(Alliance News) - Richland Resources Ltd on Monday reported a narrowed first half loss and said it will seek a reverse takeover in the mining sector as it edges closer to becoming a cash shell following the agreement to sell a subsidiary.
In the six months to June 30, the company made a pretax loss of USD394,000, narrowed from USD778,000. Revenue fell to USD4,000 from USD51,000.
From just continuing operations however, pretax loss widened to USD217,000 from USD128,000, on no revenue.
In June, Richland said it entered into an option agreement with Canada-listed Fura Gems Inc to sell the Capricorn sapphire project located in Queensland, Australia.
In August, shareholders approved the sale which will see Fura pay an option fee of CAD25,000, roughly USD18,882, and then CAD125,000 in cash on the closure of the deal.
Once the transaction is completed, Richland will become a cash shell, leaving it with six months to complete an acquisition, or raise GBP6.0 million to become an investing company.
Non-Executive Chair Edward Nealon said: "I am most disappointed that we were unable to achieve sustainable profitability at an operational level for our Capricorn Sapphire Pty Ltd operation leading to its expected disposal at a loss, but, as the company was unable to raise funds to re-finance Capricorn Sapphire, the board had to take this difficult decision to sell Capricorn Sapphire."
"We intend, following completion of the proposed disposal, to seek to identify a suitable reverse takeover transaction in the mining sector, with significant upside potential and a clear alignment between the interests of directors, management and shareholders."
By Eric Cunha; ericcunha@alliancenews.com
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