quarterly report

Page 1 www.oropa.com.au
QUARTERLY REPORT
for three months ending 31 March 2006
HIGHLIGHTS
Corporate
The pro rata non-renounceable rights issue to raise up to $3.82 million that was
dispatched to Company’s shareholders in early December 2005 will close at
5.00pm AWST on Wednesday, 3 May 2006. To date approximately $2.1 million
has been raised from the offer.
Pungkut Gold Project
Following initial drilling success at the Tambang Tinggi prospect in the southern
block, reconnaissance exploration discovered high grade rock chip gold values of
up to 20.1g/t Au.
Drilling commenced at the Sambung prospect in the northern block, testing
geophysical anomalies and high grade trench results.
Block D-7
Following on from a significant breakthrough at a high court hearing in mid-
January, B.Vijaykumar Chhattisgarh Exploration Pvt Ltd and its minority share
holder, (Chhattisgarh state government) have jointly lobbied the high court to
dismiss the case and hand it back to the state for processing.
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]
ABN: 77 009 241 374
Page 2 www.oropa.com.au
1. CORPORATE
On 22 November 2005, the Company
announced a 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.
In late January the Australian Stock
Exchange Limited (“ASX”) granted the
Company an extension up until 5:00pm
on Friday 3 February 2006 in
consideration of an increase in Oropa’s
share price and also as a consequence of
encouraging trenching results obtained
from the Sambung prospect in the
northern block of the Pungkut gold
project in Indonesia (“Pungkut”).
Under the terms of the Prospectus, the
Company’s directors were entitled to
place any shortfall not taken up by the
close of the offer within a 3 month
period, which expires on 3 May 2006.
To date the Company has raised
approximately $2.1 million from the
issue of some 15 million shares and 7.5
million free attaching options.
2. REVIEW OF OPERATIONS
2.1 Indonesia
Pungkut Gold Project, Sumatra (75%)
Overview
Field activities this quarter focussed on
the Company’s Pungkut Contract of
Work (“CoW”), located in North
Sumatra, Indonesia (Figure 1).
Page 3 www.oropa.com.au
Figure 1: Pungkut Contract of Work Prospect Location
SIHAYO - SAMBUNG
TAMBANG TINGGI
The southern block field work included
mapping, soil sampling and rock chip
sampling over the Tambang Tinggi area
in conjunction with gridding and
mapping over the historical Tambang
Ubi gold / copper mine.
In the northern block, gridding, mapping
and drilling commenced at the Sambung
and Sihayo 1 prospects, following up
from earlier high grade gold
intersections obtained from trenching
and testing the geological interpretation
of the local geology.
Southern Block
Tambang Tinggi
An initial programme of scout drilling
completed at Tambang Tinggi in late
2005 returned ore-grade mineralised
intersections that included TTDD001:
25m @ 0.68g/t Au from 22m plus 25m
@ 1.4g/t Au from 59m as well as
TTDD002: 25m @ 4.58g/t Au from
31m. Gold mineralisation, accompanied
by anomalous copper values, was found
to be hosted in a fractured, potassic -
altered microgranite intrusive unit.
This initial drill testing at Tambang
Tinggi was based on very limited prior
exploration of the area and as such, the
Company considered it prudent to
complete a broader reconnaissance
mapping and soil sampling programme
prior to commencing a second round of
drilling.
Page 4 www.oropa.com.au
Figure 2: Tambang Tinggi Regional Geology, Alteration and Rock Sample Gold Assays
Mapping during the quarter focussed on
defining the extent of the microgranite
intrusive unit and exploring the regional
geological setting. This work involved
the establishment of a local grid control,
geological mapping, rock chip sampling
and the commencement of regional gridcontrolled
soil sampling.
Mapping shows that the microgranite
intrusive body is roughly circular, with a
diameter of approximately 500m. The
unit is generally highly weathered at
surface and therefore outcrops
infrequently. Rock chip sampling of
exposed portions of this intrusive unit
returned a highest gold value of 8.37g/t
Au, with several samples returning
assays greater than 1g/t Au (Table 1).
The Tambang Tinggi microgranite has
intruded a larger porphyritic diorite
body, which displays a strongly
developed northeast trending corridor of
potassic alteration extending over 1.5km
to the north east from the discovery drill
holes (Figure 2).
Numerous small-scale artisanal
excavations, some dating back to early
Dutch explorers in the 1800’s, were
discovered during the current mapping
programme within this alteration
corridor. Excavations appear to have
targeted quartz veins of variable
thicknesses up to 1.5m wide.
Rock chip sampling of the exposed
quartz veins discovered throughout the
alteration corridor returned better values
of 20.1g/t Au, 17.95g/t Au, 17g/t Au,
16.3g/t Au, 14.87g/t Au, 12.05g/t Au,
8.4g/t Au (Table 1).
Page 5 www.oropa.com.au
Table 1: Tambang Tinggi Rock Sample Location and Assays
Notes
1. Au analysis determined by 50gm fire assay
2. Ag, Cu, Pb and Zn analysis determined by 50gm AAS
From this initial work, it is clear that the
target area for gold exploration at
Tambang Tinggi extends beyond the
boundary of the microgranite intrusive
unit. Exploration activities currently in
progress at Tambang Tinggi include the
continuation of mapping and soil
sampling of the potassic alteration
corridor.
Subsequent to the completion of this
work, Oropa plans to undertake a 2nd
phase of drilling, which will follow up
the earlier drilling success at Tambang
Tinggi, plus test targets identified within
the alteration corridor.
Tambang Ubi
Gridding and mapping have also
continued at Tambang Ubi. Initial access
issues with local landowners and
artisanal miners were successfully
negotiated during the quarter allowing
field work to progress more rapidly.
The Company intends to complete
mapping and sampling of the mine area,
including the surveying of accessible
underground workings, with a view
towards drill testing targets this coming
quarter.
Northern Block
Sambung – Sihayo 1
Drilling has now commenced at the
Sihayo 1 and Sambung prospects,
located in the northern block of the
CoW. Drilling is targeting areas
identified by regional soil geochemistry,
geophysics, geological interpretation and
Sample
UTM
Easting
UTM
Northing
Sample
Type
Au
ppm
Ag
ppm
Cu
ppm
Pb
ppm
Zn
ppm Description
948555 592900 68115 Outcrop 20.1 93 2050 708 632 Gossanous diorite
948588 594095 67440 Outcrop 17.95 6 1320 69 97 Pyritic veinlet in Andesite
948551 592539 67923 Channel 17 3 308 105 272 Quartz veinlets in porphyritic diorite
948549 592305 67806 Channel 16.3 71.8 2720 38600 4070 Quartz vein in porphyritic diorite
948538 592623 67946 Channel
14.86
6 7.1 314 201 660 Silica altered diorite
948552 593500 67854 Outcrop 12.05 14 439 490 781 Silica - pyrite altered diorite
948547 592323 67818 Channel 8.4 15.6 497 1270 584 Haematitic diorite
947991 592130 67660 Outcrop 8.37 3 626 130 9500
Magnetite, chlorite, pyrite altered
microgranite
948553 593150 67996 Float 6.47 3 249 190 94 Gossanous diorite
947989 592054 67600 Outcrop 3.75 19 1260 55 81 Oxidised, silica altered microgranite
948517 592757 67749 Channel 3.04 3.6 319 28 171 Chlorite - silica altered diorite
948546 592342 67810 Channel 2.63 11.1 532 271 985 Chlorite - silica altered diorite
948541 592765 67736 Channel 1.97 1.5 277 28 179 Chlorite - silica altered diorite
947990 592054 67600 Hill Float 1.07 5 1800 20 303 Pyrite - bornite altered microgranite
947987 592650 67850 Channel 1.01 1 159 55 116 Quartz veinlet in microgranite
948581 593602 67056 Float 0.57 29 152000 8 30 Malachite stained andesite
Page 6 www.oropa.com.au
high-grade gold values obtained in
drilling and trenching.
Earlier exploration efforts at Sambung
identified high grade gold values that
included trenching results of 24m @
4.77g/t Au, 48m @ 7.34g/t Au and 3m
@ 55.5g/t Au plus best drilling results of
13.8m @ 2.59g/t Au from surface
(SAMDD004), 5.2m @ 3.79g/t Au from
surface (SAMDD005) and 0.2m @
443g/t Au from 22.55m.
The style of gold mineralisation at the
Sambung and Sihayo 1 prospects
appears to be very similar to that
observed at the 610,000 Oz Au (Inferred
Resource) Sihayo 1 North deposit,
located approximately 2.5km towards
grid west (Figure 3). Gold mineralisation
within the Sihayo 1 North – Sambung
corridor primarily occurs as a siliceous
jasperoid unit, typically developed as
sub-horizontal lenses at the contact
between Tertiary sediments and an older
Permian sequence. This mineralisation
sits within and is broadly defined by a
hydrothermal alteration zone and
attendant gold-in-soil geochemical
anomaly over 5km long.
The current drilling programme is
assessing two main target areas within
the Sihayo 1 – Sambung area.
Figure 3: Sihayo – Sambung Prospect Corridor
Page 7 www.oropa.com.au
Target Area 1: Sihayo 1 Prospect
Current geological modelling and
interpretation suggests that subhorizontal
jasperoid mineralisation
developed on the Tertiary contact may
extend approximately 2.5km laterally
from the Sihayo 1 North deposit to the
Sihayo 1 and Sambung prospects (Figure
4).
Drilling at Sihayo 1 will test for the
presence of jasperoid mineralisation on
the Tertiary contact and will also explore
for underlying primary structures that
may have acted as conduits for gold
mineralising hydrothermal fluids.
Drilling has recently commenced and is
scheduled to continue throughout this
quarter.
Figure 4: Sihayo 1 Drill Targets
Target Area 2: Sambung Prospect
Gold mineralisation at Sambung was
detected in soil geochemistry, rock chip
sampling, trenching and drilling within a
1.2km long zone of jasperoid material
(Figure 5).
Mapping of the area suggests that the
majority of this jasperoid occurs as a fan
of colluvial rubble and boulders, eroded
from the mineralised Tertiary contact
position. The flat-lying nature of the
colluvial surface mineralisation (up to
14m thick in some areas in drilling to
date) makes this an attractive drill target
due to a minimal strip ratio in a mining
scenario (Figures 5 and 6).
The colluvial jasperoid material is
thought to originate from sub horizontal
mineralisation developed on the noweroded
Tertiary contact. Geological
mapping and geophysical interpretation
suggests the presence of a primary
mineralising structure running close to
or beneath the colluvial jasperoid fan
that may have acted as a conduit for
mineralising fluids. This target will be
tested during the coming quarter (Figure
6). Gold anomalism remains open
towards grid east, following the
interpreted trend of the primary
mineralised structure.
Page 8 www.oropa.com.au
Figure 5: Sambung Trenching and Drill hole Location Plan
To date, 5 holes for 469m of drilling
were completed at Sambung this quarter.
These holes were designed to test IP
geophysical anomalies that suggested
possible conduits for gold mineralising
fluids above the colluvial jasperoid fan.
Best results from this drilling included
[email protected]/t Au from 6m in
SAMDD006, [email protected]/t Au from 51m
in SAMDD007 and [email protected]/t Au
from 10m in SAMDD010 (Table 2 and
Figure 5).
Page 9 www.oropa.com.au
Table 2: Sambung Drill Hole Location and Intersection
Local Coordinate Mineralisation
Hole Northing Easting Dip
Magnetic
Azimuth Depth From To M Grade Au ppm
SAMDD006 9865 56879 -50 220 100.7 6 8 2 2.55
SAMDD007 9806 56680 -65 40 94.6 51 56 5 0.542
SAMDD008 9806 56680 -80 220 86 No significant assays
SAMDD009 9772 56594 -50 40 114.1 No significant assays
SAMDD010 9640 56504 -50 40 73.6 10 16 6 1.61
Notes:
3. All assays were determined by 50gm fire assay
4. A 0.5ppm Au lower cut was used
5. A maximum of 2m of consecutive internal waste (material less than 0.5ppm Au) per reported intersection
6. All interval grades were calculated as a weighted average
7. All intervals reported as down hole lengths
Figure 6: Sambung Drill Targets
Drilling will now move to focus on the
main jasperoid colluvial area and the
underlying primary jasperoid targets.
2.2 India
Block D-7 Diamond Project, Chhattisgarh
(18%)
Although Oropa’s long running court case
against the Chhattisgarh state government
involving the suspension of the Block D-7
Prospecting Licence (“P/L”) by the state in
mid-2001 received a boost at a court
hearing in mid-January, the case is yet to
be dismissed by in the Chhattisgarh high
court.. The P/L holder, B.Vijaykumar
Chhattisgarh Exploration Pvt Ltd
(“BVCE”), whose minority shareholder
(11%) is the Chhattisgarh state government
and both BVCE’s directors and the state
have pushed for this case to be heard since
mid-January. All parties concur that it is in
BVCE’s and the state’s best interests to
resume field work on the block as soon as
possible, although owing to the ongoing
delays in the high court, field work will not
commence until after the monsoon season
Page 10 www.oropa.com.au
(October). The parties are arguing that the
state would benefit from any mineral
production from the block via its equity in
the project, plus receive a royalty stream.
Additionally, field work and any
subsequent development programmes
undertaken by BVCE will generate a
considerable amount of employment in the
local villages and in Raipur. Assuming that
the case will be dismissed prior to the next
field season, Oropa and BVCE will
undertake preliminary work and apply for
the requisite permits from both the central
and state governments to be in a position to
commence work as soon as conditions
permit. These programmes will include
exploration and development, as well as a
regional airborne geophysical survey.
2.3 Australia
Lake Deborah Gold Project (5% Free
Carried)
The Golden Valley tenements comprise a
portion of 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. In this
particular segment of the joint venture,
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 previously reported Polaris had
identified two gold targets suitable for
practical drill testing by the Polaris-
Geoinformatics prospectivity studies and
were scheduled for immediate follow up
drilling. However, Polaris subsequently
learned that the whole of Lake Deborah is
entered on the Interim Register in the
Department of Indigenous Affairs as an
Aboriginal heritage “mythological” site.
The consent of the parties who recorded
the site, and the approval of the Minister
for Indigenous Affairs are required before
any exploration can proceed. Negotiations
are ongoing.
PHILIP C CHRISTIE
Director
28 April 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.
30/9/2001 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 31 MARCH 2006
Consolidated statement of cash flows
Cash flows related to operating activities
Current quarter
$A
Year to date
(9 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
(463,958)
-
-
(132,692)
(1,225,479)
-
-
(705,472)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature
received
5,862
22,941
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
(590,788) (1,908,010)
Cash flows related to investing activities
1.8 Payment for purchases of: (a)prospects
(b)equity investments
(c) other fixed assets
-
-
(348)
-
-
(20,847)
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
(348)
(20,847)
1.13 Total operating and investing cash flows
(carried forward)
(591,136)
(1,928,857)
Appendix 5B
Mining exploration entity quarterly report
+ See chapter 19 for defined terms.
30/9/2001 Appendix 5B Page 2
1.13 Total operating and investing cash flows
(brought forward)
(591,136) (1,928,857)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 1,763,429 3,208,046
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 (19,763) (100,171)
Net financing cash flows 1,743,666 3,107,875
Net increase (decrease) in cash held
1,152,530
1,179,018
1.20 Cash at beginning of quarter/year to date 531,570 492,210
1.21 Exchange rate adjustments to item 1.20 4,517 17,389
1.22 Cash at end of quarter 1,668,617 1,668,617
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
81,155
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.
30/9/2001 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 1,652,617 495,570
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) 1,688,617 531,570
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.
30/9/2001 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
79,711,615 79,711,615
7.4 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buybacks
11,484,918
11,484,918
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
5,742,468
13,280,776
5,742,468
Exercise price
$0.50
$0.20
Expiry date
31/12/2007
31/12/2006
7.8 Issued during
quarter
5,742,468
5,742,468
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.
30/9/2001 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.
Sign here: ............................................................ Date: ..28 April 2006......................
(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.
== == == == ==