LONDON (Alliance News) - Rambler Metals & Mining PLC Wednesday said its financial performance was worse in the second quarter than it was in the first, but said it should deliver its full year production guidance as it is expecting an improvement in the second half.
Rambler shares were trading down 20% to 3.41 pence per share on Wednesday.
Rambler, which owns projects in Newfoundland and Labrador in Canada, said revenue was lower in the six months to the end of January but still reported a narrower pretax loss that amounted to CAD1.5 million compared to the CAD5.5 million loss booked a year earlier.
Revenue dropped to CAD19.5 million from CAD22.8 million, pushing its gross profit down to CAD1.1 million from CAD3.0 million.
However, that was offset by lower administrative costs and a smaller foreign exchange loss than a year ago, alongside a CAD1.7 million gain on financial instruments compared to the CAD2.6 million loss a year earlier.
That gain represents the difference between the estimated commodity price the company would achieve for the copper and gold concentrate stored in its warehouse and the actual price it achieved once it was sold.
Norman Williams, the chief executive and president of the company, said Rambler is on track to deliver its full year production guidance of between 4,500 to 6,000 tonnes of copper concentrate, 5,500 to 6,500 ounces of gold concentrate and 42,000 to 57,000 ounces of silver concentrate.
That guidance for 2016 is being driven by the incorporation of the Lower Footwall Zone at the Ming mine in Canada back in July.
If Rambler delivers copper concentrate production at the lower end of its guidance, it would represent a 5% year-on-year fall whilst delivering production at the top end of guidance would represent a 27% increase from last year.
If Rambler delivers its gold concentrate production guidance this year, then that would mean production would be between 3% to 22% higher from last year whilst delivering its silver concentrate guidance would represent between a 6% and 44% lift year-on-year.
Breaking down its first half results, Rambler saw revenue decline to CAD8.3 million in the second quarter from the CAD11.2 million generated in the first. That led Rambler to make a CAD1.5 million post-tax loss in the second quarter compared to the CAD364,000 profit booked in the first quarter.
Rambler's performance was significantly better in the first quarter compared to the second because sales were higher, prices were considerably better and cash costs were a lot lower.
However, the company said the throughput at the mill will increase, allowing production to rise in the second half of the year.
"Revenues are down slightly from the previous quarter mainly due to a reduced copper grade and lower copper price realised during the quarter. With a continued focus on cost control, evident by the reduction in costs year to date, we anticipate returning a stronger financial performance in the second half of the fiscal year," said Williams.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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