LONDON (Alliance News) - Serabi Gold PLC Friday said it delivered a meaningful profit in the first half of 2016 after revenue experienced a large lift and its gross margin improved on the back of higher prices and lower costs.
The Brazilian gold miner said revenue soared to USD25.9 million from USD11.2 million in the previous year as the miner achieved an average gross margin of USD271 per ounce compared to USD215 per ounce last year, pushing up its gross profit to USD6.7 million from USD2.9 million.
Depreciation costs were slightly higher in the period at USD3.6 million compared to USD2.7 million last year, but pretax profit was still significantly higher than last year.
Pretax profit in the first six months of 2016 was over 20.0 times larger at USD1.6 million from the almost neglible USD76,897 profit in the first half of 2015.
The average gold price in the alf was USD1,216 with all-in sustaining cash costs of USD945 per ounce compared to last year when the average price was USD1,182 with costs of USD967 per ounce.
Also boosting revenue was a rise in production, whiich came in 25% higher at 19,667 ounces from the 15,626 ounces produced last year.
Gold production over the full year is expected to be 37,000 ounces, suggesting production will be around 12% lower in the second half than the first. The all-in sustaining cash cost is expected to average USD950 to USD985 per ounce, implying costs will also be higher in the second half, likely as a result of lower production.
The cost guidance was revised following the strengthening of the Brazilian real against the dollar.
Serabi shares were down 4.5% to 5.85 pence per share on Friday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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