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Orosur Mining Makes Annual Profit On Significantly Lower Impairments

August 18, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Shares in Orosur Mining Inc rose Monday after it said it swung to a profit in its last financial year, on the back of significantly lower impairment costs compared with what it booked a year earlier.

The South America-focused gold miner posted a pretax profit of USD3.7 million for the financial year to May 31, compared with a pretax loss of USD15.6 million the prior year, when it booked a total of just over USD18.4 million on the impairment of assets, as well as exploration expenses and an exploration write off. It said profit was also helped by lower corporate and administrative expenses.

Revenue for the year came in lower at USD80.4 million, compared with USD105.9 million a year earlier.

The company said it produced more gold than it had forecast, of 60,271 ounces, compared with its upgraded guidance given during the year of between 55,000 ounces and 60,000 ounces, which it said was boosted by a strong performance at Arenal in Uruguay, especially in the fourth quarter.

It said the average gold price received was USD1,298 per ounce, compared with USD1,605 per ounce it received last year.

"We have been able to generate operating cash flow of some USD24 million, 13% more than we generated in 2013 despite a significantly lower gold price environment," said Chef Executive Ignacio Salazar in a statement.

The company's stock was trading at 16.47 pence Monday mid-morning, up 6.3%.

Orosur Mining gave a forecast production guidance of 50,000 ounces to 55,000 ounces of gold for the current financial year, at operating cash costs of between USD850 to USD950 per ounce.

It said in the year ahead, production from Arenal Deeps is expected to contribute approximately 70% to 75% of total gold production.

"The company’s 2015 guidance is in line with the original guidance adopted in fiscal year 2014, which were upgraded and beat, however the company considers it prudent to maintain similar targets, as external factors are expected to contribute to cost appreciation and lower production grades are anticipated in the mining plan for the year," the company said.

Back in May AIM-listed Orosur Mining signed an all-share deal to acquire Waymar Resources Ltd for about 18.5 million Orosur shares, or about GBP2.1 million. The combined company now has a producing mine and exploration assets in Uruguay and exploration and development projects in established mining jurisdictions in Chile and Colombia. Waymar’s main asset was in the AnzÁ project in Colombia.

"Beyond our current assets, the recent acquisition of Waymar Resources has added an attractive high grade exploration asset with significant upside in Colombia in the AnzÁ project... We look forward to the year to come," said Salazar.

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Source: Alliance News

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