Mining Breaks

Argonaut Gold has posted record Dec 2019 year (FY/CY19) gold equiv production of 186,615oz, up 13% on the previous year and an annual production growth of 53% over the last 3-years, but short of 200,000oz guidance set back in 2017.
The shortfall on production from the company’s El Castillo Complex and San Agustin mine, in Durango, Mexico, and La Colorada mine in Sonora, Mexico, was driven by a number of factors that contributed to the build-up of leach pad inventory, now under review.
The increase was led by El Castillo and La Colorada mine production jumping to 131,277oz AuEq and 55,338oz AuEq respectively, well up on FY/CY18’s 117,126oz and 47,991oz.
At Dec 31, 2019, the company had cash of $US38.8M and $10M drawn on its revolving credit facility, a net cash increase of $7.2M during Q4 19. Argonaut anticipates full FY/CY19 results Feb 24, 2020.

Russian steelmaker/miner Severstal has posted higher iron ore concentrate sales of 6.26Mt for the year to Dec 2019, up from 5.51Mt in FY2018, predominantly reflecting increased volumes at Karelsky Okatysh and the Yakovlevskiy mine. Iron ore pellets output was steady at 11Mt (10.9Mt).
Planned production growth at Vorkutaugol delivered coking coal concentrate sales volumes of 4.67Mt (FY2018: 3.37Mt).
Hot metal output increased to 9.49Mt (9.15Mt) due to improved efficiency that resulted from recent maintenance and the processing of higher-quality raw materials.

West Australian miner Red 5 remains confident of meeting its FY20 targets despite production and mine scheduling delays that restricted Dec qtr (Q2) gold production at its Darlot and King of the Hills mining operations 900km NE of Perth to 23,346oz at AISC of $A1,628/oz (Q1: 28,649oz at $1,476/oz).
After failing to make it in the Dec qtr, Red 5 now expects to access several high-grade stopes at Darlot’s Oval West deposit early this month.
March qtr production is tipped to recover to 25,000-29,000oz at $1,450-1,585/oz, staying on track for 110,000-120,000oz at $1,350-1,500/oz.

Updated technical work on Taseko Mines’ Yellowhead Copper Project in Central British Columbia, Canada, has lifted recoverable copper reserves 22% to 817Mt grading 0.29% copper equiv and added $C500M to the 2014 FS taking the project’s pre-tax NPV8% to $1.3B.
The new numbers envisage a pre-production capex $1.3B project producing in excess of 4.4Blbs of copper, 440,000oz gold and 19Moz silver over an initial 25-year LoM, with average annual LoM copper output of 180Mlbs.
CEO Russell Hallbauer says Yellowhead has the potential to be one of the largest open pit copper mines in N America. “The leverage this mine has to metal prices is huge and with only a 10% increase in these assumptions, the pre-tax NPV climbs to $2B.” Yellowhead has a pre-tax IRR of 18% with payback in 4.2-years, a cost per tonne milled of $9.97 and current average annual LoM pre-tax cashflow of $270M.
Taseko acquired the project in Feb 2019 for about $13M in Taseko shares.

The end of resources at Avino Silver & Gold Mines’ wholly-owned San Gonzalo mine near Durango, Mexico, has cut Avino/SanGonzalo Dec 2019 year (FY/CY19) silver equiv production 16% on FY/CY18 to 2.39Moz, with gold sliding 15% to 6,912oz and silver down 25% to 958,811oz, but with copper 3% better to 4.97Mlbs.
The fall was primarily down to the San Gonzalo mine grade/production run down to reach the end of its current resources in Q4 19 when mining ceased, albeit remaining open for continued exploration at different underground levels as Avino transitions to full production.
Avino silver equiv produced fell 10% to 1.65Moz on silver output down to 510,270oz from 614,361oz and gold down 3% 4,473oz, with copper steady at 4.56lbs. As expected, San Gonzalo silver equiv production plunged 66% to 215,148oz, with silver down the same to 153,372oz and gold down 72% to 581oz.

Delays in ramping up the Far West mine as its predecessor West 45 mine declined towards completion expected in the Sept 2020 qtr have reduced Dec qtr (Q2FY20) concentrate production at Australian miner Red River’s Thalanga project in central Qld to 3,781dmt (Q1: 6,199t) zinc, 876t (2,016t) lead and 1,560t (1,372t) copper.
Concentrate sales of 4,149t (6,191t) Zn, 945t (2,381t) Pb and 1,455t (1,425t) Cu were delivered under long-term offtake agreements to Trafigua (Zn, Pb) and Glencore (Cu).
Red River says it’s working with mining contractor PYBAR to build Far West ore production to its 30,000-40,000tpm design capacity.

A good Dec 2019 year (FY/CY 19) from Mandalay Resources’ Björkdal, Sweden, gold operation has been offset by a bad one from its Costerfield gold-antimony operation in Victoria, Australia, cutting gold equivalent production to 76,659oz AuEq from 81,568oz, with gold down to 66,756oz from 67,329oz and antimony to 2,032t from 2,173t on the previous year. However, FY/CY20 is looking much better.

Rio Tinto is forecasting higher iron ore shipments in the coming year after weather and operational challenges saw exports from its Pilbara operations in Western Australia slip to 327.4Mt in FY2019, 3% lower than the prior period.
In reaching its FY2020 production guidance of 330-343Mt, the miner expects more stability in global GDP growth.
Chief executive J-S Jacques says Rio goes into the year with momentum after shipping 86.8Mt in the Dec qtr and the approval of its $US749M Western Turner Syncline Phase 2 development to sustain production capacity.
The successful ramp-up of the Amrun mine in Qld boosted FY2019 bauxite production by 9% to 55.1Mt.

Global gold miner Kinross Gold has completed its $US283M acquisition of the high-quality Chulbatkan open pit, heap leach gold development project in Russia from N-Mining.
Based on due diligence and internal analysis, Kinross estimates Chulbatkan has an indicated approx 3.9Moz indicated and 80,000oz inferred, with the current footprint covering less than 1% of the total 120sq km license area. The company has begun a comprehensive, $US10M exploration drilling program at Chulbatkan with a view to updating the current resource base at end 2020.

Global gold major Barrick Gold has met full-year guidance targets with preliminary Dec 2019 year (FY/CY19) gold production up to 5.5Moz from the previous year’s 4.53Moz, at the top end of 5.1Moz-5.6Moz expectations.
Copper output did the same to 432Mlbs from 383Mlbs, exceeding the top-end guidance of 375Mlbs-430Mlbs. Gold sales jumped to 5.46Moz from 4.54Moz, but copper sales eased to 355Mlbs from 382Mlbs.
Full FY19 year results expected Feb 12, 2020.

Asanko Gold’s 50/50 J/V Asanko Gold Mine in Ghana with Gold Fields has posted record Dec 2019 year (FY/CY19) gold production of 251,044oz from FY/CY18’s 223,152oz (100% basis), exceeding the upper end of 225,000oz-245,000oz guidance.
The output resulted in record proceeds of $US342.4M from gold sales up to 248,862oz from 227,772oz at an average realized price up to $1,376oz from $1,247oz. Preliminary AISC were 5% above guidance of $1,040-$1,060oz at $1,112oz.
Asanko finished FY19 with cash/receivables of over $35M, up over $27M, with no debt. Full results expected Feb 13, 2020.

Gold production falls from all 3 of its producing mines has seen IAMGOLD’s Dec 2019 year (FY/CY19) attributable output plunge to 762,000oz from the previous year’s 882,000oz, the low end of guidance already reduced to 765,000oz-810,000oz.

Global light metals giant Alcoa has launched a multi-year portfolio review ahead of reporting a net loss of $US1,125M for FY2019, a turnaround from its $250M net income in the prior year. Adjusted net loss excluding special items was $184M (FY2018: $698M net income).
Adjusted EBITDA excluding special items was $1.66B ($3.1B) on revenue that fell 22% to $10.4B.

Canadian-based miner Galantas Gold has engaged UK corporate adviser Whitman Howard to advise on alternatives including a sale, joint venture or partnership for its Omagh gold mine near Belfast, where production has been limited by Northern Ireland’s restrictive laws on blasting.
Galantas estimates Dec qtr (Q4) concentrate production at 152.46t, all derived from stockpiled material, and gold content 497.62oz.
The company has significantly reduced workforce numbers, with some mining operations continuing on a single shift.

East African producer Shanta has posted FY2019 gold production of 84,506oz at its New Luika mine in SW Tanzania, up from 81,872oz in the previous year and exceeding its 80,000-84,000oz guidance. AISC was $US779/oz (FY2018: $731/oz), just meeting its $740-780/oz forecast.
Shanta is forecasting FY2020 production of 80,000-85,000oz at $830-880/oz, allowing for the reintroduction of supplementary openpit mining from Shamba, the non-cash impact of utilising ore stockpiles and royalties on anticipated higher selling prices.

Record Dec qtr (Q4) production has enabled European mining and development company Atalaya Mining to lift FY2019 production at its 100%-owned Proyecto Riotinto in SW Spain to 44,950t copper, up from 42,114t in the prior year and in the upper range of its updated guidance.
CEO Alberto Lavandeira says the project is now operating at increased capacity of 15Mtpa, supporting its FY2020 guidance of 55,000-58,000t.

West Australian miner Pantoro has appointed new general manager Tom de Vries and made other operational changes as it attempts to reverse declining production at its Halls Creek gold project in the Kimberley region that saw it deliver 9,403oz at AISC of $A2,014/oz in the Dec qtr (Q2FY20). It followed Q1 output of 10,631oz at $1,526/oz in Q1.
Pantoro accelerated exploration at its 50%-owned Norseman project despite minor disruption to site access from bushfires in the festive season.

Explorer Cora Gold’s initial scoping study on its flagship Sanankoro Gold Project in the Yanfolila Gold Belt of S Mali has flagged a $US22.7M capex ($20.6M pre-prodn capex), 1.5Mtpa stand-alone heap leach operation producing an average +45,000oz pa at AISC $942oz over an initial 3-years providing +$19Mpa average free cash flow with payback in less than 18 months.
Using a $US1,400oz gold price, the study ascribes Sanakoro a 73% post-tax IRR and NPV8% of $24.2M post tax, based on current near surface inferred JORC oxide/sulphide resources of 265,000t. Cora sees the key to the project’s future in drilling out more oxide resources to extend the LoM and sustain the cash flow well beyond this maiden study. Only 25% of the total strike length of the potential mineralised zones identified has been drilled and is continuing, with the aim of finding 1Moz-2Moz gold to a depth of just 100m.

A 14% increase in Dec qtr (Q4) output has enabled Australian major coal producer Yancoal to deliver attributable saleable coal production of 35.6Mt for the year to Dec 2019, up from 32.9Mt the previous year and meeting its 35Mt FY2019 target.
Australia’s widespread bushfires resulted in temporary suspensions of operations at some Hunter Valley mines due to workforce health and safety risks from poor air quality.
Attributable thermal and metallurgical coal sales rose to 35.6Mt (FY2018: 32.8Mt) at an average $A93/t ($107/t), reflecting lower demand and uninterrupted supply impacting global prices.

Mineral sands miner Iluka Resources has turned to hydrogeological drilling specialist Vysarn with the award of a contract worth about $A1.875M for dewatering and injection wells for the southern area development project at the Cataby mine site in Western Australia.
Vysarn’s wholly owned subsidiary Pentium Hydro plans to mobilise to site early Feb for a contract expected to bce completed by end-2020.
MD Sheldon Burt says Pentium has committed 7 rigs committed to drilling programs since its acquisition of the assets in Sept 2019, strengthening its strategy of becoming WA’s premium dewatering service provide specifically to Tier 1 mining clients.