Mincor profit defies nickel slump

DESPITE the nickel price being in a global freefall, Western Australian nickel producer Mincor has declared a net profit for the 2012 financial year.
Mincor profit defies nickel slump Mincor profit defies nickel slump Mincor profit defies nickel slump Mincor profit defies nickel slump Mincor profit defies nickel slump

Earnings before interest, tax, depreciation and amortisation almost doubled to $32.4 million and while net profit after tax was only $A240,000, it was immeasurably better than the 2011 loss of $23.4 million and was achieved against a 19% drop in the realised nickel price.

Mincor said an important factors in its healthier-than-expected result was the move to owner mining at its South Kambalda operations at Miitel and Mariners, which helped reduce cash costs by 27%.

Capital expenditure on mine development for the year was $15.7 million and provided access to new high grade production sources while $12.5 million was spent on exploration with $5.4 million on its Papua New Guinea properties and the remainder at Kambalda.

Mincor has ended the financial year with $76 million in cash and says the focus is on organic growth for the current year, with its PNG joint ventures at Edie Creek, May River, Bolobip and Kubuna and near-mine exploration program at Kambalda.

Mincor managing director David Moore said he was pleased the company had been able to achieve a return to profitability and generate a strong operating surplus despite an increasingly tough operating environment for nickel miners.

"At a time when rising costs and falling prices are creating real challenges for resource companies, we have been able to maintain solid margins thanks to the successful restructuring of our Kambalda operations," he said. "This is a tremendous result and a great credit to our operating team.

"This enabled us to fund all of our capital and exploration commitments, maintain a 10-year track record of dividend payments and fund a share buy-back - all achieved while maintaining a strong balance sheet with $76 million in cash at year end and no debt..

"At the same time we have laid important foundations for the company's future growth with new discoveries at Miitel and Mariners, early exploration success at the Cassini and Mons nickel prospects, and airborne surveys and preparatory work ahead of our drilling at our key PNG projects."