21st Nov 2016 12:56
LONDON (Alliance News) - Uranium Resources PLC on Monday said its pretax loss widened significantly in its financial year to the end of June, after it booked an impairment on its exploration and evaluation assets.
Uranium reported a pretax loss of USD15.5 million for the year ended June 30, compared to the USD393,000 loss posted the prior year, despite the company generating no revenue either year. The widened loss, instead, was a result of a USD14.9 million impairment relating to its uranium assets in Tanzania.
Uranium said during the year, its Mtonya project in Tanzania remained on care and maintenance, though the group said it continued to review the project's exploration and development strategy.
"The company's board believes that Mtonya has the potential to become a world-class uranium deposit and that the company will benefit from increased global demand for uranium in the future as any profound solution to climate change is not possible without a prominent role for nuclear power generation," Uranium said in a statement.
Uranium noted that negative conditions continues to persist in the uranium market over the year, and adversely affected its ability to fund further exploration and development at the Mtonya site. The company said it was reviewing a number of strategic alternatives including, but not limited to, joint ventures, strategic partnerships and mergers which could enhance shareholder value.
The group said its major shareholder Estes Ltd, who in September extended the terms of its three loan facilities and increased the principal amount of one, has indicated it intends to invest alongside a suitable strategic investor.
"Despite the challenging conditions the company is currently facing, management believe the uranium market has the potential to make a sustained recovery," Managing Director Alex Gostevskikh said.
"The recent announcement by Mantra Tanzania Ltd, a subsidiary of Uranium One Holdings, regarding a new mining programme at the Mkuju River Project, has given the board grounds for some cautious optimism as we look ahead to 2017," Gostevskikh said.
Uranium shares were flat at 0.31 pence on Monday.
By Hannah Boland; [email protected]; @Hannaheboland
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