Saracen expecting $75m-$85m in write-downs

Saracen Mineral Holdings has joined the long list of gold miners taking significant financial knocks, announcing today it expects to take a one-off hit of between $75 million and $80 million due to the reduction in value of its mining and development assets, stockpiles and exploration tenements.

Saracen said today it had completed an impairment review which took into consideration the significant fall in the value of gold since its last review in December.

The review used a $1,300 spot gold price assumption, while the write-downs are non-cash and will not impact Saracen’s cash position or operations, the company said.

In positive news for Saracen, production guidance has been increased to between 120,000 and 130,000 ounces, up 10,000 ounces from previous estimates.

Cash costs are predicted to fall to $900/oz in FY2014, and further to $750/oz by FY2015.

All-in sustaining cash costs are expected to be $1,500/oz in FY2014, then reduce to $950/oz in FY2015, Saracen said.

At close of trade today, Saracen Mineral Holdings shares were up 3.5 per cent, at 15 cents.