West Perth-based gold mining company Dominion Mining Ltd has increased its net profit by 475 per cent to $51.7 million in the 2006-07 financial year, up from its $8.9 million net profit in the previous reporting period.
West Perth-based gold mining company Dominion Mining Ltd has increased its net profit by 475 per cent to $51.7 million in the 2006-07 financial year, up from its $8.9 million net profit in the previous reporting period.
The company has issued a final dividend of 6 cents per share, bringing its total to 10 cents for the year.
The full text of a company announcement is pasted below
FY 2007 Financial Results, Production & Reserves
.. | June 2007 | June 2006 | % Variance |
Revenue (A$) | $81.8m | $68.3m | +20% |
EBITDA (A$) | $58.7m | $14.3m | +310% |
NPAT (A$) | $51.7m | $8.9m | +475% |
EPS (diluted) | 51.3c | 8.8c | +480% |
Dividend (c/share) | 10c | 4c | +150% |
Production | 108,191 ozs | 108,080 ozs | +111 ozs |
Reserves | 512,000 ozs | 279,056 ozs | +83% |
Resources | 1,090,000ozs | 374,000ozs | +191% |
2007 FINANCIAL RESULTS
Dominion Mining Limited (ASX: DOM) today announced a record $51.7 million net profit after tax for the 12 months to 30 June 2007, representing one of the strongest financial performances in its history as a listed Australian mining company. The excellent result, which included one-off items and income tax benefits totalling $29.5 million, enabled the Board to declare a final unfranked dividend of 6 cents per share increasing its full year dividend to 10 cents per share.
The net annual profit after tax, which represents a 475% increase on last year's $8.9 million profit, included a positive $10.9 million mark-to-market credit adjustment on Dominion's hedge book, a $12.7 million profit on the sale of 51% of its uranium rights to certain tenements in the Gawler Craton to ASX-listed uranium group Deep Yellow Ltd and an income tax benefit of $6.3 million.
Sales revenue increased by 20% to $81.8 million (2006: $68.3 million) with $80.7m attributable to gold sales. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 310% to $58.7 million (2006: $14.3 million) after expensing exploration and evaluation expenditure of $4.1 million and taking into account royalties paid totalling $4.1 million. Depreciation and amortisation charges totalled $14.3 million.
The bottom line profit equated to diluted earnings per share of 51.3 cents, compared with 8.8 cents last year. The final 6 cent dividend will be paid on 28 September 2007 (record date 14 September 2007).
The results were underpinned by record gold production from Challenger for the 12 months to 30 June 2007 of 108,191 ounces (2006: 108,080 ounces). Cash operating costs increased by 10% to $309/ounce (2006: $280/ounce), representing a solid achievement in the current rising cost environment in the mining industry.
Revenue from gold sales increased by 19% to $80.7 million, mainly due to the increased average price received for the year of A$744/ounce (2006: $661/ounce). The increased revenue resulted in a strong increase in the Company's Group cash and bullion position to $35.8 million (2006: $21.3 million). This comprised cash of $33.1 million and bullion (treated as a receivable in the balance sheet) of $2.7 million.
The Company remains debt free with the exception of minor hire purchase arrangements and has limited gold hedging in place. This comprises around 36,000 ounces as at 30 June 07 sold forward at an average delivered price of $729/ounce and represents 7% of current gold reserves.
RESERVES & RESOURCES
Following successful ongoing programs of underground drilling targeting the M1, M2 and M3 shoots at Challenger, Dominion recently announced a 74% increase in gold reserves to 512,000 ounces compared with the previously published figure of 293,500 ounces as at 31 December 2006. On a year-on-year basis, gold reserves have increased by 83% after taking into account the annual gold production of 108,191ounces, highlighting the success of the Company's exploration programs.
The gold resource inventory as at 30 June 2007 increased by 312,000 ounces to 1.09 million contained ounces, representing the first time in the history of the operation that resources have exceeded 1 million ounces.
Surface diamond drilling is continuing with the aim of upgrading the current inferred resource in the M1 to indicated status. The current drill hole 07CDDH0078 and the first wedge have been drilled above the M1 position, however they have made a number of significant intersections within the M2 below the current reserve.
Recent underground drilling has intersected the M3 with results that include 1.0 metre @ 5.29g/t gold, 1.0 metre @ 9.80g/t gold and 3.94 metres @ 43.64gt/t gold.
With the ongoing success of these drilling programs, the Company is confident of achieving further significant increases in the Challenger gold resource and reserve inventory. An updated reserve/resource statement is expected to be announced by the 31 December 2007.
A significant gold calcrete anomaly has been discovered on the Corona prospect in the South Western area of the Cundeelee tenement block (Tropicana belt) in Western Australia. This prospect has been partially tested by a small program of air core drilling. Significant results include 6.0 metres @ 1.50g/t gold (including 3.0 metres @ 2.55g/t gold) and 6.0 metres @ 0.37g/t gold (adjacent holes 100 metres apart). These very encouraging results will be followed up with a more intensive drilling campaign.
OUTLOOK
Commenting on the financial results, Dominion's Managing Director, Mr Peter Alexander, said: "This record financial result is an important milestone for the Company, representing one of the strongest full-year financial performances in our history."
"The combination of another great operational performance by the Challenger Gold Mine with some significant one-off items - including a positive mark-to-market adjustment on our hedge book and a $12.7 million profit from the sale of non-core uranium exploration interests - enabled us to post a record net profit," he continued.
"This excellent operational result, together with our strong balance sheet, provides a tremendous platform for Dominion to continue its solid growth path into the future."
"We are looking forward to another positive 12 months, with forecast gold production for 2007/08 of more than 100,000 ounces," Mr Alexander said. "In addition, the recently announced reserve and resource upgrade has effectively extended the mine life of the Challenger operation to more than five years at current production rates. With further reserve and resource increases anticipated from ongoing exploration, we are continuing to assess the viability of an incremental expansion of the Challenger mill."
"Subject to the outcome of our next reserve/resource upgrade, which is scheduled for December 2007, we may be in a position to expand the plant to lift production levels to a long-term level of around 125-130,000 ounces per annum during 2008," Mr Alexander commented.
"With our exploration programs continuing to deliver excellent results - both at Challenger and elsewhere within our extensive portfolio - a minimum 5-year mine life, continuing strong gold production and earnings from Challenger and the prospect of a medium term upgrade in our gold production profile, the outlook for Dominion, both for the year ahead and beyond, is very positive," he concluded.