Arkaroola Wilderness Sanctuary despoiler Marathon Resources is going down quicker than a Collins class submarine, trading at 89 cents as I write.
Share value was not helped by the 30 July 2008 Quarterly Activity Statement which revealed that the rectification plan for the damage done at Arkaroola still has not been approved by the SA government’s department of Primary Industries and Resources or the Environmental Protection Authority. Marathon has had to provide “further clarification” to these bodies.
In another setback, UraniumSA which is Marathon’s joint venture partner in another exploration project, at McDowell Hill inside the Woomera Prohibited Area has been told by the Royal Australian Air Force that it cannot enter the grounds to conduct drilling. I’m not sure why at this stage, but another UraniumSA partner, Stellar Resources (ASX:SRZ) has also had plummeting share prices. Perhaps its failure to date to secure deals with multiple Chinese investors back in April has both provoked a loss of confidence in the share market on the one hand, whilst raising RAAF concerns about a Chinese connection within the grounds of the world’s largest weapons testing area, on the other. Not to mention that Marathon’s largest shareholders include the China International Trade and Investment Corporation (CITIC).
An appendix to the Quarterly Report also reveals major cashflow problems for Marathon. It is spending almost more than it is taking in. Costs for exploration, development, administration and investment in fixed assets have totaled $A12.7 million, whilst income, which has almost entirely been from the issue of shares and options, has just tipped that at $A16 million which, together with cash at hand gives it a current cash balance of just over $5 million - hardly what is needed to sustain the company over what could be two or more years of unproductive rectification work at Mt Gee (Arkaroola) with no guarantee of eventual approval to mine.