Straits posts lacklustre production in March Q

DIVERSE miner Straits Resources recorded a production slump for most of its copper, gold and coal mines in the March quarter. When combined with the additional burden of cash cost increases, the miner’s shares slipped more than 10% to a low of $6.55 in morning trade.
Straits posts lacklustre production in March Q Straits posts lacklustre production in March Q Straits posts lacklustre production in March Q Straits posts lacklustre production in March Q Straits posts lacklustre production in March Q

Coal mining operations at Straits Resources Sebuku coal mine in Indonesia

Staff Reporter

Despite a slump in production and cash cost increases, total sales revenue for the group excluding Varomet reached $A183.406 million for the three months to March, up 86% quarter-on-quarter, and a 109% surge on the same period last year.

Copper production from Whim Creek in Western Australia dropped more than 21% to 2969 tonnes of copper metal from the preceding December quarter’s 3596t. Cash costs rose from $US8 per pound produced to $1.70/lb.

Over at the New South Wales-based Tritton copper mine, output fell 1.72% from the December quarter to 3775t of contained copper for the three months ending March.

There was more than a 27% dip from the corresponding period last year when 4805t of copper was produced at Tritton.

During the March quarter, cash costs climbed to $1.77/lb, up almost 13% from the December quarter, and 79% from the same period last year.

In the same period, gold output at Mt Muro dipped more than 9% from the December quarter to 11,725oz.

Silver production at Mt Muro plummeted 384% to 35,325oz from 171,050oz in the corresponding period last year.

There was a marked plunge of nearly 33% quarter-on-quarter, with a total of 46,825oz silver produced during the December quarter.

Cash costs were up 58% from the December quarter to $839 per ounce of gold in the March quarter.

However, gold sales from Mt Muro rose 31% from the preceding quarter to 16,235oz gold sold in the three months to March.

Coal output dropped 25% at the Indonesian Sebuku mine from the preceding quarter’s 1.261 million tonnes to 951,000 in the March quarter.

Straits’ first quarter of production at its newly acquired Indonesian Jembayan coal mine produced 1.197Mt of coal and sold 1.185Mt last quarter.

Meanwhile, earlier this month, Straits proposed a company and asset restructure to generate greater wealth for its shareholders.

Under the proposed restructure, the coal assets held through 51%-owned subsidiary Straits Asia Resources would be split from the company’s other metal assets.

Straits said the restructure would enable Straits Asia to focus on coal, while Straits Resource would focus on its operating gold and copper mines, and pursue further growth opportunities.

The Straits group had $A78 million in cash at the end of the quarter.

Shares in Straits had climbed back to $6.91 by early afternoon.