Cash-strapped Moreton might have to sell up
Mining & Resources
Beleaguered silver and coal junior Moreton Resources might be selling one or more of its four major projects.
The cash-strapped company (ASX:MRV) has appointed corporate and legal advisors to look at development and funding models for its four major projects – including “joint venture and outright sale”.
It said it has fielded several approaches for its assets and is undertaking a strategic review “to streamline its asset ownership and narrow its focus on the most valuable areas of business development”.
The Queensland-based explorer has no revenue-earning operations.
Despite declaring its first full-year underlying profit of $11.3 million in August, that was based entirely on the accounting value of a new acquisition: the troubled Granite Belt silver mine.
Moreton bought the mine, which has assets worth $13.3 million, for just $10,003 last year.
The company had $1.3 million cash in the bank at the end of June, but an annual cash burn of $1.4 million. It had current debts of $8.8 million.
It’s in the process of completing a $2.2 million rights issue.
Moreton Resources is weighing up its options to defend a tribunal ruling ordering it to pay $9 million in tax because it was not eligible for a government Research and Development rebate.
The Administrative Appeals Tribunal upheld a decision by Innovation and Science Australia that underground coal gasification is a known and proven technology and Moreton’s (ASX:MRV) activities in that area were not considered R&D.
The Morton share price has slipped from 12c in late August to 7c. It has traded between 6c and 18c over the past year.