During the first quarter of 2013, no fresh ore was stacked on its heap leach pads (2012 - 28,420 tonnes ("t')) nor was any waste mined during the same period (2012 - 321,953 t). Gold sales were realized from the drawdown of recoverable gold inventory from WIP. As of March 31, 2013, the estimated recoverable gold classified as WIP was 37,418 ozs.
As previously announced, the Corporation is pursuing a number of financing alternatives. Should a financing be successfully concluded, a portion of the proceeds will go towards resuming the mining of ore.
The decrease in sales volume for the first quarters of 2013 was as a result of the Corporation not mining any fresh ore to stack on the heaps plus the inability to maintain optimum operating conditions (such as ripping and fluffing of leach pads, maintenance of optimum levels of cyanide and resin) due to the Corporation's current financial constraints described above. Revenues from gold sales were also negatively impacted by a 6% decline in the average price of gold in the first quarter of 2013 as compared to the first quarter of 2012.
Operating expenses consist of all costs associated with the production of gold, (including direct costs incurred in the mining, leaching and resin stripping processes ("process operating costs"), Mineral Extraction Tax ("MET")), transportation and refining of the cathodic sediment. Except in periods in which no new ore is being mined, all process operating costs are charged to work in progress and are expensed on the basis of the quantity of gold sold as a percentage of total recoverable gold mined. In those periods in which no new ore is being mined, certain direct mining costs and depreciation of mining equipment are expensed directly and not charged to work in progress.
Operating costs for the three months ended March 31, 2013 were $0.4 million or $1,210/oz of gold sold as compared to $1.6 million or $889/oz of gold sold for the three months ended March 31, 2012. The 2013 figure includes $0.1 million ($311/oz) of mining costs charged directly to operating costs for the months in which there was no new ore mined. There was no comparable amount for the three months ended March 31, 2012. Included in the three months 2013 operating cost amount is $0.03 million or $74/oz related to the amortization of the bump-up to fair value from the estimated cost of work in progress on re-valuation on September 15, 2009. Cash operating costs for the first quarter were therefore $1,136/oz (compared to $828/oz for the first quarter of 2012).
The $1.2 million decrease in operating costs in the first quarter of 2013 as compared to the first quarter of 2012 is due to the reduction in the quantity of recoverable gold mined and sold during 2013. The $321/oz increase in per unit operating costs for the first quarter of 2013 as compared to the first quarter of 2012 is primarily the result of the $311/oz of mining costs charged directly to operating expenses instead of flowing such costs through WIP.
CAPITAL EXPLORATION PROGRAMS
During the three months ended March 31, 2013, no field work was carried out in Kazakhstan. This was as a result of the Corporation's lack of financial resources. Proposed 2013 drilling and soil sampling locations were prepared.
As of March 31, 2013, there were 2,593 Shirotnaia assay results pending (2,586 core and 7 QA/QC core re-sampling) from the laboratory, and in addition, 6,755 samples (including 887 QA/QC samples) were prepared for export as follows:
-- Shirotnaia - 2,871 (RC samples),-- Zhusaly - 386 (RC samples) and 650 (soil samples),-- Vasilkovskoe East - 959 (soil samples) and 2 (rock chip samples),-- Dombraly East - 1,887 (soil samples).