Premier Gold Reports Q2 Production, Announces 40% Workforce Reduction At Mercedes
Premier Gold Mines (TSX: PG) reported its second quarter production results for its 40% owned South Arturo Mine, located in Nevada this morning, while also announcing production cuts at its Mercedes Mine, located in Sonora, Mexico.
Production totaled 4,765 ounces of old at South Arturo, which was impacted by the shutdown of the Goldstrike roaster during the quarter due to the pandemic. This compares to 7,489 ounces of gold production in the first quarter, along with 625 ounces of silver. The balance of ore produced during the period was stockpiled, and currently awaits processing.
At the Mercedes Mine however, production was effectively nil. The company saw the mine go into care and maintenance mode prior to the end of the first quarter, and remain that way for “most” of the second quarter. Operations are said to have restarted gradually at the end of the second quarter, with ore that was produced on start up stockpiled until processing resumed in the month of July. The result, is zero production for the quarter, as compared to 11,587 ounces of gold and 52,507 ounces of silver being recovered during the first quarter, which was a quarterly decrease at the time of announcement.
More significantly however, is that the shutdown enabled Premier Gold to conduct technical work and revise mine plans at the Mercedes project. Restarted operations as a result have been limited to the Lupita and Diluvio zones, with the operation now optimizing production to its reserve base rather than processing capacity.
The impact overall is that the daily mining rate will fall from 2,000 tonnes per day to that of 1,200 tonnes, while consolidating production to one mine portal from five. The processing plant will also be operated on a “campaign basis.” The impact to staffing is that 40% of employees will be laid off, while 75% of mining contractors will be terminated in a bid to enhance operating efficiencies, while minimizing dilution and improving ore quality. Future exploration and delineation will enable production to increase over time.
Full financial results are scheduled to be released before market open on August 5, 2020.
Premier Gold Mines last traded at $2.55 on the TSX.
Information for this briefing was found via Sedar and Premier Gold Mines. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
