LONDON (Alliance News) - Altona Energy PLC Wednesday said its pretax loss narrowed in the first half of its financial year, but it has decided to end its memorandum of understanding with Xinjiang Hetian Duwa Industry Ltd for the purchase of a Duwa coal mine in China after the ownership title couldn't be proved.
The Australian coal-focused energy company said its pretax loss narrowed to GBP710,000 for the six months ended December 31, from GBP885,000 in the same period a year earlier. The company has yet to post any revenues, so its losses are almost entirely made up of administrative expenses.
Altona said that 2014 will be a pivotal year for the company, after it took control of its flagship Arckaringa project and is in detailed talks over how it can maximise the potential of the site.
The company said that its memorandum of understanding with Xinjiang Hetian Duwa Industry Ltd, under which it was hoping to get a deal to buy a cashflow-generative Duwa coal mine in Xinjiang, China, has now been terminated.
Altona had said in October that it had completed initial technical and legal due diligence for the Duwa deal, and had identified that additional legal due diligence on the ownership status of the licences was required.
The company said that due diligence since October has encountered a series of issues and it has been unable to adequately prove valid title for the asset, so the board decided to end the deal to focus on the Arckaringa coal-to-liquids project.
Altona added that its ongoing deal with Sino-Aus Energy Group Ltd and Wintask Group Ltd for the development of the Arckaringa Project is still subject to due diligence and the company will update on developments in due course.
Altona Energy shares were down 11.9% to 1.21 early Wednesday, putting it in the top three AIM losers.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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