LONDON (Alliance News) - Metals Exploration PLC said Friday its interim loss deepened despite revenue rising on higher gold production as costs rose sharply.
For the six months ended June, Metals Exploration's pretax loss deepened modestly to USD14.0 million from USD13.3 million the year prior.
This was despite revenue rising to USD31.5 million from USD21.2 million the year before.
Profit performance was hurt by a sharp increase in cost of sales to USD34.9 million from USD21.2 million the year prior, ahead of the revenue rise, as well as a jump in finance costs to USD5.0 million from USD3.1 million the year before.
Revenue performance was boosted by an increase in gold sales to 24,941 ounces from 15,899 ounces the year prior. It was was also helped by a higher average achieved gold price of USD1,317 per ounce from USD1,236 the year prior.
"The gold production was lower than budget due to a few issues primarily around the BIOX," Executive Chairman Ian Holzberger said.
"These largely were related to external factors (electrical supply) which the company had previously identified as a key risk and had put in mitigating systems."
"It was unfortunate that as the final component was being installed, the operations suffered repeated power failures or brown outs," Holzberger added.
"This was particularly disappointing given that this occurred after significant improvements and sustained reliability was being evidenced in the BIOX systems. The company has spent significant resources to ensure that this event has minimal adverse effects in the future."
"Since these series of events, the BIOX circuit has re-activated and as of the time of this report operating at 80% of design for over 10 weeks," Holzberger continued. "Individually, BIOX reactors have operated, at various times, at 120% of the design capacity which demonstrates the capability to run consistently at design."
"It has been satisfying to see the improved performance of the gold recovery circuits and I expect this trend to continue," Holzberger added.
Shares in Metals Explorations were untraded Friday, last quoted at 1.85 pence each.
Metals Exploration (MTL)