Stephen Odoi-Larbi
5 November 2008
Chirano Gold mines, wholly owned by Redback mining company, in the third quarter of its operations, produced 25,752 ounces of gold at a cash operating cost of $596 per ounce (year-to-date, 89,447 oz at $474 per ounce).
According to officials of the company, in a release posted on its website last Sunday, cash costs in the third quarter were higher than they budgeted for, due principally to three factors.
First, the government of Ghana increased the cost of electricity by 100% on July 1st, 2008, in response to higher in-country energy costs and $150 per barrel of crude oil. Secondly, portable crushing continues to be necessary to deal with the hardness of the Chirano ore, a situation which according to company officials, will cease upon completion of the new crushing facility by the end of the year.
Third, a pit wall failure at the Tano deposit necessitated a change in mining schedule which resulted in the mining of a lower grade in the ore in the third quarter.
Officials of the company said cash costs for the balance of the year are expected to remain higher than originally forecasted, until the new crushing circuit becomes operational and mining of ore from Akwaaba Deeps commences. The parent company (Red Back mining), on annual basis expects Chirano's 2008 cash operating costs per ounce to average approximately $494 per oz. in 2008, annual production for Chirano is now forecasted at approximately 120,000 oz.
However, ore reserves at Akwaaba Deeps have increased to 1.04 million oz and open pit reserves to 1.38 million oz. The development of Akwaaba Deeps, according to officials of the company, is well advanced with first underground ore on target to be delivered to the mill in the fourth quarter of the year (2008).
Plant expansion of the mine remains on schedule with commissioning targeted for the first quarter of 2009. This is expected to boost the company's production, whilst maximizing profit.
Red Back's operations in Mauritania, Tasiast Gold Project, in its third quarter of operations also produced 34,251 oz at a cash operating cost of $403 per ounce (year-to-date, 98,734 at $412 per ounce). Its operating costs were marginally higher than forecasted due to increased fuel costs. That, not withstanding, Red Back anticipates that operating costs will decrease in the fourth quarter to average approximately $400 per oz for the year, due to the final commissioning of a power generation plant that utilizes lower cost heavy fuel oil.
Tasiast is now expected to produce 135,000 oz in 2008, about 25,000 oz more than originally budgeted.
The expansion of the Tasiast processing facility remains on schedule. Commissioning of this facility is also expected in the first quarter of 2009. Upon completion of the expansion work, Tasiast is forecast to produce 250,000 oz of gold per annum from 2010.
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