Falling costs and a 20 per cent hike in production from its Toka Tindung mine enabled Indonesian gold miner Archipelago Resources (AR.) to report creditable earnings growth, despite the precipitous fall in spot prices.
With production weighted towards the second half, Archipelago turned in 72,636 ounces (oz) of gold equivalent during the first half, with 41,061oz attributable to the second quarter. As a result, Archipelago is well on track to meet full-year guidance of 140,000-155,000 ounces. The company should also report at the lower end of its $620-680/oz (£406-442/oz) cash cost projections after reporting cash costs of $618/oz (net of silver credits and royalties). This compares favourably with cash costs of $753/oz in the first half of 2012. The improvement was largely due to a steady fall in the strip ratio (the amount of waste material removed) at Toka Tindung, together with a rise in the head grade for gold from 2.29 grams to 2.69 grams per tonne.
Archipelago was able to introduce an interim dividend on the back of a 44 per cent rise in operating cash flow to $40.7m, despite a comparative fall in the average received gold price from $1,661/oz to $1,492/oz.
ARCHIPELAGO RESOURCES (AR.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 40.5p | MARKET VALUE: | £233m | |
| TOUCH: | 40-41p | 12-MONTH HIGH: | 67p | LOW: 38.5p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 45¢ | NET CASH: | $2m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 97 | 28.6 | 2.80 | 0.0 |
| 2013 | 111 | 31.5 | 3.30 | 0.5 |
| % change | +14 | +10 | +18 | - |
Ex-div: 11 Sep Payment: 27 Sep *Archipelago has announced that the 2012 full-year dividend of 1.25p a share and a special dividend of 1p are payable on 30 August 2013 and go ex-dividend on 31 July. £1 = $1.54 | ||||
