City Beat: Cost-cutting sees company reduced to shell

THE dwindling cash and prospects of a Queensland resources company has prompted another “please explain’’ from the ASX, as it pointed out the business has a mere $182,000 in the bank and is forecast to chew up another $100,000 in the next quarter.

LWP Technologies is based out of the One One One Eagle Street building in Brisbane’s CBD. Picture: Supplied

WATCHING loss-making LWP Technologies twist in the wind is just downright painful. How much longer can this farce drag on?

It emerged yesterday that the dwindling cash and prospects of the beleaguered resources wannabe has prompted another “please explain’’ from the ASX.

The stock exchange noted that the Brisbane company recently reported a negative $421,000 net operating cash flow for the quarter.

It also pointed out that LWP, with a mere $182,000 in the bank, has also forecast $100,000 will be chewed up in the next quarter.

Chairman Dan Lanskey acknowledged that the firm “will continue to have negative operating cash flows for the time-being’’ as trading in the stock remains suspended.

Even with the ATO set to refund $252,000 next month for old R&D claims, LWP is still operating on little more than the proverbial smell of an oily rag.

A cost-slashing exercise has seen the company reduced to a mere shell, “with only the board members, company secretary and research scientist remaining active,’’ Lanskey said.

A Clontarf pilot plant to work on its fracking technology remains mothballed even as a lab in Germany stays in limited use for R&D.

LWP reported a $658,454 loss in the half-year to December and has never commercialised a product since floating 12 years.

But Lanskey said the company “continues to examine new business opportunities and will actively seek to raise further working capital’’.

We’re not holding our breath to see how all that pans out.

Neither, we suspect, are investors, who might have something to say about this sorry mess at the AGM in May.

NEW MINER IN $7M IPO

A NEW junior miner in Brisbane hopes to raise up to $7 million from investors to fund the development of its promising silver and gold project in the US.

Seasoned resources player Frank Terranova chairs startup Metals 479, which launched a 20¢ per share float this month ahead of a planned ASX listing on April 27.

The money will be targeted at the company’s high-grade Corcoran site in Nevada, a 20.2 sq km area which they say “could be one of the richest undeveloped open-pit silver/gold projects in North America’’.

Illustration of Frank Terranova by Brett Lethbridge

Terranova told City Beat yesterday that the response so far had exceeded his expectations, at least in part because investors want a return to “meat and three veg’’-type offerings.

“I detect an element of fatigue within the retail market for the sexy, or all the new metals and commodities that are in vogue,’’ he said.

After scouring the planet for two years, Metals 479 acquired the Nevada site with just over $3 million amassed from pre-IPO seed investors.

Previous owners went bust when metal prices sank but Terranova is confident that he’s got a winner on his hands.

The long-haired bizoid is widely seen as unconventional but a solid operator with more than 25 years in the game and someone who has delivered impressive returns to shareholders.

He previously served as a top gun with Allied Gold Mining, Taruga Gold, Unity Mining, Chesser Resources, Polymetals Mining and Southern Cross Goldfields.

Terranova still serves as chairman of Freehill Mining and a director of Mayur Resources.

Also on the board with him at Metals 479 are Jonathan Hart, Stephen Kelly and Chris Morgan-Hunn.

And in case you’re wondering, the company name derives from the atomic numbers for silver (47) and gold (79).