Saracen achieves record production amid pandemic

Thunderbox open pit mine. Image: Saracen Minerals

Saracen Mineral Holdings has capped off the March 2020 quarter with record quarterly gold production of 158,132 ounces at an all-in sustaining cost of $1133 per ounce.

This was guided by a record quarter at the Thunderbox gold mine near Leinster, Western Australia, which contributed 50,091 ounces to the record result.

Saracen’s strong quarter was also underpinned by the performance of the Carosue Dam in Western Australia, where the company produced 49,478 ounces, and Kalgoorlie Consolidated Gold Mines, where Saracen has a 50 per cent stake, contributing 58,563 ounces.

To top off this result, Saracen achieved a record net mine cash flow of $141 million and gold sales of 165,798 ounces, which drove a record average price of $2228 per ounce, generating $369 million in revenue.

Saracen confirmed that the coronavirus had “minimal impact” on the March quarter but had “no certainty” that the June quarter would not be affected.

The company retained its 500,000 ounce-plus guidance for the 2020 financial year and has ore stockpiles exceeding 1.7 million ounces, which will insulate the business should mining activities be halted due to the pandemic.

Saracen has also continued to mill higher-grade stockpiles at Carosue Dam and Thunderbox to bring forward production ounces and cash flow into the 2020 financial year.

The company’s 2021 financial year production guidance remains at 600,000-plus ounces.

With this build up of stockpiles, Saracen’s long-term strategy is to future-proof its business, according to company managing director Raleigh Finlayson.

“These results highlight the growth Saracen is enjoying at all levels of its business,” Finlayson said.

“As part of our strategy to maximise free cash flow while also insulating business, we will bring forward processing of some higher-grade stockpiles into the current quarter. This will provide an additional buffer against any operational impacts which may emerge at a later date as a result of COVID-19.

“We believe this strategy, along with our decision to draw down our $45 million corporate revolver facility, are prudent in the circumstances.”

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