In addition, the mine produced 928 tonnes of zinc in the quarter, compared with 1,588 tonnes of zinc produced in the first quarter of 2012. Zinc is accounted for as a by-product credit to cash costs.
Cash costs for the quarter were $744 per GEO compared with $748 per GEO in the same quarter in 2012. Lower mining costs expected as a result of processing tailings material were partly offset by higher costs for power, increased costs for temporary mine services and labour inflation, lower credits from sales of zinc as a result of lower production and lower prices for zinc.
Fazenda Brasileiro, Brazil
Production at Fazenda Brasileiro was 16,797 ounces of gold in the quarter compared to 14,059 ounces of gold in the same quarter of 2012, representing a 19% quarter-over-quarter increase. The increased production was mainly due to higher gold feed grade and higher recovery rate.
Cash costs averaged $920 per ounce for the quarter, 11% lower than $1,037 per ounce in the first quarter of 2012.
The Fazenda Brasileiro mine was acquired in 2003 with two and a half years of mine life remaining based on known mineral reserves. The Company has been mining at Fazenda Brasileiro for nearly ten years. The mine continues to further outline exploration potential and mineral resource additions are expected in 2013.
The Company continues infill and extension drilling at Fazenda Brasileiro with a focus on increasing mineral reserves and mineral resources.
The Company's interest in the Alumbrera Mine is accounted for as an equity investment. The Company recorded earnings from its 12.5% interest in Alumbrera Mine of $0.1 million for the three months ended March 31, 2013, compared with $10.9 million for the same period of 2012. Lower earnings for the first quarter of 2013 compared to the same period of 2012 were primarily due to lower revenues driven by lower copper prices and lower copper sale volumes, combined with higher operating costs due to inflationary pressures.
The Company received cash distributions of $4.6 million in the quarter ended March 31, 2013, compared with $nil cash distribution in the first quarter of 2012. In the first quarter, Minas Argentinas S.A. ("MASA"), a wholly-owned subsidiary of the Company, entered into a 1-year $43.8 million loan facility agreement with Alumbrera. At March 31, 2013, MASA drew down $43.8 million against the facility. The principal drawn down bears interest at 2% per annum.
For the quarter, attributable production from Alumbrera was 8,222 ounces of gold and 6.3 million pounds of copper. This compares with attributable production of 9,317 ounces of gold and 8.0 million pounds of copper in the first quarter of 2012.
By-product cash costs per ounce of gold were negative $303 for the quarter ended March 31, 2013, compared with negative $1,270 per ounce in 2012. Co-product cash costs per ounce for gold averaged $396 for the quarter ended March 31, 2013, compared with $337 per ounce for the same quarter of 2012. Co-product cash costs for copper averaged $2.40 per pound for the quarter ended March 31, 2013, compared with $1.85 per pound for the first quarter of 2012.
The Company continued commissioning at Ernesto/Pau-a-Pique during the quarter. The operation is made up of two different deposits, Ernesto, which is a lower grade open pit deposit, and Pau-a-Pique, which is a higher grade underground deposit, with one common plant. A provisional permit was obtained for the Ernesto deposit and mining commenced first at this deposit as further development continued at Pau-a-Pique. With production coming only from the lower grade Ernesto open-pit deposit, a more gradual ramp up has been undertaken. The Company has also increased the exploration effort to find additional open-pit mineral resources to increase production levels from the open-pit and is currently evaluating additional measures to mitigate the impact to costs as part of a broader emphasis on cost mitigation.
Most Popular Stories
- 2014 Will Be 'Breakthrough Year' for U.S., Obama Says
- Target Overwhelmed by Worried Customers
- Congress Ends Turbulent Year with Approving IRS Chief
- First Family Arrives for Hawaiian Island Holiday
- Covered California Lags on Hispanic Enrollment
- Renewable Energy Group to Acquire Syntroleum
- Ally Financial Settles Auto Loan Suit
- Climate Change Isn't an Equal Opportunity Destroyer
- Kanye, Kardashians and Other Kooks: A Wacky, Tacky, Entertaining Year
- Luis Suarez Re-ups With Liverpool F.C.