St Andrew Goldfields posts record Q3 production

Toronto-based St Andrew Goldfields (TSE:SAS) announced Monday record production in the third quarter, and said it is on track to meet its 2011 target of between 65,000 to 75,000 ounces of gold.
The company operates the Holt, Holloway and Hislop mines, which are located on the eastern end of its 120 kilometre land package in the Timmins Gold Mining District. St Andrew is currently ramping up production activities in order to achieve annualized gold production of roughly 100,000 ounces starting in 2012.
During the third quarter, the company posted record gold production of 20,018 ounces from its three mines, 32 percent higher than the second quarter. Mill throughput improved around 6 percent in the period due to the implementation of new mill motor, with St Andrew's Holt Mill averaging 2,829 tonnes per day. The average mill recovery rate for the third quarter was 89.2 percent, with an average head grade of 3.12 grams per tonne.
The company said cash costs per ounce of gold sold are expected to fall in the range of US$970 to US$1,000, before royalties of approximately US$140 per ounce, for a total cash cost of US$1,100 to US$1,140 in the third quarter - a 16% improvement over the previous quarter.
The reduced costs are due to higher gold production, which was partially offset by a US$40 per ounce increase in royalty cost on account of a higher gold price in the quarter. Final unit costs will be determined when the company files its third quarter results on November 11, after market close.
St Andrew expects cash costs to continue to decrease quarter-over-quarter as production of its Holt mine progresses, and the development of its Smoke Deep Zone at the Holloway Mine is completed, the company said. Production from Smoke Deep is anticipated to start in the fourth quarter.
"We certainly have seen an improvement at our operations from the last quarter", said president and CEO, Jacques Perron.
"The development activities at the Holt Mine have improved considerably since the beginning of the third quarter. The Holloway Mine is performing as expected and development at the Smoke Deep Zone is continuing as planned. Production at Hislop during the quarter was as expected.
"We are very pleased with the progress at our operations and the anticipated decrease in costs, and will continue to forge ahead to make the fourth quarter even better."
At Holt, which produced over 10,000 ounces of the total gold output during the third quarter, the mining rate is progressing towards the steady target 1,000 tonnes per day by the end of the first quarter of 2012, anticipated to positively impact unit costs.
Meanwhile, at Holloway, updated mineral resources and reserve estimates for the Smoke Deep Zone are expected at year-end, as the area is developed through drilling.