North River Resources reports on transformational first half

In the six months ended 31 December 2009, North River Resources (AIM: NRRP) has strengthened its position as emerging southern Africa focused resource company. Most notably with the acquisition of a highly prospective portfolio of Namibian base metal and gold assets from Kalahari Minerals (AIM: KAH) - which subsequently became the company’s largest shareholder with a 44.9% stake in North River.

North River has changed its accounting reference date to December 31 from June 30, aligning the the company’s financial calendar with that of Kalahari Minerals.

"This acquisition not only provided an exciting portfolio of well-developed projects - on which £8 million had been previously invested - but also afforded the company a major strategic investor in Kalahari", North River said in its interim results statement.

North River believes that the support of and affiliation with Kalahari will strengthen its position and create further growth opportunities in the southern African mining arena. Additionally, the deal also bolstered the company’s management team with the addition of two new board members, as Kalahari chairman Mark Hohnen was appointed as the new North River chairman and Professor Glyn Tonge joined the board as a non-executive director.

“The company has made considerable progress towards achieving its strategic objectives”, North River chief executive Luke Bryan commented. “Our aim is now to develop these assets towards production, whilst also assessing additional acquisition opportunities to further strengthen our portfolio."

Surface works are now underway at the Namib lead-zinc mine in preparation for underground exploration activity and once safety equipment and systems are in place, a full survey of the underground workings will be completed. The exploration work intends to identify the most attractive route to take the project into production.

At the Ubib tenements, which are adjacent to the Rossing and Rossing South uranium assets, North River is actively negotiating farm access contracts. Subsequently it intends to begin extensive field surveys aimed at delineating drilling targets.  Early surveying and historical data has indicated the licence is prospective primarily for copper, gold and uranium.

North River said it is also continuing its work in Mozambique, through the assessment of data generated from the Mavuzi gold and uranium project - which includes a previously producing uranium mine. Other potential projects, involving the exploration for rare earth elements, gold and tantalum, are being assessed in Mozambique.

With the transformational acquisition and the commencement of work programmes, North River has invested considerably in the six-month period. As such, the company widened its pretax loss to £2.3m from £299,220 in the comparative period of the previous financial year.

The company noted that it had raised £7m through a placing in October, and it has retained a healthy cash balance at the period-end of £6.56m. The company also highlighted that the placing added new institutional investors to its shareholder base, and it maintains strong relationships with its established shareholders.

In terms of its outlook, North River said it is confident that it now has the foundations to rapidly grow and build on its position as an emerging southern-African exploration and development company.

"Utilising a strong on-ground presence in Namibia, the focus remains on fast-tracking key assets towards production, including the Koperberg, Malachite Pan and Okasewa copper projects in addition to the Namib lead-zinc project," it added. 

Astaire Securities issued a note today, saying North River remains an early stage exploration business, although the portfolio of assets has changed.

The company has exited Australia, and the focus is now firmly on its new Namibian and Mozambican projects. The broker believes that, given the experience of the board and the strong balance sheet, the ingredients are in place to add value through project development and further acquisition.

http://www.proactiveinvestors.co.uk/companies/news/15076/north-river-resources-reports-on-transformational-first-half-15076.html