The company is uncertain when it will be able to resume operations at its Gold Ridge mine in the Solomon Islands and its Eureka lode in Zimbabwe. Work was suspended at both locations in June.
Production will be reduced a further 150,000oz due to declining output by its Australian operations.
The company posted a record production of 603,429oz for the year ended June 30.
This financial year, Delta’s wholly-owned Kanwona Belle mine, 18km north-east of Kalgoorlie, should produce 250,000oz, down from 268,000oz last year. Its 40% interest in the Granny Smith mine near Laverton should yield 150,000oz, down from 200,000oz, while its wholly-owned Golden Feather lode, 20km north-east of Kalgoorlie, should produce 50,000oz, against 135,000oz last year.
However, DJ Carmichael still considers Delta to be undervalued at around $1.27 per share. Even with no contribution from its Solomon Islands and Zimbabwe operations, the broker placed a worst case scenario valuation of $1.32 on the company.
“Delta’s low cost production profile coupled with the low Australian dollar makes Delta the prime takeover target in the gold sector,” analyst Terry Burns said in a research paper.
South African predator AngloGold, although claiming it is not looking for more acquisitions in Australia, has indicated interest in gold producers that meet its ‘three 2s’ – cash costs of US$200/oz, a reserve base of greater then 2 million oz, and at least 200,000oz of annual production.
Delta fits each of these requirements, and the low Australian dollar adds to its appeal.
