Fortune Warns Of Armenian Project Writedown As It Appoints Acting CE

FORTUNE WARNS OF ARMENIAN PROJECT WRITEDOWN AS IT APPOINTS ACTING CEO

London South East, UK
Dec 2 2013

Mon, 2nd Dec 2013 09:46

LONDON (Alliance News) – Fortune Oil PLC Monday appointed an
acting chief executive, changed its financial year end, and said it
would write down the value of its Armenian iron ore project after
transportation costs rose and iron ore prices declined.

In a statement, the company said it had appointed Chief Operating
Officer Tian Jun as acting chief executive. It said it would also
change its financial year-end to March 31, from December 31, starting
from its 2014 financial year. That will bring it into line with the
financial year of China Gas Holdings Ltd, in which it holds an 18.39%
stake, making preparation of accounts easier.

The company had previously warned that it was considering whether the
Armenian iron ore project could be developed economically because of
rising rail costs and the long-term decline in the price of ore.

After completing its review, it said it now expects to book a non-cash
impairment change for the project in its 2013 results. The asset was
valued at USD46 million at the end of June.

“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,” it said in its statement.

The cost of moving ore from its mines to the Black Sea port of Poti
had increased it said.

Fortune Oil shares were down 1.3% at 9.25 pence Monday morning.

By Steve McGrath

From: Emil Lazarian | Ararat NewsPress