Looks positive to me.
Red River’s business continues to perform well, generating $119.5 million revenue for FY21, predominately from our Thalanga Operations with about $4 million generated by Hillgrove gold sales. This allowed us to finish the year with a strong cash balance of $19.1 million plus financial assets of $12.9 million including cash-backed security bonds and deposits. This strong cash flow allows us to continue to invest in and grow our business as we strive to create value for our shareholders.
On an underlying basis (ie., excluding the one-off cost provided for the settlement of the TCM royalty dispute) the consolidate entity achieved an underlying EBITDA of $42.7 million and underlying Net Profit after Tax of $21.0 million, or 4.1 cents per ordinary share. Further information on our underlying financial performance can be found on page 7 of the Directors’ Report.
The consolidated entity's underlying EBITDA increased by $43.1 million to $42.7 million and underlying net profit after tax for the year increased by $25.9 million to $21.0 million. The underlying result was impacted by a number of key factors including:
- Revenue from continuing operations amounted to $119.5 million (FY20: $54.0 million) with $3.8 million from the sale of Hillgrove gold dore and concentrate (FY20: nil), increased sales tonnes of zinc concentrate (up 47%), lead concentrate (up 25%) and copper concentrate (up 84%), higher realised AUD metal prices and reduced treatment charges per tonne of zinc and lead concentrate;
- Underlying sales realisation costs (adjusted for the cost accrued towards the provision for settlement of the TCM royalty dispute) of $10.3 million (FY20: $6.1 million) were driven by the higher sales volumes (and revenues);
- Employment benefits expense increased by $4.2 million to $15.3 million (FY20: $11.1 million). This was primarily due to the establishment of the operational workforce required to restart production at Hillgrove Operation, the insourcing of previously outsourced works and upward pressure on salaries of technical mining professionals;
- Production costs of $47.1 million were 39% higher than costs of $33.8 million in FY20. $1.6 million was incurred at Hillgrove Operations (2020: nil) with the restart of Hillgrove operations. Additional costs were incurred at Thalanga due to tonnes milled and concentrate produced increasing year on year by 23% and 53% respectively. Milling unit costs were 12% lower in FY21 due to improved efficiencies, while mining unit costs (increased by 20%) were impacted by the cost of operating development required to maintain and set up for continued stope ore production; and
- Depreciation and amortisation increased by $6.0 million to $15.5 million (FY20: $9.5 million) due to mine development costs capitalised during FY21 at the Far West Mine being amortised over the remaining Far West Mine Reserves.
