Goldfields projects 1.4% hike in 2019 production

first_img– as 2018 figures plungeThe Canadian-based Guyana Goldfields Inc is looking to increase gold production at its Aurora Gold Mine in Region Seven (Cuyuni-Mazaruni) this year after recording a decline in 2018. The company currently operates the large gold mining operation in the country.According to financial records, the company produced 150,450 ounces last year, a decrease of 10,050 ounces compared to production from the prior year. The decrease, it explained, was mainly attributable to a lower head grade of 1.99 g/t Au (2017 – 2.46 g/t Au), offset by higher mill throughputs averaging 7100 tpd (2017 – 6100 tpd). The daily average mining rate improved by 50 per cent in order to meet the increase in stripping ratio for Rory’s Knoll open pit development. In 2018, the mill processed an average of 7000 tpd, representing a 15 per cent increase compared to an average of 6100 tpd in the prior year.However, with the Phase 2 mill expansion commissioned in February 2019, it is expected to further improve recovery by up to two per cent, throughout by 10 per cent, and allow for 75 per cent redundancy of the primary crusher.The Guyana Goldfields’ earnings from mine operations were $36.6 million for 2018, a decline of $21.6 million from the prior year and this was largely driven by increased mining and processing volumes, lower gold ounces sold from lower average head grade and increased production costs. These declines in production costs were offset by lower deprecation and lower cost of sales adjustment.Consequently, the company finished the year with a cash balance of $82 million and total debt reduced to $40 million, down from $60 million as at the end of 2017. The company elected not to make the voluntary accelerated debt repayment of $20 million during the fourth quarter of 2018, providing the company with additional short-term liquidity.  Under the current terms of the loan agreement, the company is scheduled to make eight additional quarterly payments of $5 million to retire the debt over the next two years.Nevertheless, going forward in 2019, the Canadian-based company expects gold production to be between 145,000-160,000 ounces in 2019. The mid-point of production guidance is 152,500 ounces, which, if achieved, would represent an increase of 1.4 per cent from 2018. The company expects production will be evenly weighted in first and second half of the year.President and Chief Executive Officer (CEO) Scott Caldwell says, “As we open a new chapter at Aurora, we will continue to focus on improving efficiency and maximising operating cash flow, while maintaining our admirable safety record, including our achievement earlier this month of one million-person hours without a lost time injury.”As part of its 2019 work programme, the company has updated its resource model and the life of mine plan. This includes an estimated average annual recovered gold production of 218,000 ounces over the next five years; a total recovered gold production of 2.15 million ounces at an average estimated head grade of 2.6 grams per tonne (g/t Au) over a 13-year mine life, and a total capital of $124 million to develop the underground mine and $256 million in sustaining capital.“Aurora has produced more than 500,000 ounces of gold in just over three years of commercial production and, despite some tough challenges, we remain confident in our future success,” Caldwell pointed out.He stressed that a profitable future is inevitable as the mine transitions from an open pit operation into an underground mine.“We have identified and initiated a number of cost savings programmes that will lead to improved operational efficiency. We have strengthened our leadership team, streamlined our organisational structure, initiated partnership arrangements with key contractors and suppliers and, in addition, implemented improved operating procedures and optimised our capital spending.We continue to believe that there is considerable, untapped potential for additional, high-quality ounces in this system. We expect to access high-grade zones beneath “Mad Kiss” with our underground exploration development later this year and will look to secure our permit for commercial underground production in a timely manner.”However, even as the Guyana Goldfields gears up for its underground operations – the first modern underground mine developed in Guyana – it recently had a run in with the Environment Protection Agency (EPA), which has admonished the company for insinuating that it was granted approval to commence underground operations when it only received a permit to conduct prospective works for the collection of data.As such, the Canadian mining company noted that the underground decline is intended for “exploration and definition drilling in support of eventual planned underground production.”Going forward, it added that the contractor will complete and reinforce the collar and extend the decline 200 metres to fulfil the scope of the early works phase. The company expects this work will take approximately three months to complete once the contractor is fully mobilised. A budget of $2.0 million has been approved for the early works phase.In addition, the company said it is finalising the review of bids received for the underground development contract with the target of final award in the second quarter of 2019.Apart of the recent run in with the EPA, the company is also facing internal issues with shareholders calling for shake-up of the company’s leadership reportedly over poor performance and declining stock prices.last_img

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