Deccan Gold Mines Shares Fall 4% Amid Profit Booking Day After Hitting 10-Month High
The Jonnagiri project is among the first privately held gold mining initiatives in India in last 80 years to reach this advanced stage of regulatory approval.
Shares of Deccan Gold Mines Ltd. fell nearly 4% on Friday, a day after it hit 10-month high following news its associate firm Geomysore Services (India) received the Consent to Operate from the Andhra Pradesh Pollution Control Board for its Jonnagiri Gold Project.
The Jonnagiri project is among the first privately held gold mining initiatives in India in last 80 years to reach this advanced stage of regulatory approval.
The final permission from the Andhra Pradesh Pollution Control Board means that the company can operate the mines and the processing plant. However, it will take a couple of months to begin operation as there is a need to conduct a few trial runs before the operations begin, according to Hanuma Prasad Modali, managing director of Deccan Gold Mines.
Open-pit mining operation and simple metallurgy of the gold ore makes this project highly profitable.
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At its peak, the mines will produce 750 kg of gold. "In first year, it will produce 400 kg of gold, but in its final stage the mine will produce 750 kg of gold per annum," Modali told NDTV Profit.
While discussing the revenue gains from the mine, he said that in the first year, they expect to make a revenue of Rs 300-350 crore, if they pull out 400 kgs of gold at an Ebitda margin of 60%. This is likely to happen in financial year 2027, he added.
Jonnagiri project has obtained all the government approvals, that include CFE, CFO and water withdrawal from a nearby canal. Currently, land acquisition is in progress, following which, Geomysore is planning to erect and commission the processing plant and other infrastructure, the company said on its website.
Deccan Gold Mines Share Price Decline
Shares of Deccan Gold Mines fell as much as 3.85% to Rs 157.4 apiece, the lowest level since June 4. They pared gains to trade 1.65% lower at Rs 163.7 apiece, as of 9:29 a.m. This compares to a 0.14% decline in the Sensex.
The stock has risen 52.05% in the last 12 months and 41.50% year-to-date. Total traded volume so far in the day stood at 0.57 times its 30-day average. The relative strength index was at 54.41.
