A doubling of mill processing capacity at China Gold International Resources Corp’s CSH Gold Project in Inner Mongolia is credited for a 51% increase in gold production in the first quarter of 2015. There was also a 475% increase in copper production at the Jiama Copper Gold Polymetallic Project in Tibet from the corresponding quarter of 2014.
The doubling of CSH capacity from 30,000 tonnes per day to 60,000 tonnes resulted in an increase in gold production from 27,118 ounces in the first quarter of 2014, to 41,033 ounces. This was mainly due to the successful commissioning of the mine expansion program.
The company said copper production from Jiama went from 771 tonnes during the first three months of 2014 to 4089 tonnes during the same period this year. The increase was mainly due to the stable power supply in the first quarter of 2015 compared with the power shortage in the first quarter of 2014.
Net income for the quarter increased by US$4.8 million, from $1.4 million for the three months ended March 31, 2014, to US$6.2 million for the first three months of 2015. Two thirds of revenues came from CSH with the other third from Jiama.
Cost of sales of US$56.2 million for the quarter ended March 31, 2015, increased by US$33.9 million from US$22.3 million for the same period in 2014. CSH contributed US$17.8 million to this increase due to its 65% growth in revenue as a result of commercial production from the phase II expansion. Jiama contributed US$16.1 million to the company’s cost of sales increase as full power was restored and regular sales volumes were sustained.
Cost of sales as a percentage of revenue for the company increased to 73% from 61% for the three months ended March 31, 2015 and 2014, respectively.
“We are off to a great start for 2015,” China Gold International’s CEO Bing Liu said. “During the first quarter of 2015 we increased both gold and copper production without any technological difficulties. This translated into higher revenues and net income despite the 15% decrease in the realized average price of copper per pound and a 7% decrease in the realized average price of gold per ounce.
“Expansion at Jiama is progressing as we anticipated and CSH is fully utilizing its increased capacity. At this stage, we are very confident about achieving our 2015 guidance,” he said.
The company expects production of 226,000 ounces of gold in 2015, a 25% increase from the 181,000 ounces produced in 2014. It expects production of 53 million pounds of copper, a 71% increase from the 31 million pounds produced in 2014.