LONDON (Alliance News) - Amara Mining PLC Tuesday said it made a pretax loss in its first half as it struggled with the decrease in gold price and incurred significant costs on developing operations.
The Africa-based gold mining company, with operations in Burkina Faso, Ivory Coast and Sierra Leone said it made a pretax loss of USD16.4 million for the six months ended June 30 compared to a pretax profit USD5.5 million the previous year.
The company said sales fell 54%, to USD22.1 million from USD47.5 million as the company chose to sell only 59% of the gold it produced in the period in the face of volatile gold prices.
Amara Mining said total gold production was down 30% to 19,414 ounces from 27,695 ounces but the company was confident it would still reach its full year guidance of 50-60,000 ounces.
Cash costs at the company also increased by 31% to USD1,357 per ounce from USD1,038 per ounce as its Kalsaka mine in Burkina Faso approached the end of its life, and the company moved its drilling rig to its newly acquired Sega quarry, also in Burkina Faso.
The company said it has implemented a strategic cost-cutting and efficiency programme, with cuts to be realised in its third quarter. The company wants to decrease costs by 25% by the start of 2014 compared to 2012 and staff redundancies and salary reductions are expected to bring USD2.1 million of savings per annum.
The company was positive about its exploratory projects. Amara's Baomahun project in Sierra Leone delivered strong results, and continued optimisation work is expected for completion in the company's fourth quarter. Amara also said it was positive on its Yaoure project in Ivory Coast, with a preliminary economic assessment also to be the completed in the company's fourth quarter.
"At the halfway point in the year, Amara has delivered two of its three objectives for 2013, with the completion of the Baomahun Feasibility Study and updated Mineral Resource at Yaoure, and we are well on track to successfully integrate Kalsaka and Sega in Q3," Chief Executive Peter Spivey said in a statement.
Amara shares were down 7.7% to 18.00 pence putting it among the biggest AIM losers in early trading Tuesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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