JOHANNESBURG (miningweekly.com) - Gold miner Saracen Mineral Holdings on Tuesday reported a big jump in half-year profit to A$46-million, on the back of record production in the six months ended December 31.
This strong performance is said to be a direct result of the investment that Saracen has made in exploration and development, which has led to the ASX-listed miner building a 2.1-million-ounce reserve base and growing production to 300 000 oz/y.
Net profit after tax rose by 209% in the six months to A$46-million, which came on the back of a 32% jump in sales revenue to A$245.6-million and increased gold sales of 154 119 oz.
The net profit after tax included a A$10.6-million profit on the sale of the King of the Hills project, 28 km north of the town of Leonora in the Eastern Goldfields region of Western Australia, in October last year. Underlying net profit after tax increased 149% to A$37.2-million in the period under review.
Depreciation and amortisation increased to A$46.3-million, which was driven by the increase in overall production and the amortisation of the Thunderbox Zone A, which forms part of a gold mine 41 km south-east of Leinster, Western Australia, and deferred mining expenditure, which was triggered by the actual strip ratio falling below the average life-of-mine strip ratio.
Earnings before interest, taxes, depreciation, and amortisation (Ebitda) rose by 123% to A$103.4-million, which the company said reflected the increased production and an improving cost profile, supported by a healthy Australian-dollar gold price.
Cash and equivalents rose to A$82.9-million at December 31, which increased from A45.2-million six months earlier, with no debt. This was, however, after spending A37.6-million during the period on growth capital and exploration.
The improved financial results, the company noted, were achieved despite a lower average received gold price of A$1 591/oz.
At December 31 2017, Saracen's total cash, bullion and investments were A$82.9-million, with an available liquidity position of A$233-million.
At February 16, Saracen's hedge book comprised 265 343 oz at an average delivery price of A$1 654/oz.
"These results show that we are reaping the rewards of our substantial investment in growth, which is now delivering record reserves, production and financial performance," MD Raleigh Finlayson commented on the six months' performance.
He further added that the company was continuing to invest in exploration and development, which it was confident would deliver further growth in the company's inventory and production.
"Recent drilling results across the portfolio show Saracen is well-positioned to continue mining at Carosue Dam and Thunderbox for at least the next ten years," he noted.
The Carosue mine is south of Laverton, in Western Australia.