Kingsgate shares stumble on results
PERTH (miningweekly.com) – The share price of ASX-listed gold miner Kingsgate Consolidated dropped by nearly 23% on Thursday as the company announced a 532% decline in its profit, swinging to a loss of A$323.7-million for the full year ending June.
MD Gavin Thomas noted that the lower realised gold price, lower gold sales and industrywide cost pressures had a negative impact on the company’s underlying earnings.
He added that the lower gold price and changes to mine operating plans also resulted in an impairment charge of A$356.8-million to the carrying value of Kingsgate’s assets, particularly the Challenger mine.
Group gold production for the full year decreased by 4% to 199 897 oz on the previous year, as the Challenger mine delivered 24% less ounces. This resulted in an 8% decline in revenue, with Thomas reporting that the company achieved A$329.3-million in revenue.
Earnings before interest, tax, depreciation and amortization was down to A$115.8-million in 2013, from the A$168.6-million reported in the previous financial year.
Looking ahead, Thomas noted that gold production was expected to be between 190 000 oz and 210 000 oz during 2014, with the Challenger operation expected to deliver between 70 000 oz and 80 000 oz of these ounces, as a new mine plan is implemented.
Kingsgate was trading at a high of A$1.99 a share, down from a high of A$2.64 a share.
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