Solomon Gold at risk after losses more than double

Soaring losses and a diminishing cash pile mean gold explorer Solomon Gold could do with a cash infusion soon if it wants to carry on mining.

The group racked up a loss in the second half of 2011 of A$2.24m, more than twice the loss of A$1.08m in the latter half of 2010, as share based payments expenses increased losses by A$0.95m this time round.

Revenues rose to A$0.18m from A$0.054m in the second half of 2010. Loss per share doubled to 0.8 cents.

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With losses rising, the ability of the company to continue to operate as a going concern has been cast into doubt unless it can raise some more cash, and its ability to do so may be determined by the success or otherwise of its exploration and subsequent exploitation of its tenements.

Cash at the end of the year had plunged to A$2.49m from $11.54m at the end of 2010 as the company pressed on with its drilling campaign.

The firm continued drilling at its two 100%-owned prospects on the Fauro Island Project until December and the data is currently being reviewed. Elsewhere, the Rannes project continues to see "encouraging" results, with a resource estimate update expected this quarter.

The share price fell 2.56% to 9.50p by 15:27.

NR