UPDATE 2-Primero posts surprise profit, to step up exploration

Thu Feb 24, 2011 4:58pm GMT

Primero, which forecast 2011 production of 110,000-120,000 gold equivalent ounces, said 2012 production is expected to be 25-30 percent higher due to higher grades and throughput.


The Toronto, Ontario-based company posted a fourth-quarter net profit of $1.8 million, or 2 cents a share, compared with a net loss of $333,000, or 11 cents a share, a year ago.

On an adjusted basis, it earned 3 cents a share, compared with analysts' average estimate of a loss of 2 cents a share, according to Thomson Reuters I/B/E/S.

Production rose 14 percent sequentially to 24,800 gold equivalent ounces.

Revenue more than doubled sequentially to $41.4 million due to higher production, reflecting the first full quarter of ownership of the San Dimas mine.

About half of the operating costs at San Dimas , which consists of five ore zones, are fixed and, as a result, total cash costs are expected to trend below $450 per gold equivalent ounce over three years, the company said.

Primero shares, which have gained more than two-thirds of their value in the last one year, were down 8 Canadian cents at C$4.05 on Thursday morning on the Toronto Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Anne Pallivathuckal)

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