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Golden beginning

Wednesday, 22nd September, 2010

Polymetals’ chief operating officer Tim Dobson at the White Dam Mine. The mine has reported production levels 30 per cent above budget while the prices for gold sales are at a 25 per cent premium to budget. Polymetals’ chief operating officer Tim Dobson at the White Dam Mine. The mine has reported production levels 30 per cent above budget while the prices for gold sales are at a 25 per cent premium to budget.

The majority owner of the White Dam gold mine has reported a glittering start to the mine’s two and a half year life.

Exco Resources, which has a 75 per cent stake in White Dam, said yesterday that in its first five months the mine had exceeded expected gold production by 30 per cent. Meanwhile gold prices have reached record highs allowing Exco to achieve a 25 per cent premium to its budgeted price for gold sales, with an average price of $1,382 per ounce.

White Dam had its first gold pour in April and so far Exco and its joint venture partner Polymetals have sold 9,981 ounces of the precious metal. The mine, 80 kilometres west of Broken Hill, was able to get off the ground after the JV agreed to a $16 million gold-linked loan with Barclays Capital.

The deal saw Exco and Polymetals agree to pay the loan back in two stages, including $13 million at a gold price of $1,151 per ounce. The managing director ofExco Resources, Michael Anderson, said the combination of increased production and higher return for gold would allow Exco to pay back the loan six months early producing good results for the JV.

“As a result the company expects to benefit from substantial cash flows from the project throughout 2011,” Mr Anderson said. Exco Resources shares have almost doubled to $0.55 since it began producing gold.

Meanwhile Exco said it was looking to extend the mine’s life a further 12 months with nearmine exploration, including drilling, at Vertigo, White Dam North and Ambush ongoing.

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