Troy suffers H1 loss

PERTH (miningweekly.com) – Gold miner Troy Resources has reported a net loss of A$76.7-million for the six months to December 31, on the back of a noncash impairment charge of A$57.3-million on the carrying value of its Karouni asset, in Guyana, and the unwinding of a deferred tax liability.

The net loss was widened from a loss of A$6.7-million in the six months to December 2015.

Revenue for the six months under review, reached A$4.2-million, with Troy producing 28 168 oz of gold during the period under review.

Earnings before interest, taxes, depreciation and amortisation decreased to A$3.8-million, from the A$4.3-million reported at the end of December 2015.

“The ups and downs that were experienced during the start of commercial operations continued into the second half of 2016,” Troy CEO Martin Purvis said of the company’s Karouni operations.

“With the benefit of hindsight, it is evident that many of the original production targets were based on assumptions that only partially recognised the full extent and nature of the pioneering conditions at Karouni.

“Looking back, there is no doubt that too much was expected, too soon, and this placed an unrealistic burden on the workforce on site. Nevertheless, we have followed a steep learning curve and managed to weather the storm of unforeseen production challenges and still managed to generate an operating surplus for the half-year.”

Purvis noted that, going forward, an underlying trend of continuous improvement has been established throughout the production chain at Karouni.

“While the recent wall failure in the Smarts 3 disrupted this trend, the impact will prove to be temporary in nature and will not have a material impact on the overall life of the mine,” he added.

At the end of last year, Troy warned of unstable ground conditions at Karouni, after monitoring checks and telemetry controls had indicated an increase in unstable ground conditions around the southern wall, within the Smarts pit, where the sand cover was at its thickest.

This resulted in the need to remediate a number of slippages, which, in turn, restricted access to some of the higher-grade areas during Smarts Stages 2 and 3, and saw Troy downgrade its 2016 production expectations from between 70 000 oz and 80 000 oz, to between 63 000 oz and 65 000 oz.