Saracen Mineral Holdings has flagged plans to push towards a production rate of 400,000 ounces per annum after booking record full-year production and increasing its output guidance for full-year 2019.
The gold miner revealed yesterday it had produced 316,453oz last financial year, beating guidance of 310,000oz to 315,000oz at all-in sustaining costs of $1139/oz, which was within guidance.
The company issued full-year guidance in a range of 325,000oz to 345,000oz at all in sustaining costs of $1050/oz to $1100/oz.
Cash and equivalents rose to $118.3 million at the end of the June quarter up from $101.5 million at the end of March, despite Saracen spending $22.8 million over the quarter on growth capital, exploration and growing ore stockpiles by 29 per cent.
Managing director Raleigh Finlayson said the company was targeting an average cash build of $15 million a quarter.
He said the company was focused on a long game with its assets, pushing towards annual production of 400,000oz as part of its seven-year plan announced in February.
Saracen will spend $113 million investing in its operations in the 2019 full year including $50 million on exploration, $20 million on its Whirling Dervish underground development and $13 million on the underground development of its Thunderbox mine and $23 million on a paste fill plant at Karari that will allow the company to unlock 200,000oz of sterilised reserves and increase ore extraction.
RBC Capital Markets’ mining analyst Paul Hissey said exploration was likely to be the continued driver of a re-rating for Saracen, with sufficient free cash to continue exploring below and along strike from its existing operations.
He said RBC remained upbeat on Saracen’s momentum, with resources and reserve updates out soon and additional drilling success over the next 12 months likely to support the case for production rates of 400,000ozpa.
Saracen shares closed off 1¢ at $2.05.