Gold miner CNMC swings to US$1.29m profit for Q4

CNMC Goldmine Holdings chief executive officer Chris Lim. The company is seeking dual primary listings on the Hong Kong bourse.
CNMC Goldmine Holdings chief executive officer Chris Lim. The company is seeking dual primary listings on the Hong Kong bourse.PHOTO: THE BUSINESS TIMES

SINGAPORE - CATALIST-listed CNMC Goldmine Holdings, which is seeking dual primary listings on the Hong Kong bourse, on Monday (Feb 26) announced a net profit of US$1.29 million for the fourth quarter ended Dec 31, 2017, recovering from a net loss of US$1.94 million in the year-ago period.

This came amid below-average production at its flagship Sokor gold mine in Malaysia's Kelantan state, where production has been affected since the last quarter of 2016 due to lower ore grades in certain parts of Sokor. In the fourth of 2017, CNMC sold its gold bars at a higher average price of US$1,343.36 per ounce, compared to US$1,283.29 a year ago, but revenue still declined by 6.2 per cent to US$4.86 million due to a drop in production and sales volume, said the company.

Nevertheless, the bottom-line was boosted by a decline in management remuneration and employee benefits resulting from the reversal of performance bonus accruals. CNMC said it also received an uplift from an unrealised foreign exchange gain of US$0.70 million as the Malaysian ringgit, in which the bulk of its nearly US$19.49 million cash is denominated, strengthened against the US dollar.

Earnings per share for the quarter was 0.44 Singapore cent compared to a loss per share of 0.66 Singapore cent a year ago.

For full year FY2017, CNMC saw net profit drop 69.4 per cent of US$2.78 million from US$9.09 million in the previous year. Turnover dropped 44.8 per cent to US$19.15 million as a result of lower production and sales volume.

This translated earnings per share of 0.94 Singapore cent for FY2017, compared to 3.07 Singapore cents for FY2016.

Mr Chris Lim, CNMC's chief executive officer, said: "Barring any unforeseen circumstances, we expect our performance in 2018 to improve once our CIL (carbon-in-leach) plant enters into full commercial production. This facility will be a major growth catalyst for us this year and beyond. We have stockpiled high grade ores for processing at the CIL plant. In addition, we also plan to develop a new source of revenue and earnings by monetizing the silver, lead and zinc uncovered in the course of our exploration work at Sokor."

CNMC began building the CIL plant to process Sokor's higher-grade ore in May last year. The plant is its third gold processing facility at Sokor.

Outlining its growth plans in a separate statement to the Singapore Exchange on Monday, CNMC said it will have a potentially new source of income as production and sales of silver, lead and zinc start contributing to the group's financial results once the proposed flotation plant at Sokor starts commercial production.