Metallica defers Sconi DFS to protect cash position
JOHANNESBURG (miningweekly.com) – ASX-listed Metallica Minerals on Monday announced that it would reduce nonessential project expenditure to conserve cash, in light of weakened market conditions and difficulty in attracting sufficient project funding or strategic partnerships.
Most notably, this meant that the resource developer would implement corporate and administrative cost reductions, as well as defer the proposed definitive feasibility study at its flagship scandium/cobalt/nickel (Sconi) project, in north Queensland.
In addition, no significant fieldwork was planned for the remainder of the year.
In the interim, Metallica would continue to pursue and explore project funding opportunities and offtake agreements for its Sconi and Weipa zircon/rutile projects, which would include identifying strategic investors.
It would also continue to actively progress permitting of its key mining lease applications towards their granting, as the majority of feasibility fieldwork required for the development of both projects had been completed.
MD Andrew Gillies said in a statement that the company was well placed to move these two core projects to the development stage.
“By deferring any major new initiatives, the company seeks to be mindful of preserving its important cash position and maintaining shareholder value through continued efforts to complete necessary permitting, and to develop important relationships for offtake and project participation,” he commented.
The value of Metallica’s combined and listed investments was around A$8.4-million, which it said would be boosted by an anticipated A$3-million research and development rebate. The company also had some A$5.4-million in ASX-listed investments.
The board would revisit its decision to reduce costs and defer project activities once it had secured further funding.
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