Mining firm Minara Resources Ltd (ASX: MRE) reported on Tuesday gains on its half year profit despite the prevalence of volatility in nickel and cobalt prices, which are the company's present market focus.

The Perth-based company said that as of June 30 this year, first half net profit reached $39.316 million coming from the loss of $3.05 million in the same period last year and full year profit of $48.5 million in 2009.

Also, revenues from the same period jumped by 23 percent to $233.74 million as compared to the $190.11 million posted in the same period last year.

Minara said that a pipeline breakdown in May this year led to lower productions for the first six months of 2010, managing only an output of 14,512 tonnes of nickel packaged and 1,008 tonnes of cobalt packaged. That pipeline failure also led to spikes in direct cash cost of $US5.76 per pound nickel.

The company said that its focus markets remain volatile as the half-year nickel price in London Metal Exchange (LME) ranged from $US17,035 per tonne to $US27,600 per tonne while the cobalt price at 99.3 percent LMB ranged from $US17.10 per lb to $US21.75 per lb.

Yet despite the market uncertainty, Minara said that it would issue returns of up to $111 million capital to shareholders at 9.5 cents per security as chief executive Peter Johnston declared that the move is reflective of the board's confidence on the company's financial strength.

Mr Johnston said that the company secured a steady source of manganese when it purchased Crescent Gold's Mt Lucky tenements, which would allow Minara to process additional nickel-sulphide feeds while it is focused on "our statutory maintenance shutdown in October and then consolidate a steady production profile at Murrin Murrin."

Minara said that its cash reserves stood at $363 million as of June 30 but company shares had retreated by half a cent to 74 cents as of 1131 AEST on Tuesday, though it steered clear of any debts during the half year.