Sovereign Mines of Africa fails to find strategic partner, posts loss

Shares in Sovereign Mines of Africa plunged as it moved to fully impair the value of its exploration assets after failing to sign a strategic partner to fund the advance of the Mandiana Gold Project to a definitive feasibility study.

The company booked a full-year pre-tax loss of £1.42m, from a loss of £3.88m in the preceding 12 months. The results included a £1.28m impairment of intangible fixed assets, from £3.7m a year earlier. Sovereign's shares sagged almost 22%.

Although talks to find a strategic partner continued through the year, nothing came to fruition, Sovereign said in a statement.

"The board is still continuing discussions with potential partners but to date no agreement has been concluded. As a result, due to the potential uncertainty your board has considered it prudent to impair the value of the group's exploration assets in full," the company said.

Sovereign said that, as a result of its recent fundraising, it had cash resources of about £477,000 at 30 April, which would provide sufficient finance to cover ongoing expenditure for the foreseeable future.