VANCOUVER (miningweekly.com) – West Africa-focused gold miner and regional explorer Semafo has reported a 44% drop in headline profit during the third quarter ended September, as the new mine plan for its Siou operation, in Burkina Faso, delivered fewer gold ounces to sell, the company reported on Thursday.
Adjusted net income attributable to shareholders, excluding special items, totalled $8.4-million, or $0.03 a share, compared with $14.9-million, or $0.05 a share, in the same period in 2016.
The Montreal, Quebec-based miner reported net income of $13.8-million, compared with $19.6-million in the same period a year earlier.
Revenues dropped 13% to $69.8-million. The company’s third-quarter gold sales decreased relative to 2016, owing to lower gold ounces produced and sold, and results from the mine plan sequence.
Cash flows from operating activities fell 11% year-on-year to $34.9-million, or $0.11 a share.
The Siou mine produced 53 900 oz of gold, nearly 14% less than the 62 500 oz produced in the same period a year earlier.
Semafo advised that the mill processed 10% less ore during the quarter, owing to the new mine plan. The ore processed totalled 679 100 t at an average grade of 2.55 g/t gold. In an attempt to increase cash flows, the company took advantage of higher gold prices and available milling capacity to process 216 500 t of low-grade material not included in the reserve calculations.
The lower head grade in the third quarter is a direct result of this decision, without which the head grade would have been 3.42 g/t gold. This includes 240 000 t of ore from Zone 9, at an average grade of 5 g/t gold, showing good reconciliation with reserves.
In the third quarter the total cash cost and all-in sustaining costs (AISC) reached $557/oz and $841/oz sold, respectively, compared with $574/oz and $751/oz a year earlier. The higher AISC is attributable to a higher stripping ratio.
Development of the Boungou mine continued as planned, with $113-million spent out of the $231-million capital budget. Construction is 63% complete.
Semafo expects to hit the upper end of its 2017 production outlook of between 190 000 oz and 205 000 oz of gold, and to meet its AISC outlook of between $920/oz and $960/oz.