Marengo: K15m spent on exploration, study

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Source:

The National, Friday 19th April 2013

 MARENGO Mining Ltd spent K15.53 million in exploration and feasibility study during the first quarter of this year.

The miner spent K20.66 million during the same period last year.

It also reported cash reserves of K11.52 million at the beginning of the first quarter this year.

The company suffered an operating loss after income tax of K4.63 million during the first part of the year as against K2.15 million during the same period last year.

Marengo’s March quarter results showed that it borrowed K20.13 million during the quarter under an unsecured loan agreement with Sentient. 

“Funds borrowed have been used as general working capital in relation to the company’s Yandera project.

“The company had cash and investments on term deposits balance of K12 million.”

The company said it would need to raise more capital from external sources for general working capital, exploration or to develop any newly discovered mineral assets.

“It is common in new mining operations to experience problems and delays during construction, development and mine start-up.

“The success and the pricing of any such capital raising and debt financing will be dependent upon the prevailing market conditions at that time, the outcome of any feasibility or other technical studies and exploration programmes and upon the availability of significant amounts of debt and equity financing to a company without projects already in production. 

Marengo said it is subject to all of the risks associated with setting up new mining operations and business enterprises,  including: 

  • The timing and cost of the construction of mining and processing facilities; 
  • The availability and costs of skilled labour and mining equipment; 
  • The availability and cost of appropriate smelting and/or refining arrangements; 
  • The need to obtain necessary environmental and other governmental approvals and permits, and the timing of those approvals and permits;  and 
  • The availability of funds to finance construction and development activities.