Resolute Mining profit drops 20%

Resolute Mining (ASX: RSG) reported its fiscal 2013 earnings today, boosting sales but pushing less through to profits. On the top line, Resolute’s revenue clocked in at $619 million, a 7% increase over 2012. The company kept cash flow at $154 million and full-year gold production came in at 435,855 ounces, more than 35,000 above 2012’s numbers.

However, an increasingly rough gold market kept costs high and profits piddling. The company sold around 395,000 ounces of gold in FY 2013 for an average price of $1,562 per ounce, around $70 less than the year before. At the same time, costs increased $50 per ounce to $811.

For investors, all that whittles down to after-tax net profit of $84.9 million, including a $79.3 million impairment charge for gold investments and a $40.5 million boost from foreign currency gains. Compared to 2012, this year’s profit amounts to just 80% of Resolute’s previous earnings.

Looking ahead, Resolute is determined to keep digging. Its Syama Expansion Project in Mali is 34% complete at a current spend of $83 million, while drilling and exploration continues in Queensland, Cote D’Ivoire, and Tanzania.

While Resolute paid out $0.05 per share in dividends to investors this year, a 2014 payment won’t be decided on until the company’s half-year results. For now, the company expects to churn out 345,000 ounces of goal next year at an ever-higher cost of $890 per ounce.

Oil, copper, and gold continue to be in high-demand — and their popularity doesn’t look to be slowing. We’ve uncovered three companies poised to benefit from the rising prices of these commodities. Get our brand-new report — “3 Tiny Resources Companies That Could Win Big” — FREE!

More reading

Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.