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Bridge weight restrictions to impact Man Choch trucking operations

2nd December 2024

By: Creamer Media Reporter

     

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Alaska gold miner Contango has provided its 2025 gold production guidance, reaffirming expectations for strong cash flow despite facing rising operating costs at its Manh Choh mine. While the company projects production of 60 000 oz of gold in 2025, it also announced an upward revision to its all-in sustaining costs (AISC), driven by logistical challenges and higher processing expenses.

Contango’s share of the production from the Peak Gold joint venture (JV) is expected to yield about $50-million in cash distributions in 2025, assuming a $2 500/oz gold price. Despite the projected increase in AISC, from $1 116/oz to $1 625/oz for 2025, the company is confident the Manh Choh project will remain highly profitable, generating significant free cash flow over its expected four- to five-year mine life.

The increase in AISC is largely attributed to weight restrictions on the Chena Flood Plain bridge, a critical transport route for hauling ore, and higher-than-expected moisture content in the ore, which has slowed hauling capacity by around 20%. These operational hurdles have driven up costs, but have not dampened Contango’s long-term outlook.

“Overall, we are very pleased with the ramp up of Manh Choh production, expecting to produce 38 500 oz of gold on Contango’s account for 2024 and 60 000 oz of gold for 2025. While we are disappointed with these new weight restrictions impacting Manh Choh trucking operations, which has an impact on AISC, the Manh Choh project is expected to be very profitable over its current four- to five-year mine life, generating significant free cash flow to Contango,” said CEO Rick van Nieuwenhuyse.

Contango owns 30% of Peak Gold JV, with Kinross Gold subsidiary KG Mining holding the balance.

Edited by Creamer Media Reporter

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