JOHANNESBURG (miningweekly.com) – Russia-focused gold miner Highland Gold on Monday reported lower half-year profit, as the stronger rouble and lower average grades at its Belaya Gora mine, in the Khabarovsk region, reduced earnings.
Earnings before interest, taxes, depreciation and amortisation fell from $79.20-million in the first half of 2016 to $73.25-million in the first half of 2017.
The earnings were achieved on revenue of $147.18-million, which was broadly in line with the previous corresponding period’s revenue. Gold revenue amounted to $86.4-million and concentrate revenue to $59.9-million.
The company sold 128 503 oz of gold and gold equivalent, compared with 127 697 oz in the first half of 2016.
Cost of sales increased by 15.2% to $66.8-million and total cash costs increased by 14.7% to $509/oz. Cost of sales were influenced by a 2.3% increase in overall inflation, a 13% rise in energy prices and a 17.8% appreciation of the rouble against the US dollar. Labour costs also increased by 14% as a result of the stronger currency.
All-in sustaining costs increased by 10.7% to $674/oz.
Net profit for the first half totalled $25.9-million, a decrease of 30% on the $37.1-million of the corresponding period of 2016. Net profit was influenced by the higher costs of sales, an impairment loss and higher tax expenses.
CEO Denis Alexandrov said Highgold had achieved its operational plans for the first half of 2017, despite the reduced earnings.
In the first half of 2017, the Mnogovershinnoye, Novoshirokinskoye and Belaya Gora operations delivered a combined output of 131 784 oz of gold and gold equivalent. In the first half of last year, the miner produced 128 671 oz.
The miner is aiming to produce between 255 000 oz and 265 000 oz this year.