Centerra Gold Inc. (Centerra) and Kumtor Gold Company (KGC) have summed up their operating results in the first quarter of 2018, the Media Relations Department of the company has reported.
Kumtor produced 100,220 ounces of gold in the first quarter of 2018 compared to 127,400 ounces of gold in the same period of 2017. The decrease in ounces output in the first quarter of 2018 is a result of processing the stockpiled ore from the Sarytor pit, which is lower grade and more metallurgically complex, as compared to the stockpiled ore processed from cut-back 17 in the comparative period of 2017.
Gold sales in the first quarter were 116,919 ounces, or 3.64 tons. Total revenues from gold sales in the first quarter of 2018 were $153.0 million.
Operating costs (on a sales basis), including capitalized stripping, decreased in the first quarter of 2018 by $10.6 million, to $71.3 million compared to $81.9 million in the same period of 2017. The movements in the major components of operating costs (mining, milling and site support), including capitalized stripping but before changes in inventory, is explained below.
Mining costs, including capitalized stripping, totaled $51.1 million in the first quarter, up by $3.4 million YoY. Increased costs for the first quarter include higher diesel costs ($5.3 million) due to higher consumption resulting from an increase in tons mined and higher fuel prices, as well as higher labor costs ($0.8 million) mainly due to unfavorable exchange rate fluctuation.
Milling costs amounted to $15.5 million in the first quarter compared to $15.4 million in the comparative quarter of 2017. Higher mill reagent costs ($0.7 million) were mainly due to increased processed tons in the mill.
Site support costs in the first quarter totaled $12.9 million compared to $10.7 million in 2017. The increase is attributable primarily to higher costs for food supplies and other miscellaneous costs.
During the first three months of 2018 contributions to the national budget in taxes, deductions to the Social Fund and other mandatory payments totaled 1.97 billion soms.
Kumtor’s 2018 gold production forecast is expected to be in the range of 450,000 to 500,000 ounces with about 45% of the gold production expected in the fourth quarter. In 2018 Kumtor’s all-in sustaining cost on a by-product basis is expected to be in the range of $733 to $815 per ounce sold. At Kumtor 2018 total capital expenditures, excluding capitalized stripping, are forecast to be $63 million. Spending on sustaining capital of $49 million relates primarily to major overhauls and replacements of the heavy duty mine equipment ($42 million). Growth capital investment at Kumtor for 2018 is forecast at $14 million primarily related to tailings dam construction ($9 million).
The cash component of capitalized stripping costs related to the development of the open pit is expected to be $122 million of the $168 million total capitalized stripping estimated for 2018.
Scott Perry, President and Chief Executive Officer of Centerra stated, “I am pleased to report that the roll-out of our Work Safe – Home Safe program has been fully embraced across the organization and we are now embarking on our drive to zero harm within the work place. We are seeing the early benefits of this safety program where on April 11 our Kumtor operation achieved a significant milestone of one full year and 6 million man-hours without incurring a lost time injury.” (24.kg/Ukrainian metal)
