SINGAPORE (Feb 26): CNMC Goldmine Holdings reversed out of the red in the 4Q ended December with earnings of US$1.3 million ($1.7 million), compared to a loss of US$1.9 million in the corresponding quarter a year ago.
This brings earnings for the full year to US$2.8 million in FY17, some 69.4% lower than FY16 earnings of US$9.1 million.
The swing back to profitability in 4Q was led by a decline in management remuneration and employee benefits resulting from the reversal of performance bonus accruals.
CNMC reported income of US$0.5 million in key management remuneration from the reversal of bonus accruals in 4Q17, compared to expenses of US$1.0 million a year ago.
Employee benefits expenses fell 35.7% to US$0.5 million, from US$0.7 million a year ago.
However, revenue continued to fall for CNMC in 4Q17, slipping by 6.2% to US$4.9 million amid below-average production at its flagship Sokor gold mine in Malaysia’s Kelantan state and a drop in sales volume.
CNMC says production has been affected since 4Q16 due to lower ore grades in certain parts of Sokor.
The company’s all-in cost of production in 4Q17 amounted to US$1,236 per ounce of gold, slightly higher than the US$1,228 per ounce a year ago.
In 4Q17, the group recorded net other operating income of US$0.82 million, compared to net other operating expenses of US$2.31 million in 4Q16.
This was due to an unrealised foreign exchange gain of US$0.70 million in 4Q17, mainly arising from MYR-denominated cash deposits on the appreciation of MYR against USD, compared to an unrealised foreign exchange loss of US$2.29 million a year ago.
As at end December, cash and cash equivalents stood at US$19.5 million.
CNMC has proposed a final dividend of 0.2 cents per share for FY17.
Last year, it had paid total dividends of 0.934 cents per share, comprising an interim dividend of 0.2 cents, a final dividend of 0.2 cents, and a special dividend of 0.534 cents per share.
“Barring any unforeseen circumstances, we expect our performance in 2018 to improve once our CIL (carbon-in-leach) plant enters into full commercial production. This facility will be a major growth catalyst for us this year and beyond. We have stockpiled high grade ores for processing at the CIL plant,” says Chris Lim, CNMC’s chief executive officer.
“In addition, we also plan to develop a new source of revenue and earnings by monetizing the silver, lead and zinc uncovered in the course of our exploration work at Sokor,” he adds.
Shares of CNMC last closed at 24.5 cents on Friday.
