G-Resources continued its strong performance at the Martabe Gold-Silver Project in North Sumatra, Indonesia, during the September quarter with a record 1.083 million tonnes of ore milled, including a monthly record of 394,000 tonnes in August.

The average gold head grade was 2.52 grams/tonne, yielding gold production of 70,302 ounces, slightly lower than the 72,096 ounces in the June quarter. The milling total was up from the 993,000 tonnes of the June quarter.

In the three months ending September 30 there were also 609,178 ounces of silver poured, which is equivalent to more than 2.43 million ounces on an annualized basis but lower than the 631,189 ounces poured in the June quarter. Gold and silver production was lower owing to reduced head grades.

Total mine material movements of ore and waste were 2.89 million tonnes for the quarter, slightly under the forecast. The waste to ore strip ratio was at 1.56:1 for the third quarter. The process plant has continued to perform well with gold recovery 3.5% over plan for the quarter and silver 0.2% above plan.

As a consequence of the good production and continuing focus on the Martabe Improvement Program (MIP), All-In Sustaining Costs (AISC) for the third quarter were $520 per ounce sold, which was lower than the $537 of the previous quarter.

Gold and silver revenue received from sales was $82.5 million for the quarter and site operating costs were well under budget as a result of the continued focus on the MIP, and favourable energy costs.

After reviewing production and cost forecasts for the remainder of the year, and as a result of good performance in the third quarter, G-Resources maintains its full year 2015 guidance of 285,000 ounces of gold and 2.3 million ounces of silver with AISC forecast to be in the range of $600-$700 per ounce sold.

One area of continuing challenge is the receipt of contracted grid power from the Indonesian power provider PLN. In the meantime, power continues to be supplied from the company’s diesel power plant.

Consultations and negotiations with PLN are ongoing. During the third quarter, several meetings were convened with PLN, which has indicated it is making endeavours to resolve the grid power supply issue. The company and its consultants are looking at various longer term more cost efficient options.

Exploration activity continued in the quarter with completion of resource drilling programs at Ramba Joring and Tor Uluala, continued drilling and surface exploration at regional targets, and completion of an airborne electromagnetic geophysics survey over the Rantau Panjang area in the south of the Contract of Work.

Martabe, with a resource base of 7.4 million ounces of gold and 70 million ounces of silver, is G-Resources Group’s core asset. Martabe’s annual operating capacity is to mine and mill the equivalent of 4.5 million tonnes of ore to produce some 250,000 ounces of gold and 2 million ounces of silver.


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