Fortune Oil PLC Re: Armenian Iron Ore Project (4084U)
December 02 2013 - 4:30AM
UK Regulatory
TIDMFTO
RNS Number : 4084U
Fortune Oil PLC
02 December 2013
2 December 2013
Fortune Oil PLC
("Fortune Oil" or the "Company")
Non-cash Impairment Loss on Armenian Iron Ore Project
Fortune Oil (LSE: FTO.LN) announced in its Interim Management
Statement on 19 November 2013 that it was continuing to determine
whether the Armenian iron ore assets could be developed
economically. The Company stated that the rail costs continued to
be the major issue which was undermining the commercial viability
of these projects. As a consequence, Fortune Oil expects to
recognise a non-cash impairment loss in the Armenian iron ore
project in its 2013 full year results.
The Company has completed an extensive assessment of the
Armenian project during 2013. The impairment is a result of
increased transportation costs to move the iron ore concentrate
from the mines in Armenia to the Georgian Black Sea port of Poti,
and softening of the long term iron ore prices predicted when the
Armenian iron ore assets could enter commercial operations. The
Company will not make any material investment in the development of
this project unless there is an economically viable investment
case. Nevertheless the Company will continue to evaluate options to
improve the economics of the Armenian iron ore assets and is
working with the Armenian authorities and the Armenian and Georgian
rail companies to determine if this is possible.
Based on the unaudited consolidated accounts at 30 June 2013,
the value of the total asset was US$46 million, excluding those
recoverable assets such as cash & bank and a loan receivable
from a minority shareholder and the impairment is expected to be
the full carrying value of the Armenian iron ore project. The final
figures will be included in the Company's 2013 full year
results.
Fortune Oil's underlying business and balance sheet remain in
good health and the Company is taking decisive action to resolve
the issues which the Armenian iron ore project faces.
For further information please contact:
Fortune Oil PLC
Tian Jun - Acting Chief Executive Tel: (+852) 2583 3135
Bill Mok - Chief Financial Officer Tel: (+852) 2583 3120
Pelham Bell Pottinger
Archie Berens Tel: (+44/0) 7802 442486
Background on Fortune Oil
Fortune Oil is a leading independent energy company engaged in
the investment and operations of oil and natural gas supply
projects in the Peoples Republic of China. Fortune Oil has acquired
a unique portfolio of high quality oil and natural gas projects
across the country and has formed a strong partnership with
domestic and international market leaders. Fortune Oil is listed on
the Main Market of the London Stock Exchange with its operational
headquarters in Hong Kong.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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