Novo Resources (TSX: NVO) this morning provided production data for the second quarter of 2022. Gold production saw a decline from the first quarter of the year, despite more tonnes being processed as gold grades continue to slide.
Total gold production for the second quarter amounted to 12,610 ounces, versus 13,378 ounces in the first quarter. The decline is a result of falling gold grades, which dropped from 1.15 g/t to just 1.02 g/t gold. The company managed to process 398,830 tonnes of ore in the quarter, versus 394,382 tonnes in the first quarter.
Revenue during the quarter as a result fell on a quarter over quarter basis based on the preliminary data, with the second quarter seeing revenue of $29.7 million, versus $31.9 million in the prior quarter. Revenues came via the sale of 12,378 ounces. Production costs were not provided, however the company did indicate it currently has $74.8 million in cash on hand, while stating that supply chain issue continue to result in elevated production costs.
In terms of the third quarter’s expected production, the company reaffirmed that it expects to produce between 9,000 and 11,000 ounces in Q3, a result of the firm winding down phase one oxide operations at Beatons Creek. A further 1,000 ounces of gold are expected to be produced in the fourth quarter, with production coming from the drawdown of inventory.
Full production at the project is not expected to resume for 12 to 18 months, and even that is assuming the receipt of required approvals, which are still pending, as well as the completion of a feasibility study for the Fresh mineral resource, which is not anticipated to be completed until sometime in the fourth quarter.
“Despite operational setbacks with the Golden Eagle Plant in late May and the decision to pause operations at Beatons Creek, our safety and operational performance has been excellent, which is a credit to our operations team. As outlined in our recent operations update, we have a detailed growth plan in place and are focused on delivering the feasibility study in Q4 2022, continuing aggressive exploration, and working with government on the approvals to restart Beatons Creek,” commented acting CEO Mike Spreadborough.
Novo Resources last traded at $0.42 on the TSX.
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