London AIM-listed junior miner African Battery Metals (ABM) announced early this month that it had successfully concluded its refinancing process. Last December, ABM was suspended from trading on the AIM because of its poor financial situation. At that time, its obligations to short-term creditors exceeded its available working capital and further financing was required to keep it a going concern.
This led to changes in senior management, with the then CEO and executive director standing down and being replaced by an executive chairperson(Andrew Bell) and a new executive director (Paul Johnson). A refinancing plan was developed, along with a review, including prioritisation, of ABM’s existing interests and resource targets; the development of a strategic and operational plan; an initiative to identify, review and consider new opportunities; and a programme to cut corporate costs. When these initiatives were approved by shareholders in February, the company was allowed to resume trading on the AIM.
“[F]ollowing the general meeting approval of the refinancing announcement . . . [as of March 6], ABM has paid all material creditor balances through cash or share settlement,” stated the company’s press release. “The company has no material debt and free working capital after all creditors were settled, amounting to approximately £860 000. The cash balance, considering current operational plans, is anticipated to cover corporate public limited company costs and anticipated project exploration expenditure on existing business interests for in excess of 12 months from today’s date [March 6]. “The strong cash position also enables the company to review and, if deemed appropriate, to acquire modest-cost new business opportunities to manage corporate project risk through commercial diversification.”
As its name implies, ABM is focused on exploring in Africa for metals that will be key components of new-generation electric batteries. In particular, it is targeting cobalt/copper, lithium and nickel. In due course, it intends to develop and mine resources it discovers. It currently has two cobalt projects in the Democratic Republic of Congo and four nickel-cobalt exploration licences in Cameroon, and holds 70% of a chrome/nickel/cobalt exploration licence in Côte d’Ivoire. The company has stated that the re-establishment of its exploration activities should start by focusing on these existing assets. However, those projects which offer the most potential impact per dollar spent on exploration will be prioritised.
“Since the December 2018 suspension and with the support and assistance of existing shareholders, new investors, company advisers, company management and, importantly, the AIM exchange itself, ABM is now in a robust financial position and able to take the steps it needs to drive its business forward and potentially flourish,” affirmed Johnson. “Any recovery scenario should look to focus on existing interests first, extracting the best opportunities and building from that core. We are doing just that.”