Beadell Resources starts mining at higher and low cost Duckhead gold deposit in Brazil
Beadell Resources has started mining at the high grade Duckhead gold deposit at its Tucano gold mine in Brazil after a two month delay.
The company has adjusted its forward hedging schedule so that about 60% of its forecast gold production in the 2014 calendar year of over 200,000 ounces will be sold into its USD 1,600 per ounce hedgebook.
Duckhead has low operating costs with estimated C1 cash costs excluding the 2% royalty of between USD 435 and USD 485 per ounce, placing it within the lowest quartile of cash costs.
Iron ore credits are expected to accrue an additional saving of USD 30 to USD 50 per ounce depending on production and iron ore price payment of the stockpiled products commences over the coming months. About 70% of the high grade ore from Duckhead will be processed between August and December this year through the Company’s Tucano gold plant.
Gold production is expected to within a range of 120,000 ounces to 130,000 ounces for the six months from 1 July 2013.
The Duckhead starter pit has a Reserve of 400,000 tonnes at 7.6 grams per tonne gold for 98,000 ounces of gold. This does not include recent ultra high grade infill results of 41 meters at 54.9 gram per tonne gold from surface.
Duckhead has a global Resource of 678,000 tonnes at 7.5 gram per tonne gold for 164,000 ounces of contained gold. Beadell’s Tucano mine has a 5.1 million ounce Resource with a 1.9Moz open pit Reserve for 12 year mine life. Its forecast production of 200,000 ounces in the current calendar year makes it the third largest gold mine in Brazil by production.
Beadell has also restructured its debt repayment schedule for its project finance facility to reduce the September 2013 quarter repayment from USD 31 million down to USD 7 million. The December 2013 quarter repayment remains unchanged at USD 32 million. The remaining USD 62 million is scheduled for repayment in 2014.
Source - Proactive Investors