Kidston: golden start

Press, 7 February 1986, Page 8

Kidston: golden start

NZPA-AAP Brisbane Australia’s largest gold mine, Kidston Gold Mines, Ltd, has reported a maiden profit of sAustso.76 million for the year ended December 31, 1985.

The profit was generated in only 10 months after the mine, 280 km north-west of Townsville, began operations several months ahead of schedule in March.

Turnover was $100.64M, with a further $920,497 earned from interest and other miscellaneous investments. Tax payments of

$285,000 were minimised by tax exemptions on gold production—a contentious issue which is being re-

viewed by the Federal Government. Directors said the mine produced and shipped 206,467 ounces of gold, which generated revenue of $97.09M, while 109,516 ounces of silver, worth $941,136, were produced and sold.

Another $2.60M was earned from forward gold sales at $504 an ounce—well above the average $472 an ounce for spot sales received during the year.

A final dividend was not declared, but investors

were awarded two interim dividends totalling 15c during the year. The second 10c a-share dividend is payable on February 21, books closing today. Last month, directors said mineable reserve estimates had been increased more than 5.9 M tonnes to 39.22 M tonnes, compared with the 37.04 M tonnes estimate when production began. The increase came after refinements to the pit design and diamond drilling, and directors said they would consider changes to the mining plan which could maximise returns.

A spokesman said the company was considering increasing grinding capacity within the next 12 to 18 months to help maintain production levels when harder ore would need processing. Interest payments of $8.05M included foreign-ex-change losses of $2.46M but directors said borrowing had been reduced to 578.9 M from 5123.0 M by December 31 from the previous March. They said the reduction was achieved by the redemption of preferred shares and no preference shares were outstanding under the company’s credit facility. All borrowings were made through a credit facility arranged by Chase Manhattan bank.