September 2008 Quarterly Report

Transcription

1 September 2008 Millennium Minerals Limited is an emerging metals company focused on the exploration and development of a large tenement portfolio in the East Pilbara region of Western Australia. The highquality portfolio encompasses a significant molybdenum project and a large gold inventory. The East Pilbara is rapidly emerging as a new worldclass molybdenum province and modern exploration is likely to discover other significant metal deposits. Our vision To become a worldclass metals company, through the exploration, production and marketing of strategic minerals. October 2008 HIGHLIGHTS Ongoing drilling programme makes excellent progress and returns highly encouraging initial results Best intercept from Niton XRF analyses of core sample of 411 ppm Mo (including 1240 ppm Mo) Data obtained has significantly improved the geological understanding of the target zones Results to date reinforce the potential to discover a significant highgrade molybdenum deposit at the Millennium Project. Cash position as at 30 September of A$2.02 million Directors & Management Mr Barry Eldridge Chairman (non exec) Mr Andrew Law Managing Director Dr Michael Grigson Exploration Director Mr Clive Donner Director (non exec) Mr Ross Gillon Director (non exec) Mr Mark Freeman Company Secretary 1

2 MILLENNIUM MINERALS LIMITED EXPLORATION ACTIVITIES Reverse Circulation (RC) and diamond drilling continued throughout the Quarter at the Company s flagship Millennium Molybdenum Project. The drilling programme, which comprises up to 25 holes varying in depth between 120 and 800 metres and follows a comprehensive 72 line kilometre Induced Polarisation (IP) survey completed in May 2008 which defined significant new exploration targets adjacent to known molybdenum mineralisation. Highlights and important findings of the recent exploration activity include: significant progress made with current RC and diamond drilling program; data obtained from recent deep diamond coring of the mineralised zone defined in 2007 has profoundly improving the geologicaltarget model; encouraging signs of wallrock alteration and mineralisation encountered in shallow precollars above IP chargeability targets; and results to date reinforcing the potential to discover a significant highgrade molybdenum deposit at the Millennium Project. 2 Eastern Creek Golden GateGolden Gate 3 OspreyGriffon Beatons Creek Nullagine 1 Millennium Agate Golden Eagle Angela 0 10 Kilometers Location 1 Millennium 2 Northern Mozzies 3 Eastern Cookes Legend RC & diamond drilling Regional soil sampling 0 10 Kilometers Figure 1: Location of Exploration Activity 2

3 MILLENNIUM MINERALS LIMITED ADVANCED EXPLORATION Millennium Molybdenum Project Deep Target Drilling The 2008 drilling program is designed to test chargeability anomalies defined by the recent IP survey and to further investigate the molybdenum mineralisation intersected below the large Millennium molybdenuminsoil geochemical anomaly, which was discovered by drilling in Drilling Progress To date, 15 precollars and four diamond tails have been completed for an aggregate total of 2,300m of RC drilling and 708m of diamond coring. A number of earlier delays were encountered during the first round of precollar drilling, with hole deviations that resulted in a marked decrease in the precollar dip at depth. An electronic downhole survey tool is now stationed on site, and this has mitigated the delays during the second round of RC precollar drilling with regular surveying during drilling. Interim Results The location of holes drilled to date is shown in Figure 2, and the target parameters and results achieved for these holes is summarised in Table 1. It is important to note that the analytical results quoted in Table 1 have been derived using a Niton portable XRF analyser, and must be viewed as preliminary or semiquantitative in nature (see disclaimer for more detail). Samples selected on the basis of these preliminary results have been submitted to a Perth laboratory for complete pulverisation and more accurate, fusedbead XRF analyses. 3

4 MILLENNIUM MINERALS LIMITED Figure 2: Geological plan showing results of soil sampling and IP survey, and the location of drill holes 4

5 MILLENNIUM MINERALS LIMITED Table 1: Current drilling statistics and preliminary results Target Drill Hole Depth Results Comments Mineralisation defined in 2007 by soil sampling and drilling Untested Moin Soil anomaly, eastern part of Millennium area Eastern IP chargeability anomaly Western IP chargeability anomaly MIRD m HQ3 <ppm 50 ppm Mo 83 m diamond tail of 2007 RC hole. New model suggests hole drilled away from mineralisation. MIRD m RC 21 m grading 73 ppm New model m NQ3 Mo, from 219 m suggests hole 4 m grading 411 ppm Mo, from 346 m drilled away from mineralisation. (including 1240 ppm Mo) MIRC m RC No tail planned Dip too shallow at 21 MIRC0009 MIRD0011 MIRC0006 MIRC0007 MIRC0013 MIRC0014 MIRD m RC Tail pending 0202 m RC m NQ3 202 m RC No tail planned 196 m RC No tail planned 142 m RC Tail pending 137 m RC Tail pending 095 m RC m NQ3 8 m grading 72 ppm Mo, from 15 m depth 2 m grading 157 ppm Mo, from 15 m depth Tail target at 380 m <20 ppm Mo Hole not yet surveyed may have missed target <20 ppm Mo Hole not yet surveyed may have missed target 6 m grading 163 ppm Mo from 88 m 4 m grading 75 ppm Mo from 24 m 4 m grading 113 ppm Mo from 64 m Core analyses pending 2 m grading 50 ppm Mo from 89 m MIRC m RC Tail pending MIRC m RC Analyses pending MIRC m RC Analyses pending MIRC m RC Analyses pending MIRC m RC Analyses pending MIRC m RC <20 ppm Mo Hole not yet No tail planned surveyed may have missed target The most important results achieved to date have been for those holes that followed up on the broad zone of molybdenum mineralisation outlined by the soil sampling and drilling during 2007 (e.g. MIRC0001, which intersected 78m grading 0.015% Mo). The drill core from the two diamond tails drilled, namely MIRD0001 (an extension of the existing RC drill hole) and MIRD0012, have provided the first real insight into the geological setting and controls on 5

6 MILLENNIUM MINERALS LIMITED mineralisation in this area, as surface exposures of the strongly altered host rocks are practically nonexistent. As explained below, this information has lead to significant improvements in the geologicaltarget model for the Millennium area. At this stage, the drill holes directed at the strong (>20 msec) IP chargeability anomalies have not provided a definitive test of these targets, principally because only one diamond core tail (MIRD0015) has been drilled to final depth and, as outlined above, most precollars were finished at a shallow depth, short of their intended target. Based on experiences with IP surveys at other exploration properties, a drill section comprising at least three overlapping holes is required to reliably test IP chargeability. Nevertheless, some encouraging signs of wallrock alteration and molybdenum mineralisation have been encountered at shallow depth in the precollars. Refinement of Geological Model and Exploration Targets The geological model of the Millennium area has evolved significantly with the addition of detailed geological data from the recently completed diamond drill holes. This new subsurface data, in combination with more enlightened surface mapping, has lead to the recognition that the primary hosts of molybdenum mineralisation at Millennium (and the cause of the pronounced aeromagnetic anomalies) are intensely altered mafic and ultramafic volcanic rocks. It is now clear that the rock succession and geological architecture in the Millennium area is markedly different to the surrounding sedimentary rock domains of the Mosquito Creek Belt. Rather than being typical of the greenstone belts of Pilbara region, it appears that the structural framework of the Millennium area more closely resembles that of other richly mineralised, younger Archaean terranes, such as in the Kalgoorlie area and in parts of Canada. Whilst the Company continues to recognise the Millennium Fault as a fundamentally important structure within the Millennium area, it is now clear that the composition and discordant trend of the hangingwall rock units has profoundly influenced the geometry and grade of the molybdenum mineralisation (Fig. 2). Some geometric features of the hangingwall rock domain, such as marked changes of the inclination of layering in the area of richest mineralisation, point strongly to the presence of an igneous intrusion(s) at depth. Such an intrusion may well have been the source of mineralising fluids and could contain the highest molybdenum grades. Overall, the improvements in geological understanding have put the results of recent drilling into context, and demonstrate that the best zones of mineralisation are yet to be tested. Drilling Schedule Another round of RC drilling will be undertaken early in the next Quarter to ensure that the newly identified target zones are tested by the ongoing program of deep diamond core tail drilling. At this stage, it is likely that the mix of RC and diamond core drilling will vary from the original program design, with fewer diamond tails (~10) drilled from a wider selection of RC precollars (up to 25). It is envisaged that the drilling program will be finished in mid November. 6

7 MILLENNIUM MINERALS LIMITED CORPORATE ACTIVITIES The September Quarter was relatively quiet on the Corporate front, with most of the Company s attention focusing on the landmark drilling campaign at the Millennium Project, as outlined above. Cash Position Millennium s cash position as at September 30 was A$2.02 million. These funds will continue to be utilised to finance the current drilling programme and to execute the Company s exploration strategy of defining a potentially worldclass molybdenum deposit in the East Pilbara region. The funds will also be used to identify additional regional gold exploration targets to enhance the current gold resource and reserves inventory. Millennium Minerals is acutely aware of the current credit situation and as such, the preservation of our cash assets is of the utmost importance. The Company has, and will continue to develop strategies to ensure our expenditure is sustainable. Rights Issue Millennium is currently in the process of completing a Rights Issue entitling Shareholders as at 30 September to purchase shares on a prorata, oneforfour basis at 4 cents per share. Shareholders that subscribe for the Issue will also receive one (1) free attaching option exercisable at 5 cents on or before 30 September The prorata nonrenounceable Rights Issue, encompassing both ordinary shares and options, will raise up to $2.36m, with funds to be utilised for exploration and resource work on the Millennium Molybdenum and Nullagine Gold Projects. To assist Shareholders, the Company agreed to extend the closing date of the Rights Issue to 7 November Shareholders who require an entitlements form should contact the Company as soon as possible. Key Dates for Rights Issue Event Date Closing Date 5.00pm (WDT) 7 November 2008 Securities quoted on deferred settlement basis 10 November 2008 Despatch of holding statements 17 November 2008 Date of quotation of Securities issued under the Rights issue 18 November

8 Issue of Incentive Options MILLENNIUM MINERALS LIMITED In July, the Board resolved to issue 1,800,000 Options to key personnel. The options are exercisable at 29 cents on or before 12 November 2011 in accordance with the employee share option plan. The issue of these options preserves the cash resources of the Company and at the same time provides an added incentive for key personnel. ENDS Enquiries: Mr. Andrew Law Managing Director Dr. Mike Grigson Exploration Director Ground Floor 24 Outram St West Perth WA 6005 Postal: PO Box 117 West Perth WA 6872 T: F: W: Competent Persons Statement The information in this report that relates to Exploration Results is based on information compiled by Dr Michael Grigson, who is a Member of the Australasian Institute of Mining and Metallurgy. Dr Grigson is a full time employee of Millennium Minerals Limited. Dr. Grigson has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to be qualified as a Competent Person as defined by the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Grigson consents to his inclusion in the report of the matters based on his information in the form and context in which it appears. QA/QC Statement Molybdenum analytical results quoted in this report have been obtained using a Niton XLt 592 portable XRF analyser and must be viewed as preliminary or semiquantitative. The analyses were conducted on 3 kilogram riffle split subsamples of 35 kilogram, 1 metre RC samples, and on 100 gram pulverised subsamples split from jawcrushed, 1 metrelength, halfcore samples weighing approximately 3 kilograms. About Millennium Minerals Limited Millennium Minerals Limited is an emerging metals company focused on the exploration and development of a large tenement portfolio in the East Pilbara region of Western Australia. The highquality portfolio encompasses a significant molybdenum project and a large gold inventory. The East Pilbara is rapidly emerging as a new worldclass molybdenum province and modern exploration is likely to discover other significant metal deposits. Millennium s vision is to become a worldclass metals company, through the exploration, production and marketing of strategic minerals. 8

9 Appendix 5B Rule 5.3 Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98. Name of entity Millennium Minerals Limited ABN Quarter ended ( current quarter ) September 2008 Consolidated statement of cash flows Cash flows related to operating activities Current quarter Year to date (9 months) 1.1 Receipts from product sales and related debtors 1.2 Payments for (ai) exploration and evaluation (aii) prepayment of drilling costs (b) development (c) production (d) administration (941) (533) (364) (2,569) (533) (1,231) 1.3 Commission received 1.4 Interest and other items of a similar nature received Rent income received Interest and other costs of finance paid (15) (45) 1.7 Other Net Operating Cash Flows (1,748) (3,996) Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets (d)security deposits 1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets (d)security deposits (10) 360 (311) (52) Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (Commission paid on the sale of surplus assets) Net investing cash flows Total operating and investing cash flows (carried forward) (1,398) (3,984) Page 1 of 5

10 1.13 Total operating and investing cash flows (brought forward) Cash flows related to financing activities (1,398) (3,984) 1.14 Proceeds from issues of shares, options, etc Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (Due Diligence fees re financing Gold mining Feasibility Study) Net financing cash flows Net increase (decrease) in cash held (1,398) (3,984) 1.20 Cash at beginning of quarter/year to date 3,417 6, Exchange rate adjustments to item Cash at end of quarter 2,020 2,020 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' Aggregate amount of payments to the parties included in item Aggregate amount of loans to the parties included in item Explanation necessary for an understanding of the transactions Non Executive Directors and Consulting fees paid at commercial rates & Managing Director s remuneration Noncash 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 None 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 None Page 2 of 5

11 Financing facilities available Add notes as necessary for an understanding of the position. Amount available Amount used 3.1 Loan facilities Credit standby arrangements Estimated cash outflows for next quarter 4.1 Exploration and evaluation Development 0 Total 890 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 accounts is as follows. Current quarter Previous quarter 5.1 Cash on hand and at bank Deposits at call 1,961 2, Bank overdraft 5.4 Other (provide details) Total: cash at end of quarter (item 1.22) 2,020 3,417 Changes in interests in mining tenements 6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased Tenement reference Nature of interest (note (2)) Interest at beginning of quarter Interest at end of quarter Nil Nil Page 3 of 5

12 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. 7.1 Preference + securities (descr) Total number Number quoted Issue price per security (see note 3) (cents) Amount paid up per security (see note 3) (cents) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemption s Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks Convertible debt securities (description) 236,454, ,454, ,143 Conversion $ 35 cents Maturity 31 Jan Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options (description and conversion factor) 545,455 30,200, cents Exercise price 29 cents (11.2m) 30 cents (3.5m) 23 cents (5m) 20 cents (8.5m) 20 cents (2.5m) 31 Jan 09 Expiry date 19 Dec Oct Dec Oct Feb Issued during quarter 1,800, cents (1.8m) 19 Dec Exercised during quarter 7.10 Expired during quarter 140, , cents (0.14m) 29 cents (0.1m) 20 Sept Jul Debentures (totals only) 7.12 Unsecured notes (totals only) Page 4 of 5

13 Compliance statement 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Law 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: 31 October 2008 Company Secretary Print name: Mark Freeman 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 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. == == == == == Page 5 of 5