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LONDON (Alliance News) - Anglo Asian Mining PLC shares dropped heavily in opening trade on Tuesday after the company swung to a loss in the first half on the back of a big rise in costs which offset increased revenue in the period.
Shares in the group were down 23% in early trading to 8.50 pence, making it the worst performer in the AIM All-Share index.
The group said its made a pretax loss of USD7.5 million in the six months to June 30, compared to a USD4.2 million profit a year earlier. Revenue in the period was up, rising to USD32.7 million from USD27.6 million last year, but this was offset by a near doubling in the group's cost of sales in the period, which rose to USD33.5 million from USD18.3 million last year.
The company said the rise in the cost of sales in the period was attributable to higher processing costs after the commissioning of its agitation leaching plant in June 2013 and a rise in the cost of fuel.
Production for the group in the period was up from its flagship Gedabek gold, silver and copper mine, located in Azerbaijan. Gold production in the period rose to 27,054 ounces, against 17,497 ounces last year, while silver production increased to 21,924 ounces against 10,661 ounces in 2013.
Copper concentrate production also jumped at the site, rising to 646 dry metric tonnes against 285 last year.
Sales volumes improved over the period, but the average selling price per ounce for gold was down against the year before. In the first half, the group sold 23,545 ounces at an average of USD1,297 per ounce, against 14,229 ounces sold at an average of USD1,561 per ounce last year.
The company said the half year had proved difficult for the company, adding it was disappointed to have posted a loss given the strong production figures in the period. It said the second half is currently looking more positive and said it is focusing on trying to control costs at its agitation leaching plant.
The group said it expects the second half to be an improvement on the first and expects full year gold production to hit 62,000 ounces and copper production to hit 750 tonnes.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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