West Perth-based Agincourt Resources Ltd has recorded a half year loss after tax of $1.9 million, compared to the previous corresponding period's $1.3 million profit.
West Perth-based Agincourt Resources Ltd has recorded a half year loss after tax of $1.9 million, compared to the previous corresponding period's $1.3 million profit.
The company made a net profit before tax of $1.1 million, however an income tax expense of $3 million drove NPAT down.
The company said that due to available tax deductions, no income tax would actually be payable with the large income tax expense resulting from the gain realised on the Nova Energy transaction.
Revenue from ordinary activities of $41.5 million was derived from the sale of 60,179 ounces of gold at an average gold price of $611 per ounce and from the $3.8 million gain on the Nova Energy transaction.
Nova Energy listed on the ASX in August last year and issued 32.5 million shares (57 per cent of issued capital) to Agincourt for uranium and infrastructure rights. An IPO was undertaken raising $6 million to conduct a scoping study and to explore other projects in WA and SA.
Looking forward, Agincourt is looking to pursue increased gold production and the reduction of operating costs.
The edited announcement is below:
Results for Half-Year Ended 31 December 2005
The Directors of Agincourt Resources Ltd (Agincourt) present the consolidated results for the half-year ended 31 December 2005 and include management's commentary on the results for the purpose of the Appendix 4D.
SUMMARY OF ACHIEVEMENTS FOR THE HALF-YEAR
During the half-year several significant milestones were achieved:
- Successful ASX listing of the uranium company, Nova Energy Ltd (Nova) in which Agincourt owns 57% of the issued capital. This has a current see through value of ~ $0.40 per Agincourt share;
- Acquisition of Consolidated Minerals Ltd's gold interests in Brazil, Victoria and WA and on-ground exploration work commenced in Brazil within two months;
- Ore production commenced at the Williamson open pit on Lake Way, the first new open pit at the Wiluna Gold Mine for 15 years; and intensive underground and regional exploration programs were maintained at the Wiluna Gold Mine with expenditure of $3.3 million.
FINANCIAL
The Company today announced a consolidated net operating profit before tax for the half-year ended 31 December 2005 of $1,137,000. The income tax expense for the half-year was $2,998,000 resulting in an operating loss after tax of $1,861,000.
However, due to available tax deductions no income tax will actually be payable. The large income tax expense results from the gain realised on the Nova Energy transaction.
Revenue from ordinary activities of $41.5 million was derived from the sale of 60,179 ounces of gold at an average gold price of $611 per ounce and accounting for the gain on the Nova Energy transaction ($3.8 million). A disciplined approach to amortisation of underground capital has resulted in an increase in the underground capital amortisation rate resulting in a high amortisation charge for the period. This increase together with $2.3 million of open pit pre-stripping costs amortised has seen the amortisation expense increase to $9.6 million from $2.8 million for the corresponding period last year.
Net cash for the group, including cash equivalents (i.e. gold bullion) held at the end of the half-year was $19.8 million which includes $4.8 million in the 57% owned Nova Energy.
OPERATIONS
During the half-year 60,179 ounces of gold were poured by treating 609,693 tonnes of ore at an average grade of 3.82 g/t and a recovery of 80.6%. Gold was produced at an average cash cost of $481 per ounce and an average
realised delivery price of $611 per ounce.
EXPLORATION
During the half-year, exploration expenditure was $3.3 million focusing predominantly on the in-mine deposits of Calais, Woodley and Woodley North and the oxide resources near the Williamson open pit including Williamson South and Carroll Prior.
In February 2006, a 5,000 metre diamond drilling program commenced at the Andorinhas project in Brazil.
CORPORATE
The Company completed several important corporate transactions during the period.
On 23 August 2005 Nova Energy was listed on the Australian Stock Exchange at $0.40 per share. Nova Energy issued 32,500,000 shares (57% of issued capital) to Agincourt for uranium and infrastructure rights. An IPO was undertaken raising $6 million to conduct a scoping study on Nova Energy's Lake Way and Centipede uranium deposits and to explore other projects in WA and SA.
In September 2005 the Company acquired two entities from Consolidated Minerals Ltd for 2,470,000 Agincourt shares and $169,000 which contain gold projects in Brazil, Victoria and Western Australia. On ground exploration was commenced at the Andorinhas gold project in Brazil and drilling started in February 2006.
On 4 October 2005 Macquarie Securities managed a placement of 11,000,000
shares at $1.48 per share to local and international institutional investors raising $16.2 million.
At the end of the half-year, the Company had 157,887 ounces of gold contracted on a Flat Forward basis at A$601 per ounce with monthly deliveries varying in accordance with anticipated production levels to July 2007. The marked to market value of these contracts at 31 December 2005 was negative $20 million using a spot gold price of A$704 per ounce.
OUTLOOK
Agincourt continues to pursue increased gold production and the reduction of
operating costs. To this end the commissioning during the half-year of two additional gas generators has virtually eliminated the use of more expensive diesel for site power generation.
Feasibility studies are being undertaken on known gold resources to maximise
financial margins at the Wiluna Gold Mine. Aggressive exploration both underground and for oxide resources continues to bring successful results. The diamond drilling program commenced in February 2006 at the Andorinhas project in Brazil is targeting additional gold resources to move that project toward mine development.
After enduring disappointing reconciled head grade through the plant in the first stage of the Williamson open pit, there was a marked improvement in February 2006 to 2.0 g/t, against an average grade of 1.6 g/t in the December 2005 quarter (a 25% improvement). It should be noted that the Williamson open pit within the Lake Way system has been subjected to three cyclonic events since January 2006 and has received 4 times the average rainfall for this period. The pit and haul road causeway have very successfully repelled water ingress, with vehicle access being maintained throughout. However the weather conditions experienced at the site has resulted in a total of 23 days without ore production from within the pit, as normal clean up operations were completed. As a result of the increased moisture and less tonnes being available, crusher throughput has been lower. Twenty three percent (23%) less tonnes of oxide ore have been processed so far this quarter accumulating to deferred production of approximately 3,400 ounces.
Underground ore production is expected to return above forecast grade for the remainder of the financial year with tonnes hauled being in line with expectations. The Williamson open pit continues to improve, with increased tonnes and grade expected for the remainder of the project. This scenario is projected to result in a lift as in gold production during the fourth and subsequent quarters.
