Australasia region

Australia

St Ives

Gold production increased from 117,900 ounces in the September quarter to 125,100 ounces in the December quarter due to an increase in underground tonnes which replaced lower grade open pit ore this quarter.

At the underground operations, ore mined increased from 418,600 tonnes at 5.2 grams per tonne in the September quarter to 484,700 tonnes at 4.6 grams per tonne in the December quarter, with all four underground operations achieving higher tonnes.  The grade reduction reflects high grade development ore mined at Athena in the previous quarter and lower grades at Argo this quarter in accordance with the mining sequence.

At the open pit operations total ore tonnes mined decreased from 1.2 million tonnes to 0.9 million tonnes.  This is in line with a strategy of temporarily scaling back open pit operations and reducing surface stockpiles. Open pit grade increased from 1.76 grams per tonne to 2.17 grams per tonne, with high grade areas within the Apollo pit being mined this quarter.

Gold produced from the Lefroy mill increased from 110,400 ounces in the September quarter to 119,400 ounces in the December quarter, due to an increase in head grade from 3.10 grams per tonne to 3.28 grams per tonne. The increased head grade reflects the strong underground production and higher grades from the open pits.  Production from the heap leach facility decreased from 7,500 ounces in the September quarter to 5,700 ounces in the December quarter.

Operating costs, including gold-in-process movements, increased from A$84 million (R552 million) in the September quarter to A$95million (R647 million) in the December quarter.  This was mainly due to increased mill maintenance costs at the Lefroy mill in addition to an A$11 million gold-in-process credit in the previous quarter. Total cash cost increased from A$744 per ounce (US$666 per ounce) to A$768 per ounce (US$756 per ounce).   

Operating profit increased from A$77 million (R504 million) to A$79 million (R535 million), due to higher revenue associated with the increased production, but partially off-set by the increased costs. 

Capital expenditure decreased from A$31 million (R203 million) to A$28 million (R194 million) with the majority of expenditure invested in exploration and mine development.  The Athena Project delivered its first stope ore production on schedule during December. Full production at this new mine is expected to be achieved during the third quarter of calendar 2011.

Notional cash expenditure decreased from A$1,061 per ounce (US$950 per ounce) in the September quarter to A$991 per ounce (US$976 per ounce) in the December quarter.   The NCE margin increased from 22 per cent to 29 per cent.

The estimate for calendar 2011 is as follows:

• Gold produced – between 450,000 ounces and 480,000 ounces
• Total cash cost* at A$850 per ounce (US$850 per ounce)
• Notional cash expenditure* at A$1,200 per ounce (US$1,200 per ounce)

* Based on A$1=US$1.00.

Agnew

Gold production increased from 35,300 ounces in the September quarter to 44,300 ounces in the December quarter.  This increase was due to increased flexibility and stope availability at Waroonga’s Kim Lode, which alleviated previous access restrictions.  Additionally, mining volumes from the Main Lode also increased. 

Ore mined from underground increased from 145,000 tonnes at a head grade of 8.8 grams per tonne in the September quarter to 167,000 tonnes at a head grade of 8.1 grams per tonne in the December quarter.  The average grade decrease was due to an increased proportion of ore from the lower grade Main Lode compared with the previous quarter.

Tonnes processed at 208,000 was similar to the September quarter, with a significant increase in yield from 5.3 grams per tonne to 6.6 grams per tonne as underground production increased. 43,000 tonnes of lower grade material from surface stockpiles was treated compared with 64,000 tonnes in the September quarter.

Operating costs, including gold-in-process movements, increased from A$25 million (R164 million) in the September quarter to A$28 million (R193 million) in the December quarter, which included A$1 million charge to costs attributable to a draw down of gold inventory and A$1 million spent on equipment maintenance.  This contrasts to the previous quarter where an A$2 million credit was received on building up gold inventory.  Total cash cost per ounce decreased from A$706 per ounce (US$632 per ounce) to A$625 per ounce (US$615 per ounce) due to the increased production.

Operating profit increased from A$23 million (R153 million) in the September quarter to A$33 million (R221 million) in the December quarter.

Capital expenditure increased from A$11 million (R73 million) in the September quarter to A$16 million (R105 million) in the December quarter.  This increase included A$3 million spent on the new ventilation system which includes a new return air shaft and new primary ventilation fans allowing the Waroonga underground mine to extend at depth.

Notional cash expenditure decreased from A$1,065 per ounce (US$954 per ounce) in the September quarter to A$969 per ounce (US$954 per ounce) in the December quarter.  The NCE margin increased from 22 per cent to 29 per cent.

The estimate for calendar 2011 is as follows:

• Gold produced – between 160,000 ounces and 190,000 ounces
• Total cash cost* at A$800 per ounce (US$800 per ounce)
• Notional cash expenditure* at A$1,200 per ounce (US$1,200 per ounce).
  

* Based on A$1=US$1.00.