Saracen on track for gold target

Saracen Mineral Holdings says it is on track for its 2018 financial year production target after announcing solid gold production for the December quarter, while also signing a deal to sell its Wallbrook project near Kalgoorlie.

Perth-based Saracen has a full-year guidance of 300,000 ounces of gold from its Thunderbox and Carosue Dam operations in the Goldfields, with production at 157,795oz at the halfway point following 77,522oz in December.

The company is also aiming for all-in sustaining cash costs of $1,150/oz, and is currently operating at $1,091/oz for the half-year.

However, chief executive Raleigh Finlayson said no changes would be made to the company’s targets, primarily due to the impending closure of its highly successful A-zone open pit at Thunderbox.

Mr Finlayson said A-zone was expected to be completed early in the current quarter as C-zone production ramped up.

“We are well on track to hit our production target of 300,000oz for this financial year,” he said.

“This strong production rate, combined with our focused development plan, is underpinning robust margins and free cash flow.

“It is also enabling Saracen to continue investing in exploration, as demonstrated by our recent results on this front, and to continue growing our cash balance while remaining debt free.”

Meanwhile, Saracen has also announced it will sell its Wallbrook gold project to Nexus Minerals, and take a 6 per cent stake in the gold explorer.

Under the agreement, Saracen will buy 3.8 million Nexus shares at a price of 8.4 cents each and a one for two attaching option, while Nexus will provide a further 1.5 million shares in exchange for the Wallbrook project.

Nexus managing director Andy Tudor said the company was pleased to have Saracen on board as a shareholder.

“Saracen’s extensive experience and technical expertise in the region will be invaluable to Nexus in our exploration efforts to make the next big gold discovery in the district,” he said.

Shares in Saracen were down 4.4 per cent at $1.63 at the close.