Few bright spots in last-minute rush of results from gold miners
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It’s been a mixed bag for gold stocks in the last week of lodging half-year reports — with more losers than winners despite the precious metal’s rising price.
The gold price has climbed to over $US1340 ($1733) from just over $US1050 in December 2015.
Beadell Resources (ASX:BDR) was the worst performer, tumbling to a loss of $101.2 million in 2017 from a net profit of $22.3 million in the prior year.
The share price plunged 18.3 per cent to 9.4c after shareholders took a look over the numbers on Thursday.
Perth-based Beadell’s main project is the Tucano gold mine in Brazil.
The key factors weighing on the company’s bottom line were lower gold production and sales, higher costs due to the strengthening of the Brazilian real against the Aussie dollar and bigger write-downs.
Troubled producer Blackham Resources (ASX:BLK) also slipped into the red. The company’s loss from continuing operations for the second half of 2017 was $14.4 million.
Shares were unchanged at 4.7c on Thursday afternoon.
Blackham, which began commercial production at its Matilda-Wiluna mine in Western Australia at the start of 2017, has been bogged down with problems including missed production targets and high costs.
“Production and mill feed head grade was hampered by 43 per cent of mill feed being sourced from low grade stockpiles,” Blackham told investors.
But the company says it is now accessing high-grade ore allowing it to reach record monthly production of 6498 ounces and a low stripping ratio.
This has helped cut its all-in sustaining costs to $1158 per ounce in January from $2063 per ounce in the second-half.
Hedging not always a win
Proving that hedging is not always beneficial to a company’s bottom line, Millennium Minerals (ASX:MOY) has slipped to a deficit of $5.6 million for 2017, from a $17.1 million profit a year earlier.
Shares dropped 7.7 per cent to 21.5c.
Contributing to its weakened financial state was a $1.5 million unrealised loss on gold forward contracts and a $1.1 million impairment relating to the relinquishment of tenements.
Millennium’s flagship asset is its Nullagine mine in the East Pilbara region of Western Australia.
Dominican Republic-focused producer PanTerra Gold (ASX:PGI) has widened its loss by 47.3 per cent to $10.2 million for 2017.
Shares slumped 7.9 per cent to 3.5c on Thursday.
Difficulties in reprocessing the metallurgically complex Las Lagunas gold tailings led PanTerra to book a combined depreciation, amortisation and impairment charge of US$21.7 million.
The company revealed late last year that it has put its Las Lagunas plant up for sale after failing to win support from the local government for its future plans.
Those actually making money
Philippines-focused Medusa Mining (ASX:MML) is demonstrating how you make money in gold by turning a $US41.8 million loss into a $US14 million profit in the last six months of 2017.
The company’s bottom line was buoyed by a 30 per cent increase in production from the Co-O mine and a 36 per cent increase in sales combined with a slightly higher gold price.
The good result, however, wasn’t enough to keep shares from closing down 5.4 per cent at 43.5c.
Meanwhile, Excelsior Gold (ASX:EXG) swung to a profit in the last half of 2017, news that led shares up 2 per cent to 5.1c.
The company reported a net profit after tax of $9.3 million, up from a loss of $2.2 million in the prior corresponding period.
The company completed the processing of the last of its stockpiles from the Zoroastrian Central open pit at the Kalgoorlie North project in Western Australia in September.
The pit was the primary ore source for the operations through to September, when the current pit design was completed and mining suspended.
The processing of the ore allowed Excelsior to wipe off its debt and outstanding liabilities and left it with just under $7 million in the bank at the end of 2017.