Avocet reports lower gold production from N.Sulawesi mine
Thursday, July 31 2008 - 10:33 AM WIB
North Lanut, North Sulawesi
North Lanut?s gold production in the first quarter of FY2009 of 9,293 ounces was 41% below the corresponding period of the prior year when the mine processed oxide ores which yield a higher recovery; and 35% below the preceding quarter when transitional ores benefited from high levels of secondary leaching.
This year's Q1 production reflected an 18% reduction in tonnes irrigated in order to allow longer leach times required to improve gold recovery of more transitional and sulphidic material processed this year.
The change to longer leach times has led to a lower reportable gold recovery of 38% in the FY2009 first quarter compared with last year's first quarter recovery of 51%; however, additional recovery is expected from the ore currently under leach. The grade of ore treated for the quarter at nearly 2 g/t was similar to last year.
North Lanut?s cash cost per ounce of US$601/oz was nearly double the previous year?s US$314/oz owing to lower production compounded by diesel and consumable price inflation similar to levels seen at Penjom, in Malaysia. Diesel accounted for 19% of total costs at North Lanut during the first quarter of the current year compared with 13% in the corresponding quarter last year.
In the second half of the year, recovery and gold production are scheduled to benefit from:
* the new HLP3 leach pad which will provide separate cells for each different type of ore;
* the crushing of ore following the commissioning of a new mobile crushing unit; and
* a plant upgrade, together with a number of other initiatives that are ongoing to reduce costs and improve gold production.
Jonathan Henry, Chief Executive Officer, commented:
?Short term operational issues of lower treated grades at Penjom and lower recovery at North Lanut have reduced production compared with levels reported for the first quarter of last year. Cash costs per ounce, as with many gold mining operations globally, have been additionally hit by significant price inflation of key consumables, especially diesel. We anticipate the benefit of the measures under way to improve production from both mines, with a corresponding decrease in unit costs, will become apparent during the second half of the financial year to 31 March 2009.? (end of excerpt)