Low operating costs triumphed over weak gold prices for
The Ghana-based producer earned US$16.4 million (or 15 cents per share), up 6% from earnings of US$15.5 million (14 cents per share) in the corresponding period last year.
Lower operating costs were reported at all six of the company’s mines. However, a 13-day strike in June at the main Obuasi complex kept Ashanti from reaching its production target. The company nevertheless produced 342,621 oz. during the quarter, with 325,621 oz. attributable to the company. Cash operating costs, excluding US$7.4 million incurred during the strike, averaged US$211 per oz.
As a result of the work stoppage, Ashanti signed a new wage agreement with the Ghana Mineworkers Union. Shortly afterwards, it signed another agreement with the union to reduce the workforce at Obuasi by more than 20%.
Nevertheless, Obuasi contributed 143,865 oz. at a cash cost of US$238 per oz., down from 210,171 oz. at US$225 in the second quarter of 1998.
Ashanti exceeded production targets at the Bibiani mine, with production of 63,000 oz. at US$183 per oz., compared with 54,015 oz. at US$180 in the first quarter of this year, and compared with 32,784 oz. at US$168 in the second quarter of 1998.
At the 85%-owned Siguiri mine in eastern Guinea, Ashanti produced 54,579 oz. at US$176 per oz. — down slightly from 59,806 oz. at US$164 in the first quarter of 1999, and down also from 59,529 oz. at US$158 in the year-ago quarter.
The company is commissioning the crushing and conveying portions of the Siguiri II expansion project, which is expected to double ore-processing capacity to 8 million tonnes per year. By June, ore-processing had already reached the target rate of more than 650,000 tonnes per month.
In the meantime, Ashanti continues exploration drilling around the Sanu Tinti and Eureka Hill deposits to replace the ounces that will be mined by the end of the year.
In Zimbabwe, deep drilling from the surface has begun at the Freda-Rebecca mine, testing for mineralized extensions. The company also plans to follow up on underground drilling that intersected mineralization in the upper portion of the mine.
In Tanzania, Ashanti is awarding development contracts and has begun clearing and stripping at the Geita gold project in the Lake Victoria Gold Fields region. The company expects to spend US$165 million building a mine capable of producing 400,000 oz. per year at a cash cost of US$180 per oz. Plans call for the mine to be operational by the end of the third quarter of 2000.
Meanwhile, drilling at the Nyankanga prospect is aimed at evaluating the underground potential below the planned open pit. Ore-grade intercepts below the pit include 27 metres averaging 30.3 grams per tonne, as well as 18.5 metres of 16.3 grams per tonne and 27 metres of 8.6 grams.
Also in Tanzania, Ashanti signed an agreement to earn a 60% interest in the Kitongo and Buckreef projects, 40 km from Geita. The company has also decided to proceed with a final feasibility study on the Youga project in Burkina Faso with partner
Be the first to comment on "Ashanti posts strong second quarter"