VANE Minerals (LON:VML) will stand out from the crowd of small-cap miners and explorers this results season after delivering a maiden first-half profit.
Its revenues rose 174 per cent to £3.4 million in the six months to June 30, giving a profit of £177,470.
It has repaid £500,000 of convertible loan stock and renegotiated the remaining £1 million over five years, paying a coupon of 8 per cent. The group is sitting on around £1 million of cash.
The revenues and profits were generated by the Mexico gold and silver operation, which processed 16,217 tonnes of ore in the first half, compared with 15,642 tonnes in the same period last year.
This equated to 2,208 ounces of gold and 48,311 ounces of silver. It sold the gold concentrate for an average of US$1,650 an ounce and the silver for US$31.04. The cash costs of producing the precious metals were respectively US$652.94 and US$11.92.
Chief executive David Newton said: "These are very pleasing results; the operational team should be congratulated for delivering the company's maiden profit, which in these financially challenging times, is a significant and impressive achievement.
“It also reflects the importance of our relationship with our Mexican joint venture partners, in which we have invested in excess of $300,000 alone on developing the La Colorada asset since we entered into the joint venture legal contract.
“This is in addition to a wider investment in the building and development of our Merrill Crowe facility, the ongoing development of our SDA mill, the identification of a resource at La Colorada and further preparatory work on the assets within the joint venture area."
The blue-sky is provided by VANE’s copper exploration in New Mexico and Arizona, home to 60 per cent of all US production of the metal.
The big discoveries to date, such as the Morcini and El Chino mines, are outcropping at surface.
There are more than 30 in total. And the theory suggests there’s a similar number hidden beneath the covered terrain of this metallogenic province. Around 60 per cent of this area is covered.
Using access it has garnered to mining giant Freeport McMoran’s database and other proprietary data, VANE is identifying potential hotspots and drill testing them.
In the period just gone it has drilled its Peg Leg and Railroad targets with negative results and property positions have been established at Bouse, Lone Hills and Cherry Creek.
More interestingly, a copper-molybdenum porphyry system was successfully drilled at McGhee Peak. It has identified two separate mineralised targets around a mile from each other. Diamond drilling is required to assess just how viable these discoveries are.
The third leg to the VANE business focuses on uranium and it owns 50 per cent of the Wate Mining Company with Uranium One.
Exploration has been scaled back following the formal withdrawal of the federal lands by the US Government in order to help protect the company's cash resources.