Today Market

14 Dec 2016

Chairman's Introduction

 

Cass Offshore Minerals Limited

CASS Offshore Minerals Limited, is in the process of raising capital and listing on the Australian Securities Market (ASX) to further it's plans to commercialise substantial iron sand mineralization off the coast of New Zealand. It has 2 projects, iron sand - potentially the next great source of Iron Ore - and Ilmenite. It is the parent holding of lronsands Offshore Mining Limited founded in August 2008, and Pacific Offshore Mining Limited founded in February 2010. Cass Offshore Minerals Limited has secured exclusive rights to all minerals within its exploration permits directly off the coast of New Zealand. It intends to develop offshore dredge mining operations - which are cheaper than onshore mining with no pre-stripping, blasting or crushing. Major players in the field include Rio Tinto, lluka and De Beers.

Financial Result

The directors submit the financial result of CASS Offshore Minerals Limited (CASS) for the year to 31 March 2016. The trading result for the period was a comprehensive gain in income of $5,649,298 after recognising $(8,874,326) impairment losses, reflecting the main cost saving measures introduced and currency fluctuations. Basic earnings/(loss) per share: the calculation of basic earnings per share at 31 March 2016 was based on the profit/(loss) of NZ $0.16 attributable to ordinary shareholders of $5,649,298 and a weighted average number of ordinary shares outstanding of 36,413,334.

Moving forward

As reported in our shareholder updates and other announcements made during the year CASS is very actively moving with clear signs of recovery in the metals and mining sector. Most pleasingly, we've continued to attract interest in raising the money we need to move forward with our plans to list the Company on the ASX. Over the past few months there's been a steady stream of support from shareholders and new investors keen to support our plans. Our directors and other associated interests are now actively marketing an equity sale and receiving keen interest.

Future capital

Cass raised over NZ $5 million in the last five years and completed offshore sampling, seismic studies and airborne magnetic surveys. We have created three-dimensional geological models, demonstrated value in use for products, developed processing concept studies and dredge mine production models. Starting with over 20,000 square kilometres of area to assess, we have found and defined two exploration results Waihi (Ilmenite) and Taranaki (Iron sand).

Cass is now planning to raise further capital by the issue of new ordinary shares to be followed by a book-build and a share placement at compliance listing ASX. We aim to raise a minimum NZ $2 million from investors seeking exposure to long life, low cost, strategic assets. The Company expect to raise a substantial portion of this from our existing 1,675 investors. The business has been valued in June 2014 by Geos Mining Minerals Consultants of Sydney at $50 million USO and the current equity is valued at $58.3 million NZD. The future planned share issue is at a pre money valuation, which is substantially discounted to this valuation. 

Use of future capital


Cass has US$50 million of intangible assets we want to convert into more valuable tangible assets. Once we have developed the assets to a stage we can commercially extract products from with confidence then we will borrow capital from banks to build a productive mine. This requires three stages:

  • Systematically drilling out the resources to a level of confidence that ensures continuity of product flow during the mining process. This is referred to as an indicated level of resource compliant with the Joint Ore Reserves Committee latest guidelines or a JORC resource (an Industry Standard).
  • Once a JORC resource is in place we will engineer a feasibility report and apply for an extraction (mining) license from New Zealand Petroleum and Minerals.
  • Resource Consent approval to extract.

Lastly, we will obtain project finance, build the mine and produce (jobs) sales in 2020 or beyond. 

As announced in Q2 2017, our funds position will also be aided by capital associated with listing ASX. Shareholders will enjoy the best of both worlds in terms of increasing liquidity of our shares and having access to a broader investor base. 

 

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