17th Jun 2016 07:39
LONDON (Alliance News) - Kodal Minerals PLC Friday said it plans to conduct work programmes on its newly-acquired gold assets in West Africa whilst keeping an eye out for more opportunities to develop assets in partnership with other companies as it reported a narrower loss for the last financial year.
The mineral exploration and development company operating in West Africa, which does not currently generate any revenue, said its pretax loss in the financial year that ended in March amounted to GBP465,622 compared to the GBP4.0 million loss booked a year earlier.
The major driver was a lower level of impairments totalling only GBP50,426 compared to GBP3.4 million last year, but administrative costs also declined to GBP374,651 from GBP459,435 and share-based payments also fell to GBP40,556 from GBP88,555.
Importantly, the company only had a cash balance of GBP135,000 at the end of the year but has since raised a further GBP680,000 by issuing new shares back in May to push its balance up to GBP712,000 at the end of that month.
However, Kodal said Friday that "further fundraising will be required" at an "appropriate time" in order to undertake additional phases of the exploration work.
"However, the forecasts demonstrate that by reducing certain corporate and operational overheads, including as appropriate relinquishing one of the concessions if not considered sufficiently prospective, the group has sufficient cash resources available to allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements without the need for a further fund raising," the company said.
The most significant development for Kodal was not completed until after the financial year ended, when Kodal acquired a suite of gold projects in West Africa from Taruga Gold Ltd in May 2016.
That led Kodal to securing eight exploration concessions and two further applications for concessions within the Ivory Coast and Mali, and work programmes are in place for both countries.
Notably, the concessions already have existing joint venture and farm-in agreements with major global gold companies Newcrest Mining Ltd and Resolute Mining Ltd.
In the current financial year, Kodal plans to focus its work in West Africa on the Nangalasso Project in Mali by conducting a programme of trenching to follow-up previous drilling intersections and the recent artisanal workings close to the drilling.
For the Kambali project, a programme of geochemical sampling and trenching is planned.
In the Ivory Coast, Kodal will conduct a programme of geochemical sampling for the Korhogo concession to follow-up previous gold anomalous zones identified in regional work undertaken by Taruga. Subject to the results, a programme of drilling could be undertaken later in the year.
"In Africa, the group intends to continue the strategy of ground acquisition and early low cost exploration to highlight the potential value of exploration projects. The directors expect that such early exploration activities will be followed by further detailed exploration alongside joint venture partners," said Kodal.
During the financial year prior to that deal being finalised, Kodal focused on the copper-zinc deposit in western Norway referred to as the Grimeli project, where it conducted a 2,000 metre drilling programme that provided results back in August last year.
"Further geophysical testing is required to establish a valid approach for further exploration. With only a small portion of many kilometres of potential target zone tested, the Grimeli project remains a very interesting early stage exploration project," said Kodal.
The company's other Norwegian project, the phosphate and titanomagnetite Kodal project, is still being progressed through the Norwegian planning process.
"We continue to be disappointed with the pace at which the relevant Norwegian planning authorities make decisions and await further news on the scope of the environmental impact assessment work required," said Kodal.
"The current challenging market conditions for mining exploration companies are expected to continue. With the acquisition of the West African projects, the board has diversified its project risk and will continue to appraise other well valued opportunities for further acquisition and investment," the company added.
Kodal shares were up 5.9% to 0.0423 pence per share on Friday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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