RRP - Realm Resources

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Realm Resources Limited (RRP) was relisted on the ASX with the strategy of introducing site-dedicated aluminium dross treatment plants to Australia and elsewhere as well as sourcing good quality resource sector projects. The company has an aluminium dross treatment plant located in Pietermaritzburg, South Africa and has recently diversified into the robust South African platinum sector via the acquisition of Realm Resources Limited.

http://www.realmresources.com.au

 

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MC - $9.2m
SP - 2.3c
Shares - 400m
Options - NQ
Cash - $1.3m

COMPLETION OF KATINGAN RIA PROJECT STUDY
 The Project’s Base Case open-cut 3Mtpa mine plan with a designed life of 15 years, is technically viable;
 The coal deposit is structurally simple and with a large area of relatively homogenous low strip-ratio coal minimising mining costs and establishing the projected life of mine FOB operating costs at USD39.2/t ;
 The quality of a raw coal product should satisfy the specifications for Indonesian 4,200kcal/kg (GAR) low sulphur coal and be readily accepted in rapidly growing markets in China, India, Korea and Thailand;
 Low Project start-up capital estimate of USD23M, implying a capital intensity of less than USD10/annual tonne, thereby minimising investment risk;
 Permitting is well advanced, supporting forecast production and ramp up from mid-2013;
 The Base Case mine plan NPV of USD156M (100%) at a 10% discount rate is most sensitive to coal price and least sensitive to capital expenditure;
 Potential to increase the quantity and quality of the resource definition and to better optimise the mine’s economics through additional exploration and engineering work.
The Company is now working to incorporate Xenith’s recommendations into a new technical programme that would, when taken with additional engineering studies, potentially allow for conversion of some JORC compliant coal resources to a JORC compliant reserve estimate and the production of a BFS.

AUD5M funding package secured
Realm Resources announce that its major shareholder Taurus Funds Management agreed to provide funding by way of a loan of up to A$5 million. The funds will be applied towards further resource/reserve definition drilling and Project optimisation activities, as well as general working capital.
The key terms of the loan are:
● Facility amount of up to A$5 million;
● The facility is unsecured;
● Interest rate of 8% p.a. payable quarterly in arrears and may, subject to agreement, be paid by way of issue of ordinary shares in Realm at the 5 day VWAP for ordinary shares;
● The facility is repayable on the earlier of the project equity raising or 30 September 2013;
● If Realm is issuing ordinary shares, Taurus may elect to convert their loan into ordinary shares at the same issue price per share as the equity raising;
● The lenders were entitled to a facility fee of 2% of the total facility amount and will be granted options over a total of 100,000,000 shares, exercisable at 5c per share at any time in the next 5 years (subject to the Company obtaining all necessary shareholder approvals under the Corporations Act and ASX Listing Rules); and
● Realm is required to use funds raised on the exercise of the options to repay any outstanding amounts under the facility.
This will fund Realm’s current exploration and permitting activities in Indonesia and Africa over the forthcoming 12 months and allow time for the company to schedule its projects with greater certainty on permitting and market conditions.


PLATINUM GROUP METALS Realm Resources (Pty) Ltd (RRP 74%)
The Company is continuing with its assessment of its options to maximise the value of the PGM portfolio. These may include sale, joint ventures or proceeding with further exploration and resource development work.

ALUMINIUM Alumicor SA Holdings (Pty) Ltd (RRP 74%)
Realm’s subsidiary, Alumicor SA, treats aluminium dross and returns aluminium to Hulamin Limited on a toll conversion fee basis.
Operations
During the quarter, Hulamin operations were disrupted by the failure of a motor on their Camps Drift hot line. The motor has since been repaired and the line has been operating normally since mid-June. This resulted in lower dross volumes being delivered to Alumicor. Management took the opportunity to accelerate planned maintenance on two of the furnaces during this period. Hulamin production is expected to normalise during the third quarter and this will result in increased dross throughput at Alumicor