Centerra Gold expects increased production from Kumtor mine in the Kyrgyz Republic in the second half of 2016 after gaining access to higher grade ore. Accordingly, the company has favourably revised its overall guidance range to 500,000-530,000 ounces and lowered all-in sustaining cost guidance for Kumtor by 14% to $738 per ounce sold, based on the mid-point of the ranges.
Centerra CEO Scott Perry said, “With mining activities at Kumtor slightly ahead of plan and the business improvement opportunities achieved so far this year combined with the favourable diesel fuel costs and currency exchange rate environment, we have decided to favourably revise our guidance for gold production, AISC and capital expenditures.
“Kumtor delivered strong gold production in the June quarter producing 97,724 ounces which was in line with expectations and plans. Kumtor’s all-in sustaining costs were a competitive $768 per ounce sold, well below our original guidance for the year.
“We are well positioned to achieve our revised gold production and cost guidance for the year, since mining at Kumtor has intersected the higher grade ore in the SB Zone in cut-back 17.”
Mining activities in the June quarter focused on the development and mining of cut-back 17. Increasingly greater quantities of lower grade ore were obtained from the upper benches of cut-back 17. Centerra has now intersected the higher grade ore from the SB Zone from cut-back 17 which is anticipated to provide the majority of ounces processed during the remainder of the year.
Cut-back 17 is significantly larger in size than previous cut-backs and mining of the ore is spread over a longer period. The typical profile of mining a cut-back at Kumtor starts with waste removal, followed by a short period of mining in significantly higher grade ore. Cut-back 16 followed the typical profile, with the completion of mining higher grade ore in early 2015. In contrast, 17 required a longer stripping period to uncover low grade ore in September 2015, followed by an extended period of mining lower grade ore until the recent intersection of higher grade ore at the end of the second quarter of 2016.
Also during the June quarter Centerra received the maximum allowable emissions and the maximum allowable discharge permits at Kumtor for 2016. This was followed on June 27 by the environmental approval of the 2016 mine plan.