Higher production at its Sao Bento mine in Brazil combined with the devaluation of that country’s currency has enabled
The company produced 46,111 oz. gold during the first quarter at an operating cost of US$179 per oz., compared with 43,525 oz. at US$255 per oz. a year ago.
In comparison with the fourth quarter of 1998, Eldorado reduced its cash operating cost by US$72 per oz., or 29%, from US$251 per oz. and increased overall production by 15.5%, from 39,992 oz.
Total production costs in the first quarter were US$266 per oz., compared with US$334 per oz. in the corresponding period last year. (Total production costs include cash costs plus depreciation, amortization and reclamation.)
Eldorado’s hedge position provided an average gold price of US$321 per oz. during the first quarter, resulting in a contribution margin (the difference between revenue and total cash cost) of US$136 per oz., or US$6.3 million. The company hedged all production for 1999 at an average price of US$320 per oz. An additional 165,000 oz. gold have been hedged at an average price of US$335 per oz. for the years 2000 and 2001.
The Sao Bento mine produced 29,748 oz. gold during the first quarter, compared with 23,881 oz. in the fourth quarter of 1998, while operating cash costs fell to US$178 from US$236 per oz. The mine sent 120,109 tonnes of ore to the mill with an average head grade of 8.19 grams gold per tonne. Production costs totalled US$262 per oz.
Meanwhile, the La Colorada mine in Mexico’s Sonora state produced 16,363 oz. gold in the first quarter, compared with 16,051 oz. in the fourth quarter of 1998, while operating cash costs dropped to US$180 from US$273 per oz. La Colorada sent 488,775 tonnes of ore to the leach pad with an average grade of 1.54 grams gold per tonne. Total production costs were US$272 per oz.
In 1999, Eldorado plans to produce a total of 185,000 oz. gold at an average cash cost of US$215 per oz.
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