Release: Aurora posts A$5.3 million net annual profit

Aurora Gold Ltd (ASX: AUG) has returned to the black following last year's major asset adjustments, today posting a $5.264 million net annual profit after tax for a period which saw the Perth-based gold and silver miner again overcome significant operating difficulties at its Mt Muro mine in Indonesia.

Mt Muro continued to be a strong cash generator for Aurora, achieving its second best annual production result since project inception - a 13% increase on last year's output to 253,250 gold equivalent ounces. This included record monthly production of 30,192 ounces in October and record quarterly output of 73,780 ounces in the third quarter.

However, lower realised prices for its products and a consequent 4% drop in sales revenue was the major factor behind a reduction in underlying profitability. Aurora posted a $1.557 million operating profit before income tax and abnormal items, compared with a $7.151 million profit for the previous year.

By contrast, the bottom line profit of $5.625 million contrasted sharply with a $93.883 million loss last year, which included $97 million worth of asset adjustments on Aurora's Indonesian assets. The 2000 result included an income tax credit of $2.015 million and a $1.692 million abnormal gain.

Mt Muro's production was based on plant throughput of 1,506,847 tonnes, representing only a 3.7% reduction on the previous year's performance despite serious illegal mining constraints during the first half. Cash operating costs increased slightly to $324 per ounce from $309 per ounce last year due to unfavourable exchange rate movements.

Aurora's Managing Director and Chief Executive Officer, Mr Alan Scott, said Mt Muro had posted an excellent performance under the circumstances and continued to improve the Company's cash position, with cash on hand increasing by $28.6 million to $37.8 million at year end.

"This provides Aurora with some solid opportunities as the Company moves into a transition phase with its projects and assesses new directions," Mr Scott said.

"Mt Muro continues to perform strongly and has not been affected by the recent unrest in Indonesia," he added. "We are optimistic that it will continue to operate strongly for some time to come."

Aurora has already announced its decision to sell its 85% interest in the Toka Tindung project in Sulawesi following the damaging and widespread impact of illegal mining at the satellite Talawaan prospect.

The Company is currently focusing on a number of new opportunities, including the 50%-owned Morobe Project in Papua New Guinea, where resources were boosted during the year by 800,000 gold equivalent ounces to over 5 million ounces with confidence in the resource significantly increased.

Mr Scott said the bankable feasibility study for Morobe, which was due for completion at the end of February 2001, had been extended to enable further consideration of some additional key issues required to fully optimise the project.

These issues include power supply, tailings and waste management, the process flowsheet, access roads and other infrastructure. Work on the extension is already underway, with the study now expected to be finalised by the end of May 2001.

"We believe this work, and our planned expansion of regional exploration activities within the Morobe tenements, will further enhance the project," Mr Scott said.

Aurora also announced during the year an initial gold resource estimate of 6.6 million tonnes at 2.3 g/t for its Fortitude Prospect at Lake Carey in the Laverton region of Western Australia. Drilling work at Lake Carey is continuing.

Mr Scott said project generation and tenement acquisition had continued during the year, with several promising new properties identified for ongoing fieldwork in Australia and Papua New Guinea.

Contacts: Jan Hope/Nicholas Read, Jan Hope & Partners, Telephone: (08) 9388-1474; or Mr Alan Scott, Managing Director & CEO, Aurora Gold Ltd, Telephone: (08) 9424-3500 (*)