Alacer Gold declares Q3 profit of $34.8 million, shares up

Alacer Gold Corp. [ASR-TSX; AQG-ASX] shares rallied Tuesday October 29 after the company reported a third quarter profit of US$34.8 million or 12 cents a share.

Alacer is a low-cost gold producer holding an 80% interest in the Copler Gold Mine in central Turkey, which is operated by Anagold Madencilik Sanayi ve Ticaret A.S., a unit of Alacer. The remaining 20% is owned by Lidya Madencilik Sanayi ve Ticaret A.S. The mine is located approximately 1,100 km southeast of Istanbul.

Since 2010, the Copler Gold Mine has been processing oxide ore via a heap leach operation. It produced 170,865 ounces of gold in 2018. However, the oxide ore is progressively being exhausted and the mine started processing sulfide ore in November, 2018 using pressure oxidation.

In May, 2016, construction commenced on the Copler Sulfide Expansion Project. Commercial production was achieved in June, 2019.  Now that it is in operation, it serves as a springboard for Alacer’s next phase of growth.

Meanwhile, on Tuesday, Alacer announced an increase to the 2019 Copler oxide plant production guidance range to 150,000 to 160,000 ounces. That’s up from the previous forecast of 125,000 to 145,000 ounces. “The increase to the oxide production guidance is a result of stacking ore from the continuing in pit exploration success, better than predicted outcomes from the blended ore program and positive reconciliation of the oxide ore,” the company said in a press release.

The 2019 gold production forecast for the sulphide plant remains at between 230,000 and 270,000 ounces.

“Our operations are strong at both our oxide and sulphide plants, with year-to-day production of 290,127 ounces at consolidated all-in-sustaining cost of US$714 an ounce,” said Alacer Gold President and CEO Rod Antal. “This performance has resulted in significant free cash flow generation of US$138 million and has led to a rapid reduction in our debt to US$110 million at the end of the quarter,” he said.

“Subsequent to the end of the quarter, net debt has been further reduced to below US$90 million.”

Antal went on to say that 2019 is shaping up to be a memorable year for the company as it looks to achieve its upgrade consolidated  production guidance of 380,000 to 430,000 ounces and all-in sustaining costs of U$675 to US$725 an ounce.

Alacer Gold shares advanced on the news, rising 4.3% or 23 cents to $5.63. The shares are currently trading in a 52-week range of $2.04 and $6.25.

Alacer recently announced a maiden mineral resource estimate for the Ardich oxide gold deposit, which is located approximately 6 km northeast of its Copler Gold Mine in east-central Turkey.

The total measured and indicated resource at the Ardich oxide deposit stands at 294,000 ounces of gold (6.9 million tonnes at 1.32 g/t gold). On top of that is an inferred resource of 85,000 ounces gold (2.2 million tonnes at 1.2 g/t gold).

The Ardich gold property is a listwanite-dolomite-hosted gold replacement deposit with mineralization occurring along thrust zones between listwanite, ophiolites, hornfels and limestones. The mineralization is predominantly oxide with sulfide mineralization confined to limited pyrite rich jasperoid bodies.

Opportunities exist to process Ardich oxide ores at the existing and expanded Copler oxide plant facilities or to construct standalone processing facilities at Ardich, the company said.

A feasibility study will be completed in 2019 for a 20 million tonne incremental expansion of the Copler heap leach pad.

In addition, options for standalone facilities and heap leach pad facilities of varying size (in excess of 50 million tonnes) are being explored should the Ardich deposit grow to the full extent of the 2-km mineralized target.