http://www.mining-journal.com/emea/booster-shotBooster shotA...

http://www.mining-journal.com/emea/booster-shot

Booster shot

A little company on the verge of big things – that’s literally the case for Balamara Resources NL. The not insignificant sum of US$14 million will determine how quickly it gets closer to one of its goals.

Having struck a deal earlier this year to sell its Balkan Mining base metal assets – the Monty, Varesh and RSC projects in the former Yugoslavia – to a group representing a European buyer consortium, Balamara should have had its funds by now. Back in February it expected the “receipt of funds … within 30 days”.

Managing director Mike Ralston told Mining Journal this week that was still the case.

“I obviously cannot say for certain [when Balamara will receive the funds] as it is a process, but I am hoping this will be paid to us within the next 30 days,” he said.

ASX-listed Balamara, which has a current market capitalisation of about A$38 million, has seen its share price dip by more than 30% since announcing the deal. This despite last month reporting a maiden JORC-compliant resource of about 23 million tonnes for the Nowa Ruda coking coal project in Poland. An “exploration target” of 112-160Mt was also calculated from historical data and information collected over the past 25 years and made available to Balamara.

Nowa Ruda is an established underground mine that produced coking coal for domestic use up until the 1990s.

Ongoing drilling by Balamara is expected to convert more of the exploration target tonnage to resources.

“We estimate that all drilling and feasibility costs for Nowa Ruda over the next 12-18 months – through to a decision to mine – will cost a maximum of A$4 million, including some additional holes we might drill to increment the resource,” Ralston said. The bigger cost, perhaps $150 million, will be for a mine restart and for production which “will have to be raised separately in 2015, but we are comfortable to raise that once the feasibility study is completed the first quarter of 2015”.

Balamara recently raised $1 million to boost its flagging finances but the Balkan Mining sale is obviously the key to its immediate future.

The company is also hopeful of getting some sort of return for its investment in another base metals exploration project in Poland, Bogdan, which it bought into in 2011.

“We are still undecided as to what to do regarding Bogdan,” Ralston said. “We have openly stated our desire to focus on our company making project, Nowa Ruda, and not get distracted by other projects, hence the divestment process over the past six months. But at the same time it may be worth one or maybe two more holes to either write off Bogdan or find something.

“This decision will be made after we get the A$15 million over the line as it is as much about available cash as anything.”

Balamara is also involved in a tender process for the Togo phosphate project in Togo, a potentially much larger development for the active junior.