LONDON (Alliance News) - Trans-Siberian Gold PLC shares fell Monday, despite the company saying it swung to a pretax profit in 2014 after revenue increased and it significantly improved its margin by slashing operating costs to offset the fall in gold and silver prices.
The Russian gold miner swung to a pretax profit of USD1.3 million in 2014 from a USD16.5 million loss in 2013 on the back of higher revenue and better margins. Revenue was USD46.2 million with costs coming in at USD31.6 million compared with revenue of USD44.3 million and costs of USD46.4 million in 2013.
Trans-Siberian's margin improvement was driven by a 42% decline in cost of sales per ounce of gold and as its cash cost per ounce sold fell 42.4%, partially offset by weaker gold and silver prices.
Administrative expenses fell to USD5.6 million from USD6.8 million, offset by finance expenses rising to USD3.3 million from USD3.2 million and a USD485,000 foreign exchange loss related to the depreciation of the Russian rouble in the second half of 2014 compared with a USD1.3 million gain a year earlier.
Gold production rose 21.6% to 39,089 ounces and silver production grew by 14.3% to 44,610 ounces. Increased production was also enhanced by a 22% rise in gold grades to 7.68 grammes of gold per tonne from 6.29 grammes of gold per tonne. Silver grades also improved to 13.46 grammes per tonne from 10.45 grammes.
Gold prices averaged USD1,256 per ounce in 2014 with silver averaging USD18 per ounce, falling from an average of USD1,402 per gold ounce and USD24 per silver ounce in 2013.
Trans-Siberian shares were down 4.4% at 11.00 pence Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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