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Paternoster Resources seeking to cut operational costs
Paternoster Resources announced an update on its strategy on Friday, as it seeked to cut costs amid a fresh investment push in tandem with a new partner.
The AIM-traded firm had announced on 18 January that it entered into an agreement with RiverFort Global Capital, the specialist provider of financing to the natural resources sector, whereby Paternoster would work closely with and co-invest alongside RiverFort in a range of opportunities within the natural resources sector.
At the same time, the company also implemented a successful placing to raise £0.85m of new funds from both institutional and private investors, to invest in the enhanced strategy.
Paternoster confirmed on Friday that its board had already started to implement the first steps of this strategy which include a reduction in costs.
It said that, in order to increase potential returns to investors, it was important for the company to balance maximising the pipeline of high quality investment opportunities that it sees and is able to invest in, whilst at the same time, keeping control of costs.
The agreement with RiverFort would both enable greater access to investment opportunities, but would also allow certain corporate costs to be reduced.
Against that background, the board had already reviewed the company's cost structure and concluded that corporate costs could now be reduced, particularly with regard to personnel and infrastructure costs.
Specific initiatives had now already been implemented and, based on the current size of the portfolio, it expected that overall administration costs would be reduced to an annual cost of below £0.2m - a significant reduction of around 40% on historic levels.
The board also agreed to cancel all outstanding option arrangements.
"The board is focused on rapidly implementing the company's enhanced strategy in order to improve returns to investors and I am pleased to announce that progress is already being made on this, starting with a reduction in costs," said chairman Nicholas Lee.