QUARTERLY ACTIVITIES REPORT: DECEMBER 2011
During the December 2011 quarter the Company continued its progress towards achieving full ore supply from the Cockburn Pit, with ore mined in December matching mill capacity for the first time in a year. The overall grade of ore mined and milled was however lower than forecast due to a depletion zone affecting the oxide and transition material on the eastern cutback. Ore grade is forecast to improve during the March 2012 quarter as mining progresses into the primary rock with an associated increase in gold production.
Although December quarter gold production was higher, the influence of the depletion zone as well as lower than forecast mining equipment availability resulted in a higher unit cash cost/oz of gold, thus delaying the forecast transition to positive cashflow by 2-3 months. In light of this, the Company successfully negotiated a non-equity financing facility with existing royalty holder Franco-Nevada. The Company granted an additional 1% royalty over future Bronzewing gold production in return for $4.5 million.
To assist in improving equipment availability, new haul trucks are being mobilised to site in late January 2012.
u Quarterly gold production of 13,858oz
u Mining operations remain focussed on the Cockburn Pit cutbacks and the associated build up of ore supply to the mill
u Gold production forecast to further increase in March quarter
u Four new haul trucks to be mobilised in late January
u Decision on mining contract expected in February
u BLEG soil sampling anomalies at Bower-Harrier further extended
u Further sampling required to close off anomalies prior to aircore drill program
u Internal update of the Leonora 2009 PFS commenced and expected to deliver significantly enhanced project economics
u PCF Capital appointed to consider strategic alternatives for project advancement
u Gold sales revenue of $20.7 million for the quarter, with an average selling price of $1,666 per ounce