THE WA Department of Mines and Petroleum mining warden has recommended the refusal of three uranium exploration licences sought by Cauldron Energy, based on inadequate funding.
The licences, adjacent to pastoral leases on the Minderoo pastoral station in the Pilbara, would extend Cauldron’s ground around its flagship Yanrey project.
Following a December hearing, the mining warden concluded that Cauldron did not have adequate funding in place to carry out the proposed exploration.
Cash available to the company at the end of the December 2013 quarter was about $487,000, while listed investments readily convertible to cash for exploration purposes totalled $580,000.
Cauldron executive chairman Tony Sage said he was disappointed by the decision and would urge Mines and Petroleum minister Bill Marmion to disregard the recommendation and instead “support greenfields exploration”.
“However it is critical that the Warden found that based on the detailed independent expert evidence led by Cauldron that exploration could be carried out on the pastoral lease with appropriate conditions,” he said.
“While the Warden found the company does not have the financial capacity to undertake the proposed exploration at the time of the hearing, the company remains confident it is able to raise funds in order to carry out future exploration.”
A fundraising road show to Beijing in the December quarter snared the company a mandate from a leading Chinese investor group to raise $10 million at $0.25 per share. The mandate was due to deliver $5 million by 31 December 2013, but Cauldron had not yet received the much-needed capital injection.
However, the company said the investor group remained confident of the final 30 June 2014 deadline, by which to provide the full $10 million.
Two major Cauldron shareholders also advanced the company short term loans totalling $400,000 ($200,000 each) for operating expenses that are either repayable or convertible into shares.
Mr Sage said the warden’s decision would not hinder current operations at the Yanrey uranium project.
“I wish to assure shareholders and the broader market that the decision doesn’t impact on our assets in the Yanrey area,” he said.
Cauldron intended to continue its “active” exploration in the Yanrey area to further develop the Bennet Well uranium project, where high grade uranium intersections were announced in February.
Cauldron was working with resource consultants Ravensgate to complete a JORC 2012 compliant revised resource.