Some more good news from the resources sector.
Gold miner Avoca Resources says it is now expecting a maiden first half pre-tax profit of $40.5 million.
The Perth-based company said yesterday that unaudited pre-tax result for the first half of the financial year will be $40.5 million compared to a loss of $21 million in the prior corresponding period.
The company said the estimated first half net profit was $29.38 million, compared to a loss of $14.65 million in the corresponding period in 2008.
Avoca’s Managing Director, Mr Rohan Williams, said that "the unaudited $40.5 million profit for the 6 month period to the end of December is a fantastic result and a credit to all of the operational teams at Trident. It represents a 140% increase in revenue over the corresponding period in 2008.
"Avoca and its Higginsville operation are performing above expectations and we are confident that the Company will continue to grow and become Australia’s premier mid-tier gold producer," he said in the statement to the ASX.
Recovered gold production for the half is expected to be around 101,500 ounces, compared to 49,622 ounces in the first half of the 2008 fiscal yea.
"The upward variation in operating results for the half-year is due to the commencement of steady state operations at Higginsville following a successful ramp up in production," the company said.
"The unaudited December 2009 half-year operating result does not include a potential fair value gain (non cash) adjustment to the book value of the company’s investment in Dioro Exploration NL," it said.
Avoca is expecting to reveal its audited half-year results to the Australian Securities Exchange before the end of the month.
Avoca shares rose 8 cents, or 5%, to $1.68.
Fellow WA miner, nickel producer Western Areas expects to make an interim profit after boosting production and sales on the back of the rising nickel price.
The company says the expected profit will be a significant improvement on the loss in the corresponding period a year earlier.
The shares initially rose 18 cents, or 4.4%, at $4.24, but eased back in the afternoon to close down 2c at $4.04.
Western Areas says it now expects a net profit of $10.7 million in the six months to December 31, compared to the loss of $12.3 million in the same period in 2008.
Earnings before tax for the latest period is likely to be $16.9 million compared to a loss of $16.3 million a year earlier.
Production during in the period rose nearly 38% to 5,874 tonnes of concentrate.
Western Areas said this higher production was sold at higher prices.
Gross revenue will be around $107 million, up from $44.4 million in the same period of 2008.
Last week the company said its production for calendar 2009 was up on the previous year.
Western Areas said its dividend policy remained as 50% of net profit.
The final audited figures will be out later this month.
And shares in Santos got little boost from yesterday’s sharp reserves upgrade.
Santos told the ASX in a statement that its proved and probable (2P) reserves estimate had risen 42% and said it now has more than enough gas for the first phase of its $7.7 billion Queensland coal seam methane export LNG project.
The shares traded steady at $13.20 after rising in the wake of the news announcement, then easing back. They ended the day off 5c at $13.15.
Santos, and partner with Malaysia’s state-oil firm Petronas in the proposed Gladstone LNG project using coal seam gas, said the reserves upgrade brought its total reserves to 1.44 billion barrels of oil equivalent at the end of 2009.
"The reserves build for Gladstone LNG was ahead of target and exceeded the reserves requirement for the first train," Santos said in the statement yesterday.
"This significant reserves increase is a result of the consistent delivery of Santos’ transformational LNG growth strategy. 2P reserves dedicated to Santos’ portfolio of LNG projects are now more than 700 mmboe or almost 50% of total 2P reserves."
Santos Chief Executive Officer David Knox said consistent delivery of Santos’ strategy had again delivered strong reserves growth in 2009, positioning the company for significant future production growth.
“Today’s announcement means Santos has delivered its sixth successive annual reserves increase. Proved and probable reserves are now in excess of 1.4 billion barrels, another record level for the Company,” Mr Knox said.
Santos said that total 2P reserves – or reserves defined by the industry as having a 50% chance of recovery – for the Gladstone project were at 4,003 petajoules as of December 31.
Santos, Australia’s third largest oil and gas producer is targeting a final investment decision on Gladstone by the middle of this year.
Earlier it said it was in advanced talks with several major Asian customers for LNG from both the first and second production trains and also on the possible purchase o
