Perth 18 April 2019
I am pleased to present to shareholders, the Dragon Mining Limited (the “Company”) Annual Report for the year ended 31 December 2018. The year was particularly challenging for all the Company’s staff in view of the additional workload generated by the pursuit of the Company’s listing on the Stock Exchange of Hong Kong. I would like to express my appreciation, and that of the shareholders, to all staff for this additional effort.
A highlight of the year was the listing of the Company on the Stock Exchange of Hong Kong on 5 November 2018. This listing enabled the Company to raise funds for the development of the Fäboliden Gold Project (“Fäboliden”), and we hope that it will prove beneficial to shareholders in the future.
Operationally and financially the Company also faced a difficult year, but significant progress was made which should provide future benefits for Company.
In Finland, the Jokisivu mine performed. At Orivesi, known reserves are almost depleted. Difficult mining issues experienced during the last few weeks of the year delayed mining, causing a shortfall in anticipated ore production at Orivesi during this period. This issue was exacerbated by a problem with our primary crusher in December, resulting in an inability to crush the harder Orivesi ore for a short period. On the positive side, these mining delays have resulted in the present expectation that Orivesi will remain in production until May 2019, when it will be placed on care and maintenance while further exploration and evaluation drilling will be carried out.
Again, on a positive note overburden stripping is taking place at the Company’s new mine at Kaapelinkulma and its expected that ore production will commence by the end of March 2019, despite the difficulties experienced because of protests by certain activists opposed to mining. The Vammala plant has continued to operate satisfactorily.
In Sweden, the test mining permit at Fäboliden for 100,000 tonnes was finally obtained and removal of overburden undertaken in preparation for mining to commence after March 2019. The application for the Environmental Permit for the full mining permit was submitted during the year and is being processed. The Company currently expects treatment for the test mining ore to commence at the Svartliden plant in August 2019.
Financially the significant cost of keeping the Svartliden plant operational in readiness to treat the Fäboliden ore together with the expensed listing costs adversely impacted the Company’s results generating a net loss of AU$9.5 million for the year.
The Company will continue to pursue long term production from Fäboliden and continued production from Jokisivu and Kaapelinkulma in Finland as the key to the future, whilst continuing with further exploration and evaluation drilling at Orivesi.
I again wish to express my sincere thanks to our Directors and loyal staff for their support and efforts during this difficult year. I also thank our shareholders for their ongoing support.
Arthur G. Dew