22nd Nov 2013 11:59
LONDON (Alliance News) - Botswana Diamonds PLC narrowed its pretax losses Friday and said that it expects to begin field work on its joint venture in 2014, but warned that its ambition is limited by its finances.
The company is not revenue generating. For the year ended June 30, it posted a pretax loss of GBP498,166, narrowed from GBP545,985 in the previous year.
The company expects to begin field work in January 2014 in its joint venture with Russian company Alrosa in the Orapa area of Botswana. The analysis of the region has identified twelve targets, and Botswana said that it had applied for ground covering of these targets.
However, it cautioned that progress on these applications was slow, and some of the ground was already under license so it has adapted its strategy.
Botswana has seen some difficulty with its ventures during the year. It drilled 4 holes in a wholly owned exploration licence to the west of Orapa in early 2013 but found no kimberlites, igneous rocks that sometimes contain diamonds. It has since applied for two adjacent licences and plans to collect and collate data on those licences in 2014.
It evaluated an opportunity on the banks of the Save River on the Zimbabwe Mozambique border, but found the terms of the joint venture and costs of exploration on the project outweighed the benefits.
Botswana has a 35% shareholding in Bugeco, which was transferred to Botswana Diamonds at no cost as a legacy asset. Bugeco owns a 20% in a licence that has attracted the interest of mining entrepreneur Robert Friedland. Friedland wants 100% ownership of the license and is looking to buy back Bugeco's share, which Botswana says could potentially return around USD450,000.
Although the exploration company said it had great confidence for the future, it warned that its ambitions had been limited by its finances, as "the retail market for fresh equity in AIM listed explorers is virtually non-existent."
Botswana also blamed falling share prices for diluting existing shareholders when funds are raised and making funding more difficult. "Investors believe that by waiting prices will be lower," Botswana said in a statement. "Often they are right."
Shares in Botswana dropped 6.9% to 2.44 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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