PERTH (miningweekly.com) - Nickel miner Western Areas has seen its net profit for the first half of the 2013 financial year decline significantly on the back of depressed nickel prices.
The miner reported on Friday that net profit after tax for the first six months of the year had reached $2.1-million, compared with the $16-million reported in the previous six months, and the $24.1-million reported in the previous corresponding period.
Besides the deteriorating nickel price, its net profit was also impacted on by a A$4.4-million impairment charge, following the company’s exit from the Sandstone joint venture with Troy Resources.
Earnings before interest, tax, depreciation and amortisation also reached $61.6-million during the interim period, compared with the $96.6-million reported in the previous corresponding period.
MD Dan Lougher said on Friday that, despite the challenging environment, Western Areas had remained profitable throughout the nickel price cycle.
“Production at the Forrestania operations is travelling very well, which has led to the increase in our production guidance for the full year. Looking to the second half of the year, the company wants to maintain the strict cost control which achieved unit cash costs remaining consistent at A$2.69/lb in concentrate, despite the completion of the low-cost Spotted Quoll openpit and the ramping up of the new underground operations at Spotted Quoll.”
Lougher added that the Forrestania project would remain the company’s core project and would be its primary focus for its growth path, including allocation of the majority of the 2013 exploration budget.
Western Areas was expected to produce some 27 000 t of nickel in ore, and some 25 500 t of nickel in concentrate, at a unit cash cost of A$3/lb for the full year.