West Perth-based gold mining company Dominion Mining Ltd has announced a $17.7 million turnaround in its financial results, reporting a net profit after tax of $9 million for the year to 30 June 2006.
West Perth-based gold mining company Dominion Mining Ltd has announced a $17.7 million turnaround in its financial results, reporting a net profit after tax of $9 million for the year to 30 June 2006.
Accounting adjustments related to new Australian International Financial Reporting Standards boosted the company's reported profit.
Before these adjustments, the company reported a $12.5 million operating profit, up from the previous year's operating loss of $8.7 million.
The company had increased revenue from gold sales by 169 per cent to $67.9 million, with earnings before interest, tax, depreciation and amortisation at $26.6 million.
The full text of a company announcement is pasted below:
Dominion Mining Limited today announced a $17.7 million turnaround in its annual financial results, reporting a net profit after tax of $9.0 million for the 12 months to 30 June 2006 compared with an $8.7 million net loss last year. This result was after charging $12.3 million relating to unrealised mark-to-market hedge book adjustments and bringing to account an $8.8 million income tax benefit in accordance with Australian International Financial Reporting Standards (AIFRS).
Before these adjustments, the Company reported a $12.5 million operating profit (2005: operating loss of $8.7 million) and strong increases in underlying earnings and sales revenue - reflecting the first full year of underground gold production at its 100%-owned Challenger Gold Mine in South Australia.
Given the strong financial performance achieved in 2005/06 the directors have declared a final unfranked dividend of 4 cents per share. The record date for the dividend is 21 September 2006 and it will be paid on 3 October 2006.
Revenue from gold sales increased by 169% to $67.9 million (2005: $25.2 million). Earnings before interest, tax, depreciation and amortisation (EBITDA) was $26.6 million (2005: negative $1.7 million), after expensing exploration and evaluation expenditure of $4.5 million and accounting for royalties of $3.6 million. Depreciation and amortisation charges totalled $14.4 million. After taking into account the $12.3 million unrealised loss (mark to market) in the hedge book as well as the $8.8 million income tax benefit, the net profit after tax was $8.9 million. This bottom line performance translated to earnings per share of 9.1 cents (2005: loss per share of 10.5 cents).
The financial performance was underpinned by a 150% increase in gold production at Challenger to 108,080 ounces (2005: 43,547 ounces) at a significantly reduced average cash operating cost of A$280/ounce (2005: A$510/ounce). Gold sold for the year was 107,084 ounces (2005: 43,777 ounces) at an average received price of A$633/ounce.
The Challenger mine generated a strong net operating cash flow of $26.6 million (2005: $3.1 million) enabling the Company to repay a total of $6.5 million in debt during the year to close out its facility with ANZ Banking Group. Group cash and bullion as at 30 June 2006 increased to $21.3 million comprising cash of $19.0 million and bullion of $2.3 million.
At the 30 June balance date, Dominion's hedge book comprised 74,500 ounces sold forward under sales contracts with an average delivered price of A$662/ounce. Consequently, 73% of Dominion's gold reserves are unhedged.
