Golden money tree growing for Tietto in West Africa

Tietto Minerals has notched up another quarterly production record at its Abujar gold mine in Côte d’Ivoire on Africa’s west coast, delivering 37,111 ounces – an increase of more than four per cent from the previous quarter.

The company’s quarterly results released today show its all-in sustaining cost (AISC) of production came in at US$1332 (AU$2068) per ounce, a slight increase from the previous six months of US$1311 (AU$2035).

But its March quarterly sales of 39,175 ounces at an average price of US$2054 (A$3190) per ounce topped the till up to the tune of a little more than US$80 million (AU$124 million). That meant a handsome 20 per cent increase on the previous period.

Tietto processed 1.232 million tonnes of ore at a plant recovery of 95 per cent to set the latest record – an increase from 35,553 ounces for the December quarter. Monthly milling rates averaged 410,000 tonnes during the quarter, up from the average of 381,000 tonnes in the previous six months.

Management says upgrades to the crushing circuit will enable it to further increase quarterly mill throughput from a total of 1.2 million tonnes to about 1.4 million tonnes. Work is expected to start this quarter, with commissioning slated for year’s end.

A total of 12.3 million tonnes of ore and waste was mined during the period, representing a 14 per cent increase from the previous record of 10.7 million tonnes of material mined in the December quarter.

With the wet season lurking, Tietto has beavered away 1.505 million tonnes of ore, equivalent to more than a full quarter’s ore milling requirements, to maintain its strong processing rates. Additional haul trucks are also expected to roll onto site in the coming months to further ramp up mining operations.

The impressive quarterly figures follow on from a string of continuous improvement initiatives that have included optimising blast parameters, allowing for improved crusher and mill throughput and at the same time minimising mining dilution, in addition to focusing on preventative maintenance of the processing plant to ensure high production rates are maintained.

Tietto ended the March quarter with US$56.8 million (AU$88.8 million) of cash, bullion and VAT receivable following further debt repayments of US$6.6 million (AU$10.3 million), payment for four months’ worth of mining, fuel and blasting and increasing mining rates to build stockpiles for a full quarter.

After additional debt payments of US$6.6 million (AU$10 million), the company will find itself in the enviable position of being debt-free.

Abujar is now generating very strong cashflow and benefiting highly from the record gold prices as we achieve full production at Abujar following substantial and continuing improvements across mining, milling and production. The team is now focussing on operating cost reductions through operating efficiencies as the team gains more experience with Abujar.

The company’s strong performance has garnered the attention of Zhaojin Capital Hong Kong, which has made a sustained bid since last October to acquire all of the Tietto shares that it does not already own. Zhaojin is Tietto’s second-biggest shareholder, with a little more than 7 per cent of the company.

Earlier this week, Zhaojin upped its initial offer of 58c a share to 68c – declaring the price would be its best and final offer. Tietto directors have unanimously recommended shareholders reject the revised offer, claiming it undervalues the company.

With the gold price continuing its stunning recent run, closing yesterday at an all-time Australian high of $3717 per ounce, Tietto is firm in its belief its share price could far exceed Zhaojin’s offer, with independent experts pegging the price somewhere between 79c and 92c.

Regardless of any firm takeover bid, one thing is certain – Tietto has timed its gold production run perfectly to reap the rewards of its endeavours in the West African nation.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au