St Barbara swings on gold profits

GOLD player St Barbara is boasting a 90% increase in net profit for the 2012 financial year and has more than doubled cash flow from its Western Australian operations.
St Barbara swings on gold profits St Barbara swings on gold profits St Barbara swings on gold profits St Barbara swings on gold profits St Barbara swings on gold profits

Net profit after tax jumped to $A130.2 million, up from $68.6 million in FY11, thanks to increased gold production from the Leonora and Southern Cross projects and higher gold prices.

Cash flow from operations was up from $103 million reported in FY11 to $221.8 million in FY12.

St Barbara's revenue increased by 47% to $549 million versus $360 million generated last financial year.

Despite the strong profits overall, the company's high cost Southern Cross operations are expected to be placed on care and maintenance in the December quarter and therefore forecast to produce only 20-25,000 ounces gold at a cash operating cost of $1420-$1450 per ounce for FY13.

Down the road at the Leonora operations, the Gwalia mine is forecast to produce 175-190,000ozpa at $650-700/oz and the King of the Hills mine is scheduled to produce 55-60,000ozpa at $840-$870/oz.

St Barbara blamed increasing operating costs on industry conditions, including the carbon tax which came into effect on July 1.

"Reflecting industry wide conditions, cost forecasts for FY13 are impacted by general inflation and an estimated impact from the carbon tax," St Barbara said.

Meanwhile, the much-awaited completion of the $556 million takeover by Allied Gold is scheduled for completion on August 30.

Once combined, St Barbara said the two forces would form a gold producer with the largest gold reserves and resources portfolio in the mid-tier Australian Securities Exchange-listed gold sector.

Combined forecast production for FY13 from both companies was tipped to be 435,000oz gold.

As of June 30, St Barbara had a balance of $185.2 million cash with initial interest bearing a debt of $4.2 million.

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