New Dawn Mining Corp (TSE:ND) announced late Thursday it has pulled from a loss in its third quarter on more-than-doubled gold sales, as the price of the yellow metal soared and production increased.
For the three months ending June 30, the junior gold miner posted net income of $852,301, or $0.02 per share, compared to a loss of $150, 969, or nil per share, a year ago.
Revenues attributable to the company rose to $9.2 million, more than double from $3.5 million a year ago, driven by a 27% increase in the average realized price of gold, to $1,516 per ounce.
The Zimbabwe-focused, Toronto-based company also announced it acquired the remaining 11.3% of Central African Gold by early June. New Dawn had acquired an 88.7% interest in the company a year ago, and has since consolidated operations.
The company reached record revenues from the quarter, largely on higher production attributed to mines acquired from Central African, including the Dalny, Golden Quarry, Old Nic, Venice, and Camperdown mines.
New Dawn produced a total of 6,355 ounces of gold attributable to the company, compared to 3,243 ounces of gold a year ago, as tonnage mined and processed increased.
At the Dalny, Old Nic and Golden Quarry mines, the company said production increased to a total of 2,967 attributable ounces of gold, with the mines expected to become an increasing proportion of total gold production in the future. The Golden Quarry mine began commercial production in May.
At the end of the quarter, an additional 1,847 ounces of gold were inventoried and are awaiting sale in the fourth quarter.
Average cash costs were $1,024 per ounce, compared to $747 per ounce a year ago, as the company's Turk mine was negatively impact by a reduction in the cut-off grade implemented early in the quarter, reducing production and increasing costs per ounce.
Because the Turk Mine represented almost 50% of the gold produced by the company for the latest quarter, the effect of these difficulties had a disproportionate effect on average cash costs per ounce, it said. However, the problems have since been corrected and the Turk Mine has returned to normal production levels.
Cash costs were also negatively affected by the resumption of underground mining at Dalny, and a 21% increase in power costs and seven public holidays during the quarter.
Total gold production for the period increased to an annualized run rate of about 27,000 ounces, prompting the company to reaffirm its target gold production of between 38,000 and 40,000 ounces per annum by year-end.
In other news, New Dawn said it is awaiting response from the Zimbabwean government regarding a new indigenisation policy under which all domestic businesses must be 51% owned by indigenous Zimbabweans.
In March, the company, which has several operating subsidiaries in Zimbabwe, received notice that all non-indigenous mining companies must submit an indigenisation implementation plan by early May.
As required, New Dawn, submitted its Indigenisation Plan in late April, and amended it in June of this year.
"There is currently substantial uncertainty surrounding the implementation of the indigenisation legislation and the potential impact on the company," it said in a statement.
"There can be no assurance that the company will be successful in its effort to comply with the indigenisation legislation."
If it does not obtain governmental approval, New Dawn could be required to transfer 51% of each of its Zimbabwe subsidiaries to a "designated entity" with payment uncertain, it said.
New Dawn added that this event would raise significant implications as to the company's ability to continue to conduct its operations in Zimbabwe, as well as to obtain the funding necessary to continue to implement its current business plan.