LONDON (Alliance News) - Highland Gold Mining Ltd on Tuesday said gold production and sales at its Russian assets declined in the first half of 2018 leading to a reduction in revenue.
The gold mining company said revenue in the six months to the end of June declined slightly to USD146.9 million from USD147.2 million, hurt by lower gold sales. Pretax profit, however, rose to USD50.2 million from USD43.5 million reported a year ago on the back of lower depreciation, depletion and amortisation costs.
During the period, Highland Gold Mining said it sold 121,174 ounces of gold, down 5.7% from 128,503 ounce sold a year ago. Meanwhile, all-in sustaining costs increased by 3.4% to USD697 per ounce from USD674 per ounce seen in the first half of 2017.
At its Mnogovershinnoye mine in Khabarovsk region, Russia, the company produced 48,090 ounces of gold in the first-half, down from 50,749 ounces produced a year earlier, due to one of two SAG mill lines being out of operation following the discovery of a damaged feed trunnion.
The trunnion was replaced in March and the company said the plant is now operating at full capacity. A total of USD7.4 million was invested at Mnogovershinnoye in the first-half. This included capitalised expenditures & construction, purchase of equipment and exploration.
During the period, Highland Gold Mining said it conducted a surface drilling on the flanks of several ore bodies to identify potential new resources.
It also completed a geochemical prospecting on the greenfield Kulibinskaya and Zamanchivaya licences, located to the south-west and north-east of Mnogovershinnoye. Assay test results showed gold anomalies and were used to develop an exploration programme for the remainder of the year, the company said.
At Belaya Gora mine, located in Abyysky district, also in Russia, gold production fell 11% to 19,804 ounces from 20,033 ounces the year before, due to the water supply issues and SAG mill re-lining.
The company said it conducted a new exploration drilling during the first-half, which totalled over 7,500 metres and focussed on the Kolchansky and Zayachy prospects on the adjacent Belaya Gora flanks licence. The work is expected to be completed in the third quarter of 2018.
Meanwhile, at Novoshirokinskoye mine in Zabaikalsky region, Russia, gold production improved marginally to 61,027 ounces from 61,002 ounces the year before.
Highland Gold Mining said it commenced a new exploration drilling programme from both surface and underground late in the first-half with the aim of developing a more detailed geological model of the deposit and optimising mining activities.
The company declared an interim dividend of USD0.06 per share.
"2018 is a year in which we expect to make incremental progress in our strategy of optimising our existing mines while advancing projects in our growth pipeline," said Chief Executive Officer Denis Alexandrov.
"Our performance in the first half of the year supports those objectives, and we succeeded in meeting our production targets despite operating challenges at each of our mines," added Alexandrov.
Shares in Highland Gold Mining were trading 1.8% lower on Tuesday at 134.21 pence each.
