26/09/2008 - 06:53

Bass Metals delivers maiden net profit

26/09/2008 - 06:53

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Emerging Perth-based base metals company Bass Metals Ltd has confirmed a maiden $1.78 million net profit for fiscal 2008 financial, underpinned by strong high-grade production from the Que River operation in Tasmania.

Emerging Perth-based base metals company Bass Metals Ltd has confirmed a maiden $1.78 million net profit for fiscal 2008 financial, underpinned by strong high-grade production from the Que River operation in Tasmania.

Managing director of the listed company Mike Rosenstreich said the profit, which compares to an operating loss of $1.3 million in the 2007 financial year, was a strong result in a relatively difficult operating environment.

"This maiden profit result for Bass Metals is a terrific outcome, with our moderately scaled - but very high grade - Que River operation generating positive cash flow to fund ongoing exploration," he said.

"This was a strong performance by the company in light of the recent cost increases and weakness in metals prices. It highlights the outstanding growth potential for Bass Metals once we crank-up the bigger scale Hellyer/Fossey project."

The Que River Mine generated a gross profit of $2.2 million from ore sales revenue of $9.4 million, excluding gains from derivatives. This translated into a net profit after tax for Bass Metals of $1.8 million, equating to basic earnings of 1.8 cents per share.

Mr Rosenstreich said ore grades being recovered from Que River were significantly higher than expected.

"For the first three months of the 2009 financial year we have mined and delivered ore with grades in excess of 30 per cent combined zinc and lead, with strong silver and gold credits. The Que River Mine - particularly the PQ pit - is currently generating twice as much ore as we predicted at significantly higher grades, and this trend is expected to continue," he said in a statement.

Ore sales for the year averaged $247/t ore sold, at an operating cost of $188/t, resulting in an operating margin of 31per cent over costs. The net gain from derivative financial instruments was $1.4 million, equating to $38 per tonne of ore sold giving a total margin over costs after hedging gains of 52 per cent.

"Bass Metals is in a strong financial position, with high-grade production funding a very exciting exploration program," Mr Rosenstreich said.

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