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Canadian Zinc Corporation, a significant shareholder in the London-listed Vatukoula Gold Mines plc(VGM) which operates gold mines in Vatukoula, says it is confident it will achieve its target to produce 110,000 ounces of gold by 2011.
This comes as the Toronto-listed Canadian Zinc announced an increase in gold production for its third quarter ended May 31, 2009.
“VGM reported that underground mine production at its Vatukoula Gold Mine in Fiji increased to 54,618 tonnes for the quarter ended May 31, 2009, compared to 47,113 tonnes in the previous quarter.
“As a result of the increase in underground mine production and higher mining grades, gold production for the quarter increased by approximately 17 percent to 8,711 ounces from 7,470 ounces in the previous quarter,” Canadian Zinc said, adding that this has reduced its cash cost per ounce to US$680 per ounce, a significant drop from the US$915 per ounce in the second quarter.
“Subject to the ongoing refurbishment program and delivery of mobile equipment arriving on schedule, VGM believes that it will be able to achieve a pro-rata production rate of 110,000 ounces of gold during the first half of 2010.
“VGM believes that this rate of production should lower the Mine's cash costs per ounce (assuming an oil price of US$70/barrel) to between US$520/ounce and US$580/ounce,” Canadian Zinc reported.
Underground mining in Vatukoula – which is the main mining activity – is said to be adversely affected by the availability of underground haulage equipment which has limited the amount of ore the mine is able to transport to the shaft ore-pass complex.
Following completion of its recent financing activities, in which Canadian Zinc participated leading to its 20 percent stakes, VGM began sourcing and ordering refurbished underground mobile equipment required to achieve targeted production levels.
“VGM has upgraded its underground pumping capacity with additional pumps and continues with the scheduled refurbishment program of the diesel power generators.
“The Vatukoula Treatment Plant continues to operate satisfactorily, with current gold recoveries at 90percent, which is consistent with historic gold recoveries at Vatukoula. The ore milled has increased as a result of the higher feed from the mining operations.”
