BornOil Q2 turnover surges

LABUAN: Borneo Oil Bhd (BornOil) put on another strong showing, posting a higher turnover of RM51.18 million for the second quarter compared with RM19.32 million a year earlier, thanks to better contribution from the group's oil, gas, mining and related activities, as well as its fast food division.

For the first half year, revenue soared to RM65.81 million from RM27.39 million while net profit climbed to RM3.41 million from RM845,000 a year before.

BornOil executive director Raymond Teo said progress has been encouraging and that production sharing agreements secured are the start of bigger things to come.

"We are fast reinventing our company as a proxy for the Malaysian gold mining industry," said Teo.

From an operations perspective, he said the timing of the company's entry into gold mining couldn't be more ideal.

He said the weakening ringgit has worked in BornOil's favour as the direct cost of production has gone down (since production cost is incurred in ringgit).

To-date, BornOil has signed exclusive production sharing agreements to carry out mining works at five sites on 1,500ha in Pahang. The mining arrangements do not carry any acquisition cost as infrastructure and development facilities were already in place at the two sites.

As a result, BornOil saved a great deal on capital expenditure in terms of infrastructure and pre-mining preparations, said Teo.

Gold prices recently ran up to a six-week high as investors globally sought the commodity as a safe haven amid the backdrop of currency uncertainties and falling stock markets.

Last month, HSBC in a report predicted that the price of gold will rise by some 10% by the year-end to US$1,225 an ounce. Gold closed at US$1,135 an ounce 

Teo also estimates that there are low hanging fruits in the form of available alluvial ores of about 300,000 tonnes at Merapoh and 500,000 tonnes at Bukit Ibam, together with a combined tailing inventories of 1.7 million tonnes at Merapoh and 1.6 million tonnes at Bukit Ibam.

These available ores/tailings will keep BornOil busy for the next three years, while the quest for hard rock lode gold will continue through an exploration programme on both the areas, he elaborated.

Preliminary assessments have been conducted on the volume and grades of gold on both the alluvial and tailings and, once confirmed independently by a third party geologist, an announcement will be made by the company.

Meanwhile, BornOil shareholders have approved the company's renounceable six-for-one rights issue together with free detachable Warrants on the basis of one warrant for every two rights shares subscribed to.

BornOil's substantial shareholders Victoria Ltd and Hap Seng Insurance Services Sdn Bhd have subscribed in full for their respective entitlements. - Bernama