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Orosur Mining profits offset by depreciation and retrenchment costs
South-American focussed gold producer Orosur Mining produced a loss in the three months leading to 31 December, as growing operating profits were wiped out by higher levels of depreciation and costs associated to staff retrenchments.
Production from Orosur's second trading quarter came in at 7,052 ounces, bringing year-to-date production to 15,677, down from the 16,802 ounces the firm posted at the same time twelve months earlier.
Operating cash costs narrowing from $914 per ounce to $867 per ounce, enabling the group was able to leave its annual guidance for the metric unchanged at $800-900 per ounce.
Orosur reported a pre-tax loss of $251,000 for the quarter, compared to a profit of $942,000 a year prior, principally due to higher depreciation and the recognition of a provision for staff retrenchments that came about after a second production deferral at its San Gregorio West (SGW) underground project, where operating profits jumped to $3.42m from $2.26m.
The AIM-listed firm had a net cash balance of $291,000 at the end of December, down from the $4.2m it had on hand at a year before, leading Orosur to cut staffing levels by 11% at the end of November 2017.
Orosur began to accelerate preparation and permitting of Veta A, a new underground project located 1.2km from its main plant on the San Gregorio mine complex, which was indicated to contain the highest-grade source of underground ore available throughout the license.
Ignacio Salazar, chief executive officer of Orosur, said, "The company is concentrating on advancing exploration in Colombia while maintaining profitability in Uruguay. We have built the SGW underground mine, entirely financed from cash from operations, while advancing exploration and development around it."
"While we are taking some tough measures to implement this plan, we are getting some initial results already and are proud to count on the support of the Uruguayan government which granted us a second, and unprecedented, annual royalty exemption," he added.
As of 1420 GMT, shares had slipped back 6.38% to 11.00p.