Western Areas has defied challenging conditions in the nickel sector to deliver an operating profit, but a near-$100 million write-down in the value of its exploration tenements meant the miner booked a massive loss for the year to June 30.
The miner today reported a $94 million net loss in financial year 2013, driven down by a $99.7 million write-down in the value of its exploration tenements, confirming what it had flagged to the market late last month.
Not including the impairment, Western Areas said its underlying net profit was $5.6 million.
Revenue came in at $306.5 million, down 7 per cent on the previous financial year.
The company said it will not pay a final dividend.
Managing director Dan Lougher said it was pleasing that the company had remained profitable at an operating level in the face of the falling nickel price and the high Australian dollar experienced over the year.
“Outside of the nickel price challenges, this year would rate extremely well for operational excellence,” Mr Lougher said in a statement.
“We met or exceeded all guidance metrics including record sales and we did so safely.”
Mr Lougher said the company’s primary focus in FY2014 would be on its flagship Forrestania nickel project near Kambalda.
The company is expecting to mine between 25,000 and 26,000 tonnes of nickel in ore over the financial year, at cash costs between $2.80 per pound to $2.90/lb.
Western Areas said it would spend around $45 million on mine development and $15 million on exploration in FY2014.
The company’s stock has dropped sharply on the ASX this morning, trading down 11.2 per cent at 10:50AM, WST, at $2.93.
