Fed tests gold upleg
Gold’s outlook and fundamentals remain really bullish.
Teranga Gold (TSX: TGZ) on Thursday reported its financial, operating and development results for the quarter ended September 30, 2019. During Q3, the new Wahgnion mine in Burkina Faso was completed ahead of schedule and about $15 million under budget, the Toronto-based gold miner highlighted, noting that the mine would reach commercial production in the fourth quarter this year.
Teranga’s shares were up more than 5% at market open. The company’s market capitalization is approximately C$577.7 million.
Company-wide gold production, including pre-commercial production from Wahgnion, reached 61,975 oz in Q3 2019, compared to 56,376 oz in the prior-year period.
The Wahgnion mine, which is the company’s second gold operation after the Sabodala mine in Senegal, is expected to increase Teranga’s yearly production by 50% and double mine site free cash flows. Following first pour at the end of August, Wahgnion has already produced 10,620 oz.
“With another solid quarter at Sabodala and the start-up of production at Wahgnion, we are well on track to meet the higher end of our full-year production guidance for the company and the lower end of our cost guidance,” chief operating officer Paul Chawrun commented.
Revenues and gross profit were 11% and 37% higher respectively, at $71.4 million and $17.2 million, owing to higher gold prices. Net cash flow from Sabodala increased by 252% to $18.7 million, raising the year-to-date amount by 136% to $68.6 million.
The miner posted a net loss of $9.7 million during the quarter, down from a profit of $7.9 million a year earlier. Earnings were negatively impacted by cash and non-cash items related to the company’s financing for the Wahgnion mine.
For the full year, Teranga expects to achieve the higher end of its consolidated production guidance of 245,000-270,000 oz and the lower end of its cost per ounce guidance for 2019.
