On behalf of the Directors, I am pleased to present to you Minbos Resources Limited’s (“Minbos” or “the Company”) Annual Report to shareholders for the year ended 30 June 2013.
There is no escaping from the fact that FY 2013 has been a challenging year – not just for Minbos, but for many smaller companies in the mining industry. The capital market has contracted significantly and even quality projects, which I firmly believe ours are, have not been guaranteed funding. As a result, Minbos’ share price has declined steadily to disappointingly low levels and I know our shareholder base has been concerned at this trend.
I wish to assure shareholders that a prime focus of the Board during the year has been sourcing suitable funding to meet the immediate needs of our key phosphate projects in Angola and the Democratic Republic of Congo.
The Board is currently structuring a series of financial instruments that we believe will enable us to fund our equity share of our Angolan project as a priority. I am very excited about proceeding with this project, with the goal of taking it into production, which will of course generate cash flow for the Company.
The past 12 months has been a period of significant change and re-generation for the company in many ways. The business has been strengthened through a restructuring of both our operational capability and Board and executive capability.
We have recently welcomed Bill Oliver to the Board of Minbos. Bill’s skill set and African experience will substantially boost the Board’s capability. We will continue to seek to strengthen the Board as we move forward, ensuring we have the right team in place to oversee the development of our assets into production.
FY2013 has also seen a heightened focus on cost reduction initiatives, to reduce our fixed cost base whilst the projects are in feasibility stage. This includes a reduction in our African employee base by 75%, a reduction in our Australian and African office costs, and the rationalisation of our logistics functions. We have also improved our governance throughout all levels of the Company. As a result of these measures, I believe we are now in the best possible shape to move forward with our exciting projects.
Our key focus in the DRC has been negotiating with our joint venture partner Allamanda to restructure the Joint Venture (JV) in a way that is more amenable to external funding and to transfer the exploration licences into the JV company, Phosphalux SPRL. While these discussions are ongoing, I can report that we have made substantial progress on the project. We recently announced a resource upgrade to JORC Indicated status of 58.5Mt at 14.2% P2O5. We have completed a first stage logistics study that has concluded that barging and trans-shipping our product on the Congo River is a possibility and further detailed studies would be the next step. We have also completed a preliminary environmental review that would accompany the scoping study in a Mining Licence application once the licences are transferred. The Board is continually reviewing its options to derive value from this project.
Cacata is awaiting the renewal of it Exploitation Permits before proceeding with the bankable feasibility study (BFS). The Government of Angola is processing these under the country’s new mining code, with this process taking longer than initially anticipated. However, the project is well placed and we expect the renewal process to conclude in October 2013 with funding being finalised shortly thereafter and the BFS moving forward.
We look forward to an exciting year ahead. I thank our loyal staff for their dedication throughout the last year and I thank you, our shareholders, on behalf of the Board for your support and continued belief in the Company
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Next week is October ;-)
Funding secured...
re-rating
MNB Price at posting:
1.4¢ Sentiment: LT Buy Disclosure: Held
