Saracen maintains 2020 guidance despite coronavirus

Saracen Mineral Holdings is on track to produce a record 150,000 to 155,000 ounces of gold across its operations during the March quarter, seeing minimal impact from the coronavirus pandemic.

The company announced it will not withdraw its full-year production guidance of more than 500,000 ounces, but noted that there was no certainty operations would not be affected by coronavirus related measures in the June quarter.

Saracen’s announcement is in contrast to fellow Super Pit owner Northern Star Resources, that announced measures to control the spread of coronavirus had dented its March quarter production by up to 15 per cent.

Northern Star, which operates the Super Pit with Saracen, has withdrawn its production and cost guidance for the full year and postponed the payment of an interim dividend to shareholders by at least seven months.

Saracen managing director Raleigh Finlayson said efforts to “future-proof” the business through the build up of ore stockpiles were set to offer a buffer from some of the coronavirus fallout.

“Saracen’s long-standing strategy to ‘future-proof’ the business offers a high degree of resilience to the risks and challenges posed by COVID-19 (coronavirus), in particular the prudent build-up of surface ore stockpiles for processing to the tune of 1.7 million ounces,” he said.

Finlayson said the measures taken so far to protect workers at its Western Australian mines and the wider community would be felt in the June quarter.

“The controls and restrictions we have put in place in recent weeks are likely to impact our mining production rates in the coming quarter,” he said.

“At this stage, with the benefit of substantial ore stockpiles, we expect the impact to be limited on mill production … it may also become necessary to implement further measures, which we will do without hesitation if circumstances require.”

Saracen has changed its fly-in, fly-out (FIFO) rosters to at least three weeks on/three weeks off.

All FIFO travel is restricted to charter flights and there is strict health screening of workers before departures.

The company’s debt stands at $360 million after making voluntary repayments of $40 million in the past four months and it is continuing to deliver gold into its hedge book as scheduled.

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