Bauba's full-year earnings fall on regulatory delays
Diversifed mining and exploration company Bauba Resources' basic earnings per share (EPS) and headline earnings per share (HEPS) decreased by 53.1% year-on-year for the financial year ended June 30, as a result of administrative delays in the processing of an amended water use licence application by the Department of Water and Sanitation and in the approval of amendments to the Moeijelijk mine's environmental authorisation by the Department of Mineral Resources and Energy.
These delays resulted in the loss of two months of opencast production and three months of wash plant concentrate sales, the JSE-listed company said on Wednesday.
EPS and HEPS for the year ended June 30 were 4.73c, compared with the EPS and HEPS of 10.09c reported for the 2018 financial year.
The company, which recently changed its name from Bauba Platinum to Bauba Resources, said the chrome ore market had been weak during the financial year, with chrome ore prices for 44% metallurgical concentrate having averaged $187/t, compared with $222/t in the prior year.
This, together with a higher volume of lower-grade underground development tonnes being processed through the wash plant, negatively impacted on Bauba's gross profit margin, which decreased from 65.2% in the prior financial year to 37% in the period under review.
The lower grades and lower wash plant yields are expected to continue until April 2020, when the proportion of stoping material to development material improves.
Meanwhile, Bauba's revenue increased by 29% year-on-year to R302.12-million for the full-year, boosted by a foundry chrome commodity purchase contract entered into by Bauba in February.
While Bauba expects global market uncertainties to continue having a negative impact on chrome ore pricing in the short term, it believes its sales of premium speciality chrome ore concentrates to "cushion" its future profit margins.
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