Bass Metals Limited
(ASX: BSM)
ASX
RELEASE
11 MARCH 2009
BASS METALS
DELIVERS $4.5M FIRST HALF PROFIT ON STRONG QUE RIVER PERFORMANCE
- $4.5M
interim net profit achieved equivalent to earnings per share of 4.3 cents
- Half-year
profit underpinned by high-grade polymetallic
ore production at Que
River Mine
- Ore
sales totalling $11.7M generated from Au, Ag, Zn, Pb
and Cu
- Actual
cash flow receipts of $9.7M for first half, increasing cash reserves to
$7.8M (31 December 2008)
- Net
tangible asset backing per share increased to 26.0 cents per share (2007:
19.4 cents)
- Recent
increases in Mineral Resources and Ore Reserves support mine life extensions
at Que River
- Que River
operation funding broader growth strategy including Hellyer
Mill acquisition
Bass Metals Ltd (ASX: BSM) has reinforced the strength of its Que River base metals business in Tasmania as
a platform to underpin the broader development of its minerals portfolio in the
State?s north-west after delivering a strong $4.5
million interim net profit after income tax despite the current challenging
environment for mineral producers.
The profit for the half-year to 31 December 2008 (2007: $0.4 million net
loss) was based on ore sales from the Que River
operation of $11.7 million. Ore
is sold to Oz Minerals Limited?s nearby Rosebery
processing facility under an Ore Sales Agreement, with actual cash flow
receipts in the course of operations after payment of treatment charges of $9.7
million.
Bass Metals Managing Director Mike Rosenstreich
said the result demonstrated that the Company was delivering on the plans
conveyed to shareholders in early 2008 to be self-funding and well positioned
to manage through the difficult market environment through prudent management,
sensible hedging and the robustness of the Que River operation ? which is continuing to
deliver high-grade polymetallic ore with positive
reconciliation trends.
?The diverse revenue mix arising from the polymetallic
nature of the ore body provides for a more stable total revenue base because
price declines for certain metals may be offset by rises for others,? he commented. ?Que River
generates revenue from five different metals ? gold,
silver, zinc, lead and copper ? and this has proved to
be a significant strategic advantage in the current volatile price
environment.?
This was amplified in the second half of 2008 when base metal prices
generally declined while precious metal prices firmed in Australian Dollar
terms. Gold and silver revenues contributed 37% to the revenue pool ? almost as much as the 39%
derived from zinc payments. The first half financial result was based on ore
production of 37,208 tonnes grading 19.4% Zn, 10.3% Pb,
276g/t Ag, 6.0g/t Au and 0.4% Cu. Ore sales to the Rosebery operations
comprised 36,372 wet metric tonnes ? ahead of the Company?s target of 30,000 tonnes.
Bass Metals recently announced a 65% increase in Ore Reserves (Proven
and Probable) for the Que River Project to 129,000
tonnes at 9.3% Zn, 4.9% Pb, 0.6% Cu, 122g/t Ag and
2.6g/t Au, underpinning the ability of the project to maintain production and
deliveries at these levels for a further 12 to 24 months. The Company is also
drilling extensions to the high grade PQ pit mineralisation which could
increase this again with drill results such as 18.3 metres at 12% zinc, 6%
lead, 190 g/t silver and 2.5 g/t gold and 5.9 metres at 18% zinc, 10% lead, 421
g/t silver and 5.4 g/t gold recently announced.
?Importantly, Que
River is both profitable and
cash flow positive ? which is a significant
achievement in the current environment,? Mr Rosenstreich
said. ?Bass Metals has successfully transitioned into
a profitable mining business since the start-up of operations at Que River
last year. However, of more importance for the longer term future of the
Company is that this strong funding capability is underpinning development of
the larger scale Hellyer Mine Project and our
previously announced acquisition of the Hellyer
Mill.?
?The continued
strong cash generation of the Que River
operation will continue to fund our longer term growth, as well as the utilisation
of the Hellyer Mill through our dominant regional
tenement position.?
Bass Metals has reached agreement to acquire the Hellyer
processing facility and associated infrastructure, tailings resources and
Mining Lease for $4.0 million plus a capped royalty from Intec Limited (ASX:
INL). This transformational acquisition is scheduled to be completed shortly
and will provide a new focal point for the Company?s
growth ambitions, repositioning it as an independent, emerging mining company
rather than a small-scale producer reliant on third party treatment and
off-take arrangements.
- ENDS -
Released by:
Nicholas Read / Kate Bell
Read Corporate
Telephone: (08) 9388-1474
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On behalf of:
Mr Mike Rosenstreich
Managing Director
Bass Metals Ltd
Telephone: (+61-8)
9322 8044
Website:
www.bassmetals.com
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