SOG meets budget

GOLD production for Sons of Gwalia Ltd has only just exceeded budgetary targets in spite of Red October recently coming on stream.

SOG chairman Peter Lalor said, for the three months ending December 1999, the company produced 98,720 ounces of gold at a cash cost of $340/oz.

“This marginally exceeded budgetary targets due to higher than expected residual production from the Cornish-man joint venture,” he said.

Tantalum concentrate production of 285,702lbs for the quarter represents an increase of 40 per cent over the September quarter and an annualised production rate exceeding 1.1 million lbs per annum.

“Tantalum production is expected to continue to increase further over the next two quarters as production from the newly commissioned plant at the Wodgina mine continues to increase and the grade from the Greenbushes mine improves,” Mr Lalor said.

First ore was mined from Red October late in December 1999 and the project remains on schedule.

The Marvel Loch mine continues to benefit from increased ore flexibility and posted another good quarter.

The Yilgarn Star mine produced gold at lower than average grades due to the timing of access to higher grade stopes, but the grade should improve in the second half. Encouraging drilling results were achieved from deep drilling at Yilgarn Star.

During the quarter, SOG entered into a number of joint ventures in the gold division – all within trucking distance of existing milling facilities. These include Equinox Resources NL’s Westonia project, Dalrymple Resources NL’s Melita operation and Triton Resources Ltd’s Raeside project.

The fillip for SOG is its strong gold hedging position, with about 3.8 million ounces of future gold production covered by various contracts at an average forward price of $625/oz.

The gold hedge book is worth some $60 million.

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