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LONDON (Alliance News) - Keras Resources PLC on Monday said it expects to see maiden cash flows in 2016, with the company looking to begin producing gold in the second quarter.
The Australian gold development company said its pretax loss widened to GBP5.7 million in the year ended September 30, 2015 from GBP1.9 million the previous year, due to GBP4.5 million in charges after Keras decided to impair the full value of all its African iron assets and the Leinster manganese project in the Northern Cape and North West Provinces of South Africa. No impairment charges were taken in the prior financial year.
Keras did not generate any revenue in either financial year. Administrative and exploration expenses were trimmed to GBP1.2 million from GBP1.5 million, and net finance costs came down to GBP78,000 from GBP426,000. The company ended the financial year with GBP64,000 in cash, down from GBP107,000 at the start.
Keras said it expects gold production to begin in the second quarter of 2016, with maiden cash flows to follow during the year.
The company acquired near-term gold production company Chaffers Mining Ltd in Australia in November. The newly acquired company has a five-year tribute agreement with Paddington Goldfields, a subsidiary of Norton Goldfields, an Australian gold miner. The deal covers the mining of gold deposits on Norton-owned leases in Kalgoorlie, Western Australia.
Keras raised GBP835,000 through an equity fundraising in February 2015, and followed that up one year later by issuing an unsecured loan note "to include the limited working capital required" to begin producing gold. The loan note raised GBP564,000.
"2016 will be characterised by maiden cash flows, and we are delighted with the progress made during the period, which set the foundations for what we are confident will be a successful year ahead," said Keras Resources Managing Director Dave Rees.
"Gold production is set to commence shortly which will be a very significant milestone in our genesis, particularly considering that this will be achieved with limited capital and minimal dilution. This will make us the next, and possibly the only Australian gold producer on AIM," Rees added.
Chairman Brian Moritz said that starting gold production will allow the company to "look at adding further gold production in Australia and continue evaluating prospective opportunities in the natural resource market".
The stock was up 3.0% to 0.85 pence on Monday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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