JOHANNESBURG (miningweekly.com) – Precious metals miner Primero Mining now expects to produce between 220 000 and 240 000 gold-equivalent ounces at a cash cost per ounce of between $675 and $725 in 2014.
This represented a modest drop in output and a modest increase in costs when compared with the company’s previous guidance.
“I am pleased to note that, on completion of an operational review, our overall company guidance has been revised only modestly. Although we were encouraged by the 29% increase in production we achieved at Black Fox during the second quarter, we elected to review our short-term mine plan,” said CEO Joseph Conway.
During the second quarter, production at the Black Fox Complex, in Ontario, had increased to 17 166 oz, while underground development and been increased by 54%.
Conway noted that, after operating the asset, which it bought in a $220-million takeover of rival Brigus Gold in March, for a full quarter, the company had gained important information that it had now incorporated into the mine plan.
“Following our review we remain comfortable with our optimisation plan for Black Fox, but have lowered the mine’s 2014 production guidance as a result of lower-than-planned underground throughput and lower than anticipated openpit grades,” he noted.
The mine was now expected to produce between 65 000 oz and 75 000 oz of gold for the full year, down from the previously expected 70 000 oz to 80 000 oz. Cash costs would remain at between $850/oz and $900/oz.
However, all-in sustaining costs (AISC) at the operation would increase to between $ 1 400/oz and $1 450/oz.
“We feel confident that with the current increase in investment in underground development, delineation and definition drilling at Black Fox, the underground throughput can be increased to our original plan of 1 000 t/d by mid-2015.
“In addition, we are very encouraged by our continued success with exploration at Black Fox at depth and confident the Grey Fox deposit will increase its resource base by year-end,” said Conway.
Meanwhile, the Toronto-based miner reported that production at its San Dimas gold/silver mine, in Mexico, remained strong, with the production guidance for this operation increasing to between 120 000 oz and 130 000 oz of gold for the full year, compared with previous estimates of between 115 000 oz and 125 000 oz of gold.
The gold-equivalent ounces guidance, however, remained unchanged at between 155 000 oz and 165 000 oz.
Primero attributed an expected increase in cash costs at San Dimas, to between $600/oz and $650/oz, to electricity costs, a slightly lower realised gold/silver price ratio and temporary costs increases, including labour, associated with long-hole development as the mine transitioned to the 2 500 t/d mill expansion.
The AISC for this operation are expected to be between $750/oz and $800/oz.