re: change of heart >Closing - no way. Read on.March 17,...

re: change of heart << Petre, you said the pit was close to closing. If this was general knowledge I missed it, or are you closer to the action? >>
Closing - no way. Read on.

March 17, 2003
Gympie Gold (GYM) posted a first loss of $11.6 million on Friday night compared with last year’s $488,000 loss. Analysts said the result was largely expected due to problems at its Southland colliery.

“This poor first-half result from the colliery means that the Group will not achieve its growth objectives for the 2002-03 fiscal year,” said the company in its release to the ASX.

According to the report, the Southland Colliery contributed an operating loss before tax of
$9.2 million and an EBITDA loss of $3.2 million. Gympie said production had been hampered by its longwall passing through a zone of difficult mining conditions, although coal production has now resumed and built up to full production of 150,000 tonnes per month which it said was ahead of budget.

Gympie reported revenues from its Eldorado gold mine rose to $16.1 million on the back of a 36% lift in gold production to 29,146 ounces for the half year. The mine achieved an operating profit before tax of $1.0 million and an EBITDA of $6.1 million.

Looking forward, the company said it expected to be cash flow positive at current production rates and hinted it would also consider equity raisings to strengthen its balance sheet.

“Over the next six months the group intends to establish capital reserves of $15 million or more from equity issues and any retained net cash flow.”

SHAW Stockbroking analyst Andrew Richard commented: “It was a poor result as expected due to the problems at the Southland coal mine, and its near-term outlook depends on its ability to consistently increase production at the mine.”

“We note the company said it was looking at raising equity in the next 6 months which may dampen the price in the near future,” he added.

At the close of trading Friday Gympie Gold shares were 1c lower at 38c.