The fall in gold price in 2015 has hit hard at gold mining companies including Galane Gold which confirmed in its latest results. Galane Gold, which is a Botswana Stock Exchange-quoted company and runs Mupane Gold Mine, says gold sales in 2015 were 7,548 ounces less than in 2014. The company says “this was coupled with a reduction in the average gold price achieved between the two years of $126 per ounce.” As a result, revenue was $14.0 million less in 2015. For the period under discussion, Galane says it generated $27.8 million in revenue from the sale of 24,205 ounces of gold plus incidental silver at an average combined price of $1, 148 per ounce. This is in contrast to the $40.5 million revenue generated in 2014 from the sale of 31,753 ounces plus incidental silver at an average combined price of $1,274 per ounce.
Galane is in the process of transitioning from open pit mining to underground mining and the reduction in the amount mined is believed to be inconsistent with such ambitions. Galane - which has four operations at Mupane being Tholo and Kwena, Tau, Tekwane and Shashe Pencils and Golden Eagle – says it completed a new five year mine plan for the Mupane Property which will form the guide for the company’ short term goals and long term strategy. In 2016, Galane has announced that it intends to utilise three resources. The first of them is Tau Underground through which it intends to exploit the reported measured and indicated mineral resources of approximately 128,600 of gold of Tau through underground mining. Stoping is reported to have already commenced in August last year in the Eastern mineralised body.
Stoping on the main mineralised body is expected to start in the third quarter of 2016 and it is estimated that the company will process approximately 200,000 tonnes at an average grade 2.4 grams per tonne with the grade increasing when the main mineralized body is reached.The second of the resources that the company intends to utilise at Mupane during the year is the Low Grade Stockpiles. Under this resource, the company aims to process approximately 700,000 tonnes of low grade stockpiles at an average grade of 0.80 grams per tonne. At Tekwane, the third resource to be utilised this year, Galane looks to process about 23,000 tonnes at an average grade of 2.3 grams per tonne. The company says it will continue to strip mine the high grade areas and will use a screening plant at the mine site to reduce the tonnage and increase the potential grade to be delivered to the plant.
The company, however, has cautioned that Mupane mine plan is subject to change according to the prevailing gold price and says it will adopt the appropriate plan for that prevailing gold price environment.