Precious metals producer Great Panther Mining (TSE:GPR) (NYSEAmerican:GPL) has reported a 165% increase in revenue in the second quarter due to production from its new Tucano mine in Brazil.
The firm added the mine to its portfolio in March this year with the closing of the Beadell Resources acquisition.
Tucano achieved production guidance for the three months to 30 June at 29,899 ounces from over 5 million tonnes of mined material.
"Our results for the second quarter reflect the first full quarter of Tucano Gold Mine operations under our ownership," said James Bannantine, CEO of Great Panther.
"Tucano achieved our production guidance for the second quarter and drove a 165% increase in revenue and a 187% increase in mine operating earnings before non-cash items over the second quarter of last year."
Bannantine also noted that Tucano had started to show a further improvement in grade and recovery after the commissioning of the supplemental oxygen system at the end of April, which is expected to lead to an improvement in earnings for the rest of the year.
For the July month, Tucano is on track to meet the firm's third quarter guidance, he added.
Aside from the producing Tucano mine, Great Panther runs the Guanajuato mine complex - which consists of two mines Guanajuato and San Ignacio - and the Topia mine.
Tucano productivity to be higher in second half
Great Panther's revenue for the three months to 30 June was US$45.3 million, up 165% compared to the US$17 million reported in the second quarter of 2018, while its net loss increased to US$5.6 million in the period, from a loss of US$2.7 million a year earlier.
The increased deficit represented exploration, evaluation and development expenditure of US$4.5 million, and general and administrative (G&A) expenditures of US$3.2 million, the miner noted.
The group's consolidated AISC (all in sustaining cost) per gold ounce sold for the second quarter at US$1,154 was higher than the consolidated annual cost guidance of between US$1,030 and US$1,130 per gold ounce.
This was due to a number of factors, including processing at Tucano and the fact that this mine has a seasonal mine plan with higher productivity in the second half. Tucano's AISC is therefore expected to decline in the third and fourth quarters to achieve the annual guidance, the firm noted.
Looking ahead, Great Panther said it aimed to continue optimizing Tucano operations, which includes implementing cost saving and efficiency measures to improve profitability and reduce cash cost and AISC.
In Mexico, it is pursuing a multi-mine optimization strategy under which production is being sourced entirely currently from the San Ignacio mine, while the exploration program at Guanajuato will continue in the third quarter. The aim is to bring the Guanajuato mine back into production in 2020.
Shares in Great Panther in Toronto added 2.6% to stand at C$1.18 each.
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