Despite the Thunder bay, Ontario-based miner reporting a net loss for the period, stronger gold production weighted towards the second half of the year and a strong balance sheet were enough to keep investors interested.
The company produced 16,007oz of gold during the three months ended June 30 - a 57.5% decrease year-over-year, while silver output fell 47% over the comparable period of 2017 to 51,746oz. Premier fingered decreased output from the 40%-held South Arturo mine, in Nevada, where Barrick Gold (TSX:ABX) owns the remaining 60% and is the operator, as mining of the Phase 2 pit was completed in 2017.
Changes in geologic interpretations at the Mercedes mine, in Mexico, meant stopes had to be redesigned in new mining zones, which resulted in a development intensive first half of the year, with increased costs per ounce. Mercedes production will be weighted toward the second half of 2018 after the new stope designs in the new Diluvio, Lupita and Rey de Oro deposits have been finalised.
As a result, consolidated co-product and all-in sustaining costs (AISC) were US$963 and $1,088/oz, per ounce of gold sold, respectively, compared with $481 and $607/oz in the comparable period of 2017. Co-product cash costs and AISC were $12 and $13/oz of silver sold, respectively, compared with $10 and $12 for each category a year earlier.
Premier's revenues slid 50.5% year-on-year to $27.5 million as production during the first six months faltered.
The net loss swung to $7.7 million, which incorporated $6.2 million investment in exploration initiatives.
At the end of the quarter, Premier carried a cash balance of $67.8 million after paying down its debt of $20 million. The company expects its cash position would fund the near-term development of three additional deposits within its project portfolio, including the construction of two new mining operations at the South Arturo JV, that are now underway.
"With strong consolidated production realised from Premier's mining operations during the first half of the year, we have fully paid down the company's debt and expect to meet or beat consolidated annual gold production guidance in 2018," said president and CEO Ewan Downie.
The company had in July revised upwards its full-year guidance to a range between 90,000 and 100,000oz of gold, and Mercedes is expected to produce up to 325,000oz of silver this year.