Doray Minerals Records Profit Growth of 263%
The company's Deflector project is aimed at removing ‘single-asset risk’, as the mine produces gold, copper and silver ores with a 6-year initial mine life.
The local gold producer Doray Minerals Limited (ASX:DRM) released an financial results for the first half of FY16, showing revenue growth of 22% while its gross profit jumped 121%.
Production Expanded 20%
Production for the six months ending December 2015 totalled 47,197 ounces, which is a 20% increase over the pcp. Net cash flow from operations expanded 18% to 32.2 million dollars, underpinned by improved mining methods at one of its primary mine sites. The company achieved an All-In Sustaining Cost (AISC) of A$1,073/oz for the period. The average gold price received was A$1,533/oz.
The resultant net profit after tax grew 263% to 14.5 million. Subsequently, the miner’s earnings per share jumped 117% to 5.2 cents per share. Doray Minerals attributes the drop in oil prices to have a significant impact on its diesel input costs.
The company stated that the Andy Well project is the highest grade gold operation in Australia. Doray Minerals has also acquired Deflector Gold project in Western Australia which has been fully funded through debt and equity. This project is aimed at removing ‘single-asset risk’, as the mine produces gold, copper and silver ores with a 6-year initial mine life.
Doray Minerals’ Managing Director, Mr. Allan Kelly stated that the company is set to move into the next phase of growth: “The first half sees us on track to meet the upper end of our production guidance of 78-85,000 ounces, the third consecutive year we have outperformed the BFS forecast of 74,000 per annum, whilst the significant increase in earnings and profit sees us outperforming some of our largest peers in the sector on a per-capita basis.”
Mr. Kelly also stated that the company is currently the highest grade and one of the highest margin producers in Australia, and said that he expects further growth in production and profit margin after the development of its Deflector Gold Project, which is set to commence production in mid-2016.
Despite the positive announcement, DRM has declined 5.4% to $0.87 (as at 10:28 AM AEDT).
Author: Kaivalya Kandarpa
Mar 15, 2016
Kaivalya is an equity analyst and a client advisor at Wise-owl. She specialises in fundamental and technical analysis for large and mid-cap companies. Having completed her bachelor's degree in Business Administration majoring in Finance, Kaivalya has a comprehensive understanding of international stock market movements. She tracks local and overseas markets and compiles analytical reports for various industries.