South America region

Peru

Cerro Corona

* Average daily spot price for the period used to calculate total equivalent gold produced

Gold produced decreased from 45,900 ounces in the September quarter to 34,600 ounces in the December quarter and copper production decreased from 10,250 tonnes to 9,474 tonnes. 

The lower gold and copper production compared with the September quarter was mainly due to lower plant throughput as a result of a plant shutdown following maintenance of the grinding circuit. Tonnes milled decreased from 1.6 million tonnes in the September quarter to 1.5 million tonnes in the December quarter. Gold head grade decreased as expected from 1.38 grams per tonne in the September quarter to 1.18 grams per tonne in the December quarter while copper head grade increased from 0.78 per cent to 0.80 per cent. 

Metal recoveries reduced from 67.1 per cent in the September quarter to 63.2 per cent in the December quarter for gold and from 85.1 per cent to 82.0 per cent for copper, mainly driven by the presence of expansive clays in the ore treated.  During the December quarter, concentrate with payable content of 32,300 ounces of gold was sold at an average gold price of US$1,365 per ounce and 8,800 tonnes of copper were sold at an average copper price of US$7,846 per tonne, net of treatment and refining charges.

Total tonnes mined decreased from 3.15 million tonnes in the September quarter to 3.01 million tonnes in the December quarter. Ore mined of 1.50 million tonnes was 8 per cent lower than the 1.63 million tonnes in the September quarter, reflecting the lower plant availability and tonnage treated. The December quarter’s strip ratio of 1.00, was marginally higher than the September quarter’s strip ratio of 0.94 and in line with the mine plan.  Gold yield for the December quarter was 0.8 grams per tonne, compared with 0.9 grams per tonne in the September quarter and copper yield at 0.66 was similar to the previous quarter.

Operating costs, including gold-in-process movements, decreased from US$39 million (R290 million) in the September quarter to US$37 million (R252 million) in the December quarter, mainly due to a concentrate inventory build-up of 3,500 tonnes, partially offset by an increase in maintenance costs.  Total cash cost at US$449 per equivalent ounce sold for the December quarter compared with US$354 per equivalent ounce sold in the September quarter, reflects the effect of the plant shutdown and the increase of concentrate on hand.

Operating profit decreased from US$103 million (R758 million) in the September quarter to US$88 million (R604 million) in the December quarter, reflecting the lower metal production and sales, partially offset by higher gold and copper prices.

Capital expenditure for the December quarter was US$20 million (R142 million), compared with US$11 million (R82 million) in the September quarter. The higher expenditure was driven by the construction activities of the second raise of the tailings dam.

Notional cash expenditure increased from US$456 per equivalent ounce in the September quarter to US$650 per equivalent ounce in the December quarter as a result of the higher capital expenditure and the lower equivalent ounces produced.  NCE margin decreased from 64 per cent to 54 per cent.

The estimate for calendar 2011 is as follows:

• Metals (gold and copper) produced – between 330,000 equivalent ounces and 360,000 equivalent ounces^#
• Total cash cost at US$420 per equivalent ounce
• Notional cash expenditure at US$700 per equivalent ounce.

^# Equivalent ounces are based on a gold price of US$1,325 per ounce and a copper price of US$8,600 per ton.