Kingsgate forecasts doubling of gold output

Goldminer Kingsgate Consolidated has forecast a doubling in gold output as it ramps up production in Thailand and as output recovers at its Challenger mine in South Australia.

A strong uptick to production in the December quarter resulted in Kingsgate forecasting stronger production in the second half of the year following the successful commissioning of the Chatree North expansion.

Kingsgate said it now expects year to June gold output of between 210,000 and 230,000 ounces, which includes 115,000 to 125,000 ounces from Chatree and between 95,000 to 105,000 ounces from Challenger.

In the year to June, 2011, production was 113,134 ounces, with Chatree contributing 76,248 ounces and Challenger 36,886 ounces. Gold sales for the year were 114,380 ounces at an average gold price of $US1,386 an ounce.

“It’s a positive story and we’ve seen a good turnaround,” Matthew Baillieu of Veritas Securities said. “I was anticipating a slight improvement in the grade at Chatree that didn’t come through due to pit access.

“But I did not expect 1.3 million tonnes of ore throughput, so the expansion has ramped up well. It’s a positive quarter. It’s had a few rough quarters and its now turning around.”

Discussing the quarterly performance with securities analysts, management expressed the view that investors are not putting much value on the company’s exposure to silver, following its $75 million purchase of the Bowdens silver deposit near Mudgee, in western NSW.

However analysts cautioned that Kingsgate is yet to firm up the extent of this deposit and finalise initial feasibility studies, amid concern that the silver price may be elevated at present.

Along with doubling output at the Chatree deposit to 200,000 ounces annually, which is now being commissioned, Kingsgate has expanded in recent years by buying the Challenger gold mine, the Bowdens silver deposit and also the Nueva Esperanza project in Chile.

Tags: Gold, Gold mining, Gold mining companies, Gold mining industry, Kingsgate

Posted by admin on Jan 31 2012. Filed under Gold mining. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry