LONDON (Alliance News) - Metminco Ltd Monday said it is focusing on purchasing a project to supply near-term cash flow, while it develops its existing sites, as it reported further losses in its recent half year.
Metminco, a exploration and mining company, reported a pretax loss of USD3.3 million in the six months ended June 30, compared to a USD33.7 million loss in the comparable period in 2013. As the company focuses on existing projects, exploration expenditure has decreased to USD168,216 in the first half of 2014 from USD28.4 million in the six months ended June 30, 2013.
In the first half of 2014, the company focused its activities on its two core projects, namely the Los Calatos copper-molybdenum project in Peru, and the Mollacas copper leach project in Chile, it said. The company is not earning any revenue from any of its mining sites at present.
The company has recently re-evaluated the prospectivity of the broader project area at the Los Calatos Project, which resulted in the definition and refinement of several exploration targets. The average mining and processing rate for the envisaged operation is 23.9 million tonnes per annum, producing 98.4 million tonnes of copper in concentrate per annum, it added.
The Peruvian government has given the Los Catalos site the designated status of a 'Project of National Interest', which enables Hampton Peru, a 100% held subsidiary of Metminco, to acquire surface title for the planned mining infrastructure by direct purchase from the Peruvian state, it said. Four drill-ready targets have been identified by the company,with their tenor of mineralisation and size potential to be assessed by surface drilling, it added.
On March 19, the company confirmed Mollacas to be a low-cost mining operation, with a low development capital requirement, producing up to 8,000 tonnes of copper cathode per annum over 7 years.
The planned feasibility study has been delayed pending the resolution of a legal dispute relating to mining access to the surface title on which the Mollacas deposit is located.
"Alternative approaches to resolving the dispute are being advanced by the company. The company remains confident that this dispute can be resolved with the subsequent resumption of work leading to the development of the project," it said.
During the first half ended June 30, the company undertook minimal work at its Vallecillo and Loica projects due to prioritisation of funding, it added.
In July, the company entered into a funding agreement with New York-based Bergen Global Opportunity Fund. The funding will "supplement the company's existing cash reserves and provide funds for short term working capital, including potential acquisition related costs," said Metminco.
"With the conclusion of the funding agreement with Bergen, we now have financial security and a guaranteed access to finance for the next 24 months. This allows us to actively work towards achieving our strategic objective of acquiring a project with a near-term cash flow, as well as advancing our existing projects," said Managing Director William Howe.
Metminco's shares were down 2.9% to 0.995 pence per share Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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