Aurora beats climate

Perth-based Aurora Gold Limited’s Mt Muro gold and silver mine in Indonesia overcame another year of climatic extremes to post a lower $14.5 million operating profit.

This was reduced by a combination of slightly higher operating costs, a lower realised gold price and hedging losses.

Aurora’s operating profit before tax and abnormals was $17 million, compared with $24.4 million previously.

Aurora managing director Ian Burston said the result still reflected a strong overall performance by the group during 1998, with gold equivalent production increasing by 6 per cent to 255,603 ounces at Mt Muro mine.

This was achieved despite smoke haze and drought conditions associated with the El Nino weather phenomenon earlier in the year, and heavy unseasonal rains during the second half which affected mining, development and exploration schedules.

“Aurora also took several important steps towards laying the foundations for long-term growth with the Toka Tindung project in Sulawesi achieving continuing exploration success, and the acquisition of the Morobe gold project in Papua New Guinea,” Mr Burston said.

The group’s sales revenue increased 12 per cent to $143.3 million on gold sales of 179,772 oz and silver sales of 4,085,047 oz.

Cash operating costs increased from US$161/oz in 1997 to US$170/oz in 1998 due to a combination of higher stripping ratios and higher site administration charges.

This still positions Aurora as one of the lower cost producers.

The result included an abnormal $4.7 million profit on the sale of Aurora’s interest in the Rosemont gold project in Western Australia, although this was balanced by the write down of $3.6 million worth of ore stockpiles at Mt Muro to net realisable value.

Cash on hand at year end de-creased to $24 million, mainly as a result of the Morobe acquisition and exploration and development at Toka Tindung and Tondano.