Mozambique-focused tantalum miner Noventa (LON:NVTA, TSE:NTA) said it has an “urgent fund raising requirement” as it seeks to bring its new processing plant at its Marropino mine into full operation this year.
The firm said that although the introduction of an interim comminution circuit (ICC) has substantially increased the rate of production at Marropino, it has not been possible to maintain the achieved and targeted rate or production of 200,000 pounds per annum for a sustained period due to mechanical difficulties.
Noventa has taken corrective action, expected to be completed this month, but the firm said that it has become increasingly apparent that the capital expenditure required to bring the new plant – with a capacity of 600,000 pounds per annum – into full operation will be significantly higher than originally anticipated.
The experience of commissioning the ICC, as well as other factors, has led Noventa to reassess its estimates of the period between the ramp up in production of the new plant to the point when the company becomes cash flow positive.
These other factors include a lack of rainfall that has led to unusually low levels in the dams that serve the processing plant and further capital expenditure on purchasing additional earth-moving equipment, spare parts, laboratory equipment and a larger crane, as well as increased supervisory costs, greater consumption of energy than anticipated and the unexpected strength of the South African rand and Mozambican metical against the US dollar.
Noventa currently has a cash position of approximately US$17.6 million, which the firm said is now substantially less than its requirements as it seeks to bring the new processing plant into operation. Consequently, the firm is consulting with advisers to consider what amount will be needed and how to raise the additional funds required.
The firm added that it is making progress in its search for new management, including a new CEO. In the meantime, John Allan – CEO from July 2009 to May 2010 – remains acting CEO.