Oracle Power PLC (AIM:ORCP), the international natural resources project developer, is pleased to provide the following update statement from its CEO, Naheed Memon, with respect to developments during Q2 2021:
“Over the past three months activity has intensified at our two gold projects in Western Australia; Northern Zone and Jundee East, both of which, we believe, could independently deliver significant shareholder value over the medium term.
“The bulk of our work during the period has centred on Jundee East, located ~7km due east of Northern Star’s producing Jundee Gold Mine, which has a current Resource of approximately 5.4Moz. In March we announced that a newly identified substantial greenstone belt had been delineated within the Jundee East project as part of the latest gravity survey and processing undertaken by the Company. Following the grant of an Exploration Tenement over Jundee East in May, we were able to get straight to work and immediately initiated a geochemical programme. This geochemical programme was subsequently expanded following the receipt of some extremely encouraging results, and the analysis of this incoming data will lay the foundations for a drilling campaign over the coming months.
“Looking in the more immediate future, drilling is anticipated to start at Northern Zone, which is located 25km east of Kalgoorlie, the home of the ‘Super Pit’ mine, the second largest gold mine in Australia, in a matter of weeks. This is a major development for Oracle and will feed invaluable results into the market to provide guidance on the mineralised potential of this exceptionally promising exploration project.
“The excitement around our findings and plans in Western Australia does not eclipse the value that we believe we have in our Thar Block VI in Pakistan, which remains an important dimension of both our strategy and potential future growth. Notwithstanding this, I and the rest of the Board are acutely aware that we have now reached the one-year anniversary from the date on which we believed we would have received the receipt of the Letter of Intent from the Private Power and Infrastructure Board (“PPIB”). This is clearly a frustrating delay and one which we know has caused consternation amongst some of our longer-term shareholders.
“The delay can be attributed to a number of interrelated factors which has applied pressure on numerous industries, government agencies and individual enterprises such as ours. One element of this has undoubtedly been the COVID-19 pandemic which has made government processes which, pre-COVID may have taken days or weeks to resolve, now takes months to progress even partially. More fundamentally however, we must also recognise that the landscape for energy production in Pakistan has evolved over the past 12-18 months and this has had an enormous influence on the decisions made at both a national and provincial level in Pakistan, particularly with regards to the use of coal.
“Shareholders may well be aware of the Indicative Generation Capacity Expansion Plan 2021-2030, prepared by the National Transmission Dispatch Company in Pakistan which remains incomplete to date. This plan is expected to provide an indicative optimum route through which energy supply should be undertaken over the current decade. Hence it would determine which year power would be procured from Oracle Power (Block VI) if required by the government. As one would imagine, this is a piece of work which is both highly complex and has wide-ranging political implications. It has been an arduous task developing it to this point, with the various drafts receiving criticism from various sections of both government and industry in Pakistan. This plan is now undergoing a further iteration with the objective of including more provincial government guidelines and recommendations. The Board believes this is a positive development in the context of Oracle’s Thar Block VI Project, and it will continue to work with both the provincial and national government agencies to secure Oracle’s seat at the table once this process has been finalised. Indeed, this remains the executive management’s priority focus in Pakistan and I spend a significant proportion of my time in Karachi meeting the relevant government ministers and agencies to progress this.
“Our project and our work more generally in Pakistan continues to have the support of many of the key decision makers in government and we remain hopeful of a successful outcome. However, I would take this opportunity to remind shareholders that there is a great deal of political sensitivity involved and our objective is to navigate this process successfully, which often requires both discretion and diplomacy. Indeed, the development of domestic energy sources is an area which continues to dominate government-to-government discussions, thinking specifically of the China-Pakistan Economic Corridor’s Joint Cooperation Committee (‘JCC’) which is reported to be held on 16th July. Whilst this long-awaited JCC meeting may yield some interesting insights as to China’s involvement in energy development in Pakistan and its approach to coal-based power in general, in the absence of a finalised domestic Indicative Generation Capacity Expansion Plan, it will be difficult to measure the significance of this meeting for specific projects such as ours.
“It is important to note that over the past year we also made progress towards expanding the scope of our Thar Block VI Project, encompassing more elements and advanced coal technologies to deliver coal-to-gas and coal-to-liquid. This strategy is aligned with Pakistan’s internal projections and ambitions to become a domestic fuel supplier, reducing the reliance on imported liquid fuels and gas. We remain actively engaged with the government to make CTG/L projects commercially viable at Block VI. We look forward to sharing more on this in due course.
“As you would expect, we continue to evaluate a number of other opportunities globally to enhance our asset portfolio but in the near term we are looking forward to a highly active second half of the year with our maiden drilling campaign at Northern Zone due to commence in late July or August, and then drilling expected at Jundee East thereafter. These campaigns will give shareholders a much better insight into the value of these assets which are both flanked by Tier One mining companies and are widely considered to be in two of the most productive gold regions globally. Similarly, we will continue to keep shareholders abreast of major developments in Pakistan as we work with the authorities in the rationalisation of the power generation plan for the country, promoting Thar Block VI as an exceptionally large and attractive source of domestic power for decades to come.”
The Board of Oracle would like to advise shareholders that Naheed Memon, CEO of Oracle, will be conducting a shareholder Q&A session on 20 July 2021, details of which will be made available on the Company’s website by close of business on 19 July 2021.
Shareholders are invited to submit questions to Ms. Memon by 5pm on 16 July 2021 via email at [email protected] . There is no guarantee that all questions will be discussed on the call given time limitations and/or specific sensitivities with respect to operations.
For further information:
Oracle Power PLC
+44 (0) 203 580 4314
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