Drilling group sees value in US market for 2019

Macclesfield-based Sunrise Resources, the AIM-traded diversified mineral exploration and development company, has reported increased losses for the year to September 30.

However, it said markets for its pozzolan products may improve in North America next year.

In the latest figures to be filed, it revealed a pre tax loss for the period of £786,672, which was up from a loss last year of £311,046.

The group is not yet producing minerals and so has no income other than a small amount of bank interest.

Consequently, the group is not expected to report profits until it disposes of, or is able to profitably develop or otherwise turn to account, its exploration and development projects.

The company has mined various sites in Canada, Finland, Ireland and Australia.

Chairman Patrick Cheetham said: “Extensive laboratory testwork on drill and surface sampling has continued during the year and has delivered outstanding results for production of both perlite and pozzolan.”

Perlite is an amorphous volcanic glass which can be used in lightweight plasters, concrete and mortar, insulation and ceiling tiles, and pozzolan can be used as a substitute for cement in concrete mixtures.

Mr Cheetham said: “This was followed up with a bulk sampling programme that has allowed us to deliver larger samples to several potential customers and successful commercial-scale trials have now been completed for both commodities. These customer trials are continuing and are expected to lead to firm sales contracts in due course.”

He added: “The company has made good progress in seeking sales contracts for both perlite and pozzolan, but shareholders should not expect immediate results as pozzolan and perlite are performance products with individual customer requirements requiring tailored testwork.

“Nevertheless, we have already signed two memoranda of understanding on perlite sales sufficient to underpin a production start-up.

“The bulk sampling and commercial-scale trials have also allowed us to confirm the scale-up of our laboratory testwork and pave the way for commercial arrangements with the parties involved. Tests are also in progress with other potential customers.”

Mr Cheetham said: “It is a good time to be entering these markets.

“Cement companies and fly ash suppliers are already grappling with a shortage of fly ash which we are aiming to replace with our high-quality natural pozzolan.

“This fly ash shortage will be intensified should the largest supplier to western markets, the coal-fired Navajo Power Station in Arizona, close as expected in 2019.

“Meanwhile, the perlite market in the western US continues to be strong as more US states, and now Canada, continue the legalisation of cannabis, for which perlite provides an ideal growing medium.”

He added: “In Australia we completed a modest programme of exploration during the year at our Baker’s Gold Project to ready the project for drilling and to enhance its value and marketability as we continue to seek divestment of non-core assets.

“However, also in Australia, a difficult decision has now been made to surrender the company’s exploration licence over the Cue
Diamond Project.

“We can no longer defer the escalating expenditure commitments for this project.”

He said this has led to increasing the overall loss for the financial year.

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