Stormy weather washes away profits at Alkane Resources
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Shares in miner Alkane Resources jumped 5 per cent in afternoon trade after reporting higher revenue and cash flow.
But the impact of bad weather at its Tomingley gold mine in central west New South Wales resulted in a net loss.
The $29 million loss followed a $40 million write-down due to “significant and prolonged impact of weather on operations and performance of the Tomingley Gold Operations and revisions to the life of mine plan”.
Despite this, Alkane (ASX:ALK) delivered a 7 per cent rise in revenue to $117.8 million, while cash from operations increased 46 per cent to $54.75 million thanks largely to the Tomingley project.
Cash and bullion on hand increased to $44.9 million and profit before tax and non-recurring items from Tomingley Gold Operations was $17.1 million.
Despite “significant impact by rain events” in the first half, Alkane said production and costs at Tomingley Gold Operations were within guidance after a second half recovery.
Production guidance for 2018 is 65,000 to 70,000 ounces at a cost of $1100 to $1200.
Shares in Alkane were last trading 4 per cent higher at 38c.