PERTH (miningweekly.com) – Gold miner Doray Minerals has reported a 401% increase in gross profits for the six months to December, compared with the previous corresponding period.

The net loss after tax for the period narrowed to A$219 000, compared with the net loss after tax of more than A$8-million in the first half of 2017.

Meanwhile, revenue for the six months under review was down 9%, from A$84.9-million to A$77.2-million.

“The half-year results show a marked improvement and demonstrate that we have delivered on our targets, driven by solid gold and copper production at Deflector, a focus on cost and a priority on debt reduction,” said Doray MD Leigh Junk.

Gold production during the six months under review reached 38 627 oz, with 1 295 t of copper produced at the Deflector operation, in Western Australia. For the full 2019, Doray is on track to produce between 80 000 oz and 85 000 oz of gold, and between 2 250 t and 2 750 t of copper.

Doray on Thursday reported an impairment charge of A$4.6-million on the re-evaluation of its Andy Well and Gnaweeda assets, which resulted in the net loss result.

During the period under review, Doray executed a binding term sheet with Westgold Resources to divest of its Andy Well and Gnaweeda gold projects in a deal valued at A$15-million in cash and shares, while also striking a merger deal with fellow-listed Silver Lake Resources to create a new midtier multi-asset Western Australian gold producer.

“We look forward to concluding the agreed merger with Silver Lake via a scheme of arrangement, which the independent expert concluded was fair and reasonable, and in the best interest of Doray shareholders, in the absence of a superior proposal,” said Junk.

Under the propsed merger, Doray shareholders will receive 0.6772 Silver Lake shares for every Doray share held, with Silver Lake shareholders holding a 62.7% interest in the combined company, and Doray shareholders a 37.3% share.

The merger will combine two high-grade gold operations, and will create a midtier company with a 2019 pro-forma production guidance of some 240 000 oz. The merged group will have a mineral resource base of 4.6-million ounces, with both the Deflector and Mount Monger operations offering a pipeline of in-mine and near-mine brownfield exploration targets.

Doray shareholders are expected to vote on the merger on March 22.