WA Gascoyne gold miner completes solid year of mining
Gascoyne Resources, an ASX-listed gold mining company, delivered another strong quarterly operating performance at its 100% owned operation in Dalgaranga, about 65 km northwest of Mount Magnet in the region of Murchison in WA, for the three months ending in late June. After meeting key production and operating criteria for fiscal 2021, Gascoyne has positioned itself for growth with the recently announced strategic acquisition of Firefly Resources and its source of shallow, higher grade gold resources at trucking distance from Dalgaranga.
The acquisition increases Gascoyne’s tenure in the district to 1,200 square kilometers of very promising greenstone terrane.
In mid-June, we announced the merger agreement with Firefly. We are very excited about the opportunity this transaction will offer Gascoyne. Access to shallow, high-grade ore and an extensive remote trucking exploration program from Dalgaranga could be a game-changer for Gascoyne over the next two years.
Gascoyne’s current title exploration included more than 16,000 m of drilling during the last quarter at Dalgaranga, Greencock, Mt Egerton and Glenburgh.
Notable drill intersections were reported on the company’s Tanqueray East prospect and included 28 m grading 2.5 grams per tonne gold, including 7 m at 5 g / t gold from 114 m downhole. hole. Other results are expected to flow steadily over the next quarter.
Perth-based Gascoyne produced 17,416 ounces of gold in the June quarter, up from 19,203 ounces in the previous three months. Most of the ore from the June quarter was mined from the main Gilbey zone, completing the first stage of the mining plan. The additional ore came from the suspended vein located at the north end of the Gilbey pit, where lower recoveries were expected from processing shale ore and high sulphide ores.
With the end of the first stage mining of the Gilbey main area, a total of $ 6.3 million has been invested in the pre-stripping of the second stage of the Gilbey pit to ensure a constant flow of ore to the processing plant for the next quarter.
Total ore throughput of 655,000 tonnes in the June quarter was down from the 704,000 tonnes achieved in the March quarter due to a planned major shutdown of the plant. It increased the total ore throughput for fiscal 2021 to 2.64 million tonnes, a capacity well above the nominal capacity of 2.5 million tonnes, giving the company increased confidence that the plant may exceed its rated capacity.
Cash processing costs for the June quarter were $ 13.86 per tonne compared to a cost of $ 11.44 for the March quarter. Costs were impacted by lower extraction rates and the planned shutdown. For fiscal 2021, the average cash processing cost was $ 12.60 per tonne, which the company said confirmed “the Dalgaranga processing plant is one of the most efficient and least cost-effective gold processing plants for its size in Australia ”.
Gascoyne maintained the required quarterly repayments of the $ 3.5 million loan, reducing the debt to $ 14 million. With a history of strong production and high cash flow at currently high gold prices, the company is on track to free itself from debt by the end of the current fiscal year, which represents a complete turnaround. for the once-struggling gold miner.
At the end of fiscal 2021, the company’s cash balance was $ 23.4 million.
With a total of 77,278 ounces of gold produced for fiscal 2021, Gascoyne comfortably met its gold production targets for the full 12 months of 70,000 to 80,000 ounces. All-inclusive sustaining costs of gold production during FY21 averaged an encouraging $ 1,589 per ounce.
The company’s production forecast sees all-in sustaining costs of an average of $ 1,200 to $ 1,300 per ounce for the current year.
Gascoyne has a total of 44,782 ounces of gold production futures sold at an average price of $ 2,564 per ounce over the next 15 months.
The spot price of gold is currently at $ 2,443 per ounce.
During the June quarter, Gascoyne also released updated figures on mineral resources and ore reserves at Dalgaranga with a resource estimate of 25 million tonnes of ore with an average grade of 0.8 grams per ton for 648,900 ounces of gold contained.
The probable and proven ore reserves contained in the Dalgaranga resource amount to 13.5 million tonnes at an average grade of 0.8 g / t for 339,000 ounces of gold contained.
Gascoyne faced more than its fair share of hurdles in the last quarter with unusual humid weather conditions, low numbers, a scheduled plant shutdown and reduced mining rates due to the mining transition from the second stage, all impacting mining production and temporarily increasing costs.
On the other hand, however, with second stage mining operations progressing on schedule, improvements to the gravity circuit during shutdown, and the plant’s technical team developing a better understanding of high sulphide ore processing, Gascoyne has favorable winds in its sails ahead of the new fiscal year.
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