Kambalda nickel producer Mincor Resources NL posted a first half net profit of $10 million, achieved on nickel sales which have risen nearly 50 per cent on the previous corresponding period.
Kambalda nickel producer Mincor Resources NL posted a first half net profit of $10 million, achieved on nickel sales which have risen nearly 50 per cent on the previous corresponding period.
Below is the full announcement:
Kambalda nickel producer Mincor Resources NL (ASX:MCR) today announced a strong half year profit result for the six months to December 2005, and re-affirmed its commitment to shareholder returns by doubling its interim dividend to 2 cents per share.
The Company reported a net profit after tax for the half-year of $10 million (Dec 2004: $10 million), after writing off regional exploration expenditures of $2 million. Gross revenues were strong at $79.6 million (Dec 2004: $55.4 million).
Mincor's profit was achieved on sales of 6,754 tonnes of nickel in concentrate as well as by-product copper and cobalt. This represents an increase of nearly 50% over the December 2004 half-year sales of 4,514 tonnes nickel in concentrate. The main contributors to production and profits were Mincor's Miitel and Redross Mines, both of which had an excellent half year.
The increase in gross revenues was generated by sharply increased nickel production brought about by the successful completion of Mincor's Nickel Expansion Strategy. This has allowed the Company to maintain near-record levels of profit despite the generally lower nickel prices realised during the half year, as well as lower nickel grades and continued cost pressures.
Mincor's Mariners Mine reported an operational loss of $2 million for the half year, due to the high cost of rehabilitation in the old 07 ore body, as previously reported. However this is expected to turn around in the second half of the year as the 07 rehabilitation is now complete and production has commenced from the new 08 ore body.
Rising costs impacted on capital expenditures, which consequently remained at a high level for most of the half year, with capital and development costs of $14.7 million funded entirely from the Company's operational cash flow. Mincor has budgeted a further $8.5 million in capital expenditure for the remainder of the financial year (excluding exploration).
The Company's exploration expenditure of $4.7 million resulted in the discovery of the South Miitel mineralisation, with an initial resource of 258,000 tonnes @ 3.98% nickel outlined by the end of the half year. Exploration expenditure within the Kambalda Nickel District continues at a high level. In addition, new exploration fronts have been opened elsewhere in Western Australia and the Northern Territory, targeting zinc, lead, tungsten and uranium.
Mincor's Managing Director, Mr David Moore, said the Company was pleased to have maintained near-record levels of profit during a period of volatile nickel prices.
"We remain on track to produce our budgeted 13,000 tonnes of nickel metal in concentrate for the financial year." he said. "With all our mines in production, our attention is increasingly focused on our next phase of growth, which will be driven by well-funded and carefully targeted exploration that will, we expect, deliver significant rewards in due course."
Mincor is debt free and has paid dividends consistently since 2003. The Company operates the wholly-owned Miitel, Redross, Mariners and Wannaway Nickel Mines in the Kambalda Nickel District of Western Australia, and has produced over 45,000 tonnes of nickel metal in concentrate since commencement of production in 2001.
