QUARTERLY REPORT - Fertoz · 2019. 6. 25. · agronomic effectiveness in high calcium carbonate material like Wapiti East (Chien and hammond soil science society of America Journal

highlightsWAPITI ProjecT

Obtained approval to extract 7,500 tonne bulk sample of phosphate rock•

Company advancing to first sales of phosphate rock in 2014•

Results confirm Wapiti suitable as a direct application organic fertilizer and •place Wapiti material in top tier of agronomic phosphate rock available commercially

two certified organic farms agree to broad-acre farm trials •

secured additional tenements at Wapiti East •

FernIe ProjecT

Marten tenement added to Fernie Project portfolio •

Advanced stage exploration ground with previous underground exploration •work completed and outcropping phosphate on the surface

small drill programme and bulk sample planned for second half of •CY2014

Dry rIDge ProjecTU.s. Bureau of land Management (“BlM”) approves transfer of operating •rights to Fertoz

Cascade Earth sciences and World industrial Minerals engaged and three •year exploration program submitted to BlM

ACN145951622|T:0733960024|F:0733960024|http://www.fertoz.com|40BalgowlahStWakerley,Qld4154

Fertoz Ltd (ACN 145 951 622)

QUARTERLY REPORTT O M A R C H 2 0 1 4

ASX ReleASe 29 April 2014 FerToz LTD (ASX:FTz) ISSUeD cAPITAL (31/03/14) 45,009,595 Ordinary Shares which includes 13,177,422 escrowed Shares 10,615,384 Options* *See Appendix 5B for more detail (lodged 29/04/14) SHAreHoLDerS 408 shareholders Top 20 shareholders hold 52.2% LArgeST SHAreHoLDerS lenark Pty ltd (and related parties) – 11.8% JP Morgan Nominees Australia ltd – 7.8% UBS Nominees Pty ltd – 4.7% DIrecTorS James Chisholm – Non exec Chairman leslie Szonyi – Managing Director Adrian Byass – Non exec Director SenIor MAnAgeMenT Julien McInally – CFO and Company Secretary Jo Shearer - Chief Operating Officer Canada cASH BALAnce As at 31/03/14, Fertoz’s cash balance was approximately $2.65 million

Fertoz is an explorer and developer of phosphate resources in Canada and the United states of America, which are both net importers of phosphate rock and have two of the largest agricultural economies in the world. the Company aims to supply direct application phosphate rock with minimal processing to the lucrative organic fertiliser market in North America. the UsA is the largest organic food market in the world while Canada is the fourth largest.

Fertoz is targeting small, high-grade resources in North America that can be commercialised quickly and inexpensively, with high-grade product sold to organic farmers or third-party fertilizer plants. the Company is planning first sales to customers in 2014 from its flagship Wapiti project.

stRAtEgY

2 ltd MARCh qUARtERlY REPORt 2014

SAFeTythere were no lost time injuries or environmental incidents recorded during the March quarter.

DIrecTor BUyIngManaging director dr leslie szonyi purchased an additional 11,759 Fertoz shares via on-market trades during the March 2014 quarter. the shares were valued at $0.4344 per share with total consideration paid for the shares being $5,108.

regIonAL ProjecT conSoLIDATIonFertoz has focused its efforts by combining its five projects in British Columbia into two regional projects – the Wapiti Project near tumbler Ridge (which includes Wapiti East and Wapiti West tenements) and the Fernie Project near sparwood (which includes Marten, Barnes lake and Crows Nest tenements) both of which are proximate to infrastructure. it also has an option on one project in idaho, U.s.A., in an established phosphate mining area, again proximate to infrastructure.

cASHthe Company has cash at bank of $2.65 million as at 31 March 2014.

reLeASe oF SHAreS FroM eScroWthe Company had a total of 2,489,045 shares released from escrow during the quarter. the Company now has a total of 13,177,422 shares on voluntary and compulsory escrow.

AUSTrALIAn ProjecTSthe Company currently has two Australian projects. it has a joint venture in place at the Barrow Creek Project, Nt with Central Australian Phosphate ltd. the Company also holds a tenement in queensland called the sherrin North Project, close to other phosphate projects and phosphate bearing rocks. however, with the focus on the Americas, the Company is searching for a suitable company to either joint venture the tenement or achieve an outright sale.

LIST oF TeneMenTSA full list of the Company's current tenements and recent changes are attached in Appendix 1.

CORPORAtE

Figure 1 — North American Project Locations


in February, Fertoz received approval to extract a winter bulk sample of 7,500 tonnes from the Wapiti East project in British Columbia, Canada. Road access improvements were carried out in March but sample collection was delayed due to the fact that the unseasonably warm weather prevented an ice bridge being constructed across Red deer Creek. Bulk sample collection is due to start as soon as the snow melts in the June quarter.

Fertoz announced, during the quarter, results of the two-tonne bulk sample collected in October 2013 from the Company’s Wapiti East tenement. the laboratory results achieved a ~10% phosphate availability which makes the Wapiti East product particularly attractive to the organic fertilizer market as a direct application product. the result can be compared to other known phosphate products from areas such as North Carolina, UsA and sechura, Peru which typically demonstrate 6% to 7% available phosphate and exhibit good agronomic effectiveness on suitable soils and crops (sinclair, New Zealand Journal of Agricultural Research, 1998). Many organic phosphates have availability as low as 3%. Wapiti phosphate also contains important secondary and tertiary minerals required for good plant growth making it suitable for North American organic markets.

the tests were coordinated by Agrologist Ruth Mcdougall and two laboratories were engaged to undertake the analysis for quality control purposes. Both commercial laboratories, sgs Agrifood laboratories in guelph, Ontario and A&l Analytical laboratories inc. in Memphis, tennessee, are accredited to perform this analysis and both participate in a North America-wide program of accreditation for available phosphorus determination.

Both laboratories were provided with samples that had been ground and screened at -100 mesh (- 0.15mm) with the total phosphate content of the samples

being 23.0% P2O5. the laboratories used a Neutral Ammonium Citrate (NAC) extraction method, which is the industry standard in North America, for assessing the availability of phosphorus in phosphate fertilizer sources. the NAC extraction test was performed twice as the second extraction has historically been shown to provide a higher correlation in predicting agronomic effectiveness in high calcium carbonate material like Wapiti East (Chien and hammond soil science society of America Journal 1978, Mackay New Zealand Journal of Agricultural Research 1984). the NAC second extraction test showed good consistent results which ranged between 9.7% and 9.9% P2O5 availability.

in March Fertoz signed an agreement (“Agreement”) with two organic broad acre farms in Western Canada to trial the agronomic effectiveness of phosphate from its Wapiti Project in British Columbia, Canada. the farms are organically certified and the operators, who are professional agronomists, have agreed to assist Fertoz in increasing sales of Wapiti phosphate in the growing organic sector in North America. Under the terms of the Agreement, Fertoz will supply up to 1,000 tonnes of phosphate rock from Wapiti at the mine gate. the farmers will be responsible for freight, rock phosphate processing and the costs of the farm trials. All information, testing procedures, processing techniques and application methods will be provided to Fertoz as part of the Agreement.

due to the encouraging laboratory results the Company expanded its Wapiti East tenement holding (see Figure 2). the new tenement areas increase the Company’s Wapiti East tenement holding to 11,098 ha and the potential Wapiti East phosphate horizon by 44% from 27km to 39km. in addition, the areas secured during the quarter provide bulk phosphate storage, and camp site areas readily accessible from tumbler Ridge.

WAPiti PROJECt(100% OWNEd)

BRitish COlUMBiA, CANAdA (WAPiti EAst ANd WAPiti WEst tENEMENts)

2 tonne bulk sample collected in October 2013 (23% P2O5)

Finely ground bulk phosphate sample to 100Mesh (150 micron)


WAPiti PROJECt (CONtiNUEd)

Figure 2 — Wapiti East Tenement Locations

About WApiti project

The Wapiti Project (which includes the Wapiti East and Wapiti West tenements) totals an area of 18,070 ha and is located near Tumbler Ridge, in British Columbia, Canada. The project is easily accessible by sealed roads and forest service roads and has rail access within 80 km. The Company is focused on the Wapiti East tenements and previous work indicates a consistent and continuous at-surface phosphate-bearing horizon which has a potential strike length of up to 39km. Results of phosphate testing indicates up to 10% availability which makes the product at Wapiti East particularly attractive to the North American organic sector which is the largest organic market in the world.


FERNiE PROJECt (100% OWNEd) BRitish COlUMBiA, CANAdA (MARtEN, BARNs lAkE ANd CROWs NEst tENEMENts)

On 5 February 2014, the Company secured the Marten tenement to add to its portfolio for the Fernie Project. the Marten tenement consists of 1,215 ha and is located 20km south east of sparwood between Fertoz’s existing tenements at Crows Next and Barnes lake (see figure 3). All three tenements make up the Fernie Project and have a total area of 3,904 ha.

the Consolidated Mining and smelting Company of Canada limited (Cominco) carried out exploration in an extensive area of phosphate bearing rocks in 1926, covered by the Marten tenement. in 1929, Cominco established an underground phosphate exploration mine there employing 13 people. two shallow incline shafts were sunk and two small prospect tunnels were

driven on the outcrop of the phosphate bed and a 7ft by 8ft drift (2.1m by 2.4m) was advanced 200 ft (61m). the underground workings exposed a 2.25ft (0.7m) wide phosphate horizon with an average grade of 55% calcium triphosphate which equates to 25% P2O5 (Ref. BC Minfile Report 082g10).

the acquisition of the Marten tenement this quarter and the expansion of the Barnes lake tenement last quarter mean that the Company has secured a considerable foothold in a prospective and known phosphate location.

A small drill program and bulk sample is planned for the second half of the 2014 calendar year.

Coal train passing through Marten property


FERNiE PROJECt (CONtiNUEd)

Figure 3 — Fernie Project Tenement Locations

About Fernie project

The Fernie Project (which includes the Marten, Barnes Lake and Crows tenements) includes a total of 3,904 ha and is located near Sparwood in British Columbia Canada. The tenements are within 25km of each other and are in close proximity to the operating East Kootenay Coalfield which is serviced by the established mining communities in the region. At the door step of the project is the existing road and rail transport links to the west coast ports of Canada as well as the North American arterial rail and road networks. Previous exploration work has highlighted the presence of widespread, shallow phosphate-bearing sediments associated with the base of the Jurassic-aged Fernie Formation.


dRY RidgE PROJECt (OPtiON tO ACqUiRE 100% OWNERshiP) idAhO, UsA

On 19 February 2014, the Us Federal Bureau of land Management (“BlM”) approved the transfer of the operating rights for the Company’s dry Ridge Phosphate Project to Fertoz.in addition, the Company appointed Cascade Earth sciences, World industrial Minerals and other consultants to commence the expected twelve month approval process for its exploration programme which is planned to commence in the second half of 2015. the process for approving exploration programs in idaho requires significant third party input and reports prior to drilling commencing. Field work to obtain data necessary for this approval is scheduled to begin in the second half of 2014 and will include geologic mapping and identification of all disturbance areas (roads, drill pads, trenches, etc).

the Company started the approvals process by submitting to the BlM a comprehensive three year exploration programme in April 2014. By submitting the exploration programme prior to 30 May 2014 the Company has met one of the conditions of the dry Ridge Option Agreement.

the purpose of the dry Ridge exploration programme is to provide an understanding of the phosphate formation rock types, orientation, geometry, quality, determine a JORC resource and collect environmental data in advance of mining.

Dry Ridge, Idaho, USA


Figure4 — Dry Ridge Project tenement location map

dRY RidgE PROJECt (CONtiNUEd)

About Dry riDge

The Dry Ridge Phosphate Project is located in the established phosphate mining region of South Eastern Idaho, USA (see Figure 4). This region is within an area designated by the United States Geosciences Survey as a “Known Phosphate Leasing Area”, or (“KPLA”). The KPLA contains four operating phosphate mines and a number of smaller advanced exploration and development projects, some of which are directly along strike and hosted by the same sedimentary horizon which bears phosphate at the Dry Ridge Phosphate Project. The Dry Ridge Phosphate Project has the potential to be developed and brought into production with relatively low capital investment. It is close to existing infrastructure, and three phosphate processing plants, two of which are within 35km of the Project.


Project nameTenement number ownership

Approx. Area (ha) expiry Date registered Holder

cAnADA

Wapiti east

WK-1 851942 100% 450.8 21/04/2020 FertozInternational

WK-2 851948 100% 451 21/04/2020 FertozInternational


WK-4 851958 100% 451 21/04/2020 FertozInternational









WK-One 982744 100% 18.8 21/04/2020 FertozInternational

WapitiNE 1015556 100% 375.5 21/04/2020 FertozInternational

WapitiTwo 1015557 100% 168.9 21/04/2020 FertozInternational

WapitiSouth 1015558 100% 376.4 21/04/2020 FertozInternational

WAPS2 1018104 100% 451.8 21/04/2020 FertozInternational





RedDeer1 1023921 100% 150.2 20/11/2014 FertozInternational



Munok1 1015626 100% 169.6 1/06/2017 FertozInternational

Belcourt1 1015627 100% 113.3 1/01/2019 FertozInternational

Munok2 1024783 100% 603.1 2/01/2015 FertozInternational




BelcourtLink 1027037 100% 282.6 30/03/2015 FertozInternational

WAP11 1027038 100% 168.9 30/03/2015 FertozInternational

SubTotal 11098.6

APPENdix 1 - list OF tENEMENts


APPENdix 1 - list OF tENEMENts (CONtiNUEd)



cAnADA (continued)

Wapiti West

Tunnel1 942096 100% 446.1 27/03/2016 FertozInternational

Tunnel2 942097 100% 446.0 27/03/2016 FertozInternational

Sukunka1 851714 100% 18.5 15/09/2016 FertozInternational

Sukunka2 980302 100% 444.2 15/09/2016 FertozInternational

PAL1 1025451 100% 18.5 24/01/2015 FertozInternational




SUK3 1018087 100% 444.3 27/03/2016 FertozInternational









T11 1018128 100% 316.2 28/03/2016 FertozInternational

SubTotal 6,971.6

Ferny

BarnesLake1 1011319 100% 609.0 19/07/2016 FertozInternational

BarnesLake2 1020873 100% 629.0 06/07/2014 FertozInternational

CrowsNest 1023062 100% 1,450.9 15/10/2014 FertozInternational

Marten1 1024365 100% 754.3 12/12/2014 FertozInternational

Marten2 1025533 100% 460.9 28/01/2015 FertozInternational

SubTotal 3,904.0

canada Total 21,974.2




UnITeD STATeS

Dry ridge I-07238 0%1 210.0 31/05/2016 FertozUSA

United States Total 210.0

1 Fertozhasanoptiontoacquire100%ofthetenementpriorto9December2016.

AUSTrALIA

Sherrin north EPM19448 100% 22,100.0 5/05/2018 FertozLimited

Barrow creek EL26915 100%2 74,387.0 7/4/2015 FertozLimited

Australia Total 96,487.0

2 JointventureagreementallowsCentralAustralianPhosphateLtdtoearnaninterestinthetenement.

InTereSTS In MInIng TeneMenTS reLInqUISHeD, reDUceD or LAPSeD

Tenement reference and location Nature of interest

Interest at beginning of quarter

Interest at end of quarter

WapitiWestTenementBCCanadaTenementNo1018100

Tenementdroppedasitwasnolongerrequired

100% 0%

InTereSTS In MInIng TeneMenTS AcqUIreD or IncreASeD

Tenement reference and location Nature of interest

Interest at beginning of quarter

Interest at end of quarter

WapitiEastTenementsBCCanada

TenementNo's10239211023922102392310156261015627102478310248031024806102480510270371027038

Securedadditionalground 0% 100%

MartentenementsBC,Canada

TenementNo’s10243651025533

Securedadditionalground 0% 100%

APPENdix 1 - list OF tENEMENts (CONtiNUEd)

Fertoz Ltd (ACN 145 951 622)

For FUrTHer InForMATIon conTAcT

Les Szonyi nathan ryan (Media)Managing Director Investor RelationsFertoz Limited NWR CommunicationsM +61 418 158 185 M +61 420 582 887

ForWArD-LookIng STATeMenTSThis document may contain forward-looking statements. Sentences and phrases are forward looking statements when they include any tense from present to future or similar inflection words, such as (but not limited to) "believe," "estimate," "anticipate," "plan," "predict," "may," "hope," "can," "will," "should," "expect," "intend," "is designed to," "with the intent," "potential," the negative of these words or such other variations thereon or comparable terminology, may indicate forward looking statement.

Forward looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of Fertoz. These risks, uncertainties and assumptions include (but are not limited to) commodity prices, currency fluctuations, economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or advancement, approvals and cost estimates.

Actual values, results or events may be materially different to those expressed or implied in this document. Given these uncertainties, readers are cautioned not to place reliance on forward looking statements. Any forward looking statement in this document is valid only at the date of issue of this document.

Subject to any continuing obligations under applicable law and the ASX Listing Rules, or any other Listing Rules or Financial Regulators’ rules, Fertoz, its agents, directors, officers, employees, advisors and consultants do not undertake any obligation to update or revise any information or any of the forward looking statements in this document if events, conditions or circumstances change or that unexpected occurrences happen to affect such a statement.

coMPeTenT PerSonThe technical information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Jo Shearer, a Competent Person, who is a member of the Association of Professional Engineers and Geoscientists of British Columbia, a ‘Recognised Professional Organisation’ (RPO) included in a list that is posted on the ASX website from time to time. Mr Shearer is the Chief Operating Officer Canada for Fertoz Limited. Mr Shearer has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Shearer consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Documents

QUARTERLY REPORT - Fertoz · 2019. 6. 25. · agronomic effectiveness in high calcium carbonate material like Wapiti East (Chien and hammond soil science society of America Journal