Gold miner Perseus Mining has plunged to a $4 million interim net loss, as a decrease in gold production at its flagship Edikan mine as well as a 12.5 per cent fall in its gold sales price weighed heavily on its balance sheet.
Perseus said its revenue for the six months to December 31 came in at $135.27 million from the sale of 93,686 ounces, at an average sale price of $US1,330/oz.
A total of 46,000 ounces of gold were delivered into forward sales contracts, at an average price of $US1,259 per ounce, while the balance of the gold sales were made at prevailing spot prices.
Sales costs, including mining and processing, totalled $94.3 million, while employee salaries totalled $14.7 million, Perseus said.
In the previous corresponding period, Perseus’ revenue was around $147 million on production of 98,865oz, which produced a net profit of $33.2 million.
Costs in the half year to December 31, 2012 totalled $76.7 million, with employee salaries coming in at $10.5 million.
The company will not pay a dividend for the first half of the 2014 financial year.
Managing director Jeff Quartermaine said the half year to the end of December was particularly challenging for most gold sector players.
“In response to a falling gold price, Perseus adopted a production strategy aimed at minimising capital investment,” Mr Quartermaine said in a statement to the ASX.
“This meant that part of our mill feed for the period was drawn from existing low grade ore stockpiles in preference to targeting higher grade ore from new mining areas that required investment of significant amounts of capital to pre-strip waste.”
Mr Quartermaine said the processing of the lower grade ore resulted in lower gold production, which ended up hitting the company’s profitability and cash flow.
He said once the company started processing higher grade ore again, in accordance with its life-of-mine plans, Perseus’ financial performance should improve.
“Looking forward, given the material productivity improvements made to our operation along with a reduction in our operating cost base during the last six months, we are now well positioned for the future,” Mr Quartermaine said.
At close of trade today, Perseus’ stock was up 4 per cent, at 50.5 cents.