1st Oct 2014 09:33
LONDON (Alliance News) - Ferrum Crescent Ltd Wednesday reported a wider loss for its last financial year due to lower revenue and financial asset and liability revaluations, as it continues to seek funding for its Moonlight project and to pay its debts.
The South Africa iron ore developer reported a pretax loss of USD2.6 million for the year ended June 30, compared with the USD1.9 million loss a year earlier, as revenue, which comes from interest received, fell to USD35,844, from USD86,285, and it booked a USD304,600 loss resulting from a re-measurement of its assets and liabilities, compared with a USD608,414 gain in fiscal 2013.
The company's key project is the Moonlight iron ore deposit in the Limpopo province. It is still developing the paroject, with future work focusing on optimising the pelletising technology process and undertaking activity such as temperature profiling and treatment times.
"During 2014 the board of Ferrum decided it was the correct time to progress with work on the Moonlight project's bankable feasibility study. With the potential to produce a premium iron ore product we could now couple Moonlight's development with the regional infrastructure programme being pursued in Northern South Africa by the Government of South Africa," Chairman Ed Nealon said in the earnings statement.
"Several pelletiser sites and rail and port combinations have been considered, and the company has continued to seek confirmation from infrastructure providers (including rail, port and power suppliers) of allocation of capacity for the company," the company said.
A feasibility study for Moonlight is due to be completed within the next 18 months, costing approximately between AUD10 million and AUD13 million. Construction is expected to take between 30 and 36 months.
It expects its "high value" Moonlight project with nearby infrastructure to allow the company to pursue numerous avenues for financing requirements, it said in a statement.
The company reported a cash balance of AUD548,265 at July 1, with AUD515,999 of borrowings.
Ferrum had agreed a deal with Oman-based Anvwar Asian Investment whereby Anvwar would buy a 35% interest in the Ferrum entity that holds the Moonlight Iron Ore project. Ferrum was supposed to get USD1 million in two tranches, and while it got the first USD500,000, the second tranche has not yet been paid. Ferrum has told Anvwar it is in default.
"While (Anvwar's) failure to meet their payment schedule was disappointing, having a high value iron-ore project, near infrastructure has allowed us to pursue many other avenues for financing," Nealon said.
Ferrum shares were down 14.1% to 0.730 pence per share Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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