AN ongoing program of optimizing operations at Kingsgate Consolidated’s Chatree Gold Project is paying dividends with a strong production performance in the December quarter. There were 34,221 ounces of gold produced in the quarter - 6% higher than the previous quarter.

Processing facilities at Kingsgate Consolidated’s Chatree operations.
Processing facilities at Kingsgate Consolidated’s Chatree operations.

There was also an increase in grade processed to 0.93 grams/tonne, which largely reflected access to higher grade material in A Pit, at A North East.

Total cash costs for the quarter were US$743/ounce (including US$99/ounce royalty), 8% lower than the September quarter reflecting higher gold production and the implementation of cost saving initiatives. Total production costs, after depreciation and amortization, for the quarter were US$948/ounce, 10% lower than the September quarter. Capital expenditure for the quarter at Chatree was Aus$1.6 million, with an additional Aus$3 million on the new Tailings Storage Facility (TSF).

A re-optimization of the mine plan at Chatree is under way, focusing on maximizing life of mine returns given the current volatile gold price environment.

Mining continued in areas of A Pit with further development at Q Prospect on hold while a revision of the mine plan is undertaken. Despite overall material moved ex-pit being below budget due to low excavator availability, ore mined was above budget being the result of a change in mining sequence to focus on higher grade ore blocks.

Mining of A Stage 2 continued to advance to access higher grade areas with mining of available near-surface high grade ore in A North East commencing during December. Ore mined for the quarter was 1,828,929 tonnes at a strip ratio 1.1:1 compared to the previous quarter of 1.3:1.

The process plant treated 1,487,118 tonnes of ore at an average gold head grade of 0.93 grams/tonne. Silver production was 290,315 ounces. Gold recovery of 80.3% was marginally above the September quarter (80.1%). Further work to improve the recovery is ongoing.

Chatree’s performance mirrors the company’s overall effort during the December quarter and the first half of the financial year. Group gold production for the quarter was 54,539 ounces at a total cash cost of US$918 per ounce. This delivered a first half of 105,325 ounces at US$978/ounce, putting production on track for the upper end of the guidance range for the year. This reflects continued focus on operating efficiencies and cost reduction initiatives given the current volatile operating environment for gold producers.

Kingsgate is on track to comfortably meet gold production guidance for the financial year following the strong first half. Group production guidance remains at between 190,000 and 210,000 ounces, including 120,000-130,000 ounces from Chatree and 70,000-80,000 ounces from Challenger in Australia.

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