28/07/2006 - 13:59

Kagara announces $230m earnings forecast for 06-07

28/07/2006 - 13:59

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West Perth-based zinc explorers Kagara Zinc Ltd has announced a forecast EBITDA of $230 million, up from an actual $73 million last year.

Kagara announces $230m earnings forecast for 06-07

West Perth-based zinc explorers Kagara Zinc Ltd has announced a forecast EBITDA of $230 million, up from an actual $73 million last year.

The company expects to make a net profit after tax of between $35 and $38 million. The increases are the result of higher metal prices, together with a contribution from the company's recently commissioned copper mine.

 

The full announcement is pasted below

As a result of a rapidly increasing production profile and in advance of audited figures becoming available for the 2005/2006 financial year, Kagara Zinc Ltd wishes to provide shareholders with the following forecasts.

For the 2005/2006 financial year, the unaudited pre tax profit was $51.6 million (of which $36.2 million was attributable to the June 2006 quarter), which represents a 258% increase over the previous financial year. EBITDA for the year was $73 million and a net profit after tax of between $35 and $38 million is expected.

These increases are the result of higher prices for metal contained within our three concentrate products together with the contribution from the recently commissioned copper circuit at Mt Garnet which is currently being ramped up to full production.

In the 2006/2007 financial year, we expect copper production to increase by 280% from 6,574 tonnes to 25,000 tonnes, zinc production to increase by 48% from 35,143 tonnes to 52,000 tonnes and lead production to increase by 61% from 9,341 tonnes to 15,000 tonnes. The large increase in forecast copper production is a result of the copper circuit at Mt Garnet achieving a full years
production and the Thalanga plant achieving full production by November of this year.

The effect of this increased production in the 2006/2007 financial year, and assuming metal prices remain at current levels, will be to increase EBITDA from $73 million to around $230 million which will flow through to substantially increased profits over the period. More detail will be provided when audited figures for the 2005/2006 year are released later this year.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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