CNMC strikes gold in Q2 with record highs

An aerial view of a part of the CNMC goldmine in Kelantan. The company said yesterday that it will focus on increasing production and improving operational efficiencies to keep costs low.
An aerial view of a part of the CNMC goldmine in Kelantan. The company said yesterday that it will focus on increasing production and improving operational efficiencies to keep costs low.BT FILE PHOTO

Both revenue and net profit soar on increased production, sales and higher bullion prices

CNMC Goldmine struck the jackpot in the second quarter with record highs for both revenue and net profit since it began production in July 2010. Its output of 9,807 ounces in the three months to June 30 was also a quarterly high.

Earnings came in at US$4.7 million (S$6 million), up 30.9 per cent from the same period a year earlier while revenue rose 34.6 per cent to US$12.62 million, boosted by increased production, sales and higher bullion prices.

The average price of gold for the second quarter was US$1,287.2 per ounce, up 8.1 per cent on the same period last year.

Prices were driven by expectations that the United States Federal Reserve will hold back on further interest rate hikes while Britain's decision in June to leave the European Union prompted investors to flock to gold as a safe-haven asset.

Earnings per share for the quarter came in at 1.16 US cents, up from 0.88 US cents for same period a year earlier, while net asset value per share rose from 8.22 US cents as at Dec 31 to 10.07 US cents as at June 30 .

The company said yesterday that it will focus on increasing production and improving operational efficiencies to keep costs low.

  • AT A GLANCE

    NET PROFIT:

    US$4.7 million (+30.9%)

    REVENUE:

    US$12.62 million (+34.6%)

It credited its newly refurbished facility in Sokor, Kelantan, which resumed operations in April this year, for contributing to the record high production.

The company has also set its sights on acquiring more mining projects.

Chief executive Chris Lim said in a statement: "One of our immediate priorities is to complete the due diligence for the proposed acquisition of adjacent-situated Pulai Mining, which will expand our portfolio as it has licences to explore and mine for not just gold but also iron ore and feldspar.

"We believe this asset will add a lot of value to CNMC once we get it off the ground."

CNMC has signed a non-binding letter of intent to acquire 51 per cent of Pulai Mining, a Malaysian company authorised to mine for gold, iron ore and feldspar in Kelantan. The size of its concession area is almost four times that of the company's existing flagship Sokor gold field project, also in Kelantan.

It will increase its first interim tax-exempt dividend by 11.1 per cent to 0.2 cent a shares, up from 0.18 cent a share a year earlier.

CNMC shares closed up 1.5 cents at 52.5 cents yesterday.

A version of this article appeared in the print edition of The Straits Times on August 11, 2016, with the headline 'CNMC strikes gold in Q2 with record highs'. Print Edition | Subscribe