As announced in the interim results for the six months ended 30 June 2015, a four year exploration licence was granted on 25 March 2011 to Frontier over Block 34 (Block 34) located in the Kafue Trough in southwestern Zambia, which covers an area of approximately 6,427 square kilometers. As previously announced, on 8 January 2015, the Company filed for an extension to the exploration license in Block 34 and the extension application was still pending and accordingly, the initial four-year exploration licence, which was granted on 25 March 2011, had expired.
The Company has now been informed by the Zambian Ministry of Mines, Energy and Water Development (the “Ministry”) that the Block 34 exploration licence has been renewed for a further three years with the condition that the Company conducts an environmental project brief on or before 14 March 2016 and pays any outstanding statutory fees due with immediate effect. The Company is considering the renewal letter and will seek further clarification from the Ministry on the requirements of an environmental project brief and any fees payable prior to submission of the licence certificate to the Ministry for renewal endorsement.
The Company still has an urgent need to arrange additional funding for its immediate working capital requirements over and above the potential commitments under its licences and consequently that can be no certainty that the Company will proceed further with the Block 34 renewal at this time.
The Board is continuing to consider all the options for the potential ongoing funding of the Company which could include an issue of new equity, the disposal of part or all of the Group’s existing licence interests and possibly the investment in new projects outside of the oil sector.
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