Revett Minerals (RVM.TO, NYSEMKT:RVM) announced its Q2 financial results and an update on the Troy Mine where the company is trying to regain access to mineralized zones after a seismic event caused Revett to close the mine in December of last year.
As expected, the company reported a net loss, as there were no revenues from the Troy Mine in Q2. This resulted in a net loss of $4.1M. Revett also reported a net cash outflow of $13.2M in the first six months of this year, which means the company lost approximately $2.2M per month. Revett terminated the contracts of quite a few employees in the second half of Q2, and we now expect the monthly cash drain to be reduced to $1.25M.
The company seems to be making good progress at regaining access to the ore, and dewatering of the D Drive has commenced. If access to its mining areas can be established through the Lower Quartzite haulage route, Revett thinks the Troy Mine could re-open in Q4 of this year, but we are aiming at Q1 2014. The most important thing is obviously to get Troy back into production, as even at the current low silver price, the mine will generate approximately $10M per annum in operational cash flow which will allow Revett to build up its cash position again.
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Disclosure: The author holds a long position in Revett Minerals. Revett is a sponsor of the website. Please see our disclaimer for current positions.
