18th Jun 2014 11:19
LONDON (Alliance News) - Connemara Mining Co PLC Wednesday said its losses widened in 2013, but said that some gold drilling will start later this year and that it has considered expanding beyond Ireland.
In a statement, the the Irish zinc and gold explorer also noted interest from "unconnected parties" to invest in the company to "redirect strategy into new resource areas".
Connemara said it made a EUR348,199 loss in 2013, compared with EUR322,988 in 2012. Administrative expenses increased to EUR348,697 from EUR324,083.
"The lack of drilling by Teck on Stonepark [in Limerick] has been very badly received by the market. A falling share price and apparent lack of activity led to shareholder dissent which has proven costly and time consuming. This further exacerbated the fall in the share price," Chairman John Teeling said in a statement.
Connemara also admitted that a further small financing will most likely be required this year. As a result of the problems described by Teeling, the funds are likely to come mainly from family and friends due to an "inability to raise new funds".
Canadian mining company Teck Resources Ltd partnered with Connemara in both Limerick and Oldcastle. After discovering a new zinc and lead deposit in Limerick, Teck pulled back on drilling in 2013 to focus on evaluating six years of data. However, Teck has a limited budget with no drilling projected in 2014, according to Connemara.
"The experienced Connemara technical team would have chosen a different exploration programme for Stonepark in Limerick. However, as the junior partner we cannot demand that our programmes are taken into account. The current programme has no drilling but still has a very significant overhead element. In the circumstances we cannot justify putting very scarce Connemara funds into this so we have diluted our interest," Teeling said.
"There are also issues with the Teck programme in Oldcastle where a new to mining/exploration technique has been used. This technique is very expensive and made up a significant part of the Teck earn-in programme. We hope the results are positive in the long run as Connemara would have been cautious about use of new techniques early on in the work programme," Teeling added.
Teeling reminded investors that Oldcastle is not costing Connemara money because Teck is spending EUR1.35 million to earn a 75% interest, after which Connemara will have to pay its share or dilute. "We hope that Teck will drill in 2014," Teeling said.
Meanwhile, gold partner Hendrick, a private Canadian group, is covering exploration expenditure on the Wicklow/Wexford block. Hendrick must spend EUR500,000 to gain a 50% interest and a further equal amount to increase its stake to 75%. According to Connemara, Hendrick has spent about EUR350,000 to date.
"Expenditure this year could push them to a 50% interest. The exploration programme is being conducted entirely by Hendrick personnel. They expect to drill this year," Teeling said.
In addition, Connemara said its other active gold project, a licence block in Donegal still in its early stages, shows many of the same characteristics as a discovery in Tyrone by Canadian company Dalradian Resources Inc, which has reported a deposit in excess of 2.7 million ounces.
Connemara shares were Wednesday quoted at 3.21 pence, up 6.9%.
By Samuel Agini; [email protected]; @samuelagini
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