I guess the cost of stripping the overburden from Majestic is what is adding to the cost of production??? anyone Angers
This extract from 5 June 2012 PRODUCTION GUIDANCE FY12 AND FY13
The increase in the cash cost of production is partly due to the accounting treatment of Integra’s stockpile, which is expected to contribute 550,000 tonnes to total plant throughput in FY13.
The accounting reatment requires that the cost of mining this 550,000 tonnes be included as a cash cost, even though Integra has already paid this cost.
This cost, accrued from previous expenditure, is approximately $66 per ounce for the stockpile feed.
Integra has invested some $60 million in building the current 1.9Mt stockpile and will, in FY13, seek to realise a proportion of its latent value.
In addition, Integra has not been immune to industry-wide increases in costs with some $1.5 million of additional electricity costs included in the FY13 forecast of which approximately 50% of the increase or $750,000 is attributable to the carbon tax.
For much of FY13, process facility feed will be sourced 50-50 from the high-grade Maxwells open pit and the stockpiled medium-grade ore. This will maintain a circa 2.7 g/t gold head grade.
Pre-stripping of the Majestic open pit is expected to commence in March and will provide initially modest volumes of higher-grade feed. This will replace the mill feed of the stockpiled ore from around May 2013 onwards and will result in higher feed grades into FY14 as Majestic hits full production.
As the Majestic gold deposit approaches full production, the cash cost of production is forecast to reduce to $750 per ounce in the June quarter 2013 as forecast feed grades increase to +3g/t gold.
IGR Price at posting:
37.0¢ Sentiment: Hold Disclosure: Held
