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LONDON (Alliance News) - Arc Minerals Ltd said Monday it swung to a profit in its most recent financial year due to its business combination with Casa Mining Ltd.
In the year to March 31, Arc recorded a GBP2.1 million pretax profit, a transformation from its GBP696,000 loss the year before. As of November, the mining company has 99.4% ownership of Casa, which contributed GBP10.5 million to Arc.
The company produced no annual revenue in either year as it is still in its exploratory mining stage.
Arc did report a GBP7.2 million impairment, which compares with a much less substantial GBP655,000 impairment in the preceding year. This resulted in a widening of Arc's operating loss to GBP8.1 million from GBP1.3 million.
Aside from these two projects, Arc has agreed to divest the balance of its portfolio including its Slovakian gold project and an exploration project in Eritrea and it was this decision to divest which resulted in a more substantial impairment.
Nick von Schirnding, who took over as executive chairman in September, said Arc is implementing a revised strategy which focuses on Casa and another African project, Zamsort Ltd. As with Casa, Arc has increased its ownership of Zamsort, which holds a copper and cobalt project in northwest Zambia.
"Having historically held two convertible loan notes in Zamsort, we now own a direct 66% interest in Zamsort, with a remaining 5% outstanding convertible loan note. There is now only one remaining minority interest in Zamsort, namely Kopara, and we have recently agreed with Kopara to jointly fund all future expenditure at Zamsort," said Schirnding.
"Delivering on our new strategy will drive value for all our stakeholders, particularly at a time of increasing demand for metals. As we executed on our new strategy it was pleasing to see the market's support for the company, resulting in our market capitalisation increasing from circa GBP3.4 million on March 31 2017 to over GBP26 million today," he added.
Shares in Arc Minerals were up 2.5% at 4.71 pence per share on Monday.
