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Friday, 21 December 2012
Orvana Minerals swings to adjusted Q4 profit as revenues jump, expects higher 2013 output
Orvana Minerals Corp. (TSE:ORV) reported an adjusted fourth quarter profit today, as revenues more than quadrupled from the same period last year.
"Our financial performance greatly improved in the fourth quarter, ending the 2012 fiscal year on a positive note," said president and CEO, Bill Williams.
"With the UMZ operation stabilized and EVBC Mine recovering from the ground stability issues, in addition to getting the shaft operational, we expect fiscal 2013 to be very successful both operationally and financially."
For the quarter that ended September 30, the multi-mine gold and copper producer reported a net loss of $2,007, compared to a profit of $8,037 in the fourth quarter of fiscal 2011.
On an adjusted basis, excluding the unrealized loss from the evaluation of its derivative instruments, and the one-time expense from converting an outstanding debenture relating to a royalty, the company swung to a profit of $12,325 or 9 cents per share.
This compares to an adjusted net loss of $4,852, or 4 cents per share, in the year-ago period.
Revenues rose to $50,608 from $10,576 in the fourth quarter of last year.
Orvana's primary asset is the El Valle-Boinas/Carles (EVBC) gold-copper mine in northern Spain. It also owns and operates the Don Mario Mine in Bolivia, processing its copper-gold-silver Upper Mineralized Zone (UMZ) deposit, and is advancing its Copperwood copper project in Michigan, USA.
In the fourth quarter, production increased substantially as Orvana's output included 15,155 ounces of gold, 4 million pounds of copper, 277,081 ounces of silver, and 636,126 pounds of lead.
It sold 18,604 ounces of gold, 5.3 million pounds of copper, 289,356 ounces of silver and 636,126 pounds of lead.
The average realized price for gold sold during the period was higher at $1,666 an ounce, versus $1,479 a year earlier, while the average price for copper improved to $3.50 from $1.93 a pound.
Cash flows provided by operating activities, a key metric in the industry, grew substantially to $29,617 from $91 a year earlier.
The company has seen a number of management changes over the past year, including a new CEO in December 2011, a CFO and Bolivia country manager in June, a COO in August, and a Spain country manager in September this year.
Looking ahead, the company's short term focus is to optimize operations at its EVBC mine in Spain and the UMZ mine in Bolivia to generate increased operating cash flows in order to pay down debt, as well as potentially advance the development of its Copperwood project in Michigan.
Fiscal 2012 guidance for production was 60,000 ounces of gold, 16.53 million pounds of copper and 700,000 ounces of silver.
Mostly due to the delays related to the commissioning of the EVBC shaft and other operational issues at the EVBC mine, production for the year fell short for gold and copper, at 55,929 ounces of gold annd 15.4 million pounds of copper. Silver production of 716,280 ounces was higher than expected, however.
For its next fiscal year, production of 75,000 ounces of gold is expected, along with 18 million pounds of copper and 850,000 ounces of silver.
Its long term goal is to use future cash flow to build long-term value through organic growth and possibly through strategic acquisitions focused mainly on advanced-stage gold and copper properties.
The company ended the fourth quarter with cash and equivalents of $13,200.
Earlier this month, the Michigan Department of Environmental Quality (MDEQ) granted the discharge permits for its Copperwood mine in the state's Upper Peninsula. The National Pollutant Discharge Elimination System permits are for the treated sanitary and process wastewaters at the proposed mine.