THE future of Marengo Mining Ltd’s Yandera project in Madang province looks bleak after the company posted an operating net loss of A$15.3 million (K36.5 million) for the year ending June 30, 2009.
The miner has announced that while it tries to secure funds to develop its Yandera project and develop newly-discovered deposits, it is also concerned about the fluctuating price of copper and molybdenum in the world market.
In an analysis of the company’s operations for the June quarter, it determined that the fluctuating mineral price is having detrimental effects on the company’s operations.
The Australian-based company, whose only project in the country is the Yandera copper and molybdenum project in Madang, said while it intended to raise development funds through debt and/or equity financing, there could be no assurance that additional financing would be available at all or on terms acceptable to the company.
“In particular, commodity price fluctuations may significantly affect the ability of the company to fund the development of the Yandera project and the company’s forecasts and expectations regarding the economic viability of developing its mineral deposit,” the company said.
“Fluctuations in commodity prices may also impact the results of operations once mining begins … the monitoring of price movements and trends for the company’s target mineral is essential to understand and monitor the viability of the company’s assets,” it further added.
Marengo began the financial year ending June 30 with cash reserves of A$23.4 million (K55.83 million).
No additional funds were raised during the financial year and those that were spent were used to actively advance the company’s Yandera project.
During the financial year ending June 30, the company incurred exploration spending of A$16 million (K38 million) as against A$14.6 million (K34.84 million) last year.