Gascoyne Resources has updated its production and cost guidance for the 2021 and 2022 financial years, with weather effects impacting June quarter production.
The June quarter to-date has seen “several adverse weather events”, according to Gascoyne, as well as sulphide content at higher than expected levels.
While production for the 2021 financial year should meet the upper-end of its guidance, around 76,000-80,000 ounces of gold, the June quarter will be down on the March quarter.
Gascoyne has also factored resourcing challenges and impairment testing are factored into its Western Australian operations.
“During the quarter to date, pockets of ore in the northern end of the pit outside of the Gilbey’s main zone (GMZ) were mined which contained higher gold grades and elevated sulphide content,” Gascoyne stated.
“Resourcing shortages and confined work areas in stage one have affected mining productivity in the quarter to date, adversely impacting the completion of mining stage one ore and delaying the timing of access to stage two GMZ ore in the Gilbey’s pit.”
The adverse ore will see production guidance remain the same (70,000-80,000 ounces) through financial year 2022, however sustaining cost guidance has risen from $1300-$1400 up to $1600-$1700 per ounce.
Gascoyne managing director Richard Hay said the company’s flagship operation hd remained reliable of late.
“The consistent supply of Gilbey’s Main Zone ore at Dalgaranga over the past 18-month period will continue over the next three years and underpin production levels of 70,000 to 80,000 ounces per annum,” Hay said.
Despite mandatory impairment testing, to be performed by the end of June, Gascoyne will look to ramp up its exploration efforts in the near future.
“Following a period of under investment in exploration, we recently re-invigorated our exploration program centred on Dalgaranga with the aim of growing our mineral inventory and annual production rate via the systematic testing of high priority targets within 15km of the plant,” Hay said.
The impairment testing has been enforced as Gascoyne’s market capitalisation remained below the carrying value of its assets.
“We continue to apply a prudent approach to capital management and are working closely with our service providers and suppliers to optimise our cost base,” Hay said.