Lower grades, higher costs weigh on Guyana Goldfields’ Q2 performance

JOHANNESBURG (miningweekly.com) – Despite lower grades dragging down production at its Aurora mine, in Guyana, in the second quarter of this year, TSX-listed Guyana Goldfields has maintained its production guidance for the full year, albeit at the lower end of the range of 160 000 oz to 180 000 oz of gold.

The mine produced 29 700 oz of gold in the second quarter, compared with 40 900 oz in the first quarter of the year.

“The company experienced a weaker quarter with respect to both production and cost performance. This was primarily attributable to lower-than-expected grades from stockpiled ore being fed to the mill and a higher strip ratio in the quarter,” president and CEO Scott Caldwell said in a statement on Monday.

The company noted that costs on a per ounce basis, at $757/oz for the second quarter, were higher than the $516/oz in the first quarter as a result of lower grades, lower recoveries and a higher strip ratio.

Mining costs for the quarter were above budgeted levels due to the continued use of rental drills, owing to a delivery delay on two new production drills which were anticipated to be in operation during the quarter.

Blasting costs also increased as manufacturer delays in the delivery of bulk emulsion explosives to site resulted in the company reverting to using more expensive packaged explosives for most of the quarter.

Both these issues have been addressed, with the two new drill rigs being fully operational and bulk emulsion explosives being used for all blasting activities from the beginning of the third quarter.

Caldwell noted that the production and cost performance should improve in the second half of the year, with mill feed ore being sourced predominantly from the higher-grade tonalite at Rory's Knoll, while the strip ratio is expected to decline significantly in both the third and fourth quarters based on mine sequencing.

Meanwhile, Guyana sold 30 000 oz of gold in the second quarter, compared with the 40 700 oz sold in the first quarter.

Revenue for the quarter decreased to $37.9-million, compared with $49.96-million in the first quarter.

The company recorded a net loss of $3.13-million, compared with net earnings of $9.94-million in the first quarter.