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Archipelago Resources expects to boost second half production at Toka Tindung

Published: 17:01 25 Jul 2012 AEST

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Archipelago Resources (LON:AR.) said this morning that it expects to increase gold production for the rest of 2012 at its flagship Toka Tindung mine in Indonesia.

With first half production of 60,400 ounces of gold equivalent, the company told investors it still expects to hit its full-year target of 135,000 to 145,000 Au Eq oz.

Archipelago said mining and processing was broadly in line with expectations for the six months to June 30, with a strip ratio of 6:1, average gold equivalent head grade of 2.44 grams per tonne and plant recovery rate of almost 91 per cent.

It added that production so far this month had been “robust”.

“Production for the first half of 2012 demonstrates that Toka Tindung continues to operate in line with our expectations,” said managing director Marcus Engelbrecht.

“The company looks forward to robust production for the second half of 2012 with operations to benefit from additional mining in the high grade Pajajaran and Kopra deposits.”

The gold company will also boost mining activities at the high grade Pajajaran satellite deposit, where modelling shows an average in situ ore grade of 4.48 g/t gold for mining scheduled in the next six months.

This half, Archipelago will also kick off activities at the higher grade Kopra deposit, where mine planning indicates mining of the ore in place at an average grade of 4.54 g/t.

Cash costs were US$753 per ounce of gold, with lower cash costs forecasted for the second half as output continues to ramp up, grades increase and stripping ratios decrease.

Full-year cash cost guidance has been updated to between US$580 and $640 per ounce of gold, due primarily to higher input costs for fuel and consumables, with labour costs also a touch higher than forecast.

In its bid to improve productivity and reduce costs, the company added that the plant efficiency measures are on track and are expected to contribute to higher production rates and lower per ounce costs for the rest of the year.

The company also revealed Toka Tindung’s chief operating officer Dave Morrison has left to pursue other ventures.

He will be replaced with immediate effect by Les Kwasik, who has over 35 years’ experience in the mining industry, having worked in a number of management, operational and strategic roles, most recently as chief operating officer for Maple Minerals in Canada and Mexico.

 

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