14th Nov 2013 10:10
LONDON (Alliance News) - Latin American gold miner Minera IRL Ltd Thursday reported a sharp drop in revenues and profits in the third quarter as it was hit hard by the falling gold price and lower sales.
The company said it sold 6,427 ounces of gold in the third quarter, down from 7,520 ounces a year earlier, at an average price of USD1,323 an ounce, down from USD1,667 an ounce.
That caused a drop in gross profit to USD1.7 million in the three months to end-September, down from USD5.8 million a year earlier, wile revenues slid to USD8.5 million, from USD12.5 million.
"Whilst our Corihuarmi Gold Mine continues to provide good cash flow, profits have been effected by the lower gold price and declining gold production," the company said.
Its earnings were also hit by a USD12.5 million loss as it wrote down the value of its stake in Minera IRL Patagonia SA after selling a 45% stake to Compania Inversora en Minas in return for USD45 million in new funding. It swung to a net loss of USD13.9 million in the third quarter, compared with a USD1.7 million profit a year earlier.
The company currently has one producing asset, the Corihuarmi gold mine in Peru. Production was down to 6,296 ounces in the third quarter, from 7.660 ounces a year earlier.
However, it is trying to bring two new projects on line. Minera said it expects to start construction at the Don Nicholas project in Argentina in the first quarter of 2014 after obtaining financing, while talks on financing the Ollachea project in Peru are advancing.
Last month, Minera's shares fell sharply after it ended financing and potential takeover talks with LionGold Corp. The stock was down a further 10.5% at 11.75 pence Thursday morning after the results, one of the biggest fallers on AIM.
By Steve McGrath; [email protected]; @stevemcgrath1
Copyright 2013 Alliance News Limited. All Rights Reserved.
Related Shares:
MIRL.L