Sovereign Mines plunges after warning over future operations

Shares in Sovereign Mines of Africa plunged over 50% early on Friday after the mining sector investor issued a warning over its future.

The Africa-focused group said its outlook looked bleak after a disappointing 2014 during which it struggled to find a strategic partner for its Mandiana gold project in Guinea.

Citing weak gold prices, Sovereign Mines said investors did not seem intent on supporting exploration projects, although it reiterated its commitment to the project and said it remained hopeful of securing a partner.

However, the group warned that if it failed to secure further financing or find a strategic partner, it may not have enough resources to keep hold of its exploration assets and might not be able to continue operating.

The group reported an annual pre-tax loss of £3.9m compared with a £0.92m loss a year earlier, due to an impairment charge booked on its assets.

Sovereign Mines shares were down 46.25% to 0.258p at 10:27 on Friday.