Gold Digger: Only 5 of the toughest ASX gold miners have made gains over the past 12 months
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Our Gold Digger column wraps all the news driving ASX stocks with exposure to precious metals.
It’s a been a rough ride for gold producers over the past 12 month due to a combination of increasing operating costs and weak prices.
Not many have enjoyed share price returns. In fact, just five miners/ near-term miners are in the green over the past 12 months.
Most of them feature in Josh Chiat’s must-read article ‘Which ASX gold miners are getting the best bang for their buck?’, which profiles the lowest cost producers on the ASX.
English crooner Billy Ocean once said: ‘When the going gets tough, the tough get going’. Here are the ASX’s toughest goldies.
Construction at TIE’s 3.45Moz Abujar gold project in Côte D’Ivoire remains on schedule and budget, the company said last month.
First gold pour is pencilled in for the current quarter, with Abujar forecast to produce 260,000oz gold in 2023.
The company – which has no debt – says it will deliver an update on Abujar’s life of mine production plan later this month “targeting a material increase to existing LOM production” using an updated mineral resource estimate, increased mill throughput, and higher gold prices.
The spot price is ~17% higher than the $US1,407/oz used in the DFS, it says.
One of the lowest cost gold producers on the ASX, alongside PRU and EMR mentioned below.
Capricorn Metals was once a takeover target for Regis Resources (ASX:RRL), a respected mid-tier WA gold miner.
Now CMM, whose management team is headed by former Regis boss Mark Clark, is worth more than its one-time suitor.
Operationally, Capricorn had been hitting its straps, with its production of 31,005oz at AISC of $1166/oz projecting at the top of end of FY23 production guidance (115,000-125,000oz) and bottom end of cost guidance ($1160-1260/oz).
It comes after Karlawinda helped CMM deliver a maiden profit after tax of $89.5m in FY22, its first year of operations, with cashflow from the mine of $38.5m in the September quarter, up from $38.1m in the June quarter.
This consistent, can-do-no-wrong West African goldie announced record Q1 FY23 production in of 137,460oz; 12% more than in the June 2022 quarter.
Perseus is on track to achieve 240,000-265,000oz guidance for the December 2022 half year, it says.
Remarkably, costs actually reduced.
PRU’s average AISC dropped 12% to US$879 per ounce during the quarter — well below market guidance of $1,000 – $1,100 per ounce for the December 2022 half year.
PRU is also spreading its wings.
Already on track to produce at a 500,000ozpa rate from its Yaoure and Sissingue mines in Cote d’Ivoire and Edikan in Ghana, the gold miner bought out Canada’s Orca Gold earlier this year to add the Block 14 project to its portfolio, a frontier asset on Sudan’s northern border with Egypt.
Another low-cost gold miner in an unusual jurisdiction.
EMR owns the Okvau gold mine in Cambodia, where it is a first mover, with the $120 million mine opened in 2021 considered the first commercial gold mining operation in the Southeast Asian country.
So far it has been a winner, delivering over 100,000oz in its first full year of operation in FY22, including commissioning.
After official commercial production of 88,171oz at US$754/oz in 2022, the September quarter was a reasonably strong start, with 23,217oz produced despite a SAG mill gearbox failure and what the miner called a “99th percentile” wet season.
That saw costs finish slightly above its US$740-810/oz forecast at US$824/oz. Still very good.
The company, which also took majority control of WA gold explorer Bullseye Mining this year, has maintained FY23 forecasts of US$740-810/oz AISC and production of 25-30,000oz per quarter.
An outlier on this list is OBM, which has historically struggled to make a go of its troubled Davyhurst gold operation near Kalgoorlie.
Ongoing cost and performance issues prompting the company to initiate a strategic review and ‘reset’ of its operations earlier this year.
In early July, OBM secured the services of a new chief exec to improve its fortunes.
Luke Creagh is a veteran mining engineer who most recently served as chief operating officer at Australia’s #2 gold miner Northern Star Resources (ASX:NST).
Since then, the stock has gained 150%.
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Last month, the small explorer announced a high-grade gold discovery at the Hutch’s Find prospect, part of the West Tanami project in WA.
The highlight result from maiden drilling was 12m at 4.50 g/t Au from 6m, including 6 metres at 8.10 g/t Au from 8 metres.
That’s the trifecta: thick, shallow, and high grade.
Fresh drilling has kicked off almost immediately with a 2,500m program hunting for extension to this mineralisation.
Holes will also go into the nearby Camel prospect to test a 600m-long high-grade gold trend defined in previous diamond drilling and surface sampling programs.
The program will wrap up mid-November, with first assays anticipated early 2023.
This Mark Creasy backed explorer has been successful in its litigation against Vango Mining (ASX:VAN).
In 2017, a binding terms sheet (BTS) was signed allowing ZAG to earn up to a 50% interest in the tenement M52/183 that hosts mineralisation associated with the K2 gold deposit.
But legal action was pursued following the vendor’s (Vango Mining) refusal to accept the terms of the BTS agreement.
The judgement delivered in court on October 31 found that ZAG is entitled to an 4.1% stake in M52/183.
The court has ordered VAN to promptly transfer the 4.1% stake to Zuleika after finding Vango breached the terms of and wrongfully repudiated the BTS agreement.
The next stage of litigation will determine the quantum of damages payable to ZAG.
“Zuleika intends to program that aspect of its claim to trial as vigorously and quickly as possible,” it says.