Hodges Resources Ltd has undertaken a review of its corporate strategy ahead of what is forecast to be a busy and challenging year ahead.
Despite the short term difficulties facing the junior exploration sector, the Board remain of the view that their 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 company believes that the true value of the assets is not being recognised even though the fundamentals of the Morupule South Project, in particular, remain robust in the opinion of the directors.
After a thorough review the Hodges Board has agreed to advance its search for a development partner as well as exploring other options for its Morupule South Project, and will therefore now 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 tonne JORC resource and is located directly to the south of the Morupule Colliery, the only operating in Botswana. The project consists of one prospecting licence (PL121/2010) covering a total area of 124km2 within the central eastern district of Botswana. The eastern side of the property is traversed by the 400kv main transmission line interconnecting Morupule Power Stations and the southern load centre (Isang), which lies within the Gaborone radius as well as the transmission lines to the East which 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 Africa-based energy projects, as well as to extract full value from non-core assets”.
Update on Activities
In addition to the review and planning initiatives, the Board and management have been actively pursuing opportunities to secure funding for the Company through industry networks and marketing to specialist investor groups.
In this regard, Hodges was successful in recently signing an exclusivity asset sale agreement with a private international company so as they could complete due diligence on the Hodges’ Ghana assets. It is the intention of the private company to complete the transaction once it considers the findings of the due diligence work currently underway.
In an effort to raise further funds through a similar process, Hodges is also in talks with other investor and industrial groups for the possible divestment of its other non-core assets.
Elsewhere, the Company is well advanced in obtaining a resolution to the matter of the outstanding US$3,000,000 refundable option fee that is due to Hodges by the original Jaquar Ventures (Pty) Ltd shareholders under the Moiyabana Project Heads of Agreement.
In late 2012, the Hodges Board decided that it would abandon its option under the Moiyabana Project Heads of Agreement and they requested the repayment of the refundable $US3 million option fee originally paid to the original Jaquar Ventures (Pty) Ltd shareholders. Since that time Hodges has been in negotiations to secure this repayment.
The Hodges Board is now expecting the Ruling Judge residing in this matter to set dates for the completion of proceedings within the next month. It is expected a ruling in the matter may then be delivered within 3-6 months. Directors remain confident of Hodges’ position and the Company’s claim in this matter and look forward to updating shareholders in due course.
