LionGold reports $11.5m Q3 loss
Fall into the red due largely to slump in other income to just $2m from $21.9m
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Fall into the red due largely to slump in other income to just $2m from $21.9m
Andrea Soh
14 February 2014
LIONGOLD slipped into the red in the third quarter of its 2014 financial year, as a plunge in other income affected its bottom line.
For the three months ended Dec 31, the firm made a net loss of $11.5 million, compared with a net profit of $7 million a year earlier.
Revenue dipped 2.6 per cent to $34.2 million.
While its gold mining division recorded higher revenue of $14.9 million, up from $12.7 million a year earlier due to an increase in the grade and quantity of gold sold, this was partially offset by its office equipment manufacturing operations in China which saw revenue fall $3.1 million.
The latter, a legacy from the days when the firm was an office equipment maker known as Asia Tiger Group, was affected by a drop in the sale of products with higher value and the selling price of certain products, as well as the depreciation of the US dollar against the renminbi. It contributed 10.9 per cent to the firm’s revenue in the 2013 financial year.
The main pressure on LionGold’s bottom line, however, came from the dive in other income, which fell to $2 million year on year, from $21.9 million.
The firm made an unrealised loss on financial assets at fair value of $400,000, compared with a gain of $2 million a year earlier, and recorded a decrease in gains on its equity interest in a subsidiary as well as an acquisition.
LionGold produced 8,559 ounces of gold in the quarter, compared with 13,846 ounces in Q2 and 9,431 ounces in Q1.
This was produced at a higher all-in sustaining cost of A$1,454 (S$1,652) an ounce, as the exceptional production in the previous quarter dropped. The gold was sold at A$1,361 an ounce.
As at the third quarter, LionGold held 7.5 million ounces of gold resources, 810,000 ounces of which were classified as reserves.
For the nine months, LionGold’s revenue rose 26 per cent to $114.6 million. It made a loss of $53.8 million, compared with a profit of $627,000 a year ago.
Amid volatile gold price which affect its revenue - gold spot price fluctuated between a low of US$1,186.68 and a high of US$1,352.63 during the quarter - the management is continually reviewing its operational process and managing factors such as its mining techniques, scale of operations and minimum cut-off ore grade to improve its overall financial performance, said LionGold.
It is looking to grow both organically and through acquisitions, with its projects in Ghana, Bolivia and Australia to bolster growth from mid-2014.
“Going forward, Signature Metals (in Ghana) will commence its tailings purchase and processing agreement, while Minera Nueva Vista (in Bolivia) begins its mine development in 2014 and production in late 2015/early 2016,” said CEO Nicholas Ng.
The counter closed 0.2 of a cent lower at 13.3 cents yesterday.