Independence Group swings to full-year loss

The gold and base metals miner has swung to a loss as impairments and acquisition costs offset recent gold price gains.

Managing director Peter Bradford said its 30 per cent stake in the Tropicana gold mine had been the cornerstone of its result.

Gold and base metals miner Independence Group has swung to a full-year loss as impairments and acquisition costs weighed on the bottom line.

The gold sector has been a shining light on markets through the past six months, but Independence Group (IGO) was unable to fully capitalise on the uptick in the price of the precious metal through the second half in declaring a loss of $58.8 million.

Red ink flowed in part due to acquisition costs of $64.8m relating to its purchase of Sirius Resources and writedowns of $24.8m.

Managing director Peter Bradford said its 30 per cent stake in the Tropicana gold mine had been the cornerstone of its results despite lower production and higher cash costs offsetting a lift in gold prices, while depressed nickel, copper and zinc prices dampened results at its other sites.

For the 12 months to June 30, the group booked revenue of $417m, down 19 per cent on the prior year.

“FY16 has been about the creation of the future platform of growth for the company at the bottom of the market cycle, while achieving sustainable and profitable cash flow from our production assets,” he said.

“Our holding in Tropicana continues to be a key asset of the business, delivering strong operating profit before tax of $64m.

“Our base metals operating assets have had to adapt to lower commodity prices, however, the business has successfully lowered costs and changed production profiles.”

Mr Bradford said volatility would likely be a hallmark of the year ahead, with margin pressure potentially weighing on its base metal assets through fiscal 2017.

Independence Group declared a fully franked final dividend of 2c a share.