1st Jul 2019 11:50
(Alliance News) - China Nonferrous Gold Ltd on Monday posted a narrowed pretax loss due to trial production from its Pakrut gold project in Tajikistan and absence of a large impairment charge.
The mineral exploration firm also announced a number of loan extensions for amounts totalling USD146.5 million.
Shares in China Nonferrous Gold were down 7.4% at 4.25 pence in late morning trade.
The company's pretax loss for 2018 stood at USD4.3 million, sharply narrowed from USD15.0 million loss in 2017. A key factor in this was non repeat of the company's 2017 USD10.7 million impairment of mines under construction.
Adding to improved performance was China Nonferrous Gold's USD17.9 million of revenue, more than three times its USD5.8 million revenue in 2017. This was the result of trial production from the Pakrut project, where mine site construction was completed at the end of the year.
"Following the successful completion of infrastructure and construction works at the mine site, the Pakrut gold project entered full operation in 2019 and is currently producing at levels of 2,000 tonnes per day," said Chief Executive Yu Lixian.
Lixian added: "With the completion of mine construction and improvement of technology, the Pakrut gold mine has now entered into full production, and the annual revenue target of ore is expected to increase based on normal operations in 2019.
"The group is currently continuing to enhance its production capacity and intends to double this capacity by 2021. Whilst improving production, the group is also focusing on perfecting and improving the smelting process by reducing production costs, increasing recovery rates and improving competitiveness."
Moreover, the company announced the extension of USD146.5 million worth of loans into late 2019. The USD146.5 million was loaned to China Nonferrous Gold associate CNMC International Capitals Co Ltd and was provided by China Nonferrous Metals International Mining Co Ltd.
China Nonferrous Metals International Mining is a 38% shareholder in China Nonferrous Gold and has agreed to extend a USD120 million loan, which was repayable December 2018, to December 2019. The interest rate has been changed to 3.7% plus 6 month LIBOR from a 4% fixed rate.
The lender has also agreed to extend a USD20 million loan, which had been repayable November 2018 until November 2019. The interest rate has also been altered in the same way as the USD120 million loan to 3.7% plus 6 month LIBOR.
Further, a USD6.5 million loan of three tranches - two of which were repayable December 2017 and another repayable January 2018 - has been extended to December 2019 with the interest rate changed to 3.7% plus 6 month LIBOR from 5% fixed interest.
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