LONDON (Alliance News) - Highland Gold Mining Ltd Wednesday said its pretax profit almost halved in 2013 as increased production could not offset falls in the price of gold during the period.
The exploration-and-development gold mining company, co-owned by Russian billionaire Roman Abramovich and with operations in eastern Russia, said its pretax profit fell 48% to USD82.1 million in 2013 from USD158.0 million in 2012, as revenues fell 14% to USD304.2 million from USD351.8 million.
The company said its revenues shrunk as gold prices fell during the period, despite higher sales volumes of gold and gold equivalents. The firm's average realised gold price of gold and gold equivalents amounted to USD1,291 per ounce in 2013, compared with USD1,586 per ounce in 2012, a decline of 19%.
Highland Gold said that despite the gold price fall, it did not post any impairment charges on its assets but noted that its finance income fell to USD9.4 million from USD25.5 million as it reassessed the fair value of its coupon bonds and shares, and earned lower levels of interest on its deposits.
As such, the company announced a final dividend of 2.5 pence per share, making a total distribution of 5.0 pence for the year, a 36% reduction on the 7.8 pence per share given out for 2012.
The news comes after Highland Gold announced in January that its gold production increased in 2013 following increased volumes, upgrades and a new plant coming into operation.
The company said at the time that production of gold and gold equivalents rose 8% to a record 233,696 ounces in the full-year 2013 with positive production rates from its Mnogovershinnoye, Novoshirokinskoye and Belaya Gora mines.
On Wednesday, Highland Gold reiterated that its production for 2014 is expected to increase to between 300,000 and 320,000 ounces of gold and gold equivalents.
In March, the company signed a new financing agreement with Gazprombank in respect of a USD100.0 million facility with a draw-down period set until March 2016, which will be used to finance development and operating activities.
Highland Gold shares were down 0.3% to 68.07 pence Wednesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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