3rd Nov 2014 11:41
LONDON (Alliance News) - Forte Energy NL saw its shares rise on Monday after it confirmed it has entered into a joint venture agreement with European Uranium to earn in on two uranium projects in the Slovak Republic.
Forte shares were trading up 78% to 0.151 pence per share Monday morning.
Forte reported a wider pretax loss of AUD4.3 million for the year ended June 30, compared with a AUD3.2 million loss a year earlier. The wider loss was attributable to a AUD1.2 million impairment expense following the disposal of the Bohoduo uranium prospect in Guinea during the 2014 financial year.
The company does not currently generate any revenue, but earned AUD145,091 from subleasing an office, compared to AUD312,268 a year earlier. Forte reported a cash balance of AUD84,517 at June 30.
"Forte Energy has continued to implement its cost reduction strategies while maintaining its core exploration assets in West Africa and actively pursuing acquisition opportunities within the uranium
sector," said Managing Director Mark Reilly.
The company's administrative expenses were reduced to AUD3.1 million during the financial year, compared with AUD3.4 million in 2013. Exploration expenses also decreased to AUD51,394 from AUD68,114.
On June 16, Forte announced it had executed a binding letter of intent with European Uranium, whereby Forte can earn a 50% interest in two of European Uranium's Slovak projects for a payment of CAD4 million over a ten year period.
Forte has now paid the CAD500,000 initial consideration for the deal and has entered into the joint venture.
The CAD4 million deal consists of the initial payment of CAD500,000 to European Uranium to acquire the 50% stake in the two Slovak projects, and a further CAD350,000 minimum expenditure in the first year and a further CAD3.2 million between the second and tenth year of the project, said Forte.
As part of the acquisition, Forte will be earning in on European Uranium's mineral resource, which totals 11.7 million tonnes with 2,141 parts per million of triuranium octoxide with 57.6 million pounds of contained triuranium octoxide, a compound of uranium.
"The company looks forward to working closely with European Uranium to progress the Kuriskova and Novoveska Huta uranium projects in the Slovak Republic while maintaining its west African uranium assets and continuing to consider potential corporate opportunities in the current depressed economic climate," said Reilly.
Forte's uranium exploration in west Africa was focused on low cost exploration and identifying future targets to increase its resource base. At the end of the year, the company's uranium resources in Africa totalled 44.9 million pounds of contained triuranium octoxide.
"We believe that, with our increased asset base following the European Uranium deal, funding facilities in place and the implementation of significant cost reductions, Forte Energy is well
positioned to take advantage of any improvement in the uranium market," he added.
By Joshua Warner; [email protected]; @JoshAlliance
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