The exploration drilling activities of lossmaking JSE-listed platinum exploration company Bauba have been put on hold and nonexecutive directors are taking only half of their fees until the company has sufficient cash to pay them in full.

“Currently all drilling activities are on hold,” the group, headed by CEO Syd Caddy, told the JSE last week, as it finalised plans to generate early cash flows from chrome mining to fund continued platinum group metals (PGMs) exploration in Limpopo province.

Bauba ended its 2014 financial year with cash of only R915 000 in the kitty, after starting it with R5.2-million.

All new drilling is suspended until sufficient cash is secured, and the outstanding R877 000 owed to nonexecutive directors will be paid only if sufficient cash becomes available in the future.

The main objective of the company, which has been battling to raise funding in a tough financial climate for exploration miners, is to continue the exploration activities needed to develop its Bauba project, a PGMs project located within a prime segment of the eastern limb of the Bushveld Complex, where a number of neighbouring companies are prospecting and successfully mining Merensky and upper group two (UG2) reef.

The board, chaired by Jonathan Best, said Bauba had reasonable expectation of continued operational existence for at least the next 12 months, during which time capital for exploration would be raised as needed.

Bauba sold 3 787 879 shares at 66c a share in the year under review, when it spent R8.4-million on mainly operational activities, which were restricted to the completion of drilling begun in the previous financial year.

The headline loss in the 12 months to June 30 was R5.5-million, compared with R9.2-million last year.

The company declared a total inferred resource of 16.9-million ounces of PGMs, compared with a total target resource of 109.9-million ounces.

Costs of R1-million are expected to be incurred once approval is received from the JSE to conclude the chrome asset acquisition, which will give the company 60% of the prospecting rights over the Moeijelijk and Waterkop farms. The remaining 40% of the rights will be held by minority shareholders in Bauba’s subsidiary, Bauba A Hlabirwa Mining Investments.

The farms are located 50 km north-west of Steelpoort, an area of significant mining activity with infrastructure to support the mining.

The chrome orebody at Moeijelijk sub-outcrops close to surface and lends itself to opencast mining and a relatively quick, low-cost start-up process.

The expected life-of-mine of the opencast operation is five to six years, based on a mining plan of 20 000 t/m.