Focus Minerals chief executive Campbell Baird says the decision...

Focus Minerals chief executive Campbell Baird says the decision to divert cash from its Coolgardie gold operation to assets acquired from Crescent Gold was "money well spent", despite contributing to the miner's failure to meet guidance at its flagship mine.

Combined 2011 production from Focus' Coolgardie and Laverton operations came in close to 106,000oz, according to _WestBusiness _ calculations, but just 79,800oz of that was mined at Coolgardie - well short of the 100,000oz forecast at the start of the year.

Speaking as Focus' December quarterly joined the flood of reports scraping in by January 31, Mr Baird conceded the failure to hit guidance at Coolgardie was "disappointing".

"We said 100,000 (ounces at Coolgardie) and we only got 80,000, which was disappointing," he said.

"But when we took the decision to do the Laverton transaction a lot of the money we had set aside to really aggressively push the operation at Coolgardie went to the Crescent transaction and I believe that was well directed.

"We could see the potential and I think we've demonstrated very, very quickly the potential that's there. The downside has been that we did not achieve our target at Coolgardie."

Focus' operations have long trended towards the high end of the cost spectrum in the Goldfields and yesterday's quarterly confirmed that fact. Cash costs at Coolgardie snuck above the $1000/oz mark, up from $977/oz in the September quarter to $1076/oz. The higher cost Laverton operation showed some improvement, with costs down from $1596/oz to $1467/oz.

Across the wider WA industry it was a mixed quarter for gold miners, with a near record gold price providing some protection to margins even as costs rose.

It was a case of two quarters for two of the region's historically higher grade and lower cost gold miners in the region: Silver Lake Resources and Ramelius Resources, with the former reporting a 29 per cent drop in cash costs as the latter's skyrocketed.

Ramelius production was hit by a number of factors, including lower grades at Wattle Dam, crusher availability and the treatment of two external toll milling parcels.

The grim result - well flagged by the miner - should be a one off, with Ramelius saying its troublesome crusher has been fully repaired and Wattle Dam is showing a "marked grade improvement".

Production from Edna May, now under the Evolution Mining banner in the wake of the Conquest Mining-Catalpa Resources tie-up, also came in below guidance thanks to lower-than-expected mill throughput.

Meanwhile St Barbara, which bid unsuccessfully for Catalpa, reported an 18 per cent jump in production across its operations to 83,615oz.

However, it is still a far cry from the 500,000ozpa chief executive Tim Lehany wants the miner to be turning over by 2014 - a target it cannot reach through organic growth alone at its Southern Cross and Leonora mines.

Shares in Focus were 0.1¢ higher at 5.1¢, Silver Lake rose 4¢ to $3.67 and Evolution was up 2¢ to $1.82. Ramelius and Regis Resources lost ground, down 0.5¢ and 2¢ to $1.04 and $3.98 respectively. St Barbara jumped 7¢ to $2.34.


Link ....

http://au.news.yahoo.com/thewest/business/a/-/wa/12775515/focus-fails-to-hit-target/