In a series of announcements to the Hong Kong Stock Exchange, L’Sea Resources International reported an increase in first half production at its 41% owned Renison tin mine in Tasmania but also issued a profit warning.
Based on un-audited figures, June production of tin-in-concentrates was reported at 534 tonnes (up 7.4% year-on-year), with first half production at 3,282 tonnes (up 6.0% y-o-y). L’Sea’s stake in the mine is through its 82% share in YT Parksong Australia Holdings, which owns 50% of the joint-venture part-owned and managed by Metals X.
In a statement published on Friday L’Sea said the group “is expected to record a significant increase in net loss for the six months ended 30 June 2015 as compared to the corresponding period in 2014”, which it attributed to the likely need to write down asset values as well as lower operating revenues due to the recent slump in tin prices. The company, which had a net loss of 32.4 million Hong Kong dollars (US$4.2 million) for the six months ended June 2014, will post audited results in August.
ITRI View: More details of the mine’s operating performance also will be published by Metals X in due course. The Renison operation has been on a steady upward trend in terms of operating efficiency, but cash flow will be adversely affected by the recent slump in prices, despite some offset provided by Australian dollar weakness. Possible changes in L’Sea’s profitability are not necessarily indicative of MLX’s financial position, as the two companies may have different corporate costs and valuations of their tin assets. Furthermore MLX now derives most of its earnings from its gold mines.
