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Herencia running out of capital after Picachos option falls through

Herencia ResourcesPlc said April 28 that it is running out of working capital after itsjoint venture partner Next Minerals dropped out of an agreement to acquire the Picachos copper project in Chile.

Herencia has withheld a US$290,000 option payment due on thePicachos license but will only have sufficient working capital to survive untilearly or end-May, depending on whether it will renew the Picachos option.

"If the Picachos option is not renewed, the company maylose all rights to the asset but would have additional working capital to last untilapproximately the end of May 2016," the company noted. "If the Picachosoption is renewed, the Company would only have sufficient working capital to lastuntil early May 2016."

The company noted that it will not be able to continue to tradeafter that time and is exploring alternative options.

Under the February deal, Next Minerals was looking to acquirethe project by making staged payments of up to US$5.1 million, of which Herenciawas due to receive US$2 million by April 30.