Gold: Administrators + high prices = stellar job of turning Dalgaranga around
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If there was ever ‘good’ time for a gold miner to go into administration, this is it.
Gascoyne, which only poured first gold from Dalgaranga in mid-2018, struggled with lower-than-expected grades before going into administration in June this year.
Gold prices were pushing through about $US1300/oz (or $1900/oz Australian) when Gascoyne Resources (ASX:GCY) raised the white flag.
And everyone thought $1900/oz was pretty great until it kept going, which allowed Gascoyne (‘administrators appointed’) to eke out an actual profit from the cursed Dalgaranga operation that same month.
It also produced 6000oz for the first time – a feat administrators FTI Consulting have managed to repeat in July.
FTI says they received a record average spot gold price of $2023/oz in July for the 5127oz gold sold.
The operation is also improving in other areas as the administrators progress towards a sale or recapitalisation process in September.
In July, 241,000t of ore was processed at an average grade of 0.85 g/t, with metallurgical recoveries of 90.9 per cent, “highlighting the continued improvements seen in June and July compared with April and May”, FTI says.
And they pulled this off despite ~13 per cent of July’s plant feed coming from low grade stocks “as a result of wet floors in the pit” earlier in the month.
Gravity gold recovery increased to 11.4 per cent in July, up from a historically low average of 3-4 per cent over the project life to date.
Gascoyne’s fall was supposed to be a lesson – sub-par projects cannot use high prices as insurance against failure.
Instead, we’ve learnt that timing is everything (and FTI are actually pretty good miners).
Former cobalt play Meteoric Resources (ASX:MEI) confirms there is actual gold at its newly acquired Juruena project in Brazil, sending the stock up 14 per cent in morning trade.
The maiden drill hole, designed to confirm high grades around some historic drilling at the Dona Maria prospect, returned some speccy looking visible gold from about 112m downhole:
Meteoric has now completed two holes which are being logged and sampled before being dispatched for assay.
Results should be available in about four weeks, Meteoric says.
No free gold was observed in the second hole, and drilling of holes 3 and 4 are ongoing.