Johannesburg, South Africa — MININGREVIEW.COM — 10 September 2008 – Sallies Limited has reported an operating profit of R7.8 million for the year ended 30 June 2008 – a R28.8 million turnaround in its operating results from a loss of R20.9 million in the previous year.
Sallies CEO Tom Dale said the results were an early indicator of a turnaround in the fluorspar mining group’s fortunes. “Last year I promised shareholders that the 2008 financial year would be about operational delivery. These results reflect a 15% increase in production to 143 857 wet metric tonnes (WMT), and higher rand prices for the last shipments of F2008. There are operating challenges ahead” Dale added, “but in addition to our operating focus we will now attempt to build critical mass during the 2009 financial year.”
Dale said one of the highlights of the 2008 financial year had been that Witkop had become profitable for the first time in over five years. “We have seen improved production performances from Witkop, with production increasing 10% to 118 137 WMT, and higher spot prices for fluorspar,” he revealed.
Dale said Buffalo had reduced its operating loss from mining from R8.2 million during H1 F2008 to R1.9 million during H2 F2008. Acid grade production from Buffalo for F2008, at 25 720 WMT, was 52% higher than for F2007.
Revenue for the period under review increased by 54% to R168.1 million. The consolidated loss before taxation was R39.2 million (F2007: loss R47.2 million). Of this, R25.6 million had been incurred during H1 F2008 and R13.6 million – inclusive of R10.5 million share-based payments – had been incurred during H2 F2008. This H2 F2008 loss of R13.6 million compares with a H2 F2007 loss of R28.2 million.
Looking ahead, Sallies is actively pursuing a mining license for a high grade deposit in Zambia, and formulating an exploration programme for certain areas in Mozambique. Whether these prospects become viable will depend to a significant extent on logistics costs.