COMPLETION of a mine expansion program at China Gold International Resources’ CSH Gold Project in Inner Mongolia resulted in increased production during the September quarter. There were 57,981 ounces produced in the three months, 20% more than the 48,124 ounces in the corresponding period of 2014.
The expansion doubled daily mine capacity from 30,000 to 60,000 tonnes and was completed in late 2014.
A 30% increase in gold sold from 43,799 ounces to 56,741 ounces saw higher revenue at CSH for the quarter at US$62.4 million from $53.9 million. The cash production cost and total production cost of gold for the quarter increased compared to the 2014 period due to higher waste rock removal costs as a result of a higher stripping ratio.
At the Jiama Copper-Polymetallic Project in Tibet Autonomous Region copper production during the quarter decreased by 8% from 9.4 million pounds to 8.7 million pounds primarily due to lower grade ores being mined. Revenues for the quarter at Jiama were $37.5 million compared to $35.4 million in the September quarter of 2014 due to a 31% increase in total copper sold from 10.84 million pounds to 14.2 million pounds.
The cash production cost of copper per pound at Jiama increased due to higher mining costs attributable to lower grade of ore. The total production costs of copper per pound slightly decreased due to less depreciation and amortization expenditures included in the production costs.
Jiama production is expected to increase due to the phase two expansion project being undertaken. It is being executed in two stages with the first completed and being tested at the daily throughput rate of 28,000 tonnes, up from 6000 tonnes. Stage two is under way and is expected to be commissioned in the second half of 2016, increasing capacity to 50,000 tonnes.
The company has revised down its copper production guidance for 2015 from 53 million pounds to 40.5 million. This is a 31% increase on the 2014 annual output of 31 million pounds.
The decrease is due to the delayed grant of a mining licence for the phase two expansion. The licence was received on October 12 with the delay caused by adjustments in the review and approval procedures within state-level supervisory bodies.