Shumba Coal Limited, the coal exploration laity, said it endured a challenging year and tough environment under which junior exploration and mining companies operate under.
The Botswana Stock Exchange listed company revealed in a statement accompanying its financial results for the year ended 30 June, 2014 that during the period there was a historical bottom of the resources investment market.
“Fortunately, our clear investment plans and continued delivery and execution with prudent, cautious and well researched deployment of the company’s available funds into the development of our flagship project, Sechaba, has underwritten investor confidence in Shumba,” the company Chairman Alan Clegg said.
“This confidence has translated into Shumba having additional capability to execute bids for further selected complimentary resource asset acquisition at costs that will, if successful, automatically add significantly to the company’s and group NAV (Net Asset Value)”.
In total, the group raised US$3.1 million during the year from financing activities while the total expenditure on exploration and evaluation during the year stood at US$ 4, 196 with the group net assets valued at US$ 4, 06, 735 by the end of the year.
The company also bemoaned the challenging Junior Mining & Exploration Company environment. It said for small companies with limited cash resources, it is high risk with rewards in stock prices being largely dependent on market sentiment and commodity prices outlook.
“This downward spiral of the sector had fortunately now abated and given the view of many that it has been overdone, now opens the door for potential rebound in the market and in particular for those companies like Shumba that have shown the resilience, prudence and diligence to continue to advance despite the past difficult environment”.
“This is a long term business with a clearly defined fundamental value chain which, if followed diligently with focus and prudent expense management for project value creation, can still provide protection of investment and create the opportunity for rapid growth and we have made all efforts to ensure that Shumba is so positioned”.
Shumba Coal Limited or the company was incorporated on 28 August 2012 in Mauritius under the Mauritius Companies Act 2001 as a company with liability limited by shares. The company has been listed on the Botswana Stock Exchange on 8, April 2013 and on the Development & Enterprise Market in Mauritius on April 2014.
The company and its subsidiaries are collectively referred to as the group and the principality activity of the group is the acquisition and development of prospective coal prospective licences in Botswana.
According to Shumba results, the group made a loss of US$ 856, 528 before tax, which was worse than US$ 443, 191 losses reported on the prior year. The company on the other hand made a loss of US$ 347, 971 before taxation from US$ 292, 710 losses in the same period in 2013.
Shumba’s flagship project is Sechaba Thermal Coal Project, which has 1.1 billion tone JORC compliant defined coal resources.
