Hambledon Mining (LON:HMB) produced 5,320 ounces of gold and 10,786 of silver in the three months ended June as it extracted waste material that will optimise the performance of the Sekisovskoye open pit in Kazakhstan.
In the same period last year it recovered just over 7,000 ounces of gold.
That said, gold production for the first six months of 2011 was 10 per cent ahead of the comparable period last year, the company said.
Today’s figures reflect a company undergoing a major transformation as it sets its sights on becoming a 100,000-ounce-a-year gold producer, and were described by Hambledon as “encouraging”.
Under new management, the company is now fully funded to exploit the huge potential of Sekisovskoye.
The grade mined should improve along with output as Hambledon moves to underground mining towards the end of this year.
Last year production from the open pit was 24,000 ounces of gold, a figure that is expected to rise to 26,000 this year.
The underground mine will add a further “22-23,000” to the company’s annual output in 2012, which is hoped will grow to the target 100,000 ounces by 2016.
In that time it is expected the cash costs of mining the gold will fall to around US$650 an ounce, from US$850 currently and to US$725 in the next 18 months.
The plan is not about cost cutting per se, but investment. That’s investment in new plant and machinery, waste facilities, power supply and metallurgical processing. Each has the capacity to bring down the costs.
Hambledon revealed today that expansion of the engineering workshops and improvements to the high and medium voltage electrical system have commenced.
The initial design of the new high voltage electrical line is complete and tenders have been issued for the installation of the line starting at the beginning of the fourth quarter, it added.
At the same time exploration of the property continues apace. As part of Hambledon’s 18-month drill programme, the results of the latest holes completed will be announced as soon as they are available, the company said.
The results released to date have been better than expected with an expansion of resources from all ore zones, it added.
Chief executive Daffern said this morning: “We look forward to updating shareholders with further results from our underground drill programme.
“We remain on track to begin underground extraction by the end of 2011’"