Gold miner Doray Minerals has posted a 13 per cent drop in full year profit due to lower gold prices and volumes, but has forecast greater output in the year ahead.
The West Australian miner made a net profit of $16.5 million in the year to June 30, down from $19 million in the previous year.
Revenue slipped two per cent in the year, while depreciation and amortisation costs and exploration write-offs were higher than in the previous year.
Doray Minerals shares were up 1.25 cents at 72.25 cents at 1320 AEST, amid broad-based gains for gold mining stocks. But Doray shares have slumped more than 40 per cent since mid-July.
Despite slightly lower volumes, the company met guidance for its existing Andy Well project in WA, producing 84,135 ounces of gold at cash production costs of $665 an ounce. It also started production during the year at its nearby Deflector project.
Doray acquired the project through its 2014 merger with rival Mutiny Gold, and poured the first gold bar at the site in May before sending its first shipment in June.
The company is forecasting an increase in total gold production to between 105,000 and 120,000 ounces in the 2016/17 year, and copper output of 3,000 to 4,000 tonnes, as it ramps up production at the new project.
Of those amounts, Deflector is likely to produce between 40,000 and 50,000 ounces of gold, and all the copper. Output will increase further to 60,000 ounces of gold a year later.
Gold prices slumped to six-year lows in 2015 but have recovered more than a quarter so far in 2016, as uncertainty in global markets drives investors to safe-haven assets like bullion.
Gold producers have experienced a surge in prices in recent months, with the precious metal currently trading around $US1350 per ounce.
Doray expects the increased volumes to help make a dent in its $80 million debt pile. It plans to repay $35 million in 2016/17.
DORAY FY PROFIT SLIPS
* Net profit down 13.2pct to $16.5m
* Revenue down 2.2pct to $131.1m
* No final dividend, unchanged.
