Strong production during the September has resulted in Centerra Gold increasing its 2016 guidance for the Kumtor Gold Project in the Kyrgyz Republic by 20,000 to 30,000 ounces to a total of 520,000-560,000 ounces. There were 166,030 ounces produced in the quarter, up from 103,701 ounces in the corresponding period of 2015.
The increase in ounces poured was the result of mining and milling higher grade ore from the SB Zone, while in the third quarter of 2015 the company processed lower grade ore stockpiled from cut-back 16 and lower grade material within cut-back 17.
During the third quarter, Kumtor processed 1.6 million tonnes, 5% more than the third quarter of 2015. Average mill head grade was 4.11 g/t with a recovery of 81.4% in the third quarter of 2016, compared to 2.83 g/t with a recovery of 75.7% for the same period of 2015.
The mill achieved increased daily throughput in the third quarter of 2016 averaging 17,074 tonnes compared to 16,262 in the comparative quarter. Mill throughput has increased as a result of blending harder and softer ore, opening screens in the SAG mill and increasing the grinding media sizes in the SAG and ball mills.
All-in sustaining costs per ounce sold, which excludes revenue-based taxes, for the third quarter of 2016 decreased 45% to $555 compared to $1000 in the 2015 period. This was primarily a result of lower operating costs per ounce sold and the reversal of $27.2 million in inventory impairment, in addition to lower sustaining capital expenditures. Centerra has also lowered its expected all-in sustaining costs for 2016 by 6% to $692 per ounce sold.
All-in costs per ounce sold, which excludes revenue-based taxes, in the third quarter of 2016 was $574 compared to $1014 in the same period of 2015, representing a decrease of 43%.
Capital expenditures in the third quarter of 2016 totalled $54.9 million which includes $13.0 million of sustaining capital mainly on equipment rebuilds and overhauls, $3.2 million invested in growth capital and $38.7 million for capitalised stripping.
The Mongolian operations will continue with care and maintenance activities at the Boroo mine mainly focusing on reclamation work. Any revenue from Boroo gold production from the drain down of the heap leach pad will be offset against care and maintenance costs.
Centerra Gold’s CEO Scott Perry said, “As we mined and processed the higher grade material from the SB Zone, Kumtor delivered strong gold production in the quarter. The all-in sustaining costs were in the lower cost quartile of the gold industry and well below our revised guidance for the year. During the third quarter, Kumtor generated $106 million of free cash, however without access to the cash generated from the Kumtor project, the company has decided to defer until December the consideration of declaring a quarterly dividend.”