Gold miner Amara Mining (AMA), formerly Cluff Gold, is in a transitional phase as it expands its west African production base - that included the acquisition of the Sega mine, next to its existing Kalsaka mine in Burkina Faso. So the big full-year earnings slide needs to be set against a backdrop of record exploration and capital expenditure during 2012 - management thinks that will drive annual gold production beyond 135,000oz by 2017.
Despite a 7 per cent rise in realised gold prices, Amara's revenue slumped in the year after a 25 per cent fall in production at Kalsaka. The problem at Kalsaka - the group's principal productive asset - was a 15 per cent fall in the head grade as the mine moves into old age. A $12.7m (£8.36m) reduction in cash operating costs partially offset the revenue fall, but cash profits still slipped 45 per cent to $24m. Guidance for this year of 50,000-60,000oz is broadly static on 2012. A capital expenditure charge of $73.1m for 2012 compares with $25.6m in 2011 - although the bill for this year will be more modest and should be funded from existing cash flow.
Broker Edison expects 2013 EPS of 3.2¢ (from a 0.22¢ loss per share in 2012).
| AMARA MINING (AMA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 33p | MARKET VALUE: | £55m | |
| TOUCH: | 33-34p | 12-MONTH HIGH: | 92p | LOW: 33p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 92¢* | NET CASH: | $12.2m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | nil | -0.90 | -1.10 | nil |
| 2009 | 40.0 | -35.5 | -30.3 | nil |
| 2010 | 116 | -1.0 | -4.90 | nil |
| 2011 | 122 | 25.4 | 9.40 | nil |
| 2012 | 91.3 | 8.53 | -0.22 | nil |
| % change | -25 | -66 | - | - |
*Includes intangible assets of $120m, or 71¢ a share £1=$1.52 | ||||
