Centerra Gold Inc. (Centerra) and Kumtor Gold Company (KGC) have summed up their operating results in 9 months of 2017. KGC produced 404,584 ounces or 12,583.98 kg of gold, Public Relations Department of Kumtor Gold Company reported.
During the third quarter of 2017, Kumtor produced 138,561 ounces of gold compared to 166,030 ounces of gold in the comparative period of 2016.
Gold sales in the third quarter were 99,514 ounces, or 3.1 tons. Total revenues from gold sales in the third quarter were $124.3 million.
The Dore bars produced by the Kumtor mine are purchased by Kyrgyzaltyn JSC for processing at the Kara-Balta refinery pursuant to the Gold and Silver Sales Agreement signed by KGC, Kyrgyzaltyn and the government of the Kyrgyz Republic. Kyrgyzaltyn JSC enjoys the exclusive right to sell refined gold and silver both in and outside the Kyrgyz Republic.
Operating costs (on a sales basis) for the third quarter decreased by $18.5 million, to $26.7 million, as compared to the same quarter of 2017, reflecting 41% more tonnage moved including significant amount of waste removal in cut-back 18 of the Central pit, which was capitalized in the third quarter.
Including capitalized stripping, operating costs were $57.5 million compared to $83.9 million in the comparative third quarter of 2016.
Mining costs, including capitalized stripping, totaled $49.2 million, up by $4.7 million YoY.
Increased costs for the third quarter of 2017 include:
– higher diesel costs ($1.8 million) mainly due to increased purchase price;
– higher blasting costs ($1.3 million) primarily due to increased blasting volumes;
– higher labor cost ($1.2 million) due to a new collective bargaining agreement and strengthening of the local currency;
– higher maintenance cost ($0.7 million) resulting from additional repair work required on the 785 haul trucks.
Milling costs increased to $19.5 million in the third quarter of 2017, as compared to $16.1 million in the comparative quarter of 2016. The higher milling costs were due to comprehensive maintenance work during the planned total shutdown for the SAG, ball and regrind mills liners performed during the third quarter of 2017, whereas only SAG mill reline work occurred in the comparative period in 2016.
During the shutdown, Kumtor took the opportunity to replace other mill components of boilers, derrick screens, and on the crusher.
Site support costs in the third quarter totaled $10.5 million compared to $10.1 million in the comparative quarter in 2016. Site support costs increased slightly due to higher contractors costs for a major site clean-up initiative.
DD&A associated with sales, decreased to $27.8 million in the third quarter, from $51.3 million in the comparative quarter of 2016, a 46% decrease. The decrease in 2017 is primarily due to 40% fewer ounces sold in the third quarter.
All-in sustaining costs on a by-product basis per ounce sold, which excludes revenue-based tax, were $807 for the third quarter of 2017 compared to $555 in the third quarter of 2016, representing an increase of 45%, primarily as a result of 40% fewer ounces sold.
The third quarter of 2017 also includes the new environmental fee ($2 million accrued not yet paid) for the Nature Development Fund as a result of the comprehensive settlement agreement reached with the Kyrgyz Republic Government (impact of $20 per ounce).
Including revenue-based taxes, all-in sustaining costs on a by-product basis per ounce sold was $983 for the third quarter of 2017 compared to $742 in the same period of 2016. The increase is due to the higher all-in sustaining costs.
During the third quarter of 2017, contributions to the national budget in taxes, deductions to the Social Fund and other mandatory payments totaled 2 billion soms.
Scott Perry, CEO of Centerra Gold, stated, “During the third quarter both of our operating sites completed the deployment of our company-wide safety leadership program “Work Safe, Home Safe” with every employee. For the rest of the year we will continue to deploy the program at the balance of our sites, so that by year-end every Centerra employee will have received training”.
“In the quarter, we achieved an important milestone when we reached a comprehensive settlement agreement with the government of the Kyrgyz Republic to resolve all of the outstanding matters affecting the Kumtor Project”, Scott Perry said. “The settlement provides for the lifting of all restrictions on the freedom of movement of Kumtor employees as well as the restrictions on the ability of Kumtor to distribute funds to Centerra. The agreement also provides business certainty for future mining operations at the Kumtor Project, as it preserves all rights of Centerra and Kumtor under the Kumtor Project Agreements.” (24.kg/Ukrainian metal)