Resolute posts lower profit

Perth-based Resolute Mining Ltd has announced a consolidated net profit before tax and unrealised treasury losses of $11.5 million for the year ended 30 June 2006, down 6.5 per cent from the $12.3 million posted in the previous period.

Resolute recorded a net loss after tax and unrealised treasury losses of $77.5 million after charging the change in the fair value of certain financial instruments to its Income Statement, required under the new Australian equivalents to International Financial Reporting Standards. The $114.4 million negative adjustment is expected to predominantly reverse in future reporting periods.

The company's profit before tax and unrealised treasury losses had been enhanced by a strong spot gold price, but was offset by lower head grades and higher costs at the company's Golden Pride and Ravenswood gold mines. Resolute also experienced a downturn in the gold price to $657/oz, compared to the $708/oz yearly average in 2004-05.

A higher average gold price in the half-year ended 30 June 2006 was primarily responsible for Resolute's $13.5 million profit before tax and UTL in the second half of the financial year, compared to its $2 million loss in the first half.