 087 852
ASX/AIM CODE: FTE,
Telephone: +618 9322 4071, Fax: +618 9322 4073
Quarterly Report
March 2010
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
- High-grade assay results received from 5,400m diamond core resource drilling program completed
at Bir En Nar Uranium Project with assays of up to 6,310ppm U3O8 received
- 5,000m R/C drilling program at nine prospects across the northern and southern licence areas
completed ahead of schedule with encouraging preliminary field results observed. All radioactive
samples have been sent for analysis
- Maiden JORC resource for Bir En Nar Uranium Project expected to be announced shortly following
receipt of final assay results
- Bir En Nar site visited by representative of Coffey Mining in preparation for estimation of the
initial JORC code-compliant resource
Uranium Exploration - Guinea
- Encouraging metallurgical test results from Firawa Project indicate potential for economic
recovery from leaching, with further pre-feasibility optimisation studies continuing
Copper-Cobalt Projects - Australia
- Sale of 50% interest in Maroochydore JV Copper Project in Western Australia to Aditya Birla
Minerals Ltd completed, raising A$2M
- A$20,000 received in February from Elementos Ltd for a 6-month extension of its option to
acquire the Millenium Copper/Cobalt project in Queensland, Australia
Republic of Mauritania, West Africa
During the Quarter, the Company continued to focus its exploration efforts on its uranium exploration
permits at Bir En Nar and near Bir Moghrein in the Zednes region of northern Mauritania.
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/fte_0504_fig_1.pdf
The Bir En Nar prospect is a 900 metre long radioactive zone averaging 50-70 metres in width which
follows a tectonic structure in a north-west to south-east direction. A smaller parallel zone occurs a
few hundred metres to the south-west.
A 5,400 metre program comprising 50 holes of resource diamond core drilling was completed at Bir En Nar
during the Quarter, following on from an initial 4,000 metre Reverse Circulation drilling program
undertaken in 2007 and recent geophysical ground surveys.
Drilling of around 4,600m of priority holes in the latest Bir En Nar program was completed in early
January 2010. However, an additional 7 holes were then drilled in order to complete a more extensive 35 x
35 metre sampling grid to enable the resource classification to be undertaken to a depth of 100 metres.
After experiencing delays in obtaining customs clearance and transporting of the samples for analysis,
the Company decided to send samples from the remaining 21 of the 50 holes to Perth, Australia to expedite
processing. An initial JORC code-compliant resource for Bir En Nar, to be calculated by external
consultants Coffey Mining, is expected to be published shortly.
To view Fig.2 Resource drilling program at Bir En Nar, please open the following link in a
new window: http://media3.marketwire.com/docs/fte_0504_fig_2.pdf
The area is dominated by granites of different modes in an early proterozoic domain. The best parts of
the mineralisation occur in the vicinity of a characteristic fine-medium grained granite.
The mineralisation occurs on both sides of a North-West trending fracture zone. Orientated in-fill core
drilling has given a better understanding of the mineralisation where the best part is composed of 5-6
separate bodies within a 100m wide steeply dipping zone. Two near horizontal faults slightly offset the
bodies by about 10 metres.
Results from 2007 drilling included seven holes containing intercepts exceeding 5,000ppm eU3O8, with a
maximum intercept of 1.55m at 18,280ppm eU3O8.
A summary of the best assays announced to date from the 2009/10 diamond drilling program is provided
below:
---------------------------------------------------------------------------------------------------------
Drillhole from to length m U ppm from to length m U ppm
---------------------------------------------------------------------------------------------------------
BNRD001 26 33 7 516 including 26 27 1 1,810
---------------------------------------------------------------------------------------------------------
BNRD002 22 38 16 1,617 including 27 35 8 2,470
---------------------------------------------------------------------------------------------------------
BNRD003 7 12 5 1,038 including 7 8 1 1,870
---------------------------------------------------------------------------------------------------------
BNRD004 89 98 9 607 including 90 91 1 1,740
---------------------------------------------------------------------------------------------------------
BNRD005 88 92 4 1,711 including 90 91 1 4,410
---------------------------------------------------------------------------------------------------------
BNRD006 100 108 8 430 including 103 105 2 1,175
---------------------------------------------------------------------------------------------------------
BNRD007 151 156 5 2,326 including 154 155 1 4,890
---------------------------------------------------------------------------------------------------------
BNRD012 129 137 8 580 including 134 135 1 1,600
---------------------------------------------------------------------------------------------------------
BNRD016 82 85 3 1,729 including 83 84 1 4,160
---------------------------------------------------------------------------------------------------------
BNRD017 73 78 5 3,096 including 75 76 1 6,310
---------------------------------------------------------------------------------------------------------
BNRD021 43 48 5 1,334 including 45 46 1 5,430
---------------------------------------------------------------------------------------------------------
BNRD023 31 50 19 576 including 33 40 7 1,129
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BNRD023 67 85 18 525 including 70 71 1 3,690
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BNRD027 39 42 3 2,290 including 40 41 1 5,030
---------------------------------------------------------------------------------------------------------
BNRD029 88 100 12 374 including 91 92 1 4,120
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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, Forte Energy carried out extensive field surveys at a number of uranium anomalies contained
within its 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.
Later activity concentrated on the Leg Beija anomaly 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.
It was recognised from the field surveys that two of the prospects did not show up on previous airborne
surveys. 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.
The surveys were completed in February 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.
Based on results from the 2009/10 field surveys, the Company commenced an RC short-hole drilling program
in February to test nine of the most prospective anomalies. The drilling campaign, which comprised 300
holes totalling 5,000 metres, has been completed successfully and ahead of schedule.
Assay samples have been despatched for analysis to follow up promising initial field readings from
handheld scintillometers and observations of uranium mineralisation.
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/fte_0504_fig_3.pdf
The RC drilling program is used to test promising surface uranium occurrences. Results from chemical
analyses will identify those prospects that may be dismissed and those that justify further
investigation, including follow-up RC drilling.
New RC drill targets are also expected to be identified after further detailed ground surveys on
remaining anomalies is completed.
Republic of Guinea, West Africa
In July 2009, Forte Energy announced an initial JORC-code compliant uranium resource for its 100%-owned
Firawa Uranium Project in Guinea. 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. There is potential for
the resource to be increased as the deposit remains open along strike and down dip.
The Company has been undertaking initial metallurgical testing to assess the deposit for potential heap
leach recovery. Following the encouraging results received to date, Forte Energy has forwarded additional
Firawa samples to Mineral Engineering Technical Services Pty Ltd ("METS") which is carrying out further
leach testing as a precursor to prefeasibility studies.
The investigation has so far shown that almost all uranium is associated with crandallite. Further
testing is investigating the effects of acid concentration, temperature and grind size and potential for
upgrading the ore with gravity separation, to optimise the uranium extraction from the crandallite.
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.
Reducing the iron content with gravity separation before leaching will further improve the recovery.
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.
In February 2010, the Company completed 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 received a cash payment of A$2,000,000 and was released
from any current or future obligations under the joint venture agreement.
Forte Energy entered into an Option Agreement in August 2009 for the sale of its Millenium Copper/Cobalt
project near Cloncurry in Queensland, Australia. In February 2010 the Company received A$20,000 in cash
from Elementos Ltd (ASX: ELT) for a six month extension to the Option Agreement for the purchase of the
Millenium project until 7 August 2010.
Under the terms of the agreement, should Elementos elect to exercise its option to purchase the project,
Forte Energy will receive a further A$160,000 either in shares in Elementos or in cash, at the election
of Elementos.
The June Quarter promises to be a significant period for Forte Energy, with the imminent JORC resource
announcement expected for Bir En Nar uranium prospect and assay results to come from the recently
completed drilling of nine other uranium prospects in Mauritania.
Mark Reilly
Managing Director
30 April 2010
For further information contact:
Mark Reilly, Managing Director
Forte Energy N.L. Tel: +44 (0) 207 887 1557
RFC Corporate Finance - Nomad
Stuart Laing Tel: +61 (0) 8 9480 2506
Alastair Stratton/Tim Graham
Matrix Corporate Capital LLP Tel: +44 (0) 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 March 2010
----------------------------------------
Current quarter Year to date
Cash flows related to operating activities A$'000 (9 months)
A$'000
----------------------------------------
1.1 Receipts from product sales and related debtors - -
1.2 Payments for (a) exploration and evaluation (1,991) (5,650)
(b) development - -
(c) production - -
(d) administration (452) (1,875)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature
received 114 252
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 (2,329) (7,273)
-------------------------------------------------------------------------------------------------
Cash flows related to investing activities
1.8 Payment for purchases of:
(a) prospects - -
(b) equity investments - -
(c) other fixed assets (11) (75)
1.9 Proceeds from sale of:
(a) prospects 2,000 2,000
(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 1,989 1,925
----------------------------------------
1.13 Total operating and investing cash flows (340) (5,348)
(carried forward)
-------------------------------------------------------------------------------------------------
Consolidated statement of cash flows
-------------------------------------------------------------------------------------------------
1.13 Total operating and investing cash flows (340) (5,348)
(brought forward)
-------------------------------------------------------------------------------------------------
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. - 4,399
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 - 4,399
-------------------------------------------------------------------------------------------------
Net increase (decrease) in cash held (340) (949)
1.20 Cash at beginning of quarter/year to date 5,945 6,628
1.21 Exchange rate adjustments to item 1.20 (27) (101)
----------------------------------------
1.22 Cash at end of quarter 5,578 5,578
-------------------------------------------------------------------------------------------------
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 229
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 2,024 4,091
--------------------------------------------
5.2 Deposits at call 3,554 2,000
--------------------------------------------
5.3 Bank overdraft -
--------------------------------------------
5.4 Other (provide details) -
-------------------------------------------------------------------------------------------------
Total: cash at end of quarter (item 1.22) 5,578 6,091
-------------------------------------------------------------------------------------------------
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
tenements
relinquished,
reduced or lapsed
------------------------------------------------------------------
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
----------------------------------------------------------
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:............................................... Date: 30 April 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