LONDON (Alliance News) - Highland Gold Mining Ltd on Monday said it is on track to deliver on its full-year guidance despite reporting a year-on-year fall in production in the first quarter of 2016.
The Russian gold miner said production from its three producing mines, Mnogovershinnoye, Novoshirokinskoye, and Belaya Gora, totalled 56,889 ounces in the first three months of the year, compared to the 57,421 ounces produced a year earlier, representing a 0.9% decline.
Highland reaffirmed its production guidance for the full year of 255,000 to 265,000 ounces of gold, which can be compared to the 262,495 ounces produced last year, meaning production is expected to either fall by up to 2.9% or rise by up to 1.0%.
With the 262,495 ounces in 2015, Highland fell just short of its production guidance of 270,000 to 285,000 ounces of gold for that year.
Based on the results of the first quarter, Highland Gold is on track to produce 227,556 ounces of gold, suggesting the company is expecting production to accelerate as the year goes on. Notably, the production in the first three months from Mnogovershinnoye and Novoshirokinskoye came in higher than expected after both mines beat internal production targets, the company said.
Belaya Gora processed 32% more ore during the quarter than a year ago, but grades were slightly below expectations and led to a nominal rise in production.
Highland said its average gold price in the first quarter of 2016 was USD1,174 per ounce. That can be compared to the average price over the whole of 2015 of USD1,154 per ounce and the spot gold price which stood at USD1,250 per ounce on Monday.
Looking at the first quarter results in more detail, the Mnogovershinnoye mine reported a 17% year-on-year fall in production during the first quarter of the year after the company processed less ore at a slightly higher grade and with a slightly improved recovery rate.
The Novoshirokinskoye mine produced 13% more gold year-on-year as it processed more ore at a slightly lower grade but at a better recovery rate.
Belaya Gora produced 0.02% more gold in the quarter compared to a year ago as grades declined by 25% and the recovery rate fell.
Highland said it has continued to progress the pre-feasibility study work on its Kekura development project after publishing the mineral resource for the project after the first quarter ended. Scoping studies on the Baley cluster projects, which is comprised of Taseevskoye, Sredny Golgotay and ZIF-1 tailings, and the studies for Unkurtash have also been initiated.
Highland Gold shares were trading flat on Monday morning at 94.0 pence per share.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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