Roughly a year after it was forged out of the merger of Anatolia Minerals and Avoca Resources, Alacer Gold (ASR-T) showed the market that its operations are humming along, and that its aggressive exploration program could be set to pay near term dividends.
The company announced attributable production for 2011 of 411,933 oz of gold, with the bulk of that coming from its Copler mine in Turkey (185,418 oz.) and its Higginsville mine in Australia (146,323 oz.).
Alacer said it expects to produce 384,000 to 402,000 oz. of gold in 2012, which is slightly off of last years mark due to its decreased stake in Copler. It also issued guidance on total cash cost, which it estimates will come in at US$668 to US$693 per oz.
While Copler performed admirably in its first year of operation, Alacer will have to accept less of its bounties. The mine’s impressive results encouraged Turkish-based Lidya Mining to exercise its option and boost its stake in Copler to 20% from 5%. The transaction closed in January.
While Copler outperformed – the mill was designed to produce 180,000 oz. per year but wound up turning out an extra 5,000 oz. – the news at Higginsville wasn’t quite as good. Production at the mine fell-off slightly as it was down 2% in the fourth quarter to 34,263 oz. due to lower head grades.
The company’s other Australian mine, South Kalgoorlie, also saw a quarter over quarter dip in production, this time the tune of 11% as the mine turned out 21,790 oz. for the quarter because of lower grade ore mined.
More production could be on its way in the form of organic growth as Alacer released strong exploration results over the course of last year.
The biggest find happened near its Higginsville project as drilling intersected laminated quartz veins containing 2.35 metres grading 658 grams gold from 181.1 metres and 1.9 metres grading 225.2 grams gold from 201.5 metres. Alacer is calling the newly discovered zone the Corona Prospect and it sits 2.5-km south of the Higginsville Processing Plant and 1-km east of its Vine Pit.
Exploration results in Turkey were also stellar as the company drilled more than 50-km at Copler over the course of the year.
Some of the key mineralized areas discovered were an extension of the Copler Main Zone 100 metres to the west of the current sulfide resource boundary; depth extensions to the Southern Main Zone resource boundary over a strike length of 500 metres and at the northern end of Main Zone near the old village of Copler. All three areas returned significant widths and grades.
Over the course of the year the company says it will spend $58 million on exploration with Copler getting $10 million, regional plays in Turkey not including Copler getting $14 million, Higginsville receiving $16 million and South Kalgoorlie seeing $18 million worth of capital.
In Toronto on Jan.24 the company’s shares were off 12% or $1.26 to $9.64 on 1.9 million shares traded.
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