PERTH (miningweekly.com) – Despite beating production targets, nickel miner Mincor Resources reported a total net loss after tax of A$34.26-million for the full year ended June, compared with a profit of A$1.85-million in the previous financial year.

The net loss included a A$7.76-million write-off on exploration, as well as a noncash impairment charge of A$18.15-million.

Mincor produced 8 623 t of nickel-in-ore for the full year and sold 7 513 t for gross revenue of A$85.68-million. This was compared with the A$109.67-million in revenues achieved in 2014.

Cash costs for the year were also higher, at A$5.93/lb, compared with the A$4.96/lb achieved the year before, as a result of lower mine grades in the second half of the financial year.

As a result of the sharp decline in nickel price experienced during the year, as well as the higher cash costs in the second half of the year, earnings before interest, taxes, depreciation and amortisation were down to A$7.3-million, compared with the A$31.52-million reported in 2014.

“While the sharp fall in nickel prices this year has taken its toll, our decision to step-up our exploration commitment during the year has delivered a range of tremendous growth options,” said Mincor MD David Moore.

“This, combined with the operational restructure implemented at our existing operations, has ensured that Mincor is in the best possible position to weather the current situation and reposition for the future.”

Mincor in April launched a revised mining strategy designed to protect its operational capability and ore reserves through the price downturn, while optimising short-term cash flows and preparing for a transitional period of suspended production, if necessary, during which Mincor’s resources would be focused on exploration and development of its suite of growth projects.

As part of this strategy, it also stopped capital development at both its Mariners and Miitel mines, resulting in some 88 redundancies.

The company expected to produce between 2 000 t and 3 000 t of nickel-in-ore for the six months to December 31, subject to the nickel price. Production would remain under review and the company could choose to lower, raise or suspend production entirely.

In the second half of the 2016 financial year, Mincor could choose to keep the mines offline while finalising feasibility studies on its new growth projects, which would have the capacity to rapidly increase production towards a rate of between 10 000 t/y and 15 000 t/y of nickel-in-ore, should the nickel price allow.

“We see the coming year as a transitional period for Mincor, during which we move from our long-standing operations at Miitel and Mariners towards a new phase of growth, underpinned once again by Miitel, now augmented with Burnett, and lifting production through the development of new mines at Durkin North and Cassini,” said Moore.

“Much does depend on the nickel price, but I am confident that, as it returns to fair value, we will be lifting our production into a tail wind of rising prices, from an expanded reserve and re-set cost level.”