The Gascoyne Resources Ltd (ASX: GCY) share price is surging today after the company released its latest production update for its Dalgaranga Gold Project.
At the time of writing, the gold miner's shares are up 6.38% to 50 cents. In contrast, most gold mining companies have seen their share price fall today due to the weakening price of gold overnight.
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How did Gascoyne perform?
The Gascoyne share price is breaking the trend today after the company delivered a robust result, reaching the upper range of its previously forecasted guidance.
For the December quarter period, Gascoyne achieved production of 20,381 ounces of gold. This represents a total of 40,695 ounces of the precious metal for the entire first-half of the 2021 financial year.
Gascoyne noted that it is likely to reach the upper-end of its guidance range of 70,000 to 80,000 ounces, based on its latest result. All-in sustaining costs is expected to come between $1,200 to $1,300 per ounce.
In other news, Gascoyne said that it has started additional drilling within 1.5km of the Dalgaranga gold processing facility. The resource extension program is aimed at extending the current 7-year mine life.
During the quarter, the company engaged into new gold hedges to service its debt obligations. Around 40% was hedged over the last 18 months, translating to a $7.5 million position at the end of 2020. In total, 53,722 ounces is currently hedged at an average price of $2,611 per ounce until June 2022.
Gascoyne recorded cash on hand of $37.3 million, and bank debt of $36.5 million at the end of the December period.
What did management say?
Gascoyne managing director and CEO Richard Hay welcomed the progress, saying:
Dalgaranga has achieved three consecutive quarters producing in excess of 20,000 ounces, resulting in 80,086 ounces being produced in calendar year 2020. This consistent performance is largely as a result of mining transitioning through the oxide zone and into fresh rock in the Gilbey's pit over the past 18 months.
Combined with a growing net cash position and a $7.5M in the money hedge position, Gascoyne is well placed to pursue its growth ambitions.
Gascoyne share price overview
The Gascoyne share price been up and down since being reinstated on the ASX in October last year.
Reaching as high as 67.5 cents on the day its shares were available for trading, the company's shares have been erratic since. The Gascoyne share price hit a low of 40.5 cents on 24 December 2020.
