PERTH (miningweekly.com) – Aurora Funds Management has again downgraded the valuation of its shareholding in ASX-listed Molopo Energy, following that company’s quarterly results for December.

Aurora in September of last year announced that the fair value of its holding in Molopo had been reduced from 3.6c a share to 2.6c a share, based on the information that Molopo had released to the market between August and September of last year.

Following Molopo’s release of its quarterly report for the three months to December, Aurora has again reassessed the carrying value of its investment in Molopo, writing down the value to 1.9c a share.

The company told shareholders that Molopo’s primary asset comprised its cash reserve of A$13.3-million and its investment in Drawbridge Holdings. However, no guidance had been provided as to the value of the Drawbridge investment, prompting Aurora to assign a nil value to the investment.

Molopo obtained a 30% interest in Drawbridge by taking full ownership of the Orient oil and gas project, and subsequently handing over the ownership of that project to Drawbridge.

Molopo obtained full ownership of the Orient project after redeeming its joint venture partner’s shares in Orient, and committing to funding the project in full to the tune of some $21-million.

Aurora said on Friday that based on the structure of the Drawbridge investment, Molopo had no voting rights and only had a limited ability to appoint a director, making it difficult to ascribe a value to the investment.

Furthermore, Molopo’s primary liability remained a long-standing legal action in Canada concerning the company’s Canadian subsidiary, with a provision of A$8.6-million currently on the books for that.

Given that Molopo currently had more than 249-million shares on issue, and cash reserves of only A$13.3-million, and a litigation provision of A$8.6-million, Aurora was valuing Molopo shares at 1.9c each.

Molopo suspended share trading on the ASX in July of last year, and remained suspended to date.