The Company's strategic plan is to target sustainable production from Chapada at levels of at least 150,000 gold ounces and 135.0 million pounds of copper from 2015 for at least five years.
El Penon, Chile
El Penon produced 120,684 GEO in the first quarter, compared to 110,675 GEO in the same quarter of 2012, representing a 9% increase quarter-over-quarter. Production for the quarter consisted of 90,155 ounces of gold and 1.5 million ounces of silver, compared with 72,742 ounces of gold and 1.9 million ounces of silver produced in the first quarter of 2012. Production of gold increased by 24%, compared with the same quarter of 2012, mainly as a result of higher feed grade, while production of silver decreased by 20% due to lower feed grade and lower recovery rate. Ore feed to the mill increased by approximately 8% quarter-over-quarter. The amount of ore feed to the mill from the higher gold grade areas of the Aleste-Bonanza zone in the quarter resulted in slightly lower silver recoveries. Future silver recoveries will vary according to the blending of ore being fed to the mill, expecting an improvement in the second half as result of the planned feed. While gold feed grade and recovery rate are expected to continue at the current levels, silver recovery rate is expected to improve in 2013, according to the mine plan.
Cash costs were $455 per GEO in the first quarter, compared with $442 per GEO in the first quarter in 2012. The increase in cash costs is due to inflationary pressures in Chile primarily in relation to labour rates.
Exploration has been ongoing at El Penon for 20 years, which has a long track record of replacement of ounces mined. The new discoveries at Dorada Sur and Dorada Oeste, Fortuna Este and Bonanza West are being focused on in an effort to advance these targets to mineable mineral reserves in the near term. This is expected to return significant near surface gold and silver values, improve production and provide mining flexibility for a sustainable production level of about 440,000 GEO per year and ultimately increase mine life. Development has commenced at Pampa Augusta Victoria and an open-pit is expected to start in the first half of 2013.
Gualcamayo produced 30,177 ounces of gold in the first quarter, slightly lower than 31,502 ounces of production in the fourth quarter of 2012 and compares with 39,263 ounces produced in the first quarter of 2012. Lower production was the result of lower feed grade from stockpiled ore, partly offset by higher recovery. Ore processed also declined as compared to the comparable quarter. The mining operations at Gualcamayo are transitioning from QDD Main Phase II to Phase III with current production sourcing primarily from stockpiled material of Phase II being placed in the new Valle Norte heap leach pad. As this transition is completed, production at Gualcamayo is expected to increase.
Cash costs were $584 per ounce in the quarter ended March 31, 2013 compared with $436 per ounce in the first quarter of 2012. Inflationary pressures on labour and consumable costs, lower grade and re-handling of waste costs resulted in higher cash costs.
Underground development of QDD Lower West continues to advance and project completion remains on schedule. Full ramp-up of Gualcamayo's expansions will add production from QDD Lower West underground and AIM open-pit deposits.
A conceptual study on the evaluation of milling higher grade ore at Gualcamayo, subject to mineral resource increase in 2013, is expected to be completed in 2013.
Most Popular Stories
- Twitter Names Woman to Board
- Aspen Contracting Adding 300 Jobs
- NSA Tracks 5 Billion Cellphone Records a Day
- Nelson Mandela Dies After Momentous Life
- Ford Mustang Still Packs Power
- Roybal-Allard Tours Gordon Brush Plant
- Fast-Food Workers Want $15 an Hour
- W.H. Corrects Itself on Unclegate
- Nelson Mandela Dead at 95
- Pope Francis Says He'll Fight Child Sex Abuse