Gold miner Primero Mining posted a second-quarter profit on Wednesday, helped by higher gold grades, record-high bullion prices and first silver sales at spot prices.
Toronto-based Primero, whose only producing asset is the San Dimas gold-silver mine in Durango, Mexico, earned $3.9 million, or 4 cents a share in the second-quarter, compared with a loss of $7.9 million, or 9 cents a share, in the first quarter of the year.
Prior to acquiring the San Dimas mine from Goldcorp in August 2010, the company did not have any producing mines and hence did not realize any revenue or earnings from mine operation.
Primero, which agreed to sell itself to Vancouver-based Northgate Minerals for C$370.4 million in July, posted a 20 percent rise in revenue at $40.8 million.
The miner sold 18,800 ounces of gold at an average price of $1,523 per ounce in the second quarter. Gold, which currently trades at $1762.39 per ounce, has risen over 40 percent in the last 12 months, as concerns about U.S. and European sovereign debt drive investment into the traditional safe haven.
The company, which sells the bulk of the silver produced from San Dimas to Silver Wheaton at well below market prices, under agreements it inherited with the acquisition of the mine, said it started to sell half of its silver output at spot prices in June.
The company sold 260,600 ounces of silver at an average spot price of $34.59 during the second quarter, boosting revenue from silver, which generated about 30 percent of total second quarter revenue.
Primero shares closed at C$4.33 on Tuesday on the Toronto Stock Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Saumyadeb Chakrabarty)