Trans-Siberian Gold plc (TSG.LN) provides the following trading update.
- Upper end of FY18 gold production expected to be exceeded
- Improved gold grades in Q4 (Q3 2018: average gold grade of 7.8 g/t)
- Electricity supply contract expected to substantially reduce power costs in 2019
- Continuing construction of underground water pumping facilities
Operational performance at the Asacha Gold Mine has continued to improve in H2 2018 and as a result of improving gold grades in Q4 2018, the Company expects to slightly exceed the upper end of the full year total gold production guidance of 36,000 – 40,000 oz for 2018. As previously indicated, a production update for Q4 2018 will be provided in January 2019.
The Company also reports that it has entered into a new electricity supply agreement with Kamchatskenergo which will supply power to the Asacha Gold Mine at a reduced price of RUR 4.69/kWh (US$0.07/kWh) following the implementation of incentive measures to support the development of the Far East of Russia introduced by the government. The agreement is for an initial period of 12 months. Kamchatskenergo is a subsidiary of RAO Energy Systems of the East Group which is part of the RusHydro Group (MICEX:MOEX, LSE: HYDR).
Construction of the underground de-watering pumping facilities continues albeit slightly behind the original planning timetable. Completion of the permanent facilities is expected to be achieved by May 2019.
Alexander Dorogov, CEO of TSG, commented: “We are pleased to announce these developments. We are making continuous improvements at the Asacha Gold Mine which are delivering real results. Power is a significant production cost and we are pleased to have secured a substantial cost saving with the support of the regional Government of Kamchatka. We are grateful for this which affirms the Far East of Russia as an attractive place for gold mining’.