The company bounced back into the black with a profit before tax of US$3.1mln in the three months to 29 February, 2016, having made a loss of US$1.9mln in the corresponding period the year before.
This was despite sales tumbling to US$8.9mln from US$16.4mln the year before, as production was cut back to 7,274 ounces from 13,760 ounces the year before.
The company has succeeded in getting all-in sustaining costs (AISC) of production below US$1,000 an ounce, and the plan is to keep it below that level for the remainder of the financial year, which runs to the end of May.
AISC of US$978 an ounce represented a significant improvement over the US$1,132 an ounce in the same period a year earlier and the US$1,095 an ounce in the preceding quarter.
The company said AISC for the full year should be somewhere between US$1,000 and US$1,100 an ounce.
The average gold price received in the fiscal third quarter was US$1,143 an ounce, versus US$1,220 an ounce a year earlier.
The company ended the reporting period with a cash balance of US$2.0mln, down from US$2.6mln at the end of November 2015, and debt of US$0.4mln (November 2015: US$0.8mln).
The company revealed Alejandra López, currently the Controller of Orosur, has been promoted to interim chief financial officer.
“Alejandra possesses a strong skill set and knowledge of our operations, and her work in recent months has been extremely valuable,” said Ignacio Salazar, chief executive officer of Orosur.
“This quarter saw our strategic plan to reduce costs come to fruition, positioning the company as a more resilient producer in this current gold price environment,” Salazar said.
“Additionally, the company received all required permits to commence the development of San Gregorio Deeps without the need for external funding. We are also advancing our portfolio of exploration assets, prioritising our projects with near term returns in Uruguay, those of higher quality in Colombia and those which are already financed such as Anillo in Chile,” he added.
Broker Cantor Fitzgerald said the miner was shaping up for a strong second half.
Analyst Asa Bridle said he now expects the group to slightly exceed the top end of its annual production guidance (Cantor's estimate is 35,500 ounces) and to meet its target of all in sustaining costs (AISC) of being below US$1,000/oz in the second half, and between US$1,000-1,100/oz for the full year.
"We expect EBITDA to rise from US$1m at the interim stage to US$7.9m by year end," he added.
"Based on a conservative assumption of a US$1,200/oz gold price over the medium term, management are now assuming a stable production profile in the 30-35koz/year range," he noted.
"However, if gold returns to US$1,300/oz, OMI would have the option of lifting production back to 50-55koz/year, but in the meantime the focus remains firmly on profitably over scale."
The broker rates the shares a 'buy' and has an unchanged target price of 22p.
Shares are today at 8.375p - up 3.08%.
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