News Column

Sovereign Mines Of Africa Pretax Loss Widens On Fair Value Losses

May 29, 2014

Tom McIvor

LONDON (Alliance News) - Sovereign Mines Of Africa PLC Thursday said its pretax loss widened in 2013 as lower administrative expenses were offset by losses to the fair value of its financial assets as it struggled to achieve support for the development of its assets in the Republic of Guinea.

The Africa-focused gold resource company, which is yet to produce any revenues, said its pretax loss widened to GBP923,075 from GBP583,684 the previous year.

The company said that despite reducing its administrative expenses to GBP351,995 from GBP477,410 it was hit by losses to the fair value of its financial assets of GBP574,006 from GBP110,000 the previous year.

Sovereign Mines Of Africa announced in October 2013 a maiden inferred resource at its flagship Mandiana Magana mine in Guinea of 600,000 ounces of gold in very deep oxides, including 420,000 ounces with an average grade of 2.3 grams per tonne of gold.

Despite this, the company said it struggled for support for the development of the project and although the Guinean Government had agreed to give it assistance in order to fast track the site into small scale mining, it was forced into survival mode during the period.

However, the company said it has been able to restructure its finances so as to preserve its Guinean assets in the most cost effective way possible and, after raising GBP625,000 in March, it has over GBP600,000 in the bank to provide sufficient working capital for the next 15 months.

Sovereign Mines Of Africa shares were down 11.8% to 0.970 pence, putting it in the top ten AIM All-Share fallers on Thursday.

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Source: Alliance News

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