THE BOURSE WHISPERER: Venture Minerals (ASX: VMS) has reluctantly suspended operations at the company’s Riley direct shipping ore (DSO) project in northwest Tasmania.
The reason given by the company for the decision was operational risk associated with on-going appeals against the project’s approvals accompanied by an unfavourable broader economic environment.
“After receiving full approvals for the Riley DSO project in mid-2013 and having secured financing, including an iron ore hedge facility at a time of higher iron ore prices, Venture was well placed to fully underwrite the life of the project,” the company said in its ASX announcement.
“It is therefore with regret that on-going appeals have delayed the project and in turn deprived shareholders and the local Tasmanian community of this opportunity in the medium term.”
The company explained it has completed extensive pre-production work at the Riley project over the past 18 months.
Venture is to leave all this in place, as it provides the company with the facility to commence production, on relatively short notice, should circumstances change in the medium term.
Venture indicated it currently maintains a strong financial position with more than $6 million in cash (as at 30 June 2014).
“The company will continue to monitor the situation closely and remains well placed to take advantage of any change in circumstance that would support a production decision at the Riley DSO project,” Venture said.
“Furthermore, Venture continues to be a party to appeal proceedings and is also actively seeking to recover all legal costs associated with past and present legal challenges.”
Venture declared it will continue to progress and evaluate financing options for the development of its Mt Lindsay tin/tungsten project, which it reminded everybody, remains one of the world’s largest undeveloped tin projects.