30th May 2018 12:29
LONDON (Alliance News) - Trans-Siberian Gold PLC on Wednesday reported a sharp decline in profit for 2017, hit by an increase in costs and currency exchange rates.
The gold ore mining company said pretax profit fell by two thirds to USD3.0 million in 2017 from USD9.3 million reported the year before, as revenue slipped 4.0% to USD43.4 million from USD45.2 million.
The company said it suffered from foreign currency exchange movements against a weak Russian rouble, as well as a USD1.9 million increase in the inventory impairment provision. Administrative expenses rose to USD7.4 million from GBP5.8 million recorded a year earlier.
Refined gold production was lower year-on-year at 33,872 ounces compared to 35,366 ounces produced in 2016. However, the price grew to USD588 from USD417.
Production of gold in dore increased by 1.3% to 36,714 ounces from 36,225 ounces the prior year, while silver in dore increased by 4.5% to 57,072 ounces from 54,595 ounces.
For the Asacha, located in the southern part of Kamchatka Peninsula, Russia, ore extracted and processed in 2017 amounted to more than 198,000 tonnes and 184,000 tonnes, respectively. The plant operated at 23% above its designed annual capacity of 150,000 tonnes and achieved 94% average gold recovery.
The average realised gold price increased by 1.0% during the year to USD1,260 per ounce versus USD1,248 the year before.
The company proposed a final dividend of USD0.021 per share, having not paid a final dividend for 2016. This, together with an interim dividend and a special dividend, took the total annual payout to USD0.107.
"In our sixth year of production, our number one priority is to enhance our existing mining operations at Asacha," said Non-Executive Chairman Charles Ryan. "At the same time, we are well positioned to exploit future growth opportunities."
In the separate statement on Wednesday, Trans-Siberian said the Asacha deposit had total mineral resources of 651,000 ounces of gold as at the end of 2017 and 1.6 million ounces of silver. The gold resource was reduced by 6.1% over the course of 2017, having stood at 693,000 ounces at the end of 2016, while the silver resource declined by 8.5% from 1.8 million ounces.
The Main zone of the deposit holds a measured resource of 172,000 tonnes of ore containing 85,000 ounces of gold and 162,000 ounces of silver, while the Main zone's indicated resource stands at 435,000 tonnes containing 299,000 ounces of gold and 933,000 ounces of silver.
The East Zone also holds an indicated resource of 3,000 tonnes holding 6,000 gold ounces and 3,000 ounces of silver.
That brings the total measured and indicated resource at the end of 2017 to 611,000 tonnes graded at 20.0 grammes per tonne gold and 56 grammes per tonne of silver, to contain 391,000 ounces of gold and 1.1 million ounces of silver.
The Main zone also holds an inferred resource of 78,000 tonnes containing 35,000 ounces of gold and 82,000 ounces of silver, while the East zone holds an inferred resource of 269,000 tonnes containing 224,000 ounces of gold and 458,000 ounces of silver.
That brings the total inferred resource at the end of 2017 to 345,000 tonnes of ore graded at 23 grammes of gold per tonne and 48 grammes of silver per tonne, containing 260,000 ounces of gold and 540,000 ounces of silver.
"The results of the annual review of our mineral resources show no material changes and confirm high grades within the in-situ resources," said Chief Executive Dmitry Khilov.
"Adjustments to our resources due to mining depletion remained the same year-on-year. Our continuing programme of work indicates that there remains notable potential for the life of the Asacha deposit," Khilov added.
Shares in Trans-Siberian were trading 1.3% higher at 37.99 pence each on Wednesday.
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