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LONDON (Alliance News) - Churchill Mining PLC on Wednesday said its directors had brought forward their evaluation of a number of funding options to secure additional working capital due to higher costs in connection with its legal case in Indonesia and its defence against a claim made by the London Stock Exchange.
The company said it currently has unaudited cash balances of USD1.1 million and, whilst this is sufficient to meet its working capital needs in the short term, it requires extra capital in the face of its legal claim and to defend against the London Stock Exchange.
Last year, Churchill Mining launched legal proceedings against the Indonesian government at the International Centre for Settlement of Investment Disputes, based in Washington, claiming the government unlawfully revoked mining licences awarded to Churchill for its East Kutai coal project, in which it held a 75% stake through its relationship with the Ridlatama Group. In December, Churchill Mining said it was unclear when the lengthy dispute would be resolved.
In a separate issue, the company said in its annual results in November that in July the London Stock Exchange alleged it had breached AIM rules 11 and 31 from August 2010 to March 2011. Churchill Mining said it disputes the contentions raised by the Exchange.
"The GBP90,000 (USD144,000) provision made in the half yearly accounts in relation to any potential fine has been maintained as a matter of prudence however we note that the ultimate level of any fine may be materially higher or materially lower than the current provision," Churchill Mining Chairman David Quinlivan said at the time.
Churchill Mining said its defence against the claim means it requires extra capital.
Shares in Churchill Mining were down 8.8% at 15.50p on Wednesday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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