Asa Resource Group swings to earnings in first half

Asa Resource Group announced its unaudited interim financial results for the six months to 30 September on Monday, with revenue up 4% to $64.1m over the same time last year.

The AIM-traded firm’s EBITDA hit $10.1m, a significant improvement on the $0.2m loss posted in the prior half year.

Profit after tax reached $3.1m, swinging from a $4.3m loss, with both Freda Rebecca and BNC operating profitably.

Earnings per share were down, however, to 14 cents from 25 cents.

The company’s cash balance was significantly reduced to $1.1m from $9.7m, which it said was mainly due to capital expenditure at BNC, Freda Rebecca and an investment in the Zani Kodo gold project.

Its board added that the cash balance of $9.7m at the same time last year included part of the outstanding proceeds received from BNC smelter bond.

“The first half of the current year saw steady progress across the group with an after tax profit of $3.1m, predominantly coming from its two key mining operations in Zimbabwe,” said group chief executive Yat Hoi Ning.

“While I am pleased with this progress, we must remain focused on reducing our corporate and operating costs further to reflect the contrasting movements in nickel and gold.”

Ning said to help achieve that objective the board has reorganised its executive management.

“The managing directors of Freda Rebecca and BNC will move to the group level as COO and CTO.

“By bringing teams closer together, communications become more efficient and duplication between corporate and operational functions are minimised.”

Ning said the appointments were significant in that they strengthen the group executive's mining and technical expertise.

“In conjunction with our finance director, Mr Kwan, and myself, they will also oversee our diamond, gold and copper interests in DRC, South Africa and Angola.

“In addition, the Group will hold at least two quarterly board meetings at our Asa Complex, Bindura, where Freda and BNC are located.”

The main objectives for the group for the second half of the year are consistency of output and C3 targets, Ning explained.

“The outflow of cash for the period was $6.3m.

“It comprised cash generated by operations of $3.1m, cash utilised in investing activities of $11.3m and cash advanced through financing activities of $1.9m.”