Half Year Report

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31
DECEMBER 2016 AND APPENDIX 4D
Key Points
As Karouni achieved Commercial Production on 1 January 2016, there are no comparatives in relation to
this continuing operation in 1H 2016.
» Gold production of 28,168oz.
» Gross Profit before depreciation and amortisation was $9.3 million
» EBITDA1 of $3.9 million
» Net Proceeds of $38.4 million raised from a placement and retail entitlement offer
» Repayments made under the Investec Facility of $13.5 million (1H 2016: A$25 million)
with net debt at $20.4 million (1H 2016: $52.1 million)
» Reported net loss after tax of $76.7 million
» Impairment loss net of deferred tax liability derecognised of $57.3 million
1 EBITDA is Earnings before interest, income taxes, depreciation and amortisation and non-cash impairment charges.
All references to $ are Australian dollars unless otherwise stated.
Included in the results is a non-cash impairment charge of $57.3 million, representing an
adjustment against the carrying value of mine property for Karouni of $68.4 million and the
unwinding of a deferred tax liability of $11.1 million.
Commenting on the report CEO Martin Purvis said: "The ups and downs that were
experienced during the start of commercial operations continued into the second half of
2016. With the benefit of hindsight it is evident that many of the original production targets
were based on assumptions that only partially recognised the full extent and nature of the
pioneering conditions at Karouni.
Looking back there is no doubt that too much was expected too soon and this placed an
unrealistic burden on the workforce on site. Nevertheless we have followed a steep learning
curve and managed to weather the storm of unforeseen production challenges and still
managed to generate an operating surplus for the half-year.
Going forward, an underlying trend of continuous improvement has been established
throughout the production chain at Karouni. While the recent wall failure in Smarts 3
disrupted this trend, the impact will prove to be temporary in nature and will not have a
material impact on the overall life of the mine.
Commensurate with this position Troy’s management team has reassessed all the
assumptions and factors associated with the experience gained during the first year of
operations and this has delivered a production plan that is better aligned with realistic
expectations for the unique conditions at Karouni and this in turn has generated a more
conservative value as provided for in the half-year accounts.
Having dealt with a range of significant challenges at such an early stage in the mine life,
there is a very positive “can do” attitude emerging within the team on site. With the recovery
from the wall failure now largely complete and full scale production underway in all the pits,
there is every expectation that both production and costs will improve measurably in the
second half of the year.”