Millennium Minerals generates $25.4m from gold sales in September quarter
Millennium Minerals (ASX: MOY) produced 19,549 ounces doré bullion from the Nullagine project in Western Australia during the September 2013 quarter.
This was in line with previous quarters although fine gold yield was
reduced by 791 ounces (5%) to 15,650 as foreshadowed earlier.
Gold
sales revenue for the period was $25.4 million, generated from 16,438
ounces sold at an average price received of $1,542 per ounce, in line
with guidance.
Millennium's sales benefitted from its hedging at
$1,570 per ounce, compared to the average spot price received of $1,472
per ounce.
The company's 'in the money' hedge book was valued at
$11.45 million as at 30 September 2013 (mark-to-market at a gold spot
price of A$1,426 per ounce) based on remaining 73,775 ounces being
hedged at an average price of A$1,631 per ounce.
Millennium has provided guidance of between 23,000 ounces and 25,000 ounces for the December quarter.
The company is well-funded with cash and gold bullion of $10.1 million at the end of September.
Production breakdown
The
production is in line with previous quarters although fine gold yield
reduced by 791 ounces (5%) to 15,650 ounces as foreshadowed in the
market announcement on 11 September 2013.
The company said that
lower production was due to lower grades being mined and milled.
Throughput tonnage was maintained at 369,244 tonnes (within 1.5% of
budget). Gold sales of 16,438 ounces were in line with guidance.
Gold sales
Gold
sales revenue for the quarter was $25.4 million, generated from 16,438
ounces sold at an average price received of $1,542 per ounce.
Sales benefitted from the company’s hedging at $1,570 per ounce compared to the average spot price received of $1,472 per ounce.
Cash costs
C1
unit cash costs were $924 per fine ounce poured for the quarter which
was 1.5% below budget ($944 per ounce); gross operating margin was $618
per ounce poured, generating a mine level EBITDA of $7.25 million for
the quarter.
The sustaining cash cost for the quarter was $1,040
per ounce (includes site cash costs, royalties, corporate expenses and
site sustaining capital), 5% below budget of $1,094 per ounce for the
quarter.
C1 cash costs during CY13
For
the nine months ended September 2013 (YTD) average C1 cash costs are
$836 per ounce (7% below budget) and average sustaining cash costs are
$982 per ounce (8% below budget).
Gross operating margin YTD was $744 per ounce and mine level EBITDA totalled $29.81 million.
Mining
During
the quarter, 174,363 bcm of ore and 476,367 bcm of waste were mined
from the Golden Eagle pit and 2,546 bcm of ore and 43,667 bcm of waste
were mined from the Golden Gate pit for a total material movement of
696,943 bcm, an increase of 3.5% over the previous quarter.
Of
the total waste mined during the quarter, 121,325 bcm was used in the
construction of the tailings storage facility (TSF) which was completed
at the end of July 2013.
Milling
Mill
production achieved during the quarter totalled 369,244 tonnes, in line
with the previous quarter. Gold recovery has been lower at 85%
reflecting the recoveries that are expected when treating fresh ore.
For
the quarter, gold doré production totalled 19,549 ounces, consistent
with previous quarters whilst fine gold totalled 15,650 ounces, which
was slightly below guidance of 16,000 fine gold ounces, due to the
feedstock being primarily fresh ore and the lower gold grades treated.
Forward Guidance
Notwithstanding
permitting delays to starting mining activities at Golden Gate, good
progress has been achieved in preparing for ore extraction and milling
from this higher grade ore source in the December quarter.
Mining
operations commenced at the “D” Reef and “ABC” Reef pits and the upper
ore zones have been opened up with the first pass grade control drilling
completed.
Outstanding activities include completing the haul
road sections, awarding the ore transport contract and finalising the
supporting infrastructure at this project area.
Ore extraction and haulage to the Golden Eagle site is forecast to
commence in November 2013, and campaign treatment of the higher grade
ore is planned for the November‐December 2013 period.
The Ore Reserve at ABC and D Reefs has been estimated to be 0.46 million tonnes at 3.4 g/t Au for 51,000 ounces contained gold.
Projected
C1 unit cash costs for the FY2013 year are forecast at $790 per ounce
and sustaining cash costs (including site cash costs, royalties,
corporate expenses and site sustaining capital) between $970 and $1,000
per ounce produced.
Production guidance for the full year has
been revised to 73,000 ounces from approximately 78,000 ounces, due
predominantly to the later than expected start to mining at Golden Gate
and lower grades forecast at Golden Eagle.
Gross operating margin per ounce for the full year is expected to be between $700 and $765 per fine ounce produced.
Analysis
Millennium's
gold hedging program will continue to provide the company with an
enhanced sale price in the current gold priced environment over the next
year.
The company's 'in the money' hedge book was valued at
$11.45 million as at 30 September 2013 based on remaining 73,775 ounces
being hedged at an average price of A$1,631 per ounce.
The hedge
provides support for Millennium in the short term if the price of gold
falls, while allows it to benefit from a potential increase in the gold
price over the medium to longer.
