No dividends for investors as Mincor Resources posts losses

Investors of Mincor Resources can expect to receive no dividends this year as the Australian company reported a total net loss after tax of AU$34.26 million for the full year ended June, a 35 percent fall in its cash pile.

According to Yahoo News , the net loss included a AU$47.76 million write-off on exploration and a non-cash impairment charge of AU$18.15 million. However, Mincor managed to beat its target over the past year, with the production of 8,623 tonnes of nickel ore for the full year. The company sold 7,513 tonnes, earning a gross revenue of AU$85.68 million. Still, this isn't enough to offset the losses, and Mincor thought it prudent not to declare a dividend, which was worth two cents per share last year.

David Moore, managing director of Mincor, attributed the losses to weak nickel prices throughout the year, as well as higher costs in the second half of the year. This led to Mincor's shares falling 17.5 percent to 33 cents last Thursday, a day when the broader mining sector recovered some of this week's mining losses. Base metal prices recovered a little, though prices in the London Metal Exchange remained weak as investors continued to shun risky assets like commodities over concerns surrounding China's currency devaluation.

Other nickel miners held steady or made slight gains, such as Russian nickel miner Amur Minerals (London AIM: AMC) , which rose 0.75 points or 4.55 percent to close at 17.25 per share. Amur Minerals is already shifting from exploration to preproduction development for its flagship Kun-Manie nickel copper sulphide project, and its recent collaborative financial agreement with the Far East and Baikal Region Development Fund will allow it to attract funding in Russia, China and India.

"While the sharp fall in nickel prices this year has taken its toll, our decision to step up our exploration commitment during the year has delivered a range of tremendous growth options," Moore said. "This, combined with the operational restructure implemented at our existing operations, has ensured that Mincor is in the best possible position to weather the current situation and reposition for the future."

Just last April, Mincor launched a revised mining strategy designed to protect the company through the nickel price downturn while also optimising cash flows and preparing for a possible transitional period, in which Mincor's resources would be focused on exploration and development of its suite of growth projects.

"We see the coming year as a transitional period for Mincor, during which we move from our long-standing operations at Miitel and Mariners towards a new phase of growth, underpinned once again by Miitel, now augmented with Burnett, and lifting production through the development of new mines at Durkin North and Cassini," noted Moore. He remains optimistic that the slumping nickel prices will turn around soon.

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