“Looking ahead, 2017 will be a year of two halves for Asanko Gold. With the first half focused solely on mining fresh ore from Nkran, production volumes will be lower and costs will be higher compared to H2.
[quote]“In H2, as we bring our second pit, Dynamite Hill, into production, the softer oxide ore is cheaper to both mine and process and we expect that the incremental ore from Dynamite Hill, coupled with the Project 5 Million plant expansion, will deliver increased volumes and lower operating costs enabling us to meet our 2017 production and cost guidance.
Project 5 Million is progressing well and is ahead of schedule, with commissioning now expected in Q4, 2017. All the long lead items have been ordered and we will be starting the upgrades during this quarter.”
With a strategic stockpile of 1.5 Mt, which is equivalent to five months of production, now in place as well as the dual ramp system, ore mining rates dropped during the quarter to more optimal levels.
Ore mining rates for the quarter averaged 339 096 tpm at an average mining grade of 1.8 g/t.
Waste mining took place in the north and western sides in preparation for the next sequence of ore mining in the centre of the pit. The next push-back sequence will commence during Q2, 2017.
The grade for the quarter was lower as a result of mining through a planned lower grade section of the ore-body. The increase in the strip ratio this quarter was driven by the implementation of the new CSA Global resource model mid-way through the quarter.
Going forward, the life of mine strip ratio for Nkran is expected to be around 6:1, which will be confirmed by the new life of mine plan that will be included in the expansion definitive feasibility study due to be published in Q2, 2017.
The processing plant continued to operate at an annualised rate of 3.6 Mtpa during the quarter. The upgrades to the crushing circuit were commissioned during the quarter, which is now capable of handling the increased throughput requirements to the milling circuit, in anticipation of commissioning Project 5 Million later this year.
Metallurgical recoveries continued to exceed design levels at 95%. Gold production for the quarter averaged 19 300 ozpm.
Sales and liquidity
Gold production for the quarter was 58 187 oz with gold sales of 57 812 oz at an average realised price of US$1 199/oz, generating gold sales revenue of $69.3 million.
At 31 March 2017 Asanko Gold’s balance sheet had approximately $48 million in unaudited cash, $11.5 million in gold receivables and $5.3 million in ore.
Asanko Gold has no significant current long term debt obligations with its first principal repayment on its $150 million debt facility not due until 1 July, 2018.
Asanko Gold continues to expect to fund Project 5 Million and the development of Esaase, and the associated conveyor, from current balances and future cash flows.
Health and safety
There was one lost time injury reported during the quarter and the 12-month rolling lost time injury frequency rate per million man hours worked stands at 0.21.
Feature image credit: Asanko Gold
(Mining activities at Asanko gold mine in Ghana)