Focus releases FY11 results

THE BOURSE WHISPERER: Australian gold producer Focus Minerals has announced a record full-year Revenue and Net Cash from Operating Activities, which it said will position the company for strong growth.

In the 2001 financial year (FY11) Focus increased its annual revenue by 39 per cent to $102.8 million, compared to 2010 financial year (FY10) revenue of $73.7 million.

Net Cash from Operating Activities increased by 11% to $30.3 million (FY10: $27.8 million), and total gold production jumped by 17% to 72,830 ounces (FY10: 62,117oz).

During the recently completed financial year Focus increased gold sales by 16.2% to 72,721 ounces of gold (FY10: 62,294oz) at an average price of $1,391 per ounce (FY10: $1,197/oz).

Focus’ Net Profit After Tax for FY11, however, was down to $7.6 million compared to $10.9 million for the same period last year.

The company attributed the increase in the average cost of production and the decrease in NPAT to significantly increased levels of mine development expenditure, in particular at The Mount underground and Tindals Open Pit operations.

It also listed increased exploration expenditure and the impact of mill upgrades as mitigating factors.

The company highlighted significant developments it had achieved in FY11 to include:
–    Commencement of ore production at Tindals Open Pit operations;

–    Commencing ore production at The Mount underground operation;

–    Achieving its first full year of ore processing at the Three Mile Hill plant;

–    An increased commitment to exploration spending to $23.9 million (FY10: $6.3 million);

–    The discovery of a new gold camp at Treasure Island gold project;

–    Record production from the Tindals Underground operation increasing 29 per cent to 61,248 ounces (FY 10: 47,516oz); and

–    Significant increase in scale of operations through the acquisition of Crescent Gold.

“FY11 was a transformational year for Focus Minerals,” Focus Minerals chief executive officer Campbell Baird said in the company’s announcement to the Australian Securities Exchange.

“We will now go about capitalising on our production capability after establishing a very solid platform for growth. The best is very much still ahead.”

The company said its successful commencement of new open pit and underground mining operations in the second half of FY11 will be followed by ramping up production at its Coolgardie operations.

The company’s acquisition of Crescent Gold will enable to increase total gold production during FY12, which will allow it to capitalise on high gold prices.

“At the start of FY11 we had just one operating mine,” Baird explained.

“By the end of FY11 we had three mines with production commencing at The Mount underground and the Tindals open pit operations.

“With the recent addition of Crescent’s Laverton gold project open pit operations, we now have four operating gold mines.”

Baird said with its developing presence in the Coolgardie area, and its new presence in the Laverton area, Focus has a combined JORC resource base of 4.3 million ounces of gold and will produce more than 200,000 ounces of the yellow metal in the 2012 calendar year.

“FY12 will be a year of growth as we get our new open pit and underground operations up to full production, maximise higher-grade throughput at the Three Mile Hill plant, optimise performance and grow production at the Laverton gold project and continue our accelerated exploration program to increase resource and reserve ounces,” he said.