JSE-listed explorer, developer and investor Union Atlantic Minerals reports that it has been negatively impacted on by restrictions related to the Covid-19 pandemic, weak commodity markets and “poor sentiment” towards junior mining and exploration companies.
The company is in the final stage of a restructuring process whereby management has resolved to focus on brownfield exploration of base and technology metals, mine development, mining of ores and production of polymetallic concentrates.
It has an interest in two projects in the Northern Cape - Rozynenbosch and Renosterkop.
Chairperson Lelau Mohuba says the current economic outlook in South Africa is subdued as a result of the pandemic, with persisting uncertainties regarding the length of time the effects of the pandemic, as well as constraints on operations, will extend into the future.
However, the first quarter of this year has resulted in a marked improvement in worldwide commodity prices and a renewed positive outlook for the company.
Nonetheless, during the persisting time of uncertainty, he says Union Atlantic and its brownfield exploration projects were and will continue to be managed on a care-and-maintenance basis. This involves minimum staff on sites and less fieldwork being pursued until such time as the pandemic has been ameliorated and the prospects for junior mining and exploration companies, as well as global commodity prices, improve.
Union Atlantic’s projects require further limited geological fieldwork and metallurgical testwork to advance and add value by updating and compiling competent persons reports and project valuations. This task, as well as applying for a mining right, is currently being undertaken by competent persons of Union Atlantic, says Mohuba.
“One of the objectives of management in the medium term is to acquire a cash generative project or business to supplement the two brownfield exploration projects in the portfolio and to source a cornerstone financier and shareholder to introduce cash and/or cash generative projects,” he says.
Mohuba says this objective has been “largely reached” by way of the transaction with Ibhubesi Capital.
“Union Atlantic finds itself in a stable position, which will enable it to move forward with the stated regeneration strategy of conducting brownfield exploration for base and technology metals, mine development, mining of ores and production of polymetallic concentrates,” he says.
As such, the acquisition of projects and application for new prospecting rights will also be considered.