St Ives

Gold production decreased by 3 per cent from 99,100 ounces in the December quarter to 96,600 ounces in the March quarter mainly due to two significant rain events, in January and February, affecting open pit operations as well as dilution and recovery challenges in some of the underground mines.

At the underground operations, ore mined decreased by 12 per cent from 712,000 tonnes in the December quarter to 625,000 tonnes in the March quarter. The average grade of ore mined increased from 3.44 grams per tonne to 3.97 grams per tonne. Reduced ore tonnages were a result of dilution/recovery issues in both Athena and Hamlet offset by higher grades from the Argo mine which closed subsequent to the March quarter end. The Argo mine has reached the end of its economic life having produced 915,000 ounces and generated A$165 million of cash flow over a 12 year life.

At the open pit operations and as scheduled, total ore tonnes mined decreased by 77 per cent from 924,000 tonnes at 1.38 grams per tonne mined in the December quarter to 214,000 tonnes at 1.37 grams per tonne mined in the March quarter. Operational waste tonnes mined decreased from 2.0 million tonnes to 0.5 million tonnes, while capital waste tonnes mined increased from 0.8 million tonnes in the December quarter to 3.7 million tonnes in the March quarter. During the March quarter, the focus has been on prestripping the high grade Neptune pit and the West Idough pit in order to secure new ore sources for the second half of 2014. Mining of the Bellerophon pit was completed during the quarter. Rain significantly affected mining schedules with three weeks disruption across the open pit mines after the rain in the quarter. The strip ratio increased from 2.95 in the December quarter to 19.5 in the March quarter.

Throughput at the Lefroy mill increased from 1.21 million tonnes to 1.28 million tonnes. Yield decreased from 2.55 grams per tonne to 2.35 grams per tonne. Gold production from the Lefroy plant decreased from 96,900 ounces in the December quarter to 95,700 ounces in the March quarter mainly due to reduced underground high grade ore and volume of open pit ore mined which was replaced by lower grade stockpiled material. Following on from the cessation of stacking activities at the end 2012, irrigation of the existing heap leach pad continued, and a further 900 ounces were recovered in the March quarter compared with 2,200 ounces in the December quarter. Since cessation of stacking activities a total of 12,900 ounces have been recovered.

Net operating costs, including gold-in-process movements, increased from A$83 million (US$77 million) in the December quarter to A$97 million (US$87 million) in the March quarter mainly due to a A$11 million (US$10 million) gold-in-process charge to costs in the March quarter compared with a A$11 million (US$11 million) credit to costs in the December quarter. This was anticipated and reflects the high open pit mining volumes in the December quarter when ore was stockpiled to be drawndown in the March quarter while new pits were being stripped.

Operating profit decreased from A$53 million (US$48 million) in the December quarter to A$41 million (US$36 million) in the March quarter due to higher net operating costs.

Capital expenditure increased from A$29 million (US$27 million) in the December quarter to A$37 million (US$33 million) in the March quarter with increased expenditure on pre-stripping of open pits.

All-in sustaining costs and total all-in cost per ounce increased from A$1,172 per ounce (US$1,091 per ounce) in the December quarter to A$1,444 per ounce (US$1,291 per ounce) in the March quarter mainly due to the lower production, higher net operating costs and higher capital expenditure in the March quarter.

St Ives was severely impacted by two cyclonic weather events resulting in extensive flooding throughout the Western Australian goldfields. This resulted in high pit dewatering costs and delays in material movements from all pits.

Pre-stripping activities at the Neptune pit account for the majority of material movements in the March quarter and the June quarter. Ore supply from the Neptune high grade pit is planned to commence in the second half of 2014. The ore from Neptune is expected to result in a reduction in AISC and AIC in the later part of 2014. In addition, a number of efficiency and cost reduction initiatives are being investigated for implementation.

Agnew/Lawlers

Gold production decreased by 20 per cent from 73,600 ounces in the December quarter to 59,200 ounces in the March quarter mainly due to lower grades mined, a once-off clean-out of the Lawlers mill in the December quarter and a build-up of gold-in-process in the March quarter compared with a reduction in the December quarter. The Lawlers mill is now on a care and maintenance programme.

Ore mined from underground decreased marginally from 267,400 tonnes to 266,300 tonnes and head grade decreased from 7.33 grams per tonne in the December quarter to 6.91 grams per tonne in the March quarter. The underground grade reduction was due to mining of lower grade areas in accordance with the mine plan sequence with an expected reduction in underground grades from Kim Lode in the Waroonga mine.

Tonnes processed decreased from 349,000 tonnes in the December quarter to 294,000 tonnes in the March quarter and included 13,000 tonnes of Songvang ore. The higher tonnes in the December quarter were due to processing all stockpiled ore at Lawlers prior to diverting to the Agnew mill. The combined yield decreased from 6.56 grams per tonne to 6.27 grams per tonne.

Net operating costs, including gold-in-process movements, decreased from A$50 million (US$47 million) in the December quarter to A$42 million (US$37 million) in the March quarter. The March quarter included A$5 million (US$4 million) build-up of goldin- circuit while the December quarter included A$5 million (US$5 million) gold-in-process drawdown.

Operating profit decreased from A$52 million (US$48 million) in the December quarter to A$44 million (US$39 million) in the March quarter due to lower gold sold partially offset by the higher gold price received and lower net operating costs.

Capital expenditure increased from A$19 million (US$18 million) in the December quarter to A$23 million (US$21 million) in the March quarter with additional capital development at the New Holland mine and additional exploration activity.

All-in sustaining costs and total all-in cost per ounce increased from A$998 per ounce (US$929 per ounce) in the December quarter to A$1,147 per ounce (US$1,025 per ounce) in the March quarter mainly due to the lower gold sold and increased capital expenditure, partially offset by lower operating costs.

Darlot

Gold production increased by 16 per cent from 19,700 ounces in the December quarter to 22,900 ounces in the March quarter mainly due to an increase in head grade processed and a reduction of gold-inprocess.

Ore mined from underground decreased from 153,000 tonnes to 141,000 tonnes but head grade increased from 4.46 grams per tonne in the December quarter to 4.96 grams per tonne in the March quarter. The increased head grade reflects the continued focus on mining only those ounces that produce a margin.

Tonnes processed decreased from 158,000 tonnes in the December quarter to 144,000 tonnes in the March quarter. The yield increased from 3.88 grams per tonne to 4.96 grams per tonne with the higher yield due to higher grades mined and a reduction of gold-in-process. The lower yield in the December quarter was due to a build-up of gold-in-circuit in the December quarter.

Net operating costs, including gold-in-process movements, increased from A$21 million (US$20 million) in the December quarter to A$24 million (US$22 million) in the March quarter. The increase was the result of a gold-in-process charge to cost in the March quarter compared with a gold-in-process credit to cost in the December quarter.

Operating profit increased from A$6 million (US$6 million) in the December quarter to A$9 million (US$8 million) in the March quarter due to increased production and the higher gold price received, partially offset by the higher net operating costs.

Capital expenditure remained similar at A$2 million (US$2 million) and was predominately incurred on exploration and capital development.

All-in sustaining costs and total all-in cost per ounce increased from A$1,169 per ounce (US$1,132 per ounce) in the December quarter to A$1,203 per ounce (US$1,075 per ounce) in the March quarter mainly due to changes in gold-in-process quarter-on-quarter.

Granny Smith

Gold production increased by 7 per cent from 62,200 ounces in the December quarter to 66,500 ounces in the March quarter mainly due to an increase in ore tonnes mined.

Ore mined from underground increased from 362,000 tonnes to 405,000 tonnes but head grade mined decreased from 6.34 grams per tonne in the December quarter to 5.70 grams per tonne in the March quarter. The grade is on target with the overall mine plan for 2014.

Tonnes processed increased from 330,000 tonnes in the December quarter to 401,000 tonnes in the March quarter. The combined yield decreased from 5.86 grams per tonne to 5.16 grams per tonne with the lower yield due to lower ore grades mined.

Net operating costs, including gold-in-process movements, increased from A$47 million (US$45 million) in the December quarter to A$56 million (US$50 million) in the March quarter due to increased tonnes mined and processed and A$4 million (US$4 million) gold-in-process credit to cost in the December quarter.

Operating profit was similar at A$41 million (US$37 million) due to higher production and a higher gold price, partially offset by higher net operating costs.

Capital expenditure was similar at A$8 million (US$7 million) in the March quarter. Capital expenditure was incurred primarily on exploration, capital development and improvements to the processing plant.

All-in sustaining costs and total all-in cost per ounce increased from A$917 per ounce (US$888 per ounce) in the December quarter to A$1,018 per ounce (US$910 per ounce) in the March quarter mainly due to the increase in net operating costs, partially offset by higher gold sold.