Russian gold mining company Trans-Siberian Gold (TSG) has generated $2.5-million in profit in 2017, a decrease from the $7-million profit reported in 2016, the owner of the Asacha gold mine, in Kamchatka, reported on Wednesday.
Revenue from the sale of 33 870 oz of refined gold and 46 121 oz of refined silver amounted to $43.4-million, compared with $44.4-million in the previous year. The Aim-listed company realised an average sales price of $1 260/oz of gold and $16/oz of silver.
TSG has recognised an additional impairment provision of $1.9-million against the ore stockpile, reflecting the difference between its expected net realisable value at a gold price of $1 297/oz and cost. The impairment provision contributed to the miner’s operating profit reducing from $11.3-million in 2016, to $4.3-million in 2017.
Higher energy and material costs, as well as the partial recovery of the Russian rouble, pushed up cost of sales by 10.4% to $30.7-million.
Administrative expenses also increased, from $5.8-million in 2016 to $7.4-million. Part of that relates to a $0.3-million expense in respect of the termination of the contract of former CFO Simon Olsen, who stepped down in June last year. Olsen, who was UK-based, was replaced by Alexander Dorogov so that TSG’s CEO and CFO are both based in Moscow.