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Strategic Natural Resources

  • BY: Andrew Hore |
  • POSTED: 28/11/2011 |

South African coal miner Strategic Natural Resources says that it has designed a mining plan that will enable it to cost effectively deliver against its first orders.

Opencast mining at the Elitheni mine should begin next February and underground production in April. SNR owns 74% of Elitheni.

SNR has signed a deal with a rail company which will provide rail services to transport coal to ports in order to satisfy the export orders.

Drilling continues at Elitheni. SNR hopes to update its resource statement in the first quarter of 2012.

SNR has no revenues and the interim loss more than doubled to £975,000. Large prepayments relating to commission due on the company’s off take agreement with Trasteel and deposits relating to mining equipment meant that working capital increased and the cash outflow from operations was £2.1m. At the end of August 2011, SNR had net cash of £781,000 plus a loan note worth £630,000. In September, SNR raised £1.9m at 19p a share in order to buy equipment required to commence underground mining. SNR still requires further finance to get full production going at the mine.

At 13p a share, SNR is valued at £15.5m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFNovember2011_26.pdf

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