Alacer tumbles on weak Çöpler performance

VANCOUVER (miningweekly.com) – A delay in accessing the planned oxide ore from the Marble pit at Alacer Gold’s Çöpler gold mine, in Turkey, has resulted in lower-than-planned gold output during the third quarter.

The ASX- and TSX-listed midtier gold producer said Wednesday that localised pit wall instability had to be fixed before mining of the oxide ore resource could start and successfully ramp up in October.

A longer-than-expected mobilisation and preparatory work phase also delayed the planned programme to re-leach historical areas of the heap leach pad. Alacer said that testwork conducted during the quarter confirmed the presence of cyanide-soluble gold in older areas of the heap leach pad.

“The 2016 production plan was back-end loaded and more production has now shifted into the fourth quarter. With safe access to the planned oxide ore in the Marble Pit now achieved (over 600 000 t has been mined at an average grade of over 1.4 g/t at Çöpler since the beginning of October), all efforts are being made to meet the lower end of guidance,” stated CEO Rod Antal.

However, due to the nature of heap leach pad kinetics, the timing of some of these ounces may move from this year into early 2017, Antal advised.

Meanwhile, the $744-million sulphide project is advancing within budget, with site work activities continuing to ramp up. Foundations for critical path areas are well advanced and structural steel has started to arrive on site for construction. All major equipment purchase orders are also complete, Alacer stated.

Q3 RESULTS
Gold production of 23 202 oz in the third quarter fell by 57% year-on-year.

Attributable net profit for the period ended September 30 was $7.3-million lower than a year earlier, reflecting an $18-million decrease in mining gross profit, which was offset by a $15.2-million benefit in net income tax. The income tax benefit of $10.1-million in the quarter was driven by the recognition of incentive tax credits.

Gold sales fell 54% to $28-million, reflecting a 61% decrease in ounces sold. This was partly offset by an average 18% higher realised gold price of $1 324/oz.

Total cash (C2) costs per ounce in the quarter of $853 were 65% higher than in the comparable period a year earlier. The increase reflects the impact of fewer ounces produced, owing to lower oxide ore tonnes treated and higher waste tonnes mined. C2 costs are expected to decrease in the fourth quarter as production increases, Alacer said.

All‐in sustaining costs per ounce in the third quarter of $1 180 were 76% higher year-on-year.

Alacer has entered into a forward sales hedge programme to secure the gold price on gold production from the current heap leach operation during the construction of the sulphide project. Under the programme, Alacer has forward-sold 185 393 oz at an average gold price of $1 280/oz, with settlement dates between July and September 2018. As of Wednesday, the remaining forward gold sales totalled 162 164 oz for settlement during the period October to September 2018.

Shares in the company tumbled nearly 9% Wednesday on the TSX to C$2.91 apiece.