Mines in Mauritania and Ghana posted record production in the fourth quarter for gold producer Red Back Mining (RBI-T, RBIFF-O), according to preliminary financial results.
The company’s Tasiast mine in Mauritania and its Chirano mine in Ghana together produced a total of 72,664 oz. gold during the quarter ended Dec. 31, 2008, at a total operating cash cost of US$393 per oz.
Tasiast, 300 km north of Mauritania’s capital city, Nouakchott, produced 41,318 oz. gold at a cash operating cost of US$319 per oz. while Chirano, about 100 km southwest of Kumasi, Ghana’s second-largest city, produced 31,346 oz. gold at a cost of US$497 per oz.
Operating costs at the Tasiast gold mine were lower than expected due to higher production levels and lower mining costs, the company said. Red Back estimates cash operating costs this year will average US$320 per oz. based on a production forecast of 230,000 oz. gold.
The expansion of the Tasiast processing facility remains on schedule and on budget; commissioning will start in April.
Red Back acquired Tasiast from Lundin Mining (LUN-T, LMC-n) in August 2007. Tasiast is the first mine in the prospective 70-km long by 15-km wide Archaen age Aoueouat greenstone belt in northwestern Mauritania.
Red Back notes that this belt is similar to other Archaen greenstone belts in the world that host major gold deposits. The Tasiast property covers a 60-km strike length on the greenstone belt.
At its 90%-owned Chirano gold mine in Ghana, cash operating costs are expected to remain in a US$478-$497 per oz. range until the company completes its new crushing facility and plant expansion.
Those two projects will be commissioned in the first and third quarters respectively. Red Back estimates Chirano’s 2009 cash operating costs to average US$480 per oz. based on a production forecast of 170,000 oz. gold this year.
Chirano, which poured its first gold in October 2005, has 11 deposits. Drilling at its Akwaaba deposit has outlined a high-grade underground resource called Akwaaba Deeps. The majority of the ore there will be mined by open pit methods.
In the fourth quarter, the Akwaaba Deeps underground development delivered its first ore to the mill. Red Back has developed its Akwaaba Deep decline to a depth of 605 metres.
Other highlights of the fourth quarter include an average realized price of $786 per oz. gold and the successful closure of a C$60 million equity financing. In November Red Back sold 17 million shares at $3.50 each.
(Last month the company raised an additional $150 million in a bought-deal financing agreement.)
At presstime in Toronto, Red Back was trading at about $6.94 per share.
The unhedged Vancouver-based gold producer has a 52-week trading range of $3.28-$9.25 per share and 206.1 million shares outstanding.
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