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Hodges Resources sticks with Botswana coal projects

World Coal,


Hodges Resources Ltd has undertaken a review of their corporate strategy ahead of what is forecast to be a busy and challenging year ahead.

Despite short-term difficulties facing the junior exploration sector, the company’s board said it remained of the view that Hodges’ assets, including the Morupule South project and Moiyabana, have significant value that is capable of being realised in the short to medium term. However, with the current weak financial and commodity market, the board said it believed the true value of the assets is not being recognised even though the fundamentals of the Morupule South project, in particular, remain robust.

After a “thorough” review, the Hodges board agreed to advance its search for a development partner, as well as exploring other options for its Morupule South project. The company will now therefore undertake an assessment of the most suitable options in which to advance the project with potential end-user partnerships. This may take the form of a joint venture or even a part, or complete, project sale.

The Morupule South project has a 2.45 billion t JORC resource and is located directly to the south of the 100% Debswana-owned Morupule coal mine. The project consists of one prospecting license covering a total area of 124 km2 within the central eastern district of Botswana. The eastern side of the property is traversed by the 400 kv main transmission line that connects the Morupule power plants and the southern load centre (Isang), which lies within the Gaborone radius, as well as the transmission lines to the East that interlink into the Southern African power pool grid.

Hodges managing director, Mark Major, said the industry had undergone dramatic changes during 2013 and the board’s corporate review included an assessment of the structure of the business and plans to manage overheads in 2014.

“The board has taken steps to reduce expenditure and we are now looking to position the company in the best situation so that we can add value for shareholders. Central to this strategy is the continuation of work to exploit the interest that remains in Asia and China in African energy projects, as well as to extract full value from non-core assets,” Major said.

Ghana operations

Hodges also announced that the company had been successful in recently signing an exclusivity asset sale agreement with a private international company so that they could complete due diligence on Hodges’ Ghana assets. The private company has indicated an intention to complete the transaction once it considers the findings of the due diligence work, according to Hodges.

Funding

Hodges announced it is in talks with investors and industrial groups for the possible divestment of non-core assets.

The company said it is making progress toward obtaining a resolution to the matter of the outstanding US$ 3 million refundable option fee that is due to Hodges by the original holders of the Moiyabana project.

Hodges expects the ruling judge residing over the matter of repayment to set dates for the completion of proceedings within a month. Directors remain confident of Hodges’ position and the company’s claim. 

Adapted from press release by Sam Dodson

Read the article online at: https://www.worldcoal.com/coal/11022014/hodges_reviews_botswana_operations_498/


 

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