TORONTO (miningweekly.com) – North American precious metals producer Primero Mining has narrowed its loss for the three months ended September 30, to $5.4-million, or $0.03 a share, compared with a net loss of $99.5-million, or $0.62 a share, in the comparable period of 2014.
The TSX- and NYSE-listed company, which operated the San Dimas mine, in Mexico, and the Black Fox mine, in Northern Ontario, had incurred a $99-million goodwill impairment charge relating to its $220-million Brigus Gold acquisition in March 2014, in the third quarter of last year.
Excluding special items on the balance sheet, adjusted net income for the period under review was $200 000, or nil per share, below the average Wall Street analyst forecast of earnings of $0.04 a share.
Revenue for the period climbed 5% to $79-million, boosted by a 19% increase in gold-equivalent output sold, at 71 417 oz, despite a 12% drop in the average realised gold price.
San Dimas lifted its gold-equivalent output by 33% year-on-year to 49 566 oz, comprising 33 623 oz of gold and 1.9-million ounces of silver, at low all-in sustaining costs (AISC) of $454/oz – positive signs that its expansion to a throughput rate of 3 000 t/d was gaining traction. This performance had prompted Primero to lift the operation’s full-year production guidance to 180 000 oz to 190 000 oz of gold equivalent, at reduced AISC of $740/oz to $770/oz.
At the Black Fox operation, openpit mining started to slow, while ore extraction from the new underground workings ramped up. Primero advised that mill throughput averaged above 2 500 t/d, generating 15% lower gold output of 19 054 oz for the quarter, at a 17% lower AISC of $1 000/oz.
Primero president and COO Ernest Mast stated that, while underground operations at Black Fox had achieved rates above the 1 000 t/d target, it had been unable to sustain production at this level.
"Mining rates during the quarter were impacted by ground conditions in the east ramp at the 390 level. The current mine plan does not enable us sufficient flexibility to consistently exceed the 1 000 t/d rate to make up for days of lower productivity, which is why we have accelerated plans to begin mining from the Deep Central zone,” he said.
Mast noted that the development ramp to this zone was well advanced and was expected to reach the 620 m level by year-end, with first production ore expected in the second quarter of 2016. Mining of the higher-grade, wider mineralisation in the Deep Central zone was expected to give operations personnel flexibility to sustain the targeted 1 000 t/d mining rate.
The company had adjusted Black Fox’s full-year guidance downwards from between 75 000 oz and 85 000 oz, to between 70 000 oz and 80 000 oz, at an unchanged AISC of $1 150/oz to $1 200/oz.
For the third quarter, Primero’s consolidated output rose 15% year-on-year to 68 620 oz of gold-equivalent, placing the miner on track to meet its consolidated production guidance of 250 000 oz to 270 000 oz of gold equivalent.
Primero’s NYSE-listed equity on Tuesday shed more than 5% and, on Wednesday, continued the trend, losing 3.64% in morning trading, to change hands at $2.12 apiece before noon. The stock had lost 44.58% in value since the start of the year, as precious metals prices continued to slide over the past 12 months.