18th Apr 2016 09:14
LONDON (Alliance News) - Stratex International PLC said Monday production at its Altintepe gold mine in Turkey ramped up at the start of 2016, with the site on target to deliver the minimum expected annual production for the year.
The gold explorer focused on Turkey and Africa said the operating company for the mine Altintepe Madencilik has generated total revenue of USD14.3 million to date, with 12,280 ounces of gold sold up to March 16, after having completed its first gold pour in November.
Total operating costs of the mine currently stand at around USD560 per ounce, with the contract-mining cost fixed at USD450 per ounce until June 30.
Stratex said heavy precipitation during the first quarter of the year resulted in a significant drop in the production capacity for the pre-treatment of the ore, but said trials are now underway with a clay treatment circuit to ensure that this problem is minimised in the future.
Stratex said the site is on target to deliver the minimum expected annual production of 30,000 ounces of gold during 2016.
Stratex said its partner Bahar Madencilik is undertaking the contract mining, and, as per the terms of the joint venture agreement, is entitled to recover its pre-production costs from 80% of the net free cash flow. These costs include USD39.0 million in construction costs.
Stratex said this meant net proceeds from the mine will be distributed 55% to Bahar, 45% to Stratex.
Altintepe Madencilik also approved the reimbursement of some additional costs incurred before the production decision, resulting in a repayment of USD4.2 million to Bahar and USD190,000 to Stratex.
"Our partner Bahar Madencilik has managed the initial ramp-up very successfully and we are now working closely with them to optimise the mine development schedule for the next few years. This will allow us to critically evaluate the requirements for working and development capital," said Stratex Chief Executive Bob Foster.
Shares in Stratex were up 27% at 2.10 pence on Monday morning.
By Hannah Boland; [email protected]; @Hannaheboland
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