North River Resources shares drop as firm faces uncertainty

Namib Lead-Zinc Project-focused resource company North River Resources posted its unaudited interim results for the six months to 30 June on Monday, with another period of zero revenue as it continued its exploration efforts.

The AIM-traded firm reported a group operating loss of £1.13m, narrowing slightly from the £1.38m loss in the first half of 2015, with a basic and diluted loss per share of 0.06p, narrowing from 0.07p.

During the period, North River continued in its efforts to secure a mining licence for the Namib Project, with a Notice of Preparedness to Grant the Mining Licence received from the Namibian Ministry of Mines and Energy in January.

The notice set out a process and timeline for agreement on newly introduced licence conditions, and a formal proposal to address the conditions was submitted to the ministry in late April, though the ministry is yet to respond.

North River said the 3,800 metre drill programme continued to progress in the first half of the year, with a number of drill holes showing “significant” mineralisation.

“Overall results, however, have been mixed, with drill holes not intersecting mineralization to the extent anticipated, indicating that achieving a significant increase in defined mineral resource will require further work to improve understanding of the structural complexity of the orebody at depth,” the company’s board said in a statement.

“Since 30 June, the programmed drilling metres have been completed in early September, and next steps will be defined following completion and assessment of final assays.”

Post period end, a successful share capital reorganisation and $5.6m financing - including an open offer and placing - were completed in July.

That allowed North River to redeem outstanding convertible loan notes to Greenstone Resources, and the financing left the company effectively debt free and with $2.5m in working capital to support project work programmes in the second half of the year.

“The company now faces a critical period of assessment in determining the way forward for the Namib Project,” the board explained.

“In regards to this assessment we are cognisant of both the prolonged, ongoing uncertainty regarding timing and terms to be attached to the grant of a mining licence, and the results of the resource expansion drilling programme.”

At 1211 BST, shares in North River Resources were down 11.11% at 12p.