Focus Minerals Ltd (ASX: FML) is now one of Australia’s leading gold producers following its successful off-market takeover of Crescent Gold.
Focus produced 35,647oz of gold for the September Quarter, inclusive of an attributable 13,739oz from its Laverton operations and a record 21,908oz from its Coolgardie operations where it is ramping up two new mines.
Record Production at Coolgardie
Focus achieved sales revenue from its Coolgardie operations of $34.2 million from gold sales of 21,582oz at an average price of $1,583/oz.
The Coolgardie operations mined a record 249,481t @ 3.03g/t for gold in ore of 24,319oz, a 41% increase on the preceding 12 months’ Quarterly average.
Cash operating costs were $944/oz. Capital investment and exploration expenditure for the Quarter totalled $11.74 million, comprising $8.25 million of mine capital development and $3.49 million of exploration expenditure.
Laverton Met Market Guidance
Production at the Crescent Gold Laverton Operations met market guidance for the September Quarter producing a total of 21,915oz of gold with 13,739oz attributable to Focus.
Crescent achieved an average gold sale price of A$1,660/oz to deliver Net Revenue of $36.6m.
A total of 504,288t @ 1.5g/t was processed over the 39 day campaign under the Ore Purchasing Agreement at Barrick Granny Smith (BGS). This saw a record daily gold production of 559oz, equivalent to 112,000ozpa based on 200 processing days per calendar year.
With the successful completion of the Crescent takeover, and the continual ramp-up of operations at both Coolgardie and Laverton, Focus is targeting production of +200,000oz of gold in calendar 2012 from four mines, making Focus one of Australia’s leading gold producers.
“The September Quarter was clearly transformational for Focus Minerals,” said Focus Chief Executive Campbell Baird. “We have significantly increased the scale of the business and have set the stage for strong production growth in 2012.
“We have delivered our first full Quarter’s production from our two new mines at Coolgardie and have now increased our 2012 production targets significantly through the successful acquisition of Crescent Gold.
“The Crescent acquisition represents significant value for shareholders. It’s been achieved for just $59m in scrip and the diversion of $11m in funds as loans to Crescent to support it through a period of critical production turnaround.
“The results are already there for all to see with the Crescent operations meeting market guidance for the Quarter and, importantly, development across the Laverton operations continuing apace.
“The acquisition was considered by the Board to be a company making event which would build long-term value for shareholders by significantly increasing Focus’ projected annualised production to +200,000oz, doubling Mineralised Resources and tripling Ore Reserves.
“The decision was therefore taken to divert some capital development funds from our newly opened mines at Coolgardie into securing the Crescent acquisition. This has meant that whilst production at Coolgardie was at record levels, the ramp up of the new mines in this Quarter was not accelerated at full pace. We therefore expect the Coolgardie operations to produce around 85,000oz in this calendar year and move to a production run rate of 100,000oz in the December Quarter.”
At the end of the Quarter, Focus had cash and bullion equivalents of $13.9m after extending loans of $11m to Crescent operations and $3m in takeover costs.
Focus’ attributable share of Crescent’s available cash at the end of the period was $1.6m which is net of Focus’ share of cash backed bonds of $7.4m.
Focus was included in the S&P/ASX 300 Index during the Quarter.