Photo by: Bloomberg
PERTH (miningweekly.com) – The share price of gold miner Regis Resources traded 27% lower on Friday as the miner warned of weaker March-quarter production at its Western Australian operations.
The ASX-listed miner explained that lower head grades during January and February had hampered gold production at the Garden Well mine, confining ore mining to the Stage 4 area of the pit, where the mined grade had been lower than anticipated.
The milled grade at Garden Well had also been affected by the start of a cut-back at the northern end of the pit, which has reduced mined ore tonnage in the short term, and had impacted the ability to deliver higher than run-of-mine grade material to the mill during this period.
Furthermore, significant rainfall at Garden Well had restricted mining in the openpit, and several mining shifts were lost during this time, meaning that operations had to rely on mill feed from low-grade stockpiles during this period.
At the Rosemont project, operations were also been impacted by several pit wall failures in the main pit, Regis said.
The nature and location of the wall failures meant that the higher grade ore scheduled to be mined from the main pit during the March quarter had not been accessible, meaning that lower-grade ore had been presented to the mill for processing.
Access to the higher-grade ore was reestablished prior to the recent rainfall events, and mining in this section would be undertaken shortly after the rainfall ceased.
Gold production at the Moolart Well mine for January and February was in line with expectation; however, for the six months to June, gold production would be lower than the previous six-month record of 58 030 oz, as the mined grade of the deposit trended lower towards the remaining life of the mine grade.
Overall, Regis expected March quarter gold production to reach about 65 000 oz, compared with 88 818 oz delivered in the December quarter. Despite the lower-than-expected production for the March quarter, Regis remained on track to deliver a full-year production of between 305 000 oz and 355 000 oz.
Regis' share price dropped 27% to trade at A$1.40 a share on Friday afternoon.