Perilya puts cash to good use

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    Perilya puts cash to good use

    From: The Australian January 29, 2010 12:00AM

    LEAD and zinc miner Perilya says it is cashed up and ready to pursue growth opportunities as it prepares to make development decisions on several projects in coming months.

    The company had $116.7 million in cash at the end of December, up from $46.2m at the end of September, after by a one-for-three rights issue in November that raised about $55.2m before transaction costs.

    The share offer was supported by 52 per cent shareholder Zhongjin Lingnan Mining HK of China.

    Perilya generated cashflow of $16.1m from mining operations in the December quarter, amid a stronger price environment for lead and zinc than a year ago.

    It had $US50m ($55.9m) of corporate debt and about $4.6m in operating debt at the end of last year.

    "The company experienced another very strong cashflow-accretive quarter from operations which, coupled with the funds raised via the rights issue, places the company on a very sound footing to pursue both internal growth opportunities . . . and external opportunities that may present themselves," chief executive Paul Arndt said.

    Mr Arndt said Perilya would use the funds raised to evaluate and work on satellite ore deposits close to its Broken Hill operations, the Reliance project in South Australia's Flinders Ranges and the Mount Oxide project in Queensland.

    "While these projects are at various stages of progress, from exploration through to feasibility, it is anticipated that in the coming months some of these projects will go before the Perilya board for development decisions," he said.

    Perilya's combined metal production for the December quarter of 35,400 tonnes of contained zinc and lead was 18 per cent above market guidance.

    "Whilst current demand for all metals appears to be improving as the global economy recovers from the financial crisis of 2008-09, it still remains relatively weak," it said. "Notwithstanding this, Perilya continues to believe that zinc and lead market fundamentals remain sound over the medium and longer term."

    AAP

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