The Alba Mineral Resources plc (LON: ALBA) share price crashed 20.6% after issuing an update about the operations at its Clogau-St David's Gold Mine in North Wales. The company was denied a temporary extension of the higher (100m3/day) abstraction rate to account for the heavy and unseasonal rainfall experienced in north Wales.
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Investors reacted negatively to the news, given how much the company needed the higher abstraction rate to properly dewater the mine after the heavy unseasonal rainfall reflooded the company’s workings. Investors also doubt whether the company’s outstanding permit applications will be granted.
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Alba Minerals had to resort to an emergency water abstraction according to the Water Resources Act 1991 to safeguard the safety and access works Alba completed at Levels 2 and 3 of the Lower Llechfraith Workings before those levels were re-flooded. The company has submitted a notice of the emergency abstraction to the regulator.
Furthermore, the company has applied to Natural Resources Wales (NRW) for formal variations to its water discharge and water abstraction (or transfer) permits for dewatering the Lower Llechfraith workings to increase the applicable thresholds under both permits.
Alba Minerals noted that while it cannot say when its applications shall be approved, it can say that it has responded well to every request made by officials from the authority and expects approval of the applications. However, there is no guarantee that NRW shall grant the applications.
The company also told investors that it had completed the final bat exclusion and noise mitigation measure required to be implemented before it commences exploration activities at Level 4 after dewatering.
Investors' adverse reactions can be linked to the denial of the company's initial water abstraction requests, which indicates that NRW could reject the firm’s current applications. However, only time will tell whether the company’s applications will be accepted or denied.
Alba also noted that it might have to postpone its proposed airborne geophysical survey over some of the Company's critical regional gold targets, which might have to be pushed back to October 2023 after the CAA delayed approving its flight plans.
Alba Minerals share price.
The Alba Minerals share price plunged 20.62% to trade at 0.0774p, falling from Friday’s closing price of 0.0975p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.