Scorpio Gold on track to meet guidance despite challenges
JOHANNESBURG (miningweekly.com) – After three strong quarters of production at TSX-listed Scorpio Gold’s Mineral Ridge project, in Nevada, the company remains on track to meet its full-year production guidance of 38 000 oz to 40 000 oz, but the company is facing some challenges.
In the three months ended September 30, the mine produced 9 494 oz of gold, down from the 11 228 oz produced in the third quarter of the prior year.
Revenue also declined from $14.8-million in the third quarter of 2014 to $9.3-million in the quarter under review, owing to the total cash cost of gold sold decreasing to $732/oz from the $859/oz recorded in the third quarter of last year.
“In the face of the ongoing decline in gold prices, we continue to deliver positive adjusted financial results while decreasing our total cost per ounce produced,” CEO Peter Hawley commented.
The company expected a strong fourth quarter, which would take it into the upper range of its guidance for ounces produced and the lower end of guidance for total cash cost per ounce produced.
Meanwhile, Scorpio reported adjusted net earnings of $1.1-million for the quarter, compared with $500 000 in the prior comparable period, while also reporting adjusted earnings before interest, taxes, depreciation and amortisation of $3.2-million, compared with $3.6-million in 2014.
In August, Scorpio also closed a $6-million principal amount debt financing mainly used to fund the exploration and development of Mineral Ridge’s property and for general working capital purposes. The debt bore interest at a rate of 10% a year, paid quarterly in arrears, had a three-year term and was secured against Scorpio’s assets.
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