Mincor posts loss on weak nickel price
UPDATE 2.40pm: Nickel miner Mincor Resources has been hit by the lowly price for the steel-making commodity, reporting a $22.45 million full-year loss.
The loss followed a $240,000 profit in the previous year and was achieved on revenue of $98.6 million, down 18.9 per cent on the 2011/12 figure.
Mincor attributed the loss to a 15 per cent drop in the average nickel price for the year to $7.59 a pound combined with exploration write-offs totalling $15.51 million and a small impairment charge of $2.8 million against its McMahon nickel mine.
"Notwithstanding the challenging market conditions Mincor's strong operational focus and tight cost control enabled its operations to generate healthy cash flows that were used to fund $7.5 million in dividend payments to shareholders, $18.19 million in mine capital development and $14.87 million in exploration," the company said in a statement.
Mincor said it produced 312,075 tonnes of ore at an average grade of 3.1 per cent nickel for 8637 tonnes of nickel-in-concentrate at an average cash cost of $5.34 a pound of payable nickel for the year.
Managing director David Moore said the company had been able to deliver a further 7.1 per cent improvement in cash costs at Kambalda, partly offsetting the impact of the weaker nickel price.
"Our cash cost before royalties was $5.02 a pound, beating our target for the year of $5.20 a pound," he said.
"Considering that we had already reduced cash costs by 27 per cent in the previous financial year, this represents a tremendous performance by our operational team in the face of a very challenging market environment."
Mr Moore said the low nickel price continued to make nickel mining a challenging business, however he was confident the company would manage the downturn and would be in great shape to benefit from a turnaround in the market.
Mincor said it expected to produce approximately 259,000 tonnes of ore at an average grade of 3.2 per cent nickel from its Kambalda operations for 8500-9000 tonnes of nickel-in-ore for the 2014 full-year. Cash operating costs were targeted at $5.30 a pound of payable nickel (including royalties).
The company will issue a final fully franked dividend of two cents a share in line with the previous year.
Mincor said it held $59.66 million in cash and no debt at the end of the year.
Mincor shares closed up 4.5 cents, or 6.92 per cent, at 2.40pm.
