La Arena Phase I gold heap-leach project (Company)

La Arena Phase I gold heap-leach project (Company)

A top pick from Denver, Rio Alto (RIO:TSX) released gold production and sales numbers for the third quarter, ahead of their full quarter financials.  RIO produced and sold a totaled of 59,157 ounces in the third quarter bringing total production from their La Arena project in Peru to 143,940 ounces, year-to-date.  Third quarter production was 22% above Q2 production and set a new quarterly production record for the company.  The company reaffirmed full-year guidance of 190-210,000 ounces of gold, which is well within their reach now (and probably closer to the high-end of that range).

The company beat guidance on both tonnes and grade, coming in at 5 million tonnes of ore mined (versus planned of 4.07 million tonnes) and an average grade of 0.582g/t gold (versus planned of 0.561g/t gold).  After completing the cutback of the west-wall at the Calaorco pit, the company expects to have continued lower levels of stripping and other operating costs.  Furthermore, management anticipates being connected to the national energy grid by this time next year which should significantly reduce diesel consumption.

Management still intends on releasing the feasibility study of the Phase II copper-sulphide expansion project in Q2/2014 which should give better clarity on the cost saving initiatives they are exploring including in-pit crushing and conveying which would reduce LOM operating costs.

"Excellent progress has been made at La Arena during 2013. Not only have we achieved record quarterly gold production and on track to achieve our production guidance, but we also have been able to come up with a plan to continue high levels of gold production going forward whilst reducing our operating costs. 2013 was always going to be our worst year from a cost perspective because of the west-wall cutback but from the end of 2013 onwards, the project we will see a steady reduction of unit costs.” commented Alex Black, President & CEO.

Related: Key Takeaways and the Top 3 from Denver - CNL, RIO, BTO