Genesis meets guidance and accelerates growth strategy
Make us a preferred source
Make us a preferred source on Google
The news: Gold miner Genesis Minerals has announced that it has met the midpoint of its production guidance and has begun preparations to reopen its Laverton site.
The numbers: Genesis has produced 134,451 ounces at an all-in sustaining costs (AISC) of $2,356 per ounce in FY24, reaching the midpoint of its guidance range of 130,000 to 140,000 ounces at $2,300 to $2,400 per ounce.
Over the last quarter it produced 34,617 ounces at an AISC of $2,698 per ounce. Genesis expects the 10-year production outlook to total 3 million ounces.
Genesis has set its FY25 guidance to 175,000 ounces at a mid-point AISC of $2,300 per ounce, though this will be updated in September.
The company is looking to reopen its Laverton site’s ahead of schedule and is part of Genesis’ growth plan to hit 325,000 ounces and drive AISC down to $1600 per ounce by FY29.
Genesis said it invested $34.6 million in exploration and growth capital during the June quarter to ramp up future production sooner.
It noted that it held $173 million in cash and bullion, had no bank debt, and expected to invest in new projects and infrastructure to expedite its growth ambition on an expedited timelines. Initiatives to expedite growth included the potential earlier re-start of Laverton mill, acceleration of underground development at Ulysses and ongoing early development works at Tower Hill.
Over the past 12 months its share price has rocketed 66.15% to $2.16.
The context: However, Genesis shares fell in May after announcing its new growth strategy, though analysts supported a higher valuation while cautioning that gold prices would be highly correlated with interest rate movements. On Wednesday, gold share prices gained due to the metal hitting a record high in price brought on by optimitism that the US Federal Reserve will cut interest rates later this year. Genesis said it looked to expedite investment in infrastructure to bring production forward while gold prices remain high.
The Laverton site is being developed to resume production as a safer and more sustainable mine, and Genesis projects it will overtake its current Leonora site for volume around FY32.
What they said: “It was a highly successful quarter on all fronts. We met both production and cost guidance while laying the foundations to accelerate our organic growth strategy,” managing director Raleigh Finlayson said.
“We have successfully established a very large inventory which underpins forecast predictions of 3 million ounces over 10 years. We now want to unlock more of its value sooner to capitalise on this enviable position and the buoyant gold price. By accelerating our self-funded growth strategy, we can drive rapid growth in free cashflow generation, creating greater shareholder value in the process.”
The source: ASX announcement
