+++++++++++++++++++++++++ QUARTERLY REPORT ON MINING AND EXPLORATION ACTIVITIES FOR THE QUARTER ENDED 31 DECEMBER 2002
CORPORATE DEVELOPMENT
EQUITY RAISING
The Company raised $1.1 million from a Share Purchase Plan together with $2.1 million from private placements. These funds were required for pre-shipment working capital for the commencement of production of our kaolin business.
BANK FUNDING
A further $700,000 was drawn against our structured $11.1 million fixed rate facility making total drawings to date $1.85 million. This facility allows for progress payments against production and operating hurdles.
An additional export post shipment bank discounting facility was arranged this quarter to cover all planned sales for the next two years.
Both the above bank facilities provide for very competitive funding costs to the Company.
OPERATIONS REVIEW
SKARDON RIVER KAOLIN BUSINESS
An annual single mining campaign was undertaken to excavate raw kaolin onto the wet plant stockpile during the dry season. 22,000 tonnes of good quality ore were mined and stockpiled. This fresh mining campaign fully validated ore quality expectations resulting from the prior exploratory drilling and thus provides surety to the geological model.
Skardon River Kaolin made its marketing debutat the International Coatings Exhibition in Guangdong, "Chinacoat 2002". Our booth attracted an overwhelming number of enquiries from Chinese and international paint companies which will be followed up next quarter. Also during the quarter an expanded number of potential distributors and agents have entered into discussions with the Company. The processing plant was prepared for commencement of production for January 2nd 2003 which is proceeding per plan.
The main focus forexploration and development this quarter has been on development of paper grade kaolin products at Skardon River. Similar work was undertaken by the prior owners (AKL), however, for various technical reasons Skardon River Kaolin has decided to virtually start this work afresh in order to properly document and characterize performance parameters as part of our quality control matrix.
MINATEK BUSINESS
Minatek continues to make steady progress with profits improvement. A fundamental business restructure is being planned for 2003 to further develop the better performing products and further discard low profit or low potential products. This is a continuing program of improvement. New product line tests conducted June - December 2002 were very successful with good market response. Production of lower value feldspar to the glass fibre industry has now ceased and is being replaced with higher value products. A total of 668 tonnes was produced for newcustomers and this will substantially increase in the next quarter.
C V Alexander CHAIRMAN ..................im in. topped up today ,yet i will rest when they hit .30
MSC Price at posting:
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