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Guyana Goldfields inc. has announced first quarter 2019 financial results and reports mine plan optimisation

Published by , Digital Editorial Assistant
Global Mining Review,

Guyana Goldfields Inc. has announced its financial and operating results for the first quarter ended 31 March 2019, as well as results from its optimised life of mine plan ‘Optimised LOM Plan’.

Scott A. Caldwell, president and CEO stated, "First quarter gold production was in-line with our annual guidance for the year. Since the release of the updated Mineral Resource and Mineral Reserve estimates, and life of mine plan in March, management now has an improved forecasting tool for production and cost forecasting. In addition to this, the company has identified and is beginning to execute on various cost reduction initiatives which are expected to further improve upon these advancements. Further details of these developments are provided within the Management Optimisation Plan. Furthermore, the company is now debt free and positioned for growth allowing for greater flexibility in exploring new financing alternatives and controlling its capital programme."

First quarter 2019 operational results summary

  • In the first quarter of 2019, the company improved mining and milling volumes compared with the prior year. This improvement allowed the company to partially offset the negative impact of a higher strip ratio and a lower head grade compared to the first quarter of 2018.
  • Gold recovery averaged 90.5% for the quarter, compared with 91.7% a year earlier. The company completed the mill expansion which is anticipated to enhance capacity and redundancy of the primary crushing circuit and expected to further lower per unit costs.

First quarter 2019 selected financial statistics

  • A total of 38 200 oz of gold were sold with an average realised gold price of US$1301/oz, resulting in revenues of US$49.7 million.
  • The increase in costs on a per ounce basis from the comparable and prior quarter were largely attributable to lower grades, higher strip ratio and higher production costs.
  • Finished the first quarter with a cash balance of approximately US$73 million and total debt balance of US$35 million.

On 30 April 2019, the company elected to retire the US$35 million principal balance of its long-term debt. Under the original terms of the facility, US$5 million quarterly principal repayments were required until extinguishment of the facility on 31 December 2020. No prepayment penalty applies to early retirement of the loan. Interest accrued to the date of prepayment will be paid. The early retirement election was taken to provide immediate reduction in interest and administration costs, forecasted to be approximately US$3 million over the remaining term of the loan, as well as, release of US$3 million of restricted cash and allow greater flexibility in exploring new financing alternatives. Following the payment, the company's unaudited cash balance is expected to be US$36 million.

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