Malachite Resources NL

Published : July 14th, 2016

Quarterly Activities and Cashflow Reports - June 2016

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Keywords :   Bars | Mines | Silver | Water |

Quarterly Activities and Cashflow Reports - June 2016


QUARTERLY REPORT for the period ending 30 June 2016


Issued Shares: 1,132,914,821

ABN: 86 075 613 268


Terry Cuthbertson James Dean Andrew McMillan

Top Shareholders Mr Lindsay Jones Olhoc Pty Ltd

Morrison Charity Trustee Ltd

Head Office

Malachite Resources Limited Suite 2, Level 10

8-10 Loftus St


T: +61 (0)2 9251 0032

F: +61 (0)2 9475 0439

E: [email protected] W:


  • Lorena Gold Project:

    • Ore Processing Services Pty Ltd (OPS) and Malachite are using their best endeavours to complete their funding to finalise the heads of agreement to produce gold bars on site at Lorena whereby OPS will supply, commission and operate the whole mineral processing plant and earn lease fees, management fees and a 30% interest in the project once operations commence.

  • Corporate:

    • The Company is now required to obtain shareholder approval to extend the term of the existing Convertible Notes to 1 July 2017.

    • The Company sold its 77,056,191 Silver Mines Ltd shares (770,561 after SVL's 1:100 consolidation of its share capital) as part consideration for the sale of the Conrad Silver Project. The Company will retain an ongoing interest in the Conrad Silver Project by receiving a one per cent net smelter return on all metals produced from the Conrad Silver Project.

    • The transfer of non-core Tooloom MLs 1237, 1238 & 1385 in northern NSW to Tooloom Creek Pty Limited was completed in June 2016.

14 July 2016

Lorena Gold Project

MLs 7147, 90192 - 90196

As announced last quarter, the Company entered into a non-binding heads of agreement with OPS to establish and operate a modular mineral processing plant to produce gold on site at the Company's Lorena Gold Project, which is located about 15km east of Cloncurry in northwest Queensland

OPS will take responsibility for the supply, commissioning and operation of the whole mineral processing plant, which will be constructed as modular units to produce gold doré on site. The main advantage of this approach is a lower construction cost as these units can be constructed off-site and transported to site fully commissioned. Given the fast track nature of the initial open cut campaign, the modular plant provides flexibility to remain on site if more resources are identified, or to relocate the processing capability to other regional opportunities or other projects within Australia. OPS and Malachite will be working together to take advantage of these processing units as part of a longer term strategy. OPS and Malachite are currently reviewing other projects which could potentially use the concentrator module once the Lorena open cut campaign has been completed.

OPS is pursuing the necessary funding for construction of its plant modules. It is contemplated that OPS will commence construction of the plant modules once it has secured appropriate funding. In parallel, Malachite is also in discussions with a number of parties to fund the capital cost of preparatory work which Malachite is required to undertake prior to commissioning of the OPS modules. Documentation between OPS and Malachite is being prepared to formalise these arrangements.

The arrangement with OPS is expected to minimise Malachite's share of capital expenditures whilst maintaining majority ownership of the project.

The arrangement between OPS and Malachite remains subject to a number of conditions precedent including:

  • Completion of appropriate environmental approvals to allow a CIL plant on site;

  • Completion of confirmatory design test work on the CIL circuit;

  • Malachite raising funds for preparatory work;

  • OPS raising funding for their OPS plant modules;

  • Completion of formal documentation.

    As previously advised, the key terms of the arrangement are as follows:

  • OPS will earn a 30% equity interest in the Lorena Gold JV ("LGJV") once operations commence.

  • OPS will receive lease fees from the LGJV for provision of the modular processing plant.

  • OPS will earn a 5% management fee of the processing cost of the LGJV. OPS will be able to earn an additional 10% management fee of the processing cost based on performance against financial targets.

  • Malachite will provide project funding of around A$2.5m for preparatory works, which includes necessary environmental bonds, tailings dam construction, initial mining costs, water supply and preparatory ground works for the OPS modules.

The Company will provide further project development details at the earliest opportunity.

About OPS

OPS is associated with "ammjohn", a contract Engineering Company which has extensive experience in project management, project construction and engineering for mining and industrial projects. This

association provides OPS with the expertise and technical backing to provide a complete solution for the mineral processing requirements for the Lorena Gold Project.

About the Lorena Gold Project

It is expected that the Lorena Gold Project will produce around 30,000 to 35,000 ozs of recovered gold in the eighteen months of production from an open cut operation.

Malachite believes that the Lorena Gold Project has potential for resource extensions at depth. Proving up these additional resources will require confirmation by drilling which Malachite proposes to undertake at the earliest opportunity subject to sufficient funding being available. The Company also believes that there are considerable regional opportunities which it will be able to pursue once the plant is operating to enhance the commercial return from project.


Existing Convertible Notes

On 15 March 2016, the Company announced that it had reached agreement with all of its Convertible Noteholders to extend the term of the existing Notes to 1 July 2017.

Noteholders have also agreed to the capitalisation and deferment of interest subject to the proviso that the Company may, at its discretion, elect to pay interest rather than capitalise the interest if adequate working capital is available for this purpose.

The Company is now required to obtain shareholder approval to extend the term of the existing Convertible Notes to 1 July 2017. The Company will be sending shareholders a notice of a general meeting to approve the extension of the existing convertible notes.

Sale of Conrad Silver Project

Last quarter Company was issued 77,056,191 Silver Mines Ltd shares (770,562 SVL shares post a 1:100 share consolidation )as part consideration for the sale of the Conrad Silver Project. The company has sold those shares for working capital purposes). The Company will retain an ongoing interest in the Conrad Silver Project by receiving a one per cent net smelter return on all metals produced from the Conrad Silver Project. This ongoing interest is subject to finalising the sale and purchase agreement with Silver Mines Limited.

Sale of Tooloom MLs (ML 1237, ML 1238, ML 1385)

Last quarter, the Company sold non-core MLs 1237, 1238 & 1385 (Tooloom MLs) in northern NSW to Tooloom Creek Pty Limited for cash of $50,000. The Company will also be entitled to recover its environmental bond of $50,000 once the MLs have been transferred. The transfer of the MLs was completed in June 2016.

The Company retains EL6263, which is in the process of being renewed for a further two year term.



Tenement Number



ML 7147, ML 90192 , ML90193, ML 90194, ML 90195, ML 90196

EPM 18189, EPM 18908


Conrad (subject to sale to Silver Mines Limited)

ML 5992, ML 6040, ML 6041

EPL 1050

EL 5977



EL 6263

Exploration/Mining Tenements Acquired/Disposed of during the Quarter







Beneficial Interest in Farm-In or Farm-Out Acquired/Disposed of during the Quarter







Tooloom , NSW

ML 1237, ML 1238,

ML 1385


Further Information

For further information, please contact the Company on (02) 9251 0032 or by email at [email protected] or visit the Company's website at

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Malachite Resources NL

ISIN : AU000000MAR2
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Malachite Res. is a tin and lead exploration company based in Australia.

Malachite Res. holds various exploration projects in Australia.

Its main exploration properties are ELSMORE, MT LIDSTER, RIVERTREE, TOOLOOM, VOLGA, ABINGTON, CONRAD SILVER and DELUNGRA in Australia.

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11/18/2008(Conrad Silver)ASX Announcement - Conrad Silver Project - Update
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10/8/2007(Conrad Silver)Spectacular New Results at Conrad Silver Project
8/13/2007(Conrad Silver)Resource Drilling at King Conrad Extended
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5/24/2016Response to ASX Appendix 5B Query
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12/4/2015Change of Director's Interest Notice - Terry Cuthbertson
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11/30/2015Results of Meeting - AGM
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10/29/2015Notice of Annual General Meeting/Proxy Form
10/19/2015Appendix 3B - Convertible Note Rollover Fee Shares
10/1/2015AGM to be held 30 November 2015
9/30/2015Full Year Statutory Accounts - Year Ended 30 June 2015
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7/15/2015Proceeding with the Development of Lorena Gold Project
4/27/2015Share Purchase Plan Closing Date Extended
4/16/2015Share Purchase Plan Letter and Application Form
3/31/2015Trading Halt
3/16/2015Half Yearly Report and Accounts
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1/30/2015Quarterly Activities and Cash Flow Report - Dec 14 Qtr
1/22/2015Malachite Reviewing Position at Lorena Gold Project
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1/21/2015Reinstatement to Official Quotation
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1/15/2015Trading Halt
12/3/2014Appendix 3B - AGM approved Shares and Convertible Note
12/1/2014AGM Presentation
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5/26/2010Results of Meeting and Exploration Update
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3/11/2009(Audio) Audio Broadcast - 1.30 pm Today
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11/28/2008ASX Announcement - Directors Options to be Amended - Exercis...
11/7/2008Interviews with Dr. Garry Lowder
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9/22/2008AGM to be held Tuesday 25 November 2008
9/17/2008Interview with Dr. Garry Lowder
8/20/2008ASX Announcement - Exploration Update
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7/24/2008June 08 Quarter Activities Report
7/2/2008Finance News Network - Interview with Dr. Garry Lowder
5/30/2008Lonsec Resources Update - Malachite Resources NL
4/23/2008(Video) Finance News Network Interview
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11/16/2007 Placement of up to 20m Shares
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5/1/2007Exploration Update on Conrad Silver, Tooloom Gold and ISA re...
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2/28/2007Corporate Insights Interview
4/20/2006quaterly report ending 31 march 2006
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