Serabi Gold shares fell 7.2% to 33.4p in early morning trading on Wednesday after the gold mining company announced a revenue decrease to $31 million in HY1 2022 from $32 million the last year.
Serabi Gold confirmed a problematic Q1 2022, with a net cash outflow of $2.5 million driven by lower production across the financial term. Production picked up by 19% in Q2, however profits and revenue still suffered a significant blow.
The firm reported a rising cost of sales to $23 million compared to $18 million.
Serabi Gold highlighted an EBITDA fall to $5 million against $11 million, alongside a drop in operating profit before finance and tax to $2 million from $8 million in the previous year.
The commodities group noted a pre-tax profit slide to $2 million compared to $6 million.
Serabi Gold mentioned a basic EPS decline to 2.74c from 9.06c.
The company pointed out cash and cash equivalents of $9.8 million at 30 June 2022 against $12.2 million at 31 December 2021, along with net assets of $84.1 million from $79.8 million.
“Compared with the same six-month period in 2021, we have incurred a 46 per cent increase in spending on underground drilling to grow the mineral resource inventory and build long term mining plans, a 48 per cent increase in power costs which includes diesel for generators and grid supplied electricity as well as increased costs of reagents and other consumables across both the mining and processing activities,” said Serabi Gold in a statement.
“As well as the continued investment in underground drilling to grow the mineral resource at Palito, we have continued to update the mining fleet with an additional US$1.5 million spent on capital equipment in the second quarter compared with less than $400,000 in the same period of 2021 and we continue to progress the mine development at Coringa. This capital programme together with the underground drilling activities are the platform for building the future production growth and complement the continued potential presented by the regional exploration that is attracting external interest.”
“The cash position remains strong, with cash held at 30 June 2022 of US$9.8 million with a further US$1.9 million received shortly after the month end for a sale of copper/gold concentrate following a small delay to sailing schedules.”
