Threefold rise in profits at mines
Accounts show Galmoy Mines Ltd enjoyed the sharp rise in profits after revenues at the firm increased by 170%, from €10.6m to €28.7m, in the 12 months to the end of Dec 31, 2011.
However, in accounts for Galmoy Ltd, the firm’s auditors PWC confirm that “mine extraction activity at Galmoy ceased in late 2012”.
Production at the mine was due to cease in Jun 2009, with the loss of 220 jobs, as a result of the fall in the price of zinc making the mine unviable economically.
However, the mining operation got a late reprieve due to the price of zinc climbing significantly.
In their new auditor’s report, PWC state that “provisions have been made in these and earlier financial statements for costs associated with the mine closure and rehabilitation works.
“The accounts have been prepared on a going concern basis because it is the directors’ understanding that the company will be supported by the parent group until such time as the rehabilitation works process is complete, which may be some years from the present date.”
The directors’ report says of the 2011 performance: “Rehabilitation works at the mine have commenced and are expected to continue until 2013 with monitoring activities continuing thereafter to effect wind-down of the mine.”
The report adds: “The financial statements include provisions for costs related to the impact of the initial decision to close the mine during 2009, however, have not been prepared on a wind-up basis, as the company continues mining and is not expected to be liquidated until full rehabilitation works are completed.
“The parent company has committed to fund any excess costs arising to the extent necessary in order to affect an orderly wind-down of the company.
The figures show that the company’s operating profit last year increased from €5m to €18.9m.
The 2011 profit reduced the firm’s accumulated losses from €22m to €3.3m
