Fluormin, the producer of acid-grade fluorspar, has reported that the six-month period to December 31st 'continued to be a challenging time' as global fluorspar prices declined substantially.
In an interim report issued on Tuesday, the company reported that it had been active in addressing issues at its Witkop mine, implementing plant modifications and improved mining methods which resulted in substantial cost reductions being achieved.
Despite the efforts, the company reported that the prevailing fluorspar price fell below current operating costs.
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"Consequently and in light of the current economic environment it was concluded that the only defensible strategy for the company was to place the mine on care and maintenance with effect from the close of business on October 12th 2012," the report stated.
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The company successfully concluded the disposal of its Buffalo Fluorspar project and its 20% interest in Kenya Fluorspar Company for aggregate considerations of £0.74m and $14m respectively.
The company reported that the disposals "were an important step towards rationalising the company's operations and strengthen its balance sheet."
For the six months ending December 31st, the group recorded an attributable loss of £1.3m, compared to an attributable loss of £4.3m for the six months ending December 31st 2011.
For the year ending June 30th, the group recorded a profit after tax of £3.5m. This compared to a loss of £2.8m recorded in the year ending June 30th 2011.
As a result of the cash received in the period from the disposals and the cost control measures taken at Witkop cash reserves increased to £7.9m as of December 31st 2012 from £7.7m as of June 30th 2012.
The company reported: "Following the care and maintenance decision noted above, the company has undertaken certain exploration work to identify near term higher grade plant feed.
"The board continues to explore all its options as it seeks to deliver value to shareholders."
Fluormin's share price was down 5.0% to 19p at 13:26 on Tuesday.
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