Mupane Mine Production Up On 2006

WANETSHA MOSINYI
Correspondent | Monday November 19, 2007 00:00

Released last week, the results show that gold production from Mupane in the third quarter of 2007 totalled 22,000 ounces.

However, there was a 9 percent decline compared to the second quarter of 2007. The increase in production from the same period in 2006 was mainly due to higher mill head grades and more tonnes mined while the decline in production from the second quarter of 2007 is attributed to lower head grades. 

The increased production at Mupane, which is about 30 kilometres from Francistown, yielded as $15.7 million of revenue in the third quarter.

In the third quarter of 2007, 1.6 million tonnes were mined, which was 18 percent lower than the third quarter of 2006, due to poorer equipment availability and the demobilisation of one excavator and four haulage trucks.

The mine said the reduction in the mining fleet was possible as waste stripping requirements in the Tau pit are reducing.

Direct cash costs of Mupane stood at $12.4 million in the third quarter of 2007, compared to $11.7 million in the second quarter of 2007 and $9.3 million in the third quarter of 2006 due to an increase in mining unit costs. 

This increase is the result of higher fuel, tyre and maintenance costs as well as haulage distances.

Gold Institute (GI) cash costs of $591 per ounce for the third quarter of 2007 were 14 percent higher than the third quarter of 2006 at $519 per ounce, resulting from the unfavourable conditions mentioned above.

The GI cash cost per ounce was $572 during the first nine months of 2007. Capital expenditures, for the first nine months of 2007 were $0.9 million to purchase a new oxygen plant and raise the tailings dam.

During the second quarter of 2007, management updated the long-term mine plan, which resulted in an impairment charge to the Mupane operations of $93.7 million. The $93.7 million charge consisted of a reduction of goodwill of $32.8 million, a reduction of $8.0 million to other long-term assets (stockpiles).

There was also a reduction of $52.9 million in the carrying value of the Mupane mine, as reflected in the decline in the respective balances when compared to balances at December 31, 2006.