South America region

PERU

Cerro Corona

Six months ended
      June
2016
  June
2015
 
Gold produced 000’oz   70.5   78.1  
Copper produced tonnes   14,693   14,566  
Total equivalent gold produced 000’eq oz   127.5   150.2  
Total equivalent gold sold 000’eq oz   120.1   147.2  
Yield      – gold g/t   0.65   0.87  
              – copper per cent   0.43   0.55  
              – combined g/t   1.12   1.45  
AISC and AIC US$/oz   489   423  
AISC and AIC * US$/eq oz   728   666  
Gold price** US$/oz   1,209   1,206  
Copper price** US$/t   4,699   5,955  
* Refer to All-in-costs for calculations.
** Average daily spot price for the period used to calculate total equivalent gold ounces produced.

Gold production decreased by 10 per cent from 78,100 ounces for the six months ended 30 June 2015 to 70,500 ounces for the six months ended 30 June 2016. Copper production increased marginally from 14,566 tonnes to 14,693 tonnes. Equivalent gold production decreased by 15 per cent from 150,200 ounces to 127,500 ounces. The decrease in equivalent gold production was due to the lower copper price ratio as well as lower gold head grades treated. The lower head grades were in line with the mine sequencing and the planned production schedule for the six months ended 30 June 2016. Gold head grade decreased from 1.08 grams per tonne to 0.96 grams per tonne and copper head grade decreased from 0.53 per cent to 0.50 per cent. Gold recoveries decreased from 71.6 per cent to 67.4 per cent mainly due to mineralisation characteristics of the ore mined which is expected to dissipate by the end of the September quarter 2016 once this section of the orebody is mined. Copper recoveries increased from 86.4 per cent to 86.7 per cent. As a result, gold yield decreased from 0.87 grams per tonne to 0.65 grams per tonne and copper yield decreased from 0.55 per cent to 0.43 per cent. The decreases in grade is in line with the plan.

For the six months ended 30 June 2016, concentrate with a payable content of 66,847 ounces of gold was sold at an average price of US$1,220 per ounce and 13,877 tonnes of copper was sold at an average price of US$4,021 per tonne, net of treatment and refining charges. This compared with 76,720 ounces of gold that was sold at an average price of US$1,192 per ounce and 14,174 tonnes of copper that was sold at an average price of US$5,190 per tonne, net of treatment and refining charges, for the six months ended 30 June 2015. Total equivalent gold sales decreased by 18 per cent from 147,200 ounces for the six months ended 30 June 2015 to 120,100 ounces for the six months ended 30 June 2016 mainly due to lower volumes produced.

Total tonnes mined increased by 24 per cent from 6.12 million tonnes for the six months ended 30 June 2015 to 7.56 million tonnes for the six months ended 30 June 2016 in line with the mine sequencing. The higher tonnes mined was due to lower intensity of the rainy season. Ore mined increased by 6 per cent from 3.36 million tonnes to 3.56 million tonnes. Waste tonnes mined increased by 45 per cent from 2.76 million tonnes to 4.00 million tonnes. The strip ratio increased from 0.82 to 1.13 due to higher waste mined for the six months ended 30 June 2016. Waste mined was higher for the six months ended June 2016 mainly due to the prioritisation of ore mined for the six months ended June 2015 due to the rainy season and the mining sequence.

Ore processed increased by 9 per cent from 3.23 million tonnes for the six months ended 30 June 2015 to 3.53 million tonnes for the six months ended 30 June 2016 mainly due to record plant throughput (835 tonnes per hour vs 791 tonnes per hour) after the completion of the plant optimisation project.

Net operating costs, including gold-in-process movements, decreased by 11 per cent from US$71 million for the six months ended 30 June 2015 to US$63 million for the six months ended 30 June 2016. The lower cost was mainly due to a US$6 million buildup of concentrate inventory for the six months ended 30 June 2016 compared with US$nil million for the six months ended 30 June 2015.

Operating profit was similar at US$85 million.

Capital expenditure decreased by 26 per cent from US$19 million to US$14 million. The six months ended 30 June 2015 included construction of the new fuel station and the new camp.

All-in sustaining costs and total all-in cost increased by 16 per cent from US$423 per ounce for the six months ended 30 June 2015 to US$489 per ounce for the six months ended 30 June 2016. This was mainly due to lower gold sold and lower by-product credits, partially offset by lower net operating costs and lower capital expenditure. All-in sustaining costs and total all-in costs per equivalent ounce increased by 9 per cent from US$666 per equivalent ounce to US$728 per equivalent ounce mainly due to the same reasons as above and lower equivalent ounces sold.