18/08/2009 - 14:30

Western Areas reports $35m loss

18/08/2009 - 14:30

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West Perth-based nickel miner Western Areas has announced a $35 million loss in the year to June 30 as a result of weak nickel prices, delayed sales and continued investment in its expanding nickel operations.

Western Areas reports $35m loss

West Perth-based nickel miner Western Areas has announced a $35 million loss in the year to June 30 as a result of weak nickel prices, delayed sales and continued investment in its expanding nickel operations.

The net loss lessened from $54.9 million FY08 to $35.2 million.

Western Areas managing director, Julian Hanna said major progress was made in exploration, mineral resources, mine development, ore production and infrastructure.

Writing in the annual report, Mr Hanna said the company began mining its second mine at Spotted Quoll, completed the nickel concentrator at Cosmic Boy and secured new contracts BHP Billiton and Jinchuan Group of China.

However, a sharp fall in the price of nickel impacted on the company's revenue, halving in price to $US5.90 per pound for 2008-09 from $US12 per pound for the year 2007-08.

Mr Hanna said the nickel price was the single biggest factor in the $35 million loss.

He said the second factor was the lack of nickel sales between February and May, the period between the terminations of Norilsk's offtake agreement and the beginning of BHP Billiton's offtake agreement.

The company expects strong cash flows from its Flying Fox and Spotted Quoll mines in the next finanical year now that the nickel price has settled to around $US8.80 per pound.

At AEST1618, Western Areas shares were off 41 cents, or 7.1 per cent, to $5.37 after falling as low as $5.36.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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