Millennium Minerals generates $25.4m from gold sales in September 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.
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 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.
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.
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.
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.
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.
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.
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