Vatukoula Gold Mines unveiled a drop in half-year revenue on Wednesday following a decline in output.

Revenues for the six months to the end of February 2013 fell to £20.8m from £30.3m the previous year. Earnings before interest, tax, depreciation and amortisation (EBITDA) came to £1.0m, down from £4.2m.

The company posted an underlying operating loss of £2.1m, compared to a profit of £1.2m, reflecting a decline in production. The total underground tonnes mined fell to 0.20m from 0.24m.

During the first three months of the first half, the company heavily invested in capital development which opened up access to the high grade Cayzer-Prince mine in Fiji.

"Currently we are carrying out limited mining from this ore body which has been reflected in an increase in grade coming from the Phillip shaft of 6.9 grams/tonne compared to the previous six months which yielded 5.3 grams/tonne," Chief Executive Officer David Paxton said.

He said capital constraints in the last three months resulted in a 50% reduction in expenditure on development. However, large strides in the development of the Cazer-Prince have been made, he added.

"I have taken great confidence in an independent due diligence report that has confirmed that our long term production targets are achievable and that the mine development strategy is sound."

Shares fell 10% to 15.75p at 10:39 Wednesday.

RD

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