Gold miner Saracen Mineral Holdings has enjoyed record production from its Western Australian mines in the 2018 financial year.
The company exceeded its 310,000-315,000oz guidance by delivering 316,453oz within a production cost budget of $1,139/oz.
Saracen’s production comes from two operations, Carosue Dam and Thunderbox, which contributed 171,301oz and 145,152oz, respectively.
The company has increased its 2019 financial year production guidance to 325,000-345,000oz, at a reduced production cost of $1050-1100/oz.
Saracen managing director Raleigh Finlayson said, “Our results have gone from strength to strength on every front. This is a direct result from the investment we made in exploration and development in recent years.”
Last quarter, Saracen’s Carosue Dam operations awarded a $440 million underground contract to the Perth-based contractor Byrnecut Australia, which was its largest single contract in the company’s history.
The miner also hedged 140,000oz of gold at an average price of $1520/oz via Macquarie Bank, aimed to support its initial capital investment in the Thunderbox operations.
Despite spending $22.8 million on exploration, investment program and growing ore stockpiles by a further 29 per cent, Saracen still landed at a strong cash position of $118.3 million by end of June this year. This was a climb from its cash position of $101.5 million in March this year.
Finlayson said, “We have achieved this while also continuing to invest in growth, as shown by the outstanding exploration results we are generating across our assets. We are confident that this strategy will underpin ongoing growth in our inventory, production rates and free cash flow.”
For the June quarter, Saracen’s gold sales were valued at 82,206oz at an average sale price of $1655/oz, which was lower than the already falling spot gold price of $1688/oz last February.