Southern Gold lifts profits outcomes at Cannon gold mine
THE DRILL SERGEANT: Southern Gold (ASX: SAU) announced an improved net profit outcome for the company’s Cannon gold mine, an open pit operation located 30 kilometres east of Kalgoorlie in Western Australia.
The Cannon mine is being operated by Metals X (ASX: MLX) in a 50/50 profit share arrangement with Southern Gold.
Southern Gold informed the market of the completion of a major cutback at the pit, from which the major ore zone in the lower half of the pit is now being mined.
As a result, Cannon Mine ore processing has now recommenced at South Kalgoorlie Operation’s Jubilee Mill (SKO) with the mine now entering into the final phase where the majority of the in-pit gold will be recovered over the next seven months.
Southern Gold explained that recent operational performance, in particular the higher than budgeted metallurgical recovery rates achieved at SKO, and a revision of Cannon’s ore block model based on recent grade control drilling, has resulted in an improved overall gold recovered estimate, lower operational costs on a per ounce basis and higher net cash generation.
“We are very pleased with progress at the Cannon Gold Mine, with minimal schedule slippage, even with the high level of rainfall which has caused some disruption, and with good work being done by the Metals X team in pit and at the Jubilee Mill,” Southern Gold managing director Simon Mitchell said in the company’s announcement to the Australian Securities Exchange.
“Broadly speaking Southern Gold appears to be well on track to previous guidance, potentially exceeding it and with the tail wind of the higher gold price cash flow to Southern Gold should well and truly exceed previous forecasts.
“It is particularly pleasing to see the total cost base drop below $1,000 per ounce.
“Given the brownfield and greenfield asset base outside Cannon, Southern Gold will continue to emerge over the next 12 months as a solid ASX-listed gold play with significant cash backing, a strategic land position in an iconic Australian gold region and potential for additional mine projects both at Kalgoorlie and our new push into a unique and significant portfolio of vastly underexplored or developed high grade gold projects in South Korea.”
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Website: www.southerngold.com.au