Nunavut gold miner scales back production forecast
TMAC Resources Inc. says challenging underground conditions led to lower gold output
TMAC Resources Inc. won’t meet its production target for 2019, following disappointing third-quarter results from its Doris gold mine in Nunavut’s Kitikmeot region.
“I am very disappointed to not be able to meet initial annual production guidance, but not so much so that we are going to deviate from the prominence of safety in the mine,” said Jason Neal, the company’s president and CEO, in a recent news release on Oct. 31, announcing the company’s third-quarter financial results.
The company now expects to produce between 140,000 and 150,000 ounces of gold this year, down from the previous target of 160,000 to 170,000 ounces.
This reduced output will mean TMAC will be making less money, since its overhead for operating the mine remains the same.
The all-in sustaining cost of producing gold at the mine is now expected to range from US$1,100 to US$1,175 per ounce sold, up from earlier estimates of US$950 to US$1,050 per ounce sold.
As recently as Oct. 15, when TMAC issued a news release about its operating results, it had maintained that it could hit its production targets for the year.
“At the time of that release we believed this was within our capability,” said Neal.
Those plans were thrown out of whack, however, by challenging underground conditions at part of the mine, where “we have had to undertake significant rehabilitation work after initial development to re-establish a safe working environment,” he said.
During its third quarter, TMAC produced 36,290 ounces and sold 37,580 ounces of gold.
It brought in gross revenues of $72.8 million. Its earnings before interest, tax, depreciation and amortization were $38 million. It turned a net profit of $8.4 million.