(Alliance News) - SolGold PLC said on Friday it needs to raise further cash to continue with the development of its South American projects.
Shares were 2.9% lower on Friday morning in London at a price of 19.22 pence each.
SolGold's flagship project is the Alpala copper-gold deposit on Ecuador's Cascabel project. It also owns a number of other projects, including Rio Amarillo, where SolGold on Thursday said it may have found a "sleeping giant".
In the six months to December, Brisbane-based SolGold posted a pretax loss of USD4.2 million, significantly narrowed from the USD27.6 million a year before. A year before, it booked USD24 million of share based payments.
At the end of December, SolGold had cash and cash equivalents of USD23.1 million, well below the USD83.2 million a year before.
It achieved no revenue, as none of SolGold's projects are yet in production.
SolGold has curtailed drilling at Alpala since September due to drought in the area and as a "cash management" measure.
"The group is required to raise further funds to bring projects into development and production and currently has insufficient working capital for the foreseeable future," said Executive Director Nick Mather.
"The group is exploring a number of options to raise funds for the next stage of development and the directors are confident that they will be successful in securing sufficient funds to meet liquidity requirements."
Last November, mining giant BHP Group PLC spent GBP17.1 million buying a further 77 million shares in SolGold, taking its stake to 14.7%. As well as BHP, SolGold also has as a major shareholder in Australia's Newcrest Mining Ltd.
By George Collard; georgecollard@alliancenews.com
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SolGold (SOLG)