COVID-19 impacts Pogo Q1 gold production
Output drops due to slowing of underground development North of 60 Mining News – April 23, 2021
Last updated 4/22/2021 at 3:25pm
Northern Star Resources Ltd. April 21 reported that COVID-related challenges continue to impact gold production at its Pogo Mine in Alaska.
The underground gold operation about 85 miles southeast of Fairbanks, Alaska produced 41,494 ounces of gold during the first quarter of 2021, which is down about 22% from the 53,375 oz recovered during the final quarter of 2020.
Northern Star says the drop in gold production is due to earlier impacts to the rate of underground development at Pogo, which limited the quantity and quality of ore available to the mill.
This is largely attributed to the lack of workforce availability due to COVID-19.
"Our team managed more than 100 cases of COVID during the quarter," said Northern Star Resources Executive Chairman Bill Beament, referring to the final three months of 2020. "This has inevitable impacts on productivity at many levels."
Northern Star's current focus at Pogo is accelerating the advancement of declines to enable access to additional stoping horizons, and setting up diamond drill platforms to further expand the resource.
The Australian company said development advances were especially strong in March with a new monthly record of over 1,500 meters, which is anticipated to result in access to higher grade areas and open more production fronts.
The company also continues to work on mill upgrades that will expand production rates to 1.3 million metric tons per year, which is a 30% increase over the current 1-million-metric-ton-per-year capacity. These production facility upgrades at Pogo are slated for completion early in the second half of this year.
Improvements to the underground and surface water management systems are also being established to handle the increase of water as summer approaches at the Interior Alaska mine, which will provide drill access for potential lode extensions.
The lower gold production impacted the costs and cash flow at Pogo during the first three months of 2021. During the quarter, the Alaska operation sold 40,008 oz of gold at all-in sustaining costs of US$1,716/oz.
As a result, the mine operating cash flow was negative US$1.6 million (negative A$2 million) and when you include US$6.2 million invested in growth capital at Pogo, the mine's cash flow was negative US$7.8 million (negative A$10 million) for the first quarter of 2021.