Brisbane, June 20, 2008 AEST (ABN Newswire) - North Queensland Metals (ASX:NQM) Announce an Inaugural Net Profit for 2007/08 forecast in the range of $0.5 to $1 million and the Pajingo gold mine expected to achieve an annual production rate of 74,000 oz gold in the first half of 2008/09.
Progress at Pajingo gold mine
North Queensland Metals Limited (NQM) was transformed into a gold producer when it acquired a 60% share in the Pajingo gold mine on 30 December 2007 with NQM as the operator. Since that time the Company has been working to return the mine to full production under a revised schedule.
NQM recommenced mining and processing at Pajingo with total gold production forecast at 390,000 oz over a six year mine life based on Reserves and Resources estimates announced earlier in the year.
The Company is confident of achieving this production forecast and expects to be producing at the rate of 74,000 oz gold per year in the next (December 2008) half year.
The processing mill is now in continuous operation. Key equipment has been overhauled in readiness for operation at full production levels.
Development rates are increasing in the mine to access new stoping areas.
The required additional staff are now in place to enable the commencement of a third shift in the mine next month.
Financial performance
The Company expects to record an inaugural net profit for the year ending 30 June 2008 in the range of $0.5 to $1.0 million (NPAT).
This financial result has been constrained by the initial costs of preparing the Pajingo mine for full production.
Unit cash costs for the last two months have been higher than previously experienced as a result of:
- Ore recovery and dilution issues in crown pillar recovery stopes resulting in slightly lower production;
- Previously announced plant modifications that were made last month;
- The increase in staff numbers in preparation for running continuous shift production;
- The overhaul of a production drill rig.
NQM Chief Executive Officer, Mr. John McKinstry, commented: "We now have all the key ingredients in place to ensure that production for the coming financial year meets the company's targets."
North Queensland Metals Investment Data:Issued Shares: 144,552,020Quoted Shares: 86,960,354Escrow Issued Shares 57,591,666(Release from escrow in Dec 08)Net Assets (31 Dec 2007) $16.1 millionHalf Year Profit (31 Dec 2007) $(551,590)Market Capitalisation $48 million
Contact
John D McKinstry
CEO
North Queensland Metals
Tel: 1300 308 832
Fax: 07 3666 0510
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