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Superior Gold Reports Sustained Production in Third Quarter of 19,379 Ounces and Cash Position Up 18% to $20.5 Million

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Superior Gold Reports Sustained Production in Third Quarter of 19,379 Ounces and Cash Position Up 18% to $20.5 Million

 

 

 

 

 

COMMENCMENT OF OPEN PIT MINING AT PERCH ON SCHEDULE

 

 

Superior Gold Inc. (TSX-V:S GI) (OTCQX: SUPGF) announced detailed production results for the third quarter of 2021 for the Company’s 100%-owned Plutonic Gold operations, located in Western Australia.

 

Third Quarter Highlights

 

  • Recorded zero incidences of COVID-19 infection for a seventh consecutive quarter
  • Production of 19,379 ounces, a marginal increase over the prior quarter and 23% increase over the prior year period
  • Stope grade of 2.95 g/t gold in the third quarter and 3.23 g/t year to date as the Company continues to target an average stope grade of 3.0 g/t gold
  • Commenced open pit mining at Perch on schedule
  • Mill throughput for the quarter increased by 13% to 405,315 tonnes relative to the second quarter
  • Continued exploration success including 42.2 g/t over 5.6 metres and 17.7 g/t over 6.4 metres as the 1.6km long Western Mining Front is opened at Plutonic1
  • Improved financial position with cash and cash equivalents increasing by $3.1 million to $20.5 million at the end of the third quarter

 

Chris Jordaan, President and CEO of Superior Gold stated: “We are pleased that the actions we have taken on the operational front have led to a fifth consecutive quarter of improving production at our Plutonic Gold Operations.  Our third quarter production of 19,379 ounces, represents a slight increase quarter-over-quarter and 23% year-over-year increase (Figure 1).  Year to date production is 56,338 ounces and we are tracking towards the upper end of our 2021 production guidance.  The strategic projects and operational initiatives that we put in place last year have resulted in a steady improvement in our performance as we continue to target and sustain an average underground stope grade of 3.0 g/t gold as well as increase our surface grades by optimizing and mining our open pits. In addition, the Company is also reaping benefits from the block model improvements in progress to better predict the spatial positioning of the ore. As a result, larger more productive stopes are now being identified and mined. This is evidenced by the increased tonnage production from underground stopes, up 12.3% on the previous quarter augmenting feed to the mill and combined with additional open pit feed being available, mill throughput increased 12.8% quarter over quarter.

 

An operational review of a number of growth projects is ongoing in order to enhance Plutonic’s sustainable, long-term success. These projects include, in part, a continued focus on our open pit operations with the mining at Plutonic East and the commencement of mining at Perch.  The higher-grade open pit feed replacing low grade legacy stockpiles in conjunction with opening new high-grade and more productive underground mining fronts are expected to result in a continued improvement in our ounce profile moving forward. Over the course of the year, we have provided a number of important exploration updates that continue to point towards the identification of higher-grade stopes on the operational front in the near future. Ongoing geological initiatives have improved our understanding of the mineralization at Plutonic and specifically the northwest trending faults that control the concentration of higher-grade gold mineralization.

 

The operational improvements implemented plus our improved understanding of the mineralization at Plutonic, combined with the full repayment of our gold loan in the second quarter, has resulted in a significant improvement in our ability to generate free cash flow in the third quarter. It is expected that increased production from higher-grade underground mining areas, continued feed from the Perch open pit as well as increased milling rates will enable an increase in cash flow over the course of 2021 and beyond.”

 

The Company expects to release its complete financial and operating results for the third quarter in November 2021.

 

Third Quarter Production Details

 

Preliminary production details are summarized in the table below.

 

 

Operating Parameters1 Three Months Ended

September 30, 2021

Nine Months Ended

September 30, 2021

Stope material mined (Tonnes) 175,143 468,339
Stope grade mined (g/t Au) 2.95 3.23
Development material mined (Tonnes) 35,668 141,601
Development grade mined (g/t Au) 1.15 1.39
Surface material milled (Tonnes)2 198,268 509,877
Surface material grade (g/t Au)2 0.75 0.58
Total material milled (Tonnes) 405,315 1,120,396
Grade milled (g/t Au) 1.72 1.80
Gold recovery (%) 86 87
Gold Produced (ounces) 19,379 56,338
Gold Sold (ounces) 19,282 55,918
Cash and Cash Equivalents ($ million) 20.5 20.5

 

1 Numbers may not add due to rounding
2 Surface material milled in Q3 2021 is feed from Plutonic East.
 

 

 

Commencement of Open Pit Production on Schedule

 

As part of the Company’s strategy to expand production and fully utilize the existing infrastructure at the Plutonic Gold Operations, work continued during the third quarter of 2021 on optimizing several potential future open pit sources and finalizing resources and scheduling for Perch and Hermes South. The Company commenced mining of the Plutonic East open pit in the second quarter as scheduled and continued mining activities through the third quarter. The Company aims to utilize the production from these open pits plus the potential Main Pit push-back, along with operational improvements from the underground, to maximize the Plutonic Gold Operations’ ability to generate significant free cash flow.

 

Expanding into New Mining Fronts

 

During the third quarter of 2021, the Company continued with its underground exploration drilling program.  It provided an exploration update for the Western Mining Front containing important high-grade drill results from its underground drill program which is a key component of the Company’s strategy to expand into new underground mining fronts, improve mining grades and productivity, and reduce reliance on remnant mining.

 

The drill results released on August 17, 2021, showed continued extensions of the Western Mining Front from the Caspian zone, down through the Indian and Baltic zones to the Baltic extension – covering up to a 1.6 kilometre long northwest extension of the Western Mining Front. The results support the hypothesis that the highest grades at Plutonic are controlled by the northwest trending faults. In addition, the results are adjacent to existing underground infrastructure, thus requiring minimal capital expenditures to infill drill and develop the area. Key results such as drill hole UDD23656, which intersected 13.7 g/t gold over 8.8 metres, drill hole UDD24342, which intersected 14.8 g/t gold over 13.4 metres, and drill hole UDD24141, which intersected 42.2 g/t gold over 5.6 metres, give the Company further confidence in mining higher grades at Plutonic in the future.2 These results announced in each of the past 3 quarters support our view that the Western Mining Front is potentially an important new area for future production at Plutonic. The Company expects to provide additional exploration updates over the coming months.

 

Qualified Person

 

Scientific and technical information in this news release has been reviewed and approved by Ettienne Du Plessis, who is a “qualified person” as defined by NI 43-101. Mr. Du Plessis is not independent of the Company within the meaning of NI 43-101.

 

About Superior Gold

 

Superior Gold is a Canadian based gold producer that owns 100% of the Plutonic Gold Operations located in Western Australia. The Plutonic Gold Operations include the Plutonic underground gold mine and central mill, numerous open pit projects including the Plutonic Main Pit push-back project, the Hermes open pit projects and an interest in the Bryah Basin joint venture. Superior Gold is focused on expanding production at the Plutonic Gold Operations and building an intermediate gold producer with superior returns for shareholders.

 

Posted October 12, 2021

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