Currently viewing Global edition

Roxgold achieves records, tips strong H2

A rising gold price, reduced operating costs and its Yaramoko operations in Burkina Faso “not materially” impacted by COVID-19 helped Roxgold report record cash flow and operating margins for the June quarter.
Roxgold achieves records, tips strong H2 Roxgold achieves records, tips strong H2 Roxgold achieves records, tips strong H2 Roxgold achieves records, tips strong H2 Roxgold achieves records, tips strong H2

Underground at Roxgold’s Yaramoko operations in Burkina Faso

Staff reporter

"Our operations, while challenged by the pandemic, were able to continue uninterrupted, ensuring a continued 1,400tpd throughput rate and low cash operating costs of US$151/tonne which translated to record operating margins of $1,016/oz," president and CEO John Dorward said.

Cash flow from mining operations totalled $33.3 million and adjusted net income was $11 million, compared with $0.7 million a year earlier.

Roxgold had produced 32,812oz at an average grade of 8.2g/t, with Dorward saying it was "well on the way" to hitting the upper-end of 2020 production guidance of 120,000-130,000oz.

"With a solid balance sheet, strong momentum on production and gold prices reaching record highs, we are well positioned to deliver very strong results in H2 2020," he said.

Roxgold is aiming to become a multi-asset gold producer in Africa.

A feasibility study is due early next year for its Séguéla project in Cote d'Ivoire, which Dorward said had "the potential to double our production within a short timeframe without dilution to our shareholders".

It had acquired the project in a $30 million deal with Australia's Newcrest Mining in April 2019.

"Finally, as we reported last month, recent exploration success at Boussoura is building confidence that the project has the potential to become Roxgold's third advanced asset," Dorward said.

Drilling from Boussoura's untested Fofora vein had returned highlights including 61m at 2.5g/t gold from 28m.

Roxgold said growth spend had been maintained at $15-$20 million as the accelerated drilling programmes at Séguéla and Boussoura followed recent exploration successes at those projects.

AISC was $983/oz sold, compared with $836/oz in the March quarter, and Roxgold said it was expected to be relatively higher compared with prior years due to increased projected capital spend as the Bagassi South decline development was completed in 2020, along with enhanced security infrastructure investment.

It ended the period with about $45 million in cash on hand.

Its shares (TSX: ROXG) hit a one-year high of C$1.78 last week as the gold price rose above $2,000/oz for the first time, well above the company's March low of 57c.

It fell 9.4% yesterday as the gold price sank about $100/oz, closing at $1.44 to value it about $536 million (US$402 million).