acquisition of uranium tenements

The geology outline and potential information in this market announcement has been compiled by Mr Kim
Stanton-Cook who is a Member of the Australian Institute of Geoscientists. Mr Stanton-Cook has in excess
of 5 years experience which is relevant to the style of mineralisation under consideration and qualifies as a
Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Mineral
Resources and Ore Reserves (the JORC Code).” Mr Stanton-Cook is a consultant to Fast Scout Limited. Mr
Stanton-Cook consents to the inclusion of the geology outline and potential information section of this
market announcement in the form and context in which it appears.
www.fastscout.com
FAST SCOUT LIMITED A.B.N. 94 088 488 724
Level 14, 221 St Georges Terrace, Perth WA 6000
T | + 61 (8) 9214 9700 F | + 61 (8) 9322 1515 E | [email protected]
Tuesday, 20 September 2005
MARKET ANNOUNCEMENT
ACQUISITION OF URANIUM TENEMENTS
The Directors of Fast Scout Limited (“Fast Scout”) are pleased to announce the
Company has entered into an agreement with Hume Mining NL (“Hume”) to acquire a
75% interest in a suite of uranium exploration tenement applications located
principally in the northern part of the Ngalia Basin in the Northern Territory
(“Tenements”).
These Northern Territory Tenements, having a total area of approximately 1,666
square kilometres are adjacent to tenements surrounding the Bigrlyi Uranium Deposit
(held by recent uranium float, Energy Metals Limited – ASX Code: “EME”).
In particular, Exploration Licence Application 24879, being one of the Tenements the
subject of the agreement with Hume, lies 5 km south of the Bigrlyi Uranium Deposit
and is regarded as a key tenement by Hume. As outlined below, Fast Scout’s initial
examination of the geology of such tenement indicates that it may contain a similar
geological environment as that hosting the Bigrlyi Uranium Deposit and has a potential
for economic uranium mineralisation.
The acquisition of these Tenements from Hume is referred to in this announcement as
the “Hume Mining Tenement Acquisition Agreement” (a copy of which is contained in
Annexure A).
GEOLOGY OUTLINE AND POTENTIAL
The Bigrlyi Uranium Deposit occurs in arkosic sandstones in the lower part of the late
Devonian-late Carboniferrous Mt Eclipse Sandstone which is host to 20 regional
uranium prospects and radiometric anomalies principally in the northern margin of the
Ngalia basin.
The Bigrlyi Uranium Deposit is regarded as a typical “modified roll front deposit” where
uranium bearing oxidizing fluids meet with reducing conditions in layers of
predominantly carbonaceous matter in a permeable formation.
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The fluid formation regime at the time of formation of the Bigrlyi deposit and other
prospects in the area appear to occur from north to south.
Regional geological setting indicates these uraniferous fluids probably have originated
from granites of the underlying Arunta complex, and migrated southwards. Here,
reaction with the reductant lithologies led to the precipitation of uranium
mineralisation in the rocks of the Mount Eclipse Sandstone.
This regional uranium-bearing formation continues into ELA 24879.
All tenements under application by Hume which contain the lower Mt Eclipse
Sandstone can be regarded as prospective for economic uranium mineralisation.
In particular the twin conditions of a pre-existing north to south flow regime (with ELA
24879 lying in the path of the movement of these fluids and to the south) and the
nature of permeable strata interlayered with carbonaceous matter may occur in ELA
24879.
Further, low angle thrust faults are postulated as additional primary fluid conduits into
the Mt Eclipse Sandstone.
These matters support the view that ELA 24879 has potential to host economic
uranium mineralisation.
It is anticipated that upon completion of due diligence and a grant of the Tenements,
exploration would advance to drilling as soon as possible.
Northern Territory Tenement Details
These tenements are currently in the application stage with The Northern Territory
Department of Business, Industry and Resource Development (“DBIRD”).
Set out below are details of the Northern Territory Tenements. A tenement map
outline of these Tenements is also provided as an illustration of their proximity to the
Bigrlyi Project tenements held by Energy Metals Limited.
Application No Status Area
(Blocks)
Area
(Approx
km²)
Location /
Property Name
ELA 24879 Application 82 260 Mount Doreen
ELA 24927 Application 338 999 Haasts Bluff
ELA 24928 Application 15 35. Mount Doreen
ELA 24929 Application 26 56 Mount Doreen
ELA 24930 Application 99 314 Mount Doreen

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Western Australia Tenement Details
In addition to the Northern Territory Tenements, Fast Scout has also secured the right
to earn in a 75% interest in a series of further tenements held by Hume Mining in
Western Australia details of which are outlined in the Hume Mining Tenement
Acquisition Agreement (Annexure A). All such tenements (save for Canning Well
Exploration Licence EL 46/629) are applications. The Company has secured a right to
these tenements as an ancillary to the Northern Territory Tenements and will conduct
further due diligence on these tenements to ascertain their prospectivity for uranium
as part of its overall due diligence examination.
The project areas in the Northern Territory and Western Australia are located as
outlined in the following geographic map:
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TERMS OF HUME MINING TENEMENT ACQUISITION AGREEMENT
Upon Fast Scout declaring satisfaction of due diligence by 21 October 2005, Fast Scout
will have the right to earn a 75% interest in the Tenements upon the terms and
conditions described in the Hume Mining Tenement Acquisition Agreement, including:
(1) Fast Scout issuing 5,000,000 fully paid ordinary shares in Fast Scout to Hume
(which ASX has advised will be subject to ASX imposed escrow);
(2) Fast Scout undertaking, at Fast Scout’s expense and absolute discretion,
exploration, feasibility or other expenditure on the Tenements with a view to
delineating relevant resources to support the completion of a bankable feasibility
study and a decision to mine;
(3) Fast Scout keeping the Tenements in good standing;
(4) In addition to the issue of shares referred to in clause 1, the Vendor shall be
entitled to a receive a royalty from Fast Scout of 2% of gross revenues arising
from any commercial exploitation of any minerals from the Tenements;
(5) Fast Scout receiving shareholder approval to undertake the transaction
contemplated in the agreement by 30 November 2005;
(6) Fast Scout completing a capital raising of a minimum of $2,000,000 by 16
December 2005;
Hume’s 25% interest in the Tenements will be free carried until Fast Scout declares a
decision to mine supported by the completion of an appropriate bankable feasibility
study. After a decision to mine is made by Fast Scout with respect to a particular
Tenement, all expenditure incurred in respect of the relevant Tenement will be shared
in proportion to each party’s interest in the Tenement.
The parties have further agreed that, after the issue of the shares by Fast Scout to the
Vendor pursuant to clause 1 (above), in consideration of Hume paying $10,000 to Fast
Scout, Fast Scout will issue and grant to Hume:
(a) 5,000,000 options over fully paid ordinary shares in Fast Scout (each exercisable
at 5 cents on before the date being 5 years after the date of grant of such
options); and
(b) 5,000,000 options over fully paid ordinary shares in Fast Scout (each exercisable
at 10 cents on before the date being 5 years after the date of grant of such
options).
ASX has advised that the above options will be subject to ASX imposed escrow.
The issue of shares and the issue and grant of options by Fast Scout to Hume as
described above is based upon Fast Scout’s existing issued share capital of
102,559,095 fully paid ordinary shares. In the event of any reconstruction of the
issued share capital of Fast Scout, the number of shares to be issued and the number
of options to be issued and granted by Fast Scout to Hume as described above will be
adjusted in the same ratio as the reconstruction.
The specific terms and conditions of the Hume Mining Tenement Acquisition
Agreement are outlined in the letter agreement contained in Annexure A.
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Due Diligence
The Company will advise when it has completed its due diligence on the Tenements.
In this regard, the Company is also investigating the acquisition of other resource
projects in addition to the above Tenements.
If and when such projects are acquired, appropriate announcements will be made.
CAPITAL RAISING
The terms of the Hume Mining Tenement Acquisition Agreement contemplate a capital
raising of a minimum of $2,000,000. Fast Scout intends to raise at least such funds
through either a Share Purchase Plan or a Prospectus or a combination of both.
It is intended that the funds raised from the Share Purchase Plan/Prospectus will be
used to:
(a) advance the commercial prospects of the Tenements;
(b) research and identify other under-explored projects with potential for
commercial mineralisation;
(c) expand the Company’s tenement portfolio by way of specific pegging,
acquisitions and/or farm-in and joint venture agreements;
(d) meet the ongoing operational expenses of the Company.
CAPITAL STRUCTURE
It is contemplated that the Company will undertake a capital raising of a minimum of
$2,000,000 through a Share Purchase Plan and/or a Prospectus.
With respect to the issue of a Prospectus it is contemplated that there may be a
requirement to seek a reconstruction of the issued capital of the Company to accord
with the proposed issue price of securities under the Prospectus, being 20 cents per
share.
At the present time it is not possible for the Company to determine the level of such
potential reconstruction as it will be a function of the capital position of the Company
at the time and the trading price of its securities.
However, the Company advises of the following pro-forma positions for three share
consolidation scenarios: none, on a 2 for 1 and on a 4 for 1 basis:
Pro-Forma Share Capital Structure:
None % 2 for 1 % 4 for 1 %
Current issued share capital 102,559,095 87% 51,279,548 80% 25,639,774 70%
Shares to be issued to Hume for acquisition of Tenements 5,000,000 4% 2,500,000 4% 1,250,000 3%
Amended issued share capital post acquisition of Tenements 107,559,095 53,779,548 26,889,774
Shares issued pursuant to capital raising ($2 million at 20 cents each) 10,000,000 9% 10,000,000 16% 10,000,000 27%
New issued share capital post acquisition of Tenements and capital
raising 117,559,095 100% 63,779,548 100% 36,889,774 100%
Extent of share consolidation:
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EFFECTS ON FINANCIAL POSITION
Pursuant to the Hume Mining Tenement Acquisition Agreement, no funds will be
payable by, or to, Fast Scout.
Fast Scout’s audited 30 June 2005 and unaudited 31 August 2005 Consolidated
Statements of Financial Position is contained in Annexure B. This also contains a proforma
incorporating the following effects:
(1) The issue of 5,000,000 shares to Hume pursuant to the Hume Mining Tenement
Acquisition Agreement (which ASX has advised will be subject to ASX imposed
escrow);
(2) The $2,000,000 capital raising (described above) net of assumed capital raising
costs of $100,000;
(3) The issue and grant of options to Hume in consideration for $10,000 (described
above) (which ASX has advised will be subject to ASX imposed escrow).
GENERAL MEETING OF SHAREHOLDERS
The Directors of Fast Scout will be calling an General Meeting (“EGM”) in due course
so that its shareholders may consider and, if thought fit, pass all relevant
resolution(s):
(1) Approving the change in the nature of Fast Scout’s activities;
(2) Ratifying and approving the execution of the Hume Mining Tenement Acquisition
Agreement;
(3) If required, ratifying and approving the acquisition of any further mining assets
deemed appropriate for acquisition by the Company;
(4) If required, approving the proposed capital raising of the Company of a minimum
of $2,000,000;
(5) If required, approving the consolidation of the existing issued share capital of the
Company;
(6) Approving the change of name of the Company to reflect the new business focus
of the Company;
(7) Any other matters relevant to the new business direction of the Company.
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ASX SUSPENSION
As the Hume Mining Tenement Acquisition Agreement transaction constitutes a change
in the nature of the Company’s activities, Fast Scout has had to apply for a short
suspension from trading on the ASX prior to this market announcement. However,
the ASX has advised that Fast Scout will be reinstated for trading on the ASX upon
release of this market announcement.
Furthermore, upon successful completion of its due diligence on the Hume Mining
Tenement Acquisition Agreement, Fast Scout will be required to apply for another
suspension from the ASX on the eve of the date of the EGM.
After obtaining relevant shareholder approvals, upon the close of the proposed capital
raising of the Company, Fast Scout will apply to the ASX for reinstatement of
quotation. The ASX has advised that reinstatement will be conditional upon
satisfaction of the admission and quotation requirements set out in Chapters 1 and 2
of the ASX Listing Rules.
Where Fast Scout shareholders fail to approve any one of the resolutions proposed for
the EGM as described above, ASX advises that subject to normal compliance with the
ASX Listing Rules, a reinstatement of the securities of the Company will occur on the
basis of its continuing Internet technology operations.
CHANGE OF BOARD
Mr Shanker Madan will be joining the Board of Fast Scout upon the passing by the
Company of all resolutions proposed at the EGM. At such time, Mr Azhar Chaudhri
and Mr Yaqoob Khan will resign as directors of Fast Scout.
About Shanker Madan
Mr Madan, aged 60 years, has honours and masters Science degrees in Applied
Geology. He has had world-wide experience in the exploration and evaluation of
mineral deposits for various commodities.
Mr Madan has been a Manager with Hamersley Iron, Group Leader with BHP
Minerals, Chief Geologist with Hancock and Wright Prospecting and a Senior
Geological Consultant to the Rio Tinto Group. Subsequent to his role as a
promoter and Managing Director of an ASX listed exploration company in the
80’s, he managed a range of mineral evaluation studies in Iran, Brazil and
Western Australia for BHP, Rio Tinto and Hamersley Iron.
He has also acted as a consultant to Rio Tinto, Ashton Mining and others on
mineral projects in Brazil, South Africa, India, the Philippines, Fiji and United
States, working on a range of iron ore, diamonds, gold, copper and chromite
deposits. He has been involved in the discovery of 3 world class iron deposits in
Western Australia for TexasGulf and BHP Minerals.
From 1997 to 2001, Mr Madan managed the evaluation of resource projects for
Hamersley Iron and recently completed a resources due diligence study of the
billion-dollar West Angelas project in the Pilbara region of Western Australia.
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TIMETABLE
Lodgment of market announcement of proposed
acquisition of Tenements
16 September 2005
Reinstatement of quotation of Fast Scout shares on ASX
pending declaration of satisfaction of due diligence and
Fast Scout shareholder approval at EGM
20 September 2005
Declaration of satisfaction of due diligence on the
Tenements
21 October 2005 (1), (2)
Despatch of notice of meeting and explanatory
memorandum for EGM
31 October 2005 (1)
Suspension of Fast Scout shares on the eve of the EGM 29 November 2005 (1)
Fast Scout EGM to approve the Hume Mining Tenement
Acquisition Agreement, change of activities, capital raising
and share reconstruction (if required) and other
appropriate matters
30 November 2005 (1), (2)
Date for completion of $2 million capital raising under the
Hume Mining Tenement Acquisition Agreement
16 December 2005 (1)
Reinstatement of quotation of Fast Scout shares upon recompliance
with ASX Listing Rules
23 December 2005 (1)
Notes:
(1) Indicative dates only, which may change;
(2) Dates may change by agreement of Fast Scout and Hume pursuant to the Hume Mining Tenement
Acquisition Agreement;
(3) The $2 million capital raising may take the form of a Share Purchase Plan and/or a Prospectus.
Documents for such fund raising will be issued by Fast Scout after 19 September 2005 (with the issue
of shares subject to Fast Scout approvals at the EGM).
CONTINUING OPERATIONS
Until such time as the Directors’ due diligence and the proposed change of activities
and likely recapitalisation of the Company is completed, the Company is continuing its
principal activities being the sale and marketing and on-going development of its
various Internet technologies and other activities as outlined in its 2005 Full Year
Reports lodged on ASX on 13 September 2005.
The Company also confirms that it is currently in discussions with various stockbrokers
and its major shareholder, Data Base Systems Limited (“DBS”) (currently a 69%
shareholder) with respect to the proposed $2,000,000 capital raising and with respect
to its position as a large shareholder of the Company.
It is proposed that DBS will reduce its shareholding in the Company through the sale
of approximately 25 million of its 71 million shares to clients of such stockbrokers to
assist in creating a more liquid market for Fast Scout’s shares.
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ABOUT FAST SCOUT
Fast Scout provides Internet Security solutions based upon its Virtual Web software.
Virtual Web protects internet users from objectionable and inappropriate materials on
the Internet and is used in schools, government agencies and commercial enterprises.
ABOUT HUME MINING NL
Hume Mining NL is a wholly owned subsidiary of ASX listed investment company,
Central Exchange Limited (ASX Code: “CXL”). Incorporated in March 1994, Hume
holds a portfolio of mineral exploration properties prospective for Uranium, Gold and
Iron Ore.
Further information:
Fast Scout Hume Mining / Central Exchange
Farooq Khan William Johnson
Chairman Chairman
T | (08) 9214 9700 T | (08) 9214 9797
E | [email protected] E | [email protected]
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ANNEXURE A
HUME MINING TENEMENT ACQUISITION AGREEMENT
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ANNEXURE B
FAST SCOUT LIMITED CONSOLIDATED
PRO-FORMA STATEMENTS OF FINANCIAL POSITION
Consolidated Statement of Financial Position
for Fast Scout Limited (and controlled entities)
Audited Unaudited Pro-Forma
30/6/2005 31/8/2005
After Capital
Raising
Note $ $ $
CURRENT ASSETS
Cash assets 54,197 64,538 1,974,538
Receivables 169,459 19,596 19,596
TOTAL CURRENT ASSETS 223,656 84,134 1,994,134
NON CURRENT ASSETS
Receivables 500 - -
Property, plant and equipment 47,309 47,309 47,309
Other financial assets 1 376,750 471,625 471,625
Investments accounted for using equity method 2 147,425 8,012 8,012
Internet technologies -
Prepaid classification works - - -
Other development works - - -
Intangibles - - -
Other 3 - - 55,000
TOTAL NON CURRENT ASSETS 571,984 526,946 581,946
TOTAL ASSETS 795,640 611,080 2,576,080
CURRENT LIABILITIES
Payables 544,869 282,875 282,875
Provisions 21,732 21,732 21,732
TOTAL CURRENT LIABILITIES 566,601 304,607 304,607
TOTAL LIABILITIES 566,601 304,607 304,607
NET ASSETS 229,039 306,472 2,271,472
EQUITY
Contributed equity 16,414,372 16,833,688 18,798,688
Accumulated losses (16,185,333) (16,527,216) (16,527,216)
TOTAL EQUITY 229,039 306,472 2,271,472
Issue of 5,000,000 shares to Hume Mining NL in consideration for acquisition of 75% interest in the Tenements 55,000
(at an issue price of 1.1 cents each, being the closing price on ASX on 15 September 2005,
being the date of the Hume Mining Tenement Acquisition Agreement)
Capital raising by Share Purchase Plan/Prospectus 2,000,000
Costs of capital raising (estimated) (100,000)
Net capital raised 1,900,000
Consideration received on options subscription by Hume Mining NL 10,000
Notes:
(1) Other financial assets comprise investment in ASX listed securities:
31-Aug-05
Company No Shares % Last Bid Price Market Value
Central Exchange Limited (CXL) 505,026 2.83% $0.590 $297,965
Queste Communications Limited (QUE) 826,950 2.91% $0.210 $173,660
Total $471,625
(2) Investments accounted for using equity method comprise investments in ASX listed (but suspended) securities:
Company No Shares %
Altera Capital Limited (AEA) 20,002,860 32.3%
Sofcom Limited (SOF) 12,420,439 27.8%
(3)
The Company is the largest shareholder in AEA and SOF both of which are ASX listed companies, currently suspended awaiting a potential
recapitalisation and re-admission to ASX. FSL is in discussions with a number of parties regarding a sale of its interest in these companies. FSL's
nil valuation for its shareholding in these companies does not reflect any potential “control premium” upon a possible sale of such shareholdings.
Other non-current assets comprise the consideration for the Tenements calculated by reference to the issue price of the 5,000,000 shares proposed
to be issued to Hume Mining NL, being 1.1 cents each (the closing price on ASX on 15 September 2005, being the date of the Hume Mining
Tenement Acquisition Agreement)