The Australian miner bit the bullet and wrote down its Eureka heap leach gold mine and platinum assets in Zimbabwe by $61.9 million and its Gold Ridge mine in the Solomon Island by $81.8 million.

Of the $143.7 million total asset writedown, $129 million was for non-cash items.

Managing director and CEO Terry Burgess said political risk insurance and debt recourse would mitigate further losses from the mine closures, adding that in both cases the company was confident viable operations could resume in future.

By taking the pain all in one hit, it gives the company’s balance sheet a chance to move forward and could prove a boon if the situation turns out to be not as bad as expected, said DJ Carmichael analyst Terry Burns.

But Delta’s offshore troubles masked a strong performance by its Australian operations, which helped it to a pre-abnormals, after tax profit of $27.7 million.

Strong revenue growth and operating cashflow reflect a robust performance by its Kanowna Belle (Delta 100%), Golden Feather (Delta 100%) and Granny Smith (Delta 40%) operations.

Sales revenue increased by 59% to $323 million and operating cash flow increased by $30.2 million to $98.8 million. The realised gold price rose to $509 per ounce from $483/oz the year before and represents $62/oz more than the average spot price for 1999-2000.

Gold shipments reached a record 634,302oz, 51% more than the previous year, with Australian operations contributing 609,302oz.

Delta also announced that it has increased its resources by 52% to 11.1 million oz of gold and its reserves by 97% to 3.6Moz, based on a gold price of $450/oz.

The company attributed the net increase to its purchase of the remaining 50% of Kanowna Belle and its acquisition of Gold Ridge.

It expects to produce 450,000-500,000oz of gold this year.

Delta shares were down 4c to $1.28 in mid-afternoon trade off a high of $1.33.

 

(Million Ounces, Delta’s Share)	30 June 2000	30 June 1999	Net Increase(Decrease)
Kanowna Belle	2.7	1.5	1.2
Kanowna District	0.7	0.3	0.4
Golden Feather	0.5	0.7	(0.2)
Granny Smith	2.3	2.2	0.1
Metex Joint Venture	0.3	0.3	-
Drummond Basin	0.4	-	0.4
Timbarra	0.4	-	0.4
Gold Ridge	2.4	-	2.4
Eureka	0.9	1.2	(0.3)
Kwe Kwe	0.6	0.8	(0.2)
Total Mineral Resources	11.1	7.3	3.8

Ore Reserves (all categories, contained gold)

(Million Ounces,Delta’s Share)	30 June 2000	30 June 1999	Net Increase(Decrease)
Kanowna Belle	1.2	0.8	0.5
Golden Feather	0.1	0.1	-
Granny Smith	0.4	0.5	(0.1)
Drummond Basin	0.1	-	0.1
Gold Ridge	1.6	-	1.6
Eureka	0.2	0.4	(0.2)
Total Mineral Resources	3.6	1.8	1.8