This morning Western Australian gold miner, Doray Minerals Limited (ASX: DRM) announced its 2015 half-year results for the six months to 31 December, 2014.
Thanks to a slight 1% increase in production to 39,228 ounces and 9% jump in gold sales, the miner reported a 6% lift in revenue, to $60.1 million, over the prior half.
Unfortunately a 10.4% increase to its all-in sustaining cost (AISC), to $1,238 per ounce, coupled with a 2.7% fall in average gold price received, squeezed the miner's average profit margin from $393 per ounce, to just $239 per ounce. Net profit after tax came in at $4 million with earnings per share at 2.9 cents.
Pleasingly, a reduction in depreciation and amortisation charges and monthly improvements to gold grades and costs resulted in $27.1 million in net cash from operations, whilst debt reduced from $14.6 million to $12.9 million, during the half.
Commenting on the results Managing Director, Allan Kelly said, "Coming in to the first half of the 2015 financial year, we forecast lower grades and higher costs at Andy Well as we transitioned from treating stockpiled higher grade open pit material to being purely dependant on underground ore."
He added, "I'm pleased to say that we had considerable success in reducing unplanned dilution underground and saw significant monthly improvement in our head grade, costs and profit margins resulting in better than expected results for the half year."
During the December quarter of the half year, Doray's all-in sustaining cost fell by 20% with its average profit margin jumping from $124 per ounce in the September quarter to $340 per ounce, perhaps hinting that investors could expect a better second half result.
Indeed looking ahead, Doray's management team have upgraded their full-year production forecast from 77,000 to 85,000 ounces to between 85,000 and 90,000 ounces, at a cash operating cost of between $600 and $700 per ounce, down from $700 to $800 per ounce.
Mr Kelly said the company can look forward to a lower diesel price and, "will also see the benefits from a significantly improved gold price since October 2014."
Throughout the past year, shares of Doray Minerals have followed fellow junior gold miners Silver Lake Resources Limited (ASX: SLR) and Troy Resources Ltd (ASX: TRY) sharply lower.
