zinifex joins billion dollar club Zinifex joins Billion Dollar...

zinifex joins billion dollar club Zinifex joins Billion Dollar Club




Zinifex’s Century Mine

Zinifex yesterday announced a net profit after tax of almost $1.1 billion, which represents a more than four-fold increase over the previous year.

Commenting on the figures, Zinifex’s CEO, Greig Gailey, said that this result is even more remarkable when it is considered that in one year the company has generated a profit which exceeds the price it paid for the assets that created Zinifex a little more than two years ago.

Mr Gailey said annual revenue increased by approximately 60% to just over $3 billion.

“Our result was obviously driven by the strong rise in zinc prices and record average lead prices during the year, however, this only represents part of the picture,” said Mr Gailey.

“Strong operating performances across the board saw total production exceed the previous year. In particular, new annual production records were set at our Century mine and Clarksville (Tennessee) refinery,” he said.

Consistent with Zinifex’s stated commitment to return surplus cash to shareholders, a final fully franked dividend of 70 cents per share was announced bringing the total dividend payment for the full year to 80 cents.

“This gives Zinifex one of the highest fully franked yields of the year and represents a great result for our shareholders,” he said.

Mr Gailey acknowledged that, in line with other resources companies, Zinifex experienced increased costs during the year. “We are presently experiencing a sustained resources boom and this has created significant cost pressures in our business.

“We share the dilemma faced by all resource companies of increased input costs resulting from strong demand for goods, services and specialized labour. However, through prudent cost management, we were able to limit this increase to approximately 7%,” he said.

Commenting on the long-term strategic direction of the company, Mr Gailey said considerable momentum was building behind the company’s growth strategy.

“Identifying additional mine reserves and resources is of paramount importance. It has been a very busy year for us with significant capital committed to a number of promising exploration ventures.

“This includes the allocation of a further $19 million over the next three years to extend mine life at Rosebery to 2020 and the initiation of a pre-feasibility study of our Dugald River zinc deposit in Queensland,” he said.

- 25 Aug 2006