11th Aug 2016 11:32
LONDON (Alliance News) - Stratex International PLC Thursday said the Altintepe gold mine generated almost USD33 million in revenue in the first half of the year, but said none of those funds have been distributed, leaving Stratex with no booked revenue and a wider loss.
Stratex shares were down 9.8% to 1.89 pence per share on Thursday.
The company holds a 45% stake in the Altintepe mine in Turkey alongside its local partner Bahar Madencilik. The operation booked revenue totalling USD32.7 million in the first half of 2016 through the sale of gold and silver, with 19,467 ounces produced in the six-month period.
The mine is aiming to produce 30,000 ounces over the whole of the year, suggesting production will decline slightly in the second half compared to the first.
Total operating costs at the mine remain on budget at USD560 per ounce, excluding working capital and closure costs, providing a healthy margin at current gold prices, with spot gold trading at USD1,346 per ounce on Thursday.
Exploration is continuing at the mine, as is construction of the phase two leach pad, which should be completed sometime in November.
Although the operation has sold a significant amount of gold in the first half, none of the funds have been distributed yet, meaning Stratex didn't book any revenue in the first half, causing its pretax loss to widen.
"The board of Altintepe Madencilik is currently considering the longer-term future of the mine and the optimum means to provide for, or fund, future capital expenditure, including a provision for ultimate closure and restoration, which was always to be financed out of cash flow," Stratex said.
"Once the longer term planning of the mine has been fully evaluated and costed, to allow an estimate of distributable cash flow, distribution of net cash can be initiated on the accelerated payback basis of 80% to Bahar and 20% to Stratex until Bahar's pre-production costs are repaid. Thereafter, net cash distributions will be made 55% to Bahar and 45% to Stratex," the company added.
As a result, Stratex booked a pretax loss in the first half of 2016 totalling GBP2.0 million, widening from the GBP1.4 million loss last year, after a slight rise in administration costs and a GBP2.2 million net loss was booked from the sale of a stake in a non-core asset. The loss from the divestment was partly mitigated by a GBP1.4 million profit in the period from Stratex's equity investments, compared to a GBP235,573 loss a year earlier.
By Joshua Warner; [email protected]; @JoshAlliance
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