UK-based Nordgold has lowered its production guidance for 2018, after third-quarter output fell short of management expectations, following a rockslide at the Russia-based Berezitovy mine.
The company, which operates four mines in Russia, three in Burkina Faso and one each in Guinea and Kazakhstan, produced 227 300 oz in the September quarter, which is 1% below the prior-year quarter’s 230 700 oz.
Production at the Berezitovy mine fell by 59% year-on-year to 10 100 oz, owing to the geotechnical wall failure that took place in the second quarter. The openpit operations are in a waste stripping phase to mine around the wall failure.
CEO Nikolai Zelenski said in a news release that the third-quarter production was below expectations, resulting in the full-year guidance adjustment. Nordgold lowered its guidance by 50 000 oz to a range of 900 000 oz to 950 000 oz, from the previous range of 950 000 oz to one-million ounces.
The company expects to be a one-million-ounce producer when its new 200 000 oz/y Gross mine – officially launched in the third quarter – reaches full capacity.
The third-quarter gold was produced at an all-in sustaining cost (AISC) of $1 140/oz, which is 14% more than the prior year’s $998/oz and also more than the $1 017/oz of the second quarter. Nordgold explained that the AISC was higher as a result of temporary higher capitalised stripping costs at the West African mines.
The full-year AISC guidance range remained unchanged at $975/oz to $1 025/oz.
The miner reported revenue of $268.2-million, down 9% on the $295.7-million reported in the third quarter of 2017, in line with lower prices. Net profit increased from $46.3-million in the third quarter of 2017, to $53-million. Quarter-on-quarter, net profit more than trebled from $13.9-million, owing to a foreign exchange gain and a lower derivative net loss.