Full-Year Profit and Update
ASX Announcement & Media Release
06 September 2001
During the year ended 30 June 2001 the benefits of the investment and hard work of the last few years have begun to emerge. Both the gold and coal businesses have made very significant advances and are on track to more than double combined revenue in the 2001-2002 year.
Gympie Gold made a consolidated after tax profit of $6.5 million for the year to 30 th June 2001. Consolidated profit before tax was $8.1 million ($6.0 million in 1999-2000) and included $7.7 million resulting from the sale of a 10% joint venture interest in the Southland Colliery..
Background to this result is summarized as follows:
- Gympie Eldorado posted a pre-tax profit of $3.9 million and achieved a cash
operating surplus of $8.4 million ($4.6 million in 1999-2000) from production
lifted by 30% and from a cash operating cost for the year of $A330 ($US180) per
ounce of gold produced.
- Gold reserves and resources have been expanded to 234,000 oz and 675,000 oz
respectively (30 June 2000 197,000 oz and 571,000 oz). Reserve drill-out at the
Lewis Mine has confirmed that production will commence in the Inglewood N3 Block
in the second quarter of 2001-2002 as planned.
- Gold exploration has provided an abundance of opportunity which has led us
to double the exploration budget. The Company will, during 2001-2002 tackle a
range and scale of targets which is unprecedented in modern activity at Gympie
during the past 20 years. These already-drill-intercepted targets include new
Stockwork zones near the Monkland and Lewis Mines as well as shallow
mineralisation in the Mary River basin areas of the Gympie Goldfield.
Illustrative maps are attached.
- The new Lewis Mine represents a very significant change in production
capacity at Gympie Eldorado – it can handle up to 2 million tonnes per
annum of material compared to 300,000 tonnes per annum at the Monkland;
- Southland Coal recorded a profit before tax of $6.6 million, which included
the impact of the temporary disruption to production caused by the failure of
the previous contract operator; it also reflects the profit of $7.7 million
resulting from the sale for $11 million of a 10% joint venture interest in the
colliery to the new contract operator Thiess.
- Coal production at Southland recommenced In April and by June the mine was
consistently producing at the planned rate of 1.5 million tonnes per annum.
Production since restart is approximately 500,000 tonnes, completing the
extraction of the first half of longwall panel SL2. Sales for September and
October will be serviced from inventory of 100,000 tonnes as planned while the
longwall unit is relocated to the second half of SL2.
- Over the next three years it is planned to raise Southland’s
extraction rate to above 2 million tonnes coal per annum. An illustrative plan
layout is attached.
- Average coal product prices in $US are up over 20% for the selling year
which started April 2001. In addition, the $A has depreciated substantially
against its US counterpart and deliveries into our current $A1.00:$US0.63
hedging contracts should be completed during the third quarter of
- Gympie Gold Gemstone, for use in gold gemset jewellery featuring our gold
- in- quartz specimen stone, started as an experiment but has now become a small
established business paying its way and with high growth prospects. Sales since
start-up in early 2000 have exceeded $1 million and for June were about
- Safety performance at each operation is accordance with industry standards
as illustrated by a lost time injury frequency rates this year of under 10.
- New site enterprise agreements were introduced at both operations in the
past six months, reinforcing our philosophy of continuous improvement in safety
and in the flexibility of work practices. Gympie Eldorado also won the 2001
Excellence in Training Metalliferous Mines award from the Queensland Mining
Industry Training Advisory Board.
- The Company continues to abide by standing policy to hedge product revenues
in $A to support cost commitments of about one year for coal and up to five
years for gold. The Company considers some hedging as necessary insurance and we
are not subject to margin calls.
Full details can be obtained in the following downloadable files:
ASX Announcement [ pdf ]