Flinders Exploration Limited | FEX

15 August 2011
Flinders Exploration
Flinders Exploration Limited | FEX
A diverse mix of advanced and early stage exploration projects
Key points
FEX has an experienced management
team with a solid track record of
discovery. First and second order
projects ready for testing include:
Copper Claim - a large low grade
copper oxide project containing an
Inferred Resource of 55,000t has the
potential for heap leach SXEW
extraction. The mineralisation is
open in most directions and has not
been fully tested near surface;
The Black Cat JORC compliant gold
resource of 21,400oz at 2.1g/t
requires minimal expenditure to
move into production with a toll
treatment option;
The highly prospective Porters
Mount intrusive porphyry gold
project in the Lachlan Fold Belt
requires follow up drilling of large low
grade and ineffectively tested deep
and shallow targets. The exclusive
address could deliver a conceptual
objective of 5Moz of gold;
The Jamestown 66km x 10km
phosphate
anomaly,
and
the
existence of small scale mining in the
region provides enough acreage to
allow a conceptual objective of 10Mt
@ +15% P2O5 to be reasonable;
Recent kimberlite discoveries at
Eurelia with very high micro-diamond
counts (+80) require immediate bulk
sampling to determine macrodiamond potential. A conceptual
objective of 1Mt @ 50cpht for 500k
carats has been identified.
With ~$2M in seed and joint venture
subscription capital raised to date, FEX
is looking to complete its funding
requirements by way of an IPO for a
minimum of $5M.
Investment view
The FEX IPO offers entry to a large
and diverse Australian exploration
2
portfolio (14,017km ), including an
advanced copper and gold project.
Funding is required to progress a
diverse mix of targets, in order to meet
a number of technical hurdles.
Success should translate to significant
upside from the $13.6M market
capitalisation at listing.
Recommendation
We believe that FEX offers investors a
solid exploration portfolio and a
capable management team. After
visiting the key South Australian
projects we are of the opinion the
company can offer significant upside
should any of the projects deliver on
expectation.
Initial public offering IPO
Flinders Exploration (FEX) is seeking to raise between $5M and $7M at 20c per share in an
IPO prior to ASX listing. The closing date for the Prospectus is 14 October 2011 and
proposed listing date is 28 October 2008.
Pro forma capital structure
Founders/Directors/Promoters
Seed capitalists
Subtotal prior to listing
FMS subscription agreement
Vendors
Public
Total full subscription post listing
Public over ($7M raising)
Total oversubscription
post listing
Shares
16.75M
6.85M
23.60M
15.00M
4.18M
25.00M
67.78M
10.00M
Major shareholders
Andrew Andrejewskis
David Tucker
Kevin Wills
David Godfrey
Adelaide Equity Partners Ltd
Ewan Vickery
Robert Kennedy
Ascot Nominees Pty Ltd
Shares
2.5M
2.5M
2.5M
0.75M
1.10M
2.5M
2.5M
2.5M
Director
Andrew Andrejewskis
David Tucker
Kevin Wills
Position
Chairman
Managing Director
Executive Director
Key projects
77.78M
Source: FEX
Page 1 | 23
Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
Overview
FEX is seeking to raise $5-7M in an IPO. The closing date for the Prospectus is 14 October
2011. The source and application of funds is set out below:
FEX expenditure program
FEX has provided the following information in relation to the source and application of funds
raised in the offer:
Full Subscription
A$5M
Full Oversubscription
A$7M
855,000
855,000
Total raised in the offer
5,000,000
7,000,000
Total funds available
5,855,000
7,855,000
200,000
700,000
Copper Claim
1,300,000
1,300,000
Porters Mount
75,000
300,000
Jamestown Phosphate
200,000
200,000
Eurella Diamonds
200,000
200,000
1,975,000
2,700,000
200,000
700000
Copper Claim
1,400,000
1,400,000
Porters Mount
75,000
300,000
Jamestown Phosphate
200,000
200,000
Eurella Diamonds
200,000
200,000
Total
2,075,000
2,800,000
Exploration expenditure - subtotal
4,050,000
5,500,000
Use of funds over two years
Pre -offer cash and receivables
EXPLORATION EXPENDITURE
Year 1
Black Cat
Total
Year 2
Black Cat
OTHER EXPENSES OVER YEARS 1 AND 2
Expenses of the offer
855,000
855,000
Additional costs post successful float (NOTE 2)
450,000
590,000
Vendor Consideration
440,000
440,000
Administration (NOTE 1)
Additional project generation
Unallocated working capital
Total funds applied (NOTE 3)
55,000
200,000
0
200,000
5,000
185,000
5,855,000
7,855,000
Source: FEX
NOTE 1. $450,000 of Administration (15%) is included for FEX/FMS JV expenditure for $5m raise and for $7m raise.
$75,000 (15%) of Administration is included for Black Cat and Porters Mount. Total Admin is $580,000 for a $5m raise
and $725,000 for $7m raise.
NOTE 2. The company has made allowance for the payment of $450,000 and $590,000 in fees and commissions under
Full Subscription and Full Oversubscription respectively.
NOTE 3. If the amount raised is more than five and less than $7m dollars then the exploration budget is expected to be
adjusted on the Black Cat and Porters Mount projects, as shown above.
Page 2 | 23
Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
We believe FEX offers investors a solid exploration portfolio, combined with a highly
experienced and capable management team. The copper and gold projects offer more
tangible and definable prospects at this juncture, while the phosphate and diamond
opportunities are less discernible. It is highly speculative to place a value on the portfolio,
although comparative analysis suggests a valuation range for copper of $1.2-10.9M and for
gold ($1-2M). Moreover, market dynamics are currently favourable for all commodities (and
particularly gold which has found increasing favour against a wave of global financial
uncertainty).
However, developing the portfolio is not without some associated risk:
As with all early stage and advanced stage projects there are technical risks which can
adversely affect the economics of the project and thereby the company. Copper Claim
while an advanced exploration project is yet to demonstrate positive economics,
especially given its size, grade and leaching characteristics. Resource calculations are
also of a preliminary nature. There is a significant technical work program required to
develop inputs which can be used to assess the economics of the project;
Black Cat while more advanced is a very small scale gold project, and as such any
adverse issues during the mining or processing phases (given progress to that stage),
could also significantly impact the project economics. Furthermore while we believe the
current project should show positive economics, mining studies are yet to be fully
conducted.
The Porters Mount, Jamestown Phosphate and Eurelia-Springfield Diamonds projects
have no quantifiable mineral resources and therefore are still considered exploration
projects and therefore speculative.
In addition to project risks, there are other risks, such as those associated with share market
volatility, funding, exchange rates, government and regulatory changes, loss of key
personnel and partner risks.
SWOT analysis
Strength
Advanced development projects
Access to numerous projects
Demonstrated mineralisation
Exploration success
Good infrastructure
Acquisition of new projects
Established JORC resources
Farm out potential
Highly experienced explorers
Favourable acid prices
Weakness
Page 3 | 23
Opportunity
Threat
Low grades
Copper leaching results inconclusive
Economics yet to be proven
No gold toll treatment agreements yet
Environmental concerns (generic)
Metal prices
Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
The portfolio
Copper Claim
FEX can earn 75% of a
potential SXEW heap leach
copper project within three
years by expending $6M
The Copper Claim project is a potential SXEW heap leach opportunity located within the
southern Flinders Ranges some 265km north of Adelaide. FEX has a JV with Flinders Mines
(FMS) where FEX can earn up to 75% by expending $6M within three years.
Oxidised copper
mineralisation is found to
depths over 200m
Copper Claim lies in the core of the Carrieton Anticline, in rocks of the lower Burra Group of
the Proterozoic Adelaidean sequence. The host sequence of siltstones and sandstones is
oxidised to depths in excess of 200m, defining a secondary mineralisation assemblage which
is associated with disseminated and joint bedding and cleavage coatings of 5% manganese
oxides, which contain about 5% copper.
Copper mineralisation
intersected over a 1km x
2km area open in most
directions
Copper mineralisation has been intersected over an area of 1km x 2km. At the southern
drilled parts of the deposit, sections show the mineralised zone is over 200m wide and 60m
thick, has a domal shape and maintains consistency over some distance. At the southern
end the overburden above the mineralisation is 25-30m thick and increases on the eastern
flanks of the dome. The mineralisation comes closer to surface at the north, is thinner, has
less overburden and also maintains geological integrity over some distance. Drilling has not
established the limits of the mineralisation, especially to the north, east and south. Potential
exists for significant extensions.
Very thick zones of
mineralisation in the
south becoming thinner
to the north with much
less overburden
Geology
Fig 1: Location of Copper Claim
Fig 2: Carrieton anticline geology
Source: FEX
Exploration history
Eight years of exploration
and 31,800m of drilling
completed. Replacement
cost is over $6M in
today’s terms
Copper Claim was explored between 1969 and 1977 by Utah Development (Utah). The
historic dataset includes 5,000 pages of reporting and 31,853m of drilling. Utah’s exploration
effort included geochemical and geophysical surveys and diamond, percussion and rotary
drilling. The Utah drilling includes 26 diamond drill holes, 51 percussion holes, and 3,226
rotary holes. Higher grade significant intersections include; ED06: 7m @ 1.13% Cu, ED06:
1.8m @ 1.96% Cu, ED09: 42m @ 0.51% Cu, PH03: 11m @ 0.70% Cu.
Utah was not interested in
exploring for shallow
oxide lower grade ore
Utah was looking for a large stratiform copper deposit within a particular litho-stratigraphic
unit which was chased to depths of up to 600m. It did not appear to consider the
mineralisation near surface of interest. To the north of the main drilling minimal early work
has been completed to follow up shallow higher grade mineralisation. Current indications
from sparse 1970’s drilling in the area of the Anesbury Cu mine, suggest mineralisation
extends up to 500m from the northern end of the Inferred Resource.
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Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
Recent activity
Initial leach tests on drill
chips define recoveries
around 73%
Work completed by FEX on the Copper Claim, includes establishment of a digital database
from which plans and sections and ore outlines have been completed. This data compilation
and interpretation has led to an initial Inferred JORC resource. Inspection of Utah drill core
and selection of samples for initial leach test work has also been undertaken.
Simple bottle roll leach tests conducted on drill chip samples from two holes (ED16 and
ED17) resulted in average recoveries of 73% (27-90% range) after 24 hours in 5% H2SO4
solution.
Fig 3: Drill status plan
Fig 4: X-Section with 0.15%Cu cutoff
Source: FEX
Resource estimates
An initial JORC Inferred
Resource containing
55,000t of Copper has
been defined by FEX
Seventeen cross sections have been used to contour the mineralised zone at various copper
grades and then calculate areas to generate volumes. A preliminary cut-off grade of 0.15%
was selected using $10,000/t copper to define a global first pass Inferred Resource of: 22Mt
@ 0.25% Cu for 55,000t Cu.
The breakdown at various cut-off grades used is summarised below:
Cut-off grade
0.15%
0.20%
0.25%
Tonnes (M)
22.0
12.0
5.7
Av. grade % Cu
0.25
0.30
0.36
Tonnes Copper
55,000
35,000
20,000
Source: FEX
Proposed activity and budget
Further drilling is required and planned (100 holes for 12,000m) to validate the internal parts
of the resource and the extents which have not been closed. Drilling will also be required to
update and validate the resource status, and provide more data for mine planning purposes.
A significant program of metallurgical test work using column leaching trials will be required
to determine the recoverable characteristics of the ore and acid consumption rates.
Proposed budget
Drilling and column leach tests
Yr 1
Yr 2
Total
$1.3M
$1.4M
$2.7M
Source: FEX
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Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
Black Cat gold project
The Black Cat project, comprising the Black Cat North, Black Cat South and Black Cat South
East deposits, is located approximately 35km NW of Coolgardie in the Jaurdi Hills gold
mining centre of the Eastern Goldfields in Western Australia. The project offers FEX the
opportunity to generate early cash flow by mining and processing at a third party facility in
the region.
Fig 5: Location and leasing Plan
Fig 6: Regional geology
Source: FEX
Acquisition terms
Minority holding JV
partner has waived its
pre-emptive right with
respect to the 90%
majority
Subject to listing on the ASX, FEX has agreed to acquire all of Ramelius Resources’ (RMS)
2
90% interest in the Black Cat Mining leases M16/34 and M16/115 (totalling 3.4km ). Existing
JV partner JH Mining Pty Ltd holds 10% and has waived its pre-emptive right in respect of
the 90% RMS interest thereby clearing the path for FEX to proceed towards settlement.
Ramelius will receive $200,000 cash and be issued 2,000,000 fully paid ordinary shares in
FEX. FEX will also pay a royalty to Ramelius based on production of gold from the tenements
as follows:
First 25,000 ounces: 4% of the price received;
From 25,000 ounces to 50,000 ounces: 2% of the price received;
Above 50,000 ounces: 1.5% of the price received.
Geology and mineralisation
Regionally the project is situated within the Dunnsville-Ubini greenstone sequence. The NW
trending Jaurdi Hills shear zone, a probable splay off the Bullabulling shear transects the
sequence several kilometres to the east of the mining lease. The bedrock lithologies at the
Black Cat deposits are basaltic rocks which have been intruded by diorite and granodioritic
units which in turn have been cut by NW trending shears and quartz veins.
Gold mineralisation in the Black Cat deposits shows a strong supergene component above
the underlying primary mineralisation. The primary gold mineralisation is associated with
granodioritic intrusives and within shears on and near the footwall contact with lesser
amounts within the granodiorite and the mafic volcanics.
Previous history
Underground mining occurred between 1897 and 1907 which produced 16,800 ounces of
gold. During 1998 to 2000, Kinver Mining NL completed RAB, aircore and RC drilling that led
to the delineation of the Black Cat gold deposit. This deposit was mined to 40m in 2001 by
Kinver and Toro Mining Pty Ltd to extract 23,600t at 5.34g/t.
Page 6 | 23
Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
2007 optimisation studies
highlighted positive
economics at A$750/oz
In 2003 the project was sold to Ramelius who completed 126 RC holes for 8,738m, prior to
completing a resource inventory in 2005. In 2007, Ramelius drilled an additional 50 RC holes
for 1,977m to further refine the 2005 estimation. Ramelius also completed mine studies in
2007 for the three Black Cat deposits, Black Cat North, Black Cat South and Black Cat South
East. The optimisation study showed that with a $20/t milling cost and a A$750/oz gold price,
the project demonstrated moderate positive financial returns.
Two strong auger hole
anomalies have yet to be
tested
During 2008–09, Ramelius drilled a further 1,140 auger holes (40 x 100m spacing) to
regionally evaluate the mining leases for gold and/or nickel anomalism. Results from the
drilling highlighted two strong gold anomalies associated with both the Black Cat open pit and
alluvial workings immediately to the north and south of the known mineralisation. These have
yet to be investigated in detail.
Resource estimates
A revision of the 2005 resource estimate to JORC status was completed in 2007 to reflect the
new infill drilling data, the global resource was defined as: 317,000t at 2.1g/t for 21,400oz
Au.
JORC resource contains
21,400oz @ 2.1g/t
A breakdown of the resource categories is summarised in the table below.
Zone
Black Cat North
Black Cat South
Black Cat South East
TOTAL
Ounces
INDICATED
Tonnes Grade g/t
19,000
3.4
157,000
2.1
11,000
2.1
187,000
2.2
13,227
INFERRED
Tonnes Grade g/t
13,000
2.0
88,000
1.9
29,000
1.9
130,000
1.9
7,941
TOTAL
Tonnes Grade g/t
32,000
2.9
245,000
2.0
40,000
2.0
317,000
2.1
21,403
Source: FEX
That portion of the resource within 50m of the surface was also estimated at: 102,000t @
2.8g/t for 9,180 ounces.
Proposed activity and budget
FEX proposes to conduct detailed mine studies and complete the drilling in the exploration
gaps along strike of the known mineralisation.
Proposed budget
Complete mine evaluation studies
Yr 1
Yr 2
Total
$200k
$200k
$400k
Source: FEX
Porters Mount gold project
Located in the highly
endowed Lachlan Fold
Belt
Porters Mount is located 50km SW of Forbes NSW within the highly endowed Lachlan Fold
Belt. The deposit is situated only 35km SE of the 3Moz Cowal Gold mine. FEX has agreed to
acquire the project from Capital Mining Ltd (ASX: CML) subject to ASX listing. FEX
conceptual targeting has identified the Porters Mount project as a high priority Cu-Au
porphyry system.
Acquisition terms
2
FEX will acquire 100% in the granted EL6591 which covers an area of 65km . The
consideration is set at $200,000 cash and 2,000,000 fully paid ordinary shares. A royalty for
precious metals will also be included for future production as follows:
Page 7 | 23
Up to 1Moz production: $10.00/oz;
1Moz to 2Moz production: $7.50/oz;
2Moz to 2.5Moz production: $5.00/oz;
Other minerals: 2% of the net smelter return; and
The total royalty payment is capped at $20M.
Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
Geology and mineralisation
The quartz monzonite porphyry at the project is intruded into a volcano-sedimentary
sequence along a NNE fracture zone and laterally covered by younger sediments. The
mineralisation of the intrusive complex is associated with brecciation and hydrothermal
alteration. Porters Mount itself is composed of tourmaline-bearing breccias which are often
present in the roof zones of major porphyry systems.
Conceptual objective of
5Moz Au is possible given
the similarities to other
deposits in the region
FEX’s conceptual geological interpretation has proposed a nested sequence of mineralised
shells, with a roof at about 125m depth. FEX contends a conceptual objective of 5Moz
(150Mt at 1g/tAu) is possible at this project. The company has stated that the property was
evaluated by Dr. Richard Sillitoe (a globally respected porphyry specialist) and he provided a
positive review.
Fig 7: Section with target zone
Fig 8: Location within NSW
Source: FEX
Previous history
Previous history shows
very little persistence by
earlier explorers
Exploration has been carried out at Porters Mount since 1983, with various phases of
mapping, rock chip and soil sampling, RAB, percussion and diamond drilling and various
geophysical surveys including, gravity, IP and high resolution helimag. While a significant
exploration history is apparent, FEX contends that very little persistence has been shown.
Only two deep holes
drilled. Both with long
anomalous intersections
Only two deep holes have been drilled, one at the south end of the project and one too far to
the east. North Ltd intersected 142m @ 0.11g/t Au in TARD65 and more recently an 891m
diamond hole drilled by CML intersected 172m @ 0.23g/t Au. While low grade, these
intersections are certainly anomalous and worthy of further investigation.
A shallow low grade oxide
position is highly likely
In addition to the deeper targets North Ltd discovered shallow, low grade, oxide gold
mineralisation with results including 14m @ 1.02g/t gold from 6m, 3m @ 2.97g/t gold from
48m, 20m @ 0.42g/t gold from 22m and 20m @ 0.17g/t gold from 24m. Follow up drilling
with 6 RC percussion holes by CML intersected further low grade shallow oxide gold
mineralisation as follows:
12m @ 0.5g/t gold from 22–34m including 2m @ 2.5g/t gold from 22m;
8m @ 0.5g/t gold from 60–68m including 4m @ 0.8g/t gold from 62m;
10m @ 0.5g/t gold from 8–18m including 2m @ 1.5g/t gold from 12m;
6m @ 1.0g/t gold from 36–42m including 2m @ 1.5g/t gold from 38m.
From the independent geologist report provided to FEX and referred to in its Prospectus, it
appears likely that an oxide gold deposit to a vertical depth of around 50–55m may be
defined at South Porters Mount. Apart from the zones described, a number of other targets
based on IP, gravity and magnetics require systematic follow up.
Page 8 | 23
Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
Proposed activity and budget
A program of induced polarisation (IP) geophysics, which can detect disseminated pyritic
mineralisation, followed by deep diamond drilling is planned.
Proposed budget
Yr 1
Yr 2
Total
Complete IP and drilling
$75k
$75k
$150k
Source: FEX
Jamestown Phosphate project
Phosphate mineralisation
located in an area with
small scale mining and a
number of prospects
FEX have delineated a significant phosphate anomaly located between Jamestown and
Orroroo, around 230kms north of Adelaide. FMS holds 100% rights to four exploration
licenses where a 75% interest can be acquired by FEX through expenditure commitments
defined in a joint venture between FMS and FEX. Two small mines exist in the area, of which
it is estimated the privately owned Catfords mine produces between 500-3,000tpa.
Geology and mineralisation
FEX has a conceptual
target of 10Mt @ +15%
P2O5
The phosphate mineralisation is located within Neoproterozoic rocks of the Umberatana
Group, of which the Brighton Limestone contains many of the known deposits. FEX has
recognised that the mineralisation does not appear to be stratiform in nature, and undertaken
an appropriate exploration strategy.
FEX has identified 10Mt @ +15% P2O5 as a conceptual target.
Exploration history
Anomalous zone 66km
long and 10km wide
After undertaking a regional orientation survey, FEX completed a soil survey over an area
stretching 66km N-S with a 10km width using an 800m x 400m grid. Several phosphorous
anomalies greater than 1500ppm were defined with significant targets at Orroroo and
Tarcowie. The Tarcowie anomaly has been in filled down to 400m x 200m spacing. Bulk
samples of 20-25kg have also been collected from the Orroroo Phosphate mine and the
existing operation at Tarcowie.
Fig 9: Location of phosphate targets
Fig 10: Orroroo phosphate anomalism
Source: FEX
Page 9 | 23
Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
Proposed activity and budget
Drill testing is required to
understand mineralisation
style
Given that detailed soil sampling has defined strong targets, FEX will now need to drill to
understand the nature of the phosphate mineralisation.
Proposed budget
Drilling to test for commercial grades and tonnages
Yr 1
Yr 2
Total
$200k
$200k
$400k
Source: FEX
Eurelia – Springfield diamond project
The Eurelia and Springfield diamond projects are located some 265km and 310km north,
respectively of Adelaide, in the southern Flinders Ranges of South Australia. FEX can earn
up to 75% of the projects through the expenditure of $6M in three years through a wider
scoping joint venture agreement prospective for numerous minerals with FMS.
Geology
The projects are located within the Proterozoic sediments of the Adelaide Geosyncline
associated with NW and NE trending faults and anticlinal fold structures. The structures are
interpreted to reflect deep seated fractures, thought to be the conduits for kimberlite
intrusions.
The Eurelia area contains
the most important
diamondiferous
kimberlites in SE Australia
The Eurelia kimberlite province comprises a north west trending array of kimberlite dykes and
fissures confirmed to contain primary diamonds. Secondary diamonds were also discovered
in basal conglomerates along the SW margins of the Springfield basin, though to date a
primary source for these diamonds has yet to be identified.
Fig 11: Schematic geology for kimberlite emplacement
Source: FEX
Exploration history
Flinders detailed helimag
surveys have been
instrumental in locating
more kimberlites
Page 10 | 23
Diamonds were first found in the Flinders Ranges in the late 1960’s by Stockdale
Prospecting, and then later explored by numerous parties including Swan Resources,
Freeport McMoran, Swan Resources, BHP, CRA and FMS amongst others.
FMS has in recent times completed high resolution helicopter magnetic and ground surveys
(50m and 25m spacing) and follow up sampling, bulk sampling and trenching to define at
least five new kimberlites or groups of kimberlites which have been identified as
diamondiferous.
Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
FEX has found
significantly higher microdiamond counts than
previous explorers, which
require follow up bulk
testing to assess macrodiamond numbers
Eurelia Projects
Significant extensions and new kimberlites have been identified along strike to the historic
kimberlites at Eurelia. The Eurelia K2 and K3 trend and the Bel Forest K4-K7 trend have
returned very high and therefore significant micro-diamond counts. Some of these counts are
between 60-80 micro-diamonds and highlight the improved prospectivity of the project area.
Fig 12: Regional diamond targets
Fig 13: Eurelia magnetics and targets
More micro-diamonds
equate to more macrodiamonds
Source: FEX
High concentrations of micro-diamonds generally indicate that higher concentrations of
macro-diamonds can be expected in the kimberlites.
Springfield Basin project
Apart from detailed magnetics, FMS has collected bulk samples confirming diamonds and
indicator minerals (including, chromite, pyrope, chrome diopside and picroilmenite). An
analysis of numerous samples taken over the prospect, indicate that a diamondiferous
kimberlite exists to the SW of the basin, though this has yet to be found.
Proposed activity and budget
Follow up bulk samples
are an important next step
at Eurelia
The work program is focussed primarily on the Eurelia Project, where bulk sampling is
planned to follow up high micro-diamond counts. This will involve mining a 100t parcel and
processing it through a Dense Media Separation plant, to produce a heavy mineral
concentrate from which any macro-diamonds and other heavy minerals can be sorted with an
X-ray sorting machine.
Proposed Budget
Bulk sampling of high micro-diamond kimberlites
Yr 1
Yr 2
Total
$200k
$200k
$400k
Source: FEX
FMS agreement – other projects
Copper Claim, Jamestown Phosphate and the Eurelia-Springfield Diamonds projects are part
of a larger group of assets currently 100% owned by FMS. Subject to the successful capital
raising and listing, FEX can acquire via a JV subscription agreement, a 51% interest in
certain exploration rights, by spending $3.5M within two years and up to 75% by expending
$6M within a three year timeframe. FMS will hold ~22% of FEX having allocated ~$1.5M in
funding.
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15 August 2011
Flinders Exploration
FEX has a very large
portfolio of walk up
targets ready for
assessment
There are a significant number of other prospects within the JV tenement package which
offer potential for further upside, including the following projects summarised below:
Yanyarrie Barite Prospect
This project forms part of the FMS/FEX JV agreement. Yanyarrie is located 12km north of
Carrieton, along the main road to Hawker in the southern Flinders Ranges. A 75m costean
has exposed significant barite at surface which is coincident with a peanut shaped gravity
anomaly. FEX proposes to drill RC holes in order to test the thickness and size of the barite
and to take samples for metallurgical test work. Yanyarrie is situated on EL 4208, together
with a number of other Barite prospective targets.
Diamonds - other
FEX has a significant portfolio of additional diamonds projects including: Adelaide Hills
Prospect, Central Gawler Prospect, Southern Gawler Prospect, Lake Torrens Prospect, Billa
Kalina Prospect, Pilbara Diamond Project and Strangways Prospect.
Phosphate - other
The Kapunda-Angaston Prospect is located south of the priority Jamestown Phosphate
Project and has a historic production of 500,000t from the region.
Base and precious metals - other
Other base and precious metals projects also require exploration attention when time and
budgets permit, including: Wilsons Anomaly EL 4404, Eurelia Copper Mine, Magnetic
Anomalies C and D and Golden Point.
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Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
Preliminary project assessment
Copper Claim Copper - preliminary project
comparatives and assessment
A small number of heap leach SXEW copper oxide projects have been successfully
implemented in Australia, including Mt Gordon (Qld), Girilambone (NSW), Mt Gunson (SA),
Kanmantoo (SA), Nifty (WA), Whim Creek (WA), Leichardt (Qld) and Lady Annie (Qld).
Lady Annie Project valued
at $0.17/lb at time of
acquisition, highlighting
importance of these
projects
Lady Annie located near Mt Isa, is currently being operated by CST Mining (Hong Kong
listed) with forecast copper cathode production of 25kt in 2011 and at a cash cost of
US$1.50/lb. Lady Annie was purchased by CST for A$135M in June 2010, valuing the project
at $0.17/lb on an EV/lb basis, however, CST has increased resources from 40Mt @ 0.9% Cu
to 65Mt @ 0.71% Cu.
Current examples of heap leach SXEW projects include:
Ivanhoe assessing 0.25%
Cu Mt Dore Project in Qld
Rex Minerals did not
commit to SXEW for the
oxide component at
Hillside
The Rosemont project in
Arizona is an SXEW
project with o.17% Cu
Copper Claim grade lies
in the fourth quartile of
global porphyry Cu
deposit grades, though
volumes are smaller
Redbank Copper (RCP) is developing a 2,500tpa Cu cathode SXEW project in the
Northern Territory by processing 210,000tpa @ 1.5% Cu at a forecast cash cost of
US$1.4/lb and capital cost of A$18.7M.
Venturex (VXR) is commissioning a small scale 5tpd SXEW plant (A$5M) at Whim Creek,
to recover 5,000t of copper cathode from an old heap.
Ivanhoe (IVR) is in the final phases of completing a 3Mtpa Cu heap leach SXEW study
with a capacity to produce 15-20ktpa of copper cathode from the Mt Dore deposit in
Queensland (144Mt @ 0.25% Cu).
Rex Minerals has just announced a concept study for its 217Mt @ 0.7% Hillside project,
though has chosen not to proceed with an SXEW plant as its oxide volume was “too small
to justify” (oxide resource: 18Mt @ 0.6% Cu).
On a global scale, we note the very large heap leach SXEW projects for low grade porphyry
th
Cu deposits and a review of the size and grades, indicates Copper Claim lies in the 4
quartile (Fig 14) with respect to grades but has some way to match the very large tonnages
(+500Mt). Augusta Resource Corp. (TSX:AZC) Rosemont project does show however that
lower grade deposits can be feasible. Rosemont has oxide reserves of 70Mt @ 0.17% Cu
recovering 89kt Cu. The project is a combined heap leach SXEW and sulphide concentrate
circuit operation and has a stripping ratio of 2:1. While overall capex is US$897M, the oxide
plant comes in at US$68M. At a smaller scale Metminco (MNC) is reviewing an SXEW
project at Mollacas in South America containing a resource of 17Mt @ 0.54% for 92kt Cu.
Fig 14: Size and grade of global undeveloped open Pit Cu deposits
Grade (% Cu)
2%
First
Quartile
Second
Quartile
Third
Quartile
Fourth
Quartile
1%
Weighted Average grade = 0.48%
Cu
0%
0
50
100
150
200
250
300
350
400
Current Resource (mt of Cu metal)
Note: Refers to projects at the Exploration and Feasibility Study Stages containing >500kt Cu
Source: MinEx Consulting Sept 2010
Source: Minex Consulting
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15 August 2011
Flinders Exploration
The Copper Claim Inferred Resource currently 22Mt at 0.25% Cu (0.15% Cu cut off), has the
potential to progress to an economic project if important technical hurdles can be satisfied.
Attributes which will need validation include positive leaching characteristics, followed by a
more detailed understanding of the size and grade distribution of the mineralisation.
Copper Claim technical
hurdles need validation to
assess the economics of
the project, and thereby
justify funding to reach
that stage
The deposit lies in an area with good infrastructure, close to Adelaide and the ports of
Whyalla and Pt. Pirie. It is anticipated that low cost acid may be sourced from Pt. Pirie which
is only 65km by road from the project.
It is difficult to accurately model the Copper Claim project and our initial assumptions (yet to
be agreed or validated) indicate the project is sub economic. However we lack validated
technical data, and cost inputs and it is for these reasons, the location of the project, the
current and the outlook for the copper market, that we believe the project can justify further
funding to assess its economic merits.
Black Cat gold - preliminary project assessment
The 21,400oz gold resource at Black Cat was evaluated by Minecomp/Ramelius Resources
in 2007 which concluded that at toll milling costs of A$30/t and a gold price of $850/oz, the
project was profitable and obviously more so at A$20/t milling costs.
Black Cat has a
preliminary pre tax value
of A$2M, though and
update of the mine plan is
required for validation
We expect that a project with a strip ratio of ~6:1, recovering 57% of the resource ounces,
and a milling cost of A$25/t, offers a pre tax NPV8% of ~A$2M using a $1,400/oz gold price.
Cash operating costs are estimated at A$1,109/oz.
As with Copper Claim, cost assumptions and technical evaluations need to be upgraded from
the 2007 study, especially given the change in the gold price. There are a number other
considerations including establishing a local toll treatment agreement, to guarantee
processing.
While the project is small, Black Cat does offer the potential for a positive short term cash
flow operation, with further potential opportunities from small scale acquisitions and
exploration activity possible.
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15 August 2011
Flinders Exploration
Peer comparison
Using the peer multiples methodology provides an indication of project valuations for copper
but is an inadequate process to value the full range of projects within the company at this
time. This is because, a significant part of the portfolio is still at an exploration phase with no
defined resources and only conceptual targets identified.
Copper
A comparative
assessment against peer
multiples suggest a value
range of $1.2M to $10.90M
A review of copper only resources highlights the current valuations per pound of copper
assigned for a range of companies at the lower end of the copper focussed peer group. From
this evaluation, it is not unreasonable to expect that the FEX Copper Claim project could
attract an EV multiple between $0.01/lb and $0.09/lb, suggesting a valuation range of $1.2M
to $10.9M or $7.2M using the weighted average.
Company
ASX Code
Coppermoly Ltd
COY
Golden Cross Resources
GCR
Marengo Mining
MGO
Redbank Copper Ltd
RCP
Havilah Resources
HAV
Altona Resources
AOH
Metminco Ltd
MNC
Zambezi Resources
ZRL
Phoenix Copper Ltd
PNX
Rex Minerals
RXM
Venturex Resources
VXR
Hillgrove Resources
HGO
Finders Resources
FND
Weighted average
EV/$M
12
18
167
6
53
118
437
27
8
287
98
165
128
1,523
Mt
200
197
775
6
86
195
943
23
5
217
27
32
8
2,715
% Cu
0.36%
0.31%
0.37%
1.50%
0.72%
0.62%
0.37%
0.85%
0.82%
0.70%
1.20%
0.90%
2.50%
0.45%
Mt Cu
0.72
0.61
2.88
0.09
0.62
1.21
3.52
0.20
0.04
1.52
0.32
0.29
0.21
12.23
EV/lb
$0.01
$0.01
$0.03
$0.03
$0.04
$0.04
$0.06
$0.06
$0.08
$0.09
$0.14
$0.26
$0.30
$0.06
Source: IRESS, Company Websites
The large valuation range highlights the early stage nature of this project and the associate
uncertainties and risks.
Gold
Gold peer comparisons
appear to devalue Black
Cat
The average EV/oz for the
lower end of the gold peer
group is A$34/oz
The lower end of the gold sector has been chosen to assess appropriate gold valuation
multiples. Using the weighted average EV/oz indicates a valuation of $0.7M however we
believe this estimate appears low, discounting the potential to mine the deposit quickly and
the bullish gold price environment. A more realistic assessment would suggest a value range
of $1M to $2M.
Fig 15: EV/oz for gold juniors
$160
$140
EV/ozA$
$120
$100
$80
$60
Weighted Average EV/oz = $34
$40
$20
$0
AAM
AQQ
SMC
MOY
ATV
NME
MZM
SML
MYG
ALY
BCN
MCO CRB
ASX Company Code
Source: IRESS, company websites
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CRK
15 August 2011
Flinders Exploration
Phosphate
Peer multiples from a
small dataset are
unreliable and
inconclusive
The existence of few companies in this peer group provide only limited valuation multiples.
As such we believe these are inconclusive, furthermore FEX currently has no defined
phosphate resource.
Company
Minemakers Ltd
Legend International
Weighted average
Code
EV/$M
MAK
87.80
USOTC:LGDI 84.10
171.90
Mt
1,938
1,200
3,138
% P2O5 Mt P2O5
14%
278.8
16%
278.8
17.8%
557.6
EV/t
$0.05
$0.07
$0.05
Source: IRESS, company websites; note Legend listed on US OTC.BB
Diamonds
Diamond peer valuations
discount pre-mine
projects and don’t take
account of the value of
the ore
A small peer group with resources in the diamonds sector also makes comparatives difficult,
especially when one of the companies has value attributed from other commodities.
Nevertheless the data does provide a starting point.
Company
North Australian Diamonds
Venus Metals
Weighted average
Code
NAD
VMC
EV/$M
22.50
42.90
65.40
Mt
30
18
48
cpht
24
28
25
Carats (M)
7.2
5.0
12.2
Source: IRESS, company websites
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EV/C
$3.13
$8.58
$5.36
15 August 2011
Flinders Exploration
Market outlook
Copper
Copper market looks
buoyant to well beyond
2011, even with new
production
The copper market continues to be undersupplied with most observers forecasting a deficit in
2011 of around 400kt and continuing into 2012. The deficit has been reflected in current spot
prices well above US$4.00/lb. While new production should see the market move into a small
surplus in 2013 and 2014, the supply demand balance is expected to remain fragile, and
therefore longer term prices forecast to remain above US$3.00/lb. Global copper grades
continue to be declining from historic levels, though some relief could follow from planned
new production.
Fig 16: Global copper supply demand
Fig 17: Changes in Cu head grades
Source: Rio Tinto
Source: Minex Consulting
Gold
Gold remains a safe
haven for the foreseeable
future
Gold continues to maintain its upwards trajectory with current prices over US$1,600/oz. The
maintenance of the safe haven status continues with the weakness of the US dollar,
European sovereign risk, US quantitative easing and debt default, and rising global inflation
levels. Gold is expected to maintain prices above US$1,200/oz over the short to medium
term.
Phosphate
Phosphate demand
remains critical in
meeting global food
production needs
Phosphate fertilizer demand is growing in order to satisfy increasing global nutrient needs. A
combination of depleted arable soils, population growth, progress in developing countries,
changing diets and greater use of biofuels is driving fertilizer needs. While Australia is
becoming an important producer, significant imports of phosphate rock (540kt in 2008/09)
and ammonium fertilizers (776kt in 2008/09) continue.
Fig 18: Supply demand forecasts
Fig 19: Wheat growing regions
Demand
Population
Source: Legend International
Page 17 | 23
Peak
Phosphate
Source: ABARE
Greenard Willing Pty Ltd ABN: 43 147 158 334 AFSL: 403562 Copyright © 2011 http://www.greenardwilling.com
15 August 2011
Flinders Exploration
Incitec Pivot (IPL) produces ~975,000t of ammonium fertilizers from Phosphate Hill in
Queensland (resource: 136Mt at 23.2% P205, WMC 2005 – not all resources included).
Minemakers (MAK) is also looking to develop the Wonarah deposit in NT (resource: 1,258Mt
at 12% P2O5) as is Legend International from its Paradise deposits near Mt Isa in
Queensland (1,200Mt at 16% P2O5). Current rock phosphate prices are in the vicinity of
US$200t ex Morocco, while di-ammonium phosphate (DAP) prices vary between US$650t
and $655/t FOB Tampa. As transport is an important cost component, regional/local sources
could become very important.
Fig 20: Rock phosphate and DAP prices
Source: Patersons/Bloomberg
Diamonds
Diamond demand is
expected to grow at very
high rates over next eight
years
Rough diamond production is expected to return to 2008 levels (165M carats) around 2015
and to remain at around 165–167M carats per year as a result of a limited supply of new
projects and depletion of existing mines. Based on the outlook of each of the main diamond
jewellery markets demand is expected to grow by 33% over the next eight years (source:
Alrosa). As a result of this emerging fundamental imbalance between supply and demand,
the rough diamond prices in 2018 may be as much as 31% higher in real terms as compared
to pre-crisis 2008 levels (source: Alrosa).
Australian production has dropped from Argyle given the transition from open pit mining to
underground block caving. Rio Tinto reported production of 9.8M carats in 2010 vs 10.6M
carats in 2009. Other diamond resources are held by Venus Metals (ASX: VMC) with a 5m
carat resource at the Smoke Creek alluvial project, and North Australian Diamonds (ASX:
NAD) with 7.2M carat resource at the previously mined Merlin deposit.
Supply is not expected to
keep up with demand
Fig 21: Diamond market supply and demand
Source: Alrosa
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15 August 2011
Flinders Exploration
Directors
Chairman: Andrew J Andrejewskis
Mr Andrejewskis has held senior roles within both Government and private industry. He was
Managing Director of SAPEX Limited which was recently bought out by Linc Energy. He is a
former Director General and CEO of the Department of Mines and Energy, South Australia
(MESA) and Director Petroleum Development for the Northern Territory government. Mr
Andrejewskis has previously held CEO and Board positions in resource companies.
Managing Director : David Tucker
FEX will be headed by highly experienced and current FMS diamond and phosphate
exploration manager, Dr David Tucker. Dr Tucker is a geophysicist with 37 years’ experience
in multi-commodity mineral and petroleum exploration in Australia and overseas. He has
broad experience in diamonds, base and precious metals. His career has involved him in
programs with both government and private sector companies.
Dr Tucker was previously Principal Research Scientist with the Federal Government’s
airborne geophysical survey where he oversaw the introduction of high quality geophysical
imagery for the exploration industry. Subsequently, he has been the designer and quality
controller in some of the largest new airborne magnetic and radiometric surveys in Australia’s
history.
He has been a principal in a petroleum exploration joint venture in the South Australian
Stansbury Basin and was founding shareholder, chairman and managing director of the
Kalahari Mining NL group of companies which were exploring in Namibia and Botswana for
base metals and gold.
Executive Director : Kevin Wills
Kevin Wills was the former and founding Managing Director of FMS, responsible for the
recognition and initial evaluation of the Blacksmith iron ore deposit. He has previously held
MD and board positions in several resource companies. He has also been involved with
discovery, feasibility and development of numerous ore bodies including: diamonds, base
metals, gold, mineral sands and iron ore. He also introduced calcrete sampling to SA which
was later instrumental in the Challenger discovery.
He has extensive diamond and South Australian exploration management experience which
will be valuable to the new company.
Kevin Wills is an Associate Professor teaching and undertaking research at the University of
Adelaide.
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15 August 2011
Flinders Exploration
References
Replacement Supplementary Prospectus, Flinders Exploration Pty Ltd
Fourth Supplementary Prospectus, Flinders Exploration Pty Ltd
Quarterly Report to 30-6-11, Venturex Resources ASX Announcement
Investor Roadshow Presentation, Ivanhoe Mines Australia
Conceptual Study for Hillside, Rex Minerals ASX Announcement
Exposure to new gold and copper development projects, Flinders Exploration
Pty Ltd
June 2011 Investor Presentation, Metminco Resources
Second Supplementary Prospectus, Flinders Exploration Pty Ltd
Legend - A Germinating Fertilser Producer, Patersons Securities
Australian Crop Report, ABARE
Size and Grade of Globally Undeveloped Open Pit Cu Deposits, Minex
Consulting Pty Ltd
Capital Mining ASX Announcement
Diamond Market Outlook, Alrosa
CFE Completes Sale of Lady Annie Project, Cape Lambert Iron ASX
Announcement
A new South Australian Explorer, Flinders Exploration Pty Ltd
Redbank Cu Development Study, Redbank Mines ASX Announcement
Supplementary Prospectus, Q Copper Australia
Rosemont Cu Project Feasibility Study NI43-101, Augusta Resource Corp.
Quarterly Report to 31/3/2007, Ramelius Resources ASX Announcement
Prospectus, Capital Mining ASX Announcement
Websites
www.riotinto.com
www.abare.gov.au
www.lgdi.net
eng.alrosa.au
www.capitalmining.com.au
www.fexploration.com
www.redbankcopper.com.au
www.minexconsulting.com
www.augustaresource.com
www.venturexresources.com
www.nadl.com.au
www.rameliusresources.com.au
www.qcopper.com.au
www.capelam.com.au
www.rexminerals.com.au
www.ivanhoeaustralia.com
www.metminco.com.au
www.venusmetals.com.au
www.incitecpivot.com
www.flindersmines.com
www.minemakers.com.au
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Oct-11
Jul-11
Jul-11
Jul-11
Jul-11
May-11
May-11
Apr-11
Apr-11
Feb-11
Sep-10
Jun-10
Jun-10
Jun-10
May-10
May-10
Sep-09
Aug-07
Apr-07
Nov-06
15 August 2011
Flinders Exploration
Glossary
Au = Gold
Auger holes = drill holes
Brecciation= the formation of breccia, or masses of rock composed of fragments of older rock
fused together.
Barite = A yellow, white, or colourless crystalline mineral of barium sulphate.
Cu = Copper
Chromite = a brownish-black mineral consisting of a ferrous chromic oxide in cubic crystalline
form, occurring principally in basic igneous rocks.
Chrome diopside = is a prospecting indicator for diamonds. Diopside is found in ultramafic
(kimberlite and peridotite) igneous rocks.
Costean = the process by which miners seek to discover metallic lodes. It consist in sinking
small pits through the superficial deposits to the solid rock, and then driving from one pit to
another across the direction of the vein, in such manner as to cross all the veins between the
two pits.
DAP = Diammonium phosphate.
Diorite = is a grey to dark grey intermediate intrusive igneous rock.
g = grams
Granodioritic = granodiorite is an instrusive igneous rock similar to granite.
Geosyncline = a usually elongate, basin like depression along the edge of a continent, in
which a thick sequence of sediments and volcanic deposits has accumulated.
High resolution helimag = a high resolution helicopter-borne magnetic and SAM acquisition
system.
Induced polarisation - is a geophysical imaging technique used to identify subsurface
materials, such as ore.
JORC - Joint Ore Reserves Committee.
Kimberlite = an intrusive igneous rock generated at great depth in the earth's mantle and
consisting largely of olivine and phlogopite. It often contains diamonds.
Km = kilometres
Lithio- straigraphic -The scientific study and categorization of rock strata based on their
lithology (colour, texture, and composition).
m = metres
M = million
Mafic = a silicate mineral or rock that is rich in magnesium and iron.
Monzonite porphyry = monzonite porphyry is often associated with copper mineralization in
the porphyry copper ore deposits.
Neoproterozoic rocks = date from 1,000 to 542.0 ± 1M years.
Oz = ounce
ppm = parts per million
Picroilmenite = a chromium- and magnesium-rich variety of ilmenite.
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15 August 2011
Flinders Exploration
Proterozoic - the later of the two divisions of the Precambrian Eon, from about 2.5B to 540M
years ago. The Proterozoic was characterized by the formation of stable continents, the
appearance of abundant bacteria and archaea, and the buildup of oxygen in the atmosphere.
Pyritic = A brass-coloured mineral.
Pyrope = a deep yellowish-red garnet that consists of magnesium aluminium silicate and is
used as a gemstone.
RC = reverse circulation
RAB = Percussion rotary air blast drilling
SXEW = solvent extraction and electrowinning
t = tonnes
Tpd = tonnes per day
Tourmaline = a complex crystalline silicate containing aluminium, boron, and other elements,
used in electronic instrumentation and, especially in its green, clear, and blue varieties, as a
gemstone.
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15 August 2011
Flinders Exploration
Important notice
GREENARD WILLING’s opinions, forecasts or recommendations in this report
reflect the judgement and assumptions of GREENARD WILLING based on
information as at the date of this report and may later change without notice.
GREENARD WILLING accepts no responsibility for data supplied by third parties.
Neither GREENARD WILLING, nor any of our employees, contractors or
associates, is in any way liable for any opinions, forecasts, recommendations or
errors in or omissions from this report.
This report is not an offer or solicitation to sell, purchase or subscribe for any
investment. Any securities recommendation contained in this report is unsolicited
general information only. No investor or potential investor can rely on the contents
of this report but must obtain specific individual financial advice appropriate to their
specific situation and obtain a Product Disclosure Statement or prospectus (if
applicable) before making an investment.
In accordance with section 949A of the Corporations Act 2001, any recipient of this
report should note that the information is general advice only and should not be
interpreted as personal advice as it does not take into account the recipients
objectives , financial situation or needs.
GREENARD WILLING acknowledges that its officers, employees, consultants and
associates may have an interest in the securities, directly or indirectly, which are the
subject of these statements and/or recommendations (if any) and may buy or sell
securities in the companies mentioned in this publication; may initiate transactions
which may not be consistent with the statements and/or recommendations (if any) in
this publication; may have directorships in the companies mentioned in this
publication; and/or may perform paid services for the companies that are the subject
of such statements and/or recommendations (if any).
GREENARD WILLING was commissioned to write this report and received a fixed
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However, under no circumstances has GREENARD WILLING been influenced,
either directly or indirectly, in making any statements and/or recommendations (if
any) contained in this Report.
Copyright in this report vests in GREENARD WILLING.
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