march 2017 quarterly report 11 april 2017 - legend...

MARCH 2017 QUARTERLY REPORT

MARCH 2017 QUARTERLY REPORT 11 April 2017

LEGEND MINING LIMITED

ASX Symbol: LEG

ABN 22 060 966 145

Level 1, 8 Kings Park Road

West Perth

Western Australia 6005

PO Box 626

West Perth

Western Australia 6872

Phone: +61 8 9212 0600

Facsimile: +61 8 9212 0611

Email:

[email protected]

Website:

www.legendmining.com.au

CONTACT

Mr Mark Wilson

Managing Director

Mr Derek Waterfield

Executive Director Technical

PROJECTS

Rockford - Fraser Range: Nickel-Copper Gold

HIGHLIGHTS

• EM surveying commences at Area N aimed at

defining RC/diamond drill targets

• Purchase of two tenements covering 238km2 in

prospective Fraser Zone

• R&D Tax refund of $1,037M received in March 2017

• March 2017 quarterly interest payment of $30K

received from Jindal on 5 April 2017

OVERVIEW

The March 2017 quarter has been dogged by wet weather

delays to planned field activities of EM surveying and aircore

drilling. The total time lost has been of the order of six weeks.

As of today’s date, the Trans Access Road (the only practical

vehicle access to the project) remains closed to all traffic. Once

the road is opened Legend is ready to immediately resume our

focussed and systematic exploration programmes.

The two new tenements purchased during the quarter are

complimentary to the project, in that they are contiguous with

existing tenure and planned work will be an extension of

adjoining activities. The new tenements also increase the

project’s exposure to the western stratigraphy of the Fraser

Zone.

The receipt of the research and development tax refund

($1.037M) in March 2017 and the Jindal interest payment

($30K) on 5 April 2017 were both welcome additions to

Legend’s treasury.

mailto:[email protected]

http://www.legendmining.com.au/


1. ROCKFORD PROJECT – (Fraser Range District) Nickel-Copper, Gold

Legend’s Rockford Project is located in the highly prospective Fraser Range district of Western

Australia and covers a total area of 2,792.5km2, see Figure 1 The majority of the project (2,530km2),

comprising seven contiguous granted exploration licences, is the subject of a joint venture between

Legend (70%) and Creasy Group (30%), with Legend operator and manager of the joint venture.

The remaining 262.5km2 is 100% owned by Legend and includes two granted exploration licences

covering 238.5m2 purchased during the quarter.

Significant delays to field programmes were experienced throughout the quarter due to wet weather

resulting in road closures and difficulty in equipment movement throughout the project. Exploration

undertaken during the March 2017 quarter included; the recommencement of moving loop

electromagnetic surveying (“MLTEM”) over target Area N, the completion of the south Rockford

detailed gravity survey (6,068 stations) and the planning of a regional aircore drilling programme.

Figure 1: Rockford Project and New Tenement Location


Area N

Geophysical crews returned to site in March 2017 and commenced MLTEM surveying at Area N,

focussing on better defining the two previously identified conductors N1-N2. Accurate modelling of

these two conductors was not possible late last year, necessitating infill MLTEM and minor fixed loop

electromagnetic (“FLTEM”) surveying to assist with the modelling and finalising of RC/diamond drill

targets.

A detailed (100m x 100m) gravity survey over Area N was also completed during February 2017 to

provide better definition of the 3km x 600m NE-SW trending feature, see Figure 2. The gravity survey

has confirmed the presence of a N-S structure (evident in the aeromagnetic data) coinciding with the

position of the N1 conductor. The combination of the MLTEM conductors, aeromagnetics/gravity

data and coincident N-S structure all make N1 a compelling RC/diamond drilling target.

Figure 2: Area N Conductors on Aeromagnetics (left) and Gravity (right) Images

(Note: Conductor N1 defined in preliminary modelling only, while Conductor N2 requires

infill MLTEM to enable final modelling)

Regional MLTEM Surveys

After Area N, the geophysical crew will move to Areas L, M and O, all located in the northern part of

the Rockford Project, see Figures 3 & 4. These three features were selected from interpretation of

detailed aeromagnetic and gravity datasets and represent areas which may contain intrusive

mafic/ultramafic bodies. Regional aircore drill traverses are proposed over Areas L, M and O and

their immediate surrounds, and will be guided by the ongoing MLTEM surveys.


Figure 3: Rockford Project Location and MLTEM Target Areas

Figure 4: Areas L, M and O over Aeromagnetics with Proposed Aircore Traverses


Fraser Range - Tenement Purchase

During the quarter, Legend purchased two granted exploration licences from Musgrave Minerals

Limited (ASX: MGV) (“Musgrave”) located in the Fraser Range district of Western Australia, see

Figure 1. The tenements cover an area of 238.5km2 and are contiguous with Legend’s Rockford

Project. Legend’s total tenement holding in the highly prospective Fraser Zone is now 2,792.5km2

and comprises nine exploration licences and three exploration licence applications.

Legend purchased a 100% interest in tenements E28/2404 and E28/2405 from Musgrave

(settlement on 28 February 2017) for a consideration of:

• 10,000,000 (ten million) freely tradeable fully paid ordinary Legend shares,

• 10,000,000 (ten million) unlisted options to subscribe for a fully paid ordinary Legend share

at an exercise price of $0.04 each, exercisable by 30 March 2021.

The purchase included an exploration data package comprising; detailed aeromagnetic, gravity and

ground electromagnetic survey data, along with valuable geological information from aircore/RC

drilling. Legend has identified several targets of interest from aeromagnetic and gravity data

interpretation on the new tenements and will integrate exploration activities within the larger Rockford

Project programme. Follow up work will include regional high powered MLTEM surveys and aircore

drilling aimed at defining RC/diamond drill targets.

Gravity Survey

A detailed gravity survey comprising 6,068 stations and covering 435km2 over the southern portion

of the Rockford Project was completed during the quarter. The survey involved initial 800m x 100m

spaced stations with infill to 400m x 100m over areas of interest. The data will be used in conjunction

with existing detailed aeromagnetic data to focus the next phase of exploration and target generation

in the region.

Future Programmes

• FLTEM surveying at Area N to define RC/diamond drill targets at conductors N1 and N2.

• Undertake MLTEM surveys over Areas L, M and O.

• Undertake a 50 hole, ~3,500m aircore drilling programme at north Rockford.


2. CORPORATE

2016 Tax Return – Research and Development (“R&D”) Tax Refund Legend received the R&D tax refund of $1.037 million in March 2017. The amount was claimed in the 2016 Tax Return (which was submitted on 11 January 2017) based upon the innovative geo-sensing techniques being employed at the Rockford Project. Cameroon Project

On 4 January 2017, Legend announced that it had received a request from Jindal Steel and Power

(Mauritius) Limited (“Jindal”) to consider a further deferral of the payment of the final amount of $3

million owing to Legend from the sale of the Cameroon Iron Ore project. At that time, Legend

agreed to this request in principle, and expected to report to the ASX as soon as an agreement of

new payment terms was reached. Legend has since been advised by Jindal that it is undergoing

a major debt rescheduling with its creditors and is unable to finalise any rescheduling of the Legend

debt until it completes its’ own debt rescheduling, expected in the June 2017 quarter.

As a result, out of the abundance of caution and in light of the fact that Jindal did not pay the

receivable in December 2016 as previously agreed, the directors decided to provide for the Jindal

receivable in full (see ASX announcement 28 March 2017). Despite this provision, Legend received

the March 2017 quarter interest payment from Jindal on 5 April 2017, giving further support to

Legend’s expectation of negotiating a new repayment schedule for the $3 million in the June 2017

quarter.

2016 Annual Report The Legend 2016 Annual Report was released to the ASX on 31 March 2017. Competent Person Statement The information in this report that relates to Exploration Results is based on information compiled by Mr Derek Waterfield, a Member of the Australian Institute of Geoscientists and a full time employee of Legend Mining Limited. Mr Waterfield has sufficient experience that is relevant to the styles of mineralisation and types of deposit under consideration, and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Waterfield consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Visit www.legendmining.com.au for further information and announcements.

For more information:

Mr Mark Wilson Mr Derek Waterfield

Managing Director Executive Director - Technical

Ph: (08) 9212 0600 Ph: (08) 9212 0600

http://www.legendmining.com.au/


Appendix 1: Tenement Schedule as at 31 March 2017

Mining Tenements

Tenement

Reference

Location Interest at

beginning

of Quarter

Acquired /

Withdrawn

Interest at

end of

Quarter

Comments

E28/1718 Fraser Range, Western Australia 70% N/A 70% 70:30 JV







E28/2404* Fraser Range, Western Australia 0% Acquired 100% Purchased

E28/2405* Fraser Range, Western Australia 0% Acquired 100% Purchased

ELA28/2675 Fraser Range, Western Australia 0% Acquired 100% Application



ELA28/2638 Fraser Range, Western Australia 100% Withdrawn 0% Withdrawn



* Tenements not yet transferred

Farm-In or Farm-Out Arrangements

Tenement Reference

Location Interest at beginning of Quarter

Acquired / Withdrawn

Interest at end of

Quarter

Comments

None N/A N/A N/A N/A N/A

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+ See chapter 19 for defined terms 1 September 2016 Page 1

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

Legend Mining Limited

ABN Quarter ended (“current quarter”)

22 060 966 145 31 March 2017

Consolidated statement of cash flows Current quarter $A’000

Year to date (3months)

$A’000

1. Cash flows from operating activities

- - 1.1 Receipts from customers

1.2 Payments for

(404) (404) (a) exploration & evaluation

(b) development - -

(c) production - -

(d) staff costs (127) (127)

(e) administration and corporate costs (129) (129)

1.3 Dividends received (see note 3) - -

1.4 Interest received 45 45

1.5 Interest and other costs of finance paid - -

1.6 Income taxes paid - -

1.7 Research and development refunds 1,037 1,037

1.8 Other (provide details if material)

- Once off cost of R&D refund (168) (168)

1.9 Net cash from / (used in) operating activities 254 254

2. Cash flows from investing activities

- -

2.1 Payments to acquire:

(a) property, plant and equipment

(b) tenements (see item 10) - -

(c) investments - -





$A’000

(d) other non-current assets - -

2.2 Proceeds from the disposal of:

- - (a) property, plant and equipment

(b) tenements (see item 10) - -

(c) investments - -

(d) other non-current assets - -

2.3 Cash flows from loans to other entities - -

2.4 Dividends received (see note 3) - -

2.5 Other (provide details if material) - -

2.6 Net cash from / (used in) investing activities - -

3. Cash flows from financing activities

- - 3.1 Proceeds from issues of shares

3.2 Proceeds from issue of convertible notes - -

3.3 Proceeds from exercise of share options - -

3.4 Transaction costs related to issues of shares, convertible notes or options - -

3.5 Proceeds from borrowings - -

3.6 Repayment of borrowings - -

3.7 Transaction costs related to loans and borrowings - -

3.8 Dividends paid - -

3.9 Other (provide details if material) - -

3.10 Net cash from / (used in) financing activities - -

4. Net increase / (decrease) in cash and cash equivalents for the period

6,723 6,723 4.1 Cash and cash equivalents at beginning of

period

4.2 Net cash from / (used in) operating activities (item 1.9 above) 254 254

4.3 Net cash from / (used in) investing activities (item 2.6 above) - -

4.4 Net cash from / (used in) financing activities (item 3.10 above) - -





$A’000

4.5 Effect of movement in exchange rates on cash held - -

4.6 Cash and cash equivalents at end of period 6,977 6,977

5. Reconciliation of cash and cash equivalents

at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts

Current quarter $A’000

Previous quarter $A’000

5.1 Bank balances 227 227

5.2 Call deposits 6,750 6,750

5.3 Bank overdrafts - -

5.4 Other (provide details) - -

5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 6,977 6,977

Shares held in Artemis Resources Limited, Nemex Resources Limited and S2 Resources Limited at cost 1,501* 1,501

Total: cash, security deposits and other liquid assets held at cost at end of quarter 8,478# 8,478

* Market value 31 March 2017 $543,528 (31 December 2016 - $352,308).

# Does not include $3M receivable due from Jindal.

6. Payments to directors of the entity and their associates Current quarter $A'000

6.1 Aggregate amount of payments to these parties included in item 1.2 170

6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 Nil

6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2

Item 6.1 includes aggregate amounts paid to directors including salary, directors’ fees, consulting fees and superannuation.



7. Payments to related entities of the entity and their associates

Current quarter $A'000

7.1 Aggregate amount of payments to these parties included in item 1.2 Nil

7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 Nil

7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

N/A

8. Financing facilities available Add notes as necessary for an understanding of the position

Total facility amount at quarter end

$A’000

Amount drawn at quarter end

$A’000

8.1 Loan facilities Nil Nil

8.2 Credit standby arrangements Nil Nil

8.3 Other (please specify) Nil Nil

8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

N/A

9. Estimated cash outflows for next quarter $A’000

9.1 Exploration and evaluation 500

9.2 Development -

9.3 Production -

9.4 Staff costs 120

9.5 Administration and corporate costs 150

9.6 Other (provide details if material) -

9.7 Total estimated cash outflows 770



10. Changes in tenements (items 2.1(b) and 2.2(b) above)

Tenement reference and location

Nature of interest Interest at beginning of quarter

Interest at end of quarter

10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced

E28/2638

E28/2639

E28/2640

Relinquished

Relinquished

Relinquished

100%

100%

100%

Nil

Nil

Nil

10.2 Interests in mining tenements and petroleum tenements acquired or increased

E28/2675

E28/2676

E28/2677

E28/2404

E28/2405

Acquired

Acquired

Acquired

Acquired

Acquired

Nil

Nil

Nil

Nil

Nil

100%

100%

100%

100%

100%

Compliance statement

1 This statement has been prepared in accordance with accounting standards and policies which

comply with Listing Rule 19.11A.

2 This statement gives a true and fair view of the matters disclosed.

Sign here: Date: 11 April 2017 (Company secretary)

Print name: Tony Walsh

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 that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. By the Company signing this Appendix 5B, the Managing Director, in his capacity as Managing Director and as the person who performs the function of the Chief Financial Officer, declares that the Appendix 5B for the relevant quarter:

• presents a true and fair view, in all material respects, of the cashflows of the Company for the relevant quarter and is in accordance with relevant accounting standards;

• the statement given above is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and



• the Company’s financial records have been properly maintained and the Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

march 2017 quarterly report 11 april 2017 - legend...

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