14th Nov 2014 08:23
LONDON (Alliance News) - Altona Energy PLC saw its shares rise on Friday after it said it has completed the signing of a joint venture agreement for the Arckaringa project in Australia with Sino-Aus Energy Group Ltd and Wintask Group Ltd as it reported a wider pretax loss for the financial year.
Altona shares were up 34.8% to 1.35 pence per share on Friday morning, the second best performer in the AIM All-Share.
For the year ended June 30, Altona's pretax loss widened to GBP2.4 million compared to GBP1.4 million a year earlier. The wider loss is mainly attributable to increased administrative costs, which increased to GBP2.4 million from GBP1.5 million.
"The group has been vigorous in cutting unnecessary costs out of the business for the past six months, the full effect of which is not recognised in these financial results. However we are confident that future financial results will evidence that the company is committed to making shareholder's funds stretch as far as possible," it said in a statement.
At the end of the financial year, the company reported a cash balance of GBP1.9 million, not including the proposed raising of cash via a placing in relation to the newly signed joint venture.
The company has signed a joint venture agreement with Sino-Aus and Wintask for the Arckaringa project which is awaiting final approval. A joint venture vehicle has been made for the project named Arckaringa Coal Chemical Joint Venture Co Pty Ltd.
Under the agreement, Sino-Aus and Wintask will make staged payments to invest in the project totalling AUD33 million and provide Altona with GBP2 million of working capital via the placing of shares.
Wintask will subscribe to 20 million shares whilst Sin-Aus will subscribe to 180 million, both in two equal tranches. The shares will be set at a price of 0.1 pence per share, raising an GBP2 million in total.
Following the placing, Sino-Aus will hold a 26.9% stake in Altona and Wintask will hold a 10.9% stake.
Under the agreement, all the companies will share operational ownership and focus on securing the bankable feasibility study for the project within the next two years. Once approved, Altona and Sino-Aus will hold a 45% interest each in the project, with Wintask holding the remaining 10%.
"With the signing of the new joint venture agreement, the Company enters this historic phase of its development with confidence. Although there are many issues still to negotiate, the board offers shareholders its assurance that its focus will be on working closely with its partners to complete the test drilling programme and submit the BFS within the two year timeframe agreed," said Executive Chairman Michael Zheng.
By Joshua Warner; [email protected]; @JoshAlliance
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