JOHANNESBURG (miningweekly.com) – Higher gold production and improved grades in the second half of the 2015 financial year led to JSE-listed Oakbay Resources and Energy narrowing its overall losses for the full year by 84%, while its gross and operating profit swung back into the black.

Posting its maiden results since listing on the JSE in November, the company reported a total comprehensive loss of R38.6-million for the year to February 28, a significant turnaround on the loss of R236-million posted in the prior year.

Oakbay achieved gross profit of R41.8-million during the year under review, up from a loss of R64.7-million the year before, while operating profit surged to R23-million from a loss of R137-million in the prior year.

“Increased gold production and improved grades in the second half of the year reflected the benefits of recent operational actions including aggressively managing costs and improved milling capacity following the completion of the milling plant overhaul,” CEO George van der Merwe said in an update to shareholders on Friday.

Following the successful turnaround of its North West-based opencast gold operation at the Shiva Uranium mines, which mined gold as a by-product, in addition to improved cost efficiencies and increased milling capacity, revenue increased to R165-million in 2015 from R151-million the year before, with 378 kg of gold sold in the year – a 10% rise on 2014.

More than 570 kg of gold and 791 540 t of ore were milled during the year under review, a year-on-year rise of 23% and 37% respectively.

“During the year, the group successfully embarked on a programme to diversify its revenue streams from mining activities to augment the income underpin for its expansion into uranium," Van der Merwe pointed out.

“The bankable feasibility study is expected to be complete in 2016 and we anticipate the cost of further uranium development to be approximately R800-million,” he added.

While the company developed the uranium operations, it planned to seek out potential contract mining opportunities for its spare capacity amid other alternative projects.

The group aimed to initiate a capital-raising programme, while securing a long-term uranium offtake agreement.