by Ewan Downie
We are working hard to build on the successes achieved across our many projects in 2017. An ongoing challenge inherent with mining operations is the constant need to replace and hopefully build on mineral reserves. With the recent completion of mining at the Phase 2 open pit at South Arturo, reserve and resource growth was a key focus at the Project in 2017. The substantial addition of mineral reserves and resources on several deposits at South Arturo confirms our belief this project will be a solid long-term producing asset that is expected to have a significant impact on our goal to become a mid-tier producer.
We have learned a lot with our experience at South Arturo. For one, a deposit doesn’t have to be big to be great! Despite the original reserve estimate for Phase 2 being only 155,000 ounces (Premier’s 40%) at the time of our purchase in 2015, the financial impact of our first open pit has been significant. We estimate that our sub-US$500 per ounce “All-in-Sustaining-Costs” (AISC) at South Arturo (to the end of Q3) puts the mine into the top 5% of gold mines around the world in 2017, and has made Premier a solid “Top Quartile” AISC gold producer. We enjoyed nearly US$800 margins at Phase 2 and estimate that in excess of 190,000 contained ounces of gold were ultimately mined - at least 23% more than anticipated.
This year will see reduced production at South Arturo as we transition from Phase 2 processing to the development of our next mining projects. In the first half of 2018 we expect to begin development of the Phase 1 mine, our second open pit operation, and in the second half of the year construction of the high-grade El Nino underground project. The addition of mineral reserves at both those sites is strong indication that Barrick is making meaningful progress moving those projects forward.
In the near future, Premier will be reporting updated mineral reserves and mineral resources for the Mercedes Mine, as well as our year end 2017 financial results. We invite you to keep an eye open for both.
Finally, Premier will have a solid presence at the Investor’s Exchange during PDAC from March 4–7 this year in Toronto. The Company’s Senior Management team welcomes the opportunity to meet existing and future shareholders to discuss ongoing project work and our plans for future growth.
We look forward to meeting you!