PERTH (miningweekly.com) – Gold miner Gascoyne Resources has reported a slight decline in production for the three months to September, as wet weather impacted operations.

Gold production in the September quarter reached 13 905 oz, down from the 16 298 oz produced in the June quarter, with gold sales declining from 16 882 oz to 13 950 oz in the same period, while average realised prices declined from A$2 620/oz to A$2 548/oz.

C1 costs for the quarter were up from the A$2 054/oz in the June quarter to A$2 653/oz, while all-in sustaining costs increased from A$2 396/oz to A$3 135/oz in the same period.

“As first guided in late August, the September quarter has been challenging from an operating perspective given the combination of abnormal rainfall levels and ongoing labour and skills shortages,” said MD and CEO Simon Lawson.

“The unacceptably high unit costs were a direct consequence of the lower ounce production levels, combined with further increases in input costs,” he added.

“Our strategy to transform Dalgaranga to an operation mining and processing much higher-grade ore feed is fundamental and critical to improving unit costs. Initial openpit mining of Gilbey’s North – Never Never over the next 12 months is one of the first key steps in this transformation.

“It’s also important to emphasise that the reduction in cash during the quarter was only partly attributable to operations. It also reflected the significant investment we are making in the future with A$3.7-million invested in exploration and evaluation, principally at the Gilbey’s North – Never Never discoveries.

“Investment in the future was a key theme of the quarter, and the stunning success we have enjoyed with near-mine exploration provides us with some insights into the potential of this asset if we can successfully transition to a long-term mine plan underpinned by higher-grade ore feed,” said Lawson.

“That plan is rapidly taking shape with the drilling success we have been enjoying at Gilbey’s North – Never Never and Gilbey’s East, and we are on track to publish an updated mine plan for the next 12 months in the December / January period.”

Looking ahead at the first half of the 2023 financial year, Gascoyne has set a production target of between 25 000 oz and 30 000 oz, but warned that costs in the December quarter would be adversely impacted by the lower rate of production until ore feed from Gilbey’s North – Never Never formed part of the processing feed blend.

Gilbey’s North – Never Never is currently expected to make meaningful contributions to ore feed from January 2023. As a result, the company expects all-in sustaining costs and all-in costs for the first half of the 2023 financial year to approximate the all-in sustaining cost and all-in costs achieved in the September quarter.