CNMC Goldmine Gets Green Light on Base Metal Production Plant
CNMC Goldmine Holdings Limited (the “Company”) and its subsidiaries (collectively, the “Group”) has received regulatory approval to build a flotation plant for commercial production of silver, lead and zinc, thereby paving the way for it to diversify its income stream even as it seeks to mine more gold after multiple disruptions in the first half of 2021.
The Group, which mines gold in Malaysia’s Kelantan state, had to stop production for 64 days from 16 January 2021 to 6 February 2021 and again from 1 June 2021 to 12 July 2021 (or a total of 52 days during 1H2021), as a surge in Covid-19 cases nationwide triggered repeated lockdowns that upended many businesses and industries.
Despite the uncertain challenges, the Group managed to turn in an after-tax profit of US$0.1 million for the first six months of 2021 (“1H2021”), reversing a loss of US$1.1 million for the same period last year (“1H2020”). Had the unrealised foreign-exchange losses been disregarded in both periods, a net profit of US$0.64 million for 1H2021 compared to a net loss of US$0.42 million for 1H2020 would be recorded. Such unrealised foreign exchange losses mainly arose from the weakening of the Malaysian ringgit, in which most of the Group’s cash and bank balances are denominated, against the US dollar.
The turnaround came as the Group produced and sold more gold in 1H2021, with revenue up by 22.9% at US$12.87 million from US$10.47 million in 1H2020. Higher gold prices in 1H2021 also lifted its selling prices, which averaged US$1,818.95 per ounce compared to US$1,682.92 over the corresponding period last year.
All-in costs of production per ounce of gold edged up to US$1,526 from US$1,481, driven mainly by higher royalty and tribute expenses.
Even as it seeks to increase gold exploration and production activities following the easing of Covid-19 restrictions in Kelantan since 12 July 2021, the Group intends to expand its portfolio of minerals by monetising its silver, lead and zinc resources.
Mr Chris Lim, the Company’s CEO, said: “We have just received the greenlight from the authorities in Malaysia to proceed with the construction of a flotation plant at our flagship Sokor gold field in Kelantan. Once ready, this facility is expected to diversify our existing gold-centric portfolio and provide additional revenue streams to support our overall growth.”
The Company had previously said commercial production of silver, lead and zinc could begin this year, but now expects this to be pushed back as construction of the flotation plant could require more time in view of the uncertain Covid-19 situation in Malaysia.