Sarama Resources Ltd reported a $673,644 net loss for Q1 2025, reflecting ongoing exploration costs and capital raises, while navigating arbitration funding with Burkina Faso authorities.
- Q1 2025 net loss of $673,644 USD
- Cash reserves declined to $463,420 USD
- Raised capital through share issuances and private placements
- Ongoing arbitration funding agreement with Burkina Faso government
- Granted stock options and performance units post-quarter
Financial Performance and Cash Position
Sarama Resources Ltd, an exploration-stage mining company focused on mineral properties in Burkina Faso and Australia, released its unaudited condensed interim consolidated financial statements for the quarter ended March 31, 2025. The company reported a net loss of $673,644 USD, a significant increase from the $393,408 USD loss recorded in the same period last year. Cash and cash equivalents decreased to $463,420 USD from $1.15 million at the end of 2024, reflecting ongoing exploration and operating expenditures.
Capital Raising and Share Issuances
Throughout 2024 and early 2025, Sarama undertook multiple capital raising initiatives, including private placements and shares issued to settle debts and acquire the Cosmo Gold Project in Western Australia. The company’s issued share capital increased to over 361 million shares by March 31, 2025, up from approximately 348 million at the end of 2024. These efforts are critical to funding exploration activities and maintaining operations amid a challenging market environment.
Arbitration and Litigation Funding
Notably, Sarama disclosed ongoing arbitration proceedings with the Burkina Faso government related to an investment dispute. The company has secured a non-recourse litigation funding facility of US$4.4 million from Litigation Funding Capital LLC to cover arbitration costs. This arrangement means Sarama is not obligated to repay the loan if the arbitration outcome is unfavorable, although the funder is entitled to recover advanced funds if the claim succeeds. Legal support is provided by Boies Schiller Flexner LLP, underscoring the dispute’s complexity and significance.
Operational and Strategic Outlook
Sarama continues to operate on a going concern basis but highlights material uncertainty regarding its ability to secure sufficient funding in the near term. The company’s directors are actively monitoring cash flow forecasts and pursuing additional capital sources to support exploration and administrative costs. Exploration remains the core focus, with no revenue generated to date, consistent with its stage of development.
Incentives and Governance
Subsequent to the reporting period, Sarama granted stock options and performance units to directors, employees, and consultants as part of its compensation review. These equity incentives are subject to shareholder approval at the upcoming annual general meeting, reflecting ongoing efforts to align management and shareholder interests amid operational challenges.
Bottom Line?
Sarama’s next moves on funding and arbitration outcomes will be pivotal for its exploration ambitions and investor confidence.
Questions in the middle?
- How will Sarama secure sufficient funding to sustain exploration over the next 12 months?
- What are the potential financial and operational impacts of the arbitration with Burkina Faso?
- Will the newly granted stock options and performance units influence management’s strategic priorities?