African Battery Metals (LSE:ABM) sat at 0.4p today after reporting that it is ‘extremely well positioned’ for a strong recovery in the natural resources sector.
In its results for the year ended 31 March 2019, the organisation revealed a loss of £0.32m, an improvement on the £0.79m loss it incurred in 2018. It also reported that period-end net assets of £3m up from £2m on 30 September 2018.
In its update, African Battery’s executive chairman Paul Johnson highlighted that the results period cover little of the time the firm has spent under his and chairman Andrew Bell leadership. The pair replaced African Battery’s former management team in February as part of a restructuring and refinancing exercise. This saw the company raise £1m to support it in the clearance of creditors through a combination of discounted cash and share settlement payments.
Shortly after joining, the pair launched a strategic and operational review that has continued into the new annual results period. As part of a review of African Battery’s existing portfolio, the firm committed to continuing with the existing Kisinka copper-cobalt project in the DRC. A termite mound sampling programme covering the entire licence commenced in April, and a 7km copper anomaly was announced earlier this month.
Meanwhile, Johnson and Bell have also committed to continuing with African Battery’s Cameroon cobalt-nickel project interests in the ground near to the substantial Nkamouna deposit. A pitting and sampling programme to test how similar the firm’s land is to the Nkamouna geology is currently underway. Finally, a review of the business’s Ivory Coast opportunity is continuing.
Elsewhere, African Battery announced an option with Katoro Gold plc (LON:KAT) earlier this year to acquire up to a 35pc stake in its Haneti Nickel Project alongside the purchase of 10m ordinary shares in Katoro itself. After a period of due diligence, the company exercised this option in May.
Following this, African Battery announce an acquisition and earn-in agreement with Kalahari Key Mineral Exploration, a private company in Botswana, last month. The organisation has acquired an initial 18pc of Kalahari Key’s issued share capital. However, it also has an option in 2019 to earn-in to a 40pc direct project interest by supporting expenditure in respect of a 4-hole drilling programme. This will focus on targets derived from extensive airborne electromagnetic and ground geophysical surveys and related exploration.
Moving forward, Johnson said African Battery is continuing a review of various additional opportunities in a pipeline that is ‘bursting with potentially exciting natural resource projects’.
‘Despite the challenges in late 2018, ABM is now, in the opinion of the board, extremely well positioned for what we expect will be a strong natural resource sector recovery, particularly in respect of battery and electrification metals and storage metals,’ he added.
‘Notwithstanding the cleaning up of the outstanding creditors following the refinancing in February 2019, relaunching exploration programmes across two of our main projects, and acquiring new business interests we remain in a robust financial position.
‘The company's corporate cash costs are carefully monitored and controlled. The ompany's operational costs are controlled and with modest with low cost programmes being undertaken, generally where the potential upside from positive exploration may be dramatic.
‘The company will be continuing to provide regular updates with regard to its corporate and operational activities over the coming weeks and months. ABM will also release this month an update of the ongoing strategic and operational review, to provide an in-depth analysis of the business, its corporate strategy and how the individual operational activities will be undertaken to drive the company forward.’
Author: Daniel Flynn
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