quartely report

25 Charles Street, South Perth WA 6151 PO Box 1013, South Perth WA 6951
Telephone: (08) 9368 4544 Facsimile: (08) 9368 4522
Web: www.oropa.com.au Email: [email protected]
ACN: 009 241 374
\
QUARTERLY REPORT
for three months ending 30 June 2006
HIGHLIGHTS
CORPORATE
o The Company’s pro-rata non-renounceable rights issue to shareholders and subsequent
placements which closed on 3 May 2006 was almost fully subscribed and raised $3.58 million,
excluding costs and fees associated with the issue. The Directors were highly encouraged by
the response from shareholders and investors towards this capital raising
PUNGKUT GOLD PROJECT
o Drilling at the Sihayo 1 Prospect discovers gold and silver mineralisation within a broad,
intense hydrothermal alteration system
o Significant gold intersections from diamond drilling at the Sambung prospect confirms the
prospectivity of the area
o Drilling at Sambung continues towards defining a JORC compliant Resource
o Soil sampling at Tambang Tinggi delineates a large gold soil anomaly with coincident high
grade rock chips within an intense hydrothermal alteration
o Mapping and sampling well under way at Tambang Ubi in preparation for drilling this coming
quarter
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1. CORPORATE
Oropa’s pro rata non-renounceable rights issue
to shareholders to raise up to $3.82 million via
the issue of up to 27,290,678 shares on the
basis of two shares for every five held at an
issue price of $0.14 per share, together with up
to 13,645,340 free attaching options, each to
acquire one share at $0.20 on or before 31
December 2006 closed on 3 May 2006.
The Company’s directors were extremely
encouraged that the issue to shareholders and
subsequent placements was almost fully
subscribed and raised $3,582,626.46,
excluding the costs and fees associated with
the issue.
Upon the allotment of all of the shares and
options, the Company currently has
93,816,886 shares on issue, along with
12,795,104 listed options exercisable at 20
cents per share, expiring on 31 December
2006, plus 13,280,776 listed options
exercisable at 50 cents on or before 31
December 2007. Funds raised throughout the
duration of the extended issue and post the
completion of the issue have been directed
towards significantly increased levels of
exploration and development programmes at
the Pungkut gold project in Sumatra,
Indonesia.
2. REVIEW OF OPERATIONS
2.1 Indonesia
Pungkut Gold Project, Sumatra (75%)
Sihayo 1
Located approximately 1km south of the
610,000 oz Au Sihayo 1 North Inferred
Resource, initial potential of the Sihayo 1
prospect was tested by the completion of a 14
diamond drill hole programme for 991.6m of
drilling during the June quarter.
Gold mineralisation encountered at Sihayo 1 in
earlier surface sampling, trenching and scout
drilling was generally confined to outcropping
jasperoid on or near the contact with overlying
Tertiary sediments. This is geologically
similar to the Sihayo 1 North gold resource,
where sub-horizontal zones of gold-bearing
jasperoid developed on the contact between
older Permian limestone and younger Tertiary
sediments.
Drilling encountered intense hydrothermal
alteration of Permian lithology that included
both limestone and welded dacite
volcaniclastics. The Tertiary sediment cover
was found to be either absent or substantially
thinner than expected and appears to have
largely been eroded away.
Mineralisation was encountered both at the
remnant Tertiary contact position and within
intensely altered, brecciated limestone and
dacite volcaniclastics.
Better results returned from drilling included;
• SHDD067:
4m@ 4.09g/t Au from 3m and
• SHDD068:
5m @ 2.1g/t Au from 7m
Drill hole SHDD076 intersected several zones
of gold and silver mineralisation in intensely
altered dacite volcaniclastics and limestone
that included;
• SHDD076:
5m @ 238.75g/t Ag from 41m
(including 1m @ 522g/t Ag from
43m) and
5m @ 66.25g/t Ag from 54m.
Elsewhere, anomalous gold values were
encountered in intensely altered lithology
(table 1).
Drilling has now confirmed the presence of
widespread gold and silver mineralisation at
Sihayo 1. Gold mineralisation is related to
intense hydrothermal alteration and, similarly
to the nearby Sihayo 1 North gold deposit,
occurs as both Tertiary contact jasperoid and
jasperoid breccias. It is therefore reasonable to
conclude that hydrothermal alteration
identified at the Sihayo 1 and Sihayo 1 North
prospects relate to one large hydrothermal
system. It appears that this system is
responsible for the widespread gold and silver
mineralisation encountered in surface
geochemical sampling, trenching and drilling
throughout the Sihayo 1 area. Silver
mineralisation appears to be related to a more
structurally complex zone typified by
hydrothermal brecciation of limestone and
dacite volcaniclastic units.
Mineralisation remains open, with a large
portion of the Tertiary contact yet to be drill
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tested. Trenching, detailed mapping and
further drilling is planned to follow up these
encouraging results from this initial drill
programme.
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Sambung
During the quarter, Oropa completed 25
diamond drill holes for 1837.9m of drilling at
the Sambung prospect.
Gold mineralisation previously discovered at
Sambung in trenching and scout drilling is
related to a large hydrothermal alteration
system, which extends over some 5km in
length and includes the Sihayo 1 North
resource and the Sihayo 1 prospect.
Drilling at Sambung targeted geophysical
anomalies plus gold mineralisation identified
in earlier surface sampling, trenching and scout
drilling. The targeted zones included
intrusive-related gold/base metal
mineralisation, Tertiary sediment contact
jasperoid-hosted gold mineralisation and
primary jasperoid breccia hosted gold
mineralisation. A series of shallow, vertical
holes, designed to test the lateral extent of
gold-bearing jasperoid colluvium were
included in this quarter’s drilling programme.
To date, drilling has confirmed the presence of
gold-bearing jasperoid mineralisation on the
Tertiary contact:
• SAMDD012:
5m @ 1.21g/t Au from 79.4m
• SAMDD016:
18m @ 2.84g/t Au from 35m
Mineralisation was also encountered in
primary breccia zones such as:
• SAMDD019:
19m @ 2.27g/t Au from 48m
including
3m @ 10.07g/t Au from 59m
Colluvial/alluvial jasperoid material also
yielded encouraging gold values:
• SAMDD022:
22.05m @ 5.86g/t Au from 1m
Drill testing of geophysical anomalies
encountered gold, silver and base metal
mineralisation:
• SAMDD011:
3m @ 2.85g/t Au from 18m plus
3m @ 1.28%Pb, 2.94% Zn and
33.6g/t Ag from 116m
This mineralisation may be related to a
proximal intrusive body.
Drill holes completed to date have defined a
central zone of mineralisation with a strike
length of approximately 600m, within which
gold mineralisation occurs as sub-cropping
jasperoid, primary jasperoid breccias and as
jasperoid on the Tertiary sediment contact.
Oropa plans to continue drilling at Sambung,
with a view towards completing an initial
resource estimation of the central zone during
the September quarter.
Drilling will also target areas of gold
mineralisation identified in trenching and rock
chip sampling to the south of Sambung this
coming quarter.
Southern Block Exploration
Tambang Tinggi
Oropa continued its regional exploration of the
Tambang Tinggi area this quarter, completing
57 line kilometres of gridding and soil
sampling on a 50m grid spacing. Soil and rock
chip sampling has identified an extensive,
cohesive gold soil anomaly (values greater
than 0.1ppm Au and up to 1.51ppm Au)
approximately 800m x 250m)
Small scale gold mining by local villagers
occurs within this anomalous zone, generally
exploiting narrow quartz veins developed
within a magnetite-rich diorite intrusive body.
Soil sampling also clearly highlighted the
Tambang Tinggi granite-hosted zone of gold
mineralisation identified by drilling in late
2005 (THDD002: 25m @ 4.58g/t Au from
31m including 1.2m @ 60.5g/t Au from
52.8m). Gold mineralisation at Tambang
Tinggi is associated with a hydrothermally
altered micro-granite intrusive plug. A
particular feature of the mineralised area is the
destruction of magnetite, potentially making
the altered portions of the intrusive body
definable by a ground magnetic survey.
Oropa plans to follow up soil geochemical
anomalies with regional geophysics, trenching
and if warranted, drilling during the next
December quarter.
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Figure 4: Southern Block Prospect Locations
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Tambang Ubi
Mapping and gridding at Tambang Ubi
commenced this quarter, focussing on the
historical Dutch underground workings and the
surrounding areas. Tambang Ubi is a coppergold
skarn deposit exploited by a Dutch
mining company until the outbreak of the
Second World War. Local miners continue to
exploit gold/copper mineralisation at a number
of locations. Rock chip sampling of historical
and active underground workings returned
maximum values of 39.4g/t Au, 4.7% Cu and
88g/t Ag.
A total of 27.8 line km of gridding was
established this quarter over the main prospect
area to assist with the detailed mapping of the
local geology and to accurately define
historical and active underground workings.
This work will assist in accurately defining
drill targets for testing this coming quarter.
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Table 1: Sihayo 1 Prospect Drilling Summary
Hole Local Significant Intersections
North
Local
East
Dip Depth
From To M Au g/t Ag g/t
SHDD066 55700 9653 -90 122 No significant intersections
SHDD067 55705 9748 -90 60 3 7 4 4.09
SHDD068 55706 9548.5 -90 24.1 7 12 5 2.10
SHDD069 55706.5 9550 -90 18.3 7 13 6 1.42
SHDD070 55706 9550 -90 50.6 7 13 6 1.72
SHDD071 55812 9606 -90 87.8 43 52 9 1.02
SHDD072 9700 55868 -90 78 No significant intersections
SHDD073 9800 55811 -90 110 38 40 2 0.92
45 49 4 0.65
76 79 3 0.94
83 86 3 0.66
SHDD074 9743 55898 -90 86 18 26 8 0.75
SHDD075 9641 55900 -90 52.9 No significant intersections
SHDD076 9550 55900 -90 81.9 29 32 3 0.89
41 46 5 238.75
Including 43 44 1 522
48 53 5 0.74
54 59 5 66.25
SHDD077 9500 55800 -90 69.5 24 25.5 1.5 0.62
SHDD078 9550 56000 -90 68 No significant intersections
SHDD079 9650 56000 -90 82.5 6 11 5 0.82
26 27 1 2.14
Table 2: Sambung Prospect Drilling Summary
Coordinates Intersection
Hole Local
E
Local
N
Dip Dir M
From To M Au
g/t
Ag
g/t Zn% Pb%
SAMDD011 56504 9640 -45 220 172.6 11 14 3 1.74
18 21 3 2.85
40 41 1 1.02
116 119 3 - 33.6 2.94 1.26
SAMDD012 56680 9950 -55 220 129.2 79.4 83.4 5 1.21
SAMDD013 56680 9950 -90 158.7 No significant intersections
SAMDD014 56630 9905 -60 220 119 45 56 11 1.01
including 45 47 2 2.97
63 74 11 0.71
SAMDD015 56600 9907 -60 220 123 66.6 68.6 2 1.18
92 99 7 1.11
SAMDD016 56793 9960 -60 220 73 35 53 18 2.84
including 38 44 6 4.88
SAMDD017 56834 10006 -60 220 93.6 65 66 1 2.36
SAMDD018 56895 9936 -90 0 50.4 To be re-drilled due to poor
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recoveries
SAMDD019 56802 9895 -90 0 73.6 7 33 26 2.86
including 8 19 11 4.23
48 67 19 2.27
including 59 62 3 10.07
SAMDD020 57005 9902 -90 0 34.2 4 12 8 1.52
including 4 6 2 3.25
and 10 2 2 2.18
SAMDD021 57000 9944 -90 0 45.5* 10 21 11 2.30
SAMDD022 57100 9950 -90 0 35.5 1 23.05 22.05 5.86
SAMDD023 57000 9990 -60 220 76.1 12 16.85 4.85 0.69
and 22 39 17 0.82
SAMDD024 57163 9950 -90 0 25.35 0 2 2 4.85
SAMDD025 57100 9900 -90 0 22.1 No significant intersections
SAMDD026 57100 9850 -90 0 27 No significant intersections
SAMDD027 57000 9990 -90 0 72.5 29 35.05 6.05 1.10
SAMDD028 57200 9950 -90 0 20* No significant intersections
SAMDD029 57291 9975 -90 0 20 1 2 1 0.94
SAMDD030 57300 10000 -90 0 20.1 7 8 1 1.42
10 11 1 0.86
SAMDD031 57300 10050 -90 0 39.1 1 2 1 0.61
SAMDD032 57000 9990 -60 040 100.3 0 2 2 0.51
SAMDD033 57200 9995 -60 220 70 0 16 16 1.26
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2.2 India
Block D-7 Diamond Project, Chhattisgarh
(18%, option to increase to 27%)
Oropa’s long running court case against
the Chhattisgarh state government
involving the suspension of the Block D-7
Prospecting Licence (“P/L”) made another
step forward during the quarter, with the
Supreme court in Delhi’s dismissal of the
second of three third party applications for
small areas of land within Block D-7. This
dismissal paves the way for the
Chhattisgarh high court to deal with the
matter within its own jurisdiction as the
third application was lodged with the
Chhattisgarh high court. A number of
meetings/hearings were convened late in
the June quarter and early July between
BVCE’s solicitors, the state’s Advocate
General and the high court judge presiding
over the matter. Additional material was
requisitioned by the judge which has been
furnished to the court. It would be logical
to now assume that the judge will deal with
the matter as there are no extraneous
interventions from other legal jurisdictions
and he is well aware of the collective intent
of both the state government and BVCE to
resume work on the block at the
commencement of this years field season
in October.
Krishna River Gravels, Andhra Pradesh
(20%, option to increase to 30%)
Oropa’s Indian operating company,
B.Vijaykumar Technical Services Pvt Ltd
(“BVTS”) applied for two large contiguous
Reconnaissance Permits (“RPs”) collectively
covering in excess of 9,000km2, after Oropa’s
geologists had completed a geological survey
of the area in mid-2000. Owing to reasons
outside of Oropa’s control the Andhra Pradesh
(“AP”) state government has been reluctant to
approve them, citing the Block D-7 matter as
their primary concern. After receiving legal
advice, BVTS initiated legal proceedings in the
AP high court to force the state’s hand by
BVTS obtaining a court order for the state to
issue the RPs. The matters are being dealt
with separately, with the delta area RP
application being the first for mention. A
prominent law firm in Hyderabad and an
associate high court senior counsel have been
engaged to argue both cases. Our solicitors are
confident that the first case will be heard by
the high court later this month.
2.3 Australia
Lake Deborah Gold Project (5% Free Carried)
The Golden Valley Joint Venture (“GVJV”)
covers a portfolio of tenements subject to a
joint venture agreement entered into between
Polaris Metals NL (“Polaris”), Western Areas
NL, Geoinformatics Exploration Limited and
Oropa. Under the GVJV, Oropa is free carried
to the completion of a bankable feasibility
study by Polaris with an option for Oropa to
increase its interest in the Lake Deborah
tenements (“designated area”) to a 15%
participating interest by paying Polaris $50,000
cash consideration, plus 15% of Polaris’ total
expenditure on the designated area.
As a result of recent changes to the Mining Act
1978, Polaris as Manager of the GVJV is
currently conducting a reversion process of the
tenements under the new regulations, resulting
in a reduced number of exploration licences.
2.4 Project Evaluation
With the ongoing impasse in India, the
Company is actively sourcing another quality
project to supplement the Pungkut gold
project. A number of projects located in SE
Asia were evaluated during the June quarter
and into July. However, none were regarded
as being capable of hosting sufficient resource
potential, or were grossly overvalued to justify
joint venture or ongoing farmin negotiations.
Project evaluation, both in Australia and
overseas is ongoing.
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PHILIP C CHRISTIE
Director
31 July 2006
Note 1: It is advised that in accordance with
the Australian Stock Exchange Limited Listing
Rule 5.6, the information in this report that
relates to Exploration Results is based on
information compiled by Mr. Jim Kerr, who is a
Member of the Australasian Institute of Mining
and Metallurgy. Mr. Kerr is a full time
employee of Oropa Limited and has sufficient
experience which is relevant to the style of
mineralisation and type of deposit which is
under consideration and to the activity which
he is undertaking to qualify as a Competent
Person as defined in the 2004 Edition of the
“Australasian Code for Reporting of
Exploration Results, Mineral Resources and
Ore Reserves”. Mr. Jim Kerr consents to the
inclusion in this report of the matters based on
his information in the form and context in which
it appears.
Note 2: All statements in this report, other than
statements of historical facts that address
future timings, activities, events and
developments that the Company expects, are
forward looking statements. Although Oropa
Ltd, its subsidiaries, officers and consultants
believe the expectations expressed in such
forward looking statements are based on
reasonable expectations, investors are
cautioned that such statements are not
guarantees of future performance and actual
results or developments may differ materially
from those in the forward looking statements.
Factors that could cause actual results to differ
materially from forward looking statements
include, amongst other things commodity
prices, continued availability of capital and
financing, timing and receipt of environmental
and other regulatory approvals, and general
economic, market or business conditions
Appendix 5B
Mining exploration entity quarterly report
+ See chapter 19 for defined terms.
28/7/2006 Appendix 5B Page 1
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
OROPA LIMITED
ABN Quarter ended (“current quarter”)
77 009 241 374 30 JUNE 2006
Consolidated statement of cash flows
Cash flows related to operating activities
Current quarter
$A
Year to date
(12 months)
$A
1.1 Receipts from product sales and related debtors
- -
1.2 Payments for (a) exploration and evaluation
(b) development
(c) production
(d) administration
(661,243)
-
-
(183,329)
(1,886,722)
-
-
(888,801)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature
received
19,760
42,701
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Other (provide details if material) - -
Net Operating Cash Flows
(824,812) (2,732,822)
Cash flows related to investing activities
1.8 Payment for purchases of: (a)prospects
(b)equity investments
(c) other fixed assets
-
-
(7,451)
-
-
(28,298)
1.9 Proceeds from sale of: (a)prospects
(b)equity investments
(c)other fixed assets
-
-
-
-
-
-
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other – cash acquired on purchase of subsidiary - -
Net investing cash flows
(7,451)
(28,298)
1.13 Total operating and investing cash flows
(carried forward)
(832,263)
(2,761,120)
Appendix 5B
Mining exploration entity quarterly report
+ See chapter 19 for defined terms.
28/7/2006 Appendix 5B Page 2
1.13 Total operating and investing cash flows
(brought forward)
(832,263) (2,761,120)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 1,819,201 5,027,247
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other – cost of share issue (94,694) (194,865)
Net financing cash flows 1,724,507 4,832,382
Net increase (decrease) in cash held
892,244
2,071,262
1.20 Cash at beginning of quarter/year to date 1,668,617 472,210
1.21 Exchange rate adjustments to item 1.20 (17,112) 277
1.22 Cash at end of quarter 2,543,749 2,543,749
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
Current quarter
$A
1.23
Aggregate amount of payments to the parties included in item 1.2
77,795
1.24
Aggregate amount of loans to the parties included in item 1.10
-
1.25
Explanation necessary for an understanding of the transactions
NOT APPLICABLE
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated
assets and liabilities but did not involve cash flows
NOT APPLICABLE
2.2 Details of outlays made by other entities to establish or increase their share in projects in which the
reporting entity has an interest
NOT APPLICABLE
Appendix 5B
Mining exploration entity quarterly report
+ See chapter 19 for defined terms.
28/7/2006 Appendix 5B Page 3
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available
$A
Amount used
$A
3.1 Loan facilities
- -
3.2 Credit standby arrangements
- -
Estimated cash outflows for next quarter
$A
4.1 Exploration and evaluation
300,000
4.2 Development
-
Total
300,000
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as
shown in the consolidated statement of cash flows) to
the related items in the accounts is as follows.
Current quarter
$A
Previous quarter
$A
5.1 Cash on hand and at bank 2,507,749 1,632,617
5.2 Deposits at call – Bank Guarantee 20,000
- Term Deposit
20,000
16,000
20,000
16,000
5.3 Bank overdraft - -
5.4 Other – Share Purchase Plan A/c - -
Total: cash at end of quarter (item 1.22) 2,543,749 1,668,617
Changes in interests in mining tenements
Tenement
reference
Nature of interest
(note (2))
Interest at
beginning
of quarter
Interest at
end of
quarter
6.1 Interests in mining
tenements relinquished,
reduced or lapsed
6.2 Interests in mining
tenements acquired or
increased
Appendix 5B
Mining exploration entity quarterly report
+ See chapter 19 for defined terms.
28/7/2006 Appendix 5B Page 4
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number quoted Issue price per
security (see note
3) (cents)
Amount paid up per
security (see note 3)
(cents)
7.1 Preference
+securities
(description)
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buybacks,
redemptions
7.3 +Ordinary
securities
93,816,886 93,816,886
7.4 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buybacks
82,331,968
82,331,968
14 Cents
14 cents
7.5 +Convertible
debt securities
(description)
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through
securities
matured,
converted
7.7 Options
(description and
conversion
factor)
13,280,776
12,795,104
13,280,776
12,795,104
Exercise price
$0.50
$0.20
Expiry date
31/12/2007
31/12/2006
7.8 Issued during
quarter
7,052,636
7,052,636
Exercise Price
$0.20
Expiry Date
31/12/2006
7.9 Exercised during
quarter
7.10 Expired during
quarter
7.11 Debentures
(totals only)
7.12 Unsecured
notes (totals
only)
Appendix 5B
Mining exploration entity quarterly report
+ See chapter 19 for defined terms.
28/7/2006 Appendix 5B Page 5
Compliance statement
1 This statement has been prepared under accounting policies which comply with accounting
standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
2 This statement does /does not* give a true and fair view of the matters disclosed.
28 July 2006
Sign here: ............................................................ Date: ............................
(Director)
Print name: PHILIP C CHRISTIE
Notes
1 The quarterly report provides a basis for informing the market how the entity’s activities have
been financed for the past quarter and the effect on its cash position. An entity wanting to
disclose additional information is encouraged to do so, in a note or notes attached to this report.
2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining
tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a
joint venture agreement and there are conditions precedent which will change its percentage
interest in a mining tenement, it should disclose the change of percentage interest and conditions
precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1
and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and
AASB 1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Accounting
Standards for foreign entities. If the standards used do not address a topic, the Australian
standard on that topic (if any) must be complied with.
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