Gold production increased by 6% from Q1 2012 as lower throughput was outweighed by higher grade and recovery.
Cash costs in Q1 2013 are 22% lower than Q1 2012 primarily as a result of lower treatment and refining charges and a higher gold credit. Costs in Q1 2012 were also affected by the sale of higher cost inventory.
Sales revenues and gross profit have both increased in comparison to Q1 2012 with a 17% increase in copper sales revenues and a 22% increase in gold sales revenues. The increase in sales revenues reflects an increase in copper and gold sales volumes offset by lower realized copper and gold prices. This increase in revenues combined with lower cash operating costs drove the year-over-year increase in gross profit.
Outlook
Production in 2013 is expected to be between 37,000 and 41,000 tonnes of copper, and between 56,000 and 61,000 ounces of gold. Mine development planning is expected to continue to be a priority by exposing additional ore reserves from the extension of the pit boundaries in two additional cutbacks. The replacement of some older haulage trucks is expected to be necessary during 2013.
Process plant enhancements continue with a focus on better availability in the grinding circuit to achieve higher throughput. Better coordination of ore sourcing will permit higher throughput rates. The project to reconfigure the grinding circuit to a conventional Semi-Autogenous Grinding ("SAG")/ball mill circuit is progressing well with the feasibility study and capital cost estimate of $49.6 million approved in Q1 2013. Design is continuing and construction is expected to commence in Q2 2013. Commissioning is scheduled for mid-2014.
Guelb Moghrein is currently undertaking a feasibility study and preliminary design work on a magnetite recovery project. A plant expansion is being considered to recover magnetite as a by-product of the ore feed. The study is expected to include the future potential to reclaim the stored tailings to extract contained magnetite.
-------------------------------------Ravensthorpe Nickel Operation Q1 2013 Q4 2012 Q1 2012--------------------------------------------------------------------------Beneficiated ore tonnes processed (000's) 690 687 724Beneficiated ore grade processed (%) 1.7 1.5 1.5Nickel recovery (%) 78 78 78Nickel production (contained tonnes) 9,023 8,227 8,573Nickel sales (contained tonnes) 10,033 7,288 5,332Nickel production (payable tonnes) 6,951 6,338 6,617Nickel sales (payable tonnes) 7,613 5,425 4,199Cash costs (C1) (per lb)(1) $5.36 $6.05 $5.69Total costs (C3) (per lb)(1) $6.59 $7.33 $6.93--------------------------------------------------------------------------Sales revenues 132.6 94.3 82.2Gross profit 11.3 2.8 10.9EBITDA(1) 24.6 14.6 22.2--------------------------------------------------------------------------(1) C1 and C3 costs and EBITDA are not recognized under IFRS. See"Regulatory Disclosures" for further information.
Ravensthorpe recorded its highest quarterly production as Q1 2013 nickel production exceeded Q1 2012 by 5% mainly due to increased grades. New areas of limonite ore were exposed in Q4 2012 and early in Q1 2013, producing higher than average grade nickel feed for the plant in the second half of the quarter. Throughput was marginally reduced in Q1 2013 in order to optimize processing and production at higher ore grades.
