Red River Resources moves into the black as half year revenues double, boosted by increased sales and favourable metal prices

Red River Resources Ltd (ASX:RVR) (FRA:R1R) recorded a 107.8% rise in revenue from continuing operations in the six months to December 31, 2020, boosted by the increased sales of copper, zinc and lead concentrates and more favourable metal prices.  The half-year was a transformational period for Red River as it became a diversified, multi-asset mining company, with record copper concentrate production at Thalanga in Queensland, and first ore processed at the Hillgrove Gold Mine in NSW. During the period, revenue amounted to $68.09 million, compared to $32.98 million in the previous corresponding period.  The company recorded a profit after income tax for the period to December 31, 2020, of $11.0 million from a loss of $5.23 million in the December 31, 2019, half-year.  Half-year results Sales realisation costs increased from $10.28 million at half-year December 2019 to $12.68 million in half-year December 2020, with the increased cost of realising higher sales tonnage (up 62%) being substantially offset by decreased treatment charges per tonne of zinc concentrate. Production costs (excluding movement in ore and concentrate stocks on hand) increased from $17.47 million in half-year December 2019 to $21.49 million in half-year December 2020, primarily due to higher tonnes being mined and processed at the Thalanga Operation. The company recorded a profit after income tax for the period to December 31, 2020, of $11.0 million compared to the December 2019 half-year loss of $5.23 million. Cash flow Operating cash flow for the period ended December 31, 2020, increased by $33.52 million to $27.42 million, with increased concentrate sales receipts being partially offset by higher sales realisation and operating cash costs. Sales realisation and operating cash costs were higher due to increased concentrate being produced and sold. Cash outflow from investing activities for the period ended December 31, 2020, increased by $5.54 million to $13.81 million from $8.26 million. The increase in cash expenditure on mine property and development is due to higher levels of decline development at the Far West Mine and the increased payments for property, plant and equipment reflects the cost of restart activities at the Hillgrove Gold Mine. Net cash outflow from financing activities of $6.38 million for the period ended December 31, 2020, was $6.73 million higher than the previous corresponding period (December 31, 2019: $0.35 million net inflow), mainly from the repayment of the working capital facility drawn down in March 2020. Cash and cash equivalents increased in the period ended December 31, 2020, by $7.23 million with cash and cash equivalent at the end of the period of $15.31 million (June 30, 2020: $8.08 million) Operation and development of Thalanga The principal activities during the half-year ended December 31, 2020, were the operation and development of the Thalanga Operation in Northern Queensland and exploration and evaluation of its tenements, and carrying out care & maintenance and then restart activities at the Hillgrove Gold Mine. In the half-year, it recorded record copper concentrate production of 7,637 DMT, zinc concentrate production of 14,456 DMT and lead concentrate production of 3,861 DMT. Hillgrove activities At Hillgrove, first ore was processed through the Hillgrove Mill on December 28, 2020. Red River is processing ore from Bakers Creek stockpile in Stage 1 while drilling programs were undertaken at the Elenora and Curry’s Lode targets. During the half-year, Hillgrove's mineral resource increased to 692,000 ounces contained gold. Exploration and development activities Sampling and mapping at the Orient Silver-Indium Project confirmed the presence of extensive high-grade epithermal silver-lead-zinc mineralisation with associated large-scale alteration systems. Orient East has been confirmed as a high priority bulk tonnage silver mineralisation drill target.