LONDON (Alliance News) - West African Minerals Corp Monday said its loss widened in its last financial year due to exploration impairments, and it said it is reviewing its work programme plans as it decides which of its two projects to fast track.
Its pretax loss widened to GBP8.4 million in the year ended March 31, from a GBP3.1 million loss in the 2013 financial year, as it booked a GBP2 million impairment of deferred mine exploration costs and a GBP3.1 million impairment cost of exploration permits. It doesn't currently earn any revenue.
The company has two projects in Cameroon that it is focusing on. However, its current funding levels - it had a cash balance of GBP7.1 million at the end of March - will only allow it to pursue its plans for the development of either the Binga or Sanaga site.
It said the Sanaga project has the potential to rapidly bring the company into production using existing infrastructure.
"A new set of targets at Sanaga... in addition to the previously reported Binga resource, presents West African Minerals with two potential start-up opportunities in coastal Cameroon. These projects are ideally suited to develop rapidly into cash flow generating assets with anticipated low operational and capital costs," said President Brad Mills.
The company is due to decide which of the two leases will be infill drilled to a 60-100 metre low stripping ratio mineral resource estimate supported by a preliminary economic assessment in the first-quarter of 2015, it said.
An initial inferred mineral resource estimate was completed at the Binga license in January, reporting 30.5 million tonnes at 29.7% iron.
"Our current expectation is that Sanaga may have a lower overall stripping ratio and more immediate access to rail and port facilities. If this deposit has equal or better grades and metallurgy to Binga, then we will modify the 2014 work programme in the second half of the year to complete resource drilling and a preliminary economic assesment on this project in preference to Binga," said Mills.
West African Minerals shares were down 4.1% at 4.80 pence per share Monday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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