23rd May 2016 09:18
LONDON (Alliance News) - Shares in Sovereign Mines of Africa PLC fell on Monday, after it said it was still in talks to find a strategic partner for its Mandiana gold project, and due to potential uncertainty had impaired the value of its exploration assets in full in 2015.
Shares in Sovereign Mines were down 17% at 0.270 pence on Monday morning.
The gold mining exploration company posted a pretax loss of GBP1.4 million for the year ended December 31, narrowed from GBP3.9 million, after it incurred the GBP1.3 million impairment. A year earlier, it had been hit with a GBP3.7 million impairment. Sovereign Mines generated no revenue in either 2015 or 2014.
Sovereign Mines said it had been seeking a strategic partner to fund the necessary and contingent expenditure to advance the Mandiana gold project to a definitive feasibility study throughout the year and had been in discussions, but nothing had come to fruition.
"The board is still continuing discussions with potential partners but to date no agreement has been concluded," Sovereign Mines said.
The company also noted the recent fundraising of around GBP500,000, after Giles Clarke and Rupert Fraser joined Sovereign Mines in December, as chairman and non-executive director respectively. After joining, the pair participated in a fundraising through which it issued 500.0 million shares at 0.10 pence per share.
Clarke bought GBP100,000 worth of shares, while Fraser bought GBP125,000.
"As a result of the recent fundraising, the company had cash resources of approximately GBP477,000 at April 30, which will provide sufficient finance to cover the company's ongoing expenditure for the foreseeable future," said Clarke.
"We are currently conducting a strategic review on the company's assets and activities with a view to enhancing shareholder value and will outline our vision and strategy for the business when a suitable opportunity arises. As we stated on December 30 our plans for the business may well involve the pursuit of an acquisition which would trigger a reverse takeover under the AIM Rules," Clarke added.
By Hannah Boland; [email protected]; @Hannaheboland
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