Russia-focused Ovoca Gold (LON:OVG) reported a net profit of €7.17 million for the first half to end-June 2011 compared with a loss of €1.17 million a year earlier.
At the end of the period, the company had cash and cash equivalents and financial assets available for sale of US$54.09 million. Ovoca had circa 800,000 Polymetal common shares worth US$15.35 million, approximately US$28.74 million in cash and US$10.01 million in a diversified portfolio of gold mining equities.
The strategy behind Ovoca's holding of Polymetal shares and the investment in the GLG fund is to give Ovoca shareholders exposure to the gold price before Ovoca has its own gold production.
Its two main projects are located in the Magadan region: Stakhanovsky and Rassoshinskaya, which together contain an inferred resource of 1 million ounces of gold.
Ovoca expects to have an exploitation license for the Olcha deposit on the Rassoshinskaya licence by the end of 2011 or in early 2012. Olcha accounts for 650,000 ounces of the total resource.
Exploration continues on a number of prospects. At Podgorniy on Rassoshinskaya, Ovoca plans to complete a drilling programme of 5,000 meters, of which 4,000 metres is already completed.
At Zet near Olcha, it has drilled 2,500 metres, with the aim of establishing that surface mineralization shown by trench work extends to depth.
Ovoca expects first gold production at Stakhanovsky at the beginning of 2014.