Galane Gold Ltd. (TSXV:GG) released its financial results for the three and six months ended June 30, 2014. During Q2, the company produced 7,196 ounces of gold and incurred a net loss of $694,941.
Other Q2 highlights include:
- Operating cash cost of $1,201 per ounce (excluding royalties)(1)
- As disclosed in the Company’s press release of May 26, 2014 there was a failure of the SAG mill motor during the quarter. The Company installed a smaller spare motor but as a result the milling capacity was restricted to 70% of the normal capacity. This adversely affected the amount of ounces produced in the quarter which in turn affected the financial result and the operating cash cost per ounce.
- Cash balance has been maintained above $11,000,000 at the end of the first and second quarters of 2014.
- Cash flows from operating activities of $2,462,575.
- Cash flows used in investing activities of $2,926,412 which included development at Tau Underground plus pre-stripping at Golden Eagle and Tawana.
- Total ore mined of 137,114 tonnes at an average grade of 1.92 grams per tonne.
- The highlight being 3,384 tonnes of ore from Tau Underground at an average grade of 2.85 grams per tonne.
- Total ore milled of 181,011 tonnes at a head grade of 1.58 grams per tonne.
- Due to the failure of the SAG mill motor and the reduction in milling capacity the Company focused on mining and processing softer material. As a result less Tholo ore which has a higher grinding index and a higher grade was processed. This higher grade ore will be processed in future quarters when the Company has replaced the mill motor.
Ravi Sood, chairman of Galane, commented:
Despite the failure of the SAG mill motor and the resultant reduced production during the quarter we managed to maintain our cash position. In fact, we generated positive operating cash flows which enabled us to continue to self-fund the capital projects critical to our 5 year plan.
We expect that a replacement mill motor with the same capacity as the original motor will be installed within the next three to five weeks.
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