5th Jun 2015 07:30
LONDON (Alliance News) - Sovereign Mines of Africa PLC shares tumbled in early trade on Friday after the Africa-focused mining sector investor said its future looks bleak following a tough 2014, when it struggled to find a strategic partner for its Mandiana gold project in Guinea.
Sovereign Mines said investors appear to have little appetite for supporting exploration projects at present, which it attributed to the weak gold price. It said its search for sources of finance to continue its drilling programme a Mandiana was unsuccessful over the course of 2014, and the situation was made worse by the outbreak of the Ebola virus in Guinea, which curtailed exploration activity across the country and made finding a partner for its project very difficult.
Though it continues to back the prospects of the Mandiana project and remains hopeful that it will be able to secure a partner, the company warned that if it fails to secure further financing or find a suitable strategic partner for the project, it may not have enough money on its books to retain its exploration assets and continue operating.
The company, which does not produce any revenue, said its pretax loss for the year was GBP3.9 million, compared to a GBP923,075 loss a year earlier, due to an impairment charge booked on its assets.
The news hit Sovereign Mines shares hard in early trade, down 69% to 0.15 pence to be comfortably the worst performer in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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