Globe Metals initiates Cost reduction plan
Globe Metals and Mining, the Australian Securities Exchange (ASX)-listed miner exploring for niobium at Kanyika in Mzimba, will continue its cost cutting measures for the year ending June 30 2014 after reporting an $11.9 million (K4.6 billion) loss.
In its annual report for the year ended June 30 2013, the company, smarting from a consolidated loss after providing for income tax, said the cost reduction plan initiated has resulted in cash in the bank at year-end of $14.16 million (K5.4 billion).
“To improve and sustain efficiency, senior executives of the company have accepted reductions to remuneration, the company has conducted redundancies, the reliance on external consultants and contractors reduced and more efficient consultancy transferred to China businesses,” reads the financial report signed by the company’s managing director Alistair Stephens.
The report said exploration activity will be reduced and focus on the optimisation of Kanyika prioritised.
It said the company will be looking for further efficiencies and opportunities to remain competitive for growth and development, stressing that the budget for the 2013/2014 financial year has a 43 percent reduction in overheads from Australia, China and Africa.
The miner’s share buy-back programme was completed on May 24 this year during which time the company bought 5.8 million shares on-market at $677 451 (K262 million).
In the financial year under review, the principal activities of the group were to explore, develop and invest in the resource sector with its major project being the development of the Kanyika Niobium Project (KNP) in Malawi.
“The group has other exploration projects that are progressing in Malawi and Mozambique. There have been no changes to the principal activities during the year. There were no significant changes in the nature of the consolidated entity’s principal activities during the current year,” said the report.
In the year, the group withdrew participation in the Memba titanium-iron ore joint venture in Mozambique and subsequently written off the costs associated with the asset of $0.72 million (K278 million).
The costs associated with the Mount Muambe project in Mozambique of $5.1 million [K1.9 billion] were also written off due to the assessment that the project is not likely to recover its carrying value
Globe is expected to raise about A$1.6 million (K584 million) from the issue of convertible notes at a premium to the current share price to Apollo Metals Investment Company Limited, its strategic partner.
It will also offer eligible shareholders a non-renounceable rights issue offer at A$0.045 share price, to raise a further A$9.9 million (K3.6 billion) which has been underwritten by Apollo.
Meanwhile, the KNP Environmental Impact Assessment (EIA) passed the main technical review hurdle and has been approved by the National Council on Environment (NCE) and the Malawi Government has provided the company with a draft Development Agreement.
Globe is an African-focused resources company, which aims at becoming the major niobium and tantalum producer in Southern and Eastern Africa.
