Trans-Siberian Gold PLC Q3 2019 Production Update (6223Q)

TIDMTSG

RNS Number : 6223Q

Trans-Siberian Gold PLC

22 October 2019

22 October 2019

Trans-Siberian Gold plc

("TSG" or the "Company")

Q3 and 9M Production & Operations Update

Trans-Siberian Gold plc (TSG.LN), a low cost, high grade gold producer in Russia, announces its production update at the Asacha Gold Mine for the three months ended 30 September 2019 ("Q3" or the "Period") and for the first nine months ("9M") of 2019.

Q3 Highlights

   --      32% QoQ increase in gold production to 12,620 oz (Q2 2019: 9,544oz) 
   --      Average gold grade increased by 6.3% YoY to 8.3 g/t (Q3 2018: 7.8 g/t) 
   --      28.2% increase YoY in gold revenues to approximately $14milion* (Q3 2018: $11milion) 
   --      Average realised gold price for the period rose by 23.6% YoY to $1,485 (Q3 2018: $1,201) 
   --      One minor lost-time injury during the period 

9M Highlights

   --      Revenue increased by 12.9% YoY to $44.3million* (9M 2018: $39.2milion) 
   --      Substantial increase of 18.8% in gold production YoY to 34,509 oz (9M 2018: 29,059) 
   --      Average gold grades 25.6% higher YoY at 8.5 g/t (9M 2018: 6.8 g/t) 

-- Estimated average realised gold price for the period 6.1% higher YoY at $1,364 (9M 2018: $1,286)

   --      On track to meet upper end of production guidance for the full year 

Alexander Dorogov, Chief Executive Officer of TSG, commented:

"I am pleased to announce our production results for Q3 and 9M 2019, that are underpinned by our continued operational improvement. We are particularly delighted to note that following a substantial increase in the average gold price last quarter, we have successfully maintained the high grade of 8.3g/t during this period. Our production to date of 34,509 oz places TSG firmly on track to meet the upper end of our annual output guidance of 40-44,000oz."

Production Summary

Mining and production data for Q3 and 9M 2019 at the Asacha Gold Mine is shown in the following tables:

Q3 2019

 
      Metric                      Q3       Q3      Y-on-Y      Q2      Q-on-Q 
------------------ 
                                 2019     2018    % Change    2019    % Change 
------------------  ---------  -------  -------  ---------  -------  --------- 
 Mine development      (m)      1,903    1,844      3.2%     1,864      2.1% 
 Ore extracted       (tonnes)   34,245   37,073    -7.6%     39,017    -12.2% 
------------------  ---------  -------  -------  ---------  -------  --------- 
 Ore processed       (tonnes)   48,996   49,948    -1.9%     37,058    32.2% 
 Grade, gold          (g/t)      8.3      7.8       6.3%      8.4      -1.2% 
 Grade, silver        (g/t)      18.4     24.3     -24.1%     26.4     -30.3% 
 Recovery, gold        (%)       95.2     95.1      0.2%      95.2      0.0% 
 Recovery, silver      (%)       80.7     78.1      3.3%      84.0     -3.9% 
 Gold in dore          (oz)     12,620   11,698     7.9%     9,544     32.2% 
 Silver in dore        (oz)     24,686   30,203    -18.3%    27,629    -10.7% 
------------------  ---------  -------  -------  ---------  -------  --------- 
 Gold refined          (oz)     11,291   10,814     4.4%     11,298    -0.1% 
 Silver refined        (oz)     21,866   26,853    -18.6%    32,683    -33.1% 
------------------  ---------  -------  -------  ---------  -------  --------- 
 Gold sold             (oz)     9,417    9,085      3.7%     10,113    -6.9% 
 Silver sold           (oz)     21,959   48,626    -54.8%    32,937    -33.3% 
 Gold price           ($/oz)    1,485    1,201     23.6%     1,313     13.1% 
 Silver price         ($/oz)     14.8     14.5      2.3%      14.7      0.5% 
 Gold Revenue*        ($,000)   13,985   10,911    28.2%     13,276     5.3% 
 Silver Revenue*      ($,000)    325      703      -53.8%     484      -33.0% 
 Total Revenue*       ($,000)   14,310   11,614    23.2%     13,761     4.0% 
------------------  ---------  -------  -------  ---------  -------  --------- 
 

9M 2019

 
      Metric                      9m        9m       Y-on-Y 
------------------ 
                                 2019      2018     % Change 
------------------  ---------  --------  --------  --------- 
 Mine development      (m)       5,787     4,646     24.6% 
 Ore extracted       (tonnes)   108,101   132,591    -18.5% 
------------------  ---------  --------  --------  --------- 
 Ore processed       (tonnes)   130,800   142,165    -8.0% 
 Grade, gold          (g/t)       8.5       6.8      25.6% 
 Grade, silver        (g/t)      23.8      20.9      14.3% 
 Recovery, gold        (%)       95.3      94.7       0.7% 
 Recovery, silver      (%)       81.7      76.9       6.2% 
 Gold in dore          (oz)     34,509    29,059     18.8% 
 Silver in dore        (oz)     84,473    72,321     16.8% 
------------------  ---------  --------  --------  --------- 
 Gold refined          (oz)     34,446    31,512      9.3% 
 Silver refined        (oz)     85,422    73,006     17.0% 
------------------  ---------  --------  --------  --------- 
 Gold sold             (oz)     31,479    29,557      6.5% 
 Silver sold           (oz)     91,224    79,416     14.9% 
 Gold price           ($/oz)     1,364     1,286      6.1% 
 Silver price         ($/oz)     15.0      15.4      -2.4% 
 Gold Revenue*        ($,000)   42,936    38,008     13.0% 
 Silver Revenue*      ($,000)    1,372     1,224     12.2% 
 Total Revenue*       ($,000)   44,308    39,231     12.9% 
------------------  ---------  --------  --------  --------- 
 

*Note: Unaudited figure

Totals may not add up due to rounding

Commentary

In Q3 2019, the positive gold price environment remained largely unchanged with the precious metal on track for its best year of price performance since 2010. The strong revenue generation for the period was supported by the continued favourable gold price environment.

A decrease in silver production numbers for the quarter was expected, and is the result of a different ore body being mined during the period. It is not material to the Group's overall financial performance. Management do expect higher silver - gold mineralisation at the depth in the ore body.

In January 2018 announced that its wholly owned subsidiary TZ had received a claim of RUB 140million (approximately US$2.2 million) from the Federal Service for Supervision of Use of Natural Resources, RosPrirodNadzor ("RPN") over payments for the disposal of waste materials following a site inspection in 2016. Having taken appropriate advice, TZ disputed the claim made by RPN in court. During the Period, the Court fully rejected RPN's claim. The deadline for the claimant to appeal the Court's resolution is 4 November 2019.

In Q3 2019, 7,500m underground drilling on the Main Zone at depth and 5,000m surface drilling on Vein 25 (East Zone) was successfully completed and the Company commenced updating its geological models and interpretation. As disclosed in the Company's Interim Results, preliminary internal estimates indicated the published JORC compliant in-situ resource may be overestimated; as a result, the Directors consider that the operational life of the Asacha Gold Mine beyond 2024 will need to be reviewed.

As the Company ramps up its near-mine exploration surrounding Asacha and development of Rodnikova, it has expanded its geological team significantly. The enlarged team is led by Oleg Dukov who previously worked at the Julietta Mine (also an epithermal gold deposit) owned by Kinross Gold Corporation.

The Company has engaged Competent Persons to produce updated JORC-compliant Mineral Resource Estimates for both Asacha and Rodnikova and expects to publish these during the fourth quarter of the year.

TSG intends to provide a production update for Q4 2019 in January 2020.

S 

 
 Contacts: 
 TSG 
  Stewart Dickson                                   [phone] 
 Arden Partners plc 
  Paul Shackleton (Corporate Finance) 
  Tim Dainton / Fraser Marshall (Equity Sales)    [phone] 
 Hudson Sandler (Financial PR) 
  Charlie Jack / Katerina Parker / Elfreda 
  Kent                                            [phone] 
 

About TSG

TSG is focused on low cost, high grade mining operations and stable gold production from its 100% owned Asacha Gold Mine in Far East Russia. The Company also holds the licence for the development and exploration of the Rodnikova deposit, one of the largest gold fields in South Kamchatka.

Additional information is available from the Company's website: www.trans-siberiangold.com

Market Abuse Regulations

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

Abbreviations

   g/t        grammes per tonne 
   oz        ounce 
   m         metre 

Disclaimer

This announcement contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should" or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets, fluctuations in interest and/or exchange rates and metal prices; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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October 22, 2019 02:00 ET (06:00 GMT)