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PanAust profit drops 25% despite higher sales

PanAust profit drops 25% despite higher sales

Photo by Bloomberg

21st August 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Metals miner PanAust has reported a decline in its interim after-tax net profit, despite higher sales revenue during the first half of the year.

Net profit after tax for the six months to June declined to $32.4-million, compared with $43.4-million reported in the previous corresponding period, while sales revenue increased by 4%, from $326.1-million reported in the first half of 2013, to $338.5-million.

PanAust MD Gary Stafford said that the financial performance reflected strong production and cost performances in the face of weaker commodity prices.

“The company’s operations delivered strong cash flow despite the lower average prices for all metals, and the outlook is for improved operating performance in the second half of 2014.”

He noted that the company’s operations were on target to meet the upper end of its production guidance for both copper and gold, which had been set at between 65 000 t and 70 000 t of copper in concentrate, and between 160 000 oz and 165 000 oz of gold, as well as around 1.2-million ounces of silver in concentrate.

“PanAust has invested significant capital at the Phu Kham operations over the past two years and it is starting to reap the benefits through higher processing rates and improving metallurgical recovery rates which, together with lower sustaining capital, are resulting in improving cash flow.”

PanAust has previously estimated that gold production from its Phu Kham operation, in Laos, would increase in 2015 on the back of higher grades, while copper output would increase in 2016 on a revised life-of-mine schedule for the KTL satellite pit, which would feed ore to the Phu Kham concentrator from late in 2015.

“Scheduled increases in the average copper head grade at Phu Kham over the next several years and reduced waste stripping are expected to result in further improvements in cash flow as copper production increases to around 90 000 t and gold production to around 80 000 oz in 2018 and 2019,” said Stafford.

He noted that the inclusion of the ore sourced from the KTL deposit would further enhance production and cash flow.

The KTL project would require a capital investment of some $52-million, and first ore from the deposit has been targeted for 2016.

Meanwhile, Stafford on Thursday also said that earnings before interest, tax, depreciation and amortisation (Ebitda) for the full year were likely to reach between $200-million and $225-million, as the first-half Ebitda tracked ahead of guidance at $124.4-million, despite the lower realised copper prices.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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