Gascoyne Resources (ASX:GCY) will produce far less gold from its troubled 1.3 million ounce Dalgaranga gold operation in the first half of the year than originally predicted.

The miner, which poured first gold from Dalgaranga mid-2018, is struggling with lower-than-expected grades from the already low grade project.

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As a result, Gascoyne now expects to produce 29,000 to 34,000 ounces in the first half of the year; down from previously expected 40,000 to 45,000 ounces.

Costs will also shoot up, from $1320-$1420 per ounce to $1550-$1875 per ounce.

The current Australian gold price is about $1845 per ounce.

The Gascoyne share price over the past year.

But Gascoyne says the outlook isn’t catastrophic.

It reckons mined gold grades have already improved from about 0.6 grams per tonne in February to 1.09 grams per tonne in March.

And these are expected to further increase into the second half of 2019 as larger, higher grade ore lodes are “released” and mining of the lower grade  zone is completed, the company says.

Production and cost guidance for the second half of calendar year 2019 remains unchanged.

Gascoyne is enjoying some much-needed breathing room from project financiers as well, which includes reductions or deferred repayments for the rest of 2019.

A planned equity raise will also provide additional working capital as Dalgaranga production ramps up to planned levels, the company says.


In other gold news today:

Saturn Metals (ASX:STN) believes “an aggressive stance on drilling is required” to rapidly grow its 685,000oz Apollo Hill Gold Project, near Leonora in the Western Australian goldfields.The company is aiming to complete 10,000 metres of drilling over the next 6 to 9 months, with the results to be factored into the next resource upgrade.
There could be large gold system hidden beneath a Western Australian salt lake, Musgrave Minerals (ASX:MGV) says.Recent ‘scout’ drilling at Lake Austin North hit 5m at almost 15 grams per tonne gold, 135m from surface, the company says.This included a 1m 65.4 grams per tonne intercept (anything above 5 grams per tonne is usually considered high grade).And many of the drill holes terminated in mineralisation, highlighting basement targets for follow-up drill testing, Musgrave says.
Sipa Resources (ASX:SRI) has bought a gold project right near the new Moho Resources (ASX:MOH) discovery.Sipa was up 14.3 per cent in morning trade after announcing the acquisition of the Clara project in north west Queensland.In February, Moho boss Shane Sadleir said first pass drilling at Empress Springs supported the company’s view that “we may be sitting on top of a significant gold / base metals mineralised system, perhaps similar to the 1.2 million ounce historic Goldfield at Croydon”.
Rio Tinto (ASX:RIO) commits to Paterson Province joint venture with Antipa Minerals (ASX:AZY).An exploration budget of $3.4m has been allocated for exploration in 2019, Antipa says.Rio can fund up to $60 million of exploration expenditure to earn up to a 75 per cent interest in Antipa’s Citadel project, which is about 5km east of Rio Tinto’s recently announced Winu copper-gold-silver discovery.