Highland Gold meets first quarter production forecasts

Highland Gold Mining reported its operating results for the three months ended 31 March on Wednesday, saying its four operating mines produced a total of 63,482 ounces of gold and gold equivalent in the first quarter, in line with its production forecasts, and down from 71,961 ounces year-on-year.

The AIM-traded firm said production and sales were unaffected by the Covid-19 coronavirus pandemic, as mine shifts were extended until 1 June and travel was restricted in order to protect its remote operations and nearby communities.

It said the average realised gold price for the quarter was $1,593 per ounce.

At Kekura, the company said that the pilot processing plant conducted its first gold pour in March, while preparations for summer construction continued with equipment, materials and supplies shipped to site over winter roads, and construction crews already on location.

Production at Mnogovershinnoye exceeded targets for the quarter, as open-pit mining was reduced and stripping ramped up to prepare to access new high-grade ore zones in the third and fourth quarters.

Scheduled maintenance at the Belaya Gora processing plant, initially planned for April and May, was brought forward to March, the board noted.

It also said that Novoshirokinskoye gold equivalent production was 5% higher than forecasts, despite expected lower grades, while Valunisty saw Increased mining and processing volumes, but lower grades, during the quarter.

“To lock in lower interest rates, the company drew down $60m in long-term debt from open credit lines in March at an average interest rate of 3.36%, bringing gross debt to $326m and net debt to $254m as of 31 March,” the board said in its statement.

“The net debt-to-EBITDA ratio remains comfortable at 1.2x, and additional open credit lines worth $340m are available.”

Highland noted that Michael Monaghan joined the company in March as its chief operating officer, bringing with him more than four decades of experience in the industry.

“The company affirms its guidance for total production of [between] 290,000 and 300,000 ounces of gold and gold equivalent in 2020.”

At 1203 BST, shares in Highland Gold Mining were up 4.59% at 228p.