PERTH (miningweekly.com) – Record production from the Red October underground mine has delivered a strong quarterly performance for ASX-listed gold miner Saracen Mineral Holdings, which exceeded its production expectations.

Saracen revealed this week that gold production for the three months to December had reached 42 894 oz, which was 16% above the guidance of 37 000 oz.

The Red October underground operation delivered 21 511 oz, with Saracen noting that the main driver for the growth was a 46% increase in the head-grade over the past six months.

“It is with great pleasure that we report our best-ever quarter, not just in terms of record gold production of 42 894 oz, or record mine production from Red October of 21 511 oz, or record operational cash flow generation of A$16.4-million, but also in terms of our safety performance, with 292 days elapsing since our last lost-time injury,” said Saracen MD Raleigh Finlayson.

A record 17 829 oz of gold was produced during the month of December, at an average grade of 2.89 g/t gold, from 210 000 t of ore milled.

At the end of December, some 1.67-million tonnes of ore had been stockpiled for processing, containing an estimated 56 400 oz of gold. Saracen expected this stockpile to grow significantly over the next six months as the Whirling Dervish strip ratio continued to fall.

Importantly, the miner was also expecting the average grade of the stockpile to continue to fall.

Looking ahead, Finlayson noted that Saracen remained on track to deliver between 145 000 oz and 155 000 oz during the full year, at an all-in sustaining cost of around A$1 150/oz.

Gold sales during the quarter reached 42 698 oz, at an average price of A$1 518/oz to generate a total revenue of A$64.8-million.

Finlayson noted that on the back of record operational cash flow generation, the company had been able to aggressively pursue its exploration and development programmes, with exploration progressing at both Red October and Thunderbox.

A feasibility study into the Thunderbox project was scheduled for completion by the March quarter.