The company, which wants to build a 150,000ozpa production base off Pan, Gold Rock and possibly another asset, said gold production of 11,685oz at AISC of US$985/oz in the June quarter (its Q3) produced US$15.16 million of Q3 revenues, mine operating income of $3.08 million and $2.44 million cash flow from operations. The company quoted a total "Fiore consolidated AISC" of $1,120/oz for the June quarter, compared with $1,087/oz in its Q3, 2018.
Fiore said its cash balance improved by $1.42 million since the end of March, to $9.71 million at the end of June, notable, it said, given the need for increased waste stripping at Pan this year, as well as part-funding of a new primary crusher, and ongoing exploration spend to boost resources. It had "net working capital" of $22.31 million at the end of June 30.
The company mined about 2.2 million tons of waste in Q3 2019 versus 1.92Mt in the same period last year, and 3.48Mt total material mined (3.21Mt in Q3 2018), as the strip ratio increased to 1.7:1 in the latest quarter compared with 1.5:1 a year earlier. The increased waste stripping is compounded by longer hauls as Pan pits get deeper.
"We expect to partially offset this by shorter hauls to the crusher stockpiles moving forward," the company said.
"The updated life of mine plan has a strip ratio of 1.6:1, with stripping expected to be above that level until mid-calendar 2020, then dropping below thereafter."
First ore went into the new Pan primary crushing circuit at the end of June. Fiore said its metallurgical testing showed primary crushing would increase overall gold recovery and the rate of recovery. "At the present ore mining rate of 14,000 tons per day, the crushing circuit will produce an estimated 6,000-7,000 additional gold ounces per year," it said. "We are transitioning to 100% crushed ore placement during Q4 2019 and also anticipate efficiencies in the mining operations as ore hauls will deliver to a stockpile as opposed to the leach pad."
Pan has proven and probable reserves of 18.5Mt grading 0.51g/t for 275,600oz and Fiore will start new drilling aimed at expanding the reserve base late this quarter or early in the next.
"The Pan mine continues to deliver strong gold production, and more importantly, strong cash flow," Fiore CEO Tim Warman said.
"It has always been our goal to have cash flow from Pan support our growth initiatives. To that end, we have internally funded a portion of the recently installed crusher and are currently investing in drilling at Gold Rock in support of a PEA at the end of calendar 2019.
"We then expect to turn the drills back to Pan with the aim of further extending mine life. We believe that our ongoing success from an operating and development standpoint, coupled with our strong balance sheet, put us in a good position to succeed with our ultimate goal of having Pan and Gold Rock operate in unison, creating a multi-asset US gold producer."
Gold Rock, 8km southeast of Pan, has its US Bureau of Land Management Record of Decision needed to start construction. "Based on its experience operating Pan the company intends to proceed directly from the PEA to a feasibility study to shorten the development timeframe," Fiore said.
