Martabe gold output up 2.6%, expects slightly lower output this year

By Cepi Setiadi

Courtesy of Agincourt

The Martabe gold mine in South Tapanuli Regency, North Sumatra Province, saw a 2.6 percent increase in gold output last year to 310,550 ounces compared to 302,449 ounces in the previous year.

Tim Duffy, President Director of PT Agincourt Resources, which owns and operates the Martabe mine, said on Monday that silver production last year reached 2.42 million ounces, slightly lower than 2.53 million ounces in 2015.

?Our guidance range for 2017 is 250,000 to 300,000 ounces of gold, and 2 million to 2.5 million ounces of silver. This is a similar range to last year with the added challenge of lower grades,? Duffy said.

In the fourth quarter of last year, gold production reached 82,831 ounces and silver reached 633,229 ounces. The gold production volume was higher than 80,755 ounces in the third quarter, while silver production was lower compared to third quarter?s 648,009 ounces.

Duffy said mining activities are now in two pit locations following the development of Barani pit which is in addition to the original Purnama pit.

Capital spent through the fourth quarter was US$43.3 million, whilst $12.3 million was spent for the exploration expenditures. The company?s 2016 capital expenditures were estimated approximately at $67 million and exploration expenditures were approximately $12 million.

"We are developing our third pit called Ramba Joring. It is close by to Purnama and Barani, and in 2017 we will be setting up the infrastructure and road access. By 2018 we will be in full production at Ramba Joring," Duffy said.

Duffy said the Martabe mine has a strong budget for exploration in 2017 of approximately $17 million. "And we believe that the success of the program will lead to benefits for all our stakeholders. We have much work to do in exploration," he said adding that Martabe gold mine has been allocated with a total capital expenditures of US$ 62.9 million for 2017.

?We had a good year in 2016, over and above our range of production guidance. We expect continued volatility in the gold price over the short term. The best way we can approach this is by optimizing the efficiency and cost of the Martabe operation. If we can improve the operational performance then we will be in a better position to handle the economic challenges we will face,? he ended.

Editing by Reiner Simanjuntak